AMENDED AND RESTATED
                                 LOAN AGREEMENT



                                    - Among -



                          COLUMBUS MCKINNON CORPORATION
                         EMPLOYEE STOCK OWNERSHIP TRUST

                          COLUMBUS MCKINNON CORPORATION



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                               MARINE MIDLAND BANK

















                                     DATED:  August 5, 1996






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                                TABLE OF CONTENTS


                                                                        PAGE
                                                                        ----


         ARTICLE I  Definitions..........................................  1
         ---------

              1.1      Definitions.......................................  1
              1.2      Accounting Terms..................................  3


         ARTICLE II  The Credit........................................... 3
         ----------

              2.1      The Credit. . . . . . . . . . . . . . . . . . . .   3
              2.2      The Note. . . . . . . . . . . . . . . . . . . . .   3
              2.3      Interest. . . . . . . . . . . . . . . . . . . . .   4
              2.4      Prepayment. . . . . . . . . . . . . . . . . . . .   5
              2.5      Use of Proceeds . . . . . . . . . . . . . . . . .   6
              2.6      Special Provisions Governing LIBOR Loans. . . . .   6
              2.7      Taxes.............................................. 6

         ARTICLE III  Representations and Warranties...................... 7
         -----------

              3.1      Authority.......................................... 7
              3.2      Valid and Binding Obligation....................... 7
              3.3      No Pending Litigation.............................. 7
              3.4      No Consent or Filing............................... 7
              3.5      Compliance With Laws and Regulations............... 7
              3.6      Guarantor's Obligations. . . . . . . . . . . ...... 8
              3.7      Federal Regulations................................ 8
              3.8      Credit Agreement . . . . . . . . . . . . . . . . .. 8

         ARTICLE IV  Affirmative Covenants................................ 8
         ----------

              4.1      Payments........................................... 8
              4.2      Future Financial Statements........................ 8
              4.3      Books and Records.................................. 8
              4.4      Compliance with Law................................ 9
              4.5      Use of Proceeds.................................... 9
              4.6      Taxes.............................................. 9
              4.7      ESOP............................................... 9
              4.8      Reports and Notices................................ 9
              4.9      Information........................................ 9
              4.10     Amendments......................................... 9
              4.11     Notice............................................ 10
              4.12     Other Acts........................................ 10
              4.13     Credit Agreement Affirmative Covenants . . . . . . 10

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         ARTICLE V  Negative Covenants................................... 10
         ---------

              5.1      Borrowed Money.................................... 10
              5.2      Encumbrances...................................... 10
              5.3      Maintain Existence................................ 11
              5.4      Credit Agreement Negative Covenants. . . . . . . . 11

         ARTICLE VI  Default............................................. 11
         ----------

              6.1      Events of Default................................. 11
              6.2      Effects of an Event of Default.................... 12

         ARTICLE VII  Expenses........................................... 13
         -----------

         ARTICLE VIII  Miscellaneous..................................... 13
         ------------

              8.1      Amendments and Waivers............................ 13
              8.2      Delays and Omissions.............................. 13
              8.3      Successors and Assigns............................ 13
              8.4      Notices........................................... 14
              8.5      Governing Law..................................... 14
              8.6      Counterparts...................................... 14
              8.7      Titles............................................ 15
              8.8      Inconsistent Provisions........................... 15
              8.9      Course of Dealing................................. 15
              8.10     Collateral Release................................ 15
              8.11     The Trustee....................................... 15
              8.12     Non-Recourse...................................... 16
              8.13     JURY TRIAL WAIVER................................. 16
              8.14     CONSENT TO JURISDICTION........................... 16



                                     - ii -

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                  AMENDED AND RESTATED LOAN AGREEMENT  dated August 5, 1996 made
by and between COLUMBUS MCKINNON  CORPORATION  EMPLOYEE STOCK OWNERSHIP TRUST, a
trust  which was created  under the laws of the State of New York  ("Borrower"),
COLUMBUS  MCKINNON  CORPORATION,  a corporation  organized under the laws of the
State of New York  ("Guarantor") and MARINE MIDLAND BANK, a banking  corporation
organized under the laws of the State of New York ("Bank").

                                   WITNESSETH

                           WHEREAS, Bank, Guarantor and Borrower are parties
to a Loan Agreement dated October 27, 1994 ("Original Agreement"); and

                           WHEREAS, Fleet Bank, Bank, Fleet Bank as  Administra-
tive Agent and Guarantor have entered into a Credit Agreement dated of even date
herewith ("Credit Agreement"); and

                           WHEREAS, Bank, Guarantor and Borrower  wish to  amend
and restate the  Original  Agreement  in its  entirety  to  incorporate  certain
covenants and pricing  provisions of the Credit  Agreement;  it being understood
that the no additional money is being advanced in connection with this Agreement
and that the Note (as defined  hereinafter) is not being replaced and remains an
obligation of the Borrower.

                           NOW THEREFORE the parties agree as follows:

                             ARTICLE I. DEFINITIONS

                  1.1 DEFINITIONS.  As used in this Agreement,  unless otherwise
specified, the following terms shall have the following respective meanings:

                  "Business Day" -  shall  have the  meaning  set forth  in  the
Credit Agreement.

                  "Credit" - collectively, "Credit" as defined in Section 2.1 of
this Agreement.

                  "Credit Agreement" - the Credit Agreement between  Fleet Bank,
Bank, Fleet Bank as Administrative  Agent and Guarantor dated August 5, 1996, as
amended from time to time.

                  "Domestic  Subsidiary" - any  Subsidiary  organized  under the
laws of the United States or any state or territory thereof.

                  "ESOP" - the  Columbus  McKinnon  Corporation  Employee  Stock
Ownership  Plan dated April 1, 1987,  as amended and  restated as of November 1,
1988, as amended and restated as of October 27, 1994.



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                  "Eurodollar Loan" - "LIBOR Loan" as defined hereinafter.

                  "Guaranty" - Guaranty by  Guarantor to Bank dated  October 27,
1994  guaranteeing  the  payment of any and all  indebtedness  and  liabilities,
whether now existing or hereafter  incurred of the Borrower to the Bank,  as the
same may be amended or supplemented from time to time.

                  "Interest Period" - with respect to any LIBOR Loan, the period
commencing on the date such loan is made and ending, as the Borrower may select,
pursuant to Section 2.3(a) and (b) hereof, or the numerically  corresponding day
in the first, second, third or sixth calendar month thereafter, except that each
such Interest Period that commences on the last Business Day of a calendar month
(or on any  day for  which  there  is no  numerically  corresponding  day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate  subsequent  calendar  month;  provided  that  all of the  foregoing
provisions relating to Interest Periods are subject to the following:

                           (a)      no Interest  Period may extend beyond matur-
                                    ity; and

                           (b)      if an  Interest  Period  would  end on a day
                                    that is not a Business  Day,  such  Interest
                                    Period   shall  be   extended  to  the  next
                                    Business Day, unless such Business Day would
                                    fall in the  next  calendar  month  in which
                                    event such Interest  Period shall end on the
                                    immediately preceding Business Day.

                  "Leverage Ratio" - shall  have  the meaning set  forth in  the
Credit Agreement.

                  "LIBOR  Interest  Rate" - shall have the  meaning set forth in
the Credit Agreement.

                  "LIBOR  Loan" - a portion of the Credit for which the interest
rate is calculated based on the LIBOR Interest Rate.

                  "London  Interbank  Offered Rate" - shall have the meaning set
forth in the Credit Agreement.

                  "Note" - as used in all  Articles  of this  Agreement,  except
Article II,  collectively,  all notes evidencing any indebtedness  created under
this Agreement.

                  "Plan Year" - Plan Year, as defined  in Section  8.10 of  this
Agreement.


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                                      - 3 -



                  "Pledge  Agreement" - Pledge  Agreement dated October 27, 1994
executed and delivered by Borrower to Bank,  pursuant to which Borrower  pledged
to the Bank all shares of stock of the Guarantor owned or controlled directly or
indirectly  by the  Borrower  and  acquired  with the  proceeds of the Credit by
delivering  the  certificates  of  stock  and  endorsing  such  certificates  or
appropriate stock powers to the Bank, as the same may be amended or supplemented
from time to time.

                  "Prime Rate" - the rate of interest publicly  announced by the
Bank  from time to time as its  prime  rate and is a base  rate for  calculating
interest on certain  loans.  The Prime Rate may or may not be the most favorable
rate charged by the Bank to its customers.

                  "Prime  Rate  Loan" - a portion  of the  Credit  for which the
interest rate is calculated based on the Prime Rate.

                  "Subsidiary" - shall have the  meaning set forth in the Credit
Agreement.

                  "Tangible Net Worth" - shall have the meaning set forth in the
Credit Agreement.

                  "Trust   Agreement"  -  the  Columbus   McKinnon   Corporation
Leveraged Employee Stock Ownership Trust Agreement effective as of April 1, 1987
(formerly known as the Columbus McKinnon Corporation Personal Retirement Account
Trust Agreement), by and between the Guarantor and the persons named as trustees
therein, as amended from time to time

                  "Trustees" - each or  all of  Kenneth G.  McCreadie,  Peter A.
Grant  and Robert L.  Montgomery, Jr. in  their  capacity  as trustees  for  the
Borrower.

                  1.2  ACCOUNTING  TERMS.  All  accounting  terms not  otherwise
defined  herein have the meaning  assigned to them in accordance  with generally
accepted accounting principles.

                             ARTICLE II. THE CREDIT

                  2.1 THE CREDIT.  The Bank agreed to lend to the  Borrower  and
the  Borrower  agreed to  borrow  from the Bank the sum of TWO  MILLION  DOLLARS
($2,000,000.00) ("Credit").

                  2.2 THE NOTE.   The Credit is evidenced by a term note made by
Borrower to Bank dated October 27, 1994 ("Note"), payable in accordance with the
terms and conditions  set forth  therein.  The Note is also subject to mandatory
prepayment as set forth in Section 2.4(c) of this Agreement.



<PAGE>


                                      - 4 -


                  2.3      INTEREST.

                   (a) NOTICE. The Credit shall bear interest on the date hereof
at the Prime Rate unless the  Borrower  has given the Bank notice at least three
(3) Business  Days prior to the date it desires all or any portion of the Credit
to be a LIBOR Loan.  Subject to Section  2.3(b)  hereof,  Borrower  may elect to
convert  any  portion of the Credit that is a Prime Rate Loan to a LIBOR Loan or
to  continue  any LIBOR Loan as a new LIBOR Loan by giving  notice.  All notices
given under this  Section  2.3(a)  shall be  irrevocable  and shall be given not
later than 11:00 a.m.  on the day which is not less than the number of  Business
Days specified above for such notice.

                    (b)  CONVERSION AND  RENEWALS. The  Borrower  may elect from
time to time to convert  all or part of a Prime Rate Loan into a LIBOR Loan or a
LIBOR  Loan into a Prime  Rate  Loan or to renew all or part of a LIBOR  Loan by
giving Bank notice at least one (1) Business Day before  conversion into a Prime
Rate Loan and at least three (3) Business Days before conversion into or renewal
of a LIBOR Loan  specifying:  (a) the renewal or conversion date; (b) the amount
of the Prime Rate Loan or LIBOR Loan to be converted or renewed; (c) in the case
of conversion, whether the conversion is into a Prime Rate Loan or a LIBOR Loan;
and (d) in the case of a renewal of, or a  conversion  into,  a LIBOR Loan,  the
duration  of the  Interest  Period  applicable  thereto;  provided  that (i) the
minimum  principal amount of each Prime Rate Loan outstanding after a renewal or
conversion  shall be $250,000.00 and the minimum  principal amount of each LIBOR
Loan after a renewal or conversion shall be $250,000;  and (ii) a LIBOR Loan can
be converted  only on the last day of the  Interest  Period for such LIBOR Loan.
All notices given under this Section  2.3(b) shall be  irrevocable  and shall be
given not later than 11:00 a.m.  on the day which is not less than the number of
Business Days  specified  above for such notice.  If the Borrower  shall fail to
give Bank the notices  specified  above for the renewal or conversion of a LIBOR
Loan prior to the end of the Interest  Period with respect  thereto,  such LIBOR
Loan shall by automatically  converted into a Prime Rate Loan on the last day of
the Interest Period for such LIBOR Loan.

                    (c) PAYMENTS OF INTEREST. The Credit shall bear  interest at
the rates of interest set forth in Section 2.06 of the Credit Agreement.

                     Interest on the Credit shall be paid in immediately  avail-
able  funds to  the Bank  at One Marine  Midland Center,  Buffalo,  New York  as
follows:


                    (i)  Except to the extent  that the Credit is a LIBOR  Loan,


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                                                     - 5 -


                         on the  first day  of each month  commencing  after the
                         date of this Agreement and  at maturity of the  Credit;
                         and

                    (ii) For each LIBOR  Loan,  on the last day of the  Interest
                         Period  with  respect  thereto  and in the  case of any
                         Interest  Period  greater than three  months,  at three
                         month  intervals  after the first day of such  Interest
                         Period.



                    (d) DEFAULT RATE. Any principal amount not paid when due (at
maturity,  by acceleration or otherwise)  shall bear interest  thereafter  until
paid in  full,  payable  on  demand,  at a rate per  annum  equal to the rate of
interest  otherwise  payable on such amount plus four percent (4%) until paid in
full.

                  2.4      PREPAYMENT.

                  (a) OPTIONAL  PREPAYMENT - PRIME RATE LOANS.  The Borrower may
prepay,  without premium,  all or part of the  indebtedness  consisting of Prime
Rate Loans,  together  with  interest on the principal so prepaid to the date of
prepayment. Subject to Subsection 2.4 (c) below, any partial prepayment shall be
applied to payments of the Note in inverse order of maturity.

                  (b) OPTIONAL PREPAYMENT - LIBOR LOANS. The Borrower shall have
the right to prepay  without  premium  all or any  portion  of the  indebtedness
consisting  of LIBOR  Loans on the  expiration  day of the  applicable  Interest
Period. If any LIBOR Loan is prepaid at any other time the Borrower shall pay to
the Bank such amount or amounts as the Bank deems necessary to compensate it for
any loss or  expense  sustained  or  incurred  by the Bank with  respect to such
repayment  or  prepayment.  Subject to  subsection  2.4(c)  below,  any  partial
prepayment  shall  be  applied  to  payments  of the  Note in  inverse  order of
maturity.

                  (c)  MANDATORY  PREPAYMENT.  In addition  to the  installments
otherwise specified in the Note, the Borrower shall prepay $100,000 of principal
of the Note in five (5) annual  installments.  The  Borrower has prepaid one (1)
installment  on April 1, 1995 in the amount of $8333.00 and one (1)  installment
in the amount of $22,619.75 on or before April 1, 1996,  and the Borrower  shall
prepay three (3) installments in the amounts of $22,916.75  each,  payable on or
before  the  first  day of each  April of each  year  beginning  April  1,  1997
("Mandatory   Prepayment")  which  Mandatory  Prepayment  shall  be  applied  to
installments  of  principal  of the  Note in  inverse  order  of  maturity.  Any
prepayment  in any Plan Year  exceeding  the  amount of the  required  Mandatory
Prepayment  shall be applied to the Mandatory  Prepayment due in the immediately
succeeding year or years, until the


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                                      - 6 -


Borrower  has  prepaid  the full  $100,000  which must be paid  pursuant to this
Section 2.4(c).

                  2.5 USE OF PROCEEDS.   The Borrower covenants to the Bank that
the proceeds  advanced under this Agreement have and will be used exclusively to
acquire employer securities within the meaning of Section 409(1) of the Internal
Revenue Code and Borrower directed the Bank to advance such proceeds directly to
the Guarantor for such purpose.  The Guarantor covenants to the Bank that it has
used such proceeds,  and the proceeds of the funds it received from the Borrower
which the Borrower  received from its $4,000,000 loan from Fleet Bank, to reduce
the  Guarantor's  working  capital  lines,  to  pay  for  certain  environmental
remediation  work (estimated to cost  approximately  $2,766,000) and to fund the
stock redemption to the Estates of Neville Proctor and Walter Ersing.

                  2.6      SPECIAL PROVISIONS GOVERNING LIBOR LOANS

                           The provisions  set forth  in the  following sections
of the Credit  Agreement:  Section 2.10  (Illegality),  Section 2.11 (Disaster),
Section 2.12 (Increased  Cost), and Section 2.13 (Funding Loss  Indemnification)
are  incorporated  herein by reference as if fully set forth.  The provisions as
incorporated herein shall survive the termination of the Credit Agreement.

                  2.7 TAXES.  If any taxes (other than taxes with respect to the
income of the  Bank),  or duties of any kind  shall be  payable,  or ruled to be
payable,  by or to any  taxing  authority  of or in the  United  States,  or any
foreign country, or any political  subdivision of any thereof, in respect of any
of the transactions  contemplated by this Agreement (including,  but not limited
to, execution,  delivery,  performance,  enforcement, or payment of principal or
interest of or under the Note or this Agreement, or the making of a LIBOR Loan),
by reason of any now existing or hereafter enacted statute,  rule, regulation or
other  determination  (excluding  any taxes  imposed on or  measured  by the net
income of the Bank), the Company will:

                  (1)      pay on  written  request  therefor all  such taxes or
duties, including interest and penalty, if any,

                  (2)      promptly furnish the Bank with  evidence of any  such
payment, and

                  (3)  indemnify  and hold the Bank and any holder or holders of
the Note  harmless and  indemnified  against any liability or  liabilities  with
respect  to or in  connection  with any such  taxes or the  payment  thereof  or
resulting from any delay or omission to pay such taxes.



<PAGE>


                                      - 7 -



                   ARTICLE III. REPRESENTATIONS AND WARRANTIES

                  The  Borrower   makes  the   following   representations   and
warranties,   which  shall  be  deemed  to  be  continuing  representations  and
warranties so long as any  indebtedness  of the Borrower to the Bank,  including
indebtedness for fees and expenses, remains unpaid:

                  3.1 AUTHORITY.   The Borrower is a trust established under the
laws of New York and has all  necessary  power and  authority to enter into this
Agreement  and to execute,  deliver and perform this  Agreement,  the Note,  the
Pledge  Agreement  and any  other  document  executed  in  connection  with this
Agreement, all of which have been duly authorized by the Trust Agreement.

                  3.2 VALID AND BINDING OBLIGATION.   This Agreement, the Pledge
Agreement and any other document executed in connection  herewith,  and the Note
constitute the legal, valid and binding obligations of the Borrower, enforceable
in accordance with their respective terms.

                  3.3 NO PENDING LITIGATION.   There are not any actions, suits,
proceedings   (whether  or  not  purportedly  on  behalf  of  the  Borrower)  or
investigations pending or, to the knowledge of the Borrower,  threatened against
the Borrower or any basis therefor,  which, if adversely  determined,  would, in
any  case  or in  the  aggregate,  materially  adversely  affect  the  financial
condition of the Borrower or which question the validity of this Agreement,  the
Note, the Guaranty,  the Pledge  Agreement or other  documents  required by this
Agreement, or any action taken or to be taken pursuant to any of the foregoing.

                  3.4   NO CONSENT  OR  FILING.    Other than  the  filings  and
approvals  contemplated  by  Section  3.5,  no  consent,  license,  approval  or
authorization  of, or  registration,  declaration  or filing  with,  any  court,
governmental  body or  authority  or other  person  or  entity  is  required  in
connection with the valid execution,  delivery or performance of this Agreement,
the Note, the Pledge Agreement or other documents  required by this Agreement or
in connection with any of the transactions contemplated thereby.

                  3.5   COMPLIANCE WITH  LAWS AND  REGULATIONS.   All  necessary
action has been taken to adopt the ESOP and appoint the Trustees,  and the Board
of Directors of the Guarantor has directed the officers of the Guarantor to have
the ESOP approved by the United  States  Department of the Treasury as qualified
under Section 401(a) and 4975(e)(7) of the Internal Revenue Code as amended.



<PAGE>


                                      - 8 -


                  3.6  GUARANTOR'S  OBLIGATIONS.   The Guarantor has  full power
and authority to guarantee, to execute and deliver this Agreement,  the Guaranty
and to take all other action called for by the  Guaranty.  The Guaranty and this
Agreement  constitute the legal, valid and binding  obligations of the Guarantor
enforceable  in  accordance  with  the  terms  contained  therein,   subject  to
applicable  bankruptcy,  insolvency and similar laws affecting creditors' rights
generally and to general principles of equity.

                  3.7   FEDERAL   REGULATIONS.   The  Borrower  is  not  engaged
principally, or as one of its important activities, in the business of extending
or  arranging  for the  extension  of credit for the  purpose of  purchasing  or
carrying "margin  security" or "margin stock" (as defined in Regulations G and U
issued by the Board of Governors of the Federal Reserve System).  Likewise,  the
Borrower does not own or intend to carry or purchase any such "margin  security"
or "margin stock," and the Borrower will not use the proceeds  advanced pursuant
to this  Agreement to purchase or carry (or refinance any borrowing the proceeds
of which were used to purchase or carry) any such  "margin  security" or "margin
stock."

                  3.8 CREDIT AGREEMENT.    The  representations  and  warranties
made by the Guarantor,  set forth in Article VI of the Credit Agreement are true
and corrent, and are incorporated herein by reference as if fully set forth. The
representations   and  warranties  as  incorporated  herein  shall  survive  the
termination of the Credit Agreement.


                        ARTICLE IV. AFFIRMATIVE COVENANTS

                  During the term of this  Agreement,  and so long thereafter as
any indebtedness of the Borrower to the Bank shall remain unpaid,  including any
indebtedness for fees and expenses, the Borrower will:

                  4.1  PAYMENTS.   Duly and  punctually pay the principal of and
interest on all  indebtedness  incurred by it pursuant to this  Agreement in the
manner set forth in this Agreement.

                  4.2      FUTURE FINANCIAL STATEMENTS. Furnish  to the Bank the
financial statements and other certificates and information described in Section
7.02 of the Credit Agreement.

                  4.3 BOOKS AND  RECORDS.  Keep  proper  books  and  records  in
accordance with generally accepted accounting  principles  consistently  applied
and notify the Bank  promptly in writing of any proposed  change in the location
at which such books and records are maintained.



<PAGE>


                                      - 9 -


                  4.4 COMPLIANCE WITH LAW.  Comply in all material respects with
all applicable laws and governmental rules and regulations.

                  4.5 USE OF  PROCEEDS.  Use the proceeds of the loan solely and
exclusively for the purpose of acquiring employer  securities within the meaning
of Internal Revenue Code Section 409(1).

                  4.6 TAXES.   Pay all taxes, assessments  and other  charges of
every  nature which may be imposed,  levied or assessed  against the Borrower or
the ESOP (and provide to the Bank  receipted  bills therefor if requested by the
Bank),  prior to the date of  attachment  of any penalties or liens with respect
thereto (other than liens attaching prior to payment  becoming due if payment is
made when due); provided, however, this Agreement shall not be deemed to require
such payment so long as the validity of such tax,  assessment or other charge is
being contested in good faith by appropriate  proceedings  diligently  conducted
and so long as the enforcement of any such lien is appropriately stayed.

                  4.7 ESOP. Promptly file, or cause the Guarantor  to file, with
the  appropriate  District  Director or other  official of the Internal  Revenue
Service  for a  determination  letter  that the ESOP is a  qualified  plan under
Internal  Revenue Code Section  401(a) and take all  necessary  and  appropriate
action  to  maintain  the ESOP in full  force  and  effect  and to keep it fully
qualified under the Internal Revenue Code and regulations thereunder,  from time
to time in effect.

                  4.8 REPORTS  AND  NOTICES.  Furnish promptly to the  Bank such
information  as the Bank may reasonably  require  concerning the Borrower or the
ESOP and assets held by the ESOP or the Borrower and such other  information  as
the Bank may reasonably  require;  to notify the Bank promptly of any litigation
instituted or threatened against Borrower or the ESOP, any deficiencies asserted
or liens filed by the Internal Revenue Service against the Borrower, the ESOP or
the  Trustee,  any audits of any  Federal or State tax return of Borrower or the
ESOP,  and the  results of any such  audit;  and any other  matters  which could
reasonably be expected to adversely affect the Borrower's ability to perform its
obligations under this Agreement.

                  4.9 INFORMATION.  Provide, or cause the  Trustees to  provide,
to the Bank copies of all  information  incident to the Borrower's  ownership of
shares of the Guarantor.

                  4.10 AMENDMENTS.  Refrain, and cause the Guarantor to refrain,
from amending or modifying, or agreeing to the amendment or modification of, the
ESOP, or other  matters relating to the  ESOP or its operation if the  effect of


<PAGE>


                                     - 10 -


any such amendment or modification,  or of all such amendments and modifications
in the  aggregate,  would be to cause the ESOP to lose its  qualification  under
Internal Revenue Code Section 401(a) or the Trust's  qualification under Section
501(a),  or would jeopardize the tax effects of the ESOP or the deductibility of
contributions  by the Guarantor to the ESOP, or would result in any violation of
the Employee Retirement Income Security Act of 1974, as amended.

                  4.11   NOTICE.  Notify the Bank  promptly  in  writing  of the
Guarantor's failure to make any contribution to the ESOP or to the Borrower that
is required by the ESOP.

                  4.12  OTHER ACTS. Execute and deliver, or cause to be executed
and delivered,  to the Bank all further documents and perform all other acts and
things which the Bank deems  necessary or  appropriate to protect or perfect any
security  interests in any property  directly or indirectly  securing payment of
any indebtedness of the Borrower to the Bank.

                  4.13  CREDIT AGREEMENT AFFIRMATIVE COVENANTS.  Guarantor shall
comply  with all  affirmative  covenants  set forth in Article VII of the Credit
Agreement which covenants as amended from time to time are  incorporated  herein
by  reference as if fully set forth.  The  foregoing  covenants as  incorporated
herein shall survive the termination of the Credit Agreement.


                          ARTICLE V. NEGATIVE COVENANTS

                  During the term of this  Agreement  and so long  thereafter as
any of the indebtedness of the Borrower to the Bank,  including any indebtedness
for fees and expenses,  shall remain  unpaid,  the  Borrower,  without the prior
written consent of the Bank, will not:

                  5.1 BORROWED MONEY.  Create,  incur, assume or suffer to exist
any liability for borrowed money except to the Bank, except for an existing loan
from Fleet Bank in the original amount of $4,000,000.00 which loan was used only
to purchase shares of stock of the Guarantor.

                  5.2 ENCUMBRANCES. Create, incur, assume or suffer to exist any
mortgage,  lien,  security  interest,  pledge or other encumbrance on any of its
property or assets, whether now owned or hereafter owned or acquired, other than
encumbrances  in favor of the Bank and other than a pledge of shares in favor of
Fleet Bank of New York to secure  payment of the loans  described in Section 5.1
above.



<PAGE>


                                     - 11 -


                  5.3 MAINTAIN  EXISTENCE.  Take any action that would cause the
Borrower  to not  maintain  itself as it is  presently  constituted  or take any
action that would cause the ESOP and the Borrower not to be a qualified employee
stock  ownership  plan  and  trust  under  the  Internal  Revenue  Code  or  the
regulations promulgated thereunder.

                  5.4 CREDIT AGREEMENT NEGATIVE  COVENANTS.  Guarantor shall not
breach the negative  covenants set forth in Article VIII of the Credit Agreement
which  covenants  as  amended  from  time to time  are  incorporated  herein  by
reference as if fully set forth. The foregoing  covenants as incorporated herein
shall survive the termination of the Credit Agreement.

                               ARTICLE VI. DEFAULT

                  6.1 EVENTS OF DEFAULT.   The  occurrence of any one or more of
the following events shall constitute an event of default  (individually,  Event
of Default, or, collectively, Events of Default):

                  (a) NONPAYMENT. Nonpayment when due whether by acceleration or
otherwise  of  principal  of or  interest  on the Note or of any fee or  premium
provided for hereunder.

                  (b)      NEGATIVE COVENANTS.  Default in the observance of any
of the covenants or  agreements  of the Borrower  contained in Article V of this
Agreement.

                  (c) OTHER  COVENANTS.  Default in the observance of any of the
covenants or agreements of the Borrower contained in this Agreement,  other than
in Section 4.1 or Article V, or in any other  agreement with the Bank,  which is
not remedied  within  thirty (30) days after  notice  thereof by the Bank to the
Borrower.

                  (d)   REPRESENTATIONS.    If   any   certificate,   statement,
representation, warranty or financial statement furnished by or on behalf of the
Borrower  pursuant to or in connection with this Agreement  (including,  without
limitation, representations and warranties contained herein) or as an inducement
to the Bank to enter into this Agreement or any other lending agreement with the
Borrower  shall prove to have been false in any material  respect at the time as
of which the facts  therein  set forth were  certified,  or to have  omitted any
substantial  contingent or unliquidated liability or claim against the Borrower,
or if on the date of the execution of this  Agreement  there shall have been any
materially adverse change in any of the facts disclosed by any such statement or
certificate,  which change shall not have been  disclosed by the Borrower to the
Bank at or prior to the time of such execution.


<PAGE>


                                     - 12 -



                  (e)  OTHER  INDEBTEDNESS  AND  AGREEMENTS.  Nonpayment  by the
Borrower of any indebtedness  (other than as evidenced by the Note) owing by the
Borrower  when due (or, if  permitted by the terms of the  applicable  document,
within any applicable grace period),  whether such indebtedness shall become due
by scheduled maturity,  by required  prepayment,  by acceleration,  by demand or
otherwise,  or failure to perform any term, covenant or agreement on its part to
be performed  under any  agreement  or  instrument  (other than this  Agreement)
evidencing  or securing or relating to any  indebtedness  owing by the  Borrower
when required to be performed if the effect of such failure causes the holder to
accelerate the maturity of such indebtedness.

                  (f)  JUDGMENTS.  If any  judgment  or  judgments  in an amount
exceeding  $1,000,000  in the  singular  or in the  aggregate  (other  than  any
judgment for which it is fully  insured)  against the Borrower  remains  unpaid,
unstayed on appeal,  undischarged,  unbonded or  undismissed  for a period of 45
days.

                  (g)  TERMINATION  OF  ESOP.  The  termination  for  any  cause
whatsoever of the ESOP without the prior written consent of the Bank.

                  (h)  GUARANTOR'S  DEFAULT.  The  occurrence  of any  Event  of
Default  applicable to Guarantor  contained in this Article VI, or the breach by
Guarantor of any term, condition or covenant contained in the Guaranty.

                  (i)  CREDIT AGREEMENT.  The occurrence of any Event of Default
set forth in the Credit  Agreement,  whether or not the Credit Agreement remains
in effect.

                  6.2      EFFECTS OF AN EVENT OF DEFAULT.

                  (a)  Upon  the  happening  of one or more  Events  of  Default
(except a default under either  Section 6.1(d) or 6.1(e)  hereof),  the Bank may
declare any  obligations  it may have hereunder to be canceled and the principal
of the Note then  outstanding to be immediately  due and payable,  together with
all interest thereon and fees and expenses  accruing under this Agreement.  Upon
such  declaration,  any  obligations  the  Bank  may  have  hereunder  shall  be
immediately  canceled and the Note then outstanding shall become immediately due
and payable  without  presentation,  demand or further notice of any kind to the
Borrower.

                  (b) Upon the  happening of one or more Events of Default under
Section  6.1(d) or 6.1(e)  hereof,  the Bank's  obligations  hereunder  shall be
canceled  immediately,  automatically  and  without  notice,  and the Note  then
outstanding


<PAGE>


                                     - 13 -


shall become immediately due and payable without presentation,  demand or notice
of any kind to the Borrower.


                              ARTICLE VII. EXPENSES

                  The Guarantor shall reimburse the Bank promptly for all of its
expenses including, without limitation, reasonable counsel fees, filing fees and
recording  fees  incurred  in  connection  with  this  Agreement  and  with  any
indebtedness subject hereto, for any taxes which the Bank may be required to pay
in connection with the execution and delivery of this Agreement and the Note and
for any expenses,  including  actual counsel fees and expenses,  incident to the
lawful enforcement of any provision of this Agreement, the Note, the Guaranty or
the Pledge Agreement.


                           ARTICLE VIII. MISCELLANEOUS

                  8.1  AMENDMENTS  AND WAIVERS.  This  Agreement  represents the
entire  understanding  and agreement  between the parties hereto with respect to
the subject matter hereof; supersedes all prior negotiations between the parties
with  respect to the subject  matter  hereof (and  specifically  supercedes  the
Original Agreement); no modification,  rescission,  waiver, release or amendment
of any provision of this Agreement  shall be made except by a written  agreement
subscribed  by the  Trustee  and duly  authorized  officers  of the Bank and the
Guarantor.

                  8.2 DELAYS AND OMISSIONS. No course of dealing and no delay or
omission by the Bank in exercising any right or remedy hereunder or with respect
to any  indebtedness  of the  Borrower  to the Bank  shall  operate  as a waiver
thereof  or of any other  right or  remedy,  and no single or  partial  exercise
thereof shall preclude any other or further  exercise thereof or the exercise of
any other  right or  remedy.  The Bank may remedy  any  default by the  Borrower
hereunder  or with  respect  to any other  person,  firm or  corporation  in any
reasonable  manner without waiving the default  remedied and without waiving any
other prior or subsequent  default by the Borrower and shall be  reimbursed  for
its expenses in so remedying  such default.  All rights and remedies of the Bank
hereunder are cumulative.

                  8.3  SUCCESSORS AND ASSIGNS.  The Borrower,  the Guarantor and
the Bank as used herein shall include the legal representatives,  successors and
assigns of those parties.



<PAGE>


                                     - 14 -



                  8.4 NOTICES.  Any notice or demand to be given hereunder shall
be duly given if delivered, sent by facsimile transmission or mailed as follows:

                  To the Borrower       -        Columbus McKinnon Corporation
                                                 Employee Stock Ownership Trust
                                                 140 John James Audubon Parkway
                                                 Amherst, New York  14228-1197

                                                 Attn:  Robert L. Montgomery,
                                                        Trustee

                   To the Bank          -        Marine Midland Bank
                                                 One Marine Midland Center
                                                 Buffalo, New York  14203

                                                 Attn:  Regional Commercial
                                                        Banking Department


                  With a Copy to        -        Phillips, Lytle, Hitchcock,
                                                            Blaine & Huber
                                                 3400 Marine Midland Center
                                                 Buffalo, New York  14203

                                                 Attn:  Raymond H. Seitz, Esq.

                  To the Guarantor      -        Columbus McKinnon Corporation
                                                 140 John James Audubon Parkway
                                                 Amherst, New York  14228-1197

                                                 Attn:  Robert L. Montgomery
                                                        Executive Vice President

and shall be deemed  effective  if  delivered  upon  delivery and if mailed upon
deposit in an official  depository  maintained  by the United States Post Office
for the collection of mail.

                  8.5 GOVERNING LAW. This Agreement,  the transaction  described
herein and the  obligations of the Bank, the Borrower and the Guarantor shall be
construed  under,  and governed by, the internal  laws of the State of New York,
without regard to principles of conflicts of laws.

                  8.6 COUNTERPARTS. This Agreement may be executed in any number
of  counterparts  and by the Bank,  the Borrower  and the  Guarantor on separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same Agreement.



<PAGE>


                                     - 15 -


                  8.7  TITLES.  Titles to the  sections  of this  Agreement  are
solely for the  convenience  of the Bank, the Borrower and the Guarantor and are
not an aid in the interpretation of this Agreement or any part thereof.

                  8.8 INCONSISTENT  PROVISIONS.  The terms of this Agreement and
any related  agreements,  instruments  or other  documents  shall be  cumulative
except to the extent that they are specifically inconsistent with each other, in
which case the terms of this Agreement shall prevail.

                  8.9 COURSE OF DEALING.  Without  limitation of the  foregoing,
the Bank  shall have the right at all times to enforce  the  provisions  of this
Agreement  and all other  documents  executed in  connection  herewith in strict
accordance  with  their  terms,   notwithstanding   any  course  of  dealing  or
performance  by  the  Bank  in  refraining   from  so  doing  at  any  time  and
notwithstanding  any custom in the  banking  trade.  Any delay or failure by the
Bank at any time or times in  enforcing  its  rights  under such  provisions  in
strict  accordance  with their terms shall not be construed as having  created a
course of dealing or performance modifying or waiving the specific provisions of
this Agreement.

                  8.10  COLLATERAL  RELEASE.  The  Bank  shall  release  to  the
Borrower all Collateral  remaining in its possession upon payment in full of all
indebtedness  of the Borrower to the Bank.  Prior to such  payment in full,  the
Bank shall release Collateral to the Borrower annually,  the number of shares to
be released each Plan Year to be equal to the number of  encumbered  shares held
immediately before the release multiplied by a fraction,  the numerator of which
is the amount of principal  and  interest  paid on the Note during the Plan Year
and the  denominator of which is the sum of the numerator plus the principal and
interest to be paid on the Note for all future Plan Years. For this purpose, the
interest  to be paid in future  years is to be  computed  by using the  interest
rates in effect as of the last day of the Plan Year for which the calculation is
made.  Each annual release of Collateral  shall be calculated as of March 31 and
shall occur within ninety (90) days of the end of the Plan Year. In the event of
any  change in the  shares  which  occurs  between  March 31 and the date of the
release,  by reason of a dividend payable in shares,  recapitalization,  merger,
consolidation,  split-up,  combination  or  exchange  of  shares,  or the  like,
appropriate  adjustments  shall be made to the number of shares to be  released.
The "Plan Year" means the twelve-consecutive month period ending March 31.

                  8.11     THE TRUSTEE.  The Bank acknowledges  that the Trustee
is acting solely as Trustee of the Borrower and not in its  individual  capacity
in executing,  delivering, and performing under this Agreement, the Note and the
Collateral  Documents, and the Bank shall look  solely to the  Collateral of the


<PAGE>
                                     - 16 -

Borrower  and  not to the  individual  assets  of the  Trustee  for  payment  or
satisfaction of any and all obligations of the Borrower hereunder.

                  8.12 NON-RECOURSE. Notwithstanding any other provision of this
Agreement  or the Note,  no recourse  shall be had against the  Borrower for the
payment of the principal of or interest on the Note other than to the collateral
now or hereafter pledged pursuant to the Pledge Agreement.

                  8.13  JURY  TRIAL  WAIVER.  THE  BORROWER,  THE  BANK  AND THE
GUARANTOR  WAIVE ANY RIGHT TO TRIAL BY JURY WHICH THEY MAY HAVE IN ANY ACTION OR
PROCEEDING,  IN  LAW  OR  EQUITY,  IN  CONNECTION  WITH  THIS  AGREEMENT  OR THE
TRANSACTIONS RELATED THERETO.

                  8.14 CONSENT TO JURISDICTION.  THE BORROWER,  THE BANK AND THE
GUARANTOR  AGREE THAT ANY ACTION OR PROCEEDING TO ENFORCE OR ARISING OUT OF THIS
AGREEMENT MAY BE COMMENCED IN THE SUPREME  COURT OF NEW YORK IN ERIE COUNTY,  OR
IN THE DISTRICT COURT OF THE UNITED STATES FOR THE WESTERN DISTRICT OF NEW YORK.

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement to be signed by their duly authorized officers,  all as of the 5th day
of August, 1996.

                                          MARINE MIDLAND BANK

                                          By /s/ Cary J. Haller
                                             --------------------------
                                             Cary J. Haller
                                             Vice President


COLUMBUS MCKINNON                          COLUMBUS MCKINNON CORPORATION
 CORPORATION                                EMPLOYEE STOCK OWNERSHIP TRUST
By: /s/ Robert L. Montgomery              By /s/ Robert L. Montgomery
    ------------------------                 --------------------------
    Robert L. Montgomery                     Robert L. Montgomery, Trustee
    Executive Vice President
                                          By /s/ Peter A. Grant
                                             --------------------------
                                             Peter A. Grant, Trustee

                                          By /s/ Kenneth A. McCreadie
                                             --------------------------
                                             Kenneth A. McCreadie, Trustee