CHAMPION INDUSTRIES INC
8-K, 1997-04-03
COMMERCIAL PRINTING
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                      SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
 
                                    FORM 8-K
                                 CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Date of Report (date of earliest event reported) March 24, 1997.
 
                             Champion Industries, Inc.
                ------------------------------------------------------
                (Exact name of registrant as specified in its charter)
 
      West Virginia                  0-21084                 55-0717455
- -----------------------        ---------------------    ---------------------
(State or other juris-         (Commission File No.)   (IRS Employer Identi-
of corporation)                                           fication No.)



2450 First Avenue 
P. O. Box 2968 
Huntington, West Virgina                                     25728
- --------------------------------                          ------------
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code    (304) 528-2791
                                          ---------------------------
 
                          Not Applicable 
- -------------------------------------------------------------------------------
         (Former name or former address, if changes since last report)
 
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                    INFORMATION TO BE INCLUDED IN THE REPORT
 
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
 
    On March 25, 1997, Champion Industries, Inc. ("Champion"), a West Virginia
corporation, announced that it had executed a definitive Agreement of Merger
dated March 24, 1997 providing for the merger of Blue Ridge Printing Co., Inc.
("Blue Ridge") with a wholly owned subsidiary of Champion to be chartered for
the purpose of effecting such merger. The Agreement of Merger provides that
Champion will issue 277,777 shares of its common stock, par value $1.00, having
at execution of the Agreement of Merger a market value of $5,250,000 in exchange
for all 550 issued and outstanding shares of common stock of Blue Ridge, and
that upon consummation of such merger, Blue Ridge would become a wholly owned
subsidiary of Champion and shareholders of Blue Ridge will become shareholders
of Champion. The merger is contingent upon approval by Blue Ridge shareholders
and satisfaction of other conditions set forth in the Agreement of Merger.
 
    Immediately prior to the announcement of the Agreement of Merger, Champion
had outstanding 8,104,714 shares of common stock. As a result of the
contemplated issuance of 277,777 shares to shareholders of Blue Ridge, Champion
will have outstanding 8,382,491 shares of common stock at consummation of the
merger. The shares of Champion common stock will be issued and sold pursuant to
exemptions from registration under the Securities Act of 1933 and the North
Carolina Securities Act.


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    Blue Ridge operates a full service process color pre-press center, printing
plant and bindery in Asheville, North Carolina and a satellite printing plant in
Knoxville, Tennessee.
 
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
 
    (c) Exhibits
 
    The exhibits listed on the Exhibit Index on page 4 of this Form 8-K are
filed herewith.
 
    Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                                CHAMPION INDUSTRIES, INC.
                                         --------------------------------------
                                                  (Registrant)

Date: April 3, 1997                            /s/ Joseph C. Worth, III 
                                               --------------------------------
                                               Joseph C. Worth, III, 
                                               Vice President and Chief 
                                               Financial Officer



<PAGE>


                                 EXHIBIT INDEX

2.1    Agreement of Merger between Champion Industries, Inc. and Blue Ridge
       Printing Co., Inc., dated March 24, 1997. Filed herewith.
 








<PAGE>


                                  EXHIBIT 2.1
 
                              AGREEMENT OF MERGER
 
    THIS AGREEMENT OF MERGER (hereinafter sometimes referred to as the
"Agreement"), made and entered into as of the 24th day of March, 1997, by and
between CHAMPION INDUSTRIES, INC. ("Champion") and BLUE RIDGE PRINTING CO., INC.
("Company"), and its directors, or a majority of them, and GLENN W. WILCOX, SR.,
BRUCE FOWLER, CLELL KEITH, G. WALLACE WILCOX, JR. and DAVID N. WILCOX, all its
shareholders (collectively, the "Shareholders");
 
                              W I T N E S S E T H:
 
    WHEREAS, Champion is a corporation duly organized and validly existing under
the laws of the State of West Virginia, with authorized capital stock consisting
of 10,000,000 common shares, $1.00 par value per share ("Champion Common
Stock"), of which 8,104,714 shares are currently outstanding; and
 
    WHEREAS, Company is a corporation duly organized and validly existing under
the laws of the State of North Carolina with authorized capital stock consisting
of 10,000 common shares, of which 550 shares are currently outstanding, having a
charter-stated par value of $10.00 per share ("Company Stock"); and
 
    WHEREAS, Champion and Company have agreed to the merger of Company with a
wholly-owned subsidiary of Champion, to be organized under the laws of the State
of North Carolina, so that upon consummation of the merger Company will be a
wholly-owned subsidiary of Champion; and
 
    WHEREAS, the Board of Directors of Champion has approved this Agreement and
has authorized the execution hereof in counterparts; and
 
    WHEREAS, the Board of Directors of Company has approved this Agreement,
authorized the execution hereof in counterparts, and directed that it be
submitted to its Shareholders for approval, ratification and confirmation; and
 
    WHEREAS, Champion has agreed to cause a new North Carolina corporation to be
organized which shall be named BRP Acquisition Company, Inc. ("Interim
Company"), with its principal office and place of business to be located in the
City of Asheville, State of North Carolina, and all shares of its capital stock
to be owned by Champion; and
 
    WHEREAS, Champion has agreed to cause Interim Company to approve this
Agreement and authorize the execution of an Adoption Agreement substantially in
the form attached hereto as "Exhibit A" which is incorporated herein by
reference.

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    NOW, THEREFORE, in consideration of the foregoing premises, which are not
mere recitals but an integral part hereof, and in consideration of the mutual
agreements hereinafter set forth, the parties hereto agree as follows:
 
SECTION 1.   MERGER

    1.1  GENERAL EFFECT OF MERGER; ASSETS.  At the Effective Time 
(hereinafter defined in Section 7.2) and subject to the terms and conditions 
hereof and of the attendant Plan of Merger ("Plan of Merger") attached hereto 
as "Exhibit B", Interim Company shall merge with and into Company (the 
"Merger") under the charter of Company pursuant to the provisions of and with 
the effect provided in NCGS Section 55-11-01. Company shall be (and is 
hereinafter called when reference is made to it at and after the consummation 
of the Merger) the Surviving Company and shall retain the name and title of 
"Blue Ridge Printing Co., Inc.". At the Effective Time of the Merger, the 
corporate existence of Interim Company shall, as provided in NCGS Section 
55-11-01, be merged with and into Company and continued in the Surviving 
Company and the separate existence of Interim Company shall cease. The 
Surviving Company shall thereupon and thereafter possess all of the rights, 
privileges, immunities and franchises, of a public as well as of a private 
nature, of the Interim Company and Company; and all property, real, personal 
and mixed, and all debts and liabilities due on whatever account, including 
subscriptions to shares, if any, and all other choses in action, and all and 
every other interest of or belonging to or due to the Interim Company and 
Company, and each of them, shall be deemed to be transferred to and vested in 
the Surviving Company without further act or deed; and the title to any real 
estate, or any interest therein, vested in the Interim Company and Company 
and each of them, before the Merger, shall not revert or in any way be 
impaired by reason of the Merger.
 
    1.2  LIABILITIES OF SURVIVING COMPANY.  From and after the Effective Time 
of the Merger, the Surviving Company shall be liable for all liabilities of 
Company and Interim Company and all deposits, debts, liabilities, obligations 
and contracts of Company and Interim Company, respectively, matured or 
unmatured, whether accrued, absolute, contingent or otherwise, and whether or 
not reflected or reserved against on balance sheets, books of account or 
records of Company or Interim Company, as the case may be, shall be those of 
and are hereby expressly assumed by the Surviving Company and shall not be 
released or impaired by the Merger, and all rights of creditors and other 
obligees and all liens on property of either Company or Interim Company shall 
be preserved unimpaired, and the Surviving Company shall have all rights and 
shall be liable for all obligations of Company under all employee benefit 
plans and arrangements of Company and such plans and related trusts shall 
continue in effect without any interruption or termination unless and until 
changed as therein or by law provided or permitted or as mutually agreed to 
by the parties hereto.

  1.3 NAME, DIRECTORS AND OFFICERS OF SURVIVING COMPANY. From

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and after the Effective Time, the name of the Surviving Company shall be 
"Blue Ridge Printing Co., Inc.". The Articles of Incorporation and the 
By-laws of Company in effect immediately prior to the Effective Time shall be 
the Articles of Incorporation and By-laws of the Surviving Company until 
changed as therein or by law provided. The directors and officers of the 
Surviving Company at the Effective Time shall be those persons who are 
directors and officers respectively of Interim Company immediately before the 
Effective Time. The committees of the Board of Directors of the Surviving 
Company at the Effective Time shall be the same as and shall be composed of 
the same persons who are serving on committees appointed by the Board of 
Directors of Interim Company as they exist immediately before the Effective 
Time.

   1.4 OFFICES, POLICIES OF SURVIVING COMPANY. From and after the 
Effective Time, the business and location of the Surviving Company shall be 
the same as that of Company. Unless contrary to law, all corporate acts, 
plans, policies, applications, agreements, loan commitments, orders, 
registrations, licenses, approvals and authorizations of Company and Interim 
Company, their respective shareholders, boards of directors, committees 
elected or appointed by their boards of directors, officers and agents, which 
were valid and effective immediately before the Effective Time shall be taken 
for all purposes at and after the Effective Time as the acts, plans, 
policies, applications, agreements, orders, registrations, licenses, 
approvals, and authorizations of Surviving Company and shall be effective and 
binding thereon as the same were with respect to Company and Interim Company 
immediately before the Effective Time.
 
    1.5  CAPITAL STRUCTURE OF SURVIVING COMPANY.  The capital structure of the
Surviving Company shall be the same as the capital structure of Company.
 
SECTION 2. CONVERSION, EXCHANGE AND CANCELLATION OF SHARES

    2.1  GENERAL.  The manner of converting and exchanging Company Stock, all of
which is represented by outstanding share certificates into Champion Common
Stock shall be as hereinafter provided in this Section 2.

2.2 (a) Conversion Rate. At the Effective Time, each of the shares of Company 
Stock that shall be issued and outstanding immediately prior to the Effective 
Time shall thereupon and without further action be converted into shares of 
Champion Common Stock at the Exchange Rate which shall be calculated as set 
forth in this Section 2; provided, however, that the number of shares of 
Company Stock that shall be issued and outstanding immediately prior to the 
Effective Time shall not be more than 550 shares. All shares of Champion 
Common Stock into which the aforesaid Company Stock is so converted shall be 
fully paid and non-assessable. Company's shareholders of record at the 
Effective Time, for the shares of Company Stock then held by them, 
respectively, shall be allocated and entitled to receive shares of

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Champion Common Stock, which total number of shares of Champion Common
Stock shall have an aggregate Market Value as of the Valuation Date of Five
Million Two Hundred Fifty Thousand Dollars ($5,250,000.00). The Market Value
shall be determined by averaging the daily closing trade prices of Champion
Common Stock as reported on the Nasdaq National Market System ("NMS") during the
five (5) consecutive days on which shares of Champion Common Stock are traded on
the Nasdaq National Market System ("NMS") immediately prior to the Valuation
Date as reported in THE WALL STREET JOURNAL. The Valuation Date shall be the
Nasdaq NMS trading day immediately prior to the date of effectiveness of this
Agreement as to Champion and Company as provided in Section 12.13 hereof.
 
    For purposes of establishing the Exchange Rate (the number of shares of
Champion Common Stock into which each share of Company Stock shall be converted
at the Effective Time), the Market Value of one (1) share of Champion Common
Stock shall be divided into the aggregate Market Value to establish to the
nearest whole share the aggregate number of shares of Champion Common Stock into
which all of the then issued and outstanding shares of Company Stock shall be
converted at the Effective Time. Such number of shares of Champion Common Stock
shall then be divided by the number of shares of Company Stock that shall be
issued and outstanding immediately prior to the Effective Time with the quotient
therefrom being the number of shares of Champion Common Stock into which each
share of Company Stock shall be converted at the effective time.
 
    2.3  MANNER OF EXCHANGE.  After the Effective Time of the Merger, except 
for persons exercising their rights as dissenting shareholders of Company, 
each holder of a certificate theretofore evidencing outstanding shares of 
Company Stock, upon surrender of such certificate, accompanied by a Letter of 
Transmittal and Investment Letter in the form attached hereto as Exhibit C, 
to Champion shall be entitled to receive in exchange therefor a certificate 
or certificates representing the number of full shares of Champion Common 
Stock for which shares of Company Stock theretofore represented by the 
certificate or certificates so surrendered shall have been exchanged as 
provided in this Section 2. Until so surrendered, each outstanding 
certificate which, prior to the Effective Time of the Merger, represented 
Company Stock will be deemed to evidence the right to receive the number of 
full shares of Champion Common Stock into which the shares of Company Stock 
represented thereby may be converted, and will be deemed for all corporate 
purposes of Champion to evidence ownership of the number of full shares of 
Champion Common Stock into which the shares of Company Stock represented 
thereby were converted. Until such outstanding certificates formerly 
representing Company Stock are surrendered, no dividend payable to holders of 
record of Champion Common Stock for any period as of any date subsequent to 
the Effective Time of the Merger shall be paid to the holder of such 
outstanding certificates in respect

<PAGE>

thereof. After the Effective Time of the Merger there shall be no further 
registry of transfers on the records of Company of shares of Company Stock. 
Upon surrender of certificates of Company Stock for exchange for Champion 
Common Stock, there shall be paid to the record holder of the certificates of 
Champion Common Stock issued in exchange therefor (i) the amount of dividends 
theretofore paid with respect to such full shares of Champion Common Stock as 
of any date subsequent to the Effective Time of the Merger which have not yet 
been paid to a public official pursuant to abandoned property laws and (ii) 
at the appropriate payment date the amount of dividends with a record date 
after the Effective Time of the Merger, but prior to surrender and a payment 
date subsequent to surrender. No interest shall be payable with respect to 
such dividends upon surrender of outstanding certificates.

    2.4 (a) SHARES OF CHAMPION COMMON STOCK NOT REGISTERED. Company 
acknowledges and agrees, and Company Shareholders will acknowledge and agree 
in their Investment Letters that the Champion Common Stock will not be 
registered under the Securities Act of 1933 or any state securities laws, and 
must be held indefinitely unless such Champion Common Stock is subsequently 
registered under the Securities Act of 1933 or under state securities acts, 
or unless an exemption from such registration is available. Company further 
acknowledges and agrees, and Company Shareholders will further acknowledge 
and agree in their Investment Letters that Champion is under no obligation, 
and shall assume no obligation, to cause such shares of Champion Common Stock 
to be so registered, and that each certificate representing shares of 
Champion Common Stock issued to Company shareholders shall be stamped or 
otherwise imprinted with, or contain a legend in substantially the following 
form:
 
              "The securities represented by this instrument have not been 
         registered under the Federal Securities Act of 1933, or any state 
         securities statute and may not be sold, assigned, or transferred 
         unless (i) registered for resale or (ii) the issuer hereof has 
         received the written opinion of counsel for said issuer that after 
         investigation of relevant facts, such counsel is of the opinion 
         that such sale, assignment or transfer does not involve a 
         transaction requiring a registration of such securities under the 
         Federal Securities Act of 1933 or any applicable state securities 
         laws. The restrictions of this paragraph shall become null and void 
         and this paragraph shall have no effect on and after ________, 1999."
 
    Company Shareholders shall further acknowledge in their Investment Letters
that Champion's issuance of such Champion Common Stock is made in reliance upon
an exemption from registration under the Federal Securities Act of 1933, which

<PAGE>


registration is in part premised upon and relied upon as a result of the
representations made by each Shareholder in the Investment Letter attached
hereto as Exhibit C, and each Shareholder shall review and truthfully and
accurately complete and execute same and deliver same to Champion.
 
    (b) PIGGYBACK REGISTRATION RIGHTS. If at any time or from time to time 
prior to ____________, 1998 Champion shall determine to register any of its 
securities, either for its own account or the account of a security holder or 
holders, other than (i) a registration relating solely to employee benefit 
plans, or (ii) a registration relating to a transaction of the type described 
in Securities and Exchange Commission Rule 145, Champion will:
 
         (i) promptly give to each holder of Champion Common Stock issued in 
exchange for Company Stock (hereinafter referred to in this Section 2.4(b)) 
as "Holder") written notice thereof; and
 
         (ii) include in such registration (and any related qualification 
under blue sky laws or other compliance), and in any underwriting involved 
therein, such of the Champion Common Stock issued in the Merger as specified 
in a written request or requests, made within twenty (20) days after receipt 
of such written notice from Champion, by any Holder.
 
    If the registration of which Champion gives notice is for a registered 
public offering involving an underwriting, Champion shall so advise the 
Holders as a part of the written notice given pursuant to this Section 
2.4(b). In such event the right of any Holder to registration pursuant to 
this Section shall be conditioned upon such Holder's participation in such 
underwriting and the inclusion of his Champion Common Stock in the 
underwriting to the extent provided herein. All Holders proposing to 
distribute their securities through such underwriting shall (together with 
Champion and the other holders distributing their securities through such 
underwriting) enter into an underwriting agreement in customary form with the 
managing underwriter selected for such underwriting by Champion. Champion 
shall so advise all Holders and other holders distributing their securities 
through such underwriting and the number of shares of Champion Common Stock 
that may be included in the registration and underwriting shall be allocated 
among all Holders and such other holders in proportion, as nearly as 
practicable, to the respective amounts of Champion Common Stock held by such 
Holders and such other holders at the time of filing the registration 
statement. If any Holder or holder disapproves of the terms of any such 
underwriting, he may elect to withdraw therefrom by written notice to 
Champion and the managing underwriter. Any securities excluded or withdrawn 
from such underwriting shall be withdrawn from such registration, and shall 
not be transferred in a public distribution prior to 180 days after the 
effective date of the registration statement relating thereto, or such other 
shorter period of time as the underwriters may require.
 
<PAGE>


    Champion shall have the right to terminate or withdraw any registration 
initiated by it under this Section 2.4(b) prior to the effectiveness of such 
registration whether or not any Holder has elected to include securities in 
such registration.
 
    All reasonable expenses of registration and sale (other than the 
underwriter's commissions) incurred in connection with any such registration 
shall be borne by Champion.
 
    The Holder or Holders of Champion Common Stock included in any 
registration shall furnish to Champion such information regarding such Holder 
or Holders, the Champion Common Stock held by them and the distribution 
proposed by such Holder or Holders as Champion may request in writing and as 
shall be required in connection with any registration referred to in this 
Section 2.4(b).
 
    Each Holder will, if Champion Common Stock held by such Holder is 
included in the securities as to which such registration is being effected, 
indemnify Champion, each of Champion's directors and officers, each 
underwriter, if any, of Champion's securities covered by such registration 
statement, each person who controls Champion or such underwriter within the 
meaning of Section 15 of the Securities Act, and each other such Holder, each 
of its officers and directors and each person controlling such Holder within 
the meaning of Section 15 of the Securities Act, against all claims, losses, 
damages and liabilities (or actions in respect thereof) arising out of or 
based on any untrue statement (or alleged untrue statement) of a material 
fact contained in any such registration statement, prospectus, offering 
circular or other document, or any omission (or alleged omission) to state 
therein a material fact required to be stated therein or necessary to make 
the statements therein not misleading, and will reimburse Champion, such 
Holders, such directors, officers, persons, underwriter or control persons 
for any legal or any other expenses reasonably incurred in connection with 
investigating or defending any such claim, loss, damage, liability or action, 
in each case to the extent, but only to the extent, that such untrue 
statement (or alleged untrue statement) or omission (or alleged omission) is 
made in such registration statement, prospectus, offering circular or other 
document in reliance upon and in conformity with written information 
furnished to Champion by an instrument duly executed by such Holder and 
stated to be specifically for use therein. Notwithstanding the foregoing, the 
liability of each Holder hereunder shall be limited in an amount equal to the 
initial public offering price of the shares sold by such Holder, unless such 
liability arises out of or is based on willful conduct by such Holder.
 
    2.5  FRACTIONAL SHARES.  Champion will not issue fractional shares or
fractional share certificates, but in lieu of the issuance of fractional shares
will pay cash, without interest, to any Company shareholder otherwise entitled
to receive such

<PAGE>


fractional shares. The amount of such cash payment will be determined by 
multiplying the fractional share interest to which a Company shareholder 
would otherwise be entitled by the Market Value of Champion Common Stock 
determined pursuant to Section 2.2. Payment for fractional shares will be 
made with respect to each shareholder at the time such shareholder's 
certificates of Company Stock are exchanged.
 
    2.6  LOST CERTIFICATES.  If a certificate evidencing outstanding shares 
of Company Stock is lost, stolen or destroyed, the registered owner thereof 
shall be entitled to receive the Champion certificate and cash to which he 
would otherwise be entitled on exchange of such certificate, by notifying 
Champion in writing of such lost, stolen or destroyed certificate and giving 
Champion evidence of loss and a bond sufficient to indemnify Champion against 
any claim that may be made against it on account of the alleged lost, stolen 
and destroyed certificate and the issuance of the certificate and cash.
 
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF CHAMPION
 
    Except as disclosed in writing, Champion hereby represents and warrants to
and covenants with Company and Shareholders that:

   3.1 ORGANIZATION, STANDING AND AUTHORITY. Champion is a corporation duly 
organized, validly existing and in good standing under the laws of the State 
of West Virginia. Champion has the corporate power to execute and deliver 
this Agreement, and has taken all action required by law, its Articles of 
Incorporation, its By-laws or otherwise, to authorize such execution and 
delivery, the Merger and the consummation of the transactions contemplated 
hereby, and this Agreement is a valid and binding agreement of Champion in 
accordance with its terms. No action of Champion's shareholders is or will be 
required to approve this Agreement or the Merger. At the Effective Time, 
Champion will have corporate power to carry on its business as then to be 
conducted and will be qualified to do business in every jurisdiction in which 
the character and location of the assets to be owned by it or the nature of 
the business to be transacted by it require qualification.
 
    3.2  CAPITAL STRUCTURE.  The authorized capital stock of Champion consists
of 10,000,000 shares of Champion Common Stock, of which 8,104,714 shares are
currently issued and outstanding. All of such shares are fully paid and
non-assessable. Champion does not have any other shares of Champion Common Stock
or any other capital stock issued or outstanding. Champion does not have any
outstanding subscriptions, options or other agreements or commitments obligating
it to issue shares of its capital stock except for its 1993 Stock Option Plan,
or as may be otherwise provided herein. The holders of Champion Common Stock
have no preemptive rights with respect to the issuance of additional authorized
shares of Champion Common Stock. Nothing in this

<PAGE>

Agreement shall prohibit or impair the ability and right of Champion to 
increase its authorized capital stock (a proposal to increase authorized 
shares to 20,000,000 has been submitted to Champion shareholders for approval 
at their annual meeting scheduled for March 17, 1997), or issue or agree to 
commit to issue additional shares of its capital stock, and any increase in 
authorized capital stock, or issuance, or agreement or commitment to issue, 
additional shares of Champion Common Stock shall not alter or affect the 
Conversion Rate set forth in Section 2.2 hereof. The shares of Champion 
Common Stock into which shares of Company Stock are to be converted upon the 
Effective Time will upon the Effective Time be duly authorized, and such 
shares, when transferred to holders of Company Stock pursuant to the terms of 
the Merger, will be validly issued, fully paid and nonassessable shares of 
Champion Common Stock.
 
    3.3  AUTHORITY.  The execution and delivery of this Agreement do not, and 
the consummation of the Merger and transactions contemplated hereby will not, 
violate any provision of the Articles of Incorporation or By-laws of 
Champion, or any provision of, or result in the acceleration of any 
obligation under, any material mortgage, deed of trust, note, lien, lease, 
franchise, license, permit, agreement, instrument, order, arbitration award, 
judgment, injunction or decree, or result in the termination of any material 
license, franchise, lease, or permit to which Champion is a party or by which 
it is bound, and will not violate or conflict with any other material 
restriction of any kind or character to which Champion is subject, except 
that the prior consent to the Merger must be obtained from PNC Bank, N.A., 
pursuant to the terms of a Credit Agreement by and among Champion, certain 
banks party thereto and PNC Bank, N.A., as Agent, dated March 31, 1997, which 
consent Champion is reasonably confident of obtaining. Based upon the Company 
Financial Statements hereinafter defined, the consummation of the Merger and 
the transactions contemplated by this Agreement do not require any filings 
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or any 
successor law, and regulations and rules issued pursuant thereto.
 
    3.4  CHAMPION FINANCIAL STATEMENTS.  Champion has delivered to Company 
prior to the execution of this Agreement copies of the following financial 
statements of Champion (which, together with all future financial statements 
to be furnished are collectively referred to herein as the "Champion 
Financial Statements"): the audited Consolidated Balance Sheets of Champion 
as of October 31, 1996 and October 31, 1995, and the related Consolidated 
Income Statements, Consolidated Statements of Changes in Shareholders' Equity 
and Consolidated Statements of Cash Flows for the years then ended, and the 
notes thereto. The Champion Financial Statements (as of the dates thereof and 
for the periods covered thereby):
 
    (a) are in accordance with the books and records of Champion, which are
complete and correct in all material respects

<PAGE>


that are required by generally accepted accounting principles (except as 
otherwise required or approved by applicable regulatory authorities or by 
applicable law) and which have been maintained in accordance with good 
business practices; and
 
    (b) present fairly the financial position and results of operations and 
changes in financial position of Champion as of the dates and for the periods 
indicated, in accordance with generally accepted accounting principles 
(except as otherwise required or approved by applicable regulatory 
authorities or by applicable law), applied on a basis consistent with prior 
years, and do not fail to disclose any material extraordinary or 
out-of-period items.
 
    3.5  ACCURACY OF ANNUAL REPORTS.  The annual report of Champion to its 
shareholders for the year 1996 heretofore delivered to Company does not 
contain as of the date thereof any untrue statement of material fact or omit 
to state any material fact necessary to make the statements therein not 
misleading.
 
    3.6  ABSENCE OF UNDISCLOSED LIABILITIES.  At October 31, 1996, Champion 
had no obligation or liability (contingent or otherwise) which was material, 
or which when combined with all similar obligations or liabilities would have 
been material, to Champion (i) except as disclosed in the Champion Financial 
Statements or as disclosed to Company in writing; nor does there exist a set 
of circumstances resulting from transactions effected or events occurring on 
or prior to October 31, 1996, or from any action omitted to be taken during 
such period that, to the knowledge of Champion, could reasonably be expected 
to result in any such material obligation or liability, except as previously 
disclosed to Company in writing, or as disclosed or provided for in the 
Champion Financial Statements. The amounts set up as liabilities for taxes in 
the Champion Financial Statements are sufficient for the payment of all 
respective taxes (including, without limitation, federal, state, local and 
foreign excise, franchise, property, payroll, income, capital stock and sales 
and use taxes) accrued in accordance with generally accepted accounting 
principles and unpaid at October 31, 1996. Since October 31, 1996, Champion 
has not incurred or paid any obligation or liability which would be material 
(on a consolidated basis) to Champion, except for obligations incurred or 
paid in connection with transactions by it in the ordinary course of its 
business consistent with generally accepted practices and except as disclosed 
herein.
 
    3.7  COMPLIANCE WITH LAWS.  Champion:
 
    (a) is in compliance with all laws, regulations, reporting and licensing
requirements and orders applicable to its business or any of its employees
(because of such employee's activities on behalf of it), the breach or violation
of which could have a material adverse effect on such business; and

<PAGE>
 
    (b) has received no notification (not previously disclosed to Company in 
writing) from any agency or department of federal, state or local government 
or regulatory authorities asserting that it is not in compliance with any of 
the statutes, regulations, rules or ordinances which such governmental 
authority or regulatory authority enforces, or threatening to revoke any 
license, franchise, permit or governmental authorization, and is subject to 
no agreement with any regulatory authorities with respect to its assets or 
business.
 
    3.8  ABSENCE OF CERTAIN CHANGES OR EVENTS.  Since October 31, 1996, 
Champion has not: (i) incurred any material liability, except in the ordinary 
course of its business, and except as permitted pursuant to this Agreement or 
as disclosed in the Champion Financial Statements; (ii) suffered any material 
adverse change in its business, operations, assets or condition (financial or 
other); or (iii) failed to operate its business consistent with generally 
acceptable practice.
 
    3.9  REPORTS.  Since January 1, 1996, Champion has filed all reports and 
statements, together with any amendments required to be made with respect 
thereto, which it was required to file with: (i) the Securities and Exchange 
Commission, including, but not limited to, Forms 10-K, Forms 10-Q, Forms 8-K 
and proxy statements; (ii) any other governmental agency or regulatory 
authority having jurisdiction over its operations. Each of such reports and 
documents, including the financial statements, exhibits and schedules 
thereto, and each other document delivered to Company by Champion does not 
contain any statement which, at the time and in the light of the 
circumstances under which it was made, is false or misleading with respect to 
any material fact or which omits to state any material fact necessary in 
order to make the statements contained therein not false or misleading.
 
    3.10  INTERIM COMPANY FORMATION; ADOPTION AGREEMENT.  Prior to the 
Closing Date, Champion at its sole cost and expense shall cause to be 
organized Interim Company as a North Carolina corporation and shall cause 
Interim Company to execute and enter into an Adoption Agreement in 
substantially the form attached hereto as "Exhibit A" and a Plan of Merger in 
substantially the form annexed hereto as "Exhibit B" and cause Interim 
Company to take such action as is provided in this Agreement or in said 
Adoption Agreement or Plan of Merger upon Interim Company's part to be taken. 
Immediately prior to the Effective Time, Champion will own all of the issued 
and outstanding shares of Interim Company's capital stock.
 
    3.11  BEST EFFORTS.  On or prior to the Closing Date (hereinafter defined 
in Section 7.1 hereof), Champion will, to the extent permitted by applicable 
laws, rules and regulations, take such actions, and execute and deliver all 
such agreements, documents, certificates or amendments to this Agreement as 
may be necessary or desirable to effectuate the provisions and intent of this 
Agreement.

<PAGE>

 
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF COMPANY
 
    Company hereby represents and warrants to and covenants with Champion 
that:


    4.1 ORGANIZATION, STANDING AND AUTHORITY. Company is a corporation duly 
organized, validly existing and in good standing under the laws of the State 
of North Carolina. Company has the corporate power to execute and deliver 
this Agreement, and has taken all action required by law, its Articles of 
Incorporation, its By-laws or otherwise, to authorize such execution and 
delivery, the Merger and the consummation of the transactions contemplated 
hereby, and this Agreement is a valid and binding agreement of Company in 
accordance with its terms, subject only to the requirement of ratification, 
confirmation and approval by Company's shareholders. At the Effective Time, 
Company will have corporate power to carry on its business as then to be 
conducted and will be qualified to do business in every jurisdiction in which 
the character and location of the assets to be owned by it or the nature of 
the business to be transacted by it require qualification.
 
    4.2  CAPITAL STRUCTURE.  The authorized capital stock of Company consists 
of 10,000 shares of Company Stock, par value of $10.00 per share, of which 
550 shares are issued and outstanding and are fully paid and non-assessable. 
Company does not have any subscriptions, options, warrants, calls, or other 
agreements or commitments, of any kind relating to or obligating it to issue 
any shares of its capital stock. Further, there are no securities outstanding 
which are convertible into capital stock of Company. None of the shares of 
Company Stock has been issued in violation of any preemptive rights of 
shareholders.
 
    4.3  NO SUBSIDIARIES.  Company has no subsidiaries and Company will not 
organize or acquire any subsidiaries prior to the Effective Time of the 
Merger without the written consent of Champion.
 
    4.4  AUTHORITY.  Except as disclosed by Company in writing, the execution 
and delivery of this Agreement do not, and the consummation of the Merger and 
transactions contemplated hereby will not, violate any provision of the 
Articles of Incorporation or By-laws of Company, or any provision of, or 
result in the acceleration of any obligation under, any mortgage, deed of 
trust, note, lien, lease, franchise, license, permit, agreement, instrument, 
order, arbitration award, judgment, injunction or decree, or result in the 
termination of any material license, franchise, lease, or permit to which 
Company is a party or by which it is bound, and will not violate or conflict 
with any other material restriction of any kind or character to which Company 
is subject.

<PAGE>
 
    4.5  COMPANY FINANCIAL STATEMENTS.  Company has delivered to Champion 
prior to the execution of this Agreement copies of the following financial 
statements of Company (which, together with all future financial statements 
to be furnished are collectively referred to herein as the "Company Financial 
Statements"): the compiled Balance Sheets of Company as of June 30, 1996, 
June 30, 1995 and June 30, 1994, and the related Statement of Operations and 
Retained Earnings and Statement of Cash Flows for the years then ended. The 
Company Financial Statements (as of the dates thereof and for the periods 
covered thereby):
 
    (a) are in accordance with the books and records of Company, which are 
maintained on the income tax basis of accounting, a method that, in part, 
recognizes cash receipts and disbursements and accelerated methods of 
depreciation but does not recognize items such as current expenses or the 
accumulated liability for deferred executive compensation, obligations for 
future compensated absences of employed personnel, reserve for bad debts and 
other such non cash expenses that are not currently deductible for federal or 
state income tax purposes, and are complete and correct in all material 
respects that are required by such method and which have been maintained in 
accordance with good business practice except that inventory quantity and 
value accounts as contained in the Company's general ledger are recorded and 
adjusted therein only at the end of each fiscal year; and
 
    (b) present, on a compiled basis, consistent with prior years, the 
financial position and results of operations and changes in financial 
position of the Company as of the dates and for the periods indicated, in 
accordance with the income tax basis of accounting, which, in part, 
recognizes cash receipts and disbursements and accelerated methods of 
depreciation but does not recognize items such as current expenses or the 
accumulated liability for deferred executive compensation, obligations for 
future compensated absences of employed personnel, reserve for bad debts and 
such other non cash expenses that are not currently deductible for federal or 
state income tax purposes, and which do not include all of the disclosures 
required by generally accepted accounting principles that might influence 
conclusions about the Company's financial position or results of operations 
for those who are not informed about such internal matters of the Company, 
and which contain certain income and expense modifications related to the 
Company's income tax policy as described in the Company Memorandum (Comments 
on 1995 and 1996 Financial Statements) from Bruce Fowler to Glenn Wilcox 
dated January 13, 1997 (a copy of which has been previously provided to 
Champion).
 
    Company's Balance Sheet and the related Statement of Operations and Retained
Earnings and Statement of Cash Flows, and the notes thereto, for the fiscal
quarter ending September 30, 1996, and for each fiscal quarter thereafter until
the Effective Time, all of which Company shall deliver to Champion as soon as
practicable, will be prepared in accordance with the income tax basis of
accounting as described in (b) except that, since the

<PAGE>


Company's accounting policy does not provide for interim adjustment of 
inventory quantities and values, inventory values reflected therein have been 
estimated.
 
    4.6  ABSENCE OF UNDISCLOSED LIABILITIES.  At June 30, 1996, the Company 
had no obligation or liability (contingent or otherwise) which was material, 
or which when combined with all similar obligations or liabilities would have 
been material, to Company except as disclosed in the Company Financial 
Statements or as previously disclosed to Champion in writing; nor does there 
exist a set of circumstances resulting from transactions effected or events 
occurring on or prior to June 30, 1996, or from any action omitted to be 
taken during such period that, to the knowledge of Company, could reasonably 
be expected to result in any such material obligation or liability, except as 
previously disclosed to Champion in writing, or as disclosed or provided for 
in the Company Financial Statements. The amounts set up as liabilities for 
taxes in the Company Financial Statements are sufficient for the payment of 
all respective taxes (including, without limitation, federal, state, local 
and foreign excise, franchise, property, payroll, income, capital stock and 
sales and use taxes) accrued in accordance with generally accepted accounting 
principles and unpaid at June 30, 1996. Since June 30, 1996, the Company has 
not incurred or paid any obligation or liability which would be material (on 
a consolidated basis) to Company, except for obligations incurred or paid in 
connection with transactions by it in the ordinary course of its business 
consistent with generally accepted practices and except as disclosed herein.
 
    4.7  TAX MATTERS.
 
    (a) All federal, state, local and foreign tax returns, (including, 
without limitation, estimated tax returns, withholding tax returns with 
respect to employees, and FICA and FUTA returns) required to be filed by or 
on behalf of Company have been timely filed or requests for extensions have 
been timely filed, granted and have not expired and all returns filed are 
complete and accurate to the best information and belief of Company 
management. All taxes shown on filed returns have been paid. As of the date 
hereof, and as of the Effective Time, there is and shall be no pending audit 
examination, deficiency or refund litigation or matter in controversy with 
respect to any taxes that might result in a determination adverse to Company, 
except as reserved against in the Company Financial Statements, or as 
previously disclosed to Champion in writing. All taxes, interest, additions 
and penalties due with respect to completed and settled examinations or 
concluded litigation have been paid.
 
    (b) Except as previously disclosed to Champion in writing, the Company 
has not executed an extension or waiver of any statute of limitations on the 
assessment or collection of any tax due that is currently in effect.

<PAGE>
 

    (c) To the extent any federal, state, local or foreign taxes are due from 
Company for the period or periods beginning July 1, 1996, or thereafter 
through and including the Effective Time, adequate provision on an estimated 
basis has been or will be made for the payment of such taxes by establishment 
of appropriate tax liability accounts on the last monthly financial 
statements of Company, prepared before the Effective Time.
 
    (d) Since the Company's books and records and Financial Statements have 
been maintained on the income tax basis of accounting, no deferred income 
taxes have been recorded.
 
    4.8  PROPERTIES.  Except as previously disclosed to Champion in writing 
or disclosed in Company Financial Statements, Company has good and marketable 
title, free and clear of all liens, encumbrances, charges, defaults or 
equities of whatever character, to all of the respective properties and 
assets, tangible or intangible, whether real, personal or mixed, reflected in 
the Company Financial Statements as being owned by it at June 30, 1996 or 
acquired by it after June 30, 1996. All buildings, and all fixtures, 
equipment and other property and assets which in the opinion of management 
are material to its business, held under leases or subleases by Company are 
held under valid instruments enforceable in accordance with their respective 
terms (except as previously disclosed in writing to Champion and except as 
enforceability may be limited by applicable bankruptcy, insolvency, 
reorganization, moratorium or other similar laws affecting the enforcement of 
creditors' rights generally and except that the availability of the equitable 
remedy of specific performance or injunctive relief is subject to the 
discretion of the court before which any proceedings may be brought). The 
policies of fire, theft, liability and other insurance maintained with 
respect to the assets or businesses of Company provide adequate coverage 
against loss.
 
    4.9  COMPLIANCE WITH LAWS.  Except as previously disclosed in writing to
Champion, the Company:
 
    (a) is in compliance with all laws, regulations, reporting and licensing 
requirements and orders applicable to its business or any of its employees 
(because of such employee's activities on behalf of it), the breach or 
violation of which could have a material adverse effect on such business; and
 
    (b) has received no notification (not previously disclosed to Champion in 
writing) from any agency or department of federal, state or local government 
or regulatory authorities or the staff thereof asserting that any such entity 
is not in compliance with any of the statutes, regulations, rules or 
ordinances which such governmental authority or regulatory authority 
enforces, or threatening to revoke any license, franchise, permit or 
governmental authorization, and is subject to no agreement with any 
regulatory authorities with respect to its assets or business.

<PAGE>

 
    4.10  EMPLOYEE BENEFIT PLANS.  Except as previously disclosed in writing 
to Champion, with respect to any plan or arrangement of Company which 
constitutes an employee benefit plan within the meaning of Section 3(3) of 
The Employees Retirement Income Security Act of 1974 ("ERISA"):
 
    (a) Except for liabilities to the Pension Benefit Guaranty Corporation 
pursuant to Section 4007 of ERISA, all of which have been fully paid, and 
except for liabilities to the Internal Revenue Service under  Section 4971 of 
the Internal Revenue Code of 1986, if any, all of which have been fully paid, 
the Company has no liability to the Pension Benefit Guaranty Corporation or 
to the Internal Revenue Service with respect to any pension plan qualified 
under Section 401 of the Internal Revenue Code of 1986.
 
    (b) All "employee benefit plans", as defined in Section 3(3) of ERISA, 
which cover one or more employees employed by Company (each individually, a 
"Plan", and collectively, the "Plan") comply in all material respects with 
ERISA and, where applicable for tax-qualified or tax-favored treatment, with 
the Internal Revenue Code of 1986. As of June 30, 1996, no material liability 
exists under any Plan that has not been disclosed in writing to Champion. 
Neither the Plans nor any trustee or administrator thereof has engaged in a 
"prohibited transaction" within the meaning of Section 406 of ERISA or, where 
applicable, Section 4975 of the Internal Revenue Code of 1986 for which no 
exemption is applicable, nor have there been any "reportable events" within 
the meaning of Section 4043 of ERISA for which the 30-day notice therefor has 
not been waived.
 
    (c) No litigation is pending against any plan or plan fiduciary seeking 
the payment of benefits or alleging a breach of trust or fiduciary duty by 
any plan fiduciary.
 
    (d) Company is not a party to any multiemployer pension plan as defined 
in Section 414(f) of the Code and Section 3(37) of ERISA.
 
    4.11  COMMITMENTS AND CONTRACTS.  Except as previously disclosed in 
writing to Champion, the Company is not a party or subject to any of the 
following (whether written or oral, express or implied):
 
    (i) any employment contract or understanding (including any 
understandings or obligations with respect to severance or termination pay 
liabilities or fringe benefits) with any present or former officer, director, 
employee or consultant (other than those which are terminable at will by 
Company);
 
    (ii) any plan, contract or understanding providing for bonuses, pensions,
options, deferred compensation, retirement payments, profit sharing or similar
understandings with respect to

<PAGE>


any present or former officer, director or consultant;
 
    (iii) any contract or agreement with any labor union;
 
    (iv) any contract not made in the ordinary course of business containing 
covenants limiting the freedom of Company to compete in any line of business 
or with any person or involving any restriction of the area in which, or 
method by which, Company will carry on its business (other than as may be 
required by law or applicable authorities);
 
    (v) any lease or other contract with annual rental payments or payments 
aggregating $12,000.00 or more.
 
    4.12  LABOR.  No work stoppage involving Company is pending or, to the 
best of Company's knowledge, threatened. Company is not involved in, or 
threatened with or affected by, any labor dispute, arbitration, lawsuit or 
administrative proceeding which could materially and adversely affect the 
business of Company. Employees of Company are not represented by any labor 
union nor are any collective bargaining agreements otherwise in effect with 
respect to such employees.
 
    4.13  MATERIAL CONTRACTS FURNISHED.  Company has made available to 
Champion true and complete copies of all material contracts, leases and other 
agreements to which Company is a party or by which it is bound and of all 
employment, pension, retirement, stock option, profit sharing, deferred 
compensation, consultant, bonus, group insurance, or similar plans with 
respect to any of the directors, officers, or other employees of Company.
 
    4.14  MATERIAL CONTRACTS.  Except as previously disclosed to Champion in 
writing and except as is otherwise provided in this Agreement, neither the 
Company or any of its respective assets, businesses or operations is, as of 
the date hereof, a party to, or is bound or affected by, or receives benefits 
under, (i) any material agreement, arrangement or commitment not cancellable 
by it without penalty, other than agreements, arrangements or commitments 
entered into in the ordinary course of its business and negotiated on an 
arms-length basis, or (ii) any material agreement, arrangement or commitment 
relating to the employment, election or retention in office of any director 
or officer other than agreements, arrangements or commitments entered into in 
the ordinary course of its business and negotiated on an arms-length basis.
 
    4.15  MATERIAL CONTRACT DEFAULTS.  Company is not in default in any material
respect under any contract, agreement, commitment, arrangement, lease, insurance
policy or other instrument to which it is a party or by which its respective
assets, business or operations may be bound or affected or under which it or its
respective assets, business or operations receive benefits, and there has not
occurred any event which with the lapse of time or the giving of notice or both
would constitute such a default,

<PAGE>


except as previously disclosed to Champion in writing.
 
    4.16  LEGAL PROCEEDINGS.  Except as previously disclosed to Champion by 
Company in writing, there are no actions, suits or proceedings instituted or 
pending, or to the best knowledge of Company threatened (or unasserted but 
considered probable of assertion and which if asserted would have at least a 
reasonable probability of an unfavorable outcome), including eminent domain 
proceedings, against or relating to Company, or against any property, asset, 
interest or right of Company, that could have a material and adverse effect 
on the condition (financial or other, present or prospective), business, 
properties, assets, operations, liabilities or prospects of Company, or that 
threaten or would impede the consummation of the transactions contemplated by 
this Agreement. The Company is not a party to any agreement or instrument or 
subject to any charter or other corporate restriction or any judgment, order, 
writ, injunction, stay, decree, rule, regulation, code or ordinance that 
threatens or might impede the consummation of the transactions contemplated 
by this Agreement.
 
    4.17  ABSENCE OF CERTAIN CHANGES OR EVENTS.  Since June 30, 1996, the 
Company has not: (i) incurred any material liability, except in the ordinary 
course of its business, consistent with generally acceptable practice and 
except as permitted pursuant to this Agreement; (ii) suffered any material 
adverse change in its business, operations, assets or condition (financial or 
other); or (iii) failed to operate its business consistent with generally 
acceptable practice.
 
    4.18  ACCOUNTS RECEIVABLE.  All notes and accounts receivable of the 
Company shown on the Company Financial Statements or thereafter acquired have 
been collected or are current and collectible subject to returns and 
allowances in the ordinary course of business (in the case of each note in 
accordance with its terms, and in the case of each account within 30 days 
after billing) at the aggregate recorded amounts thereof on the books of the 
Company and are subject to no counterclaims or set-offs. On February 28, 
1997, the aggregate amount of all such receivables is $708,847.02 of which 
$87,554.26 has not been paid on the date due, and the aggregate amount of all 
such accounts receivable which have not been paid for 60 days or more does 
not exceed $8,229.15.
 
    4.19  INVENTORIES.  All inventories of the Company, whether or not 
reflected in the Company Balance Sheet, are of a quality and quantity usable 
and salable in the ordinary course of business, except for obsolete items and 
items of below-standard quality, all of which, in the aggregate, are 
immaterial in amount. Items included in such inventories are carried on the 
books of the Company, and are valued on the Company Balance Sheet, at the 
lower of cost or market and, in any event, at not greater than their net 
realizable value, on an item by item basis, after appropriate deduction for 
costs of completion, marketing costs, transportation expense, and allocation 
of overhead.
 
<PAGE>

    4.20  PROPRIETARY RIGHTS.  The Company owns or possesses adequate 
licenses or other rights to use all patents, trademarks, trade names, 
copyrights, inventions, formulae, methods and processes (all such items being 
hereinafter referred to as "Intangible Property") currently used by it in the 
conduct of its business, without any known conflict with the rights of 
others. No royalties, honoraria or fees are payable by the Company to any 
person by reason of the ownership or use of the Intangible Property. All 
items of Intangible Property are valid and in good standing and are adequate 
and sufficient to permit the Company to conduct its business as now operated, 
and no other rights of the kinds enumerated are due or required by the 
Company in its operations. There are no licenses, sublicenses or agreements 
relating to their use now in effect, and none of the aforesaid are being 
infringed by others in any material way. No claim is pending or threatened or 
has been made within the past five years, to the effect that operation by the 
Company of its business or the manufacture or sale of any of its products, or 
any formula, method, process, part or material it employs, infringes or 
conflicts in any way upon any rights of the type enumerated above owned or 
claimed by others.
 
    4.21  ENVIRONMENTAL MATTERS.
 
          (a) The operations of the business of the Company and the buildings 
in which it is conducted conform with all applicable Federal, state and local 
laws, ordinances and regulations (including those relating to zoning and 
environmental protection), and all buildings or operations of the Corporation 
and the business that are subject to the Occupational Safety and Health Act 
of 1970, as amended, comply with employee working conditions as prescribed by 
such Act.
 
          (b) The Company has no underground storage tanks, either empty or 
containing any liquid, including but without limitation solvents, fuel or 
waste oil, on any premises used in its business.
 
          (c) The Company has obtained all permits, licenses and other 
authorizations and filed all notices which are required to be obtained or 
filed by Company for the operation of its business under Federal, state and 
local laws relating to pollution, protection of the environment or waste 
disposal ("Environmental Laws"). The Company is in compliance in all respects 
(i) with all terms and conditions of all required permits, licenses and 
authorizations; and (ii) all other applicable limitations, restrictions, 
conditions, standards, prohibitions, requirements, obligations, schedules and 
timetables contained in the Environmental Laws or contained in any law, 
regulation, code, plan, order, decree, judgment, notice or demand letter 
issued, entered, promulgated or approved thereunder. There are no past or 
present events, conditions, circumstances, activities, practices, incidents, 
actions or plans which may interfere with or prevent 

<PAGE>

continued compliance in all respects, or which may give rise to any common 
law or statutory liability, or otherwise form the basis of any claim, action, 
suit, proceeding, hearing or investigation, based on or related to the 
manufacture, processing, distribution, use, treatment, storage, disposal, 
transport, or handling, or the emission, discharge, release or threatened 
release into the environment, of any pollutant, contaminant, waste or 
hazardous or toxic material with respect to the Company or its businesses, 
properties or plants.
 
          (d) There are no actions, suits or proceedings, or demands, claims, 
notices or investigations (including, without limitation, notices, demand 
letters or requests for information from any environmental agency) instituted 
or pending, or threatened relating to the liability of the Company or any of 
its operations or buildings under any Environmental Law.
 
    4.22  NO BROKER.  The Company has incurred any liability for finder's, 
agent's or brokerage fees, commissions or compensation in connection with 
this Agreement or the transactions contemplated hereby.
 
    4.23  BEST EFFORTS.  On or prior to the Closing Date (hereinafter 
defined), Company will, to the extent permitted by applicable laws, rules and 
regulations, take such actions and execute and deliver all such agreements, 
documents, certificates or amendments to this Agreement as may be necessary 
or desirable to effectuate the provisions and intent of this Agreement.

    4.24  CONDUCT OF BUSINESS--NEGATIVE COVENANTS OF COMPANY.  Except as 
otherwise contemplated hereby, between the date hereof and the Effective 
Time, or the time when this Agreement terminates as provided herein, the 
Company will not, without the prior written approval of the President of 
Champion:
 
          (a) Make any change in its authorized capital stock.
 
          (b) Issue any shares of its capital stock, securities convertible 
into its capital stock, or any long term debt securities.
 
          (c) Issue or grant any options, warrants, or other rights to 
purchase shares of its common stock.
 
          (d) Declare or pay any dividends or other distributions on any 
shares of common stock.
 
          (e) Purchase or otherwise acquire or agree to acquire for a 
consideration any share of Company Stock (other than in a fiduciary capacity).
 
          (f) Enter into or amend any employment, pension, retirement, stock 
option, profit sharing, deferred compensation, consultant, bonus, group 
insurance, or similar plan in respect of 

<PAGE>

any of its directors, officers, or other employees, or increase the current 
level of contributions to any such plan now in effect.
 
          (g) Take any action materially and adversely affecting this 
Agreement or the transactions contemplated hereby or the financial condition 
(present or prospective), businesses, properties, or operations of Company.
 
          (h) Acquire, consolidate or merge with any other company, 
corporation, or association, or acquire, other than in the ordinary course of 
business, any assets of any other company, corporation, or association.
 
          (i) Mortgage, pledge, or subject to a lien or any other 
encumbrance, any of its assets, dispose of any of its assets, incur or cancel 
any debts or claims, or increase the current level of compensation or 
benefits payable to its officers, employees or directors except in the 
ordinary course of business as heretofore conducted or take any other action 
not in the ordinary course of their business as heretofore conducted or incur 
any material obligation or enter into any material contract.
 
          (j) Amend its Articles of Incorporation, By-laws or Charter.
 
          (k) Take any action to solicit, initiate, encourage, or authorize 
any person, including directors, officers and other employees, to solicit 
from any third party any inquiries or proposals relating to the disposition 
of the business or assets of Company, or the acquisition of their Company 
Stock, or the merger of Company with any person other than Champion, and 
Company shall promptly notify Champion orally of all the relevant details 
relating to all inquiries and proposals which it may receive relating to any 
of such matters. Nothing herein shall be construed to limit or affect the 
fiduciary obligation of Company's officers and directors to Company 
shareholders.
 
    4.25  CONDUCT OF BUSINESS--AFFIRMATIVE COVENANTS OF COMPANY.  Company
covenants and agrees that:
 
          (a) It will promptly advise Champion in writing of the name and 
address of and number of shares of Company Stock held by each shareholder who 
elects to exercise his, her or its rights to appraisal in connection with the 
Merger pursuant to the North Carolina Corporation Act.
 
          (b) Subsequent to the date of this Agreement and prior to the 
Effective Time it will operate its business only in the normal course and 
manner.
 
          (c) From and after the execution of this Agreement, Company will 
promptly advise Champion of any material adverse change in the financial 
condition, assets, business operations or key personnel of Company and of any 
material breach of any 

<PAGE>

representation or warranty made by Company in this Agreement.
 
          (d) Immediately upon the execution of this Agreement, it will 
direct its accountants to give Champion access to all information, documents 
and working papers pertaining to Company.
 
          (e) Subsequent to the date of this Agreement and prior to the 
Effective Time, Company shall maintain in full force and effect adequate 
fire, casualty, public liability, employee fidelity and other insurance 
coverage in effect on the date of this Agreement in order to protect Company 
against losses for which insurance protection can reasonably be obtained.
 
          (f) Within ten days from the execution of this Agreement, Company 
shall furnish to Champion a list, accurate as of the close of business on a 
date not more than ten (10) days prior to the date on which such list is 
furnished, containing the names and addresses of all holders of Company Stock 
as the same appear on the stock registration books of Company and the number 
of shares held by each. At the Effective Time, Company shall furnish to 
Champion a list, true, correct and complete as of the close of business on 
the preceding day, containing the names and addresses of all holders of 
Company Stock as the same appear on Company's stock registration books and 
the number of shares held by each.
 
          (g) It will use its best efforts in good faith to take or cause to 
be taken all action required under this Agreement on its part to be taken as 
promptly as practicable so as to permit the consummation of the Merger and 
the transactions contemplated hereby at the earliest possible date and 
cooperate fully with Champion to that end.
 
Section 5. Indemnification and Confidentiality
- ----------------------------------------------
 
    5.1  ACCESS AND INFORMATION.  Company and Champion shall each afford to 
the other, and to the other's accountants, counsel and other representatives, 
full access during normal business hours throughout the period prior to the 
Closing Date to all of its properties, books, contracts, commitments and 
records (including but not limited to tax returns), and, during such period, 
each shall furnish promptly to the other (i) a copy of each report, schedule 
and other document filed or received by it pursuant to the requirements of 
federal or state securities and banking laws and (ii) all other information 
concerning its business, properties and personnel as such other party may 
reasonably request, provided that no investigation pursuant to this Section 
5.1 shall affect any representations or warranties or the conditions to the 
obligations of the parties to consummate the Merger.
 
    5.2  FURNISHING INFORMATION AND INDEMNIFICATION.  Champion and the 
Company have furnished or will furnish as soon as practicable after the date 
of this Agreement, to each other all the information (including financial 
statements, information and 

<PAGE>

schedules) concerning themselves required for inclusion in:
 
          (a) any registration statement or other statement to be filed with 
the Securities and Exchange Commission on behalf of Champion under the 
Securities Act of 1933 in connection with the Merger and any proxy statement 
to solicit the approval of Company shareholders to the Merger, and any 
documents to be filed with the Securities and Exchange Commission in 
connection therewith;
 
          (b) any filings to be made by Champion with state securities 
authorities in connection with the transactions contemplated hereunder; and
 
          (c) any other request, application, statement, report or material 
to be made or filed by any party to or with any regulatory authority or any 
governmental agency, department or instrumentality in connection with the 
transactions contemplated hereunder.
 
    Champion represents and warrants to Company, and Company represents and 
warrants to Champion, that all information so furnished for such requests, 
statements, applications, reports and materials shall be true and correct in 
all material respects without omission of any material fact required to be 
stated to make the information therein not false or misleading. Champion will 
indemnify and hold harmless Company, and Company will indemnify and hold 
harmless Champion and each of their respective directors and officers, and 
each person, if any, who controls such entities within the meaning of the 
Securities Act of 1933, from and against any and all losses, damages, 
expenses or liabilities to which such entity, or any such director, officer 
or controlling person may become subject under applicable laws (including the 
Securities Act of 1933 and the Securities Exchange Act of 1934) and rules and 
regulations thereunder and will  reimburse the other, and any such director, 
officer or controlling person, for any legal or other expenses reasonably 
incurred in connection with investigating or defending any actions, whether 
or not resulting in liability, insofar as such losses, damages, expenses, 
liabilities or actions arise out of or are based upon any untrue statement or 
alleged untrue statement of a material fact contained in any such request, 
statement, application, report or material or arise out of or are based upon 
the omission or alleged omission to state therein a material fact required to 
be stated therein or necessary in order to make the statements therein not 
misleading, but only insofar as any such statement or omission was made in 
reliance upon and in conformity with information furnished in writing in 
connection therewith by such indemnifying party for use therein.
 
    5.3  CONFIDENTIALITY.  It is hereby agreed that, except (i) as otherwise 
required in the performance by the parties of their respective obligations 
hereunder or under the Merger and (ii) as otherwise required by law, any 
non-public information received from the other party during the course of the 
investigation 

<PAGE>

contemplated pursuant hereto shall remain and be kept as confidential 
information by it and all copies thereof will be returned promptly at the 
request of the party furnishing such information in the event of the 
termination of this Agreement and the Merger. Each of the parties may 
disclose such information to its respective employees, affiliates, counsel, 
accountants, representatives, professional advisors and consultants, and 
shall require each of them to agree to keep all such information confidential.
 
    5.4  UPDATES TO INFORMATION.  At the reasonable request of any party hereto,
any other party will update by amendment or supplement any disclosure made in
writing by such party to the other party and each party hereby represents and
warrants that such written disclosures, as so amended or supplemented, shall be
true, correct and complete as of the date or dates thereof.
 
Section 6. Conditions Precedent
- -------------------------------
 
    The consummation of this Agreement and the Merger is conditioned upon the 
following:
 
          (a) SHAREHOLDER APPROVAL. The shareholders of Company and Interim 
Company shall have ratified, confirmed and approved this Agreement and the 
terms and conditions herein contained by the affirmative vote of shareholders 
of each such corporation, owning at least a majority of its capital stock 
outstanding, and final approval of this Agreement shall have taken place as 
provided in Section 10 hereof, and all provisions of Section 10 shall have 
been fully complied with.
 
          (b) AFFILIATES. Company agrees to deliver to Champion a letter 
identifying all persons whom it believes to be, at the time the Merger is 
submitted to a vote of Company shareholders, "affiliates" of Company, for 
purposes of Rule 145 or Rule 144 (as applicable) under the Securities Act of 
1933, and shall use its best efforts to cause each person who is identified 
as an "affiliate" in such letter to deliver to Champion prior to the Closing 
Date an Investment Letter containing a written agreement providing that such 
person will agree not to sell, pledge, transfer or otherwise dispose of the 
shares of Champion Common Stock to be received by such person in the Merger 
except in compliance with the applicable provisions of the Securities Act of 
1933 and the rules and regulations thereunder. Further, if the Merger will 
qualify for pooling of interests accounting treatment, each of the 
aforementioned affiliates shall have delivered to Champion, at or prior to 
the Closing Date, a written agreement providing that (i) such "affiliate" of 
Company shall not dispose of any shares of Champion Common Stock for a period 
commencing at least thirty (30) days prior to the Effective Time, and (ii) 
that shares of Champion Common Stock issued to "affiliates" of Company in 
exchange for Company Stock and any other shares of Champion Common Stock 
owned by "affiliates" of Company shall not be transferrable until such time 
as financial results covering at 

<PAGE>

least thirty (30) days of combined operations of Interim Company and Company 
have been published within the meaning of Section 201.01 of the Securities 
and Exchange Commission's Codification of Financial Reporting Policies.
 
          (c) INVESTMENT LETTERS. Champion shall have received Investment 
Letters in the form set forth in Exhibit C executed by all holders of Company 
Stock.
 
          (d) NO DIVESTITURE OR ADVERSE CONDITION. The consummation of the 
Merger shall not have required the divestiture or cessation of any 
significant part of the present operations conducted by Champion and shall 
not have imposed any other condition, which divestiture, cessation or 
condition Champion deems to be materially disadvantageous or burdensome.
 
          (e) ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF 
OBLIGATIONS AND COVENANTS -- CHAMPION. Unless waived by Company, the 
representations and warranties of Champion contained in this Agreement shall 
be correct on and as of the Closing Date and thereafter until the Effective 
Time in all material respects with the same effect as though made on and as 
of such Effective Time except for changes which are not in the aggregate 
material and adverse to the financial condition, businesses, properties, or 
operations of Champion and Champion shall have performed in all material 
respects all of its obligations and agreements hereunder theretofore to be 
performed by it and Company shall have received on the Closing Date an 
appropriate certificate (in affidavit form) to the foregoing effect dated as 
of the Closing Date and executed on behalf of Champion by one or more 
appropriate executive officers of Champion.
 
          (f) ACCURACY OF REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF 
OBLIGATIONS AND COVENANTS -- COMPANY. Unless waived by Champion, the 
representations and warranties of Company contained in this Agreement shall 
be correct on and as of the Closing Date and thereafter until the Effective 
Time with the same effect as though made on and as of such Effective Time 
except for changes which are not in the aggregate material and adverse to the 
financial condition, businesses, properties or operations of Company, and 
Company shall have performed in all material respects all of its obligations 
and agreements hereunder theretofore to be performed by it and Champion shall 
have received on the Closing Date an appropriate certificate (in affidavit 
form) to the foregoing effect dated as of the Closing Date and executed on 
behalf of Company by one or more appropriate executive officers of Company.
 
          (g) OPINION OF COUNSEL FOR COMPANY. Champion shall have received an 
opinion of McGuire, Wood & Bissette, P.A., counsel for Company, dated the 
Closing Date, with respect to such matters as Champion may reasonably request 
and to the effect that: 

<PAGE>

          (1) Company is a corporation duly organized, validly existing and 
in good standing under the laws of the State of North Carolina and is duly 
authorized to own its properties and to conduct its business as then being 
conducted. 

          (2) The authorized capitalization of Company is as set forth in 
such opinion and the shares of Company Stock issued and outstanding or held 
as treasury shares (as of a date specified in such opinion not more than 5 
days prior to the date of such opinion) are as stated in such opinion. Such 
issued and outstanding shares of stock are validly issued, fully paid and 
non-assessable, and were not issued in violation of any preemptive rights of 
the shareholders of Company. As of such date, there are, to the best of such 
counsel's knowledge, no options, warrants, rights, commitments or convertible 
securities outstanding or authorized on behalf of Company, calling for the 
purchase from it of shares of unissued capital stock or capital stock held as 
treasury shares. 

          (3) Company had the corporate power and authority to execute, 
deliver and perform its obligations under this Agreement. This Agreement has 
been duly authorized, executed and delivered by Company and constitutes the 
legal, valid and binding obligation of Company, enforceable in accordance 
with its terms. 

          (4) All necessary corporate proceedings of the board of directors 
and the shareholders of Company, to the extent required by law, its Articles 
of Incorporation and Bylaws or otherwise, to authorize the execution and 
delivery of this Agreement by Company and the consummation of the Merger by 
Company pursuant to this Agreement have been duly and validly taken. The 
number of shares of stock of Company voted for and against the Merger are as 
stated in such counsel's opinion; and the number of shares of such stock as 
to which shareholders have perfected their rights to dissent and appraisal 
under the North Carolina Corporation Act, are as stated in such counsel's 
opinion. 

          (5) The consummation of the Merger will not violate or result in a 
breach of, or constitute a default under, the Articles of Incorporation or 
By-Laws of Company or constitute a breach or termination of, or default 
under, any agreement or instrument of which such counsel has knowledge and 
which would have a material adverse affect on the business of Company, and to 
which Company is a party or by which it or any of its property is bound. 

          (6) Such counsel does not know of any breach of any warranty 
contained in this Agreement on the part of Company or any failure on the part 
of Company to perform any of the conditions precedent to the consummation of 
the Merger imposed upon it herein.
 
          (h) OPINION OF COUNSEL FOR CHAMPION. Company shall have received 
the opinion of Huddleston, Bolen, Beatty, Porter & Copen, counsel for 
Champion, dated the Closing Date, with respect 

<PAGE>

to such matters as Company may reasonably request and to the effect that: 

          (1) Champion is a corporation duly organized, validly existing and 
in good standing under the laws of the State of West Virginia, and is duly 
authorized to own its properties and to conduct its business as then being 
conducted. 

          (2) The authorized capitalization of Champion is as set forth in 
such opinion and the shares of Champion Common Stock issued and outstanding 
(as of a date specified in such opinion not more than 5 days prior to the 
date of such opinion) are as stated in such opinion. Such issued and 
outstanding shares of stock are validly issued, fully paid and 
non-assessable, and were not issued in violation of any preemptive rights of 
the shareholders of Champion. As of such date, there are, to the best of such 
counsel's knowledge, no options, warrants, rights, commitments or convertible 
securities outstanding or authorized on behalf of Champion, calling for the 
purchase from any of them of shares of unissued capital stock or capital 
stock held as treasury shares, except as otherwise permitted by this 
Agreement. 

          (3) All necessary corporate proceedings of the Boards of Directors 
and the shareholders of Champion and Interim Company to the extent required 
by law, their Articles of Incorporation or By-Laws or otherwise, to authorize 
the execution and delivery of this Agreement or the Adoption Agreement and 
the consummation of the Merger pursuant to this Agreement have been duly and 
validly taken. Champion and Interim Company have the corporate power and 
authority to execute, deliver and perform this Agreement or the Adoption 
Agreement. This Agreement has been duly authorized, executed and delivered by 
Champion and Interim Company (by virtue of the Adoption Agreement) and 
constitutes the legal, valid and binding obligation of Champion and Interim 
Company in accordance with its terms. 

          (4) The consummation of the Merger will not violate or result in a 
breach of, or constitute a default under the Articles of Incorporation or 
By-Laws of Champion or constitute a breach or termination of, or default 
under, any agreement or instrument of which such counsel has knowledge and to 
which Champion is a party or by which it or its property is bound. 

          (5) To the best of such counsel's knowledge, all approvals of 
public authorities, federal, state or local, the granting of which is 
necessary for the consummation of the Merger by Champion have been obtained. 

          (6) The shares of Champion Common Stock into which shares of 
Company Stock are to be converted upon the Effective Time will upon the 
Effective Time be duly authorized, and such shares, when transferred to 
holders of Company Stock pursuant to the terms of the Merger, will be validly 
issued, fully paid and nonassessable shares of Champion Common Stock.
 
<PAGE>

          (i) LESS THAN 10% DISSENTERS. Unless waived by Champion, the 
holders of no more than 10% of the outstanding shares of Company Stock shall 
have elected to exercise their statutory rights to appraisal in connection 
with the transactions contemplated hereby, pursuant to the North Carolina 
Corporation Act.
 
          (j) COMFORT LETTER--COMPANY. Ernst & Young LLP or other Certified 
Public Accountants satisfactory to Company shall have audited the financial 
statements of Champion for the year ended October 31, 1996 and, based on such 
review, Company shall have reasonably determined that such statements are 
satisfactory to Company.
 
          (k) COMFORT LETTER--CHAMPION. Ernst & Young LLP or other certified 
public accountants satisfactory to Champion shall have audited the financial 
statements of Company as of and for the year ended June 30, 1996 and, based 
on such audit, Champion shall have reasonably determined that such statements 
are satisfactory to Champion.
 
          (l) POOLING OF INTERESTS ACCOUNTING TREATMENT. Champion shall have 
received from Ernst & Young LLP or other Certified Public Accountants 
satisfactory to it a letter to the effect that in the opinion of such 
Certified Public Accountants, Champion may, for accounting purposes, treat 
the Merger as a pooling of interests (and not as a purchase) in accordance 
with generally accepted accounting principles, and the  Securities and 
Exchange Commission must not have objected to such treatment. A copy of such 
letter shall be delivered by Champion to Shareholders.
 
          (m) OPINION LETTER. Company shall have received an opinion of tax 
counsel acceptable to it and Champion shall have received an opinion of tax 
counsel acceptable to it, to the effect that: 

          (1) The Merger shall constitute and qualify as a reorganization 
within the meaning of Sections 368(a)(1)(A) and 368(a)(2)(E) of the Internal 
Revenue Code and Company, Surviving Company and Champion will each qualify as 
"a party to a reorganization" as that term is defined in the Internal Revenue 
Code; 

          (2) No gain or loss will be recognized by Champion, Company, or 
Surviving Company by reason of the Merger; 

          (3) Provided that the Company Stock is held as a capital asset at 
the Effective Time, the holding period of Champion Common Stock received by 
Company shareholders in exchange for Company Stock will include the holding 
period of the shares of Company Stock so exchanged; 

<PAGE>

          (4) No gain or loss will be recognized by the shareholders of 
Company who exchange their Company Stock for Champion Common Stock pursuant 
to the Merger; and 

          (5) The basis of the Champion Common Stock received by Company 
shareholders will be the same as the basis of the Company Stock surrendered 
in exchange therefor, decreased by the total of any cash received.
 
          (n) The Non-Competition Agreements in all material respects 
identical to the form attached hereto as Exhibits D and E shall have been 
executed by each of Glenn Wilcox, Sr. and Bruce Fowler and delivered to 
Champion.
 
          (o) All approvals and consents to the Merger shall have been 
obtained in writing prior to, and shall be in full force and effect on the 
Closing Date, from all entities whose consent is required, including, without 
limitation, the following:
 
             (i) Komori Financial Services pursuant to Master Lease Agreement 
with the Company dated June 27, 1995;
 
             (ii) Knoxville Printing Company or its successors, as 
beneficiary under Deed of Trust and Security Agreement dated June 7, 1995 
from Company to Steven J. Greene, Trustee; and
 
             (iii) The Bank/First Citizens Bank, as beneficiary under Deed of 
Trust dated June 7, 1995 from Company to James S. Webb, Trustee.
 
    All such consents shall explicitly provide that the respective agreements 
shall survive the Merger in full force and effect, without amendment. Such 
consents shall not be conditioned or restricted in a manner which, in the 
sole judgment of Champion, materially adversely affects the ability of 
Champion to conduct the business of Company after the Merger.
 
          (p) Absence of Material Adverse Changes--Champion. Unless waived by 
Company at or before the Effective Time, there shall have been no material 
adverse change in the financial condition, business or assets of Champion 
since October 31, 1996, and there shall be no suit, action or proceeding 
pending or threatened against Champion which, if successful, would have a 
material adverse effect on Champion or the Surviving Company after the 
consummation of the Merger.
 
          (q) Absence of Material Adverse Changes--Company. Unless waived by 
Champion at or before the Effective Time, there shall have been no material 
adverse change in the financial condition, business or assets of Company 
since June 30, 1996, and there shall be no suit, action or proceeding pending 
or threatened against Company which if successful would have a material 
adverse effect on Company or the Surviving Company after the consummation of 
the Merger.

<PAGE>
 
Section 7. Closing Date and Effective Time
- ------------------------------------------
 
    7.1  CLOSING DATE.  The closing shall be effected as soon as practicable 
after all of the conditions contained herein shall have been satisfied. The 
closing shall be held at the offices of Company in Asheville, North Carolina, 
and the closing date ("Closing Date") shall be a mutually agreeable date, 
but, in no event, later than forty-five (45) days following the date when all 
such conditions are satisfied.
 
    7.2  EFFECTIVE TIME.  Subject to the terms and upon satisfaction on or
before the Closing Date of all conditions specified in this Agreement, the
Merger shall be effective at the time of filing articles of merger with and
acceptance thereof by the Secretary of State of North Carolina (such time herein
called "Effective Time").
 
Section 8. Termination of Agreement
- -----------------------------------
 
    8.1  GROUNDS FOR TERMINATION.  This Agreement and the transactions
contemplated hereby may be terminated at any time prior to the Closing Date,
either before or after the meeting of the shareholders of Company:
 
         (a) By mutual consent in writing of Company and Champion; or
 
         (b) By Company by giving written notice thereof to Champion if (i) a 
material adverse change shall have occurred in the financial condition, 
results of operations or business of Champion since October 31, 1996, or (ii) 
Champion has in any material respect breached any covenant, undertaking, 
representation or warranty contained in this Agreement and such breach has 
not been cured within thirty (30) days after the giving of such notice; or
 
         (c) By Champion by giving written notice thereof to Company if (i) a 
material adverse change shall have occurred in the financial condition, 
results of operations or business of Company since June 30, 1996 or (ii) 
Company has in any material respect breached any covenant, undertaking, 
representation or warranty contained in this Agreement and such breach has 
not been cured within thirty (30) days after the giving of such notice; or
 
         (d) By either Company or Champion upon written notice to the other 
if any regulatory agency whose approval of the transactions contemplated by 
this Agreement is required denies such application for approval by final 
order or ruling (which order or ruling shall not be considered final until 
expiration or waiver of all periods for review or appeal); or
 
         (e) By either Company or Champion upon written notice to the other 
if any condition precedent to either party's 

<PAGE>

performance hereunder is not satisfied or fulfilled; or
 
         (f) By either Company or Champion if the Merger shall violate any 
non-appealable final order, decree or judgment of any court or governmental 
body having competent jurisdiction; or
 
         (g) By either Company or Champion upon the bankruptcy, insolvency or 
assignment for the benefit of creditors of Company or Champion; or
 
         (h) By either Company or Champion, if the shareholders of Company 
shall fail to approve the Merger by the vote required under the North 
Carolina Corporation Act and the Articles of Incorporation and Bylaws of 
Company.
 
    8.2  EFFECT OF TERMINATION.  In the event of termination of this 
Agreement for any reason other than a breach thereof, neither party hereto 
shall have any liability to the other of any nature whatsoever, including any 
liability for loss, damages, or expenses suffered or claimed to be suffered 
by reason thereof, except as provided in Section 8.3. 

    8.3. RETURN OF INFORMATION. In the event of the termination of this 
Agreement for any reason, each party shall deliver to the other party, and 
shall require each of its officers, agents, employees and independent 
advisers (including legal, financial and accounting advisers) to deliver to 
the other party all documents, work papers, and other material obtained from 
such other party relating to the transactions contemplated hereby, whether 
obtained before or after the execution hereof, including information obtained 
pursuant to Section 5 hereof. Each party agrees that notwithstanding any 
other provision contained in this Agreement, the undertakings and covenants 
regarding confidentiality contained in Section 5 shall survive termination of 
this Agreement.
 
Section 9. Waiver and Amendment
- -------------------------------
 
    Except with respect to required approvals of the applicable governmental 
authorities and shareholders, Champion or Company by written instrument 
signed by its President at any time (whether before or after approval of the 
Agreement or the Merger by the shareholders of Company), may extend the time 
for the performance of any of the obligations or other acts of the other and 
may waive, with respect to the other: (i) any inaccuracies in the 
representations or warranties contained in this Agreement or in any document 
delivered pursuant hereto, (ii) compliance with any of the covenants, 
undertakings or agreements, or satisfaction of any of the conditions to its 
obligations, contained in this Agreement, and/or (iii) the performance 
(including performance to the satisfaction of a party or its counsel) of any 
obligations set out herein. This Agreement may be amended or supplemented at 
any time by mutual agreement of the parties (except that they may not be 
amended in any material respect after approval by the shareholders of the 
parties without further approval by such 

<PAGE>

shareholders). Any waiver, amendment or supplement hereof shall be in 
writing. Any waiver by Champion or Company of a condition to its obligation 
to perform this Agreement and the subsequent Closing hereunder shall be 
without prejudice to the rights or remedies it may have arising out of any 
breach of any representation, warranty, covenant or other agreement hereunder.
 
Section 10. Meeting of Shareholders of Company
- ----------------------------------------------
 
    Company shall take all steps necessary to call and hold a meeting of its 
shareholders in accordance with applicable law and the Articles of 
Incorporation and By-laws of Company as soon as practicable for the purpose 
of submitting this Agreement to its shareholders for their ratification, 
approval and confirmation.
 
Section 11. Rights of Dissenting Shareholders
- ---------------------------------------------
 
    Any shareholder of Company who properly exercises his right to dissent 
and perfects his appraisal rights under North Carolina law shall be entitled, 
with respect to any shares as to which he or she shall so dissent, to the 
fair value of such shares as of the day prior to the date on which the 
shareholders of Company voted to approve the Merger, excluding any 
appreciation or depreciation in anticipation of the Merger. The procedures to 
be followed and the rights of such dissenting shareholders shall be those set 
forth in Article 13, Chapter 55 of the North Carolina Corporation Act.
 
Section 12. Miscellaneous
- -------------------------
 
    12.1  PUBLIC ANNOUNCEMENTS.  Prior to the Closing Date, each party shall 
use its best efforts to consult with the other party with respect to any 
prepared public announcement, statement or release to the press, or statement 
to a competitor, customer or other third party (except to its consultants or 
to the regulatory authorities in connection with any required applications 
for governmental approvals or filings) with respect to this Agreement or the 
Merger or the transactions contemplated hereby or thereby, except as may be 
necessary, in the opinion of counsel, to comply with any law, governmental 
order or regulation.
 
    12.2  ACCOUNTING TREATMENT.  Each of the parties undertakes and agrees to 
use its best efforts to cause the Merger to qualify for pooling of interests 
accounting treatment.
 
    12.3  BROKERS AND FINDERS.  Company and Champion represent each to the 
other that this Agreement and the Merger contemplated hereby are the result 
of direct negotiations between them and that neither Company nor Champion has 
incurred any liability for any broker's, finder's or similar fees in 
connection with this Agreement or the Merger.
 
    12.4  DISCLOSED IN WRITING.  As used in this Agreement, the phrase 
"disclosed in writing" shall mean disclosed or delivered 

<PAGE>

prior to or within 20 days after, the date of this Agreement by means of a 
writing describing in reasonable detail the matters contained therein and 
delivered in accordance with Section 12.8 hereof. For purposes of this 
Agreement, anything appearing, contained, disclosed or described (i) in any 
Champion Financial Statement or Company Financial Statement (including the 
notes thereto), (ii) in any periodic report or other document filed with the 
Securities and Exchange Commission (including, but not limited to, Forms 8-K, 
Forms 10-K, Forms 10-Q, Annual Reports, and proxy statements) by either of 
Champion or Company, shall be deemed to be previously disclosed in writing.
 
    12.5  ENTIRE AGREEMENT.  This Agreement embodies the entire agreement among
the parties and there have been no agreements, representations, or warranties
among the parties other than those set forth herein or those provided for
herein.
 
    12.6  COUNTERPARTS.  This Agreement has been executed in a number of 
identical counterparts, and each such counterpart shall be deemed to be an 
original instrument, but in making proof of this Agreement, it shall not be 
necessary to produce or account for more than one such counterpart.
 
    12.7  INVALID PROVISIONS.  The invalidity or unenforceability of any 
particular provision of this Agreement shall not affect the other provisions 
hereof, and this Agreement shall be construed in all respects as if such 
invalid or unenforceable provision were omitted.
 
    12.8  NOTICES.  Any notices or other communication required or permitted 
hereunder shall be sufficiently given if sent by registered or certified 
mail, postage prepaid, addressed as follows:
 
    TO COMPANY:
 
          Blue Ridge Printing Co., Inc. 
          c/o Glenn W. Wilcox, Sr. 
          Wilcox Travel Agency, Inc. 
          Suite       
          BB&T Building 
          West Park Square 
          Asheville, NC 28801 

          with a copy to:
 
          Richard A. Wood, Jr., Esquire 
          McGuire, Wood & Bissette, P.A. 
          DrHumor Building 
          48 Patton Avenue 
          P. O. Box 3180 
          Asheville, NC 28802 

<PAGE>

    TO CHAMPION:
 
          Champion Industries, Inc. 
          2450 First Avenue 
          P. O. Box 2968 
          Huntington, West Virginia 25728-2968 
          Attention: Marshall T. Reynolds, President and 
                     Chief Executive Officer 

          with a copy to:

          Thomas J. Murray, Esquire 
          Huddleston, Bolen, Beatty, Porter & Copen 
          P. O. Box 2185 
          Huntington, West Virginia 25722 

or such other addresses as shall be furnished in writing by either party to 
the other party. Any such notice or communication shall be deemed to have 
been given as of the date so mailed.
 
    12.9  HEADINGS.  The captions contained in this Agreement are inserted
solely for convenience of reference and shall not affect the meaning or
interpretation of this Agreement.
 
    12.10  EXPENSES.  Each of the parties hereto will pay its own fees and
expenses incurred in connection with the transactions contemplated by this
Agreement, except as otherwise specifically provided herein.
 
    12.11  GOVERNING LAW.  This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina and the United States of
America.
 
    12.12  NO ASSIGNMENT.  This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that this Agreement may not be assigned by either
party without the written consent of the other party.
 
    12.13  EFFECTIVENESS OF AGREEMENT.  This Agreement shall become effective 
and binding as to Champion and Company when one or more counterparts shall 
have been signed and delivered by Champion and Company, and shall become 
effective and binding as to Interim Company when Interim Company has executed 
an Adoption Agreement in substantially the form attached hereto as Exhibit 
"A".
 
    12.14  FURTHER ACTS.  Champion and Company each agree to execute and 
deliver on or before the Closing Date such other documents, certificates, 
agreements, or other writings and to take such other actions as may be 
necessary or desirable in order to consummate or implement expeditiously the 
transactions contemplated by this Agreement.

<PAGE>
 
    12.15  CERTAIN REPRESENTATIONS AND WARRANTIES NOT TO SURVIVE.  Except for 
the representations, warranties and covenants contained in Sections 2.4, 4, 
5, 8.3, 12.10, 12.16, 12.17 and in Exhibits C, D and E (which shall survive 
the Closing Date and Effective Time and any investigation at any time made on 
behalf of any party), the representations and warranties included or provided 
in this Agreement shall not survive the Effective Time.
 
    12.16  INDIVIDUAL DIRECTORS.  The several Directors of Company who are 
signatories to this Agreement have joined into this Agreement to evidence 
their assent hereto, and for the express purpose of binding themselves, and 
each of them, to the fulfillment of each of the terms and conditions hereof 
by the respective parties and to the diligent, expeditious and good faith 
pursuit, and timely consummation, of the transactions herein contemplated. 
Each of the Directors hereby agrees to cooperate fully with the parties, 
their assistants and agents, in consummating the Merger, to vote 
appropriately upon all corporate resolutions toward that end, and to take no 
action inconsistent with the purposes of this Agreement or the consummation 
of the Merger. Nothing in this Agreement shall be construed to limit or 
affect the fiduciary obligation of Company's officers and directors to 
Company shareholders.
 
    12.17  SHAREHOLDERS REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.  The 
Shareholders of Company who are signatories to this Agreement have joined 
into this Agreement after the vote of Shareholders required by Section 6(a) 
of this Agreement for the express purpose of adopting and joining with the 
Company in making the representations and warranties contained in Section 4 
of this Agreement, and hereby expressly do so. Without limiting any other 
right of indemnification or any other cause of action, Shareholders of the 
Company shall jointly and severally defend, indemnify and hold Champion and 
Surviving Company harmless from and against any and all losses, liabilities, 
damages, costs, claims, judgments and expenses (including attorney's fees) 
whatsoever arising out of or resulting from any material breach of warranty 
or misrepresentation by Company or Shareholders contained herein, or from any 
misrepresentation, omission or inaccuracy in any schedule, exhibit, 
certificate, instrument or paper delivered or to be delivered by Company or 
Shareholders hereunder in connection with the transactions herein 
contemplated. For purposes of this Agreement, "material" shall mean any one 
or more events or occurrences involving more than Fifteen Thousand Dollars 
($15,000.00) singly or in the aggregate. Any Shareholder or Shareholders who 
are an indemnifying party hereunder shall have the right to control the 
defense of any claim or proceeding by any third party as to which it shall 
have acknowledged its obligation to indemnify Champion or the Surviving 
Company, and the indemnified party hereunder shall not settle or compromise 
any such claim or proceeding without the written consent of the indemnifying 
party, which consent shall not unreasonably be withheld or delayed. The 
indemnified party may in any event participate in any such defense, with its 
own counsel and at its own expense. The Shareholders of Company have joined 
into this 

<PAGE>

Agreement for the express purpose of binding themselves to the fulfillment of 
the terms and conditions of this Section 12.17.
 
    IN WITNESS WHEREOF, Champion and Company have caused this Agreement to be 
executed by their duly authorized officers and their corporate seals to be 
hereunto affixed as of the date first above written, pursuant to resolutions 
adopted by the boards of directors of Champion and Company, acting by a 
majority thereof, and WITNESS also the signatures hereto of a majority of the 
board of directors of Company, and all the Shareholders of Company.
 
                           CHAMPION INDUSTRIES, INC.
 
                           By _______________________________________
                              Marshall T. Reynolds, President and 
                              Chief Executive Officer 

ATTEST:

______________________________ 
Secretary
 
                           BLUE RIDGE PRINTING CO., INC.
 
                           By _______________________________________
                              Glenn W. Wilcox, Sr., President 

ATTEST:

______________________________ 
Molly M. Bird, Secretary
 
The following Directors of Blue Ridge Printing Co., Inc. do hereby join in
the foregoing Agreement to evidence their consent and agreement thereto:


___________________________________ 
Glenn W. Wilcox, Sr., Director


___________________________________ 
Bruce Fowler, Director


___________________________________ 
G. Wallace Wilcox, Jr., Director 

<PAGE>

The following Shareholders of Blue Ridge Printing Co., Inc. do hereby join in 
the foregoing Agreement pursuant to Section 12.17 hereof.

___________________________________ 
Glenn W. Wilcox, Sr.


___________________________________ 
Bruce Fowler


___________________________________ 
Clell Keith


___________________________________ 
G. Wallace Wilcox, Jr.


___________________________________ 
David N. Wilcox

<PAGE>
                                   EXHIBIT A
 
                               ADOPTION AGREEMENT
 
    THIS ADOPTION AGREEMENT, made and entered into as of this       day of 
March, 1997, by and among BRP ACQUISITION COMPANY, INC. ("Interim Company"), 
CHAMPION INDUSTRIES, INC. ("Champion"), and BLUE RIDGE PRINTING CO., INC. 
("Company");
 
    WHEREAS, Champion and Company have entered into an Agreement of Merger 
dated as of the       day of March, 1997 ("Agreement"), to which this 
Adoption Agreement is attached, and which Agreement is incorporated herein by 
reference; and
 
    WHEREAS, it is provided in Section 3.10 of the Agreement that Champion 
shall cause Interim Company to be organized and shall cause Interim Company 
to execute and enter into an Adoption Agreement in substantially the form of 
this Adoption Agreement so as to cause Interim Company to be bound by the 
applicable terms and provisions of the Agreement; and
 
    WHEREAS, Interim Company has been organized;
 
    NOW, THEREFORE, in consideration of the foregoing premises which are not 
mere recitals but an integral part hereof and in consideration of the mutual 
agreements hereinafter set forth, the parties hereto agree as follows:
 
    1. Interim Company hereby joins in and agrees to be bound by the terms 
and conditions of the Agreement applicable to it to the same extent as if 
Interim Company were an original party thereto.
 
    2. Interim Company agrees that it shall use its best 

<PAGE>

efforts in good faith to take or cause to be taken as promptly as practicable 
all actions on its part to be taken so as to permit the consummation of the 
Agreement and the Merger (as defined in the Agreement) at the earliest 
possible date, and that it shall cooperate fully with Champion and Company to 
that end.
 
    3. Interim Company represents and warrants to and covenants with Champion
and Company that: 

       3.1 Interim Company is a corporation, duly organized, validly existing 
and in good standing under the laws of the State of North Carolina. 

       3.2 Interim Company has the corporate power to execute and deliver 
this Adoption Agreement and to merge with Company pursuant to the Agreement 
and has taken or will have taken at the Effective Time of the Merger all 
action required by law, its Articles of Incorporation, its By-laws or 
otherwise, to authorize such execution and delivery, the Merger and the 
consummation of the transactions contemplated hereby; and this Adoption 
Agreement and the Agreement are or at the Effective Time of the Merger will 
be valid and binding agreements of Interim Company in accordance with their 
terms.
 
    IN WITNESS WHEREOF, Champion, Company and Interim Company have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written, pursuant to resolutions adopted by the boards of directors of
Champion, Company and Interim Company, acting by a majority thereof.

<PAGE>

                               CHAMPION INDUSTRIES, INC.
 
                               By 
                                 -----------------------------------------
                                 Marshall T. Reynolds, 
                                 President and Chief Executive Officer
 

ATTEST

- -------------------------------
ITS SECRETARY
 
                                 BLUE RIDGE PRINTING CO., INC.
 
                                     
                                 By 
                                   ---------------------------------------
                                   ------------------, President
ATTEST

- -------------------------------
Its Secretary
                                 
                                 BRP ACQUISITION COMPANY, INC.
                                 
                                 By 
                                   ---------------------------------------
                                   ------------------, President

ATTEST

- ------------------------------
Its Secretary

<PAGE>

                                   EXHIBIT B
 
                                 PLAN OF MERGER
 
                                       OF
 
                         BLUE RIDGE PRINTING CO., INC.
 
                                      AND
 
                         BRP ACQUISITION COMPANY, INC.
 
NAME OF EACH CORPORATION PLANNING TO MERGE; SURVIVING CORPORATION
 

    1. The Parties. BRP Acquisition Company, Inc., a North Carolina corporation
("Interim Company") shall merge with and into Blue Ridge Printing Co., Inc., a
North Carolina corporation ("Company") (both corporations are sometimes
collectively referred to herein as the "Constituent Corporations") under the
articles of incorporation of Company. Company shall be (and is hereinafter
called when reference is made to it at and after the consummation of the Merger)
the Surviving Company and as such shall retain the name and title of "Blue Ridge
Printing Co., Inc.". The Merger shall become effective at the time when a
certificate of merger shall be issued by the Secretary of State of North
Carolina (the "Effective Time of the Merger").
 
    2. Articles of Incorporation; Bylaws. At the Effective Time of the Merger,
the Articles of Incorporation and Bylaws of the Company in effect at the
Effective Time of the Merger shall be the Bylaws of the Surviving Company until
altered, amended or repealed in accordance with applicable law.
 
    3. Assets and Rights. At the Effective Time of the Merger, the corporate 
existence of Interim Company shall, as provided in the North Carolina 
Business Corporation Act, be merged with and 

<PAGE>

into Company and continued in the Surviving Company. The Surviving Company 
shall thereupon and thereafter possess all of the rights, privileges, 
immunities and franchises, of a public as well as of a private nature, of the 
Constituent Corporations; and all property, real, personal and mixed, and all 
debts due on whatever account, including subscriptions to shares, if any, and 
all other choses in action, and all and every other interest of or belonging 
to or due to the Constituent Corporations, and each of them, shall be deemed 
to be transferred to and vested in the Surviving Company without further act 
or deed; and the title to any real estate, or any interest therein, vested in 
the Constituent Corporations, and each of them, before the Merger, shall not 
revert or in any way be impaired by reason of the Merger.
 
    4. Liabilities and Obligations. At the Effective Time of the Merger, Company
as the Surviving Company shall henceforth be and remain responsible and liable
for all the liabilities and obligations of the Constituent Corporations; and
neither the rights of creditors nor any liens upon the property of either of the
Constituent Corporations shall be impaired by the Merger. Manner and Basis of
Converting Shares
 
    5.         CONVERSION, EXCHANGE AND CANCELLATION OF SHARES
               -----------------------------------------------
    (a) Conversion Rates. At the Effective Time of the Merger each outstanding
share of Company Stock shall ipso facto, without any action on the part of the
holder thereof, become and be converted into shares of Champion Industries, Inc.
("Champion") Common Stock at the Exchange Rate which shall be calculated, as
provided hereinafter and in Section 2.2 of the Agreement of Merger 

<PAGE>

dated March      , 1997 between Champion and Company (the "Agreement of 
Merger"). All shares of Champion Common Stock into which the aforesaid 
Company Stock is so convetred shall be fully paid and non-assessable. 
Company's stockholders of record at the Effective Time of the Merger, for the 
shares of Company Stock then held by them, respectively, shall be allocated 
and entitled to receive shares of Champion Common Stock, which total number 
of shares of Champion Common Stock shall have an aggregate Market Value as of 
the Valuation Date of Five Million Two Hundred Fifty Thousand Dollars 
($5,250,000.00). The Market Value shall be determined by averaging the daily 
closing trade prices of Champion Common Stock as reported on the Nasdaq 
National Market System ("NMS") during the five (5) consecutive days on which 
shares of Champion Common Stock are traded on the Nasdaq National Market 
System ("NMS") immediately prior to the Valuation Date as reported in The 
Wall Street Journal. The Valuation Date shall be the Nasdaq NMS trading day 
immediately prior to the date of effectiveness of the Agreement of Merger as 
to Champion and Company as provided in Section 12.13 thereof.
 
    For purposes of establishing the Exchange Rate (the number of shares of
Champion Common Stock into which each share of Company Stock shall be converted
at the Effective Time of the Merger), the Market Value of one (1) share of
Champion Common Stock shall be divided into the aggregate Market Value to
establish to the nearest whole share the aggregate number of shares of Champion
Common Stock into which all of the then issued and outstanding shares of Company
Stock shall be converted at the 

<PAGE>

Effective Time of the Merger. Such number of shares of Champion Common Stock 
shall then be divided by the number of shares of Company Stock that shall be 
issued and outstanding immediately prior to the Effective Time of the Merger 
with the quotient therefrom being the number of shares of Champion Common 
Stock into which each share of Company Stock shall be converted at the 
Effective Time of the Merger. All shares of Company Stock held by Company as 
treasury stock immediately prior to the Effective Time of the Merger shall be 
cancelled and shall not be exchanged for shares of Champion Common Stock.
 
    (b) Manner of Exchange. After the Effective Time of the Merger, except for
persons exercising their rights as dissenting shareholders of Company, each
shareholder of Company, upon surrender to Champion of certificates representing
Company Stock, accompanied by a Letter of Transmittal and Investment Letter in
the form attached as Exhibit C to the Agreement of Merger shall be entitled to
receive in exchange therefor a certificate or certificates representing the
number of full shares of Champion Common Stock for which shares of Company Stock
theretofore represented by the certificate or certificates so surrendered shall
have been exchanged as provided in this Section 5. After the Effective Time of
the Merger, each outstanding certificate which, prior to the Effective Time of
the Merger, represented Company Stock, will be deemed for all corporate purposes
of Champion to evidence ownership of the number of full shares of Champion
Common Stock into which the shares of Company Stock represented thereby were
converted. Until such outstanding 

<PAGE>

certificates formerly representing company Stock are surrendered, no dividend 
payable to holders of record of Champion Common Stock for any period as of 
any date subsequent to the Effective Time of the Merger shall be paid to the 
holder of such outstanding certificates in respect thereof. After the 
Effective Time of the Merger there shall be no further registry of transfers 
on the records of Company of shares of Company Stock. Upon surrender of 
certificates of Company Stock for exchange for Champion Common Stock, there 
shall be paid to the record holder of the certificates of Champion Common 
Stock issued in exchange therefor (i) the amount of dividends theretofore 
paid with respect to such full shares of Champion Common Stock as of any date 
subsequent to the Effective Time of the Merger which have not yet been paid 
to a public official pursuant to abandoned property laws and (ii) at the 
appropriate payment date the amount of dividends with a record date after the 
Effective Time of the Merger, but prior to surrender and a payment date 
subsequent to surrender. No interest shall be payable with respect to such 
dividends upon surrender of outstanding certificates.
 
    (c) Fractional Shares. Champion will not issue fractional shares or
fractional share certificates, but in lieu of the issuance of fractional shares
will pay cash, without interest, to any Company shareholder otherwise entitled
to receive such fractional shares. The amount of such cash payment will be
determined by multiplying the fractional share interest to which a Company
shareholder would otherwise be entitled by the Market Value of Champion Common
Stock as determined pursuant to Section 

<PAGE>

5(a). Payment for fractional shares will be made with respect to each 
shareholder at the time such shareholder's certificates of Company Stock are 
exchanged.
 
    (d) Lost Certificates. If a certificate evidencing outstanding shares of
Company Stock is lost, stolen or destroyed, the registered owner thereof shall
be entitled to receive the Champion certificate and cash to which he would
otherwise be entitled on surrender of such certificate, by notifying Champion in
writing of such lost, stolen or destroyed certificate and giving Champion
evidence of loss and a bond sufficient to indemnify Champion against any claim
that may be made against it on account of the alleged lost, stolen and destroyed
certificate and the issuance of the certificate and cash.
 
TERMS AND CONDITIONS OF MERGER
 
    6. Further Assurances. If at any time the Surviving Company shall consider
or be advised that any further assignments, conveyances or assurances are
necessary or desirable to vest, perfect or confirm in the Surviving Company the
title to any property or rights of Interim Company or Company or any subsidiary
thereof, or otherwise to carry out the provisions hereof, the proper officers
and directors of Interim Company or Company, as the case may be, as of the
Effective Time of the Merger, and thereafter the officers of the Surviving
Company acting on behalf of Interim Company or Company, as the case may be,
shall execute and deliver any and all proper assignments, conveyances and
assurances, and do all things necessary or desirable to vest, perfect 

<PAGE>

or confirm title to such property or rights in the Surviving Company and 
otherwise carry out the provisions hereof.
 
    7. Termination and Abandonment. This Plan of Merger may be terminated and
the Merger abandoned as provided in the Agreement of Merger. However, the filing
of this Plan of Merger with the North Carolina Secretary of State shall
constitute a conclusive presumption that the Merger has been consummated in
accordance with the terms hereof.
 
    8. Other Terms and Conditions. All other terms and conditions to the Merger
are as provided in the Agreement of Merger.
 
    IN WITNESS WHEREOF, each of the parties hereto has caused this Plan of
Merger to be executed on its behalf and its corporate seal to be hereunto
affixed and attested by its corporate officers thereunto duly authorized, all as
of the day and year first above written.
 
                                     BLUE RIDGE PRINTING CO., INC. 
                                     a corporation
 

                                     By 
                                       -----------------------------------
                                       President
 
ATTEST:

- -------------------------------------
ITS SECRETARY
 
<PAGE>

                                      BRP ACQUISITION COMPANY, INC., 
                                      a corporation
 
                                      By
                                        ----------------------------------
                                        President
 
ATTEST:

- --------------------------------------
Its Secretary 

<PAGE>

EXHIBIT C (Per Sections 2.3, 2.4 and 6(b) and (c))
 
                               INVESTMENT LETTER
 
Champion Industries, Inc. 
Post Office Box 2968 
Huntington, West Virginia 25728
 
   RE:  ISSUANCE OF SHARES OF COMMON STOCK OF CHAMPION INDUSTRIES, INC. 
        PURSUANT TO MERGER AGREEMENT DATED MARCH       , 1997 WITH 
        RESPECT TO BLUE RIDGE PRINTING CO., INC.
 
   Gentlemen:
 
    The undersigned hereby represents, warrants, covenants and agrees as
follows:
 
    Pursuant to that certain Agreement of Merger between Blue Ridge Printing
Co., Inc. ("Company") and Champion Industries, Inc. ("Champion"), dated as of
March       , 1997 (hereinafter the "Agreement") (all capitalized terms not
defined herein having the meaning ascribed to them in the Agreement), to which
this Investment Letter is attached and incorporated as an exhibit, whereby the
Company will merge with a wholly owned subsidiary of Champion and the
outstanding shares of Company Stock shall be exchanged for shares of common
stock of Champion (hereinafter the "Restricted Shares"), the undersigned, the
holder of       shares of the issued and outstanding Company Stock (the
"Shareholder") hereby represents, warrants, covenants and agrees as follows: 


   (1) The undersigned acknowledges that Champion has furnished to Company 
and to the Shareholder the following:
 
        (a) The information contained in its annual report on 

<PAGE>

            Securities and Exchange Commission Form 10-K for fiscal year ended 
            October 31, 1996, together with exhibits and its proxy statement for
            annual meeting of shareholders to be held March 17, 1997, portions
            of which are incorporated by reference into such Form 10-K; and
 
        (b) Copies of all reports filed by Champion under Sections 13(a), 14(a),
            14(c) and 15(d) of the Securities Exchange Act of 1934 since the
            filing of the annual report on Form 10-K described in subparagraph
            (a) above.
 
   (a)  The undersigned is purchasing the Restricted Shares for investment, for
its or his own account only, and not for resale, fractionalization, subdivision,
or other disposition.
 
   (b)  Although I do not presently plan to resell the Restricted Shares, if 
such sale should later be proposed, I agree that the Restricted Shares may be 
resold only in a transaction or transactions in accordance with Rule 144 or 
Rule 145 (if applicable) or any other exemption rule promulgated by the 
Securities and Exchange Commission under the Securities Act of 1933, as 
amended, as the same may from time to time be in effect, and also only in 
accordance with any regulations and interpretations under the securities laws 
of North Carolina, or other applicable state laws. The undersigned 
acknowledges that in the event of conflicting state and federal restrictions 
on resale, the undersigned will be governed by the most restrictive 
applicable rule or statute. This further reaffirms my obligation

<PAGE>

originally set forth in Section 6(b) of the Agreement that I shall not 
dispose of either (i) any shares of Champion Common Stock issued to me as 
Restricted Shares in exchange for shares of Company Stock or (ii) any other 
shares of Champion Common Stock I own until such time as financial results 
covering at least thirty (30) days of combined, post-merger operations of 
Champion and Company have been published. I further agree that a legend 
relative to the application of the foregoing restriction may be placed upon 
the certificates for any Restricted Shares issued to me, but that failure to 
place such legend upon the certificates does not affect my undertakings made 
herein.
 
   (c) The undersigned acknowledges being informed by Champion that the 
Restricted Shares delivered pursuant to the Agreement are not registered 
under the Securities Act of 1933 and must be held indefinitely unless they 
are subsequently registered under the Securities Act of 1933, or under state 
securities acts, or unless an exemption from such registration is available. 
The undersigned understands that any routine sale of Restricted Shares made 
in reliance upon Rule 144 or Rule 145 promulgated under the Securities Act of 
1933 can be made only in limited amounts, in accordance with the terms and 
conditions of those Rules and that in the case of securities to which those 
Rules are not applicable, public resale may require compliance with some 
other disclosure or registration exemption under such statutes.
 
   (d) Champion may, if it so desires, permit the transfer of the Restricted
Shares out of the name of the undersigned, only when the request for transfer is
accompanied by an opinion of


<PAGE>

counsel for, or acceptable to, Champion (said counsel to be retained by and 
the cost incurred therefor to be paid by the undersigned) that neither the 
sale nor the proposed transfer results in violation of the North Carolina 
Securities Law or the securities laws of another jurisdiction or of the 
Federal Securities Act of 1933.
 
   (e) Each certificate or any other instrument representing the Restricted 
Shares now or hereafter issued pursuant to the Agreement may be stamped or 
otherwise imprinted with, or contain, a legend in substantially the following 
form:
 
         "The securities represented by this instrument have not been registered
     under the Federal Securities Act of 1933, or any state securities statute
     and may not be sold, assigned, or transferred unless (i) registered for
     resale or (ii) the issuer hereof has received the written opinion of
     counsel for said issuer that after investigation of relevant facts, such
     counsel is of the opinion that such sale, assignment, or transfer does not
     involve a transaction requiring a registration of such securities under the
     Federal Securities Act of 1933 or any applicable state securities laws. The
     restrictions of this paragraph shall become null and void and this
     paragraph shall have no effect on and after _______________________, 2000.
 
   (f) The undersigned is: (Please initial the alternative that applies to 
your particular investment situation. By so initialing, you acknowledge that 
Champion is entitled to rely upon your representations hereunder).
 
__________ (i) An accredited investor as that term is defined in Rule 501 of
               Regulation D promulgated under the Securities Act of 1933 (See
               "Investor Suitability Standards" attached hereto); or
 

<PAGE>


__________(ii) Not an accredited investor (as defined in (i) above) but hereby
               represents and warrants that:
 
               __________a.  The undersigned has sufficient knowledge and
                             experience in financial and business matters to be
                             capable of evaluating the merits and risks of an
                             investment in the Restricted Shares; the
                             undersigned is not utilizing any other person as
                             his/her purchaser representative in connection with
                             evaluating such merits and risks. The undersigned
                             offers as evidence of knowledge and experience in
                             these matters the information set forth on this
                             questionnaire; or
 
               __________b.  The undersigned may not have sufficient knowledge
                             and experience in financial and business matters to
                             evaluate the merits hereof, and the undersigned
                             represents that the undersigned has retained a
                             purchaser representative(s) (as defined in Rule 506
                             of Regulation D promulgated under the Securities
                             Act of 1933) in connection with the evaluation of
                             the merits and risks of an investment in the
                             Restricted Shares as follows:
 
NAME: __________________________________________________________________________

FIRM: __________________________________________________________________________
 
PROFESSION: ____________________________________________________________________
 
ADDRESS: _______________________________________________________________________
 
    If represented by a purchaser representative, please request a Purchaser
Representative Questionnaire from Champion and have it completed by your
representative and returned to Champion. The undersigned with the above-named
purchaser representative(s) has such knowledge and experience in financial and
business matters that they are capable of evaluating the merits and risks of an
investment in the Restricted Shares.
 
    (a) The undersigned is presently a bona fide resident of the state indicated
below and the address and social security number set forth below are his true
and correct residence and correct social security number, and he has no present
intention of becom-


<PAGE>

ing a resident of any other state or jurisdiction.
 
    (b) The undersigned acknowledges that he has been furnished with a 
package of information and disclosures described in paragraph 1 hereof, and 
has been given access to all underlying documents in connection with this 
transaction as well as such other information as he or his representative, if 
retained, deems necessary or appropriate as a prudent and knowledgeable 
investor in evaluating the purchase of the Restricted Shares. The undersigned 
acknowledges that Champion or its authorized representatives have made 
available to him or his purchaser representative, if retained, the 
opportunity to obtain additional information to verify the accuracy of the 
information contained in the above-mentioned materials furnished the 
undersigned in connection with such nonpublic offering, and to evaluate the 
merits and risks of this investment including, but not limited to, the 
economic consequences of the investment. The undersigned acknowledges that he 
or his purchaser representative, if retained, had the opportunity to ask 
questions of and receive satisfactory answers from Champion or its authorized 
representatives concerning the terms and conditions of the investment in the 
Restricted Shares and information in the above-mentioned materials furnished 
the undersigned in connection with such nonpublic offering. In reaching the 
conclusion that he desires to acquire the Restricted Shares, the undersigned 
has carefully evaluated his financial resources and investment position and 
goals, and the risks associated with this investment and acknowledges that he 
is able to bear the economic risks of the entire loss of this investment.
 


<PAGE>

    (c). The undersigned understands that he is purchasing the Restricted Shares
without being furnished any offering literature or prospectus other than the
documents and materials referred to in Paragraph 9 above, that the transaction
and that the materials furnished the undersigned have not been scrutinized or
approved by the United States Securities and Exchange Commission or by any state
securities regulatory agency, and that any such scrutiny or registration does
not imply approval or disapproval of the same.
 
    (d) Because of the reliance by Champion on Section 3 (b) and Section 4(2) of
the Securities Act of 1933 and Regulation D as promulgated by the Securities and
Exchange Commission as well as provisions of applicable state securities laws
and rules covering the offering of such Restricted Shares, the undersigned
acknowledges and is aware of the following:
 
        (i)  There are substantial restrictions on the transferability of the
             Restricted Shares. Accordingly, it may not be possible for the
             undersigned to readily liquidate his investment in Champion.
 
        (ii)  The investor has been informed by Champion that the Restricted
              Shares have not been registered under the Securities Act of 1933
              and must be held indefinitely unless subsequently registered under
              the 1933 Act or an exemption from such registration under the 1933
              Act is made available; that Champion is not obligated to file a
              notification under Regulation A of the 1933 Act or a registration
              statement under the 1933 Act; and that Champion has not covenanted
              to take any action necessary for qualification of a limited resale
              of the Restricted Shares under applicable securities rules and
              regulations.
 
    (e) The undersigned is executing this letter and all other documents as an
inducement to Champion to issue the Restricted Shares to the undersigned, and
Champion may rely on such documents and the information contained herein or
furnished by the


<PAGE>

undersigned to determine the qualifications of the undersigned to purchase 
the Restricted Shares.
 
    (f) This letter shall be binding upon the heirs, estate, legal 
representatives, successors and assigns of the undersigned.
 
Date:__________________________ , 1997     _____________________________________
                                              __________________________________


<PAGE>

                                 QUESTIONNAIRE
 
    The purpose of this questionnaire is to assure Champion that each 
investor will meet the standards imposed by Regulation D promulgated under 
the Securities Act of 1933, as amended (the "Act"), and by applicable state 
securities law since the Restricted Shares will not be registered under the 
Act or under such state securities laws.
 
    If the answer to any question is "None" or "Not Applicable", please so 
state. Please answer each question.
 
    Your answers will at all times be kept strictly confidential. However, by 
signing this Questionnaire, you agree that Champion may present this 
Questionnaire, with such confidentiality precautions as are possible under 
the circumstances, to such parties as it deems appropriate if called upon 
under law to establish the availability under the Act of an exemption from 
registration of the private placement.
 
    Please complete, sign and date this Questionnaire as part of the 
Investment Letter.
 
1.  Name _______________________________________________________________________
 
    Residence Address___________________________________________________________
 
    Mailing Address_____________________________________________________________
 
    Date of Birth_______________________________________________________________
 
    Residence Phone Number______________________________________________________
 
2.  Occupation__________________________________________________________________
 
    Business Address____________________________________________________________

    ____________________________________________________________________________

    Business Phone Number_______________________________________________________
 
3.  In which state, if any:
 
    Do you hold a driver's license?_____________________________________________
 
    Do you pay state income taxes?______________________________________________
 
    Are you registered to vote?_________________________________________________
 
4.  Bank Reference______________________________________________________________
 
    Bank Office_________________________________________________________________


<PAGE>


5.  Business or Professional Education (college and post-college; if no college,
    then give highest levels achieved):
 
    SCHOOL                        MAJOR SUBJECT                        DEGREE
    ____________________________________________________________________________

    ____________________________________________________________________________

    ____________________________________________________________________________

6.  Please describe briefly the principal positions you have held during the
    past ten years or since graduation from the schools listed in paragraph 5:

    ____________________________________________________________________________

    ____________________________________________________________________________

    ____________________________________________________________________________

    ____________________________________________________________________________

    ____________________________________________________________________________

7.  Other similar investment holdings of yours:

    ____________________________________________________________________________

    ____________________________________________________________________________

    ____________________________________________________________________________

8.  My estimated net worth (exclusive of residence, furnishings, and personal
    automobiles) is in excess of $___________________.
 
9.  My income for the year 1997 is estimated to be in excess of $______________;
    my income for the years 1996 and 1995 was in excess of:
 
                                                         1996          1995
         Individually                                  __________   ___________

         Jointly with my spouse                        __________   ___________
 
10. In the past tax year, the highest marginal federal income tax rate at which
    some portion of my taxable income was taxed was__________percent.


<PAGE>
 
11. Please indicate in the space provided below any additional information about
    yourself which you think may be helpful in enabling the Purchaser to
    determine that your knowledge and experience in financial and business
    matters is sufficient to enable you to evaluate the merits and risks of
    this investment:

    ____________________________________________________________________________

    ____________________________________________________________________________

    To the best of my information and belief, the above and attached information
supplied by me is true and correct in all respects.

                                     ___________________________________________

Date:________________________        ___________________________________________



<PAGE>

                                   EXHIBIT D
 
                           NON-COMPETITION AGREEMENT
 
    This agreement is made this       day of       , 1997, by and between 
Blue Ridge Printing Co., Inc., a corporation, hereinafter referred to as 
"Company", and Glenn W. Wilcox, Sr., hereinafter referred to as "Wilcox".
 
    WHEREAS, Wilcox is a shareholder, principal officer and key manager of 
company, whose efforts have been vital to the continuing success of the 
company's business; and
 
    WHEREAS, pursuant to an Agreement of Merger dated the    day of March, 
1997, Company will be merged with a wholly owned subsidiary of Champion 
Industries, Inc. ("Champion"), a West Virginia corporation, with Company to 
be the surviving corporation under said Merger Agreement; and
 
    WHEREAS, consummation of such merger is contingent upon the execution of 
this  Non-competition Agreement; and
 
    Whereas, as a material inducement to Champion to enter into and 
consummate  the aforesaid Agreement of Merger, Wilcox is willing to execute 
and perform this agreement and has herein further agreed not to compete with 
Company after consummation of the merger.
 
    NOW, THEREFORE, in consideration of the premises which are and shall be 
construed to be an integral part hereof and not as mere recitals, for the 
mutual covenants and agreements set forth in said Agreement of Merger and 
this Agreement and the consideration flowing therefrom and herefrom, and for 
other  good and valuable consideration, the receipt and sufficiency of all of 
which are 

                                       

<PAGE>

hereby acknowledged, it is agreed as follows:
 
1. Wilcox recognizes and acknowledges that the list of the customers of 
Company is a valuable, special and unique asset of the business of Company 
and, therefore, he shall keep secret from every person, firm or corporation, 
other than Champion or Company , and not use in any business or pursuits 
related to the business of Champion or Company, the names of past, present 
and prospective customers of Company, together with all knowledge concerning 
the same which he may at any time have acquired during his employment or 
association with Company.
 
2. Wilcox shall not furnish to any person, firm or corporation or retain or 
use any papers or other information of any nature whatsoever concerning the 
customers of Company, or any other confidential business information of 
Company, and shall not engage in, or participate in, any effort or act to 
induce any customer of Company to take any steps which might result to the 
disadvantage of or be detrimental to the interests of Company, and shall not 
disclose, directly or indirectly, to any person, firm or corporation, any 
process or trade secret which may have been acquired or developed by Company.
 
    3. All of the terms and provisions of Sections 1 and 2 shall remain in 
full force and effect for a period of two (2) years after the later of (a) 
the execution of this Agreement, or (b) the termination of Wilcox's 
employment with Company, if Wilcox is employed by Company after the date of 
this Agreement.
 
    4. For a period of two (2) years after the later of (a) the execution of 
this Agreement, or (b) the termination of Wilcox's 

<PAGE>

employment with Company, if Wilcox is employed by Company after the date of 
this Agreement, Wilcox shall not enter into or engage directly or indirectly 
in any business competitive with the business of Company or Champion, either 
as an individual on his own account or as a partner or joint venturer or as 
an employee, agent, consultant or salesman for any person, firm or 
corporation or as an officer, director or stockholder of a corporation or 
otherwise, in or within a radius of one hundred fifty (150) miles of the city 
limits of the City of Asheville, North Carolina or Knoxville, Tennessee 
without first having obtained the written consent of Company, which  may be 
arbitrarily withheld. The covenant and agreement of Wilcox which is contained 
in this section shall be construed as a covenant and agreement independent of 
any other provision in this agreement and the existence of any claim or cause 
of action of Wilcox, whether predicated on this agreement or otherwise, shall 
not constitute a defense to the enforcement by Company of the aforesaid 
covenant and agreement.
 
5. Any breach or evasion of any term of this agreement by Wilcox will cause 
immediate and irreparable injury to Company, its business and property; 
therefore, in the event of any breach or evasion of any of the terms of this 
agreement by Wilcox, Company shall be entitled to an immediate injunction 
without the necessity of bond to restrain the violation thereof, or to 
specific performance, or both, as well as to all other legal or equitable 
remedies to which Company may be entitled hereunder or under applicable law, 
including, but not limited to, the recovery of damages from Wilcox, as well 
as any person, firm or corporation 

<PAGE>

which participates in such breach or evasion.

6. Wilcox represents and admits that his experience and capabilities are such 
that employment can be obtained by him in businesses which are of a different 
nature and not competitive with the business of Company and Champion and that 
the enjoining of any breach or evasion by him of the terms and provisions of 
this agreement will not prevent him from earning a comfortable livelihood.
 
7. Notwithstanding anything in this agreement to the contrary, if Wilcox 
shall have been found by a court of competent jurisdiction to have breached, 
or evaded any of the provisions of Sections 1, 2 or 4, the two-year period 
applicable to Sections 1, 2 and 4 shall commence on the date the court enters 
a final order or decree enjoining or prohibiting Wilcox from violating the 
terms and provisions contained in the respective sections aforesaid.
 
8. This agreement may not be modified or terminated orally. No modification 
or termination or attempted waiver shall be valid unless in writing signed by 
the party against whom the same is sought to be enforced.
 
9. The provisions of this agreement shall be binding upon and inure to the 
benefit of Company, its successors and assigns and Wilcox, his legal 
representatives, heirs at law, distributees, devisees and legatees.
 
10. The invalidity or unenforceability of any particular provision of this 
agreement shall not affect the other provisions hereof, and this agreement 
shall be construed in all respects as if such invalid or unenforceable 
provision were omitted.


<PAGE>

    11. Except for the Deferred Compensation Agreement dated July 1, 1993 
between Wilcox and Company, which shall survive the execution of this 
agreement, this agreement supersedes all other oral or written agreements of 
every nature whatsoever between Company and Wilcox relating to the 
non-competition by Wilcox with Company and embodies the full and complete 
understanding of Company and Wilcox relating thereto.
 
12. In further consideration of the execution by Wilcox of this 
Non-Competition Agreement, the Company hereby covenants and agrees that it 
shall not exercise its election to terminate either (i) the Deferred 
Compensation Agreement dated July 1, 1993 between the Company as "Employer" 
and Wilcox as "Employee" or (ii) the Split Dollar Life Insurance Agreement 
dated July 1, 1992 between the Company as "Employer" and Wilcox as "Employee" 
prior to December 31, 1999, whether or not Wilcox is employed by Company 
during such time period.
 
    IN WITNESS WHEREOF, Company has executed this Agreement at Asheville, 
North Carolina, on this       day of       , 1997, in the presence of the 
undersigned competent witnesses.
 
WITNESSES:                                      BLUE RIDGE PRINTING CO., INC.
_________________________________________       By___________________________

_________________________________________       Its__________________________
 
     IN WITNESS WHEREOF, Wilcox has executed this Agreement at Asheville, 
North Carolina, on this       day of       , 1997, in the presence of the 
undersigned competent witnesses.

<PAGE> 

WITNESSES:                  ------------------------
                              Glenn W. Wilcox, Sr.

- ------------------------

- ------------------------

STATE OF NORTH CAROLINA,
COUNTY OF       , TO-WIT:
 
    The foregoing instrument was acknowledged before me this       day of     
  , 1997 by       ,       of     Blue Ridge Printing Co., Inc., a 
corporation, on behalf of said corporation.
 
    My commission expires        __________________________________________.

                                 ___________________________________________
                                              NOTARY PUBLIC 

[SEAL]
 
STATE OF NORTH CAROLINA, 
COUNTY OF       , TO-WIT:
 
    The foregoing instrument was acknowledged before me this       day of     
  , 1997, by Glenn W. Wilcox, Sr.
 
    My commission expires        __________________________________________ .

                                 ___________________________________________
                                              NOTARY PUBLIC
[SEAL]

<PAGE>

                                   EXHIBIT E
 
                           NON-COMPETITION AGREEMENT
 
    This agreement is made this       day of       , 1997, by and between 
Blue Ridge Printing Co., Inc., a corporation, hereinafter referred to as 
"Company", and Bruce Fowler, hereinafter referred to as "Fowler".
 
    WHEREAS, Fowler is a shareholder, principal officer and key manager of 
Company, active in the management and operations of the Company and whose  
efforts have been vital to the continuing success of the Company's business; 
and
 
    WHEREAS, pursuant to an Agreement of Merger dated the       day of March, 
1997, Company will be merged with a wholly owned subsidiary of Champion 
Industries, Inc. ("Champion"), a West Virginia corporation, with Company to 
be the surviving corporation under said Merger Agreement; and
 
    WHEREAS, consummation of such merger is contingent upon the execution of 
this Non-Competition Agreement; and
 
    WHEREAS, as a material inducement to Champion to enter into and 
consummate the aforesaid Agreement of Merger, Fowler is willing to execute 
and perform this agreement and has herein further agreed not to compete with 
Company after consummation of the merger.
 
    NOW, THEREFORE, in consideration of the premises which are and shall be 
construed to be an integral part hereof and not as mere recitals, for the 
mutual covenants and agreements set forth in said Agreement of Merger and 
this Agreement and the consideration flowing therefrom and herefrom, and for 
other good and valuable 

<PAGE>


consideration, the receipt and sufficiency of all of which are hereby 
acknowledged, it is agreed as follows:
 
    1. Fowler recognizes and acknowledges that the list of the customers of 
Company is a valuable, special and unique asset of the business of Company 
and, therefore, he shall keep secret from every person, firm or corporation, 
other than Champion or Company , and not use in any business or pursuits 
related to the business of Champion or Company, the names of past, present 
and prospective customers of Company, together with all knowledge concerning 
the same which he may at any time have acquired during his employment or 
association with Company.
 
    2. Fowler shall not furnish to any person, firm or corporation or retain 
or use any papers or other information of any nature whatsoever concerning 
the customers of Company, or any other confidential business information of 
Company, and shall not engage in, or participate in, any effort or act to 
induce any customer of Company to take any steps which might result to the 
disadvantage of or be detrimental to the interests of Company, and shall not 
disclose, directly or indirectly, to any person, firm or corporation, any 
process or trade secret which may have been acquired or developed by Company.
 
    3. All of the terms and provisions of Sections 1 and 2 shall remain in 
full force and effect for a period of two (2) years after the later of (a) 
the execution of this Agreement, or (b) the termination of Fowler's 
employment with Company, if Fowler is employed by Company after the date of 
this Agreement.
 
    4. For a period of two (2) years after the later of (a) the 

<PAGE>

execution of this Agreement, or (b) the termination of Fowler's employment 
with Company, if Fowler is employed by Company after the date of this 
Agreement, Fowler shall not enter into or engage directly or indirectly in 
any business competitive with the business of Company or Champion, either as 
an individual on his own account or as a partner or joint venturer or as an 
employee, agent, consultant or salesman for any person, firm or corporation 
or as an officer, director or stockholder of a corporation or otherwise, in 
or within a radius of one hundred fifty (150) miles of the city limits of the 
City of Asheville, North Carolina or Knoxville, Tennessee without first 
having obtained the written consent of Company, which may be arbitrarily 
withheld. The covenant and agreement of Fowler which is contained in this 
section shall be construed as a covenant and agreement independent of any 
other provision in this agreement and the existence of any claim or cause of 
action of Fowler, whether predicated on this agreement or otherwise, shall 
not constitute a defense to the enforcement by Company of the aforesaid 
covenant and agreement.
 
    5. Any breach or evasion of any term of this agreement by Fowler will 
cause immediate and irreparable injury to Company, its business and property; 
therefore, in the event of any breach or evasion of any of the terms of this 
agreement by Fowler, Company shall be entitled to an immediate injunction 
without the necessity of bond to restrain the violation thereof, or to 
specific performance, or both, as well as to all other legal or equitable 
remedies to which Company may be entitled hereunder or under applicable law, 
including, but not limited to, the recovery of 

<PAGE>

damages from Fowler, as well as any person, firm or corporation which 
participates in such breach or evasion.

    6. Fowler represents and admits that his experience and capabilities are 
such that employment can be obtained by him in businesses which are of a 
different nature and not competitive with the business of Company and 
Champion and that the enjoining of any breach or evasion by him of the terms 
and provisions of this agreement will not prevent him from earning a 
comfortable livelihood.
 
    7. Notwithstanding anything in this agreement to the contrary, if Fowler 
shall have been found by a court of competent jurisdiction to have breached, 
or evaded any of the provisions of Sections 1, 2 or 4, the two-year period 
applicable to Sections 1, 2 and 4 shall commence on the date the court enters 
a final order or decree enjoining or prohibiting Fowler from violating the 
terms and provisions contained in the respective sections aforesaid.
 
    8. This agreement may not be modified or terminated orally. No 
modification or termination or attempted waiver shall be valid unless in 
writing signed by the party against whom the same is sought to be enforced.
 
    9. The provisions of this agreement shall be binding upon and inure to 
the benefit of Company, its successors and assigns and Fowler, his legal 
representatives, heirs at law, distributees, devisees and legatees.
 
    10. The invalidity or unenforceability of any particular provision of 
this agreement shall not affect the other provisions hereof, and this 
agreement shall be construed in all respects as 

<PAGE>

if such invalid or unenforceable provision were omitted.
 
    11. Except for the Deferred Compensation Agreement dated July 1, 1993 
between Fowler and Company, which shall survive the execution of this 
agreement, this agreement supersedes all other oral or written agreements of 
every nature whatsoever between Company and Fowler relating to the 
non-competition by Fowler with Company and embodies the full and complete 
understanding of Company and Fowler relating thereto.
 
    12. In further consideration of the execution by Fowler of this 
Non-Competition Agreement, the Company hereby covenants and agrees that it 
shall not exercise its election to terminate either (i) the Deferred 
Compensation Agreement dated July 1, 1993 between the Company as "Employer" 
and Fowler as  "Employee" or (ii) the Split Dollar Life Insurance Agreement 
dated July 1, 1992 between the Company as "Employer" and Fowler as "Employee" 
prior to December 31, 1999.
 
    IN WITNESS WHEREOF, Company has executed this Agreement at Asheville, 
North Carolina, on this       day of       , 1997, in the presence of the 
undersigned competent witnesses.
 
WITNESSES:                                   BLUE RIDGE PRINTING CO., INC.

______________________________________       By____________________________

______________________________________             Its_____________________
 
    IN WITNESS WHEREOF, Fowler has executed this Agreement at Asheville, 
North Carolina, on this       day of       , 1997, in the presence of the 
undersigned competent witnesses.
 
<PAGE>

    WITNESSES:                ___________________________________
                                           Bruce Fowler

_________________________ 

__________________________

<PAGE>

STATE OF NORTH CAROLINA,
COUNTY OF _________, TO-WIT:
 
    The foregoing instrument was acknowledged before me this       day of     
  , 1997 by       ,       of Blue Ridge Printing Co., Inc., a corporation, on 
behalf of said corporation.
 
    My commission expires __________________________________________ . 

                          __________________________________________
                                          NOTARY PUBLIC 

[SEAL]


 
STATE OF NORTH CAROLINA, 
COUNTY OF       , TO-WIT:
 
    The foregoing instrument was acknowledged before me this       day of     
  , 1997, by Bruce Fowler.
 
    My commission expires __________________________________________ .

                          __________________________________________
                                        NOTARY PUBLIC
 
[SEAL]
 
                                       9

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