EXHIBIT 10A


        AMENDMENT NO. 2 TO CREDIT AGREEMENT, DATED AS OF AUGUST 23, 1996


                  This Amendment No. 2 (this "Amendment"),  dated as of December
31,  1997,  is  made  by and  among  ALLIED  PRODUCTS  CORPORATION,  a  Delaware
corporation  (the  "Company"),  the  financial  institutions  party  hereto (the
"Banks"),  and Bank of  America  National  Trust  and  Savings  Association  (as
successor  by merger to Bank of  America  Illinois),  as agent for the Banks (in
such capacity,  the "Agent").  Terms defined in the Credit  Agreement shall have
the same respective  meanings when used herein and the provisions of Sections 13
of the Credit Agreement shall apply, mutatis mutandis, to this Amendment.

                              W I T N E S S E T H:

                  WHEREAS,  the  parties  hereto  are  parties  to that  certain
Amended and Restated Credit  Agreement,  dated as of August 23, 1996, as amended
by letter  agreement  dated  November 27, 1997 (as in effect on the date hereof,
the "Existing  Credit  Agreement" and as amended and modified by this Amendment,
the "Credit Agreement");

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

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

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

                  1.       Amendments.  Subject to the satisfaction of the
conditions precedent set forth in Section 5 below, the Existing
Credit Agreement is hereby amended as follows:

                  (a) Section 1.1.3 of the Existing  Credit  Agreement  shall be
         amended by deleting each reference to  $100,000,000  contained  therein
         and replacing it with $125,000,000,  and adding a new paragraph thereto
         which shall read in its entirety as follows:




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<PAGE>



                           "Notwithstanding anything contained in this Agreement
                  to the contrary,  for a period of thirty (30) consecutive days
                  during each fiscal  year of the Company  while this  Agreement
                  remains in effect, the aggregate  outstanding principal amount
                  of all Revolving Loans shall not exceed $60,000,000."

                  (b) Section 5.3 of the Existing Credit Agreement is amended by
         deleting the reference to $50,000,000  contained  therein and replacing
         it with $75,000,000;

                  (c)  Section 6.1 of the  Existing  Credit  Agreement  shall be
         amended by (i) inserting  "(a)" at the beginning  thereof and replacing
         the "." at the end thereof with "; and" and (ii) adding a new paragraph
         thereto which shall read in its entirety as follows:

                           "(b) On each  Commitment  Reduction  Date  set  forth
                  below  (each  called  a  "Commitment   Reduction  Date"),  the
                  aggregate  Commitments of the Banks shall be automatically and
                  permanently  reduced,  pro rata,  in an amount  sufficient  to
                  reduce the aggregate Commitments of the Banks to the principal
                  amount set forth opposite such Commitment Reduction Date:

                  Commitment                            Maximum Commitments
                  Reduction Date

                  March 31, 1999                          $120,000,000
                  June 30, 1999                           $115,000,000
                  September 30, 1999                      $110,000,000
                  December 31, 1999                       $105,000,000
                  March 31, 2000                          $100,000,000

                  On any date that the aggregate  unpaid principal amount of the
                  Revolving  Loans  plus  the  aggregate  Stated  Amount  of all
                  Letters of Credit  exceeds  the  aggregate  Commitment  of the
                  Banks, the Company shall immediately repay the Revolving Loans
                  in an amount equal to such excess."

                  (d) Section 10.5 of the Existing  Credit  Agreement is deleted
         in its entirety and replaced with the following:

                           "SECTION  10.5 Net Worth.  Not  permit the  Company's
                  Consolidated  Net  Worth at any  time to be less  than (a) the
                  Company's  Consolidated  Net  Worth as of the  Fiscal  Quarter
                  ended  September 30, 1997, plus (b) fifty percent (50%) of the
                  Company's  positive  consolidated  net income for each  Fiscal
                  Quarter ended after September 30, 1997,



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                  less (c)  repurchases  by the Company of its capital  stock to
                  the extent such  repurchases do not exceed  $30,000,000 in the
                  aggregate,  less (d) the amount of any cash  dividends paid or
                  declared in an amount not to exceed $7,500,000;  provided that
                  any deduction required by this clause (d) when aggregated with
                  the amounts  deducted  pursuant to clause (c) of this  Section
                  10.5, if any, shall not exceed $30,000,000."

                  (e) Section 10.8 of the Existing  Credit  Agreement is deleted
         in its entirety and replaced with the following:

                           "SECTION 10.8 Minimum Debt  Coverage.  Not permit the
                  ratio  of (a) the sum of (i) the  accounts  receivable  of the
                  Company  and its  Subsidiaries,  plus  (ii) the book  value of
                  inventory of the Company and its  Subsidiaries  (provided that
                  the value of such  inventory  shall not exceed 150% of the net
                  amount of accounts  receivable  under clause (i) above),  plus
                  (iii) cash and cash equivalents (determined according to GAAP)
                  of the  Company  and its  Subsidiaries  to (b)  the  aggregate
                  principal  amount of all  Indebtedness  of the Company and its
                  Subsidiaries,  to be less than 1:1 during  the Fiscal  Quarter
                  ended  December  31,  1997 and during the fiscal  years  ended
                  December 31, 1998 and 1999, and less than 1.5:1 thereafter."

                  (f) The  definition  of Margin  set forth in Section 13 of the
         Existing  Credit  Agreement  is amended by deleting the column with the
         heading  "Rate per annum" in its  entirety  and  replacing  it with the
         following:

                           "Rate per annum

                            0.500%
                            0.625%
                            0.750%
                            1.000%
                            1.250%"

                  (g) The definition of Revolving  Termination Date set forth in
         Section 13 of the  Existing  Credit  Agreement  shall be deleted in its
         entirety and replaced with the following:

                           "Revolving Termination Date shall mean September 30,
                  2000."

                  (h) Exhibit A to the Existing  Credit  Agreement is deleted in
         its entirety and replaced with Exhibit A attached hereto.



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                  (i) A new  sentence  shall be  added  at the end of the  final
         paragraph of Section 3.3 of the  existing  Credit  Agreement  and shall
         read in its entirety as follows:

                           "After giving effect to any Revolving Loan, there may
                  not be more  than  eight (8)  different  Interest  Periods  in
                  effect for all Revolving Loans then outstanding."

                  2. Documents Remain in Effect.  Except as amended and modified
by this  Amendment,  the  Existing  Credit  Agreement  remains in full force and
effect and the Company confirms that its representations, warranties, agreements
and covenants  contained in, and obligations and liabilities  under,  the Credit
Agreement  and each of the other  Loan  Documents  are true and  correct  in all
material   respects  as  if  made  on  the  date   hereof,   except  where  such
representation, warranty, agreement or covenant speaks as of a specified date.

                  3. References in Other  Documents.  References to the Existing
Credit Agreement in any other document shall be deemed to include a reference to
the Credit Agreement, whether or not reference is made to this Amendment.

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

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

                  (b) This  Amendment  and the  Restated  Notes  constitute  the
         legal,  valid,  and binding  obligations  of the  Company,  enforceable
         against the Company in accordance with its terms; and

                  (c) no Default has occurred and is  continuing  or will result
         from this Amendment or the Restated Notes.

                  5. Conditions  Precedent.  The effectiveness of this Amendment
is  subject  to the  receipt  by the  Agent  of  each  of  the  following,  each
appropriately  completed and duly executed as required and otherwise in form and
substance satisfactory to the Agent:



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

                  (b) A certificate of the President or a  VicePresident  of the
         Company that all necessary  consents or approvals  with respect to this
         Amendment and the Restated Notes have been obtained;

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

                  (d) Restated  Revolving  Notes, in the form attached hereto as
         Exhibit B, payable to the order of each Bank in principal  amount equal
         to such Bank's aggregate Commitment;

                  (d) An opinion of Mark  Standefer  covering  those matters set
         forth in clauses (a) and (b) of Section 4 and such other legal  matters
         as the Agent or its counsel may request; and

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

                  6.       Miscellaneous.

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

                  (b) This  Amendment  and any  amendment  hereof or  supplement
hereto  may be  executed  in any  number of  counterparts  and by the  different
parties on separate counterparts and each such counterpart shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same agreement.

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

                  (d) All obligations of the Company and rights of the Banks and
the Agent, that are expressed herein, shall be in



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addition to and not in limitation to those provided by applicable
law.

                  (e) Whenever  possible,  each  provision of this Amendment and
the Restated  Notes shall be  interpreted  in such manner as to be effective and
valid under  applicable  law;  but if any  provision  of this  Amendment  or the
Restated  Notes shall be  prohibited by or invalid  under  applicable  law, such
provision shall be ineffective to the extent of such  prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Amendment or the Restated Notes.

                  (f) This  Amendment  and the  Restated  Notes shall be binding
upon the Company,  the Banks and the Agent and their  respective  successors and
assigns,  and shall inure to the benefit of the Company, the Banks and the Agent
and their respective successors and assigns.


                              *          *          *



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


                                          ALLIED PRODUCTS CORPORATION


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



                                          BANK  OF  AMERICA  NATIONAL
                                          TRUST      AND      SAVINGS
                                          ASSOCIATION  (as  successor
                                          by   merger   to   Bank  of
                                          America Illinois), as Agent


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



                                          BANK  OF  AMERICA  NATIONAL
                                          TRUST      AND      SAVINGS
                                          ASSOCIATION  (as  successor
                                          by   merger   to   Bank  of
                                          America  Illinois),  in its
                                          individual corporate capacity


                                          By:     /s/ Rob Ritter
                                          Name:       Rob Ritter
                                          Title:      Vice President



                                          LASALLE NATIONAL BANK


                                          By:    /s/ Robert M. Swanson
                                          Name:      Robert M. Swanson
                                          Title:     First Vice President





<PAGE>

<TABLE>
<CAPTION>


                                                                                EXHIBIT A

                                                                     COMMITMENT LIMITS AND PERCENTAGES


                                              Column I:            Column II:              Column III:           Column IV:

<S>                                           <C>                  <C>                     <C>     
                                              Amount of            Amount of Letter        Total Amount of
Name of Bank                                  Revolving Loan       of Credit               Commitments           Percentage
                                              Commitment           Commitment

BANK OF AMERICA                               $ 87,500,000         $14,000,000             $87,500,000              70%
ILLINOIS

LASALLE NATIONAL BANK                         $ 37,500,000         $ 6,000,000             $37,500,000              30%
                                               -----------          ----------              ----------              --

                               TOTALS         $125,000,000         $20,000,000            $125,000,000             100%


</TABLE>





<PAGE>



                                    EXHIBIT B

                                     FORM OF
                             RESTATED REVOLVING NOTE


$ __________________                                          December __, 1997
                                                              Chicago, Illinois


         On or before the Revolving  Termination  Date (as defined in the Credit
Agreement referred to below), the undersigned,  for value received,  promises to
pay  to  the   order  of   __________________   at  the   principal   office  of
__________________________  (the "Bank"), in Chicago,  Illinois  _______________
Dollars  ($_______)  or, if less,  the aggregate  unpaid amount of all Revolving
Loans made by the payee to the undersigned  pursuant to the Credit Agreement (as
shown in the records of the payee or, at the  payee's  option,  on the  schedule
attached hereto and any continuation thereof).

         The  undersigned  further  promises  to  pay  interest  on  the  unpaid
principal  amount of each Revolving Loan evidenced  hereby from the date of such
Revolving Loan until such Revolving Loan is paid in full, payable at the rate(s)
and at the time(s) set forth in the Credit Agreement. Payments of both principal
and interest are to be made in lawful money of the United States of America.

         This Restated Revolving Note evidences indebtedness incurred under, and
is subject to the terms and  provisions  of, the  Amended  and  Restated  Credit
Agreement,  dated as of August 23, 1996, as amended (herein,  as further amended
or otherwise modified from time to time, called the "Credit Agreement"), between
the  undersigned,  various  banks  (including  the  payee)  and Bank of  America
National Trust and Savings Association,  as agent for the Banks, to which Credit
Agreement  reference is hereby made for a statement of the terms and  provisions
under which this  Restated  Revolving  Note may or must be paid prior to its due
date or may have its due date accelerated.  Terms used but not otherwise defined
herein are used herein as defined in the Credit Agreement.

         In  addition  to  and  not  in  limitation  of the  foregoing  and  the
provisions of the Credit Agreement, the undersigned further agrees, subject only
to any limitation  imposed by applicable  law, to pay all  reasonable  expenses,
including reasonable attorneys' fees and legal expenses,  incurred by the holder
of this Restated  Revolving Note in  endeavoring to collect any amounts  payable
hereunder which are not paid when due, whether by acceleration or otherwise.

         This Restated Revolving Note is made under and governed by the internal
laws of the State of Illinois.




<PAGE>



         This Restated  Revolving  Note is issued in  replacement of a Revolving
Note issued pursuant to the Credit Agreement. The indebtedness evidenced by this
Note represents an extension and renewal of indebtedness owing to the payee.


                                                ALLIED PRODUCTS CORPORATION



                                                By: ___________________________
                                                Title: ________________________





<PAGE>



Schedule  Attached to Restated  Revolving  Note dated  December  31, 1997 of THE
COMPANY payable to the order of

Date and Amount    Date and Amount
of Revolving       of Repayment or
Loan or of         of Conversion
Conversion from    into another                  Unpaid         Notation Made
another type of    type of           Interest    Principal      by
Revolving Loan     Revolving Loan    Period      Balance


                             1. FLOATING RATE LOANS

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                               2. EURODOLLAR LOANS

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<PAGE>



                             RESTATED REVOLVING NOTE


$ 87,500,000                                                 December 31, 1997
                                                             Chicago, Illinois


         On or before the Revolving  Termination  Date (as defined in the Credit
Agreement referred to below), the undersigned,  for value received,  promises to
pay to the order of Bank of America National Trust and Savings  Association (the
"Bank"), at its office located at 231 South LaSalle Street,  Chicago,  Illinois,
Eighty-Seven  Million Five Hundred Thousand Dollars  ($87,500,000)  or, if less,
the  aggregate  unpaid  amount of all  Revolving  Loans made by the payee to the
undersigned  pursuant  to the Credit  Agreement  (as shown in the records of the
payee or,  at the  payee's  option,  on the  schedule  attached  hereto  and any
continuation thereof).

         The  undersigned  further  promises  to  pay  interest  on  the  unpaid
principal  amount of each Revolving Loan evidenced  hereby from the date of such
Revolving Loan until such Revolving Loan is paid in full, payable at the rate(s)
and at the time(s) set forth in the Credit Agreement. Payments of both principal
and interest are to be made in lawful money of the United States of America.

         This Restated Revolving Note evidences indebtedness incurred under, and
is subject to the terms and  provisions  of, the  Amended  and  Restated  Credit
Agreement,  dated as of August 23, 1996, as amended (herein,  as further amended
or otherwise modified from time to time, called the "Credit Agreement"), between
the  undersigned,  various  banks  (including  the  payee)  and Bank of  America
National Trust and Savings Association,  as agent for the Banks, to which Credit
Agreement  reference is hereby made for a statement of the terms and  provisions
under which this  Restated  Revolving  Note may or must be paid prior to its due
date or may have its due date accelerated.  Terms used but not otherwise defined
herein are used herein as defined in the Credit Agreement.

         In  addition  to  and  not  in  limitation  of the  foregoing  and  the
provisions of the Credit Agreement, the undersigned further agrees, subject only
to any limitation  imposed by applicable  law, to pay all  reasonable  expenses,
including reasonable attorneys' fees and legal expenses,  incurred by the holder
of this Restated  Revolving Note in  endeavoring to collect any amounts  payable
hereunder which are not paid when due, whether by acceleration or otherwise.

         This Restated Revolving Note is made under and governed by the internal
laws of the State of Illinois.





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         This Restated  Revolving  Note is issued in  replacement of a Revolving
Note issued pursuant to the Credit Agreement. The indebtedness evidenced by this
Note represents an extension and renewal of indebtedness owing to the payee.


                                            ALLIED PRODUCTS CORPORATION



                                            By: ___________________________
                                            Title: ________________________





<PAGE>



Schedule  Attached to Restated  Revolving  Note dated  December  31, 1997 of THE
COMPANY  payable  to the order of Bank of  America  National  Trust and  Savings
Association

Date and Amount    Date and Amount
of Revolving       of Repayment or
Loan or of         of Conversion
Conversion from    into another                   Unpaid         Notation Made
another type of    type of           Interest     Principal      by
Revolving Loan     Revolving Loan    Period       Balance


                             1. FLOATING RATE LOANS

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                               2. EURODOLLAR LOANS

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<PAGE>



                                              RESTATED REVOLVING NOTE


$ 37,500,000                                                December 31, 1997
                                                            Chicago, Illinois


         On or before the Revolving  Termination  Date (as defined in the Credit
Agreement referred to below), the undersigned,  for value received,  promises to
pay to the order of LaSalle  National Bank (the "Bank"),  at its offices located
at 120 South LaSalle Street, Chicago,  Illinois 60603, Thirty-Seven Million Five
Hundred Thousand Dollars  ($37,500,000) or, if less, the aggregate unpaid amount
of all  Revolving  Loans made by the payee to the  undersigned  pursuant  to the
Credit  Agreement  (as shown in the  records  of the  payee  or, at the  payee's
option, on the schedule attached hereto and any continuation thereof).

         The  undersigned  further  promises  to  pay  interest  on  the  unpaid
principal  amount of each Revolving Loan evidenced  hereby from the date of such
Revolving Loan until such Revolving Loan is paid in full, payable at the rate(s)
and at the time(s) set forth in the Credit Agreement. Payments of both principal
and interest are to be made in lawful money of the United States of America.

         This Restated Revolving Note evidences indebtedness incurred under, and
is subject to the terms and  provisions  of, the  Amended  and  Restated  Credit
Agreement,  dated as of August 23, 1996, as amended (herein,  as further amended
or otherwise modified from time to time, called the "Credit Agreement"), between
the  undersigned,  various  banks  (including  the  payee)  and Bank of  America
National Trust and Savings Association,  as agent for the Banks, to which Credit
Agreement  reference is hereby made for a statement of the terms and  provisions
under which this  Restated  Revolving  Note may or must be paid prior to its due
date or may have its due date accelerated.  Terms used but not otherwise defined
herein are used herein as defined in the Credit Agreement.

         In  addition  to  and  not  in  limitation  of the  foregoing  and  the
provisions of the Credit Agreement, the undersigned further agrees, subject only
to any limitation  imposed by applicable  law, to pay all  reasonable  expenses,
including reasonable attorneys' fees and legal expenses,  incurred by the holder
of this Restated  Revolving Note in  endeavoring to collect any amounts  payable
hereunder which are not paid when due, whether by acceleration or otherwise.

         This Restated Revolving Note is made under and governed by the internal
laws of the State of Illinois.




<PAGE>



         This Restated  Revolving  Note is issued in  replacement of a Revolving
Note issued pursuant to the Credit Agreement. The indebtedness evidenced by this
Note represents an extension and renewal of indebtedness owing to the payee.


                                                 ALLIED PRODUCTS CORPORATION



                                                 By: ___________________________
                                                 Title: ________________________





<PAGE>


Schedule  Attached to Restated  Revolving  Note dated  December  31, 1997 of THE
COMPANY payable to the order of LaSalle national Bank

Date and Amount      Date and Amount
of Revolving         of Repayment or
Loan or of           of Conversion
Conversion from      into another                  Unpaid        Notation Made
another type of      type of            Interest   Principal     by
Revolving Loan       Revolving Loan     Period     Balance


                             1. FLOATING RATE LOANS

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                               2. EURODOLLAR LOANS

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