AMENDED AND RESTATED CREDIT AGREEMENT



                                    Dated as of February 9, 1995

                                      among



                       AMERICAN STANDARD COMPANIES INC.,



                        AMERICAN STANDARD INC.,



                       CERTAIN SUBSIDIARIES OF AMERICAN STANDARD INC.,



                           THE LENDERS, SENIOR MANAGING AGENTS,
                         MANAGING AGENTS AND CO-AGENTS
                                 NAMED HEREIN,

                                      and

                                                     CHEMICAL BANK
                                                     as Administrative Agent



                                                                      
 1



                               TABLE OF CONTENTS


 
Article Section                                                        Page

I. DEFINITIONS

1.01 Defined Terms..................................................... 1
1.02 Terms Generally................................................... 37

II. THE CREDITS

2.01 Commitments....................................................... 37
2.02 Loans............................................................. 38
2.03 Borrowing Procedure............................................... 40
2.04 Interest Rate Elections; Conversion and Continuation of Loans..... 42
2.05 Fees.............................................................. 43
2.06 Notes; Repayment of Loans......................................... 46
2.07 Interest on Loans................................................. 47
2.08 Default Interest.................................................. 47
2.09 Alternate Rate of Interest........................................ 47
2.10 Termination and Reduction of Commitments.......................... 48
2.11 Prepayment........................................................ 49
2.12 Reserve Requirements; Change in Circumstances..................... 51
2.13 Change in Legality................................................ 53
2.14 Indemnity......................................................... 54
2.15 Pro Rata Treatment................................................ 54
2.16 Sharing of Setoffs................................................ 55
2.17 Payments.......................................................... 55
2.18 Taxes............................................................. 56
2.19 Letters of Credit................................................. 59
2.20 Swingline Loans................................................... 63
2.21  Borrower Assignment of Term Loans................................ 65
2.22  Certain Lender Obligations....................................... 65

III. REPRESENTATIONS AND WARRANTIES

3.01 Corporate Status.................................................. 66
3.02 Corporate Power and Authority .................................... 67
3.03 No Violation...................................................... 67
3.04 Use of Proceeds; Margin Regulations 67
3.05 Approvals 68
3.06 Investment Company Act, etc. 68
3.07 True and Complete Disclosure 68
3.08 Financial Condition; Financial Statements; Projections 68
3.09 Security Interests................................................ 70
3.10 Tax Returns and Payments.......................................... 71
3.11 Compliance with ERISA ............................................ 71


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<PAGE>

3.12 Title to Properties; Liens 72
3.13 Patents, Trademarks, etc. ........................................ 72
3.14 Environmental Matters ............................................ 72
3.15 Litigation; Adverse Facts ........................................ 73
3.16 Compliance with Laws and Charter Documents 73
3.17 Absence of Default................................................ 74
3.18 Labor Matters..................................................... 74
3.19 Benefit Plans..................................................... 74
3.20 Insurance......................................................... 74

IV. CONDITIONS

4.01 All Events........................................................ 75
4.02 Effectiveness..................................................... 75

V. AFFIRMATIVE COVENANTS

5.01 Financial Statements and Other Reports ........................... 76
5.02 Books, Records and Inspections.................................... 80
5.03 Maintenance of Property; Insurance; Good Repair .................. 80
5.04 Payment of Taxes and Claims ...................................... 80
5.05 Consolidated Corporate Franchises................................. 80
5.06 Compliance with Statutes, etc. ................................... 81
5.07 ERISA ............................................................ 81
5.08 Performance of Obligations ....................................... 81
5.09 Waiver of Stay, Extension or Usury Laws .......................... 82
5.10 Security Interests ............................................... 82
5.11 After Acquired Real Properties ................................... 82
5.12 Future Guarantors ................................................ 83
5.13 Consents, Approvals, etc. ........................................ 84
5.14 German Real Estate................................................ 84

VI. NEGATIVE COVENANTS

6.01 End of Fiscal Year ............................................... 85
6.02 Consolidation, Merger or Sale or Purchase of Assets. 85
6.03 Liens ............................................................ 87
6.04 Indebtedness...................................................... 89
6.05 Advances, Investments and Loans .................................. 91
6.06 Leases............................................................ 93
6.07 Prepayments of Indebtedness, etc...................................93
6.08 Dividends, etc. .................................................. 93
6.09 Transactions with Affiliates...................................... 94
6.10 Consolidated Total Debt to Consolidated EBITDA Ratio ............. 95
6.11 Interest Coverage Ratio........................................... 95
6.12 ERISA ............................................................ 96
6.13 Sale Leasebacks .................................................. 97
6.14 Issuance and Sale of Stock ....................................... 97
6.15 Limitation on Restrictions on Subsidiary Dividends
     and Other Distributions, etc. .................................... 97


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<PAGE>

6.16 No Further Negative Pledges ...................................... 98
6.17 Restrictions Relating to ASI-BV Intercompany Note ................ 98
6.18 Changes in Business or Assets .................................... 98

VII. EVENTS OF DEFAULT

7.01 Payments ......................................................... 99
7.02 Representations, etc. ............................................ 99
7.03 Covenants ........................................................ 99
7.04 Default Under Other Agreements ................................... 99
7.05 Bankruptcy, etc. ................................................. 100
7.06 ERISA ............................................................ 100
7.07 Security Documents ............................................... 101
7.08 Guarantees ....................................................... 102
7.09 Judgments ........................................................ 102
7.10 Change in Control ................................................ 102

VIII. THE ADMINISTRATIVE AGENT

8.01 Appointment ...................................................... 103
8.02 Delegation of Duties ............................................. 104
8.03 Powers; General Immunity ......................................... 104
8.04 Non-Reliance on Administrative Agent and Other Lenders ........... 106
8.05 Indemnification .................................................. 106
8.06 Resignation by the Administrative Agent .......................... 107
8.07 Security Documents, etc. ......................................... 107
8.08 Determinations Pursuant to Security Documents .................... 108


IX. COLLECTION ALLOCATION MECHANISM

9.01 Implementation of CAM. ........................................... 108
9.02 Letters of Credit ................................................ 109


X. MISCELLANEOUS

10.01 Payment of Expenses, etc. ........................................ 110
10.02 Right of Setoff .................................................. 111
10.03 Notices .......................................................... 111
10.04 Benefit of Agreement ............................................. 112
10.05 No Waiver; Remedies Cumulative ................................... 115
10.06 Calculations; Computations ....................................... 115
10.07 Governing Law; Submission to Jurisdiction; Venue.................. 116
10.08 Counterparts ..................................................... 116
10.09 Headings Descriptive; Entire Agreement 117
10.10 Waivers; Amendment .............................................. 117
10.11 Survival ......................................................... 119


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<PAGE>

10.12 Severability...................................................... 119
10.13 Independence of Covenants ........................................ 119
10.14 Judgment Currency ................................................ 119
10.15 Confidentiality .................................................. 120
10.16 Negotiation in the Event of Certain Tax Law Changes .............. 121
10.17 Waiver of Jury Trial 121
10.18 Miscellaneous..................................................... 121


Exhibit A    Form of Borrowing Request
Exhibit B-1  Form of Term Note
Exhibit B-2  Form of U.S.  $ Periodic  Access  Note 
Exhibit B-3  Form of U.S. $Revolving Credit Note
Exhibit B-4  Form of  Multi-Currency  Revolving Credit Note
Exhibit B-5  Form of  Swingline  Note
Exhibit C    Administrative  Questionnaire
Exhibit D    Form of  Assignment  and  Acceptance 
Exhibit E    Form of  Issuing  Bank Agreement
Exhibit F    Form of Mortgage 
Exhibit G    Form of Perfection  Certificate
Exhibit H    Form  of  Section  2.18(e)(ii)   Certificate 
Exhibit I-1  Form of Supplemental Guarantee 
Exhibit I-2  Form of Foreign Supplemental Guarantee


(The following schedules are not included in this filing.)

Schedule I         Subsidiary Borrowers
Schedule II        Lenders and Commitments
Schedule III       Subsidiary Guarantors
Schedule IV        Scheduled Letters of Credit
Schedule 3.01      Subsidiaries
Schedule 3.05      Consents and Approvals
Schedule 3.08(b)   ContingentObligations
Schedule 3.08(d)   Indebtedness
Schedule 3.09(a)   Conditions to Perfection
Schedule 3.09(b)   Agreements of Equity Holders
Schedule 3.12(a)   Liens
Schedule 3.12(b)   Real Properties
Schedule 3.13      Intellectual Property Consents
Schedule 3.14(b)   Environmental Obligations
Schedule 3.15      Litigation; Proceedings
Schedule 3.17      Defaults
Schedule 3.19      Pension Plans
Schedule 3.20      InsurancePrograms
Schedule 6.02      Permitted Consolidations, Mergers or Sales or Purchases 
                   of Assets
Schedule 6.04      Certain Existing Indebtedness
Schedule 6.05      Investments
<PAGE>
     AMENDED AND RESTATED CREDIT  AGREEMENT dated as of February 9, 1995,  among
AMERICAN STANDARD  COMPANIES INC. (formerly called ASI HOLDING  CORPORATION),  a
Delaware corporation ("Holding"); AMERICAN STANDARD INC., a Delaware corporation
("ASI");  the  Subsidiaries of ASI listed in Schedule I hereto (the  "Subsidiary
Borrowers" and, together with ASI, the "Borrowers");  the financial institutions
listed in Schedule II hereto (the "Lenders");  CHEMICAL BANK, a New York banking
corporation,  as  administrative  agent for the Lenders (in such  capacity,  the
"Administrative Agent");  CITIBANK, N.A. and NATIONSBANK,  N.A. (CAROLINAS),  as
Senior Managing Agents (the "Senior Managing Agents"); BANK OF AMERICA ILLINOIS,
THE BANK OF NOVA SCOTIA,  BANKERS TRUST COMPANY, THE CHASE MANHATTAN BANK, N.A.,
COMPAGNIE  FINANCIERE DE CIC ET DE L'UNION EUROPEENNE,  CREDIT SUISSE,  DEUTSCHE
BANK AG, THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY,  THE LONG-TERM  CREDIT BANK
OF JAPAN, LIMITED and THE SUMITOMO BANK, LTD., as Managing Agents (the "Managing
Agents"); and THE BANK OF NEW YORK, CANADIAN IMPERIAL BANK OF COMMERCE, THE FUJI
BANK,  LIMITED and THE SANWA BANK LIMITED,  as Co-Agents (the  "Co-Agents"  and,
together  with  the  Senior  Managing  Agents,   the  Managing  Agents  and  the
Administrative Agent, the "Agents").


     The parties  hereto are willing to enter into this  Agreement  on the terms
and  subject  to the  conditions  herein set forth.  Accordingly,  Holding,  the
Borrowers,  the Lenders,  the Administrative  Agent, the Senior Managing Agents,
the Managing Agents and the Co-Agents agree as follows:


                                   ARTICLE I

                                  DEFINITIONS

     SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
shall have the meanings specified below:

     "ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.

     "ABR Loan" shall mean any Loan  bearing  interest at a rate  determined  by
reference  to the  Alternate  Base Rate in  accordance  with the  provisions  of
Article II.

     "ABS" shall mean Chemical Bank Agent Bank Services.

     "Account Party" shall have the meaning specified in Section 2.19(b).

     "Acquisition" shall have the meaning specified in Section 6.05(m).

     "Adjusted  LIBO Rate" shall mean,  with respect to any LIBOR  Borrowing for
any Interest Period, an interest rate per annum (rounded  upwards,  if necessary
to the next 1/16 of 1%) equal to the  product of (a) the LIBO Rate in effect for
such Interest Period and (b) Statutory Reserves.






<PAGE>





     "Administrative  Agent" shall have the meaning  specified in the heading of
this Agreement.

     "Administrative  Questionnaire" shall mean an Administrative  Questionnaire
in the form of Exhibit C hereto.

     "Affiliate"  shall  mean,  when used with  respect to a  specified  person,
another person that directly,  or indirectly through one or more intermediaries,
Controls  or is  Controlled  by or is  under  common  Control  with  the  person
specified.

     "After Acquired Property" shall have the meaning specified in Section 5.11.

     "Agent and Administrative Fees" shall have the meaning specified in Section
2.05(d).

     "Agents" shall have the meaning specified in the heading of this Agreement.

     "Aggregate  L/C Exposure"  shall mean the sum of the  Aggregate  U.S. $ L/C
Exposure   and   the   Aggregate   Multi-Currency   L/C   Exposure.   "Aggregate
Multi-Currency  L/C Exposure"  shall mean the  aggregate  amount of the Lenders'
Multi-Currency  L/C  Exposures.   "Aggregate   Multi-Currency  Revolving  Credit
Exposure"  shall  mean  the  aggregate  amount  of the  Lenders'  Multi-Currency
Revolving Credit Exposures. "Aggregate Periodic Access Loan Exposure" shall mean
the aggregate amount of the Lenders' Periodic Access Loan Exposures.  "Aggregate
Revolving  Credit  Exposure"  shall mean the  aggregate  amount of the  Lenders'
Revolving  Credit  Exposures.  "Aggregate  U.S. $ L/C  Exposure"  shall mean the
aggregate  amount of the  Lenders'  U.S.  $ L/C  Exposures.  "Aggregate  U.S.  $
Revolving  Credit Exposure" shall mean the aggregate amount of the Lenders' U.S.
$ Revolving Credit  Exposures.  "Alternate Base Rate" shall mean, for any day, a
rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to
the  greatest of (a) the Prime Rate in effect on such day,  (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%.  "Prime  Rate" shall mean the rate of  interest  per
annum publicly  announced from time to time by the  Administrative  Agent as its
prime rate in effect at its  principal  office in New York City;  each change in
the Prime Rate shall be effective on the date such change is publicly  announced
as  effective.  "Base CD Rate"  shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment
Rate.  "Three-Month  Secondary CD Rate" shall mean,  for any day, the  secondary
market rate for three-month  certificates of deposit reported as being in effect
on such day (or,  if such day shall not be a Business  Day,  the next  preceding
Business Day) by the Board through the public information  telephone line of the
Federal Reserve Bank of New York (which rate will,  under the current  practices
of the Board,  be published in Federal  Reserve  Statistical  Release  H.15(519)
during the week  following  such day), or, if such rate shall not be so reported
on such day or such next  preceding  Business  Day, the average of the secondary
market quotations for three-month  certificates of deposit of major money center
banks in New York City received at approximately 10:00 a.m., New York City time,
on such day (or, if such day shall not be a Business Day, on the next  preceding
Business  Day) by the  Administrative  Agent  from the New York City  negotiable
certificate of deposit dealers of recognized  national  standing selected by it.
"Federal Funds Effective Rate" shall mean, for any day, the weighted  average of
the rates on overnight  Federal funds  transactions  with members of the Federal
Reserve  System  arranged by Federal  funds  brokers,  as  published on the next
succeeding  Business Day by the Federal  Reserve  Bank of New York,  or, if such
rate is not so published for any day which is a Business

<PAGE>


Day, the average of the quotations for the day of such transactions  received by
the Administrative Agent from three Federal funds brokers of recognized national
standing selected by it. If for any reason the  Administrative  Agent shall have
determined  that it is unable to ascertain the Base CD Rate or the Federal Funds
Effective Rate or both for any reason, including the inability or failure of the
Administrative  Agent to obtain  sufficient  quotations in  accordance  with the
terms  thereof,  the  Alternate  Base Rate shall  beAgent  to obtain  sufficient
quotations in accordance  with the terms thereof,  the Alternate Base Rate shall
be determined without regard to clauses (b) or (c) of the first sentence of this
definition,  as  appropriate,  until  the  circumstances  giving  rise  to  such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime  Rate,  the  Three-Month  Secondary  CD Rate or the  Federal  Funds
Effective  Rate shall be effective on the  effective  date of such change in the
Prime Rate,  the  Three-Month  Secondary CD Rate or the Federal Funds  Effective
Rate, respectively.

     "Alternative  Currency"  shall mean (a) Canadian  Dollars,  Deutsche Marks,
French  Francs,  Italian Lire and  Sterling  and (b) any other freely  available
currency which is freely transferable and freely convertible into Dollars and in
which dealings in deposits are carried on in the London interbank market,  which
shall be requested by a Borrower in respect of an Alternative Currency Borrowing
and approved by each Lender making an  Alternative  Currency  Loan  comprising a
part of such Borrowing.

     "Alternative  Currency  Borrowing"  shall  mean a  Borrowing  comprised  of
Alternative Currency Loans.

     "Alternative  Currency Equivalent" shall mean, with respect to an amount of
Dollars on any date in  relation  to any  specified  Alternative  Currency,  the
amount of such  specified  Alternative  Currency that may be purchased with such
amount of  Dollars  at the Spot  Exchange  Rate with  respect to Dollars on such
date. The term "Alternative  Currency Equivalent" may be preceded by a reference
to an Alternative  Currency (e.g.,  "DM Alternative  Currency  Equivalent"),  in
which case the  Alternative  Currency  so  referenced  shall be the  "specified"
Alternative Currency.

     "Alternative   Currency  Loan"  shall  mean  any  Loan  denominated  in  an
Alternative Currency.

     "Amended and Restated  Stockholders  Agreement"  shall mean the Amended and
Restated Stockholders  Agreement of American Standard Companies Inc. dated as of
December 2, 1994, as such Amended and Restated  Stockholders  Agreement may from
time to time be amended, supplemented or modified.

     "Applicable  Margin" shall mean (a) with respect to each Term Borrowing (or
Loan) that is a LIBOR Borrowing (or Loan),  1.50% per annum, (b) with respect to
each Term  Borrowing  (or Loan)  that is an ABR  Borrowing  (or Loan)  0.50% per
annum,  (c) with  respect to each other  LIBOR  Borrowing  (or Loan),  1.75% per
annum,  and (d) with respect to each other ABR  Borrowing  (or Loan),  0.75% per
annum;  provided  that so long as no Event of Default shall have occurred and be
continuing,  each such "Applicable Margin" shall be reduced,  but in no event to
less than zero,  by the amount set forth  under the caption  "Margin  Reduction"
below  opposite  whichever of the  financial  ratio  conditions  for ASI and its
Consolidated  Subsidiaries set forth under the caption  "Financial Ratios" below
is satisfied and results in the greatest  reduction  (with  satisfaction of such
financial ratio  conditions  being  determined  based on the balance sheets most
recently  delivered to the Lenders pursuant to clause (a) or (b) of Section 5.01
and the related  statements of income for the period of four consecutive  fiscal
quarters ended as of the date of such balance sheets, after giving effect to any
pro forma adjustments thereto as provided below, and with each "Financial Ratio"
and any corresponding  change in the Applicable Margin becoming effective on the
earlier of the date on which such  financial  statements  are  delivered and the
date by which such  financial  statements  are  required to have been  delivered
pursuant to clause (a) or (b) of Section 5.01):

Financial Ratios                                         Margin Reduction

Ratio of Consolidated Free Cash Flow to Consolidated Cash
Fixed Charges > 2.75:1 and Ratio of Consolidated Total
Debt to Consolidated EBITDA                                 3.5:1 0.25%






<PAGE>





Ratio of Consolidated Free Cash Flow to Consolidated Cash
Fixed Charges > 3.25:1 and Ratio of Consolidated Total
Debt to Consolidated EBITDA                                  3.0:1 0.50%

Ratio of Consolidated Free Cash Flow to Consolidated Cash
Fixed Charges > 3.75:1 and Ratio of Consolidated Total
Debt to Consolidated EBITDA                                 2.75:1 0.75%

Ratio of Consolidated Free Cash Flow to Consolidated Cash
Fixed Charges > 4.25:1 and Ratio of Consolidated Total
Debt to Consolidated EBITDA                                 2.25:1 1.00%

Ratio of Consolidated Free Cash Flow to Consolidated Cash
Fixed Charges > 5.00:1 and Ratio of Consolidated Total
Debt to Consolidated EBITDA                                 2.00:1 1.125%

     In the event (a)  Holding  shall  complete  an  equity  offering  for gross
proceeds in excess of $20,000,000 or (b) ASI shall complete, directly or through
a  Subsidiary,  (i) any offering of Securities  for gross  proceeds in excess of
$20,000,000,  (ii) a refinancing,  repurchase or prepayment of Indebtedness in a
principal amount in excess of $20,000,000 (but only, in the case of Indebtedness
outstanding  under  any  revolving  credit  or  similar   arrangement,   if  the
commitments of the lenders are reduced by a  corresponding  amount) as permitted
under Section  6.04(d) or under Section 6.07 or (iii) an  Acquisition  for total
consideration  (including  Funded Debt  incurred or assumed and common  stock of
Holding) in excess of $20,000,000,  then ASI shall deliver to the Administrative
Agent  pro  forma  computations  of the  ratios  referred  to  above  as if such
offering,  refinancing or Acquisition had been completed on the first day of the
period of four consecutive fiscal quarters referred to in the proviso above, and
until four complete  fiscal  quarters  shall have elapsed since the date of such
offering,  refinancing or Acquisition and financial  statements  shall have been
delivered with respect  thereto under Section 5.01, the Applicable  Margin shall
be  determined  by reference to the pro forma  information  for such of the four
fiscal quarters preceding and including the fiscal quarter during which the date
of such offering, refinancing or Acquisition shall have occurred as is necessary
to compile information (both pro forma and, to the extent available, actual) for
each period of four fiscal quarters. With respect to an Acquisition,  whether or
not such Acquisition  shall be completed in reliance on paragraph (m) of Section
6.05,  ASI shall  also  deliver  to the  Administrative  Agent  the  information
specified in clause  (y)(1),  (2) or (3) of the proviso to such paragraph (m) at
the time provided therein.

     "Applicable  Percentage"  (a) of any U.S. $ Revolving  Credit Lender at any
time shall mean the percentage of the Total U.S. $ Revolving  Credit  Commitment
represented by such Lender's U.S. $ Revolving Credit Commitment,  and (b) of any
Multi-Currency  Revolving Credit Lender at any time shall mean the percentage of
the  Total  Multi-Currency  Revolving  Credit  Commitment  represented  by  such
Lender's Multi-Currency Revolving Credit Commitment.

     "ASI" shall have the meaning specified in the heading of this Agreement.

     "ASI-BV  Intercompany  Note"  shall  mean  the  Amended,  Consolidated  and
Restated Secured  Promissory Demand Note dated June 1, 1993, of ASI to the Dutch
Borrower,  as such  ASI-BV  Intercompany  Note may be amended,  supplemented  or
otherwise  modified  from time to time in  accordance  with the terms hereof and
thereof.

     "Assessment Rate" shall mean for any date the annual rate (rounded upwards,
if necessary,  to the next 1/100 of 1%) identified by the  Administrative  Agent
(or, if need be, reasonably  estimated by the Administrative  Agent) as the then
current net annual assessment rate that will be employed in determining  amounts
payable by the Administrative Agent to the Federal Deposit Insurance Corporation
(or any successor) for insurance by such Corporation (or such successor) of time
deposits made in Dollars at the Administrative Agent's domestic offices.

     "Assigned  Dollar  Value"  shall mean (a) in respect of any  Multi-Currency
Revolving Credit Borrowing  denominated in an Alternative  Currency,  the Dollar
Equivalent thereof determined





<PAGE>





based upon the  applicable  Spot Exchange Rate as of the  Denomination  Date for
such  Borrowing,  (b) in respect  of the  undrawn  amount of any  Multi-Currency
Letter of Credit denominated in an Alternative  Currency,  the Dollar Equivalent
thereof  determined  based upon the applicable  Spot Exchange Rate as of (i) the
date  that  is  three  Business  Days  prior  to the  date of  issuance  of such
Multi-Currency Letter of Credit, until the first day after such date of issuance
which is the last day of February,  May, August or November and (ii) thereafter,
the most recent date which is the last day of February, May, August or November,
(c)  in  respect  of  a  Multi-Currency  L/C  Disbursement   denominated  in  an
Alternative  Currency,  the Dollar Equivalent  thereof determined based upon the
applicable  Spot  Exchange  Rate  as  of  the  date  such   Multi-Currency   L/C
Disbursement  was made,  (d) in respect of a Swingline  Loan  denominated  in an
Alternative  Currency,  the Dollar Equivalent  thereof based upon the applicable
Spot Exchange Rate as of the date that the  Administrative  Agent determined the
amount thereof  following  receipt of notice of borrowing of such Swingline Loan
and  (e)  in  respect  of  any  Periodic  Access  Borrowing  denominated  in  an
Alternative Currency (i) the Dollar Equivalent thereof determined based upon the
applicable  Spot Exchange Rate as of the  Denomination  Date for such Borrowing,
unless and until adjusted pursuant to the following clause (ii), and (ii) if, as
of the end of any Interest Period in respect of such Periodic Access  Borrowing,
the Dollar Equivalent thereof determined based upon the applicable Spot Exchange
Rate as of the date that is three  Business Days before the end of such Interest
Period would be at least 5% more, or 5% less,  than the "Assigned  Dollar Value"
thereof  at the  time,  then on and after the end of such  Interest  Period  the
"Assigned  Dollar  Value" of such  Borrowing  shall be adjusted to be the Dollar
Equivalent  thereof  determined based upon the Spot Exchange Rate that gave rise
to such adjustment (subject to further adjustment in accordance with this clause
(ii) thereafter).  The Assigned Dollar Value of a Loan included in any Borrowing
shall  equal  the  portion  of the  Assigned  Dollar  Value  of  such  Borrowing
represented by such Loan.

     "Assignment and Acceptance" shall mean an assignment and acceptance entered
into by a Lender and an assignee,  and accepted by the Administrative  Agent, in
the form of Exhibit D.

     "Assignment  and  Amendment   Agreement"  shall  mean  the  Assignment  and
Amendment  Agreement  dated as of  February  9, 1995,  among the parties to this
Agreement and the Withdrawing  Lenders (as defined in the Assignment and Amended
Agreement).

     "Board" shall mean the Board of Governors of the Federal  Reserve System of
the United States or any successor thereto performing similar functions.

     "Borrower  Group" shall mean any group consisting of (a) a Borrower and its
Subsidiaries (other than the French and Italian Subsidiaries owning interests in
the EEIG Borrower),  (b) the French  Subsidiaries  owning  interests in the EEIG
Borrower and their respective  Subsidiaries  taken as a whole or (c) the Italian
Subsidiaries  owning  interests  in  the  EEIG  Borrower  and  their  respective
Subsidiaries  taken as a whole,  excluding in each case (i) any Subsidiary which
is itself a Borrower and (ii) any subsidiary of a Subsidiary  referred to in the
preceding clause (i).

     "Borrowers"  shall  have  the  meaning  specified  in the  heading  of this
Agreement.

     "Borrowing"  shall mean (i) a group of Loans of a single  Type made under a
single Credit Facility as to which a single Interest Period is in effect or (ii)
a Swingline Loan, as the context may require.

     "Borrowing  Request" shall mean a request by a Borrower in accordance  with
the terms of Section  2.03 in the form of Exhibit A. 

     "Business  Day" shall  meanany  day on which  commercial  banks and foreign
exchange markets are open for business and are not required or authorized by law
to close in any of London,  New York City or, if such  reference  relates to the
date on which  any  amount  is to be paid or made  available  in an  Alternative
Currency,  the  principal  financial  center in the country of such  Alternative
Currency.  "CAM" shall mean the  mechanism  for the  allocation  and exchange of
interests in the Credit Facilities and collections  thereunder established under
Article IX.



<PAGE>





     "CAM Exchange" shall mean the exchange of the Lender's  interests  provided
for in Section 9.01.

     "CAM Exchange  Date" shall mean the first date on which any event  referred
to in Section  7.05 (other than in clause (y) of paragraph  (b)  thereof)  shall
occur in respect of ASI.

     "CAM Percentage" shall mean, as to each Lender, a fraction,  expressed as a
decimal,  of  which  (a) the  numerator  shall  be the sum of (i) the  aggregate
Designated  Obligations  owed to such  Lender and (ii) the sum of the U.S. $ L/C
Exposure  and the  Multi-Currency  L/C  Exposure  of such  Lender,  in each case
immediately  prior to the CAM Exchange Date and (b) the denominator shall be the
sum of (i) the aggregate Designated Obligations owed to all the Lenders and (ii)
the Aggregate L/C Exposure of all the Lenders, in each case immediately prior to
such CAM Exchange Date. For purposes of computing each Lender's CAM  Percentage,
all  Designated  Obligations  and  Multi-Currency  L/C Exposures  which shall be
denominated in Alternative  Currencies  shall be translated  into Dollars at the
Spot Exchange Rate in effect on the CAM Exchange Date. "Canadian Borrower" shall
mean Wabco Standard Trane Inc., an Ontario corporation.

     "Canadian Dollars" or "C$" shall mean lawful money of Canada.

     "Capital  Expenditures"  shall  mean,  with  respect  to any person for any
period,  the sum of (i) the aggregate of all expenditures  (whether paid in cash
or  Securities  or accrued as a  liability)  by such  person  during that period
which,  in  accordance  with GAAP,  are or should be included in  "additions  to
property,  plant or equipment"  or similar  items  reflected in the statement of
cash  flows of such  person  and (ii) to the  extent  not  covered by clause (i)
hereof,  the aggregate of all expenditures by such person to acquire by purchase
or  otherwise  the  business,  property  or fixed  assets  of, or stock or other
evidence of beneficial ownership of, any other person (other than the portion of
such  expenditures  allocable in accordance with GAAP to net current assets) and
(iii) all  Investments  by such  person in respect of any  existing or new Joint
Venture or any Subsidiary of ASI which is not a Designated Subsidiary, provided,
that this clause (iii) shall not include as Capital Expenditures  Investments by
such person of licenses and similar contract rights with respect to intellectual
property,  technology,  or know-how of ASI, in any existing or new Joint Venture
or any Subsidiary of ASI which is not a Designated Subsidiary;  provided further
that  notwithstanding  anything herein to the contrary (I) Capital  Expenditures
shall not include (A) the  contribution  by ASI of its 67.5% interest in Hua Mei
to one of the  LDC  Holding  Companies,  or the  reinvestment  by ASI in any LDC
Holding Company of any fees,  royalties or dividends received in connection with
the  establishment  and activities of such LDC Holding Company or Joint Ventures
in which such LDC Holding Company participates,  (B) the contribution by ASI and
SCI of any interest in machinery,  equipment,  inventory and related  intangible
assets  with an  aggregate  book  value  on the  books of ASI not in  excess  of
$8,000,000 to the  SCI/Heatcraft  Joint Venture,  (C) any expenditure that would
otherwise be  considered a "Capital  Expenditure"  consisting  of fixed  assets,
stock  or  other  capital  assets  already  owned  by  ASI or a  Subsidiary  and
contributed  by way of  Investment  in any other  person  or (D) any  Investment
described  in clause  (n) of  Section  6.05 that is  redeemed,  repaid,  sold or
otherwise  liquidated  in the same  fiscal  year as  originally  made,  it being
understood  that to the extent any such  Investment is not so redeemed,  repaid,
sold or otherwise  liquidated in such fiscal year, the balance thereof shall not
be  included  as a Capital  Expenditure  until  the  following  fiscal  year for
purposes of calculating  Consolidated Free Cash Flow of ASI and (II) any portion
of Capital  Expenditures  described in clauses (ii) and (iii) above accrued as a
liability  shall  not be  included  as  Capital  Expenditures  for  purposes  of
calculating  Consolidated  Free Cash Flow of ASI until such liability is paid in
cash.

     "Capital  Lease",  as  applied to any  person,  shall mean any lease of any
property  (whether real,  personal or mixed) by that person as lessee which,  in
accordance  with GAAP,  is or should be accounted  for as a capital lease on the
balance sheet of that person.

     "Capital  Lease  Obligations"  of any person shall mean the  obligations of
such  person  to pay  rent  or  other  amounts  under  any  lease  of (or  other
arrangement  conveying  the  right  to use)  real  or  personal  property,  or a
combination  thereof,  which  obligations  are  required  to be  classified  and
accounted  for as capital  leases on a balance  sheet of such person  under GAAP
applied on a consistent basis and, for





<PAGE>





the purposes of this Agreement, the amount of such obligations at any time shall
be the  capitalized  amount thereof at such time  determined in accordance  with
GAAP applied on a consistent basis.

     "Cash  Available for Principal  Payments"  shall mean, for any period,  the
Consolidated Net Income of ASI for such period, plus, without  duplication,  (a)
the amount of  depreciation,  depletion,  amortization of intangibles,  deferred
taxes,   amortization  of  debt  discount  and  debt  issuance  costs,  accreted
zero-coupon  and other  non-cash  interest  expense,  amortization  of  non-cash
discount and non-cash cost of Currency  Protection  Agreements and Interest Rate
Protection  Agreements and other  non-cash  items  deducted in determining  such
Consolidated  Net Income,  (b) the  amount,  if any,  by which  Working  Capital
decreased during such period (except to the extent  attributable to a Prepayment
Event), (c) the amount, if any, by which Net Joint Venture Investments decreased
during such period (except to the extent  attributable  to a Prepayment  Event),
and (d)  the  amount,  if any,  of  cash  received  by ASI and its  Consolidated
Subsidiaries  during such period  pursuant to  transactions  not in the ordinary
course of  business,  to the extent  receipt of such cash is (x) not included in
income in determining such  Consolidated Net Income but to be included in income
in a later  period or periods or (y) not  attributable  to a  Prepayment  Event,
minus,  without  duplication,  (i) the amount of any non-cash  items included in
income in determining such Consolidated Net Income,  (ii) the amount, if any, by
which Working Capital increased during such period,  (iii) the amount of Capital
Expenditures of ASI and its Consolidated Subsidiaries (determined without giving
effect to clause  (I) of the  further  proviso  in the  definition  of  "Capital
Expenditures")  during such period  (excluding (A) Capital  Expenditures  to the
extent attributable to Capital Leases or otherwise financed by the incurrence of
Indebtedness,  other than Loans and (B) Capital  Expenditures in connection with
the repair,  restoration  or  replacement of any property or asset that suffered
any casualty, to the extent of insurance proceeds),  (iv) the amount, if any, by
which Net Joint  Venture  Investments  increased  during  such  period,  (v) the
amount, if any, of items included in income in determining such Consolidated Net
Income  representing  cash received and included in calculating  "Cash Available
for Principal  Payments" in a previous  period  pursuant to clause (d) above and
(vi) to the extent not deducted in determining such Consolidated Net Income, the
amount of premiums paid in cash by ASI and its Consolidated  Subsidiaries during
such period in connection with the prepayment or redemption of Indebtedness  and
the  amount  of debt  issuance  costs  paid in cash by ASI and its  Consolidated
Subsidiaries   during  such  period  in  connection   with  the   incurrence  of
Indebtedness;  provided,  however,  that (1) for  purposes of  calculating  Cash
Available for Principal  Payments,  Consolidated  Net Income shall be determined
without  regard  to any  gains,  losses,  taxes or  expenses  resulting  from or
incurred in connection with a Prepayment  Event, and (2) if the income (loss) of
any  Excluded   Subsidiary  was  excluded  for  purposes  of  determining   such
Consolidated Net Income for such period,  then all the accounts of such Excluded
Subsidiary also shall be excluded for all purposes of calculating Cash Available
for Principal Payments for such period, as though such Excluded  Subsidiary were
an unconsolidated Joint Venture during the entire period.

     "Cash Equivalents" shall mean (i) marketable  securities issued or directly
and fully guaranteed or insured by the United States of America or any agency or
instrumentality  thereof  (provided that the full faith and credit of the United
States of America is pledged in support  thereof) having  maturities of not more
than  six  months  from  the  date  of  acquisition,   (ii)  time  deposits  and
certificates of deposit of any domestic  commercial bank of recognized  standing
having capital and surplus in excess of $500,000,000 with maturities of not more
than six months from the date of acquisition,  (iii) repurchase obligations with
a term of not more  than  seven  days for  underlying  securities  of the  types
described  in  clause  (i)  entered  into  with  any  bank  or  other  financial
institution meeting the qualifications  specified in clause (ii) above; provided
that the terms of such  repurchase  agreements  comply with the  guidelines  set
forth in the Federal  Financial  Institutions  Examination  Council  Supervisory
Policy-Repurchase  Agreements of Depository Institutions with Securities Dealers
and Others,  as adopted by the  Comptroller of the Currency on October 31, 1985,
and (iv)  commercial  paper  issued by the parent  corporation  of any  domestic
commercial  bank of recognized  standing having capital and surplus in excess of
$500,000,000,  and commercial paper rated at least A-2 or the equivalent thereof
by S&P or at least P-2 or the  equivalent  thereof by  Moody's  and in each case
maturing within six months after the date of acquisition.

     "Cash  Pooling  Arrangement"  shall  mean an  arrangement  among  a  single
depository  institution  and  two or  more  Foreign  Subsidiaries  in  the  same
jurisdiction involving the pooling of cash deposits by such Foreign Subsidiaries
for cash management purposes.






<PAGE>





     A "Change in Control" shall be deemed to have occurred if (a) any person or
group  (within  the  meaning  of  Rule  13d-5  of the  Securities  and  Exchange
Commission  as in effect on the date hereof)  other than Kelso and its officers,
directors  and  Affiliates,  the ESOP and  officers,  directors and employees of
Holding, ASI and their respective Subsidiaries shall own directly or indirectly,
beneficially or of record,  shares  representing  more than 30% of the aggregate
ordinary voting power of the outstanding  capital stock of Holding and Kelso and
its officers,  directors and  Affiliates,  the ESOP and officers,  directors and
employees of Holding,  ASI and their respective  Subsidiaries shall at such time
beneficially own,  directly or indirectly,  in the aggregate a lesser percentage
of the total voting power of the outstanding  capital stock of Holding than such
other  person or group and shall not have the right or ability by voting  power,
contract or  otherwise to elect or cause the election of a majority of the Board
of Directors  of Holding;  (b) a majority of the seats on the Board of Directors
of Holding  shall at any time have been  occupied  by persons  who were  neither
nominated  nor  appointed by the Board of Directors of Holding or by Kelso;  (c)
any  person  or  group,  other  than  Kelso  and  its  officers,  directors  and
Affiliates,  the ESOP and officers,  directors and employees of Holding, ASI and
their respective Subsidiaries, shall otherwise Control Holding; (d) at any time,
Holding  shall cease to directly own 100% of the capital stock of ASI other than
preferred stock with an aggregate liquidation preference not to exceed $100,000;
or (e) a change in control (or similar event,  however  denominated) shall occur
under and as defined in any indenture to which ASI is party.

     "Charges" shall have the meaning specified in Section 10.06.

     "CIBL"  shall mean  Chemical  Investment  Bank  Limited,  a United  Kingdom
corporation.

     "Code"  shall mean the Internal  Revenue  Code of 1986,  as the same may be
amended from time to time.

     "Collateral"  shall  mean all the  collateral  pledged or  purported  to be
pledged pursuant to any of the Security Documents.

     "Collateral Account" shall mean the Collateral Account established pursuant
to the Collateral Account Agreement.

     "Collateral  Account Agreement" shall mean the collateral account agreement
in form and substance  satisfactory to the Administrative  Agent, as amended and
supplemented from time to time in accordance with the terms thereof and hereof.

     "Collateral  Agent" shall mean,  in respect of any Security  Document,  the
Administrative  Agent or other person  acting as  collateral  agent,  mortgagee,
grantee,  collateral trustee or other representative thereunder on behalf of the
holders of the Obligations secured thereby.

     "Collateral  Trust  Agreement"  shall mean the Second  Amended and Restated
Collateral  Trust  Agreement  dated as of June 1, 1993  between ASI and Chemical
Bank, as Collateral  Trustee,  as amended and supplemented  from time to time in
accordance with the terms thereof and hereof.

     "Commitment Fee" shall have the meaning specified in Section 2.05(b).

     "Commitments"  shall mean,  with respect to any Lender,  such Lender's Term
Loan  Commitment,  Periodic  Access Loan  Commitment,  U.S. $  Revolving  Credit
Commitment and Multi- Currency  Revolving Credit  Commitment and, in the case of
the Swingline Lender, the Swingline Commitment.

     "Consolidated  Capital  Expenditures" shall mean, with respect to a person,
the  Capital  Expenditures  of such  person and its  Consolidated  Subsidiaries,
determined on a consolidated basis in accordance with the definition of the term
"Capital Expenditures" and otherwise in accordance with GAAP; provided,  that in
computing the Consolidated  Capital  Expenditures of ASI for any period, (i) any
Capital  Expenditure  shall be excluded to the extent the consideration for such
Capital  Expenditure   consisted  of  common  stock  of  Holding  and  (ii)  any
acquisition of a company, a division of a company or a similar business unit (or
of substantially all the assets and business of any of the foregoing) for total





<PAGE>





consideration   (including  Funded  Debt  incurred  or  assumed)  in  excess  of
$20,000,000  shall be  excluded  if ASI shall so elect  and if such  acquisition
shall be permitted under paragraph (m) of Section 6.05.

     "Consolidated Cash Fixed Charges" of any person shall mean, for any period,
the sum of the amounts for such period of (i) Consolidated Cash Interest Expense
and (ii) cash dividends on preferred or preference stock of such person that are
made during such period,  all as  determined  on a  consolidated  basis for such
person and its Consolidated Subsidiaries in accordance with GAAP.

     "Consolidated Cash Interest Expense" shall mean, with respect to any person
for any period for which such amount is being determined,  Consolidated Interest
Expense of such person for such period less the sum of (x)  amortization of debt
discount and debt  issuance  costs and accreted,  zero-coupon  and other noncash
interest  expense and (y)  amortization of noncash  discount and noncash cost of
Currency Protection  Agreements and Interest Rate Protection Agreements for such
person, in each case, for such period.

     "Consolidated EBITDA" shall mean for any person,  without duplication,  for
any period for which such amount is being determined, the sum for such period of
(i)  Consolidated  Net Income,  (ii) provision for taxes based on income,  (iii)
Consolidated   Interest   Expense  and  (iv)  other  noncash  items   (including
depreciation expense and amortization expense) reducing Consolidated Net Income,
all as determined on a consolidated  basis for such person and its  Consolidated
Subsidiaries  in accordance with GAAP. In computing  Consolidated  EBITDA of ASI
for any period which  includes one or more fiscal  quarters in fiscal year 1994,
the effect of the 1994 Special Charges shall be excluded.

     "Consolidated  Free Cash Flow"  shall mean,  for any  period,  Consolidated
EBITDA for such period minus Consolidated Capital Expenditures for such period.

     "Consolidated  Interest  Expense" shall mean (adjusted on a pro forma basis
to include the  Transactions as though the  Transactions  occurred on January 1,
1994), with respect to any person, for any period for which such amount is being
determined,  total interest  expense  (including  that properly  attributable to
Capital  Leases in accordance  with GAAP and  amortization  of debt discount and
debt  issuance  costs) of such  person and its  Consolidated  Subsidiaries  on a
consolidated  basis,   including  all  capitalized  interest,  all  commissions,
discounts  and other fees and charges owed with respect to letters of credit and
bankers'  acceptance  financings  and net costs under  Interest Rate  Protection
Agreements   (including   amortization  of  discount)  and  Currency  Protection
Agreements.

     "Consolidated  Net Income"  shall  mean,  for any person for any period for
which such amount is being determined,  the net income (loss) of such person and
its Consolidated  Subsidiaries  during such period  determined on a consolidated
basis for such period taken as a single  accounting  period in  accordance  with
GAAP;  provided  that there shall be excluded (i) income (or loss) of any person
(other  than a  Consolidated  Subsidiary  of the  person  in  respect  of  which
Consolidated  Net Income is being  determined)  in which any other person (other
than  such  person  or any  of  its  Consolidated  Subsidiaries)  has an  equity
interest, except to the extent of the amount of dividends or other distributions
actually  paid to such person or any of its  Consolidated  Subsidiaries  by such
other person during such period, (ii) the income (or loss) of any person accrued
prior to the date it  becomes a  Consolidated  Subsidiary  of such  person or is
merged  into  or  consolidated  with  such  person  or any  of its  Consolidated
Subsidiaries  or the  person's  assets are acquired by such person or any of its
Consolidated  Subsidiaries,  (iii)  the  income  (or  loss) of any  Consolidated
Subsidiary of such person that is an Excluded  Subsidiary,  except to the extent
of the amount of dividends or other  distributions  actually paid to such person
or any  of  its  Consolidated  Subsidiaries  (other  than  to  another  Excluded
Subsidiary) by such Excluded  Subsidiary during such period,  (iv) any after-tax
gains  (but not  pretax  losses)  attributable  to sales  of  assets  out of the
ordinary  course of business,  (v) premium  expense and  write-offs of financing
costs deducted in connection  with the prepayment or redemption of  Indebtedness
and  (vi)  fees,   royalties  or  dividends  received  in  connection  with  the
establishment  and activities of, and reinvested in, any LDC Holding  Company or
Joint Ventures in which such LDC Holding Company participates. If a Consolidated
Subsidiary  is an  Excluded  Subsidiary  at the  time  of any  determination  or
calculation pursuant to this Agreement involving a determination of Consolidated
Net  Income  for  any  period,  then,  for  purposes  of such  determination  or
calculation,  such  Consolidated  Subsidiary  shall be  deemed  to have  been an
Excluded Subsidiary for the entire period (regardless of whether such Subsidiary
was not an Excluded Subsidiary during such period),





<PAGE>





and if at such time a  Consolidated  Subsidiary  is not an Excluded  Subsidiary,
then,  for purposes of such  determination  or  calculation,  such  Consolidated
Subsidiary  shall be deemed not to have been an Excluded  Subsidiary at any time
during  such  period  (regardless  of whether  such  Subsidiary  was an Excluded
Subsidiary at any time during such period).  Consolidated  Net Income of ASI for
fiscal year 1994 shall be  computed on a pro forma basis as if the  Transactions
had occurred on January 1, 1994.

     "Consolidated  Rental  Payments" shall mean, for any period,  the aggregate
amount of all rents paid or payable  under all  Operating  Leases of such person
and its Consolidated  Subsidiaries  (including Excluded  Subsidiaries) as lessee
(net  of  sublease  income),  all  as  determined  on a  consolidated  basis  in
accordance with GAAP.

     "Consolidated Subsidiaries" shall mean, for any person, all Subsidiaries of
such person that should be consolidated with such person for financial reporting
purposes in accordance with GAAP; provided,  however,  that a Subsidiary that is
an Excluded  Subsidiary  shall be  considered to be a Joint  Venture,  and not a
"Consolidated  Subsidiary",  at the  times  and for the  periods  determined  as
provided in the definition of the term "Consolidated Net Income".

     "Consolidated  Total Debt" shall mean, for any person,  all Indebtedness of
such person and its Consolidated  Subsidiaries (other than Indebtedness referred
to in clauses (h), (i) and (j) of the definition of such term),  determined on a
consolidated  basis in  accordance  with  GAAP,  provided  that  there  shall be
excluded $25,000,000 of any Indebtedness permitted pursuant to Section 6.04(u).

     "Contractual  Obligation",  as  applied  to  any  person,  shall  mean  any
provision  of any security  issued by that person or of any material  indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.

     "Control" shall mean the possession,  directly or indirectly,  of the power
to direct or cause the  direction  of the  management  or  policies of a person,
whether  through the ownership of voting  securities,  by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings correlative thereto.

     "Credit Documents" shall mean this Agreement,  the Assignment and Amendment
Agreement, the Credit Documents Amendment, the Notes, the Letters of Credit, the
Security  Documents,  the Swingline Loan Agreement,  the Guarantee Documents and
the Issuing Bank Agreements.

     "Credit  Documents  Amendment"  shall mean the Credit  Documents  Amendment
Agreement dated as of February 9, 1995, among the ASI Subsidiaries,  ASI Parties
(each as  defined in the Credit  Documents  Amendment)  and  Chemical  Bank,  as
Administrative  Agent and Collateral  Agent, as such Credit Documents  Amendment
may from time to time be amended, supplemented or modified.

     "Credit  Facility"  shall mean a category of Commitments  and extensions of
credit  thereunder.  For  purposes  hereof,  each of the  following  comprise  a
separate Credit Facility: (i) the Term Loan Commitments and Term Loans; (ii) the
Periodic Access Loan  Commitments  and Periodic  Access Loans;  (iii) the U.S. $
Revolving  Credit  Commitments,  U.S. $  Revolving  Credit  Loans and U.S. $ L/C
Exposure;  and (iv) the Multi-Currency  Revolving Credit Commitments,  Swingline
Exposure, Multi-Currency Revolving Credit Loans and Multi-Currency L/C Exposure.

     "Credit  Parties"  shall mean Holding,  the  Borrowers  and the  Subsidiary
Guarantors  and each  other  Subsidiary  that is or becomes a member of the EEIG
Borrower.

     "CSI" shall mean Chemical Securities Inc., a Delaware corporation.

     "Currency  Protection  Agreement" shall mean any foreign exchange contract,
currency swap agreement or other financial agreement or arrangement  designed to
protect against fluctuations in currency values.

     "Current  Value"  shall have the  meaning  assigned to such term in Section
5.11.





<PAGE>






     "Default"  shall mean any event or condition  which upon  notice,  lapse of
time or both would constitute an Event of Default.

     "Denomination  Date" shall mean,  in relation to any  Alternative  Currency
Borrowing,  the date that is three  Business Days before the date such Borrowing
is made.

     "Designated  Obligations"  shall mean all Obligations of the Credit Parties
in respect of (a)  principal of and interest on the Loans and (b) Fees,  whether
or not the same shall at the time of any  determination be due and payable under
the terms of the Credit Documents.

     "Designated Subsidiary" shall mean a Subsidiary of which ASI owns, directly
or through one or more other Subsidiaries,  capital stock representing more than
95% of the ordinary voting power.

     "Deutsche Marks" or "DM" shall mean lawful money of Germany.

     "Dollar   Equivalent"  shall  mean,  with  respect  to  an  amount  of  any
Alternative  Currency on any date,  the amount of Dollars  that may be purchased
with such amount of such  Alternative  Currency at the Spot  Exchange  Rate with
respect to such Alternative Currency on such date.

     "Dollars" or "$" shall mean lawful money of the United States of America.

     "Domestic  Guarantee"  shall mean the  Amended,  Consolidated  and Restated
Guarantee  dated  as of  June 1,  1993,  by  Holding,  ASI,  and the  Subsidiary
Guarantors which are Domestic  Subsidiaries,  as amended and  supplemented  from
time to time in accordance with the terms thereof and hereof.

     "Domestic  Obligations" shall mean all Obligations of Holding,  ASI and the
Domestic Subsidiaries.

     "Domestic  Securities  Pledge  Agreements" shall mean the securities pledge
agreements  dated as of June 1, 1993,  between the Collateral Agent and Holding,
ASI and  certain  Subsidiary  Guarantors  that  are  Domestic  Subsidiaries,  as
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof and hereof.

     "Domestic Security  Agreements" shall mean the security agreements dated as
of  June  1,  1993,  between  the  Collateral  Agent  and  Holding,  ASI and the
Subsidiary Guarantors that are Domestic Subsidiaries,  as amended,  supplemented
or otherwise modified from time to time in accordance with the terms thereof and
hereof.

     "Domestic  Subsidiary"  shall mean a direct or indirect  subsidiary  of ASI
which is not a Foreign Subsidiary.

     "Dutch  Borrower"  shall mean WABCO  Standard  Trane  B.V.,  a  corporation
organized under the laws of the Kingdom of the Netherlands.

     "EEIG Borrower" shall mean Standard  Europe, a European  Economic  Interest
Grouping  organized  by  French  and  Italian  Subsidiaries  of  ASI to act as a
Borrower hereunder.

     "Effective Date" shall mean February 9, 1995.

     "Election Date" shall have the meaning specified in Section 2.04(b).

     "ll-3/8% Senior  Debentures" shall mean ASI's 11-3/8% Senior Debentures Due
2004.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
the same may be amended from time to time.






<PAGE>





     "ERISA  Affiliate",  as  applied to any  Borrower,  shall mean any trade or
business (whether or not incorporated) that is a member of a group of which such
Borrower is a member and which is treated as a single employer under Section 414
of the Code.

     "ESOP"  shall mean the  American-Standard  Employee  Stock  Ownership  Plan
created  pursuant to an instrument  entitled  "American-Standard  Employee Stock
Ownership Plan" and dated as of April 23, 1988, as amended from time to time.

     "Event of Default" shall have the meaning specified in Article VII.

     "Excess Cash Flow" shall mean, for any period,  the excess, if any, of Cash
Available  for  Principal  Payments  for  such  period  over  the sum of (a) all
principal  payments   (including  cash  payments  in  respect  of  accreted  and
zero-coupon interest obligations) made by ASI and its Consolidated  Subsidiaries
during  such  period  as  required  repayments  pursuant  to  the  terms  of any
Indebtedness  of ASI or any of its  Subsidiaries  permitted under this Agreement
(including  the Loans),  but excluding (i) any such  principal  payments made in
respect of the Loans pursuant to Section 2.11, (ii) any such principal  payments
to the extent  refinanced with the incurrence of other  Indebtedness,  (iii) any
such  principal  payments in respect of  Indebtedness  of the type  described in
clause (h) or (i) of the  definition of the term  "Indebtedness",  (iv) any such
principal  payments  in  respect  of  Intercompany  Indebtedness,  (v) any  such
principal  payments in respect of  Indebtedness  described in any of clauses (e)
(other  than  prepayments  which  permanently  reduce the amount of a  Permitted
Receivables  Financing),  (f),  (g), (h), (i), (l), (n), (p), (q), (s) or (t) of
Section  6.04 and (vi) any such  principal  payments in respect of  Indebtedness
incurred  after the date hereof in reliance  upon clause (o) of Section 6.04 and
(b) the  aggregate  amount by which the Total  Periodic  Access  Commitment  was
reduced during such period pursuant to Section 2.10(b); provided,  however, that
if the  accounts  of any  Excluded  Subsidiary  were  excluded  for  purposes of
determining  Cash  Available  for Principal  Payments for such period,  then any
principal payments made by such Excluded  Subsidiary during such period shall be
disregarded for purposes of calculating Excess Cash Flow for such period.

     "Excess  Cash  Prepayment  Amount"  shall mean,  with respect to any fiscal
year,  an amount  equal to 50% of the excess of (a) the Excess  Cash Flow of ASI
and its  Consolidated  Subsidiaries  for such fiscal  year,  beginning  with the
fiscal year ending December 31, 1995, over (b) the aggregate amount of principal
payments made during such fiscal year in respect of Term Borrowings  pursuant to
Section  2.11(a) and the  aggregate  amount by which the Total  Periodic  Access
Commitment  was reduced  during such fiscal year pursuant to Section  2.10(c) in
connection with such prepayments of Term Borrowings.

     "Excluded  Subsidiary" shall mean (i) any Foreign Subsidiary of ASI that is
prevented from paying dividends or similar  distributions by any applicable law,
rule,  regulation  or order of any  Governmental  Authority  outside  the United
States,  or the payment of  dividends or similar  distributions  by such Foreign
Subsidiary  would,  by reason of any such law,  rule,  regulation  or order,  be
subject to materially burdensome conditions or costs that render payment of such
dividends or distributions commercially unreasonable, in each case as reasonably
determined  by the  Board of  Directors  of ASI,  and (ii) any  Subsidiary  of a
Foreign Subsidiary  referred to in the preceding clause (i); provided,  however,
that a Borrower shall not be an Excluded Subsidiary.  A Foreign Subsidiary shall
constitute an Excluded Subsidiary upon delivery to the Administrative Agent of a
certificate  executed  by  the  Secretary  or  an  Assistant  Secretary  of  ASI
certifying  that ASI's  Board of  Directors  has  determined  that such  Foreign
Subsidiary  is an  Excluded  Subsidiary  in  accordance  with the  terms of this
Agreement,  and thereafter such Foreign Subsidiary and its Subsidiaries shall be
considered  Excluded  Subsidiaries  unless  and until the  Administrative  Agent
receives a certificate  executed by the  Secretary or an Assistant  Secretary of
ASI certifying  that ASI's Board of Directors has  determined  that such Foreign
Subsidiary shall no longer  constitute an Excluded  Subsidiary due to a material
change in the  applicable  law,  rule,  regulation or order that resulted in the
designation of such Subsidiary as an Excluded Subsidiary.

     "Excluded  Taxes" shall mean any present or future taxes,  duties,  levies,
imposts or other  governmental  charges on or measured by the overall net income
of any Lender or its applicable  lending office or branch (including any advance
payment of such taxes,  duties,  levies,  imposts or other governmental  charges
collected by means of  withholding),  and all  franchise  taxes,  taxes on doing
business or taxes  measured by capital or net worth imposed on any Lender or its
applicable lending office or





<PAGE>





branch,  (i) imposed by the jurisdiction  under the laws of which such Lender is
organized,  or in which its  principal  executive  office is located,  or by any
country  within  which  any  such  jurisdiction  is  located  or  any  political
subdivision  thereof;  (ii) imposed by the  jurisdiction in which the applicable
lending  office or branch of such Lender is located,  or in which its  principal
executive  office  is  located,   or  by  any  country  within  which  any  such
jurisdiction is located or any political  subdivision  thereof; or (iii) imposed
by any other jurisdiction,  but only to the extent such taxes,  duties,  levies,
imposts,  assessments or other governmental  charges would not have been imposed
but for any other connection  between the jurisdiction  imposing such tax, duty,
levy, impost,  assessment or other  governmental  charge and such Lender or such
applicable  lending office or branch (other than a connection  arising from this
Agreement  or any  transaction  contemplated  thereby).  For  purposes  of  this
definition,   "Lender"  shall  have  the  meaning  ascribed  to  it  in  Section
2.18(i)(ii).

     "Fees" shall mean the  Commitment  Fees,  the L/C  Participation  Fees, the
Upfront Fees, the Issuing Bank Fees and the Agent and Administrative Fees.

     "Finance Subsidiary" shall mean a special purpose subsidiary engaged solely
in  purchasing,  owning  and  financing  receivables  as  part  of  a  Permitted
Receivables Financing.

     "Financial  Officer"  of any  corporation  shall  mean the chief  financial
officer,   principal  accounting  officer,   Treasurer  or  Controller  of  such
corporation.

     "Foreign  Cash  Equivalents"  shall mean (i) direct  obligations  issued or
unconditionally  guaranteed  by the  government  of the  country  in  which  any
Borrower  is  incorporated  or has  its  principal  place  of  business,  or the
government of the country in which the Foreign  Subsidiary  investing therein is
incorporated  or has its  principal  place  of  business,  in each  case  having
maturities  of not more than six months  from the date of  acquisition  and (ii)
direct demand obligations of principal banking  institutions located in any such
country.

     "Foreign  Guarantees"  shall mean the guarantees  executed and delivered by
the Subsidiary Guarantors who are Foreign Subsidiaries, as amended, supplemented
or otherwise modified from time to time in accordance with the terms thereof and
hereof.

     "Foreign  Pension  Plan"  shall  mean any  pension  plan or other  deferred
compensation plan,  program or arrangement  maintained by any Foreign Subsidiary
which,  under  applicable local law, is required to be funded through a trust or
other funding vehicle.

     "Foreign  Security  Agreements" shall mean the security  agreements,  trust
indentures  and  debentures  between the  Collateral  Agent and certain  Foreign
Subsidiaries,  as amended,  supplemented or otherwise modified from time to time
in accordance with the terms thereof and hereof.

     "Foreign  Subsidiary" shall mean each direct or indirect  Subsidiary of ASI
which was created or organized  under the laws of a jurisdiction  other than the
United States of America, any state thereof or the District of Columbia.

     "Foreign  Supplemental  Documents"  shall  have the  meaning  specified  in
Section 5.12(b).

     "French Francs" or "FFr." shall mean lawful money of France.

     "Funded  Debt" of any person  shall mean all  Indebtedness  of such  person
described in clauses (a), (b),  (c), (d), (f), (g) and (i) of the  definition of
"Indebtedness"  which,  by its  terms  or by the  terms  of  any  instrument  or
agreement relating thereto,  matures,  or which is otherwise payable,  more than
one year from,  or is directly or  indirectly  renewable  or  extendable  at the
option of the  debtor to a date more than one year  (including  an option of the
debtor under a revolving  credit or similar  agreement  obligating the lender or
lenders to extend  credit  over a period of more than one year) from the date on
which Funded Debt is to be determined.

     "GAAP" shall mean United States generally accepted accounting principles.






<PAGE>





     "German  Borrower" shall mean WABCO Standard GmbH, a corporation  organized
under the laws of Germany.

     "Governmental  Authority" shall mean any Federal,  state,  local or foreign
court or governmental agency, authority, instrumentality or regulatory body.

     "Guarantee"  of or by any person shall mean any  obligation,  contingent or
otherwise,  of such  person  guaranteeing  or  having  the  economic  effect  of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner,  whether  directly or  indirectly,  and including any obligation of such
person,  direct or indirect,  (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such  Indebtedness or to purchase (or to advance
or supply  funds for the  purchase  of) any  security  for the  payment  of such
Indebtedness,  (b) to purchase property,  securities or services for the purpose
of assuring the owner of such  Indebtedness of the payment of such  Indebtedness
or (c) to maintain working capital,  equity capital or other financial statement
condition  or  liquidity  of the  primary  obligor so as to enable  the  primary
obligor to pay such  Indebtedness;  provided,  however,  that the term Guarantee
shall not include (i) endorsements for collection or deposit,  in either case in
the  ordinary  course of business or (ii) any  agreement  by ASI or a Subsidiary
thereof to provide working capital to one of its Subsidiaries, if such agreement
is entered into as consideration for obligations incurred by such Subsidiary for
the benefit of ASI or any of its other  Subsidiaries  and such  agreement is not
enforceable by third parties.  The amount of any Guarantee shall be deemed to be
an amount equal to the stated or determinable  amount of the primary  obligation
in respect of which such  Guarantee  is made or, if not stated or  determinable,
the maximum reasonably  anticipated  liability in respect thereof (assuming such
person is required to perform thereunder); provided, however, that the amount of
any Guarantee  that,  by its terms,  limits the amount  payable  thereunder to a
stated or  determinable  amount  shall not exceed  such  stated or  determinable
amount.

     "Guarantee  Documents"  shall  mean the  Domestic  Guarantee,  the  Foreign
Guarantees and any Supplemental Guarantees.

     "Guarantor" shall mean each of Holding, ASI and each Subsidiary Guarantor.

     "Heatcraft  Notes" shall mean  promissory  notes of Heatcraft  Technologies
Inc.  in an  aggregate  principal  amount  of  $34,500,000  contributed  to  the
SCI/Heatcraft Joint Venture and distributed by such Joint Venture to SCI.

     "Holding"  shall  have  the  meaning  specified  in  the  heading  of  this
Agreement.

     "Hua Mei" shall mean Hua Mei Sanitary  Ware Company  Ltd., a subsidiary  of
ASI organized in the Peoples Republic of China.

     "Indebtedness"  of any person shall mean (a) all obligations of such person
for  borrowed  money,  (b) all  obligations  of such person  evidenced by bonds,
debentures,  notes or similar  instruments,  (c) all  obligations of such person
under conditional sale or other title retention  agreements relating to property
or assets  purchased  by such  person  (other  than  customary  reservations  or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such person issued or assumed as the
deferred purchase price of property or services  purchased by such person (other
than trade debt  incurred in the ordinary  course of business and due within six
months of the incurrence thereof) which would appear as liabilities on a balance
sheet of such person,  (e) all  Indebtedness  of others secured by (or for which
the holder of such Indebtedness has an existing right,  contingent or otherwise,
to be secured by) any Lien on property owned or acquired by such person, whether
or not the obligations secured thereby have been assumed,  (f) all Guarantees by
such person of Indebtedness of others, (g) all Capital Lease Obligations of such
person,  (h)  all  obligations  of such  person  in  respect  of  interest  rate
protection agreements, foreign currency exchange agreements,  commodity purchase
or option  agreements  or other  interest or exchange  rate or  commodity  price
hedging  arrangements,  (i) all  obligations  (contingent  or otherwise) of such
person as an account  party in respect  of  letters  of credit  (other  than (x)
documentary letters of credit (including commercial and trade letters of credit)
issued to secure  payment  obligations  in respect of goods and  services in the
ordinary  course of  business  and (y)  letters of credit and surety  bonds with
respect to obligations of such person to the extent





<PAGE>





such  obligations  are accounted for as liabilities in the financial  records of
such  person)  and  bankers'   acceptances  and  (j)  the  aggregate  amount  of
uncollected  accounts  receivable  of such  person  subject  at  such  time to a
Permitted  Receivables  Financing  (or any similar  transaction),  regardless of
whether such  transaction  is effected  without  recourse to such person or in a
manner that would not  otherwise be reflected as a liability on a balance  sheet
of such person in accordance with GAAP;  provided that in determining the amount
of any  Indebtedness,  Guarantees of such  Indebtedness  shall not be taken into
account to the extent the guaranteed  Indebtedness is itself taken into account.
The Indebtedness of any person shall include the Indebtedness of any partnership
in  which  such  person  is  a  general  partner,  except  to  the  extent  such
Indebtedness is not reflected in the consolidated  financial  statements of such
person and neither  ASI nor any of its  Subsidiaries  (other  than a  Subsidiary
owning  no  assets  other  than  the  general   partnership   interest  in  such
partnership)   shall  have  any  direct  or   contingent   liability   for  such
Indebtedness.

     "Indemnitees" shall have the meaning specified in Section 10.01(b).

     "Information Memorandum" shall mean the Confidential Information Memorandum
dated November 1994 prepared by CSI and Chemical Bank from information  provided
by ASI and third parties and relating to the transactions contemplated hereby.

     "Intercompany  Indebtedness"  shall  mean  any  Indebtedness  of ASI or any
Subsidiary of ASI which,  in the case of ASI, is owing to any  Subsidiary of ASI
and which,  in the case of any  Subsidiary  of ASI, is owing to ASI or any other
Subsidiary of ASI.

     "Intercompany  Merger and Transfer  Conditions"  shall mean, in the case of
any liquidation,  dissolution,  winding up, merger, consolidation or transfer or
acquisition  of  assets,  (a) that no Event of  Default  or  Default  shall have
occurred and be  continuing;  (b) that after giving effect to such  transaction,
(i) except in the case of any transfer or acquisition of less than substantially
all the assets of any person,  the  surviving or resulting  person or the person
acquiring or  succeeding  to the assets of one or more other  persons shall have
assumed or become responsible by operation of law for all the Obligations of the
other  person or persons  involved  in such  transfer or  acquisition;  (ii) the
assets and anticipated cash flows of each Borrower,  the Borrower Group of which
is  involved in such  transaction  will,  in the good faith  judgment of ASI, be
adequate to support the  Obligations  of such Borrower  without giving effect to
guarantees and Liens provided or granted by persons which are not members of the
same Borrower  Group;  and (iii) the capital  stock and assets  involved in such
transaction will have been subjected,  upon completion of such  transaction,  to
Liens under the Security  Documents to secure the  Obligations of the members of
the  Borrower  Group  owning  such  capital  stock  and  assets  and  the  other
Obligations  to the maximum  extent  practicable  without giving rise to (A) any
violation  of  applicable  law,  (B)  liability  of the  officers,  directors or
shareholders of ASI or any of its Subsidiaries,  (C) violation of the provisions
of any joint  venture or other  material  agreement  governing or binding ASI or
such  Subsidiary,  (D)  any  deemed  dividend  to ASI  or  any  of its  domestic
subsidiaries  under  Section 956 (or any successor  provision) of the Code,  (E)
material risk of any of the foregoing or (F) costs which ASI and the  Collateral
Agent shall  determine to be excessive in relation to the benefits that would be
conferred  by such  additional  instruments  or  documents  (and each Lender and
Issuing Bank authorizes the Collateral Agent, acting in good faith, to make such
determination);  (c) that such  transaction  shall have been carried out in good
faith for valid  business  purposes  and not with a view to limiting or avoiding
any claims or security interests of the Lenders or the Collateral Agent; and (d)
that, in the case of any such transaction  involving assets with a book value in
excess of $25,000,000 or the equivalent  thereof in another currency,  ASI shall
have delivered to the Administrative Agent an Officers' Certificate stating that
the  conditions  set forth in  clauses  (a),  (b) and (c)  above (to the  extent
applicable) have been satisfied.

     "Intercompany   Notes"   shall  mean  (i)   promissory   notes   evidencing
Intercompany Indebtedness which promissory notes, if owed to or held by a Credit
Party,  shall,  unless otherwise agreed by the Administrative  Agent, be payable
upon demand (or, in the case of any such  promissory  notes  issued by a Foreign
Subsidiary, within such period after demand as is customary or required in order
to satisfy  applicable  legal  requirements,  but in any event within six months
after  demand)  and bear  interest  at  current  market  rates  and shall not be
subordinated  to  any  other  Indebtedness  of  the  debtor,  except  that  such
promissory  notes  owed by any  Credit  Party to any  Subsidiary  which is not a
Credit  Party  shall  be,  to the  full  extent  permitted  by  applicable  law,
subordinated to the payment in full in cash in the applicable





<PAGE>





currency upon the maturity (at stated maturity, by acceleration or otherwise) of
all obligations of such person to the Administrative Agent, the Collateral Agent
and the  Lenders  hereunder  and under the other  Credit  Documents  and of such
person to a Credit Party and (ii) certain  customary  nonnegotiable  instruments
executed in accordance with the laws of Germany,  Austria or other countries and
evidencing Intercompany Indebtedness on the same terms and to the same effect as
the promissory notes set forth in clause (i) above.

     "Interest Payment Date" shall mean, with respect to any Borrowing, the last
day of the  Interest  Period  applicable  thereto  and, in the case of any LIBOR
Borrowing with an Interest Period of more than three months' duration,  each day
that would have been an Interest  Payment Date for such Borrowing had successive
Interest  Periods of three months'  duration been  applicable to such  Borrowing
and, in addition,  the date of any  refinancing  or conversion of such Borrowing
with or to a Borrowing of a different Type.

     "Interest  Period"  shall  mean (a) as to any LIBOR  Borrowing,  the period
commencing on the date of such  Borrowing or on the last day of the  immediately
preceding Interest Period applicable to such Borrowing,  as the case may be, and
ending on the  numerically  corresponding  day (or,  if there is no  numerically
corresponding  day, on the last day) in the calendar  month that is 1, 2, 3 or 6
months  thereafter,  as the  applicable  Borrower  may elect,  (b) as to any ABR
Borrowing (other than a Swingline  Loan),  the period  commencing on the date of
such  Borrowing and ending on the earlier of (i) the next  succeeding  day which
shall be the last day of any of February,  May,  August or November and (ii) the
applicable Maturity Date and (c) as to any Swingline Loan, the period commencing
on the date of such Swingline Loan and ending on the earlier of (i) the day that
is five Business Days thereafter and (ii) the  Multi-Currency  Revolving  Credit
Maturity Date; provided, however, that if any Interest Period would end on a day
other than a Business Day,  such  Interest  Period shall be extended to the next
succeeding Business Day unless, in the case of a LIBOR Borrowing only, such next
succeeding  Business Day would fall in the next  calendar  month,  in which case
such Interest  Period shall end on the next  preceding  Business  Day.  Interest
shall  accrue  from and  including  the first day of an  Interest  Period to but
excluding the last day of such Interest Period.

     "Interest  Rate  Determination  Date" shall mean,  with  respect to a LIBOR
Borrowing,  the date which is two Business Days prior to the commencement of the
Interest Period for such Borrowing.

     "Interest  Rate  Protection  Agreement"  shall mean any interest  rate swap
agreement,  interest  rate  cap  agreement  or  other  financial  agreements  or
arrangements designed to protect against fluctuations in interest rates.

     "Investment",  as applied to any person,  shall mean any direct or indirect
purchase or other acquisition by that person of, or beneficial  interest of that
person  in,  stock or other  securities  of any other  person  or any  direct or
indirect loan,  advance (other than advances to employees for purchases of stock
pursuant to any employee  benefit plan or arrangement of ASI or any  Subsidiary,
moving and travel expenses,  drawing accounts and other customary  expenditures,
and  security  deposits,  in each case in the  ordinary  course of  business) or
capital  contribution  by  that  person  to  any  other  person,  including  all
indebtedness  and accounts  receivable  from that other person which (i) are not
current  assets or (ii) did not arise  from  sales to that  other  person in the
ordinary course of business and consistent with past practice. The amount of any
Investment  shall be the original cost of such  Investment  plus the cost of all
additions thereto,  without any adjustments for increases or decreases in value,
or write-ups,  write-downs or write-offs with respect to such  Investment,  less
the amount of such Investment returned in cash.

     "Issuing Bank" shall mean any Lender which shall from time to time be party
to an Issuing Bank Agreement with ASI and the Administrative Agent.

     "Issuing Bank Agreement" shall mean an agreement in substantially  the form
of Exhibit E.

     "Issuing Bank Fees" shall have the meaning specified in Section 2.05(c).

     "Italian Lire" or "LIT" shall mean lawful money of Italy.





<PAGE>






     "Joint Venture" shall mean (i) as to a person,  a corporation,  partnership
or other  legal  entity  or  arrangement  in which  such  person  has an  equity
Investment,  but that is not a subsidiary  of such person,  and (ii) an Excluded
Subsidiary.

     "Judgment Currency" shall have the meaning specified in Section 10.14.

     "Judgment  Currency  Conversion  Date" shall have the meaning  specified in
Section 10.14.

     "Kelso" shall mean Kelso & Company, Inc., a Delaware corporation.

     "L/C  Disbursement"  shall mean a Multi-Currency L/C Disbursement or U.S. $
L/C Disbursement, as the case may be.

     "L/C  Participation  Fee"  shall  have the  meaning  specified  in  Section
2.05(c).

     "LDC Holding  Company" shall mean a holding company  organized or which may
be organized by ASI as a vehicle for holding stock or other ownership  interests
in various joint ventures in lesser developed  countries,  including the Peoples
Republic  of China and  India,  and any  special  purpose  Subsidiary  organized
exclusively  to hold the equity of any such holding  company and owning no other
assets.

     "Lenders" shall have the meaning specified in the heading of this Agreement
and shall include any person that becomes a "Lender" as  contemplated by Section
10.04.

     "Letter of Credit" shall mean any U.S. $ Letter of Credit or Multi-Currency
Letter of Credit.

     "LIBO  Rate"  shall  mean,  with  respect  to any LIBOR  Borrowing  for any
Interest  Period,  (i) the  interest  rate per annum for deposits for a maturity
most nearly  comparable  to such  Interest  Period in the currency in which such
Borrowing is denominated  which appears on page 3740 or 3750, as applicable,  of
the Dow Jones Telerate Screen as of 11:00 a.m.,  London time, on the day that is
two Business Days prior to the first day of such  Interest  Period or, if such a
rate  does not  appear  on page 3740 or 3750,  as  applicable,  of the Dow Jones
Telerate Screen, (ii) an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the rate at which  deposits in the  currency in
which such Borrowing is denominated  approximately  equal in principal amount to
the Loan of the  Administrative  Agent,  in its capacity as a Lender (or, if the
Administrative Agent is not a Lender in respect of such Borrowing, then the Loan
of the Lender in respect  of such  Borrowing  with the  greatest  Loan  amount),
included in such LIBOR Borrowing and for a maturity  comparable to such Interest
Period are offered to the principal London office of the Administrative Agent or
such Lender in immediately  available  funds in the London  interbank  market at
approximately   11:00  a.m.,  London  time  (or,  if  such  LIBOR  Borrowing  is
denominated in Sterling,  in immediately  available funds in the Paris interbank
market at approximately  11:00 a.m., Paris time), on the relevant  Interest Rate
Determination Date.

     "LIBOR Borrowing" shall mean a Borrowing comprised of LIBOR Loans.

     "LIBOR Loan" shall mean any Loan bearing  interest at a rate  determined by
reference to the Adjusted LIBO Rate in accordance with the provisions of Article
II.

     "Lien" shall mean,  with respect to any asset,  (a) any  mortgage,  deed of
trust,  lien,  pledge,  encumbrance,  charge or security  interest in or on such
asset,  (b) the  interest  of a vendor or a lessor  under any  conditional  sale
agreement, capital lease or title retention agreement relating to such asset and
(c) in the case of securities,  any purchase option,  call or similar right of a
third party (other than the issuer) with respect to such securities.

     "Loan" shall mean a Term Loan,  a Periodic  Access Loan, a U.S. $ Revolving
Credit Loan, a Multi-Currency Revolving Credit Loan or a Swingline Loan.





<PAGE>






"Louisiana Facility" shall mean the assets comprising the manufacturing facility
of the SCI/Heatcraft Joint Venture located in Natchitoches, Louisiana.

     "Managing  Agents" shall have the meaning  specified in the heading of this
Agreement.


     "Margin Stock" shall have the meaning given such term under Regulation U.

     "Materially  Adverse Effect" shall mean (a) a materially  adverse effect on
the business,  operations,  condition  (financial or otherwise) or assets of (i)
ASI and its  Subsidiaries  taken as a whole or (ii) the German  Borrower and its
Subsidiaries  taken as a whole, or (b) impairment of rights or benefits material
to the interests of the Lenders and available to the Lenders, the Issuing Banks,
the  Administrative  Agent or the Collateral Agent under the terms of the Credit
Documents.

     "Maturity  Date" shall mean the Term Facility  Maturity  Date, the Periodic
Access  Maturity  Date,  the  U.S.  $  Revolving  Credit  Maturity  Date  or the
Multi-Currency Revolving Credit Maturity Date, as the context may require.

     "Maximum Available Amount" shall have the meaning specified in Article VII.

     "Maximum Rate" shall have the meaning specified in Section 10.06.

     "Moody's" shall mean Moody's Investors Service, Inc.

     "Mortgage" shall mean a term loan and revolving credit mortgage, assignment
of rents,  security  agreement and fixture filing,  or a term loan and revolving
credit deed of trust, assignment of rents, security agreement and fixture filing
or similar  instrument  creating and  evidencing  a Lien on a Real  Property and
other  property  and rights  incidental  to such Real  Property,  which shall be
substantially  in the form of Exhibit F, containing such schedules and including
such additional  provisions and other  deviations from such Exhibit as shall not
be inconsistent  with the provisions of Section 4.02(h) or shall be necessary to
conform such Exhibit to applicable foreign or local law and which shall be dated
the  date of  delivery  thereof  and  made by the  owner  of the  Real  Property
described  therein for the benefit of the  Collateral  Agent,  as mortgagee  (or
beneficiary),  assignee  and  secured  party,  as the  same  may at any  time be
amended,  modified or  supplemented  in  accordance  with the terms  thereof and
hereof and, in each case, with such changes therein (whether before or after the
execution and delivery thereof) as are otherwise permitted by Section 10.10.

     "Mortgaged  Properties"  shall  mean  the  Real  Properties  identified  as
"Mortgaged Properties" on Schedule 3.12(b) and each other Real Property required
to be subjected to a Mortgage under Section 5.11.

     "Multi-Currency L/C Disbursement" shall mean a payment or disbursement made
by an Issuing Bank pursuant to a Multi-Currency Letter of Credit.

     "Multi-Currency  L/C  Exposure"  shall  mean at any time the sum of (a) the
aggregate undrawn amount of all outstanding  Multi-Currency Letters of Credit at
such time that are denominated in Dollars, plus (b) the Assigned Dollar Value at
such time of the  aggregate  undrawn  amount of all  outstanding  Multi-Currency
Letters of Credit at such time that are  denominated in Alternative  Currencies,
plus (c) the aggregate  principal amount of all Multi-Currency L/C Disbursements
denominated in Dollars that have not yet been  reimbursed at such time, plus (d)
the Assigned Dollar Value at such time of the aggregate  principal amount of all
Multi-Currency L/C Disbursements denominated in Alternative Currencies that have
not yet been  reimbursed at such time.  The  Multi-Currency  L/C Exposure of any
Multi-Currency  Revolving  Credit  Lender at any time shall mean its  Applicable
Percentage of the aggregate Multi-Currency L/C Exposure at such time.

     "Multi-Currency  Letter of Credit"  shall mean a Letter of Credit issued by
an  Issuing  Bank  pursuant  to  Section  2.19  on  behalf  of  Lenders  holding
Multi-Currency Revolving Credit





<PAGE>





     Commitments  (including the Scheduled Letters of Credit deemed to have been
so issued pursuant to Section 2.19).

     "Multi-Currency   Revolving  Credit   Borrowing"  shall  mean  a  Borrowing
comprised of Multi-Currency Revolving Credit Loans.

     "Multi-Currency  Revolving Credit  Commitment"  shall mean, with respect to
any Lender at any time,  the  commitment  (if any) of such  Lender to make loans
pursuant to Section 2.01(c), to acquire participations in Multi-Currency Letters
of Credit  pursuant to Section 2.19 and to acquire  participations  in Swingline
Loans  pursuant to Section 2.20.  Subject to Section  10.04,  the amount of each
Lender's Multi-  Currency  Revolving  Credit  Commitment is the amount set forth
opposite  such  Lender's  name in Schedule II under the caption  "Multi-Currency
Revolving Credit  Commitment",  as such amount may be permanently  terminated or
from time to time permanently reduced pursuant to Section 2.10.

     "Multi-Currency  Revolving Credit Exposure" shall mean, with respect to any
Lender at any time, the sum of (a) the aggregate  principal  amount at such time
of  all  outstanding  Multi-Currency  Revolving  Credit  Loans  of  such  Lender
denominated in Dollars,  plus (b) the Assigned  Dollar Value at such time of the
aggregate  principal  amount  at  such  time of all  outstanding  Multi-Currency
Revolving Credit Loans of such Lender that are Alternative  Currency Loans, plus
(c) the aggregate amount at such time of such Lender's Swingline Exposure,  plus
(d) the  aggregate  amount  at such  time of such  Lender's  Multi-Currency  L/C
Exposure.

     "Multi-Currency  Revolving  Credit  Lender"  shall  mean  a  Lender  with a
Multi-Currency Revolving Credit Commitment.

     "Multi-Currency Revolving Credit Loan" shall mean any loan made by a Lender
pursuant to its Multi-Currency Revolving Credit Commitment.

     "Multi-Currency  Revolving Credit Maturity Date" shall mean the last day of
February in the year 2002.

     "Multi-Currency  Revolving  Credit  Note"  shall  mean a  promissory  note,
executed and delivered as provided in Section 2.06 and in substantially the form
of Exhibit B-4.

     "Multiemployer  Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which a Borrower or any ERISA  Affiliate  (other than one
considered an ERISA  Affiliate only pursuant to subsection (m) or (o) of Section
414 of the Code) is making or accruing an obligation to make  contributions,  or
has within any of the preceding five plan years made or accrued an obligation to
make contributions.

     "Net  Cash  Proceeds"  shall  mean the gross  amount of cash  consideration
(including any cash received in respect of any non-cash  consideration) received
by Holding, ASI or any of their Subsidiaries in respect of any sale, transfer or
other  disposition  of any property or other asset  (including  capital stock or
Indebtedness  issued by, or accounts  receivable  from, or other claims against,
another person) or any interests  therein,  or the issuance of any Securities by
such person,  or the issuance or incurrence by such person of any  Indebtedness,
or other event requiring a calculation of "Net Cash Proceeds" hereunder,  net of
(a) incremental taxes, if any, directly incurred and payable by Holding,  ASI or
any such  Subsidiary  as a result  thereof or as a result of  transfers  of such
consideration to a Borrower or Borrowers in order to make a prepayment hereunder
in respect of any such  transaction  constituting  a  Prepayment  Event or other
event  requiring  a  calculation  of "Net  Cash  Proceeds",  (b) the  amount  of
reasonable  reserves  for any  liabilities  retained  in  connection  with  such
transaction, (c) any other reasonable expenses and other costs directly incurred
and  payable  to  unaffiliated  third  parties  as a result  thereof,  including
amounts,  if  any,  payable  pursuant  to  Section  2.14  as a  result  of  such
transaction  or other event  requiring a calculation  of "Net Cash Proceeds" and
(d) in the case of any such cash  consideration  received by a Subsidiary  other
than a Designated Subsidiary,  the portion of such consideration (net of amounts
referred  to  in  clauses  (a),  (b)  and  (c)  above   attributable  to  taxes,
liabilities, expenses and other costs incurred by such Subsidiary) that would be
distributable  in respect  of  minority  interests  if such  consideration  were
distributed as a dividend or similar distribution;  provided,  however, that the
Net Cash





<PAGE>





     Proceeds from a Permitted  Receivables Financing shall exclude the proceeds
received  from sales of  additional  accounts  receivable  following the initial
sale, to the extent that the sales of such additional accounts receivable do not
increase the aggregate  amount of uncollected  accounts  receivable  held by the
Receivables Purchaser over the greatest aggregate amount thereof previously held
by the Receivables  Purchaser or, as a result of a decrease in the discount rate
at which such accounts receivable are being sold, incrementally increase the net
proceeds to ASI from such sales.

     "Net Joint Venture Investments" shall mean, for any period, an amount equal
to (a) the  aggregate  amount of  Investments  made by ASI and its  Consolidated
Subsidiaries  (other than Excluded  Subsidiaries)  in Joint Ventures during such
period in cash,  Cash  Equivalents and Foreign Cash  Equivalents,  minus (b) the
aggregate amount of cash, Cash Equivalents and Foreign Cash Equivalents received
by ASI and its  Consolidated  Subsidiaries  (other than  Excluded  Subsidiaries)
during such period in respect of  Investments in Joint  Ventures,  but excluding
any such receipts to the extent included in determining  Consolidated Net Income
for such period,  all  determined  on a  consolidated  basis.  Net Joint Venture
Investments  for any period  may be a positive  or  negative  number.  Net Joint
Venture  Investments  increase  for a period when they are positive and decrease
for a period when they are negative.

     "9-1/4%  Sinking  Fund  Debentures"  shall mean ASI's  9-1/4%  Sinking Fund
Debentures Due 2016.

     "1994 Special  Charges" shall mean charges  against income of  $46,000,000,
including  charges of $26,000,000  recorded in the second quarter of fiscal year
1994 for cost  reduction  actions  and  charges of  $20,000,000  incurred in the
fourth  quarter of fiscal year 1994 in connection  with the  termination  of the
Consulting Agreement between ASI and Kelso.

     "1993 Credit Agreement" shall mean the Credit  Agreement,  dated as of June
1,  1993,  among  ASI  Holding  Corporation,  American  Standard  Inc.,  certain
subsidiaries  of  American  Standard  Inc.,  the  lenders,  managing  agents and
co-agents named therein and Chemical Bank, as administrative agent and arranger,
as such 1993 Credit  Agreement  may before the date  hereof  have been  amended,
supplemented or modified.

     "Non-Borrower  Subsidiary"  shall  mean  any  Subsidiary  which  is  not  a
Borrower.

     "Non-Material  Subsidiary" shall mean any Subsidiary of ASI, whether or not
such  Subsidiary  is a Credit  Party,  (i) the revenues of which  (directly  and
together with its Subsidiaries) for the most recent fiscal year of ASI for which
audited  financial   statements  are  available  were  less  than  1%  of  ASI's
consolidated  revenues  for such  fiscal  year and (ii) the  consolidated  total
assets of which as of the date of such financial statements were less than 1% of
ASI's consolidated total assets as of such date; provided that, in the event the
aggregate of the revenues or consolidated total assets of all such Non- Material
Subsidiaries  that are not  Credit  Parties  exceeds  5% of  ASI's  consolidated
revenues  for such fiscal year or 5% of ASI's  consolidated  total  assets as of
such date, respectively, ASI (or, in the event ASI has failed to do so within 10
days, the Administrative  Agent) shall designate  sufficient  Subsidiaries to be
excluded from the  definition of  "Non-Material  Subsidiary"  to eliminate  such
excess,  and such  designated  Subsidiaries  shall not  constitute  Non-Material
Subsidiaries.  Revenues  and assets of Foreign  Subsidiaries  shall be converted
into  Dollars at the rates  used for  purposes  of  preparing  the  consolidated
balance sheet of ASI included in such financial statements.

     "Non-Redeemable  Preferred  Stock" shall mean any  preferred  stock that is
not, by its terms or by the terms of any  agreement  or  instrument  pursuant to
which such  preferred  stock was  issued,  required  to be redeemed at any fixed
date, or redeemable at the option of the holder thereof at any time.

     "Notes" shall mean the Term Notes,  the Periodic  Access Notes,  the U.S. $
Revolving  Credit  Notes,  the  Multi-Currency  Revolving  Credit  Notes and the
Swingline  Note,  executed and  delivered as provided in Section 2.06 or Section
2.20, as the case may be.

     "Notice of Interest  Rate  Election"  shall have the meaning  specified  in
Section  2.04(b).  "Obligations"  shall mean (a) the  Borrowers'  obligations in
respect of the due and  punctual  payment of  principal  of and  interest on the
Loans and L/C Disbursements when and as due





<PAGE>





whether at maturity, by acceleration,  upon one or more dates set for prepayment
or  otherwise,  (b)  all  Fees,  expenses,  indemnities,  expense  reimbursement
obligations and other obligations, monetary or otherwise, of the Borrowers under
this Agreement or any other Credit Document and (c) all obligations, monetary or
otherwise,  of each other Credit Party under each Credit Document to which it is
a party.

     "Obligation Currency" shall have the meaning specified in Section 10.14.

     "Offering"  shall mean the initial public  offering to occur not later than
March 31,  1995,  of common  stock of Holding in an  aggregate  number of shares
sufficient  to yield  gross  proceeds  of at least  $250,000,000  (based  on the
initial per share price to the public) and representing the sale of an ownership
percentage  in Holding that implies a total equity value for Holding  (including
the offered shares) of at least $1,000,000,000.

     "Officers'  Certificate"  shall  mean,  as  applied to any  corporation,  a
certificate  executed on behalf of such corporation by its Chairman of the Board
(if an officer) or its President or one of its Vice  Presidents and by its Chief
Financial  Officer or its  Treasurer  or, in the case of  Foreign  Subsidiaries,
officers or persons performing comparable functions.

     "Operating  Lease"  shall  mean,  as  applied  to  any  person,  any  lease
(including,  without limitation, leases which may be terminated by the lessee at
any time) of any  property  (whether  real,  personal  or mixed)  which is not a
Capital Lease other than any such lease under which that person is the lessor.

     "Organizational  Documents" shall mean, with respect to any person, if such
person is a corporation, its charter and by-laws, if any, or if such person is a
partnership,  its certificate of partnership,  if any, and partnership agreement
and, in each case, any stockholder or similar  agreements  between and among the
holders of ownership interests in such person.

     "Other Taxes" shall have the meaning specified in Section 2.18(b).

     "PBGC" shall mean the Pension Benefit Guaranty  Corporation referred to and
defined in ERISA, or any successor thereto.

     "Pension  Plan"  shall  mean any  employee  pension  benefit  plan which is
subject  to the  provisions  of Title IV of ERISA  and which is  maintained  for
employees of ASI or any of its Subsidiaries or any ERISA Affiliate of ASI or any
of its Subsidiaries, other than a Multiemployer Plan.

     "Perfection Certificate" shall mean an updated certificate substantially in
the form of Exhibit G, duly executed by a Financial  Officer and a legal officer
of ASI, duly completed and accompanied by the attachments contemplated thereby.

     "Periodic  Access  Availability   Period"  shall  mean  any  period  of  30
consecutive  days  commencing  on a  date  specified  by ASI  by  notice  to the
Administrative Agent, which notice shall be given not less than 10 days prior to
the commencement of such period; provided,  however, that (a) the first Periodic
Access  Availability  Period  shall not commence  prior to June 1, 1995,  (b) no
Periodic Access Availability Period shall commence within 3 months following the
commencement  of any previous  Periodic Access  Availability  Period and (c) not
more than two Periodic  Access  Availability  Periods  shall occur in any single
calendar year.

     "Periodic Access  Borrowing"  shall mean a Borrowing  comprised of Periodic
Access Loans.

     "Periodic  Access  Lender" shall mean a Lender with a Periodic  Access Loan
Commitment.

     "Periodic Access Loan" shall mean any loan made by a Lender pursuant to its
Periodic Access Loan Commitment.






<PAGE>





     "Periodic Access Loan  Commitment"  shall mean, with respect to any Lender,
the  commitment  (if any) of such  Lender  to make  loans  pursuant  to  Section
2.01(d).  Subject to Section 10.04, the amount of each Lender's  Periodic Access
Loan  Commitment is the amount set forth opposite such Lender's name in Schedule
II under the caption  "Periodic Access Loan  Commitment",  as such amount may be
permanently terminated or from time to time reduced pursuant to Section 2.10.

     "Periodic  Access Loan Exposure"  shall mean, with respect to any Lender at
any  time,  the sum of (a) the  aggregate  principal  amount at such time of all
outstanding  Periodic Access Loans of such Lender  denominated in Dollars,  plus
(b) the Assigned Dollar Value at such time of the aggregate  principal amount at
such time of all  outstanding  Periodic  Access  Loans of such  Lender  that are
Alternative Currency Loans.

     "Periodic  Access Maturity Date" shall mean the last day of February in the
year 2002.

     "Periodic Access Note" shall mean a promissory note, executed and delivered
as provided in Section 2.06 and in substantially the form of Exhibit B-2.

     "Permitted Encumbrances" shall mean:

     (i) Liens for  taxes,  assessments  or  governmental  charges or claims the
payment of which is not at the time required by Section 5.04;

     (ii)  statutory  Liens of landlords  and Liens of  carriers,  warehousemen,
mechanics,  materialmen and suppliers and other liens imposed by law or pursuant
to customary  reservations  or retentions of title, in each case incurred in the
ordinary  course of business for sums not yet  delinquent or being  contested in
good faith, if such reserve or other appropriate provision,  if any, as shall be
required by GAAP shall have been made therefor;

     (iii) with respect to assets other than  Collateral,  Liens (other than any
Lien  imposed by ERISA)  incurred or  deposits  made in the  ordinary  course of
business in connection with workers'  compensation,  unemployment  insurance and
other  types of  social  security,  or to secure  the  performance  of  tenders,
statutory  obligations,  bids,  leases,  government  contracts,  performance and
return-of-money  bonds and other similar  obligations  (exclusive of obligations
for the payment of borrowed money);

     (iv) Liens in connection with attachments or judgments  (including judgment
or appeal bonds) not in excess of $20,000,000 in the aggregate (exclusive of any
amount  adequately  covered by insurance as to which the  insurance  company has
acknowledged  coverage and  exclusive of amounts in respect of  attachments  the
enforcement of which has been stayed  pending appeal and judgments  execution of
which has been stayed pending appeal) unless the judgments secured shall, within
60 days after the entry thereof,  not have been discharged or execution  thereof
not stayed  pending  appeal,  or shall not have been  discharged  within 30 days
after the expiration of any such stay;

     (v) leases or subleases  granted to others not  interfering in any material
respect with the business of ASI or any of its Subsidiaries;

     (vi)   easements,    rights-of-way,    restrictions,   minor   defects   or
irregularities   in  title  and  other  similar  charges  or  encumbrances   not
interfering in any material respect with the ordinary conduct of the business of
ASI or any of its Subsidiaries;

     (vii)  any  interest  or title of a lessor  under any  lease  permitted  by
Section 6.06;

     (viii) Liens arising from UCC financing  statements (or equivalent filings,
registrations  or  agreements  in  foreign  jurisdictions)  relating  to  leases
permitted by this Agreement;

     (ix) Liens in favor of customs and revenue  authorities arising as a matter
of law to secure payment of customs duties in connection with the importation of
goods;





<PAGE>






     (x) deed  restrictions  to ensure  non-disturbance  of  legally  permitted,
permanent on-site waste storage/ treatment facilities; and

     (xi) normal and  customary  rights of setoff upon deposits of cash in favor
of banks or other depository institutions.

     "Permitted  Receivables  Financing"  shall  mean  any  sale  by ASI and its
Subsidiaries  of accounts  receivable to a Receivables  Purchaser in a true sale
transaction  without any recourse based upon the  collectibility of the accounts
receivable  sold and the  sale or  pledge  of such  accounts  receivable  (or an
interest  therein)  by such  Receivables  Purchaser,  in each case  without  any
Guarantee  by or other  recourse  to ASI or any  Subsidiary  (other than to such
Receivables  Purchaser,  if it is a Finance Subsidiary);  provided that (i) such
accounts   receivable  arise  out  of  U.S.  sales  of  products  by  ASI's  Air
Conditioning  Products  Segment  and/or  Plumbing  Products  Segment,  (ii)  the
aggregate  amount of uncollected  accounts  receivable held by such  Receivables
Purchaser or  otherwise  subject to any such  transaction  at any time shall not
exceed  $150,000,000 in the aggregate,  (iii) the Administrative  Agent shall be
satisfied with the structure and documentation for such transaction and that the
terms of such transaction,  including the discount at which accounts  receivable
are sold to such  Receivables  Purchaser and any  termination  events,  shall be
consistent  with  those  prevailing  in the  market  at  the  time  for  similar
transactions  rated AA or better by S&P or having comparable  ratings from other
rating agencies and (iv) such transaction shall not by its terms terminate or be
subject to reduction in amount for at least five years,  other than by reason of
the occurrence of an event of default or termination event.

     "person" shall mean any natural person, corporation,  business trust, joint
venture,  association,  company,  partnership  or  government,  or any agency or
political subdivision thereof.

     "Prepayment  Event" shall mean (a) any sale,  transfer or other disposition
of any property or other asset (including  capital stock or Indebtedness  issued
by, or accounts receivable from, or other claims against, another person) or any
interest therein (other than the grant,  conveyance or other transfer of a Lien,
to the  extent  permitted  by  Section  6.03)  by  Holding,  ASI or any of their
Subsidiaries,  including any Permitted Receivables Financing and any transaction
effected  in reliance  upon  Section  6.02(a)(ii),  but  excluding  (i) any such
transaction  effected in reliance upon Sections  6.02(a)(iii) or 6.02(a)(iv)(B),
(ii) any such  transaction  effected  in the  ordinary  course  of  business  in
reliance  upon  Section  6.02(a)(v)  and (iii) any such sale,  transfer or other
disposition  made  by ASI or any  Subsidiary  thereof  to ASI or any  Subsidiary
thereof (other than an Excluded Subsidiary) or (b) the issuance or incurrence by
Holding,  ASI or any of their  Subsidiaries of any Indebtedness  (other than any
Indebtedness   permitted  by  Section   6.04  except  a  Permitted   Receivables
Financing), or the issuance or sale by Holding, ASI or any of their Subsidiaries
of any debt securities or any obligations  convertible into or exchangeable for,
or giving  any person or entity  any  right,  option or warrant to acquire  from
Holding,  ASI or any of their  Subsidiaries  any  Indebtedness  or any such debt
securities or any such convertible or exchangeable  obligations  (other than any
such debt  securities or convertible or  exchangeable  obligations  permitted by
Section 6.04), in an aggregate amount greater than $20,000,000.  Notwithstanding
the foregoing, the term "Prepayment Event" shall not include sales, transfers or
other  dispositions  of any properties or other assets for Net Cash Proceeds not
exceeding in the aggregate  $35,000,000 in any calendar  year;  provided that at
any time when the Net Cash Proceeds  received in connection  with any such sale,
transfer and other  disposition,  together  with the aggregate Net Cash Proceeds
received  in  connection  with  all  other  such  sales,   transfers  and  other
dispositions  during  the  same  calendar  year,  shall  exceed  $35,000,000,  a
"Prepayment Event" shall be deemed to have occurred and the resultant prepayment
in  connection  with such  Prepayment  Event shall equal the amount by which the
aggregate Net Cash Proceeds  received in connection  with such sales,  transfers
and other dispositions exceeds $35,000,000.

     "Prior  Property  Documents"  shall mean,  in respect of any Real  Property
subject  or to be  subject  to a  Mortgage,  any  leases,  overleases,  easement
agreements,  covenants  or other  instruments  of record  relating  to such Real
Property, which instruments have a priority superior to the priority of the Lien
of the Mortgage relating to such Real Property.

     "Projected  Financial  Statements"  shall  have the  meaning  specified  in
Section 3.08(c).






<PAGE>





     "Real  Property"  shall  mean  each  of the  interests  in real  estate  or
leasehold  estates owned by ASI or any of its  Subsidiaries,  together  with, in
each case, all improvements and appurtenant fixtures and easements.

     "Receivables  Purchaser"  shall  mean  either  a  Finance  Subsidiary  or a
financial  institution or trust that purchases  receivables in connection with a
Permitted Receivables Financing.

     "Redemption  Amount" shall mean at any time (a) the sum of (i) the Net Cash
Proceeds of the  Offering,  plus (ii) the Net Cash  Proceeds  of any  subsequent
public  offering of common stock or  Non-Redeemable  Preferred Stock of Holding,
plus (iii) the  amount,  if any, of Excess Cash Flow of ASI for each fiscal year
(commencing  with the fiscal year ending  December 31, 1995) for which financial
statements shall have been delivered under Section 5.01(b), which shall not have
been  (and  shall not be  required  to be)  applied  as a  mandatory  prepayment
pursuant to Section 2.11(e), minus (b) the aggregate amount of the cash or other
consideration (at the book value thereof),  other than Non-Redeemable  Preferred
Stock and common stock of Holding, paid after the date hereof in connection with
(i) Acquisitions and (ii) any prepayment,  redemption or repurchase under clause
(ii) of Section  6.07(b)  of the  Indebtedness  specified  therein  (other  than
Indebtedness  prepaid,  redeemed  or  repurchased  on or prior to the  Effective
Date).

     "Register" shall have the meaning specified in Section 10.04(d).

     "Regulation D" shall mean Regulation D of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

     "Regulation G" shall mean Regulation G of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

     "Regulation U" shall mean Regulation U of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

     "Regulation X" shall mean Regulation X of the Board as from time to time in
effect and all official rulings and interpretations thereunder or thereof.

     "Related Claims" shall mean (a) in respect of any Borrower, all obligations
of such Borrower in respect of any Loans and L/C  Disbursements  that comprise a
single  Credit  Facility  and are  denominated  in the same  currency and (b) in
respect of any other  Credit  Party,  all  obligations  of such Credit  Party in
respect  of any Loans and L/C  Disbursements  that are  denominated  in the same
currency.

     "Related Lenders" shall mean all Lenders holding Related Claims.

     "Reportable  Event" shall mean any  reportable  event as defined in Section
4043 of ERISA or the  regulations  issued  thereunder  with respect to a Pension
Plan  (other  than a Pension  Plan  maintained  by an ERISA  Affiliate  which is
considered an ERISA  Affiliate only pursuant to subsection (m) or (o) of Section
414 of the Code).

     "Reporting  Divisions" shall mean each of the business units of ASI and its
Subsidiaries and subdivisions  thereof, as utilized from time to time by ASI for
internal reporting purposes.

     "Required  Documentation"  shall  have the  meaning  specified  in  Section
2.18(e).

     "Required Lenders" shall mean, at any time, Lenders having Loans (excluding
Swingline Loans),  Multi-Currency L/C Exposure,  U.S. $ L/C Exposure,  Swingline
Exposure  and  unused   Commitments   (excluding   the   Swingline   Commitment)
representing  a majority of the sum of all Loans  (excluding  Swingline  Loans),
Multi-Currency L/C Exposure, U.S. $ L/C Exposure,  Swingline Exposure and unused
Commitments  (excluding the Swingline  Commitment) at such time. For purposes of
determining  the Required  Lenders,  any amounts  denominated  in an Alternative
Currency  shall be translated  into Dollars at the Spot Exchange Rates in effect
on the Effective Date.






<PAGE>





     "Responsible  Officer" of any corporation  shall mean any executive officer
or  Financial  Officer  of such  corporation  and any other  officer  or similar
official thereof  responsible for the  administration of the obligations of such
corporation in respect of this Agreement.

     "Restricted   Junior   Payment"  shall  mean  (i)  any  dividend  or  other
distribution, direct or indirect, on account of any shares of any class of stock
of ASI or Holding, now or hereafter  outstanding,  except (a) a dividend payable
solely  in shares of stock of ASI or  Holding,  as the case may be, or  options,
rights or warrants to acquire  the same and (b) a dividend  or  distribution  in
respect of the rights  associated  with the common stock of Holding,  whether by
way of redemption of such rights or otherwise, (ii) any redemption,  retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or  indirect,  of any  shares  of any  class of stock of ASI or  Holding  now or
hereafter outstanding, (iii) any payment or prepayment of principal of, premium,
if any, or interest on, redemption,  purchase,  retirement,  defeasance, sinking
fund or similar payment with respect to, any Subordinated Indebtedness, (iv) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options  or other  rights  to  acquire  shares  of any  class of stock of ASI or
Holding  now or  hereafter  outstanding,  except  payments  in respect of rights
associated  with the common stock of Holding,  whether by way of  redemption  of
such rights or otherwise,  in an aggregate  amount not to exceed  $5,000,000 and
(v) any loan or advance to Holding.

     "Restricted  Subsidiary"  shall have the  meaning  specified  in the Senior
Indentures.

     "Revolving  Credit  Borrowing"  shall mean a Borrowing  comprised of U.S. $
Revolving Credit Loans or Multi-Currency Revolving Credit Loans.

     "Revolving  Credit  Commitments"  shall  mean the U.S. $  Revolving  Credit
Commitments and the Multi-Currency Revolving Credit Commitments.

     "Revolving  Credit  Exposures"  shall  mean the  U.S.  $  Revolving  Credit
Exposures and the Multi-Currency Revolving Credit Exposures.

     "Revolving  Credit Lenders" shall mean the U.S. $ Revolving  Credit Lenders
and the Multi-Currency Revolving Credit Lenders.

     "Revolving  Credit  Loan"  shall mean any U.S. $  Revolving  Credit Loan or
Multi- Currency Revolving Credit Loan.

     "Scheduled  Letters of Credit"  shall mean the letters of credit  listed on
Schedule IV that are outstanding on the Effective Date.

     "SCI" shall mean Standard  Compressors  Inc., a Delaware  corporation and a
wholly owned subsidiary of ASI.

     "SCI/Heatcraft  Joint Venture" shall mean a Delaware  partnership formed by
SCI and  Heatcraft  Technologies  Inc.  and  owned  equally  at the  time of its
formation by such corporations.

     "SEC" shall mean the Securities and Exchange Commission.

     "Securities"  shall  mean any stock,  shares,  voting  trust  certificates,
bonds, debentures, options, warrants, notes, or other evidences of indebtedness,
secured or unsecured, convertible,  subordinated or otherwise, or in general any
instruments  commonly known as  "securities"  or any  certificates  of interest,
shares or participations  in temporary or interim  certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.

     "Security  Documents"  shall mean the  Domestic  Security  Agreements,  the
Domestic  Securities Pledge  Agreements,  the Foreign Security  Agreements,  the
Supplemental Security Agreements, the Supplemental Securities Pledge Agreements,
the Mortgages,  the financing  statements,  the Collateral Account Agreement and
the Collateral Trust Agreement.






<PAGE>





     "Senior  Indentures"  shall mean (i) the Indenture  dated as of November 1,
1986, between ASI and Wilmington Trust Company,  as successor Trustee,  relating
to the 9-1/4% Sinking Fund  Debentures,  and (ii) the Indentures dated as of May
15, 1992, between ASI and First Trust National Association, as trustee, relating
to the 10-7/8% Senior Notes and 11-3/8% Senior Debentures.

     "Senior Managing Agents" shall have the meaning specified in the heading of
this Agreement.

     "S&P" shall mean Standard & Poor's Corporation.

     "Spot  Exchange  Rate"  shall  mean,  on any day,  (a) with  respect to any
Alternative Currency,  the spot rate at which Dollars are offered on such day by
Chemical Bank in London for such  Alternative  Currency at  approximately  11:00
a.m. (London time), and (b) with respect to Dollars in relation to any specified
Alternative Currency, the spot rate at which such specified Alternative Currency
is offered on such day by Chemical  Bank in London for Dollars at  approximately
11:00 a.m.  (London time). For purposes of determining the Spot Exchange Rate in
connection with an Alternative Currency Borrowing, such Spot Exchange Rate shall
be determined as of the  Denomination  Date for such  Borrowing  with respect to
transactions in the applicable Alternative Currency that will settle on the date
of such Borrowing.

     "Statutory  Reserves" shall mean a fraction  (expressed as a decimal),  the
numerator of which is the number one and the  denominator of which is the number
one minus the  aggregate  of the  maximum  reserve  percentages  (including  any
marginal,  special,  emergency or supplemental  reserves) expressed as a decimal
established  by the Board or by any other  Governmental  Authority,  domestic or
foreign,   with  jurisdiction  over  the  Administrative  Agent  or  any  Lender
(including  any branch,  Affiliate or other  funding  office  thereof  making or
holding  a Loan) (a) with  respect  to the Base CD Rate (as such term is used in
the definition of "Alternate Base Rate"),  for new negotiable  nonpersonal  time
deposits in Dollars of over  $100,000  with  maturities  approximately  equal to
three months and (b) with respect to the Adjusted  LIBO Rate  applicable  to any
Borrowing,  for any category of liabilities which includes deposits by reference
to which the Adjusted LIBO Rate in respect of such Borrowing is determined. Such
reserve  percentages shall include those imposed pursuant to Regulation D. LIBOR
Loans  shall be deemed  to  constitute  "Eurocurrency  Liabilities"  within  the
meaning of Regulation D and to be subject to such reserve  requirements  without
benefit of or credit for proration, exemptions or offsets which may be available
from time to time to any Lender under Regulation D. Statutory  Reserves shall be
adjusted automatically on and as of the effective date of any change in any such
reserve percentage.

     "Sterling" or "(pound)" shall mean lawful money of the United Kingdom.

     "Stock  Incentive  Plan" shall mean the American  Standard  Companies  Inc.
Stock  Incentive  Plan,  as such Stock  Incentive  Plan may from time to time be
amended, supplemented or modified.

     "Stockholder Rights Agreement" shall mean the Stockholders Rights Agreement
of American  Standard  Companies  Inc.  dated as of  December  2, 1994,  as such
Stockholders Rights Agreement may from time to time be amended,  supplemented or
modified.

     "Subordinated  Indebtedness" shall mean Indebtedness of ASI subordinated in
right of  payment  to the Loans and  certain  other  Indebtedness,  pursuant  to
documentation,   containing   interest   rates,   payment   terms,   maturities,
amortization schedules, covenants, defaults, remedies,  subordination provisions
and other material terms in form and substance  satisfactory  to and approved in
writing by the  Required  Lenders.  The terms of the  Subordinated  Indebtedness
identified  in  clauses  (c) and (d) of  Section  6.04 are  hereby  deemed to be
satisfactory to and to have been approved in writing by the Required Lenders.

     "Subordinated  Securities"  shall mean ASI's  10-1/2%  Senior  Subordinated
Discount  Debentures Due 2005 and its 9-7/8% Senior Subordinated Notes Due 2001,
collectively.






<PAGE>





     "subsidiary"  shall mean, with respect to any person (herein referred to as
the  "parent"),  any  corporation,  partnership,  association  or other business
entity of which securities or other ownership  interests  representing more than
50% of the  ordinary  voting  power or more than 50% of the general  partnership
interests are, at the time any determination is being made, owned, controlled or
held by the  parent or one or more  subsidiaries  of the parent or by the parent
and one or more  subsidiaries  of the  parent;  provided  that  the LDC  Holding
Companies shall not be deemed subsidiaries of Holding or any Borrower.

     "Subsidiary"  shall mean,  with respect to any Borrower,  any subsidiary of
such Borrower. Unless otherwise specified,  references to Subsidiaries generally
shall be deemed to refer to subsidiaries of ASI.

     "Subsidiary  Borrowers" shall have the meaning  specified in the heading of
this Agreement.

     "Subsidiary  Guarantor"  shall mean each of the  Subsidiaries  indicated on
Schedule III as a Subsidiary  Guarantor,  and each other Subsidiary that becomes
party to a Guarantee Document as contemplated by Section 5.12 or otherwise.

     "Supplemental  Documents"  shall  have the  meaning  specified  in  Section
5.12(a).

     "Supplemental Guarantee" shall mean any supplemental guarantee executed and
delivered  by a Domestic  Subsidiary  pursuant  to Section  5.12(a) or a Foreign
Subsidiary  pursuant to Section 5.12(b) as such supplemental  guarantee shall be
amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof and hereof.

     "Supplemental  Securities  Pledge  Agreement"  shall mean any  supplemental
securities  pledge  agreement  executed and  delivered by a Domestic  Subsidiary
pursuant  to Section  5.12(a)  or by a Foreign  Subsidiary  pursuant  to Section
5.12(b),  as such  supplemental  securities  pledge  agreement shall be amended,
supplemented  or otherwise  modified  from time to time in  accordance  with the
terms thereof and hereof.

     "Supplemental  Security  Agreement"  shall mean any  supplemental  security
agreement,  trust  indenture or debenture  executed and  delivered by a Domestic
Subsidiary  pursuant  to Section  5.12(a) or a Foreign  Subsidiary  pursuant  to
Section 5.12(b),  as such supplemental  security  agreement,  trust indenture or
debenture shall be amended, supplemented or otherwise modified from time to time
in accordance with the terms thereof and hereof.

     "Swingline  Base  Rate"  shall  mean,  for any  day,  with  respect  to any
Swingline Loan that is an  Alternative  Currency Loan, a rate per annum (rounded
upwards,  if  necessary,  to the next 1/16 of 1%) equal to the  average  rate at
which  overnight  deposits  in the  currency  in which  such  Swingline  Loan is
denominated and  approximately  equal in principal amount to such Swingline Loan
are  obtainable  by the Swingline  Lender on such day at its lending  office for
such Swingline  Loan in the interbank  market (or any other market for overnight
funds in such currency  utilized by the Swingline  Lender),  adjusted to reflect
any  direct or  indirect  costs of  obtaining  such  deposits  (including  costs
analogous  to  Statutory  Reserves  and  the  Assessment  Rate,  to  the  extent
applicable). The Swingline Base Rate applicable to any Swingline Loan that is an
Alternative  Currency  Loan shall be  determined  for each day by the  Swingline
Lender and such determination shall be conclusive absent manifest error.

     "Swingline  Commitment"  shall mean  $40,000,000,  as such amount  shall be
reduced from time to time pursuant to Section 2.20.

     "Swingline  Exposure"  shall mean at any time the sum of (a) the  aggregate
principal amount at such time of all outstanding  Swingline Loans denominated in
Dollars,  plus  (b) the  Assigned  Dollar  Value at such  time of the  aggregate
principal  amount  at such  time of all  outstanding  Swingline  Loans  that are
Alternative  Currency  Loans.  The  Swingline  Exposure  of  any  Multi-Currency
Revolving Credit Lender at any time shall mean its Applicable  Percentage of the
aggregate Swingline Exposure at such time.

     "Swingline Lender" shall mean Chemical Bank.






<PAGE>





     "Swingline  Loan" shall mean any loan made by the Swingline Lender pursuant
to the Swingline Commitment.

     "Swingline Loan Agreement" shall mean the Swingline Loan Agreement dated as
of June 1, 1993, among the Borrowers and the Swingline Lender.

     "Swingline  Margin" shall mean,  for any day, with respect to any Swingline
Loan that is an  Alternative  Currency  Loan,  the product of (a) the Applicable
Margin on such day with respect to Revolving Credit Borrowings  comprised of ABR
Loans and (b) the conversion  factor specified in one or more letter  agreements
from time to time entered into by the  Swingline  Lender and ASI for  converting
such  Applicable  Margin to a  comparable  margin in the  currency in which such
Swingline Loan is denominated.

     "Swingline  Note" shall mean a promissory  note,  executed and delivered as
provided in Section 2.20 and in substantially the form of Exhibit B-5.

     "Taxes" shall have the meaning assigned to such term in Section 2.18(a).

     "10-7/8% Senior Notes" shall mean ASI's 10-7/8% Senior Notes Due 1999.

     "Term Borrowing" shall mean a Borrowing comprised of Term Loans.

     "Term  Facility  Maturity  Date" shall mean the last day of February in the
year 2000.

     "Term  Loan  Commitment"  shall  mean,  with  respect  to any  Lender,  the
commitment  (if any) of such Lender to make a loan pursuant to Section  2.01(a).
Subject to Section  10.04,  the amount of each Lender's Term Loan  Commitment is
the  amount set forth  opposite  such  Lender's  name in  Schedule  II under the
caption "Term Loan  Commitment",  as such amount may be  permanently  terminated
pursuant to Section 2.10.

     "Term  Loans"  shall mean loans made by the Lenders  pursuant to their Term
Loan Commitments.

     "Term  Note"  shall mean a  promissory  note,  executed  and  delivered  as
provided in Section 2.06 and in substantially the form of Exhibit B-1.

     "Title  Company"  shall mean Lawyers Title  Insurance  Corporation  or such
other  title  insurance  company as shall be  designated  by the  Administrative
Agent.

     "Total  Commitment" shall mean, with respect to any Lender at any time, the
aggregate amount of such Lender's Commitments, as in effect at such time.

     "Total Multi-Currency Revolving Credit Commitment" shall mean, at any time,
the aggregate amount of the Multi-Currency  Revolving Credit Commitments,  as in
effect at such time.

     "Total Periodic Access  Commitment"  shall mean, at any time, the aggregate
amount of the Periodic Access Loan Commitments, as in effect at such time.

     "Total Revolving Credit  Commitment" shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time.

     "Total U.S. $ Revolving  Credit  Commitment"  shall mean, at any time,  the
aggregate  amount of the U.S. $ Revolving  Credit  Commitments,  as in effect at
such time.

     "Transactions" shall have the meaning specified in Section 3.05.

     "Type",  when used in respect of any Loan or Borrowing,  shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined and





<PAGE>





the  currency  in which such Loan or the Loans  comprising  such  Borrowing  are
denominated.  For purposes hereof,  "Rate" shall include the Adjusted LIBO Rate,
the Swingline Base Rate and the Alternate Base Rate and "currency" shall include
Dollars and any Alternative Currency permitted hereunder.

     "UCC" shall mean the Uniform Commercial Code.

     "Unified  Receivables  Company" shall mean a finance company referred to in
the definition of Unified Receivables Program.

     "Unified  Receivables  Program" shall mean a program under which ASI or any
of its Subsidiaries  receives  payment in respect of its customers'  receivables
from a finance company and ASI or any of its  Subsidiaries  agrees to repurchase
certain inventory in order to protect the finance company from loss in the event
any such customers default in the payment of their obligations.

     "U.K.  Borrower" shall mean American  Standard (UK) Limited,  a corporation
organized under the laws of the United Kingdom.

     "Upfront Fees" shall have the meaning specified in Section 2.05(a).

     "U.S. $ L/C  Disbursement"  shall mean a payment or disbursement made by an
Issuing Bank pursuant to a U.S. $ Letter of Credit.

     "U.S. $ L/C  Exposure"  shall mean at any time the sum of (a) the aggregate
undrawn amount of all  outstanding  U.S. $ Letters of Credit at such time,  plus
(b) the aggregate principal amount of all U.S. $ L/C Disbursements that have not
yet  been  reimbursed  at such  time.  The U.S.  $ L/C  Exposure  of any U.S.  $
Revolving Credit Lender at any time shall mean its Applicable  Percentage of the
aggregate U.S. $ L/C Exposure at such time.

     "U.S.  $ Letter of  Credit"  shall  mean a Letter  of  Credit  issued by an
Issuing  Bank  pursuant  to  Section  2.19 on behalf of Lenders  holding  U.S. $
Revolving Credit  Commitments  (including the Scheduled Letters of Credit deemed
to have been so issued pursuant to Section 2.19).

     "U.S. $ Revolving  Credit  Borrowing"  shall mean a Borrowing  comprised of
U.S. $ Revolving Credit Loans.

     "U.S.  $  Revolving  Credit  Commitment"  shall mean,  with  respect to any
Lender, the commitment (if any) of such Lender to make loans pursuant to Section
2.01(b) and to acquire  participations  in U.S. $ Letters of Credit  pursuant to
Section  2.19.  Subject to Section  10.04,  the amount of each  Lender's  U.S. $
Revolving Credit  Commitment is the amount set forth opposite such Lender's name
in Schedule II under the caption "U.S. $ Revolving Credit  Commitment",  as such
amount may be permanently  terminated or from time to time  permanently  reduced
pursuant to Section 2.10.

     "U.S. $ Revolving  Credit  Exposure" shall mean, with respect to any Lender
at any time, the sum of (a) the aggregate  principal  amount at such time of all
outstanding U.S. $ Revolving Credit Loans of such Lender, plus (b) the aggregate
amount at such time of such Lender's U.S. $ L/C Exposure.

     "U.S.  $  Revolving  Credit  Lender"  shall  mean a  Lender  with a U.S.  $
Revolving Credit Commitment.

     "U.S.  $  Revolving  Credit  Loan"  shall  mean any  loan  made by a Lender
pursuant to its U.S. $ Revolving Credit Commitment.

     "U.S. $ Revolving Credit Maturity Date" shall mean the last day of February
in the year 2002.

     "U.S. $ Revolving Credit Note" shall mean a promissory  note,  executed and
delivered as provided in Section 2.06 and in  substantially  the form of Exhibit
B-3.






<PAGE>





     "Withdrawal  Liability"  shall mean liability to a Multiemployer  Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.

     "Working  Capital" shall mean, as of any date of  determination,  an amount
equal to (a) the total  assets of ASI and its  Consolidated  Subsidiaries  as of
such date which may properly be classified as current assets in accordance  with
GAAP,  determined on a consolidated basis in accordance with GAAP, but excluding
(i) cash, Cash Equivalents and Foreign Cash Equivalents and (ii) the unamortized
portion  of prepaid  expenses,  minus (b) the total  liabilities  of ASI and its
Consolidated  Subsidiaries  as of such date which may properly be  classified as
current liabilities in accordance with GAAP,  determined on a consolidated basis
in accordance  with GAAP,  but excluding (i) current  liabilities  in respect of
Indebtedness and (ii) any income tax liability in respect of sales of assets out
of the  ordinary  course of  business.  Working  Capital as of any date may be a
positive or negative  number.  Working  Capital  increases  when it becomes more
positive or less  negative and  decreases  when it becomes less positive or more
negative,  and all such increases and decreases  shall be determined in a manner
consistent  with that used in preparing  ASI's  consolidated  statements of cash
flows for the same period in accordance with GAAP.

     SECTION 1.02. Terms Generally.  The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require,  any pronoun  shall  include the  corresponding  masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be  followed by the phrase  "without  limitation".  All  references
herein to Articles,  Sections, Exhibits and Schedules shall be deemed references
to Articles  and Sections of, and  Exhibits  and  Schedules  to, this  Agreement
unless  the  context  shall  otherwise  require.  All  references  herein to any
agreement  or  instrument  shall  be  deemed  references  to such  agreement  or
instrument as amended or modified from time to time, subject to any restrictions
herein on the amendment or modification of such agreement or instrument.  Except
as otherwise  expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP  consistently  applied,  as in
effect from time to time; provided,  however,  that, for purposes of determining
compliance  with any  covenant  set forth in Article  VI,  such  terms  shall be
construed  in  accordance  with GAAP as in effect on the date of this  Agreement
applied on a basis  consistent  with the  application  used in  preparing  ASI's
audited  financial  statements  referred to in Section 3.08.  All  references in
Articles III, V, VI and VII of this Agreement to the Borrowers will be deemed to
include the Subsidiaries that own interests in the EEIG Borrower.


                                   ARTICLE II

                                  THE CREDITS

     SECTION  2.01.  Commitments.  (a) Subject to the terms and  conditions  and
relying upon the  representations  and warranties  herein set forth, each Lender
agrees, severally and not jointly, to make loans to one or more of the Borrowers
(as specified in the Borrowing  Request(s)  with respect  thereto and subject to
assignment in accordance  with Section 2.21) on the Effective  Date, in Dollars,
in an  aggregate  principal  amount  not  to  exceed  such  Lender's  Term  Loan
Commitment.  Term Loans will be made only on the Effective Date and amounts paid
or prepaid in respect of Term Loans may not be reborrowed.

     (b)   Subject  to  the  terms  and   conditions   and   relying   upon  the
representations  and warranties  herein set forth,  each U.S. $ Revolving Credit
Lender  agrees,  severally and not jointly,  to make loans to one or more of the
Borrowers (as specified in the Borrowing Requests with respect thereto),  at any
time and from time to time on and after the Effective Date and until the earlier
of the U.S. $ Revolving  Credit  Maturity Date and the termination of the U.S. $
Revolving Credit  Commitment of such Lender in accordance with the terms hereof,
in Dollars,  in an aggregate  principal amount at any time outstanding that will
not result in (i) such Lender's U.S. $ Revolving Credit Exposure  exceeding (ii)
such Lender's U.S. $ Revolving  Credit  Commitment.  The U.S. $ Revolving Credit
Commitments shall be terminated or reduced from time to time pursuant to Section
2.10. Within the foregoing limits,  the Borrowers may borrow,  pay or prepay and
reborrow U.S. $ Revolving Credit Loans hereunder, on and after the Effective





<PAGE>





     Date and prior to the earlier of the U.S. $ Revolving  Credit Maturity Date
and the termination of the U.S. $ Revolving Credit  Commitments,  subject to the
terms, conditions and limitations set forth herein.

     (c)   Subject  to  the  terms  and   conditions   and   relying   upon  the
representations and warranties herein set forth, each  Multi-Currency  Revolving
Credit Lender agrees, severally and not jointly, to make loans to one or more of
the Borrowers (as specified in the Borrowing Requests with respect thereto),  at
any time and from  time to time on and after  the  Effective  Date and until the
earlier of the Multi-Currency Revolving Credit Maturity Date and the termination
of the  Multi-Currency  Revolving Credit Commitment of such Lender in accordance
with the terms  hereof,  in Dollars or one or more  Alternative  Currencies  (as
specified  in the  Borrowing  Requests  with respect  thereto),  in an aggregate
principal  amount  at any time  outstanding  that  will not  result  in (i) such
Lender's  Multi-Currency  Revolving Credit Exposure exceeding (ii) such Lender's
Multi-Currency Revolving Credit Commitment.  The Multi-Currency Revolving Credit
Commitments shall be terminated or reduced from time to time pursuant to Section
2.10. Within the foregoing limits,  the Borrowers may borrow,  pay or prepay and
reborrow  Multi-Currency  Revolving  Credit  Loans  hereunder,  on and after the
Effective Date and prior to the earlier of the  Multi-Currency  Revolving Credit
Maturity  Date and the  termination  of the  Multi-  Currency  Revolving  Credit
Commitments, subject to the terms, conditions and limitations set forth herein.

     (d)   Subject  to  the  terms  and   conditions   and   relying   upon  the
representations  and warranties  herein set forth,  each Periodic  Access Lender
agrees, severally and not jointly, to make loans to one or more of the Borrowers
(as specified in the Borrowing Requests with respect thereto),  on the Effective
Date  and,  subject  to the  limitations  provided  below,  from  time  to  time
thereafter  and until the earlier of the Periodic  Access  Maturity Date and the
termination of the Periodic  Access Loan Commitment of such Lender in accordance
with the terms  hereof,  in Dollars or one or more  Alternative  Currencies  (as
specified  in the  Borrowing  Requests  with respect  thereto),  in an aggregate
principal  amount  at any time  outstanding  that  will not  result  in (i) such
Lender's  Periodic  Access Loan Exposure  exceeding (ii) such Lender's  Periodic
Access Loan Commitment;  provided,  however, that Periodic Access Loans shall be
made  only on the  Effective  Date and on not more than two  dates  within  each
Periodic Access  Availability  Period.  The Periodic Access Loan Commitments are
subject to scheduled reductions as provided in, and may be terminated or reduced
from time to time pursuant to, Section 2.10.  Within the foregoing  limits,  the
Borrowers  may  borrow,  pay  or  prepay  and  reborrow  Periodic  Access  Loans
hereunder,  on the  Effective  Date and on not more than two dates  within  each
Periodic Access  Availability  Period thereafter and prior to the earlier of the
Periodic  Access  Maturity Date and the  termination of the Periodic Access Loan
Commitments, subject to the terms, conditions and limitations set forth herein.

     SECTION  2.02.  Loans.  (a) Each Loan (other than a Swingline  Loan,  as to
which this  Section  2.02 shall not apply)  shall be made as part of a Borrowing
consisting  of Loans  made by the  Lenders  ratably  in  accordance  with  their
applicable  Commitments;  provided,  however,  that the failure of any Lender to
make any Loan shall not in itself  relieve any other Lender of its obligation to
lend  hereunder  (it  being  understood,   however,  that  no  Lender  shall  be
responsible  for the failure of any other Lender to make any Loan required to be
made by such other Lender).  The Loans  comprising any Borrowing  shall be in an
aggregate  principal amount which is (i) an integral  multiple of $5,000,000 and
not less than  $10,000,000 or (ii) equal to the remaining  available  balance of
the applicable  Commitments.  The Loans  comprising  each  Alternative  Currency
Borrowing shall be made in the Alternative  Currency specified in the applicable
Borrowing Request in an amount equal to the Alternative  Currency  Equivalent of
the Dollar  amount  specified in such  Borrowing  Request,  as determined by the
Administrative  Agent as of the  Denomination  Date for  such  Borrowing  (which
determination  shall be conclusive  absent manifest error);  provided,  however,
that (A) for purposes of clause (i) above, each Alternative  Currency  Borrowing
shall be deemed  to be in an  aggregate  principal  amount  equal to the  Dollar
amount specified in the applicable  Borrowing Request for such Borrowing and (B)
if the Dollar  Equivalent  of an  outstanding  Multi-Currency  Revolving  Credit
Borrowing  denominated in an  Alternative  Currency,  determined  based upon the
applicable  Spot Exchange Rate as of the date that is three Business Days before
the end of the Interest Period with respect to such  Borrowing,  does not exceed
by more than 5% the Assigned Dollar Value of such  Borrowing,  and if the entire
amount of such Borrowing is to be refinanced with a new Multi-Currency Revolving
Credit  Borrowing  of  equivalent  amount in the same  currency  and by the same
Borrower, then such Multi-Currency  Revolving Credit Borrowing may be refinanced
without regard to compliance with clause (i) above and, if so refinanced,  shall
continue  to have the same  Assigned  Dollar  Value as in  effect  prior to such
refinancing. The Administrative Agent shall determine the applicable





<PAGE>





     Spot Exchange Rate as of the date three  Business Days before the end of an
Interest  Period with respect to a  Multi-Currency  Revolving  Credit  Borrowing
denominated  in an Alternative  Currency and shall  promptly  notify ASI and the
Multi-Currency  Revolving  Credit Lenders whether the Dollar  Equivalent of such
Borrowing exceeds by more than 5% the Assigned Dollar Value thereof.

     (b) Subject to Sections 2.09 and 2.13,  each  Borrowing  shall be comprised
entirely  of LIBOR  Loans or ABR Loans as the  applicable  Borrower  may request
pursuant to Section 2.03. Each Lender may, subject to Section  10.04(j),  at its
option make any LIBOR Loan or Alternative  Currency Loan by causing any domestic
or foreign  branch or Affiliate of such Lender to make such Loan;  provided that
any exercise of such option shall not affect the  obligation  of the  applicable
Borrower  to repay  such Loan in  accordance  with the terms of this  Agreement.
Borrowings of more than one Type may be outstanding at the same time;  provided,
however,  that none of the Borrowers  shall be entitled to request any Borrowing
which, if made,  would result in (i) more than 25 LIBOR  Borrowings  outstanding
hereunder  at any  time or (ii)  more  than  four  Term  Borrowings  outstanding
hereunder  at any  time.  For  purposes  of  the  foregoing,  Borrowings  having
different Interest Periods or denominated in different currencies, regardless of
whether  they  commence or end on the same date,  shall be  considered  separate
Borrowings.

     (c) Subject to paragraph (f) below,  each Lender shall make each Loan to be
made by it  hereunder  on the  proposed  date  thereof by wire  transfer to such
account as the Administrative  Agent may designate in federal funds (in the case
of any Loan denominated in Dollars) or such other immediately available funds as
may then be customary for the settlement of  international  transactions  in the
relevant  currency not later than 11:00 a.m., New York City time, in the case of
fundings to an account in New York City, or 11:00 a.m.,  local time, in the case
of fundings to an account in another jurisdiction,  and the Administrative Agent
shall by 12:00 (noon), New York City time, in the case of fundings to an account
in New York City,  or 12:00  (noon),  local time,  in the case of fundings to an
account in another  jurisdiction,  credit the  amounts so received to an account
designated by the applicable Borrower in the applicable Borrowing Request, which
account must be in the name of such Borrower and in the financial  center of the
country  of the  currency  of such  Loan  (except  that,  in the  case of  Loans
denominated in Dollars and in the case of all Loans made on the Effective  Date,
such account shall be in either New York or London) or, if a Borrowing shall not
occur on such date because any condition  precedent  herein  specified shall not
have been met, return the amounts so received to the respective Lenders.

     (d) Unless the  Administrative  Agent  shall have  received  notice  from a
Lender  prior  to the  date of any  Borrowing  that  such  Lender  will not make
available to the  Administrative  Agent such Lender's portion of such Borrowing,
the  Administrative  Agent may assume  that such  Lender  has made such  portion
available  to the  Administrative  Agent  on  the  date  of  such  Borrowing  in
accordance  with  paragraph  (c)  above and the  Administrative  Agent  may,  in
reliance upon such assumption, make available to the applicable Borrower on such
date a  corresponding  amount in the required  currency.  If the  Administrative
Agent shall have so made funds  available  then,  to the extent that such Lender
shall not have made such portion  available to the  Administrative  Agent,  such
Lender  and  the   applicable   Borrower   severally   agree  to  repay  to  the
Administrative Agent forthwith on demand such corresponding amount together with
interest  thereon in such  currency,  for each day from the date such  amount is
made available to the  applicable  Borrower until the date such amount is repaid
to the  Administrative  Agent at (i) in the case of the  Borrower,  the interest
rate  applicable at the time to the Loans  comprising such Borrowing and (ii) in
the  case of such  Lender,  a rate  determined  by the  Administrative  Agent to
represent  its cost of overnight or  short-term  funds in the relevant  currency
(which  determination shall be conclusive absent manifest error). If such Lender
shall repay to the Administrative  Agent such corresponding  amount, such amount
shall  constitute  such Lender's Loan as part of such  Borrowing for purposes of
this Agreement.

     (e)  Notwithstanding  any other  provision of this  Agreement,  none of the
Borrowers  shall be  entitled  to request any LIBOR  Borrowing  if the  Interest
Period  requested with respect  thereto would end after the applicable  Maturity
Date. All Alternative Currency Borrowings shall be LIBOR Borrowings.

     (f) A Borrower may refinance  all or any part of a U.S. $ Revolving  Credit
Borrowing  or  Multi-Currency  Revolving  Credit  Borrowing  with another U.S. $
Revolving Credit Borrowing or Multi- Currency Revolving Credit Borrowing, as the
case may be, in the same currency, subject to the conditions and limitations set
forth in this  Agreement  (including  the condition  that the  Aggregate  U.S. $
Revolving  Credit  Exposure or the  Aggregate  Multi-Currency  Revolving  Credit
Exposure, as applicable, after giving





<PAGE>





effect thereto will not exceed the Total U.S. $ Revolving  Credit  Commitment or
the Total  Multi-Currency  Revolving  Credit  Commitment,  as  applicable).  Any
Revolving  Credit  Borrowing or part thereof so refinanced shall be deemed to be
repaid or prepaid in accordance with the applicable provisions of this Agreement
with the proceeds of the new Borrowing,  and the proceeds of such new Borrowing,
to the extent they do not exceed the  principal  amount of the  Borrowing  being
refinanced,  shall not be paid by the applicable Revolving Credit Lenders to the
Administrative  Agent or by the Administrative  Agent to the applicable Borrower
pursuant to paragraph (c) above.

     (g) The  Administrative  Agent  shall  notify ASI and the U.S. $  Revolving
Credit Lenders of the amount of the Aggregate U.S. $ Revolving  Credit Exposure,
and shall notify ASI and the Multi-  Currency  Revolving  Credit  Lenders of the
amount of the  Aggregate  Multi-Currency  Revolving  Credit  Exposure,  promptly
following the last day of each February, May, August and November.

     SECTION 2.03. Borrowing  Procedure.  In order to request a Borrowing (other
than a  Swingline  Loan,  as to which  this  Section  2.03 shall not  apply),  a
Borrower  shall hand  deliver or  telecopy  to the  Administrative  Agent a duly
completed  Borrowing  Request  in the  form of  Exhibit  A (a) in the case of an
Alternative  Currency Borrowing and in the case of a LIBOR Borrowing,  not later
than 11:00 a.m.,  New York City time (or, if the Borrowing  Request is delivered
or telecopied to the Administrative  Agent in London,  10:00 a.m., London time),
three  Business  Days before a proposed  Borrowing and (b) in the case of an ABR
Borrowing denominated in Dollars, not later than 12:00 noon, New York City time,
one Business Day before a proposed Borrowing;  provided, however, that Borrowing
Requests with respect to Borrowings to be made on the Effective Date may, at the
discretion  of the  Administrative  Agent,  be  delivered  later  than the times
specified above.  Each Borrowing  Request shall be irrevocable and shall specify
(i) the Borrower  requesting  such  Borrowing  (and be signed by or on behalf of
such  Borrower);  (ii) if such  Borrowing is to be made on the  Effective  Date,
whether such Borrowing is to be a Term Borrowing, a Periodic Access Borrowing, a
U.S.  $  Revolving  Credit  Borrowing  or  a  Multi-Currency   Revolving  Credit
Borrowing,  or if such Borrowing is to be made after the Effective Date, whether
such Borrowing is to be a Periodic Access  Borrowing,  a U.S. $ Revolving Credit
Borrowing or a Multi- Currency  Revolving Credit  Borrowing;  (iii)-whether  the
Borrowing then being  requested is to be a LIBOR  Borrowing or an ABR Borrowing;
(iv) the number and  location of the account to which funds are to be  disbursed
(which  shall be an  account  that  complies  with the  requirements  of Section
2.02(c) and, in the case of a Borrowing  denominated in Dollars,  shall be at an
office of the Administrative  Agent in New York City or London); (v) the date of
such  Borrowing  (which  shall be a Business  Day and, in the case of a Periodic
Access Borrowing to be made after the Effective Date, shall be within a Periodic
Access Availability  Period);  (vi) the amount of such Borrowing (which shall be
expressed in Dollars,  regardless  of whether such  Borrowing is an  Alternative
Currency  Borrowing);  (vii) the  currency  of such  Borrowing  (which  shall be
Dollars,  in the case of the Term  Borrowing  and any U.S.  $  Revolving  Credit
Borrowing or ABR  Borrowing,  and otherwise  shall be Dollars or an  Alternative
Currency); and (viii) if such Borrowing is to be a LIBOR Borrowing, the Interest
Period with  respect  thereto;  provided,  however,  that,  notwithstanding  any
contrary  specification in any Borrowing Request, each requested Borrowing shall
comply with the requirements set forth in Section 2.02. If no election as to the
currency of  Borrowing  is  specified  in any such  notice,  then the  requested
Borrowing  shall be  denominated  in  Dollars.  If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall be
an ABR Borrowing if denominated  in Dollars or a LIBOR  Borrowing if denominated
in an  Alternative  Currency.  If no Interest  Period with  respect to any LIBOR
Borrowing is specified in any such notice, then the applicable Borrower shall be
deemed  to have  selected  an  Interest  Period  of one  month's  duration.  The
Administrative  Agent shall  promptly (and in any event on the same day that the
Administrative  Agent receives such notice,  if received by 11:00 a.m., New York
City time,  on such day)  advise  the  applicable  Lenders  of any notice  given
pursuant to this  Section  2.03 (and the  contents  thereof),  of each  Lender's
portion of the requested  Borrowing and, in the case of an Alternative  Currency
Borrowing, of the Alternative Currency Equivalent of the Dollar amount specified
in the  applicable  Borrowing  Request and the Spot  Exchange  Rate  utilized to
determine such Alternative Currency Equivalent.

     If a Borrower in respect of an outstanding Revolving Credit Borrowing shall
not have  delivered a Borrowing  Request in  accordance  with this  Section 2.03
prior to the end of the Interest  Period then in effect for such  Borrowing  and
requesting  that such Borrowing be refinanced,  then such Borrower shall (unless
such  Borrower  has  notified  the  Administrative  Agent,  not fewer than three
Business Days prior to the end of such Interest  Period,  that such Borrowing is






<PAGE>





to be  repaid  at the  end of  such  Interest  Period)  be  deemed  to have
delivered a Borrowing Request  requesting that such Borrowing be refinanced with
a new Revolving Credit Borrowing of equivalent amount in the same currency,  and
such new  Borrowing  shall be an ABR  Borrowing if  denominated  in Dollars or a
LIBOR Borrowing with an Interest  Period of one month's  duration if denominated
in an Alternative Currency.

     The sum of (a) the  aggregate  principal  amount of  Borrowings by the EEIG
Borrower,  plus (b) the Aggregate L/C Exposure under Letters of Credit issued at
the request of the EEIG Borrower, at any one time outstanding,  shall not exceed
$575,000,000.

     SECTION 2.04.  Interest Rate  Elections;  Conversion  and  Continuation  of
Loans.  (a) The initial Type of the Loans  comprising  each  Borrowing,  and the
duration of the initial  Interest  Period  applicable  to such Loans if they are
initially LIBOR Loans, shall be as specified in the applicable Borrowing Request
pursuant to Section 2.03.  Thereafter,  the applicable Borrower may from time to
time elect to convert or continue  the Type of, or the  duration of the Interest
Period  applicable  to, the Loans included in any Borrowing  (excluding  overdue
Loans and subject in each case to the  provisions of the  definition of Interest
Period and Sections 2.09 and 2.13), as follows:

     (i) if such  Loans are ABR  Loans,  the  applicable  Borrower  may elect to
convert such Loans to LIBOR Loans, may elect to continue such Loans as ABR Loans
for an  additional  Interest  Period,  or may elect to convert such Loans to any
combination of ABR Loans and LIBOR Loans; and

     (ii) if such Loans are LIBOR Loans,  the  applicable  Borrower may elect to
convert such Loans to ABR Loans, may elect to continue such Loans as LIBOR Loans
for an  additional  Interest  Period,  or may elect to convert such Loans to any
combination of ABR Loans and LIBOR Loans.

     Notwithstanding the foregoing,  a Borrower may not (A) elect to convert the
currency in which any Loans are  denominated,  (B) elect to convert  Alternative
Currency Loans from LIBOR Loans to ABR Loans,  (C) elect an Interest  Period for
LIBOR Loans that does not comply with Section 2.02(e),  (D) elect to convert any
ABR Loans to LIBOR  Loans  that would  result in the number of LIBOR  Borrowings
exceeding  the  maximum  number  of LIBOR  Borrowings  permitted  under  Section
2.02(b),  (E) elect an  Interest  Period for LIBOR  Loans  unless the  aggregate
outstanding  principal  amount of LIBOR Loans (including any LIBOR Loans made to
such Borrower in the same  currency on the date that such Interest  Period is to
begin) to which such Interest  Period will apply complies with the  requirements
as to minimum  principal  amount  set forth in  Section  2.02(a) or (F) elect to
convert or continue any Revolving Credit Loan or Swingline Loan.

     (b) Any election  permitted by Section 2.04(a) may become  effective on any
Business Day specified by the applicable  Borrower (the "Election  Date").  Each
such  election  shall  be made  by the  applicable  Borrower  by  delivering  or
telecopying   a  notice  (a  "Notice  of  Interest   Rate   Election")   to  the
Administrative  Agent (x) not later than  11:00  a.m.,  New York City time,  one
Business Day before the Election  Date, if all the  resulting  Loans will be ABR
Loans and (y) not later than 10:00 a.m., New York City time,  (or, if the Notice
of Interest Rate Election is delivered or telecopied to the Administrative Agent
in London,  10:00 a.m.,  London time),  three  Business Days before the Election
Date, if the resulting  Loans will include LIBOR Loans.  Each Notice of Interest
Rate Election shall specify the  outstanding  Loans to which such notice applies
and the following information:

     (i) the Election Date;

     (ii) whether such Loans are to be converted to or continued as ABR Loans or
LIBOR  Loans and, if such Loans are to be  converted  to or  continued  as LIBOR
Loans, the duration of the Interest Period applicable thereto; and

     (iii) if such Loans are to be converted to a  combination  of ABR Loans and
LIBOR Loans, the information specified in clause (ii) above as to each resulting
Borrowing and the aggregate amount of each such Borrowing.






<PAGE>





     Each Notice of Interest Rate Election  shall comply with the  provisions of
the definition of Interest Period and the last sentence of Section 2.04(a).

     (c) Upon receipt of a Notice of Interest Rate Election,  the Administrative
Agent shall  promptly  notify each  Lender of the  contents  thereof and of such
Lender's  share of the resulting  Borrowing and such notice shall not thereafter
be revocable by the applicable Borrower.

     (d) If a  Borrower  fails to  deliver  a timely  Notice  of  Interest  Rate
Election to the  Administrative  Agent electing to convert or continue the Loans
included in any  Borrowing as provided in this  Section and has not  theretofore
delivered a notice of  prepayment  relating to such  Loans,  then such  Borrower
shall be deemed to have given the Administrative Agent a Notice of Interest Rate
Election  electing (i) in the case of Loans  denominated in Dollars,  to convert
such  Loans to (or  continue  such  Loans  as) ABR  Loans or (ii) in the case of
Alternative Currency Loans,  electing to continue such Loans as LIBOR Loans with
an Interest Period of one month, in each case with an Interest Period commencing
on the last day of the then current Interest Period.

     (e)  Notwithstanding  the  foregoing,  a Borrower  shall not be entitled to
specify or elect in any  Borrowing  Request or Notice of Interest  Rate Election
that any Loans denominated in Dollars shall be or become LIBOR Loans if an Event
of Default  shall have occurred and be  continuing  unless the Required  Lenders
shall have  notified  the  Administrative  Agent  that  additional  LIBOR  Loans
denominated  in Dollars shall be made  available  while such Event of Default is
continuing.  If an Event of Default shall occur then, unless the  Administrative
Agent shall receive such notice from the Required Lenders, thereafter, until all
Events of Default have been cured or waived (or such notice has been  received),
each  outstanding Loan denominated in Dollars shall be converted to or continued
as an ABR Loan on the last day of its Interest  Period and any additional  Loans
denominated  in Dollars  shall be made as ABR Loans.  The  foregoing  is without
prejudice to the other rights and remedies available  hereunder upon an Event of
Default.

     SECTION  2.05.  Fees.  (a) ASI  agrees to pay,  or cause one or more of the
Borrowers to pay, to each Lender,  through the Administrative  Agent, and to the
Administrative  Agent,  on the date  hereof  and on the  Effective  Date (to the
extent not previously  paid), the fees (the "Upfront Fees") separately agreed to
be payable by ASI to each such  Lender  and to the  Administrative  Agent on the
Effective Date.

     (b) ASI agrees to pay, or cause one or more of the Borrowers to pay, to the
U.S. $ Revolving Credit Lenders and the Multi-Currency Revolving Credit Lenders,
as appropriate,  through the Administrative  Agent, on the last day of February,
May,  August  and  November  of each  year and on the date on which  the U.S.  $
Revolving  Credit  Commitments  of the U.S. $ Revolving  Credit  Lenders and the
Multi-Currency  Revolving  Credit  Commitments of the  Multi-Currency  Revolving
Credit  Lenders  shall be  terminated as provided  herein,  a commitment  fee (a
"Commitment  Fee") of 0.375% per annum on the average daily unused amount of the
Total U.S. $ Revolving Credit Commitment and the Total Multi- Currency Revolving
Credit  Commitment,  as  applicable,  during the  preceding  quarter (or shorter
period  commencing  with the Effective Date or ending with the date on which the
Total U.S. $ Revolving Credit Commitment or the Total  Multi-Currency  Revolving
Credit Commitment, as applicable, shall be terminated); provided that so long as
no Event of Default shall have occurred and be continuing,  each such Commitment
Fee shall be reduced by the amount set forth under the caption  "Fee  Reduction"
below  opposite  whichever of the  financial  ratio  conditions  for ASI and its
Consolidated  Subsidiaries set forth under the caption  "Financial Ratios" below
is satisfied and results in the greatest  reduction  (with  satisfaction of such
financial ratio  conditions  being  determined  based on the balance sheets most
recently  delivered to the Lenders pursuant to clause (a) or (b) of Section 5.01
and the related  statements of income for the period of four consecutive  fiscal
quarters ended as of the date of such balance sheets, after giving effect to any
pro forma adjustments thereto as provided below, and with each "Financial Ratio"
and any corresponding change in the applicable Commitment Fee becoming effective
on the earlier of the date on which such financial  statements are delivered and
the date by which such financial  statements are required to have been delivered
pursuant to clause (a) or (b) of Section 5.01):








<PAGE>


Financial Ratios                                             Fee Reduction


Ratio of Consolidated Free Cash Flow to Consolidated Cash
Fixed Charges > 2.75:1 and Ratio of Consolidated Total
Debt to Consolidated EBITDA                                  3.5:1 .0625%

Ratio of Consolidated Free Cash Flow to Consolidated Cash
Fixed Charges > 3.25:1 and Ratio of Consolidated Total
Debt to Consolidated EBITDA                                   3.0:1 .1250%

Ratio of Consolidated Free Cash Flow to Consolidated Cash
Fixed Charges > 3.75:1 and Ratio of Consolidated Total
Debt to Consolidated EBITDA                                  2.75:1 .1500%

Ratio of Consolidated Free Cash Flow to Consolidated Cash
Fixed Charges > 4.25:1 and Ratio of Consolidated Total
Debt to Consolidated EBITDA                                  2.25:1 .1750%

Ratio of Consolidated Free Cash Flow to Consolidated Cash
Fixed Charges > 5.00:1 and Ratio of Consolidated Total
Debt to Consolidated EBITDA                                  2.00:1 .1875%

     In the event (a)  Holding  shall  complete  an  equity  offering  for gross
proceeds in excess of $20,000,000 or (b) ASI shall complete, directly or through
a  Subsidiary,  (i) any offering of Securities  for gross  proceeds in excess of
$20,000,000,  (ii) a refinancing,  repurchase or prepayment of Indebtedness in a
principal amount in excess of $20,000,000 (but only, in the case of Indebtedness
outstanding  under  any  revolving  credit  or  similar   arrangement,   if  the
commitments of the lenders are reduced by a  corresponding  amount) as permitted
under  Section  6.04(d)  or  Section  6.07 or (iii)  an  Acquisition  for  total
consideration  (including  Funded Debt  incurred or assumed and common  stock of
Holding) in excess of $20,000,000,  then ASI shall deliver to the Administrative
Agent pro forma  computations  of the ratios referred to in the proviso above as
if such offering, refinancing or Acquisition had been completed on the first day
of the period of four consecutive  fiscal quarters  referred to above, and until
four  complete  fiscal  quarters  shall  have  elapsed  since  the  date of such
offering,  refinancing or Acquisition and financial  statements  shall have been
delivered with respect  thereto under Section 5.01, the Applicable  Margin shall
be  determined  by reference to the pro forma  information  for such of the four
fiscal quarters preceding and including the fiscal quarter during which the date
of such offering, refinancing or Acquisition shall have occurred as is necessary
to compile information (both pro forma and, to the extent available, actual) for
each period of four fiscal quarters. With respect to an Acquisition,  whether or
not such Acquisition  shall be completed in reliance on paragraph (m) of Section
6.05,  ASI shall  also  deliver  to the  Administrative  Agent  the  information
specified in clause  (y)(1),  (2) or (3) of the proviso to such paragraph (m) at
the time provided therein.

     All Commitment  Fees shall be computed on the basis of the actual number of
days elapsed in a year of 360 days. For purposes of calculating Commitment Fees,
any portion of the Total Multi-Currency  Revolving Credit Commitment unavailable
due to outstanding  Swingline  Loans shall be deemed to be unused amounts of the
Total Multi-Currency Revolving Credit Commitment. Commitment Fees shall commence
to accrue on the Effective  Date and shall cease to accrue on the earlier of (i)
the U.S. $ Revolving Credit Maturity Date or the Multi-Currency Revolving Credit
Maturity  Date,  as  applicable  or (ii) the  termination  of the Total  U.S.  $
Revolving  Credit  Commitment  or  the  Total  Multi-Currency  Revolving  Credit
Commitment, as applicable.  For purposes of this paragraph, the unused amount of
the Total U.S. $ Revolving  Credit  Commitment  on any day shall be deemed to be
the excess,  if any, of (i) the Total U.S. $ Revolving  Credit  Commitment  over
(ii) the Aggregate U.S. $ Revolving Credit Exposure on such day. For purposes of
this paragraph,  the unused amount of the Total Multi-Currency  Revolving Credit
Commitment on any day shall be deemed to be the excess, if any, of (i) the Total
Multi-Currency   Revolving   Credit   Commitment   over   (ii)   the   Aggregate
Multi-Currency  Revolving Credit Exposure (excluding Swingline Exposure) on such
day.

     (c) ASI agrees to pay, or to cause the applicable  Account  Parties to pay,
(i) to each U.S. $ Revolving Credit Lender and  Multi-Currency  Revolving Credit
Lender,  through the  Administrative  Agent,  on the last day of February,  May,
August and November of each year and on the date on which the





<PAGE>





     U.S. $ Revolving Credit Commitment or the  Multi-Currency  Revolving Credit
Commitment of such Lender shall be terminated as provided herein, a fee (an "L/C
Participation  Fee")  calculated  on  each  U.S.  $  Revolving  Credit  Lender's
Applicable  Percentage of the average daily aggregate U.S. $ L/C Exposure and on
each  Multi-Currency  Revolving  Credit  Lender's  Applicable  Percentage of the
average daily aggregate  Multi-Currency L/C Exposure  (excluding,  in each case,
the portion thereof  attributable to unreimbursed L/C Disbursements)  during the
preceding  quarter (or shorter  period  commencing  with the  Effective  Date or
ending  with  the  U.S.  $  Revolving  Credit  Maturity  Date or  Multi-Currency
Revolving  Credit Maturity Date, as applicable,  or any date on which the U.S. $
Revolving Credit Commitment or Multi-Currency  Revolving Credit  Commitment,  as
applicable,  of  such  Lender  shall  be  terminated)  at a  rate  equal  to the
Applicable  Margin from time to time  applicable for purposes of determining the
interest rate on U.S. $ Revolving Credit Borrowings or Multi-Currency  Revolving
Credit Borrowings,  as applicable,  comprised of LIBOR Loans pursuant to Section
2.07 and (ii) to the  applicable  Issuing  Bank with  respect to each  Letter of
Credit the fees specified in its Issuing Bank Agreement plus, in connection with
the  issuance,  amendment  or  transfer  of any  Letter  of  Credit  or any  L/C
Disbursement, the applicable Issuing Bank's customary documentary and processing
charges (collectively,  the "Issuing Bank Fees"). All L/C Participation Fees and
Issuing  Bank Fees shall be computed  on the basis of the actual  number of days
elapsed in a year of 360 days.

     (d) ASI agrees to pay, or to cause one or more of the  Borrowers to pay, to
the Administrative  Agent, for its own account,  agent and  administrative  fees
(the "Agent and Administrative Fees") at the times and in the amounts separately
agreed upon between ASI and the Administrative Agent.

     (e) All Fees  shall be paid on the  dates  due,  in  immediately  available
funds,  to the  Administrative  Agent for  distribution,  if and as appropriate,
among the Lenders,  except that the Issuing Bank Fees shall be paid  directly to
the  Issuing  Bank  entitled  thereto.  Once  paid,  none of the  Fees  shall be
refundable under any circumstances.

     SECTION 2.06. Notes;  Repayment of Loans. (a) Each Borrower agrees that the
outstanding  principal balance of its Term Loans shall be due and payable in ten
semi-annual installments, payable on the last day of February and August of each
year,  commencing on August 31, 1995.  Subject to paragraph (e) below, each such
installment shall be in an aggregate  principal amount equal to $10,000,000.  In
any event,  the final  such  installment  shall be payable on the Term  Facility
Maturity Date in an amount equal to the remaining unpaid principal amount of the
Term Loans. All principal payments of Term Loans shall be accompanied by accrued
interest on the principal amount being repaid to the date of payment.

     (b) Each  Borrower  agrees that the  outstanding  principal  balance of its
Periodic  Access Loans shall be due and payable on the Periodic  Access Maturity
Date.  All principal  payments of Periodic  Access Loans shall be accompanied by
accrued interest on the principal amount being repaid to the date of payment.

     (c) Each Borrower agrees that the outstanding  principal balance of each of
its  Revolving  Credit  Loans  shall be due and  payable  on the last day of the
Interest Period applicable to such Loan or, if earlier,  on the U.S. $ Revolving
Credit  Maturity  Date or  Multi-Currency  Revolving  Credit  Maturity  Date, as
applicable.   All  principal   payments  of  Revolving  Credit  Loans  shall  be
accompanied by accrued interest on the principal amount being repaid to the date
of payment.

     (d) Each  Borrower  shall,  at the request of any Lender,  duly execute and
deliver  to  such  Lender  a  Note  or  Notes,  dated  the  Effective  Date,  in
substantially  the form  attached  hereto as Exhibit  B-1,  B-2,  B-3 or B-4, as
appropriate,  with the blanks appropriately filled, payable to the order of such
Lender  (or,  if such Lender  shall so  request,  to such  Lender or  registered
assigns).  Notwithstanding  any other provision of this Agreement,  in the event
any Lender  shall  request  and  receive a Note  payable to such  Lender and its
registered  assigns,  the interests  represented by that Note shall at all times
(including  after any  assignment  of all or part of such  interest  pursuant to
Section  10.04) be  represented  by one or more Notes payable to the payee named
therein or its registered  assigns.  The failure of any Lender to request a Note
hereunder shall in no way diminish the obligation of the applicable  Borrower to
pay the principal of and interest on the Loans that would have been evidenced by
such Note in accordance with the terms of this Agreement.





<PAGE>






     (e) Any  prepayment of Term Loans pursuant to Section 2.11 shall be applied
to reduce, in order of maturity, all repayment installments (including the final
installment  payable on the Term Facility Maturity Date) of Term Loans scheduled
to be payable  subsequent to the date of such prepayment (after giving effect to
any  previous  reductions  of  such  repayment  installments  pursuant  to  this
paragraph).

     (f) Each Lender  shall,  and is hereby  authorized by each of the Borrowers
to,  maintain in  accordance  with its usual  practice  records  evidencing  the
indebtedness  of each of the  Borrowers  to such Lender  hereunder  from time to
time,  including the amounts and types of and the Interest Periods applicable to
the Loans made by such Lender from time to time and the amounts of principal and
interest paid to such Lender from time to time in respect of such Loans.

     (g) The entries made in the records maintained pursuant to paragraph (f) of
this Section and in the Register maintained by the Administrative Agent pursuant
to Section  10.04 shall be prima facie  evidence of the existence and amounts of
the Loans of the Borrower to which such entries relate; provided,  however, that
the failure of any Lender or the Administrative Agent to maintain or to make any
entry in such records or the Register, as applicable, or any error therein shall
not in any manner  affect the  obligation of the Borrowers to repay the Loans in
accordance with the terms of this Agreement.

     SECTION 2.07.  Interest on Loans.  (a) Subject to the provisions of Section
2.08, the Loans comprising each LIBOR Borrowing shall bear interest (computed on
the basis of the  actual  number of days  elapsed  over a year of 360 days) at a
rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect
for such Borrowing plus the Applicable Margin.  Interest on each LIBOR Borrowing
shall be payable on each  applicable  Interest  Payment Date.  The Adjusted LIBO
Rate for each Interest Period shall be determined by the  Administrative  Agent,
and such determination shall be conclusive absent manifest error.

     (b) Subject to the  provisions of Section 2.08, the Loans  comprising  each
ABR Borrowing shall bear interest (computed on the basis of the actual number of
days elapsed over a year of (i) 365 or 366 days,  as the case may be, during any
period in which the Alternate Base Rate is based on the Prime Rate, and (ii) 360
days, during any period in which the Alternate Base Rate is based on the Base CD
Rate or the  Federal  Funds  Effective  Rate) at a rate per  annum  equal to the
Alternate Base Rate plus the Applicable  Margin.  Interest on each ABR Borrowing
shall be payable on each  applicable  Interest  Payment Date. The Alternate Base
Rate  shall  be  determined  by the  Administrative  Agent  for  each  day  such
determination is required,  and such  determination  shall be conclusive  absent
manifest error.


     SECTION  2.08.  Default  Interest.  If any  Borrower  shall  default in the
payment of the principal of or interest on any Loan or any other amount becoming
due  hereunder,   whether  at  scheduled  maturity,  by  notice  of  prepayment,
acceleration  or otherwise,  such Borrower shall on demand from time to time pay
interest,  to the extent  permitted by law, on such defaulted  amount up to (but
not including) the date of actual payment (after as well as before judgment) at,
(a) in the  case of  principal  or  interest,  the rate  that  would  have  been
applicable  to such  Loan but for such  default  plus 2% per annum or (b) in the
case of any other amount,  a rate (computed on the basis of the actual number of
days elapsed over a year of 360 days) equal to the Alternate  Base Rate plus the
Applicable Margin with respect to Revolving Credit Borrowings plus 2% per annum.

     SECTION  2.09.  Alternate  Rate  of  Interest.  In the  event,  and on each
occasion,  that on the day two Business  Days prior to the  commencement  of any
Interest Period for a LIBOR Borrowing of any Type the Administrative Agent shall
have  determined  or shall have been  notified by the Required  Lenders (a) that
deposits in the principal  amounts of the Loans comprising such Borrowing and in
the  currency  in which  such  Loans  are to be  denominated  are not  generally
available  in the relevant  market,  or that  reasonable  means do not exist for
ascertaining  the  Adjusted  LIBO  Rate,  or (b)  that the  rates at which  such
deposits are being offered will not  adequately  and fairly  reflect the cost to
Lenders  holding a material amount of the Loans included in such LIBOR Borrowing
of making or  maintaining  their LIBOR Loans during such  Interest  Period,  the
Administrative  Agent shall, in a timely manner, give written or telecopy notice
of such determination to the Borrowers and the Lenders. In the event of any such
determination,  until the Administrative  Agent shall have advised the Borrowers
and the Lenders that the circumstances





<PAGE>





giving rise to such  notice no longer  exist,  any  request by a Borrower  for a
LIBOR  Borrowing  of  the  affected  Type  or in  the  affected  currency,  or a
conversion to or  continuation  of a LIBOR  Borrowing of the affected Type or in
the  affected  currency,  pursuant  to  Section  2.03 or 2.04  shall  be  deemed
rescinded.  Each  determination by the  Administrative  Agent hereunder shall be
conclusive absent manifest error.

     SECTION 2.10.  Termination and Reduction of Commitments.  (a) The Term Loan
Commitments  shall be  automatically  terminated at the  Administrative  Agent's
close of business on the Effective  Date. The Periodic  Access Loan  Commitments
shall be automatically terminated on the Periodic Access Maturity Date. The U.S.
$ Revolving Credit  Commitments shall be automatically  terminated on the U.S. $
Revolving Credit Maturity Date. The Multi-Currency  Revolving Credit Commitments
and  the  Swingline   Commitment  shall  be  automatically   terminated  on  the
Multi-Currency Revolving Credit Maturity Date.

     (b) Subject to paragraph (f) below,  the Periodic  Access Loan  Commitments
shall be automatically  reduced by (i) $15,000,000 on August 31, 1995 and on the
last day of each February and August  thereafter  through and including the last
day of February in the year 1998, (ii) $25,000,000 on August 31, 1998,  February
28, 1999, and August 31, 1999,  (iii)  $35,000,000 on February 29, 2000,  August
31, 2000 and  February 28, 2001 and (iv)  $40,000,000  on August 31, 2001 and on
the Periodic Access Maturity Date (or, if the amount of such scheduled reduction
exceeds the Total Periodic  Access  Commitment on any such date,  then the Total
Periodic Access Commitment shall be automatically terminated on such date).

     (c) Upon at  least  three  Business  Days'  prior  irrevocable  written  or
telecopy  notice  to the  Administrative  Agent,  ASI  (on  behalf  of  all  the
Borrowers) may at any time in whole permanently terminate,  or from time to time
in part  permanently  reduce,  the U.S.  $  Revolving  Credit  Commitments,  the
Multi-Currency   Revolving  Credit  Commitments  or  the  Periodic  Access  Loan
Commitments;  provided,  however,  that (i) each partial reduction of the U.S. $
Revolving Credit Commitments or the Multi- Currency Revolving Credit Commitments
shall be in an integral multiple of $5,000,000 and in a minimum principal amount
of $10,000,000,  (ii) the Total U.S. $ Revolving Credit  Commitment shall not be
reduced  to an amount  that is less than the U.S.  $ L/C  Exposure  at the time,
(iii) the Total Multi- Currency Revolving Credit Commitment shall not be reduced
to an amount that is less than the sum of the  Multi-Currency  L/C  Exposure and
Swingline  Exposure  at the time  and (iv) a  termination  or  reduction  of the
Periodic  Access Loan  Commitments  under this paragraph  shall not be permitted
except in  connection  with a  simultaneous  prepayment  of the Term  Borrowings
pursuant  to  Section  2.11(a)  in  compliance  with the terms of such  Section,
including clause (iii) of the proviso thereto.

     (d) The Periodic Access Loan Commitments  shall be reduced at the times and
in the amounts specified in paragraph (b) above and Section 2.11.

     (e) In the event of any reduction of the Periodic  Access Loan  Commitments
pursuant to paragraph (d) above, the aggregate amount of such reduction shall be
applied  to  decrease,  in order of  maturity,  the  respective  amounts  of the
scheduled  reductions  of the  Periodic  Access  Loan  Commitments  pursuant  to
paragraph (b) above that are  scheduled to occur  subsequent to the date of such
reduction  (after  giving  effect to any  previous  decreases  pursuant  to this
paragraph).

     (f) Each reduction in the Periodic Access Loan Commitments  hereunder shall
be made  ratably  among the Periodic  Access  Lenders in  accordance  with their
respective  Periodic  Access  Loan  Commitments.  Each  reduction  in the U.S. $
Revolving  Credit  Commitments  shall be made ratably among the U.S. $ Revolving
Credit  Lenders in  accordance  with their  respective  U.S. $ Revolving  Credit
Commitments,   and  each  reduction  in  the  Multi-Currency   Revolving  Credit
Commitments  shall be made ratably  among the  Multi-Currency  Revolving  Credit
Lenders in accordance with their  respective  Multi- Currency  Revolving  Credit
Commitments.  ASI shall pay to the Administrative  Agent for the accounts of the
Revolving  Credit Lenders,  on the date of each  termination or reduction of the
Revolving  Credit  Commitments,  the  Commitment  Fees  on the  amount  of  such
Commitments  so  terminated  or  reduced   accrued  through  the  date  of  such
termination or reduction.

     SECTION 2.11. Prepayment.  (a) Voluntary  Prepayments.  Each Borrower shall
have the  right at any time and from time to time to prepay  any  Borrowing,  in





<PAGE>





whole or in part,  upon  giving  written or telecopy  notice (or  telephone
notice promptly  confirmed by written or telecopy notice) to the  Administrative
Agent before 11:00 a.m., New York City time (or, in the case of prepayment of an
Alternative  Currency  Borrowing in respect of which previous  notices have been
delivered  to the  Administrative  Agent in London,  then to the  Administrative
Agent in London before 10:00 a.m.,  London time),  three  Business Days prior to
prepayment;  provided,  however, that (i) each partial prepayment of a Revolving
Credit  Borrowing or Periodic Access  Borrowing under this paragraph shall be in
an amount which is an integral  multiple of $5,000,000 (or the equivalent  based
upon Assigned  Dollar Values) and not less than  $10,000,000  (or the equivalent
based  upon  Assigned  Dollar  Values),  (ii) a  partial  prepayment  of a LIBOR
Borrowing  under  this  paragraph  shall  not be made that  would  result in the
remaining  aggregate  outstanding  principal  amount thereof being less than the
minimum  principal amount that would be required  pursuant to Section 2.02(a) in
respect of a LIBOR  Borrowing  made on the date of such  prepayment  (determined
based upon Assigned Dollar Values in the case of Multi-Currency Revolving Credit
Borrowings  and  Periodic  Access  Borrowings),   (iii)  a  prepayment  of  Term
Borrowings under this paragraph shall not be permitted unless (A) at the time of
such prepayment,  the Term Borrowings are prepaid,  and the Periodic Access Loan
Commitments are reduced pursuant to Section 2.10(c), pro rata in accordance with
the aggregate  outstanding  principal  amounts of such Term  Borrowings  and the
amount of the Total Periodic Access  Commitment,  respectively,  and (B) if such
prepayment is a partial prepayment, the aggregate amount of such prepayments and
reduction shall be in an amount which is an integral  multiple of $5,000,000 and
not less than  $10,000,000 and (iv) a prepayment of a Periodic Access  Borrowing
under this  paragraph  shall not be permitted  except  during a Periodic  Access
Availability  Period and only if one or more Periodic Access Borrowings are made
on the same date as such prepayment  resulting in the Aggregate  Periodic Access
Loan Exposure being equal to the Total Periodic Access  Commitment  after giving
effect  to all  Borrowings  and  prepayments,  and all  reductions  of the Total
Periodic Access  Commitment,  made on such date.  Prepayments of Term Borrowings
and Periodic Access Borrowings will be applied to reduce the remaining scheduled
payments or commitment  reductions  in respect of such Credit  Facilities in the
order of maturity.

     (b)  Required  Periodic  Access  Prepayments.  (i)  In  the  event  of  any
termination of the Periodic Access Loan  Commitments,  each Borrower shall repay
or prepay all its  outstanding  Periodic  Access  Borrowings on the date of such
termination.

     (ii) In the event of any  partial  reduction  of the  Periodic  Access Loan
Commitments,  then (A) at or prior to the effective date of such reduction,  the
Administrative  Agent shall notify ASI and the Lenders  having  Periodic  Access
Loan  Commitments of the Aggregate  Periodic Access Loan Exposure and (B) if the
Aggregate  Periodic  Access Loan Exposure would exceed the Total Periodic Access
Commitment after giving effect to such reduction, then ASI shall, on the date of
such  reduction,  cause  the  Borrowers  to  repay  or  prepay  Periodic  Access
Borrowings  having an Assigned Dollar Value in an amount sufficient to eliminate
such excess.

     (iii) In the event that at the end of any  Interest  Period in respect of a
Periodic  Access  Borrowing  the  Assigned  Dollar  Value  thereof  shall either
increase or decrease,  then (A) at or prior to the end of such Interest  Period,
the Administrative Agent shall notify ASI and the Lenders having Periodic Access
Loan Commitments of the amount of such increase or decrease and of the resulting
Aggregate  Periodic Access Loan Exposure and (B) in the case of an increase,  if
the resulting  Aggregate  Periodic  Access Loan Exposure  would exceed the Total
Periodic Access Commitment after giving effect to such increase, then ASI shall,
on the date such increase  becomes  effective,  cause the Borrower in respect of
such Periodic Access Borrowing to repay or prepay a portion thereof in an amount
sufficient  to reduce the Assigned  Dollar Value of such  Borrowing to an amount
equal  to the  Assigned  Dollar  Value  thereof  before  giving  effect  to such
increase.

     (c)  Required  Revolving  Credit  Prepayments.  (i)  In  the  event  of any
termination of the U.S. $ Revolving  Credit  Commitments  or the  Multi-Currency
Revolving  Credit  Commitments,  each  Borrower  shall  repay or prepay  all its
outstanding  U.S. $ Revolving  Credit  Borrowings  or  Multi-Currency  Revolving
Credit Borrowings, as the case may be, on the date of such termination.

     (ii) In the event of any partial  reduction of the U.S. $ Revolving  Credit
Commitments or the Multi-Currency  Revolving Credit Commitments,  then (A) at or
prior to the effective date of such reduction,  the  Administrative  Agent shall
notify ASI and the Revolving Credit Lenders of the Aggregate





<PAGE>





     U.S. $ Revolving Credit Exposure or the Aggregate  Multi-Currency Revolving
Credit  Exposure,  as the case may be, and (B) if the Aggregate U.S. $ Revolving
Credit Exposure would exceed the Total U.S. $ Revolving Credit Commitment or the
Aggregate  Multi-Currency  Revolving  Credit  Exposure  would  exceed  the Total
Multi-Currency   Revolving  Credit   Commitment  after  giving  effect  to  such
reduction, then ASI shall, on the date of such reduction, cause the Borrowers to
repay or prepay U.S. $ Revolving  Credit  Borrowings,  Multi-Currency  Revolving
Credit  Borrowings  or  Swingline  Loans (or a  combination  thereof)  having an
Assigned Dollar Value in an amount sufficient to eliminate such excess.

     (d)  Prepayment  Events.  In the  event  and on  each  occasion  after  the
Effective  Date that a  Prepayment  Event  occurs,  ASI  shall,  on each date of
receipt by Holding,  ASI or any  Subsidiary  of Net Cash  Proceeds in respect of
such Prepayment Event,  cause the Borrowers to prepay Term Borrowings and reduce
the Periodic Access Loan Commitments, pro rata in accordance with the respective
outstanding principal amounts of the Term Borrowings and the amount of the Total
Periodic  Access  Commitment,  in an aggregate  amount equal to 100% of such Net
Cash Proceeds; provided, however, that (A) no such prepayment of Term Borrowings
and  reduction  of  Periodic  Access  Loan  Commitments  shall be required in an
aggregate amount less than $10,000,000 (or the Alternative  Currency Equivalent)
and any  receipt of Net Cash  Proceeds  that  would  result in  prepayments  and
reductions in a lesser amount shall cumulate  until the aggregate  amount of Net
Cash Proceeds received and not yet applied equals or exceeds $10,000,000 (or the
Alternative Currency Equivalent),  at which time such prepayments and reductions
shall be made, (B) to the extent that Net Cash Proceeds received in respect of a
Prepayment Event are received by an Excluded  Subsidiary,  no prepayment of Term
Borrowings or reduction of Periodic  Access Loan  Commitments  shall be required
hereunder in respect of such Net Cash  Proceeds  unless and until such  Excluded
Subsidiary ceases to be an Excluded Subsidiary (provided that ASI shall exercise
commercially reasonable efforts to arrange for such Net Cash Proceeds to be paid
to ASI or another Subsidiary that is not an Excluded  Subsidiary if such payment
can be  made  without  commercially  unreasonable  consequences)  and (C) to the
extent that any prepayment  required by this paragraph would require  prepayment
of any LIBOR Borrowing or Alternative Currency Borrowing on a day other than the
last day of the  Interest  Period with  respect  thereto and would result in the
incurrence of costs pursuant to Section 2.14,  then,  unless an Event of Default
has occurred and is continuing,  the amount that would be required to be applied
to  prepay  such  Borrowing  may,  at ASI's  option,  be paid on such day to the
Collateral  Agent and held as cash Collateral  securing such Borrowing until the
last day of the Interest  Period with respect to such  Borrowing,  at which time
such  amount  shall be applied  to prepay  such  Borrowing  (provided  that,  in
determining  which  Borrowings  of a Borrower are to be prepaid  within a Credit
Facility,  prepayments  required by this paragraph  shall be allocated by ASI in
such manner as will  minimize  the  necessity  and  duration of any  deferral of
prepayment pursuant to this clause (C)). ASI shall deliver to the Administrative
Agent at or prior to the time of each  prepayment  pursuant to this  paragraph a
certificate  executed by a Financial  Officer of ASI setting forth in reasonable
detail the calculation of the amount of such prepayment.

     (e) Excess Cash Flow.  As promptly as  practicable  but in any event within
120 days after the end of each  fiscal year of ASI,  commencing  with the fiscal
year ending  December  31,  1995,  ASI shall cause the  Borrowers to prepay Term
Borrowings and reduce Periodic Access Loan  Commitments,  pro rata in accordance
with the respective outstanding principal amounts of the Term Borrowings and the
amount of the Total Periodic Access Commitment,  in an aggregate amount equal to
the Excess Cash Prepayment  Amount with respect to such fiscal year,  unless the
ratio calculated  pursuant to Section 6.10 for the period ending on the last day
of such fiscal year is less than 3.35:1. ASI shall deliver to the Administrative
Agent at or prior to the time of each  prepayment  pursuant to this  paragraph a
certificate  executed by a Financial  Officer of ASI setting forth in reasonable
detail the calculation of the amount of such prepayment.

     (f) Prepayments  Generally.  ASI (or the applicable Borrower) shall deliver
to the  Administrative  Agent a notice of each  prepayment to be made under this
Section, which shall be delivered as provided in paragraph (a) above in the case
of any  prepayment  thereunder  and otherwise by 11:00 a.m.,  New York City time
three Business Days prior to prepayment (unless the circumstances giving rise to
such  prepayment  render it impractical to provide notice at such time, in which
case such notice shall be given as promptly as practical and in any event by the
time prepayment is made). Each notice of prepayment shall specify the prepayment
date and, by Credit Facility, the principal amount of each Borrowing (or portion
thereof) to be prepaid, shall be irrevocable and shall commit the applicable





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     Borrower or Borrowers to prepay such Borrowing (or portion  thereof) by the
amount stated therein on the date stated  therein.  All  prepayments  under this
Section 2.11 shall be subject to Section 2.14 but otherwise  without  premium or
penalty. All prepayments under this Section 2.11 shall be accompanied by accrued
interest on the  principal  amount  being  prepaid to the date of  payment.  Any
prepayment required under any paragraph of this Section shall be in addition to,
and shall not be applied to reduce the amount of, any prepayment  required under
any other paragraph of this Section.

SECTION 2.12. Reserve Requirements; Change in Circumstances.

     (a)  Notwithstanding  any other provision  herein (but subject to paragraph
(e) below),  if after the date of this Agreement any change in applicable law or
regulation  or  in  the   interpretation  or   administration   thereof  by  any
governmental authority charged with the interpretation or administration thereof
(whether  or not having the force of law) shall  change the basis of taxation of
payments  to any  Lender (or any  lending  office)  or any  Issuing  Bank of the
principal of or interest on any LIBOR Loan or Alternative  Currency Loan made by
such Lender or any Fees or other amounts  payable  hereunder in respect of LIBOR
Loans or  Alternative  Currency Loans (other than changes in respect of Excluded
Taxes or Taxes), or shall impose, modify or deem applicable any reserve, special
deposit or similar  requirement  against  assets  of,  deposits  with or for the
account of or credit  extended  by such  Lender (or any  lending  office) or any
Issuing  Bank  (except,  in respect of LIBOR Loans or  Swingline  Loans that are
Alternative  Currency Loans, any such reserve  requirement which is reflected in
the  Adjusted  LIBO Rate or the  Swingline  Base Rate,  respectively),  or shall
impose on such Lender,  such Issuing Bank,  the London  interbank  market or any
other relevant market any other condition  affecting this Agreement or any LIBOR
Loan or Alternative Currency Loan made by such Lender or any Letter of Credit or
participation  therein,  and the  result  of any of the  foregoing  shall  be to
increase  the net cost to such Lender or Issuing  Bank of making or  maintaining
any LIBOR Loan or  Alternative  Currency Loan or of issuing or  maintaining  any
Letter of Credit or purchasing or  maintaining a  participation  therein,  or to
reduce the amount of any sum  received or  receivable  by such Lender or Issuing
Bank hereunder or under the Notes (whether of principal,  interest or otherwise)
by an amount deemed by such Lender or Issuing Bank to be material, then ASI will
pay (or cause the  Borrowers to pay) to such Lender or Issuing Bank, as the case
may be,  within 15 days after  receipt by ASI of a  certificate  referred  to in
paragraph (c) below,  such additional  amount or amounts as will compensate such
Lender  or  Issuing  Bank,  as the case may be,  for such  additional  net costs
incurred or reduction suffered.

     (b) Subject to  paragraph  (e) below,  if any Lender or Issuing  Bank shall
have  determined that the adoption after the date hereof of, or any change after
the date hereof in, any law,  rule,  regulation or guideline  regarding  capital
adequacy,  or  any  change  after  the  date  hereof  in the  interpretation  or
administration  of any of the foregoing by any governmental  authority,  central
bank or comparable  agency  charged with the  interpretation  or  administration
thereof,  or compliance by any Lender (or any lending  office of such Lender or,
if  applicable,  its  Affiliate)  or any Issuing Bank or any Lender's or Issuing
Bank's holding company with any request or directive  regarding capital adequacy
(whether or not having the force of law) of any such authority,  central bank or
comparable  agency,  has or would have the effect of reducing the rate of return
on such Lender's or Issuing Bank's capital or on the capital of such Lender's or
Issuing  Bank's holding  company,  if any, as a consequence of this Agreement or
the Loans made or  participations  in Letters of Credit purchased by such Lender
pursuant  hereto or the Letters of Credit  issued by such Issuing Bank  pursuant
hereto to a level below that which such Lender or Issuing Bank or such  Lender's
or Issuing  Bank's  holding  company could have achieved but for such  adoption,
change or compliance  (taking into consideration such Lender's or Issuing Bank's
policies and the policies of such  Lender's or Issuing  Bank's  holding  company
with respect to capital  adequacy) by an amount deemed by such Lender or Issuing
Bank to be  material,  then  from  time to time  ASI  shall  pay (or  cause  the
Borrowers to pay), within 15 days after receipt by ASI of a certificate referred
to in paragraph  (c) below,  to such Lender or Issuing Bank, as the case may be,
such  additional  amount or amounts as will  compensate  such  Lender or Issuing
Bank, as the case may be, or such Lender's or Issuing Bank's holding company for
any such reduction suffered.

     (c) A certificate  of a Lender or an Issuing Bank setting forth such amount
or amounts as shall be  necessary to  compensate  such Lender or Issuing Bank or
its holding company, as applicable,  as specified in paragraph (a) or (b) above,
as the case may be,  shall be delivered  to ASI and shall be  conclusive  absent
manifest error. Any such certificate shall be accompanied by a notice indicating
the  circumstances  or event that resulted in such claim for  compensation.  ASI
shall (or shall cause the





<PAGE>





responsible  Borrower to) pay to each Lender or Issuing  Bank that  delivers any
such  certificate  the amount  shown as due on such  certificate  within 15 days
after the receipt of the same by ASI.

     (d)  Failure  on the  part of any  Lender  or any  Issuing  Bank to  demand
compensation  for any  increased  costs or  reduction  in  amounts  received  or
receivable  or  reduction  in return on capital with respect to any period shall
not constitute a waiver of its right to demand compensation with respect to such
period or any other period;  provided,  however, that failure on the part of any
Lender or Issuing Bank to demand  compensation  within 180 days after the end of
its  fiscal  year  shall  constitute  a waiver of its  right to demand  any such
compensation with respect to such fiscal year; provided further,  however,  that
if any change in applicable law or in the interpretation or application  thereof
or any request or directive giving rise to any claim for compensation under this
Section is  retroactive  in effect,  then such  Lender or Issuing  Bank shall be
entitled  to claim  compensation  hereunder  for the period of such  retroactive
effect prior to and including the date of adoption or promulgation  thereof, for
purposes of the foregoing  proviso,  as though the claims for compensation  with
respect to such period of retroactive  effect arose on such date. The protection
of this Section shall be available to each Lender and Issuing Bank regardless of
any possible  contention of the invalidity or  inapplicability of the law, rule,
regulation,  guideline or other change or condition which shall have occurred or
been imposed.

     (e)  Notwithstanding any other provision of this Section 2.12, no Lender or
Issuing  Bank shall be  entitled  to  compensation  for any  increased  costs or
reduction in amounts  received or  receivable  or reduction in return on capital
under this  Section  unless  such  Lender or Issuing  Bank,  as the case may be,
represents to ASI that at the time it is the policy or general  practice of such
Lender or Issuing  Bank to demand  such  compensation  for  comparable  costs or
reductions,  if  any,  in  similar  circumstances,   if  any,  under  comparable
provisions of other credit agreements for comparable customers.

     SECTION 2.13. Change in Legality.  (a)  Notwithstanding any other provision
herein, if, after the date hereof, (i) any change in any law or regulation or in
the  interpretation  thereof  by any  Governmental  Authority  charged  with the
administration or  interpretation  thereof shall make it unlawful for any Lender
to make or maintain any LIBOR Loan or  Alternative  Currency  Loan or (ii) there
shall have occurred any change in national or international financial, political
or economic  conditions  (including  the imposition of or any change in exchange
controls) or currency  exchange rates which would make it impracticable  for any
Lender to make Loans denominated in any Alternative Currency or to any Borrower,
then, by written notice to ASI and to the Administrative Agent:

     (i) such Lender may declare that LIBOR Loans or Alternative  Currency Loans
(in the affected  currency or  currencies or to the affected  Borrower),  as the
case may be,  will not  thereafter  (for the  duration of such  unlawfulness  or
impracticability) be made by such Lender hereunder,  whereupon any request for a
LIBOR Borrowing or Alternative  Currency  Borrowing (in the affected currency or
currencies or to the affected  Borrower),  as the case may be, shall, as to such
Lender  only,  be  deemed a  request  for an ABR Loan or a Loan  denominated  in
Dollars,  as the case may be,  unless  such  declaration  shall be  subsequently
withdrawn  (or,  if a Loan to the  requesting  Borrower  cannot  be made for the
reasons  specified above,  such request shall be deemed to have been withdrawn);
and

     (ii)  such  Lender  may  require  that  all  outstanding   LIBOR  Loans  or
Alternative Currency Loans (in the affected currency or currencies), as the case
may be, made by it be converted to ABR Loans or Loans denominated in Dollars, as
the case may be, in which  event all such LIBOR  Loans or  Alternative  Currency
Loans (in the  affected  currency or  currencies),  as the case may be, shall be
automatically  converted to ABR Loans or Loans  denominated  in Dollars,  as the
case may be, as of the  effective  date of such notice as provided in  paragraph
(b) below.

     In the event any Lender shall  exercise its rights under (i) or (ii) above,
all  payments  and  prepayments  of principal  which would  otherwise  have been
applied to repay the LIBOR Loans or Alternative  Currency Loans, as the case may
be,  that would have been made by such  Lender or the  converted  LIBOR Loans or
Alternative  Currency Loans, as the case may be, of such Lender shall instead be
applied to repay the ABR Loans or Loans denominated in Dollars,  as the case may
be, made by such Lender in lieu of, or resulting  from the  conversion  of, such
LIBOR Loans or Alternative Currency Loans, as the case may be.






<PAGE>





     (b) For purposes of this Section  2.13, a notice to ASI by any Lender shall
be  effective as to each such Loan,  if lawful,  on the last day of the Interest
Period  currently  applicable to such Loan; in all other cases such notice shall
be effective on the date of receipt by ASI.

     SECTION 2.14. Indemnity.  Each Borrower shall indemnify each Lender against
any loss or  reasonable  expense  which such  Lender  may  sustain or incur as a
consequence  of (a) any  failure by such  Borrower to fulfill on the date of any
borrowing  hereunder the applicable  conditions set forth in Article IV, (b) any
failure by such Borrower to borrow or to convert or continue any Loan  hereunder
after irrevocable notice of such borrowing,  conversion or continuation has been
given or deemed to have been given  pursuant  to Section  2.03 or 2.04,  (c) any
payment,  prepayment,  assignment  pursuant to Section 2.22(a) or (b),  exchange
pursuant to Article IX or  conversion  of a LIBOR Loan or  Alternative  Currency
Loan or any portion thereof required by any other provision of this Agreement or
otherwise  made or deemed made on a date other than the last day of the Interest
Period  applicable  thereto,  (d) any  default in payment or  prepayment  of the
principal amount of any Loan or any part thereof or interest accrued thereon, as
and  when  due and  payable  (at the due  date  thereof,  whether  by  scheduled
maturity,  acceleration,  irrevocable  notice of prepayment or otherwise) or (e)
the occurrence of any Event of Default,  including,  in each such case, any loss
or  reasonable  expense  sustained or incurred or to be sustained or incurred in
liquidating  or  employing  deposits  from third  parties  acquired to effect or
maintain such Loan or any part thereof as a LIBOR Loan or  Alternative  Currency
Loan.  Such loss or  reasonable  expense  shall  include an amount  equal to the
excess,  if any, as  reasonably  determined  by such Lender,  of (i) its cost of
obtaining  the funds for the Loan  being  paid,  prepaid,  assigned,  converted,
exchanged or not  borrowed,  converted or continued  (based on the Adjusted LIBO
Rate) for the  period  from the date of such  payment,  prepayment,  assignment,
conversion,  exchange or failure to borrow,  convert or continue to the last day
of the  Interest  Period for such Loan (or,  in the case of a failure to borrow,
convert  or  continue,  the  Interest  Period  for such Loan  which  would  have
commenced  on the date of such  failure)  over (ii) the amount of  interest  (as
reasonably  determined  by such Lender) that would be realized by such Lender in
reemploying the funds so paid, prepaid,  assigned,  converted,  exchanged or not
borrowed, converted or continued for such period or Interest Period, as the case
may be. A  certificate  of any Lender  setting forth any amount or amounts which
such Lender is entitled to receive  pursuant to this  Section and  evidencing  a
loss suffered by such Lender of such amount or amounts shall be delivered to ASI
and shall be conclusive  absent  manifest  error.  ASI shall (or shall cause the
responsible  Borrower to) pay to each Lender that delivers any such  certificate
the amount shown as due on such certificate  within 15 days after the receipt of
the same by ASI.

     SECTION 2.15. Pro Rata  Treatment.  Except as required under Sections 2.13,
2.19(e) and 2.20, (a) each Borrowing and each reduction of Commitments  shall be
allocated  pro rata  among the  Lenders  in  accordance  with  their  respective
applicable  Commitments,  (b) each  payment or  prepayment  of  principal of any
Borrowing,  each payment of interest on the Loans comprising any Borrowing,  and
each payment of the Commitment  Fees in respect of any Credit  Facility shall be
allocated pro rata among the Lenders in accordance  with the respective  amounts
due and payable to the Lenders by the Borrower that shall have made such payment
and (c) each conversion or continuation of Loans included in any Borrowing shall
be  allocated  pro rata among the  Lenders  in  accordance  with the  respective
principal  amounts of their  outstanding  Loans comprising such Borrowing.  Each
Lender  agrees that in computing  such  Lender's  portion of any Borrowing to be
made hereunder,  the  Administrative  Agent may, in its  discretion,  round each
Lender's  percentage of such  Borrowing to the next higher or lower whole Dollar
(or comparable unit of any applicable Alternative Currency) amount.

     SECTION  2.16.  Sharing of Setoffs.  Each  Lender  agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
any Credit  Party,  or pursuant to a secured claim under Section 506 of Title 11
of the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency  or other  similar law or  otherwise,  or by any other means,  obtain
payment  (voluntary  or  involuntary)  in  respect  of any  Loan or Loans or L/C
Disbursement or undrawn L/C's as a result of which the unpaid principal  portion
of its Related Claims shall be  proportionately  less than the unpaid  principal
portion of the Related  Claims of any other Related  Lender,  it shall be deemed
simultaneously  to have  purchased from such other Related Lender at face value,
and shall  promptly pay to such other Related  Lender the purchase  price for, a
participation  in the Related Claims of such other Related  Lender,  so that the
aggregate unpaid principal  amount of the Related Claims and  participations  in
Related Claims held by





<PAGE>





     each Related Lender shall be in the same proportion to the aggregate unpaid
principal  amount of all Related Claims then outstanding as the principal amount
of its  Related  Claims  prior to such  exercise  of  banker's  lien,  setoff or
counterclaim  or other event was to the principal  amount of all Related  Claims
outstanding  prior to such exercise of banker's lien,  setoff or counterclaim or
other  event;  provided,  however,  that,  if any such  purchase or purchases or
adjustments  shall be made pursuant to this Section 2.16 and the payment  giving
rise  thereto  shall  thereafter  be  recovered,  such  purchase or purchases or
adjustments  shall be rescinded to the extent of such  recovery and the purchase
price or prices or adjustment restored without interest. The Borrowers expressly
consent  to the  foregoing  arrangements  and agree  that any  Lender  holding a
participation in a Loan or L/C Disbursement deemed to have been so purchased may
exercise  any and all  rights of  banker's  lien,  setoff or  counterclaim  with
respect to any and all moneys owing by the applicable Borrower to such Lender by
reason  thereof  as fully as if such  Lender  had made a Loan  directly  to such
Borrower in the amount of such participation.

     SECTION  2.17.  Payments.   (a)  Each  Borrower  shall  make  each  payment
(including  principal of, and interest on, the Loans and L/C Disbursements,  and
any Fees and other  amounts) due and payable by it hereunder and under any other
Credit  Document,  not  later  than  12:00  (noon),  local  time at the place of
payment, on the date when due, in immediately available funds. Each such payment
(other  than  (i)  Issuing  Bank  Fees,  which  shall  be paid  directly  to the
applicable  Issuing Bank and (ii) principal of and interest on Swingline  Loans,
which  shall be paid  directly  to the  Swingline  Lender  except  as  otherwise
provided in Section 2.20(e)) shall be made to such account of the Administrative
Agent as the  Administrative  Agent  shall  specify by notice to the  applicable
Borrower and, unless and until otherwise specified, all such payments payable in
Dollars  shall be made to the  Administrative  Agent at its  office  at 270 Park
Avenue,  New York,  New York.  Each such  payment  (other than  principal of and
interest on Alternative  Currency Loans and L/C Disbursements  denominated in an
Alternative  Currency,  which  shall  be  made  in  the  applicable  Alternative
Currency) shall be made in Dollars.  Any payments received by the Administrative
Agent after the specified time shall be deemed to have been received on the next
Business  Day.  The  Administrative  Agent shall  distribute  to the  applicable
Lenders  or  Issuing  Bank,  as the case may be, all  payments  received  by the
Administrative Agent for their respective  accounts,  promptly following receipt
thereof.

     (b) Whenever any payment shall become due, or otherwise  would occur,  on a
day that is not a Business Day, such payment may be made on the next  succeeding
Business  Day, and such  extension of time shall in such case be included in the
computation of interest or Fees, if applicable.

     SECTION 2.18. Taxes. (a) All payments  hereunder and under any other Credit
Document (including  payments on account of principal,  interest and Fees) shall
be made by the applicable  Borrower  without  deduction or withholding for or on
account of any present or future tax, duty,  levy,  impost,  assessment or other
governmental  charge imposed by any  jurisdiction  other than (i) Excluded Taxes
and (ii) other taxes, duties, levies, imposts, assessments or other governmental
charges  imposed by the United  States or any political  subdivision  thereof or
therein (except for withholding taxes on payments (other than Fees) with respect
to Obligations of Borrowers that are Foreign  Subsidiaries and withholding taxes
on  payments  with  respect to  Obligations  of  Borrowers  that are not Foreign
Subsidiaries acquired by a Lender as a result of the CAM Exchange),  but only to
the extent such other  taxes,  duties,  levies,  imposts,  assessments  or other
governmental  charges do not result from a change  subsequent to the date hereof
in  applicable  law,  treaty  or  regulations  or  in  the   interpretation   or
administration  thereof by any  authority  charged  with the  interpretation  or
administration  thereof or any court of competent  jurisdiction  ("Taxes").  For
purposes of this Section 2.18 and Section 2.12,  ratification  of the Convention
between the Government of the United States of America and the Government of the
French Republic signed on August 31, 1994, the Convention between the Government
of the United  States and the  Government  of Sweden signed on September 1, 1994
and the Protocol  signed on August 31, 1994 amending the Convention  between the
United States of America and the  Commonwealth of Canada which became  effective
August 16, 1984,  in each case  substantially  in the same form as it was signed
shall not be  considered  a change  after the date  hereof.  If any  Borrower is
required  by law to make any  deduction  or  withholding  of any Taxes  from any
payment  due  hereunder  or under any other  Credit  Document,  then the  amount
payable  will be  increased  to such amount  which,  after  deduction  from such
increased  amount  of  all  such  Taxes  required  to be  withheld  or  deducted
therefrom,  will be equal to the amount that would  otherwise have been received
hereunder had no such deduction or withholding been required.






<PAGE>





     (b) The  applicable  Borrower shall pay any and all present or future stamp
or  documentary  taxes,  or other excise or property  taxes,  charges or similar
levies,  which  arise from any payment  made  hereunder  or from the  execution,
delivery or registration of, or otherwise with respect to, this Agreement or any
other Credit Document excluding,  with respect to any Lender, excise or property
taxes, charges or similar levies: (i) imposed by the jurisdiction under the laws
of which such Lender is organized, or in which its principal executive office is
located,  or by any country within which any such jurisdiction is located or any
political  subdivision  thereof;  (ii) imposed by the  jurisdiction in which the
applicable lending office or branch of such Lender or any Affiliate thereof that
makes or holds a Loan is located,  or in which its principal executive office is
located,  or under the laws of which it is  organized  or by any country  within
which any such jurisdiction is located or any political  subdivision thereof; or
(iii)  imposed by any other  jurisdiction,  but only to the extent  such  taxes,
charges  or  levies  would not have been  imposed  but for any other  connection
between the  jurisdiction  imposing such tax,  charge or levy and such Lender or
such applicable  lending office or branch or Affiliate  (other than a connection
arising from this Agreement or any  transaction  contemplated  thereby)  ("Other
Taxes").

     (c) If any Borrower  makes any payment  hereunder in respect of which it is
required  by law to make any  deduction  or  withholding  of any  Taxes or Other
Taxes,  it shall pay the full amount to be deducted or withheld to the  relevant
taxation  or other  authority  within the time  allowed for such  payment  under
applicable  law  and  shall  deliver  to  the  applicable  Lenders  as  soon  as
practicable  (but,  in no  event,  later  than 30 days)  after it has made  such
payment to the  applicable  authority a receipt  issued by such  authority  or a
statement  of the  Borrower  confirming  the  payment to such  authority  of all
amounts so required to be deducted or withheld from such payment.

     (d) Without  prejudice to the  provisions  of paragraph  (a) above,  if any
Lender,  or the  Administrative  Agent on its  behalf,  is  required to make any
payment on account of Taxes or Other Taxes on or in relation to any sum received
or receivable  hereunder or under any other Credit  Document by such Lender,  or
the  Administrative  Agent on its behalf,  or any  liability  for Taxes or Other
Taxes in respect of any such payment is imposed,  levied or assessed against any
Lender or the  Administrative  Agent on its behalf  (regardless  of whether such
Taxes or Other Taxes were correctly or legally asserted by the relevant taxation
or other authority),  the applicable  Borrower will, within 30 days after demand
therefor, indemnify such person against such tax payment or liability,  together
with any interest, penalties and expenses (including reasonable counsel fees and
expenses)  payable or incurred in  connection  therewith,  including  any Tax or
Other Tax of any Lender  arising by virtue of payments under this paragraph (d),
computed in a manner  consistent  with  paragraph (a) above. A certificate as to
the amount of such payment by such Lender,  or the  Administrative  Agent on its
behalf,  absent manifest error,  shall be final,  conclusive and binding for all
purposes.

     (e) (i) Each Lender that is  organized  under the laws of any  jurisdiction
other than the United  States or any State  thereof  (including  the District of
Columbia)  and that will be  receiving  payments  from ASI or American  Standard
Credit  Inc.  under  the  Credit  Documents  agrees  to  furnish  to ASI and the
Administrative  Agent, prior to the Effective Date (or, if such Lender becomes a
Lender  after  the  Effective  Date,  then at or prior to the time  such  Lender
becomes a Lender), two copies of either U.S. Internal Revenue Service Form 4224,
U.S.  Internal Revenue Service Form 1001 or any successor forms thereto (wherein
such Lender claims  entitlement  to complete  exemption  from or reduced rate of
U.S.  federal  withholding  tax on payments by ASI or American  Standard  Credit
Inc.,  as  the  case  may  be,  under  the  Credit  Documents)  as  well  as any
certification,  documentation  or other  evidence as may be required by the U.S.
Internal  Revenue  Service to  establish  the legal  entitlement  of a Lender to
complete  exemption  from or reduced  rate of U.S.  federal  withholding  tax on
payments by ASI or American  Standard  Credit Inc., as the case may be under the
Credit  Documents  ("Required  Documentation")  and to  provide  to ASI  and the
Administrative  Agent a new Form 4224,  Form 1001 or any successor forms thereto
and any Required  Documentation  if any  previously  delivered  form or Required
Documentation  is found to be incomplete or incorrect in any material respect or
upon  the   obsolescence   of  any   previously   delivered   form  or  Required
Documentation.  In the case of any such Lender  exempt from  withholding  tax on
interest  payments  under the Credit  Documents  pursuant  to Section  871(h) or
881(c) of the Code, such Lender may provide U.S.  Internal  Revenue Service Form
W-8 or any  successor  form thereto  (instead of Form 1001) with respect to such
interest payments as well as any Required  Documentation and agrees to provide a
new Form W-8 or any successor form thereto and any Required Documentation if any
previously delivered form or Required Documentation is found to be incomplete or
incorrect in any material respect or upon the obsolescence of





<PAGE>





any previously delivered form or Required Documentation. A Lender providing Form
1001 or Form W-8 or any successor form thereto with respect to interest payments
agrees to furnish a separate Form 1001 or a successor  form thereto with respect
to fees and other payments under the Credit Documents.

     (ii) Each Lender that is managed and controlled from or incorporated  under
the laws of any jurisdiction other than the United Kingdom and which is making a
Loan to the U.K.  Borrower  through a lending  branch or lending  office located
outside  the United  Kingdom  agrees to furnish to the taxing  authority  of the
country in which such  Lender is  resident  for tax  purposes on or prior to the
Effective  Date (or, if such Lender  becomes a Lender after the Effective  Date,
then at or prior to the time such Lender  becomes a Lender)  (with a copy to the
Administrative Agent and the U.K. Borrower), for certification and forwarding by
such taxing authority to the appropriate  United Kingdom taxing  authority,  two
copies  of Form  "Claim on Behalf of a United  States  Domestic  Corporation  to
Relief from United Kingdom  Income Tax on Interest and Royalties  Arising in the
United  Kingdom" (or its  counterpart  for  jurisdictions  other than the United
States),  or any successor  forms  (wherein such Lender  claims  entitlement  to
complete  exemption  from or reduced rate of United Kingdom  withholding  tax on
interest paid by such Borrower hereunder) and to provide successor forms thereto
if any  previously  delivered form is found to be incomplete or incorrect in any
material respect or upon the obsolescence of any previously delivered form. Each
Lender that is managed and controlled  from and  incorporated  under the laws of
the  United  Kingdom  or that is making  all of its  Loans to the U.K.  Borrower
through a lending  branch or lending  office within the United Kingdom agrees to
furnish to each of the U.K. Borrower and the Administrative Agent on or prior to
the Effective Date (or if such Lender becomes a Lender after the Effective Date,
then at or prior  to the time  such  Lender  becomes  a  Lender)  a  certificate
substantially  in the  form  of  Exhibit  H (and  if  any  previously  delivered
certificate  subsequently should become untrue,  promptly (A) to notify the U.K.
Borrower and the Administrative Agent of the change and (B) to furnish the forms
described  in the  first  sentence  of  this  Section  2.18(e)(ii).  As  soon as
practicable  after the Effective  Date,  and from time to time as  circumstances
change,  ASI shall  furnish the  Administrative  Agent with a list of  Borrowers
resident for United Kingdom tax purposes within the United Kingdom.  In the case
of any Lender that makes a Loan denominated in a currency other than Sterling to
the U.K.  Borrower and with  respect to such Loan  qualifies  for the  exemption
under Section  349(3)(a) Income and Corporation  Taxes Act 1988 from withholding
tax on interest payable in the United Kingdom on an advance from a bank carrying
on a bona fide banking  business in the United  Kingdom,  that Lender  agrees to
take into account as a United Kingdom  trading receipt the interest due to it on
such Loan.

     (iii) Upon the written  request of any Borrower,  each Lender promptly will
provide  to such  Borrower  and to the  Administrative  Agent,  or file with the
relevant taxing authority (with a copy to the  Administrative  Agent) such form,
certification  or similar  documentation  (each  duly  completed,  accurate  and
signed)  as is  required  by the  relevant  jurisdiction  in order to  obtain an
exemption  from, or reduced rate of Taxes or Other Taxes to which such Lender or
the Administrative Agent is entitled pursuant to an applicable tax treaty or the
law of the relevant  jurisdiction;  provided,  however,  such Lender will not be
required to (i) disclose  information which in its reasonable  judgment it deems
confidential  or proprietary or (ii) incur a disadvantage  if such  disadvantage
would, in its reasonable  judgment,  be substantial in comparison to the cost of
the Borrower  under this Section 2.18 of such  Lender's  failure to provide such
form, certification or similar documentation.

     (iv) A Lender shall be required to furnish a form under this  paragraph (e)
only  if it is  entitled  to  claim  an  exemption  from  or a  reduced  rate of
withholding  under  applicable  law. A Lender  that is not  entitled to claim an
exemption from or a reduced rate of withholding  under applicable law,  promptly
upon written request of the applicable Borrower,  shall so inform the applicable
Borrower in writing.

     (f) The  Borrowers  shall not be  required to pay any  increased  amount on
account of Taxes or Other Taxes pursuant to this Section 2.18 or Section 2.12(a)
to any Lender or to the  Administrative  Agent to the extent such Taxes or Other
Taxes  would not have been  payable but for the failure of the Lender to furnish
the forms in accordance with paragraph (e) (accurately completed in all material
respects).

     (g) If a Lender  shall  become  aware that it is  eligible  for a refund in
respect of Taxes or Other  Taxes  actually  paid by a Borrower  pursuant to this
Section 2.18, it shall promptly notify the





<PAGE>





applicable Borrower of the availability of such refund and shall, within 30 days
after  receipt of a request  by such  Borrower,  apply for such  refund or shall
furnish to such  Borrower  such  forms,  duly  completed,  as will  enable  such
Borrower to claim such refund on its own behalf.  Such Borrower shall  reimburse
such  Lender for all  reasonable  costs  incurred  by the  applicable  Lender in
applying for or seeking such refund.  If any Lender receives a refund in respect
of any Taxes or Other Taxes paid by a Borrower pursuant to this Section 2.18, it
shall repay such refund within 30 days after receipt, to the applicable Borrower
(to the extent of amounts  not in excess of the  amounts  actually  paid by such
Borrower and not  previously  reimbursed  in respect of the Taxes or Other Taxes
giving rise to such refund),  net of all  reasonable  out-of-pocket  expenses of
such Lender not previously  reimbursed and without interest (other than interest
received  from the  relevant  taxing  authority  with  respect to such  refund);
provided,  however, that such Borrower, upon the request of the relevant Lender,
agrees to return to such Lender the amount paid to it by the  applicable  Lender
with  respect to such  refund  (plus  applicable  penalties,  interest  or other
charges) in the event such Lender is required to repay such refund. In addition,
the Agent and each Lender shall reasonably cooperate with any Borrower,  at such
Borrower's expense, in contesting any Taxes or Other Taxes that such Borrower is
required to bear under this Section 2.18 or under  Section 2.12 and shall pay to
such Borrower,  on a net after-tax  basis,  any refunds  obtained as a result of
such contest, together with any interest thereon, within 30 days after receipt.

     (h) Nothing contained in this Section 2.18 shall require any Lender to make
available any of its tax returns (or any other information relating to its taxes
which it deems to be confidential).

     (i) (i) Without prejudice to the survival of any other agreement  contained
herein,  the  agreements  and  obligations  contained in this Section 2.18 shall
survive the payment in full of the  principal  of and interest on all Loans made
hereunder,  and the  payment in full of all other  amounts due to the Lenders or
the Administrative Agent under this Agreement or any other Credit Document.

     (ii) For  purposes of this Section  2.18, a "Lender"  shall also include an
Issuing Bank, the Administrative Agent, the Collateral Agent, subject to Section
10.04(j) and the last  sentence of Section  10.04(c),  any Affiliate of a Lender
that makes or holds a Loan and, subject to Section 10.04(f)(iii),  the holder of
a participation in a Loan.

     (j)  Notwithstanding  any other  provisions of this Section 2.18, no Lender
shall be  entitled  to  compensation  for any Other  Taxes  (except for stamp or
documentary  taxes or similar levies) unless such Lender  represents to ASI that
at the time it is the policy or general  practice  of such Lender to demand such
compensation  for comparable Other Taxes, if any, in similar  circumstances,  if
any,  under  comparable  provisions of other credit  agreements  for  comparable
customers.

     SECTION 2.19. Letters of Credit. (a) General.  Any Borrower may request the
issuance  of a  Letter  of  Credit,  in a  form  reasonably  acceptable  to  the
Administrative Agent and the applicable Issuing Bank,  appropriately  completed,
for the  account of such  Borrower,  at any time and from time to time while the
U.S.  $  Revolving  Credit   Commitments  or  Multi-Currency   Revolving  Credit
Commitments,  as the case may be,  remain in effect.  This Section  shall not be
construed to impose an  obligation  upon any Issuing Bank to issue any Letter of
Credit that is  inconsistent  with the terms and  conditions of its Issuing Bank
Agreement.  On the  Effective  Date,  the  Scheduled  Letters of Credit shall be
deemed to have been issued on such date under the respective  Credit  Facilities
set  forth  in  Schedule  2.19  for all  purposes  hereof,  notwithstanding  the
requirements of the following paragraphs of this Section.

(b) Notice of Issuance;  Certain Conditions. In order to request the issuance of
a Letter of Credit, a Borrower shall hand deliver or telecopy to an Issuing Bank
and the  Administrative  Agent  (reasonably  in advance of the requested date of
issuance) a notice  specifying  the name of the Borrower for whose  account such
Letter of Credit is to be issued (the  "Account  Party"),  the date of issuance,
the date on which such Letter of Credit is to expire  (which  shall  comply with
paragraph (c) below),  whether such Letter of Credit is to be a U.S. $ Letter of
Credit or a Multi-Currency Letter of Credit, the amount of such Letter of Credit
and, in the case of a Multi-Currency  Letter of Credit, the currency in which it
is to be denominated,  the name and address of the beneficiary  thereof and such
other  information  as shall be  necessary  to  prepare  such  Letter of Credit.
Following  receipt of such  notice and prior to the  issuance  of the  requested
Letter of Credit, the  Administrative  Agent shall notify ASI, the Account Party
and the applicable  Issuing Bank of the amount of the Aggregate U.S. $ Revolving
Credit Exposure and the





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Aggregate  Multi-Currency  Revolving  Credit Exposure after giving effect to (i)
the issuance of such Letter of Credit,  (ii) the issuance or  expiration  of any
other  Letter  of  Credit  that is to be  issued  or will  expire  prior  to the
requested  date of issuance of such Letter of Credit and (iii) the  borrowing or
repayment of any U.S. $ Revolving Credit Loans,  Multi-Currency Revolving Credit
Loans  or   Swingline   Loans  that  (based  upon   notices   delivered  to  the
Administrative Agent by the Borrowers) are to be borrowed or repaid prior to the
requested date of issuance of such Letter of Credit. Promptly after the issuance
of or amendment to any Letter of Credit, the  Administrative  Agent shall notify
Lenders with the  relevant  Commitments  of such  issuance or  amendment,  shall
provide a copy of the issued Letter of Credit or amendment,  as the case may be,
and in the case of  Multi-Currency  Letters of Credit,  shall  indicate the Spot
Exchange Rate to be used in determining  the Assigned  Dollar Value  thereof.  A
Letter of Credit  shall be issued  only if, and upon  issuance of each Letter of
Credit the Account  Party in respect  thereof  shall be deemed to represent  and
warrant  that,  after  giving  effect to such  issuance  (A) the  Aggregate  L/C
Exposure  shall not exceed  $200,000,000,  (B) the Aggregate U.S. $ L/C Exposure
shall not exceed  $200,000,000,  (C) the Aggregate  Multi-Currency  L/C Exposure
shall not exceed $25,000,000, (D) the Aggregate U.S. $ Revolving Credit Exposure
shall not  exceed  the Total  U.S. $  Revolving  Credit  Commitment  and (E) the
Aggregate  Multi- Currency  Revolving Credit Exposure shall not exceed the Total
Multi-Currency Revolving Credit Commitment.

     (c)  Expiration  Date.  Each Letter of Credit  shall expire at the close of
business on the  earlier of the date one year after the date of the  issuance of
such Letter of Credit and the date that is five  Business Days prior to the U.S.
$ Revolving Credit Maturity Date or the Multi-Currency Revolving Credit Maturity
Date,  as  applicable,  unless such Letter of Credit  expires by its terms on an
earlier  date;  provided  that a Letter of Credit shall not be issued that would
result in the Aggregate U.S. $ L/C Exposure exceeding the Total U.S. $ Revolving
Credit  Commitment or the Aggregate  Multi-Currency  L/C Exposure  exceeding the
Total Multi-Currency Revolving Credit Commitment.  Compliance with the foregoing
proviso shall be determined based upon the assumption that each Letter of Credit
remains  outstanding  and  undrawn  in  accordance  with  its  terms  until  its
expiration  date (taking into account any rights of renewal or extension that do
not require written notice by or consent of the applicable  Issuing Bank, in its
sole discretion, in order to effect such renewal or extension).

     (d)  Participations.  By the issuance of a Letter of Credit  (including the
issuance of the  Scheduled  Letters of Credit  deemed to occur on the  Effective
Date) and without any further action on the part of the applicable  Issuing Bank
or the U.S. $ Revolving  Credit Lenders or the  Multi-Currency  Revolving Credit
Lenders, as applicable, the applicable Issuing Bank hereby grants to each U.S. $
Revolving  Credit  Lender  or   Multi-Currency   Revolving  Credit  Lender,   as
applicable,  and each U.S. $ Revolving Credit Lender or Multi-Currency Revolving
Credit Lender, as applicable,  hereby acquires from the applicable Issuing Bank,
a participation  in such Letter of Credit equal to such U.S. $ Revolving  Credit
Lender's or Multi-Currency  Revolving Credit Lender's  Applicable  Percentage of
the  aggregate  amount  available  to be drawn  under  such  Letter  of  Credit,
effective upon the issuance of such Letter of Credit.  In  consideration  and in
furtherance  of  the  foregoing,   each  U.S.  $  Revolving   Credit  Lender  or
Multi-Currency  Revolving  Credit Lender hereby  absolutely and  unconditionally
agrees to pay to the  Administrative  Agent,  for the account of the  applicable
Issuing Bank, such U.S. $ Revolving Credit Lender's or Multi-Currency  Revolving
Credit  Lender's  Applicable  Percentage of each L/C  Disbursement  made by such
Issuing Bank and not  reimbursed  by the  applicable  Account  Party (or another
Credit  Party  pursuant  to its  obligations  under any other  Credit  Document)
forthwith  on the date due as  provided  in  paragraph  (e)  below.  Each U.S. $
Revolving Credit Lender and Multi-Currency  Revolving Credit Lender acknowledges
and agrees  that its  obligation  to  acquire  participations  pursuant  to this
paragraph  in respect of Letters of Credit is  absolute  and  unconditional  and
shall not be affected by any circumstance  whatsoever,  including the occurrence
and continuance of a Default or an Event of Default,  and that each such payment
shall  be  made  without  any  offset,   abatement,   withholding  or  reduction
whatsoever.

     (e)  Reimbursement.  If an Issuing Bank shall make any L/C  Disbursement in
respect of a Letter of Credit,  the  applicable  Account  Party shall pay to the
Administrative  Agent,  on or prior to the date that is five Business Days after
the date of such L/C Disbursement,  an amount equal to such L/C Disbursement. If
such Account  Party shall fail to pay any amount  required to be paid under this
paragraph on or prior to the date that is five  Business  Days after the date on
which an L/C  Disbursement  is made,  then (i) such  unpaid  amount  shall  bear
interest,  for each day from and  including  the date that is five Business Days
after the date of such L/C  Disbursement,  to but excluding the date of payment,
at a rate





<PAGE>





per annum equal to the interest rate  applicable  to overdue  Loans  pursuant to
Section 2.08, (ii) the Administrative  Agent shall notify the applicable Issuing
Bank and the U.S. $ Revolving  Credit  Lenders or the  Multi-Currency  Revolving
Credit Lenders,  as the case may be, thereof,  (iii) each such Revolving  Credit
Lender  shall  comply  with its  obligation  under  paragraph  (d) above by wire
transfer  of  immediately  available  funds,  in the same  manner as provided in
Section  2.02(c) with respect to Loans made by such Lender (and Section  2.02(d)
shall apply,  mutatis  mutandis,  to the payment  obligations  of the  Revolving
Credit  Lenders),  and (iv) the  Administrative  Agent shall promptly pay to the
applicable Issuing Bank amounts so received by it from the applicable  Revolving
Credit Lenders.  The  Administrative  Agent shall promptly pay to the applicable
Issuing Bank any amounts  received by it from any Account Party pursuant to this
paragraph  prior to the time that any Revolving  Credit Lender makes any payment
pursuant to paragraph (d) above; any such amounts received by the Administrative
Agent thereafter shall be promptly remitted by the  Administrative  Agent to the
Revolving  Credit  Lenders  that  shall  have  made  such  payments  and  to the
applicable Issuing Bank, as their interests may appear.

     (f) Obligations Absolute. Each Account Party's obligations to reimburse L/C
Disbursements   as  provided  in   paragraph   (e)  above  shall  be   absolute,
unconditional  and  irrevocable,  and shall be performed  strictly in accordance
with the terms of this Agreement,  under any and all  circumstances  whatsoever,
and irrespective of:

     (i) any lack of validity or  enforceability  of any Letter of Credit or any
Credit Document, or any term or provision therein;

     (ii) any amendment or waiver of or any consent to departure from all or any
of the provisions of any Letter of Credit or any Credit Document;

     (iii) the existence of any claim,  setoff,  defense or other right that the
applicable  Account  Party,  any other Credit  Party,  any  Subsidiary  or other
Affiliate  thereof  or any  other  person  may  at any  time  have  against  the
beneficiary  under any Letter of Credit,  any Issuing Bank,  the  Administrative
Agent or any  Lender  or any  other  person,  whether  in  connection  with this
Agreement, any other Credit Document or any other related or unrelated agreement
or transaction;

     (iv) any draft or other document presented under a Letter of Credit proving
to be  forged,  fraudulent,  invalid  or  insufficient  in  any  respect  or any
statement therein being untrue or inaccurate in any respect;

     (v) payment by the applicable Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the terms of
such Letter of Credit; and

     (vi) any other act or  omission  to act or delay of any kind of any Issuing
Bank,  the Lenders,  the  Administrative  Agent or any other person or any other
event  or  circumstance  whatsoever,  whether  or  not  similar  to  any  of the
foregoing,  that might,  but for the  provisions of this  Section,  constitute a
legal or equitable discharge of such Account Party's obligations hereunder.

     (g) Disbursement  Procedures.  The applicable Issuing Bank shall,  promptly
following its receipt thereof,  examine all documents  purporting to represent a
demand for payment under a Letter of Credit. Such Issuing Bank shall as promptly
as  possible  give  telephonic  notification,  confirmed  by  telecopy,  to  the
Administrative Agent and the applicable Account Party of such demand for payment
and  whether  such  Issuing  Bank  has  made  or will  make an L/C  Disbursement
thereunder;  provided  that any  failure to give or delay in giving  such notice
shall not relieve such Account Party of its obligation to reimburse such Issuing
Bank and the Revolving Credit Lenders with respect to any such L/C Disbursement.
The Administrative Agent shall promptly give each U.S. $ Revolving Credit Lender
or Multi-Currency Revolving Credit Lender, as applicable, notice thereof.

     (h) Interim Interest. If an Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit,  then, unless the applicable  Account Party shall
reimburse such L/C  Disbursement in full on such date, the unpaid amount thereof
shall bear interest for the account of such Issuing Bank, for





<PAGE>





each day from and including the date of such L/C Disbursement,  to but excluding
the earlier of the date of payment or the date on which  interest shall commence
to accrue thereon as provided in paragraph (e) above, at the rate per annum that
would apply to such amount if such amount were a Swingline Loan and such Issuing
Bank were the Swingline  Lender. If such amount is denominated in an Alternative
Currency,  then the  Swingline  Margin shall be  determined by such Issuing Bank
pursuant to its Issuing Bank Agreement.

     (i)  Liability  of  Issuing  Banks.  Without  limiting  the  generality  of
paragraph (f) above, it is expressly understood and agreed that the absolute and
unconditional  obligation  of each Account  Party  hereunder  to  reimburse  L/C
Disbursements  will not be excused by the gross negligence or wilful  misconduct
of any Issuing Bank. However, the foregoing shall not be construed to excuse any
Issuing  Bank from  liability  to an  Account  Party to the extent of any direct
damages (as  opposed to  consequential  damages,  claims in respect of which are
hereby waived by the Account Parties to the extent  permitted by applicable law)
suffered by such  Account  Party that are caused by such  Issuing  Bank's  gross
negligence  or  wilful  misconduct  in  determining  whether  drafts  and  other
documents  presented under a Letter of Credit comply with the terms thereof;  it
is understood  that each Issuing Bank may accept  documents that appear on their
face  to  be  in  order,  without   responsibility  for  further  investigation,
regardless  of any notice or  information  to the  contrary  and,  in making any
payment under any Letter of Credit (i) an Issuing Bank's  exclusive  reliance on
the  documents  presented  to it under  such  Letter of Credit as to any and all
matters  set  forth  therein,  including  reliance  on the  amount  of any draft
presented  under  such  Letter of  Credit,  whether or not the amount due to the
beneficiary  thereunder  equals the amount of such draft and  whether or not any
document  presented  pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other  statement  or any other  document  presented  pursuant to such
Letter of Credit proves to be forged or invalid or any statement  therein proves
to be inaccurate or untrue in any respect  whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall,  in each case, be deemed not to constitute  wilful
misconduct or gross negligence of an Issuing Bank.

     SECTION 2.20.  Swingline  Loans.  (a) Swingline  Commitment.  The Swingline
Lender  agrees to make loans to the  Borrowers at any time and from time to time
on and after the  Effective  Date and until the  earlier  of the  Multi-Currency
Revolving  Credit Maturity Date and the termination of the Swingline  Commitment
in accordance  with the terms hereof,  in an aggregate  principal  amount at any
time  outstanding that will not result in (i) the Swingline  Exposure  exceeding
the  Swingline   Commitment,   (ii)  the  portion  of  the  Swingline   Exposure
attributable  to  Swingline  Loans made to  Borrowers  other than ASI  exceeding
$25,000,000,  or (iii) the Aggregate  Multi-Currency  Revolving Credit Exposure,
after giving effect to any Swingline  Loan,  exceeding the Total  Multi-Currency
Revolving  Credit  Commitment.  The  Swingline  Commitment  may be terminated or
reduced from time to time as provided herein.  Within the foregoing limits,  the
Borrowers may borrow, pay or prepay and reborrow  Swingline Loans hereunder,  on
and after the Effective Date and prior to the  Multi-Currency  Revolving  Credit
Maturity  Date,  subject  to the terms,  conditions  and  limitations  set forth
herein.

     (b) Swingline  Loans.  The procedures  for requesting and making  Swingline
Loans  and the  currency  or  currencies  in  which  any  Swingline  Loan may be
denominated and any limitations as to minimum principal amount of borrowings are
specified in the  Swingline  Loan  Agreement;  provided,  however,  that (i) any
Borrower that requests a Swingline  Loan shall,  at or prior to the time of such
request, notify the Administrative Agent by telecopy, or by telephone (confirmed
by telecopy),  and such Swingline  Loan shall not be made if the  Administrative
Agent advises the applicable  Borrower that the conditions  specified in clauses
(i), (ii) or (iii) of paragraph  (a) above would not be satisfied,  and (ii) all
Swingline Loans shall be made on the terms specified in this Section 2.20, which
shall supersede any contrary provisions in the Swingline Loan Agreement.

     (c)  Denomination,  Maturity and  Prepayment.  Each Swingline Loan shall be
denominated in Dollars or, subject to Section 2.13, in an Alternative  Currency.
Each of the Borrowers  agrees to pay the  outstanding  principal  amount of each
Swingline  Loan on the last day of the  Interest  Period  with  respect  to such
Swingline  Loan. The Borrowers shall have the right at any time and from time to
time to prepay any Swingline  Loan, in whole or in part,  upon giving written or
telecopy  notice  (or  notice by  telephone  promptly  confirmed  by  written or
telecopy notice) to the Swingline Lender and to the Administrative  Agent before
12:00 (noon), local time on the date of prepayment at the addresses for





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notices  specified in the Swingline Loan  Agreement.  All principal  payments of
Swingline Loans shall be accompanied by accrued interest on the principal amount
being repaid to the date of payment.  Each Borrower shall, at the request of the
Swingline  Lender,  duly  execute and  deliver to such Lender a Swingline  Note,
dated the Effective Date, in  substantially  the form attached hereto as Exhibit
B-5, with the blanks appropriately filled, payable to the order of the Swingline
Lender (or, if the Swingline  Lender shall so request,  to the Swingline  Lender
and registered assigns).

     (d) Interest.  Each Swingline  Loan  denominated in Dollars shall be an ABR
Loan and,  subject to the  provisions  of Section  2.08,  shall bear interest as
provided in Section  2.07(b).  Subject to the  provisions of Section 2.08,  each
Swingline  Loan  that  is an  Alternative  Currency  Loan  shall  bear  interest
(computed  on the basis of the actual  number of days elapsed over a year of 360
days) at a rate per annum equal to the Swingline  Base Rate with respect to such
Swingline Loan plus the applicable Swingline Margin.  Interest on each Swingline
Loan shall be payable on the Interest  Payment Date with  respect  thereto.  The
Swingline  Lender shall notify the  applicable  Borrower and the  Administrative
Agent of the Swingline  Base Rate and Swingline  Margin  applicable to Swingline
Lender's Swingline Loans that are Alternative  Currency Loans promptly following
each determination thereof.

     (e) Participations.  If a Borrower does not fully repay a Swingline Loan on
the last day of the Interest Period with respect  thereto,  the Swingline Lender
shall  promptly  notify the  Administrative  Agent  thereof  (by  telecopy or by
telephone,  confirmed in writing),  and the Administrative  Agent shall promptly
notify each  Multi-Currency  Revolving  Credit Lender thereof (by telecopy or by
telephone,  confirmed  in  writing)  and of its  Applicable  Percentage  of such
Swingline Loan.  Upon such notice but without any further action,  the Swingline
Lender hereby agrees to grant to each  Multi-Currency  Revolving  Credit Lender,
and each  Multi-Currency  Revolving  Credit Lender hereby agrees to acquire from
the Swingline Lender, a participation in such defaulted  Swingline Loan equal to
such  Multi-Currency  Revolving  Credit  Lender's  Applicable  Percentage of the
aggregate  principal  amount of such defaulted  Swingline Loan. In consideration
and in furtherance of the foregoing, each Multi-Currency Revolving Credit Lender
hereby absolutely and unconditionally agrees, upon receipt of notice as provided
above,  to pay to the  Administrative  Agent,  for the account of the  Swingline
Lender, such Multi-Currency  Revolving Credit Lender's Applicable  Percentage of
each  Swingline  Loan that is not repaid on the last day of the Interest  Period
with respect  thereto,  in the same currency in which such Loan is  denominated.
Each  Multi-Currency  Revolving  Credit Lender  acknowledges and agrees that its
obligation  to  acquire  participations  in  Swingline  Loans  pursuant  to this
paragraph  is  absolute  and  unconditional  and  shall not be  affected  by any
circumstance  whatsoever,  including the occurrence and continuance of a Default
or an Event of Default,  and that each such  payment  shall be made  without any
offset,  abatement,  withholding or reduction  whatsoever.  Each  Multi-Currency
Revolving Credit Lender shall comply with its obligation under this paragraph by
wire transfer of immediately  available funds, in the same manner as provided in
Section  2.02(c) with respect to Loans made by such Lender (and Section  2.02(d)
shall apply, mutatis mutandis,  to the payment obligations of the Multi-Currency
Revolving Credit Lenders) and the Administrative Agent shall promptly pay to the
Swingline  Lender  amounts so received by it from the  Multi-Currency  Revolving
Credit Lenders.  The Administrative  Agent shall notify the applicable  Borrower
and ASI of any  participations  in any Swingline Loan acquired  pursuant to this
paragraph and  thereafter  payments in respect of such  Swingline  Loan shall be
made to the  Administrative  Agent and not to the  Swingline  Lender for ratable
distribution  to the Lenders  participating  in such Swingline Loan. Any amounts
received by the  Swingline  Lender from a Borrower  (or other  Credit  Party) in
respect  of a  Swingline  Loan  after  receipt  by the  Swingline  Lender of the
proceeds of a sale of  participations  therein shall be promptly remitted to the
Administrative  Agent;  any such amounts  received by the  Administrative  Agent
shall be promptly  remitted by the  Administrative  Agent to the  Multi-Currency
Revolving  Credit Lenders that shall have made their  payments  pursuant to this
paragraph  and to the  Swingline  Lender,  as their  interests  may appear.  The
purchase of  participations in a Swingline Loan pursuant to this paragraph shall
not  relieve  the  applicable  Borrower of its default in respect of the payment
thereof.

     (f)  Termination  and Reduction of Swingline  Commitments.  Upon written or
telecopy notice to the Swingline Lender and to the Administrative Agent, ASI (on
behalf of any Borrower or Borrowers) may at any time permanently  terminate,  or
from  time to time  in part  permanently  reduce,  the  unused  portions  of the
Swingline Commitment.






<PAGE>





     SECTION  2.21.  Borrower  Assignment of Term Loans.  It is understood  that
Borrowers in respect of Term  Borrowings  may desire from time to time to assign
their  obligations  in respect of Term  Borrowings to other  Borrowers that will
assume  such  obligations,  pursuant  to an  assignment  that will result in the
assigning Borrower being relieved of its obligations as a Borrower in respect of
the  Borrowings  so  assigned  (but  not  any  obligations  in  respect  of such
Borrowings that arise under other Credit Documents in such assigning  Borrower's
capacity as a Guarantor or otherwise).  The Lenders in respect of the Term Loans
agree to permit  such  assignments,  subject  to the prior  satisfaction  of the
following conditions in respect of each such assignment:

     (a) each such assignment shall be made pursuant to documentation reasonably
satisfactory in form and substance to the Administrative Agent;

     (b) such  assignments  shall be  permitted  only  during a Periodic  Access
Availability  Period and all such  assignments  made  within a  Periodic  Access
Availability Period shall be consummated on a single date;

     (c) each party to which an assignment is made shall be a Borrower, and each
Borrower to which an  assignment  is made shall  evidence its  assumption of the
Borrowings  assigned to it by execution  of and  delivery to the  Administrative
Agent of an instrument acknowledging its assumption of the assigned Term Loan of
such Lender in writing;

     (d) each such  assignment  shall be  considered,  for all  purposes of this
Agreement,  to be a Term  Borrowing by the Borrower to which the  assignment  is
made,  and  accordingly  such  assignment  shall be subject to all the terms and
conditions  hereof  applicable  to a  Borrowing  to be made on the  date of such
assignment; and

     (e) the Administrative  Agent may, in its sole discretion,  require,  as an
additional  condition to any such  assignment,  the delivery of certificates and
legal  opinions  as to the  assignment  and the  assignee  comparable  to  those
required to be  delivered  as a  condition  to the Term  Borrowings  made on the
Effective Date, including a letter from the management of ASI as to the solvency
of the assignee after giving effect to such assignment.

     SECTION 2.22. Certain Lender  Obligations.  (a) In the event (i) any Lender
delivers a certificate  requesting  compensation  pursuant to Section 2.12, (ii)
any Lender  delivers a notice  described  in Section 2.13 or (iii) a Borrower is
required  to pay  any  additional  amount  to any  Lender,  or any  Governmental
Authority on account of any Lender,  pursuant to Section  2.18,  ASI may, at its
sole expense and effort,  require  such Lender to transfer  and assign,  without
recourse (in accordance  with Section 10.04),  all of its interests,  rights and
obligations under this Agreement to an assignee which shall assume such assigned
obligations  (which  assignee may be another  Lender,  if a Lender  accepts such
assignment);  provided that (A) such assignment shall not conflict with any law,
rule or regulation or order of any court or other Governmental  Authority having
jurisdiction,   (B)  ASI  shall  have  received  the  written   consent  of  the
Administrative Agent (and of the Issuing Banks and the Swingline Lender, if such
Lender is a Revolving  Credit Lender),  which consent shall not  unreasonably be
withheld,  and (C) ASI or the  applicable  Borrower or such assignee  shall have
paid to the assigning  Lender in immediately  available funds an amount equal to
the sum of the principal of and interest  accrued to the date of such payment on
the outstanding  Loans and  participations  in L/C  Disbursements  and Swingline
Loans of such Lender, plus all Fees and other amounts accrued for the account of
such Lender  hereunder  (including any amounts under Section 2.12,  Section 2.14
and Section  2.18);  provided  further  that if prior to any such  transfer  and
assignment the  circumstances  or event that resulted in such Lender's claim for
compensation under Section 2.12 or notice under Section 2.13 or the amounts paid
pursuant  to Section  2.18,  as the case may be,  cease to cause such  Lender to
suffer  increased  costs or  reductions  in amounts  received or  receivable  or
reduction in return on capital,  or cease to have the consequences  specified in
Section 2.13, or cease to result in amounts being payable under Section 2.18, as
the case  may be  (including  as a result  of any  action  taken by such  Lender
pursuant to  paragraph  (b) below),  or if such Lender  shall waive its right to
claim further  compensation  under Section 2.12 in respect of such circumstances
or event or shall  withdraw  its notice  under  Section  2.13 or shall waive its
right to further payments under Section 2.18 in respect of such circumstances or
event,  as the case may be, then such Lender shall not thereafter be required to
make any such transfer and assignment hereunder.





<PAGE>






     (b) If (i) any Lender shall request  compensation  under Section 2.12, (ii)
any Lender  delivers a notice  described  in Section 2.13 or (iii) a Borrower is
required  to pay  any  additional  amount  to any  Lender,  or any  Governmental
Authority  on account of any Lender,  pursuant  to Section  2.18,  then,  to the
extent any of the  foregoing  shall not have resulted from an assignment of Term
Loans pursuant to Section 2.21,  such Lender shall exercise  reasonable  efforts
(which  shall  not  require  such  Lender  to  incur  an  unreimbursed  loss  or
unreimbursed cost or expense or otherwise take any action  inconsistent with its
internal  policies  or suffer  any  disadvantage  or  burden  deemed by it to be
significant)  to assign its rights and delegate  and  transfer  its  obligations
hereunder to another of its offices,  branches or affiliates, if such assignment
would  reduce its claims for  compensation  under  Section  2.12 or enable it to
withdraw its notice  pursuant to Section 2.13 or would  reduce  amounts  payable
pursuant  to Section  2.18,  as the case may be, in the  future.  The  Borrowers
hereby agree to pay all reasonable costs and expenses  incurred by any Lender in
connection with any such assignment, delegation and transfer.


                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

     Each of Holding and the Borrowers represents and warrants (but, in the case
of  representations   and  warranties  relating  to  Credit  Parties  and  their
Subsidiaries,  only as to itself and its Subsidiaries,  it being understood that
Holding and ASI make all  representations  and  warranties as to all parties) to
each of the Lenders that:

     SECTION  3.01.  Corporate  Status.  Each  Credit  Party  and  each  of  its
Subsidiaries (i) is duly organized,  validly existing and in good standing under
the  laws of the  jurisdiction  of its  organization  and has the  corporate  or
partnership,  as the case may be,  power and  authority  to own its property and
assets and to  transact  the  business  in which it is engaged  and  proposes to
engage,  and (ii) has duly  qualified and is authorized to do business and is in
good standing in all  jurisdictions  where the failure to do so could reasonably
be  anticipated  to result in a Materially  Adverse  Effect.  Schedule 3.01 sets
forth as of the date  hereof,  and will set forth as of the  Effective  Date,  a
true,  complete and correct list of each  Subsidiary of ASI  indicating  (i) its
jurisdiction  of  incorporation,  (ii) its ownership  (by holder and  percentage
interest), (iii) its business and primary geographic scope of operation and (iv)
whether  such  Subsidiary  is  (x) a  Foreign  Subsidiary  or  (y) a  Restricted
Subsidiary.

     SECTION  3.02.  Corporate  Power and  Authority.  Each Credit Party has the
power and authority to execute,  deliver and carry out the terms and  provisions
of each of the  Credit  Documents  to  which it is,  or is to be, a party.  Each
Credit Party has taken all necessary action to authorize the execution, delivery
and  performance of each of the Credit  Documents to which it is, or is to be, a
party. Each Credit Document, when executed and delivered by a Credit Party, does
and will continue to constitute the legal,  valid and binding obligation of such
Credit Party  enforceable  in accordance  with its terms,  except as enforcement
thereof may be limited by  applicable  bankruptcy,  insolvency,  reorganization,
moratorium  and other similar laws  affecting the  enforceability  of creditors'
rights  generally and by general  principles of equity or, in the case of Credit
Parties  that are  Foreign  Subsidiaries,  applicable  laws  disclosed  in legal
opinions  delivered  pursuant to Section 4.02 of the 1993 Credit Agreement or of
this Agreement, as applicable.

     SECTION 3.03. No Violation. None of the Transactions (a) will contravene in
any respect  material to the rights or interests of the Lenders any provision of
any law, statute,  rule,  regulation,  order, writ,  injunction or decree of any
Governmental Authority,  (b) will conflict in any respect material to the rights
or interests of the Lenders or be  inconsistent  with or result in any breach of
any of the terms,  covenants,  conditions or provisions of, or constitute  (with
notice  or lapse of time or both) a  default  under,  or  result  in a  required
prepayment of, or (other than as contemplated  by the Security  Documents or the
Senior Indentures) result in the creation or imposition of (or the obligation to
create or  impose),  any Lien upon any of the  property  or assets of any Credit
Party or any of its  Subsidiaries  pursuant  to the  terms  of,  any  indenture,
mortgage, deed of trust, agreement or other instrument to which any Credit Party
is a party or by which it or any of its  property or assets is bound or to which
it may be  subject  or (c) will  violate  any  provision  of the  Organizational
Documents of any Credit Party or any of its Subsidiaries. No exchange





<PAGE>





control law or regulation  materially restricts any Borrower from complying with
its obligations in respect of any Alternative Currency Loan or Letter of Credit.

     SECTION 3.04. Use of Proceeds; Margin Regulations.  (a) The proceeds of the
Term Loans and Periodic Access Loans and the Revolving  Credit Loans made on the
Effective Date, will be applied (a) to the payments described in Section 1.06 of
the  Assignment  and  Amendment  Agreement  and (b) to pay fees and  expenses in
connection  with  certain of the  Transactions  as  heretofore  disclosed to the
Lenders.  The proceeds of the  Revolving  Credit Loans made after the  Effective
Date,  will be used for general  corporate  purposes of the  Borrowers and their
Subsidiaries.  The Letters of Credit  issued  hereunder  will be used to support
payment obligations incurred in the ordinary course of business by the Borrowers
and their Subsidiaries.

     (b)  Neither  any  Borrower  nor any of their  respective  Subsidiaries  is
engaged principally,  or as one of its important activities,  in the business of
extending  credit for the purpose of  purchasing or carrying  Margin  Stock.  No
Letter of Credit and no part of the  proceeds of any Loan will be used  directly
or  indirectly  for any  purpose  which  entails  a  violation  of,  or which is
inconsistent with, Regulation G, U or X.

     SECTION 3.05. Approvals. None of the execution, delivery and performance by
each Credit Party of the Credit  Documents to which it is, or is to be, a party,
the borrowings  hereunder and the application of the proceeds of the Loans,  the
Offering,  the  issuance  of the  Letters of  Credit,  the  continuation  of the
security interests in the Collateral  pursuant to the Security Documents and the
other  transactions  contemplated  hereby (all the foregoing being  collectively
called the  "Transactions") do or will require any registration with, consent or
waiver or  approval  of,  or notice  to, or other  action  to,  with or by,  any
Governmental Authority or other person except (i) as disclosed in Schedule 3.05,
(ii) filings required for the perfection and continuation of security  interests
granted  pursuant to the Security  Documents  and filings with the SEC and other
federal,  state and foreign regulatory  agencies in connection with the Offering
and (iii) filings the failure to make which could not  reasonably be anticipated
to result in a Materially Adverse Effect.

     SECTION 3.06.  Investment  Company Act, etc. No Credit Party is or will be,
after  giving  effect to the  Transactions,  (a) an  "investment  company"  or a
company  "controlled"  by an  "investment  company",  within the  meaning of the
Investment  Company Act of 1940, as amended or (b) subject to  regulation  under
the Public  Utility  Holding  Company Act of 1935,  the Federal Power Act or any
foreign,  federal,  state or local statute or regulation limiting its ability to
incur  indebtedness  for  money  borrowed  or  guarantee  such  indebtedness  as
contemplated hereby or by any other Credit Document.

     SECTION  3.07.  True  and  Complete  Disclosure.  All  written  information
(excluding  the  Projected  Financial  Statements  and  any  other  projections)
heretofore  or  contemporaneously  furnished by or on behalf of any Credit Party
(including all information contained in any of the Credit Documents) is, and all
other such information hereafter furnished,  including all information contained
in any of the Credit  Documents,  by or on behalf of any  Credit  Party to or on
behalf of any Lender will be, true and accurate in all material  respects on the
date as of which such  information  is dated or certified and not  incomplete by
omitting to state anything  necessary to make such information not misleading at
such time.  There is  nothing  of which any  Borrower  is aware  which  would be
reasonably  likely  to have a  Materially  Adverse  Effect  which  has not  been
disclosed to the Lenders in writing in connection  with or pursuant to the terms
of this Agreement.

     SECTION 3.08. Financial Condition;  Financial Statements;  Projections. (a)
No Credit Party is entering into the arrangements contemplated hereby and by the
other Credit Documents, or intends to make any transfer or incur any obligations
hereunder or thereunder  with actual intent to hinder,  delay or defraud  either
present or future  creditors.  On and as of the  Effective  Date, on a pro forma
basis after giving  effect to the  Transactions  contemplated  to occur on or in
connection with the Effective  Date, (w) no final  judgments  against any Credit
Party arising out of any pending or threatened  litigation will be rendered at a
time  when,  or in an amount  such  that,  such  Credit  Party will be unable to
satisfy such  judgments  promptly in  accordance  with their terms  (taking into
account the maximum  reasonable amount of such judgments in any such actions and
the earliest  reasonable  time at which such judgments  might be rendered);  the
cash  available  to each  Credit  Party,  after  taking  into  account all other
anticipated uses of





<PAGE>





the cash of such Credit Party,  is  anticipated to be sufficient to pay all such
judgments  promptly in accordance  with their terms;  (x) the sum of the present
fair  salable  value of the assets of each Credit Party will exceed the probable
liability  of such Credit  Party and its  Subsidiaries  on their  debts;  (y) no
Credit  Party  intends to, or  believes  that it will,  incur  debts  beyond its
ability to pay such debts as such debts  mature  (taking into account the timing
and amounts of cash to be received by such Credit Party from any source,  and of
amounts to be payable  on or in  respect of debts of such  Credit  Party and the
amounts  referred to in clause (w));  the cash  available to each Credit  Party,
after taking into account all other  anticipated uses of the cash of such Credit
Party,  is anticipated to be sufficient to pay all such amounts on or in respect
of debts of such Credit  Party,  when such amounts are required to be paid;  and
(z) each Credit  Party will have  sufficient  capital  with which to conduct its
present and  proposed  business  and the  property of such Credit Party does not
constitute  unreasonably  small  capital  with which to conduct  its  present or
proposed  business.  For  purposes  of this  Section  3.08(a)  "debt"  means any
liability on a claim, and "claim" means (i) right of payment whether or not such
a right is reduced to judgment,  liquidated,  unliquidated,  fixed,  contingent,
matured,  unmatured,   disputed,   undisputed,  legal,  equitable,  secured,  or
unsecured;  or (ii) right to an equitable  remedy for breach of  performance  if
such breach  gives rise to a payment,  whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent,  matured, unmatured, disputed,
undisputed,  secured, or unsecured. On the date of each Borrowing, issuance of a
Letter of Credit or assignment of Term Loans pursuant to Section 2.21 (and after
giving effect to all  Borrowings,  Letters of Credit or  assignments  as of such
date), the  representations  set forth in this Section 3.08(a) shall be true and
correct with respect to each Borrower  which is incurring  Loans or on behalf of
which a Letter of Credit is being issued or to whom an  assignment  of a Loan is
being made on such date and any Credit  Party which is a guarantor  with respect
to any or all of such  Borrowings  or Letters of Credit or such  assigned  Loan.
With respect to clauses (x) and (z),  with respect to Credit  Parties other than
Borrowers,  such  representations  and  warranties  are  made to the best of the
knowledge of the Borrowers except that such  representations  and warranties are
made without qualification to the extent that the untruth or inaccuracies of any
such  representation  or warranty could reasonably be anticipated to result in a
Materially Adverse Effect.

     (b) There has  heretofore  been  delivered  to the Lenders the  Information
Memorandum  containing the audited balance sheet of ASI on a consolidated  basis
as of December 31, 1993 and the related  consolidated  statements  of income and
cash  flows for the year then ended  accompanied  by an  unqualified  opinion of
Ernst & Young.  Such financial  statements  fairly  present,  in conformity with
GAAP, the consolidated financial position of ASI and its Subsidiaries as of such
date and their consolidated results of operations and cash flows for such fiscal
year.  Except  as set  forth in  Schedule  3.08(b),  neither  ASI nor any of its
Subsidiaries  had as of the  date  of the  foregoing  financial  statements  any
material Guarantee, contingent liability or liability for taxes, long-term lease
or  unusual  forward  or  long-term  commitment  which is not  reflected  in the
foregoing  financial  statements or the notes thereto to the extent  required by
GAAP.  Since  December  31, 1993,  there has not  occurred any material  adverse
change in the business,  operations,  condition (financial or otherwise), assets
or prospects of (i) ASI and its Subsidiaries taken as a whole or (ii) the German
Borrower and its Subsidiaries taken as a whole.

     (c) There has  heretofore  been  delivered  to the Lenders the  Information
Memorandum  containing pro forma consolidated income projections for ASI and its
Subsidiaries,  pro forma consolidated  balance sheet projections for ASI and its
Subsidiaries  and pro forma  consolidated  cash flow projections for ASI and its
Subsidiaries, all for the fiscal years ending December 31, 1994 through December
31, 1997, inclusive ("Projected Financial Statements"), which give effect to the
Transactions.   The  assumptions  made  in  preparing  the  Projected  Financial
Statements  are  reasonable,  as of the date of such  projections  and as of the
Effective  Date (except  that such  assumptions  do not include the  $20,000,000
termination  fee  paid to  Kelso  in  connection  with  the  termination  of the
Consulting  Agreement between ASI and Kelso), and all material  assumptions with
respect  to the  Projected  Financial  Statements  are set  forth  therein.  The
Projected  Financial  Statements provide, as of the date of such projections and
as of the Effective Date, reasonable estimates of future performance, subject to
the  uncertainty  and   approximation   inherent  in  any  projections  and  the
qualifications set forth therein. Any projected financial  information regarding
ASI  and any of its  Subsidiaries  furnished  to any of the  Lenders  after  the
Effective Date will be prepared  based upon  reasonable  assumptions,  as of the
date of  preparation,  and  will  provide,  as of the date  thereof,  reasonable
estimates of future  performance,  subject to the uncertainty and  approximation
inherent in any projections and any other qualifications set forth therein.





<PAGE>






     (d)  Schedule  3.08(d)  sets  forth (i) the  outstanding  Indebtedness  and
preferred  stock of ASI and its  Subsidiaries as of December 31, 1994, (ii) each
Lien securing any such Indebtedness  (excluding Liens to be released or assigned
to the Collateral  Agent on the Effective  Date),  (iii) a list identifying each
instrument or agreement  governing such  Indebtedness  and the maximum amount of
debt governed by each such  agreement and (iv) each line of credit  available to
ASI  or  any  Subsidiary  thereof  as  of  the  Effective  Date  (excluding  the
Commitments).  A true,  complete and correct copy of each material instrument or
agreement   referred  to  in  clause  (iii)  above  (including  all  amendments,
supplements,  modifications  or  waivers  thereto)  has  been  delivered  to the
Administrative  Agent  and a  true,  complete  and  correct  copy  of all  other
instruments or agreements  referred to in such clause (including all amendments,
supplements,  modifications and waivers thereto) as may be reasonably  requested
by the  Administrative  Agent will be  delivered  to it; and, in each case,  the
Administrative  Agent shall be authorized to deliver  copies  thereof,  at ASI's
expense, to any Lender who requests copies thereof.

     (e) Neither ASI nor any Subsidiary  thereof has sold any material assets or
properties  out of the  ordinary  course of  business  during  the  period  from
December 31, 1993, to the date hereof except as permitted by Section 6.02.

     SECTION 3.09.  Security  Interests.  Each of the Security Documents creates
(or will create, as the case may be), as security for the obligations  purported
to be secured thereby,  subject to the provisions hereof and thereof, either (a)
a valid and enforceable  perfected  security  interest in and Lien on all of the
Collateral  subject to such  Security  Document (or  comparable  interest  under
foreign  law in the case of foreign  Collateral),  or (b) in the case of certain
property (other than Securities, Intercompany Notes and Mortgaged Properties) to
be pledged by Foreign Subsidiaries,  a floating charge, fixed charge or security
interest,  as specified in the  applicable  Security  Document,  in each case in
favor of the  Collateral  Agent for the  benefit of the  Lenders,  subject to no
other Liens except as may be expressly  permitted  in each  applicable  Security
Document or this Agreement,  and prior to all other Liens except Liens described
in  Schedule  3.12(a) as being  prior to the Liens  granted  under the  Security
Documents.  The pledgor or  assignor,  as the case may be,  under each  Security
Document has good title to all Collateral  subject  thereto (other than any Real
Property subject to a Mortgage) free and clear of all Liens other than Permitted
Encumbrances and such additional  Liens as may be specifically  permitted by the
Security  Document to which such Collateral is subject or by this Agreement.  No
filings or  recordings  are required in order to perfect the security  interests
created under the Security  Documents except for filings or recordings listed on
Schedule 3.09(a), all of which shall have been made on or prior to the Effective
Date except as  otherwise  expressly  provided in  Schedule  3.09(a);  provided,
however,  that, with respect to any Mortgaged Property, no failure to record any
Mortgage  shall be deemed a breach of this  Section  if the  Title  Company  has
issued or committed to issue in respect of such  Mortgaged  Property a policy of
title insurance complying with the provisions of Section 4.02(h).  Except as set
forth in Schedule 3.09(b),  there are no agreements or understandings between or
among  stockholders  or equity  holders of any of the Credit  Parties that might
adversely  affect the benefits  intended to be conferred on the Collateral Agent
by the  Security  Documents or the prompt  realization  of such  benefits.  Each
Subsidiary of ASI or any of its Subsidiaries that is organized under the laws of
any state,  territory or possession of the United States and that is not a party
to the Domestic Security  Agreement or the Domestic  Securities Pledge Agreement
is a Non-Material Subsidiary;  provided,  however, that intercompany receivables
and Investments in Subsidiaries shall be excluded from consolidated total assets
for  purposes  of the  definition  of  Non-Material  Subsidiary  as used in this
sentence.

     SECTION 3.10. Tax Returns and Payments. Each of the Credit Parties and each
of its  Subsidiaries  has filed all  federal  income tax  returns  and all other
material tax returns and reports,  domestic and foreign, required to be filed by
it and has paid all taxes  shown as due on such  returns or due  pursuant to any
assessment  received by it, other than those not yet  delinquent  and those that
are being contested by proper  proceedings  conducted in good faith and with due
diligence for which it maintains adequate reserves in accordance with GAAP. Each
of the Credit Parties has paid, or has provided  adequate reserves in accordance
with GAAP for the payment of, all taxes,  domestic and foreign,  applicable  for
all prior  fiscal  years and for the  current  fiscal  year to the date  hereof.
Except as heretofore  disclosed to the Lenders in writing,  there is no proposed
tax assessment  against any Credit Party or any of its Subsidiaries which would,
if the assessment were made, have a Materially Adverse Effect.






<PAGE>





     SECTION 3.11.  Compliance  with ERISA.  (a) As of the date hereof and as of
the  Effective  Date (i) each Borrower and each of its ERISA  Affiliates  are in
compliance in all material respects with the applicable provisions of ERISA with
respect to the Pension Plans;  (ii) no Reportable Event has occurred as to which
any Borrower or any ERISA Affiliate was required to file a report with the PBGC,
and the present value of all benefit  liabilities under all Pension Plans (based
on those  assumptions  used to fund such Pension  Plans) did not, as of the last
annual valuation date applicable  thereto,  exceed by more than $100,000,000 the
value of the assets of all Pension  Plans;  (iii)  neither any  Borrower nor any
ERISA Affiliate has incurred any Withdrawal  Liability that materially adversely
affects the financial  condition of any Borrower and its ERISA  Affiliates taken
as a whole;  (iv) neither any Borrower nor any ERISA  Affiliate has received any
notification  that  any  Multiemployer  Plan is in  reorganization  or has  been
terminated,  within the meaning of Title IV of ERISA, and no Multiemployer  Plan
is reasonably  expected to be in reorganization or to be terminated,  where such
reorganization  or  termination  has resulted or can  reasonably  be expected to
result in an increase in the contributions required to be made to such Plan that
would  materially and adversely  affect the financial  condition of any Borrower
and its  ERISA  Affiliates  taken  as a  whole;  (v) no  proceedings  have  been
instituted to terminate any Pension Plan;  (vi) each Foreign  Pension Plan is in
compliance  in all material  respects  with the  applicable  laws of any foreign
jurisdictions;  and (vii) no Foreign  Pension Plan has any unfunded  liabilities
which,  individually  or in the  aggregate,  would  be  likely  to  result  in a
Materially Adverse Effect.

     (b) With respect to any pension,  retirement or other deferred compensation
plan  maintained by a Foreign  Subsidiary  which is not a Foreign  Pension Plan,
reasonable  reserves have been  established in accordance with prudent  business
practice or where required by ordinary accounting  practices in the jurisdiction
in which such Foreign Subsidiary maintains its principal place of business or in
which such plan is maintained. The aggregate unfunded liabilities,  after giving
effect to any reserves for such  liabilities,  with respect to such plans is not
likely to result in a Materially Adverse Effect.

     SECTION 3.12. Title to Properties; Liens. (a) Each Credit Party and each of
its  Subsidiaries  have good title (or a  comparable  interest  with  respect to
foreign  Real  Property)  with  respect to its Real  Properties  (subject to any
Mortgages and, as of the date hereof,  the Effective Date and  thereafter,  free
and clear of all Liens  other  than the Liens  described  in  Schedule  3.12(a),
Permitted  Encumbrances  and Liens  expressly  permitted under Section 6.03) and
good and  sufficient  title (subject as aforesaid and to Liens granted under any
applicable  Security  Document) to all of its other  respective  properties  and
assets  reflected in the most recent  consolidated  balance sheet referred to in
Section 3.08(b) or in the most recent financial statements delivered pursuant to
Section 5.01, as the case may be, in each case except for (i) assets disposed of
since the date of such consolidated  balance sheet and prior to the date of this
Agreement in the ordinary  course of business,  (ii) assets acquired or disposed
of since the date of such  consolidated  balance sheet in  accordance  with this
Agreement,  (iii) assets held under Capital  Leases and (iv) defects that in the
aggregate  do not result in a  Materially  Adverse  Effect.  Except as set forth
above and except as permitted hereby and by Section 3.09 and by the other Credit
Documents, all such properties and assets are free and clear of Liens.

     (b) Schedule  3.12(b) sets forth,  as of the date hereof and the  Effective
Date, a true,  complete and correct list of (i) all Real Property of ASI and its
Subsidiaries located in the United States of America, Canada, France, the United
Kingdom,  the  Netherlands  or  Germany  and  having a book  value in  excess of
$100,000 or the equivalent in one or more other currencies; (ii) the location of
each such Real  Property;  and (iii) the  Borrowers'  good faith estimate of the
value of each such Real  Property  that is  significant.  Each of the  Mortgaged
Properties  is and as of the  Effective  Date shall be subject to no Liens other
than the  Mortgages,  the Liens  identified  on Schedule  3.12(a) and  Permitted
Encumbrances.  Each of the other Real  Properties  is subject to no Liens  other
than Liens permitted by Section 6.03.  Schedule  3.12(b)  indicates which of the
Real Properties is a manufacturing or processing plant or warehouse owned by ASI
or any Restricted  Subsidiary that constitutes a "Principal Property" as defined
in the Senior Indentures.

     (c) Each of the Real  Properties  located in an area in the  United  States
identified by the Secretary of Housing and Urban  Development  as an area having
special flood hazards has adequate insurance covering such hazard.






<PAGE>





     SECTION  3.13.  Patents,  Trademarks,  etc.  ASI and its  Subsidiaries  own
directly,  or  are  entitled  to use  by  license  or  otherwise,  all  patents,
trademarks, trade names, copyrights,  licenses, technology,  know-how, processes
and service  marks and rights with respect to any of the  foregoing  material to
ASI's or such  Subsidiary's  business as  currently  conducted.  The use of such
patents,   trademarks,   service  marks,  trade  names,  copyrights,   licenses,
technology,  know-how, processes and rights with respect to the foregoing by ASI
and its Subsidiaries does not, to the best of the Borrowers' knowledge, infringe
on the rights of any person,  except for such uses as would not give rise to any
material  liability on the part of ASI or its Subsidiaries.  The consummation of
the  Transactions  does not require any consents to be obtained  with respect to
such  patents,  trademarks,  trade  names,  copyrights,   technology,  know-how,
processes,  service marks or its license to use, as the case may be, any of such
patents,   trademarks,   service  marks,  trade  names,  copyrights,   licenses,
technology,  know-how,  processes or service marks or rights with respect to the
foregoing  by ASI and  its  Subsidiaries,  except  for the  consents  listed  on
Schedule 3.13, which shall have been obtained on or prior to the Effective Date.

     SECTION 3.14.  Environmental Matters. (a) There are no chemical substances,
pollutants,  contaminants or hazardous or toxic substances, materials or wastes,
whether solid,  gaseous or liquid in nature,  at any premises  owned,  operated,
controlled  or used by any  Credit  Party or its  Subsidiaries  where such could
reasonably be expected to result in a Materially  Adverse Effect and none of the
Credit  Parties or their  Subsidiaries  nor, to the best knowledge of the Credit
Parties and their Subsidiaries, any of their respective predecessors in interest
have manufactured,  processed,  distributed, used, treated, stored, disposed of,
transported  or handled  any such  substances,  where such could  reasonably  be
anticipated to result in a Materially  Adverse Effect.  There is no ambient air,
surface water,  groundwater or land contamination  within,  under or relating to
any Real  Property  or, to the best  knowledge  of the Credit  Parties and their
Subsidiaries,  other location  geologically or hydrologically  connected to such
properties  and  none of such  properties  has  been  used by any of the  Credit
Parties or their Subsidiaries, or, to the best knowledge of any Credit Party, by
any  of  their  predecessors  in  interest,  for  the  manufacture,  processing,
distribution,  use, treatment,  storage, disposal,  transport or handling of any
substance  described in the preceding  sentence  where such could  reasonably be
anticipated to result in a Materially Adverse Effect.

     (b) Except as set forth on Schedule 3.14(b),  none of the Credit Parties or
any of its  Subsidiaries  has any  obligations  or  liabilities,  matured or not
matured,  absolute or contingent,  assessed or  unassessed,  no claims have been
made  against  it  during  the past five  years,  and no  presently  outstanding
citations or notices have been issued  against it, in each case imposed or based
upon any provision of any domestic,  foreign,  federal, state or local law, rule
or regulation or common law  pertaining to  exploration  and mining  operations,
reclamation,   health  or  safety  or   environmental   protection   where  such
obligations,  liabilities,  claims, citations or notices, individually or in the
aggregate,  could  reasonably  be  expected  to result in a  Materially  Adverse
Effect,  including  any such  obligations,  liabilities,  claims,  citations  or
notices relating to or arising out of or  attributable,  in whole or in part, to
the manufacture,  processing,  distribution,  use, treatment, storage, disposal,
transport or handling of any  substance  described in paragraph (a) above by any
of the  Credit  Parties  or  their  Subsidiaries,  or any  of  their  respective
employees,  agents,  representatives  or, to the best  knowledge  of the  Credit
Parties and their  Subsidiaries,  predecessors in interest in connection with or
in any way arising from or relating to any Credit Party or its  Subsidiaries  or
any of their  respective  properties;  or, to the best  knowledge  of the Credit
Parties, relating to or arising out of or attributable,  in whole or in part, to
the manufacture,  processing,  distribution,  use, treatment, storage, disposal,
transport or handling of any such substance, by any other person at, on or under
any of the Real  Properties  or any other  location  which could  reasonably  be
expected  to  result  in a  Materially  Adverse  Effect.  Except as set forth on
Schedule 3.14(b), none of the Credit Parties or any of its Subsidiaries has been
subject to any action,  suit, claim or proceeding for failure to comply with, or
received  notice  of any  potential  liability  under,  any  domestic,  foreign,
federal,  state or local  environmental  law,  rule or  regulation  where  such,
individually or in the aggregate, could reasonably be anticipated to result in a
Materially Adverse Effect.

     SECTION 3.15.  Litigation;  Adverse Facts.  Except as set forth on Schedule
3.15  hereto,  there is no action,  suit,  proceeding  or  investigation  by any
Governmental  Authority or other person  pending or known by any Credit Party to
be threatened  with respect to any Credit Party or any of its  Affiliates or any
of their assets or any of the Credit Documents or any of the Transactions  which
is  reasonably  likely to result in a  Materially  Adverse  Effect and there has
occurred no development in any





<PAGE>





action, suit, proceeding,  governmental  investigation or arbitration previously
disclosed to the Lenders,  which could  reasonably be expected to result in such
an effect.

     SECTION  3.16.  Compliance  with Laws and  Charter  Documents.  Neither any
Credit Party nor any  Subsidiary  of any Credit Party is (i) in violation of its
charter or by-laws or (ii) in violation of any law, statute,  rule,  regulation,
order, writ, injunction or decree (including,  without limitation,  any exchange
control law or  regulation)  of any  Governmental  Authority  applicable  to any
Credit Party or any  Subsidiary  of any Credit Party or any of their  respective
properties or assets, which violation under this clause (ii), individually or in
the aggregate, could reasonably be anticipated to result in a Materially Adverse
Effect.

     SECTION  3.17.  Absence of Default.  (a) No Default or Event of Default has
occurred and is continuing.

     (b) Except as  disclosed  on Schedule  3.17,  as of the date hereof and the
Effective Date,  neither any Credit Party nor any Subsidiary of any Credit Party
is or will be in default in any material respect in the performance,  observance
or fulfillment of any of the obligations,  covenants or conditions  contained in
any material mortgage, note, debenture,  agreement,  license or other instrument
to which it is or will be a party or by which it may be bound,  and no condition
exists  which,  with the  giving of  notice or the lapse of time or both,  would
constitute such a default.

     SECTION  3.18.  Labor  Matters.  (i)  Neither  any  Credit  Party  nor  any
Subsidiary  of any Credit  Party is  experiencing  any  strike,  labor  dispute,
slowdown or work stoppage,  due to labor disagreements which could reasonably be
anticipated  to  result  in a  Materially  Adverse  Effect  and (ii) to the best
knowledge of each of the Borrowers,  there is no such strike, dispute,  slowdown
or work stoppage  threatened  against any Credit Party or any  Subsidiary of any
Credit Party.

     SECTION 3.19. Benefit Plans. (a) As of December 31, 1993 (which date is the
most recent date of actuarial valuation of any Pension Plan) the actuarial value
of the assets and the value of the benefit liabilities of all Pension Plans were
as set forth on Schedule  3.19 hereto.  Since  December 31, 1993,  there has not
occurred any material  adverse  change in the funded status of any Pension Plans
resulting from any plan amendment or other action taken by any Credit Party.

     (b) As of December 31, 1993,  the value of the benefit  liabilities  of all
Foreign Pension Plans,  the book reserves for such plans and the actuarial value
of plan assets with  respect to all Foreign  Pension  Plans were as set forth on
Schedule  3.19  hereto.  Since  December  31,  1993,  there has not occurred any
material adverse change in the funded status of any Foreign Pension Plan.

     (c) As of the date hereof, the aggregate unfunded expected  post-retirement
benefit  obligation of ASI and its  Subsidiaries  for retiree medical  coverage,
after giving effect to any reserves for such  liabilities,  cannot reasonably be
anticipated to result in a Materially Adverse Effect.

     SECTION  3.20.  Insurance.  Schedule  3.20 sets forth a true,  complete and
correct  description  of all  insurance  maintained  by ASI  or by ASI  for  its
Subsidiaries as of the date hereof and the Effective Date. As of each such date,
such insurance is in full force and effect and all premiums have been duly paid.
ASI and its Subsidiaries  have insurance in such amounts and covering such risks
and liabilities as are in accordance with normal industry practice.







<PAGE>





ARTICLE IV

CONDITIONS

     SECTION 4.01. All Events.  The obligations of the Lenders to make Loans and
of the Issuing  Banks to issue  Letters of Credit  hereunder  are subject to the
satisfaction  on the  date of each  Borrowing  (including  each  Borrowing  of a
Swingline  Loan) and on the date of each  issuance  of a Letter of Credit of the
following conditions:

     (a)  In  the  case  of a  Borrowing  (other  than a  Swingline  Loan),  the
Administrative  Agent  shall have  received a  Borrowing  Request as required by
Section  2.03  or,  in the  case of the  issuance  of a Letter  of  Credit,  the
applicable  Issuing  Bank and the  Administrative  Agent  shall have  received a
notice  requesting  the issuance of such Letter of Credit as required by Section
2.19(b) or, in the case of a Borrowing of a Swingline Loan, the Swingline Lender
and the  Administrative  Agent  shall  have  received a notice  requesting  such
Swingline Loan as required by the Swingline Loan Agreement.

     (b) The  representations  and  warranties  set forth in Article  III hereof
(except,  in the case of a reborrowing of a Revolving Credit Borrowing that does
not  increase  the  aggregate   principal   amount  of  Revolving  Credit  Loans
outstanding,  the  representations  set forth in the last  sentence  of  Section
3.08(b) and Section  3.15) and in each other Credit  Document  shall be true and
correct in all material  respects on and as of such date with the same effect as
though made on and as of such date,  except to the extent  such  representations
and warranties expressly relate to an earlier date.

     (c) Each of the  Credit  Parties  shall be in  compliance  in all  material
respects  with all the terms and  provisions  set forth herein and in each other
Credit Document on its part to be observed or performed,  and at the time of and
immediately  after such  Borrowing or issuance of such Letter of Credit,  as the
case may be,  no  Event  of  Default  or  Default  shall  have  occurred  and be
continuing.

     (d) In the case of a Borrowing of a Swingline Loan, the Borrower in respect
thereof shall have  executed and  delivered to the Swingline  Lender a Swingline
Note, if requested by the Swingline  Lender,  complying  with the  provisions of
Section 2.20(c).

     Each  Borrowing  and each issuance of a Letter of Credit shall be deemed to
constitute  a  representation  and  warranty  by  Holding  and  ASI  and  by the
applicable  Borrower  (but, in the case of a Borrower other than ASI, only as to
itself and its  Subsidiaries) on the date of such Borrowing or issuance,  as the
case may be,  as to the  matters  specified  in  paragraphs  (b) and (c) of this
Section 4.01.  Without limiting the foregoing,  each Borrowing and each issuance
of a Letter of Credit shall further be deemed to constitute a representation and
warranty by Holding and ASI and by the applicable  Borrower that on the basis of
(i) such  inquiries as one or more  Financial  Officers of ASI shall have deemed
necessary and (ii) advice of counsel  (which may be general  advice or advice as
to a particular  Borrowing),  the  requested  Borrowing  is permitted  under the
provisions limiting Indebtedness in each Indenture to which ASI is party.

     SECTION 4.02.  Effectiveness.  The  effectiveness of this Agreement and the
obligations  of the Lenders to make Loans  hereunder and of the Issuing Banks to
issue Letters of Credit hereunder are subject to the  satisfaction,  on a single
date on or prior to March 31, 1995, of the  conditions  set forth in Section III
of the Assignment and Amendment Agreement.







<PAGE>





                                   ARTICLE V

                             AFFIRMATIVE COVENANTS

     A. ASI  covenants  and agrees that on and after the  Effective  Date and so
long as this  Agreement  is in  effect  and  until  the  Commitments  have  been
terminated  and  the  Loans,   together  with  interest,   Fees  and  all  other
Obligations,  have  been  paid in full,  and all  Letters  of  Credit  have been
cancelled or have expired and all amounts drawn  thereunder have been reimbursed
in full,  unless the Required Lenders shall otherwise give written consent,  ASI
will and will cause each of its Subsidiaries to:

     SECTION 5.01. Financial Statements and Other Reports.  Maintain a system of
accounting  established  and  administered  in  accordance  with sound  business
practices  to permit  preparation  of the  financial  statements  required to be
delivered  hereunder and  consolidated  financial  statements in conformity with
GAAP. ASI will deliver or cause to be delivered to each of the Lenders:

     (a) as soon as practicable and in any event within 50 days after the end of
each fiscal quarter of ASI, other than the last quarter in each fiscal year, (i)
the consolidated  balance sheet of ASI and its Subsidiaries and (ii) the related
consolidated  statements  of income and retained  earnings and cash flows of ASI
and its  Subsidiaries  for  such  fiscal  quarter  and for the  period  from the
beginning  of the then  current  fiscal year to the end of such  fiscal  quarter
setting forth, in comparative form, the  corresponding  amounts as of the end of
and  for  the  corresponding  periods  of  the  previous  fiscal  year  and  the
corresponding  amounts  from the  plan for the  current  fiscal  year  delivered
pursuant to Section  5.01(j),  all in  reasonable  detail and  accompanied  by a
certificate of the chief  financial  officer (or, if there is no chief financial
officer,  the officer  functioning  as the chief  financial  officer)  and chief
accounting  officer of ASI to the effect that they fairly  present the financial
condition of ASI and its  Subsidiaries as at the dates indicated and the results
of their operations and cash flows for the periods indicated, subject to changes
resulting from normal year-end adjustments;

     (b) as soon as  practicable  and in any event within 105 days after the end
of each fiscal  year of ASI (i) the  consolidated  balance  sheet of ASI and its
Subsidiaries and (ii) the related consolidated statements of income and retained
earnings and cash flows of ASI and its Subsidiaries for such fiscal year setting
forth, in comparative form, the  corresponding  amounts as of the end of and for
the previous  year and the  corresponding  amounts from the plan for such fiscal
year  delivered  pursuant  to  Section  5.01(j),  all in  reasonable  detail and
accompanied by a certificate of the chief financial  officer (or, if there is no
chief financial officer, the officer functioning as the chief financial officer)
and chief  accounting  officer of ASI to the effect that they fairly present the
financial  condition of ASI and its  Subsidiaries  as at the dates indicated and
the results of their  operations and cash flows for the periods  indicated based
on ASI's normal  accounting  procedures  and  accompanied by a report thereon of
Ernst & Young or other  independent  certified public  accountants of recognized
national   standing   selected  by  ASI  and  reasonably   satisfactory  to  the
Administrative  Agent which report shall be  unqualified as to going concern and
scope of audit  and shall  state  that such  consolidated  financial  statements
present  fairly the financial  condition of ASI and its  Subsidiaries  as at the
dates indicated and the results of their operations and their cash flows for the
periods  indicated in conformity  with GAAP applied on a basis  consistent  with
prior years (except for inconsistencies  required by changes in GAAP and changes
approved by such  accountants)  and that the examination by such  accountants in
connection  with  such  consolidated  financial  statements  has  been  made  in
accordance with generally accepted auditing standards;

     (c)  together  with each  delivery of financial  statements  of ASI and its
Subsidiaries  pursuant  to  paragraphs  (a) and (b) above,  commencing  with the
financial  statements  for the  period  ending  March  31,  1995,  an  Officers'
Certificate  of ASI (i) stating that the signers have reviewed the terms of this
Agreement  and the other Credit  Documents  and have made,  or caused to be made
under their  supervision,  a review in reasonable detail of the transactions and
condition of ASI and its  Subsidiaries  during the accounting  period covered by
such  financial  statements and that such review has not disclosed the existence
during or at the end of such accounting period, and that the signers do not have
knowledge of the existence as at the date of





<PAGE>





the Officers' Certificate, of any condition or event which constitutes a Default
or an Event of Default,  or, if any such  condition or event  existed or exists,
specifying  the nature and period of  existence  thereof and what action ASI has
taken,   is  taking  and  proposes  to  take  with  respect   thereto  and  (ii)
demonstrating in reasonable  detail compliance (as determined in accordance with
this  Agreement)  during  and at the  end of such  accounting  period  with  the
restrictions contained in Sections 6.06, 6.10 and 6.11.

     (d)  together  with each  delivery of financial  statements  of ASI and its
Subsidiaries  pursuant to paragraph  (b) above,  commencing  with the  financial
statements  for the period ended  December 31, 1995, a written  statement by the
independent  public accountants giving the report thereon (i) stating that their
audit  examination  has included a review of the terms of this Agreement and the
other  Credit  Documents  as they relate to  accounting  matters,  (ii)  stating
whether, in connection with their audit examination,  any condition or event, at
any time during or at the end of such period which  constitutes  a Default or an
Event of Default has come to their  attention,  and if such a condition or event
has come to their  attention,  specifying  the nature  and  period of  existence
thereof,  and (iii)  stating that based on their audit  examination  nothing has
come to their  attention  which  causes  them to  believe  that the  information
contained in any of the certificates  delivered  therewith pursuant to paragraph
(c)  above  is not  correct  or that the  matters  set  forth in the  compliance
certificate  delivered  therewith  pursuant to clause (ii) of such paragraph (c)
above for the applicable fiscal year are not stated in accordance with the terms
of this Agreement;

     (e)  promptly  upon  receipt  thereof,   a  notice  listing  any  financial
statements of, or reports submitted by independent public accountants to, ASI or
any of its Subsidiaries in connection with any annual,  interim or special audit
of the  financial  statements  of ASI  or  any of its  Subsidiaries,  including,
without  limitation,  any comment  letter  submitted by such  accountants to the
Audit  Committee  of ASI's Board of Directors  in  connection  with their annual
audit,  and upon the request of any Lender, a copy of any such report or comment
letter;

     (f) promptly upon their becoming available,  a notice listing any financial
statements,  reports,  notices  and  proxy  statements  sent or  made  available
generally  by any  Borrower or any of its  Subsidiaries  to its public  security
holders,  any regular and periodic reports and all  registration  statements and
prospectuses filed by any of them with any securities  exchange or with the SEC,
or any comparable  foreign bodies,  and any press releases and other  statements
made  available  generally  by any of them  to the  public  concerning  material
developments in the business of ASI or any Subsidiary,  and, upon the request of
any Lender, a copy of any such document;

     (g) promptly upon any executive  officer of ASI obtaining  knowledge (i) of
any condition or event which  constitutes  a Default or an Event of Default,  or
becoming  aware that any  Lender has given any notice or taken any other  action
with respect to a claimed Default or Event of Default,  (ii) that any person has
given any notice to any Borrower or any  Subsidiary of any Borrower or taken any
other action with respect to a claimed default or event or condition of the type
referred  to in Section  7.04,  (iii) of any  condition  or event which would be
required to be disclosed in a current report filed by any Borrower with the SEC,
on Form 8-K if such  Borrower  were  required  to file  such  reports  under the
Securities  Exchange  Act of 1934,  as  amended,  or the rules  and  regulations
thereunder (or any successor  thereof),  or (iv) of a Materially Adverse Effect,
an Officers'  Certificate  specifying  the nature and period of existence of any
such condition or event,  or specifying the notice given or action taken by such
Lender or person  and the  nature of such  Default,  Event of  Default,  claimed
Default,  claimed  Event of  Default,  or claimed  default,  event or  condition
referred to in Section 7.04, or Materially  Adverse Effect,  and what action any
Borrower or  Subsidiary  thereof has taken,  is taking and proposes to take with
respect  thereto  or, in the case of  clause  (iii)  above,  a copy of a current
report on Form 8-K filed by Holding with respect to such condition or event;






<PAGE>





     (h) promptly upon any executive  officer of ASI obtaining  knowledge of (i)
the institution of, or threat of, any action, suit, proceeding, investigation or
arbitration by any  Governmental  Authority or other person against or affecting
in any material  respect any Borrower or any of its Subsidiaries or any of their
assets not previously  disclosed by any Borrower to the Lenders  pursuant to the
terms  hereof,  or (ii)  any  material  development  in any such  action,  suit,
proceeding, investigation or arbitration (whether or not previously disclosed to
the Lenders by the Borrowers pursuant to the terms hereof), which, in any case:

     (A) would be reasonably likely to result in a Materially Adverse Effect; or

     (B)  seeks to  recover  any  damages  or  obtain  relief as a result of the
refinancing consummated with the proceeds of the Loans;

notice  thereof and copies of such other  information  as may be reasonably
available to ASI (without  waiver of any  applicable  evidentiary  privilege) to
enable the Lenders to evaluate such matters; and, in addition to the requirement
set forth in clauses (i) and (ii) of this  subsection  5.01(h),  Borrowers  upon
request  shall  promptly  give  notice  of  the  status  of  any  action,  suit,
proceeding,  investigation  or arbitration  covered by a report delivered to the
Lenders  pursuant to clause (i) or (ii) above to the  Lenders  and provide  such
other information as may be reasonably  available to it to enable the Lenders to
evaluate such matters;

     (i) as soon as  practicable  and in any  event  within  ten days  after any
Borrower  or  any  of its  ERISA  Affiliates  knows  of  the  occurrence  of any
"prohibited  transaction," within the meaning of Section 406 of ERISA or Section
4975 of the Code or similar event under other applicable foreign, federal, state
or local law, in connection with any Pension Plan or Foreign Pension Plan or any
trust created thereunder, which in any such case would have a Materially Adverse
Effect, an Officers' Certificate  specifying the nature thereof, what action has
been taken,  is being  taken or is  proposed to be taken by any  Borrower or any
ERISA  Affiliate of any Borrower with respect  thereto,  and any action taken or
threatened  by the  Internal  Revenue  Service,  Department  of  Labor  or other
Governmental  Authority  with  respect  thereto  (together  with  copies  of all
relevant notices or other communications received from such entity);

     (j) as soon as practicable and in any event by the time of each delivery of
the  financial  statements  referred to in paragraph (b) above,  a  consolidated
plan, prepared in accordance with ASI's normal accounting  procedures (and which
will represent  management's  reasonable estimate of ASI's projected performance
during such  periods)  applied on a consistent  basis,  for the next  succeeding
three  fiscal  years  of ASI  and its  Subsidiaries,  including  (i)  forecasted
consolidated  balance  sheets and  consolidated  statements of income,  retained
earnings and cash flows of ASI and its Subsidiaries on a consolidated  basis for
such periods,  (ii) such  information with respect to each fiscal quarter in the
first year covered by such plan, (iii) a forecast of the degree to which ASI and
its Subsidiaries will comply with Sections 6.10 and 6.11 and (iv) an explanation
and analysis of any material  inconsistencies between such plan as it related to
the fiscal year most recently  ended and the actual  performance  of ASI and its
Subsidiaries for such fiscal year;

     (k)  together  with each  delivery of financial  statements  of ASI and its
Subsidiaries  pursuant to paragraph (b) above,  an Officers'  Certificate of ASI
stating,  as of the  date  of such  statements,  the  amount  and  terms  of all
outstanding Intercompany  Indebtedness and the obligors and obligees thereunder,
and that such Intercompany  Indebtedness and any Intercompany Notes representing
such  Indebtedness  comply  with  the  terms  hereof  and  of the  other  Credit
Documents;

     (l) with  reasonable  promptness,  such  other  information  and data  with
respect to each Borrower or any of its respective  Subsidiaries  as from time to
time may be reasonably requested by any of the Lenders;

     (m) to the extent  requested by any Lender,  as soon as practicable  and in
any event  within  ten days of the later of such  request  and the making of any
such  amendment  or waiver,  copies of  amendments  or waivers  with  respect to
Indebtedness of any Borrower or any of its respective  Subsidiaries  (other than
with respect to Obligations owing to the Lenders hereunder);





<PAGE>






     (n) as soon as  practicable  and in any event within 135 days after the end
of each fiscal year of ASI, with respect to each Borrower  (other than ASI), (i)
the combined  balance sheet of such Borrower and its  Subsidiaries  and (ii) the
related  combined  statements of income and retained  earnings and cash flows of
such  Borrower  and its  Subsidiaries,  for such fiscal year,  setting  forth in
comparative form the  corresponding  figures as of the end of the previous year,
all in  reasonable  detail,  and  accompanied  by a  certificate  of  the  chief
financial  officer  (or,  if there is no chief  financial  officer,  the officer
functioning as the chief financial  officer) and chief accounting officer of ASI
to the effect that they fairly present the combined financial  condition of such
Borrower and its Subsidiaries as at the dates indicated and the combined results
of their  operations  and  cash  flows  for the  periods  indicated,  on a basis
consistent with the financial statements of ASI for such periods; and

     (o) as soon as practicable and in any event within 50 days after the end of
each of the  first  three  fiscal  quarters  and 105 days  after the end of each
fiscal  year,  an  Officers'   Certificate  (i)  containing  a  summary  of  any
transactions of the sort referred to in Section  6.02(a)(i),  and any mergers or
transfers of the capital stock or substantially all the assets of any Subsidiary
pursuant to Section  6.02(a)(ii),  which shall have been  completed  during such
quarter and (ii) confirming compliance with Section 6.02 during such quarter.

     SECTION  5.02.  Books,   Records  and  Inspections.   Permit  officers  and
designated  representatives  of any  Lender  to  visit  and  inspect  any of the
properties  or  assets  of  such  Borrower  and  any  of  its   Subsidiaries  in
whomsoever's  possession,  to examine the books of account of such  Borrower and
any of its  Subsidiaries,  to make  copies and take  extracts  therefrom  and to
discuss the affairs,  finances  and accounts of such  Borrower and of any of its
Subsidiaries  with, and be advised as to the same by, its and their officers and
independent accountants, all upon reasonable notice and at such reasonable times
and intervals and to such reasonable extent as such Lender may desire.

     SECTION 5.03. Maintenance of Property; Insurance; Good Repair. At all times
maintain in full force and effect (a)  insurance  in such  amounts and  covering
such risks and liabilities as are in accordance with normal industry practice in
the applicable  area, (b) insurance as may be required to comply in all material
respects with any Prior  Property  Document and (c) insurance as may be required
to comply in all material  respects  with any  Mortgage and each such  insurance
policy shall name the Collateral Agent as an additional insured thereunder. Each
Borrower  and each of its  Subsidiaries  will  comply  with all  Prior  Property
Documents.  Each  Borrower  and each of its  Subsidiaries  will  ensure that all
property and  equipment  used in or useful or necessary to its business are kept
in good repair, working order and condition (normal wear and tear excepted), and
that from time to time there are made to such property and equipment all needful
and proper repairs, renewals, replacements,  extensions,  additions, betterments
and  improvements  thereto,  to  the  extent  and in the  manner  customary  for
companies in similar businesses. Each Borrower and each of its Subsidiaries will
maintain with financially sound and reputable  insurance  companies insurance on
all its properties,  as described above,  and will furnish to each Lender,  upon
written request,  information as to the insurance  carried,  and will not cancel
any such insurance without the consent of the Administrative Agent.

     SECTION 5.04.  Payment of Taxes and Claims.  Pay and discharge all foreign,
federal,  state or local taxes,  assessments and governmental  charges or levies
imposed upon it or upon its income or profits, or upon any properties  belonging
to it,  prior to the date on which  penalties  attach  thereto,  and all  claims
(including claims for labor, services, materials and supplies) which, if unpaid,
might  become a lien or charge  upon any assets of such  Borrower  or any of its
Subsidiaries;  provided,  that neither such Borrower nor any Subsidiary shall be
required to pay any such tax,  assessment,  charge, levy or claim which is being
contested  in good  faith  and by proper  proceedings  promptly  instituted  and
diligently  conducted if it maintains  adequate reserves with respect thereto in
accordance with GAAP.

     SECTION 5.05. Consolidated Corporate Franchises. Do or cause to be done all
things  necessary to preserve  and keep in full force and effect its  existence,
rights and  authority,  and  franchises  material  to its  respective  business;
provided that any  transaction  permitted by Section 6.02 will not  constitute a
breach of this Section 5.05.






<PAGE>





     SECTION 5.06.  Compliance  with Statutes,  etc.  Comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
any Governmental  Authority  (including those referred to in Section 6.14) other
than those the  non-compliance  with which would not have a  Materially  Adverse
Effect.

     SECTION  5.07.  ERISA.  (a)  Comply  in  all  material  respects  with  the
applicable  provisions of ERISA (except where noncompliance could not reasonably
be expected to result in a Materially Adverse Effect) and (b) furnish to each of
the Lenders (i) as soon as  possible,  and in any event within 10 days after any
Borrower or any ERISA Affiliate of any Borrower knows or has reason to know that
any  Reportable  Event  has  occurred  that  alone or  together  with any  other
Reportable  Event could  reasonably  be expected to result in  liability  of any
Borrower to the PBGC in an aggregate amount exceeding  $10,000,000,  a statement
of the  chief  financial  officer  of  ASI  setting  forth  details  as to  such
Reportable  Event  and the  action  that any  Borrower,  any  Subsidiary  of any
Borrower or any ERISA  Affiliate of any Borrower is required or proposes to take
with  respect  thereto,  together  with a copy of the  notice,  if any,  of such
Reportable Event given to the PBGC, (ii) promptly after receipt thereof,  a copy
of any notice any  Borrower or any ERISA  Affiliate  of any Borrower may receive
from the PBGC  relating to the  intention of the PBGC to  terminate  any Pension
Plan or Plans (other than a Pension Plan  maintained by an ERISA Affiliate which
is considered  an ERISA  Affiliate  only  pursuant to  subsection  (m) or (o) of
Section 414 of the Code) or to appoint a trustee to administer  any such Pension
Plan,  (iii) within 10 days after the due date for filing with the PBGC pursuant
to Section 412(n) of the Code a notice of failure to make a required installment
or other  payment  with  respect to a Pension  Plan,  a  statement  of the chief
financial officer of ASI setting forth details as to such failure and the action
that any Borrower,  any Subsidiary of any Borrower or any ERISA Affiliate of any
Borrower is required or proposes to take with respect  thereto,  together with a
copy of any such notice given to the PBGC, (iv) promptly and in any event within
10 days after  receipt  thereof by any  Borrower or any ERISA  Affiliate  of any
Borrower  from  the  sponsor  of a  Multiemployer  Plan,  a copy of each  notice
received by any Borrower or any ERISA  Affiliate of any Borrower  concerning (A)
the  imposition  of  Withdrawal   Liability  or  (B)  a  determination   that  a
Multiemployer  Plan is, or is expected to be,  terminated or in  reorganization,
both within the meaning of Title IV of ERISA and (v)  promptly  and in any event
within 10 days after any  Borrower  knows that any  unfunded  liability  that is
likely to have a  Materially  Adverse  Effect  has  arisen  with  respect to any
Foreign  Pension  Plan,  a  certificate  of the chief  financial  officer of ASI
setting forth details as to such  occurrence and such action,  if any, which any
Borrower,  any Subsidiary of any Borrower or any ERISA Affiliate of any Borrower
is required or proposes to take,  together with any notices required or proposed
to be filed with or by any Borrower, any Subsidiary of any Borrower or any ERISA
Affiliate of any Borrower,  a Governmental  Authority or the plan  administrator
with  respect  thereto.  Upon  the  request  of the  Administrative  Agent,  the
Borrowers will deliver to the  Administrative  Agent a copy of the annual report
(Form 5500) of each Pension Plan required to be filed with the Internal  Revenue
Service.  In addition to any  certificates  or notices  delivered to the Lenders
pursuant to subsection (b) of this Section 5.07,  copies of any notices received
by any Borrower or any Subsidiary of any Borrower or any ERISA  Affiliate of any
Borrower required to be delivered to the Lenders hereunder shall be delivered to
the  Lenders  no later  than 10 days  after the date each such  notice  has been
received  by  any  Borrower  or any  Subsidiary  of any  Borrower  or any  ERISA
Affiliate of any Borrower.

     SECTION 5.08. Performance of Obligations.  Perform in all material respects
all of its  material  obligations  under  the terms of each  material  mortgage,
indenture,  security agreement, other debt instrument and contract and agreement
by which it is bound or to which it is a party or subject  (except as  disclosed
in Schedule 3.17).

     SECTION 5.09.  Waiver of Stay,  Extension or Usury Laws. To the full extent
permitted by applicable  law, not at any time insist upon,  or plead,  or in any
manner whatsoever claim or take the benefit or advantage of, and actively resist
any attempts to claim the benefit of any stay or extension  law or any usury law
or other law, which would prohibit or forgive any of them from paying all or any
portion of the  principal  of and/or  interest  on the Loans,  Fees,  Letters of
Credit and the Obligations,  wherever  enacted,  now or at any time hereafter in
force, or which may affect the covenants or the performance of this Agreement or
the other Credit  Documents;  furthermore,  each Borrower and  Guarantor  hereby
expressly waives, to the full extent permitted by applicable law, all benefit or
advantage of any such law,  and  covenants  that they will not hinder,  delay or
impede the execution of any power herein granted to the





<PAGE>





Lenders but will suffer and permit the  execution  of every such power as though
no such law had been enacted.

     SECTION 5.10.  Security  Interests.  (a) Perform and cause its Subsidiaries
which are Credit  Parties to perform  any and all acts and  execute  any and all
documents  (including  the  execution,   amendment  or  supplementation  of  any
financing  statement and  continuation  statement or other statement) for filing
under the provisions of the UCC and the rules and regulations thereunder, or any
other statute, rule or regulation of any applicable foreign,  federal,  state or
local  jurisdictions  including  any  filings  in the United  States  Patent and
Trademark  Office or similar foreign office,  which are necessary (or reasonably
requested by the  Collateral  Agent),  from time to time,  in order to grant and
maintain in favor of the Collateral Agent for the ratable benefit of the parties
named in the applicable  Security Documents as beneficiaries  thereof a security
interest in each item of the  Collateral  of the type and priority  described in
the relevant Security Document,  perfected to the extent contemplated by Section
3.09.

     (b) Deliver or cause to be  delivered to the Lenders from time to time such
other documentation, consents, authorizations,  approvals and orders in form and
substance  satisfactory to the Collateral  Agent, as the Collateral  Agent shall
deem reasonably  necessary or advisable to perfect or maintain the Liens created
by the Security Documents for the benefit of the Lenders, including assets which
are required to become Collateral after the Effective Date.

     SECTION  5.11.  After  Acquired  Real  Properties.  Without  affecting  the
obligations of the Borrowers under any of the Security  Documents,  in the event
that any Borrower or Subsidiary  at any time after the date hereof  acquires any
interest in any real property in the United States of America,  Canada, Germany,
France,  the  United  Kingdom  or the  Netherlands,  including  any fee or other
ownership interest in one or more properties with an aggregate cost in excess of
$10,000,000,  or any  interest  under one or more leases of real  property for a
term in excess of ten years and involving  aggregate  average payments in excess
of $1,000,000 per annum (each such interest,  an "After Acquired Property"),  as
soon as practical  provide written notice thereof to the  Administrative  Agent,
setting forth with  specificity a description of such After  Acquired  Property,
the location of such After Acquired  Property,  any  structures or  improvements
thereon and an appraisal or its good-faith estimate of the current value of such
After  Acquired  Property  ("Current  Value").  The  Administrative  Agent shall
provide  notice to ASI of whether it intends to cause such Borrower to grant and
record a Mortgage on such After Acquired Property; provided that no new Mortgage
on such After  Acquired  Property  shall be  required if the costs that would be
incurred as a result  thereof are  excessive  in relation to the  benefits  that
would be conferred  thereby.  In such event,  such Borrower or Subsidiary  shall
execute and deliver to the Administrative  Agent a Mortgage,  together with such
of the documents or instruments  described in Section 5.10 as the Administrative
Agent shall require.  In no event shall the title insurance  policy for any such
After Acquired  Property in the United States or Canada be in an amount which is
less than the Current Value of such After Acquired  Property.  Such property may
be subject to a prior  mortgage to the extent such prior  mortgage is  otherwise
permitted  by  Section  6.03.  The  Borrowers  shall pay all fees and  expenses,
including  reasonable  attorneys' fees and expenses or the reasonable  allocated
costs of  Administrative  Agent's  internal  counsel,  and all  title  insurance
charges and premiums, in connection with their obligations under this Section.

     SECTION 5.12.  Future  Guarantors.  (a) Promptly upon any person becoming a
direct or indirect Domestic  Subsidiary  (other than a Domestic  Subsidiary that
would  not  be  a  Designated  Subsidiary,  or  that  would  be  a  Non-Material
Subsidiary)  or upon a Domestic  Subsidiary  that is a Designated  Subsidiary no
longer  meeting the  criteria  for being a  Non-Material  Subsidiary,  or upon a
Domestic Subsidiary that is not a Non-Material  Subsidiary becoming a Designated
Subsidiary,  (i)  such new or  existing  Domestic  Subsidiary  shall  execute  a
guarantee  of  all  of  the   obligations   owing  to  the  Lenders   hereunder,
substantially  in the form of the  Supplemental  Guarantee  attached  hereto  as
Exhibit  I-  1,  and  enter  into  a  Supplemental   Security  Agreement  and  a
Supplemental  Securities  Pledge  Agreement  (under  which shares of any Foreign
Subsidiary  pledged  by  ASI or  any  Domestic  Subsidiary  to  secure  Domestic
Obligations will not exceed 65% of such Foreign  Subsidiary's voting capital) in
respect of its obligations  under such  Supplemental  Guarantee in such forms as
the Administrative Agent may reasonably require, to the fullest extent permitted
by  applicable  law, and (ii)  Holding and ASI shall ensure that any  Subsidiary
holding  shares of capital  stock of such new or  existing  Domestic  Subsidiary
shall (unless such Subsidiary is already a Subsidiary  Guarantor and such shares
are pledged to the Collateral





<PAGE>





Agent under an existing Security  Document) enter into a Supplemental  Guarantee
substantially  in the form of Exhibit I-1 and a Supplemental  Securities  Pledge
Agreement, in such form as the Administrative Agent may reasonably require, with
such changes in each thereof as shall be permitted by Section  10.10 or required
by this Section 5.12 (all such Supplemental  Guarantees,  Supplemental  Security
Agreements  and  Supplemental  Securities  Pledge  Agreements  collectively  the
"Supplemental  Documents");  provided that no new Supplemental Document shall be
required,  or the form of such Supplemental  Document shall be modified,  to the
extent  required to avoid (x) any violation of  applicable  law or material risk
thereof or (y) any  violation of the  provisions  of any joint  venture or other
material  agreement  governing  or binding  such  Domestic  Subsidiary  or other
Subsidiary  or any  material  risk  thereof.  Any Domestic  Subsidiary  or other
Subsidiary  that cannot  execute a Supplemental  Document or whose  Supplemental
Document  must be amended for the  foregoing  reasons  shall  promptly  upon any
change of law or waiver or lapse of the applicable contractual restriction enter
into a  Supplemental  Document or amend the  existing  Supplemental  Document to
comply with this Section 5.12(a) in a manner  satisfactory to the Administrative
Agent.  Notwithstanding  any other  provision of this  paragraph (a), no Finance
Subsidiary  or  Unified  Receivables  Company  shall be  required  to execute or
deliver any Supplemental Document.

     (b)  Promptly  upon any  person  becoming  a  direct  or  indirect  Foreign
Subsidiary  (other  than a Foreign  Subsidiary  that  would not be a  Designated
Subsidiary,  or that  would  be a  Non-Material  Subsidiary)  or upon a  Foreign
Subsidiary  that is a Designated  Subsidiary no longer  meeting the criteria for
being a  Non-Material  Subsidiary,  or upon a Foreign  Subsidiary  that is not a
Non-Material  Subsidiary  becoming  a  Designated  Subsidiary,  (i)  such new or
existing Foreign  Subsidiary shall execute a guarantee of all of the obligations
(other  than  the  Domestic   Obligations)   owing  to  the  Lenders  hereunder,
substantially  in the form of the  Supplemental  Guarantee  attached  hereto  as
Exhibit I-2 and enter into a Supplemental  Security  Agreement and  Supplemental
Securities  Pledge  Agreement  in such  form  as the  Administrative  Agent  may
reasonably  require  in  respect  of its  obligations  under  such  Supplemental
Guarantee, (ii) Holding and ASI shall procure that any Subsidiary holding shares
of capital stock in such new or existing  Foreign  Subsidiary shall (unless such
Subsidiary is already a Subsidiary  Guarantor and such shares are pledged to the
Collateral Agent under an existing Security  Document) enter into a Supplemental
Guarantee and a  Supplemental  Securities  Pledge  Agreement in such form as the
Administrative  Agent may reasonably require,  which agreement shall, subject to
the proviso below, grant a perfected security interest in the Securities held by
such  Subsidiary  (to the fullest  extent  permitted by applicable law but under
which shares of any such Foreign Subsidiary pledged by a Foreign Subsidiary will
not  secure  Domestic  Obligations  and  shares of any such  Foreign  Subsidiary
pledged by ASI or a Domestic Subsidiary will not secure Domestic  Obligations to
the extent such shares  exceed 65% of the  issuer's  voting  capital)  with such
changes in each thereof as are  permitted  by Section  10.10 or required by this
Section  5.12  (all  such  Supplemental   Guarantees,   Supplemental  Securities
Agreements and Supplemental  Securities  Pledge  Agreements  being  collectively
called the  "Foreign  Supplemental  Documents");  provided  that no new  Foreign
Supplemental Document shall be required or the form of such Foreign Supplemental
Document shall be modified, to the extent required to avoid (v) any violation of
applicable law, (w) liability of the officers, directors or shareholders of such
Foreign  Subsidiary,  (x)  violation of the  provisions  of any joint venture or
other  material  agreement  governing or binding such Foreign  Subsidiary or its
subsidiaries,  (y) material  risk of any of the foregoing or (z) costs which the
Administrative Agent shall determine to be excessive in relation to the benefits
that would be  conferred  by such  Foreign  Supplemental  Document.  Any Foreign
Subsidiary that cannot execute a Foreign Supplemental  Document or whose Foreign
Supplemental  Document must be modified for the foregoing reasons shall promptly
upon  any  change  of law or  waiver  or  lapse  of the  applicable  contractual
restriction  enter into a Foreign  Supplemental  Document or amend the  existing
Foreign  Supplemental  Document to comply with this Section  5.12(b) in a manner
satisfactory to the Administrative Agent.

     SECTION 5.13.  Consents,  Approvals,  etc. The  Borrowers  shall obtain all
consents,  waivers and  approvals  listed on Schedule  3.05  hereto,  as soon as
possible.






<PAGE>





     SECTION 5.14.  German Real Estate.  The German Borrower shall cause each of
Ideal  Standard  GmbH and WABCO GmbH (a) to  continue  to own all Real  Property
situated  in Germany  currently  owned by it (other than  immaterial  parcels no
longer  used or useful in the  business of the German  Borrower)  and (b) not to
incur, create,  assume or permit to exist any liabilities in respect of which it
is an obligor except liabilities in the nature of:

     (a) taxes,  duties,  levies,  imposts,  assessments  or other  governmental
charges;

     (b) pension liabilities existing at the date hereof;

     (c) Intercompany  Indebtedness  arising out of loans and advances permitted
by Section 6.05;

     (d) other  ordinary  course  liabilities,  not related to the  borrowing of
money or  obtaining  of credit,  related to the  Belgian  sales  office of Ideal
Standard GmbH;

     (e) payables in connection with general  administrative  expenses,  such as
lawyers and accountants; and

     (f) payables in connection with capital  investments in plant and equipment
leased to the German Borrower.

     B. Each Borrower that is a party to this Agreement other than ASI covenants
and  agrees  that  on and  after  the  Effective  Date,  and for so long as this
Agreement is in effect and until the  Commitments  have been  terminated and the
Loans, together with interest,  Fees and all other Obligations have been paid in
full,  and all  Letters of Credit  have been  canceled  or have  expired and all
amounts  drawn  thereunder  have been  reimbursed  in full,  unless the Required
Lenders shall otherwise give written  consent,  it will not take or refrain from
taking any action as a result of which a Default  would  occur  under any of the
covenants set forth in this Article V.


                                   ARTICLE VI

                               NEGATIVE COVENANTS

A. ASI  covenants and agrees that on and after the  Effective  Date,  and for so
long as this  Agreement  is in  effect  and  until  the  Commitments  have  been
terminated and the Loans, together with interest, Fees and all other Obligations
have been paid in full,  and all  Letters of Credit  have been  canceled or have
expired and all amounts drawn  thereunder have been  reimbursed in full,  unless
the Required Lenders shall otherwise give written  consent,  neither ASI nor any
of its Subsidiaries will:

     SECTION  6.01.  End of Fiscal Year.  In the case of ASI,  change its fiscal
year end from that in effect at December 31, 1993.

     SECTION  6.02.  Consolidation,  Merger or Sale or Purchase  of Assets.  (a)
Liquidate, dissolve or wind up its affairs, or merge with or into or consolidate
with any other person,  or sell,  lease or otherwise  transfer any of its assets
(including the capital stock of any Subsidiary), or purchase, lease or otherwise
acquire any of the assets of any other  person,  or agree to do or suffer any of
the foregoing, except that:

     (i) so long as all the  Intercompany  Merger and Transfer  Conditions  have
been satisfied,

(A) any Subsidiary (except members of the EEIG Borrower) may merge with or into,
consolidate with or liquidate into another Subsidiary;

(B) any Subsidiary (except members of the EEIG Borrower) may merge with or into,
consolidate with or liquidate into ASI;






<PAGE>





     (C) ASI or any Subsidiary may transfer assets to any Designated Subsidiary;
and

     (D)  members  of the EEIG  Borrower  organized  under  the laws of a single
jurisdiction may merge or consolidate with one another;

     (ii) ASI or any  Subsidiary  may  transfer  assets to  persons  other  than
Designated Subsidiaries (including through mergers of Non-Borrower Subsidiaries,
but not of Borrowers,  with such persons or their  subsidiaries and through sale
and leaseback transactions permitted under Section 6.13) so long as (1) any such
transfer or transfers for consideration in excess of $15,000,000 individually or
$50,000,000  in the  aggregate  during  any  fiscal  year of ASI shall have been
approved in writing by the Required Lenders, (2) ASI or such Subsidiary,  as the
case may be, shall receive as  consideration  for each such transfer cash and/or
Securities  with a fair  market  value  at  least  equal  to that of the  assets
transferred,  (3) the aggregate amount of Securities received in connection with
all such transfers after the date hereof and held by ASI and its Subsidiaries at
any time  shall not  exceed  $5,000,000,  (4) any such cash  shall be applied to
prepay  Loans to the extent  required by Section  2.11 and (5) to the extent any
such assets were pledged under the Security Documents to secure any Obligations,
any Securities  received as consideration  therefor shall be likewise pledged to
secure the same Obligations;

     (iii) ASI or any Subsidiary may transfer or acquire inventory, supplies and
equipment  and acquire  other  personal  property,  in each case in the ordinary
course  of  business,  and  may  grant  or  acquire  rights  in or  licenses  to
intellectual  property and related general intangibles in the ordinary course of
business;

     (iv) so long as no Default or Event of Default  shall have  occurred and be
continuing at the time of or after giving effect to any such  transactions:

     (A) ASI and its Domestic  Subsidiaries  may sell  receivables  as part of a
Permitted  Receivables  Financing if the Net Cash Proceeds therefrom are applied
as provided in Section 2.11(d);

     (B)   Subsidiaries  of  ASI  in  any  jurisdiction  may  sell  or  discount
receivables in financing  transactions  customary in such jurisdiction,  entered
into in the ordinary  course of business and consistent  with the past practices
of such  Subsidiaries,  to persons  other  than  Affiliates;  provided  that the
aggregate  book value of the  receivables  so sold during any fiscal year of ASI
(other than by  Subsidiaries  organized and doing  business in France,  Italy or
Spain) shall not exceed  $10,000,000  or the  equivalent  in one or more foreign
currencies; and

     (C) ASI or any Subsidiary may sell or discount  without recourse to persons
other than Affiliates any note received as consideration for a sale of assets if
the Net Cash  Proceeds of each such sale or  discount  are applied to the extent
required by Section 2.11(d);

     (v) ASI or any  Subsidiary may sell or dispose of assets which are obsolete
or no longer useful in any of its businesses;

     (vi) ASI or any Subsidiary may liquidate Cash  Equivalents and Foreign Cash
Equivalents;

     (vii) ASI or any Subsidiary may donate or otherwise convey (1) its inactive
manufacturing  facility in  Louisville,  Kentucky and (2) other  property with a
book value or fair market value  (whichever is less) not greater than $1,000,000
in the aggregate during any fiscal year to any  governmental  body or charitable
institution;

     (viii) ASI or any Subsidiary may (1) make Capital Expenditures  (determined
without giving effect to clause (I) of the further  proviso in the definition of
"Capital  Expenditures"),  (2) enter  into and  perform  its  obligations  under
Capital Leases and Operating Leases to the extent permitted by Sections 6.04 and
6.06, (3) make Investments permitted by Section 6.05, (4) make Restricted Junior
Payments or other dividends,  distributions  or share  repurchases to the extent
not prohibited by Section 6.08,  (5) contribute  capital stock of Holding to the
ESOP, or make payments in the nature of contributions to the





<PAGE>





ESOP (or payments to Holding  which are promptly  contributed  by Holding to the
ESOP),  if such  payments  (x) are paid by the ESOP to Holding  as the  purchase
price for  common  stock of  Holding  and  promptly  applied  by Holding to make
contributions  to the  capital  of ASI,  (y) are  applied  by the  ESOP to repay
advances  made to the ESOP by ASI or (z) are in  amounts  not in excess of those
required  to  satisfy  the  obligations  of  participating   employers  to  make
contributions  to the ESOP  based on the  terms of the ESOP as in  effect on the
Effective  Date and are applied by the ESOP to acquire  common  stock of Holding
from any holder  thereof  in an open  market or other  purchase  for a price per
share not greater  than the current  market  price per share at the time of such
acquisition,  and (6) incur  Indebtedness  and Liens to the extent  permitted by
Sections 6.03 and 6.04,  and pay and discharge  other  obligations to the extent
not prohibited under other provisions of this Agreement; and

     (ix) ASI or any  Subsidiary  may engage in the  transactions  described  in
Schedule 6.02.

     (b) Upon the sale or transfer to a person  other than an  Affiliate  of all
capital stock of a Non-Borrower  Subsidiary in accordance with the terms of this
Section, such Subsidiary shall be released from its obligations under the Credit
Documents  and all Liens on the  assets  of such  Subsidiary  arising  under the
Security  Documents  shall  without  further act be  released.  Upon the sale or
transfer to a person other than Holding,  any Borrower or any  Subsidiary of any
asset in  accordance  with the terms of this  Section,  all Liens on such  asset
arising  under the Security  Documents  shall  without  further act be released.
Except as expressly  provided  herein,  no sale or transfer of capital  stock or
assets to any  Borrower or  Subsidiary  which shall be permitted by this Section
shall  result in or  require  the  release  of any Lien on such  stock or assets
existing  under the Security  Documents  (except that (i) where any such capital
stock or assets are to be  subjected  at the time of transfer to the Lien of the
Security Documents to which the transferee is party, the Collateral Agent shall,
at the request of ASI, release such capital stock or assets from the Lien of any
other Security  Documents to which the transferor is party,  (ii) in the case of
the merger of constituent corporations whose stock is subject to the Lien of the
Security  Documents,  such  Lien on the stock of the  non-surviving  corporation
shall be released upon the consummation of such merger,  provided that the stock
of the  surviving  corporation  shall be  subject  to the  Lien of the  Security
Documents,  and (iii) in the case of a sale by ASI and its Domestic Subsidiaries
as  part  of  a  Permitted  Receivables  Financing  in  accordance  with  clause
(a)(iv)(A)  above, such Lien on the receivables which are part of such Permitted
Receivables Financing shall be released upon the consummation  thereof), and ASI
and the  Subsidiaries  shall take all such actions in  connection  with any such
transfer as shall be required to maintain the perfection of each such Lien.

     SECTION 6.03. Liens. Directly or indirectly create, incur, assume or suffer
or  permit  to exist any Lien upon or with  respect  to any of its  property  or
assets,  whether now owned or hereafter acquired, or assign any right to receive
income, or file or permit the filing of any financing statement under the UCC or
any other similar  notice of Lien under any similar  foreign,  domestic or local
recording or notice statute, except:

     (a) Permitted Encumbrances;

     (b) Liens created by this Agreement or the other Credit Documents;

     (c) in the case of any Real  Property  that is or should  (pursuant  to the
terms hereof) be subject to a Mortgage, such Mortgage and Liens permitted by the
terms of such Mortgage;

     (d) Liens  existing on the date hereof and  described in Schedule  3.12(a);
provided that such Liens shall secure only those  obligations  which they secure
on the date hereof;

     (e) Liens securing the purchase price, or Indebtedness  incurred to finance
the purchase, of property,  plant or equipment acquired after the date hereof to
the extent  such Liens  attach only to such  property,  plant or  equipment  and
improvements and accretions thereto;

     (f) Liens deemed to exist in connection with sales of receivables permitted
under Section 6.02 and Capital Leases  permitted  under Section 6.04  (including
any related filings of financing statements);






<PAGE>





     (g) customary Liens arising from or created in connection with the issuance
of letters of credit for the account of ASI or any  Subsidiary  permitted  under
Section  6.04(h);  provided  that in each case such Liens  apply only to the raw
materials,  inventory, machinery or equipment in connection with the purchase of
which such  letter of credit was issued or to the  balance of any account of the
account  party in respect of such  letter of credit with the bank  issuing  such
letter of credit;

     (h) Liens on assets of Subsidiaries which are not Designated  Subsidiaries,
granted to secure  Indebtedness  of such  Subsidiaries  incurred  after the date
hereof that is permitted by Section 6.04(i);

     (i) Liens deemed to exist in  connection  with  Investments  in  repurchase
agreements permitted under Section 6.05(a);

     (j)  Liens on  assets  at the time such  assets  are  acquired  by ASI or a
Subsidiary;  provided that such Liens are not created in  contemplation  of such
acquisition;

     (k) Liens on assets  associated  with sales  offices  purchased  from third
parties by ASI or its  Subsidiaries  and  securing  Indebtedness  of ASI or such
Subsidiaries issued as consideration for such purchases;

     (l)  Liens   securing   Intercompany   Indebtedness   to  the  extent  such
Indebtedness  and such Liens have been assigned to the Collateral  Agent for the
benefit of the Lenders  pursuant to the Security  Documents to secure any of the
Obligations;

     (m) in the  case  of  equity  Securities  issued  by a Joint  Venture  or a
Subsidiary  other than a Designated  Subsidiary,  any call or similar right of a
third party that is also an investor in such  Subsidiary  either  existing as of
the date hereof or created  after the date  hereof,  but only to the extent that
such rights  created  after the date  hereof do not relate to equity  Securities
having an aggregate  value in excess of  $1,000,000;  and, in the case of equity
Securities issued by a Joint Venture or Subsidiary, nominee, trust or directors'
qualifying shares or similar  arrangements  designed to satisfy  requirements of
applicable local laws;

     (n)  Liens on  assets  of any  person  at the time  such  person  becomes a
Subsidiary;  provided that such Liens are not created in  contemplation  of such
person becoming a Subsidiary;

     (o)  Liens  on cash  deposits  subject  to Cash  Pooling  Arrangements  and
securing liabilities of Foreign Subsidiaries participating therein and permitted
by clause (t) of Section 6.04; and

     (p) other Liens securing  obligations in an aggregate  amount not to exceed
$1,000,000 at any time outstanding.

     SECTION 6.04.  Indebtedness.  Incur, create,  assume or permit to exist any
Indebtedness except:

     (a) the Obligations;

     (b) the Indebtedness of ASI outstanding on the date hereof under the Senior
Indentures;

     (c) the obligations of ASI in respect of the Subordinated Securities;

     (d)  Indebtedness of ASI the Net Cash Proceeds of which are used to finance
the  acquisition,  redemption or prepayment of  Indebtedness so long as such new
Indebtedness is subordinated to the Obligations to at least the same extent,  if
any, and is otherwise on terms (including maturity,  interest rate, amortization
and prepayment and redemption  requirements,  and, in the good faith judgment of
ASI,  covenants  and events of  default)  at least as  favorable  to ASI and the
Lenders, as the Indebtedness being acquired, redeemed or prepaid;






<PAGE>





     (e) the  obligations  of ASI and its  Subsidiaries  (including  any Finance
Subsidiary) in connection  with sales of receivables  permitted by paragraph (A)
or  (B) of  Section  6.02(a)(iv),  to the  extent  such  obligations  constitute
Indebtedness;

     (f) Intercompany  Indebtedness  arising out of loans and advances permitted
under Section 6.05;

     (g)  obligations  of ASI and its  Subsidiaries  in respect of Interest Rate
Protection Agreements,  Currency Protection Agreements and commodity purchase or
option  agreements  entered  into in order to  manage  existing  or  anticipated
interest rate,  exchange rate or commodity  price risks and not for  speculative
purposes;

     (h)  obligations of ASI and its  Subsidiaries as account parties in respect
of letters of credit obtained in the ordinary course of business in an aggregate
undrawn  amount  not  greater  than  $25,000,000  at any time and in the case of
Subsidiaries  which are not Credit  Parties,  or of ASI's  Mexican and Brazilian
Subsidiaries, permitted at the time of such incurrence under clause (o) below;

     (i)  Indebtedness  of  Subsidiaries  contemplated  by Section 6.03(h) in an
aggregate principal amount at any time outstanding not greater than $25,000,000;

     (j)  Indebtedness  in a principal  amount not greater than  $75,000,000 and
with a weighted  average life to maturity at  inception  greater than five years
incurred to finance the construction and acquisition of the Louisiana Facility;

     (k) Indebtedness incurred to finance Capital Expenditures and Capital Lease
Obligations;

     (l) purchase money  Indebtedness in an aggregate amount  outstanding at any
time not greater than $20,000,000 incurred in connection with the acquisition by
ASI and its Subsidiaries of sales offices not constituting Capital Expenditures;

     (m)  Indebtedness  of  Subsidiaries   existing  at  the  time  they  become
Subsidiaries and not incurred in contemplation of their becoming Subsidiaries;

     (n)  Indebtedness of ASI to Holding in a principal  amount not greater than
$10,000,000;

     (o) other  unsecured  Indebtedness  of  Subsidiaries  which are not  Credit
Parties,  or of  ASI's  Mexican  and  Brazilian  Subsidiaries,  in an  aggregate
principal amount at any time outstanding  which,  together with the Indebtedness
referred to in clause (h) above (to the extent such Indebtedness  referred to in
clause (h) above constitutes  Indebtedness of Subsidiaries  which are not Credit
Parties or Indebtedness of ASI's Mexican or Brazilian  Subsidiaries)  and clause
(p) below, is not in excess of $125,000,000;  provided that, except as permitted
by clause (s)  below,  such  Indebtedness  shall not be  Guaranteed  by, and the
holders of such  Indebtedness  shall not otherwise  have recourse to, ASI or any
other Credit Party (other than such Mexican and Brazilian Subsidiaries);

     (p)  Indebtedness  of Credit  Parties  incurred  before they became  Credit
Parties (and not incurred in contemplation of their becoming Credit Parties) and
permitted at the time of such incurrence under clause (o) above;

     (q)  Guarantees  in  the  nature  of  obligations  on  the  part  of ASI to
repurchase  unused  and  not  obsolete  inventory  of  independent  dealers  and
wholesalers in connection with the Unified  Receivables  Program in an aggregate
amount at any time in effect not to exceed  $150,000,000 during fiscal year 1995
and, during each fiscal year thereafter,  110% of the aggregate amount permitted
during the preceding fiscal year;






<PAGE>





     (r)  Indebtedness of Credit Parties (other than ASI's Mexican and Brazilian
Subsidiaries) existing on the date hereof and set forth on Schedule 6.04;

     (s)   Guarantees   existing  on  the  date  hereof  by  Credit  Parties  of
Indebtedness referred to in clause (o) above, as set forth on Schedule 6.04, and
additional unsecured  Indebtedness  incurred by Credit Parties (other than ASI's
Mexican and Brazilian  Subsidiaries) after the date hereof (including additional
unsecured Guarantees of Indebtedness referred to in clause (o) above),  provided
that such  Indebtedness  incurred after the date hereof shall not be incurred in
an aggregate  principal amount exceeding  $10,000,000  during any fiscal year of
ASI;

     (t)   Indebtedness  in  connection  with  overdrafts   under  Cash  Pooling
Arrangements not exceeding $15,000,000 in any jurisdiction; and

     (u)  obligations of ASI in respect of letters of credit  supporting  and/or
Guarantees of the  Indebtedness of LDC Holding  Companies in an aggregate amount
not greater than $50,000,000.

     SECTION 6.05. Advances,  Investments and Loans. Directly or indirectly make
or own any Investment in any person or enter into any Joint Venture, except for:

     (a) Investments in Cash Equivalents and Foreign Cash Equivalents;

     (b)  Investments  in  receivables  owing  to ASI and its  Subsidiaries  and
payable  or   dischargeable  in  accordance  with  customary  trade  terms,  and
Investments in an amount not to exceed  $15,000,000  in the Unified  Receivables
Company;

     (c) Intercompany  Indebtedness  incurred in the ordinary course of business
and either consistent with the past practices of ASI and its Subsidiaries or for
cash  management  purposes;  provided that (i) if the obligee in respect of such
Indebtedness  has entered into or is required to enter into one or more Security
Documents  or (if the  pledge of such  Indebtedness  would not entail any of the
consequences  referred  to in the  provisos  to  Section  5.12(a)  and  (b),  as
applicable) a pledge of or security interest in such Indebtedness, subject to no
other Liens except as described in Schedule 3.12(a),  shall have been created in
favor of the  Collateral  Agent for the benefit of the Lenders  pursuant to such
Security Documents or other security  agreements  satisfactory to the Collateral
Agent; and (ii) the amount of Intercompany  Indebtedness consisting of loans and
advances by Credit  Parties to  Subsidiaries  which are not Credit Parties shall
not exceed  $5,000,000 in the case of any one loan or advance or  $25,000,000 in
the aggregate at any time;

     (d) Investments  received as consideration in connection with or arising by
virtue of any merger, consolidation,  sale or other transfer of assets permitted
under Section 6.02;

     (e)   Investments   received  in   connection   with  the   bankruptcy   or
reorganization  of suppliers  and  customers  and in  settlement  of  delinquent
obligations of, and other disputes with,  customers and suppliers arising in the
ordinary course of business;

     (f) other  Investments by ASI or any Subsidiary in Designated  Subsidiaries
(or in  Subsidiaries  of ASI that as a  result  of any  such  Investment  become
Designated  Subsidiaries)  that are Subsidiaries of or part of the same Borrower
Group as the  investor;  provided  that  the sum  (without  duplication)  of (i)
Investments  by Credit Parties in  Subsidiaries  that are not Credit Parties and
(ii) Investments by Subsidiaries the capital stock of which is pledged under the
Security  Documents in Subsidiaries the capital stock of which is not so pledged
shall not exceed $2,000,000  individually or $10,000,000  during any fiscal year
of ASI;

     (g) Investments in or contributions to employee benefit plans of ASI;

     (h) the purchase by ASI of shares of the capital  stock of Holding from the
ESOP for cash in an amount not to exceed $10,000,000; provided that such cash is
applied by the ESOP upon its receipt  thereof to repay advances made to the ESOP
by ASI;





<PAGE>






     (i)  advances to Holding or  Investments  in common stock of Holding to the
extent  permitted under Section  6.08(f),  and advances to Holding to the extent
permitted under Section 6.08(g);

     (j)  Investments  existing  on the date  hereof  in  Subsidiaries  or Joint
Ventures and other Investments listed in Schedule 6.05;

     (k)  Investments  consisting of deposits made in Cash Pooling  Arrangements
permitted under clause (t) of Section 6.04;

     (l) Capital Expenditures (determined without giving effect to clause (I) of
the further proviso in the definition of "Capital Expenditures");

     (m)  Acquisitions of companies,  divisions of companies or similar business
units (or of substantially  all the assets and business of any of the foregoing)
(the  "Acquiree")  engaged in a related  line of  business,  a line of  business
involving the sale of ASI's or its Subsidiaries'  products or a line of business
involving  manufacturing  similar  to  that  currently  employed  by  ASI or its
Subsidiaries  (each  an  "Acquisition")  so long as,  in the  case of each  such
Acquisition,  such  Acquisition  satisfies  the  conditions  set forth in one of
subparagraphs (i) and (ii) below:

     (i) the  consideration  paid in connection with such  Acquisition  consists
solely of common stock of Holding; or

     (ii)  (A)  the  consideration  paid in  connection  with  such  Acquisition
includes such common stock of Holding,  the payment of cash,  the  assumption of
debt or the incurrence of Funded Debt to the  applicable  selling entity (or any
combination of the foregoing) and (B) the aggregate  amount of all cash paid and
Funded Debt so assumed or incurred in connection with such  Acquisition does not
exceed the Redemption Amount;

 provided  that (x) at the time of any such proposed  Acquisition  under the
foregoing  subparagraphs  of this  paragraph  (m) and  immediately  after giving
effect  thereto,  no Event of Default or Default  shall exist  after  giving pro
forma effect to the Acquisition as if such Acquisition had been completed on the
last  day of the  quarter  of the  most  recent  available  quarterly  financial
statements and (y) in the case of any  Acquisition  of any Acquiree  pursuant to
subparagraph  (ii) above for  consideration  totaling  $20,000,000  or more, ASI
shall deliver to the Administrative Agent, as promptly after such Acquisition as
reasonably  practicable,  either  (1) a report  prepared  with  respect  to such
Acquiree in  accordance  with  Statement on Auditing  Standards  No. 35 "Special
Reports--Applying  Agreed Upon Procedures to Specified  Elements,  Accounts,  or
Items of a Financial  Statement" by a nationally  recognized  independent public
accounting  firm or (2) in the case of an Acquiree that files  periodic  reports
with  the  Securities  and  Exchange   Commission  and  whose  annual  financial
statements are audited by a nationally recognized  independent public accounting
firm,  the Form 10-K and Forms 10-Q filed by such  Acquiree  for the most recent
fiscal  year and the four most recent  fiscal  quarters or (3) in the case of an
Acquiree that is not organized or doing business in the United States,  the most
recent audited financial  information  available for such Acquiree for an annual
period; and

     (n)  Investments in LDC Holding  Companies not otherwise  permitted by this
Section 6.05, in an aggregate amount outstanding of not more than $50,000,000 at
any time,  provided that the  reinvestment  by ASI in any LDC Holding Company of
any fees,  royalties or dividends  received in connection with the establishment
and  activities  of such LDC Holding  Company  shall not be included  within the
$50,000,000.

     SECTION  6.06.  Leases.  Directly or  indirectly  become liable in any way,
whether by assignment or as a guarantor or other surety, for obligations to rent
or lease any real or personal  property  if, after giving  effect  thereto,  the
Consolidated Rental Payments of ASI in any fiscal year would exceed





<PAGE>





     (a) for the fiscal year ending December 31, 1995, $60,000,000,  and (b) for
each  subsequent  fiscal year,  an amount equal to 110% of the amount  permitted
during the immediately preceding fiscal year.

     SECTION 6.07. Prepayments of Indebtedness,  etc. Directly or indirectly (a)
amend or modify (or permit the amendment or modification of) any of the terms or
provisions  of the  Indebtedness  described in any of clauses (b) through (e) of
Section 6.04 (other than Indebtedness  described in such clause (e) by reference
to paragraph (B) of Section 6.02(a)(iv)), or any indenture or other agreement or
instrument  related  thereto,  if such amendment or  modification  would add any
covenant or default,  or change the terms of any covenant or default thereunder,
in the good faith  judgment  of ASI,  in a manner  adverse to the issuer of such
Indebtedness, or would shorten the final maturity or average life to maturity or
require any payment to be made sooner than originally  scheduled or increase the
interest rate applicable thereto or change any subordination  provision thereof;
(b) except with the Net Cash Proceeds of any  Indebtedness  permitted by Section
6.04(d),  make (or give any  notice in respect  of) any  voluntary  or  optional
payment or prepayment or redemption or acquisition for value or defeasance of or
exchange any Indebtedness  described in any of clauses (b) through (e) or clause
(j) or (k) of Section 6.04 (other than Indebtedness described in such clause (e)
by  reference  to  paragraph  (B)  of  Section  6.02(a)(iv)),  except  that  (i)
Indebtedness  described  in clause  (j) or (k) of Section  6.04 may be  prepaid,
redeemed or repurchased,  provided that the aggregate amount of cash expended in
connection  therewith shall not exceed  $1,000,000 during any fiscal year of ASI
(except that payments under any Capital Lease  resulting from events of casualty
or obsolescence shall not be deemed prepayments for purposes of this clause (b))
and (ii) Indebtedness  described in any of clauses (b) through (e) or clause (j)
or (k) of Section 6.04 may be prepaid,  redeemed or  repurchased in an aggregate
principal  amount  not  exceeding  the  Redemption  Amount;  provided  that  any
prepayment,  redemption  or  repurchase  otherwise  permitted by this clause (b)
shall not be  permitted at any time that an Event of Default has occurred and is
continuing;  and (c) amend, modify or change the Organizational Documents of ASI
or any  Subsidiary  where such change would be reasonably  likely to result in a
Materially  Adverse Effect or enter into or permit or consent to any stockholder
or similar agreement or arrangement  among holders of any ownership  interest in
ASI or any  Subsidiary  the terms of which grant such  holders the right to veto
any proposed  asset sale that the Board of  Directors of ASI or such  Subsidiary
has  determined  is  advisable in order to avoid or lessen the  likelihood  of a
Default  or Event of  Default  or a default  or breach  under any of the  Credit
Documents  or  the  Senior   Indentures  or  the  indentures   under  which  the
Subordinated Securities are issued.

     SECTION 6.08. Dividends,  etc. Directly or indirectly declare,  order, make
or set apart any sum for or pay any  Restricted  Junior  Payment,  except (a) as
permitted  in  Section  6.07  (or to the  extent  required  to  enable  ASI or a
Subsidiary to make a payment  permitted by Section  6.07);  (b) to make interest
payments on the Subordinated Indebtedness, including payment of accrued interest
and  premium,  if any,  payable  in  connection  with a  redemption  of any such
securities  permitted by Section 6.07; (c) to make regularly scheduled quarterly
dividend  payments on preferred  stock in  additional  shares of such  preferred
stock in accordance  with the terms  thereof or in cash in  accordance  with the
terms  thereof;  (d) ASI and its  Domestic  Subsidiaries  may make  payments  to
Holding equal to their separate federal and state income tax liability, provided
that  Holding  uses such  payments  immediately  to pay such taxes,  and any tax
refund received by Holding is applied to the repayment of any monies advanced by
ASI or its Domestic Subsidiaries to meet such tax payments; (e) advances made or
cash  dividends  paid to Holding which advances or dividends are used by Holding
(i) to  repurchase  Capital  Stock of Holding  from  officers  and  employees of
Holding, ASI or their Subsidiaries (or their estates) upon death,  disability or
termination  of  employment of such officers and employees or to settle for cash
at any time any  rights of an  officer  or  employee  with  respect to any stock
option  or  similar  rights;  provided  that the  aggregate  amount  of all such
repurchases  and  cash  settlements  in  any  calendar  year  shall  not  exceed
$10,000,000  or (ii) for the purposes  referred to in Section  6.02(a)(viii)(5);
(f) advances made or cash  dividends paid to Holding which advances or dividends
are used by Holding to repurchase shares of its common stock, or payments by ASI
to repurchase shares of common stock of Holding,  in each case from participants
who have  received a  distribution  of shares  from the ESOP to the extent  such
participants  have a put right, or ASI or Holding has a call right, with respect
to such shares;  and (g) advances made or cash  dividends  paid to Holding which
advances or dividends  are used to satisfy  liabilities  of Holding  incurred in
compliance  with  Article  VI.B,   including  taxes,   liabilities  incurred  in
connection with the  registration or issuance of its capital stock or compliance
with  reporting  obligations  arising  therefrom,  or customary  indemnification
obligations to officers and directors, provided that such liabilities could have
been  incurred  by ASI  without  violating  this  Agreement.  In addition to any
Restricted Junior Payments permitted by the foregoing





<PAGE>


clauses (a) through (g),  inclusive,  ASI shall be permitted to make  Restricted
Junior Payments in a maximum  aggregate  amount not to exceed the greater of (I)
$10,000,000  in any fiscal  year or (II) in the event the ratio of  Consolidated
Total Debt of ASI to Consolidated EBITDA of ASI is equal to or less than 2.00 to
1 measured as of  December 31 for any  calendar  year,  during the twelve  month
period  commencing on the date of delivery of the financial  statements for such
calendar year pursuant to clause (b) of Section 5.01, in an amount not to exceed
33% of  Consolidated  Net  Income  of ASI  for  such  calendar  year,  it  being
understood that following the initial  Restricted  Junior Payments  permitted by
this clause (II), ASI may continue to make  Restricted  Junior  Payments in each
calendar year  following the year in which such initial  payments are made in an
amount not exceeding 33% of Consolidated Net Income of ASI for the calendar year
preceding such payment in the event that the ratio of Consolidated Total Debt of
ASI to Consolidated EBITDA of ASI is equal to or less than 2.25 to 1 measured as
of December 31 for such calendar  year. No advances made to Holding as permitted
by this  Section  shall be  treated  as  assets of ASI or its  Subsidiaries  for
purposes  of  determining  compliance  with ASI's other  obligations  under this
Agreement.  Notwithstanding the foregoing,  Restricted Junior Payments otherwise
permitted  by this Section 6.08 shall not be permitted at any time that an Event
of Default has occurred  and is  continuing;  provided  that for all purposes of
this Section 6.08 any Restricted  Junior Payment  permitted by this Section 6.08
at the date of its declaration may be paid notwithstanding any subsequent change
in circumstances.

     SECTION 6.09.  Transactions  with Affiliates.  Directly or indirectly enter
into any transaction or series of  transactions,  whether or not in the ordinary
course of  business,  with any  Affiliate  other  than on terms  and  conditions
substantially  as favorable to ASI or such  Subsidiary as would be obtainable by
ASI or such Subsidiary at the time in a comparable arm's-length transaction with
a person  other than an  Affiliate,  except (a) ASI may perform its  obligations
under the Amended and Restated  Stockholders  Agreement,  (b) ASI and any of its
Subsidiaries  may, in the ordinary  course of business,  engage in  transactions
with ASI or its other  Subsidiaries,  as the case may be,  provided that ASI and
its  Subsidiaries  shall not,  pursuant to this  clause (b),  engage in any such
transaction or series of transactions  that would be reasonably likely to result
in a Materially Adverse Effect, (c) the payment of customary and reasonable fees
to any  underwriters  for  underwriting  in  connection  with  the  Transactions
referred  to in  Section  3.04(a)  and  other  public  offerings  of  Securities
permitted  by this  Agreement,  (d) the  payment  of fees  from time to time for
financial  and  consulting  services,  such  fees not to  exceed  the  usual and
customary  fees  for  similar  services,  and  (e)  the  transactions  otherwise
specifically permitted by Sections 6.02, 6.03, 6.04, 6.05, 6.06, 6.07 and 6.08.

     SECTION 6.10.  Consolidated Total Debt to Consolidated EBITDA Ratio. Permit
the ratio of (i)  Consolidated  Total Debt of ASI on any of the dates  indicated
below to (ii)  Consolidated  EBITDA of ASI during the twelve months ended on any
of the dates indicated below, to exceed the ratio indicated with respect to such
date.

Measuring Date                                                           Ratio
Last  day of March in the year  1995                                     4.75:1
Last day of June in the year  1995                                       4.65:1
Last day of September in the year 1995                                   4.35:1
Last day of December in theyear 1995                                     4.00:1 
Last day of March in the year 1996                                       4.10:1 
Last day of June inthe year 1996                                         3.90:1 
Last day of  September  in the year 1996                                 3.70:1
Last day ofDecember  in the year 1996                                    3.50:1 
Last day of March in the year 1997                                       3.60:1 
Lastday of June in the year  1997                                        3:40:1 
Last day of  September  in the year  1997                                3.20:1 
Last day of  December  in the year 1997                                  3.00:1 
Last day of each fiscalquarter in 1998 and thereafter                    2.50:1


                                       
<PAGE>

     In the  event ASI shall  complete,  directly  or  through a  Subsidiary,  a
permitted  Acquisition  (whether or not in reliance on paragraph  (m) of Section
6.05), the ratio of Consolidated Total Debt of ASI to Consolidated EBITDA of ASI
shall be determined  thereafter by computing  such ratio on a pro forma basis as
if such  Acquisition  had been completed on the first day of the relevant twelve
month period  referred to above for each of the dates  indicated above occurring
after the date of such Acquisition.

     SECTION 6.11. Interest Coverage Ratio. Permit the ratio of (i) Consolidated
Free Cash Flow of ASI to (ii) Consolidated Cash Fixed Charges of ASI measured on
each of the  measuring  dates set forth  below,  in each case for the  period of
twelve months ended on such measuring  date, to be less than the ratio indicated
below with respect to such date:

Measuring Date Ratio
Last  day of March in the year  1995                                    2.00:1  
Last day of June in the year  1995                                      2.10:1 
Last day of September in the year 1995                                  2.20:1
Last day of December in theyear 1995                                    2.30:1 
Last day of March in the year 1996                                      2.40:1
Last day of June in the year 1996                                       2.50:1
Last day of  September  in the year 1996                                2.70:1
Last day of December  in the year 1996                                  3.00:1 
Last day of March in the year 1997                                      3.10:1 
Last day of June in the year  1997                                      3.30:1 
Last day of  September  in the year  1997                               3.50:1 
Last day of  December  in the year 1997                                 3.75:1 
Last day of each fiscal quarter in 1998 and thereafter                  3.25:1

     SECTION 6.12.  ERISA. (a) Engage or permit any ERISA Affiliate to engage in
any transaction in connection with which any Borrower or any of its Subsidiaries
or any of their  ERISA  Affiliates  could be subject  to either a civil  penalty
assessed  pursuant to Section 502(i) or (l) of ERISA or a tax imposed by Section
4975 of the Code in either case in an amount which, together with all other such
penalties  or  taxes  incurred  subsequent  to the  date  hereof,  would  exceed
$l,000,000;

     (b) fail or permit any ERISA  Affiliate  to fail to make full  payment when
due of all amounts which, under the provisions of any Pension Plan, any Borrower
or any of its  Subsidiaries or any of their ERISA  Affiliates is required to pay
as  contributions   thereto;   or  permit  to  exist  any  accumulated   funding
deficiencies,  whether or not waived,  with  respect to all Pension  Plans in an
aggregate amount greater than $5,000,000;

     (c) permit the sum of the amount of unfunded  liabilities  with  respect to
all Foreign Pension Plans (excluding each Foreign Pension Plan with an amount of
unfunded liabilities of zero or less) to exceed $50,000,000 or permit the sum of
the amount of unfunded  current  liabilities  under all Pension Plans (excluding
each  Pension  Plan with an amount of unfunded  current  liabilities  of zero or
less) to exceed $100,000,000; or

     (d) fail or permit any ERISA  Affiliate  to fail to make any payments in an
amount  individually  or  in  the  aggregate  greater  than  $1,000,000  to  any
Multiemployer Plan that any Borrower or any of its Subsidiaries, or any of their
ERISA Affiliates,  may be required to make under any agreement  relating to such
Multiemployer Plan, or any law pertaining thereto.




     As used in this Section 6.12, the term "accumulated funding deficiency" has
the meaning  specified in Section 302 of ERISA and Section 412 of the Code,  and
the term "amount of unfunded current  liabilities" has the meaning  specified in
Section 412(1)(8)(A) of the Code.






<PAGE>





     SECTION 6.13.  Sale  Leasebacks.  Directly or  indirectly  become or remain
liable as lessee or as  guarantor  or other  surety  with  respect to any lease,
whether an Operating  Lease or a Capital Lease,  of any assets  (whether real or
personal or mixed) whether now owned or hereafter acquired, (i) which ASI or any
of its  Subsidiaries  has sold or  transferred  or is to sell or transfer to any
other person other than to a Subsidiary  of ASI, or (ii) which ASI or any of its
Subsidiaries  intends  to use for  substantially  the same  purpose as any other
property  which has been sold or is to be sold or transferred by ASI or any such
Subsidiary to any person in connection  with such lease,  provided that ASI or a
Subsidiary  of ASI may enter into a sale  leaseback  with a person who is not an
Affiliate with respect to its property  located in Piscataway,  New Jersey,  and
with respect to additional sale leasebacks yielding not more than $10,000,000 of
gross  proceeds  in any  fiscal  year,  provided  that each such sale  leaseback
otherwise complies with Section 6.02.

     SECTION 6.14.  Issuance and Sale of Stock.  Issue or sell any shares of its
capital stock except (a) to qualify directors of Subsidiaries  where required by
applicable law or to satisfy other  requirements  of applicable law with respect
to the  ownership  of  capital  stock  of  Foreign  Subsidiaries,  (b)  sales of
preferred  stock of ASI with an aggregate  liquidation  preference not to exceed
$100,000,  (c) issuances and sales of capital stock by  Subsidiaries  other than
Designated  Subsidiaries  the Net Cash  Proceeds  of which are  invested  in the
businesses  of such  Subsidiaries,  (d)  issuances and sales of capital stock by
Designated  Subsidiaries to ASI or other  Designated  Subsidiaries  permitted by
Section  6.05(d)  and (f),  (e)  issuances  and  sales of  capital  stock by any
Designated Subsidiary which is a Non-Material Subsidiary,  provided that the Net
Cash  Proceeds of such  issuance  and sale are  invested in the business of such
Designated  Subsidiary and (f) issuances and sales of capital stock and options,
warrants or rights to acquire stock by Subsidiaries  to employees,  officers and
directors of such Subsidiaries.

     SECTION 6.15.  Limitation on Restrictions on Subsidiary Dividends and Other
Distributions,  etc.  Directly or indirectly create or otherwise cause or suffer
to exist or become  effective any  consensual  encumbrance or restriction on the
ability  of any of its  subsidiaries  to (a) pay  dividends  or make  any  other
distributions on its capital stock or any other interest or participation in its
profits, or pay any indebtedness,  (b) make loans or advances to any Borrower or
Subsidiary  or (c) transfer any of its  properties  or assets to any Borrower or
Subsidiary,  except for such  encumbrances or restrictions  existing under or by
reason of (i)  customary  non-assignment  provisions  in any lease  governing  a
leasehold interest,  (ii) any agreement or other instrument of a person acquired
by it at the time of such  acquisition,  which encumbrance or restriction is not
applicable to any person, or the properties or assets of any person,  other than
the  property  or assets of the person so acquired  and was not entered  into in
contemplation  of such  acquisition,  (iii)  restrictions  existing  on the date
hereof under the Indentures relating to the 9-1/4% Sinking Fund Debentures,  the
10-7/8% Senior Notes,  the 11-3/8% Senior  Debentures and other  agreements with
investors in Subsidiaries  which are not Designated  Subsidiaries  and (iv) this
Agreement and the other Credit Documents;  provided that this Section 6.15 shall
not prohibit  encumbrances  or  restrictions  on the ability of ASI to make such
dividends, distributions, loans, advances or transfers.

     SECTION  6.16.  No  Further  Negative  Pledges.   Except  with  respect  to
prohibitions  against  other  encumbrances  on specific  property  encumbered to
secure payment of particular  Indebtedness (which Indebtedness relates solely to
such  specific  property,  and  improvements  and  accretions  thereto,  and  is
otherwise permitted hereby),  enter into any agreement  prohibiting the creation
or  assumption  of any Lien upon the  properties  or assets of any  Borrower  or
Subsidiary of a Borrower,  whether now owned or hereafter acquired, or requiring
an obligation to be secured if some other obligation is secured.

     SECTION 6.17.  Restrictions  Relating to ASI-BV  Intercompany Note. Make or
permit  to be  made  any  amendment  to or  other  modification  of  the  ASI-BV
Intercompany Note.

     SECTION  6.18.  Changes in Business or Assets.  (a) Cause or permit ASI and
its Subsidiaries taken as a whole  substantially to alter the character of their
business.

     (b) Take or permit any  Subsidiary  to take any action  (i)  affecting  the
assets or cash flows of any Borrower or the Borrower Group of which it is a part
or (ii) concentrating  Indebtedness  within a particular  Borrower Group if as a
result of such  actions  the  ability of such  Borrower  to pay or  perform  its
obligations  under  this  Agreement  and the  other  Credit  Documents  would be
materially impaired.






<PAGE>





     B. Holding  covenants and agrees that it will not engage in any activity or
incur any material  liability  other than the  ownership of the capital stock of
ASI and related activities and liabilities  incidental thereto.  Notwithstanding
anything  herein or in the other Credit  Documents to the contrary,  Holding may
engage  in any  activity  incidental  to the (a)  maintenance  of its  corporate
existence and compliance with applicable law; (b) issuance of equity  Securities
to any person  (pursuant to the Stock  Incentive  Plan, the  Stockholder  Rights
Agreement,  the Amended and Restated Stockholders Agreement, the ESOP, any other
plan or agreement for the benefit of  employees,  officers  and/or  directors or
otherwise),  including  rights,  options  and  warrants  to acquire  such equity
Securities;  (c) registration of any of such equity  Securities  (whether or not
previously issued) under any federal,  state or local securities laws or similar
laws of any  jurisdiction  outside the United States;  (d) listing of any equity
Securities with any securities  exchanges,  any interdealer  quotation system or
the  National  Association  of  Securities  Dealers,  Inc.;  (e)  ownership  and
disposition  of the  common  stock  of ASI (to the  extent  otherwise  permitted
hereunder); (f) guaranteeing Indebtedness permitted by Sections 6.04(b), (c) and
(d); (g) issuing periodic reports,  proxy statements and other communications to
the holders of its Securities and applicable  securities  exchange,  interdealer
quotation systems or the National  Association of Security Dealers,  Inc., or to
rating agencies,  the SEC or comparable  regulatory bodies; (h) paying dividends
and other  amounts  in  respect  of its  outstanding  Securities  (to the extent
otherwise  permitted  hereunder);  (i)  accounting,   legal,  public  relations,
investor relations, financial or management activities (including the employment
of employees,  counsel,  accountants,  consultants,  bankers,  proxy solicitors,
advisors  or  other  professionals)  inconnection  with  any  of  the  foregoing
activities;  or (j) entering into, and performing its obligations and exercising
its  rights  under,  this  Agreement  and  its  guaranty  of  its  Subsidiaries'
obligations hereunder and other agreements to which Holding is or is to become a
party,   including  the  Amended  and  Restated  Stockholders   Agreement,   the
Stockholder Rights Agreement, the Stock Incentive Plan, the ESOP and other plans
and/or  agreements  for the benefit of  employees,  officers  and  directors  of
Holding or any subsidiary of Holding.

     C. Each Borrower that is a party to this Agreement other than ASI covenants
and  agrees  that  on and  after  the  Effective  Date,  and for so long as this
Agreement is in effect and until the  Commitments  have been  terminated and the
Loans, together with interest,  Fees and all other Obligations have been paid in
full and all  Letters  of Credit  have been  canceled  or have  expired  and all
amounts  drawn  thereunder  have been  reimbursed  in full,  unless the Required
Lenders shall otherwise give written  consent,  it will not take or refrain from
taking any action as a result of which a Default  would  occur  under any of the
covenants set forth above in this Article VI.


                                  ARTICLE VII

                               EVENTS OF DEFAULT

     Upon the  occurrence  of any of the  following  specified  events  (each an
"Event of Default"):

     SECTION 7.01.  Payments.  Failure in the payment in the applicable currency
(i) when due  (whether  at  stated  maturity,  by  acceleration,  by  notice  of
prepayment,  under  Section 2.06 or 2.11 or  otherwise)  of any principal of the
Loans, (ii) when due of any reimbursement  with respect to any L/C Disbursement,
except to the  extent due to the  failure  of any  Lender to make any  Revolving
Credit Loan when required to do so, or (iii) of any interest on the Loans or any
Fees or any other  amounts  owing  hereunder  or under  any of the other  Credit
Documents within five days after the date due; or

     SECTION  7.02.  Representations,  etc.  Any  representation,   warranty  or
statement  made,  or deemed to have been made,  by any Credit Party herein or in
any other Credit Document or in any written statement or certificate at any time
delivered  pursuant  hereto or thereto or in  connection  herewith or  therewith
shall be untrue in any respect  material to the  interests of the Lenders on the
date as of which made or deemed made; or

     SECTION 7.03. Covenants. Any Credit Party shall (i) fail to perform, comply
with or observe any term,  covenant or agreement  applicable  to it contained in
Section  5.01(g),  (h) or (i) (and such failure  shall  remain  uncured for five
Business Days after notice to ASI by the Administrative Agent or any





<PAGE>





Lender or after a  Responsible  Officer of such  Credit  Party  shall  otherwise
become aware of such  failure),  or Article VI (and,  in the case of any failure
under  Section  6.03  arising  without  any  action  on the  part  of ASI or any
Subsidiary,  such  failure  shall remain  uncured for 10 Business  Days) or (ii)
default in the due  performance  or  observance  by it of any term,  covenant or
agreement applicable to it (other than those referred to in Section 7.01 or 7.02
and clause (i) of this Section  7.03)  contained in this  Agreement or in any of
the other Credit  Documents  and such  default  under this clause (ii) shall not
have been waived or remedied within 30 days after notice thereof to ASI from the
Administrative Agent or any Lender, with a copy to the Administrative Agent; or

     SECTION  7.04.  Default  Under  Other  Agreements.  (a)  ASI  or any of its
Subsidiaries  (other  than  Non-Material  Subsidiaries)  shall  (i)  fail to pay
principal of or interest on any Indebtedness  (other than Indebtedness  referred
to in Section 7.01 but  including  any guaranty of  Indebtedness  referred to in
Section 7.01 of any other  Subsidiary) in excess of $10,000,000  individually or
$25,000,000  in the  aggregate for ASI and its  Subsidiaries,  or (ii) breach or
default  in the  observance  or  performance  of any  agreement,  obligation  or
condition  relating to any such  Indebtedness  or contained in any instrument or
agreement  evidencing,  securing or relating  thereto,  or any other event shall
occur or condition exist, the effect of which breach,  default or other event or
condition is to cause,  or to permit the holder or holders of such  Indebtedness
(or a trustee or agent on behalf of such holder or  holders) to cause,  any such
Indebtedness  to become due prior to its stated maturity (or the stated maturity
of the underlying obligation,  as the case may be); (b) any such Indebtedness of
ASI or any Subsidiary (other than Non-Material  Subsidiaries)  shall be declared
to be due and payable,  or required to be prepaid  (other than from the proceeds
of asset sales or the issuance of other securities to the extent required by the
Senior Indentures or by a regularly scheduled required  prepayment) prior to the
stated maturity thereof or (c) there shall occur any default,  event of default,
event of  termination  or other event  entitling  any person other than ASI or a
Subsidiary  to  accelerate  any  Indebtedness,  or  terminate  the  purchase  of
receivables, under a Permitted Receivables Financing; or

     SECTION 7.05. Bankruptcy, etc. (a)(x) A court shall enter a decree or order
for relief in respect of any Credit Party or any of its Subsidiaries (other than
Non-Material  Subsidiaries)  in an involuntary case under the Bankruptcy Code or
any applicable foreign, federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect,  which decree or order is not stayed;  or (y) an
involuntary  case  is  commenced   against  any  Credit  Party  or  any  of  its
Subsidiaries  (other than Non- Material  Subsidiaries) under the Bankruptcy Code
or any  applicable  foreign,  federal or state  bankruptcy,  insolvency or other
similar law now or hereafter  in effect;  or a decree or order of a court having
jurisdiction  in the premises  for the  appointment  of a receiver,  liquidator,
sequestrator,  trustee, custodian or other person having similar powers over any
Credit Party or any of its Subsidiaries (other than Non- Material Subsidiaries),
or over all or a substantial part of its property,  shall have been entered;  or
an interim  receiver,  trustee or other  custodian of any Credit Party or any of
its  Subsidiaries  (other  than  Non-  Material   Subsidiaries)  for  all  or  a
substantial  part of the property of any Credit Party or any of its Subsidiaries
(other than  Non-Material  Subsidiaries)  is  involuntarily  appointed,  and the
continuance  of any such  events  referred  to in clause (y) for 60 days  unless
dismissed or bonded and stayed or discharged; or

     (b)  (x)  Any  Credit  Party  or  any  of  its  Subsidiaries   (other  than
Non-Material  Subsidiaries)  shall have an order for relief entered with respect
to it or shall  commence  a  voluntary  case  under the  Bankruptcy  Code or any
applicable foreign, federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or shall consent to the entry of an order for relief
in an  involuntary  case,  or to the  conversion  of an  involuntary  case  to a
voluntary  case,  under any such law, or shall consent to the  appointment of or
taking  possession  by a  receiver,  trustee  or  other  custodian  for all or a
substantial part of its property or the making by any Credit Party or any of its
Subsidiaries  (other than  Non-Material  Subsidiaries) of any assignment for the
benefit of creditors; or (y) the inability or failure of any Credit Party or any
of its Subsidiaries  (other than Non-Material  Subsidiaries) to pay its debts as
such  debts  mature,  or  the  admission  by  any  Credit  Party  or  any of its
Subsidiaries (other than Non-Material  Subsidiaries) in writing of its inability
to pay its debts as such debts  become  due, or the Board of  Directors  (or any
committee  thereof) of any Credit Party or any of its  Subsidiaries  (other than
Non-Material  Subsidiaries) adopts any resolution or otherwise authorizes action
to approve any of the foregoing; or

     SECTION 7.06.  ERISA.  (a) A Reportable  Event or Reportable  Events,  or a
failure to make a required  installment or other payment  (within the meaning of




<PAGE>





Section  412(n)(1)  of the Code)  shallhave  occurred  with  respect to any
Pension  Plan or Pension  Plans that  reasonably  could be expected to result in
liability  of any Credit  Party to the PBGC or to a Pension Plan in an aggregate
amount exceeding $10,000,000 and, within 30 days after the reporting of any such
Reportable  Event to the  Lenders  or after the  receipt  by the  Lenders of the
statement required pursuant to Section  5.07(b)(iii),  the Administrative  Agent
shall have  notified  ASI in  writing  that (i) the  Required  Banks have made a
determination  that, on the basis of such Reportable Event or Reportable  Events
or the failure to make a required payment,  there are reasonable grounds (A) for
the  termination  of such Pension Plan or Pension Plans by the PBGC, (B) for the
appointment  by the  appropriate  United States  district  court of a trustee to
administer  such Pension Plan or Pension Plans (C) for the  imposition of a lien
in favor of a  Pension  Plan and (ii) as a result  thereof  an Event of  Default
exists hereunder; or

     (b) (i) a  trustee  shall  be  appointed  by a  Governmental  Authority  to
administer any Pension Plan or Pension Plans or Foreign  Pension Plan; or (ii) a
Governmental Authority shall institute proceedings to terminate any such Pension
Plan or Pension  Plans or Foreign  Pension Plan; or (iii) any Borrower or any of
its  Subsidiaries or any of its respective ERISA Affiliates shall have withdrawn
from a Pension  Plan or any Foreign  Pension  Plan if, as of the date thereof or
any subsequent  date,  the sum of each of the  Borrowers'  and their  respective
ERISA Affiliates'  various  liabilities  (such  liabilities to include,  without
limitation,  any  liability  to a  Governmental  Authority or to any party under
Sections  4062,  4063 or 4064 of ERISA or any other  provision  of law and to be
calculated after giving effect to the tax consequences  thereof) that are likely
to result from or otherwise be associated with such events listed in clauses (i)
through  (iii)  above  would  exceed,  in the  aggregate  for all  such  events,
$20,000,000; or

     (c) Any Credit Party or any of its  Subsidiaries or any of their respective
ERISA  Affiliates  as  employer  under a  Multiemployer  Plan  shall have made a
complete or partial withdrawal from such Multiemployer Plan and the plan sponsor
of such  Multiemployer  Plan shall have notified such withdrawing  employer that
such employer has incurred a withdrawal  liability  requiring annual payments in
an amount  individually  or in the aggregate  exceeding  $1,000,000;  unless (x)
prior to the time any payment of such withdrawal  liability is due in accordance
with Section  4912(c)(2) of ERISA,  the plan sponsor  agrees in writing that the
correct  amount of the annual payment is less than  $1,000,000,  or (y) prior to
the time any payment of such  withdrawal  liability  is due in  accordance  with
Section 4219(c)(2) of ERISA, a court of competent  jurisdiction has enjoined and
continues to enjoin the collection of such payment, or (z) Section 4219 of ERISA
has been amended to provide that notification that such withdrawing employer has
incurred a withdrawal  liability  would not, in the ordinary  course or with the
lapse  of  time,  require  the  payment;  provided  that,  in the  event of such
amendment, an Event of Default shall be deemed to occur when any payment of such
withdrawal  liability  becomes due or would,  in the ordinary course or with the
lapse of time, become due; or

     SECTION 7.07. Security Documents.  Any of the Security Documents shall, for
any reason,  not be or shall cease to be in full force and effect or be declared
to be null and void or any of the  Security  Documents  shall  not give or shall
cease to give the  Collateral  Agent for the  benefit of the  Lenders the Liens,
rights,  powers and  privileges  purported  to be created  thereby  (including a
perfected  security  interest  in,  and Lien on, all of the  Collateral  subject
thereto  (or  comparable  interest  under  foreign  law in the  case of  foreign
Collateral)),  in favor of the Collateral  Agent for the benefit of the Lenders,
superior  to and  prior  to  the  rights  of all  third  persons  to the  extent
contemplated  hereby  and  subject  to no  other  Liens  (except  to the  extent
expressly  permitted  herein or  therein),  other  than  because  such  Security
Document is not then yet required to be executed and delivered  hereunder or the
security interests created thereby perfected as contemplated in Section 3.09(a),
or any Credit  Party  shall fail to perform  or observe  any term,  covenant  or
agreement  on its part to be  performed  or observed  pursuant  to any  Security
Document or the validity or enforceability of the Liens granted,  to be granted,
or purported to be granted,  by any of the Security Documents shall be contested
by any Credit Party or any of its  Affiliates,  provided  that no such defect in
the Security Documents, and no such failure to perform or observe any such term,
covenant or agreement  shall give rise to an Event of Default under this Section
7.07 unless such  defect or such  failure  shall  affect  Collateral  that is or
should be subject to a Lien in favor of the Collateral  Agent for the benefit of
the Lenders having an aggregate  value in excess of $10,000,000  (without giving
effect to any  exceptions  to such terms,  covenants  or  agreements  or defects
otherwise  permitted by the Security Documents) or is not corrected upon request
by the Administrative Agent upon reasonable notice; or






<PAGE>





     SECTION 7.08.  Guarantees.  Any Guarantee Document or any provision thereof
shall be declared to be  unenforceable or null and void (other than because such
Guarantee  Document  is not then  yet  required  to be  executed  and  delivered
hereunder) or any  Guarantor  thereunder or any person acting by or on behalf of
such Guarantor shall deny or disaffirm any of such Guarantor's obligations under
any  Guarantee  Document or any  Guarantor  shall fail to perform or observe any
term,  covenant or agreement on its part to be performed or observed pursuant to
any Guarantee Document; or

     SECTION 7.09. Judgments. One or more judgments, decrees, writs, warrants of
attachment or similar process shall be entered or filed against any Credit Party
or  any  of  its   Subsidiaries   (other  than  persons  that  are  Non-Material
Subsidiaries)  or any of  their  assets  involving  $25,000,000  or  more in the
aggregate (in either case,  not fully and  adequately  covered by insurance by a
carrier that has acknowledged coverage) and any such judgments,  decrees, writs,
warrants  of  attachment  or  similar  process  shall  not  have  been  vacated,
discharged,  stayed  or  bonded  pending  appeal  within  60 days from the entry
thereof or within five days prior to the date of any proposed  sale  thereunder;
or

     SECTION 7.10. Change in Control. There shall occur a Change in Control;

     THEN (i) upon the  occurrence  of any  Event of  Default  described  in the
foregoing  Section 7.05 with respect to any  Borrower,  other than clause (y) of
Section 7.05(b), each of (x) the unpaid principal amount of and accrued interest
on all of the Loans of the affected Borrower, (y) an amount equal to the maximum
amount  which  may at any  time be  drawn  under  all  Letters  of  Credit  then
outstanding  for  the  account  of the  affected  Borrower  (whether  or not any
beneficiary  under any  Letter  of  Credit  shall  have  presented,  or shall be
entitled at such time to present, the drafts or other documents required to draw
under such  Letter of Credit) and (z) any other  amounts  payable  hereunder  or
under  any  of  the  other  Credit  Documents  by the  affected  Borrower  shall
automatically become immediately due and payable,  without presentment,  demand,
protest or other  requirements  of any kind,  all of which are hereby  expressly
waived by each Credit Party,  and the obligation of each Lender to make any Loan
to the  affected  Borrower  (or to any  Borrower in the case of such an Event of
Default  relating  to ASI) and the  right of the  affected  Borrower  (or of all
Borrowers  in the case of such an Event of Default  relating  to ASI) to request
Letters of Credit shall  thereupon  automatically  terminate,  and (ii) upon the
occurrence and during the  continuance of any other Event of Default  (including
any Event of Default under Section 7.05),  the Required  Lenders may, by written
notice to ASI, (A) declare with  respect to any  Borrower or all  Borrowers  the
amounts  described in clauses (x), (y) and (z) with respect to such  Borrower or
Borrowers to be, and the same shall forthwith become, due and payable,  together
with accrued interest thereon and/or (B) terminate the obligation of each Lender
to make  any  Loan to any  Borrower  or to all  Borrowers  and the  right of any
Borrower or of all Borrowers to request Letters of Credit  hereunder;  provided,
that the foregoing  shall not affect in any way the obligations of the Revolving
Credit Lenders to any Issuing Bank or Swingline  Lender under Section 2.19(d) or
2.20(e) with respect to  outstanding  Letters of Credit or Swingline  Loans.  So
long as any Letter of Credit shall remain outstanding,  any amounts described in
clause (y) above with  respect to such  Letter of Credit,  when  received by the
Administrative  Agent, shall be held by the Administrative Agent pursuant to the
terms of the Collateral  Account Agreement as cash Collateral for the obligation
of the applicable Borrower to reimburse the applicable Issuing Bank in the event
of any drawing  under such Letter of Credit,  as required  under the  Collateral
Account  Agreement,  and upon any drawing under any outstanding Letter of Credit
in respect of which the  Administrative  Agent has  deposited in the  Collateral
Account any amounts  described  in clause (y) above,  the  Administrative  Agent
shall apply such  amounts  held by the  Administrative  Agent to  reimburse  the
applicable Issuing Bank for the amount of such drawing.  In the event any Letter
of Credit in  respect of which the  Administrative  Agent has  deposited  in the
Collateral  Account any amounts  described  in clause (y) above is  cancelled or
expires or in the event of any reduction in the maximum amount  available at any
time for drawing under such Letter of Credit ("Maximum Available  Amount"),  the
Administrative  Agent shall apply the amount then  deposited  in the  Collateral
Account  in  excess of the  Maximum  Available  Amount  immediately  after  such
cancellation,   expiration   or   reduction,   if  any,   first   to  the   cash
collateralization  pursuant to the terms of the Collateral  Account Agreement of
any  outstanding  Letters of Credit in respect of which ASI or any  Borrower has
failed to pay all or a portion of the amounts  described in clause (y) above, as
the  case  may be,  and  second,  to the  payment  in  full  of the  outstanding
Obligations.  Nevertheless, if, at any time within 60 days after acceleration of
the maturity of any Loans,  the Borrowers  shall pay all arrears of interest and
all payments on account of the  principal  which shall have become due otherwise
than by acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified in





<PAGE>





this  Agreement) and all Defaults and Events of Default (other than  non-payment
of  principal  of and  accrued  interest on the Loans,  and  payments of amounts
referred to in clause (y) above,  in each case due and payable  solely by virtue
of acceleration) shall be remedied or waived pursuant to Section 10.10, then the
Required  Lenders by written  notice to the  Borrowers may rescind and annul the
acceleration and its consequences;  and the Administrative Agent shall return to
ASI (for the accounts of the  respective  Borrowers  that paid such amounts) any
amounts held by the  Administrative  Agent  pursuant to the  Collateral  Account
Agreement  as cash  collateral  in respect of  amounts  described  in clause (y)
above;  but such  action  shall not  affect any  subsequent  Default or Event of
Default or impair any right consequent thereon.  Upon any such Event of Default,
the Collateral Agent may enforce any or all of the Liens and security  interests
created pursuant to any or all of the Security Documents.


                                  ARTICLE VIII

                            THE ADMINISTRATIVE AGENT

     SECTION  8.01.   Appointment.   Chemical  Bank  is  hereby   appointed  the
Administrative Agent hereunder by each Lender, and each Lender hereby authorizes
the  Administrative  Agent to act hereunder and under the other  instruments and
agreements  referred to herein  (including each of the Credit  Documents) as its
agent  hereunder  and  thereunder.  Chemical Bank agrees to act as such upon the
express  conditions  contained in this Article VIII and in the Credit Documents.
The  provisions  of  this  Article  VIII  are  solely  for  the  benefit  of the
Administrative  Agent (in its capacity as such and as Collateral  Agent) and, to
the extent provided herein, the other Agents, and no Credit Party shall have any
rights  as a third  party  beneficiary  of any of the  provisions  hereof.  Each
reference in this Article  VIII to the  Administrative  Agent shall be deemed to
include Chemical Bank in its capacity as Collateral  Agent.  The  Administrative
Agent agrees to give to each Lender promptly a copy of any notice or certificate
given to the Administrative  Agent by any of the Borrowers pursuant to the terms
of this Agreement.

     SECTION 8.02. Delegation of Duties. Any Agent may execute any of its duties
under this  Agreement  or any other  Credit  Document  by or  through  agents or
attorneys-in-fact  and shall be entitled to advice of counsel or other  advisors
concerning all matters  pertaining to its duties and rights hereunder.  No Agent
shall  be  responsible  for  the  negligence  or  misconduct  of any  agents  or
attorneys-in-fact  selected  by it with  reasonable  care  except to the  extent
otherwise  expressly  required by Section 8.03.  Without limiting the foregoing,
the  Administrative  Agent may  appoint  ABS or CIBL as its agent to perform the
functions  of the  Administrative  Agent  (or any  portion  of  such  functions)
hereunder  relating to the  advancing of funds  pursuant to this  Agreement  and
distribution of funds to the Lenders and to perform such other related functions
of the  Administrative  Agent  hereunder as are  reasonably  incidental  to such
functions.

     SECTION  8.03.  Powers;  General  Immunity.  (a)  Each  Lender  irrevocably
authorizes the Administrative  Agent to take such action on such Lender's behalf
and to exercise such powers  hereunder and under the other Credit  Documents and
under the other  instruments  and  agreements  referred  to herein  and  therein
(including the Security  Documents) as are  specifically  delegated to it by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto.   The   Administrative   Agent   shall  have  only  those   duties  and
responsibilities  which are expressly  specified in this Agreement and the other
Credit  Documents  and it may  perform  such  duties by or through its agents or
employees  (including ABS, CSI and CIBL). The duties of the Administrative Agent
shall be mechanical and administrative in nature;  and the Administrative  Agent
shall not have by reason of this Agreement a fiduciary  relationship  in respect
of any  Lender;  and  nothing in this  Agreement  or in any of the other  Credit
Documents,  expressed or implied,  is intended to or shall be so construed as to
impose  upon  the  Administrative  Agent  any  obligations  in  respect  of this
Agreement  or in  respect  of any of the  other  Credit  Documents  or the other
instruments and agreements referred to herein or therein except as expressly set
forth herein or therein. It is understood that the Managing Agents and Co-Agents
do not have any duties or  obligations  under this Agreement or any other Credit
Document (other than in their capacities as Lenders).

     (b) None of the  Administrative  Agent,  ABS,  CSI and CIBL,  nor any other
Agent,  shall be  responsible  to any Lender for the  execution,  effectiveness,





<PAGE>





genuineness,  validity,  enforceability,  collectability  or sufficiency of
this Agreement,  any of the other Credit  Documents,  or any of the Notes issued
hereunder or for the issuance of any of the Letters of Credit and such  Lender's
purchase of participations  therein,  or for any Liens or Guarantees granted by,
or  purported  to be  granted  by,  any  of the  Credit  Documents,  or for  any
representations,  warranties,  recitals or statements  made herein or therein or
made in any written or oral  statement or in any financial or other  statements,
instruments,  reports, certificates or other documents in connection herewith or
therewith  furnished or made by the  Administrative  Agent, ABS, CSI or CIBL, or
any other  Agent,  to any Lender or by or on behalf of any  Credit  Party to the
Administrative Agent, ABS, CSI or CIBL, or any other Agent, or any Lender, or be
required to ascertain or inquire as to the  performance  or observance of any of
the terms, conditions,  provisions,  covenants or agreements contained herein or
therein or as to the use of the  proceeds  of the Loans or the Letters of Credit
or of the existence or possible existence of any Default or Event of Default.

     (c) Neither the  Administrative  Agent, nor any other Agent, nor any of its
officers,   directors,    employees,   agents,    investigators,    consultants,
attorneys-in-fact or affiliates (including ABS, CSI and CIBL) shall be liable to
any Lender for any action  taken or omitted  hereunder or under any of the other
Credit Documents or in connection  herewith or therewith unless, but only to the
extent,  caused by its or their gross negligence or willful  misconduct.  If the
Administrative Agent shall request instructions from Lenders with respect to any
act or action  (including the failure to take an action) in connection with this
Agreement or any of the other Credit Documents,  the Administrative  Agent shall
be entitled to refrain  from such act or taking such action  unless and until it
shall have received instructions from the Required Lenders. Without prejudice to
the generality of the foregoing,  (i) each of the Administrative Agent, ABS, CSI
and CIBL shall be entitled  to rely,  and shall be fully  protected  in relying,
upon any communication,  instrument or document believed by it to be genuine and
correct  and to have been signed or sent by the proper  person or  persons,  and
shall be entitled  to rely and shall be  protected  in relying on  opinions  and
judgments of attorneys  (who may be attorneys  for any of the Credit  Parties or
their Affiliates), accountants, experts and other professional advisors selected
by it; and (ii) no Lender shall have any right of action whatsoever  against the
Administrative Agent as a result of the Administrative Agent acting or (where so
instructed) refraining from acting under this Agreement or the other instruments
and agreements  referred to herein in accordance  with the  instructions  of the
Required  Lenders.  The  Administrative  Agent shall be entitled to refrain from
exercising any power,  discretion or authority vested in it under this Agreement
or the other Credit Documents or the other  instruments and agreements  referred
to herein or  therein  unless  and until it has  obtained  the  instructions  of
Required Lenders.

     (d) The agency  hereby  created shall in no way impair or affect any of the
rights  and  powers  of,  or  impose  any  duties  or   obligations   upon,  the
Administrative  Agent or any other Agent, in its individual capacity as a Lender
hereunder.  With  respect  to its  participation  in the Loans or any  Letter of
Credit,  each Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties and
functions  delegated to it hereunder,  and the term "Lender" or "Lenders" or any
similar term shall, unless the context clearly otherwise indicates, include each
Agent in its  individual  capacity.  Any Agent  and its  Affiliates  may  accept
deposits from, lend money to and generally engage in any kind of banking, trust,
financial  advisory or other  business with any Credit Party or any Affiliate of
any Credit Party as if it were not performing the duties specified  herein,  and
may accept fees and other  consideration  from any Credit Party or any Affiliate
of any Credit Party for services in connection with this Agreement and the other
Credit Documents,  including  transactions  contemplated hereby or thereby,  and
otherwise without having to account for the same to the Lenders.

     (e) Without limiting the foregoing,  none of the Administrative Agent, ABS,
CSI or CIBL, or any other Agent,  shall be under any obligation to any Lender to
ascertain  or to  inquire  as to the  observance  or  performance  of any of the
agreements  contained in, or conditions  of, this  Agreement or any of the other
Credit Documents,  or to inspect the properties,  books or records of any Credit
Party  or any of its  Subsidiaries  or  Affiliates.  None of the  Administrative
Agent, ABS, CSI or CIBL, nor any other Agent, shall be responsible to any Lender
for the effectiveness, genuineness, validity, enforceability,  collectability or
sufficiency  of this  Agreement or any other  Credit  Document or of any Lien or
Guarantee  granted  or  purported  to be  granted  hereby or  thereby or for any
representations,  warranties,  recitals or statements  made herein or therein or
made in any written or oral statements or in any financial or other  statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by the Administrative Agent, ABS, CSI or CIBL, or
any other  Agent,  to any Lender or by or on behalf of any  Credit  Party to the
Administrative Agent, ABS, CSI or CIBL, or any other Agent, or any





<PAGE>





Lender  or be  required  to  ascertain  or  inquire  as to  the  performance  or
observance of any of the terms, conditions,  provisions, covenants or agreements
contained  herein or  therein  or as to the use of the  Letters of Credit or the
proceeds of the Loans or of the  existence or possible  existence of any Default
or Event of Default.

     (f) Without limiting the foregoing,  each of the Administrative Agent, ABS,
CSI and CIBL may deem and treat the payee of any Note as the owner  thereof  for
all purposes  unless a written  notice of  assignment,  negotiation  or transfer
thereof shall have been filed with the Administrative  Agent. Except for actions
expressly  required to be taken by the  Administrative  Agent hereunder or under
any other Credit Document,  the Administrative Agent shall be fully justified in
failing or refusing to take any action under this  Agreement or any other Credit
Document  unless  it shall  first  receive  such  advice or  concurrence  of the
Required Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction  by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or  continuing  to take such  action.  The
Administrative  Agent  shall in all cases be fully  protected  in acting,  or in
refraining from acting,  under this Agreement and the other Credit  Documents in
accordance  with a request of the  Required  Lenders,  and such  request and any
action  taken or failure to act pursuant  thereto  shall be binding upon all the
Lenders as set forth in Section 10.04(a).

     SECTION 8.04.  Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly  acknowledges  that neither any Agent, nor any of its officers,
directors,  employees,  agents,  attorneys-in-fact or affiliates (including ABS,
CSI and CIBL) has made any  representations  or warranties to it and that no act
by any Agent hereafter taken,  including any review of the affairs of any Credit
Party,  shall be deemed to constitute any representation or warranty by any such
person to any Lender.  Each Lender  represents to each Agent,  ABS, CSI and CIBL
that it has,  independently  and without reliance upon any Agent, ABS, CSI, CIBL
or any  other  Lender,  made its own  appraisal  of and  investigation  into the
business,  assets,  liabilities,   operations,  property,  financial  and  other
condition,  prospects,  solvency and  creditworthiness  of each Credit Party and
made its own decision to make its Loans hereunder and to issue or participate in
Letters  of  Credit  hereunder  and  enter  into  this  Agreement  and the other
agreements  contemplated  hereby. No Agent shall have any duty or responsibility
either initially or on a continuing basis to make any such  investigation or any
such  appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto whether coming into its possession before
the making of the Loans or the  issuance  of any Letter of Credit or at any time
or times  thereafter,  and no Agent shall further have any  responsibility  with
respect to the accuracy of or the  completeness of any  information  provided to
Lenders.

     SECTION 8.05.  Indemnification.  The Lenders agree to indemnify  each Agent
(including the Administrative  Agent in its capacity as Collateral Agent),  ABS,
CSI and CIBL ratably  according to their aggregate  outstanding Loans (excluding
Swingline  Loans),  L/C  Exposure,  Swingline  Exposure  and unused  Commitments
(excluding  Swingline  Commitments),  from and against any and all  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or disbursements of any kind or nature  whatsoever,  including  counsel
fees and disbursements,  imposed on, incurred by, charged by or asserted against
such Agent in its capacity as such (or as Collateral  Agent) in any way relating
to or  arising  out of this  Agreement  or any  other  Credit  Document,  or any
documents  contemplated by or referred to herein or therein or the  transactions
contemplated  hereby or thereby  or any  action  taken or omitted to be taken by
such Agent,  ABS, CSI or CIBL under or in connection  with any of the foregoing,
but only to the  extent  that  any of the  foregoing  is not paid by the  Credit
Parties; provided that no Lender shall be liable to any Agent for the payment of
any  portion  of such  liabilities,  obligations,  losses,  damages,  penalties,
actions,  judgments, suits, costs, expenses or disbursements resulting from such
Agent's,  ABS',  CSI's or CIBL's gross negligence or wilful  misconduct.  If any
indemnity furnished to any Agent, ABS, CSI or CIBL for any purpose shall, in the
opinion  of the  applicable  Agent,  be  insufficient  or become  impaired,  the
applicable  Agent may call for additional  indemnity and cease, or not commence,
to do the acts indemnified against until such additional indemnity is furnished.
The  agreements  in this  subsection  shall  survive  the payment of all amounts
payable  hereunder and under the other Credit  Documents and the cancellation or
expiration of the Letters of Credit. To the extent indemnification payments made
by the Lenders  pursuant to the Section 8.05 are  subsequently  recovered by the
Administrative Agent from the Borrowers,  the Administrative Agent will promptly
refund such previously paid indemnity payments to the Lenders.






<PAGE>





     SECTION  8.06.   Resignation   by  the   Administrative   Agent.   (a)  The
Administrative  Agent may resign from the  performance  of all its functions and
duties  hereunder and under the other Credit  Documents at any time by giving 15
Business Days' prior written notice to ASI and the Lenders.  The  resignation of
the  Administrative  Agent shall also be a  resignation  from its  functions and
duties  as  Collateral  Agent.  Such  resignation  shall  take  effect  upon the
acceptance  by a  successor  Administrative  Agent of  appointment  pursuant  to
clauses (b) and (c) below or as otherwise  provided below and upon  satisfaction
of  any  additional  requirements  under  any  of the  Security  Documents.  The
appointment of a successor to the Administrative  Agent shall be deemed also the
appointment  of  a  successor  Collateral  Agent  under  the  applicable  Credit
Documents.

     (b) Upon any such notice of resignation, the Required Lenders shall appoint
a successor Administrative Agent who shall be reasonably satisfactory to ASI and
shall be an incorporated bank or trust company.

     (c) If a successor  Administrative  Agent shall not have been so  appointed
within said 15 Business Day period, the resigning  Administrative Agent with the
consent of ASI (not to be unreasonably withheld or delayed) shall then appoint a
successor  Administrative  Agent who shall serve as  Administrative  Agent until
such time, if any, as the Required  Lenders,  with the consent of ASI, appoint a
successor Administrative Agent as provided above.

     (d) If no successor  Administrative  Agent has been  appointed  pursuant to
clause  (b) or (c) by the 20th  Business  Day  after  the date  such  notice  of
resignation was given by the resigning  Administrative Agent, the Administrative
Agent's  resignation  shall  become  effective  and the Required  Lenders  shall
thereafter perform all the duties of such  Administrative  Agent hereunder until
such time, if any, as the Required  Lenders,  with the consent of ASI, appoint a
successor Administrative Agent as provided above.

     SECTION 8.07.  Security  Documents,  etc. Each Lender hereby authorizes the
Collateral  Agent to enter into each of the Security  Documents  and to take all
action contemplated thereby. Each Lender and the Dutch Borrower agrees that each
such person shall not have any right  individually  to realize upon the security
granted by any  Security  Document,  it being  understood  and agreed  that such
rights and remedies may be exercised by the Collateral  Agent for the benefit of
Lenders  and the  other  beneficiaries  thereof  upon  the  terms  thereof.  The
Collateral Agent may assign its rights and obligations as Collateral Agent under
any of the  Security  Documents  to any  direct or  indirect  Subsidiary  of the
Collateral Agent or to any trustee,  which assignee, in each such case, shall be
entitled to all the rights of the Collateral Agent under the applicable Security
Document and all rights  hereunder of the  Collateral  Agent with respect to the
applicable  Security Document.  In addition,  the Lenders and the Dutch Borrower
authorize the  Administrative  Agent and the Collateral  Agent to appoint one or
more trustees who shall hold,  independently and separately,  the benefit of the
Obligations  hereunder  and the  Collateral  therefor  under any of the Security
Documents  relating to the pledge of  Securities  of the Dutch  Borrower and its
Subsidiaries  and/or Security  Documents executed by the U.K. Borrower or any of
its  Subsidiaries,  which  appointment shall in no way affect the Obligations of
the Borrowers to the Lenders and the  Administrative  Agent  hereunder and under
the other Credit  Documents but the trustee thereof shall be entitled to all the
rights hereunder of the Collateral Agent with respect to the applicable Security
Document  as if it had  been a party  hereto  as  Collateral  Agent  in  respect
thereof.

     SECTION  8.08.  Determinations  Pursuant  to  Security  Documents.  In each
circumstance  where,  under  any  provision  of  a  Security  Document  or  this
Agreement,  the  Collateral  Agent shall have the right to grant or withhold any
consent, exercise any remedy, make any determination or direct any action by the
Collateral Agent under such Security Document, the Collateral Agent shall act in
respect of such consent,  exercise of remedies,  determination or action, as the
case may be,  only with the  consent  of and at the  direction  of the  Required
Lenders;  provided,  however, that no such consent of the Required Lenders shall
be required with respect to any consent,  determination or other matter that is,
in Collateral  Agent's  reasonable  judgment,  ministerial or  administrative in
nature or provided for in this Agreement, and provided that the Collateral Agent
is hereby  authorized on behalf of all of the Lenders,  without the necessity of
any  further  consent  from any  Lender,  from time to time prior to an Event of
Default,  to release portions of the Collateral from the security  interests and
Liens imposed by the Security  Documents in connection with any  dispositions of
such portions of the Collateral permitted by the terms of





<PAGE>





this  Agreement  or as may be required by law.  In each  circumstance  where any
consent of or direction  from the Required  Lenders is required,  the Collateral
Agent  shall  send to the  Lenders  a  notice  setting  forth a  description  in
reasonable  detail of the matter as to which  consent or  direction is requested
and the Collateral  Agent's proposed course of action with respect  thereto.  In
the event the  Collateral  Agent  shall not have  received a  response  from any
Lender within five  Business  Days after the giving of such notice  (unless such
notice is given by mail, in which case 10 Business Days after the giving of such
notice),  such  Lender  shall be deemed to have  agreed to the  course of action
proposed  by the  Collateral  Agent,  provided  that such  notice  states that a
failure to respond shall have the consequences specified in this sentence.


                                   ARTICLE IX

                        COLLECTION ALLOCATION MECHANISM

     SECTION  9.01.  Implementation  of CAM. On the CAM Exchange  Date,  (i) the
Commitments  shall  automatically  and  without  further  act be  terminated  as
provided  in Article VII and (ii) the Lenders  shall  automatically  and without
further act be deemed to have exchanged  interests in the Credit Facilities such
that in lieu of the interest of each Lender in each Credit  Facility in which it
shall  participate  as of such date  (including  such  Lender's  interest in the
principal,  reimbursement,  interest and Fee obligations of each Credit Party in
respect of each such Credit  Facility),  such  Lender  shall hold an interest in
every one of the Credit  Facilities  (including  the  principal,  reimbursement,
interest and Fee obligations of each Credit Party in respect of each such Credit
Facility  and each L/C Reserve  Account  established  pursuant  to Section  9.02
below),  whether or not such Lender shall previously have participated  therein,
equal  to such  Lender's  CAM  Percentage  thereof.  Each  Lender,  each  person
acquiring a participation  from any Lender as  contemplated by Section  10.04(f)
and each Credit  Party  hereby  consents  and agrees to the CAM  Exchange.  Each
Credit   Party  agrees  from  time  to  time  to  execute  and  deliver  to  the
Administrative  Agent all such Notes and other  instruments and documents as the
Administrative  Agent  shall  reasonably  request to  evidence  and  confirm the
respective interests of the Lenders after giving effect to the CAM Exchange, and
each  Lender  agrees  to  surrender  any  Notes  originally  received  by  it in
connection with its Loans hereunder to the Administrative Agent against delivery
of any Notes so executed and delivered;  provided,  however, that the failure of
any Credit Party to execute or deliver or of any Lender to accept any such Note,
instrument or document shall not affect the validity or effectiveness of the CAM
Exchange.

     SECTION 9.02.  Letters of Credit. (a) In the event that on the CAM Exchange
Date any Letter of Credit shall be outstanding  and undrawn in whole or in part,
or any  amount  drawn  under a Letter of Credit  shall not have been  reimbursed
either by the  applicable  Account  Party or with the  proceeds  of a  Revolving
Credit Borrowing, each Lender which shall on such date, and before giving effect
to the CAM Exchange, have held a participation in such Letter of Credit pursuant
to Section  2.19(d)  shall  promptly pay over to the  Administrative  Agent,  in
immediately  available  funds in the  currency in which such Letter of Credit is
denominated,  an amount equal to such  Lender's  Applicable  Percentage  of such
undrawn face amount or such unreimbursed  drawing,  as the case may be, together
with  interest  thereon  from the CAM  Exchange  Date to the date on which  such
amount  shall be paid to the  Administrative  Agent at the  rate  that  would be
applicable at the time to a Swingline  Loan in a principal  amount equal to such
amount and denominated in the relevant currency.  The Administrative Agent shall
establish  a  separate  account or  accounts  for each  Lender  for the  amounts
received with respect to each such Letter of Credit from each Lender paying such
amounts pursuant to the preceding sentence.  The Administrative Agent shall have
sole  dominion  and  control  over  each such  account  (each,  an "L/C  Reserve
Account"),  and the amounts  deposited in each L/C Reserve Account shall be held
in such L/C Reserve  Account until  withdrawn as provided in paragraph (b), (c),
(d) or (e) below. The Administrative Agent shall maintain records enabling it to
determine the amounts paid over to it and deposited in the L/C Reserve  Accounts
in  respect to each  Letter of Credit  and the  amounts on deposit in respect of
each  Letter  of  Credit  attributable  to each  Lender's  CAM  Percentage  (the
aggregate  of such  amounts  attributable  to a Lender's  CAM  Percentage  being
referred to as such Lender's "CAM Account"). The amounts paid by a Lender to the
Administrative  Agent  pursuant  to this  paragraph  shall be held as a  reserve
against  the L/C  Exposures,  shall be the  property of such  Lender,  shall not
constitute  Loans to any Borrower and shall not give rise to any  obligation  on
the part of any Borrower to pay  interest to such  Lender,  it being agreed that
the





<PAGE>





Borrowers' reimbursement obligations in respect of Letters of Credit shall arise
only at such times as drawings are made thereunder, as provided in Section 2.19.

     (b) In the event that after the CAM Exchange Date any drawing shall be made
in respect of a Letter of Credit, the Administrative Agent shall, at the request
of the applicable Issuing Bank, withdraw from the L/C Reserve Account of each of
the Lenders (and from the  respective  CAM  Accounts of each of the Lenders,  in
accordance with each Lender's CAM  Percentage) any amounts,  up to the amount of
such  drawing,  deposited  in respect of such Letter of Credit and  remaining on
deposit and deliver such amounts to such  Issuing  Bank in  satisfaction  of the
reimbursement  obligations of the Lenders under Section  2.19(d) (but not of the
applicable  Borrower  under  Section  2.19(e)).  In the event any  Lender  shall
default on its obligation to pay over any amount to the Administrative  Agent in
respect of any Letter of Credit as provided in this  Section  9.02,  the Issuing
Bank in  respect  of such  Letter  of  Credit  shall,  in the event of a drawing
thereunder,  have a claim  against  such  Lender  to the same  extent as if such
Lender had defaulted on its obligations under Section 2.19(d), but shall have no
claim against any other Lender, notwithstanding the exchange of interests in the
applicable Account Party's  reimbursement  obligations pursuant to Section 9.01.
Each other Lender  shall have a claim  against  such  defaulting  Lender for any
damages  sustained by it as a result of such  default,  including,  in the event
such Letter of Credit shall expire undrawn,  its CAM Percentage of the defaulted
amount.

     (c) In the event  that  after the CAM  Exchange  Date any  Letter of Credit
shall expire  undrawn,  the  Administrative  Agent shall  withdraw  from the L/C
Reserve  Account  of each  Lender  the amount  remaining  on deposit  therein in
respect of such Letter of Credit and distribute such amount to such Lender.

     (d) With the prior  written  approval of the  Administrative  Agent and the
applicable  Issuing  Bank (not to be  unreasonably  withheld),  any  Lender  may
withdraw  the amount held in its L/C  Reserve  Account in respect of the undrawn
amount of any Letter of Credit.  Any Lender  making such a  withdrawal  shall be
unconditionally  obligated,  in the event there shall  subsequently be a drawing
under such Letter of Credit,  to pay over to the  Administrative  Agent, for the
account of the  applicable  Issuing Bank, on demand,  its CAM Percentage of such
drawing.

     (e)  Pending  the  withdrawal  by any  Lender of any  amounts  from its CAM
Account as contemplated by the above paragraphs,  the Administrative Agent will,
at the direction of such Lender and subject to such rules as the  Administrative
Agent may prescribe for the avoidance of  inconvenience,  invest such amounts in
Cash  Equivalents  or  Foreign  Cash  Equivalents.  Each  Lender  which  has not
withdrawn its CAM  Percentage of amounts in its L/C Reserve  Account as provided
in paragraph (d) above shall have the right, at intervals  reasonably  specified
by the Administrative  Agent, to withdraw the earnings on investments so made by
the  Administrative  Agent with  amounts in its CAM  Account  and to retain such
earnings for its own account.







<PAGE>





                                   ARTICLE X

                                 MISCELLANEOUS

     SECTION  10.01.  Payment of  Expenses,  etc.  (a) Whether or not any of the
transactions  contemplated  hereby  shall  be  consummated,  ASI  agrees  to pay
promptly (i) all the actual costs and expenses of  preparation of this Agreement
and each of the other Credit Documents,  including any amendments or supplements
thereto,  and all the costs of  furnishing  all  opinions by counsel  for, or on
behalf of, the Credit Parties or the Lenders  (including any opinions  requested
by the Lenders as to any legal  matters  arising  hereunder  or under any of the
other  Credit  Documents),  and  of  the  Credit  Parties'  performance  of  and
compliance with all agreements and conditions  contained herein or in any of the
other Credit  Documents on their part to be performed or complied with; (ii) the
reasonable fees and expenses of Cravath, Swaine & Moore and one local or foreign
counsel to the Lenders in each local or foreign  jurisdiction in connection with
the negotiation, preparation, execution and administration of this Agreement and
the other Credit Documents, including any amendments or supplements thereto, and
the Loans hereunder and the issuance of Letters of Credit  hereunder;  (iii) the
fees, costs and expenses of creating,  perfecting and maintaining Liens pursuant
to any of  the  Credit  Documents,  including  filing  and  recording  fees  and
expenses,  title insurance,  reasonable fees and expenses of counsel  (including
one local or  foreign  counsel in each  local or  foreign  jurisdiction)  to the
Lenders and the reasonable  fees and expenses of any agent or trustee  appointed
pursuant  to Section  8.07;  and (iv) the fees,  costs and  expenses  (including
reasonable fees and expenses of counsel, including any local and foreign counsel
and allocated  costs of internal  counsel,  and costs of settlements  and of any
other  experts or advisors)  incurred by or on behalf of any Lender in enforcing
any  Obligations  of or in  collecting  any  payments  due from any Credit Party
hereunder or under any of the other Credit Documents by reason of any Default or
Event of Default or in connection with any refinancing or  restructuring  of the
credit arrangements  provided under this Agreement or the other Credit Documents
in the nature of a "work-out" or of any insolvency or bankruptcy  proceedings or
otherwise.

     (b) In addition to the payments  pursuant to Section  10.01(a),  whether or
not any of the transactions contemplated hereby shall be consummated, ASI agrees
(and,  insofar as it is responsible for the  indemnified  liability in question,
each  Borrower  also agrees) to pay and  indemnify and hold harmless each of the
Agents and each Lender and Issuing Bank, and the officers, directors, employees,
agents,   advisors  and   affiliates   of  each  of  them   (collectively,   the
"Indemnitees") from and against, any and all liabilities,  obligations,  losses,
damages,  penalties,  actions,  judgments,  suits, claims,  costs,  expenses and
disbursements  of any kind or nature  whatsoever  other than in respect of taxes
(including the reasonable  fees and expenses of counsel for such  Indemnitees in
connection  with  any  investigative,   administrative  or  judicial  proceeding
commenced or threatened,  whether or not such  Indemnitee  shall be designated a
party thereto),  which may be imposed on, incurred by, or asserted or threatened
against  that  Indemnitee,  in any manner  relating  to or  arising  out of this
Agreement or the other  Credit  Documents,  the  Lenders' or the Issuing  Banks'
agreements  to make the Loans or issue or  participate  in the Letters of Credit
hereunder  or the  use or  intended  use of  the  proceeds  of any of the  Loans
hereunder  or of any of the Letters of Credit (the  "indemnified  liabilities");
provided that neither ASI nor any other Borrower shall have any obligation to an
Indemnitee hereunder to the extent it is finally judicially determined that such
indemnified  liabilities  arise  solely  from the gross  negligence  or  willful
misconduct  of such  Indemnitee.  To the  extent  that the  undertaking  to pay,
indemnify  and  hold  harmless  set  forth  in  the  preceding  sentence  may be
unenforceable, ASI shall contribute the maximum portion which it is permitted to
pay and satisfy  under  applicable  law to the payment and  satisfaction  of all
indemnified liabilities incurred by the Indemnitees or any of them.

     SECTION 10.02.  Right of Setoff. In addition to any rights now or hereafter
granted under  applicable law or otherwise,  and not by way of limitation of any
such rights,  upon the occurrence of an Event of Default,  each Lender is hereby
authorized  at any time and from  time to  time,  without  presentment,  demand,
protest or other notice of any kind to any Credit Party or to any other  person,
any such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits  (general or special) and any other  Indebtedness  at
any time held or owing by such Lender  (including  by branches  and  agencies of
such Lender wherever  located) to or for the credit or the account of any Credit
Party against and on account of the  Obligations  and liabilities of such Credit
Party to such  Lender  under  this  Agreement  or under any of the other  Credit
Documents, including all interests in Obligations of such





<PAGE>





Credit Party  purchased by such Lender  pursuant to Section 2.16,  and all other
claims of any  nature  or  description  arising  out of or  connected  with this
Agreement  or any other  Credit  Document,  irrespective  of whether or not such
Lender  shall have made any  demand  hereunder  or  thereunder  or whether  said
Obligations, liabilities or claims, or any of them, are contingent or unmatured.

     SECTION 10.03. Notices.  Except as otherwise expressly provided herein, all
notices and other  communications  provided  for  hereunder  shall be in writing
(including telecopy or cable communications) and telecopied or delivered,  if to
a Credit Party, at the address specified  opposite such Credit Party's signature
below; if to the Administrative Agent or any Lender, at its address specified in
Schedule II; or at such other  address as shall be  designated by any party in a
written  notice to the other  parties  hereto;  provided that all notices to any
Credit Party by any Lender or the  Administrative  Agent or Collateral Agent may
be  delivered  to such Credit  Party in care of ASI at ASI's  address.  All such
notices and  communications  shall be  effective  when  delivered to a reputable
overnight courier or sent by telecopier,  except that notices and communications
to the Administrative Agent or any Lender shall not be effective until received.

     SECTION 10.04. Benefit of Agreement.  (a) Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of the Borrowers,  the Administrative  Agent or the Lenders that
are  contained  in this  Agreement  shall bind and inure to the benefit of their
respective successors and assigns.

     (b)  Each  Lender  may  assign  to one or more  banks  or  other  financial
institutions  all or a portion of its interests,  rights and  obligations  under
this  Agreement  (including all or a portion of any of its  Commitments  and the
Loans at the time owing to it); provided,  however,  that (i) except in the case
of an  assignment  to an  Affiliate of such Lender or a transfer of interests as
part of the CAM Exchange,  ASI (and (x) in the case of an assignment of a U.S. $
Revolving  Credit  Commitment,  the  Issuing  Banks  and  (y) in the  case  of a
Multi-Currency Revolving Credit Commitment,  the Issuing Banks and the Swingline
Lender) must give their prior written consent to such assignment  (which consent
will not be unreasonably  withheld),  (ii) unless ASI shall otherwise agree, the
amount of the Loans and  Commitments  (excluding  Swingline  Loans and Swingline
Commitments) of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance  with respect to such assignment is
delivered to the  Administrative  Agent) shall not be less than  $10,000,000 (or
the remaining amount of such Lender's Loans and Commitments),  (iii) the parties
to each such assignment shall execute and deliver to the Administrative Agent an
Assignment  and  Acceptance,  together  with the Note or Notes  subject  to such
assignment and a processing and recordation fee of $3,500 (provided that payment
of such fee shall not be required in the case of a CAM Exchange or an assignment
by a Lender  to an  Affiliate  of such  Lender  or an  assignment  described  in
paragraph  (h) below),  (iv) the  assignee,  if it shall not be a Lender,  shall
deliver to the  Administrative  Agent an  Administrative  Questionnaire  and (v)
after the CAM Exchange Date, each such assignment shall be of a single,  and not
a varying, percentage of all the assigning Lender's rights and obligations under
this Agreement.  Upon acceptance and recording pursuant to paragraph (e) of this
Section 10.04,  from and after the effective  date specified in each  Assignment
and Acceptance,  which effective date shall be at least five Business Days after
the execution  thereof unless ASI and the  Administrative  Agent shall otherwise
agree to an earlier date,  which earlier date shall not precede the date of such
acceptance and recording,  (A) the assignee  thereunder  shall be a party hereto
and, to the extent of the interest  assigned by such  Assignment and Acceptance,
have the rights and  obligations  of a Lender under this  Agreement  and (B) the
assigning  Lender  thereunder  shall, to the extent of the interest  assigned by
such  Assignment and  Acceptance,  be released from its  obligations  under this
Agreement,  other than any obligation it may have under Section 2.18(g) (and, in
the case of an Assignment and Acceptance  covering all or the remaining  portion
of an assigning  Lender's  rights and  obligations  under this  Agreement,  such
Lender  shall cease to be a party  hereto (but shall  continue to be entitled to
the benefits of Sections 2.12,  2.14,  2.18,  10.01 and 10.05, as well as to any
Fees accrued for its account hereunder and not yet paid)).

     (c) By executing and delivering an Assignment and Acceptance, the assigning
Lender thereunder and the assignee  thereunder shall be deemed to confirm to and
agree  with each  other  and the  other  parties  hereto  as  follows:  (i) such
assigning  Lender  warrants  that it is the  legal and  beneficial  owner of the
interest being assigned thereby free and clear of any adverse claim and that its






<PAGE>




 Commitments, andthe outstanding balances of its Loans, in each case without
giving effect toassignments thereof which have not become effective,  are as set
forth in such Assignment and Acceptance,  (ii) except as set forth in (i) above,
such  assigning  Lender  makes no  representation  or  warranty  and  assumes no
responsibility  with respect to any  statements,  warranties or  representations
made in or in connection with this  Agreement,  any other Credit Document or any
other  instrument  or document  furnished  pursuant  hereto or  thereto,  or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement, any other Credit Document or any other instrument or document
furnished pursuant hereto or thereto, or the financial condition of any Borrower
or any  Subsidiary  thereof or the  performance or observance by any Borrower or
any Subsidiary thereof of any of its obligations under this Agreement, any other
Credit Document or any other instrument or document furnished pursuant hereto or
thereto;  (iii)  such  assignee  represents  and  warrants  that  it is  legally
authorized  to enter into such  Assignment  and  Acceptance;  (iv) such assignee
confirms that it has received a copy of this Agreement,  together with copies of
the most recent financial statements delivered pursuant to Section 5.01 and such
other  documents and  information  as it has deemed  appropriate to make its own
credit analysis and decision to enter into such  Assignment and Acceptance;  (v)
such assignee will  independently  and without reliance upon the  Administrative
Agent, such assigning Lender or any other Lender and based on such documents and
information as it shall deem  appropriate at the time,  continue to make its own
credit decisions in taking or not taking action under this Agreement;  (vi) such
assignee  appoints and  authorizes the  Administrative  Agent and the Collateral
Agent to take such  action as agent on its behalf and to  exercise  such  powers
under this  Agreement  and the other Credit  Documents  as are  delegated to the
Administrative  Agent and the Collateral  Agent by the terms hereof and thereof,
together with such powers as are reasonably  incidental thereto;  and (vii) such
assignee  agrees  that it will  perform in  accordance  with their terms all the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.  In the case of any  assignment to an Affiliate of the assigning
Lender,  such Lender will also represent in the  Assignment and Acceptance  that
such assignment is being made for a valid business purpose,  specifying the same
in  reasonable  detail if  requested by ASI,  and is not  inconsistent  with the
obligations of such Lender under Section 2.22(b).

     (d) The Administrative  Agent,  acting for this purpose as an agent of each
Borrower, shall maintain at one of its offices in The City of New York a copy of
each  Assignment  and  Acceptance  delivered  to  it  and  a  register  for  the
recordation of the names and addresses of the Lenders,  and the  Commitments of,
and  principal  amount of the Loans owing to, each Lender  pursuant to the terms
hereof from time to time (the  "Register").  The entries in the Register  absent
manifest error shall be conclusive and the Borrowers,  the Administrative  Agent
and the Lenders  shall treat each person  whose name is recorded in the Register
pursuant  to the terms  hereof as a Lender  hereunder  for all  purposes of this
Agreement.  All payments  under the Credit  Documents in respect of principal or
interest  shall be made to the  appropriate  person  named in the  Register  and
recorded in the Register.  The Register shall be available for inspection by the
Borrowers  and any  Lender,  at any  reasonable  time and from time to time upon
reasonable prior notice.

     (e) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning  Lender and an assignee  together with the Note or Notes subject
to such assignment, an Administrative  Questionnaire completed in respect of the
assignee  (unless  the  assignee  shall  already  be a  Lender  hereunder),  the
processing  and  recordation  fee  referred  to in  paragraph  (b) above and, if
required,  the written  consent of ASI, the  Administrative  Agent,  the Issuing
Banks and the Swingline  Lender to such  assignment,  the  Administrative  Agent
shall (i) accept such  Assignment and  Acceptance,  (ii) record the  information
contained  therein in the Register and (iii) give prompt  notice  thereof to the
Lenders.  No  assignment  shall be effective  unless it has been recorded in the
Register as provided in this  paragraph  (e).  Within five  Business  Days after
receipt of notice,  (i) the Borrowers,  at their own expense,  shall execute and
deliver to the  Administrative  Agent new Notes,  if requested by such assignee,
payable to the order of such assignee (or, if such assignee shall so request, to
such assignee and registered  assigns)  representing  Loans made pursuant to the
Commitments  assumed  by it or Term  Loans  acquired  by it, as the case may be,
pursuant to such Assignment and Acceptance and (ii) the assigning  Lender, if it
shall  cease to be a party  hereto as  provided in  paragraph  (a) above,  shall
deliver the Notes, if previously  issued,  held by it to ASI for cancellation by
the  appropriate  Borrower.  The new Notes  delivered  to such  assignee and its
registered  assigns shall be dated the Effective Date and shall  otherwise be in
substantially the form of the appropriate Exhibit or Exhibits hereto.






<PAGE>





     (f)  Each  Lender  may  without  the  consent  of  the   Borrowers  or  the
Administrative   Agent  or  any  Issuing  Bank  or  the  Swingline  Lender  sell
participations to one or more banks or other financial  institutions in all or a
portion of its rights and obligations  under this Agreement  (including all or a
portion of any of its Commitments and the Loans owing to it); provided, however,
that (i) such Lender's  obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the  performance  of such  obligations,  (iii) any  participating  bank or other
financial  institution  shall be entitled to the benefit of the cost  protection
and other  provisions  contained in Sections 2.12,  2.14,  2.18 and 10.01 to the
same  extent as if it were a Lender  provided  that it shall not be  entitled to
receive any more than the selling Lender would have received had it not sold the
participation  unless and to the extent  that the  additional  amount (x) is the
result  of  a  change  in  applicable   law,   regulation  or  treaty,   or  the
interpretation  or  administration  of  any of the  foregoing  by any  authority
charged with the administration or interpretation thereof, or court of competent
jurisdiction,  subsequent to the date of the sale of the  participation  to such
bank or other financial  institution or (y) results from or is occasioned by any
action or actions of the applicable Borrower subsequent to the date of such sale
(other than a change of the applicable  Borrower  pursuant to a Periodic  Access
Borrowing  or  Revolving  Credit  Borrowing  or by  virtue  of  assignments  and
transfers  among  the  Borrowers  of Term  Loans)  and (iv) the  Borrowers,  the
Administrative  Agent,  the  Swingline  Lender,  the Issuing Banks and the other
Lenders  shall  continue  to deal  solely  and  directly  with  such  Lender  in
connection with such Lender's rights and obligations  under this Agreement,  and
such  Lender  shall  retain  the sole right to enforce  the  obligations  of the
Borrowers and the other Credit Parties  relating to the Loans and to approve any
amendment, modification or waiver of any provision of this Agreement (other than
amendments,  modifications or waivers referred to in the first proviso appearing
in Section 10.10(b),  but in each case only to the extent that the participating
bank or other  entity would be affected  thereby) or any other Credit  Document.
For purposes of clause (iii) of the  preceding  sentence,  a change shall not be
considered  a  change  subsequent  to the  date of sale if such  change  was (x)
proposed or pending on or prior to the date of sale and subsequently  enacted in
materially the same form within one year of the date such change was proposed or
pending or (y) enacted on or prior to the date of sale.

     (g) Any Lender or  participant  may, in connection  with any  assignment or
participation or proposed  assignment or participation  pursuant to this Section
10.04,  disclose  to  the  assignee  or  participant  or  proposed  assignee  or
participant  any  information  relating to the  Borrowers  and the other  Credit
Parties  furnished  to such  Lender by or on behalf of the  Borrowers;  provided
that, prior to any such disclosure of information designated by the Borrowers as
confidential,  each  such  assignee  or  participant  or  proposed  assignee  or
participant  shall  execute an agreement  whereby such  assignee or  participant
shall agree (subject to customary exceptions) to preserve the confidentiality of
such confidential information.

     (h) Any  Lender  may at any time  assign  all or any  portion of its rights
under this  Agreement  and the Notes  issued to it to a Federal  Reserve Bank to
secure  extensions  of  credit  by such  Federal  Reserve  Bank to such  Lender;
provided  that no  such  assignment  shall  release  a  Lender  from  any of its
obligations hereunder.

     (i) In determining whether to give its consent to an assignment pursuant to
this  Section  10.04,  ASI  shall  not take  into  account  whether  or not such
assignment  would result in increased  costs under Section 2.12,  2.14,  2.18 or
10.01 unless such  assignment  would result in an increase of at least 1.00% per
annum in the aggregate  borrowing cost  associated with the Loans or Commitments
subject to such assignment.

     (j) In  exercising  its right to assign its  interests  hereunder to one or
more  Affiliates or to cause one or more branches or Affiliates to make Loans on
its behalf as contemplated by Section 2.02(b), each Lender agrees to endeavor in
good  faith to avoid  increased  costs or  withholding  taxes  for which ASI has
agreed to reimburse the Lenders  hereunder to the extent such avoidance does not
result in costs for which such Lender  shall not be  entitled  to  reimbursement
hereunder and is not, in the judgment of such Lender, otherwise  disadvantageous
to it.

     (k) Other than as expressly  permitted  hereunder,  the Borrowers shall not
assign or delegate any of their rights or duties hereunder.






<PAGE>





     SECTION 10.05. No Waiver;  Remedies Cumulative.  No failure or delay on the
part of the  Administrative  Agent or any  Lender or any holder of a Note or any
Issuing Bank or the Collateral Agent in exercising any right, power or privilege
hereunder  or under any other Credit  Document and no course of dealing  between
any Credit Party and the  Administrative  Agent, any Lender or the holder of any
Note or any  Issuing  Bank or the  Collateral  Agent  shall  operate as a waiver
thereof;  nor shall any  single  or  partial  exercise  of any  right,  power or
privilege  hereunder  or under any other Credit  Document  preclude any other or
further exercise thereof or the exercise of any other right,  power or privilege
hereunder  or  thereunder.  The  rights  and  remedies  herein  and in the other
documents  expressly  provided are cumulative and not exclusive of any rights or
remedies which the  Administrative  Agent,  or any Lender or any Issuing Bank or
the Collateral Agent, would otherwise have. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further  notice
or demand in similar or other circumstances or constitute a waiver of the rights
of the Administrative Agent, any Lender or the holder of any Note or any Issuing
Bank or the Collateral Agent to any other or further action in any circumstances
without notice or demand.

     SECTION  10.06.  Calculations;  Computations.  (a) To the  extent  that the
determination  of  compliance  with  any  covenant  contained  herein  or  other
provision hereof requires the conversion to Dollars of foreign currency amounts,
such Dollar amount shall be the Dollar  Equivalent of the amount of such foreign
currency at the time such item is to be  calculated or is to be or was incurred,
created or suffered or permitted to exist or assumed or  transferred or sold for
purposes  of this  Agreement  (except  if such  item was  incurred,  created  or
assumed,  or suffered or permitted to exist or  transferred or sold prior to the
date hereof, such conversion shall be made based on the Dollar Equivalent of the
amounts  of  such  foreign  currency  at the  date  hereof);  provided  that  in
determining   Consolidated   Rental  Payments  for  purposes  of  Section  6.06,
Indebtedness  or purchase price for purposes of Section 6.04,  rental  payments,
Indebtedness  and purchase price  incurred in currencies  other than Dollars for
local  operations and in the ordinary course of business shall be converted into
Dollars at the Dollar  Equivalent  determined as of the Effective  Date,  except
that, with respect to "Highly  Inflationary  Countries" (as defined in Financial
Accounting  Standards Board No. 52), such determinations shall be made using the
Dollar  Equivalent  at the time such item was  incurred,  created or suffered or
permitted  to exist or  assumed  or  transferred  or sold for  purposes  of this
Agreement.

     (b) Notwithstanding  anything herein to the contrary, but without prejudice
to the  first  sentence  of  Section  10.07(a),  if at any time  the  applicable
interest rate,  together with all fees and charges which are treated as interest
under applicable law (collectively the "Charges"),  as provided for herein or in
any other document executed in connection herewith, or otherwise contracted for,
charged,  received,  taken or reserved by any Lender,  shall  exceed the maximum
lawful rate (the "Maximum  Rate") which may be contracted for,  charged,  taken,
received or reserved by such Lender in accordance  with applicable law, the rate
of interest payable,  together with all Charges payable to such Lender, shall be
limited to the Maximum Rate.

     SECTION 10.07.  Governing Law; Submission to Jurisdiction;  Venue. (a) This
Agreement and the other Credit Documents (other than Letters of Credit and other
than as expressly  set forth in the other Credit  Documents)  and the rights and
obligations  of the parties  hereunder  and  thereunder  shall be  construed  in
accordance  with and governed by the laws of the State of New York.  Each Letter
of Credit shall be governed by, and shall be construed in accordance  with,  the
laws or rules  designated in such Letter of Credit,  or if no such laws or rules
are designated,  the Uniform Customs and Practice for Documentary  Credits (1993
Revision),  International Chamber of Commerce, Publication No. 500 (the "Uniform
Customs")  and, as to matters not governed by the Uniform  Customs,  the laws of
the State of New York.  Any legal  action or  proceeding  with  respect  to this
Agreement or any other Credit Document may be brought in the courts of the State
of New York or of the United States for the Southern  District of New York,  and
by execution and delivery of this Agreement (including by execution and delivery
of a Guarantee),  each Credit Party hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally,  the jurisdiction of the
aforesaid courts. Each Credit Party further irrevocably  consents to the service
of  process  out of any of the  aforementioned  courts  in any  such  action  or
proceeding by the mailing of copies  thereof by  registered  or certified  mail,
postage  prepaid,  to the  respective  Credit  Party at its  address for notices
pursuant to Section 10.03,  such service to become  effective 15 days after such
mailing,  and each Credit Party residing outside of the State of New York hereby
irrevocably  appoints ASI at the  following  address as its agent for service of
process out of any of





<PAGE>





the  aforementioned  courts:  American  Standard Inc., 15 West 54th Street,  New
York, NY 10019,  Attention:  Legal  Department.  Nothing herein shall affect the
right of the  Administrative  Agent, any Lender or the holder of any Note or any
Issuing  Bank or the  Collateral  Agent to serve  process  in any  other  manner
permitted by law or to commence legal  proceedings or otherwise  proceed against
any Credit Party in any other jurisdiction.

     (b) Each Credit Party hereby  irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid  actions or
proceedings  arising out of or in  connection  with this  Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further  irrevocably  waives  and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.

     SECTION 10.08.  Counterparts.  This Agreement may be executed in any number
of counterparts  and by the different  parties hereto on separate  counterparts,
each of which when so executed and  delivered  shall be an original,  but all of
which  shall  together  constitute  one  and  the  same  instrument.  A  set  of
counterparts executed by all the parties hereto shall be lodged with ASI and the
Administrative Agent.

     SECTION 10.09. Headings Descriptive;  Entire Agreement. (a) The headings of
the  several  sections  and  subsections  of this  Agreement  are  inserted  for
convenience  only and shall not in any way affect the meaning or construction of
any provision of this Agreement.

     (b) This Agreement and the other Credit  Documents and the other agreements
or documents  specifically  referred to herein  constitute the entire  agreement
among the parties  hereto and thereto  regarding  the subject  matter hereof and
thereof and supersede all prior agreements,  representations  and understandings
relating to such subject matter.

     SECTION  10.10.  Waivers;  Amendment.  (a)  No  failure  or  delay  of  the
Administrative  Agent or any Lender, any Issuing Bank or the Collateral Agent in
exercising any power or right hereunder or under any other Credit Document shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
such right or power,  or any abandonment or  discontinuance  of steps to enforce
such a right or power,  preclude  any other or further  exercise  thereof or the
exercise  of  any  other  right  or  power.  The  rights  and  remedies  of  the
Administrative Agent and the Lenders, the Issuing Banks and the Collateral Agent
hereunder  and under the  other  Credit  Documents  are  cumulative  and are not
exclusive of any rights or remedies which they would  otherwise  have. No waiver
of any  provision of this  Agreement or any other Credit  Document or consent to
any  departure  by any Credit  Party  therefrom  shall in any event be effective
unless the same shall be permitted by paragraph (b) below,  and then such waiver
or consent shall be effective only in the specific  instance and for the purpose
for which  given.  No notice or  demand on any  Credit  Party in any case  shall
entitle such Credit Party to any other or further notice or demand in similar or
other circumstances.

     (b) Neither this Agreement nor any other Credit Document, nor any provision
hereof or thereof, may be waived,  amended or modified (including by the release
of any Obligations of any Credit Party under a Credit  Document) except pursuant
to an agreement or agreements in writing entered into by, or approved in writing
by,  ASI,  any other  affected  Borrower  and the  Required  Lenders;  provided,
however,  that no such agreement shall (i) decrease the principal  amount of, or
extend  the  maturity  of or any  scheduled  principal  payment  date (it  being
understood  that, for purposes of this clause,  principal  payments  required by
Section 2.06 and reductions of the Periodic Access Loan Commitments  required by
Section  2.10(b),  and any related  principal  payments  required  by  paragraph
(b)(ii) of Section 2.11,  shall constitute  scheduled  principal  payments;  but
principal  payments required by paragraphs (b)(i) and (iii), (c), (d) and (e) of
Section 2.11 shall not constitute  scheduled principal payments) or date for the
payment of any interest in respect of, any Loan,  or any date for  reimbursement
of an L/C Disbursement, or waive or excuse any such payment or any part thereof,
or decrease  the rate of interest on any Loan or L/C  Disbursement,  without the
prior written consent of each Lender affected thereby,  (ii) increase the amount
of any Commitment of or impose any additional  obligations on any Lender without
the prior written  consent of such Lender,  or extend any Commitment or decrease
the Fees of any Lender without the prior written  consent of such Lender,  (iii)
amend or modify the  provisions of Section 2.15,  the provisions of this Section
or the definition of "Required  Lenders",  without the prior written  consent of
each affected Lender,





<PAGE>





(iv)  change  the  allocation  among the  Lenders of any  prepayment  made under
Section 2.11 without the prior written consent of each Lender  affected  thereby
(provided  that this clause (iv) shall not be  construed to require any consent,
other than the consent of the Required Lenders or any consent expressly required
by clause (i) above,  to an agreement that would change the amount of, or extend
the date for, or waive or excuse,  any such  prepayment or that would permit any
new tranche of Indebtedness incurred hereunder to share not more than ratably in
any such  prepayment),  (v) effect the  release  of any Lien  granted  under any
Security  Document with respect to any Collateral with a book value in excess of
$50,000,000  during  any  fiscal  year or  $100,000,000  during the term of this
Agreement (in each case net of any released  Collateral which shall subsequently
have been  re-pledged  under the  Security  Documents),  other than as permitted
under the  Credit  Documents,  or effect the  release  of any of ASI,  the other
Borrowers,  or any other Credit Party,  collectively or  individually,  from any
monetary  obligations  under the Credit Documents (except as permitted under the
Credit Documents,  or under  circumstances where any Credit Party to be released
would not have been  required to issue a  Supplemental  Guarantee  under Section
5.12 if the facts on the date of release  had existed  immediately  prior to the
incurrence by such Credit Party of the obligations to be released), in each case
without  the prior  written  consent of each  Lender or as  permitted  under the
Credit  Documents,  (vi)  amend  Article  IX in a manner  adverse  to any Lender
without  the consent of such Lender or (vii)  effect any  waiver,  amendment  or
modification  that  by  its  terms  adversely  affects  the  rights  of  Lenders
participating  in  certain of the Credit  Facilities  differently  from those of
Lenders  participating  in other  Credit  Facilities,  without  the consent of a
majority  in interest of the Lenders  participating  in the  adversely  affected
Credit Facilities or change the relative rights of the Lenders  participating in
different  Credit  Facilities  (other than as contemplated by clause (iv) above)
without the consent of a majority in interest of Lenders  participating  in each
adversely  affected  Credit  Facility;  provided  further that no such agreement
shall  amend,   modify  or  otherwise   affect  the  rights  or  duties  of  the
Administrative Agent or any Issuing Bank or the Swingline Lender hereunder or of
the  Collateral  Agent under any  Security  Document  without the prior  written
consent of the  Administrative  Agent or such Issuing Bank, the Swingline Lender
or the Collateral  Agent,  as the case may be. Each Lender shall be bound by any
waiver,  amendment or  modification  authorized  by this Section  regardless  of
whether  any Note held by it shall have been marked to make  reference  thereto,
and any  consent by any Lender  pursuant to this  Section  shall bind any person
subsequently  acquiring a Note from it, whether or not such Note shall have been
so marked.

     (c) Notwithstanding the foregoing,  any Security Document may, and upon the
request of ASI shall,  be amended or  modified,  without  the  necessity  of any
further approval,  in order to effect the release of the Liens granted under the
Security  Documents  with  respect  to any  Collateral  that  is  being  sold or
otherwise  disposed  of to a person  other  than  Holding,  ASI or a  Subsidiary
thereof (or to ASI or any  Subsidiary to the extent  expressly  contemplated  by
Section 6.02) in a transaction permitted by this Agreement.  Upon the request of
ASI, the Collateral  Agent will, at ASI's  expense,  confirm any such release in
writing, but without  representation or warranty. In the event ASI shall request
that the Collateral  Agent  subordinate  the Lien of any Mortgage to an easement
over a portion of the  affected  Real  Property  granted to any public  utility,
private  utility,  private  utility company or similar entity for the purpose of
installing or maintaining  utility lines or a similar  function,  the Collateral
Agent shall grant such  subordination if ASI (i) shall have made such request in
a written  application to the Collateral  Agent signed by an officer of ASI (who
would be permitted to sign an Officers' Certificate), which application shall be
accompanied by the form of the instrument of subordination  which the Collateral
Agent is requested to execute,  and (ii) shall have certified that, and provided
documentation  satisfactory  to the  Collateral  Agent  that,  such  easement is
necessary for the efficient conduct of the mortgagor's  business at the affected
Real  Property  and such  subordination  will not  impair the value of such Real
Property or the security afforded by the applicable  Mortgage.  In the event ASI
shall request that the  Collateral  Agent  subordinate  the Lien of the Domestic
Security  Agreement on assets  acquired by ASI or any  Subsidiary  in connection
with the purchase of sales offices from third parties to Liens securing purchase
money  Indebtedness  incurred  to  finance  the  purchase  of such  assets,  the
Collateral Agent shall grant such subordination.

     (d) Notwithstanding the foregoing,  any Swingline Loan Agreement or Issuing
Bank  Agreement may be waived,  amended or modified by the parties  thereto with
the written approval of the Administrative  Agent if and to the extent that such
waiver,  amendment or  modification  would be permitted in  connection  with the
execution and delivery of a replacement of such agreement.






<PAGE>





     SECTION 10.11. Survival. (a) All representations and warranties made herein
and in the other Credit  Documents  shall  survive the execution and delivery of
this Agreement and the other Credit Documents, the making of the Loans hereunder
and the  execution  and  delivery  of any Notes  issued and the  issuance of the
Letters of Credit.

     (b)  Notwithstanding  anything in this  Agreement  or implied by law to the
contrary, the agreements of the Borrowers set forth in Sections 2.12, 2.14, 2.18
and 10.01  shall  survive  the  repayment  of the  Loans,  the  cancellation  or
expiration  of the Letters of Credit and the  reimbursement  of any amount drawn
thereunder and the termination of this Agreement.

     SECTION 10.12.  Severability.  In case any provision in or obligation under
this  Agreement  or the other  Credit  Documents  shall be  invalid,  illegal or
unenforceable in any jurisdiction,  the validity, legality and enforceability of
the remaining  provisions or obligations,  or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

     SECTION 10.13.  Independence of Covenants. All covenants hereunder shall be
given  independent  effect so that if a  particular  action or  condition is not
permitted  by any of such  covenants,  the fact that it would be permitted by an
exception to, or be otherwise  within the limitation of, another  covenant shall
not avoid the  occurrence  of a Default or an Event of Default if such action is
taken or condition exists.

     SECTION 10.14. Judgment Currency.  (a) The Borrowers' obligations hereunder
and under the other  Credit  Documents  to make  payments  in  Dollars or in any
Alternative  Currency  (the  "Obligation  Currency")  shall not be discharged or
satisfied  by any tender or recovery  pursuant to any  judgment  expressed in or
converted into any currency other than the  Obligation  Currency,  except to the
extent  that such  tender or recovery  results in the  effective  receipt by the
Administrative  Agent or a Lender of the full amount of the Obligation  Currency
expressed  to be payable to the  Administrative  Agent or such Lender under this
Agreement  or the other  Credit  Documents.  If, for the purpose of obtaining or
enforcing  judgment  against any Borrower or any other Credit Party in any court
or in any  jurisdiction,  it  becomes  necessary  to  convert  into or from  any
currency  other  than  the  Obligation   Currency  (such  other  currency  being
hereinafter  referred  to as  the  "Judgment  Currency")  an  amount  due in the
Obligation  Currency,  the conversion shall be made, at the Alternative Currency
Equivalent  or Dollar  Equivalent,  in the case of any  Alternative  Currency or
Dollars,  and, in the case of other currencies,  the rate of exchange (as quoted
by the Administrative Agent or if the Administrative Agent does not quote a rate
of exchange on such currency,  by a known dealer in such currency  designated by
the Administrative  Agent) determined,  in each case, as of the date immediately
preceding  the day on which  the  judgment  is given  (such  Business  Day being
hereinafter referred to as the "Judgment Currency Conversion Date").

     (b) If there is a change in the rate of  exchange  prevailing  between  the
Judgment  Currency  Conversion Date and the date of actual payment of the amount
due,  the  Borrowers  covenant  and  agree to pay,  or  cause  to be paid,  such
additional  amounts,  if any (but in any event not a lesser  amount),  as may be
necessary  to  ensure  that  the  amount  paid in the  Judgment  Currency,  when
converted  at the  rate of  exchange  prevailing  on the date of  payment,  will
produce the amount of the  Obligation  Currency  which could have been purchased
with the amount of  Judgment  Currency  stipulated  in the  judgment or judicial
award at the rate of exchange  prevailing  on the Judgment  Currency  Conversion
Date.

     (c) For purposes of  determining  the  Alternative  Currency  Equivalent or
Dollar  Equivalent  or rate of exchange for this  Section,  such  amounts  shall
include any premium and costs  payable in  connection  with the  purchase of the
Obligation Currency.

     SECTION 10.15.  Confidentiality.  Each Lender agrees (which agreement shall
survive  the  termination  of  this   Agreement)  that  financial   information,
information  from any Borrower's books and records,  information  concerning any
Borrower's trade secrets and patents and any other information received from the
Borrowers  hereunder  which  at the  time  of  receipt  is  clearly  labeled  as
confidential  and subject to this Section 10.15 shall be treated as confidential
by such  Lender,  and each Lender  agrees to use its best efforts to ensure that
such  information  is not published,  disclosed or otherwise  divulged to anyone
other than  employees  or  officers  of such  Lender and its counsel and agents;
provided it is understood that the foregoing shall not apply to:





<PAGE>






     (i) disclosure made with the prior written authorization of a Borrower;

     (ii) disclosure of information (other than that received from the Borrowers
prior to or under this Agreement) already known by, or in the possession of such
Lender  without  restrictions  on  the  disclosure  thereof  at  the  time  such
information is supplied to such Lender by the Borrowers hereunder;

(iii)  disclosure of  information  which is required by applicable  law or legal
process or to a governmental agency having supervisory  authority over any party
hereto;

     (iv)  disclosure  of  information  to the extent  necessary or advisable in
connection  with  any  suit,   action  or  proceeding  in  connection  with  the
enforcement  of  rights  hereunder  or under  any other  Credit  Document  or in
connection with the transactions contemplated hereby or thereby;

     (v)  disclosure  to any bank (or  other  financial  institution)  which may
acquire a  participation  or other interest in the Loans or rights of any Lender
hereunder or under the other Credit Documents; provided that such bank (or other
financial institution) agrees to maintain any such information to be received in
accordance with the provisions of this Section 10.15;

     (vi)  disclosure  by any party  hereto to any other  party  hereto or their
counsel or agents;

     (vii)  disclosure  by any party  hereto to its  Affiliates  subject  to the
confidentiality obligations of this Section; or

     (viii)  disclosure of information  that prior to such disclosure has become
public knowledge through no violation of this Agreement.




<PAGE>













     SECTION 10.16. Negotiation in the Event of Certain Tax Law Changes. Each of
ASI, each other  Borrower and each Lender agrees that in the event any change in
the tax laws of any  jurisdiction  outside  the United  States  shall  limit the
deductibility  of interest on any of the Loans in determining the taxable income
of ASI or any  Subsidiary,  it will,  at the request of ASI,  negotiate  in good
faith with the other  parties  hereto with a view to agreeing in a timely manner
upon changes  acceptable  in good faith to ASI and the  Required  Lenders to the
Credit  Documents  and the guarantee and  collateral  arrangements  provided for
herein that would  restore  such  deductibility  without  imposing  any material
additional  risk upon any party hereto or any fee or other  similar cost on ASI.
Notwithstanding  any provision of Section 10.10(b) to the contrary,  any changes
contemplated by the preceding sentence shall be effected by a waiver,  amendment
or  modification  entered  into by, or approved  in writing  by, ASI,  any other
affected Borrower and the Required Lenders.

     SECTION 10.17.  Waiver of Jury Trial.  Each party hereto hereby waives,  to
the fullest extent permitted by applicable law, any right it may have to a trial
by jury in respect of any  litigation  directly  or  indirectly  arising out of,
under or in connection with this Agreement or any of the other Credit Documents.
Each party hereto (a) certifies that no representative, agent or attorney or any
other party has represented, expressly or otherwise, that such other party would
not, in the event of  litigation,  seek to enforce the foregoing  waiver and (b)
acknowledges  that it and the other  parties  hereto have been  induced to enter
into this Agreement and the other Credit  Documents,  as  applicable,  by, among
other things, the mutual waivers and certifications in this Section 10.17.

     SECTION 10.18.  Miscellaneous.  For the purposes of disclosure  pursuant to
the  Interest  Act  (Canada)  the yearly  rate of  interest to which any rate of
interest  calculated  on the  basis of a year of 360 days is  equivalent  may be
determined by multiplying  the applicable  rate by a fraction,  the numerator of
which is the number of days in the  calendar  year in which the period for which
interest at such rate is payable ends and the denominator of which is 360.


     IN WITNESS WHEREOF,  each of the parties hereto has caused a counterpart of
this  Agreement  to be duly  executed  and  delivered as of the date first above
written.


Notice Address:                               AMERICAN STANDARD COMPANIES INC.,
One Centennial Avenue
Piscataway, NJ 08855 
Attention: Treasurer                         /s/ Thomas S. Battaglia
                                             Name: Thomas S. Battaglia
                                             Title: Vice President and Treasurer

                                             BORROWERS:

Notice Address:                               AMERICAN STANDARD INC.,
One Centennial Avenue
Piscataway, NJ 08855                          by
Attention: Treasurer                         /s/ Thomas S. Battaglia
                                             Name: Thomas S. Battaglia
                                             Title: Vice President and Treasurer

Notice Address:                              AMERICAN STANDARD CREDIT INC.,
13-15 West 54th Street
New York, NY 10019                           by
Attention: Secretary                         /s/ Thomas S. Battaglia
                                             Name: Thomas S. Battaglia
                                             Title: Vice President and Treasurer






<PAGE>





*Notice Address:                                   WABCO STANDARD GMBH,
Euskirchener Strasse 80
5300 Bonn 1, Germany                               by
Attention: Director Finance                        /s/ Thomas S. Battaglia
                                                   Name: Thomas S. Battaglia
                                                   Title: Attorney-in-Fact

*Notice Address:                                   AMERICAN STANDARD (UK)
LIMITED,
90 Newbold Road
Rugby, Warwickshire by
CV21 2ND                                           /s/ Thomas S. Battaglia
UNITED KINGDOM                                     Name: Thomas S. Battaglia
Attention: Vice President and General Manager      Title: Attorney-in-Fact

*Notice Address:                                   STANDARD EUROPE, a European
Economic                                              Interest Grouping,
c/o WABCO Westinghouse 
Equipments Automobiles                             by
Avenue Aristide Briand 44                          /s/ Thomas S. Battaglia
77411 Claye-Souilly                                Name: Thomas S. Battaglia
FRANCE                                             Title: Attorney-in-Fact
Attention: Director Finance and Administration

*Notice Address:                                   WABCO STANDARD TRANE INC.,
1401 Dupont Street
Toronto, Ontario                                   by
CANADA M6H 2B1                                     /s/ Thomas S. Battaglia
Attention: Vice President Control and Finance      Name: Thomas S. Battaglia
                                                   Title: Authorized Signing 
                                                               Officer

*Notice Address:                                   WABCO STANDARD TRANE B.V.,
Jupiterstraat 254
2132 HK Hoofddorp                                  by
The Netherlands                                    /s/ Thomas S. Battaglia
Attention: Managing Director                       Name: Thomas S. Battaglia
                                                   Title: Attorney-in-Fact

                                          ADMINISTRATIVE AGENT:

                                          CHEMICAL BANK, individually and as
                                              Administrative Agent,

                                              by
                                             /s/ Robert Gaynor
                                             Name: Robert Gaynor
                                             Title: Vice President







<PAGE>





SENIOR MANAGING AGENTS:

CITIBANK, N.A., individually and as Senior
Managing Agent,

by
/s/ Judith C. Fishlow
Name: Judith C. Fishlow
Title: Vice President

NATIONSBANK, N.A. (CAROLINAS),
individually and as Senior Managing Agent,

by
/s/ Christopher C. Browder
Name: Christopher C. Browder
Title: Vice President


MANAGING AGENTS:

BANK OF AMERICA ILLINOIS, individually and
as Managing Agent,

by
/s/ Phillip F. Van Winkle
Name: Phillip F. Van Winkle
Title: Vice President

THE BANK OF NOVA SCOTIA, individually and
as Managing Agent,

by
/s/ J. W. Campbell
Name: J. W. Campbell
Title: Vice President/Agent

BANKERS TRUST COMPANY, individually and as
Managing Agent,

by
/s/ Mary Kay Coyle
Name: Mary Kay Coyle
Title: Vice President

THE CHASE MANHATTAN BANK, N.A.,
individually and as Managing Agent,

by
/s/ Carol A. Ulmer
Name: Carol A. Ulmer
Title: Vice President






<PAGE>





COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE, individually and as
Managing Agent,

by
/s/ Sean Mounier
Name: Sean Mounier
Title: First Vice President

by
/s/ Brian O'Leary
Name: Brian O'Leary
Title: Vice President

CREDIT SUISSE, individually and as Managing
Agent,

by
/s/ Andrea Shkane
Name: Andrea Shkane
Title: Associate

by
/s/ Christopher J. Eldin
Name: Christopher J. Eldin
Title: Member of Senior Management

DEUTSCHE BANK AG, New York and/or Cayman  Islands  Branch,  individually  and as
Managing Agent,

by
/s/ Christopher S. Hall
Name: Christopher S. Hall
Title: Vice President

by
/s/ Daphne K. Lee
Name: Daphne K. Lee
Title: Assistant Vice President

THE INDUSTRIAL BANK OF JAPAN TRUST
COMPANY, individually and as Managing Agent,

by
/s/ Junri Oda
Name: Junri Oda
Title: Senior Vice President and Senior
Manager

THE LONG TERM CREDIT BANK OF JAPAN,
LIMITED, individually and as Managing Agent,

by
/s/ Rene O. LeBlanc
Name: Rene O. LeBlanc
Title: Deputy General Manager






<PAGE>





THE SUMITOMO BANK, LTD., individually and
as Managing Agent,

by
/s/ Yoshinori Kawamura
Name: Yoshinori Kawamura
Title: Joint General Manager


CO-AGENTS:

THE BANK OF NEW YORK, individually and as
Co-Agent,

by
/s/ Peter H. Abdill
Name: Peter H. Abdill
Title: Assistant Vice President

CANADIAN IMPERIAL BANK OF COMMERCE,
individually and as Co-Agent,

by
/s/ E. Lindsay Gordon
Name: E. Lindsay Gordon
Title: Authorized Signatory

THE FUJI BANK, LIMITED, individually and as
Co-Agent,

by
/s/ Katsunori Nozawa
Name: Katsunori Nozawa
Title: Vice President and Manager

THE SANWA BANK LIMITED, individually and as
Co-Agent,

by
/s/ Paul Judicke
Name: Paul Judicke
Title: Assistant Vice President


LENDERS:

BANCA COMMERCIALE ITALIANA,

by
/s/ Charles Dougherty
Name: Charles Dougherty
Title: Vice President

by
/s/ Sarah Kim
Name: Sarah Kim
Title: Assistant Vice President






<PAGE>





BANK OF SCOTLAND,

by
/s/ Catherine M. Oniffrey
Name: Catherine M. Oniffrey
Title: Vice President

BANQUE PARIBAS,

by
/s/ David C. Buseck
Name: David C. Buseck
Title: Vice President

by
/s/ Jeffrey J. Youle
Name: Jeffrey J. Youle
Title: Senior Vice President

CREDIT LYONNAIS, NEW YORK BRANCH,

by
/s/ Frederick Haddad
Name: Frederick Haddad
Title: Senior Vice President

CREDITO ITALIANO,

by
/s/ Harmon P. Butler
Name: Harmon P. Butler
Title: First Vice President

by
/s/ Saiyed A. Abbas
Name: Saiyed A. Abbas
Title: Assistant Vice President

DRESDNER BANK AG, NEW YORK AND
CAYMAN BRANCHES,

by
/s/ Richard W. Conroy
Name: Richard W. Conroy
Title: Vice President

by
/s/ Andrew K. Mittag
Name: Andrew K. Mittag
Title: Vice President

FLEET BANK OF MASSACHUSETTS, N.A.,

by
/s/ Kimberly S. Kersten
Name: Kimberly S. Kersten
Title: Assistant Vice President






<PAGE>





THE HOKKAIDO TAKUSHOKU BANK, LTD.,

by
/s/ Hiromoto Ishizuka
Name: Hiromoto Ishizuka
Title: Vice President and Manager

THE MITSUBISHI BANK, LTD.,

by
/s/ Naoto Hirota
Name: Naoto Hirota
Title: Vice President

THE MITSUBISHI TRUST AND BANKING
CORPORATION,

by
/s/ Patricia Loret de Mola
Name: Patricia Loret de Mola
Title: Senior Vice President

NATIONAL CITY BANK,

by
/s/ Jeffrey J. Tengel
Name: Jeffrey J. Tengel
Title: Vice President

NBD BANK,

by
/s/ Timothy J. King
Name: Timothy J. King
Title: Assistant Vice President

THE SAKURA BANK, LIMITED,

by
/s/ Masahiro Nakajo
Name: Masahiro Nakajo
Title: Senior Vice President and Manager

SOCIETE GENERALE,

by
/s/ Salvatore Galatioto
Name: Salvatore Galatioto
Title: Vice President

THE SUMITOMO TRUST AND BANKING CO.,
LTD., NEW YORK BRANCH,

by
/s/ Suraj P. Bhatia
Name: Suraj P. Bhatia
Title: Senior Vice President






<PAGE>




THE TORONTO-DOMINION BANK,

by
/s/ Kimberly Burleson
Name: Kimberly Burleson
Title: Manager Credit Administration

UNION BANK OF FINLAND, LTD.,

by
/s/ Pentti Mansukoski
Name: Pentti Mansukoski
Title: Senior Vice President

by
/s/ Eric I. Mann
Name: Eric I. Mann
Title: Vice President

UNITED STATES NATIONAL BANK OF
OREGON,

by
/s/ Chris J. Karlin
Name: Chris J. Karlin
Title: Vice President
<PAGE>
                                                                EXHIBIT A to the
                                                                Credit Agreement


                                        FORM OF BORROWING REQUEST


Chemical Bank,
Administrative Agent
for the Lenders referred to below,
[270 Park Avenue
New York, NY 10017]

Attention:                                                               [Date]

Dear Sirs:

     The undersigned (the "Borrower")  refers to the Amended and Restated Credit
Agreement  dated as of  February  9, 1995 (as  amended,  modified,  extended  or
restated from time to time, the "Credit  Agreement"),  among  American  Standard
Companies  Inc.,  American  Standard  Inc.,  certain  subsidiaries  of  American
Standard Inc., the Lenders,  Senior  Managing  Agents,  Managing  Agents and Co-
Agents named therein,  and Chemical Bank, as Administrative  Agent.  Capitalized
terms used  herein and not  otherwise  defined  herein  shall have the  meanings
assigned to such terms in the Credit  Agreement.  The Borrower  hereby gives you
notice  pursuant  to Section  2.03 of the Credit  Agreement  that it  requests a
Borrowing  under the Credit  Agreement,  and in that connection sets forth below
the terms on which such Borrowing is requested to be made:

1.Name of Borrower: _____________________

2.Credit Facility under which Borrowing is to be made: _______________________ /

3.Interest Rate Option: ____________________ /

4.Funds are requested to be disbursed to the following:

                           Bank Name:  ______________________________
                           Bank Address:  ___________________________

                           For Credit to:

                           Account Name:  ___________________________
                           Account Number:  _________________________ /

         5.  Date of Borrowing (which is a Business Day):  __________________

 1/  $  U.S.  Revolving  Credit  Borrowing;   Multi-Currency   Revolving  Credit
Borrowing;  Periodic  Access  Borrowing  (only  on  Effective  Date or  during a
Periodic  Access  Availability  Period);  or Term  Borrowing  (only on Effective
Date).

 2/ LIBOR Borrowing or (if  denominated in Dollars or Lenders  consent) ABR
Borrowing.

 3/ See Section 2.02(c) of Credit Agreement.


<PAGE>


 

6. Principal Amount of Borrowing: ________________ /

7. Currency of Borrowing: ________________________ /

8. Interest Period (if a LIBOR Borrowing): __________________ /

     Upon  acceptance of any or all of the Loans made by the Lenders in response
to this request,  the Borrower shall be deemed to have represented and warranted
that the  conditions  to lending  specified  in Sections  4.01(b) and (c) of the
Credit Agreement have been satisfied.

     Without  limiting the  foregoing,  the Borrower  shall further be deemed to
have represented,  upon such acceptance, that on the basis of (i) such inquiries
as one or more  Financial  Officers of ASI shall have deemed  necessary and (ii)
advice of  counsel  (which may be  general  advice or advice as to a  particular
Borrowing),  the requested  Borrowing is permitted under the provisions limiting
Indebtedness in each Indenture to which ASI is party.


                                      Very truly yours,

                                      [NAME OF BORROWER],

                                       by
                                       -----------------------------
                                      Title:  [Responsible Officer]

--------
4/ Expressed in Dollars. See Section 2.02(a) of Credit Agreement for 
   restrictions.
5/ Dollars or an Alternative Currency; must be Dollars for Term Borrowings.
6/ Which shall be subject to the definition of "Interest Period" and end not
later than the applicable Maturity Date.
<PAGE>

                                                                     EXHIBIT B-1







                               FORM OF TERM NOTE


                                                              New York, New York
                                                                [Effective Date]


     FOR VALUE RECEIVED,  the undersigned,  [NAME OF BORROWER], a [] corporation
(the  "Borrower"),  hereby  promises  to pay to [the order of [NAME OF  LENDER]]
[[NAME OF  LENDER]  or  registered  assigns]  (the  "Lender"),  at the office of
Chemical Bank (the  "Administrative  Agent"),  at 270 Park Avenue, New York, New
York 10017 or such other place as the Administrative Agent shall have specified,
on the Term Facility Maturity Date (as defined in the Credit Agreement  referred
to below),  the aggregate  unpaid principal amount of all Term Loans made by the
Lender to the Borrower pursuant to the Credit Agreement, in Dollars, in same day
funds,  and to pay interest from the date hereof on such  principal  amount from
time to time outstanding,  in like funds, at said office, at a rate or rates per
annum and payable on such dates as determined  pursuant to the Credit Agreement.
This Note is one of the Term  Notes  referred  to in the  Amended  and  Restated
Credit Agreement dated as of February 9, 1995 (as amended, modified, extended or
restated from time to time, the "Credit  Agreement"),  among  American  Standard
Companies  Inc.,  American  Standard  Inc.,  certain  subsidiaries  of  American
Standard  Inc.,  the  Lenders,  Senior  Managing  Agents,  Managing  Agents  and
Co-Agents named therein,  and Chemical Bank, as Administrative  Agent. This Note
is  entitled  to the  benefits  under the  Credit  Agreement  and is  secured as
provided therein. Capitalized terms used in this Note and not defined herein are
used as defined in the Credit Agreement.

     The Borrower promises to pay interest,  on demand, on any overdue principal
and, to the extent  permitted by law, overdue interest from their due dates at a
rate or rates determined as set forth in the Credit Agreement.

     The Borrower  hereby waives  diligence,  presentment,  demand,  protest and
notice  of any kind  whatsoever.  The  nonexercise  by the  holder of any of its
rights  hereunder  in any  particular  instance  shall not  constitute  a waiver
thereof in that or any subsequent instance.

     All payments in respect of the principal of and interest on this Note shall
be made to the person  named in the Register and recorded in the Register as the
holder of this Note, as described  more fully in Section  10.04(d) of the Credit
Agreement,  and such  person  shall be treated as the Lender  hereunder  for all
purposes of the Credit Agreement.

     All borrowings  evidenced by this Note and all payments and  prepayments of
the principal  hereof and interest hereon and the respective dates thereof shall
be endorsed by the holder hereof on the schedule attached hereto and made a part
hereof,  or on a continuation  thereof which shall be attached hereto and made a
part  hereof,  or  otherwise  recorded by such holder in its  internal  records;
provided, however, that any failure of the holder hereof to make such a notation
or any error in such notation  shall not in any manner affect the  obligation of
the Borrower to make payments of principal  and interest in accordance  with the
terms of this Note and the Credit Agreement.

     The Credit  Agreement,  among other  things,  contains  provisions  for the
acceleration of the maturity  hereof upon the happening of certain  events,  for
optional and mandatory  prepayment of the principal hereof prior to the maturity
hereof,  for the  assignment  hereof and for the  amendment or waiver of certain
provisions of the Credit  Agreement,  all upon the terms and conditions  therein
specified.  THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE  WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK OF THE UNITED STATES OF AMERICA.





<PAGE>



                                                             [NAME OF BORROWER],


                                             by ________________________________
                                                                          Title:








<PAGE>














                               Loans and Payments





Date         Amount       Interest       Payments        Unpaid        Name of
             and Type      Period   Principal  Interest  Principal     Person
             of Loan                                     Balance       Making
                                                          of Note       Notation

<PAGE>
                                                                    EXHIBIT B-2



                          FORM OF PERIODIC ACCESS NOTE


                                                              New York, New York
                                                                [Effective Date]


     FOR VALUE RECEIVED, the undersigned,  [NAME OF BORROWER], a [ ] corporation
(the  "Borrower"),  hereby  promises  to pay to [the order of [NAME OF  LENDER]]
[[NAME OF  LENDER]  or  registered  assigns]  (the  "Lender"),  at the office of
Chemical Bank (the  "Administrative  Agent"),  at 270 Park Avenue, New York, New
York 10017 or such other place as the Administrative Agent shall have specified,
on the  Periodic  Access  Maturity  Date (as  defined  in the  Credit  Agreement
referred to below), the aggregate unpaid principal amount of all Periodic Access
Loans made by the Lender to the Borrower  pursuant to the Credit  Agreement,  in
the respective  currency or currencies in which such Periodic  Access Loans were
made,  in same day  funds,  and to pay  interest  from the date  hereof  on such
principal amount from time to time  outstanding,  in like funds, at said office,
at a rate or rates per annum and payable on such dates as determined pursuant to
the Credit Agreement.  This Note is one of the Periodic Access Notes referred to
in the Amended and Restated  Credit  Agreement  dated as of February 9, 1995 (as
amended,  modified,  extended  or  restated  from  time  to  time,  the  "Credit
Agreement"),  among American  Standard  Companies Inc.,  American Standard Inc.,
certain  subsidiaries  of American  Standard Inc., the Lenders,  Senior Managing
Agents,  Managing  Agents and Co-Agents  named  therein,  and Chemical  Bank, as
Administrative  Agent.  This Note is entitled to the  benefits  under the Credit
Agreement  and is secured as provided  therein.  Capitalized  terms used in this
Note and not defined herein are used as defined in the Credit Agreement.

     The Borrower promises to pay interest,  on demand, on any overdue principal
and, to the extent  permitted by law, overdue interest from their due dates at a
rate or rates determined as set forth in the Credit Agreement.

     The Borrower  hereby waives  diligence,  presentment,  demand,  protest and
notice  of any kind  whatsoever.  The  nonexercise  by the  holder of any of its
rights  hereunder  in any  particular  instance  shall not  constitute  a waiver
thereof in that or any subsequent instance.

     All payments in respect of the principal of and interest on this Note shall
be made to the person  named in the Register and recorded in the Register as the
holder of this Note, as described  more fully in Section  10.04(d) of the Credit
Agreement,  and such  person  shall be treated as the Lender  hereunder  for all
purposes of the Credit Agreement.


                                      
<PAGE>

     All  borrowings  evidenced by this Note and the currency or  currencies  in
which  such  borrowings  were  made  and all  payments  and  prepayments  of the
principal  hereof and interest hereon and the respective  dates thereof shall be
endorsed by the holder  hereof on the schedule  attached  hereto and made a part
hereof,  or on a continuation  thereof which shall be attached hereto and made a
part  hereof,  or  otherwise  recorded by such holder in its  internal  records;
provided, however, that any failure of the holder hereof to make such a notation
or any error in such notation  shall not in any manner affect the  obligation of
the Borrower to make payments of principal  and interest in accordance  with the
terms of this Note and the Credit Agreement.

     The Credit  Agreement,  among other  things,  contains  provisions  for the
acceleration of the maturity  hereof upon the happening of certain  events,  for
optional and mandatory  prepayment of the principal hereof prior to the maturity
hereof,  for the  assignment  hereof and for the  amendment or waiver of certain
provisions of the Credit  Agreement,  all upon the terms and conditions  therein
specified.  THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE  WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK OF THE UNITED STATES OF AMERICA.


     [NAME OF BORROWER],


     by________________________________
     Title:


<PAGE>


                                                              Loans and Payments




Date  Amount    Interest     Payments          Unpaid     Name of
      and Type  Period   Principal  Interest   Principal  Person
      of Loan                                  Balance    Making
                                                             of Note    Notation


<PAGE>
                                                                     EXHIBIT B-3










                      FORM OF U.S. $ REVOLVING CREDIT NOTE


                                                              New York, New York
                                                                [Effective Date]


     FOR VALUE RECEIVED, the undersigned,  [NAME OF BORROWER], a [ ] corporation
(the  "Borrower"),  hereby  promises  to pay to [the order of [NAME OF  LENDER]]
[[NAME  OF  LENDER]  or  registered  assigns](the  "Lender"),  at the  office of
Chemical Bank (the  "Administrative  Agent"),  at 270 Park Avenue, New York, New
York 10017 or such other place as the Administrative Agent shall have specified,
on (i) the last day of the Interest  Period (as defined in the Credit  Agreement
referred to below) in respect of each U.S. $  Revolving  Credit Loan made by the
Lender to the Borrower  pursuant to the Credit  Agreement,  the aggregate unpaid
principal  amount of such U.S.  $  Revolving  Credit  Loan,  and (ii) the U.S. $
Revolving Credit Maturity Date (as defined in the Credit  Agreement  referred to
below),  the aggregate  unpaid  principal  amount of all U.S. $ Revolving Credit
Loans made by the Lender to the Borrower  pursuant to the Credit  Agreement,  in
Dollars,  in same day funds,  and to pay  interest  from the date hereof on such
principal amount from time to time  outstanding,  in like funds, at said office,
at a rate or rates per annum and payable on such dates as determined pursuant to
the Credit  Agreement.  This Note is one of the U.S. $  Revolving  Credit  Notes
referred to in the Amended and Restated Credit Agreement dated as of February 9,
1995 (as amended, modified,  extended or restated from time to time, the "Credit
Agreement"),  among American  Standard  Companies Inc.,  American Standard Inc.,
certain  subsidiaries  of American  Standard Inc., the Lenders,  Senior Managing
Agents,  Managing  Agents and Co-Agents  named  therein,  and Chemical  Bank, as
Administrative  Agent.  This Note is entitled to the  benefits  under the Credit
Agreement  and is secured as provided  therein.  Capitalized  terms used in this
Note and not defined herein are used as defined in the Credit Agreement.

     The Borrower promises to pay interest,  on demand, on any overdue principal
and, to the extent  permitted by law, overdue interest from their due dates at a
rate or rates determined as set forth in the Credit Agreement.

     The Borrower  hereby waives  diligence,  presentment,  demand,  protest and
notice  of any kind  whatsoever.  The  nonexercise  by the  holder of any of its
rights  hereunder  in any  particular  instance  shall not  constitute  a waiver
thereof in that or any subsequent instance.

     All payments in respect of the principal of and interest on this Note shall
be made to the person  named in the Register and recorded in the Register as the
holder of this Note, as described  more fully in Section  10.04(d) of the Credit
Agreement,  and such  person  shall be treated as the Lender  hereunder  for all
purposes of the Credit Agreement.

     All borrowings  evidenced by this Note and all payments and  prepayments of
the principal  hereof and interest hereon and the respective dates thereof shall
be endorsed by the holder hereof on the schedule attached hereto and made a part
hereof,  or on a continuation  thereof which shall be attached hereto and made a
part  hereof,  or  otherwise  recorded by such holder in its  internal  records;
provided, however, that any failure of the holder hereof to make such a notation
or any error in such notation  shall not in any manner affect the  obligation of
the Borrower to make payments of principal  and interest in accordance  with the
terms of this Note and the Credit Agreement.

     The Credit  Agreement,  among other  things,  contains  provisions  for the
acceleration of the maturity  hereof upon the happening of certain  events,  for
optional and mandatory  prepayment of the principal hereof prior to the maturity
hereof,  for the  assignment  hereof and for the  amendment or waiver of certain
provisions of the Credit  Agreement,  all upon the terms and conditions  therein
specified.  THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE  WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK OF THE UNITED STATES OF AMERICA.


                                                             [NAME OF BORROWER],


                                             by ________________________________
                                                                          Title:


<PAGE>


                                                              Loans and Payments




Date   Amount   Interest     Payments           Unpaid     Name of
       and Type Period   Principal  Interest    Principal  Person
       of Loan                                  Balance    Making
                                                             of Note    Notation
<PAGE>
                                                                  EXHIBIT B-4








                  FORM OF MULTI-CURRENCY REVOLVING CREDIT NOTE


                                                              New York, New York
                                                                [Effective Date]


     FOR VALUE RECEIVED, the undersigned,  [NAME OF BORROWER], a [ ] corporation
(the  "Borrower"),  hereby  promises  to pay to [the order of [NAME OF  LENDER]]
[[NAME OF  LENDER]  or  registered  assigns]  (the  "Lender"),  at the office of
Chemical Bank (the  "Administrative  Agent"),  at 270 Park Avenue, New York, New
York 10017 or such other place as the Administrative Agent shall have specified,
on (i) the last day of the Interest  Period (as defined in the Credit  Agreement
referred to below) in respect of each Multi-Currency  Revolving Credit Loan made
by the Lender to the Borrower  pursuant to the Credit  Agreement,  the aggregate
unpaid principal amount of such Multi- Currency  Revolving Credit Loan, and (ii)
the  Multi-Currency  Revolving  Credit  Maturity  Date (as defined in the Credit
Agreement  referred to below),  the  aggregate  unpaid  principal  amount of all
Multi-Currency  Revolving  Credit  Loans  made  by the  Lender  to the  Borrower
pursuant to the Credit  Agreement,  in each case in the  respective  currency or
currencies  in which such  Multi-Currency  Revolving  Credit Loans were made, in
same day  funds,  and to pay  interest  from the date  hereof on such  principal
amount from time to time  outstanding,  in like funds, at said office, at a rate
or rates per annum and  payable  on such  dates as  determined  pursuant  to the
Credit Agreement.  This Note is one of the Multi-Currency Revolving Credit Notes
referred to in the Amended and Restated Credit Agreement dated as of February 9,
1995 (as amended, modified,  extended or restated from time to time, the "Credit
Agreement"),  among American  Standard  Companies Inc.,  American Standard Inc.,
certain  subsidiaries  of American  Standard Inc., the Lenders,  Senior Managing
Agents,  Managing  Agents and Co-Agents  named  therein,  and Chemical  Bank, as
Administrative  Agent.  This Note is entitled to the  benefits  under the Credit
Agreement  and is secured as provided  therein.  Capitalized  terms used in this
Note and not defined herein are used as defined in the Credit Agreement.

     The Borrower promises to pay interest,  on demand, on any overdue principal
and, to the extent  permitted by law, overdue interest from their due dates at a
rate or rates determined as set forth in the Credit Agreement.

     The Borrower  hereby waives  diligence,  presentment,  demand,  protest and
notice  of any kind  whatsoever.  The  nonexercise  by the  holder of any of its
rights  hereunder  in any  particular  instance  shall not  constitute  a waiver
thereof in that or any subsequent instance.

     All payments in respect of the principal of and interest on this Note shall
be made to the person  named in the Register and recorded in the Register as the
holder of this Note, as described  more fully in Section  10.04(d) of the Credit
Agreement,  and such  person  shall be treated as the Lender  hereunder  for all
purposes of the Credit Agreement.

     All  borrowings  evidenced by this Note and the currency or  currencies  in
which  such  borrowings  were  made  and all  payments  and  prepayments  of the
principal  hereof and interest hereon and the respective  dates thereof shall be
endorsed by the holder  hereof on the schedule  attached  hereto and made a part
hereof,  or on a continuation  thereof which shall be attached hereto and made a
part  hereof,  or  otherwise  recorded by such holder in its  internal  records;
provided, however, that any failure of the holder hereof to make such a notation
or any error in such notation  shall not in any manner affect the  obligation of
the Borrower to make payments of principal  and interest in accordance  with the
terms of this Note and the Credit Agreement.




<PAGE>

     The Credit  Agreement,  among other  things,  contains  provisions  for the
acceleration of the maturity  hereof upon the happening of certain  events,  for
optional and mandatory  prepayment of the principal hereof prior to the maturity
hereof,  for the  assignment  hereof and for the  amendment or waiver of certain
provisions of the Credit  Agreement,  all upon the terms and conditions  therein
specified.  THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE  WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK OF THE UNITED STATES OF AMERICA.


                                                             [NAME OF BORROWER],


                                             by ________________________________
                                                                          Title:







<PAGE>



                                                              Loans and Payments






Date   Amount   Interest     Payments           Unpaid     Name of
       and Type Period   Principal  Interest    Principal  Person
       of Loan                                  Balance    Making
                                                             of Note    Notation
<PAGE>
                                                                     EXHIBIT B-5








                             FORM OF SWINGLINE NOTE


                                                              New York, New York
                                                                [Effective Date]


     FOR VALUE RECEIVED, the undersigned,  [NAME OF BORROWER], a [ ] corporation
(the  "Borrower"),  hereby  promises  to pay to [the order of [NAME OF  LENDER]]
[[NAME OF LENDER] or registered assigns] (the "Lender"), at the office specified
in or pursuant to the Swingline Loan Agreement  referred to below, the aggregate
unpaid  principal  amount  of each  Swingline  Loan  made by the  Lender  to the
Borrower  pursuant to the  Swingline  Loan  Agreement  and the Credit  Agreement
referred to below,  in the currency in which such  Swingline  Loan was made,  in
same day funds,  on (i) the last day of the  Interest  Period (as defined in the
Credit  Agreement  referred to below) with respect to such  Swingline  Loan, and
(ii) the Multi-Currency Revolving Credit Maturity Date (as defined in the Credit
Agreement  referred  to below) and to pay  interest  from the date hereof on the
principal amount of such Swingline Loans from time to time outstanding,  in like
funds, at said office, at a rate or rates per annum and payable on such dates as
determined  pursuant to the Credit Agreement.  This Note is one of the Swingline
Notes  referred to in the  Amended and  Restated  Credit  Agreement  dated as of
February 9, 1995 (as amended, modified,  extended or restated from time to time,
the "Credit  Agreement"),  among  American  Standard  Companies  Inc.,  American
Standard  Inc.,  certain  subsidiaries  of American  Standard Inc., the Lenders,
Senior  Managing  Agents,  Managing  Agents and  Co-Agents  named  therein,  and
Chemical Bank, as Administrative Agent. This Note evidences Swingline Loans made
by the Lender pursuant to the Credit  Agreement and the Swingline Loan Agreement
dated as of June 1, 1993 (as amended,  modified,  extended or restated from time
to time, the "Swingline Loan  Agreement"),  between the Borrower and the Lender,
which  supplements the Credit  Agreement.  This Note is entitled to the benefits
under the Credit Agreement and is secured as provided therein. Capitalized terms
used in this Note and not  defined  herein are used as defined in the  Swingline
Loan Agreement and the Credit Agreement.

     The Borrower promises to pay interest,  on demand, on any overdue principal
and, to the extent  permitted by law, overdue interest from their due dates at a
rate or rates determined as set forth in the Credit Agreement.

     The Borrower  hereby waives  diligence,  presentment,  demand,  protest and
notice  of any kind  whatsoever.  The  nonexercise  by the  holder of any of its
rights  hereunder  in any  particular  instance  shall not  constitute  a waiver
thereof in that or any subsequent instance.

     All payments in respect of the principal of and interest on this Note shall
be made to the person  named in the register and recorded in the Register as the
holder of this Note, as described  more fully in Section  10.04(d) of the Credit
Agreement,  and such  person  shall be treated as the Lender  hereunder  for all
purposes of the Credit Agreement.

     All  borrowings  evidenced by this Note and the currency or  currencies  in
which  such  borrowings  were  made  and all  payments  and  prepayments  of the
principal  hereof and interest hereon and the respective  dates thereof shall be
endorsed by the holder  hereof on the schedule  attached  hereto and made a part
hereof,  or on a continuation  thereof which shall be attached hereto and made a
part  hereof,  or  otherwise  recorded by such holder in its  internal  records;
provided, however, that any failure of the holder hereof to make such a notation
or any error in such notation  shall not in any manner affect the  obligation of
the Borrower to make payments of principal  and interest in accordance  with the
terms of this Note, the Swingline Loan Agreement and the Credit Agreement.




<PAGE>





     The Credit  Agreement,  among other  things,  contains  provisions  for the
acceleration of the maturity  hereof upon the happening of certain  events,  for
optional and mandatory  prepayment of the principal hereof prior to the maturity
hereof,  for the  assignment  hereof and for the  amendment or waiver of certain
provisions of the Credit  Agreement,  all upon the terms and conditions  therein
specified.  THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE  WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK OF THE UNITED STATES OF AMERICA.


                                                             [NAME OF BORROWER],


                                            by _________________________________
                                                             Title:







<PAGE>














                               Loans and Payments




Date   Amount   Interest     Payments           Unpaid     Name of
       and Type Period   Principal  Interest    Principal  Person
       of Loan                                  Balance    Making
                                                of Note    Notation


<PAGE>
                                                                Exhibit C to the
                                                                Credit Agreement

                             AMERICAN STANDARD INC.
                          ADMINISTRATIVE QUESTIONNAIRE

Please accurately  complete the following  information  andreturn via FAX to the
attention of Janet Belden at Chemical Bank as soon as possible.

FAX Number: 212-622-0854

LEGAL NAME OF YOUR INSTITUTION TO APPEAR IN DOCUMENTAT

 ---------------------------------------------------------------------------

GENERAL INFORMATION - ALTERNATE BASE RATE LENDING OFFICE:
Institution Name   ____________________________________________________________
Street Address: _______________________________________________________________
City, State, Zip Code: ________________________________________________________

GENERAL INFORMATION - EURODOLLAR LENDING OFFICE: **
Institution Name: _____________________________________________________________
Street Address:  ______________________________________________________________
City, State, Zip Code:  _______________________________________________________
CREDIT CONTACTS/NOTIFICATION METHODS:
Primary Contact ______________________________________________________________
Street Address  _______________________________________________________________
Institution Name:  _____________________________________________________________
Street Address: _______________________________________________________________
City, State, Zip Code: _________________________________________________________

Backup Contact  ______________________________________________________________
Street Address  _______________________________________________________________
Institution Name:  _____________________________________________________________
Street Address: _______________________________________________________________
City, State, Zip Code: _________________________________________________________

**  Please provide information for borrowings in each Alternative Currency if
    different



<PAGE>




    TAX WITHHOLDING:
         UNITED STATES
                  Non  Resident  Alien or  Foreign  Corporate  or other  Foreign
                  Entity _____________ YES ___________________ NO If yes, please
                  enclose  Form 4224,  1001 or W-8. If No,  please  enclose form
                  W-9. Tax ID Number ______________________________
         UNITED KINGDOM
                  Non  Resident  Alien or  Foreign  Corporate  or other  Foreign
                  Entity _____________ YES ___________________ NO Please enclose
                  relevant       tax       forms       Tax       ID       Number
                  ______________________________

    CONTACTS/NOTIFICATION METHODS:
    ADMINISSTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
    Contact  __________________________________________________________________
    Street Address:  __________________________________________________________
    City, State, Zip Code _____________________________________________________
    Phone Number:  ____________________________________________________________
    FAX Number:  ______________________________________________________________
    Telex & Answer Back:  :____________________________________________________

    PAYMENT INSTRUCTIONS:
    Name of Bank where funds are to be trnasferrred:
        -----------------------------------------------------------------------
    Routing Transit/ABA number of Bank where funds are to be transferred:
        -----------------------------------------------------------------------
    Name of Account, if applicable:
        -----------------------------------------------------------------------
    Account Number:  __________________________________________________________
    Additional Information: ___________________________________________________
                                         --------------------------------------

    MAILINGS:
    Please specify whoshould receive financial information:
    Name:   _________________________________________________________________
    Street Address  _________________________________________________________
    City State, Zip Code  ___________________________________________________

    It is very important that all of the above  information is accurately filled
    in and returned promptly. If there is someone other than yourself who should
    receive this  questionnaire,  please  notify us of their name and FAX number
    and we will FAX thema copy of the questionnaire.  If you have any questions,
    please call Janet Belden on 212-622-0011 or Doris Mesa on 212-622-0827.

<PAGE>
                                                              EXHIBIT D to the
                                                                Credit Agreement
                                   [FORM OF]

                           ASSIGNMENT AND ACCEPTANCE


                  Reference is made to the Amended and Restated Credit Agreement
dated as of February 9, 1995 (as amended and in effect at the date  hereof,  the
"Credit  Agreement"),  among American Standard Companies Inc., American Standard
Inc.,  certain  subsidiaries  of American  Standard  Inc.,  the Lenders,  Senior
Managing Agents, Managing Agents and Co-Agents named therein, and Chemical Bank,
as Administrative  Agent.  Terms defined in the Credit Agreement are used herein
with the same meanings.

                  1. The Assignor hereby sells and assigns, without recourse, to
the Assignee,  and the Assignee hereby purchases and assumes,  without recourse,
from the Assignor,  effective as of the Assignment Date set forth on the reverse
hereof, the interests set forth on the reverse hereof (the "Assigned  Interest")
in the Assignor's rights and obligations under the Credit Documents,  including,
without  limitation,  the  interests  set  forth on the  reverse  hereof  in the
Commitments  of the Assignor on the  Assignment  Date and the Loans owing to the
Assignor  which are  outstanding on the  Assignment  Date,  together with unpaid
interest accrued on the assigned Loans to the Assignment Date and the amount, if
any, set forth on the reverse hereof of the Fees accrued to the Assignment  Date
for the account of the  Assignor.  Each of the Assignor and the Assignee  hereby
makes  and  agrees  to be  bound  by all  the  representations,  warranties  and
agreements  set forth in Section  10.04(c)  of the Credit  Agreement,  a copy of
which  has  been  received  by  each  such  party.  1/ Upon  acceptance  of this
Assignment  and  Acceptance  by the  Administrative  Agent and  recording of the
information  contained  herein in accordance with Section 10.04(e) of the Credit
Agreement,  from and after the Assignment Date (i) the Assignee shall be a party
to and be bound by the provisions of the Credit  Agreement and, to the extent of
the interests  assigned by this Assignment and  Acceptance,  have the rights and
obligations of a Lender thereunder and under the other Credit Documents and (ii)
the Assignor shall,  to the extent of the interests  assigned by this Assignment
and Acceptance, relinquish its rights and be released from its obligations under
the Credit Agreement.

                  2. This  Assignment and  Acceptance is being  delivered to the
Administrative  Agent together with (i) the Notes previously issued to Assignor,
(ii) if the Assignee is organized  under the laws of a jurisdiction  outside the
United  States,  the  forms  specified  in  Section  2.18(e)(i)  of  the  Credit
Agreement,  duly  completed  and  executed  by the  Assignee,  (iii) the form or
certificate,  as  applicable,  specified  in Section  2.18(e)(ii)  of the Credit
Agreement,  duly completed and executed by the Assignee, (iv) if the Assignee is
not already a Lender under the Credit Agreement, an Administrative Questionnaire
in the form of  Exhibit  C to the  Credit  Agreement  and (v) a  processing  and
recordation fee of $3,500.

     3. This  Assignment  and  Acceptance  shall be governed by and construed in
accordance with the laws of the State of New York.

Date of Assignment:

Legal Name of Assignor:

Legal Name of Assignee:

Assignee's Address for Notices:

Assignment  Date  (may not be  fewer  than 5  Business  Days  after  the Date of
Assignment):
                                                                      
                                                                     Percentage
                                                                     Assigned
                                                                     of Credit
                                                                     Facility
                                                                     (set
                                                                     forth, to
                                                                     at  least
                                                                     8
                                                                     decimals,
                                                                     as      a
                                                                     percentage
                                                                     of    the
                                                                     Credit
                                                                     Facility
                                                                     and the
                                                                     aggregate
                                    Principal Amount  Commitments/Term Loans
Credit Facility                          Assigned    of all Lenders thereunder)

Multi-Currency Revolving Credit
Commitment:                            $              %

U.S. $ Revolving Credit Commitment

Periodic Access Loan Commitment:

Term Loan Commitment:

Fees Assigned (if any):



The terms set forth above and on the reverse side hereof are hereby agreed to:
                                                                    Accepted: */


                            , as Assignor         AMERICAN STANDARD INC.,


By:                                                By:   
   Name:                                           Name:
   Title:                                         Title:


                            , as Assignee


By:                                      
   Name:
   Title:


--------------------

 */ To be completed only if consents are required under Section  10.04(b) of the
Credit  Agreement.  If such consents are required and the assignment  includes a
Revolving  Credit  Commitment,  consents  also must be obtained from the Issuing
Banks and Swingline Lenders.



     1/ If the Assignee is an Affiliate of the Assignor,  the Assignor also must
represent to ASI that the assignment is being made for a valid business  purpose
(and at the request of ASI will advise ASI of such purpose in reasonable detail)
and is not  inconsistent  with the  obligations  of the Assignor  under  Section
2.23(b) of the Credit Agreement.
<PAGE>

                                                                EXHIBIT E to the
                                                                Credit Agreement







     ISSUING BANK AGREEMENT  dated as of [ ], 1995,  between  AMERICAN  STANDARD
INC., a Delaware corporation ("ASI") and the financial institution identified on
Schedule I hereto as the Issuing Bank (the "Issuing Bank").


     Reference is made to the Amended and Restated Credit  Agreement dated as of
February 9, 1995 (as amended, modified,  extended or restated from time to time,
the "Credit  Agreement"),  among American Standard  Companies Inc., ASI, certain
subsidiaries of ASI, the Lenders,  Senior Managing  Agents,  Managing Agents and
Co-Agents named therein and Chemical Bank, as Administrative  Agent. ASI and the
Issuing Bank desire to enter into this Agreement in order to provide for Letters
of Credit  to be  issued  by the  Issuing  Bank as  contemplated  by the  Credit
Agreement. Accordingly, the parties hereto agree as follows:

     SECTION 1. Defined Terms.  Capitalized  terms used herein and not otherwise
defined  herein  shall  have the  respective  meanings  specified  in the Credit
Agreement. The provisions of Section 1.02 of the Credit Agreement shall apply to
this Agreement as though set forth herein.

     SECTION 2. Letter of Credit  Commitment.  The Issuing Bank hereby agrees to
be an "Issuing Bank" under,  and, subject to the terms and conditions hereof and
of the Credit Agreement, to issue Letters of Credit under, the Credit Agreement;
provided,  however,  that Letters of Credit issued by the Issuing Bank hereunder
shall be subject to the limitations,  if any, set forth on Schedule I hereto, in
addition to the limitations set forth in the Credit Agreement.

     SECTION 3. Issuance Procedure. In order to request the issuance of a Letter
of Credit  hereunder,  the  Account  Party  (or ASI on behalf of the  applicable
Account  Party)  shall  hand  deliver  or  telecopy  a  notice  (specifying  the
information  required by Section 2.19(b) of the Credit Agreement) to the Issuing
Bank, at its address or telecopy number  specified on Schedule I hereto (or such
other  address or telecopy  number as the Issuing  Bank may specify by notice to
ASI),  not later than the time of day (local time at such address)  specified on
Schedule I hereto  prior to the  proposed  date of  issuance  of such  Letter of
Credit.  A copy of such notice shall be sent,  concurrently,  by the  applicable
Account  Party  (or  ASI on  behalf  of the  applicable  Account  Party)  to the
Administrative  Agent in the manner  specified for Borrowing  Requests under the
Credit  Agreement.  Upon receipt of such notice,  the Issuing Bank shall consult
the  Administrative  Agent by telephone  in order to  determine  (i) whether the
conditions  specified  in the last  sentence  of  Section  2.19(b) of the Credit
Agreement  will be satisfied in  connection  with the issuance of such Letter of
Credit and (ii) whether the requested  expiration date for such Letter of Credit
complies with the proviso to Section 2.19(c) of the Credit Agreement.

     SECTION 4. Issuing Bank Fees,  Interest and Payments.  (a) The Issuing Bank
Fees  payable  to the  Issuing  Bank in  respect  of  Letters  of Credit  issued
hereunder are specified on Schedule I hereto (and such fees shall be in addition
to the Issuing Bank's customary documentary and processing charges in connection
with the  issuance,  amendment  or  transfer  of any  Letter  of  Credit  issued
hereunder).  Each payment of Issuing Bank Fees payable  hereunder  shall be made
not later than 12:00  (noon),  local time at the place of  payment,  on the date
when due, in  immediately  available  funds,  to the account of the Issuing Bank
specified on Schedule I hereto (or to such other  account of the Issuing Bank as
it may specify by notice to ASI).

     (b) If this  Agreement  permits  Letters  of  Credit to be  denominated  in
Alternative  Currencies,  then it will be necessary to establish  the  Swingline
Base  Rate  and the  Swingline  Margin  that  will  apply  to  unreimbursed  L/C
Disbursements  denominated  in  such  Alternative  Currencies  for  purposes  of
determining interest thereon. The Issuing Bank agrees to determine the Swingline
Base  Rate  for each day  that  any  such  L/C  Disbursement  denominated  in an
Alternative Currency is outstanding  hereunder and to notify ASI, the applicable
Account Party and the Administrative Agent thereof. The parties hereto



<PAGE>





     understand and agree that the Applicable Margin was negotiated for purposes
of determining  interest on ABR Loans  denominated in Dollars and that it may be
necessary  from  time  to time to  adjust  the  Applicable  Margin,  based  upon
differences  between  prevailing  interest rates on  obligations  denominated in
Dollars compared to prevailing interest rates on obligations  denominated in the
Alternative  Currency or Currencies in which  unreimbursed L/C Disbursements may
be made  hereunder (any such  Alternative  Currency being referred to as an "L/C
Alternative Currency"),  in order to arrive at the Swingline Margin for such L/C
Alternative  Currency,  which is intended to provide a marginal interest rate in
the L/C Alternative  Currency  comparable to the Applicable  Margin on Revolving
Credit  Borrowings  comprised  of ABR  Loans  denominated  in  Dollars.  If this
Agreement  permits  Letters  of  Credit  to be  denominated  in  an  Alternative
Currency,  then (i) Schedule I hereto  specifies the initial  conversion  factor
(expressed  as a  percentage  to be  multiplied  by  the  Applicable  Margin  on
Revolving  Credit  Borrowings  comprised  of ABR Loans) with respect to each L/C
Alternative  Currency and (ii) the Issuing Bank may from time to time adjust any
such conversion factor by notice to ASI and the Administrative  Agent (each such
notice  to be  effective  upon  the  date  given)  based  upon  changes  in  the
differences  between prevailing interest rates in the relevant  currencies,  and
each such  adjustment  by the Issuing Bank shall be conclusive  absent  manifest
error.

     SECTION 5. Credit  Agreement  Terms.  Notwithstanding  any provision hereof
which may be construed to the contrary,  it is expressly  understood  and agreed
that (a) this Agreement is supplemental to the Credit  Agreement and is intended
to  constitute  an Issuing Bank  Agreement,  as defined  therein  (and, as such,
constitutes an integral part of the Credit Agreement as though the terms of this
Agreement  were set forth in the Credit  Agreement),  (b) each  Letter of Credit
issued hereunder and each and every L/C Disbursement  made under any such Letter
of Credit  shall  constitute  a "Letter  of Credit"  and an "L/C  Disbursement",
respectively,  for all  purposes of the Credit  Agreement  and the other  Credit
Documents,  (c) the  Issuing  Bank's  commitment  to  issue  Letters  of  Credit
hereunder  and each and every  Letter of Credit  requested  or issued  hereunder
shall be  subject  to the terms  and  conditions  of the  Credit  Agreement  and
entitled  to the  benefits  of the  Credit  Documents  and  (d)  the  terms  and
conditions of the Credit Agreement are hereby  incorporated herein as though set
forth herein in full and shall supersede any contrary provisions hereof.

     SECTION 6.  Assignment.  The Issuing Bank may not assign its  commitment to
issue Letters of Credit hereunder without the consent of ASI and prior notice to
the  Administrative  Agent. In the event of an assignment by the Issuing Bank of
all its other interests, rights and obligations under the Credit Agreement, then
the  Issuing  Bank's  commitment  to issue  Letters  of Credit  hereunder  shall
terminate  unless the Issuing Bank, ASI and the  Administrative  Agent otherwise
agree.

     SECTION 7.  Effectiveness.  This  Agreement  shall not be  effective  until
counterparts  hereof executed on behalf of each of ASI and the Issuing Bank have
been delivered to and accepted by the Administrative Agent.


     IN WITNESS WHEREOF,  each of the parties hereto has caused a counterpart of
this  Agreement  to be duly  executed  and  delivered as of the date first above
written.


                                                         AMERICAN STANDARD INC.,

                                                                              by
                                                --------------------------------
                                                                           Name:
                                                                          Title:


                                                                 [ISSUING BANK],

                                                                              by
                                                --------------------------------
                                                                           Name:
                                                                          Title:


Accepted:

CHEMICAL BANK, as
Administrative Agent,

by
----------------------------








<PAGE>


                                                                   SCHEDULE I to
                                                          Issuing Bank Agreement




A.Issuing Bank:

B.Issuing Bank's Address and
  Telecopy Number for Notices:

C.Scheduled                      Letters of Credit:  This Agreement  shall apply
                                 to the  Scheduled  Letters of Credit  issued by
                                 the Issuing  Bank and set forth on Schedule IV.
                                 The Issuing  Bank shall be under no  obligation
                                 to  extend  or renew  any  Scheduled  Letter of
                                 Credit,  except in accordance with the terms of
                                 such Scheduled Letter of Credit.


D.Time of Day by Which Notices Other than Scheduled Letters of Credit, a Must be
  Received notice requesting the issuance of a Letter of
                                 of Credit must be received by the ssuing
                                 Bank by 10:00 a.m. (New York time) not less
                                 than five Business Days prior to the proposed
                                 date of issuance

<PAGE>


  .

E.Special Terms:
                          The Letters of Credit issued pursuant to the Agreement
                          shall be  denominated  in Dollars  or any  Alternative
                          Currency.  The  aggregate  L/C  Exposure in respect of
                          Letters  of Credit  (including  Scheduled  Letters  of
                          Credit) issued  pursuant to this  Agreement  shall not
                          exceed $200,000,000.

F.Issuing Bank Fees:
                          [ ]% per annum on the average daily undrawn  amount of
                          the Scheduled  Letters of Credit,  payable on the same
                          dates that L/C  Participation  Fees are payable  under
                          the Credit Agreement.

G.Issuing Bank's Account for
  Payment of Issuing Bank Fees:

H.Initial Conversion  Factor(s) for To be determined in the event of an issuance
  Determining  Swingline  of a Letter of Credit the stated  amount of  Margin(s)
  which is not denominated in Dollars.
<PAGE>
                                Credit Agreement







         [FORM OF MORTGAGE]



                       AMENDED AND RESTATED TERM LOAN AND
                           REVOLVING CREDIT MORTGAGE,
                  ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND
                                 FIXTURE FILING

                                       BY

                            AMERICAN STANDARD INC.,

                                   Mortgagor,

                                       TO

                      CHEMICAL BANK, as collateral agent,

                                   Mortgagee,

                            Relating to Premises at



                                  DATED AS OF:



                     This instrument prepared by and, after
                          recording, please return to:

                            Cravath, Swaine & Moore
                                Worldwide Plaza
                               825 Eighth Avenue
                         New York, New York 10019-7475
                       Attention: Martin R. Levine, Esq.



<PAGE>












                  AMENDED AND RESTATED TERM LOAN AND REVOLVING  CREDIT  OPEN-END
MORTGAGE,   ASSIGNMENT  OF  RENTS,   SECURITY   AGREEMENT  AND  FIXTURE   FILING
("Mortgage"),   dated  as  of  ,  made  by  AMERICAN  STANDARD  INC.  ("ASI"  or
"Mortgagor"),  a  Delaware  corporation  having an office at 1114  Avenue of the
Americas, New York, New York 10036, as mortgagor,  assignor and debtor, in favor
of CHEMICAL BANK a New York banking corporation, having its principal offices at
270 Park Avenue,  New York, New York 10017,  as Collateral  Agent (together with
any successors or assigns in such capacity,  "Mortgagee")  for (i) the financial
institutions  and  their  successors  and  assigns   (collectively,   "Lenders")
identified in the "Credit  Agreement" (as such term is defined in paragraph 3 of
the RECITALS below), (ii) WABCO-STANDARD  TRANE B.V., a Netherlands  corporation
("BV  Borrower"),  and (iii) the Swap  Providers  (as  defined  in the  Domestic
Guarantee),  as mortgagee,  assignee and secured party.  (All capitalized  terms
used and not  defined  herein  shall have the  meanings  ascribed  in the Credit
Agreement.)

                                R E C I T A L S:

                  1.  Mortgagor is the owner in fee simple absolute of the
property described in Schedule A and the Improvements and Equipment
(each as hereinafter defined).

                  2. ASI entered into a Term Loan and Revolving Credit Mortgage,
Assignment of Rents,  Security  Agreement and Fixture Filing with respect to the
property  described  in Schedule A on June 29,  1988,  and  recorded in the land
records of on at [list  amendments] (as so amended,  the "1988  Mortgage"),  and
which  secured  certain  obligations  of ASI as set forth in the Recitals to the
1988 Mortgage.

                  3. ASI Holding  Corporation,  ASI and certain  subsidiaries of
ASI are entering into an Amended and Restated Credit  Agreement dated as of June
1, 1993 with the  Lenders  named  therein  (as  amended,  modified,  extended or
restated  from  time  to  time,  the  "Credit  Agreement"),  pursuant  to  which
outstanding loans and commitments are being restructured.

     4. Pursuant to the terms of the Credit  Agreement,  the Lenders have agreed
to make loans ("Loans") and to issue from time to time certain letters of credit
to or for the account of the  obligors  thereunder  in the  aggregate  principal
amount of  $1,000,000,000,  including  revolving  credit loans in the  aggregate
principal  amount of $[ ], which Loans will continue to be, inter alia,  secured
by the 1988 Mortgage.

                  5.  Mortgagor  and others have  executed and  delivered to the
Lenders a certain Amended,  Consolidated and Restated  Guarantee  ("Guarantee"),
dated as of the date hereof, pursuant to which Mortgagor has agreed to guarantee
certain obligations arising under the Credit
Agreement.

                  6.  The BV Borrower, having an address at Jupiter Straat
262, 2132 UK Hoofddorp, The Netherlands, is the owner and holder of the



<PAGE>





ASI-BV Intercompany Note (as defined in the Credit Agreement),  being amended as
of the date hereof.

                  7. This Mortgage is given by Mortgagor to confirm to Mortgagee
the continuing  security of the 1988 Mortgage and to secure payment by Mortgagor
(i) to the Lenders of all  principal,  interest  and other sums due or to become
due from Mortgagor under the Credit Agreement and the Guarantee;  (ii) to the BV
Borrower  of all  principal,  interest  and other  sums due or to become  due or
amounts outstanding from time to time under the ASI-BV Intercompany Note and the
Guarantee;  (iii) all of Mortgagor's  obligations  under the Swap Agreements (as
defined in the Domestic Guarantee);  and (iv) all other obligations of Mortgagor
which together with the foregoing comprise the Obligations.


                        G R A N T I N G C L A U S E S :

                  Mortgagor  hereby  grants,  bargains,   sells,  mortgages  and
creates a security  interest in and first  mortgage lien upon,  all  Mortgagor's
right,  title and interest in and to the following property whether now owned or
held or hereafter  acquired except as otherwise provided in this Mortgage or the
Credit Agreement (collectively, "Mortgaged Property"):

                  A. The fee simple estate in the land  described in Schedule A,
together with any and all easements,  rights-of-way,  sidewalks,  gores of land,
streets,  ways,  alleys,  passages,  passageways,  sewer rights,  waters,  water
courses, water rights and powers, air, light and other rights, estates,  titles,
interests, privileges, liberties, servitudes, licenses, tenements, hereditaments
and  appurtenances  whatsoever,  in any way belonging,  relating or appertaining
thereto, or any part thereof, or which hereafter shall in any way belong, relate
or be  appurtenant  thereto,  and all  reversions,  remainders,  income,  rents,
issues, revenues and profits thereof (collectively, "Land");

                  B.  The buildings, structures and other improvements and any
and all Alterations (as hereinafter defined) now or hereafter located or
erected on the Land, including, without limitation, attachments, walks
and ways (collectively, "Improvements"; together with the Land,
"Premises");

                  C.  Any  and  all   permits,   certificates,   approvals   and
authorizations,  however characterized,  issued or in any way furnished, whether
necessary or not for the operation and use of the Premises,  including,  without
limitation, permits, building permits, certificates of occupancy,  environmental
certificates, industrial permits or licenses and certificates of operation;

                  D. All machinery,  apparatus,  equipment,  fittings, fixtures,
improvements  and  articles  of  personal  property  of every  kind  and  nature
whatsoever  now or  hereafter  attached  or affixed to the  Premises  or used in
connection  with the use and  enjoyment  of the Premises or the  maintenance  or
preservation   thereof,   including,   without  limitation,   all  manufacturing
equipment, tools, utility systems, fire sprinkler and








<PAGE>





alarm   systems,   HVAC   equipment,   boiler,   electronic   data   processing,
refrigeration,   electronic  monitoring,   water  or  lighting  systems,  power,
sanitation,  waste  removal,  window  cleaning,  maintenance or other systems or
equipment,  lobby  and all other  indoor or  outdoor  furniture,  appliances  or
supplies,  and all other  articles used or useful in connection  with the use or
operation of any part of the Premises (collectively, "Equipment");

                  E. Mortgagor's interest, as landlord, franchisor,  licensor or
grantor, in all leases of space,  franchise agreements,  licenses,  occupancy or
concession agreements (collectively,  "Leases"; each, a "Lease") now existing or
hereafter  entered into  relating in any manner to the Premises or Equipment and
any and all  amendments,  modifications,  supplements  and  renewals  of Leases,
whether  now in effect or  hereafter  coming  into  effect,  including,  without
limitation, all rents, additional rents, cash or securities deposited thereunder
to secure  performance  of the lessee's,  franchisee's,  licensee's or obligee's
obligations thereunder,  revenues,  earnings, profits and income, advance rental
payments,  payments  incident to  assignment,  sublease or surrender of a Lease,
claims for  forfeited  deposits and claims for damages,  now due or hereafter to
become due, with respect to any Lease;

                  F. All general intangibles and contract rights relating to the
Premises  and the  Equipment,  other than  tradenames  and  trademarks  owned by
Mortgagor, and all reserves, deferred payments,  deposits, refunds and claims of
every kind or character relating thereto;

                  G.  All  drawings,  plans,  specifications,   file  materials,
operating and maintenance records,  catalogues,  tenant lists,  correspondences,
advertising materials,  operating manuals, warranties,  guaranties,  appraisals,
studies and data relating to the Premises or the  Equipment or the  construction
of any Alteration or the maintenance of any Permit (as hereinafter defined); and

                  H. All proceeds of the  conversion,  voluntary or involuntary,
of any of the  foregoing  into cash or  liquidated  claims,  including,  without
limitation,  proceeds of insurance and  condemnation or other awards or payments
with respect thereto, including interest thereon;

                  TO HAVE AND TO HOLD the Mortgaged  Property unto Mortgagee and
Mortgagee's  successors and assigns forever, for the purpose of securing payment
and performance of the Obligations.









<PAGE>





                              C O V E N A N T S :

                  Mortgagor warrants, represents and covenants as follows:


                                   ARTICLE I

                        WARRANTIES, REPRESENTATIONS AND
                             COVENANTS OF MORTGAGOR


                  SECTION 1.l Good Title.  Mortgagor  represents,  warrants  and
covenants  that: (i) it has good and  marketable  title to an  indefeasible  fee
simple estate in the Mortgaged Property subject to no mortgage, pledge, security
interest,  encumbrance, lien, lease, license, easement,  assignment,  collateral
assignment or charge of any kind, including, without limitation, any conditional
sale or other title  retention  agreement  or lease in the nature  thereof,  any
filing or  agreement  to file a financing  statement as debtor under the Uniform
Commercial Code or any similar statute or any subordination arrangement in favor
of any party  other than  Mortgagor  (collectively,  "Liens";  each,  a "Lien"),
except for those Liens identified on Schedule B  (collectively,  "Prior Liens");
(ii) it will keep in effect all rights and appurtenances to or that constitute a
part of the Mortgaged Property;  (iii) it will protect,  preserve and defend its
interest in the Mortgaged  Property and title thereto;  (iv) it will comply with
each of the terms,  conditions  and  provisions  of any  obligation of Mortgagor
which is secured by the  Mortgaged  Property  the  noncompliance  with which may
result in the imposition of a Lien on the Mortgaged Property; (v) it will appear
and defend the Lien and  validity of this  Mortgage in any action or  proceeding
affecting or purporting to affect the Mortgaged Property or any of the rights of
Mortgagee  hereunder;  (vi) this  Mortgage  creates and  constitutes a valid and
enforceable first Lien on the Mortgaged Property,  and, to the extent any of the
Mortgaged Property shall consist of personalty, a first security interest in the
Mortgaged  Property,  subject  only to (a) Prior  Liens (but not to  extensions,
amendments, supplements or replacements of Prior Liens), and (b) Liens hereafter
created and which,  pursuant to the  provisions of Section 1.10, are superior to
the Lien hereof,  and Mortgagor does now and will forever  warrant and defend to
Mortgagee  and all its  successors  and assigns  such title and the validity and
priority of the Lien  hereby  created  and  evidenced  against the claims of all
persons and parties  whomsoever;  and (vii) it is duly  authorized  and has full
power to execute this Mortgage and enter into the transaction described herein.

                  SECTION 1.2  Further Documentation to Assure Lien; Fees and
Expenses.

                           1.2.1  Mortgagor shall, at the sole cost and expense
of Mortgagor,  do,  execute,  acknowledge and deliver all and every such further
acts,  deeds,  conveyances,   mortgages,  assignments,  notices  of  assignment,
transfers and assurances as Mortgagee shall from time to time request, which may
be necessary in the judgment of the  requesting  party from time time to assure,
perfect, convey, assign, transfer and








<PAGE>





confirm unto Mortgagee,  the property and rights hereby conveyed or assigned, or
which  Mortgagor  may be or may  hereafter  become  bound to convey or assign to
Mortgagee or which may facilitate the  performance of the term of this Mortgage,
or the filing, registering or recording of his Mortgage.

     1.2.2  Mortgagor  shall pay all filing,  registration or recording fees and
all  expenses  incident to the  execution  and  delivery of this  Mortgage,  any
mortgage instrument supplemental hereto, any security instrument with respect to
the Personal  Property,  (as hereinafter  defined),  any Uniform Commercial Code
financing statements and continuation statements,  and any instrument of further
assurance required by Mortgagee to be filed,  registered or recorded pursuant to
this Mortgage.

                  SECTION 1.3 Payment of Taxes, Insurance Premiums, Assessments;
Compliance with Law and Insurance Requirements.

                           1.3.1  Unless contested in accordance with the
provisions of subsection 1.3.5, Mortgagor shall pay and discharge,  from time to
time when the same shall become due,  all real estate and other  taxes,  special
assessments,  levies,  permits,  inspection  and license fees,  all premiums for
insurance,  all water and sewer rents and charges, and all other public charges,
imposed upon or assessed  against the Mortgaged  Property or any part thereof or
upon the revenues,  rents, issues, income and profits of the Mortgaged Property,
including, without limitation, those arising in respect of the occupancy, use or
possession thereof.

                           1.3.2  From and after the occurrence of an Event of
Default (as hereinafter  defined),  at the option of Mortgagee,  Mortgagor shall
deposit with Mortgagee,  on the first day of each month, an amount  estimated by
Mortgagee to be equal to one-twelfth  (1/12th) of the annual taxes,  assessments
and other items required to be discharged by Mortgagor under  subsection  1.3.1.
Such  amounts  shall be held by  Mortgagee  without  interest to  Mortgagor  and
applied to the payment of the  obligations in respect of which such amounts were
deposited,  in such order or priority as Mortgagee shall determine, on or before
the  respective  dates on which such  obligations  or any thereof  would  become
delinquent.  Nothing  contained  in this  Section 1.3 shall  affect any right or
remedy of Mortgagee  under any  provision of this  Mortgage or of any statute or
rule of law to pay any such  amount  from its own funds and to add the amount so
paid,  together with interest at a rate ("Default  Rate") per annum equal to two
percent in excess of the rate payable  under the Credit  Agreement in respect of
LIBOR  Loans with a maturity  of one hundred  eighty  (180)  days,  to the other
amounts  outstanding in respect of the  Obligations or relieve  Mortgagor of its
obligations to make or provide for the payment of the annual taxes,  assessments
and other charges required to be discharged by Mortgagor under subsection 1.3.1.
Mortgagor  hereby  grants to  Mortgagee  a  security  interest  in all sums held
pursuant  to this  subsection  1.3.2 to secure  payment and  performance  of the
Obligations. During the continuance of any Event of Default, Mortgagee may apply
all or any part of the sums held  pursuant to this  subsection  1.3.2 to payment
and performance of the Obligations.








<PAGE>





 Mortgagor  shall  redeposit  with  Mortgagee  an amount equal to all amounts so
applied as a condition to the cure, if any, of such Event of Default in addition
to fulfillment of any other required conditions.

                           1.3.3  Unless contested in accordance with the
provisions of subsection 1.3.5, Mortgagor shall timely pay all lawful claims and
demands of mechanics,  materialmen,  laborers, government agencies administering
worker's compensation  insurance,  old age pensions and social security benefits
and all other  claims,  judgments,  demands or amounts of any nature  which,  if
unpaid,  might  result in, or permit the  creation  of, a Lien on the  Mortgaged
Property or any part thereof,  or on the  revenues,  rents,  issues,  income and
profits arising therefrom or which might result in forfeiture of all or any part
of the Mortgaged Property.

                           1.3.4  Mortgagor shall maintain in full force and
effect  all  permits,  consents,   approvals,   licenses,  franchises  or  other
instruments  (collectively,  "Permits";  each,  a  "Permit")  now  or  hereafter
required   by  any   federal,   state,   municipal   or  local   government   or
quasi-governmental agency or authority to operate or use and occupy the Premises
and the Equipment for its intended uses. Unless contested in accordance with the
provisions  of  subsection  1.3.5,  Mortgagor  shall  comply  promptly  with all
requirements  set  forth  in the  Permits  and  all  requirements  of  any  law,
ordinance,  rule, regulation or requirement of any federal,  state, municipal or
local government or quasi-governmental  agency or authority applicable to all or
any part of the Mortgaged Property or the condition,  use or occupancy of all or
any part  thereof or any recorded  deed of  restriction,  declaration,  covenant
running with the land or otherwise,  now or hereafter in force.  Mortgagor shall
not initiate or consent to any change in the zoning or any other  permitted  use
classification of the Land without the written consent of Mortgagee.

     1.3.5 Mortgagor may at its own expense contest the amount or  applicability
of any of the  obligations  described in subsections  1.3.1,  1.3.3 and l.3.4 by
appropriate  legal  proceedings,  prosecution  of which  operates to prevent the
collection  thereof and the sale or forfeiture of the Mortgaged  Property or any
part thereof to satisfy the same;  provided,  however,  that in connection  with
such contest,  Mortgagor shall, at the option of Mortgagee,  have made provision
for the  payment of such  contested  amount on  Mortgagor's  books if and to the
extent required by generally  accepted  accounting  principles or deposited with
Mortgagee a sum sufficient to pay and discharge such  obligation and Mortgagee's
estimate of all interest and  penalties  related  thereto.  Notwithstanding  the
foregoing  provisions of this  subsection  1.3.5,  if at any time payment of any
obligation  imposed upon Mortgagor by this Section 1.3 shall become necessary to
prevent  the  delivery of a tax deed  conveying  the  Mortgaged  Property or any
portion  thereof  because  of  nonpayment,  Mortgagor  shall  pay  the  same  in
sufficient time to prevent the delivery of such tax deed.

     l.3.6  Mortgagor  shall not in its use and occupancy of the Premises or the
Equipment (including,  without limitation, in the making of any Alteration) take
any action that could be the basis for termination,  revocation or denial of any
insurance coverage required to







<PAGE>





be  maintained  under this  Mortgage or that could be the basis for a defense to
any claim under any  insurance  policy  maintained in respect of the Premises or
the  Equipment  and Mortgagor  shall  otherwise  comply in all respects with the
requirements  of any insurer that issues a policy of insurance in respect of the
Premises or the Equipment.

                           1.3.7  Mortgagor shall, immediately upon receipt of
any written notice regarding any failure by Mortgagor to pay or discharge any of
the obligations  described in subsection 1.3.1, 1.3.3, 1.3.4 or 1.3.6, furnish a
copy of such notice to Mortgagee.

     SECTION 1.4 Payment of Certain Taxes.  If the United  States,  the state in
which the Land is located  or any  political  subdivision  thereof  shall  levy,
assess or charge any tax,  imposition  or  assessment  upon this Mortgage or the
interest of Mortgagee in the Mortgaged  Property,  Mortgagor  shall pay all such
taxes,  assessments and impositions to, for, or on account of Mortgagee when due
and payable and shall furnish to Mortgagee proof of such payment satisfactory to
Mortgagee.

                  SECTION 1.5  Required Insurance Policies.

     1.5.1  Mortgagor  shall  maintain  in full  force the  following  insurance
coverages in respect of the Premises and the Equipment:

                  (i) Physical hazard  insurance on an "all risk" basis covering
         fire and extended  coverage in an amount equal to the full  replacement
         cost of the  Improvements  and  Equipment,  with  such  deductibles  as
         Mortgagee  may from time to time require,  and, if Mortgagee  shall not
         have imposed any such  requirements,  with such deductibles as would be
         maintained  by a  prudent  operator  of  property  similar  in use  and
         configuration  to the Premises  and located in the  locality  where the
         Premises are located. "Full replacement cost" means the cost to replace
         the Improvements and the Equipment, exclusive of excavation, foundation
         and footings,  as determined from time to time (but not less frequently
         than once each year) by a person satisfactory to Mortgagee;

                  (ii)  Liability  insurance  against  claims for bodily injury,
         death or property damage occurring on, in or about the Premises and any
         adjoining  streets,  sidewalks and passageways,  with policy limits and
         deductibles in such amounts as Mortgagee may from time to time require,
         and, if Mortgagee shall not have imposed any such requirements, in such
         amounts as from time to time would be maintained by a prudent  operator
         of  property  similar  in use and  configuration  to the  Premises  and
         located in the locality where the Premises are located;

                  (iii) Pollution and hazardous waste liability insurance with a
         coverage  amount not less than  $25,000,000  for clean-up  expenses and
         $15,000,000 for legal  liability,  if the Premises are subject to rules
         and  regulations  of  the  Federal   Environmental   Protection  Agency
         requiring insurance of this type or if such insurance would







<PAGE>





         ordinarily be maintained in  accordance  with  commercially  reasonable
         business practices; provided, however, that to the extent the rules and
         regulations of the federal Environmental Protection Agency from time to
         time in effect permit  Mortgagor to maintain lesser coverage amounts or
         to self-insure  against  liabilities  contemplated by this  subsection,
         compliance by Mortgagor with such rules and regulations shall be deemed
         compliance with the provisions of this subsection;

                  (iv) Worker's  compensation  insurance as required by the laws
         of the  state  where  the  Premises  are  located,  or,  to the  extent
         permitted by local law,  appropriate  self insurance  arrangements,  to
         protect Mortgagor  against claims for injuries  sustained in the course
         of employment at the Premises;

                  (v) Explosion  insurance in respect of any boilers and similar
         apparatus  located on the Premises,  with policy limits and deductibles
         in such amounts as  Mortgagee  may from time to time  require,  and, if
         Mortgagee shall not have imposed any such requirements, in such amounts
         as would be maintained by a prudent operator of property similar in use
         and configuration to the Premises and located in the locality where the
         Premises are located;

                  (vi) If all or any portion of the  Premises  or the  Equipment
         shall be subject to a Lease or Leases,  rental  value  insurance to the
         extent,  and in the  amount,  required  by the terms of the  respective
         Lease;

                  (vii) Business  interruption  insurance with policy limits and
         deductibles in such amounts as Mortgagee may from time to time require,
         and, if Mortgagee shall not have imposed any such requirements, in such
         amounts  as would be  maintained  by a  prudent  operator  of  property
         similar in us and  configuration  to the  Premises  and  located in the
         locality where the Premises are located;

                  (viii) If the  Premises are located in an area  designated  by
         the  Secretary  of  Housing  and Urban  Development  as an area  having
         special  flood  hazards  and in which  flood  insurance  has been  made
         available  under the National Flood  Insurance Act of 1968, as amended,
         such  insurance  covering the interests of Mortgagee in such amounts as
         Mortgagee  may from time to time require,  and, if Mortgagee  shall not
         have  imposed  any  such  requirements,  in such  amounts  as  would be
         maintained  by a  prudent  operator  of  property  similar  in use  and
         configuration  to the Premises  and located in the  locality  where the
         Premises are located; and

                  (ix) Such other insurance,  against such risks and with policy
         limits and  deductibles  in such amounts as Mortgagee  may from time to
         time require,  and, if no such requirements shall have been imposed, in
         such amounts as would be maintained  by a prudent  operator of property
         similar in use and configuration to the








<PAGE>





         Premises and located in the locality where the premises are located.

     l.5.2 All insurance  policies required by this Section 1.5 shall be in form
and issued by companies  satisfactory  to Mortgagee.  Mortgagor may maintain the
coverages  required by this  Section 1.5 under  blanket  policies  covering  the
Premises and other locations owned or operated by Mortgagor if the terms of such
blanket  policies  otherwise  comply with the provisions of this Section 1.5 and
contain specific coverage  allocations in respect of the Premises  determined in
accordance  with the  provisions of this Section 1.5. All insurance  policies in
respect of the coverages required by subsections 1.5.1(i), 1.5.1(v),  l.5.l(vii)
and, if  applicable,  l.5.l(viii),  shall be in amounts at least  sufficient  to
prevent coinsurance liability.  All insurance policies required by the foregoing
enumerated  subsections shall name Mortgagee as an additional named insured. All
insurance policies in respect of the coverages required by subsections l.5.l(ii)
and  1.5.1(iii)  shall name Mortgagee as an additional  insured.  Each policy of
insurance  required  under this  Section  1.5 shall  provide  that it may not be
cancelled  or  otherwise  terminated  without  at least  thirty  (30) days prior
written  notice to  Mortgagee  and shall  permit  Mortgagee  to pay any  premium
therefor  within thirty (30) days after receipt of any notice  stating that such
premium has not been paid when due. The policy or policies of such  insurance or
certificates of insurance  evidencing the required  coverages shall be delivered
to  Mortgagee.  Settlement  of any  claim  under any of the  insurance  policies
referred to in this  Section  1.5,  if such claim  involves  (in the  reasonable
judgment  of  Mortgagee)  loss of  $250,000  or more,  shall  require  the prior
approval of Mortgagee.

     1.5.3 At least  ten (10)  days  prior to the  expiration  of any  insurance
policy,  an extension or renewal policy or an insurance  certificate  evidencing
such extension or renewal shall be delivered to Mortgagee.

     1.5.4 Mortgagor shall not purchase separate insurance  policies  concurrent
in form or contributing in the event of loss with those policies  required to be
maintained  under this Section 1.5,  unless  Mortgagee is included  thereon as a
named  insured  and,  if  applicable,  with loss  payable to  Mortgagee  under a
standard  endorsement  of the character  described in  subsection  1.5.2 and the
policy  evidencing such insurance  otherwise  complies with the  requirements of
subsection 1.5.2. Mortgagor shall immediately notify Mortgagee whenever any such
separate  insurance  policy is obtained and shall promptly  deliver to Mortgagee
the policy or certificate evidencing such insurance.

     l.5.5 Mortgagor  shall,  immediately  upon receipt of any written notice of
any  failure  by  Mortgagor  to pay any  insurance  premium  in  respect  of any
insurance  required to be maintained  under this Section 1.5,  furnish a copy of
such notice to Mortgagee.

     SECTION 1.6 Failure to Make Certain  Payments.  If Mortgagor  shall fail to
perform any of the  covenants  contained in this  Mortgage,  including,  without
limitation,  Mortgagor's  covenants to pay any amounts referred to in subsection
1.3.3 and the premiums in respect of all







<PAGE>





     required insurance  coverages,  Mortgagee may make advances to perform such
covenant on Mortgagor's behalf, and all sums so advanced shall,  notwithstanding
any provision of Recital 6 or Section 4.11 hereof to the  contrary,  be included
in the Obligations  and be secured  hereby.  Mortgagor shall repay on demand all
sums so advanced  by  Mortgagee  on behalf of  Mortgagor,  with  interest at the
Default Rate. Neither the provisions of this Section 1.6 nor any action taken by
Mortgagee  pursuant to the provisions of this Section 1.6 shall prevent any such
failure to observe any covenant  contained in this Mortgage from constituting an
Event of Default.

     SECTION 1.7 Inspection.  Mortgagor shall permit  Mortgagee,  by its agents,
accountants and attorneys,  to visit and inspect the Premises at such reasonable
times as may be requested by Mortgagee.

     SECTION 1.8 Mortgagor to Maintain Improvements.  Mortgagor shall not commit
any  waste  on the  Premises  or make  any  change  in the use of the  Premises.
Mortgagor  represents  and  warrants  that:  (i) the  Premises are served by all
utilities  required or necessary  for the current use thereof;  (ii) all streets
necessary to serve the  Premises are  completed  and  serviceable  and have been
dedicated and accepted as such by the  appropriate  governmental  entities;  and
(iii) Mortgagor has access to the Premises from public roads sufficient to allow
Mortgagor  to conduct its  business at the  Premises  in  accordance  with sound
commercial and industrial practices. Mortgagor shall, at all times, maintain the
Premises in good operating order, condition and repair.  Mortgagor shall (a) not
alter the occupancy or use of all or any part of the Premises  without the prior
written consent of Mortgagee, and (b) do all other acts which from the character
or use of the Premises may be necessary or  appropriate to maintain and preserve
its value. The Premises shall not be demolished nor shall any Equipment having a
value of more than  $1,000,000 be removed  without the prior written  consent of
Mortgagee,   except  that  items  constituting   Equipment  may  be  removed  if
immediately  replaced with similar items of Equipment having a value and utility
for their intended  purposes that is not less than the value and such utility of
the Equipment so removed.








<PAGE>





     SECTION 1.9 Mortgagor's Obligations with Respect to Leases.

     1.9.1 If, in accordance  with the  provisions  of Section  1.10,  Mortgagor
shall be  permitted  to enter into any  Leases or any  Leases  exist on the date
hereof,  Mortgagor  shall not (i) execute any  assignment of any Lease or of the
rents or any part thereof from the Mortgaged  Property other than the assignment
herein to Mortgagee or as otherwise  permitted  under Section 1.10,  (ii) except
where the lessee, franchisee,  licensee or obligee under any Lease is in default
thereunder, terminate or consent to the cancellation or surrender of such Lease,
(iii)  modify any Lease so as to change the  unexpired  term thereof or so as to
decrease  the  amount of the rents or other  amounts  payable  thereunder,  (iv)
accept any  prepayments  of any  installment of rents or other amounts to become
due under any  Lease  for a period  exceeding  one (1)  month,  (v)  permit  the
deferral  of or waive or  postpone  the  payment of any rental or other  payment
under any Lease,  (vi)  permit any  transfer or  assignment  of any Lease or any
sublease  thereunder  of the  property  subject to any Lease  without  the prior
written  consent of  Mortgagee,  unless such Lease is not amended in any respect
and the primary obligor under such Lease is not released in any respect from its
responsibilities  or liabilities  under such Lease as a result of such sublease,
transfer  or  assignment  or (vii)  modify any Lease in any  fashion  which will
impair the value of the  Mortgaged  Property  or the  security  provided by this
Mortgage.

     1.9.2 Mortgagor shall at all times timely and faithfully  perform, or cause
to be performed,  all of the covenants,  conditions and agreements  contained in
all Leases to be kept and  performed  by the  lessor,  franchisor,  licensor  or
grantor  thereunder  and shall at all times do all things  necessary  to require
performance by the lessee,  franchisee,  licensee or grantee under each Lease of
all  obligations,  covenants  and  agreements  by  such  party  to be  performed
thereunder.

     1.9.3 Mortgagor  shall furnish to Mortgagee,  within thirty (30) days after
each request by Mortgagee to do so, a written statement in respect of any or all
of the Leases setting forth the space  occupied,  if any, the property  affected
thereby,  the  rentals  or other  amounts  payable  thereunder,  and such  other
information as Mortgagee may request.

     SECTION  1.10  Transfer  Restrictions.  Except as provided in Section  1.8,
Mortgagor  may not,  without the prior  written  consent of  Mortgagee,  further
mortgage, encumber,  hypothecate,  sell, convey or assign all or any part of the
Mortgaged  Property or suffer any of the  foregoing to occur by operation of law
or otherwise.  Notwithstanding the provisions the foregoing sentence,  Mortgagor
shall  have the right to grant or suffer the  following  Liens in respect of the
Mortgaged Property:

     (i) Liens in respect of amounts  payable by  Mortgagor  pursuant to Section
1.3, provided such amounts are not yet due and payable or are being contested in
accordance with the provisions of subsection 1.3.5.







<PAGE>






                  (ii) Liens upon Equipment acquired by Mortgagor after the date
         hereof  created  solely  for  the  purpose  of  securing   indebtedness
         representing,  or  incurred  to  finance,  the cost of such  Equipment;
         provided,  however,  that no such Lien shall (a) extend to or cover any
         of  the  Mortgaged   Property  as  it  existed   immediately  prior  to
         acquisition   of  such  property  and  (b)  the  principal   amount  of
         indebtedness  secured by any such Lien shall at no time exceed the fair
         value (as determined by Mortgagee in its  reasonable  judgment) of such
         property at the time it was so acquired.

     Each of the Liens and other  transfers  permitted by this Section  shall in
all respects be subject and subordinate in priority to the Lien of this Mortgage
except any Lien permitted by subsection  1.10(i) if and to the extent the law or
regulation  creating or  authorizing  such Lien  provides that such Lien must be
superior to the Lien of this Mortgage.

                           SECTION 1.11  Destruction; Condemnation.

     1.11.1 Destruction; Insurance Proceeds. If there shall occur any damage to,
or loss or destruction of, the  Improvements and Equipment or any part of either
thereof (each, a  "Destruction"),  Mortgagor  shall promptly send to Mortgagee a
notice  setting  forth  the  nature  and  extent  of  such  Destruction  if such
Destruction is in respect of Improvements and Equipment having a value in excess
of  $2,000,000.  The  proceeds  of any  insurance  payable  in  respect  of such
Destruction  are  hereby  assigned  and  shall  be paid to  Mortgagee.  All such
proceeds,  less the amount of any expenses incurred in litigating,  arbitrating,
compromising  or  settling  any  claim  arising  out of such  Destruction  ("Net
Proceeds"),  shall be applied in accordance  with the  provisions of subsections
1.11.3, 1.11.4 and 1.11.5.

     1.11.2  Condemnation;  Assignment of Award. If there shall occur any taking
of the Mortgaged  Property or any part thereof,  in or by  condemnation or other
eminent domain proceedings pursuant to any law, general or special, or by reason
of the temporary  requisition of the use or occupancy of the Mortgaged  Property
or any part hereof,  by any governmental  authority,  civil or military (each, a
"Taking"), Mortgagor shall immediately notify Mortgagee upon receiving notice of
such Taking or  commencement  of proceedings  therefor.  Any proceeds,  award or
payment  in respect  of any  Taking  are  hereby  assigned  and shall be paid to
Mortgagee.  Mortgagor  shall take all steps  necessary to notify the  condemning
authority  of such  assignment.  Such award or  payment,  less the amount of any
expenses incurred in litigating, arbitrating, compromising or settling any claim
arising out of such Taking ("Net Award") shall be applied in accordance with the
provisions of subsections 1.11.3, 1.11.4 and 1.ll.5.

     1.11.3 Restoration.  So long as no Event of Default shall have occurred and
be  continuing,  in the event there  shall be a Net Award or Net  Proceeds in an
amount  less than or equal to  $2,000,000,  Mortgagor  shall have the right,  at
Mortgagor's option, to apply such Net Award or







<PAGE>





     Net  Proceeds  to  payment  of  amounts   outstanding  in  respect  of  the
Obligations or to perform a restoration  (each, a "Restoration") of the Premises
and the  Equipment.  In the event  Mortgagor  elects  to make such  Restoration,
Mortgagor  shall give written  notice  ("Restoration  Election  Notice") of such
election to  Mortgagee  within  thirty  (30) days after the date that  Mortgagor
receives  notice of such  collection  by  Mortgagee  of the Net  Proceeds or Net
Award, as the case may be. In the event Mortgagee does not receive a Restoration
Election  Notice within such thirty (30) day period,  Mortgagee  shall apply any
such Net  Proceeds  or Net Award  held by  Mortgagee  to the  prepayment  of the
Obligations  in the manner set forth in the  Credit  Agreement  (or in the event
this Mortgage shall not then secure amounts due from Mortgagor  under the Credit
Agreement or the Guaranty, such prepayment shall De credited against amounts due
in respect of the ASI-BV Intercompany Note) or, at the option of Mortgagee,  may
continue to hold such Net  Proceeds  or Net Award as  additional  collateral  to
secure the performance by Mortgagor of the  Obligations.  In the event Mortgagor
elects to make such  Restoration,  Mortgagee shall release such Net Award or Net
Proceeds,  exclusive of any  interest  earned  thereon,  to Mortgagor as soon as
practicable  following receipt of a Restoration  Election Notice but in no event
more than sixty (60) days following such receipt.  Mortgagor  shall,  within ten
(10) days  following  the date of its  receipt of any  proceeds  in respect of a
Destruction or Taking,  as the case may be,  comment and diligently  continue to
perform the  Restoration  of that  portion or portions of the  Improvements  and
Equipment  subject to such  Destruction or affected by such Taking so that, upon
the  completion  of  the  Restoration,   the  Mortgaged   Property  will  be  in
substantially  the same  condition  and  shall be of at least  equal  value  and
utility for its intended  purposes as the  Mortgaged  Property  was  immediately
prior  to  such  Destruction  or  Taking.   Mortgagor  shall  so  complete  such
Restoration with its own funds to the extent that the amount of any Net Award or
Net Proceeds is insufficient for such purpose.

     1.11.4  Major  Restoration.  In the event there shall be a Net Award or Net
Proceeds other than as described in subsection 1.11.3,  Mortgagee shall have the
option  to  apply  such  Net  Award or Net  Proceeds,  as the  case  may be,  to
prepayment of the  Obligations,  in accordance with the provisions of the Credit
Agreement (or in the event this Mortgage  shall not then secure amounts due from
Mortgagor under the Credit  Agreement or the Guaranty,  such prepayment shall be
credited against amounts due in respect of the ASI-BV  Intercompany Note), or to
continue to hold such Net Award or Net  Proceeds  as  additional  collateral  to
secure  the  performance  by  Mortgagor  of  the  Obligations,   or  to  require
Restoration of the Mortgaged  Property.  In the event Restoration is required by
Mortgagee under this subsection 1.11.4,  Mortgagee shall not release any part of
the Net Award or the Net Proceeds  except in accordance  with the  provisions of
subsection 1.11.5, and Mortgagor shall, prior to commencing any work to effect a
Restoration of the Premises and the  Equipment,  promptly (but in no event later
than ninety (90) days following any Destruction or Taking) furnish to Mortgagee:

     (i) complete plans and specifications  ("Plans and Specifications") for the
Restoration;








<PAGE>


     (ii) an opinion of counsel to Mortgagor, which shall be independent counsel
acceptable  to  Mortgagee  ("Opinion of  Counsel"),  (a) listing all permits and
approvals  required by law in connection  with the  Restoration  and (b) stating
that all permits and  approvals  required by law to commence  work in connection
with the Restoration have been obtained;

     (iii)  a  certificate   ("Architect's   Certificate")  of  an  independent,
reputable  architect or engineer  acceptable  to  Mortgagee  and licensed in the
state  where  the  Premises   are  located   stating  (a)  that  the  Plans  and
Specifications have been reviewed and approved by the signatory thereto, and (b)
such  signatory's   estimate   ("Estimate")  of  the  costs  of  completing  the
Restoration, and (c) that upon completion of such Restoration in accordance with
the Plans and  Specifications,  the value and  utility of the  Premises  and the
Equipment  will be equal  to or  greater  than the  value  and  utility  thereof
immediately prior to the Destruction or Taking relating to such Restoration; and

     (iv) if the Estimate exceeds the Net Proceeds or the Net Award, as the case
may be, by $50,000 or more and an Event of Default  shall have  occurred  and be
continuing,  a surety bond for,  guaranty  of, or  irrevocable  letter of credit
("Letter  of Credit")  or other  irrevocable  and  unconditional  commitment  to
provide funds  ("Commitment")  for the payment of the cost of such  Restoration,
payable  to or in favor of  Mortgagee,  as agent for the  Lenders,  which  bond,
guaranty,  Letter  of Credit  or  Commitment  (a) shall be signed by a surety or
sureties or guarantors(s),  as the case may be, acceptable to Mortgagee, and, in
the case of a Letter of Credit or  Commitment,  shall be  provided  by a bank or
other financial institution having capital and surplus in excess of $500,000,000
as shown in its most recent available statement of financial condition,  and (b)
shall be in an amount  not less than the  Estimate  minus the  amount of the Net
Proceeds  or the Net  Award,  as the case may be,  then  held by  Mortgagee  for
application toward the cost of such Restoration.

     Mortgagee  shall  have the  right to  review  and  approve  the  Plans  and
Specifications.  Promptly upon any approval of the Plans and  Specifications  by
Mortgagee,  Mortgagor  shall  commence  and  diligently  continue to perform the
Restoration in accordance with such approved Plans and Specifications. Mortgagor
shall so complete  such  Restoration  with its own funds o extent that amount of
any Net Award or Net Proceeds is insufficient for such purpose.



                                       
<PAGE>

     1.11.5 Restoration  Advances  Following  Destruction or Taking of Mortgaged
Property.  In the event  Mortgagor shall be required to perform a Restoration of
the Premises and Equipment as provided in  subsection  1.11.4,  Mortgagee  shall
apply any Net  Proceeds  or the Net Award  held by  Mortgagee  on account of the
Destruction or Taking to the payment of the cost of performing such  Restoration
and shall pay  portions  of the same,  from time to time,  to  Mortgagor  or, at
Mortgagee' s option,  exercised from time to time,  directly to the contractors,
subcontractors,  materialmen, laborers, engineers, architects, and other persons
rendering  services or material for such  Restoration,  subject to the following
conditions:

     (i) Each request for payment  shall be made on ten (10) business days prior
notice to  Mortgagee  and shall be  accompanied  by an  Architect's  Certificate
stating  (a)  that  all the  Restoration  work  then  completed  has  been  done
substantially  in compliance with the approved Plans and  Specifications  and in
accordance  with all  provisions of law, (b) the sums  requested are required to
reimburse   Mortgagor  for  payments  by  Mortgagor  to,  or  are  due  to,  the
contractors,  subcontractors,  materialmen,  laborers, engineers, architects, or
other persons  rendering  services or materials for the  Restoration,  and that,
when added to the sums, if any,  previously paid out by Mortgagee,  such sums do
not  exceed  the  cost  of the  Restoration  to the  date  of  such  Architect's
Certificate,  (c) whether or not the Estimate  continues to be accurate,  and if
not, what the entire cost of such  Restoration  is then estimated to be, and (d)
unless Mortgagee received a surety, guaranty,  Letter of Credit or Commitment as
referred to in  subsection  1.11.4,  that the amount of the Net  Proceeds or Net
Award, as the case may be, remaining after giving effect to such payment will be
sufficient  on  completion  of the  Restoration  to pay  for  the  same  in full
(including, in reasonable detail, an estimate by trade of the remaining costs of
completion);

     (ii) Each request for payment shall be accompanied by an Opinion of Counsel
or a title  insurance  policy,  binder or endorsement  satisfactory to Mortgagee
confirming that (a) all Liens covering that part of the  Restoration  previously
paid for, if any, have been waived and (b) there has not been filed with respect
to all or any part of the Mortgaged Property any Lien, not discharged of record,
which could have  priority over the Lien of this Mortgage in respect of any part
of the Obligations; and

     (iii) The final  request for any  payment  after the  Restoration  has been
completed   shall  be  accompanied   by  an  Opinion  of  Counsel   listing  all
certificates, permits, licenses, waivers, other documents, or any combination of
the  foregoing  required  by law in  connection  with  or as a  result  of  such
Restoration and stating that all of the same have been obtained.

     In the event there shall be any surplus after  application of the Net Award
or the Net  Proceeds to  Restoration  of the Premises  and the  Equipment,  such
surplus  shall be credited  against the  amounts  outstanding  in respect of the
Obligations in accordance with the provisions of the Credit Agreement (or in the



                                       7
<PAGE>

event this Mortgage shall not then secure  amounts due from Mortgagor  under the
Credit  Agreement or the Guaranty,  such  prepayment  shall be credited  against
amounts  due in respect of the  ASI-BV  Intercompany  Note) or, at the option of
Mortgagee,  held by Mortgagee as additional collateral to secure the performance
by Mortgagor of the Obligations.

     SECTION 1.12  Alterations.  Mortgagor shall not,  without the prior written
consent of  Mortgagee,  make any  addition,  modification  or change  (each,  an
"Alteration"),  structural  or  nonstructural,  to the Premises or the Equipment
that  costs  more to  effect  than  $2,500,000.  Whether  or not  Mortgagee  has
consented to the making of any  Alteration,  Mortgagor  shall (i) complete  each
Alteration promptly, in a good and workmanlike manner and in compliance with all
applicable  local laws,  ordinances and  requirements  and (ii) pay when due all
claims for labor  performed  and  materials  furnished in  connection  with such
Alteration,  unless  contested in accordance  with the  provisions of subsection
1.3.5.

     SECTION 1.13 Hazardous  Waste.  Mortgagor shall (i) comply with any and all
laws,  regulations  or orders  with  respect  to the  discharge  and  removal of
hazardous or toxic wastes,  contaminants or materials (collectively,  "Hazardous
Material"),  (ii) pay immediately  when due the cost of removal of any Hazardous
Materials and keep the Mortgaged  Property free of any lien imposed  pursuant to
such  laws,  regulations  or orders  and (iii) not  release  or  dispose  of any
Hazardous  Materials on the  Mortgaged  Property,  provided  that  Mortgagor may
permit such  disposal if permitted by  applicable  laws,  regulations  or orders
unless to do so would not be consistent with  commercially  reasonable  business
practices.  In the event  Mortgagor  fails to comply with the  covenants  in the
preceding  sentence  Mortgagee  may, in addition to any other remedies set forth
herein,  cause any  Hazardous  Materials  to be  removed  from the  Premises  at
Mortgagor's sole cost and expense.  Any costs or expenses  incurred by Mortgagee
for such purpose  shall be  immediately  due and payable by Mortgagor  and shall
bear interest at the Default date.  Mortgagor shall provide to Mortgagee and its
agents and employees  access to the Mortgaged  Property and hereby  specifically
grants to Mortgagee a license to remove any Hazardous  Material located thereon.
Mortgagee   shall  have  the  right,  at  any  time  that  the  Obligations  are
outstanding,  at  the  sole  cost  and  expense  of  Mortgagor,  to  conduct  an
environmental audit of the Mortgaged Property by such persons or firms appointed
by Mortgagee,  and Mortgagor  shall  cooperate in all respects in the conduct of
such environmental audit, including, without limitation, access to the Mortgaged
Property and all records  relating  thereto.  Mortgagor  shall have the right to
review such  environmental  audit of the  Mortgaged  Property and to dispute the
same.  Mortgagor shall  indemnify and hold Mortgagee (and each Lender)  harmless
from  and  against  all  loss,  cost,  damage  (including,  without  limitation,
consequential  damages) or expense (including,  without  limitation,  attorneys'
fees and the allocated  costs of staff  counsel) that Mortgagee (or such Lender)
may sustain by reason of the assertion against Mortgagee (or such Lender) by any
party of any claim  relating to such Hazardous  Material or the removal  thereof
from the  Premises.  Mortgagor  may, at its own expense,  contest such claims by
appropriate  legal  proceedings  provided  that,  in  connection  with  any such
contest,  Mortgagor shall make provision for the payment of such contested claim
on its books,  if and to the extent  required by generally  accepted  accounting
principles. The foregoing indemnification shall survive repayment of all amounts
due under the Credit Agreement,  the ASI-BV  Intercompany Note, the Guaranty and
any release or assignment of this Mortgage.

     SECTION  1.14  Asbestos.  Mortgagor  shall  not  install  nor  permit to be
installed in the Mortgaged Property, friable asbestos or any asbestos containing
material (collectively,  "ACM") deemed hazardous by federal, state or local laws
or regulations or orders respecting such material,  and with respect to any such
material currently present in the Mortgaged  Property,  Mortgagor shall promptly
either (i) remove any ACM which such laws,  regulations or orders deem hazardous
and require to be  removed,  or (ii)  otherwise,  at  Mortgagor's  sole cost and
expense,  comply with such federal,  state or local laws, regulations or orders.
If  Mortgagor  shall  fail to comply  with such  laws,  regulations  or  orders,
Mortgagee  may, in addition to any other  remedies set forth  herein,  take such
steps as it deems necessary or appropriate to comply with such laws, regulations
or orders. Any costs or expenses incurred by Mortgagee for such purpose shall be
immediately  due and payable by Mortgagor and bear interest at the Default Rate.
Mortgagor shall provide to Mortgagee and its agents and employees  access to the
Mortgaged  Property  and hereby  specifically  grants to  Mortgagee a license to
remove such ACM if  Mortgagor  fails to do so as provided  for above.  Mortgagor
shall  indemnify and hold  Mortgagee and each Lender)  harmless from and against
all loss, cost, damage,  including,  without limitation,  consequential damages)
and expense  including,  without  limitation,  attorney's fees and the allocated
costs of staff counsel) that Mortgagee (or such Lender) may sustain, as a result
of the  presence  of any ACM and any  removal  thereof  or  compliance  with any
applicable  laws,  regulations or orders.  The foregoing  indemnification  shall
survive  repayment  of all  amounts due under the Credit  Agreement,  the ASI-BV
Intercompany Note, the Guaranty, and any release or assignment of this Mortgage.


                                   ARTICLE II

                    ASSIGNMENT OF RENTS; SECURITY AGREEMENT

              SECTION 2.1 Assignment of Leases; Rents, Issues and
         Profits.

     2.1.1  Mortgagor  hereby  irrevocably  grants,  transfers  and  assigns  to
Mortgagee,  and grants to  Mortgagee  a security  interest  in, all  Mortgagor's
right, title and interest,  whether now existing or hereafter  acquired,  in the
Leases, including, without limitation, the right, power and authority to collect
the rents, issues, income and profits of the Mortgaged Property.  The assignment
set  forth in the  foregoing  sentence  shall  be  absolute,  unconditional  and
irrevocable except as provided to the contrary in subsection 2.1.2.

     2.1.2  Notwithstanding the provisions of subsection 2.1.1,  Mortgagor shall
have the  right,  so long as no Event of  Default  shall  have  occurred  and be



                                       
<PAGE>

continuing,  to collect and retain all rents, issues and profits relating to the
Mortgaged  Property as the same become due and payable.  Upon the occurrence and
continuance of any Event of Default,  Mortgagee may at any time without  notice,
either in person,  by agent,  or by a receiver to be appointed  by a court,  and
without  regard to the adequacy of any security for the  Obligations,  (i) enter
upon and take  possession  of the  Premises and  Equipment or any part  thereof,
and/or (ii) in its own name sue for or otherwise collect such rents,  issues and
profits,  including those as due and unpaid,  and apply the same, less costs and
expenses of operation and collection (including, without limitation,  attorneys'
fees  and the  allocated  costs  of  staff  counsel),  to all or any part of the
Obligations, and in such order as Mortgagee may determine.

     2.1.3  Mortgagee's  right to collect  the rents,  issues and  profits  upon
default by Mortgagor  pursuant to this  Section 2.1 is in no manner  conditional
upon Mortgagee first taking  possession of the Premises.  Should Mortgagee enter
and take  possession of the Premises,  or collect the rents,  issues and profits
and apply the same as provided for herein,  such act shall not cure or waive any
Event of Default or notice thereof hereunder or invalidate any act done pursuant
to such notice.  Nothing contained herein,  nor any collection of rents,  issues
and profits by Mortgagee or a receiver,  shall be construed to make  Mortgagee a
"mortgagee-in-possession"  so long as  Mortgagee  has not  itself  entered  into
actual possession of the Premises.

     2.1.4  Nothing  herein  shall be  construed  to  impose  any  liability  or
obligation  on  Mortgagee  under or with respect to any Lease.  Mortgagor  shall
indemnify and hold Mortgagee (and each Lender) harmless from and against any and
all liabilities,  losses and damages (including, without limitation,  attorneys'
fees and the allocated  costs of staff  counsel)  incurred under any Lease or by
reason of the provisions of this Section 2.1.

     SECTION 2.2 Security Interest in Personal Property.

     2.2.1 This Mortgage shall constitute a security  agreement and shall create
and evidence a security interest in all the Equipment and in all the other items
of property  comprising the Mortgaged  Property in which a security  interest or
lien may be  granted  or a common law pledge  created  pursuant  to the  Uniform
Commercial  Code as in effect in the state in which the  Premises are located or
under common law in such state (collectively, "Personal Property").

     2.2.2.  Mortgagor,  immediately  upon the  execution  and  delivery of this
Mortgage,  and  thereafter  from time to time,  shall cause this  Mortgage,  any
security  instrument  creating or  evidencing  the Lien  hereof in the  Personal
Property,  and  each  instrument  of  further  assurance,   including,   without
limitation,  Uniform  Commercial  Code  financing  statements  and  continuation
statements,  to be filed,  registered  or  recorded  in such  manner and in such
places as may be  required  by any  present  or future  law in order to  publish
notice of and full,  to perfect,  preserve  and protect the Lien hereof upon the
Personal Property.  Mortgagor hereby appoints and authorizes Mortgagee to act on
behalf of Mortgagor  upon  Mortgagor's  failure to comply with the provisions of
this subsection 2.2.2.


                                       
<PAGE>


     2.2.3 Upon the  occurrence  of any Event of  Default,  in  addition  to the
remedies  set forth in Article 3,  Mortgagee  shall have the power to  foreclose
Mortgagor's right of redemption in the Personal Property by sale of the Personal
Property in accordance with the Uniform  Commercial Code as enacted in the state
in which the Premises are located or under other  applicable  law in such state.
It shall not be  necessary  that any  Personal  Property  offered be  physically
present at any such sale or constructively in the possession of Mortgagee or the
person conducting the sale.

     2.2.4 Upon the  occurrence of any Event of Default,  Mortgagee may sell the
Personal  Property or any part  thereof at public or private sale with notice to
Mortgagor  as  hereinafter  provided.  The  proceeds  of any  such  sale,  after
deducting  all expenses of Mortgagee in taking,  storing,  repairing and selling
the Personal Property  (including,  without limitation,  attorneys' fees and the
allocated  costs of staff  counsel)  shall be applied in the manner set forth in
subsection  3.3.3. At any sale,  public or private,  of the Personal Property or
any part  thereof,  Mortgagee  (or any  Lender) may  purchase  any or all of the
Personal Property offered at such sale.

     2.2.5 Mortgagee shall give Mortgagor  reasonable  notice of any sale of any
of the  Personal  Property  pursuant  to the  provisions  of this  Section  2.2.
Notwithstanding   the   provisions   of  Section  4.2,  any  such  notice  shall
conclusively  be deemed to be reasonable  and effective if such notice is mailed
at least ten (10) days  prior to any sale,  by first  class or  certified  mail,
postage prepaid,  to Mortgagor at its address  determined in accordance with the
provisions of Section 4.2.

     2.2.6 As to such  portion  of the  Mortgaged  Property  as is or may become
fixtures,  affixed to the real estate  described  in Schedule  "A" hereto,  this
instrument shall constitute a Financing Statement, perfected as to such fixtures
from the time of the  filing  hereof  in the Real  Estate  Mortgage  Records  of
Sebastian County, Arkansas.

     The following information is accordingly included:

                  (a)  The name of the debtor is American Standard Inc., a
         Delaware corporation.

                  (b)  The  name of the  secured  party  is  Chemical  Bank,  as
         Collateral Agent, a New York banking corporation,  having its principal
         place of business at 270 Park Avenue, New York, New York 10017.

                  (c) The  address of the secured  party from which  information
         may be obtained is set forth in Section 4.2 of this instrument.


                                       
<PAGE>


                  (d)  The mailing address of the debtor is set forth in
         Section 4.2 of this instrument.

                  (e)  A description of the collateral is set forth in the
         Granting Clauses hereof.

                  (f) A legal  description  of the  real  estate  to  which  the
         collateral is or may become fixed is set forth in Schedule "A" hereto.


                                  ARTICLE III

                         EVENTS OF DEFAULT AND REMEDIES


     SECTION 3.l Events of Default.  Each of the following  shall  constitute an
Event of Default:

     3.1.1 If there  shall  occur  under (i) the Credit  Agreement  an "Event of
Default" (as such term is defined in the Credit Agreement,  as applicable) by or
relating to Mortgagor or any default in payment by Mortgagor  when due under the
Guaranty,  or (ii) any lease,  deed of trust,  mortgage,  covenant or  agreement
affecting  the  Mortgaged  Property  that is superior in priority to the Lien of
this  Mortgage,  any  default  by  Mortgagor  which  is not  cured  prior to the
expiration  of any  applicable  cure period set forth in such  lease,  mortgage,
covenant or agreement.

     3.1.2 If Mortgagor shall fail to perform or observe any term,  condition or
covenant hereof and such failure shall continue unremedied for twenty (20) days,
unless  such  failure  requires  work  to be  performed,  acts  to be  done,  or
conditions to be removed which cannot, by their nature, reasonably be performed,
done or removed,  as the case may be,  within  such  twenty (20) day period,  in
which  case no Event of  Default  shall be deemed to exist so long as  Mortgagor
shall  have  commenced  cure  within  such  twenty  (20) day  period  and  shall
diligently prosecute the same to completion.

     SECTION  3.2  Remedies  in Case of an Event  of  Default.  If any  Event of
Default  shall have  occurred,  Mortgagee  may, in addition to any other  action
permitted by law, take one or more of the following actions:

     3.2.1 by written  notice to Mortgagor,  declare the entire unpaid amount of
the Obligations to be due and payable immediately;

     3.2.2  personally,  or by its agents or attorneys,  (i) enter into and upon
all or any part of the Mortgaged Property and exclude Mortgagor,  its agents and
servants wholly therefrom,  (ii) use,  operate,  manage and control the Premises
and the Equipment and conduct the business  thereof,  (iii) maintain and restore
the Mortgaged Property, (iv) make all necessary or proper repairs,  renewals and
replacements  and such useful  Alterations  thereto and thereon as Mortgagee may
deem advisable,  (v) manage,  lease and operate the Mortgaged Property and carry
on the business  thereof and  exercise  all rights and powers of Mortgagor  with
respect  thereto  either in the name of Mortgagor or otherwise,  or (vi) collect
and receive all earnings,  revenues,  rents,  issues,  profits and income of the
Mortgaged Property and every part thereof;



                                       11
<PAGE>

     3.2.3 with or without entry, personally or by its agents or attorneys,  (i)
sell the Mortgaged Property and all estate, right, title and interest, claim and
demand therein at one or more sales as an entity or in parcels, and at such time
and place upon such terms and after such  notice  thereof as may be  required or
permitted by law, or (ii) institute and prosecute  proceedings  for the complete
or partial foreclosure of the Lien of this Mortgage; or

     3.2.4 take such steps to protect and enforce its rights  whether by action,
suit or  proceeding  at law or in equity  for the  specific  performance  of any
covenant,  condition or agreement in the Credit Agreement,  the Guaranty,  or in
aid of  the  execution  of any  power  granted  in  this  Mortgage,  or for  any
foreclosure hereunder,  or for the enforcement of any other appropriate legal or
equitable remedy or otherwise as Mortgagee shall elect.

     SECTION 3.3 Sale of Mortgaged Property if Event of Default Occurs; Proceeds
of Sale.

     3.3.1 On the  completion of any sale or sales by Mortgagee made under or by
virtue of this Article 3, Mortgagee,  or an officer of any court empowered to do
so, shall execute and deliver to the accepted purchaser or purchasers a good and
sufficient instrument or instruments  conveying,  assigning and transferring all
estate,  right,  title and  interest  in and to the  property  and rights  sold.
Mortgagee is hereby irrevocably appointed the true and lawful agent and attorney
of  Mortgagor,  in its  name  and  stead,  to make  all  necessary  conveyances,
assignments,  transfers and  deliveries of the Mortgaged  Property and rights so
sold,  and for that purpose  Mortgagee may execute all necessary  instruments of
conveyance, assignment and transfer, and may substitute one or more persons with
like power, and Mortgagor hereby ratifies and confirms all that Mortgagee or any
such  substitute  shall lawfully do by virtue hereof.  This power of attorney is
coupled with the interest of Mortgagee created by this Mortgage. Mortgagor shall
ratify  and  confirm  any such  sale or sales by  executing  and  delivering  to
Mortgagee or such  purchaser or purchasers  all  instruments as may be requested
for such purpose. Any such sale or sales made under or by virtue of this Article
3 shall  operate to divest all the estate,  right,  title,  interest,  claim and
demand  whatsoever,  whether at law or in  equity,  of  Mortgagor  in and to the
properties  and rights so sold,  and shall be a perpetual bar both at law and in
equity  against  Mortgagor  and against any and all persons  claiming or who may
claim the same, or any part thereof from, through or under Mortgagor.

     3.3.2 In the event of any sale made  under or by virtue of this  Article 3,
the entire  principal  of, and  interest in respect of the  Obligations,  if not
previously  due and  payable,  shall,  at the option of  Mortgagee,  immediately
become  due  and   payable,   anything  in  this   Mortgage   to  the   contrary
notwithstanding.



                                       
<PAGE>
 
    3.3.3 The  proceeds of any sale made under or by virtue of this  Article 3,
together  with any other  sums which  then may be held by  Mortgagee  under this
Mortgage,  whether under the provisions of this Article 3 or otherwise, shall be
applied as follows:

     First:  to the payment of the costs and  expenses  of such sale,  including
compensation  to  Mortgagee,  its agents and  attorneys,  and of any judicial or
private  proceedings in which such sale may be made, and of all other  expenses,
liabilities  and  advances  made or incurred by Mortgagee  under this  Mortgage,
together  with  interest  at the  Default  Rate  on  such  costs,  expenses  and
liabilities  and on all advances made by Mortgagee  from the date any such cost,
expense or  liability is due,  owing or unpaid or any such  advance is made,  in
each case until paid in full;

     Second:  to the  payment of all amounts  whether or not then due,  owing or
unpaid by  Mortgagor  under the Credit  Agreement,  the Guaranty and all amounts
whether or not then due, owing or unpaid under ASI-BV  Intercompany  Note, other
than  interest and  principal and amounts  payable  under  subparagraph  "First"
above,  together  with interest on each such amount at the Default Rate from and
after the date such amount is due,  owing or unpaid  until paid in full,  all of
which  amounts  shall  be  distributed  to the  Lenders  and  the  BV  Borrower,
respectively,  so that each  receives an amount  equal to the product of (i) the
total amount available for payment under this subparagraph, and (ii) a fraction,
the numerator of which is the total amount of the Obligations  then  outstanding
to the BV Borrower or such Lender,  as the case may be, and the  denominator  of
which is the total amount of the Obligations then outstanding;

     Third:  to the payment of the  interest  whether or not then due,  owing or
unpaid in respect of the  Obligations,  together  with,  to the  maximum  extent
permitted by law, interest thereon at the Default Rate from the date such amount
is due, owing or unpaid until paid in full,  which interest shall be distributed
to the  Lenders  and the BV  Borrower,  respectively,  so that each  receives an
amount equal to the product of (i) the total amount  available for payment under
this  subparagraph,  and (ii) a fraction,  the  numerator  of which is the total
amount of the Obligations then outstanding to the BV Borrower or such Lender, as
the case  may be,  and the  denominator  of which  is the  total  amount  of the
Obligations then outstanding;

     Fourth: to the payment of the amounts of principal whether or not then due,
owing or unpaid in respect of the  Obligations,  with  interest  on such  unpaid
principal  at the  Default  Rate from and after  the  happening  of any Event of
Default until paid in full,  which amounts shall be  distributed  to the Lenders
and the BV Borrower,  respectively, so that each receives an amount equal to the
product of (i) the total amount  available for payment under this  subparagraph,


                                       
<PAGE>

and  (ii) a  fraction,  the  numerator  of  which  is the  total  amount  of the
Obligations then outstanding to the BV Borrower or such Lender,  as the case may
be, and the  denominator  of which is the total amount of the  Obligations  then
outstanding; and

     Fifth: the surplus, if any, to be paid to whomever lawfully may be entitled
to receive such surplus.

     3.3.4  Mortgagee  (or any Lender)  may bid for and  acquire  the  Mortgaged
Property or any part thereof at any sale made under or by virtue of this Article
3 and, in lieu of paying cash  therefor,  may make  settlement  for the purchase
price by crediting  against the purchase price the unpaid amounts whether or not
then due and owing in respect of the Obligations, after deducting from the sales
price the  expenses of the sale and the costs of the action or  proceedings  and
any other sums that  Mortgagee  (or such Lender) is  authorized  to deduct under
this Mortgage.

     3.3.5  Mortgagee  may  adjourn  from time to time any sale by it to be made
under or by  virtue  of this  Mortgage  by  announcement  at the time and  place
appointed  for such sale or for such  adjourned  sale or sales,  and,  except as
otherwise  provided  by any  applicable  provision  of law,  Mortgagee,  without
further notice or publication, may make such sale at the time and place to which
the same shall be so adjourned.


                                       

     SECTION 3.4 Additional Remedies in Case of an event of Default.

     3.4.1 Mortgagee shall be entitled to recover  judgment as aforesaid  either
before,  after or during the pendency of any  proceedings for the enforcement of
the  provisions  of this  Mortgage,  and the right of  Mortgagee to recover such
judgment  shall  not be  affected  by any  entry  or sale  hereunder,  or by the
exercise  of any  other  right,  power  or  remedy  for the  enforcement  of the
provisions  of this  Mortgage,  or the  foreclosure  of the Lien of, or absolute
conveyance pursuant to, this Mortgage.  In case of proceedings against Mortgagor
in  insolvency  or  bankruptcy  or any  proceedings  for its  reorganization  or
involving the  liquidation of its assets,  Mortgagee  shall be entitled to prove
the whole amount of principal and interest due in respect of the  Obligations to
the full amount thereof without  deducting  therefrom any proceeds obtained from
the sale of the whole or any part of the Mortgaged Property;  provided, however,
that in no case shall  Mortgagee  receive a greater amount than the aggregate of
such  principal,  interest  and such other  payments,  charges  and costs  (with
interest at the  Default  Rate) from the  proceeds of the sale of the  Mortgaged
Property and the distribution from the estate of Mortgagor.

     3.4.2  Any  recovery  of any  judgment  by  Mortgagee  and any  levy of any
execution under any judgment upon the Mortgaged Property shall not affect in any
manner or to any extent the Lien of this Mortgage upon the Mortgaged Property or
any part  thereof,  or any Liens,  conveyances,  powers,  rights and remedies of
Mortgagee hereunder,  but such Liens,  conveyances,  powers, rights and remedies
shall continue unimpaired as before.


                                       15
<PAGE>

     3.4.  Any moneys  collected  by  Mortgagee  under this Section 3.4 shall be
applied in accordance with the provisions of subsection 3.3.3.

     SECTION 3.5 Legal  Proceedings  after an Event of Default.  3.5.1 After the
occurrence of any Event of Default and immediately  upon the commencement of any
action,  suit or legal proceedings to obtain judgment for the Obligations or any
part  thereof,  or of any  proceedings  to  foreclose  the Lien of or  otherwise
enforce the  provisions of this Mortgage or of any other  proceedings  in aid of
the enforcement of this Mortgage, Mortgagor shall enter its voluntary appearance
in such action, suit or proceeding.

     3.5.2  Upon  the  occurrence  of an Event of  Default,  Mortgagee  shall be
entitled  forthwith as a matter of right,  either before or after  declaring the
Obligations or any part thereof to be due and payable,  to the  appointment of a
receiver  without  giving notice to any party and without regard to the adequacy
or inadequacy of any security for the Obligations.

     3.5.3  Mortgagor shall not (i) at any time insist upon, or plead, or in any
manner  whatsoever  claim  or take  any  benefit  or  advantage  of any  stay or
extension  or  moratorium  law,  any  exemption  from  execution  or sale of the
Mortgaged  Property or any part thereof,  wherever  enacted,  now or at any time
hereafter in force,  which may affect the covenants and terms of  performance of
this Mortgage, (ii) claim, take or insist on any benefit or advantage of any law
now or  hereafter  in force  providing  for the  valuation  or  appraisal of the
Mortgaged  Property,  or any  part  thereof,  prior  to any sale or sales of the
Mortgaged  Property which may be made pursuant to this Mortgage,  or pursuant to
any decree, judgment or order of any court of competent  jurisdiction,  or (iii)
after any such sale or sales,  claim or  exercise  any right  under any  statute
heretofore  or  hereafter  enacted  to redeem the  property  so sold or any part
thereof.  Mortgagor hereby expressly waives all benefit or advantage of any such
law or laws,  including,  without limitation,  all right of redemption under the
Act of May 8, 1899 of the General  Assembly  of  Arkansas,  and acts  amendatory
thereof, and any statute of limitations  applicable to this Mortgage and any and
all  rights  to  trial  by jury  in any  action  or  proceeding  related  to the
enforcement of this Mortgage,  and covenants not to hinder,  delay or impede the
execution of any power granted or delegated to Mortgagee by this  Mortgage,  but
to suffer and permit the  execution of every such power as though no such law or
laws had been made or enacted. Mortgagor, for itself and all who may claim under
it, waives all right to have the Mortgaged Property marshaled on any foreclosure
of this Mortgage.

     SECTION 3.6 Remedies Not Exclusive. No remedy conferred upon or reserved to
Mortgagee  by this  Mortgage is intended to be  exclusive of any other remedy or
remedies,  and each and every such remedy  shall be  cumulative  and shall be in


                                       
<PAGE>

addition to every other  remedy  given under this  Mortgage or now or  hereafter
existing at law or in equity. Any delay or omission of Mortgagee to exercise any
right or power  accruing on any Event of Default shall not impair any such right
or power and shall not be  construed  to be a waiver of or  acquiescence  in any
such Event of  Default.  Every  power and remedy  given by his  Mortgage  may be
exercised from time to time as often as may be deemed expedient by Mortgagee. If
Mortgagee  accepts  any  moneys  required  to be paid by  Mortgagor  under  this
Mortgage  after the same becomes due,  such  acceptance  shall not  constitute a
waiver of the right  either to require  prompt  payment,  when due, of all other
sums  secured by this  Mortgage or to declare an Event of Default with regard to
subsequent  defaults.  If  Mortgagee  accepts any moneys  required to be paid by
Mortgagor  under this  Mortgage  in an amount  less than the sum then due,  such
acceptance  shall be deemed an  acceptance  on account only and on the condition
that it shall not  constitute a waiver of the obligation of Mortgagor to pay the
entire  sum then due,  and  Mortgagor's  failure  to pay the entire sum then due
shall be and continue to be an Event of Default  notwithstanding  acceptance  of
such amount on account.


                                   ARTICLE IV

                                 MISCELLANEOUS


     SECTION 4.1  Severability.  In the event any one or more of the  provisions
contained in this Mortgage  shall for any reason be held to be invalid,  illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other  provision of this Mortgage,  but this Mortgage shall
be construed as if such invalid,  illegal or  unenforceable  provision had never
been  contained  herein or therein.  The  invalidity  of any  provision  of this
Mortgage  in any one  jurisdiction  shall not affect or impair in any manner the
validity  of  such  provision  in any  other  jurisdiction.  The  invalidity  or
unenforceability  of this Mortgage with respect to any item of or any portion of
the  Obligations  which it secures shall not invalidate or render  unenforceable
this  Mortgage or the Lien  hereof with  respect to any other item or portion of
the Obligations.


                                       
<PAGE>

     SECTION  4.2  Notices.  All  notices,   demands,   instructions  and  other
communications  required  or  permitted  to be given to or made  upon any  party
hereto  shall  be in  writing  and  shall  be  personally  delivered  or sent by
registered or certified mail, postage prepaid, return receipt requested, or by a
reputable courier delivery  service,  or by prepaid telex, TWX or telegram (with
messenger delivery specified in the case of a telegram),  or by telecopier,  and
shall be deemed to be given for  purposes of this  Mortgage  when  delivered  in
person, received by telecopy or telex or four (4) business days after depositing
it in the United States mail, registered or certified,  with postage prepaid and
properly addressed.  Unless otherwise specified in a notice sent or delivered in
accordance with the foregoing provisions of this Section 4.2, notices,  demands,
instructions and other  communications in writing shall be given to or made upon
the respective  parties at their  respective  addresses (or to their  respective
telex, TWX or telecopier numbers) indicated below:

                  If to Mortgagor:

                  American Standard Inc.
                  15 West 54th Street
                  New York, New York 10019
                  Attention:  Legal Department
                  Telephone:  (212) 397-7610
                  Telecopier No.:  (212) 397-7617

                  If to the BV Borrower:

                  WABCO-Standard HOLDINGS B.V.
                  Jupiter Straat 262
                  2132 NH Hoofddorp,
                  The Netherlands
                  Attention:  W. K. Boonsma
                  Telephone:  31.2 503 40383
                  Telecopier No.:  31.2 503 40418

                  with a copy to:

                  American Standard Inc.
                  15 West 54th Street
                  New York, New York 10019
                  Attention:  Legal Department
                  Telephone:  (212) 397-7610
                  Telecopier No.:  (212) 397-7617

                  If to Mortgagee:

                  Chemical Bank
                  270 Park Avenue
                  New York, New York 10017
                  Attention:  Banking and Corporate Finance
                                      Department (10th Floor)
                  Telephone:  (212) 270-3838
                  Telecopier No.:  (212) 972-0009

                  with a copy to:


                                       
<PAGE>

                  Cravath, Swaine & Moore
                  Worldwide Plaza
                  825 Eighth Avenue
                  New York, New York 10019-7475
                  Attention:  Martin R. Levine, Esq.
                  Telephone:  (212) 474-1950
                  Telecopier No.:  (212) 474-3700

     SECTION 4.3 Covenants to Run with the Land.  All of the grants,  covenants,
terms,  provisions  and  conditions in this Mortgage shall run with the land and
shall apply to, and bind the successors and assigns of Mortgagor.

     SECTION 4.4 Captions;  Gender and Number. The captions and section headings
of this Mortgage are for convenience only and are not to be used to interpret or
define the provisions  hereof.  All terms  contained  herein shall be construed,
whenever the context of this Mortgage so requires, so that the singular includes
the plural and so that the masculine includes the feminine.

     SECTION 4.5  Limitation  on Interest  Payable.  It is the  intention of the
parties to conform  strictly to the usury laws,  whether state or federal,  that
are  applicable  to the  transaction  of  which  this  Mortgage  is a part.  All
agreements  between Mortgagor and the Lenders,  and between Mortgagor and the BV
Borrower, whether now existing or hereafter arising and whether oral or written,
are hereby expressly limited so that in no contingency or event whatsoever shall
the amount paid or agreed to be paid by Mortgagor  for the use,  forbearance  or
detention of the money to be loaned under the Credit Agreement, the Guaranty, or
any related  document,  or for the  payment or  performance  of any  covenant or
obligation  contained herein or in the Credit  Agreement,  the Guaranty,  or any
related document, exceed the maximum amount permissible under applicable federal
or state usury laws. If under any  circumstances  whatsoever  fulfillment of any
such  provision,  at the time  performance of such provision shall be due, shall
involve  exceeding the limit of validity  prescribed by law, then the obligation
to be  fulfilled  shall be reduced to the limit of such  validity.  If under any
circumstances  Mortgagor shall have paid an amount deemed interest by applicable
law,  which would  exceed the  highest  lawful  rate,  such amount that would be
excessive interest under applicable usury laws shall be applied to the reduction
of the  principal  amount  owing in  respect of the  Obligations  and not to the
payment of interest, or if such excessive interest exceeds the unpaid balance of
principal and any other amounts due  hereunder,  the excess shall be refunded to
Mortgagor.  All sums  paid or  agreed  to be paid for the  use,  forbearance  or
detention of the principal  under any  extension of credit by Mortgagee,  any of
the Lenders or the BV Borrower shall, to the extent permitted by applicable law,
and to the  extent  necessary  to  preclude  exceeding  the  limit  of  validity
prescribed by law, be amortized, prorated, allocated and spread from the date of
this Mortgage  until payment in full of the  Obligations so that the actual rate
of interest on account of such principal amounts is uniform  throughout the term
hereof.


                                       
<PAGE>

     SECTION  4.6  Indemnification;  Reimbursement.  Mortgagor  shall  reimburse
Mortgagee (and each Lender),  upon demand, for all costs and expenses other than
with respect to taxes other than taxes  described in Section  1.3.1  incurred by
Mortgagee or such Lender in connection with the  administration  and enforcement
of this  Mortgage,  and shall  indemnify and hold harmless  Mortgagee  (and each
Lender), upon demand, from and against any and all losses,  liability (including
liabilities for penalties),  actions, suits,  proceedings,  judgments,  demands,
costs and expenses  other than with respect to taxes other than taxes  described
in  Section  1.3.1  (including,  without  limitation,  attorneys'  fees  and the
allocated  costs  of staff  counsel)  incurred  by  Mortgagee  (or such  Lender)
hereunder or in connection herewith. If any action or proceeding other than with
respect to taxes other than taxes described in Section 1.3.1, including, without
limitation,  bankruptcy or insolvency proceedings,  is commenced to which action
or  proceeding  Mortgagee (or any Lender) is made a party or in which it becomes
necessary to defend or uphold the Lien or validity of this  Mortgage,  Mortgagor
shall,  upon  demand,  reimburse  Mortgagee  (or such  Lender) for all  expenses
(including, without limitation, attorneys' fees and the allocated costs of staff
counsel) incurred by Mortgagee (or such Lender) in such action or proceeding. In
any action or proceeding to foreclose this Mortgage or to recover or collect the
Obligations,  the  provisions  of law  relating  to  the  recovering  of  costs,
disbursements  and  allowances  shall  prevail   unaffected  by  this  covenant.
Mortgagor's obligations under this Section 4.7 shall survive the satisfaction of
this Mortgage and the discharge of Mortgagor's other obligations hereunder.  The
provisions  of this  Section 4.7 shall not be  construed  in  limitation  of any
provision in the Credit Agreement,  the Guaranty, or any document related to any
thereof.

     SECTION 4.7 Choice of Law. To the extent  permitted by law,  this  Mortgage
shall be governed by and construed in  accordance  with the laws of the State of
New York; otherwise,  enforcement of remedies shall be governed by and construed
in accordance with the laws of the state where the Land is located.

     SECTION 4.8 No Merger. The rights and estate created by this Mortgage shall
not,  under any  circumstances,  be held to have merged into any other estate or
interest now owned or hereafter  acquired by Mortgagee  unless  Mortgagee  shall
have consented to such merger in writing.

     SECTION 4.9 Changes in Writing. This Mortgage may not be modified, amended,
discharged  or waived in whole or in part  except by an  instrument  in  writing
signed by (i) Mortgagor, to the extent any modification, amendment, discharge or
waiver is sought to be enforced against  Mortgagor,  and (ii) Mortgagee,  to the
extent any modification, amendment, discharge or waiver is sought to be enforced
against Mortgagee.

     SECTION  4.10  Mortgagee's  Right  to  Sever  Indebtedness.  (i)  Mortgagor
acknowledges that (a) the Mortgaged Property does not constitute the sole source
of security  for the payment and  performance  of the  Obligations  and that the
Obligations  are also secured by property of  Mortgagor  and its  affiliates  in
other  jurisdictions (all such property,  "Collateral"),  (b) the number of such
jurisdictions  and the nature of the  transaction of which this  instrument is a
part, are such that it would have been impracticable for the parties to allocate
to each item of  Collateral a specific  loan amount and to execute in respect of
such item a separate credit  agreement and (c) Mortgagor  intends that Mortgagee
have the same rights with respect to the Mortgaged  Property,  in foreclosure or
otherwise, that Mortgagee would have had if each item 15



                                      
<PAGE>

     of Collateral had been mortgaged or pledged  pursuant to a separate  credit
agreement  and mortgage or security  document.  In  furtherance  of such intent,
Mortgagor agrees that Mortgagee may at any time by notice ("Allocation  Notice")
to  Mortgagor   allocate  a  portion  (the  "Allocated   Indebtedness")  of  the
Obligations to the Mortgaged  Property and sever from the remaining  Obligations
the Allocated  Indebtedness.  From and after the giving of an Allocation  Notice
with respect to the  Mortgaged  Property,  the  Obligations  hereunder  shall be
limited  to the extent set forth in the  Allocation  Notice and (as so  limited)
shall, for all purposes, be construed as a separate loan obligation of Mortgagor
unrelated to the other transactions contemplated by the Credit Agreement. To the
extent that the proceeds on any  foreclosure  of the  Mortgaged  Property  shall
exceed the Allocated  Indebtedness,  such proceeds shall belong to Mortgagor and
shall not be available  hereunder to satisfy any  Obligations of Mortgagor other
than the  Allocated  Indebtedness.  In any action or proceeding to foreclose the
Lien of this Mortgage or in  connection  with any power of sale  foreclosure  or
other  remedy  exercised  under  this  Mortgage  commenced  after the  giving by
Mortgagee of an Allocation  Notice,  the  Allocation  Notice shall be conclusive
proof of the  limits  of the  Obligations  hereby  secured,  and  Mortgagor  may
introduce,  by way of  defense  or  counterclaim,  evidence  thereof in any such
action or proceeding.

     (ii) Mortgagor hereby waives to the greatest extent permitted under law the
right to a discharge of any of the Obligations  under any statute or rule of law
now or hereafter in effect which  provides that  foreclosure of the Lien of this
Mortgage or other remedy exercised under this Mortgage constitutes the exclusive
means  for  satisfaction  of  the  Obligations  or  which  makes  unavailable  a
deficiency  judgment  or any  subsequent  remedy  because  Mortgagee  elected to
proceed with a power of sale  foreclosure or such other remedy or because of any
failure  by  Mortgagee  to comply  with laws that  prescribe  conditions  to the
entitlement to a deficiency  judgment.  In the event that,  notwithstanding  the
foregoing  waiver,  any court  shall for any reason hold that  Mortgagee  is not
entitled to a  deficiency  judgment,  Mortgagor  shall not (a)  introduce in any
other  jurisdiction such judgment as a defense to enforcement  against Mortgagor
of any remedy in the Credit  Agreement  or any security  document  related to or
executed  in  connection  with the  Credit  Agreement  or (b) seek to have  such
judgment recognized or entered in any other jurisdiction,  and any such judgment
shall in all events be limited in application  only to the state or jurisdiction
where rendered.

     (iii) In the event any instrument in addition to the  Allocation  Notice is
necessary to  effectuate  the  provisions of this  Section,  including,  without
limitation,  any amendment to this Mortgage,  any substitute  promissory note or
affidavit or certificate of any kind, Mortgagee may






<PAGE>




     execute and deliver such instrument as the attorney-in-fact of Mortgagor.


     IN WITNESS WHEREOF, this Mortgage has been duly executed by Mortgagor as of
the date first written above.

                                                          AMERICAN STANDARD INC.

   Witness:



   ____________________________________               By:______________________
                                                      Title:
  Witness:


   ____________________________________               By:______________________
                                                      Title:
 SEAL

This instrument prepared by and, after recording, return to:

Cravath, Swaine & Moore
Worldwide Plaza
825 Eight Avenue
New York, New York 10019-7475
Attention: Martin R. Levine, Esq.




]


<PAGE>





STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )


     On this  day of , 1993,  before  me, a  Notary  Public  duly  commissioned,
qualified and acting within and for said County and State,  personally  appeared
and , who  acknowledged  that  they  were the and ,  respectively,  of  AMERICAN
STANDARD  INC., a  corporation,  and were duly  authorized  in their  respective
capacities to execute the foregoing instrument for and in the name and behalf of
said  corporation,  and further stated and acknowledged that they had so signed,
executed and delivered said foregoing instrument for the consideration, uses and
purposes therein mentioned and set forth.

IN TESTIMONY  WHEREOF, I have hereunto set my hand and official seal this day of
, 1993.



                                                                   Notary Public




                                                                         Printed


My Commission Expires:                                       County of Residence


----------------------
<PAGE>
                             Perfection Certificate
                          Dated as of February 9, 1995


     With reference to (i) the Amended and Restated Credit Agreement (the "1995
Credit Agreement") dated as of the date hereof among American Standard Companies
Inc., American Standard Inc. ("ASI"), certain subsidiaries of ASI (the
"Subsidiary Borrowers"), Chemical Bank, as administrative agent, and the other
parties thereto, and (ii) the Domestic Security Agreements and the Domestic
Securities Pledge Agreements, the officers named below of ASI, after due
investigation, hereby certify as of the date hereof to Chemical Bank and each
Lender as follows (except as otherwise defined in this Certificate, capitalized
terms used herein and defined in the 1995 Credit Agreement shall have the
meanings assigned to them in the 1995 Credit Agreement):

     Attached hereto as Annex A is the Perfection Certificate (the "1993
Perfection Certificate") delivered in connection with the Amended and Restated
Credit Agreement, dated as of June 1, 1993.

     Names. Set forth on Schedule l(a) hereto is the exact corporate name of ASI
and each of the Subsidiary Guarantors who are Domestic Subsidiaries (the
"Grantors") as such name appears in its respective certificate of incorporation
or equivalent document.

     Set forth on Schedule 1(b) hereto is a list of each other corporate name
(if any) each Grantor has had since June 1, 1993.

     1 Set forth on Schedule 1(c) hereto is a true and correct list of all other
names (including trade names or similar appellations) (not previously disclosed
in the 1993 Perfection Certificate) principally used by each Grantor or any of
its divisions or other business units other than those disposed of prior to the
date hereof in connection with the conduct of its business or the ownership of
its properties at any time since June 1, 1993.

     1 Executive Offices. Schedule 2(a) hereto discloses any chief executive
office of each Grantor which is different from the chief executive office
disclosed in the 1993 Perfection Certificate. 1 1 1 1 1 Schedule 2(b) discloses
any location at which each Grantor maintains its principal books and records
relating to its business, properties and assets which is different from the
locations disclosed in the 1993 Perfection Certificate. 1 1 Real Property.
Attached as Schedule 3(a) hereto is a true and correct list of all real property
owned by any Grantor having a fair market value of at least US$100,000 which is
not disclosed in the 1993 Perfection Certificate. The aggregate fair market
value of all real property owned by the Grantors other than the real property
set forth on Schedule 3(a) to this Perfection Certificate or the 1993 Perfection
Certificate does not exceed US$10,000,000.

     1 Attached as Schedule 3(b) hereto is a true and correct list of all leases
of real property owned by any Grantor, having a term to


<PAGE>
     expiration of 10 years or more and annual rental payments (net of taxes and
utilities) in excess of $1,000,000 which are not disclosed in the 1993
Perfection Certificate.

     1 Attached as Schedule 3(c) hereto is a true and correct list of all
locations (other than those set forth on Schedules 2(a), 2(b), 3(a), 3(b), 4 or
5 to this Perfection Certificate or the 1993 Perfection Certificate) at which
the Grantors or any of them maintain assets having a fair market value of not
less than US$2,000,000. The aggregate fair market value of assets maintained by
the Grantors at locations other than those set forth on Schedules 2(a), 2(b),
3(a), 3(b) or 3(c), 4 or 5 to this Perfection Certificate or the 1993 Perfection
Certificate does not exceed US$10,000,000.

     1 Attached as Schedule 3(d) hereto is a true and correct list of all
Principal Properties (as defined in the Senior Indentures) which are not
disclosed in the 1993 Perfection Certificate.

     1 Inventory. Attached as Schedule 4 hereto is a true and correct list of
all locations which are not disclosed in the 1993 Perfection Certificate at
which the Grantors or any of them maintain inventory having a cost value of not
less than US$1,000,000. The aggregate cost value of inventory maintained by the
Grantors at locations other than those set forth on Schedule 4 to this
Perfection Certificate or the 1993 Perfection Certificate does not exceed
US$5,000,000.

     1 Plant, Machinery and Equipment. Attached as Schedule 5 hereto is a true
and correct list of all locations at which the Grantors or any of them maintain
plant, machinery and equipment having a fair market value of not less than
US$1,000,000 which are not disclosed in the 1993 Perfection Certificate. The
aggregate fair market value of plant, machinery and equipment maintained by the
Grantors at locations other than those set forth on Schedule 5 to this
Perfection Certificate or the 1993 Perfection Certificate does not exceed
US$10,000,000.

     1 Transportation. Attached as Schedule 6 hereto is a true and correct list
of all aircraft, rail cars, vessels and vehicles owned by any of the Grantors
(including registration numbers and particulars in respect thereof) save for
aircraft, rail cars, vessels and vehicles having a fair market value of not more
than US$100,000 each and not more than US$1,000,000 in aggregate which are not
disclosed in the 1993 Perfection Certificate.

     1 Intellectual Property. Attached as Schedule 7 hereto is a true and
correct list as of December 31, 1994 (a) of all patents, copyrights and
trademarks which are of importance to the Grantors' business as currently
conducted and which are applied for or registered in the name of any Grantor in
the United States, Canada, France, Germany or the United Kingdom and (b) to the
best knowledge and belief of each Grantor based upon a reasonable search, of all
other patents, copyrights and trademarks of the Grantors or their subsidiaries
which are of importance to the Grantors business as currently conducted together
with details of all registrations and filings relating thereto, which are not
disclosed in the 1993 Perfection Certificate. The Grantors have made all

<PAGE>
     necessary filings and recordations to preserve their interests in patents,
copyrights and trademarks except where failure to do so would not have
reasonably been expected to have a material adverse effect upon the business of
any Grantor taken as a whole.

     1 Stock Ownership. Attached hereto as Schedule 8(a) is a true and correct
list of each direct and indirect subsidiary of ASI and ownership interest
therein expressed as a percentage. For the purposes hereof, a subsidiary is an
entity in which another entity has either majority ownership or power to direct
the voting of a majority of its shares.

     1 Attached hereto as Schedule 8(b) is a true and correct list of each stock
investment (other than joint ventures) of each Grantor (not listed on Schedule
8(a) hereto) which has a fair market value of US$100,000 or more. The aggregate
fair market value of stock investments of each Grantor other than those set
forth on Schedules 8(a) hereto and 8(b) does not exceed US$1,000,000.

     1 Attached hereto as Schedule 8(c) is a true and correct list of each
partnership and joint venture investment of each Grantor which has a fair market
value of US$1,000,000 or more, or for which any such entity is liable to make
capital or other contributions of US$1,000,000 or more which are not disclosed
in the 1993 Perfection Certificate.

     1 Attached hereto as Schedule 8(d) is a true and correct list of all
entities which have become Restricted Subsidiaries (as defined in the Senior
Indentures) since June 1, 1993.

     1 Intercompany Loans. Attached hereto as Schedule 9 is a true and correct
list of all intercompany loans or advances made by or to ASI or any of its
direct and indirect subsidiaries. For the purposes hereof, a subsidiary is an
entity in which another entity has either majority ownership or power to direct
the voting of a majority of its shares.

     IN WITNESS WHEREOF, we have hereunto set our hands this ___ day of February
1995.

                                                          AMERICAN STANDARD INC.



                                                          By
                                                          Name:
<PAGE>
                                                Section 2.18(e)(ii) Certificate







To:               U.K. Borrower and Administrative Agent

From:             [Lender]

Dated:

     Re:  Amended and  Restated  Credit  Agreement  dated as of February 9, 1995
among American Standard Companies Inc. and certain of its Subsidiaries, Chemical
Bank, as Administrative Agent for the Lenders, etc.

Gentlemen:

     In connection with the above-referred Agreement, we hereby certify, under
penalties of perjury, that the undersigned [is managed and controlled from and
incorporated under the laws of the United Kingdom] [is making all of its loans
to the U.K. Borrower through a lending branch or lending office located with the
United Kingdom].

                                                                [Name of Lender]


                                                        By:_____________________
                                                       Title:___________________



<PAGE>

                                                              Exhibit I-1 to the
                                                                Credit Agreement







                        [Form of Supplemental Guarantee]

     SUPPLEMENT NO.--- dated as of--- , to the Amended, Consolidated and
Restated Guarantee dated as of June-1, 1993 (as amended and supplemented through
the date hereof, the "Guarantee"), by AMERICAN STANDARD COMPANIES INC. (formerly
known as ASI Holding Corporation), AMERICAN STANDARD INC. ("ASI") and certain
Subsidiaries of ASI (collectively the "Guarantors") in favor of CHEMICAL BANK,
as collateral agent (the "Collateral Agent") and the other Guaranteed Creditors,
as defined therein. Except as otherwise defined herein, terms used herein and
defined in the Guarantee and the 1995 Credit Agreement (as defined below) shall
be used herein as so defined.


     The Guarantors entered into the Guarantee in order to induce the Lenders to
extend credit under the Amended and Restated Credit Agreement dated as of
February 9, 1995 (as amended, supplemented or otherwise modified from time to
time, the "1995 Credit Agreement") with certain lending institutions named
therein, Chemical, as Administrative Agent, Citibank, N.A. and NationsBank, N.A.
(Carolinas), as Senior Managing Agents, Bank of America National Trust and
Saving Association, The Bank of Nova Scotia, Bankers Trust Company, The Chase
Manhattan Bank, N.A., Compagnie Financiere de Cic et de L'Union Europeene,
Credit Suisse, Deutsche Bank AG, The Industrial Bank of Japan,-Limited, The
Long-Term Credit Bank of Japan, Limited and The Sumitomo Bank,-Ltd., as Managing
Agents, and The Bank of New York, Canadian Imperial Bank of Commerce, The Fuji
Bank, Limited and The Sanwa Bank Limited, as Co-Agents, the Dutch Borrower to
continue to extend credit under the ASI-BV Intercompany Note and the Swap
Providers to enter into Swap Agreements. The Guarantee envisages that additional
Subsidiaries may become Guarantors under the Guarantee by execution and delivery
of an instrument in the form of this Supplement. Pursuant to Section 5.12 of the
1995 Credit Agreement, the undersigned Subsidiary (the "New Guarantor") is
required to become a Guarantor under the Guarantee. The New Guarantor desires to
become a Guarantor under the Guarantee in order to induce the Guaranteed
Creditors to continue to extend credit under the 1995 Credit Agreement or the
ASI-BV Intercompany Note or to enter into Swap Agreements, as the case may be,
and as consideration therefor.

     Accordingly, the Collateral Agent and the New Guarantor agree as follows:

     SECTION 1. In accordance with Section 26 of the Guarantee, the New
Guarantor by its signature hereto shall become a Guarantor under the Guarantee
with the same force and effect as if originally named therein as a Guarantor and
the New Guarantor hereby (i) agrees to all the terms and provisions of the
Guarantee applicable to it as a Guarantor thereunder, (ii) represents and
warrants that the representations and warranties made by it as a Guarantor
thereunder are true and correct on and as of the date hereof and (iii)
acknowledges receipt of a copy of and agrees to be bound by the terms of the
Guarantee and the 1995 Credit Agreement. Each reference to a "Guarantor" in the
Guarantee shall be deemed to include the New Guarantor. The Guarantee is hereby
incorporated herein by reference.

     SECTION 2. This Supplement shall become effective upon delivery to the
Collateral Agent of this Supplement executed on behalf of the New Guarantor.

     SECTION 3. The New Guarantor hereby represents and warrants that (i) this
Supplement has been duly authorized, executed and delivered by the New Guarantor
and constitutes a legal, valid and binding obligation of the New Guarantor,
enforceable against it in accordance with its terms, (ii) attached hereto is a
duly completed Perfection Certificate relating to the New Guarantor and (iii)
set forth under its signature hereto is its address for purposes of notices
under the Guarantee.




<PAGE>




     SECTION 4. Except as expressly supplemented hereby, the Guarantee shall
remain in full force and effect in accordance with its terms.

     SECTION 5. THIS SUPPLEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO NEW YORK'S
CONFLICT OF LAW PROVISIONS (OTHER THAN NEW YORK STATE GENERAL OBLIGATIONS LAW
5-1401).

     SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and in the Guarantee shall not in any way be affected or impaired. The
parties hereto shall endeavor in good-faith negotiations to replace any invalid,
illegal or unenforceable provisions herein with valid provisions, the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

     SECTION 7. This Supplement may be executed in two or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument.

     SECTION 8. The New Guarantor agrees to reimburse the Collateral Agent for
its reasonable out-of-pocket expenses in connection with this Supplement,
including the reasonable fees and expenses of counsel for the Collateral Agent.


     IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent have duly
executed this Supplement to the Guarantee as of the day and year first above
written.


                                             [NAME OF NEW SUBSIDIARY GUARANTOR],

                                             by
                                             Name:
                                             Title:

Notice Address:

<PAGE>
                                                         Exhibit I-2 to the
                                                                Credit Agreement

                    [Form of Foreign Supplemental Guarantee]

                                    GUARANTEE, (the "Guarantee") dated as of
                           [---], [---], made by [-------] (the "Guarantor") in
                           favor of and for the benefit of Chemical Bank
                           ("Chemical") as collateral agent for and
                           representative of (in such capacity herein called the
                           "Collateral Agent") the Lenders, the Lenders, the
                           Senior Managing Agents, the Managing Agents, the
                           Co-Agents and the Administrative Agent under the 1995
                           Credit Agreement (as defined below) and each of their
                           respective successors and assigns. Except as
                           otherwise defined in this Guarantee, capitalized
                           terms used herein and defined in the 1995 Credit
                           Agreement shall have the meaning assigned to them in
                           the 1995 Credit Agreement.


                             Preliminary Statements

                  A. American Standard Companies Inc. ("Holding"), American
Standard Inc. ("ASI") and certain subsidiaries of ASI (the "Subsidiary
Borrowers"), have executed an Amended and Restated Credit Agreement dated as of
February 9, 1995 (as amended, supplemented or otherwise modified from time to
time, the "1995 Credit Agreement") with certain lending institutions named
therein, Chemical, as Administrative Agent, Citibank, N.A. and NationsBank, N.A.
(Carolinas), as Senior Managing Agents, Bank of America National Trust and
Saving Association, The Bank of Nova Scotia, Bankers Trust Company, The Chase
Manhattan Bank, N.A., Compagnie Financiere de Cic et de L'Union Europeene,
Credit Suisse, Deutsche Bank AG, The Industrial Bank of Japan, Limited, The
Long-Term Credit Bank of Japan, Limited and The Sumitomo Bank, Ltd., as Managing
Agents, and The Bank of New York, Canadian Imperial Bank of Commerce, The Fuji
Bank, Limited and The Sanwa Bank Limited, as Co-Agents.

                  B. The Guarantor, the Borrowers and their Subsidiaries are
engaged in their various businesses as part of a group which operates a
consolidated cash management system pursuant to which funds are allocated among
members of the group on an as-and-when-needed basis. The Guarantor expects to
derive benefit, directly or indirectly, from the continued use of the foregoing
procedure, from the proceeds of the Loans and the issuance of the Letters of
Credit pursuant to the terms of the 1995 Credit Agreement, in each case both
individually and as a member of the group, and because the financial condition
of the Guarantor depends upon the financial performance of the Borrowers and the
group as a whole, the Collateral Agent, the Lenders, the Senior Managing Agents,
the Managing Agents, the Co-Agents and the Administrative Agent (collectively,
the "Guaranteed Creditors") have required the Guarantor as a condition precedent
to making the Loans and issuing or participation in the Letters of Credit
pursuant to the terms of the 1995 Credit Agreement, and the Guarantor has
agreed, to guarantee the Guaranteed Obligations (as hereinafter defined) upon
the terms set forth in this Guarantee. In order to induce the Lenders to make
the Loans and to issue or participate in the Letters of Credit, the Guarantor is
willing to execute and deliver this Guarantee.

                  C. In consideration of the above-described extensions of
credit to the Borrowers, and other benefits accruing to the Guarantor, the
receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby
makes the following representations and warranties to the Collateral Agent and
each other Guaranteed Creditor and hereby covenants and agrees with the
Collateral Agent and each other Guaranteed Creditor as follows:

<PAGE>

                  1. The Guarantor irrevocably and unconditionally guarantees
the payment and performance in full in the applicable currency of the
Obligations (but excluding Obligations arising under any Guarantee Document
other than this Guarantee and excluding the Domestic Obligations) (the
"Guaranteed Obligations"), and whether for principal, premium, interest
(including, without limitation, interest which, but for the filing of a petition
in bankruptcy with respect to any Subsidiary Borrower other than American
Standard Credit Inc. (the "Guaranteed Borrowers"), would accrue on such
obligations) or other amounts so that, in each case, the beneficiaries will
receive, after giving effect to any Taxes, the full amount that they would
otherwise be entitled to receive with respect to the Guaranteed Obligations. The
right of a Guaranteed Creditor to receive payments with respect to Taxes shall
be subject to the limitations of Section 2.18 of the 1995 Credit Agreement, and
each Guaranteed Creditor and Guarantor shall have the rights and obligations
specified in such Section 2.18, in each case treating such Guaranteed Creditor
as a Lender and the Guarantor as a Borrower.

                  2. The Guarantor understands, agrees and confirms that this is
a guarantee of payment when due and not of collection and that, subject to the
limitations set forth in this Guarantee, each Guaranteed Creditor may enforce
this Guarantee up to the full amount of the Guaranteed Obligations owed to such
Guaranteed Creditor without proceeding against any Borrower, against any
security for the Guaranteed Obligations, against any other guarantor or under
any other guarantee covering the Guaranteed Obligations.

                  3. The Guarantor hereby waives, to the fullest extent
permitted by applicable law, notice of acceptance of this Guarantee, notice of
any liability to which it may apply, presentment, demand of payment, protest,
notice of dishonor or nonpayment of any such liabilities, suit or taking of
other action by the Collateral Agent or the Guaranteed Creditors against, and
any other notice to, any party liable thereon (including the Guarantor or any
other guarantor).

                  4. The Collateral Agent and any other Guaranteed Creditor may
at any time and from time to time without the consent of, or notice to, the
Guarantor, without incurring responsibility to the Guarantor, without impairing
or releasing the obligations of the Guarantor hereunder or under any security
provided by the Guarantor for performance of its obligations hereunder, upon or
without any terms or conditions and in whole or in part:

     (a) change the manner,  place or terms of payment  (including  the currency
thereof) of, and/or change or extend the time of payment of, renew or alter, any
of the Guaranteed Obligations,  any security therefor, or any liability incurred
directly or indirectly in respect  thereof,  and the guarantee herein made shall
apply to the Guaranteed Obligations as so changed, extended, renewed or altered;

     (b) sell, exchange, release, surrender, realize upon or otherwise deal with
in any manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever  securing,  the Guaranteed  Obligations or any
liabilities  (including any of those hereunder)  incurred directly or indirectly
in respect thereof or hereof, and/or any offset there against;

     (c) fail to  assert  any  claims  or demand or  exercise  or  refrain  from
exercising  any rights or remedies  against any  Borrower or others or otherwise
act or refrain from acting;

     (d) settle or compromise  any of the Guaranteed  Obligations,  any security
therefor or any liability  (including any of those hereunder)  incurred directly
or indirectly in respect  thereof or hereof,  and subordinate the payment of all
or any part thereof to the payment of any liability  (whether due or not) of any
Borrower;
<PAGE>

     (e) apply any sum by whomsoever paid or howsoever realized to any liability
or  liabilities  of any  Borrower,  or any  other  guarantor  of any  Guaranteed
Obligations  to  the  Guaranteed  Creditors  regardless  of  what  liability  or
liabilities of the Borrowers remain unpaid; and/or

     (f)  consent  to or waive any breach  of, or any act,  omission  or default
under,  the 1995 Credit  Agreement  or any other  Credit  Documents or otherwise
amend,  modify  or  supplement  the 1995  Credit  Agreement,  any  other  Credit
Documents or any of such other instruments or agreements.

                  5. To the extent permitted by applicable law, no invalidity,
irregularity or unenforceability of all or part of the Guaranteed Obligations or
of any security therefor shall affect, impair or be a defense to this Guarantee,
and this Guarantee is a primary obligation of the Guarantor.

                  6. If and to the extent that the Guarantor makes any payment
to the Collateral Agent or any other Guaranteed Creditor or to any other person
pursuant to or in respect of this Guarantee, any claim which the Guarantor may
have against any Guaranteed Borrower or other person by reason thereof shall be
subject and subordinate to, and no payment with respect to any such claim of the
Guarantor shall be made before, the prior payment in full in cash in the
applicable currency of the Guaranteed Obligations owed to each Guaranteed
Creditor.

                  7. This Guarantee is a continuing guarantee and all
liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. No failure or
delay on the part of the Collateral Agent or any other Guaranteed Creditor in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Guaranteed Creditor would otherwise have. No notice to or demand on
the Guarantor in any case shall entitle the Guarantor to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Collateral Agent or any other Guaranteed Creditor to any other or
further action in any circumstances without notice or demand.

                  8. The Guarantor represents and warrants that all
representations and warranties contained in the 1995 Credit Agreement which
relate to the Guarantor are true and correct in all material respects and the
Guarantor does not intend to, and does not intend to permit any of its
Subsidiaries, if any, to, incur debts beyond their respective abilities to pay
such debts as they mature, taking into account the timing and amounts of cash to
be received by the Guarantor and each of such Subsidiaries, and of amounts to be
payable on or in respect of debt of the Guarantor and each of such Subsidiaries.

                  9. (a) The Guarantor hereby agrees upon demand to pay all
reasonable costs and expenses of the Collateral Agent and each other Guaranteed
Creditor in connection with the enforcement of this Guarantee and any amendment,
waiver or consent relating hereto (including, without limitation, the reasonable
fees and disbursements of counsel employed by the Collateral Agent or any other
of the Guaranteed Creditors), except to the extent such costs and expenses
result from the gross negligence or willful misconduct of the Collateral Agent
or such other Guaranteed Creditor (as appropriate).
<PAGE>

     (b) The Guarantor  agrees to indemnify the Collateral  Agent and each other
Guaranteed Creditor for any and all liabilities,  obligations,  losses, damages,
penalties,  actions,  judgments,  suits, costs, expenses or disbursements of any
kind and  nature  whatsoever,  other than with  respect  to taxes,  which may be
imposed on, incurred by, or asserted  against the Collateral  Agent or any other
Guaranteed  Creditor in any way relating to or arising out of this  Guarantee or
the  enforcement of any of the terms hereof or otherwise  arising or relating in
any manner to the Guarantee contemplated hereunder;  provided, however, that the
Guarantor  shall not be liable for any of the foregoing to the extent they arise
from the gross  negligence or willful  misconduct of the Collateral Agent or any
other Guaranteed Creditor.

     (c) Any such  amounts  payable as provided  hereunder  shall be  additional
Guaranteed Obligations.  The provisions of this Section 9 shall remain operative
and in full force and effect  regardless of the  termination of this  Agreement,
the consummation of the transactions  contemplated  hereby, the repayment of any
of the Loans,  the  invalidity or  unenforceability  of any term or provision of
this Guarantee or any Credit Document, or any investigation made by or on behalf
of the Collateral Agent or any Guaranteed  Creditor.  All amounts due under this
Section 9 shall be payable on written demand therefor.

                  10. This Guarantee shall be binding upon the Guarantor and its
successors and assigns and shall inure to the benefit of the Collateral Agent,
the Guaranteed Creditors and their successors and assigns and, in the event of
any transfer permitted or assignment permitted of rights by a Guaranteed
Creditor or the replacement of the Collateral Agent, the rights and privileges
herein conferred upon that Guaranteed Creditor or the Collateral Agent shall
automatically extend to and be vested in such permitted transferee, assignee or
replacement, all subject to the terms and conditions hereof.

                  11. Neither this Guarantee nor any provision hereof may be
changed, waived, discharged or terminated, except with the written consent of
the Required Lenders or as otherwise provided in the 1995 Credit Agreement.

                  12. The Guarantor acknowledges that an executed (or conformed)
copy of the 1995 Credit Agreement and each of the other Credit Documents will be
made available to its principal executive officers.

                  13. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default each Guaranteed
Creditor is hereby authorized at any time or from time to time, without notice
to the Guarantor or to any other person, any such notice being expressly waived,
to the extent permitted by applicable law, to set off and to appropriate and
apply any and all deposits (general or special) and any other indebtedness at
any time held or owing by such Guaranteed Creditor to or for the credit or the
account of the Guarantor, against and on account of the obligations and
liabilities of the Guarantor to such Guaranteed Creditor under this Guarantee,
irrespective of whether or not such Guaranteed Creditor shall have made any
demand hereunder.

                  14. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto shall be given in accordance with Section 10.03 of the 1995 Credit
Agreement. For the purposes hereof, and thereof, the address of the Guarantor is
set opposite its signature below and the addresses of the Lenders and the
Collateral Agent shall be the addresses in effect from time to time under the
1995 Credit Agreement.
<PAGE>

                  15. Any payment of a Guaranteed Obligation required to be made
pursuant to this Guarantee shall be made in the currency in which such
Guaranteed Obligation is required to be made pursuant to the 1995 Credit
Agreement or such other Credit Document giving rise to such Guaranteed
Obligation.

                  16. If claim is ever made upon the Collateral Agent or any
Guaranteed Creditor for repayment or recovery of any amount or amounts received
in payment or on account of any of the Guaranteed Obligations and any of the
aforesaid payees repays all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property, or (b) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including any Borrower), then and in such event the Guarantor agrees that any
such judgment, decree, order, settlement or compromise shall be binding upon it,
notwithstanding any revocation hereof or the cancellation of the 1995 Credit
Agreement, any other Credit Document or other instrument evidencing any
liability of a Borrower or any other Guaranteed Obligation, and the Guarantor
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any payee.

                  17. Any acknowledgement or new promise, whether by payment of
any Guaranteed Obligation or otherwise and whether by a Borrower or others
(including the Guarantor), with respect to any of the Guaranteed Obligations
shall to the extent permitted by applicable law, if the statute of limitations
in favor of the Guarantor against the Collateral Agent or any Guaranteed
Creditor shall have commenced to run, toll the running of such statute of
limitations, and if the period of such statute of limitations shall have
expired, prevent the operation of such statute of limitations.

                  18. The Guarantor hereby waives any claim, right or remedy
which the Guarantor may now have or hereafter acquire against the Borrowers that
arises hereunder, including, without limitation, any claim, remedy or right of
subrogation, reimbursement, exoneration, contribution, indemnification, or
participation in any claim, right or remedy of the Guarantor against the
Borrowers whether or not such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise. If any amount shall
erroneously be paid to the Guarantor on account of such subrogation,
contribution, reimbursement, indemnity and similar rights, such amount shall be
held in trust for the benefit of the Guaranteed Creditors and shall forthwith be
paid to the Collateral Agent to be credited and applied to the payment of the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms of the 1995 Credit Agreement and other Credit Documents.

                  19. Any term or provision of this Guarantee to the contrary
notwithstanding, the maximum, aggregate amount of the Guaranteed Obligations
guaranteed hereunder by the Guarantor shall not exceed the maximum amount that
can be hereby guaranteed by the Guarantor without rendering this Guarantee, as
it relates to the Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.

                  20. THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO NEW YORK'S CONFLICTS
OF LAWS PROVISIONS (OTHER THAN NEW YORK STATE GENERAL OBLIGATIONS LAW S-5-1401)
EXCEPT AS REQUIRED BY THE MANDATORY PROVISIONS OF LAW.
<PAGE>

                  21. Any judicial proceedings brought against the Guarantor
with respect to this Guarantee may be brought in any state or federal court of
competent jurisdiction in the State of New York and, by execution and delivery
of this Guarantee, the Guarantor hereby accepts for itself and in respect of its
properties, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts and hereby waives, to the extent permitted by applicable law,
any right it may have to object to the bringing of any such action or proceeding
in the aforesaid courts based on the grounds of forum non conveniens, and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with this Guarantee. The Guarantor designates and appoints American Standard,
Inc., 13-15 West 54th Street, New York, New York 10019, Attention: Legal
Department, and such other persons as may hereafter be selected by it
irrevocably agreeing in writing to so serve, as its agent to receive on its
behalf service of all process in any such proceedings in any such court, such
service being hereby acknowledged by the Guarantor to be effective and binding
service in every respect. A copy of any such process so served shall be mailed
by registered mail to the Guarantor at the address set forth on the signature
page of this Guarantee, except that unless otherwise provided by applicable law,
any failure to mail such copy shall not affect the validity of service of
process. If any agent appointed by the Guarantor refuses to accept service, the
Guarantor hereby agrees that service upon it by mail shall constitute sufficient
notice. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of any Guaranteed Creditor to
bring proceedings against the Guarantor in the courts of any other jurisdiction.

                  22. Each party hereto hereby waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect
of any litigation directly or indirectly arising out of, under or in connection
with this Guarantee, the 1995 Credit Agreement or any of the other Credit
Documents. Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Guarantee, the 1995 Credit Agreement and the other
Credit Documents, as applicable, by, among other things, the mutual waivers and
certifications in this Section.

                  23. This Guarantee shall remain in full force and effect and
may not be terminated or otherwise revoked by the Guarantor, but shall be
terminated without further act subject to paragraph 16 above (i) when the
Guarantor is released from its obligations hereunder in accordance with Section
6.02 of the 1995 Credit Agreement or (ii) if earlier, but only for so long as
there are no Guaranteed Obligations outstanding, when all the Guaranteed
Obligations have been paid in full in cash in the applicable currency and the
Lenders have no further commitment to make Loans or to issue Letters of Credit
and there are no Letters of Credit issued, unexpired and not fully drawn and/or
not fully reimbursed, under the 1995 Credit Agreement; and upon termination the
Collateral Agent shall execute and deliver to the Guarantor such releases in
respect of the Guarantor's obligations hereunder as the Guarantor may reasonably
request.

                  24. (a) The Guarantor's obligations under this Guarantee to
make payments in Dollars or in any other currency (the "Obligation Currency")
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any currency other than the Obligation
Currency, except to the extent that such tender or recovery results in the
effective receipt by the Collateral Agent or the relevant Guaranteed Creditor of
the full amount of the Obligation Currency expressed to be payable to them under
this Guarantee. If for the purpose of obtaining or enforcing judgment against
the Guarantor in any court or in any jurisdiction, it becomes necessary to
convert into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "Judgment Currency") an amount due
in the Obligation Currency, the conversion shall be made, at the Alternate
Currency Equivalent or Dollar Equivalent, in the case of Foreign Currency or
Dollars, and, in the case of other currencies, the rate of exchange (as quoted
by the Administrative Agent or if the Administrative Agent does not quote a rate
<PAGE>

of exchange on such currency, by a known dealer in such currency designated by
the Administrative Agent) determined, in each case, as on the day immediately
preceding the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date").

     (b) If there is a change in the rate of  exchange  prevailing  between  the
Judgment  Currency  Conversion Date and the date of actual payment of the amount
due, the Guarantor  covenants and agrees to pay such additional  amounts, if any
(but in any event not a lesser  amount),  as may be necessary to ensure that the
amount paid in the  Judgment  Currency,  when  converted at the rate of exchange
prevailing  on the date of payment,  will  produce the amount of the  Obligation
Currency which could have been  purchased  with the amount of Judgment  Currency
stipulated in the judgment or judicial award at the rate of exchange  prevailing
on the Judgment Currency Conversion Date.

     (c) For purposes of determining the Alternate Currency Equivalent or Dollar
Equivalent or rate of exchange for this Section,  such amounts shall include any
premium and costs  payable in  connection  with the  purchase of the  Obligation
Currency.

     25. If (i) there is an event  with  respect  to the  Guarantor  that  would
require  or  permit  the  acceleration  under  Section  7.05 of the 1995  Credit
Agreement of any  outstanding  Loan if the Guarantor  were a Borrower  under the
1995 Credit Agreement,  or (ii) the Guarantor's  obligations,  if any, under the
1995 Credit Agreement are accelerated,  all of the Guaranteed  Obligations shall
be immediately due and payable by the Guarantor.


     IN WITNESS WHEREOF,  the Guarantor has caused this Guarantee to be executed
and delivered as of the date first above written.


                                            [Name]

                                            by

                                            Name:
                                            Title:

Notice Address:

[              ]