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                       FIRST AMENDMENT TO CREDIT AGREEMENT

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                                     between

                             LILLY INDUSTRIES, INC.

                             an Indiana corporation


                          the Lenders Signatory Hereto


                                       and


                            NBD Bank, N.A., as Agent

                                       and

                          HARRIS TRUST AND SAVINGS BANK
                                  COMERICA BANK
                          MERCANTILE BANK OF ST. LOUIS
                             BANK ONE, INDIANA, N.A.
                                  as Co-Agents


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                            Dated as of April 2, 1997

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                                TABLE OF CONTENTS


                                                                           Page
PART 1.       AMENDATORY PROVISIONS                                          1

SECTION 1.    Definitions                                                    1
1.1   Defined Terms                                                          1

SECTION 5. Covenants                                                         2
5.2.     Negative Covenants                                                  2
         5.2.17.   Capital Expenditures                                      2

PART II.          SCHEDULE 1                                                 2
-------           ----------

PART III.         CONTINUING EFFECT                                          2

PART IV.          INDEPENDENT CREDIT DECISION                                3

PART V.           CONDITIONS PRECEDENT                                       3




<PAGE>






                       FIRST AMENDMENT TO CREDIT AGREEMENT

         THIS  FIRST  AMENDMENT  made as of the 2nd day of April,  1997,  by and
among LILLY  INDUSTRIES,  INC., an Indiana  corporation  (the  "Borrower"),  the
LENDERS party hereto,  and NBD BANK,  N.A., a national banking  association,  as
agent for the Lenders hereunder (in such capacity, the "Agent");

                                   WITNESSETH:

         WHEREAS, as of April 8, 1996, the parties hereto entered into a certain
Credit Agreement (the "Agreement"); and

         WHEREAS,  the  Borrower  has  requested  an increase  in the  permitted
capital  expenditures  and certain changes to the definition of the fixed charge
coverage ratio and the Lenders have consented to such changes  subject to and as
provided in this First Amendment;

         NOW,  THEREFORE,  in  consideration  of the  premises,  and the  mutual
promises herein contained, the parties agree that the Agreement shall be, and it
hereby is, amended as provided herein and the parties further agree as follows:


                          PART I. AMENDATORY PROVISIONS

                             Section 1. Definitions

1.1      Defined Terms.

         1.1. Section 1.1 of the Agreement is hereby amended by substituting the
following definition in lieu of the like existing definition:

                  "Fixed  Charge  Coverage  Ratio"  means,  with  respect to the
         Borrower and its Subsidiaries  determined on a Consolidated  basis, the
         ratio of (a)(i)  EBITDA,  minus (ii) Capital  Expenditures,  plus (iii)
         cash received from life insurance policies surrendered by the Borrower,
         plus (iv) for fiscal  years 1997 and 1998 only,  the lesser of (A) cash
         received  from the sale of any asset  classified  as a fixed or capital
         asset  on  a  Consolidated  balance  sheet  of  the  Borrower  and  its
         Subsidiaries  prepared in accordance  with GAAP or (B) Two Million Five
         Hundred Thousand Dollars  ($2,500,000),  to (b) the sum of (i) interest
         expense,   plus  (ii)  scheduled   principal  payments  in  respect  of
         Indebtedness  paid in such  period,  plus (iii) taxes  paid,  plus (iv)
         Rentals,  plus (v) dividends paid in such period,  all as determined on
         the last day of each fiscal quarter of the Borrower by reference to the
         Financial Statements; in each


                                                        -1-

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         instance  determined for the trailing four (4) quarter period ending on
         the date of  determination,  except that for the fiscal  period  ending
         February  28,  1997,  the  foregoing  items (other than EBITDA and cash
         received pursuant to items (a)(iii) and (iv) above) shall be determined
         by   multiplying   each  of  the  same  as  determined  for  the  three
         quarter-annual period then ending by a factor of 1.333.

         Section 1.1 of the Agreement is hereby further  amended by amending the
definition  of  "Obligations"  by adding "or an Affiliate of a Lender"  after "a
Lender" in the fifth line thereof.


                              Section 5. Covenants

5.2.     Negative Covenants.

         5.2.17. Capital Expenditures. Section 5.2.17 of the Agreement is hereby
amended by increasing the Maximum Capital Expenditures (a) for fiscal year 1997,
from $10,000,000 to $20,000,000,  and (b) for fiscal year 1998, from $10,000,000
to an amount equal to (i) $10,000,000 plus (ii) the positive difference, if any,
of $20,000,000 minus the actual aggregate  Capital  Expenditures of Borrower and
its Subsidiaries during fiscal year 1997.

                               PART II. SCHEDULE 1

         The  Agreement  is hereby  amended by  substituting  Schedule 1 to this
First Amendment in lieu of Schedule I to the Agreement.


                           PART III. CONTINUING EFFECT

         All other terms, conditions, representations,  warranties and covenants
contained  in the  Agreement  shall  remain the same and shall  continue in full
force and effect. In consideration  hereof, the Borrower represents and warrants
that each  representation  and  warranty  set forth in the  Agreement  as hereby
amended,  remains  true  and  correct  as of the  date  hereof  in all  material
respects,  except  to the  extent  that  such  representation  and  warranty  is
expressly  intended  to apply  solely  to an  earlier  date and  except  changes
reflecting  transactions  permitted by the Agreement,  and that there  presently
exists  no  offsets,  counterclaims  or  defenses  to  the  performance  of  the
Obligations  (such  offsets,  counterclaims  or defenses,  if any,  being hereby
expressly  waived),  nor has there  occurred  any Default or  Unmatured  Default
thereunder,  and no Default or  Unmatured  Default  after  giving  effect to the
transactions  contemplated or otherwise  covered by this First Amendment,  is or
shall be occasioned thereby. The representations and warranties contained in the
Agreement  originally shall survive this First Amendment in their original form,
except  as  expressly   herein   modified,   and  shall  survive  as  continuing
representations  and  warranties  of the  Borrower.  Except as expressly  herein
provided, the Agreement and this First Amendment shall be interpreted,  wherever
possible, in a


                                                        -2-

<PAGE>




manner  consistent  with one  another,  but in the  event of any  irreconcilable
inconsistency, this First Amendment shall control. Capitalized terms used herein
and not  specifically  herein  defined  shall have the meanings  ascribed in the
Agreement.


                      PART IV. INDEPENDENT CREDIT DECISION

         Each  Lender  acknowledges  that  it  has,  independently  and  without
reliance  upon the  Agent or any  other  Lender,  based  on such  documents  and
information  as it has  deemed  appropriate,  made its own credit  analysis  and
decision to enter into this First Amendment.


                          PART V. CONDITIONS PRECEDENT

         Notwithstanding  anything  contained  in this  First  Amendment  to the
contrary,  the Lenders shall have no obligation under this First Amendment until
each  of  the  following   conditions  precedent  have  been  fulfilled  to  the
satisfaction of the Agent:

                  (a) Each of the  conditions  set forth in  Section  6.2 of the
         Agreement shall have been satisfied;

                  (b) The Agent shall have  received each of the  following,  in
         form and substance satisfactory to the Agent:

                           (i) The Loan Documents,  as amended, duly executed in
                  the form approved by the Lenders;

                           (ii) A duly executed  certificate of the Secretary or
                  any Assistant  Secretary of the Borrower (A)  certifying as to
                  attached  copies of  Resolutions  of the Board of Directors of
                  the  Borrower   authorizing   the   execution,   delivery  and
                  performance of the Loan Documents,  as amended,  and any other
                  documents  provided  for in this First  Amendment to which the
                  Borrower is a party,  (B)  certifying the names of the officer
                  or  officers  authorized  to  sign,  respectively,   the  Loan
                  Documents, as amended, and any other documents provided for in
                  this First  Amendment  to which the  Borrower is a party,  and
                  containing  a  sample  of the  true  signature  of  each  such
                  officer,  and (C)  certifying  as  complete  and correct as to
                  attached copies of the Articles of  Incorporation  and By-Laws
                  of  the  Borrower  or   certifying   that  such   Articles  of
                  Incorporation  or  By-Laws  have not been  amended  (except as
                  shown) since the previous delivery thereof to the Agent;

                           (iii)   An   Eighty-Six    Thousand   Seven   Hundred
                  Thirty-Seven and 50/100 Dollar  ($86,737.50) fee in respect of
                  this  First  Amendment  shall  be paid to the  Agent,  for the
                  benefit of each Lender in  accordance  with each  Lender's Pro
                  Rata Share, and

                                                        -3-

<PAGE>




                  all  reasonable  expenses  of the  Agent,  including,  without
                  limitation, attorneys' fees, shall have been reimbursed by the
                  Borrower; and

                           (c)  All  legal   matters   incident  to  this  First
                  Amendment  shall be reasonably  satisfactory  to the Agent and
                  its counsel.

         IN WITNESS WHEREOF, the Borrower, the Agent and the Lenders have caused
this First Amendment to be executed by their respective officers duly authorized
as of the date first above written.








                      [This space intentionally left blank]





















                                                        -4-

<PAGE>




LILLY INDUSTRIES, INC.                            NBD BANK, N.A.,
                                                  individually and as Agent

By:   /s/ Douglas W. Huemme                       By:  /s/ Dennis L. Bassett
      Douglas W. Huemme, Chairman                      Dennis L. Bassett,
      President and Chief Executive Officer            First Vice President

COMERICA BANK                                     HARRIS TRUST AND SAVINGS BANK
individually and as Co-Agent                      individually and as Co-Agent

By:   /s/ Phillip A. Coosaia                      By:      /s/ Peter Krawchuk
      Phillip A. Coosaia                                   Peter Krawchuk
      Vice President                                       Vice President

MERCANTILE BANK OF ST. LOUIS                      BANK ONE, INDIANA, N.A.
individually and as Co-Agent                      (formerly known as Bank One, 
                                                  Indianapolis, N.A.)
                                                  individually and as Co-Agent

By:   /s/ Joseph L. Sooter, Jr.                   By:      /s/ Brian D. Smith
      Vice President                                       Vice President

CREDIT LYONNAIS                                   CANADIAN IMPERIAL BANK 
CHICAGO BRANCH                                    OF COMMERCE

By:   /s/                                         By:      /s/
      Vice President                                    Director

FIRST UNION NATIONAL BANK                         THE LONG-TERM CREDIT BANK OF
  OF NORTH CAROLINA                               JAPAN, LTD., CHICAGO BRANCH

By:  /s/ Mark M. Harden                           By:   /s/ Brady S. Sadek
     Mark M. Harden                                     Brady S. Sadek
     Vice President                                     Vice President & Deputy 
                                                        General Manager

DRESDNER BANK AG, Chicago                         NATIONAL CITY BANK, INDIANA
and Grand Cayman Branches

By:                                               By:   /s/ Frank B. Meltzer
                                                        Frank B. Meltzer
                                                        Vice President and 
                                                        Senior Lending Officer



                                                         -5-

<PAGE>

<TABLE>
<CAPTION>


<S>     <C>                                        <C>  
DG BANK                                              KEYBANK, NATIONAL ASSOCIATION
                                                     (formerly known as Society National Bank)

By:      /s/ Norah McCam                             By:      /s/ Frank J. Jancar
         Senior Vice President                                Vice President

CRESENT/MACH I PARTNERS, L.P.                        INTEGON LIFE INSURANCE CORPORATION
By:      TCW ASSET MANAGEMENT                        By:      TCW ASSET MANAGEMENT
         COMPANY,                                             COMPANY, its Attorney-in-Fact
         its Investment Manager

         By:      /s/ Justin Driscoll                         By:      /s/ Justin Driscoll
                  Justin Driscoll                                      Justin Driscoll
                  Vice President                                       Vice President

SENIOR DEBT PORTFOLIO                                BANK OF SCOTLAND
By:      Boston Management and
         Research, Investment Advisor

         By:      /s/ Scott H. Page                  By:      /s/Annie Chin Tat
                  Scott H. Page                               Annie Chin Tat
                  Vice President                              Assistant Vice President

KEYPORT LIFE INSURANCE                               MEDICAL LIABILITY MUTUAL INSURANCE CO.
COMPANY                                              By:      Chancellor LGT Senior Secured Management, Inc.
By:      Chancellor LGT Senior Secured                        as Investment Manager
         Management, Inc.
         as Portfolio Advisor

By:      /s/ Reginald J. Woodard                     By:      /s/ Reginald J. Woodard
         Reginald J. Woodard                                  Reginald J. Woodard
         Assistant Vice President                             Assistant Vice President

UNITED OF OMAHA LIFE
INSURANCE COMPANY
By:      Chancellor LGT Senior Secured
         Management, Inc.
         as Portfolio Advisor

By:      /s/ Reginald J. Woodard
         Reginald J. Woodard
         Assistant Vice President
</TABLE>