FIRST AMENDMENT TO
                    THE REVOLVING CREDIT AGREEMENT



      FIRST AMENDMENT dated the 12th day of March,  1999 to the REVOLVING CREDIT
AGREEMENT (the "Credit Agreement") dated August 31, 1998 by and between SAUCONY,
INC., a  Massachusetts  corporation  with its principal  place of business at 13
Centennial Drive, Peabody,  Massachusetts (the "Borrower") and STATE STREET BANK
AND TRUST  COMPANY,  a  Massachusetts  trust company with its head office at 225
Franklin Street, Boston, Massachusetts (the "Bank").

      Except as otherwise  indicated,  all  capitalized  terms used herein shall
have the meanings given to them in the Credit Agreement.

      1. Increase of  Commitment.  From and  including  the  Effective  Date (as
defined below) Section 2.1 of the Credit  Agreement  shall be revised to read as
follows:

      2.1.  Revolving Credit. The Bank agrees on the terms and conditions herein
      set  forth,  to make  loans,  whether  LIBO Rate Loans or Prime Rate Loans
      (including  LMCS Loans)  (together,  the  "Loans") to the  Borrower and to
      issue Letters of Credit  (subject,  however,  to the additional  terms and
      conditions of the Letter of Credit Agreement) from time to time during the
      period  from  the  date of this  Agreement  up to but  not  including  the
      Termination Date in an aggregate  principal amount of up to twenty million
      United States Dollars (US$20,000,000) at any one time outstanding, as such
      amount may be reduced  pursuant  to Section 2.2 (the  "Commitment").  Each
      Loan (other than a LMCS Loan)  which shall not utilize the  Commitment  in
      full shall be in an amount not less than $50,000. Within the limits of the
      Commitment, the Borrower may borrow, prepay pursuant to Section 2.7, repay
      pursuant to Section 2.8, and reborrow under this Section 2.1.

      2.  The  Effective  Date  shall  be the  date  when  all of the  following
conditions   precedent   shall  have  been   satisfied  in  form  and  substance
satisfactory to the Bank:

       (a) The Borrower shall have executed and delivered to the Bank this First
Amendment and the Amended and Restated Note, attached hereto as Exhibit A.

      (b) The Borrower shall have  delivered to the Bank a certificate  from its
President, Chief Operating Officer or Clerk certifying to the Board of Directors
votes  authorizing  the  execution,  delivery  and  performance  of  this  First
Amendment,  the Amended and Restated  Note,  and the other matters  contemplated
hereby,  setting  forth the names of the officers of the Borrower  authorized to
sign the same, and stating that the Bank may conclusively rely on the statements
made therein until the Bank shall receive a further  certificate of such officer
canceling or amending the prior certificate.

       (c)  The  Bank  shall  have  received  a duly  executed  original  of the
favorable legal opinion of counsel for the Borrower as to the due authorization,
execution and enforceability of the

Credit  Agreement,  as amended  by this First  Amendment,  and the  Amended  and
Restated Note and such other matters as the Bank and its counsel may  reasonably
require.

      (d) The  representations  and  warranties  of the  Borrower  contained  in
Section 4 of the Credit  Agreement shall be true on and as of the Effective Date
as if  they  had  been  made  on such  date  (except  to the  extent  that  such
representations  and  warranties  expressly  relate  to an  earlier  date or are
affected  by  the  consummation  of  transactions  permitted  under  the  Credit
Agreement).

      (e) No Default shall have occurred and be continuing.

      3.   The  Borrower  represents  and  warrants  to the  Bank  that  (i) the
           representations and
warranties  of the Borrower  contained in Section 4 of the Credit  Agreement are
true on the date hereof as though  made on such date  (except to the extent that
such  representations and warranties  expressly relate to an earlier date or are
affected  by  the  consummation  of  transactions  permitted  under  the  Credit
Agreement),  and (ii) no Default  has  occurred or is  continuing  or will occur
after giving effect to this First  Amendment and the  transactions  contemplated
hereunder.

      4. As of the Effective Date, all references to the Credit  Agreement shall
be to the Credit  Agreement  as amended  hereby and all  references  to the Note
shall be to the Amended and Restated Note.

      5. The Borrower agrees to pay all costs and expenses, including reasonable
attorneys'  fees,  incurred  by the Bank in  connection  with  the  preparation,
negotiation  and  execution of this First  Amendment  and of the  documents  and
instruments referred to herein.

      6.  Except as  otherwise  provided  herein  all other  terms of the Credit
Agreement shall remain in full force and effect.

      7.  THE  BORROWER  AND  THE  BANK  HEREBY   KNOWINGLY,   VOLUNTARILY   AND
INTENTIONALLY  WAIVE ANY  RIGHTS  THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION  BASED HEREON,  OR ARISING OUT OF, UNDER, OR IN CONNECTION  WITH,
THIS FIRST  AMENDMENT  OR ANY OTHER  LOAN  DOCUMENT,  OR ANY COURSE OF  CONDUCT,
COURSE OF  DEALING,  STATEMENTS  (WHETHER  VERBAL OR  WRITTEN) OR ACTIONS OF THE
BORROWER OR THE BANK. THE BORROWER  ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT  CONSIDERATION  FOR THIS PROVISION (AND EACH OTHER PROVISION
OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL  INDUCEMENT  FOR THE  BORROWER  AND THE BANK  ENTERING  INTO THIS FIRST
AMENDMENT AND EACH SUCH OTHER LOAN DOCUMENT.





<PAGE>


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



SAUCONY, INC.

Borrower

By:   /s/ Charles A. Gottesman
Name: Charles A. Gottesman
Title: Executive Vice President



STATE STREET BANK AND TRUST COMPANY
Bank


By:  /s/ Kelley L. Rumps
Name: Kelley L. Rumps
Title:  Assistant Vice President




<PAGE>


                EXHIBIT AAMENDED AND RESTATED PROMISSORY NOTE

US$20,000,000
Boston, Massachusetts
                                                         March 12, 1999



     FOR  VALUE  RECEIVED,  the  undersigned,  Saucony,  Inc.,  a  Massachusetts
corporation  (the  "Borrower"),  hereby  promises  to pay to the  order of State
Street Bank and Trust Company,  at its offices at 225 Franklin  Street,  Boston,
Massachusetts  (the "Bank") the  principal sum of Twenty  Million  United States
Dollars  ($20,000,000) or, if less, the aggregate unpaid principal amount of all
Loans made by the Bank to the Borrower pursuant to the Credit Agreement referred
to below,  together with interest on the  outstanding  principal  amounts of the
Loans, at the rates,  on such dates and as otherwise  provided for in the Credit
Agreement.

     This Note is the Note  referred to in the  Revolving  Credit  Agreement (as
modified,  supplemented  or amended from time to time, the "Credit  Agreement"),
dated as of August 3 1, 1998,  by and between the  Borrower  and the Bank and is
subject to the  provisions  and  entitled to the  benefits  thereof.  Terms used
herein  which are  defined in the  Credit  Agreement  shall  have their  defined
meanings  when used herein.  As provided in the Credit  Agreement,  this Note is
subject to voluntary prepayment, in whole or in part.

     In case an Event of Default shall occur and be continuing, the principal of
and  accrued  interest  on this Note shall be, or may be declared to be, due and
payable in the manner and with the effect provided in the Credit Agreement.

      The Borrower hereby waives,  to the fullest extent permitted by applicable
law, presentment, demand, protest and all notices of any kind in connection with
this Note.

     This Note  amends  and  restates  the terms of that  Promissory  Note dated
August 31, 1998 (the "1998 Note") made by the Borrower to the order of the Bank,
which 1998 Note is superseded in its entirety hereby.  By accepting this Note or
canceling the 1998 Note,  the Bank does not waive any obligation of the Borrower
to the Bank under the 1998 Note,  nor shall the delivery or  acceptance  of this
Note be deemed to satisfy any such  obligation,  the intent of the parties being
to hereby amend and restate the agreed terms applicable to such obligations.

      This Note is executed as an instrument  under seal,  and shall be governed
by the laws of the Commonwealth of Massachusetts.




<PAGE>


     THE BORROWER HEREBY  KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY  WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE.



                                    SAUCONY, INC.



                                    By:  /s/ Charles A. Gottesman
                                    Name:  Charles A. Gottesman
                                    Title: Executive Vice President




<PAGE>


                 AMENDED AND RESTATED PROMISSORY NOTE

US$20,000,000
Boston,  Massachusetts  March  12,  1999FOR  VALUE  RECEIVED,  the  undersigned,
Saucony, Inc., a Massachusetts corporation (the "Borrower"),  hereby promises to
pay to the order of State Street Bank and Trust  Company,  at its offices at 225
Franklin Street, Boston,  Massachusetts (the "Bank") the principal sum of Twenty
Million United States Dollars  ($20,000,000)  or, if less, the aggregate  unpaid
principal  amount of all Loans made by the Bank to the Borrower  pursuant to the
Credit  Agreement  referred to below,  together with interest on the outstanding
principal  amounts of the Loans,  at the rates,  on such dates and as  otherwise
provided for in the Credit Agreement.

     This Note is the Note  referred to in the  Revolving  Credit  Agreement (as
modified,  supplemented  or amended from time to time, the "Credit  Agreement"),
dated as of August 3 1, 1998,  by and between the  Borrower  and the Bank and is
subject to the  provisions  and  entitled to the  benefits  thereof.  Terms used
herein  which are  defined in the  Credit  Agreement  shall  have their  defined
meanings  when used herein.  As provided in the Credit  Agreement,  this Note is
subject to voluntary prepayment, in whole or in part.

     In case an Event of Default shall occur and be continuing, the principal of
and  accrued  interest  on this Note shall be, or may be declared to be, due and
payable in the manner and with the effect provided in the Credit Agreement.

      The Borrower hereby waives,  to the fullest extent permitted by applicable
law, presentment, demand, protest and all notices of any kind in connection with
this Note.

     This Note  amends  and  restates  the terms of that  Promissory  Note dated
August 31, 1998 (the "1998 Note") made by the Borrower to the order of the Bank,
which 1998 Note is superseded in its entirety hereby.  By accepting this Note or
canceling the 1998 Note,  the Bank does not waive any obligation of the Borrower
to the Bank under the 1998 Note,  nor shall the delivery or  acceptance  of this
Note be deemed to satisfy any such  obligation,  the intent of the parties being
to hereby amend and restate the agreed terms applicable to such obligations.

      This Note is executed as an instrument  under seal,  and shall be governed
by the laws of the Commonwealth of Massachusetts.




<PAGE>


      THE BORROWER HEREBY KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY  WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE.



                                    SAUCONY, INC.



                                    By: /s/ Charles A. Gottesman
                                    Name:  Charles A. Gottesman
                                    Title:  Executive Vice President