FOURTH AMENDMENT TO LOAN AGREEMENT


     THIS FOURTH  AMENDMENT TO LOAN AGREEMENT (the  "Agreement")  is dated as of
the 3lst day of  January,  2001 and is by and  between  SUMMIT  BANK,  a banking
institution  of the State of New  Jersey  having an office at 250 Moore  Street,
Hackensack,  New Jersey  07601 (the  "Bank");  and KAYE GROUP  INC.,  a Delaware
corporation  having its  principal  executive  offices  located at 122 East 42nd
Street, New York, New York 10168 (the "Borrower").

     WHEREAS,  the  Borrower  and the Bank  have  heretofore  entered  into that
certain Loan Agreement  dated June 24, 1998, as amended by a First  Amendment to
Loan Agreement  dated as of July 31, 1999, a Second  Amendment to Loan Agreement
dated as of November 1, 1999 and a Third Amendment to Loan Agreement dated as of
October 31, 2000 (the "Loan Agreement"); and

     WHEREAS,  the Borrower has  requested  the Bank to make certain  additional
amendments  to the Loan  Agreement,  and the Bank has  agreed  to do so upon the
terms and conditions described herein.

     NOW,  THEREFORE,  in  consideration  of the  premises  and  other  good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties hereto agree as follows:

     1. Defined Terms. Except as otherwise indicated herein, all words and terms
defined in the Loan Agreement shall have the same meanings when used herein.

     2. Amendment to Loan Agreement. The following definition appearing in
Section 1.1 of the Loan Agreement is hereby amended to read in its entirety as
follows:

     "Revolving Loan Termination Date" shall mean April 30,2001.

     3. Substitute Note.  Concurrently  herewith,  the Borrower is executing and
delivering  to the Bank a  substitute  revolving  note in the maximum  principal
amount of $4,500,000 (the  "Substitute  Note") in  substitution  for, but not in
repayment  of, that certain  Substitute  Revolving  Note dated as of October 31,
2000 in the maximum principal amount of $4,500,000 (the "Prior Note") previously
issued by the Borrower to the Bank.  The  execution and delivery by the Borrower
of the Substitute Note pursuant to the provisions  hereof shall not constitute a
refinancing, repayment, accord and satisfaction or novation of the Prior Note or
the indebtedness evidenced thereby.

     4. Representations and Warranties. In order to induce the Bank to enter
into this Agreement and amend the Loan Agreement as provided herein, the
Borrower hereby represents and warrants to the Bank that:

          (a) All of the  representations  and  warranties  of the  Borrower set
forth in Article IV of the Loan Agreement are true,  complete and correct in all
material respects on and as of the date hereof with the same force and effect as
if made on and as of the  date  hereof  and as if set  forth  at  length  herein
(except that  representations and warranties which are expressly stated to be as
of a certain date are true,  complete and correct in all material respects as of
such certain date).


<PAGE>


          (b) No Default or Event of Default presently exists and is continuing
on and as of the date hereof.

          (c) Since the date of the Borrower's most recent financial  statements
delivered to the Bank, no material  adverse change has occurred in the business,
assets,  liabilities,  financial  condition  or  results  of  operations  of the
Borrower, and no event has occurred or failed to occur which is likely to have a
material  adverse  effect  on  the  business,  assets,  liabilities,   financial
condition or results of operations of the Borrower.

          (d) The Borrower has full power and authority to execute,  deliver and
perform any action or step which may be necessary to carry out the terms of this
Agreement  and all other  agreements,  documents  and  instruments  executed and
delivered by the  Borrower to the Bank  concurrently  herewith or in  connection
herewith (collectively,  the "Amendment Documents");  each Amendment Document to
which the  Borrower  is a party  has been duly  executed  and  delivered  by the
Borrower  and is  the  legal,  valid  and  binding  obligation  of the  Borrower
enforceable in accordance with its terms, subject to any applicable  bankruptcy,
insolvency,  general  equity  principles  or other  similar laws  affecting  the
enforcement of creditors' rights generally.

          (e) The execution, delivery and performance of the Amendment Documents
will  not  (i)  violate  any  provision  of any  existing  law,  statute,  rule,
regulation  or  ordinance,  (ii)  conflict  with,  result  in a  breach  of,  or
constitute a default under (A) the  certificate of  incorporation  or by-laws of
the  Borrower,  (B)  any  order,  judgment,   award  or  decree  of  any  court,
governmental authority, bureau or agency, or (C) any mortgage, indenture, lease,
contract or other  agreement or  undertaking to which the Borrower is a party or
by which the Borrower or any of its properties or assets may be bound,  or (iii)
result in the creation or  imposition of any lien or other  encumbrance  upon or
with  respect to any  property or asset now owned or  hereafter  acquired by the
Borrower.

          (f)  No  consent,  license,  permit,  approval  or  authorization  of,
exemption by, notice to, report to, or registration,  filing or declaration with
any person is required in connection with the execution,  delivery,  performance
or validity of the Amendment Documents or the transactions contemplated thereby.

     5. No Defenses.  The Borrower expressly acknowledges and agrees that (a) as
of January 31, 2001, the outstanding  principal amount of (i) the Revolving Loan
is $0,  (ii)  all  Acquisition  Advances  is $0,  and  (iii)  the  Term  Loan is
$2,070,380.75, and (b) such amounts, together with accrued interest thereon, are
owed  to the  Bank  without  defense,  offset  or  counterclaim  of  any  nature
whatsoever.  The Borrower hereby waives and releases all claims against the Bank
with respect to the  Obligations  and the  documents  evidencing or securing the
same.

     6. Bank Costs.  The  Borrower  shall  reimburse  the Bank on demand for all
costs,  including  legal fees and  expenses,  incurred by the Bank in connection
with  this  Agreement,  the  other  Amendment  Documents  and  the  transactions
referenced  herein.  If such  amounts are not paid within ten days of the Bank's
request  therefor,  the  Borrower  hereby  authorizes  the  Bank to  charge  the
Borrower's account for the amount of such fees and expenses.

     7. No Change. Except as expressly set forth herein, all of the terms and
provisions of the Loan Agreement shall continue in full force and effect.

     8. Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts and all such counterparts taken together shall constitute
one and the same instrument.


<PAGE>


     9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.

     IN WITNESS WHEREOF,  the Borrower and the Bank have executed this Agreement
as of the date above written.

                                           SUMMIT BANK


                                           By: /s/ Lisa Cohen
                                               ----------------------------
                                               Lisa Cohen
                                               Vice President

                                           KAYE GROUP INC.


                                           By: /s/ Michael P. Sabanos
                                               ----------------------------
                                               Michael P. Sabanos
                                               Executive Vice President
                                               and Chief Financial Officer


<PAGE>


STATE OF NEW JERSEY  :
                     :ss.
COUNTY OF BERGEN     :


     BE IT  REMEMBERED,  that on this 14th day of February,  2001 before me, the
subscriber,  personally  appeared  LISA COHEN,  who I am  satisfied  is the Vice
President of SUMMIT BANK, the corporation named in and subscribing to the within
instrument and she, being by me duly sworn, acknowledged, deposed and said that,
in her capacity as such officer, she executed the foregoing instrument on behalf
of said corporation for the uses and purposes therein expressed.

                                               /s/ Ruth S. Fiqueroa
                                               ----------------------------
                                                      RUTH S. FIGUEROA
                                                 NOTARY PUBLIC OF NEW JERSEY
STATE OF NEW YORK    :                        My Commission Expires Aug. 5, 2004
                      ss.
COUNTY OF NEW YORK   :




     BE IT REMEMBERED,  that on this 13th day of February,  2OOl, before me, the
subscriber,  personally  appeared MICHAEL P. SABANOS,  who I am satisfied is the
Executive  Vice  President and Chief  Financial  Officer of KAYE GROUP INC., the
corporation named in and subscribing to the foregoing instrument;  and he, being
by me duly sworn, acknowledged, deposed and said that such inslmment was made by
such  corporation,  and that he signed and delivered the same as such officer of
such corporation as its voluntary act and deed for the uses and purposes therein
expressed.

                                           /s/ Halette Hammer
                                    -------------------------------------
                                               HALETTE HAMMER
                                      Notary Public, State of New York
                                              No. 02HA5060485
                                       Qualified in New York County
                                   Commission Expires November 12, 2002

<PAGE>

                           SUBSTITUTING REVOLVING NOTE


$4,500,000                                                As of January 31, 2001


     FOR  VALUE  RECEIVED,   the  undersigned,   KAYE  GROUP  INC.,  a  Delaware
corporation  (the  "Borrower"),  hereby  unconditionally  promises  to pay on or
before April 30, 2001 (the "Revolving Loan Termination  Date"),  to the order of
SUMMIT BANK, a banking  institution of the State of New Jersey (the "Bank"),  at
the office of the Bank located at 250 Moore Street,  Hackensack,  New Jersey, or
at such other  location  as the Bank  shall  designate,  in lawful  money of the
United  States of America and in  immediately  available  funds,  the  principal
amount of the  lesser of (i)  $4,500,000  or (ii) so much  thereof as shall have
been  advanced  (the  "Advances")  by the Bank to the Borrower  pursuant to that
certain Loan Agreement dated June 24, 1998, as amended, between the Borrower and
the Bank (the  "Agreement"). Terms defined in the Agreement  shall have the same
meanings when used herein.

     The Borrower further agrees to pay interest in like money at such office on
the  unpaid  principal  amount  hereof  from time to time at a rate or rates per
annum and at such times as are provided in the Agreement.

     The Borrower  shall pay to the Bank a late charge (the "Late Charge") in an
amount  equal to five  percent  (5%) of any payment  which is more than ten (10)
days in arrears  to cover the extra  expense  involved  in  handling  delinquent
payments,  but in no event  shall any Late  Charge be less than $25 or more than
$2,500. The term "payments" shall be construed to include  principal,  interest,
fees and any other  amount  due under the terms of this Note or any of the other
Loan  Documents.  Acceptance by the Bank of payment of a Late Charge shall in no
way be  construed  to be an election of remedies or waiver by the Bank of any of
its rights at law or under the terms of any of the Loan Documents.

     Subject to the provisions of Section 2.25 of the  Agreement,  this Note may
be  prepaid,  in  whole or in part,  at one time or from  time to time,  without
premium or penalty in accordance with the provisions of the Agreement.

     All payments made hereunder  shall be applied:  first, to any fees or other
charges owing to the Bank hereunder; second, to accrued and unpaid interest; and
third,  to  the  outstanding  principal  balance  hereof.   Notwithstanding  the
foregoing,  upon  the  occurrence  of an Event of  Default,  the Bank may  apply
payments received hereunder in such manner as it shall determine in its sole and
absolute discretion.

     This Note is secured by the  Collateral  described  in the  Agreement,  the
Pledge and Security Agreement and the other Loan Documents, and is guaranteed by
the Guarantors pursuant to the Guaranty Agreement.

     This Note is being  executed  and  delivered by the Borrower to the Bank in
substitution for that certain Substitute  Revolving Note dated as of October 31,
2000 from the Borrower in favor of the Bank in the maximum  principal  amount of
$4,500,000 (the "Prior Note").


<PAGE>


The  execution  and  delivery  of this Note shall not  constitute  a  repayment,
refinancing,  accord  and  satisfaction  or  novation  of the Prior  Note or the
indebtedness evidenced thereby.

     The Bank may declare this Note to be immediately  due and payable if any of
the following events shall have occurred and be continuing:

     (1) Failure by the Borrower to make any payment of principal or interest
under this Note on any date when due; or

     (2) An Event of Default shall have  occurred  under the Agreement or any of
the other Loan Documents.

     Upon the  occurrence of any Event of Default,  the Bank may, in addition to
such other and  further  rights and  remedies  as  provided  by law or under the
Agreement or under any of the other Loan Documents, (i) collect interest on such
overdue amount from the date of such maturity until paid at ante per annum equal
to three (3%)  percent in excess of Base Rate,  (ii) setoff such amount  against
any deposit  account  maintained in the Bank by the Borrower,  and such right of
setoff shall be deemed to have been  exercised  immediately  upon such stated or
accelerated  maturity even though such setoff is not noted on the records of the
Bank until a later time and (iii) hold as security  any property  heretofore  or
hereafter  delivered into the custody,  control or possession of the Bank or any
entity acting as agent for the Bank by any person liable for the payment of this
Note.

     This Note may not be changed  orally,  but only by an agreement in writing,
signed by the party against whom enforcement of any waiver, change, modification
or discharge is sought.

     Should  the  indebtedness  represented  by this Note or any part  hereof be
collected  at law or in equity,  or in  bankruptcy,  receivership,  or any other
court  proceeding,  or should this Note be placed in the hands of attorneys  for
collection  upon  default,  the  Borrower  agrees  to pay,  in  addition  to the
principal  and  interest  due  and  payable  hereon,  all  reasonable  costs  of
collecting or attempting to collect this Note, including  reasonable  attorneys'
fees and expenses.

     This Note  shall be and  remain  in full  force  and  effect  and in no way
impaired  until the  actual  payment  thereof  to the Bank,  its  successors  or
assigns.

     Anything  herein to the contrary  notwithstanding,  the  obligations of the
Borrower  under this Note shall be subject to the  limitation  that  payments of
interest shall not be required to the extent that receipt of any such payment by
the Bank would be contrary to provisions of law  applicable to the Bank limiting
the maximum rate of interest which may be charged or collected by the Bank.

     The Borrower and all  endorsers  and  guarantors  of this Note hereby waive
presentment, demand for payment, protest and notice of dishonor of this Note.

     This Note is binding upon the Borrower and its  successors  and assigns and
shall inure to the benefit of the Bank and its successors and assigns.



                                        2

<PAGE>


     This Note and the rights and  obligations  of the parties  hereto  shall be
subject to and governed by the laws of the State of New Jersey.

     IN WITNESS  WHEREOF,  the undersigned has caused this Substitute  Revolving
Note to be duly executed by its authorized  officer as of the day and year above
written.


                                          KATE GROUP INC.

                                          By: /s/ Michael P. Sabanos
                                              ---------------------------------
                                              Michael P. Sabanos
                                              Executive Vice President
                                              & Chief Financial Officer


                                        3

<PAGE>


STATE OF NEW YORK     :
                       ss.
COUNTY OF NEW YORK    :


     BE IT REMEMBERED,  that on this 13th day of February,  2001, before me, the
subscriber,  personally  appeared MICHAEL P. SABANOS,  who I am satisfied is the
Executive  Vice  President and Chief  Financial  Officer of KAYE GROUP INC., the
corporation  named in and subscribing to the foregoing instrument; and he, being
by me duly sworn,  acknowledged,  deposed and said that such instrument was made
by such  corporation,  and that he signed and delivered the same as such officer
of such  corporation  as its  voluntary  act and deed for the uses and  purposes
therein expressed.

                                             /s/ Halette Hammer
                                    ------------------------------------
                                               HALETTE HAMMER
                                      Notary Public, State of New York
                                               No. 02HA5060485
                                        Qualified in New York County
                                    Commission Expires November 12, 2002






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