EXHIBIT 10.5

                           AMENDMENT TO LOAN AGREEMENT


         THIS AMENDMENT TO LOAN AGREEMENT (this  "Amendment") is entered into as
of the 24th day of March,  1997,  and  effective as of December 31, 1996, by and
between  LaSalle  National  Bank, a national  banking  association  ("LaSalle"),
Harris  Trust and Savings  Bank,  an  Illinois  banking  corporation  ("Harris")
(LaSalle and Harris are referred to herein  collectively  as the  "Banks"),  and
Stimsonite Corporation,  a Delaware corporation  ("Borrower").  LaSalle National
Bank, a national banking association, as agent for the Banks for certain limited
purposes  ("Agent"),  shall  also be deemed a party  hereto  for the  purpose of
acting as agent.


                              W I T N E S S E T H:


         WHEREAS,  Banks, Agent and Borrower entered into a Loan Agreement dated
as of July 23, 1996 (the  "Agreement"),  and now desire to amend such  Agreement
pursuant to this Amendment.

         NOW,  THEREFORE,  for and in  consideration  of the premises and mutual
agreements  herein contained and for the purposes of setting forth the terms and
conditions of this Amendment,  the parties,  intending to be bound, hereby agree
as follows:

         1. Incorporation of the Agreement.  All capitalized terms which are not
defined  hereunder  shall have the same meanings as set forth in the  Agreement,
and the  Agreement  to the  extent  not  inconsistent  with  this  Amendment  is
incorporated  herein by this  reference as though the same were set forth in its
entirety.  To  the  extent  any  terms  and  provisions  of  the  Agreement  are
inconsistent  with the amendments set forth in paragraph 2 below, such terms and
provisions shall be deemed superseded  hereby.  Except as specifically set forth
herein,  the Agreement  shall remain in full force and effect and its provisions
shall be binding on the parties hereto.

         2.       Amendment of the Agreement.  The Agreement is hereby amended
as follows:

                  (a) The  definition  of the term "EBITDA " in Paragraph 1.1 is
hereby amended and restated -------------- to read in its entirety as follows:

                  "EBITDA" means, with respect to any fiscal period of Borrower,
                  Borrower's (a) net income (determined in accordance with GAAP)
                  for such period,  plus (b) the aggregate  amounts  deducted in
                  determining  such  net  income  in  respect  of  (i)  Interest
                  Expense,   (ii)  income  taxes,   (iii)   depreciation,   (iv)
                  amortization,  (v) extraordinary  losses up to $500,000 in the
                  aggregate   in  any  fiscal  year  and  (vi)   $4,000,000   of
                  restructuring   charges  for  fiscal  year  1996,   minus  (c)
                  extraordinary  gains,  each determined in accordance with GAAP
                  consistently applied.

                  (b)      Paragraph 5.18 is hereby added to the Agreement and
shall read as follows:

                           5.18 Proceeds from Sale of Waukegan Facility.  In the
                  event that  Borrower  sells the Waukegan  Facility  before all
                  amounts of  principal  and interest due in respect of the Term
                  Loan are paid in full to and discharged by the Banks,  the net
                  proceeds  from  such  sale  shall  be  applied  to the  unpaid
                  principal  portions of the Term Loan in the  inverse  order of
                  their maturities.

                  (c)      A final  sentence of Paragraph  9.3(b) is hereby
added to the  Agreement  and shall read as follows:

                  Notwithstanding the foregoing,  Borrower may sell or otherwise
                  dispose  of the  Waukegan  Facility  if,  and only if, the net
                  proceeds of such sale are  $6,000,000  or greater and Borrower
                  complies in full with the provisions of Paragraph 5.18.

                  (d)      Paragraph 9.2(g)(i) is hereby amended and restated to
read in its entirety as follows:

                  Not permit the ratio of Funded  Debt to EBITDA  minus  Capital
                  Expenditures to exceed (A) 4.50:1 as of the end of each fiscal
                  quarter  through  September  30,  1997 and (b)  3.75:1 for the
                  fiscal quarter ending December 31, 1997.  Notwithstanding  the
                  foregoing,  such ratio shall be immediately  reduced to 3.75:1
                  if Borrower sells the Waukegan  Facility prior to December 31,
                  1997.

         3.       Closing Documents.  The  following documents and other  items
shall  be   delivered concurrently with this Amendment:

                  (a)      Payment of an amendment fee to the Banks in the
amount of $25,000 in  accordance  with their Pro Rata Shares.

                  (b)      Four executed copies of this Amendment.

         4.   Representations   and  Warranties;   No  Event  of  Default.   The
representations  and warranties set forth in Paragraph 9 are deemed remade as of
the date hereof and, upon full  execution of this  Amendment in accordance  with
Section 5 below,  Borrower  represents that such  representations and warranties
are true and  correct as of the date  hereof  (other  than  representations  and
warranties made as of a specific date). Upon full execution of this Amendment in
accordance with Section 5 below, no Event of Default exists nor does there exist
any event or condition which with notice,  lapse of time and/or the consummation
of the transactions contemplated hereby would constitute an Event of Default.

         5. Effectuation.  The amendments to the Agreement  contemplated by this
Amendment  shall be  deemed  effective  as of  December  31,  1996 upon the full
execution  of this  Amendment  and without any  further  action  required by the
parties  hereto.  There  are  no  conditions  precedent  or  subsequent  to  the
effectiveness of this Amendment except as set forth in Section 3 above.

         6.  Counterparts.  This  Amendment  may be  executed in two or more
counterparts,  each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

         IN  WITNESS  WHEREOF,  the  parties  hereto  have  duly  executed  this
Amendment as of the date first above written.





LASALLE NATIONAL BANK                       STIMSONITE CORPORATION



By:      By:
   Its Vice President               Its President



LASALLE NATIONAL BANK, as           HARRIS TRUST AND SAVINGS BANK
Agent



By:      By:
   Its Vice President               Its Vice President