Exhibit 10.36

                               SECURITY AGREEMENT
                               ------------------
                                                    Date:  As of October 1, 1997


         The undersigned,  SPURLOCK ADHESIVES, INC., a Virginia corporation with
an office for the  transaction  of  business  at 5090  General  Mahone  Highway,
Waverly, Virginia 23890 (herein referred to as "Debtor"), hereby agrees in favor
of KEYBANK NATIONAL  ASSOCIATION,  a national banking association with an office
for the transaction of business at 66 South Pearl Street, Albany, New York 12207
(herein referred to as "Secured Party"), as follows:

         1.     THE  INDEBTEDNESS.  In  consideration of (i) the issuance by the
Secured Party of a letter of credit in the amount of $6,180,822  (the "Letter of
Credit")  in favor of Star  Bank,  N.A.,  as  Trustee  (the  "Trustee")  and the
obligations  of Debtor to make  payments to the  Secured  Party as outlined in a
Letter  of  Credit  Reimbursement  Agreement  dated as of  October  1, 1997 (the
"Reimbursement   Agreement")  and  (ii)  the  loan  evidenced  by  that  certain
$1,500,000  Promissory  Note (the "Term Loan  Note"),  Debtor  hereby  grants to
Secured Party a continuing  security interest in and a right of set-off against,
and  Debtor  hereby  assigns to  Secured  Party,  the  Collateral  described  in
Paragraph  2,  to  secure  the  payment,   performance  and  observance  of  the
indebtedness,  obligations,  liabilities and agreements of any kind of Debtor to
the Secured  Party,  now  existing or  hereafter  arising,  direct or  indirect,
absolute or  contingent,  secured or  unsecured,  due or not,  arising out of or
relating to the Reimbursement Agreement, the Term Loan Note and any of the other
Financing  Documents (as that term is defined in a Trust  Indenture  dated as of
October 1, 1997 (the  "Indenture")  between  the County of  Saratoga  Industrial
Development Agency (the "Issuer") and the Trustee) (the "Obligations").

         2.     THE  COLLATERAL.  The  Collateral  is  described on Schedule "A"
annexed hereto as part hereof and also includes all attachments,  accessions and
equipment  now or  hereafter  affixed to the  Collateral  or used in  connection
therewith,  substitutions and replacements therefor, all items of Collateral now
owned or existing and hereafter acquired,  created or arising,  and all proceeds
thereof (including,  without limitation,  claims of Debtor against third parties
for loss or damage to or destruction of any Collateral).

         3.     WARRANTIES,  REPRESENTATIONS  AND  COVENANTS.  Debtor  warrants,
represents and covenants that:

                (a)    The chief  executive  office and other places of business
         of Debtor,  the  Collateral  and the books and records  relating to the
         Collateral are, and have been during the four month period prior to the
         date  hereof  (or in the  case  of a new  business,  from  the  date of
         commencement  of said  business),  located at the address(es) set forth
         below and Debtor will not change the same, or merge or consolidate with
         any  person or change its name,  without  prior  written  notice to and
         consent of the Secured Party:


<PAGE>



         Addresses:

         5090 General Mahone Highway
         Waverly, Virginia  23890

         Lot 3, Farnam Road
         Moreau Industrial Park
         Moreau, New York  12803

         Route 3, Highway 171
         Malvern, Arkansas  72104

                (b)    Debtor will use the  Collateral  for lawful and  business
         purposes only,  with all reasonable  care and caution and in conformity
         with all applicable laws, ordinances and regulations;

                (c)    Debtor will keep the  Collateral  in first  class  order,
         repair,   running  and  marketable  condition  (normal  wear  and  tear
         excepted), at Debtor's sole cost and expense;

                (d)    The Secured Party shall at all reasonable times have free
         access to and right of  inspection  of the  Collateral  and any records
         pertaining  thereto (and the right to make extracts from and to receive
         from Debtor originals or true copies of such records and any papers and
         instruments  relating to any  Collateral  upon  request  therefor)  and
         Debtor hereby  grants to the Secured  Party a security  interest in all
         such records, papers and instruments to secure the payment, performance
         and observance of the Obligations;

                (e)    The Collateral is now and shall remain personal property,
         is not now a fixture and Debtor will not permit any Collateral which is
         not now a fixture to become a fixture  without prior written  notice to
         and  consent  of  the  Secured  Party  and  without  first  making  all
         arrangements,  and  delivering,  or  causing  to be  delivered,  to the
         Secured  Party  all  instruments  and  documents,   including,  without
         limitation,  waivers and  subordination  agreements by any landlords or
         mortgagees,  requested  by and  satisfactory  to the  Secured  Party to
         preserve  and protect  the primary  security  interest  granted  herein
         against all persons;

                (f)    Debtor,  at its sole cost and  expense,  will  insure the
         Collateral in the name of and with loss or damage payable solely to the
         Secured  Party,  as its interest may appear,  against such risks,  with
         such  companies  and  in  such  amounts,  as  may  be  required  by the
         Installment  Sale  Agreement (as defined in the  Indenture)  and Debtor
         will deliver to the Secured  Party the original or duplicate  policies,
         or  certificates  or other evidence  satisfactory  to the Secured Party
         attesting thereto, and Debtor will promptly notify the Secured Party of
         any loss or damage to any Collateral or arising from its use;


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<PAGE>

                (g)    Debtor  will,  at its sole cost and  expense,  and at all
         times,  pay and discharge all taxes and  assessments in accordance with
         the terms of the  Installment  Sale  Agreement and keep the  Collateral
         free  and  clear  of  any  and  all  liens,   security   interests   or
         encumbrances,   other  than   Permitted   Liens  (as   defined  in  the
         Reimbursement  Agreement),  perform all acts and execute all  documents
         requested by the Secured Party from time to time to evidence,  perfect,
         maintain or enforce  the  Secured  Party's  primary  security  interest
         granted  herein or otherwise in  furtherance  of the provisions of this
         Security Agreement;

                (h)    At any time and from time to time,  Debtor shall,  at its
         sole cost and  expense,  execute and deliver to the Secured  Party such
         financing  statements  pursuant to the Uniform Commercial Code ("UCC"),
         applications  for  certificate of title and other papers,  documents or
         instruments as may be requested by the Secured Party in connection with
         this Security Agreement, and Debtor hereby authorizes the Secured Party
         to  execute  and file at any  time  and  from  time to time one or more
         financing  statements or copies  thereof or of this Security  Agreement
         with respect to the Collateral signed only by the Secured Party;

                (i)    In its discretion, the Secured Party may, at any time and
         from  time to  time,  after a  Default  (as  hereinafter  defined)  has
         occurred  and is  continuing,  in its name or  Debtor's  or  otherwise,
         notify  any  account  debtor  or  obligor  of  any  account,  contract,
         document,  instrument,  chattel paper or general intangible included in
         the Collateral to make payment to the Secured Party;

                (j)    In its  discretion,  Secured  Party may,  at any time and
         from time to time,  after a Default  has  occurred  and is  continuing,
         demand,  sue for,  collect or receive any money or property at any time
         payable or  receivable  on account of or in  exchange  for, or make any
         compromise or settlement deemed desirable by Secured Party with respect
         to, any  Collateral,  and/or  extend the time of  payment,  arrange for
         payment in installments,  or otherwise modify the terms of, or release,
         any  Collateral  or  Obligations,  all without  notice to or consent by
         Debtor and without otherwise  discharging or affecting the Obligations,
         the Collateral or the security interest granted herein;

                (k)    In its  discretion,  Secured  Party may,  at any time and
         from time to time, for the account of Debtor,  pay any amount or do any
         act required of Debtor  hereunder  and which Debtor fails to do or pay,
         and any such  payment  shall be deemed an advance  by Secured  Party to
         Debtor  payable on demand  together  with  interest at the highest rate
         then payable on any of the Obligations;

                (l)    Debtor will pay Secured  Party for any sums,  costs,  and
         expenses  which  Secured  Party  may  pay  or  incur  pursuant  to  the
         provisions of this  Security  Agreement or in  negotiating,  executing,
         perfecting,  defending,  or protecting  the security  interest  granted
         herein or in  enforcing  payment of the  Obligations  or  otherwise  in
         connection  with the  provisions  hereof,  including but not limited to
         court costs, collection charges, travel


                                        3

<PAGE>

         expenses,  and reasonable  attorneys' fees, all of which, together with
         interest at the highest  rate then  payable on any of the  Obligations,
         shall be part of the Obligations and be payable on demand;

                (m)    All proceeds of any other  Collateral  received by Debtor
         after the  occurrence of a Default  shall not be commingled  with other
         property of Debtor,  but shall be  segregated,  held by Debtor in trust
         for Secured Party,  and  immediately  delivered to Secured Party in the
         form received,  duly endorsed in blank where  appropriate to effectuate
         the  provisions  hereof,  the  same  to be  held by  Secured  Party  as
         additional  Collateral  hereunder or, at Secured Party's option,  to be
         applied to payment  of the  Obligations,  whether or not due and in any
         order; and

                (n)    In its sole  discretion,  Secured  Party may, at any time
         and from time to time, assign, transfer or deliver to any transferee of
         any Obligations, any Collateral, whereupon Secured Party shall be fully
         discharged from all  responsibility  and the transferee shall be vested
         with all  powers and rights of Secured  Party  hereunder  with  respect
         thereto,  but  Secured  Party  shall  retain all rights and powers with
         respect to any Collateral not assigned, transferred or delivered.

         4.     DEFAULT.  It shall  constitute  an event of default  ("Default")
under this Security  Agreement if an Event of Default shall have occurred  under
any of the  Financing  Documents  or if any one or more of the  following  shall
occur:

                (a)    Debtor  fails  to  perform  any  covenant,  agreement  or
         obligation  contained  in this  Security  Agreement  and  such  failure
         remains  unremedied  for thirty  (30)  calendar  days after the Secured
         Party shall have given written  notice  thereof to Debtor,  or, if such
         covenant, condition or agreement is capable of cure but cannot be cured
         within  such  thirty  (30) day  period,  the  failure  of the Debtor to
         commence to cure  within  such  thirty  (30) day period and  thereafter
         diligently  proceed  with all action  required  to  complete  said cure
         within ninety (90) days of such written notice unless such time to cure
         is otherwise extended by the Secured Party in writing; or

                (b)    Except  as  permitted  by the  Financing  Documents,  the
         Collateral shall be subjected to sale, transfer or other disposition or
         any  lien,   encumbrance  or  other  imposition  is  placed  upon  said
         Collateral; or

                (c)    Except as permitted by the Financing Documents, any levy,
         seizure, attachment, condemnation, forfeiture or other proceeding shall
         be brought against or with respect to the Collateral.

         5.     REMEDIES.  Upon the  occurrence  of any  Default and at any time
thereafter,  Secured Party shall have the following  rights and remedies (to the
extent  permitted by applicable law) in addition to all rights and remedies of a
secured party under the UCC or of Secured Party


                                        4

<PAGE>

under the  Obligations,  all such  rights and  remedies  being  cumulative,  not
exclusive and enforceable alternatively, successively or concurrently:

                (a)    Secured Party may at any time and from time to time, with
         or without  judicial  process or the aid and assistance of others,  but
         without causing a breach of the peace, enter upon any premises in which
         any Collateral may be located and,  without  resistance or interference
         by Debtor,  take  possession of the  Collateral;  and/or dispose of any
         Collateral on any such premises;  and/or require Debtor to assemble and
         make available to Secured Party at the expense of Debtor any Collateral
         at any place and time  designated  by Secured Party which is reasonably
         convenient to both parties;  and/or remove any Collateral from any such
         premises for the purpose of effecting sale or other disposition thereof
         (and if any of the Collateral consists of motor vehicles, Secured Party
         may use Debtor's license plates);  and/or sell, resell,  lease,  assign
         and deliver,  grant options for or otherwise  dispose of any Collateral
         in  its  then  condition  or  following  any  commercially   reasonable
         preparation or processing,  at public or private sale or proceedings or
         otherwise,  by one or more  contracts,  in one or more parcels,  at the
         same or different  times,  with or without having the Collateral at the
         place of sale or other  disposition,  for cash and/or credit,  and upon
         any terms,  at such  place(s)  and  time(s)  and to such  person(s)  as
         Secured Party deems best, all without demand,  notice or  advertisement
         whatsoever except that where an applicable statute requires  reasonable
         notice  of sale or other  disposition  Debtor  hereby  agrees  that the
         sending of ten days' notice by ordinary mail,  postage prepaid,  to any
         address of Debtor set forth in this Security  Agreement shall be deemed
         reasonable  notice thereof.  If any Collateral is sold by Secured Party
         upon credit or for future  delivery,  Secured Party shall not be liable
         for the  failure  of the  purchaser  to pay for same and in such  event
         Secured  Party may resell such  Collateral.  Secured  Party may buy any
         Collateral  at any  public  sale and,  if any  Collateral  is of a type
         customarily sold in a recognized  market or is of the type which is the
         subject of widely distributed standard price quotations,  Secured Party
         may buy such  Collateral  at  private  sale  and in each  case may make
         payment  therefor  by any  means.  Secured  Party  may  apply  the sale
         proceeds  actually  received from any sale or other  disposition to the
         reasonable expenses of retaking,  holding, preparing for sale, selling,
         leasing  and the like,  to  reasonable  attorneys'  fees and all legal,
         travel and other  expenses  which may be incurred  by Secured  Party in
         attempting  to  collect  the   Obligations  or  enforce  this  Security
         Agreement or in the  prosecution or defense of any action or proceeding
         related to the subject matter of this Security  Agreement;  and then to
         the  Obligations  in such  order and as to  principal  or  interest  as
         Secured  Party may desire;  and Debtor shall remain liable and will pay
         Secured  Party  on  demand  any  deficiency  remaining,  together  with
         interest  thereon at the highest rate then  payable on the  Obligations
         and the balance of any expenses unpaid,  with any surplus to be paid to
         Debtor,  subject  to any duty of  Secured  Party  imposed by law to the
         holder of any subordinate  security interest in the Collateral known to
         Secured Party;

                (b)    Secured Party may  appropriate,  set off and apply to the
         payment  of the  Obligations,  any  Collateral  in or  coming  into the
         possession of Secured Party or its


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<PAGE>

         agents,  without  notice to Debtor and in such manner as Secured  Party
         may in its discretion determine.

         6.     DESIGNATION  AND  AUTHORIZATION.  To  effectuate  the  terms and
provisions hereof,  Debtor hereby designates and appoints Secured Party and each
of its designees or agents as attorney-in-fact  of Debtor,  irrevocably and with
power of substitution,  with authority,  after the occurrence of a Default,  to:
endorse  the name of Debtor on any notes,  acceptances,  checks,  drafts,  money
orders,  instruments or other evidences of Collateral that may come into Secured
Party's possession;  sign the name of Debtor on any invoices,  documents, drafts
against and notices to account  debtors or obligors of Debtor,  assignments  and
requests for verification of accounts; execute proofs of claim and loss; execute
endorsements, assignments of other instruments of conveyance or transfer; adjust
and  compromise  any claims  under  insurance  policies  or  otherwise;  execute
releases;  and do all other acts and things  necessary  or advisable in the sole
discretion of Secured Party to carry out and enforce this Security  Agreement or
the Obligations.  All acts done under the foregoing  authorization,  except acts
constituting  gross negligence or willful  misconduct on the part of the Secured
Party,  are hereby  ratified  and  approved  and neither  Secured  Party nor any
designee  or agent  thereof  shall be  liable  for such  acts of  commission  or
omission,  for any error of  judgment  or for any  mistake of fact or law.  This
power of  attorney  being  coupled  with an interest  is  irrevocable  while any
Obligations shall remain unpaid.

         7.     PRESERVATION  AND  DISPOSITION  OF  COLLATERAL;   MISCELLANEOUS.
Secured Party shall have the duty to exercise reasonable care in the custody and
preservation  of any  Collateral  in its  possession,  which duty shall be fully
satisfied if Secured Party maintains safe custody of such Collateral.  Except as
hereinabove  specifically set forth, Secured Party shall not be deemed to assume
any other  responsibility  for,  or  obligation  or duty with  respect  to,  any
Collateral,  or its use,  of any nature or kind,  or any  matter or  proceedings
arising  out  of  or  relating  thereto,  including,   without  limitation,  any
obligation  or duty to take any action to  collect,  preserve  or protect its or
Debtor's rights in the Collateral or against any prior parties thereto,  but the
same shall be at  Debtor's  sole risk and  responsibility  at all times.  Debtor
hereby releases  Secured Party from any claims,  causes of action and demands at
any  time  arising  out of or with  respect  to  this  Security  Agreement,  the
Obligations,  the  Collateral and its use and/or any actions taken or omitted to
be taken by Secured Party with respect thereto, and Debtor hereby agrees to hold
Secured Party harmless from and with respect to any and all such claims,  causes
of action and demands.  Secured  Party's prior recourse to any Collateral  shall
not  constitute a condition  of any demand,  suit or  proceeding  for payment or
collection of the Obligations.  No act, omission or delay by Secured Party shall
constitute a waiver of its rights and remedies hereunder or otherwise. No single
or partial  waiver by Secured  Party of any Default or right or remedy  which it
may have shall operate as a waiver of any other  Default,  right or remedy or of
the same  Default,  right or remedy on a future  occasion.  Debtor hereby waives
presentment,  notice of dishonor and protest of all  instruments  included in or
evidencing  any  Obligations  or  Collateral,  and all other notices and demands
whatsoever (except as expressly provided herein). In the event of any litigation
with  respect  to  any  matter  connected  with  this  Security  Agreement,  the
Obligations or the Collateral, Debtor hereby waives


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<PAGE>

the right to a trial by jury and all  defenses,  rights of set-off and rights to
interpose counterclaims of any nature. Debtor hereby irrevocably consents to the
jurisdiction  of the  Courts of the State of New York and of any  Federal  Court
located in such State in connection with any action or proceeding arising out of
or relating to the Obligations,  this Security  Agreement or the Collateral,  or
any document or  instrument  delivered  with respect to any of the  Obligations.
Debtor hereby waives personal service of any process in connection with any such
action  or  proceeding  and  agrees  that  the  service  thereof  may be made by
certified  or  registered  mail  directed to Debtor at any address of Debtor set
forth in this  Security  Agreement.  Debtor so served  shall appear or answer to
such process within thirty (30) days after the mailing thereof. Should Debtor so
served fail to appear or answer within said thirty (30) day period, Debtor shall
be deemed in default and judgment may be entered by Secured Party against Debtor
for the amount or such other relief as may be demanded in any process so served.
In the  alternative,  in its  discretion,  Secured Party may effect service upon
Debtor in any other form or manner permitted by law. All capitalized  terms used
and not otherwise defined shall have the meanings set forth in the reimbursement
agreement  and other terms herein shall have the meanings as defined in the UCC,
unless the context  otherwise  requires.  No provision hereof shall be modified,
altered or limited except by a written  instrument  expressly  referring to this
Security  Agreement  and to such  provision,  and  executed  by the  party to be
charged.  This Security  Agreement and all Obligations shall be binding upon the
successors,  or  assigns  of Debtor  and  shall,  together  with the  rights and
remedies of Secured Party  hereunder,  inure to the benefit of Secured Party and
its  successors,   endorsees  and  assigns.  This  Security  Agreement  and  the
Obligations  shall be governed  in all  respects by the laws of the State of New
York applicable to contracts  executed and to be performed in such State. If any
term  of this  Security  Agreement  shall  be held  to be  invalid,  illegal  or
unenforceable,  the  validity  of all  other  terms  hereof  shall  in no way be
affected  thereby.  Secured  Party is  authorized  to annex hereto any schedules
referred  to herein.  Debtor  acknowledges  receipt  of a copy of this  Security
Agreement.

         IN  WITNESS  WHEREOF,  the  undersigned  has  executed  or caused  this
Security  Agreement to be executed in the State of New York as of the date first
above set forth.

                                         SPURLOCK ADHESIVES, INC.


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



                                        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


01294\secagr.rev

                                        8

<PAGE>

                                   SCHEDULE A

                           (DESCRIPTION OF COLLATERAL)

         All of the Debtor's present and future personal property of every kind,
nature and  description,  wherever  located,  and to the full extent of Debtor's
interest  therein  including  but not limited  to:  accounts;  contract  rights;
chattel paper;  general  intangibles  (including but not limited to tax refunds,
insurance  proceeds,  patents  and patent  applications,  copyrights,  licenses,
trademarks, trade names, customer lists, rights of indemnification, contribution
and subrogation,  royalties, computer programs, tapes and software, deposits and
know-how)  instruments;  documents and documents of title; letters of credit and
all of  Debtor's  interest  in letters of  credit;  inventory  of every kind and
nature and wherever located,  including but not limited to, raw materials,  work
in process,  finished goods,  consigned goods to the extent of Debtor's interest
therein,  packing  materials and advertising  materials;  automotive  equipment;
machinery   and  equipment  and  all   additions,   accessions,   substitutions,
replacements, parts and fuel in respect to the same, all Debtor's rights against
suppliers,  manufacturers or maintainers of the same, all manuals, drawings, and
materials relating thereto to and for the same; furniture;  fixtures; equipment;
and all records and files relating to all of the foregoing,  all of the Debtor's
property of any kind in the  possession  of, or under the custody or control of,
Secured  Party or any  affiliate or  correspondent  of Secured Party or in which
Secured Party or any affiliate may have a security  interest or title  retention
interest; all permits,  licenses,  certificates,  approvals,  authorizations and
agreements  issued to, used, or owned by Debtor in connection with the operation
of its business;  and all proceeds of all of the  foregoing,  including  deposit
accounts.

         All of the terms set forth in this Schedule "A" shall have the meanings
set  forth in the New York  Uniform  Commercial  Code as in  effect  on the date
hereof.


01294\security.agr

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