Document:

<PAGE>

                                                                   Exhibit 10.28

                                                                  EXECUTION COPY

                                FOURTH AMENDMENT

                          Dated as of February 14, 2000

                  This FOURTH AMENDMENT (the "Fourth Amendment") among The Donna
Karan Company, a New York general partnership, The Donna Karan Company Store,
G.P., a New York general partnership, Donna Karan Studio, a New York general
partnership, and DK Footwear Partners, a New York general partnership
(collectively, the "Borrowers"), the financial institutions from time to time
parties thereto as lenders (the "Lenders"), the financial institutions from time
to time parties thereto as issuing banks (the "Issuing Banks"), Citibank, N.A.,
in its capacity as administration agent for the Lenders and the Issuing Banks
(the "Administrative Agent"), The Chase Manhattan Bank and Nationsbank, N.A., in
their capacity as co-agents (the "Co-Agents").

                             PRELIMINARY STATEMENTS:

                  (1) The Borrowers, the Lenders, the Issuing Banks, the
Co-Agents and the Administrative Agent have entered into a Second Amended and
Restated Credit Agreement dated as of January 29, 1998, as amended from time to
time (as so amended, the "Credit Agreement"). Unless otherwise defined herein,
the terms defined in the Credit Agreement shall be used herein as therein
defined.

                  (2) The Borrowers and the Lenders have agreed to amend the
Credit Agreement as hereinafter set forth.

                  SECTION 1. AMENDMENT TO CREDIT AGREEMENT. The Credit Agreement
is, effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2 hereof, hereby amended as follows:

                  (a) The definition of "Acceptance Termination Date" set forth
         in Section 1.01 of the Credit Agreement is amended by deleting such
         definition in its entirety and substituting therefor the following:

                  "'ACCEPTANCE TERMINATION DATE' means the day which is the
                  earliest of (i) January 31, 2003, (ii) the termination of the
                  Commitments pursuant to SECTION 11.02(a), (iii) the date of
                  termination in whole of the Domestic Commitments pursuant to
                  SECTION 3.01(a) and (iv) the date of the termination of the
                  Acceptance Commitment pursuant to SECTION 2.04(l)."

                  (b) The first sentence of the definitions of "Applicable Fixed
         Rate Margin" and the "Applicable Floating Rate Margin" is amended by
         inserting the word "first" before the term "EBITDA certificate".

<PAGE>

                  (c) The definition of "Commitment Termination Date" set forth
         in Section 1.01 of the Credit Agreement is amended by deleting such
         definition in its entirety and substituting therefor the following:

                  "'COMMITMENT TERMINATION DATE' means the day which is the
                  earliest of (A) May 1, 2003, (B) the termination of the
                  Commitments pursuant to SECTION 11.02(a) and (C) the date of
                  termination in whole of the Commitments pursuant to SECTION
                  3.01(a)."

                  (d) The definition of "EBITDA" set forth in Section 1.01 of
         the Credit Agreement is amended by deleting such definition in its
         entirety and substituting therefor the following:

                  "'EBITDA' means, for any Financial Covenant Period, for Donna
                  Karan International and its Subsidiaries on a consolidated
                  basis (i) the sum of the amounts for such period of (A) Net
                  Income, (B) depreciation and amortization expense, (C)
                  interest expense, (D) federal, state, local and foreign income
                  taxes and (E) unusual expense associated with the write-off of
                  the capitalized portion of financing costs; MINUS (ii) gains
                  from Asset Sales (but including expense reimbursements in
                  connection with Asset Sales closing in 1996); PLUS (iii)
                  losses from Asset Sales; MINUS (iv) extraordinary gains; MINUS
                  (v) interest income; MINUS (vi) any gain relating to the
                  accumulated effect of any change in accounting method; PLUS
                  (vii) any loss relating to the accumulated effect of any
                  change in accounting method; PLUS (viii) the non-cash
                  restructuring charges and other non-recurring non-cash charges
                  incurred in Fiscal Year 1999 in an amount not to exceed
                  $7,000,000, each item in clauses (i) through (viii) calculated
                  in conformity with GAAP for such period."

                  (e) The definition of "Fixed Charge Coverage Ratio" set forth
         in Section 1.01 of the Credit Agreement is amended by deleting such
         definition in its entirety and substituting therefor the following:

                  "'FIXED CHARGE COVERAGE RATIO' means, for any Financial
                  Covenant Period, the ratio of (i) EBITDA PLUS the Net Cash
                  Proceeds of Asset Sales received during such period MINUS
                  Capital Expenditures made during such period (excluding
                  $9,200,000, representing the cash portion of the purchase
                  price for the UK Acquisition, from the fourth fiscal quarter
                  of 1999) MINUS the Investments made pursuant to SECTION
                  9.04(iv) during such period MINUS any dividends payments or
                  stock repurchases with respect to the Common Stock during such
                  period MINUS any cash payment of taxes made during such
                  period, to (ii) Cash Interest Expense for such period PLUS any
                  principal payment of Funded Debt made during such period
                  (excluding for each fiscal quarter in Fiscal Year 2002, the
                  amount of any repayment of the subordinated indebtedness
                  incurred by The Donna Karan Company and Donna Karan Stores
                  (U.K.) Limited owing to B.S. Ong/Club 21 and/or its affiliates
                  provided that such amount does not exceed $8,700,000."

                                       2
<PAGE>

                  (f) The definition of "Indebtedness" set forth in Section 1.01
         of the Credit Agreement is amended by deleting such definition in its
         entirety and substituting therefor the following:

                  "'INDEBTEDNESS' means, as applied to any Person at any time,
                  (a) all indebtedness, obligations or other liabilities of such
                  Person (i) for borrowed money or evidenced by debt securities,
                  debentures, acceptances, notes or other similar instruments,
                  and any accrued interest, fees and charges relating thereto,
                  (ii) under profit payment agreements or in respect of
                  obligations to redeem, repurchase or exchange any Securities
                  of such Person or to pay dividends in respect of any stock,
                  (iii) with respect to letters of credit issued for such
                  Person's account, (iv) to pay the deferred purchase price of
                  property or services, except accounts payable and accrued
                  expenses arising in the ordinary course of business, (v) in
                  respect of Capital Leases; (b) Accommodation Obligations with
                  respect to indebtedness, obligations or other liabilities of a
                  Person of a type set forth in clause (a); (c) all
                  indebtedness, obligations or other liabilities of such Person
                  or others secured by a Lien (other than a Customary Permitted
                  Lien) on any property of such Person, whether or not such
                  indebtedness, obligations or liabilities are assumed by such
                  Person, all as of such time; (d) all indebtedness, obligations
                  or other liabilities of such Person in respect of Interest
                  Rate Contracts and foreign exchange contracts, net of
                  liabilities owed to such Person by the counterparties thereon;
                  (e) all preferred stock subject (upon the occurrence of any
                  contingency or otherwise) to mandatory redemption; and (f) all
                  contingent Contractual Obligations with respect to any of the
                  foregoing."

                  (g) Clause (f) of Section 7.01 of the Credit Agreement is
         amended by deleting such Section in its entirety and substituting
         therefor the following:

                  "(f) EBITDA REPORT. On or prior to February 28 of each Fiscal
                  Year, a certificate, signed by Donna Karan International's
                  chief financial officer or controller, setting forth
                  calculations (with such specificity as the Requisite Lenders
                  may reasonably request) for the determination of EBITDA for
                  the immediately preceding Fiscal Year and compliance with
                  Section 10.06."

                  (h) Clause (v) of Section 9.01 of the Credit Agreement is
         amended by deleting such Section in its entirety and substituting
         therefor the following:

                  "(v) Indebtedness incurred under foreign exchange hedging
                  contracts;"

                  (i) Section 9.01 of the Credit Agreement is further amended by
         adding at the end thereof a new clause (x) to read as follows:

                  "(x) Indebtedness incurred by one member of the Donna Karan
                  Group owing to another member of the Donna Karan Group."

                                       3
<PAGE>

                  (j) Section 9.03 of the Credit Agreement is amended by adding
         at the end thereof a new clause (viii) to read as follows:

                  "(viii) Liens on cash in an aggregate amount not to exceed
                  $4,000,000 securing Indebtedness permitted under SECTION
                  9.01(v)."

                  (k) Section 9.04 of the Credit Agreement is amended by adding
         at the end thereof a new clause (v) to read as follows:

                  "(v) Investments by any member of the Donna Karan Group in any
                  of its Subsidiaries in existence on February 1, 2000 and any
                  Subsidiary created in compliance with SECTION 9.09(b)."

                  (l) Section 9.06 of the Credit Agreement is amended by adding
         at the end thereof a new clause (viii) to read as follows:

                  "(viii) the repayment of the subordinated indebtedness
                  incurred by The Donna Karan Company and Donna Karan Stores
                  (U.K.) Limited owing to B.S. Ong/Club 21 and/or its affiliates
                  in an amount not to exceed $8,700,000; PROVIDED that at the
                  time of such repayment and after giving effect thereto the
                  Borrowers have Availability of at least $30,000,000."

                  (m) Section 9.13 of the Credit Agreement is amended by
         deleting such Section in its entirety and substituting therefor the
         following:

                  "9.13. OPERATING LEASES. No member of the Donna Karan Group
                  shall become liable in any way, whether directly or by
                  assignment or by Accommodation Obligation, for the obligations
                  of a lessee under any Operating Lease, except:

                           (a) the Operating Lease entered into in December 1997
                  by The Donna Karan Company Stores G.P. for the Madison Avenue
                  store in New York, New York; and

                           (b) Operating Leases, if immediately after giving
                  effect to the incurrence of Rental Payments with respect
                  thereto, the aggregate amount of all Rental Payments with
                  respect to such Operating Leases does not exceed (i) in Fiscal
                  Years 2000 and 2001, an amount equal to $45,000,000 MINUS the
                  amount of Rental Payments for such Fiscal Year with respect to
                  the Operating Lease permitted by SECTION 9.13(a), (ii) in
                  Fiscal Year 2002, an amount equal to $55,000,000 MINUS the
                  amount of Rental Payments for such Fiscal Year with respect to
                  the Operating Lease permitted by SECTION 9.13(a), and (iii) in
                  Fiscal Year 2003, an amount equal to $65,000,000 MINUS the
                  amount of Rental Payments for such Fiscal Year with respect to
                  the Operating Lease permitted by SECTION 9.13(a)."

                                       4
<PAGE>

                  (n) Section 9.14 of the Credit Agreement is amended by
         deleting such Section in its entirety and substituting therefor the
         following:

                  "9.14. CAPITAL EXPENDITURES. No member of the Donna Karan
                  Group shall make or incur Capital Expenditures (a) during
                  Fiscal Year 2000 if the aggregate amount of Capital
                  Expenditures for the Donna Karan Group PLUS the aggregate
                  amount of the Investments made pursuant to SECTION 9.04(iv)
                  would exceed Twenty Million Five Hundred Thousand Dollars
                  ($20,500,000) for such Fiscal Year, (b) during Fiscal Years
                  2001 and 2002 if the aggregate amount of Capital Expenditures
                  for the Donna Karan Group PLUS the aggregate amount of the
                  Investments made pursuant to SECTION 9.04(iv) would exceed
                  Twenty Seven Million Five Hundred Thousand Dollars
                  ($27,500,000) for any such Fiscal Year and (c) during the
                  first six months of Fiscal Year 2003 if the aggregate amount
                  of Capital Expenditures for the Donna Karan Group PLUS the
                  aggregate amount of the Investments made pursuant to SECTION
                  9.04(iv) would exceed Thirteen Million Seven Hundred Fifty
                  Thousand Dollars ($13,750,000) for such six month period;
                  PROVIDED, HOWEVER, that the Donna Karan Group may carry
                  forward from one Fiscal Year to another Fiscal Year any
                  Capital Expenditures permitted hereunder, but not made or
                  incurred in such Fiscal Year, in an amount of up to Twelve
                  Million Dollars ($12,000,000); PROVIDED, FURTHER, that cost of
                  Equipment purchased to replace Equipment damaged or destroyed
                  shall not be included in the calculations for Capital
                  Expenditures under this SECTION 9.14 to the extent of the
                  amount of insurance proceeds received and applied against the
                  Obligations."

                  (o) Section 10.01 of the Credit Agreement is amended by
         deleting such Section in its entirety and substituting therefor the
         following:

                  "10.01. MINIMUM ADJUSTED NET WORTH. The Adjusted Net Worth of
                  Donna Karan International and its Subsidiaries on a
                  consolidated basis at the end of each fiscal quarter set forth
                  below shall not be less than the amount set forth opposite
                  such quarter:

<TABLE>
<CAPTION>

                  Fiscal Quarter                           Minimum Amount
                  --------------                           --------------

<S>               <C>                                         <C>
                  First Fiscal Quarter 1998                   $100,000,000
                  Second Fiscal Quarter 1998                  $ 95,000,000
                  Third Fiscal Quarter 1998                   $100,000,000
                  Fourth Fiscal Quarter 1998                  $115,000,000
                  First Fiscal Quarter 1999                   $115,000,000
                  Second Fiscal Quarter 1999                  $115,000,000
                  Third Fiscal Quarter 1999                   $120,000,000
                  Fourth Fiscal Quarter 1999                  $120,000,000
                  First Fiscal Quarter 2000                   $120,000,000
                  Second Fiscal Quarter 2000                  $120,000,000
                  Third Fiscal Quarter 2000                   $125,000,000
                  Fourth Fiscal Quarter 2000                  $125,000,000

</TABLE>

                                       5
<PAGE>

<TABLE>

<S>               <C>                                         <C>
                  First Fiscal Quarter 2001                   $125,000,000
                  Second Fiscal Quarter 2001                  $125,000,000
                  Third Fiscal Quarter 2001                   $125,000,000
                  Fourth Fiscal Quarter 2001                  $125,000,000
                  First Fiscal Quarter 2002                   $125,000,000
                  Second Fiscal Quarter 2002                  $125,000,000
                  Third Fiscal Quarter 2002                   $125,000,000
                  Fourth Fiscal Quarter 2002                  $125,000,000
                  First Fiscal Quarter 2003                   $125,000,000

</TABLE>

                  (p) Section 10.02 of the Credit Agreement is amended by
         deleting such Section in its entirety and substituting therefor the
         following:

                  "10.02. MINIMUM INTEREST COVERAGE RATIO. The Interest Coverage
                  Ratio of Donna Karan International and its Subsidiaries on a
                  consolidated basis at the end of each fiscal quarter set forth
                  below shall not be less than the ratio set forth opposite such
                  quarter:

<TABLE>
<CAPTION>

                  Fiscal Quarter                                 Ratio
                  --------------                                 -----

<S>               <C>                                          <C>
                  Fourth Fiscal Quarter 1998                   3.00  to 1.0
                  First Fiscal Quarter 1999                    3.00  to 1.0
                  Second Fiscal Quarter 1999                   3.00  to 1.0
                  Third Fiscal Quarter 1999                    3.00  to 1.0
                  Fourth Fiscal Quarter 1999                   4.50  to 1.0
                  First Fiscal Quarter 2000                    4.50  to 1.0
                  Second Fiscal Quarter 2000                   5.00  to 1.0
                  Third Fiscal Quarter 2000                    5.00  to 1.0
                  Fourth Fiscal Quarter 2000                   5.00  to 1.0
                  First Fiscal Quarter 2001                    5.00  to 1.0
                  Second Fiscal Quarter 2001                   5.00  to 1.0
                  Third Fiscal Quarter 2001                    5.00  to 1.0
                  Fourth Fiscal Quarter 2001                   5.00  to 1.0
                  First Fiscal Quarter 2002                    5.00  to 1.0
                  Second Fiscal Quarter 2002                   5.00  to 1.0
                  Third Fiscal Quarter 2002                    5.00  to 1.0
                  Fourth Fiscal Quarter 2002                   5.00  to 1.0
                  First Fiscal Quarter 2003                    5.00  to 1.0"

</TABLE>

                  (q) Section 10.03 of the Credit Agreement is amended by
         deleting such Section in its entirety and substituting therefor the
         following:

                  "10.03. MINIMUM FIXED CHARGE COVERAGE RATIO. The Fixed Charge
                  Coverage Ratio of Donna Karan International and its
                  Subsidiaries on a consolidated basis at the end of each fiscal
                  quarter set forth below shall not be less than the ratio set
                  forth opposite such quarter:

                                       6
<PAGE>

<TABLE>
<CAPTION>

                  Fiscal Quarter                                   Ratio
                  --------------                                   -----

<S>               <C>                                          <C>
                  First Fiscal Quarter 2000                     2.00 to 1.0
                  Second Fiscal Quarter 2000                    2.00 to 1.0
                  Third Fiscal Quarter 2000                     2.00 to 1.0
                  Fourth Fiscal Quarter 2000                    3.00 to 1.0
                  First Fiscal Quarter 2001                     3.00 to 1.0
                  Second Fiscal Quarter 2001                    3.00 to 1.0
                  Third Fiscal Quarter 2001                     3.00 to 1.0
                  Fourth Fiscal Quarter 2001                    3.00 to 1.0
                  First Fiscal Quarter 2002                     3.00 to 1.0
                  Second Fiscal Quarter 2002                    3.00 to 1.0
                  Third Fiscal Quarter 2002                     3.00 to 1.0
                  Fourth Fiscal Quarter 2002                    3.00 to 1.0
                  First Fiscal Quarter 2003                     3.00 to 1.0"

                  (r) Section 10.04 of the Credit Agreement is amended by
         deleting such Section in its entirety and substituting therefor the
         following:

                  "10.04. MINIMUM WORKING CAPITAL RATIO. The Working Capital
                  Ratio of Donna Karan International and its Subsidiaries on a
                  consolidated basis at the end of each fiscal quarter set forth
                  below shall not be less than the ratio set forth opposite such
                  quarter:

<CAPTION>

                  Fiscal Quarter                                 Ratio
                  --------------                                 -----

<S>               <C>                                          <C>
                  Fourth Fiscal Quarter 1999                  1.40 to 1.0
                  First Fiscal Quarter 2000                   1.40 to 1.0
                  Second Fiscal Quarter 2000                  1.40 to 1.0
                  Third Fiscal Quarter 2000                   1.40 to 1.0
                  Fourth Fiscal Quarter 2000                  1.40 to 1.0
                  First Fiscal Quarter 2001                   1.40 to 1.0
                  Second Fiscal Quarter 2001                  1.40 to 1.0
                  Third Fiscal Quarter 2001                   1.40 to 1.0
                  Fourth Fiscal Quarter 2001                  1.40 to 1.0
                  First Fiscal Quarter 2002                   1.40 to 1.0
                  Second Fiscal Quarter 2002                  1.40 to 1.0
                  Third Fiscal Quarter 2002                   1.40 to 1.0
                  Fourth Fiscal Quarter 2002                  1.40 to 1.0
                  First Fiscal Quarter 2003                   1.40 to 1.0"

</TABLE>

                  (s) Section 10.05 of the Credit Agreement is amended by
         deleting such Section in its entirety and substituting therefor the
         following:

                  "10.05. MAXIMUM LEVERAGE RATIO. The Leverage Ratio of Donna
                  Karan International and its Subsidiaries on a consolidated
                  basis at the end of each fiscal

                                       7
<PAGE>

                  quarter set forth below shall not be greater than the ratio
                  set forth opposite such quarter:

<TABLE>
<CAPTION>

                  Fiscal Quarter                                 Ratio
                  --------------                                 -----

<S>               <C>                                         <C>
                  Fourth Fiscal Quarter 1998                  2.00 to 1.0
                  First Fiscal Quarter 1999                   2.00 to 1.0
                  Second Fiscal Quarter 1999                  2.00 to 1.0
                  Third Fiscal Quarter 1999                   3.00 to 1.0
                  Fourth Fiscal Quarter 1999                  2.00 to 1.0
                  First Fiscal Quarter 2000                   2.00 to 1.0
                  Second Fiscal Quarter 2000                  2.00 to 1.0
                  Third Fiscal Quarter 2000                   2.00 to 1.0
                  Fourth Fiscal Quarter 2000                  2.00 to 1.0
                  First Fiscal Quarter 2001                   2.00 to 1.0
                  Second Fiscal Quarter 2001                  2.00 to 1.0
                  Third Fiscal Quarter 2001                   2.00 to 1.0
                  Fourth Fiscal Quarter 2001                  2.00 to 1.0
                  First Fiscal Quarter 2002                   2.00 to 1.0
                  Second Fiscal Quarter 2002                  2.00 to 1.0
                  Third Fiscal Quarter 2002                   2.00 to 1.0
                  Fourth Fiscal Quarter 2002                  2.00 to 1.0
                  First Fiscal Quarter 2003                   2.00 to 1.0"

                  (t) Section 10.06 of the Credit Agreement is amended by
         deleting such Section in its entirety and substituting therefor the
         following:

                  "10.06. EBITDA. The EBITDA for Donna Karan International and
                  its Subsidiaries on a consolidated basis at the end of the
                  fourth fiscal quarter for each Fiscal Year set forth below
                  shall not be less than the amount set forth opposite such
                  Fiscal Year:

<CAPTION>

                           Fiscal Year                       Amount
                           -----------                       ------

<S>                        <C>                               <C>
                           1999                              $25,000,000
                           2000                              $33,000,000
                           2001                              $35,000,000
                           2002                              $40,000,000"

</TABLE>

                  SECTION 2. CONDITIONS OF EFFECTIVENESS. This Fourth Amendment
shall become effective when (a) the Administrative Agent shall have received
counterparts of this Fourth Amendment executed by the Borrowers and the Lenders
and (b) the Borrowers shall have paid to the Administrative Agent, for the
ratable benefit of the Lenders, a fee in the amount of one-eighth of one percent
(0.125%) of the amount of the Commitments.

                                       8
<PAGE>

                  SECTION 3.  REPRESENTATIONS AND WARRANTIES OF THE BORROWERS.
Each Borrower represents and warrants as follows:

                  (a) After giving effect to this Fourth Amendment, all of the
         representations and warranties contained in Section 6.01 of the Credit
         Agreement and in the other Loan Documents shall be true in all material
         respects.

                  (b) After giving effect to this Fourth Amendment, no Default
         or Event of Default shall have occurred and be continuing.

                  SECTION 4. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. (a)
Upon the effectiveness of this Fourth Amendment, on and after the date hereof
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import referring to the Credit Agreement, and each
reference in the other Loan Documents to "the Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement as amended hereby.

                  (b) Except as specifically amended above, the Credit Agreement
and all other Loan Documents, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed. Without limiting
the generality of the foregoing, the Loan Documents and all of the Collateral
described therein do and shall continue to secure the payment of all obligations
of the Borrowers under the Credit Agreement, the Notes and the other Loan
Documents, in each case as amended hereby.

                  (c) The execution, delivery and effectiveness of this Fourth
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or the Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.

                  SECTION 5. EXECUTION IN COUNTERPARTS. This Fourth Amendment
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.

                  SECTION 6.  GOVERNING LAW.  This Fourth Amendment shall be
governed by, and construed in accordance with, the laws of the State of New
York.

                                       9
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be executed as of the date first above written.

                          THE DONNA KARAN COMPANY

                          By:      Donna Karan International Inc.,
                                   a general partner

                                   By:   /s/
                                      ---------------------------------
                                      Title:___________________________

                          DONNA KARAN STUDIO

                          By:      Full Requirements Merchandising, Inc.,
                                   a general partner

                                   By:   /s/
                                      ---------------------------------
                                      Title:___________________________

                          THE DONNA KARAN COMPANY STORE, G.P.

                          By:      Donna Karan International Inc.,
                                   a general partner

                                   By:   /s/
                                      ---------------------------------
                                      Title:___________________________

                          DK FOOTWEAR PARTNERS

                          By:      Donna Karan International Inc.,
                                   a general partner

                                   By:   /s/
                                      ---------------------------------
                                      Title:___________________________

                                  10
<PAGE>

                          CITIBANK, N.A., as Administrative Agent and Lender

                          By:   /s/
                             ---------------------------------
                             Vice President

                          THE CHASE MANHATTAN BANK, as Co-Agent
                                    and Lender

                          By:   /s/
                             ---------------------------------
                             Title:

                          NATIONSBANK N.A., as Co-Agent and Lender

                          By:   /s/
                             ---------------------------------
                             Title:

                          PNC BANK NATIONAL ASSOCIATION

                          By:   /s/
                             ---------------------------------
                             Title:

                          THE CIT GROUP/COMMERCIAL SERVICES, INC.

                          By:   /s/
                             ---------------------------------
                             Title:

                                  11
<PAGE>

                                    NATIONAL CITY COMMERCIAL FINANCE, INC.

                                    By:   /s/
                                       ---------------------------------
                                       Title:

                                    JACKSON NATIONAL LIFE INSURANCE CO.,
                                    By:  PPM FINANCE, INC., its Attorney-in-Fact

                                    By:   /s/
                                       ---------------------------------
                                       Title:

                                       12<PAGE>

                                                                    EXHIBIT 10.1

                                                                      APPENDIX C

                              PRI AUTOMATION, INC.
                       1994 EMPLOYEE STOCK PURCHASE PLAN
                                  (AS AMENDED)

1. PURPOSE.

    The PRI Automation, Inc. Employee Stock Purchase Plan (the "Plan") is
intended to provide a method whereby employees of PRI Automation, Inc. (the
"Company") will have an opportunity to acquire an ownership interest (or
increase an existing ownership interest) in the Company through the purchase of
shares of the Common Stock of the Company. It is the intention of the Company
that the Plan qualify as an "employee stock purchase plan" under Section 423 of
the Internal Revenue Code of 1986, as amended (the "Code"). The provisions of
the Plan shall, accordingly, be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.

2. DEFINITIONS.

    (a) "Board" means the Board of Directors of the Company.

    (b) "Code" shall have the meaning set forth in Paragraph 1.

    (c) "Committee" means the Compensation Committee of the Board.

    (d) "Common Stock" means the common stock, $.01 par value per share, of the
Company.

    (e) "Company" shall also include any subsidiary of PRI Automation, Inc.
designated as a participant in the Plan by the Board, unless the context
otherwise requires.

    (f) "Compensation" means, for the purpose of any Offering pursuant to this
Plan, base pay in effect as of the Offering Commencement Date (as hereinafter
defined). Compensation shall not include any deferred compensation other than
contributions by an individual through a salary reduction agreement to a cash or
deferred plan pursuant to Section 401(k) of the Code or to a cafeteria plan
pursuant to Section 125 of the Code.

    (g) "Employee" means any person who is customarily employed at least
20 hours per week and more than five months in a calendar year by (i) the
Company or (ii) any subsidiary corporation.

    (h) "Investment Accounts" shall have the meaning set forth in Paragraph 9.

    (i) "Offering" shall have the meaning set forth in Paragraph 4.

    (j) "Offering Commencement Date" shall have the meaning set forth in
Paragraph 4.

    (k) "Offering Termination Date" shall have the meaning set forth in
Paragraph 4.

    (l) "Plan" shall have the meaning set forth in Paragraph 1.

    (m) "Subsidiary corporation" shall mean any present or future corporation
which is or would constitute a "subsidiary corporation" as that term is defined
in Section 425 of the Code.

3. ELIGIBILITY.

    (a) Participation in the Plan is completely voluntary. Participation in any
one or more of the offerings under the Plan shall neither limit, nor require,
participation in any other offering.

                                      C-1
<PAGE>
    (b) Each employee of the Company shall be eligible to participate in the
Plan on the first Offering Commencement Date, as hereafter defined, his becoming
an employee. Notwithstanding the foregoing, no employee shall be granted an
option under the Plan:

        (i) if, immediately after the grant, such employee would own stock,
    and/or hold outstanding options to purchase stock, possessing 5% or more of
    the total combined voting power or value of all classes of stock of the
    Company or any subsidiary corporation; for purposes of this Paragraph the
    rules of Section 425(d) of the Code shall apply in determining stock
    ownership of any employee; or

        (ii) which permits his rights to purchase stock under all Section 423
    employee stock purchase plans of the Company and its subsidiary corporations
    to exceed $25,000 of the fair market value of the stock (determined at the
    time such option is granted) for each calendar year in which such option is
    outstanding; for purposes of this Paragraph, the rules of Section 423(b)(8)
    of the Code shall apply.

4. OFFERING DATES.

    The right to purchase stock hereunder shall be made available by a series of
six-month offerings (the "Offering" or "Offerings") to employees eligible in
accordance with Paragraph 3 hereof. The Committee will, in its discretion,
determine the applicable date of commencement ("Offering Commencement Date") and
termination date ("Offering Termination Date") for each Offering. Participation
in any one or more of the Offerings under the Plan shall neither limit, nor
require, participation in any other Offering.

5. PARTICIPATION.

    Any eligible employee may become a participant by completing a payroll
deduction authorization form provided by the Company and filing it with the
office of the Company's Treasurer 20 days prior to each applicable Offering
Commencement Date, as determined by the Committee pursuant to Paragraph 4.

6. PAYROLL DEDUCTIONS.

    (a) At the time a participant files his authorization for a payroll
deduction, he shall elect to have deductions made from his pay on each payday
during any Offering in which he is a participant at a specified percentage of
his Compensation as determined on the applicable Offering Commencement Date;
said percentage shall be in increments of one percent up to a maximum percentage
of ten percent.

    (b) Payroll deductions for a participant shall commence on the applicable
Offering Commencement Date when his authorization for a payroll deduction
becomes effective and shall end on the Offering Termination Date of the Offering
to which such authorization is applicable unless sooner terminated by the
participant as provided in Paragraph 10.

    (c) All payroll deductions made for a participant shall be credited to his
account under the Plan. A participant may not make any separate cash payment
into such account.

    (d) A participant may withdraw from the Plan at any time during the
applicable Offering period; provided, however, that a participant who is an
officer or director of the Company and who withdraws from the Plan during any
Offering period will not be eligible for the grant of any subsequent option
under the Plan for a period of six months.

                                      C-2
<PAGE>
7. GRANTING OF OPTION.

    (a) Except as set forth in Paragraph 7(c) hereof, on the Offering
Commencement Date of each Offering, a participating employee shall be deemed to
have been granted an option to purchase a maximum number of shares of the Common
Stock equal to an amount determined as follows: 85% of the market value per
share of the Common Stock on the applicable Offering Commencement Date shall be
divided into an amount equal to the percentage of the employee's Compensation
which he has elected to have withheld (but no more than 10%) multiplied by the
employee's Compensation over the Offering period. Such market value per share of
the Common Stock shall be determined as provided in clause (i) of
Paragraph 7(b).

    (b) The option price of the Common Stock purchased with payroll deductions
made during each such Offering for a participant therein shall be the lower of:

        (i) 85% of the average of the bid and the asked prices as reported by
    the National Association of Securities Dealers Automated Quotation
    System, Inc. ("NASDAQ") in the Wall Street Journal, or, if the Common Stock
    is designated as a national market security by the National Association of
    Securities Dealers, Inc. ("NASD") the last trading price of the Common Stock
    as reported by the NASDAQ National Market System in the Wall Street Journal,
    or, if the Common Stock is listed on an exchange the closing price of the
    Common Stock on the exchange on the Offering Commencement Date applicable to
    such Offering (or on the next regular business date on which shares of the
    Common Stock shall be traded in the event that no shares of the Common Stock
    have been traded on the Offering Commencement Date); or if the Common Stock
    is not quoted on NASDAQ, not designated as a NASDAQ national market security
    and not listed on an exchange, 85% of the fair market value on the Offering
    Commencement Date as determined by the Committee; and

        (ii) 85% of the average of the bid and the asked prices as reported by
    NASDAQ in the Wall Street Journal, or, if the Common Stock is designated as
    a national market security by the NASD the last trading price of the Common
    Stock as reported by the NASDAQ National Market System in the Wall Street
    Journal, or, if the Common Stock is listed on an exchange the closing price
    of the Common Stock on the exchange on the Offering Termination Date
    applicable to such Offering (or on the next regular business date on which
    shares of the Common Stock shall be traded in the event that no shares of
    the Common Stock shall have been traded on the Offering Termination Date);
    or if the Common Stock is not quoted on NASDAQ, not designated as a national
    market security and not listed on an exchange, 85% of the fair market value
    on the Offering Termination Date as determined by the Committee.

    (c) A participant who is an officer or director of the Company and who
elects pursuant to Paragraph 8(a) with respect to any Offering not to exercise
an option deemed to have been granted pursuant to this Paragraph 7, shall not be
eligible for the grant of an option hereunder for a period of six months.

8. EXERCISE OF OPTION.

    (a) Unless a participant gives written notice to the Treasurer of the
Company as hereinafter provided, his option for the purchase of Common Stock
with payroll deductions made during any Offering will be deemed to have been
exercised automatically on the Offering Termination Date applicable to such
Offering for the purchase of the number of full shares of Common Stock which the
accumulated payroll deductions in his account at that time will purchase at the
applicable option price (but not in excess of the number of shares for which
options have been granted the employee pursuant to Paragraph 7(a)), and any
excess in his account at that time will be automatically carried forward to the
next Offering unless the participant elects, by written notice to the Treasurer
of the Company, to have the excess returned to him.

                                      C-3
<PAGE>
    (b) Fractional shares will not be issued under the Plan and any accumulated
payroll deductions which would have been used to purchase fractional shares
shall be automatically carried forward to the next Offering unless the
participant elects, by written notice to the Treasurer of the Company, to have
the excess cash returned to him.

9. INVESTMENT ACCOUNTS.

    All shares of Common Stock purchased pursuant to Paragraph 8 shall be held
in separate investment accounts ("Investment Accounts") maintained by such
brokerage house, investment banking firm, commercial bank or other such similar
institution as may be selected by the Board for the participants. Each
Investment Account shall be in the name of the participating employee. All
dividends, if any, paid with respect to shares of Common Stock in a
participant's Investment Account shall be credited to his or her Investment
Account. Each participant shall have all of the rights and privileges of a
stockholder of the Company with respect to those shares purchased under the Plan
and held in his or her Investment Account.

10. WITHDRAWAL AND TERMINATION.

    (a) Prior to the Offering Termination Date for an Offering, any participant
may withdraw the payroll deductions credited to his account under the Plan for
such Offering by giving written notice to the Treasurer of the Company. All of
the participant's payroll deductions credited to such account will be paid to
him promptly after receipt of notice of withdrawal, without interest, and no
future payroll deductions will be made from his pay during such offering. The
Company will treat any attempt to borrow by a participant on the security of
accumulated payroll deductions as an election to withdraw such deductions.

    (b) Except as set forth in Paragraphs 6(d) and 7(c), a participant's
election not to participate in, or withdrawal from, any Offering will not have
any effect upon his eligibility to participate in any succeeding Offering or in
any similar plan which may hereafter be adopted by the Company.

    (c) Upon termination of the participant's employment for any reason,
including retirement but excluding death, the payroll deductions credited to his
account will be returned to him, or, in the case of his death, to the person or
persons entitled thereto under Paragraph 14.

    (d) Upon termination of the participant's employment because of death, his
beneficiary (as defined in Paragraph 14) shall have the right to elect, by
written notice given to the Company's Treasurer prior to the expiration of a
period of 90 days commencing with the date of the death of the participant,
either:

        (i) to withdraw all of the payroll deductions credited to the
    participant's account under the Plan; or

        (ii) to exercise the participant's option for the purchase of stock on
    the Offering Termination Date next following the date of the participant's
    death for the purchase of the number of full shares which the accumulated
    payroll deductions in the participant's account at the date of the
    participant's death will purchase at the applicable option price (subject to
    the limitation contained in Paragraph 7(a)), and any excess in such account
    will be returned to said beneficiary. In the event that no such written
    notice of election shall be duly received by the office of the Company's
    Treasurer, the beneficiary shall automatically be deemed to have elected to
    withdraw the payroll deductions credited to the participant's account at the
    date of the participant's death and the same will be paid promptly to said
    beneficiary.

                                      C-4
<PAGE>
11. INTEREST.

    No interest will be paid or allowed on any money paid into the Plan or
credited to the account of any participating employee.

12. STOCK.

    (a) The maximum number of shares of Common Stock available for issuance and
purchase by employees under the Plan, subject to adjustment upon changes in
capitalization of the Company as provided in Paragraph 17, shall be 520,000
shares of Common Stock, $.01 par value per share, of the Company. If the total
number of shares for which options are exercised on any Offering Termination
Date in accordance with Paragraph 8 exceeds the maximum number of shares for the
applicable Offering, the Company shall make a pro rata allocation of the shares
available for delivery and distribution in an equitable manner, with the
balances of payroll deductions credited to the account of each participant under
the Plan carried forward to the next Offering or returned to the participant if
he so chooses, by giving written notice to the Treasurer to this effect.

    (b) The participant will have no interest in stock covered by his option
until such option has been exercised.

    (c) The shares of stock purchased by a participant who is an officer or
director of the Company, or a beneficiary of a participant who was an officer or
director of the Company pursuant to Paragraph 14 hereof, at each Offering
Termination Date may not be sold or transferred by such participant or
beneficiary for a period of six months following such Offering Termination Date.
Certificates representing said shares of stock issued pursuant to this Plan may
bear legends to that effect.

13. ADMINISTRATION.

    The Plan shall be administered by the Committee. The interpretation and
construction of any provision of the Plan and adoption of rules and regulations
for administering the Plan shall be made by the Committee. Determinations made
by the Committee with respect to any matter or provision contained in the Plan
shall be final, conclusive and binding upon the Company and upon all
participants, their heirs or legal representatives. Any rule or regulation
adopted by the Committee shall remain in full force and effect unless and until
altered, amended, or repealed by the Committee.

14. DESIGNATION OF BENEFICIARY.

    A participant shall file with the Treasurer of the Company a written
designation of a beneficiary who is to receive any Common Stock and/or cash
under the Plan. Such designation of beneficiary may be changed by the
participant at any time by written notice. Upon the death of a participant and
upon receipt by the Company of proof of the identity and existence at the
participant's death of a beneficiary validly designated by him under the Plan,
the Company shall deliver such Common Stock and/or cash to such beneficiary. In
the event of the death of a participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such
participant's death, the Company shall deliver such Common Stock and/or cash to
the executor or administrator of the estate of the participant. No beneficiary
shall prior to the death of the participant by whom he has been designated,
acquire any interest in the Common Stock and/or cash credited to the participant
under the Plan.

15. TRANSFERABILITY.

    Neither payroll deductions credited to a participant's account nor any
rights with regard to the exercise of an option or to receive Common Stock under
the Plan may be assigned, transferred, pledged, or otherwise disposed of in any
way by the participant other than by will or the laws of descent and
distribution. Any such attempted assignment, transfer, pledge, or other
disposition shall be

                                      C-5
<PAGE>
without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with Paragraph 8(b).

16. USE OF FUNDS.

    All payroll deductions received or held by the Company under this Plan may
be used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such payroll deductions.

17. EFFECT OF CHANGES OF COMMON STOCK.

    If the Company shall subdivide or reclassify the Common Stock which has been
or may be optioned under this Plan, or shall declare thereon any dividend
payable in shares of such Common Stock, or shall take any other action of a
similar nature affecting such Common Stock, then the number and class of shares
of Common Stock which may thereafter be optioned (in the aggregate and to any
participant) shall be adjusted accordingly and in the case of each option
outstanding at the time of any such action, the number and class of shares which
may thereafter be purchased pursuant to such option and the option price per
share shall be adjusted to such extent as may be determined by the Committee,
with the approval of independent public accountants and counsel, to be necessary
to preserve the rights of the holder of such option.

18. AMENDMENT OR TERMINATION.

    The Board may at any time terminate or amend the Plan. No such termination
shall affect options previously granted, nor may an amendment make any change in
any option theretofore granted which would adversely affect the rights of any
participant holding options under the Plan.

19. NOTICES.

    All notices or other communications by a participant to the Company under or
in connection with the Plan shall be deemed to have been duly given when
received by the Treasurer of the Company.

20. MERGER OR CONSOLIDATION.

    If the Company shall at any time merge into or consolidate with another
corporation, the holder of each option then outstanding will thereafter be
entitled to receive at the next Offering Termination Date upon the exercise of
such option for each share as to which such option shall be exercised, the
securities or property which a holder of one share of the Common Stock was
entitled to upon and at the time of such merger or consolidation. In accordance
with this Paragraph and Paragraph 17, the Committee shall determine the kind and
amount of such securities or property which such holder of an option shall be
entitled to receive. A sale of all or substantially all of the assets of the
Company shall be deemed a merger or consolidation for the foregoing purposes.

21. APPROVAL OF STOCKHOLDERS.

    The Plan is subject to the approval of the stockholders of the Company at
their next annual meeting or at any special meeting of the stockholders for
which one of the purposes of such a special meeting shall be to act upon the
Plan.

22. GOVERNMENTAL AND OTHER REGULATIONS.

    The Plan, and the grant and exercise of the rights to purchase shares
hereunder, and the Company's obligation to sell and deliver shares upon the
exercise of rights to purchase shares, shall be subject to all applicable
federal, state and foreign laws, rules and regulations, and to such approvals by

                                      C-6
<PAGE>
any regulatory or governmental agency as may, in the opinion of counsel for the
Company, be required. The Plan shall be governed by, and construed and enforced
in accordance with, the provisions of Sections 421, 423 and 424 of the Code and
the substantive laws of the Commonwealth of Massachusetts. In the event of any
inconsistency between such provisions of the Code and any such laws, said
provisions of the Code shall govern to the extent necessary to preserve
favorable federal income tax treatment afforded employee stock purchase plans
under Section 423 of the Code.

                                *        *        *

                                      C-7

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