Exhibit 10.39


CLOSING ITEM NO.:  A-12







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                            SPURLOCK ADHESIVES, INC.

                                       and

                          KEYBANK NATIONAL ASSOCIATION


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

                          PLEDGE AND SECURITY AGREEMENT

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                           DATED AS OF OCTOBER 1, 1997










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<PAGE>

                          PLEDGE AND SECURITY AGREEMENT


         This  PLEDGE AND  SECURITY  AGREEMENT  (the  "Agreement"),  dated as of
OCTOBER 1, 1997, by and between SPURLOCK ADHESIVES, INC.. a Virginia corporation
having an address at 5090 General Mahone Highway,  Waverly,  Virginia 23890 (the
"Company"),  and KEYBANK NATIONAL  ASSOCIATION,  a national banking  association
organized  and  existing and  existing  under the laws of the United  States and
having an office at 66 South Pearl  Street,  Albany,  New York  12207-1501  (the
"Bank"):

         WHEREAS,  the County of  Saratoga  Industrial  Development  Agency (the
"Issuer")  has  agreed  with the  Company  to  issue  its  $6,000,000  aggregate
principal amount Multi-Mode  Variable Rate Industrial  Development Revenue Bonds
(Spurlock Adhesives, Inc. Project), Series 1997 A (the "Bonds"), under a certain
trust  indenture  dated as of October  1, 1997 (the  "Indenture"),  between  the
Issuer and Star Bank, N.A., as trustee (the "Trustee"); and

         WHEREAS,  the Bank has agreed to issue its  irrevocable,  transferable,
direct-pay  letter of credit (the "Letter of Credit") pursuant to the terms of a
certain letter of credit  reimbursement  agreement  dated as of October 1, 1997,
between the Company and the Bank (together with any other subsequent  credit and
reimbursement  agreements  by and between the Company and the Bank  collectively
the "Reimbursement Agreement"); and

         WHEREAS,  in connection with the issuance of the Bonds, the Company has
agreed to enter into the Reimbursement  Agreement in order to induce the Bank to
issue the Letter of Credit  thereunder which may be used, inter alia, to pay the
purchase price of Bonds which are not successfully  remarketed in the event that
a Bondholder (as defined in the Indenture) exercises a demand purchase option or
in the event that such Bonds are subject to mandatory tender; and

         WHEREAS,  it is a condition  precedent to the obligation of the Bank to
issue  its  Letter of Credit  that the  Company  shall  have  entered  into this
Agreement with the Bank;

         NOW, THEREFORE, in consideration of the premises and in order to induce
the Bank to issue the Letter of Credit pursuant to the  Reimbursement  Agreement
and for  other  good and  valuable  consideration,  receipt  of which is  hereby
acknowledged, the parties hereto agree as follows:

SECTION 1. Defined Terms. Unless otherwise defined herein,  terms defined in the
Reimbursement Agreement shall have such defined meanings when used herein.

SECTION 2. Pledge. The Company hereby pledges, assigns, hypothecates, transfers,
and delivers to the Bank all of its right, title and interest to all Bonds which
may from time to time be delivered by the Trustee to the Bank in connection with
a drawing  by the  Trustee  under the  Letters  of  Credit  for a Bond  Purchase
Drawing-Principal  or a Bond Purchase  Drawing-Interest  (both as defined in the
Letter of Credit) to purchase Bonds which have not been successfully  remarketed
by the Remarketing Agent (the "Purchased Bonds"),  and hereby grants to the Bank
a first lien on, and security interest in, all right,  title and interest in and
to the Purchased Bonds and all proceeds thereof,  as collateral security for the
complete  payment when due of all amounts due to the Bank from the Company under
the  Reimbursement  Agreement  and interest on such amounts as set forth therein
and all  obligations  due and  owing the Bank  under any of the other  Financing
Documents (collectively, the "Obligations").


<PAGE>

SECTION 3.  Registration of Bonds.

         (A)     Upon  delivery  thereof to the Bank,  Purchased  Bonds shall be
registered in the name of the Company and shall be duly endorsed for transfer by
the  Company  in  blank,  or the  Company  shall  have  delivered  to  the  Bank
appropriate  instruments of transfer duly executed in blank by the Company.  The
Bank may, but shall not be obligated to, register Purchased Bonds in its name or
that of its agent at any time and from time to time.

         (B)     If, while this Agreement is in effect, the Company shall become
entitled to receive or shall receive any payment, including, without limitation,
any payment of principal,  premium, interest or proceeds of sale with respect to
the Purchased  Bonds,  such payment shall be subject to this Agreement,  and the
Company  hereby  irrevocably  directs  the  Trustee  to make any  such  payments
directly to the Bank and,  in the event any such  payments  are  received by the
Company,  the Company  agrees to accept the same as the Bank's agent and to hold
the same in trust on behalf of the Bank and to deliver the same forthwith to the
Bank.  All sums of money so paid with respect to the  Purchased  Bonds which are
received by the Company and paid to the Bank,  and all such amounts  which shall
be paid  directly  to the Bank by the  Trustee,  shall be  credited  against the
corresponding  reimbursement  obligations of the Company under the Reimbursement
Agreement.

         (C)     During  such time as Bonds are  pledged  to the Bank  under the
terms of this  Agreement,  the Bank shall be  entitled  to  exercise  all of the
rights of an owner of Bonds with respect to voting, consenting and directing the
Trustee  as if the Bank were the owner of such  Bonds,  and the  Company  hereby
grants and assigns to the Bank all such rights.

SECTION 4. Collateral. All Purchased Bonds at any time pledged hereunder and all
income therefrom and proceeds thereof,  are herein  collectively  referred to as
the "Collateral".

SECTION 5. Release of Bonds.  Simultaneously with the receipt by the Bank of the
proceeds of the sale of any Purchased  Bonds in an amount equal to the principal
amount of Purchased Bonds  remarketed by the  Remarketing  Agent pursuant to the
Remarketing Agreement, together with any interest accrued on account of the Bond
Purchase Drawing-Principal or Bond Purchase Drawing-Interest, Purchased Bonds in
the  principal  amount equal to the principal  amount  received by the Bank from
said  sale  shall  be  released  from the lien of this  Agreement  and  shall be
delivered to the Remarketing  Agent,  and such payment shall increase the amount
payable   under  the   Letter  of  Credit   with   respect   to  Bond   Purchase
Drawings-Principal and/or Bond Purchase Drawings-Interest.

SECTION  6.  Rights of the Bank.  The Bank  shall not be liable  for  failure to
collect or realize upon the Obligations or any collateral  security or guarantee
therefor,  or any part  thereof,  or for any  delay in so doing  nor shall it be
under any obligation to take any action  whatsoever with regard  thereto.  If an
Event of Default on the part of the Company  under the  Reimbursement  Agreement
has occurred and is continuing,  the Bank may thereafter without notice exercise
all rights,  privileges or options  pertaining  to any Purchased  Bonds as if it
were the  absolute  owner  thereof,  upon such  terms and  conditions  as it may
determine,  all  without  liability,  except to account  for  property  actually
received by the Bank; provided, however, the Bank



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shall  have no duty to  exercise  any of the  aforesaid  rights,  privileges  or
options  and shall not be  responsible  for any  failure to do so or delay in so
doing.

SECTION 7. Remedies. If an Event of Default has occurred and is continuing,  and
any portion of the  Obligations  has been  declared due and  payable,  the Bank,
without demand of performance  or other demand,  advertisement  or notice of any
kind  (except  the  notice  specified  below of the time and  place of public or
private  sale) to or upon the Company or any other Person (all and each of which
demands,  advertisements  and/or  notices  are  hereby  expressly  waived),  may
forthwith collect, receive,  appropriate and realize upon the Collateral, or any
part  thereof,  and/or may  forthwith  sell,  assign,  give option or options to
purchase,  contract to sell or otherwise  dispose of and deliver all or any part
of the  Collateral,  in such manner as the Bank may elect,  including a purchase
for its own account,  upon such terms and conditions and at such price as it may
deem advisable. All Purchased Bonds so sold shall be free of any right or equity
of redemption in the Company,  which right or equity is hereby  expressly waived
or released.  The Bank shall apply the net proceeds of any such  realization  of
sale, after deducting all reasonable  costs and expenses  incurred in connection
therewith  including  reasonable  attorneys' fees, to the payment in whole or in
part, of the Obligations in such order as the Bank may elect.  The Company shall
remain liable for any deficiency  remaining unpaid after such  application,  and
the Bank shall be required to account to the Company for any surplus  only after
so  applying  such net  proceeds  and after the payment by the Bank of any other
amount  required  by any  provision  of law.  The Bank shall give ten (10) days'
notice of the time and place of any  public  sale or of the time  after  which a
private sale or other  intended  disposition  of the Purchased  Bonds is to take
place and such notice  shall  constitute  reasonable  notification  thereof.  In
addition to the rights and remedies  granted to it in this  Agreement and in any
other  instrument  or agreement  securing,  evidencing or relating to any of the
Obligations,  the Bank shall have all the rights and remedies of a secured party
under the Uniform Commercial Code of the State of New York.

SECTION 8. Representations, Warranties and Covenants of the Company. The Company
represents and warrants that:

         (A)     on the  date of  delivery  to the Bank of any  Purchased  Bonds
described herein, neither the Issuer, the Remarketing Agent, the Trustee nor any
other  Person will have any right,  title or  interest  in and to the  Purchased
Bonds;

         (B)     it  has,  and on the  date  of  delivery  to  the  Bank  of any
Purchased  Bonds will have,  full  capacity and legal right to pledge all of its
right,  title  and  interest  in and to the  Purchased  Bonds  pursuant  to this
Agreement;

         (C)     this Agreement has been duly authorized, executed and delivered
by the Company and  constitutes  a legal,  valid and binding  obligation  of the
Company enforceable in accordance with its terms;

         (D)     no consent of any other party  including,  without  limitation,
creditors  of  the  Company  and  no  consent,   license,  permit,  approval  or
authorization of, exemption by, notice or report to, or registration,  filing or
declaration  with, any governmental  authority is required to be obtained by the
Company in  connection  with the  execution,  delivery  or  performance  of this
Agreement;


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         (E)     the execution,  delivery and performance of this Agreement will
not violate the Company's  Articles of Incorporation or by-laws or any provision
of any applicable law or regulation or of any order,  judgment,  writ,  award or
decree of any court,  arbitrator or Governmental  Authority, or of any mortgage,
indenture,  lease,  contract,  or other agreement,  instrument or undertaking to
which the  Company  is a party or by which it is bound or upon any of its assets
and will not  result  in the  creation  or  imposition  of any  lien,  charge or
encumbrance  on or security  interest in any of the assets of the Company except
as contemplated by this Agreement which would have a material and adverse effect
on the security of the Bank;

         (F)     there is no  pending  action or  proceeding  before  any court,
governmental agency or arbitrator against or directly involving the Company and,
to the  best of the  Company's  knowledge,  there  is no  threatened  action  or
proceeding  affecting  the  Company  before  any court,  governmental  agency or
arbitrator  which,  in any case,  is likely  materially  to impair the Company's
ability to perform its obligations under this Agreement; and

         (G)     the  pledge,  assignment  and  delivery  to the  Bank  of  such
Purchased Bonds pursuant to this Agreement will create a valid first lien on and
a first  perfected  security  interest in all right,  title and  interest of the
Company in and to such Purchased Bonds, and the proceeds thereof,  subject to no
prior pledge, lien, mortgage,  hypothecation,  security interest, charge, option
or  encumbrance  or to any  agreement  purporting  to grant to any third party a
security  interest in the property or assets of the Company  which would include
the Purchased Bonds.

         The Company  covenants and agrees that it will defend the Bank's right,
title and  security  interest  in and to the  Purchased  Bonds and the  proceeds
thereof against the claims and demands of all Persons whomsoever,  and covenants
and agrees  that it will have like title and right to pledge any other  Property
at any time  hereafter  pledged  to the Bank as  Collateral  hereunder  and will
likewise defend the Bank's right thereto and security interest therein.

SECTION 9. No Disposition,  etc.  Without prior written consent of the Bank, the
Company agrees that it will not sell, assign,  transfer,  exchange, or otherwise
dispose of, or grant any option with  respect  to, the  Collateral,  nor will it
create,  incur or permit to exist any  pledge,  lien,  mortgage,  hypothecation,
security interest,  charge,  option or any other encumbrance with respect to any
of the Collateral,  or any interest therein, or any proceeds thereof, except for
the lien and security interest provided for by this Agreement.

SECTION 10.  Sale of Collateral.

         (A)     The Company  recognizes that the Bank may be unable to effect a
public  sale  of any  or  all  of the  Purchased  Bonds  by  reason  of  certain
prohibitions contained in the Securities Act of 1933, as amended, and applicable
state  securities  laws,  but may be  compelled to resort to one or more private
sales  thereof to a  restricted  group of  purchasers  who will be  obligated to
agree,  among other things, to acquire such securities for their own account for
investment  and not  with a view to the  distribution  or  resale  thereof.  The
Company  acknowledges and agrees that any such private sale may result in prices
and other  terms less  favorable  to the seller  than if such sale were a public
sale and, notwithstanding such circumstances,  agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner so long as
the Company shall have been given not less than 10 days prior notice of the date
and terms of such private sale. The Bank shall be under no obligation to delay a
sale of any of the  Purchased  Bonds for the


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period of time  necessary to permit the Issuer to register such  securities  for
public sale under the Securities Act, or under applicable state securities laws,
even if the Issuer would agree to do so.

         (B)     The Company  further  agrees to do or cause to be done all such
other  acts and  things  as may be  necessary  to make such sale or sales of any
portion or all of the Purchased  Bonds valid and binding and in compliance  with
any and all applicable laws, regulations order, writs,  injunctions,  decrees or
awards of any and all  courts,  arbitrators  or  governmental  instrumentalities
having  jurisdiction over any such sale or sales, all at the Company's  expense.
The Company  further  agrees that a breach of any of the covenants  contained in
this paragraph 10 will cause  irreparable  injury to the Bank, that the Bank has
no  adequate  remedy at law in respect of such  breach  and,  as a  consequence,
agrees  that  each and  every  covenant  contained  in this  paragraph  shall be
specifically  enforceable  against the Company and the Company hereby waives and
agrees not to assert any defenses against an action for specific  performance of
such covenants  except for a defense that no Event of Default has occurred under
the Reimbursement Agreement.

SECTION 11.  Further  Assurances.  The Company  agrees that at any time and from
time to time upon the written  request of the Bank, the Company will execute and
deliver such further  documents  and do such further acts and things as the Bank
may reasonably request in order to effect the purposes of this Agreement.

SECTION 12. Notices.  All notices provided for hereunder shall be in writing and
shall be mailed or delivered to the respective parties hereto as follows:


         If to the Company to:

     IF 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.

     IF TO THE BANK:

            KeyBank National Association
            66 South Pearl Street
            Albany, New York  12207-1501
            Attention:  Corporate Banking Division


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            WITH A COPY TO:

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


or as to each party at such other  address as shall be  designated by such party
in a written  notice to each other party.  All such notices  shall be in writing
and shall be deemed given when (A) sent to the  applicable  address stated above
by registered or certified mail, postage prepaid,  return receipt requested,  or
by such other means (including,  but not limited to, personal delivery) as shall
provide the sender with documentary  evidence of such delivery,  (B) delivery is
refused  by the  addressee  as  evidenced  by the  affidavit  of the  person who
attempted to effect such delivery.

SECTION 13. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

SECTION  14. No  Waiver;  Cumulative  Remedies.  The Bank  shall not by any act,
delay,  omission  or  otherwise  be deemed to have  waived  any of its rights or
remedies hereunder and no waiver shall be valid unless in writing, signed by the
Bank, and then only to the extent therein set forth. A waiver by the Bank of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which the Bank would otherwise have on any future  occasion.
No failure to  exercise or any delay in  exercising  on the part of the Bank any
right,  power or privilege  hereunder,  shall operate as a waiver  thereof,  nor
shall any single or partial exercise of any right, power or privilege  hereunder
preclude  any other or further  exercise  thereof or the  exercise  of any other
right,  power  or  privilege.  The  rights  and  remedies  herein  provided  are
cumulative and may be exercised singly or  concurrently,  and are in addition to
and are not exclusive of any rights or remedies  provided by the other Financing
Documents, or by law or in equity.

SECTION 15. Waivers, Amendments; Applicable Law. None of the terms or provisions
of this  Agreement  may be waived,  altered,  modified  or amended  except by an
instrument in writing, duly executed by the Company and the Bank. This Agreement
shall be binding upon,  and shall inure to the benefit of the parties hereto and
their respective,  successors and assigns.  This Agreement shall be governed by,
and be construed and  interpreted  in accordance  with, the laws of the State of
New York.




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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their proper and duly  authorized by its officers as of the day
and year first above written.


                               SPURLOCK ADHESIVES, INC.


                               BY: /s/ Phillip S. Sumpter
                                   ---------------------------------
                               ITS: Phillip S. Sumpter, Executive Vice President
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                               KEYBANK NATIONAL ASSOCIATION



                               BY: /s/ Richard C. Van Auken
                                   ---------------------------------
                               ITS: Senior Banker
                                    --------------------------------



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