<PAGE>

                               BUSINESS LOAN AGREEMENT
<TABLE>
<CAPTION>
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 PRINCIPAL     LOAN DATE     MATURITY     LOAN NO   CALL   COLLATERAL   ACCOUNT   OFFICER   INITIALS
<S>           <C>           <C>           <C>       <C>    <C>         <C>        <C>       <C>
$315,000.00   04-01-1998    04-05-2003     9003               305      E 121729    TLH12
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     References 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.
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</TABLE>
<TABLE>
<S>            <C>                           <C>       <C>
BORROWER:      R-B RUBBER PRODUCTS, INC.     LENDER:   KEYBANK NATIONAL ASSOCIATION
               904 EAST 10TH AVENUE                    WILLAMETTE VALLEY COMMERCIAL BANKING CENTER,
               MCMINNVILLE, OR 97128                   SALEM
                                                       416 STATE STREET
                                                       P.O. BOX 2246  OR-20-96-0158
                                                       SALEM, OR 97308
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</TABLE>
THIS BUSINESS LOAN AGREEMENT BETWEEN R-B RUBBER PRODUCTS, INC. ("BORROWER") AND
KEYBANK NATIONAL ASSOCIATION ("LENDER") IS MADE AND EXECUTED 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 APRIL 1, 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 R-B RUBBER PRODUCTS, INC.. 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.

     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.

     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."

     GRANTOR. 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, including without limitation all Borrowers
     granting such a Security Interest.

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

     INDEBTEDNESS. The word "Indebtedness" means and includes without limitation
     all Loans, together with all other obligations, debts and liabilities of
     Borrower to Lender, or any one or more of them, as well as all claims by
     Lender against Borrower, or any one or more of them; whether now or
     hereafter existing, voluntary or involuntary, due or not due, absolute or
     contingent, liquidated or unliquidated; whether Borrower may be liable
     individually or jointly with others; whether Borrower may be obligated as a
     guarantor, surety, or otherwise; whether recovery upon such Indebtedness
     may be or hereafter may become barred by any statute of limitations; and
     whether such Indebtedness may be or hereafter may become otherwise
     unenforceable.

     LENDER. The word "Lender" means KEYBANK NATIONAL ASSOCIATION, its
     successors and assigns.

     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 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 type of collateral security, whether in the form of a lien,

<PAGE>

04-01-1998                  BUSINESS LOAN AGREEMENT                       PAGE 2
LOAN NO 9003                     (CONTINUED)
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     charge, mortgage, deed of trust, assignment, pledge, chattel mortgage,
     chattel trust, factor's lien, equipment trust, conditional sale, trust
     receipt, 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.

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

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 state of Borrower's
     incorporation 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 or intended to protect human
     health or the environment ("Environmental Laws"). 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 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 Environmental Laws. 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 occurring prior to Borrower's
     ownership or interest in the properties, whether or not the same was or
     should have been known to Borrower, or as a result of a violation of any
     Environmental Laws. 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

<PAGE>

04-01-1998                  BUSINESS LOAN AGREEMENT                       PAGE 3
LOAN NO 9003                     (CONTINUED)
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     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 904 EAST 10TH AVENUE, MCMINNVILLE, OR 97128.
     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 one hundred twenty (120) 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 forty five (45) 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.

     INSURANCE. Maintain fire and other risk insurance, public liability
     insurance, and such other insurance as Lender may require with respect to
     Borrower's properties and operations, in form, amounts, coverages and with
     insurance companies reasonably 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 ten (10) 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 legality 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

<PAGE>

04-01-1998                  BUSINESS LOAN AGREEMENT                       PAGE 4
LOAN NO 9003                     (CONTINUED)
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     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.

     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; or (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.

ADDITIONAL DEFINITIONS.

ADJUSTED TANGIBLE CAPITAL means Tangible Capital less investments in, advances
to, promissory notes and any receivables from, any affiliate or other related
entity of Borrower.

CAPITAL EXPENDITURES means current period net fixed assets less prior period net
fixed assets, plus current period depreciation.

CASH FLOW means net income after taxes, and exclusive of extraordinary gains and
income, plus depreciation and amortization.

CURRENT ASSETS shall be as defined by GAAP, minus prepaid expenses.

CURRENT LIABILITIES shall be as defined by GAAP

DEBT means all of Borrower's liabilities excluding Subordinated Debt

EBITDA means, calculated for the period of the previous four fiscal quarters,
the net earnings of Borrower plus the aggregate amounts deducted in determining
such net income in respect of interest expenses, taxes, depreciation and
amortization; but not, however, giving effect to extraordinary losses or gains
in calculating net income.

FIXED CHARGES means interest expense plus lease expense, current maturities of
long-term debt and current maturities of capital leases.

FUNDED DEBT means all interest bearing term loan Debt or capital lease payments
of Borrower having a maturity of greater than one year.

LIQUID ASSETS means Borrower's cash on hand plus Borrower's readily marketable
securities.

OPERATING CASH FLOW means net income after taxes, and exclusive of extraordinary
gains, gains on asset sales, and other income, plus depreciation and
amortization, plus interest expense, plus lease expense, less dividends, and
distributions.

SUBORDINATED DEBT means indebtedness and liabilities of Borrower which have been
subordinated by written agreement to indebtedness owned by Borrower to Lender in
form and substance acceptable to Lender.

TANGIBLE CAPITAL means Tangible Net Worth plus Subordinated Debt

<PAGE>

04-01-1998                  BUSINESS LOAN AGREEMENT                       PAGE 5
LOAN NO 9003                     (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

TANGIBLE NET WORTH means 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.

TOTAL FIXED CHARGES means interest expense, plus current maturities of long-term
debt and current maturities of capital leases, plus lease expenses. plus
preferred stock dividends, plus Capital Expenditures.

TOTAL LIQUID ASSETS means Borrower's cash on hand plus Borrower's readily
marketable securities, plus Borrower's net trade accounts receivable.

TOTAL SENIOR LIABILITIES means total liabilities less Subordinated Debt.

UNENCUMBERED LIQUIDITY means the sum of unpledged cash, stocks, bonds, and other
near cash investments held in a person's name and immediately available with
unimpaired value; but not including pledged assets, IRA, 401(k), annuity or
trust accounts.

WORKING CAPITAL means Borrower's current assets, excluding prepaid expenses,
less Borrower's current liabilities.

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 Loans.

     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 this
     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, the insolvency of Borrower, the appointment of a receiver
     for any part of Borrower's property, any assignment for the benefit of
     creditors, any type of creditor workout, or the commencement of any
     proceeding under any bankruptcy or insolvency laws by or against Borrower.

     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. However, this Event of
     Default shall not apply if there is a good faith dispute by Borrower or
     Grantor, as the case may be, as to the validity or reasonableness of the
     claim which is the basis of the creditor or forfeiture proceeding, and if
     Borrower or Grantor gives Lender written notice of the creditor or
     forfeiture proceeding and furnishes reserves or a surety bond for the
     creditor or forfeiture proceeding satisfactory to 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. Lender, at its option, may, but
     shall not be required to, permit the Guarantor's estate to assume
     unconditionally the obligations arising under the guaranty in a manner
     satisfactory to Lender, and, in doing so, cure the Event of Default.

     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.

     RIGHT TO CURE. If any default, other than a Default on Indebtedness, is
     curable and if Borrower or Grantor, as the case may be, has not been given
     a notice of a similar default within the preceding twelve (12) months, it
     may be cured (and no Event of Default will have occurred) if Borrower or
     Grantor, as the case may be, after receiving written notice from Lender
     demanding cure of such default: (a) cures the default within fifteen (15)
     days; or (b) if the cure requires more than fifteen (15) days, immediately
     initiates steps which Lender deems in Lender's sole discretion to be
     sufficient to cure the default and thereafter continues and completes all
     reasonable and necessary steps sufficient to produce compliance as soon as
     reasonably practical.

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
Indebtedness immediately will become 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:

     AMENDMENTS. This Agreement, together with any Related Documents,
     constitutes the entire and final 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 HAS BEEN DELIVERED TO LENDER AND ACCEPTED BY
     LENDER IN THE STATE OF OREGON. IF THERE IS A LAWSUIT, BORROWER AGREES UPON
     LENDER'S REQUEST TO SUBMIT TO THE JURISDICTION OF THE COURTS OF MULTNOMAH
     COUNTY, THE STATE OF OREGON. LENDER AND BORROWER HEREBY WAIVE THE RIGHT TO
     ANY JURY TRIAL IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER
     LENDER OR BORROWER AGAINST THE OTHER. THIS AGREEMENT SHALL BE GOVERNED BY
     AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OREGON.

     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.

     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

<PAGE>

04-01-1998                  BUSINESS LOAN AGREEMENT                       PAGE 6
LOAN NO 9003                     (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

     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
     expenses, including without limitation attorneys' fees, incurred in
     connection with the preparation, execution, enforcement, modification and
     collection of this Agreement or in connection with the Loans made pursuant
     to this Agreement. Lender may pay someone else to help collect the Loans
     and to enforce this Agreement, and Borrower will pay that amount. This
     includes, subject to any limits under applicable law, Lender's attorneys'
     fees and Lender's legal expenses, whether or not there is a lawsuit,
     including attorneys' fees for bankruptcy proceedings (including efforts to
     modify or vacate any automatic stay or injunction), appeals, and any
     anticipated post-judgment collection services. Borrower also will pay any
     court costs, in addition to all other sums provided by law.

     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 or when deposited
     with a nationally recognized overnight courier or deposited 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 formal 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 covenants made by Borrower
     in this Agreement or in any certificate or other instrument delivered by
     Borrower to Lender under this Agreement shall be considered to have been
     relied upon by Lender and will survive the making of the Loan and delivery
     to Lender of the Related Documents, regardless of any investigation made by
     Lender or on Lender's behalf.

     WAIVER. Lender shall not be deemed to have waived any rights under this
     Agreement unless such waiver is given in writing and signed by Lender. No
     delay or omission on the part of Lender in exercising any right shall
     operate as a waiver of such right or any other right. A waiver by Lender of
     a provision of this Agreement shall not prejudice or constitute a waiver of
     Lender's right otherwise to demand strict compliance with that provision or
     any other provision of this Agreement. No prior waiver by Lender, nor any
     course of dealing between Lender and Borrower, or between Lender and any
     Grantor, shall constitute a waiver of any of Lender's rights or of any
     obligations of Borrower or of any Grantor as to any future transactions.
     Whenever the consent of Lender is required under this Agreement, the
     granting of such consent by Lender in any instance shall not constitute
     continuing consent in subsequent instances where such consent is required,
     and in all cases such consent may be granted or withheld in the sole
     discretion of Lender.

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY US (LENDER)
AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY US TO BE
ENFORCEABLE.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF APRIL
1, 1998.

BORROWER:

R-B RUBBER PRODUCTS, INC.


By: /s/ Ronald L. Bogh
    -------------------------
    RONALD L. BOGH, PRESIDENT

LENDER:

KEYBANK NATIONAL ASSOCIATION


By: /s/ [ILLEGIBLE]
    ------------------
    AUTHORIZED OFFICER
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>
 
                                   PROMISSORY NOTE
 
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
 PRINCIPAL     LOAN DATE     MATURITY     LOAN NO   CALL   COLLATERAL   ACCOUNT   OFFICER   INITIALS
<S>           <C>           <C>           <C>       <C>    <C>         <C>        <C>       <C>
$315,000.00   04-01-1998    04-05-2003     9003               305      E 121729    TLH12
----------------------------------------------------------------------------------------------------
     References 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.
----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S>            <C>                           <C>       <C>
BORROWER:      R-B RUBBER PRODUCTS, INC.     LENDER:   KEYBANK NATIONAL ASSOCIATION
               904 EAST 10TH AVENUE                    WILLAMETTE VALLEY COMMERCIAL BANKING CENTER.
               MCMINNVILLE, OR 97128                   SALEM
                                                       416 STATE STREET
                                                       P.O. BOX 2246  OR-20-96-0158
                                                       SALEM, OR 97308
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S>                                 <C>                        <C>
PRINCIPAL AMOUNT:  $315,000.00      INTEREST RATE:  7.920%     DATE OF NOTE:  APRIL 1, 1998
</TABLE>
 
PROMISE TO PAY. R-B RUBBER PRODUCTS, INC. ("BORROWER") PROMISES TO PAY TO
KEYBANK NATIONAL ASSOCIATION ("LENDER"), OR ORDER. IN LAWFUL MONEY OF THE UNITED
STATES OF AMERICA, THE PRINCIPAL AMOUNT OF THREE HUNDRED FIFTEEN THOUSAND &
00/100 DOLLARS ($315,000.00), TOGETHER WITH INTEREST AT THE RATE OF 7.920% PER
ANNUM ON THE UNPAID PRINCIPAL BALANCE FROM APRIL 1, 1998, UNTIL PAID IN FULL.

PAYMENT. BORROWER WILL PAY THIS LOAN IN 60 PAYMENTS OF $6,398.63 EACH PAYMENT.
BORROWER'S FIRST PAYMENT IS DUE MAY 5, 1998, AND ALL SUBSEQUENT PAYMENTS ARE DUE
ON THE SAME DAY OF EACH MONTH AFTER THAT. BORROWER'S FINAL PAYMENT WILL BE DUE
ON APRIL 5, 2003, AND WILL BE FOR ALL PRINCIPAL AND ALL ACCRUED INTEREST NOT YET
PAID. PAYMENTS INCLUDE PRINCIPAL AND INTEREST. Interest on this Note is computed
on a 365/360 simple interest basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, times the outstanding principal balance,
times the actual number of days the principal balance is outstanding. Borrower
will pay Lender at Lender's address shown above or at such other place as Lender
may designate in writing. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to principal,
and any remaining amount to any unpaid collection costs and late charges.

PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments under the payment schedule.
Rather, they will reduce the principal balance due and may result in Borrower
making fewer payments.

LATE CHARGE. If a payment is 16 DAYS OR MORE LATE, Borrower will be charged
5.000% OF THE REGULARLY SCHEDULED PAYMENT.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Borrower defaults 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 ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with Lender.
(g) Any guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A material
adverse change occurs in Borrower's financial condition, or Lender believes the
prospect of payment or performance of the Indebtedness is impaired.

If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within fifteen (15) days; or (b) if
the cure requires more than fifteen (15) days, immediately initiates steps which
Lender deems in Lender's sole discretion to be sufficient to cure the default
and thereafter continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the interest rate on this Note 5.000 percentage points.
The interest rate will not exceed the maximum rate permitted by applicable law.
Lender may hire or pay someone else to help collect this Note if Borrower does
not pay. Borrower also will pay Lender that amount. This includes, subject to
any limits under applicable law, Lender's attorneys' fees and Lender's legal
expenses whether or not there is a lawsuit, including attorneys' fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services. If not prohibited by applicable law, Borrower also will pay
any court costs, in addition to all other sums provided by law. THIS NOTE HAS
BEEN DELIVERED TO LENDER AND ACCEPTED BY LENDER IN THE STATE OF OREGON. IF THERE
IS A LAWSUIT. BORROWER AGREES UPON LENDER'S REQUEST TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF MULTNOMAH COUNTY, THE STATE OF OREGON. LENDER AND
BORROWER HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM BROUGHT BY EITHER LENDER OR BORROWER AGAINST THE OTHER. THIS NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
OREGON.

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan, or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.

UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY US (LENDER)
AFTER OCTOBER 3,1989 CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT
FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY US TO BE
ENFORCEABLE.

<PAGE>

04-01-1998                     PROMISSORY NOTE                            PAGE 2
LOAN NO 9003                     (CONTINUED)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF
A COMPLETED COPY OF THE NOTE.

BORROWER:

R-B RUBBER PRODUCTS, INC.

By: /s/ Ronald L. Bogh
    -------------------------
    RONALD L. BOGH, President

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


<PAGE>

                            COMMERCIAL SECURITY AGREEMENT
 
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
 PRINCIPAL     LOAN DATE     MATURITY     LOAN NO   CALL   COLLATERAL   ACCOUNT   OFFICER   INITIALS
<S>           <C>           <C>           <C>       <C>    <C>         <C>        <C>       <C>
$315,000.00   04-01-1998    04-05-2003     9003               305      E 121729    TLH12
----------------------------------------------------------------------------------------------------
     References 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.
----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S>            <C>                           <C>       <C>
BORROWER:      R-B RUBBER PRODUCTS, INC.     LENDER:   KEYBANK NATIONAL ASSOCIATION
               904 EAST 10TH AVENUE                    WILLAMETTE VALLEY COMMERCIAL BANKING CENTER.
               MCMINNVILLE, OR 97128                   SALEM
                                                       416 STATE STREET
                                                       P.O. BOX 2246  OR-20-96-0158
                                                       SALEM, OR 97308
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
</TABLE>
THIS COMMERCIAL SECURITY AGREEMENT IS ENTERED INTO BETWEEN R-B RUBBER PRODUCTS,
INC. (REFERRED TO BELOW AS "GRANTOR"); AND KEYBANK NATIONAL ASSOCIATION
(REFERRED TO BELOW AS "LENDER"). FOR VALUABLE CONSIDERATION, GRANTOR GRANTS TO
LENDER A SECURITY INTEREST IN THE COLLATERAL TO SECURE THE INDEBTEDNESS AND
AGREES THAT LENDER SHALL HAVE THE RIGHTS STATED IN THIS AGREEMENT WITH RESPECT
TO THE COLLATERAL, IN ADDITION TO ALL OTHER RIGHTS WHICH LENDER MAY HAVE BY LAW.

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 Commercial Security Agreement, as
  this Commercial Security Agreement may be amended or modified from time to
  time, together with all exhibits and schedules attached to this Commercial
  Security Agreement from time to time.

  COLLATERAL. The word "Collateral" means the following described property of
  Grantor, whether now owned or hereafter acquired, whether now existing or
  hereafter arising, and wherever located:

       ALL EQUIPMENT

  In addition, the word "Collateral" includes all the following, whether now
  owned or hereafter acquired, whether now existing or hereafter arising, and
  wherever located:

       (a) All attachments, accessions, accessories, tools, parts, supplies,
       increases, and additions to and all replacements of and substitutions
       for any property described above.

       (b) All products and produce of any of the property described in this
       Collateral section.

       (c) All accounts, general intangibles, instruments, rents, monies,
       payments, and all other rights, arising out of a sale, lease, or other
       disposition of any of the property described in this Collateral section.

       (d) All proceeds (including insurance proceeds) from the sale,
       destruction, loss, or other disposition of any of the property described
       in this Collateral section.

       (e) All records and data relating to any of the property described in
       this Collateral section, whether in the form of a writing, photograph,
       microfilm, microfiche, or electronic media, together with all of
       Grantor's right, title, and interest in and to all computer software
       required to utilize, create, maintain, and process any such records or
       data on electronic media.

  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."

  GRANTOR. The word "Grantor" means R-B RUBBER PRODUCTS, INC., its 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 the Indebtedness.

  INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced by the
  Note, including all principal and interest, together with all other
  indebtedness and costs and expenses for which Grantor is responsible under
  this Agreement or under any of the Related Documents. In addition, the word
  "Indebtedness" includes all other obligations, debts and liabilities, plus
  interest thereon, of Grantor, or any one or more of them, to Lender, as well
  as all claims by Lender against Grantor, or any one or more of them, whether
  existing now or later; whether they are voluntary or involuntary, due or not
  due, direct or indirect, absolute or contingent, liquidated or unliquidated;
  whether Grantor may be liable individually or jointly with others; whether
  Grantor may be obligated as guarantor, surety, accommodation party or
  otherwise; whether recovery upon such indebtedness may be or hereafter may
  become barred by any statute of limitations; and whether such indebtedness
  may be or hereafter may become otherwise unenforceable.

  LENDER. The word "Lender" means KEYBANK NATIONAL ASSOCIATION, its successors
  and assigns.

  NOTE. The word "Note" means the note or credit agreement dated April 1, 1998,
  in the principal amount of $315,000.00 from R-B RUBBER PRODUCTS, INC. to
  Lender, together with all renewals of, extensions of, modifications of,
  refinancings of, consolidations of and substitutions for the note or credit
  agreement.

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

OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender as follows:

  PERFECTION OF SECURITY INTEREST. Grantor agrees to execute such financing
  statements and to take whatever other actions are requested by Lender to
  perfect and continue Lender's security interest in the Collateral. Upon
  request of Lender, Grantor will deliver to Lender any and all of the
  documents evidencing or constituting the Collateral, and Grantor will note
  Lender's interest upon any and all chattel paper if not delivered to Lender
  for possession by Lender. Grantor hereby appoints Lender as its irrevocable
  attorney-in-fact for the purpose of executing any documents necessary to
  perfect or to continue the security interest granted in this Agreement.
  Lender may at any time, and without further authorization from Grantor, file
  a carbon, photographic or other reproduction of any financing statement or of
  this Agreement for use as a financing statement. Grantor will reimburse
  Lender for all expenses for the perfection and the continuation of the
  perfection of Lender's security interest in the Collateral. Grantor promptly
  will notify Lender before any change in Grantor's name including any change
  to the assumed business names of Grantor. THIS IS A CONTINUING SECURITY
  AGREEMENT AND WILL CONTINUE IN EFFECT EVEN THOUGH ALL OR ANY PART OF THE
  INDEBTEDNESS IS PAID IN FULL AND EVEN THOUGH FOR A PERIOD OF TIME GRANTOR MAY
  NOT BE INDEBTED TO LENDER.


<PAGE>

04-01-1998               COMMERCIAL SECURITY AGREEMENT                    PAGE 2
LOAN NO 9003                     (CONTINUED)
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  NO VIOLATION. The execution and delivery of this Agreement will not violate
  any law or agreement governing Grantor or to which Grantor is a party, and
  its certificate or articles of incorporation and bylaws do not prohibit any
  term or condition of this Agreement.

  ENFORCEABILITY OF COLLATERAL. To the extent the Collateral consists of
  accounts, chattel paper, or general intangibles, the Collateral is
  enforceable in accordance with its terms, is genuine, and complies with
  applicable laws concerning form, content and manner of preparation and
  execution. and all persons appearing to be obligated on the Collateral have
  authority and capacity to contract and are in fact obligated as they appear
  to be on the Collateral.

  REMOVAL OF COLLATERAL. Grantor shall keep the Collateral (or to the extent
  the Collateral consists of intangible property such as accounts, the records
  concerning the Collateral) at Grantor's address shown above, or at such other
  locations as are acceptable to Lender. Except in the ordinary course of its
  business, including the sales of inventory, Grantor shall not remove the
  Collateral from its existing locations without the prior written consent of
  Lender. To the extent that the Collateral consists of vehicles, or other
  titled property, Grantor shall not take or permit any action which would
  require application for certificates of title for the vehicles outside the
  State of Oregon, without the prior written consent of Lender.

  TRANSACTIONS INVOLVING COLLATERAL. Except for inventory sold or accounts
  collected in the ordinary course of Grantor's business, Grantor shall not
  sell, offer to sell, or otherwise transfer or dispose of the Collateral.
  Grantor shall not pledge, mortgage, encumber or otherwise permit the
  Collateral to be subject to any lien, security interest, encumbrance, or
  charge, other than the security interest provided for in this Agreement,
  without the prior written consent of Lender. This includes security interests
  even if junior in right to the security interests granted under this
  Agreement. Unless waived by Lender, all proceeds from any disposition of the
  Collateral (for whatever reason) shall be held in trust for Lender and shall
  not be commingled with any other funds; provided however, this requirement
  shall not constitute consent by Lender to any sale or other disposition. Upon
  receipt, Grantor shall immediately deliver any such proceeds to Lender.

  TITLE. Grantor represents and warrants to Lender that it holds good and
  marketable title to the Collateral, free and clear of all liens and
  encumbrances except for the lien of this Agreement. No financing statement
  covering any of the Collateral is on file in any public office other than
  those which reflect the security interest created by this Agreement or to
  which Lender has specifically consented. Grantor shall defend Lender's rights
  in the Collateral against the claims and demands of all other persons.

  COLLATERAL SCHEDULES AND LOCATIONS. Insofar as the Collateral consists of
  equipment, Grantor shall deliver to Lender, as often as Lender shall require,
  such lists, descriptions, and designations of such Collateral as Lender may
  require to identify the nature, extent, and location of such Collateral. Such
  information shall be submitted for Grantor and each of its subsidiaries or
  related companies.

  MAINTENANCE AND INSPECTION OF COLLATERAL. Grantor shall maintain all tangible
  Collateral in good condition and repair. Grantor will not commit or permit
  damage to or destruction of the Collateral or any part of the Collateral.
  Lender and its designated representatives and agents shall have the right at
  all reasonable times to examine, inspect, and audit the Collateral wherever
  located. Grantor shall immediately notify Lender of all cases involving the
  return, rejection, repossession, loss or damage of or to any Collateral; of
  any request for credit or adjustment or of any other dispute arising with
  respect to the Collateral; and generally of all happenings and events
  affecting the Collateral or the value or the amount of the Collateral.

  TAXES, ASSESSMENTS AND LIENS. Grantor will pay when due all taxes,
  assessments and liens upon the Collateral, its use or operation, upon this
  Agreement, upon any promissory note or notes evidencing the Indebtedness, or
  upon any of the other Related Documents. Grantor may withhold any such
  payment or may elect to contest any lien if Grantor is in good faith
  conducting an appropriate proceeding to contest the obligation to pay and so
  long as Lender's interest in the Collateral is not jeopardized in Lender's
  sole opinion. If the Collateral is subjected to a lien which is not
  discharged within fifteen (15) days, Grantor shall deposit with Lender cash,
  a sufficient corporate surety bond or other security satisfactory to Lender
  in an amount adequate to provide for the discharge of the lien plus any
  interest, costs, attorneys' fees or other charges that could accrue as a
  result of foreclosure or sale of the Collateral. In any contest Grantor shall
  defend itself and Lender and shall satisfy any final adverse judgment before
  enforcement against the Collateral. Grantor shall name Lender as an
  additional obligee under any surety bond furnished in the contest
  proceedings.

  COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Grantor shall comply promptly with
  all laws, ordinances, rules and regulations of all governmental authorities,
  now or hereafter in effect, applicable to the ownership, production,
  disposition, or use of the Collateral. Grantor may contest in good faith any
  such law, ordinance or regulation and withhold compliance during any
  proceeding, including appropriate appeals, so long as Lender's interest in
  the Collateral, in Lender's opinion, is not jeopardized.

  HAZARDOUS SUBSTANCES. Grantor represents and warrants that the Collateral
  never has been, and never will be so long as this Agreement remains a lien on
  the Collateral, used for the generation, manufacture, storage,
  transportation, treatment, disposal, release or threatened release of any
  hazardous waste or substance, as those terms are defined in the Comprehensive
  Environmental Response, Compensation, and Liability Act of 1980, as amended,
  42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and
  Reauthorization Act of 1986, Pub. L. No. 99-499 ("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 or intended to protect human health or the environment
  ("Environmental Laws"). The terms "hazardous waste" and "hazardous substance"
  shall also include, without limitation, petroleum and petroleum by-products
  or any fraction thereof and asbestos. The representations and warranties
  contained herein are based on Grantor's due diligence in investigating the
  Collateral for hazardous wastes and substances. Grantor hereby (a) releases
  and waives any future claims against Lender for indemnity or contribution in
  the event Grantor becomes liable for cleanup or other costs under any
  Environmental Laws, and (b) agrees to indemnify and hold harmless Lender
  against any and all claims and losses resulting from a breach of this
  provision of this Agreement, or as a result of a violation of any
  Environmental Laws. This obligation to indemnify shall survive the payment of
  the Indebtedness and the satisfaction of this Agreement.

  MAINTENANCE OF CASUALTY INSURANCE. Grantor shall procure and maintain all
  risks insurance, including without limitation fire, theft and liability
  coverage together with such other insurance as Lender may require with
  respect to the Collateral, in form, amounts, coverages and basis reasonably
  acceptable to Lender and issued by a company or companies reasonably
  acceptable to Lender. Grantor, 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
  canceled or diminished without at least ten (10) days' prior written notice
  to Lender and not including any disclaimer of the insurer's liability for
  failure to give such a notice. 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 Grantor or any other person. In
  connection with all policies covering assets in which Lender holds or is
  offered a security interest, Grantor will provide Lender with such loss
  payable or other endorsements as Lender may require. If Grantor at any time
  fails to obtain or maintain any insurance as required under this Agreement,
  Lender may (but shall not be obligated to) obtain such insurance as Lender
  deems appropriate, including if it so chooses "single interest insurance,"
  which will cover only Lender's interest in the Collateral.

  APPLICATION OF INSURANCE PROCEEDS. Grantor shall promptly notify Lender of
  any loss or damage to the Collateral. Lender may make proof of loss if
  Grantor fails to do so within fifteen (15) days of the casualty. All proceeds
  of any insurance on the Collateral, including accrued proceeds thereon, shall
  be held by Lender as part of the Collateral. If Lender consents to repair or
  replacement of the damaged or destroyed Collateral, Lender shall, upon
  satisfactory proof of expenditure, pay or reimburse Grantor from the proceeds
  for the reasonable cost of repair or restoration.


<PAGE>

04-01-1998               COMMERCIAL SECURITY AGREEMENT                    PAGE 3
LOAN NO 9003                     (CONTINUED)
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  If Lender does not consent to repair or replacement of the Collateral, Lender
  shall retain a sufficient amount of the proceeds to pay all of the
  Indebtedness, and shall pay the balance to Grantor. Any proceeds which have
  not been disbursed within six (6) months after their receipt and which
  Grantor has not committed to the repair or restoration of the Collateral
  shall be used to prepay the Indebtedness.

  INSURANCE RESERVES. Lender may require Grantor to maintain with Lender
  reserves for payment of insurance premiums, which reserves shall be created
  by monthly payments from Grantor of a sum estimated by Lender to be
  sufficient to produce, at least fifteen (15) days before the premium due
  date, amounts at least equal to the insurance premiums to be paid. If fifteen
  (15) days before payment is due, the reserve funds are insufficient, Grantor
  shall upon demand pay any deficiency to Lender. The reserve funds shall be
  held by Lender as a general deposit and shall constitute a
  non-interest-bearing account which Lender may satisfy by payment of the
  insurance premiums required to be paid by Grantor as they become due. Lender
  does not hold the reserve funds in trust for Grantor, and Lender is not the
  agent of Grantor for payment of the insurance premiums required to be paid by
  Grantor. The responsibility for the payment of premiums shall remain
  Grantor's sole responsibility.

  INSURANCE REPORTS. Grantor, upon request of Lender, shall furnish to Lender
  reports on each existing policy of insurance showing such information as
  Lender may reasonably request including the following: (a) the name of the
  insurer; (b) the risks insured; (c) the amount of the policy; (d) the
  property insured; (e) the then current value on the basis of which insurance
  has been obtained and the manner of determining that value; and (f) the
  expiration date of the policy. In addition, Grantor shall upon request by
  Lender (however not more often than annually) have an independent appraiser
  satisfactory to Lender determine, as applicable, the cash value or
  replacement cost of the Collateral.

GRANTOR'S RIGHT TO POSSESSION. Until default, Grantor may have possession of the
tangible personal property and beneficial use of all the Collateral and may use
it in any lawful manner not inconsistent with this Agreement or the Related
Documents, provided that Grantor's right to possession and beneficial use shall
not apply to any Collateral where possession of the Collateral by Lender is
required by law to perfect Lender's security interest in such Collateral. If
Lender at any time has possession of any Collateral, whether before or after an
Event of Default, Lender shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral if Lender takes such action for
that purpose as Grantor shall request or as Lender, in Lender's sole discretion,
shall deem appropriate under the circumstances, but failure to honor any request
by Grantor shall not of itself be deemed to be a failure to exercise reasonable
care. Lender shall not be required to take any steps necessary to preserve any
rights in the Collateral against prior parties, nor to protect, preserve or
maintain any security interest given to secure the Indebtedness.

EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without limitation
all taxes, liens, security interests, encumbrances, and other claims, at any
time levied or placed on the Collateral. Lender also may (but shall not be
obligated to) pay all costs for insuring, maintaining and preserving the
Collateral. All such expenditures incurred or paid by Lender for such purposes
will then bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the date of repayment by Grantor. All such
expenses shall become a part of the Indebtedness and, at Lender's option, will
(a) be payable on demand, (b) be added to the balance of the Note and be
apportioned among and be payable with any installment payments to become due
during either (i) the term of any applicable insurance policy or (ii) the
remaining term of the Note, or (c) be treated as a balloon payment which will be
due and payable at the Note's maturity. This Agreement also will secure payment
of these amounts. Such right shall be in addition to all other rights and
remedies to which Lender may be entitled upon the occurrence of an Event of
Default.

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

  DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when due on
  the Indebtedness.

  OTHER DEFAULTS. Failure of Grantor to comply with or to perform any other
  term, obligation, covenant or condition contained in this Agreement or in any
  of the Related Documents or in any other agreement between Lender and
  Grantor.

  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 Grantor under this Agreement, the Note or the
  Related Documents is false or misleading in any material respect, either now
  or at the time made or furnished.

  DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
  ceases to be in full force and effect (including failure of any collateral
  documents to create a valid and perfected security interest or lien) at any
  time and for any reason.

  INSOLVENCY. The dissolution or termination of Grantor's existence as a going
  business, the insolvency of Grantor, the appointment of a receiver for any
  part of Grantor's property, any assignment for the benefit of creditors, any
  type of creditor workout, or the commencement of any proceeding under any
  bankruptcy or insolvency laws by or against Grantor.

  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 Grantor or by any governmental agency
  against the Collateral or any other collateral securing the Indebtedness.
  This includes a garnishment of any of Grantor's deposit accounts with Lender.
  However, this Event of Default shall not apply if there is a good faith
  dispute by Grantor as to the validity or reasonableness of the claim which is
  the basis of the creditor or forfeiture proceeding and if Grantor gives
  Lender written notice of the creditor or forfeiture proceeding and deposits
  with Lender monies or a surety bond for the creditor or forfeiture
  proceeding, in an amount determined by Lender, in its sole discretion, as
  being an adequate reserve or bond for the dispute.

  EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
  to any Guarantor of any of the Indebtedness or such Guarantor dies or becomes
  incompetent. Lender, at its option, may, but shall not be required to, permit
  the Guarantor's estate to assume unconditionally the obligations arising
  under the guaranty in a manner satisfactory to Lender, and, in doing so, cure
  the Event of Default.

  ADVERSE CHANGE. A material adverse change occurs in Grantor's financial
  condition, or Lender believes the prospect of payment or performance of the
  Indebtedness is impaired.

  RIGHT TO CURE. If any default, other than a Default on Indebtedness, is
  curable and if Grantor has not been given a prior notice of a breach of the
  same provision of this Agreement, it may be cured (and no Event of Default
  will have occurred) if Grantor, after Lender sends written notice demanding
  cure of such default, (a) cures the default within fifteen (15) days; or (b),
  if the cure requires more than fifteen (15) days, immediately initiates steps
  which Lender deems in Lender's sole discretion to be sufficient to cure the
  default and thereafter continues and completes all reasonable and necessary
  steps sufficient to produce compliance as soon as reasonably practical.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Oregon Uniform Commercial Code. In addition and without
limitation, Lender may exercise any one or more of the following rights and
remedies:

  ACCELERATE INDEBTEDNESS. Lender may declare the entire Indebtedness,
  including any prepayment penalty which Grantor would be required to pay,
  immediately due and payable, without notice.

  ASSEMBLE COLLATERAL. Lender may require Grantor to deliver to Lender all or
  any portion of the Collateral and any and all certificates of title and

<PAGE>

04-01-1998               COMMERCIAL SECURITY AGREEMENT                    PAGE 4
LOAN NO 9003                     (CONTINUED)
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  other documents relating to the Collateral. Lender may require Grantor to
  assemble the Collateral and make it available to Lender at a place to be
  designated by Lender. Lender also shall have full power to enter upon the
  property of Grantor to take possession of and remove the Collateral. If the
  Collateral contains other goods not covered by this Agreement at the time of
  repossession, Grantor agrees Lender may take such other goods, provided that
  Lender makes reasonable efforts to return them to Grantor after repossession.

  SELL THE COLLATERAL. Lender shall have full power to sell, lease, transfer,
  or otherwise deal with the Collateral or proceeds thereof in its own name or
  that of Grantor. Lender may sell the Collateral at public auction or private
  sale. Unless the Collateral threatens to decline speedily in value or is of a
  type customarily sold on a recognized market, Lender will give Grantor
  reasonable notice of the time after which any private sale or any other
  intended disposition of the Collateral is to be made unless Grantor has
  signed, after an Event of Default occurs, a statement renouncing or modifying
  Grantor's right to notification of sale. The requirements of reasonable
  notice shall be met if such notice is given at least ten (10) days before the
  time of the sale or disposition. All expenses relating to the disposition of
  the Collateral, including without limitation the expenses of retaking,
  holding, insuring, preparing for sale and selling the Collateral, shall
  become a part of the Indebtedness secured by this Agreement and shall be
  payable on demand, with interest at the Note rate from date of expenditure
  until repaid.

  APPOINT RECEIVER. To the extent permitted by applicable law, Lender shall
  have the following rights and remedies regarding the appointment of a
  receiver: (a) Lender may have a receiver appointed as a matter of right, (b)
  the receiver may be an employee of Lender and may serve without bond, and (c)
  all fees of the receiver and his or her attorney shall become part of the
  Indebtedness secured by this Agreement and shall be payable on demand, with
  interest at the Note rate from date of expenditure until repaid.

  COLLECT REVENUES, APPLY ACCOUNTS. Lender, either itself or through a
  receiver, may collect the payments, rents, income, and revenues from the
  Collateral. Lender may at any time in its discretion transfer any Collateral
  into its own name or that of its nominee and receive the payments, rents,
  income, and revenues therefrom and hold the same as security for the
  Indebtedness or apply it to payment of the Indebtedness in such order of
  preference as Lender may determine. Insofar as the Collateral consists of
  accounts, general intangibles, insurance policies, instruments, chattel
  paper, choses in action, or similar property, Lender may demand, collect,
  receipt for, settle, compromise, adjust, sue for, foreclose, or realize on
  the Collateral as Lender may determine, whether or not Indebtedness or
  Collateral is then due. For these purposes, Lender may, on behalf of and in
  the name of Grantor, receive, open and dispose of mail addressed to Grantor;
  change any address to which mail and payments are to be sent; and endorse
  notes, checks, drafts, money orders, documents of title, instruments and
  items pertaining to payment, shipment, or storage of any Collateral. To
  facilitate collection, Lender may notify account debtors and obligors on any
  Collateral to make payments directly to Lender.

  OBTAIN DEFICIENCY. If Lender chooses to sell any or all of the Collateral,
  Lender may obtain a judgment against Grantor for any deficiency remaining on
  the Indebtedness due to Lender after application of all amounts received from
  the exercise of the rights provided in this Agreement. Grantor shall be
  liable for a deficiency even if the transaction described in this subsection
  is a sale of accounts or chattel paper.

  OTHER RIGHTS AND REMEDIES. Lender shall have all the rights and remedies of a
  secured creditor under the provisions of the Uniform Commercial Code, as may
  be amended from time to time. In addition, Lender shall have and may exercise
  any or all other rights and remedies it may have available at law, in equity,
  or otherwise.

  CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether evidenced
  by this Agreement or the Related Documents or by any other writing, 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 Grantor under this Agreement, after Grantor's failure to
  perform, shall not affect Lender's right to declare a default and to exercise
  its remedies.

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

  AMENDMENTS. This Agreement, together with any Related Documents, constitutes
  the entire and final 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 has been delivered to Lender and accepted by
  Lender in the State of Oregon. If there is a lawsuit, Grantor agrees upon
  Lender's request to submit to the jurisdiction of the courts of Multnomah
  County, the State of Oregon. Lender and Grantor hereby waive the right to any
  jury trial in any action, proceeding, or counterclaim brought by either
  Lender or Grantor against the other. This Agreement shall be governed by and
  construed in accordance with the laws of the State of Oregon.

  ATTORNEYS' FEES; EXPENSES. Grantor agrees to pay upon demand all of Lender's
  costs and expenses, including attorneys' fees and Lender's legal expenses,
  incurred in connection with the enforcement of this Agreement. Lender may pay
  someone else to help enforce this Agreement, and Grantor shall pay the costs
  and expenses of such enforcement. Costs and expenses include Lender's
  attorneys' fees and legal expenses whether or not there is a lawsuit,
  including attorneys' fees and legal expenses for bankruptcy proceedings (and
  including efforts to modify or vacate any automatic stay or injunction),
  appeals, and any anticipated post-judgment collection services. Grantor also
  shall pay all court costs and such additional fees as may be directed by the
  court.

  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.

  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 or when deposited with a
  nationally recognized overnight courier or deposited 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 formal 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
  Grantor, notice to any Grantor will constitute notice to all Grantors. For
  notice purposes, Grantor will keep Lender informed at all times of Grantor's
  current address(es).

  POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and lawful
  attorney-in-fact, irrevocably, with full power of substitution to do the
  following: (a) to demand, collect, receive, receipt for, sue and recover all
  sums of money or other property which may now or hereafter become due, owing
  or payable from the Collateral; (b) to execute, sign and endorse any and all
  claims, instruments, receipts, checks, drafts or warrants issued in payment
  for the Collateral; (c) to settle or compromise any and all claims arising
  under the Collateral, and, in the place and stead of Grantor, to execute and
  deliver its release and settlement for the claim; and (d) to file any claim
  or claims or to take any action or institute or take part in any proceedings,
  either in its own name or in the name of Grantor, or otherwise, which in the
  discretion of Lender may seem to be necessary or advisable. This power is
  given as security for the Indebtedness, and the authority hereby conferred is
  and shall be irrevocable and shall remain in full force and effect until
  renounced by Lender.

  PREFERENCE PAYMENTS. Any monies Lender pays because of an asserted preference
  claim in Borrower's bankruptcy will become a part of the Indebtedness and, at
  Lender's option, shall be payable by Borrower as provided above in the
  "EXPENDITURES BY LENDER" paragraph.

  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

<PAGE>

04-01-1998               COMMERCIAL SECURITY AGREEMENT                    PAGE 5
LOAN NO 9003                     (CONTINUED)
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  cannot be so modified, it shall be stricken and all other provisions of this
  Agreement in all other respects shall remain valid and enforceable.

  SUCCESSOR INTERESTS. Subject to the limitations set forth above on transfer
  of the Collateral, this Agreement shall be binding upon and inure to the
  benefit of the parties, their successors and assigns.

  WAIVER. Lender shall not be deemed to have waived any rights under this
  Agreement unless such waiver is given in writing and signed by Lender. No
  delay or omission on the part of Lender in exercising any right shall operate
  as a waiver of such right or any other right. A waiver by Lender of a
  provision of this Agreement shall not prejudice or constitute a waiver of
  Lender's right otherwise to demand strict compliance with that provision or
  any other provision of this Agreement. No prior waiver by Lender, nor any
  course of dealing between Lender and Grantor, shall constitute a waiver of
  any of Lender's rights or of any of Grantor's obligations as to any future
  transactions. Whenever the consent of Lender is required under this
  Agreement, the granting of such consent by Lender in any instance shall not
  constitute continuing consent to subsequent instances where such consent is
  required and in all cases such consent may be granted or withheld in the sole
  discretion of Lender.

  WAIVER OF CO-OBLIGOR'S RIGHTS. If more than one person is obligated for the
  Indebtedness, Borrower irrevocably waives, disclaims and relinquishes all
  claims against such other person which Borrower has or would otherwise have
  by virtue of payment of the Indebtedness or any part thereof, specifically
  including but not limited to all rights of indemnity, contribution or
  exoneration.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED APRIL 1,
1998.

GRANTOR:

R-B RUBBER PRODUCTS, INC.


By: /s/ Ronald L. Bogh
    -------------------------
    RONALD L. BOGH, PRESIDENT

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

<PAGE>

                            AGREEMENT TO PROVIDE INSURANCE
 
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
 PRINCIPAL     LOAN DATE     MATURITY     LOAN NO   CALL   COLLATERAL   ACCOUNT   OFFICER   INITIALS
<S>           <C>           <C>           <C>       <C>    <C>         <C>        <C>       <C>
$315,000.00   04-01-1998    04-05-2003     9003               305      E 121729    TLH12
----------------------------------------------------------------------------------------------------
  References 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.
----------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S>            <C>                           <C>       <C>
BORROWER:      R-B RUBBER PRODUCTS, INC.     LENDER:   KEYBANK NATIONAL ASSOCIATION
               904 EAST 10TH AVENUE                    WILLAMETTE VALLEY COMMERCIAL BANKING CENTER.
               MCMINNVILLE, OR 97128                   SALEM
                                                       416 STATE STREET
                                                       P.O. BOX 2246  OR-20-96-0158
                                                       SALEM, OR 97308
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
</TABLE>
INSURANCE REQUIREMENTS. R-B RUBBER PRODUCTS, INC. ("Grantor") understands that
insurance coverage is required in connection with the extending of a loan or the
providing of other financial accommodations to Grantor by Lender. These
requirements are set forth in the security documents. The following minimum
insurance coverages must be provided on the following described collateral (the
"Collateral"):

COLLATERAL:    ALL EQUIPMENT.
               TYPE. All risks, including fire, theft and liability.
               AMOUNT. Full insurable value.
               BASIS. Actual cash value.
               ENDORSEMENTS. Lender's loss payable clause with stipulation that 
               coverage will not be canceled or diminished without a minimum of
               ten (10) days' prior written notice to Lender.
               DEDUCTIBLES. $500.00.

INSURANCE COMPANY. Grantor may obtain insurance from any insurance company
Grantor may choose that is reasonably acceptable to Lender.

INSURANCE MAILING ADDRESS. All documents and other materials relating to
insurance for this loan should be mailed, delivered or directed to the following
address:

               KEYBANK NATIONAL ASSOCIATION
               COMMERCIAL LOAN SERVICES
               P.O. BOX 5278
               BOISE, ID 83705-5278
               (800) 539-2191

PROVISION OF INSURANCE. Grantor agrees to deliver to Lender, thirty (30) days
from the date of this Agreement, evidence of the required insurance as provided
above, with an effective date of April 1, 1998, or earlier.

--------------------------------------------------------------------------------
                                       WARNING

Unless Grantor provides Lender with evidence of the insurance coverage as 
required by Grantor's security documents, Lender may purchase insurance at 
Grantor's expense to protect Lender's interest. This insurance may, but need 
not, also protect Grantor's interest. If the collateral becomes damaged, the 
coverage Lender purchases may not pay any claim Grantor makes or any claim 
made against Grantor. Grantor may later cancel this coverage by providing 
evidence that Grantor has obtained property coverage elsewhere. Grantor will 
be responsible for the cost of any insurance purchased by Lender. The cost of 
this insurance may be added to Grantor's Indebtedness. If the cost is added 
to Grantor's Indebtedness, the interest rate on the underlying Indebtedness 
will apply to this added amount. The effective date of coverage may be the 
date Grantor's prior coverage lapsed or the date Grantor failed to provide 
proof of coverage. The coverage Lender purchases may be considerably more 
expensive than insurance Grantor can obtain on Grantor's own and may not 
satisfy any need for property damage coverage or any mandatory liability 
insurance requirements imposed by applicable law. 
--------------------------------------------------------------------------------

AUTHORIZATION. For purposes of insurance coverage on the Collateral, Grantor
authorizes Lender to provide to any person (including any insurance
agent or company) all information Lender deems appropriate, whether regarding
the Collateral, the loan or other financial accommodations, or both.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT TO PROVIDE
INSURANCE AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED APRIL 1, 1998.

GRANTOR:

R-B RUBBER PRODUCTS, INC.


By /s/ Ronald L. Bogh
   -------------------------
   RONALD L. BOGH, PRESIDENT

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

                                 FOR LENDER USE ONLY
                                INSURANCE VERIFICATION
  DATE:______________                                       PHONE:______________

  AGENT'S NAME:________________________________________

  INSURANCE COMPANY:____________________________________________________

  POLICY NUMBER:________________________________________________________

  EFFECTIVE DATES:______________________________________________________

  COMMENTS:_____________________________________________________________

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