EXHIBIT 10.1
 
Champion Industries, Inc.

First Amended And Restated Limited Forbearance Agreement and Fourth Amendment to
Credit Agreement
 
This First Amended and Restated Limited Forbearance Agreement and Fourth
Amendment to Credit Agreement (herein, the “Agreement”) is entered into as of
July 13, 2012, by and among Champion Industries, Inc. (the “Borrower”), Mr.
Marshall Reynolds, individually (the “Shareholder”), each of the undersigned
Guarantors (“Guarantors”), the Lenders party hereto, and Fifth Third Bank, an
Ohio banking corporation, as a Lender, L/C Issuer, and Administrative Agent for
the Lenders (the “Administrative Agent”).
 
Recitals:
 
              A.The Borrower, the Lenders, and the Administrative Agent are
party to a Credit Agreement, dated as of September 14, 2007 (as such agreement
has been amended and may further be amended, supplemented and otherwise modified
from time to time, the “Credit Agreement”).
 
              B.The Borrower, the Administrative Agent and Marshall Reynolds,
individually (the “Shareholder”), are party to a Contribution Agreement and Cash
Collateral Security Agreement, dated as of March 31, 2010 (as such agreement may
be amended, supplemented and otherwise modified from time to time, the
“Contribution Agreement”).
 
              C.The Guarantors have entered into that certain Guaranty Agreement
dated as of September 14, 2007 (the “Guaranty”).
 
              D.The Borrower, the Lenders, the Administrative Agent, the
Shareholder and the Guarantors entered into that certain Limited Forbearance
Agreement and Third Amendment to Credit Agreement dated as of December 28, 2011
(the “Original Forbearance Agreement”).
 
              E.The Borrower is not in compliance with (i) the Leverage Ratio
requirement of Section 6.20(a) of the Credit Agreement for the period ending
October 31, 2011, and on January 31, 2012 and on April 30, 2012, (ii) the Fixed
Charge Coverage Ratio requirement of Section 6.20(b) of the Credit Agreement for
the period ending October 31, 2011, and on January 31, 2012 and on April 30,
2012 (collectively, the “Fixed Charge Designated Defaults”), and (iii) the
Minimum EBITDA requirement of Section 6.20(d) of the Credit Agreement for the
period ending October 31, 2011 (including the requirement of Section 6.20(d)(ii)
as set forth in Section 9(k) below) (collectively, including the Fixed Charge
Covenant Defaults, the “Designated Defaults”).
 
              F.The Lenders are not willing to waive the Designated Defaults.
 
              G.Notwithstanding the Designated Defaults, the Borrower has
requested the Administrative Agent and the Lenders, during the Forbearance
Period (defined below), (i)  temporarily forbear from exercising certain rights
and remedies under the Credit Agreement, the other Loan Documents and applicable
law with respect to such Designated Defaults, and (ii) continue to make
Revolving Loans available to the Borrower in accordance with the provisions of
Section 2.2 of the Credit Agreement.
 
              H.Subject to the terms and conditions set forth herein, and in
order to accommodate the Borrower’s request, during and only during the
Forbearance Period, the Lenders are willing to (i) temporarily forbear from
exercising certain of their default-related rights and remedies against the
Borrower available solely by reason of the Designated Defaults, and (ii)
continue to advance Revolving Loans in accordance with the provisions of Section
2.2 of the Credit Agreement.
 
              I.This Agreement shall constitute a Loan Document and these
Recitals shall be construed as part of this Agreement.
 
Now, Therefore, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
 
1.          Incorporation of Recitals; Defined Terms.  The Borrower acknowledges
that the Recitals set forth above are true and correct in all material
respects.  The defined terms in the Recitals set forth above are hereby
incorporated into this Agreement by reference.  All other capitalized terms used
herein without definition shall have the same meanings herein as such terms have
in the Credit Agreement.
 
2.          Amounts Owing.  The Borrower acknowledges, confirms and agrees that
the aggregate principal amount of Loans and Letters of Credit as of July 13,
2012 (immediately prior to the effectiveness of this Agreement) is
$40,604,719.90 ($31,599,224.03 in Term Loans, $8,325,495.87 in Revolving Loans,
$680,000.00 in Swing Loans, and $-0- in outstanding Letters of Credit). All such
Loans and Reimbursement Obligations and any future Loans and Reimbursement
Obligations, together with interest accrued and accruing thereon, and fees,
costs, expenses and other charges now or hereafter payable by the Borrower to
the Administrative Agent or the Lenders, are unconditionally owing by the
Borrower to the Administrative Agent and the Lenders, without offset, defense or
counterclaim of any kind, nature or description whatsoever, all of which are
hereby waived by the Borrower.
 
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              3.Acknowledgment of Defaults.  The Borrower hereby acknowledges
and agrees that (i) the Designated Defaults have occurred and are continuing,
each of which constitutes an Event of Default, and, as a result of the
Designated Defaults, as well as any other Defaults or Events of Default that may
exist, the Administrative Agent and the Lenders are entitled to exercise any and
all default-related rights and remedies under the Credit Agreement, other Loan
Documents and/or applicable law, including without limitation, making a
determination not to make further Loans or incur further Letter of Credit
Obligations, to terminate the Commitments, to accelerate the Obligations, to
exercise rights against Collateral, to enforce Liens granted under the
Collateral Documents, or to exercise any other rights or remedies that may be
available under the Loan Documents or under applicable law, and (ii) that the
Borrower has no valid defense to the enforcement of such default-related rights
and remedies.
 
              4.Administrative Agent Discretion.  The Borrower hereby
acknowledges and agrees that the terms “acceptable” or “satisfactory” to the
Administrative Agent or words of similar import when used in this Agreement
without further qualification refer to the Administrative Agent’s sole and
unilateral discretion.
 
              5.Forbearance.  (a) As used herein, the term “Forbearance Period”
shall mean the period commencing on the date hereof and ending on the earlier to
occur of (i) August 15, 2012 (5:00 p.m. New York time), and (ii) the occurrence
of any one or more of the following events:  (A) the occurrence of any Default
or Event of Default under the Credit Agreement, other than the Designated
Defaults; (B) any failure by the Borrower for any reason to comply with any
term, condition, or provision contained in this Agreement; (C) any failure by
any other party to this Agreement, other than the Administrative Agent, Lenders
or Borrower, for any reason to comply with any term, condition, or provision
contained in this Agreement; (D) any representation made by the Borrower, any
Guarantor or the Shareholder in this Agreement or pursuant to any other Loan
Document or any other instrument or document delivered pursuant thereto proves
to be incorrect or misleading in any material respect when made; (E) any
Material Adverse Effect shall occur as determined in good faith by the
Administrative Agent or the Required Lenders; and (F) any act of fraud,
intentional misrepresentation, criminal misconduct or gross negligence by the
Borrower, any Guarantor or the Shareholder.  The occurrence of any of the events
set forth in clauses (A) through (F) above shall constitute an immediate Event
of Default under the Credit Agreement and the Forbearance Period is
automatically terminated and the Administrative Agent and Lenders are then
permitted and entitled under Section 7 of the Credit Agreement and the other
Loan Documents, among other things, to decline to provide additional credit to
the Borrower, to permanently terminate the Commitments, to accelerate the
Obligations, to require cash collateral for outstanding Letters of Credit, and
to exercise any other rights and remedies that may be available under the Loan
Documents or applicable law.
 
               (b)During the Forbearance Period, neither the Administrative
Agent nor any Lender will take action, on account of the Designated Defaults
only, (i) to accelerate the maturity of the Loans, to terminate the Commitments,
or to otherwise enforce payment of the Obligations of the Borrower under the
Loan Documents, or (ii) other than as set forth herein, to exercise any other
rights and remedies available to them under the Loan Documents or applicable
law.  Automatically and without any notice or action by the Administrative Agent
or the Lenders, upon termination or expiration of the Forbearance Period, the
Administrative Agent and the Lenders shall be entitled (but not required) to
exercise any of the rights and remedies with respect to the Designated Defaults
(or otherwise) available to them under the Loan Documents or applicable law.
 
              6.Revolving Credit.  During the Forbearance Period, the
Administrative Agent shall continue to make additional Revolving Loans available
to the Borrower in accordance with Section 2.2 of the Credit Agreement and as
provided for herein.  Any request for credit under the Revolving Credit during
the Forbearance Period shall be subject to the satisfaction of the conditions
precedent set forth in Section 3.1 of the Credit Agreement, except to the extent
non-compliance with the conditions set forth therein relate solely to the
Designated Defaults.
 
              7.Principal Payments.  The Borrower shall continue to pay all
principal on the Loans and Reimbursement Obligations on all Letters of Credit
when due, including, without limitation, the Borrower shall continue to make all
scheduled payments of principal on the Term Loans as and when due under the
Credit Agreement (except for any Excess Cash Flow payment which may be due) and
in accordance with the July 2 Side Letter Agreement (as defined below).
 
              8.Interest and Fee Payments.  The Borrower will keep interest and
fees current on the Loans and Letters of Credit.
 
 
 
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              9.Additional Agreements.  In order to induce the Administrative
Agent and Lenders into this Agreement, the Borrower further agrees that:
 
                 (a)CRA Engagement Letter.  On or before December 31, 2011, and
pursuant to an authorizing resolution of the Borrower’s board of directors (in
form and substance satisfactory to the Administrative Agent), the Borrower shall
deliver to the Administrative Agent a fully executed engagement letter between
the Borrower and RAS Management Advisors, LLC (“RAS”), on terms and conditions
acceptable to the Administrative Agent, providing for the retention of such
Person to serve in the capacity as a chief restructuring advisor (“CRA”) to the
Borrower to conduct due diligence and to assist the Borrower with developing and
proposing a written restructuring plan for the Borrower’s business operations
(the “Proposed Restructuring Plan”) (the “CRA Engagement Letter”).  The Borrower
shall not terminate or otherwise modify the terms of the CRA Engagement Letter
without the prior written consent of the Administrative Agent.  The Borrower
shall, and shall cause its officers, directors, employees and advisors to
(i) cooperate with the CRA throughout the development and delivery of the
Proposed Restructuring Plan and (ii) direct the CRA to answer reasonable
inquiries of, and meet with, the Administrative Agent or Lenders, or their
representatives, advisors or Consultants (as defined below), regarding the
Proposed Restructuring Plan at such times as may be reasonably requested.  The
parties hereto agree that (x) neither the Administrative Agent nor any Lender
(A) influenced or will influence the Borrower in its selection of the CRA or the
development and delivery of the Proposed Restructuring Plan nor (B) shall be in
any way responsible for any advice that is given or that fails to be given by
the CRA to the Borrower and (y) the CRA’s duty of loyalty shall at all times be
to the Borrower and neither the Administrative Agent nor any Lender, or any
Consultant, shall be deemed to control the CRA by virtue of their communications
with the CRA or otherwise.  For avoidance of doubt, nothing herein shall
preclude or limit the rights of the Administrative Agent and Lenders to directly
retain financial advisors and Consultants in accordance with the terms of the
Loan Documents.
 
                 (b)Delivery of Proposed Restructuring Plan; Other Reports.  (i)
The Borrower shall provide the Administrative Agent with the terms of a written
Proposed Restructuring Plan, which shall be supported in all respects by the
CRA, on or before February, 15, 2012.  Nothing in this provision or Agreement
shall be deemed to be an acknowledgement or approval of, or consent or agreement
to enter into, any Proposed Restructuring Plan by the Administrative Agent or
any of the Lenders; all of the Administrative Agent’s and Lenders’ rights with
respect to any Proposed Restructuring Plan are fully reserved and not waived.
 
(ii) The Borrower shall provide the Administrative Agent with an updated
Proposed Restructuring Plan (the “Updated Proposed Restructuring Plan”), which
shall be supported in all respects by the CRA, on or before July 16, 2012.  The
Updated Proposed Restructuring Plan shall incorporate contemplated financial
transactions and other alternatives and further include details of the proposed
restructuring of Borrower’s balance sheet and credit facilities by fiscal
year-end 2012.  The Updated Proposed Restructuring Plan shall evidence a
reduction of the Leverage Ratio in a manner acceptable to the Administrative
Agent and Lenders and an increase in the Fixed Charge Coverage Ratio in a manner
acceptable to the Administrative Agent and Lenders.  The Updated Proposed
Restructuring Plan shall also be otherwise acceptable to the Administrative
Agent and Lenders.  The Borrower shall continue to engage Raymond James to
pursue the execution of sales transactions and RAS to pursue the execution of
organizational restructuring initiatives set forth in the Updated Proposed
Restructuring Plan (or such other advisors as may be acceptable to the
Administrative Agent to perform the tasks identified herein) through the
Forbearance Period.
 
                 (c)Information Access; Cooperation with Consultant and Media
Transaction Expert.  (i)  Any financial advisor or consultant (“Consultant”)
retained by the Administrative Agent or its counsel, beginning February 1, 2012,
including, without limitation, Conway MacKenzie, Inc., shall have reasonable
access to the offices, properties, business records, accounting systems,
officers, CRA, and senior management of the Borrower and its Subsidiaries at
such reasonable times during normal business hours and as often as may be
reasonably requested.  The Borrower agrees to reasonably respond and shall cause
its officers, directors, senior management and employees of the Borrower,
advisors and the CRA to (A) reasonably cooperate with the Consultant as it
undertakes its responsibilities during the Forbearance Period and respond to
reasonable information requested by the Consultant; and (B) meet with the
Consultant at such reasonable times during normal business hours and as often as
may be reasonably requested.  All fees, expenses and costs related to the
Consultant shall be paid by Borrower within five (5) days after being provided
with an invoice by the Administrative Agent or its counsel, provided, however,
the Borrower shall only be obligated to pay a maximum amount of (x) $275,000 for
the time period beginning with the Third Amendment Effective Date through April
30, 2012 and (y) $50,000 per month beginning May 1, 2012 and continuing each
month thereafter through the Forbearance Period, with any unused monthly balance
rolling forward on a cumulative basis.
 
                 (ii)The Administrative Agent may retain a media transaction
expert (“Media Consultant”) to (A) review the investment banking process
utilized by Raymond James with respect to the Borrower’s Herald Dispatch
Newspaper and related assets (the “HD Assets”), and (B) conduct an independent
valuation of the HD Assets.  The Borrower shall cause Raymond James to provide
reasonably necessary access to the Media Consultant, and the Borrower shall
otherwise provide the Media Consultant with same access, and shall be obligated
in the same manner, as provided for in section 9(c)(i), including clauses (A)
and (B) therein, with all references therein to the Consultant being references
to the Media Consultant for purposes of this clause (ii).  All fees of the Media
Consultant and all related costs and expenses shall be paid by Borrower within
five (5) days after being provided with an invoice by the Administrative Agent
or its counsel, provided, however, the aggregate fees and related costs and
expenses of the Media Consultant payable by the Borrower shall not exceed
$15,000 unless otherwise approved by the Borrower.
 
 
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                 (d)Forbearance Fee; Extension Fee. (i) Borrower shall pay a
forbearance fee due at the Third Amendment Effective Date (defined below) to
each Lender party to this Agreement an amount equal to 0.10 % of such Lender’s
then-outstanding Loans, interests in Letters of Credit and Unused Revolving
Credit Commitments, measured after giving effect to Section 9(g) hereof.
 
(ii)           Borrower shall pay an extension fee due at the First Amended and
Restated Effective Date (defined below) to each Lender equal to 0.25% of such
Lender’s then-outstanding Loans, interests in Letters of Credit and Unused
Revolving Credit Commitments, measured after giving effect to Section 9(g)
hereof.
 
                 (e)Application of Cash Collateral.  The Borrower and
Shareholder each separately agrees, acknowledges and confirms that $2.0 million
of the cash held in the Cash Collateral Account, as defined in the Contribution
Agreement, shall be applied on the Third Amendment Effective Date by the
Administrative Agent to the outstanding Term Loans in the inverse order of
maturity, which payment, subject to the following sentence, shall satisfy in
full (i) any Fixed Charge Violation (as defined in the Contribution Agreement)
during the Forbearance Period or resulting from the Fixed Charge Designated
Default and (ii) any Excess Cash Flow payment due during the Forbearance Period
pursuant to Section 2.8(b)(iii) of the Credit Agreement, in each instance
regardless of the amount during the Forbearance Period to which the Lenders
would be entitled (a) to withdraw from the Cash Collateral Account pursuant to
the Contribution Agreement with respect to any Fixed Charge Violation during the
Forbearance Period or resulting from the Fixed Charge Designated Default, or (b)
to receive as payment from the Borrower pursuant to Section 2.8(b)(iii) of the
Credit Agreement with respect to any Excess Cash Flow Payment.  Notwithstanding
the previous sentence, in the event the Borrower, Administrative Agent and
applicable Lenders have not by April 30, 2012 entered into a new agreement or an
agreement amending or modifying this Agreement by April 30, 2012, all Designated
Defaults, in addition to any other Events of Default, if any, that might arise,
shall be deemed immediately existing and uncured and any remaining funds in the
Cash Collateral Account shall be immediately available to the Administrative
Agent for application pursuant to the Contribution Agreement.
 
                 (f)Amended Definition of EBITDA.  The definition of “EBITDA”
set forth in Section 1.1 of the Credit Agreement shall be amended and restated
in its entirety to read as follows:
 
“EBITDA” means with reference to any period, Net Income for such period minus
(a) non-cash ordinary and extraordinary gains for such period, plus (b) the sum
of all amounts deducted in arriving at such Net Income amount in respect of
(i) Interest Expense for such period, (ii) federal, state, and local income
taxes for such period, (iii) depreciation of fixed assets and amortization of
intangible assets for such period, (iv) non-cash, non-recurring extraordinary
charges for such period to the extent approved in writing by the Administrative
Agent in its sole discretion, (v) with respect to any period that includes any
fiscal month of the Borrower ending on or before July 31, 2012, Restructuring
Costs incurred during such period plus restructuring expenses incurred related
to the Proposed Restructuring Plan or Updated Proposed Restructuring Plan which
are separate and distinct from the Restructuring Costs defined herein, (vi)
reductions to goodwill and other non-cash impairments associated with intangible
assets and property, plant and equipment during such period; and (vii) any
amounts paid during such period in respect of settlement of any lawsuits.
 
Notwithstanding anything to the contrary herein, any EBITDA derived from, or
related and attributable to, a Subsidiary or a division of the Borrower or its
Subsidiaries sold or otherwise disposed of after the First Amended and Restated
Effective Date shall not be included in the determination or calculation, of
EBITDA for the purposes of calculating the minimum EBITDA covenant (Section
6.20(a) of the Credit Agreement as amended pursuant to this Agreement),
following the closing of any such sale.
 
                 (g)Amendment of Revolving Credit Commitment.  The last sentence
of the defined term “Revolving Credit Commitment” set forth in Section 1.1 of
the Credit Agreement shall be amended and restated in its entirety to read as
follows:
 
The Borrower and the Lenders acknowledge and agree that the Revolving Credit
Commitments of the Lenders aggregate $13,600,000 as of July 2, 2012, which
amount may be further reduced pursuant to that certain letter agreement by and
among the Administrative Agent, the Borrower, Guarantors and Shareholder (the
“July 2 Side Letter Agreement”).
 
 
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                 (h)New Definition of Restructuring Costs.  Section 1.1 of the
Credit Agreement shall be further amended by adding the following new defined
term in its appropriate alphabetical location:
 
“Restructuring Costs” means those cash payments made by the Borrower and its
Subsidiaries for non-recurring costs and expenses arising from contracts and
other commitments that the Borrower and its Subsidiaries have incurred pursuant
to the Original Forbearance Agreement, including, without limitation, (i) the
forbearance fee provided for in Section 9(d) of the Forbearance Agreement, (ii)
investment banking advisory fees payable to Raymond James and Associates, Inc.
(“Raymond James”) pursuant to the engagement letter dated October 21, 2011
between the Borrower and Raymond James (the “RJ Engagement Letter”), (iii) the
reasonable fees and expenses of RAS incurred pursuant to the CRA Engagement
Letter, (iv) the reasonable fees and expenses of any consultant or advisor
retained to conduct a valuation of the Borrower’s business, for GAAP reporting
or otherwise, (v) the Borrower’s, Lender’s and Administrative Agent’s reasonable
legal fees and expenses incurred in connection with the transactions
contemplated by this Agreement and (vi) the reasonable fees and expenses of the
Consultant retained by the Administrative Agent, provided, however, that the
amounts calculated pursuant to clauses (ii), (iii), (iv), (v) and (vi) above
shall, for the purposes of calculating Restructuring Costs and EBITDA, be capped
at (a) $75,000 for the fiscal month ending on or about November 30, 2011; (b)
$150,000 for the fiscal month ending on or about December 31, 2011; (c) $200,000
for the fiscal month ending on or about January 31, 2012; (d) $200,000 for the
fiscal month ending on or about February 29, 2012; (e) $275,000 for the fiscal
month ending on or about March 31, 2012; (f) $275,000 for the fiscal month
ending on or about April 30, 2012; (g) $225,000 for the fiscal month ending on
or about May 31, 2012; (h) $225,000 for the fiscal month ending on or about June
30, 2012; and (i) $225,000 for the fiscal month ending on or about July 31,
2012, provided, further, that, with respect to any month, any unused cap, as
provided for in clauses (a) through (i) above, for that month will carry over
and be added to the following month’s cap and the resulting revised monthly cap
(after taking into account any such increase caused by the carry over of a prior
month’s unused cap) will be the new monthly cap for the purposes of this
provision.  The Borrower shall, not later than twenty (20) days after the end of
each calendar month, provide the Administrative Agent with a report showing the
amount of (x) the cap used for such month, (y) any unused cap that is carried
over to the following month, and (z) the revised monthly cap for the following
month.  For avoidance of doubt and notwithstanding the terms of the Contribution
Agreement, each of the parties hereto agrees that the $2.0 million prepayment of
the Term Loans required by Section 9(e) of the Forbearance Agreement shall not
be deemed or considered a Restructuring Cost and such payment shall not result
in any increase in EBITDA.
 
 
                 (i)Definition of Third Amendment Effective Date and First
Amended and Restated Effective Date.  (i) The Third Amendment Effective Date
shall be the date of the Original Forbearance Agreement.  (ii) The First Amended
and Restated Effective Date shall be the date of this Agreement.
 
                 (j)Amendment of Reserve Requirements.  The last sentence in
Section 2.2 of the Credit Agreement shall be amended and restated in its
entirety to read as follows:
 
The Administrative Agent and the Borrower agree that, without limiting the
foregoing, on the Third Amendment Effective Date, there shall be reserves
against the Borrowing Base (and not against the Revolving Credit) equal to (i)
$1,000,000 plus (ii) $300,000 with respect to Receivables and plus (iii)
$150,000 with respect to Inventory.  Such additional reserves ($300,000 +
$150,000) may be reversed based on the reasonable discretion of the
Administrative Agent.
 
                 (k)Amended Minimum EBITDA Covenant.  Section 6.20(d) of the
Credit Agreement shall be amended and restated in its entirety to read as
follows:
 
(d)           Minimum EBITDA.
 
(i)  The minimum EBITDA amounts for the fiscal quarters ending on or about April
30, 2010 through July 31, 2011 as set forth in the Second Amendment and Waiver
to Credit Agreement by and among the Borrower, the Administrative Agent and the
Lenders party thereto dated as of March 31, 2010 (the “Second Amendment to
Credit Agreement”) shall remain in place and not be amended by this Agreement
and, for such periods, minimum EBITDA shall remain calculated and effective in
accordance with the definitions and provisions in existence prior to giving
effect to this Agreement.
 
(ii)  The Borrower shall not, as of the last day of the fiscal quarter of the
Borrower ending October 31, 2011, permit the EBITDA (as calculated pursuant to
the definition of EBITDA set forth in the Second Amendment to Credit Agreement)
for the twelve calendar months then ended to be less than $12,000,000.
 
 
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(iii)  The Borrower shall not, as of the last day of each fiscal month of the
Borrower ending on or about the dates specified below, permit the EBITDA for the
period beginning on or about November 1, 2011 and ending on the month then ended
to be less than:
 
Fiscal Month ending on or about:
EBITDA for the  period beginning on or about November 1, 2011 and ending on the
Month then ended shall not be less than:
November 30, 2011
$475,000
December 31, 2011
$925,000
January 31, 2012
$1,575,000
February 29, 2012
$1,990,000
March 31, 2012
$2,830,000
April 30, 2012
$3,750,000
 May 31, 2012  $4,400,000  June 30, 2012  $5,300,000  July 31, 2012  $5,900,000

 
                  (l)         Amendment to Schedule 1 of Compliance
Certificate.  Schedule 1 to Exhibit E to the Credit Agreement shall be amended
and restated in its entirety in the form of Schedule 1 to the Compliance
Certificate attached hereto as Exhibit A.
 
                 (m)Termination of Requirement to Provide Duff and Phelps
Reports.  The Borrower’s obligation to supply reports prepared by Duff and
Phelps pursuant to Section 6.27 of the Credit Agreement is hereby terminated.
 
                 (n)Financial Reporting.  In addition to the existing reporting
requirements under the Credit Agreement, the Borrower shall (a) deliver to the
Administrative Agent, (i) not later than 20 days after the end of each calendar
month, financial statements for such month, (ii) an initial 13 week cash flow
projection on February 8, 2012 based on performance through February 3, 2012,
and each week thereafter, not later than three (3) Business Days after the last
Business Day of each week, a rolling 13-week cash flow projection, and a
reconciliation of actual performance to the preceding 13-week forecast, (iii)
beginning on February 8, 2012 and each week thereafter, not later than three (3)
Business Days after the last Business Day of each week, consolidated bank cash
balances and sales volume recorded in Borrower’s accounting systems by business
unit for that week, and (iv) not later than December 31, 2011, revised
projections for the first six (6) months of fiscal year 2012 that were used as
the basis for revising the minimum EBITDA levels as provided for in Section 9(k)
hereof, and such report shall be broken down by line item in the same manner as
set forth in the budget income statement for fiscal year 2012 that was provided
to the Administrative Agent, and also contain a comparison to actual 2011
figures for the same six month period; and (b) make its President, Chief
Financial Officer and CRA available on a weekly basis for a conference call with
the Administrative Agent and Lender to discuss any questions they may have with
respect to such reporting.
 
                 (o)Operation of Business.  During the Forbearance Period, the
Borrower shall (a) continue to operate its business and affairs in the ordinary
course of business except as limited or otherwise contemplated by this Agreement
and (b) not use its ordinary income or its assets (including any cash on hand)
other than in the operation of its business in the ordinary course of business
and as limited or otherwise contemplated in this Agreement.
 
                 (p)Distributions to Stockholders.  During the Forbearance
Period, the Borrower and its Subsidiaries shall not make any cash distributions
(including Stockholder Distributions) on account of any equity interests or
stock.
 
                 (q)Asset Sales/Strategic Transactions.  During the Forbearance
Period and without having first received the prior written consent of the
Administrative Agent, the Borrower shall not (a) undertake or consummate any
asset sale outside of the ordinary course of business or (b) otherwise undertake
to merge its business assets and liabilities or business operations with any
other Person, provided, that notwithstanding the foregoing, the Borrower shall
pursue the following asset transactions, subject to (I) the approval of the
Administrative Agent and (II) the July 2 Side Letter Agreement:  (i) the
Borrower shall make a good faith effort to complete the sale or financing (if
legally assignable) or other monetization, on or before July 31, 2012, of
certain accounts receivable that have been identified and that are not eligible
for inclusion in the Borrowing Base (the “Government A/R”) that shall result in
at least $1.5 million in net cash sale proceeds (and the parties hereto agree
that all of such net cash proceeds of such sale shall be applied to the
outstanding Term Loans in the inverse order of maturity); and (ii) the Borrower
shall make a good faith effort to identify alternatives to maximize the credit
metrics of the Targeted Transaction which may include the completion of the sale
(or alternate transaction), on or before August 15, 2012, of assets referred to
as the “Targeted Transaction” that shall result in at least $2.6 million in
gross cash sale proceeds (and the parties hereto agree that all of such cash
proceeds, net of any amounts necessary to satisfy any Permitted Liens attaching
to such assets or the sale proceeds thereof (other than the Liens securing the
Obligation under the Credit Agreement), shall be applied to the outstanding
Loans in a manner as the Administrative Agent, in its sole discretion, shall
determine.  Nothing in this Agreement shall supersede, alter or modify the terms
of the July 2 Side Letter Agreement.  Each of the Lender parties hereto
reaffirms and acknowledges its prior consent to the July 2 Side Letter
Agreement.
 
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                 (r)No Modification or Termination of RJ Engagement Letter.  The
Borrower shall not terminate or otherwise modify the terms of the RJ Engagement
Letter without the prior written consent of the Administrative Agent.  The
Borrower represents, warrants and agrees that nothing in this Agreement, the
Original Forbearance Agreement, or the transactions contemplated herein shall be
deemed or constitute a “Financing Transaction,” “Restructuring Transaction,” or
“Business Combination Transaction” (as such terms are defined in the RJ
Engagement Letter) for which a “Financing Transaction Fee,” “Restructuring
Transaction Fee,” or “Business Combination Transaction Fee” (as such terms are
defined in the RJ Engagement Letter) is due and owing to Raymond James.  The
Borrower shall provide to the Administrative Agent at closing a written
acknowledgement of Raymond James to the terms of the preceding sentence.
 
                 (s)Amended Definition of Applicable Margin.  The definition of
“Applicable Margin” set forth in Section 1.1 of the Credit Agreement shall be
amended and restated in its entirety to read as follows:
 
“Applicable Margin” means, with respect to the Loans, Reimbursement Obligations,
and the commitment fees and letter of credit fees payable under Section 2.13
hereof, (i) the rate of six percent (6.0%) per annum if utilizing the Base Rate,
or (ii) the rate of four percent (4.0%) per annum if utilizing the Amended Base
Rate.
 
                 (t)New Definition of Amended Base Rate.  Section 1.1 of the
Credit Agreement shall be further amended by adding the following new defined
term in its appropriate alphabetical location:
 
“Amended Base Rate” means for any day the greater of (i) the rate of interest
announced by the Administrative Agent from time to time as its “prime rate” as
in effect on such day, with any change in the Amended Base Rate resulting from a
change in said prime rate to be effective as of the date of the relevant change
in said prime rate (it being acknowledged that such rate may not be the
Administrative Agent’s best or lowest rate) and (ii) the sum of (x) the Federal
Funds Rate, plus (y) 1/2 of 1%.
 
                 (u)Amended Definition of Base Rate.  The definition of “Base
Rate” set forth in Section 1.1 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
 
“Base Rate” means for any day (a) a floating rate of interest equal to LIBOR for
such day, if such rate is available, and (b) if LIBOR is unavailable, the
Amended Base Rate.
 
                 (v)Amended Definition of LIBOR.  The definition of “LIBOR” set
forth in Section 1.1 of the Credit Agreement shall be amended and restated in
its entirety to read as follows:
 
“LIBOR” means for any day the thirty (30) day LIBOR rate, as published in the
Money Rates Section of The Wall Street Journal on the date of determination
rounded up to the nearest one-eighth (1/8) of one percent.  Should more than one
such rate be published on any given day, the higher of said rates shall
apply.  Should any date of determination fall on a date other than a Business
Day or on a date when The Wall Street Journal is not published, the rate shall
be determined with reference to the applicable rate shown in the most recently
published edition of The Wall Street Journal.  In the event The Wall Street
Journal ceases publication or ceases to publish such LIBOR, the Administrative
Agent shall select a comparable publication to determine such LIBOR and provide
notice thereof to the Borrower.  The establishment of LIBOR on any given day by
the Administrative Agent and the Administrative Agent’s calculation of the
applicable interest rate for that day shall (in the absence of manifest error)
be final and binding.  LIBOR may or may not be the lowest rate based upon the
market for U.S. dollar deposits in the London Interbank Eurodollar Market at
which the Administrative Agent prices Loans on the date on which LIBOR is
determined by the Administrative Agent as set forth herein.
 
                 (w)Amended Sections 2.4(a) (b) and (c).  Applicable Interest
Rates.  Sections 2.4(a), (b) and (c) of the Credit Agreement shall be amended
and restated in their entirety to read as follows:
 
 
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Section 2.4.                      Applicable Interest Rates.  (a) Base Rate
Loans.   From and after the First Amended and Restated Effective Date, and
notwithstanding anything to the contrary in the Credit Agreement, the Borrower
(i) shall not be permitted to request the Lenders to advance a Borrowing of
Eurodollar Loans, (ii) shall only be permitted to request the Lenders to advance
a Borrowing of Base Rate Loans and (iii) shall not be able to elect to change or
continue the type of interest rate borne by each Borrowing or, subject to
Section 2.6 hereof, a portion thereof.  All Eurodollar Loans outstanding on the
First Amended and Restated Effective Date (whether such Loan is a Term Loan,
Revolving Loan, or Swing Loan) shall be automatically converted to Base Rate
Loans on the First Amended and Restated Effective Date.
 
(b)           Subject to Section 2.4(c) hereof, each Base Rate Loan made or
maintained by a Lender shall bear interest (computed on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed) on the unpaid
principal amount thereof from the date such Loan is advanced, continued or
created by conversion from a Eurodollar Loan until maturity (whether by
acceleration or otherwise) at a rate per annum equal to the sum of the
Applicable Margin plus the Base Rate from time to time in effect, payable in
arrears on the last Business Day of each month and at maturity (whether by
acceleration or otherwise).
 
(c)           Upon the occurrence of any Default or Event of Default or after
acceleration, the Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal amount of all
Loans owing by it at a rate per annum equal to:  (i) for any Revolving Loan or
Swing Loan, the Applicable Margin plus the Base Rate from time to time in
effect; and (ii) for any Term Loan, eight percent (8%) plus the Base Rate (or
six percent (6%) plus the Amended Base Rate if utilizing the Amended Base Rate)
from time to time in effect, provided, that in the event Borrower fails to pay
the full amount of interest required pursuant to this clause (ii) in cash on the
due date therefore, the difference between any amount of interest due under this
clause (ii) and the amount of such interest paid in cash shall be deferred and
added to the principal amount of the Term Loans on a monthly basis, and when so
added, shall itself bear interest at the applicable rates for Term Loans and
shall be due and payable on the final maturity date of the Term Loans set forth
in Section 2.7 of the Credit Agreement.
 
                 (x)PIK Compounding Forbearance Fee.  (i) In addition to the
cash interest payable pursuant to Section 2.4 of the Credit Agreement or
otherwise, beginning May 1, 2012, the Borrower shall pay Lenders a compounding
forbearance fee equal to 2.00% per annum of the outstanding amount of the Term
Loans (the “PIK Compounding Forbearance Fee”) and the payment of the PIK
Compounding Forbearance Fee shall be deferred and added to the principal amount
of the Term Loans on a monthly basis.  The PIK Compounding Forbearance Fee when
so added to the principal amount of the Term Loans shall itself bear interest at
the applicable rates for Term Loans and shall be due and payable on the final
maturity date of the Term Loans set forth in Section 2.7 of the Credit
Agreement.
 
                 10.Conditions Precedent.  The effectiveness of this Agreement
is subject to the satisfaction of the following conditions precedent:
 
                 (a)The Borrower, each Guarantor, the Shareholder, the
Administrative Agent, and the Required Lenders shall have duly executed and
delivered this Agreement.
 
                 (b)The Borrower’s payment in full and in cash of the extension
fee referred to in Section 9(d)(ii) above to each Lender party hereto.
 
                 (c)The Borrower’s payment in full and in cash the invoiced and
unpaid fees and expenses of the Administrative Agent’s counsel and Consultant
pursuant to wire transfer instructions provided by or at the direction of the
Administrative Agent.
 
                 (d)The receipt by the Administrative Agent of a written
acknowledgement by Raymond James pursuant to Section 9(r) above.
 
                 (e)The representations and warranties contained herein shall be
true and correct in all material respects as of the date hereof, and no Default
or Event of Default, other then the Designated Defaults, shall exist on the date
hereof.
 
                 (f)The Administrative Agent shall have received such other
certificates, resolutions, documents and agreements as the Administrative Agent
may reasonably request.
 
              11.No Waiver of Defaults and Reservation of Rights.   (a)  Neither
the Administrative Agent nor any Lender has waived, is hereby waiving, or has
any intention of waiving under this Agreement, any Designated Defaults or any
other Defaults or Events of Default which may be continuing on the date hereof
or any Defaults or Events of Default which may occur after the date hereof
(whether the same or similar to the Designated Defaults or otherwise), and
neither the Administrative Agent nor any Lender has agreed to forbear with
respect to any of its rights or remedies concerning any Defaults or Events of
Default (other than, during the Forbearance Period, the Designated Defaults to
the extent expressly set forth herein), which may have occurred or are
continuing as of the date hereof or which may occur after the date hereof.
 
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              (b)Neither any “day-by-day” discretionary extensions of credit by
the Administrative Agent and the Lenders nor anything in this Agreement or in
any ongoing discussions or negotiations between the Administrative Agent and/or
any one or more of the Lenders, on the one hand, and the Borrower and Borrower’s
Affiliates, on the other hand, nor any delay on the part of the Administrative
Agent or the Lenders in exercising any of their respective rights and remedies
under the Credit Agreement, the other Loan Documents and/or applicable law,
shall directly or indirectly:  (i) create any obligation to forbear from taking
any enforcement action, or to make any further extensions of credit (other than
during the Forbearance Period, with respect to the Designated Defaults to the
extent expressly set forth herein), (ii) constitute a consent to or waiver of
any past, present or future Default or Event of Default or other violation of
any provisions of the Credit Agreement or any other Loan Documents, (iii) amend,
modify or operate as a waiver of any provision of the Credit Agreement or any
other Loan Documents or any right, power, privilege or remedy of the
Administrative Agent or any one or more of the Lenders thereunder or under
applicable law or constitute an agreement to forbear (other than during the
Forbearance Period, with respect to the Designated Defaults to the extent
expressly set forth herein) or to restructure the Obligations in any respect or
otherwise modify the capital structure of the Borrower or any of its Affiliates,
or (iv) constitute a course of dealing or other basis for altering any rights or
obligations of Administrative Agent or the Lenders under the Loan Documents or
any Obligations of the Borrower under the Credit Agreement, other Loan Documents
or any other contract or instrument.  Nothing contained in this Agreement shall
confer on Borrower or any other Person any right to notice or cure periods with
respect to any Event of Default.
 
              (c)The Administrative Agent and the Lenders have not waived the
Designated Defaults and each of Administrative Agent and the Lenders expressly
reserves all of its rights, powers, privileges and remedies under the Credit
Agreement, the other Loan Documents and/or applicable law including, without
limitation, subject to Section 5(b) above solely with respect to the Designated
Defaults, its right at any time, as applicable, (i) to determine not to make
further Loans or incur further Letter of Credit Obligations under the Credit
Agreement as a result of the Designated Defaults and/or to terminate their
Commitments to make Loans and incur Letter of Credit Obligations, (ii) to
accelerate the Obligations, (iii) to charge the default rate of interest in
respect of the Obligations (as of any date from and after the date on which the
first Designated Default first occurred) and to enforce the prohibition against
incurring, continuing or converting any Loan as or into a Eurodollar Loan,
(iv) to commence any legal or other action to collect any or all of the
Obligations from any or all of the Borrower, any Guarantor, and any other person
liable therefor and/or any Collateral, (v) to foreclose or otherwise realize on
any or all of the Collateral and/or as appropriate, set-off or apply to the
payment of any or all of the Obligations, any or all of the Collateral, (vi) to
take any other enforcement action or otherwise exercise any or all rights and
remedies provided for by any or all of the Credit Agreement, the other Loan
Documents or applicable law, and (vii) to reject any forbearance, financial
restructuring or other proposal made by or on behalf of Borrower, including,
without limitation any Proposed Restructuring Plan, or any creditor or equity
holder.  Subject to Section 5(b) above, solely with respect to the Designated
Defaults, each of Administrative Agent and the Lenders may exercise their
respective rights, powers, privileges and remedies, including those set forth in
(i) through (vii) above, at any time in its sole and absolute discretion without
further notice to the extent permitted by applicable law.  No oral
representations or course of dealing on the part of Administrative Agent, any
Lender or any of its officers, employees or agents, and no failure or delay by
Administrative Agent or any Lender with respect to the exercise of any right,
power, privilege or remedy under any of the Credit Agreement, other Loan
Documents or applicable law shall operate as a waiver thereof, and the single or
partial exercise of any such right, power, privilege or remedy shall not
preclude any later exercise of any other right, power, privilege or remedy.
 
              12.Acknowledgement of Liens.  The Borrower hereby acknowledges and
agrees that the Obligations owing to the Administrative Agent and the Lenders
arising out of or in any manner relating to the Loan Documents, as well as all
Hedging Liability and Funds Transfer and Deposit Account Liability, shall
continue to be secured by Liens on all assets and property of the Borrower,
including, without limitation, all accounts, chattel paper, instruments,
documents, general intangibles, investment property, deposit accounts,
inventory, equipment, fixtures, real estate, and certain other assets and
properties of the Borrower pursuant to the Loan Documents heretofore executed
and delivered by the Borrower, and nothing herein contained shall in any manner
affect or impair the priority of the Liens created and provided for thereby as
to the indebtedness, obligations, and liabilities which would be secured thereby
prior to giving effect to this Agreement.  The Borrower hereby acknowledges,
confirms and agrees that the Administrative Agent and the Lenders have and shall
continue to have a valid, enforceable and perfected first-priority lien upon and
security interest in the Collateral granted to Administrative Agent and the
Lenders pursuant to the Loan Documents.
 
              13.Release, Covenant not to Sue, Acknowledgment. (a)  The
Borrower, each Guarantor and the Shareholder (collectively, the “Releasing
Parties”) each hereby absolutely and unconditionally releases and forever
discharges the Administrative Agent and each Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents, attorneys,
Consultants, representatives and employees of any of the foregoing (each a
“Released Party”), from any and all claims, demands or causes of action of any
kind, nature or description relating to or arising out of or in connection with
or as a result of any of the Obligations, the Credit Agreement, the Contribution
Agreement, any other Loan Documents, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which each
Releasing Party has had, now has or has made claim to have against any such
person for or by reason of any act, omission, matter, cause or thing whatsoever
arising from the beginning of time to and including the date of this Agreement,
whether such claims, demands and causes of action are matured or unmatured or
known or unknown.  It is the intention of each Releasing Party in providing this
release that the same shall be effective as a bar to each and every claim,
demand and cause of action specified.  Each Releasing Party acknowledges that it
may hereafter discover facts different from or in addition to those now known or
believed to be true with respect to such claims, demands, or causes of action
and agree that this instrument shall be and remain effective in all respects
notwithstanding any such differences or additional facts.  Each Releasing Party
understands, acknowledges and agrees that the release set forth above may be
pleaded as a full and complete defense and may be used as a basis for an
injunction against any action, suit or other proceeding which may be instituted,
prosecuted or attempted in breach of the provisions of such release.
 
 
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              (b)Each Releasing Party, on behalf of itself and its successors,
assigns, and other legal representatives, hereby absolutely, unconditionally and
irrevocably, covenants and agrees with and in favor of each Released Party above
that it will not sue (at law, in equity, in any regulatory proceeding or
otherwise) any Released Party on the basis of any claim released, remised and
discharged by such Releasing Party pursuant to the above release.  If any
Releasing Party or any of its successors, assigns or other legal representations
violates the foregoing covenant, such Releasing Party, for itself and its
successors, assigns and legal representatives, agrees to pay, in addition to
such other damages as any Released Party may sustain as a result of such
violation, all reasonable attorneys’ fees and costs incurred by such Released
Party as a result of such violation.
 
              (c)The Borrower hereby acknowledges its status as a Borrower and
affirms its obligations under the Credit Agreement and the other Loan Documents
and each Releasing Party represents and warrants that, to its knowledge, there
are no liabilities, claims, suits, debts, liens, losses, causes of action,
demands, rights, damages or costs, or expenses of any kind, character or nature
whatsoever, known or unknown, fixed or contingent, which such Releasing Party
may have or claim to have against any Released Party arising with respect to the
Obligations, the Credit Agreement, the Contribution Agreement or any other Loan
Documents, and each Releasing Party further acknowledges that, as of the date
hereof, it does not have any counterclaim, set-off, or defense against the
Released Parties, each of which such Releasing Party hereby expressly waives.
 
              14.Representations, Warranties and Covenants of Borrower.  In
order to induce the Administrative Agent and the Lenders to enter into this
Agreement, the Borrower, each Guarantor and Shareholder, as applicable, hereby
represents, warrants and covenants to the Administrative Agent and the Lenders,
as of the date hereof and any other date on which representations and warranties
are otherwise remade or deemed remade under the Credit Agreement that:
 
                 (a)Representations, Warranties and Covenants.  (i) after giving
effect to this Agreement, no representation or warranty of the Borrower
contained in the Credit Agreement or any of the Loan Documents, including this
Agreement, shall be untrue or incorrect in any material respect as of the date
hereof, except to the extent that such representation or warranty expressly
relates to an earlier date and (ii) no Default or Event of Default (other than
the Designated Defaults) has occurred or is continuing, or would result after
giving effect hereto.
 
                 (b)Authorization, Etc.  The Borrower and each Guarantor has the
power and authority to execute, deliver and perform this Agreement.  The
Borrower and each Guarantor has taken all necessary action (including, without
limitation, obtaining approval of its stockholders, if necessary) to authorize
its execution, delivery and performance of this Agreement.  No consent, approval
or authorization of, or declaration or filing with, any Governmental Authority,
and no consent of any other Person, is required in connection with the
Borrower’s and the Guarantors’ execution, delivery and performance of this
Agreement, except for those already duly obtained.  This Agreement has been duly
executed and delivered by the Borrower, Guarantors and Shareholder and
constitutes the legal, valid and binding obligation of the Borrower, Guarantors
and Shareholder enforceable against them, respectively, in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditor rights
generally or by equitable principles relating to enforceability.  The Borrower’s
and Guarantors’ execution, delivery or performance of this Agreement does not
(i) contravene the terms of any of the Borrower’s or Guarantors’ respective
organization documents; (ii) conflict with or constitute a violation or breach
of, or constitute a default under, or result in the creation or imposition of
any Lien (other than pursuant to the Collateral Documents) upon the property of
the Borrower or Guarantors.
 
              15.Reference to and Effect on Loan Documents.
 
              (a)Ratification.  Except as specifically provided in this
Agreement, the Credit Agreement and the Loan Documents shall remain in full
force and effect and the Borrower hereby ratifies and reaffirms each term and
condition set forth in the Credit Agreement and in the other Loan Documents,
effective as of the date hereof.
 
              (b)No Waiver.  This Agreement is only applicable and shall only be
effective in the specific instances and for the specific purposes for which made
or given.  Except as specifically provided in this Agreement, the execution,
delivery and effectiveness of this Agreement shall not operate as a waiver or
forbearance of any right, power or remedy of the Administrative Agent or any
Lender under the Credit Agreement or any of the Loan Documents, or constitute a
consent, waiver or modification with respect to any provision of the Credit
Agreement or any of the Loan Documents, which shall remain in full force and
effect.  Upon the effectiveness of this Agreement each reference in (i) the
Credit Agreement to “this Agreement,” “hereunder,” “hereof,” or words of similar
import and (ii) any Loan Document to “the Agreement” shall, in each case and
except as otherwise specifically stated therein, mean and be a reference to the
Credit Agreement as modified hereby.
 
              16.Affirmation of Guarantors.  (a)  Each Guarantor (as defined in
the Guaranty) hereby acknowledges that it has reviewed the terms and provisions
of this Agreement and consents to the terms and conditions of this Agreement and
any modification of the Loan Documents effected pursuant to this
Agreement.  Each Guarantor hereby confirms to the Administrative Agent and the
Lenders that, after giving effect to this Agreement, the Guaranty of such
Guarantor and each other Loan Document to which such Guarantor is a party
continues in full force and effect and is the legal, valid and binding
obligation of such Guarantor, enforceable against such Guarantor in accordance
with its terms except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors’ rights
generally or by equitable principles relating to enforceability.  Each Guarantor
further acknowledges, confirms and agrees that Administrative Agent and the
Lenders have and shall continue to have a valid, enforceable and perfected
first-priority lien (subject only to Permitted Liens) upon and security interest
in the Collateral granted to Administrative Agent and the Lenders pursuant to
the Loan Documents or otherwise granted to or held by Administrative Agent and
the Lenders.
 
 
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              (b)Each Guarantor acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this Agreement, such Guarantor is
not required by the terms of the Credit Agreement or any other Loan Document to
consent to the waivers or modifications to the Credit Agreement effected
pursuant to this Agreement, (ii) nothing in the Credit Agreement, this Agreement
or any other Loan Document shall be deemed to require the consent of such
Guarantor to any future waivers or modifications to the Credit Agreement, and
(iii) the Lender parties hereto are relying on the assurances provided herein in
entering into this Agreement and maintaining credit outstanding to the Borrower.
 
              17.Shareholder Acknowledgement.  (a)  The Shareholder hereby
acknowledges that it has reviewed the terms and provisions of this Agreement and
consents to the terms and conditions of this Agreement and any modification of
the Loan Documents effected pursuant to this Agreement.  The Shareholder further
consents and agrees to the application of the funds in the Cash Collateral
Account in the manner provided by Section 9(e) of this Agreement.
 
              (b)The Shareholder acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Agreement, the
Shareholder is not required by the terms of the Credit Agreement or any other
Loan Document or Contribution Agreement to consent to the waivers or
modifications to the Credit Agreement effected pursuant to this Agreement, (ii)
nothing in the Credit Agreement, this Agreement or any other Loan Document or
Contribution Agreement shall be deemed to require the consent of the Shareholder
to any future waivers or modifications to the Credit Agreement, and (iii) the
Lender parties hereto are relying on the assurances provided herein in entering
into this Agreement and maintaining credit outstanding to the Borrower.
 
              18.Miscellaneous.
 
              (a)Successors and Assigns. This Agreement shall be binding on and
shall inure to the benefit of the Borrower, the Administrative Agent and the
Lenders and their respective successors and assigns, except as otherwise
provided herein.  The Borrower may not assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder without
the prior written consent of the Administrative Agent and the Lenders.  The
terms and provisions of this Agreement are for the purpose of defining the
relative rights and obligations of the Borrower, the Administrative Agent and
the Lenders with respect to the transactions contemplated hereby and there shall
be no third party beneficiaries (other than the Released Parties) of any of the
terms and provisions of this Agreement.
 
              (b)Entire Agreement. This Agreement, including all schedules and
other documents attached hereto or incorporated by reference herein or delivered
in connection herewith, constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all other understandings,
oral or written, with respect to the subject matter hereof.
 
              (c)Fees and Expenses.  Subject to Section 9(c) above, the Borrower
agrees to pay on demand all reasonable fees, costs and out-of-pocket expenses
(including attorneys’ fees and expenses) incurred by the Administrative Agent
pursuant to the Loan Documents or in connection with the preparation, execution
and delivery of this Agreement and the other instruments and documents being
executed and delivered in connection herewith and the transactions contemplated
hereby (the Borrower acknowledges that it will receive summary invoice(s)
reflecting only the total amount then due and that such summary invoice(s) will
not contain any narrative description of the services provided, and that
delivery of such summary invoice(s) shall not in any way constitute a waiver of
any right or privilege of the Administrative Agent and the Lenders associated
with such invoice(s)).
 
 
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              (d)Headings. Section and sub-section headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
 
              (e)Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
 
              (f)Conflict of Terms.  Except as otherwise provided in this
Agreement, if any provision contained in this Agreement is in conflict with, or
inconsistent with, any provision in any of the Loan Documents, the provision
contained in this Agreement shall govern and control.
 
              (g)Counterparts.  This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.  Delivery of an executed signature page to this
Agreement by facsimile transmission or by e-mail transmission of an Adobe
portable document format file (also known as a “PDF” file) shall be effective as
delivery of a manually executed counterpart hereof.
 
              (h)Incorporation of Credit Agreement.  The provisions contained in
Sections 10.16 (Governing Law) and 10.22 (Submission to Jurisdiction; Waiver of
Jury Trial) of the Credit Agreement are incorporated herein by reference to the
same extent as if reproduced herein in their entirety, except with reference to
this Agreement rather than the Credit Agreement.
 
              (i)Reviewed by Attorneys.  The Borrower, each Guarantor and the
Shareholder represent and warrant to Administrative Agent and the Lenders that
it (i) understands fully the terms of this Agreement and the consequences of the
execution and delivery of this Agreement, (ii) has been afforded an opportunity
to have this Agreement reviewed by, and to discuss this Agreement and the
documents executed in connection herewith, with such attorneys and other persons
and advisors as the Borrower, Guarantors and Shareholder, respectively, may
wish, and (iii) has entered into this Agreement and executed and delivered all
documents in connection herewith of its own free will and accord and without
threat, duress or other coercion of any kind by any Person.  The parties hereto
acknowledge and agree that neither this Agreement nor any of the other documents
executed pursuant hereto shall be construed more favorably in favor of one party
over the other based upon which party drafted the same, it being acknowledged
that all parties hereto contributed substantially to the negotiation and
preparation of this Agreement and the other documents executed pursuant hereto
or in connection herewith.
 
              (j)Further Assurances.  The Borrower, Guarantors and Shareholder
agree to take all further actions and execute all further documents as
Administrative Agent may from time to time reasonably request to carry out the
transactions contemplated by this Agreement and all other agreements executed
and delivered in connection herewith.

[Signature Pages to Follow]
 

 
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In Witness Whereof, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first set forth
above.
 

   “Borrower”        Champion Industries, Inc.            By /s/Marshall T.
Reynolds    Name  Marshall T. Reynolds    Title CEO

 

              
 
 

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“GUARANTORS”

 
 
The Chapman Printing Company, Inc., a West Virginia corporation

 
Stationers, Inc., a West Virginia corporation

 
Bourque Printing, Inc., a Louisiana corporation

 
Dallas Printing Company, Inc., a Mississippi corporation

 
Carolina Cut Sheets, Inc., a West Virginia corporation

 
Donihe Graphics, Inc., a Tennessee corporation

 
Smith & Butterfield Co., Inc., an Indiana corporation

 
The Merten Company, an Ohio corporation

 
Interform Corporation, a Pennsylvania corporation

 
CHMP Leasing, Inc., a West Virginia corporation

 
Blue Ridge Printing Co., Inc., North Carolina corporation

 
Capitol Business Equipment, Inc., a West Virginia corporation

 
Thompson’s of Morgantown, Inc., a West Virginia corporation

 
Independent Printing Service, Inc., an Indiana corporation

 
Diez Business Machines, Inc., a Louisiana corporation

 
Transdata Systems, Inc., a Louisiana corporation

 
Syscan Corporation, a West Virginia corporation

 
Champion Publishing, Inc., a West Virginia corporation

 
 
By /s/Todd R. Fry

 
Name: Todd R. Fry

 
Title:  Vice President and Chief Financial Officer

 
 

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  ”SHAREHOLDER”   /s/Marshall T. Reynolds   Mr. Marshall Reynolds, individually,
   

 

 
 

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  “Lenders”        Fifth Third Bank, an Ohio banking corporation, as a Lender,
as L/C Issuer, and as Administrative Agent           By  /s/Donald K. Mitchell  
Name: Donald K. Mitchell   Title: Vice President

 
 

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   HUNTINGTON NATIONAL BANK            By /s/Bruce G. Shearer    Name: Bruce G.
Shearer    Title: Senior Vice President

 
 
 

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   SUNTRUST BANK               By /s/William S. Krueger    Name: William S.
Krueger    Title: First Vice President

 
 
 

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   OLD NATIONAL BANK, NA, SUCCESSOR IN INTEREST TO THE FDIC AS RECEIVER OF
INTEGRA BANK NATIONAL ASSOCIATION            By /s/John Whyman    Name: John
Whyman    Title: Vice President

 
 
 

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   UNITED BANK, INC.            By /s/Linda J. Pleasants    Name: Linda J.
Pleasants    Title: Vice President

 
 
 

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   SUMMIT COMMUNITY BANK            By /s/Ann Vincent Urling    Name: Ann
Vincent Urling    Title: Senior Vice President

 
 
 

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Exhibit  A
 
To First Amended and Restated Limited Forbearance Agreement and
Fourth Amendment to Credit Agreement
 
 
Amended Schedule 1 to Compliance Certificate

 
 

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Schedule I
to Compliance Certificate
 
Champion Industries, Inc.
 
Compliance Calculations
for Credit Agreement dated as of September 14, 2007
 
(SECTION D BELOW TO BE COMPLETED MONTHLY AND PROVIDED TO ADMINISTRATIVE AGENT ON
OR BEFORE THE 20TH DAY FOLLOWING THE FISCAL MONTH THEN ENDED)
 
Calculations as of _____________, _______

 

The following sections set forth the financial covenants established in Section
6.20 of the Credit Agreement along with the primary definitions from Section 1.1
of the Credit Agreement used in such covenants.
A worksheet for calculating covenant compliance is set forth at the end of each
respective section.
A.Leverage Ratio (Section 6.20(a))
 
The Borrower shall not, as of the last day of each fiscal quarter of the
Borrower ending on or about the dates specified below, permit the Leverage Ratio
on such date to be greater than:
Fiscal quarter ending on or about:
The Leverage Ratio shall not be greater than:
April 30, 2010
6.50: 1.00
July 31, 2010
6.00: 1.00
October 31, 2010
5.50: 1.00
January 31, 2011
5.00: 1.00
April 30, 2011
4.50:1.00
July 31, 2011
4.25: 1.00
October 31, 2011
4.00: 1.00
January 31, 2012
3.75: 1.00
April 30, 2012
and at each quarter end thereafter
3.50:1.00

 
 
 
1

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“Leverage Ratio” means, as of the date of determination thereof, the ratio of
Total Funded Debt of the Borrower and its Subsidiaries as of such date to EBITDA
for the period of four fiscal quarters then ended; provided that for purposes of
this definition, EBITDA  for the fiscal quarter of the Borrower ending July 31,
2009, shall be equal to $2,231,000, EBITDA for the fiscal quarter of the
Borrower ending October 31, 2009, shall be equal to $2,882,000 and EBITDA for
the fiscal quarter of the Borrower ending January 31, 2010 shall be equal to
$2,412,000.
 
“Total Funded Debt” means, at any time the same is to be determined, the
aggregate of all Indebtedness of the Borrower and its Subsidiaries at such time
determined on a consolidated basis in accordance with GAAP.
 
“Indebtedness” means for any Person (without duplication) (a) all indebtedness
of such Person for borrowed money, whether current or funded, or secured or
unsecured, (b) all indebtedness for the deferred purchase price of Property or
services, (c) all indebtedness created or arising under any conditional sale or
other title retention agreement with respect to Property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of a default are limited to repossession or sale of such
Property), (d) all indebtedness secured by a purchase money mortgage or other
Lien to secure all or part of the purchase price of Property subject to such
mortgage or Lien, (e) all obligations under leases which shall have been or must
be, in accordance with GAAP, recorded as Capital Leases in respect of which such
Person is liable as lessee, (f) any liability in respect of banker’s acceptances
or letters of credit, (g) any indebtedness, whether or not assumed, secured by
Liens on Property acquired by such Person at the time of acquisition thereof,
(h) all obligations under any so-called “synthetic lease” transaction entered
into by such Person, (i) all obligations under any so-called “asset
securitization” transaction entered into by such Person, and (j) all Contingent
Obligations, it being understood that the term “Indebtedness” shall not include
trade payables, accrued payroll and commissions, taxes accrued and withheld,
accrued and deferred income taxes and other acquired expenses arising in the
ordinary course of business.
 
“EBITDA” means with reference to any period, Net Income for such period minus
(a) non-cash ordinary and extraordinary gains for such period, plus (b) the sum
of all amounts deducted in arriving at such Net Income amount in respect of
(i) Interest Expense for such period, (ii) federal, state, and local income
taxes for such period, (iii) depreciation of fixed assets and amortization of
intangible assets for such period, (iv) non-cash, non-recurring extraordinary
charges for such period to the extent approved in writing by the Administrative
Agent in its sole discretion, (v) with respect to any period that includes any
fiscal month of the Borrower ending on or before July 31, 2012, Restructuring
Costs incurred during such period plus restructuring expenses incurred related
to the Proposed Restructuring Plan or Updated Proposed Restructuring Plan which
are separate and distinct from the Restructuring Costs defined herein, (vi)
reductions to goodwill and other non-cash impairments associated with intangible
assets and property, plant and equipment during such period; and (vii) any
amounts paid during such period in respect of settlement of any lawsuits.
 
“Net Income” means, with reference to any period, the net income (or net loss)
of the Borrower and its Subsidiaries for such period computed on a consolidated
basis in accordance with GAAP; provided that, there shall be excluded from Net
Income (a) the net income (or net loss) of any Person accrued prior to the date
it becomes a Subsidiary of, or has merged into or consolidated with, the
Borrower or another Subsidiary, except to the extent that the Borrower has
delivered the financial statements of the Acquired Business for such period,
which financial statements shall have been audited by an independent accounting
firm reasonably satisfactory to the Administrative Agent, and the Administrative
Agent agrees to the inclusion of such net income (or net loss) of such Person
and (b) the net income (or net loss) of any Person (other than a Subsidiary) in
which the Borrower or any of its Subsidiaries has a equity interest in, except
to the extent of the amount of dividends or other distributions actually paid to
the Borrower or any of its Subsidiaries during such period.
 
“Subordinated Debt” means Indebtedness owed by the Borrower to Marshall Reynolds
under the Subordinated Notes and all other Subordinated Indebtedness.
 
“Restructuring Costs” means those cash payments made by the Borrower and its
Subsidiaries for non-recurring costs and expenses arising from contracts and
other commitments that the Borrower and its Subsidiaries have incurred pursuant
to the Limited Forbearance Agreement and Third Amendment to Credit Agreement by
and among the Administrative Agent, Lender parties thereto, Borrower, Guarantors
and Shareholder (“Forbearance Agreement”), including, without limitation, (i)
the forbearance fee provided for in Section 9(d) of the Forbearance Agreement,
(ii) investment banking advisory fees payable to Raymond James and Associates,
Inc. (“Raymond James”) pursuant to the engagement letter dated October 21, 2011
between the Borrower and Raymond James (the “RJ Engagement Letter”), (iii) the
reasonable fees and expenses of the CRA incurred pursuant to the CRA Engagement
Letter, (iv) the reasonable fees and expenses of any consultant or advisor
retained to conduct a valuation of the Borrower’s business, for GAAP reporting
or otherwise, (v) the Borrower’s, Lender’s and Administrative Agent’s reasonable
legal fees and expenses incurred in connection with the transactions
contemplated by this Agreement and (vi) the reasonable fees and expenses of the
Consultant retained by the Administrative Agent, provided, however, that the
amounts calculated pursuant to clauses (ii), (iii), (iv), (v) and (vi) above
shall, for the purposes of calculating Restructuring Costs and EBITDA, be capped
at (a) $75,000 for the fiscal month ending on or about November 30, 2011; (b)
$150,000 for the fiscal month ending on or about December 31, 2011; (c) $200,000
for the fiscal month ending on or about January 31, 2012; (d) $200,000 for the
fiscal month ending on or about February 29, 2012; (e) $275,000 for the fiscal
month ending on or about March 31, 2012; (f) $275,000 for the fiscal month
ending on or about April 30, 2012, (g) $225,000 for the fiscal month ending on
or about May 31, 2012, (h) $225,000 for the fiscal month ending on or about June
30, 2012, and (i) $225,000 for the fiscal month ending on or about July 31, 2012
provided, further, that, with respect to any month, any unused cap, as provided
for in clauses (a) through (i) above, for that month will carry over and be
added to the following month’s cap and the resulting revised monthly cap (after
taking into account any such increase caused by the carry over of a prior
month’s unused cap) will be the new monthly cap for the purposes of this
provision.  The Borrower shall, not later than twenty (20) days after the end of
each calendar month, provide the Administrative Agent with a report showing the
amount of (x) the cap used for such month, (y) any unused cap that is carried
over to the following month, and (z) the revised monthly cap for the following
month.  For avoidance of doubt and notwithstanding the terms of the Contribution
Agreement, each of the parties hereto agrees that the $2.0 million prepayment of
the Term Loans required by Section 9(e) of the Forbearance Agreement shall not
be deemed or considered a Restructuring Cost and such payment shall not result
in any increase in EBITDA.

 
2

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A.  Leverage Ratio Covenant Compliance Calculation:
 
[____________, 20___]
[____________, 20___]
 
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Aggregate for past 4 quarters
Current
1. Total Funded Debt
                 
$__________
2. Net Income for past 4 quarters
$________
$________
$_________
$________
$________
$________
$________
$________
$_________
 
3. Non-cash ordinary and extraordinary gains for past 4 quarters
$________
$________
$_________
$________
$________
$________
$________
$________
$_________
 
4. Line A2 minus Line A3
$________
$________
$_________
$________
$________
$________
$________
$________
$_________
                       
5. Interest Expense for past 4 quarters
$________
$________
$_________
$________
$________
$________
$________
$________
$_________
 
6. Income taxes for past 4 quarters
$________
$________
$_________
$________
$________
$________
$________
$________
$_________
 
7. Depreciation and amortization expense for past 4 quarters
$________
$________
$_________
$________
$________
$________
$________
$________
$_________
 
8. Extraordinary charges for past 4 quarters to extent approved by
Administrative Agent
$________
$________
$________
$________
$________
$________
$________
$________
$_________
 
9. Restructuring Costs for past 4 quarters
$________
$________
$________
$________
$________
$________
$________
$________
$________
                        10. Reductions to goodwill and other non-cash
impairments associated with intangible assets and property, plant and equipment
during such period $  ________ $________ $________ $________ $________ $________
$________ $________ $________    11. Amounts paid during such period in respect
of settlement of any lawsuit $________ $________ $________ $________ $________
$________ $________ $________ $________  
10. Sum of Lines A4, A5, A6, A7, A8, A9, A10 and A11 (“EBITDA”)
$________
$________
$_________
$________
$________
$________
$________
$________
$_________
 
11. Ratio of Line A1 to A10
               
___: 1.0
 
12. Line A11 ratio must not exceed
               
___: 1.0
 
13. The Borrower is in compliance (circle yes or no)
               
yes/no
 

 
3

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B.Fixed Charge Coverage Ratio (Section 6.20(b))
 
As of the last day of each fiscal quarter of the Borrower ending on or about the
dates specified below, the Borrower shall maintain on such date a Fixed Charge
Coverage Ratio of greater than:
Fiscal quarter ending on or about:
The ratio of EBITDA to Fixed Charges shall not be greater than:
April 30, 2010
1.00: 1.00
July 31, 2010
1.00: 1.00
October 31, 2010
1.00: 1.00
January 31, 2011
1.00: 1.00
April 30, 2011
1.10:1.00
July 31, 2011
1.10: 1.00
October 31, 2011
1.10: 1.00
January 31, 2012
1.10: 1.00
April 30, 2012 and at all times thereafter
1.20:1.00

 

 
“Fixed Charge Coverage Ratio” means the ratio of (i) EBITDA for the twelve
calendar months then ended minus Capital Expenditures during such period not
financed with Indebtedness (which, for purposes of this covenant, will not
include Revolving Loans) to (ii) Fixed Charges for the same twelve calendar
months then ended; provided that for purposes of this definition, the
calculation of the Fixed Charge Coverage Ratio on or about April 30, 2010, shall
be for the three calendar month period ending on such date; the calculation of
the Fixed Charge Coverage Ratio on or about July 31, 2010, shall be for the six
calendar month period ending on such date; and the calculation of the Fixed
Charge Coverage Ratio on or about October 31, 2010, shall be for the nine
calendar month period ending on such date
     
“EBITDA” definition is set forth in Section A above.
     
“Capital Expenditures” means, with respect to any Person for any period, the
aggregate amount of all expenditures (whether paid in cash or accrued as a
liability) by such Person during that period for the acquisition or leasing
(pursuant to a Capital Lease) of fixed or capital assets or additions to
property, plant, or equipment (including replacements, capitalized repairs, and
improvements) which should be capitalized on the balance sheet of such Person in
accordance with GAAP; provided, that in the event that Syscan Corporation
(“Syscan”) purchases that property commonly known as 3000 West Washington
Street, Charleston, West Virginia, and the improvements located thereon, for a
purchase price equal to $1,500,000 pursuant to the option granted to Syscan in
that certain Assignment of Lease dated as of September 1, 2004 between Williams
Land Corporation and Syscan, as the same may be amended, supplemented or
otherwise modified from time to time, such consideration shall not constitute a
Capital Expenditure hereunder.
     
“Fixed Charges” means, with reference to any period, the sum of (a) all
scheduled payments of principal made or to be made during such period with
respect to Indebtedness (“Principal Payments”) of the Borrower and its
Subsidiaries (for purposes of clarity, Excess Cash Flow payments made pursuant
to Section 2.8(b)(iii) of the Credit Agreement do not constitute Principal
Payments), plus (b) the cash portion of any Interest Expense paid or to be paid
for such period, plus (c) federal, state, and local income taxes paid in cash
during such period (for the avoidance of doubt, cash Tax Refunds received during
any such period shall not be subtracted from such income taxes paid in cash),
plus (d) Restricted Payments made during such period, plus (e) Restructuring
Costs.
     
“Restricted Payments” means the declaration or payment of dividends on or the
making of other distributions in respect of any class or series of the
Borrower’s capital stock or other equity interests, and the direct or indirect
purchase, redemption, or other acquisition or retiring the Borrower’s capital
stock or other equity interests or any warrants, options, or similar instruments
for the purposes of acquiring the same.
     
“Restructuring Costs” definition is set forth in Section A above.

 
4

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B. Fixed Charge Coverage Ratio Covenant Compliance Calculation:
   
[______________, 20___]
[______________, 20___]
   
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Aggregate for past 4 quarters
 
1. EBITDA from Line A10
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
 
2. Non-financed Capital Expenditures for past 4 quarters
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
 
3. Line B1 minus Line B2
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
 
4. Principal Payments for past 4 quarters
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
 
5. Cash Interest Expense for past 4 quarters
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
 
6. Cash income taxes for past 4 quarters
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
 
7. Restricted Payments for past 4 quarters
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
 
8. Restructuring Costs for past 4 quarters
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
 
9. Sum of Lines B4, B5, B6, B7 and B8 (“Fixed Charges”)
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
$_________
 
10. Ratio of Line B3 to B9
               
___: 1.0
 
11. Line B10 ratio must not be less than
               
___: 1.0
 
12. The Borrower is in compliance (circle yes or no)
               
yes/no
 

 
 
 
5

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  C.Intentionally Deleted.     D.Minimum EBITDA (Section 6.20(d))       The
Borrower shall not, as of the last day of each fiscal month of the Borrower
ending on or about the dates specified below, permit the EBITDA for the period
beginning on or about November 1, 2011 and ending on the month then ended to be
less than:

 
Fiscal Month ending on or about:
EBITDA for the  period beginning on or about November 1, 2011 and ending on the
Month then ended shall not be less than:
November 30, 2011
$475,000
December 31, 2011
$925,000
January 31, 2012
$1,575,000
February 29, 2012
$1,990,000
March 31, 2012
$2,830,000
April 30, 2012
$3,750,000

 May 31, 2012   $4,400,000    June 30, 2012  $5,300,000    July 31, 2012
 $5,900,000  

 

     
“EBITDA” definition is set forth in Section A above.

 

 
TO BE COMPLETED MONTHLY AND PROVIDED TO ADMINISTRATIVE AGENT ON OR BEFORE THE
20TH DAY FOLLOWING THE FISCAL MONTH THEN ENDED
D. Minimum EBITDA Covenant Compliance Calculation:
 

 
1.EBITDA from Line A10
$___________
2.Line D1 must be greater than
$___________
3.The Borrower is in compliance (circle yes or no)
yes/no

 
 
6

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E.Maximum Capital Expenditures
 
During any fiscal year of the Borrower, the Borrower shall not, nor shall it
permit any Subsidiary to, expend or become obligated for Capital Expenditures in
an aggregate amount in excess of:
The Borrower’s Fiscal year ending on or about:
Capital Expenditures shall not exceed:
October 31, 2010
$2,000,000.00
October 31, 2011
$2,000,000.00
October 31, 2012
and each October 31 thereafter
$2,500,000.00
“Capital Expenditures” definition is set forth in Section B above.

E.  Maximum Capital Expenditures Covenant Compliance Calculation:
1.Capital Expenditures for past 4 quarters
$___________
2.Line E1 must be less than
$___________
3.The Borrower is in compliance (circle yes or no)
yes/no

 
 
7

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F.Minimum Revolving Loan Availability
 
At all times, the Borrower shall have Excess Availability equal to or greater
than $1,000,000.
“Excess Availability” means, as of any time the same is to be determined, the
amount (if any) by which (a) the lesser of the Borrowing Base as then determined
and computed or the Revolving Credit Commitment as then in effect exceeds
(b) the aggregate principal amount of Revolving Loans, Swing Loans and
L/C Obligations then outstanding.

F.  Minimum Revolving Loan Availability Covenant Compliance Calculation:
1.Excess Availability
$___________
2.Line F1 must be greater than or equal to
$1,000,000
3.The Borrower is in compliance (circle yes or no)
yes/no

 
8

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