Exhibit 10.44

                    HAZARDOUS SUBSTANCES INDEMNITY AGREEMENT


         THIS HAZARDOUS SUBSTANCES INDEMNITY AGREEMENT (the "Agreement") is made
as of the 1st day of October,  1997,  by SPURLOCK  ADHESIVES,  INC.,  a Virginia
corporation  with an office for the  transaction  of  business  at 5090  General
Mahone Highway, Waverly, Virginia (the "Company") and SPURLOCK INDUSTRIES, INC.,
a Virginia  corporation  with an office for the  transaction of business at 5090
General Mahone Highway,  Waverly, Virginia (the "Indemnitor") for the benefit of
KEYBANK NATIONAL ASSOCIATION,  a national banking association with an office for
the  transaction  of business at 66 South Pearl  Street,  Albany,  New York (the
"Bank").

                                    RECITALS

         WHEREAS,  contemporaneously  with  the  execution  of  this  Agreement,
Company and Bank have  entered into a Letter of Credit  Reimbursement  Agreement
dated as of October 1, 1997 (the  "Reimbursement  Agreement")  pursuant to which
the Bank has agreed to issue a letter of credit (the "Letter of Credit") to Star
Bank, N.A., as Trustee (the "Trustee"); and

         WHEREAS,  contemporaneously  with the execution of this Agreement,  the
Company has executed and delivered to the Bank a $1,500,000 Promissory Note (the
"Term  Note") to  evidence  a loan  (the  "Term  Loan")  made by the Bank to the
Company; and

         WHEREAS,  the Reimbursement  Agreement and the Term Note are secured in
part by a Mortgage and Security  Agreement (the  "Mortgage")  from the County of
Saratoga  Industrial  Development Agency (the "Issuer") and the Company dated as
of October 1, 1997 which encumbers the real property (the "Mortgaged  Property")
described in Exhibit "A" attached hereto and made a part hereof; and

         WHEREAS,   the  payment  of  the   Company's   obligations   under  the
Reimbursement Agreement and the Term Note are unconditionally  guaranteed by the
Indemnitor through the execution of a guaranty (the "Guaranty"); and

         WHEREAS,  Bank has  required,  as a condition  of issuing the Letter of
Credit and funding the Term Loan, the Company and Indemnitor  indemnify and hold
Bank  harmless  against and from  certain  obligations  for which Bank may incur
liability,  whether as beneficiary of the Mortgage held by Bank, as mortgagee in
possession,  or by  foreclosure,  by reason of the  threat  or  presence  of any
hazardous substance at or near the Mortgaged Property.

         NOW, THEREFORE, in consideration of the premises, Ten Dollars ($10.00),
and other good and valuable consideration,  the receipt and sufficiency of which
are hereby acknowledged,  Company and Indemnitor, intending to be legally bound,
hereby agree as follows:



<PAGE>



         1.     Recitals.  The  foregoing  recitals are  incorporated  into this
Agreement by this reference.

         2.     Definitions.  Capitalized  terms used  herein and not  otherwise
defined shall have the meanings set forth in the Mortgage.

         3.     Representations and Warranties.

                (a)    Company and  Indemnitor  represent  and warrant  that (i)
neither has any actual  knowledge of any unlawful  deposit,  storage,  disposal,
burial,  discharge,  spillage,  uncontrolled loss, seepage or filtration of oil,
petroleum  or  chemical  liquids or solids,  liquid or gaseous  products  or any
hazardous wastes or hazardous substances (collectively, "Hazardous Substances"),
as  those  terms  are  used  in  the   Comprehensive   Environmental   Response,
Compensation,  and Liability Act of 1980 or in any other federal, state or local
law  governing  Hazardous  Substances,  as such laws may be amended from time to
time  (collectively,  the "Hazardous Waste Laws"), at, upon, under or within the
Mortgaged  Property,  except in compliance  with Hazardous  Waste Laws, and (ii)
neither has caused or  permitted  to occur,  and shall not permit to exist,  any
condition which may cause an unlawful discharge of any Hazardous  Substances at,
upon,  under or  within  the  Mortgaged  Property,  except  in  compliance  with
Hazardous Waste Laws.

                (b)    Company and Indemnitor further represent and warrant that
(i) neither has been nor will be involved in operations at or near the Mortgaged
Property  which  operations  could lead to (A) the  imposition  of  liability on
Company or  Indemnitor,  or on any  subsequent  or former owner of the Mortgaged
Property  or (B) the  creation  of a lien on the  Mortgaged  Property  under the
Hazardous Waste Laws or under any similar laws or regulations;  and (ii) neither
has  permitted,  and will not permit,  any tenant or  occupant of the  Mortgaged
Property  to  engage in any  activity  that  could  impose  liability  under the
Hazardous Waste Laws on such tenant or occupant,  on Company or Indemnitor or on
any other owner of any of the Mortgaged Property.

         4.     Covenants.

                (a)    Company and Indemnitor  shall comply  strictly and in all
respects  with  the  requirements  of  the  Hazardous  Waste  Laws  and  related
regulations  and with all similar  laws and  regulations  and shall  notify Bank
immediately  in the  event  of  any  discharge  or  discovery  of any  Hazardous
Substance  at,  upon,  under or  within  the  Mortgaged  Property.  Company  and
Indemnitor  shall  promptly  forward  to Bank  copies  of all  orders,  notices,
permits, applications or other communications and reports in connection with any
discharge  or the  presence  of any  Hazardous  Substance  or any other  matters
relating to the Hazardous Waste Laws or any similar laws or regulations, as they
may affect the Mortgaged Property.



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<PAGE>

                (b)    Promptly  upon the  written  request  of Bank,  after the
occurrence of any unlawful discharge or discovery under 3(a) hereof, Company and
Indemnitor  shall provide Bank, at their  expense,  with an  environmental  site
assessment  or   environmental   audit  report  prepared  by  an   environmental
engineering  firm  reasonably  acceptable  to Bank,  to assess with a reasonable
degree of certainty the presence or absence of any Hazardous  Substances and the
potential  costs  in  connection  with  abatement,  cleanup  or  removal  of any
Hazardous Substances found on, under, at or within the Mortgaged Property.

         5.     Indemnity.

                (a)    Company and Indemnitor,  jointly and severally,  shall at
all times  indemnify and hold harmless Bank against and from any and all claims,
suits, actions, debts, damages, costs, losses, obligations,  judgments, charges,
and expenses,  of any nature whatsoever suffered or incurred by Bank, whether as
mortgagee, as mortgagee in possession, or as successor-in-interest to Company by
foreclosure  deed or deed in lieu of  foreclosure,  under or on  account  of the
Hazardous Waste Laws or any similar laws or regulations, including the assertion
of any lien thereunder, with respect to:

                       (1)    any discharge of Hazardous Substances,  the threat
                of a discharge of any Hazardous  Substances,  or the presence of
                any  Hazardous   Substances  affecting  the  Mortgaged  Property
                whether  or  not  the  same  originates  or  emanates  from  the
                Mortgaged  Property including any loss of value of the Mortgaged
                Property as a result of any of the foregoing;

                       (2)    any costs of removal or remedial  action  incurred
                by the United  States  Government  or any costs  incurred by any
                other person or damages from injury to,  destruction of, or loss
                of natural  resources,  including  reasonable costs of assessing
                such  injury,  destruction  or  loss  incurred  pursuant  to any
                Hazardous Waste Laws;

                       (3)    liability for personal  injury or property  damage
                arising   under  any   statutory  or  common  law  tort  theory,
                including,   without   limitation,   damages  assessed  for  the
                maintenance of a public or private  nuisance or for the carrying
                on of an abnormally  dangerous activity at or near the Mortgaged
                Property; and/or

                       (4)    any  other  environmental   matter  affecting  the
                Mortgaged  Property within the jurisdiction of the Environmental
                Protection  Agency,  any other federal  agency,  or any state or
                local agency.

The  obligations  of Company and  Indemnitor  under this  Agreement  shall arise
whether or not the Environmental  Protection Agency, any other federal agency or
any state or local agency has taken or threatened any action in connection  with
the presence of any Hazardous Substances.


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<PAGE>



                (b)    In the event of any  discharge of  Hazardous  Substances,
the threat of a discharge of any  Hazardous  Substances,  or the presence of any
Hazardous Substances  affecting the Mortgaged Property,  whether or not the same
originates  or  emanates  from the  Mortgaged  Property or any  contiguous  real
estate,  and/or if Company or  Indemnitor  shall fail to comply  with any of the
requirements  of the Hazardous  Waste Laws or related  regulations  or any other
environmental  law or  regulation,  Bank may at its  election,  but  without the
obligation so to do, give such notices and/or cause such work to be performed at
the Mortgaged  Property and/or take any and all other actions as Bank shall deem
necessary  or  advisable  in order  to  abate  the  discharge  of any  Hazardous
Substance,  remove the Hazardous  Substance or cure the noncompliance of Company
or Indemnitor.

                (c)    Company and Indemnitor  acknowledge  that Bank has agreed
to issue the Letter of Credit in reliance upon the representations,  warranties,
covenants and indemnities of the Company and Indemnitor in this  Agreement.  All
of the representations,  warranties, covenants and indemnities of this Agreement
shall  survive  the  repayment  of all  amounts  due or to become  due under the
Reimbursement  Agreement and/or the release of the lien of the Mortgage from the
Mortgaged Property and shall survive the transfer of any or all right, title and
interest in and to the  Mortgaged  Property by Company to any party,  whether or
not affiliated with Indemnitor.

         6.     Attorney's  Fees. If Bank,  or someone on Bank's behalf  retains
the services of any  attorney in  connection  with the subject of the  indemnity
herein,  Company and Indemnitor shall pay Bank's reasonable costs and attorney's
fees thereby incurred. Bank may employ an attorney of its own choice.

         7.     Interest.  In the event that Bank incurs any obligations,  costs
or  expenses  under  this  Agreement,  Company  and  Indemnitor  shall  pay Bank
immediately on demand, and if such payment is not received within ten (10) days,
interest on such  amount  shall,  after the  expiration  of the ten-day  period,
accrue at the interest rate set forth in the Reimbursement  Agreement until such
amount, plus interest, is paid in full.

         8.     No Waiver.  The liabilities of Company and Indemnitor under this
Agreement  shall in no way be limited or impaired by, and Company and Indemnitor
hereby consent to and agree to be bound by any amendment or  modification of the
provisions  of the  Financing  Documents  or Bank  Documents  to or with Bank by
Company  or  Indemnitor  or any  person  who  succeeds  Company  as owner of the
Mortgaged  Property.  In addition,  notwithstanding  any terms of the  Financing
Documents or the Bank  Documents to the  contrary,  the liability of the Company
and Indemnitor  under this Agreement  shall in no way be limited or impaired by:
(i) any  extensions  of time for  performance  required by any of the  Financing
Documents or the Bank Documents; (ii) any sale, assignment or foreclosure of the
Mortgage or any sale or transfer of all or part of the Mortgaged Property; (iii)
any  exculpatory  provision in any of the Financing  Documents or Bank Documents
limiting Bank's recourse to property  encumbered by the Mortgage or to any other
security,  or limiting Bank's rights to a deficiency  judgment  against Company;
(iv) the accuracy or inaccuracy of the representations and warranties made by

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<PAGE>

Company under any of the Financing Documents or Bank Documents;  (v) the release
of Company or any other  person from  performance  or  observance  of any of the
agreements,  covenants, terms or conditions contained in the Financing Documents
or Bank Documents by operation of law, Bank's voluntary act, or otherwise;  (vi)
the  release  or  substitution,  in whole or in part,  of any  security  for the
Reimbursement  Agreement; or (vii) Bank's failure to record the Mortgage or file
any UCC-1 financing  statements (or Bank's  improper  recording or filing of any
thereof)  or to  otherwise  perfect,  protect,  secure  or insure  any  security
interest or lien given as security for the Reimbursement Agreement;  and, in any
such case,  whether with or without  notice to Company or Indemnitor and with or
without consideration.

         9.     Waiver by Company and Indemnitor.  Company and Indemnitor  waive
any right or claim of right to cause a  marshalling  of  Company's  assets or to
cause  Bank  to  proceed  against  any of the  security  for  the  Reimbursement
Agreement before  proceeding under this Agreement against Company and Indemnitor
or to proceed  against Company and Indemnitor in any particular  order;  Company
and  Indemnitor  agree that any  payments  required to be made  hereunder  shall
become due on demand;  Company and Indemnitor expressly waive and relinquish all
rights and remedies (including any rights of subrogation) accorded by applicable
law to indemnitors or guarantors.

         10.    Releases. Any one or more of Company and Indemnitor or any other
party liable upon or in respect of this Agreement or the Reimbursement Agreement
may be released without affecting the liability of any party not so released.

         11.    Amendments.  No  provision  of this  Agreement  may be  changed,
waived,  discharged  or  terminated  orally,  by telephone or by any other means
except by an instrument in writing signed by the party against whom  enforcement
of the change, waiver, discharge or termination is sought.

         12.    Joint and Several Liability. In the event that this Agreement is
executed  by more than one party,  the  liability  of such  parties is joint and
several.  A separate  action or actions  may be brought and  prosecuted  against
Company and  Indemnitor,  whether or not an action is brought  against any other
person or whether or not any other person is joined in such action or actions.

         13.    Consent to Jurisdiction.  Company and Indemnitor  consent to the
exercise of personal  jurisdiction over Company and Indemnitor by any federal or
state  court in the State of New York and  consent to the laying of venue in any
jurisdiction or locality in the State of New York.  Service shall be effected by
any means permitted by the court in which any action is filed.

         14.    Notices. All notices, demands, requests and other communications
required hereunder shall be in writing and shall be deemed to have been properly
given if personally delivered or sent by United States,  certified or registered
mail, return receipt requested, postage prepaid, addressed to the party for whom
it is intended at its address hereinafter set forth:


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<PAGE>

                If to Company:

                Spurlock Adhesives, Inc.
                5090 General Mahone Highway
                Waverly, Virginia  23890

                Attn:  Phillip S. Sumpter

                If to Indemnitor:

                Spurlock Industries, Inc.
                5090 General Mahone Highway
                Waverly, Virginia  23890

                Attention:  ____________________________

                If to Bank:

                KeyBank National Association
                66 South Pearl Street
                Albany, New York  12207

                Attention:  Corporate Banking Division

Notice shall be deemed given upon  receipt.  Any party may designate a change of
address by written  notice to the  others,  given at least ten (10) days  before
such change of address is to become effective.

         15.    Waivers.  The parties waive trial by jury in any action  brought
on, under or by virtue of this Agreement. Company and Indemnitor waive any right
to require Bank at any time to pursue any remedy in Bank's power whatsoever. The
failure of Bank to insist upon strict  compliance  with any of the terms  hereof
shall not be considered  to be a waiver of any such terms,  nor shall it prevent
Bank from  insisting  upon strict  compliance  with this  Agreement or any other
Financing Document or Bank Document at any time thereafter.

         16.    Severability.  If any  clause  or  provisions  herein  contained
operates or would prospectively operate to invalidate this Agreement in whole or
in part,  then such clause or  provision  shall be held for naught as though not
contained herein, and the remainder of this Agreement shall remain operative and
in full force and effect.

         17.    Inconsistencies   Among  the   Financing   Documents   and  Bank
Documents.  Nothing  contained  herein  is  intended  to  modify  in any way the
obligations  of Company or Indemnitor  under the  Reimbursement  Agreement,  the
Mortgage or any other Financing Document or Bank Document.  Any  inconsistencies
among the Financing Documents and Bank


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<PAGE>

Documents  shall be construed,  interpreted  and resolved so as to benefit Bank,
and  Bank's  election  of which  interpretation  or  construction  is for Bank's
benefit shall govern.

         18.    Successors  and Assigns.  This  Agreement  shall be binding upon
Company's and Indemnitor's successors,  assigns, heirs, personal representatives
and estate and shall inure to the benefit of Bank and its successors and assigns
but, to the extent the Reimbursement Agreement may be assigned to a third party,
the benefits of this  Agreement  shall  continue to inure only to the benefit of
Bank.

         19.    Controlling  Laws.  This  Agreement  shall  be  governed  by and
construed in accordance with the laws of the State of New York.

         IN WITNESS WHEREOF, Company and Indemnitor have executed this Agreement
as of the date first above written.


                                           SPURLOCK ADHESIVES, INC.


                                           By: /s/ Phillip S. Sumpter
                                               ---------------------------------
                                                    Authorized Officer

                                           SPURLOCK INDUSTRIES, INC.


                                           By: /s/ Phillip S. Sumpter
                                               ---------------------------------
                                                    Authorized Officer



                                        7

<PAGE>


STATE OF NEW YORK    )
                     )   SS.:
COUNTY OF SARATOGA   )

         On the 9th day of October,  1997, before me personally appeared Phillip
S. Sumpter,  to me known, who being by me duly sworn, did depose and say that he
resides at 33296 Shingleton Road,  Waverly,  Virginia,  that he is the Executive
Vice President of SPURLOCK  ADHESIVES,  INC., the  corporation  described in and
which executed the foregoing instrument,  and that he signed his name thereto by
order of the Board of Directors of said corporation.


                                           /s/ Kevin J. Kelley
                                           -------------------------------------
                                           Notary Public - State of New York
                                           My Commission Expires:

                                                   Kevin J. Kelley
                                           Notary Public, State of New York
                                              Qualified in Albany County
                                              Commission Expires 10/31/97


STATE OF NEW YORK    )
                     )   SS.:
COUNTY OF SARATOGA   )

         On the 9th day of October,  1997, before me personally appeared Phillip
S. Sumpter,  to me known, who being by me duly sworn, did depose and say that he
resides at 33296 Shingleton Road,  Waverly,  Virginia,  that he is the Executive
Vice President of SPURLOCK  INDUSTRIES,  INC., the corporation  described in and
which executed the foregoing instrument,  and that he signed his name thereto by
order of the Board of Directors of said corporation.


                                           /s/ Kevin J. Kelley
                                           -------------------------------------
                                           Notary Public - State of New York
                                           My Commission Expires:

                                                   Kevin J. Kelley
                                           Notary Public, State of New York
                                              Qualified in Albany County
                                              Commission Expires 10/31/97


01294\hazard.agr


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