Attached files
EXHIBIT
10.1
PROMISSORY NOTE
_____________________________________________________________________________________________________________________________________________________________________________
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Principal
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Loan
Date
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Maturity
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Loan
No
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Call
/ Coll
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Account
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Officer
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Initials
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$600,000
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06-10-2009
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06-10-2014
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1764000
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23
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GSS
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_____________________________________________________________________________________________________________________________________________________________________________
References in
the boxes above are for Lender's use only and do not limit the
applicability of this document to any particular loan or
item.
Any item above containing
"***" has been omitted due to text length limitations.
_____________________________________________________________________________________________________________________________________________________________________________
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Borrower:
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Champion
Industries, Inc.
2450 1st
Avenue
Huntington, WV
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Lender: |
FIRST
SENTRY BANK
P.O. BOX 2107
823 8TH STREET
HUNTINGTON, WV
25721
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| Principal Amount: $600,000 | Date of Note: June 10, 2009 |
PROMISE
TO PAY. Champion Industries, Inc. (“Borrower”)
promises to pay to FIRST SENTRY BANK (“Lender,.), or order, in lawful money of
the United States of America, the principal amount of Six Hundred Thousand
& 00/100 Dollars ($600,000.00), together with interest on the
unpaid outstanding principal balance from June 10, 2009, until paid in
full.
PAYMENT.
Subject to any payment changes resulting from changes in the Index,
Borrower will pay this loan in 59 principal payments of $10,000.00 each and
one final principal and interest payment of $10,043.06. Borrower's first
principal payment is due July 10, 2009, and all subsequent principal payments
are due on the same day of each month after that. In addition, Borrower
will pay regular monthly payments of all accrued unpaid interest due as of each
payment date, beginning July 10, 2009, with all subsequent interest
payments to be due on the same day of each month after that. Borrower's finanl
payment due June 10, 2014, will be for all principal and all accrued interest
not yet paid. Unless otherwise agreed or required by applicable law, payments
will be applied first to any unpaid collection costs; then to any late charges;
then to any accrued unpaid interest; and then to principal. Borrower will pay
Lender at Lender’s address shown above or at such other place as Lender may
designate in writing.
VARIABLE INTEREST
RATE. The interest rate on this Note is subject to change from time to
time based on changes in an independent index which is the Prime Rate as
published in the Wall Street Journal (the “Index”). The Index is not necessarily
the lowest rate charged by Lender on its loans. If the Index becomes unavailable
during the term of this loan, Lender may designate a substitute index after
notifying Borrower. Lender will tell Borrower the current Index rate upon
Borrower’s request. The interest rate change will not occur more often than each
day. Borrower understands that Lender may make loans based on other rates as
well. The Index currently is 3.250% per
annum. The interest rate to be applied to the unpaid principal
balance of this Note will be calculated as described in the “INTEREST
CALCULATION METHOD” paragraph using a rate equal to the Index, adjusted if
necessary for any minimum and maximum rate limitations described below,
resulting in an initial rate of 5.000% per annum based on a year of 360 days.
NOTICE: Under no circumstances will the interest rate on this Note be less than
5.000% per annum or more than the maximum rate allowed by applicable
law.
INTEREST CALCULATION
METHOD. Interest on this Note is
computed on a 365/360 basis; that is, by applying the ratio of the interest rate
over a year of 360 days, multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding.
All interest payable under this Note is computed using this
method.
PREPAYMENT.
Borrower may pay without penalty all or a portion of the amount owed earlier
than it is due. Early payments will not, unless agreed to by Lender in writing,
relieve Borrower of Borrower’s obligation to continue to make payments of
accrued unpaid interest, Rather, early payments will reduce the principal
balance due. Borrower agrees not to send Lender payments marked “paid in full”,
“without recourse”, or similar language. If Borrower sends such a payment,
Lender may accept it without losing any of Lender’s rights under this Note, and
Borrower will remain obligated to pay any further amount owed to Lender. All
written communications concerning disputed amounts, including any check or other
payment instrument that indicates that the payment constitutes “payment in fur
of the amount owed or that is tendered with other conditions or limitations or
as full satisfaction of a disputed amount must be mailed or delivered to: FIRST
SENTRY BANK, P.O. BOX 2107 HUNTINGTON, WV 25721.
LATE CHARGE. If a
payment is 10 days or more late, Borrower will be charged $25.00.
INTEREST AFTER
DEFAULT. Upon default, including failure to pay upon final maturity, the
total sum due under this Note will continue to accrue interest at the interest
rate under this Note. However, in no event will the interest rate exceed the
maximum interest rate limitations under applicable law.
DEFAULT. Each of
the following shall constitute an event of default (“Event of Default”) under
this Note:
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Payment
Default. Borrower fails to make any payment when due under this
Note.
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Other
Defaults. Borrower fails to comply with or to perform any other
term, obligation, covenant or condition contained in this Note or in any
of the related documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement between
Lender and Borrower.
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False
Statements. Any warranty, representation or statement made or
furnished to Lender by Borrower or on Borrower’s behalf under this Note or
the related documents is false or misleading in any material respect,
either now or at the time made or furnished or becomes false or misleading
at any time thereafter.
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Insolvency.
The dissolution or termination of Borrower’s existence as a going
business, the insolvency of Borrower, the appointment of a receiver for
any part of Borrower’s property, any assignment for the benefit of
creditors, any type of creditor workout or the commencement of any
proceeding under any bankruptcy or insolvency laws by or against
Borrower.
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Creditor or
Forfeiture Proceedings. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or
any other method, by any creditor of Borrower or by any governmental
agency against any collateral securing the loan. This includes a
garnishment of any of Borrower’s accounts, including deposit accounts,
with Lender. However, this Event of Default shall not apply if there is a
good faith dispute by Borrower as to the validity or reasonableness of the
claim which is the basis of the creditor or forfeiture proceeding and if
Borrower gives Lender written notice of the creditor or forfeiture
proceeding and deposits with Lender monies or a surety bond for the
creditor or forfeiture proceeding, in an amount determined by Lender, in
its sole discretion, as being an adequate reserve or bond for the
dispute.
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Events Affecting
Guarantor. Any of the preceding events occurs with respect to any
guarantor, endorser, surety, or accommodation party of any of the
indebtedness or any guarantor, endorser, surety, or accommodation party
dies or becomes incompetent, or revokes or disputes the validity of, or
liability under, any guaranty of the indebtedness evidenced by this
Note.
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Change In
Ownership. Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower.
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Adverse
Change. A material adverse change occurs in Borrower’s financial
condition, or Lender believes the prospect of payment or performance of
this Note is impaired.
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Cure
Provisions. If any default, other than a default in payment is
curable and if Borrower has not been given a notice of a breach of the
same provision of this Note within the preceding twelve (12) months, it
may be cured if Borrower, after receiving written notice from Lender
demanding cure of such default: (1) cures the default within ten (10)
days; or (2) if the cure requires more than ten (10) days, immediately
initiates steps which Lender deems in Lender’s sole discretion to be
sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.
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LENDER’S RIGHTS.
Upon default, Lender may declare the entire unpaid principal balance under this
Note and all accrued unpaid interest immediately due, and then Borrower will pay
that amount.
ATTORNEYS’ FEES;
EXPENSES, Lender may hire or pay someone else to help collect this Note
if Borrower does not pay. Borrower will pay Lender that amount. This includes,
subject to any limits under applicable law, Lender’s attorneys’ fees and
Lender’s legal expenses, whether or not there is a lawsuit, including attorneys’
fees, expenses for bankruptcy proceedings (including efforts to modify or vacate
any automatic stay or injunction), and appeals. If not prohibited by applicable
law, Borrower also will pay any court costs, in addition to all other sums
provided by law.
GOVERNING
LAW. This Note will be governed by federal law
applicable to Lender and, to the extent not preempted by federal law, the laws
of the State of West Virginia without regard to its conflicts of law provisions.
This Note has been accepted by Lender in the State of West
Virginia.
CHOICE OF VENUE.
If there is a lawsuit, Borrower agrees upon Lender’s request to submit to the
jurisdiction of the courts of CABELL County, State of West
Virginia.
RIGHT OF SETOFF.
To the extent permitted by applicable law, Lender reserves a right of
setoff ri all Borrowers accounts with Lender (whether checking, savings, or some
other account). This includes all accounts Borrower holds jointly with someone
else and all accounts Borrower may open in the future. However, this does not
include any IRA or Keogh accounts, or any trust accounts for which setoff would
be prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the debt against any and
all such accounts.
SUCCESSOR
INTERESTS. The terms of this Note
shall be binding upon Borrower, and upon Borrower’s heirs, personal
representatives, successors and assigns, and shall inure to the benefit of
Lender and its successors and assigns.
NOTIFY
US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES.
Please notify us
if we report any inaccurate information about your account(s) to a consumer
reporting agency. Your written notice describing the specific inaccuracy(ies)
should be sent to us at the following address: FIRST SENTRY BANK P.O. BOX 2107
HUNTINGTON, WV 25721.
GENERAL
PROVISIONS. If any part of this
Note cannot be enforced, this fact will not affect the rest of the Note. Lender
may delay or forgo enforcing any of its rights or remedies under this Note
without losing them. Borrower and any other person who signs, guarantees or
endorses this Note, to the extent lIowed by law, waive presentment, demand for
payment, and notice of dishonor. Upon any change in the terms of this Note, and
unless otherwise expressly slated in writing, no party who signs this Note,
whether as maker, guarantor, accommodation maker or endorser, shall be released
from liability. All such parties agree that Lender may renew or extend
(repeatedly and for any length of time) this loan or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect Lender’s
security interest in the collateral; and take any other action deemed necessary
by Lender without the consent of or notice to anyone. All such parties also
agree that Lender may modify this loan without the consent of or notice to
anyone other than the party with whom the modification is made. The obligations
under this Note are joint and several.
WEST VIRGINIA INSURANCE NOTICE. Unless Borrower
provides Lender with evidence of the insurance coverage required by Borrowers
agreement with Lender, Lender may purchase insurance at Borrower's expense to
protect Lender's interests in the collateral. This insurance may, but need not,
protect Borrower's interests. The coverage that Lender purchases may not pay any
claim that Borrower makes or any claim that is made against Borrower in
connection with the collateral. Borrower may later cancel any insurance
purchased by Lender, but only after providing Lender with evidence that Borrower
has obtained insurance as required by their agreement. If Lender purchases
insurance for the collateral, Borrower will be responsible for the costs of that
insurance, including interest and any other charges. Lender may impose in
connection with the placement of the insurance, until the effective date of the
cancellation or expiration of the insurance. The costs of the insurance may be
added to Borrower's total outstanding balance or obligation. The costs of the
insurance may be more than the cost of insurance Borrower may be able to obtain
on Borrower's own.
PRIOR
TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS
NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE
TERMS OF THE NOTE.
BORROWER
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
BORROWER:
CHAMPION
iNDUSTRIES, INC.
By: COPY
/s/Toney K.
Adkins
TONEY K. ADKINS, President of Champion Industries, Inc.