<PAGE>
 
                                                                   EXHIBIT 10.25


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


                          THIRD AMENDED AND RESTATED

                       ABT BUILDING PRODUCTS CORPORATION

                               CREDIT AGREEMENT

                                     WITH

                            COMERICA BANK, AS AGENT

                 FIRST UNION NATIONAL BANK OF NORTH CAROLINA,

                            AS DOCUMENTATION AGENT

                                      AND

                        HARRIS TRUST AND SAVINGS BANK,

                             AS SYNDICATION AGENT

                                      AND

                           THE "BANKS" PARTY HERETO

                          DATED AS OF MARCH 11, 1997


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                                      -1-
<PAGE>
 
                               TABLE OF CONTENTS
                               -----------------

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1.   DEFINITIONS................................................................     1

2.   THE INDEBTEDNESS: REVOLVING CREDIT AND BID LOANS...........................    22
     2.1   Revolving Credit Commitment..........................................    22
     2.2   Type of Loan and Maturity............................................    23
     2.3   Requests for Revolving Credit Loans..................................    23
     2.4   Disbursement of Loans................................................    24
     2.5   Revolving Credit Facility Fee........................................    25
     2.6   Optional Reduction or Termination of Revolving Credit Commitment.....    25
     2.7   Purpose of Revolving Credit Loans....................................    26
     2.8   Bid Rate Loans.......................................................    26
           (a)  The Bid Rate Option.............................................    26
           (b)  Bid Quote Request...............................................    27
           (c)  Bid Invitation..................................................    27
           (d)  Submission and Contents of Bid Quotes...........................    27
           (e)  Notice to and Acceptance........................................    28
           (f)  Notice to and Funding by Banks..................................    29
           (g)  Allocation by Agent.............................................    29
           (h)  Bid Loan Records................................................    29
     2.9   Currency Appreciation; Reduction of Indebtedness.....................    30
     2.10  Extensions of Revolving Credit Maturity Date.........................    30
           (a)  Extension Request...............................................    30
           (b)  Responses to Extension Request..................................    30
           (c)  Notice of Consents..............................................    30
           (d)  Non-Consenting Banks............................................    30
           (e)  Extension Denial................................................    31
           (f)  Extension Consent...............................................    31

3.   LETTERS OF CREDIT..........................................................    31
     3.1   Letters of Credit....................................................    31
     3.2   Conditions to Issuance...............................................    31
     3.3   Participations in Letters of Credit..................................    33
     3.4   Letter of Credit Fees................................................    33
     3.5   Issuance Fees........................................................    33
     3.6   Draws Under Letters of Credit........................................    34
     3.7   Funding of Letter of Credit Payment as Advance.......................    35
     3.8   Obligations Irrevocable..............................................    35
     3.9   Risk Under Letters of Credit.........................................    36
     3.10  Indemnification......................................................    38
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                                      -i-
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     3.11  Right of Reimbursement...............................................    38

4.   THE INDEBTEDNESS: SWING LOAN...............................................    38
     4.1   Swing Loan...........................................................    38
     4.2   Type of Loan and Maturity............................................    38
     4.3   Requests for Swing Loans.............................................    39
     4.4   Disbursement of Swing Loans..........................................    39
     4.5   Swing Loan Refunding.................................................    40

5.   THE INDEBTEDNESS: LINE OF CREDIT LOANS.....................................    40
     5.1   Line of Credit Commitment............................................    40
     5.2   Type of Loan and Maturity............................................    41
     5.3   Requests for Line of Credit Loans....................................    41
     5.4   Disbursement of Loans................................................    42
     5.5   Line of Credit Facility Fee..........................................    42
     5.6   Optional Reduction or Termination of Line of Credit Commitment.......    43
     5.7   Purpose of Line Credit Loans.........................................    43
     5.8   Extensions of Line of Credit Maturity Date...........................    43
           (a)  Extension Request...............................................    43
           (b)  Responses to Extension Request..................................    44
           (c)  Notice of Consents..............................................    44
           (d)  Non-Consenting Banks............................................    44
           (e)  Extension Denial................................................    44
           (f)  Extension Consent...............................................    44

6.   TERM LOAN
     6.1   Term Loan Repayment..................................................    45
                                                                                    45
7.   INTEREST, FEE AND INTEREST CALCULATION, INTEREST PERIODS,
     CONVERSIONS, PREPAYMENTS
     7.1   Interest.............................................................    45
     7.2   Calculations.........................................................    45
     7.3   Conversion and Renewal of Loans......................................    45
     7.4   Prepayments..........................................................    45
                                                                                    46
8.   SPECIAL PROVISIONS FOR LOANS.............................
     8.1   Reimbursement of Prepayment Costs....................................    47
     8.2   Agent's Eurocurrency Lending Office..................................    47
     8.3   Circumstances Affecting Eurocurrency-based Availability..............    47
     8.4   Laws Affecting Eurocurrency-based Loan Availability..................    47
     8.5   Increased Costs......................................................    48
                                                                                    48
9.   PAYMENTS
     9.1   Payment Procedure....................................................    49
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                                     -ii-
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     9.2    Application of Proceeds.............................................    50
     9.3    Pro-rata Recovery...................................................    50
     9.4    Deposits and Accounts...............................................    51
     9.5    Net Payments........................................................    51
     9.6    Tax Treaty Certificate..............................................    52
     9.7    Defaulting Banks....................................................    52
     9.8    Availability of Alternative Currency................................    53
     9.9    Refunding Advances in Same Currency.................................    54
     9.10   Judgment Currency...................................................    54

10.  CONDITIONS.................................................................    54
     10.1   Conditions Precedent To Initial Loans and Closing Date..............    54
            (a)  Execution of Notes and This Agreement..........................    54
            (b)  Corporate Authority............................................    54
            (c)  Opinion of Counsel.............................................    55
            (d)  Other Documents................................................    55
            (e)  Representations and Warranties - All Parties...................    55
            (f)  Compliance with Certain Documents and Agreements...............    55
            (g)  No Default.....................................................    55
            (h)  Payment of Agent's and Other Fees..............................    56
            (i)  Environmental Reports..........................................    56
            (j)  Other Documents and Instruments................................    56
     10.2   Conditions Precedent to All Loans...................................    56
            (a)  Effectiveness..................................................    56
            (b)  No Default; Representations and Warranties.....................    56
            (c)  Adverse Change, etc............................................    56
            (d)  Enforceability of Documents....................................    56

11.  REPRESENTATIONS AND WARRANTIES.............................................    57
     11.1   Corporate Status....................................................    57
     11.2   Corporate Power and Authority; Business.............................    57
     11.3   No Violation........................................................    57
     11.4   Litigation..........................................................    58
     11.5   Use of Proceeds.....................................................    58
     11.6   Governmental Approvals, etc.........................................    58
     11.7   Investment Company Act..............................................    58
     11.8   Public Utility Holding Company Act..................................    58
     11.9   True and Complete Disclosure........................................    59
     11.10  Financial Statements................................................    59
     11.11  Security Interests..................................................    59
     11.12  Tax Returns and Payments............................................    59
     11.13  ERISA...............................................................    59
     11.14  Subsidiaries........................................................    60
     11.15  Patents, etc........................................................    60
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                                     -iii-
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     11.16  Compliance with Laws, etc............................................    60
     11.17  Properties...........................................................    61
     11.18  Collective Bargaining Agreements.....................................    61
     11.19  Indebtedness Outstanding.............................................    61
     11.20  Environmental Protection.............................................    61

12.  AFFIRMATIVE COVENANTS.......................................................    63
      12.1  Reporting Requirements Covenants.....................................    63
      12.2  Books, Records and Inspections.......................................    65
      12.3  Maintenance of Property; Insurance...................................    65
      12.4  Payment of Taxes.....................................................    66
      12.5  Corporate Franchises.................................................    66
      12.6  Compliance with Statutes, etc........................................    66
      12.7  ERISA................................................................    66
      12.8  Performance of Obligations...........................................    67
      12.9  End of Fiscal Years; Fiscal Quarters.................................    67
     12.10  Environmental Events.................................................    67
     12.11  Restricted Subsidiary Documents......................................    68

13.  NEGATIVE COVENANTS..........................................................    68
      13.1  Changes in Business..................................................    68
      13.2  Liens................................................................    68
      13.3  Indebtedness.........................................................    69
      13.4  Financial Covenants..................................................    70
      13.5  ERISA................................................................    70
      13.6  Merger and Consolidations............................................    71
      13.7  Sale and Lease-Backs.................................................    71
      13.8  Sale or Discount of Receivables......................................    72
      13.9  Acquisitions.........................................................    72
     13.10  Indemnification Agreement............................................    72
     13.11  Contingent Obligations...............................................    72
     13.12  Non-Restricted Amount................................................    73
     13.13  Changes to Permitted Bond Financing and Permitted Private
            Placement Debt.......................................................    73
     13.14  Use of Loan Proceeds.................................................    74

14.  DEFAULTS....................................................................    74
      14.1  Events of Default....................................................    74
      14.2  Exercise of Remedies.................................................    76
      14.3  Waiver of Defaults...................................................    77

15.  AGENT.......................................................................    77
     15.1  Appointment of Agent and Co-Agents....................................    77
     15.2  Deposit Account with Agent............................................    77
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     15.3   Exculpatory Provisions.......................................................    78
     15.4   Successor Agents.............................................................    78
     15.5   Right of Agent and Co-Agent as Banks.........................................    78
     15.6   Credit Decisions.............................................................    78
     15.7   Notices by Agent.............................................................    78
     15.8   Agent's Fees.................................................................    78
     15.9   Nature of Agency.............................................................    79
     15.10  Actions; Confirmation of Agent's Authority to Act in Event of Default........    79
     15.11  Authority of Agent to Enforce Notes And This Agreement.......................    79
     15.12  Co-Agents....................................................................    79

16.  MISCELLANEOUS.......................................................................    79
     16.1   Law of Michigan; Submission to Jurisdiction..................................    79
     16.2   Agent's Costs and Expenses...................................................    80
     16.3   Notices......................................................................    80
     16.4   Further Action...............................................................    80
     16.5   Successors and Assigns.......................................................    81
            (a)  Assignments.............................................................    81
            (b)  Participations..........................................................    81
     16.6   Indulgence...................................................................    82
     16.7   Counterparts.................................................................    82
     16.8   Entire Agreement; Amendments; Waivers; Consents..............................    82
     16.9   Confidentiality..............................................................    84
     16.10  Interest.....................................................................    84
     16.11  Jury Waiver..................................................................    85
     16.12  Effective Upon Execution.....................................................    85
</TABLE>

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<PAGE>
 
                                   SCHEDULES
                                   ---------


1.79   Margins

1.91   Percentages

1.94   Permitted Bond Financing

1.96   Permitted Borrower Maximums

11.4   Litigation

11.16  Compliance with Laws

11.18  Collective Bargaining Agreements

11.20  Environmental Matters

                                     -vi-
<PAGE>
 
                                   EXHIBITS
                                   --------


Exhibit "A" - Form of Assignment Agreement

Exhibit "B" - Form of Bid Acknowledgement

Exhibit "C" - Form of Bid Notes

Exhibit "D" - Form of Bid Quote

Exhibit "E" - Form of Bid Quote Request

Exhibit "F" - Form of Extension Request

Exhibit "G" - Form of Letter of Credit Notice

Exhibit "H" - Form of Line of Credit Notes

Exhibit "I" - Form of Request for Line of Credit Loan

Exhibit "J" - Form of Request for Revolving Credit Loan

Exhibit "K" - Form of Request for Swing Loan

Exhibit "L" - Form of Revolving Credit Notes

Exhibit "M" - Form of Swing Loan Note
<PAGE>
 
                  THIRD AMENDED AND RESTATED CREDIT AGREEMENT
                  -------------------------------------------


     THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT, made as of the 11th day
of March, 1997, between ABT BUILDING PRODUCTS CORPORATION, a Delaware
corporation, ABTCO, INC., a Delaware corporation, ABT CANADA, LTD., a Nova
Scotia corporation, and KENTECH PLASTICS, INC., a Delaware corporation, each of
the financial institutions now or hereafter a "Bank" hereunder, COMERICA BANK,
as agent for the Banks and, FIRST UNION NATIONAL BANK OF NORTH CAROLINA, in its
capacity as documentation agent for the Banks hereunder and HARRIS TRUST AND
SAVINGS BANK, in its capacity as syndication agent for the Banks hereunder.

     WHEREAS, Company and the Permitted Borrowers have requested Agent and the
Banks to: (a) provide Company and the Permitted Borrowers a credit facility in
the form of a continuing revolving credit facility in the aggregate maximum
amount of One Hundred Seventy Five Million Dollars ($175,000,000), together with
options under the revolving credit facility to: (i) obtain letters of credit
from time to time (as a component of, and not in addition to, the maximum amount
of the requested revolving credit facility) in the aggregate maximum face amount
of Fifty Million Dollars ($50,000,000); and (ii) incur up to Ten Million Dollars
($10,000,000) of indebtedness under a swing loan facility (as a component of,
and not in addition to, the maximum amounts of the requested revolving credit
facility), (b) provide Company with a credit facility in the form of a line of
credit in the aggregate maximum amount of Twenty Five Million Dollars
($25,000,000); and (c) incorporate hereunder the term loan made by certain of
the Banks in the principal amount of Fifty Million Dollars ($50,000,000)
originally borrowed by Company from certain of the Banks under the Prior
Agreement (defined herein).

     WHEREAS, Agent and the Banks are willing to do so, but only on the terms
and conditions of this Agreement;

     NOW, Therefore, Agent, Banks, Company and Permitted Borrowers agree the
Prior Agreement is hereby amended and restated as follows:

1.   DEFINITIONS
     -----------

     For the purposes of this Agreement the following terms (when capitalized)
will have the following meanings:

     1.1  "ABT" shall mean ABTco, Inc., a Delaware corporation and wholly owned
Subsidiary of Company.

     1.2  "ABT Canada" shall mean ABT Canada, Ltd., a Nova Scotia corporation
and wholly owned Subsidiary of Company.

     1.3  "ABT Export" shall mean ABT Export Company, a United States Virgin
Islands corporation and wholly owned Subsidiary of ABT.

                                      -1-
<PAGE>
 
     1.4  "Adjusted Percentage" shall mean, as of any date, with respect to each
Bank, the percentage determined by dividing:

          (a)  (i) the Percentage of Revolving Credit in effect on such day for
               such Bank, minus (ii) the principal amount of any Bid Loans then
               owing to such Bank; by

          (b)  the amount by which: (i) the Revolving Credit Commitment in
               effect on such day exceeds; (ii) the aggregate principal amount
               of all Bid Loans outstanding on such date.

     1.5  "Adjusted Tangible Net Worth" shall mean the Tangible Net Worth of
Company and its Subsidiaries or (where the context so indicates) Company and the
Restricted Subsidiaries plus the lesser of (i) Twenty Nine Million Two Hundred
Forty Two Thousand Dollars ($29,242,000), or (ii) the aggregate purchase price
paid by Company for repurchases of shares of its common capital stock subsequent
to March 31, 1994, to the extent and so long as such shares are held by Company
as treasury shares.

     1.6  "Advance" shall mean a borrowing requested by Company or a Permitted
Borrower and made by the Banks under this Agreement (or in the case of the Swing
Loans, made by Agent) (including any refunding or conversion of such borrowings
pursuant to Section 7.3 hereof) and shall include a borrowing pursuant to
Section 3.6 hereof, whether or not requested by Company.

     1.7  "Agent" shall mean Comerica Bank in its capacity as Agent hereunder or
any successor appointed in accordance with Section 15.4 hereof.

     1.8  "Agent's Fees" shall mean those fees and expenses required to be paid
by Company to Agent under Section 10.1(h) hereof.

     1.9  "Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the Federal Funds Effective Rate in effect on such day plus one percent (1%).

     1.10 "Alternative Currency" shall mean:

          (a)  in the case of Advances, Canadian Dollars;

          (b)  in the case of Letters of Credit, Canadian Dollars and Austrian
               Schillings; and

          (c)  in all cases, any other currency other than Dollars approved in
               writing by all of the Banks.

     1.11 "Annual Debt Service" shall mean, as of the last day of each fiscal
quarter, for the four quarters immediately preceding the calculation thereof,
the sum of interest charged or 

                                      -2-
<PAGE>
 
incurred on Indebtedness plus all amounts required for mandatory repayment of
principal of and premium on Indebtedness (whether by operation of sinking fund
or otherwise and including, without limitation, current maturities of long-term
Indebtedness), for the Company and the Subsidiaries, or (where the context so
indicates) Company and the Restricted Subsidiaries, all determined in accordance
with GAAP on a Consolidated basis.

     1.12 "Applicable Interest Rate" shall mean:

          (a)  with respect to Revolving Credit Loans denominated in Dollars and
               Line of Credit Loans, the Eurocurrency-based Rate or the Prime-
               based Rate as selected by Company or (if applicable) a Permitted
               Borrower from time to time or otherwise determined pursuant to
               the terms and conditions of this Agreement;

          (b)  with respect to Revolving Credit Loans denominated in any
               Alternative Currency, the Eurocurrency-based Rate therefor as
               selected by Company or (if applicable) a Permitted Borrower, from
               time to time;

          (c)  with respect to any Swing Loan, the Swing Loan Quoted Rate, if
               such a rate was quoted by Agent and accepted by Company for the
               relevant Advance and, in each other case, the Prime-based Rate;

          (d)  with respect to any Bid Loan, the Bid Rate therefor; and

          (e)  with respect to the Term Loan, seven and 99/100ths percent
               (7.99%) per annum.

     1.13 "Assignment Agreement" shall mean an assignment agreement executed by
a Bank and delivered to Agent pursuant to Section 16.5(a) hereof, in the form
attached as Exhibit "A" hereto.

     1.14 "Banks" shall mean each financial institution party hereto and each
financial institution which hereafter becomes party hereto pursuant to Section
16.5(a) and their respective successors and assigns.

     1.15 "Base Tangible Net Worth" shall mean:

          (a)  Ninety Four Million Seven Hundred Fifty Six Thousand Dollars
               ($94,756,000), plus

          (b)  fifty percent (50%) of the Net Income (if positive) of the
               Company and the Subsidiaries, or (where the context so indicates)
               Company and the Restricted Subsidiaries, on a Consolidated basis,
               earned in each fiscal quarter subsequent to the fiscal quarter
               ending December 31, 1996.

                                      -3-
<PAGE>
 
     1.16 "Bid Acknowledgement" shall mean the acknowledgement and acceptance of
Bid Quotes by Company or (if applicable) a Permitted Borrower in the form
attached as Exhibit "B" hereto.

     1.17 "Bid Loan" shall mean any Loan that is made by one or more of the
Banks pursuant to a Bid Quote and any "Bid Loan" made pursuant to the Prior
Agreement which remains outstanding as of the Closing Date.

     1.18 "Bid Loan Maximum" shall mean, as of any date, the lesser of: (i) One
Hundred Million Dollars ($100,000,000); or (ii) the Revolving Credit Commitment
in effect on such date.

     1.19 "Bid Notes" shall mean the promissory notes of the Company and the
Permitted Borrowers evidencing Bid Loans, in substantially the form annexed
hereto as Exhibit "C" hereto made: (i) in the case of Company's Bid Notes, to
each Bank in an amount equal to each Bank's respective Percentage of the
Revolving Credit Commitment in effect on the Closing Date, and (ii) in the case
of any Permitted Borrower's Bid Notes, to each Bank in an amount equal to the
lesser of: (x) the Percentage of Revolving Credit applicable to such Bank, or
(y) the Permitted Borrower Maximum for the Revolving Credit Commitment
applicable to such Permitted Borrower.

     1.20 "Bid Quote" shall mean an offer by a Bank to make a Bid Loan in the
form attached as Exhibit "D" hereto.

     1.21 "Bid Quote Request" shall mean any request for Bid Quotes made by the
Company or a Permitted Borrower in the form attached as Exhibit "E" hereto.

     1.22 "Bid Rate" shall mean, with respect to any Bid Loan, the rate of
interest (which may be a Eurocurrency-based Rate) offered by a Bank or Banks
with respect thereto and accepted by Company or the applicable Permitted
Borrower pursuant to Section 2.8 hereof.

     1.23 "Bond Pledge Agreement" shall mean a pledge agreement executed and
delivered by ABT to the Issuing Bank issuing the Letter of Credit related to the
Permitted Bond Financing, pledging to such Issuing Bank (for itself and on
behalf of the Banks) any bonds purchased under certain circumstances with
proceeds of drawings under such Letter of Credit.

     1.24 "Business Day" shall mean any day on which commercial banks are open
for domestic and international business (including dealings in dollar deposits
in the interbank market) in Detroit and London.

     1.25 "Capital Expenditures" shall mean, for any period of determination
thereof, the aggregate gross expenditures during that period, in the property,
plant or equipment reflected in the balance sheets of Company and its
Subsidiaries, in conformity with GAAP on a consolidated basis, or (where the
context so indicates) Company and the Restricted Subsidiaries, on a similar
basis of calculation, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets (i) financed from insurance
proceeds paid on account of the 

                                      -4-
<PAGE>
 
loss of or damage to the assets being replaced or restored, (ii) financed with
awards of compensation arising from the taking by eminent domain or condemnation
of the assets being replaced or (iii) to the extent financed with trade-in
credits in connection with acquisitions of equipment or fixed assets purchased
simultaneously with such trade-in; provided that Capital Expenditures shall not
include, (w) the purchase price paid in connection with the acquisition of any
other Person (including through the purchase of all of the capital stock or
other ownership interests of such Person or through merger or consolidation) or
of substantially all of the assets of a business or of a division of a business
as a going concern, (x) expenditures of up to Sixty Million Dollars
($60,000,000) in aggregate amount connected with the North Carolina Initial
Project to the extent expended on or before December 31, 1997, (y) expenditures
of up to Forty Seven Million Dollars ($47,000,000) in aggregate amount connected
with the North Carolina Second Project to the extent expended on or before
eighteen (18) months after commencement of construction of the North Carolina
Second Project, and provided that no expenditures on the North Carolina Second
Project in excess of up to Two Million Dollars ($2,000,000) in engineering costs
may be incurred until after the delivery to the Agent and the Banks of the
report required pursuant to Section 12.1(h) hereof, and (z) expenditures of up
to Twenty Million Dollars ($20,000,000) in aggregate amount connected with the
Mississippi Project to the extent expended on or before December 31, 1998.

     1.26 "Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than three (3) years from the date of acquisition, (ii) marketable direct
obligations issued by any State of the United States of America or any local
government or other political subdivision thereof rated (at the time of
acquisition of such security) at least AA by Standard & Poor's Corporation
("S&P") or the equivalent thereof by Moody's Investors Service, Inc. ("Moody's")
having maturities of not more than one (1) year from the date of acquisition,
(iii) U.S. dollar denominated time deposits, certificates of deposit, eurodollar
investments, investment accounts and bankers' acceptances of any bank whose
short-term commercial paper rating (at the time of acquisition of such security)
by S&P is at least A-1 or the equivalent thereof or by Moody's is at least P-1
or the equivalent thereof (any such bank, an "Approved Bank"), with maturities
of not more than six (6) months from the date of acquisition, (iv) commercial
paper and variable or fixed rate notes issued by any Bank or Approved Bank or by
the parent company of any Bank or Approved Bank and commercial paper and
variable rate notes issued by, or guaranteed by, any industrial or financial
company with a short-term commercial paper rating (at the time of acquisition of
such security) of at least A-1 or the equivalent thereof by S&P or at least P-1
or the equivalent thereof by Moody's, or guaranteed by any industrial company
with a long-term unsecured debt rating (at the time of acquisition of such
security) of at least AA or the equivalent thereof by S&P or the equivalent
thereof by Moody's and in each case maturing within one year after the date of
acquisition and (v) repurchase agreements with any Bank or any primary dealer
maturing within one (1) year from the date of acquisition that are fully
collateralized by investment instruments that would otherwise be Cash
Equivalents; provided that the terms of such repurchase agreements comply with
the guidelines set forth in the Federal Financial Institutions Examination
Council Supervisory Policy -- Repurchase Agreements of Depository Institutions
With Securities Dealers and Others, as 

                                      -5-
<PAGE>
 
adopted by the Comptroller of the Currency on October 31, 1985.

     1.27 "Closing Date" shall mean the date, on or before March 11, 1997, on
which the conditions of Section 10.1 hereof have been satisfied.

     1.28 "Commitments" shall mean, collectively, the Line of Credit Commitment
and Revolving Credit Commitment.

     1.29 "Company" shall mean ABT Building Products Corporation, a Delaware
corporation (formerly known as ABT Holdings Corporation).

     1.30 "Consolidated" shall mean, when used with reference to any financial
information (or when used as a part of any defined term or statement pertaining
to any financial condition) the accounts of Company and the Subsidiaries or
(where the context so indicates) Company and the Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP.

     1.31 "Co-Agents" shall mean First Union National Bank of North Carolina in
its capacity as documentation agent for the Banks hereunder and Harris Trust and
Savings Bank in its capacity as syndication agent for the Banks hereunder or any
successor to either of them appointed in accordance with Section 15.4 hereof.

     1.32 "Default" shall mean an event, occurrence or circumstance which, with
the giving of notice and/or passage of time, would constitute an Event of
Default.

     1.33 "Defaulting Bank" shall mean any Bank, which, during any time when the
conditions to an Advance requested pursuant to Section 2.3 or 5.3 have been
satisfied, shall have failed to fund its portion of any duly requested Advance,
or shall have notified Agent that it does not intend to fund its portion of such
an Advance, until such failure to fund is cured or notice withdrawn and (if
applicable) it shall have paid the interest payable with respect to such
failure, as required by Section 2.4 and 5.4 (as applicable).

     1.34 "Default Rate" shall mean:

          (a)  with respect to any Advance which is not a Term Loan (i) from the
               date that the Default Rate becomes applicable thereto, until the
               last day of the then existing Interest Period therefor, the
               Applicable Interest Rate therefor plus three percent (3%) per
               annum, and (ii) thereafter, the Prime-based Rate plus three
               percent (3%); and

          (b)  with respect to the Term Loan, ten and 99/100ths percent (10.99%)
               per annum.

     1.35 "Documents" shall mean collectively, this Agreement, any Notes, the
Guaranties, the Pledge, any Letter of Credit Agreements, and any other
documents, instruments or agreements now or hereafter executed pursuant to or in
connection with any such document or 

                                      -6-
<PAGE>
 
instrument.

     1.36 "Dollar Amount" shall mean (i) with respect to each Advance made or
carried (or to be carried) in Dollars, or Letter of Credit denominated in
Dollars, the principal amount or (in the case of a Letter of Credit) the face
amount thereof and (ii) with respect to each Advance made or carried (or to be
made or carried) in an Alternative Currency or Letter of Credit to be
denominated in an Alternative Currency, the amount of Dollars which is
equivalent to the principal amount of such Advance or (in the case of a Letter
of Credit) the face amount thereof, at the spot exchange rate determined by the
Agent to be available to it for the sale of Dollars for such Alternative
Currency at approximately 11:00 a.m. (Detroit time) two (2) Business Days before
such Advance is made or Letter of Credit is issued, as such Dollar Amount may be
adjusted from time to time pursuant to Section 2.9 or 9.10 hereof.  When used
with respect to any Alternative Currency portion of an Advance being repaid or
Advance or Letter of Credit remaining outstanding at any time, "Dollar Amount"
shall mean the amount of Dollars which is equivalent to the principal amount of
such Advance or face amount of such Letter of Credit at the most favorable spot
exchange rate determined by the Agent to be available to it for the sale of
Dollars for such Alternative Currency at the relevant time.

     1.37 "Dollars" and the sign "$" shall mean lawful money of the United
States of America.

     1.38 "Earnings Available for Debt Service" shall mean, as of the last day
of each fiscal quarter, for the four fiscal quarters preceding any calculation
thereof, EBITDA minus the Capital Expenditures of Company and the Subsidiaries
or (where the context so indicates) Company and the Restricted Subsidiaries, for
such period.

     1.39 "EBITDA" shall mean, as of the last day of any fiscal quarter, for the
four fiscal quarters immediately preceding any calculation thereof, Net Income
(before impact of extraordinary non-cash items) plus the aggregate amounts
deducted in determining Net Income for such period in respect of: (i) the
provision for taxes based on income; (ii) Interest Expense; and (iii)
depreciation and amortization, all determined for the Company and the
Subsidiaries or (where the context so indicates) the Company and the Restricted
Subsidiaries, on a Consolidated basis in accordance with GAAP.

     1.40 "Environmental Laws" shall mean the common law and all federal, state,
local and foreign laws or regulations, codes, orders, decrees, judgments or
injunctions issued, promulgated, approved or entered thereunder, now or
hereafter in effect, relating to pollution or protection of public or employee
health and safety or the environment, including, without limitation, laws
relating to (i) emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
constituent substances or wastes, including, without limitation, petroleum,
including crude oil or any fraction thereof, or any petroleum product
(collectively referred to as "Hazardous Materials"), into the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), (ii) the manufacture, processing, distribution,
use, generation, treatment, storage, disposal, transport or handling of
Hazardous Materials, and (iii) underground storage 

                                      -7-
<PAGE>
 
tanks, and related piping, and emissions, discharges, releases or threatened
releases therefrom. 

     1.41 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, or any successor act or code. Section references to ERISA are
to ERISA as in effect as of the date of this Agreement and any subsequent
amendment, supplement or substitution thereof.

     1.42 "ERISA Affiliates" shall mean any entity, whether or not incorporated,
which is under common control or would be considered a single employer with the
Company or a Subsidiary within the meaning of Section 414(b), (c) or (m) of the
Code and regulations promulgated under those sections or within the meaning of
Section 4001(b) of ERISA and regulations promulgated under that section.

     1.43 "Eurocurrency-based Loan" shall mean a Loan which is advanced in
Dollars or an Alternative Currency and which bears interest at a rate based on
the Eurocurrency-based Rate.

     1.44 "Eurocurrency-based Rate" shall mean, for any Eurocurrency-based Loan,
a per annum interest rate equal to the Eurocurrency Rate, plus the Margin in
effect on the first day of the Interest Period for such Eurocurrency-based Loan.

     1.45 "Eurocurrency Lending Office" shall mean Agent's office located at
Grand Cayman or such other branch of Agent, domestic or foreign, as it may
hereafter designate as its Eurocurrency Lending Office by notice to Company.

     1.46 "Eurocurrency Rate" shall mean:

          (a)  the per annum interest rate at which the Eurocurrency Lending
               Office offers deposits in the relevant currency to prime banks in
               the eurocurrency market in an amount comparable to the relevant
               Eurocurrency-based Loan and for a period equal to the relevant
               Interest Period at approximately 11:00 a.m. Detroit time two (2)
               Business Days prior to the first day of such Interest Period;
               divided by,

          (b)  a percentage (expressed as a decimal) equal to one hundred
               percent (100%) minus that percentage which is in effect on the
               date for an Advance of a Eurocurrency-based Loan, as prescribed
               by the Board of Governors of the Federal Reserve System (or any
               successor) for determining the maximum reserve requirements for a
               member bank of the Federal Reserve System with deposits exceeding
               five billion dollars in respect of "Eurocurrency Liabilities" (or
               in respect of any other category of liabilities which includes
               deposits by reference to which the interest rate on Eurocurrency-
               based Loans is determined or any category of extensions of credit
               or other assets which includes loans by a non-United States
               Eurocurrency Lending Office of such a bank to United States
               residents).

     1.47 "Event of Default" shall mean the Events of Default specified in
Section 14.1 

                                      -8-
<PAGE>
 
hereof.

     1.48 "Extension Request" shall mean a request for extension of the
Revolving Credit Maturity Date made pursuant to Section 2.10 hereof, or a
request for extension of the Line of Credit Maturity Date made by Company
pursuant to Section 5.8 hereof, on the form attached as Exhibit "F" hereto,
delivered to Agent.

     1.49 "Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by it.

     1.50 "Fees" shall mean the Revolving Credit Facility Fees, Line of Credit
Facility Fees, Agents Fees and/or Letter of Credit Fees collectively, or any one
or more of these as the context indicates.

     1.51 "Fixed Charge Coverage Ratio" shall mean, as of the last day of each
fiscal quarter, a ratio, the numerator of which is Earnings Available for Debt
Service and the denominator of which is Annual Debt Service.

     1.52 "GAAP" shall mean generally accepted accounting principles in the
United States of America consistent with those used in preparation of the
financial statements of Company referred to in Section 11.10 hereof.

     1.53 "Guaranty" shall mean the guaranty agreements executed and delivered
to the Agent:

          (a)  by Company, ABT and KenTech, and each other Restricted Subsidiary
               hereafter existing which is organized under the laws of a
               jurisdiction of the United States, guarantying to Agent and the
               Banks the payment and performance of indebtedness and obligations
               of Company and each Permitted Borrower; and

          (b)  by ABT Canada, and by each other Restricted Subsidiary hereafter
               existing which is organized under the laws of a jurisdiction
               outside of the United States, guarantying to Agent and the Banks
               the payment and performance of indebtedness and obligations of
               each Permitted Borrower which is organized under the laws of a
               jurisdiction outside of the United States.

     1.54 "Hereof", "Hereto", "Hereunder" and similar terms shall refer to this
Agreement and not to any particular paragraph or provision of this Agreement.

                                      -9-
<PAGE>
 
     1.55 "Highest Lawful Rate" shall mean, with respect to each Bank, the
maximum nonusurious interest rate, if any, that at any time or from time to time
may be contracted for, taken, reserved, charged or received on its Notes or
other indebtedness under laws applicable to such Bank which are in effect as of
the date hereof or, to the extent allowed by law, under such laws applicable to
such Bank which may hereafter be in effect and which allow a higher maximum
nonusurious interest rate than applicable laws allow as of the date hereof.

     1.56 "Indebtedness" shall mean, without duplication, (i) all indebtedness
of such Person for borrowed money, (ii) the deferred purchase price of assets or
services which in accordance with GAAP would be shown on the liability side of
the balance sheet of such Person, (iii) the face amount of all letters of credit
issued for the account of such Person and, without duplication, all drafts drawn
thereunder, (iv) all obligations of a second person secured by any Lien on any
property owned by such first Person, whether or not such obligations have been
assumed by such first Person, (v) all capitalized lease obligations of such
Person, (vi) all obligations of such Person under Interest Rate Agreements, and
(vii) all obligations which have the economic effect of a guaranty of
Indebtedness of the types described in clauses (i) through (vi) above,
regardless of characterization; provided that Indebtedness shall not include
trade payables or other accounts payable, accrued expenses, accrued dividends,
accrued income taxes, warranty reserves and deferred income taxes, to the extent
arising in the ordinary course of business.

     1.57 "Interest Expense" shall mean interest expense of the Company and the
Subsidiaries or (where the context indicates) Company and the Restricted
Subsidiaries, as determined on its Consolidated statements of income in
accordance with GAAP.

     1.58 "Intercompany Note" shall mean that certain demand promissory note
made by ABT Canada to the order of Company as of May 31, 1995 in the principal
amount of Fifty Million Dollars ($50,000,000).

     1.59 "Interest Period" shall mean an interest period:

          (a)  in the case of any Loan which is a Prime-based Loan, an initial
               period beginning on the date of the advance thereof and ending on
               the next occurring Quarterly Payment Date and thereafter,
               successive Interest Periods beginning on the day after each
               Quarterly Payment Date and ending on each succeeding Quarterly
               Payment Date;

          (b)  in the case of a Loan which is a Eurocurrency-based Loan one (1),
               two (2), three (3) or six (6) months as selected by Company or
               the applicable Permitted Borrower;

          (c)  in the case of the Term Loan, beginning on the day after each
               Quarterly Payment Date and ending on each succeeding Quarterly
               Payment Date;

          (d)  in the case of a Bid Loan, beginning on the date of the advance
               thereof and ending on a date that is not less than one (1) week
               and not greater than 

                                     -10-
<PAGE>
 
               three (3) months later, as agreed with respect to such Bid Loan
               by Company or the applicable Permitted Borrower and the Bank or
               Banks making such Bid Loan pursuant to the procedures set forth
               in Section 2.8 hereof; and

          (e)  in the case of a Swing Loan bearing interest at the Swing Loan
               Quoted Rate, beginning on the date the advance is made and ending
               on a date that is not more than thirty (30) days after the date
               of such Advance, as agreed with respect to such Advance by
               Company and Agent pursuant to the procedures set forth in Section
               4.3 hereto;

provided however, that:

               (i)   any Interest Period which would otherwise end on a day
                     which is not a Business Day shall be extended to the next
                     succeeding Business Day unless the next succeeding Business
                     Day falls in another calendar month, in which case, such
                     Interest Period shall end on the immediately preceding
                     Business Day;

               (ii)  when an Interest Period for a Eurocurrency-based Loan
                     begins on a day which has no numerically corresponding day
                     in another calendar month during which such Interest Period
                     is to end, it shall end on the last Business Day of such
                     other calendar month;

               (iii) no Interest Period for a Revolving Credit Loan, Swing Loan
                     or Bid Loan shall extend beyond the Revolving Credit
                     Maturity Date;

               (iv)  no Interest Period for a Line of Credit Loan shall extend
                     beyond the Line of Credit Maturity Date; and

               (v)   no Interest Period with respect to the Term Loan shall
                     extend beyond the last day of the Term Loan Maturity Date.

     1.60 "Interest Rate Agreements" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement, interest
rate futures contract, interest rate option contract or other similar agreement
or arrangement to which the Company is a party, designed to protect against
fluctuations in interest rates.

     1.61 "Issuing Bank" shall mean:

          (a)  with respect to any Letter of Credit issued in support of the
               obligations of ABT related to the Permitted Bond Financing, such
               Bank as Company may select which agrees to act as issuer of such
               Letter of Credit; and

          (b)  with respect to all other Letters of Credit, the Agent.

                                     -11-
<PAGE>
 
     1.62 "KenTech" shall mean KenTech Plastics, Inc., a Delaware corporation
and a wholly owned subsidiary of the Company.

     1.63  "Letter(s) of Credit" shall mean any standby or trade letters of
credit:

          (a)  issued pursuant to the Prior Agreement and remaining outstanding
               and unexpired as of the Closing Date; and

          (b)  hereafter issued by an Issuing Bank at the request of or for the
               account of Company or a Permitted Borrower pursuant to Article 3
               hereof.

     1.64 "Letter of Credit Agreement" shall mean:

          (a)  applications of Company pursuant to which the Company requested
               Letters of Credit issued by the Agent pursuant to the Prior
               Agreement which remain outstanding and unexpired as of the
               Closing Date;

          (b)  with respect of the Letter of Credit to be issued in support of
               the Permitted Bond Financing, a reimbursement agreement (if any)
               by and between the Issuing Bank and ABT in form and substance
               acceptable to such Issuing Bank; and

          (c)  in respect of each other Letter of Credit hereafter issued
               pursuant to this Agreement, the application of Company or a
               Permitted Borrower requesting an Issuing Bank to issue such
               Letter of Credit (including the terms and conditions on the
               reverse side thereof or otherwise provided therein), in the form
               and substance acceptable to such Issuing Bank.

     1.65 "Letter of Credit Fees" shall mean the fees payable to Agent for the
account of the Banks in connection with Letters of Credit pursuant to Section
3.4 hereof.

     1.66 "Letter of Credit Maximum" shall mean, as of any date, the lesser of:

          (a)  Fifty Million Dollars ($50,000,000); or

          (b)  the Revolving Credit Commitment minus the sum of the aggregate
               principal amount of outstanding Revolving Credit Loans, Swing
               Loans and Bid Loans.

     1.67 "Letter of Credit Notice" shall mean an Issuing Bank's notice of the
issuance of a Letter of Credit in the form attached hereto as Exhibit "G".

     1.68 "Letter of Credit Obligation" shall mean the obligation of Company or
a Permitted Borrower under each Letter of Credit Agreement to reimburse the
Issuing Bank for each payment 

                                     -12-
<PAGE>
 
made by the Issuing Bank under the Letter of Credit issued pursuant to such
Letter of Credit Agreement, together with all other sums, fees, charges and
amounts which may be owing under such Letter of Credit Agreement.

     1.69 "Letter of Credit Payment" shall mean any amount paid or required to
be paid by an Issuing Bank in its capacity as issuer of a Letter of Credit as a
result of a draw against any Letter of Credit.

     1.70 "Leverage Ratio" shall mean, the greater of (a) the ratio of the
Indebtedness to EBITDA, for the Company and the Restricted Subsidiaries on a
Consolidated basis as of the last day of any fiscal quarter of Company, or (b)
the ratio of the Indebtedness to EBITDA, for the Company and the Subsidiaries on
a Consolidated basis as of the last day of any fiscal quarter of Company.

     1.71 "Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien, claim, hypothecation, assignment for security or charge of
any kind (including any agreement to give any of the foregoing, any conditional
sale or other title retention agreement or any lease in the nature thereof).

     1.72 "Line of Credit Commitment" shall mean:

          (a)  Twenty Five Million Dollars ($25,000,000) from the date hereof
               until the first reduction or termination of the Line of Credit
               Commitment pursuant to Section 5.6 or 7.5 hereof; and

          (b)  thereafter, Twenty Five Million Dollars ($25,000,000) minus the
               amount of each reduction pursuant to Section 5.6 or 7.5 hereof.

     1.73 "Line of Credit Facility Fee" shall mean the commitment fee payable to
Agent for distribution to the Banks pursuant to Section 5.5 hereof.

     1.74 "Line of Credit Loan" shall mean the line of credit loans to be
advanced to the Company by the Banks pursuant to Section 5 hereof.

     1.75 "Line of Credit Maturity Date" shall mean March 10, 1998 or such later
date as to which it may be extended, at the request of Company, pursuant to
Section 5.8 hereof.

     1.76 "Line of Credit Notes" shall mean the Notes described in Section 5.1
hereof made by Company to each of the Banks in the form attached as Exhibit "H"
hereto in aggregate principal amount equal to Twenty Five Million Dollars
($25,000,000).

     1.77 "Loan" shall mean any Revolving Credit Loan, Line of Credit Loan,
Swing Loan, Term Loan, Bid Loan and Letter of Credit Payment.

     1.78 "Majority Banks" shall mean:

                                     -13-
<PAGE>
 
          (a)  so long as the Commitments shall be in effect, the Banks (other
               than Defaulting Banks) whose Percentages of Revolving Credit
               Commitment, Percentages of Line of Credit Commitment and
               outstanding balance of Term Loans in aggregate constitute sixty
               five percent (65%) or more of the sum of the Commitments then in
               effect plus the principal amount of all Term Loans then
               outstanding (other than the Commitments and Term Loans of
               Defaulting Banks); and

          (b)  in the event that the Commitments have been terminated, the Banks
               whose Loans and risk participations with respect to outstanding
               Letters of Credit constitute sixty five percent (65%) or more of
               the aggregate principal amount of all outstanding Loans and
               aggregate face amounts of all outstanding Letters of Credit.

     1.79 "Margin" shall mean with respect to: (a) Revolving Credit Loans
advanced as or converted as Eurocurrency-based Loans, (b) Letter of Credit Fees
to be paid with respect to trade Letters of Credit outstanding during any fiscal
quarter, (c) Letter of Credit Fees to be paid with respect to standby Letters of
Credit outstanding during any fiscal quarter, (d) Revolving Credit Facility Fees
to be paid as of the end of any fiscal quarter, (e) Line of Credit Loans
advanced as or converted as Eurocurrency-based Loans, and (f) Line of Credit
Facility Fees to be paid as of the end of any fiscal quarter: the percentages
set forth on Schedule 1.79 hereto, based on the Leverage Ratios most recently
determined on the basis of financial statements delivered by Borrower to Bank
pursuant to Section 12.1(a) and 12.1(b) hereof.  Any change in the Margin
resulting from any such determination shall be effective immediately following
the date of the delivery of the relevant financial statement; provided, however,
                                                              ----------------- 
that, (i) in the event such financial statements are not delivered as and when
required pursuant to Section 12.1(a) or 12.1(b) (and without prejudice to the
rights of Agent and Majority Banks to declare an Event of Default as a
consequence thereof) any increase in the Margin determined to be applicable upon
the receipt of such financial statements, shall be applicable retroactively to
the date such financial statement was required to be delivered under Section
12.1(a) or 12.1(b) (as applicable), but any decrease in the Margin based thereon
shall be applicable only prospectively, from the date of the actual delivery
thereof, (ii) in the event that on the date for adjustment of the Margin, there
exists an Event of Default hereunder, the Margin shall not be reduced (but may
be increased) until such time as such Event of Default has been cured or waived,
notwithstanding any reduction in the Leverage Ratio on such date, and (iii) with
respect to each Eurocurrency-based Loan, the Margin applicable as of the first
day of its Interest Period shall remain in effect with respect to such Advance
until the last day of such Interest Period.

     1.80 "Material Adverse Effect" shall mean:

          (a)  with respect to the Company and the Restricted Subsidiaries taken
               as a whole, or (when used in such context) Company and its
               Subsidiaries taken as a whole, any materially adverse effect with
               respect to the operations, business, properties, assets, nature
               of assets, liabilities (contingent or 

                                     -14-
<PAGE>
 
               otherwise) or financial condition of Company and the Restricted
               Subsidiaries taken as a whole or (if the context indicates)
               Company and its Subsidiaries taken as a whole; or

          (b)  any facts or circumstance as to which singly or in the aggregate
               there is a reasonable likelihood of such a materially adverse
               change, or a reasonable likelihood that Company and the
               Restricted Subsidiaries will be rendered unable to perform their
               obligations hereunder or under any of the other Documents in any
               material respect, or a reasonable likelihood that Agent or the
               Banks will be rendered unable to enforce in any material respect
               the rights or remedies purported to be granted them hereunder or
               under any of the other Documents.

     1.81 "Mississippi Project" shall mean the purchase, development, equipping
and outfitting by ABT of a vinyl siding plant at Holly Springs, Mississippi and
the financing thereof with proceeds of the Permitted Bond Financing.

     1.82 "Multiemployer Plans" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA with respect to which Company, any Subsidiary or any
ERISA Affiliate is or has been required to contribute.

     1.83 "Net Income" shall mean, for any period of determination thereof, the
net income for such period taken as one accounting period, for Company and the
Subsidiaries or (where the context so indicates) Company and the Restricted
Subsidiaries, on a Consolidated basis, determined in accordance with GAAP.

     1.84 "Non-Material Restricted Subsidiary" shall mean any Restricted
Subsidiary or group of Restricted Subsidiaries which:

          (a)  are wholly-owned Subsidiaries; and

          (b)  have assets which account for less than one percent (1%) of the
               Consolidated total assets of Company and the Restricted
               Subsidiaries.

     1.85 "Non-Restricted Amount" shall mean, at any time, an amount equal to
the lesser of:

          (a)  the Adjusted Tangible Net Worth of the Company and Restricted
               Subsidiaries as determined from the financial statements most
               recently delivered pursuant to subsections (a) or (b) of Section
               12.1 hereof, minus the sum of: (i) the aggregate of all amounts
               expended by Company and the Restricted Subsidiaries for
               dividends, distributions, purchases, redemptions and other
               acquisitions or retirements of their own capital stock subsequent
               to the date of such financial statement (except to the extent
               paid to Company or a Restricted Subsidiary); and (ii) the Base

                                     -15-
<PAGE>
 
               Tangible Net Worth for Company and the Restricted Subsidiaries,
               as determined from such financial statements; or

          (b)  the Adjusted Tangible Net Worth of Company and the Subsidiaries
               as determined from the financial statements most recently
               delivered pursuant to subsections (a) or (b) of Section 12.1
               hereof, minus the sum of: (i) the aggregate of all amounts
               expended by Company and the Subsidiaries for dividends,
               distributions, purchases, redemptions and other acquisitions or
               retirements of their own capital stock subsequent to the date of
               such financial statement (except to the extent paid to Company or
               a Subsidiary); and (ii) the Base Tangible Net Worth for Company
               and the Subsidiaries, as determined from such financial
               statements.

     1.86 "Non-Restricted Subsidiary" shall mean any Subsidiary that may be
formed or acquired by the Company or a Restricted Subsidiary, which at or prior
to the time such Subsidiary becomes a Subsidiary, is designated a Non-Restricted
Subsidiary by an officer of the Company authorized to make such designations (as
evidenced by a resolution of the board of directors of Company filed with the
Agent).  Any Non-Restricted Subsidiary may subsequently be designated a
Restricted Subsidiary by any such authorized officer, provided that no Default
or Event of Default will occur as a consequence thereof.

     1.87 "North Carolina Initial Project" shall mean the purchase, development
and equipping by ABT of a plant and an initial cement fiber product line at
Roaring River, North Carolina.

     1.88 "North Carolina Second Project" shall mean the purchase, development
and equipping by ABT of a second production line for cement fiber product at its
Roaring River, North Carolina plant.

     1.89 "Notes" shall mean the Revolving Credit Notes, Bid Notes, Term Notes
and the Swing Loan Note, Line of Credit Notes  or any one or more of them, as
the context indicates.

     1.90 "Pension Plans" shall mean any pension plan as defined in Section 3(2)
of ERISA (other than a Multiemployer Plan) which is or has been maintained by or
to which contributions are or have been made by Company, any Subsidiary or any
ERISA Affiliate.

     1.91 "Percentage" shall mean, with respect to any Bank, the percentage
interest in the Revolving Credit Commitment, Line of Credit Commitment and Term
Loan set forth opposite its name on Schedule 1.91 hereto, as such Percentages
may change from time to time pursuant to Sections 7.5, 8.7 and 16.5 hereto.

     1.92 "Percentage of Line of Credit" shall mean, with respect to each Bank,
an amount equal to the Line of Credit Commitment in effect on the date of a
determination thereof, multiplied by such Bank's Percentage in the Line of
Credit Commitment.

                                     -16-
<PAGE>
 
     1.93 "Percentage of Revolving Credit" shall mean, with respect to each
Bank, an amount equal to the Revolving Credit Commitment in effect on the date
of a determination thereof, multiplied by such Bank's Percentage in the
Revolving Credit Commitment.

     1.94 "Permitted Bond Financing" shall mean the financing of the Mississippi
Project with proceeds of up to Twenty Million Dollars ($20,000,000) of
industrial revenue bonds to be issued by the Mississippi Business Finance
Corporation, which:

          (a)  are issued pursuant to and governed by an agreement or indenture
               which include terms and conditions no more restrictive upon ABT
               or Company than the terms and conditions described on Schedule
               1.94 hereof.

          (b)  which does not, by its terms, prohibit or restrict the ability of
               the Company or the Restricted Subsidiaries to grant Liens in
               favor of Agent on behalf of the Banks;

          (c)  is secured solely by a Letter of Credit issued in support of the
               obligations of ABT related thereto.

     1.95 "Permitted Borrowers" shall mean ABT, ABT Canada and KenTech.

     1.96 "Permitted Borrower Maximum" shall mean the maximum aggregate amount
of the Usage which may be outstanding at any time under the Revolving Credit
Notes and Bid Notes of a Permitted Borrower and Letters of Credit issued for the
account of such Permitted Borrower and, with respect to each Permitted Borrower,
shall be such Dollar Amounts as are indicated on Schedule 1.96 hereto.

     1.97 "Permitted Currencies" shall mean Dollars or an Alternative Currency.

     1.98 "Permitted Encumbrances" shall mean, with respect to any Person:

          (a)  Liens for taxes, assessments or governmental charges or claims
               not yet delinquent, or Liens for taxes, assessments or
               governmental charges being contested in good faith and by
               appropriate proceedings for which adequate reserves (to the
               extent required by GAAP) have been established;

          (b)  Liens in respect of property or assets of Company or a
               Subsidiary: (i) which were imposed by law in the ordinary course
               of business, such as carriers', warehousemen's and mechanics'
               Liens and other similar Liens arising in the ordinary course of
               business, which are not delinquent or which are being contested
               in good faith by appropriate proceedings, which proceedings have
               the effect of preventing the forfeiture or sale of the property
               or asset subject to such Lien; or (ii) which do not relate to
               material liabilities of Company and the Subsidiaries and do not
               in the aggregate materially detract from the value of the
               property and assets of 

                                     -17-
<PAGE>
 
                Company and the Subsidiaries taken as a whole;

           (c)  Liens securing judgement or appeals bonds connected with
                judgements not in excess of One Million Dollars ($1,000,000) in
                any single case or Five Million Dollars ($5,000,000) in the
                aggregate;

           (d)  Liens (other than any Lien imposed by ERISA or pursuant to
                Environmental Laws the enforcement of which would reasonably be
                expected to have a Material Adverse Effect) incurred or deposits
                made in the ordinary course of business in connection with
                workers' compensation, unemployment insurance and other type of
                social security, or to secure the performance of tenders,
                statutory obligations, surety bonds, bids, leases, governmental
                contracts, performance and return-of-money bonds and other
                similar obligations incurred in the ordinary course of business
                (exclusive of obligations in respect of the payment for borrowed
                money or the equivalent);

           (e)  Leases (and any related precautionary UCC financing statements
                filed in connection therewith) with respect to the assets or
                properties of Company and the Subsidiaries leased by Company and
                the Subsidiaries, as lessees, entered into in the ordinary
                course of business; and

           (f)  Easements, rights of way, restrictions, minor defects or
                irregularities in title not interfering in any material respect
                with the business of Company or the Subsidiaries, in each case
                incurred in the ordinary course of business and which do not
                materially impair for its intended purposes the real property to
                which it relates.

     1.99  "Permitted Private Placement Debt" shall mean public, unsecured, 
long-term senior debt of Company or a Subsidiary, issued without credit
enhancement which:

           (a)  is issued pursuant to and governed by an agreement or indenture,
                (i) which includes negative and financial covenants no more
                restrictive than the covenants set forth in this Agreement, and
                (ii) which does not by its terms, prohibit or restrict the
                ability of the Company and Restricted Subsidiaries to grant
                Liens in favor of Agent on behalf of the Banks other than a
                provision requiring Liens to be shared pari passu with holders
                of Permitted Private Placement Debt; and

           (b)  at no time exceeds Fifty Million Dollars ($50,000,000) in
                outstanding principal amount.

     1.100 "Person" shall mean an individual, corporation, partnership, trust,
incorporated or unincorporated organization, joint venture, joint stock company,
or a government or any agent or political subdivision thereof or other entity of
any kind.

                                     -18-
<PAGE>
 
     1.101 "Pledge" shall mean a pledge agreement executed and delivered by
Company to Agent and the Banks, pursuant to which Agent and the Banks are
granted a first perfected pledge of and security interest in:

           (a)  sixty five percent (65%) of the issued and outstanding capital
                stock of ABT Canada and any other Restricted Subsidiary
                hereafter owned by Company or any Restricted Subsidiary which is
                organized under the laws of a jurisdiction outside of the United
                States; and

           (b)  the Intercompany Note.

     1.102 "Prepayment Compensation Amount" shall mean, with respect to any
prepayment of the Term Loan, an amount equal to the sum of the discounted net
present values of the interest payments that would otherwise be payable on the
principal amount prepaid (assuming the amortization scheduled in the Term
Notes): (i) after reducing each such interest payment by the amount that would
be yielded on each date for interest payments thereunder, if the amount of
principal prepaid was reinvested at a per annum interest rate equal to one-half
percent (1/2%) per annum above the rate determined by Agent to be in effect two
(2) Business Days prior to the date of such prepayment in the secondary market
for United States Treasury securities of an amount comparable to the principal
amount prepaid and with a term comparable to maturity as the principal amount
prepaid; and (ii) discounting the net present values of the relevant interest
payments at the per annum rate described in clause (i) above.

     1.103 "Prime Rate" shall mean the per annum interest rate established by
Agent as its prime rate for its borrowers as such rate may vary from time to
time, which rate is not necessarily the lowest rate on loans made by Agent at
any such time.

     1.104 "Prime-based Loan" shall mean a Loan which bears interest at a rate
based on the Prime-based Rate.

     1.105 "Prime-based Rate" shall mean, as of any day that rate of interest
which is the greater of: (i) the Prime Rate; or (ii) the Alternate Base Rate.

     1.106 "Prior Agreement" shall mean the Second Amended and Restated ABT
Building Products Corporation $175,000,000 Revolving and Term Credit Agreement
dated as of July 13, 1995 between Agent, certain of the Banks, Borrower and the
Permitted Borrowers as amended prior to the date hereof.

     1.107 "Purchase Agreement" shall mean the asset purchase agreement dated
as of September 25, 1992 between Company and Abitibi-Price Corporation.

     1.108 "Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December.

                                     -19-
<PAGE>
 
     1.109 "Request for Line of Credit Loan" shall mean a request for an
Advance under the Line Credit Notes issued by Company under this Agreement in
the form annexed hereto as Exhibit "I".

     1.110 "Request for Revolving Credit Loan" shall mean a request for an
Advance under the Revolving Credit Notes issued by Company or a Permitted
Borrower under this Agreement in the form annexed hereto as Exhibit "J".

     1.111 "Request for Swing Loan" shall mean a request for an Advance under
the Swing Loan Note issued by Company under this Agreement in the form annexed
hereto as Exhibit "K".

     1.112 "Requested Amounts" shall mean, on any date, an amount equal to the
sum of all Revolving Credit Loans, Bid Loans and Letters of Credit which have
been requested by Company or any Permitted Borrower, but which have not yet been
Advanced or issued.

     1.113 "Restricted Subsidiary" shall mean:

           (a)  ABT, ABT Canada, ABT Export, KenTech; and

           (b)  each other Subsidiary that is not a Non-Restricted Subsidiary.

     1.114 "Revolving Credit Commitment" shall mean:

           (a)  One Hundred Seventy Five Million Dollars ($175,000,000) from the
                date hereof until the first reduction or termination of the
                Revolving Credit Commitment pursuant to Section 2.6 or 2.10
                hereof; and

           (b)  thereafter, One Hundred Seventy Five Million Dollars
                ($175,000,000) minus the amount of each reduction pursuant to
                Section 2.6 or 2.10 hereof.

     1.115 "Revolving Credit Facility Fee" shall mean the commitment fee
payable to Agent for distribution to the Banks pursuant to Section 2.5 hereof.

     1.116 "Revolving Credit Loan" shall mean the revolving credit loans to be
advanced to the Company or a Permitted Borrower by the Banks pursuant to Section
2.1 or Section 3.6 hereof.

     1.117 "Revolving Credit Maturity Date" shall mean March 10, 2002, or such
later date as to which it may be extended, at the request of Company, pursuant
to Section 2.10 hereof.

     1.118 "Revolving Credit Notes" shall mean the Notes described in Section
2.1 hereof made in the form attached as Exhibit "L" hereto to each of the Banks:

           (a)  made by Company in aggregate principal amount equal to One
                Hundred 

                                     -20-
<PAGE>
 
                 Seventy Five Million Dollars ($175,000,000); and

            (b)  made by each Permitted Borrower in aggregate principal amount
                 equal to their respective Permitted Borrower Maximums for the
                 Revolving Credit Loan.

     1.119  "Subsidiaries" shall mean any other corporation, association, joint
stock company, or business trust of which more than fifty percent (50%) of the
outstanding voting stock is owned either directly or indirectly by Company or
one or more of its Subsidiaries or by Company and one or more of its
Subsidiaries.

     1.120  "Swing Loan" shall mean the swing loans to be advanced and
readvanced to Company from time to time pursuant to Section 4.1 hereof.

     1.121  "Swing Loan Commitment" shall mean, as of any date, the lesser of:

            (a)  Ten Million Dollars ($10,000,000); and

            (b)  the principal amount by which the Revolving Credit Commitment
                 exceeds the Usage.

     1.122  "Swing Loan Note" shall mean the Note described in Section 4.1
hereof made in the form attached as Exhibit "M" hereto to Agent.

     1.123  "Swing Loan Quoted Rate" shall mean, with respect to any advance of
the Swing Loan, the per annum rate of interest quoted by Agent and accepted by
Company for such Advance.

     1.124  "Tangible Net Worth" shall mean the total common shareholder's
equity of Company and the Subsidiaries or (where the context so indicates)
Company and the Restricted Subsidiaries, on a Consolidated basis, together with
the amounts, if any, of preferred stock which is classified as part of
shareholder's equity, as reflected on the most recent regularly prepared monthly
balance sheet of Company, which balance sheet shall be prepared in accordance
with GAAP, less: (i) the amount reflected on such balance sheet of all assets
classified as intangible assets (including, without limitation, goodwill, trade-
marks, trade names, patents, copyrights, franchises and unamortized debt
discount and expenses); and (ii) the aggregate amount expended for all
dividends, distributions, purchases, redemptions, other acquisitions or
retirements of capital stock of Company subsequent to the date of such balance
sheet to the extent not reflected on such balance sheet.

     1.125  "Term Installment Amount" shall mean, with respect to the Term Loan,
the amount of principal required pursuant thereto to be paid thereon on each
Quarterly Payment Date.

     1.126  "Term Loan" shall mean the term loan originally extended by certain
of the Banks 

                                     -21-
<PAGE>
 
pursuant to the Prior Agreement evidenced by the Term Notes.

     1.127  "Term Loan Maturity Date" shall mean April 3, 2001.

     1.128  "Term Notes" means the term notes made by Borrower as of April 3,
1995 under the Prior Agreement in original principal amount of:

            (a)  Seventeen Million Dollars ($17,000,000) in the case of the Note
                 made payable to Comerica Bank; and

            (b)  Eleven Million Dollars ($11,000,000) in the case of each of the
                 Notes made payable to Creditanstalt-Bankverein, First Union
                 National Bank of North Carolina and Harris Trust and Savings
                 Bank.

     1.129  "Termination Event" shall mean, (i) a "reportable event" described
in Section 4043 of ERISA or in the regulations thereunder (excluding events for
which the requirement for notice of such reportable event has been waived by the
PBGC) with respect to a Title IV Plan, or (ii) the withdrawal of Company, any
Subsidiary or any ERISA Affiliate from a Title IV Plan during a plan year in
which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA,
or (iii) the filing of a notice of intent to terminate a Title IV Plan or the
treatment of a Title IV Plan amendment as a termination under Section 4041 of
ERISA, or (iv) the institution of proceedings by the PBGC to terminate a Title
IV Plan or to appoint a trustee to administer a Title IV Plan, or (v) any other
event or condition which might constitute reasonable grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Title IV Plan, or (vi) the complete or partial withdrawal (within the
meaning of Section 4203 and 4205, respectively, of ERISA) of Company, any
Subsidiary or any ERISA Affiliate from a Multiemployer Plan, or (vii) the
insolvency or reorganization (within the meaning of Section 4245 and 4241,
respectively, or ERISA) or termination of any Multiemployer Plan, or (viii) the
failure to make any payment or contribution to any Pension Plan or Multiemployer
Plan or the making of any amendment to any Pension Plan which could reasonably
be expected to result in the imposition of a lien or the posting of a bond or
other security.

     1.130  "Total Liabilities" shall mean, as of the date of any determination
thereof, all indebtedness and obligations of Company and the Subsidiaries or
(where the context so indicates) Company and the Restricted Subsidiaries,
determined on a Consolidated basis in accordance with GAAP, including (without
limitation) all guaranties.

     1.131  "Usage" shall mean, as of any day, an amount equal to the sum of all
Revolving Credit Loans, Swing Loans and Bid Loans outstanding on such day, plus
the aggregate face amount of all unexpired Letters of Credit outstanding on such
day.

2.   THE INDEBTEDNESS: REVOLVING CREDIT AND BID LOANS
     ------------------------------------------------

     2.1    Revolving Credit Commitment.  Subject to the terms and conditions of
            ---------------------------                                         
this Agreement, each Bank severally agrees to lend to Company and Permitted
Borrowers, in any one 

                                     -22-
<PAGE>
 
or more of the Permitted Currencies, at any time and from time to time from the
Closing Date until the Revolving Credit Maturity Date, and Company and the
Permitted Borrowers may borrow, repay and reborrow sums not to exceed, in
aggregate amount at any time outstanding, (i) such Bank's respective Percentage
of Revolving Credit in effect from time to time, and (ii) in the case of each
Permitted Borrower, the Permitted Borrower Maximum for the Revolving Credit
Loans applicable to such Permitted Borrower. All of the Loans under this Section
2.1 shall be evidenced by Revolving Credit Notes under which advances,
repayments, and readvances may be made, subject to the terms and conditions of
this Agreement.

     2.2  Type of Loan and Maturity.  The Revolving Credit Notes, and all
          -------------------------                                      
principal and interest then outstanding thereunder, shall mature and become due
and payable in full on the Revolving Credit Maturity Date.  Each Revolving
Credit Loan from time to time outstanding hereunder shall be either a Prime-
based Loan or a Eurocurrency-based Loan as the Company or the applicable
Permitted Borrower may elect or as otherwise applicable pursuant to the
provisions hereof.  The amount and date of each Revolving Credit Loan, its
Applicable Interest Rate, its Interest Period, and the amount and date of any
repayment shall be noted on Agent's records, which records will be presumed
correct absent manifest error.

     2.3  Requests for Revolving Credit Loans.  Company or any Permitted
          -----------------------------------                           
Borrower may request a Revolving Credit Loan by delivery to Agent of a Request
for Revolving Credit Loan executed by an authorized officer of Company or of a
Permitted Borrower (with the countersignature of Company thereon) and subject to
the following:

          (a)  each such Request for Revolving Credit Loan shall set forth the
               information required on the Request for Revolving Credit Loan
               form including, in the case of a Eurocurrency-based Loan, the
               Permitted Currency therefor;

          (b)  each such Request for Revolving Credit Loan shall be delivered to
               Agent by 10:00 a.m. (Detroit time) three (3) Business Days prior
               to the proposed date of Loan, except in the case of a Prime-based
               Loan, for which the Request for Revolving Credit Loan must be
               delivered by 10:00 a.m. (Detroit time) on such proposed date;

          (c)  the principal amount of such Advance, plus the amount of any
               outstanding Advance under the Revolving Credit Notes having the
               same Applicable Interest Rate and Interest Period shall be at
               least: (i) in the case of a Prime-based Loan, Two Million Dollars
               ($2,000,000), or a greater integral multiple of One Hundred
               Thousand Dollars ($100,000); (ii) in the case of a Eurocurrency-
               based Loan of Dollars, Five Million Dollars ($5,000,000) or a
               greater integral multiple of One Hundred Thousand Dollars
               ($100,000), and (iii) in the case of a Eurocurrency-based Loan in
               an Alternative Currency, a multiple of 100,000 units of such
               Alternative Currency in a Dollar Amount equal to or greater than
               Five Million Dollars ($5,000,000);

                                     -23-
<PAGE>
 
          (d)  a Request for Revolving Credit Loan, once delivered to Agent,
               shall not be revocable by Company;

          (e)  the sum of: (i) the Requested Amounts as of the date for the
               requested Advance, plus (ii) the Usage as of the date for the
               requested Advance, minus (iii) the amount of any Advances to be
               refunded or converted with such Advance, shall not exceed the
               Revolving Credit Commitment;

          (f)  in the case of a Request for Revolving Credit Loan by a Permitted
               Borrower, the sum of: (i) such Permitted Borrower's Requested
               Amounts as of the date for the requested Advance, plus (ii) the
               Usage of such Permitted Borrower as of the date of the requested
               Advance, minus (iii) the amount of any Advances to such Permitted
               Borrower to be refunded or converted with such Advance, shall not
               exceed the Permitted Borrower Maximum applicable to Revolving
               Credit Loans for such Permitted Borrower;

          (g)  each Request for Revolving Credit Loan (other than one requesting
               only a conversion or refunding of an existing Advance under
               Section 7.3 hereof) shall constitute a certification by the
               Company and (if applicable) the Permitted Borrower as of the date
               thereof that all of the conditions set forth in Section 10.2
               hereof are satisfied as of the date of such request and shall be
               satisfied as of the date such Advance is requested.

          The Agent may advance funds under the Revolving Credit Notes upon
telephone request made by any one of those officers or agents of Company or a
Permitted Borrower authorized by resolution of Company's or such Permitted
Borrower's board of directors to make such requests.  Any such telephone request
shall satisfy the time requirements set forth in Section 2.3(b) above.  Company
and each Permitted Borrower hereby authorizes Agent and each Bank to disburse
Revolving Credit Loans pursuant to the instructions of any officer or agent so
identified.  On the same day as such telephonic request for an Advance is made,
the officer or agent requesting the Advance shall deliver a Request for
Revolving Credit Loan to Agent, executed by an authorized officer or agent of
Company and (if applicable) the Permitted Borrower and, until such Request for
Revolving Credit Loan is received by Agent, the telephone request itself shall
constitute the Company's and (if applicable) the Permitted Borrower's
certification of the matters set forth in Section 2.3(g) above.

     2.4  Disbursement of Loans.  Upon receiving any Request for Revolving
          ---------------------                                           
Credit Loan (or telephone request) under Section 2.3 hereof, Agent shall
promptly notify each Bank by wire, telex or by telephone, including facsimile
transmission (confirmed by wire or telex) of the date for such Advance, its
Applicable Interest Rate and the amount and currency of the Advance to be made
by said Bank pursuant to its Adjusted Percentage of the Revolving Credit
Commitment.  Unless the conditions for Loans are not then met each Bank shall,
not later than 2:00 p.m. (Detroit time) on the date of such Advance, make
available the amount of its Adjusted Percentage 

                                     -24-
<PAGE>
 
of the Advance in immediately available funds in the currency of the Advance to
Agent, at the office of Agent located at 500 Woodward Avenue, Detroit, Michigan.
Subject to submission of an executed Request for Revolving Credit Loan without
exceptions noted in the compliance certification therein, Agent shall make
available to Company or the applicable Permitted Borrower, not later than 4:00
p.m. (Detroit time) on such date, the aggregate of the amounts so received by it
in like funds by credit to an account of Company or the applicable Permitted
Borrower, maintained with Agent or to such other account or third party as
Company or the applicable Permitted Borrower, may direct. Unless Agent shall
have been notified by any Bank prior to the funding of any proposed Advance that
such Bank does not intend to make its Adjusted Percentage of the Advance
available, Agent may assume that such Bank has made such amount available on
such date and may, in reliance upon such assumption, make available to Company
or the applicable Permitted Borrower, a corresponding amount. If such amount is
not in fact made available to Agent by such Bank, Agent shall be entitled to
recover such amount on demand from such Bank. If such Bank does not pay such
amount forthwith upon Agent's demand therefor, the Agent shall promptly notify
Company or the applicable Permitted Borrower, and Company or the applicable
Permitted Borrower shall repay such amount to Agent. Agent shall also be
entitled to recover from such Bank or Company and such Permitted Borrower in the
currency of the Advance, as the case may be, interest on such amount in respect
of each day from the date such amount was made available by Agent to the date
such amount is recovered by Agent, at a rate per annum equal to: (i) in the case
of Company or a Permitted Borrower with respect to an Advance required pursuant
to Section 3.6 hereof, the Default Rate; (ii) in the case of a Bank with respect
to an Advance to be made pursuant to Section 3.7 hereof, the Federal Funds
Effective Rate for two (2) Business Days and thereafter the Default Rate; and
(iii) with respect to all other Advances, the Applicable Interest Rate, in the
case of Company or a Permitted Borrower, and the Federal Funds Effective Rate in
the case of a Bank. The obligation of any Bank to make any Advance shall not be
affected by the failure of any other Bank to make any Advance and no Bank shall
have any liability to Company or any Permitted Borrower, the Agent, or any other
Bank for another Bank's failure to make any Advance hereunder.

     2.5  Revolving Credit Facility Fee.  On each Quarterly Payment Date during
          -----------------------------                                        
the period from the Closing Date to the Revolving Credit Maturity Date, and on
the Revolving Credit Maturity Date, the Company shall pay to the Agent on behalf
of Banks, quarterly in arrears, the Revolving Credit Facility Fee in an amount
equal to the Revolving Credit Commitment, as reduced from time to time,
multiplied by the Margin in effect from time to time during such period.  Upon
receipt of such payment Agent shall make prompt payment to each Bank of its
share of the Revolving Credit Facility Fee, based upon its Percentage of the
Revolving Credit Commitment in effect during the applicable period.

     2.6  Optional Reduction or Termination of Revolving Credit Commitment.
          ----------------------------------------------------------------  
Upon at least five (5) Business Days' prior written notice to the Agent, the
Company may permanently reduce the Revolving Credit Commitment, in whole or in
part, provided that:

          (a)  each partial reduction of the Revolving Credit Commitment shall
               be in an aggregate amount equal to Five Million Dollars
               ($5,000,000) or an integral multiple thereof;

                                     -25-
<PAGE>
 
          (b)  each reduction or termination shall be accompanied by the payment
               of the Revolving Credit Facility Fee accrued on the amount of the
               Revolving Credit Commitment so reduced through the date of such
               reduction or termination;

          (c)  the Revolving Credit Commitment, as so reduced, shall not be less
               than the sum of undrawn face amount of outstanding Letters of
               Credit plus the principal amount of Bid Loans and Swing Loans
               then outstanding;

          (d)  the Company and Permitted Borrowers shall prepay Revolving Credit
               Loans in the amount, if any, by which the Usage as of the date of
               such reduction exceeds the amount of the Revolving Credit
               Commitment as so reduced, together with interest thereon to the
               date of prepayment and any additional amounts required thereon
               pursuant to Section 8.1 hereof; and

          (e)  to the extent such reduction in the Revolving Credit Commitment
               results from a reduction in the Revolving Credit Commitment
               pursuant to Section 2.10, such reduction shall be applied on a
               non-pro rata basis to reduce or terminate (as applicable) the
               portion of the Revolving Credit Commitment held by the Bank or
               Banks whose Percentage of Revolving Credit is being terminated.

     2.7  Purpose of Revolving Credit Loans.  As of the Closing Date an initial
          ---------------------------------                                    
Revolving Credit Loan shall be made, and is deemed to be requested hereby, in
the amount necessary to discharge in full all revolving credit advances
outstanding as of the Closing Date under and in connection with the Prior
Agreement other than revolving credit advances outstanding thereunder as of the
Closing Date with respect to which the "Eurodollar-based Rate" (as defined in
the Prior Agreement) is applicable.  Such revolving credit advances and any bid
loans outstanding under the Prior Agreement as of the Closing Date shall
continue to be held by the Banks which are party to the Prior Agreement in
accordance with their existing interests therein, and with principal and
interest payable thereon as and when provided in the Prior Agreement, until the
expiration of the then existing "Interest Periods" provided for such advances
under the Prior Agreement, whereupon they shall be paid by Company or, if
applicable, the relevant Permitted Borrower, or renewed as Advances hereunder.
Notwithstanding the foregoing sentence, however, such advances shall in all
other respects be subject to the terms of this Agreement and may be accelerated
in accordance with the terms hereof and shall constitute Usage hereunder.
Revolving Credit Loans shall be available to and used by Company and the
Permitted Borrowers for their general corporate purposes, to fund intercompany
loans and advances to Subsidiaries for the general corporate purposes of such
Subsidiaries and, subject to the requirements of Section 13.9 hereof, to finance
acquisitions by Company or its Restricted Subsidiaries of business assets for
themselves or additional Subsidiaries.

     2.8  Bid Rate Loans.
          -------------- 

                                     -26-
<PAGE>
 
          (a)  The Bid Rate Option.  From the Closing Date to but excluding the
               -------------------                                             
               Revolving Credit Maturity Date, the Company or any Permitted
               Borrower may request the Banks to make offers to make Bid Loans;
               provided, however; (i) that the Banks may, but shall have no
               obligation to, make such offers and the Company or any Permitted
               Borrower may, but shall have no obligation to, accept any such
               offers; (ii) no Bid Quote Request shall be submitted within ten
               (10) Business Days of the submission of any other Bid Quote
               Request or the making of any Bid Loan; (iii) neither Company nor
               any Permitted Borrower shall be entitled to request or receive
               any Bid Loan which, when added to the aggregate principal amount
               of all other Bid Loans to be outstanding on the date for which
               the Advance of such Bid Loan is requested, would exceed the Bid
               Loan Maximum; (iv) neither Company nor any Permitted Borrower
               shall be entitled to request any Bid Loan if, upon such request,
               the sum of the Requested Amounts and the Usage would exceed the
               Revolving Credit Commitment, and (v) no Permitted Borrower shall
               be entitled to request any Bid Loan if, upon such request, the
               sum of such Permitted Borrower's Requested Amounts and its Usage
               would exceed its Permitted Borrower Maximum.

          (b)  Bid Quote Request.  When the Company or a Permitted Borrower
               -----------------                                           
               wishes to request offers to make Bid Loans under this Section
               2.8, it shall transmit to the Agent by telex or telecopy a Bid
               Quote Request hereto no later than 10:00 a.m. (Detroit time) at
               least four (4) Business Days prior to the date of the Bid Loan
               request therein, specifying:

               (i)   the proposed date of the Bid Loan, which shall be a
                     Business Day;

               (ii)  the aggregate amount of such Bid Loan, which shall be in a
                     Dollar Amount of Five Million Dollars ($5,000,000) or a
                     larger multiple of One Million Dollars ($1,000,000);

               (iii) the duration of not more than three (3) Interest Periods
                     for which Bid Quotes are requested; and

               (iv)  in the case of a Bid Quote Request for a Bid Loan bearing
                     interest at the Eurocurrency-based Rate, the Permitted
                     Currency therefor.

          (c)  Bid Invitation.  Upon receipt of a Bid Quote Request, the Agent
               --------------                                                 
               shall by 3:00 p.m. (Detroit time), on the same day of Agent's
               receipt of such Bid Quote Request, notify each Bank by telephone
               promptly confirmed by telex or telecopy of such Bid Quote
               Request, which shall constitute an invitation by the Company or
               the applicable Permitted Borrower to each Bank to submit Bid
               Quotes.

                                     -27-
<PAGE>
 
          (d)  Submission and Contents of Bid Quotes.  Each Bank may submit a
               -------------------------------------                         
               Bid Quote containing an offer or offers to make Bid Loans in
               response to any Bid Quote Request.  Each Bid Quote (i) must be
               submitted to the Agent by telex or telecopy not later than 11:30
               a.m. (Detroit time) three (3) Business Days prior to the proposed
               date of the Bid Loan; provided that any Bid Quote submitted by
               the Agent (or any Affiliate of the Agent) in its capacity as a
               Bank, shall be delivered to the Company or (if applicable) the
               Permitted Borrower which issued the Bid Quote Request no later
               than fifteen (15) minutes prior to the time by which the Banks
               generally are required to submit Bid Quotes to Agent; and (ii)
               each Bid Quote shall specify:

                    (A)  the proposed date of the Bid Loan;

                    (B)  the principal amount of the Bid Loan for which each
                         such Bid Quote is being made, which principal amount
                         (1) in the case of a Bid Quote for an Advance in
                         Dollars, must be in a minimum of Five Million Dollars
                         ($5,000,000) or a larger multiple of One Million
                         Dollars ($1,000,000), (2) in the case of a Bid Quote
                         for an Advance in an Alternative Currency, must be in a
                         Dollar Amount equal to or greater than Five Million
                         Dollars ($5,000,000), (3) may not exceed the principal
                         amount of the Bid Loans for which offers were
                         requested, (4) may not exceed the difference between
                         Revolving Credit Commitment and the Usage as of such
                         date multiplied by such Bank's Adjusted Percentage
                         calculated as of the date for the Advance of the Bid
                         Loan, and (5) with respect to any Bid Quote made in
                         response to a Bid Quote Request by a Permitted
                         Borrower, together with all other Bid Loans outstanding
                         from such Permitted Borrower to such Bank, shall not
                         exceed the face amount of the Bid Note made by such
                         Permitted Borrower to such Bank;

                    (C)  the Interest Period or Interest Periods for which each
                         such Bid Quote is being made;

                    (D)  the margin above or below the Eurocurrency Rate offered
                         by such Bank for each such Bid Loan; and

                    (E)  the identity of the quoting Bank.

                    Any Bid Quote shall be disregarded if it does not comply
                    with the requirements of this subsection (d), contains
                    qualifying, conditional or similar language, or proposes
                    terms other than or in addition to

                                     -28-
<PAGE>
 
                     those set forth in the applicable Bid Quote Request.

          (e)  Notice to and Acceptance.  The Agent shall, by 12:30 p.m.
               ------------------------                                 
               (Detroit time) three (3) Business Days prior to the date of the
               proposed Bid Loan, notify the Company and (if applicable) the
               Permitted Borrower of the terms of any Bid Quote submitted by a
               Bank in accordance with subsection (d) above and, in such notice,
               shall specify (i) the aggregate principal amount of Bid Loans for
               which Bid Quotes have been received, and (ii) the respective
               principal amounts and Margins so offered.  Not later than 1:00
               p.m. (Detroit time) three (3) Business Days prior to the proposed
               date for such Bid Loan, the Company or the applicable Permitted
               Borrower (with the countersignature of Company) shall irrevocably
               notify the Agent of its acceptance or non-acceptance of the
               offers so delivered to it, by delivering to Agent a Bid
               Acknowledgement provided that:

               (i)   the aggregate principal amount of the Bid Loans accepted
                     may not exceed the applicable amount set forth in the
                     related Bid Quote Request;

               (ii)  the principal amount of each Bid Loan: (a) if in Dollars,
                     must be Five Million Dollars ($5,000,000) or the Dollar
                     Amount thereof, or a larger multiple of One Million Dollars
                     ($1,000,000), and (b) if in an Alternative Currency, must
                     be in a Dollar Amount equal to or greater than Five Million
                     Dollars ($5,000,000);

               (iii) acceptance of offers may only be made on the basis of
                     ascending interest rates.

          (f)  Notice to and Funding by Banks.  Agent shall: (i) by 2:00 p.m.
               ------------------------------                                
               (Detroit time) three (3) Business Days prior to the date of the
               proposed Bid Loan notify each Bank whose Bid Quote has been
               accepted of the aggregate principal amount of offers that have
               been accepted, and such Bank's share thereof, by delivering to
               each such Bank a copy of the related Bid Acknowledgement; and
               (ii) by 1:00 p.m. (Detroit time) two (2) Business Days prior to
               the date of the proposed Bid Loan, notify Company and (if
               applicable) the Permitted Borrower and each such Bank of the
               Eurocurrency Rate for the Interest Period applicable to such Bid
               Loan.  Each such Bank shall by noon (Detroit time) on the date
               for such Bid Loan, make such Bid Loan available by depositing the
               proceeds thereof, in immediately available funds, in an account
               maintained and designated by the Company or the applicable
               Permitted Borrower at the principal office of the Agent.

          (g)  Allocation by Agent.  If offers are made by two or more Banks
               -------------------                                          
               with the same Bid Rate, for a greater aggregate principal amount
               than the amount 

                                     -29-
<PAGE>
 
               in respect of which offers are accepted, the principal amount of
               Bid Loans with respect to which such offers are accepted shall be
               allocated by the Agent among such Banks as nearly as possible (in
               such multiples of One Hundred Thousand Dollars ($100,000), as the
               Agent may deem appropriate) in proportion to the aggregate
               principal amount of such offers. Determinations by the Agent of
               the amounts of Bid Loans shall be conclusive in the absence of
               manifest error.

          (h)  Bid Loan Records.  Each Bank shall record in its records, or on a
               ----------------                                                 
               schedule attached to its Bid Notes, the date and amount of each
               Bid Loan made by such Bank, the Applicable Interest Rate with
               respect thereto, each repayment thereof and the dates on which
               each Interest Period for such Bid Loans shall begin and end. The
               aggregate unpaid principal amount so recorded shall be conclusive
               evidence of the principal amount owing and unpaid on such Bid
               Notes, absent manifest error. The failure to so record any such
               amount or any error in so recording any such amount shall not,
               however, limit or otherwise affect the obligations of the Company
               or any Permitted Borrower hereunder or under any such Bid Note.

     2.9  Currency Appreciation; Reduction of Indebtedness.  If at any time the
          ------------------------------------------------                     
Dollar Amount of Usage is at any time greater than one hundred five percent
(105%) of the Revolving Credit Commitment, the Company and the Permitted
Borrowers shall, immediately on demand by Agent, repay Swing Loans, Revolving
Credit Loans or Bid Loans, by an amount equal to the amount by which the Dollar
Amount of Usage exceeds the Revolving Credit Commitment.

     2.10 Extensions of Revolving Credit Maturity Date.
          -------------------------------------------- 

          (a)  Extension Request.  Notwithstanding anything contained in this
               -----------------                                             
               Agreement to the contrary, not later than four (4) years and
               sixty (60) days prior to the Revolving Credit Maturity Date then
               in effect, the Company may, by delivery of a duly completed
               Extension Request, irrevocably request that each Bank extend the
               then existing Revolving Credit Maturity Date for additional
               periods of not greater than one year.  Promptly upon receipt of
               an Extension Request the Agent shall notify each Bank thereof, by
               delivering to each Bank a copy of the Extension Request.

          (b)  Responses to Extension Request.  Each Bank shall, within thirty
               ------------------------------                                 
               (30) days of receipt of an Extension Notice, notify the Agent
               whether it consents to the request of the Company set forth in
               such Extension Request, such consent to be in the sole discretion
               of such Bank.  If any Bank does not so notify the Agent of its
               decision within such thirty (30) day period, such Bank shall be
               deemed not to have consented to such request of the Company.

          (c)  Notice of Consents.  The Agent shall promptly notify the Company
               ------------------                                              

                                     -30-
<PAGE>
 
               whether the Banks have consented to such request.  If the Agent
               does not so notify the Company within thirty five (35) days of
               such Extension Request, the Agent shall be deemed to have
               notified the Company that the Banks have not consented to the
               Company's request.

          (d)  Non-Consenting Banks.  In the event that any Bank elects not to
               --------------------                                           
               extend the Revolving Credit Maturity Date, or fails to so notify
               the Agent of such consent, (i) if any other Bank which agrees to
               the requested extension, or any other financial institution
               acceptable to the Company and the Agent offers to purchase such
               non-consenting Bank's Loans, Notes and rights and obligations
               hereunder, such non-consenting Bank will promptly assign, sell
               and transfer all of its right, title, interest and obligations
               with respect to the foregoing to such other Bank or financial
               institution pursuant to Section 16.5(a) hereof, or (ii) Company
               may, in accordance with the provisions of Sections 2.6 and 5.6
               hereof reduce the Revolving Credit Commitment by an amount equal
               to such Bank's Percentage of Revolving Credit whereupon such
               nonconsenting Bank's rights and obligations to make Revolving
               Credit Loans, Bid Loans, and to participate in Letter of Credit
               shall be terminated.

          (e)  Extension Denial.  In the event that any Bank fails to grant an
               ----------------                                               
               Extension Request requesting an extension of the Revolving Credit
               Maturity Date and, on or before ten (10) days prior to the
               Revolving Credit Maturity Date then in effect, (i) no Bank or
               financial institution acquires the Loans, Notes and other rights
               and obligations of such non-consenting Bank, and (ii) the Company
               has not elected to reduce the Revolving Credit Commitment
               pursuant to subsection (d)(ii) above; the Extension Request shall
               be deemed to be denied.

          (f)  Extension Consent.  In the event that either: (i) all of the
               -----------------                                           
               Banks consent to the Extension Request; (ii) each Bank that did
               not consent to the Extension Request is replaced pursuant to
               subsection (d)(i) above, or (iii) the Revolving Credit Commitment
               is reduced by an amount equal to the Percentage of Revolving
               Credit of such nonconsenting Bank or Banks; the Revolving Credit
               Maturity Date shall be extended to the date designated on the
               Extension Request.

3.   LETTERS OF CREDIT
     -----------------

     3.1  Letters of Credit.  Subject to the terms and conditions of this
          -----------------                                              
Agreement, Issuing Banks may, at the request of Company or of a Permitted
Borrower (with the countersignature of Company) which request shall not
unreasonably be denied, at any time and from time to time from the Closing Date
until the third (3rd) Business Day prior to the Revolving Credit Maturity Date,
issue Letters of Credit for the account of Company or any Permitted Borrower, in
an aggregate amount at any one time outstanding not to exceed the Letter of
Credit Maximum.  The 

                                     -31-
<PAGE>
 
Letter of Credit or Letters of Credit to be issued in support of the Permitted
Bond Financing shall provide an initial expiration date not later than three (3)
years from the date of its issuance (subject to renewals) and each other Letter
of Credit shall provide an initial expiration date not later than one (1) year
from its date of issuance (subject to renewals), and each Letter of Credit shall
provide that it is available by drafts drawn at sight and presentation of
documents, provided, that each Letter of Credit which is a standby letter of
credit shall expire not less than three (3) Business Days and each Letter of
Credit which is a trade letter of credit shall expire not less than thirty (30)
Business Days prior to the Revolving Credit Maturity Date.

     3.2  Conditions to Issuance.  No Letter of Credit shall be issued pursuant
          ----------------------                                               
to Section 3.1 hereof unless, as of the date the issuance of such Letter of
Credit is requested:

          (a)  the face amount of the Letter of Credit requested, plus the
               undrawn face amount of all other outstanding Letters of Credit
               will not exceed the Letter of Credit Maximum;

          (b)  (i) the Requested Amounts, plus the Usage as of the date for the
               requested issuance, will not exceed the Revolving Credit
               Commitment, and (ii) with respect to any Letter of Credit
               requested by a Permitted Borrower, such Permitted Borrower's
               Requested Amounts, plus its Usage as of the date for the
               requested issuance, shall not exceed its Permitted Borrower
               Maximum;

          (c)  the execution of the Letter of Credit Agreement (if any) with
               respect to the Letter of Credit requested will not violate the
               terms and conditions of any contract, agreement or other
               borrowing of Company or the applicable Permitted Borrower;

          (d)  Company or the applicable Permitted Borrower shall have delivered
               to the relevant Issuing Bank, not less than five (5) Business
               Days prior to the requested date for issuance, the Letter of
               Credit Agreement related thereto (if any), together with such
               other documents and materials as may be required pursuant to the
               terms thereof, and the terms of the proposed Letter of Credit
               shall be satisfactory to the relevant Issuing Bank;

          (e)  prior to the issuance of the Letter of Credit or Letters of
               Credit in support of the Permitted Bond Financing, the applicable
               Permitted Borrower shall have executed and delivered the Bond
               Pledge Agreement to the Issuing Bank;

          (f)  no order, judgment or decree of any court, arbitrator or
               governmental authority shall purport by its terms to enjoin or
               restrain the applicable Issuing Bank from issuing the Letter of
               Credit, or any Bank from taking an assignment of its interest
               pursuant to Section 3.3 hereof, and no law, rule, regulation,
               request or directive (whether or not having the force of law) of

                                     -32-
<PAGE>
 
               or from any governmental authority shall prohibit or request that
               the applicable Issuing Bank refrain from issuing, or any Bank
               refrain from taking an assignment of its interest in the Letter
               of Credit requested or letters of credit generally;

          (g)  the relevant Issuing Bank shall have received the issuance fee
               required in connection with the issuance of such Letter of Credit
               pursuant to Section 3.5 hereof;

          (h)  all of the conditions set forth in Section 10.2 hereof are
               satisfied as of the date of such request and shall be satisfied
               as of the date requested for issuance of such Letter of Credit;
               and

          (i)  in the case of a Letter of Credit issued in support of the
               obligations of Company and/or ABT in connection with Permitted
               Bond Financing, the Issuing Bank shall have confirmed to Agent
               and the Banks that the conditions to effectiveness of the
               documents and agreements governing the Permitted Bond Financing
               shall be satisfied upon the issuance of such Letter of Credit.

Each Letter of Credit Agreement submitted to Agent pursuant hereto shall
constitute the certification by Company and (if applicable) the relevant
Permitted Borrower of the matters set forth in this Section 3.2(a) through (i).

     3.3  Participations in Letters of Credit.  Immediately upon the issuance of
          -----------------------------------                                   
any Letter of Credit, each Bank shall be deemed to have, without further action
on the part of the relevant Issuing Bank, Agent or any Bank, irrevocably and
unconditionally purchased and received, without recourse or warranty, a
participation in and assignment of the Issuing Bank's engagement under such
Letter of Credit in an amount equal to each such Bank's then Adjusted Percentage
of the face amount of such Letter of Credit, and Banks hereby absolutely and
unconditionally assume, as primary obligors and not sureties, and
unconditionally agree to pay and discharge when due in accordance with the terms
hereof, their respective Adjusted Percentages of the Letter of Credit Payments
under such Letters of Credit.  Each Issuing Bank shall within one month of
issuance of any Letter of Credit deliver to each Bank a Letter of Credit Notice
with respect to the issuance of each Letter of Credit issued by it, specifying
the amount thereof and each Bank's Adjusted Percentage thereof as of the date of
such issuance.

     3.4  Letter of Credit Fees.  Company and each Permitted Borrower agrees to
          ---------------------                                                
pay to Agent, for the accounts of the Banks, Letter of Credit Fees with respect
to the undrawn face amount of their respective Letters of Credit issued pursuant
hereto at a per annum rate equal to the Margin applicable for Letters of Credit.
Such fees shall be payable on each Quarterly Payment Date and shall be assessed
for the actual number of days elapsed from the date of issuance of the Letter of
Credit until its expiration and shall be payable (i) quarterly in advance in the
case of fees payable with respect to the Letter of Credit issued in support of
the Permitted Bond Financing and (ii) quarterly in arrears in each other case.
Upon receipt of such payment, 

                                     -33-
<PAGE>
 
Agent shall make prompt payment to each Bank of its share of the Letter of
Credit Fees, based upon the Adjusted Percentage interests of each such Bank in
the Letters of Credit to which such Letters of Credit Fees relate.

          For the purpose of calculation of such Letter of Credit Fees, Agent
shall, as of each Quarterly Payment Date, calculate the Dollar Amount equivalent
to the face amounts of Letters of Credit denominated in Alternative Currencies
and, until the next succeeding quarterly calculation of such Dollar Amount, such
Letter of Credit Fees shall be assessed on the basis of such calculation.

     3.5  Issuance Fees.  In connection with the Letters of Credit, the Company
          -------------                                                        
and applicable Permitted Borrowers will pay, for the sole accounts of the
relevant Issuing Bank, letter of credit issuance fees and standard
administration, payment and cancellation charges assessed by such Issuing Bank,
at the times, in the amounts and on the terms separately agreed upon (or to be
separately agreed upon from time to time) between such Issuing Bank and Company
or the applicable Permitted Borrower.

                                     -34-
<PAGE>
 
     3.6  Draws Under Letters of Credit.
          ----------------------------- 

          (a)  Upon receipt of any draw (or, in the case of the Letter of Credit
               related to the Permitted Bond Financing, receipt of notice of a
               draw from the trustee for the bondholders under the Permitted
               Bond Financing) against a Letter of Credit, the relevant Issuing
               Bank shall promptly notify Company and (if applicable) the
               relevant Permitted Borrower of the amount of such draw and the
               date for payment of such draw; provided, however, that in the
               case of the Letter of Credit or Letters of Credit issued in
               support of the Permitted Bond Financing, any notice of drawing
               delivered to Company or ABT by the trustee for the bondholders
               thereunder shall constitute the Issuing Bank's notice of such
               drawing.  The Company and each Permitted Borrower hereby agree to
               deposit with the relevant Issuing Bank, on the first Business Day
               subsequent to such notice, funds sufficient to pay all Letter of
               Credit Obligations with respect to such draws.  So long as all of
               the conditions set forth in Sections 2.3 and 10.2 hereof are
               complied with, Company and the Permitted Borrowers shall be
               entitled to fund such deposit with proceeds of an Advance
               requested in accordance with Section 2.3 hereof.  In the event
               that sufficient funds are not so deposited on or before the date
               for payment of a draw, the relevant Issuing Bank shall so notify
               Agent and Agent shall so notify Banks and, immediately upon the
               Issuing Bank's payment under any Letter of Credit and for all
               purposes of this Agreement and the Documents, the amount paid as
               a result of such draw: (i) notwithstanding anything to the
               contrary set forth in or required under Section 2.3 hereof, shall
               constitute an advance of a Revolving Credit Loan made by Banks in
               accordance with the Adjusted Percentages in effect on such date,
               whether or not the Company or the relevant Permitted Borrower is
               then entitled to request Advances under this Agreement or is in
               default hereunder or otherwise (and the Company and the Permitted
               Borrowers shall not be entitled to refuse any such Advance); (ii)
               shall be evidenced by the Revolving Credit Notes of Company or
               the Permitted Borrower to whom such Letter of Credit relates;
               (iii) shall bear interest at the Default Rate until repaid; and
               (iv) shall be due and payable on demand.

          (b)  Any amounts so paid by an Issuing Bank pursuant to a draft
               against any Letter of Credit (regardless of whether it is
               considered to be an Advance), with interest thereon as aforesaid,
               shall be considered to be a Revolving Credit Loan for all
               purposes of this Agreement and the Documents, and shall be
               covered thereby to the full extent thereof.

          (c)  In the event that Company or any Permitted Borrower fails to
               deposit with an Issuing Bank funds sufficient to pay Letter of
               Credit Obligations with respect to any draw (whether through an
               Advance requested pursuant to Section 2.3 or otherwise) on a
               timely basis, from the date of the Issuing Bank's notice to Agent
               of its payment on such draw until such Letter of

                                     -35-
<PAGE>
 
               Credit Obligations resulting from such draw shall have been paid,
               neither Company nor any Permitted Borrower shall be entitled to
               request or receive any direct Advance under Revolving Credit
               Notes or to request or receive any other Loans or the issuance of
               Letters of Credit hereunder.

     3.7  Funding of Letter of Credit Payment as Advance.  By or before 11:30
          ----------------------------------------------                     
a.m. (Detroit Time) on the date for payment of any draw on any Letter of Credit,
the relevant Issuing Bank shall notify Agent and Agent shall promptly notify
each Bank by wire, telex or by telephone (confirmed by wire, telecopy or telex)
of the amount of such draw (providing each Bank with a copy of the draft and
accompanying certificate), and, if applicable, the amount of resulting Advances
to be made pursuant to Section 3.6(a) hereof.  If such an Advance is required
pursuant to Section 3.6(a) hereof, each Bank hereby irrevocably and
unconditionally agrees to make available the amount of its Adjusted Percentage
of such Advance in immediately available funds in Dollars to Agent, at the
office of Agent located at 500 Woodward Avenue, Detroit, Michigan, no later than
2:00 p.m. (Detroit time) on the date the Letter of Credit Payments are to be
made in connection with such draw and Agent shall promptly deliver to the
relevant Issuing Bank in like funds, all amounts so made available to it.  In
the event such draw is not considered to be or is subsequently determined not to
constitute an Advance hereunder, each Bank shall nevertheless be obligated to
purchase from the Issuing Bank a participation interest in its Adjusted
Percentage of the draw, for an amount equal to its Adjusted Percentage thereof.
If such amount is not in fact made available by such Bank, as aforesaid, the
Issuing Bank shall be entitled to recover such amount on demand from such Bank.
If such Bank does not pay such amount forthwith upon the Issuing Bank's demand
therefor, the Issuing Bank shall promptly notify Company or the relevant
Permitted Borrower and Company or such Permitted Borrower shall immediately
repay such amount.  The Issuing Bank shall also be entitled to recover from such
Bank, Company or the relevant Permitted Borrower, as the case may be, interest
on such amount in respect of each day from the date such amount was paid by the
Issuing Bank pursuant to the draft related thereto, at a rate per annum equal
to: (i) in the case of Company or a Permitted Borrower, the Default Rate; and
(ii) in the case of a Bank, the Federal Funds Effective Rate until two (2)
Business Days after such amount was paid by the Issuing Bank and thereafter, the
Default Rate determined in accordance with clause (a)(ii) of the definition
thereof.  The obligation of any Bank to make any Advance hereunder shall not be
affected by the failure of any other Bank to make any Advance hereunder, or to
fund its Adjusted Percentage of any Letter of Credit Payment, as the case may
be, and no Bank shall have any liability to Company, any Permitted Borrower, the
Agent, the Issuing Bank or any other Bank for another Bank's failure to make any
such Advance hereunder, or to fund the Adjusted Percentage of any other Bank.

     3.8  Obligations Irrevocable.  The obligations of Company and the Permitted
          -----------------------                                               
Borrowers to make payments to Issuing Banks with respect to Letter of Credit
Obligations under Section 3.6 hereof, and the obligations of Banks to make
Advances with respect to and purchase interests in, Letter of Credit Payments
pursuant to Section 3.7 hereof, shall be irrevocable and not subject to any
qualification or exception whatsoever, including:

          (a)  invalidity or unenforceability of this Agreement or any other
               Documents or any portions hereof or thereof;

                                     -36-
<PAGE>
 
          (b)  the existence of any claim, set-off, defense or other right which
               Company or any Permitted Borrower or any Bank may have against a
               beneficiary named in a Letter of Credit, Agent, the Issuing Bank,
               any Bank or any other Person;

          (c)  any draft, certificate or any other document presented in
               connection with a Letter of Credit proving to be forged,
               fraudulent, invalid or insufficient in any respect or any
               statement therein being untrue or inaccurate in any respect;

          (d)  the occurrence of any Default or Event of Default;

          (e)  payment by the Issuing Bank (other than as a result of its gross
               negligence or willful misconduct) under any Letter of Credit
               against presentation of a draft or accompanying certificate which
               does not comply with the terms of the Letter of Credit;

          (f)  any failure, omission, delay or lack on the part of Agent, the
               Issuing Bank or any party to this Agreement or any of the
               Documents to enforce, assert or exercise any right, power or
               remedy conferred upon Agent, the Issuing Bank or any such party
               under this Agreement or any Documents, or any other acts or
               omissions on the part of the Agent, the Issuing Bank or any such
               party;

          (g)  the voluntary or involuntary liquidation, dissolution, sale or
               other disposition of all or substantially all the assets of the
               Company, any Permitted Borrower and/or the Subsidiaries; the
               receivership, insolvency, bankruptcy, assignment for the benefit
               of creditors, reorganization, arrangements, composition with
               creditors or readjustment or other similar proceedings affecting
               the Company and/or the Subsidiaries, or any of their respective
               assets, or any allegation or contest of the validity of this
               Agreement or any of the Documents, in any such proceedings; and

          (h)  any other circumstance or happening whatsoever, whether or not
               similar to any of the foregoing, and any other event or action
               that would, in the absence of this clause, result in the release
               or discharge by operation of law of the Company or any Permitted
               Borrower from the performance or observance of any obligation,
               covenant or agreement contained in this Agreement or any of the
               Documents.

     3.9  Risk Under Letters of Credit.
          ---------------------------- 

          (a)  In assigning and handling of Letters of Credit and any security
               therefor, or any documents or instruments given in connection
               therewith, the Issuing 

                                     -37-
<PAGE>
 
               Banks shall (as among the Issuing Banks and the Banks) have the
               sole right to take or refrain from taking any and all actions
               under or upon their respective Letters of Credit; provided,
               however, that without the prior written concurrence of the Banks,
               the Issuing Banks shall not: (i) amend, modify, terminate or
               release any of the obligations of Company or any Permitted
               Borrower respecting Letters of Credit or under any of said
               documents or instruments or any security interest, mortgage or
               guaranty given with respect thereto except releases of bonds
               which are remarketed pursuant to and as provided in the Bond
               Pledge Agreement; (ii) compromise any claim or waive any right or
               privilege against Company or any Permitted Borrower; or (iii)
               settle any litigation respecting any Letter of Credit or any of
               said documents and instruments.

          (b)  Subject to other terms and conditions of this Agreement, each
               Issuing Bank shall hold the Letter of Credit Agreements and the
               documents related thereto in its own name and shall make all
               collections thereunder and otherwise administer the Letters of
               Credit in accordance with its regularly established practices and
               procedures and the Issuing Banks will have no further obligation
               with respect thereto.  In the administration of Letters of
               Credit, the Issuing Banks shall not be liable (except for the
               consequences solely resulting from its own willful misconduct or
               gross negligence) for any action taken or omitted, and shall be
               entitled at all times to rely upon on the advice of counsel,
               accountants, appraisers and other experts selected by them and
               may rely upon any notice, communication, certificate or other
               statement from Company or any Permitted Borrower, beneficiaries
               of Letters of Credit, or any other Person which such Issuing Bank
               believes to be authentic.  Each Issuing Bank will, upon request,
               furnish the Banks with copies of their respective Letter of
               Credit Agreements, Letters of Credit and documents related
               thereto.

          (c)  In connection with the issuance and administration of Letters of
               Credit and the assignments hereunder, the Issuing Banks make no
               representation and shall have no responsibilities with respect
               to: (i) the obligations of Company or any Permitted Borrower or,
               the validity, sufficiency or enforceability of any document or
               instrument given in connection therewith, or the taking of any
               action with respect to same; (ii) the financial condition of, any
               representations made by, or any act or omission of Company or any
               Permitted Borrower or any other Person; or (iii) any failure or
               delay in exercising any rights or powers possessed by the Issuing
               Bank in its capacity as issuer of Letters of Credit.

          (d)  If at any time Agent or an Issuing Bank shall recover any part of
               any unreimbursed amount for any Letter of Credit Obligation, or
               any interest thereon, they shall receive same for the pro rata
               benefit of the Banks in accordance with their respective Adjusted
               Percentage interests therein and

                                     -38-
<PAGE>
 
               shall promptly deliver to each Bank its share thereof, less
               Bank's pro rata share of the costs of such recovery, including
               court costs and reasonable attorney's fees. If at any time any
               Bank shall receive from any source whatsoever any payment on any
               such unreimbursed amount or interest thereon in excess of such
               Bank's share of such payment, such Bank will promptly pay over
               such excess to Agent for redistribution in accordance with this
               Agreement.

     3.10 Indemnification.  The Company and each Permitted Borrower hereby
          ---------------                                                 
indemnifies and holds Agent, each Issuing Bank and each of the Banks harmless
from and against any and all claims, damages, losses, liabilities, costs or
expenses whatsoever which any such party may incur (or which may be claimed
against any such party by any person) by reason of or in connection with the
execution and delivery or transfer of, or payment or failure to pay under, any
Letter of Credit; provided, however, that the Company and the Permitted
Borrowers shall not be required to indemnify Agent, the Issuing Banks or the
Banks pursuant to this Section 3.10 for claims, damages, losses, liabilities,
costs or expenses to the extent, but only to the extent, caused by the willful
and wrongful failure or willful and wrongful misconduct or gross negligence of
the Agent the relevant Issuing Bank or such Bank.  Nothing in this Section 3.10
is intended nor shall be deemed to limit, reduce or otherwise affect in any
manner whatsoever the reimbursement obligation of Company or any Permitted
Borrower contained in Section 3.6 hereof.

     3.11 Right of Reimbursement.  Each Bank agrees to reimburse the Agent and
          ----------------------                                              
the Issuing Banks on demand, pro rata in accordance their Percentages, for: (i)
the out-of-pocket costs and expenses of the Agent or the Issuing Bank to be
reimbursed by Company or a Permitted Borrower pursuant to any Letter of Credit
Agreement or any Letter of Credit, to the extent not reimbursed by Company or a
Permitted Borrower; and (ii) any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, fees, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against an Issuing Bank in its capacity as issuer of any
Letter of Credit in any way relating to or arising out of this Agreement, any
Letter of Credit, any Letter of Credit Agreement, except to the extent that such
liabilities, losses, costs or expenses were incurred by the Issuing Bank as a
result of its gross negligence or willful misconduct.

4.   THE INDEBTEDNESS: SWING LOAN
     ----------------------------

     4.1  Swing Loan.  Subject to the terms and conditions of this Agreement,
          ----------                                                         
Agent agrees to lend to Company, in Dollars, at any time from the Closing until
the Revolving Credit Maturity Date, Swing Loans in aggregate principal amount
outstanding from time to time not to exceed the Swing Loan Commitment.  All of
the Loans under this Section 4.1 shall be evidenced by the Swing Loan Note under
which advances, repayments and readvances may be made, subject to the terms of
this Agreement.

     4.2  Type of Loan and Maturity.  The Swing Loan Note, and all principal and
          -------------------------                                             
interest outstanding thereunder, shall mature and become due and payable on the
Revolving Credit Maturity Date. Each Swing Loan from time-to-time outstanding
hereunder shall bear interest

                                     -39-
<PAGE>
 
either at its Swing Loan Quoted Rate (if offered by Agent and accepted by
Company) or the Prime-based Rate. The amount and date of each Swing Loan, its
Applicable Interest Rate, and the date and amount of any repayment shall be
noted on Agent's records, which records shall be presumed correct absent
manifest error.

     4.3  Requests for Swing Loans.  Company may request Swing Loans by delivery
          ------------------------                                              
to Agent of a Request for Swing Loan executed by an authorized officer of
Company and subject to the following:

          (a)  each such Request for Swing Loan shall set forth all other
               information required on the Request for Swing Loan form
               including, in the case of any Advance at a Swing Loan Quoted
               Rate, the interest rate and Interest Period quoted by Agent to
               Company with respect thereto;

          (b)  each such Request for Swing Loan shall be delivered to Agent by
               10:00 a.m. (Detroit time) on such proposed date;

          (c)  the principal amount of such Advance shall be at least Two
               Hundred Fifty Thousand Dollars ($250,000), or a greater integral
               multiple of Fifty Thousand Dollars ($50,000);

          (d)  a Request for Swing Loan, once delivered to Agent, shall not be
               revocable by Company;

          (e)  the sum of: (i) the Requested Amounts as of the date for the
               requested Advance, plus (ii) the Usage as of the date for the
               requested Advance, minus (iii) the amount of any Advances to be
               refunded or converted with such Advance, shall not exceed the
               Revolving Credit Commitment;

          (f)  the sum of: (i) the Advance requested, and (ii) the principal
               amount of all other Swing Loans then outstanding, shall not
               exceed the Swing Loan Commitment then in effect;

          (g)  each Request for Swing Loan shall constitute a certification by
               the Company as of the date thereof that all of the conditions set
               forth in Section 10.2 hereof are satisfied as of the date of such
               request and shall be satisfied as of the date such Advance is
               requested;

     4.4  Disbursement of Swing Loans.  The Agent may advance funds under the
          ---------------------------                                        
Swing Notes upon telephone request made by any one of those officers or agents
of Company authorized by resolution of Company's board of directors to make such
requests. Any such telephone request shall satisfy the time requirements set
forth in Section 4.2 above. Company hereby authorizes Agent to disburse Swing
Loans pursuant to the instructions of any officer or agent so identified. On the
same day as such telephonic request for an Advance is made, the officer or agent
requesting the Advance shall deliver a Request for Swing Loan to Agent, executed
by an

                                     -40-
<PAGE>
 
authorized officer or agent of Company and, until such Request for Swing Loan is
received by Agent, the telephone request itself shall constitute the Company's
certification of the matters set forth in Section 4.2(g).

     4.5  Swing Loan Refunding.
          -------------------- 

          (i)    The Agent may at any time in its sole and absolute discretion
and shall, in the case of any Swing Loan that is outstanding in excess of thirty
(30) days, require that any Swing Loan be refunded by a Revolving Credit Loan
which is a Prime-based Loan, and upon notice thereof by the Agent to the Company
and the Banks, the Company shall be deemed to have requested a Revolving Credit
Loan bearing interest at the Prime-based Rate in an amount equal to the amount
of any such Swing Loan, and such Revolving Credit Loan shall be made to refund
such Swing Loan.  Such Revolving Credit Loan shall be disbursed, and each Bank
shall make its Adjusted Percentage thereof available, notwithstanding any
failure to satisfy any conditions for disbursement of any Loan set forth in
Section 10.2 hereof or any other condition; provided, however, that such
                                            -----------------           
disbursement: (A) shall not be deemed to be a waiver of any Event of Default or
Default, if any, and (B) shall be made by each Bank on the Business Day after
such notice is made to the Bank.  If for any reason (including without
limitation as a result of the occurrence of a bankruptcy filing), Revolving
Credit Loans may not be made and the Agent is then requiring that any Swing Loan
be refunded by a Revolving Credit Loan, effective on the date each Revolving
Credit Loan would otherwise have been made under this Section 4.4, each Bank
severally agrees that it shall unconditionally and irrevocably, without regard
to the occurrence of any Default or Event of Default, in lieu of a disbursement
of any Revolving Credit Loan, to the extent of such Bank's Adjusted Percentage
interest in the Revolving Credit Commitment, purchase a participation interest
in such Swing Loan.  Upon any receipt of payments of principal and interest on
the Swing Loan subsequent to the Banks' purchase of participating interests
pursuant to the foregoing sentence, Agent shall make prompt payment to each Bank
of its share thereof, based upon the prorated participating interests purchased
in such Swing Loans.

          (ii)   Each Bank's obligation to comply with the terms of this Section
4.4, shall be absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank or the Borrower may have
against the Agent, the Borrower or any other Person for any reason whatsoever;
(ii) the occurrence or continuance of a Default or an Event of Default; (iii)
any adverse change in the condition (financial or otherwise) of Company; (iv)
any breach of this Agreement by Company, any Permitted Borrower or any other
Bank; or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.

5.   THE INDEBTEDNESS: LINE OF CREDIT LOANS
     --------------------------------------

     5.1  Line of Credit Commitment.  Subject to the terms and conditions of
          -------------------------                                         
this Agreement, each Bank severally agrees to lend to Company in Dollars, at any
time and from time to time from the Closing Date until the Line of Credit
Maturity Date, and Company may borrow, repay and reborrow sums not to exceed, in
aggregate amount at any time outstanding, such Bank's respective Percentage of
Line of Credit Commitment in effect from time to time.  All of 

                                     -41-
<PAGE>
 
the Loans under this Section 5 shall be evidenced by Line of Credit Notes
under which advances, repayments, and readvances may be made, subject to the
terms and conditions of this Agreement.

     5.2  Type of Loan and Maturity.  The Line of Credit Notes, and all
          -------------------------                                    
principal and interest then outstanding thereunder, shall mature and become due
and payable in full on the Line of Credit Maturity Date.  Each Line of Credit
Loan from time to time outstanding hereunder shall be either a Prime-based Loan
or a Eurocurrency-based Loan as the Company may elect or as otherwise applicable
pursuant to the provisions hereof.  The amount and date of each Line of Credit
Loan, its Applicable Interest Rate, its Interest Period, and the amount and date
of any repayment shall be noted on Agent's records, which records will be
presumed correct absent manifest error.

     5.3  Requests for Line of Credit Loans.  Company may request a Line of
          ---------------------------------                                
Credit Loan by delivery to Agent of a Request for Line of Credit Loan executed
by an authorized officer of Company and subject to the following:

          (a)  each such Request for Line of Credit Loan shall set forth the
               information required on the Request for Line of Credit Loan form;

          (b)  each such Request for Line of Credit Loan shall be delivered to
               Agent by 10:00 a.m. (Detroit time) three (3) Business Days prior
               to the proposed date of Loan, except in the case of a Prime-based
               Loan, for which the Request for Line of Credit Loan must be
               delivered by 10:00 a.m. (Detroit time) on such proposed date;

          (c)  the principal amount of such Advance, plus the amount of any
               outstanding Advance under the Line of Credit Notes having the
               same Applicable Interest Rate and Interest Period shall be at
               least: (i) in the case of a Prime-based Loan, Two Million Dollars
               ($2,000,000), or a greater integral multiple of One Hundred
               Thousand Dollars ($100,000); (ii) in the case of a Eurocurrency-
               based Loan, Five Million Dollars ($5,000,000) or a greater
               integral multiple of One Hundred Thousand Dollars ($100,000);

          (d)  a Request for Line of Credit Loan, once delivered to Agent, shall
               not be revocable by Company;

          (e)  the sum of: (i) the principal amount of the requested Advance,
               plus (ii) the Line of Credit Loans outstanding as of the date for
               the requested Advance, minus (iii) the amount of any Advances to
               be refunded or converted with such Advance, shall not exceed the
               Line of Credit Commitment;

          (f)  each Request for Line of Credit Loan shall constitute a
               certification by the Company as of the date thereof that all of
               the conditions set forth in Section 10.2 hereof are satisfied as
               of the date of such request and shall be satisfied as of the date
               such Advance is requested.

                                     -42-
<PAGE>
 
     The Agent may advance funds under the Line of Credit Notes upon telephone
request made by any one of those officers or agents of Company authorized by
resolution of Company's board of directors to make such requests.  Any such
telephone request shall satisfy the time requirements set forth in Section
5.3(b) above.  Company hereby authorizes Agent and each Bank to disburse Line of
Credit Loans pursuant to the instructions of any officer or agent so identified.
On the same day as such telephonic request for an Advance is made, the officer
or agent requesting the Advance shall deliver a Request for Line of Credit Loan
to Agent, executed by an authorized officer or agent of Company and, until such
Request for Line of Credit Loan is received by Agent, the telephone request
itself shall constitute the Company's certification of the matters set forth in
Section 5.3(f) above.

     5.4  Disbursement of Loans.  Upon receiving any Request for Line of Credit
          ---------------------                                                
Loan (or telephone request) under Section 5.3 hereof, Agent shall promptly
notify each Bank by wire, telex or by telephone, including facsimile
transmission (confirmed by wire or telex) of the date for such Advance, its
Applicable Interest Rate and the amount and currency of the Advance to be made
by said Bank pursuant to its Percentage of the Line of Credit Commitment.
Unless the conditions for Loans are not then met each Bank shall, not later than
2:00 p.m. (Detroit time) on the date of such Advance, make available the amount
of its Percentage of the Advance in immediately available funds in the currency
of the Advance to Agent, at the office of Agent located at 500 Woodward Avenue,
Detroit, Michigan.  Subject to submission of an executed Request for Line of
Credit Loan without exceptions noted in the compliance certification therein,
Agent shall make available to Company not later than 4:00 p.m. (Detroit time) on
such date, the aggregate of the amounts so received by it in like funds by
credit to an account of Company, maintained with Agent or to such other account
or third party as Company may direct.  Unless Agent shall have been notified by
any Bank prior to the funding of any proposed Advance that such Bank does not
intend to make its Percentage of the Advance available, Agent may assume that
such Bank has made such amount available on such date and may, in reliance upon
such assumption, make available to Company a corresponding amount.  If such
amount is not in fact made available to Agent by such Bank, Agent shall be
entitled to recover such amount on demand from such Bank.  If such Bank does not
pay such amount forthwith upon Agent's demand therefor, the Agent shall promptly
notify Company, and Company shall repay such amount to Agent.  Agent shall also
be entitled to recover from such Bank or Company, in Dollars interest on such
amount in respect of each day from the date such amount was made available by
Agent to the date such amount is recovered by Agent, at a rate per annum equal
to the Applicable Interest Rate, in the case of Company, and the Federal Funds
Effective Rate in the case of a Bank.  The obligation of any Bank to make any
Advance shall not be affected by the failure of any other Bank to make any
Advance and no Bank shall have any liability to Company, the Agent, or any other
Bank for another Bank's failure to make any Advance hereunder.

     5.5  Line of Credit Facility Fee.  On each Quarterly Payment Date during
          ---------------------------                                        
the period from the Closing Date to the Line of Credit Maturity Date, and on the
Line of Credit Maturity Date, the Company shall pay to the Agent on behalf of
Banks, quarterly in arrears, the Line of Credit Facility Fee in an amount equal
to Line of Credit Commitment multiplied by the Margin in effect from time to
time during such period.  Upon receipt of such payment Agent shall make

                                     -43-
<PAGE>
 
prompt payment to each Bank of its share of the Line of Credit Facility Fee,
based upon its Percentage of the Line of Credit Commitment in effect during the
applicable period.

     5.6  Optional Reduction or Termination of Line of Credit Commitment.  Upon
          --------------------------------------------------------------       
at least five (5) Business Days' prior written notice to the Agent, the Company
may permanently reduce the Line of Credit Commitment, in whole or in part,
provided that:

          (a)  each partial reduction of the Line of Credit Commitment shall be
               in an aggregate amount equal to Five Million Dollars ($5,000,000)
               or an integral multiple thereof.

          (b)  each reduction or termination shall be accompanied by the payment
               of the Line of Credit Facility Fee accrued on the amount of the
               Line of Credit Commitment so reduced through the date of such
               reduction or termination;

          (c)  the Company shall prepay Line of Credit Loans in the amount, if
               any, by which the Line of Credit Loans as of the date of such
               reduction exceed the amount of the Line of Credit Commitment as
               so reduced, together with interest thereon to the date of
               prepayment and any additional amounts required thereon pursuant
               to Section 8.1 hereof;

          (d)  the Line of Credit Commitment, as so reduced, shall not be less
               than the sum of Line of Credit Loans then outstanding; and

          (e)  to the extent such reduction in the Line of Credit Commitment
               results from a reduction in the Line of Credit Commitment
               pursuant to Section 5.8 hereof, such reduction shall be applied
               on non-prorata basis to reduce or terminate (as applicable) the
               portion of the Line of Credit Commitment held by the Bank or
               Banks whose Percentage of Line of Credit is being terminated.

     5.7  Purpose of Line Credit Loans.  Line of Credit Loans shall be available
          ----------------------------                                          
to and used by Company for its general corporate purposes, and to fund
intercompany loans and advances to Subsidiaries for the general corporate
purposes of such Subsidiaries.

     5.8  Extensions of Line of Credit Maturity Date.
          -------------------------------------------

          (a)  Extension Request.  Notwithstanding anything contained in this
               -----------------                                             
               Agreement to the contrary, not later than sixty (60) days prior
               to the Line of Credit Maturity Date then in effect, the Company
               may, by delivery of a duly completed Extension Request,
               irrevocably request that each Bank extend the then existing Line
               of Credit Maturity Date for additional periods of not greater
               than three hundred sixty four (364) days.  Promptly upon receipt
               of an Extension Request the Agent shall notify each Bank thereof,
               by delivering to each Bank a copy of the Extension Request.

                                     -44-
<PAGE>
 
          (b)  Responses to Extension Request.  Each Bank shall, within thirty
               ------------------------------                                 
               (30) days of receipt of an Extension Notice, notify the Agent
               whether it consents to the request of the Company set forth in
               such Extension Request, such consent to be in the sole discretion
               of such Bank.  If any Bank does not so notify the Agent of its
               decision within such thirty (30) day period, such Bank shall be
               deemed not to have consented to such request of the Company.

          (c)  Notice of Consents.  The Agent shall promptly notify the Company
               ------------------                                              
               whether the Banks have consented to such request.  If the Agent
               does not so notify the Company within thirty five (35) days of
               such Extension Request, the Agent shall be deemed to have
               notified the Company that the Banks have not consented to the
               Company's request.

          (d)  Non-Consenting Banks.  In the event that any Bank elects not to
               --------------------                                           
               extend the Line of Credit Maturity Date or fails to so notify the
               Agent of such consent, (i) if any other Bank which agrees to the
               requested extension, or any other financial institution
               acceptable to the Company and the Agent offers to purchase such
               non-consenting Bank's Loans, Notes and rights and obligations
               hereunder, such non-consenting Bank will promptly assign, sell
               and transfer all of its right, title, interest and obligations
               with respect to the foregoing to such other Bank or financial
               institution pursuant to Section 16.5(a) hereof, or (ii) Company
               may, in accordance with the provisions of Sections 2.6 and 5.6
               hereof reduce the Line of Credit Commitment by an amount equal to
               such nonconsenting Bank's Percentage of Line of Credit whereupon
               such nonconsenting Bank's rights and obligations to make Line of
               Credit Loans shall be terminated.

          (e)  Extension Denial.  In the event that any Bank fails to grant an
               ----------------                                               
               Extension Request and, on or before ten (10) days prior to the
               Line of Credit Maturity Date (i) no Bank or financial institution
               acquires the Loans, Notes and other rights and obligations of
               such non-consenting Bank, and (ii) the Company has not elected to
               reduce the Line of Credit Commitment pursuant to subsection
               (d)(ii) above; the Extension Request shall be deemed to be
               denied.

          (f)  Extension Consent.  In the event that: (a) either (i) all of the
               -----------------                                               
               Banks consent to the Extension Request; (ii) each Bank that did
               not consent to the Extension Request is replaced pursuant to
               subsection (d)(i) above, or (iii) the Line of Credit Commitment
               is reduced by amounts equal to the Percentage of Line of Credit
               of such nonconsenting Bank or Banks; and (b) none of the Banks
               which have consented to the extension or the Line of Credit
               Maturity Date withdraw their consent prior to the Line of Credit
               Maturity Date then in effect, the Line of Credit Maturity Date
               shall be 

                                     -45-
<PAGE>
 
               extended effective upon the Line of Credit Maturity Date then in
               effect to the date designated on the Extension Request.

6.   TERM LOAN
     ---------

     6.1  Term Loan Repayment.  The Term Loan shall be repaid in accordance with
          -------------------                                                   
the terms of the Term Notes in quarterly principal installments equal to the
Term Installment Amount commencing June 30, 1997 and continuing on each
Quarterly Payment Date thereafter until the Term Loan Maturity Date, when the
entire unpaid principal balance of the Term Loan, and all accrued and unpaid
interest thereon, shall be due and payable in full.  Interest on the Term Loan
shall accrue at the Applicable Interest Rate for the Term Loan and shall be
payable on each Quarterly Payment Date hereafter until the Term Loan is paid in
full.  Amounts paid or prepaid on the Term Loan shall not be available for
readvance hereunder.

7.   INTEREST, FEE AND INTEREST CALCULATION, INTEREST PERIODS, CONVERSIONS,
     PREPAYMENTS
     ----------------------------------------------------------------------

     7.1  Interest.  The Notes and the Loans hereunder shall bear interest from
          --------                                                             
the date thereof on the unpaid principal balance thereof from time to time
outstanding, at the Applicable Interest Rates, as selected by Company or (as
applicable) the Permitted Borrowers or as otherwise applicable pursuant to the
provisions of this Agreement from time to time, provided, however, that in no
event shall any Bank's Notes or Loans bear interest at a rate greater than its
Highest Lawful Rate.  Interest with respect to each type of Loan shall be
payable on the last day of each Interest Period applicable thereto, provided
however, that if such Interest Period is longer than three (3) months, interest
shall also be payable three (3) months following the first day of such Interest
Period.  Notwithstanding the foregoing, in the event and so long as an Event of
Default of the type described in Section 14.1(a) or (b) hereof shall exist, or
in the event that indebtedness hereunder shall be accelerated as the result of
an Event of Default, all principal outstanding under the Notes shall bear
interest, payable on demand, from the date of such Event of Default or
acceleration at a rate per annum equal to the Default Rate, provided, however,
that in no event shall any Bank's Notes, Loans or other Indebtedness bear
interest at a rate greater than the Highest Lawful Rate applicable to such Bank.

     7.2  Calculations.  Fees and interest on all Loans shall be calculated on
          ------------                                                        
the basis of a 360 day year for the actual number of days elapsed in the period
for determination thereof.  The rates at which Fees accrue shall change on the
effective date of any adjustment of the relevant Margins.  Additionally, the
interest rate with respect to any Prime-based Loan shall change on the effective
date of any change in the Prime Rate or Alternate Base Rate (as applicable).

     7.3  Conversion and Renewal of Loans.  Providing that no Event of Default
          -------------------------------                                     
shall have occurred and be continuing, each outstanding Advance (other than of
the Term Loan) will be either paid or renewed or converted into another Advance,
in each case as of the last day of its Interest Period for the Advance being
paid, renewed or converted; provided that any conversion of a Eurocurrency-based
Loan, Bid Loan or Swing Loan bearing interest at a Swing Loan Quoted Rate shall
be made only on the last Business Day of the Interest Period applicable thereto
or (if 

                                     -46-
<PAGE>
 
made on other than the last day thereof) together with the payment of any
additional amounts required under Section 8.1 hereof, and each conversion of an
Advance made in an Alternative Currency shall be made with a new advance in the
same Alternative Currency. Eurocurrency-based Rates may be selected only for
portions of Loans which are in amounts which meet the requirements of Section
2.3(c), in the case of Revolving Credit Loans, and Section 5.3(c), in the case
of Line of Credit Loans. The Company and the applicable Permitted Borrowers may
select the Applicable Interest Rate and Interest Periods for such renewals and
conversions by giving the Agent not less than three (3) Business Days' prior
notice in the manner provided in Section 2.3 hereof (in the case of a renewal or
conversion of a Revolving Credit Loan) or Section 5.3 hereof (in the case of a
renewal or conversion of a Line of Credit Loan), specifying the date of such
renewal or conversion, the Advances to be converted, the type of Advance elected
and, the duration of the Interest Period therefor. For each renewal or
conversion of a Revolving Credit Loan or Line of Credit Loan, the Agent shall
promptly notify each Bank of each such request by wire, telex or telephone
(including facsimile transmission, confirmed by wire or telex) specifying the
date of such renewal or conversion, the Advance to be converted, the type of
Advance elected, the Applicable Interest Rate, the duration of the Interest
Period therefor and each Bank's Adjusted Percentage (if the notice is related to
a Revolving Credit Loan) or Percentage (if the notice is related to a Line of
Credit Loan) thereof. If with respect to any Advance outstanding at any time,
the Agent does not receive notice of the election three (3) or more Business
Days prior to the last day of the Interest Period therefor if such Advance is a
Revolving Credit Loan, Line of Credit Loan or Swing Loan, Company and (if
applicable) the relevant Permitted Borrower shall be deemed to have elected to
convert such Advance to a Prime-based Loan at the end of the then current
Interest Period.

     7.4  Prepayments.
          ----------- 

          (a)  Upon not less than two (2) Business Days' prior written or
               telephonic notice to the Agent (or three (3) Business Days prior
               written notice in the case of prepayment of an Advance
               denominated in an Alternative Currency), the Company and the
               Permitted Borrowers may prepay Revolving Credit Loans, Line of
               Credit Loans, Swing Loans and Bid Loans in whole at any time or
               in part from time to time, without premium or penalty but with
               accrued interest on the principal being prepaid to the date of
               such prepayment, provided that: (i) each partial prepayment shall
               be in an amount not less than Five Hundred Thousand Dollars
               ($500,000) or greater integral multiple of One Hundred Thousand
               Dollars ($100,000), (ii) in the case of any Advance bearing
               interest at a Eurodollar-based Rate, any Bid Loan or any Advance
               bearing interest at Swing Loan Quoted Rate, such prepayment may
               only be on the last Business Day of the Interest Period with
               respect thereto or (if made on other than the last day thereof)
               together with the payment of any additional amounts required
               thereon under Section 8.1 hereof;

          (b)  Upon not less than three (3) Business Days' prior written notice
               to Agent, the Company may, at any time and from time to time make
               payments on

                                     -47-
<PAGE>
 
          the Term Loans in addition to the scheduled payments of principal,
          with accrued interest on the principal being prepaid to the date of
          prepayment, provided that, (i) such prepayment shall be accompanied by
          payment of the Prepayment Compensation Amount; and (ii) partial
          prepayments of each Term Loan shall be applied to the pro rata
          reduction of the Term Installment Amount for installments under the
          related Term Notes falling due subsequent to such prepayment; and (iv)
          Company shall have no right to reborrow any amount so prepaid.

Each prepayment under this Section 7.4 shall be made to the Agent, and promptly
upon receipt thereof, the Agent shall remit to each Bank its share thereof in
accordance with its Adjusted Percentage (if such prepayment is on a Revolving
Credit Loan) or other pro rata share (if such prepayment is on a Line of Credit
Loan, Bid Loan or Term Loan).  In each notice of prepayment under this Section
7.4, the Company shall specify the date of prepayment, the amount of the
prepayment and the Advances to be prepaid.

8.   SPECIAL PROVISIONS FOR LOANS
     ----------------------------

     8.1  Reimbursement of Prepayment Costs.  As to any Eurocurrency-based Loan,
          ---------------------------------                                     
Bid Loan or Swing Loan bearing interest at a Swing Loan Quoted Rate, if any
prepayment thereof shall occur on any day other than the last day of an Interest
Period (whether pursuant to this Article, or by acceleration, or otherwise), or
if an Applicable Interest Rate shall be changed (other than as a result of a
change in the Margin occurring pursuant to the terms hereof) during any Interest
Period pursuant to this Article, or if Company or any Permitted Borrower shall
fail to borrow any such Advance on the date requested therefor, Company and each
Permitted Borrower hereby agrees to reimburse Banks on demand for any costs
incurred by Banks as a result of the timing thereof, including but not limited
to any net costs incurred in liquidating or employing deposits from third
parties, to each Bank which shall have delivered to Company a certificate
setting forth in reasonable detail the basis for determining such costs, which
certificate shall be presumed correct in the absence of manifest error.

     8.2  Agent's Eurocurrency Lending Office.  For any Loan for which the
          -----------------------------------                             
Applicable Interest Rate is the Eurocurrency-based Rate, if Agent shall
designate a Eurocurrency Lending Office which maintains books separate from
those of the rest of Agent or if any Bank shall designate as its eurocurrency
lending office an office which maintains books separate from those of the rest
of such Bank, Agent or such Bank shall have the option of maintaining and
carrying the relevant Loan on the books of such office, provided, however, that
Company and the Permitted Borrowers shall not be obligated to reimburse Agent
and the Banks pursuant to Section 8.5 hereof with respect to increased costs
described thereunder to the extent that (a) such increased costs result solely
from Agent's change in its designation of the Eurocurrency Lending Office or
from a Bank's designation of a eurocurrency lending office, and (b) such
increased costs exceed the amount that would otherwise have been payable
pursuant to Section 8.5 in the absence of such redesignation by Agent or
designation by a Bank.

     8.3  Circumstances Affecting Eurocurrency-based Availability.  If with
          -------------------------------------------------------          
respect to any 

                                     -48-
<PAGE>
 
Interest Period for a Eurocurrency-based Loan, Agent or any Bank determines
that, by reason of circumstances affecting the foreign exchange and interbank
markets generally, deposits in eurodollars in the applicable amounts are not
being offered to any Bank for such Interest Period, then Agent shall forthwith
give notice thereof to the Company. Thereafter, the obligations of Banks to make
Eurocurrency-based Loans for such Interest Periods, and the right of Company and
the Permitted Borrowers to convert an Advance to or refund an Advance as a
Eurocurrency-based Loan for such Interest Period shall be suspended until the
Agent notifies Company that such circumstance no longer exists.

     8.4  Laws Affecting Eurocurrency-based Loan Availability.  If, after the
          ---------------------------------------------------                
date hereof, the introduction of, or any change in, any applicable law, rule or
regulation or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any of the Banks (or any of their respective
eurodollar lending offices) with any request or directive (whether or not having
the force of law) of any such authority, shall make it unlawful or impossible
for any of the Banks (or any of their respective eurodollar lending offices) to
honor its obligations hereunder to make or maintain any Loan or Advance with
interest at the Eurocurrency-based Rate, such Bank shall forthwith give notice
thereof to Company and to Agent.  Thereafter: (a) the obligations of Banks to
make Eurocurrency-based Loans and the right of Company and the Permitted
Borrowers to convert an Advance or refund an Advance as a Eurocurrency-based
Loan shall be suspended; and (b) if any of the Banks may not lawfully continue
to maintain a Eurocurrency-based Loan to the end of the then current Interest
Period, the Prime-based Rate shall be the Applicable Interest Rate for such
Bank's Eurocurrency-based Loans for the remainder of such Interest Period.

          Each Bank agrees that, as promptly as practicable after it becomes
aware of the occurrence of any event or the existence of a condition that would
make it unlawful or impossible to maintain any Loan or Advance with interest at
the Eurocurrency-based Rate, it will, to the extent not inconsistent with such
Bank's internal policies, use reasonable efforts to make, fund or maintain the
affected Eurocurrency-based Loans of such Bank through another lending office of
such Bank if, as a result thereof, such illegality or impossibility would cease
to exist, and if, as determined by such Bank, in its reasonable discretion, the
making, funding or maintaining of such Loans through such other lending office
would not otherwise materially adversely affect such Loans or such Bank.
Company and each Permitted Borrower hereby agrees to pay all reasonable expenses
incurred by any Bank in utilizing such other lending office of such Bank
pursuant to this Section 8.4.

     8.5  Increased Costs.  In the event that any change after the date hereof
          ---------------                                                     
in applicable law, treaty or governmental regulation, or in the interpretation
or application thereof, or compliance by Agent or any Bank with any request or
directive (whether or not having the force of law) from any central bank or
other financial, monetary or other authority:

          (a)  shall subject any of the Banks or Agent (or any of their
               respective holding companies or eurocurrency lending offices) to
               any tax, duty or other charge with respect to any Loan or any
               Note or shall change the basis of taxation of payments to any of
               the Banks (or any of their respective 

                                     -49-
<PAGE>
 
               holding companies or eurocurrency lending offices) of the
               principal of or interest on any Loan or any Note or any other
               amounts due under this Agreement (except for changes in the rate
               of tax on the overall net income or gross receipts of any of the
               Banks or Agent or any of their respective holding companies or
               eurocurrency lending offices imposed by the

               jurisdiction in which Agent's or such Bank's principal executive
               office or eurodollar lending office is located); or

          (b)  shall impose, modify or deem applicable any reserve (including,
               without limitation, any imposed by the Board of Governors of the
               Federal Reserve System but excluding with respect to any
               Eurocurrency-based Loan any such requirement included in an
               applicable Eurodollar Reserve Requirement), risk-based capital
               requirement, liquidity ratio or special deposit, or similar
               requirement against assets of, deposits with or for the account
               of, or credit extended by any of the Banks or Agent (or any of
               their respective holding companies or eurocurrency lending
               offices) or shall impose on any of the Banks or Agent (or any of
               their respective holding companies or eurodollar lending offices)
               or the foreign exchange and interbank markets or other condition
               affecting any Loan or any of the Notes or any commitment of Agent
               or any Bank under this Agreement;

and the result of any of the foregoing is to increase the costs to any of the
Banks or Agent of making, renewing or maintaining any part of the Loans or its
commitments hereunder or to reduce the amount or rate of return on any sum
received or receivable by Agent or any of the Banks under this Agreement, or
under the Notes, or under any Letter of Credit Agreement, then such Bank (if
applicable) shall promptly notify Agent, and Agent shall promptly notify Company
and (if applicable) such Bank or Banks of such fact and demand compensation
therefor and, Company and each Permitted Borrower hereby agrees to pay to Agent
or such Bank such additional amount or amounts as will compensate such Agent or
Bank or Banks for such increased costs or reduced return within thirty (30) days
of such notice, with respect to all such increased costs or reduced returns
attributable to the period commencing not earlier than sixty (60) days prior to
such notice.  In the event that such tax, duty, other charge, or imposition or
modification of reserve requirement is subsequently reversed, Agent shall
promptly notify Company and such Bank or Banks of such fact and Agent or such
Bank or Banks (as applicable) will within thirty (30) days of such notice, pay
Agent for distribution to Company or the applicable Permitted Borrower the
amount, if any, necessary to compensate Company or the applicable Permitted
Borrower therefor.  A certificate of the Bank demanding such compensation
setting forth in reasonable detail the basis for determining such additional
amount or amounts necessary to compensate shall be presumed to be correct in the
absence of manifest error.

9.   PAYMENTS
     --------

     9.1  Payment Procedure.
          ----------------- 

          (a)  All payments by Company and the Permitted Borrowers of principal
               of, or 

                                     -50-
<PAGE>
 
               interest on, the Notes or of Fees, or of Letter of Credit
               Obligations shall be made without setoff, deduction or
               counterclaim on the date specified for payment under this
               Agreement not later than 11:00 a.m. (Detroit time) in immediately
               available funds to Agent.  Upon receipt of each such payment, the
               Agent shall make payment to each Bank in like funds on the same
               day of all amounts received by it to the extent received for the
               account of such Bank. Issuance fees and charges related to
               Letters of Credit which are payable for the sole account of any
               Issuing Bank pursuant to Section 3.5 hereof shall be paid as and
               when separately agreed upon by Company and such Issuing Bank.

          (b)  Unless the Agent shall have been notified by Company or a
               Permitted Borrower prior to the date on which any payment to be
               made by Company or such Permitted Borrower is due, that Company
               or such Permitted Borrower does not intend to remit such payment,
               the Agent may, in its discretion, assume such payment has been
               remitted when so due and the Agent may, in reliance upon such
               assumption, make available to each Bank on such payment date an
               amount equal to such Bank's share of such assumed payment.  If
               such payment has not in fact been remitted to the Agent, each
               Bank shall forthwith on demand, repay to the Agent the amount of
               such assumed payment made available to such Bank, together with
               the interest thereon, in respect of each day from and including
               the date such amount was made available by the Agent to such Bank
               to the date such amount is repaid to the Agent at a rate equal to
               the Federal Funds Effective Rate, as the same may vary from time
               to time.

          (c)  Whenever any payment to be made shall otherwise be due on a day
               which is not a Business Day, such payment shall be made (except
               as specifically indicated to the contrary herein) on the next
               succeeding Business Day and such extension of time shall be
               included in computing interest, if any, in connection with such
               payment.

          (d)  All payments of principal and interest on each Advance shall be
               payable by Company and the Permitted Borrowers in the Permitted
               Currency in which such Advance was originally made.  All other
               payments of fees and reimbursements by Company or any Permitted
               Borrower to Agent and/or the Banks shall be made in Dollars.

     9.2  Application of Proceeds.  Notwithstanding anything to the contrary in
          -----------------------                                              
this Agreement, during the continuation of any Event of Default, the proceeds of
any offsets, voluntary payments by Company, any Permitted Borrower or others and
any other sums received or collected in respect of the indebtedness hereunder
shall be applied first to the costs and expenses of Agent in enforcement and
collection and, second, to the indebtedness and obligations of Company and the
Permitted Borrowers hereunder in accordance with the respective aggregate
principal amounts of each Bank's Loans and risk participations in Letters of
Credit outstanding, 

                                     -51-
<PAGE>
 
and then, if there is any excess, to Company.

     9.3  Pro-rata Recovery.  If any Bank shall obtain any payment or other
          -----------------                                                
recovery (whether voluntary, involuntary, by application of offset or otherwise)
on account of principal of, or interest on, any of the indebtedness and
obligations of Company or any Permitted Borrower hereunder (exclusive, however,
of any payment or recovery received by Agent on Swing Loans) in excess of its
pro rata share of payments then or thereafter obtained by all Banks upon all
such indebtedness and obligations, such Bank shall purchase from the other Banks
such participations in the Notes and/or Letter of Credit Obligations held by
them as shall be necessary to cause such purchasing Bank to share the excess
payment or other recovery ratably in accordance with the respective aggregate
principal amounts of each Bank's Loans and risk participations in Letters of
Credit outstanding as of the date of the Event of Default; provided, however,
that (i) if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing holder, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest; and (ii) this Section 9.3 shall not require any Bank to share
payments received by such Bank while no Event of Default shall have existed
either, (x) on any Revolving Credit Loan with respect to which each of the Banks
received payment in accordance with their Adjusted Percentages, (y) on any Term
Loan payment received by a Bank in accordance with such Bank's pro rata share of
such Term Loan, or (z) on any Bid Loan which was paid at the end of its Interest
Period.

     9.4  Deposits and Accounts.  In addition to and not in limitation of any
          ---------------------                                              
rights of any Bank or other holder of any Note or assignee of Letter of Credit
Agreements and Letter of Credit Obligations under applicable law, each Bank and
each other such holder shall, in the event and so long as an Event of Default of
the types described in Section 14.1(a) or (b) hereof shall exist, or in the
event that indebtedness hereunder shall be accelerated as the result of an Event
of Default, and without notice or demand of any kind, have the right to
liquidate and collect all property or assets of Company and the Permitted
Borrowers (including deposits and other credits), whether presently owned or
hereafter acquired, in possession or control of (or owing by) such Bank or other
holder for any purpose, and to apply the proceeds of any such liquidations and
collections, and offset any amounts owing to Company and the Permitted
Borrowers, against obligations hereunder and under the Notes and the Documents,
provided, however, that any such amount so applied by any Bank or other holder
on any of the Notes shall be subject to the provisions of Section 9.2 and 9.3.

     9.5  Net Payments.  All payments by Company and the Permitted Borrowers
          ------------                                                      
under this Agreement or any Document shall be made in such amounts as may be
necessary in order that all such payments (after deduction or withholding for or
on account of any present or future taxes, levies, imposts, duties or other
charges of whatsoever nature imposed by any government or any political
subdivision or taxing authority thereof, other than any tax on or measured by
the net income of a Bank pursuant to the income tax laws of the United States or
of the jurisdiction in which it is incorporated or the jurisdiction where such
Bank's lending office is located or in which it has any other contacts or
connection that would subject it to taxation therein (collectively, "Taxes")),
shall not be less than the amounts otherwise specified to be paid under this
Agreement and/or the Documents.  A certificate as to the calculation of any
additional 

                                     -52-
<PAGE>
 
amounts payable to a Bank under this Section 9.5 submitted to the Company by
such Bank shall, absent manifest error, be presumed correct for all purposes.
With respect to each deduction or withholding for or on account of any Taxes,
Company or the relevant Permitted Borrower shall promptly furnish to each Bank
such certificates, receipts and other documents as may be required (in the
judgment of such Bank) to establish any tax credit to which such Bank may be
entitled. Company and the Permitted Borrowers agree to reimburse each Bank, upon
the written request of such Bank, for taxes imposed on or measured by the net
income of such Bank pursuant to the laws of the United States of America, any
State or political subdivision thereof, or the jurisdiction in which such Bank
is incorporated, or a jurisdiction in which the principal office or lending
office of such Bank is located, or under the laws of any political subdivision
or taxing authority of any such jurisdiction, as such Bank shall determine are
or were payable by such Bank in respect of amounts payable to such Bank pursuant
to this Section 9.5.

     9.6  Tax Treaty Certificate.  Each Bank (and each Person who becomes a Bank
          ----------------------                                                
pursuant to Section 16.5 hereof) that is not incorporated under the laws of the
United States of America or a state thereof, or which is lending from a lending
office that is not incorporated under the laws of the United States of America
or a state thereof agrees that, on or prior to the date it becomes a Bank
hereunder, it will deliver to Company and the Agent duly completed copies of
United States Internal Revenue Service Form 1001 or 4224, or any successor
applicable form (a "Form 1001 or 4224"), certifying that such Bank is entitled
to receive payments hereunder payable to it without deduction or withholding of
any United States Federal taxes.  Each Bank that delivers a Form 1001 or 4224
pursuant to the immediately preceding sentence further agrees to deliver to
Company and Agent further copies of such Form 1001 or 4224 or other manner of
certification, as the case may be, on or before the date that any such form or
certification expires or becomes obsolete or upon the occurrence of any event
requiring a change in the most recent form or certification previously delivered
by it, unless in any such case there has occurred, on or prior to the date on
which any such delivery would otherwise be required, any change in law, rule,
regulation, treaty, convention or directive, or any change in the interpretation
or application of any thereof, that renders all such forms inapplicable or which
would prevent such Bank from duly completing and delivering any such form or
certification with respect to it.  Notwithstanding any provision of Section 9.5
to the contrary, Company and the Permitted Borrowers shall not have any
obligation to pay any Taxes (except to the extent required by law) pursuant to
Section 9.5 to the extent that such Taxes result from: (i) the failure of any
Bank to comply with its obligations pursuant to this Section 9.6; or (ii) any
representation made on Form 1001 or 4224 by such Bank proving to have been
incorrect, false or misleading in any material respect when made or deemed to be
made.

     9.7  Defaulting Banks.  In the event and so long as any Bank shall be a
          ----------------                                                  
Defaulting Bank:

          (a)  such Bank shall not be entitled to payment of Revolving Credit
               Facility Fees or Line of Credit Facility Fee accruing for any day
               during which it is a Defaulting Bank and, immediately after
               Company's payment of such Revolving Credit Facility Fees or Line
               of Credit Facility Fee, Agent shall refund to Company that
               portion of such payment that otherwise would 

                                     -53-
<PAGE>
 
               have been paid to such Defaulting Bank attributable to the period
               that it was a Defaulting Bank;

          (b)  Company may, by written notice to the Agent and such Defaulting
               Bank:

               (i)  require non-pro rata reductions of the Commitments in
                    amounts equal to the Defaulting Bank's Percentages thereof,
                    whereupon: (w) such Defaulting Bank's Percentage shall be
                    immediately terminated with respect to each Advance and
                    Letter of Credit to be made or issued (as applicable)
                    subsequent to the date of such notice; (x) the Revolving
                    Credit Commitment shall immediately be reduced by amounts
                    equal to such Defaulting Bank's Percentage of Revolving
                    Credit (immediately prior to its termination), (y) the Line
                    of Credit Commitment shall immediately be reduced by amounts
                    equal to such Defaulting Bank's Percentage of Line of Credit
                    Commitment (immediately prior to its termination), and (z)
                    notwithstanding anything to the contrary herein, the Loans
                    and interests in Letters of Credit of such Defaulting Bank,
                    which were outstanding as of the date it became a Defaulting
                    Bank, shall not be required to be paid or prepaid as a
                    result of the termination of such Defaulting Bank's
                    Percentage of Revolving Credit and Percentage of Line of
                    Credit Commitment or as a result of the corresponding
                    reductions in the Commitments, but (1) in the case of
                    Revolving Credit Loans, Line of Credit Loans and Bid Loans
                    by such Defaulting Bank, shall be repaid on the last day of
                    the then existing Interest Periods therefor, (2) in the case
                    of any Term Loan held by such Defaulting Bank, shall be paid
                    in accordance with such Defaulting Bank's Term Note, and (3)
                    such Defaulting Bank's participating interests in Letters of
                    Credit issued and outstanding at the time it became a
                    Defaulting Bank shall continue until the expiry or surrender
                    of each such Letters of Credit; or

               (ii) require such Defaulting Bank to sell and assign all of its
                    interests hereunder to another Bank or Banks or to another
                    bank or financial institution reasonably acceptable to
                    Agent, in accordance with the procedures set forth in
                    Section 16.5(a) hereof and subject to the terms and
                    conditions of an Assignment Agreement; and

          (c)  No election made by Company pursuant to subsection (b) above
               shall constitute a waiver, release or relinquishment of any claim
               or cause of action which may have arisen out of the failure or
               notice by the Defaulting Bank out of which its status as a
               Defaulting Bank arose.

     9.8  Availability of Alternative Currency.  The Agent and the Banks shall
          ------------------------------------                                
not be required to make any Advance requested to be made in an Alternative
Currency and the Issuing 

                                     -54-
<PAGE>
 
Banks shall not be required to Issue any Letter of Credit requested to be
denominated in an Alternative Currency if, at any time prior to making such
Advance or issuance of such Letter of Credit, the Agent (or the relevant Issuing
Bank, as the case may be) shall determine, in its sole discretion, that (i)
deposits in the applicable Alternative Currency in the amounts and maturities
required to fund such Advance, or Letter of Credit will not be available to the
Agent (or the relevant Issuing Bank, as the case may be) and the Banks; (ii) a
fundamental change has occurred in the foreign exchange or interbank markets
with respect to the applicable Alternative Currency (including, without
limitation, changes in national or international financial, political or
economic conditions or currency exchange rates or exchange controls); or (iii)
it has become otherwise materially impractical for the Agent or the Banks to
make such Advance, or for such Issuing Bank to issue such Letter of Credit in
the applicable Alternative Currency. The Agent shall promptly notify the Company
and Banks of any such determination.

     9.9  Refunding Advances in Same Currency.  If pursuant to any provisions of
          -----------------------------------                                   
this Agreement, the Company or any Permitted Borrower repays one or more
Advances and on the same day borrows an amount in the same currency, the Agent
shall apply the proceeds of such new borrowing to repay the principal of the
Advance or Advances being repaid and only an amount equal to the difference (if
any) between the amount being borrowed and the amount being repaid shall be
remitted by the Agent to the Company or the applicable Permitted Borrower, or by
the Company or the applicable Permitted Borrower to the Agent, as the case may
be.

     9.10 Judgment Currency.  The obligation of the Company and of the Permitted
          -----------------                                                     
Borrowers to make payments of the principal of and interest on the Notes and any
other amounts payable hereunder in the currency specified for such payment
herein or in the Notes shall not be discharged or satisfied by any tender, or
any recovery pursuant to any judgment, which is expressed in or converted into
any other currency, except to the extent that such tender or recovery shall
result in the actual receipt by the Bank of the full amount of the particular
Permitted Currency expressed to be payable herein or in the Notes.  The Agent
shall, using all amounts obtained or received from the Company and from
Permitted Borrowers pursuant to any such tender or recovery in payment of
principal of and interest on the Notes, promptly purchase the applicable
Permitted Currency at the most favorable spot exchange rate determined by the
Agent to be available to it.  The obligation of the Company and of the Permitted
Borrowers to make payments in the applicable Permitted Currency shall be
enforceable as an alternative or additional cause of action solely for the
purpose of recovering in the applicable Permitted Currency the amount, if any,
by which such actual receipt shall fall short of the full amount of the
Permitted Currency expressed to be payable herein or in the Notes.

10.  CONDITIONS
     ----------

     10.1 Conditions Precedent To Initial Loans and Closing Date.
          ------------------------------------------------------ 

          The right of Company or any Permitted Borrower to request the initial
Loans and Letters of Credit pursuant to this Agreement is subject to, and the
Closing Date of this Agreement shall be the date of, satisfaction of the
following conditions:

                                     -55-
<PAGE>
 
          (a)  Execution of Notes and This Agreement.  Company and each
               -------------------------------------                   
               Permitted Borrower shall have executed and delivered to Agent for
               the account of each Bank, the Notes and this Agreement (including
               all schedules, exhibits, certificates, opinions, financial
               statements and other documents to be delivered pursuant hereto)
               and the Notes, Documents and this Agreement shall be in full
               force and effect.

          (b)  Corporate Authority.  Agent shall have received, with a
               -------------------                                    
               counterpart thereof for each Bank: (i) certified copies of
               resolutions of the Board of Directors of Company and each
               Permitted Borrower evidencing approval of the borrowing hereunder
               and execution and delivery of the Documents to which they are
               party: (ii) certified copies of the Certificates of Incorporation
               and Bylaws for Company and each Permitted Borrower; (iii)
               certificates of good standing from the state of Company's
               incorporation, and from the states of incorporation of each
               Permitted Borrower and from every state in which either the
               Company or any Permitted Borrower is qualified to do business;
               and (iv) incumbency certificates for Company and each Permitted
               Borrower.

          (c)  Opinion of Counsel.  Company shall furnish Agent, with signed
               ------------------                                           
               copies for each Bank, opinion of counsel to the Company and each
               of the Permitted Borrowers dated as of the Closing Date, and
               covering such matters as required by and otherwise satisfactory
               in form and substance to the Agent and each of the Banks.

          (d)  Other Documents.  As support for all indebtedness of Company
               ---------------                                             
               hereunder: (i) Company, ABT and KenTech shall have each executed
               and delivered to Agent, in form to be satisfactory to Agent and
               the Banks and supported by appropriate corporate resolutions in
               certified form authorizing same, a Guaranty; and (ii) Company
               shall have executed and delivered to Agent, in form satisfactory
               to Agent and the Banks, the Pledge, together with certificates
               evidencing the shares of ABT Canada stock to be pledged to Agent
               on behalf of the Banks thereunder and assignments separate from
               such certificates executed in blank for transfer and the original
               Intercompany Note duly endorsed to Agent, or with a duly endorsed
               assignment separate from such note.

          (e)  Representations and Warranties - All Parties.  The
               --------------------------------------------      
               representations and warranties made by Company and the Permitted
               Borrowers under this Agreement or any of the Documents, and the
               representations and warranties of any of the foregoing which are
               contained in any certificate, document or financial or other
               statement hereunder or thereunder or in connection herewith or
               therewith shall be true and correct in all material respects.

                                     -56-
<PAGE>
 
          (f)  Compliance with Certain Documents and Agreements.  Company, ABT,
               ------------------------------------------------                
               KenTech and ABT Canada shall have each performed and complied
               with all agreements and conditions contained in this Agreement,
               the Documents and any agreement or other document executed
               hereunder or thereunder and required to be performed or complied
               with by each of them and none of them shall be in default in the
               performance or compliance with any of the terms or provisions
               hereof or thereof.

          (g)  No Default.  No Default or Event of Default shall have occurred
               ----------                                                     
               and be continuing.

          (h)  Payment of Agent's and Other Fees.  Company shall have paid to
               ---------------------------------                             
               the Agent all costs and expenses required to be paid on or prior
               to the Closing Date hereunder.

          (i)  Environmental Reports.  Company shall have delivered to Agent
               ---------------------                                        
               (with copies for each Bank) reports and updates, in form and
               content satisfactory to Banks, regarding the current status of
               environmental matters described in the environmental
               investigation reports delivered to Agent and the Banks pursuant
               to the Prior Agreement.

          (j)  Other Documents and Instruments.  The Agent shall have received,
               -------------------------------                                 
               with a photocopy for each Bank, such other instruments and
               documents as the Majority Banks may reasonably request in
               connection with the making of the Loans hereunder, and all such
               instruments and documents shall be satisfactory in form and
               substance to the Majority Banks.

     10.2 Conditions Precedent to All Loans.  The obligation of the Banks to
          ---------------------------------                                 
make all Advances and Loans (other than conversions or continuations of
outstanding Loans pursuant to Section 7.3 hereof and Advances required pursuant
to Sections 3.6 and 3.7 hereof) and the obligation of the applicable Issuing
Bank to issue any Letter of Credit shall be subject to the satisfaction of the
following conditions:

          (a)  Effectiveness.  This Agreement shall have become effective as
               -------------                                                
               provided in Section 10.1.

          (b)  No Default; Representations and Warranties.  At the time of the
               ------------------------------------------                     
               making of such Loan or Advance, or the issuance of such Letter of
               Credit, and after giving effect thereto: (i) there shall exist no
               Default or Event of Default; and (ii) all representations and
               warranties contained herein or in the other Documents shall be
               true and correct in all material respects, unless such
               representation and warranty expressly indicates that it is being
               made as of any other specific date.

          (c)  Adverse Change, etc.  Since December 31, 1996, nothing shall have
               -------------------                                              

                                     -57-
<PAGE>
 
               occurred or become known which the Majority Banks or the Agent
               shall have determined has a Materially Adverse Effect.

          (d)  Enforceability of Documents.  Both before and after such Advance,
               ---------------------------                                      
               the obligations of Company, the Permitted Borrowers and the
               Restricted Subsidiaries in the Documents shall be valid, binding
               and enforceable.

          (e)  Limitation on Eurocurrency Interest Periods.  In the case of any
               -------------------------------------------                     
               Advance to be made at a Eurocurrency-based Rate, upon the making
               of such Advance there shall be no more than: (i) until six months
               after the Closing Date ten (10) and, at all times thereafter,
               seven (7) Interest Periods in effect for Eurocurrency-based Loans
               denominated in Dollars, and (ii) at all times, three (3) Interest
               Periods in effect for Eurocurrency-based Loans denominated in
               Alternative Currencies.

11.  REPRESENTATIONS AND WARRANTIES
     ------------------------------

     In order to induce the Banks to enter into this Agreement and to make Loans
and Advances hereunder, the Company and the Permitted Borrowers represent and
warrant to the Agent and the Banks.

     11.1 Corporate Status.  Company, each Permitted Borrower and each other
          ----------------                                                  
Restricted Subsidiary:

          (a)  is a duly organized and validly existing corporation in good
               standing under the laws of the jurisdiction of its organization;

          (b)  has the corporate or other organizational power and authority and
               has obtained all requisite governmental licenses, authorizations,
               consents and approvals necessary to own and operate its property
               and assets and to transact the business in which it is engaged
               and presently proposes to engage, including, without limitation,
               those required by the Environmental Laws, except for those
               governmental licenses, authorizations, consents or approvals the
               failure of which to be so obtained would not have a Material
               Adverse Effect; and

          (c)  is duly qualified and is authorized to do business in, and is in
               good standing in, all jurisdictions where by virtue of the nature
               of its activities or extent of its properties it is required to
               be so qualified and where the failure to be so qualified would
               have a Material Adverse Effect.

     11.2 Corporate Power and Authority; Business.  Company, each Permitted
          ---------------------------------------                          
Borrower and each other Restricted Subsidiary has the corporate power and
authority to execute, deliver and carry out the terms and provisions of the
Documents to which they are parties and have taken all necessary corporate
action to authorize the execution, delivery and performance of the 

                                     -58-
<PAGE>
 
Documents to which they are parties. Each of them has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of such Person enforceable
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability, good faith and fair dealing.

     11.3 No Violation.  Neither the execution, delivery or performance by
          ------------                                                    
Company or by any Permitted Borrower or by any other Restricted Subsidiary of
the Documents to which it is party, nor compliance with the terms and provisions
thereof, nor the consummation of the transactions contemplated therein:

          (a)  will result in a contravention of any applicable provision of any
               law, statute, rule, regulation, order, writ, injunction or decree
               of any court or governmental instrumentality which would have a
               Material Adverse Effect; or

          (b)  will conflict or be inconsistent with or result in any breach of
               any of the terms, covenants, conditions or provisions of, or
               constitute a default under, or result in the creation or
               imposition of any Lien upon any of the property or assets of any
               of them pursuant to the terms of, any indenture, mortgage, deed
               of trust, material agreement or other instruments to which any of
               them are parties; except where such contravention, conflict,
               inconsistency, breach, default, creation, imposition, obligation
               or violation would not have a Material Adverse Effect.

     11.4 Litigation.  Except as set forth on Schedule 11.4, there are no
          ----------                                                     
actions, judgments, suits or proceedings pending or, to the Company's or any
Permitted Borrower's knowledge, threatened with respect to Company or any of its
Subsidiaries that are likely to have a Material Adverse Effect on the businesses
or financial condition of Company and the Subsidiaries (taken as a whole).

     11.5 Use of Proceeds.  Neither the making of any Advance hereunder, nor the
          ---------------                                                       
use of the proceeds thereof, will violate or be inconsistent with the provisions
of Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System.

     11.6 Governmental Approvals, etc.  No order, consent, approval, license,
          ---------------------------                                        
authorization, or validation of, or filing, recording or registration with, or
exemption by, any third party or any foreign or domestic governmental or public
body or authority, or by any subdivision thereof, is required to authorize or is
required in connection with:

          (a)  the execution, delivery and performance of any Document by
               Company or any Restricted Subsidiary or the transactions
               contemplated therein; or

          (b)  the legality, validity, binding effect or enforceability of any
               Document 

                                     -59-
<PAGE>
 
               with respect to Company or any Restricted Subsidiary.

     11.7 Investment Company Act.  Neither the Company nor any Subsidiary is, or
          ----------------------                                                
will be after giving effect to the transactions contemplated hereby, an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.

     11.8 Public Utility Holding Company Act.  Neither Company nor any
          ----------------------------------                          
Subsidiary is, or will be after giving effect to the transactions contemplated
hereby, a "holding company", or a "subsidiary company" of a "holding company",
or an "affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended.

     11.9 True and Complete Disclosure.  All factual information (taken as a
          ----------------------------                                      
whole) heretofore or contemporaneously furnished by or on behalf of Company or
any Permitted Borrower in writing to any Bank for purposes of or in connection
with this Agreement or any transaction contemplated herein is, and all other
such factual information (taken as a whole) hereafter furnished to any Bank will
be, true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information not misleading.  There is no
fact known to Company or any Permitted Borrower which affects the business,
operations, property, assets, nature of assets, liabilities or condition
(financial or otherwise) of Company or its Subsidiaries, which could have a
Material Adverse Effect and which has not been disclosed herein or in such other
documents, certificates and written statements furnished to the Banks for use in
connection with the transactions contemplated hereby.

     11.10  Financial Statements.  The Company has heretofore delivered to the
            --------------------                                              
Banks the Consolidated balance sheet of Company and Consolidated statements of
operations, stockholders' equity and cash flow for the fiscal year ended
December 31, 1996.  All the financial statements referred to in the preceding
sentence were prepared in accordance with GAAP, and fairly present in all
material respects the consolidated financial position of the Company and the
results of its operations and cash flows for the periods covered thereby.

     11.11  Security Interests.  There exist no Liens on the property or assets
            ------------------                                                 
of Company or the Restricted Subsidiaries, except to the extent specifically
permitted under Section 13.2 hereof.

     11.12  Tax Returns and Payments.  Company and the Subsidiaries have each
            ------------------------                                         
filed all tax returns required to be filed by them and have paid all material
taxes and assessments payable by it which have become due, other than those not
yet delinquent and except for those contested in good faith and for which
adequate reserves have been established to the extent required by GAAP.

     11.13  ERISA.
            ----- 

          (a)  Each of the Company, the Subsidiaries and the ERISA Affiliates is
               in 

                                     -60-
<PAGE>
 
               compliance in all material respects with all applicable
               provisions of ERISA and the regulations and published
               interpretations thereunder with respect to all employee benefit
               plans, Pension Plans and Multiemployer Plans other than those the
               noncompliance with which would not have a Material Adverse
               Effect.

          (b)  No termination event has occurred or is reasonably expected to
               occur with respect to any Pension Plan which resulted or would
               result in a liability to the Company, the Subsidiaries or any
               ERISA Affiliate which would reasonably be expected to have a
               Material Adverse Effect.

          (c)  The sum of the amount of unfunded benefit liabilities (determined
               in accordance with Statement of Financial Accounting Standards
               No. 35) under all Title IV Plans (excluding each Title IV Plan
               with an amount of unfunded benefit liabilities of zero or less)
               is not more than One Million Dollars ($1,000,000).

          (d)  As of the Closing Date, neither the Company, the Subsidiaries nor
               any ERISA Affiliate has any obligation to contribute to any
               Multiemployer Plan or any employee benefit plan of the type
               described in Sections 4063 and 4064 of ERISA or in Section 413(c)
               of the Code.  Neither the Company, the Subsidiaries nor any ERISA
               Affiliate has incurred or reasonably expects to incur any
               withdrawal liability under Section 4201 et seq. of ERISA to any
               Multiemployer Plan or any employee benefit plan of the type
               described in Sections 4063 and 4064 of ERISA or in Section 413(c)
               of the Code which would reasonably be expected to have a Material
               Adverse Effect.

          (e)  Neither the Company, the Subsidiaries nor any ERISA Affiliate has
               incurred any accumulated funding deficiency (whether or not
               waived) with respect to any Pension Plan which would reasonably
               be expected to have a Material Adverse Effect.

          (f)  Neither the Company, the Subsidiaries nor any ERISA Affiliate has
               or reasonably expects to become subject to a Lien in favor of any
               Pension Plan under Section 302(f) or 307 of ERISA or Section
               401(a)(29) or 412(n) of the Code.

          (g)  The execution, performance and delivery of the Documents by
               Company and the Subsidiaries will not involve any prohibited
               transaction within the meaning of Section 406 of ERISA or Section
               4975 of the Code for which an exemption therefrom is not
               available.

     11.14  Subsidiaries.  The Company's only Subsidiaries as of the Closing
            ------------                                                    
Date are ABT, ABT Canada, KenTech and ABT Export, and all of the outstanding
capital stock of ABT, ABT 

                                     -61-
<PAGE>
 
Canada, KenTech and ABT Export is validly issued, fully paid and nonassessable
and owned beneficially and of record (either directly or indirectly through a
wholly-owned Subsidiary) by Company. There are no preemptive rights on the part
of any holder of any class of securities of ABT, ABT Canada, KenTech or ABT
Export.

     11.15  Patents, etc.  Company and the Restricted Subsidiaries each have all
            ------------                                                        
material patents, trademarks, servicemarks, trade names, copyrights, licenses
and other rights, free from burdensome restrictions, that are necessary for the
operation of their respective businesses as presently conducted and as proposed
to be conducted.

     11.16  Compliance with Laws, etc.  Except as set forth in Schedule 11.16
            -------------------------                                        
hereto: (i) Company and the Subsidiaries are each in compliance with all laws
and regulations, including without limitation those relating to pollution and
environmental control, equal employment opportunity and employee safety, in all
jurisdictions in which it is presently doing business, and (ii) each of them
will comply with all such laws and regulations which may be imposed in the
future in jurisdictions in which any of them may then be doing business; except
to the extent (in either case) that such non-compliance would not have a
Material Adverse Effect.

     11.17  Properties.  Company and the Restricted Subsidiaries have good and
            ----------                                                        
marketable title to and beneficial ownership of all their respective material
properties owned by them, as reflected in the balance sheet for Company for the
fiscal year ended December 31, 1996 (except as sold or otherwise disposed of
since the date of such balance sheet in the ordinary course of business), and
hold all material licenses, certificates of occupancy or operation and similar
certificates and clearances of municipal and other authorities necessary to own
and operate their respective properties in the manner and for the purposes
currently operated by such party.

     11.18  Collective Bargaining Agreements.  Set forth on Schedule 11.18
            --------------------------------                              
hereto is a list and description (including dates of termination) of all
collective bargaining or similar agreements between or applicable to Company and
each Restricted Subsidiary as of the date hereof and any union, labor
organization or other bargaining agent in respect of the employees of Company
and its Restricted Subsidiaries on the date indicated in Schedule 11.18 hereto.

     11.19  Indebtedness Outstanding.  Set forth on Schedule 11.19 hereto is a
            ------------------------                                          
list and description of all Indebtedness of Company and each Subsidiary (other
than the Loans) that are outstanding immediately as of the Closing Date.

     11.20  Environmental Protection.  Except as set forth on Schedule 11.20
            ------------------------                                        
hereto and except to the extent such failure or circumstance would not have a
Material Adverse Effect:

          (a)  Company and its Subsidiaries have all permits, licenses and
               other authorizations which are required with respect to the
               operation of their businesses under any Environmental Law and
               each such authorization is in full force and effect.

          (b)  Company and its Subsidiaries are in compliance with all terms
               and 

                                     -62-
<PAGE>
 
               conditions of the permits, licenses and authorizations specified
               in Subsection 11.20(a) above, and are also in compliance with all
               other limitations, restrictions, conditions, standards,
               prohibitions, requirements, obligations, schedules and timetables
               contained in any Environmental Law applicable to it and its
               business, assets, operations and properties (including, without
               limitation, compliance with standards, schedules and timetables
               therein), including without limitation those arising under the
               Resource Conservation and Recovery Act of 1976, as amended, the
               Comprehensive Environmental Response, Compensation and Liability
               Act of 1980, as amended by the Superfund Amendments and
               Reauthorization Act of 1986 ("CERCLA"), the Federal Water
               Pollution Control Act, the Federal Clean Air Act, and the Toxic
               Substances Control Act.

          (c)  There is no civil, criminal or administrative action, suit,
               demand, claim, hearing, notice of violation, investigation,
               proceeding, notice or demand letter or request for information
               pending or, to the knowledge of Company or any Subsidiary,
               threatened against Company or any Subsidiary under any
               Environmental Law.

          (d)  Neither Company nor any Subsidiary has received notice that it
               has been identified as a potentially responsible party under
               CERCLA or any comparable state law nor has Company or any
               Subsidiary received any notification that any hazardous
               substances or any pollutant or contaminant, as defined in CERCLA
               and its implementing regulations, or any toxic substance,
               hazardous waste, hazardous constituents, hazardous materials,
               asbestos or asbestos containing materials, petroleum, including
               crude oil and any fractions thereof, or other wastes, chemicals,
               substances or materials regulated by any Environmental Laws
               (collectively "Hazardous Materials") that it or any of their
               respective predecessors in interest has used, generated, stored,
               tested, handled, transported or disposed of, has been found at
               any site at which any governmental agency or private party is
               conducting a remedial investigation or other action pursuant to
               any Environmental Law.

          (e)  To the best knowledge of Company there have been no releases
               (i.e., any past or present releasing, spilling, leaking, pumping,
               pouring, emitting, emptying, discharging, injecting, escaping,
               leaching, disposing or dumping) of Hazardous Materials by Company
               or any Subsidiary on, upon, into or from any of the real
               properties owned or operated by them at any time.  To the best
               knowledge of Company there has been no such releases on, upon,
               under or into any such real property or in the vicinity of any of
               such real property that, through soil, surface water or
               groundwater migration or contamination, may be located on, in or
               under such real properties.

                                     -63-
<PAGE>
 
          (f)  To the best knowledge of Company, there is no friable asbestos
               in, on, or at the respective real properties or any facility or
               equipment of Company or any Subsidiary.

          (g)  To the best knowledge of Company, no real properties owned or
               operated by the Company or any Subsidiary is: (i) listed or
               proposed for listing on the National Priorities List under
               CERCLA; or (ii) listed in the Comprehensive Environmental
               Response, Compensation, Liability Information System List
               promulgated pursuant to CERCLA, or on any comparable list
               maintained by any governmental authority.

          (h)  To the best of Company's knowledge, there are no past or present
               events, conditions, circumstances, activities, practices,
               incidents, actions or plans which may interfere with or prevent
               compliance by Company or any Subsidiary with any Environmental
               Law, or which may give rise to any common law or legal liability,
               including, without limitation, liability under CERCLA or similar
               state, local or foreign laws, or otherwise form the basis of any
               claim, action, demand, suit, proceeding, hearing or notice of
               violation, study or investigation, based on or related to the
               manufacture, processing, distribution, use, generation,
               treatment, storage, disposal, transport, shipping or handling, or
               the emission, discharge, release or threatened release into the
               environment, of any pollutant, contaminant, chemical or
               industrial, toxic or hazardous substance or waste.

12.  AFFIRMATIVE COVENANTS
     ---------------------

     Company and each Permitted Borrower covenants and agrees that for so long
as this Agreement is in effect and until the Commitments are fully terminated,
the Letters of Credit have expired or been surrendered, and the Loans together
with interest, fees and all other obligations incurred hereunder or under the
Documents are paid in full:

     12.1 Reporting Requirements Covenants.  Company will furnish or cause to be
          --------------------------------                                      
furnished to each Bank:

          (a)  as soon as available and in any event within ninety (90) days
               after the close of each fiscal year of Company, the Consolidated
               balance sheets of Company and the Subsidiaries as at the end of
               such fiscal year and the related Consolidated statements of
               operations, stockholders equity and cash flows for such fiscal
               year, setting forth comparative figures for the preceding fiscal
               year, and a report on such balance sheets and financial
               statements by independent certified public accountants of
               recognized national standing, which report shall not be qualified
               as to the scope of audit or as to the status of Company and the
               Subsidiaries as a going concern, and shall state that such
               Consolidated financial statements fairly present the Consolidated
               financial position of Company and the 

                                     -64-
<PAGE>
 
               Subsidiaries as at the dates indicated and the results of their
               operations and their cash flows for the periods indicated, in
               conformity with GAAP;

          (b)  as soon as available and in any event within sixty (60) days
               after the end of each of the first three (3) quarterly accounting
               periods in each fiscal year of Company, the Consolidated balance
               sheet of Company and the Subsidiaries as at the end of such
               quarterly period and the related Consolidated statements of
               operations, of stockholders' equity and of cash flows for such
               quarterly period and for the elapsed portion of the fiscal year
               ended with the last day of such quarterly period, and in each
               case setting forth comparative figures for the related periods in
               the prior fiscal year, subject to normal year-end audit
               adjustments;

          (c)  prior to the commencement of each fiscal year, a Consolidated
               annual operating plan of Company and the Subsidiaries in
               reasonable detail for the succeeding fiscal year, and a
               Consolidated strategic plan for the next succeeding five (5)
               fiscal years, in each case, in the form customarily prepared by
               management for its internal use, setting forth, with appropriate
               discussion, the principal assumptions upon which such budgets are
               based;

          (d)  at the time of the delivery of the financial statements provided
               for in Subsections 12.1(a) and (b), a certificate of the chief
               financial officer, controller, treasurer, chief accounting
               officer or other authorized officer of Company to the effect that
               no Default or Event of Default exists, or, if any Default or
               Event of Default does exist, specifying the nature and extent
               thereof, which certificate shall be accompanied by a compliance
               certificate in a form reasonably acceptable to the Agent setting
               forth: (i) the calculations required to establish whether Company
               and the Subsidiaries were in compliance with the covenants in
               this Agreement as at the end of such fiscal period or year, as
               the case may be; and (ii) a statement of the outstanding balance
               of principal and interest owing to Company (as of the date of
               such financial statements) under the Intercompany Note;

          (e)  promptly upon receipt thereof, a copy of each annual "management
               letter" submitted to Company by its independent accountants in
               connection with any annual audit made by them of the books of
               Company or any Subsidiary;

          (f)  promptly upon their becoming available, copies of all financial
               statements, reports, notices and proxy statements sent or made
               available generally by Company or any Subsidiary to its security
               holders, of all regular and periodic reports and all registration
               statements and prospectuses, if any, filed by Company or any
               Subsidiary with any securities exchange or with the Securities
               Exchange Commission and of all press releases and other

                                     -65-
<PAGE>
 
               statements made available generally by Company or any Subsidiary
               to the public concerning material developments in the business of
               Company and its Subsidiaries;

          (g)  promptly upon any officer of Company obtaining knowledge of any
               condition or event which constitutes a Default or Event of
               Default, or becoming aware that any Bank has given any notice or
               taken any other action with respect to a claimed Default or Event
               of Default under this Agreement, an officers' certificate
               specifying the nature and period of existence of any such
               condition or event, or specifying the nature of such claimed
               Default or Event of Default, and explaining the action Company
               has taken or proposes to take with respect thereto; and

          (h)  upon substantial completion of the North Carolina Initial
               Project, but not later than December 31, 1997, a certificate of
               the chief financial officer, controller, treasurer, chief
               accounting officer or other authorized officer of Company: (i)
               certifying that the North Carolina Initial Project is completed
               and that the cement fiber production line included therein is
               operational and satisfactorily producing inventory of
               merchantable quality, and (ii) identifying purchase orders
               received by Company for such inventory and amounts of such
               inventory ordered pursuant to such purchase orders, and (iii)
               identifying, by grade, the inventory produced at the North
               Carolina Initial Project in the immediately preceeding four (4)
               week period.

          (i)  with reasonable promptness, such other material information and
               data with respect to Company or any Subsidiary, as from time to
               time may be reasonably requested by any Bank.

     12.2 Books, Records and Inspections.  Company and the Permitted Borrowers
          ------------------------------                                      
will, and will cause each Subsidiary to, keep true books of records and accounts
of all their business transactions in accordance with GAAP or (with respect to
activities and transactions in foreign jurisdictions) such other accounting
principals as may be required in such foreign jurisdiction.  Company and the
Permitted Borrowers will, and will cause each Subsidiary to, permit, upon
reasonable prior notice by Agent to any authorized officer of Company, officers
and designated representatives of the Agent and/or any Banks to visit and
inspect properties or assets of Company, the Permitted Borrowers and any other
Subsidiary, and to examine the books of account of Company, the Permitted
Borrowers and any other Subsidiary, and to discuss the affairs, finances and
accounts of Company, the Permitted Borrowers and any other Subsidiary with its
and their officers and independent accountants (in the presence of such
officers), all at such times and intervals as the Agent may reasonably request.

                                     -66-
<PAGE>
 
     12.3 Maintenance of Property; Insurance.
          ---------------------------------- 

          (a)  Company, the Permitted Borrowers and each other Restricted
               Subsidiary will exercise commercially reasonable efforts to
               maintain or cause to be maintained in good repair, working order
               and condition (subject to normal wear and tear) all material
               properties used in its businesses and from time to time will make
               or cause to be made all appropriate repairs, renewals and
               replacements thereof and will maintain and renew as necessary all
               material licenses, permits and other clearances necessary to use
               and occupy such properties of Company, the Permitted Borrowers
               and each other Restricted Subsidiary.

          (b)  Company, the Permitted Borrowers and each other Restricted
               Subsidiary will maintain or cause to be maintained, with
               financially sound and reputable insurers, insurance with respect
               to its properties, business and activities against liabilities,
               loss or damage of the kinds customarily insured against by
               corporations of established reputation engaged in the same or
               similar businesses and similarly situated, of such types and in
               such amounts as are customarily carried under similar
               circumstances by such other corporations to the extent that such
               types and such amounts of insurance are available at commercially
               reasonable rates.  Company, the Permitted Borrower or each other
               Restricted Subsidiary, as applicable, will furnish to each Bank,
               upon reasonable request, information as to the insurance carried.

     12.4 Payment of Taxes.  Company and each Permitted Borrower will pay and
          ----------------                                                   
discharge, and will cause each Subsidiary to pay and discharge, all material
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, prior to the date
on which material penalties attach thereto, and all lawful claims which, if
unpaid, might become a Lien or charge upon any properties of Company, any
Permitted Borrower or any Subsidiary or cause a failure or forfeiture of title
thereto; provided that neither Company, any Permitted Borrower nor any
Subsidiary shall be required to pay any such tax, assessment, charge, levy or
claim that is being contested in good faith and by proper proceedings promptly
instituted and diligently conducted if it has maintained adequate reserves with
respect thereto in accordance with GAAP.

     12.5 Corporate Franchises.  Company and each Permitted Borrower will do,
          --------------------                                               
and will cause each Restricted Subsidiary to do, or cause to be done, all things
necessary to preserve and keep in full force and effect its existence, rights
and authority, except where such failure to keep in full force and effect such
rights and authority would not have a Material Adverse Effect.

     12.6 Compliance with Statutes, etc.  Company and each Permitted Borrower
          -----------------------------                                      
will, and will cause each Restricted Subsidiary to, comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property other than non-

                                     -67-
<PAGE>
 
compliance which would not reasonably be expected to have a Material Adverse
Effect.

     12.7 ERISA.  Company will furnish to each of the Banks:
          -----                                             

          (a)  promptly upon Company knowing or having reason to know of the
               occurrence of any: (i) Termination Event; or (ii) "prohibited
               transaction," within the meaning of Section 406 of ERISA or
               Section 4975 of the Code, in connection with any Pension Plan or
               any trust created thereunder, which in the case of all such
               events described in clause (i) or (ii) results or could
               reasonably be expected to result in a liability of Company, any
               Subsidiary or ERISA Affiliates in the aggregate in excess of Five
               Hundred Thousand Dollars ($500,000), a written notice specifying
               the nature thereof, what action Company, such Subsidiary or ERISA
               Affiliates have taken, are taking or propose to take with respect
               thereto, and, when known, any action taken or threatened by the
               Internal Revenue Service, Department of Labor, PBGC or
               Multiemployer Plan sponsor with respect thereto; and

          (b)  with reasonable promptness copies of: (i) all notices received by
               Company, its Subsidiaries or ERISA Affiliates of PBGC's intent to
               terminate any Title IV Plan or to have a trustee appointed to
               administer any Title IV Plan, the notice of which event is
               required pursuant to the preceding paragraph (a); (ii) upon the
               request of the Agent each Schedule B (Actuarial Information) to
               the annual report (Form 5500 Series) filed by Company or any of
               its ERISA Affiliates with the Internal Revenue Service with
               respect to each Pension Plan; (iii) upon the request of the
               Agent, the most recent actuarial valuation report for each Title
               IV Plan; and (iv) all notices received by Company, its
               Subsidiaries or any ERISA Affiliates from a Multiemployer Plan
               sponsor concerning the imposition or amount of withdrawal
               liability pursuant to Section 4202 of ERISA, the notice of which
               event is required pursuant to the preceding paragraph (a).

     12.8 Performance of Obligations.  Company and each Permitted Borrower will,
          --------------------------                                            
and will cause each Restricted Subsidiary to, perform in all material respects
all of its obligations under the terms of each mortgage, indenture, security
agreement, other debt instrument, their respective trade obligations and
material contracts by which they are bound or to which they are parties, except
where such nonperformance would not have a Material Adverse Effect.

     12.9 End of Fiscal Years; Fiscal Quarters.  Company will have its fiscal
          ------------------------------------                               
years end on December 31 and fiscal quarters end on or about March 31, June 30,
September 30 and December 31.

                                     -68-
<PAGE>
 
     12.10  Environmental Events.
            -------------------- 

          (a)  The Company will promptly give notice to the Agent upon becoming
               aware of any of the following which could reasonably be expected
               to result in liability under any Environmental law which would
               have a Material Adverse Effect: (i) of any violation by Company
               or any Subsidiary of any Environmental Law; (ii) of any inquiry,
               proceeding, investigation or other action, including a request
               for information or a notice of potential environmental liability
               from any foreign, federal, state or local environmental agency or
               board; or (iii) of the discovery of the release of any Hazardous
               Material at, on, under or from any of the real properties owned
               or operated by Company or any Subsidiary or any facility or
               equipment thereat in excess of reportable or allowable standards
               or levels under any Environmental Law.

          (b)  In the event of the presence of any Hazardous Material on any of
               the real properties owned or operated by Company or any
               Subsidiary which is in violation of, or which could reasonably be
               expected to result in liability under, any Environmental law, in
               each case which would have a Material Adverse Effect, upon
               discovery thereof and the determination of its materiality, shall
               take all necessary steps to initiate and expeditiously complete
               all remedial, corrective and other action to mitigate and
               eliminate any such adverse effect, and shall keep the Agent
               informed of their actions and the results.

     12.11  Restricted Subsidiary Documents.  Upon the creation, acquisition or
            -------------------------------                                    
designation of any Restricted Subsidiary which is not a Non-Material Restricted
Subsidiary, Company and the Permitted Borrowers will:

          (a)  cause such Restricted Subsidiary, to execute and deliver to the
               Agent on behalf of the Banks a Guaranty; and

          (b)  if such Restricted Subsidiary is organized under a jurisdiction
               outside of the United States, pledge to Agent on behalf of Banks
               not less than sixty five percent (65%) of the capital stock of
               such Restricted Subsidiary and all indebtedness then or
               thereafter owing by such Restricted Subsidiary to Company or any
               of its Subsidiaries;

together (in each case) with such documents, instruments, certificates and legal
opinions as Agent and the Banks, in their sole discretion, shall require
regarding the authorization for such execution and delivery and the
enforceability and effectiveness of such Documents.

                                     -69-
<PAGE>
 
13.  NEGATIVE COVENANTS
     ------------------

     Company and the Permitted Borrowers hereby covenant and agree that so long
as this Agreement is in effect and until the Revolving Credit Commitment is
fully terminated, and the Loans together with interest, fees and all other
obligations incurred hereunder or under the Documents are paid in full:

     13.1 Changes in Business.  Each of them will not, and will not permit any
          -------------------                                                 
Subsidiary to, materially alter the character of its primary businesses from, or
enter into or acquire businesses primarily different from, the business of the
manufacture, distribution and sale of building products and materials.

     13.2 Liens.  Each of them will not, and will not permit any Subsidiary to,
          -----                                                                
create, incur, assume or suffer to exist any Lien upon or with respect to any
property or assets of the Company or any Subsidiary, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets or assign any right to receive income, or file or permit the filing of
any financing statement under the UCC or any other similar notice of Lien under
any similar recording or notice statute, except:

          (a)  to Agent on behalf of the Banks;

          (b)  Permitted Encumbrances;

          (c)  Liens upon real or personal property acquired (either directly or
               indirectly as a result of an acquisition pursuant to Section 13.9
               hereof) by Company or Restricted Subsidiaries after November 24,
               1993; provided that: (i) any such Lien either encumbers such
               property prior to the acquisition thereof or is created solely
               for the purpose of securing indebtedness incurred to finance the
               acquisition thereof; (ii) the principal amount of the
               indebtedness secured by such Lien does not exceed the fair value
               of the property at the time such Lien was created; (iii) such
               Lien does not extend to or cover any other property other than
               the assets so acquired; and (iv) the incurrence of the
               indebtedness secured by such Lien is permitted by Section 13.3(b)
               or (e); and

          (d)  Liens upon property and assets of Non-Restricted Subsidiaries to
               secure indebtedness permitted under Section 13.3(g) hereof,
               except to the extent such assets constitute obligations of
               Company or any Restricted Subsidiary to such Non-Restricted
               Subsidiary.

     13.3 Indebtedness.  Each of them will not, and will not permit any
          ------------                                                 
Subsidiary to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:

          (a)  pursuant to this Agreement and the Documents;

                                     -70-
<PAGE>
 
          (b)  existing Indebtedness of Company and ABT described on Schedule
               11.19 hereto and any refinancings thereof, provided that any such
               refinancing shall be on terms which are no less favorable to the
               Banks than the correlative terms of the existing indebtedness;

          (c)  obligations under Interest Rate Agreements;

          (d)  unsecured Indebtedness of Company and Restricted Subsidiaries not
               exceeding Two Million Dollars ($2,000,000) in the aggregate at
               any time outstanding;

          (e)  obligations of Company and Restricted Subsidiaries with respect
               to capitalized leases of real and personal property and lease
               obligations of the type described in Section 13.7 hereof to the
               extent that the portion of the obligations thereunder which would
               be included as Indebtedness in accordance with GAAP do not exceed
               Seven Million Five Hundred Thousand Dollars ($7,500,000) in
               aggregate amount at any time outstanding;

          (f)  intercompany Indebtedness: (i) of Company or any Restricted
               Subsidiary owing to Company or a Restricted Subsidiary, provided
               that, all such indebtedness at any time owing by any Restricted
               Subsidiary which is organized under the laws of a jurisdiction
               outside of the United States, shall be evidenced by, and limited
               to the principal amount of, a note (in form and content similar
               to the Intercompany Note) pledged to Agent and the Banks; or (ii)
               of a Non-Restricted Subsidiary to Company or a Restricted
               Subsidiary to the extent permitted by Section 13.12 hereof;

          (g)  Indebtedness and obligations of Non-Restricted Subsidiaries to
               Persons other than Company or a Restricted Subsidiary to the
               extent that, after the incurrence thereof, at least one dollar
               ($1) of additional Indebtedness could be incurred by Company and
               its Subsidiaries without causing a violation of Section 13.4
               hereof as if determination of such covenants were made on the
               date of the incurrence of such Indebtedness or obligation;

          (h)  Permitted Bond Financing; and

          (i)  Permitted Private Placement Debt.

     13.4 Financial Covenants.  Each of them will not permit, with respect to
          -------------------                                                
both the Company and the Subsidiaries and (by separate determination) the
Company and the Restricted Subsidiaries:

          (a)  the Fixed Charge Coverage Ratio, as of the last day of any fiscal
               quarter, 

                                     -71-
<PAGE>
 
               to be less than:

               (i)    from the Closing Date until December 30, 1998, 1.5 to 1;

               (ii)   from and including December 31, 1998 until December 30,
                      1999, 2.1 to 1; and

               (iii)  from and including December 31, 1999 and at all times
                      thereafter, 2.5 to 1;

          (b)  the Leverage Ratio, as of the last day of any fiscal quarter, to
               be more than 3.25 to 1.0; or

          (c)  to have a Tangible Net Worth, as of the last day of any fiscal
               quarter, of less than the sum of: (i) Eighty Four Million Seven
               Hundred Eighty Two Thousand Dollars ($84,782,000), and (ii) fifty
               percent (50%) of the greater of the Net Income (if positive) of
               Company and the Subsidiaries or Company and the Restricted
               Subsidiaries earned (in each case) in each fiscal quarter
               subsequent to the fiscal quarter ended December 31, 1996.

     13.5 ERISA.  Each of them will not, and will not permit any Subsidiary or
          -----                                                               
ERISA Affiliates to:

          (a)  engage in any transaction in connection with which any of them
               could be subject to either a tax imposed by Section 4975(a) of
               the Code or the corresponding civil penalty assessed pursuant to
               Section 502(i) of ERISA, which penalties and taxes for all such
               transactions could reasonably be expected to be in an aggregate
               amount in excess of Five Hundred Thousand Dollars ($500,000);

          (b)  permit to exist any accumulated funding deficiency, for which a
               waiver has not been obtained from the Internal Revenue Service,
               with respect to any Pension Plan;

          (c)  permit to exist any failure to make contributions or any unfunded
               benefits liability which creates, or with the passage of time
               would create, a statutory lien or requirement to provide security
               under ERISA or the Code in favor of the PBGC or any Pension Plan,
               Multiemployer Plan or other entity;

          (d)  permit the sum of the amount of unfunded benefit liabilities
               (determined in accordance with Statement of Financial Accounting
               Standards No. 35) under all Title IV Plans (excluding each Title
               IV Plan with an amount of unfunded benefit liabilities of zero or
               less) to exceed One Million Dollars ($1,000,000); and

                                     -72-
<PAGE>
 
          (e)  fail to make any payment to any Multiemployer Plan that any of
               them may be required to make under such Multiemployer Plan, any
               agreement relating to such Multiemployer Plan, or any law
               pertaining thereto.

     13.6 Merger and Consolidations.  None of them will merge or consolidate
          -------------------------                                         
with any Person, or permit any Restricted Subsidiary to merge or consolidate
with any Person unless:

          (a)  in each such consolidation or merger: (i) involving Company,
               Company is the surviving entity; and (ii) involving one or more
               Restricted Subsidiaries (but not Company), a Restricted
               Subsidiary is the surviving entity; provided, further, that if a
               Restricted Subsidiary organized under the laws of a jurisdiction
               within the United States is a party to such consolidation or
               merger, such Restricted Subsidiary shall be the survivor thereof;
               and

          (b)  immediately after giving effect thereto, no Default or Event of
               Default shall exist hereunder, including any Default under
               Section 13.4 hereof as if determinations of such covenants were
               made as of the date of and after giving effect to such merger or
               consolidation.

     13.7 Sale and Lease-Backs.  Each of them will not, and will not permit any
          --------------------                                                 
Restricted Subsidiary to, directly or indirectly, become or remain liable as
lessee or as guarantor or other surety with respect to the lessee's obligations
under any lease, whether an operating lease or a capital lease, of any property
(whether real or personal or mixed) whether now owned or hereafter acquired; (i)
which Company or such Restricted Subsidiary has sold or transferred or is to
sell or transfer to any other Person; or (ii) which Company or such Restricted
Subsidiary intends to use for substantially the same purpose as any other
property which has been or is to be sold or transferred in connection with such
lease, if such sale and such lease are part of the same transaction or a series
of transactions, except to the extent such liability is permitted under Section
13.3(e) or (h) hereof.

     13.8  Sale or Discount of Receivables.  Each of them will not, and will not
           -------------------------------                                      
permit any Restricted Subsidiary to, sell or discount (other than in connection
with trade discounts in the ordinary course of business consistent with past
practice), notes or accounts receivables which exceed, in aggregate face value
at any time, Five Hundred Thousand Dollars ($500,000).

     13.9 Acquisitions.  Each of them will not acquire or become obligated to
          ------------                                                       
acquire, or permit any Subsidiary to acquire or become obligated to acquire, any
Person or all or substantially all of the assets of any other Person, in any
transaction or series of transactions which, in any twelve (12) month period,
involves aggregate purchase prices (including in the determination of such
purchase price all indebtedness to be assumed by the acquiring entity and the
amount of any indebtedness secured by any Lien on such acquired assets) in
excess of Five Million Dollars ($5,000,000) unless, not less than fifteen (15)
Business Days before becoming obligated to make such acquisition, Company shall
have delivered to Agent and each of the Banks:

                                     -73-
<PAGE>
 
          (a)  pro forma financial statements for Company and the Subsidiaries
               and for Company and the Restricted Subsidiaries, for each year
               during which Loans may be Advanced under this Agreement, and each
               prepared on a Consolidated basis giving effect to such
               contemplated acquisition;

          (b)  a certificate of the chief financial officer, controller, chief
               accounting officer or other authorized officer of Company to the
               effect that, as of the date thereof, and after giving effect to
               the contemplated acquisition, no Default or Event of Default does
               or shall exist, accompanied by a compliance certificate in form
               similar to that required under Section 12.1(d) hereof setting
               forth calculations required to establish whether any Default or
               Event of Default will exist under Section 13.4 hereof, as if
               determinations of such covenants were to be made as of the date
               of and after giving effect to such acquisition; and

          (c)  such documents, instruments, agreements, appraisals and analysis
               related to the assets to which the contemplated acquisition
               relates, or the assets and liabilities of the Person to which
               such contemplated acquisition relates, as Agent and the Banks may
               reasonably request to enable Agent and the Banks to independently
               analyze and confirm the information contained and presented
               pursuant to subsections (a) and (b) above.

     13.10  Indemnification Agreement.  Company will not release, forgive or
            -------------------------                                       
waive (either in whole or part) the indemnification obligations of Abitibi-Price
Corporation under the Purchase Agreement with respect to the "Excluded
Liabilities" as defined in the Purchase Agreement and the escrow agreement
related thereto except with respect to Excluded Liabilities which Company has
obtained adequate insurance.

     13.11  Contingent Obligations.  Each of them will not, and will not permit
            ----------------------                                             
any Restricted Subsidiary to, directly or indirectly, create or become liable
with respect to any obligation of another Person except:

          (a) guaranties resulting from endorsement of negotiable instruments
for collection in the ordinary course of business;

          (b)  guaranties, assurances or assumptions of liabilities entered by
               Company or a Restricted Subsidiary in support of indebtedness or
               obligations of Company or a Restricted Subsidiary to the extent
               (i) such indebtedness is permitted under Section 13.3(a) through
               (f) hereof or (ii) such obligations are not obligations for
               borrowed money and are existing obligations of a Restricted
               Subsidiary acquired in accordance with the procedures set forth
               in Section 13.9 hereof;

          (c)  guaranties, assurances or assumptions of liabilities by Company
               or a

                                     -74-
<PAGE>
 
               Restricted Subsidiary in support of indebtedness or obligations
               of a Non-Restricted Subsidiary to the extent permitted pursuant
               to Section 13.12 hereof; and

          (d)  other contingent obligations the liability under which does not
               exceed Five Million Dollars ($5,000,000) in aggregate amount
               outstanding at any time.

     13.12  Non-Restricted Amount.  Each of them will not, and will not permit
            ---------------------                                             
any Restricted Subsidiary to:

          (a)  make investments (other than in Cash Equivalents) in any Person
               other than a Restricted Subsidiary, or make any loan or advance
               to any Person other than a Restricted Subsidiary and other than
               loans and advances to vendors and employees in the ordinary
               course of business, or guaranty or assume obligations of a Person
               other than a Restricted Subsidiary to the extent that the
               aggregate amount of all such investments, loans and advances and
               the amount of all indebtedness or obligations so assumed and/or
               guarantied would exceed, as of the date of such investment, loan
               or advance, assumption or guaranty the Non-Restricted Amount; or

          (b)  declare or pay any dividends or distributions on or for
               purchases, redemptions or other acquisitions or retirements of
               capital stock to the extent that, after giving effect to such
               declaration or payment, their investments, loans and advances,
               assumptions of obligations and guaranties of indebtedness, of the
               types described in subsection (a) above would exceed the Non-
               Restricted Amount as calculated after giving effect to such
               declaration or payment.

     13.13  Changes to Permitted Bond Financing and Permitted Private Placement
            -------------------------------------------------------------------
Debt.
---- 

          In the event of the incurrence of the Permitted Bond Financing and/or
Permitted Private Placement Debt, Company shall not, without the consent of
Agent and the Majority Banks:

          (a)  amend, modify or change any of the terms or provisions of the
               documents or instruments governing or evidencing such Permitted
               Bond Financing or Permitted Private Placement Debt in a manner
               which adversely affects the interests of Agent or the Banks or
               which would result in negative or financial covenants applicable
               to the Permitted Bond Financing or Permitted Private Placement
               Debt being more restrictive than the covenants set forth in this
               Agreement, or

          (b)  prepay, purchase, redeem or retire Permitted Private Placement
               Debt, other than by payment of scheduled installments thereon
               required pursuant to the terms of the indenture or agreement
               governing such Permitted 

                                     -75-
<PAGE>
 
               Private Placement Debt.

     13.14  Use of Loan Proceeds.  Each of them will not use, or permit the use
            --------------------                                               
of, the proceeds of Loans for purposes other than those permitted under this
Agreement and will not use or permit the use of any such Loan proceeds in
violation of Regulation U or G of the Federal Reserve Board as now or hereafter
in effect, or for any other purpose which violates provisions of regulations of
the Federal Reserve Board.

14.  DEFAULTS
     --------

     14.1   Events of Default.  Any of the following events is an "Event of
            -----------------                                              
Default":

          (a)  non-payment, when due, of the principal under any of the Notes,
               or of any Letter of Credit Obligation to be paid hereunder or
               under any Letter of Credit Agreement in accordance with the terms
               hereof and thereof;

          (b)  default in the payment of interest under this Agreement or any of
               the Notes or of any Fees or of any amount due and payable by
               Company or any Permitted Borrower under this Agreement or any
               other Document, other than as set forth in subsection (a) above,
               and continuation of such default for three (3) Business Days
               after the date the same became due and payable;

          (c)  default is made in the due observance or performance of any
               terms, covenant or agreement contained in Sections 12.1(a),
               (b),(d), and (g) (and continuation of such a default under any
               such Section for five (5) Business Days) or contained in Section
               12.9 or Sections 13.1 through 13.14 of this Agreement;

          (d)  default is made in the due observance or performance of any other
               term, covenant or agreement contained in this Agreement or any
               other Document and such default continues unremedied for a period
               of thirty (30) days after written notice of such default to
               Company by Agent, or the repudiation or purported revocation by
               Company or any Subsidiary of any of their respective covenants or
               obligations under any Document to which they are party;

          (e)  any representation or warranty made by Company, any Permitted
               Borrower herein, or by Company, any Permitted Borrower or any
               Subsidiary in any instrument submitted pursuant hereto or by any
               other party to the Documents, proves to have been untrue in any
               material respect when made or deemed made;

          (f)  default in the payment of obligations with respect to Permitted
               Bond Financing or Permitted Private Placement Debt or of any
               other obligation 

                                     -76-
<PAGE>
 
               of Company or any Subsidiary for borrowed money having a
               principal amount in excess of Five Million Dollars ($5,000,000)
               in aggregate, or in the observance or performance of any term,
               covenant or condition in any agreement or instrument evidencing,
               securing or relating to Permitted Bond Financing or Permitted
               Private Placement Debt or such other indebtedness and such
               default shall be continued for a period sufficient to permit
               acceleration of the indebtedness prior to its expressed maturity;

          (g)  the rendering of any judgments for the payment of money in excess
               of One Million Dollars ($1,000,000) in the case of any one
               judgment or the sum of Five Million Dollars ($5,000,000) in the
               aggregate against Company or its Subsidiaries, and such judgments
               shall remain unpaid, unvacated, or unstayed by appeal or
               otherwise on or before three (3) Business Days prior to the
               earliest date on which proceedings for the enforcement thereof
               may be instituted under the applicable rules or statutes of the
               jurisdiction in which said judgments are rendered;

          (h)  the occurrence of any "reportable event", as defined in ERISA,
               which is determined by the Pension Benefit Guaranty Corporation
               in a written notice to Company or any Subsidiary or ERISA
               Affiliate to constitute grounds for termination of any Pension
               Plan maintained by or on behalf of such Person for the benefit of
               any of its employees or for the appointment by the appropriate
               United States District Court of a trustee to administer such
               Pension Plan and such reportable event is not corrected and such
               determination is not revoked within thirty (30) days after notice
               thereof has been given to the plan administrator or such Person;
               or the institution of proceedings by the Pension Benefit Guaranty
               Corporation to terminate any such Pension Plan or to appoint a
               trustee to administer such Pension Plan; or the appointment of a
               trustee by the appropriate United States District Court to
               administer any such Pension Plan or Company or any Subsidiary or
               any ERISA Affiliate shall become liable to the PBGC or any other
               party under Section 4062, 4063 or 4064 of ERISA with respect to
               any Pension Plan or to any Multiemployer Plan under Section 4021
               et seq. of ERISA which, in the case of any of the foregoing,
               could reasonably be expected to result in a Material Adverse
               Effect;

          (i)  if a creditors' committee shall have been appointed for the
               business of Company or any Subsidiary, or if any of them shall
               have made a general assignment for the benefit of creditors or
               shall have been adjudicated bankrupt, or shall have filed a
               voluntary petition in bankruptcy or for reorganization or to
               effect a plan or arrangement with creditors or shall fail to pay
               its debts generally as such debts become due in the ordinary
               course of business; or shall file an answer to a creditor's
               petition or other petition filed against it, admitting the
               material allegations thereof for an adjudication in bankruptcy or
               for reorganization; or shall have a creditor's 

                                     -77-
<PAGE>
 
               petition or other petition filed against it and such petition is
               not dismissed within thirty (30) days of such filing; or shall
               have applied for or permitted the appointment of a receiver or
               trustee or custodian for any of its property or assets; or such
               receiver, trustee or custodian shall have been appointed for any
               of its property or assets or if an order shall be entered
               approving any petition for reorganization of Company or any
               Subsidiary;

          (j)  if the Person holding the majority of the capital stock of
               Company as of the date hereof, together with Persons controlled
               by or under common control with such Person ("Current
               Management") shall by reason of any sale of capital stock, cease
               to own at least the largest block of the issued and outstanding
               shares of capital stock of Company and of the shareholder votes
               entitled to vote for the elections of Company's board of
               directors.

     14.2 Exercise of Remedies.  If an Event of Default has occurred and is
          --------------------                                             
continuing hereunder:

          (a)  Banks' commitment to make Advances (other than the irrevocable
               obligation to make Advances pursuant to Section 3.7 hereof), and
               the commitment to issue Letters of Credit hereunder, shall
               immediately and automatically terminate;

          (b)  the Agent may with the consent of the Majority Banks, (i) declare
               the entire unpaid balance of the Loans and other indebtedness
               hereunder, including the Notes, immediately due and payable,
               without presentment, notice or demand, all of which are hereby
               expressly waived by Company and each Permitted Borrower and/or
               (ii) require the payment by Company and the Permitted Borrowers,
               into a restricted demand deposit account with Agent, of an amount
               equal to the undrawn face amount of any outstanding Letters of
               Credit;

          (c)  immediately and automatically upon the occurrence of any Event of
               Default specified in Subsection 14.1(i) above, and
               notwithstanding the lack of any declaration by Agent under
               preceding clause (b), the entire unpaid principal of the Loans
               and other indebtedness hereunder, including the Notes, shall
               become automatically due and payable (subject only to Banks'
               irrevocable obligation to make Advances required pursuant to
               Section 3.7 hereof) and Company and the Permitted Borrowers shall
               immediately and automatically be required to pay an amount equal
               to the undrawn face amount of any outstanding Letters of Credit
               into a restricted demand deposit account with Agent;

          (d)  upon direction of the Majority Banks, Agent may, on behalf of all
               of the Banks, exercise any remedy permitted by this Agreement,
               the Documents or law.

                                     -78-
<PAGE>
 
     14.3 Waiver of Defaults.  No Event of Default shall be waived by the Banks
          ------------------                                                   
except in a writing made in accordance with Section 16.8 hereof.  No single or
partial exercise of any right, power or privilege hereunder, nor any delay in
the exercise thereof, shall preclude other or further exercise of Agent's rights
or of Banks' rights by Agent.  No waiver of any Event of Default shall extend to
any other or future Event of Default.  No forbearance on the part of the Agent
in enforcing Agent's or any of Banks' rights shall constitute a waiver of any of
their respective rights.  Company and the Permitted Borrowers expressly agree
that this Section may not be waived or modified by Banks or Agent by course of
performance, estoppel or otherwise.

15.  AGENT
     -----

     15.1 Appointment of Agent and Co-Agents.  Each Bank, each Issuing Bank,
          ----------------------------------                                
each holder of each Note and each assignee of an interest in Letter of Credit
Agreements and Letter of Credit Obligations appoints and authorizes Agent and
the Co-Agents to act on behalf of such Bank or holder under the Documents and to
exercise the respective powers hereunder and thereunder as are specifically
delegated to or required of them by the terms hereof and thereof, together with
such powers as may be reasonably incidental thereto, including, in the case of
Agent, the power to execute financing or similar statements or notices and other
documents.  Each Bank agrees (which agreement shall survive any termination of
this Agreement) to reimburse Agent (to the extent Agent is not reimbursed by
Company and except to the extent arising or incurred as a consequence of Agent's
gross negligence or willful misconduct), for all reasonable out-of-pocket
expenses (including house and outside attorneys' fees) incurred by Agent
hereunder or in connection herewith or with an Event of Default or in enforcing
the obligations of Company or any Permitted Borrower under this Agreement or the
Documents or any other instrument executed pursuant hereto, pro rata according
to such Bank's Percentage thereof.  Neither Agent or either Co-Agent shall be
required to take any action under the Documents, or to prosecute or defend any
suit in respect of the Documents, unless indemnified to its satisfaction by the
Banks against loss, costs, liability and expense.  If any indemnity furnished
pursuant hereto shall become impaired, it may call for additional indemnity and
cease to do the acts indemnified against until such additional indemnity is
given.

     15.2  Deposit Account with Agent.  Company and each Permitted Borrower
           --------------------------                                      
hereby authorizes Agent to charge its general deposit account, if any,
maintained with Agent for the amount of any principal, interest or other payment
due under this Agreement, the Notes, or any Letter of Credit Agreement or other
Document when the same becomes due and payable under the terms of this
Agreement, the Notes, any Letter of Credit Agreement or other Documents.

     15.3  Exculpatory Provisions.  Agent agrees to exercise its rights and
           ----------------------                                          
powers, and to perform its duties as Agent hereunder and under the Documents in
accordance with its usual customs and practices in bank-agency transactions, but
only upon and subject to the express terms and conditions of this Section 15.3
(and no implied covenants or other obligations shall be read into this Agreement
against the Agent).  Neither Agent or either Co-Agent shall be liable to any
Bank for any action taken or omitted to be taken by it under this Agreement or
any document executed pursuant hereto, or in connection herewith or therewith,
except for its own willful 

                                     -79-
<PAGE>
 
misconduct or gross negligence, nor be responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any document executed pursuant
hereto, or any security thereunder, nor to make any inquiry respecting the
performance by Company, any Permitted Borrower or any Subsidiaries of their
respective obligations hereunder or thereunder, and each of them shall be
entitled to rely upon advice of counsel concerning legal matters and upon any
notice, consent, certificate, statement or writing which is believes to be
genuine and to have been presented by a proper person.

     15.4 Successor Agents.  Agent or any Co-Agent may resign as such at any
          ----------------                                                  
time upon at least thirty (30) days prior notice to Company and all Banks.  If
Agent or any Co-Agent at any time shall resign, Majority Banks may appoint a
successor Agent or Co-Agent which shall thereupon become Agent or Co-Agent (as
applicable) hereunder and shall be entitled to receive from the prior Agent such
documents of transfer and assignment as such successor Agent may reasonably
request.

     15.5 Right of Agent and Co-Agent as Banks.  Agent and each Co-Agent, in its
          ------------------------------------                                  
capacity as a Bank, shall have the same rights and powers with respect to the
credit extended by it, and the Notes held by it, and with respect to
participation interests in Letters of Credit issued and Letter of Credit
Agreements entered pursuant hereto, as any Bank, and the term "Bank" and, when
appropriate, "holder" shall include Agent and each Co-Agent in their respective
individual capacities.

     15.6 Credit Decisions.  Each Bank acknowledges that it has and shall,
          ----------------                                                
independently of Agent and each other Bank and based on the financial statements
of Company and such other documents, information and investigations as it has
deemed appropriate, made its own credit decision to extend credit hereunder from
time to time.  Each Bank also acknowledges that it will, independently of Agent,
each Co-Agent and each other Bank and based on such other documents, information
and investigations as it shall deem appropriate at any time, continue to make
its own credit decisions as to exercising or not exercising from time to time
any rights and privileges available to it under this Agreement or any document
executed pursuant hereto.

     15.7 Notices by Agent.  Agent shall give prompt notice to each Bank of each
          ----------------                                                      
notice or request required or permitted to be given to Agent by Company or any
Permitted Borrower pursuant to the terms of this Agreement and of any litigation
commenced by or against Agent with respect to this Agreement.

     15.8 Agent's Fees.  The Company shall pay to Agent the Agent's Fees at the
          ------------                                                         
times and in the amount set forth (or to be set forth from time to time) in a
letter agreement between Agent and Company. The Agent's Fees described in this
Section are not refundable under any circumstances.

     15.9 Nature of Agency.  The appointment of Agent as agent is for the
          ----------------                                               
convenience of Banks, the Company and the Permitted Borrowers in making Loans,
administering Letters of Credit, collecting fees and principal and interest on
the Loans and dealing with Company and the Subsidiaries.  Except as set forth in
Article 3 hereof, no Bank is purchasing Loans from Agent 

                                     -80-
<PAGE>
 
and this Agreement is not intended to be a purchase or participation agreement.

     15.10  Actions; Confirmation of Agent's Authority to Act in Event of
            -------------------------------------------------------------
Default.  Subject to Sections 14.2(b) and (d) and 15.11 hereof, Agent is hereby
-------                                                                        
expressly authorized to act in all litigation and in all other respects as the
representative of Banks where Agent considers it to be necessary or desirable in
order to carry out the purposes of this Agreement or any of the Documents.  In
conducting such litigation hereunder on behalf of Banks, Agent shall at all
times be indemnified by Banks as provided in Section 15.1 hereof.  Agent shall
undertake to give each Bank prompt notice of any litigation commenced against
Agent and/or Banks with respect to this Agreement the Documents or any matter
referred to herein or therein.

     15.11  Authority of Agent to Enforce Notes And This Agreement.  Each Bank,
            ------------------------------------------------------             
subject to the terms and conditions of this Agreement, authorizes the Agent with
full power and authority as attorney-in-fact to institute and maintain actions,
suits or proceedings for the collection and enforcement of the Notes, this
Agreement and the Documents (or any of them) and to file such proofs of debt or
other documents as may be necessary to have the claims of the Banks allowed in
any proceeding relative to the Company, any Permitted Borrower or any
Subsidiaries or their respective creditors or affecting their respective
properties, and to take such other actions which Agent considers to be necessary
or desirable for the protection, collection and enforcement of the Notes, this
Agreement or the Documents (or any of them).

     15.12  Co-Agents.  The Co-Agents, in such capacity, shall have no duties or
            ---------                                                           
responsibilities, and shall incur no liabilities under, this Agreement or the
other Documents.

16.  MISCELLANEOUS
     -------------

     16.1   Law of Michigan; Submission to Jurisdiction.  This Agreement, the
            -------------------------------------------                      
Notes and Documents have been delivered at Detroit, Michigan, and shall be
governed by and construed and enforced in accordance with the laws of the State
of Michigan.  Whenever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

     Any legal action or proceeding with respect to this Agreement or any other
Document may be brought in the courts of the State of Michigan or of the United
States District Court for the Eastern District of Michigan, and, by execution
and delivery of this Agreement, each party hereto hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the non-
exclusive jurisdiction of the aforesaid courts. Company and each Permitted
Borrower further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to its address
for notices pursuant to Section 16.3 hereof, such service to become effective
three (3) Business Days after such mailing. Nothing herein shall affect the
rights of the Agent or any Bank to serve process in any other manner 

                                     -81-
<PAGE>
 
permitted by law.

     Company and each Permitted Borrower hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any proceedings
arising out of or in connection with this Agreement or any Document brought in
the courts referred to above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.

     16.2   Agent's Costs and Expenses.  Company shall pay all reasonable costs
            --------------------------                                         
and expenses, including, by way of description and not limitation, outside
attorney fees and out-of-pocket expenses and lien and title search fees incurred
by Agent in connection with the commitment, consummation, and closing of the
loans contemplated hereby and in the exercise and enforcement of its rights and
prerogatives hereunder and under the Documents.  All costs, including attorney
fees, incurred by Agent in revising, protecting, exercising or enforcing any of
its rights hereunder and under the Documents, or otherwise incurred by Agent in
connection with an Event of Default or incurred by Agent or any of the Banks in
connection with the enforcement hereof, including by way of description and not
limitation, such charges in any court or bankruptcy proceedings or arising out
of any claim or action by any person against Agent or any Bank which would not
have been asserted were it not for Agent's or such Bank's relationship with
Company hereunder or under the Documents, shall also be paid by Company.

     16.3   Notices.  Except as otherwise provided herein, all notices hereunder
            -------                                                             
shall be sufficient if made in writing and delivered to the mailing and delivery
address of the respective parties indicated on the signature pages to this
Agreement, or transmitted to the facsimile or telex numbers set forth on their
respective signature pages to this Agreement.  All such notices shall be deemed
received (i) two (2) Business Days after deposit thereof in the mails, if given
by mail, (ii) one (1) Business Day after deposit with express courier service,
or (iii) if by facsimile or telex transmission, the Business Day of transmission
if transmitted during customary business hours of the addressee and, if not
transmitted during such business hours, the following Business Day, provided,
however, that notices to the Agent shall not be effective until actual receipt
thereof.

     16.4   Further Action.  Company and the Permitted Borrowers, from time to
            --------------                                                    
time, upon written request of Agent will make, execute, acknowledge and deliver
or cause to be made, executed, acknowledged and delivered, all such further and
additional instruments, and take all such further action as may be required to
carry out the intent and purpose of this Agreement and the Documents, and to
provide for Loans under and payment of the Notes and Letter of Credit
Obligations, according to the intent and purpose herein and therein expressed.

     16.5   Successors and Assigns.  This Agreement shall be binding upon and
            ----------------------                                           
shall inure to the benefit of Company, the Permitted Borrowers and Banks and
their respective successors and assigns, provided that the foregoing shall not
authorize any assignment by Company or any Permitted Borrower of its rights or
duties hereunder.  Any Bank may sell, assign, grant participations in, or
otherwise transfer to any other Person all or part of the interests of such Bank
under this Agreement and the Notes and the Documents (including its
participation interests in Letters of Credit), and Loans made and to be made by
such Bank, subject to the following 

                                     -82-
<PAGE>
 
terms and conditions:

          (a)  Assignments.  Each Bank, with the written consent of the Agent
               -----------                                                   
               (which consent shall not be unreasonably withheld) may assign all
               or any portion of its Loans, Notes and other interests and
               obligations under this Agreement and the Documents pursuant to an
               Assignment Agreement to another Bank or (with the consent of
               Company, which consent shall not unreasonably be withheld, it
               being acknowledged however that, with respect to any assignment
               which would have the effect of increasing the obligations of
               Company or the Permitted Borrowers under Section 8.5 or Section
               9.5 hereof, such consent may be so withheld) to other commercial
               banks or financial institutions, provided that (i) the aggregate
               amount of the Commitments and (if then applicable) the Term Loans
               so assigned, and the portion thereof retained by such assigning
               Bank (if any), shall in each case be not less than Ten Million
               Dollars ($10,000,000) or, if less, the entire remaining portion
               of such assigning Bank's Commitments and Term Loans, and (ii)
               interests in the Line of Credit Commitment and Revolving Credit
               Commitment shall be assigned in amounts necessary to give the
               assignee the same Percentage in each Commitment.  Any such
               assignment will become effective five (5) Business Days after the
               Agent's receipt of a copy of the Assignment Agreement executed by
               the assigning Bank and the assignee Bank, payment to Agent of a
               processing and recordation fee in the amount of Three Thousand
               Five Hundred Dollars ($3,500) for Agent's sole account, and
               delivery to Agent (in escrow, pending issuance of Notes pursuant
               to the following sentence) of the assigning Bank's then effective
               Note.  On or before such effective date (x) Agent shall provide
               Company with written notice of such assignment, (y) Company and
               the Permitted Borrowers shall execute and deliver to Agent new
               Notes made payable to the assignee and assignor, and (z) Agent
               shall prepare and deliver to Company and the Banks a new Schedule
               1.91 to this Agreement (which new Schedule 1.91 shall
               automatically and without further action or consent be deemed to
               amend and restate the prior Schedule 1.91) setting forth the
               Percentages in effect as a result of such assignment, whereupon
               the assignee will become a "Bank" for all purposes of this
               Agreement and the other Documents, to the extent of such
               assignment.

          (b)  Participations.  Each Bank may transfer or grant participating
               --------------                                                
               interests in its Loans, Notes and other interests and obligations
               hereunder to any Person ("Participants") provided that, as
               between such transferring Bank and its Participant, such Bank
               shall retain all of its power, authority and discretion to grant
               or participate in the granting of any waiver, consent or other
               approval hereunder and to participate in the approval of any
               amendment to this Agreement, such Bank's Notes, the Documents or
               any other instrument or agreement delivered hereunder or in
               connection herewith, except that such Bank may agree with any
               Participant that during 

                                     -83-
<PAGE>
 
               the existence of the Participant's interest, such Bank will not,
               without consent of such Participant, agree to any amendment,
               modification, waiver, release or consent which pursuant to the
               terms hereof, requires the consent of all Banks. All amounts
               payable by Company and the Permitted Borrowers hereunder shall be
               determined as if the Bank had not sold such participation.

     16.6 Indulgence.  No delay or failure of Agent and Banks in exercising any
          ----------                                                           
right, power or privilege hereunder shall affect such right, power or privilege
nor shall any single or partial exercise thereof preclude any further exercise
thereof, nor the exercise of any other right, power or privilege.  The rights of
Agent and Banks hereunder are cumulative and are not exclusive of any rights or
remedies which Agent and Banks would otherwise have.

     16.7 Counterparts.  This Agreement may be executed in several counterparts,
          ------------                                                          
and each executed copy shall constitute an original instrument, but such
counterparts shall together constitute but one and the same instrument.

     16.8 Entire Agreement; Amendments; Waivers; Consents.  This Agreement, the
          -----------------------------------------------                      
Notes, the Letter of Credit Agreements and Letters of Credit, the Documents, and
any agreements certificates, or other documents given pursuant to the foregoing,
contain and will contain the entire agreement of the parties hereto, and none of
the parties shall be bound by anything not expressed in writing, except that
Company and the Permitted Borrowers shall be bound by telephonic requests for
Loans made hereunder.  No amendment or waiver of any provision of this Agreement
or any Document, nor consent to any departure by Company or any Permitted
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Majority Banks, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no amendment, waiver or consent shall:

          (a)  unless in writing and signed by all Banks;

               (i)    subject Banks to any additional obligations, increase the
                      aggregate amount of principal indebtedness which may be
                      incurred under the Notes and in connection with Letters of
                      Credit, or (except as specifically set forth in Sections
                      2.6, 9.7 and 16.5(a) hereof) change the Percentages;

               (ii)   release any Guaranty, the Pledge or any collateral for any
                      of Company's obligations and indebtedness to Agent and the
                      Bank;

               (iii)  change the definition of Majority Banks or take any action
                      which requires the consent of all Banks pursuant to the
                      terms of this Agreement or any Documents; or

               (iv)   change this Section 16.8 or the definition of "Alternative

                                     -84-
<PAGE>
 
                      Currency" or "Permitted Borrower";

          (b)  unless in writing and signed by all of the Banks holding
               Revolving Credit Loans and Percentage interests in the Revolving
               Credit Commitment:

               (i)    postpone the Revolving Credit Maturity Date (except in
                      accordance with Section 2.10 hereof) or any other date
                      fixed for any payment of principal of, or interest on, any
                      Revolving Credit Loans, Letter of Credit Obligation, Swing
                      Loans or any Revolving Credit Facility Fees;

               (ii)   reduce the principal of, or interest on, any Revolving
                      Credit Note, Swing Loans or any Letter of Credit
                      Obligations or any Revolving Credit Facility Fees or other
                      amounts payable thereon;

          (c)  unless in writing and signed by each Bank having an interest in
               any Bid Loan:

               (i)    postpone the due date fixed for any payment of principal
                      of, or interest on such Bid Loan, or

               (ii)   reduce the principal of or interest on the Bid Notes
                      evidencing such Bid Loan;

          (d)  unless in writing signed by each Bank having an interest in the
               Term Loan:

               (i)    postpone the due date for any payment of principal of, or
                      interest on such Term Loan, or

               (ii)   reduce the principal of any Term Note or any installment
                      thereon or the interest on such Term Note;

          (e)  unless in writing signed by each Bank holding Line of Credit
               Loans or Percentage interests in the Line of Credit Commitment:

               (i)    postpone the Line of Credit Maturity Date (except in
                      accordance with Section 5.8 hereof) or any other date
                      fixed for payment of principal of or interest on any Line
                      of Credit Loans or Line of Credit Facility Fees payable
                      thereon;

               (ii)   reduce the principal of, or interest on, any Line of
                      Credit Note or any Line of Credit Facility Fees or other
                      amounts payable thereon;

          (f)  unless in writing and signed by the Agent:

                                     -85-
<PAGE>
 
               (i)    affect the rights of Agent,

               (ii)   postpone the due date for payment of, or interest on Swing
                      Loans or of Agents Fees, or

               (iii)  reduce the principal of or interest on Swing Loans or the
                      amounts of Agent's Fees; and

          (g)  unless in writing and signed by the affected Issuing Bank:

               (i)    increase or affect the obligations of such Issuing Bank
                      with respect to Letters of Credit issued or to be issued
                      by it, or

               (ii)   postpone the due date for payment of, or reduce the amount
                      of, fees and charges related payable with respect to its
                      Letters of Credit pursuant to Section 3.5 hereof.

     16.9   Confidentiality.  Each Bank agrees that all documentation and other
            ---------------                                                    
information made available by Company to such Bank under the terms of this
Agreement shall (except to the extent required or requested by regulatory
authority or legal or governmental process or otherwise by governmental
authority or law, or if such documentation and other information is publicly
available or hereafter becomes publicly available other than by action of such
Bank, or was theretofore known or hereafter becomes known to such Bank
independent of any disclosure thereto by Company) be held in the strictest
confidence by such Bank and used solely in administration and enforcement of
Loans from time to time outstanding from such Bank to Company or a Permitted
Borrower and in the prosecution or defense of legal proceedings arising in
connection herewith; provided that: (i) such Bank may disclose such
documentation and information to the Agent and/or to any other Bank which is a
party to this Agreement; and (ii) such Bank may disclose such documentation and
other information to any other bank or other Person to which such Bank sells or
proposes to sell a participation in its Loans hereunder if such other bank or
Person, prior to such disclosure, agrees for the benefit of Company to comply
with the provisions of this Section 16.9.

     16.10  Interest.  It is the intention of the parties hereto that each Bank
            --------                                                           
and the Agent shall conform to usury laws applicable to them, if any.
Accordingly, if the transactions with any Bank or Agent contemplated hereby
would be usurious under such applicable laws, then, notwithstanding anything to
the contrary in the Notes or Documents payable to such Bank, this Agreement or
any other agreement entered into in connection with or as security for or
guaranteeing this Agreement or the Indebtedness, it is agreed as follows: (i)
the aggregate of all consideration which constitutes interest under applicable
law that is contracted for, taken, reserved, charged or received by such Bank
under the Notes payable to such Bank, this Agreement, the Documents or under any
other agreement entered into in connection with or as security for or
guaranteeing this Agreement or such Notes or Documents shall under no
circumstances exceed the Highest Lawful Rate and any excess shall be credited
automatically, if theretofore paid, on the principal amount of Loans owed to
such Bank or, if Loans from such

                                     -86-
<PAGE>
 
Bank is outstanding, shall be refunded to Company (if paid by Company) or to the
relevant Permitted Borrower (if paid by a Permitted Borrower) by such Bank; and
(ii) in the event that the maturity of any such Note or other Indebtedness
hereunder is accelerated or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under law
applicable to such Bank may never include more than the Highest Lawful Rate and
excess interest, if any, to such Bank shall be canceled automatically as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Bank on the principal amount of the Indebtedness owed to such
Bank by the Company (if paid by Company) or to the relevant Permitted Borrower
(if paid by a Permitted Borrower) or, if no Indebtedness to such Bank is then
outstanding, shall be refunded by such Bank to the Company or such Permitted
Borrower.

     16.11  Jury Waiver.  Each of the parties to this agreement hereby
            -----------                                               
irrevocably waives all right to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement, the Documents or the
transactions contemplated hereby or thereby.

     16.12  Effective Upon Execution.  This Agreement shall become effective
            ------------------------                                        
upon the later of the execution hereof by Banks, Agent, Company and the
Permitted Borrowers and the Closing Date, and shall remain effective until all
Loans and obligations hereunder have been repaid and discharged in full and no
commitment to fund any Loan hereunder remains outstanding.

                                     -87-
<PAGE>
 
     WITNESS the due execution hereof as of the day and year first above
written.


ABT BUILDING PRODUCTS                       COMERICA BANK,
 CORPORATION                                as Agent

 
By:_______________________________          By:______________________________
   Dale H. VonBehren                           David L. Morrison
   Its: Vice President Finance -               Its: Vice President
        Treasurer

One Neenah Center, Suite 600                500 Woodward Avenue
Neenah, WI  54956-3070                      Detroit, Michigan  48226
Telephone: (414) 751-4984                   Telephone: (313) 222-3606
Facsimile: (414) 751-0370                   Facsimile: (313) 222-9516

                                     -88-
<PAGE>
 
                                    PERMITTED BORROWERS:

                                    ABT CANADA, LTD.


                                    By:__________________________________
                                         Dale H. VonBehren
                                    Its: Assistant Secretary

                                    One Neenah Center, Suite 600
                                    Neenah, Wisconsin  54956-3070
                                    Telephone: (414) 751-4982
                                    Facsimile: (414) 751-0370

                                    ABTco, INC.


                                    By:__________________________________
                                         Dale H. VonBehren
                                    Its: Vice President Finance - Treasurer

                                    One Neenah Center, Suite 600
                                    Neenah, Wisconsin  54956-3070
                                    Telephone: (414) 751-4982
                                    Facsimile: (414) 751-0370

                                    KENTECH PLASTICS, INC.


                                    By:__________________________________
                                         Dale H. VonBehren
                                    Its: Vice President and Secretary

                                    One Neenah Center, Suite 600
                                    Neenah, Wisconsin  54956-3070
                                    Telephone: (414) 751-4982
                                    Facsimile: (414) 751-0370

                                     -89-
<PAGE>
 
                                    COMERICA BANK



                                    By:_______________________________
                                         David L. Morrison
                                    Its: Vice President

                                    500 Woodward Avenue
                                    Detroit, Michigan  48226
                                    Telephone:  (313) 222-3808
                                    Facsimile:  (313) 222-9516

                                     -90-
<PAGE>
 
                                    FIRST UNION NATIONAL BANK
                                     OF NORTH CAROLINA,
                                    as Documentation Agent and Bank
                                       -------------------         



                                    By:_______________________________

                                    Its:_______________________________

                                    One First Union Center
                                    TW-19
                                    Charlotte, North Carolina  28288
                                    Telephone:  (204) 374-4795
                                    Facsimile:  (204) 374-2802

                                     -91-
<PAGE>
 
                                    HARRIS TRUST AND SAVINGS BANK
                                    as Syndication Agent and Bank
                                       -----------------         



                                    By:_______________________________

                                    Its:_______________________________

                                    111 West Monroe
                                    P.O. Box 755
                                    Chicago, Illinois  60690
                                    Telephone:  (312) 461-7788
                                    Facsimile:  (312) 461-2591
                                    ABA No. 071-000288

                                     -92-
<PAGE>
 
                                    CREDITANSTALT-BANKVEREIN



                                    By:_______________________________

                                    Its:_______________________________

                                    -and-



                                    By:_______________________________

                                    Its:_______________________________

                                    245 Park Avenue
                                    New York, New York  10167
                                    Telephone:  (212) 856-1216
                                    Facsimile:  (212) 856-1234

                                     -93-
<PAGE>
 
                                    NATIONAL CITY BANK



                                    By:__________________________________

                                    Its:_________________________________

                                    National City Center
                                    P.O. Box 5756
                                    Cleveland, Ohio 44101-0756
                                    Telephone: (810) 644-0502
                                    Facsimile: (810) 644-0432

                                     -94-
<PAGE>
 
                                    BANK ONE, DAYTON, N.A.



                                    By:___________________________________

                                    Its:__________________________________

                                    Kettering Tower
                                    P.O. Box 1003
                                    Dayton, Ohio  45401-1103
                                    Telephone: (513) 449-8721
                                    Facsimile: (513) 449-4885

                                     -95-
<PAGE>
 
                                    FIRSTAR BANK MILWAUKEE, N.A.



                                    By:__________________________________
                                         Caroline V. Krider
                                    Its: Vice President

                                    777 East Wisconsin Avenue
                                    Milwaukee, WI 53201
                                    Telephone: (414) 765-5971
                                    Facsimile: (414) 765-4632

                                     -96-
<PAGE>
 
                                    LASALLE NATIONAL BANK



                                    By:___________________________________

                                    Its:__________________________________

                                    135 South LaSalle Street
                                    Chicago, Illinois 60603-3499
                                    Telephone: (312) 904-6742
                                    Facsimile: (312) 904-6242

                                     -97-
<PAGE>
 
                                    UNITED STATES NATIONAL BANK
                                     OF OREGON


                                    By:___________________________________

                                    Its:__________________________________

                                    555 S.W. Oak Street, Suite 400
                                    Portland, Oregon 97204
                                    Telephone: (503) 275-6381
                                    Facsimile: (503) 275-4267

                                     -98-
<PAGE>
 
                                    FIRST BANK NATIONAL ASSOCIATION



                                    By:__________________________________

                                    Its:__________________________________

                                    601 Second Avenue South, MPFP0601
                                    Minneapolis, MN  55402-4302
                                    Telephone: (612) 973-0690
                                    Facsimile: (612) 973-0821

                                     -99-
<PAGE>
 
                                 SCHEDULE 1.79

                                    MARGINS
                                    -------

<TABLE>
<CAPTION> 
==============================================================================================================
                      Less than   Greater than or    Greater than or     Greater than or     Greater than or
Leverage Ratio         1.5:1.0    Equal to 1.5:1.0   Equal to 2.0:1.0    Equal to 2.60:1.0   Equal to 3.0:1.0
                                          But               But                  But
                                  Less than 2.0:1.0  Less than 2.60:1.0  Less than 3.0:1.0
==============================================================================================================
<S>                   <C>         <C>                <C>                 <C>                 <C> 
Margin for                10.00         15.00               17.50               20.00               25.00
Revolving Credit
Facility Fees
--------------------------------------------------------------------------------------------------------------
Margin for                28.50         40.00               50.00               62.50               75.00
Revolving Credit
Eurocurrency-
based Advances
-------------------------------------------------------------------------------------------------------------- 
Margin for                28.50         40.00               50.00               62.50               75.00
Letters of Credit
-------------------------------------------------------------------------------------------------------------- 
Margin for Line            9.00         11.00               12.50               15.00               20.00
of Credit Facility
Fees
--------------------------------------------------------------------------------------------------------------
Margin for Line           29.50         44.00               55.00               67.50               80.00
of Credit
Eurocurrency-
based Advances
==============================================================================================================
</TABLE>

                                     -100-
<PAGE>
 
                                 SCHEDULE 1.91
                                 -------------

                                  PERCENTAGES

<TABLE>
<CAPTION>
                                                     PERCENTAGE
 
                                        Revolving   Line of Credit   Term
                                          Credit       Credit        Loan
                                          ------       ------        ---- 
<S>                                     <C>         <C>              <C> 
COMERICA BANK                              15.125%     15.125%       34%
                                                             
FIRST UNION NATIONAL BANK OF                                 
 NORTH CAROLINA                            11.625%     11.625%       22%
                                                             
HARRIS TRUST AND SAVINGS BANK              11.625%     11.625%       22%
                                                             
CREDITANSTALT-BANKVEREIN                   11.625%     11.625%       22%
                                                             
NATIONAL CITY BANK                             10%         10%        0%
                                                             
BANK ONE, DAYTON, N.A.                         10%         10%        0%
                                                             
FIRSTAR BANK OF MILWAUKEE, N.A.               7.5%        7.5%        0%
                                                             
LASALLE NATIONAL BANK                         7.5%        7.5%        0%
                                                             
UNITED STATES BANK OF OREGON                  7.5%        7.5%        0%
                                                             
FIRST BANK NATIONAL ASSOCIATION               7.5%        7.5%        0%
                                                             
  TOTAL                                       100%        100%      100%
</TABLE>

                                     -101-
<PAGE>
 
                                 SCHEDULE 1.94

                         PERMITTED BOND FINANCING TERMS
                         ------------------------------

                                     -102-
<PAGE>
 
                                 SCHEDULE 1.96

                          PERMITTED BORROWER MAXIMUMS
                          ---------------------------

                 ABT                              $175,000,000   
                                                             
                 KenTech                          $ 20,000,000
                                                             
                 ABT Canada                       $ 60,000,000
 
                                     -103-
<PAGE>
 
                                 SCHEDULE 11.4

                                  LITIGATION
                                  ----------

                                     -104-
<PAGE>
 
                                SCHEDULE 11.16

                             COMPLIANCE WITH LAWS
                             --------------------

                                     -105-
<PAGE>
 
                                SCHEDULE 11.18

                       COLLECTIVE BARGAINING AGREEMENTS
                       --------------------------------

                                     -106-
<PAGE>
 
                                SCHEDULE 11.19

                             EXISTING INDEBTEDNESS
                             ---------------------

                                     -107-
<PAGE>
 
                                SCHEDULE 11.20

                           ENVIRONMENTAL DISCLOSURE
                           ------------------------

                                     -108-