Document:

ex4_4.htm

     

    EXHIBIT
4.4

     

    2009
STOCK PLAN

    

    SECTION
1

    INTRODUCTION

    

    1.1 Establishment. Lux
Digital Pictures Inc. (the “Company”), a Wyoming corporation, hereby establishes
the 2009 Stock Compensation Plan (the “Plan”) for employees, consultants,
directors and other persons, entities or their designees associated with the
Company and any of the Company’s subsidiaries, whom the Board wishes to
compensate for services.

    

    1. 2 Purposes. The
purposes of this Plan are to (i) attract and retain the best available personnel
for positions of responsibility within the Company, (ii) provide incentives to
employees, officers, and management of the Company, (iii) provide directors,
consultants and advisors of the Company with an opportunity to acquire a
proprietary interest in the Company to encourage their continued provision of
services to the Company, and to provide such persons with incentives and rewards
for superior performance more directly linked to the profitability of the
Company's business and increases in shareholder value, and (iv) generally to
promote the success of the Company's business and the interests of the Company
and all of its stockholders, through the issuance of the Company’s common
shares.

     

    Incentive
benefits granted hereunder will be the Company’s common shares. The amount of
shares issued shall be determined by the board or the Compensation Committee and
reflected in the terms of written agreements.

    

    
      
        
        

      

      
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    SECTION
2

    DEFINITIONS

    

    2.1 Definitions. The
following terms will have the meanings set forth below:

    

    “Affiliated
Corporation” means any corporation or other entity (including, but
not limited to, a partnership) that is affiliated with the Company through stock
ownership or otherwise, and includes subsidiaries of the Company.

    

    “Board” means the Board
of Directors of the Company.

    

    “Code” means the
Internal Revenue Code of the U.S.A., as they may be amended form time to time,
and as appropriate to the context and as applies to the Eligible
Participant.

    

    “Effective Date” means
the effective date of the Plan, which will be upon approval of the
Board.

     

     

    “Eligible
Participant” means any employee (including, without limitation, any
officer), director, consultant or their designees and any other person or entity
whom the Board wishes to incite to contribute to the fortunes of the Company and
permitted by law or policy to receive Shares.

    

    “Non-Statutory
Share” means a Share issued under this Plan in accordance with the
requirements of the Code, as amended from time to time.

    

    “Plan Limit” shall have
the meaning set forth in section 4.1.

    

    “Share” or “Shares” shall mean the
Company's common shares, $0.001 par value per share, or, in the event that the
outstanding common shares are hereafter changed into or exchanged for different
shares of securities of the Company, such other shares or
securities.

    

    “Share Agreement” shall
mean an agreement that will be entered into by the Company and the Eligible
Participant to whom the Shares are issued and will contain terms and conditions
governing the issuance of the Shares.

    

    “Stockholder” means an
Eligible Participant designated by the Share Issuance Committee from time to
time during the term of the Plan to receive one or more Shares under the
Plan.

    

     “Share Issuance
Committee” means the Compensation Committee of the Company, unless
the Board strikes a separate committee, and in the absence of an empowered
committee shall mean the Board.

    

    “Stock” means the common
shares of the Company.

    

    2.2Gender and
Number.  Except where otherwise indicated by the context, the
masculine gender also will include the feminine gender, and the definition of
any term herein in the singular also will include the plural.

    

    
      
        
        

      

      
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    SECTION
3

    PLAN
ADMINISTRATION

    

    3.1Share Issuance
Committee.   The Share Issuance Committee will administer
the Plan.  In accordance with the provisions of the Plan, the Share
Issuance Committee will, in accordance with policies ordered by the Board but in
the absence of board direction in its sole discretion, select the Eligible
Participants to whom Shares will be issued, the amount of Shares to be issued,
and any other terms and conditions of each Share as the Share Issuance Committee
may deem necessary and consistent with the terms of the Plan.  The
Share Issuance Committee will determine the form or forms of the agreements with
Stockholders.  The agreements will evidence the particular provisions,
terms, conditions, rights and duties of the Company and the Stockholders with
respect to Shares issued pursuant to the Plan, which provisions need not be
identical except as may be provided herein.  The Share Issuance
Committee may from time to time adopt such rules and regulations for carrying
out the purposes of the Plan as it may deem proper and in the best interests of
the Company.  The Share Issuance Committee may correct any defect,
supply any omission or reconcile any inconsistency in the Plan or in any
agreement entered into hereunder in the manner and to the extent it may deem
expedient and it will be the sole and final judge of such
expediency.  No member of the Share Issuance Committee will be liable
for any action or determination made in good faith, and all members of the
Committee will, in addition to their rights as directors, be fully protected by
the Company with respect to any such action, determination or
interpretation.  The determinations, interpretations and other actions
of the Share Issuance Committee pursuant to the provisions of the Plan will be
binding and conclusive for all purposes and on all persons.

     

     

    SECTION
4

    STOCK
SUBJECT TO THE PLAN AND EXCEPTIONS

    

    4.1 Plan
limit.  A maximum of 5,000,000 Shares (“Plan Limit”) are authorized
for issuance under the Plan in accordance with the provisions of the
Plan.  Shares that are issued will be deducted from the Plan Limit and
such Plan Limit shall not be increased without approval of the board or, if
shareholders of the Company have so required, without approval of the
shareholders of the Company.  While any Shares are outstanding, the
Company will retain as authorized and unissued Stock at least the number of
Shares from time to time required under the provisions of the Plan or otherwise
assure itself of its ability to perform its obligations hereunder.

    

    4.2Unused and Forfeited
Stock.  Any Shares that are subject to this Plan that are not
used because the terms and conditions of the Share Agreement are not met or any
Shares that are used for full or partial payment of the purchase price of Shares
or any Shares retained by the Company for any purpose of this Plan automatically
will be returned to the Plan Limit and become available for again for use under
the Plan.

    

    4.3Adjustments for Stock Split,
Stock Dividend, Etc.  If the Company at any time increases or
decreases the number of its outstanding Shares of Stock, or changes in any way
the rights and privileges of such Shares by means of the Payment of a Stock
dividend or any other distribution upon such Shares payable in Stock, or through
a stock split, subdivision, consolidation, combination, reclassification or
recapitalization involving the Stock, then, in relation to the Stock that is
affected by the above events, the provisions of this Section 4.3 will
apply. 

     

    
      
        
        

      

      
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    In such
event, the numbers, rights and privileges of the following will be increased,
decreased or changed in like manner as if such shares had been issued and
outstanding, fully paid and non-assessable at the time of such
event.

    

    4.4General Adjustment
Rules.  If any adjustment or substitution provided for in this
Section 4 will result in the creation of a fractional Share, the number of
Shares will be rounded to the next higher Share.

    

    4.5 Determination by Share Issuance
Committee, Etc.  Adjustments under this Section 4 will be made
by the Share Issuance Committee, whose determinations with regard thereto will
be final and binding upon all parties.

    

    4.6 Shares Exceptional to
Plan.  With the concurrence of the Board, the Share Issuance
Committee may issue Shares outside the Plan or within the Plan but in excess of
the Plan Limit, such that the available Plan Limit is not diminished, for
exceptional circumstances or to acquire or retain personnel or achieve important
goals or strategic targets considered important to the Company but which cannot
reasonably be fit into the Plan Limit or the Plan due to insufficiency of
available Plan Shares, legal impediments whereby the recipient cannot or is best
not included in the Plan, or other purposes or reasons considered appropriate to
the Board.

    

    4.7 Limitations on
Issuance.  The Share Issuance Committee shall not, nor does it
have the authority to, issue any stock compensation under this Plan for service
related to investor relations or capital raising activities.

    

    SECTION
5

    REORGANIZATION
OR LIQUIDATION

    

    5.1 Reorganization and
Shares.   In the event that the Company is merged or
consolidated with another corporation (other than a merger or consolidation in
which the Company is the continuing corporation and that does not result in any
reclassification or change of outstanding Shares), or if all or substantially
all of the assets or control of the outstanding voting stock of the Company is
acquired by any other corporation, business entity or person (other than by a
sale or conveyance in which the Company continues as a holding company of an
entity or entities that conduct the business of businesses formerly conducted by
the Company), or in case of a reorganization (other than a reorganization under
the United States Bankruptcy Code) or liquidation of the Company, the Share
Issuance Committee will have the power and discretion to prescribe the terms and
conditions for the modification of any outstanding Shares issued
hereunder.  By way of illustration, and not by way of limitation, the
Share Issuance Committee may provide that such Shares will be exchanged or
converted into Shares of the surviving or acquiring corporation, or may provide
for a payment or distribution in respect of outstanding Shares in cancellation
thereof.  Any such determinations by the Share Issuance Committee may
be made generally with respect to all Stockholders, or may be made on a
case-by-case base with respect to particular
Stockholders.  

    
      
        
        

      

      
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    The
provisions of this Section 5 will not apply to any transaction undertaken for
the purpose of reincorporating the Company under the laws of another
jurisdiction, if such transaction does not materially affect the beneficial
ownership of the Company’s capital stock.  Any determination by the
Share Issuance Committee hereunder shall not amend the terms of any Share
without the consent of the Stockholder unless, in the opinion of the Committee
acting reasonably, such amendment is necessary to permit the alterations to the
Company to be effected and such is in the interest of shareholders
generally.

     

    SECTION
6

    STOCK
SHARES

    

    6.1 Issuance of
Shares.  An Eligible Participant may be issued one or more
Shares.

    

    6.2 Share
Agreements.  Each Share issued under the Plan will be evidenced
by a written Share Agreement that will be entered into by the Company and the
Eligible Participant to whom the Share is issued (the “Stockholder”), and will
be deemed to contain the following terms and conditions, unless other terms and
conditions inconsistent therewith have been entered into the Share
Agreement.  In the event of inconsistency between the provisions of
the Plan and any Share Agreement entered into, the provisions of the Share
Agreement will be considered to have been determined to be exceptional from the
belowmentioned terms and conditions and such Share Agreement shall govern where
not inconsistent with law.  However, the provisions of the Plan will
govern where the Share Agreement omits to provide for a matter governed by the
Plan and the Share Agreement will not be incomplete nor unenforceable if it
fails to provide for a matter provided by the terms of this Plan as such shall
be incorporated by reference:

    

    (a) Number of
Shares.  Each Share Agreement will state that it covers a
specified number of Shares, as determined by the Share Issuance Committee and
the Share Agreement.  If the Share Agreement fails to state the number
then it shall be the number set forth in the Corporate Resolution of the Share
Issuance Committee and approved by the Board of Directors.

    

    (b) Issuance
Period.  Each Share Agreement will state the time and the
amount of the Shares which shall be issued.  Unless otherwise provided
in the Share Agreement, Shares will vest immediately.

    

    (c) Date of
Issuance.  Shares will be considered as having been issued on
the date specified in the Issuance Resolution of the Share Issuance
Committee.

    

    6.3 Stockholder
Privileges.  Prior to the issuance of the Shares to the
Stockholder, the Stockholder will have no rights as a stockholder with respect
to any Shares issued to such person under this Plan and, until the Stockholder
becomes the holder of the record of such Stock, no adjustments, other than those
described in Section 4, will be made for dividends or other distributions or
other rights to which there is a record date preceding the date such Stockholder
becomes the holder of record of such Stock.

    

    
      
        
        

      

      
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    SECTION
7

    RIGHTS
OF EM

    PLOYEES
AND STOCKHOLDERS

    

    7.1
Employment.  Nothing contained in the Plan or in any Share
Agreement will confer upon any Eligible Participant any right with respect to
the continuation of employment by the Company, or interfere in any way with the
right of the Company, subject to the terms of any separate employment agreement
to the contrary, at any time to terminate such employment or to increase or
decrease the compensation of such Eligible Participant form the rate in
existence at the time of the issuance of Shares.

     

    SECTION
8

    GENERAL
RESTRICTIONS

    

    8.1 Investment
representations.  The Company may require any person to whom
Shares are issued to give written assurances, in substance and form satisfactory
to the Company and its counsel, to the effect that such person is acquiring the
Stock subject to the Share Agreement for his own account for investment and not
with any present intention of selling and to such other effects as the Company
deems necessary or appropriate in order to comply with federal and applicable
state and provincial securities laws.  Legends evidencing such
restrictions may be placed on the certificates evidencing the
Stock.

    

    8.2 Compliance with Securities
Laws.  Each Share Agreement will be subject to the requirement
that if at any time counsel to the Company determines that the listing,
registration or qualification of the Shares upon any securities exchange or
under any state, provincial or federal law, or the consent or approval of any
governmental or regulatory body, is necessary as a condition of, or in
connection with, the issuance of Shares thereunder, such Shares may not be
issued in whole or in part unless such listing, registration, qualification,
consent or approval will have been effected or obtained on conditions acceptable
to the Share Issuance Committee.  Nothing herein will be deemed to
require the Company to apply for or to obtain such listing, registration or
qualification.  However, where available to the circumstances of an
Stockholder the Company will include the Share with any other filings that the
Company elects, at its sole discretion, to file under Form S-8 or any other
filings with the SEC but the Company shall not be obliged to make an individual
filing for a particular Share, unless such shall have been required pursuant to
the specific Share Agreement.

    

    SECTION
9

    OTHER
EMPLOYEE BENEFITS

    

    9.1 Benefits and
Taxes.   The amount of any compensation deemed to be
received by a Stockholder as a result of a Share issuance will not constitute
“earnings” with respect to which any other employee benefits of such Stockholder
are determined, including, without limitation, benefits under any pension,
profit sharing, life insurance or salary continuation
plan.  

     

    
      
        
        

      

      
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    Any
taxable consequences of any Share issuance are entirely the responsibility of
the Stockholder and no contribution shall be required of the Company and,
further, if the Company should suffer liability for unpaid taxes of a
Stockholder then the full amount of such shall be a debt of the Stockholder to
the Company payable immediately and for which the Company may seek judgment and,
before judgment or process, may set-off against any amounts due to the
Stockholder or may recover, again before judgment or process, by exercise of
voiding the Share Issuance at the discretion of the Share Issuance
Committee.

    

    SECTION
10

    PLAN
AMENDMENT, MODIFICATION AND TERMINATION

    

    10.1 Amendment.   The
Board may at any time terminate and, from time to time, may amend or modify the
Plan provided, however, that no amendment or modification may become effective
without approval of the amendment or modification by the stockholders where
stockholder approval is required to enable the Plan to satisfy any applicable
statutory requirements, or if the Company, on the advice of counsel, determines
that stockholder approval otherwise is necessary or desirable.

     

    No
amendment, modification or termination of the Plan will in any manner adversely
affect any Shares theretofore issued under the Plan, without the consent of the
Stockholders holding such Shares.

     

    SECTION
11

    WITHHOLDING

    

    11.1 Withholding
Requirement.  The Company’s obligations to issue Shares will be
subject to the Stockholder’s satisfaction of all applicable federal, state and
local income and other tax withholding requirements and applicable securities
requirements.

    

    SECTION
12

    BROKERAGE
ARRANGEMENTS

    

    12.1 Brokerage.   The
Share Issuance Committee, in its discretion, may enter into arrangements with
one or more banks, brokers or other financial institutions to facilitate the
disposition of shares acquired upon, including, without limitation, sale of
acquired Shares

     

    SECTION
13

    NONEXCLUSIVITY
OF THE PLAN

    

    13.1 Other
Plans.   The adoption of this Plan by the Board will not
be construed as creating any limitations on the power or authority of the Board
to adopt such other or additional incentive or other compensation arrangements
of whatever nature as the Board may deem necessary or desirable or preclude or
limit the continuation of any other plan, practice or arrangement for the
payment of compensation or fringe benefits to employees generally, or to any
class or group of employees, or any other persons that the Company or any
Affiliated Corporation now has lawfully put into effect, including, without
limitation, any retirement, pension, savings and stock purchase plan, insurance,
death and disability benefits and executive short-term incentive
plans.

     

    
      
        
        

      

      
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    SECTION
14

    REQUIREMENTS
OF LAW

    

    14.1 Requirements of
Law.  The issuance of Stock and the payment of cash pursuant to
the Plan will be subject to all applicable laws, rules and
regulations.

    

    14.2    Governing Law.  The
Plan and all agreements hereunder will be construed in accordance with and
governed by the laws of the State of Wyoming.

     

    SECTION
15

    DURATION
OF THE PLAN

    

    15.1           Termination.   The
Plan will terminate at such time as may be determined by the Board, and no
Shares will be issued after such termination.  If not sooner
terminated under the preceding sentence, the Plan will fully cease and expire on
the date that the Plan Limit has been exhausted and all Shares
issued.

     
 

    

    
      
         

      

      
        8ex101.htm

    EXHIBIT
10.1

       

      Forbearance
Agreement

       

      This
Forbearance Agreement (herein, the “Agreement”) is made as of
this 29th day of December, 2009, by and among Champion Industries, Inc. (the “Borrower”) Mr. Marshall
Reynolds, individually (the “Shareholder”), 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.

       

      Recitals:

       

      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, supplemented and otherwise modified from
time to time, the “Credit
Agreement”).   

       

      B.The Borrower has informed the Administrative Agent and the
Lenders that it has failed to comply with Sections 6.20(a), 6.20(b), 6.20(c) and
6.20(d) of the
Credit Agreement as of January 31, 2009, April 30, 2009,
July 31, 2009 and October 31, 2009 (each such instance of
noncompliance being hereinafter referred to as an “Existing Default” and
collectively, the “Existing
Defaults”).

       

      C.The Lenders are not willing to waive the Existing
Defaults.

       

      D.The Borrower has advised the Lenders that it intends to continue
to reduce costs and take other steps to improve operations, and the Borrower has
requested that the Lenders temporarily forbear from exercising certain rights
and remedies under the Loan Documents in order to afford the Borrower the
opportunity to do so.

       

      E.In order to accommodate the Borrower’s request, during and only
during the period (the “Standstill Period”)
beginning on the date of this Agreement and ending on March 31, 2010
(the “Scheduled Standstill
Expiration Date”), the Required Lenders
are willing to temporarily forbear from exercising certain rights and remedies
available solely by reason of the Existing Defaults on the terms, conditions,
and provisions contained in this Agreement.

       

      F.Because of the Existing Defaults, the Administrative Agent,
acting at the direction of the Required Lenders, on December 7, 2009, suspended
the Borrower’s option to elect Eurodollar Loans and took $2 Million of cash
collateral from an account maintained by the Borrower at Fifth Third Bank and on
December 16, 2009, took an additional $1 Million of cash collateral
from the same account (the $3 Million aggregate cash collateral is collectively
referred to herein as the “Cash
Collateral”).  

       

      G.As a shareholder of the Borrower, and benefiting from the Credit
Agreement and the forbearance terms contained in this agreement, the Shareholder
is agreeable to executing and delivering this Agreement. 

       

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

       

      1.Incorporation
of Recitals; Defined Terms.  The Borrower and Shareholder
acknowledge that the Recitals set forth above are true and correct in all
material respects.  The defined terms in the Recitals set forth above
are hereby incorporated into this Agreement by reference.  All other
capitalized terms used herein without definition shall have the same meanings
herein as such terms have in the Credit Agreement. 

       

      2.Amounts
Owing.  The Borrower acknowledges and agrees that the principal
amount of Loans and Letters of Credit as of December 29, 2009, is
$66,157,937.87 ($56,632,442.00 in Term Loans, $8,725,495.87 in Revolving Loans,
$800,000.00 in Swing Loans, and $0.00 in Letters of Credit), and such amount
(together with interest and fees thereon) is justly and truly owing by the
Borrower without defense, offset or counterclaim.  

       

      3.Acknowledgment
of Default(s).  The Existing Defaults constitute Events of
Default under Section 7.1(b) of the Credit Agreement.  The Borrower
acknowledges that, because of the Existing Defaults, the Lenders are permitted
and entitled under Sections 7.2 and 9.3 of the Credit Agreement to decline
to provide further credit to the Borrower, to terminate the Commitments, to
accelerate the Obligations, to enforce Liens granted under the Collateral
Documents, and to exercise any other rights or remedies that may be available
under the Loan Documents or under applicable law.  The Borrower
represents to the Administrative Agent and Lenders that there are no Defaults or
Events of Default other than the Existing
Defaults.   

       

      4.Forbearance.  Without
limiting the right of the Administrative Agent under Section 2.2 of the Credit
Agreement, including without limitation, the right to establish reserves against
the Borrowing Base without prior notice to the Borrower because of the Existing
Defaults, unless and until a Standstill Termination occurs, the Lenders will not
accelerate the Obligations or enforce any of the Liens granted under the
Collateral Documents or, except as provided with respect to Section 2.2 of the
Credit Agreement and as expressly provided below herein, exercise any other
rights or remedies available solely by reason of the Existing Defaults.

       

      
        
          
          

        

        
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      5.Revolving
Credit.  During the Standstill Period, so long as the Borrower
has (and will continue to have after any request for credit) Excess Availability
equal to or greater than One Million and 00/100 Dollars ($1,000,000.00), the
Borrower may continue to request credit under the Revolving
Credit.  Any request for credit under the Revolving Credit during the
Standstill Period shall be subject to the satisfaction of the conditions
precedent set forth in Section 3.1 of the Credit Agreement, except to the extent
non-compliance with the conditions set forth therein relate solely to an
Existing Default. 

       

      6.Principal
Payments.  The Borrower shall continue to pay all principal on
the Loans and Reimbursement Obligations on all Letters of Credit as and under
the Credit Agreement when due, including, without limitation, all scheduled
payments of principal on the Term Loans.

       

      7.Interest and
Fee Payments.  The Borrower will keep interest and fees current
on the Loans and payable at the default rate pursuant to Section 2.4(c) of the
Credit Agreement.  The Borrower agrees that no new Eurodollar Loans
may be created and any outstanding Eurodollar Loans shall be converted into Base
Rate Loans at the expiration of the relevant Interest Periods.

       

      8.Prepayment
Contribution.  The Shareholder and the Borrower acknowledge and
agree that the Shareholder delivered $3,000,000.00 to the Administrative Agent
on or about October 30, 2009 (the “Prepayment Contribution”);
and the Borrower, the Shareholder and the Lenders agree that the Prepayment
Contribution constitutes cash equity contributed to the Borrower in exchange for
common stock issued by the Borrower or, notwithstanding anything to the contrary
in Section 6.11 of the Credit Agreement, upon execution and delivery by the
Shareholder of a subordination agreement to the Administrative Agent acceptable
to the Administrative Agent in form and substance (which agreement shall, among
other things, subordinate the Prepayment Contribution to the right in payment in
full of the Obligations, Hedging Liability and Funds Transfer and Deposit
Account Liability and prohibit any payment of principal or cash interest on the
Prepayment Contribution until payment in full of the Obligations), the
Prepayment Contribution shall constitute subordinated unsecured Indebtedness
owed by the Borrower to the Shareholder that is permitted under Section 6.11 of
the Credit Agreement.

       

      9.Additional
Agreements. The Borrower further agrees that:

       

      (a)The Borrower shall (i) concurrently with the delivery of the
statements required by Section 11 hereof, deliver the same statements to Duff
& Phelps, (ii) engage Duff & Phelps to update its previously
delivered report on the financial condition and expected financial performance
of the Borrower and its Subsidiaries and (iii) cause Duff & Phelps
to deliver a copy of such updated report to the Administrative Agent on or
before January 29, 2010. 

       

      (b)The Borrower agrees that it shall not, nor shall it permit any
Subsidiary to, issue, incur, assume, create or have outstanding any new
Indebtedness other than that which is (i) outstanding on the date hereof, (ii)
approved in writing by the Administrative Agent in its sole discretion, or (iii)
incurred to finance Capital Expenditures to the extent permitted by Sections
6.11 and 6.20(d) of the Credit Agreement.

       

      (c) The Borrower agrees that it will not make any Restricted
Payments.  

       

      (d)Notwithstanding anything in Section 6.22 of the Credit Agreement
to the contrary, the Borrower shall maintain a concentration account with the
Administrative Agent with a balance of at least Seven Hundred Fifty Thousand and
00/100 Dollars ($750,000.00) at all times.  

       

      (e)The Borrower acknowledges and agrees that field audits,
inspections, and appraisals of the Collateral may be conducted at any time and
from time to time as the Administrative Agent or the Required Lenders may
require; and the Borrower agrees to cooperate in connection with each such
audit, inspection or appraisal.  The Borrower acknowledges and agrees
that the costs of each such field audit, inspection and appraisal shall be at
the Borrower’s expense.

       

      (f)On or prior to the date hereof, but after giving effect hereto,
including Section 8 hereof, the Borrower shall have reduced the outstanding Term
Loans minus cash
collateral for such Term Loans held by the Administrative Agent for application
to the Term Loans in accordance with Section 10 hereof, to an amount equal to or
less than $49,632,442.00.  

       

      (g)The Borrower agrees that it has substantial Eurodollar Loans
outstanding on the date hereof and that the Administrative Agent may, in its
sole discretion but without obligation, hold cash proceeds and cash payments
received from the Borrower as collateral to reduce outstanding Obligations after
such Eurodollar Loans convert to Base Rate Loans.

       

      10.Application of
Cash Collateral and Prepayment Contribution.  Notwithstanding
anything in the Credit Agreement to the contrary, including, without limitation,
Sections 2.8 and 2.9 thereof, the Borrower and the Lenders agree that
Administrative Agent shall apply the Cash Collateral and the Prepayment
Contribution to payment of the Term Loans in the inverse order of maturity
thereof.

       

       

      
        
          
          

        

        
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      11.Delivery of
Information.  On or before January 8, 2010, the
Borrower shall deliver to the Administrative Agent, each in form and with detail
acceptable to the Administrative Agent:  (i) a 1-year business
plan for the Borrower’s fiscal year ending on or about
October 31, 2010 including a month-by-month statement of Availability,
a full set of monthly detailed financial statements, including, without
limitation, an income statement, balance sheet and statement of cash flows and a
statement of all key assumptions for the Borrower and its Subsidiaries, which
shall include an express detailed statement of projected expense reductions,
including cash and non-cash restructuring charges, and the timing therefore,
(ii) a detailed month-to-month statement of actual expense cuts made by the
Borrower and its Subsidiaries for the period from October 31, 2008 through the
date hereof, and (iii) a schedule showing on a month-to-month basis from
October 31, 2008 through October 31, 2010, the number of people
employed by and projected to be employed by the Borrower and its Subsidiaries
(showing the number of people employed by each entity, and each division thereof
to the extent applicable, for each respective month).

       

      12.Standstill
Termination.  As used in this Agreement, “Standstill Termination”
shall mean the occurrence of the Scheduled Standstill Expiration Date, or, if
earlier, the occurrence of any one or more of the following events: (a) any
Default or Event of Default under the Credit Agreement, in each case other than
the Existing Defaults; (b) any failure by the Borrower for any reason to
comply with any term, condition, or provision contained in this Agreement;
(c) any representation made by the Borrower in this Agreement or pursuant
to it proves to be incorrect or misleading in any material respect when made; or
(d) any Material Adverse Effect shall occur as determined in good faith by
the Administrative Agent or the Required Lenders.  The occurrence of
any Standstill Termination shall be deemed an Event of Default under the Credit
Agreement.  Upon the occurrence of a Standstill Termination, the
Standstill Period is automatically terminated and the Lenders are then permitted
and entitled under Sections 3.1, 7.2, 7.3 and 7.4 of the Credit Agreement,
among other things, to decline to provide additional credit to the Borrower, to
permanently terminate the Commitments, to accelerate the Obligations, to require
cash collateral for undrawn Letters of Credit and to exercise any other rights
and remedies that may be available under the Loan Documents or applicable
law.

       

      13.No Waiver and
Reservation of Rights.  The Borrower acknowledges that the
Lenders are not waiving the Existing Defaults, but are simply agreeing to
forbear from exercising their rights with respect to the Existing Defaults to
the extent expressly set forth in this Agreement.  Without limiting
the generality of the foregoing, the Borrower acknowledges and agrees that
immediately upon expiration of the Standstill Period, the Administrative Agent
and the Lenders have all of their rights and remedies with respect to the
Existing Defaults to the same extent, and with the same force and effect, as if
the forbearance had not occurred.  The Borrower will not assert and
hereby forever waives any right to assert that the Administrative Agent or the
Lenders are obligated in any way to continue beyond the Standstill Period to
forbear from enforcing their rights or remedies or that the Administrative Agent
and the Lenders are not entitled to act on the Existing Defaults after the
occurrence of a Standstill Termination as if such default had just occurred and
the Standstill Period had never existed.  The Borrower acknowledges
that the Lenders have made no representations as to what actions, if any, the
Lenders will take after the Standstill Period or upon the occurrence of any
Standstill Termination, a Default or Event of Default, and the Lenders and the
Administrative Agent must and do hereby specifically reserve any and all rights,
remedies, and claims they have (after giving effect hereto) with respect to the
Existing Defaults and each other Default or Event of Default that may
occur.  

       

      14.Acknowledgement
of Liens.  The Borrower hereby acknowledges and agrees that the
Obligations owing to the Administrative Agent and the Lenders arising out of or
in any manner relating to the Loan Documents, as well as all Hedging
Liability and Funds Transfer and Deposit Account Liability, shall continue to be
secured by Liens on all assets and property of the Borrower and its
Subsidiaries, including, without limitation, all accounts, chattel paper,
instruments, documents, general intangibles, investment property, deposit
accounts, inventory, equipment, fixtures, and certain other assets and
properties of the Borrower and its Subsidiaries pursuant to the Loan Documents
heretofore executed and delivered by the Borrower and its Subsidiaries, and nothing herein
contained shall in any manner affect or impair the priority of the Liens created
and provided for thereby as to the indebtedness, obligations, and liabilities
which would be secured thereby prior to giving effect to this Agreement.

       

      15.Release.  For value
received, including without limitation, the agreements of the Lenders in this
Agreement, the Shareholder, the Borrower and its Subsidiaries hereby release the
Administrative Agent and each Lender, its current and former shareholders,
directors, officers, Administrative Agents, employees, attorneys, consultants,
and professional advisors (collectively, the “Released Parties”) of and
from any and all demands, actions, causes of action, suits, controversies, acts
and omissions, liabilities, and other claims of every kind or nature whatsoever,
both in law and in equity, known or unknown, which all of the Shareholder, the
Borrower and the Subsidiaries has or ever had against the Released Parties prior
to, through, and including this date, including, without limitation, those
arising out of the existing financing arrangements between the Borrower and the
Lenders, and all of the Shareholder, the Borrower and the Subsidiaries further
acknowledge that, as of the date hereof, they do not have any counterclaim,
set-off, or defense against the Released Parties, each of which the Shareholder,
the Borrower and the Subsidiaries hereby expressly waives.

       

      16.Loan Documents
Remain Effective.  Except as expressly set forth in this
Agreement, the Loan Documents and all of the obligations of the Borrower
thereunder, the rights and benefits of the Administrative Agent and Lenders
thereunder, and the Liens created thereby remain in full force and
effect.  Without limiting the foregoing, the Borrower agrees to comply
with all of the terms, conditions, and provisions of the Loan Documents except
to the extent such compliance is irreconcilably inconsistent with the express
provisions of this Agreement.  This Agreement and the Loan Documents
are intended by the Lenders as a final expression of their agreement and are
intended as a complete and exclusive statement of the terms and conditions of
that agreement.

       

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      17.Fees and
Expenses.  The Borrower hereby agrees to pay to the
Administrative Agent for the benefit of the Lenders party to this Agreement
according to their Percentages a non-refundable forbearance fee of $100,000.00
upon closing of this Agreement.  The Borrower shall also pay on demand
all fees and expenses (including attorneys’ fees and expenses and financial
advisors’ fees and expenses) incurred by the Administrative Agent and its
counsel in connection with this Agreement and the other instruments and
documents being executed and delivered in connection herewith and the
transactions contemplated hereby (the Borrower acknowledges that it will receive
summary invoice(s) reflecting only the total amount then due and that such
summary invoice(s) will not contain any narrative description of the services
provided, and that delivery of such summary invoice(s) shall not in any way
constitute a waiver of any right or privilege of the Administrative Agent and
the Lenders associated with such invoice(s)).

       

      18.Conditions
Precedent.  The effectiveness of this Agreement is subject to
the satisfaction of the following conditions precedent (the date upon which the
following conditions have been satisfied being referred to herein as the “Forbearance Effective
Date”):  

       

      (a)the Borrower, the Administrative Agent, and the Required Lenders
shall have executed and delivered this Agreement on or before the close
of business on December 29, 2009.

       

      (b)the payment of the forbearance fee and current legal,
professional and financial advisory, and other fees and expenses referred to in
Section 15 above.

       

      19.Miscellaneous.  By
its acceptance hereof, the Borrower hereby represents that it has the necessary
power and authority to execute, deliver, and perform the undertakings contained
herein, and that this Agreement constitutes the valid and binding obligation of
the Borrower enforceable against it in accordance with its terms.  Any
provision of this Agreement held invalid, illegal, or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality, or unenforceability without affecting the validity,
legality, and enforceability of the remaining provision hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.  The parties
hereto hereby acknowledge and agree that this Agreement shall constitute a Loan
Document for all purposes of the Credit Agreement and the other Loan
Documents.  Unless otherwise expressly stated herein, the provisions
of this Agreement shall survive the termination of the Standstill
Period.  This Agreement may be executed in counterparts and by
different parties on separate counterpart signature pages, each of which
constitutes an original and all of which taken together constitute one and the
same instrument.  Delivery of executed counterparts of this Agreement
by telecopy shall be effective as an original.  This Agreement shall
be governed by Ohio law and shall be governed and interpreted on the same basis
as the Credit Agreement.

       

      [Signature
Pages to Follow]

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      

       

      This
Forbearance Agreement is entered into as of the date and year first above
written. 

       

                       

      
        	 "Borrower"	 
	 	 	 
	 Champion
      Industries, Inc	 
	 	 	 
	 By  	 /s/ Todd R.
      Fry	 
	 Name
       	 Todd R.
      Fry 	 
	 Title  
      	 Senior Vice
      President and Chief Financial Officer 	 
	 	 	 
	 "Shareholder"	 
	 	 	 
	 By  	 /s/
       Marshall T. Reynolds	 
	 	 Mr.
      Marshall Reynolds, individually

      

       

       

       

       

      
        
          
            [Signature
Page to Forbearance Agreement]

            

          

           

        

        
          5

          
            

          

        

        
           

        

      

       

       

      
        	"Required
      Lenders"	 
	 	 	 
	 Fifth
      Third Bank, an
      Ohio banking corporation, as a Lender, as L/C Issuer, and as
      Administrative Agent	 
	 	 	 
	 	 	 
	 By  
      	 /s/ Paul R.
      Schubert	 
	 Name  
      	 Paul R. Schubert	 
	 Title
        	 Vice
      President	 

      

       

       

       

       

       

      

        
          
            
              [Signature
Page to Forbearance Agreement]

              

            

             

          

          
            6

            
              

            

          

          
             

          

        

      
      

       

      
        	
                The
      Huntington National Bank

              	 
	 	 	 
	 	 	 
	 By 	 /s/ Bruce G.
      Shearer	 
	 Name
       	 Bruce G.
      Shearer	 
	 Title  	 Senior Vice
      President	 

      

       

      
      

       

      
 

      
        
          
            [Signature
Page to Forbearance Agreement]

            

          

           

        

        
          7

          
            

          

        

        
           

        

      

      

       

      

        
        

         

        
          	
                  Integra
      Bank N.A.

                	 
	 	 	 
	 	 	 
	 By 	 /s/ Chris E.
      Rutledge	 
	 Name
       	 Chris E.
      Rutledge	 
	 Title  	 Senior Vice
      President	 

        

         

        
        

         

        
 

        
          
            
              [Signature
Page to Forbearance Agreement]

              

            

             

          

          
            8

            
              

            

          

          
             

          

        

      

      

        
        

         

        
          	
                  Summit
      Community Bank

                	 
	 	 	 
	 	 	 
	 By 	 /s/ Jason
      Koontz	 
	 Name
       	 Jason
      Koontz	 
	 Title  	 Senior Vice
      President	 

        

         

        
        

         

        
 

        
          
            
              [Signature
Page to Forbearance Agreement]

              

            

             

          

          
            9

            
              

            

          

          
             

          

        

      

      

        
        

         

        
          	
                  SunTrust
      Bank

                	 
	 	 	 
	 	 	 
	 By 	 /s/ Kip
      Hurd	 
	 Name
       	 Kip
    Hurd	 
	 Title  	 First Vice
      President	 

        

         

        
        

         

        
 

        
          
            
              [Signature
Page to Forbearance Agreement]

              

            

             

          

          
            10

            
              

            

          

          
             

          

        

      

      

        
        

         

        
          	
                  United
      Bank, Inc.

                	 
	 	 	 
	 	 	 
	 By 	 /s/ Linda J.
      Pleasants	 
	 Name
       	 Linda J.
      Pleasants	 
	 Title  	 Vice
      President	 

        

         

        
        

         

        
 

        
          
            
              [Signature
Page to Forbearance Agreement]

              

            

             

          

          
            11

            
              

            

          

          
             

          

        

      

      Reaffirmation,
Consent and Joinder

       

      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 Forbearance Agreement as set forth
above, joins such agreement with respect to Paragraph 13 thereof, 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 Forbearance 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 joinder and assurances
provided herein in entering into the Forbearance Agreement set forth
above.

       

      Dated as
of:  December 29, 2009

       

      

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

                
	 
      	
                  Stationers,
      Inc., a West Virginia corporation

                
	 
      	
                  Bourque
      Printing, Inc., a Louisiana corporation

                
	 
      	
                  Dallas
      Printing Company, Inc., a Mississippi corporation

                
	 
      	
                  Carolina
      Cut Sheets, Inc., a West Virginia corporation

                
	 
      	
                  Donihe
      Graphics, Inc., a Tennessee corporation

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

                
	 
      	
                  The
      Merten Company, an Ohio corporation

                
	 
      	
                  Interform
      Corporation, a Pennsylvania corporation

                
	 
      	
                  CHMP
      Leasing, Inc., a West Virginia corporation

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

                
	 
      	
                  Capitol
      Business Equipment, Inc., a West Virginia corporation

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

                
	 
      	
                  Independent
      Printing Service, Inc., an Indiana corporation

                
	 
      	
                  Diez
      Business Machines, Inc., a Louisiana corporation

                
	 
      	
                  Transdata
      Systems, Inc., a Louisiana corporation

                
	 
      	
                  Syscan
      Corporation, a West Virginia corporation

                
	 
      	
                  Champion
      Publishing, Inc., a West Virginia corporation

                
	 
      	 
      
	
                   
      By  

                	 /s/
      Todd R. Fry
	 
      	
                  Name:
      Todd R. Fry

                
	 
      	
                  Title:  Senior
      Vice President and Chief Financial
Officer

                

        

      

       

       

      
12

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