<PAGE>   1
                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)

                                                                    EXHIBIT 10.4

                                 LOAN AGREEMENT


<TABLE>
<S>              <C>          <C>          <C>            <C>       <C>           <C>             <C>         <C>
----------------------------------------------------------------------------------------------------------------------
  PRINCIPAL      LOAN DATE     MATURITY      LOAN NO      CALL      COLLATERAL      ACCOUNT       OFFICER     INITIALS
$2,690,937.87    05-06-1999   05-06-2002   5568697/100                  EQ        5568697/100      55207
----------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any
particular loan or item.
----------------------------------------------------------------------------------------------------------------------
</TABLE>

BORROWER:                                  LENDER:
          CHAMPION INDUSTRIES, INC.
                (TIN: 55-0717455)
                                           One Valley Bank, National Association
          2450 FIRST AVENUE                Corporate Banking
          HUNTINGTON, WV 25728-2968        One Valley Square,
          P.O. Box 1793                    Charleston, WV  25326

THIS BUSINESS LOAN AGREEMENT between CHAMPION INDUSTRIES, INC. ("Borrower") and
One Valley Bank, National Association ("Lender") is made and executed 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 and other
financial accommodations, including those which may be described on any exhibit
or schedule attached to this Agreement. All such loans and financial
accommodations, together with all future loans and financial accommodations from
Lender to Borrower, are referred to in this Agreement individually as the "Loan"
and collectively as the "Loans." 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 shall remain subject to the following terms and conditions of this
Agreement.

TERM. This Agreement shall be effective as of May 6, 1999, and shall continue
thereafter until all Indebtedness of Borrower to Lender has been performed in
full and the parties terminate this Agreement in writing.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.

        Loan Documents. Borrower shall provide to Lender in form satisfactory to
        Lender the following documents for the Loan: (a) the Note, (b) Security
        Agreements granting to Lender security interests in the Collateral, (c)
        Financing Statements perfecting Lender's Security Interests; (d)
        evidence of insurance as required below; and (e) any other documents
        required under this Agreement or by Lender or its counsel.

        Borrower's Authorization. Borrower shall have provided in form and
        substance satisfactory to Lender properly certified resolutions, duly
        authorizing the execution and delivery of this Agreement, the Note and
        the Related Documents, and such other authorizations and other documents
        and instruments as Lender or its counsel, in their sole discretion, may
        require. Payment of Fees and Expenses. Borrower shall have paid to
        Lender all fees, charges, and other expenses which are then due and
        payable as specified in this Agreement or any Related Document.

        Representations and Warranties. The representations and warranties set
        forth in this Agreement, in the Related Documents, and in any document
        or certificate delivered to Lender under this Agreement are true and
        correct.


                               Exhibit (10.4)-p1
<PAGE>   2

                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)


        No Event of Default. There shall not exist at the time of any advance a
        condition which would constitute an Event of Default under this
        Agreement.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any Indebtedness exists:

        Organization. Borrower is a corporation which is duly organized, validly
        existing, and in good standing under the laws of the State of West
        Virginia and is validly existing and in good standing in all states in
        which Borrower is doing business. Borrower has the full power and
        authority to own its properties and to transact the businesses in which
        it is presently engaged or presently proposes to engage. Borrower also
        is duly qualified as a foreign corporation and is in good standing in
        all states in which the failure to so qualify would have a material
        adverse effect on its businesses or financial condition.

        Authorization. The execution, delivery, and performance of this
        Agreement by Borrower, to the extent to be executed, delivered or
        performed by Borrower, have been duly authorized by all necessary action
        by Borrower; do not require the consent or approval of any other person,
        regulatory authority or governmental body; and do not conflict with,
        result in a violation of, or constitute a default under (a) any
        provision of its articles of incorporation or organization, or bylaws,
        or any agreement or other instrument binding upon Borrower or (b) any
        law, governmental regulation, court decree, or order applicable to
        Borrower.

        Financial Information. Each financial statement of Borrower supplied to
        Lender truly and completely disclosed Borrower's financial condition as
        of the date of the statement, and there has been no material adverse
        change in Borrower's financial condition subsequent to the date of the
        most recent financial statement supplied to Lender. Borrower has no
        material contingent obligations except as disclosed in such financial
        statements.

        Legal Effect. This Agreement constitutes, and any instrument or
        agreement required hereunder to be given by Borrower when delivered will
        constitute, legal, valid and binding obligations of Borrower enforceable
        against Borrower in accordance with their respective terms.

        Properties. Except as contemplated by this Agreement or as previously
        disclosed in Borrower's financial statements or in writing to Lender and
        as accepted by Lender, and except for property tax liens for taxes not
        presently due and payable, Borrower owns and has good title to all of
        Borrower's properties free and clear of all liens and security
        interests, and has not executed any security documents or financing
        statements relating to such properties. All of Borrower's properties are
        titled in Borrower's legal name, and Borrower has not used, or filed a
        financing statement under, any other name for at least the last five (5)
        years.

        Hazardous Substances. Except as disclosed to Lender in writing, no
        property of Borrower ever has been, or ever will be so long as this
        Agreement remains in effect, used for the generation, manufacture,
        storage, treatment, disposal, release or threatened release of any
        hazardous waste or substance, as those terms are defined in the
        "CERCLA," "SARA," applicable state or Federal laws, or regulations
        adopted pursuant to any of the foregoing. The representations and
        warranties contained herein are based on Borrower's due diligence in
        investigating the properties for hazardous waste and hazardous
        substances. Borrower hereby (a) releases and waives any future claims
        against Lender for indemnity or contribution in the event Borrower
        becomes liable for cleanup or other costs under any such laws, and (b)
        agrees to indemnify and hold harmless Lender against any and all claims
        and losses resulting from a breach of this provision of this Agreement.
        This obligation to indemnify shall survive the payment of the
        Indebtedness and the satisfaction of this Agreement.


                               Exhibit (10.4)-p2
<PAGE>   3

                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)


        Commercial Purposes. Borrower intends to use the Loan proceeds solely
        for business or commercial related purposes.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:

        Litigation. Promptly inform Lender in writing of (a) all material
        adverse changes in Borrower's financial condition, and (b) all existing
        and all threatened litigation, claims, investigations, administrative
        proceedings or similar actions affecting Borrower or any guarantor of
        the Loan which could materially affect the financial condition of
        Borrower or the financial condition of any guarantor of the Loan.

        Financial Records. Maintain its books and records in accordance with
        accounting principles acceptable to Lender, applied on a consistent
        basis, and permit Lender to examine and audit Borrower's books and
        records at all reasonable times.

        Financial Statements. Furnish Lender with, as soon as available, but in
        no event later than ninety (90) days after the end of each fiscal year,
        Borrower's balance sheet and income statement for the year ended,
        compiled by a certified public accountant satisfactory to Lender. All
        financial reports required to be provided under this Agreement shall be
        prepared in accordance with accounting principles acceptable to Lender,
        applied on a consistent basis, and certified by Borrower as being true
        and correct. .

        Additional Information. Furnish such additional information and
        statements, lists of assets and liabilities, aging of receivables and
        payables, inventory schedules, budgets, forecasts, tax returns, and
        other reports with respect to Borrower's financial condition and
        business operations as Lender may request from time to time.

        Loan Proceeds. Use all Loan proceeds solely for Borrower's business
        operations, unless specifically consented to the contrary by Lender in
        writing.

        Performance. Perform and comply with all terms, conditions, and
        provisions set forth in this Agreement and in the Related Documents in a
        timely manner, and promptly notify Lender if Borrower learns of the
        occurrence of any event which constitutes an Event of Default under this
        Agreement or under any of the Related Documents.

        Operations. Maintain executive and management personnel with
        substantially the same qualifications and experience as the present
        executive and management personnel; provide written notice to Lender of
        any change in executive and management personnel; conduct its business
        affairs in a reasonable and prudent manner and in compliance with all
        applicable federal, state and municipal laws, ordinances, rules and
        regulations respecting its properties, charters, businesses and
        operations, including without limitation, compliance with the Americans
        With Disabilities Act and with all minimum funding standards and other
        requirements of ERISA and other laws applicable to Borrower's employee
        benefit plans. Inspection. Permit employees or agents of Lender at any
        reasonable time to inspect any and all Collateral for the Loan or Loans
        and Borrower's other properties and to examine or audit Borrower's
        books, accounts, and records and to make copies and memoranda of
        Borrower's books, accounts, and records. If Borrower now or at any time
        hereafter maintains any records (including without limitation computer
        generated records and computer software programs for the generation of
        such records) in the possession of a third party, Borrower, upon request
        of Lender, shall notify such party to permit Lender free access to such
        records at all reasonable times and to provide Lender with copies of any
        records it may request, all at Borrower's expense.


                               Exhibit (10.4)-p3
<PAGE>   4

                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)


NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

        INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the normal
        course of business and indebtedness to Lender contemplated by this
        Agreement, create, incur or assume indebtedness for borrowed money,
        including capital leases, (b) except as allowed as a Permitted Lien,
        sell, transfer, mortgage, assign, pledge, lease, grant a security
        interest in, or encumber any of Borrower's assets, or (c) sell with
        recourse any of Borrower's accounts, except to Lender.

        CONTINUITY OF OPERATIONS. (a) Engage in any business activities
        substantially different than those in which Borrower is presently
        engaged, (b) cease operations, liquidate, merge, transfer, acquire or
        consolidate with any other entity, change ownership, change its name,
        dissolve or transfer or sell Collateral out of the ordinary course of
        business, (c) pay any dividends on Borrower's stock (other than
        dividends payable in its stock), provided, however that notwithstanding
        the foregoing, but only so long as no Event of Default has occurred and
        is continuing or would result from the payment of dividends, if Borrower
        is a "Subchapter S Corporation" (as defined in the Internal Revenue Code
        of 1986, as amended), Borrower may pay cash dividends on its stock to
        its shareholders from time to time in amounts necessary to enable the
        shareholders to pay income taxes and make estimated income tax payments
        to satisfy their liabilities under federal and state law which arise
        solely from their status as Shareholders of a Subchapter S Corporation
        because of their ownership of shares of stock of Borrower, or (d)
        purchase or retire any of Borrower's outstanding shares or alter or
        amend Borrower's capital structure.

        LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance money
        or assets, (b) purchase, create or acquire any interest in any other
        enterprise or entity, or (c) incur any obligation as surety or guarantor
        other than in the ordinary course of business.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan advances or to disburse Loan proceeds if:
(a) Borrower or any guarantor is in default under the terms of this Agreement or
any other agreement that Borrower or any guarantor has with Lender; (b) Borrower
or any Guarantor becomes insolvent, files a petition in bankruptcy or similar
proceedings, or is adjudged a bankrupt; (c) there occurs a material adverse
change in Borrower's financial condition, in the financial condition of any
guarantor, or in the value of any collateral securing any Loan; (d) any
guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
guarantor's. guaranty of the Loan or any other loan with Lender; or (e) Lender
in good faith deems itself insecure, even though no Event of Default shall have
occurred.

YEAR 2000. Borrower warrants and represents that all software utilized in the
conduct of Borrower's, business will have appropriate capabilities and
compatibility for operation to handle calendar dates falling on or after January
1, 2000, and all information pertaining to such calendar dates, in the same
manner and with the same functionality as the software does respecting calendar
dates falling on or before December 31, 1999. Further, Borrower warrants and
represents that the data-related user interface functions, data-fields, and
date-related program instructions and functions of the software include the
indication of the century.

MINIMUM FIXED CHARGE COVERAGE RATIO. The Borrower shall not permit the ratio of
Consolidated Cash Flow from Operations divided by Fixed Charges,


                               Exhibit (10.4)-p4
<PAGE>   5

                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)


calculated as of the end of each fiscal quarter for the previous four fiscal
quarters then ended, to be less than 1.05 to 1.00 through October 31, 1999, and
to be less than 1.10 to 1.0 thereafter.

LEVERAGE RATIO. The Borrower shall not at any time permit the ratio of Total
Senior Indebtedness divided to EBITDA to be greater than:

2.50 to 1.0 as of October 31, 1998
2.50 to 1.0 as of October 31, 1999
2.25 to 1.0 as of October 31, 2000 and
2.0 to 1.0 as of October 31 of each year thereafter

MINIMUM TANGIBLE NET WORTH. The Borrower shall not at any time permit
Consolidated Tangible Net Worth to be less than the sum of (i) 90% of Tangible
Net Worth on the Closing Date, (ii) an amount equal to 50% of the consolidated
Net Income and (iii) 100% of the proceeds of all stock issued by the Borrower or
any of its Subsidiaries.

RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's accounts with Lender
(whether checking, savings, or some other account), including without limitation
ail accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and Keogh accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on the Indebtedness against any and all such accounts.

EVENTS OF DEFAULT. Each of the following shall constitute an event of default
("Event of Default") under this Agreement:

        DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when
        due on the Loans.

        Other Defaults. Failure of Borrower to comply with or to perform when
        due any other term, obligation, covenant or condition contained in this
        Agreement

        DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower default under any
        loan, extension of credit, security agreement, purchase or sales
        agreement, or any other agreement, in favor of any other creditor or
        person that may materially affect any of Borrower's property or
        Borrower's ability to repay the Loans or perform Borrower's obligations
        under this Agreement or any related document.

        FALSE STATEMENTS. Any warranty, representation or statement made or
        furnished to Lender by or on behalf of Borrower is false or misleading
        in any material respect at the time made or furnished, or becomes false
        or misleading at any time thereafter. Insolvency. The dissolution or
        termination of Borrower's existence as a going business, the insolvency
        of Borrower, the appointment of a receiver for any part of Borrower's
        property, any assignment for the benefit of creditors, any type of
        creditor workout, or the commencement of any proceeding under any
        bankruptcy or insolvency laws by or against Borrower.

        CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
        forfeiture proceedings, whether by judicial proceeding, self-help,
        repossession or any other method, by any creditor of Borrower, any
        creditor of any grantor of collateral for the Loan This includes a
        garnishment, attachment, or levy on or of any of Borrower's deposit
        accounts with Lender.


                               Exhibit (10.4)-p5
<PAGE>   6

                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)


        EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
        respect to any Guarantor of any of the Indebtedness or any Guarantor
        dies or becomes incompetent, or revokes or disputes the validity of, or
        liability under, any Guaranty of the Indebtedness. Lender, at its
        option, may, but shall not be required to, permit the Guarantor's estate
        to assume unconditionally the obligations arising under the guaranty in
        a manner satisfactory to Lender, and, in doing so, cure the Event of
        Default.

        Change In Ownership. Any change in ownership of twenty-five percent
        (25%) or more of the common stock of Borrower.

        ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
        condition, or Lender believes the prospect of payment or performance of
        the Indebtedness is impaired.

        Insecurity. Lender, in good faith, deems itself insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement immediately will terminate and,
at Lender's option, ail Indebtedness immediately will become due and payable,
all without notice of any kind to Borrower, except that in the case of an Event
of Default of the type described in the "Insolvency" subsection above, such
acceleration shall be automatic and not optional. In addition, Lender shall have
all the rights and remedies provided in the Related Documents or available at
law, in equity, or otherwise. Except as may be prohibited by applicable law, all
of Lender's rights and remedies shall be cumulative and may be exercised
singularly or concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make expenditures or to
take action to perform an obligation of Borrower or of any Grantor shall not
affect Lender's right to declare a default and to exercise its rights and
remedies.





Borrower acknowledges having read all the provisions of this business loan
agreement, and Borrower agrees to its terms. This agreement is dated as of May
6, 1999.

Borrower:

Champion Industries, Inc.


                               Exhibit (10.4)-p6
<PAGE>   7

                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)


                                 PROMISSORY NOTE

<TABLE>
<S>                                  <C>                        <C>
PRINCIPAL AMOUNT: $2,690,937.87      INTEREST RATE: 6.750%      DATE OF NOTE: MAY 6, 1999
</TABLE>

PROMISE TO PAY. CHAMPION INDUSTRIES, INC. ("Borrower") promises to pay to One
Valley Bank, National Association ("Lender"), or order, in lawful money of the
United States of America, the principal amount of Two Million Six Hundred Ninety
Thousand Nine Hundred Thirty Seven & 87/100 Dollars ($2,690,937.87), together
with interest at the rate of 6.750% per annum on the unpaid principal balance
from May 6, 1999, until paid in full.

PAYMENT. Borrower will pay this loan in 35 payments of $82,921.07 each payment
and an irregular last payment estimated at $82,920.71. Borrower's first payment
is due June 6, 1999, and all subsequent payments are due on the same day of each
month after that. Borrower's final payment will be due on May 6, 2002, and will
be for all principal and all accrued interest not yet paid. Payments include
principal and interest. The annual interest rate for this Note is computed on a
365/360 basis; that is, by applying the ratio of the 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. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to principal,
and any remaining amount to any unpaid collection costs and late charges.

PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full prepayment of
this Note, Borrower understands that Lender is entitled to a minimum interest
charge of $25.00. Other than Borrower's obligation to pay any minimum interest
charge, Borrower may pay without penalty all or a portion of the amount owed
earlier than it is due. Early payments will not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's obligation to continue to make payments
under the payment schedule. Rather, they will reduce the principal balance due
and may result in Borrower making fewer payments.

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $25.00, whichever is greater.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with Lender.
(g) Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A material
adverse change occurs in Borrower's financial condition, or Lender believes the
prospect of payment or performance of the Indebtedness is impaired. (i) Lender
in good faith deems itself insecure.


                               Exhibit (10.4)-p7
<PAGE>   8

                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)


If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within ten (10) days; or (b) if the
cure requires more than ten (10) days, immediately initiates steps which Lender
deems in Lender's sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Lender may hire or pay someone
else to help collect this Note if Borrower does not pay. Borrower also will pay
Lender that amount. This includes, subject to any limits under applicable law,
Lender's attorneys' fees and Lender's legal expenses whether or not there is a
lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. This Note has been delivered to
Lender and accepted by Lender in the State of West Virginia. If there is a
lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of
the courts of Kanawha County, the State of West Virginia. 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. This Note
shall be governed by and construed in accordance with the laws of the State of
West Virginia.

RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts held jointly with someone else and all accounts Borrower may open
in the future, excluding however all IRA and Keogh accounts, and all trust
accounts for which the grant of a security interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on this Note against any and all such accounts.

COLLATERAL. This Note is secured by a Security Agreement dated May 6, 1999
securing 1st lien on specific equipment as listed on Attachment A.

REPRICING. The interest rate shall remain fixed for six months from the date of
the Note at which time Lender reserves the right to reprice the Loan in six
month intervals based on the six month Libor Rate plus 1.75%.

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan, or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF
A COMPLETED COPY OF THE NOTE.


                               Exhibit (10.4)-p8
<PAGE>   9

                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)


                          COMMERCIAL SECURITY AGREEMENT

<TABLE>
<S>        <C>                                 <C>      <C>
BORROWER:  CHAMPION INDUSTRIES, INC.
           (TIN: 55-0717455)                   LENDER:  One Valley Bank, National Association
                                                        Corporate Banking
           2450 FIRST AVENUE                            One Valley
           HUNTINGTON, WV 25728-2968                    Charleston, WV 25326
           Square, P.O. Box 1793
</TABLE>

THIS COMMERCIAL SECURITY AGREEMENT is entered Into between CHAMPION INDUSTRIES,
INC. (referred to below as "Grantor"); and One Valley Bank, National Association
(referred to below as "Lender"). 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.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.

        Agreement. The word "Agreement" means this Commercial Security
Agreement, as this Commercial Security Agreement may be amended or modified from
time to time, together with all exhibits and schedules attached to this
Commercial Security Agreement from time to time.

        Collateral. The word "Collateral" means the following described property
of Grantor, whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located:

        1st lien on specific Equipment as listed on attachment A

        In addition, the word "Collateral" includes all the following, whether
now owned or hereafter acquired, whether now existing or hereafter arising, and
wherever located:

        (a) All attachments, accessions, accessories, tools, parts, supplies,
increases, and additions to and all replacements of and substitutions for any
property described above.

        (b) All products and produce of any of the property described in this
Collateral section.

        (c) All accounts, general intangibles, instruments, rents, monies,
payments, and all other rights, arising out of a sale, lease, or other
disposition of any of the property described in this Collateral section.

        (d) All proceeds (including insurance proceeds) from the sale,
destruction, loss, or other disposition of any of the property described in this
Collateral section.

        (e) All records and data relating to any of the property described in
this Collateral section, whether in the form of a writing, photograph,
microfilm, microfiche, or electronic media, together with all of Grantor's
right, title, and interest in and to all computer software required to utilize,
create, maintain, and process any such records or data on electronic media.

        Event of Default. The words "Event of Default" mean and include without
limitation any of the Events of Default set forth below in the section titled
"Events of Default."

        Guarantor. The word "Guarantor" means and includes without limitation
each and all of the guarantors, sureties, and accommodation parties in
connection with the Indebtedness.

        Indebtedness. The word "Indebtedness" means the indebtedness evidenced
by the Note, including all principal and interest, together with all other
indebtedness and costs and expenses for which Grantor is responsible under this
Agreement or under any of the Related Documents. In addition, the word
"Indebtedness" includes all other obligations, debts and liabilities, plus
interest


                               Exhibit (10.4)-p9
<PAGE>   10

                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)


thereon, of Grantor, or any one or more of them, to Lender, as well as all
claims by Lender against Grantor, or any one or more of them, whether existing
now or later; whether they are voluntary or involuntary, due or not due, direct
or indirect, absolute or contingent, liquidated or unliquidated; whether Grantor
may be liable individually or jointly with others; whether Grantor may be
obligated as guarantor, surety, accommodation party or otherwise; whether
recovery upon such indebtedness may be or hereafter may become barred by any
statute of limitations; and whether such indebtedness may be or hereafter may
become otherwise unenforceable.

        Note. The word "Note" means the note or credit agreement dated May 6,
1999, in the principal amount of $2,690,937.87 from CHAMPION INDUSTRIES, INC. to
Lender, together with all renewals of, extensions of, modifications of,
refinancing of, consolidations of and substitutions for the note or credit
agreement.

        RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds of
trust, and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the Indebtedness.

        RIGHT OF SETOFF. Grantor hereby grants Lender a contractual security
interest in and hereby assigns, conveys, delivers, pledges, and transfers all of
Grantor's right, title and interest in and to Grantor's accounts with Lender
(whether checking, savings, or some other account), including all accounts held
jointly with someone else and all accounts Grantor may open in the future,
excluding, however, all IRA and Keogh accounts, and all trust accounts for which
the grant of a security interest would be prohibited by law. Grantor authorizes
Lender, to the extent permitted by applicable law, to charge or setoff all
Indebtedness against any and all such accounts.

        OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender as
follows:

        PERFECTION OF SECURITY INTEREST. Grantor agrees to execute such
financing statements and to take whatever other actions are requested by Lender
to perfect and continue Lender's security interest in the Collateral. Upon
request of Lender, Grantor will deliver to Lender any and all of the documents
evidencing or constituting the Collateral, and Grantor will note Lender's
interest upon any and all chattel paper if not delivered to Lender for
possession by Lender. Except in the ordinary course of its business, Grantor
shall not remove the Collateral from its existing locations without the prior
written consent of Lender.

        REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the
extent the Collateral consists of intangible property such as accounts, the
records concerning the Collateral) at Grantor's address shown above, or at such
other locations as are acceptable to Lender. Except in the ordinary course of
its business, including the sales of inventory, Grantor shall not remove the
Collateral from its existing locations without the prior written consent of
Lender. To the extent that the Collateral consists of vehicles, or other titled
property, Grantor shall not take or permit any action which would require
application for certificates of title for the vehicles outside the State of West
Virginia, without the prior written consent of Lender.

        TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or accounts
collected in the ordinary course of Grantor's business, Grantor shall not sell,
offer to sell, or otherwise transfer or dispose of the Collateral. Grantor shall
not pledge, mortgage, encumber or otherwise permit the Collateral to be subject
to any lien., security interest, encumbrance, or charge, other than the security
interest provided for in this Agreement, without the prior written consent of
Lender.

Title. Grantor represents and warrants to Lender that it holds good and
marketable title to the Collateral, free and clear of all liens and encumbrances
except far the -fier: of this Agreement. No financing statement covering any of
the Collateral is on file in any public office otherthan those which reflect the
security interest created by this Agreement or to which Lender has specifically


                               Exhibit (10.4)-p10
<PAGE>   11

                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)


consented. Grantor shall defend Lender's rights in the Collateral against the
claims and demands of all other persons.

MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all tangible
Collateral in good condition and repair. Grantor will not commit or permit
damage to or destruction of the Collateral or any part of the Collateral. Lender
and its designated representatives and agents shall have the right at all
reasonable times to examine, inspect, and audit the Collateral wherever located.
Grantor shall immediately notify Lender of all cases involving the return,
rejection, repossession, loss or damage of or to any Collateral; of any request
for credit or adjustment or of any other dispute arising with respect to the
Collateral; and generally of all happenings and events affecting the Collateral
or the value or the amount of the Collateral.Compliance With Governmental
Requirements. Grantor shall comply promptly with all laws, ordinances, rules and
regulations of all governmental authorities, now or hereafter in effect,
applicable to the ownership, production, disposition, or use of the Collateral,
including without limitation payment when due of all taxes, assessments and
liens upon the Collateral. Maintenance of Casualty Insurance. Grantor shall
procure and maintain all risks insurance, including without limitation fire,
theft and liability coverage together with such other insurance as Lender may
require with respect to the Collateral, in form, amounts, coverages and basis
reasonably acceptable to Lender and issued by a company or companies reasonably
acceptable to Lender. Grantor, upon request of Lender, will deliver to Lender
from time to time the policies or certificates of insurance in form satisfactory
to Lender, including stipulations that coverages will not be cancelled or
diminished without at least twenty (20) days' prior written notice to Lender and
not including any disclaimer of the insurer's liability for failure to give such
a notice. Each insurance policy also shall include an endorsement providing that
coverage in favor of Lender will not be impaired in any way by any act, omission
or default of Grantor or any other person. In connection with all policies
covering assets in which Lender holds or is offered a security interest, Grantor
will provide Lender with such loss payable or other endorsements as Lender may
require.

EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without limitation
all taxes, liens, security interests, encumbrances, and other claims, at any
time levied or placed on the Collateral. Lender also may (but shall not be
obligated to) pay all costs for insuring, maintaining and preserving the
Collateral. All such expenditures incurred or paid by Lender for such purposes
will then bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the date of repayment by Grantor. All such
expenses shall become a part of the Indebtedness and, at Lender's option, will
(a) be payable on demand, (b) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will be
due and payable at the Note's maturity. This Agreement also will secure payment
of these amounts. Such right shall be in addition to all other rights and
remedies to which Lender may be entitled upon the occurrence of an Event of
Default.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when due on the
Indebtedness.

Other Defaults. Failure of Grantor to comply with or to perform any other term,
obligation, covenant or condition contained in this Agreement or in any of the
Related Documents or in any other agreement between Lender and Grantor.


                               Exhibit (10.4)-p11
<PAGE>   12

                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)


DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower default under any loan,
extension of credit, security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person that may materially
affect any of Borrower's property or Borrower's ability to repay the Loans or
perform Borrower's obligations under this Agreement or any related document.

False Statements. Any warranty, representation or statement made or furnished to
Lender by or on behalf of Grantor under this Agreement, the or the Related
Documents is false or misleading in any material respect, either now or at the
time made or furnished.

DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
ceases to be in full force and effect (including failure of any collateral
documents to create a valid and perfected security interest or lien) at any time
and for any reason.

INSOLVENCY. The dissolution or termination of Grantor's existence as a going
business, the insolvency of Grantor, the appointment of a receiver for any part
of Grantor's property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Grantor.

CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Grantor or by any governmental agency against
the Collateral or any other collateral securing the Indebtedness. This includes
a garnishment of any of Grantor's deposit accounts with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Grantor as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Grantor gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect to
any Guarantor of any of the Indebtedness or such Guarantor dies or becomes
incompetent.

Adverse Change. A material adverse change occurs in Grantor's financial
condition, or Lender believes the prospect of payment or performance of the
Indebtedness is impaired.

INSECURITY. Lender, in good faith, deems itself insecure.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the West Virginia Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:

Accelerate Indebtedness. Lender may declare the entire Indebtedness, including
any prepayment penalty which Grantor would be required to pay, immediately due
and payable, without notice.

SELL THE COLLATERAL. Lender shall have full power to sell, lease, transfer, or
otherwise deal with the Collateral or proceeds thereof in its own name or that
of Grantor. Lender may sell the Collateral at public auction or private sale.
Unless the Collateral threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Lender will give Grantor reasonable
notice of the time after which any private sale or any other intended
disposition of the Collateral is to be made. The requirements of reasonable
notice shall be met if such notice is given at least ten (10) days before the
time of the sale or disposition. All expenses relating to the disposition of the
Collateral, including without limitation the expenses of retaking, holding
insuring, preparing for sale and selling the Collateral, shall become a part of
the Indebtedness secured by this Agreement and shall be payable on demand, with
interest at the Note rate from date of expenditure until repaid.


                               Exhibit (10.4)-p12
<PAGE>   13

                                 EXHIBIT SECTION
                                 EXHIBIT (10.4)


OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and remedies of a
secured creditor under the provisions of the Uniform Commercial Code, as may be
amended from time to time. In addition, Lender shall have and may exercise any
or all other rights and remedies it may have available at law, in equity, or
otherwise.

CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether evidenced by
this Agreement or the Related Documents or by any other writing, shall be
cumulative and may be exercised singularly or concurrently. Election by Lender
to pursue any remedy shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation of
Grantor under this Agreement, after Grantor's failure to perform, shall not
affect Lender's right to declare a default and to exercise its remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

Applicable Law. This Agreement has been delivered to Lender and accepted by
Lender in the State of West Virginia. If there is a lawsuit, Grantor agrees upon
Lender's request to submit to the jurisdiction of the courts of the State of
West Virginia. Lender and Grantor hereby waive the right to any jury trial in
any action, proceeding, or counterclaim brought by either Lender or Grantor
against the other. This Agreement shall be governed by and construed in
accordance with the laws of the State of West Virginia.

ATTORNEYS' FEES; EXPENSES. Grantor agrees to pay upon demand all of Lender's
costs and expenses, including attorneys' fees and Lender's legal expenses,
incurred in connection with the enforcement of this Agreement. Lender may pay
someone else to help enforce this Agreement, and Grantor shall pay the costs and
expenses of such enforcement. Costs arid expenses include Lender's attorneys'
fees and legal expenses whether or not there is a lawsuit, including attorneys'
fees and legal expenses for bankruptcy proceedings (and including efforts to
modify or vacate any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Grantor also shall pay all court costs and
such additional fees as may be directed by the court. Waiver. Lender shall not
be deemed to have waived any rights under this Agreement unless such waiver is
given in writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such right or any
other right. A waiver by Lender of a provision of this Agreement shall not
prejudice or constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this Agreement. No
prior waiver by Lender, nor any course of dealing between Lender and Grantor,
shall constitute a waiver of any of Lender's rights or of any of Grantor's
obligations as to any future transactions. Whenever the consent of Lender is
required under this Agreement, the granting of such consent by Lender in any
instance shall not constitute continuing consent to subsequent instances where
such consent is required and in all cases such consent may be granted or
withheld in the sole discretion of Lender.



                               Exhibit (10.4)-p13