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                                                                     Exhibit 4.2



                          CREDIT AND SECURITY AGREEMENT
                          -----------------------------

         This Credit and Security Agreement dated as of the 13th day of May,
1997, by and between GLAS-CRAFT, INC., an Indiana corporation (hereinafter
referred to as "Borrower"), and NBD BANK, N.A., a national banking association
(hereinafter referred to as "Bank").

                              W I T N E S S E T H :

         WHEREAS, the Borrower desires to obtain certain financial
accommodations from the Bank up to the maximum original aggregate principal
amount of Two Million and No/100 Dollars ($2,000,000.00); and

         WHEREAS, the Bank is willing to provide such financial accommodations
to the Borrower on the terms and subject to the conditions in this Agreement.

         NOW, THEREFORE, in consideration of the premises, the mutual covenants
hereinafter contained, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:

         SECTION 1. DEFINITIONS. When used herein, the capitalized terms defined
in the recitals above shall have the meanings therein stated and the following
capitalized terms shall have the meanings ascribed to them below. Other terms
used but not otherwise defined herein shall have the meaning ascribed to such
terms by the Uniform Commercial Code in effect in Indiana from time to time and
GAAP, as the context may require, unless the context expressly provides
otherwise.

         1.1 "ACCOUNT DEBTOR" means the party who is obligated on or under any
Receivable or Contract Right.

         1.2 "AGREEMENT" means this Credit and Security Agreement between the
Borrower and the Bank including all exhibits hereto and the executed originals
thereof, as the same may be amended from time to time.

         1.3 "AMERICAN" means American Chemical Company, a Missouri corporation.

         1.4 "APPLICATION FOR ADVANCE" means that document required by Section
2.1.1 hereof in the form and substance of EXHIBIT 1.4 hereof.

         1.5 "BANKING DAY" means a day which is not (a) Saturday, Sunday or
legal holiday on which banking institutions in the State of Indiana or the city
in which the office of the Bank is located is authorized to remain closed, or
(b) a day on which the New York Stock Exchange is closed.

         1.6 "BANKRUPTCY CODE" means the Federal Bankruptcy Code of 1978, as
amended.

         1.7 "BASIS POINT" means One One-Hundredth of One Percent (0.01%).


                                      


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         1.8 "BOARD" means the Board of Governors of the Federal Reserve System.

         1.9 "BOOK VALUE" means the value disclosed in the most recent financial
statements required to be furnished to the Bank prepared in accordance with GAAP
on a consistent basis.

         1.10 "BORROWING BASE" means an amount equal to the sum of Eighty
Percent (80%) of Eligible Receivables, PLUS Fifty Percent (50%) of Eligible
Inventory, PLUS Fifteen Percent (15%) of the net book value of Eligible
Machinery and Equipment, as disclosed on the most recent Borrowing Base
Certificate furnished to the Bank pursuant to the requirements of this
Agreement; but the Borrowing Base will not include any assets or properties
acquired from American or Raven either prior to or after the closing of the Line
of Credit.

         1.11 "BORROWING BASE CERTIFICATE" means the certificate required by
Section 7.2.1 hereof, in the form and substance of EXHIBIT 1.11 hereto.

         1.12 "CERTIFICATE OF NO DEFAULT" means that certificate required by
Section 7.2.5 hereof, in the form and substance of EXHIBIT 1.12 hereto.

         1.13 "CLOSING DATE" means the date upon which the conditions set forth
in Section 6 hereof are satisfied and the financial accommodations referenced in
this Agreement are consummated.

         1.14 "CODE" means the Internal Revenue Code of 1986, as amended.

         1.15 "COLLATERAL" means all of Borrower's interest in personal property
of every kind and nature including all Receivables, Contract Rights, Inventory,
Machinery and Equipment, Proprietary Rights, General Intangibles, chattel paper,
documents and instruments and shall also include, without limitation, (i) all
attachments, accessions and equipment now owned or hereafter affixed to any of
the Collateral or used in connection therewith, substitutions and replacements
thereof, (ii) all items of Collateral now owned or existing and hereafter
acquired, created or arising, and all products and proceeds thereof (including
without limitation claims of the Borrower against third parties for loss or
damage to or destruction of any Collateral and all insurance proceeds) and any
substitution or replacement thereto, (iii) all monies, securities, drafts,
notes, items and other property of the Borrower, and the proceeds thereof, now
or hereafter held or received by or in transit to the Bank from or for the
Borrower, whether for safekeeping, custody, pledge, transmission, collection, or
otherwise, (iv) any and all deposits (general or special), balances, sums,
proceeds and credits of the Borrower with, any and all claims of the Borrower
against, the Bank, at any time existing, and (v) all labels and other devises,
names or marks affixed to or to be affixed to any of the Inventory for purposes
of selling or of identifying the same or the seller or manufacturer thereof and
all right, title and interest of the Borrower therein and thereto. The
Collateral shall also include any property described in any separate schedules
at any time or from time to time furnished by the Borrower to the Bank (all of
which shall be and hereby are deemed part of this Agreement) and shall also
include

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without limitation all other Collateral now or hereafter pledged, assigned,
hypothecated or transferred to the Bank.

         1.16 "CONTRACT RIGHTS" means any right of the Borrower to payment under
a contract for the sale or lease of goods or the rendering of services, which
right is at the time not yet earned by performance.

         1.17 "ELIGIBLE MACHINERY AND EQUIPMENT" means Borrower's Machinery and
Equipment which is used in the Borrower's ordinary course of business and in
which the Bank has a perfected first priority security interest, including,
without limitation, all tools, accessories, parts, machinery, equipment, trucks,
tractors, trailers and other rolling stock, furniture, office equipment,
leasehold improvements, fixtures, trade fixtures and accessions and accessories
thereto currently used in the Borrower's operations.

         1.18 "ELIGIBLE INVENTORY" means Inventory as reflected on the
Borrower's financial statements in the form of raw materials suitable for
incorporation and utilization in Borrower's manufacturing which is in acceptable
quantities, grades and specifications, and finished goods which are not
obsolete, are saleable in the ordinary course of Borrower's business and are
merchantable, and otherwise in which the Bank as a perfected first priority
security interest and which the Bank in its exclusive judgment deems to be
Eligible Inventory based on such credit and collateral considerations as the
Bank may deem appropriate.

         1.19 "ELIGIBLE RECEIVABLES" means those Receivables which are due and
payable within Ninety (90) days from the invoice date (assuming net 30 terms),
have been validly assigned to Bank and in which Bank has a first priority
security interest and strictly comply with all of Borrower's warranties and
representations to Bank; but Eligible Receivables will not include the
following: (a) Receivables with respect to which the Account Debtor is a
shareholder, officer, employee or agent of Borrower, or a corporation more than
Five Percent (5%) of the stock of which is owned by any of such persons; (b)
Receivables with respect to which the Account Debtor is not a resident of the
United States unless supported/confirmed by a Letter of Credit in form or
otherwise insured in a manner acceptable to the Bank; (c) Receivables with
respect to which the Account Debtor is a subsidiary of, related to, affiliated
or has common officers or directors with Borrower; and (d) any Receivables which
may be subject to any claim of reduction, counterclaim, setoff, recoupment or
any claims for credits, allowances, or adjustments by the Account Debtor because
of returned, inferior or damaged inventory or unsatisfactory services; (e) any
Receivables owed by the U.S. Government, or a department or agency thereof, not
properly assigned to the Bank; (f) any Receivables not billed or invoiced under
usual and customary trade credit terms; (g) any and all Receivables owed by a
particular Account Debtor when Fifty Percent (50%) or more of the total
Receivables of such Account Debtor are more than Ninety (90) days old from the
invoice date; and (h) any Receivables owed by an Account Debtor who does not
meet Bank's standards of credit worthiness in Bank's sole credit judgment
exercised in good faith.

         1.20 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

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         1.21 "EVENT OF DEFAULT" means the occurrence of any event specified in
Section 9 hereof.

         1.22 "GAAP" means generally accepted accounting principles, in effect
from time to time.

         1.23 "GENERAL INTANGIBLES" means all present and future general
intangibles (including choses or things in action), goodwill, blueprints,
drawings, purchase orders, customer lists, monies due or recoverable from
pension funds, route lists, infringement claims, computer programs, computer
disks, computer software, computer tapes, literature, reports, catalogs, deposit
accounts, insurance premium rebates, tax refunds, tax refund claims and
insurance proceeds, together with all proceeds and products thereof.

         1.24     "GUARANTOR" means Cohesant Technologies Inc.

         1.25 "GUARANTY" means the Unconditional Unlimited Continuing Guaranty
dated as of the Closing Date executed and delivered to the Bank by the Guarantor
providing for an unlimited guaranty of repayment of the Loans.

         1.26 "INVENTORY" means all goods, merchandise and other personal
property of the Borrower, now owned or existing or hereafter acquired, created
or arising, which are held for sale or lease or are furnished or to be furnished
under a contract of service or supply or are raw materials, work-in-process,
finished goods, or materials used or to be used in the Borrower's business.

         1.27 "LINE OF CREDIT" means the discretionary revolving line of credit
extended to the Borrower by the Bank, pursuant to the terms and conditions of
Section 2.1 hereof, including all renewals and extensions thereof.

         1.28 "LINE OF CREDIT LOAN" means any advance, and in the plural all
advances, made to the Borrower from time to time under the Line of Credit.

         1.29 "LINE OF CREDIT NOTE" means the Demand Revolving Line of Credit
Note from the Borrower to the Bank described in Section 2.1.1 hereof, including
all renewals and extensions thereof evidencing the Line of Credit Loans.

         1.30 "LOAN DOCUMENTS" means this Agreement, the Note and such other
documents, instruments, certificates, statements or other writings contemplated
by or delivered or to be delivered in connection with this Agreement.

         1.31 "LOANS" means all Line of Credit Loans, including all renewals,
modifications, amendments and extensions thereof.

         1.32 "MACHINERY AND EQUIPMENT" shall mean all tools, accessories,
parts, machinery, equipment, trucks, trailers and other rolling stock,
furniture, office equipment, leasehold improvements, fixtures, trade fixtures
and accessions and accessories thereto wherever situated, and any substitution
or replacement of such property.

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         1.33 "NOTE" means the Line of Credit Note, including all renewals and
extensions thereof and amendments thereto evidencing the Loans.

         1.34 "PLAN" means an employee pension benefit plan as defined in ERISA.

         1.35 "PRIME RATE" means the fluctuating rate of interest which is
publicly announced from time to time by Bank at its principal place of business
as being its "prime rate" or "base rate" thereafter in effect, with each change
in the Prime Rate automatically, immediately and without notice changing the
fluctuating interest rate thereafter applicable hereunder, it being agreed that
the Prime Rate is not necessarily the lowest rate of interest then available
from Bank on fluctuating rate loans.

         1.36 "PROPRIETARY RIGHTS" means all patent rights, patent applications,
franchise rights, trademarks, service marks, tradenames, corporate names,
copyrights, trade secrets and other proprietary rights and general intangibles
necessary to the conduct of the business of the Borrower as it is now conducted,
including all reissue applications, registrations, registration applications,
and corporate name authorizations applicable thereto.

         1.37 "RAVEN" means Raven Lining Systems, Inc., a Missouri corporation.

         1.38 "RECEIVABLES" means all accounts, account receivables, notes,
contract rights, contract receivables, contracts, instruments, documents, and
chattel paper, whether secured or unsecured which the Borrower owns or hereafter
acquires or in which it has or acquires an interest.

         1.39 "TANGIBLE NET WORTH" means the Borrower's consolidated net worth
LESS intangible assets less advances due from affiliates.

         1.40 "TOTAL LIABILITIES" means Borrower's total liabilities.

         1.41 "UCC" means the Uniform Commercial Code as adopted and in force in
the State of Indiana from time to time.

         1.42 "UNMATURED EVENT OF DEFAULT" means any event which, if it
continues uncured (other than obligations which have not matured), will with
lapse of time or notice, or both, constitute an Event of Default.

         1.43 "WORKING CAPITAL" means the Borrower's current assets less current
liabilities less the sum of the outstanding principal balance of the Line of
Credit.

         SECTION 2.  CREDIT FACILITIES.

         2.1 LINE OF CREDIT. Subject to the further terms and qualifications
contained in this Agreement, so long as no Event of Default or Unmatured Event
of Default has occurred, the Bank may lend to the Borrower and the Borrower
agrees to borrow from the Bank (and to repay to the



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Bank in accordance with the terms hereof) from time to time an aggregate
principal sum not to exceed at any time outstanding the lesser of (i) Two
Million and No/100 Dollars ($2,000,000.00) or (ii) the Borrowing Base.

                  2.1.1  THE NOTE; METHOD OF BORROWING. The obligation of the
                  Borrower to repay the Line of Credit Loans shall be evidenced
                  by the Line of Credit Note which shall be repayable on the
                  earlier of May 1, 1998 or DEMAND ("Maturity"). As long as no
                  Event of Default or Unmatured Event of Default shall have
                  occurred and be continuing and until expiration of the Line of
                  Credit, upon acceleration or otherwise, the Borrower may
                  borrow, repay and re-borrow under the Line of Credit Note.
                  Notwithstanding the previous sentence or any other provision
                  of this Agreement, Bank shall not be obligated to lend or
                  re-lend to Borrower at any time under this Line of Credit;
                  each borrowing or re-borrowing which is made under this Line
                  of Credit shall be made at the option of, and in the sole and
                  exclusive discretion of Bank. Without in any way limiting the
                  generality of the foregoing, Bank may, at any time and from
                  time to time, in its sole discretion, change or reduce the
                  percentage of advance rates against Eligible Receivables,
                  Eligible Inventory and Eligible Machinery and Equipment as set
                  forth in the definition and Borrowing Base contained in
                  Section 1 hereof, under the definition of "Borrowing Base".
                  Each Line of Credit Loan which the Bank determines to make to
                  the Borrower will be credited to Borrower's demand deposit
                  account maintained with the Bank, unless the Bank, in its sole
                  discretion, consents otherwise. The Bank, in its sole
                  discretion, shall be entitled to rely on any oral or
                  telephonic communication requesting an advance and/or
                  providing disbursement instructions which shall be received by
                  it in good faith from anyone identifying himself as a person
                  authorized by certified borrowing resolutions delivered from
                  time to time to the Bank or from anyone reasonably believed by
                  the Bank to be an officer or agent of the Borrower otherwise
                  authorized to borrow funds from the Bank on behalf of the
                  Borrower. The Borrower shall, upon the Bank's request,
                  immediately confirm in writing to the Bank any such oral or
                  telephonic communication. All Line of Credit Loans by the Bank
                  and payments by the Borrower shall be recorded by the Bank on
                  its books and records, and said books and records shall be
                  conclusive evidence of the total indebtedness owed under the
                  Line of Credit.

                  2.1.2  INTEREST. The Borrower agrees to pay interest on the
                  unpaid balance of the Line of Credit Note outstanding from
                  time to time from the date thereof until its maturity at a per
                  annum rate equal to the Prime Rate plus Fifty (50) Basis
                  Points and after maturity, whether by acceleration or
                  otherwise, at a per annum rate equal to the Prime Rate plus
                  Three Hundred Fifty (350) Basis Points. These rates shall
                  change from time to time effective concurrently with a change
                  in the Prime Rate. Interest shall be due and payable
                  commencing on June 1, 1997, and on the first day of each month
                  thereafter until maturity of the Line of Credit Note, whether
                  by acceleration or otherwise, and will be computed on the
                  basis of a 360-day year over the actual number of days
                  elapsed. If the Bank has not received accrued but unpaid
                  interest as

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                  of the due date thereof (after any applicable cure period),
                  the Bank shall have the right to disburse to itself the amount
                  of such interest as of the date thereof and to add such amount
                  to the principal balance of the Line of Credit.

                  2.1.3  REIMBURSEMENTS DUE TO PAYMENTS BY THE BANK. Any amounts
                  which the Bank is permitted to pay on behalf of the Borrower
                  pursuant to any of the Loan Documents and which in its sole
                  discretion the Bank elects to pay, plus any other amounts to
                  which the Bank is entitled to reimbursement from the Borrower,
                  shall be invoiced to the Borrower and shall be payable Five
                  (5) days after the date of the invoice. If not paid within
                  such Five (5) days, such amounts shall be charged to the Line
                  of Credit. Thereupon, the available Line of Credit shall be
                  immediately reduced by a corresponding amount. Upon being
                  charged to the Line of Credit, these amounts shall be
                  considered to be principal and shall immediately begin to bear
                  interest at the same rate and shall be payable at the same
                  times as set forth in Section 2.1.2 hereof.

                  2.1.4  APPLICATION OF PAYMENTS. Any payments received from the
                  Borrower with respect to the Line of Credit Loan generally
                  shall be applied in the following order: (i) accrued interest,
                  (ii) the principal balance of the Line of Credit Loan, and
                  (iii) any expenses for which the Bank is entitled to
                  reimbursement pursuant to the terms of this Agreement or any
                  of the Loan Documents.

                  2.1.5  MANDATORY REDUCTIONS. If at any time the aggregate
                  principal outstanding under the Line of Credit exceeds the
                  lesser of Two Million and No/100 Dollars ($2,000,000.00) or
                  the Borrowing Base, either as a result of a decrease in the
                  value of the Borrowing Base or otherwise, the Borrower shall
                  immediately repay to the Bank, without the necessity of notice
                  or demand from the Bank, an amount not less than such excess.

                  2.1.6  COLLECTION AND APPLICATION OF RECEIVABLES. After the
                  occurrence of an Event of Default, the Bank or its designee
                  may notify customers or Account Debtors at any time, and from
                  time to time, that the Receivables have been assigned to the
                  Bank and of the Bank's security interests therein, and may
                  collect them directly and charge the collection costs and
                  expenses to the Line of Credit.


         SECTION 3.  COMMITMENT FEE AND EXPENSES.

         3.1  COMMITMENT FEES. The Borrower shall pay a commitment fee relating
to the Loans equal to Ten Thousand and No/100 Dollars ($10,000.00), the prior
receipt of which is acknowledged by the Bank. Such commitment fee was earned
upon the execution of the Bank's commitment letter dated April 22, 1997 by the
Borrower and the Guarantor and the Borrower shall not be entitled to any refund,
in whole or in part, of such fees for any reason.



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         3.2  EXPENSES. The Borrower shall pay all out-of-pocket expenses
associated with the preparation and negotiation of the Loan Documents and the
closing of the Loans, including without limitation, UCC search fees, filing
fees, recording fees, attorneys' fees (which attorneys' fees reimbursement
amount not to exceed Four Thousand and No/100 Dollars ($4,000.00) assuming
normal and customary closing preparation and further provided that such estimate
shall not be exceeded without prior written notice to Borrower), title search
fees and disbursements made by or for the benefit of the Bank with respect to
the Loans.

         SECTION 4. GRANT OF SECURITY INTEREST. In consideration of one or more
loans, advances, or other financial accommodations at any time before, at or
after the date hereof made or extended by the Bank (at the sole discretion of
the Bank in each instance) to or for the account of the Borrower, including
without limitation this Agreement and the Note, the Borrower hereby grants and
transfers to the Bank a continuing security interest in and a right of setoff
against, and the Borrower hereby assigns to the Bank, the Collateral, whether
currently owned or hereafter acquired, to secure the payment, performance and
observance of all indebtedness, obligations, liabilities, guaranties and
agreements of any kind of the Borrower to the Bank, now existing or hereafter
arising, direct or indirect (including without limitation any participation or
interest of the Bank in obligations of the Borrower to another), acquired
outright, conditionally or as collateral security from another, absolute or
contingent, joint or several, secured or unsecured, due or not, contractual or
tortious, liquidated or unliquidated, arising by operation of law or otherwise,
and of all agreements, documents and instruments evidencing any of the foregoing
or under which any of the foregoing may have been issued, created, assumed or
guaranteed, including without limitation the Note.

         SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. To induce
the Bank to make the Loans requested by the Borrower, and to provide the
financial accommodations to the Borrower contemplated by this Agreement, the
Borrower represents and warrants, upon which the Bank is entitled to rely and is
relying in entering into this Agreement, that:

         5.1  EXISTENCE AND POWER OF CORPORATION. The Borrower is a corporation
duly incorporated, validly existing and in good standing under the laws of the
state of Indiana and is duly licensed or qualified to transact business in all
places where the character of its properties or the nature of its activities
make such licensing or qualification necessary. The Borrower has full corporate
power and legal right to carry on its business as now conducted, to own its
property, to execute and deliver this Agreement and the other Loan Documents,
to borrow hereunder and to perform and otherwise consummate the obligations
contemplated hereby and by the other Loan Documents.

         5.2  CORPORATE AUTHORITY. The making and performance by the Borrower of
this Agreement, the Note, the Loans hereunder, and all other Loan Documents
imposing obligations on the Borrower, have been duly authorized by all
requisite corporate action of the Borrower and will not (i) violate or conflict
with any provisions of law or regulation or of any order, injunction, decree or
writ of any court or agency of government or of any provision of its Articles
of Incorporation or By-Laws, (ii) result in the breach or violation of, or
constitute or result in, or with the passage of

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<PAGE>   9



time or the giving of notice would result in, a default or require any consent
under, any indenture, lease, instrument, arrangement, understanding or other
agreement to which the Borrower is a party or by which it or its properties may
be bound or affected or (iii) result in or require the creation or imposition of
any mortgage, pledge, lien, security interest or other charge or encumbrance
upon or with respect to any property now owned or hereafter acquired by the
Borrower, except as provided herein. This Agreement, the Note and the other Loan
Documents when duly executed and delivered, will constitute the valid, legal and
binding obligations of the Borrower, enforceable in accordance with their
respective terms.

         5.3  FINANCIAL CONDITION. The Borrower has no contingent liabilities,
material liabilities for taxes, unusual forward or long-term commitments outside
the ordinary course of business or material unrealized or anticipated losses
from any unfavorable commitments which are material with respect to the
financial condition, affairs, prospects or business of the Borrower except as
reflected or provided for in such financial statements. The financial statements
of Borrower contain no material misstatement and omit no material fact necessary
to make such financial statements not misleading; nor, at this time is Borrower
aware of any event which would have a material adverse impact on the financial
condition of Borrower.

         5.4  LITIGATION. There are no suits, investigations, or proceedings
(whether administrative, bankruptcy or otherwise) pending or threatened against
or affecting the Borrower.

         5.5  APPROVALS. No approvals, licenses, authorizations, consents,
filings, permits or registrations from or with any governmental authority,
department or agency are required for the making and performance by the
Borrower of this Agreement, the other Loan Documents, or the transactions
contemplated hereby or thereby. All approvals, licenses, authorizations,
consents and permits, if any, required by federal, state or local law, statute,
ordinance, rule or regulation for the conduct of Borrower's business have been
obtained, are valid and are in full force and effect with no protests, or
threats thereof, to the issuance or validity of any thereof having been filed
with any governmental office or having been received by the Borrower.

         5.6  TAXES. The Borrower has filed all tax returns which the Borrower
was required to file as of the date hereof in all jurisdictions, whether
federal, state or local, and has paid all taxes that are due and payable,
including interest and penalties, if any.

         5.7  LIENS. Other than as disclosed on EXHIBIT 5.7 hereto, as of the
Closing Date the Borrower will be the lawful owner, free and clear of all liens
and encumbrances, of all property in which it will grant a security interest to
the Bank in accordance with Section 4 hereof, there will be no financing
statements or lien instruments covering all or any portion of said property
which have been executed, recorded or filed, except those in favor of the Bank,
and the security interests granted to the Bank herein and pursuant to the
provisions hereof will be valid, perfected, and of first priority.

         5.8  FULL DISCLOSURE. Any financial statements or projections delivered
to the Bank by Borrower do not nor do this Agreement and the Loan Documents
made or furnished by the Borrower to the Bank in connection with the financial
accommodations contemplated by this Agreement,


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<PAGE>   10


contain any untrue statement of a material fact or omit to state any facts
necessary to make such statements not misleading in light of the circumstances
in which they are made.

         5.9  REGULATION U. The Borrower is not engaged principally, nor as one
of its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock within the meaning of Regulation
U issued by the Board. The proceeds of the Loans made pursuant to this
Agreement will be used by the Borrower only for the purposes set forth Section
5.13 of this Agreement.

         5.10  EMPLOYEE BENEFIT PLANS. Each Plan maintained by the Borrower is
described in EXHIBIT 5.10 to this Agreement is in compliance with ERISA, the
Code and all applicable rules and regulations adopted by regulatory authorities
pursuant thereto. The Borrower has filed all reports and returns required to be
filed by ERISA, the Code and such rules and regulations. Each Plan described in
EXHIBIT 5.10 is an individual account plan as defined in Section 3(34) of ERISA
and, as such, is not subject to the minimum funding rules of ERISA or the
jurisdiction of the Pension Benefit Guaranty Corporation.

         5.11  INVESTMENT COMPANY ACT. The Borrower is not an "investment
company" or a company controlled by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.

         5.12  NATURE OF BUSINESS AND ASSETS. The Borrower is a manufacturer and
assembler of spraying equipment. The Borrower owns no interest in any other
corporation, partnership, joint venture or other business enterprise, except
for a one-third (1/3) ownership in RTM Systems, Inc. The location of Borrower's
principal office, other business locations and all of the Borrower's material
tangible assets and records (including without limitation, the Inventory) is
listed in EXHIBIT 5.12 hereto. In the event that any Collateral will be
attached to real estate, the description of such real estate and the known
owner of record of such real estate shall be furnished to the Bank and appended
to this Agreement as EXHIBIT 5.12-A. If any of the Collateral is attached to
such real estate prior to the perfection of the security interests granted
herein, the Borrower will, on demand, furnish the Bank with a subordination,
disclaimer or disclaimers, executed by all persons having an interest in such
real estate. The Borrower has no subsidiaries, wholly-owned or otherwise, or
affiliates other than principal shareholders, officers and directors. The
Borrower uses no names (fictitious or otherwise), other than its own in the
operation and conduct of its business. The Borrower has no subsidiaries, wholly
owned or otherwise. The Borrower is not in violation of any law, regulation,
order, injunction, decree or writ relating to or affecting the Borrower, its
business, or the conduct thereof, including without limitation, laws relating
to securities, health and safety of employees, environment and pollution
control, pricing, sales and distribution of products and exporting of goods and
materials, collective bargaining rights, equal opportunity in employment and
advancement, political contributions or improper payments the result of which
would have a material adverse effect. The Borrower is not in material default
under any indenture, lease, instrument or other agreement to which the Borrower
is a party or by which it is bound.


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         5.13  USE OF PROCEEDS. The proceeds of the Note will be used by the
Borrower for the following purposes: (i) general corporate and working capital
purposes of Borrower; (ii) to extend a revolving line of credit to Guarantor in
an amount not to exceed Three Hundred Thousand and No/100 Dollars
($300,000.00); and (iii) to extend a loan to Guarantor to allow Guarantor to
fully repay the existing indebtedness of Guarantor in the approximate amount of
Seven Hundred Seventy Thousand and No/100 Dollars ($770,000.00) to Bank One,
Indiana, NA.

         SECTION 6. CLOSING; SECURITY AND CONDITIONS OF LENDING. The closing of
the transactions contemplated by this Agreement ("Closing") shall take place at
the offices of Krieg DeVault Alexander & Capehart in Indianapolis, Indiana or at
such other location as the Bank and the Borrower may mutually agree upon. As
conditions precedent to the advancement of any funds pursuant to this Agreement,
the following matters shall have been completed to the Bank's satisfaction and
the Bank shall have received from the Borrower and the Borrower agrees to
furnish or cause to be furnished to the Bank the following in form and content
satisfactory to the Bank:

         6.1  THE NOTE AND AGREEMENT. The Note and this Agreement, each signed
by duly authorized officers of the Borrower.

         6.2  APPLICATION FOR ADVANCE AND BORROWING BASE CERTIFICATE. A
Borrowing Base Certificate, fully completed and executed by duly authorized
officers of the Borrower.

         6.3  PAYOFF AND RELEASE AGREEMENT. A Payoff and Release Agreement
executed by duly authorized officers of the Borrower and Bank One, Indiana, NA.

         6.4  GUARANTY. A Guaranty executed by the Guarantor granting to the 
Bank an unconditional unlimited continuing guaranty to repay the debt of 
Borrower to the Bank, as well as any and all obligations and liabilities of 
the Borrower to the Bank.

         6.5  SECURITY AGREEMENT. A Security Agreement executed by Guarantor
securing Guarantor's obligations under the Guaranty to the Bank.

         6.6  OFFICER'S CERTIFICATES. Officers' certificates with respect to the
Articles of Incorporation (or Certificate of Incorporation, where appropriate),
By-Laws, resolutions and incumbency of Borrower and Guarantor, in form and
substance acceptable to the Bank.

         6.7  CERTIFICATE OF EXISTENCE OF BORROWER. A certificate of existence
issued by the Secretary of State of Indiana certifying that Borrower is a
corporation existing under the laws of the State of Indiana.

         6.8  CERTIFICATE OF GOOD STANDING OF GUARANTOR. A certificate of good
standing issued by the Secretary of State of Delaware certifying Guarantor is a
corporation existing under the laws of the State of Delaware.


                                      -11-


<PAGE>   12




         6.9  EVIDENCE OF INSURANCE. Certified copies of insurance policies
evidencing insurance coverage as required to be maintained under Loan Documents
by the Borrower and the Guarantor and Lender's Loss Payee Endorsements in form
acceptable to the Bank, assigning the proceeds of such policies to the Bank to
secure repayment of the Loans, as well as any and all other obligations and
liabilities of the Borrower to the Bank.

         6.10  OPINION OF COUNSEL. An opinion of counsel to Borrower and
Guarantor in form and substance acceptable to the Bank.

         6.11  COLLATERAL ASSIGNMENT AND PLEDGE AGREEMENT. A Collateral
Assignment of Pledge Agreement executed by the Guarantor and Bank collaterally
assigning Guarantor's interest in the Promissory Note in the amount of Four
Million and No/100 Dollars ($4,000,000.00) dated as of April 11, 1997, made by
American in favor of Guarantor, that certain Security Agreement dated as of
April 11, 1997, executed by American, that certain Unconditional Unlimited
Continuing Guaranty dated as of even date herewith by Raven in favor of
Guarantor, that certain Security Agreement dated as of even date herewith
executed by Raven, and all other documents evidencing or securing the
indebtedness of American to Guarantor.

         6.12  COPIES OF AMERICAN AND RAVEN DOCUMENTS. The original copies of
all credit and collateral documents executed by American and Raven associated
with the credit facilities extended to American by Guarantor, including,
without limitation, the original promissory note executed by American for the
benefit of Guarantor duly endorsed to the Bank.

         6.13  FINANCING STATEMENTS. UCC-1 Financing Statements, in form and
substance acceptable to Bank, to be filed in the Indiana Secretary of State's
Office, Uniform Commercial Code Division, the Marion County, Indiana, Recorder's
Office, and the Ohio Secretary of State's office.

         6.14  COMMITMENT FEE. Payment of the commitment fee and other
reimbursable expenses to the Bank pursuant to Section 3 hereof.

         6.15  ASSIGNMENT OF LIFE INSURANCE AS COLLATERAL. Assignment of Life
Insurance as Collateral, in form and substance acceptable to Bank, and a copy of
the life insurance policy insuring the life of Dwight D. Goodman in an amount
not less than One Million and No/100 Dollars ($1,000,000.00).

         6.16  FINANCIAL STATEMENTS. Certain financial statements of Borrower,
Guarantor, American and Raven as requested in advance by the Bank.

         6.17  TITLES. The original titles to all Machinery and Equipment, the
ownership of which is evidenced by a Certificate of Title, if any, to permit
Bank to reflect its lien thereon.

         6.18  SUBSEQUENT ADVANCES. At the time of each advance under the Line
of Credit, no Event of Default or Unmatured Event of Default shall have
occurred and be continuing, and the representations and warranties contained in
this Agreement, including without limitation those in

                                      -12-


<PAGE>   13


Section 5 hereof, shall be true and correct as of the date of the advance
except as previously disclosed in writing to the Bank.

         6.19  EXTENSION ON EMPLOYMENT CONTRACT. Evidence reasonably
satisfactory to the Bank that the Borrower has extended the employment contract
of Dwight D. Goodman at least through May 1, 1998.

         6.20  OTHER INFORMATION. Such other certificates, statements, documents
and information as the Bank may reasonably request in connection with this
Agreement.

         SECTION 7. AFFIRMATIVE COVENANTS. Unless the Bank otherwise consents in
writing and until payment in full of the Loans and fulfillment of all other
obligations and liabilities of the Borrower to the Bank, the Borrower agrees as
follows:

         7.1  PAYMENT OF LOANS. The Borrower agrees to repay the Loans in
accordance with the terms and conditions of this Agreement and the Note.

         7.2  FINANCIAL STATEMENTS. The Borrower agrees that it shall furnish to
the Bank:

                  7.2.1  As soon as available and in no event later than Twenty
                  (20) days after the close of each monthly period of each
                  fiscal year, a Receivables aging schedule and a Borrowing Base
                  Certificate, each as of the end of such period and certified
                  as accurate by the Borrower's duly authorized representative.

                  7.2.2  As soon as available and in no event later than Twenty
                  (20) days after the close of each monthly period of each
                  fiscal year, an internally prepared balance sheet and a
                  statement of income, expenses and retained earnings compiled
                  as of the end of such period and on a year to date basis
                  prepared in accordance with GAAP and certified as accurate by
                  the Borrower's duly authorized representative, and with such
                  other financial information as the Bank may reasonably
                  request from time to time.

                  7.2.3  As soon as available and in no event later than Ninety
                  (90) days following the close of each fiscal year of the
                  Borrower, the following: (a) consolidated financial statements
                  of Guarantor prepared on a consistent basis, in accordance
                  with GAAP and audited by independent certified public
                  accountants acceptable to the Bank; and (b) supplemental,
                  consolidating balance sheets, income statements and retained
                  earnings for the most recent period of Guarantor and each of
                  Guarantor's subsidiaries.

                           The supplemental consolidating data will be subjected
                  to auditing procedures performed by the independent public
                  accountants in connection with their audit of the consolidated
                  financial statements of Guarantor. The independent public
                  accountants preparing such financial information will not be
                  engaged by Guarantor 







                                      -13-


<PAGE>   14


                  or Borrower to express a separate opinion associated with the
                  financial statements of each subsidiary of Guarantor.

                  7.2.4  At the time of submission of each of the financial
                  statements requested by this Section 7.2, a Certificate of No
                  Default in the form of EXHIBIT 1.12 hereto, dated as of the
                  date of submission.

                  7.2.5  Such other information as the Bank may reasonably
                  request from time to time.

         7.3  ADVERSE CHANGES AND LITIGATION. The Borrower shall give notice in
writing to the Bank of (a) the occurrence of any Event of Default or Unmatured
Event of Default or of any other change or occurrence which could have a
material adverse effect on its financial condition or business, promptly but not
later than Ten (10) calendar days after occurrence; (b) all litigation or any
threat thereof and all proceedings and investigations or any threat thereof
before or by any governmental or regulatory agencies affecting the Borrower, any
of which, if adversely determined, may have a material adverse effect on the
financial condition or business of the Borrower, promptly but not later than
Five (5) days of service of process or other notification or threat of such
litigation and/or proceedings; and (c) the actual knowledge of the occurrence of
any facts which would cause the representations and warranties set forth in
Section 5 hereof to become untrue or materially misleading.

         7.4  INSURANCE. The Borrower shall keep adequately insured in
appropriate amounts (but not less than the aggregate of the principal balance
plus accrued interest thereon outstanding from time to time under the Note and
under the Agreement, and, in any event, not less than REPLACEMENT VALUE of the
Collateral and in amounts sufficient to prevent the Borrower or the Bank from
becoming a co-insurer of any loss by financially sound and reputable insurers)
all property of a character usually insured by entities engaged in the same or
similar business, similarly situated, against loss or damage by fire, extended
coverage perils and business interruption, as well as such other risks and
liabilities customarily insured against by such businesses, and shall furnish
evidence thereof to the Bank. Each policy in respect to the insurance required
by this Section 7.4 shall (a) bear a first lien holder endorsement in favor of
the Bank and in form and in substance satisfactory to the Bank in its sole
discretion, providing that any loss thereunder involving the Collateral or the
insured property shall be made payable to the Bank and the Borrower, as their
interests may appear, notwithstanding any failure by the Borrower to pay any
premium, fee of other amount with respect to such policy, and (b) contain
agreements by the insurer that it shall give to the Bank at least Thirty (30)
days prior written notice of cancellation and that any loss thereunder in
respect of the property shall be payable notwithstanding any occupation or use
for purposes more hazardous than permitted by the terms of such policy, any
breach of any warranty, representation or covenant contained in such policy,
any act or neglect of the Borrower, or any foreclosure or other proceedings or
notice of sale or of any change in title or ownership. Within Thirty (30) days
after written notice from Bank, Borrower shall obtain such additional insurance
as Bank may request.


                                      -14-


<PAGE>   15




         7.5  DEBTS AND TAXES. The Borrower shall pay and discharge all current
obligations in a manner consistent with commercially reasonable practice,
including without limitation, trade accounts payable and all taxes, assessments,
and governmental charges and levies imposed upon it or upon its income or
profits or upon any of its property prior to the date on which penalties attach;
provided, however, the Borrower shall not be required to pay any such
obligation, tax, assessment, charge or levy, the payment of which is being
contested in good faith and by proper proceedings if a reserve is maintained
with respect thereto in accordance with GAAP and in amounts reasonably deemed
adequate by Bank.

         7.6  EXISTENCE. The Borrower shall preserve and maintain its corporate
existence and good standing as well as all of its rights, privileges, permits
and licenses; shall conduct its business in an orderly and efficient manner; and
shall comply with all material requirements of applicable laws, statutes,
ordinances, rules and regulations.

         7.7  ACCESS TO BOOKS AND INSPECTION. The Borrower shall keep proper
books of record and account for itself and shall give any representative of the
Bank access to, and permit him to examine, copy or make extracts from, any and
all of its books, records and documents, to inspect any of its properties and to
discuss its affairs, finances and accounts with any of its principal officers
and with the certified public accountant reviewing the financial statements
referred to in Section 7.2 hereof, all at such times and as often as may
reasonably be requested.

         7.8  COMPLIANCE WITH ERISA. The Borrower shall at all times meet the
minimum funding and reporting requirements of ERISA with respect to any Plan of
the Borrower which is covered by ERISA, and shall deliver or cause to be
delivered to the Bank such information concerning the Borrower's compliance
therewith as the Bank may reasonably request. Immediately upon becoming aware
of the occurrence of any (a) "reportable event" (as such term is defined in
Section 4043 of ERISA), or (b) "prohibited transaction" (as such term is
defined in Section 406 or described in Section 3003(a) of ERISA) in connection
with any such Plan, the Borrower shall give written notice to the Bank
specifying the nature thereof, what action the Borrower is taking or proposes
to take with respect thereto, and when known, any action taken by the Internal
Revenue Service, the Department of Labor or the Pension Benefit Guaranty
Corporation with respect thereto.

         7.9  REIMBURSEMENT OF EXPENSES AND INDEMNIFICATION. The Borrower shall
reimburse the Bank for all costs and expenses, including reasonable attorneys'
fees, incurred by the Bank in the collection of the Loans as well as all other
obligations and liabilities of the Borrower to the Bank as a result of the
occurrence of an Event of Default hereunder or in the pursuit of any remedy of
the Bank available to it under or pursuant to this Agreement or any of the
other Loan Documents. The Borrower shall not, however, be responsible for
payment of the costs and expenses relating to the Bank's field examination of
the Borrower's books and records. The Borrower shall at all times protect,
indemnify, defend and save harmless the Bank from and against any and all
claims, actions, suits and other legal proceedings, and liabilities, damages,
costs, interest, charges, filing fees and taxes, expenses relating to title,
stamp, mortgage or other taxes and liabilities for delays in paying them,
counsel fees and disbursements and other expenses and penalties of which the
Bank may at any time sustain or incur by reason of or in consequence of or
arising out of the execution and

                                      -15-


<PAGE>   16



delivery of, the consummation of the transactions contemplated by, or the
amendment or modification of, or any waiver or consent under or in respect of
the Agreement or any of the Loan Documents including without limitation the
Note. The provisions of this Section 7.9 shall survive the payment of the Note
and the termination of the Agreement.

         7.10  GRANT OF SECURITY INTERESTS. Except with respect to the liens
permitted in Section 5.7 hereof, the Borrower has granted to the Bank a first
priority security interest in and to the Collateral in which the Borrower has an
interest, pursuant to and under the terms of this Agreement, wheresoever
located, whether now owned or existing or hereafter acquired or arising, and all
proceeds thereof, which security interests shall continue in full force and
effect until all indebtedness, obligations and liabilities of the Borrower to
the Bank (whether arising out of the Agreement or any other Loan Documents or
otherwise and also including without limitation all future advances) shall have
been fully satisfied. The Borrower will take any and all steps requested by the
Bank to perfect, maintain and protect the Bank's security interest in any and
all such assets.

         7.11  SECURITIES FILINGS OF GUARANTOR. The Borrower shall cause the
Guarantor to submit to the Bank all financial reports and other materials filed
with the Securities Exchange Commission or any other similar governmental entity
for distribution to the shareholders of the Guarantor.

         7.12  FINANCIAL COVENANTS. During the term of this Agreement and while
any portion of the Loans or the other obligations of the Borrower are
outstanding, the Borrower shall comply with the following financial covenants:

                  7.12.1  WORKING CAPITAL. Maintain minimum Working Capital at
                  all times of not less than One Million and No/100 Dollars
                  ($1,000,000.00).  

                  7.12.2  RATIO OF TOTAL LIABILITIES TO TANGIBLE NET WORTH.
                  Maintain a ratio of Total Liabilities to Tangible Net Worth
                  at all times in an amount not to exceed 1.20:1.00.

         7.13  DEPOSITORY RELATIONSHIP. The Bank will be the principal
depository in which substantially all of the Borrower's funds are deposited,
and the principal bank account of the Borrower, as long as this Agreement is in
effect and the Loans are outstanding. Borrower will grant the Bank the first
and last opportunity to provide corporate banking services required by the
Borrower, including, without limitation, payroll and cash management.

         7.14  LIMITATION ON COLLATERAL. Borrower shall submit from time to time
upon request of the Bank such evidence as the Bank may reasonably request that
neither American nor Raven own nor have either of them owned any Collateral
included within the Borrowing Base while any indebtedness is outstanding under
the Line of Credit.

         7.15  FURTHER ASSURANCES. The Borrower shall, at its cost and expense,
upon reasonable request of the Bank, duly execute and deliver, or cause to be
duly executed and delivered to the Bank, such further instruments and to do and
cause to be done such further acts as may be necessary

                                      -16-


<PAGE>   17



or proper in the opinion of the Bank to carry out more effectually the
provisions and purposes of this Agreement.

         SECTION 8.  NEGATIVE COVENANTS. Unless the Bank otherwise consents in
writing, until payment or performance in full of the Note and all other
obligations and liabilities of the Borrower to the Bank, the Borrower agrees as
follows:

         8.1  LIENS. The Borrower shall not mortgage or otherwise encumber any
of its assets to anyone other than the Bank without the Bank's prior written
consent except:

                  8.1.1  Those liens required by this Agreement;

                  8.1.2  Liens, pledges or deposits for workmen's compensation,
                  unemployment insurance, old age benefits or social security
                  obligations, statutory obligations or other similar charges,
                  liens for current taxes or assessments not yet due or which
                  are payable without penalty or the validity of which is being
                  contested in good faith and by appropriate proceedings upon
                  stay of execution of the requirement thereof and a reserve is
                  maintained with respect thereto in accordance with GAAP and in
                  amounts deemed reasonably adequate by the Bank, or deposits
                  required to be made in the ordinary course of business;

                  8.1.3  The pledge of assets for the purpose of securing an
                  appeal or stay or discharge in the course of any legal
                  proceeding, or liens for judgments or awards in respect of
                  which the Borrower shall be prosecuting an appeal or
                  proceeding for review in good faith so long as execution is
                  not levied thereunder and provided that an adequate reserve
                  in accordance with GAAP for the payment of such judgments or
                  awards is maintained; or

                  8.1.4  Purchase money security interests granted to secure not
                  more than seventy-five percent (75%) of the purchase price of
                  assets acquired by the Borrower; or

                  8.1.5  Those liens described on attached EXHIBIT 5.7.

         8.2   SALE OF ASSETS; CONSOLIDATION; MERGER; DIVIDENDS; CAPITAL
STRUCTURE. The Borrower shall not:

                  8.2.1  Make any material change in the nature of its business,
                  or sell, lease, transfer, exchange, or otherwise dispose of
                  all or a substantial part of its properties and/or assets to
                  any person, firm, corporation or other entity except for sales
                  of assets in the ordinary course of business; or

                  8.2.2  Consolidate with, merge into, acquire or otherwise
                  combine with any other corporation or other business entity or
                  division; or


                                      -17-


<PAGE>   18




                  8.2.3  Declare or pay any dividend or distributions (including
                  stock dividends) on its capital stock; or

                  8.2.4  Alter or amend its capital stock or sell or issue new
                  stock, or purchase, redeem or otherwise acquire for value any
                  of its outstanding capital stock.

         8.3  LOANS AND INVESTMENTS. The Borrower shall not make or permit to
exist any loans or advances to or investments in any person, firm, corporation
or other entity except:

                  8.3.1  an advance to Guarantor in an amount not to exceed
                  Seven Hundred Seventy Thousand and No/100 Dollars
                  ($770,000.00) (unless the Bank agrees to a greater amount in
                  writing) for purposes of allowing Guarantor to repay existing
                  indebtedness to Bank One, Indiana, NA;

                  8.3.2  a revolving loan to Guarantor in an amount not to
                  exceed Three Hundred Thousand and No/100 Dollars
                  ($300,000.00), which shall be used by Guarantor to finance
                  the working capital needs of American either directly or by
                  the purchase of the capital stock of Raven.

                  8.3.3  Investments in direct obligations of the United States
                  Government maturing within one year of acquisition thereof;

                  8.3.4  Investments in certificates of deposit or savings
                  accounts of a bank (other than the Bank), with a maturity of
                  no more than one year and in amounts of not more than
                  $100,000 in any such bank, and with respect to the Bank, with
                  any maturity and in any amounts;

                  8.3.5  Investments in money market funds, commercial paper of
                  corporations rated A-1 by Standard and Poor's Corporation or
                  P-1 by Moody's Investors Service, Inc. or of any affiliate of
                  the Bank, and in obligations insured directly or indirectly by
                  the government of the United States; or

                  8.3.6  Deferred payments by customers of the Borrower.

                  8.3.7  Intercompany transfers to Guarantor in the annual
                  aggregate amount of not greater than Two Hundred Fifty
                  Thousand and No/100 Dollars ($250,000.00) provided Borrower
                  provides to Bank supporting invoices and other documentation
                  relating the expenses of Guarantor to be paid with such
                  advances.

         8.4  FISCAL YEAR.  The Borrower shall not change its fiscal year.

         8.5  MANAGEMENT. The Borrower shall not permit any material change in
its day-to-day executive management personnel to occur or to allow any material
change in the equity ownership of the Borrower.

                                      -18-


<PAGE>   19



                  
         8.6  INDEBTEDNESS. The Borrower shall not become liable, directly or
indirectly, as guarantor or otherwise for any obligation except for the
endorsement of commercial paper for deposit or collection in the ordinary course
of business; further, Borrower will not incur, create, assume or permit to exist
any indebtedness except: (a) the Loans; (b) existing indebtedness as shown on
the Borrower's current financial statements to be permitted to exist after the
Closing; and (c) trade indebtedness incurred in the ordinary course of business;
and (d) purchase money financings as contemplated in Section 8.1.4 hereof.

         SECTION 9. EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall be deemed a default of this Agreement:

         9.1  DEFAULT IN PAYMENT. The Borrower shall fail to pay any part or all
of the principal or interest required by this Agreement and the Note within
five (5) days after becoming due and payable.

         9.2  INSOLVENCY; JUDGMENTS. Any proceedings shall be commenced in a
court of competent jurisdiction by or against the Borrower seeking an order (i)
for relief under the Bankruptcy Code or establishing the insolvency of the
Borrower, (ii) appointing a trustee, receiver or other custodian of the
Borrower or of any substantial part of Borrower's property, or (iii) approving
or effecting an arrangement for the liquidation, dissolution, winding up or
reorganization of the Borrower pursuant to the Bankruptcy Code, or any other
law for the relief of debtors, or seeking judicial modification or alteration
of the rights of the Bank hereunder or under the Note; and any such proceedings
described in clauses (i), (ii), or (iii) shall not be dismissed, any such
receiver, trustee or other custodian shall not be discharged, or jurisdiction
of the court shall not be relinquished or vacated or stayed on appeal or
otherwise within Thirty (30) days from commencement of any such proceedings or
the Borrower shall (iv) file any petition, commence any proceedings or take or
consent to any other action seeking any such judicial order described in
clauses (i), (ii) or (iii) preceding, or (v) make an assignment for the benefit
of its creditors, or (vi) become insolvent, or admit in writing the inability
to pay its debts and obligations, as they become due, or (vii) have failed
within, Thirty (30) days to pay or otherwise discharge any one or more
judgments or attachments against it exceeding Ten Thousand and No/100 Dollars
($10,000.00) in the aggregate, except those that are being contested in good
faith and enforcement or execution of which has been stayed and for which
adequate reservation accordance with GAAP for the payment thereof are
maintained.

         9.3  MISREPRESENTATION. Any representation or warranty made by the
Borrower in this Agreement or in any financial statements, instruments,
agreements, certificates or reports furnished to the Bank in connection herewith
proves to be untrue or misleading in any material respect as of the date it is
made or deemed to have been made.

         9.4  OTHER DEFAULTS. The Borrower shall default in the performance of
any covenant, obligation or agreement contained herein or in any of the other
Loan Documents, which default, other than the defaults set forth in Section 9.1
hereof or violation of the negative covenants set forth

                                      -19-


<PAGE>   20



in Section 8 hereof, if subject to cure, shall remain uncured for Thirty (30)
days after the occurrence thereof.

         9.5  DEFAULT OF OTHER OBLIGATIONS. The Borrower shall fail to pay any
material indebtedness to or perform any other obligation under any material
agreement to any other firm, party or person, and such failure shall continue
beyond any applicable grace period and result in the acceleration of such
indebtedness or obligation or the Borrower shall suffer to exist beyond any
applicable grace period any other event of default under any material agreement
binding upon the Borrower unless such event of default has been waived in
writing by the appropriate party or parties to such agreement.

         9.6  ADVERSITY OF GUARANTOR. The bankruptcy of the Guarantor, the
revocation of the repayment and performance guaranty by the Guarantor or the
occurrence of any other event adversely affecting the financial capabilities of
the Guarantor.

         9.7  ADVERSE CHANGES. Any material adverse change in the Borrower's
business, financial condition or management, as determined by the Bank its sole
and exclusive discretion.

         9.8  LOSS OF COLLATERAL. The loss, theft, substantial damage to or
destruction of any Collateral for which there is either no insurance coverage
or for which, in the sole and exclusive opinion of the Bank, there is
insufficient coverage, or the making or filing of any lien, except permitted
liens, levy, or execution on, or seizure, attachment or garnishment of, any
Collateral.

         9.9  INSECURITY. The Bank at any time and for any reason shall believe
in good faith that the prospect of repayment of the Loans or any part thereof
and the Borrower's compliance with the terms of the Loan Documents is or will
be impaired.

         9.10  INVALIDITY OF LOAN DOCUMENTS. Any material provision of any of
the Loan Documents shall at any time and for any reason cease to be valid and
binding upon the Borrower, or shall be declared to be null and void, or the
validity or enforceability thereof shall be contested by the Borrower, or
proceedings shall be commenced by any governmental agency or authority having
jurisdiction over the Borrower seeking to establish the invalidity or
unenforceability thereof, or the Borrower shall improperly deny that it has any
or further liability or obligation under this Agreement or the Loan Documents.

         SECTION 10. RIGHTS ON DEFAULT. Upon the occurrence of an Event of
Default and at any time thereafter (said Event of Default not having previously
been cured), the Bank shall have the remedies of a secured party under the
Uniform Commercial Code as amended and in effect in Indiana from time to time.
In its sole discretion, Bank may, after an Event of Default has occurred, in its
name or the Borrower's or otherwise, (i) notify any Account Debtor or obligor of
any Receivable, contract, document, instrument, chattel paper or general
intangible included in the Collateral to make payment directly to the Bank at
such address as the Bank may direct, (ii) demand, sue for, collect or receive
any money or property at any time payable or receivable on account of, or in
exchange for, or make any compromise or settlement deemed desirable by the Bank
with 



                                      -20-


<PAGE>   21



respect to, any Collateral, and/or extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of, or release, any
Collateral or obligations of the Borrower to the Bank, all without notice to or
consent by the Borrower and without otherwise discharging or affecting the
Collateral or the security interest granted herein, and/or (iii) pay any amount
or do any act required of the Borrower hereunder and which the Borrower fails
to do or pay, with any such payment being deemed an advance by the Bank to the
Borrower payable on demand together with the interest at the highest rate then
payable on the Note. Upon the occurrence of an Event of Default, the Borrower
at its expense shall make the Collateral, and any documentation relating
thereto, available to the Bank at a place and time designated by the Bank which
is reasonably convenient to the Borrower. The Bank may at any time and from
time to time, with or without judicial process or the aid and the assistance of
others enter upon any premises in which or on which any Collateral may be
located, and without resistance or interference by the Borrower's or any person
acting for, and on behalf of, or under the rights of the Borrower, take
possession of the Collateral and/or dispose of any Collateral on any such
premises, and/or remove any Collateral from any such premises for the purpose
of effecting sale or other disposition thereof (and if any of the Collateral
consists of motor vehicles the Bank may use the Borrower's license plates),
and/or sell, resell, lease, assign and deliver, grant options for or otherwise
dispose of any Collateral in its then condition or following any commercially
reasonable preparation or processing, at public or private sale or proceedings
or otherwise, by one or more contracts, in one or more parcel or lots, at the
same or different times, with or without having the Collateral at the place of
sale or other disposition, for cash and/or credit, and upon such terms, at such
places and times and to such persons as the Bank in its discretion deems best,
all without demand, notice or advertisement whatsoever, except as may be
required by law. If any Collateral is sold by the Bank upon credit or for
future delivery, the Bank shall not be liable for the failure of the purchaser
to pay for any such Collateral and in such event the Bank may resell such
Collateral. If any notification of disposition of all or any portion of the
Collateral is required by law, such notification shall be deemed reasonably and
properly given if mailed as provided in Section 13.11 of this Agreement at
least Five (5) business days prior to such disposition, postage prepaid, to the
Borrower at its latest address appearing on the records of the Bank. Borrower
agrees that it shall not be entitled to relief from valuation and appraisement
laws, and Borrower waives any and all rights thereto. Any cash proceeds of any
disposition of the Collateral actually received by the Bank may be applied by
the Bank to the payment of the expenses of retaking, holding, preparing for
sale and selling, which shall include reasonable attorneys' fees and legal
expenses and disbursements and any balance of such proceeds shall be applied by
the Bank toward the payment of the obligations to the Bank. The surplus, if
any, shall be paid to the Borrower, subject to any duty of the Bank imposed by
law to the holder of any subordinate security interest in the Collateral known
to the Bank. The Bank shall have a duty to account to Borrower only if a
surplus remains after liquidation of the Collateral and application of the
proceeds thereof as described above and as provided in the Uniform Commercial
Code as it is in effect from time to time in Indiana. The Bank may appropriate,
set off and apply to the payment of the obligations, any Collateral in, or
coming into, the possession of the Bank or any of its affiliates or agents,
without notice to the Borrower and in such manner as the Bank may in its
discretion determine.

         SECTION 11.  SET OFF. If any Event of Default occurs hereunder, any
indebtedness from the Bank to the Borrower may be set off and applied toward
the payment of the Note and/or any

                                      -21-


<PAGE>   22


other liability of the Borrower to the Bank, whether or not the Note or other
liability, or any part thereof, shall then be due.

         SECTION 12. [RESERVED]

         SECTION 13.  GENERAL PROVISIONS.

         13.1  RIGHTS AND REMEDIES OF BANK. No delay or omission of the Bank to
exercise any right or power hereunder shall impair such right or power or be
construed as a waiver of any default or as acquiescence therein; and any single
or partial exercise of any such right or power shall not preclude other or
further exercise thereof or the exercise of any other right or power; and no
waiver shall be valid unless in writing signed by the Bank, and then only to the
extent specifically set forth in such writing. All rights and remedies hereunder
and under any of the other Loan Documents or by law afforded shall be cumulative
and all shall be available to the Bank until the Note and all other liabilities
of the Borrower to the Bank have been paid in full and all obligations of the
Borrower to the Bank have been satisfied.  

         13.2 APPOINTMENT. To effectuate the terms and provisions hereof, the
Borrower hereby designates and appoints the Bank and each of its designees or
agents as attorney in fact of the Borrower, irrevocably and with power of
substitution, with authority upon the occurrence of an Event of Default, to:
receive, open and dispose of all mail addressed to the Borrower and notify the
Post Office authorities to change the address for delivery of mail addressed to
the Borrower to such address as the Bank may designate, endorse the name of the
Borrower on any notes, acceptances, checks, drafts, money orders, instruments or
other evidences of Collateral that may come into the Bank's possession, sign the
name of the Borrower on any invoices, documents, drafts against or notices to
Account Debtors or obligors of the Borrower, assignments and requests for
verification of accounts, execute proofs of claim and loss, endorsements,
assignments or other instruments of conveyance or transfer, adjust and
compromise any claims under insurance policies or otherwise, execute releases,
and do all other acts and things necessary or advisable in the sole and
exclusive discretion of the Bank to carry out and enforce this Agreement, or the
Borrower's obligations to the Bank. All acts done under the foregoing
authorization are hereby ratified and approved and neither the Bank nor any
designee or agent thereof shall be liable for any acts of commission or
omission, for any error of judgment or for any mistake of fact or law unless
such action is taken by the Bank in wilful disregard of the Borrower's rights
under this Agreement or for any act or omission involving gross negligence. This
power of attorney being coupled with an interest is irrevocable while any
indebtedness shall remain unpaid.

         13.3  FINANCING STATEMENTS; ADDITIONAL DOCUMENTS. The Borrower
authorizes the Bank to execute and file one or more financing statements, this
Agreement and any other documents, instruments or statements of any kind on its
behalf and without the signature of the Borrower in those public offices deemed
necessary by the Bank in its sole discretion to perfect and continue the
perfection of its security interest in the Collateral and to protect, defend
and further assure the grant, validity and perfection thereof. In addition, the
Borrower will, at its expense deliver or cause to be delivered such other
documents, as the Bank may request to secure payment of the indebtedness

                                      -22-


<PAGE>   23



referred to herein or to further perfect, protect and defend the security
interest granted herein, including, without limitation, any certificate or
certificates of title to the Collateral with the security interest of the Bank
noted thereon.

         13.4  LITIGATION. In the event of any litigation with respect to any
matter connected with this Agreement, the Borrower's obligations to the Bank or
the Collateral, Borrower hereby irrevocably consents to the jurisdiction of the
Courts of the State of Indiana and of any Federal Court located in such State in
connection with any action or proceeding arising out of or relating to such
obligations, this Agreement, the Loan Documents or the Collateral. Borrower
hereby waives personal service of any process in connection with any such action
or proceeding and agrees that the service thereof may be made by certified or
registered mail directed to Borrower at any address of Borrower set forth in
this Agreement or appearing on the books and records of the Bank. Borrower so
served shall appear or answer to such process within Thirty (30) days after the
mailing thereof. Should Borrower so served fail to appear or answer within said
Thirty (30) day period, Borrower shall be deemed in default and judgment may be
entered by Bank against Borrower for the amount or such other relief as may be
demanded in any process so served. In the alternative, in its sole  
discretion, the Bank may effect service upon Borrower in any other form or
manner permitted by law.

         13.5  WAIVER OF VARIOUS RIGHTS. The Borrower hereby waives all rights
of valuation and appraisement in connection with or arising out of any of the
Loan Documents including without limitation this Agreement and the Note, or the
validity, protection, interpretation, collection or enforcement thereof or any
other claim or dispute howsoever arising between the Borrower and the Bank. The
Borrower waives acceptance or notice of acceptance hereof and agrees that the
Agreement, the Note, and all of the other Loan Documents shall be fully valid,
binding, effective, and enforceable as of the date hereof even though this
Agreement and any one or more of the other Loan Documents which require the
signature of the Bank, may be executed by or on behalf of the Bank on other
than the date hereof. The Borrower waives notice of presentment, notice of
dishonor, demand, protest of all instruments included in or evidencing the
Borrower's obligations to the Bank or Collateral. Borrower further waives any
right to require the Bank to marshall any assets in favor of the Borrower, any
other creditor of the Borrower or any other person claiming any rights by or
through the Borrower to any of the Collateral in which the Bank has a security
interest. THE BANK AND THE BORROWER HEREBY WAIVE THE RIGHT OF TRIAL BY JURY OF
ANY MATTERS ARISING OUT OF THIS AGREEMENT, THE LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY.

         13.6  BANK'S RESPONSIBILITIES. Beyond the exercise of reasonable care
to assure the safe custody of the Collateral while held hereunder, the Bank
shall have no duty or liability to preserve rights pertaining thereto, and
shall be relieved of all responsibility for the Collateral upon surrendering it
to the Borrower or Borrower's designee.

         13.7  SURVIVAL. All representations, warranties, and covenants of the
Borrower herein or in any certificate, agreement or other instrument delivered
by it or on its behalf under this Agreement shall be considered to have been
relied upon by the Bank and shall survive the making

                                      -23-


<PAGE>   24


of Loans and delivery to the Bank of the Note. All statements in any such
certificate or other instrument shall constitute warranties and representations
hereunder by the Borrower, as the case may be.

         13.8  SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the Borrower and the Bank and their respective
successors and assigns; provided, however, that the Borrower may not assign
(whether by operation of law or otherwise) its rights hereunder without the
prior written consent of the Bank. The provisions of this Agreement are intended
to be for the benefit of any holder, from time to time, of the Note and shall be
enforceable by such holder, whether or not an express assignment to such holder
of rights under this Agreement has been made by the Bank, its successors or
assigns.

         13.9  GOVERNING LAW; SEVERABILITY. This Agreement and the other Loan
Documents have been or are being executed and delivered and are intended to be
performed in the State of Indiana and shall be governed, construed and enforced
in all respects in accordance with the laws of the State of Indiana. Whenever
possible, each provision of this Agreement or any related agreement or 
instrument shall be interpreted in such manner as to be effective and valid
under applicable law, but if any such provision 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 or any related agreement or
instrument.

         13.10  HEADINGS; EXHIBITS. The section headings used herein are for
convenience only and shall not be read or construed as limiting the substance
or generality of this Agreement. All agreements and instruments attached hereto
as exhibits and referred to herein, including the executed originals thereof,
shall be deemed a part of the Agreement.

         13.11  NOTICES. Any notice, request, demand, waiver, consent, approval
or other communications which is required or permitted hereunder shall be in
writing and shall be deemed given only if delivered personally or by a
reputable courier service of national standing (with all expenses of delivery
being prepaid) or sent by telegram, facsimile transmission (with confirming
hard copy by first class mail sent within twenty-four (24) hours of such
transmission) or by registered or certified mail, postage prepaid, as follows:

                If to Bank:                   NBD Bank, N.A.
                                              One Indiana Square
                                              Mail Station 7130
                                              Indianapolis, Indiana  46266
                                              Attention:  Edward R. Salm

                With a required copy to:      Krieg DeVault Alexander & Capehart
                (which shall not              One Indiana Square, Suite 2800
                constitute notice) to:        Indianapolis, Indiana  46204-2017
                                              Attention:  Bradley S. Fuson, Esq.
                                              Telecopy:  (317) 636-1507


                                      -24-


<PAGE>   25



                 If to Borrower:              Glas-Craft, Inc.
                                              5845 West 82nd Street, Suite 102
                                              Indianapolis, Indiana  46278
                                              Attention:  Dwight D. Goodman

                 With a required copy         Michael A. Ellis, Esq.
                 (which shall not             Kahn, Kleinman, Yanowitz & Arnson
                 constitute notice) to:       2600 Tower at Erieview
                                              Cleveland, Ohio  44114-1824

or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as of
the earlier of actual receipt of three (3) Banking Days after being so
delivered, telegraphed, transmitted or mailed.

         13.12  BANKING DAY. If any installment of principal or interest on the
Note falls due on a day which is not a Banking Day, the due date shall be
extended to the next succeeding Banking Day and such payment will be payable at
the applicable rate of interest for the period of such extension.

         13.13  MODIFICATION, COUNTERPARTS. This Agreement may be amended,
modified, renewed or extended only by written instrument executed in the manner
of its original execution. This Agreement may be signed in any number of
counterparts each of which shall be considered an original with the same effect
as if the signatures thereto and hereto were upon the same instrument.

         13.14  CERTIFICATES. Unless otherwise expressly provided, this
Agreement and the other Loan Documents, or any notice, request, certificate or
statement of the Borrower required or permitted to be made or given under any
provisions hereof shall be sufficient when signed by the President or Secretary
of the Borrower. The Bank may rely upon the certificate of the Secretary of the
Borrower as to the adoption of resolutions by the Board of Directors of the
Borrower or as to the incumbency and authority of those officers signing on
behalf of the Borrower.

         13.15  INTEREST RATE LIMITATIONS. Notwithstanding anything contained
herein to the contrary, the obligation of the Borrower to make payments of
interest shall be subject to the limitation that payments under the law or laws
applicable to the Bank limiting rates of interest which may be charged or
collected by the Bank. Any such payments of interest which are not made as a
result at the limitation referred to in the preceding sentence shall be made by
the Borrower to the Bank on the earliest payment date or dates on which the
receipt thereof would be permissible under the laws applicable to the Bank
limiting rates of interest which may be charged or collected by the Bank.

         13.16  OTHER AGREEMENTS. This Agreement and the other Loan Documents
shall be construed consistently with each other in order to best effectuate the
intent of the Borrower and the Bank in entering into the relationships
contemplated by all these agreements. The agreements referenced herein
constitute the sole and entire agreement of the parties and no statement or
promise has been made with respect to the subject matter of these agreements
other than as expressed herein.



                                      -25-


<PAGE>   26



In the event of a conflict between the terms of this Agreement and any of the
other Loan Documents, the provisions of this Agreement shall control, except
with respect to the Note, those terms shall control.

         13.17  NO PARTNERSHIP. Nothing contained herein or in any of the Loan
Documents is intended to create or will be construed to create any relationship
between the Bank and the Borrower other than as expressly set forth herein or
therein and will not create any joint venture, partnership or other
relationship.

         13.18  PARTICIPATIONS. Notwithstanding any other provision of this
Agreement, the Borrower understands that the Bank may at any time enter into
participation agreements with one or more participating banks whereby the Bank
will allocate certain percentages of its commitments to them. The Borrower
acknowledges that, for the convenience of all parties, this Agreement is being  
entered into with the Bank only and that its obligations under this Agreement
are undertaken for the benefit of, and as inducement to, any such 
participating bank as well as the Bank, and the Borrower hereby grants to each
such participating bank, to the extent of its participation in the Loans, the
right to set off deposit accounts maintained by the Borrower with such bank.

         13.19  SEVERABILITY. If any provision of this Agreement shall be held
invalid under any applicable laws, such invalidity shall not effect any other
provision of this Agreement that can be given effect without the invalid
provision and, to this end, the provisions hereof are severable.

         13.20  COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one in the same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective duly authorized officers as of the date and
year first written above.

                                                     GLAS-CRAFT, INC.
                                                       ("Borrower")

                                            By: /s/ Dwight D. Goodman
                                               --------------------------------
                                               Dwight D. Goodman, Secretary

                                                     NBD BANK, N.A.
                                                         ("Bank")

                                            By: /s/ Edward R. Salm
                                               --------------------------------
                                               Edward R. Salm, Vice President


                                      -26-


<PAGE>   27




STATE OF INDIANA     )
                     )SS:
COUNTY OF MARION     )

         On this 13th day of May, 1997, before me personally appeared Dwight D.
Goodman, the Secretary of Glas-Craft, Inc., the Indiana corporation described in
the foregoing instrument and who executed the same, and acknowledged to me that
being duly authorized he executed the same as the free and voluntary act of such
corporation
                                       /s/ Bradley S. Fuson
                                       ----------------------------------
       NOTARY PUBLIC SEAL              Notary Public
           INDIANA
                                       _______________________ County, Indiana

                                       My Commission Expires:________________



                       --------------------------------
                                 BRADLEY FUSON
                        NOTARY PUBLIC STATE OF INDIANA
                                HAMILTON COUNTY
                       MY COMMISSION EXP. AUG. 28, 1998
                       --------------------------------






                                      -27-


<PAGE>   28



                                                                   EXHIBIT 1.12

                            [ON BORROWER LETTERHEAD]

                            CERTIFICATE OF NO DEFAULT

         In compliance with Section 7.2.4 of that certain Credit and Security
Agreement by and between GLAS-CRAFT, INC. ("Borrower") and NBD BANK, N.A.
("Bank") dated as of May _____, 1997 ("Agreement"), as the same may be amended
from time to time the undersigned hereby certifies that he/she is the duly
elected, qualified, and acting of the Borrower, and he further certifies and
warrants that as of the date hereof, there exists no Event of Default or
Unmatured Event of Default (as such terms are defined in the Agreement) under
any of the terms and conditions of the Agreement, except as set forth below:

         The Borrower has taken or plans to take the following action with
respect to the Event of Default or Unmatured Event of Default described above:

         The representations and warranties of the Borrower contained in the
Agreement, including those contained in Section 5 thereof, continue to be true
as of the date hereof, except that the representations and warranties in Section
5.3 of the Agreement shall be deemed given with respect to the financial
statements accompanying this certificate as of the date of such financial
statements.

         The Borrower's records indicate that as of the date hereof, the
principal balance of advances under the Line of Credit totals $ and that the
total outstanding indebtedness under the Line of Credit does not exceed the
amount available under the Borrowing Base set forth in Section 2.1 of the
Agreement.

         IN WITNESS WHEREOF, the undersigned has set his/her hand for and on
behalf of the Borrower this ______ day of _______________, 199__.

                                            GLAS-CRAFT, INC.

                                            By:______________________________

                                            Printed:_________________________

                                            Title:___________________________





                                      


<PAGE>   29
                                  EXHIBIT 5.7

                                PERMITTED LIENS



       1.   Ameritech Credit Corporation, UCC dated October 22, 1992, selected
telephone and other telecommunication equipment as supplemented by UCC dated
November 13, 1995.

       2.   IBM Credit Corp., UCC dated November 1, 1993, selected computer
equipment.

       3.   International Software Finance Corp. UCC dated November 10,
1995--computer workstation and software.


<PAGE>   30


                                  EXHIBIT 5.10

                       EMPLOYEE BENEFIT PLANS DESCRIPTION

 1)    Glas-Craft, Inc. Employee Profit Sharing savings plan (401K Plan) 
          
             -  Plan Administrator - Glas-Craft, Inc. 
             -  Trustee - Irwin Union Bank & Trust 
             -  Employer Match - Employer will contribute an amount equal to 
                100% of the first 2% of employees compensation, 50% of the next 
                2% of employee compensation.

2) Flexible Benefits Plan (Cafeteria Plan)
   Allows Employees to pay certain benefits with pretax dollars 

        Plan Administrator - Glas-Craft, Inc.
        Benefits Provided:

             -  Group Medical Insurance
             -  Disability Income - Short Term
             -  Cancer Insurance
             -  Group Term Life
             -  Intensive Care Insurance
             -  Medical Care Expense Reimbursement
             -  Dependent Care Expense Reimbursement




<PAGE>   31


                             EXHIBIT 5.12

                       BORROWER'S BUSINESS LOCATIONS

5845 W. 82nd Street, Suite 102,Indianapolis, IN 46278, Approx. 32,000 Sq. Ft.
5954 W. 71st Street, Indianapolis, IN 46278, Approx. 2,700 Sq.  Ft.




<PAGE>   32




                                EXHIBIT 5.12-A

                               LEGAL DESCRIPTION

                                      None