EXHIBIT 10-12

THIRD AMENDMENT OF LOAN AGREEMENT

PARTIES:

OBIE MEDIA CORPORATION,  an Oregon corporation (Borrower) UNITED STATES NATIONAL
BANK OF OREGON (Bank)

RECITALS:

    On October 31, 1996,  Borrower,  Bank and certain  Guarantors entered into a
Loan  Agreement  (the Original Loan  Agreement)  The Original Loan Agreement was
subsequently  modified  by  First  Amendment  of  Loan  Agreement  and a  Second
Amendment of Loan Agreement (the Second  Amendment) The Original Loan Agreement,
as modified,  is referred to in this amendment as the Loan Agreement.  Except as
specifically  set  forth  in this  amendment,  all  capitalized  terms  have the
meanings assigned in the Loan Agreement.

AGREEMENTS:

THE REVOLVING LOAN.

a.    MAXIMUM  AMOUNT.

Subparagraph 3.a.  of the Loan

Agreement is modified to read as follows:

     "a. MAXIMUM AMOUNT.  Subject to the terms and conditions of this Agreement,
Bank,  at its  option,  may make  Advances  to  Borrower  from time to time on a
revolving credit basis in an aggregate principal amount not to exceed at any one
time  outstanding  an  amount  equal to the  lesser of (i) Two  Million  Dollars
($2,000,000); and (ii) the Borrowing Base then in effect."

b.    THE REVOLVING  NOTE.  The first  sentence of Paragraph  3.d. of the
Loan Agreement is modified to read as follows:

     "d.  ADVANCES . Advances under the Re- volving Loan shall be evidenced by a
Revolving  Note  executeci  by Borrower in the  principal  amount of Two Million
Dollars ($2,000,000)

Page 1-THIRD AMENDMENT OF LOAN AGREEMENT

c.  FEE.  Contemporaneously with the execution of this amendment, Borrower shall
pay to Bank a fee of Two Thousand Five Hundred Dollars ($2,500)

     2.  CURRENT  RATIO  COVENANT.  Borrower's  covenant  to maintain a ratio of
Current  Assets  to  Current  Liabilities  of not less 1:1 as of the end of each
calendar quarter of Borrower is terminated, effective May 1, 1997.

     3.  ADDITIONAL  DOCUMENTS .  Contemporaneously  with the  execution of this
amendment,  Bo rrower shall deliver to Bank, in form and substance  satisfactory
to Bank, the following:

A Revolving Note.

          b. A written opinion of Gleaves,  Swearingen,  Larsen, Potter, Scott &
Smith and/or Tonkon,  Torp, Galen,  Marmaduke & Booth, the counsel for Borrower,
dated  as of the  date of this  amendment  and  addressedto  Bank,  in form  and
substance satisfactory to Bank.

c. Any other documents that Bank may reasonably request.

     4.  REPRESENTATIONS  AND  WARRANTIES.  To  induce  Bank to enter  into this
amendment,  Borrower  represents and warrants to Bank that, except as previously
disclosed to Bank:

          All  representations  and warranties of Borrower contained in the Loan
Agreement continue to be true and complete as of the date of this amendment.

          b. No Event of Default has occurred or is continuing, and no event has
occurred  and is  contlnulng  that,  with the giving of notice or the passage of
time, or both, would be an Event of Default under the Loan Agreement.

              No material adverse change has occurred in the financial condition
of Borrower since the date of the Second Amendment.

          d. Borrower' s execution,  delivery and  performance of this amendment
and all documents  executed pursuant to this amendment have been duly authorized
by all  necessary  action,  do  not  contravene  any  Law  binding  on it or its
organizational  documents, and do not contravene the provisions of or constitute
a default  under any  agreement or instrument to which it is a party or by which
it may be bound or affected.

Page 2-THIRD AMENDMENT OF LOAN AGREEMENT


e. This amendment and all documents executed pursuant to this amendment are, and
when delivered will be, valid,  binding and enforceable in accordance with their
respective terms.

     5.    NOTICES.   In modification of Paragraph 16.h. of the Loan
Agreement,  and  in  modification  of any  notice  provisions  in the  otherLoan
Documents, Borrower designates the following address for notices:

Borrower:

4211 W. llth Avenue Eugene, OR 97405
Attention:Mr. Brian Obie

     6.     COUNTERPARTS; EXECUTION BY FACSIMILE.  This amendment may
be  executed  in  several  counterparts,  each of which  will be deemed to be an
original  and all of which  together  constitute  one and the  same  instrument.
Delivery of an executed copy of this amendment by telecopy, telex or other means
of  electronic  communication  producing a printed  copy will be deemed to be an
execution and delivery of this  amendment on the date of such  communication  by
the parties so delivering  such a copy. The party so delivering  such a copy via
electronic communication shall deliver an executed original of this amendment to
the other party within one (1) week of the date of delivery of the copy sent via
electronic communication.

     7.  EFFECT.  Except as  specifically  modified  by this  amendment,  or any
document executed pursuant to this amendment,  the Loan Documents remain in full
force and effect.

e. DISCLOSURE. UNDER OREGON LAW, MOST AGREEMENTS,  PROMISES AND COMMITMENTS MADE
BY A BANK AFTER  OCTOBER 3, 1989,  CONCERNINGLOANS  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 THE BANK TO BE ENFORCEABLE

Dated as of June 20, 1997.

          OBIE MEDIA CORPORATION
Brian Obie, President
UNITED STATES NATIONAL BANK OF OREGON
Larry Johnson,  Vice President
By:


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