SECOND AMENDMENT AND WAIVER DATED AS OF JULY 31, 1999
                TO CREDIT AGREEMENT DATED AS OF FEBRUARY 1, 1999


                  This Second Amendment and Waiver (this "Amendment"),  dated as
of July 31, 1999, is made by and among ALLIED PRODUCTS  CORPORATION,  a Delaware
corporation  (the  "Company"),  the  financial  institutions  party  hereto (the
"Banks"),  and Bank of America, N.A. (formerly known as Bank of America National
Trust and Savings  Association),  as agent for the Banks (in such capacity,  the
"Agent").  Terms defined in the Credit  Agreement shall have the same respective
meanings  when used  herein  and the  provisions  of  Section  13 of the  Credit
Agreement shall apply, mutatis mutandis, to this Amendment.

                              W I T N E S S E T H:

                  WHEREAS, the parties hereto are parties to that certain Second
Amended and Restated Credit Agreement,  dated as of February 1, 1999 (as amended
or modified and in effect on the date hereof, the "Credit Agreement");

                  WHEREAS,  the  Company  has  requested  that the Banks and the
Agent agree to amend or modify the Credit Agreement as described herein; and

                  WHEREAS,  the Banks and the  Agent  are  willing  to amend and
modify the Credit Agreement on the terms and conditions contained herein.

                  NOW, THEREFORE,  in consideration of the premises,  the mutual
covenants  herein  contained  and other  good and  valuable  consideration  (the
receipt, adequacy and sufficiency of which is hereby acknowledged),  the parties
hereto, intending legally to be bound, hereby agree as follows:

                                  I. AMENDMENT
                                     ---------

                  1.       Amendments.  Subject to the  satisfaction of the
                           ----------
conditions  precedent set forth in Section 3.2 below, the Credit Agreement is
hereby amended as follows:

                  Section 1.1.3(a) of the Credit Agreement is amended to read in
         its entirety as follows:

                           SECTION 1.1.3 Commitment Limits.  Notwithstanding any
                                         -----------------
                  other provision of this Agreement (a) the aggregate  principal
                  amount of the Revolving Loans which all Banks are committed to
                  lend to the  Company  together  with the Stated  Amount of all
                  Letters of Credit then  outstanding  shall not at any one time
                  exceed  the  lesser  of (i) the  Borrowing  Base  or (ii)  the
                  following  amounts  (less  in each  case any  reductions  made
                  pursuant  to Section  6.1 or Section  6.3) as at or during the
                  following dates or periods:

                       DATE OR PERIOD                                 AMOUNT
                       --------------                                 ------

                       February 1, 1999 through March 31, 1999     $140,000,000
                       April 1, 1999 through November 29, 1999     $135,000,000
                       November 30, 1999                           Zero


                  Section 6.3(b) of the Credit Agreement is amended by adding at
         the end of such Section the following:

                           Without  limitation  of the  foregoing,  the  Company
                  agrees that concurrent with any sale by the Company  (directly
                  or indirectly) of any interest in any of the assets comprising
                  the Bush Hog and/or Great Bend Manufacturing  Divisions of the
                  Company (whether  pursuant to the Bush Bog Letter of Intent or
                  otherwise)  the  Company  shall  apply  the Net Sale  Proceeds
                  thereof  to  the  mandatory   prepayment  of  all  Liabilities
                  whereupon the Commitments  shall  automatically  be reduced by
                  the amount of such prepayment (it being  understood,  however,
                  that no such sale may be made  without the written  consent of
                  the Banks).

                  Section 10.3 of the Credit Agreement is amended to read in its
         entirety as follows:

                           SECTION  10.3  Insurance.  Maintain,  and cause  each
                                          ---------
                  Subsidiary to maintain,  such  insurance as may be required by
                  law and such other insurance,  to such extent and against such
                  hazards  and  liabilities,  as is  customarily  maintained  by
                  companies  similarly  situated.   Without  limitation  of  the
                  foregoing:

                           (a) All  policies  of  insurance  (i) shall  name the
                  Agent  as  loss  payee,  and  as  additional  insured,  as its
                  interests may appear, (ii) shall be maintained without cost to
                  the  Agent or any Bank,  (iii)  shall  provide  that the Agent
                  shall  receive at least 30 days' prior  written  notice of any
                  reduction,  modification  or cancellation  (including  without
                  limitation  cancellation  due to non-payment of premium),  and
                  (iv) shall be reasonably satisfactory in form and substance to
                  the Agent.

                           (b) Upon  request of the  Agent,  the  Company  shall
                  furnish to the Agent,  at reasonable  intervals  (but not more
                  than  once  per  calendar  year) a  certificate  of its  Chief
                  Accounting  Officer  (and,  if  requested  by  any  Bank,  any
                  insurance  broker of the Company) setting forth the nature and
                  extent  of  all   insurance   maintained  by  the  Company  in
                  accordance  with this  Agreement or any  Collateral  Documents
                  (and which,  in the case of a  certificate  of a broker,  were
                  placed through such broker).

                           (c) If any of the  Collateral  shall  be  damaged  or
                  destroyed, in whole or in part, by fire or other casualty, the
                  Company  shall give, or cause to be given,  notice  thereof to
                  the  Agent,  promptly  upon  the  Company's  actual  knowledge
                  thereof. All insurance proceeds shall be paid to the Agent for
                  application to the Liabilities,  provided,  however, that upon
                                                   --------   -------
                  request of the Company, so long as no Event of Default exists,
                  the Agent  shall  permit  such  proceeds  to be applied to the
                  repair and/or restoration of the Collateral. The Company shall
                  periodically  provide  the Agent with such  assurances  as the
                  Agent shall reasonably  request to evidence  compliance by the
                  Company with the foregoing.

                  Section  10.5.2 of the Credit  Agreement is amended to read in
         its entirety as follows:

                           SECTION  10.5.2 Minimum  Consolidated  Operating Cash
                                          --------------------------------------
                  Flow.  As of the end of any  calendar  month,  not  permit its
                  ----
                  Consolidated  Operating  Cash  Flow  (measured  monthly  on  a
                  cumulative  basis for the related  calendar  year), to be less
                  than the amount applicable to such calendar month as follows:

                       Calendar Month Ending                         Amount
                       ---------------------                         ------

                       August 31, 1999                             $   518,000
                       September 30, 1999                          $ 3,284,000
                       October 31, 1999                            $ 4,649,000

                  Section  10 of the  Credit  Agreement  is  further  amended by
         adding Section 10.23 as follows:

                           SECTION  10.23.  Transfer  of Assets  Pursuant to the
                                            ------------------------------------
                  Bush Hog Letter of Intent.  Without the written consent of the
                  -------------------------
                  Banks,  not  transfer  or  contribute  any assets to any other
                  person or entity  pursuant to the Bush Hog Letter of Intent or
                  the Bush Hog Definitive Agreement.

                  Section  12 of the  Credit  Agreement  is  amended  by  adding
         thereto Sections 12.1.10 and 12.1.11 as follows:

                           SECTION  12.1.10  Bush Hog Letter of Intent.  (i) The
                                             -------------------------
                  Bush Hog Letter of Intent or the Bush Hog Definitive Agreement
                  shall cease to provide for the Company to receive on or before
                  November 30,  1999,  in cash,  the Bush Hog Purchase  Price or
                  (ii) the Bush Hog Letter of Intent or the Bush Hog  Definitive
                  Agreement  shall be terminated or shall  otherwise cease to be
                  in full force and effect  (except to the extent  that the Bush
                  Hog  Definitive  Agreement  replaces  the Bush Hog  Letter  of
                  Intent),  or (iii)  any event  shall  occur  which  materially
                  adversely  affects  the  receipt by the Company in cash of the
                  Bush Hog Purchase Price on or before November 30, 1999.

                           SECTION 12.1.11 Security.  (i) any  representation or
                                           --------
                  warranty  made by the  Company in any  Collateral  Document is
                  breached or is false or misleading in any material respect; or
                  (ii) the  Company  shall fail to comply with or to perform any
                  provision of any  Collateral  Document and such failure  shall
                  continue for 15 days after notice  thereof to the Company from
                  the Agent,  any Bank, or the holder of any Revolving  Note; or
                  (iii) any  security  interest  purported  to be created by any
                  Collateral Document shall cease to be, or shall be asserted by
                  the  Company  not to be, a valid,  perfected,  first  priority
                  (except as otherwise  expressly  provided in this Agreement or
                  such Collateral  Document)  security  interest in any material
                  portion of the assets or properties covered thereby.

                  Section  13 of the  Credit  Agreement  is  amended so that the
         definition of Borrowing Base Overadvance  shall read in its entirety as
         follows:

                           Borrowing Base  Overadvance  shall for each month set
                  forth below mean an amount as follows:

                        Month                                Overadvance Amount
                        -----                                ------------------

                        January 1999                             $40,000,000
                        February 1999                            $40,000,000
                        March 1999                               $40,000,000
                        April   1999                             $40,000,000
                        May  1999                                $46,700,000
                        June  1999                               $47,600,000
                        July 1999                                $52,114,000
                        August 1999                              $54,734,000
                        September 1999                           $50,494,000
                        October 1999                             $60,754,000
                        November 1999                            $60,754,000


                  Section  13  of  the  Credit   Agreement  (the  definition  of
         Collateral Documents) is amended by adding thereto the following:

                  Without  limitation of the foregoing,  the Security  Agreement
                  dated as of May 12,  1999 of the Company in favor of the Agent
                  and the Banks shall  constitute  a  Collateral  Document and a
                  Loan Document hereunder.

                  Section  13 of the  Credit  Agreement  is  amended so that the
         definition of "Margin" shall read in its entirety as follows:

                           Margin shall mean (i) in the case of Eurodollar Loans
                  (and Letters of Credit) a rate equal to 3.5% per annum through
                  July 31, 1999 and 4% per annum thereafter and (ii) in the case
                  of Floating  Rate Loans,  a rate equal to 2% per annum through
                  July 31, 1999 and 2.5% per annum thereafter.

                  Section  13 of the  Credit  Agreement  is  further  amended by
         adding  thereto a definition  of "Bush Hog  Definitive  Agreement"  and
         "Bush Hog Letter of Intent" as follows:

                           Bush Hog  Definitive  Agreement  means any definitive
                           -------------------------------
                  agreement which is executed pursuant to the Bush Hog Letter of
                  Intent.

                           Bush Hog  Letter  of  Intent  shall  mean the  letter
                           ----------------------------
                  agreement   dated  July  15,  1999  among  the   Company,   CC
                  Industries, Inc. and Henry Crown and Company.

                           Bush Hog  Purchase  Price shall mean (i) the purchase
                           ------------------
                  price of $120,710,700  for  approximately an 80.1% interest in
                  the assets comprising the Bush Hog and Great Bend Divisions of
                  the  Company  pursuant  to the Bank Hog Letter of Intent  (the
                  "Original  Purchase  Price") or (ii) such other purchase price
                  as may be agreed to by the  Company  pursuant  to the Bush Hog
                  Letter  of  Intent  or  the  Bush  Hog  Definitive  Agreement,
                  provided  that  such  other   purchase   price  shall  not  be
                  materially less than the Original Purchase Price.

                  Section  13 of the  Credit  Agreement  is  amended so that the
         definition of "Revolving  Termination  Date" shall read in its entirety
         as follows:

                           Revolving Termination  Date shall mean  November 30,
                           ---------------------
         1999.

                  Section  13 of the  Credit  Agreement  is  amended so that the
         definition of Subsidiary shall read in its entirety as follows.

                           "Subsidiary"  shall mean,  with respect to any person
                  (herein   referred  to  as  the  "parent")  any   corporation,
                  partnership, association or other business entity (a) of which
                  securities or other ownership interests representing more than
                  50% of the  equity  or more  than 50% of the  ordinary  voting
                  power or more than 50% of the  general  partnership  interests
                  are,  at the time any  determination  is  being  made,  owned,
                  controlled   or  held,  or  (b)  that  is,  at  the  time  any
                  determination is made,  otherwise  Controlled by the parent or
                  one or more  subsidiaries  of the  parent or by the parent and
                  one or more  subsidiaries of the parent.  For purposes hereof,
                  "Control" shall mean the  possession,  directly or indirectly,
                  of  the  power  to  direct  or  cause  the  direction  of  the
                  management  or  policies  of a  person,  whether  through  the
                  ownership of voting securities,  by contract or otherwise, and
                  the terms  "Controlling" and "Controlled"  shall have meanings
                  correlative thereto.


                                   II. WAIVER
                                       ------

                  2.1  Waiver.  The  Banks  hereby  waive  noncompliance  by the
Company  as  of  June  30,   1999  with  the  minimum   consolidated   operating
consolidating cash flow provision of Section 10.5.2.

                  2.2 Limitation on Waiver.  Except as specifically set forth in
                      --------------------
Section 2.1, the foregoing waiver is specific in time and in intent and does not
constitute,  nor shall it be construed as, a waiver of any other right, power or
privilege  under  the  Credit  Agreement,  or  under  any  agreement,  contract,
indenture,  document or other instrument mentioned in the Credit Agreement;  nor
does the  foregoing  waiver  preclude  other or further  exercise  hereof or the
exercise of any other  right,  power or  privilege,  nor shall the waiver of any
right, power, privilege or default hereunder, or under any agreement,  contract,
indenture, document, or instrument mentioned in the Credit Agreement, constitute
a waiver of any other default of the same or of any other term or provision.

                                  III. GENERAL
                                       -------

                  3.1   Representations.   The  Company  hereby  represents  and
                        ---------------
warrants to the Banks and the Agent that:

                  (a) The execution,  delivery and performance of this Amendment
         are within the Company's corporate authority, have been duly authorized
         by all necessary corporate action, have received all necessary consents
         and  approvals  (if any  shall  be  required),  and do not and will not
         contravene or conflict with any provision of law or of the  Certificate
         of Incorporation or By-laws of the Company or its  Subsidiaries,  or of
         any other  agreement  binding upon the Company or its  Subsidiaries  or
         their respective property.

                  (b) This Amendment  constitutes the legal,  valid, and binding
         obligations  of  the  Company,   enforceable  against  the  Company  in
         accordance with its terms,  except as enforceability  may be limited by
         applicable  bankruptcy,  insolvency,  or  similar  laws  affecting  the
         enforcement of creditors'  rights generally or by equitable  principles
         relating to enforceability.

                  (c)  Except for any Event of  Default  or  Unmatured  Event of
         Default which will be cured by this Amendment  becoming  effective,  no
         Event of Default or  Unmatured  Event of Default  has  occurred  and is
         continuing or will result from this Amendment.

                  (d) The Company has  furnished to the Banks a true and correct
         copy of the Bush Hog Letter of Intent.

                  (e) Pursuant to Section 5(b) of the  Security  Agreement,  the
         Company is using its bests efforts to obtain from each person from whom
         the Company  leases any warehouse  space or premises in or on which any
         Collateral is located, a consent in form and substance  satisfactory to
         the Agent.

                  (f) The  Company  has no  fixtures  in any county  except Cook
         County,  Illinois;  Barton County,  Kansas; Lake County,  Indiana;  and
         Dallas County, Alabama.

                  3.2  Conditions  Precedent to  Effectiveness.  This  Amendment
                       ---------------------------------------
shall become  effective  as of July 31, 1999 (the  "Effective  Date"),  subject,
however,  to the receipt by the Agent of all fees and expenses previously billed
to the Company in respect of the Credit  Agreement as amended  hereby,  together
with each of the following,  each  appropriately  completed and duly executed as
required and  otherwise in form and  substance  reasonably  satisfactory  to the
Agent:

                  (a)  counterparts of this  Amendment,  executed by the Company
         and the Banks.

                  (b) Certified  copies of resolutions of the Board of Directors
         of the Company  authorizing  or ratifying the  execution,  delivery and
         performance by the Company of this Amendment;

                  (c) A certificate of the President or a Vice-President  of the
         Company to the effect that (i) all necessary consents or approvals with
         respect to this Amendment have been obtained; and (ii) attached thereto
         is a true and correct copy of the Bush Hog Letter of Intent;

                  (d) A certificate  of the Secretary or Assistant  Secretary of
         the Company,  certifying  the name(s) of the  officer(s) of the Company
         authorized to sign this  Amendment and the documents  related hereto on
         behalf of the Company;

                  (e) An opinion of Mark  Standefer  covering  those matters set
         forth in Section  3.1(a) and 3.1(b) and such other legal matters as the
         Agent or its counsel may request; and

                  (f) Such other  instruments,  agreements  and documents as the
         Agent may  reasonably  request,  in each case duly executed as required
         and otherwise in form and substance satisfactory to the Banks.

                  3.3 Documents Remain in Effect.  Except as amended or modified
                      --------------------------
by this Amendment, the Credit Agreement remains in full force and effect and the
Company confirms that its representations,  warranties, agreements and covenants
contained in, and obligations and liabilities  under,  the Credit  Agreement and
each of the other Loan  Documents are true and correct in all material  respects
as if made on the date  hereof,  except  where  such  representation,  warranty,
agreement or covenant  speaks as of a specified  date.  References to the Credit
Agreement  in any other  document  shall be deemed to include a reference to the
Credit Agreement as amended or modified hereby, whether or not reference is made
to this Amendment.

                  3.4 Expenses. The Company covenants to pay to or reimburse the
                      --------
Agent,  upon demand,  for all costs and expenses  (including  legal expenses) in
connection  with  the  development,   preparation,  negotiation,  execution  and
delivery of this Amendment and the Loan Documents.

                  3.5  Miscellaneous.
                       -------------

                  (a)  Section   headings   used  in  this   Amendment  are  for
convenience  of reference  only, and shall not affect the  construction  of this
Amendment.

                  (b) This Amendment shall be a contract made under and governed
by the  internal  laws of the  State  of  Illinois,  without  giving  effect  to
principles of conflicts of laws.

                  (c) All obligations of the Company and rights of the Banks and
the  Agent,  that  are  expressed  herein,  shall be in  addition  to and not in
limitation of those provided by applicable law.

                  (d) Whenever possible,  each provision of this Amendment shall
be interpreted in such manner as to be effective and valid under applicable law;
but if any provision of this  Amendment  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 Amendment.

                  (e) The Company acknowledges and agrees that the execution and
delivery by the Agent and the Banks of this Amendment shall not be deemed (i) to
create a course  of  dealing  or  otherwise  obligate  the Agent or the Banks to
forbear or execute similar amendments under the same or similar circumstances in
the future, or (ii) to amend, relinquish or impair any right of the Agent or the
Banks to receive any indemnity or similar payment from any Person or entity as a
result of any matter arising from or relating to this Amendment.
                  (f) This  Amendment  shall be  binding  upon and  inure to the
benefit of the parties and thereto and their respective  successors and assigns.
No third party beneficiaries are intended in connection with this Amendment.

                  (g)  This   Amendment   may  be  executed  in  any  number  of
counterparts,  each  of  which  shall  be  deemed  an  original,  but  all  such
counterparts together shall constitute but one and the same instrument.  Each of
the parties  hereto  understands  and agrees that this  document  (and any other
document  required  herein) may be delivered by any party thereto  either in the
form  of an  executed  original  or  an  executed  original  sent  by  facsimile
transmission  to be followed  promptly by mailing of a hard copy  original,  and
that  receipt  by the  Agent of a  facsimile  transmitted  document  purportedly
bearing  the  signature  of a Bank or the  Company  shall  bind such Bank or the
Company, respectively,  with the same force and effect as the delivery of a hard
copy  original.  Any  failure  by the Agent to  receive  the hard copy  executed
original of such  document  shall not diminish the binding  effect of receipt of
the facsimile  transmitted executed original of such document of the party whose
hard copy page was not received by the Agent.

                  (h)  This  Amendment,  together  with  the  Credit  Agreement,
contains the entire and exclusive agreement of the parties hereto with reference
to the matters discussed herein and therein. This Amendment supercedes all prior
drafts and  communications  with  respect  thereto.  This  Amendment  may not be
amended  except in accordance  with the provisions of Section 15.1 of the Credit
Agreement.

                                      * * *
<PAGE>


                  IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  the
execution and delivery hereof by their respective representatives thereunto duly
authorized as of the date first herein appearing.

                                         ALLIED PRODUCTS CORPORATION


                                         By: /s/ Richard A. Drexler
                                            -----------------------------------
                                         Name:   Richard A. Drexler
                                              ---------------------------------
                                         Title:  Chairman, CEO, President
                                         --------------------------------------


                                         BANK OF AMERICA NATIONAL, N.A.(formerly
                                         known as Bank of America National Trust
                                         and Savings Association), as Agent



                                         By: /s/ David A. Johanson
                                            -----------------------------------
                                         Name:   David A. Johanson
                                              ---------------------------------
                                         Title:  Vice President
                                               --------------------------------


                                         BANK OF AMERICA NATIONAL, N.A.(formerly
                                         known as Bank of America National Trust
                                         and Savings Association), in its
                                         individual corporate capacity



                                         By: /s/ Peter J. Gates, Jr.
                                            -----------------------------------
                                         Name:   Peter J. Gates, Jr.
                                              ---------------------------------
                                         Title:
                                               --------------------------------

                                         LASALLE NATIONAL BANK


                                         By: /s/ Mary Lou Bartlett
                                            -----------------------------------
                                         Name:   Mary Lou Bartlett
                                              ---------------------------------
                                         Title:  Vice President
                                               --------------------------------