**PROMISSORY      NOTE**

| Principal$1,200,000.00 | Loan                Date07-28-2006 | Maturity07-28-2011 | Loan                No.6010040275500005 | Call                / Coll25 | Account | Officer906 | Initials |
|------------------------|------------------------------------|--------------------|-----------------------------------------|------------------------------|---------|------------|----------|

**Borrower:**
**CHAMPION      INDUSTRIES, INC. (TIN: 55-0717455)**

**P.O.      BOX 2968**

**HUNTINGTON.      WV 25728-2968**

**Lender:**

**COMMUNITY      TRUST BANK, INC.**

**COMMERCIAL      LENDING (PIKEVILLE MAIN)**

**346      NORTH MAYO TRAIL**

**P.O.      BOX 2947**

**PIKEVILLE,      KY 41502-2947**

**Principal      Amount: $1,200,000.00**
**Initial      Rate: 8.250%**
**Date      of Note: July 28, 2006**

**PROMISE      TO PAY. CHAMPION INDUSTRIES INC ("Borrower") promises to pay to COMMUNITY TRUST      BANK, INC. ("Lender"), or order, In lawful money of the United States of      America, the principal amount of One Million Two Hundred Thousand & 00/100      Dollars ($1,200,000.00), together with interest on the unpaid principal balance      from July 28, 2006 until paid in full.**

**PAYMENT.      Subject to any payment changes resulting form changes in the index, Borrower      will pay this loan in 60 payments of $24,549.14 each payment. Borrower’s first      payment is due August 28, 2006, and all subsequent payments are due on the      same      day of each month after that. Borrower’s final payment will be due on July 28,      2011, and will be for all principal and all accrued interest not yet paid.      Payments include principal and interest. Unless otherwise agreed or required      by      applicable law, payments will be applied first to any accrued unpaid interest;      then to principal; then to any unpaid collection costs; then to any late      charges. The annual interest rate for the Note is computed on a 365/360 basis;      that is, by applying the ratio of annual interest rate over a year of 360 days,      multiplied by the outstanding principal balance, multiplied by the actual number      of days the principal balance is outstanding. Borrower will pay Lender at      Lender's address shown above or at such other place as Lender may designate      in      writing.**

**VARIABLE      INTEREST RATE. **
**The      Index currently is 8.250% per annum.**
** **

**PREPAYMENT.      **

**LATE      CHARGE.**
**5.000%      of the regularly scheduled payment. **

**INTEREST      AFTER DEFAULT. **

**DEFAULT.**

**Payment      Default**

**Other      Defaults**

**Default      in favor of third parties- **

**False      Statements**

**Insolvency-**

**Creditor      or Forfeiture Proceedings. **

**Events      Affecting Guarantor- **

**Change      in Ownership- **

**Adverse      Change- **

**Insecurity-      **

**Cure      Provisions - **

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**Page      2**

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**PROMISSORY      NOTE (Continued)**

**Loan      No: 6010040275500005**

**LENDER’S      RIGHTS.**

**ATTORNEYS’      FEES; EXPENSES.**

**JURY      WAIVER. Lender and Borrower hereby waive the right to any jury trial in any      action, proceeding, or counterclaim brought by either Lender or Borrower against      the other. **

**GOVERNING      LAW. This Note will be governed by Federal law applicable to the Lender and,      to      the extent not preempted by federal law, the laws of the Commonwealth of      Kentucky without regard to its conflicts of law provisions. This Note has been      accepted by the Lender in the Commonwealth of Kentucky. **

**CHOICE      OF VENUE.**
** **

**DISHONORED      ITEM FEE.**

**RIGHT      OF SETOFF.**

**COLLATERAL.**

**INTEREST      INCREASE. **

**SUCCESSOR      INTERESTS.**

**GENERAL      PROVISIONS.**

**WEST      VIRGINIA INSURANCE NOTICE.**
**Unless      Borrower provides Lender with evidence of the Insurance coverage required by      Borrower’s agreement with Lender, Lender may purchase insurance at Borrower’s      expense to protect Lender’s interest in the collateral. This insurance may, but      need not, protect Borrower’s interests. The coverage that Lender purchases may      not pay any claim that Borrower makes or any claim that is made against Borrower      in connection with the collateral. Borrower may later cancel any insurance      purchased by Lender, but only after providing Lender with evidence that Borrower      has obtained insurance as required by their agreement. If Lender purchases      insurance for the collateral, Borrower will be responsible for the cost of      the      that insurance, including interest and any other charges Lender may impose      in      connection with the placement of the insurance, until the effective date of      the      cancellation or expiration of the insurance. The costs of the insurance may      be      added to Borrower’s total outstanding balance or obligation. The costs of the      insurance may be more than the cost of insurance Borrower may be able to obtain      on Borrower’s own. **

**PRIOR      TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS      NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS, BORROWER AGREES TO TERMS      OF THIS NOTE. **

**BORROWER      ACKNOWLEDTGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY      NOTE.**

**BORROWER:**

**CHAMPION      INDUSTRIES, INC.**

**By:      **
**_________________________________________      **

** **
**      TONEY K. ADKINS, PRESIDENT OF CHAMPION**

**INDUSTRIES,      INC. **

**LENDER:**

**COMMUNITY      TRUST BANK, INC. **

**X__________________________________________**

** **
**AUTHORIZED      SIGNER**

**COMMERCIAL      SECURITY AGREEMENT**

| Principal$1,200,000.00 | Loan                Date07-28-2006 | Maturity07-28-2011 | Loan                No.6010040275500005 | Call                / Coll25 | Account | Officer906 | Initials |
|------------------------|------------------------------------|--------------------|-----------------------------------------|------------------------------|---------|------------|----------|

**Borrower:**
**CHAMPION      INDUSTRIES, INC. (TIN: 55-0717455)**

**P.O.      BOX 2968**

**HUNTINGTON.      WV 25728-2968**

**Lender:**

**COMMUNITY      TRUST BANK, INC.**

**COMMERCIAL      LENDING (PIKEVILLE MAIN)**

**346      NORTH MAYO TRAIL**

**P.O.      BOX 2947**

**PIKEVILLE,      KY 41502-2947**

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**THIS      COMMERCIAL SECURITY AGREEMENT dated July 28, 2006, is made and executed between      CHAMPION INDUSTRIES INC ("Grantor") and COMMUNITY TRUST BANK, INC.      ("Lender").**

**GRANT      OF SECURITY INTEREST. For valuable consideration, Grantor grants to Lender      a      security interest in the Collateral to secure the Indebtedness and agrees that      Lender shall have the rights stated in this Agreement with respect to the      Collateral, in addition to all other rights which Lender may have by      law.**

**COLLATERAL      DESCRIPTION.**

**Purchase      Money Security Interest in (1) HEIDELBERG COLOR PRINGTING PRESS SM 74-6-P +      L      S/N 627630 WITH THE FOLLOWING ATTACHMENTS (1) DOM.ACC.HEAD FOR      M8023V000/SUVAM7012V00, (1) S/W LICENSE PRE.INTERF. 74 VERSION S/N 12530 14566A      AND (1) PRINECT PREPRESS INTERFACE OHNE LAUFWERK.**

**RIGHT      OF SETOFF.**

**GRANTOR'S      REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE      COLLATERAL.**

**Perfection      of Security Interest.**

**Notices      to Lender.**

**No      Violation.**

**Enforceability      of Collateral.**

**Location      of the Collateral.**

**Removal      of the Collateral. **

**Transactions      Involving Collateral.**

**Title.**

**Repairs      and Maintenance.**

**Inspection      of Collateral.**

**Taxes,      Assessments and Liens.**

**Loan      No: **

**COMMERCIAL      SECURITY AGREEMENT (Continued)**

**Page      2**

**Compliance      with Governmental Requirements.**

**Hazardous      Substances.**

**Maintenance      of Casualty Insurance.**

**Application      of Insurance Proceeds.**

**Insurance      Reserves.**

**Insurance      Reports.**

**Financing      Statements.**

**GRANTOR'S      RIGHT TO POSSESSION. **

**LENDER'S      EXPENDITURES.**

**DEFAULT.      **

**Payment      Default. **

**Other      Defaults**

**Default      in Favor of Third Parties.**

**False      Statements.**

**Defective      Collateralization.**

**Insolvency.      **

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**Loan      No: **

**COMMERCIAL      SECURITY AGREEMENT (Continued)**

**Page      3**

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**Creditor      or Forfeiture Proceedings.**

**Events      Affecting Guarantor.**

**Adverse      Change.**

**Insecurity.**

**Cure      Provisions.**

**RIGHTS      AND REMEDIES ON DEFAULT.**

**Accelerate      Indebtedness.**

**Assemble      Collateral.**

**Sell      the Collateral.**

**Appoint      Receiver.**

**Collect      Revenues, Apply Accounts.**

**Obtain      Deficiency.**

**Other      Rights and Remedies.**

**Election      of Remedies.**

**MISCELLANEOUS      PROVISIONS.**

**Amendments.      **

**Attorneys'      Fees; Expenses.**

**Caption      Headings. **

**Governing**
** **
**Law.      With respect to procedural matters related to the perfection and enforcement      of      Lender’s rights against the Collateral, this Agreement will be governed by      federal law applicable to Lender and to the extent not preempted by federal      law,      the laws of the State of West Virginia. In all other respects, this Agreement      will be governed by the federal law applicable to Lender and, to the extent      not      preempted by federal law, the laws of the Commonwealth of Kentucky without      regard to its conflicts of law provisions. However, if there ever is a question      about whether any provision of this Agreement is valid or enforceable, the      provision that is questioned will be governed by whichever state or federal      law      would find the provision to be valid and enforceable. The loan transaction      that      is evidenced by the Note and this Agreement has been applied for, considered,      approved and made, and all necessary loan documents have been accepted by Lender      in the Commonwealth of Kentucky. **

**Choice      of Venue. **

**COMMERCIAL      SECURITY AGREEMENT**
**(Continued)**

**Loan      No: **

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**Page      4**

**Notices.      **

**Power      of Attorney.**

**Severability.**

**Successors      and Assigns.**

**Survival      of Representations and Warranties.**

**Time      is of the Essence.**

**Waive      Jury.**

**DEFINITIONS.**

**Agreement.      **

**Borrower.      **

**Collateral.**

**Default.      **

**Environmental      Laws. **

**Event      of Default. **

**Grantor.**

**Guaranty.**

**Hazardous      Substances.**

**ndebtedness.**

**Lender.**

**Property.**

**Related      Documents. **

**GRANTOR      HAS READ AND UNDERSTOOD All THE PROVISIONS OF THIS COMMERCIAL SECURITY AGREEMENT      AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JULY 28,      2006.**

**GRANTOR:**

**CHAMPION      INDUSTRIES, INC.**

**By:**

**TONEY      K. ADKINS, President of CHAMPION INDUSTRIES, INC.**

**X**

** **
**AUTHORIZED      SIGNER**

**COMMUNITY      TRUST BANK, INC.**

**No      Waiver by Lender.**

**COMMUNITY      TRUST BANK, INC.**

**COMMERCIAL      LENDING (PIKEVILLE MAIN)**

**346      NORTH MAYO TRAIL**

**P.O.      BOX 2947**

**PIKEVILLE,      KY 41502-2947**

**Lender:**

**Borrower:**
**CHAMPION      INDUSTRIES, INC. (TIN: 55-0717455)**

**P.O.      BOX 2968**

**HUNTINGTON.      WV 25728-2968**

**AGREEMENT      TO PROVIDE INSURANCE**

| Principal$1,200,000.00 | Loan                Date07-28-2006 | Maturity07-28-2011 | Loan                No.6010040275500005 | Call                / Coll25 | Account | Officer906 | Initials |
|------------------------|------------------------------------|--------------------|-----------------------------------------|------------------------------|---------|------------|----------|

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**INSURANCE      REQUIREMENTS.**

**Collateral:**
**HEIDELBERG      COLOR PRINTING PRESS SM 74-6-P + L S/N 327630 WITH THE FOLLOWING ATTACHMENTS      (1)      DOM.ACC.HEAD FOR M7012V000/SUVAM7012V00, (1) S/W LICENSE PRE.INTERF. 74 VERSION      S/N 12530 14566A AND (1) PRINECT PRE-PRESS INTERFACE      LAUFWERK.**

**Type:**

**Amount:**

**Basis:**

**Endorsements:**

**Deductibles:**

**Latest      Delivery Date:**

**INSURANCE      COMPANY.**

**FAILURE      TO PROVIDE INSURANCE.**
**UNLESS      GRANTOR PROVIDES LENDER WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY      GRANTOR'S AGREEMENT WITH LENDER, LENDER MAY PURCHASE INSURANCE AT GRANTOR'S      EXPENSE TO PROTECT LENDER'S INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY,      BUT      NEED NOT, PROTECT GRANTOR'S INTERESTS. THE COVERAGE THAT LENDER PURCHASES MAY      NOT PAY ANY CLAIM THAT GRANTOR MAKES, OR ANY CLAIM THAT IS MADE AGAINST GRANTOR      IN CONNECTION WITH THE COLLATERAL. GRANTOR MAY LATER CANCEL ANY INSURANCE      PURCHASED BY LENDER, BUT ONLY AFTER PROVIDING LENDER WITH EVIDENCE THAT GRANTOR      HAS OBTAINED INSURANCE AS REQUIRED BY THEIR AGREEMENT. IF LENDER PURCHASES      INSURANCE FOR THE COLLATERAL, GRANTOR WILL BE RESPONSIBLE FOR THE COSTS OF      THAT      INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES LENDER MAY IMPOSE IN      CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF      THE      CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY      BE      ADDED TO GRANTOR'S TOTAL OUTSTANDING BALANCE OR OBLIGATION. THE COSTS OF THE      INSURANCE MAY BE MORE THAN THE COST OF INSURANCE GRANTOR MAY BE ABLE TO OBTAIN      ON GRANTOR'S OWN.**

**AUTHORIZATION.**

**GRANTOR      ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE      INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED JULY 28,      2006.**

**CHAMPION      INDUSTRIES, INC.**

**By:**

**TONEY      K. ADKINS, President of CHAMPION INDUSTRIES, INC.**

**GRANTOR:**

**AGREEMENT      TO PROVIDE INSURANCE**

**Page      2**

**Loan      No: **

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**(Continued)**

**FOR        LENDER USE ONLY**

**NOTICE      OF FINAL AGREEMENT**

| Principal$1,200,000.00 | Loan                Date07-28-2006 | Maturity07-28-2011 | Loan                No.6010040275500005 | Call                / Coll25 | Account | Officer906 | Initials |
|------------------------|------------------------------------|--------------------|-----------------------------------------|------------------------------|---------|------------|----------|

**Borrower:**
**CHAMPION      INDUSTRIES, INC. (TIN: 55-0717455)**

**P.O.      BOX 2968**

**HUNTINGTON.      WV 25728-2968**

**COMMUNITY      TRUST BANK, INC.**

**COMMERCIAL      LENDING (PIKEVILLE MAIN)**

**346      NORTH MAYO TRAIL**

**P.O.      BOX 2947**

**PIKEVILLE,      KY 41502-2947**

**Lender:**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| **BY                SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A)                THE                WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE                PARTIES,                (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND                (C)                THE WRITTEN LOAN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF                ANY                PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS                OF                THE PARTIES.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **As                used in this Notice, the following terms have the following                meanings**:**Loan.**                The term "Loan" means the following described loan: a Variable Rate                Nondisclosable Loan to a Corporation for $1,200,000.00 due on July                28,                2011. The reference rate (Highest Prime Rate most recently published                in                “The Wall Street Journal’s money rates column” as the base rate on                corporate loans at large U.S. money center commercial banks, currently                8.250%), resulting in an initial rate of 8.250.  **Loan                Agreement**.                The term "Loan Agreement" means one or more promises, promissory                notes,                agreements, undertakings, security agreements, deeds of trust or                other                documents, or commitments, or any combination of those actions or                documents, relating to the Loan, including without limitation the                following: **LOAN                DOCUMENTS** |
| Corporate                Resolution: CHAMPION INDUSTRIES, INC.Promissory                NoteWV                National UCC Financing Statement (Rev. OS/22/02):Purchase                Money Security Interest in (1) HEIDELBERG COLOR PRINTING PRESS SM                74-6-P +                L S/N 627630 WITH THE FOLLOWING ATTACHMENTS (1) DOM.ACC.HEAD FOR                M7012V000/SUVAM7012V00, (1) S.W LICENSE PRE.INTERF. 74 VERSION S/N                12530                14566A AND (1) PRINECT PREPRESS INTERFACE OHNE LAUFWERK; owned by                CHAMPION                INDUSTRIES, INC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | Business                Loan AgreementWV                Commercial Security Agreement: Purchase Money Security Interest in                (1)                HEIDELBERG COLOR PRINTING PRESS SM 74-6-P + L S/N 627630 WITH THE                FOLLOWING ATTACHMENTS (1) DOM.ACC.HEAD FOR M7012V000/SUVAM7012V00,                (1) S.W                LICENSE PRE.INTERF. 74 VERSION S/N 12530 14566A AND (1) PRINECT PREPRESS                INTERFACE OHNE LAUFWERK; owned by CHAMPION INDUSTRIES, INC. Disbursement                Request and AuthorizationNotice                of Final Agreement |
|  **Parties.**                The term "Parties" means COMMUNITY TRUST BANK, INC. and any and all                entities or individuals who are obligated to repay the loan or have                pledged property as security for the Loan, including without limitation                the following: **Borrower:****CHAMPION                INDUSTRIES, INC.****Grantor(s):****CHAMPION                INDUSTRIES, INC.**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

**BORROWER:**

**CHAMPION      INDUSTRIES, INC.**

**By:**

**TONEY      K. ADKINS, President of CHAMPION INDUSTRIES, INC.**

**LENDER:**

**COMMUNITY      TRUST BANK, INC. **

**X__________________________________________**

** **
**AUTHORIZED      SIGNER**

**THIS      BUSINESS LOAN AGREEMENT dated July 28,2006, is made and executed between      CHAMPION INDUSTRIES, INC. ("Borrower") and COMMUNITY TRUST BANK, INC. ("Lender")      on the following terms and conditions. Borrower has received prior commercial      Loans from Lender or has applied to Lender for a commercial Loan or Loans or      other financial accommodations, including those which may be described on any      exhibit or schedule attached to this Agreement ("Loan"). Borrower understands      and agrees that: (A) in granting, renewing. or extending any Loan, Lender is      relying upon Borrower's representations, warranties, and agreements as set      forth      in this Agreement; (B) the granting, renewing, or extending of any Loan by      Lender at all times shall be subject to Lender's sole judgment and discretion;      and (C) all such Loans shall be and remain subject to the terms and conditions      of this Agreement.**

**TERM**

**CONDITIONS      PRECEDENT TO EACH ADVANCE**

**Loan      Documents**

**Borrower's      Authorization**

**Payment      of Fees and Expenses**

**Representations      and Warranties**

**No      Event of Default**

**REPRESENTATIONS      AND WARRANTIES**

**Organization.**

**Assumed      Business Names**
**None**

| Principal$1,200,000.00 | Loan                Date07-28-2006 | Maturity07-28-2011 | Loan                No.601004027550005 | Call                / Coll25 | Account | Officer906 | Initials |
|------------------------|------------------------------------|--------------------|----------------------------------------|------------------------------|---------|------------|----------|

**Borrower:**
**CHAMPION      INDUSTRIES INC (TIN: 55-0717455)**

**POST      OFFICE BOX 2968**

**HUNTINGTON,      WV 25728**

**Lender:**

**COMMUNITY      TRUST BANK, INC.**

**COMMERCIAL      LENDING (PIKEVILLE MAIN)**

**346      NORTH MAYO TRAIL**

**P.O.      BOX 2947**

**PIKEVILLE,      KY 41502-2947**

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**Authorization**

**Financial      Information**

**Legal      Effect**

**Properties**

**Hazardous      Substances**

**Litigation      and Claims**

**BUSINESS      **
**LOAN      **
**AGREEMENT**

----

**BUSINESS      LOAN AGREEMENT (Continued)**

**Page      2**

**Taxes.**

**Lien      Priority.**

**Binding      Effect.**

**AFFIRMATIVE      COVENANTS**

**Notices      of Claims and Litigation**

**Financial      Records**

**Financial      Statements**

**Annual      Statements**

**Tax      Returns**

**Additional      Information**

**Insurance**

**Insurance      Reports**

**Other      Agreements**

**Loan      Proceeds**

**Taxes,      Charges and Liens**

**Performance**

**Operations**

**Environmental      Studies**

**Compliance      with Governmental Requirements**

**Inspection**

**Compliance      Certificates**

**Environmental      Compliance and Reports**

**Additional      Assurances**

**LENDER'S      EXPENDITURES**

**Loan      No: **

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**BUSINESS      LOAN AGREEMENT (Continued)**

**Loan      No: **

**Page      3**

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**NEGATIVE      COVENANTS. **

**Indebtedness      and Liens. **

**Continuity      of Operations.**

**Loans,      Acquisitions and Guaranties. **

**Agreements.**

**CESSATION      OF ADVANCES**

**RIGHT      OF SETOFF**

**DEFAULT**

**Payment      Default**

**Other      Defaults**

**Default      in Favor of Third Parties**

**False      Statements**

**Insolvency**

**Defective      Collateralization**

**Creditor      or Forfeiture Proceedings**

**Events      Affecting Guarantor**

**Change      in Ownership.**

**Adverse      Change**

**Insecurity**

**Right      to Cure**

**EFFECT      OF AN EVENT OF DEFAULT**

**MISCELLANEOUS      PROVISIONS**

**BUSINESS      LOAN AGREEMENT (Continued)**

**Page      4**

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**Amendments**

**Attorneys'      Fees; Expenses**

**Caption      Headings**

**Consent      to Loan Participation**

**Governing      Law. This Agreement will be governed by federal law applicable to Lender and,      to      the extent not preempted by federal law, the laws of the Commonwealth of      Kentucky without regard to its conflicts of law provisions. This Agreement      has      been accepted by Lender in the Commonwealth of Kentucky.**

**No      Waiver by Lender.**

**Notices**

**Severability**

**Subsidiaries      and Affiliates of Borrower**

**Successors      and Assigns**

**Survival      of Representations and Warranties**

**Time      is of the Essence**

**Waive      Jury. All parties to this Agreement hereby waive the right to any jury trial      in      any action, proceeding, or counterclaim brought by any party against any other      party.**

**Choice      of Venue.**

**DEFINITIONS.**

**Loan      No: **

**Page      5**

**BUSINESS      LOAN AGREEMENT (Continued)**

**Loan      No: **

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**Security      Interest**

**BORROWER      ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN AGREEMENT      AND      BORROWER AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED JULY 28,      2006.**

**GAAP.**

**Grantor**

**Guarantor**

**Guaranty**

**Hazardous      Substances**

**Indebtedness**

**Lender**

**Loan.**

**Note.**

**Permitted      Liens.**

**Related      Documents**

**Security      Agreement**

**BORROWER:**

**CHAMPION      INDUSTRIES, INC.**

**By:**

**TONEY      K. ADKINS, President of CHAMPION INDUSTRIES, INC.**

**LENDER:**

**COMMUNITY      TRUST BANK, INC. **

**X__________________________________________**

** **
**AUTHORIZED      SIGNER**

| Principal$1,200,000.00 | Loan                Date07-28-2006 | Maturity07-28-2011 | Loan                No.6010040275500005 | Call                / Coll25 | Account | Officer906 | Initials |
|------------------------|------------------------------------|--------------------|-----------------------------------------|------------------------------|---------|------------|----------|

**COMMUNITY      TRUST BANK, INC.**

**COMMERCIAL      LENDING (PIKEVILLE MAIN)**

**346      NORTH MAYO TRAIL**

**P.O.      BOX 2947**

**PIKEVILLE,      KY 41502-2947**

**DISBURSEMENT      REQUEST AND AUTHORIZATION**

**Borrower:**
**CHAMPION      INDUSTRIES INC (TIN: 55-0717455)**

**POST      OFFICE BOX 2968**

**HUNTINGTON,      WV 25728**

**Lender:**

| **o  ** | **Personal,                Family, or Household Purposes or Personal Investment.** |
|-------------------|------------------------------------------------------------------------------------|

| **x  ** | **Business                (Including Real Estate                Investment).** |
|-------------------|--------------------------------------------------------------------------------|

**SPECIFIC      PURPOSE.**

**DISBURSEMENT      INSTRUCTIONS.**

**Amount      paid to Borrower directly:**

**Other      Charges Financed:**

**Note      Principal:**

**FINANCIAL      CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND WARRANTS      TO      LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND THAT THERE      HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION AS      DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS      AUTHORIZATION IS DATED JULY 28, 2006.**

**BORROWER:**

|   |   |   |   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|

**LOAN      TYPE**

**PRIMARY      PURPOSE OF LOAN.**

**Prepaid      Finance Charges Paid In Cash:**

**Other      Charges Paid in Cash**

**Total      Charges Paid In Cash**

**By:**

**TONEY      K. ADKINS, President of CHAMPION INDUSTRIES, INC.**

**CHAMPION      INDUSTRIES, INC.**

| **CHARGES                  PAID IN CASH.**** ** |   |   |   |   |   |   |   |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|