EXHIBIT 10.2
 
 
 
[FIFTH THIRD BANK LETTERHEAD]

May 31, 2013

Champion Industries, Inc.
Attn: Mr. Todd Fry
2450 First Avenue
Huntington, West Virginia 25728

Re: Credit Facilities Extended to Champion Industries, Inc. (the “Borrower”)

Ladies and Gentlemen:

Reference is hereby made to that certain First Amended and Restated Credit
Agreement dated as of October 19, 2012 (as amended and otherwise modified from
time to time, including by the Forbearance Agreement (defined below) the “Credit
Agreement”), by and among the Borrower, the Lenders party thereto, and Fifth
Third Bank, an Ohio banking corporation, as the Administrative Agent and as the
L/C Issuer, and the First Limited Forbearance and Waiver Agreement and First
Amendment to Amended and Restated Credit Agreement (the “Forbearance
Agreement”), by and among the Borrower, Mr. Marshall Reynolds, individually (the
“Shareholder”), each of the undersigned Guarantors (the “Guarantors”), the
Lenders party thereto, and Fifth Third Bank, as L/C Issuer and Administrative
Agent. All capitalized terms used herein without definition shall have the same
meanings herein as such terms have in the Credit Agreement.
This letter is the Letter Agreement. By countersigning this Letter Agreement
below, each Lender, the Borrower, each Guarantor and the Shareholder each agree
as follows:
Section 1. Matters pertaining to certain sale transactions. The parties hereto
hereby agree that:
(a) The Designated Transaction No. 2, as such term is defined in Section 1.1 of
the Credit Agreement, shall mean the sale of all or substantially all of the
assets or capital stock of Capitol Business Equipment, Inc. (dba Capitol
Business Interiors) (“CBI”), a West Virginia corporation that is wholly owned by
Stationers, Inc. ("Stationers"), a West Virginia corporation that is wholly
owned by the Borrower. For purposes of Section 6.31(b)(ii) of the Credit
Agreement, the minimum amount of the Net Cash Proceeds to Borrower with respect
to Designated Transaction No. 2 shall be $5,000,000.
(b) The Borrower hereby represents and warrants to each Lender and the
Administrative Agent that approval of Borrower’s shareholders is not required
for Designated Transaction No. 1, whether considered separately or together with
Designated Transaction No. 2; and, specifically, (i) following the consummation
of Designated Transaction No. 1 and Designated Transaction No. 2, Borrower would
be deemed to have retained a significant continuing business activity under the
provisions of Section 31(D)-12-1202(a) of the West Virginia Code because
Borrower will have retained business activity that represented at least 25% of
total assets at the end of Borrower’s fiscal year 2012, and 25% of either income
from continuing operations before taxes or revenues from continuing operations
for such fiscal year, in each case of Borrower and its Subsidiaries on a
consolidated basis, and (ii) Borrower’s governance documents (e.g., charter,
articles of incorporation, by-laws, or other similar document) do not contain
any provision that would require approval of Borrower’s shareholders for
Designated Transaction No. 1, whether considered separately or together with
Designated Transaction No. 2.
(c) For purposes of Section 10(e) of the Forbearance Agreement, the reference
therein to “the board of directors of each of the Borrower and certain of its
Subsidiaries” shall mean the board of directors of each of Borrower, Stationers
and CBI.
Section 2. Matters Pertaining to Certain Expense Items. For purposes of Section
9(f) of the Forbearance Agreement, neither Borrower nor any Guarantor shall make
any payment or other transfer of value on account of expense items of the kind
designated in the Summary of Cost Reductions, dated April 30, 2013, issued to
the Required Lenders, as Other Items and included in the week ended May 3, 2013,
or similar discretionary items.
 
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Section 3. Release; Covenant Not to Sue; Acknowledgement.
(a) The Borrower, each Guarantor and the Shareholder (collectively, the
“Releasing Parties”) each hereby absolutely and unconditionally releases and
forever discharges the Administrative Agent, the L/C Issuer 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,
this Letter Agreement, any other Loan Documents, and the negotiation and
execution of the Credit Agreement and this Letter Agreement, 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.

(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) 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 or any other Loan Documents, and the
negotiation and execution of the Credit Agreement and this Letter Agreement, 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.

Section 4. Reaffirmation of Guarantors.

(a) Each Guarantor heretofore executed and delivered to the Administrative Agent
a Guaranty Agreement dated as of September 14, 2007 (the “Guaranty”). Each of
the Guarantors hereby acknowledges that it has reviewed the terms and provisions
of the Credit Agreement and this Letter Agreement and consents to the terms and
conditions of the Credit Agreement (and all Obligations thereunder), this Letter
Agreement and any related Loan Documents and all obligations thereunder and
hereunder, and to any modification of the Loan Documents effected pursuant to
this Letter Agreement. Each Guarantor hereby confirms to the Lender Parties
that, after giving effect to this Letter 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.
(b) Each Guarantor acknowledges and agrees that (i) notwithstanding the
conditions to effectiveness set forth in the Credit 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 Letter Agreement, (ii) nothing in the Credit Agreement, this
Letter 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 Letter Agreement and maintaining credit
outstanding to the Borrower.
[Signature Pages Follow]

 
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Fifth Third Bank, as Administrative Agent,
 
as a Lender and as L/C Issuer.
     
By: /s/ Donald K. Mitchell
 
Name: Donald K. Mitchell
  Title: Vice President

 
Signature page 1 of 9 to May 31, 2013 Letter Agreement

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THE HUNTINGTON NATIONAL BANK, as a Lender
     
By: /s/ Bruce G. Shearer
 
Name: Bruce G. Shearer
  Title: SVP

 
 
Signature page 2 of 9 to May 31, 2013 Letter Agreement

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SUNTRUST BANK, as a Lender
     
By: /s/ William S. Krueger
 
Name: William S. Krueger
  Title: First Vice President

 
 
Signature page 3 of 9 to May 31, 2013 Letter Agreement

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Old National Bank NA, Successor in Interest to the FDIC as Receiver of Integra
Bank National Association, as a Lender
     
By: /s/ Jason L. Dunn
 
Name: Jason L. Dunn
  Title: Assistant Vice President

 
 
Signature page 4 of 9 to May 31, 2013 Letter Agreement

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UNITED BANK, as a Lender
     
By: /s/ Andrew Dawson
 
Name: Andrew Dawson
  Title: AVP

 
 
Signature page 5 of 9 to May 31, 2013 Letter Agreement

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SUMMIT COMMUNITY BANK, a West Virginia Banking Corporation, as a Lender
     
By: /s/ Brad Ritchie
 
Name: Brad Ritchie
  Title: President

 
 
Signature page 6 of 9 to May 31, 2013 Letter Agreement

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Accepted and Agreed, by Borrower
     
Champion Industries, Inc.
         
By: /s/ Timothy D. Boates
 
Name: Timothy D. Boates
 
Title: CRO

 
Signature page 7 of 9 to May 31, 2013 Letter Agreement

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Accepted and Agreed, by Each Guarantor
     
The Chapman Printing Company, Inc., a West Virginia corporation
 
Stationers, Inc., a West Virginia corporation

 
Bourque Printing, Inc., a Louisiana corporation

  Dallas Printing of MS, 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
   

 
Signature page 8 of 9 to May 31, 2013 Letter Agreement

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Accepted and Agreed, by Marshall T. Reynolds, Individually and as Shareholder
     
Mr. Marshall Reynolds
             
By: /s/ Marshall T. Reynolds
 
Name: M-T-Reynolds

Signature page 9 of 9 to May 31, 2013 Letter Agreement

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