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                        THIRD AMENDMENT TO LOAN AGREEMENT



        This THIRD AMENDMENT TO LOAN AGREEMENT ("Amendment") dated as of March
12, 1997 is made by and among APOGEE, INC., a Delaware corporation ("Apogee")
and each Subsidiary identified on the attached Schedule 6.1(c) (collectively,
the "Borrowing Subsidiaries" and together with Apogee, the "Borrowers" and
individually, a "Borrower") and PNC BANK, NATIONAL ASSOCIATION, a national
banking association (the "Bank").

        Reference is made to the Revolving Credit Agreement dated as of April
11, 1996 by and between the Borrowers and the Bank, as amended on June 21, 1996
and November 1, 1996 (the "Agreement") pursuant to which the Bank made available
to the Borrowers a $15,000,000 revolving credit facility. The obligations under
the Agreement and the Loan Documents were evidenced by the Borrowers' Note
payable to the Bank. (Capitalized terms used herein not otherwise defined shall
have the meanings provided for in the Agreement.)

        The Borrowers and the Bank have agreed that the Agreement be amended as
provided herein, effective as of the date hereof, to provide for a new structure
of the Revolving Credit Commitment, eliminate all references to the Borrowing
Base and amend certain other provisions of the Agreement in connection
therewith.

        NOW, THEREFORE, in consideration of the foregoing and for other
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:


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        1.      AMENDMENT TO AGREEMENT.

                (a) Section 1.1 of the Agreement and the Agreement generally
(including without limitation, Section 2.5, 5.3 and 7.1 thereof) are hereby
amended by deleting the following definitions and all references to them:

                         Borrowing Base
                         Borrowing Base Certificate

                (b) Section 1.1 of the Agreement is hereby further amended by
adding the following definitions:

                                  Commitment Limit shall mean for any date in
                any fiscal quarter, an amount equal to (x) Consolidated Cash
                Flow from Operations for the prior twelve (12) month period
                multiplied by (y) the ratio set forth in Section 8.2(n) in
                respect of such quarter.

                                  Discretionary Advance Sublimit shall have the
                meaning given to such term in Section 2.1(b).

                                  Revolving Credit Commitment shall mean the
                lesser of (x) Fifteen Million Dollars ($15,000,000) and (y) the
                Commitment Limit, subject in all respects to the Discretionary
                Advance Sublimit.

                (c) Section 1.1 of the Agreement is hereby further amended by

                         (i) amending and restating the definition of Expiration
Date to read in its entirety as follows: Expiration Date shall mean June 30,
1998;

                         (ii) by amending the definition of Consolidated Net
Income by adding at the end thereof a new sentence to read in its entirety as
follows:

                         For purposes of calculating the financial covenants in
                         Section 8.2(o), Consolidated Net Income for the fiscal
                         quarters ended March 31, 1996, June 30, 1996, September
                         30, 1996 and December 31, 1996 shall be deemed to be
                         $381,000, $710,000, $605,000 and
                         $(252,000) respectively.


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                         (iii) by amending the definition of Consolidated Cash
Flow From Operations by (x) inserting at the end of item (i), before the comma,
the phrase:

                         and for the fiscal quarter ended March 31, 1997 only,
                         an amount equal to $325,000 (which represents the loss
                         from discontinued operations) and (y) adding at the end
                         thereof the following phrase:

                         and for each of the four (4) fiscal quarters ending
                         March 31, 1996, June 30, 1996, September 30, 1996 and
                         December 31, 1996, shall be deemed to be $1,381,534,
                         $1,843,367, $1,715,030 and $607,046, respectively.

                ; and

                         (iv) by substituting in the definition of Minimum Net
                         Worth

Requirement for the phrase "$78,739,000" the phrase "$65,180,000."

                (d) Section 2.1 of the Agreement is hereby amended and restated
to read in its entirety as follows:

                         (a) Subject to the terms and conditions hereof
                (including, without limitation, subsection (b) hereof), and
                relying upon the representations and warranties herein set
                forth, the Bank agrees to make revolving credit loans (the
                "Revolving Credit Loans") to any of the Borrowers at any time or
                from time to time on or after the date hereof to, but not
                including, the Expiration Date, in an aggregate principal amount
                not to exceed at any one time the Bank's Revolving Credit
                Commitment minus the aggregate undrawn face amount of
                outstanding Letters of Credit issued pursuant to Section 2.9.
                Within such limits of time and amount and subject to the other
                provisions of this Agreement, the Borrowers may borrow, repay
                and reborrow pursuant to this Section 2.1. Of the Revolving
                Credit Commitment, an amount up to and including Twelve Million
                Dollars ($12,000,000) shall be available, subject to the
                provisions of this Agreement, for Revolving Credit Loans
                irrespective of subsection (b) hereof.

                         (b) Revolving Credit Loans made under that portion of
                the Revolving Credit Commitment in excess of Twelve Million
                Dollars ($12,000,000) (such excess being the "Discretionary
                Advance Sublimit") shall be made, if at all, at the sole
                discretion of the Bank. The Bank may decline to make Loans under
                the Discretionary Advance Sublimit at any time and for any
                reason


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                         without prior notice to Apogee or any Borrower. The
                         Bank's willingness to consider making any Loan under
                         the Discretionary Advance Sublimit is subject to the
                         Bank's evaluation of the circumstances under which the
                         request for such Loan arises, the security and
                         collateral therefor, any credit support, guaranties or
                         credit enhancement to be provided in connection
                         therewith and other matters deemed appropriate by the
                         bank in its sole discretion. Unless otherwise agreed in
                         writing at the time any such Loan is made, the maturity
                         date of Loans outstanding under the Discretionary
                         Advance Sublimit shall be determined by the Bank at the
                         time such Loan is made and shall not be after the
                         Expiration Date.

                         (e) Section 5.3(b) of the Agreement is hereby amended
and restated to read in its entirety as follows:

                                  The Borrowers shall by payment of money to the
                         Bank reduce the amount outstanding hereunder if and to
                         the extent it exceeds the Revolving Credit Commitment
                         as calculated using the most recently delivered
                         financial statements delivered pursuant to Section
                         8.1(m) or to the extent it exceeds amounts permitted by
                         the Bank to be outstanding under the Discretionary
                         Advance Sublimit. Such reductions shall be made within
                         five (5) Business Days after the Bank has provided
                         notice of the determination of such excess.

                         (f) Section 8.1(m)(v) of the Agreement is hereby
amended to delete references to the Borrowing Base and Exhibit 8.1(m)(v) is also
amended to delete references to, or provide for the calculation of, the
Borrowing Base.

                         (g) Section 8.2(k), relating to the current ratio, is
hereby deleted.

                         (h) Section 8.2(m) of the Agreement is hereby amended
by substituting for the table set forth therein the following table:



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<TABLE>
<CAPTION>
                                  Period Ended                         Ratio
                                  ------------                         -----
<S>                               <C>                                  <C>
                                  December 31, 1996 and                3.4
                                  March 31, 1997

                                  June 30, 1997                        3.6

                                  September 30, 199                    3.5

                                  December 31, 1997 and                3.0
                                  thereafter
</TABLE>


                         (i)      Section 8.2(n) of the Agreement is hereby
                amended by (x) adding after the phrase "Indebtedness
                under this Agreement" in item (i) the phrase: "except for
                principal amounts not in excess of $12,000,000" and (y)
                substituting for the table set forth therein the following
                table:


<TABLE>
<CAPTION>
                                    Period Ended                             Ratio
                                    ------------                             -----
<S>                                 <C>                                      <C>
                                    December 31, 1996 and                    2.25
                                    March 31, 1997

                                    June 30, 1997                            2.60

                                    September 30, 1997                       2.70

                                    December 31, 1997 and                    2.50
                                    thereafter
</TABLE>

                         (j) Section 8.2(o) of the Agreement is hereby amended
by (x) inserting at the end of the item (A) after the phrase "income taxes" the
phrase:

                           and for the fiscal quarter ended March 31, 1997 only,
                           an amount equal to $325,000 (which represents the
                           loss from discontinued operations)

and (y) substituting for the table therein the following table:


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<TABLE>
<CAPTION>
                                    Period Ended                       Ratio
                                    ------------                       -----
<S>                                 <C>                                <C>
                                    December 31, 1996 and              2.10 to 1.0
                                    March 31, 1997

                                    June 30, 1997                      1.3 to 1.0

                                    September 30, 1997                 0.8 to 1.0

                                    December 31, 1997 and              1.4 to 1.0
                                    thereafter
</TABLE>
         2.       MISCELLANEOUS.

                  (a) Recognizing and in consideration of the Bank's agreement
to the amendments herein set forth, the Borrowers hereby waive and release the
Bank and its officers, attorneys, agents, and employees from any liability,
suit, damage, claim, loss or expense of any kind or nature whatsoever and
howsoever arising out of or relating to the Bank's acts or omissions with
respect to the Revolving Credit Loans. The Borrowers further hereby agree to
indemnify and hold the Bank and its officers, attorneys, agents and employees
harmless from any loss, damage, judgment, liability or expense (including
counsel fees) suffered by or rendered against the Bank or any of them on account
of anything arising out of the Revolving Credit Note, the Credit Agreement, this
Agreement, the Loan Documents or any other document delivered pursuant thereto
up to and including the date hereof.

                  (b) All of the terms, conditions, provisions and covenants in
the Note, the Agreement, the Loan Documents, and all other documents delivered
to the Bank in connection with any of the foregoing documents and obligations
secured thereby shall remain unaltered and in full force and effect except as
modified by this Amendment.


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Amendment, including without limitation, the reasonable fees and expenses of the
Bank's counsel.

                  (d) This Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.

                  (e) Each and every one of the terms and provisions of this
Amendment shall be binding upon and shall inure to the benefit of the Borrowers
and the Bank and their respective successors and assigns.

                  (f) This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall constitute but one
and the same instrument.

                  (g) Apogee represents and warrants that all of its
subsidiaries are listed on the attached Schedule 6.1(c).

         3. PAYMENT OF FEES.

            Contemporaneously with the execution of this Amendment, Apogee shall
pay to the Bank (i) an amendment fee equal to $120,000 and (ii) at such time as
the first Loan, if any, under the Discretionary Advance Sublimit is made a fee
equal to $30,000. Such fee is not a commitment fee and is in consideration for
the Bank's underwriting and amendment to the Credit Agreement and the facilities
contemplated thereby and is not interest or a charge for the use of money.


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

                      APOGEE, INC., a Delaware corporation,

                      and each of the other BORROWERS

                      GUARANTORS listed on Schedule 6.1(c)

                      By:   /s/  Alan N. Vinick
                         -------------------------------------
                      [Name], Alan N. Vinick
                      the Senior Vice Pres. [Title] of
                      each BORROWERS and GUARANTORS listed on
                      Schedule 6.1(c).

                                     - and -

                      PNC BANK, NATIONAL ASSOCIATION

                      By:   /s/  Marcie D. Knittel
                         -------------------------------------
                      Name:      Marcie D. Knittel
                      Title:     Vice President