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:

         1.       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 Revolving Loan shall
                  be evidenced by a Revolving  Note  executed by Borrower in the
                  principal amount of Two Million Dollars ($2,000,000)."

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                  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, Borrower shall deliver to Bank, in form and substance satisfactory to
Bank, the following:

                  a.       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 addressed to 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:

                  a. 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  continuing  that,  with the giving of notice or the
passage of time, or both, would be an Event of Default under the Loan Agreement.

                  c. 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.

                  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.


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

                  Borrower:                          4211 W. 11th 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.

         8.  DISCLOSURE.  UNDER  OREGON  LAW,  MOST  AGREEMENTS,   PROMISES  AND
COMMITMENTS  MADE BY A BANK 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 THE BANK TO BE ENFORCEABLE.

         Dated as of June 20, 1997.

OBIE MEDIA CORPORATION                         UNITED STATES NATIONAL BANK
                                               OF OREGON

By: /s/ Brian Obie                             By: /s/ Larry Johnson
   ------------------------------                 ------------------------------
   Brian Obie, President                           Larry Johnson, Vice President