Document:

Exhibit 10.1

EXHIBIT
10.1

$605,095
term note between Champion Industries, Inc. and First Century Bank dated as of
July 25, 2005.

 

	
       

      CHAMPION
      INDUSTRIES, INC. 
	
       

      FIRST
      CENTURY BANK, N.A.
	
       

      PORT
      #

       

      Loan
      Number
	
       

      164191-01

       

      1295152

	
       

      PO
      BOX 2968
	
       

      500
      FEDERAL STREET
	
       

      Date
	
       

      07-25-2005

	
       

      HUNTINGTON,
      WV 25703
	
       

      BLUEFIELD,
      WV 24701
	
       

      Maturity
      Date
	
       

      07-24-2010

	
       
      
	
       
      
	
       

      Loan
      Amount
	
       

      $
      605,095.00

	
       
      
	
       
      
	
       

      Renewal
      of
	
       

      _____________

	
       
      
	
       
      
	
       

      BR/
      RESP 01/801

	
       

      BORROWERS
      NAME AND ADDRESS
	
       

      LENDER’S
      NAME AND ADDRESS
	
       
      
	
       
      

	
       

      “I”
      includes each borrower above, jointly and severally.
	
       

      “You”
      means the lender, its successors and assigns
	
       
      
	
       
      

For value
received, I promise to pay to you, or your order, at your address listed above
the PRINCIPAL sum of SIX
HUNDRED FIVE THOUSAND NINETY FIVE AND NO/100 Dollars
$605,095.00 

n Single
Advance: I will receive all of this principal sum on
7-25-2005 . No
additional advances are contemplated under this note. 

o Multiple
Advance: The principal sum shown above is the maximum amount of principal l can
borrow under this note.
On                
 I
will receive the amount of 0.00 and
future principal advances are contemplated.

Conditions:
The conditions for future advances are UPON
REQUEST.

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

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

INTEREST: I agree
to pay interest on the outstanding principal balance from 07-25-2005
at the
rate of 6.250
% per year
until 07-26-2005.

n Variable
Rate: This rate may then change as stated below.

n Index
Rate: The future rate will be EQUAL
TO 
the following index rate: THE
BASE RATE ON CORPORATE LOANS POSTED BY AT LEAST 75% OF THE NATION'S 30 LARGEST
BANKS KNOWN AS THE WALL STREET JOURNAL PRIME RATE. THE RESULT OF THIS
CALCULATION WILL BE ROUNDED UP TO THE NEAREST 0.125

o No
Index: The future rate will not be subject to any internal or external index. It
will be entirely in your control.

n
Frequency and Timing: The rate on this note may change as often as EVERY
DAY BEGINNING 07-26-2005.

A change
in the interest rate will take effect ON THE
SAME DAY.

o
Limitations: During the term of this loan, the applicable annual interest rate
will not be more than _________% or less than  ____________%. The rate may
not change more than ______ % each_____________.

Effect of
Variable Rate: A change in the interest rate will have the following effect on
the payments: 

n The
amount of each scheduled payment will change.

o
 The amount of the final payment will change. 

o
______________________________________________________________________.

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

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

n on the
same fixed or variable rate basis in effect before maturity (as indicated
above).

o at a
rate equal to __________________________________________________.

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

n
ADDITIONAL CHARGES: In
addition to interest, I agree to pay the following charges which nare
o are not
included in the principal amount above: $85.00
LOAN PROCESSING FEE; $10.00 UCC RECORDING FEE.

PAYMENTS: I agree
to pay this note as follows: 

ON
DEMAND, BUT IF NO DEMAND IS MADE THEN 60 MONTHLY PAYMENTS OF $11,793.50 ACCRUED
INTEREST CALCULATED ON THE AMOUNT OF CREDIT OUTSTANDING BEGINNING ON 08-24-2005.
THIS IS A VARIABLE RATE LOAN AND THE PAYMENT AMOUNTS MAY CHANGE AFTER THE
1ST PAYMENT
AND EVERY PAYMENT THEREAFTER. 

ADDITIONAL
TERMS:

THIS NOTE
IS FURTHER SUBJECT TO THE CROSS-COLLATERALIZATION/CROSS-DEFAULT AGREEMENT DATED
07/25/05

	
       

      n
      SECURITY: 
      This note is separately secured by (describe separate document by type and
      date):
	
       

      PURPOSE:
      The purpose of this loan is FINANCE
      LAW SUIT SETTLEMENT.

	
       

      SECURITY
      AGREEMENTS DATED 4/2/04, 9/9/04 & 7/25/05
	
       

      SIGNATURES: 
      I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2).  I
      have received a copy on today’s date.

	
       

      (This
      section is for your internal use.  Failure to list a separate
      security department does not mean the agreement will not secure this
      note.)
	
       
      

	
       
      
	
       
      

	
       

      Signature
      for Lender
	
       

      CHAMPION
      INDUSTRIES, INC.

	
       
      /s/ Jeffery Forlines
	
       
      /s/ Todd R. Fry

	
       

      JEFFERY
      FORLINES
	
       

       
      TODD R. FRY, VICE PRESIDENT & CFO

 

 

 

 

 

 

 

 

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

APPLICABLE
LAW: The law of the state in which you are located will govern this note. Any
term of this note which is contrary to applicable aw will not be effective,
unless the law permits you and me to agree to such a variation. If any provision
of this agreement cannot be enforced according to its terms, this fact will not
affect the enforceability of the remainder of this agreement No modification of
this agreement may be made without your express written consent. Time is of the
essence in this agreement.

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

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

PAYMENTS:
Each payment I make on this note will first reduce the amount I owe you for
charges which are neither interest nor principal. The remainder of each payment
will then reduce accrued unpaid interest, and then unpaid principal. If you and
I agree to a different application of payments, we will describe our agreement
on this note. I may prepay a part of, or the entire balance of this loan without
penalty, unless we specify to the contrary on this note. Any partial prepayment
will not excuse or reduce any later scheduled payment until this note is paid in
full (unless, when I make the prepayment, you and I agree in writing to the
contrary).

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

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

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

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

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

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

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

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

“Right to
receive money from you" means:

(1) any
deposit account balance I have with you

(2) any
money owed to me on an item presented to you or in your possession for
collection or exchange; and

(3) any
repurchase agreement or other nondeposit obligation.

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

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

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

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

DEFAULT:
I will be in default if any one or more of the following occur: (1) I fail to
make a payments on time or in the amount due; (2) I fail to keep the property
insured, If required; (3)I fail to pay, or keep any promise, on any debt or
agreement I have with you; (4) any other creditor of mine attempts to collect
any debt I owe him through court proceedings; (5) I die, am declared
incompetent, make an assignment for the benefit of creditors, or become
insolvent (either because my liabilities exceed my assets or I am unable to pay
my debts as they become duo); (6)I make any written statement or provide any
financial information that is untrue or inaccurate at the time it was provided;
(7)I do or fail to do something which causes you to believe that you will have
difficulty collecting the amount I owe you; (8) any collateral securing this
note is used in a manner or for a purpose which threatens confiscation by a
legal authority; (9) I change my name or assume an additional name without first
notifying you before making such a change; (10) I fail to plant, cultivate and
harvest crops in due season if I am a producer of crops; (11) any loan proceeds
are used for a purpose that will contribute to excessive erosion of highly
erodible land or to the conversion of wetlands to produce an agricultural
commodity, as further explained in 7 C.F.R. Part 1940, Subpart G, Exhibit
M.

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

(1) You
may demand immediate payment of all I owe you under this

note
(principal, accrued unpaid interest and other accrued charges).

(2) You
may set off this debt against any right I have to the payment of money from you,
subject to the terms of the "Set-Off" paragraph herein.

(3) You
may demand security, additional security, or additional parties to be obligated
to pay this note as a condition for not using any other remedy.

(4) You
may refuse to make advances to me or allow purchases on credit by
me.

(5) You
may use any remedy you have under state or federal law.

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

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

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

(1)
demand payment of amounts due (presentment);

(2)
obtain official certification of nonpayment (protest); or

(3) give
notice that amounts due have not been paid (notice of dishonor).

I waive
any defenses I have based on surety ship or impairment of
collateral.

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

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

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

	
       

      DATE
      OF TRANSACTION
	
       

      PRINCIPAL
      ADVANCE
	
       

      BORROWER’S
      INITIALS (not required)
	
       

      PRINCIPAL
      PAYMENTS
	
       

      PRINCIPAL
      BALANCE
	
       

      INTEREST
      RATE
	
       

      INTEREST
      PAYMENTS
	
       

      INTEREST
      PAID THROUGH:

	
        
	
       

      $
	
        
	
       

      $
	
       

      $
	
       

      %
	
       

      $
	
        

	
        
	
       

      $
	
        
	
       

      $
	
       

      $
	
       

      %
	
       

      $
	
        

	
        
	
       

      $
	
        
	
       

      $
	
       

      $
	
       

      %
	
       

      $
	
        

	
        
	
       

      $
	
        
	
       

      $
	
       

      $
	
       

      %
	
       

      $
	
        

	
        
	
       

      $
	
        
	
       

      $
	
       

      $
	
       

      %
	
       

      $
	
        

	
        
	
       

      $
	
        
	
       

      $
	
       

      $
	
       

      %
	
       

      $
	
        

	
        
	
       

      $
	
        
	
       

      $
	
       

      $
	
       

      %
	
       

      $
	
        

	
        
	
       

      $
	
        
	
       

      $
	
       

      $
	
       

      %
	
       

      $
	
        

	
        
	
       

      $
	
        
	
       

      $
	
       

      $
	
       

      %
	
       

      $
	
        

	
        
	
       

      $
	
        
	
       

      $
	
       

      $
	
       

      %
	
       

      $
	
        

	
        
	
       

      $
	
        
	
       

      $
	
       

      $
	
       

      %
	
       

      $
	
        

COMMERCIAL
SECURITY AGREEMENT

 

	
       

      DEBTOR
      NAME AND ADDRESS   
	
       

      SECURED
      PARTY NAME AND ADDRESS

	
       

      CHAMPION
      INDUSTRIES, INC.
	
       

      FIRST
      CENTURY BANK, N.A.

	
       

      P O
      BOX 2968
	
       

      600
      FEDERAL STREET

	
       

      HUNTINGTON,
      WV 25703
	
       

      BLUEFIELD,
      WV  24701

	
       
      
	
       
      

	
       

      55-0717455
	
       
      

	
       
      
	
       
      

	
       

      Type: o
       individual
      o partnership
      n corporation o
      ______________

	
       

      State
      of organization/registration (if applicable) WV___________________

	
       

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

 

The date
of this Commercial Security Agreement (Agreement) is 07-05-2005.

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

o Specific
debts. The following debts and all extensions, renewals, refinancing,
modifications, and replacements (describe):

n
 All Debts. All present and future debts, even if this Agreement is not
referenced, the debts are also secured by other collateral, or the future debt
is unrelated to or of a different type than the current debt. Nothing in this
Agreement is a commitment to make future loans or advances.

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

PROPERTY
DESCRIPTION. The
Property is described as follows:

o
 Accounts and Other Rights to Payment: All rights to payment, whether or
not earned by performance, including, but not limited to, payment for property
or services sold, leased, rented, licensed, or assigned. Ibis includes any
rights and interests (including all liens) which Debtor may have by law or
agreement against any account debtor or obligor of Debtor.

o
 Inventory: All inventory held for ultimate sale or lease, or which has
been or will be supplied under contracts of service, or which are raw materials,
work in process, or materials used or consumed in Debtor's
business.

o
 Equipment: All equipment including, but not limited to, machinery,
vehicles, furniture, fixtures, manufacturing equipment, farm machinery and
equipment, shop equipment, office and record keeping equipment, parts, and
tools. The Property includes any equipment described in a list or schedule
Debtor gives to Secured Party, but such a list is not necessary to create a
valid security interest in all of Debtor's equipment.

o
 Instruments and Chattel Paper: All instruments, including negotiable
instruments and promissory notes and any other writings or records that evidence
the right to payment of a monetary obligation, and tangible and electronic
chattel paper.

o
 General Intangibles: All general intangibles including, but not limited
to, tax refunds, patents and applications for patents, copyrights, trademarks,
trade secrets, goodwill, trade names, customer lists, permits and franchises,
payment intangibles, computer programs and all supporting information provided
in connection with a transaction relating to computer programs, and the right to
use Debtor's name.

o
 Documents: All documents of title including, but not limited to, bills of
lading, dock warrants and receipts, and warehouse receipts.

o
 Farm Products and Supplies: All farm products including, but not limited
to, all poultry and livestock and their young, along with their produce,
products, and replacements; all crops, annual or perennial, and all products of
the crops; and all feed, seed, fertilizer, medicines, and other supplies used or
produced in Debtor's farming operations.

o
 Government Payments and Programs: All payments, accounts, general
intangibles, and benefits including, but not limited to, payments in kind,
deficiency payments, letters of entitlement, warehouse receipts, storage
payments, emergency assistance and diversion payments, production flexibility
contracts, and conservation reserve payments under any preexisting, current, or
future federal or state government program.

o
 Investment Property: All investment property including, but not 1imited
to, certificated securities, uncertified securities, securities entitlements,
securities accounts, commodity contracts, commodity accounts, and financial
assets.

o
 Deposit Accounts: All deposit accounts including, but not limited to,
demand, time, savings, passbook, and similar accounts.

n
 Specific Property Description: The Property includes, but is not limited
by, the following (if required, provide real estate description):

HEIDELBERG
PRESS AND ACCESSORIES, HEIDELBERG 40” FIVE COLOR PRESS, (2) HEIDELBERG DI PRO
PRESS ACCESSORIES, RESBECK COLLATORS/STICHER TRIMMER SITEX COLOR SCANNER, MT-R
1120 IMAGE SETTER EACH AS DESCRIBED ON EXHIBIT “A” ATTACHED HERETO AND MADE A
PART HEREOF.DEMO HEIDELBERG QMD 146-4 PRO OFFSET PRSS S/N 991619 WITH ALL
STANDARD EQUIPMENT AND HEIDELBERG PRESS AND ACCESSORIES

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

 

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

	
      DEBTOR    
	
      SECURED
      PARTY

	
      CHAMPION
      INDUSTRIES, INC 
	
      FIRST
      CENTURY BANK, N.A

	
      ________________________ 
	
      ________________________ 

	
      TODD
      R. FRY, VICE PRESIDENT & CFO 
	
      JEFFERY
      FORLINES

 

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

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

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

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

(1)
Debtor is duly organized and validly existing in all jurisdictions in which
Debtor does business;

(2) the
execution and performance of the terms of this Agreement have been duly
authorized, have received all necessary governmental approval, and will not
violate any provision of law or order;

(3) other
than previously disclosed to Secured Party, Debtor has not changed Debtor’s name
or principal place of business within the last 10 years and has not used any
other trade or fictitious name; and

(4)
Debtor does not and will not use any other name without Secured Party's prior
written consent.

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

DUTIES
TOWARD PROPERTY, Debtor will protect the Property and Secured Party's interest
against any competing claim. Except as otherwise agreed, Debtor will keep the
Property in Debtor's possession at the address indicated on page 1 of this
Agreement. Debtor will keep the Property in good repair and use the Property
only for purposes specified on page 1. Debtor will not use the Property in
violation of any law and will pay all taxes and assessments levied or assessed
against the Property. Secured Party has the right of reasonable access to
inspect the Property, including the right to require Debtor to assemble and make
the Property available to Secured Party. Debtor will immediately notify Secured
Party of any loss or damage to the Property. Debtor will prepare and keep books,
records, and accounts about the Property and Debtor's business, to which Debtor
will allow 5ecured Party reasonable access.

Debtor
will not sell, offer to sell, license, lease, or otherwise transfer or encumber
the Property without Secured Party's prior written consent. Any disposition of
the Property will violate Secured Party’s rights, unless the Property is
inventory sold in the ordinary course of business at fair market value. If the
Property includes chattel paper or instruments, either as original collateral or
as proceeds of the Property, Debtor will record Secured Party's interest on the
face of the chattel paper or instruments.

If the
Property includes accounts, Debtor will not settle any account for less than the
full value, dispose of the accounts by assignment, or make any material change
in the terms of any account without Secured Party's written consent. Debtors
will collect all accounts in the ordinary course of business, unless otherwise
required by Secured Party. Debtor will keep the proceeds of the accounts all any
goods returned to Debtor, in trust for Secured Party and will not commingle the
proceeds or returned goods with any of Debtor's other property. Secured Party
has the right to require Debtor to pay Secured Party the fuel price on any
returned items. Secured Party may require account debtors to make payments under
the accounts directly to Secured Party. Debtor will deliver the accounts to
Secured Party at Secured Party’s request. Debtor will give Secured Party all
statements, reports, certificates, list of account debtors (showing names,
addresses, and amounts owing), invoices applicable to each account, and any
other data pertaining to the accounts as Secured Party requests.

If the
Property includes farm products, Debtor will provide Secured Party with a list
of the buyers, commission merchants, and selling agents to or through whom
Debtor may sell the farm products. Debtor authorizes Secured Party to notify any
additional parties regarding Secured Party's interest in Debtor's farm products,
unless prohibited by law. Debtor agrees to plant, cultivate, and harvest crops
in due season. Debtor will be in default if any loan proceeds are used for a
purpose that will contribute to excessive erosion of highly erodible land or to
the conversion of wetland to produce or to make possible the production of an
agricultural commodity, further explained in 7 CFR Part 1940, Subpart G, and
Exhibit M. If Debtor pledges the Property to Secured Party (delivers the
Property into the possession or control of Secured Party or a designated third
party), Debtor will, upon receipt, deliver any proceeds and products of the
Property to Secured Party. Debtor will provide Secured Party with any notices,
documents, financial statements, reports, and other information relating to the
Property Debtor receives as the owner of the Properly.

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

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

AUTHORITY
TO PERFORM. Debtor authorizes Secured Party to do anything Secured Party deems
reasonably necessary to protect the Property and Secured Party's interest in the
Property. If Debtor fails to perform any of Debtor's duties under this
Agreement, Secured Party is authorized, without notice to Debtor, to perform the
duties or cause them to be performed. These authorizations include, but are not
limited to, permission to pay for the repair, maintenance, and preservation of
the Property and take any action to realize the value of the Property. Secured
Party's authority to perform for Debtor des not create an obligation to perform
and Secured Party's failure to perform will not preclude Secured Party from
exercising any other rights under the law or this Agreement.

If
Secured Party performs for Debtor, Secured Party will use reasonable care.
Reasonable care will not include any steps necessary to preserve rights against
prior Parties or any duty to take action in connection with the management of
the Property.

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

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

PURCHASE
MONEY SECURITY INTEREST. If the Property includes items purchased with the
Secured Debts, the Property purchased with the Secured Debts will remain subject
to Secured Party's security interest until the Secured Debts are paid in full.
Payments on any non-purchase money loan also secured by this Agreement will not
be applied to the purchase money loan. Payments on the purchase money loan will
be applied first to the non-purchase money portion of the loan, if any, and then
to the purchase money portion in the order h which the purchase money Property
was acquired. If the purchase money Property was acquired at the same time,
payments will be applied in the order Secured Party selects. No security
interest will be terminated by application of this Formula.

DEFAULT.
Debtor will be in default if:

(1)
Debtor (or Borrower, if not the same) fails to make a payment in full when
due;

(2)
Debtor fails to perform any condition or keep any covenant on this or any debt
or agreement Debtor has with Secured Party;

(3) A
default occurs under the terms of any instrument or agreement evidencing or
pertaining to the Secured Debts;

(4)
anything any happens that either causes Secured Party to reasonably believe that
Secured Party will have difficulty in collecting the Secured Debts or
significantly impairs the value of the Property.

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

(1) Make
all or any part of the Secured Debts immediately due and accrue interest at the
highest post-maturity interest rate;

(2)
Require. Debtor to gather the Property and make it available to Secured Party in
a reasonable fashion;

(3) enter
upon Debtor's premises and take possession of all or any part of Debtor's
property for purposes of preserving the Property or its value and use and
operate Debtor's property to protect Secured Party's interest, all without
payment or compensation to Debtor;

(4) use
any remedy allowed by state or federal law, or provided in any agreement
evidencing or pertaining to the Secured Debts.

If
Secured Party repossesses the Property or enforces the obligations of an account
debtor, Secured Party may keep or dispose of the Property as provided by law.
Secured Party will apply the proceeds of any collection or disposition first to
Secured Party's expenses of enforcement, which includes reasonable attorneys'
fees and legal expenses to the extent not prohibited by law, and then to the
Secured Debts. Debtor (or Borrower, if not the same) will be liable for the
deficiency, if any.

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

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

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

 

CROSS-COLLATERALIZATION
AND CROSS-DEFAULT AGREEMENT

           THIS
CROSS-COLLATERALIZATION
AND CROSS-DEFAULT AGREEMENT, made
and entered into this 25TH day of
July, 2005, by and between Champion Industries, Inc. ("Borrower"); Bourque
Printing, Inc. ("Bourque"); and FIRST CENTURY BANK, N.A.,
("Lender").

W I N E S S E T H

           WHEREAS,
as a part of the consideration and as additional security for the "Lender"
making a loan to "Borrower": the "Lender" has required and the "Borrower” and
"Bourque" have agreed to enter into this CROSS-COLLATERALIZATION
AND CROSSDEFAULT AGREEMENT as
hereinafter set forth.

           NOW,
THEREFORE, IN CONSIDERATION of the loans made by "Lender" to "Borrower", the
"Borrower" does hereby agree as follows, to-wit: 

1.       
That any default under any other terms and provisions of any one of the notes
evidencing one of the obligations referred to in paragraph 2. below or under any
of the terms and provisions of any deed of trust, security agreement or guaranty
agreement securing any such obligation or in the terms and provisions of any
Loan Agreement or any other loan documentation relating to any such obligation,
shall constitute a default under all of the notes evidencing all of said
obligations, as well as under all of the deed(s) of trust, security
agreement(s), and/or guaranty agreement(s) and/or securing any or all of said
obligations and any Loan Agreement(s) which govern said obligations, and any
such default shall entitle Lender to exercise each and every right available to
it under each and every of said documents, including, but not limited to, the
right to foreclose against and sell any collateral, whether real or persona,
securing any of said obligations as if said collateral secured all of said
obligations.

2.       
As of the date of execution this agreement relates to all of the 

following
existing obligations of Borrower:

A. A term
debt accommodation dated July 25, 2005 in the original 

amount of
$605,095.00 bearing account number 1295152.

B. A term
debt accommodation dated April 2, 2003 in the original

amount of
$450,050.00 bearing account number 1393995.

C. A term
debt accommodation dated September 9, 2004 in the original

Amount of
$600,075.00 bearing account number 1294733.

Any such
obligation includes any and all extensions, renewals, modifications,
substitutions, replacements, and changes 

in form
thereof, which may be effected from time to time between the 

"Bank"
and the "Borrower".

3.       
Any and all other notes executed by the Borrower to evidence an obligation owing
to Lender after the date of this agreement are further 

subject
to and governed by the terms contained herein.

4.
Execution of this Agreement does not in any manner modify or revise any

existing
loan document. 

 

WITNESS
THE FOLLOWING SIGNATURES AND SEALS:

“Borrowers”:

Champion
Industries, Inc.

BY:
/s/Todd
Fry

Its
CFO

Bourque
Printing, Inc.

BY:
/s/Todd
Fry

It
CFO

“Corporate
Guarantor”:

Champion
Industries, Inc.

BY:
/s/Todd
Fry

Its
CFO

Bank:

FIRST
CENTURY BANK, N.A.

BY:________________________

Its________________________Exhibit 10.1

    Exhibit
      10.1

     

    EMPLOYMENT,
      CONSULTING AND SEPARATION

    AGREEMENT
      AND RELEASE

     

    This
      Employment, Consulting and Separation Agreement and Release (this “Agreement”)
      is made and entered into by and between ICO, Inc. (“Company”), and W. Robert
      Parkey, Jr. (“Employee”) on this 8th day of September, 2005 (the “Effective
      Date”).

     

    WHEREAS,
      pursuant to an employment agreement effective February 2, 2004, as amended
      by
      amendments dated May 10, 2004 (the “First Amendment”) and February 11, 2005 (the
“Second Amendment”) (the referenced employment agreement, as amended by the
      First Amendment and Second Amendment, referred to herein as the “Employment
      Agreement”), Employee is currently employed as President and Chief Executive
      Officer of Company. Furthermore, Employee is also a member of the Board of
      Directors of Company (the “Board”).

     

    WHEREAS,
      Employee desires to resign from his positions of Chief Executive Officer and
      President of Company and as a member of the Board, effective as of 11:59 p.m.
      CST on September 30, 2005 (the “Executive Resignation Date”), to better enable
      him to pursue other opportunities, and to assume the position of Special Advisor
      to the Company.

     

    NOW,
      therefore, the Parties agree as follows:

     

    1. Resignation
      from Current Positions and Board Membership.

     

    (a) Employee
      shall resign from his position of Chief Executive Officer and President of
      Company, and as a member of the Board, and from any positions he currently
      holds
      as an officer or director of any of the Company’s subsidiaries, effective as of
      the Executive Resignation Date.

     

    (b) Company
      will issue a mutually agreeable press release immediately following the
      execution of this Agreement, announcing that Employee is resigning from the
      positions of Chief Executive Officer and President, and as a member of the
      Board, to pursue other business opportunities, and highlighting Employee’s
      accomplishments at the Company.

     

    2. Assumption
      of Special Advisor Position.

     

    (a) Effective
      as of 12:00 a.m. CST on October 1, 2005, Employee shall assume the position
      of
      Special Advisor, in which capacity he shall provide advice and counsel to the
      Board, and to the Chief Executive Officer and President of Company, at such
      times and locations reasonably requested by Company but not for more than a
      monthly average of ten hours per week, through February 1, 2006 (unless
      earlier terminated as provided herein). During the period when Employee is
      employed as Special Advisor, he shall receive the same compensation, benefits
      and office support he would otherwise have received as President and Chief
      Executive Officer under the terms of the Employment Agreement, including an
      executive office and administrative support in connection with his
      Company-related activities. 

     

    (b) Employee
      shall be entitled to receive a Year Two Annual Incentive Bonus if one is earned
      pursuant to the terms set forth in the Second Amendment. Employee shall not
      be
      entitled to receive any annual incentive bonus or other bonus based on Company’s
      performance for periods commencing on or after October 1, 2005. 

     

    (c) Nothing
      in this Agreement is intended to prevent Employee from participating in the
      Company’s 401k Plan to the extent he is qualified to participate during the
      period he is employed by the Company.

     

    3. Termination
      of Employment.

     

    (a) Effective
      as of 11:59 p.m. CST on February 1, 2006 (“Employment Termination Date”),
      Employee shall resign from the Special Advisor position, Employee’s employment
      with Company will terminate, and Company shall retain Employee as an outside
      consultant through June 30, 2006 (the “Consulting Period”). During the
      Consulting Period, Employee will provide further assistance to Company in
      transitioning to the new Chief Executive Officer and President, and shall
      include other assistance to the Board, at such times and locations mutually
      agreed upon by Employee and Company, but not for more than a monthly average
      of
      ten hours per week during such Consulting Period; provided that the times and
      location of such assistance requested by Company shall not be unreasonably
      denied by Employee.

     

    (b) During
      the Consulting Period: 

     

    (i) Employee
      will be paid consulting fees in the amount of $25,833.33 per month, payable
      by
      the 15th
      of each
      month (“Consulting Fees”).

     

    (ii)
       Company
      shall pay Employee’s premiums for Employee’s and his dependants’ continued
      coverage, pursuant to the Consolidated Omnibus Budget Reconciliation Act
      (“COBRA”), under the Company’s medical, dental, and vision plans in which
      Employee and his dependants were participants immediately prior to the
      termination of Employee’s employment. (It is understood that Employee shall be
      responsible for Employee’s COBRA payments for periods after June 30, 2006.)

     

    (iii) Employee
      will be provided with an executive office and administrative support in
      connection with his Company-related activities.

     

    (c) Notwithstanding
      the foregoing, in the event Employee secures and commences full-time employment
      as a senior executive with another company prior to or as of the Employment
      Termination Date, or during the Consulting Period, as of the commencement of
      such employment, Employee will no longer be retained as an outside consultant,
      nor will he be required to provide consulting services, but will nevertheless
      receive the items set forth in Section 3(b)(i) and 3(b)(ii), but not 3(b)(iii),
      in respect of his prior services to Company.

     

    (d) Company
      shall defend and indemnify Employee in connection with any Claims and Damages
      asserted by third parties arising out of or connected with Employee’s service as
      a Special Advisor or consultant as set forth in this Agreement.

     

    
      
        Page
          2 of  9

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4. Definitions.

     

    (a)  “Claims”
      means
      all theories of recovery of whatever nature, whether known or unknown, and
      whether recognized by the law or equity of any jurisdiction. This term includes
      causes of action, charges, indebtedness, losses, claims, liabilities, and
      demands, whether arising in equity or under the common law or under any contract
      or statute. This term includes any claims of discrimination, harassment,
      retaliation, retaliatory discharge, or wrongful discharge, and any other claim
      which is alleged or which could be alleged by a party or on that party’s behalf
      in any lawsuit or other proceeding. This term includes any claims for indemnity
      or reimbursement for tax liabilities incurred in connection with Employee’s
      separation from the Company or in regard to any stock options granted to
      Employee by Company. This term includes any claims and rights arising under
      the
      Age Discrimination in Employment Act of 1967, 29 U.S.C. §621, et
      seq.;
      Title
      VII of the Civil Rights Act of 1964, 42 U.S.C. §2000e, et
      seq.;
      the
      Employee Retirement Income Security Act of 1974, 29 U.S.C. §1001, et
      seq.;
      the
      Americans with Disabilities Act, 42 U.S.C. §12101, et
      seq.;
      the
      Worker Adjustment and Retraining Notification Act, 29 U.S.C. §2101,
et
      seq.;
      the
      Family and Medical Leave Act, 29 U.S.C. §2601, et
      seq.;
      and
      any other federal, state or local law or regulation regarding employment or
      the
      termination of employment. This term includes any and all rights, benefits
      or
      claims Employee may have under any employment contract or under any severance,
      bonus, stock option or incentive compensation plan, program or agreement.

     

    (b)  “Damages”
      means
      all elements of relief or recovery of whatever nature, whether known or unknown,
      which are recognized by the law or equity of any jurisdiction which is sought
      or
      which could be sought by a party or on that party’s behalf, in any lawsuit or
      other proceeding. This term includes actual, incidental, indirect,
      consequential, compensatory, exemplary, liquidated and punitive damages, as
      well
      as rescission, attorneys’ fees, interest, costs, equitable relief, and expenses.
      This term also includes wages, benefits or other compensation owed, or allegedly
      owed to Employee, by virtue of Employee’s employment or termination of
      employment with Company, including severance, bonuses, stock option or incentive
      compensation, payable pursuant to any plan, program, or agreement.

     

    (c)  “Employee”
      means
      and includes Employee acting individually, in any corporate or other
      representative capacity, and on behalf of Employee’s heirs, executors,
      administrators, legal representatives, successors, beneficiaries, and
      assigns.

     

    (d)  “Released
      Parties”
      means
      and includes Company, and its past, present and future owners, trustees,
      parents, subsidiaries, affiliates, and related entities, and all of the
      foregoing entities’ and persons’ past, present and future directors, officers,
      employees, associates, agents, benefit plans (and each such plan’s fiduciaries,
      administrators, trustees, sponsors and representatives), insurance carriers,
      predecessors, successors, assigns, executors, administrators, and
      representatives, in both their representative and individual capacities;
      provided that this term does not include Employee. Each of the Released Parties
      is an intended beneficiary of this Agreement.

     

    
      
        
          Page
            3
of 
            9 

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5. Consideration.

     

    
    

    (a) In
      consideration for Employee executing this Agreement, Company shall extend the
      option exercise period to February 2, 2011, with regard to the options
      previously granted to Employee by the following stock option agreements between
      Employee and Company:

     

    (i) Incentive
      Stock Option Agreement dated February 2, 2004, pursuant to which options to
      purchase 40,000 shares of Company’s common stock were granted from Company’s
      1995 Stock Option Plan, with an exercise price of $2.16 per share; 

     

    (ii)
       Incentive
      Stock Option Agreement dated February 2, 2004, pursuant to which options to
      purchase 70,000 shares of Company’s common stock were granted from Company’s
      1996 Stock Option Plan, with an exercise price of $2.16 per share;

     

    (iii) Incentive
      Stock Option Agreement dated February 2, 2004, pursuant to which options to
      purchase 10,000 shares of Company’s common stock were granted from Company’s
      1996 Stock Option Plan, with an exercise price of $2.25 per share;

     

    (iv) Incentive
      Stock Option Agreement dated February 2, 2004, pursuant to which options to
      purchase 60,000 shares of Company’s common stock were granted from Company’s
      1998 Stock Option Plan, with an exercise price of $2.25 per share;
      and

     

    (v) Nonstatutory
      Stock Option Agreement dated March 8, 2004, pursuant to which options to
      purchase 130,000 shares of Company’s common stock were granted from Company’s
      1998 Stock Option Plan; provided, however that the extension of the exercise
      period under the Non-Statutory Stock Option Agreement described in this Section
      5(a)(v) shall only apply with respect to options to purchase 20,000 shares
      under
      such Incentive Stock Option Agreement, with an exercise price of $2.16 per
      share.

     

    Contemporaneous
      with the execution of this Agreement, Company and Employee will execute an
      Amendment to Stock Option Agreements to extend the option exercise periods
      of
      the options referred to under the stock option agreements described in this
      Section 5(a), and to effect the vesting and re-pricing set forth in Section
      5(b)(ii) and (iii), referred to as the “Option Extensions.”

     

    (b) As
      further consideration for Employee executing this Agreement: 

     

    (i)  Employee
      shall be permitted to maintain his cell phone number, currently used by him
      on
      his Company cell phone. 

     

    (ii)
       Company
      shall contract for executive outplacement services provided by a vendor chosen
      by Employee (although Employee shall be responsible for paying all fees and
      expenses related to such services).

     

    (iii) Company
      shall fully vest, effective as of the Executive Resignation Date, the options
      referred to in Section 5(a) that are subject to Option Extensions which have
      not
      vested as of the date of this Agreement and which would not otherwise have
      vested prior to February 2, 2006, namely, the options referenced in clauses
      5(a)(ii), 5(a)(iii), and 5(a)(iv). Notwithstanding the foregoing, as a condition
      to Company fully vesting the options as provided in this Section 5(b)(iii),
      Employee shall first execute the irrevocable option cancellation and release
      agreement, attached hereto as Exhibit A, under which Employee forfeits all
      of
      his options to purchase Company’s common stock that are not options subject to
      Option Extensions as provided in Section 5(a) above.

     

    
      
        Page 4
of 
          9 

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iv) Company
      shall re-price the options to purchase 20,000 shares of ICO, Inc. common stock,
      referenced in clause 5(a)(v) above, to $2.40 per share (the fair market value
      of
      the stock, as defined in the applicable plan, on the date of
      grant).

     

    (c) The
      consideration set forth in Section 3(b)(i) and (ii), and this Section 5, is
      referred to collectively as “Consideration.”

     

    6. Release.

     

    (a)       Employee
      releases and discharges the Released Parties from, and hereby waives, all Claims
      and Damages related to, arising from, or attributed to actions or inactions
      occurring prior to or on the Effective Date of this Agreement, including those
      related to, arising from or attributed to: (i) Employee’s employment with
      Company and service on Company’s Board prior
      to
      and including
      the Effective Date, his resignation from the positions of President and Chief
      Executive Officer and as a member of the Board, and the termination
      of his
      employment; (ii)
      the
      Employment Agreement;
      and
      (iii) all other acts or omissions related to any matter at any time
      prior
      to and including the Effective Date. Notwithstanding the foregoing, this release
      will not affect and does not waive Employee’s rights or Claims: (x) for
      benefits and payments to be payable after the Effective Date under Company’s
      medical, dental, vision, or 401k plans; and (y) for defense and
      indemnification against Claims or Damages by third parties (and insurance
      coverage associated therewith, but not
      Claims as to the adequacy of the amount of such coverage),
      pursuant to Article 7 of the Amended and Restated Bylaws of ICO, Inc., as
      amended August 9, 2005.

     

    (b)       
      Company releases and discharge Employee from, and hereby waives, all Claims
      and
      Damages related to, arising from, or attributed to actions or inactions
      occurring prior to or on the Effective Date of this Agreement, including those
      related to, arising from or attributed to: (i) Employee’s employment with
      Company and service on Company’s Board prior
      to
      and including the Effective Date, his resignation from the positions of
      President and Chief Executive Officer and as a member of the Board, and the
      termination of his employment; (ii) the Employment Agreement;
      and
      (iii) all other acts or omissions related to any matter at any time
      prior
      to and including the Effective Date. Notwithstanding the foregoing, this release
      will not affect and does not waive any Claims Company may theoretically have:
      (x) arising from unlawful conduct on the part of Employee currently unknown
      to
      the Company, if any; or (y) arising from breach, if any, of Article 4 of the
      Employment Agreement (entitled “Ownership and Protection of Intellectual
      Property and Confidential Information; Non-Competition Agreement”).

     

    (c)       
      Employee and Company understand and expressly agree that their respective
      releases in Section 6(a) and 6(b) extend to all Claims of every nature and
      kind,
      known or unknown, suspected or unsuspected, past or present (but not future),
      which Claims are arising from, attributable to, or related to Employee’s
      employment with Company, including his resignation from the positions of
      President and Chief Executive Officer and as a member of the Board, and the
      termination of his employment, the Employment Agreement, or
      any alleged action or inaction of the Released Parties prior
      to
      and including the Effective Date,
      and
      that
      all such Claims are hereby expressly settled or waived,
      except
      as expressly excluded from this release by Section 6(a)(y) and (z) and 6(b)(y)
      and (z). 
      Employee further understands and expressly agrees that the release in
      Section 6(a) includes the waiver of any Claims and rights Employee may
      have
      against any of the Released Parties under the Age Discrimination in Employment
      Act, the Older Workers Benefit Protection Act, or under any other law
      prohibiting age discrimination, arising prior to and including the date of
      Employee’s execution of this Agreement.

     

     

    
      
        Page 5
of 
          9 

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)       
      Employee and Company respectively agree not to bring or cause to be brought
      any
      of the Claims waived in Sections 6(a) and 6(b) in any court or before any
      arbitral authority, and represent and warrant to one another that they have
      not
      brought or caused to be brought any such Claims in any court or before any
      arbitral authority as of the Effective Date of this Agreement.

     

    (e) None
      of
      the foregoing releases or waivers in this Section 6 by any party hereto are
      intended to release or waive any rights arising under this Agreement, the
      Amendment to Stock Option Agreements, the provisions of applicable Stock Option
      Plans as they apply to vested options held by Employee
      following
      the parties' execution of this Agreement and the Amendment to Stock Option
      Agreements, or rights specifically referenced herein as surviving the
      execution of this Agreement or the Amendment to Stock Option
      Agreements.

     

    7. Cooperation
      in Litigation. 
      Employee
      agrees that Employee shall cooperate with and assist Company in defense of
      any
      claim, litigation or administrative proceeding brought against Company or any
      other Released Party, as reasonably requested by Company. Such cooperation
      and
      assistance shall include: (a) interviews of Employee by legal counsel
      for
      Company or other Released Party as reasonably requested by Company’s counsel;
      (b) Employee providing documents (or copies thereof) and executing
      affidavits as reasonably requested by Company’s counsel; and (c) Employee
      appearing for depositions, trials, and other proceedings as reasonably requested
      by Company’s counsel. Furthermore, Employee shall not communicate with any party
      adverse to Company, or with a representative, agent or legal counsel for any
      such party, concerning any pending or future claims or litigation or
      administrative proceedings, except solely through legal counsel for Company.
      Nothing in this Section 7 precludes Employee from providing testimony
      or
      documents pursuant to a subpoena or court order, or is intended to cause
      Employee to testify other than truthfully in any proceeding or
      affidavit.

     

    8. Non-Disparagement. 
      Neither
      party to this Agreement shall make disparaging or negative remarks or comments
      about the other to any third party. Without limiting the foregoing, the Board
      shall provide positive feedback about Employee if contacted by third parties
      in
      connection with such third parties’ consideration of Employee for employment.

     

    9. Warranties.

     

    (a) Employee
      agrees, represents and warrants that:

     

    
      
        Page 6
of
           9 

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i) The
      Consideration set forth in Sections 3(b)(i) and (ii) and Section 5 of this
      Agreement is not something to which Employee or Company is otherwise
      indisputably entitled except in exchange for execution of this Agreement, and
      are each, standing alone, good and sufficient consideration for Employee's
      and
      Company’s execution of this Agreement, and each and all are granted or paid by
      or on behalf of Company and the other Released Parties, or provided by Employee,
      in full satisfaction and settlement of any Claims and Damages;

     

    (ii) Employee
      is legally and mentally competent to sign this Agreement;

     

    (iii) Employee
      is the sole owner of any Claims that have been or could have been asserted,
      Employee has the requisite capacity and authority to make this Agreement, and
      no
      portion of any existing or potential Claims has been sold, assigned, pledged
      or
      hypothecated by Employee to any third party; and

     

    (iv) Employee
      presently possesses the exclusive right to receive all of the Consideration
      granted or paid in consideration for this Agreement.

     

    (b) Company
      agrees, represents, and warrants that it has obtained all authorization
      necessary to enter into and give effect to this Agreement and the Amendment
      to
      Stock Option Agreement.

     

    10. Choice
      of Law.  This
      Agreement shall be
      interpreted and construed in accordance with and shall be governed by the laws
      of the State of Texas, without reference to principles of conflict of law of
      Texas or any other jurisdiction, and, when applicable, the laws of the United
      States.

     

    11. Entire
      Agreement / Company Property.

     

    (a)  This
      Agreement (including Exhibit A) and the Amendment to Stock Option Agreements
      constitute the entire agreement of the parties relating to the subject matter
      hereof, and supersedes any obligations of Company and the other Released Parties
      under any previous agreements (including the Employment Agreement), except
      as
      otherwise provided in this Agreement, the Amendment to Stock Option Agreements,
      and applicable Stock Option Plans. Notwithstanding the foregoing, Employee’s
      obligations under Article 1.5 of the Employment Agreement (relating to
      Employee’s fiduciary duties to the Company), Article 4 of the Employment
      Agreement (entitled “Ownership and Protection of Intellectual Property and
      Confidential Information; Non-Competition Agreement”), and Article 5.5 of the
      Employment Agreement (relating to resolution of disputes arising under the
      Employment Agreement) shall remain in full force and effect as would otherwise
      have been required pursuant to the Employment Agreement. No term, provision
      or
      condition of this Agreement may be modified in any respect except by a writing
      executed by both Employee and Company. No person has any authority to make
      any
      representation or promise on behalf of any of the parties not set forth in
      this
      Agreement. This Agreement has not been executed in reliance upon any
      representation or promise except those contained herein.

     

     

    
      
        Page
          7 of 9

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)  Without
      limiting the breadth of the Ownership and Protection of Intellectual Property
      and Confidential Information, Non-Competition Agreement (in Article 4 of the
      Employment Agreement), Employee agrees that on the later of the date when
      Employee ceases to be employed by the Company or on the last day of the
      Consulting Period, he: (i) shall return to Company all originals and copies
      of
      all Company files, documents and forms, including those maintained in electronic
      form or in any other manner or medium; (ii) shall delete any such Company
      property in electronic form (“Electronic Documents”) maintained on his personal
      computer or other personal communication systems or electronic data storage
      devices (“Personal Devices”) if copies of such Electronic Documents are
      currently stored on the Company-owned computer that had been assigned to
      Employee, but with regard to any such Electronic Documents that are only stored
      on Personal Devices, shall furnish copies (either printed copies or electronic
      copies) to Company’s General Counsel prior to deleting; and (iii) shall not
      maintain, disclose to others, or use any such Company property without the
      written permission of Company's General Counsel. 

     

    12. Acknowledgment
      of Terms.  Employee
      acknowledges
      that Employee has carefully read this Agreement; that Employee has had the
      opportunity for review of it by Employee’s attorney; that Employee fully
      understands its final and binding effect; that neither Company nor Employee
      admits to wrongdoing in connection with Employee’s employment, the Employment
      Agreement, the termination of Employee’s employment, or any other matter covered
      by the releases in Section 6(a) or 6(b); that this Agreement is intended as
      a
      compromise of all Claims released by the parties in Section 6(a) and 6(b)
      respectively; that the only promises or representations made to Employee to
      sign
      this Agreement are those stated herein; and that Employee is signing this
      Agreement voluntarily.

     

    13. Waiver.  The
      failure of Company or
      Employee to enforce or to require timely compliance with any term or provision
      of this Agreement shall not be deemed to be a waiver or relinquishment of rights
      or obligations arising hereunder, nor shall this failure preclude the
      enforcement of any term or provision or avoid the liability for any breach
      of
      this Agreement.

     

    14. Severability.  Each
      part, term or
      provision of this Agreement is severable from the others. Notwithstanding any
      possible future finding by a duly constituted authority that a particular part,
      term or provision is invalid, void or unenforceable, this Agreement has been
      made with the clear intention that the validity and enforceability of the
      remaining parts, terms and provisions shall not be affected
      thereby.

     

    15. Costs
      and Attorneys’ Fees. If
      any action is initiated to enforce this Agreement, the prevailing party shall
      be
      entitled to recover from the other party its reasonable costs and attorneys’
      fees.

     

    16. Construction.
      This Agreement shall be deemed drafted equally by all the parties. Its language
      shall be construed as a whole and according to its fair meaning. Any presumption
      or principle that the language is to be construed against any party shall not
      apply. The headings in this Agreement are only for convenience and are not
      intended to affect construction or interpretation. This Agreement represents
      a
      compromise of disputed Claims and is not to be construed as an admission, direct
      or indirect, against any interest of the parties. Any references to paragraphs,
      subparagraphs, or sections are to those parts of this Agreement, unless the
      context clearly indicates to the contrary. Also unless the context clearly
      indicates to the contrary, (a) the plural includes the singular and the singular
      includes the plural; (b) “and” and “or” are each used both conjunctively and
      disjunctively; (c) “any,”“all,”“each,” or “every” means “any and all, and each
      and every”; (d) “includes” and “including” are each “without limitation;” and
      (e) “herein,”“hereof,”“hereunder” and other similar compounds of the word “here”
      refer to the entire Agreement and not to any particular paragraph, subparagraph,
      section or subsection. 

     

     

    
      
        Page
          8 of  9

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    17. Timing. 
      Employee
      acknowledges: (a) Employee has 21 days to consider this Agreement before
      executing it, although Employee may execute this Agreement before the 21 days
      expires; (b) Employee may revoke this Agreement within 7 days after
      Employee executes it; (c) such revocation must be in writing (and may
      be
      transmitted by facsimile pursuant to Section 18 below) and received by Company’s
      General Counsel within this 7-day period; (d) if Employee revokes this
      Agreement, it will not be effective or enforceable; and (e) Employee’s
      acceptance of any of the Consideration after expiration of the 7-day period
      shall constitute Employee’s acknowledgment that Employee did not revoke this
      Agreement during the 7-day period.

     

    18. Delivery
      and Signatures by Facsimile. 
      All
      signatures of the parties to this Agreement may be transmitted by facsimile,
      and
      such facsimile will, for all purposes, be deemed to be the original signature
      of
      such party whose signature it reproduces, and will be binding upon such party.
      

     

    19. Advice
      to Consult Counsel. 
      Company hereby advises Employee to consult with an attorney prior to executing
      this Agreement.

     

    

     

    AGREED
      AND ACCEPTED:

     

    
      

      
        
          	 EMPLOYEE
	
                   

                
	 
	  /s/
                  W. Robert Parkey, Jr. 
	 W.
                  Robert Parkey, Jr.
	 Date:
                  September 8, 2005

        

    

    
       

    

     

    
      

      
        	 ICO,
                Inc.
	
                 

              
	 
	By:
                /s/ C. N. O'Sullivan
	Name:
                C. N. O'Sullivan
	Title:
                Chairman
	 Date:
                September 8, 2005

      

       

       

               
        Page 9 of
        9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]