Champion Industries Inc.'s term loan facilities and $10,000,000 revolving credit facility with a syndicate of banks contain restrictive financial covenants requiring the company to maintain certain financial ratios.  In a letter dated March 22, 2013, received March 25, 2013, Fifth Third Bank, the Administrative Agent under the Restated Credit Agreement, sent the company a Notice of Default and Reservation of Rights, advising that the company is in default under provisions of the Credit Agreement requiring it to maintain certain financial ratios. The default relates to Section 7.1(b) for noncompliance with the minimum EBITDA covenant, set forth in Section 6.20(d) of the Restated Credit Agreement. The Notice of Default advises the company and its subsidiaries that at this time, neither the Existing Defaults nor any other rights, remedies, claims and causes or action are being waived by the Lender Parties, and the Lender Parties have not determined what actions they will take with respect to the Existing Defaults; however, the Lender Parties expressly reserve all rights and remedies available to them under the Restated Credit Agreement and the other Loan Documents, at law and in equity, including, without limitation, the right to cease making advances of Revolving Loans, cease issuing new letters of Credit, and terminate the remaining Commitments, the right to accelerate and therefore make the Obligations immediately due and payable at any time, and such other rights and remedies in respect of the Loan Parties, third parties and all personal property given as collateral by any of such Persons, including, without limitation, any Lender Party's right of setoff.

The notice of default advises that neither it nor anything contained in it will constitute, or be deemed to be, a waiver of any event of Default, whether past, present, or future, a modification or amendment of the Loan Documents, or any commitment by the Lender Parties to extend any loans, financial accommodations, or forbearances to any of the Loan Parties.