Exhibit 10.33

                                LETTER OF CREDIT
                             REIMBURSEMENT AGREEMENT


         THIS  LETTER OF CREDIT  REIMBURSEMENT  AGREEMENT,  (the  "Reimbursement
Agreement"),  dated as of the 1st day of October,  1997, by and between SPURLOCK
ADHESIVES,  INC.  ("Borrower"),  a Virginia  corporation,  and KEYBANK  NATIONAL
ASSOCIATION, a national banking association (the "Bank").

                              W I T N E S S E T H:

         WHEREAS, the Borrower has requested the Issuer (as hereinafter defined)
to finance the cost of acquiring,  constructing and equipping certain facilities
in the Town of Moreau, Saratoga County, State of New York; and

         WHEREAS,  the Issuer  proposes to provide such financing by issuing its
Multi-Mode  Variable  Rate  Industrial   Development  Revenue  Bonds,  (Spurlock
Adhesives,  Inc. Project), Series 1997A in the aggregate principal amount of Six
Million Dollars ($6,000,000) (the "Bonds"),  under the terms and conditions more
fully  set forth in a Trust  Indenture,  dated as of  October  1,  1997,  by and
between the Issuer and Star Bank, N.A., as Trustee; and

         WHEREAS,  to enhance the  marketability  of the Bonds the  Borrower has
applied  to the Bank for the  issuance  of a letter of credit  (the  "Letter  of
Credit")  in favor of the  Trustee in an amount not to exceed  Six  Million  One
Hundred Eighty Thousand Eight Hundred Twenty-Two Dollars  ($6,180,822) to secure
the payment of the Bonds; and

         WHEREAS, it is the purpose of this Reimbursement Agreement to set forth
the Bank's commitment to issue the Letter of Credit and the Borrower's agreement
to reimburse  the Bank for any and all payments made by the Bank pursuant to the
Letter of Credit.

         NOW THEREFORE,  in consideration  of the mutual  agreements made herein
and  other  good  and  valuable  consideration,   receipt  of  which  is  hereby
acknowledged, the parties hereto agree as follows:




<PAGE>

                                   SECTION ONE

                                   DEFINITIONS

         Section 1.1. Terms Defined As used in this Reimbursement Agreement, the
following terms have the following respective meanings. Any accounting term used
but not specifically  defined herein shall be construed in accordance with GAAP.
Capitalized  terms used in this  Reimbursement  Agreement not otherwise  defined
herein  shall be defined as set forth in the  Indenture or the Letter of Credit.
The  definition of each  agreement,  document,  and instrument set forth in this
Section 1. I shall be deemed to mean and include such  agreement,  document,  or
instrument as amended, restated, or modified from time to time:

         "Assignment"  shall mean the Assignment of Contract  Documents from the
Borrower to the Bank, dated as of October 1, 1997.

         "Bank's Prime Rate" means that rate of interest  established by Bank as
its Prime Rate  whether or not such rate is publicly  announced.  The Prime Rate
may not be the lowest rate charged by Bank for commercial or other extensions of
credit.

         "Bank  Documents:   means  the  Letter  of  Credit,  the  Reimbursement
Agreement,  the Mortgage, the Pledge Agreement, the Building Loan Agreement, the
Collateral  Mortgages,  the Indemnity  Agreement,  the Assignment,  the Security
Agreement,  the Guaranty and any other document now or hereafter executed by the
Issuer,  the Borrower or the  Guarantor  in favor of the Bank which  affects the
rights of the Bank in or to the Project Facility,  in whole or in part, or which
secures or guarantees any sum under any Bank Document.

         "Bank  Obligation"  shall  mean  an  amount  equal  to the  outstanding
liability of the Bank from time to time under the Letter of Credit.

         "Bank's  Inspector" shall mean any inspector  designated by the Bank to
periodically inspect the Project Facility during construction.

         "Bond Counsel" shall mean Lemery & Reid,  P.C., or any other nationally
recognized Bond Counsel reasonably acceptable to Bank.

         "Bond Purchase  Drawing" shall have the meaning set forth in the Letter
of Credit.

         "Bonds"  shall  mean the Six  Million  Dollars  ($6,000,000)  aggregate
principal amount of County of Saratoga Industrial  Development Agency Multi-Mode
Variable Rate Industrial  Development  Revenue Bonds (Spurlock  Adhesives,  Inc.
Project), Series 1997A issued by the Issuer pursuant to the Indenture.



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<PAGE>

         "Building Loan Agreement" shall mean the Building Loan Agreement, dated
as of October 1, 1997, between the Bank, the Borrower and the Issuer.

         "Business Day" shall mean any day of the year other than (i) a Saturday
or Sunday, (ii) any day on which commercial banks located in New York, New York,
or the city or cities in which are located the  corporate  trust  offices of the
Trustee  and the Tender  Agent and the office of the Bank at which  demands  for
payment under the Letter of Credit are to be presented are  authorized by law to
close, or (iii) any day on which the New York Stock Exchange is closed.

         "Closing  Date" shall mean October 10, 1997,  or such other date agreed
upon by the Borrower, Issuer, and the Bank.

         "Completion Date" shall mean May 30, 1998.

         "Current  Assets" shall mean, at a particular  date, the current assets
of the Borrower, as determined in accordance with GAAP.

         "Current  Liabilities"  shall mean, at a particular  date,  the current
liabilities of the Borrower, as determined in accordance with GAAP.

         "Credit" shall have the meaning set forth in Section 8. 1 (b) hereof.

         "Date of  Issuance"  shall mean the date of  issuance  of the Letter of
Credit.

         "Determination  of Taxability"  shall have the meaning assigned thereto
in the Indenture.

         "Eligible  Investments"  shall have the meaning assigned thereto in the
Indenture.

         "Environmental  Law" shall mean any federal,  state,  or local statute,
law, ordinance, code, rule, regulation, order or decree regulating, relating to,
or  imposing  liability  upon a Person in  connection  with the use,  release or
disposal of any hazardous toxic or dangerous substance, waste or material.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the  same  may  from  time  to  time  be  amended  or  supplemented,  and all
regulations thereunder.

         "Event of Default" shall have the meaning assigned thereto in Section 7
hereof.

         "Financing  Documents"  shall have the meaning  assigned thereto in the
Indenture.

         "GAAP" shall mean generally accepted  accounting  principles as then in
effect,  which  shall  include  the  official  interpretations  thereof  by  the
Financial Accounting Standards Board, consistently applied.


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<PAGE>

         "General Contract" shall mean the general  construction  contract dated
September  30, 1997  between the  Borrower  and the General  Contractor  for the
Project Facility.

         "General   Contractor"  shall  mean  D.B.  Western,   Inc.,  an  Oregon
corporation.

         "Guarantor"   shall  mean   Spurlock   Industries,   Inc.,  a  Virginia
corporation.

         "Indebtedness"  shall mean, at a particular  date, all indebtedness for
money  borrowed  or for the  deferred  purchase  price  of  property  and  lease
obligations of Borrower  which have been, or which in accordance  with Statement
of Financial Accounting  Standards No. 13, as from time to time amended,  should
be, capitalized.

         "Indenture"  shall  mean the Trust  Indenture,  dated as of  October 1,
1997, between the Issuer and the Trustee.

         "Indenture  Default"  shall mean an Event of Default under and pursuant
to the Indenture.

         "Interest  Coverage  Requirement"  shall mean the  amount  equal to 110
days' accrued  interest at the Maximum Rate on the outstanding  principal amount
of the Bonds to enable the Trustee to pay (i) the interest on the Bonds when due
and (ii) an amount equal to the interest portion,  if any, of the purchase price
of  any  Bonds  tendered  for  purchase  by the  holder  thereof  to the  extent
remarketing proceeds are not available for such purposes.

         "Interest  Drawing"  shall have the  meaning set forth in the Letter of
Credit.

         "Issuer"  shall  mean the  County of  Saratoga  Industrial  Development
Agency, a public benefit corporation existing under the laws of the State of New
York.

         "Land" shall have the meaning set forth in the Indenture.

         "Letter of Credit"  shall mean the Letter of Credit to be issued by the
Bank on the Closing Date pursuant to this Reimbursement  Agreement,  such Letter
of Credit to be substantially in the form of Exhibit A hereto.

         "Letter  of Credit  Fee" shall  have the  meaning  set forth in Section
2.2(b) hereof.

         "Maximum Rate" shall mean a rate per annum of ten percent (10%).

         "Mortgage" shall have the meaning set forth in the Indenture.

         "Net  Profit  After Tax" means,  for any period,  the net income of the
Borrower after provisions for taxes as determined in accordance with GAAP.

         "Permitted  Liens"  shall mean the Liens  referred  to in  Section  6.8
hereof.

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<PAGE>

         "Person"  shall mean any natural  person,  corporation  (which shall be
deemed to include business trust), association,  partnership,  political entity,
or political subdivision thereof.

         "Plan"  shall  mean any plan  defined  in  Section  4021(a) of ERISA in
respect of which  Borrower or any Subsidiary of the Borrower is an "employer" or
a  "substantial  employer" as defined in Sections 3(5) and  4001(a)(2) of ERISA,
respectively.

         "Plans and Specifications"  shall mean the plans and specifications for
the Project Facility approved by the Bank.

         "Pledge  Agreement" means the Pledge and Security Agreement dated as of
October 1, 1997 from Borrower to the Bank.

         "Pledged  Collateral"  shall mean the  collateral in which the Borrower
has given the Bank a lien or security  interest  pursuant to the  Mortgage,  the
Security Agreement, the Assignment and/or the Pledge Agreement.

         "Project  Fund"  shall  have  the  meaning   assigned  thereto  in  the
Indenture.

         "Principal  Drawing"  shall have the meaning set forth in the Letter of
Credit.

         "Project Facility" shall have the meaning set forth in the Indenture.

         "Purchaser"  shall mean the  original  purchaser or  purchasers  of the
Bonds.

         "Remarketing Agent" shall mean KeyBank National Association, Cleveland,
Ohio.

         "Reportable  Event"  shall  mean any  reportable  event as that term is
defined in ERISA.

         "Security  Agreement"  shall mean the Security  Agreement dated of even
date herewith by Borrower to Bank.

         "Stated  Amount"  shall  have the  meaning  set forth in the  Letter of
Credit.

         "Stated  Expiration  Date"  shall mean  October  17,  2002,  subject to
extension as provided in Section 8.1 herein.

         "Subordinated  Debt"  shall  mean  Indebtedness  of a  Person  which is
subordinated, in a manner satisfactory to the Bank, to all Indebtedness owing to
the Bank and to all other  indebtedness  which is pari passu therewith or senior
thereto.



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<PAGE>

         "Subsidiary"   or   "Subsidiaries"   shall  mean  (i)  any  for  profit
corporation more than fifty percent (50%) of the capital stock of which is owned
or controlled,  directly or indirectly,  by Borrower or any Subsidiary and whose
accounts are required to be  consolidated  with those of Borrower in  accordance
with generally accepted accounting principles, consistently applied and (ii) any
non-profit corporation which is controlled, directly or indirectly, by Borrower.

         "Tangible  Net Worth" shall mean the total assets of a Person less such
Person's (i) Total Debt,  (ii)  aggregate  amount of all  intangible  assets and
(iii) amounts due from related parties.

         "Termination  Date"  shall have the  meaning set forth in the Letter of
Credit.

         "Total  Debt"  shall  mean the  total of all items of  Indebtedness  or
liability which in accordance  with GAAP would be included in determining  total
liabilities  on the  liability  side  of the  balance  sheet  as of the  date of
determination.

         "Trustee" shall mean Star Bank, N.A. or any successor Trustee under the
Indenture.


                                   SECTION TWO

                          ISSUANCE OF LETTER OF CREDIT

         Section  2.1.  Issuance  of Letter of Credit.  Subject to the terms and
conditions  hereof,  the Bank agrees to execute and deliver the Letter of Credit
substantially in the form of Exhibit A hereto. The obligations of the Bank under
the Letter of Credit  shall be absolute and  irrevocable  and shall be performed
strictly  in  accordance  with  the  terms  of the  Letter  of  Credit  and this
Reimbursement Agreement.

         Section 2.2. Fees and Reimbursement.

         A.       The Borrower hereby agrees to pay to the Bank:

                  1.       Before  2:00 p.m.,  New York time,  on each date that
                           any  amount  is drawn  under  the  Letter  of  Credit
                           pursuant  to  a  Principal  Drawing  or  an  Interest
                           Drawing;  and before  2:00 p.m.,  New York time on or
                           before the second  (2nd)  Business Day after the date
                           that any  amount is drawn  under the Letter of Credit
                           pursuant  to a Bond  Purchase  Drawing a sum equal to
                           the amount so drawn  under the Letter of Credit  plus
                           (x)  interest  accrued  from  the  date  of any  such
                           Principal Drawing, Interest Drawing, or Bond Purchase
                           Drawing,  if any,  on the  amount so drawn  under the
                           Letter of Credit as determined pursuant to clause (3)
                           of this  subsection (A) of this Section 2.2, plus (y)
                           any and all charges and  expenses  which the Bank may
                           pay or  incur  relative  to such  drawing  under  the
                           Letter of Credit, plus (z) a fee in the amount of Two
                           Hundred Dollars  ($200.00) for that drawing under the
                           Letter of Credit;


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<PAGE>

                  2.       Upon  each  transfer  of  the  Letter  of  Credit  in
                           accordance with its terms and as a condition thereto,
                           a sum in such amount as shall be  necessary  to cover
                           the  reasonable   costs  and  expenses  to  the  Bank
                           incurred in connection with such transfer;

                  3.       Interest,  payable on demand,  on any and all amounts
                           of any Principal  Drawing,  Interest  Drawing  and/or
                           Bond  Purchase  Drawing not paid by the Borrower when
                           due under any section of this Reimbursement Agreement
                           from the date such amounts  become due until  payment
                           in full,  such  interest at a rate per annum equal to
                           (i) prior to the  occurrence  of an Event of Default,
                           the Bank's Prime Rate, (ii) upon the occurrence of an
                           Event of Default and during the continuance  thereof,
                           the Bank's Prime Rate plus four percent (4%);

                  4.       On  demand,   reasonable  costs,  fees  and  expenses
                           incurred by the Bank,  including reasonable attorneys
                           fees, in  connection  with the issuance of the Letter
                           of  Credit or the  preparation  or  execution  of any
                           documents or opinions related thereto;

                  5.       On demand,  any and all reasonable  expenses incurred
                           by the Bank,  including reasonable attorneys fees, in
                           enforcing any of its rights under this  Reimbursement
                           Agreement, or any of the Bank Documents; and

                  6.       On or prior to closing,  any and all  appraisal  fees
                           relating  to  the  appraisal  of  the  real  property
                           subject to the Mortgage and the Collateral Mortgage.

                  7.       On  or  prior  to  the  Closing   Date,   a  one-time
                           origination fee equal to $38,400.

         B.       The  Borrower  hereby  agrees  to pay to Bank  on the  date of
                  issuance   of  the  Letter  of  Credit  and  on  each   annual
                  anniversary  of that date,  a fee (the "Letter of Credit Fee")
                  equal to an amount  calculated by  multiplying  the sum of (i)
                  the maximum  amount  available to be drawn under the Letter of
                  Credit  with  respect  to a  Principal  Drawing on the date of
                  calculation and (ii) the maximum amount  available to be drawn
                  under the Letter of Credit with  respect to Interest  Drawings
                  on the date of calculation, by one percent (1.0%) per annum.

         C.       The  Borrower  shall  pay to the  Bank all  reasonable  legal,
                  documentation  and  construction  monitoring  costs associated
                  with closing and funding this transaction.

         D.       If  any   change   in  any  law  or   regulation   or  in  the
                  interpretation  thereof  by any  court  or  administrative  or
                  governmental   authorities  charged  with  the  administration
                  thereof shall impose,  modify or deem  applicable any reserve,
                  special deposit or similar  requirement  which would impose on
                  the Bank any  reasonable  additional  costs (i) generally upon
                  the issuance or  maintenance of


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<PAGE>

                  letters of credit by the Bank, (ii) specifically in respect of
                  this Reimbursement Agreement or the Letter of Credit, or (iii)
                  in respect of any  capital  adequacy  requirement  (including,
                  without limitation,  a requirement which affects the manner in
                  which   the   Bank   allocates   capital   resources   to  its
                  commitments),  and the result of such imposition of additional
                  costs as described in clause (i),  (ii),  or (iii) above shall
                  be to increase the cost to the Bank of issuing or  maintaining
                  the  Letter of Credit  (which  increase  in cost  shall be the
                  result of the Bank's reasonable allocation of the aggregate of
                  such cost  increases  resulting  from such events),  then, (x)
                  within thirty days of the Bank's  obtaining  knowledge of such
                  change in law, regulations or interpretation thereof, the Bank
                  shall so notify  the  Borrower  and (y) upon  receipt  of such
                  notice from the Bank,  accompanied by a certificate as to such
                  increased  cost,  the Borrower  shall pay as of the  effective
                  date of such change or interpretation  all additional  amounts
                  which are necessary to compensate  the Bank for such increased
                  cost incurred by the Bank.  The  certificate of the Bank as to
                  such increased  costs shall show the manner of calculation and
                  shall be conclusive  (absent  manifest error) as to the amount
                  thereof.

         E.       The Borrower's  obligations to make payments to the Bank under
                  this  Section 2.2 shall be deemed  satisfied  to the extent of
                  payments made by the Trustee to the Bank from funds on deposit
                  with and held by the Trustee pursuant to the Indenture.

         F.       All  payments by the Borrower to the Bank  hereunder  shall be
                  made  in  lawful   currency  of  the  United   States  and  in
                  immediately  available funds at the Bank's  principal  office,
                  currently at 66 South Pearl Street, Albany, New York 12207.

         Section  2.3.  Borrower's   Obligations   Unconditional.   The  payment
obligations  of  the  Borrower  under  this  Reimbursement  Agreement  shall  be
absolute,  unconditional  and  irrevocable  and shall be  satisfied  strictly in
accordance  with  the  terms  of  this   Reimbursement   Agreement,   under  all
circumstances   whatsoever,   including,   without  limitation,   the  following
circumstances:

         A.       Any lack of validity or  enforceability of the Bank Documents,
                  the Financing  Documents or any other  agreement or instrument
                  relating thereto;

         B.       Any  amendment or waiver of or any consent to  departure  from
                  the terms of the Letter of  Credit,  the Bank  Documents,  the
                  Financing  Documents  or any  other  agreement  or  instrument
                  relating thereto;

         C.       The existence of any claim, setoff, defense or right which the
                  Borrower may have at any time against any  beneficiary  or any
                  transferee of the Letter of Credit (or any persons or entities
                  for whom any such  beneficiary  or any such  transferee may be
                  acting),  the Bank or any other  person or entity,  whether in
                  connection with this Reimbursement Agreement, the transactions
                  contemplated by the Bank Documents or the Financing Documents,
                  or any unrelated transaction;



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<PAGE>

         D.       Any statement or any other document presented under the Letter
                  of  Credit  proving  to  be  forged,  fraudulent,  invalid  or
                  insufficient  in any respect or any  statement  therein  being
                  untrue or inaccurate in any respect whatsoever;

         E.       Payment  by the  Bank  under  the  Letter  of  Credit  against
                  presentation  of a request  which on its face appears to be in
                  accordance with the terms of the Letter of Credit; or

         F.       Any other circumstance or happening whatsoever, whether or not
                  similar to any of the foregoing.



                                  SECTION THREE

                         REPRESENTATIONS AND WARRANTIES

         The Borrower expressly represents and warrants that:

         Section  3.1.   Incorporation  and  Legal  Authority.   Borrower  is  a
corporation  duly organized and validly  existing and in good standing under the
laws of the State of Virginia,  is duly  qualified to do business and is in good
standing in the State of New York,  and has all  requisite  corporate  power and
authority  to own  its  property  and to  carry  on its  business  as now  being
conducted, to enter into the Bank Documents and the other agreements referred to
herein and transactions  contemplated  thereby,  and to carry out the provisions
and conditions of the Bank Documents.  Borrower is duly qualified to do business
and is in good  standing in every  jurisdiction  where the failure to so qualify
would have a material adverse effect on the business of Borrower.

         Section  3.2.  Due  Execution  and  Delivery.  Borrower has full power,
authority  and legal  right to incur the  obligations  provided  for in,  and to
execute and deliver and to perform and observe the terms and  provisions of, the
Bank  Documents,  and each of them has been duly  executed and  delivered by the
Borrower by all  required  corporate  action,  and the Borrower has obtained all
requisite consents to the transactions contemplated thereby under any instrument
to which it is a party, and the Bank Documents  constitute the legal,  valid and
binding  obligations  of the  Borrower  enforceable  in  accordance  with  their
respective  terms,  except  as the  enforceability  thereof  may be  limited  by
applicable  bankruptcy,  insolvency or other similar laws  affecting  creditors'
rights generally.

         Section 3.3. No Breach of Other Instruments.  Neither the execution and
delivery of the Bank  Documents,  nor the  compliance by Borrower with the terms
and conditions of the Bank Documents,  nor the  consummation of the transactions
contemplated  thereby,  will  conflict  with or result in a breach of Borrower's
articles  of  incorporation  or  by-laws,  or any of the  terms,  conditions  or
provisions  of any  agreement or  instrument  or any charter or other  corporate
restriction or law, regulation, rule or order of any governmental body or agency
to which Borrower is now a party or is subject,  or imposition of a lien, charge
or encumbrance which will

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<PAGE>

have a  material  adverse  affect  upon any of the  property  or  assets  of the
Borrower pursuant to the terms of any such agreement or instrument.

         Section   3.4.   Government   Authorization.   No  consent,   approval,
authorization  or  order  of any  court  or  governmental  agency  or  body  not
previously  obtained  is  required  for  the  consummation  by  Borrower  of the
transactions contemplated by the Bank Documents or the Financing Documents.

         Section 3.5.  Ratification  Of Liens On And  Security  Interests In The
Project  Facility.  The Company hereby  ratifies,  confirms and acknowledges the
Bank's rights,  Liens on and security  interests in the Project Facility and the
other  collateral  as described  in and granted  pursuant to the  Mortgage,  the
Collateral Mortgage, the Security Agreement and the other Financing Documents.

         Section 3.6. Absence of Defaults,  etc. Borrower is not (i) in material
default  under any  indenture or contract or agreement to which it is a party or
by which it is bound,  (ii) in  violation of its  articles of  incorporation  or
by-laws,  each as amended,  (iii) in default  with  respect to any order,  writ,
injunction or decree of any court, or (iv) in default under any order or license
of any federal or state governmental  department,  which default or violation in
any of the  aforesaid  cases  materially  and adversely  affects its  respective
business or property. There exists no condition, event or act which constitutes,
or after notice or lapse of time or both would constitute, an Event of Default.

         Section  3.7.   Indebtedness  of  Borrower.   Borrower  does  not  have
outstanding on the date hereof, any Indebtedness for borrowed money in excess of
$100,000,  except for such  Indebtedness  reflected on the financial  statements
referred to in Section 3.9 hereof or otherwise disclosed to the Bank, and except
in connection with the Bonds.

         Section 3.8.  Subsidiaries.  Borrower has no Subsidiaries.

         Section 3.9. Financial Statements. All financial statements of Borrower
furnished to the Bank on or prior to the date hereof are correct and complete in
all material  respects and fairly present the financial  position of Borrower at
the dates  thereof and the  results of its  operations  for the periods  covered
thereby,  and such  financial  statements,  including  any  notes  and  comments
contained  therein,  have been prepared in conformity  with  generally  accepted
accounting  principles  applied on a  consistent  basis  throughout  the periods
involved.

         Section  3.10.  No  Adverse  Change.  Subsequent  to  the  date  of the
financial  statements  referred  to in  Section  3.9  hereof,  there has been no
material adverse change in the business,  properties or condition,  financial or
otherwise, of the Borrower, except for changes arising in the ordinary course of
business or in  connection  with the issuance and sale of the Bonds or as may be
otherwise disclosed in writing to the Bank prior to the date hereof.

         Section 3.11. Taxes. Borrower has filed all tax returns which are to be
filed and has paid, or has made adequate provision for the payment of, all taxes
which have or may become due pursuant to said returns or to assessments received
by them. The Borrower knows of no deficiency  assessment or proposed  deficiency
assessment of taxes against Borrower, except as

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<PAGE>

may be otherwise disclosed in writing to the Bank prior to the date hereof.

         Section 3.12. ERISA. No Reportable Event or Prohibited  Transaction (as
defined  in Section  4975 of the  Internal  Revenue  Code) has  occurred  and is
continuing  with  respect  to  any  Plan  and  Borrower  has  not  incurred  any
"accumulated  funding  deficiency"  as such term is defined  in  Section  302 of
ERISA.

         Section 3.13.  Litigation.  Except as otherwise disclosed in writing to
the Bank prior to the date hereof,  there are no actions,  suits or  proceedings
pending,  or to the knowledge of Borrower,  threatened  against  Borrower or its
property in any court, or before or by any federal,  state or municipal or other
governmental   department,   commission,   board,   bureau,   agency   or  other
instrumentality,  domestic or foreign,  which could result in any adverse change
in  the  business,  property  or  assets,  or in  the  condition,  financial  or
otherwise, of Borrower,  except for actions, suits or proceedings of a character
normally incident to the kind of business conducted by Borrower,  none of which,
either  individually  or  in  the  aggregate,  if  adversely  determined,  would
materially  impair  Borrower's  right  or  ability  to  carry  on  its  business
substantially  as now  conducted or  materially  adversely  affect the financial
position or operations of the Borrower.

         Section 3.14. Ownership of Property.  Borrower, or the Issuer, has good
and  marketable  fee  title  to,  or  valid  leasehold  interests  in,  its real
properties in accordance with the laws of the  jurisdiction  where located,  and
good and marketable  title to  substantially  all its other property and assets,
subject,   however,  in  the  case  of  real  property,  to  title  defects  and
restrictions  which do not materially  interfere  with the operations  conducted
thereon by Borrower. Except for Permitted Liens, the real property and all other
property  and  assets of the  Borrower  are free from any liens or  encumbrances
securing  Indebtedness  and from  any  other  liens,  encumbrances,  charges  or
security  interests of any kind.  Each lease to which  Borrower is a party is in
full force and  effect,  no  material  default on the part of any party  thereto
exists,  and,  as to each of such  leases to which  Borrower is party as lessee,
Borrower  enjoys peaceful and  undisturbed  possession of the property  affected
thereby.



                                       11

<PAGE>

         Section 3.15. No  Burdensome  Restrictions.  Borrower is not a party to
any  instrument  or  agreement  or  subject to any  charter  or other  corporate
restriction  which would to a material  extent  adversely  affect the  business,
property, assets, operations or condition, financial or otherwise, of Borrower.

         Section 3.16. Environmental Matters. Borrower is in compliance with all
Environmental Laws and all applicable federal, state and local health and safety
laws,  regulations,   ordinances  or  rules,  except  to  the  extent  that  any
non-compliance  will not, in the aggregate,  have a materially adverse effect on
Borrower  or the  ability of  Borrower  to fulfill  its  obligations  under this
Reimbursement Agreement.


                                  SECTION FOUR

                               CLOSING CONDITIONS

         The obligation of the Bank to issue the Letter of Credit on the Closing
Date shall be subject to the following conditions precedent:

         Section  4.1.  Execution  and  Delivery of the Bank  Documents  and the
Financing Documents.  The Borrower and the Guarantor, as applicable,  shall have
delivered to the Bank fully executed copies of each of the Bank  Documents,  and
the Issuer, the Trustee, the Borrower, and the Guarantor,  as applicable,  shall
have duly authorized, executed and delivered the Financing Documents, transcript
of proceedings, authorizing resolutions and incumbency certificates.

         Section 4.2.  Delivery of Documents  Relating to the Project  Facility.
The Borrower  shall have duly and validly  executed and  delivered the Mortgage,
Security Agreement,  Assignment,  Bond Pledge, and UCC financing statements; the
Mortgage,  the  Assignment  and UCC  financing  statements  shall have been duly
recorded and/or filed in favor of the Bank. In addition, the Borrower shall have
delivered to the Bank:

         (a)      Evidence  that  the Land is not  located  in a  special  flood
                  hazard area as identified by HUD;

         (b)      Certificates  of insurance and evidence of payment of premiums
                  therefor  with respect to the  insurance  required by the Bank
                  with respect to the Project  Facility as set forth in Sections
                  6.3 and 6.4 of the Installment Sale Agreement;

         (c)      A  current   certified  survey  of  the  Land  prepared  by  a
                  registered  surveyor  satisfactory to the Bank, and containing
                  on the face thereof the completed  certificate of the surveyor
                  in the  form of the  surveyor's  certificate  required  by the
                  Bank,  dated not more than  thirty (30) days prior to the Date
                  of  Issuance,  and in  compliance  with the  Minimum  Standard
                  Detail  Requirements for ALTA/ASCM Class A land title surveys,
                  as adopted by the American Land Title Association and American
                  Congress on Surveying and Mapping in 1992;


                                       12

<PAGE>

         (d)      A current Phase I environmental  audit of the Project Facility
                  satisfactory to the Bank in its sole discretion prepared by an
                  environmental consultant reasonably satisfactory to the Bank;

         (e)      A Commitment  to issue the Title Policy in the form of an ALTA
                  Loan Policy of Title Insurance issued by the Title Company (i)
                  insuring that the  Mortgage,  as of the time of its filing for
                  record,  is a first and best lien upon the Land,  and that the
                  title to the Land is free,  clear  and  unencumbered,  subject
                  only to the Permitted Liens; (ii) insuring the priority of the
                  Mortgage  over  mechanics  or   materialmen's   liens;   (iii)
                  obligating  the Title  Company to  affirmatively  insure  that
                  access  to  Land  is  by  a  dedicated  and  accepted   public
                  right-of-way;   and  (iv)  including  such   endorsements  and
                  affirmative   insurance  as  may  be  required  by  the  Bank,
                  including,   but  not  limited  to,  the  so-called   "Pending
                  Disbursement Clause";

         (f)      Evidence  satisfactory to the Bank that the Project  Facility,
                  when completed,  and the proposed and actual use thereof, will
                  comply in all  material  respects  with all  applicable  laws,
                  statutes, codes, ordinances, rules and regulations, including,
                  but not  limited to,  zoning and  Environmental  Laws,  of all
                  governmental  authorities  having  jurisdiction over the same,
                  and that there is no action or proceeding pending (or any time
                  for an appeal of any  decision  rendered)  before  any  court,
                  quasi-judicial  body or  administrative  agency at the Date of
                  Issuance  relating  to  the  validity  of  this  Reimbursement
                  Agreement  or  the  transactions  contemplated  hereby  or the
                  proposed or actual use or operation of the Project Facility.

         Section 4.3.  Issuance and Sale of the Bonds. The Bonds shall have been
duly issued and sold to the Purchaser pursuant to the Financing Documents.

         Section 4.4.  Representations  and Warranties True as of Closing and No
Event  of  Default.   The  representations  and  warranties  contained  in  this
Reimbursement  Agreement  and the  other  Bank  Documents  shall  be true in all
material respects on the Closing Date with the same effect as though made on and
as of that  date  and no  condition,  event or act  shall  have  occurred  which
constitutes an Event of Default or, with notice or lapse of time, or both, would
constitute an Event of Default.

         Section 4.5. Opinion of Borrower Counsel.  The Bank shall have received
from Williams,  Mullen,  Christian & Dobbins,  P.C., counsel for the Borrower, a
closing  opinion  with  respect to such  matters  incident  to the  transactions
contemplated hereby as Bank and Bank's counsel may reasonably request.

         Section 4.6. Opinion of Bond Counsel. The Bank shall have received from
Bond Counsel an opinion with respect to the  tax-exempt  status of the Bonds and
the absence of any  securities  registration  requirements  with  respect to the
Bonds or the Letter of Credit under the Securities Act of 1933, as amended.


                                       13

<PAGE>

         Section  4.7.  Proceedings  Satisfactory.   All  proceedings  taken  in
connection with the execution and delivery of this  Reimbursement  Agreement and
the other Bank Documents  shall be  satisfactory  to the Bank and the Bank shall
have received  copies of such  certificates,  documents and papers as reasonably
requested in connection therewith, all in form and substance satisfactory to the
Bank.

         Section 4.8 Guaranty.  The Guarantor  shall have executed and delivered
the Guaranty to the Bank.

         Section 4.9 Other. Borrower shall have delivered to the Bank such other
documents,  instruments  and approvals as Bank may  reasonably  request and this
Reimbursement Agreement shall be in effect.

                                  SECTION FIVE

                         DISBURSEMENTS FROM PROJECT FUND

         Borrower  shall not request or receive any  disbursement  of funds from
the  Project  Fund  unless the Bank shall have  approved  such  disbursement  in
writing to the Trustee and the following  conditions  shall be true with respect
to each such disbursement:

         Section 5.1. Bank's Inspector's Certificate. Prior to each disbursement
the Bank's  Inspector  shall  inspect  the  Project  Facility to verify that the
request  for  disbursement  accurately  indicates  the  amount  of  construction
completed  to said date.  The Bank shall have  received a  certificate  from the
Bank's  Inspector  certifying (i) that the  construction of the Project Facility
theretofore  completed,  if any, has been performed  substantially in accordance
with the Plans and Specifications;  (ii) that the quality of construction of the
Project Facility theretofore  completed is in accordance with generally accepted
standards in the  construction  industry for the cost of the construction of the
Project  Facility;  (iii)  that the  undisbursed  portion  of the  Project  Fund
together  with other  monies to be provided by Borrower are adequate to complete
the construction and equipping of the Project Facility pursuant to the Plans and
Specifications  by the Completion Date; and (iv) that it is reasonable to expect
that  the  completion  of the  Project  Facility  will  occur on or  before  the
Completion  Date. It is understood  and agreed that the Bank shall not be liable
for any reason as a result of such inspections, the parties hereby agreeing that
the inspections are solely for the benefit of the Bank.

         Section  5.2.  No  Liens.   The  Bank  shall  have  received   evidence
satisfactory  to the Bank that since the last  preceding  disbursement  from the
Project  Fund  there has been no  change  in the  state of title to the  Project
Facility.  The Borrower shall pay the cost of each title update  required by the
Bank from the title  company in  connection  with each  request for  approval of
disbursement and each endorsement to the title policy.



                                       14

<PAGE>

         Section 5.3. Request for Approval of Disbursement.  Not later than five
(5) business days before the date on which the Borrower  desires a  disbursement
from the  Project  Fund,  the  Borrower  shall  submit to the Bank (i) a written
request  for  approval  of  the  disbursement  from  the  Project  Fund;  (ii) a
certification of the Borrower that, among other things, the Borrower has paid or
actually incurred the costs for which the request is being made; (iii) a revised
Project Budget showing the balance of each category of Project costs; and (iv) a
requisition using AIA Form G702 and/or G703 if the draw is used for construction
or such other form as the Bank may request, accompanied by a cost breakdown, the
accuracy of which shall be verified by the Bank's Inspector.

         Section 5.4. Compliance with the Building Loan Agreement.  The Borrower
will submit evidence to the Bank that it is in compliance with all conditions to
the disbursement of loan proceeds under the Building Loan Agreement.


                                   SECTION SIX

                                    COVENANTS

         The Borrower  covenants and agrees that,  except as otherwise waived by
the Bank in writing, from the date of this Reimbursement Agreement and until the
obligations of the Borrower to the Bank hereunder are satisfied in full, it will
comply with the following provisions:

         Section 6.1.  Accounting;  Financial  Statements and Other Information.
Borrower  will  maintain  a  standard  system  of  accounting,  established  and
administered  in  accordance  with  generally  accepted  accounting   principles
consistently followed throughout the periods involved, and will set aside on its
books for each fiscal year the proper  amounts for  depreciation,  obsolescence,
amortization, bad debts, current and deferred taxes, and other purposes as shall
be required by generally  accepted  accounting  principles.  The  Borrower  will
deliver to the Bank:

         (a)      As soon as  practicable  after  the end of each  month in each
                  fiscal year,  except the last,  and in any event within thirty
                  (30) days thereafter,  internally  prepared monthly  financial
                  statements of the Borrower,  certified as complete and correct
                  by the principal financial officer of the Borrower, subject to
                  changes resulting from year-end adjustments;

         (b)      As soon as practicable  after the end of each fiscal year, and
                  in any event within one hundred twenty (120) days  thereafter,
                  a  statement  of  condition  of Borrower as of the end of such
                  year,  and  statements  of cash flows and changes in financial
                  position  and/or  changes in fund  balances as  applicable  to
                  Borrower  for  such  year,  setting  forth  in  each  case  in
                  comparative form the figures for the previous fiscal year, all
                  in reasonable  detail and certified as complete and correct by
                  the principal  financial officer of Borrower,  reviewed (audit
                  level) by a firm of independent  certified public  accountants
                  selected by Borrower and satisfactory to the Bank;



                                       15

<PAGE>

         (c)      Promptly  upon receipt  thereof,  copies of all other  written
                  reports  submitted to the Borrower by independent  accountants
                  in  connection  with  any  annual  or  interim  audit  of  the
                  corporate books of the Borrower;

         (d)      With reasonable promptness, such other data and information as
                  from time to time may be reasonably requested by the Bank; and

         (e)      Accompanying each set of financial statements specified in (a)
                  and  (b)  above,  a  certificate  of a  principal  officer  of
                  Borrower,  to the effect that (i) Borrower  has complied  with
                  and is in compliance  with all the terms and covenants of this
                  Reimbursement Agreement binding upon Borrower and with all the
                  terms and covenants of the other Financing  Documents  binding
                  upon Borrower,  and (ii) there exists no Event of Default, and
                  no event which with the giving of notice or passage of time or
                  both,  would constitute such an Event of Default or if this is
                  not the case, that one or more specified Events of Default has
                  occurred  and  the  steps   Borrower,   with  Bank's   written
                  concurrence, is taking to cure same.

         Section 6.2. Insurance and Maintenance of Properties and Business.  The
Borrower will maintain, with financially sound and reputable insurers, insurance
to protect its  properties  and business  against  losses or damages of the kind
customarily insured against by corporations of established  favorable reputation
engaged in the same or a similar business and similarly situated, including, but
not limited to, (a) the insurance  required  pursuant to the Bank  Documents and
the Financing  Documents,  (b) necessary workers'  compensation  insurance,  (c)
adequate  public  liability  insurance,  and (d) such other  insurance as may be
required  by law or as  may be  reasonably  required  in  writing  by the  Bank.
Borrower  will,  upon  request,  furnish to the Bank a schedule of all insurance
carried by it,  setting  forth in detail the amount and type of such  insurance.
The Borrower will maintain, in good repair,  working order and condition (normal
wear and tear  excepted),  all properties  used or useful in the business of the
Borrower.

         Section 6.3. Payment of Indebtedness  and Taxes.  Borrower will pay (a)
all of its  Indebtedness  (not required to be subordinated  hereunder) and other
obligations in accordance with normal terms or any applicable  grace periods and
(b) all taxes,  assessments,  and other governmental  charges levied upon any of
its respective properties or assets or in respect of its respective  franchises,
business,  income, or profits before the same become delinquent,  except that no
such Indebtedness,  obligations,  taxes,  assessments,  or other charges need be
paid if  contested  by  Borrower  in good faith and by  appropriate  proceedings
promptly  initiated and diligently  conducted and if appropriate  provision,  if
any, as shall be required by GAAP, shall have been made therefor.

         Section 6.4. Litigation; Adverse Changes. Borrower will promptly notify
the Bank in writing of (a) any event  which,  if  existing  at the date  hereof,
would require  qualification of the  representations and warranties set forth in
Sections  3.10 and 3.13 and (b) any material  adverse  change in the  condition,
business, or prospects, financial or otherwise, of Borrower.


                                       16

<PAGE>

         Section 6.5. Inspection. Borrower will make available for inspection by
duly authorized  representatives of the Bank, its books, records, and properties
when reasonably  requested to do so, and will furnish the Bank such  information
regarding  its  respective  business  affairs and financial  condition  within a
reasonable time after written request therefor.

         Section 6.6.  Environmental Matters.  Borrower:

         (a)      Shall comply in all material  respects with all  Environmental
                  Laws.

         (b)      Shall  deliver  promptly  to Bank (i) copies of any  documents
                  received  from  the  United  States  Environmental  Protection
                  Agency or any  state,  county or  municipal  environmental  or
                  health agency,  and (ii) copies of any documents  submitted by
                  Borrower to the United States Environmental  Protection Agency
                  or any  state,  county or  municipal  environmental  or health
                  agency concerning its operations.

         Section 6.7. Sale, Purchase and/or Lease of Assets.  Borrower will not,
directly or indirectly,  (a) make or commit to make any  expenditures in respect
of the  purchase  or other  acquisition  of fixed or capital  assets  (excluding
normal  replacements  and  maintenance  which are  properly  charged  to current
operations),  provided,  that the Borrower may make capital  expenditures during
calendar year 1997 in an amount not to exceed  $7,000,000 and,  thereafter,  for
any  calendar  year,  in an amount not to exceed  $800,000  or (b) sell,  lease,
transfer or otherwise  dispose of all or any  substantial  part of its assets to
any other Person.

         Section 6.8. Mortgage,  Security  Interests,  and Liens.  Borrower will
not,  directly or  indirectly,  create,  incur,  assume,  or permit to exist any
mortgage, security interest, lien, charge, encumbrance on, pledge or deposit of,
or  conditional  sale or other title  retention  agreement  with respect to, any
property or asset of Borrower  now owned or  hereafter  acquired and included in
the Project Facility (herein called "Liens") other than:

         (a)      Liens for  taxes,  assessments,  or  governmental  charges  or
                  levies  the  payment of which is not at the time  required  by
                  Section 6.3 hereof;

         (b)      Liens imposed by law,  such as Liens of  landlords,  carriers,
                  warehousemen,   mechanics,  and  materialmen  arising  in  the
                  ordinary  course  of  business  for  sums not yet due or being
                  contested by appropriate  proceedings  promptly  initiated and
                  diligently conducted, provided other appropriate provision, if
                  any,  as  shall be  required  by GAAP  shall  have  been  made
                  therefor;

         (c)      Liens  incurred or  deposits  made in the  ordinary  course of
                  business   in   connection    with   workers'    compensation,
                  unemployment insurance, and other types of social security, or
                  to secure the performance of tenders,  statutory  obligations,
                  and surety and appeal bonds,  or to secure the performance and
                  return of money bonds and other similar obligations, excluding
                  obligations for the payment of borrowed money;

                                       17

<PAGE>




         (d)      Any judgment Lien arising in connection with court proceedings
                  so long as the  execution  or  other  enforcement  thereof  is
                  effectively  stayed and the claims  secured  thereby are being
                  contested in good faith by appropriate proceedings;

         (e)      Other  Liens  (other  than  mechanics  liens  relating  to the
                  Project Facility)  incidental to the conduct of the Borrower's
                  business or ownership of properties and assets,  which are not
                  incurred nor granted in connection with the borrowing of money
                  or the  obtaining of advances or credits,  and which do not in
                  the  aggregate  materially  detract  from the  value of its or
                  their respective  property or assets or materially  impair the
                  use thereof in the ordinary course of business;

         (f)      Purchase  money  security  interest  on any  capital  asset of
                  Borrower if such purchase money security  interest attaches to
                  such capital asset concurrently with the acquisition  thereof,
                  provided  the debt so secured  does not cause the  Borrower to
                  breach Section 6.7 of this Agreement;

         (g)      Liens  or  interests   evidenced  by  the   Installment   Sale
                  Agreement,  Mortgage, the Assignment, the Collateral Mortgage,
                  the Security Agreement or the Pledge Agreement, as well as any
                  other Liens in favor of the Bank or any affiliate of the Bank;

         (h)      Any Lien on the  project  Facility to which the Bank gives its
                  prior written consent;

         (i)      The  mortgage and  security  agreement  dated as of october 1,
                  1997 (the "Second  Mortgage")  from the Issuer and the Company
                  to D.B. Western, Inc.;

         (j)      The Lien granted pursuant to the Construction Contract; and

         (k)      The operating lease between the Company and D.B. Western, Inc.
                  dated September 30, 1997.

         Section  6.9.  Borrowed  Money.  The  Borrower  will not,  directly  or
indirectly,  create, incur, or assume Indebtedness,  or otherwise become, be, or
remain  liable with respect to, any  Indebtedness,  provided  that the foregoing
restrictions shall not apply to:

         (a)      The Indebtedness  created hereunder and any other Indebtedness
                  now or  hereafter  payable by the  Borrower to the Bank or any
                  affiliate of the Bank;

         (b)      Indebtedness  of the Borrower which has been  subordinated  to
                  the Bank in a manner satisfactory to the Bank;

         (c)      Existing  Indebtedness  which is reflected  on the  Borrower's
                  financial  statements referred to in Section 3.9 hereof or has
                  been otherwise disclosed to the Bank;

         (d)      Indebtedness secured by a Permitted Lien;

                                       18

<PAGE>



         (e)      Indebtedness of the Borrower evidenced by the Bonds; and

         (f)      Normal and  customary  trade  debt  incurred  in the  ordinary
                  course of business.

         Section 6.10.  Investments;  Loans. The Borrower will not,  directly or
indirectly,  (a)  purchase  or  otherwise  acquire  or own any  stock  or  other
securities of any other Person or (b) make or permit to be outstanding  any loan
or advance (other than trade advances in the ordinary course of business) to any
other Person except that:


                  (i)      Borrower may  purchase or  otherwise  acquire and own
                           marketable direct obligations of the United States of
                           America or any agencies thereof,  and certificates of
                           deposit and bankers' acceptances issued or created by
                           any domestic commercial bank;

                  (ii)     Borrower may make Eligible Investments; and

                  (iii)    Borrower may make employee loans not to exceed $1,000
                           per employee at any time and not to exceed $25,000 in
                           the aggregate at any time.

         Section  6.11.  Assumptions;  Guaranties.  Borrower  will  not  assume,
guarantee,  endorse,  or otherwise  become directly or  contingently  liable for
(including,  without  limitation,  liable  by way of  agreement,  contingent  or
otherwise,  to purchase,  to provide  funds for payment,  to supply funds to, or
otherwise invest in any debtor or otherwise to assure the creditor against loss)
any financial obligation or Indebtedness of any other Person,  except guaranties
by endorsement of negotiable  instruments  for deposit,  collection,  or similar
transactions in the ordinary course of business.

         Section  6.12.  Mergers;  Consolidation.  Borrower  will  not  merge or
consolidate with any Person,  dissolve,  wind up its affairs,  or sell,  assign,
lease,  or otherwise  dispose of (whether in one  transaction  or in a series of
transactions),  all or  substantially  all of its assets  (whether  now owned or
hereafter acquired) to any Person.

         Section 6.13.  Profitability  Covenant. The Borrower will not suffer or
permit any after- tax net loss (excluding non-cash extraordinary losses) for any
two (2) consecutive fiscal quarters.

         Section 6.14 Net Profit After Tax. The  Borrower's Net Profit After Tax
shall  not be less  than (i)  $750,000  as of  September  30,  1997  (cumulative
year-to-date);   (ii)   $1,000,000   as  of  December   31,   1997   (cumulative
year-to-date); and, thereafter, (iv) $300,000 for each subsequent quarter.

         Section 6.15  Tangible  Net Worth.  The  Borrower's  Tangible Net Worth
shall not as of September  30, 1997 or for any  subsequent  quarter be less than
$4,500,000.


                                       19

<PAGE>

         Section 6.16.  Total Debt to Tangible Net Worth.  The Borrower will not
permit the ratio of its Total Debt to its Tangible Net Worth,  calculated  as of
the end of each quarter, to exceed 2.75 to 1.00.

         Section 6.17. Debt Service Coverage Ratio. The Borrower will not suffer
or  permit  on  September  30,  1997  or at the end of any  subsequent  quarter,
Adjusted  Net  Income  for the 12- month  period  then or most  recently  ended,
expressed as a multiple of the current  maturities  of long term debt as of such
date,  to be less than 1.3 to 1. (For  purposes  hereof,  "Adjusted  Net Income"
shall mean the net income of the Borrower,  plus  depreciation  for such period,
plus amortization for such period).

         Section 6.18.  Changes to Plans and  Specifications,  General Contract.
The Borrower  will not make or permit to be made (a) any material  change in the
Plans and  Specifications;  (b) any changes in excess of 10% in any line item of
the Project Facility budget, (c) any material change in the terms and conditions
of the  General  Contract  or (d) any  change  in the  identity  of the  General
Contractor.

         Section  6.19.  Construction  of Project.  The Borrower  will cause the
construction  of the Project  Facility to be carried  forward with diligence and
continuity  and to be completed by the Completion  Date, and in accordance  with
the Plans and Specifications and all applicable zoning, building and other laws,
statutes, codes, ordinances, rules and regulations.

         Section 6.20. Additional Funds. The Borrower will, at any time or times
upon  request of the Bank,  deposit with the Bank such  additional  funds as are
reasonably  determined  by the Bank or the Bank's  Inspector to be necessary (in
excess of the  proceeds  of the  Bonds)  to pay for  completion  of the  Project
Facility and all costs and expenses related thereto.

         Section 6.21.  Evidence of Payment of Costs.  The Borrower will furnish
to the Bank copies of all affidavits,  lien waivers,  releases or other evidence
requested  by the Bank from time to time to  establish  that all bills for labor
and materials performed or furnished in connection with the Project Facility and
all  bills  of the  General  Contractor  and  its  subcontractors  and  material
suppliers, have been paid in full, except for retainages.

         Section 6.22.  Entry;  Correction of Defective  Work. The Borrower will
allow the Bank, through the Bank's Inspector, and the Bank's officers, agents or
employees,  at all reasonable  times,  (a) the right of entry and free access to
the Land to inspect all work done,  labor  performed and materials  furnished in
furtherance  of the  Project  Facility  and (b) to  require  to be  replaced  or
otherwise  corrected any materials or work which fails to comply in any material
respect with the Plans and Specifications.

         Section 6.23.  Compliance  with General  Contract.  The Borrower  shall
comply in all material respects with its obligations under the General Contract.



                                       20

<PAGE>

         Section  6.24.  Title.  The Borrower will keep the title to the Project
Facility free and clear of all liens, encumbrances,  easements, restrictions and
claims, except for (a) the Permitted Encumbrances,  (b) any lien, restriction or
encumbrance created in connection with this Reimbursement Agreement or otherwise
approved by the Bank,  and (c) real  estate  taxes and  installments  of special
assessments, if any, which are a lien but not yet due and payable.

         Section 6.25.  Payment  Schedule of Bonds. The Borrower shall cause the
original principal amount of the Bonds to be repaid not later than the scheduled
payments described in Exhibit B attached hereto and made a part hereof.


                                  SECTION SEVEN

                                EVENTS OF DEFAULT

         Section 7.1.  Events of Default.  The occurrence and continuance of any
one or more of the following  events shall  constitute an Event of Default under
this Agreement:

         (a)      If any  representation  or warranty made herein by Borrower or
                  any  officer  thereof  or  in  any  other  written  statement,
                  certificate,  report,  or  financial  statement  at  any  time
                  furnished by or for Borrower in connection herewith, proves to
                  be incorrect in any material respect when made; or

         (b)      If Borrower  fails to perform or observe any other  provision,
                  covenant,   or  agreement   contained  in  this  Reimbursement
                  Agreement or, subject to any applicable grace periods,  in any
                  other of the Bank Documents or Financing  Documents,  and such
                  failure remains unremedied for thirty (30) calendar days after
                  the Bank shall have given written  notice thereof to Borrower,
                  or, if such  covenant,  condition  or  agreement is capable of
                  cure but cannot be cured  within  such thirty (30) day period,
                  the  failure of the  Borrower  to commence to cure within such
                  thirty (30) day period and thereafter  diligently proceed with
                  all action  required to complete  said cure within ninety (90)
                  days  of  such  written  notice  unless  such  time to cure is
                  otherwise extended by the Bank in writing ; or

         (c)      If, subject to any applicable grace period, Borrower (i) fails
                  to pay any Indebtedness for borrowed money exceeding  $100,000
                  individually or in the aggregate  (other than as arising under
                  this  Reimbursement  Agreement)  owing by  Borrower  when due,
                  whether at  maturity,  by  acceleration,  or otherwise or (ii)
                  fails to perform any term, covenant,  or agreement on its part
                  to be performed under any agreement or instrument  (other than
                  this Reimbursement Agreement) evidencing, securing or relating
                  to such  Indebtedness  when  required to be  performed,  or is
                  otherwise in default thereunder, if the effect of such failure
                  is  to  accelerate,   or  to  permit  the  holder(s)  of  such
                  Indebtedness  or the  trustee(s)  under any such  agreement or
                  instrument to accelerate, the maturity of such

                                       21

<PAGE>

                  Indebtedness,  unless waived by such  holder(s) or trustee(s);
                  or

         (d)      If  Borrower   discontinues   business   except  as  otherwise
                  permitted under this Reimbursement Agreement; or

         (e)      An Indenture  Default shall have occurred under the Indenture;
                  or

         (f)      Borrower  or the  Guarantor  fails to make or cause to be made
                  any payment to the Bank  required  to be made  pursuant to the
                  terms of the Bank Documents; or

         (g)      If Borrower or the  Guarantor  (i) is  adjudicated a debtor or
                  insolvent,  or  ceases,  is unable,  or admits in writing  its
                  inability,  to pay its  debts  as they  mature,  or  makes  an
                  assignment for the benefit of creditors,  (ii) applies for, or
                  consents to, the  appointment  of any  receiver,  trustee,  or
                  similar officer for it or for all or any  substantial  part of
                  its  property,  or any  such  receiver,  trustee,  or  similar
                  officer is appointed without the application or consent of the
                  Borrower,  or  the  Guarantor,  as  the  case  may  be,  (iii)
                  institutes,  or consents to the  institution  of, by petition,
                  application,  or  otherwise,  any  bankruptcy  reorganization,
                  arrangement,  readjustment of debt, dissolution,  liquidation,
                  or  similar  proceeding  relating  to it under the laws of any
                  jurisdiction,  (iv) has any such proceeding instituted against
                  it which remains thereafter  undismissed for a period of sixty
                  (60) days or (v) has any judgment, writ, warrant of attachment
                  or execution  or similar  process  issued or levied  against a
                  substantial  part  of  its  property  of the  Borrower  or the
                  Guarantor and such judgment,  writ, or similar  process is not
                  released,  vacated,  or fully  bonded  within  sixty (60) days
                  after its issue or levy.

         (h)      Final judgment or judgments for the payment of money in excess
                  in  the  aggregate  of  $100,000  shall  be  rendered  against
                  Borrower or the Guarantor and Borrower or the Guarantor  shall
                  not  discharge the same or cause it to be bonded or discharged
                  within  sixty (60) days from the entry  thereof,  or shall not
                  appeal  therefrom  or from the order,  decree or process  upon
                  which or pursuant to which said judgment was granted, based or
                  entered and secure a stay of execution pending such appeal.

         (i)      an  "event of  default"  occurs  under  the loan and  security
                  agreement  dated as of July 1, 1996  between the  Borrower and
                  National  Bank  of  Canada  (f/k/a   National  Canada  Finance
                  Corporation).

         Section 7.2. No Waiver;  Remedies. If an Event of Default occurs and is
continuing,  the Bank may exercise any and all remedies,  legal or equitable, to
collect  the  amounts  due from the  Borrower,  pursuant  to this  Reimbursement
Agreement,  and in its sole discretion,  may notify the Trustee that an Event of
Default  has  occurred  and may  instruct  the  Trustee to  redeem,  or call for
purchase,  the Bonds.  Upon receipt by the Trustee of such instructions from the
Bank,  the Bonds shall be redeemed or purchased  pursuant to the  Indenture.  No
failure on the part of

                                       22

<PAGE>

the Bank to exercise,  and no delay in  exercising,  any right  hereunder  shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
right hereunder  preclude any other or further  exercise thereof or the exercise
of any other right or remedy.  The remedies  herein  provided are cumulative and
not exclusive of any remedies provided by law or equity.


                                  SECTION EIGHT

             TRANSFER, REDUCTION OR TERMINATION OF LETTER OF CREDIT

         Section 8.1. Transfer of Letter of Credit;  Reduction or Termination of
Letter of Credit Commitment and Related Matters.

         (a)      The Letter of Credit may be transferred in accordance with the
                  provisions set forth therein.

         (b)      If the  Borrower  shall be  entitled  to a credit  against the
                  principal amount of the Bonds prior to maturity (the "Credit")
                  pursuant to an optional  redemption  of a portion of the Bonds
                  or  to  the   purchase   of  Bonds  in  the  open  market  and
                  cancellation  of such Bonds in accordance  with the provisions
                  of the  Indenture,  and such  amounts  have been paid by or on
                  behalf of the  Borrower  other than by the Bank,  the Borrower
                  shall  have  the  right  at  any  time  thereafter  to  reduce
                  permanently,  without penalty or premium, the Stated Amount in
                  the manner set forth below.  The Stated Amount will be reduced
                  by an amount equal to the sum of the  following  corresponding
                  reductions in the amounts  available  for Principal  Drawings,
                  Bond Purchase Drawings and Interest  Drawings:  (a) the amount
                  available for Principal  Drawings and Bond Purchase  Drawing -
                  Principal (as defined in the Letter of Credit) will be reduced
                  by an amount equal to the amount of such  Credit;  and (b) the
                  amount  available for Interest  Drawings will be reduced to an
                  amount  equal  to  the  Interest  Coverage  Requirement.   The
                  aforementioned  reduction  will  occur not less than three (3)
                  Business Days' after written  notice to the Bank,  accompanied
                  by the original  Letter of Credit and the written  certificate
                  of the Trustee  stating  that the Borrower is entitled to such
                  Credit and  designating the amount of such Credit and the date
                  upon which such credit shall become  effective (which shall be
                  a Business Day).

         (c)      If the Stated  Amount  shall be reduced  pursuant to paragraph
                  (b) hereof,  then the Bank shall have the right to require the
                  Trustee to surrender the  outstanding  Letter of Credit to the
                  Bank on the  effective  date of such  reduction  of the Stated
                  Amount and to accept on such  date,  in  substitution  for the
                  then outstanding  Letter of Credit,  a substitute  irrevocable
                  letter of credit,  dated such date, for an amount equal to the
                  amount to which the Stated  Amount  shall have been so reduced
                  (also  less the  amount  of any  drawings  upon the  Letter of
                  Credit  which have not been  reinstated  under  paragraph  (d)
                  hereof)  but  otherwise  having  terms  identical  to the then
                  outstanding Letter of Credit.



                                       23

<PAGE>

         (d)      The obligation of the Bank to honor Interest  Drawings,  under
                  the  Letter  of  Credit,  up to the  amount  of  the  Interest
                  Coverage Requirement,  (as same may have been reduced pursuant
                  to subsection (b) of this Section 8.1), will be  automatically
                  reinstated to the Interest Coverage Requirement unless, before
                  the  end of five  (5)  days  after  the  date  of an  Interest
                  Drawing,  the  Bank  shall  deliver  to the  Trustee  and  the
                  Borrower  a   certificate   stating   that  the  Bank  is  not
                  reinstating the amount paid pursuant to such Interest Drawing,
                  there  having  occurred  an Event of Default or an event which
                  with notice or lapse of time or both would constitute an Event
                  of Default.  Failure to deliver  such  certificate  within the
                  time  stated  shall be deemed to mean the  amounts  drawn have
                  been  reinstated in full, but shall not be deemed an admission
                  that the Bank has in fact  been  reimbursed  by the  Borrower.
                  Notwithstanding the Bank's delivery of a certificate providing
                  that the automatic  reinstatement  has not occurred,  the Bank
                  may  thereafter  present  a new  certificate  reinstating  the
                  amount  of  such  drawing  as a part of the  available  Stated
                  Amount.

         (e)      The Bank shall  reinstate  amounts  drawn  under the Letter of
                  Credit pursuant to a Bond Purchase Drawing upon receipt by the
                  Bank of money  (other  than draws  under the Letter of Credit)
                  then held by the Trustee and  designed to  reimburse  the Bank
                  for all or a portion of the amounts  drawn  pertaining to said
                  Bond  Purchase  Drawing for Bonds  tendered  for  purchase and
                  remarketed by the Remarketing Agent.

         The Letter of Credit shall terminate  automatically  on the earliest of
(i) the payment by the Bank to the Trustee of the final drawing  available to be
made  under the  Letter of  Credit;  (ii)  receipt  by the Bank of the Letter of
Credit and a  certificate  signed by an officer of the Trustee and an authorized
representative  of Borrower  stating  that no Bonds  remain  outstanding;  (iii)
receipt  by the Bank of the  Letter of  Credit  and a  certificate  signed by an
officer of the Trustee and an authorized representative of Borrower stating that
an Alternate  Credit Facility in substitution  for the Letter of Credit has been
accepted by the Trustee and is in effect;  or (iv) the Stated  Expiration  Date.
Notwithstanding  the  foregoing,  the Bank  may in  writing,  effective  on each
October 1, commencing  October 1, 2002 extend the Stated  Expiration Date of the
Letter of Credit for an additional one-year period; provided, however, that such
extension  shall be, in each instance,  made in the sole  discretion of the Bank
and the Bank may at any time,  upon  written  notice  delivered  to Borrower and
Trustee,  elect not to extend the Stated  Expiration Date. The Bank shall notify
Borrower and Trustee of its decision of whether the Stated Expiration Date shall
be extended no later than  forty-five (45) days prior to October 1 of each year,
provided  that the  failure of Bank to deliver  such  notice,  or to deliver any
notice,  shall not mean that Bank has  elected to extend  the Stated  Expiration
Date. If the Bank extends the Stated Expiration Date, it shall do so in the form
of an  amendment  to the Letter of Credit,  which it shall  promptly  deliver to
Trustee.


                                       24
<PAGE>


                                  SECTION NINE

                                  MISCELLANEOUS

         Section 9.1.  Liability of the Bank. Between the Borrower and the Bank,
the  Borrower  assumes all risks of the acts or omissions of the Trustee and any
transferee  of the  Letter of Credit  with  respect  to its use of the Letter of
Credit or its  proceeds.  Neither the Bank nor any of its  officers or directors
shall be liable or responsible  for: (a) the use which may be made of the Letter
of Credit or its  proceeds or for any acts or  omissions  of the Trustee and any
transferee in connection therewith; (b) the validity, sufficiency or genuineness
of documents,  inaccuracy of any of the statements or representations  contained
therein or of any endorsement(s)  thereon, even if such documents should in fact
prove to be in any or all respects invalid, insufficient,  fraudulent or forged;
(c) good faith payment by the Bank against  presentation  of documents  which do
not  strictly  comply  with the terms of the  Letter of  Credit,  including  any
failure of any  documents  to bear any  reference  or adequate  reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment  under the Letter of Credit,  except the  Borrower  shall have a
claim  against the Bank,  and the Bank shall be liable to the  Borrower,  to the
extent,  but only to the extent of any  direct,  as  opposed  to  consequential,
damages  suffered by the Borrower  which the Borrower  proves were caused by (i)
the Bank's willful  misconduct or gross negligence in honoring a draft under the
Letter of Credit,  or (ii) the Bank's willful failure to pay under the Letter of
Credit after presentation to it by the Trustee (or a successor trustee under the
Indenture to whom the Letter of Credit has been  transferred in accordance  with
its terms) of a sight draft and  certificate  strictly  complying with the terms
and conditions of the Letter of Credit.  In furtherance and not in limitation of
the foregoing,  the Bank may accept documents that appear on their face to be in
order, and may assume the genuineness and rightfulness of any signature thereon,
without  responsibility for further  investigation,  regardless of any notice or
information to the contrary unless actually received by the Bank; provided, that
if the Bank shall  receive  written  notification  from both the Trustee and the
Borrower  that  documents  conforming to the terms of the Letter of Credit to be
presented  to the Bank are not to be  honored,  the Bank agrees that it will not
honor such documents and the Borrower shall indemnify and hold the Bank harmless
from such failure to honor.

         Section 9.2  Indemnification.

         (a)      Borrower  hereby  agrees  to  indemnify  Bank  and  hold  Bank
                  harmless from and against any and all claims, damages, losses,
                  liabilities,  costs or expenses which may arise or be asserted
                  against  Bank  by  reason  of  the   execution,   delivery  or
                  performance  of this  Reimbursement  Agreement,  the Letter of
                  Credit,   the   Financing   Documents,   or  any   transaction
                  contemplated thereby, with the exception of any claim, damage,
                  loss, liability,  cost or expense arising solely out of Bank's
                  gross negligence of wilful misconduct.



                                       25

<PAGE>

         (b)      Borrower  hereby  agrees to indemnify  and hold Bank  harmless
                  against any and all claims, expenses,  demands, losses, costs,
                  fines or  liabilities  of whatever kind or nature  (including,
                  without  limitation,  arising from personal injury or property
                  damage) in any way related to any environmental  condition on,
                  above,  within,  in the vicinity of, related to or affected by
                  the  Project  Facility,  with  the  exception  of  any  claim,
                  expense,  demand, loss, cost, fine or liability arising solely
                  out of  Bank's  gross  negligence  or wilful  misconduct.  The
                  provisions  of this Section 9.2 shall survive  termination  of
                  this  Reimbursement  Agreement  and shall apply to any and all
                  such  claims,  expenses,  demands,  losses,  costs,  fines  or
                  liabilities  of whatever kind or nature,  notwithstanding  the
                  discharge of the Mortgage, the Collateral Mortgage, and/or the
                  Security Agreement and the payment of the indebtedness secured
                  thereby.

         (c)      Borrower  hereby  agrees to indemnify  and hold Bank  harmless
                  against any and all claims, expenses,  demands, losses, costs,
                  fines or  liabilities  of  whatever  kind of nature in any way
                  related to the  occurrence of a  Determination  of Taxability,
                  with the exception of any claim, expense,  demand, loss, cost,
                  fine  or  liability   arising   solely  out  of  Bank's  gross
                  negligence or wilful misconduct.

         Section  9.3.  Right to Set-Off.  Upon the  occurrence  of any Event of
Default hereunder the Bank is hereby irrevocably authorized at any time and from
time to time without  notice to the  Borrower,  any such notice being  expressly
waived  by the  Borrower,  to  set-off  and  appropriate  and  apply any and all
deposits  (general or special,  time or demand,  provisional  or final),  in any
currency,  any other credits,  indebtedness or claims, in any currency,  in each
case whether  direct or indirect or contingent  or matured or unmatured,  at any
time  held or owing  by the  Bank to or for the  credit  or the  account  of the
Borrower, or any part thereof in such amounts as the Bank may elect, against and
on account of the  obligations and liabilities of the Borrower to Bank hereunder
and claims of every nature and  description  of the Bank  against the  Borrower,
whether arising  hereunder or otherwise,  as the Bank may elect,  whether or not
the  Bank has made  any  demand  for  payment  and  although  such  obligations,
liabilities and claims may be contingent or unmatured. The Bank agrees to notify
the Borrower  promptly of any such set-off and the application made by the Bank,
provided  that the failure to give such notice  shall not affect the validity of
such set-off and  application.  The rights of the Bank under this subsection are
in addition to other rights and remedies (including,  without limitation,  other
rights of set-off) which the Bank may have.

         Section 9.4.  Additional  Collateral.  As additional  security for this
Reimbursement  Agreement,  the  Borrower  agrees that in the event that  Trustee
shall,  after the  occurrence  of a continuing  Event of Default  hereunder  and
acceleration  of the  Indebtedness  evidenced  hereby,  draw upon the  Letter of
Credit to pay all Bonds, the Bank shall be and become the assignee of all rights
and  interests of the Issuer and the Trustee,  all as provided more fully in the
Indenture.  The Borrower does hereby consent to such Assignment,  and does agree
to  execute  any  and  all  such  documents,  instruments  and  certificates  in
connection therewith as the Bank shall deem appropriate.

         Section 9.5.  Optional  Redemption.  If the Borrower elects to exercise
its option to direct  redemption  of the Bonds by a prepayment,  Borrower  shall
give Bank ten (10) days' prior written notice of such intent. Prior to notifying
the Trustee of its election to redeem the Bonds, the

                                       26

<PAGE>

Borrower shall deliver  moneys (in good and collected  funds) in an amount equal
to the amount  necessary to effect the redemption to the Bank and the Bank shall
then  inform the Trustee  that those  moneys are on deposit and that the Trustee
may draw on the Letter of Credit to effect that redemption of the Bonds.

         Section 9.6. Pledge of Bonds.  Bonds which are not remarketed  shall be
held by the Trustee,  as agent for the Bank, as security for the  obligations of
the Borrower under this Agreement Pledge.  The Borrower hereby grants the Bank a
lien on such Bonds while they are so held by the Trustee.

         Section  9.7.  Notices.  All  notices,  requests,  consents  and  other
communications  hereunder  shall be in writing  and shall be deemed to have been
made when delivered,  or mailed first-class  postage prepaid, or receipt by fax,
independently confirmed by other than the Sender's machine,

         (a)      if to the Bank, at:

                  (i)      66 South Pearl Street
                           Albany, New York  12207
                           Attention: International Division, 
                                      Letter of Credit Department
                           Fax Number: (518) 487-4998

                  (ii)     KeyBank National Association
                           66 South Pearl Street
                           Albany, New York  12207
                           Attention:  Corporate Banking Division; 
                                       Attention: Richard Van Auken
                           Fax Number:  (518) 487-4285

                  with a copy to:

                  Crane, Kelley, Greene & Parente
                  90 State Street, Suite 1515
                  Albany, New York  12207
                  Attention:  Kevin J. Kelley, Esq.

or at such other  address  as may have been  furnished  for such  purpose to the
Borrower by the Bank in writing; or

         (b)      if to the Borrower, at:.

                  Spurlock Adhesives, Inc.
                  5090 General Mahone Highway
                  Waverly, Virginia  23890
                  Attention: Chief Financial Officer

                                       27

<PAGE>

                  with a copy to:

                  William L. Pitman, Esq.
                  Williams Mullen Christian & Dobbins, P.C.
                  1021 East Cary Street
                  Richmond, Virginia  23219

or at such other address as may have been furnished for such purpose to the Bank
by the Borrower in writing.

         Section  9.8.   Survival  of   Representations   and  Warranties.   All
agreements, representations and warranties contained in the Bank Documents shall
survive  the  execution  and  delivery  of  this  Reimbursement  Agreement,  any
investigation  at any time made by or on behalf of the Bank and the issuance and
acceptance of the Letter of Credit. All statements contained in any certificates
or other  instruments  delivered by or on behalf of the Borrower pursuant hereto
shall  constitute  representations  and  warranties  by the Borrower  under this
Reimbursement Agreement.

         Section  9.9.  Payments on  Holidays.  Whenever  any payment to be made
pursuant to this  Reimbursement  Agreement shall be stated to be due on a public
holiday in the State of New York,  Saturday or Sunday,  such payment may be made
on the next  succeeding  business  day and such  extension of time shall in such
case be included in computing interest, if any, in connection with such payment.

         Section 9.10.  Computation of Interest.  All  computations  of interest
hereunder  shall be made on the basis of a three  hundred  sixty  (360) day year
consisting of twelve (12) thirty (30) day months.

         Section 9.11.  Entire  Agreement.  The Bank Documents and the Letter of
Credit embody the entire  agreement and  understanding  between the Bank and the
Borrower and supersede all prior agreements and  understandings  relating to the
subject matter hereof.

         Section 9.12. Parties in Interest. All the terms and provisions of this
Reimbursement Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto.

         Section  9.13.  Participations.  The Bank  reserves  the  right to sell
participations in its obligations  evidenced by the Letter of Credit,  provided,
however, that Borrower shall continue to deal solely with Bank in such event, it
being understood and agreed that Borrower shall have no  responsibility  to such
participants.

         Section 9.14. Expenses.  Borrower agrees,  regardless of whether or not
the Bonds are  eventually  issued and sold and  regardless of whether or not the
transactions contemplated hereby

                                       28

<PAGE>

shall  be  consummated,  to pay all  reasonable  expenses  incurred  by the Bank
incident to such  transactions  in the  preparation  of  documentation  relating
thereto,  including all fees and  disbursement  of the counsel to the Bank,  for
services to the Bank.  Borrower further agrees to pay all like expenses incurred
by the  Bank in  connection  with  any  amendments  of or  waivers  or  consents
requested  by  Borrower  under  or with  respect  to the Bank  Documents  or the
enforcement  from time to time by the Bank of its rights  under and  pursuant to
the Bank Documents.

         Section  9.15.  Counterparts.   This  Reimbursement  Agreement  may  be
executed  in any  number of  counterparts,  all of which  taken  together  shall
constitute one and the same instrument and any of the parties hereto may execute
this Reimbursement Agreement by signing any such counterpart.

         Section 9.16.  Governing  Law. This  Reimbursement  Agreement  shall be
governed  exclusively by and construed in accordance with the applicable laws of
the State of New York.

         IN WITNESS  WHEREOF,  the  undersigned  have caused this  Reimbursement
Agreement to be executed as of the date first above written.

                                            SPURLOCK ADHESIVES, INC.


                                            By: /s/ Phillip S. Sumpter
                                                --------------------------------
                                                Phillip S. Sumpter,
                                                Executive Vice President

                                            KEYBANK NATIONAL ASSOCIATION


                                            By: /s/ Richard Van Auken
                                                --------------------------------
                                                Richard Van Auken,
                                                Senior Banker

01294\reimburs.3



                                       29

<PAGE>

                                   EXHIBIT A


                          KEYBANK NATIONAL ASSOCIATION
                             INTERNATIONAL DIVISION
                           LETTER OF CREDIT DEPARTMENT
                              66 SOUTH PEARL STREET
                             ALBANY, NEW YORK 12207

                      IRREVOCABLE TRANSFERRABLE DIRECT PAY
                         LETTER OF CREDIT NO. NSL792132
                                October 10, 1997

Star Bank, N.A.,
    as Trustee under the Trust Indenture
    with the County of Saratoga Industrial
    Development Agency, dated as of
    October 1, 1997
425 Walnut Street, ML 5125
Cincinnati, Ohio 45202-1118

Attention:  Corporate Trust Services

Ladies and Gentlemen:

         At the  request  and  on the  instructions  of our  customer,  Spurlock
Adhesives,  Inc.  ("Applicant"),  as account party, KeyBank National Association
(hereinafter  "we" or "our") hereby  establishes this Irrevocable  Transferrable
Direct  Pay  Letter  of  Credit   ("Letter  of  Credit")  in  your  favor,   not
individually,  but  solely as  Trustee  (hereinafter  "you" or  "your")  for the
benefit  of the  holders of County of  Saratoga  Industrial  Development  Agency
Multi-Mode   Variable  Rate  Industrial   Development  Revenue  Bonds  (Spurlock
Adhesives,  Inc.  Project),  Series  1997A  (the  "Bonds")  issued  by County of
Saratoga Industrial Development Agency ("Issuer") pursuant to a Trust Indenture,
dated as of October 1, 1997,  by and between the Issuer and Star Bank,  N.A., as
Trustee  ("Trustee")  (the  "Indenture").  All  capitalized  terms  used but not
defined herein shall have the meanings set forth in the Indenture.

         We hereby  irrevocably  authorize you to draw on us in accordance  with
the terms and conditions  hereinafter  set forth, by one or more sight drafts in
the form of Exhibit 1 attached hereto  ("Draft(s)"),  in an aggregate amount not
exceeding $6,180,822,  as reduced and reinstated from time to time in accordance
with the provisions hereof (the "Stated  Amount"),  of which an aggregate amount
not  exceeding  (i)  $6,000,000  may be drawn  with  respect  to (a) the  unpaid
principal amount of Bonds Outstanding, whether at maturity, acceleration or upon
redemption  ("Principal  Drawing")  or (b) that  portion of the  Purchase  Price
corresponding  to principal  of Bonds  Outstanding  tendered and not  remarketed
pursuant to the  Indenture  ("Bond  Purchase  Drawing -  Principal");  plus (ii)
$180,822.00  (computed  on the  basis of up to one  hundred  ten  (110)  days of
accrued interest on Bonds Outstanding at an assumed maximum interest rate of ten


<PAGE>

percent  (10%) per annum,  calculated on the basis of a 365 or 366 day year) may
be drawn with  respect to (a) the  payment of up to one  hundred  ten (110) days
accrued interest on Bonds Outstanding  ("Interest  Drawing") or (b) that portion
of the Purchase Price  corresponding to interest on Bonds  Outstanding  tendered
and  not  remarketed  pursuant  to  the  Indenture  ("Bond  Purchase  Drawing  -
Interest),  ("Bond  Purchase  Drawing - Principal" and "Bond Purchase  Drawing -
Interest" shall be, collectively, "Bond Purchase Drawing").

         Each  drawing  honored by us shall  reduce  that  portion of the Stated
Amount available under this Letter of Credit, subject only to reinstatement with
respect to drawings as hereinafter provided.

         The  Stated  Amount  with  respect  to an  Interest  Drawing  shall  be
automatically and irrevocably reinstated,  effective as of the close of business
of the fifth (5th) day after such Interest Drawing,  by the amount of a Draft so
drawn,  so long as you have not  received  from us,  on or  before  the close of
business  on the fifth (5th) day after the date of the  presentation  to us of a
Draft, written notice to the effect that an Event of Default under the Letter of
Credit Reimbursement  Agreement,  dated as of October 1, 1997, between Applicant
and us  ("Reimbursement  Agreement"),  has occurred,  and that the Stated Amount
with respect to an Interest Drawing is not being reinstated.

         Upon receipt by us or our agent of Bonds pledged in connection with any
Bond Purchase Drawing pursuant to the Pledge and Security Agreement,  the Stated
Amount shall be automatically  and irrevocably  reinstated by the amount of such
Bond Purchase Drawing.

         The Stated Amount shall be decreased, and not reinstated,  from time to
time upon payment under this Letter of Credit for the redemption of the Bonds as
provided  in the  Indenture  by (i) with  respect to  principal,  the  aggregate
principal  amount of the Bonds so  redeemed,  and (ii) with respect to interest,
the amount that bears the same proportion to $180,822.00 as the amount specified
in the immediately preceding clause (i) bears to $6,000,000.

         Each Draft for each  drawing  under this  Letter of Credit must bear on
its face the clause "Drawn under KeyBank National  Association  Letter of Credit
No.  NSL792132," be dated the Business Day of presentation and be accompanied by
(i) if the  drawing  being made is a "Bond  Purchase  Drawing"  pursuant  to the
Indenture,  your  completed  and  signed  certificate  in the form of  Exhibit 2
attached  hereto,  dated  the  date of the  accompanying  Draft;  or (ii) if the
drawing  being made is a  "Principal  Drawing" or an  "Interest  Drawing,"  your
completed and signed certificate in the form of Exhibit 3 attached hereto, dated
the  date  of  the  accompanying  Draft.   Presentation  of  Draft(s)  and  such
certificates  shall be made at our office specified above or at any other office
as may be  designated by us by written  notice  delivered to you via delivery in
person,  registered mail,  certified mail return receipt  requested or facsimile
transmission (518) 487-4998 with a cover letter expressly stating that originals
of the  facsimile  transmission  will  be  delivered  by  nationally  recognized
overnight  courier.  If you draw on this  Letter  of Credit at or prior to 11:00
a.m., New York time, on a Business Day, and provided that such drawing

                                        2

<PAGE>

conforms  to the  terms  and  conditions  hereof,  we shall  pay you the  amount
specified,   on  the  next  Business  Day,  in  accordance   with  your  payment
instructions  provided,  however, if a drawing is presented prior to 11:00 am to
pay the  Purchase  Price of Bonds which have not been  remarketed,  and provided
that such drawing conforms to the terms and conditions  hereof, we shall pay you
the amount  specified,  on such  Business  Day.  For  purposes of this Letter of
Credit,  a Business Day shall mean any day of the year other than (i) a Saturday
of a Sunday,  or (ii) any day on which banks located in the State of New York or
in the cities in which your  principal  corporate  trust office or our office at
which  demands for payment  under this Letter of Credit are to be presented  are
required or authorized by law to remain closed, or (ii) any day on which the New
York Stock Exchange is closed.

         This Letter of Credit shall  automatically  terminate at our  aforesaid
address on the close of  business on the first to occur of the  following  dates
("Termination  Date"):  (i) the Stated  Expiration  Date or (ii) the date of the
receipt by us of the Letter of Credit and a  certificate  signed by the  Trustee
and Applicant that none of the Bonds are Outstanding under the Indenture and the
Indenture has been discharged in accordance with its terms, or (iii) the date of
receipt by us of the Letter of Credit and a certificate  signed by an officer of
the  Trustee and an  authorized  representative  of  Applicant  stating  that an
Alternate  Credit  Facility  in  substitution  for the Letter of Credit has been
accepted by the  Trustee  and is in effect,  or (iv) the date on which the final
drawing  available  under  this  Letter of Credit is  honored  by us. The Stated
Expiration  Date  shall be October  17,  2002 and may be  extended  by us in our
discretion  at any time or from  time to time,  by  amendment  in  writing  with
written  notice of such  amendment  to you (with  copies to the  Applicant,  the
Issuer  and the  Remarketing  Agent)  no less than 45 days  prior to the  Stated
Expiration Date, specifying a new Stated Expiration Date.

         If a drawing by you hereunder does not, in any instance, conform to the
terms and  conditions  of this  Letter of Credit,  we shall  give you  immediate
notice that the purported  drawing was not effected in accordance with the terms
and conditions of this Letter of Credit,  stating the reasons  therefor and that
we are holding the  documents at your disposal or are returning the same to you,
as we may elect. Upon being notified that the purported drawing was not effected
in  accordance  with this Letter of Credit,  you may attempt to correct any such
nonconforming  drawing if, and to the extent  that,  you are  entitled  (without
regard to the provisions of this sentence) and able to do so.

         All payments by us hereunder will be with our own funds.

         This Letter of Credit sets forth in full the terms of our  undertaking,
and such  undertaking  shall not in any way be modified,  amended,  amplified or
limited by reference to any document, instrument or agreement referred to herein
or in which this  Letter of Credit is  referred  to or to which  this  Letter of
Credit relates,  except for the certificates  referred to herein (Exhibits 2 and
3) and,  for the purpose of certain  definitions,  the  Indenture,  and any such
reference shall not be deemed to incorporate herein by reference,  any document,
instrument or agreement except for such certificates and definitions.


                                        3

<PAGE>

         This Letter of Credit is transferable in its entirety (but not in part)
to any  transferee  within the United  States who has  succeeded  you as Trustee
under the  Indenture.  Transfer  of the amount  available  under this  Letter of
Credit to such  Transferee  shall be effected by the  presentation to us of this
Letter of Credit  accompanied by a certificate in the form of Exhibit 4 attached
hereto, and unless this Letter of Credit is so presented to us, we shall have no
obligation  hereunder  to any  Transferee.  Upon such  transfer,  we will either
reissue this Letter of Credit in the maximum amount then available  hereunder or
otherwise  amend  this  Letter of Credit to reflect  such  maximum  amount  then
available.

         Only you (or a  transferee  as permitted by the terms of this Letter of
Credit) may make a drawing under this Letter of Credit.

         This  Letter of Credit is  issued  under and shall be  governed  by the
express terms of the Uniform Customs and Practice for Documentary  Credits (1993
Rev.) International  Chamber of Commerce  Publication No. 500, as may be amended
from time to time, and, to the extent not  inconsistent  therewith,  the Uniform
Commercial Code as in effect (together with all revisions and amendments) in the
State of New York.

         Communications  and notices with respect to this Letter of Credit shall
be in  writing  and  shall be  addressed  to us at our  office  specified  above
specifically  referring to the letter of credit number of this Letter of Credit,
and shall be addressed to you at your address specified above.

         We hereby  agree with the drawer  that each  Draft  drawn  under and in
compliance  with the  terms of this  Letter of Credit  will be duly  honored  on
delivery of documents as specified  herein if presented at our office  indicated
above on or before the Termination Date.

                                       Very truly yours,

                                       KEYBANK NATIONAL ASSOCIATION


                                       By: 
                                          --------------------------------------
                                       Title: Senior Banker


                                       By: 
                                          --------------------------------------
                                       Title: Vice President

01294\lettcred

                                        4

<PAGE>



                                    EXHIBIT 1

                                   SIGHT DRAFT


U.S. $                                                      City:_______________
                                                           State:_______________
                                                            Date:_______________

For Value Received

Pay at sight
to______________________________________________________________________________
________________________________________________________________________________
U.S. Dollars.

         Drawn  under  KeyBank  National  Association,   Letter  of  Credit  No.
NSL792132, dated October 10, 1997.

             To:  KeyBank National Association
                  66 South Pearl Street
                  Albany, New York 12207
                  Attention: International Division, Letter of Credit Department
                  Facsimile: (518) 487-4998

         The signature below constitutes an endorsement of this Sight Draft.

                                Star Bank, N.A.,
                                as Trustee


                                By:___________________________________
                                       Authorized Trust Officer




<PAGE>



                                    EXHIBIT 2

           CERTIFICATE FOR PURCHASE OF BONDS OUTSTANDING TENDERED FOR
         PURCHASE PURSUANT TO THE TRUST INDENTURE OF COUNTY OF SARATOGA
             INDUSTRIAL DEVELOPMENT AGENCY MULTI-MODE VARIABLE RATE
         INDUSTRIAL DEVELOPMENT REVENUE BONDS (SPURLOCK ADHESIVES, INC.
          PROJECT), SERIES 1997A UNDER LETTER OF CREDIT NO. NSL792132.

         Any  capitalized  term used,  but not  defined  herein,  shall have its
respective meaning as set forth in the Letter of Credit referred to above.

         The undersigned,  a duly authorized trust officer of _________________,
as Trustee  under the  Indenture  (the  "Trustee")  hereby  certifies to KeyBank
National  Association,  as issuer of the Letter of Credit referred to above (the
"Bank"), that:

         (1)    The Trustee is the Trustee  under the  Indenture for the holders
of the Bonds.

         (2)    The  Trustee  is making a drawing  under the Letter of Credit in
the amount of (i) $ __________ with respect to payment of the principal  portion
of, and (ii) $_________ with respect to payment of the interest  portion of, the
Purchase Price of Bonds tendered but not  remarketed,  or for which  remarketing
proceeds have not been received, pursuant to the Indenture.

         (3)    The amount of the Draft  accompanying this Certificate* does not
exceed the Stated  Amount in respect of  principal  or  interest as set forth in
this Certificate.

         (4)    The  amount  of the  Draft  accompanying  this  Certificate  was
computed  in  accordance  with the  terms  and  conditions  of the Bonds and the
Indenture.

         (5)    The Letter of Credit referred to above has not expired  pursuant
to its terms.

         IN WITNESS  WHEREOF,  the  Trustee  has  executed  and  delivered  this
Certificate,  dated the date of the accompanying  Draft, to wit, the ____ day of
_________, 19__.

                                          [NAME OF TRUSTEE]


                                          By:________________________________
                                                 [Name and Title]

         * Trustee  shall send a copy of each  certificate  to  Applicant at the
address specified in the Reimbursement Agreement.


<PAGE>



                                    EXHIBIT 3

CERTIFICATE  FOR  PAYMENT  OF  PRINCIPAL  OR  INTEREST  ON  COUNTY  OF  SARATOGA
INDUSTRIAL  DEVELOPMENT AGENCY MULTI-MODE  VARIABLE RATE INDUSTRIAL  DEVELOPMENT
REVENUE BONDS (SPURLOCK ADHESIVES,  INC. PROJECT),  SERIES 1997A UNDER LETTER OF
CREDIT NO. NSL792132.

         Any  capitalized  term used,  but not  defined  herein,  shall have its
respective meaning as set forth in the letter of Credit referred to above.

         The  undersigned,  a duly authorized trust officer of the Trustee under
the Indenture (the "Trustee"), hereby certifies to KeyBank National Association,
as issuer of the Letter of Credit referred to above (the "Bank"), that:

         (1)    The Trustee is the Trustee  under the  Indenture for the holders
of the Bonds.

         (2)    [Complete the applicable  Section(s)  below and strike or delete
the inapplicable Sections]

         A.     Periodic Interest Drawing. The amount of the Interest Drawing is
$________,  which  equals the amount of  interest  on the Bonds which is due and
payable with Letter of Credit proceeds on the same date as the date of the Draft
accompanying this Certificate.

         B.     Default Interest Drawing.  An Event of Default as defined in the
Indenture has occurred, and the amount of the Interest Drawing of $_________, is
the  maximum  amount  permitted  under the Letter of Credit  for the  payment of
interest  on  Bonds  Outstanding  on the  same  date as the  date  of the  Draft
accompanying this Certificate.

         C.     Periodic Principal Drawing.  The amount of the Principal Drawing
is  $__________,  which equals the amount of principal of the Bonds which is due
and  payable  on the  same  date as the  date  of the  Draft  accompanying  this
Certificate.

         D.     Default Principal Drawing. An Event of Default as defined in the
Indenture has occurred,  and the amount of Principal  Drawing of $_________,  is
the amount of the principal of the Bonds, which is due and unpaid as of the date
of the Draft accompanying this Certificate.

         (3)    The amount of the Draft  accompanying this Certificate* does not
exceed the Stated  Amount with respect to the drawings of principal or interest,
as set forth in this Certificate.

         (4)    The  amount  of the  Draft  accompanying  this  Certificate  was
computed  in  accordance  with the  terms  and  conditions  of the Bonds and the
Indenture.

         (5)    The Letter of Credit referred to above has not expired  pursuant
to its terms.



<PAGE>

         IN WITNESS  WHEREOF,  the  Trustee  has  executed  and  delivered  this
Certificate,  dated the date of the accompanying  Draft, to wit, the ____ day of
_________, 19__.

                                       [NAME OF TRUSTEE]


                                       By:_________________________________
                                                [Name and Title]

* Trustee  shall send a copy of each  certificate  to  Applicant  at the address
specified in the Reimbursement Agreement.




<PAGE>

                                    EXHIBIT 4

                              TRANSFER CERTIFICATE

                                                           Date:________________

KEYBANK NATIONAL ASSOCIATION
66 South Pearl Street
Albany, New York 12207

Attention:   International Division, Letter of Credit Department

       Re:   Irrevocable Transferrable Direct Pay Letter of Credit No. NSL792132

Ladies and Gentlemen:

         For value received,  the  undersigned  beneficiary  hereby  irrevocably
transfers to the following "Transferee":

                              (Name of Transferee)
                                   [Address:]

all rights of the  undersigned  beneficiary  to draw  under the above  Letter of
Credit in its entirety.  The Transferee has succeeded the undersigned as Trustee
under the Indenture (as defined in the Letter of Credit).

         By this  transfer,  all rights of the  undersigned  beneficiary  in the
Letter of Credit are transferred to the Transferee and the Transferee shall have
the sole rights as beneficiary  thereof,  including sole rights  relating to any
amendments of the Letter of Credit,  whether increases in the amount to be drawn
thereunder,  or  extensions  of the Stated  Expiration  Date  thereof,  or other
amendments,  and whether  such  amendments  now exist or are made after the date
hereof.  All  amendments  are to be  advised  direct to the  Transferee  without
necessity of any consent of or notice to the undersigned beneficiary.

         The  undersigned  hereby  certifies  that  the  Transferee  has  become
successor Trustee under the Trust Indenture dated as of October 1, 1997, between
the undersigned and the County of Saratoga  Industrial  Development  Agency (the
"Issuer"),   relating  to  the  Issuer's  Multi-Mode  Variable  Rate  Industrial
Development Revenue Bonds (Spurlock Adhesives,  Inc. Project), Series 1997A (the
"Bonds") and has accepted such appointment in writing.

         The  original  of the  Letter  of Credit is  returned  herewith  and in
accordance  therewith  we ask you to endorse the within  transfer on the reverse
thereof, and forward it directly to the Transferee with your customary notice or
issue a replacement letter of credit to the Transferee as provided therein.

                                          Very truly yours,


<PAGE>

                                          ____________________________________
                                          SIGNATURE AUTHENTICATED, as
                                          Trustee

We certify that we have  succeeded as Trustee under the Indenture (as defined in
the Letter of Credit).


Name:
(Bank)
Title:
(Authorized Officer)


01294\lettcred.2


<PAGE>

                                   EXHIBIT B

                         Spurlock Adhesives, Inc. IDRB
                        Principal Amortization Schedule
          Payments Due on the "Interest Payment Date" of Each Quarter
                             =====================
                             Debt Service Schedule
                             =====================


     Date     Principal    Coupon   Interest     Period Total  Fiscal Total
     ----     ---------    ------   --------     ------------  ------------
   1/ 1/98                            
   4/ 1/98
   7/ 1/98    150,000.00                         150,000.00
  10/ 1/98    150,000.00                         150,000.00
   1/ 1/99    150,000.00                         150,000.00
   
   4/ 1/99    150,000.00                         150,000.00    600,000.00
   7/ 1/99    150,000.00                         150,000.00
  10/ 1/99    150,000.00                         150,000.00
   1/ 1/ 0    150,000.00                         150,000.00
   4/ 1/ 0    150,000.00                         150,000.00    600,000.00
   
   7/ 1/ 0    150,000.00                         150,000.00
  10/ 1/ 0    150,000.00                         150,000.00
   1/ 1/ 1    150,000.00                         150,000.00
   4/ 1/ 1    150,000.00                         150,000.00    600,000.00
   7/ 1/ 1    150,000.00                         150,000.00
   
  10/ 1/ 1    150,000.00                         150,000.00
   1/ 1/ 2    150,000.00                         150,000.00
   4/ 1/ 2    150,000.00                         150,000.00    600,000.00
   7/ 1/ 2    150,000.00                         150,000.00
  10/ 1/ 2    150,000.00                         150,000.00
   
   1/ 1/ 3    150,000.00                         150,000.00
   4/ 1/ 3    150,000.00                         150,000.00    600,000.00
   7/ 1/ 3    150,000.00                         150,000.00
  10/ 1/ 3    150,000.00                         150,000.00
   1/ 1/ 4    150,000.00                         150,000.00
   
   4/ 1/ 4    150,000.00                         150,000.00    600,000.00
   7/ 1/ 4    150,000.00                         150,000.00
  10/ 1/ 4    150,000.00                         150,000.00
   1/ 1/ 5    150,000.00                         150,000.00
   4/ 1/ 5    150,000.00                         150,000.00    600,000.00
   
   7/ 1/ 5    150,000.00                         150,000.00
  10/ 1/ 5    150,000.00                         150,000.00
   1/ 1/ 6    150,000.00                         150,000.00
   4/ 1/ 6    150,000.00                         150,000.00    600,000.00
   7/ 1/ 6    150,000.00                         150,000.00
   
  10/ 1/ 6    150,000.00                         150,000.00
   1/ 1/ 7    150,000.00                         150,000.00
   4/ 1/ 7    150,000.00                         150,000.00    600,000.00
   7/ 1/ 7    150,000.00                         150,000.00
  10/ 1/ 7    150,000.00                         150,000.00
   
   1/ 1/ 8    150,000.00                         150,000.00
   4/ 1/ 8    150,000.00                         150,000.00    600,000.00
            ------------             --------  ------------
            6,000,000.00                       6,000,000.00
   ACCRUED
            6,000,000.00                       6,000,000.00
            ============             ========  ============