Exhibit 10.26

                             BUSINESS LOAN AGREEMENT
<TABLE>
<CAPTION>
<S>            <C>            <C>            <C>            <C>          <C>            <C>            <C>            <C>          
-------------- -------------- -------------- -------------- ------------ -------------- -------------- -------------- --------------
   Principal     Loan Date      Maturity       Loan No.         Call      Collateral       Account        Officer       Initials
  $92,000.00    10-23-1998     10-30-2003       BL14117          1E           10                            OLS
-------------- -------------- -------------- -------------- ------------ -------------- -------------- -------------- --------------
</TABLE>
Reference  in the  shaded  area are for  Lender's  use only and do not limit the
applicability of this document to any particular loan or item.
--------------------------------------------------------------------------------

Borrower:  SPURLOCK ADHESIVES, INCORPORATED     Lender:  JAMES RIVER BANK
           (TIN: 54-1522700)                             MAIN OFFICE
           125 Bank St. P.O. Box 8                       209 W MAIN STREET
           Waverly, VA  23890                            WAVERLY, VA  23890-0047

================================================================================

THIS  BUSINESS  LOAN  AGREEMENT   between   SPURLOCK   ADHESIVES,   INCORPORATED
("Borrower")  and JAMES RIVER BANK ("Lender") is made on the following terms and
conditions.  Borrower has  received  prior  commercial  loans from Lender or has
applied  to  Lender  for  a  commercial   loan  or  loans  and  other  financial
accommodations,  including  those  which  may be  described  on any  exhibit  or
schedule   attached   to  this   Agreement.   All  such   loans  and   financial
accommodations, together with all future loans and financial accommodations from
Lender to Borrower, are referred to in this Agreement individually as the "Loan"
and  collectively as the "Loans."  Borrower  understands and agrees that: (a) in
granting,  renewing,  or extending any Loan,  Lender is relying upon  Borrower's
representations, warranties, and agreements, as set forth in this Agreement; (b)
the granting, renewing, or extending of any Loan by Lender at all times shall be
subject to Lender's sole judgment and  discretion;  and (c) all such Loans shall
be and shall  remain  subject  to the  following  terms and  conditions  of this
Agreement.

TERM.  This  Agreement  shall be  effective  as of October 21,  1998,  and shall
continue  thereafter  until all  Indebtedness  of  Borrower  to Lender  has been
performed in full and the parties terminate this Agreement in writing.

DEFINITIONS.  The following words shall have the following meanings when used in
this  Agreement.  Terms not otherwise  defined in this Agreement  shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar  amounts  shall mean amounts in lawful  money of the United  States of
America.

         Agreement.  The word "Agreement" means this Business Loan Agreement, as
         this  Business  Loan  Agreement may be amended or modified from time to
         time,  together  with  all  exhibits  and  schedules  attached  to this
         Business Loan Agreement from time to time.

         Borrower.  The word "Borrower" means SPURLOCK  ADHESIVES,  INCORPORATED
         and its successors and assigns.  The word "Borrower" also includes,  as
         applicable,  all  subsidiaries  and  affiliates of Borrower as provided
         below in the paragraph titled "Subsidiaries and Affiliates."

         CERCLA.  The  word  "CERCLA"  means  the  Comprehensive   Environmental
         Response, Compensation, and Liability Act of 1980, as amended.

         Cash Flow.  The words  "Cash  Flow" mean net income  after  taxes,  and
         exclusive of  extraordinary  gains and income,  plus  depreciation  and
         amortization.

         Collateral. The word "Collateral" means and includes without limitation
         all  property  and assets  granted as  collateral  security for a Loan,
         whether  real  or  personal  property,   whether  granted  directly  or
         indirectly,  whether granted now or in the future,  and whether granted
         in  the  form  of  a  security  interest,   mortgage,  deed  of  trust,
         assignment,  pledge,  chattel mortgage,  chattel trust,  factor's lien,
         equipment trust,  conditional sale, trust receipt lien, charge, lien or
         title retention contract,  lease or consignment  intended as a security
         device,  or any other  security or lien  interest  whatsoever,  whether
         created by law, contract, or otherwise.

         Debt.  The word "Debt" means all of  Borrower's  liabilities  excluding
         Subordinated Debt.

         ERISA. The word "ERISA" means the Employee  Retirement  Income Security
         Act of 1974, as amended.

         Event of Default. The words "Event of Default" mean and include without
         limitation  any of the Events of Default set forth below in the section
         titled "EVENTS OF DEFAULT."

         Granter.  The word "Grantor" means and includes without limitation each
         and all of the persons or entities  granting a Security Interest in any
         Collateral for the  Indebtedness,  and their personal  representatives,
         successors and assigns.

         Guarantor.  The word "Guarantor" means and includes without  limitation
         each and all of the guarantors,  sureties, and accommodation parties in
         connection with any  Indebtedness  and their personal  representatives,
         successors and assigns.

         Indebtedness.  The  word  "Indebtedness"  means  and  includes  without
         limitation all Loans, including all principal, interest and other fees,
         costs and charges,  if any,  together with all other present and future
         liabilities and obligations of Borrower, or any one or more of them, to
         Lender, whether direct or indirect,  matured or unmatured,  and whether
         absolute or contingent,  joint,  several, or joint and several,  and no
         matter how the same may be evidenced or shall arise.

         Lender.  The word "Lender"  means JAMES RIVER BANK,  its successors and
         assigns.

         Liquid Assets.  The words "Liquid  Assets" mean Borrower's cash on hand
         plus Borrower's readily marketable securities.

         Loan. The word "Loan" or "Loans" means and includes without  limitation
         any and all commercial loans and financial  accommodations  from Lender
         to Borrower,  whether now or hereafter existing, and however evidenced,
         including without  limitation those loans and financial  accommodations
         described  herein or described  on any exhibit or schedule  attached to
         this Agreement from time to time.

         Note. The word "Note" means and includes without limitation  Borrower's
         promissory   note  or  notes,  if  any,   evidencing   Borrower's  Loan
         obligations in favor of Lender, as well as any substitute,  replacement
         or refinancing note or notes therefor.

         Permitted  Liens.  The  words  "Permitted  Liens"  mean:  (a) liens and
         security  interests  securing  Indebtedness owed by Borrower to Lender;
         (b) liens for taxes, assessments, or similar charges either not yet due
         or being contested in good faith; (c) liens of materialmen,  mechanics,
         warehousemen,  or carriers, or other like liens arising in the ordinary
         course  of  business  and  securing   obligations  which  are  not  yet
         delinquent;  (d)  purchase  money  liens  or  purchase  money  security
         interests  upon or in any property  acquired or held by Borrower in the
         ordinary course of business to secure  indebtedness  outstanding on the
         date of this  Agreement or permitted to be incurred under the paragraph
         of this  Agreement  titled  "Indebtedness  and  Liens";  (e)  liens and
         security  interests which, as of the date of this Agreement,  have been
         disclosed to and approved by the Lender in writing; and (f) those liens
         and security interests which in the aggregate  constitute an immaterial
         and  insignificant  monetary  amount  with  respect to the net value of
         Borrower's assets.

         Related  Documents.  The words  "Related  Documents"  mean and  include
         without  limitation  all  promissory  notes,  credit  agreements,  loan
         agreements,  environmental agreements, guaranties, security agreements,
         mortgages,  deeds of trust, and all


<PAGE>

10-23-1998                  BUSINESS LOAN AGREEEMENT                      Page 2
Loan No BL 14117                  (Continued)
================================================================================

         other instruments,  agreements and documents,  whether now or hereafter
         existing, executed in connection with the Indebtedness.

         Security  Agreement.  The words  "Security  Agreement" mean and include
         without limitation any agreements,  promises, covenants,  arrangements,
         understandings or other agreements,  whether created by law,  contract,
         or  otherwise,  evidencing,  governing,  representing,  or  creating  a
         Security Interest.

         Security  Interest.  The words  "Security  Interest"  mean and  include
         without limitation any and all types of liens and encumbrances, whether
         created by law, contract, or otherwise.

         SARA.   The  word   "SARA"   means   the   Superfund   Amendments   and
         Reauthorization Act of 1986 as now or hereafter amended.

         Subordinated Debt. The words  "Subordinated Debt" mean indebtedness and
         liabilities  of  Borrower  which  have  been  subordinated  by  written
         agreement  to  indebtedness  owed by  Borrower  to  Lender  in form and
         substance acceptable to Lender.

         Tangible  Net Worth.  The words  "Tangible  Net Worth" mean  Borrower's
         total  assets   excluding  all  intangible   assets  (i.e.,   goodwill,
         trademarks,  patents, copyrights,  organizational expenses, and similar
         intangible items, but including leaseholds and leasehold  improvements)
         less total Debt.

         Working Capital.  The words "Working  Capital" mean Borrower's  current
         assets,   excluding   prepaid   expenses,   less   Borrower's   current
         liabilities.

CONDITIONS  PRECEDENT TO EACH ADVANCE.  Lender's  obligation to make the initial
Loan Advance and each  subsequent  Loan Advance  under this  Agreement  shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.

         Loan Documents.  Borrower shall provide to Lender in form  satisfactory
         to Lender  the  following  documents  for the Loan:  (a) the Note,  (b)
         Security  Agreements  granting  to  Lender  security  interests  in the
         Collateral,  (c)  Financing  Statements  perfecting  Lender's  Security
         Interests;  (d) evidence of insurance  as required  below;  and (e) any
         other  documents  required  under  this  Agreement  or by Lender or its
         counsel.

         Borrower's  Authorization.  Borrower  shall have  provided  in form and
         substance satisfactory to Lender properly certified  resolutions,  duly
         authorizing the execution and delivery of this Agreement,  the Note and
         the  Related  Documents,   and  such  other  authorizations  and  other
         documents  and  instruments  as Lender or its  counsel,  in their  sole
         discretion, may require.

         Payment of Fees and  Expenses.  Borrower  shall have paid to Lender all
         fees,  charges,  and other  expenses  which are then due and payable as
         specified in this Agreement or any Related Document.

         Representations and Warranties.  The representations and warranties set
         forth in this Agreement, in the Related Documents,  and in any document
         or  certificate  delivered to Lender under this  Agreement are true and
         correct.

         No Event of Default. There shall not exist at the time of any advance a
         condition  which  would  constitute  an Event  of  Default  under  this
         Agreement.

REPRESENTATIONS  AND WARRANTIES.  Borrower represents and warrants to Lender, as
of the  date of this  Agreement,  as of the  date of each  disbursement  of Loan
proceeds, as of the date of any renewal,  extension or modification of any Loan,
and at all times any Indebtedness exists:

         Organization.  Borrower  is a  corporation  which  is  duly  organized,
         validly  existing,   and  in  good  standing  under  the  laws  of  the
         Commonwealth  of Virginia and is validly  existing and in good standing
         in all states in which  Borrower is doing  business.  Borrower  has the
         full power and  authority  to own its  properties  and to transact  the
         businesses  in which it is presently  engaged or presently  proposes to
         engage. Borrower also is duly qualified as a foreign corporation and is
         in good standing in all states in which the failure to so qualify would
         have  a  material   adverse  effect  on  its  businesses  or  financial
         condition.

         Authorization.   The  execution,  delivery,  and  performance  of  this
         Agreement  and all Related  Documents by Borrower,  to the extent to be
         executed, delivered or performed by Borrower, have been duly authorized
         by all  necessary  action by  Borrower;  do not  require the consent or
         approval of any other  person,  regulatory  authority  or  governmental
         body; and do not conflict with, result in a violation of, or constitute
         a default under (a) any provision of its articles of  incorporation  or
         organization,  or bylaws, or any agreement or other instrument  binding
         upon Borrower or (b) any law, governmental regulation, court decree, or
         order applicable to Borrower.

         Financial Information. Each financial statement of Borrower supplied to
         Lender truly and completely disclosed Borrower's financial condition as
         of the date of the  statement,  and there has been no material  adverse
         change in Borrower's  financial condition subsequent to the date of the
         most recent  financial  statement  supplied to Lender.  Borrower has no
         material  contingent  obligations except as disclosed in such financial
         statements.

         Legal  Effect.  This  Agreement  constitutes,  and  any  instrument  or
         agreement  required  hereunder to be given by Borrower  when  delivered
         will  constitute,  legal,  valid and  binding  obligations  of Borrower
         enforceable against Borrower in accordance with their respective terms.

         Properties.  Except as  contemplated by this Agreement or as previously
         disclosed in  Borrower's  financial  statements or in writing to Lender
         and as accepted by Lender,  and except for property tax liens for taxes
         not presently due and payable,  Borrower owns and has good title to all
         of Borrower's properties free and clear of all Security Interests,  and
         has  not  executed  any  security  documents  or  financing  statements
         relating to such properties. All of Borrower's properties are titled in
         Borrower's  legal name, and Borrower has not used, or filed a financing
         statement under, any other name for at least the last five (5) years.

         Hazardous   Substances.   The  terms  "hazardous   waste,"   "hazardous
         substance," "disposal," "release," and "threatened release," as used in
         this  Agreement,  shall  have the  same  meanings  as set  forth in the
         "CERCLA," "SARA," the Hazardous Materials Transportation Act, 49 U.S.C.
         Section 1801, et seq., the Resource  Conservation  and Recovery Act, 42
         U.S.C.  Section  6901, et seq.,  or other  applicable  state or Federal
         laws,  rules, or regulations  adopted pursuant to any of the foregoing.
         Except as disclosed to and acknowledged by Lender in writing,  Borrower
         represents  and  warrants  that:  (a) During  the period of  Borrower's
         ownership  of the  properties,  there  has  been  no  use,  generation,
         manufacture,   storage,  treatment,  disposal,  release  or  threatened
         release of any  hazardous  waste or substance by any person on,  under,
         about or from any of the properties;  (b) Borrower has no knowledge of,
         or  reason to  believe  that  there  has been (i) any use,  generation,
         manufacture,  storage,  treatment,  disposal,  release,  or  threatened
         release of any hazardous  waste or substance  on, under,  about or from
         the  properties  by  any  prior  owners  or  occupants  of  any  of the
         properties,  or (ii) any actual or  threatened  litigation or claims of
         any kind by


<PAGE>

10-23-1998                  BUSINESS LOAN AGREEEMENT                      Page 3
Loan No BL 14117                  (Continued)
================================================================================

         any person  relating  to such  matters;  (c) Neither  Borrower  nor any
         tenant,  contractor,  agent  or  other  authorized  user  of any of the
         properties shall use, generate,  manufacture, store, treat, dispose of,
         or release any hazardous  waste or substance  on, under,  about or from
         any of the  properties;  and any such  activity  shall be  conducted in
         compliance  with  all  applicable  federal,   state,  and  local  laws,
         regulations,  and ordinances,  including without limitation those laws,
         regulations and ordinances described above.  Borrower authorizes Lender
         and its agents to enter upon the  properties  to make such  inspections
         and tests as Lender may deem appropriate to determine compliance of the
         properties with this section of the Agreement. Any inspections or tests
         made by Lender shall be at Borrower's expense and for Lender's purposes
         only and  shall  not be  construed  to  create  any  responsibility  or
         liability on the part of Lender to Borrower or to any other person. The
         representations and warranties contained herein are based on Borrower's
         due diligence in  investigating  the properties for hazardous waste and
         hazardous  substances.  Borrower  hereby  (a)  releases  and waives any
         future claims against Lender for indemnity or contribution in the event
         Borrower becomes liable for cleanup or other costs under any such laws,
         and (b) agrees to indemnify  and hold harmless  Lender  against any and
         all claims, losses, liabilities, damages, penalties, and expenses which
         Lender may directly or indirectly  sustain or suffer  resulting  from a
         breach of this section of the Agreement or as a consequence of any use,
         generation,  manufacture,  storage,  disposal,  release  or  threatened
         release  of a  hazardous  waste or  substance  on the  properties.  The
         provisions of this section of the  Agreement,  including the obligation
         to  indemnify,  shall survive the payment of the  Indebtedness  and the
         termination  or expiration of this  Agreement and shall not be affected
         by  Lender's  acquisition  of any  interest  in any of the  properties,
         whether by foreclosure or otherwise.

         Litigation   and   Claims.   No   litigation,   claim,   investigation,
         administrative proceeding or similar action (including those for unpaid
         taxes) against  Borrower is pending or  threatened,  and no other event
         has occurred which may materially adversely affect Borrower's financial
         condition  or  properties,  other  than  litigation,  claims,  or other
         events,  if any, that have been disclosed to and acknowledged by Lender
         in writing.

         Taxes. To the best of Borrower's knowledge, all tax returns and reports
         of Borrower that are or were required to be filed, have been filed, and
         all taxes, assessments and other governmental charges have been paid in
         full,  except those  presently  being or to be contested by Borrower in
         good faith in the ordinary  course of business  and for which  adequate
         reserves have been provided.

         Lien  Priority.  Unless  otherwise  previously  disclosed  to Lender in
         writing,  Borrower  has  not  entered  into  or  granted  any  Security
         Agreements,  or  permitted  the filing or  attachment  of any  Security
         Interests on or affecting any of the Collateral  directly or indirectly
         securing  repayment of Borrower's Loan and Note, that would be prior or
         that may in any way be  superior  to Lender's  Security  Interests  and
         rights in and to such Collateral.

         Binding  Effect.  This  Agreement,  the Note,  all Security  Agreements
         directly or indirectly  securing  repayment of Borrower's Loan and Note
         and all of the Related  Documents  are binding upon Borrower as well as
         upon  Borrower's  successors,  representatives  and  assigns,  and  are
         legally enforceable in accordance with their respective terms.

         Commercial  Purposes.  Borrower intends to use the Loan proceeds solely
         for business or commercial related purposes.

         Employee Benefit Plans. Each employee benefit plan as to which Borrower
         may have any  liability  complies  in all  material  respects  with all
         applicable  requirements of law and regulations,  and (i) no Reportable
         Event nor  Prohibited  Transaction  (as defined in ERISA) has  occurred
         with respect to any such plan, (ii) Borrower has not withdrawn from any
         such plan or  initiated  steps to do so, (iii) no steps have been taken
         to terminate any such plan, and (iv) there are no unfunded  liabilities
         other than those previously disclosed to Lender in writing.

         Location  of  Borrower's  Offices  and  Records.  Borrower's  place  of
         business,  or Borrower's Chief executive  office,  if Borrower has more
         than one place of business,  is located at 125 Bank Street, P.O. Box 8,
         Waverly,  Virginia 23890.  Unless Borrower has designated  otherwise in
         writing  this  location  is also the office or offices  where  Borrower
         keeps its records concerning the Collateral.

         Information.  All information heretofore or contemporaneously  herewith
         furnished  by Borrower to Lender for the  purposes of or in  connection
         with this Agreement or any transaction  contemplated hereby is, and all
         information  hereafter  furnished by or on behalf of Borrower to Lender
         will be, true and accurate in every material  respect on the date as of
         which  such  information  is  dated  or  certified;  and  none  of such
         information  is or will be incomplete by omitting to state any material
         fact necessary to make such information not misleading.

         Survival of Representations  and Warranties.  Borrower  understands and
         agrees that Lender, without independent investigation,  is relying upon
         the above representations and warranties in making the above referenced
         Loan  to  Borrower.   Borrower   further   agrees  that  the  foregoing
         representations  and warranties shall be continuing in nature and shall
         remain  in  full  force  and  effect  until  such  time  as  Borrower's
         Indebtedness  shall be paid in full, or until this  Agreement  shall be
         terminated  in the  manner  provided  above,  whichever  is the last to
         occur.

AFFIRMATIVE  COVENANTS.  Borrower  covenants and agrees with Lender that,  while
this Agreement is in effect, Borrower will:

         Litigation.  Promptly  inform  Lender in  writing  of (a) all  material
         adverse changes in Borrower's financial condition, and (b) all existing
         and all threatened litigation, claims,  investigations,  administrative
         proceedings  or similar  actions  affecting  Borrower or any  Guarantor
         which could  materially  affect the financial  condition of Borrower or
         the financial condition of any Guarantor.

         Financial  Records.  Maintain its books and records in accordance  with
         generally  accepted  accounting  principles,  applied  on a  consistent
         basis,  and permit  Lender to examine  and audit  Borrower's  books and
         records at all reasonable times.

         Financial Statements. Furnish Lender with, as soon as available, but in
         no event later than sixty (60) days after the end of each fiscal  year,
         Borrower's  balance  sheet and  income  statement  for the year  ended,
         audited by a certified public accountant  satisfactory to Lender,  and,
         as soon as available, but in no event later than thirty (30) days after
         the end of each fiscal quarter, Borrower's balance sheet and profit and
         loss statement for the period ended,  prepared and certified as correct
         to the best knowledge and belief by Borrower's chief financial  officer
         or other officer or person acceptable to Lender.  All financial reports
         required  to be  provided  under this  Agreement  shall be  prepared in
         accordance with generally accepted accounting principles,  applied on a
         consistent basis, and certified by Borrower as being true and correct.

         Additional   Information.   Furnish  such  additional  information  and
         statements, lists of assets and liabilities,  agings of receivables and
         payables,  inventory schedules,  budgets,  forecasts,  tax returns, and
         other  reports  with  respect to  Borrower's  financial  condition  and
         business operations as Lender may request from time to time.

         Financial Covenants and Ratios. Comply with the following covenants and
         ratios:

                  Net Worth  Ratio.  Maintain  a ratio of Total  Liabilities  to
                  Tangible Net Worth of less than 1.00 to 1.00.

<PAGE>

10-23-1998                  BUSINESS LOAN AGREEEMENT                      Page 4
Loan No BL 14117                  (Continued)
================================================================================

                  Current  Ratio.  Maintain a ratio of Current Assets to Current
                  Liabilities  in  excess of 2.00 to 1.00.  Except  as  provided
                  above, all computations made to determine  compliance with the
                  requirements  contained  in this  paragraph  shall  be made in
                  accordance  with  generally  accepted  accounting  principles,
                  applied on a consistent  basis,  and  certified by Borrower as
                  being true and correct.

                  Insurance.  Maintain  fire and other  risk  insurance,  public
                  liability  insurance,  and such other  insurance as Lender may
                  from  time  to  time   reasonably   require  with  respect  to
                  Borrower's  properties  and  operations,   in  form,  amounts,
                  coverages and with insurance  companies  acceptable to Lender.
                  Borrower,  upon request of Lender, will deliver to Lender from
                  time to time the policies or certificates of insurance in form
                  satisfactory to Lender,  including stipulations that coverages
                  will not be  cancelled or  diminished  without at least twenty
                  (20) days'  prior  written  notice to Lender.  Each  insurance
                  policy  also  shall  include  an  endorsement  providing  that
                  coverage in favor of Lender will not be impaired in any way by
                  any act,  omission or default of Borrower or any other person.
                  In  connection  with all  policies  covering  assets  in which
                  Lender holds or is offered a security  interest for the Loans,
                  Borrower  will provide  Lender with such loss payable or other
                  endorsements as Lender may require.

         Insurance Reports.  Furnish to Lender, upon request of Lender,  reports
         on each existing  insurance  policy showing such  information as Lender
         may reasonably request, including without limitation the following: (a)
         the name of the insurer;  (b) the risks insured;  (c) the amount of the
         policy (d) the properties insured; (e) the then current property values
         on the basis of which  insurance has been  obtained,  and the manner of
         determining those values; and (f) the expiration date of the policy. In
         addition,   upon  request  of  Lender  (however  not  more  often  than
         annually),  Borrower will have an independent appraiser satisfactory to
         Lender determine,  as applicable,  the actual cash value or replacement
         cost of any  Collateral.  The cost of such  appraisal  shall be paid by
         Borrower.

         Other  Agreements.  Comply with all terms and  conditions  of all other
         agreements, whether now or hereafter existing, between Borrower and any
         other party and notify Lender  immediately in writing of any default in
         connection with any other such agreements.

         Loan Proceeds.  Use all Loan proceeds  solely for  Borrower's  business
         operations,  unless specifically consented to the contrary by Lender in
         writing.

         Taxes,  Charges  and  Liens.  Pay  and  discharge  when  due all of its
         indebtedness  and  obligations,   including   without   limitation  all
         assessments,  taxes,  governmental charges,  levies and liens, of every
         kind and nature,  imposed upon Borrower or its properties,  income,  or
         profits,  prior to the date on which  penalties  would attach,  and all
         lawful claims that,  if unpaid,  might become a lien or charge upon any
         of  Borrower's  properties,   income,  or  profits.  Provided  however,
         Borrower will not be required to pay and discharge any such assessment,
         tax,  charge,  levy,  lien or claim so long as (a) the  regality of the
         same shall be contested in good faith by appropriate  proceedings,  and
         (b) Borrower shall have established on its books adequate reserves with
         respect to such contested assessment, tax, charge, levy, lien, or claim
         in accordance with generally accepted accounting  practices.  Borrower,
         upon demand of Lender,  will  furnish to Lender  evidence of payment of
         the assessments,  taxes,  charges,  levies,  liens and claims, and will
         authorize the appropriate governmental official to deliver to Lender at
         any  time a  written  statement  of any  assessments,  taxes,  charges,
         levies,  liens and claims against  Borrower's  properties,  income,  or
         profits.

         Performance.  Perform  and  comply  with  all  terms,  conditions,  and
         provisions set forth in this Agreement and in the Related  Documents in
         a timely manner,  and promptly  notify Lender if Borrower learns of the
         occurrence  of any event which  constitutes  an Event of Default  under
         this Agreement or under any of the Related Documents.

         Operations.   Maintain   executive  and   management   personnel   with
         substantially  the same  qualifications  and  experience as the present
         executive and management personnel; provide written notice to Lender of
         any change in executive and management personnel;  conduct its business
         affairs in a reasonable and prudent  manner and in compliance  with all
         applicable  federal,  state and municipal laws,  ordinances,  rules and
         regulations  respecting  its  properties,   charters,   businesses  and
         operations, including without limitation, compliance with the Americans
         With  Disabilities Act and with all minimum funding standards and other
         requirements of ERISA and other laws applicable to Borrower's  employee
         benefit plans.

         Inspection. Permit employees or agents of Lender at any reasonable time
         to inspect any and all  Collateral for the Loan or Loans and Borrower's
         other  properties and to examine or audit Borrower's  books,  accounts,
         and records  and to make  copies and  memoranda  of  Borrower's  books,
         accounts,  and  records.  If  Borrower  now  or at any  time  hereafter
         maintains any records (including without limitation  computer generated
         records and  computer  software  programs  for the  generation  of such
         records) in the possession of a third party, Borrower,  upon request of
         Lender,  shall  notify such party to permit  Lender free access to such
         records at all  reasonable  times and to provide  Lender with copies of
         any records it may request, all at Borrower's expense.

         Compliance  Certificate.  Unless  waived in writing by Lender,  provide
         Lender at least annually and at the time of each  disbursement  of Loan
         proceeds with a  certificate  executed by  Borrower's  chief  financial
         officer,  or other officer or person  acceptable to Lender,  certifying
         that the representations and warranties set forth in this Agreement are
         true  and  correct  as of the  date  of  the  certificate  and  further
         certifying that, as of the date of the certificate, no Event of Default
         exists under this Agreement.

         Environmental  Compliance  and  Reports.  Borrower  shall comply in all
         respects with all  environmental  protection  federal,  state and local
         laws,  statutes,  regulations  and  ordinances;  not cause or permit to
         exist,  as a  result  of an  intentional  or  unintentional  action  or
         omission  on its part or on the part of any third  party,  on  property
         owned and/or  occupied by Borrower,  any  environmental  activity where
         damage  may  result  to  the  environment,  unless  such  environmental
         activity is  pursuant to and in  compliance  with the  conditions  of a
         permit issued by the appropriate  federal,  state or local governmental
         authorities;  shall furnish to Lender  promptly and in any event within
         thirty (30) days after receipt  thereof a copy of any notice,  summons,
         lien,  citation,  directive,  letter  or other  communication  from any
         governmental  agency or  instrumentality  concerning any intentional or
         unintentional  action or omission on Borrower's part in connection with
         any  environmental  activity  whether  or not  there is  damage  to the
         environment and/or other natural resources.

         Additional  Assurances.  Make,  execute  and  deliver  to  Lender  such
         promissory  notes,  mortgages,  deeds of  trust,  security  agreements,
         financing  statements,  instruments,  documents and other agreements as
         Lender or its attorneys may  reasonably  request to evidence and secure
         the Loans and to perfect all Security Interests.

NEGATIVE  COVENANTS.  Borrower  covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

         Indebtedness  and Liens.  (a) Except  for trade  debt  incurred  in the
         normal course of business and  indebtedness  to Lender  contemplated by
         this  Agreement,  create,  incur or assume  indebtedness  for  borrowed
         money,  including capital leases,  (b) except as allowed as a Permitted
         Lien, sell, transfer, mortgage, assign, pledge, lease, grant a security
         interest in, or encumber  any of  Borrower's  assets,  or (c) sell with
         recourse any of Borrower's accounts, except to Lender.

<PAGE>

10-23-1998                  BUSINESS LOAN AGREEEMENT                      Page 5
Loan No BL 14117                  (Continued)
================================================================================

         Continuity  of  Operations.  (a)  Engage  in  any  business  activities
         substantially  different  than  those in which  Borrower  is  presently
         engaged, (b) cease operations,  liquidate,  merge, transfer, acquire or
         consolidate with any other entity,  change ownership,  change its name,
         dissolve or transfer or sell  Collateral out of the ordinary  course of
         business,  (c)  pay any  dividends  on  Borrower's  stock  (other  than
         dividends payable in its stock), provided, however that notwithstanding
         the foregoing, but only so long as no Event of Default has occurred and
         is  continuing  or would  result  from the  payment  of  dividends,  if
         Borrower is a  "Subchapter S  Corporation"  (as defined in the Internal
         Revenue Code of 1986, as amended),  Borrower may pay cash  dividends on
         its stock to its shareholders from time to time in amounts necessary to
         enable the  shareholders to pay income taxes and make estimated  income
         tax payments to satisfy their  liabilities  under federal and state law
         which arise solely from their status as  Shareholders of a Subchapter S
         Corporation  because of their ownership of shares of stock of Borrower,
         or (d) purchase or retire any of Borrower's outstanding shares or alter
         or amend Borrower's capital structure.

         Loans,  Acquisitions  and  Guaranties.  (a) Loan,  invest in or advance
         money or assets,  (b)  purchase,  create or acquire any interest in any
         other  enterprise or entity,  or (c) incur any  obligation as surety or
         guarantor other than in the ordinary course of business.

CESSATION OF  ADVANCES.  If Lender has made any  commitment  to make any Loan to
Borrower,  whether  under this  Agreement or under any other  agreement,  Lender
shall have no  obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the  Related  Documents  or any  other  agreement  that  Borrower  or any
Guarantor  has with Lender;  (b) Borrower or any  Guarantor  becomes  insolvent,
files a  petition  in  bankruptcy  or  similar  proceedings,  or is  adjudged  a
bankrupt;  (c) there occurs a material  adverse  change in Borrower's  financial
condition,  in the financial condition of any Guarantor,  or in the value of any
Collateral  securing  any Loan;  (d) any  Guarantor  seeks,  claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender; or (e) Lender in good faith deems itself insecure,  even
though no Event of Default shall have occurred.

RIGHT OF SETOFF.  Borrower grants to Lender a contractual  security interest in,
and hereby  assigns,  conveys,  delivers,  pledges,  and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's  accounts with Lender
(whether checking, savings, or some other account), including without limitation
all accounts  held jointly with someone else and all accounts  Borrower may open
in the  future,  excluding  however  all IRA and Keogh  accounts,  and all trust
accounts for which the grant of a security  interest would be prohibited by law.
Borrower authorizes Lender, to the extent permitted by applicable law, to charge
or setoff all sums owing on the Indebtedness  against any and all such accounts,
and, at Lender's option, to administratively  freeze all such accounts to Lender
to protect Lender's charge and setoff rights provided on this paragraph.

EVENTS OF DEFAULT.  Each of the following  shall  constitute an Event of Default
under this Agreement:

         Default on  Indebtedness.  Failure of Borrower to make any payment when
         due on the Indebtedness.

         Other Defaults. Failure of Borrower or any Grantor to comply with or to
         perform  when due any other term,  obligation,  covenant  or  condition
         contained  in this  Agreement  or in any of the Related  Documents,  or
         failure  of  Borrower  to comply  with or to  perform  any other  term,
         obligation  covenant  or  condition  contained  in any other  agreement
         between Lender and Borrower.

         Default  in Favor of Third  Parties.  Should  Borrower  or any  Grantor
         default  under any  loan,  extension  of  credit,  security  agreement,
         purchase or sales agreement,  or any other  agreement,  in favor of any
         other creditor or person that may  materially  affect any of Borrower's
         property or Borrower's  or any Grantor's  ability to repay the Loans or
         perform their respective obligations under this Agreement or any of the
         Related Documents.

         False  Statements.  Any warranty,  representation  or statement made or
         furnished  to Lender by or on behalf of Borrower  or any Grantor  under
         tries Agreement or the Related  Documents is false or misleading in any
         material  respect at the time made or  furnished,  or becomes  false or
         misleading at any time thereafter.

         Defective  Collateralization.  This  Agreement  or any  of the  Related
         Documents ceases to be in full force and effect  (including  failure of
         any  Security  Agreement  to  create  a valid  and  perfected  Security
         Interest) at any time and for any reason.

         Insolvency. The dissolution or termination of Borrower's existence as a
         going  business,  or a trustee or receiver is appointed for Borrower or
         for all or a substantial portion of the assets of Borrower, or Borrower
         makes a general assignment for the benefit of Borrower's creditors,  or
         Borrower files for bankruptcy, or an involuntary bankruptcy petition is
         filed  against   Borrower  and  such   involuntary   petition   remains
         undismissed for sixty (60) days.

         Creditor or Forfeiture  Proceedings.  Commencement  of  foreclosure  or
         forfeiture  proceedings,  whether by  judicial  proceeding,  self-help,
         repossession  or any other  method,  by any creditor of  Borrower,  any
         creditor  of  any  Grantor   against  any   collateral   securing   the
         Indebtedness,   or  by  any  governmental   agency.   This  includes  a
         garnishment,  attachment,  or levy on or of any of  Borrower's  deposit
         accounts with Lender.

         Events  Affecting  Guarantor.  Any of the preceding  events occurs with
         respect to any  Guarantor of any of the  Indebtedness  or any Guarantor
         dies or becomes incompetent, or revokes or disputes the validity of, or
         liability under, any Guaranty of the Indebtedness.

         Change In  Ownership.  Any change in ownership of  twenty-five  percent
         (25%) or more of the common stock of Borrower.

         Adverse  Change.   A  material  adverse  change  occurs  in  Borrower's
         financial  condition,  or Lender  believes  the  prospect of payment or
         performance of the Indebtedness is impaired.

         Insecurity.  Lender, in good faith, deems itself insecure.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related  Documents,  all commitments
and  obligations of Lender under this Agreement or the Related  Documents or any
other agreement  immediately  will terminate and, at Lender's  option,  all sums
owing in connection with the Loans,  including all principal,  interest, and all
other fees, costs and charges,  if any, will become immediately due and payable,
all without notice of any kind to Borrower,  except that in the case of an Event
of Default of the type  described in the  "Insolvency"  subsection  above,  such
acceleration shall be automatic and not optional. In addition, Lender shall have
all the rights and  remedies  provided in the Related  Documents or available at
law, in equity, or otherwise. Except as may be prohibited by applicable law, all
of  Lender's  rights  and  remedies  shall be  cumulative  and may be  exercised
singularly  or  concurrently.  Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy,  and an election to make expenditures or to
take action to perform an  obligation  of  Borrower or of any Grantor  shall not
affect  Lender's  right to  declare a default  and to  exercise  its  rights and
remedies.

MISCELLANEOUS  PROVISIONS.  The following miscellaneous provisions are a part of
this Agreement:

<PAGE>

10-23-1998                  BUSINESS LOAN AGREEEMENT                      Page 6
Loan No BL 14117                  (Continued)
================================================================================

         Amendments.  This  Agreement,  together  with  any  Related  Documents,
         constitutes the entire understanding and agreement of the parties as to
         the matters set forth in this Agreement.  No alteration of or amendment
         to this Agreement shall be effective unless given in writing and signed
         by the party or parties sought to be charged or bound by the alteration
         or amendment.

         Applicable  Law.  This  Agreement  shall be governed by,  construed and
         enforced in accordance  with the laws of the  Commonwealth of Virginia.
         Lender  and  Borrower  hereby  waive the right to any jury trial in any
         action, proceeding, or counterclaim brought by either party against the
         other.

         Caption   Headings.   Caption   headings  in  this  Agreement  are  for
         convenience purposes only and are not to be used to interpret or define
         the provisions of this Agreement.

         Multiple  Parties;  Corporate  Authority.  All  obligations of Borrower
         under this Agreement shall be joint and several,  and all references to
         Borrower  shall mean each and every  Borrower.  This means that each of
         the persons  signing below is responsible  for all  obligations in this
         Agreement.

         Consent to Loan Participation. Borrower agrees and consents to Lender's
         sale or transfer,  whether now or later,  of one or more  participation
         interests in the Loans to one or more  purchasers,  whether  related or
         unrelated  to  Lender.  Lender  may  provide,  without  any  limitation
         whatsoever, to any one or more purchasers, or potential purchasers, any
         information  or knowledge  Lender may have about  Borrower or about any
         other  matter  relating to the Loan,  and  Borrower  hereby  waives any
         rights to privacy it may have with  respect to such  matters.  Borrower
         additionally  waives  any and  all  notices  of  sale of  participation
         interests,   as  well  as  all  notices  of  any   repurchase  of  such
         participation  interests.  Borrower also agrees that the  purchasers of
         any such  participation  interests  will be  considered as the absolute
         owners of such  interests  in the  Loans  and will have all the  rights
         granted under the participation  agreement or agreements  governing the
         sale of such  participation  interests.  Borrower  further  waives  all
         rights of offset or counterclaim  that it may have now or later against
         Lender or against any  purchaser of such a  participation  interest and
         unconditionally agrees that either Lender or such purchaser may enforce
         Borrower's  obligation  under the Loans  irrespective of the failure or
         insolvency of any holder of any interest in the Loans. Borrower further
         agrees  that the  purchaser  of any such  participation  interests  may
         enforce its interests  irrespective  of any personal claims or defenses
         that Borrower may have against Lender.

         Costs and Expenses.  Borrower agrees to pay upon demand all of Lender's
         out-of-pocket expenses incurred in connection with this Agreement or in
         connection with the Loans made pursuant to this  Agreement.  Subject to
         any limits  under  applicable  law, if Lender hires an attorney to help
         enforce this Agreement or to collect any Indebtedness,  Borrower agrees
         to pay Lender's attorney fees equal to 10.000% of the principal balance
         due on the Note, and all of Lender's other collection expenses, whether
         or not there is a lawsuit and including  legal  expenses for bankruptcy
         proceedings.

         Notices. All notices required to be given under this Agreement shall be
         given  in  writing,  may be sent  by  telefacsimile  (unless  otherwise
         required by law),  and shall be effective  when  actually  delivered if
         hand delivered or when deposited with a nationally recognized overnight
         courier or  deposited as  certified  or  registered  mail in the United
         States mail, first class,  postage  prepaid,  addressed to the party to
         whom the notice is to be given at the address  shown  above.  Any party
         may change its  address  for  notices  under this  Agreement  by giving
         format written notice to the other parties, specifying that the purpose
         of the notice is to change the party's address. To the extent permitted
         by applicable  law, if there is more than one  Borrower,  notice to any
         Borrower will constitute notice to all Borrowers.  For notice purposes,
         Borrower will keep Lender  informed at all times of Borrower's  current
         address(es).

         Severability.  If a court of competent jurisdiction finds any provision
         of this  Agreement to be invalid or  unenforceable  as to any person or
         circumstance,  such finding shall not render that provision  invalid or
         unenforceable  as to any other persons or  circumstances.  If feasible,
         any such  offending  provision  shall be  deemed to be  modified  to be
         within  the  limits of  enforceability  or  validity;  however,  if the
         offending provision cannot be so modified, it shall be stricken and all
         other  provisions of this  Agreement in all other respects shall remain
         valid and enforceable.

         Subsidiaries  and Affiliates of Borrower.  To the extent the context of
         any  provisions  of this  Agreement  makes  it  appropriate,  including
         without limitation any representation,  warranty or covenant,  the word
         "Borrower" as used herein shall include all subsidiaries and affiliates
         of  Borrower.   Notwithstanding   the  foregoing   however,   under  no
         circumstances  shall this  Agreement be construed to require  Lender to
         make any Loan or other  financial  accommodation  to any  subsidiary or
         affiliate of Borrower.

         Successors and Assigns. All covenants and agreements contained by or on
         behalf of  Borrower  shall bind its  successors  and  assigns and shall
         inure to the benefit of Lender,  its successors  and assigns.  Borrower
         shall not,  however,  have the right to assign  its  rights  under this
         Agreement or any interest therein, without the prior written consent of
         Lender.

         Survival. All warranties,  representations,  and agreements of Borrower
         in this  Agreement  shall  survive  the  making  of the  Loan or  Loans
         contemplated  hereby,  and shall be deemed made and redated by Borrower
         at the time of the making of each disbursement of Loan proceeds.

         Time Is of the Essence.  Time is of the essence in the  performance  of
         this Agreement.

         Waiver.  Indulgence  by  Lender  with  respect  to any of the terms and
         conditions  of this  Agreement or the failure of Lender to exercise any
         of its  rights  under  this  Agreement  shall not  constitute  a waiver
         thereof, and Borrower shall remain liable for the strict performance of
         such terms and conditions until this Agreement shall be terminated.  No
         provision of this Agreement may be waived or modified  orally,  but all
         such waivers or modifications shall be in writing. Whenever the consent
         of Lender is  required  under  this  Agreement,  the  granting  of such
         consent  by  Lender  in one  instance  shall  not  constitute  Lender's
         continuing  consent  in  subsequent  instances,  and in all cases  such
         consent may be granted or withheld in the sole discretion of Lender.



<PAGE>

10-23-1998                  BUSINESS LOAN AGREEEMENT                      Page 7
Loan No BL 14117                  (Continued)
================================================================================

THIS BUSINESS LOAN  AGREEMENT IS SIGNED,  SEALED AND DELIVERED  EFFECTIVE IN ALL
RESPECTS AS OF OCTOBER 23,1998.

BORROWER:
SPURLOCK ADHESIVES, INCORPORATED

<TABLE>
<CAPTION>
<S>                                              <C>
By:    /s/ Phillip S. Sumpter           (SEAL)   By       /s/ Larry C. Birkholz            (SEAL)
    ------------------------------------            ---------------------------------------
    Phillip S. SUMPTER, Chairman & CEO              LARRY C. BURKHOLTZ (sic), Corporate Controller
</TABLE>


LENDER:
JAMES RIVER BANK


By:_________________________________________
      Authorized Officer