Exhibit 10.40

CLOSING ITEM NO.:  A-13










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                COUNTY OF SARATOGA INDUSTRIAL DEVELOPMENT AGENCY


                                       AND


                            SPURLOCK ADHESIVES, INC.




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                        PAYMENT IN LIEU OF TAX AGREEMENT

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                           DATED AS OF OCTOBER 1, 1997





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                        PAYMENT IN LIEU OF TAX AGREEMENT


         THIS  PAYMENT  IN LIEU OF TAX  AGREEMENT  dated as of  OCTOBER  1, 1997
("Agreement")  by and  between  the COUNTY OF  SARATOGA  INDUSTRIAL  DEVELOPMENT
AGENCY, a public benefit  corporation of the State of New York having its office
at the Saratoga County Municipal Center,  40 McMaster Street,  Ballston Spa, New
York 12020 (the "Issuer"), and SPURLOCK ADHESIVES, INC., a corporation having an
address of 5090 General Mahone Highway, Waverly, Virginia 23890 (the "Company");

                              W I T N E S S E T H:

         WHEREAS,  the New York State Industrial  Development  Agency Act, being
Title I of  Article  18-A of the  General  Municipal  Law,  Chapter  24,  of the
Consolidated  Laws of the State of New York,  as amended (the  "Enabling  Act"),
authorizes and provides for the creation of industrial  development agencies for
the benefit of the several counties,  cities, villages and towns in the State of
New York and empowers such agencies, among other things, to acquire,  construct,
reconstruct,  lease,  improve,  maintain,  equip  and  dispose  of land  and any
buildings  or  other  improvements,   and  all  real  and  personal  properties,
including,  but not limited to,  machinery  and  equipment  deemed  necessary in
connection  therewith,  whether or not now in existence  or under  construction,
which shall be suitable  for,  among other things,  manufacturing,  warehousing,
research,  commercial  or  industrial  purposes,  in  order to  advance  the job
opportunities,  health, general prosperity and economic welfare of the people of
the State of New York and to improve their recreation opportunities,  prosperity
and standard of living; and

         WHEREAS,  the Enabling Act further authorizes each such agency to lease
or sell any or all of its  facilities  and to issue its bonds for the purpose of
carrying out any of its  corporate  purposes and, as security for the payment of
the principal and redemption price of, and interest on, any such bonds so issued
and any agreements made in connection  therewith,  to mortgage and pledge any or
all of its facilities whether then owned or thereafter  acquired,  and to pledge
the revenues  and receipts  from the lease or sale thereof to secure the payment
of such bonds and interest thereon; and

         WHEREAS,  the Issuer was created pursuant to and in accordance with the
provisions  of the  Enabling Act by Chapter 855 of the Laws of 1971 of the State
of New York,  as amended  (said  chapter and the Enabling Act being  hereinafter
collectively  referred  to as the  "Act"),  and is  empowered  under  the Act to
undertake  the Project (as  hereinafter  defined) in order to so advance the job
opportunities,  health, general prosperity and economic welfare of the people of
the State of New York and improve their standard of living; and

         WHEREAS,  the Issuer, by resolution  adopted on September 16, 1997 (the
"Resolution"),  resolved  to issue  its  Industrial  Development  Revenue  Bonds
(Spurlock  Adhesives,  Inc. Project),  Series 1997 A in the aggregate  principal
amount not to exceed  $6,000,000 (the "Bonds") in connection with a project (the
"Project")  undertaken by the Issuer  consisting of (A) (1) the acquisition of a
certain parcel of land comprising  approximately 16.37 acres constituting Lot #3
located in the Moreau  Industrial Park in the Town of Moreau,  Saratoga  County,
New York as more  particularly  described  on Exhibit "A"  attached  hereto (the
"Land"),  (2) the  construction  on the Land of two (2) buildings  approximately
10,000  square  feet  each in size and one (1)  approximately  800  square  foot
building for use in the manufacturing of synthetic organic chemicals and related
functions (collectively the "Facility") and (3) the acquisition and installation
therein of certain  machinery and equipment (the  "Equipment"  and together with
the Land and the Facility,  the "Project Facility"),  and (B) the financing of a
portion of the costs of the foregoing; and

         WHEREAS,  the Issuer  will sell the  Project  Facility  to the  Company
pursuant to the terms of an installment  sale  agreement  dated as of October 1,
1997 (as amended from time to time,  the  "Installment  Sale  Agreement") by and
between the Issuer and the Company; and


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         WHEREAS,  the  Bonds  will  be  issued  and  sold  pursuant  to a trust
indenture  dated as of  October 1, 1997 (the  "Indenture")  by and  between  the
Issuer and Star Bank, N.A., as trustee (the "Trustee"); and

         WHEREAS,  under the present  provisions of the Act and Section 412-a of
the Real  Property  Tax Law of the State of New York  (the  "Real  Property  Tax
Law"),  the Issuer is not required to pay taxes or  assessments  upon any of the
property  acquired by it or under its  jurisdiction,  supervision  or control or
upon its activities; and

         WHEREAS,  pursuant to the  provision of Section 6.6 of the  Installment
Sale  Agreement,  the Company has agreed to make payments in lieu of real estate
taxes with  respect to the  Project  Facility  in the  amounts and in the manner
hereinafter set forth;

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

DEFINITION OF TERMS.  All words and terms used herein and not otherwise  defined
herein  shall  have  the  meanings  assigned  to such  words  and  terms  in the
Installment Sale Agreement.



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                                    ARTICLE I

                         REPRESENTATIONS AND WARRANTIES


SECTION 1.01.  REPRESENTATIONS AND WARRANTIES OF COMPANY. The Company represents
and warrants that:

         (A)      Power:  The  Company  is a company  duly  formed  and  validly
existing  under the laws of the State of  Virginia,  is  authorized  to  conduct
business in the State of New York and has power and authority to enter into this
Agreement and to carry out its obligations hereunder.

         (B)      Authorization:  Neither  the  execution  and  delivery of this
Agreement,  the  consummation  by the Company of the  transactions  contemplated
hereby nor the  fulfillment  by the Company of or compliance by the Company with
the provisions of this Agreement will conflict with or result in a breach of any
of the terms,  conditions  or  provisions  of the Articles of  Incorporation  or
by-laws of the  Company or, in any  material  respect,  of any order,  judgment,
agreement,  or  instrument  to which  the  Company  is a party or by which it is
bound, or will constitute a default under any of the foregoing.

         (C)      Governmental  Consent:  To the  knowledge  of the  Company  no
consent, approval or authorization of, or filing,  registration or qualification
with,  any  governmental  or public  authority  on the part of the  Company  not
already obtained is required as a condition precedent to the execution, delivery
or performance  of this Agreement by the Company or as a condition  precedent to
the consummation by the Company of the transactions contemplated hereby.

SECTION  1.02.   REPRESENTATIONS  AND  WARRANTIES  OF  THE  ISSUER.  The  Issuer
represents and warrants that:

         (A)      Power: The Issuer is duly established  under the provisions of
the Act and has the  power to enter  into  this  Agreement  and to carry out its
obligations  hereunder.  By proper  official  action,  the  Issuer has been duly
authorized to execute, deliver and perform this Agreement.

         (B)      Authorization:  Neither  the  execution  and  delivery of this
Agreement,  the  consummation  of the  transactions  contemplated  hereby by the
Issuer nor the  fulfillment  by the Issuer or  compliance by the Issuer with the
provisions  of this  Agreement  will  conflict with or result in a breach by the
Issuer of any of the terms,  conditions or provisions of the Act, the by-laws of
the Issuer,  or any order,  judgment,  restriction,  agreement or  instrument to
which  the  Issuer  is a party or by which it is  bound,  or will  constitute  a
default by the Issuer under any of the foregoing.

         (C)      Governmental  Consent:  To the knowledge of Issuer no consent,
approval or authorization of, or filing, registration or qualification with, any
governmental  or public  authority  on the part of the Issuer is  required  as a
condition precedent to the execution,  delivery or performance of this Agreement
by the Issuer or as a condition  precedent to the  consummation by the Issuer of
the transactions contemplated hereby.



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                                   ARTICLE II

                            COVENANTS AND AGREEMENTS


SECTION 2.01.     TAX-EXEMPT STATUS OF PROJECT FACILITY.

         (A)      Assessment of Facility: Pursuant to Section 874 of the Act and
Section 412-a of the Real Property Tax Law, the parties hereto acknowledge that,
upon  acquisition  of the  Project  Facility  by the  Issuer,  and  for so  long
thereafter as the Issuer shall own the Project  Facility,  the Project  Facility
shall be assessed by the various taxing  entities having  jurisdiction  over the
Project  Facility,  including,  without  limitation,  any county,  city,  school
district,  town,  village or other  political  unit or units wherein the Project
Facility  is  located  (such  taxing  entities  being   sometimes   collectively
hereinafter  referred  to as the  "Taxing  Entities",  and  each of such  Taxing
Entities  being  sometimes  individually  hereinafter  referred  to as a "Taxing
Entity") as exempt upon the assessment  rolls of the respective  Taxing Entities
prepared  subsequent  to the  acquisition  by the Issuer of title to the Project
Facility.  The Company shall  promptly,  following  acquisition by the Issuer of
title to the Project Facility,  cooperate to ensure that the Project Facility is
assessed as exempt upon the assessment  rolls of the respective  Taxing Entities
prepared  subsequent  to  such  acquisition  by the  Issuer,  and  for  so  long
thereafter as the Issuer shall own the Project Facility,  the Company shall take
such further action as may be necessary to maintain such exempt  assessment with
respect to each Taxing  Entity.  The Issuer will  cooperate with the Company and
will take all action as may be necessary  (subject to the  provisions of Section
3.01  hereof) to preserve  the tax exempt  status of the Project  Facility.  The
parties hereto  acknowledge  that the Project  Facility shall not be entitled to
such exempt status on the tax rolls of any Taxing Entity until the first March 1
to occur following the Issuer's acquisition of the Project Facility with respect
to town, county and school taxes.  Pursuant to the provisions of the Installment
Sale Agreement,  the Company will be required to pay to the  appropriate  Taxing
Entity  all  taxes  and  assessments  lawfully  levied  and/or  assessed  by the
appropriate  Taxing Entity  against the Project  Facility,  including  taxes and
assessments  levied for the current tax year and all  subsequent tax years until
the Project  Facility shall be entitled to exempt status on the tax rolls of the
appropriate Taxing Entity.

         (B)      Special  Assessments:  The parties hereto  understand that the
tax exemption extended to the Issuer by Section 874 of the Act and Section 412-a
of the Real  Property  Tax Law does not  entitle  the Issuer to  exemption  from
special  assessments and special ad valorem levies.  Pursuant to the Installment
Sale Agreement,  the Company will be required to pay to the  appropriate  Taxing
Entity all special  assessments  and special ad valorem levies  lawfully  levied
and/or assessed by the appropriate Taxing Entity against the Project Facility.

SECTION 2.02.  PAYMENTS IN LIEU OF TAXES.

         (A)      Agreement to Make  Payments:  The Company  agrees that it will
make annual payments in lieu of real estate taxes with respect to the Project to
the  Issuer  in the  amounts  hereinafter  provided  for  redistribution  to the
respective  Taxing  Entities  in  proportion  to the  amounts  which said Taxing
Entities  would have  received had not the Project  Facility  been  acquired and
owned by the Issuer.

         (B)      Amount of Payments in Lieu of Taxes:

                  (1)      Town and County Taxes: (a) Commencing on February 15,
1999 and  continuing on February 15 of each year  thereafter up to and including
February 15, 2008, payments in lieu of real estate taxes shall be due, owing and
payable by the  Company  to the Issuer on account of town and county  taxes with
respect  to each  appropriate  Taxing  Entity  equal to the  product  of (i) the
Initial  Assessed Land Value (as herein  defined) and (ii) the tax rate or rates
of each such Taxing Entity  applicable  to the Project  Facility for the current
tax year of such Taxing  Entity.  For  purposes of this Section  2.02,  the term
"Initial  Assessed Land Value" shall mean the greater of 



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(i) the Assessed Value of the Land determined in accordance with Section 2.02(3)
hereof and (ii) the  product of the  purchase  price paid by the Company for the
Land and the applicable Equalization Rate.

                  (b)      Commencing  February 15, 2009 and  continuing on each
         February 15  thereafter  for such time as this  Agreement is in effect,
         payments in lieu of real estate  taxes shall be due,  owing and payable
         by the  Company to the Issuer on account of town and county  taxes with
         respect to each appropriate Taxing Entity in an amount to be determined
         by  multiplying  (i)  the  Assessed  Value  of  the  Project   Facility
         determined  pursuant to Section 3 of this  Section 2.02 by (ii) the tax
         rate or rates of such Taxing Entity  applicable to the Project Facility
         for the current tax year of such Taxing Entity

                  (2)      School Taxes:  (a) Commencing  September 15, 1998 and
continuing on September 15 of each year up to and including  September 15, 2007,
payments  in lieu of real estate  taxes  shall be due,  owing and payable by the
Company to the Issuer on account of school taxes equal to the product of (i) the
Initial  Assessed  Land Value and (ii) the tax rate or rates of the Hudson Falls
Central School District  applicable to the Project  Facility for the current tax
year.

                  (b)      Commencing September 15, 2008 and continuing for such
         time as this  Agreement  is in effect,  payments in lieu of real estate
         taxes  shall be due,  owing and payable by the Company to the Issuer on
         account of school taxes in an amount to be  determined  by  multiplying
         (i) the Assessed Value of the Project Facility  determined  pursuant to
         Section  3 of this  Section  2.02 by (ii)  the tax rate or rates of the
         Hudson Falls Central School District applicable to the Project Facility
         for the current tax year of the Hudson Falls Central School District.

                  (3)      (a) For purposes of this  Section 2.02 the  "Assessed
Value" of the Land or the Project Facility,  as applicable,  shall be determined
by the  appropriate  officer or officers of the Taxing  Entity  responsible  for
assessing  properties  in each Taxing  Entity  (said  officer or officers  being
hereinafter collectively referred to as the "Assessor").  The Assessor shall (a)
appraise the Land or the Project  Facility,  as  applicable,  (excluding,  where
permitted  by law,  personal  property)  in the same  manner  as  other  similar
properties in said Taxing Entity and (b) place a value for  assessment  purposes
upon the Land or the Project Facility, as applicable,  equalized if necessary by
using the appropriate  equalization rates as apply in the assessment and levy of
real property taxes.

                  (b)      If the  Company  is  dissatisfied  with the amount of
         Assessed Value as initially  established or as changed, the Company may
         pursue  review of the  Assessed  Value under  Article 7 of the New York
         State  Real  Property  Tax Law or any  other law or  ordinance  then in
         effect relating to disputes over assessed valuation of real property in
         the State of New York, and may take any and all other action  available
         to it at law or in equity,  for a period of two (2) years from the date
         such Assessed Value is initially established or changed. IF THE COMPANY
         FAILS TO PURSUE REVIEW OF (I) THE INITIALLY ESTABLISHED ASSESSED VALUE,
         DURING THE SEVEN (7) YEAR PERIOD FOLLOWING SUCH ESTABLISHMENT,  OR (II)
         ANY CHANGE IN ASSESSED VALUE,  DURING THE TWO (2) YEAR PERIOD FOLLOWING
         ANY SUCH CHANGE,  THE COMPANY  SHALL BE DEEMED TO HAVE WAIVED ANY RIGHT
         TO CONTEST OR DISPUTE SUCH  ASSESSED  VALUE AT ANY TIME FOR A SEVEN (7)
         YEAR PERIOD COMMENCING IN 2008 NOTWITHSTANDING ANYTHING IN THE NEW YORK
         STATE  REAL  PROPERTY  TAX LAW TO THE  CONTRARY.  THIS  SEVEN  (7) YEAR
         LIMITATION  SHALL  APPLY TO EACH AND EVERY  CHANGE IN  ASSESSMENT  MADE
         DURING THE PERIOD THAT THE ISSUER HOLDS TITLE TO THE PROJECT  FACILITY,
         AND  SHALL  BE FOR THE  BENEFIT  OF THE  ISSUER  AND THE  OTHER  TAXING
         ENTITIES.  The Issuer  hereby  irrevocably  appoints  the  Company  its
         attorney-in-fact  and agent  (coupled with an interest) for the purpose
         of commencing  any  proceeding,  preparing and filing all documents and
         taking  any and all  other  actions  required  to be taken  by  Issuer,
         necessary or  desirable,  in the opinion of the Company,  to contest or
         dispute any Assessed  Value within such two (2) year period;  provided,
         however,  that the  Issuer  shall  incur no  expense  or  liability  in
         connection  with  any  action  taken  or  omitted  to be  taken  by its


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         attorney-in-fact  and agent.  The Issuer agrees to promptly  furnish to
         the Company  any  communication  which the Issuer may receive  from any
         Taxing Entity relating to the Project Facility.

                  (4)      Additional  Amounts in Lieu of Taxes:  Commencing  on
each of the first  February 15 and September 15 of the first tax year  following
the date on which any structural  addition shall be made to the Project Facility
or any portion  thereof or any additional  building or other  structure shall be
constructed on the Land (such structural  additions and additional buildings and
other structures being hereinafter referred to as "Additional Facilities"),  the
Company  agrees to make  additional  annual  payments in lieu of property  taxes
(such  additional  payments  being  hereinafter   collectively  referred  to  as
"Additional Payments") to the Issuer with respect to such Additional Facilities,
such  Additional  Payments to be computed  separately  for each Taxing Entity as
follows:

                  (1)      Determine  the  amount of general  taxes and  general
         assessments  (hereinafter  referred to as the "Normal Tax") which would
         be payable to each Taxing  Entity if such  Additional  Facilities  were
         owned  by the  Company  and  not  the  Issuer  by  multiplying  (a) the
         additional  Assessed  Value of such  Additional  Facilities  determined
         pursuant to subsection (B)(3) of this Section 2.02, by (b) the tax rate
         or  rates of such  Taxing  Entity  that  would  be  applicable  to such
         Additional  Facilities if such Additional  Facilities were owned by the
         Company and not the Issuer,  and (c) reduce the amount so determined by
         the amounts of any tax exemptions that would be afforded to the Company
         by such Taxing Entity if such  Additional  Facilities were owned by the
         Company and not the Issuer.

                  (2)      In  each  calendar  year  during  the  term  of  this
         Agreement  (commencing  in  the  calendar  year  when  such  Additional
         Facilities  first appear on the assessment  roll of any Taxing Entity),
         the  amount  payable  by the  Company  to the  Issuer on behalf of each
         Taxing Entity as a payment in lieu of property tax with respect to such
         Additional  Facilities  pursuant to this  Agreement  shall be an amount
         equal to one hundred  percent  (100%) of the Normal Tax due each Taxing
         Entity with respect to such  Additional  Facilities  for such  calendar
         year  (unless  the Issuer and the  Company  shall enter into a separate
         written  agreement  regarding  payments in lieu of property  taxes with
         respect to such Additional Facilities,  in which case the provisions of
         such separate written agreement shall control).

SECTION 2.03.  INTEREST.  If the Company shall fail to make any payment required
by this  Agreement  when due, its  obligation  to make the payment so in default
shall  continue as an  obligation  of the Company  until such payment in default
shall have been made in full,  and the Company  shall pay the same together with
late fees and  interest  thereon  equal to the  greater of (A) any late fees and
interest  which would be applicable  with respect to each Taxing Entity were the
Project  Facility  owned by the Company and not the Issuer and (B) the late fees
and  interest  prescribed  by  subsection  (5) of  Section  874  of the  General
Municipal Law of the State of New York (or any successor statute thereto).



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                                   ARTICLE III

                        LIMITED OBLIGATION OF THE ISSUER


SECTION 3.01.  NO RECOURSE; LIMITED OBLIGATION OF THE ISSUER.

         (A)      No Recourse: All covenants, stipulations, promises, agreements
and obligations of the Issuer  contained in this Agreement shall be deemed to be
the covenants, stipulations,  promises, agreements and obligations of the Issuer
and not of any member,  officer, agent, servant or employee of the Issuer in his
individual capacity, and no recourse under or upon any obligation,  covenants or
agreement contained in this Agreement,  or otherwise based upon or in respect of
this Agreement,  or for any claim based thereon or otherwise in respect thereof,
shall be had against any past, present or future member,  officer,  agent (other
than the Company),  servant or employee, as such, of the Issuer or any successor
public benefit corporation or political subdivision or any person executing this
Agreement on behalf of the Issuer,  either directly or through the Issuer or any
successor public benefit  corporation or political  subdivision or any person so
executing this Agreement, it being expressly understood that this Agreement is a
corporate obligation,  and that no such personal liability whatever shall attach
to, or is or shall be incurred by, any such member,  officer,  agent (other than
the  Company),  servant or  employee  of the Issuer or of any  successor  public
benefit  corporation  or political  subdivision  or any person so executing this
Agreement  under  or by  reason  of the  obligations,  covenants  or  agreements
contained  in this  Agreement  or implied  therefrom;  and that any and all such
personal  liability  of, and any and all such rights and claims  against,  every
such member, officer, agent (other than the Company),  servant or employee under
or by reason of the  obligations,  covenants  or  agreements  contained  in this
Agreement or implied  therefrom are, to the extent  permitted by law,  expressly
waived and released as a condition of, and as a consideration for, the execution
of this Agreement.

         (B)      Limited  Obligation:  The  obligations  and  agreements of the
Issuer  contained  herein shall not  constitute or give rise to an obligation of
the State of New York or the County of Saratoga, New York, and neither the State
of New York nor the County of Saratoga,  New York shall be liable  thereon,  and
further such  obligations and agreements  shall not constitute or give rise to a
general   obligation  of  the  Issuer,   but  rather  shall  constitute  limited
obligations of the Issuer payable solely from the revenues of the Issuer derived
and to be  derived  from the lease,  sale or other  disposition  of the  Project
Facility  (except  for  revenues  derived  by the  Issuer  with  respect  to the
Unassigned Rights.

         (C)      Further  Limitation:  Notwithstanding  any  provision  of this
Agreement to the contrary,  the Issuer shall not be obligated to take any action
pursuant to any provision hereof unless (1) the Issuer shall have been requested
to do so in writing by the Company,  and (2) if compliance  with such request is
reasonably  expected  to result in the  incurrence  by the Issuer (or any of its
members,  officers,  agents,  servants or  employees)  of any  liability,  fees,
expenses  or other  costs,  the Issuer  shall  have  received  from the  Company
security or indemnity  and an  agreement  from the Company  satisfactory  to the
Issuer to defend  and hold  harmless  the  Issuer  against  all such  liability,
however remote,  and for the reimbursement of all such fees,  expenses and other
costs.


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                                   ARTICLE IV

                                EVENTS OF DEFAULT


SECTION  4.01.  EVENTS  OF  DEFAULT.  Any one or more  of the  following  events
(hereinafter  an "Event of  Default")  shall  constitute  a default  under  this
Agreement:

         (A)      Failure of the Company to pay any amount due and payable by it
pursuant  to this  Agreement  and  continuance  of said  failure for a period of
fifteen (15) days after written notice to the Company  stating that such payment
is due and payable;

         (B)      Failure  of the  Company  to  observe  and  perform  any other
covenant,  condition or agreement on its part to be observed and performed by it
hereunder  (other than as referred to in paragraph (A) above) and continuance of
such  failure  for a period of  thirty  (30) days  after  written  notice to the
Company  specifying  the  nature  of  such  failure  and  requesting  that it be
remedied;  provided that if such default cannot  reasonably be cured within such
thirty (30) day period,  and the Company shall have commenced action to cure the
breach of such  covenant,  condition  or  agreement  within said thirty (30) day
period and thereafter  diligently and  expeditiously  proceeds to cure the same,
such thirty (30) day period shall be extended for a period not to exceed  ninety
(90) days from the date of receipt by the Company of such notice; or

         (C)      Any  warranty or  representation  by the Company  contained in
this  Agreement  shall  prove to have been false or  incorrect  in any  material
respect on the date when made or on the  effective  date of this  Agreement  and
such falsity or  incorrectness  has a material  adverse  affect on the Company's
ability to perform its obligations under this Agreement.

SECTION  4.02.  REMEDIES ON DEFAULT.  Whenever  any Event of Default  shall have
occurred and be continuing with respect to this  Agreement,  the Issuer may take
whatever  action at law or in equity as may appear  necessary  or  desirable  to
collect the amount then in default or to enforce the  performance and observance
of the obligations, agreements and covenants of the Company under this Agreement
including,  without  limitation,  the  exercise  by the Issuer of the remedy set
forth in subsections  (A)(3) and (A)(4) of Section 10.2 of the Installment  Sale
Agreement.  Each such  Event of Default  shall give rise to a separate  cause of
action  hereunder and separate  suits may be brought  hereunder as each cause of
action arises.  The Company  irrevocably  agrees that any suit,  action or other
legal  proceeding  arising out of this Agreement may be brought in the courts of
the State of New York,  consents to the  jurisdiction  of each such court in any
such suit,  action or proceeding,  and waives any objection which it may have to
the laying of the venue of any such suit,  action or  proceeding  in any of such
courts.

SECTION 4.03.  PAYMENT OF ATTORNEY'S  FEES AND EXPENSES.  If an Event of Default
should occur and be continuing under this Agreement and the Issuer should employ
attorneys or incur other  reasonable  expenses for the collection of any amounts
due and payable hereunder or for the enforcement of performance or observance of
any  obligation or agreement on the part of the Company  herein  contained,  the
Company  agrees that it will,  on demand  therefor by the Issuer,  reimburse the
Issuer for the  reasonable  fees and  disbursements  of such  attorneys and such
other reasonable expenses so incurred, whether or not an action is commenced.

SECTION 4.04.  REMEDIES; WAIVER AND NOTICE.

         (A)      No Remedy Exclusive:  Notwithstanding anything to the contrary
contained  herein,  no remedy herein conferred upon or reserved to the Issuer or
the  Company  is  intended  to be  exclusive  of any other  available  remedy or
remedies,  but each and every such remedy  shall be  cumulative  and shall be in
addition to every other  remedy  given under this  Agreement or now or hereafter
existing at law or in equity or by statute.


                                       8
<PAGE>

         (B)      Delay:  No delay or omission in exercising  any right or power
accruing upon the occurrence of an Event of Default  hereunder  shall impair any
such right or power or shall be construed to be a waiver  thereof,  but any such
right or power may be exercised  from time to time and as often as may be deemed
expedient.

         (C)      Notice  Not  Required:  In  order to  entitle  the  Issuer  to
exercise any remedy reserved to it in this Agreement,  it shall not be necessary
to give any notice,  other than such notice as may be expressly required in this
Agreement.

         (D)      No  Waiver:  In the  event  any  provision  contained  in this
Agreement  should be  breached  by any party and  thereafter  duly waived by the
other party so empowered to act, such waiver shall be limited to the  particular
breach  so waived  and  shall  not be deemed to be a waiver of any other  breach
hereunder. No waiver, amendment, release or modification of this Agreement shall
be established by conduct, custom or course of dealing.



                                       9
<PAGE>


                                    ARTICLE V

                                  MISCELLANEOUS


SECTION 5.01.  TERM OF AGREEMENT.

         (A)      General:   This  Agreement  shall  become  effective  and  the
obligations   of  the  Company  and  the  Issuer  shall  arise   absolutely  and
unconditionally upon the execution and delivery of this Agreement by the Company
and the Issuer.  This  Agreement  shall  continue to remain in effect  until the
termination of the Installment Sale Agreement in accordance with its terms.

         (B)      Extended  Term:  In the event  that (1)  title to the  Project
Facility shall be conveyed to the Company,  (2) on the date on which the Company
obtains title to the Project Facility, the Project Facility shall be assessed as
exempt upon the assessment roll of any one or more of the Taxing Entities solely
as a result of the Issuer's prior ownership of the Project Facility, and (3) the
fact of obtaining title shall not  immediately  obligate the Company to make pro
rata tax  payments  pursuant to  legislation  similar to Chapter 635 of the 1978
Laws of New York  (codified as  subsection 3 of Section 302 of the Real Property
Tax Law and Section 520 of the Real  Property  Tax Law),  this  Agreement  shall
remain  in full  force  and  effect  but only to the  extent  set  forth in this
sentence and the Company  shall be  obligated to make  payments to the Issuer in
amounts  equal to the  Normal  Tax which  would be due from the  Company  if the
Project  Facility  were owned by the Company and not the Issuer  until the first
tax year in which the  Company  shall  appear  on the tax  rolls of the  various
Taxing Entities having jurisdiction over the Project Facility as the legal owner
of record of the Project Facility.

SECTION 5.02.  FORM OF PAYMENTS.  The amounts payable under this Agreement shall
be payable in such coin and  currency of the United  States of America as at the
time of  payment  shall be legal  tender for the  payment of public and  private
debts.

SECTION 5.03.  COMPANY  ACTS.  Where the Company is required to do or accomplish
any act or  thing  hereunder,  the  Company  may  cause  the  same to be done or
accomplished  with the same force and effect as if done or  accomplished  by the
Company.

SECTION  5.04.  AMENDMENT  OF  AGREEMENT.  This  Agreement  may not be  amended,
changed,  modified,  altered,  supplemented or terminated unless such amendment,
change, modification,  alteration or termination is in writing and unless signed
by the party against which enforcement of the amendment,  change,  modification,
alteration,  supplement  or  termination  shall be sought and,  if any  Mortgage
remains outstanding, the Security Representative.

SECTION  5.05.  NOTICES.  All  notices,  certificates  or  other  communications
hereunder  shall be in  writing  and  shall be  sufficiently  given and shall be
deemed given when (A) sent to the applicable  address stated below by registered
or certified  mail,  return receipt  requested,  or by such other means as shall
provide the sender with documentary  evidence of such delivery  (including,  but
not limited to, overnight delivery) or (B) delivery is refused by the addressee,
as  evidenced  by the  affidavit  of the Person  who  attempted  to effect  such
delivery.  The address to which notices,  certificates and other  communications
hereunder shall be delivered are as follows:


                                       10
<PAGE>

         (A)      TO THE ISSUER:

                  County of Saratoga Industrial Development Agency
                  Saratoga County Municipal Center
                  40 McMaster Street
                  Ballston Spa, New York  12020
                  Attention:  Chairman

                  WITH A COPY TO:

                  Snyder, Kiley, Toohey & Corbett
                  160 West Avenue
                  P.O. Box 4367
                  Saratoga Springs, New York  12866
                  Attention: Michael Toohey, Esq.


         (B)      TO THE COMPANY:

                  Spurlock Adhesives, Inc.
                  5090 General Mahone Highway
                  Waverly, Virginia  23890
                  Attention:  Phillip S. Sumpter, Executive Vice President

                  WITH A COPY TO:

                  Williams Mullen Christian & Dobbins, P.C.
                  1021 East Cary Street
                  Richmond, Virginia  23219
                  Attention:  David L. Dallas, Jr., Esq.


provided, that the Issuer and the Company may, by notice given hereunder to each
of the others,  designate any further or different addresses to which subsequent
notices, certificates or other communications to them shall be sent.

SECTION 5.06. BINDING EFFECT.  This Agreement shall inure to the benefit of, and
shall be binding upon, the Issuer,  the Company and their respective  successors
and assigns.

SECTION 5.07. SEVERABILITY.  If any article,  section,  subdivision,  paragraph,
sentence,  clause, phrase,  provision or portion of this Agreement shall for any
reason be held or  adjudged  to be invalid or  illegal or  unenforceable  by any
court of competent jurisdiction, such article, section, subdivision,  paragraph,
sentence,  clause, phrase,  provision or portion so adjudged invalid, illegal or
unenforceable  shall  be  deemed  separate,  distinct  and  independent  and the
remainder  of this  Agreement  shall be and  remain in full force and effect and
shall not be  invalidated  or rendered  illegal or  unenforceable  or  otherwise
affected by such holding or adjudication.

SECTION 5.08.  APPLICABLE LAW. This Agreement shall be governed by and construed
in  accordance  with the laws of the State of New York  including all matters of
construction, validity and performance.

SECTION  5.09.  ASSIGNMENT.  This  Agreement  may not be assigned by the Company
absent the prior written consent of the Issuer.


                                       11
<PAGE>



         IN WITNESS  WHEREOF,  the  Issuer  and the  Company  have  caused  this
Agreement  to be executed  in their  respective  names,  all being done the date
first above written.

                                       COUNTY OF SARATOGA INDUSTRIAL
                                       DEVELOPMENT AGENCY


                                       By: /s/ Floyd H. Rourke
                                           -------------------------------------
                                           Floyd H. Rourke, Chairman



                                       SPURLOCK ADHESIVES, INC.


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







<PAGE>






                                   EXHIBIT "A"

                        DESCRIPTION OF THE REAL PROPERTY





         THAT TRACT OR PARCEL OF LAND, situate in the Town of Moreau,  County of
Saratoga and State of New York more fully  described as Lot Number 3 as shown on
subdivision maps of Moreau  Industrial Park prepared by The Saratoga  Associates
and filed in the  Saratoga  County  Clerk's  Office on March 18,  1992 in drawer
#M-348 A-Z and AA-DD;  and as  modified  by revised  subdivision  maps of Moreau
Industrial  Park prepared by The Saratoga  Associates  and filed in the Saratoga
County  Clerk's  Office on  February  16, 1994 in drawer  #M-398,  A-S and being
further bounded and described as follows:

         BEGINNING  at a point  marked with a capped iron rod found at the point
of  intersection  of the easterly  line of Farnan Road with the common  division
line of Lot No. 4 to the  north and Lot No. 3 to the south as shown on said map;
thence  from  said  point of  beginning  along  said  common  division  line the
following five (5) courses and distances:

     1)  North 90 deg. 00 min. 00 sec. East,  347.86 feet to a point marked with
         a capped iron rod found;
     2)  South 00 deg. 00 min. 00 sec. West, 32.63 feet to a point marked with a
         capped iron rod found;
     3)  North 90 deg. 00 min. 00 sec. East,  191.52 feet to a point marked with
         a capped iron rod found;
     4)  North 00 deg. 00 min. 00 sec. East, 32.63 feet to a point marked with a
         capped iron rod found;
     5)  North  90 deg.  00 min.  00 sec.  East,  680.17  feet to the  point  of
intersection  of the westerly line of Lot No. 5 with the common division line of
Lot No. 4 to the north  and Lot No. 3 to the south as shown on said map;  thence
along said westerly line,  South 16 deg. 10 min. 56 sec. West,  102.04 feet to a
point in the  northwesterly  line of lands of The  State of New York as shown on
said map,  said point also being at the 145 foot  elevation;  thence  along said
northwesterly  and the  westerly  line of lands  of The  State of New York as it
winds and turns along the 145 foot  elevation in a southerly  direction  712 +/-
feet to the point of intersection of said westerly line of lands of The State of
New York with the common  division  line of Lot No. 3 to the north and Lot No. 2
to the south as shown on said map, the last course having a tie-line of South 33
deg. 02 min. 30 sec. West,  699.47 feet; thence along said common division line,
South 90 deg. 00 min. 00 sec. West,  865.65 feet to a point marked with a capped
iron rod found at the point of  intersection of the easterly line of Farnan Road
with the  common  division  line of Lot No. 3 to the  north and Lot No. 2 to the
south as shown on said map;  thence  along  said  easterly  line in a  northerly
direction the following four (4) courses and distances:

     1)  North  00  deg.  00 min.  00  sec.  West,  116.35  feet  to a point  of
         curvature;
     2)  Along a curve to the right an arc  length of 464.05  feet to a point of
         tangency, said curve having a radius of 2,773.32 feet and a delta angle
         of 09 deg. 35 min. 13 sec.;
     3)  North 09 deg. 35 min. 13 sec. East, 50.00 feet to a point of curvature;
     4)  Along a curve to the left an arc  length of 57.49  feet to the point or
place of  beginning,  said curve  having a radius of  2,294.42  feet and a delta
angle of 01 deg. 26 min. 08 sec., said parcel containing 16.37 +/- acres of land
and being Lot No. 3 as shown on said map.