Exhibit 10(xii)

                           REVOLVING CREDIT AGREEMENT

                          Dated as of January 19, 2000

                                      among

                         THE STRIDE RITE CORPORATION,




                      the BANKS listed on Schedule 1 hereto

                                       and

                              BANKBOSTON, N.A.,
                             as Agent for the Banks

                                      with

                      BANCBOSTON ROBERTSON STEPHENS INC.
                            having acted as Arranger

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                           REVOLVING CREDIT AGREEMENT

      This  REVOLVING  CREDIT  AGREEMENT is made as of January 19, 2000,  by and
among The Stride Rite Corporation, (the "Borrower"), a Massachusetts corporation
having  its  principal  place  of  business  at 191  Spring  Street,  Lexington,
Massachusetts 02421, and BankBoston,  N.A., a national banking association,  and
the other lending  institutions  listed on Schedule 1, and  BankBoston,  N.A. as
agent for itself and such other lending institutions.

                 1.  DEFINITIONS AND RULES OF INTERPRETATION.

      1.1. Definitions. The following terms shall have the meanings set forth in
this Section 1 or elsewhere in the provisions of this Credit Agreement referred
to below:

      Accounts Receivable. All rights of the Borrower or any of its Subsidiaries
to payment for goods sold,  leased or otherwise  marketed in the ordinary course
of business and all rights of the Borrower or any of its Subsidiaries to payment
for services  rendered in the ordinary  course of business and all sums of money
or other proceeds due thereon  pursuant to  transactions  with account  debtors,
except for that  portion of the sum of money or other  proceeds due thereon that
relate to sales,  use or property taxes in conjunction  with such  transactions,
recorded on books of account in accordance  with generally  accepted  accounting
principles.

      Additional Bank.  See Section 2.4.3.

      Affiliate.  Any Person that would be  considered to be an affiliate of the
Borrower  under Rule 144(a) of the Rules and  Regulations  of the Securities and
Exchange  Commission,  as in effect on the date  hereof,  if the  Borrower  were
issuing securities.

      Adjustment  Date.  The  first  day of  the  calendar  month  immediately
following  the month in which a  Compliance  Certificate  is  delivered by the
Borrower pursuant to Section 7.4(c).

      Agent.  BankBoston, N.A. acting as agent for the Banks.

      Agent's  Head  Office.  The  Agent's  head  office  located at 100 Federal
Street, Boston,  Massachusetts 02110, or at such other location as the Agent may
designate from time to time.

      Agent's Special  Counsel.  Bingham Dana LLP or such other counsel as may
be approved by the Agent.

      Applicable Pricing.  With respect to the LIBOR Rate, the Facility Fee, and
Letter of Credit  Fees,  the rate per annum  specified in the table below as the
LIBOR Margin, Facility Fee Rate and Letter of Credit Rate, respectively,  in the
Rate Level row opposite the Fixed  Charge  Coverage  Ratio as of the last day of
the most recent fiscal  quarter for which the Borrower has  delivered  financial
statements pursuant to Section.7.4 and the related Compliance Certificate of the
Borrower referred to in Section.7.4(c):

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      ---------------------------------------------------------------

                                              Facility    Letter of

      Rate    Fixed Charge          LIBOR     Fee         Credit
      Level   Coverage Ratio        Margin    Rate        Rate
      ---------------------------------------------------------------

      1       Less than 2.35:1      0.825%    0.425%      0.875%
      ---------------------------------------------------------------

      2       equal  to or  greater 0.625%    0.375%      0.750%
              than  2.35:1 and less
              than 3.50:1
      ---------------------------------------------------------------

      3       equal  to or  greater 0.425%    0.325%      0.625%
              than 3.50:1
      ---------------------------------------------------------------

provided, however, that the LIBOR Margin, Facility Fee Rate and Letter of Credit
Rate  shall not be less than as set forth in Rate  Level 2 above for the  period
commencing  on the date hereof and ending on July 15, 2000.  For the purposes of
this  Credit  Agreement,  any  change in the  Applicable  Pricing  shall  become
effective on the  Adjustment  Date.  If the  Borrower  shall fail to deliver the
financial  statements  referred  to in Section  7.4 and the  related  Compliance
Certificate referred to in Section.7.4(c)  indicating such Fixed Charge Coverage
Ratio, then the Applicable Pricing shall automatically,  and without any further
act of the Agent,  equal the highest  Applicable  Pricing set forth in the table
above.

      Arranger.  BancBoston  Robertson  Stephens  Inc.,  in  its  capacity  as
arranger of the credit facilities provided under the Loan Documents.

      Assignment and Acceptance.  Section 18.1.

      Balance Sheet Date.  December 3, 1999.

      Banks. BKB and the other lending institutions listed on Schedule 1 hereto,
as it may be  amended  from  time to  time  by the  addition  of  other  lending
institutions  pursuant  to Section  2.4,  and any other  Person  who  becomes an
assignee of any rights and obligations of a Bank pursuant to Section 18.

      Base Rate.  The higher of (i) the annual rate of interest  announced  from
time to time by BKB at its head  office in Boston,  Massachusetts,  as its "base
rate" and (ii) one-half of one percent (0.50%) above the Federal Funds Effective
Rate. For the purposes of this definition,  "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted  average of the rates
on overnight  federal  funds  transactions  with members of the Federal  Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next  preceding  Business Day) by the Federal
Reserve Bank of New York,  or, if such rate is not so published for any day that
is a  Business  Day,  the  average  of the  quotations  for  such  day  on  such
transactions  received  by the Agent from  three  funds  brokers  of  recognized
standing selected by the Agent.

      Base Rate Loans.  Loans bearing interest  calculated by reference to the
Base Rate.



<PAGE>

      BKB.  BankBoston,   N.A.,  a  national  banking   association,   in  its
individual capacity.

      Borrower.  As defined in the preamble hereto.

      Business   Day.  Any  day  on  which  banking   institutions   in  Boston,
Massachusetts,  and New York, New York, are open for the  transaction of banking
business and, in the case of LIBOR Rate Loans,  also a day which is a Eurodollar
Business Day.

      Capital  Assets.  Fixed assets,  both tangible  (such as land,  buildings,
fixtures,  machinery and equipment) and intangible (such as patents, copyrights,
trademarks,  franchises  and good will);  provided that Capital Assets shall not
include any item  customarily  charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally  accepted
accounting principles.

      Capital  Expenditures.  Amounts  paid  or  Indebtedness  incurred  by  the
Borrower or any of its Subsidiaries in connection with (i) the purchase or lease
by the  Borrower  or any of its  Subsidiaries  of Capital  Assets  that would be
required  to be  capitalized  and shown on the  balance  sheet of such Person in
accordance with generally  accepted  accounting  principles or (ii) the lease of
any  assets by the  Borrower  or any of its  Subsidiaries  as  lessee  under any
synthetic  lease  referred  to in  clause  (vi) of the  definition  of the  term
Indebtedness  to the extent that such assets would have been Capital  Assets had
the synthetic lease been treated for accounting purposes as a Capitalized Lease.

      Capitalized  Leases.  Leases  under  which  the  Borrower  or  any  of its
Subsidiaries  is the lessee or obligor,  the  discounted  future rental  payment
obligations  under which are required to be  capitalized on the balance sheet of
the  lessee  or  obligor  in  accordance  with  generally  accepted   accounting
principles.

      CERCLA.  See Section 6.17(a).

      Closing Date.  The first date on which the conditions set forth in Section
10 have been  satisfied  and any Loans are to be made or any Letter of Credit is
to be issued hereunder.

      Code.  The Internal Revenue Code of 1986, as amended.

      Commitment.  With respect to each Bank, the amount set forth on Schedule 1
hereto  as the  amount  of such  Bank's  commitment  to make  Loans  to,  and to
participate in the issuance,  extension and renewal of Letters of Credit for the
account of, the  Borrower,  as the same may be reduced from time to time;  or if
such commitment is terminated pursuant to the provisions hereof, zero.

      Commitment Increase Request.  See  Section 2.4.1.



<PAGE>

      Commitment  Percentage.  With respect to each Bank,  the  percentage set
forth  on  Schedule 1  hereto  as  such  Bank's  percentage  of the  aggregate
Commitments of all of the Banks.

      Competitive  Bid  Loans.  Revolving  credit  loans made  hereunder  to the
Borrower by any of the Banks,  such loan or loans on any single  occasion  being
made by one or more of the Banks whose offer to make a revolving  credit loan as
a part of the requested  Competitive Bid Loan on such occasion has been accepted
by the Borrower under the auction bidding procedure described in Section 2.9.

      Competitive Bid Note.  See Section 2.9.1(b).

      Competitive  Bid  Quote.  An offer by a Bank to make a  Competitive  Bid
Loan in accordance with Section 2.9.

      Competitive Bid Quote Request.  See Section 2.9.1(c).

      Competitive Bid Rate.  See Section 2.9.1(e)(ii)(C).

      Compliance Certificate.  See Section 7.4(d).

      Consolidated or  consolidated.  With reference to any term defined herein,
shall  mean  that  term as  applied  to the  accounts  of the  Borrower  and its
Subsidiaries,  consolidated  in accordance  with generally  accepted  accounting
principles.

      Consolidated  EBITDA. The consolidated  earnings (or loss) from operations
(excluding all extraordinary and nonrecurring items of income (or loss, but only
to the extent not involving cash charges)) of the Borrower and its  Subsidiaries
for any period,  after all expenses and other proper  charges but before payment
or  provision  for any income taxes or interest  expense for such  period,  plus
depreciation,  amortization and all other nonrepetitive noncash charges for such
period (including without limitation noncash charges relating to the granting or
repricing of stock  options),  all as determined in  accordance  with  generally
accepted accounting principles.

      Consolidated  Net Income (or  Deficit).  The  consolidated  net income (or
deficit) of the Borrower and its Subsidiaries,  after deduction of all expenses,
taxes,  and other  proper  charges,  determined  in  accordance  with  generally
accepted accounting  principles,  after eliminating  therefrom all extraordinary
nonrecurring items of income.

      Consolidated  Operating Cash Flow. For any period,  an amount equal to (i)
the sum of (A) Consolidated EBITDA for such period, plus (B) Includable Interest
Income for such  period,  less (ii) to the extent not  already  deducted  in the
determination  of Consolidated  EBITDA,  Capital  Expenditures  made during such
period.

      Consolidated  Tangible  Net  Worth.  The  excess of  Consolidated  Total
Assets over Consolidated Total Liabilities, and less the sum of:



<PAGE>

      (a)  the  total  book  value  of  all  assets  of  the  Borrower  and  its
Subsidiaries  properly  classified as intangible assets under generally accepted
accounting principles,  including such items as good will, the purchase price of
acquired  assets in excess of the fair market value thereof,  trademarks,  trade
names, service marks, brand names, copyrights,  patents and licenses, and rights
with respect to the foregoing;

      (b) all amounts  representing any write-up in the book value of any assets
of the  Borrower  or its  Subsidiaries  resulting  from  a  revaluation  thereof
subsequent to the Balance Sheet Date (excluding adjustments to translate foreign
assets and liabilities for changes in foreign  exchange rates made in accordance
with Financial Accounting Standards Board Statement No. 52); and

      (c) to the extent otherwise  includable in the computation of Consolidated
Tangible Net Worth, any subscriptions receivable.

      Consolidated  Total  Assets.  The  sum of (i)  all  assets  ("consolidated
balance  sheet  assets") of the Borrower and its  Subsidiaries  determined  on a
consolidated basis in accordance with generally accepted accounting  principles,
plus  (ii)  without  duplication,  all  assets  leased  by the  Borrower  or any
Subsidiary as lessee under any synthetic lease referred to in clause (vi) of the
definition  of the term  Indebtedness  to the extent that such assets would have
been consolidated  balance sheet assets had the synthetic lease been treated for
accounting purposes as a Capitalized Lease, plus (iii) without duplication,  all
sold  receivables  referred  to in clause  (vii) of the  definition  of the term
Indebtedness to the extent that such  receivables  would have been  consolidated
balance sheet assets had they not been sold.

      Consolidated Total Interest Expense.  For any period, the aggregate amount
of interest  required to be paid or accrued by the Borrower and its Subsidiaries
during such period on all  Indebtedness  of the  Borrower  and its  Subsidiaries
outstanding during all or any part of such period,  whether such interest was or
is  required to be  reflected  as an item of expense or  capitalized,  including
payments  consisting  of interest in respect of any  Capitalized  Lease,  or any
synthetic  lease  referred  to in  clause  (vi) of the  definition  of the  term
Indebtedness.

      Consolidated  Total  Liabilities.  All liabilities of the Borrower and its
Subsidiaries  determined on a  consolidated  basis in accordance  with generally
accepted  accounting  principles  and  classified  as such  on the  consolidated
balance sheet of the Borrower and its Subsidiaries.

      Conversion  Request.  A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Loan in accordance with Section
2.8.

      Credit  Agreement.  This  Revolving  Credit  Agreement,   including  the
Schedules and Exhibits hereto.

      Default.  See Section 12.1.

      Delinquent Bank.  See Section 14.5.3.



<PAGE>

      Distribution.  The declaration or payment of any dividend on or in respect
of any  shares  of any  class of  capital  stock  of the  Borrower,  other  than
dividends  payable  solely  in  shares  of  common  stock of the  Borrower;  the
purchase,  redemption, or other retirement of any shares of any class of capital
stock of the  Borrower,  directly  or  indirectly  through a  Subsidiary  of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other  distribution  on or in respect of any shares of any class
of capital stock of the Borrower.

      Dollars or $. Dollars in lawful currency of the United States of America.

      Drawdown Date.  The date on which any Syndicated  Loan is made or is to be
made,  and the date on which any  Syndicated  Loan is  converted or continued in
accordance with Section 2.8.

      EBIT.  With respect to any Person,  the earnings (or loss) from operations
of such Person (excluding all extraordinary and nonrecurring items of income (or
loss, but only to the extent not involving cash charges)) for any period,  after
all expenses and other proper  charges but before  payment or provision  for any
income  taxes  or  interest  expense  for  such  period,  all as  determined  in
accordance with generally accepted accounting principles.

      Eligible  Assignee.  Any of  (i) a  commercial  bank  or  finance  company
organized  under the laws of the  United  States,  or any State  thereof  or the
District of Columbia, and having total assets in excess of $1,000,000,000;  (ii)
a savings and loan  association or savings bank organized  under the laws of the
United  States,  or any State thereof or the District of Columbia,  and having a
net worth of at least  $100,000,000,  calculated  in accordance  with  generally
accepted accounting principles; (iii) a commercial bank organized under the laws
of any  other  country  which  is a  member  of the  Organization  for  Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
bank is acting  through a branch or agency located in the country in which it is
organized  or  another  country  which is also a member  of the  OECD;  (iv) the
central bank of any country which is a member of the OECD;  and (v) if, but only
if,  any Event of  Default  has  occurred  and is  continuing,  any other  bank,
insurance  company,  commercial  finance company or other financial  institution
approved by the Agent, such approval not to be unreasonably withheld.

      Employee  Benefit  Plan.  Any employee  benefit plan within the meaning of
Section 3(3) of ERISA  maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.

      Environmental Laws.  See Section 6.17(a).

      EPA.  See Section 6.17(b).

      ERISA.  The Employee Retirement Income Security Act of 1974, as amended.



<PAGE>

      ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under Section 414 of the Code.

      ERISA  Reportable  Event. A reportable  event with respect to a Guaranteed
Pension  Plan  within the meaning of Section  4043 of ERISA and the  regulations
promulgated thereunder.

      Eurocurrency  Reserve Rate. For any day with respect to a LIBOR Rate Loan,
the maximum rate  (expressed as a decimal) at which any lender  subject  thereto
would be  required  to  maintain  reserves  under  Regulation  D of the Board of
Governors of the Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements)  against  "Eurocurrency  Liabilities" (as
that term is used in Regulation D), if such  liabilities were  outstanding.  The
Eurocurrency  Reserve  Rate  shall be  adjusted  automatically  on and as of the
effective date of any change in the Eurocurrency Reserve Rate.

      Event of Default.  See Section 12.1.

      Facility Fee.  See  Section 2.2.

      Facility Fee Rate.  See definition of Applicable Pricing.

      Fixed Charge Coverage Ratio.  See Section 9.1.

      generally  accepted  accounting  principles.  (i) When used in  Section 9,
whether  directly or indirectly  through  reference to a  capitalized  term used
therein,   means  (A)  principles   that  are  consistent  with  the  principles
promulgated  or  adopted by the  Financial  Accounting  Standards  Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(B) to the extent  consistent with such principles,  the accounting  practice of
the Borrower  reflected in its  financial  statements  for the year ended on the
Balance Sheet Date, and (ii) when used in general, other than as provided above,
means  principles  that are (A) consistent  with the  principles  promulgated or
adopted by the Financial Accounting Standards Board and its predecessors,  as in
effect  from time to time,  and (B)  consistently  applied  with past  financial
statements of the Borrower  adopting the same principles,  provided that in each
case  referred  to  in  this  definition  of  "generally   accepted   accounting
principles"  a certified  public  accountant  would,  insofar as the use of such
accounting  principles is pertinent,  be in a position to deliver an unqualified
opinion  (other than a  qualification  regarding  changes in generally  accepted
accounting  principles) as to financial statements in which such principles have
been properly applied.

      Guaranteed  Pension  Plan.  Any employee  pension  benefit plan within the
meaning of Section 3(2)of ERISA  maintained or contributed to by the Borrower or
any ERISA  Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.

      Guaranty.  The Guaranty referred to in Section 5.13, in the form of
Exhibit B hereto, made by each Significant Subsidiary of the Borrower in favor
of the

<PAGE>

      Banks and the Agent  pursuant to which such  Subsidiary  guaranties to the
Banks and the Agent the payment and performance of the Obligations.

      Hazardous Substances.  See Section 6.17(b).

      Includable  Interest Income. For any period, (i) interest income earned on
cash balances of the Borrower and its Subsidiaries, less (ii) an amount equal to
$10,000,000  multiplied  by the  average  thirty (30) day LIBOR Rate during such
period.

      Indebtedness.  As to any Person and  whether  recourse is secured by or is
otherwise  available  against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:

      (i) every  obligation  of such  Person  for  money  borrowed  (other  than
obligations  in  respect  of  borrowings  against  the cash  value of  insurance
policies  owned by such  Person,  provided  that  such  obligations  do not have
enforcement recourse to other assets of such Person),

      (ii) every obligation of such Person evidenced by bonds, debentures, notes
or other similar instruments,  including obligations incurred in connection with
the acquisition of property, assets or businesses,

      (iii)  every  reimbursement  obligation  of such  Person  with  respect to
letters of credit,  bankers'  acceptances or similar  facilities  issued for the
account of such Person,

      (iv) every  obligation  of such Person  issued or assumed as the  deferred
purchase  price  of  property  or  services  (including   securities  repurchase
agreements but excluding trade accounts payable or accrued  liabilities  arising
in the  ordinary  course of  business  which are not  overdue or which are being
contested in good faith),

      (v)   every obligation of such Person under any Capitalized Lease,

      (vi)  every  obligation  of such  Person  under any lease (a  "synthetic
lease")  treated as an operating  lease under  generally  accepted  accounting
principles and as a loan or financing for U.S. income tax purposes,

      (vii) all sales by such Person of (A) accounts or general  intangibles for
money due or to become due, (B) chattel paper, instruments or documents creating
or evidencing a right to payment of money or (C) other receivables (collectively
"receivables"), whether pursuant to a purchase facility or otherwise, other than
in connection  with the  disposition  of the business  operations of such Person
relating  thereto or a disposition of defaulted  receivables  for collection and
not as a financing arrangement,  and together with any obligation of such Person
to pay any discount, interest, fees, indemnities,  penalties, recourse, expenses
or other amounts in connection therewith,

      (viii)  every  obligation  of such  Person (an  "equity  related  purchase
obligation")  to purchase,  redeem,  retire or  otherwise  acquire for value any
shares of capital stock of any class issued by such Person, any

<PAGE>

      warrants,  options or other  rights to  acquire  any such  shares,  or any
rights measured by the value of such shares, warrants, options or other rights,

      (ix) every obligation of such Person under any forward  contract,  futures
contract,  swap, option or other financing agreement or arrangement  (including,
without limitation,  caps, floors, collars and similar agreements), the value of
which is dependent upon interest rates, currency exchange rates,  commodities or
other indices (a "derivative contract"),

      (x) every  obligation  in  respect  of  Indebtedness  of any other  entity
(including  any  partnership  in which such Person is a general  partner) to the
extent  that  such  Person  is  liable  therefor  as a result  of such  Person's
ownership  interest in or other  relationship  with such  entity,  except to the
extent  that the terms of such  Indebtedness  provide  that  such  Person is not
liable therefor and such terms are enforceable under applicable law,

      (xi)  every   obligation,   contingent  or   otherwise,   of  such  Person
guarantying, or having the economic effect of guarantying or otherwise acting as
surety for, any obligation of a type described in any of clauses (i) through (x)
(the "primary  obligation")  of another Person (the "primary  obligor"),  in any
manner, whether directly or indirectly,  and including,  without limitation, any
obligation of such Person (A) to purchase or pay (or advance or supply funds for
the purchase of) any security for the payment of such primary obligation, (B) to
purchase  property,  securities  or services  for the  purpose of  assuring  the
payment of such primary obligation,  or (C) to maintain working capital,  equity
capital or other  financial  statement  condition  or  liquidity  of the primary
obligor so as to enable the primary obligor to pay such primary obligation.

      The  "amount" or  "principal  amount" of any  Indebtedness  at any time of
determination  represented  by (u) any  Indebtedness,  issued at a price that is
less than the principal amount at maturity  thereof,  shall be the amount of the
liability in respect thereof  determined in accordance  with generally  accepted
accounting  principles,  (v)  any  Capitalized  Lease  shall  be  the  principal
component of the  aggregate  of the rentals  obligation  under such  Capitalized
Lease  payable over the term thereof that is not subject to  termination  by the
lessee,  (w) any sale of receivables shall be the amount of unrecovered  capital
or principal  investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest  earned  on such  investment,  (x) any  synthetic  lease  shall  be the
stipulated loss value,  termination  value or other equivalent  amount,  (y) any
derivative  contract  shall be the  maximum  amount of any  termination  or loss
payment required to be paid by such Person if such derivative  contract were, at
the time of determination, to be terminated by reason of any event of default or
early  termination  event  thereunder,  whether  or not such event of default or
early termination event has in fact occurred and (z) any equity related purchase
obligation  shall be the maximum  fixed  redemption  or purchase  price  thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price.

<PAGE>

      Ineligible  Securities.  Securities which may not be underwritten or dealt
in by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.

      Interest  Payment Date.  (i) As to any Base Rate Loan, the last day of the
calendar quarter with respect to interest accrued during such calendar  quarter,
including  without  limitation the calendar  quarter which includes the Drawdown
Date of such Base Rate  Loan;  and (ii) as to any LIBOR  Rate Loan in respect of
which the Interest Period is (A) 3 months or less, the last day of such Interest
Period and (B) more than 3 months,  the date that is 3 months from the first day
of such Interest Period and, in addition, the last day of such Interest Period.

      Interest  Period.  With  respect  to each Loan (i)  initially,  the period
commencing  on the Drawdown  Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in a Loan Request or
as otherwise  required by the terms of this Credit  Agreement:  (A) for any Base
Rate Loan, the last day of the calendar quarter; (B) for any LIBOR Rate Loan, 1,
2, 3 or 6 months;  (C) for any Competitive Bid Loan, from 10 to 90 days, and (D)
for any Swing Line Loan,  from 1 to 30 days;  and (ii)  thereafter,  each period
commencing on the last day of the next preceding  Interest Period  applicable to
such Loan and ending on the last day of one of the periods set forth  above,  as
selected  by the  Borrower in a  Conversion  Request;  provided  that all of the
foregoing provisions relating to Interest Periods are subject to the following:

      (a) if any  Interest  Period  with  respect  to a LIBOR  Rate  Loan  would
otherwise end on a day that is not a LIBOR  Business  Day, that Interest  Period
shall be extended to the next succeeding LIBOR Business Day unless the result of
such  extension  would be to carry such  Interest  Period into another  calendar
month,  in  which  event  such  Interest  Period  shall  end on the  immediately
preceding LIBOR Business Day;

      (b) if any Interest Period with respect to a Base Rate Loan would end on a
day that is not a  Business  Day,  that  Interest  Period  shall end on the next
succeeding Business Day;

      (c) if the Borrower  shall fail to give notice as provided in Section 2.8,
the  Borrower  shall be deemed to have  requested a  conversion  of the affected
LIBOR Rate Loan to a Base Rate Loan and the  continuance  of all Base Rate Loans
as Base Rate  Loans on the last day of the then  current  Interest  Period  with
respect thereto;

      (d) any Interest Period relating to any LIBOR Rate Loan that begins on the
last LIBOR  Business Day of a calendar  month (or on a day for which there is no
numerically  corresponding day in the calendar month at the end of such Interest
Period) shall end on the last LIBOR Business Day of a calendar month; and

      (e) any Interest  Period that would  otherwise  extend beyond the Maturity
Date shall end on the Maturity Date.

<PAGE>

      International  Standby  Practices.  With respect to any standby  Letter of
Credit,  International  Standby  Practices  (ISP98),  International  Chamber  of
Commerce  Publication No. 590, or any successor code of standby letter of credit
practices  among  banks  adopted  by the  Agent in the  ordinary  course  of its
business  as a  standby  letter of  credit  issuer  and in effect at the time of
issuance of such Letter of Credit.

      Investments.   All   expenditures   made  and  all  liabilities   incurred
(contingently  or  otherwise)  for the  acquisition  of stock,  other  equity or
Indebtedness of, or for loans,  advances,  capital contributions or transfers of
property to, or in respect of any guaranties (or other  commitments as described
under Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments  outstanding at any particular time: (i) the amount of any
Investment  represented  by a  guaranty  shall be  taken  at not  less  than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be  included  as an  Investment  all  interest  accrued  with  respect  to
Indebtedness  constituting an Investment unless and until such interest is paid;
(iii)  there shall be  deducted  in respect of each such  Investment  any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment,  liquidating dividend or liquidating distribution);  (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such  Investment,  whether as  dividends,  interest  or  otherwise,  except that
accrued  interest  included  as  provided  in the  foregoing  clause (ii) may be
deducted  when paid;  and (v) there  shall not be  deducted  from the  aggregate
amount of Investments any decrease in the value thereof.

      Letter of Credit.  See Section 4.1.1.

      Letter of Credit Application.  See Section 4.1.

      Letter of Credit Fee.  See Section 4.6.

      Letter of Credit Participation.  See Section 4.1.4.

      Letter of Credit Rate.  See definition of Applicable Pricing.

      LIBOR  Business  Day.  Any day on  which  commercial  banks  are  open for
international business (including dealings in Dollar deposits) in London or such
other  eurodollar  interbank  market as may be selected by the Agent in its sole
discretion acting in good faith.

      LIBOR Margin.  See definition of Applicable Pricing.

      LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan, the
rate of interest  equal to (i) the rate  determined by the Agent at which Dollar
deposits for such Interest Period are offered based on information  presented on
Telerate Page 3750 as of 11:00 a.m. London time on the second LIBOR Business Day
prior to the first day of such Interest  Period,  divided by (ii) a number equal
to 1.00 minus the eurocurrency Reserve Rate, if applicable.

<PAGE>

      LIBOR Rate Loans.  Loans  bearing  interest  calculated  by reference to
the LIBOR Rate.

      Loan Documents.  This Credit Agreement,  the Notes, the Letter of Credit
Applications, the Letters of Credit and the Guaranties.

      Loan Request.  See Section 2.6.

      Loans.  Revolving  credit  loans  made or to be made by the  Banks  to the
Borrower  pursuant to Section 2, whether  Syndicated  Loans or  Competitive  Bid
Loans, and Swing Line Loans made by BKB pursuant to Section 2.10.

      Majority  Banks.  As of any date,  the Banks whose  aggregate  Commitments
constitute at least fifty percent (50%) of the Total  Commitment;  and after the
Total Commitment has been  terminated,  the Banks holding at least fifty percent
(50%) of the outstanding principal amount of the Loans on such date.

      Maturity  Date.  The third  anniversary  of the Closing Date or, if such
date is not a Business Day, the Business Day next preceding such anniversary.

      Maximum   Drawing   Amount.   The  maximum   aggregate   amount  that  the
beneficiaries may at any time draw under outstanding  Letters of Credit, as such
aggregate  amount may be reduced from time to time  pursuant to the terms of the
Letters of Credit.

      Multiemployer  Plan.  Any  multiemployer  plan  within  the  meaning  of
Section 3(37) of ERISA  maintained  or  contributed  to by the  Borrower or any
ERISA Affiliate.

      Notes.  The Revolving  Credit Notes,  the  Competitive Bid Notes and the
Swing Line Notes, or, when used in the singular, any of such Notes.

      Note Record.  A Record with respect to a Note.

      Obligations.  All indebtedness,  obligations and liabilities of any of the
Borrower and its Subsidiaries to any of the Banks and the Agent, individually or
collectively,  existing  on  the  date  of  this  Credit  Agreement  or  arising
thereafter,  direct or  indirect,  joint or  several,  absolute  or  contingent,
matured or unmatured, liquidated or unliquidated,  secured or unsecured, arising
by  contract,  operation  of law or  otherwise,  arising or incurred  under this
Credit  Agreement or any of the other Loan Documents or in respect of any of the
Loans made or Reimbursement  Obligations incurred or any of the Notes, Letter of
Credit Application, Letter of Credit or other instruments at any time evidencing
any thereof.

      outstanding.  With respect to the Loans,  the aggregate unpaid principal
thereof as of any date of determination.

      PBGC.  The  Pension  Benefit  Guaranty  Corporation  created byss.4002 of
ERISA and any successor entity or entities having similar responsibilities.

      Perfection  Certificates.  The Perfection Certificates as defined in the
Security Agreements.



<PAGE>

      Permitted Acquisition.  See Section 8.5.3.

      Permitted Distributions.  See Section 8.4.

      Permitted  Liens.  Liens,  security  interests  and  other  encumbrances
permitted by Section 8.2.

      Person.  Any  individual,  corporation,   partnership,  limited  liability
company, trust, unincorporated association, business, or other legal entity, and
any government or any governmental agency or political subdivision thereof.

      RCRA.  See Section 6.17(a).

      Real  Estate.  All real  property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.

      Record.  The grid attached to a Note, or the continuation of such grid, or
any other similar record,  including  computer  records,  maintained by any Bank
with respect to any Loan referred to in such Note.

      Register.  See  Section 18.3.

      Reimbursement  Obligation.  The  Borrower's  obligation to reimburse the
Agent and the Banks on  account of any  drawing  under any Letter of Credit as
provided in Section 4.2.

      Rental  Expense.  For any period,  all obligations of the Borrower and its
Subsidiaries under any rental agreements or leases of real property,  other than
(i) obligations that can be terminated by the giving of notice without liability
to the Borrower or such Subsidiary in excess of the liability for rent due as of
the date on which such  notice is given and under which no penalty or premium is
paid as a result of any such termination, and (ii) obligations in respect of any
Capitalized Leases.

      Revolving  Credit  Note  Record.  A Record  with  respect to a Revolving
Credit Note.

      Revolving Credit Notes.  See Section 2.5.

      SARA.  See Section 6.17(a).

      Section  20  Subsidiary.   A  Subsidiary  of  the  bank  holding   company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.  The term
includes BancBoston Robertson Stephens Inc.

      Significant Subsidiary.  Any Subsidiary of the Borrower (a) the book value
of the total assets of which, as of the Balance Sheet Date or of the last day of
the most recent fiscal period for which financial statements have been furnished
pursuant to ss.7.4,  equals or exceeds $5,000,000,  or (b) the EBIT of which for
the fiscal  period then ended equals or exceeds 5% of the  Consolidated  EBIT of
the Borrower and its Subsidiaries; provided that, if all

<PAGE>

      Subsidiaries  of the  Borrower  which  are  not  Significant  Subsidiaries
pursuant to the foregoing test (the "Excluded  Subsidiaries")  have an aggregate
EBIT for the fiscal period then ended exceeding 15% of the Consolidated  EBIT of
the  Borrower  and its  Subsidiaries,  then one or more of the largest  Excluded
Subsidiaries shall be deemed  Significant  Subsidiaries until the aggregate EBIT
of the Excluded Subsidiaries does not exceed such limit.

      Subsidiary. Any corporation,  association, trust, or other business entity
of which the  designated  parent  shall at any time own  directly or  indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.

      Substantially the Same Business.  With respect to the businesses conducted
by the  Borrower and its  Subsidiaries,  such  businesses  conducted on the date
hereof and other marketing and retail lines of business.

      Swing Line Loan Maturity  Date.  With respect to any Swing Line Loan,  the
date specified by the Borrower in the Swing Line Loan Request  relating  thereto
as the maturity  date of such Swing Line Loan,  which in no event shall be later
than the  earlier to occur of (i) thirty  (30) days after the  Drawdown  Date of
such Swing Line Loan and (ii) the Maturity Date.

      Swing Line Loan Request.  See Section 2.10.1.

      Swing Line Loans.  See Section 2.10.1.

      Swing Line Note.  See Section 2.10.5.

      Swing Line Rate.  A fixed rate per annum  quoted by BKB in its  discretion
pursuant to Section  2.10.2,  such rate not to exceed the Base Rate in effect on
the date of quotation.

      Syndicated   Loans.   Revolving  credit  loans  made  by  the  Banks  in
accordance with their respective Commitment Percentages pursuant to Section 2.1.

      Total  Commitment.  The  sum of the  Commitments  of  the  Banks,  as in
effect from time to time.

      Total  Funded Debt.  As of any date of  determination,  on a  consolidated
basis in accordance with generally  accepted  accounting  principles,  an amount
equal to the sum of (a) all  Indebtedness  of the Borrower and its  Subsidiaries
relating  to the  borrowing  of money or the  utilization  of credit  (including
letters of credit, other than (i) documentary letters of credit and (ii) standby
letters of credit to the extent the same support Indebtedness otherwise included
in  Total  Funded  Debt),  and  (b)  all  obligations  of the  Borrower  and its
Subsidiaries in respect of Capitalized Leases.

      Type.  As to any  Syndicated  Loan,  its nature as a Base Rate Loan or a
LIBOR Rate Loan.

      Uniform  Customs.  With  respect to any Letter of  Credit,  the  Uniform
Customs and Practice for Documentary  Credits (1993  Revision),  International
Chamber of Commerce Publication No. 500 or any successor version thereto

<PAGE>

      adopted by the Agent in the ordinary course of its business as a letter of
credit issuer and in effect at the time of issuance of such Letter of Credit.

      Unpaid Reimbursement  Obligation.  Any Reimbursement  Obligation for which
the Borrower does not  reimburse  the Agent and the Banks on the date  specified
in, and in accordance with Section 4.2.

      Utilization Fee.  See Section 2.2.

      Voting Stock. Stock or similar interests, of any class or classes (however
designated),  the holders of which are at the time entitled, as such holders, to
vote for the  election of a majority  of the  directors  (or persons  performing
similar  functions) of the  corporation,  association,  trust or other  business
entity  involved,  whether  or not the right so to vote  exists by reason of the
happening of a contingency.

      1.2.  Rules of Interpretation.

      (a) A reference to any document or agreement  shall  include such document
or  agreement  as  amended,  modified  or  supplemented  from  time  to  time in
accordance with its terms and the terms of this Credit Agreement.

      (b)   The  singular  includes  the plural and the  plural  includes  the
singular.

      (c)   A reference to any law includes any amendment or  modification  to
such law.

      (d)   A reference to any Person  includes its permitted  successors  and
permitted assigns.

      (e)  Accounting  terms not  otherwise  defined  herein  have the  meanings
assigned  to them by  generally  accepted  accounting  principles  applied  on a
consistent basis by the accounting entity to which they refer.

      (f)   The words "include", "includes" and "including" are not limiting.

      (g) All terms not  specifically  defined  herein or by generally  accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in effect in the Commonwealth of  Massachusetts,  have the meanings  assigned to
them therein,  with the term "instrument"  being that defined under Article 9 of
the Uniform Commercial Code.

      (h)  Reference  to a particular  "Section"  refers to that section of this
Credit Agreement unless otherwise indicated.

      (i) The words  "herein",  "hereof",  "hereunder"  and words of like import
shall  refer  to this  Credit  Agreement  as a whole  and not to any  particular
section or subdivision of this Credit Agreement.

      (j) Unless otherwise expressly indicated, in the computation of periods of
time from a specified date to a later specified date, the word

<PAGE>

      "from"  means "from and  including,"  the words "to" and "until" each mean
"to but excluding," and the word "through" means "to and including."

      (k) This Credit  Agreement  and the other Loan  Documents  may use several
different  limitations,  tests or  measurements  to regulate the same or similar
matters. All such limitations,  tests and measurements are, however,  cumulative
and are to be performed in accordance with the terms thereof.

      (l) This Credit  Agreement and the other Loan  Documents are the result of
negotiation among, and have been reviewed by counsel to, among others, the Agent
and the Borrower and are the product of discussions and  negotiations  among all
parties. Accordingly, this Credit Agreement and the other Loan Documents are not
intended to be construed against the Agent or any of the Banks merely on account
of the Agent's or any Bank's involvement in the preparation of such documents.

                         2.  THE REVOLVING CREDIT FACILITY.

      2.1.  Commitment to Lend. Subject to the terms and conditions set forth in
this  Credit  Agreement,  each  of the  Banks  severally  agrees  to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not  including  the Maturity  Date upon notice by the
Borrower to the Agent given in  accordance  with  Section 2.7,  such  Syndicated
Loans  as are  requested  by  the  Borrower  up to a  maximum  aggregate  amount
outstanding (after giving effect to all amounts requested) at any one time equal
to such Bank's Commitment minus such Bank's Commitment  Percentage of the sum of
the Maximum Drawing Amount and all Unpaid  Reimbursement  Obligations,  provided
that the sum of the outstanding  amount of the Loans (after giving effect to all
amounts requested) plus the Maximum Drawing Amount and all Unpaid  Reimbursement
Obligations  shall not at any time exceed the Total  Commitment.  The Syndicated
Loans  shall  be made  pro  rata  in  accordance  with  each  Bank's  Commitment
Percentage.  Each request for a Loan hereunder shall constitute a representation
and warranty by the Borrower  that the  conditions  set forth in Sections 11 and
12, in the case of the initial Loans to be made on the Closing Date, and Section
12, in the case of all other  Loans,  have  been  satisfied  on the date of such
request.

      2.2.  Facility Fee and Utilization Fee.

            2.2.1. Facility Fee. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a facility fee (the "Facility  Fee")  calculated at the Applicable  Facility Fee
Rate (as set forth in the  Applicable  Pricing) on the average  daily  amount of
each Bank's  Commitment during each calendar quarter or portion thereof from the
date hereof to the Maturity  Date  (without  regard to whether any Loans by such
Bank have been during such period  outstanding  and whether the  availability of
such  Commitment  has  been  during  the  such  period  reduced  by  outstanding
Competitive Bid Loans or Swing Line Loans).

            2.2.2.      Utilization  Fee.  In addition  to the  Facility  Fee,
the  Borrower  agrees  to pay to the Agent  for the  accounts  of the Banks in
accordance with their  respective  Commitment  Percentages,  a utilization fee
(the "Utilization Fee"), for each day of each calendar quarter or portion

<PAGE>

      thereof  from the date  hereof  to the  Maturity  Date on which  the total
amount outstanding hereunder in respect of Loans, the Maximum Drawing Amount and
Unpaid  Reimbursement  Obligations  (the  "Total  Outstandings")  exceeds  fifty
percent (50%) of the Total  Commitment,  in an amount equal to one-eighth of one
percent (0.125%) per annum of the Total Outstandings.

            2.2.3.  Payment.  The Facility Fee and the  Utilization Fee shall be
payable  quarterly in arrears on the last day of each calendar  quarter for such
quarter,  commencing on the first such date  following  the date hereof,  with a
final payment on the Maturity Date or any earlier date on which the  Commitments
shall terminate.

      2.3.  Reduction of Total Commitment.  The Borrower shall have the right at
any time and from time to time upon five (5) Business Days prior written  notice
to the  Agent to  reduce  by  $5,000,000  or an  integral  multiple  thereof  or
terminate entirely the Total Commitment,  whereupon the Commitments of the Banks
shall be  reduced  pro  rata in  accordance  with  their  respective  Commitment
Percentages  of the  amount  specified  in such  notice  or, as the case may be,
terminated.  Promptly  after  receiving  any  notice of the  Borrower  delivered
pursuant to this Section  2.3, the Agent will notify the Banks of the  substance
thereof.  Upon the  effective  date of any such  reduction or  termination,  the
Borrower  shall pay to the Agent for the  respective  accounts  of the Banks the
full amount of any  commitment  fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.

      2.4.  Increase of Total Commitment; Additional Banks.

            2.4.1.  Commitment  Increase  Request.  The Borrower  shall have the
right upon one occasion by written notice to the Agent (a  "Commitment  Increase
Request") to request an increase in the Total  Commitment  by an amount equal to
$25,000,000  (the  "Increase  Amount"),  up to a  maximum  Total  Commitment  of
$100,000,000;  provided that, at the time of the Commitment Increase Request and
at the time such request would become effective,  no Default or Event of Default
has  occurred  and is  continuing  or would  exist after  giving  effect to such
increase in the Total  Commitment.  Any such  increase  in the Total  Commitment
shall become effective only upon written notice by the Agent to the Borrower and
the  Banks  stating  the new Total  Commitment  and,  in  respect  thereof,  the
respective   Commitment   amounts  and  Commitment   Percentages  of  the  Banks
(including, if applicable, any Additional Bank).

            2.4.2.  Banks' First Refusal  Right.  The Agent shall  promptly upon
receipt of any  Commitment  Increase  Request  send a copy thereof to the Banks.
Each of the Banks shall have the right (but not the  obligation) to increase its
Commitment in connection  with the increased  Total  Commitment,  exercisable by
written notice to the Agent within fifteen (15) Business Days following the date
of the Commitment  Increase Request specifying the maximum amount (not exceeding
the Increase  Amount) by which such Bank is willing to increase its  Commitment.
In the event that the  responding  Banks shall have  offered to  increase  their
Commitments  by an aggregate  amount  exceeding the Increase  Amount,  the Agent
shall  allocate  the  Increase  Amount  to  the  respective  Commitments  of the
responding Banks as nearly as possible (in such

<PAGE>

      multiples, not less than $100,000, as the Agent may deem appropriate,  and
in the event that the aggregate  Commitment increases offered by the Banks shall
not equal or exceed the Increase Amount, subject to reduction for the Commitment
of one or more Additional  Banks pursuant to Section 2.4.3) in the proportion of
the respective Banks' Commitment increase offers.

            2.4.3.  Additional Banks. In the event that the aggregate Commitment
increases  offered by the Banks shall not equal or exceed the  Increase  Amount,
one or more other commercial  banks which would qualify as an Eligible  Assignee
(an  "Additional  Bank")  and  which  are  acceptable  to each of the  Agent and
Borrower may be admitted as a Bank party to this Credit  Agreement in accordance
with the provisions of Section  18.10,  provided that the Commitment of any such
Additional  Bank shall not be less than $5,000,000 nor greater than the Increase
Amount.

      2.5. The Revolving  Credit Notes.  The Syndicated Loans shall be evidenced
by  separate  promissory  notes of the  Borrower  in  substantially  the form of
Exhibit A hereto (each a "Revolving Credit Note"),  dated as of the Closing Date
(or, in the event of the  admission of any  Additional  Bank pursuant to Section
2.4.3  and  Section  18.10,  dated as of the  effective  date  specified  in the
Instrument of Adherence  executed and delivered by such Additional Bank pursuant
to Section  18.10) and  completed  with  appropriate  insertions.  One Revolving
Credit  Note shall be payable  to the order of each Bank in a  principal  amount
equal to such Bank's Commitment or, if less, the outstanding amount of all Loans
made by such Bank,  plus  interest  accrued  thereon,  as set forth  below.  The
Borrower  irrevocably  authorizes  each Bank to make or cause to be made,  at or
about the time of the  Drawdown  Date of any  Syndicated  Loan or at the time of
receipt of any payment of principal  on such Bank's  Revolving  Credit Note,  an
appropriate  notation on such Bank's Revolving Credit Note Record reflecting the
making  of such  Syndicated  Loan or (as the  case may be) the  receipt  of such
payment.  The outstanding amount of the Loans set forth on such Bank's Revolving
Credit Note Record shall be prima facie evidence of the principal amount thereof
owing and unpaid to such  Bank,  but the  failure to record,  or any error in so
recording, any such amount on such Bank's Revolving Credit Note Record shall not
limit or otherwise affect the obligations of the Borrower hereunder or under any
Revolving  Credit  Note to make  payments  of  principal  of or  interest on any
Revolving Credit Note when due.

      2.6.  Interest on Loans.  Except as otherwise provided in Section 5.11,

      (a) Each Base Rate Loan shall bear interest for the period commencing with
the Drawdown Date thereof and ending on the last day of the Interest Period with
respect thereto at Base Rate.

      (b) Each LIBOR Rate Loan shall  bear  interest  for the period  commencing
with the Drawdown Date thereof and ending on the last day of the Interest Period
with respect thereto at the LIBOR Rate determined for such Interest Period, plus
the LIBOR Margin set forth in the Applicable Pricing.

      (c) The  Borrower  promises  to pay  interest on each  Syndicated  Loan in
arrears on each Interest Payment Date with respect thereto.

<PAGE>

      2.7.  Requests  for Loans.  The Borrower  shall give to the Agent  written
notice in the form of  Exhibit C hereto (or  telephonic  notice  confirmed  in a
writing  in the form of  Exhibit C hereto)  of each  Syndicated  Loan  requested
hereunder (a "Loan  Request") no later than (i) 1:00 p.m.  (Boston  time) on the
proposed  Drawdown  Date of any Base Rate  Loan and (ii) two (2) LIBOR  Business
Days prior to the  proposed  Drawdown  Date of any LIBOR  Rate  Loan.  Each such
notice shall specify (A) the principal  amount of the Syndicated Loan requested,
(B) the proposed  Drawdown Date of such Syndicated Loan, (C) the Interest Period
for such Syndicated Loan and (D) the Type of such Syndicated Loan. Promptly upon
receipt of any such notice,  the Agent shall  notify each of the Banks  thereof.
Each Loan  Request  shall be  irrevocable  and binding on the Borrower and shall
obligate the Borrower to accept the Syndicated  Loan requested from the Banks on
the proposed  Drawdown Date.  Each Loan Request shall be in a minimum  aggregate
amount of $5,000,000 and an integral multiple of $1,000,000.

      2.8.  Conversion Options.

            2.8.1. Conversion to Different Type of Syndicated Loan. The Borrower
may elect  from time to time to convert  any  outstanding  Syndicated  Loan to a
Syndicated  Loan of another  Type,  provided  that (i) with  respect to any such
conversion of a Syndicated Loan to a Base Rate Loan, the Borrower shall give the
Agent at least two (2) Business Days prior written notice of such election; (ii)
with  respect to any such  conversion  of a Base Rate Loan to a LIBOR Rate Loan,
the  Borrower  shall give the Agent at least two (2) LIBOR  Business  Days prior
written notice of such election;  (iii) with respect to any such conversion of a
LIBOR Rate Loan into a Base Rate Loan, such conversion shall only be made on the
last day of the Interest  Period with respect  thereto;  and (iv) no Loan may be
converted  into a LIBOR  Rate  Loan when any  Default  or Event of  Default  has
occurred and is continuing.  All or any part of outstanding  Syndicated Loans of
any Type may be  converted  into a  Syndicated  Loan of another Type as provided
herein,  provided that any partial  conversion  shall be in a minimum  aggregate
principal  amount of $5,000,000  and an integral  multiple of  $1,000,000.  Each
Conversion  Request  relating to the conversion of a Syndicated  Loan to a LIBOR
Rate Loan shall be irrevocable by the Borrower.

            2.8.2.  Continuation of Type of Syndicated Loan. Any Syndicated Loan
of any Type may be  continued  as a  Syndicated  Loan of the same  Type upon the
expiration  of an Interest  Period with  respect  thereto by  compliance  by the
Borrower with the notice provisions contained in Section 2.8.1; provided that no
LIBOR Rate Loan may be  continued  as such when any  Default or Event of Default
has occurred and is continuing,  but shall be automatically  converted to a Base
Rate Loan on the last day of the first Interest Period  relating  thereto ending
during the  continuance  of any Default or Event of Default of which officers of
the Agent active upon the Borrower's account have actual knowledge. In the event
that the  Borrower  fails  to  provide  any  such  notice  with  respect  to the
continuation  of any LIBOR Rate Loan as such, then such LIBOR Rate Loan shall be
automatically  converted  to a Base  Rate  Loan  on the  last  day of the  first
Interest Period relating thereto. The Agent shall

<PAGE>

      notify the Banks promptly when any such automatic conversion  contemplated
by this Section 2.8 is scheduled to occur.

            2.8.3.  LIBOR Rate Loans. Any conversion to or from LIBOR Rate Loans
shall be in such amounts and be made pursuant to such  elections so that,  after
giving effect thereto,  the aggregate  principal  amount of all LIBOR Rate Loans
having the same  Interest  Period shall not be less than  $5,000,000  or a whole
multiple of $1,000,000 in excess thereof.

    2.9.  Competitive Bid Loans.

                2.9.1.  Competitive Bid Borrowings.

                  (a) The Competitive Bid Option.  In addition to the Syndicated
Loans  permitted  to be made  hereunder  pursuant  to Section  2.1  hereof,  the
Borrower may, from time to time pursuant to the terms of this Section 2.9, cause
the Agent to request the Banks to make offers to fund  Competitive  Bid Loans to
the Borrower  from time to time prior to the Maturity  Date.  The Banks may, but
shall have no  obligation  to, make such offers and the Borrower  may, but shall
have no  obligation  to,  accept  such  offers in the  manner  set forth in this
Section 2.9.  Each Bank may make  Competitive  Bid Loans in an aggregate  amount
(after  giving  effect to all  amounts  requested)  not to  exceed  $30,000,000,
provided  that (i) the  aggregate  principal  amount  of  Competitive  Bid Loans
outstanding at any time (after giving effect to all amounts requested) shall not
be less than $5,000,000 nor more than  $30,000,000,  and (ii) the sum of (A) the
aggregate  amount of all  outstanding  Syndicated  Loans plus (B) the  aggregate
amount of all outstanding Swing Line Loans, plus (C) the Maximum Drawing Amount,
plus (D) all Unpaid Reimbursement Obligations,  plus (E) the aggregate amount of
all  outstanding  Competitive  Bid Loans  (after  giving  effect to all  amounts
requested) shall at no time exceed the Total Commitment.

                  (b) Competitive Bid Notes.  The Competitive Bid Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of Exhibit D-1 attached hereto (each a "Competitive Bid Note"),  dated as of the
Closing Date and completed with appropriate  insertions.  A Competitive Bid Note
shall be payable to the order of each Bank in a  principal  amount  equal to the
Total  Commitment or, if less, the  outstanding  amount of all  Competitive  Bid
Loans  made by such  Bank  to the  Borrower  hereunder,  plus  interest  accrued
thereon. The Borrower irrevocably  authorizes each Bank to make, at or about the
time of the Drawdown  Date of any  Competitive  Bid Loan made by such Bank or at
the time of receipt of the payment of principal of such Competitive Bid Loan, an
appropriate  notation on the Record attached to such Bank's Competitive Bid Note
reflecting the making of such Competitive Bid Loan and repayments  thereof.  All
such  notations  shall  constitute  prima  facie  evidence of the amount of such
Competitive Bid Loans and the repayments thereof,  but the failure to record, or
any error in so recording  such amount on such Bank's  Record shall not limit or
otherwise  affect  the  obligations  of the  Borrower  hereunder  or  under  any
Competitive  Bid  Note  to  make  payments  of  principal  or  interest  on  any
Competitive Bid Note when due.

<PAGE>

                  (c) Competitive Bid Quote Request. When the Borrower wishes to
request  offers to make  Competitive  Bid Loans under this Section 2.9, it shall
transmit to the Agent by telex,  facsimile or electronic  mail a Competitive Bid
Quote  Request  substantially  in the form of  Exhibit  D-2  attached  hereto (a
"Competitive  Bid Quote  Request")  so as to be received no later than 1:00 p.m.
(Boston time) on the second  Business Day prior to the requested  Drawdown Date,
specifying (i) the requested  Drawdown Date (which must be a Business Day), (ii)
the amount of such  Competitive  Bid Loan (which must be a minimum of $5,000,000
or any greater  integral  multiple of $1,000,000 and may not exceed  $30,000,000
(after giving effect to all amounts requested), and (iii) the Interest Period of
such  Competitive  Bid Loan  (which may not be fewer than ten (10) nor more than
ninety (90) days and may not extend beyond the Maturity Date). A Competitive Bid
fee of $750 shall be payable by the  Borrower to the Agent with  respect to each
Competitive  Bid Quote Request on the date of the delivery of such request.  The
Borrower  may request  offers to make  Competitive  Bid Loans for one amount and
three Interest Periods in a single Competitive Bid Quote Request.

                  (d) Invitation for Competitive Bid Quotes;  Alternative Manner
of Auction. Subsequent to timely receipt of a Competitive Bid Quote Request, the
Agent  shall  send to the  Banks  by  telex,  facsimile  or  electronic  mail an
Invitation for Competitive Bid Quotes  substantially  in the form of Exhibit D-3
attached hereto (an  "Invitation  for  Competitive Bid Quotes"),  as promptly as
possible but not later than 3:00 p.m.  (Boston time) on the second  Business Day
prior to the requested Drawdown Date which shall constitute an invitation by the
Borrower  to  each  Bank to  submit  Competitive  Bid  Quotes  offering  to make
Competitive  Bid Loans to which such  Competitive  Bid Quote Request  relates in
accordance  with  this  Section  2.9.  If,  after  receipt  by  the  Agent  of a
Competitive  Bid Quote Request from the Borrower in accordance  with  subsection
(c) of this Section 2.9.1, the Agent or any Bank shall be unable to complete any
procedure  of the  auction  process  described  in  subsections  (d) through (g)
(inclusive)  of this  Section  2.9.1  due to the  inability  of such  Person  to
transmit or receive  communications  through the means specified  therein,  such
Person may rely on  telephonic  notice for the  transmission  or receipt of such
communications.   In  any  case  where  such  Person  shall  rely  on  telephone
transmission or receipt,  any communication  made by telephone shall, as soon as
possible thereafter, be followed by written confirmation thereof.

                  (e)  Submission and Contents of Competitive Bid Quotes.

                        (i)  Each  Bank may  submit a  Competitive  Bid  Quote
containing an offer or offers to make  Competitive  Bid Loans in response to any
Invitation for  Competitive Bid Quotes.  Each  Competitive Bid Quote must comply
with the  requirements of this subsection (e) and must be submitted to the Agent
by telex,  facsimile or electronic mail not later than 10:00 a.m.  (Boston time)
on the requested  Drawdown Date,  provided,  that  Competitive Bid Quotes may be
made by the Agent in its  capacity as a Bank only if it notifies the Borrower of
the terms of its Competitive Bid Quote no later than 9:30 a.m.  (Boston time) on
the requested  Drawdown Date.  Subject to the provisions of Sections 10, 11, and
12 hereof,  any Competitive  Bid Quote so made shall be irrevocable  except with
the written consent of the Agent given on the instructions of the Borrower.

<PAGE>

                        (ii)  Each   Competitive   Bid   Quote   shall  be  in
substantially  the form of  Exhibit  D-4  attached  hereto and shall in any case
specify: (A) the requested Drawdown Date and Interest Periods, (B) the principal
amount of the  Competitive  Bid Loan for which  each such  offer is being  made,
which  principal  amount (x) may be greater than the  Commitment  of the quoting
Bank but may not exceed $30,000,000, (y) must be $2,000,000 or a larger multiple
of  $1,000,000  and  (z)  may not  exceed  the  aggregate  principal  amount  of
Competitive  Bid Loans for which  offers were  requested,  (C) the fixed rate of
interest per annum (rounded to the nearest 1/1000th of 1%) (the "Competitive Bid
Rate") offered for each such  Competitive  Bid Loan, and (D) the identity of the
quoting Bank.

                        (iii)  Any  Competitive Bid Quote shall be disregarded
if it: (A) is not  substantially  in the form of Exhibit D-4 attached  hereto or
does not specify all of the information  required by subsection  (e)(ii) of this
Section 2.9.1; (B) contains qualifying,  conditional or similar language (except
that it may, in the case of a quote  relating to more than one Interest  Period,
contain  the  condition  that the Bank will fund any one,  but not more,  of the
Competitive Bid Loans offered in such Competitive Bid Quote); (C) proposes terms
other than or in addition to those set forth in the  applicable  Invitation  for
Competitive  Bid Quotes;  or (D) arrives  after the time set forth in subsection
(e)(i) of this Section 2.9.1.

                  (f) Notice to  Borrower.  Not later  than  10:30 a.m.  (Boston
time) on the requested Drawdown Date, the Agent shall notify the Borrower of the
terms of all  Competitive  Bid Quotes  submitted by the Banks in accordance with
subsection (e) of this Section  2.9.1.  The Agent's notice to the Borrower shall
specify (i) the aggregate  principal  amount of Competitive  Bid Loans for which
offers have been  received  for each  Interest  Period  specified in the related
Competitive  Bid Quote Request,  and (ii) the respective  principal  amounts and
Competitive Bid Rates so offered.

                  (g)  Acceptance  and Notice by Borrower.  Not later than 11:00
a.m. (Boston time) on the requested Drawdown Date, the Borrower shall notify the
Agent,  and the Agent shall promptly notify each Bank with respect to its offer,
of the  Borrower's  acceptance or  non-acceptance  of the offers of which it was
notified  pursuant to subsection  (f) of this Section  2.9.1.  In the case of an
acceptance,  such notice shall (i) be  substantially  in the form of Exhibit D-5
attached hereto (a "Notice of Competitive Bid  Borrowing"),  (ii) be irrevocable
by the Borrower,  and (iii) specify the aggregate principal amount of offers for
each  Interest  Period that are  accepted.  Each  acceptance  by the Borrower of
Competitive Bid Loans hereunder shall constitute a  representation  and warranty
by the Borrower that the  conditions set forth in Sections 10 and 11 hereof have
been  satisfied  on the date of such  acceptance.  The  Borrower  may accept any
Competitive  Bid Quote in whole or in part;  provided  that:  (A) the  aggregate
principal  amount of each  Competitive  Bid Loan may not exceed  the  applicable
amount set forth in the related Competitive Bid Quote Request, (B) the aggregate
principal  amount of each  Competitive  Bid Loan must be  $2,000,000 or a larger
multiple of  $1,000,000,  and (C)  acceptance  of offers may only be made on the
basis of ascending Competitive Bid Rates.

<PAGE>

                  (h) Allocation by Agent;  Usage of Commitments.  If offers are
made by two or more Banks  with the same  Competitive  Bid Rates,  for a greater
aggregate  principal  amount  than the  amount in  respect  of which  offers are
accepted for the related  Interest  Period,  the principal amount of Competitive
Bid Loans in respect of which such offers are accepted shall be allocated by the
Agent among such Banks as nearly as possible (in such  multiples,  not less than
$100,000  as the Agent may deem  appropriate)  in  proportion  to the  aggregate
principal  amounts  of such  offers.  If any such Bank has  indicated  a minimum
acceptable  Competitive Bid Loan in its  Competitive Bid Request,  and under the
procedures  of this  subsection  (h),  the Agent would have  allocated  to it an
amount less than such minimum, such Competitive Bid Quote will instead be deemed
to have been withdrawn. Determination by the Agent of the amounts of Competitive
Bid Loans and the  allocation  thereof  shall be  conclusive  in the  absence of
manifest error.  The Agent shall,  promptly after the funding of any Competitive
Bid Loan,  notify the Banks thereof  pursuant to a notice  substantially  in the
form of Exhibit D-6 attached hereto.

                  (i) Funding of Competitive  Bid Loans.  If, on or prior to the
Drawdown  Date  of any  Competitive  Bid  Loan,  the  Total  Commitment  has not
terminated in full and if, on such Drawdown Date,  the applicable  conditions of
ss.ss.10  and 11  hereof  are  satisfied,  the Bank or Banks  whose  offers  the
Borrower  has  accepted  will  fund each  Competitive  Bid Loan so  accepted  as
provided in Section 2.11.1 hereof.

                2.9.2.  Maximum Competitive Bid Loans; Funding Losses.

                  (a)   Notwithstanding   any  other  provision  herein  to  the
contrary,  at no time shall the aggregate  principal  amount of Competitive  Bid
Loans  outstanding at any time exceed the lesser of (i) $30,000,000 and (ii) the
Total  Commitment,  minus  the  sum of (A) the  aggregate  principal  amount  of
Syndicated  Loans  outstanding  at such  time plus (B) the  aggregate  principal
amount of Swing Line Loans outstanding at such time plus (C) the Maximum Drawing
Amount plus (D) all Unpaid Reimbursement Obligations.

                  (b) If after  acceptance of any Competitive Bid Quote pursuant
to Section  2.9.1(f)  hereof,  the Borrower fails to borrow any  Competitive Bid
Loan so accepted on the date specified  therefor,  the Borrower shall  indemnify
the Bank funding such Loan against any loss or expense incurred by reason of the
liquidation or  reemployment of deposits or other funds acquired by such Bank to
fund or maintain  such  unborrowed  Competitive  Bid Loans,  including,  without
limitation, compensation as provided in Section 5.10 hereof.

            2.9.3.  Repayment of  Competitive  Bid Loans.  The principal of each
Competitive Bid Loan shall become  absolutely due and payable by the Borrower on
the last day of the Interest  Period relating  thereto,  and the Borrower hereby
absolutely and unconditionally promises to pay to the Agent, for the accounts of
the relevant Banks, on the last day of the Interest Period relating  thereto the
principal  amount of all such Competitive Bid Loans plus interest thereon at the
applicable  Competitive Bid Rate. Subject to the terms of this Credit Agreement,
the  Borrower  may reborrow any amounts so repaid from time to time prior to the
Maturity Date.

<PAGE>

    2.10.  The Swing Line.

            2.10.1.  The Swing Line Loans.  Subject to the terms and  conditions
hereinafter  set forth,  upon notice by the Borrower to BKB in  accordance  with
this Section  2.10,  BKB agrees to make loans to the  Borrower  (the "Swing Line
Loans") on any Business Day prior to the Maturity Date in an aggregate principal
amount  (together  with all other  outstanding  Swing Line  Loans) not to exceed
$10,000,000  at any one time  outstanding.  Each  Swing  Line Loan shall be in a
minimum  amount  equal  to  $1,000,000  and  in an  integral  multiple  thereof.
Notwithstanding any other provisions of this Credit Agreement and in addition to
the limit set forth above, at no time shall the aggregate principal amountof all
outstanding Swing Line Loans exceed the lesser of (i) the Commitment of BKB then
in effect,  minus the sum of (without  duplication)(A)  the aggregate  principal
amount of all Syndicated Loans by BKB  outstanding,  (B) the aggregate amount of
all Competitive Bid Loans by BKB outstanding and (C) BKB's Commitment Percentage
of the Maximum  Drawing Amount plus all unpaid  Reimbursement  Obligations,  and
(ii) the Total Commitment then in effect, minus the sum of (without duplication)
(A) the aggregate principal amount of all Syndicated Loans outstanding,  (B) the
aggregate amount of Competitive Bid Loans  outstanding,  (C) the Maximum Drawing
Amount, and (D) all Unpaid Reimbursement Obligations.

            2.10.2. Notice of Borrowing. When the Borrower desires BKB to make a
Swing Line Loan, it shall send to BKB written  notice in the form of Exhibit E-1
hereto (or telephonic  notice  confirmed in a writing in the form of Exhibit E-1
hereto)  of each  Swing  Line  Loan  requested  hereunder  (a  "Swing  Line Loan
Request") not later than 1:00 p.m.  (Boston time) on the proposed  Drawdown Date
of any Swing Line Loan.  Each such Swing  Line  Request  Confirmation  shall set
forth the  principal  amount of the proposed  Swing Line Loan and the Swing Line
Loan Maturity Date relating to such Swing Line Loan,  which shall in no event be
later than the earlier of (i) the  thirtieth  (30th) day after the Drawdown Date
and (ii) the  Maturity  Date.  Not later  than 2:00  p.m.  (Boston  time) on the
proposed  Drawdown Date of any Swing Line Loan, BKB shall notify the Borrower of
the Swing  Line Rate at which BKB is willing  to make the  requested  Swing Line
Loan.  If the Borrower  desires to borrow the  requested  Swing Line Loan at the
Swing Line Rate, it shall confirm such desire by telex,  facsimile or electronic
mail (a "Swing  Line  Request  Confirmation")  not later than 2:30 p.m.  (Boston
time) on the proposed  Drawdown Date. Each Swing Line Loan Request  Confirmation
shall be irrevocable and binding on the Borrower and shall obligate the Borrower
to borrow the Swing Line Loan from BKB on the proposed  Drawdown  Date  thereof.
Upon  satisfaction  of the  applicable  conditions  set  forth  in  this  Credit
Agreement,  on the  proposed  Drawdown  Date BKB shall  make the Swing Line Loan
available to the Borrower no later than 3:00 p.m.  (Boston time) on the proposed
Drawdown  Date by  crediting  the amount of the Swing  Line Loan to the  account
specified by the  Borrower;  provided  that BKB shall not advance any Swing Line
Loans  after it has  received  notice  from any Bank that a Default  or Event of
Default has  occurred  and  stating  that no new Swing Line Loans are to be made
until such  Default or Event of Default  has been cured or waived in  accordance
with the provisions of this Credit Agreement.

            2.10.3. Interest on Swing Line Loans. Each Swing Line Loan shall,
except as otherwise provided in ss.5.11 hereof, bear interest from the


<PAGE>

      Drawdown  Date thereof until repaid in full at the rate per annum equal to
the Swing Line Rate quoted for such Swing Line Loan, which shall be paid on each
Interest Payment Date for Base Rate Loans.

            2.10.4. Repayment of Swing Line Loans. The Borrower shall repay each
outstanding  Swing  Line Loan on or prior to the Swing Line Loan  Maturity  Date
relating  thereto.  Upon notice by BKB on any Business Day  following  the Swing
Line Loan  Maturity Date relating to each Swing Line Loan, in the event that the
Borrower has not repaid such Swing Line Loan, each of the Banks hereby agrees to
make Syndicated Loans to the Borrower  constituting Base Rate Loans, on the next
succeeding Business Day following such notice, in an amount equal to such Bank's
Commitment   Percentage  of  the  aggregate  amount  of  all  Swing  Line  Loans
outstanding and overdue.  The proceeds  thereof shall be applied directly by BKB
to  repay   outstanding   Swing  Line  Loans.   Each  Bank  hereby   absolutely,
unconditionally  and irrevocably  agrees to make such Syndicated  Loans upon one
Business Day's notice as set forth above, notwithstanding (i) that the amount of
such  Syndicated  Loan may not comply  with the  applicable  minimums  set forth
herein,  (ii) the failure of the Borrower to meet the applicable  conditions set
forth herein,  (iii) the  occurrence or  continuance of a Default or an Event of
Default hereunder,  and (iv) the Total Commitment in effect at such time. In the
event  that it is  impracticable  for  such  Syndicated  Loan to be made for any
reason on the date otherwise  required above,  then each Bank hereby agrees that
it shall forthwith purchase (as of the date such Syndicated Loan would have been
made, but adjusted for any payments  received from the Borrower on or after such
date and prior to such purchase) from BKB, and BKB shall sell to each Bank, such
participations  in the Swing  Line  Loans  (including  all  accrued  and  unpaid
interest thereon)  outstanding as shall be necessary to cause the Banks to share
in such  Swing  Line  Loans  pro  rata  based  on  their  respective  Commitment
Percentages   (without  regard  to  any  termination  of  the  Total  Commitment
hereunder)  by  making   available  to  BKB  an  amount  equal  to  such  Bank's
participation in the Swing Line Loans; provided that (x) all interest payable on
the Swing Line Loans (other than interest received by BKB pursuant to clause (y)
below) shall be for the account of BKB as a funding and administrative fee until
the date as of which the respective  participation is purchased,  and (y) at the
time any purchase of such  participation  is actually made, the purchasing  Bank
shall  be  required  to  pay  BKB  interest  on  the  principal  amount  of  the
participation  so purchased  for each day from and  including the date such Loan
would otherwise have been made until the date of payment for such  participation
at the rate of interest  then  applicable  to such Swing Line Loans  during such
period.  The  Borrower  shall  have the  right,  at its  election,  to repay the
outstanding  amount of a Swing  Line  Loan,  as a whole or in part,  at any time
without penalty or premium,  provided that any full or partial  repayment of the
outstanding  amount of any  Swing  Line Loan may be made only on the last day of
the Interest  Period  relating  thereto  unless the Borrower pays, in accordance
with Section 5.10, BKB the costs and expenses incurred by BKB as a result of the
repayment  of such  Swing  Line  Loan on a day  other  than the last day of such
Interest Period relating thereto.

      2.10.5.  The Swing Line Note.  The  obligation of the Borrower to repay
the Swing Line Loans made pursuant to this Agreement and to pay interest thereon
as set forth in this  Agreement  shall be evidenced by a promissory  note of the
Borrower substantially in the form of Exhibit E-2 attached hereto


<PAGE>

      (the "Swing Line  Note"),  dated the Closing Date and payable to the order
of BKB in a principal amount stated to be the lesser of (i) $10,000,000 and (ii)
the aggregate  principal  amount of Swing Line Loans at any time advanced by BKB
and outstanding  hereunder.  The Borrower irrevocably  authorizes BKB to make or
cause to be made,  at or about the time of the  Drawdown  Date of any Swing Line
Loan or at the time of receipt of any  payment  of  principal  on the Swing Line
Note, an appropriate notation on the grid attached to such Note or BKB's records
reflecting  the  making  of such  Swing  Line  Loan or (as the  case may be) the
receipt  of such  payment.  The  outstanding  amount of the Swing Line Loans set
forth  on such  grid or such  records  shall  be  prima  facie  evidence  of the
principal amount thereof owing and unpaid to BKB, but the failure to record,  or
any error in so  recording,  any such amount on such Note or such records  shall
not limit or  otherwise  affect  the  actual  amount of the  obligations  of the
Borrower hereunder or under the Swing Line Note to make payments of principal of
or interest on the Swing Line Note when due.

      2.11.  Funds for Syndicated Loan.

            2.11.1. Funding Procedures.  Not later than 11:00 a.m. (Boston time)
on the proposed  Drawdown Date of any Syndicated  Loans,  each of the Banks will
make  available  to the  Agent,  at the  Agent's  Head  Office,  in  immediately
available funds, the amount of such Bank's  Commitment  Percentage of the amount
of the requested  Syndicated  Loans. Upon receipt from each Bank of such amount,
and  upon  receipt  of the  documents  required  by  Sections  10 and 11 and the
satisfaction  of  the  other  conditions  set  forth  therein,   to  the  extent
applicable,  the Agent will make available to the Borrower the aggregate  amount
of such Syndicated  Loans made available to the Agent by the Banks.  The failure
or refusal of any Bank to make  available to the Agent at the aforesaid time and
place on any  Drawdown  Date the  amount  of its  Commitment  Percentage  of the
requested  Syndicated  Loans  shall not  relieve any other Bank from its several
obligation  hereunder  to make  available  to the Agent the amount of such other
Bank's Commitment Percentage of any requested Syndicated Loans.

            2.11.2.  Advances by Agent.  The Agent may,  unless  notified to the
contrary  by any Bank prior to a Drawdown  Date,  assume that such Bank has made
available  to the  Agent  on such  Drawdown  Date  the  amount  of  such  Bank's
Commitment  Percentage of the Syndicated Loans to be made on such Drawdown Date,
and the Agent may (but it shall  not be  required  to),  in  reliance  upon such
assumption,  make available to the Borrower a corresponding  amount. If any Bank
makes  available  to the Agent such amount on a date after such  Drawdown  Date,
such Bank shall pay to the Agent on demand an amount equal to the product of (i)
the average  computed for the period  referred to in clause (iii) below,  of the
weighted  average  interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, times (ii) the amount of such
Bank's Commitment  Percentage of such Syndicated Loans,  times (iii) a fraction,
the numerator of which is the number of days that elapse from and including such
Drawdown  Date to the  date on  which  the  amount  of  such  Bank's  Commitment
Percentage of such Syndicated  Loans shall become  immediately  available to the
Agent,  and the  denominator of which is 365. A statement of the Agent submitted
to such Bank with  respect to any amounts  owing under this  paragraph  shall be
prima facie evidence of the

<PAGE>

      amount  due and owing to the  Agent by such  Bank.  If the  amount of such
Bank's  Commitment  Percentage of such Syndicated Loans is not made available to
the Agent by such Bank within three (3) Business  Days  following  such Drawdown
Date,  the Agent shall be entitled to recover  such amount from the  Borrower on
demand, with interest thereon at the rate per annum applicable to the Syndicated
Loans made on such Drawdown Date.

                            3.  REPAYMENT OF THE LOANS.

      3.1.  Maturity.  The Borrower  promises to pay on the Maturity  Date,  and
there shall become  absolutely  due and payable on the Maturity Date, all of the
Loans  outstanding  on such date,  together  with any and all accrued and unpaid
interest thereon.

      3.2.  Mandatory  Repayments  of  Loans.  If at  any  time  the  sum of the
outstanding  amount of the  Loans,  the  Maximum  Drawing  Amount and all Unpaid
Reimbursement Obligations exceeds the Total Commitment,  then the Borrower shall
immediately  pay the  amount of such  excess  to the  Agent  for the  respective
accounts  of the Banks  for  application:  first,  to any  Unpaid  Reimbursement
Obligations;  second,  to the  Loans;  and  third,  to provide to the Agent cash
collateral for  Reimbursement  Obligations as contemplated by Section 4.2(b) and
(c). Each payment of any Unpaid Reimbursement Obligations or prepayment of Loans
shall be allocated among the Banks, in proportion, as nearly as practicable,  to
each  Reimbursement  Obligation  or (as the case may be) the  respective  unpaid
principal  amount of each Bank's  Revolving Credit Note, with adjustments to the
extent  practicable  to equalize any prior payments or repayments not exactly in
proportion.

      3.3. Optional  Repayments of Syndicated Loans. The Borrower shall have the
right, at its election, to repay the outstanding amount of the Syndicated Loans,
as a whole or in part, at any time without penalty or premium, provided that any
full or  partial  repayment  of the  outstanding  amount of any LIBOR Rate Loans
pursuant to this Section 3.3 other than on the last day of the  Interest  Period
relating  thereto shall be subject to Section 5.10.  The Borrower shall give the
Agent prior written notice (including without limitation by telex,  facsimile or
electronic  mail) of any  proposed  prepayment  pursuant to this Section 3.3, no
later than 1:00 p.m., Boston time, on the proposed prepayment date, with respect
to any proposed prepayment of Base Rate Loans, and three (3) LIBOR Business Days
prior to any proposed  prepayment of LIBOR Rate Loans,  in each case  specifying
the proposed date of prepayment of Loans and the principal amount to be prepaid.
Each such  partial  prepayment  of the  Syndicated  Loans  shall be in a minimum
amount  of  $5,000,000  and  an  integral  multiple  of  $1,000,000,   shall  be
accompanied by the payment of accrued  interest on the principal  prepaid to the
date of prepayment  and shall be applied,  in the absence of  instruction by the
Borrower, first to the principal of Base Rate Loans and then to the principal of
LIBOR Rate Loans. Each partial prepayment shall be allocated among the Banks, in
proportion, as nearly as practicable,  to the respective unpaid principal amount
of each Bank's Revolving Credit Note, with adjustments to the extent practicable
to equalize any prior repayments not exactly in proportion.

<PAGE>

                               4.  LETTERS OF CREDIT.

      4.1.  Letter of Credit Commitments.

            4.1.1.  Commitment to Issue Letters of Credit.  Subject to the terms
and conditions hereof and the execution and delivery by the Borrower of a letter
of  credit  application  on the  Agent's  customary  form (a  "Letter  of Credit
Application"),  the  Agent on  behalf  of the  Banks  and in  reliance  upon the
agreement of the Banks set forth in Section  4.1.4 and upon the  representations
and  warranties of the Borrower  contained  herein,  agrees,  in its  individual
capacity, to issue, extend and renew for the account of the Borrower one or more
standby or documentary letters of credit  (individually,  a "Letter of Credit"),
in such form as may be requested from time to time by the Borrower and agreed to
by the Agent; provided,  however, that, after giving effect to such request, (a)
the sum of the aggregate  Maximum  Drawing  Amount and all Unpaid  Reimbursement
Obligations shall not exceed  $55,000,000 at any one time and (b) the sum of (i)
the  Maximum  Drawing  Amount  on  all  Letters  of  Credit,   (ii)  all  Unpaid
Reimbursement  Obligations,  and (iii) the amount of all Loans outstanding shall
not exceed the Total Commitment.

            4.1.2.  Letter  of  Credit  Applications.   Each  Letter  of  Credit
Application  shall be completed to the  satisfaction  of the Agent. In the event
that any  provision of any Letter of Credit  Application  shall be  inconsistent
with any provision of this Credit Agreement,  then the provisions of this Credit
Agreement shall, to the extent of any such inconsistency, govern.

            4.1.3.  Terms of Letters of Credit.  Each  Letter of Credit  issued,
extended or renewed  hereunder  shall,  among other things,  (i) provide for the
payment of sight drafts for honor  thereunder  when presented in accordance with
the terms thereof and when accompanied by the documents  described therein,  and
(ii) have an expiry  date no later  than the date  which is  fourteen  (14) days
prior to the Maturity Date. Each Letter of Credit so issued, extended or renewed
shall be subject to the Uniform  Customs or, in the case of a standby  Letter of
Credit, either the Uniform Customs or the International Standby Practices.

            4.1.4.  Reimbursement  Obligations  of Banks.  Each  Bank  severally
agrees that it shall be absolutely  liable,  without regard to the occurrence of
any Default or Event of Default or any other condition precedent whatsoever,  to
the extent of such  Bank's  Commitment  Percentage,  to  reimburse  the Agent on
demand  for the amount of each  draft  paid by the Agent  under  each  Letter of
Credit to the extent that such amount is not reimbursed by the Borrower pursuant
to Section 4.2 (such  agreement  for a Bank being  called  herein the "Letter of
Credit Participation" of such Bank).

            4.1.5.  Participations  of Banks.  Each such  payment made by a Bank
shall be treated as the purchase by such Bank of a participating interest in the
Borrower's Reimbursement Obligation under Section 4.2 in an amount equal to such
payment. Each Bank shall share in accordance with its participating  interest in
any interest which accrues pursuant to Section 4.2.

<PAGE>

      4.2.  Reimbursement  Obligation  of the  Borrower.  In order to induce the
Agent to  issue,  extend  and  renew  each  Letter  of  Credit  and the Banks to
participate  therein,  the  Borrower  hereby  agrees to  reimburse or pay to the
Agent,  for the  account  of the Agent or (as the case may be) the  Banks,  with
respect  to each  Letter of Credit  issued,  extended  or  renewed  by the Agent
hereunder,

      (a) except as otherwise  expressly  provided in Section 4.2(b) and (c), on
each date that any draft presented under such Letter of Credit is honored by the
Agent,  or the Agent  otherwise  makes a payment with respect  thereto,  (i) the
amount  paid by the Agent under or with  respect to such  Letter of Credit,  and
(ii) the  amount  of any  taxes,  fees,  charges  or other  costs  and  expenses
whatsoever incurred by the Agent or any Bank in connection with any payment made
by the Agent or any Bank under, or with respect to, such Letter of Credit,

      (b) upon the reduction (but not termination) of the Total Commitment to an
amount less than the Maximum Drawing Amount, an amount equal to such difference,
which  amount  shall be held by the Agent for the  benefit  of the Banks and the
Agent as cash collateral for all Reimbursement Obligations, and

      (c) upon the termination of the Total  Commitment,  or the acceleration of
the  Reimbursement  Obligations  with  respect  to  all  Letters  of  Credit  in
accordance  with Section 12, an amount equal to the then Maximum  Drawing Amount
on all  Letters  of  Credit,  which  amount  shall be held by the  Agent for the
benefit  of the  Banks and the Agent as cash  collateral  for all  Reimbursement
Obligations.

      Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the  Borrower  under  this  Section  4.2 at any time from the date such  amounts
become due and payable  (whether as stated in this Section 4.2, by  acceleration
or otherwise)  until payment in full (whether before or after judgment) shall be
payable to the Agent on demand at the rate specified in Sectoin 5.11 for overdue
principal on the Loans.

      4.3. Letter of Credit  Payments.  If any draft shall be presented or other
demand for  payment  shall be made under any Letter of Credit,  the Agent  shall
notify the Borrower of the date and amount of the draft  presented or demand for
payment and of the date and time when it expects to pay such draft or honor such
demand for payment.  If the Borrower fails to reimburse the Agent as provided in
Section  4.2 on or before the date that such  draft is paid or other  payment is
made by the Agent, the Agent may at any time thereafter  notify the Banks of the
amount of any such  Unpaid  Reimbursement  Obligation.  No later  than 3:00 p.m.
(Boston  time) on the  Business Day next  following  the receipt of such notice,
each Bank shall make  available to the Agent,  at the Agent's  Head  Office,  in
immediately  available funds, such Bank's  Commitment  Percentage of such Unpaid
Reimbursement  Obligation,  together  with an amount equal to the product of (i)
the average,  computed for the period  referred to in clause (iii) below, of the
weighted  average  interest rate paid by the Agent for federal funds acquired by
the Agent during each day  included in such period,  times (ii) the amount equal
to such Bank's Commitment  Percentage of such Unpaid  Reimbursement  Obligation,
times (iii) a fraction, the

<PAGE>

      numerator  of which is the number of days that elapse  from and  including
the date the Agent paid the draft  presented for honor or otherwise made payment
to  the  date  on  which  such  Bank's  Commitment  Percentage  of  such  Unpaid
Reimbursement  obligation shall become  immediately  available to the Agent, and
the denominator of which is 360. The responsibility of the Agent to the Borrower
and the Banks shall be only to  determine  that the  documents  (including  each
draft) delivered under each Letter of Credit in connection with such presentment
shall be in conformity in all material respects with such Letter of Credit.

      4.4.  Obligations  Absolute.  The Borrower's  obligations  under this ss.4
shall  be  absolute  and  unconditional  under  any  and all  circumstances  and
irrespective  of the  occurrence  of any  Default  or  Event of  Default  or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the  Borrower  may have or have had  against  the  Agent,  any Bank or any
beneficiary  of a Letter of Credit.  The Borrower  further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under Section 4.2 shall not be affected by,
among  other  things,  the  validity  or  genuineness  of  documents  or of  any
endorsements  thereon,  even if such documents should in fact prove to be in any
or all respects  invalid,  fraudulent or forged, or any dispute between or among
the  Borrower,  the  beneficiary  of any  Letter  of  Credit  or  any  financing
institution  or other party to which any Letter of Credit may be  transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such  transferee.  The Agent and the Banks  shall not be
liable for any error, omission, interruption or delay in transmission,  dispatch
or delivery of any message or advice,  however  transmitted,  in connection with
any Letter of Credit.  The  Borrower  agrees that any action taken or omitted by
the Agent or any Bank under or in connection  with each Letter of Credit and the
related drafts and documents,  if done in good faith,  shall be binding upon the
Borrower  and shall not result in any  liability on the part of the Agent or any
Bank to the Borrower.

      4.5.  Reliance by Issuer. To the extent not inconsistent with Section 4.4,
the Agent  shall be entitled to rely,  and shall be fully  protected  in relying
upon,  any  Letter of  Credit,  draft,  writing,  resolution,  notice,  consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message,  statement,  order or other  document  believed by it to be genuine and
correct and to have been  signed,  sent or made by the proper  Person or Persons
and upon advice and statements of legal  counsel,  independent  accountants  and
other  experts  selected  by the Agent.  The Agent shall be fully  justified  in
failing or refusing to take any action  under this  Credit  Agreement  unless it
shall first have received such advice or concurrence of the Majority Banks as it
reasonably deems  appropriate or it shall first be indemnified to its reasonable
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or  continuing  to take any such action.  The
Agent shall in all cases be fully  protected in acting,  or in  refraining  from
acting, under this Credit Agreement in accordance with a request of the Majority
Banks,  and such request and any action taken or failure to act pursuant thereto
shall be binding upon the Banks and all future  holders of the Revolving  Credit
Notes or of a Letter of Credit Participation.

<PAGE>

      4.6.  Letter of Credit Fee. The Borrower shall pay to the Agent  quarterly
in arrears,  for the accounts of the Banks in accordance  with their  respective
Commitment  Percentages,  a fee (in each case,  a "Letter  of Credit  Fee") with
respect to each Letter of Credit  issued or renewed,  at rate per annum equal to
(i) in respect of each standby  Letter of Credit,  the Letter of Credit Rate (as
set forth in the Applicable  Pricing),  and (ii) in respect of each  documentary
Letter of Credit, 75% of the Letter of Credit Rate (but not less than 0.50%), in
each case  computed on the Maximum  Drawing  Amount of such Letter of Credit for
the period  such Letter of Credit is  outstanding.  In respect of each Letter of
Credit,  the Borrower shall also pay to the Agent,  for the Agent's own account,
(x) on the date of issuance of any extension or renewal of a Letter of Credit, a
fronting fee in an amount equal to one-eighth of one percent (0.125%) multiplied
by the face  amount of such Letter of Credit and (y) at such other time or times
as such  charges  are  customarily  made by the  Agent,  the  Agent's  customary
issuance,   amendment,   negotiation   or   document   examination   and   other
administrative fees as in effect from time to time.

                          5.  CERTAIN GENERAL PROVISIONS.

      5.1. Agent's Fee. The Borrower shall pay to the Agent annually in advance,
for the Agent's own account,  on the Closing Date and on each anniversary of the
Closing Date, an Agent's fee initially in the amount of $30,000.

      5.2.  Arrangement  Fee. The Borrower  agrees to pay to the Agent,  for the
account of BancBoston Robertson Stephens Inc., as Arranger, on the Closing Date,
an arrangement fee as set forth the fee letter dated November 3, 1999, among the
Borrower, the Agent and BancBoston Robertson Stephens Inc.

      5.3.  Funds for Payments.

            5.3.1.  Payments  to Agent.  All  payments of  principal,  interest,
Reimbursement  Obligations,  Letter of Credit Fees,  Facility Fees,  Utilization
Fees and any  other  amounts  due  hereunder  or  under  any of the  other  Loan
Documents shall be made on the due date thereof to the Agent in Dollars, for the
respective accounts of the Banks and the Agent, at the Agent's Head Office or at
such other place that the Agent may from time to time designate, in each case at
or about  11:00 a.m.  (Boston,  Massachusetts,  time or other  local time at the
place of payment) and in immediately available funds.

            5.3.2.  No Offset,  etc. All payments by the Borrower  hereunder and
under any of the other Loan Documents shall be made without  recoupment,  setoff
or  counterclaim  and free and clear of and  without  deduction  for any  taxes,
levies,  imposts,  duties, charges, fees, deductions,  withholdings,  compulsory
loans,  restrictions  or  conditions  of any nature now or hereafter  imposed or
levied by any  jurisdiction  or any political  subdivision  thereof or taxing or
other  authority  therein  unless the  Borrower is compelled by law to make such
deduction or  withholding.  If any such  obligation is imposed upon the Borrower
with  respect to any amount  payable by it  hereunder  or under any of the other
Loan Documents, the Borrower will pay to the Agent, for the account of the Banks
or (as the case may be) the Agent,  on the date on which such  amount is due and
payable hereunder or under such other Loan Document,

<PAGE>

      such  additional  amount in  Dollars as shall be  necessary  to enable the
Banks or the Agent to receive  the same net amount  which the Banks or the Agent
would have  received on such due date had no such  obligation  been imposed upon
the Borrower.  The Borrower will deliver  promptly to the Agent  certificates or
other valid  vouchers for all taxes or other charges  deducted from or paid with
respect to  payments  made by the  Borrower  hereunder  or under such other Loan
Document.

      5.4.  Computations.  All computations of interest on the Loans (other than
LIBOR Rate Loans) and of Letter of Credit Fees,  Facility  Fees and  Utilization
Fees shall be based on a 365/366-day year and paid for the actual number of days
elapsed.  Computations  of  interest  on LIBOR  Rate  Loans  shall be based on a
360-day year and paid for the actual number of days elapsed. Except as otherwise
provided in the  definition  of the term  Interest  Period with respect to LIBOR
Rate  Loans,  whenever  a  payment  hereunder  or under  any of the  other  Loan
Documents becomes due on a day that is not a Business Day, the due date for such
payment  shall be extended to the next  succeeding  Business  Day,  and interest
shall  accrue  during such  extension.  The  outstanding  amount of the Loans as
reflected  on the  Records  of the  related  Notes  from  time to time  shall be
considered  correct and binding on the Borrower  unless within five (5) Business
Days  after  receipt  of any  notice  by the  Agent or any of the  Banks of such
outstanding  amount,  the Agent or such Bank shall  notify the  Borrower  to the
contrary.

      5.5.  Inability  to  Determine  LIBOR  Rate.  In the  event,  prior to the
commencement  of any Interest  Period relating to any LIBOR Rate Loan, the Agent
shall  determine  that  adequate  and  reasonable   methods  do  not  exist  for
ascertaining the LIBOR Rate that would otherwise  determine the rate of interest
to be  applicable to any LIBOR Rate Loan during any Interest  Period,  the Agent
shall forthwith give notice of such determination (which shall be conclusive and
binding on the Borrower  and the Banks) to the  Borrower and the Banks.  In such
event (i) any Loan  Request or  Conversion  Request  with  respect to LIBOR Rate
Loans shall be  automatically  withdrawn  and shall be deemed a request for Base
Rate Loans, (ii) each LIBOR Rate Loan will automatically, on the last day of the
then current  Interest  Period  relating  thereto,  become a Base Rate Loan, and
(iii) the  obligations  of the Banks to make LIBOR Rate Loans shall be suspended
until the Agent determines that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent shall so notify the Borrower and the Banks.

      5.6.  Illegality.  Notwithstanding  any other  provisions  herein,  if any
present or future law, regulation,  treaty or directive or in the interpretation
or  application  thereof shall make it unlawful for any Bank to make or maintain
LIBOR Rate Loans, such Bank shall forthwith give notice of such circumstances to
the Borrower and the other Banks and thereupon  (i) the  commitment of such Bank
to make LIBOR Rate  Loans or convert  Loans of another  Type to LIBOR Rate Loans
shall  forthwith be suspended  and (ii) such Bank's  Loans then  outstanding  as
LIBOR Rate Loans, if any, shall be converted automatically to Base Rate Loans on
the last day of each  Interest  Period  applicable  to such  LIBOR Rate Loans or
within such earlier period as may be required by law. The Borrower hereby agrees
promptly  to pay the Agent for the  account  of such Bank,  upon  demand by such
Bank, any  additional  amounts  necessary to compensate  such Bank for any costs
incurred by such Bank in

<PAGE>

making any  conversion  in  accordance  with this  Section  5.6,  including  any
interest  or fees  payable by such Bank to lenders  of funds  obtained  by it in
order to make or maintain its LIBOR Rate Loans hereunder.

      5.7. Additional Costs, etc. If any present or future applicable law, which
expression,  as used herein, includes statutes, rules and regulations thereunder
and  interpretations  thereof by any competent  court or by any  governmental or
other  regulatory  body or  official  charged  with  the  administration  or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank or
the Agent by any  central  bank or other  fiscal,  monetary  or other  authority
(whether or not having the force of law), shall:

      (a) subject any Bank or the Agent to any tax, levy, impost,  duty, charge,
fee,  deduction  or  withholding  of any  nature  with  respect  to this  Credit
Agreement,  the other  Loan  Documents,  any  Letters  of  Credit,  such  Bank's
Commitment  or the Loans  (other than taxes based upon or measured by the income
or profits of such Bank or the Agent), or

      (b) materially  change the basis of taxation  (except for changes in taxes
on  income  or  profits)  of  payments  to any Bank of the  principal  of or the
interest  on any Loans or any  other  amounts  payable  to any Bank or the Agent
under this Credit Agreement or any of the other Loan Documents, or

      (c) impose or  increase  or render  applicable  (other  than to the extent
specifically  provided  for  elsewhere  in this  Credit  Agreement)  any special
deposit,  reserve,  assessment,  liquidity,  capital  adequacy or other  similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or letters of credit  issued by,
or commitments of an office of any Bank, or

      (d) impose on any Bank or the Agent any other  conditions or  requirements
with respect to this Credit Agreement,  the other Loan Documents, any Letters of
Credit,  the Loans, such Bank's  Commitment,  or any class of loans,  letters of
credit or commitments of which any of the Loans or such Bank's  Commitment forms
a part, and the result of any of the foregoing is

            (i) to increase  the cost to any Bank of making,  funding,  issuing,
renewing, extending or maintaining any of the Loans or such Bank's Commitment or
any Letter of Credit, or

            (ii) to reduce  the  amount of  principal,  interest,  Reimbursement
Obligation  or other  amount  payable  to such  Bank or the Agent  hereunder  on
account of such Bank's Commitment, any Letter of Credit or any of the Loans, or

            (iii) to  require  such Bank or the Agent to make any  payment or to
forego any interest or Reimbursement  Obligation or other sum payable hereunder,
the amount of which payment or foregone interest or Reimbursement  Obligation or
other sum is calculated  by reference to the gross amount of any sum  receivable
or deemed received by such Bank or the Agent from the Borrower hereunder,

<PAGE>

      then, and in each such case,  the Borrower will,  upon demand made by such
Bank or (as the case may be) the  Agent at any time and from time to time and as
often as the  occasion  therefor  may arise,  pay to such Bank or the Agent such
additional  amounts as will be sufficient  to compensate  such Bank or the Agent
for  such  additional  cost,   reduction,   payment  or  foregone   interest  or
Reimbursement Obligation or other sum.

      5.8.  Capital  Adequacy.  If after the date  hereof  any Bank or the Agent
determines  that (i) the  adoption of or change in any law,  governmental  rule,
regulation,  policy,  guideline or directive (whether or not having the force of
law) regarding  capital  requirements for banks or bank holding companies or any
change in the  interpretation or application  thereof by a court or governmental
authority with appropriate jurisdiction,  or (ii) compliance by such Bank or the
Agent  or any  corporation  controlling  such  Bank or the  Agent  with any law,
governmental rule,  regulation,  policy,  guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy,  has the
effect of  reducing  the return on such Bank's or the  Agent's  commitment  with
respect to any Loans to a level  below  that which such Bank or the Agent  could
have  achieved  but  for  such  adoption,  change  or  compliance  (taking  into
consideration  such Bank's or the Agent's then existing policies with respect to
capital adequacy and assuming full utilization of such entity's  capital) by any
amount  deemed by such  Bank or (as the case may be) the  Agent to be  material,
then such Bank or the Agent may notify the Borrower of such fact.  To the extent
that the amount of such  reduction in the return on capital is not  reflected in
the Base Rate, the Borrower  agrees to pay such Bank or (as the case may be) the
Agent for the amount of such reduction in the return on capital as and when such
reduction is determined  upon  presentation by such Bank or (as the case may be)
the Agent of a certificate  in accordance  with ss.5.9  hereof.  Each Bank shall
allocate  such  cost  increases  among  its  customers  in good  faith and on an
equitable basis.

      5.9.  Certificate.  A  certificate  setting forth any  additional  amounts
payable pursuant to Sections 5.7 or 5.8 and a brief  explanation of such amounts
which  are due,  submitted  by any Bank or the Agent to the  Borrower,  shall be
prima facie evidence,  absent  demonstrable error, that such amounts are due and
owing.

      5.10.  Indemnity.  The Borrower  agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (i)
default by the Borrower in payment of the principal amount of or any interest on
any LIBOR Rate  Loans as and when due and  payable,  including  any such loss or
expense  arising from  interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain  its LIBOR Rate Loans,  (ii)  default by the
Borrower in making a borrowing or conversion after the Borrower has given (or is
deemed to have given) a Loan Request or a Conversion Request relating thereto in
accordance  with Secton 2.7 or Section 2.8 or (iii) the making of any payment of
a LIBOR  Rate Loan or the  making of any  conversion  of any such Loan to a Base
Rate Loan on a day that is not the last day of the  applicable  Interest  Period
with respect thereto, including interest or fees payable by such Bank to lenders
of funds obtained by it in order to maintain any such Loans.

<PAGE>

      5.11.  Interest After Default.

            5.11.1.  Overdue  Amounts.  Overdue  principal  and (to  the  extent
permitted by applicable law) interest on the Loans and all other overdue amounts
payable  hereunder or under any of the other Loan Documents  shall bear interest
compounded  monthly  and  payable  on demand  at a rate per  annum  equal to two
percent (2%) above the rate otherwise applicable until such amount shall be paid
in full (after as well as before judgment).

            5.11.2.  Amounts Not Overdue.  During the continuance of an Event of
Default  the  principal  of the Loans not  overdue  shall,  until  such Event of
Default  has been cured or  remedied or such Event of Default has been waived by
the Majority Banks pursuant to ss.25, bear interest at a rate per annum equal to
two percent (2%) above the rate of interest  otherwise  applicable to such Loans
hereunder.

      5.12. HLT Classification.  If, after the date hereof, the Agent determines
or is advised by any Bank that such Bank has  determined,  or the Agent receives
notice  from or is advised by any Bank that such Bank has  received  notice from
any   governmental   authority,   central  bank  or  comparable   agency  having
jurisdiction  over such Bank,  that any of the  Commitments,  Loans,  Letters of
Credit or Letter of Credit  Participations are classified as a "highly leveraged
transaction"  (an "HLT  Classification")  pursuant to any  existing  regulations
regarding  "highly  leveraged  transactions" or any  modification,  amendment or
interpretation  thereof,  or the adoption of new regulations  regarding  "highly
leveraged  transactions"  after the date hereof by any  governmental  authority,
central bank or comparable  agency, the Agent shall promptly give notice of such
HLT  Classification  to the Borrower and the Banks. The Agent, the Banks and the
Borrower shall  thereupon  commence  negotiations  in good faith to agree on the
extent  to which  fees,  interest  rates  and/or  margins  hereunder  should  be
increased  so as to reflect  such HLT  Classification.  If the  Borrower and the
Majority  Banks agree on the amount of such increase or  increases,  this Credit
Agreement  shall  be  promptly  amended  to  give  effect  to such  increase  or
increases.  If the  Borrower  and the  Majority  Banks  fail to so agree and the
Borrower has failed to refinance the  Obligations  within ninety (90) days after
notice is given by the Agent as  provided  above,  then the Agent  shall,  if so
requested  by the  Majority  Banks,  by notice  to the  Borrower  terminate  the
Commitments,  and the Commitments shall thereupon terminate, with the provisions
of Sections  3.2 and 4.2(c) then  becoming  applicable.  The Agent and the Banks
acknowledge that an HLT Classification is not a Default or an Event of Default.

      5.13.  Guaranties of  Subsidiaries.  The  Obligations  shall be guaranteed
pursuant to the terms of the Guaranty given by each Significant Subsidiary.  The
Borrower  agrees to notify the Agent promptly of any Subsidiary  qualifying as a
Significant Subsidiary which shall not have theretofore executed and delivered a
Guaranty,  and to cause such Subsidiary to execute and deliver a Guaranty to the
Agent.

                        6.  REPRESENTATIONS AND WARRANTIES.

      The  Borrower  represents  and  warrants  to the  Banks  and the  Agent as
follows:

<PAGE>

      6.1.  Corporate Authority.

            6.1.1.  Incorporation;  Good Standing.  Each of the Borrower and its
Significant  Subsidiaries (i) is a corporation duly organized,  validly existing
and in good standing under the laws of its state of incorporation,  (ii) has all
requisite  corporate  power to own its  property and conduct its business as now
conducted  and as  presently  contemplated,  and (iii) is in good  standing as a
foreign  corporation and is duly authorized to do business in each  jurisdiction
where such  qualification is necessary except where a failure to be so qualified
would not have a materially adverse effect on the business,  assets or financial
condition of the Borrower or such Subsidiary. Schedule 6.1 hereto sets forth the
names and  jurisdictions  of organization  of all  Subsidiaries of the Borrower,
specifying those which are Significant Subsidiaries on the date hereof.

            6.1.2.  Authorization.  The execution,  delivery and  performance of
this Credit  Agreement and the other Loan Documents to which the Borrower or any
of its Subsidiaries is or is to become a party and the transactions contemplated
hereby and thereby (i) are within the corporate  authority of such Person,  (ii)
have been duly authorized by all necessary corporate  proceedings,  (iii) do not
conflict with or result in any breach or  contravention of any provision of law,
statute,  rule or regulation to which the Borrower or any of its Subsidiaries is
subject or any judgment,  order, writ, injunction,  license or permit applicable
to the Borrower or any of its  Subsidiaries  and (iv) do not  conflict  with any
provision  of the  corporate  charter  or bylaws of, or any  agreement  or other
instrument binding upon, the Borrower or any of its Subsidiaries.

            6.1.3.  Enforceability.  The  execution  and delivery of this Credit
Agreement  and the other  Loan  Documents  to which the  Borrower  or any of its
Subsidiaries is or is to become a party will result in valid and legally binding
obligations  of such  Person  enforceable  against  it in  accordance  with  the
respective terms and provisions hereof and thereof,  except as enforceability is
limited by  bankruptcy,  insolvency,  reorganization,  moratorium  or other laws
relating to or affecting  generally the  enforcement  of  creditors'  rights and
except to the extent that availability of the remedy of specific  performance or
injunctive  relief is subject to the  discretion  of the court  before which any
proceeding therefor may be brought.

      6.2. Governmental  Approvals.  The execution,  delivery and performance by
the Borrower and any of its  Subsidiaries of this Credit Agreement and the other
Loan  Documents  to which the  Borrower or any of its  Subsidiaries  is or is to
become a party and the  transactions  contemplated  hereby  and  thereby  do not
require the approval or consent of, or filing with, any  governmental  agency or
authority other than those already obtained.

      6.3.  Title to  Properties;  Leases.  Except as  indicated on Schedule 6.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected in the
consolidated  balance  sheet  of the  Borrower  and its  Subsidiaries  as at the
Balance Sheet Date or acquired since that date (except  property and assets sold
or otherwise  disposed of in the ordinary  course of business  since that date),
subject to no rights of others, including any mortgages, leases,

<PAGE>

      conditional sales agreements,  title retention agreements,  liens or other
encumbrances except Permitted Liens.

      6.4.  Financial Statements.

            6.4.1.  Fiscal  Year.  The  Borrower  and  each  of its  Significant
Subsidiaries  has a fiscal year which is the twelve  months ending on the Friday
closest to November 30 in each calendar year.

            6.4.2. Financial Statements. There has been furnished to each of the
Banks  an  unaudited   consolidated  balance  sheet  of  the  Borrower  and  its
Subsidiaries  as at  the  Balance  Sheet  Date,  and an  unaudited  consolidated
statement  of income of the Borrower  and its  Subsidiaries  for the fiscal year
then  ended.  The  Borrower  shall  furnish  to  each of the  Banks,  as soon as
available,  a copy of such  consolidated  balance  sheet as at the Balance Sheet
Date  and such  consolidated  statement  for the  fiscal  year  then  ended,  as
certified by  PricewaterhouseCoopers  LLP. Such balance sheets and statements of
income have been  prepared in  accordance  with  generally  accepted  accounting
principles and fairly present the financial  condition of the Borrower as at the
close of business on the date  thereof  and the  results of  operations  for the
fiscal  year  then  ended  (subject,  in the  case  of the  unaudited  financial
statements,   to  adjustments  and  notes  included  in  the  audited  financial
statements).  There are no contingent  liabilities of the Borrower or any of its
Subsidiaries as of such date involving  material amounts,  known to the officers
of the  Borrower,  which were not  disclosed in such balance sheet and the notes
related thereto.

      6.5. No Material Changes, etc. Since the Balance Sheet Date, except as set
forth in Schedule 6.5 hereto, there has occurred no materially adverse change in
the financial  condition or business of the Borrower and its Subsidiaries  taken
as a whole as shown on or reflected  in the  consolidated  balance  sheet of the
Borrower and its  Subsidiaries as at the Balance Sheet Date, or the consolidated
statement  of income for the fiscal year then ended,  other than  changes in the
ordinary  course of business  that have not had any  materially  adverse  effect
either  individually or in the aggregate on the business or financial  condition
of the Borrower or any of its Significant Subsidiaries.  Since the Balance Sheet
Date,  except  as set  forth in  Schedule  6.5,  the  Borrower  has not made any
Distribution.

      6.6. Franchises,  Patents,  Copyrights,  etc. Each of the Borrower and its
Subsidiaries possesses all franchises,  patents,  copyrights,  trademarks, trade
names,  licenses and permits,  and rights in respect of the foregoing,  adequate
for the conduct of its business  substantially  as now  conducted  without known
conflict with any rights of others.

      6.7. Litigation.  Except as set forth in Schedule 6.7 hereto, there are no
actions, suits,  proceedings or investigations of any kind pending or threatened
against the Borrower or any of its  Subsidiaries  before any court,  tribunal or
administrative agency or board that, if adversely  determined,  might, either in
any  case or in the  aggregate,  materially  adversely  affect  the  properties,
assets,  financial  condition or business of the  Borrower and its  Subsidiaries
considered  as a whole or  materially  impair the right of the  Borrower and its
Subsidiaries considered as a whole to carry on business

<PAGE>

      substantially  as now  conducted  by them,  or result  in any  substantial
liability not adequately  covered by insurance,  or for which adequate  reserves
are not  maintained  on the  consolidated  balance sheet of the Borrower and its
Subsidiaries,  or which question the validity of this Credit Agreement or any of
the other Loan Documents,  or any action taken or to be taken pursuant hereto or
thereto.

      6.8. No Materially Adverse Contracts, etc. Neither the Borrower nor any of
its Significant Subsidiaries is subject to any charter, corporate or other legal
restriction,  or any judgment,  decree, order, rule or regulation that has or is
expected  in the future to have a  materially  adverse  effect on the  business,
assets  or  financial  condition  of the  Borrower  or  any  of its  Significant
Subsidiaries.  Neither the Borrower nor any of its Significant Subsidiaries is a
party to any contract or agreement  that has or is expected,  in the judgment of
the Borrower's  officers,  to have any materially adverse effect on the business
of the Borrower or any of its Significant Subsidiaries.

      6.9.  Compliance with Other  Instruments,  Laws, etc. Neither the Borrower
nor any of its Significant  Subsidiaries is in violation of any provision of its
charter  documents,  bylaws,  or any  agreement or instrument to which it may be
subject  or by which  it or any of its  properties  may be bound or any  decree,
order, judgment,  statute,  license, rule or regulation, in any of the foregoing
cases in a manner that could result in the imposition of  substantial  penalties
or  materially  and  adversely  affect the  financial  condition,  properties or
business of the Borrower or any of its Significant Subsidiaries.

      6.10. Tax Status. The Borrower and its Subsidiaries (i) have made or filed
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which any of them is subject, (ii) have paid all
taxes and other  governmental  assessments and charges shown or determined to be
due on such returns,  reports and declarations,  except those being contested in
good  faith and by  appropriate  proceedings  and (iii)  have set aside on their
books  provisions  reasonably  adequate for the payment of all taxes for periods
subsequent to the periods to which such returns,  reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Borrower know of no basis
for any such claim.

      6.11.  No  Event of  Default.    No  Default  or Event  of  Default  has
occurred and is continuing.

      6.12.  Holding Company and Investment  Company Acts.  Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company",  or an affiliate" of a "holding company", as such terms are
defined  in  the  Public  Utility  Holding  Company  Act of  1935;  nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.

      6.13.  Absence  of  Financing  Statements,  etc.  Except  with  respect to
Permitted Liens, there is no financing statement, security agreement, chattel


<PAGE>

      mortgage,  real estate  mortgage or other  document filed or recorded with
any filing  records,  registry or other public  office,  that purports to cover,
affect or give  notice of any  present or  possible  future lien on, or security
interest  in, any assets or property of the  Borrower or any of its  Significant
Subsidiaries or any rights relating thereto.

      6.14. Certain Transactions.  Except as set forth in Schedule 6.14, none of
the officers,  directors, or employees of the Borrower or any of its Significant
Subsidiaries is presently a party to any transaction with the Borrower or any of
its Significant Subsidiaries (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the  furnishing  of services to or by,  providing for rental of real or personal
property to or from,  or  otherwise  requiring  payments to or from any officer,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership,  trust or other entity in which any officer,  director, or any such
employee  has a  substantial  interest  or is an officer,  director,  trustee or
partner.

      6.15.  Employee Benefit Plans.

            6.15.1.  In General.  Each Employee Benefit Plan and each Guaranteed
Pension  Plan has been  maintained  and operated in  compliance  in all material
respects with the provisions of ERISA and, to the extent  applicable,  the Code,
including but not limited to the  provisions  thereunder  respecting  prohibited
transactions  and the bonding of  fiduciaries  and other  persons  handling plan
funds as required by Section 412 of ERISA. The Borrower has heretofore delivered
to the Agent the most recently  completed  annual  report,  Form 5500,  with all
required  attachments,  and actuarial  statement  required to be submitted under
Section 103(d) of ERISA, with respect to each Guaranteed Pension Plan.

            6.15.2.  Terminability  of Welfare Plans. No Employee  Benefit Plan,
which is an employee  welfare benefit plan within the meaning of Section 3(1) or
Section 3(2)(B) of ERISA, provides benefit coverage subsequent to termination of
employment,  except as  required  by Title I, Part 6 of ERISA or the  applicable
state  insurance laws. The Borrower may terminate each such Plan at any time (or
at any time subsequent to the expiration of any applicable bargaining agreement)
in the discretion of the Borrower without liability to any Person other than for
claims arising prior to termination.

            6.15.3.  Guaranteed Pension Plans. Each contribution  required to be
made to a  Guaranteed  Pension  Plan,  whether  required to be made to avoid the
incurrence of an accumulated funding  deficiency,  the notice or lien provisions
of Section 302(f) of ERISA, or otherwise,  has been timely made. No waiver of an
accumulated  funding  deficiency or extension of  amortization  periods has been
received with respect to any  Guaranteed  Pension Plan, and neither the Borrower
nor any ERISA  Affiliate is obligated  to or has posted  security in  connection
with an amendment to a Guaranteed  Pension Plan pursuant to Section 307 of ERISA
or Section 401(a)(29) of the Code. No liability to the PBGC (other than required
insurance  premiums,  all of which  have  been  paid) has been  incurred  by the
Borrower or any ERISA Affiliate with respect to any Guaranteed  Pension Plan and
there has not been any ERISA  Reportable  Event (other than an ERISA  Reportable
Event as to which the requirement of 30 days

<PAGE>

      notice has been waived),  or any other event or condition which presents a
material risk of termination of any Guaranteed  Pension Plan by the PBGC.  Based
on the latest  valuation  of each  Guaranteed  Pension  Plan (which in each case
occurred  within twelve months of the date of this  representation),  and on the
actuarial  methods and assumptions  employed for that  valuation,  the aggregate
benefit  liabilities of all such Guaranteed  Pension Plans within the meaning of
Section  4001 of ERISA did not exceed the  aggregate  value of the assets of all
such  Guaranteed  Pension  Plans,  disregarding  for this  purpose  the  benefit
liabilities  and assets of any Guaranteed  Pension Plan with assets in excess of
benefit liabilities.

            6.15.4.  Multiemployer  Plans.  Neither the  Borrower  nor any ERISA
Affiliate has incurred any material liability (including secondary liability) to
any Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer  Plan  under  Section  4201 of ERISA  or as a result  of a sale of
assets  described in Section  4204 of ERISA.  Neither the Borrower nor any ERISA
Affiliate has been notified that any Multiemployer  Plan is in reorganization or
insolvent  under and within the meaning of Section 4241 or Section 4245 of ERISA
or is at risk of  entering  reorganization  or becoming  insolvent,  or that any
Multiemployer  Plan intends to terminate or has been  terminated  under  Section
4041A of ERISA.

      6.16.  Use of Proceeds.

            6.16.1.  General.  The proceeds of the Loans shall be used for share
repurchases  (subject to Section 8.4), acquisitions (subject to Section 8.5.3),
working capital and general corporate purposes.

            6.16.2.  Regulations  U and X. No portion of any Loan is to be used,
and no  portion of any Letter of Credit is to be  obtained,  for the  purpose of
purchasing or carrying any "margin security" or "margin stock" as such terms are
used in  Regulations  U and X of the Board of Governors  of the Federal  Reserve
System, 12 C.F.R. Parts 221 and 224.

            6.16.3.  Ineligible  Securities.  No portion of the  proceeds of any
Loans is to be used,  and no portion of any Letter of Credit is to be  obtained,
for the purpose of knowingly  purchasing,  or providing  credit  support for the
purchase  of,  during the  underwriting  or  placement  period or within 30 days
thereafter,  any Ineligible  Securities  underwritten  or privately  placed by a
Section 20 Subsidiary.

      6.17. Environmental Compliance. The Borrower has taken all necessary steps
to investigate  the past and present  condition and usage of the Real Estate and
the operations  conducted  thereon and, based upon such diligent  investigation,
has determined that, except as set forth on Schedule 6.17 attached hereto:

      (a) none of the  Borrower,  its  Subsidiaries  or any operator of the Real
Estate or any operations thereon is in violation,  or alleged violation,  of any
judgment,  decree,  order,  law,  license,  rule  or  regulation  pertaining  to
environmental  matters,  including without  limitation,  those arising under the
Resource Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended

<PAGE>

      ("CERCLA"),  the  Superfund  Amendments  and  Reauthorization  Act of 1986
("SARA"),  the Federal  Clean Water Act,  the Federal  Clean Air Act,  the Toxic
Substances  Control Act, or any state or local statute,  regulation,  ordinance,
order or decree  relating  to  health,  safety or the  environment  (hereinafter
"Environmental  Laws"),  which violation would have a material adverse effect on
the environment or the business,  assets or financial  condition of the Borrower
or any of its Subsidiaries;

      (b) neither the Borrower nor any of its  Subsidiaries  has received notice
from any third party including,  without limitation, any federal, state or local
governmental  authority,  (i) that any one of them  has been  identified  by the
United  States   Environmental   Protection  Agency  ("EPA")  as  a  potentially
responsible  party under  CERCLA with  respect to a site listed on the  National
Priorities  List, 40 C.F.R.  Part 300 Appendix B; (ii) that any hazardous waste,
as defined by 42 U.S.C.  Section 6903(5), any hazardous substances as defined by
42 U.S.C. Section 9601(14), any pollutant or contaminant as defined by 42 U.S.C.
Section 9601(33) and any toxic substances,  oil or hazardous  materials or other
chemicals  or  substances   regulated  by  any  Environmental  Laws  ("Hazardous
Substances") which any one of them has generated, transported or disposed of has
been found at any site at which a federal,  state or local agency or other third
party has conducted or has ordered that any Borrower or any of its  Subsidiaries
conduct a remedial  investigation,  removal or other response action pursuant to
any  Environmental  Law;  or (iii)  that it is or shall be a named  party to any
claim, action, cause of action, complaint, or legal or administrative proceeding
(in each  case,  contingent  or  otherwise)  arising  out of any  third  party's
incurrence  of costs,  expenses,  losses or  damages of any kind  whatsoever  in
connection with the release of Hazardous Substances;

      (c) (i) no  portion  of the Real  Estate  has been used for the  handling,
processing,  storage or disposal of Hazardous  Substances  except in  accordance
with applicable Environmental Laws; and no underground tank or other underground
storage  receptacle  for  Hazardous  Substances is located on any portion of the
Real Estate; (ii) in the course of any activities conducted by the Borrower, its
Subsidiaries or operators of its properties,  no Hazardous  Substances have been
generated  or are  being  used on the Real  Estate  except  in  accordance  with
applicable  Environmental Laws; (iii) there have been no releases (i.e. any past
or present releasing,  spilling, leaking, pumping, pouring, emitting,  emptying,
discharging,  injecting,  escaping, disposing or dumping) or threatened releases
of Hazardous Substances on, upon, into or from the properties of the Borrower or
its  Subsidiaries,  which releases  would have a material  adverse effect on the
value of any of the Real Estate or adjacent properties or the environment;  (iv)
to the best of the Borrower's  knowledge,  there have been no releases on, upon,
from or into any real  property in the vicinity of any of the Real Estate which,
through soil or groundwater  contamination,  may have come to be located on, and
which would have a material adverse effect on the value of, the Real Estate; and
(v) in addition, any Hazardous Substances that have been generated on any of the
Real  Estate  have  been   transported   offsite  only  by  carriers  having  an
identification  number  issued  by the  EPA,  treated  or  disposed  of  only by
treatment or disposal  facilities  maintaining  valid permits as required  under
applicable Environmental Laws, which transporters and facilities have been

<PAGE>

      and  are,  to  the  best  of  the  Borrower's  knowledge,  operating  in
compliance with such permits and applicable Environmental Laws; and

      (d) None of the Borrower and its Subsidiaries,  any Mortgaged  Property or
any of the other  Real  Estate is subject to any  applicable  environmental  law
requiring the  performance  of Hazardous  Substances  site  assessments,  or the
removal or remediation of Hazardous  Substances,  or the giving of notice to any
governmental  agency  or the  recording  or  delivery  to  other  Persons  of an
environmental disclosure document or statement by virtue of the transactions set
forth herein and contemplated  hereby, or as a condition to the recording of any
Mortgage or to the effectiveness of any other transactions contemplated hereby.

      6.18.  Subsidiaries,  etc. Schedule 6.1 hereto sets forth all Subsidiaries
of the  Borrower.  Except as set forth on  Schedule  6.18  hereto,  neither  the
Borrower nor any  Subsidiary  of the Borrower is engaged in any joint venture or
partnership with any other Person.

      6.19. Year 2000 Problem.  The Borrower and its  Significant  Subsidiaries,
prior to December 31, 1999,  had (i) reviewed the areas within their  businesses
and operations which could be adversely affected by failure to become "Year 2000
Compliant" (i.e. to assure that computer  applications,  imbedded microchips and
other systems used by the Borrower or any of its Significant Subsidiaries, would
be able  properly to recognize  and perform  properly  date-sensitive  functions
involving certain dates prior to and any date after December 31, 1999), and (ii)
committed  substantial  resources to being Year 2000 Compliant.  Based upon such
review and upon  experience  since  December 31, 1999,  the Borrower  reasonably
believes  that the  Borrower  and its  Significant  Subsidiaries  are Year  2000
Compliant  except to the extent that  failure to be in  compliance  has and will
have no materially adverse effect on the business or financial  condition of the
Borrower or any of its Significant Subsidiaries.

      6.20.  Disclosure.  None of this Credit Agreement or any of the other Loan
Documents  contains any untrue  statement of a material fact or omits to state a
material fact (known to the Borrower or any of its  Significant  Subsidiaries in
the  case of any  document  or  information  not  furnished  by it or any of its
Significant  Subsidiaries)  necessary in order to make the statements  herein or
therein  not  misleading.  There is no fact known to the  Borrower or any of its
Significant  Subsidiaries  which  materially  adversely  affects,  or  which  is
reasonably likely in the future to materially  adversely  affect,  the business,
assets,  financial  condition  or  prospects  of  the  Borrower  or  any  of its
Significant Subsidiaries, exclusive of effects resulting from changes in general
economic conditions, legal standards or regulatory conditions.

                     7.  AFFIRMATIVE COVENANTS OF THE BORROWER.

      The  Borrower  covenants  and  agrees  that,  so long as any Loan,  Unpaid
Reimbursement  Obligation,  Letter of Credit or Note is  outstanding or any Bank
has any  obligation to make any Loans or the Agent has any  obligation to issue,
extend or renew any Letters of Credit:

<PAGE>

      7.1. Punctual Payment.  The Borrower will duly and punctually pay or cause
to  be  paid  the  principal  and  interest  on  the  Loans,  all  Reimbursement
Obligations, the Letter of Credit Fees, the Facility Fees, the Utilization Fees,
the Agent's fee and all other amounts  provided for in this Credit Agreement and
the other Loan Documents to which the Borrower or any of its  Subsidiaries  is a
party,  all in accordance with the terms of this Credit Agreement and such other
Loan Documents.

      7.2. Maintenance of Office. The Borrower will maintain its chief executive
office in Lexington,  Massachusetts, or at such other place in the United States
of America as the Borrower  shall  designate  upon written  notice to the Agent,
where notices,  presentations  and demands to or upon the Borrower in respect of
the Loan Documents to which the Borrower is a party may be given or made.

      7.3.  Records and Accounts.  The Borrower will (i) keep, and cause each of
its  Subsidiaries  to keep,  true and  accurate  records and books of account in
which full,  true and correct  entries will be made in accordance with generally
accepted accounting principles, (ii) maintain adequate accounts and reserves for
all taxes (including income taxes),  depreciation,  depletion,  obsolescence and
amortization  of  its  properties  and  the  properties  of  its   Subsidiaries,
contingencies,   and   other   reserves,   and   (iii)  at  all   times   engage
PricewaterhouseCoopers  LLP or other  independent  certified public  accountants
reasonably  satisfactory  to the  Agent  as  the  independent  certified  public
accountants of the Borrower and its  Subsidiaries  and will not permit more than
thirty  (30)  days to  elapse  between  the  cessation  of such  firm's  (or any
successor firm's) engagement as the independent  certified public accountants of
the Borrower and its  Subsidiaries  and the  appointment  in such  capacity of a
successor firm as shall be reasonably satisfactory to the Agent.

      7.4.  Financial Statements,  Certificates and Information.  The Borrower
will deliver to each of the Banks:

      (a) as soon as  practicable,  but in any event not later than  ninety (90)
days after the end of each fiscal year of the Borrower, the consolidated balance
sheet of the Borrower and its  Subsidiaries  as at the end of such year, and the
related consolidated statement of income and consolidated statement of cash flow
for such year,  each  setting  forth in  comparative  form the  figures  for the
previous  fiscal year and all such  consolidated  statements to be in reasonable
detail,  prepared in accordance with generally accepted  accounting  principles,
and certified without  qualification by  PricewaterhouseCoopers  LLP or by other
independent certified public accountants  reasonably  satisfactory to the Agent,
together with a written  statement from such accountants to the effect that they
have read a copy of this Credit  Agreement,  and that, in making the examination
necessary to said certification,  they have obtained no knowledge of any Default
or Event of Default,  or, if such accountants  shall have obtained  knowledge of
any then  existing  Default or Event of  Default  they  shall  disclose  in such
statement any such Default or Event of Default;  provided that such  accountants
shall not be liable to the Banks for failure to obtain  knowledge of any Default
or Event of Default;  and  simultaneously  with the  delivery  of the  financial
statements referred to in this subsection (a), a consolidated financial

<PAGE>

      forecast  for the  Borrower  and its  Subsidiaries  for the then current
fiscal year;

      (b) as soon as  practicable,  but in any event not later  than  forty-five
(45) days after the end of each of the fiscal  quarters of the Borrower,  copies
of the unaudited consolidated balance sheet of the Borrower and its Subsidiaries
as at the end of such quarter, and the related consolidated  statement of income
and consolidated statement of cash flow for the portion of the Borrower's fiscal
year then  elapsed,  all in reasonable  detail and prepared in  accordance  with
generally accepted accounting  principles,  together with a certification by the
principal  financial or accounting  officer of the Borrower that the information
contained in such financial statements fairly presents the financial position of
the  Borrower  and its  Subsidiaries  on the date  thereof  (subject to year-end
adjustments);

      (c) simultaneously with the delivery of the financial  statements referred
to in  subsections  (a) and (b) above,  a statement  certified by the  principal
financial or  accounting  officer of the Borrower in  substantially  the form of
Exhibit F hereto (a  "Compliance  Certificate")  and setting forth in reasonable
detail computations  evidencing  compliance with the covenants contained in ss.9
and (if applicable)  reconciliations  to reflect  changes in generally  accepted
accounting principles since the Balance Sheet Date;

      (d)  contemporaneously  with the filing or mailing thereof,  copies of all
material of a financial nature filed with the Securities and Exchange Commission
or sent to the stockholders of the Borrower;

      (e) from time to time such other financial data and information (including
accountants,  management  letters)  as the  Agent  or any  Bank  may  reasonably
request.

      7.5.  Notices.

            7.5.1.  Defaults.  The Borrower will  promptly  notify the Agent and
each of the  Banks in  writing  of the  occurrence  of any  Default  or Event of
Default. If any Person shall give any notice or take any other action in respect
of a claimed  default  (whether or not  constituting  an Event of Default) under
this Credit Agreement or any other note, evidence of indebtedness,  indenture or
other  obligation  to which or with  respect to which the Borrower or any of its
Subsidiaries is a party or obligor, whether as principal,  guarantor,  surety or
otherwise, the Borrower shall forthwith give written notice thereof to the Agent
and each of the  Banks,  describing  the  notice or action and the nature of the
claimed default.

            7.5.2.  Environmental Events. The Borrower will promptly give notice
to the Agent and each of the Banks (i) of any violation of any Environmental Law
that the Borrower or any of its Subsidiaries reports in writing or is reportable
by such Person in writing (or for which any written report  supplemental  to any
oral report is made) to any  federal,  state or local  environmental  agency and
(ii) upon becoming aware thereof, of any inquiry, proceeding,  investigation, or
other  action,  including  a notice from any agency of  potential  environmental
liability,  of any federal,  state or local environmental  agency or board, that
has the potential to materially

<PAGE>

      affect the assets,  liabilities,  financial  conditions or operations of
the Borrower or any of its Subsidiaries.

      7.5.3.  Notice of Litigation  and  Judgments.  The Borrower will, and will
cause  each of its  Subsidiaries  to,  give  notice to the Agent and each of the
Banks in writing within fifteen (15) days of becoming aware of any litigation or
proceedings  threatened  in writing or any pending  litigation  and  proceedings
affecting  the Borrower or any of its  Subsidiaries  or to which the Borrower or
any of its  Subsidiaries  is or becomes a party  involving  an  uninsured  claim
against  the  Borrower  or any of its  Subsidiaries  that  could  reasonably  be
expected  to have a  materially  adverse  effect on the  Borrower  or any of its
Subsidiaries   and  stating  the  nature  and  status  of  such   litigation  or
proceedings. The Borrower will, and will cause each of its Subsidiaries to, give
notice  to the Agent  and each of the  Banks,  in  writing,  in form and  detail
satisfactory  to the Agent,  within ten (10) days of any judgment not covered by
insurance,  final or otherwise,  against the Borrower or any of its Subsidiaries
in an amount in excess of $5,000,000.

      7.6. Corporate Existence;  Maintenance of Properties. The Borrower will do
or cause to be done all things  necessary to preserve and keep in full force and
effect  its  corporate  existence,  rights  and  franchises  and  those  of  its
Significant  Subsidiaries  and will not, and will not cause or permit any of its
Significant Subsidiaries to, convert to a limited liability company. It (i) will
cause all of its properties and those of its  Significant  Subsidiaries  used or
useful  in the  conduct  of its  business  or the  business  of its  Significant
Subsidiaries  to be maintained  and kept in good  condition,  repair and working
order and supplied with all necessary equipment,  (ii) will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the  judgment of the  Borrower  may be  necessary so that the business
carried on in connection therewith may be properly and advantageously  conducted
at all times,  and (iii) will, and will cause its  Subsidiaries  to, continue to
engage in Substantially the Same Business;  provided that nothing in this ss.7.6
shall prevent the Borrower from  discontinuing  the operation and maintenance of
any of its properties or any of those of its Subsidiaries if such discontinuance
is, in the  judgment of the  Borrower,  desirable in the conduct of its or their
business  and  that do not in the  aggregate  materially  adversely  affect  the
business of the Borrower and its Subsidiaries on a consolidated basis.

      7.7. Insurance. The Borrower will, and will cause each of its Subsidiaries
to,  maintain with  financially  sound and  reputable  insurers  insurance  with
respect to its properties and business against such casualties and contingencies
as shall be in accordance  with the general  practices of businesses  engaged in
similar activities in similar  geographic areas and in amounts,  containing such
terms, in such forms and for such periods as may be reasonable and prudent.

      7.8. Taxes. The Borrower will, and will cause each of its Subsidiaries to,
duly pay and  discharge,  or cause to be paid and  discharged,  before  the same
shall become  overdue,  all taxes,  assessments and other  governmental  charges
imposed  upon it and its real  properties,  sales  and  activities,  or any part
thereof,  or upon the  income or  profits  therefrom,  as well as all claims for
labor, materials, or supplies that if unpaid might by

<PAGE>

      law become a lien or charge upon any of its  property;  provided  that any
such tax, assessment,  charge, levy or claim need not be paid if the validity or
amount  thereof  shall  currently  be  contested  in good  faith by  appropriate
proceedings and if the Borrower or such  Subsidiary  shall have set aside on its
books  adequate  reserves with respect  thereto;  and provided  further that the
Borrower  and  each  Subsidiary  of  the  Borrower  will  pay  all  such  taxes,
assessments,  charges,  levies  or claims  forthwith  upon the  commencement  of
proceedings to foreclose any lien that may have attached as security therefor.

      7.9.  Inspection of Properties and Books, etc.

            7.9.1.  General.  The Borrower  shall permit the Banks,  through the
Agent or any of the  Banks'  other  designated  representatives,  to  visit  and
inspect any of the  properties  of the Borrower or any of its  Subsidiaries,  to
examine the books of account of the Borrower and its  Subsidiaries  (and to make
copies thereof and extracts therefrom), and to discuss the affairs, finances and
accounts of the Borrower and its Subsidiaries  with, and to be advised as to the
same by, its and their officers,  all at such reasonable  times and intervals as
the Agent or any Bank may reasonably request.

            7.9.2. Communications with Accountants.  The Borrower authorizes the
Agent and, if accompanied by the Agent,  the Banks to communicate  directly with
the Borrower's  independent  certified  public  accountants  and authorizes such
accountants  to  disclose  to the  Agent  and the  Banks  any and all  financial
statements  and other  supporting  financial  documents and schedules  including
copies  of  any  management  letter  with  respect  to the  business,  financial
condition and other affairs of the Borrower or any of its  Subsidiaries.  At the
request of the Agent,  the  Borrower  shall  deliver a letter  addressed to such
accountants  instructing  them to comply  with the  provisions  of this  Section
7.9.2.

      7.10. Compliance with Laws, Contracts, Licenses, and Permits. The Borrower
will, and will cause each of its Subsidiaries to, comply with (i) the applicable
laws  and  regulations  wherever  its  business  is  conducted,   including  all
Environmental  Laws,  (ii) the provisions of its charter  documents and by-laws,
(iii) all agreements and instruments by which it or any of its properties may be
bound  and  (iv)  all  applicable  decrees,   orders,  and  judgments.   If  any
authorization,  consent, approval, permit or license from any officer, agency or
instrumentality  of any government  shall become  necessary or required in order
that the Borrower or any of its  Subsidiaries may fulfill any of its obligations
hereunder  or any of the other  Loan  Documents  to which the  Borrower  or such
Subsidiary  is a party,  the Borrower  will,  or (as the case may be) will cause
such Subsidiary to,  immediately  take or cause to be taken all reasonable steps
within  the  power  of  the   Borrower  or  such   Subsidiary   to  obtain  such
authorization,  consent,  approval,  permit or license and furnish the Agent and
the Banks with evidence thereof.

      7.11.  Employee  Benefit Plans. The Borrower will (i) promptly upon filing
the same with the Department of Labor or Internal Revenue Service,  upon request
of the Agent, furnish to the Agent a copy of the most recent actuarial statement
required to be submitted  under Section  103(d)of ERISA and Annual Report,  Form
5500, with all required attachments, in respect of each

<PAGE>

      Guaranteed  Pension  Plan and (ii)  promptly  upon  receipt  or  dispatch,
furnish to the Agent any notice, report or demand sent or received in respect of
a Guaranteed Pension Plan under Sections 302, 4041, 4042, 4043, 4063, 4065, 4066
and 4068 of ERISA, or in respect of a Multiemployer  Plan, under Sections 4041A,
4202, 4219, 4242, or 4245 of ERISA.

      7.12.  Use of Proceeds.  The  Borrower  will use the proceeds of the Loans
solely for share repurchase (subject to Section 8.4),  acquisitions  (subject to
Section  6.16.2,  Section 6.16.3 and Section 8.5.3) working  capital and general
corporate purposes.

      7.13.  Further  Assurances.  The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably  request to
carry out to their  satisfaction  the  transactions  contemplated by this Credit
Agreement and the other Loan Documents.

                  8.  CERTAIN NEGATIVE COVENANTS OF THE BORROWER.

      The  Borrower  covenants  and  agrees  that,  so long as any Loan,  Unpaid
Reimbursement  Obligation,  Letter of Credit or Note is  outstanding or any Bank
has any obligation to make any Loans or the Agent has any  obligations to issue,
extend or renew any Letters of Credit:

      8.1.  Restrictions  on  Indebtedness.  The Borrower will not, and will not
permit any of its Subsidiaries  to, create,  incur,  assume,  guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:

      (a)   Indebtedness  to the Banks and the Agent  arising under any of the
Loan Documents;

      (b)   endorsements   for   collection,   deposit  or   negotiation   and
warranties  of products or  services,  in each case  incurred in the  ordinary
course of business;

      (c)  Indebtedness  incurred in connection with the  acquisition  after the
date hereof of any real or personal  property by the Borrower or such Subsidiary
or under any  Capitalized  Lease,  provided  that,  after  giving  effect to the
incurrence of such  Indebtedness,  the Borrower shall be in compliance  with its
covenants in Section 9;

      (d)   Indebtedness  existing on the date hereof and listed and described
on Schedule 8.1 hereto;

      (e)   Indebtedness  of a  Subsidiary  of the Borrower to the Borrower or
to another Subsidiary of the Borrower;

      (f) Indebtedness in respect of guaranties of dealer store leases, provided
that the maximum  aggregate  guaranty  obligation  in respect  thereof shall not
exceed $2,000,000 at any time;

<PAGE>

      (g) Indebtedness in respect of foreign currency exchange, future or option
contracts  entered  into in the  ordinary  course of business for the purpose of
foreign currency risk hedging;

      (h) Indebtedness in respect of reimbursement  obligations under letters of
credit  (other than Letters of Credit  issued  pursuant to Section 4 hereof) and
bankers' acceptances incurred in the ordinary course of business,  provided that
the aggregate  maximum amount available for drawing by the beneficiaries of such
letters of credit and  banker's  acceptances  outstanding  at any time shall not
exceed $130,000,000;

      (i)   Indebtedness  in  respect of  guaranties  by the  Borrower  or any
Subsidiary of Indebtedness of any Subsidiary permitted by this Section 8.1;

      (j) Indebtedness in respect of swap,  future or option contracts the value
of which are based on interest rates or other interest rate hedging arrangements
entered into in the ordinary course of business; and

      (k)   other  Indebtedness  not exceeding in the aggregate  $5,000,000 at
any time.

      8.2. Restrictions on Liens. The Borrower will not, and will not permit any
of its  Subsidiaries to, (i) create or incur or suffer to be created or incurred
or to exist any lien,  encumbrance,  mortgage,  pledge,  charge,  restriction or
other  security  interest of any kind upon any of its  property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom; (ii) transfer any of such property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of  Indebtedness
or  performance  of any other  obligation  in priority to payment of its general
creditors; (iii) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (iv) suffer to exist for a period of more than
thirty (30) days after the same shall have been  incurred  any  Indebtedness  or
claim or demand  against it that if unpaid  might by law or upon  bankruptcy  or
insolvency,  or  otherwise,  be given any priority  whatsoever  over its general
creditors;  or (v) sell, assign,  pledge or otherwise transfer any "receivables"
as defined in clause (vii) of the definition of the term "Indebtedness," with or
without  recourse;  provided  that the Borrower or any of its  Subsidiaries  may
create or incur or suffer to be created or incurred or to exist:

      (a)   liens in favor of the  Borrower  on all or part of the  assets  of
Subsidiaries of the Borrower  securing  Indebtedness  owing by Subsidiaries of
the Borrower to the Borrower;

      (b) liens to secure taxes,  assessments  and other  government  charges in
respect of  obligations  not overdue or liens on properties to secure claims for
labor, material or supplies in respect of obligations not overdue;

<PAGE>

      (c) deposits or pledges made in connection  with, or to secure payment of,
workmen's compensation, unemployment insurance, old age pensions or other social
security obligations;

      (d) liens on  properties  in respect of judgments or awards that have been
in force for less than the  applicable  period  for  taking an appeal so long as
execution is not levied  thereunder  or in respect of which the Borrower or such
Subsidiary  shall  at the  time  in good  faith  be  prosecuting  an  appeal  or
proceedings  for review and in respect of which a stay of  execution  shall have
been obtained pending such appeal or review;

      (e) liens of carriers, warehousemen,  mechanics and materialmen, and other
like  liens on  properties,  in  existence  less  than 120 days from the date of
creation thereof in respect of obligations not overdue;

      (f)  encumbrances on Real Estate  consisting of easements,  rights of way,
zoning  restrictions,  restrictions  on the use of real property and defects and
irregularities  in the title thereto,  landlord's or lessor's liens under leases
to which the  Borrower or a  Subsidiary  of the  Borrower is a party,  and other
minor  liens  or  encumbrances  none of  which in the  opinion  of the  Borrower
interferes  materially  with the use of the  property  affected in the  ordinary
conduct of the business of the Borrower and its  Subsidiaries,  which defects do
not  individually  or in the aggregate  have a materially  adverse effect on the
business of the Borrower individually or of the Borrower and its Subsidiaries on
a consolidated basis;

      (g)   liens  existing  on the date  hereof  and  listed on  Schedule 8.2
hereto;

      (h) purchase  money security  interests in or purchase money  mortgages on
real or personal  property  acquired  after the date  hereof to secure  purchase
money Indebtedness of the type and amount permitted by Section 8.1(c),  incurred
in connection with the acquisition of such property, which security interests or
mortgages cover only the real or personal property so acquired;

      (i)   liens (if any) in favor of the Agent for the  benefit of the Banks
and the Agent under the Loan Documents; and

      (j)   lessor's liens and Capitalized Leases permitted by Section 8.1(c).

      8.3.  Restrictions  on  Investments.  The Borrower  will not, and will not
permit  any of its  Subsidiaries  to,  make or  permit  to  exist  or to  remain
outstanding any Investment except Investments in:

      (a)  marketable  direct or guaranteed  obligations of the United States of
America  that  mature  within  one (1) year  from the  date of  purchase  by the
Borrower;

      (b) demand deposits, certificates of deposit, bankers acceptances and time
deposits of United States banks having total assets in excess of $1,000,000,000;

<PAGE>

      (c)  securities   commonly  known  as  "commercial   paper"  issued  by  a
corporation  organized  and  existing  under  the laws of the  United  States of
America,  any state thereof or any country which is a member of the Organization
for Economic  Cooperation and Development that at the time of purchase have been
rated and the  ratings  for  which  are not less than "P 1" if rated by  Moody's
Investors Service,  Inc., or not less than "A 1" if rated by Standard and Poor's
Rating Group;

      (d) shares of any so-called  money market fund which is  registered  under
the Investment Company Act of 1940, as amended,  is in compliance with Rule 2a-7
thereunder and has net assets of at least $250,000,000;

      (e) marketable  direct or guaranteed  obligations of a state of the United
States of America or political subdivision thereof that at the time of purchase,
if  short-term,  have been rated and the ratings for which are not less than "SP
1" or "A 1" if rated by Standard  and Poor's  Rating Group or not less than "MIG
1" or "VMIG 1" if rated by Moody's  Investors  Service,  Inc. or, if  long-term,
have  been  rated and the  ratings  for which are not less than "AA" as rated by
Standard and Poor's Rating Group;

      (f) shares of so-called  "auction  rate  preferred  stock" which have been
rated "AAA" by Standard and Poor's Rating Group;

      (g) debt  securities  in a portfolio  having an aggregate  maximum  market
value of  $20,000,000  at the time of  investment  (after  giving  effect to any
investment),  such portfolio to be managed by an independent  investment manager
registered as an investment  adviser under the Investment  Advisers Act of 1940,
as amended,  to consist of debt securities with a maximum  duration of three (3)
years  and at  least an  investment  grade  rating  by a  nationally  recognized
statistical rating  organization,  not more than 5% of the total market value of
the portfolio at any time to be represented by securities of any single issue;

      (h) Investments consisting of foreign currency exchange,  future or option
contracts  entered  into in the  ordinary  course of business for the purpose of
foreign currency risk hedging;

      (i) Investments  consisting of swap,  future or option contracts the value
of  which  is  based  upon  interest   rates  or  other  interest  rate  hedging
arrangements entered into in the ordinary course of business;

      (j)   Investments   existing   on  the  date   hereof   and   listed  on
Schedule 8.3 hereto;

      (k)   Investments  with respect to Indebtedness  permitted byss.8.1(f) so
long as such entities remain Subsidiaries of the Borrower;

      (l)   Investments  consisting  of the  Guaranty  or  Investments  by the
Borrower in Subsidiaries of the Borrower;

      (m)   Investments  consisting of promissory  notes  received as proceeds
of asset dispositions permitted by Section 8.5.2;



<PAGE>

      (n)   Investments in Permitted Acquisitions pursuant to Section 8.5.3; and

      (o) Investments  consisting of loans and advances to employees for moving,
entertainment,  travel and other  similar  expenses  in the  ordinary  course of
business not to exceed $5,000,000 in the aggregate at any time outstanding.

      8.4. Distributions. The Borrower will not make any Distributions; provided
that the  Borrower  may make  distributions  ("Permitted  Distributions")  which
satisfy the following tests:  (i) the aggregate amount of such  Distribution and
all other  Distributions  during the same fiscal year of the  Borrower  does not
exceed  $30,000,000,  and (ii) at the time of such  Distribution,  no Default or
Event of Default has  occurred  and is  continuing  or would exist after  giving
effect to such Distribution.

      8.5.  Merger, Consolidation, Acquisitions and Disposition of Assets.

            8.5.1. Mergers and Acquisitions. The Borrower will not, and will not
permit  any of its  Subsidiaries  to,  (a)  become  a  party  to any  merger  or
consolidation  except  (i) the  merger  or  consolidation  of one or more of the
Subsidiaries  of the  Borrower  with and into  the  Borrower,  or of two or more
Subsidiaries of the Borrower,  or (ii) a merger or  consolidation  in connection
with a  Permitted  Acquisition  in which the  Borrower  or a  Subsidiary  is the
surviving  entity,  or (b) agree to or effect  any asset  acquisition  or equity
acquisition  other than (i) the  acquisition of assets in the ordinary course of
business  consistent  with past  practices  and (ii) any  Permitted  Acquisition
pursuant to Section 8.5.3.

            8.5.2.  Disposition  of Assets.  The Borrower will not, and will not
permit any  Significant  Subsidiary  to, become a party to or agree to or effect
disposition of all or any substantial portion of its assets (other than the sale
of inventory,  the licensing of  intellectual  property and the  disposition  of
obsolete assets, in each case in the ordinary course of business consistent with
past practices).

            8.5.3 Acquisition of Businesses. The Borrower will not, and will not
permit any of its  Subsidiaries  to,  acquire  the assets or equity of any going
business,  except any such  acquisition  of a  business  (i) which is engaged in
Substantially the Same Business,  and (ii) the cash purchase price for which, in
the  aggregate  together  with the cash  purchase  price paid for all other such
acquisitions  from and after the Closing Date,  does not exceed  $50,000,000  (a
"Permitted Acquisition").

      8.6. Sale and Leaseback. The Borrower will not, and will not permit any of
its Subsidiaries to, enter into any arrangement, directly or indirectly, whereby
the  Borrower or any  Subsidiary  of the  Borrower  shall sell or  transfer  any
property owned by it in order then or thereafter to lease such property or lease
other  property that the Borrower or any  Subsidiary of the Borrower  intends to
use  for   substantially  the  same  purpose  as  the  property  being  sold  or
transferred.

      8.7.  Compliance  with Environmental  Laws.  The  Borrower will not, and
will not permit any of its Subsidiaries to, (i) use any of the Real Estate or

<PAGE>

      any portion thereof for the handling,  processing,  storage or disposal of
Hazardous  Substances,  (ii)  cause or permit to be  located  on any of the Real
Estate  any  underground  tank  or  other  underground  storage  receptacle  for
Hazardous Substances, (iii) generate any Hazardous Substances on any of the Real
Estate,  (iv)  conduct any activity at any Real Estate or use any Real Estate in
any manner so as to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring,  emitting,  emptying,   discharging,   injecting,  escaping,  leaching,
disposing or dumping) or threatened release of Hazardous  Substances on, upon or
into the Real Estate or (v) otherwise conduct any activity at any Real Estate or
use any Real Estate in any manner that would  violate any  Environmental  Law or
bring such Real Estate in violation of any Environmental Law.

      8.8.  Employee  Benefit  Plans.  Neither  the  Borrower  nor  any  ERISA
Affiliate will

      (a) engage in any "prohibited  transaction"  within the meaning of Section
406 of ERISA or  Section  4975 of the Code  which  could  result  in a  material
liability for the Borrower or any of its Subsidiaries; or

      (b) permit any Guaranteed  Pension Plan to incur an  "accumulated  funding
deficiency",  as such term is defined in  Seciton  302 of ERISA,  whether or not
such deficiency is or may be waived; or

      (c) fail to contribute to any Guaranteed  Pension Plan to an extent which,
or terminate any Guaranteed  Pension Plan in a manner which, could result in the
imposition of a lien or  encumbrance on the assets of the Borrower or any of its
Subsidiaries pursuant to Seciton 302(f) or Section 4068 of ERISA; or

      (d) amend any  Guaranteed  Pension  Plan in  circumstances  requiring  the
posting of security  pursuant to Section 307 of ERISA or Seciton  401(a)(29)  of
the Code; or

      (e) permit or take any action which would result in the aggregate  benefit
liabilities  (with the  meaning  of  Section  4001 of  ERISA) of all  Guaranteed
Pension  Plans  exceeding  the  value of the  aggregate  assets  of such  Plans,
disregarding  for this  purpose the benefit  liabilities  and assets of any such
Plan with assets in excess of benefit liabilities[,  by more than the amount set
forth in Section 6.15.3.]

      8.9. Business  Activities.  The Borrower will not, and will not permit its
Subsidiaries to, engage directly or indirectly (whether through  Subsidiaries or
otherwise) in any business  activities  which would  represent a departure  from
Substantially the Same Business.

      8.10.  Fiscal Year.  The Borrower  will not, and will not permit any of it
Subsidiaries  to,  change the date of the end of its  fiscal  year from that set
forth in Section 6.4.1.

      8.11.  Transactions  with Affiliates.  The Borrower will not, and will not
permit any of its  Subsidiaries to, engage in any transaction with any Affiliate
(other than for services as employees,  officers and  directors),  including any
contract,  agreement  or  other  arrangement  providing  for the  furnishing  of
services to or by, providing for rental of real or personal

<PAGE>

      property to or from, or otherwise  requiring  payments to or from any such
Affiliate or, to the knowledge of the Borrower,  any  corporation,  partnership,
trust or other entity in which any such Affiliate has a substantial  interest or
is an officer,  director,  trustee or partner,  on terms more  favorable to such
Person than would have been obtainable on an arm's-length  basis in the ordinary
course of business.

                      9.  FINANCIAL COVENANTS OF THE BORROWER.

      The  Borrower  covenants  and  agrees  that,  so long as any Loan,  Unpaid
Reimbursement  Obligation,  Letter of Credit or Note is  outstanding or any Bank
has any  obligation to make any Loans or the Agent has any  obligation to issue,
extend or renew any Letters of Credit:

      9.1. Fixed Charge Coverage  Ratio.  The Borrower will not permit the ratio
(the "Fixed Charge Coverage Ratio"),  as of the end of any fiscal quarter of the
Borrower and for the period of four  consecutive  fiscal quarters then ended, of
(a)  Consolidated  Operating Cash Flow plus Rental Expense,  to (b) Consolidated
Total Interest Expense plus Rental Expense, to be less than 1.75:1.

      9.2. Funded Debt to EBITDA.  The Borrower will not permit the ratio, as of
the end of any  fiscal  quarter  and for the period of four  consecutive  fiscal
quarters  then  ended,  of Total  Funded Debt to  Consolidated  EBITDA to exceed
2.25:1.

      9.3.  Consolidated  Tangible  Net  Worth.  The  Borrower  will not  permit
Consolidated Tangible Net Worth to be less than the sum of $200,000,000 plus, on
a  cumulative  basis 50% of  positive  Consolidated  Net Income for each  fiscal
quarter  subsequent  to the Closing Date,  minus  Permitted  Distributions  made
subsequent to the Closing Date.

                              10.  CLOSING CONDITIONS.

      The obligations of the Banks to make the initial Loans and of the Agent to
issue any initial Letters of Credit shall be subject to the  satisfaction of the
following conditions precedent on or prior to January 31, 2000:

      10.1.  Loan  Documents.  Each of the Loan  Documents  shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.

      10.2. Certified Copies of Charter Documents.  Each of the Banks shall have
received from the Borrower and each of its  Subsidiaries a copy,  certified by a
duly  authorized  officer of such Person to be true and  complete on the Closing
Date, of each of (i) its charter or other  incorporation  documents as in effect
on such date of certification, and (ii) its by-laws as in effect on such date.

      10.3.  Corporate  Action.  All  corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of its

<PAGE>

      Subsidiaries  of this Credit  Agreement  and the other Loan  Documents  to
which it is or is to become a party shall have been duly and effectively  taken,
and evidence  thereof  satisfactory to the Banks shall have been provided to the
Agent.

      10.4. Incumbency  Certificate.  Each of the Banks shall have received from
the Borrower and each of its Subsidiaries an incumbency certificate, dated as of
the Closing Date,  signed by a duly  authorized  officer of the Borrower or such
Subsidiary,  and  giving  the name and  bearing  a  specimen  signature  of each
individual  who shall be  authorized:  (i) to sign, in the name and on behalf of
each of the Borrower of such Subsidiary, each of the Loan Documents to which the
Borrower or such Subsidiary is or is to become a party;  (ii) in the case of the
Borrower, to make Loan Requests and Conversion Requests and to apply for Letters
of Credit;  and (iii) to give  notices  and to take  other  action on its behalf
under the Loan Documents.

      10.5.  Certificates  of  Insurance.  The Agent shall have  received  (i) a
certificate of insurance from an  independent  insurance  broker dated as of the
Closing Date,  identifying insurers,  types of insurance,  insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the  provisions  of the Security  Agreements  and (ii)  certified  copies of all
policies  evidencing  such insurance (or  certificates  therefore  signed by the
insurer or an agent authorized to bind the insurer).

      10.6.  Opinion  of  Counsel.  Each of the Banks and the Agent  shall  have
received a favorable legal opinion  addressed to the Banks and the Agent,  dated
as of the Closing Date, in form and substance  satisfactory to the Banks and the
Agent,  from  Goodwin,  Procter  & Hoar LLP,  counsel  to the  Borrower  and its
Subsidiaries.

      10.7.  Payment of Fees.  The Borrower  shall have paid to the Banks or the
Agent,  as  appropriate,  the Agent's  fee and the  Arranger's  fee  pursuant to
Section s5.1 and 5.2.

      10.8.  Proceedings  and Documents.  All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents  incident  thereto shall be satisfactory in substance and in
form to the  Banks and to the Agent and the  Agent's  Special  Counsel,  and the
Banks,  the Agent and such counsel shall have received all  information and such
counterpart  originals or  certified  or other  copies of such  documents as the
Agent may reasonably request.

                         11.  CONDITIONS TO ALL BORROWINGS.

      The  obligations  of the Banks to make any Loan and of the Agent to issue,
extend  or renew any  Letter of  Credit,  in each case  whether  on or after the
Closing  Date,  shall  also be  subject  to the  satisfaction  of the  following
conditions precedent:

      11.1.   Representations   True;   No  Event  of   Default.   Each  of  the
representations  and  warranties  of any of the  Borrower  and its  Subsidiaries
contained in this Credit Agreement,  the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this


<PAGE>

      Credit  Agreement  shall be true as of the date as of which they were made
and shall  also be true at and as of the time of the  making of such Loan or the
issuance, extension or renewal of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent of changes  resulting  from
transactions  contemplated  or permitted by this Credit  Agreement and the other
Loan  Documents  and changes  occurring in the ordinary  course of business that
singly or in the aggregate are not  materially  adverse,  and to the extent that
such  representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.

      11.2.  No Legal  Impediment.  No change shall have  occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any  Bank  would  make it  illegal  for  such  Bank to make  such  Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the  reasonable  opinion of the Agent  would  make it  illegal  for the Agent to
issue, extend or renew such Letter of Credit.

      11.3.  Governmental  Regulation.   Each  Bank  shall  have  received  such
statements in substance and form  reasonably  satisfactory  to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the  Comptroller  of the  Currency or the Board of  Governors  of the Federal
Reserve System.

                     12.  EVENTS OF DEFAULT; ACCELERATION; ETC.

      12.1. Events of Default and  Acceleration.  If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:

      (a) the  Borrower  shall  fail to pay any  principal  of the  Loans or any
Reimbursement  Obligation when the same shall become due and payable, whether at
the stated date of maturity or any accelerated  date of maturity or at any other
date fixed for payment;

      (b) the Borrower or any of its Subsidiaries shall fail to pay any interest
on the Loans,  any Letter of Credit Fee, any Facility Fee, any Utilization  Fee,
the  Agent's  fee,  or other sums due  hereunder  or under any of the other Loan
Documents,  within  five (5) days after the same shall  become due and  payable,
whether at the stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment;

      (c)   the  Borrower  shall  fail to  comply  with  any of its  covenants
contained in Sections 8 or 9;

      (d) the  Borrower  or any of its  Subsidiaries  shall fail to perform  any
term,  covenant  or  agreement  contained  herein  or in any of the  other  Loan
Documents (other than those specified elsewhere in this ss.12.1) for twenty (20)
days after written  notice of such failure has been given to the Borrower by the
Agent;

<PAGE>

      (e)  any  representation  or  warranty  of  the  Borrower  or  any  of its
Subsidiaries  in this Credit  Agreement or any of the other Loan Documents or in
any other  document or instrument  delivered  pursuant to or in connection  with
this Credit  Agreement  shall prove to have been false in any  material  respect
upon the date when made or deemed to have been made or repeated;

      (f) the Borrower or any of its Subsidiaries shall fail to pay at maturity,
or within any applicable  period of grace,  any obligation for borrowed money or
credit received or in respect of any Capitalized  Leases,  or fail to observe or
perform any material term,  covenant or agreement  contained in any agreement by
which it is bound,  evidencing or securing  borrowed money or credit received or
in  respect  of  any  Capitalized  Leases,  which  in the  aggregate  represents
Indebtedness  of  $2,000,000  or more,  for such period of time as would  permit
(assuming  the giving of  appropriate  notice if required) the holder or holders
thereof or of any  obligations  issued  thereunder  to  accelerate  the maturity
thereof, or if any such holder or holders shall rescind or shall have a right to
rescind the purchase of any such obligations;

      (g) the Borrower or any  Significant  Subsidiary  shall make an assignment
for the  benefit of  creditors,  or admit in  writing  its  inability  to pay or
generally  fail to pay its debts as they mature or become due, or shall petition
or apply for the  appointment  of a trustee or other  custodian,  liquidator  or
receiver of the Borrower or any  Significant  Subsidiary  or of any  substantial
part of the  assets  of the  Borrower  or any  Significant  Subsidiary  or shall
commence  any  case  or  other  proceeding  relating  to  the  Borrower  or  any
Significant  Subsidiary  under  any  bankruptcy,  reorganization,   arrangement,
insolvency,  readjustment of debt,  dissolution or liquidation or similar law of
any  jurisdiction,  now or  hereafter  in  effect,  or shall  take any action to
authorize or in furtherance of any of the foregoing,  or if any such petition or
application  shall  be  filed or any  such  case or  other  proceeding  shall be
commenced against the Borrower or any Significant Subsidiary and the Borrower or
any Significant Subsidiary shall indicate its approval thereof,  consent thereto
or  acquiescence  therein or such  petition or  application  shall not have been
dismissed within sixty (60) days following the filing thereof;

      (h) a decree or order is entered  appointing any such trustee,  custodian,
liquidator  or  receiver  or  adjudicating   the  Borrower  or  any  Significant
Subsidiary  bankrupt or  insolvent,  or approving a petition in any such case or
other  proceeding,  or a decree or order for relief is entered in respect of the
Borrower or any  Significant  Subsidiary of the Borrower in an involuntary  case
under federal bankruptcy laws as now or hereafter constituted;

      (i) there shall remain in force,  undischarged,  unsatisfied and unstayed,
for more than  forty-five  (45)  days,  whether  or not  consecutive,  any final
judgment  against  the  Borrower  or any of its  Subsidiaries  that,  with other
outstanding  final judgments,  undischarged,  against the Borrower or any of its
Subsidiaries exceeds in the aggregate $5,000,000;

      (j)   if any of the Guaranties shall be cancelled,  terminated,  revoked
or rescinded otherwise than in accordance with the terms thereof or with the

<PAGE>

      express prior written agreement,  consent or approval of the Banks, or any
action at law, suit or in equity or other legal proceeding to cancel,  revoke or
rescind  any of the Loan  Documents  shall be  commenced  by or on behalf of the
Borrower or any of its  Subsidiaries  party  thereto or any of their  respective
stockholders,  or any court or any other governmental or regulatory authority or
agency of competent  jurisdiction  shall make a  determination  that, or issue a
judgment,  order,  decree or ruling to the effect  that,  any one or more of the
Loan Documents is illegal, invalid or unenforceable in accordance with the terms
thereof;

      (k) the Borrower or any ERISA  Affiliate  incurs any liability to the PBGC
or a  Guaranteed  Pension  Plan  pursuant  to Title IV of ERISA in an  aggregate
amount exceeding $5,000,000,  or the Borrower or any ERISA Affiliate is assessed
withdrawal  liability  pursuant  to Title IV of  ERISA by a  Multiemployer  Plan
requiring  aggregate  annual  payments  exceeding  $5,000,000,  or  any  of  the
following  occurs  with  respect  to a  Guaranteed  Pension  Plan:  (i) an ERISA
Reportable  Event, or a failure to make a required  installment or other payment
(within  the meaning of Section  302(f)(1)  of ERISA),  provided  that the Agent
determines in its reasonable discretion that such event (A) could be expected to
result in liability of the  Borrower or any of its  Subsidiaries  to the PBGC or
such Guaranteed Pension Plan in an aggregate amount exceeding $5,000,000 and (B)
could constitute  grounds for the termination of such Guaranteed Pension Plan by
the PBGC, for the appointment by the appropriate United States District Court of
a trustee to administer such Guaranteed  Pension Plan or for the imposition of a
lien in favor of such  Guaranteed  Pension  Plan; or (ii) the  appointment  by a
United States District Court of a trustee to administer such Guaranteed  Pension
Plan; or (iii) the  institution  by the PBGC of  proceedings  to terminate  such
Guaranteed Pension Plan;

      (l)  the  Borrower  or  any  Significant  Subsidiary  shall  be  enjoined,
restrained  or  in  any  way  prevented  by  the  order  of  any  court  or  any
administrative  or regulatory  agency from  conducting  any material part of its
business and such order shall continue in effect for more than thirty (30) days;

      (m) there shall occur the loss, suspension or revocation of, or failure to
renew,  any license or permit now held or hereafter  acquired by the Borrower or
any of its Subsidiaries if such loss, suspension, revocation or failure to renew
would have a material  adverse effect on the business or financial  condition of
the Borrower or such Subsidiary;

      (n) the Borrower or any of its Subsidiaries  shall be indicted for a state
or federal  crime,  or any civil or criminal  action shall  otherwise  have been
brought against the Borrower or any of its Subsidiaries,  a punishment for which
in any such case could  include the  forfeiture of any assets of the Borrower or
such Subsidiary having a fair market value in excess of $5,000,000; or

      (o) any person or group of persons (within the meaning of Section 13 or 14
of the  Securities  Exchange  Act of  1934,  as  amended)  shall  have  acquired
beneficial  ownership  (within  the  meaning  of Rule 13d-3  promulgated  by the
Securities  and  Exchange  Commission  under  said  Act)  of 30% or  more of the
outstanding shares of common stock of the Borrower; or, during any period of

<PAGE>

      twelve consecutive calendar months,  individuals who were directors of the
Borrower on the first day of such period shall cease to constitute a majority of
the board of directors of the Borrower;

then, and in any such event,  so long as the same may be  continuing,  the Agent
may, and upon the request of the Majority  Banks shall,  by notice in writing to
the Borrower  declare all amounts  owing with respect to this Credit  Agreement,
the Notes and the other Loan Documents and all Reimbursement  Obligations to be,
and they shall thereupon  forthwith become,  immediately due and payable without
presentment,  demand,  protest  or other  notice of any  kind,  all of which are
hereby expressly waived by the Borrower; provided that in the event of any Event
of Default  specified in Sections  12.1(g) or 12.1(h),  all such  amounts  shall
become immediately due and payable  automatically and without any requirement of
notice from the Agent or any Bank.

      12.2.  Termination  of  Commitments.  If any one or more of the  Events of
Default  specified in Section 12.1(g) or Section 12.1(h) shall occur, any unused
portion of the credit hereunder shall forthwith  terminate and each of the Banks
shall be relieved of all further  obligations  to make Loans to the Borrower and
the Agent shall be relieved of all further obligations to issue, extend or renew
Letters of Credit.  If any other  Event of Default  shall have  occurred  and be
continuing, the Agent may and, upon the request of the Majority Banks, shall, by
notice to the Borrower,  terminate the unused  portion of the credit  hereunder,
and upon such notice  being given such  unused  portion of the credit  hereunder
shall  terminate  immediately  and each of the Banks  shall be  relieved  of all
further obligations to make Loans and the Agent shall be relieved of all further
obligations to issue,  extend or renew Letters of Credit.  No termination of the
credit hereunder shall relieve the Borrower or any of its Subsidiaries of any of
the Obligations.

      12.3.  Remedies.  In case any one or more of the Events of  Default  shall
have  occurred  and be  continuing,  and  whether  or not the Banks  shall  have
accelerated  the maturity of the Loans  pursuant to Section 12.1,  each Bank, if
owed any amount with respect to the Loans or the Reimbursement Obligations, may,
with the consent of the Majority Banks but not otherwise, proceed to protect and
enforce  its  rights  by suit in  equity,  action  at law or  other  appropriate
proceeding,  whether for the specific  performance  of any covenant or agreement
contained  in  this  Credit  Agreement  and  the  other  Loan  Documents  or any
instrument  pursuant  to which  the  Obligations  to such  Bank  are  evidenced,
including  as  permitted  by  applicable  law  the  obtaining  of the  ex  parte
appointment  of a  receiver,  and,  if such  amount  shall have  become  due, by
declaration  or otherwise,  proceed to enforce the payment  thereof or any other
legal or equitable right of such Bank. No remedy herein  conferred upon any Bank
or the Agent or the  holder  of any Note or  purchaser  of any  Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative  and shall be in addition to every other remedy given
hereunder or now or hereafter  existing at law or in equity or by statute or any
other provision of law.

                                    13.  SETOFF.

      Regardless of the adequacy of any  collateral,  during the  continuance of
any Event of Default, any deposits or other sums credited by or due from any

<PAGE>

      of the Banks to the Borrower and any  securities or other  property of the
Borrower  in the  possession  of such Bank may be  applied to or set off by such
Bank  against  the  payment of  Obligations  and any and all other  liabilities,
direct, or indirect,  absolute or contingent, due or to become due, now existing
or hereafter  arising,  of the  Borrower to such Bank.  Each of the Banks agrees
with each  other  Bank that (i) if an amount to be set off is to be  applied  to
Indebtedness of the Borrower to such Bank, other than Indebtedness  evidenced by
the Notes held by such Bank or constituting  Reimbursement  Obligations  owed to
such Bank, such amount shall be applied ratably to such other  Indebtedness  and
to  the  Indebtedness  evidenced  by  all  such  Notes  held  by  such  Bank  or
constituting  Reimbursement Obligations owed to such Bank, and (ii) if such Bank
shall receive from the Borrower,  whether by voluntary payment,  exercise of the
right of setoff, counterclaim,  cross action, enforcement of the claim evidenced
by the Notes held by, or constituting  Reimbursement  Obligations  owed to, such
Bank by proceedings against the Borrower at law or in equity or by proof thereof
in bankruptcy, reorganization, liquidation, receivership or similar proceedings,
or  otherwise,  and shall  retain and apply to the  payment of the Note or Notes
held by, or Reimbursement Obligations owed to, such Bank any amount in excess of
its ratable portion of the payments received by all of the Banks with respect to
the Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such  disposition  and  arrangements  with the other  Banks  with
respect to such excess,  either by way of distribution,  pro tanto assignment of
claims,  subrogation  or  otherwise  as shall  result in each Bank  receiving in
respect  of the  Notes  held by it or  Reimbursement  obligations  owed it,  its
proportionate payment as contemplated by this Credit Agreement; provided that if
all or any part of such excess  payment is thereafter  recovered from such Bank,
such disposition and arrangements  shall be rescinded and the amount restored to
the extent of such recovery, but without interest.

                                 14. THE AGENT.

      14.1.  Authorization.

      (a) The Agent is  authorized  to take such action on behalf of each of the
Banks and to  exercise  all such  powers as are  hereunder  and under any of the
other Loan Documents and any related documents delegated to the Agent,  together
with such powers as are reasonably incident thereto,  provided that no duties or
responsibilities  not  expressly  assumed  herein or therein shall be implied to
have been assumed by the Agent.

      (b) The relationship between the Agent and each of the Banks is that of an
independent contractor.  The use of the term "Agent" is for convenience only and
is used  to  describe,  as a form of  convention,  the  independent  contractual
relationship  between the Agent and each of the Banks. Nothing contained in this
Credit  Agreement nor the other Loan  Documents  shall be construed to create an
agency,  trust or other fiduciary  relationship between the Agent and any of the
Banks.

      (c) As an  independent  contractor  empowered  by the  Banks  to  exercise
certain  rights and perform  certain duties and  responsibilities  hereunder and
under the other Loan Documents, the Agent is nevertheless a "representative"

<PAGE>

      of the  Banks,  as that  term  is  defined  in  Article  1 of the  Uniform
Commercial  Code,  for  purposes of actions for the benefit of the Banks and the
Agent with respect to all collateral security and guaranties contemplated by the
Loan  Documents.  Such actions  include the designation of the Agent as "secured
party",  "mortgagee" or the like on all (if any) financing  statements and other
documents  and  instruments,  whether  recorded  or  otherwise,  relating to the
attachment,  perfection,  priority or  enforcement  of any  security  interests,
mortgages  or deeds of trust in  collateral  security  intended  to  secure  the
payment or  performance  of any of the  Obligations,  all for the benefit of the
Banks and the Agent.

      14.2.  Employees and Agents. The Agent may exercise its powers and execute
its duties by or through  employees or agents and shall be entitled to take, and
to rely on, advice of counsel  concerning  all matters  pertaining to its rights
and duties under this Credit  Agreement and the other Loan Documents.  The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine.

      14.3.  No  Liability.  Neither  the  Agent  nor  any of its  shareholders,
directors,  officers or employees nor any other Person  assisting  them in their
duties  nor any  agent or  employee  thereof,  shall be liable  for any  waiver,
consent or approval given or any action taken,  or omitted to be taken,  in good
faith by it or them  hereunder or under any of the other Loan  Documents,  or in
connection herewith or therewith,  or be responsible for the consequences of any
oversight or error of judgment  whatsoever,  except that the Agent or such other
Person,  as the  case  may be,  may be  liable  for  losses  due to its  willful
misconduct or gross negligence.

      14.4.  No Representations.

            14.4.1.  General.  The  Agent  shall  not  be  responsible  for  the
execution or validity or enforceability of this Credit Agreement, the Notes, the
Letters of Credit, any of the other Loan Documents or any instrument at any time
constituting,  or intended to constitute,  collateral security for the Notes, or
for  the  value  of  any  such   collateral   security  or  for  the   validity,
enforceability  or  collectability of any such amounts owing with respect to the
Notes,  or for any recitals or statements,  warranties or  representations  made
herein or in any of the other Loan Documents or in any certificate or instrument
hereafter  furnished  to it by or on  behalf  of  the  Borrower  or  any  of its
Subsidiaries,  or be bound to  ascertain  or  inquire as to the  performance  or
observance of any of the terms, conditions, covenants or agreements herein or in
any instrument at any time constituting,  or intended to constitute,  collateral
security for the Notes or to inspect any of the properties,  books or records of
the  Borrower  or any of its  Subsidiaries.  The  Agent  shall  not be  bound to
ascertain whether any notice,  consent, waiver or request delivered to it by the
Borrower or any holder of any of the Notes shall have been duly authorized or is
true,  accurate  and  complete.  The Agent has not made nor does it now make any
representations  or  warranties,  express  or  implied,  nor does it assume  any
liability  to the Banks,  with  respect to the credit  worthiness  or  financial
conditions of the Borrower or any of its  Subsidiaries.  Each Bank  acknowledges
that it has,  independently  and  without  reliance  upon the Agent or any other
Bank, and based upon such information

<PAGE>

      and documents as it has deemed  appropriate,  made its own credit analysis
and decision to enter into this Credit Agreement.

            14.4.2.  Closing  Documentation,  etc. For  purposes of  determining
compliance  with the  conditions  set forth in  Section  10,  each Bank that has
executed this Credit Agreement shall be deemed to have consented to, approved or
accepted, or to be satisfied with, each document and matter either sent, or made
available,  by the Agent or BancBoston  Robertson  Stephens Inc., as arranger to
such  Bank for  consent,  approval,  acceptance  or  satisfaction,  or  required
thereunder to be consented to or approved by or acceptable  or  satisfactory  to
such Bank, unless an officer of the Agent or BancBoston  Robertson Stephens Inc.
active upon the Borrower's account shall have received notice from such Bank not
less  than two (2)  days  prior  to the  Closing  Date  specifying  such  Bank's
objection  thereto and such objection shall not have been withdrawn by notice to
the Agent or  BancBoston  Robertson  Stephens Inc. to such effect on or prior to
the Closing Date.

      14.5.  Payments.

            14.5.1.  Payments to Agent.  A payment by the  Borrower to the Agent
hereunder or any of the other Loan  Documents  for the account of any Bank shall
constitute a payment to such Bank.  The Agent agrees  promptly to  distribute to
each Bank such Bank's pro rata share of  payments  received by the Agent for the
account of the Banks except as otherwise  expressly provided herein or in any of
the other Loan Documents.

            14.5.2.  Distribution  by Agent.  If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder,  under the
Notes or under any of the other Loan Documents might involve it in liability, it
may refrain from making  distribution until its right to make distribution shall
have  been  adjudicated  by a court  of  competent  jurisdiction.  If a court of
competent jurisdiction shall adjudge that any amount received and distributed by
the Agent is to be repaid,  each Person to whom any such distribution shall have
been made shall either repay to the Agent its proportionate  share of the amount
so  adjudged  to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.

            14.5.3.  Delinquent Bank.  Notwithstanding  anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents,  any Bank
that fails (i) to make  available to the Agent its pro rata share of any Loan or
to  purchase  any  Letter of  Credit  Participation  or (ii) to comply  with the
provisions of Section 13 with respect to making  dispositions  and  arrangements
with the other Banks,  where such Bank's share of any payment received,  whether
by setoff or otherwise,  is in excess of its pro rata share of such payments due
and  payable to all of the Banks,  in each case as,  when and to the full extent
required by the provisions of this Credit Agreement,  shall be deemed delinquent
(a "Delinquent  Bank") and shall be deemed a Delinquent  Bank until such time as
such  delinquency  is  satisfied.  A  Delinquent  Bank  shall be  deemed to have
assigned any and all payments due to it from the Borrower, whether on account of
outstanding  Loans,  Unpaid  Reimbursement   Obligations,   interest,   fees  or
otherwise,  to  the  remaining  nondelinquent  Banks  for  application  to,  and
reduction of, their respective

<PAGE>

      pro  rata  shares  of  all  outstanding  Loans  and  Unpaid  Reimbursement
Obligations.  The Delinquent Bank hereby authorizes the Agent to distribute such
payments to the  nondelinquent  Banks in proportion to their respective pro rata
shares  of  all  outstanding  Loans  and  Unpaid  Reimbursement  Obligations.  A
Delinquent Bank shall be deemed to have satisfied in full a delinquency when and
if, as a result of application of the assigned payments to all outstanding Loans
and Unpaid  Reimbursement  Obligations of the  nondelinquent  Banks,  the Banks'
respective  pro rata shares of all  outstanding  Loans and Unpaid  Reimbursement
Obligations  have  returned  to  those  in  effect  immediately  prior  to  such
delinquency   and  without  giving  effect  to  the   nonpayment   causing  such
delinquency.

      14.6. Holders of Notes. The Agent may deem and treat the payee of any Note
or the purchaser of any Letter of Credit  Participation as the absolute owner or
purchaser  thereof for all purposes hereof until it shall have been furnished in
writing with a different name by such payee or by a subsequent holder,  assignee
or transferee.

      14.7.  Indemnity.  The Banks  ratably  agree hereby to indemnify  and hold
harmless  the Agent and its  affiliates  from and  against  any and all  claims,
actions and suits (whether  groundless or otherwise),  losses,  damages,  costs,
expenses  (including  any expenses for which the Agent or such affiliate has not
been  reimbursed by the Borrower as required by Section 15), and  liabilities of
every nature and character  arising out of or related to this Credit  Agreement,
the Notes, or any of the other Loan Documents or the  transactions  contemplated
or  evidenced  hereby or thereby,  or the Agent's  actions  taken  hereunder  or
thereunder,  except to the extent that any of the same shall be directly  caused
by the Agent's willful misconduct or gross negligence.

      14.8. Agent as Bank. In its individual  capacity,  BKB shall have the same
obligations  and the same  rights,  powers  and  privileges  in  respect  to its
Commitment  and the Loans  made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit  Participations,  as it would have were
it not also the Agent.

      14.9.  Resignation.  The Agent may resign at any time by giving sixty (60)
days prior written notice  thereof to the Banks and the Borrower.  Upon any such
resignation,  the  Majority  Banks  shall have the right to appoint a  successor
Agent.  Unless  a  Default  or Event  of  Default  shall  have  occurred  and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor  Agent shall have been so  appointed  by the Majority  Banks and
shall have accepted such appointment  within thirty (30) days after the retiring
Agent's giving of notice of resignation,  then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial  institution
having a rating  of not  less  than A or its  equivalent  by  Standard  & Poor's
Corporation.  Upon the  acceptance of any  appointment  as Agent  hereunder by a
successor  Agent,  such successor  Agent shall  thereupon  succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the  retiring  Agent  shall be  discharged  from its duties and  obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents  shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.

<PAGE>

      14.10.  Notification  of Defaults and Events of Default.  Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly  notify the Agent  thereof.  The Agent hereby agrees that upon
receipt of any notice  under this  Section  14.10 it shall  promptly  notify the
other Banks of the existence of such Default or Event of Default.

                         15.  EXPENSES AND INDEMNIFICATION.

      15.1.  Expenses.  The Borrower  agrees to pay (i) the reasonable  costs of
producing and reproducing  this Credit  Agreement,  the other Loan Documents and
the other agreements and instruments mentioned herein, (ii) the reasonable fees,
expenses and  disbursements  of the Agent's Special Counsel or any local counsel
to  the  Agent  incurred  in  connection  with  the  preparation,   syndication,
administration  or  interpretation  of the Loan Documents and other  instruments
mentioned  herein,  each  closing  hereunder,  any  amendments,   modifications,
approvals,  consents or waivers hereto or hereunder,  or the cancellation of any
Loan Document upon payment in full in cash of all of the Obligations or pursuant
to any terms of such Loan Document for providing  for such  cancellation,  (iii)
the fees,  expenses  and  disbursements  of the  Agent or any of its  affiliates
incurred by the Agent or such  affiliate  in  connection  with the  preparation,
syndication,  administration  or  interpretation of the Loan Documents and other
instruments  mentioned herein,  including without limitation the reasonable fees
and expenses of Persons  retained  pursuant to Section 14.2, all title insurance
premiums  and  surveyor,   engineering  and  appraisal  charges,  and  (iv)  all
reasonable  out-of-pocket  expenses  (including  without  limitation  reasonable
attorneys'  fees and costs,  which attorneys may be employees of any Bank or the
Agent, and reasonable consulting,  accounting, appraisal, investment banking and
similar  professional  fees and  charges)  incurred  by any Bank or the Agent in
connection  with (A) the  enforcement of or  preservation of rights under any of
the Loan  Documents  against  the  Borrower  or any of its  Subsidiaries  or the
administration thereof after the occurrence of a Default or Event of Default and
(B)  any  litigation,   proceeding  or  dispute  whether  arising  hereunder  or
otherwise, in any way related to any Bank's or the Agent's relationship with the
Borrower or any of its Subsidiaries.

      15.2. Indemnification.  The Borrower agrees to indemnify and hold harmless
the Agent,  its  affiliates  and the Banks from and  against any and all claims,
actions and suits whether groundless or otherwise,  and from and against any and
all  liabilities,  losses,  damages and expenses of every  nature and  character
arising out of this Credit  Agreement or any of the other Loan  Documents or the
transactions contemplated hereby (except to the extent any such claim, action or
suit results from the gross  negligence or willful  misconduct of the Agent, its
affiliate  or the Bank seeking  indemnification  hereunder)  including,  without
limitation,  (i)  any  actual  or  proposed  use by the  Borrower  or any of its
Subsidiaries of the proceeds of any of the Loans or Letters of Credit,  (ii) the
Borrower or any of its  Subsidiaries  entering  into or  performing  this Credit
Agreement  or any of the other  Loan  Documents  or (iii)  with  respect  to the
Borrower and its Subsidiaries and their  respective  properties and assets,  the
violation of any Environmental  Law, the presence,  disposal,  escape,  seepage,
leakage,  spillage,  discharge,  emission,  release or threatened release of any
Hazardous Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any

<PAGE>

      Hazardous Substances  (including,  but not limited to, claims with respect
to  wrongful  death,  personal  injury  or  damage  to  property),  in each case
including,  without limitation, the reasonable fees and disbursements of counsel
and allocated  costs of internal  counsel  incurred in connection  with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Banks and the Agent and its affiliates shall be entitled to select
their own counsel  (which  shall be one counsel  unless  there is an  unwaivable
conflict of interest) and, in addition to the foregoing indemnity,  the Borrower
agrees to pay promptly the reasonable fees and expenses of such counsel. If, and
to the extent  that the  obligations  of the  Borrower  under this  ss.15.2  are
unenforceable  for any reason,  the Borrower  hereby  agrees to make the maximum
contribution  to the  payment  in  satisfaction  of such  obligations  which  is
permissible under applicable law.

      15.3.  Survival.  The  covenants  contained  in this ss.15  shall  survive
payment or satisfaction in full of all other Obligations.

                16.  TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.

      16.1.  Sharing of  Information  with Section 20  Subsidiary.  The Borrower
acknowledges that from time to time financial  advisory,  investment banking and
other  services may be offered or provided to the Borrower or one or more of its
Subsidiaries,  in  connection  with this Credit  Agreement  or  otherwise,  by a
Section 20 Subsidiary.  The Borrower,  for itself and each of its  Subsidiaries,
hereby  authorizes  (a) such Section 20  Subsidiary  to share with the Agent and
each  Bank any  information  delivered  to such  Section  20  Subsidiary  by the
Borrower  or any of its  Subsidiaries,  and (b) the Agent and each Bank to share
with such Section 20 Subsidiary any  information  delivered to the Agent or such
Bank  by the  Borrower  or  any of its  Subsidiaries  pursuant  to  this  Credit
Agreement,  or in  connection  with the decision of such Bank to enter into this
Credit Agreement;  it being  understood,  in each case, that any such Section 20
Subsidiary  receiving  such  information  shall be bound by the  confidentiality
provisions  of this  Credit  Agreement.  Such  authorization  shall  survive the
payment and satisfaction in full of all of Obligations.

      16.2.  Confidentiality.  Each of the Banks and the Agent agrees, on behalf
of  itself  and  each of its  affiliates,  directors,  officers,  employees  and
representatives,   to  use  reasonable  precautions  to  keep  confidential,  in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices,  any
non-public information supplied to it by the Borrower or any of its Subsidiaries
pursuant to this Credit  Agreement  that is  identified  by such Person as being
confidential  at the time  the  same is  delivered  to the  Banks or the  Agent,
provided that nothing herein shall limit the disclosure of any such  information
(a) after  such  information  shall have  become  public  other  than  through a
violation of this ss.16, (b) to the extent required by statute, rule, regulation
or judicial  process,  (c) to counsel for any of the Banks or the Agent,  (d) to
bank examiners or any other regulatory  authority having  jurisdiction  over any
Bank or the Agent, or to auditors or accountants,  (e) to the Agent, any Bank or
any Section 20  Subsidiary,  (f) in connection  with any litigation to which any
one or more of the Banks,  the Agent or any Section 20 Subsidiary is a party, or
in connection with the enforcement of rights or remedies  hereunder or under any
other Loan Document,

<PAGE>

(g) to a Subsidiary  or affiliate of such Bank as provided in Section  16.1,  or
(h) to any assignee or participant (or  prospective  assignee or participant) so
long as such  assignee or  participant  agrees to be bound by the  provisions of
Section  18.6.  Moreover,  each of the  Agent,  the  Banks  and any  Section  20
Subsidiary is hereby expressly  permitted by the Borrower to refer to any of the
Borrower and its Subsidiaries in connection with any  advertising,  promotion or
marketing  undertaken by the Agent, such Bank or such Section 20 Subsidiary and,
for such purpose, the Agent, such Bank or such Section 20 Subsidiary may utilize
any trade name, trademark,  logo or other distinctive symbol associated with the
Borrower or any of its  Subsidiaries or any of their  businesses  (provided that
neither the Agent nor any Bank shall refer to the Borrower and its  Subsidiaries
or use such  trade  name,  trademark,  logo or  distinctive  symbol  in any such
advertising,  promotion  or  marketing  in the public  media  without  the prior
written consent of the Borrower).

      16.3. Prior Notification. Unless specifically prohibited by applicable law
or court  order,  each of the  Banks and the Agent  shall,  prior to  disclosure
thereof,  notify  the  Borrower  of any  request  for  disclosure  of  any  such
non-public  information by any  governmental  agency or  representative  thereof
(other than any such request in connection  with an examination of the financial
condition  of such  Bank by such  governmental  agency)  or  pursuant  to  legal
process.

      16.4.  Other.  In no event  shall  any Bank or the Agent be  obligated  or
required to return any materials furnished to it or any Section 20 Subsidiary by
the Borrower or any of its Subsidiaries. The obligations of each Bank under this
Section 16 shall  supersede and replace the  obligations  of such Bank under any
confidentiality letter in respect of this financing signed and delivered by such
Bank to the  Borrower  prior to the date  hereof and shall be  binding  upon any
assignee of, or purchaser  of any  participation  in, any interest in any of the
Loans or Reimbursement Obligations from any Bank.

                          17.  SURVIVAL OF COVENANTS, ETC.

      All covenants, agreements,  representations and warranties made herein, in
the  Notes,  in any of the other Loan  Documents  or in any  documents  or other
papers  delivered  by or on behalf of the  Borrower  or any of its  Subsidiaries
pursuant  hereto  shall be deemed to have been  relied upon by the Banks and the
Agent,  notwithstanding any investigation heretofore or hereafter made by any of
them,  and  shall  survive  the  making by the Banks of any of the Loans and the
issuance, extension or renewal of any Letters of Credit, as herein contemplated,
and shall  continue  in full force and effect so long as any Letter of Credit or
any amount due under this Credit Agreement or the Notes or any of the other Loan
Documents  remains  outstanding or any Bank has any obligation to make any Loans
or the Agent has any obligation to issue,  extend or renew any Letter of Credit,
and for such further time as may be otherwise expressly specified in this Credit
Agreement.  All statements contained in any certificate or other paper delivered
to any Bank or the Agent at any time by or on behalf of the  Borrower  or any of
its  Subsidiaries  pursuant  hereto  or  in  connection  with  the  transactions
contemplated  hereby shall  constitute  representations  and  warranties  by the
Borrower or such Subsidiary hereunder.

<PAGE>

                18.  ASSIGNMENT, PARTICIPATION AND ADDITIONAL BANKS.

      18.1.  Conditions to Assignment by Banks.  Except as provided herein, each
Bank may  assign  to one or more  Eligible  Assignees  all or a  portion  of its
interests,  rights and obligations under this Credit Agreement (including all or
a portion of its  Commitment  Percentage  and Commitment and the same portion of
the Loans at the time owing to it,  the Notes  held by it and its  participating
interest in the risk relating to any Letters of Credit);  provided that (i) each
of the Agent and,  unless a Default or Event of Default  shall have occurred and
be continuing,  the Borrower shall have given its prior written  consent to such
assignment, which consent, in the case of the Borrower, will not be unreasonably
withheld  (provided  that consent of the Borrower  shall not be required for any
such  assignment  by any Bank to an  Affiliate  of such Bank or to another  Bank
whose  Commitment  Percentage  will  not  thereby  equal  or  exceed  50% of the
aggregate  Commitments of all of the Banks),  (ii) each such assignment shall be
of a constant, and not a varying,  percentage of all the assigning Bank's rights
and obligations under this Credit  Agreement,  (iii) each assignment shall be in
an amount that is a whole  multiple of $5,000,000  and (iv) each Bank which is a
Bank on the date hereof shall retain, free of any such assignment,  an amount of
its  Commitment  of not  less  than  $5,000,000  and  (v)  the  parties  to such
assignment shall execute and deliver to the Agent, for recording in the Register
(as hereinafter  defined),  an Assignment and Acceptance,  substantially  in the
form of Exhibit G hereto (an  "Assignment  and  Acceptance"),  together with any
Notes subject to such assignment. Upon such execution,  delivery, acceptance and
recording,  from and after the effective date  specified in each  Assignment and
Acceptance,  which effective date shall be at least five (5) Business Days after
the execution thereof,  (i) the assignee thereunder shall be a party hereto and,
to the extent provided in such  Assignment and  Acceptance,  have the rights and
obligations  of a Bank  hereunder,  and (ii) the  assigning  Bank shall,  to the
extent  provided  in such  assignment  and  upon  payment  to the  Agent  of the
registration  fee referred to in Section 18.10, be released from its obligations
under this Credit Agreement.

      18.2. Certain Representations and Warranties;  Limitations;  Covenants. By
executing  and  delivering  an  Assignment  and  Acceptance,  the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:

      (a) other than the  representation  and warranty  that it is the legal and
beneficial  owner of the interest being  assigned  thereby free and clear of any
adverse claim, the assigning Bank makes no representation  or warranty,  express
or  implied,  and  assumes no  responsibility  with  respect to any  statements,
warranties  or  representations  made  in  or in  connection  with  this  Credit
Agreement or the execution,  legality,  validity,  enforceability,  genuineness,
sufficiency or value of this Credit  Agreement,  the other Loan Documents or any
other  instrument  or  document  furnished  pursuant  hereto or the  attachment,
perfection or priority of any security interest or mortgage,

      (b) the assigning Bank makes no  representation or warranty and assumes no
responsibility  with respect to the financial  condition of the Borrower and its
Subsidiaries or any other Person  primarily or secondarily  liable in respect of
any of the Obligations, or the performance or observance

<PAGE>

      by the Borrower  and its  Subsidiaries  or any other  Person  primarily or
secondarily  liable  in  respect  of  any  of the  Obligations  of any of  their
obligations  under this Credit  Agreement or any of the other Loan  Documents or
any other instrument or document furnished pursuant hereto or thereto;

      (c) such  assignee  confirms  that it has  received a copy of this  Credit
Agreement, together with copies of the most recent financial statements referred
to in Section 6.4 and Section 7.4 and such other documents and information as it
has deemed  appropriate  to make its own credit  analysis  and decision to enter
into such Assignment and Acceptance;

      (d) such  assignee  will,  independently  and  without  reliance  upon the
assigning  Bank,  the Agent or any other  Bank and based on such  documents  and
information as it shall deem  appropriate at the time,  continue to make its own
credit decisions in taking or not taking action under this Credit Agreement;

      (e)   such  assignee  represents  and  warrants  that it is an  Eligible
Assignee;

      (f) such assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Credit  Agreement and
the other Loan  Documents  as are  delegated to the Agent by the terms hereof or
thereof, together with such powers as are reasonably incidental thereto;

      (g) such  assignee  agrees that it will perform in  accordance  with their
terms all of the  obligations  that by the terms of this  Credit  Agreement  are
required to be performed by it as a Bank;

      (h)   such  assignee   represents   and  warrants  that  it  is  legally
authorized to enter into such Assignment and Acceptance; and

      (i) such  assignee  acknowledges  that it has made  arrangements  with the
assigning Bank  satisfactory to such assignee with respect to its pro rata share
of Letter of Credit Fees in respect of outstanding Letters of Credit.

      18.3.  Register.  The Agent shall  maintain a copy of each  Assignment and
Acceptance  delivered to it and a register or similar list (the  "Register") for
the  recordation  of the names  and  addresses  of the Banks and the  Commitment
Percentage  of, and principal  amount of the Loans owing to and Letter of Credit
Participations  purchased  by, the Banks from time to time.  The  entries in the
Register  shall  be  conclusive,  in the  absence  of  manifest  error,  and the
Borrower,  the Agent and the Banks may treat each Person  whose name is recorded
in the Register as a Bank  hereunder for all purposes of this Credit  Agreement.
The Register  shall be available for inspection by the Borrower and the Banks at
any reasonable  time and from time to time upon  reasonable  prior notice.  Upon
each such  recordation,  the assigning  Bank or, as the case may be,  Additional
Bank agrees to pay to the Agent a registration fee in the sum of $2,500.

      18.4. New Notes. Upon its receipt of an Assignment and Acceptance executed
by the parties to such assignment, together with each Note subject


<PAGE>

      to such assignment,  the Agent shall (i) record the information  contained
therein in the Register, and (ii) give prompt notice thereof to the Borrower and
the Banks (other than the assigning  Bank).  Within five (5) Business Days after
receipt of such notice,  the  Borrower,  at its own expense,  shall  execute and
deliver to the Agent, in exchange for each  surrendered  Note, a new Note to the
order of such Eligible Assignee in an amount equal to the amount assumed by such
Eligible  Assignee  pursuant  to such  Assignment  and  Acceptance  and,  if the
assigning  Bank has retained some portion of its  obligations  hereunder,  a new
Note to the  order  of the  assigning  Bank in an  amount  equal  to the  amount
retained  by  it  hereunder.   Such  new  Notes  shall  provide  that  they  are
replacements  for the  surrendered  Notes,  shall be in an  aggregate  principal
amount equal to the aggregate  principal amount of the surrendered  Notes, shall
be  dated  the  effective  date of such  Assignment  and  Acceptance  and  shall
otherwise be in  substantially  the form of the assigned Notes.  Within five (5)
days of issuance of any new Notes  pursuant to this Section  18.4,  the Borrower
shall  deliver  an  opinion of  counsel,  addressed  to the Banks and the Agent,
relating to the due authorization,  execution and delivery of such new Notes and
the  legality,  validity  and  binding  effect  thereof,  in form and  substance
satisfactory to the Banks. The surrendered Notes shall be cancelled and returned
to the Borrower.

      18.5.  Participations.  Each Bank may sell  participations  to one or more
banks  or  other  entities  in  all or a  portion  of  such  Bank's  rights  and
obligations  under this Credit Agreement and the other Loan Documents;  provided
that  (i)  each  such  participation  shall be in an  amount  of not  less  than
$5,000,000,  (ii) any such sale or participation shall not affect the rights and
duties of the selling  Bank  hereunder to the Borrower and (iii) the only rights
granted to the  participant  pursuant to such  participation  arrangements  with
respect to waivers,  amendments or  modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans,  extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant,  reduce
the  amount  of any  commitment  fees or Letter  of  Credit  Fees to which  such
participant  is  entitled or extend any  regularly  scheduled  payment  date for
principal or interest.

      18.6. Disclosure. The Borrower agrees that in addition to disclosures made
in  accordance  with  standard  and  customary  banking  practices  any Bank may
disclose  information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants  and potential  assignees or  participants  hereunder;
provided  that  such  assignees  or  participants  or  potential   assignees  or
participants shall agree (i) to treat in confidence such information unless such
information  otherwise  becomes  public  knowledge,  (ii) not to  disclose  such
information  to a third  party,  except as required by law or legal  process and
(iii) not to make use of such information for purposes of transactions unrelated
to such contemplated  assignment or participation.  For purposes of this Section
18.6 an assignee or participant or potential assignee or participant may include
a counterparty  with whom such Bank has entered into or potentially  might enter
into a derivative contract referenced to credit or other risks or events arising
under this Credit Agreement or any other Loan Document.

<PAGE>

      18.7.  Assignee  or  Participant  Affiliated  with  the  Borrower.  If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no  right  to vote as a Bank  hereunder  or  under  any of the  other  Loan
Documents  for  purposes  of  granting  consents  or waivers or for  purposes of
agreeing to amendments or other  modifications  to any of the Loan  Documents or
for purposes of making requests to the Agent pursuant to Section 12.1 or Section
12.2, and the determination of the Majority Banks shall for all purposes of this
Credit  Agreement  and the other Loan  Documents be made without  regard to such
assignee Bank's interest in any of the Loans or  Reimbursement  Obligations.  If
any Bank sells a  participating  interest  in any of the Loans or  Reimbursement
Obligations  to a  participant,  and  such  participant  is the  Borrower  or an
Affiliate of the Borrower,  then such  transferor Bank shall promptly notify the
Agent of the sale of such  participation.  A transferor Bank shall have no right
to vote as a Bank  hereunder  or  under  any of the  other  Loan  Documents  for
purposes  of  granting  consents  or  waivers or for  purposes  of  agreeing  to
amendments  or  modifications  to any of the Loan  Documents  or for purposes of
making  requests to the Agent  pursuant to Section  12.1 or Section  12.2 to the
extent that such  participation  is  beneficially  owned by the  Borrower or any
Affiliate of the Borrower, and the determination of the Majority Banks shall for
all  purposes  of this Credit  Agreement  and the other Loan  Documents  be made
without  regard  to the  interest  of  such  transferor  Bank  in the  Loans  or
Reimbursement Obligations to the extent of such participation.

      18.8. Miscellaneous Assignment Provisions. Any assigning Bank shall retain
its rights to be  indemnified  pursuant to Section 15 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Bank is
not  incorporated  under the laws of the  United  States of America or any state
thereof,  it shall,  prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan  Documents for its account,  deliver to
the Borrower and the Agent  certification  as to its exemption from deduction or
withholding  of any United States federal  income taxes.  Anything  contained in
this Section 18 to the contrary notwithstanding, any Bank may at any time pledge
all or any  portion of its  interest  and rights  under  this  Credit  Agreement
(including all or any portion of its Notes) to any of the twelve Federal Reserve
Banks organized  under Section 4 of the Federal  Reserve Act, 12 U.S.C.  Section
341. No such pledge or the  enforcement  thereof  shall release the pledgor Bank
from its obligations hereunder or under any of the other Loan Documents.

      18.9.  Assignment by Borrower.  The Borrower  shall not assign or transfer
any of its rights or  obligations  under any of the Loan  Documents  without the
prior written consent of each of the Banks.

      18.10. Additional Banks. On one or more occasions,  one or more Additional
Banks may be admitted as Banks party to this Credit Agreement in connection with
an increase of the Total  Commitment  pursuant  to Section  2.4,  subject to (i)
execution and delivery by any such Additional  Bank to the Agent,  for recording
in the  Register  pursuant  to  Section  18.4,  of an  Instrument  of  Adherence
substantially  in the form of Exhibit H hereto (an  "Instrument of  Adherence"),
(ii)  acceptance  of such  Instrument  of Adherence by each of the Agent and the
Borrower by their respective executions thereof, (iii) execution and delivery by
the Borrower of a Revolving Credit Note to the

<PAGE>

      order of such  Additional  Bank in the form of Exhibit A hereto,  and (iv)
the  payment  by the  Additional  Bank  to the  Agent  of the  registration  fee
specified in Section 18.4. Upon the  satisfaction  of the foregoing  conditions,
from  and  after  the  effective  date  specified  in each  such  Instrument  of
Adherence,  which  effective date shall be at least five (5) Business Days after
the execution thereof, the Additional Bank shall be a Bank party hereto and have
the rights and obligations of a Bank hereunder. By its execution and delivery of
an Instrument of Adherence,  each Additional Bank shall represent and warrant to
and agree with the other parties to this Credit Agreement as follows:

      (a)  that  such  Additional  Bank  has  received  a copy  of  this  Credit
Agreement, together with copies of the most recent financial statements referred
to in Section 6.4 and Section 7.4 and such other documents and information as it
has deemed  appropriate  to make its own credit  analysis  and decision to enter
into such Instrument of Adherence;

      (b) that such Additional  Bank will,  independently  and without  reliance
upon the Agent or any other Bank and based on such documents and  information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Credit Agreement;

      (c)   that such Additional Bank is qualified as an Eligible Assignee;

      (d) that such  Additional  Bank appoints and  authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this Credit
Agreement  and the other Loan  Documents  as are  delegated  to the Agent by the
terms hereof or thereof,  together with such powers as are reasonably incidental
thereto;

      (e) that such  Additional  Bank  agrees  that it will  perform  all of the
obligations  that by the  terms of this  Credit  Agreement  are  required  to be
performed by it as a Bank; and

      (f) that such  Additional  Bank is legally  authorized  to enter into such
Instrument of Adherence.

                                 19.  NOTICES, ETC.

      Except as  otherwise  expressly  provided  in this Credit  Agreement,  all
notices and other  communications  made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit  Applications  shall be in
writing and shall be delivered in hand,  mailed by United  States  registered or
certified first class mail, postage prepaid,  sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:

      (a) if to the  Borrower,  at  191  Spring  Street,  Lexington,  MA  02421,
Attention:  Treasurer, or at such other address for notice as the Borrower shall
last have furnished in writing to the Person giving the notice;

      (b)   if to the Agent,  at 100  Federal  Street,  Boston,  Massachusetts
02110, USA, Attention: Peter L. Griswold, Managing Director, or such other

<PAGE>

      address for notice as the Agent shall last have  furnished in writing to
the Person giving the notice; and

      (c) if to any Bank, at such Bank's address set forth on Schedule 1 hereto,
or such other  address  for notice as such Bank  shall  have last  furnished  in
writing to the Person giving the notice.

      Any such notice or demand  shall be deemed to have been duly given or made
and to have become  effective  (i) if  delivered by hand,  overnight  courier or
facsimile to a responsible officer of the party to which it is directed,  at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified  first-class mail,  postage prepaid,  on
the third Business Day following the mailing thereof.

                               20. GOVERNING LAW.

      THIS CREDIT  AGREEMENT  AND,  EXCEPT AS  OTHERWISE  SPECIFICALLY  PROVIDED
THEREIN,  EACH OF THE OTHER LOAN  DOCUMENTS ARE CONTRACTS  UNDER THE LAWS OF THE
COMMONWEALTH  OF  MASSACHUSETTS  AND  SHALL FOR ALL  PURPOSES  BE  CONSTRUED  IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID  COMMONWEALTH OF  MASSACHUSETTS
(EXCLUDING  THE LAWS  APPLICABLE  TO CONFLICTS  OR CHOICE OF LAW).  THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT  AGREEMENT OR ANY OF THE
OTHER  LOAN  DOCUMENTS  MAY BE  BROUGHT  IN THE  COURTS OF THE  COMMONWEALTH  OF
MASSACHUSETTS  OR  ANY  FEDERAL  COURT  SITTING  THEREIN  AND  CONSENTS  TO  THE
NONEXCLUSIVE  JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE  BORROWER BY MAIL AT THE  ADDRESS  SPECIFIED  IN ss.19.  THE
BORROWER  HEREBY WAIVES ANY OBJECTION  THAT IT MAY NOW OR HEREAFTER  HAVE TO THE
VENUE OF ANY SUCH  SUIT OR ANY SUCH  COURT OR THAT SUCH  SUIT IS  BROUGHT  IN AN
INCONVENIENT COURT.

                                  21. HEADINGS.

      The captions in this Credit  Agreement  are for  convenience  of reference
only and shall not define or limit the provisions hereof.

                                 22.  COUNTERPARTS.

      This Credit  Agreement and any amendment hereof may be executed in several
counterparts  and by each  party on a separate  counterpart,  each of which when
executed and delivered  shall be an original,  and all of which  together  shall
constitute  one  instrument.  In proving  this Credit  Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.

                            23.  ENTIRE AGREEMENT, ETC.

      The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions  contemplated  hereby.  Neither this Credit  Agreement nor any term
hereof may be changed, waived,  discharged or terminated,  except as provided in
ss.25.

<PAGE>

                          24.  WAIVER OF JURY TRIAL.

      . The Borrower hereby waives its right to a jury trial with respect to any
action or claim  arising  out of any  dispute  in  connection  with this  Credit
Agreement,  the  Notes  or  any of the  other  Loan  Documents,  any  rights  or
obligations  hereunder  or  thereunder  or the  performance  of such  rights and
obligations.  Except as prohibited by law, the Borrower  hereby waives any right
it may have to claim or recover in any  litigation  referred to in the preceding
sentence  any  special,  exemplary,  punitive  or  consequential  damages or any
damages  other  than,  or in addition  to,  actual  damages.  The  Borrower  (i)
certifies that no representative, agent or attorney of any Bank or the Agent has
represented,  expressly or otherwise,  that such Bank or the Agent would not, in
the  event  of  litigation,  seek to  enforce  the  foregoing  waivers  and (ii)
acknowledges  that the Agent and the Banks have been  induced to enter into this
Credit  Agreement,  the other Loan  Documents  to which it is a party by,  among
other things, the waivers and certifications contained herein.

                      25.  CONSENTS, AMENDMENTS, WAIVERS, ETC.

      Any consent or approval  required or permitted by this Credit Agreement to
be given by the Banks may be given, and any term of this Credit  Agreement,  the
other Loan Documents or any other instrument  related hereto or mentioned herein
may be amended,  and the performance or observance by the Borrower or any of its
Subsidiaries of any terms of this Credit Agreement,  the other Loan Documents or
such other  instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either retroactively
or  prospectively)  with, but only with, the written consent of the Borrower and
the written consent of the Majority Banks.  Notwithstanding  the foregoing,  the
rate of interest on the Notes (other than interest  accruing pursuant to Section
5.10.2  following the effective  date of any waiver by the Majority Banks of the
Default or Event of Default  relating  thereto) or the amount of the  commitment
fee or Letter of Credit Fees may not be decreased without the written consent of
each Bank affected thereby;  the amount of the Commitment of any Bank may not be
increased  without the written  consent of the  Borrower  and of such Bank;  the
Syndicated  Loan Maturity Date may not be postponed  without the written consent
of each Bank affected  thereby;  this Section 25 and the  definition of Majority
Banks may not be amended,  and no Guaranty may be released,  without the written
consent of all of the Banks;  and the amount of the Agent's Fee or any Letter of
Credit Fees  payable  for the Agent's  account and Section 15 may not be amended
without the written  consent of the Agent.  No waiver  shall extend to or affect
any obligation not expressly waived or impair any right consequent  thereon.  No
course of dealing or delay or  omission  on the part of the Agent or any Bank in
exercising  any  right  shall  operate  as a  waiver  thereof  or  otherwise  be
prejudicial  thereto. No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other circumstances.

                                 26.  SEVERABILITY.

      The  provisions  of this Credit  Agreement  are  severable  and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall

<PAGE>

      affect  only  such  clause  or  provision,   or  part  thereof,   in  such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Credit Agreement in
any jurisdiction.

                            [Signature page follows]

<PAGE>

      IN  WITNESS  WHEREOF,  the  undersigned  have duly  executed  this  Credit
Agreement as a sealed instrument as of the date first set forth above.

                              THE STRIDE RITE CORPORATION



                              By:         /s/ John M. Kelliher
                                John M. Kelliher

                              Treasurer

                              BANKBOSTON, N.A., individually and as Agent


                              By:         /s/ Peter L. Griswold
                                Peter L. Griswold

                                Managing Director

                              BANK OF AMERICA, N.A.


                              By:         /s/ Lisa B. Choi
                               Name: Lisa B. Choi

                              Title: Vice President

                              BANK ONE, NA
                              (Main office Chicago)

                              By:         /s/ Vincent R. Hercheb
                            Name: Vincent R. Hercheb

                              Title: Vice President

                                  SUNTRUST BANK

                              By:         /s/ W. David Widsom
                              Name: W. David Wisdom

                              Title: Vice President

                              THE BANK OF NEW YORK

                              By:         /s/ Charlotte Sohn

                              Name: Charlotte Sohn

                              Title: Vice President

<PAGE>

                                   SCHEDULE 1

                                      BANKS

Bank                         Commitment Amount      Commitment Percentage

BankBoston, N.A.                $23,000,000                30.667%
100 Federal Street
Boston, MA  02110
Attn: Peter L. Griswold,
      Managing Director

Bank of America, N.A.           $13,000,000                17.333%
335 Madison Avenue
5th Floor
New York, NY  10017
Attn:

Bank One, NA                    $13,000,000                17.333%
1 Bank One Plaza
14th Floor
Chicago, IL 60670 Attn:

SunTrust Bank                   $13,000,000                17.333%
711 Fifth Avenue
16th Floor
New York, NY  10022
Attn:

The Bank of New York            $13,000,000                17.333%
One Wall Street
New York, NY  10286
Attn:



<PAGE>

                                                                       EXHIBIT A

                              REVOLVING CREDIT NOTE

$____________________                                   January __, 2000

      FOR VALUE  RECEIVED,  the  undersigned  The Stride Rite  Corporation,  a
Massachusetts  corporation  (the  "Borrower"),  hereby  promises to pay to the
order  of  ____________________,   a   ________________________________   (the
"Bank")        at        the        Bank's        head        office        at
----------------------------------------------------------------------:

      (a) prior to or on [January __, 2003] the  principal  amount of __________
($________)  or, if less, the aggregate  unpaid  principal  amount of Syndicated
Loans  advanced by the Bank to the  Borrower  pursuant to the  Revolving  Credit
Agreement  dated as of January  __,  2000 (as amended and in effect from time to
time,  the "Credit  Agreement"),  among the  Borrower,  the Bank and other banks
party thereto, and BankBoston, N.A., as Agent for the banks.

      (b)   the  principal  outstanding  hereunder  from  time  to time at the
times provided in the Credit Agreement; and

      (c) interest on the principal balance hereof from time to time outstanding
from the  Closing  Date under the Credit  Agreement  through and  including  the
maturity  date  hereof  at the  times  and at the rate  provided  in the  Credit
Agreement.

      This Note evidences  borrowings  under and has been issued by the Borrower
in accordance  with the terms of the Credit  Agreement.  The Bank and any holder
hereof is entitled to the  benefits of the Credit  Agreement  and the other Loan
Documents, and may enforce the agreements of the Borrower contained therein, and
any holder hereof may exercise the respective  remedies  provided for thereby or
otherwise  available in respect  thereof,  all in accordance with the respective
terms thereof. All capitalized terms used in this Note and not otherwise defined
herein shall have the same meanings herein as in the Credit Agreement.

      The Borrower irrevocably  authorizes the Bank to make or cause to be made,
at or about the time of the Drawdown Date of any Syndicated  Loan or at the time
of receipt of any payment of principal of this Note, an appropriate  notation on
the grid attached to this Note, or the  continuation  of such grid, or any other
similar  record,  including  computer  records,  reflecting  the  making of such
Syndicated  Loan  or (as the  case  may be) the  receipt  of such  payment.  The
outstanding  amount of the  Syndicated  Loans set forth on the grid  attached to
this Note,  or the  continuation  of such  grid,  or any other  similar  record,
including  computer  records,  maintained  by  the  Bank  with  respect  to  any
Syndicated  Loans shall be prima facie evidence of the principal  amount thereof
owing and unpaid to the Bank,  but the  failure  to  record,  or any error in so
recording,  any such amount on any such grid, continuation or other record shall
not limit or otherwise affect the

<PAGE>

       obligation  of the Borrower  hereunder  or under the Credit  Agreement to
make payments of principal of and interest on this Note when due.

      The Borrower  has the right in certain  circumstances  and the  obligation
under certain other  circumstances  to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.

      If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Credit Agreement.

      No delay or  omission  on the part of the  Bank or any  holder  hereof  in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one  occasion be deemed a bar or waiver of the same or any other right on
any further occasion.

      The  Borrower  and  every  endorser  and  guarantor  of  this  Note or the
obligation  represented hereby waives presentment,  demand,  notice, protest and
all other  demands  and notices in  connection  with the  delivery,  acceptance,
performance,  default or  enforcement of this Note, and assents to any extension
or  postponement  of the  time  of  payment  or  any  other  indulgence,  to any
substitution,  exchange or release of collateral  and to the addition or release
of any other party or person primarily or secondarily liable.

      THIS NOTE AND THE  OBLIGATIONS  OF THE  BORROWER  HEREUNDER  SHALL FOR ALL
PURPOSES  BE  GOVERNED  BY AND  CONSTRUED  IN  ACCORDANCE  WITH  THE  LAW OF THE
COMMONWEALTH  OF  MASSACHUSETTS  (EXCLUDING THE LAWS  APPLICABLE TO CONFLICTS OR
CHOICE OF LAW).  THE BORROWER  AGREES THAT ANY SUIT FOR THE  ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE  COMMONWEALTH OF  MASSACHUSETTS  OR ANY
FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE  NONEXCLUSIVE  JURISDICTION
OF SUCH  COURT AND THE  SERVICE  OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN ss.19 OF THE CREDIT AGREEMENT.  THE
BORROWER  HEREBY WAIVES ANY OBJECTION  THAT IT MAY NOW OR HEREAFTER  HAVE TO THE
VENUE OF ANY SUCH  SUIT OR ANY SUCH  COURT OR THAT SUCH  SUIT IS  BROUGHT  IN AN
INCONVENIENT COURT.

      This Note shall be deemed to take effect as a sealed  instrument under the
laws of the Commonwealth of Massachusetts.

      IN WITNESS WHEREOF,  the undersigned has caused this Revolving Credit Note
to be  signed  in its  corporate  name and its  corporate  seal to be  impressed
thereon  by its  duly  authorized  officer  as of the day and year  first  above
written.

<PAGE>

      [Corporate Seal]


                                    THE STRIDE RITE CORPORATION




                                    By: _______________________________
                                         Title:


<PAGE>

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                               Amount of      Balance of
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    Date        of Loan        or Prepaid       Unpaid       Made By:
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<PAGE>

                                                                       EXHIBIT B

                                    GUARANTY

      GUARANTY,   dated  as  of  January  __,  2000,  by   ________________,   a
_________________  corporation  (the  "Guarantor")  in favor of (i)  BankBoston,
N.A., a national banking association,  as agent (hereinafter,  in such capacity,
the  "Agent")  for  itself  and the  other  banking  institutions  (hereinafter,
collectively, the "Banks") which are or may become parties to a Revolving Credit
Agreement  dated as of January  __,  2000 (as amended and in effect from time to
time,  the  "Credit   Agreement"),   among  The  Stride  Rite   Corporation,   a
Massachusetts  corporation  (the  "Company"),  the Banks and the Agent, and (ii)
each of the Banks.

      WHEREAS,  the Company and the  Guarantor are members of a group of related
corporations,  the  success  of any one of  which  is  dependent  in part on the
success of the other members of such group;

      WHEREAS,  the Guarantor expects to receive substantial direct and indirect
benefits from the  extensions of credit to the Company by the Banks  pursuant to
the Credit Agreement (which benefits are hereby acknowledged);

      WHEREAS,  it is a condition  precedent  to the Banks'  making any loans or
otherwise  extending  credit to the Company under the Credit  Agreement that the
Guarantor execute and deliver to the Agent, for the benefit of the Banks and the
Agent, a guaranty substantially in the form hereof; and

      WHEREAS, the Guarantor wishes to guaranty the Company's obligations to the
Banks and the Agent  under or in  respect of the Credit  Agreement  as  provided
herein;

      NOW,  THEREFORE,  the Guarantor hereby agrees with the Banks and the Agent
as follows:

      1.  Definitions.  The term  "Obligations"  and all other capitalized terms
used herein  without  definition  shall have the  respective  meanings  provided
therefor in the Credit Agreement.

      2. Guaranty of Payment and Performance. The Guarantor hereby guarantees to
the Banks  and the Agent the full and  punctual  payment  when due  (whether  at
stated maturity, by required pre-payment, by acceleration or otherwise), as well
as the  performance,  of all of the  Obligations  including all such which would
become due but for the  operation  of the  automatic  stay  pursuant  to Section
362(a) of the Federal  Bankruptcy  Code and the operation of Sections 502(b) and
506(b)  of  the  Federal   Bankruptcy   Code.  This  Guaranty  is  an  absolute,
unconditional  and  continuing  guaranty  of the full and  punctual  payment and
performance of all of the Obligations and not of their  collectability  only and
is in no way conditioned  upon any requirement  that the Agent or any Bank first
attempt  to collect  any of the  Obligations  from the  Company or resort to any
collateral  security or other  means of  obtaining  payment.  Should the Company
default in the payment or performance of any of the Obligations, the obligations
of the Guarantor  hereunder  with respect to such  Obligations in default shall,
upon demand by the Agent, become

<PAGE>

immediately  due and payable to the Agent,  for the benefit of the Banks and the
Agent, without demand or notice of any nature, all of which are expressly waived
by the  Guarantor.  Payments by the  Guarantor  hereunder may be required by the
Agent on any number of occasions.  All payments by the Guarantor hereunder shall
be made to the  Agent,  in the  manner  and at the  place of  payment  specified
therefor in the Credit Agreement, for the account of the Banks and the Agent.

      3.  Guarantor's  Agreement to Pay  Enforcement  Costs,  etc. The Guarantor
further agrees,  as the principal obligor and not as a guarantor only, to pay to
the Agent, on demand,  all costs and expenses  (including  court costs and legal
expenses)  incurred or expended by the Agent or any Bank in connection  with the
Obligations,  this Guaranty and the enforcement thereof,  together with interest
on  amounts  recoverable  under this  Section 3 from the time when such  amounts
become  due until  payment,  whether  before or after  judgment,  at the rate of
interest for overdue principal set forth in the Credit Agreement,  provided that
if  such  interest  exceeds  the  maximum  amount  permitted  to be  paid  under
applicable  law, then such interest  shall be reduced to such maximum  permitted
amount.

      4. Waivers by Guarantor;  Bank's Freedom to Act. The Guarantor agrees that
the  Obligations  will be paid and performed  strictly in accordance  with their
respective terms, regardless of any law, regulation or order now or hereafter in
effect in any  jurisdiction  affecting  any of such  terms or the  rights of the
Agent or any  Bank  with  respect  thereto.  The  Guarantor  waives  promptness,
diligences,  presentment,  demand, protest, notice of acceptance,  notice of any
Obligations  incurred and all other notices of any kind,  all defenses which may
be available by virtue of any valuation,  stay,  moratorium law or other similar
law now or hereafter in effect,  any right to require the  marshalling of assets
of the Company or any other  entity or other  person  primarily  or  secondarily
liable  with  respect to any of the  Obligations,  and all  suretyship  defenses
generally.  Without  limiting the  generality  of the  foregoing,  the Guarantor
agrees to the  provisions of any  instrument  evidencing,  securing or otherwise
executed in connection  with any Obligation  and agrees that the  obligations of
the  Guarantor  hereunder  shall not be released or  discharged,  in whole or in
part,  or  otherwise  affected  by (i) the  failure  of the Agent or any Bank to
assert any claim or demand or to enforce any right or remedy against the Company
or any other entity or other person primarily or secondarily liable with respect
to  any  of the  Obligations;  (ii)  any  extensions,  compromise,  refinancing,
consolidation or renewals of any Obligation; (iii) any change in the time, place
or manner of  payment of any of the  Obligations  or any  rescissions,  waivers,
compromise,  refinancing,  consolidation or other amendments or modifications of
any of the terms or provisions  of the Credit  Agreement,  the Notes,  the other
Loan Documents or any other agreement evidencing, securing or otherwise executed
in connection with any of the  Obligations,  (iv) the addition,  substitution or
release of any entity or other person  primarily or  secondarily  liable for any
Obligation;  (v) the adequacy of any rights which the Agent or any Bank may have
against any collateral  security or other means of obtaining repayment of any of
the  Obligations;  (vi) the  impairment  of any  collateral  securing any of the
Obligations, including without limitation the failure to perfect or preserve any
rights which the Agent or any Bank might have in such collateral security or the
substitution, exchange, surrender, release, loss or

<PAGE>

destruction of any such collateral security;  or (vii) any other act or omission
which  might in any manner or to any extent  vary the risk of the  Guarantor  or
otherwise  operate as a release or discharge of the Guarantor,  all of which may
be done without notice to the Guarantor. To the fullest extent permitted by law,
the Guarantor  hereby expressly waives any and all rights or defenses arising by
reason of (A) any "one action" or  "anti-deficiency"  law which would  otherwise
prevent the Agent or any Bank from bringing any action,  including any claim for
a deficiency,  or exercising  any other right or remedy  (including any right of
set-off),  against  the  Guarantor  before or after the  Agent's or such  Bank's
commencement or completion of any foreclosure  action,  whether  judicially,  by
exercise of power of sale or otherwise,  or (B) any other law which in any other
way would otherwise require any election of remedies by the Agent or any Bank.

      5.  Unenforceability of Obligations Against Company. If for any reason the
Company has no legal existence or is under no legal  obligation to discharge any
of the Obligations,  or if any of the Obligations have become irrecoverable from
the Company by reason of the Company's insolvency,  bankruptcy or reorganization
or by other  operation  of law or for any  other  reason,  this  Guaranty  shall
nevertheless  be binding on the Guarantor to the same extent as if the Guarantor
at all times had been the  principal  obligor  on all such  Obligations.  In the
event that  acceleration  of the time for payment of any of the  Obligations  is
stayed upon the insolvency,  bankruptcy or reorganization of the Company, or for
any other reason,  all such amounts otherwise subject to acceleration  under the
terms of the Credit Agreement,  the Notes, the other Loan Documents or any other
agreement  evidencing,  securing or otherwise  executed in  connection  with any
Obligation shall be immediately due and payable by the Guarantor.

      6.  Subrogation; Subordination.

          6.1.  Waiver of Rights  Against  Company.  Until the final payment and
performance in full of all of the Obligations,  the Guarantor shall not exercise
and hereby waives any rights against the Company  arising as a result of payment
by the Guarantor hereunder, by way of subrogation,  reimbursement,  restitution,
contribution or otherwise,  and will not prove any claim in competition with the
Agent  or any  Bank in  respect  of any  payment  hereunder  in any  bankruptcy,
insolvency or  reorganization  case or proceedings of any nature;  the Guarantor
will not claim any setoff,  recoupment  or  counterclaim  against the Company in
respect of any liability of the Guarantor to the Company.

          6.2. Subordination. The payment of any amounts due with respect to any
indebtedness  of the  Company  for  money  borrowed  or credit  received  now or
hereafter owed to the Guarantor is hereby  subordinated  to the prior payment in
full of all of the Obligations.  The Guarantor agrees that, after the occurrence
of any  default in the payment or  performance  of any of the  Obligations,  the
Guarantor  will not  demand,  sue for or  otherwise  attempt to collect any such
indebtedness of the Company to the Guarantor until all of the Obligations  shall
have  been  paid in  full.  If,  notwithstanding  the  foregoing  sentence,  the
Guarantor  shall  collect,  enforce  or receive  any  amounts in respect of such
indebtedness while any Obligations are still outstanding,  such amounts shall be
collected, enforced and received by the

<PAGE>

Guarantor  as trustee for the Banks and the Agent and be paid over to the Agent,
for the  benefit  of the Banks and the  Agent,  on  account  of the  Obligations
without  affecting in any manner the liability of the Guarantor  under the other
provisions of this Guaranty.

          6.3.  Provisions  Supplemental.  The  provisions of this ss.6 shall be
supplemental  to and not in  derogation  of any rights and remedies of the Banks
and the Agent under any separate subordination  agreement which the Agent may at
any time and from time to time enter into with the  Guarantor for the benefit of
the Banks and the Agent.

      7.  Security;  Setoff.  The Guarantor  grants to each of the Agent and the
Banks,  as security for the full and punctual  payment and performance of all of
the  Guarantor's  obligations  hereunder,  a  continuing  lien  on and  security
interest in all securities or other  property  belonging to the Guarantor now or
hereafter  held by the  Agent  or such  Bank  and in all  deposits  (general  or
special, time or demand, provisional or final) and other sums credited by or due
from the Agent or such Bank to the  Guarantor  or subject to  withdrawal  by the
Guarantor.  Regardless of the adequacy of any collateral security or other means
of obtaining payment of any of the Obligations,  each of the Agent and the Banks
is hereby  authorized at any time and from time to time,  without  notice to the
Guarantor (any such notice being  expressly  waived by the Guarantor) and to the
fullest  extent  permitted by law, to set off and apply such  deposits and other
sums against the  obligations of the Guarantor  under this Guaranty,  whether or
not the Agent or such Bank shall have made any demand under this Guaranty.

      8.  Further  Assurances.  The  Guarantor  agrees that it will from time to
time,  at the  request of the Agent,  do all such  things and  execute  all such
documents as the Agent may  consider  necessary or desirable to give full effect
to this  Guaranty and to perfect and preserve the rights and powers of the Banks
and the Agent  hereunder.  The  Guarantor  acknowledges  and  confirms  that the
Guarantor  itself has  established  its own adequate means of obtaining from the
Company  on  a  continuing  basis  all  information  desired  by  the  Guarantor
concerning  the financial  condition of the Company and that the Guarantor  will
look to the Company and not to the Agent or any Bank in order for the  Guarantor
to keep adequately informed of changes in the Company's financial condition.

      9.  Termination;  Reinstatement.  This Guaranty shall remain in full force
and effect until the Agent is given written notice of the Guarantor's  intention
to discontinue  this Guaranty,  notwithstanding  any  intermediate  or temporary
payment  or  settlement  of the  whole or any part of the  Obligations.  No such
notice shall be effective  unless received and acknowledged by an officer of the
Agent at the  address  of the Agent for  notices  set forth in Section 19 of the
Credit  Agreement.  No such notice  shall  affect any rights of the Agent or any
Bank hereunder,  including without limitation the rights set forth in Sections 4
and 6, with respect to any Obligations  incurred or accrued prior to the receipt
of such notice or any Obligations  incurred or accrued  pursuant to any contract
or commitment in existence  prior to such receipt.  This Guaranty shall continue
to be effective or be  reinstated,  notwithstanding  any such notice,  if at any
time any  payment  made or value  received  with  respect to any  Obligation  is
rescinded or must otherwise be returned by the Agent or any

<PAGE>

Bank upon the  insolvency,  bankruptcy  or  reorganization  of the  Company,  or
otherwise, all as though such payment had not been made or value received.

      10.  Successors  and  Assigns.  This  Guaranty  shall be binding  upon the
Guarantor,  its  successors  and assigns,  and shall inure to the benefit of the
Agent,  the  Banks,  Additional  Banks  (if any)  becoming  party to the  Credit
Agreement,  and their respective  successors,  transferees and assigns.  Without
limiting  the  generality  of the  foregoing  sentence,  each Bank may assign or
otherwise transfer the Credit Agreement,  the Notes, the other Loan Documents or
any  other  agreement  or note  held by it  evidencing,  securing  or  otherwise
executed in  connection  with the  Obligations,  or sell  participations  in any
interest therein,  to any other entity or other person, and such other entity or
other  person  shall  thereupon  become  vested,  to the extent set forth in the
agreement  evidencing such assignment,  transfer or participation,  with all the
rights in respect  thereof  granted to such Bank herein,  all in accordance with
Section  18 of the Credit  Agreement.  The  Guarantor  may not assign any of its
obligations hereunder.

      11.  Amendments  and Waivers.  No amendment or waiver of any  provision of
this Guaranty nor consent to any departure by the Guarantor  therefrom  shall be
effective  unless the same shall be in writing  and signed by the Agent with the
consent of the Majority  Banks.  No failure on the part of the Agent or any Bank
to exercise, and no delay in exercising,  any right hereunder shall operate as a
waiver thereof;  nor shall any single or partial exercise of any right hereunder
preclude  any other or further  exercise  thereof or the  exercise  of any other
right.

      12.  Notices.  All notices and other  communications  called for hereunder
shall be made in writing and, unless  otherwise  specifically  provided  herein,
shall be deemed to have been duly made or given when delivered by hand or mailed
first class,  postage prepaid, or, in the case of telegraphic or telexed notice,
when  transmitted,  answer  back  received,  addressed  as  follows:  if to  the
Guarantor,  at the address set forth beneath its signature hereto, and if to the
Agent,  at the  address  for notices to the Agent set forth in Section 19 of the
Credit Agreement, or at such address as either party may designate in writing to
the other.

      13. Governing Law;  Consent to Jurisdiction.  THIS GUARANTY IS INTENDED TO
TAKE EFFECT AS A SEALED  INSTRUMENT  AND SHALL BE GOVERNED BY, AND  CONSTRUED IN
ACCORDANCE  WITH, THE LAWS OF THE COMMONWEALTH OF  MASSACHUSETTS.  The Guarantor
agrees that any suit for the  enforcement of this Guaranty may be brought in the
courts of the Commonwealth of Massachusetts or any federal court sitting therein
and consents to the  nonexclusive  jurisdiction  of such court and to service of
process in any such suit being made upon the  Guarantor  by mail at the  address
specified by reference in Section 12. The Guarantor  hereby waives any objection
that it may now or  hereafter  have to the  venue of any  such  suit or any such
court or that such suit was brought in an inconvenient court.

      14. Waiver of Jury Trial.  THE GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY
TRIAL  WITH  RESPECT  TO ANY  ACTION  OR CLAIM  ARISING  OUT OF ANY  DISPUTE  IN
CONNECTION  WITH THIS  GUARANTY,  ANY  RIGHTS OR  OBLIGATIONS  HEREUNDER  OR THE
PERFORMANCE OF ANY OF SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by


<PAGE>

law, the Guarantor hereby waives any right which it may have to claim or recover
in any litigation referred to in the preceding sentence any special,  exemplary,
punitive or consequential  damages or any damages other than, or in addition to,
actual  damages.  The Guarantor (i) certifies that neither the Agent or any Bank
nor  any  representative,  agent  or  attorney  of the  Agent  or any  Bank  has
represented,  expressly or  otherwise,  that the Agent or any Bank would not, in
the  event  of  litigation,  seek to  enforce  the  foregoing  waivers  and (ii)
acknowledges  that,  in entering  into the Credit  Agreement  and the other Loan
Documents to which the Agent or any Bank is a party, the Agent and the Banks are
relying upon, among other things,  the waivers and  certifications  contained in
this Section 14.

      15.  Miscellaneous.  This Guaranty constitutes the entire agreement of the
Guarantor with respect to the matters set forth herein.  The rights and remedies
herein provided are cumulative and not exclusive of any remedies provided by law
or any other  agreement,  and this  Guaranty  shall be in  addition to any other
guaranty of or collateral security for any of the Obligations. The invalidity or
unenforceability  of any one or more sections of this Guaranty  shall not affect
the validity or enforceability of its remaining provisions. Captions are for the
ease of  reference  only and  shall  not  affect  the  meaning  of the  relevant
provisions.  The meanings of all defined  terms used in this  Guaranty  shall be
equally applicable to the singular and plural forms of the terms defined.

      IN WITNESS WHEREOF,  the Guarantor has caused this Guaranty to be executed
and delivered as of the date first above written.

                                    [NAME OF GUARANTOR]




                                    By: _______________________________
                                         Title:

                                    Address:

                                    Telex:  ___________________________

                                    Telecopy:  ________________________



<PAGE>

                                                                       EXHIBIT C

                             SYNDICATED Loan Request

                           THE STRIDE RITE CORPORATION

                                     [date]

BankBoston, N.A., as Agent
100 Federal Street
Boston, MA 02110

Attention:  ___________________

Ladies and Gentlemen:

      Reference is hereby made to that certain Revolving Credit Agreement, dated
as of January  __,  2000 (as the same may be amended  and in effect from time to
time,  the  "Credit   Agreement"),   among  The  Stride  Rite  Corporation  (the
"Borrower"),  BankBoston,  N.A., and the other lending institutions which are or
may become parties thereto from time to time  (collectively,  the "Banks"),  and
BankBoston, N.A., as agent for the Banks (the "Agent").  Capitalized terms which
are used herein without definition and which are defined in the Credit Agreement
shall have the same meanings herein as in the Credit Agreement.

      Pursuant to Section 2.7 of the Credit Agreement,  we hereby request that a
Syndicated  Loan  consisting  of [a Base  Rate Loan in the  principal  amount of
$__________, or a LIBOR Rate Loan in the principal amount of $__________ with an
Interest  Period of _________] be made on  __________  __, 200__.  We understand
that this request is  irrevocable  and binding on us and  obligates us to accept
the requested Syndicated Loan on such date.

      We hereby certify that:

      (a) The aggregate  outstanding principal amount of the Syndicated Loans on
today's date, excluding this Borrowing, is $_________, the aggregate outstanding
principal  amount of the Swing Line Loans on today's  date,  including any Swing
Line Loans to be made today, is $_________,  the aggregate amount of Competitive
Bid Loans outstanding on today's date is $_________,  and the sum of the Maximum
Drawing  Amount  and all Unpaid  Reimbursement  Obligations  on today's  date is
$_________. The remainder of the Total Commitment minus the sum of the foregoing
amounts specified in this clause (a) is $____________.

      (b) We  will  use  the  proceeds  of the  requested  Syndicated  Loan in
accordance with the provisions of the Credit Agreement,

      (c) Each of the  representations  and  warranties  contained in the Credit
Agreement  or  in  any  document  or  instrument  delivered  pursuant  to  or in
connection with the Credit  Agreement was true as of the date as of which it was
made and is true at and as of the date  hereof  (except to the extent of changes
resulting from transactions contemplated or permitted by the Credit

<PAGE>

Agreement and changes  occurring in the ordinary  course of business that singly
or in the  aggregate  are not  materially  adverse,  and to the extent that such
representations and warranties related expressly to an earlier date).

      (d)  No Default or Event of Default has occurred and is continuing.

                                    Very truly yours,

                                    THE STRIDE RITE CORPORATION



                                       By:

                                     Title:

<PAGE>

                                                                   EXHIBIT D-1


                              COMPETITIVE BID NOTE

$____________________                                   January __, 2000

      FOR VALUE  RECEIVED,  the  undersigned  The Stride Rite  Corporation,  a
Massachusetts  corporation  (the  "Borrower"),  hereby  promises to pay to the
order  of  ____________________,   a   ________________________________   (the
"Bank")        at        the        Bank's        head        office        at
----------------------------------------------------------------------:

      (a) prior to or on [January __, 2003] the  principal  amount of __________
($________) or, if less, the aggregate  unpaid  principal  amount of Competitive
Bid Loans advanced by the Bank to the Borrower  pursuant to the Revolving Credit
Agreement  dated as of January  __,  2000 (as amended and in effect from time to
time,  the "Credit  Agreement"),  among the  Borrower,  the Bank and other banks
party thereto, and BankBoston, N.A., as Agent for the banks;

      (b)   the  principal  outstanding  hereunder  from  time  to time at the
times provided in the Credit Agreement; and

      (c) interest on the principal balance hereof from time to time outstanding
from the  Closing  Date under the Credit  Agreement  through and  including  the
Maturity Date at the times and at the rate provided in the Credit Agreement.

      This  Competitive Bid Note evidences  borrowings under and has been issued
by the Borrower in accordance with the terms of the Credit  Agreement.  The Bank
and any holder  hereof is entitled to the benefits of the Credit  Agreement  and
the other  Loan  Documents,  and may  enforce  the  agreements  of the  Borrower
contained  therein,  and any holder hereof may exercise the respective  remedies
provided  for  thereby  or  otherwise  available  in  respect  thereof,  all  in
accordance with the respective terms thereof. All capitalized terms used in this
Note and not otherwise  defined herein shall have the same meanings herein as in
the Credit Agreement.

      The Borrower irrevocably  authorizes the Bank to make or cause to be made,
at or about the time of the Drawdown Date of any  Competitive Bid Loan or at the
time of receipt of any payment of principal  of this  Competitive  Bid Note,  an
appropriate  notation on the grid attached  hereto,  or the continuation of such
grid, or any other similar record,  including  computer records,  reflecting the
making of such  Competitive Bid Loan or (as the case may be) the receipt of such
payment.  The  outstanding  amount of the Competitive Bid Loans set forth on the
grid attached to this Competitive Bid Note, or the continuation of such grid, or
any other similar record,  including  computer  records,  maintained by the Bank
with respect to any  Competitive  Bid Loans shall be prima facie evidence of the
principal  amount  thereof  owing and  unpaid to the Bank,  but the  failure  to
record,  or any  error in so  recording,  any  such  amount  on any  such  grid,
continuation or other record shall not limit or otherwise  affect the obligation
of the Borrower

<PAGE>

      hereunder or under the Credit  Agreement to make  payments of principal of
and interest on this Competitive Bid Note when due.

      The Borrower  has the right in certain  circumstances  and the  obligation
under certain other  circumstances  to prepay the whole or part of the principal
of this Competitive Bid Note on the terms and conditions specified in the Credit
Agreement.

      If any one or more of the Events of Default shall occur, the entire unpaid
principal  amount of this  Competitive  Bid Note and all of the unpaid  interest
accrued thereon may become or be declared due and payable in the manner and with
the effect provided in the Credit Agreement.

      No delay or  omission  on the part of the  Bank or any  holder  hereof  in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one  occasion be deemed a bar or waiver of the same or any other right on
any further occasion.

      The Borrower and every endorser and guarantor of this Competitive Bid Note
or the obligation represented hereby waives presentment, demand, notice, protest
and all other demands and notices in connection  with the delivery,  acceptance,
performance, default or enforcement of this Competitive Bid Note, and assents to
any extension or postponement of the time of payment or any other indulgence, to
any  substitution,  exchange  or release of  collateral  and to the  addition or
release of any other party or person primarily or secondarily liable.

      THIS  COMPETITIVE BID NOTE AND THE  OBLIGATIONS OF THE BORROWER  HEREUNDER
SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAW
OF THE COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS
OR CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
COMPETITIVE  BID  NOTE MAY BE  BROUGHT  IN THE  COURTS  OF THE  COMMONWEALTH  OF
MASSACHUSETTS  OR ANY  FEDERAL  COURT  SITTING  THEREIN  AND THE  CONSENT TO THE
NONEXCLUSIVE  JURISDICTION  OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON THE  BORROWER BY MAIL AT THE ADDRESS  SPECIFIED IN ss.19 OF
THE CREDIT  AGREEMENT.  THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW
OR  HEREAFTER  HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT IS BROUGHT IN AN INCONVENIENT COURT.

      This  Competitive  Bid Note  shall be  deemed  to take  effect as a sealed
instrument under the laws of the Commonwealth of Massachusetts.

      IN WITNESS  WHEREOF,  the undersigned has caused this Competitive Bid Note
to be  signed  in its  corporate  name and its  corporate  seal to be  impressed
thereon  by its  duly  authorized  officer  as of the day and year  first  above
written.

<PAGE>

      [Corporate Seal]


                                    THE STRIDE RITE CORPORATION




                                    By: _______________________________
                                         Title:


<PAGE>

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                               Amount of      Balance of
                 Amount      Principal Paid    Principal     Notation
    Date        of Loan        or Prepaid       Unpaid       Made By:
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<PAGE>

                                                                   EXHIBIT D-2

                          Competitive Bid Quote Request

                                     [Date]

To:         BankBoston, N.A., as Agent (the "Agent")

From:       The Stride Rite Corporation (the "Borrower")

Re:         Revolving Credit Agreement (as the same may be amended and in effect
            from time to time, the "Credit Agreement"),  dated as of January __,
            2000, among the Borrower,  the lending institutions which are or may
            become parties thereto (the "Banks") and the Agent.

      We hereby give notice  pursuant to Section 9.1(c) of the Credit  Agreement
that we request  Competitive Bid Quotes for the following  proposed  Competitive
Bid Loan(s):

Requested Drawdown Date:

Principal Amount*             Interest Period**             Maturity Date***

$

      Such Competitive Bid Quotes should offer a Competitive Bid Rate.

      Capitalized terms which are used herein without  definition shall have the
same meanings herein as in the Credit Agreement.

                                    The Stride Rite Corporation

                                    By:_____________________________
                                     Title:

---------------------
*     Amount  must be  $5,000,000  minimum,  or a greater  integral  multiple of
      $1,000,000, and may not exceed the $30,000,000.

**    From 10 through 90 days,  but not to extend  beyond the  Maturity  Date; a
      maximum of three Interest  Periods may be selected in one  Competitive Bid
      Quote Request

***   Last day of Interest Period

<PAGE>

                                                                   EXHIBIT D-3

                      Invitation for Competitive Bid Quotes

To:         [Name of Bank]

      Pursuant to Section 2.9.1(d) of the Revolving Credit  Agreement,  dated as
of January __, 2000 (as the same is amended and in effect from time to time, the
"Credit  Agreement"),  among The Stride Rite Corporation (the  "Borrower"),  the
lending institutions which are or may become parties thereto (the "Banks"),  and
BankBoston,  N.A., as Agent,  we are pleased on behalf of the Borrower to invite
you to submit  Competitive Bid Quotes to the Borrower for the following proposed
Competitive Bid Loan(s):

Requested Drawdown Date:

Principal Amount              Interest Period(s)*         Maturity Date**

$

      Such Competitive Bid Quotes should offer a Competitive Bid Rate.

      Capitalized  terms which are used herein without  definition and which are
defined in the Credit  Agreement  shall have the same meanings  herein as in the
Credit Agreement.

      Please  respond to this  invitation  by no later  than 10:00 a.m.  (Boston
time) on the requested Drawdown Date to the attention of [ ] at facsimile number
[ ].

                                    BANKBOSTON, N.A., as Agent


                                    By:___________________________________
                                     Title:

--------------------

*     Up to three Interest Periods may be specified.
**    Last day of Interest Period

<PAGE>

                                                                   EXHIBIT D-4

                              Competitive Bid Quote

BankBoston, N.A., as Agent
100 Federal Street
Boston, Massachusetts 02110
Attention:

      Re:   Competitive  Bid  Quote  to  The  Stride  Rite  Corporation  (the
"Borrower")

      In       response to your  invitation on behalf of the Borrower dated , 19
               , we hereby make the following Competitive Bid Quote on

the following terms:

1.    Quoting Bank:________________________________________________________
2.    Person to contact at quoting Bank:___________________________________
3.    Drawdown Date:_______________________________________________________*
4.    We  hereby  offer  to make  Competitive  Bid  Loan(s)  in the  following
      principal  amounts,  for  the  following  Interest  Periods  and  at the
      following rates:

      We understand and agree that the offer(s) set forth above,  subject to the
satisfaction  of the  applicable  conditions  set forth in the Revolving  Credit
Agreement,  dated as of  January  __,  2000 (as the same may be  amended  and in
effect  from time to time,  the "Credit  Agreement"),  among the  Borrower,  the
lending  institutions  which are or may become parties thereto,  and BankBoston,
N.A., as Agent, irrevocably obligates us to make the Competitive Bid Loan(s) for
which any offer(s) are accepted in whole or in part by the Borrower.

      Principal                     Interest                Competitive Bid
      Amount**                      Period(s)***            Rate(s)****

      $
      $

5.    Aggregate Principal Amount:   $

      Capitalized  terms which are used herein without  definition and which are
defined in the Credit  Agreement  shall have the same meanings  herein as in the
Credit Agreement.

                                          Very truly yours,
                                          [NAME OF BANK]


Dated:_________________________           By:________________________
                                             Title:
--------------------


<PAGE>

*     As specified in the related Invitation for Competitive Bid Quotes.
**    Principal  amount  bid for  each  Interest  Period  may not  exceed  the
      aggregate  principal amount of Competitive Bid Loans for which offers were
      requested  and may not  exceed  the  $30,000,000.  Bids  must be made  for
      $5,000,000 or any larger multiple of $1,000,000.

***   From 10  through 90 days,  as  specified  in the  related  Invitation  for
      Competitive Bid Quotes.

****  Specify rate of interest per annum (each rounded to the nearest  1/1,000th
      of 1%) for each applicable Interest Period.

<PAGE>

                                                                   EXHIBIT D-5


                       Notice of Competitive Bid Borrowing

BankBoston, N.A., as Agent
100 Federal Street
Boston, Massachusetts 02110

Attention:  _________________________

      Re:  Revolving  Credit Agreement (as the same may be amended and in effect
from time to time the "Credit  Agreement"),  dated as of January __, 2000, among
The Stride Rite Corporation (the "Borrower"), the lending institutions which are
or may become parties thereto (the "Banks"), and BankBoston, N.A., as Agent.

      We hereby give notice pursuant to Section 2.9.1(g) of the Credit Agreement
of our acceptance of the following Competitive Bid Quote(s):

1.    Bank:

2.    Drawdown Date:                            *

3.    In the following principal amounts, for the following Interest Periods
      and at the following rates:

      Principal               Interest                Competitive Bid
      Amount**                Period(s)               Rate(s)***

      $
      $
[Repeat for each Bank as necessary]


4.    The aggregate principal amount for each Interest Period is:

            Interest                                  Aggregate
             Period                                   Principal Amount

                                                      $
                                                      $

--------------------

*     As specified in the related Invitation for Competitive Bid Quotes.
**    Aggregate  principal  amount of each Competitive Bid Loan may not exceed
      applicable amount set forth in related Competitive Bid Quote Request,  and
      must be $5,000,000 or a larger multiple of $1,000,000.

***   Specify rate of interest per annum (each rounded to the nearest  1/1,000th
      of 1%) for each applicable Interest Period.

<PAGE>

      We hereby certify that:

      (a) We will use the  proceeds  of the  requested  Competitive  Bid Loan in
accordance with the provisions of the Credit Agreement.

      (b) Each of the  representations  and  warranties  contained in the Credit
Agreement  or  in  any  document  or  instrument  delivered  pursuant  to  or in
connection with the Credit  Agreement was true as of the date as of which it was
made and is true at and as of the date  hereof  (except to the extent of changes
resulting from  transactions  contemplated or permitted by the Credit  Agreement
and changes  occurring in the ordinary  course of business that singly or in the
aggregate   are  not   materially   adverse,   and  to  the  extent   that  such
representations and warranties related expressly to an earlier date.

      (c)  No Default or Event of Default has occurred and is continuing.

      Capitalized  terms which are used herein without  definition and which are
defined in the Credit  Agreement  shall have the same meanings  herein as in the
Credit Agreement.

                                          Very truly yours,

                                          THE STRIDE RITE CORPORATION



Dated:____________________________        By:_____________________________
                                             Name:
                                             Title:



<PAGE>

                                                                   EXHIBIT D-6

                         NOTICE OF COMPETITIVE BID LOANS

                                     [date]

To:         Each of the Banks referred to below

From:       BankBoston, N.A., as Agent

      Reference is hereby made to that certain Revolving Credit Agreement, dated
as of January __, 2000, among The Stride Rite Corporation (the "Borrower"),  the
lending institutions which are or may become parties thereto (the "Banks"),  and
BankBoston, N.A., as agent for the Banks (the "Agent") (as amended and in effect
from time to time,  the "Credit  Agreement").  Capitalized  terms which are used
herein without  definition and which are defined in the Credit  Agreement  shall
have the same meanings herein as in the Credit Agreement.

      Under Section 2.9 of the Credit Agreement, the Borrower borrowed $________
in  Competitive  Bid Loans on  _____________,  200__ with an Interest  Period of
_____________________. The Competitive Bid Rate for the period is _______%.

      A range of Competitive Bid Quotes were  submitted.  The bids ranged from
_____% to _____%.

                              BANKBOSTON, N.A.,  as Agent


                              By: ___________________________
                                Title:


<PAGE>

                                                                   EXHIBIT E-1
                             Swing Line Loan Request

                           THE STRIDE RITE CORPORATION

                                     [date]

BankBoston, N.A., as Agent
100 Federal Street

Boston, MA 02110

Attention:  ___________________

Ladies and Gentlemen:

      Reference is hereby made to that certain Revolving Credit Agreement, dated
as of January __,  2000,  (as the same may be amended and in effect from time to
time, the "Credit  Agreement"),  among The Stride Rite Corporation,  BankBoston,
N.A. and certain  other  lending  institutions  which are or may become  parties
thereto from time to time (collectively,  the "Banks"), and BankBoston, N.A., as
agent for the Banks  (the  "Agent").  Capitalized  terms  which are used  herein
without  definition and which are defined in the Credit Agreement shall have the
same meanings herein as in the Credit Agreement.

      Pursuant to Section 2.10.2(b) of the Credit  Agreement,  we hereby request
that a Swing  Line  Loan in the  principal  amount  of  $__________,  be made on
________________  [Drawdown Date]. The Swing Line Loan Maturity Date relating to
such Swing Line Loan shall be ________________.  We understand that this request
is irrevocable  and binding on us and obligates us to accept the requested Swing
Line Loan on such date.

      We hereby certify that:

      (a) The aggregate  outstanding principal amount of the Syndicated Loans on
today's  date,  including  amounts to be  borrowed  today,  is  $_________,  the
aggregate  outstanding  principal  amount of the Swing  Line Loans as of today's
date,  including this borrowing,  is $_________,  the sum of the Maximum Drawing
Amount and all Unpaid  Reimbursement  Obligation on today's date, is $_________,
the aggregate  amount of  Competitive  Bid Loans  outstanding on today's date is
$________; and the sum of the foregoing amounts is

$----------------.

      (b) We  will  use  the  proceeds  of the  requested  Swing  Line  Loan  in
accordance with the provisions of the Credit Agreement.

      (c) Each of the  representations  and  warranties  contained in the Credit
Agreement  or  in  any  document  or  instrument  delivered  pursuant  to  or in
connection with the Credit  Agreement was true as of the date as of which it was
made and is true at and as of the date  hereof  (except to the extent of changes
resulting from  transactions  contemplated or permitted by the Credit  Agreement
and changes occurring in the ordinary course of business that

<PAGE>

singly or in the aggregate are not  materially  adverse,  and to the extent that
such representations and warranties related expressly to an earlier date).

      (d)  No Default or Event of Default has occurred and is continuing.

                                    Very truly yours,

                                    THE STRIDE RITE CORPORATION



                                       By:

                                     Title:

<PAGE>

                                                                   EXHIBIT E-2


                                 SWING LINE NOTE

$10,000,000                                             January __, 2000

      FOR VALUE  RECEIVED,  the  undersigned  The  Stride  Rite  Corporation,  a
Massachusetts corporation (the "Borrower"),  hereby promises to pay to the order
of BankBoston,  N.A., a national banking  association (the "Bank") at the Bank's
head office at 100 Federal Street, Boston, Massachusetts 02110:

      (a) prior to or on [January __, 2003] the principal  amount of TEN MILLION
DOLLARS  ($10,000,000)  or, if less, the aggregate  unpaid  principal  amount of
Swing Line Loans advanced by the Bank to the Borrower  pursuant to the Revolving
Credit  Agreement  dated as of January  __,  2000 (as amended and in effect from
time to time, the "Credit  Agreement"),  among the Borrower,  the Bank and other
banks party thereto, and BankBoston, N.A., as Agent for the banks;

      (b)   the  principal  outstanding  hereunder  from  time  to time at the
times provided in the Credit Agreement; and

      (c) interest on the principal balance hereof from time to time outstanding
from the  Closing  Date under the Credit  Agreement  through and  including  the
Maturity Date at the times and at the rate provided in the Credit Agreement.

      This Swing Line Note evidences borrowings under and has been issued by the
Borrower in accordance with the terms of the Credit Agreement.  The Bank and any
holder hereof is entitled to the benefits of the Credit  Agreement and the other
Loan  Documents,  and may  enforce  the  agreements  of the  Borrower  contained
therein, and any holder hereof may exercise the respective remedies provided for
thereby or otherwise  available in respect  thereof,  all in accordance with the
respective  terms  thereof.  All  capitalized  terms  used in this  Note and not
otherwise  defined  herein shall have the same meanings  herein as in the Credit
Agreement.

      The Borrower irrevocably  authorizes the Bank to make or cause to be made,
at or about the time of the Drawdown  Date of any Swing Line Loan or at the time
of receipt of any payment of principal of this Swing Line Note,  an  appropriate
notation on the grid attached  hereto,  or the continuation of such grid, or any
other similar record, including computer records,  reflecting the making of such
Swing  Line  Loan or (as the  case  may be) the  receipt  of such  payment.  The
outstanding  amount of the Swing  Line Loans set forth on the grid  attached  to
this Swing Line Note,  or the  continuation  of such grid,  or any other similar
record,  including computer records,  maintained by the Bank with respect to any
Swing Line Loans shall be prima facie  evidence of the principal  amount thereof
owing and unpaid to the Bank,  but the  failure  to  record,  or any error in so
recording,  any such amount on any such grid, continuation or other record shall
not limit or otherwise affect the obligation of the Borrower  hereunder or under
the Credit Agreement to make payments of principal of and interest on this Swing
Line Note when due.

<PAGE>

      The Borrower  has the right in certain  circumstances  and the  obligation
under certain other  circumstances  to prepay the whole or part of the principal
of this  Swing  Line Note on the terms and  conditions  specified  in the Credit
Agreement.

      If any one or more of the Events of Default shall occur, the entire unpaid
principal  amount of this Swing Line Note and all of the unpaid interest accrued
thereon  may become or be  declared  due and  payable in the manner and with the
effect provided in the Credit Agreement.

      No delay or  omission  on the part of the  Bank or any  holder  hereof  in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one  occasion be deemed a bar or waiver of the same or any other right on
any further occasion.

      The Borrower and every  endorser and  guarantor of this Swing Line Note or
the obligation  represented hereby waives presentment,  demand,  notice, protest
and all other demands and notices in connection  with the delivery,  acceptance,
performance,  default or enforcement of this Swing Line Note, and assents to any
extension or postponement of the time of payment or any other indulgence, to any
substitution,  exchange or release of collateral  and to the addition or release
of any other party or person primarily or secondarily liable.

      THIS SWING LINE NOTE AND THE  OBLIGATIONS OF THE BORROWER  HEREUNDER SHALL
FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE LAW OF THE
COMMONWEALTH  OF  MASSACHUSETTS  (EXCLUDING THE LAWS  APPLICABLE TO CONFLICTS OR
CHOICE OF LAW).  THE BORROWER  AGREES THAT ANY SUIT FOR THE  ENFORCEMENT OF THIS
COMPETITIVE  BID  NOTE MAY BE  BROUGHT  IN THE  COURTS  OF THE  COMMONWEALTH  OF
MASSACHUSETTS  OR ANY  FEDERAL  COURT  SITTING  THEREIN  AND THE  CONSENT TO THE
NONEXCLUSIVE  JURISDICTION  OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH
SUIT BEING MADE UPON THE  BORROWER BY MAIL AT THE ADDRESS  SPECIFIED IN ss.19 OF
THE CREDIT  AGREEMENT.  THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW
OR  HEREAFTER  HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH
SUIT IS BROUGHT IN AN INCONVENIENT COURT.

      This Swing Line Note shall be deemed to take effect as a sealed instrument
under the laws of the Commonwealth of Massachusetts.

      IN WITNESS WHEREOF,  the undersigned has caused this Swing Line Note to be
signed in its corporate name and its corporate  seal to be impressed  thereon by
its duly authorized officer as of the day and year first above written.

<PAGE>

      [Corporate Seal]


                                    THE STRIDE RITE CORPORATION




                                    By: _______________________________
                                         Title:


<PAGE>

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<PAGE>

                                                                       EXHIBIT F

                             COMPLIANCE CERTIFICATE

                                     [Date]

To the Banks Party to the
  Credit Agreement Referred to Below

c/o BankBoston, N.A., as Agent
100 Federal Street
Boston, Massachusetts 02110

Attn:  Peter L. Griswold, Managing Director

Ladies and Gentlemen:

     Reference is made to the Revolving  Credit  Agreement,  dated as of January
__, 2000 (as amended and in effect from time to time,  the "Credit  Agreement"),
by and among The Stride Rite Corporation (the "Borrower"), BankBoston, N.A., the
other lenders that may become parties  thereto from time to time  (collectively,
the  "Banks"),  and  BankBoston,  N.A.,  as agent for the Banks  (the  "Agent").
Capitalized  terms used herein  without  definition and which are defined in the
Credit  Agreement shall have the respective  meanings  assigned to such terms in
the Credit Agreement.

     Pursuant to Section 7.4(c) of the Credit Agreement, the principal financial
or  accounting  officer  of the  Borrower  hereby  certifies  to  each of you as
follows: (a) the information  furnished in the calculations  attached hereto was
true  and  correct  as of the  last  day of the  fiscal  [year]  [quarter]  next
preceding the date of this certificate;  (b) as of the date of this certificate,
there  exists no  Default or Event of Default or  condition  which  would,  with
either or both the giving of notice or the lapse of time, result in a Default or
an Event of Default;  and (c) the financial  statements  delivered herewith were
prepared in accordance with generally accepted accounting  principles applied on
a basis  consistent  with  prior  periods  (except,  in the  case  of  quarterly
statements,  for provisions for footnotes and, in all cases, except as disclosed
therein).

     IN WITNESS  WHEREOF,  the undersigned  officer has executed this Compliance
Certificate as of the date first written above.

                                   THE STRIDE RITE CORPORATION


                                   By:_______________________________
                                     Title:

<PAGE>

                         COMPLIANCE CERTIFICATE SCHEDULE

                               Financial Covenants

                     For the quarter ended ________, 200_

For all  purposes  of this  Schedule,  terms are used as  defined  in the Credit
Agreement;  and in the event of any ambiguity or conflict, the provisions of the
Credit Agreement shall prevail.

Section 9.1 - Fixed Charge Coverage Ratio

      (For the period of four consecutive fiscal quarters then ended)

1.  Consolidated Operating Cash Flow

      (a)  Consolidated EBITDA

          (i)      Consolidated earnings (or loss) from
                   operations                                    $_________
                         after expenses and other proper
                   charges:
          (ii)     Add back:
                         Depreciation:           $__________
                         Amortization:           $__________
                         Nonrepetitive

                            noncash charges:     $__________
                         Total:                                  $_________
          (iii)    Minus: extraordinary nonrecurring items       $_________
                                     of income:
          (iv)     Result of (i) plus (ii) minus (iii):          $_________

      (b)   Includable Interest Income

            (i)  Earned income on cash balances:             $__________
            (ii)  $10,000,000 times 30-day LIBOR Rate:       $__________
            (iii)   Result of (i) minus (ii):                $__________

      (c)   Capitalized Expenditures (to the extent not
            deducted in 1(a)):                               $__________

      (d)   Result of (a)(iv) plus (b)(iii) minus (c):       $__________

2.   Rental Expense:                                         $__________

3.   Consolidated EBITDA plus Rental Expense:                $__________


<PAGE>

4.   Consolidated Total Interest Expense:                         $_________

5.  Rental Expense:                                               $_________

6.  Consolidated Total Interest Expense plus Rental Expense:      $_________

7.  Ratio of 3 to 6:                                              ___:___

         Minimum Ratio:                                           1.75:1




<PAGE>

Section 9.2 - Funded Debt to EBITDA Ratio

      (For the period of four consecutive fiscal quarters then ended)

1.  Total Funded Indebtedness

      (i)      Indebtedness relating to the borrowing of
               money or utilization of credit (including
               letters of credit except (x) documentary
               letters of credit and (y) standby letters of     $________
               credit to the extent supporting included
               Indebtedness):

      (ii)     Obligations under Capitalized Leases:            $________

      (iii)    Sum of (i) and (ii):                             $________


2. Consolidated  EBITDA
        (Item 1(a)(iv) above):                                  $________

3.  Ratio of 1 to 2:                                             ____:___
          Maximum Ratio Permitted:                               2.25:1.0


Section 9.3 - Consolidated Tangible Net Worth

1.  Consolidated Net Worth

       (i)      Consolidated Total Assets:                      $________

       (ii)     Consolidated Total Liabilities:                 $________

       (iii)    Result of (i) minus (ii):                       $________

2.  Total book value of intangible assets:                      $________

3.  Write-up in book value of any assets resulting from
   revaluation after Balance Sheet Date:                        $________

4.  Consolidated Tangible Net Worth

   (1 minus 2 and 3):                                           $________

5.  Initial Amount:                                            $200,000,000

6.  50% of cumulative positive Consolidated Net Income,
   beginning with fiscal quarter ending December 3, 1999        $________
   (with no deduction for losses):

7.  Aggregate Permitted Distributions since Closing Date:       $________


<PAGE>

8.  Required Consolidated Tangible Net Worth

   (5 plus 6 minus 7):                                           $________

9.  Excess (Deficit) TNW
   (4 minus 8):                                                  $__________



<PAGE>

                                                                       EXHIBIT G

                            ASSIGNMENT AND ACCEPTANCE

                         Dated as of ____________, 2000

      Reference is made to the Revolving  Credit Agreement , dated as of January
__, 2000 (as from time to time amended and in effect,  the "Credit  Agreement"),
by and among The Stride  Rite  Corporation,  a  Massachusetts  corporation  (the
"Borrower"),   the   banking   institutions   referred   to   therein  as  Banks
(collectively,   the  "Banks"),   and  BankBoston,   N.A.,  a  national  banking
association, as agent (in such capacity, the "Agent") for the Banks. Capitalized
terms used herein and not otherwise  defined shall have the meanings assigned to
such terms in the Credit Agreement.

      ______________________________        (the        "Assignor")        and
______________________________ (the "Assignee") hereby agree as follows:

      1. Assignment.  Subject to the terms and conditions of this Assignment and
Acceptance,  the  Assignor  hereby  sells and assigns to the  Assignee,  and the
Assignee  hereby  purchases  and assumes  without  recourse to the  Assignor,  a
$__________ interest in and to the rights, benefits, indemnities and obligations
of the Assignor  under the Credit  Agreement  equal to _______.00% in respect of
the Total  Commitment  immediately  prior to the Effective Date (as  hereinafter
defined).

      2.  Assignor's  Representations.  The Assignor (i) represents and warrants
that (A) it is legally  authorized to enter into this Assignment and Acceptance,
(B) as of the  date  hereof,  its  Commitment  is  $__________,  its  Commitment
Percentage is __________.00%, the aggregate outstanding principal balance of its
Syndicated  Loans  equals  $__________,  the  aggregate  amount of its Letter of
Credit  Participations  equals  $__________ (in each case after giving effect to
the assignment contemplated hereby but without giving effect to any contemplated
assignments  which have not yet become  effective),  and (C)  immediately  after
giving  effect to all  assignments  which  have not yet  become  effective,  the
Assignor's  Commitment  Percentage  will be  sufficient  to give  effect to this
Assignment and Acceptance,  (ii) makes no representation or warranty, express or
implied,   and  assumes  no  responsibility  with  respect  to  any  statements,
warranties or representations made in or in connection with the Credit Agreement
or any of the  other  Loan  Documents  or  the  execution,  legality,  validity,
enforceability,  genuineness,  sufficiency or value of the Credit Agreement, the
other Loan  Documents or any other  instrument  or document  furnished  pursuant
thereto or the  attachment,  perfection or priority of any security  interest or
mortgage,  other than that it is the legal and beneficial  owner of the interest
being assigned by it hereunder free and clear of any claim or encumbrance; (iii)
makes no representation  or warranty and assumes no responsibility  with respect
to the  financial  condition of the Borrower or any of its  Subsidiaries  or any
other  Person  primarily  or  secondarily  liable  in  respect  of  any  of  the
Obligations,  or the  performance  or  observance  by the Borrower or any of its
Subsidiaries or any other Person  primarily or secondarily  liable in respect of
any of the Obligations of any of its obligations  under the Credit  Agreement or
any of the other Loan Documents or any other instrument or document delivered or
executed pursuant

<PAGE>

      thereto;  and (iv)  attaches  hereto  the  Revolving  Credit  Note and the
Competitive Bid Note delivered to it under the Credit Agreement.

      The Assignor requests that the Borrower exchange the Assignor's  Revolving
Credit  Note  and  the  Competitive  Bid  Note  for  new  Revolving  Credit  and
Competitive Bid Notes payable to the Assignor and the Assignee as follows:

       Notes Payable to     Amount of Revolving          Amount of
        the Order of:           Credit Note         Competitive Bid Note

      Assignor              $____________               $____________
      Assignee              $____________               $____________


      3.  Assignee's  Representations.  The Assignee (i) represents and warrants
that (A) it is duly and legally  authorized  to enter into this  Assignment  and
Acceptance,  (B) the execution,  delivery and performance of this Assignment and
Acceptance  do not  conflict  with any  provision  of law or of the  charter  or
by-laws of the Assignee,  or of any agreement  binding on the Assignee,  (C) all
acts,  conditions  and  things  required  to be done and  performed  and to have
occurred prior to the execution, delivery and performance of this Assignment and
Acceptance,  and to render the same the legal,  valid and binding  obligation of
the Assignee,  enforceable  against it in accordance  with its terms,  have been
done and  performed  and have  occurred  in due and strict  compliance  with all
applicable  laws;  (ii)  confirms  that it has  received  a copy  of the  Credit
Agreement,  together  with  copies  of  the  most  recent  financial  statements
delivered  pursuant  to  Section  7.4  thereof  and  such  other  documents  and
information  as it has deemed  appropriate  to make its own credit  analysis and
decision to enter into this  Assignment  and  Acceptance;  (iii)  agrees that it
will,  independently  and without  reliance upon the Assignor,  the Agent or any
other  Bank and  based  on such  documents  and  information  as it  shall  deem
appropriate at the time,  continue to make its own credit decisions in taking or
not taking action under the Credit Agreement;  (iv) represents and warrants that
it is an Eligible  Assignee;  (v) appoints and authorizes the Agent to take such
action as agent on its  behalf  and to  exercise  such  powers  under the Credit
Agreement  and the other Loan  Documents  as are  delegated  to the Agent by the
terms thereof,  together with such powers as are reasonably  incidental thereto;
(vi)  agrees  that it will  perform  in  accordance  with  their  terms  all the
obligations  which by the  terms of the  Credit  Agreement  are  required  to be
performed by it as a Bank; and (vii)  acknowledges that it has made arrangements
with the  Assignor  satisfactory  to the  Assignee  with respect to its pro rata
share of Letter of Credit Fees in respect of outstanding Letters of Credit.

      4. Effective  Date. The effective date for this  Assignment and Acceptance
shall be _______________,  2000 (the "Effective Date").  Following the execution
of this Assignment and Acceptance [and the consent of the Borrower hereto having
been  obtained],  each party hereto shall deliver its duly executed  counterpart
hereof to the Agent for acceptance by the Agent and recording in the Register by
the Agent. Schedule 1 to the Credit Agreement

<PAGE>

      shall  thereupon be replaced as of the Effective  Date by the Schedule 1
annexed hereto.

      5. Rights Under Credit Agreement. Upon such acceptance and recording, from
and after the Effective  Date,  (i) the Assignee  shall be a party to the Credit
Agreement and, to the extent provided in this  Assignment and  Acceptance,  have
the rights and  obligations of a Bank  thereunder,  and (ii) the Assignor shall,
with respect to that portion of its interest under the Credit Agreement assigned
hereunder,  relinquish its rights and be released from its obligations under the
Credit Agreement;  provided,  however, that the Assignor shall retain its rights
to be indemnified pursuant to Section 15 of the Credit Agreement with respect to
any claims or actions arising prior to the Effective Date.

      6. Payments. Upon such acceptance of this Assignment and Acceptance by the
Agent and such  recording,  from and after the Effective  Date,  the Agent shall
make all  payments  in  respect  of the rights  and  interests  assigned  hereby
(including  payments  of  principal,  interest,  fees and other  amounts) to the
Assignee.  The Assignor and the Assignee shall make any appropriate  adjustments
in payments for periods prior to the Effective Date by the Agent or with respect
to the making of this assignment directly between themselves.

      7.  Governing  Law.  THIS  ASSIGNMENT  AND  ACCEPTANCE IS INTENDED TO TAKE
EFFECT AS A SEALED  INSTRUMENT  TO BE GOVERNED BY, AND  CONSTRUED IN  ACCORDANCE
WITH,  THE LAWS OF THE  COMMONWEALTH  OF  MASSACHUSETTS  (WITHOUT  REFERENCE  TO
CONFLICT OF LAWS).

      8.  Counterparts.    This  Assignment  and Acceptance may be executed in
any number of  counterparts  which shall  together  constitute but one and the
same agreement.

      IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this  Assignment  and  Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.

                                            [NAME OF ASSIGNOR]


                                            By:
                                                Title


                                            [NAME OF ASSIGNEE]


                                            By:
                                                Title



<PAGE>

CONSENTED TO:

BANKBOSTON, N.A., as Agent


By:
      Title:


THE STRIDE RITE CORPORATION


By:
      Title:


<PAGE>

                                                                       EXHIBIT H

                             INSTRUMENT OF ADHERENCE

                         Dated as of ____________, 2000

      Reference is made to the Revolving  Credit Agreement , dated as of January
__, 2000 (as from time to time amended and in effect,  the "Credit  Agreement"),
by and among The Stride  Rite  Corporation,  a  Massachusetts  corporation  (the
"Borrower"),   the   banking   institutions   referred   to   therein  as  Banks
(collectively,   the  "Banks"),   and  BankBoston,   N.A.,  a  national  banking
association, as agent (in such capacity, the "Agent") for the Banks. Capitalized
terms used herein and not otherwise  defined shall have the meanings assigned to
such terms in the Credit Agreement.

      _____________________________________,   a  ________________________  (the
"Additional  Bank"),  hereby  agrees  to  become  a Bank  party  to  the  Credit
Agreement, subject to and in accordance with the following provisions:

      1.  Commitment to Lend.

      (a) Subject to the terms and  conditions  set forth in this  Instrument of
Adherence and the Credit Agreement, the Additional Bank hereby agrees to lend to
the Borrower and the Borrower may borrow,  repay, and reborrow from time to time
from the  Effective  Date hereof up to but not  including the Maturity Date upon
notice by the Borrower to the Agent given in accordance  with Section 2.7 of the
Credit Agreement, such Syndicated Loans as are requested by the Borrower up to a
maximum  aggregate  amount  outstanding  (after  giving  effect  to all  amounts
requested) at any one time equal to the Additional  Bank's  Commitment minus the
Additional Bank's Commitment Percentage of the sum of the Maximum Drawing Amount
and  all  Unpaid  Reimbursement  Obligations,  provided,  that  the  sum  of the
outstanding  amount of the Loans under the Credit Agreement (after giving effect
to all  amounts  requested)  plus the  Maximum  Drawing  Amount  and all  Unpaid
Reimbursement Obligations shall not at any time exceed the Total Commitment.

      (b) The Additional Bank's Commitment  Amount, as of the Effective Date, is
$______________,  and Commitment  Percentage is ______________% of the aggregate
Commitments of all of the Banks.

      2.  Additional  Bank's  Representations.    The  Additional  Bank hereby
represents  and warrants to, and agrees with,  the other parties to the Credit
Agreement as follows:

      (a) The  Additional  Bank has  received  a copy of the  Credit  Agreement,
together  with copies of the most  recent  financial  statements  referred to in
Section 6.4 and Section 7.4 and such other  documents and  information as it has
deemed  appropriate  to make its own credit  analysis and decision to enter into
this Instrument of Adherence.

      (b) The Additional Bank will,  independently and without reliance upon the
Agent or any other Bank and based on such documents and information as it

<PAGE>

      shall  deem  appropriate  at the  time,  continue  to make its own  credit
decisions in taking or not taking action under the Credit Agreement.

      (c)   The Additional Bank is qualified as an Eligible Assignee.

      (d) The  Additional  Bank appoints and  authorizes  the Agent to take such
action as agent on its  behalf  and to  exercise  such  powers  under the Credit
Agreement  and the other Loan  Documents  as are  delegated  to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto.

      (e) The Additional Bank agrees that it will perform all of the obligations
that by the terms of the Credit  Agreement are required to be performed by it as
a Bank.

      (f)  The  Additional  Bank  is  legally  authorized  to  enter  into  this
Instrument of Adherence.

      3. Effective  Date.  The effective  date for this  Instrument of Adherence
shall be _______________,  200_ (the "Effective Date").  Following the execution
of this  Instrument of Adherence by the  Additional  Bank and the consent of the
Agent and Borrower  hereto having been  obtained,  the Agent shall record in the
Register  the  Additional  Bank's  Commitment,  the Borrower  shall  execute and
deliver to the  Additional  Bank a Revolving  Credit Note and a Competitive  Bid
Note,  each dated as of the  Effective  Date and  completed  appropriately  with
respect to the Additional Bank's Commitment.  Schedule 1 to the Credit Agreement
shall  thereupon be replaced as of the Effective  Date by the Schedule 1 annexed
hereto.

      4. Rights Under Credit Agreement. Upon such acceptance and recording, from
and after the Effective Date, the Additional Bank shall be a party to the Credit
Agreement and, to the extent provided in this Instrument of Adherence,  have the
rights and obligations of a Bank thereunder.

      5. Governing Law. THIS  INSTRUMENT OF ADHERENCE IS INTENDED TO TAKE EFFECT
AS A SEALED  INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE  COMMONWEALTH  OF  MASSACHUSETTS  (WITHOUT  REFERENCE TO CONFLICT OF
LAWS).

      6.  Counterparts.    This Instrument of Adherence may be executed in any
number of  counterparts  which shall together  constitute but one and the same
agreement.

      IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused  this  Instrument  of  Adherence  to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.

<PAGE>

                                          [NAME OF ADDITIONAL BANK]



                                            By:
                                                Title


CONSENTED TO:

BANKBOSTON, N.A., as Agent


By:
      Title:


THE STRIDE RITE CORPORATION


By:
      Title:


<PAGE>


                                        SCHEDULE 6.1


                                SUBSIDIARIES OF THE BORROWER



     The  subsidiaries  of the  Borrower,  all of which are wholly  owned by the
Borrower, are listed below:

                                                     Place of Incorporation

   *    Stride Rite Children's Group, Inc.           Massachusetts
   *    Sperry Top-Sider, Inc.                       Massachusetts
   *    The Keds Corporation                         Massachusetts
   *    Tommy Hilfiger Footwear, Inc.                Massachusetts
   *    SR Holdings Inc.                             Delaware

        Stride Rite International Corp.              Massachusetts
        Stride Rite Sourcing International, Inc.     Massachusetts
        Boston Footwear Group, Inc.                  Massachusetts
        S/R Ecom, Inc.                               Massachusetts
        Stride Rite Investment Corporation           Massachusetts
        Stride Rite Manufacturing of Missouri, Inc.  Missouri
        SRR, Inc.                                    Delaware
        SRL, Inc.                                    Delaware
        SR California Inc.                           California
        Stride Rite Canada Limited                   Canada
        S.R. Footwear Limited                        Bermuda
        Stride Rite de Mexico, S.A. de C.V.          Mexico





*Denotes a Significant Subsidiary


<PAGE>


                                        SCHEDULE 6.3

                                    TITLE TO PROPERTIES







                       This Schedule 6.3 is intentionally left blank.


<PAGE>


                                        SCHEDULE 6.5

                                    NO MATERIAL CHANGES







Distributions since the Balance Sheet Date, December 3, 1999:


o     Dividend payment on common shares                     $2,247,164.42

o     Common stock repurchased                              $3,869,612.83






<PAGE>


                                        SCHEDULE 6.7

                                         LITIGATION

See paragraph on Saco, Maine Landfill in Schedule 6.17.



<PAGE>


                                       SCHEDULE 6.14

                                        TRANSACTIONS

o     Donald R. Gant, a director of the  Borrower,  is a Limited  Partner of The
      Goldman Sachs Group L.P., an  investment  banking firm that,  from time to
      time, provides services to the Borrower.

o     Bruce Van Saun,  a director  of the  Borrower,  is Senior  Executive  Vice
      President  and Chief  Financial  Officer  of Bank of New York,  one of the
      lending institutions in this Revolving Credit Agreement.


<PAGE>


                                       SCHEDULE 6.17

                                  ENVIRONMENTAL COMPLIANCE




Saco, Maine Landfill.  Joseph M. Herman Co., Inc., which was merged into Sperry
Top-Sider, Inc., was a party to an environmental action regarding a landfill in
Saco, Maine.  Sperry has entered into an Administrative Consent Order with the
EPA pursuant to which we will be required to pay $18,000 to settle our liability
as a potentially "responsible party" for contamination found at this site.  The
Consent Order is presently out for public comment via publication in the Federal
Register, and we are awaiting word from the EPA of its effective date.



Harrison Ave., Boston, Massachusetts. Stride Rite Children's Group, Inc. owned a
former  distribution  center  located  on  Harrison  Ave.,  Boston,  MA.  It was
determined  in 1990 that an  underground  storage tank at this facility that was
used for heating oil had leaked some of its contents into the  surrounding  soil
and  groundwater.  134  tons of  oil-contaminated  soil was  excavated  from the
vicinity of the LUST (Leaky  Underground  Storage Tank) and was removed from the
premises  for  off-site  disposal.  By the end of  1991all of the UST's had been
removed from the property. For the last 3-5 years of our ownership,  we operated
oil/water  separators  in the  basement to clean the oil from  groundwater  that
appeared in some of the  basement  sump holes.  Prior to selling the facility we
recorded an Activity and Use Limitation on the affected site (e.g., it cannot be
used as a playground or as farmland for crops intended for human consumption).

Huntington, Indiana.  Stride Rite Children's Group, Inc. owns a distribution
center in Huntington, Indiana, which has two underground fuel oil tanks.  The
tanks were vacuum tested in November 1996 and found to be tight at such time.








<PAGE>


                                       SCHEDULE 6.18

                                JOINT VENTURE OR PARTNERSHIP



o     SR Holdings, Inc. is a 49% venture partner in a joint venture to own and
      operate a footwear manufacturing plant in Thailand known as PSR Footwear
      Co., Ltd.


o     SR  Holdings,  Inc.  is a Limited  Partner in the  investment  partnership
      called Boston Ventures Limited  Partnership II carried on the books of the
      Borrower at approximately $63,000 on the Balance Sheet Date.


<PAGE>


                                        SCHEDULE 8.1

                                        INDEBTEDNESS

Approximately $32,700,000.00 of indebtedness to BankBoston, N.A., for short-term
borrowings which will be refinanced by this Revolving Credit Facility.


<PAGE>


                                        SCHEDULE 8.2

                                           LIENS

                       This Schedule 8.2 is intentionally left blank.


<PAGE>


                                        SCHEDULE 8.3

                                        INVESTMENTS

o     SR  Holdings,  Inc.  is a Limited  Partner in the  investment  partnership
      called Boston Ventures Limited  Partnership II carried on the books of the
      Borrower at approximately $63,000 on the Balance Sheet Date.

o     The Keds Corporation holds Common stock in Weiners Stores Inc. valued at
      approximately $38,000 on the Balance Sheet Date.