EXHIBIT 10.4.7


                       FIRST AMENDMENT TO CREDIT AGREEMENT


         This First Amendment to Credit Agreement (this  "Agreement") is made as
of August 29, 1997 by and between BITSTREAM INC., a Delaware  corporation with a
place of  business  at 215 First  Street,  Cambridge,  Massachusetts  02142 (the
"Borrower")  and  BANKBOSTON,  N.A.,  successor  by merger with  BayBank,  N.A.,
formerly  known as  BayBank,  with an address  at 100  Federal  Street,  Boston,
Massachusetts 02110 (the "Bank").

         WHEREAS, the Bank and the Borrower have entered into a loan arrangement
as of July 14, 1995, evidenced by, among other documents (the "Loan Documents"),
a certain Credit Agreement dated as of July 14, 1995 by and between the Borrower
and the Bank (as may be  amended,  the "Credit  Agreement").  Terms used but not
defined  herein  are  used  with the  meanings  ascribed  to them in the  Credit
Agreement.

         WHEREAS, the Borrower has requested,  and the Bank has agreed, to amend
certain terms of the Loan Documents, as more particularly set forth herein.

         NOW  THEREFORE,  for  good and  valuable  consideration,  the  receipt,
adequacy and  sufficiency  of which is hereby  acknowledged,  the parties hereto
agree, effective as of the date hereof, as follows:

                  1. The  Credit  Agreement  shall be amended  by  deleting  the
         definition of  "Borrowing  Base" in Section 1.1 on Page 2 and inserting
         in lieu thereof the following text:

                           ""Borrowing  Base"  shall  mean at any time an amount
                  equal to (as shown on the Bank's  records at any time)  eighty
                  percent (80%) of all Eligible Accounts."

                  2. The Credit  Agreement  shall be amended by  deleting in its
         entirety the definition of "Eligible  International Account" in Section
         1.1 on Page 4.

                  3. The  Credit  Agreement  shall be amended  by  deleting  the
         definition  of  "Maximum  Credit  Amount" in Section  1.1 on Page 7 and
         inserting in lieu thereof the following text:

                           ""Maximum  Credit  Amount" shall mean Two Million and
                  00/100 Dollars ($2,000,000.00)."

                  4. The Credit  Agreement  shall be amended by  deleting in its
         entirety  the  definition  of "Prime Rate" in Section 1.1 on Page 8 and
         inserting in lieu thereof in Section 1.1 on Page 2 after the definition
         of "Banking Day" the following text:

                           ""Base  Rate" shall mean the higher of (a) the annual
                  rate of  interest  announced  from time to time by the Bank at


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                  its head office in Boston, Massachusetts as its "Base Rate" or
                  (b) one half of one percent (1/2%) above the overnight federal
                  funds effective rate as published by the Board of Governors of
                  the Federal  Reserve  System,  as in effect from time to time.
                  All references herein to the Prime Rate are deemed to refer to
                  the Base Rate."

                  5. The  Credit  Agreement  shall be  amended  by  deleting the
         definition of "Revolving  Credit Facility  Termination Date" in Section
         1.1 on Page 9 and inserting in lieu thereof the following text:

                           ""Revolving  Credit Facility  Termination Date" shall
                  mean the  earlier  of (a)  written  demand  of the Bank to the
                  Borrower and (b) July 15, 1998."

                  6. The  Credit  Agreement  shall be  amended  by  deleting  in
         Section 2.2 on Page 11 the following text:

                           "The interest rate for any portion of the outstanding
                  principal  balance  of the  Revolving  Credit  Note  shall  be
                  computed  at a per annum  rate  equal to the lesser of (a) the
                  Prime Rate plus two  percent  (2%) and (b) the Prime Rate plus
                  two percent  (2%) minus the product of 0.25% and the number of
                  Rate Reduction Events that have occurred;  provided,  however,
                  that in no event  shall the  interest  rate be less than Prime
                  plus one percent (1%)."

         and substituting in lieu thereof the following text:

                           "The interest rate for any portion of the outstanding
                  principal  balance  of the  Revolving  Credit  Note  shall  be
                  computed at a per annum rate equal to the Base Rate."

                  7. The Credit  Agreement shall be amended by deleting  Section
         2.9 on Page 14 and inserting in lieu thereof the following text:

                           "2.9  Revolving  Credit  Facility Fee. In addition to
                  the interest  described  above,  the Borrower shall pay to the
                  Bank a  non-refundable  facility  fee,  payable  on  the  date
                  hereof,  of  $7,500.00,  representing  0.375%  of the  Maximum
                  Credit Amount at the closing of this Agreement."

                  8. The Credit  Agreement  shall be amended by  deleting in its
         entirety  Section  9.1 on Page 30 and  inserting  in lieu  thereof  the
         following text:

                           "9.1  Profitability.  The Borrower shall not incur an
                  operating loss of greater than: (i)  $1,000,000.00  for fiscal
                  year 1997, exclusive of acquisition and non-recurring  charges
                  incurred   during  the  second   quarter  of  1997,  and  (ii)
                  $500,000.00 for the first two quarters of fiscal 1998."

  
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                  9. The Credit  Agreement  shall be amended by  deleting in its
         entirety  Section 9.2 on Page 30-31 and  inserting  in lieu thereof the
         following text:

                           "9.2  Ratio  of Total  Liabilities  to  Tangible  Net
                  Worth.  The  Borrower  shall not permit the ratio of its Total
                  Liabilities  to Tangible Net Worth as at the end of each month
                  to exceed the ratio of 0.75:1."

                  10. The Credit  Agreement  shall be amended by deleting in its
         entirety  Section  9.3 on Page 31 and  inserting  in lieu  thereof  the
         following text:

                           "9.3 Quick Ratio.  The Borrower shall maintain at the
                  end of each quarter a Quick Ratio of no less than 2.00:1."

                  11. The Credit  Agreement  shall be amended by deleting in its
         entirety Section 9.6 on Page 31.

                  12. The Credit  Agreement  shall be amended by deleting in its
         entirety  Section  10.8 on Page 34 and  inserting  in lieu  thereof the
         following text:

                           "10.8  Maintenance  of Accounts.  The Borrower  shall
                  maintain  the  Bank  as  its   depository  for  its  principal
                  depository  account,  which  account  shall  contain a minimum
                  balance at all times of $4,000,000.00."

                  13. The Credit  Agreement  shall be  amended by  deleting  the
         notice  provision  in  Section  15.2 on Page 42 as it  pertains  to the
         addresses of the parties and  inserting  in lieu thereof the  following
         text:

                  "If to the Borrower:         Bitstream Inc.
                                                          215 First Street
                                               Cambridge, Massachusetts 02142
                                               Attn: Wendy Darland
                                                     Vice President, Finance and
                                                     Administration

                  With a copy to:              Anna M. Chagnon, General Counsel
                                               Bitstream Inc.
                                               215 First Street
                                               Cambridge, Massachusetts 02142

                  If to the Bank:              BankBoston, N.A.
                                               100 Federal Street, 8th Floor
                                               Boston, Massachusetts 02110
                                               Attn: Stephen C. Buzzell
                                                     Vice President

                  With a copy to:              Riemer & Braunstein
                                               Three Center Plaza


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                                               Boston, Massachusetts 02108
                                               Attn: David A. Ephraim, Esquire"

                  14. The  Security  Agreement dated as of July  14, 1995 by and
         between the Borrower and the Bank, as may have been amended,  is hereby
         terminated,  and the Bank hereby releases the security interest secured
         thereunder.

                  15. The Patent and License Security Agreement dated as of July
         14,  1995 by and between the  Borrower  and the Bank,  as may have been
         amended,  is  hereby  terminated,  and the  Bank  hereby  releases  the
         security interest secured thereunder.

                  16. The Trademark and License Security  Agreement  dated as of
         July 14,  1995 by and between the  Borrower  and the Bank,  as may have
         been amended,  is hereby  terminated,  and the Bank hereby releases the
         security interest secured thereunder.

                  17.  The  Bank  hereby  releases  any and all  other  security
         interests  created pursuant to the Loan Documents,  including,  without
         limitation,  any filings made by the Borrower in favor of the Bank with
         the U.S. Copyright Office.

                  18.  Conditions.  The effectiveness of this Agreement shall be
         subject to the  compliance  by the Borrower  with its  representations,
         warranties,  covenants and agreements  contained herein and in the Loan
         Documents  after giving effect to the amendments  thereto  contemplated
         hereby,  and  to  the  prior  satisfaction  of  the  following  further
         conditions:

                           18.1  Corporate  Due  Diligence.  The Borrower  shall
         deliver to the Bank evidence that all  necessary  corporate  actions in
         connection  with the  making  of this  Agreement  and the  transactions
         contemplated hereby and thereby have been taken by the Borrower.

                           18.2 Bank's  Expenses.  The Borrower shall pay all of
         the Bank's reasonable out-of-pocket expenses,  including the attorneys'
         fees and disbursements of the Bank's counsel,  Riemer & Braunstein,  in
         connection with this Agreement,  the transactions  contemplated  hereby
         and the matters referred to herein and the Loan Documents.

                           18.3 General. All instruments and legal and corporate
         proceedings  in connection  with this  Agreement  and the  transactions
         contemplated  hereby shall be satisfactory in form and substance to the
         Bank and its counsel,  and the Bank and its counsel shall have received
         copies of all  documents,  including  records of  corporate  authority,
         which  the  Bank  and its  counsel  may have  requested  in  connection
         therewith.

                  19.  Representations  and  Warranties.   The  Borrower  hereby
         represent and warrants that:

  
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                           19.1  Authority.  The  Borrower  has taken all action
         necessary  to  enter  into  this   Agreement  and  all  agreements  and
         instruments executed by the Borrower in connection herewith.

                           19.2 Incorporation of Representations and Warranties.
         The  representations  and  warranties  set  forth  in each of the  Loan
         Documents,  after giving effect to the within amendments,  are true and
         correct on and as of the date hereof.

                           19.3 No  Default,  Etc.  No breach of any of the Loan
         Documents exists on the date hereof.

                  20.  Covenants and Agreements.  The Borrower hereby  reaffirms
         each of the covenants and  agreements of the Borrower set forth in each
         of the Loan Documents. As hereby amended, the Loan Documents are hereby
         ratified and confirmed in all respects.

                  21.  Miscellaneous.  The invalidity or unenforceability of any
         term  or   provision   hereof   shall  not  affect  the   validity   or
         enforceability of any other term or provision  hereof.  The headings in
         this  Agreement  are for  convenience  of reference  only and shall not
         alter or otherwise affect the meaning hereof.

         This  Agreement  may be  executed in any number of  counterparts  which
together shall  constitute one instrument and shall be governed by and construed
in  accordance  with the laws  (other  than the  conflict  of law  rules) of The
Commonwealth  of  Massachusetts  and shall bind and inure to the  benefit of the
parties hereto and their respective successors and assigns.

         Executed as a sealed  instrument  as of the day and year first  written
above.

WITNESS:                                       BITSTREAM INC.

/s/ Anna M. Chagnon                            By: /s/ John Collins
-------------------                               -----------------
                                               Name: John Collins
                                                    -------------
                                               Title: V.P. Engineering
                                                     -----------------

WITNESS:                                       BANKBOSTON, N.A.

/s/ Cecelia C. Duggan                          By: /s/ Stephen C. Buzzell
---------------------                             -----------------------
                                               Name: Stephen C. Buzzell
                                                    -------------------
                                               Title: Vice President
                                                     ---------------



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