FLEET NATIONAL BANK

1998 Amended and Restated
Commercial Revolving Line of Credit Agreement


THIS 1998 AMENDED AND RESTATED  COMMERCIAL  REVOLVING  LINE OF CREDIT  AGREEMENT
("Agreement"),  dated as of September 30, 1998, between FLEET NATIONAL BANK (the
"Bank"),  having an office at 777 Main Street,  Hartford,  Connecticut 06115 and
SWISS ARMY BRANDS,  INC. (the "Borrower"),  having its chief executive office at
One Research Drive, Shelton, Connecticut 06484.

     This Agreement  constitutes  the amendment and  restatement of that certain
Amended and Restated Loan Agreement (the "Original Loan Agreement")  between the
Borrower (then known as The Forschner Group, Inc.) and the Lender (then known as
The Connecticut National Bank) dated as of June 18, 1992, as modified by a First
Modification to Amended and Restated Loan Agreement dated as of August 13, 1993,
a Second  Modification  to  Amended  and  Restated  Loan  Agreement  dated as of
February  17,  1994,  and a Third  Modification  to Amended  and  Restated  Loan
Agreement dated as of September 30, 1994.

         W I T N E S S E T H:

                             Section 1. Definitions

     Unless otherwise defined or specified herein, all accounting terms shall be
construed and all  accounting  determinations  shall be made in accordance  with
GAAP.

     Advance  means a Base Rate Advance or LIBOR Advance made by the Bank to the
Borrower pursuant to the Agreement.

     Affiliate  means any person or  corporation  which  directly or  indirectly
controls, or is controlled by, or is under common control with the Borrower.

     Agreement means this Commercial Revolving Line of Credit Agreement.

     Applicable  Interest  Period  means the  interest  period  selected  by the
Borrower pursuant to this Agreement.

     Base Rate Advance means an Advance that bears  interest at a rate per annum
equal to the Base Rate.

     Base Rate means the  variable per annum rate of interest so  designated  by
the Bank from time to time as its Base Rate.  The Base Rate is a reference  rate
and does not necessarily  represent the lowest or best rate being charged to any
customer.

     Borrowing  Date  means the date on which  the Bank  shall  make an  Advance
pursuant to the terms of this Agreement.

     Business  Day  means in  respect  of any  date  that is  specified  in this
Agreement  or the  Note to be  subject  to  adjustment  in  accordance  with the
Modified  Business  Day  Convention,  a day on  which  commercial  banks  settle
payments in (i) New York or London if the payment  obligation  is  calculated by
reference to LIBOR, or (ii) Connecticut, if the payment obligation is calculated
by reference to any Base Rate.

     Control shall be deemed to exist if any person,  entity or corporation,  or
combination thereof shall have possession,  directly or indirectly, of the power
to direct the management or policies of the Borrower or any person,  entity,  or
corporation  deemed to be an Affiliate of the  Borrower,  and shall be deemed to
include any holder of 10% or more of any stock or other interest in the Borrower
or in any  person,  entity  or  corporation  deemed  to be an  Affiliate  of the
Borrower, whether such holding is direct or indirect.

     Cost of Funds means the per annum rate of  interest  which Bank is required
to pay, or is offering to pay, for wholesale  liabilities,  adjusted for reserve
requirements and such other requirements as may be imposed by federal,  state or
local government and regulatory agencies, as determined by Fleet Treasury Group.

     Current  Ratio  means the ratio of Total  Current  Assets to Total  Current
Liabilities.

     Dividends  means, for the applicable  period,  the aggregate of all amounts
paid or payable  as  dividends,  with  respect  to  Borrower's  shares of stock,
whether now or hereafter outstanding.

     Earnings Before Interest and Taxes means, for the applicable period, income
from continuing  operations  before the payment of interest and taxes determined
in accordance with GAAP.

     Earnings Before Interest,  Taxes,  Depreciation and Amortization ("EBITDA")
means, for the applicable period,  income from continuing  operations before the
payment of interest and taxes plus  depreciation and amortization  determined in
accordance with GAAP.

     Events of Default  shall have the  meaning  given such term in Section 8 of
this Agreement.

     Eurocurrency  Liabilities  shall have the meaning  assigned to that term in
Regulation  D of the Board of  Governors of the Federal  Reserve  System,  as in
effect from time to time.

     Fixed Rate Advance means a LIBOR Advance or a Cost of Funds Advance.

     GAAP means generally accepted accounting principles in the United States of
America, as from time to time in effect; provided, however, that for purposes of
compliance  of Section 7 of this  Agreement  and the related  definitions,  GAAP
means such  principles as in effect on the date of the  preparation and delivery
of the financial  statements  described in Section 3.3 and Schedule A hereto and
consistently  followed,  without giving effect to any  subsequent  changes other
than changes consented to in writing by the Bank.

     Indebtedness  means all obligations  that in accordance with GAAP should be
classified as liabilities  upon  Borrower's  balance sheet or to which reference
should be made by footnotes thereto.

     Intangible  Assets means assets that in  accordance  with GAAP are properly
classifiable  as intangible  assets,  including,  but not limited to,  goodwill,
franchises, licenses, patents, trademarks, tradenames and copyrights.

     Interest means,  for the applicable  period,  all interest paid or payable,
including,  but not limited to, interest paid or payable on Indebtedness  and on
Capital Leases, determined in accordance with GAAP.

     Interest  Coverage  Ratio means the ratio of Earnings  Before  Interest and
Taxes to Interest.

     Interest Period means with respect to each LIBOR Advance:

     (i)  initially  the period (A)  commencing  on the  Borrowing  Date of such
Advance, and (B) ending at the end of the Applicable Interest Period one, two or
three months  thereafter,  as the case may be, as selected by the Borrower,  and
(ii)  thereafter,  such subsequent  Interest Period for such LIBOR Advance shall
begin on the last day of the  preceding  Interest  Period for such LIBOR Advance
and shall end at the end of the  Applicable  Interest  Period one,  two or three
months  thereafter  as the  Borrower  may  select  pursuant  to this  Agreement;
provided that (A) any Interest  Period which would  otherwise end on a day which
is not a Business Day shall end and the next Interest  Period shall  commence on
the next  preceding  or the next  succeeding  day  which  is a  Business  Day as
determined  conclusively  by the Bank in  accordance  with the then current bank
practices  in London,  England  and (B) no Interest  Period for a LIBOR  Advance
shall end after the Termination Date.

     LIBOR  Advance  means an Advance  that bears  interest  at a rate per annum
equal to the LIBOR Interest Rate.

     LIBOR shall mean, as applicable  to any LIBOR  Advance,  the rate per annum
(rounded upward, if necessary, to the nearest 1/32 of one percent) as determined
on the basis of the offered rates for deposits in U.S. dollars,  for a period of
time comparable to such LIBOR Advance which appears on the Telerate page 3750 as
of 11:00 a.m.  London time on the day that is two London  Banking Days preceding
the first day of such LIBOR Advance;  provided,  however,  if the rate described
above  does  not  appear  on the  Telerate  system  on any  applicable  interest
determination  date,  the  LIBOR  rate  shall be the rate  (rounded  upwards  as
described   above,   if  necessary)   for  deposits  in  dollars  for  a  period
substantially  equal to the  interest  period on the Reuters Page "LIBO" or such
other  page as may  replace  the LIBO Page on that  service  for the  purpose of
displaying such rates),  as of 11:00 a.m.  (London Time), on the day that is two
(2) London Banking Days prior to the beginning of such interest period. "Banking
Day" shall mean, in respect of any city, any date on which  commercial banks are
open for business in that city.

     If both the Telerate and Reuters system are unavailable,  then the rate for
that date will be  determined  on the basis of the offered rates for deposits in
U.S.  dollars for a period of time  comparable  to such LIBOR  Advance which are
offered by four  major  banks in the London  interbank  market at  approximately
11:00 a.m. London time, on the day that is two (2) London Banking Days preceding
the first day of such LIBOR Advance as selected by the  Calculation  agent.  The
principal London office of each of the four major London banks will be requested
to provide a quotation of its U.S.  dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the arithmetic mean
of the quotations.  If fewer than two quotations are provided as requested,  the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S.  dollars to leading  European  banks for a period of time  comparable to
such  LIBOR  Advance  offered by major  banks in New York City at  approximately
11:00 a.m.  New York City  time,  on the day that its two  London  Banking  Days
preceding the first day of such LIBOR Advance.  In the event that Bank is unable
to obtain any such  quotation  as provided  above,  it will be deemed that LIBOR
pursuant to LIBOR Advance cannot be determined.

     In the event that the Board of  Governors  of the  Federal  Reserve  System
shall impose a Reserve Rate with respect to LIBOR  deposits of Bank then for any
period  during which such Reserve Rate shall apply,  LIBOR shall be equal to the
amount determined above divided by an amount equal to 1 minus the Reserve Rate.

     LIBOR Margin means one and ten one hundredths (1.10%) percent per annum.

     LIBOR  Interest  Rate means an  interest  rate per annum equal at all times
during an Interest Period equal to the aggregate of (i) LIBOR and (ii) the LIBOR
Margin.

     Line of Credit means the maximum  principal amount set forth in Section 2.1
of this Agreement that the Bank may advance to the Borrower and the Borrower may
borrow from the Bank.

     Modified  Following  Business Day Convention  shall mean the convention for
adjusting  any relevant date if it would  otherwise  fall on a day that is not a
Business  Day. The  following  terms,  when used in  conjunction  with the term,
"Modified  Following  Business Day  Convention",  and a date, shall mean that an
adjustment will be made if that date would otherwise fall on a day that is not a
Business Day so that the date will be the first following day that is a Business
Day.

     Net Income  (Net Loss)  means the net income (or net loss,  expressed  as a
negative  number) for any period,  after all taxes  actually paid or accrued and
all expenses and other charges determined in accordance with GAAP.

     Note means the note executed and delivered by the Borrower in substantially
the form of Exhibit 1 hereto and which evidences the Line of Credit.

     Related  Agreements  means the various  agreements and documents  described
under the heading "Related  Agreements" in Schedule A to this Agreement and such
other  documents as requested by the Bank,  delivered or caused to be delivered,
by the Borrower to the Bank.

     Reserve  Rate means the rate  (expressed  as a  decimal)  at which the Bank
would be  required  to  maintain  reserves  under  Regulation  D of the Board of
Governors of the Federal Reserve System against Eurocurrency Liabilities if such
liabilities  were  outstanding.  The  LIBOR  Interest  Rate  shall  be  adjusted
automatically on and as of the effective date of any change in the Reserve Rate,
and the rate of interest thereby effected shall simultaneously change.

     Subsidiary means any  corporation,  a majority of whose  outstanding  stock
having ordinary  voting powers for the election of directors,  shall at any time
be owned or controlled by the Borrower or one or more of its subsidiaries.

     Stock Repurchase Advances shall have the meaning given such term in Section
5.12(b) of this Agreement.

     Stockholder  Equity means total stockholder equity determined in accordance
with GAAP.

     Tangible Net Worth means Stockholder Equity minus Intangible Assets.

     Termination  Date shall have the meaning  given such term in Section 2.1 of
this Agreement.

     Total Current  Assets means total current  assets  determined in accordance
with GAAP.

     Total Current  Liabilities means total current  Indebtedness  determined in
accordance with GAAP.

     Total  Liabilities means total  Indebtedness  determined in accordance with
GAAP.

     Working Capital means Total Current Assets less Total Current Liabilities.

                          Section 2. The Line of Credit

     2.1 The Line of Credit.  Pursuant to the terms of this  Agreement  and upon
the  satisfaction of the conditions  precedent  referred to in Section 4 hereof,
the  Bank  will  lend  to the  Borrower,  and  the  Borrower  may,  in its  sole
discretion, borrow from the Bank, advances not to exceed the aggregate principal
amount  to be  outstanding  at  any  time  of Ten  Million  and  No/100  DOLLARS
($10,000,000.00)  (the  "Line of  Credit")  as  evidenced  by the  Note.  If any
advances  are made during the period from the date hereof until June 29, 1999 as
adjusted by the Modified  Following Business Day Convention (as such date may be
extended  in  writing  from  time  to  time  in the  Bank's  sole  and  absolute
discretion,  the "Termination  Date"),  unless an Event of Default occurs and is
continuing,  the Borrower may borrow,  repay and reborrow under this  Agreement;
provided,  however,  that all  outstanding  principal  plus  accrued  and unpaid
interest shall be paid in full on the Termination Date.

     2.2  Advances.  (a) If any Advance is made,  the Advance shall be made by a
deposit to any of Borrower's accounts with the Bank. Advances will be payable as
provided in the Note. Prior to the Termination Date, all LIBOR Advances and Cost
of Funds Advances  shall be repaid in full at the end of the  Agreement.  In the
event the Borrower fails to provide notice of the type of Advance to be effected
by a new  borrowing,  Borrower  shall be  deemed  to have  elected  a Base  Rate
Advance.  If any Advance is made,  the Bank may,  at its  option,  record on the
books and records of the Bank or endorse on a schedule  attached to the Note, an
appropriate  notation  evidencing any Advance,  each repayment on account of the
principal  thereof and the amount of interest paid; and the Borrower  authorizes
the Bank to maintain  such  records or make such  notations  and agrees that the
amount shown on the books and records or on said  schedule,  as  applicable,  as
outstanding  from time to time shall  constitute  the  amount  owing to the Bank
pursuant to this Agreement, absent manifest error. In the event the amount shown
on the schedule conflicts with the amount noted as due pursuant to the books and
records  of the Bank,  the books  and  records  of the Bank  shall  control  the
disposition of the conflict.

     (b) Whenever  Borrower desires that the Bank make an Advance which is to be
a Base  Rate  Advance,  it shall  give  the Bank  notice  of such  request.  The
Borrowing Date relating to such Advance shall be a Business Day.

     (c) When Borrower  desires that Bank make an Advance which is to be a LIBOR
Advance  or a Cost of Funds  Advance,  it shall  give Bank not less than two (2)
Business  Days  notice of such  request.  The  Borrowing  Date  relating to such
Advance shall be a Business Day.

     (d) Each request for an Advance shall specify whether such Advance is to be
a Base Rate  Advance,  a LIBOR  Advance or a Cost of funds  Advance and, once so
specified,  such  specification may not be changed except with prior approval of
the Bank.  Each such request  shall  further  specify the Interest  Period to be
applicable to such Advance as follows:

(i)  for Base Rate Advances no Interest Period need be specified and

(ii) for LIBOR Advances, the Interest Period may be of a duration of one, two or
     three months; and

(iii)for Cost of Funds  Advances,  the  Interest  Period may be of a duration of
     from 7 to 30 days.

               2.2.A Letters of Credit; Reduction in Availability.
     (a) Within the limits set forth in 2.1 of this Agreement and subject to the
provisions of this Section 2.2.A,  the Borrower may, from time to time,  request
the Lender to issue  commercial  letters of credit and standby letters of credit
("L/Cs").  The aggregate outstanding available undrawn amount of all outstanding
Letters of Credit plus the aggregate  amount of Advances  outstanding  under the
Line of Credit shall not exceed $10,000,000.

     (b) The amount of  Advances  which  would  otherwise  be  available  to the
Borrower under the Line of Credit shall be reduced by the aggregate  outstanding
available undrawn amount of outstanding Letters of Credit.

     (c) A draw under a Letter of Credit  shall be deemed to be a request for an
Advance under the Line of Credit.

     (d) No Letters of Credit shall be issued with an expiration date later than
180 days after the Termination Date.

     (e) Borrower  shall execute any  additional  documentation  as the Bank may
request in connection with the issuance of Letters of Credit including,  without
limitation, reimbursement agreements.

     (f) The Bank's obligation to issue Letters of Credit is contingent upon the
payment by the Borrower of the applicable  fees from the Bank's then current fee
schedule for commercial  letters of credit, and a fee of 1.5% of the face amount
for standby letters of credit.

     2.3 Interest;  Principal.  LIBOR  Advances,  Base Rate Advances and Cost of
Funds  Advances  will bear interest at a per annum rate as provided in the Note.
Such interest shall be payable as specified in the Note. Principal shall also be
repaid in  accordance  with the terms of the Note.  Upon the  occurrence  of and
during  the  continuance  of an Event of  Default  or  after  maturity  or after
judgment  has been  rendered on this Note,  Borrower's  right to select  pricing
options shall, at the option of the Bank,  cease and the unpaid principal of all
advances shall, at the option of the Bank, bear interest at a rate which is four
(4)  percentage  points per annum  greater  than that which would  otherwise  be
applicable.

     All agreements  between Borrower and Bank are hereby  expressly  limited so
that in no contingency or event whatsoever, whether by reason of acceleration of
maturity of the  indebtedness  evidenced  hereby or otherwise,  shall the amount
paid  or  agreed  to be paid to  Bank  for  the  use or the  forbearance  of the
indebtedness  evidenced hereby exceed the maximum  permissible  under applicable
law. As used herein,  the term  "applicable law" shall mean the law in effect as
of the date hereof provided,  however that in the event there is a change in the
law which results in a higher permissible rate of interest, then this Note shall
be governed by such new law as of its  effective  date.  In this  regard,  it is
expressly  agreed that it is the intent of Borrower and Lender in the execution,
delivery and acceptance of this Note to contract in strict  compliance  with the
laws of the State of Connecticut from time to time in effect.  If, under or from
any circumstances  whatsoever,  fulfillment of any provision hereof, the Note or
of any of the Related  Agreements at the time of  performance  of such provision
shall be due, shall involve  transcending the limit of such validity  prescribed
by applicable  law, then the obligation to be fulfilled shall  automatically  be
reduced to the limits of such validity,  and if under or from any  circumstances
whatsoever Bank should ever receive as interest an amount which would exceed the
highest  lawful rate,  such amount which would be  excessive  interest  shall be
applied to the reduction of the principal  balance  evidenced  hereby and not to
the payment of interest.  This provision  shall control every other provision of
all agreements between Borrower and Bank.

     2.4 Computation of Interest. All computations of interest on the Note shall
be made on the basis of a three hundred sixty (360) day year and the actual days
elapsed.

     2.5 Payment of Principal and Interest. All payments shall be made in lawful
money  of the  United  States  in  immediately  available  funds.  The  Bank  is
authorized  (but not  required) to charge  principal  and interest and all other
amounts due hereunder and under the Note to any account of the Borrower when and
as it becomes due.

     2.6  Prepayments.  (a) The  Borrower may prepay Base Rate  Advances,  LIBOR
Advances or Cost of Funds Advances in accordance  with the terms of the Note. If
at any time, the aggregate principal amount of all Advances under the Note shall
exceed the Line of Credit,  the Borrower shall immediately prepay so much of the
outstanding principal balance,  together with accrued interest on the portion of
principal so prepaid as shall be  necessary  in order that the unpaid  principal
balance, after giving effect to such prepayments,  shall not be in excess of the
Line of Credit.  Any such prepayment will, at the option of the Bank, be applied
first to the payment of all costs and expenses  incurred by the Bank and arising
out of this Agreement,  the Note or any Related Agreement and which has not been
paid or  reimbursed  to the Bank,  then to accrued  interest  to the date of the
prepayment and the remainder to the outstanding principal.

     (b)  Notwithstanding  any other provision of this Agreement,  (i) if, after
the date of this  Agreement,  the  introduction  of or any  change in any law or
regulation (or change in the interpretation  thereof by regulatory  authorities)
applicable  to the Bank,  shall  make it, or (ii) if any  central  bank or other
governmental  authority having  jurisdiction  over the Bank shall assert that it
is,  unlawful  for the Bank to perform its  obligations  hereunder to make LIBOR
Advances to the  Borrower or to continue to fund or maintain  LIBOR  Advances to
the Borrower hereunder, then, on notice thereof by the Bank to the Borrower, (A)
the  obligation  of the  Bank to the  Borrower  to  make  LIBOR  Advances  shall
terminate,  and  (B) within  five (5) Business Days after the Bank gives notice,
the Borrower  shall  prepay in full all such LIBOR  Advances  then  outstanding,
which the Bank is  prohibited  from  maintaining  or  continuing,  together with
interest accrued thereon,  provided,  however, the Borrower may elect to convert
all outstanding LIBOR Advances to Base Rate Advances.

     (c) The  Borrower  may, at its option,  prepay any Base Rate  Advances,  in
whole or in part, at any time, without fee or premium.

     (d) If at any time (i) the interest  rate on the loan is a fixed rate,  and
(ii) Bank in its sole discretion should determine that current market conditions
can accommodate a prepayment request,  Borrower shall have the right at any time
and  from  time to time to  prepay  the loan in whole  (but  not in  part),  and
Borrower  shall pay to Bank a yield  maintenance  fee in an amount  computed  as
follows:  The current rate for United  States  Treasury  securities  (bills on a
discounted  basis shall be converted to a bond  equivalent) with a maturity date
closest  to the  maturity  date of the term  chosen  pursuant  to the Fixed Rate
Election as to which the prepayment is made,  shall be subtracted from the "cost
of funds"  component of the fixed rate in effect at the time of  prepayment.  If
the result is zero or a negative  number,  there  shall be no yield  maintenance
fee. If the result is a positive number, then the resulting  percentage shall be
multiplied by the amount of the principal  balance being prepaid.  The resulting
amount shall be divided by 360 and multiplied by the number of days remaining in
the term chosen  pursuant to the Fixed Rate Election as to which the  prepayment
is made.  Said amount shall be reduced to present value  calculated by using the
above-referenced  United  States  Treasury  security rate and the number of days
remaining in the term chosen pursuant to the Fixed Rate Election as to which the
prepayment is made. The resulting amount shall be the yield  maintenance fee due
to Bank upon prepayment of the fixed rate loan. Each reference in this paragraph
to "Fixed  Rate  Election"  shall mean the  election  by  Borrower  pursuant  to
paragraph 2.2 of this Loan Agreement and the Note.

     If by reason of the occurrence and  continuance of an Event of Default Bank
elects to declare the loan to be  immediately  due and  payable,  then any yield
maintenance  fee with  respect to the loan shall  become due and  payable in the
same manner as though Borrower had exercised such right of prepayment

     2.7 Review Fee. Intentionally Omitted.

     2.8 Late  Charge.  If the  entire  amount of any  required  installment  of
principal  and/or  interest  is not paid in full  within ten (10) days after the
same is due,  Borrower  shall,  at the discretion of the Bank, pay to the Bank a
late fee equal to five percent (5%) of the  required  payment.  The minimum late
charge shall be $25.00.  The assessment and collection of a late fee by the Bank
shall not waive any Event of  Default  or  preclude  the  exercise  of the other
rights and remedies available to the Bank hereunder.

     2.9  Additional  Payments.  (a) If the Bank shall deem  applicable  to this
Agreement  or the Note  (including,  in each case,  any  borrowed and any unused
portion  thereof),  any  requirement of any law of the United States of America,
any regulation,  order, interpretation,  ruling, official directive or guideline
(whether  or not  having  the  force of law) of the  Board of  Governors  of the
Federal  Reserve System,  the  Comptroller of the Currency,  the Federal Deposit
Insurance  Corporation  or any other  board or  governmental  or  administrative
agency of the United States of America which shall impose,  increase,  modify or
make  applicable  to this  Agreement or the Note or cause this  Agreement or the
Note to be included in any reserve,  special  deposit,  calculation  used in the
computation of regulatory  capital  standards,  assessment or other  requirement
which  imposes  on the Bank any cost  that is  attributable  to the  maintenance
thereof, then, and in each such event, the Borrower shall promptly pay the Bank,
upon its  demand,  such  amount as will  compensate  the Bank for any such cost,
which  determination may be based upon the Bank's  reasonable  allocation of the
aggregate of such costs  resulting from such events.  In the event any such cost
is a continuing cost, a fee payable to the Bank may be imposed upon the Borrower
periodically  for so long as any such cost is deemed  applicable by the Bank, in
an amount  determined by the Bank to be necessary to compensate the Bank for any
such  cost,  which  determination  may  be  based  upon  the  Bank's  reasonable
allocation  of the  aggregate  of such costs  resulting  from such  events.  The
determination  by the Bank of the  existence and amount of any such costs shall,
in the absence of manifest error, be conclusive.

     (b) In the event the Bank shall determine that, by reason of  circumstances
affecting  the London  inter-bank  Eurodollar  market,  adequate and  reasonable
methods  do not exist for  ascertaining  the LIBOR  Interest  Rate  which  would
otherwise be applicable  during any Interest  Period,  the Bank shall  forthwith
give notice of such determination  (which shall be conclusive and binding on the
Borrower) to the Borrower at least one Business Day before the first day of such
Interest  Period.  In such event:  (i) any  pending  notice of  borrowing  which
specified a LIBOR Advance shall be of no effect;  and (ii) the obligation of the
Bank to make the LIBOR Advance shall be suspended until the Bank determines that
the circumstances giving rise to such suspension no longer exist,  whereupon the
Bank shall notify the Borrower.

     (c) If,  after the date of this  Agreement,  there shall be any increase in
the cost to the Bank due to either (i) the  introduction of or any change in any
law or regulation (or the interpretation  thereof by regulatory  authorities) or
(ii) compliance  with any written  guideline or written request from any central
bank or other governmental  authority having  jurisdiction over Bank (whether or
not such  guideline  or request  has the force of law),  of  agreeing to make or
making, funding or maintaining LIBOR Advances to the Borrower, then the Borrower
shall,  from  time to  time,  upon  such  notice  by the  Bank,  pay to the Bank
additional amounts sufficient to reimburse the Bank for such increased cost.


                    Section 3. Representations and Warranties

     The   Borrower   hereby   represents   and  warrants  to  the  Bank  (which
representations  and  warranties  will survive the delivery of the Note and this
Agreement  and the making of any Advances  and shall be deemed to be  continuing
until the Note is fully paid and this Agreement is terminated) that:

     3.1  Existence and Power.  (a) The Borrower is a  corporation  which is and
will  continue to be, duly  organized and validly  existing;  the Borrower is in
good standing under the laws of its state of  organization;  (b) the Borrower is
qualified  and in good  standing to do business  in all other  jurisdictions  in
which the property owned, leased or operated by it or the nature of the business
conducted  by it makes such  qualification  necessary;  (c) the Borrower has the
power to execute and deliver this  Agreement,  the Note, the Related  Agreements
and to borrow  hereunder,  and (d) the Borrower has all permits,  authorizations
and licenses,  without unusual restrictions or limitations,  to own, operate and
lease its  properties  and to  conduct  the  business  in which it is  presently
engaged, all of which are in full force and effect.

     3.2 Authority. The making and performance by the Borrower of this Agreement
and the Related  Agreements  have been authorized by all necessary  action.  The
execution and delivery of this Agreement,  the Note and the Related  Agreements,
the  consummation  of the  transactions  herein and  therein  contemplated,  the
fulfillment of or compliance  with the terms and provisions  hereof and thereof,
(a) are within its powers,  (b) will not violate any provision of law or, of its
certificate of incorporation or by-laws or (c) will not result in the breach of,
or constitute a default under, or result in the creation of any lien,  charge or
encumbrance  upon  any  property  or  assets  of the  Borrower  pursuant  to any
indenture  or  bank  loan or  credit  agreement  (other  than  pursuant  to this
Agreement) or other agreement or instrument to which the Borrower is a party. No
approval,  authorization,  consent or other order of or  registration  or filing
with any  governmental  body is  required  in  connection  with the  making  and
performance of this Agreement, the Note or the Related Agreements.

     3.3 Financial  Condition.  The financial statements described in Schedule A
hereto  under the heading  "Description  of  Financial  Statements,"  heretofore
delivered to the Bank, were prepared in conformity with GAAP and are correct and
complete  and  fairly  present  the  financial  condition  and  the  results  of
operations of the Borrower for the period(s) and as of the date(s)  thereof with
the  exception  of  all  interim  statements.  The  Borrower  has no  direct  or
contingent  liabilities not disclosed in such statements or in Schedule A hereto
under the heading "Liabilities Not Disclosed in Financial Statements." Since the
date of the latest financial  statement delivered to the Bank, there has been no
adverse change in the assets,  liabilities,  financial  condition or business of
the Borrower and, except as disclosed to the Bank in writing,  no Dividends have
been declared or made to shareholders.

     3.4 Information  Complete.  Subject to any limitations stated therein or in
connection  therewith,  all  information  furnished  or to be  furnished  by the
Borrower  pursuant  to the terms  hereof  is, or will be at the time the same is
furnished,  accurate and complete in all respects necessary in order to make the
information  furnished,  in the  light of the  circumstances  under  which  such
information is furnished, not misleading.

     3.5 Statutory  Compliance.  The Borrower is in compliance with all federal,
state, county and municipal laws, ordinances, rules or regulations applicable to
it, its property or the conduct of its business,  including, without limitation,
those  pertaining to or concerning the employment of labor,  employee  benefits,
public health, safety and the environment.

     3.6  Litigation.  No  proceedings  by or  before  any  private,  public  or
governmental body, agency or authority and no litigation is pending,  or, so far
as is known to the Borrower  or, a any of its  officers,  threatened  against it
except such as are disclosed in Schedule A hereto under the heading "Litigations
Pending or Threatened."

     3.7  Subsidiaries,   Affiliates.   The  Borrower  has  no  Subsidiaries  or
Affiliates  other than those  shown on  Schedule  A  attached  hereto  under the
heading  "Subsidiaries,  Affiliates  and Trade  Names" and the  Borrower has not
invested in the stock,  common or preferred,  of any other corporation and there
are no fixed,  contingent  or other  obligations  on the part of the Borrower to
issue any additional shares of its capital stock

     3.8 Events of Default.  No Event of Default has  occurred  and no event has
occurred or is continuing  which,  pursuant to the provisions of Section 8, with
the  lapse of time  and/or  the  giving  of a notice  specified  therein,  would
constitute such an Event of Default.

     3.9 Validity. This Agreement, the Note and all Related Agreements, upon the
execution and delivery thereof,  will be legal,  valid,  binding and enforceable
obligations  of the Borrower or the person  executing  the same, as the case may
be, in accordance with the terms of each.

     3.10 Title to Property.  The Borrower has good and marketable  title to its
properties and assets subject to no mortgage,  pledge,  lien, security interest,
encumbrance  or other  charge not set forth in (a)  Schedule A hereto  under the
heading  "Encumbrances  Not Otherwise  Disclosed" or (b) Section 6.1 hereinafter
stated.

     3.11 Taxes.  The Borrower has filed all tax returns and reports required to
be filed by it with all federal, state or local authorities and has paid in full
or made adequate  provision for the payment of all taxes,  interest,  penalties,
assessments  or  deficiencies  shown  to be  due or  claimed  to be due on or in
respect of such tax returns and reports.

     3.12 Business Name and Locations. The Borrower conducts its business solely
in its  own  name  without  the use of a trade  name or the  intervention  of or
through  any other  entity of any kind,  other than as  disclosed  on Schedule A
under the  heading  "Subsidiaries,  Affiliates  and Trade  Names." All books and
records  relating  to  Borrower's  assets are  located at the  Borrower's  chief
executive  office as set forth above and its other places and  locations,  where
its assets are located,  are as set forth on Schedule A hereto under the heading
"Places of Business."

     3.13 Notices of Environmental  Problems.  The Borrower and any tenants have
not given nor have they received, any notice that: (a) there has been a release,
or there is a threat of release,  of toxic  substances or hazardous  wastes from
any real  property  owned or operated by the  Borrower,  (b) the Borrower or any
tenants  may be or is liable for the costs of  cleaning  up or  responding  to a
release of any toxic  substances  or hazardous  wastes;  or (c) any of such real
property is subject to a lien for any liability  arising from costs  incurred in
response to a release of toxic substances or hazardous wastes.


                         Section 4. Conditions Precedent

     4.1 The initial  Advance  under the Line of Credit  shall be subject to the
following conditions precedent:

     (a)  Approval  of  Bank  Counsel.   All  legal  matters   incident  to  the
transactions hereby contemplated shall be reasonably satisfactory to counsel for
the Bank.

     (b) Proof of Action. The Bank shall have received such documents evidencing
the  Borrower's  power to execute and deliver this  Agreement,  the Note and the
Related Agreements as the Bank or its counsel shall reasonably request.

     (c) The Note,  Related  Agreements and  Documents.  The Borrower shall have
delivered to the Bank the Note,  this  Agreement and the Related  Agreements and
such other documents as the Bank may reasonably request.

     4.2  Every  Advance  under  the  Line of  Credit  shall be  subject  to the
following conditions precedent that:

     (a) No Event of Default. No Event of Default has occurred and is continuing
and no event has occurred or is continuing which,  pursuant to the provisions of
Section 8, with the lapse of time  and/or  the  giving of a notice as  specified
therein, would constitute an Event of Default.

     (b) No Material  Adverse Change.  There has been no material adverse change
in the assets,  liabilities,  financial condition or business of the borrower or
any Guarantor since the date of any financial  statements  delivered to the Bank
before or after the date of this Agreement.

     (c) Representations and Warranties. That the representations and warranties
contained  in  Sections  3.1  through  3.14 are true and  correct,  and that the
Borrower shall have so certified to the Bank. Any request for a borrowing  shall
be deemed a  certification  by the  Borrower as to the truth and accuracy of the
representations and warranties  contained in Sections 3.1 through 3.14 as of the
date of such request.


                        Section 5. Affirmative Covenants

     The Borrower  covenants  and agrees that from the date hereof until payment
in full of the Note, the performance of all Borrower's obligations hereunder and
under any Related  Agreement is complete and the  termination of this Agreement,
unless the Bank otherwise consents in writing, the Borrower shall:

     5.1 Financial Statements;  Notice of Default. Deliver to the Bank (a)within
forty-five  (45) days after close of each of the quarters of each fiscal year of
the Borrower,  consolidated  financial  statements that are internally prepared,
consisting of a balance sheet and statement of income and retained  earnings for
that portion of the fiscal year to date then ended,  which  statements  shall be
prepared in accordance with GAAP  consistently  applied;  (b) within ninety (90)
days after the close of each fiscal year of the Borrower, consolidated financial
statements including a balance sheet as of the close of such year and statements
of income and retained earnings and cash flows for the year then ended, prepared
in conformity  with GAAP and audited by a firm of independent  certified  public
accountants  selected by the Borrower  and  acceptable  to the Bank;  (c) within
ninety (90) days after the close of each fiscal year,  a copy of the  Borrowers'
form 10k as filed with the Securities and Exchange  Commission together with all
schedules,  exhibits  and  attachments  thereto;  (d)  promptly  upon the Bank's
written request, such other information about the financial condition,  business
and operations of the Borrower, or any Guarantor (if any), as the Bank may, from
time to time,  reasonably  request;  and (e) promptly upon becoming aware of any
occurrence  but for the  giving of notice or the  passage  of time  which  would
constitute an Event of Default, notice thereof in writing. Together with any and
all  financial  statements  to be delivered to the Bank pursuant to Section 5.1,
the Borrower  shall submit a certificate of compliance by the president or chief
financial officer of the Borrower, certifying that the Borrower is in compliance
with all affirmative and negative covenants of this Agreement.

     The Borrower shall also deliver to the Bank, promptly upon receipt thereof,
any  management  audit  letter  issued to the  Borrower by its firm of certified
public accountants.

     5.2  Insurance.  (a) Keep its  properties  insured  against  fire and other
hazards (so called "All Risk" coverage) in amounts and with companies reasonably
satisfactory  to the Bank to the  same  extent  and  covering  such  risks as is
customary  in the same or a similar  business,  (b)  maintain  public  liability
coverage  against  claims for personal  injuries or death,  and (c) maintain all
worker's  compensation,  employment  or similar  insurance as may be required by
applicable  law. Such All Risk property  insurance  coverage shall provide for a
minimum of thirty (30) days' written  cancellation  notice to the Bank. Borrower
agrees to deliver certificates of insurance to the Bank upon request.

     5.3 Compliance with Laws;  Payment of Taxes and Other Liens.  Comply in all
respects with all federal,  state, county and municipal laws, rules,  ordinances
and  regulations  applicable  to  Borrower,  Borrower's  business  or  property,
including without  limitation,  those pertaining to or concerning the employment
of labor,  employee  benefits,  public health,  safety and the environment.  The
Borrower shall pay all taxes,  assessments,  governmental  charges or levies, or
claims for labor, supplies,  rent and other obligations made against Borrower or
Borrower's property which, if unpaid,  might become a lien or charge against the
Borrower or Borrower's  property,  except  liabilities  being  contested in good
faith and against  which,  if requested by the Bank, the Borrower shall maintain
reasonable reserves.

     5.4 Chief Executive Office and Places of Business. Keep its chief executive
office,  principal  places of business and  locations of assets at the locations
set forth in this Agreement and maintain its principal  places of business,  its
chief  executive  office and  locations of assets at said  locations  or, in the
event that the Borrower changes any of such locations or adds any new locations,
Borrower  shall  promptly give Bank written  notice of any change in any of such
addresses or such new locations. All business records of the Borrower, including
those pertaining to all accounts and contract rights,  shall be kept at the said
chief  executive  office of the Borrower unless prior written notice is given to
the Bank with respect to a change of location.

     5.5 Inspection.  Allow the Bank by or through any of its officers,  agents,
attorneys,  or  accountants  designated  by it, for the purpose of  ascertaining
whether or not the provisions hereof and of any Related Agreement, instrument or
document is being  performed  and for the purpose of examining the assets of the
Borrower and the records relating thereto,  to enter the offices,  and plants of
the Borrower to examine or inspect any of the  properties,  books and records or
extracts  therefrom  and to discuss the affairs,  finances and accounts  thereof
with the Borrower with prior  notification  and consent;  such consent not to be
unreasonably  withheld,  all at  reasonable  times  and as often as the Bank may
reasonably request.

     5.6 Litigation. Promptly advise the Bank of the commencement of litigation,
including  arbitration  proceedings and any proceedings  before any governmental
agency, which might have a material adverse effect upon the assets, liabilities,
financial condition or business of the Borrower, or where the amount involved is
$100,000.00 or more.

     5.7 Notices of Environmental and Labor Actions and Claims.  Promptly notify
the Bank in writing of (a) any  enforcement,  clean-up,  removal or other action
instituted  by any  federal,  state,  county or  municipal  authority  or agency
pursuant to any public health,  safety or environmental laws, rules,  ordinances
and regulations, (b) any and all claims made by any third party against Borrower
or any real property  owned or operated by either  relating to the existence of,
or damage,  loss or injury from any toxic  substances or hazardous wastes or any
other  conditions  constituting  actual or  potential  violations  of such laws,
rules,  ordinances or regulations and (c) any enforcement or compliance  action,
instituted  or claim made by any  federal  or state  authority  relating  to the
employment of labor or employee benefits.

     5.8 Maintenance of Existence. Continue to conduct its business as presently
conducted,  maintain its existence  and maintain its  properties in good repair,
working order and operating  condition.  The Borrower shall promptly  notify the
Bank of any event causing material loss or unusual  depreciation in the value of
its business assets and the amount of same.

     5.9  Performance.  Comply with all terms and conditions of this  Agreement,
the Related Agreements and the Note and pay all debts of the Borrower before the
same shall become delinquent.

     5.10 Covenant to Secure  Equally and Ratably.  Secure the Note or cause the
Note to be secured equally and ratably with any and all Indebtedness  secured by
any lien or  encumbrance  created  after the date hereof by the  Borrower or any
Subsidiary  upon any of its  property  or  assets,  whether  owned or  hereafter
acquired,  other than liens or  encumbrances  permitted  pursuant to Section 6.1
hereof.

     5.11  Deposits.  Maintain  the Bank as its  principal  bank of deposit  and
account.

     5.12 Use of Proceeds.  The Borrower  shall use the proceeds of each Advance
for: (a) general  commercial  purposes,  provided  that no part of such proceeds
will be used, in whole or in part, for the purpose of (i) purchasing or carrying
any  "margin  stock" as such term is  defined  in  Regulation  U of the Board of
Governors of the Federal Reserve System, or (ii) acquiring  all or substantially
all of the assets or stock of, or otherwise  investing  in, any person,  firm or
corporation; or (b) the repurchase of Borrower's capital stock, provided that no
more than $2,500,000, in the aggregate, of Advances may be used for this purpose
from the date hereof through the  Termination  Date,  however,  upon the written
consent of the Bank,  in its sole and absolute  discretion,  the Borrower may be
permitted to use up to an additional  $2,500,000 of Advances for the  repurchase
of Borrower's capital stock through the Termination Date  (collectively,  "Stock
Repurchase Advances").

     5.13  Victorinox  Contract.  The Borrower  shall maintain in full force and
effect the exclusive  distribution  agreement with Victorinox  Cutlery  Company,
dated  December  12,  1983,  as  amended  and  modified  from  time to time (the
"Victorinox  Cutlery  Contract").  The  Borrower  will not  modify  or amend the
Victorinox  Cutlery  Contract  so as to  disturb  its  status  as the  exclusive
distributor thereunder without the prior express written consent of the Bank.

                          Section 6. Negative Covenants

     The Borrower covenants and agrees that until payment is made in full of the
Note,  the  performance of all  Borrower's  obligations  hereunder and under any
Related Agreement is complete and the termination of this Agreement,  unless the
Bank  otherwise  consents in writing  which  consent  shall not be  unreasonably
withheld, the Borrower shall not:

     6.1  Encumbrances.  Incur or permit to exist any lien,  mortgage,  security
interest,  pledge,  charge or other  encumbrance  against any of its property or
assets (including, without limitation, the Victorinox Cutlery Contract), whether
now owned or hereafter  acquired  (including,  without  limitation,  any lien or
encumbrance  relating  to  any  response,  removal  or  clean-up  of  any  toxic
substances or hazardous  wastes),  except: (a) pledges or deposits in connection
with or to secure workers'  compensation  and  unemployment  insurance;  (b) tax
liens which are being contested in good faith and in compliance with Section 5.3
hereof;  (c)liens,  mortgages,  security  interests,  pledges,  charges or other
encumbrances in favor of the Bank or specifically  permitted, in writing, by the
Bank;  and (d) purchase money  security  interests  provided such purchase money
security  interest does not attach to any property other than the property being
acquired  with the proceeds of purchase  money  security  interest  indebtedness
permitted under Section 6.2 hereof.

     6.2  Limitation  on  Indebtedness.  Create  or incur any  Indebtedness  for
borrowed money,  become liable,  either actually or contingently,  in respect of
letters of credit or banker's  acceptances  or issue or sell any  obligations of
the Borrower,  excluding,  however, from the operation of this covenant: (a) the
Line of Credit hereunder and all other Indebtedness of the Borrower to the Bank;
(b) Indebtedness subordinated in payment and priority to all Indebtedness of the
Borrower  to  the  Bank  in  writing  and  in  form  and  substance   reasonably
satisfactory  to the Bank;  (c) trade debt  incurred in the  ordinary  course of
business;  (d) Indebtedness  secured  by a  purchase  money  security  interest,
provided such  Indebtedness does not exceed the lesser of (i) the purchase price
or  (ii) the  value  of  the  property   acquired  with  the  proceeds  thereof;
(e) obligations  in  connection  with  performance  bonds which the  Borrower is
required to provide in the ordinary course of its business; and (f) Indebtedness
to  financial  institutions  under or  pursuant  to  foreign  currency  exchange
facilities.

     6.3  Disposition of Assets.  Without prior notice to the Bank sell,  lease,
pledge,  transfer or otherwise  dispose of all or any of its assets  whether now
owned or  hereafter  acquired  except  for  liens or  encumbrances  required  or
permitted hereby or by any Related  Agreement,  except (a) sales of inventory in
the ordinary course of business; (b) sales of machinery, equipment and inventory
which  has  become  obsolete  and is no  longer  used or  useful;  (c)  sales of
machinery or equipment in the ordinary  course of business if such machinery and
equipment is replaced  with other similar  equipment or machinery;  (d) sales of
any assets not  described in (a), (b), or (c) above,  having an aggregate  value
not in the excess of $50,000 in any year calculated on a consolidated basis; and
(e) a lien on the  currency  or  contracts  which are the subject of any foreign
exchange transaction.

     6.4 Contingent Liabilities.  Without prior notice to the Bank (Bank consent
not required)  assume,  guarantee,  endorse or otherwise  become liable upon the
obligations  of any person,  firm or  corporation  except by the  endorsement of
negotiable  instruments for deposit or collection or similar transactions in the
ordinary course of business.

     6.5  Consolidation or Merger.  Merge or consolidate with, or acquire all or
substantially all of the assets of, or make any investment in the securities of,
any other  person,  firm,  corporation,  or other  entity,  except  that (a) the
Borrower may merge or consolidate with one or more of its Subsidiaries, provided
that the Borrower is the surviving  corporation,  or, if it is not the surviving
corporation, the surviving corporation assumes all of the Borrower's liabilities
hereunder  and under the Note and the  Security  Agreement;  (b) the  Borrower's
Subsidiaries  may merge or consolidate with one another so long as the surviving
corporation is a Guarantor  hereunder;  and (c) Borrower may issue shares of its
stock,  without dollar limitation,  and Borrower may expend up to $15,000,000 in
cash or cash equivalents,  in the aggregate,  during the term of this Agreement,
as modified,  to merge with or acquire all or any portion of the securities,  or
all or any portion of the assets,  of any person,  firm,  corporation,  or other
entity, provided that following such merger,  securities  acquisition,  or asset
acquisition,  there  exists  no  Event  of  Default  hereunder  or any  event or
condition which, with the passage of time or the giving of notice or both, would
constitute an Event of Default hereunder.

     The acquisition by the Borrower of all or substantially  all of the assets,
together with the assumption of all or substantially  all of the obligations and
liabilities,  of any corporation  shall be deemed to be a consolidation  of such
corporation with the Borrower.

     6.6 Loans, Advances, Investments. Subject to Sections 5.12 and 6.14 of this
Agreement,  purchase or otherwise acquire any shares of stock or obligations of,
or make loans or advances to, or investments in, any individual, firm, entity or
corporation through Advances under this Line of Credit.

     6.7 Dividends.  Declare or pay dividends or make any  distributions  of its
property  or  assets  upon  any of its  stock or make any  loans,  advances,  or
extension of credit to any of its  stockholders  unless no Event of Default,  or
any event or condition  which with the passage of time,  the giving of notice or
both would constitute an Event of Default,  is existing hereunder at the time of
or   immediately   following  such   transaction;   provided,   however,   that,
notwithstanding  this Section:  (1) any Subsidiaries of the Borrower may declare
or pay dividends or make distributions of its property or assets upon any of its
stock to the  Borrower or make loans,  advances or  extensions  of credit to the
Borrower,  (2) the Borrower or any  Subsidiary may extend credit to any customer
of the Borrower or such  Subsidiary who is also a stockholder of the Borrower or
such Subsidiary, provided such extension of credit meets the standards set forth
in Section 6.8 below;  and (3) the Borrower and any Subsidiary may make loans or
advances to any other person or entity,  provided that the  aggregate  amount of
all such loans or advances outstanding at any time does not exceed $150,000.

     6.8  Transactions  with  Subsidiaries  and Affiliates.  Enter into, or be a
party to, any transaction with any Subsidiary or Affiliate  (including,  without
limitation,  transactions involving the purchase,  sale or exchange of property,
the rendering of services or the sale of stock) except in the ordinary course of
business  pursuant to the reasonable  requirements of the Borrower and upon fair
and  reasonable  terms no less  favorable to the Borrower  than  Borrower  would
obtain in a  comparable  arm's-length  transaction  with a person  other  than a
Subsidiary or an Affiliate.

     6.9 Change of Name or Location. Without prior notice to the Bank change its
name or conduct its business  under any trade name or style other than as herein
above set forth or change its chief executive  office,  or if the Borrower is an
individual with no place of business,  its residence,  places of business or the
present  locations  of  its  assets  or  records  relating  thereto  from  those
address(es) herein above set forth.

     6.10 Subsidiaries,  Affiliates.  Without prior notice to the Bank (acquire,
form or dispose of any  Subsidiary or Affiliate or acquire all or  substantially
all or any  portion  of the  stock  or  assets  of any  other  person,  firm  or
corporation.

     6.11 Management, Capital Structure,  Accounting Methods. Make or consent to
a change in the ownership or capital structure of the Borrower, or make a change
in the  management of the Borrower or in the manner in which the business of the
Borrower is conducted or in its method of accounting.

     6.12 Use of  Property.  Allow any  business or activity to be  conducted on
real  property  owned or  occupied  by the  Borrower  that uses,  manufacturers,
treats, stores or disposes of any toxic substances or hazardous wastes which are
prohibited or regulated under any public health,  safety or  environmental  law,
rule,  ordinance or  regulation  or contrary to the  provisions of any insurance
policy.

     6.13 Grant of Negative Pledge.  Enter into any agreement with any person or
entity  (other  than the Bank) in which  the  Borrower  agrees  not to create or
suffer to exist any liens or  encumbrances  of any kind on any  property  of the
Borrower, except that the Borrower may enter into such an agreement with respect
to assets which are subject to liens permitted under Section 6.1.

     6.14 Acquisition of Stock of Borrower. Purchase, acquire, redeem or retire,
or make any commitment to purchase, acquire, redeem or retire any of the capital
stock of the  Borrower,  whether now or hereafter  outstanding,  except:  (a) as
permitted  pursuant to Section 5.12 of this  Agreement;  and (b) the  acquiring,
redeeming or  repurchasing  of up to 400,000  shares of the capital stock of the
Borrower ("Permitted Stock Repurchases").

     6.15 Transactions with Victorinox  Cutlery Company.  Make any distributions
of its assets or any  loans,  advances  or  extensions  of credit to  Victorinox
Cutlery Company, except in the ordinary course of business as reasonable payment
for goods or services actually received.

                         Section 7. Financial Covenants

     The Borrower covenants and agrees that until payment is made in full of the
Note, the performance of Borrower's  obligations hereunder and under any Related
Agreement is complete and the  termination  of this  Agreement,  unless the Bank
otherwise consents in writing:

     7.1  Calculation of Financial  Covenants.  The calculation of the financial
covenants set forth in this Section 7 shall be measured  against the  Borrower's
financial  statements  required to be delivered to the Bank  pursuant to Section
3.1 of this Agreement on a Consolidated basis.

     All financial covenants set forth below are to be tested quarterly.

     7.2 Intentionally Omitted.

     7.3 Current  Ratio.  Borrower shall not permit its Current Ratio to be less
than 2.5 to 1.0.

     7.4 Intentionally Omitted.

     7.5 Tangible Net Worth:  Borrower  shall not permit the sum of Tangible Net
Worth plus the lesser of (i) the aggregate  amount expended in making  Permitted
Stock  Repurchases  or  (ii)  $5,000,000,  to be  less  than  $71,500,000  as of
September 30, 1998,  and not less than  $72,500,000  as of December 31, 1998 and
thereafter.

     7.6 Intentionally Omitted.

     7.7 Total  Liabilities  to Tangible  Net Worth  Ratio.  Borrower  shall not
permit its ratio of Total  Liabilities to the sum of Tangible Net Worth plus the
lesser of (i) the aggregate amount expended in making Permitted Stock Repurchase
Repurchases or (ii) $5,000,000, to be less than .75 to 1.0.

     7.8 - 7.9 Intentionally Omitted.

     7.10  Interest  Coverage  Ratio:  Borrower  shall not permit  the  Interest
Coverage Ratio to be less than 1.5 to 1.0.

                          Section 8. Events of Default

     If any one or more of the following  "Events of Default" shall occur and be
continuing:

     8.1 Failure to make due  payment of the  principal  of the Note,  or in the
payment of interest on the Note or in the payment of any other  liability  owing
by the  Borrower  to the Bank  within 10 days of the due date,  now  existing or
hereinafter incurred, whether direct or contingent; or

     8.2 Failure by the Borrower to observe or perform any covenant contained in
Sections 5,  6 or 7 hereof,  or failure by the  Borrower  to perform  any of its
obligations under any Related Agreement; or

     8.3 Failure by the Borrower to perform any act,  duty,  obligation or other
agreement  contained  herein and not otherwise  constituting an Event of Default
hereunder which shall occur and continue without correction for thirty (30) days
following the Bank giving the Borrower notice thereof; or

     8.4 Any  representation  or warranty made by the Borrower  herein or in any
Related Agreement, or any statement,  certificate or other data furnished by the
Borrower in connection  herewith or with any Related  Agreement,  proves to have
been incorrect when made in any material respect; or

     8.5 A judgment  or  judgments  for the  payment of money  shall be rendered
against the Borrower,  and any such  judgment  shall remain  unsatisfied  and in
effect  for any  period  of  thirty  (30)  consecutive  days  without  a stay of
execution; or

     8.6 Any levy,  seizure,  attachment,  execution or similar process shall be
issued or levied on any of the  Borrower's  property in excess of  $100,000  and
Borrower shall not in good faith be contesting such situation; or

     8.7 The  Borrower  shall (a) apply for or consent to the  appointment  of a
receiver, conservator, trustee or liquidator of all or a substantial part of any
of its assets; (b) be unable, or admit in writing its inability to pay its debts
as  they  mature;  (c)  file  or  permit  the  filing  of  any  petition,  case,
arrangement, reorganization, or the like under any insolvency or bankruptcy law,
or the adjudication of it as a bankrupt,  or the making of an assignment for the
benefit  of  creditors  or the  consenting  to any form of  arrangement  for the
satisfaction  settlement or delay of debt or the  appointment  of a receiver for
all or any part of its  properties;  or (d) take any action  for the  purpose of
effecting any of the foregoing; or

     8.8 An order,  judgment  or decree  shall be  entered,  or a case  shall be
commenced, against the Borrower, without the application, approval or consent of
the Borrower by or in any court of competent jurisdiction,  approving a petition
or permitting the commencement of a case seeking  reorganization  or liquidation
of the Borrower or appointing a receiver, trustee,  conservator or liquidator of
the Borrower or of all or a substantial part of its assets and Borrower,  by any
act, indicates its approval thereof,  consent thereto, or acquiescence  therein,
or such order,  judgment,  decree or case shall continue  unstayed and in effect
for any period of one hundred twenty (120) consecutive days; or

     8.9  The  Borrower  shall  dissolve  or  liquidate,   or  be  dissolved  or
liquidated, or cease to legally exist; or

     8.10 Intentionally Omitted; or

     8.11 failure by the Borrower to pay any other  Indebtedness in an amount in
excess  of  $100,000,   whether  contingent  or  otherwise  and  if  such  other
Indebtedness shall be accelerated;  unless such other Indebtedness is subject to
a bona fide dispute and the Borrower  maintains on its books an adequate reserve
with respect to such Indebtedness; or

     8.12 Any  material  adverse  change in the assets,  liabilities,  financial
condition  or  business  of the  Borrower  has  occurred  since  the date of any
financial  statements  delivered  to the Bank  before  or after the date of this
Agreement  which  condition  shall  remain in effect for thirty  (30) days after
notice and an opportunity to cure;

     then,  and in such  event,  the  Bank  may  declare  the  then  outstanding
principal  balance and all interest  accrued on the Note and all applicable late
charges and surcharges and all other liabilities and obligations of the Borrower
to the Bank to be  forthwith  due and payable,  whereupon  the same shall become
forthwith  due and  payable,  the  availability  of the Line of Credit  shall be
deemed to be automatically terminated,  and the Bank may exercise its rights and
remedies under this Agreement and the Related  Agreements;  all of the foregoing
without presentment or demand for payment, notice of non-payment, protest or any
other  notice or demand of any kind,  all of which are  expressly  waived by the
Borrower and each Guarantor.


                        Section 9. Intentionally Omitted

                            Section 10. Miscellaneous

     10.1 Waivers.

     (a) Borrower hereby waives presentment,  demand, notice, protest, notice of
acceptance  of this  Agreement,  notices  of  advances  made,  credit  extended,
collateral  received or delivered  or other action taken in reliance  hereon and
all  other  demands  and  notices  of any  description.  With  respect  to  this
Agreement, the Related Agreements,  the Note and any collateral now or hereafter
securing the Note, Borrower assents to any extension or postponement of the time
of payment or any other  indulgence,  to any  substitution,  to the  addition or
release  of  any  party  or  person  primarily  or  secondarily  liable,  to the
acceptance  of partial  payments  thereon and the  settlement,  compromising  or
adjusting  of any  thereof,  all in such manner and at such time or times as the
Bank may deem advisable.  The Bank shall not be deemed to have waived any of its
rights upon or under any document or agreement  relating to the  liabilities  of
the Borrower,  unless such waiver be in writing and signed by the Bank. No delay
or omission on the part of the Bank in  exercising  any right shall operate as a
waiver of such right or any other right.  A waiver on any one occasion shall not
be construed as a bar to or waiver of any right on any future occasion. The Bank
may  revoke  any  permission  or waiver  previously  granted  to  Borrower  such
revocation shall be effective whether given orally or in writing. All rights and
remedies of the Bank with respect to this Agreement,  the Related  Agreements or
the Note whether evidenced hereby or by any other instrument or document,  shall
be cumulative and may be exercised singularly or concurrently.
 
     (b)  BORROWER  AND  BANK  MUTUALLY   HEREBY   KNOWINGLY,   VOLUNTARILY  AND
INTENTIONALLY  WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM  BASED
HEREON,  ARISING OUT OF, UNDER OR IN CONNECTION  WITH THIS AGREEMENT OR THE NOTE
OR ANY OTHER LOAN DOCUMENTS  CONTEMPLATED TO BE EXECUTED IN CONNECTION  HEREWITH
OR ANY COURSE OF CONDUCT,  COURSE OF  DEALINGS,  STATEMENTS  (WHETHER  VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL  INDUCEMENT
FOR BANK TO ACCEPT THE NOTE AND MAKE THE LOAN.

     (c) BORROWER (i) ACKNOWLEDGES  THAT THE TRANSACTION OF WHICH THIS AGREEMENT
IS A PART IS A COMMERCIAL  TRANSACTION  AND (ii) TO THE EXTENT  PERMITTED BY ANY
STATE OR FEDERAL  LAW,  WAIVES THE RIGHT ANY OF THEM MAY HAVE TO PRIOR NOTICE OF
AND A HEARING  AND THE  POSTING OF A BOND ON THE RIGHT OF ANY HOLDER OF THE NOTE
TO ANY REMEDY OR  COMBINATION  OF REMEDIES  THAT  ENABLES  SAID HOLDER BY WAY OF
ATTACHMENT, FOREIGN ATTACHMENT,  GARNISHMENT OR REPLEVIN, TO DEPRIVE BORROWER OR
ANY GUARANTOR OF ANY OF THEIR PROPERTY,  AT ANY TIME, PRIOR TO FINAL JUDGMENT IN
ANY LITIGATION INSTITUTED IN CONNECTION WITH THIS AGREEMENT.

     10.2 Notices. All other notices,  requests or demands to or upon a party to
this Agreement  shall be given or made by the other party hereto in writing,  in
person or by depositing in the mails postage prepaid,  return receipt  requested
addressed  to the  addressee  at the  address  set forth  above or to such other
addresses as such  addressee  may have  designated in writing to the other party
hereto.  No other  method  of giving  any  notice,  request  or demand is hereby
precluded.

     10.3 Expenses; Additional Documents. The Borrower will pay all taxes levied
or assessed upon the principal sum of the Advances made against the Bank and all
reasonable expenses arising out of the preparation,  administration,  amendment,
waiver,  modification,  protection,  collection and/or other enforcement of this
Agreement, the Related Agreements, and the Note. The Borrower will, from time to
time, at its expense, execute and deliver to the Bank all such other and further
instruments and documents as the Bank shall reasonably request.

     10.4 Lien, Security Interest and Set Off. Borrower hereby grants to Bank, a
lien,  security interest and right of setoff as security for all liabilities and
obligations to Bank, whether now existing or hereafter arising, upon and against
all  deposits  and  credits,  now  or  hereafter  in  the  possession,  custody,
safekeeping  or control of Bank or in transit to the Bank. At any time,  without
demand or notice,  Bank may set off the same or any part  thereof  and apply the
same to any liability or obligation of Borrower even though unmatured.

     10.5  Indemnification.  The Borrower  agrees to defend,  indemnify and hold
harmless the Bank and any  participants,  successors  or assigns of the Bank and
the officers,  directors,  employees and agents of each of them from and against
any and all losses, claims, liabilities, asserted liabilities,  reasonable costs
and expenses, including, without limitation,  reasonable costs of litigation and
reasonable  attorneys'  fees (both the allocated  costs of internal  counsel and
outside  counsel)  incurred in connection with any and all claims or proceedings
for bodily injury,  property  damage,  abatement or  remediation,  environmental
damage or impairment or any other injury or damage  (including  all  foreseeable
damage)  or any  diminution  in  value of any real  property  resulting  from or
relating,  directly or indirectly,  to (a) a release into the environment of any
toxic  substances or hazardous  wastes (a "Release") a threatened  Release,  the
existence or removal of any toxic substances or hazardous wastes on, into, from,
through or under any real  property  owned or  operated  by the  Borrower or any
Guarantor  (whether  or  not  such  Release  caused  by  Borrower,  or  Borrower
Affiliate,  tenant,  subtenant,  prior owner or prior tenant or any other Person
and  whether or not the  alleged  liability  is  attributable  to the  handling,
storage, generation, transportation or disposal of toxic substances or hazardous
wastes or the mere presence of such toxic substances or hazardous wastes) or (b)
the breach or alleged  breach by Borrower of any federal,  state or local law or
regulation  concerning public health,  safety or the environment with respect to
any  real  property  owned or  operated  by the  Borrower  and/or  any  business
conducted thereon.

     10.6 Stamp Tax. The Borrower  will pay any stamp or other tax which becomes
payable in respect of the Note, this Agreement or the Related Agreements.

     10.7  Schedule  A.  Schedule  A  which  is  attached  hereto  is and  shall
constitute a part of this Agreement.

     10.8 Connecticut Law. This Agreement, the Related Agreements and the rights
and obligations of the parties  hereunder and thereunder  shall be construed and
interpreted in accordance  with the laws of  Connecticut.  The Borrower and each
Guarantor agree that the execution of this Agreement and Related  Agreements and
the performance of the Borrower's  obligations hereunder and thereunder shall be
deemed to have a  Connecticut  situs and the  Borrower  shall be  subject to the
personal  jurisdiction of the courts of the State of Connecticut with respect to
any action the Bank or its  successors  or assigns  may  commence  hereunder  or
thereunder.  Accordingly,  the  Borrower  hereby  specifically  and  irrevocably
consents  to the  jurisdiction  of the courts of the State of  Connecticut  with
respect to all matters concerning this Agreement,  the Related  Agreements,  the
Note, or the enforcement of any of the foregoing.

     10.9  Survival  of  Representations.   All   representations,   warranties,
covenants and agreements  herein contained or made in writing in connection with
this  Agreement  shall  survive the  execution  and delivery of the Note,  shall
continue in full force and effect  until all  amounts  payable on account of the
Note, the Related Agreements and this Agreement shall have been paid in full and
this Agreement has been terminated.

     10.10 Severability.  If any provision of this Agreement shall to any extent
be held  invalid  or  unenforceable,  then only such  provision  shall be deemed
ineffective and the remainder of this Agreement shall not be affected.

     10.11 Integration; Modifications. This Agreement is intended by the parties
as the final, complete and exclusive statement of the transactions  evidenced by
this Agreement.  No modification or amendment  hereof shall be effective  unless
the same shall be in writing and signed by the parties hereto.

     10.12  Successors  and Assigns.  This  Agreement  shall be binding upon and
shall  inure to the  benefit  of the  Borrower,  the Bank and  their  respective
successors and assigns.

     10.13 Pledge by Bank to Federal Reserve. Bank may at any time pledge all or
any portion of its rights under this Agreement or the Note including any portion
of the Note to any of the twelve (12)  Federal  Reserve  Banks  organized  under
Section 4 of the Federal  Reserve Act, 12 U.S.C.  Section 341. No such pledge or
enforcement thereof shall release Bank from its obligations under this Agreement
or any of the Related Agreements.

     10.14 Lost, Stolen,  Destroyed or Mutilated  Documents.  Upon receipt of an
affidavit of an officer of Bank as to the loss, theft, destruction or mutilation
of the Note or any other security  document which is not of public record,  and,
in the case of any such loss, theft,  destruction or mutilation,  upon surrender
and cancellation of such Note or other security  document,  Borrower will issue,
in lieu  thereof,  a  replacement  Note or other  security  document in the same
principal amount thereof and otherwise of like tenor.

     10.15 Assignment of Bank's Interest. Bank shall have the unrestricted right
at any time or from time to time,  and  without  Borrower's  or any  Guarantor's
consent, to assign all or any portion of its rights and obligations hereunder to
one or more banks or other financial  institutions  (each,  an "Assignee"),  and
Borrower  and  each  Guarantor  agrees  that it  shall  execute,  or cause to be
executed,  such  documents,  including  without  limitation,  amendments to this
Agreement and to any other  documents,  instruments  and agreements  executed in
connection  herewith as Bank shall deem  necessary to effect the  foregoing.  In
addition, at the request of Bank and any such Assignee, Borrower shall issue one
or more new promissory notes, as applicable,  to any such Assignee, and, if Bank
has  retained  any  of its  rights  and  obligations  hereunder  following  such
assignment,  to Bank,  which new promissory notes shall be issued in replacement
of, but not in discharge of, the liability evidenced by the promissory note held
by Bank prior to such  assignment and shall reflect the amount of the respective
commitments and loans held by such Assignee and Bank after giving effect to such
assignment.   Upon  the  execution  and  delivery  of   appropriate   assignment
documentation,  amendments  and  any  other  documentation  required  by Bank in
connection  with such  assignment,  and the payment by Assignee of the  purchase
price agreed to by Bank, and such  Assignees,  such Assignee shall be a party to
this  Agreement  and  shall  have  all of the  rights  and  obligations  of Bank
hereunder (and under any and all other  guaranties,  documents,  instruments and
agreements  executed in connection  herewith) to the extent that such rights and
obligations have been assigned by Bank pursuant to the assignment  documentation
between Bank and such Assignee,  and Bank shall be released from its obligations
hereunder and thereunder to a corresponding extent.

     10.16  Participations.  Bank shall have the unrestricted  right at any time
and from time to time,  and  without the consent of or notice to Borrower or any
Guarantor to grant to one or more banks or other financial  institutions (each a
"Participant")  participating  interest in Bank's  obligation to lend  hereunder
and/or any or all of the loans held by Bank hereunder.  In the event of any such
grant by Bank of a participating interest to a Participant,  whether or not upon
notice to Borrower,  Bank shall remain  responsible  for the  performance of its
obligations  hereunder and Borrower  shall  continue to deal solely and directly
with Bank in connection with Bank's rights and obligations hereunder.

     Bank may furnish any information concerning Borrower in its possession from
time to time to prospective Assignees and Participants, provided that Bank shall
require  any such  prospective  Assignee or  Participant  to agree in writing to
maintain the confidentiality of such information.

     IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Commercial
Revolving Line of Credit Agreement to be duly executed as a sealed instrument as
of the day and year first above written.


                                                     SWISS ARMY BRANDS, INC.

Witness:

                                    By  Thomas M. Lupinski                
                                    Its
                         




                                                     FLEET NATIONAL BANK

Witness:

                                    By                          
                                    Its
                         


<PAGE>


                                   SCHEDULE A

Annexed to and made a part of the Commercial  Revolving Line of Credit Agreement
of even date between FLEET NATIONAL BANK and SWISS ARMY BRANDS, INC. (defined in
said Commercial Revolving Line of Credit Agreement as the Borrower).

Description of Financial Statements (See Section 3.3 of Agreement): 

Liabilities Not Disclosed in Financial Statements (Section 3.3 of Agreement):

Litigation, Pending or Threatened (See Section 3.6 of Agreement):

 See addendum to Schedule A.

Subsidiaries,  Affiliates and Trade Names-list name and state of organization of
each  Subsidiary  and Affiliate  (See Section 3.7 of Agreement)  and  percentage
ownership  if less than  100% and list each  Trade  Name used by  Borrower  (See
Section 3.13 of Agreement):


Encumbrances Not Otherwise Disclosed (See Section 3.11 of Agreement):


Places of Business (See Section 3.13 of Agreement):
Chief Executive Office and location of material assets.

 



Related Agreements (See Section 1 of Agreement, Definitions):

Borrowing Resolution
Opinion of Counsel
             Guarantees
             Commercial Transaction Waiver