Document:

<PAGE>   1
                                                                    Exhibit 10.3

                                                           LOAN NO. 001-5056-001

                                 PROMISSORY NOTE

$3,750,000.00                                                   JANUARY 31, 2000

      FOR VALUE RECEIVED, ROCKY SHOES & BOOTS, INC., an Ohio corporation
("BORROWER"), promises to pay to the order of GENERAL ELECTRIC CAPITAL BUSINESS
ASSET FUNDING CORPORATION ("GE CAPITAL") at GE CAPITAL's office at 10900 N.E.
4th St., Suite 500, Bellevue, Washington 98004, Attention: Real Estate
Department, or at such other address as the holder hereof may from time to time
designate in writing, the principal sum of THREE MILLION SEVEN HUNDRED FIFTY
THOUSAND AND NO/100 DOLLARS ($3,750,000.00) together with interest from the date
the proceeds of the loan (the "Loan") evidenced by this Promissory Note (this
"Note") are initially disbursed until maturity on the principal balance from
time to time remaining unpaid hereon at the rate of 8.275% per annum (computed
on the basis of a 360-day year of twelve (12) consecutive thirty (30)-day
months) in installments as follows: (i) interest only in advance at the rate of
$861.98 per day shall be due and payable on the date the proceeds of the Loan
are initially disbursed to or for the benefit of BORROWER (including, without
limitation, disbursement into an escrow for the benefit of BORROWER) for the
period beginning on the date of such disbursement and ending on January 31,
2000; (ii) one hundred seventy-nine (179) installments of principal and interest
in the amount of $36,434.82 each shall be payable commencing on March 1, 2000,
and continuing on the first day of each and every succeeding month until and
including January 1, 2015, and (iii) on February 1, 2015, all then unpaid
principal and interest hereon shall be due and payable.

      If any payment shall not be paid when due and shall remain unpaid for ten
(10) days, BORROWER shall pay an additional charge equal to five percent (5.00%)
of the delinquent payment or the highest additional charge permitted by law,
whichever is less.

      Upon not less than thirty (30) days advance written notice to GE CAPITAL
at any time after March 1, 2005, and upon payment of the Prepayment Premium,
BORROWER shall have the right to prepay all, but not less than all, of the
outstanding balance of this Note on any regularly scheduled principal and
interest payment date. The Prepayment Premium shall be determined by (i)
calculating the decrease (expressed in basis points) in the current weekly
average yield of ten (10)-year U.S. Treasury Constant Maturities (as published
in Federal Reserve Statistical Release H.15 [519]) (the "Index") from Friday,
June 4, 1999, to the Friday immediately preceding the week in which the
prepayment is made, (ii) dividing the decrease by 100, (iii) multiplying the
result by the following described applicable premium factor (the "Premium
Factor"), and (iv) multiplying the product by the principal balance to be
prepaid. If the Index is unchanged or has increased from Friday, June 4, 1999,
to the Friday immediately preceding the prepayment date, no Prepayment Premium
shall be due. The Premium Factor shall be the amount shown on the following
chart for the month in which prepayment occurs:

<PAGE>   2

                     Number of
                      Months
                     Remaining        (Years)      Premium Factor
                     ----------       -------      --------------

                     180 -  169        (15)            .073
                     168 -  157        (14)            .069
                     157 -  145        (13)            .064
                      144 - 133        (12)            .059
                      132 - 121        (11)            .054
                      120 - 109        (10)            .049
                      108 -  97         (9)            .044
                       96 -  85         (8)            .039
                       84 -  73         (7)            .035
                       72 -  61         (6)            .030
                       60 -  49         (5)            .025
                       48 -  37         (4)            .020
                       36 -  25         (3)            .015
                       24 -  13         (2)            .010
                       12 -   1         (1)            .005

      If the Federal Reserve Board ceases to publish the Index, then the
decrease in the weekly average yield of ten (10)-year U.S. Treasury Constant
Maturities will be determined from another comparable source designated by GE
CAPITAL. Prepayment prior to March 1, 2005 will not be permitted.

      If GE CAPITAL at any time accelerates this Note after an Event of Default
(defined below), then BORROWER shall be obligated to pay the Prepayment Premium
in accordance with the foregoing schedule. The Prepayment Premium shall not be
payable with respect to condemnation awards or insurance proceeds from fire or
other casualty which GE CAPITAL applies to prepayment, nor with respect to
BORROWER's prepayment of the Note in full during the last three (3) months of
the term of this Note unless an Event of Default has occurred. BORROWER
expressly acknowledges that the Prepayment Premium is not a penalty but is
intended solely to compensate GE CAPITAL for the loss of its bargain and the
reimbursement of internal expenses and administrative fees and expenses incurred
by GE CAPITAL.

      The Loan is secured, in part, by a certain Open-End Mortgage, Security
Agreement, Assignment of Leases and Rents and Fixture Filing (the "Mortgage")
covering the real property and other assets (the "Property") described therein,
and by certain other documents executed and delivered in connection herewith
(the "Loan Documents").

      Each of the following shall constitute an Event of Default ("Event of
Default") hereunder and under the Mortgage:

           a. Failure of or refusal by BORROWER to make any payment of
principal, interest, or any Prepayment Premium due under this Note when due, and
such failure or refusal shall continue for a period of ten (10) days after
written notice is given to BORROWER by GE CAPITAL specifying such failure; or

                                       2
<PAGE>   3

           b. Failure of BORROWER within the time required by the Mortgage to
make any payment for taxes, insurance or for reserves for such payments, or any
other payment necessary to prevent the filing of any lien, and such failure
shall continue for a period of ten (10) days after written notice is given to
BORROWER by GE CAPITAL specifying such failure; or

           c. Failure by BORROWER to observe or perform any obligations of
BORROWER to GE CAPITAL on or with respect to any transaction, debt, undertaking
or agreement other than the transaction evidenced by this Note and the
continuation of such failure beyond the expiration of the applicable cure
period, if any, set forth in the documents evidencing or securing such other
transaction, debt, undertaking or agreement; or

           d. Failure of BORROWER to make any payment or perform any obligation
under any superior liens or encumbrances on the Property, within the time
required thereunder, or commencement of any suit or other action to foreclose
any superior liens or encumbrances; or

           e. Failure by BORROWER to observe or perform any of its obligations
under any of the lease agreements covering the Property; or

           f. The Property is transferred or any agreement to transfer any part
or interest in the Property in any manner whatsoever is made or entered into
without the prior written consent of GE CAPITAL; or

           g. Filing by BORROWER of a voluntary petition in bankruptcy or filing
by BORROWER of any petition or answer seeking or acquiescing in any
reorganization, arrangement, composition, readjustment, liquidation, or similar
relief for itself under any present or future federal, state or other statute,
law or regulation relating to bankruptcy, insolvency or other relief for
debtors, or the seeking, consenting to, or acquiescing by BORROWER in the
appointment of any trustee, receiver, custodian, conservator or liquidator for
BORROWER, any part of the Property, or any of the income or rents of the
Property, or the making by BORROWER of any general assignment for the benefit of
creditors, or the inability of or failure by BORROWER to pay its debts generally
as they become due, or the insolvency on a balance sheet basis or business
failure of BORROWER, or the making or suffering of a preference within the
meaning of federal bankruptcy law or the making of a fraudulent transfer under
applicable federal or state law, or concealment by BORROWER of any of its
property in fraud of creditors, or the imposition of a lien upon any of the
property of BORROWER which is not discharged in the manner permitted by the
Mortgage, or the giving of notice by BORROWER to any governmental body of
insolvency or suspension of operations; or

           h. Filing of a petition against BORROWER seeking any reorganization,
arrangement, composition, readjustment, liquidation, or similar relief under any
present or future federal, state or other law or regulation relating to
bankruptcy, insolvency or other relief for debts, or the appointment of any
trustee, receiver, custodian, conservator or liquidator of BORROWER, of any part
of the Property or of any of the income or rents of the Property, unless such
petition shall be dismissed within ninety (90) days after such filing, but in
any event prior to the entry of an order, judgment or decree approving such
petition; or

                                       3
<PAGE>   4

           i. The institution of any proceeding for the dissolution or
termination of BORROWER voluntarily, involuntarily, or by operation of law, or
the death of BORROWER; or

           j. A material adverse change occurs in the assets, liabilities or net
worth of BORROWER or any of the guarantors of the indebtedness evidenced by this
Note from the assets, liabilities or net worth of BORROWER or any of the
guarantors of the indebtedness evidenced by this Note previously disclosed to GE
CAPITAL; or

           k. Any warranty, representation or statement furnished to GE CAPITAL
by or on behalf of BORROWER under this Note, the Mortgage, or any of the Loan
Documents shall prove to have been false or misleading in any material respect;
or

           l. Failure of BORROWER to observe or perform any other covenant or
condition contained in this Note and such failure shall continue for thirty (30)
days after notice is given to BORROWER specifying the nature of the failure. No
notice of default and no opportunity to cure shall be required if during the
prior twelve (12) months GE CAPITAL has already sent a notice to BORROWER
concerning default in performance of the same obligation; or

           m. Failure of BORROWER to observe or perform any other obligation
under the Mortgage or any of the Loan Documents when such observance or
performance is due, and such failure shall continue beyond the applicable cure
period set forth in the Loan Documents, or if the default cannot be cured within
such applicable cure period, if BORROWER fails within such time to commence and
pursue curative action with reasonable diligence or fails at any time after
expiration of such applicable cure period to continue with reasonable diligence
all necessary curative actions. No notice of default and no opportunity to cure
shall be required if during the prior twelve (12) months GE CAPITAL has already
sent a notice to BORROWER concerning default in performance of the same
obligation; or

           n. Any of the foregoing events occur with respect to any tenant of
the Property, with respect to any guarantor of any of BORROWER's obligations in
connection with the indebtedness evidenced by this Note or with respect to any
guarantor of any tenant's obligations relating to the Property, or such
guarantor dies or becomes incompetent; or

           o. The occurrence of any event of default under the documents
evidencing or securing (i) GE CAPITAL Loan No. 001-5056-002 in the original
principal amount of $1,500,000.00, (ii) GE CAPITAL Loan No. 001-5056-003 in the
original principal amount of $1,050,000.00, or (ii) any other amounts owed to GE
CAPITAL by Borrower or any entity related to Borrower or any of the guarantors
of the indebtedness evidenced by this Note.

      Upon the occurrence of any Event of Default, GE CAPITAL shall have the
option to declare the entire amount of principal and interest due under this
Note immediately due and payable without notice or demand, and GE CAPITAL may
exercise any of its rights under this Note, under the Mortgage and under the
Loan Documents. After acceleration or maturity, BORROWER shall pay interest on
the outstanding principal balance of this Note at the rate of five percent
(5.00%) per annum above Chase Manhattan Bank's prime interest rate in effect
from

                                       4
<PAGE>   5

time to time, or fifteen percent (15.00%) per annum, whichever is higher,
provided that such interest rate shall not exceed the maximum interest rate
permitted by law.

      All payments of the principal and interest on this Note shall be made in
coin or currency of the United States of America which at the time shall be the
legal tender for the payment of public and private debts.

      If this Note is placed in the hands of an attorney for collection,
BORROWER agrees to pay reasonable attorneys' fees and costs incurred by GE
CAPITAL in connection therewith, and in the event suit or action is instituted
to enforce or interpret this Note (including without limitation efforts to
modify or vacate any automatic stay or injunction), the prevailing party shall
be entitled to recover all expenses reasonably incurred at, before or after
trial and on appeal, whether or not taxable as costs, or in any bankruptcy
proceeding, or in connection with post-judgment collection efforts, including,
without limitation, attorneys' fees, witness fees (expert and otherwise),
deposition costs, copying charges and other expenses.

      This Note shall be governed and construed in accordance with the laws of
the State of Ohio applicable to contracts made and to be performed therein
(excluding choice-of-law principles).

      This Note is given in a commercial transaction for business purposes.

      This Note may be declared due prior to its expressed maturity date, all in
the events, on the terms, and in the manner provided for in the Mortgage.

      BORROWER and all sureties, endorsers, guarantors and other parties now or
hereafter liable for the payment of this Note, in whole or in part, hereby
severally (i) waive demand, notice of demand, presentment for payment, notice of
nonpayment, notice of default, protest, notice of protest, notice of intent to
accelerate, notice of acceleration and all other notices, and further waive
diligence in collecting this Note or in enforcing any of the security for this
Note; (ii) agree to any substitution, subordination, exchange or release of any
security for this Note or the release of any party primarily or secondarily
liable for the payment of this Note; (iii) agree that GE CAPITAL shall not be
required to first institute suit or exhaust its remedies hereon against BORROWER
or others liable or to become liable for the payment of this Note or to enforce
its rights against any security for the payment of this Note; and (iv) consent
to any extension of time for the payment of this Note, or any installment
hereof, made by agreement by GE CAPITAL with any person now or hereafter liable
for the payment of this Note, even if BORROWER is not a party to such agreement.

      All agreements between BORROWER and GE CAPITAL, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of demand or acceleration of the final maturity
of this Note or otherwise, shall the interest contracted for, charged, received,
paid or agreed to be paid to GE CAPITAL exceed the maximum amount permissible
under the applicable law. If, from any circumstance whatsoever, interest would
otherwise be payable to GE CAPITAL in excess of the maximum amount permissible
under applicable law, the interest payable to GE CAPITAL shall be reduced to the
maximum amount permissible under applicable law; and if from any circumstance GE

                                       5
<PAGE>   6

CAPITAL shall ever receive anything of value deemed interest by applicable law
in excess of the maximum amount permissible under applicable law, an amount
equal to the excessive interest shall be applied to the reduction of the
principal hereof and not to the payment of interest, or if such excessive amount
of interest exceeds the unpaid balance of principal hereof, such excess shall be
refunded to BORROWER. All interest paid or agreed to be paid to GE CAPITAL
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full period (including any renewal or
extension) until payment in full of the principal so that the interest hereon
for such full period shall not exceed the maximum amount permissible under
applicable law. GE CAPITAL expressly disavows any intent to contract for, charge
or receive interest in an amount which exceeds the maximum amount permissible
under applicable law. BORROWER expressly acknowledges and represents that the
Loan is a "business loan" within the meaning of Chapter 1343 of the Ohio Revised
Code.

      BORROWER authorizes any attorney-at-law to appear in any Court of Record
in the State of Ohio or in any other state or territory of the United States
after the above indebtedness becomes due, whether by acceleration or otherwise,
after not less than ten (10) days' written notice to BORROWER to waive the
issuing and service of process, and to confess judgment against BORROWER in
favor of the holder of this Note for the amount then appearing due together with
costs of suit, and thereupon to waive all error and all rights of appeal and
stays of execution.

                            [SIGNATURE PAGE FOLLOWS]

                                       6
<PAGE>   7

   IMPORTANT: READ BEFORE SIGNING. THE TERMS OF THIS AGREEMENT SHOULD BE READ
  CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING ARE ENFORCEABLE. NO OTHER TERMS
     OR ORAL PROMISES NOT CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY
  ENFORCED. YOU MAY CHANGE THE TERMS OF THIS AGREEMENT ONLY BY ANOTHER WRITTEN
                                   AGREEMENT.

           WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO
           NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT
           JUDGMENT WILL BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR
           KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
           FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE
           CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON
           HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.

Signed in the presence of:                  BORROWER:
                                            ---------

                                            ROCKY SHOES & BOOTS, INC.,
/s/ Brenda Hammond                          an Ohio corporation
-----------------------------
Print Name: Brenda Hammond
            --------------
                                            By: /s/ David Fraedrich
                                                ---------------------------
/s/ Susan Harmony                           Print: David Fraedrich
-----------------------------                      ------------------------
Print Name: Susan Harmony                   Its: Exec VP & CFO
            -------------                        --------------------------

                                       7<PAGE>   1
                                                                    Exhibit 10.4

                 LIMITED WAIVER AND LOAN MODIFICATION AGREEMENT

      THIS LIMITED WAIVER AND LOAN MODIFICATION AGREEMENT (the "Waiver
Agreement") is made effective as of May 15, 2000 by and among Rocky Shoes &
Boots, Inc., an Ohio corporation ("Rocky Inc."), Five Star Enterprises Ltd., a
Cayman Islands corporation ("Five Star"), Lifestyle Footwear, Inc., a Delaware
corporation ("Lifestyle") (the foregoing parties being referred to herein
individually as a "Borrower" and collectively as the "Borrowers"), Bank One, NA,
a national banking association ("Bank One"), The Huntington National Bank, a
national banking association ("HNB")(Bank One and HNB shall be referred to
herein individually as a "Bank" and collectively as the "Banks"), and Bank One,
NA, as Agent, acting in the manner and to the extent described in Article IX of
the Agreement referred to herein (in such capacity, the "Agent").

                             BACKGROUND INFORMATION
                             ----------------------

      A. The Borrowers, Bank One, HNB and the Agent entered into a certain
Revolving Credit Loan Agreement, dated as of January 28, 1997, as amended by (i)
a Term Loan Agreement and First Amendment to Revolving Credit Loan Agreement,
dated effective as of April 18, 1997, (ii) a Second Amendment to Revolving
Credit Loan Agreement, dated effective as of May 29, 1998, (iii) a Third
Amendment to Revolving Credit Loan Agreement, dated effective as of April 1,
1999, and (iv) a Fourth Amendment to Revolving Credit Loan Agreement, dated
effective as of July 23, 1999 (such agreement, as so amended, the "Agreement"),
pursuant to which Bank One and HNB agreed to provide revolving credit loans to
the Borrowers, upon and subject to the terms and conditions as set forth in the
Agreement.

      B. Events of Default have occurred under the terms of the Facility
Documents, and the Borrowers have requested that the Banks waive certain
provisions of the Agreement, and the Banks are willing do to so, but only in
accordance with the terms as set forth in this Waiver Agreement.

                                   PROVISIONS
                                   ----------

      NOW, THEREFORE, in consideration of the waiver of the Banks as set forth
herein, the mutual agreements hereunder and under the Facility Documents, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Borrowers, the Banks and the Agent hereby agree as
follows:

      SECTION 1. CAPITALIZED TERMS. Except as provided for herein, the
capitalized terms used herein shall have the same meanings as set forth in the
Agreement.

      SECTION 2. CURRENT AMOUNT OF REVOLVING CREDIT LOANS. The Borrowers
certify, acknowledge, agree and state that (i) as of May 3, 2000, the total
principal amount of Revolving Credit Loans owed to the Banks under the Agreement
and the Notes is $25,925,000 (with $15,555,000 being owed to Bank One and
$10,370,000 being owed to HNB), and that such amounts are payable to the Banks
without any offsets, counterclaim, defense or reductions, and

<PAGE>   2

(ii) the aggregate undrawn amount of outstanding Commercial L/Cs and Standby
L/Cs is $2,657,303.82 (with Bank One's participation therein being $1,594,382.29
and HNB's participation therein being $1,062,921.53).

      SECTION 3.  DEFAULT; WAIVER BY THE BANKS; WAIVER FEE; INCREASE IN INTEREST
RATE; DISCUSSIONS AMONG BANKS AND BORROWERS.

            (a)   The Borrowers acknowledge and agree that the Borrowers are
      currently in default with respect to the following sections of the
      Agreement (such sections being referred to collectively as the "Subject
      Sections"):

                  (i) Section 7.2(l) (i) (relating to the Consolidated Net Worth
            financial covenant);

                  (ii) Section 7.2(l) (ii) (relating to the Consolidated Fixed
            Charge Coverage Ratio financial covenant); and

                  (iii) Section 7.2(l)(iii) (relating to the Consolidated Funded
            Debt to Consolidated EBITDA Ratio financial covenant).

            (b)   Subject to the terms of this Waiver Agreement, the Banks
      hereby waive compliance (the "Waiver") by the Borrowers with the Subject
      Sections for the period (the "Waiver Period") commencing on March 30, 2000
      (the "Effective Date") and continuing through and including June 29, 2000
      (the "Termination Date"). EACH BORROWER ACKNOWLEDGES AND AGREES THAT THE
      BANKS DO NOT INTEND TO EXTEND, AND NEITHER BANK IS MAKING ANY COMMITMENT
      TO EXTEND, THE WAIVER PROVIDED FOR HEREIN BEYOND THE TERMINATION DATE.

            (c)   The Borrowers, jointly and severally, shall pay to the Agent
      for the ratable benefit the Banks a waiver fee in the amount of
      $20,000.00.

            (d)   During the Waiver Period, in determining the interest rate
      applicable to each LIBOR Rate Loan (whether outstanding on the Effective
      Date or originating thereafter), the Applicable Margin shall be 225 basis
      points, rather than the Applicable Margin that would otherwise be in
      effect pursuant to the Agreement.

            (e)   Although the Banks are agreeing to the Waiver as set forth
      herein, the Banks (i) are not waiving, abandoning, discharging, releasing,
      modifying, extending, canceling or relinquishing any right, claims, or
      causes of action, and (ii) are not accepting any security or promise
      granted herein as payment of any right, claims, or causes of action. The
      Waiver by the Banks as set forth herein shall not affect or impair any
      right that the Banks may have against any Borrower or any other party.

            (f)   The Banks and the Borrowers have had discussions with respect
      to the possible modification and adjustment of certain terms of the
      Agreement, including with

                                       2
<PAGE>   3

      respect to the Subject Sections, and it is anticipated that such
      discussions will continue in the near future. HOWEVER, THE BANKS HAVE NOT
      MADE ANY COMMITMENT, AND THIS WAIVER AGREEMENT SHALL NOT BE A CONSIDERED
      TO BE A COMMITMENT BY THE BANKS, TO (i) CONTINUE ANY SUCH DISCUSSIONS OR
      (ii) MODIFY, AMEND OR OTHERWISE CHANGE ANY TERMS OF THE AGREEMENT OR ANY
      OTHER FACILITY DOCUMENTS AND THE CREDIT FACILITIES PROVIDED THEREBY.

      SECTION 4.  ABSENCE OF WAIVER. The Borrowers and the Banks agree that the
agreements set forth in Section 3 hereof shall not be deemed to:

            (a)   except as expressly set forth in Section 3 of this Waiver
      Agreement, modify or limit any other term the Facility Documents;

            (b)   impose upon the Banks any obligation, express or implied, to
      consent to any amendment or modification of the Facility Documents; or

            (c)   prejudice any right or remedy that the Banks may now have or
      may in the future have under the Facility Documents or any instrument or
      agreement referred to therein including, without limitation, any right or
      remedy resulting from any Default or Event of Default not covered by the
      Waiver with respect to the Subject Sections.

      SECTION 5. CONTINUING OBLIGATIONS; MODIFICATIONS; ADDITIONAL OBLIGATIONS;
PROVISION OF ADDITIONAL ITEMS.

            (a)   Except with respect to the Subject Sections, the Borrowers
      shall continue to comply, observe and perform all of their obligations
      under the Agreement and the other Facility Documents.

            (b)   Effective as the date hereof and continuing hereafter:

                  (i) Exhibit D of the Agreement, containing the form of the
            Borrowing Base Certificate, is hereby amended by deleting said
            Exhibit D in its entirety and substituting in place thereof a new
            Exhibit D in the form of Annex A attached hereto, and whenever the
            Borrowers are required to provide a Borrowing Base Certificate to
            the Agent and/or the Banks under the Agreement or this Waiver
            Agreement, the form of such Borrowing Base Certificate shall be in
            the form attached hereto as Annex A, appropriately completed and
            signed by the Borrowers; and

                  (ii) Notwithstanding anything in the Agreement and the other
            Facility Documents to the contrary, the Borrowers hereby consent and
            agree that the Banks and the Agent shall have, and the Banks and the
            Agent hereby reserve, the right and ability to reduce, modify and
            otherwise change in any manner the Borrowing Base, which right may
            be exercised in the Banks' and the Agent's sole and absolute
            discretion and at anytime and from time to time; without limiting
            the

                                       3
<PAGE>   4

            generality of the foregoing, the Banks and the Agent shall have the
            right to (x) reduce the percentage of Eligible Accounts Receivable
            (currently 80%) and Inventory (currently 50%) which may be included
            in calculating the Borrowing Base, (y) which Accounts Receivable
            shall constitute Eligible Accounts Receivable, (z) which Inventory
            may be included in calculating the Borrowing Base.

            (c)   In addition to their current obligations under the Agreement
      and the other Facility Documents, the Borrowers shall:

                  (i) provide to the Agent, not later than 2:00 p.m. on each
            Monday during the Waiver Period, a Borrowing Base Certificate,
            certified by an officer of the Borrowers as true and correct,
            setting forth the amount of Eligible Accounts Receivable and
            Inventory, in each case as of the close of business of the preceding
            Friday; as currently provided in the Agreement, notwithstanding any
            provision in the Facility Documents or herein to the contrary, the
            total amount of outstanding Revolving Credit Loans under the
            Aggregate Commitment, when taken together with the total aggregate
            Dollar amount available to be drawn under outstanding Commercial
            L/Cs and Standby L/Cs, shall at no time exceed the lesser of (i) the
            Aggregate Commitment or (ii) the Borrowing Base as set forth on the
            most recent weekly Borrowing Base Certificate provided to the Agent,
            plus 50% of the Dollar amount available to be drawn under
            outstanding Commercial L/Cs;

                  (ii) provide to the Agent as soon as available, but in any
            event not later than 25 days after the end of each month (beginning
            with April, 2000 and continuing during the Waiver Period), the
            unaudited internally prepared consolidated balance sheet of the
            Borrowers as at the end of such month and the related unaudited
            unconsolidated statements of income and shareholders equity of the
            Borrowers for such month and the portion of the Fiscal Year through
            such date, setting forth in each case in comparative form the
            figures for the previous year, certified by an appropriate officer
            as being fairly stated in all material respects;

                  (iii) concurrently with the delivery of the monthly financial
            statements referred to in subsection (ii) above, a certificate of an
            appropriate officer of the Borrowers (in such form as shall be
            reasonably acceptable to the Banks) stated to have been made after
            due examination by such officer (x) stating that, to the best of
            such officer's knowledge, except with respect to the Subject
            Sections, the Borrowers during such period have observed or
            performed in all material respects all of its covenants and other
            agreements, and satisfied every condition, contained in the Facility
            Documents to be observed, performed or satisfied by the Borrowers
            and that such officer has obtained no knowledge of any Default or
            Event of Default except as specified in such certificate, (y)
            showing in detail the calculations used in determining the financial
            covenants set forth in the Subject Sections, and (z) stating that,
            to the best of such officer's knowledge, the

                                       4
<PAGE>   5

            representations and warranties expressed in Article V are true,
            correct and complete in all material respects on and as of the date
            of such financial statements delivered concurrently therewith,
            except in each case of (x), (y) or (z) as may otherwise be
            specifically set forth in such certificate; and

                  (iv) execute such additional documents reasonably requested by
            the Banks and/or the Agent, including without limitation to protect,
            perfect or continue perfection of liens.

      SECTION 6. TRUTH OF REPRESENTATIONS AND WARRANTIES. The Borrowers hereby
represent and warrant that the following are true and correct as of the date of
this Waiver Agreement:

            (a)   the representations and warranties of the Borrowers contained
      in the Facility Documents are true and correct on and as of the date of
      this Waiver Agreement as if made on and as of such date unless stated to
      relate to a specific earlier date;

            (b)   all financial statements of the Borrowers provided to the
      Banks are true, accurate and complete in all material respects as of the
      date of, and for the periods covered by, such financial statements;

            (c)   neither this Waiver Agreement nor any other document,
      certificate or written statement furnished to the Banks or the Agent by or
      on behalf of any Borrower in connection herewith or with the Revolving
      Credit Loans and the transactions contemplated hereby and by the Facility
      Documents contains any untrue statement of a material fact or omits to
      state a material fact necessary in order to make the statements contained
      herein and therein not misleading;

            (d)   each Borrower has full power and authority (i) to make the
      borrowings contemplated by the Facility Documents, (ii) to execute,
      deliver and perform this Waiver Agreement, and (iii) to incur the
      obligations provided for herein, all of which have been duly authorized by
      all necessary and proper corporate action;

            (e)   no consent, waiver or authorization of, or filing with, any
      person or any governmental authority is required to be made or obtained by
      the Borrowers in connection with the borrowings under the Facility
      Documents, or the execution, delivery, performance, validity or
      enforceability of this Waiver Agreement;

            (f)   this Waiver Agreement constitutes the legal, valid and binding
      obligation of each Borrower, enforceable against each Borrower in
      accordance with its terms; and

            (g)   the execution and delivery by the Borrowers of this Waiver
      Agreement and the performance by the Borrowers of this Waiver Agreement:
      (i) do not and will not violate any law or regulation; (ii) do not and
      will not violate any order, decree or judgment by which any Borrower is
      bound; (iii) do not and will not violate or conflict with, result in a
      breach of or constitute (with notice, lapse of time, or otherwise) a
      default under any material agreement, mortgage, indenture or other
      contractual obligation to

                                       5
<PAGE>   6

      which any Borrower is a party, or by which any Borrower's properties are
      bound; or (iv) do not and will not result in the creation or imposition of
      any lien upon any property or assets of any Borrower.

      SECTION 7. CONDITIONS TO THE BANKS 'S OBLIGATIONS. The
obligations of the Banks to enter into this Waiver Agreement and be bound by the
terms hereof are subject to the satisfaction of the following conditions
precedent:

            (a)   DELIVERY OF DOCUMENTS AND ITEMS. Contemporaneously with or
      before the execution of this Waiver Agreement by the Banks, the Agent
      shall have received the following, each in form and substance satisfactory
      to the Agent, the Banks and their counsel:

                  (i) WAIVER AGREEMENT. This Waiver Agreement, duly executed by
            the Borrowers;

                  (ii) WAIVER FEE. The waiver fee required to be paid by the
            Borrowers pursuant to
                  Section 3(c) of this Waiver Agreement; and

                  (iii) OTHER REQUIREMENTS. Such other certificates, documents
            and other items as the Banks and/ or the Agent deem necessary or
            desirable.

            (b)   REPRESENTATIONS AND WARRANTIES. The representations and
      warranties made by the Borrowers in this Waiver Agreement shall be true
      and correct in all material respects as of the date hereof.

      SECTION 8. ADDITIONAL EVENTS OF DEFAULT; REVOCATION OF WAIVER. Upon (i)
the failure of the Borrowers, or any of them, to observe, comply or perform any
of their obligations under this Waiver Agreement, or (ii) the occurrence of an
Event of Default, other than with respect to the Subject Sections, during the
Waiver Period, the Waiver provided herein may, in the sole and absolute
discretion of the Banks, be revoked by giving notice thereof by the Agent to the
Borrowers, and upon such revocation, the Waiver shall be null and void and the
Banks and the Agent shall be entitled to exercise all rights and remedies that
the Banks and the Agent now have at law or under the Facility Documents or any
instrument or agreement referred to therein with respect to such failure or
Event of Default, including an Event of Default with respect to any of the
Subject Sections.

      SECTION 9. REAFFIRMATION OF LIABILITY; RELEASE OF CLAIMS. Each
Borrower hereby reaffirms its liability to the Banks and the Agent under the
Facility Documents and all other agreements and instruments executed by the
Borrower for the benefit of the Banks and the Agent in connection therewith.
Each Borrower acknowledges and agrees that the Banks and the Agent have
performed all of their respective obligations under the Facility Documents and
that the Banks and the Agent, or any of them, are not in default under any
obligation it has or ever did have to any Borrower under the Facility Documents
or any other agreement or otherwise. As a specific inducement and consideration
to the Banks to enter into this Waiver Agreement and agree to the transactions
contemplated hereby, each Borrower hereby waives and releases the

                                       6
<PAGE>   7

Banks and the Agent, their respective officers, directors, employees and
representatives, from any and all claims or causes of actions, if any, accruing
on or before the date hereof and arising out of the past and/or present business
relationship between any Borrower and the Banks and/or the Agent which any
Borrower now has or may have or in the future may have against the Banks and/or
the Agent or any of their respective officers, directors, employees or
representatives.

      SECTION 10. EFFECTIVENESS OF FACILITY DOCUMENTS. The Borrowers
have read and understand all terms and provisions of the Facility Documents and
this Waiver Agreement and, subject to the Waiver provided hereby, all of the
terms, covenants and conditions of, and the obligations of the Borrowers under,
all Facility Documents shall remain valid, binding and in full force and effect.
No delay on the part of the Banks or the Agent in the exercise of any right or
remedy under the Facility Documents shall operate as a waiver. No single or
partial exercise by the Banks or the Agent of any such right or remedy shall
preclude any other future exercise of such right or remedy or the exercise of
any other right or remedy. No waiver or indulgence by the Banks of any Default
or Event of Default shall be effective unless in writing and signed by the
Banks, nor shall a waiver on one occasion be construed as a bar to or waiver of
that right on any future occasion.

      SECTION 11. PRESERVATION OF EXISTING SECURITY INTERESTS. Each mortgage,
security interest, pledge, assignment, lien or other conveyance or encumbrance,
including without limitation pursuant to the Security Agreement, of any right,
title, or interest in any property of any kind delivered to the Banks at any
time by any person or entity in connection with the Facility Documents or to
secure the performance of the obligations of the Borrowers under the Facility
Documents, , shall remain in full force and effect following the execution of
this Waiver Agreement.

      SECTION 12. APPLICABLE LAW. This Waiver Agreement shall be deemed to be a
contract made under the laws of the State of Ohio and for all purposes shall be
construed in accordance with the laws of such state.

      SECTION 13. SEVERABILITY. Any provision of this Waiver Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability,
without invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction.

      SECTION 14. INTERPRETATION. This Waiver Agreement is to be deemed to have
been prepared jointly by the parties hereto, and any uncertainty or ambiguity
existing herein shall not be interpreted against any party but shall be
interpreted according to the rules for the interpretation of arm's length
agreements. The various headings in this Waiver Agreement are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this Waiver Agreement or any provision hereof.

      SECTION 15. ENTIRE AGREEMENT. This Waiver Agreement embodies
the entire agreement and understanding among the Borrowers, the Agent and the
Banks relating to, and supersedes all prior agreements and understandings among
the Borrower, the Agent and the Banks relating to, the subject matter hereof.

                                       7
<PAGE>   8

      SECTION 16. COVENANTS TO SURVIVE, BINDING AGREEMENT. This Waiver Agreement
shall be binding upon and inure to the benefit of the Agent, the Banks, the
Borrowers and their respective successors or assigns; provided, however, that
the Borrowers may not assign or otherwise dispose of any of its rights or
obligations hereunder.

      SECTION 17. AMENDMENTS AND SUPPLEMENTS. This Waiver Agreement may not be
amended or supplemented except by an instrument in writing executed by the
Borrowers, the Banks and the Agent.

      SECTION 18. EXPENSES. The Borrowers, jointly and severally, shall
reimburse the Banks and the Agent for any costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and time charges of
attorneys for the Banks and the Agent, which attorneys may be employees of the
Banks or the Agent) paid or incurred by the Banks and/or the Agent in connection
with the preparation, negotiation, execution, delivery, review, amendment,
modification, and administration of this Waiver Agreement and the other Facility
Documents. The Borrowers, jointly and severally, also agree to reimburse the
Banks for any costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' fees and time charges of attorneys for the Banks, which
attorneys may be employees of the Banks) paid or incurred by the Banks in
connection with the collection and enforcement of the Facility Documents.

      SECTION 19. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Agreement by signing
any such counterpart. This Agreement shall become effective upon receipt by the
Agent of counterparts hereof signed by each of the parties hereto or, in the
case of any party as to which an executed counterpart shall not have been
received, receipt by the Agent in form satisfactory to it of telegraphic,
facsimile or other written confirmation from such party of execution of a
counterpart hereof by such party. Any such telegraphic, facsimile or other
written confirmation from such party of execution of a counterpart hereof shall
be fully effective as an original counterpart hereof.

      SECTION 20. WAIVER OF JURY TRIAL. THE BANKS, THE AGENT AND EACH BORROWER,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS WAIVER, THE
AGREEMENT, THE NOTES, THE OTHER FACILITY DOCUMENTS, OR ANY RELATED INSTRUMENT OR
AGREEMENT, OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY, OR ANY COURSE OF
CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY OF
THEM. THIS WAIVER SHALL NOT IN ANY WAY AFFECT THE AGENT'S OR THE BANKS' ABILITY
TO PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION
CONTAINED IN ANY FACILITY DOCUMENT. NEITHER THE BANKS, THE AGENT NOR ANY
BORROWER SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY ACTION IN
WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN

                                       8
<PAGE>   9

WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY THE BANKS, THE AGENT OR THE BORROWERS EXCEPT BY A
WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.

      SECTION 21. CONFESSION OF JUDGMENT. Each Borrower irrevocably
authorizes any attorney-at-law, including any attorney-at-law employed or
retained by the Banks or the Agent, to appear for the Borrower in any court of
record in Franklin County, Ohio (which the Borrower acknowledges to be the place
where the Agreement and this Waiver Agreement were made) or any other state or
jurisdiction wherein the Borrower may then reside, to (i) waive the issuing and
service of process, (ii) confess judgment against the Borrower in favor of the
holder of the Agreement for all amounts then due thereunder and under the Notes,
together with costs of suit, (iii) release all errors, and (iv) waive all rights
of appeal. Each Borrower consents to the jurisdiction and venue of that court.
Each Borrower waives any conflict of interest that any attorney-at-law employed
or retained by the Banks or the Agent may have in confessing judgment under the
Agreement and the Notes and consents to payment of a legal fee to any
attorney-at-law confessing judgment thereunder. After judgment is entered
against one or more of the Borrowers, the power conferred may be exercised as to
one or more of the other Borrowers.

                   [Balance of Page Intentionally Left Blank]

                                       9
<PAGE>   10

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

BORROWERS:

Rocky Shoes & Boots, Inc.,
an Ohio corporation

By: /s/ David Fraedrich
   ----------------------------

Title: V.P.
       ------------------------

      WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO
      NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT
      JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE
      AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
      REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR
      WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART
      TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.

Five Star Enterprises Ltd.,                Lifestyle Footwear, Inc.,
 a Cayman Islands corporation               a Delaware corporation

By: /s/ David Fraedrich                    By: /s/ David Fraedrich
   ----------------------------               -----------------------------

Title: Exec. V.P.                          Title: V.P.
      -------------------------                  --------------------------

                       [Signatures continued on next page]

                                       10
<PAGE>   11

BANKS:

Bank One, NA,
 a national banking association

By: /s/ Donald G. Beckman
   ------------------------------------
   Donald G. Beckman, Vice President

The Huntington National Bank,
  a national banking association

By: /s/ Geoffrey Mowery
   ------------------------------------
   Geoffrey Mowery, Vice President

AGENT:

Bank One, NA, as Agent,
 a national banking association

By: /s/ Donald G. Beckman
   ------------------------------------
   Donald G. Beckman, Vice President

                                       11
<PAGE>   12

ANNEX A

                       FORM OF BORROWING BASE CERTIFICATE

                                       12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]