Document:

exv10w1

 

10.1

Business Loan Agreement, $1,440,000 commercial loan between Bourque Printing
Company and Hibernia National Bank together with promissory note dated as of
March 19, 2003.

 

 

BUSINESS LOAN AGREEMENT

	 	 	 	 	 
	 	 	
Borrower:
	 	Bourque Printing,
Inc. (TIN: 72-0714729)
	 	 	 	 	13112 S. Choctaw Drive

Baton Rouge, LA 70815
	 	 	 	 	 
	 	 	
Lender:
	 	Hibernia National Bank

Attn: Loan Administration Dept.

313 Carondelet Street
x
New Orleans, LA 70130

THIS BUSINESS LOAN AGREEMENT dated March 19, 2003, is made and executed between
Bourque Printing, Inc. (“Borrower”), Champion Industries, Inc. (“Guarantor”)
and Hibernia National Bank (“Lender”) on the following terms and conditions.
Borrower has applied to Lender for a 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. This Agreement shall apply to any and all present and future loans,
loan advances, extension of credit, financial accommodations and other
agreements and undertakings of every nature and kind that may be entered into
by and between Borrower and Lender now and in the future.

APPLICATION FOR AND PURPOSE OF THE LOAN. Borrower has applied to Lender for a
Loan in the aggregate principal amount of $1,440,000 for the following purpose:
To finance the purchase of the land and building located at 10848 Airline Hwy.,
Baton Rouge, LA.

BORROWER’S NOTE. Lender has agreed to extend a Loan to Borrower in the amount
of $1,440,000.00 subject to the terms and conditions of this Agreement and
Borrower’s attached Note. Borrower agrees to be bound and obligated under the
terms and conditions of this Agreement and Borrower’s Note.

TERM. This Agreement shall be effective as of March 19, 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) the Guaranty; and 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.
	 
	 	 	Real Estate Documents. Lender shall have received a current appraisal of
the Collateral supporting a loan-to-value ratio equal to or less than 75%.
Borrower shall have provided Lender with the following, in form and
substance acceptable to Lender in its sole discretion: (1) a Phase I
Environmental Audit of the Collateral; (3) a mortgagee’s title insurance
policy for that portion of the Collateral comprising real property,
insuring Lender’s first mortgage lien on such Collateral’ in an amount
equal to $1,440,000, and containing only those exceptions acceptable to
Lender, in its sole discretion; and (4) evidence that Borrower has
complied with its insurance obligations hereunder with respect to the
Collateral.
	 
	 	 	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, including without limitation the properly certified
resolution of the Guarantor authorizing execution and delivery of the
Guaranty.
	 
	 	 	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 Louisiana. 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 13112 S. Choctaw
Drive, Baton Rouge, Louisiana 70815. 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, do not require the consent or approval of
any other person, regulatory authority, or governmental body, 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. Borrower has the power and authority
to enter into the Note and the Related Documents and to grant collateral
as security for the Loan. Borrower has the further power and authority to
own and to hold all of Borrower’s assets and properties, and to carry on
Borrower’s business as presently conducted.
	 
	 	 	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 t2) 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. There are no suits or proceedings pending, or to the knowledge
of Borrower, threatened against or affecting Borrower or Borrower’s
assets, before any court or by any governmental agency, other than those
previously disclosed to Lender in writing, which, if adversely determined,
may have a material adverse effect on Borrower’s financial condition or
business.
	 
	 	 	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, and
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.
	 
	 	 	Information. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection with
this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender will
be, true and accurate in every material respect on the date as of which
such information is dated or certified; and none of such information is or
will be incomplete by omitting to state any material fact necessary to
make such information not misleading.

 

 

	 	 	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.
	 
	 	 	Commercial Purposes. Borrower intends to use the Loan proceeds solely for
business or commercially related purposes.
	 
	 	 	Employee Benefit Plans. Each employee benefit plan as to which Borrower
may have any liability complies in all material respects with all
applicable requirements of law and regulations, and (1) no Reportable
Event nor Prohibited Transaction (as defined in ERISA) has occurred with
respect to any such plan, (2) Borrower has not withdrawn from any such
plan or initiated steps to do so, (3) no steps have been taken to
terminate any such plan or to appoint a trustee to administer such a plan,
and (4) there are no unfunded liabilities other than those previously
disclosed to Lender in writing.
	 
	 	 	Investment Company Act Borrower is not an “investment company” or a
company “controlled” by an “investment company”, within the meaning of the
Investment Company Act of 1940, as amended.
	 
	 	 	Public Utility Holding Company Act. Borrower is not a “holding company”,
or a “subsidiary company” of a “holding company”, or an “affiliate” of a
“holding company” or of a “subsidiary company” of a “holding company”,
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
	 
	 	 	Regulations T and U. Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose
of purchasing or carrying margin stock (within the meaning of Regulations
T and U of the Board of Governors of the Federal Reserve System).
	 
	 	 	Claims and Defenses. There are no defenses or counterclaims, offsets or
other adverse claims, demands or actions of any kind, personal or
otherwise, that Borrower, any Grantor, or any Guarantor could assert with
respect to the Note, Loan, this Agreement, or the Related Documents.

AFFIRMATIVE COVENANTS. Borrower and Guarantor covenant and agree with Lender
that, so long as this Agreement remains in effect, Borrower and Guarantor will:

	 	 	Repayment. Repay the Loan in accordance with its terms and the terms of
this Agreement and the Guaranty, as applicable.
	 
	 	 	Notices of Claims and Litigation. Promptly inform Lender in writing of (1)
all material adverse changes in Borrower’s and Guarantor’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. In
addition, Borrower shall provide Lender with written notice of the
occurrence of any Event of Default, the occurrence of any Reportable Event
under, or the institution of steps by Borrower or Guarantor to withdraw
from, or the institution of any steps to terminate, any employee benefit
plan as to which Borrower or Guarantor may have any liability.
	 
	 	 	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, Guarantor’s
balance sheet and income statement for the year ended, audited by a
certified public accountant reasonably satisfactory to Lender.
	 
	 	 	 	Interim Statements. As soon as available, but in no event later than
45 days after the end of each fiscal quarter, Borrower’s balance
sheet and profit and loss statement for the period ended, prepared
by Borrower.
	 
	 	 	 	Additional Requirements. Compliance Certificate. Borrower and
Guarantor covenant and agree to furnish to Lender concurrently with
the delivery of quarterly financial statements, a certificate of a
financial officer setting forth reasonably detailed calculations
demonstrating compliance with financial covenants required hereunder
in form and substance acceptable 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 or Guarantor, as applicable, as being true and correct.

	 	 	Additional Information. Furnish such additional information and
statements, as Lender may request from time to time.
	 
	 	 	Financial Covenants and Ratios. Guarantor shall comply with the following
covenants and ratios:

	 	 	 	Other Requirements. Total Liabilities to Tangible Net Worth.
Guarantor covenants and agrees with Lender to maintain a ratio of
Total Liabilities to Tangible Net Worth of no more than 2.50, where
“Total Liabilities” means all of the liabilities of Guarantor,
including capital lease obligations. “Tangible Net Worth” means the
total assets of Guarantor (less reserves) excluding all intangible
assets (i.e., goodwill, trademarks, patents, copyrights,
organizational expenses, and similar intangible expenses, but
including leaseholds and leasehold improvements) less Total
Liabilities.
	 
	 	 	 	Debt Service Coverage. Guarantor covenants and agrees with Lender to
maintain a “Debt Service Coverage” ratio of no less than 1.25,
calculated using the following formula:
	 
	 	 	 	       EBITDA divided by Interest Expense + Current maturities of
long term debt

 

 

	 	 	 	The term “EBITDA” means, for a period, the sum of the net income of
Guarantor before Interest Expense, income taxes, depredation, and
amortization for the period, determined in accordance with generally
accepted accounting principles, applied on a consistent basis. The
term “Interest Expense” means the sum of the total interest expense
paid by Guarantor during a period, including the interest portion of
lease payments under Capitalized Leases, determined in accordance
with generally accepted accounting principles, applied on a
consistent basis. The term “Capitalized Leases” means a lease that
has been or should be capitalized on the books of Guarantor in
accordance with generally accepted accounting principles, applied on
a consistent basis.
	 
	 	 	 	Testing Frequency. Guarantor shall be tested as of the end of each
calendar quarter for compliance with these Financial Covenants after
receipt of the financial statements of Guarantor for each calendar
quarter-end. Except as provided above, all computations made to
determine compliance with the requirements contained in this
paragraph shall be made in accordance with generally accepted
accounting principles, applied on a consistent basis, and certified
by Guarantor as being true and correct.

	 	 	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 thirty (30)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;
(4) 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.
	 
	 	 	Guaranty. Prior to disbursement of any Loan proceeds, Borrower shall
furnish an executed guaranty of the Loan in favor of Lender, executed by
the Guarantor, on Lender’s forms, and in the amounts and under the
conditions spelled out in the guaranty agreement.

 

 

	 	 	 
	Guarantor	 	Amount
	
	 	

	Champion Industries, Inc.	 	
Unlimited

	 	 	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 all 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, and in all other loan agreements now or in the future existing
between Borrower and any other party. 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; 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, Lender’s
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.
	 
	 	 	Change of Location. Immediately notify Lender in writing of any additions
to or changes in the location of Borrower’s businesses.
	 
	 	 	Title to Assets and Property. Maintain good and marketable title to all of
Borrower’s assets and properties.
	 
	 	 	Notice of Default, Litigation and ERISA Matters. Forthwith upon learning
of the occurrence of any of the following, Borrower shall provide Lender
with written notice thereof, describing the same and the steps being taken
by Borrower with respect thereto: (1) the occurrence of any Event of
Default, or (2) the institution of, or any adverse determination in, any
litigation, arbitration proceeding or governmental proceeding, or (3) the
occurrence of a Reportable Event under, or the institution of steps by
Borrower to withdraw from, or the institution of any steps to terminate,
any employee benefit plan as to which Borrower may have any liability.
	 
	 	 	Other Information. From time to time Borrower will provide Lender with
such other information as Lender may reasonably request.
	 
	 	 	Employee Benefit Plans. So long as this Agreement remains in effect,
Borrower will maintain each employee benefit plan as to which Borrower may
have any liability, in compliance with all applicable requirements of law
and regulations.
	 
	 	 	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 trust, 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.

LENDER’S EXPENDITURES. Borrower recognizes and agrees that Lender may incur
certain expenses in connection with Lender’s exercise of rights under this
Agreement. 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, Encumbrances and other claims, at any time levied or placed
on any Collateral and paying all costs for insuring, maintaining and preserving
any Collateral, including without limitation, the purchase of insurance
protecting only Lender’s interest in any Collateral. Lender may further take
such other action or actions and incur such additional expenditures as Lender
may deem to be necessary and proper to cure or rectify any actions or inactions
on Borrower’s part as may be required under this Agreement. Nothing under this
Agreement or otherwise shall obligate Lender to take any such actions or to
incur any such additional expenditures on Borrower’s behalf, or as making
Lender in any way responsible or liable for any loss, damage, or injury to any
Collateral, to Borrower, or to any other person or persons, resulting from
Lender’s election not to take such actions or to incur such additional
expenses. In addition, Lender’s election to take any such actions or to incur
such additional expenditures shall not constitute a waiver or forbearance by
Lender of any Event of Default under this Agreement. 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 indebtedness incurred in the
ordinary 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 and except in the ordinary
course of business), or (3) sell with recourse any of Borrower’s accounts
outside the ordinary course of business.
	 
	 	 	Continuity of Operations. (1) Engage in any business activities
substantially different than those in which Borrower is presently engaged
or (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.

 

 

	 	 	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.
	 
	 	 	Agreements. Borrower will not enter into any agreement containing any
provisions which would violate or breach the performance of Borrower’s
obligations and financial covenants set forth herein.

DEPOSIT ACCOUNTS. As collateral security for repayment of Borrower’s Note and
all renewals and extensions, as well as to secure any and all other loans,
notes, indebtedness and obligations that Borrower may now and in the future owe
to Lender or incur in Lender’s favor, whether direct or indirect, absolute or
contingent, due or to become due, of any nature and kind whatsoever (with the
exception of any indebtedness under a consumer credit card account), and to the
extent permitted by law, Borrower is granting Lender a continuing security
interest in any and all funds that Borrower may now and in the future have on
deposit with Lender or in certificates of deposit or other deposit accounts as
to which Borrower is an account holder (with the exception of IRA, pension, and
other tax-deferred deposits). Borrower further agrees that, to the extent
permitted by law, Lender may at any time apply any funds that Borrower may have
on deposit with Lender or in certificates of deposit or other deposit accounts
as to which Borrower is an account holder against the unpaid balance of
Borrower’s Note and any and all other present and future indebtedness and
obligations that Borrower may then owe to Lender, in principal, interest, fees,
costs, expenses, and reasonable attorneys’ fees.

EVENTS OF DEFAULT. The following actions or inactions or both shall constitute
Events of Default under this Agreement:

	 	 	Default Under the Note. Should Borrower default in the payment of
principal or interest under the Note or any of the Indebtedness.
	 
	 	 	Default Under this Agreement. Should Borrower violate, or fail to comply
fully with any of the terms and conditions of, or default under this
Agreement.
	 
	 	 	Default Under other Agreements. Should any default occur or exist under
any Related Document which directly or indirectly secures repayment of the
Loan and any of the Indebtedness.
	 
	 	 	Other Defaults In Favor of Lender. Borrower or any guarantor defaults
under any other loan, extension of credit, security right, instrument,
document, or agreement, or obligation in favor of Lender.
	 
	 	 	Default in Favor of Third Parties. Should Borrower or any Guarantor
default 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 any
Guarantor’s ability to perform their respective obligations under this
Agreement, or any Related Document, or pertaining to the Indebtedness.
	 
	 	 	Insolvency. Should the suspension, failure or insolvency, however
evidenced, of Borrower or any Guarantor occur or exist.

 

 

	 	 	Readjustment of Indebtedness. Should proceedings for readjustment of
indebtedness, reorganization, composition or extension under any
insolvency law be brought by or against Borrower or any Guarantor.
	 
	 	 	Assignment for Benefit of Creditors. Should Borrower or any Guarantor file
proceedings for a respite or make a general assignment for the benefit of
creditors.
	 
	 	 	Receivership. Should a receiver of all or any part of Borrower’s property,
or the property of any Guarantor, be applied for or appointed.
	 
	 	 	Dissolution Proceedings. Proceedings for the dissolution or appointment of
a liquidator of Borrower or any guarantor are commenced.
	 
	 	 	False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower’s behalf, or made by
Guarantor, the Note, in connection with the obtaining of the Loan
evidenced by the Note or any security document directly or indirectly
securing repayment of the Note 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.
	 
	 	 	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.
	 
	 	 	Lender shall have the right at its sole option, to accelerate payment of
Borrower’s Note in full, in principal, interest, costs, expenses,
attorneys’ fees, and other fees and charges, as well as to accelerate the
maturity of any and all other loans and/or obligations that Borrower may
then owe to Lender whether direct or indirect, or by way of assignment or
purchase of a participation interest, and whether absolute or contingent,
liquidated or unliquidated, voluntary or involuntary, determined or
undetermined, due or to become due, and whether now existing or hereafter
arising, and whether Borrower is obligated alone or with others on a
“solitary” or “joint and several” basis, as a principal obligor or as a
surety, of every nature and kind whatsoever, whether any such indebtedness
may be barred under any statute of limitations or otherwise may be
unenforceable or voidable for any reason whatsoever.
	 
	 	 	Lender shall have the additional right, again at its sole option, to file
an appropriate collection action against Borrower and/or against any
guarantor or guarantors of Borrower’s Loan and Note, and/or to proceed or
exercise any rights against any Collateral then securing repayment of
Borrower’s Loan and Note. Borrower and each guarantor further agree that
Lender’s remedies shall be cumulative in nature and nothing under this
Agreement or otherwise, shall be construed as to limit or restrict the
options and remedies available to Lender following any event of default
under this Agreement 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.
	 
	 	 	Notwithstanding the foregoing, in the event of a breach by Borrower under
the paragraphs entitled “Financial Records”, “Financial Statements”,
“Financial Covenants and Ratios”, “Operations”, “Change in Location” and
“Compliance Certificates”, Lender agrees to give Borrower written notice
of such breach and Borrower shall have ten (10) days after the giving of
such notice by Lender to cure the breach before being in default under
this Agreement.
	 
	 	 	Additional Documents. Borrower shall provide Lender with the following
additional documents:
	 
	 	 	Corporate Resolution. Borrower has provided or will provide Lender with a
certified copy of resolutions property adopted by Borrower’s Board of
Directors, and certified by Borrower’s corporate secretary, assistant
secretary, or other authorized officer, under which Borrower’s Board of
Directors authorized one or more designated officers or employees to
execute this Agreement, the Note and any and all Security Agreements
directly or indirectly securing repayment of the same, and to consummate
the borrowings and other transactions as contemplated under this
Agreement, and to consent to the remedies following any default by
Borrower as provided in this Agreement and in any Security Agreements.
	 
	 	 	Opinion of Counsel. When required by Lender, Borrower has provided or will
provide Lender with an opinion of Borrower’s counsel certifying to and
that: (a) Borrower’s Note, any Security Agreements and this Agreement
constitute valid and binding obligations on Borrower’s part that are
enforceable in accordance with their respective terms; (b) Borrower is
validly existing and in good standing; (c) Borrower has authority to enter
into this Agreement and to consummate the transactions contemplated under
this Agreement, and (d) such other matters as may have been requested by
Lender or by Lender’s counsel.

DEFINITION OF INDEBTEDNESS EXPANDED. The word “Indebtedness” shall also mean
and include individually, collectively, interchangeably and without limitation,
any and all present and future loans, extensions of credit, liabilities and/or
obligations of every nature and kind whatsoever that Borrower, and/or Grantor
if Borrower and Grantor are not the same party, may now and in the future owe
to or incur in favor of Lender and its successors or assigns, including without
limitation, indebtedness under any Note described herein, whether such loans,
extensions of credit liabilities and/or obligation are direct or indirect, or
by way of assignment, and whether related or unrelated, or whether committed or
purely discretionary, and whether absolute or contingent, voluntary or
involuntary, determined or undetermined, liquidated or unliquidated, due or to
become due. together with interest, costs, expenses, attorneys’ fees and other
fees and charges, whether or not any such indebtedness may be barred under any
statute of limitations or may be otherwise unenforceable or voidable for any
reason.

 

 

Loan to Value. The Borrower shall at all times maintain a ratio of the
outstanding principal balance of the Loan to the appraised value of the
Property of not more than 75% as of the last day of each calendar year.

Miscellaneous Provisions. The following miscellaneous provisions are a part of
this Agreement:

	 	 	Amendments. No amendment, modification, consent or waiver of any provision
of this Agreement, and no consent to any departure by Borrower there from,
shall be effective unless the same shall be in writing signed by a duly
authorized officer of Lender, and then shall be effective only as to the
specific instance and for the specific purpose for which given.
	 
	 	 	Attorneys’ Fees; Expenses. Borrower agrees to pay upon demand all of
Lender’s costs and expenses, including Lender’s reasonable 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 reasonable attorneys’
fees and 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),
appeals, and any anticipated post-judgment collection services. Borrower
also shall pay all court costs and such additional fees as may be directed
by the court.
	 
	 	 	Borrower Information. Borrower consents to the release of information on
or about Borrower by Lender in accordance with any court order, law or
regulation and in response to credit inquiries concerning Borrower.
	 
	 	 	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 Lender’s
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 Louisiana.
This Agreement has been accepted by Lender in the State of Louisiana.
	 
	 	 	Non-Liability of Lender. The relationship between Borrower and Lender
created by this Agreement is strictly a debtor and creditor relationship
and not fiduciary in nature, nor is the relationship to be construed as
creating any partnership or joint venture between Lender and Borrower.
Borrower is exercising Borrower’s own judgment with respect to Borrower’s
business. A11 information supplied to Lender is for Lender’s protection
only and no other party is entitled to rely on such information. There is
no duty for Lender to review, inspect, supervise or inform Borrower of any
matter with respect to Borrower’s business. Lender and Borrower intend
that Lender may reasonably rely on all information supplied by Borrower to
Lender, together with all representations and warranties given by Borrower
to Lender, without investigation or confirmation by Lender and that any
investigation or failure to investigate will not diminish Lender’s right
to so rely.
	 
	 	 	Indemnification of Lender. Borrower agrees to indemnify, to defend and to
save and hold Lender harmless from any and all claims, suits, obligations,
damages, losses, costs and expenses (including, without limitation,
Lender’s reasonable attorneys’ fees in an amount not exceeding 25.000% of
the principal balance due on the Loan), demands, liabilities, penalties,
fines and forfeitures of any nature whatsoever that may be asserted
against or incurred by Lender, its officers, directors, employees, and
agents arising out of, relating to, or in any manner occasioned by this
Agreement and the exercise of the rights and remedies granted Lender under
this, as well as by: (a) the ownership, use, operation, construction,
renovation, demolition, preservation, management, repair, condition, or
maintenance of any part of the Collateral; (b) the exercise of any of
Borrower’s rights collaterally assigned and pledged to Lender hereunder;
(c) any failure of Borrower to perform any of its obligations hereunder;
and/or (d) any failure of Borrower to comply with the environmental and
ERISA obligations, representations and warranties set forth herein. The
foregoing indemnity provisions shall survive the cancellation of this
Agreement as to all matters arising or accruing prior to such cancellation
and the foregoing indemnity shall survive in the event that Lender elects
to exercise any of the remedies as provided under this Agreement following
default hereunder. Borrower’s indemnity obligations under this section
shall not in any way be affected by the presence or absence of covering
insurance, or by the amount of such insurance or by the failure or refusal
of any insurance carrier to perform any obligation on its part under any
insurance policy or policies affecting the Collateral and/or Borrower’s
business activities. Should any claim, action or proceeding be made or
brought against Lender by reason of any event as to which Borrower’s
indemnification obligations apply, then, upon Lender’s demand, Borrower,
at its sole cost and expense, shall defend such claim, action or
proceeding in Borrower’s name, if necessary, by the attorneys for
Borrower’s insurance carrier (if such claim, action or proceeding is
covered by insurance), or otherwise by such attorneys as Lender shall
approve. Lender may also engage its own attorneys at its reasonable
discretion to defend Borrower and to assist in its defense and Borrower
agrees to pay the fees and disbursements of such attorneys.

 

 

	 	 	Counterparts. This Agreement may be executed in multiple counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts, taken together, shall constitute one and the same Agreement.
	 
	 	 	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. To give Borrower any notice required under this Agreement, Lender
may hand deliver or mail the notice to Borrower at Borrower’s last address
in Lender’s records. If there is more than one Borrower under this
Agreement, notice to a single Borrower shall be considered as notice to
all Borrowers. To give Lender any notice under this Agreement, Borrower
(or any Borrower) shall mail the notice to Lender by registered or
certified mail at the address specified in this Agreement, or at any other
address that Lender may have given to Borrower (or any Borrower) by
written notice as provided in this section. All notices required or
permitted under this Agreement must be in writing and will be considered
as given on the day it is delivered by hand or deposited in the U.S. Mail
as provided herein.
	 
	 	 	Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effective during the
term hereof, such provision shall be fully severable. This Agreement shall
be construed and enforceable as if the illegal, invalid or unenforceable
provision had never comprised a part of it, and the remaining provisions
of this Agreement shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of
this Agreement, a provision as similar in terms to such illegal, invalid
or unenforceable provision as may be possible and legal, valid and
enforceable.
	 
	 	 	Sole Discretion of Lender. Whenever Lender’s consent or approval is
required under this Agreement, the decision as to whether or not to
consent or approve shall be in the sole and exclusive discretion of Lender
and Lender’s decision shall be final and conclusive.
	 
	 	 	Subsidiarles 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.
	 
	 	 	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 Louisiana Commercial Laws (La.
R.S. 10: 9-101, et seq.). 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 or to be attached to
this Business Loan Agreement from time to time.
	 
	 	 	Borrower. The word “Borrower” means Bourque Printing, 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.
	 
	 	 	ERISA. The word “ERISA” means the Employee Retirement Income Security Act
of 1974, as amended from time to time, and including all regulations and
published interpretations of the act.
	 
	 	 	Event of Default. The words “Event of Default” mean individually,
collectively, and interchangeably 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 Champion Industries, Inc., and any
guarantor, surety, or accommodation party of any or all of the Loan, and,
in each case, Borrower’s successors, assigns, heirs, personal
representatives, executors and administrators of any guarantor, surety, or
accommodation party.
	 
	 	 	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, in principal, interest, costs, expenses and
attorneys’ fees and all other fees and charges together with all other
indebtedness and costs and expenses for which Borrower is responsible
under this Agreement or under any of the Related Documents, as such
definition is expanded as previously set forth in this Agreement.

 

 

	 	 	Lender. The word “Lender” means Hibernia National Bank, its successors and
assigns, and any subsequent holder or holders of Borrower’s Loan and Note,
or any interest therein.
	 
	 	 	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, and further including any
and all subsequent amendments, additions, substitutions, renewals and
refinancings of any of Borrower’s Loans.
	 
	 	 	Note. The word “Note” means the Note executed by Bourque Printing, Inc. in
the principal amount of $1,440,000.00 dated March 19, 2003, together with
all renewals, extensions, modifications, refinancings, consolidations and
substitutions of and for the note or credit agreement.
	 
	 	 	Permitted Liens. The words “Permitted Liens” mean (a) liens and security
interests securing Indebtedness owed by Borrower to Lender; (b) liens for
taxes, assessments, or similar charges either not yet due or being
contested in good faith; (c) 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;
(d) 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”; (e) liens and security interests which, as of
the date of this Agreement, have been disclosed to and approved by the
Lender in writing; and (f) 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
individually, collectively, interchangeably and 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, individually,
collectively, and interchangeably, 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 MARCH 19, 2003.

	 	 	 
	BORROWER:	 	 
	 	 	 
	BOURQUE PRINTING, INC.
	 	 	 
	By:	 	 
	 	 	

	 	 	 
	Its:	 	 
	 	 	

	 	 	 
	GUARANTOR:	 	 
	 	 	 
	CHAMPION INDUSTRIES, INC.
	 	 	 
	By:	 	 
	 	 	

	 	 	 
	Its:	 	 
	 	 	

	 	 	 
	LENDER:	 	 
	 	 	 
	HIBERNIA NATIONAL BANK
	 	 	 
	By:	 	 
	 	 	

	 	 	
Authorized Signer

 

 

PROMISSORY NOTE

	 	 	 
	Borrower:	 	
Bourque Printing, Inc. (TIN: 72-0714729)

13112 S. Choctaw Drive

Baton Rouge, LA 70815

	Lender:	 	
Hibernia National Bank

Attn: Loan Administration Dept.

313 Carondelet Street

New Orleans, LA 70130

	 	 	 	 	 
	Principal Amount $1,440,000.00	 	
Initial Rate: 4.250%
	 	Date of Note:
March 19, 2003

PROMISE TO PAY. Bourque Printing, Inc. (“Borrower”) promises to pay to the
order oF Hibernia National Bank (“Lender”), in lawful money of the United
States of America the sum of One Million Four Hundred Forty Thousand & 00/100
Dollars(U.S. S1,440,000.00), together with simple interest assessed on a
variable rate basis at the rate per annum equal to the Index provided herein,
as the Index under this Note may he adjusted from time to time, one or more
times, with Interest being assessed on the unpaid principal balance of this
Note as outstanding from time to time, commencing on March 19, 2003 and
continuing until this Note is paid in full.

PAYMENT. Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan on demand. Payment in full is due immediately upon
Lender’s demand. If no demand is made, Borrower will pay this loan in 83
regular payments of S10,876.57 each and one irregular last payment estimated at
$892,791.97. Borrower’s first payment is due April 19, 2003, and all subsequent
payments are due on the same day of each month after that. Borrower’s final
payment due on February 2010, may be greater if Borrower does not make payments
as scheduled. 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 WALL
STREET JOURNAL PRIME RATE (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 weil. 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. 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 prepay this Note in full at any time by paying the
then unpaid principal balance of this Note, plus accrued simple interest and
any unpaid late charges through date of prepayment. If Borrower prepays this
Note in full, or if Lender accelerates payment, Borrower understands that,
unless otherwise required by law, any prepaid fees or charges will not be
subject to rebate and will be earned by Lender at the time this Note is signed.
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 computed
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: Hibernia National Bank, P.O.
Box 61540 New Orleans, LA 70161.

LATE CHARGE. If Borrower fails to pay any payment under this Note in full
within 10 days of when due, Borrower agrees to pav Lender a late payment fee in
an amount equal to 10.000% of the delinquent interest due or $29.00, whichever
is greater. Late charges will not be assessed following declaration of default
and acceleration of the maturity of this Note.

INTEREST AFTER DEFAULT. If Lender declares this Note to be in default, Lender
has the right prospectively to adjust and fix the simple interest rate under
this Note until this Note is paid in full, as follows: (A) If the original
principal amount of this Note is $250,000 or less, the fixed default interest
rate shall be equal to eighteen (18%) percent per annum, or three (3%) per cent
per annum in excess of the interest rate under this Note, whichever is greater.
(B) If the original principal amount of this Note is more than $250,000, the
fixed default-interest rate shall be equal to twenty-one (21%) percent per
annum, or three (3%) per cent per annum in excess of the interest rate under
this Note at the time of default, whichever is greater.

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

	 	 	Default Under Loan Agreement. If an event of default occurs or exists
under the terms of Borrower’s Loan Agreement in favor of Lender.
	 
	 	 	Payment Default. Borrower fails to make any payment when due under this
Note.

 

 

	 	 	Default Under Security Agreements. Should Borrower or any guarantor
violate, w fail to comply fully with any of the terms and conditions of,
or default under any security right, instrument, document, or agreement
directly or indirectly securing repayment of this Note.
	 
	 	 	Other Defaults in Favor of Lender. Should Borrower or any guarantor of
this Note default under any other loan, extension of credit, security
right, instrument, document, or agreement, or obligation in favor of
Lender.
	 
	 	 	Default in Favor of Third Parties. Should Borrower or any guarantor
default 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 affect any property or other collateral directly or
indirectly securing repayment of this Note.
	 
	 	 	Insolvency. Should the suspension, failure or insolvency, however
evidenced, of Borrower or any Guarantor of this Note occur or exist.
	 
	 	 	Death or Interdiction. Should any guarantor of this Note die or be
interdicted.
	 
	 	 	Readjustment of Indebtedness. Should proceedings for readjustment of
indebtedness, reorganization, bankruptcy, composition or extension under
any insolvency law be brought by or against Borrower or any guarantor.
	 
	 	 	Assignment for Benefit of Creditors. Should Borrower or any guarantor file
proceedings for a respite or make a general assignment for the benefit of
creditors.
	 
	 	 	Receivership. Should a receiver of all or any part of Borrower’s property,
or the property of any guarantor, be applied for or appointed.
	 
	 	 	Dissolution Proceedings. Proceedings for the dissolution or appointment of
a liquidator of Borrower or any guarantor are commenced.
	 
	 	 	False Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower’s behalf 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.
	 
	 	 	Material Adverse Change. Should any material adverse change occur in the
financial condition of Borrower or any guarantor of this Note or should
any material discrepancy exist between the financial statements submitted
by Borrower or any guarantor and the actual financial condition of
Borrower or such guarantor.
	 
	 	 	Insecurity. Lender in good faith believes itself insecure with regard to
repayment of this Note.

LENDER’S RIGHTS UPON DEFAULT. Should any one or more default events occur or
exist under this Note as provided above, Lender shall have the right, at
Lenders sole option, to declare formally this Note to be in default and to
accelerate the maturity and insist upon immediate payment in full of the unpaid
principal balance then outstanding under this Note, plus accrued interest,
together with reasonable attorneys’ fees, costs, expenses and other fees and
charges as provided herein. Lender shall have the further right, again at
Lenders sole

 

 

option, to declare formal default and to accelerate the maturity and to insist
upon immediate payment in full of each and every other loan, extension of
credit, debt, liability and/or obligation of every nature and kind that
Borrower may then owe to Lender, whether direct or indirect or by way of
assignment, and whether absolute or contingent, liquidated or unliquidated,
voluntary or involuntary, determined or undetermined, secured or unsecured,
whether Borrower is obligated alone or with others on a “solidary” or “joint
and several” basis, as a principal obligor or otherwise, all without further
notice or demand, unless Lender shall otherwise elect.

ATTORNEYS’ FEES; EXPENSES. If Lender refers this Note to an attorney for
collection, or files suit against Borrower to collect this Note, or if Borrower
files for bankruptcy or other relief from creditors, Borrower agrees to pay
Lender’s reasonable attorneys’ fees.

WAIVE JURY. BORROWER AND LENDER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY
ACTION, PROCEEDING, OR COUNTERCLAIM BROUGT BY EITHER BORROWER OR LENDER 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 Louisiana. This Note
has been accepted by Lender in the State of Louisiana.

NSF CHECK CHARGE. In the event that Borrower makes any payment under this Note
by check and Borrower’s check is returned to Lender unpaid due to nonsufficient
funds in Borrower’s deposit account, Borrower agrees to pay Lender an
additional NSF check charge in an amount of $29.00.

DEPOSIT ACCOUNTS. As collateral security for repayment of this Note and all
renewals and extensions, as well as to secure any and all other loans, notes,
indebtedness and obligations that Borrower may now and in the future owe to
Lender or incur in Lender’s favor, whether direct or indirect, absolute or
contingent, due or to become due, of any nature and kind whatsoever (with the
exception of any indebtedness under a consumer credit card account), and to the
extent permitted by law, Borrower is granting Lender a continuing security
interest in any and all funds that Borrower may now and in the future have on
deposit with Lender or in certificates of deposit or other deposit accounts as
to which Borrower is an account holder (with the exception of IRA, pension, and
other tax-deferred deposits). Borrower further agrees that, to the extent
permitted by law, Lender may at any time apply any funds that Borrower may have
on deposit with Lender or in certificates of deposit or other deposit accounts
as to which Borrower is an account holder against the unpaid balance of this
Note and any and all other present and future indebtedness and obligations that
Borrower may then owe to Lender, in principal, interest, fees, costs, expenses,
and reasonable attorneys’ fees.

FINANCIAL STATEMENTS. Borrower agrees to provide Lender with such financial
statements and other related information at such frequencies and in such detail
as Lender may reasonably request.

WAIVERS. Borrower and each guarantor of this Note hereby waive demand,
presentment for payment, protest, notice of protest and notice of nonpayment,
and all pleas of division and discussion, and severally agree that their
obligations and liabilities to Lender hereunder shall be on a “solidary” or
“joint and several” basis. Borrower and each guarantor further severally agree
that discharge or release of any party who is or may be liable to Lender for
the indebtedness represented hereby, or the release of any collateral directly
or

 

 

indirectly securing repayment hereof, shall not have the effect of releasing
any other party or parties, who shall remain liable to Lender, or of releasing
any other collateral that is not expressly released by Lender. Borrower and
each guarantor additionally agree that Lender’s acceptance of payment other
than in accordance with the terms of this Note, or Lender’s subsequent
agreement to extend or modify such repayment terms, or Lender’s failure or
delay in exercising any rights or remedies granted to Lender, shall likewise
not have the effect of releasing Borrower or any other party or parties from
their respective obligations to Lender, or of releasing any collateral that
directly or indirectly secures repayment hereof. In addition, any failure or
delay on the part of Lender to exercise any of the rights and remedies granted
to Lender shall not have the effect of waiving any of Lender’s rights and
remedies. Any partial exercise of any rights and/or remedies granted to Lender
shall furthermore not be construed as a waiver of any other rights and
remedies; it being Borrower’s intent and agreement that Lender’s rights and
remedies shall be cumulative in nature. Borrower and each guarantor further
agree that, should any default event occur or exist under this Note, any waiver
or forbearance on the part of Lender to pursue the rights and remedies
available to Lender, shall be binding upon Lender only to the extent that
Lender’s specifically agrees to any such waiver or forbearance in writing. A
waiver or forbearance on the part of Lender as to one default event shall not
be construed as a waiver or forbearance as to any other default. Borrower and
each guarantor of this Note further agree that any late charges provided for
under this Note will not be charges for deferral of time for payment and will
not and are not intended to compensate Lender’s for a grace or cure period, and
no such deferral, grace or cure period has or will be granted to Borrower in
return for the imposition of any late charge. Borrower recognizes that
Borrower’s failure to make timely payment of amounts due under this Note will
result in damages to Lender, including but not limited to Lender’s loss of the
use of amounts due, and Borrower agrees that any late charges imposed by Lender
hereunder will represent reasonable compensation to Lender for such damages.
Failure to pay in full any installment or payment timely when due under this
Note, whether or not a late charge is assessed, will remain and shall
constitute an Event of Default hereunder.

SUCCESSORS AND ASSIGNS LIABLE. Borrower’s and each guarantor’s obligations and
agreements under this Note shall be binding upon Borrowers and each guarantor’s
respective successors, heirs, legatees, devisees, administrators, executors and
assigns. The rights and remedies granted to Lender under this Note shall inure
to the benefit of Lender’s successors and assigns, as well as to any subsequent
holder or holders of this Note.

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

SEVERABILITY. If any provision of this Note is held to be invalid, illegal or
unenforceable by any court, that provision shall be deleted from this Note and
the balance of this Note shall be interpreted as if the deleted provision never
existed.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower’s successors, heirs, legatees, devisees, administrators,
executors 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: Hibernia
National Bank, Loan Services, P.O. Box 61007 New Orleans, LA 70161

APPUCABLE LENDING LAW. This business or commercial Note is subject to
La. R.S. 9:3509, etseq.

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

	 	 	 
	BORROWER:	 	 
	 	 	 
	BOURQUE PRINTING,INC.
	 	 	 
	 	 	

	 	 	 
	Its:exv10w2

 

10.2

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

 

 

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

55-0717455

Type: o individual o partnership n corporation o          

State of organization/registration (if applicable) WV          

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

COMMERCIAL SECURITY AGREEMENT

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

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

_______________________________________________________________________(Borrower)
owes to Secured party:

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

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

PROPERTY DESCRIPTION. The Property is described as follows:

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

 

 

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

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

 

 

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

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

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

___________________

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

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

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

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

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

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

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

 

 

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

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

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

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

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

 

 

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

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

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

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

DEFAULT. Debtor will be in default if:

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

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

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

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

 

 

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

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

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

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

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

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

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

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

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

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

 

 

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

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

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

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

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

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

______________________________________________________________________________.

PAYMENTS: I agree to pay this note as follows:

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

ADDITIONAL TERMS:

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

	 	 	 
	Signature for Lender	 	
CHAMPION INDUSTRIES, INC.
	 	 	 
	
	 	

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

	 	 	 
	 	 	

	 	 	 
	UNIVERSAL NOTE	 	

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

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

 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

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

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

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

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

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

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

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

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

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

 

 

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

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

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

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

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

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

	 
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