ex101.htm


    EXHIBIT
10.1


       

      


      Champion
Industries, Inc.

      Second
Amendment and Waiver To Credit Agreement

       

      This
Second Amendment and Waiver to Credit Agreement (herein, this “Amendment”) is entered into
as of March 31, 2010, by and among Champion Industries, Inc. (the “Borrower”), Fifth Third
Bank, an Ohio banking corporation, as a Lender, L/C Issuer, and Administrative
Agent for the Lenders (the “Administrative Agent”) and
the other Lenders party hereto. 

       

      Preliminary
Statements

       

      A.The Borrower, the Lenders, and the Administrative Agent are party
to a Credit Agreement, dated as of September 14, 2007 (as heretofore amended and
as the same may further be amended, restated, amended and restated, supplemented
and otherwise modified from time to time, the “Credit
Agreement”).  All capitalized terms used herein without
definition shall have the same meanings herein as such terms have in the Credit
Agreement.

       

      B.The Borrower has informed the Administrative Agent and the
Lenders that it has failed to comply certain sections of the Credit Agreement
prior to the date hereof, as more fully described below.  The Lenders
have agreed to waive the resulting defaults under the terms and conditions set
forth in this Amendment.

       

      C.The Borrower and the Lenders have also agreed to amend certain
sections of the Credit Agreement under the terms and conditions set forth in
this Amendment.

       

           Now,
Therefore, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:  

       

      
        	
                Section
      1.Waivers.

              


      

       

      1.1. The Borrower has advised the Administrative Agent and the
Lenders of the specific violations of the Credit Agreement expressed on
Schedule 2 hereto (such violations are collectively referred to as the
“Violations”).  

       

      1.2.Subject to the satisfaction of the conditions precedent set forth
in Section 3 below, the Lenders and the Administrative Agent hereby acknowledge
the Violations and waive any Default or Event of Default arising solely from the
Violations.  The Borrower acknowledges that the waivers under this
Section 1 are specifically limited to the Violations (and any Default or Event
of Default arising solely from the Violations).  Except as
specifically waived hereby, all of the terms and conditions of the Credit
Agreement shall stand and remain in full force and effect.

       

      
        	
                Section
      2.Amendments.

              


      

       

          
Upon satisfaction of the conditions precedent set forth in Section 3 hereof, the
Credit Agreement shall be and hereby is amended as follows:

       

      
         

        2.1.The definitions of “Applicable Margin”, “Base Rate”, “Borrowing Base”, “EBITDA”, “Excess Availability”, “L/C Sublimit”, “Required Lenders”, “Reuters Screen LIBOR01 Page”
and “Swing Line
Sublimit” set forth in Section 1.1 of the Credit Agreement shall be
amended and restated in their entirety to read as follows:

         

        “Applicable Margin” means a
rate per annum equal to:  (i) with respect to Eurodollar Loans and
Letter of Credit fees under Section 2.13(b) hereof, 5.50%, (ii) with
respect to Base Rate Loans bearing interest at the Floating Rate, 6.00%, (iii)
with respect to Base Rate Loans bearing interest at the Prime Rate, 3.75% and
(iv) with respect to the Commitment Fee, 0.75%.

         

        “Base Rate” means, for any
day, for a Borrowing of Base Rate Loans, (a) the Floating Rate for such date, if
such rate is available, and (b) if the Floating Rate is not available, the Prime
Rate for such date.

         

        “Borrowing
Base”  means, as of any time it is to be determined, the sum
of:

         

        (a)85% (or such lesser percentage as the Administrative Agent may
determine from time to time pursuant to Section 2.2 hereof) of the
remainder of the then outstanding unpaid amount of Eligible Receivables less any
and all returns, rebates, discounts (which may, at the Administrative Agent’s
option, be calculated on the shortest terms), credits, allowances, finance
charges, and/or taxes of any nature at any time issued, owing, available to or
claimed by Account Debtors and/or granted, outstanding or payable in connection
with such Eligible Receivables at such time; plus

         

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

        (b)the lesser of (i) $6,000,000 and (ii) 50% (or such
lesser percentage as the Administrative Agent may determine from time to time
pursuant to Section 2.2 hereof) of the value (computed at the lower of
market or cost using the first-in/first-out method of inventory valuation
applied in accordance with GAAP) of Eligible Inventory; provided that Eligible
Inventory consisting of work-in-process shall account for no more than
$1,500,000 of the value of the Borrowing Base;

         

        provided further that the
Borrowing Base shall be computed only as against and on so much of such
Collateral as is included on the Borrowing Base Certificates furnished from time
to time by the Borrower pursuant to this Agreement and, if required by the
Administrative Agent pursuant to any of the terms hereof or any Collateral
Document, as verified by such other evidence required to be furnished to the
Administrative Agent pursuant hereto or pursuant to any such Collateral
Document.

         

        “EBITDA” means with reference
to any period, Net Income for such period minus (a) non-cash
extraordinary gains for such period, plus (b) the cash
proceeds of any Subordinated Indebtedness issued after the Second Amendment
Effective Date and on or before that date which is two Business Days after the
date the Borrower is required to deliver a compliance certificate pursuant to
Section 6.1(c) hereof with respect to such period, and (c) 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 (but not including any non-cash
Restructuring Charges, as defined below) 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 quarter of the Borrower ending on
or before October 31, 2010, Restructuring Payments incurred during
such period plus any
non-cash, non-recurring charges incurred during such period in connection with
the Restructuring Plan (collectively, including Restructuring Payments, “Restructuring Charges”);
provided, that, these
Restructuring Charges may not exceed the estimated amount expressed for such
specific charges in the Restructuring Plan, except for increases approved by the
Administrative Agent in its sole discretion; provided further, that, the aggregate
amount of Restructuring Charges included under this clause (v) shall not exceed
$2,500,000 in the aggregate, and (vi) to the extent that the aggregate
amount of Restructuring Charges incurred during the Borrower’s fiscal year
ending on or about October 31, 2010, is less than $2,500,000 (the amount by
which such charges is less than $2,500,000, the “Unused Restructuring
Amount”), with respect to any period that includes the Borrower’s fiscal
quarter ending on or about January 31, 2011, Restructuring Charges incurred
during such fiscal quarter in an amount not to exceed the lesser of (I) the
Unused Restructuring Amount and (II) $250,000.  

         

        “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.

         

        “L/C Sublimit” means, as of
the Second Amendment Effective Date, $3,000,000, as reduced pursuant to the
terms hereof.

         

        “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.  

         

        “Reuters Screen LIBOR01 Page”
means the display designated as the “LIBOR01 Page” on the Reuters
Service (or such other page as may replace the LIBOR01 Page on that service or
such other service as may be nominated by the British Bankers’ Association as
the information vendor for the purpose of displaying British Bankers’
Association Interest Settlement Rates for U.S. Dollar deposits (“BBA LIBOR”) or such other
commercially available source providing quotations of BBA LIBOR as designated by
the Administrative Agent from time to time).

         

        “Swing Line Sublimit” means,
as of the Second Amendment Effective Date, $3,000,000, as reduced pursuant to
the terms hereof.

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

        2.2.Clause (h) of the defined term “Eligible Receivables” set
forth in Section 1.1 of the Credit Agreement shall be amended and restated in
its entirety to read as follows:

         

        (h)is not unpaid more than 90 days, except
as otherwise agreed to in writing by the Administrative Agent, after the
original invoice date;

         

        2.3.Clause (a) of the defined term “Interest Period” set forth
in Section 1.1 of the Credit Agreement shall be amended and restated in its
entirety to read as follows:

         

        (a) in
the case of a Eurodollar Loan, 1 or 2 months thereafter, and

         

        2.4.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 $17,000,000 on the Second Amendment
Effective Date.

         

        2.5.The last sentence of the defined term “Term Loan Commitment” set
forth in Section 1.1 of the Credit Agreement shall be amended and restated in
its entirety to read as follows:

         

        The
aggregate principal amount of the Term Loans of the Lenders outstanding on the
Second Amendment Effective Date is $48,407,442.00.

         

        2.6.The defined term “Total Consideration” set
forth in Section 1.1 of the Credit Agreement shall be amended by deleting the
reference to “Base Rate” therein and substituting therefor the term “Prime
Rate”.

         

        2.7.Section 1.1 of the Credit Agreement shall be further amended by
adding the following new defined terms in their appropriate alphabetical
location:

         

        “Contribution Agreement”
means the Contribution Agreement and Cash Collateral Security Agreement dated on
or about the Second Amendment Effective Date, by and among Marshall T. Reynolds,
the Borrower and the Administrative Agent, as amended, restated, supplemented or
modified from time to time.

         

        “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.

         

        “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 Payments made during such period; provided that, for purposes of
determining Fixed Charges, any Restructuring Payments that are lease settlement
payments, termination fees or other lump-sum or similar payments (each, a “Satisfaction Payment”) made
pursuant to the Restructuring Plan in satisfaction of a larger payable amount
owed by the Borrower or a Subsidiary may be divided and allocated on a
straight-line basis over a twelve-month term, upon written confirmation in form
and substance acceptable to the Administrative Agent from the Borrower’s
external auditor of (i) such Satisfaction Payment, (ii) the larger obligation
which it satisfies, and (iii) the term of such larger obligation.

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

        “Floating Rate” means for any day the
rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) fixed by
the British Bankers’ Association at 11:00 a.m. (London, England time) on
such date relating to quotations for the one month London Inter-Bank Offered
Rates on deposits in Dollars as published on Bloomberg LP; provided that, for any day
such rate is not fixed by the British Bankers’ Association, the rate shall be
such rate fixed by the British Bankers’ Association on the immediately prior
Business Day.

         

        “Material Transaction” means
any potential, planned or incurred restructuring of operations, combination or
reorganization of any business divisions, elimination or dissolution of any
business division or Subsidiary, sale of assets not in the ordinary course of
business, sale of any Subsidiary, refinancing of Indebtedness, receipt of cash
equity contributions or other similar transaction.

         

        “Prime Rate” means for any
day the greatest 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 Prime 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), (ii) the sum of (x) the Federal Funds Rate, plus (y) 1/2 of 1% and
(iii) the sum of (x) the Adjusted LIBOR that would be applicable to a Eurodollar
Loan with a 1 month Interest Period advanced on such day (or if such day is not
a Business Day, the immediately preceding Business Day) plus (y) 1.00%.

         

        “Restructuring Payments”
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
Restructuring Plan, including, without limitation, lease, utility, severance,
relocation, legal, accounting and property tax expenses.

         

        “Restructuring Plan” means
that plan prepared by Duff & Phelps, dated January 29, 2010, for
restructuring, integrating and discontinuing of certain operations of the
Borrower and its Subsidiaries to reduce costs and otherwise improve
profitability that was delivered by the Borrower to the Administrative Agent
prior to the Second Amendment Effective Date. 

         

        “Second Amendment Effective
Date” means March 31, 2010.

         

        “Subordinated Indebtedness”
means any Indebtedness of the Borrower and its Subsidiaries that is subordinated
to the Obligations, Hedging Liability, and Funds Transfer and Deposit Account
Liability in a manner acceptable to the Administrative Agent in its sole
discretion, including, without limitation, the Indebtedness evidenced by the
Subordinated Notes.

         

        “Subordinated Notes” means,
collectively, the Subordinated Promissory Note dated as of the Second Amendment
Effective Date made by the Borrower in favor of Marshall T. Reynolds in the
principal amount of up to $2,500,000 and the Promissory Note dated as of
December 29, 2009 made by the Borrower in favor of Marshall T. Reynolds in
the principal amount of $3,000,000.

         

        “Subordination Agreement”
means the Debt Subordination Agreement dated as of December 29, 2009,
by and between Mr. Marshall T. Reynolds and the Administrative Agent, as
amended, modified, supplemented or restated from time to time. 

         

        “Tax Refunds”  means all state and
federal income tax refunds and proceeds thereof, including, without limitation,
interest thereon, in respect of taxes of the Borrower and its
Subsidiaries.

         

        2.8.Section 2.2 of the Credit Agreement shall be amended by adding a
new sentence to the end thereof to read as follows:

         

        The
Administrative Agent and the Borrower agree that, without limiting the
foregoing, on the Second Amendment Effective Date, the reserve against the
amount of Revolving Credit which the Borrower may otherwise request hereunder
shall equal $1,000,000. 

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

        2.9.Clause (ii) of Section 2.3(b) of the Credit Agreement shall be
amended and restated in its entirety to read as follows:

         

        (ii) if
the L/C Issuer is not timely reimbursed for the amount of any drawing under
a Letter of Credit on the date such drawing is paid, the Borrower’s obligation
to reimburse the L/C Issuer for the amount of such drawing shall bear
interest (which the Borrower hereby promises to pay) from and after the date
such drawing is paid at a rate per annum equal to the sum of 3.0% plus the
Applicable Margin plus the Base Rate from time to time in effect (computed (x)
to the extent the Floating Rate is applicable, on the basis of a year of 360
days and actual days elapsed and (y) to the extent the Prime Rate is applicable,
on the basis of a year of 365 or 366 days, as the case may be, and the
actual number of days elapsed).

         

        2.10.Sections 2.4(a) and 2.4(c) of the Credit Agreement shall be
amended and restated in their entirety to read as follows:

         

        (a)Base Rate
Loans.  Each Base Rate Loan made or maintained by a Lender
shall bear interest (computed (x) to the extent the Floating Rate is applicable,
on the basis of a year of 360 days and actual days elapsed and (y) to the extent
the Prime Rate is applicable, on the basis of a year of 365 or 366 days, as
the case may be, and the actual number of days elapsed) on the unpaid principal
amount thereof from the date such Loan is advanced 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)Default
Rate.  While any Event of Default exists 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 Base Rate Loan and any Swing Loan bearing interest at the
Base Rate, the sum of 2.0% per annum plus the Applicable Margin plus the Base
Rate from time to time in effect; and

         

        (ii)for any Eurodollar Loan and any Swing Loan bearing interest at
the Administrative Agent’s Quoted Rate, the sum of 2.0% per annum plus the rate
of interest in effect thereon at the time of such default until the end of the
Interest Period applicable thereto and, thereafter, at a rate per annum equal to
the sum of 2.0% plus the Applicable Margin for Base Rate Loans plus the Base
Rate from time to time in effect;

         

        provided, however, that in
the absence of acceleration, any increase in interest rates pursuant to this
Section shall be made at the election of the Administrative Agent, acting at the
request or with the consent of the Required Lenders, with written notice to the
Borrower.  While any Event of Default exists or after acceleration,
accrued interest shall be paid on demand of the Administrative Agent at the
request or with the consent of the Required Lenders.

         

        2.11.Clause (i) of Section 2.5(e) of the Credit Agreement is amended
and restated in its entirety to read as follows:

         

        (i) from
the date the related advance was made by the Administrative Agent to the date
two (2) Business Days after payment by such Lender is due hereunder, the
greater of, for each such day, (x) the Federal Funds Rate and (y) an overnight
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation, plus any standard
administrative or processing fees charged by the Administrative Agent in
connection with such Lender’s non-payment and

         

        2.12.Section 2.8(b) of the Credit Agreement is amended by inserting a
new subclause (vii) at the end thereof to read as follows:

         

        (vii) If
on or after the Second Amendment Effective Date the Borrower receives any Tax
Refunds, the Borrower shall prepay the Obligations by an amount equal to the
amount of such proceeds, and, if the Administrative Agent receives any Tax
Refunds, the Administrative Agent shall apply such Tax Refunds to effect such
prepayment.  The amount of each such prepayment shall be applied first
to the outstanding Term Loans until paid in full and then to the Revolving
Loans until paid in full and then to the Swing Loans.  

         

        2.13.The last sentence of Section 2.10 of the Credit Agreement shall
be amended and restated in its entirety to read as follows:

         

        Any
termination of the Commitments pursuant to this Section 2.10 may not be
reinstated without the written consent of each of the Lenders. 

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

        2.14.Clause (i) of Section 2.11(b) of the Credit Agreement shall be
amended and restated in their entirety to read as follows:

         

        (i) the
sum of the Base Rate plus the Applicable Margin for Base Rate Loans under the
Revolving Credit as from time to time in effect (computed (x) to the extent the
Floating Rate is applicable, on the basis of a year of 360 days and actual days
elapsed and (y) to the extent the Prime Rate is applicable, on the basis of a
year of 365 or 366 days, as the case may be, and the actual number of days
elapsed) or

         

        2.15.The first sentence of Section 2.13(b) of the Credit Agreement is
amended and restated in its entirety to read as follows:

         

        (b)Letter of Credit
Fees.  On the date of issuance or extension, or increase in the
amount, of any Letter of Credit pursuant to Section 2.3 hereof, the
Borrower shall pay to the L/C Issuer for its own account a fronting fee
equal to .250% of the face amount of (or of the increase in the face amount of)
such Letter of Credit.  Quarterly in arrears, on the last day of each
March, June, September, and December, commencing on the first such date
occurring after the date hereof, the Borrower shall pay to the Administrative
Agent, for the ratable benefit of the Lenders according to their Revolver
Percentages, a letter of credit fee at a rate per annum equal to the Applicable
Margin (computed on the basis of a year of 360 days and the actual number
of days elapsed) in effect during each day of such quarter applied to the daily
average face amount of Letters of Credit outstanding during such quarter; provided that, while any
Event of Default exists or after acceleration, such rate shall increase by 2%
over the rate otherwise payable and such fee shall be paid on demand of the
Administrative Agent at the request or with the consent of the Required Lenders;
provided, however, that in the absence
of acceleration, any rate increase pursuant to the foregoing proviso shall be
made at the direction of the Administrative Agent, acting at the request or with
the consent of the Required Lenders.  

         

        2.16.Clause (ii) of Section 4.1 of the Credit Agreement is amended and
restated in its entirety to read as follows:

         

        (ii)until a Default or Event of Default has
occurred and is continuing and thereafter until otherwise required by the
Administrative Agent or the Required Lenders, Liens on local petty cash deposit
accounts maintained by the Borrower and its Subsidiaries in proximity to their
operations need not be perfected provided the total amount on
deposit at any one time not so perfected shall not exceed $100,000 in the
aggregate and Liens on payroll accounts maintained by the Borrower and its
Subsidiaries need not be perfected provided the total amount on deposit at any
time does not exceed the current amount of their payroll obligation,
and

         

        2.17.Sections 6.1(a) of the Credit Agreement is amended and restated
in its entirety to read as follows:

         

        (a)Monthly and Quarterly
Reports.  (i) Within 20 days after the end of each fiscal month
of the Borrower, commencing with the first fiscal month of the Borrower ending
after the Second Amendment Effective Date:

         

        (A)the Borrower’s consolidated and consolidating balance sheet as at
the end of such fiscal month and the related consolidated and consolidating
statements of income and retained earnings and of cash flows for such fiscal
month and for the elapsed portion of the fiscal year-to-date period then ended,
each in reasonable detail, prepared by the Borrower in accordance with GAAP,
setting forth comparative figures for the corresponding fiscal month in the
prior fiscal year and comparable budgeted figures for such fiscal month, all of
which shall be certified by the chief financial officer or other officer of the
Borrower acceptable to the Administrative Agent that they fairly present in all
material respects in accordance with GAAP the financial condition of the
Borrower and its Subsidiaries as of the dates indicated and the results of their
operations and changes in their cash flows for the periods indicated, subject to
normal year-end audit adjustments and the absence of footnotes;

         

        (B)a Borrowing Base Certificate showing the computation of the
Borrowing Base in reasonable detail as of the close of business on the last day
of the immediately preceding month, together with such other information as
therein required, prepared by the Borrower and certified to by its chief
financial officer or another officer of the Borrower acceptable to the
Administrative Agent and an accounts receivable aging, an accounts payable
aging, a cash reconciliation, and an inventory stock status report, each in
reasonable detail prepared by the Borrower and certified to by its chief
financial officer or another officer of the Borrower acceptable to the
Administrative Agent; 

         

        (C)through July 31, 2011, and at any time thereafter as requested by
the Administrative Agent, a certificate of the chief financial officer or other
officer of the Borrower acceptable to the Administrative Agent confirming EBITDA
for the month then-ended, EBITDA for the twelve months then ending, EBITDA for
the Borrower’s fiscal year to the date of such month end and the corresponding
EBITDAs for the month, twelve months and year-to-date ending on or about the
same date in the Borrower’s immediately prior fiscal year; 

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

        (D)a report prepared by the Borrower and certified by its chief
financial officer or other officer acceptable to the Administrative Agent
certifying the deposit account balances of the Borrower and its Subsidiaries for
the month then-ended in form acceptable to the Administrative Agent in its sole
discretion; provided
that, the Borrower will in no event report any information regarding closed
deposit accounts except to the extent requested by the Administrative Agent or a
Lender; and

         

        (E)a report prepared by the Borrower and certified by its chief
financial officer or other officer acceptable to the Administrative Agent
certifying the headcount reductions of the Borrower and its Subsidiaries for the
month then ended by division, compared against headcounts for the same divisions
for comparable periods of the prior year, in a form acceptable to the
Administrative Agent in its sole discretion and in the same detail as previously
provided to the Administrative Agent in reports prepared by Duff & Phelps
with respect to headcount reductions of the Borrower and its Subsidiaries;
and

         

        (ii)within 45 days after the end of each
fiscal quarter of the Borrower, commencing with the Borrower’s fiscal quarter
ending on or about April 30, 2010, a report, in form and substance
acceptable to the Administrative Agent, from Arnett & Foster, P.L.L.C., or a
different firm of independent public accountants of recognized national standing
selected by the Borrower and acceptable to the Administrative Agent confirming
(x) Restructuring Payments during such quarter and (y) expense reductions
made by the Borrower and its Subsidiaries during such quarter, the amount of
such expense reductions (including without limitation, reductions in cost of
goods sold and selling, general and administrative expenses made pursuant to the
Restructuring Plan) and the timing of such reductions, together with
corresponding figures for such expenses expressed by quarter for the Borrower’s
prior fiscal year, each in form reasonably
acceptable to the Administrative Agent, including, without limiting the
foregoing, details with respect to the allocation of such expenses to divisions
of the Borrower and its Subsidiaries and with no less detail than that
previously provided to the Administrative Agent in the reports prepared by Duff
& Phelps with respect to the Borrower’s expense reductions.

         

        2.18.Section 6.1(e) of the Credit Agreement is amended and restated in
its entirety to read as follows: 

         

        (e)Notice of Default, Litigation and
Restructuring Plan Discrepancy.  Promptly, and in any event
within two Business Days after any officer of the Borrower obtains knowledge
thereof, notice of (i) the occurrence of any event which constitutes a
Default or an Event of Default or any other event which could reasonably be
expected to have a Material Adverse Effect, which notice shall specify the
nature thereof, the period of existence thereof and what action the Borrower
proposes to take with respect thereto, (ii) the commencement of, or threat
of, or any significant development in, any litigation, labor controversy,
arbitration or governmental proceeding pending against the Borrower or any of
its Subsidiaries which, if adversely determined, could reasonably be expected to
have a Material Adverse Effect, and (iii) the occurrence of any material
discrepancy between the Restructuring Plan and actual performance by the
Borrower and its Subsidiaries.

         

        2.19.Section 6.1 of the Credit Agreement shall be further amended by
inserting a new clause (j) at the end thereof to read as follows:

         

        (j)Restructuring
Information.  Promptly after the Borrower’s receipt thereof,
and in any event within 2 Business Days after receipt thereof, copies of any and
all information regarding any Material Transaction involving the Borrower or any
Subsidiary (including, without limitation, any proposal, letter of intent, term
sheet or similar writing), together with a detailed written summary in form
reasonably acceptable to the Administrative Agent prepared by the Borrower’s
chief executive officer, chief financial officer and/or such other officers of
the Borrower acceptable to the Administrative Agent summarizing the material
terms of any Material Transaction and any material discussions regarding such
Material Transaction.

         

        2.20.Section 6.11 of the Credit Agreement shall be amended by deleting
the “.” at the end of clause (e), substituting therefore the phrase “; and” and
adding a new clause (f) to the end thereof to read as follows:

         

        (f)Subordinated Indebtedness owed to Marshall T. Reynolds in a
principal amount not to exceed $5,500,000, as reduced by permitted payments
thereon.

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

        2.21.Section 6.15 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:

         

        Section 6.15. Dividends and Certain Other
Restricted Payments.  The Borrower shall not, nor shall it
permit any of its Subsidiaries to, (i) declare or pay any dividends on or
make any other distributions in respect of any class or series of its capital
stock or other equity interests, (ii) directly or indirectly purchase,
redeem, or otherwise acquire or retire any of its capital stock or other equity
interests or any warrants, options, or similar instruments to acquire the same
(collectively, referred to herein as “Restricted Payments”); provided, however, that the
foregoing shall not operate to prevent (x) the making of dividends or
distributions by any Wholly-owned Subsidiary of the Borrower to its parent
corporation and (y) dividends or other distributions by the Borrower on or
after January 31, 2011 in respect of any class or series of its equity interests
(each, a “Stockholder
Distribution”), so long as, with respect to each Stockholder
Distribution, (A) the Borrower shall have delivered to the Administrative
Agent  compliance certificates required by Section 6.1(c) hereof
evidencing that the Borrower has achieved (i) a Fixed Charge Coverage Ratio of
at least 1.20 to 1.00 and (ii) a Leverage Ratio of no greater than 4.00 to 1.00,
each as of the last day of the two consecutive fiscal quarters of the Borrower
immediately preceding such Stockholder Distribution, (B) no Default or Event of
Default shall exist, or shall exist after giving effect to the proposed
Stockholder Distribution, including with respect to the covenants contained in
Section 6.20 on a pro forma
basis, and the Borrower shall have delivered to the Administrative Agent
prior to the proposed Stockholder Distribution a compliance certificate in the
form of Exhibit E attached hereto evidencing such pro forma compliance with
Section 6.20, and (C) the Borrower shall have Excess Availability greater than
$2,000,000.00 immediately after giving effect to such Stockholder
Distribution.

         

        2.22.Section 6.20 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:

         

        Section 6.20. Financial
Covenants.  (a) Leverage
Ratio.  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

                


        

         

        (b)Fixed Charge Coverage
Ratio.  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

                


        

         

        (c)Intentionally
Deleted.

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

        (d)Minimum
EBITDA.  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 EBITDA for the twelve calendar months then ended to be less
than:

        
          	
                  Fiscal
      quarter ending on or about:

                	 	
                  EBITDA
      shall not be less than:

                
	
                  April
      30, 2010

                	 	
                  $2,700,000

                
	
                  July
      31, 2010

                	 	
                  $5,400,000

                
	
                  October
      31, 2010

                	 	
                  $8,900,000

                
	
                  January
      31, 2011

                	 	
                  $11,800,000

                
	
                  April
      30, 2011

                	 	
                  $11,850,000

                
	
                  July
      31, 2011

                	 	
                  $11,900,000

                
	
                  October
      31, 2011

                	 	
                  $12,000,000

                
	
                  January
      31, 2012

                	 	
                  $12,500,000

                
	
                  April
      30, 2012

                	 	
                  $13,100,000

                
	
                  July
      31, 2012

                	 	
                  $13,600,000

                
	
                  October
      31, 2012 

                	 	
                  $14,300,000

                


        

         

        ; provided that,
notwithstanding anything in this Section to the contrary, the calculation of the
EBITDA on or about April 30, 2010, shall be for the three calendar
month period ending on such date; the calculation of the EBITDA on or about
July 31, 2010, shall be for the six calendar month period ending on
such date; and the calculation of the EBITDA on or about
October 31, 2010, shall be for the nine calendar month period ending
on such date.

         

        (e)Maximum Capital
Expenditures.  

         

        (i)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

                


        

         

        (f)Minimum Revolving Loan
Availability.  At all times, the Borrower shall have Excess
Availability equal to or greater than $1,000,000.

         

        2.23.Section 6.22 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:

         

        Section 6.22.  Integrated
Cash Management System and Deposit Accounts.  The Borrower
shall maintain an integrated cash management system with the Administrative
Agent, including a concentration account maintained with the Administrative
Agent with a balance of at least $750,000 at all times; provided that, if the cash
balance in the concentration account is at any time less than $750,000, the
Borrower shall cause such balance to be in compliance with this Section 6.22
within five (5) Business Days of the Administrative Agent sending notice to the
Borrower regarding such deficiency.  The Borrower will also, and will
cause each of its Subsidiaries to, maintain all its deposit and operating
accounts with the Administrative Agent; provided that,
notwithstanding the foregoing, the Borrower may maintain those deposit accounts
with United Bank, Regions Bank and First Tennessee Bank expressly listed on
Schedule E to the Security Agreement, as delivered pursuant to Section 3.8
hereof and such other deposit accounts consented to in writing by the
Administrative Agent.

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

        2.24.Section 6 of the Credit Agreement shall be further amended by
adding the following new sections to the end thereof to read as
follows:

         

        Section
6.26.  Chief
Executive Officer Meetings.  Through and including the month of
December 2010, the Borrower’s Chief Executive Officer shall conduct at least one
meeting per calendar month for the purpose of (a) informing the Lenders of the
Borrower’s efforts to reduce the Leverage Ratio, (b) discussing the Borrower’s
recent and projected performance and (c) discussing such other matters as any
Lender may reasonably request; provided that the Borrower
shall deliver to the Administrative Agent and the Lenders at least one week
advance written notice of the time and location of, and call-in information for,
any such meeting and such meetings shall at all times be held on Business Days
and during regular business hours.

         

        Section
6.27.  Strategic Discussions and
Reporting.  The Borrower shall at all times (a) use its best
efforts to engage in strategic discussions with third parties to mitigate risk
to the Lenders and (b) cause Duff & Phelps to provide monthly
reports  to the Administrative Agent and the Lenders summarizing the
Borrower’s progress with respect to any and all Material Transactions involving
the Borrower or any Subsidiary, each such summary report to be in a form
acceptable to the Administrative Agent and the Borrower.

         

        Section
6.28.  Reynolds Financial
Statements.  No later than May 31, 2010, the Borrower
shall have delivered to the Administrative Agent copies of Marshall T. Reynolds’
duly-executed and dated personal financial statements for the 2009 calendar
year, certified as true and correct by Marshall T. Reynolds, in a form
acceptable to the Administrative Agent.

         

        Section 6.29. Tax Returns.  Prior
to or simultaneously with submission thereof to any federal or state tax
authority, the Borrower shall deliver to the Administrative Agent copies of the
Borrower’s federal and state income tax returns.

         

        Section 6.30. Subordinated
Indebtedness.  Except to the extent permitted by the
Subordinated Notes, the Contribution Agreement and the Subordination
Agreement, the
Borrower shall not (a) amend or modify any of the terms or conditions
relating to Subordinated Indebtedness, (b) make any voluntary prepayment of
Subordinated Indebtedness or effect any voluntary redemption thereof, or
(c) make any other payment or redemption on account of Subordinated
Indebtedness that is prohibited under the terms the Subordinated Notes, the
Subordination Agreement or of any other instrument or agreement subordinating
the same to the Obligations, Hedging Liability and Funds Transfer and Deposit
Account Liability.  Notwithstanding the foregoing, the Borrower may
agree to a decrease in the interest rate applicable thereto or to a deferral of
repayment of any of the principal of or interest on the Subordinated
Indebtedness beyond the current due dates therefor.

         

        2.25.Section 7.1 of the Credit Agreement shall be amended by deleting
the “.” at the end of clause (k), substituting therefore the phrase “; or” and
adding a new clause (l) to the end thereof to read as follows:

         

        (l)any default or event of default shall occur and be continuing
under the Contribution Agreement or the Subordination Agreement.

         

        2.26.Schedule 1 of the Credit Agreement shall be amended and restated
in its entirety in the form of Schedule 1 attached hereto.

         

        2.27.Schedule 5.10 of the Credit Agreement shall be amended and
restated in its entirety in the form of Schedule 5.10 attached
hereto.

         

        2.27.Schedule 1 to Exhibit E to the Credit Agreement shall be amended
and restated in its entirety in the form of the Schedule 1 to Compliance
Certificate attached hereto.

         

        2.28.Schedule 1 to Exhibit G to the Credit Agreement shall be amended
and restated in its entirety in the form of Schedule 1 to Borrowing Base
Certificate attached hereto.

         

        2.29.Notwithstanding anything to the contrary in the Credit Agreement,
any and all references to the terms “Fixed Charges A” and “Fixed Charges B” shall be
deleted in their entirety.

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        


        
          	
                  Section
      3.Condition Precedent. 

                


        

         

        The
effectiveness of this Amendment is subject to the satisfaction of all of the
following conditions precedent:

         

        3.1.The Borrower, the Lenders party hereto and the Administrative
Agent shall have executed and delivered this Amendment and the Guarantors shall
have executed and delivered the attached Reaffirmation and Consent.

         

        3.2.The Administrative Agent shall have received the Contribution
Agreement duly executed by Marshall T. Reynolds, the Borrower and the
Administrative Agent, in a form acceptable to the Administrative Agent, and all
conditions precedent set forth therein shall have been satisfied.

         

        3.3.The Administrative Agent shall have received certified copies of
the resolutions of the board of directors (or similar governing body) of the
Borrower and each of the Guarantors approving and authorizing such Person’s
execution, delivery and performance of this Amendment and the Reaffirmation and
Consent, respectively, to which it is party. 

         

        3.4.After giving effect to this Amendment, including without
limitation payment of all fees and expenses associated herewith, the Excess
Availability shall not be less than $5,000,000.

         

        3.5.The Borrower’s accounts payable shall be acceptable to the
Administrative Agent, in its sole discretion, and, without limiting the
foregoing, shall contain no right of offset, high discounts or other unusual
arrangements. 

         

        3.6.The Administrative Agent shall have received, on behalf of each
Lender, the favorable written opinion of counsel to the Borrowers and the
Guarantors, in form and substance satisfactory to the Administrative
Agent.

         

        3.7.The Administrative Agent shall have received IRS Form 2848,
Department of Treasury Forms 234 and 235 and corresponding West Virginia
Department of Revenue forms, each completed in a manner requested by the
Administrative Agent and duly executed by the Borrower, pursuant to which the
Borrower shall agree and request that the Tax Refunds be paid directly to the
Administrative Agent.

         

        3.8.The Administrative Agent shall have received certified amended
and restated schedules to the Security Agreement, in form and substance
acceptable to the Administrative Agent.

         

        3.9.The Borrower shall have delivered to the Administrative Agent a
duly-executed Correction of Deed of Trust and Security Agreement with Assignment
of Rents dated as of the Second Amendment Effective Date and a date-down
endorsement issued by the First American Title Insurance Company to Title
Insurance Policy Number FA-31-1018943, each in form and substance acceptable to
the Administrative Agent,.

         

        3.10.Each of the representations and warranties expressed in the
Purchase Agreement shall be true and correct in all material respects on and as
of the Second Amendment Effective Date (except to the extent such
representations and warranties relate to an earlier date, in which case they are
true and correct as of such date).

         

        3.11.The Borrower shall have paid all fees and expenses associated
with this Amendment including, without limitation, an upfront fee in an amount
equal to $250,000.00 for the ratable use and benefit of the Lenders, including
the Administrative Agent, according to their Percentages, which upfront fee
shall be fully-earned when due.

         

        3.12.The Borrower shall have closed, and shall have caused each
Subsidiary to close, each deposit account maintained with institutions other
than the Administrative Agent that are not subject to a deposit account control
agreement in favor of the Administrative Agent that is acceptable to the
Administrative Agent in its sole discretion; provided that,
notwithstanding the foregoing, the Borrower shall not be required to close
deposit accounts maintained with institutions other than the Administrative
Agent to the extent that the aggregate amount held in such accounts does not at
any time exceed $100,000.00.

         

        3.13.The Administrative Agent shall have received such other
agreements, documents, certificates, and opinions as the Administrative Agent
may reasonably request.

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

        3.14.Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Bank and its counsel.

         

        
          	
                  Section
      4.Representations and Warranties.

                


        

         

        The
Borrower represents and warrants to the Required Lenders that (i) each of
the representations and warranties set forth in Section 5 of the Credit
Agreement is true and correct in all material respects on and as of the Second
Amendment Effective Date (except to the extent such representations and
warranties relate to an earlier date, in which case they are true and correct as
of such date) and as if each reference therein to the Credit Agreement referred
to the Credit Agreement as amended hereby; (ii) except for any Default or Event
of Default arising solely from the Violations expressly waived herein, no
Default and no Event of Default exists or will exist after giving effect hereto,
including, without limitation, due to any violation of Section 4 of the
Credit Agreement; and (iii) without limiting the effect of the foregoing,
the Borrower’s execution, delivery and performance of this Amendment has been
duly authorized, and this Amendment has been executed and delivered by duly
authorized officers of the Borrower.

         

        
          	
                  Section
      5.Collateral.

                


        

         

        The
Borrower has heretofore executed and delivered to the Administrative Agent the
Collateral Documents and the Borrower hereby agrees that notwithstanding the
execution and delivery of this Amendment, the Collateral Documents shall remain
in full force and effect and shall secure the Obligations, Hedging Liability and
Funds Transfer and Deposit Account Liability; and the rights and remedies of the
Lenders under the Collateral Documents, obligations of the Borrower thereunder,
and any liens or security interests created or provided for thereunder shall be
and remain in full force and effect and shall not be affected, impaired or
discharged hereby.  Nothing herein contained shall in any manner
affect or impair the priority of the liens and security interests created and
provided for by the Collateral Documents as to the indebtedness which would be
secured thereby prior to giving effect to this Amendment.

         

        
          	
                  Section
      6.Miscellaneous.

                


        

         

        6.1Except as specifically amended hereby or waived herein, the
Credit Agreement shall continue in full force and effect in accordance with its
original terms.  Reference to this specific Amendment need not be made
in the Credit Agreement or any other Loan Document, or in any certificate,
letter or communication issued or made pursuant to or with respect to any Loan
Document, any reference in any of such items to the Credit Agreement being
sufficient to refer to the Credit Agreement as amended
hereby.  

         

        6.2.This Amendment may be executed in any number of counterparts and
by different parties hereto on separate counterpart signature pages, each of
which when so executed shall be an original but all of which shall constitute
one and the same instrument.  This Amendment shall be governed by the
internal laws of the State of Ohio.

      

       

      


      
        
          
             


          

          
            12

            
              

            

          

          
             


          

        

      

      


      


       

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

       

      
        	 "Borrower"	 
	 	 	 
	 Champion
      Industries, Inc	 
	 	 	 
	 By  	  /s/ Todd R. Fry	 
	 Name
       	 Todd R.
      Fry 	 
	 Title  
      	 Senior Vice
      President and Chief Financial Officer 	 
	 	 	 


      

       

      
        
          
            
              [Signature
Page to Second Amendment and Waiver to Credit Agreement]

              


            

             


          

          
             


            
              

            

          

          
             


          

        

      

      


      
        
          	"Required
      Lenders"	 
	 	 	 
	 Fifth
      Third Bank, an
      Ohio banking corporation, as a Lender, as L/C Issuer, and as
      Administrative Agent	 
	 	 	 
	 	 	 
	 By  
      	 	 
	 Name  
      	 	 
	 Title
        	 	 


        

      

      


      


      
        
          
            
              [Signature
Page to Second Amendment and Waiver to Credit Agreement]

              


            

             


          

          
             


            
              

            

          

          
             


          

        

      

      
        
          	
                  United
      Bank, Inc.

                	 
	 	 	 
	 	 	 
	 By 	 	 
	 Name
       	 	 
	 Title  	 	 


        

         

      

       

      


      
        
          
            
              [Signature
Page to Second Amendment and Waiver to Credit Agreement]

              


            

             


          

          
             


            
              

            

          

          
             


          

        

      

      
        
          	
                  The
      Huntington National Bank

                	 
	 	 	 
	 	 	 
	 By 	 	 
	 Name
       	 	 
	 Title  	 	 


        

         

        
        

         

         

      

      
        
          
            
              [Signature
Page to Second Amendment and Waiver to Credit Agreement]

              


            

             


          

          
             


            
              

            

          

          
             


          

        

      

      
        
          	
                  Summit
      Community Bank

                	 
	 	 	 
	 	 	 
	 By 	 	 
	 Name
       	 	 
	 Title  	 	 


        

         



      


      
        
          
            
              [Signature
Page to Second Amendment and Waiver to Credit Agreement]

              


            

             


          

          
             


            
              

            

          

          
             


          

        

      

      
        
          	
                  SunTrust
      Bank

                	 
	 	 	 
	 	 	 
	 By 	 	 
	 Name
       	 	 
	 Title  	 	 


        

         

      

      
 

      
        
          
            
              [Signature
Page to Second Amendment and Waiver to Credit Agreement]

              


            

             


          

          
             


            
              

            

          

          
             


          

        

      

      
        
          	
                  Integra
      Bank N.A.

                	 
	 	 	 
	 	 	 
	 By 	 	 
	 Name
       	 	 
	 Title  	 	 


        

         

      

       

      


      
        
          
            
              [Signature
Page to Second Amendment and Waiver to Credit Agreement]

              


            

             


          

          
             


            
              

            

          

          
             


          

        

      

      


      Schedule 1

       

      Commitments

       

      
        	
                Name
      of Lender

              	 	
                Term
      Loan Commitment

              	 	
                Revolving
      Credit Commitment

              
	
                Fifth
      Third Bank

              	 	
                $18,878,902.38

              	 	
                $6,630,000.00

              
	
                United
      Bank Inc.

              	 	
                $7,261,116.30

              	 	
                $2,550,000.00

              
	
                Huntington
      Bank

              	 	
                $7,261,116.30

              	 	
                $2,550,000.00

              
	
                Summit
      Bank

              	 	
                $4,356,669.78

              	 	
                $1,530,000.00

              
	
                SunTrust
      Bank

              	 	
                $8,229,265.14

              	 	
                $2,890,000.00

              
	
                Integra
      Bank

              	 	
                $2,420,372.10

              	 	
                $850,000.00

              
	
                Total

              	 	
                $48,407,442.00

              	 	
                $17,000,000.00

              


      

      


      


      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

      


      Schedule 2

       

      Credit
Agreement Violations

       

       

      
        	
                Section
      5.01.Organization and
      Qualification

              


      

       

      Dallas
Printing Company, Inc. has been administratively dissolved. The Borrower has
undertaken the process to reinstate the corporation in Mississippi under the
name of Dallas Printing of MS, Inc.  The Borrower does not operate
utilizing the name of Dallas Printing or any related names and the existence of
this entity or a related named entity is not material to the
Company.

       

      
        	
                Section
      6.20.Financial
      Covenants

              


      

       

      The
Borrower has violated the following financial covenants expressed in
Section 6.20 of the Credit Agreement as of the last day of each of its
fiscal quarters throughout its fiscal year 2009 and on January 31,
2010:

       

      6.20(a)Leverage
Ratio.  The Borrower is in violation of this
covenant.

       

      6.20(b)First Fixed
Charge Coverage Ratio.  The Borrower is in violation of this
covenant.

       

      6.20(c)Second Fixed
Charge Coverage Ratio.  The Borrower is in violation of this
covenant.

       

      6.20(d)Minimum
EBITDA.  The Borrower is in violation of this
covenant.

       

      


      


      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

      


      Schedule 5.10

      


      Subsidiaries

      


      
        	
                Name

              	
                Jurisdiction
      of Organization

              	
                Percentage
      Ownership

              	
                Owner

              
	
                The
      Chapman Printing Company, Inc.

              	
                West
      Virginia (qualified in Kentucky)

              	
                100%

              	
                Champion
      Industries, Inc.

              
	 
      	 
      	 
      	 
      
	
                Stationers,
      Inc.

              	
                West
      Virginia

              	
                100%

              	
                Champion
      Industries, Inc.

              
	 
      	 
      	 
      	 
      
	
                Bourque
      Printing, Inc.

              	
                Louisiana

              	
                100%

              	
                Champion
      Industries, Inc.

              
	 
      	 
      	 
      	 
      
	
                Dallas
      Printing of MS, Inc. (f/k/a Dallas Printing Company, Inc.)

              	
                Mississippi

              	
                100%

              	
                Champion
      Industries, Inc.

              
	 
      	 
      	 
      	 
      
	
                Carolina
      Cut Sheets, Inc.

              	
                West
      Virginia

              	
                100%

              	
                Champion
      Industries, Inc.

              
	 
      	 
      	 
      	 
      
	
                Donihe
      Graphics, Inc.

              	
                Tennessee

              	
                100%

              	
                Champion
      Industries, Inc.

              
	 
      	 
      	 
      	 
      
	
                Smith
      & Butterfield Co., Inc.

              	
                Indiana

              	
                100%

              	
                Champion
      Industries, Inc.

              
	 
      	 
      	 
      	 
      
	
                The
      Merten Company

              	
                Ohio

              	
                100%

              	
                Champion
      Industries, Inc.

              
	 
      	 
      	 
      	 
      
	
                Interform
      Corporation

              	
                Pennsylvania

              	
                100%

              	
                Champion
      Industries, Inc.

              
	 
      	 
      	 
      	 
      
	
                CHMP
      Leasing, Inc.

              	
                West
      Virginia

              	
                100%

              	
                Champion
      Industries, Inc.

              
	 
      	 
      	 
      	 
      
	
                Blue
      Ridge Printing Co., Inc.

              	
                North
      Carolina

              	
                100%

              	
                Champion
      Industries, Inc.

              
	 
      	 
      	 
      	 
      
	
                Capitol
      Business Equipment, Inc.

              	
                West
      Virginia

              	
                100%

              	
                Stationers,
      Inc.

              
	 
      	 
      	 
      	 
      
	
                Thompson’s
      of Morgantown, Inc.

              	
                West
      Virginia

              	
                100%

              	
                Stationers,
      Inc.

              
	 
      	 
      	 
      	 
      
	
                Independent
      Printing Service, Inc.

              	
                Indiana

              	
                100%

              	
                Smith
      & Butterfield Co., Inc.

              
	 
      	 
      	 
      	 
      
	
                Diez
      Business Machines, Inc.

              	
                Louisiana

              	
                100%

              	
                Stationers,
      Inc.

              
	 
      	 
      	 
      	 
      
	
                Transdata
      Systems, Inc.

              	
                Louisiana

              	
                100%

              	
                Bourque
      Printing, Inc.

              
	 
      	 
      	 
      	 
      
	
                Syscan
      Corporation

              	
                West
      Virginia

              	
                100%

              	
                Champion
      Industries, Inc.

              
	 
      	 
      	 
      	 
      
	
                Champion
      Publishing, Inc.

              	
                West
      Virginia

              	
                100%

              	
                Champion
      Industries, Inc.

              


      

      


      


      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

      


      Schedule I

      to
Compliance Certificate

       

      Champion
Industries, Inc.

       

      Compliance
Calculations

      for
Credit Agreement dated as of September 14, 2007

       

      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

              
	
                “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
      extraordinary gains for such period, plus (b) the cash
      proceeds of any Subordinated Indebtedness issued after the Second
      Amendment Effective Date and on or before that date which is two Business
      Days after the date the Borrower is required to deliver a compliance
      certificate pursuant to Section 6.1(c) hereof with respect to such
      period, and (c) 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 (but not including any non-cash Restructuring Charges, as defined
      below) 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 quarter of the Borrower ending on or
      before October 31, 2010, Restructuring Payments incurred during
      such period plus
      any non-cash, non-recurring charges incurred during such period in
      connection with the Restructuring Plan (collectively, including
      Restructuring Payments, “Restructuring
      Charges”); provided, that, these
      Restructuring Charges may not exceed the estimated amount expressed for
      such specific charges in the Restructuring Plan, except for increases
      approved by the Administrative Agent in its sole discretion; provided further, that, the
      aggregate amount of Restructuring Charges included under this clause (v)
      shall not exceed $2,500,000 in the aggregate, and (vi) to the extent
      that the aggregate amount of Restructuring Charges incurred during the
      Borrower’s fiscal year ending on or about October 31, 2010, is less than
      $2,500,000 (the amount by which such charges is less than $2,500,000, the
      “Unused Restructuring
      Amount”), with respect to any period that includes the Borrower’s
      fiscal quarter ending on or about January 31, 2011, Restructuring Charges
      incurred during such fiscal quarter in an amount not to exceed the lesser
      of (I) the Unused Restructuring Amount and
      (II) $250,000.

              


         

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

        	
                “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
      Payments” 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 Restructuring Plan, including, without limitation, lease,
      utility, severance, relocation and property tax
  expenses.

              


      

      


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      
        	
                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 extraordinary gains for past 4 quarters

              	
                $________

              	
                $________

              	
                $_________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $_________

              	 
      
	
                4.
      Line A2 minus
      Line A3

              	
                $________

              	
                $________

              	
                $_________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $_________

              	 
      
	
                5.
      Cash proceeds of Subordinated Indebtedness for past 4
    quarters

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	 
      
	
                6.
      Interest Expense for past 4 quarters

              	
                $________

              	
                $________

              	
                $_________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $_________

              	 
      
	
                7.
      Income taxes for past 4 quarters

              	
                $________

              	
                $________

              	
                $_________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $_________

              	 
      
	
                8.
      Depreciation and amortization expense for past 4 quarters

              	
                $________

              	
                $________

              	
                $_________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $_________

              	 
      
	
                9.
      Extraordinary charges for past 4 quarters to extent approved by
      Administrative Agent

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $_________

              	 
      
	
                10.
      For fiscal quarters ending on or before 10/31/10, Restructuring Charges
      for past 4 quarters

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	 
      
	
                11.
      For past 4 quarters including fiscal quarter ending on 1/31/11,
      Restructuring Charges incurred during such quarter (not to exceed lesser
      of Unused Restructuring Amount & $250,000) 

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	 
      
	
                12.
      Sum of Lines A4, A5, A6, A7, A8, A9, A10 and A11 (“EBITDA”)

              	
                $________

              	
                $________

              	
                $_________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $________

              	
                $_________

              	 
      
	
                13.
      Ratio of Line Line A1 to A12

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                ___:
      1.0

              	 
      
	
                14.
      Line A13 ratio must not exceed

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                ___:
      1.0

              	 
      
	
                15.
      The Borrower is in compliance (circle yes or no)

              	 
      	 
      	 
      	 
      	 
      	 
      	 
      	 
      	
                yes/no

              	 
      


      

      


      
        
          
             


          

          
            3

            
              

            

          

          
             


          

        

      

      


      


      
        	
                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
      Payments made during such period; provided that, for
      purposes of determining Fixed Charges, any Restructuring Payments that are
      lease settlement payments, termination fees or other lump-sum or similar
      payments (each, a “Satisfaction Payment”)
      made pursuant to the Restructuring Plan in satisfaction of a larger
      payable amount owed by the Borrower or a Subsidiary may be divided and
      allocated on a straight-line basis over a twelve-month term, upon written
      confirmation in form and substance acceptable to the Administrative Agent
      from the Borrower’s external auditor of (i) such Satisfaction Payment,
      (ii) the larger obligation which it satisfies, and (iii) the term of such
      larger obligation.

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

              


      

      


      
        
          
             


          

          
            1

            
              

            

          

          
             


          

        

      

      


      


      
        	
                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 A12

              	
                $_________

              	
                $_________

              	
                $_________

              	
                $_________

              	
                $_________

              	
                $_________

              	
                $_________

              	
                $_________

              	
                $_________

              
	
                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 Payments 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

              


      

      


      
        
          
             


          

          
            2

            
              

            

          

          
             


          

        

      

      


      


      
        	
                C.Intentionally Deleted.

              	 
      
	
                D.Minimum EBITDA (Section 6.20(d))
      

              	 
      
	
                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 EBITDA
      for the twelve calendar months then ended to be less
  than:

              
	
                Fiscal
      quarter ending on or about:

              	
                EBITDA
      shall not be less than:

              
	
                April
      30, 2010

              	
                $2,700,000

              
	
                July
      31, 2010

              	
                $5,400,000

              
	
                October
      31, 2010

              	
                $8,900,000

              
	
                January
      31, 2011

              	
                $11,800,000

              
	
                April
      30, 2011

              	
                $11,850,000

              
	
                July
      31, 2011

              	
                $11,900,000

              
	
                October
      31, 2011

              	
                $12,000,000

              
	
                January
      31, 2012

              	
                $12,500,000

              
	
                April
      30, 2012

              	
                $13,100,000

              
	
                July
      31, 2012

              	
                $13,600,000

              
	
                October
      31, 2012 

                 

              	
                $14,300,000

              
	
                ;
      provided that,
      notwithstanding anything in this Section to the contrary, the calculation
      of the EBITDA on or about April 30, 2010, shall be for the three
      calendar month period ending on such date; the calculation of the EBITDA
      on or about July 31, 2010, shall be for the six calendar month
      period ending on such date; and the calculation of the EBITDA 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.

              


      

      


      
        	
                D.  Minimum EBITDA Covenant Compliance
      Calculation:

              
	
                1.EBITDA from Line
    A12

              	
                $___________

              
	
                2.Line D1 must be greater
      than

              	
                $___________

              
	
                3.The Borrower is in compliance
      (circle yes or no)

              	
                yes/no

              


      

      


      


      


      
        
          
             


          

          
            3

            
              

            

          

          
             


          

        

      

      


      


      
        	
                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

              


      

      


      


      
        
          
             


          

          
            4

            
              

            

          

          
             


          

        

      

      


      


      
        	
                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

              


      

      


      


      
        
          
             


          

          
            5

            
              

            

          

          
             


          

        

      

      

       

       

       

       

      

        
          
             


          

          
             


            
              

            

          

          
             


          

        


        


         

        Reaffirmation
and Consent

         

        


        Each of the undersigned heretofore
executed and delivered to the Administrative Agent a Guaranty Agreement dated as
of September 14, 2007 (the “Guaranty”).  Each
of the undersigned hereby consents to the Second Amendment and Waiver to Credit
Agreement as set forth above and confirms that its Guaranty, all obligations
thereunder, and all Collateral Documents executed and delivered by it, and any
Liens created or provided for thereunder remain in full force and effect and
shall not be affected, impaired or discharged by the Second Amendment and Waiver
to Credit Agreement.  Each of the undersigned further agrees that its
consent to any further amendments, waivers or consents in connection with the
Credit Agreement shall not be required as a result of this consent having been
obtained.  Each of the undersigned acknowledges that the Required
Lenders are relying on the assurances provided herein in entering into the
Second Amendment and Waiver to Credit Agreement set forth above.

        


        Dated as
of:  March 31, 2010

         

        
          	
                   
      

                	
                  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. (formerly known as 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