EXHIBIT 10.2


10.2

$1,000,000
  Business Loan Agreement and promissory note by and between the Company and Community
  Trust Bank, N.A. as of March 19, 2004.



BUSINESS
  LOAN AGREEMENT


   

  	Borrower:
	CHAMPION
          INDUSTRIES, INC. (TIN:55-0717455)
	
          Lender
	Community
          Trust Bank, Inc.

	
	P.O.
          BOX 2968
	
	Main
          Office

	
	HUNTINGTON,
          WV 25728-2968
	
	346
          North Mayo Trail

	
	
	
	P.O.
          Box 2947

	
	
	
	Pikeville,
          KY 41502-2947



  THIS BUSINESS
    LOAN AGREEMENT dated March 19, 2004, 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. 
    This Agreement shall be effective as of March 19, 2004, and shall continue
    in full force and effect until such time as all of Borrower's Loans in favor
    of Lender have been paid in full, including principal, interest, costs, expenses,
    attorneys' fees, and other fees and charges, or until March 19, 2009.

   CONDITIONS PRECEDENT
    TO EACH ADVANCE.  Lender's obligation to make the initial Advance
    and each subsequent 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 the following documents for the Loan: (1}
      the Note, (2) Security Agreements granting to Lender security interests
      in the Collateral; (3) financing statements and all other documents perfecting
      Lender's Security Interests; (4) evidence of insurance as required below;
      (5) together with all such Related Documents as Lender may require for the
      Loan; all in form and substanceto Lender and Lender's 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.
      In addition, Borrower shall have proved such other resolutions, authorizations,
      documents and instruments as Lender or its counsel, 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.

  

  
    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
      or under any Related Document.

  

  
    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 for profit which is, and at all times shall be,
      duly organized, validly existing, and in good standing under and by virtue
      of the laws of the State of West Virginia. Borrower is duly authorized to
      transact business in all other states in which Borrower is doing business,
      having detained all necessary filings, governmental licenses and approvals
      for each state in which Borrower is doing business. Specifically, Borrower
      is, and at all times shall be, duly qualified as a foreign corporation in
      all states in which the failure to so qualify would have a material adverse
      effect on its business or financial condition. Borrower has the full power
      and authority to own its properties and to transact the business in which
      it is presently engaged or presently proposes to engage. Borrower maintains
      its principal office at 2450-90 First Avenue, Huntington, WV 25703. Unless
      Borrower has designated otherwise in writing, this is the principal office
      at which Borrower keeps its books and records including its records concerning
      the Collateral. Borrower will notify Lender prior to any change in the location
      of Borrower's state of organization or any change in Borrower's name. Borrower
      shall do all things necessary to preserve and to keep in full force and
      effect its existence, rights and privileges, and shall comply with all regulations,
      rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental
      authority or court applicable to Borrower and Borrower's business activities.

  

  
    Assumed Business
      Names.  Borrower has filed or recorded all documents or filings
      required by law relating to all assumed business names used by Borrower.
      Excluding the name of Borrower, the following is a complete list of all
      assumed business names under which Borrower does business: None.

  

  
    Authorization. 
      Borrower's execution, delivery, and performance of this Agreement and all
      the Related Documents have been duly authorized by all necessary action
      by Borrower and do not conflict with, result in a violation of, or constitute
      a default under (1) any provision of (a) borrower's articles of incorporation
      or organization, or bylaws, or (b) any agreement or other instrument binding
      upon Borrower or (2) any law, governmental regulation, court decree, or
      order applicable to Borrower or to Borrower's properties.

  

  
    Financial
      Information.  Each of Borrower's financial statements 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 Borrower is
      required to give under the Agreement 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 Security Interests, and has not executed any security
        documents or financing statements relating to such properties. To all
        of Borrower's properties are free and clear of all 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 and acknowledged by Lender
      in writing, Borrower represents and warrants that: (1) During the period
      of Borrower’s ownership of Borrower's Collateral, there has been no
      use, generation, manufacture, storage, treatment, disposal, release or threatened
      release of any Hazardous Substance by any person on, under, about or from
      any of the Collateral. (2) Borrower has no knowledge of, or reason to believe
      that there has been (a) any breach or violation of any Environmental Laws;
      (b) any use, generation, manufacture, storage, treatment, disposal, release
      or threatened release of any Hazardous Substance on, under, about or from
      the Collateral by any prior owners or occupants of any of the Collateral;
      or (c) any actual or threatened litigation or claims of any kind by any
      person relating to such matters. (3) Neither Borrower nor any tenant, contactor,
      agent or other authorized user of any of the Collateral shall use, generate,
      manufacture, store, beat, dispose of or release any Hazardous Substance
      on, under, about or from any of the Collateral; and any such activity shall
      be conducted in compliance with ail applicable federal, state, and local
      laws, regulations, and ordinances, including without limitation all Environmental
      Laws. Borrower authorizes Lender and its agents to enter upon the Collateral
      to make such inspections and tests as Lender may deem appropriate to determine
      compliance of the Collateral with this section of the Agreement. Any inspections
      or tests made by Lender shall be at Borrower's expense and for Lender's
      purposes only and shall not be construed to create any responsibility or
      liability on the part of Lender to Borrower or to any other person. The
      representations and warranties contained herein are based on Borrower's
      due diligence in investigating the Collateral for hazardous waste and Hazardous
      Substances. Borrower hereby (1) 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 (2) agrees to indemnify
      and hold harmless Lender against any and all claims, losses, liabilities,
      damages, penalties, and expenses which Lender may directly or indirectly
      sustain or suffer resulting from a breach of this section of the Agreement
      or as a consequence of any use, generation, manufacture, storage, disposal,
      release or threatened release of a hazardous waste or substance on the Collateral.
      The provisions of this section of the Agreement, including the obligation
      to indemnify, shall survive the payment of the Indebtedness and the termination,
      expiration or satisfaction of this Agreement and shall not be affected by
      Lender's acquisition of any interest in any of the Collateral, whether by
      foreclosure or otherwise. 
      

    

  

  
    Litigation
      and Claims.  No litigation, claim, investigation, administrative
      proceeding or similar action (including those for unpaid taxes) against
      Borrower is pending or threatened, and no other event has occurred which
      may materially adversely affect Borrower’s financial condition or
      properties, other than litigation, claims, or other events, if any, that
      have been disclosed to and acknowledged Lender in writing.

  

  
    Taxes. 
      To the best of Borrower's knowledge, all of Borrower's tax returns and reports
      that are or were required to be filed, have been filed, and all taxes, assessments
      and other governmental charges have been paid in full, except those presently
      being or to be contested by Borrower in good faith in the ordinary course
      of business and for which adequate reserves have been provided.

  

  
    Lien Priority. 
      Unless otherwise previously disclosed to Lender in writing, Borrower has
      not entered into or granted any Security Agreements, or permitted the filing
      or attachment of any Security Interests on or affecting any of the Collateral
      directly or indirectly securing repayment of Borrower’s Loan and Note,
      that would be prior or that may in any way be superior to Lender’s
      Security Interests and rights in and to such Collateral.

  

  
    Binding Effect. 
      This Agreement, the Note, all Security Agreements (if any), and all Related
      Documents are binding upon the signers thereof, as well as upon their successors,
      representatives and assigns, and are legally enforceable in accordance with
      their respective terms.

  

  
    AFFIRMATIVE
      COVENANTS.  Borrower covenants and agrees with Lender that,
      so long as this Agreement remains in effect, Borrower will:

  

  
    Notices of
      Claims and Litigation.  Promptly inform Lender in writing
      of (1) all material adverse changes in Borrower’s financial condition,
      and (2) all existing and all threatened litigation, claims, investigations,
      administrative proceedings, or similar actions affecting Borrower or any
      Guarantor which could materially affect the financial condition of Borrower
      or the financial condition of any Guarantor.

  

  
    Financial
      Records.  Maintain its books and records in accordance with
      GAAP, 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 the following:

  

  
    
      Annual
        Statements.  As soon as available, but in no event later
        than one-

      hundred-twenty
        (120) 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.

    

  

  
    
      Tax Returns.
         As soon as available, but in no event later than one-hundred-twenty
        (120) days after the applicable filing date for the tax reporting period
        ended, Federal and other governmental tax returns, prepared by a certified
        public accountant satisfactory to Lender.

    

  

  
    All financial reports
      required to be provided under this Agreement shall be prepared in accordance
      with GAAP, applied on a consistent basis, and certified by Borrower as being
      true and correct.

  

  
    Additional
      Information.  Furnish such additional information and statements,
      as lender may request from time to time.

  

  
    
      Insurance. 
        Maintain fire and other risk insurance, public liability insurance, and
        such other insurance as Lender may require with respect to Borrower's
        properties and operations, in form, amounts, coverage’s and with
        insurance companies acceptable to Lender. Borrower, 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
        coverage’s will not be cancelled or diminished without at least
        thirty (30) days prior written notice to Lender. 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 Borrower or any other person. In connection with all policies covering
        assets in which Lender holds or is offered a security interest for the
        Loans, Borrower will provide Lender with such lender's loss payable or
        other endorsements as Lender may require.

    

  

  
    Insurance
      Reports.   Furnish to Lender, upon request of Lender, reports
      on each existing insurance policy showing such information as Lender may
      reasonably request, including without limitation the following: (1) the
      name of the insurer; (2) the risks insured; (3) the amount of the policy;
      (4) the properties insured; (5) the then current property values on the
      basis of which insurance has been detained, and the manner of determining
      those values; and (6) the expiration date of the policy. In addition, upon
      request of Lender (however not more often than annually), Borrower will
      have an independent appraiser satisfactory to Lender determine, as applicable,
      the actual cash value or replacement cost of any Collateral. The cost of
      such appraisal shall be paid by Borrower.

  

  
    Other Agreements. 
      Comply with all terms and conditions of all other agreements, whether now
      or hereafter existing, between Borrower and any other party and notify Lender
      immediately in writing of any default in connection with any other such
      agreements.

  

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

  

  
    Taxes, Charges
      and Liens.  Pay and discharge when due all of its indebtedness
      and obligations, including without limitation all assessments, taxes, governmental
      charges, levies and liens, of every kind and nature, imposed upon Borrower
      or its properties, income, or profits, prior to the date on which penalties
      would attach, and all lawful claims that, if unpaid, might become a lien
      or charge upon any of Borrower’s properties, income, or profits.

  

  
    Performance. 
      Perform and comply, in a timely manner, with all terms, conditions, and
      provisions set forth in this Agreement, in the Related Documents, and in
      all other instruments and agreements between Borrower and Lender. 
      Borrower shall notify Lender immediately in writing of any default in connection
      with any agreement.

  

  
    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.

  

  
    Environmental
      Studies.  Promptly conduct and complete, at Borrower's expense,
      all such investigations, studies, samplings and testings as may be requested
      by Lender or any governmental authority relative to any substance, or any
      waste or by-product of any substance defined as toxic or a hazardous substance
      under applicable federal, state, or local law, rule, regulation, order or
      directive, at or affecting any property or any facility owned, leased or
      used by Borrower.

  

  
    Compliance
      with Governmental Requirements.  Comply with all laws, ordinances,
      and regulations, now or hereafter in effect, of all governmental authorities
      applicable to the conduct of Borrower’s properties, businesses and
      operations, and to the use or occupancy of the Collateral, including without
      limitation, the Americans with Disabilities Act.  Borrower may contest
      in good faith any such law, ordinance, or regulation and withhold compliance
      during any proceeding, including appropriate appeals, so long as Borrower
      has notified Lender may require Borrower to post adequate security or a
      surety bond, reasonably satisfactory to Lender, to protect Lender’s
      interest.

  

  
    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
      the 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.

  

  
    Compliance
      Certificates.  Unless waived in writing by Lender, provide
      Lender at least annually, with a certificate executed by Borrower’s
      chief financial officer, or other officer or person acceptable to Lender,
      certifying that the representations and warranties set forth in this Agreement
      are true and correct as of the date of the certificate and further certifying
      that, as of the date of the certificate, no Event of Default exists under
      this Agreement.

  

  
    Environmental
      Compliance and Reports.  Borrowers shall comply in all respects
      with any and all Environmental laws; not cause or permit to exist, as a
      result of an intentional or unintentional action or omission Borrower’s
      part or on the part of any third party on property owned and/or occupied
      by Borrower, any environmental activity where damage may result to the environment,
      unless such environmental activity is pursuant to and in compliance with
      the conditions of a permit issued by the appropriate federal, state, or
      local governmental authorities; shall furnish to Lender promptly and in
      any event within thirty (30) days after receipt thereof a copy of any notice,
      summons, lien, citation, directive, letter or other communication from any
      governmental agency or instrumentality concerning any intentional or unintentional
      action or omission on Borrower’s part in connection with any environmental
      activity whether or not there is damage to the environment and/or other
      natural resources.

  

  
    Additional
      Assurances.   Make, execute and deliver to Lender such promissory
      notes, mortgages, deeds of trust, security agreements, assignments, financing
      statements, instruments, documents and other agreements as Lender or its
      attorneys may reasonably request b evidence and secure the Loans and to
      perfect all Security Interests.

  

  
    LENDER'S EXPENDITURES.
        If any action or proceeding is commenced that would materially
      affect Lender's interest in the Collateral or if Borrower fails b comply
      with any provision of this Agreement or any Related Documents, including
      but not limited to Borrower's failure to discharge or pay when due any amounts
      Borrower is required to discharge Of pay under this Agreement or any Related
      Documents, Lender on Borrower's behalf may (but shall not be obligated to)
      take any action that Lender deems appropriate, including but not limited
      to discharging or paying all taxes, liens, security interests, encumbrances
      and other claims, at any time levied or placed on any Collateral and paying
      ail costs for insuring, maintaining and preserving any 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 Borrower. Ail such expenses will become
      a part of the Indebtedness and, at Lender's option, will (A) be payable
      on demand; (B) be added b the balance of the Note and be apportioned among
      and be payable with any installment payments to become due during either
      (1) the term of any applicable insurance policy; or (2) 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.

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

  

  
    Indebtedness
      and Liens.   (1) 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
      eases, (2) sell, transfer, mortgage, assign, pledge, lease, grant a security
      interest in, or encumber any of Borrower's assets (except as allowed as
      Permitted Liens), or (3) sell with recourse any of Borrower's accounts,
      except to Lender.

  

  
    Continuity
      of Operations.  (1) Engage in any business activities substantially
      different than those in which Borrower is presently engaged, (2) cease operations,
      liquidate, merge, transfer, acquire or consolidate with any other entity,
      change its name, dissolve or transfer or sell Collateral out of the ordinary
      course of business, or (3) 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
      b 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 Borrower's stock, or purchase or retire
      any of Borrower's outstanding shares or alter or amend Borrower's capital
      structure.

  

  
    Loans, Acquisitions
      and Guaranties.  (1) Loan, invest in or advance money or assets
      to any other person, enterprise or entity, (2) purchase, create or acquire
      any interest in any other enterprise or entity, or (3) incur any obligation
      as surety or guarantor other than in the ordinary course of business.

  

  
    Agreements.
       Borrower will not enter into any agreement containing any provisions
      which would be violated or breached by the performance of Borrower's obligations
      under this Agreement or in connection herewith.

  

  
    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 of the Related documents or any other agreement
      that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor
      dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy
      or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material
      adverse change in Borrowers financial condition, in the financial condition
      of any Guarantor, or in the value of any Collateral securing any Loan; or
      (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.

    RIGHT OF SETOFF. 
      To the extent permitted by applicable law, Lender reserves a right of setoff
      in all Borrower’s accounts with Lender (whether checking, savings,
      or some other account). This includes all accounts Borrower holds jointly
      with someone else and all accounts Borrower may open in the future. However,
      this does not include any IRA or Keogh accounts, or any trust accounts for
      which setoff 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.

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

  

  
    Payment Default.
        Borrower fails to make any payment when due under the Loan.

  

  
    Other Defaults.
        Borrower fails 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 to comply with or to perform any term, obligation,
      covenant or condition contained in any other agreement between Lender and
      Borrower.

  

  
    Default in
      Favor of Third Parties.  Borrower or any Grantor 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 or any Grantor's property or
      Borrower's or any Grantor's ability to repay the Loans or performs their
      respective obligations under this Agreement or any of the Related Documents.

  

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

  

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

  

  
    Creditor
      or Forfeiture Proceedings.  Commencement of foreclosure or
      forfeiture proceedings, whether by judicial proceedings, self-help, repossession
      or any other method, by any creditor of Borrower or by any governmental
      agency against any collateral securing the Loan.  This includes a garnishment
      of any Borrower’s accounts, with Lender.  However, this Event
      of Default shall not apply if there is a good faith disputer by Borrower
      as to the validity or reasonableness of the claim which is the basis of
      the creditor or forfeiture proceeding and if Borrower gives Lender written
      notice of the creditor or forfeiture proceedings 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 any Guarantor dies or becomes
      Incompetent, or revokes or disputes the validity of, or liability under,
      any Guaranty of the Indebtedness. In the event of a death, Lender, at its
      option, may, but shall not be required to, permit the Guarantors estate
      to assume unconditionally the obligations arising under the guaranty in
      a manner satisfactory to Lender, and, in doing so, cure any 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 Loan is
      impaired.

  

  
    Insecurity.
       Lender in good faith believes itself insecure. 

  

  
    Right to
      Cure.   If any default, other than a default on Indebtedness,
      is curable and if Borrower or Grantor, as the case may be, has not been
      given a notice of a similar default within the preceding twelve (12) months,
      it may be cured (and no Event of Default will have occurred) if Borrower
      or Grantor, as the case may be, after receiving written notice from Lender
      demanding cure of such default (1) cure the default within ten (10) days;
      or (2) if the cure requires more than ten (10) days, immediately initiate
      steps which Lender deems in Lender's sole discretion to be sufficient to
      cure the default and thereafter continue and complete all reasonable and
      necessary steps sufficient to produce compliance as soon as reasonably practical.

  

  
    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 or the Related
      Documents or any other agreement immediately will geminate (including any
      obligations to make further Loan Advances or disbursements, and, at Lender's
      option, all Indebtedness immediately will become due and payable, all without
      notice of any kind to Borrower, exceed 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 singularity 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.

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

  

  
    Amendments.
       This Agreement, together with any Related Documents, constitutes the
      entire understanding and agreement of the parties as to the matters set
      forth in this Agreement. No alteration of or amendment to this Agreement
      shall be effective unless given in writing and signed by the party or parties
      sought to be charged or bound by the alteration or amendment. 

  

  
    Attorneys'
      Fees; Expenses.  Borrower agrees to pay upon demand all of
      Lender’s costs and expenses, including Lender's reasonable attorneys'
      fees and Lender's legal expenses, incurred in connection with the enforcement
      of this Agreement. Lender may hire or pay someone else to help enforce this
      Agreement, and Borrower shall pay the costs and expenses of such enforcement
      Costs and expenses include Lender's reasonable attorneys' fees and legal
      expenses whether or not there is a lawsuit, including reasonable attorney’s
      fees and legal expenses for bankruptcy proceedings (including efforts to
      notify or vacate any automatic stay or injunction), appeals, and any anticipated
      post judgment collection services. Borrower also shall pay all court costs
      and such additional fees as may be directed by the court.

  

  
    Caption Headings.
       Caption headings in this Agreement are for convenience purposes only
      and are not to be used to interpret or define the provisions of this Agreement.

  

  
    Consent to
      Loan Participation.  Borrower agrees and consents to Lender’s
      sale or transfer, whether now or later, of one or more participation interests
      in the Loan to one or more purchasers, whether related or unrelated to Lender.
      Lender may provide, without any limitation whatsoever to any one or more
      purchasers, or potential purchasers, any information or knowledge Lender
      may have about Borrower or about any other matter relating to the Loan,
      and Borrower hereby waives any rights to privacy Borrower may have with
      respect to such matters. Borrower additional waives any and all notices
      of sale of participation Interests, as well as all notices of any repurchase
      of such participation interests. Borrower also agrees that the purchasers
      of any such participation interests will be considered as the absolute owners
      of such interests in the Loan and will have all the rights granted under
      the participation agreement or agreements governing the sale of such participation
      interests. Borrower further waives all rights of offset or counterclaim
      that it may have now or later against Lender or against any purchaser of
      such a participation interest and unconditionally agrees that either Lender
      or such purchaser may enforce Borrowers obligation under the Loan irrespective
      of the failure or insolvency of any holder of any interest in the Loan.
      Borrower further agrees that the purchaser of any such participation interests
      may enforce its interests irrespective of any personal claims or defenses
      that borrower may have against Lender.

  

  
    Governing
      Law.  This Agreement will be governed by, construed and enforced
      in accordance with federal law and the laws of the Commonwealth of Kentucky.
      This Agreement has been accepted by Lender in the Commonwealth of Kentucky.

  

  
    Choice of
      Venue.   If there is a lawsuit, Borrower agrees upon Lender's
      request to submit to the jurisdiction of the courts of Pike County, Commonwealth
      of Kentucky.

  

  
    No Waiver
      by Lender.   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 Lenders 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 Borrower, or between Lender
      and any Grantor, shall constitute a waiver of any d Lender's rights or of
      any of Borrower's or any 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.

  

  
    Notices.
       Any notice requires to be given under this Agreement shall be given
      in writing, and shall be effective when actually delivered, when actually
      received by telefacsimile (unless otherwise required by law), when deposited
      with a nationally recognized overnight courier, or, if mailed, when deposited
      in the United States mail, as first class, certified or registered mall
      postage prepaid, directed to the addresses shown near the beginning of this
      Agreement. Any party may change its address for notices under this Agreement
      by giving formal written notice to the other parties, specifying that the
      purpose of the notice is to change the party’s address. For notice
      purposes, Borrower agrees to keep Lender informed at ail times d Borrower's
      current address. Unless otherwise provided or required by law, if there
      is more than one Borrower, any notice given by Lender to any Borrower is
      deemed to be notice given to ail Borrowers.

  

  
    Severability.
       If a court of competent jurisdiction finds any provision of this Agreement
      to be illegal, invalid, or unenforceable as to any circumstance, that finding
      shall not make the offending provision illegal, invalid, or unenforceable
      as to any other circumstance.  If feasible, the offending provision
      shall be considered modified so that it becomes legal, valid and enforceable. 
      If the offending provision cannot be so modified, it shall be considered
      deleted from this Agreement. Unless otherwise provided require by law, if
      there is more than one Borrower, any notice given by Lender to any Borrower’s
      is deemed to be notice given to all Borrowers.

  

  
    Subsidiaries
      and Affiliates of Borrower.  To the extent the context of
      any provisions of this Agreement makes it appropriate, including without
      limitation any representation, warranty or covenant the word ‘Borrower”
      as used in this Agreement shall include all of Borrowers subsidiaries and
      affiliates. Notwithstanding the foregoing however, under no circumstances
      shall this Agreement be construed to require Lender to make any Loan or
      other financial accommodation to any of Borrower's subsidiaries or affiliates.

  

  
    Successors
      and Assigns.  All covenants and agreements by or on behalf
      of Borrower contained in this Agreement or any Related Documents shall bind
      Borrowers successors and assigns and shall inure to the benefit of Lender
      and its successors and assigns. Borrower shall not, however, have the right
      to assign Borrower’s rights under this Agreement or any interest therein,
      without the prior written consent of Lender.

  

  
    Survival
      of Representations and Warranties.  Borrower understands and
      agrees that in making the Loan, Lender is relying on all representations,
      warranties, and covenants made by Borrower h this Agreement or in any certificate
      or other instrument delivered by Borrower to Lender under this Agreement
      or the Related Documents. Borrower further agrees that regardless of any
      investigation made by Lender, all such representations, warranties and covenants
      will survive the making of the Loan and delivery to Lender of the Related
      Documents, shall be continuing in nature, and shall remain in full force
      and effect until such time as Borrower's Indebtedness shall be paid in full,
      or until this Agreement shall be terminated in the manner provided above,
      whichever is the last to occur.

  

  
    Time is of
      the Essence.  Time is of the essence in the performance of
      this Agreement.

  

  
    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.

  

  
    DEFINITIONS.
       The following capitalized words and terms shall have the following
      meanings when used in this Agreement. Unless specifically stated to the
      contrary, all references to dollar amounts shall mean amounts in lawful
      money of the United States of America. Words and terms used in the singular
      shall include the plural, and the plural shall include the singular, as
      the context may require. Words and terms not otherwise defined in this Agreement
      shall have the meanings attributed to such terms in the Uniform Commercial
      Code. Accounting words and terms not otherwise defined in this Agreement
      shall have the meanings assigned to them in accordance will generally accepted
      accounting principles as in effect on the date of this Agreement:

  

  
    Advance.
       The word “Advance” means a disbursement of Loan funds
      made, or to be made, to Borrower or on Borrower's behalf on a line of credit
      or multiple advance basis under the terms and conditions of this Agreement.

  

  
    Agreement.
       The word “Agreement” means this Business Loan Agreement
      as this Business Loan Agreement may be amended or modified from time to
      time, together will ail exhibits and schedules attached to this Business
      Loan Agreement from time to time.

  

  
    Borrower.
       The word “Borrower” means CHAMPION INDUSTRIES,
      INC. and includes all co-signers and co-makers signing the Note.

  

  
    Collateral.
       The word “Collateral” means ail property and
      assets granted as collateral security for a Loan, whether real or personal
      properly, whether granted directly or indirectly, whether granted now or
      in the future, and whether granted in the form of a security interest, mortgage,
      collateral mortgage, deed of trust, assignment, pledge, crop pledge, chattel
      mortgage, collateral chattel mortgage, chattel trust, factor's lien, equipment
      trust, conditional sale, trust receipt, lien, charge, lien or title retention
      contract, lease or consignment intended as a security device, or any other
      security or lien interest whatsoever, whether created by law, contract,
      or otherwise.

  

  
    Environmental
      Laws.  The words “Environmental Laws” mean any
      and all state, federal and local statutes, regulations and ordinances relating
      to the protection of human heath or the environment, including without limitation
      the Comprehensive Environmental Response, Compensation, and Liability Act
      of 1980, as amended, 42 U.S.C. Section 9601, et seq. (“CERCLA”),
      the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499
      (“SARA”), the Hazardous Materials Transportation Act, 49 U.S.C.
      Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C.
      Section 6901, et seq., or other applicable state or federal laws, rules,
      or regulations adopted pursuant thereto.

  

  
    Event of
      Default.  The words “Event of Default” mean any
      of the events of default set forth in this Agreement in the default section
      of this Agreement.

  

  
    GAAP.
       The word “GAAP” means generally accepted accounting principles.

  

  
    Grantor.The
      word “Grantor” means each and all of the persons or entities
      granting a Security Interest in any Collateral for the Loan, including without
      limitation all Borrowers granting such a Security Interest.

  

  
    Guarantor.
       The word “Guarantor” means any guarantor, surety, or accommodation
      party of any or all of the Loan.

  

  
    Guaranty.
        The word “Guaranty” means the guaranty from Guarantor
      to Lender, including without limitation a guaranty of all or part d the
      Note

  

  
    Hazardous
      Substances.  The words “Hazardous Substances”
      mean materials that, because of their quantity, concentration or physical,
      chemical or infectious characteristics, may cause or pose a present or potential
      hazard to human health or the environment when improperly used, treated
      stored, disposed of, generated, manufactured, transported or otherwise handled
      The words “Hazardous Substances” are used in their very broadest
      sense and include without limitation any and all hazardous or toxic substances,
      materials or waste as defined by or listed under the Environmental Laws
      The term “Hazardous Substances” also includes, without limitation,
      petroleum and petroleum by-products or any fraction thereof and asbestos.

  

  
    Indebtedness.
       The word “Indebtedness” means the indebtedness evidenced
      by the Note or Related Documents, including all principal and interest together
      with all other indebtedness and costs and expenses for which Borrower is
      responsive under this Agreement or under any of the Related Documents

  

  
    Lender.
       The word “Lender” means Community Trust Bank, Inc, its
      successors and assigns.

  

  
    Loan.
       The word “Loan” means any and all loans and financial
      accommodations from Lender to Borrower whether now or hereafter existing,
      and however evidenced, including without limitation those loans and financial
      accommodations described herein or described on any exhibit or schedule
      attached to this Agreement from, time to time.

  

  
    Note.
       The word “Note” means the Note executed by CHAMPION INDUSTRIES,
      INC. In the principal amount of $1,000,020.00 dated March 19, 2004, together
      with all renewals of, extensions of, modifications of, refinancing of, consolidations
      of, and substitutions for the note or credit agreement.

  

  
    Permitted
      Liens.  The words “Permitted Liens” mean (1) liens
      and security interests securing Indebtedness owed by Borrower to Lender;
      (2) liens for taxes, assessments, or similar charges either not yet due
      or being co in good faith; (3) liens of materialmen, mechanics, warehousemen,
      or carriers, or other like liens arising in the ordinary course of business
      and securing obligations which are not yet delinquent (4) purchase money
      liens or purchase money security interests upon or in any property acquired
      or held by Borrower in the ordinary course of business to secure indebtedness
      outstanding on the date of this Agreement or permitted to be incurred under
      the paragraph of this Agreement titled “Indebtedness and Liens”;
      (5) liens and security interests which, as of the date of this Agreement,
      have been disclosed to and approved by the Lender in writing; and (6) those
      liens and security interests which h the aggregate constitute an immaterial
      and insignificant monetary amount with respect to the net value of Borrower's
      assets.

  

  
    Related Documents.
       The words “Related Documents” mean all promissory notes,
      credit agreements, loan agreements, environmental agreements, guaranties,
      security agreements, mortgages, deeds of trust, security deeds, collateral
      mortgages, and all other instruments, agreements and documents, whether
      now or hereafter existing, executed in connection with the Loan.

  

  
    Security
      Agreement.  The words “Security Agreement” mean
      and include without limitation any agreements, promises, covenants, arrangements,
      understandings or other agreements, whether created by law, contract, or
      otherwise, evidencing, governing, representing, or creating a Security Interest.

  

  
    Security
      Interest.  The words “Security Interest” mean,
      without limitation, any and all types of collateral security, present and
      future, either in the form of a lien, charge, encumbrance, mortgage, deed
      of trust, security deed, assignment, pledge, crop pledge, chattel mortgage,
      collateral chattel mortgage, chattel trust, factor's lien, equipment trust,
      conditional sale, trust receipt, lien or title retention contract, lease
      or consignment intended as a security device, or any other security or lien
      interest whatsoever whether created by law, contract, or otherwise.

  

  
    BORRROWER ACKNOWLEDGES
      HAVING READ ALL THE PROVISIONS OF HIS BUSINESS LOAN AGREEMENT AND BORROWER
      AGREES TO ITS TERMS. THIS BUSINESS LOAN AGREEMENT IS DATED MARCH 19, 2004.

    BORROWER:

    CHAMPION INDUSTRIES,
      INC.

    By:________________________________

     TONEY K.
    ADKINS, Vice President of CHAMPION INDUSTRIES, INC. 
    LENDER:

    COMMUNITY TRUST
      BANK, INC.

    By:________________________________

     Authorized
      Signer 

  



 



PROMISSORY
  NOTE


  
    

    

    	Borrower:  
	
            Champion Industries, Inc.(TIN:55-0717455)
	
            Lender: 
	Community
            Trust Bank,Inc.

	
	
            P.O. Box 2968 
	
	Main
            Office 

	
	
            Huntington, WV 25728-2968  
	
	346
            North Mayo Trail

	
	
	
	Pikeville,
            KY 41502-2947



    

  

  Principal Amount:
    $1,000,020.00   Initial Rate: 4.000%   Date of Note: 3-19-2004 

  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 Twenty & 00/100
    Dollars ($1,000,020.00), together with interest on the unpaid principal balance
    from March 19, 2004, 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 $18,444.50 each payment. Borrower’s
    first payment is due April 19, 2004, and all subsequent payments are due on
    the same day of each month after that.  Borrower’s final payment
    will be due on March 19, 2009, 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 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
    1s 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 interest rate on this Note is subject to change from time
    to time based on changes in an independent index which is the 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.  (the “Index”). The Index is not
    necessarily the lowest rate charged by Lender on its loans.  If the index
    becomes unavailable during the term of this loan, Lender may designate a substitute
    index after notice to Borrower. Lender will tell Borrower the current index
    rate upon Borrower’s request.  The interest rate change will not
    occur more often than each day, [Any change in the Prime Rate shall be effective
    as of the day on which the change is announced to become effective]. 
    Borrower understands that Lender may make loans based on other rates as well. 
    The Index currently is 4.000% per annum. The interest rate to be applied
    to the unpaid principal balance of this Note will be at a rate equal to the
    index, resulting in an initial rate of 4.000% per annum.  NOTICE:
    Under no circumstances will interest rate on this Note be more than the maximum
    rate allowed by applicable law. Whenever increases occur in the interest rate,
    Lender, at its option, may do one or more of the following: (A) increase Borrower’s
    payment to ensure Borrower’s loan will pay off by its original final
    maturity date, (B) increase Borrower’s payments to cover accruing interest,
    (C) increase the number of Borrower’s payments, and (D) continue Borrower’s
    payments at the same amount and increase Borrower’s final payment. 
      

  PREPAYMENT.  
    Borrower may pay without penalty all or 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 of accrued unpaid interest.  Rather, early payments will
    reduce the principal balance due.  Borrower agrees not to send Lender
    payments marked “paid in full”, “without recourse”,
    or similar language.  If Borrower sends such a payment, Lender may accept
    it without losing any of Lender’s rights under this Note, and Borrower
    will remain obligated to pay any further amount owed to Lender.  All
    written communications concerning disputed amounts, including any check or
    other payment instrument that indicates that the payment constitutes “payment
    if full” of the amount owed or that is tendered with other conditions
    or limitations or as full satisfaction of a disputed amount must be mailed
    or delivered to: Community Trust Bank, Inc., P.O. Box 2947 Pikeville, KY 41502-2947.

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

  INTEREST AFTER DEFAULT. 
    Upon default, including failure to pay upon final maturity, Lender, at its
    option, may, if permitted under applicable law, increase the variable interest
    rate on this Note to 2.000 percentage points over the index. The interest
    rate will not exceed the maximum rate permitted by applicable law.  

  DEFAULT.  Each
    of the following shall constitute an event of default (“Event of Default”)
    under this Note.




  Payment Default.
     Borrower fails to make any payment when due under this Note.




  Other Defaults.
     Borrower fails to comply with or to perform any other term, obligation,
    covenant or condition contained in any other agreement between Lender and
    Borrower.  




  Default in favor
    of third parties.  Borrower or any Grantor 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
    effect 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. 




  False Statements.
      Any warranty, representation or statement made or furnished
    to Lender by Borrower or on Borrower’s behalf under this Note or the
    related documents is false or misleading in any material respect, either now
    or 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 or 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 of forfeiture proceedings,
    whether by judicial proceeding, self-help, repossession or any other method,
    by any creditor of Borrower’s accounts, including deposit accounts,
    with Lender.  However, the Event of Default shall apply if there is a
    good faith dispute by Borrower as to the validity or reasonableness of the
    claim which is the basis of the creditor or forfeiture proceeding and if Borrower
    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, endorser, surely, or accommodation party of any of the indebtedness
    or any guarantor, endorser, surety, or accommodation part dies or becomes
    incompetent, or revokes or disputes the validity of, or liability under, any
    guaranty of the indebtedness evidenced by this Note.  In the event of
    a death, Lender, at this 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
    any 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 this Note is
    impaired. 




  Insecurity.  Lender
    in good faith believes itself insecure.  




  Cure Provisions.
     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 cured if Borrower,
    after receiving written notice from Lender demanding cure of such default:
    (1) cures the default within ten (10) days; or (2) 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 reasonable practical.  




  LENDER’S RIGHTS.
     Upon default, Lender may declare the entire unpaid principal balance
    on this Note and all accrued unpaid interest immediately due, and then Borrower
    will pay that amount.  

  ATTORNEYS’ FEES;
    EXPENSES.  Lender may hire or pay someone else to help collect this
    Note if Borrower does not pay.  Borrower 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, expense for bankruptcy proceedings
    (including efforts to modify or vacate any automatic stay or injunction),
    and necessary steps sufficient to produce compliance as soon as reasonably
    practical.

  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, construed and enforced in accordance with federal
    law and the laws of the State of West Virginia.  This Note has been accepted
    by Lender in the State of West Virginia. 

  CHOICE OF VENUE.
     If there is a lawsuit, Borrower agrees upon Lender’s request to
    submit to the jurisdiction of the courts of Pike County, Commonwealth of Kentucky.
    

  RIGHT OF SETOFF.
     To the extent permitted by applicable law, Lender reserves the right
    of setoff in all Borrower’s accounts with Lender (whether checking,
    savings, or some other account). This includes all accounts Borrower holds
    jointly with someone else and all accounts Borrower may open in the future. 
    However, this does not include any IRA or Keogh accounts, or any trust accounts
    for which setoff would be prohibited by law.  Borrower authorizes Lender,
    to the extent permitted by applicable law, to charge or setoff all sums owing
    on the debt against any and all such accounts.  

  COLLATERAL.  Borrower
    acknowledges this Note is secured by (1) Heidelberg Speedmaster SN74-6P3 +
    L (2/3 Press, S/N 626493 including Alcolor Vario System, Heidelberg Dryer
    Varnish, Nela Ternes Punch/Blender Pkg. #5, Exhaust Hood Farbe/Lack LGK. 
    

  INTEREST INCREASE.
     THIS NOTE’S INTEREST RATE WILL BE INCREASED BY 2% PER ANNUM IF
    ANY PAYMENT IS NOT RECEIVED WITHIN 30 DAYS OF ITS DUE DATE. 

  DISHONORED ITEM FEE.
     Borrower will pay a fee to Lender of $20.00 if Borrower makes a payment
    on Borrower’s loan and the check or preauthorized charge with which
    Borrower pays is later dishonored.  

  SUCCESSOR INTERESTS.
     The terms of this Note shall be binding upon Borrower, and upon Borrower’s
    heirs, personal representatives, successors and assigns, and shall inure to
    the benefit of Lender and its successors and assigns.  

  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 presentiment,
    demand for payment, and notice of dishonor.  Upon any change in 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 form 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 modifications are
    made.  Note are joint and several.  

  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, Vice President of 

     
    Champion Industries, Inc. 

   

  LENDER:

  COMMUNITY TRUST BANK,
    INC. 

   

  By: ______________________________

     
    Authorized Signature