CONFORMED COPY


                    SECOND AMENDMENT dated as of June 2,
               1998 (this "Amendment"), among THE READER'S
               DIGEST ASSOCIATION, INC., a Delaware
               corporation (the "Company"), the BORROWING
               SUBSIDIARIES party to the Credit Agreement
               referred to below ("Borrowing Subsidiaries"),
               the undersigned financial institutions party
               to the Credit Agreement (the "Lenders"), THE
               CHASE MANHATTAN BANK, as administrative agent
               for the Lenders (in such capacity, the
               "Administrative Agent") and J.P. Morgan
               Securities Inc., as syndication agent (in
               such capacity, the "Syndication Agent").

          A.  Reference is made to the Credit Agreement
dated as of November 12, 1996, as amended on September 17,
1997 (the "Credit Agreement") among the Company, the
Borrowing Subsidiaries, the Lenders, the Administrative
Agent and the Syndication Agent.  Capitalized terms used but
not otherwise defined herein have the meanings assigned to
them in the Credit Agreement.

          B.  The Company has requested that the Lenders
amend certain provisions of the Credit Agreement.  The
Lenders are willing to do so, subject to the terms and
conditions of this Amendment.

          Accordingly, in consideration of the mutual
agreements herein contained and other good and valuable
consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto hereby agree as
follows:

          SECTION 1.01.  Amendment to Preamble.  The
Preamble to the Credit Agreement is hereby amended by (a)
deleting the reference to "$400,000,000" therein and
replacing it with "$300,000,000" and (b) deleting the
reference to "$40,000,000" therein and replacing it with
"$30,000,000".

          SECTION 1.02.  Amendment to Section 1.01.
Section 1.01 of the Credit Agreement is hereby amended by:
          
          (a) amending the definition of "Eligible Currency"
     by adding the following to the end thereof:

               ",including the Euro after its adoption by
               members of the European Union"; and
          
          (b) inserting in appropriate alphabetical order
     the following definitions (which shall apply as of the
     Effective Date (as defined in Section 3 herein)):

               (i) "'Applicable Rate' means, for any day,
          with respect to any Eurocurrency Standby Loan, or
          with respect to the facility fees payable
          hereunder, as the case may be, the applicable rate
          per annum set forth below under the caption
          "Eurodollar Spread" or "Facility Fee Rate", as the
          case may be, based upon EBITDA, as set forth
          below:

                                             
   Category    Four-quarter    Facility Fee    Eurodollar
               EBITDA ($MM)        Rate          Spread
                                             
      1        Greater than       .200%          .300%
               300
                                             
      2        Less than or       .225%          .400%
               equal to 300
               but greater
               than 200
                                             
      3        Less than or       .250%          .500%
               equal to 200
               but greater
               than 100
                                             
      4        Less than or       .375%          .875%
               equal to 100


          Except as set forth below, EBITDA used on any date
          to determine the Applicable Rate shall be that for
          the period of four fiscal quarters ending at the
          fiscal quarter end next preceding the Financial
          Statement Delivery Date occurring on or most
          recently prior to such date; provided that if any
          Financial Statement Delivery Date shall have
          occurred and the financial statements required to
          have been delivered under Section 5.01(a) or
          Section 5.01(b) by such date have not yet been
          delivered, the Applicable Rate shall, until such
          financial statements shall have been delivered, be
          determined by reference to Category 4."
               
               (ii) "'Consolidated Net Income' shall mean
          the net income of the Borrower and its
          Subsidiaries determined on a consolidated basis in
          accordance with GAAP."
          
               (iii) "'EBITDA' means, for any period, the
          consolidated net income of the Company and its
          consolidated Subsidiaries for such period plus, to
          the extent deducted in computing such consolidated
          net income for such period, the sum (without
          duplication) of (a) income tax expense, (b)
          Interest Expense, (c) depreciation and
          amortization, (d) non-recurring restructuring
          charges, (e) extraordinary losses and (f) the
          cumulative effect of changes in accounting
          principles, minus, to the extent added in
          computing such consolidated net income for such
          period the sum (without duplication) of, (a)
          consolidated interest income, (b) extraordinary
          gains and (c) the cumulative effect of changes in
          accounting principles."

                (iv) "'Financial Statement Delivery Date'
          means the 90th day following the end of each
          fiscal year of the Company, and the 45th day
          following the end of each of the first three
          fiscal quarters in each fiscal year of the
          Company."

                (v) "'Interest Expense' means, for any
          period, the interest expense of the Company and
          its consolidated Subsidiaries for such period
          determined on a consolidated basis in accordance
          with GAAP, including (i) the amortization of debt
          discounts to the extent included in interest
          expense in accordance with GAAP, (ii) the
          amortization of all fees (including fees with
          respect to interest rate protection agreements or
          other interest rate hedging agreements) payable in
          connection with the incurrence of indebtedness to
          the extent included in interest expense in
          accordance with GAAP and (iii) the portion of any
          rents payable under capital leases allocable to
          interest expense in accordance with GAAP."

          SECTION 1.03.  Amendment to Section 2.05(a).
Section 2.05(a) is hereby amended by deleting the reference
to "$40,000,000" therein and replacing it with
"$30,000,000".

          SECTION 1.04.  Amendment to Section 2.07(a).
Section 2.07(a) of the Credit Agreement is hereby amended by
deleting the phrase "at a rate of %.055 per annum on the
amount of the Commitment of such Lender" in the first
sentence thereof and replacing it with "which shall accrue
at the Applicable Rate on the daily amount of the Commitment
of such Lender".

          SECTION 1.05.  Amendment to Section 2.09(a).
Section 2.09(a) of the Credit Agreement is hereby amended by
(a) deleting the phrase ".095% per annum" in each of the
first and third clauses thereof and replacing it with "the
Applicable Rate" and (b) deleting clause (iv) of such
Section and replacing it with "(iv) in the case of each
Swingline Loan, a per annum money market rate quoted by the
Swingline Lender plus the Eurodollar Spread plus the
Facility Fee Rate (as set forth in the definition of
"Applicable Rate") plus 0.50% per annum (computed on the
basis of the actual number of days elapsed over a year of
360 days)."

          SECTION 1.06.  Amendment to Section 4.04(b).
Section 4.04(b) of the Credit Agreement is hereby amended by
deleting the reference to "June 30, 1996" and replacing it
with "March 31, 1998".
     
          SECTION 1.07.  Amendment to Article IV.
Article IV of the Credit Agreement is hereby amended by
adding the following new Section 4.13:

          "SECTION 4.13.  Year 2000 Compliance.  The cost to
     the Company and its Subsidiaries of (a) any
     reprogramming required to permit the proper
     functioning, in and following the year 2000, of (x) the
     Company's and its Subsidiaries' computer systems and
     (y) equipment containing embedded microchips (including
     systems and equipment supplied by others or with which
     the Company's and its Subsidiaries' systems interface),
     (b) the testing of all such systems and equipment, as
     so reprogrammed, and (c) the probable consequences of
     year 2000 systems remediation issues to the Company and
     its Subsidiaries (including, without limitation,
     reprogramming errors and the failure of others' systems
     or equipment) are not reasonably expected to result in
     a Default or a Material Adverse Effect.  Except for
     such of the reprogramming referred to in the preceding
     sentence as may be necessary, the computer and
     management information systems of the Company and its
     Subsidiaries are and, with ordinary course upgrading
     and maintenance, will continue for the term of this
     Agreement to be, sufficient to permit each of the
     Company and its Subsidiaries to conduct its business
     without the occurrence of a Material Adverse Effect."

          SECTION 1.08.  Amendment to Section 6.02.
Section 6.02 of the Credit Agreement is hereby amended by
adding the following after the last sentence thereof:

          "Notwithstanding any of the above, nothing in this
     Section 6.02 shall be deemed to prohibit the Company or
     its Subsidiaries from entering into a sale and
     leaseback transaction with respect to its Canary Wharf
     facilities at 11 Westferry Circus, London, England.
     The Company agrees that any proceeds from such a sale
     and leaseback transaction will be promptly applied to
     prepay any amounts outstanding under this Agreement."

          SECTION 1.09.  Amendment to Section 6.06(e).
Section 6.06(e) of the Credit Agreement is hereby amended to
read in its entirety as follows:

          "(e) in an aggregate principal amount outstanding
          at any time for all Subsidiaries that, when
          aggregated with the amount of debt secured by
          Liens permitted pursuant to Section 6.01(m) and
          the aggregate book value or sale price of the
          assets sold in sale and leaseback transactions
          permitted pursuant to Section 6.02 (but not
          including the sale and leaseback transaction
          described in the last sentence of Section 6.02)
          does not exceed $40,000,000."

          SECTION 1.10.  Amendment to Section 6.07.
Section 6.07 of the Credit Agreement is hereby amended by
deleting such Section in its entirety and by substituting,
as of the Effective Date, the following:

          "Consolidated Tangible Net Worth.  The Company
     will not permit Consolidated Tangible Net Worth at any
     time to be less than the amount set forth below for the
     time period set forth below:

                              
Until and on 06/30/98:        $175,000,000
                              
After 06/30/98 until          $150,000,000
12/31/98:
                              
On and after 12/31/98 until   
3/31/99:                      $175,000,000
                              
On and after 03/31/99 until   
and on 6/30/99:               $175,000,000 plus 25% of
                              cumulative Consolidated Net
                              Income from 01/01/99
                              
After 06/30/99 until          
12/31/99:                     $165,000,000
                              
On and after 12/31/99:        $175,000,000 plus 25% of
                              cumulative Consolidated Net
                              Income from 01/01/99.

          SECTION 1.11.  Amendment to Schedule 2.01.
Schedule 2.01 to the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the new
Schedule 2.01 attached hereto.

          SECTION 2.  Representations, Warranties and
Agreements.  The Company, as to itself and each of its
Subsidiaries, and each Borrowing Subsidiary, as to itself,
hereby represents and warrants to and agrees with each
Lender, the Administrative Agent and the Syndication Agent
that:

          (a)  The representations and warranties set forth
     in Article IV of the Credit Agreement, as amended
     hereby, are true and correct in all material respects
     on and as of the date hereof with the same effect as if
     made on and as of such date, except to the extent such
     representations and warranties expressly relate to an
     earlier date.

          (b)  The execution and delivery of this Amendment
     and the performance by the Company and each Borrowing
     Subsidiary of the Credit Agreement, as amended by this
     Amendment, (i) have been duly authorized by all
     requisite action and (ii) will not (I) violate (x) any
     provision of law, statute, rule or regulation, or of
     the certificate of incorporation, by-laws or other
     constitutive documents of the Company or any of its
     Subsidiaries, (y) any order of any Governmental
     Authority or (z) any provision of any indenture, any
     agreement for borrowed money, or any other material
     agreement or instrument to which the Company or any of
     its Subsidiaries is a party or by which any of them or
     any of their property is or may be bound, (II) be in
     conflict with, result in a breach of or constitute
     (alone or with notice or lapse of time or both) a
     default under any such indenture, agreement for
     borrowed money or other material agreement or
     instrument or (III) result in the creation or
     imposition of any Lien upon or with respect to any
     property or assets now owned or hereafter acquired by
     the Company or any of its Subsidiaries.

          (c)  This Amendment has been duly executed and
     delivered by the Company.  Each of this Amendment and
     the Credit Agreement as amended hereby constitutes a
     legal, valid and binding obligation of the Company and
     each Borrowing Subsidiary, enforceable against the
     Company and each Borrowing Subsidiary in accordance
     with its terms, except as enforceability may be limited
     by (i) any applicable bankruptcy, insolvency,
     reorganization, moratorium or similar laws affecting
     the enforcement of creditors' rights generally and (ii)
     general principles of equity.

          (d)  As of the Effective Date, after giving effect
     to this Amendment, no Event of Default or Default has
     occurred and is continuing.

          SECTION 3.  Conditions to Effectiveness.  This
Amendment shall become effective as of the date first above
written (the "Effective Date") upon satisfaction of the
following conditions:

          (a)  The Administrative Agent shall have received
     duly executed counterparts hereof which, when taken
     together, bear the authorized signatures of the Company
     and the Required Lenders.
          
          (b)  The Administrative Agent shall have received
     such other documents, instruments, certificates and
     opinions as it or its counsel shall have reasonably
     requested.

          (c)  The Administrative Agent shall have received
     payment for all fees and expenses in connection with
     this Amendment, including the reasonable fees, charges
     and disbursements of Cravath, Swaine & Moore, counsel
     for the Administrative Agent.

          SECTION 4.  Credit Agreement.  Except as
specifically stated herein, the Credit Agreement shall
continue in full force and effect in accordance with the
provisions thereof.  As used therein, the terms "Agreement",
"herein", "hereunder", "hereto", "hereof" and words similar
import shall, unless the context otherwise requires, refer
to the Credit Agreement as modified hereby.

          SECTION 5.  Applicable Law.  THIS AMENDMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.

          SECTION 6.  Counterparts.  This Amendment may be
executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an
original but all of which, when taken together, shall
constitute a single instrument.

          SECTION 7.  Expenses.  The Company agrees to
reimburse the Administrative Agent for its out-of-pocket
expenses in connection with this Amendment, including the
reasonable fees, charges and disbursements of Cravath,
Swaine & Moore, counsel for the Administrative Agent.

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

                                                       
                              THE READER'S DIGEST
                              ASSOCIATION, INC.
                              
                              by
                              
                              /s/ Craig T. Monaghan
                              Name:  Craig T. Monaghan
                              Title: Vice President &
                                     Treasurer
                              
                              
                              THE CHASE MANHATTAN BANK,
                              individually and as
                              Administrative Agent
                              
                              by
                              
                              /s/ Carol A. Ulmer
                              Name:  Carol A. Ulmer
                              Title: Vice President
                              
                              
                              MORGAN GUARANTY TRUST COMPANY
                              OF NEW YORK
                              
                              by
                              
                              /s/ Diana H. Imhof
                              Name:  Diana H. Imhof
                              Title: Vice President
                              
                              
                              BARCLAYS BANK PLC
                              
                              by
                              
                              /s/ Terance Bullock
                              Name:  Terance Bullock
                              Title: Vice President
                              
                              
CITIBANK, N.A.
by
/s/ Theodore J. Beck
Name:  Theodore J. Beck
Title: Attorney-In-Fact


COMMERZBANK AG, New York
and/or Grand Cayman Branches

by

/s/  A. Oliver Welsch-Lehmann
Name:A. Oliver Welsch-Lehmann
Title: Assistant Treasurer

by

/s/ Subash R. Viswanathan
Name:  Subash R. Viswanathan
Title: Vice President


MELLON BANK, N.A.

by

/s/ David McGowan
Name:  David McGowan
Title: Vice President


ISTITUTO BANCARIO SAN PAOLO DI
TORINO

by

/s/ Gerard M. McKenna
Name:  Gerard M. McKenna
Title: Vice President
by

/s/ W. Jones
Name:  W. Jones
Title: Vice President


NATIONAL WESTMINSTER BANK PLC, NEW YORK BRANCH

by

/s/ Anne Marie Torre
Name:  Anne Marie Torre
Title: Vice President


NATIONAL WESTMINSTER BANK PLC, NASSAU BRANCH

by

/s/ Anne Marie Torre
Name:  Anne Marie Torre
Title: Vice President


THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH

by

/s/ John C. Kissinger
Name:  John C. Kissinger
Title: Joint General Manager


SVENSKA HANDELSBANKEN

by

/s/ Geoffrey Walker
Name:  Geoffrey Walker
Title: Senior Vice President

by

/s/ Karl Forsman
Name:  Karl Forsman
Title: Vice President


BANQUE NATIONALE DE PARIS

by

/s/ Nuala Marley
Name:  Nuala Marley
Title: Vice President


BANQUE NATIONALE DE PARIS

by

/s/ Brian M. Foster
Name:  Brian M. Foster         Title: Vice President


UNION BANK OF SWITZERLAND, NEW YORK BRANCH

by

/s/ Jennifer Hanf
Name:  Jennifer Hanf
Title: Assistant Treasurer

by

/s/ Eduardo Salazar
Name:  Eduardo Salazar
Title: Director


ABN AMRO BANK N.V.

by

/s/ Frances O'R. Logan
Name:  Frances O'R. Logan
Title: Group Vice President

by

/s/ David Carrington
Name:  David Carrington
Title: Vice President


THE FUJI BANK, LIMITED, NEW YORK BRANCH

by

/s/ Raymond Ventura
Name:  Raymond Ventura
Title: Vice President & Manager


ING BANK N.V.

by

/s/ M.P. van Achterberg
Name:  M.P. van Achterberg
Title: Company Lawyer

by

/s/ J.R. Kuperus
Name:  J.R. Kuperus
Title: Company Lawyer


CIBC INC.

by

/s/ Cynthia McCahill
Name:  Cynthia McCahill
Title: Executive Director
       CIBC Oppenheimer Corp.,
       as Agent


Guarantor

THE READER'S DIGEST ASSOCIATION, INC.

by

/s/ Craig T. Monaghan
Name:  Craig T. Monaghan
Title: Vice President &
       Treasurer

J. P. MORGAN SECURITIES INC., as Syndication Agent

by

/s/ Jeffrey Hwang
Name:  Jeffrey Hwang
Title: Vice President