FLEET NATIONAL BANK

1999 Amended and Restated
Commercial Loan Agreement


     THIS 1999 AMENDED AND RESTATED  COMMERCIAL  LOAN  AGREEMENT  ("Agreement"),
dated as of November 15, 1999, between FLEET NATIONAL BANK (the "Bank"),  having
an office at 157  Church  Street,  New Haven,  Connecticut  06510 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
1998 Amended and Restated Commercial  Revolving Line of Credit Agreement between
the Borrower and the Lender  dated as of  September  30, 1998,  as modified by a
First  Modification to 1998 Commercial  Revolving Line of Credit Agreement dated
as of April 22,  1999, a letter  agreement dated as of August 6,  1999, a Second
Modification to 1998 Commercial  Revolving Line of Credit  Agreement dated as of
September 17, 1999, and a letter agreement dated October 15, 1999 (collectively,
the "1998 Loan Agreement, as modified").


                              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.

     Account means  accounts,  chattel paper and  instruments as those terms are
defined in the Code, whether now owned or hereafter acquired by the Borrower.

     Account Debtor means any Person who is or may become  obligated to Borrower
under or on account of an Account.

     Advance  means an advance of funds to the Borrower by the Bank  pursuant to
this  Agreement  under the Line of Credit or a reborrowing by the Borrower of an
outstanding  amount under the Line of Credit,  which shall bear  interest at the
Base Rate, the LIBOR Rate or the Cost of Funds Rate.

     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 1999 Amended and Restated Commercial Loan 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  Base means  seventy-five  percent (75%) of the face value of the
Eligible  Accounts  plus twenty five percent  (25%) of the value of the Eligible
Inventory  (determined  according to the lower of market value or cost on a last
in first out basis) minus the then currently  outstanding balance under the Term
Loan.

     Borrowing Base Certificate  means a form for reporting the Borrowing Base a
specimen of which is attached hereto as Exhibit 1 or such other form as the Bank
may require from time to time.

     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 Notes 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.

     Capital  Assets means assets that in  accordance  with GAAP are required or
permitted to be depreciated or amortized on Borrower's balance sheet.

     Capital Leases means capital leases,  conditional sales contracts and other
title  retention  agreements  relating to the purchase or acquisition of Capital
Assets.

     Code means the Uniform Commercial Code in effect in Connecticut.



     Control  shall be  deemed to exist if any  Person  shall  have  possession,
directly or indirectly, of the power to direct the management or policies of the
Borrower or any Person 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 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.

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

     Cost of Funds Rate Loan shall mean a Cost of Funds Advance or the Term Loan
bearing interest at the Term Loan Cost of Funds Rate.

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

     Current  Maturity of Long-Term Debt ("CMLTD") means the current maturity of
long-term  Indebtedness paid during the applicable  period,  including,  but not
limited to, amounts required to be paid during such period under Capital Leases.

     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,  Taxes,  Depreciation and Amortization ("EBITDA")
means, for the applicable period, income from continuing  operations,  excluding
the  effect  of any  non-cash  reductions  in the  value of  investments  on the
Borrower's  balance  sheet,  before  the  payment  of  interest  and taxes  plus
depreciation and amortization, all as determined in accordance with GAAP.

     Eligible Accounts shall be determined by the Bank, upon delivery to Bank of
a Borrowing Base Certificate,  in the reasonable exercise of its discretion,  as
to which Accounts listed thereon shall be deemed to be "Eligible  Accounts".  In
making this determination,  Bank will consider, but shall not be limited to, the
following criteria:

     (A) The goods or services  giving rise to such Account have been shipped or
delivered to or performed  for an Account  Debtor (i) on an absolute  sale basis
and not on consignment,  on approval or on a sale-or-return  basis or subject to
any other repurchase or return agreement,  (ii) on an open account basis,  (iii)
no material part of the subject goods or services has been  returned,  rejected,
lost or  damaged,  (iv) the  Account is not  evidenced  by  chattel  paper or an
instrument  of any kind,  and (v) the  Account  Debtor is not  insolvent  or the
subject of any bankruptcy or insolvency proceeding of any kind;

     (B) If the Account  Debtor is located  outside the United  States,  (i) the
subject goods shall have been shipped or the services rendered after receipt, by
Borrower from the Account  Debtor,  of an  irrevocable  letter of credit,  which
letter of credit shall have been confirmed by a financial institution acceptable
to Bank and  shall  be in form and  substance  acceptable  to Bank and  shall be
transferred,  assigned or otherwise  made payable to Bank in form and  substance
satisfactory  to Bank,  and (ii) the Account shall be payable in the full amount
of the face value of the Account in United States dollars;

     (C) The Account is a valid,  legally enforceable  obligation of the Account
Debtor  thereunder and is not subject to any offset or other defense on the part
of such  Account  Debtor  or to any  claim  on the part of such  Account  Debtor
denying liability thereunder;  provided,  however, that, if it is subject to any
such offset, defense or claim, it shall be ineligible only to the extent of such
offset, defense or claim;

     (D) The  Account is subject to a duly  perfected  first  priority  security
interest in favor of the Bank;

     (E) The  Account  is subject to no lien or  security  interest  whatsoever,
except  for the  security  interest  of Bank  hereunder  and  liens or  security
interests  which have been expressly  subordinated  to the security  interest of
Bank in form and substance satisfactory to Bank;

     (F) The  Account is  evidenced  by an invoice or other proof of delivery in
form acceptable to Bank;

     (G) The Account has not remained unpaid for a period  exceeding ninety (90)
days after the due date;

     (H) The Account is not owing from an Account Debtor which is located in the
State of New Jersey or the State of Minnesota unless Borrower has filed a Notice
of Business  Activities  Report with the New Jersey  Division of Taxation or the
applicable Minnesota agency, as appropriate, for the then current year;

     (I) The  Account  does not  arise  out of  transactions  with an  employee,
officer, agent, director, stockholder, Affiliate, or Subsidiary of Borrower;

     (J) The Account does not arise out of a transaction  with the United States
or any department or agency thereof, unless assignment of which to Bank has been
properly filed in accordance with the Federal Assignment of Claims Act; and

     (K) The  Account  is not an  Account  which  is,  or may  become,  a contra
account.

     Eligible  Inventory  shall be determined by the Bank, upon delivery to Bank
of a Borrowing Base Certificate,  in the reasonable  exercise of its discretion,
as to what Inventory listed thereon shall be deemed to be "Eligible  Inventory."
In making this determination,  Bank will consider,  but shall not be limited to,
the following criteria:

     (A) The Inventory  consists of finished goods that are useable and saleable
by the Borrower or Bear Cutlery, Inc. in the ordinary course of business;

     (B) The Inventory complies with all applicable laws, regulations and rules;

     (C) The  Inventory  is  located  in the United  States or the  province  of
Ontario, Canada;

     (D) The Inventory is subject to a duly perfected  first  priority  security
interest in favor of the Bank; and

     (E) The  Inventory is subject to no lien or security  interest  whatsoever,
except  for the  security  interest  of Bank  hereunder  and  liens or  security
interests  which have been expressly  subordinated  to the security  interest of
Bank in form and substance satisfactory to Bank.

     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.

     Funded  Debt  means  (i) Indebtedness  on account of  borrowed  money;  and
(ii) obligations under Capital Leases.

     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.

     Guarantor means,  individually  and  collectively,  Excelsior  Advertising,
Inc., Swiss Army Brand, Ltd., Swiss Army Brands (Suisse) S.A., and Bear Cutlery,
Inc.

     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  Period  means  with  respect to the Term Loan and each Fixed Rate
Advance:

     (i) initially the period (A)  commencing on the Borrowing  Date of the Term
Loan or such  Advance,  and (B)  ending  at the end of the  Applicable  Interest
Period, for LIBOR Loans - 7, 30, 60 or 90 days thereafter, and for Cost of Funds
Rate Loans, 7, 14, or 21 days thereafter, as the case may be, as selected by the
Borrower, and (ii) thereafter, such subsequent Interest Period for the Term Loan
or such Fixed Rate Advance shall begin on the last day of the preceding Interest
Period for the Term Loan or such Fixed Rate  Advance and shall end at the end of
the  Applicable  Interest  Period as the  Borrower  may select  pursuant to this
Agreement;  provided  that (A) any Interest  Period for a LIBOR Loan 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, (B) any Interest Period
for a Cost of Funds Rate Loan 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;  and (C) no  Interest  Period  for the Term Loan or a
Fixed Rate Advance shall end after the Termination Date.

     Interest  Rate Margin  means,  with regard to the Term Loan and the Line of
Credit,  the  percentage  rate by which LIBOR and Cost of Funds is  increased as
determined  by referring to the  Performance  Pricing  Grid  attached  hereto as
Schedule B.

     Inventory means inventory,  as the term is defined in the Code, whether now
owned or hereafter acquired by the Borrower, and, including, without limitation,
any and all goods, merchandise and other personal property,  wheresoever located
and whether or not in transit,  now owned or hereafter acquired by the Borrower,
which is or may at any time be held for sale or  lease,  or  furnished  or to be
furnished  under any  contract  of  service  or held as raw  materials,  work in
process,  supplies or materials used or consumed in the  Borrower's  businesses,
and all such property the sale or other  disposition  of which has given rise to
Accounts or  Documents  (as that term is defined in the Code) and which has been
returned to or repossessed or stopped in transit by the Borrower.

     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 Term Loan  LIBOR  Rate or LIBOR
Advance  (collectively,  a "LIBOR Loan"), 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 Loan which appears on the Telerate page 3750 as of 11:00 a.m.  London
time on the day that is two (2) London  Banking Days  preceding the first day of
such LIBOR Loan; 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 U.S. 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  Loan  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  Loan 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
(2) such quotations are provided,  the rate for that date will be the arithmetic
mean of the  quotations.  If  fewer  than two (2)  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  Loan  offered  by major  banks  in New York  City at
approximately  11:00 a.m. New York City time,  on the day that is two (2) London
Banking Days  preceding the first day of such LIBOR Loan. In the event that Bank
is unable to obtain any such quotation as provided above, it will be deemed that
LIBOR pursuant to LIBOR Loan 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  Interest  Rate means an  interest  rate per annum equal at all times
during an Interest  Period to the  aggregate  of (i) LIBOR and (ii) the Interest
Rate Margin.

     LIBOR Loan shall mean a LIBOR Advance or the Term Loan bearing  interest at
the Tem Loan LIBOR Rate.

     Line of Credit means the revolving  line of credit 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.

     Line of Credit Note means the note  executed and  delivered by the Borrower
in  substantially  the form of Exhibit 2 hereto and which  evidences the Line of
Credit.

     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.

         Notes means the Line of Credit Note and the Term Note.

     Performance   Pricing  Grid  means  that  chart  outlining  the  applicable
adjustment  to the interest  rate payable  under the Line of Credit Note and the
Term Note, respectively, which chart is attached hereto as Schedule B.

     Person means any  individual,  sole  proprietorship,  partnership,  limited
liability   company,   joint  venture,   trust,   unincorporated   organization,
association,  corporation,  institution,  entity,  party, or government (whether
national,  federal,  state,  county,  city,  municipal or otherwise,  including,
without limitation,  any instrumentality,  division,  agency, body or department
thereof).

     Related  Agreements  means the various  agreements and documents  described
under the heading "Related  Agreements" in Schedule A to this Agreement and such
other  documents,  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.

     Stockholder   Equity  means  total   stockholders'   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.

     Term Loan means the Term Loan as defined in Section 2.A. hereof.

     Term Loan Base Rate means the variable per annum rate of interest  equal at
all times to the Base Rate.

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

     Term Loan  Fixed  Rate means the Term Loan LIBOR Rate or the Term Loan Cost
of Funds Rate.

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

     Term Note means the 1999 Commercial  Promissory Term Note  substantially in
the form of Exhibit 3 hereto.

     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.

     Year  2000  Compliant  means,  with  regard  to  the  Borrower  and/or  its
suppliers,  vendors and customers, that all software,  embedded microchips,  and
other  processing  capabilities  utilized  by,  and  material  to  the  business
operations  or financial  condition  of, such entity are able to  interpret  and
manipulate  data on and  involving  all  calendar  dates  correctly  and without
causing any  abnormal  ending  scenario,  including  in relation to dates on and
after January 1, 2000.

     Year 2000 Risk means the risk that computer  applications  used by Borrower
and/or its  suppliers,  vendors and  customers  may be unable to  recognize  and
perform without error date-sensitive  functions involving certain dates prior to
and any date after December 31, 1999.


                          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 the lesser of:  (a) Sixteen  Million and
No/100  DOLLARS  ($16,000,000.00);  or (b) the amount of the Borrowing Base (the
"Line of Credit") as evidenced  by the Line of Credit  Note.  Unless an Event of
Default  occurs and is continuing,  the Borrower may borrow,  repay and reborrow
Advances under this Agreement  during the period from the date hereof until June
30, 2001(as such date may be extended in writing from time to time in the Bank's
sole and absolute discretion,  the "Termination Date"); provided,  however, that
all outstanding principal plus accrued and unpaid interest shall be paid in full
on the  Termination  Date as adjusted by the  Modified  Following  Business  Day
Convention.

     2.2 Advances. (a) The Borrower may, in writing,  request that the Bank make
an  Advance  under  the Line of  Credit.  Each  such  written  request  shall be
accompanied by a certificate by the president or chief financial  officer of the
Borrower stating that: (i) the Borrower is current with its obligation to submit
Borrowing  Base  Certificates  to the Bank  pursuant  to Section  5.1(f) of this
Agreement;  and (ii) the aggregate outstanding Advances are not in excess of the
lesser of the Borrowing Base and the Line of Credit; and (iii) the making of the
requested  Advance will not increase the  aggregate  outstanding  Advances to an
amount greater than the lesser of the Borrowing Base and the Line of Credit.  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 Line of
Credit Note.  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 Line of Credit 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. No LIBOR Advance will be made in an amount less
than $100,000 and no more than eight (8) Fixed Rate Advances may be  outstanding
under the Line of Credit at any time.

     (d) Each request for an Advance shall specify whether such Advance is to be
a Base Rate Advance,  or 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 7, 30,
60 or 90 days; and

     (iii) for Cost of Funds Advances,  the Interest Period may be of a duration
of from 7, 14 or 21 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  ("Letters  of
Credit").  The aggregate outstanding available undrawn amount of all outstanding
Letters 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 Line of
Credit Note.  Such interest  shall be payable as specified in the Line of Credit
Note. Principal shall also be repaid in accordance with the terms of the Line of
Credit Note.  Upon the  occurrence of and during the  continuance of an Event of
Default or after  maturity or after  judgment  has been  rendered on the Line of
Credit 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 two (2) 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 the Line of
Credit 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 the Line of Credit 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 Line of Credit 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 Line of
Credit 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 Line of Credit 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 Line of
Credit Note.  If at any time,  the  aggregate  principal  amount of all Advances
under the Line of Credit Note shall exceed the lesser of the Borrowing  Base and
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 exceed the lesser of
the  Borrowing  Base and 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 Notes 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 Line of Credit 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 Line of Credit in whole or in
part, in minimum  increments of $100,000,  and Borrower shall pay to Bank a make
whole  premium 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 make whole premium.  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 make whole premium due to Bank upon prepayment of
the fixed rate loan.  Each  reference in this paragraph to "Fixed Rate Election"
shall mean the effective  election by Borrower pursuant to paragraph 2.2 of this
Loan Agreement and the Line of Credit Note of a Fixed Rate Advance.

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

     2.7 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 Line of Credit 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 Line of Credit  Note or cause  this
Agreement  or the Line of Credit  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 2A. The Term Loan

     2A.1 The Term Loan.  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 the aggregate  principal  amount of Seven Million
and No/100  DOLLARS  ($7,000,000.00)  (the "Term Loan") as evidenced by the Term
Note. All  outstanding  principal plus accrued and unpaid interest shall be paid
in full on the Termination  Date (as the  Termination  Date may be extended from
time to time) or November 1, 2004 (the "Maturity  Date") should the  Termination
Date be extended beyond the Maturity Date.

     2A.2 Interest Rate. (a) The outstanding  principal balance of the Term Loan
shall bear interest equal to a Term Loan Base Rate, the Term Loan LIBOR Rate, or
the Term Loan Cost of Funds Rate.

     (b) Whenever  Borrower desires that the Term Loan bear interest at the Term
Loan Base Rate,  it shall give the Bank notice of such  request.  The  effective
date of a Term Loan Base Rate request shall be a Business Day.

     (c) Whenever  Borrower desires that the Term Loan bear interest at the Term
Loan LIBOR Rate or the Term Loan Cost of Funds Rate: it shall give Bank not less
than two (2) Business Days notice of such request;  and the effective  date of a
Term Loan LIBOR Rate request or Term Loan Cost of Funds Rate shall be a Business
Day.

     (d) Each request  regarding the interest  rate  applicable to the Term Loan
shall specify  whether the interest  rate is to be the Term Loan Base Rate,  the
Term  Loan  LIBOR  Rate,  or the Term  Loan  Cost of  Funds  Rate  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 request as follows:

     (i) for Term Loan Base Rate no Interest Period need be specified;

     (ii) for Term Loan LIBOR Rate, the Interest  Period may be of a duration of
7, 30, 60 or 90 days; and

     (iii) for Term Loan Cost of Funds  Rate,  the  Interest  Period may be of a
duration of from 7, 14 or 21 days.

     2A.3 Interest;  Principal.  The Term Loan will bear interest at a per annum
rate as provided in the Term Note.  Such interest  shall be payable as specified
in the Term Note. Principal shall also be repaid in accordance with the terms of
the Term Note.  Upon the occurrence of and during the continuance of an Event of
Default or after  maturity or after judgment has been rendered on the Term Note,
Borrower's  right to select pricing  options  shall,  at the option of the Bank,
cease and the  unpaid  principal  of the Term Loan  shall,  at the option of the
Bank,  bear  interest  at a rate  which is two (2)  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 the Term 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 Term
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.

     2A.4 Computation of Interest. All computations of interest on the Term Note
shall  be made on the  basis of a three  hundred  sixty  (360)  day year and the
actual days elapsed.

     2A.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 Term Note to any  account of the  Borrower
when and as it becomes due.

     2A.6  Prepayments.  (a) The Borrower may prepay the Term Loan in accordance
with the terms of the Term Note. 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 Term 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 continue to
offer or maintain the Term Loan LIBOR Rate for the Borrower hereunder,  then, on
notice  thereof by the Bank to the Borrower,  (A) the  obligation of the Bank to
the Borrower to offer or maintain the Term Loan LIBOR Rate shall terminate,  and
(B) within  five (5)  Business  Days after the Bank gives  notice,  the Borrower
shall  convert the  outstanding  principal  balance of the Term Loan to the Term
Loan Base Rate.

     (c) The  Borrower  may, at its option,  prepay any Base Rate  Advances,  in
whole or in part,  at any  time,  subject  only to the  prepayment  premium,  if
applicable, as set forth in the Term Note.

     (d) If at any time (i) the interest  rate on the Term 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 Term Loan in whole or in part,
in minimum  increments of $100,000,  and Borrower shall pay to Bank a make whole
premium 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 make whole premium.  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 make whole premium due to Bank upon  prepayment of the fixed rate loan. Each
reference in this  paragraph to "Fixed Rate  Election"  shall mean the effective
election by Borrower  pursuant to paragraph  2A.2 of this Loan Agreement and the
Term Note of a Term Loan LIBOR Rate or the Term Loan Cost of Funds Rate.

     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 make
whole  premium with respect to the Term Loan shall become due and payable in the
same manner as though Borrower had exercised such right of prepayment

     2A.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.

     2A.9  Additional  Payments.  (a) If the Bank shall deem  applicable to this
Agreement or the Term 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 Term Note or cause this  Agreement or
the Term 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 request for the Term Loan LIBOR
Rate shall be of no effect;  and (ii) the  obligation of the Bank to maintain or
offer the Term Loan LIBOR Rate 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  the Term Loan LIBOR Rate 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 Notes and this
Agreement  and the making of any Advances  and shall be deemed to be  continuing
until the Notes are 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 Notes, 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 Notes 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 material  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 Notes 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,  except  as
disclosed  to the Bank in  writing,  there  has been no  adverse  change  in the
assets,  liabilities,  financial  condition or business of the Borrower  and, no
Dividends have been declared or made to stockholders.

     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  "Litigation
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 Notes 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  material  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.

     3.14 ERISA  Compliance.  The  Borrower has received no notice to the effect
that it is not in full compliance  with any of the  requirements of the Employee
Retirement  Income  Security  Act  of  1974,  as  amended,   ("ERISA")  and  the
regulations  promulgated  thereunder  and,  to the best of its  knowledge  there
exists  no event  described  in  Section  4043 of ERISA,  excluding  subsections
4043(b)(2) and 4043(b)(3) thereof.

     3.15 Year 2000.  The  Borrower  will be Year 2000  Compliant  by January 1,
2000.

     3.16  Year  2000  Risk.  Borrower  has  reviewed  the  Year  2000  Risk and
represents  that it is taking such action as may be necessary to ensure that the
Year 2000 Risk will not  materially  adversely  affect its  business  operations
and/or financial condition.


                         Section 4. Conditions Precedent

     4.1 The  initial  Advance  under the Line of Credit and the  funding of the
Term Loan 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 Notes and the
Related Agreements as the Bank or its counsel shall reasonably request.

     (c) The Notes,  Related  Agreements and Documents.  The Borrower shall have
delivered to the Bank the Notes,  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  3.16 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 3.16 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 Notes,  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  and  consolidating  financial  statements  that are
internally  prepared,  consisting of a balance sheet and statement of income and
retained  earnings  and cash flows 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  and  consolidating  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, such financial
statements shall be accompanied by an opinion of the auditor which (i) shall not
disclaim the auditor's obligation to address the Year 2000 Risk as it relates to
the  Borrower's  liabilities  or contingent  liabilities  and  (ii) shall not be
qualified due to the Borrower's  possible failure to take all appropriate  steps
to  successfully  address the Year 2000 Risk;  (c) within ninety (90) days after
the close of each fiscal year, a copy of the  Borrower's  annual  report on Form
10-k 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,  as the Bank may, from time to
time,  reasonably  request;  (e) promptly upon becoming  aware of any occurrence
that but for the giving of notice or the passage of time,  would  constitute  an
Event of  Default,  notice  thereof in  writing;  and (f) as of the date of this
Agreement and thereafter as of the first Business Day of each calendar  month, a
Borrowing Base Certificate. 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 policies of insurance shall contain an endorsement, in form
and  substance  satisfactory  to  Bank,  showing  loss  payable  to  Bank.  Such
endorsement or an independent  instrument  furnished to Bank, shall provide that
the insurance  companies  will give Bank at least thirty (30) days prior written
notice  before any such  policy or  policies  of  insurance  shall be altered or
canceled and that no act, default or  misrepresentation of Borrower or any other
person shall  affect the right of Bank to recover  under such policy or policies
of insurance  in case of loss or damage.  Borrower  hereby  directs all insurers
under such policies of insurance to pay all proceeds payable thereunder directly
to Bank.  Borrower agrees to deliver  certificates  and evidence 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 Notes and pay all debts of the Borrower  before
the same shall become delinquent.

     5.10 Covenant to Secure Equally and Ratably.  Secure the Notes or cause the
Notes 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.

     (a) Advances Under the Line of Credit.  The Borrower shall use the proceeds
of each  Advance  under  the Line of Credit  for  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;

     (b) Advances  under the Term Loan.  The Borrower  shall use the proceeds of
the Term Loan to pay down existing indebtedness owing to the Bank.

     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
Notes,  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 and the Term Loan  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.  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 $100,000 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 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 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 Notes 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.

     6.6 Loans, Advances, Investments.  Purchase or otherwise acquire any shares
of stock or obligations of, or make loans or advances to, or investments in, any
Person; provided,  however: (1) 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  (2) the  Borrower  and any
Subsidiary  may make loans or advances to any other  Person,  provided  that the
aggregate amount of all such loans or advances  outstanding at any time does not
exceed $150,000.

     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,  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.

     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 at least 30 days 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,
places of business or the present  locations  of its assets or records  relating
thereto from those addresses set forth on page 1 of this Agreement.

     6.10 Subsidiaries,  Affiliates.  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  executive  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
(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.

     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
Notes, 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 unless otherwise noted.

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

     7.2 Funded Debt to EBITDA Ratio. On a rolling four quarter basis,  Borrower
shall not permit its ratio of Funded Debt to EBITDA to be greater than:

         3.7 to 1.0 through December 30, 1999;
         2.25 to 1.0 as of December 31, 1999 and thereafter.

     7.3 Current  Ratio.  Borrower shall not permit its Current Ratio to be less
than:
         2.0 to 1.0 through March 30, 2001;
         2.5 to 1.0 as of March 31, 2001 and thereafter.

     7.4 EBITDA to Interest Expenses plus CMLTD Ratio. On a rolling four quarter
basis,  Borrower  shall not permit its ratio of EBITDA to Interest  Expense plus
CMLTD to be less than 3.0 to 1.0.

     7.5 Tangible Net Worth:  Borrower shall not permit Tangible Net Worth to be
less than:

         $64,000,000 through December 30, 1999
         $66,000,000 as of          December 31, 1999 through
                                    September 29, 2000;
         $66,500,000 as of          September 30, 2000 through
                                    December 30, 2000; and
         $68,000,000 as of          December 31, 2000 and thereafter.





                          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 Notes,  or in the
payment of interest on the Notes 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

     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,  or failure by the Borrower to perform any of its  obligations  under
any Related  Agreement,  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;

     8.11 Failure by the Borrower to pay any other  Indebtedness in an amount in
excess of  $250,000,  whether  contingent  or  otherwise  upon  maturity  or the
acceleration  thereof;  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 Notes 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,  Borrower's  right to  select  pricing
options for Advances shall  terminate,  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 Notes and any collateral now or hereafter
securing the Notes,  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 Notes 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 NOTES
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 NOTES AND MAKE THE LOANS DESCRIBED HEREIN.

     (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  ANY RIGHT IT MAY HAVE TO PRIOR  NOTICE OF AND A
HEARING AND THE POSTING OF A BOND ON THE RIGHT OF ANY HOLDER OF THE NOTES 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.

     [The Remainder of this Page is Intentionally Left Blank]

     10.2  Notices.  All  notices,  consents,  waivers and other  communications
required or permitted by this Agreement  shall be in writing and shall be deemed
given to a party when (a)  delivered  to the  appropriate  address by hand or by
nationally  recognized  overnight  courier service (costs prepaid),  (b) sent by
facsimile with  confirmation of transmission by the transmitting  equipment;  or
(c) received or rejected by the  addressee,  if sent by certified  mail,  return
receipt requested, in each case to the following addresses, or facsimile numbers
and marked to the  attention of the person (by name or title)  designated  below
(or to such other address, facsimile number, or person as a party may designated
by notice to the other parties:

If to the Bank:
FLEET NATIONAL BANK
157 Church Street
New Haven, Connecticut 06510
Facsimile No. (203) 821.7311
         Attention:        Kevin Burke, Vice President

with a copy to:

TYLER COOPER & ALCORN, LLP
205 Church Street
P.O. Box 1936
New Haven, Connecticut 06510
Facsimile No. (203) 789.2133
         Attention:        Joseph C. Lee, Esq.

If to the Borrower:

SWISS ARMY BRANDS, INC.
One Research Drive
Shelton, Connecticut 06484
Facsimile No. (203) 925.2933
         Attention:        Thomas M. Lupinski, Chief Financial Officer

with a copy to:

MORRISON & FOERSTER LLP
1290 Avenue of the Americas
New York, New York 10104-0050
Facsimile No. (212) 468.7900
         Attention:        Charles B. Friedman, Esq.




     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 Notes. 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 Notes, this Agreement or the Related Agreements.

     10.7 Schedules.  Schedule A and Schedule B, which are attached hereto,  are
and shall constitute a part of this Agreement.

     10.8 Connecticut Law;  Jurisdiction of Connecticut  Courts. 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 Notes, 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 Notes,  shall
continue in full force and effect  until all  amounts  payable on account of the
Notes,  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 Notes  including  any
portion of the Notes 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 Notes 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 Notes or other security document,  Borrower will issue,
in lieu thereof,  a  replacement  Notes 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  Loan
Agreement  to be duly  executed  as a sealed  instrument  as of the day and year
first above written.


                                              SWISS ARMY BRANDS, INC.

Witness:

                                              By /S/ Thomas M. Lupinski
                                              Its Senior Vice President, CFO


                                              FLEET NATIONAL BANK

Witness:

                                              By K.E.Burke
                                              Its





                                   SCHEDULE A

Annexed to and made a part of the 1999  Amended  and  Restated  Commercial  Loan
Agreement  (the "Loan  Agreement")  dated as of November ___, 1999 between FLEET
NATIONAL  BANK  (defined  in the Loan  Agreement  as the "Bank") and SWISS ARMY
BRANDS, INC. (defined in the Loan 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):

             1999 Substituted Revolving Commercial Promissory Note
             1999 Commercial Promissory Term Note
             1999 Substituted Security Agreement
             Negative Pledge Agreement
             1999 Substituted Agreement of Guaranty and Suretyship
             Agreement of Guaranty and Suretyship
             Commercial Transaction Waiver
             Borrowing Resolution
             ISDA Master Agreement and Schedules



Schedule B        -        Pricing Grid

Exhibit 1         -        Borrowing Base Certificate
Exhibit 2         -        Revolving Note
Exhibit 3         -        Term Note