Document:

EX-10.1

CONFIDENTIAL SEVERANCE AGREEMENT AND FULL AND GENERAL RELEASE

The purpose of this Confidential Severance Agreement and Full and General Release (this
“Agreement”) is to set forth the terms and conditions of Employee’s separation from employment with
The Kansas City Southern Railway Company, a Missouri Corporation (the “Company”).

The Company and Scott Arvidson (“Employee”) agree as follows:

1. Separation: Employee’s separation from employment with the Company is effective August
7, 2009 (the “Separation Date”). Employee’s separation will be characterized by the Company as a
voluntary resignation. All documents maintained in Employee’s official personnel file will reflect
voluntary resignation. All documents regarding the investigation which led to Employee’s
separation will be maintained separate from Employee’s official personnel file. The Company will
not protest or object to any claim for unemployment compensation or other unemployment benefits
made by Employee with the Railroad Retirement Board, to the extent any such claim is made outside
the period of severance pay. This provision, however, in no way limits the Company’s ability to
properly and truthfully respond to any request for information or other inquiry made by the
Railroad Retirement Board or any other government entity. The Company (or the Company’s third
party employment verification vendor) will respond to any employment verification request by
providing Employee’s dates of employment, positions held, and nature of separation as voluntary
resignation.

2. Benefits Payable: In addition to Employee’s regular compensation and earned but unused
vacation pay through the Separation, the Company will provide Employee with severance equal to (a)
$336,385.92, less applicable taxes and withholdings and (b) continuing group health coverage for
Employee and/or his or her eligible dependents for the 12 month period of separation pay, provided
Employee timely elects to continue such coverage for himself or herself and/or his or her eligible
dependents pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) and
continues to timely pay the cost of such coverage at the rate that would be charged to an active
employee with similar coverage, (collectively referred to as the “Severance”). Payment of the
Severance will commence after the expiration of the Revocation Period as set out in Section 14(f)
and will be made in 12 substantially equal installments, on the regular payroll cycle, through
Employee’s usual payroll method. Employee shall receive, under separate cover, information
concerning rights to continue Employee’s participation in any Company-sponsored group health
insurance plan, in accordance with COBRA. Employee’s benefits in all other Company-sponsored
benefit plans shall terminate in accordance with the terms and conditions of such plans. Employee
acknowledges that the Severance is good and valuable consideration in exchange for this Agreement,
and further acknowledges and agrees that: (i) other than the Severance, the Company has paid
Employee all compensation due and owing to Employee related to any employment relationship between
Employee and the Company, including, without limitation, all salary, pay, commissions, bonuses,
vacation pay, paid time off, and (ii) that, as of the Separation Date, Employee is no longer an
employee of the Company and may under no circumstance represent him/herself to be in any way
connected with or a representative of such company.

3. Release: In consideration of the Severance set forth above and other valuable
consideration set forth in this Agreement, and as a material inducement to the Company to enter
into this Agreement, Employee agrees, for him/herself, Employee’s heirs, executors, administrators,
representatives, successors and assigns and anyone claiming by, through or for Employee, or anyone
making a claim on Employee’s behalf (for purposes of this Section, “Employee”), to irrevocably and
unconditionally waive, release and forever discharge the Company, and its respective present, past,
and future parents, subsidiaries, and affiliated corporations, divisions, affiliates, predecessors,
principals, partners, joint venturers, representatives, successors, and assigns, and its past and
present owners, directors, officers, employees, stockholders, attorneys, agents, and insurers, and
all persons acting by, through, under or in concert with any of them and all other persons, firms
and corporations whomsoever (collectively “Released Parties”) from any and all liability, actions,
causes of actions, common law claims, statutory claims under local, state or federal law including
but not limited to any rights and claims under any state’s human rights act, civil rights laws, or
similar law, any state’s wage payment act or similar law, any wage payment act or similar law, any
law governing any aspect of employment, Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§ 1981, the Employment Retirement Income Security Act, the Consolidated Omnibus Budget
Reconciliation Act, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act of
1938, the Family & Medical Leave Act of 1993, the Age Discrimination in Employment Act of 1967, the
Age Discrimination in Employment Act Amendments of 1990 (sometimes known as the “Older Workers
Benefit Protection Act”), the Equal Pay Act of 1963, the Worker Adjustment Retraining Notification
Act of 1988, and any amendment thereto, the Federal Employer’s Liability Act; all claims
arising from labor protective conditions imposed by the Interstate Commerce Commission or the
Surface Transportation Board; all oral or written contract rights, including any rights under an
employment agreement, any Company incentive or benefit plan or program, including unvested stock
options, and ANY RIGHTS UNDER ANY COLLECTIVE BARGAINING AGREEMENT, INCLUDING ANY SENIORITY
RIGHTS, BUMPING RIGHTS AND REINSTATEMENT RIGHTS, RIGHTS TO FILE OR ASSERT A GRIEVANCE OR OTHER
COMPLAINT, RIGHTS TO A HEARING (whether before any company official, any system, group, regional or
special adjustment board, the National Railroad Adjustment Board, or any other entity), OR RIGHTS
TO ARBITRATION UNDER SUCH AGREEMENT; and any claim under any local, state or federal
statute, regulation, rule, ordinance or common law, breach of contract claims, breach of any
collective bargaining agreement claims, and all demands, damages, expenses, fees (including
attorney’s fees, court costs, expert witness fees, etc.), which Employee may now have against the
Released Parties and/or have on account of, arising out of, or in connection with all interactions,
transactions or contracts, express or implied, between Employee and the Released Parties,
including, but not limited to Employee’s employment and the termination thereof, through the date
of this Agreement.

Nothing in this Agreement shall limit or impede Employee’s right to file or pursue an
administrative charge with, or participate in, any investigation before the Equal Employment
Opportunity Commission (“EEOC”), any Federal, State, or Local Agency, or to file a claim for
unemployment benefits, and/or any causes of action which by law Employee may not legally waive.
Employee agrees, however, that if Employee or anyone on Employee’s behalf, brings any action
concerning or related to any cause of action or liability released in this agreement, Employee
waives Employee’s right to, and will not accept, any payments, monies, damages, or other relief,
awarded in connection therewith.

THIS MEANS THAT BY SIGNING THIS AGREEMENT EMPLOYEE WILL HAVE WAIVED ANY RIGHT EMPLOYEE MAY HAVE TO
RECOVER IN A LAWSUIT OR OTHER ACTION AGAINST RELEASED PARTIES, INCLUDING BUT NOT LIMITED TO THE
COMPANY, BASED ON ANY ACTIONS OR OMISSIONS MADE BY THE RELEASED PARTIES, INCLUDING BUT NOT LIMITED
TO CLAIMS WHICH IN ANY WAY ARISE FROM OR RELATE TO EMPLOYEE’S EMPLOYMENT RELATIONSHIP AND THE
SEPARATION OF EMPLOYEE’S EMPLOYMENT WITH THE COMPANY, UP TO THE DATE OF THE SIGNING OF THIS
AGREEMENT.

4. Covenant Not to Sue: Employee agrees and covenants, except as allowed by law with
regard to this Agreement, not to sue or file any claims against the Released Parties with regard to
any matters arising prior to the execution of this Agreement. Employee represents and warrants
that no such claim has been filed to date.

5. Mutual Non-Disparagement: Employee agrees not to in any way or to any extent slander,
libel, disparage, or otherwise impair the reputation, goodwill, or commercial interest of the
Company and the Released Parties, including but not limited to their, officers, directors,
management, shareholders, and/or the Company’s or the Released Parties’ performance, work product
or method of operating. Employee represents and warrants that no such disparagement has occurred
to date. Employee agrees that he/she will not, without first obtaining written approval from the
Company: (i) make any public statement in the nature of a press release or media interview with
respect to any aspect of Employee’s employment, or the termination of such employment, with the
Company or any of its operating units, affiliates or subsidiaries, or (ii) make any statement,
written or oral, with respect to past or projected future financial performance of the Company or
any of its operating units, affiliates or subsidiaries. Except as required by lawful subpoena or
other legal obligation, the Company agrees that its directors, officers, and executives will not to
in any way or to any extent slander, libel, disparage, or otherwise impair the reputation of
Employee.

6. Confidential Information:

(a) Employee understands and agrees that Employee was given Confidential Information (as
defined below) during Employee’s employment with the Company relating to the business of the
Company and its affiliates. Employee shall maintain in strictest confidence and not use in
any way (including without limitation in any future business relationship of Employee),
publish, disclose or authorize anyone else to use in any way, publish or disclose, any
Confidential Information relating in any manner to the business or affairs of the Company or
any of its affiliates or customers. Employee further agrees not to remove or retain any
calculations, letters, documents, lists, papers, or copies thereof, which embody
Confidential Information of the Company or any of its affiliates, and to return, any such
information in Employee’s possession. If Employee discovers, or comes into possession of,
any such information after Employee’s termination, Employee shall promptly return it to the
Company.

(b) For purposes of this Agreement, “Confidential Information” includes, but is not limited
to, information in the possession of, prepared by, obtained by, compiled by, or that is used
by the Company or any of its affiliates or customers and (i) is proprietary to, about, or
created by the Company or any of its affiliates or customers; (ii) gives the Company or any
of its affiliates or customers some competitive business advantage, the opportunity of
obtaining such advantage, or disclosure of which might be detrimental to the interest of the
Company or any of its affiliates or customers; and (iii) is not typically disclosed by the
Company or any of its affiliates or customers, or known by persons who are not employed by
the Company or any of its affiliates or customers. Without in any way limiting the
foregoing and by way of example, Confidential Information shall include: information
pertaining to business operations of the Company or any of its affiliates or customers such
as financial and operational information and data, operational plans and strategies,
business and marketing strategies, pricing information, plans for various products and
services, and acquisition and divestiture planning. During the severance period, Employee
shall notify Human Resources in writing of the name and address of Employee’s future
employer, if any.

7. Injunctive Relief/Breach of This Agreement: In the event of any breach of this Agreement
by Employee, the Company shall be entitled to terminate any and all remaining Severance hereunder
and shall be entitled to pursue such other legal and equitable remedies as may be available.
Employee acknowledges, understands and agrees that the Company and its affiliates will suffer
immediate and irreparable harm if Employee fails to comply with any of Employee’s obligations under
this Agreement, and that monetary damages alone will be inadequate to compensate the Company or any
of its affiliates for such breach. Accordingly, Employee agrees that the Company and its
affiliates shall, in addition to any other remedies available to it at law or in equity, be
entitled to temporary, preliminary, and permanent injunctive relief and specific performance to
enforce the terms of this Agreement without the necessity of proving inadequacy of legal remedies
or irreparable harm or posting bond.

8. Property: Employee agrees that Employee has returned all tangible and intangible
property and Confidential Information, as defined in Section 6, belonging to the Company. Such
property includes but is not limited to any and all financial records and data; any written
material in Employee’s possession including but not limited to product information, engineering
information, customer lists, and the Company policies and procedures; automobiles; credit cards;
keys; equipment; product and/or customer lists and data; contracts; personnel information; project
development information; written proposals and studies; and proprietary software purchased or
developed by or for the benefit and use of the Company. Employee further represents and warrants
that Employee has not retained any copies, electronic or otherwise, of such property.

9. Miscellaneous: Employee agrees to make him/herself reasonably available to the Company
to respond to requests by the Company for information pertaining to or relating to the Company, any
entity related to the Company, or any of its agents, officers, directors, or employees. Employee
will cooperate fully with the Company in connection with any and all existing or future
depositions, litigation, or investigations brought by or against the Company, or any entity related
to the Company, or any of its agents, officers, directors, or employees, whether administrative,
civil, criminal in nature, in which and to the extent the Company deems Employee’s cooperation
necessary. In the event Employee is subpoenaed in connection with any litigation or investigation,
Employee will immediately notify the Company. Reasonable actual expenses incurred by the Employee
and pre-approved by the Company arising from these matters will be reimbursed by the Company upon
sufficient proof. For any assistance requested after the 12-month period in which Employee is
receiving Severance Pay, Employee will be paid, as an independent contractor, at a rate of $161.73
per hour. Employee also agrees not to seek employment with the Company, its parent companies,
subsidiaries, corporate affiliates or successors, at any time in the future, and that if Employee
inadvertently applies for employment, he or she shall immediately withdraw his/her application upon
notification that the entity to which he or she is applying is either owned by the Company, a
parent company, a subsidiary, a corporate affiliate, or successor of the Company.

10. Successors: This Agreement binds and inures to the benefit of Employee’s heirs,
administrators, representatives, executors, successors and assigns, and all Released Parties and
their heirs, administrators, representatives, executors, successors and assigns.

11. Entire Agreement/Modification: This Agreement shall be construed as a whole according
to its fair meaning and not strictly for or against Employee, the Company or any Released Party.
This Agreement sets forth the entire Agreement between Employee and the Company, with respect to
the subject matter addressed herein, and may not be modified except by a writing signed by both
Employee and an authorized official of the Company.

12. Severability: The parties hereto believe that the provisions of this Agreement are
reasonable and fair in all respects, and are necessary to protect the interests of the parties.
However, in case any one or more of the provisions or parts of a provision contained in this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect in
any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other
provision or part of a provision of this Agreement or any other jurisdiction, but this Agreement
shall be reformed and construed in any such jurisdiction as if such invalid or illegal or
unenforceable provision or part of a provision had never been contained herein and such provision
or part shall be reformed so that it would be valid, legal and enforceable to the maximum extent
permitted in such jurisdiction.

13. Controlling Law and Jurisdiction. The validity, interpretation and performance of this
Agreement shall be subject to and construed under the laws of the State of Missouri, without regard
to principles of conflicts of law.

14. Employee acknowledges that:

(a) Employee is specifically releasing any and all claims, whether known or unknown, which are
based on the Age Discrimination in Employment Act;

(b) This Agreement does not waive rights or claims that arise after the date this release is
executed;

(c) Employee has signed this Agreement of Employee’s own free will in exchange for the
consideration stated above, which Employee acknowledges constitutes full, fair, reasonable and
adequate consideration, to which Employee is not otherwise entitled, for the affirmations,
certifications, representations and promises made herein;

(d) Employee has carefully read and fully understands all the provisions of this Agreement,
including Section 14 of this Agreement entitled “Provisions Required by the Age Discrimination in
Employment Act/Older Workers Benefit Protection Act,” and that Employee has been afforded at least
twenty-one (21) days to consider the terms hereof; Employee agrees that changes made to this
Agreement at Employee’s request do not restart the twenty-one (21) day period which Employee has to
review this Agreement;

(e) Employee has been advised in writing by this Agreement that Employee should consult with
an attorney prior to executing this Agreement;

(f) Employee understands and agrees that this Agreement shall not become effective or
enforceable until seven (7) calendar days after it is executed by Employee and during that seven
(7) day period (the “Revocation Period”) Employee may revoke this Agreement. If Employee wishes to
revoke this Agreement, Employee agrees to do so in writing within seven (7) days and deliver such
written notice of Employee’s intent to revoke to John Derry, Senior Vice President Human Resources.
If Employee does not timely revoke, this Agreement goes into force and effect on the eighth day
following its execution; and

(g) Employee also understands that should Employee decide to revoke this Agreement within
seven (7) days of signing, the Agreement will not be effective and the monies and other
consideration which the Company has promised to provide Employee shall not be paid or provided.

15. Employee further acknowledges that pursuant to paragraph 16 of Employee’s Employment Agreement
executed as of May 1, 2000, an Amendment to Employment Agreement executed as of January 1, 2001, an
Addendum to Employment Agreement executed September 15, 2004, and an Addendum to Employment
Agreement effective January 1, 2009 (collectively, the “Agreement”), Employee has previously agreed
to, and is bound by certain Restrictive Covenants which are incorporated herein by reference and
which apply to Employee regardless of whether Employee signs this Confidential Severance Agreement
and Full and General Release.

16. ARBITRATION. EMPLOYEE HEREBY WAIVES AND SHALL NOT SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, CLAIM, COUNTERCLAIM, DEFENSE OR OTHER LITIGATION OR DISPUTE UNDER OR IN RESPECT OF THIS
AGREEMENT. EMPLOYEE AGREES THAT ANY SUCH DISPUTE RELATING TO OR IN RESPECT OF THIS AGREEMENT,
(OTHER THAN INJUNCTIVE OR EQUITABLE RELIEF WHICH, AT THE COMPANY’S OPTION, MAY BE SOUGHT IN ANY
FEDERAL OR STATE COURT HAVING JURISDICTION) SHALL BE SUBMITTED TO, AND RESOLVED EXCLUSIVELY
PURSUANT TO ARBITRATION IN ACCORDANCE WITH THE NATIONAL RULES FOR THE RESOLUTION OF EMPLOYMENT
DISPUTES OF THE AMERICAN ARBITRATION ASSOCIATION INCLUDING EXPEDITED PROCEDURES FOR EMERGENCY
RELIEF WHICH ARE EXPRESSLY ADOPTED HEREIN. SUCH ARBITRATION SHALL TAKE PLACE IN THE KANSAS CITY,
MISSOURI METROPOLITAN AREA OR OTHER MUTUALLY AGREEABLE LOCATION AND SHALL BE SUBJECT TO THE
SUBSTANTIVE LAWS OF THE STATE OF MISSOURI. DECISIONS PURSUANT TO SUCH ARBITRATION SHALL BE FINAL,
CONCLUSIVE AND BINDING ON THE PARTIES. THE PREVAILING PARTY IN ARBITRATION SHALL BE ENTITLED TO
RECOVER REASONABLE COSTS AND ATTORNEYS’ FEES FROM THE OTHER PARTY. UPON THE CONCLUSION OF
ARBITRATION, THE PARTIES MAY APPLY TO ANY FEDERAL OR STATE COURT HAVING JURISDICTION TO ENFORCE THE
DECISION PURSUANT TO SUCH ARBITRATION. EMPLOYEE AND COMPANY SHALL KEEP SUCH ARBITRATION AND ALL
RELATED PROCEEDINGS AND AWARDS CONFIDENTIAL, EXCEPT AS DISCLOSURE MAY BE REQUIRED BY LAW,
REGULATION OR JUDICIAL PROCESS.

[SIGNATURES ON THE FOLLOWING PAGE]

1

I have carefully read this Agreement; I fully understand the Agreement’s contents and the
effects thereof, including the Release in Section 3; I understand that I have a right to review
this Agreement with an attorney of my choice; and I have executed the same of my own free will,
without any coercion by the Company, the Released Parties, or any of the Company’s or the Released
Parties’ directors, officers, employees, agents or representatives.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

EMPLOYEE

	 	 	 
	By: /s/ Scott E. Arvidson

	 	9-3-2009
	 

	 	 
	Scott E. Arvidson

	 	Date
	THE COMPANY

	 	

	By: /s/John Deryy

	 	9/3/09
	 

	 	 
	John Derry

	 	Date

	 	 	Senior Vice President, Human Resources

2exhibit101.htm

PROMISSORY NOTE

 

	
Principal

$600,000.00
	
Loan Date

06-10-2009
	
Maturity

06-10-2014

 
	
Loan No

1764000
	
Call/Coll

23
	
Account
	
Officer

GSS

 
	
Initials

	
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.

Any item above containing "'""has been omitted due to text length limitations

 

Borrower:   Champion Industries, Inc.                   Lender:   FIRST
SENTRY BANK 

    2450 1st Avenue                            P.
0.BOX 2107

    Huntington, WV                            25703 823
8TH STREET

                                      HUNTINGTON,
WV 25721

____________________________________________________________________________________________________________________________________________________________________________

    Principal Amount: $600,000.00                                                                  Date
of Note: June 10, 2009

 

PROMISE TO PAY. Champion Industries, Inc. ("Borrower") promises to pay to FIRST SENTRY BANK ("Lender"), or order, in lawful money of the United States of America, the principal amount of Six Hundred Thousand & 00/100 Dollars ($600,000.00), together with interest on the unpaid principal balance from June 10, 2009, until paid in full.

PAYMENT. Subject to any payment changes resulting from changes in the Index, Borrower will pay this loan in 59 principal payments of $10,000.00 each and one final principal and interest payment of $10,043.06. Borrower's first principal payment is due July 10, 2009, and all subsequent principal payments are due on the same day of each month
after that. In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning July 10, 2009, with all subsequent interest payments to be due on the same day of each month after that. Borrower's final payment due June 10, 2014, will be for all principal and all accrued interest not yet paid. Unless otherwise agreed or required by applicable law, payments will be applied first to any unpaid collection costs; then to any late charges; then to any accrued
unpaid interest; and then to principal. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an independent index which is the Prime Rate as published in the Wall Street Journal (the "index"). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of
this loan, Lender may designate a substitute index after notifying Borrower. Lender will tell Borrower the current index rate upon Borrower's request. The interest rate change will not occur more often than each day. Borrower understands that Lender may make loans based on other rates as well. The Index currently is 3.250% per annum. The interest rate to be applied to the unpaid principal balance of this Note will be calculated as described in the "INTEREST CALCULATION METHOD" paragraph using a rate equal to
the Index, adjusted if necessary for any minimum and maximum rate limitations described below, resulting in an initial rate of 5.000% per annum based on a year of 360 days. NOTICE: Under no circumstances will the interest rate on this Note be less than 5.000% per annum or more than the maximum rate allowed by applicable law.

 

INTEREST CALCULATION METHOD. Interest on this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under this Note is computed using
this method.

 

PREPAYMENT. Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce the principal balance due and may result
in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked "paid in full", "without recourse", or similar language. If Borrower sends such a payment. Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed
or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to: FIRST SENTRY BANK, P. 0. BOX 2107, 823 8TH STREET, HUNTINGTON, WV 25721.

 

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged $25.00.

 

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final maturity, the total sum due under this Note will continue to accrue interest at the interest rate under this Note. However, in no event will the interest rate exceed the maximum interest rate limitations under applicable law.

 

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

 

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

 

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

 

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

 

Insolvency. The dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or
against Borrower.

 

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This includes a garnishment of any of Borrower's accounts, including deposit
accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

 

Events Affecting Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any guaranty of the indebtedness
evidenced by this Note.

 

Change In Ownership. Any change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

 

Adverse Change. A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of this Note is impaired.

 

Cure Provisions. if any default, other than a default in payment is curable and if Borrower has not been given a notice of a breach of the same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after receiving written notice from Lender demanding cure of such default: (1) cures the default within
ten (10) days; or (2) if the cure requires more than ten (10) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

 

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance under this Note and all accrued unpaid interest immediately due, and then Borrower will pay that amount,

 

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees, expenses for
bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), and appeals. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law.

 

GOVERNING LAW. This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws Of the State of West Virginia without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of West Virginia.

 

CHOICE OF VENUE. if there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts Of CABELL County, State of West Virginia.

 

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff 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.

 

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

NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES. Please notify us if we report any inaccurate information about your account(s) to a consumer reporting agency. Your written notice describing the specific inaccuracy(ies) should be sent to us at the following address: FIRST SENTRY BANK P. 0.BOX 2107 HUNTINGTON, WV
25721.

 

GENERAL PROVISIONS. if any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent 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 Borrower's expense to protect Lender's interests in the collateral. This insurance may, but need not, protect Borrower's interests. The coverage that Lender purchases
may not pay any claim that Borrower makes or any claim that is made against Borrower in connection with the collateral. Borrower may later cancel any insurance purchased by Lender, but only after providing Lender with evidence that Borrower has obtained insurance as required by their agreement. If Lender purchases insurance for the collateral, Borrower will be responsible for the costs of that insurance, including interest and any other charges Lender may impose in connection with the placement of the insurance,
until the effective date of the cancellation or expiration of the insurance. The costs of the insurance may be added to Borrower's total outstanding balance or obligation. The costs of the insurance may be more than the cost of insurance Borrower may be able to obtain on Borrower's own.

 

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

 

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

 

BORROWER:

CHAMPION INDUSTRIES, INC.

 

By: COPY     /s/ Toney K. Adkins                                                    

	
  
	
TONEY K. ADKINS, President of Champion Industries, Inc.

 

 

 

 

 

COMMERCIAL SECURITY AGREEMENT

 

	
Principal

$600,000.00
	
Loan Date

06-10-2009
	
Maturity

06-10-2014

 
	
Loan No

1764000
	
Call/Coll

23
	
Account
	
Officer

GSS

 
	
Initials

	
References in the boxes above are for Lender's use only and do not limit the applicability of this document to any particular loan or item.

Any item above containing "'""has been omitted due to text length limitations

 

Grantor:   Champion Industries, Inc.                   Lender:  FIRST
SENTRY BANK 

  2450 1st Avenue                           P.
0.BOX 2107

  Huntington, WV                           25703 823
8TH STREET

                                     HUNTINGTON,
WV 25721

  _______________________________________________________________________________________________________________________________________________________

 

THIS COMMERCIAL SECURITY AGREEMENT dated June 10, 2009, is made and executed between Champion Industries, Inc. ("Grantor") and FIRST SENTRY BANK ("Lender").

 

GRANT OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender a security interest in the Collateral to secure the Indebtedness and agrees that Lender shall have the rights stated in this Agreement with respect to the Collateral, in addition to all other rights which Lender may have by law.

 

COLLATERAL DESCRIPTION. The word "Collateral" as used in this Agreement means the following described property, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located, in which Grantor is giving to Lender a security interest for the Payment of the Indebtedness and performance of all other obligations
under the Note and this Agreement:

 

Purchase Money Security Interest in Specific Equipment further described as ROP Marathon 10 Color Press SIN NP-1215 as further described in the addendum attached hereto and made a part of hereof

 

In addition, the word "Collateral" also includes all the following, whether now owned or hereafter acquired, whether now existing or hereafter arising, and wherever located:

 

(A) All accessions, attachments, accessories, tools, parts, supplies, replacements of and additions to any of the collateral described herein, whether added now or later.

 

(B) All products and produce of any of the property described in this Collateral section.

 

(C) All accounts, general intangibles, instruments, rents, monies, payments, and all other rights, arising out of a sale, lease, consignment or other disposition of any of the property described in this Collateral section.

 

(D) All proceeds (including insurance proceeds) from the sale, destruction, loss, or other disposition of any of the property described in this Collateral section, and sums due from a third party who has damaged or destroyed the Collateral or from that party's insurer, whether due to judgment, settlement or other process.

 

(E) All records and data relating to any of the property described in this Collateral section, whether in the form of a writing, photograph, microfilm, microfiche, or electronic media, together with all of Grantor's right, title, and interest in and to all computer software required to utilize, create, maintain, and process any such records
or data on electronic media.

 

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Grantor's accounts with Lender (whether checking, savings, or some other account). This includes all accounts Grantor holds jointly with someone else and all accounts Grantor 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. Grantor 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.

 

GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL. With respect to the Collateral, Grantor represents and promises to Lender that:

 

Perfection of Security Interest. Grantor agrees to take whatever actions are requested by Lender to perfect and continue Lender's security interest in the Collateral. Upon request of Lender, Grantor will deliver to Lender any and all of the documents evidencing or constituting the Collateral, and Grantor will note Lender's interest upon any
and all chattel paper and instruments if not delivered to Lender for possession by Lender.

 

Notices to Lender. Grantor will promptly notify Lender in writing at Lender's address shown above (or such other addresses as Lender may designate from time to time) prior to any (1) change in Grantor's name; (2) change in Grantor's assumed business name(s); (3) change in the management of the Corporation Grantor; (4) change in the authorized
signer (s); (5) change in Grantor's principal office address; (6) change in Grantor's state of organization; (7) conversion of Grantor to a new or different type of business entity; or (8) change in any other aspect of Grantor that directly or indirectly relates to any agreements between Grantor and Lender. No change in Grantor's name or state of organization will take effect until after Lender has received notice.

 

No Violation. The execution and delivery of this Agreement will not violate any law or agreement governing Grantor or to which Grantor is a party, and its certificate or articles of incorporation and bylaws do not prohibit any term or condition of this Agreement.

 

Enforceability of Collateral. To the extent the Collateral consists of accounts, chattel paper, or general intangibles, as defined by the Uniform Commercial Code, the Collateral is enforceable in accordance with its terms, is genuine, and fully complies with all applicable laws and regulations concerning form, content and manner of preparation
and execution, and all persons appearing to be obligated on the Collateral have authority and capacity to contract and are in fact obligated as they appear to be on the Collateral. There shall be no setoffs or counterclaims against any of the Collateral, and no agreement shall have been made under which any deductions or discounts may be claimed concerning the Collateral except those disclosed to Lender in writing.

 

Location of the Collateral. Except in the ordinary course of Grantor's business. Grantor agrees to keep the Collateral at Grantor's address shown above or at such other locations as are acceptable to Lender. Upon Lender's request, Grantor will deliver to Lender in form satisfactory to Lender a schedule of real properties and Collateral locations
relating to Grantor's operations, including without limitation the following: (1) all real property Grantor owns or is purchasing; (2) all real property Grantor is renting or leasing; (3) all storage facilities Grantor owns, rents, leases, or uses; and (4) all other properties where Collateral is or may be located.

 

Removal of the Collateral. Except in the ordinary course of Grantor's business, Grantor shall not remove the Collateral from its existing location without the Lender's prior written consent To the extent that the Collateral consists of vehicles, or other titled property. Grantor shall not take or permit any action which would require application
for certificates of title for the vehicles outside the State of West Virginia, without Lender's prior written consent. Grantor shall, whenever requested, advise Lender of the exact location of the Collateral.

 

Transactions Involving Collateral. Except for inventory sold or accounts collected in the ordinary course of Grantor's business, or as otherwise provided for in this Agreement, Grantor shall not sell, offer to sell, or otherwise transfer or dispose of the Collateral. Grantor shall not pledge, mortgage, encumber or otherwise permit the Collateral
to be subject to any lien, security interest, encumbrance, or charge, other than the security interest provided for in this Agreement, without the prior written consent of Lender. This includes security interests even if junior in right to the security interests granted under this Agreement. Unless waived by Lender, all proceeds from any disposition of the Collateral (for whatever reason) shall be held in trust for Lender and shall not be commingled with any other funds; provided however, this requirement shall
not constitute consent by Lender to any sale or other disposition. Upon receipt, Grantor shall immediately deliver any such proceeds to Lender.

 

Title. Grantor represents and warrants to Lender that Grantor holds good and marketable title to the Collateral, free and clear of all liens and encumbrances except for the lien of this Agreement. No financing statement covering any of the Collateral is on file in any public office other than those which reflect the security interest created
by this Agreement or to which Lender has specifically consented. Grantor shall defend Lender's rights in the Collateral against the claims and demands of all other persons.

 

Repairs and Maintenance. Grantor agrees to keep and maintain, and to cause others to keep and maintain, the Collateral in good order, repair and condition at all times while this Agreement remains in effect. Grantor further agrees to pay when due all claims for work done on, or services rendered or material furnished in connection with the
Collateral so that no lien or encumbrance may ever attach to or be filed against the Collateral.

 

Inspection of Collateral. Lender and Lender's designated representatives and agents shall have the right at all reasonable times to examine and inspect the Collateral wherever located.

 

Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments and liens upon the Collateral, its use or operation, upon this Agreement, upon any promissory note or notes evidencing the Indebtedness, or upon any of the other Related Documents. Grantor may withhold any such payment or may elect to contest any lien if Grantor
is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized in Lender's sole opinion. If the Collateral is subjected to a lien which is not discharged within fifteen (15) days, Grantor shall deposit with Lender cash, a sufficient corporate surety bond or other security satisfactory to Lender in an amount adequate to provide for the discharge of the lien plus any interest, costs, attorneys' fees or other charges that
could accrue as a result of foreclosure or Sale of the Collateral. In any contest Grantor shall defend itself and Lender and shall satisfy any final adverse judgment before enforcement against the Collateral. Grantor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Grantor further agrees to furnish Lender with evidence that such taxes, assessments, and governmental and other charges have been paid in full and in a timely manner. Grantor may withhold any such
payment or may elect to contest any lien if Grantor is in good faith conducting an appropriate proceeding to contest the obligation to pay and so long as Lender's interest in the Collateral is not jeopardized.

Compliance with Governmental Requirements. Grantor shall comply promptly with all laws, ordinances, rules and regulations of all governmental authorities, now or hereafter in effect, applicable to the ownership, production, disposition, or use of the Collateral, including all laws or regulations relating to the undue erosion of highly-erodible
land or relating to the conversion of wetlands for the production of an agricultural product or commodity. Grantor may contest in good faith any such law, ordinance or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Lender's interest in the Collateral, in Lender's opinion, is not jeopardized.

 

Hazardous Substances. Grantor represents and warrants that the Collateral never has been, and never will be so long as this Agreement remains a lien on the Collateral, used in violation of any Environmental Laws or for the generation, manufacture, storage, transportation, treatment, disposal, release or threatened release of any Hazardous
Substance. The representations and warranties contained herein are based on Grantor's due diligence in investigating the Collateral for Hazardous Substances. Grantor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Grantor becomes liable for cleanup or other costs under any Environmental Laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims and losses resulting from a breach of this provision of this Agreement.
This obligation to indemnify and defend shall survive the payment of the Indebtedness and the satisfaction of this Agreement.

 

Maintenance of Casualty Insurance. Grantor shall procure and maintain all risks insurance, including without limitation fire, theft and liability coverage together with such other insurance as Lender may require with respect to the Collateral, in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or
companies reasonably acceptable to Lender. Grantor, 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 and not including any disclaimer of the insurer's liability for failure to give such a notice. 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 Grantor or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest, Grantor will provide Lender with such loss payable or other endorsements as Lender may require. If Grantor at any time fails to obtain or maintain any insurance as required under this Agreement, Lender may (but shall not be obligated to) obtain such insurance as Lender deems appropriate, including if Lender
so chooses "single interest insurance," which will cover only Lender's interest in the Collateral.

 

Application of Insurance Proceeds. Grantor shall promptly notify Lender of any loss or damage to the Collateral if the estimated cost of repair or replacement exceeds $5000, whether or not such casualty or loss is covered by insurance. Lender may make proof of loss if Grantor fails to do so within fifteen (15) days of the casualty. All proceeds
of any insurance on the Collateral, including accrued proceeds thereon, shall be held by Lender as part of the Collateral. If Lender consents to repair or replacement of the damaged or destroyed Collateral, Lender shall, upon satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds for the reasonable cost of repair or restoration. If Lender does not consent to repair or replacement of the Collateral, Lender shall retain a sufficient amount of the proceeds to pay all of the indebtedness, and
shall pay the balance to Grantor. Any proceeds which have not been disbursed within six (6) months after their receipt and which Grantor has not committed to the repair or restoration of the Collateral shall be used to prepay the Indebtedness.

 

Insurance Reserves. Lender may require Grantor to maintain with Lender reserves for payment of insurance premiums, which reserves shall be created by monthly payments from Grantor of a sum estimated by Lender to be sufficient to produce, at least fifteen (15) days before the premium due date, amounts at least equal to the insurance premiums
to be paid. If fifteen (15) days before payment is due, the reserve funds are insufficient, Grantor shall upon demand pay any deficiency to Lender. The reserve funds shall be held by Lender as a general deposit and shall constitute a non-interest-bearing account which Lender may satisfy by payment of the insurance premiums required to be paid by Grantor as they become due. Lender does not hold the reserve funds in trust for Grantor, and Lender is not the agent of Grantor for payment of the insurance premiums
required to be paid by Grantor. The responsibility for the payment of premiums shall remain Grantor's sole responsibility.

 

Insurance Reports. Grantor, upon request of Lender, shall furnish to Lender reports on each existing policy of insurance showing such information as Lender may reasonably request including the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured; (5) the then current value on
the basis of which insurance has been obtained and the manner of determining that value; and (6) the expiration date of the policy. In addition, Grantor shall upon request by Lender (however not more often than annually) have an independent appraiser satisfactory to Lender determine, as applicable, the cash value or replacement cost of the Collateral.

 

Financing Statements. Grantor authorizes Lender to file a UCC financing statement, or alternatively, a copy of this Agreement to perfect Lender's security interest. At Lender's request, Grantor additionally agrees to sign all other documents that are necessary to perfect, protect, and continue Lender's security interest in the Property. Grantor
will pay all filing fees, title transfer fees, and other fees and costs involved unless prohibited by law or unless Lender is required by law to pay such fees and costs. Grantor irrevocably appoints Lender to execute documents necessary to transfer title if there is a default. Lender may file a copy of this Agreement as a financing statement. If Grantor changes Grantor's name or address, or the name or address of any person granting a security interest under this Agreement changes, Grantor will promptly notify
the Lender of such change.

 

GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession of the tangible personal property and beneficial use of all the Collateral and may use it in any lawful manner not inconsistent with this Agreement or the Related Documents, provided that Grantor's right to possession and beneficial use shall not apply to any Collateral
where possession of the Collateral by Lender is required by law to perfect Lender's security interest in such Collateral. If Lender at any time has possession of any Collateral, whether before or after an Event of Default, Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral if Lender takes such action for that purpose as Grantor shall request or as Lender, in Lender's sole discretion, shall deem appropriate under the circumstances, but failure to honor any
request by Grantor shall not of itself be deemed to be a failure to exercise reasonable care. Lender shall not be required to take any steps necessary to preserve any rights in the Collateral against prior parties, nor to protect, preserve or maintain any security interest given to secure the Indebtedness.

 

LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Collateral or if Grantor fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Grantor's failure to discharge or pay when due any amounts Grantor is required to discharge
or pay under this Agreement or any Related Documents, Lender on Grantor'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 the Collateral and paying all costs for insuring, maintaining and preserving the 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 Grantor. 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. The Agreement also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon Default.

 

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

 

Payment Default. Grantor fails to make any payment when due under the indebtedness.

 

Other Defaults. Grantor 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 Grantor.

 

False Statements. Any warranty, representation or statement made or furnished to Lender by Grantor or on Grantor'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.

 

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.

 

Insolvency. The dissolution or termination of Grantor's existence as a going business, the insolvency of Grantor, the appointment of a receiver for any part of Grantor'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
Grantor.

 

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 Grantor or by any governmental agency against any collateral securing the Indebtedness. This includes a garnishment of any of Grantor's accounts, including
deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Grantor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Grantor 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 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.

 

Adverse Change. A material adverse change occurs in Grantor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired.

 

Cure Provisions. If any default, other than a default in payment is curable and if Grantor has not been given a notice of a breach of the same Provision of this Agreement within the preceding twelve (12) months, it may be cured if Grantor, 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.

 

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Agreement, at any time thereafter, Lender shall have all the rights of a secured party under the West Virginia Uniform Commercial Code. In addition and without limitation, Lender may exercise any one or more of the following rights and remedies:

 

Accelerate Indebtedness. Lender may declare the entire Indebtedness, including any prepayment penalty which Grantor would be required to pay, immediately due and payable, without notice of any kind to Grantor.

 

Assemble Collateral. Lender may require Grantor to deliver to Lender all or any portion of the Collateral and any and all certificates of title and other documents relating to the Collateral. Lender may require Grantor to assemble the Collateral and make it available to Lender at a place to be designated by Lender. Lender also shall have
full power to enter upon the property of Grantor to take possession of and remove the Collateral. If the Collateral contains other goods not covered by this Agreement at the time of repossession, Grantor agrees Lender may take such other goods, provided that Lender makes reasonable efforts to return them to Grantor after repossession.

 

Sell the Collateral. Lender shall have full power to sell, lease, transfer, or otherwise deal with the Collateral or proceeds thereof in Lender's own name or that of Grantor. Lender may sell the Collateral at public auction or private sale. Unless the Collateral threatens to decline
speedily in value or is of a type customarily sold on a recognized market, Lender will give Grantor, and  other persons as required by law, reasonable notice of the time and pace of any pubic sale, or the time  after which any private sale or any other disposition of the Collateral is to be made. However, no notice need be provided to any person who, after Event of Default occurs, enters into and authenticates an agreement waiving that person's right to notification of sale. The requirements
of reasonable notice shall be met if such notice is given at least ten (10) days before the time of the sale or disposition. All expenses relating to the disposition of the Collateral, including without limitation the expenses of retaking, holding, insuring, preparing for sale and selling the Collateral, shall become a part of the Indebtedness secured by this Agreement and shall be payable on demand, with interest at the Note rate from date of expenditure until repaid.

 

Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Collateral, with the power to protect and preserve the Collateral, to operate the Collateral preceding foreclosure or sale, and to collect the Rents from the Collateral and apply the proceeds, over and above the cost of
the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Collateral exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver.

 

Collect Revenues, Apply Accounts. Lender, either itself or through a receiver, may collect the payments, rents, income, and revenues from the Collateral. Lender may at any time in Lender's discretion transfer any Collateral into Lender's own name or that of Lender's nominee and receive the payments, rents, income, and revenues therefrom and
hold the same as security for the Indebtedness or apply it to payment of the indebtedness in such order of preference as Lender may determine. Insofar as the Collateral consists of accounts, general intangibles, insurance policies, instruments, chattel paper, choses in action, or similar property, Lender may demand, collect, receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender may determine, whether or not Indebtedness or Collateral is then due. For these purposes,
Lender may, on behalf of and in the name of Grantor, receive, open and dispose of mail addressed to Grantor; change any address to which mail and payments are to be sent; and endorse notes, checks, drafts, money orders, documents of title, instruments and items pertaining to payment, shipment, or storage of any Collateral. To facilitate collection, Lender may notify account debtors and obligors on any Collateral to make payments directly to Lender.

 

Obtain Deficiency. If Lender chooses to sell any or all of the Collateral, Lender may obtain a judgment against Grantor for any deficiency remaining on the Indebtedness due to Lender after application of all amounts received from the exercise of the rights provided in this Agreement. Grantor shall be liable for a deficiency even if the transaction
described in this subsection is a sale of accounts or chattel paper.

 

Other Rights and Remedies. Lender shall have all the rights and remedies of a secured creditor under the provisions of the Uniform Commercial Code, as may be amended from time to time. In addition, Lender shall have and may exercise any or all other rights and remedies it may have available at law, in equity, or otherwise.

 

Election of Remedies. Except as may be prohibited by applicable law, all of Lender's rights and remedies, whether evidenced by this Agreement, the Related Documents, or by any other writing, 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 Grantor under this Agreement, after Grantor's failure to perform, shall not affect Lender's right to declare a default and exercise its 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. Grantor 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 Grantor 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. Grantor also shall pay all court costs and such additional fees as may be directed by the court.

 

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

 

Governing Law. This Agreement will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the State of West Virginia without regard to its conflicts of law provisions. This Agreement has been accepted by Lender in the State of West Virginia.

 

Choice of Venue. If there is a lawsuit, Grantor agrees upon Lender's request to submit to the jurisdiction of the courts of CABELL County, 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 Grantor, shall constitute a waiver of any of Lender's rights or of any of 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, Grantor agrees to keep Lender informed at all times of Grantor's current address. Unless otherwise provided or required by law, if there is more than one Grantor, any notice
given by Lender to any Grantor is deemed to be notice given to all Grantors.

 

Power of Attorney. Grantor hereby appoints Lender as Grantor's irrevocable attorney-in-fact for the purpose of executing any documents necessary to perfect, amend, or to continue the security interest granted in this Agreement or to demand termination of filings of other secured parties. Lender may at any time, and without further authorization
from Grantor, file a carbon, photographic or other reproduction of any financing statement or of this Agreement for use as a financing statement. Grantor will reimburse Lender for all expenses for the perfection and the continuation of the perfection of Lender's security interest in the Collateral.

 

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.

Successors and Assigns. Subject to any limitations stated in this Agreement on transfer of Grantor's interest, this Agreement shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Collateral becomes vested in a person other than Grantor, Lender, without notice to Grantor, may deal
with Grantor's successors with reference to this Agreement and the Indebtedness by way of forbearance or extension without releasing Grantor from the obligations of this Agreement or liability under the Indebtedness,

 

Survival of Representations and Warranties. All representations, warranties, and agreements made by Grantor in this Agreement shall survive the execution and delivery of this Agreement, shall be continuing in nature, and shall remain in full force and effect until such time as Grantor's Indebtedness shall be paid in full.

 

Time is of the Essence. Time is of the essence in the performance of this Agreement.

 

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:

 

Agreement. The word "Agreement means this Commercial Security Agreement, as this Commercial Security Agreement may be amended or modified from time to time, together with all exhibits and schedules attached to this Commercial Security Agreement from time to time.

 

Borrower. The word "Borrower" means Champion Industries, Inc. and includes all co-signers and co-makers signing the Note and all their successors and assigns.

 

Collateral. The word "Collateral" means all of Grantor's right, title and interest in and to all the Collateral as described in the Collateral Description section of this Agreement.

 

Default. The word "Default" means the Default set forth in this Agreement in the section titled "Default".

 

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,
el 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.

 

Grantor. The word "Grantor" means Champion Industries, Inc.

 

Guaranty. The word "Guaranty" means the guaranty from guarantor, endorser, surety, or accommodation party 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 Grantor is responsible under this Agreement or under any of the Related documents.

 

Lender. The word "Lender" means FIRST SENTRY BANK, its successors and assigns.

 

Note. The word "Note" means the Note executed by Champion Industries, Inc. in the principal amount of $600,000.00 dated June 10, 2009, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the note or credit agreement.

 

Property. The word "Property" means all of Grantor's right, title and interest in and to all the Property as described in the "Collateral Description" section of this Agreement.

 

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 Indebtedness.

 

GRANTOR HAS READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JUNE 10, 2009.

 

GRANTOR:

 

CHAMPION INDUSTRIES, INC.

By:     /s/ Toney K. Adkins_______________________  

	
  
	
TONEY K. ADKINS, President of Champion Industries, Inc.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00162-of-00352.parquet"}]]