MAPICS INC, 10-Q, 1998-08-13

MAPICS INC
10-Q, 1998-08-13
PREPACKAGED SOFTWARE

Previous: VISION TEN INC, 10-Q, 1998-08-13

Next: PLUM CREEK TIMBER CO L P, 10-Q, 1998-08-13

<PAGE> 1
===============================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------

FORM 10-Q

---------------

(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________

COMMISSION FILE NUMBER: 000-18674

MAPICS, INC.
(Exact name of registrant as specified in its charter)

GEORGIA 04-2711580
(State of incorporation) (I.R.S. Employer
Identification No.)

5775-D GLENRIDGE DRIVE
ATLANTA, GEORGIA 30328
(Address of principal executive offices)
(404) 705-3000
(Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the Act:
NONE

Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.01 PAR VALUE
(Title of class)
SERIES F JUNIOR PARTICIPATING PREFERRED STOCK PURCHASE RIGHTS
(Title of class)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

The number of shares of the registrant's Common Stock outstanding at August
5, 1998 was 18,706,122.

===============================================================================
<PAGE> 2

MAPICS, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

TABLE OF CONTENTS

<TABLE>
<CAPTION>
ITEM PAGE
NUMBER NUMBER
---------- -------------
<S> <C> <C>
PART I - FINANCIAL INFORMATION

1. Financial Statements:

Consolidated Balance Sheets as of June 30, 1998 and
September 30, 1997.................................................. 3

Consolidated Statements of Operations for the Three Months and the
Nine Months Ended June 30, 1998 and 1997............................ 4

Consolidated Statements of Cash Flows for the Nine Months
Ended June 30, 1998 and 1997........................................ 5

Notes to Consolidated Financial Statements.............................. 6

2. Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................... 9

3. Quantitative and Qualitative Disclosures About Market Risk.............. 16

PART II - OTHER INFORMATION

5. Other Events............................................................ 17

6. Exhibits and Reports on Form 8-K........................................ 17

Signature............................................................... 18

Exhibits Index.......................................................... 19
</TABLE>

2
<PAGE> 3

PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS

MAPICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
1998 1997
--------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................... $ 24,882 $ 5,562
Accounts receivable, net of allowances of $1,907 at
June 30, 1998 and $1,702 at September 30, 1997........... 31,090 30,364
Prepaid expenses and other current assets................... 4,394 2,583
Deferred income taxes, net.................................. 2,432 1,341
--------- ------------
Total current assets................................ 62,798 39,850
Property and equipment, net................................. 4,857 3,562
Computer software costs, net................................ 19,389 16,615
Other intangible assets, net................................ 4,422 4,809
Deferred income taxes, net.................................. 8,086 12,134
--------- ------------
Total assets........................................ $ 99,552 $ 76,970
========= ============

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable............................................ $ 10,503 $ 6,955
Accrued expenses and other current liabilities.............. 22,662 20,174
Deferred revenues........................................... 27,289 25,134
--------- ------------
Total current liabilities........................... 60,454 52,263
--------- ------------

Commitments and contingencies (Note 4)

Shareholders' equity:
Preferred stock, $1.00 par value; 1,000 shares authorized
Series D convertible preferred stock, 225 shares issued
and outstanding (liquidation preference of $16,955)..... 225 225
Series E convertible preferred stock, 100 shares issued
and outstanding (liquidation preference of $7,536)...... 100 100
Common stock, $.01 par value; 50,000 shares authorized;
18,795 shares issued and 18,666 shares outstanding at
June 30, 1998; 18,499 shares issued and outstanding
at September 30, 1997................................... 188 185
Additional paid-in capital.................................. 60,264 56,887
Accumulated deficit......................................... (20,398) (32,690)
Treasury stock-at cost, 129 shares at June 30, 1998......... (1,281) --
--------- ------------
Total shareholders' equity.......................... 39,098 24,707
========= ============
Total liabilities and shareholders' equity.......... $ 99,552 $ 76,970
========= ============
</TABLE>

The accompanying notes are an integral part of these
consolidated financial statements.

3
<PAGE> 4

MAPICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)

THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
----------------------- -----------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues:
License................................................ $ 19,033 $ 12,177 $ 53,976 $ 37,505
Services............................................... 12,983 9,820 36,642 28,657
---------- ---------- ---------- ----------
Total revenues................................. 32,016 21,997 90,618 66,162
---------- ---------- ---------- ----------

Operating expenses:
Cost of license revenues............................... 3,567 2,233 9,796 6,362
Cost of services revenues.............................. 4,057 2,877 10,666 8,178
Selling and marketing.................................. 11,985 7,439 33,103 22,273
Product development.................................... 3,793 2,535 10,849 7,504
General and administrative............................. 2,302 2,052 6,648 6,412
---------- ---------- ---------- ----------
Total operating expenses....................... 25,704 17,136 71,062 50,729
---------- ---------- ---------- ----------

Income from operations................................... 6,312 4,861 19,556 15,433

Interest income, net..................................... 254 -- 421 --
---------- ---------- ---------- ----------

Income before income tax expense ........................ 6,566 4,861 19,977 15,433

Income tax expense....................................... 2,522 1,871 7,685 5,942
---------- ---------- ---------- ----------

Net income............................................... $ 4,044 $ 2,990 $ 12,292 $ 9,491
========== ========== ========== ==========

Net income per common share (basic) (Note 3)............. $ 0.22 $ 0.19 $ 0.66 $ 0.60
========== ========== ========== ==========

Weighted average number of common shares
outstanding (basic) (Note 3)........................ 18,590 15,831 18,527 15,805
========== ========== ========== ==========

Net income per common share (diluted) (Note 3)........... $ 0.17 $ 0.16 $ 0.54 $ 0.49
========== ========== ========== ==========

Weighted average number of common and common
equivalent shares outstanding (diluted) (Note 3).... 23,363 19,262 22,844 19,297
========== ========== ========== ==========
</TABLE>

The accompanying notes are an integral part of these
consolidated financial statements.

4
<PAGE> 5

MAPICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
JUNE 30,
-------------------------------
1998 1997
----------- -----------

<S> <C> <C>
Cash flows from operating activities:
Net income................................................ $ 12,292 $ 9,491
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation........................................... 1,341 1,019
Amortization........................................... 5,596 3,649
Provision for bad debts................................ 400 949
Deferred income taxes.................................. 3,591 (490)
Deferred compensation.................................. 102 --
Changes in operating assets and liabilities:
Accounts receivable.................................. (1,126) (1,225)
Prepaid expenses and other current assets............ (1,811) (1,987)
Accounts payable..................................... 3,548 (82)
Accrued expenses and other current liabilities....... 2,488 3,112
Deferred revenues.................................... 2,155 2,572
----------- -----------
Net cash provided by operating activities......... 28,576 17,008
----------- -----------

Cash flows from investing activities:
Purchases of property and equipment.................. (2,636) (833)
Additions to computer software costs................. (5,308) (3,753)
Purchases of computer software ...................... (2,675) --
----------- -----------
Net cash used for investing activities............ (10,619) (4,586)
----------- -----------

Cash flows from financing activities:
Proceeds from common stock option exercises.......... 2,644 --
Purchases of treasury stock.......................... (1,281) --
Net transfers to Marcam Corporation.................. -- (11,954)
----------- -----------
Net cash provided by (used for) financing activities 1,363 (11,954)
----------- -----------

Net increase in cash and cash equivalents................... 19,320 468
Cash and cash equivalents at beginning of period............ 5,562 378
----------- -----------

Cash and cash equivalents at end of period.................. $ 24,882 $ 846
=========== ===========
</TABLE>

The accompanying notes are an integral part of these
consolidated financial statements.

5
<PAGE> 6

MAPICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

(1) REPORTING ENTITY

MAPICS, Inc. ("MAPICS" or the "Company"), formerly known as Marcam
Corporation, is a leading and growing provider of enterprise resource planning
("ERP") software applications for manufacturing enterprises worldwide. The
Company sells its products primarily through a global network of more than 80
independent affiliates. The Company also provides services to customers in the
form of product support. The Company's primary geographic markets include North
America; the Europe, Middle East and Africa region ("EMEA"); and the Latin
America and Asia Pacific regions.

In April 1997, the Company's Board of Directors authorized management
of the Company to proceed with the separation of Marcam Corporation into two
publicly traded corporations. The separation was designed to enable each
company to better focus on its core markets, to better serve its existing
customers and to better finance its business.

On July 25, 1997, the Company transferred substantially all of the
business, assets and liabilities relating to its PRISM(R), Protean(TM) and
Avantis(TM) product lines, which address the needs of continuous flow process
manufacturers, and $39.0 million in cash to a newly formed wholly owned
subsidiary, Marcam Solutions, Inc. ("Marcam Solutions"). The Company borrowed
$64.0 million from a bank (the "Debt Financing") to finance the $39.0 million
cash transfer to Marcam Solutions and to repay Marcam Corporation's $25.0
million 9.82% Subordinated Notes due 2001.

On July 29, 1997, the Company spun off to its shareholders, in a
tax-free distribution (the "Distribution"), all of the shares of common stock
of Marcam Solutions. In connection with the Distribution, Marcam Corporation
changed its name to MAPICS, Inc. and thereafter continues the operations
related to the MAPICS(R) product line, which addresses the needs of discrete
and batch-process manufacturers. Although the common stock of Marcam Solutions
was distributed to the Company's shareholders, the Distribution was recorded
for accounting purposes as a disposition by Marcam Solutions of the MAPICS
business, due to the relative significance of the PRISM(R), Protean(TM) and
Avantis(TM) product lines.

During August 1997, the Company obtained a senior secured term loan
and revolving credit facility to repay a portion of the borrowings from the
Debt Financing and for general corporate purposes. During August 1997, the
Company completed an underwritten public offering of 6.9 million shares of its
common stock (the "1997 Offering") raising net proceeds of approximately $56.0
million, after deducting offering costs of approximately $6.1 million. The net
proceeds of the 1997 Offering along with borrowings of $6.4 million under the
term loan credit facility and working capital of $1.6 million were used to
repay the $64.0 million of indebtedness from the Debt Financing.

On March 31, 1998, the Company changed its jurisdiction of
incorporation from the Commonwealth of Massachusetts to the State of Georgia
where its principal offices are located.

(2) BASIS OF PRESENTATION

The consolidated financial statements of MAPICS for reporting periods
after the Distribution, including the consolidated balance sheets as of June
30, 1998 and September 30, 1997, the consolidated statements of operations for
the three months and nine months ended June 30, 1998 and the consolidated
statement of cash flows for the nine months ended June 30, 1998, consist solely
of the separate consolidated financial statements of MAPICS, Inc. and its
wholly owned subsidiaries and do not correspond to the historical consolidated
financial statements of Marcam Corporation. All significant intercompany
accounts and transactions have been eliminated in the consolidation.

The statements of operations of MAPICS for the three months and nine
months ended June 30, 1997 and the statement of cash flows for the nine months
ended June 30, 1997 have been prepared using Marcam Corporation's historical
basis in the assets and liabilities and historical results of operations of the
business related to the MAPICS product line. These financial statements are
combined and generally reflect the results of operations and cash flows of
MAPICS as if it were a separate entity for these periods. Certain costs and
expenses presented in the financial statements for the three months and nine
months ended June 30, 1997 have been allocated based on management's estimates
of the cost of services provided to MAPICS by Marcam Corporation. Management

6
<PAGE> 7

believes these allocations are reasonable. However, the financial information
included herein may not necessarily reflect the financial position, results of
operations and cash flows of MAPICS in the future or what they would have been
had MAPICS been a separate entity during the three months and nine months ended
June 30, 1997.

Except for the balance sheet as of September 30, 1997, the
accompanying financial statements are unaudited; however, in the opinion of
management, these financial statements contain all adjustments (consisting of
only normal, recurring adjustments) necessary to present fairly the Company's
financial position, results of operations and cash flows as of the dates and
for the periods indicated. The financial statements have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission (the "Commission"). As permitted by the rules of the Commission
applicable to quarterly reports on Form 10-Q, these notes are condensed and do
not contain all disclosures required by generally accepted accounting
principles. While the Company believes that the disclosures presented are
adequate to make these financial statements not misleading, these financial
statements should be read in conjunction with the Company's audited financial
statements and related notes included in the Company's Annual Report on Form
10-K for the fiscal year ended September 30, 1997 as filed with the Commission.

The Company operates on a fiscal year ending September 30th. The
results of operations for the interim periods presented are not necessarily
indicative of the results to be expected for a full year.

(3) SIGNIFICANT ACCOUNTING POLICIES

(A) REVENUE RECOGNITION

The Company recognizes revenue from software licensing in accordance
with the guidance provided by Statement of Position ("SOP") 91-1, "Software
Revenue Recognition." The Company generally recognizes revenue from the
licensing of its software upon: (i) the signing of a license agreement between
the Company and the ultimate customer; (ii) delivery of the software to the
customer or to a location designated by the customer; (iii) determination that
collection of the related receivable is probable; and (iv) expiration of any
contractual rights of acceptance or return. Under the terms of the Company's
license agreements, the customer is responsible for installation and training.
At the time the Company recognizes revenue from the licensing of software, no
significant vendor obligations remain and the costs of insignificant
obligations, if any, are accrued. Revenue from the licensing of software is
included in license revenues, and the related commissions paid to affiliates
are included in selling and marketing expenses.

The Company recognizes services revenues from its periodic license fees
ratably over the terms of the periodic license agreements. The periodic license
fee, which is typically payable annually in advance, entitles the customer to
continue using the Company's software and to receive certain support services,
as available.

The Company has no commitment to reimburse the affiliates for any
losses incurred.

In October 1997, the American Institute of Certified Public
Accountants ("AICPA") issued SOP 97-2 "Software Revenue Recognition," which
provides guidance on applying generally accepted accounting principles in
recognizing revenue on software transactions and supercedes SOP 91-1. However,
on March 31, 1998, the AICPA issued SOP 98-4, "Deferral of the Effective Date
of a Provision of SOP 97-2," which defers for one year certain provisions of
SOP 97-2. The Company will adopt the provisions of SOP 97-2 on October 1, 1998.
Based upon the Company's interpretation of the information currently available,
management believes that the adoption of SOP 97-2 will not have a material
impact on the Company's financial position, results of operations or financial
statement disclosures.

(B) COMPUTATION AND PRESENTATION OF NET INCOME PER COMMON SHARE

Effective October 1, 1997, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings Per Share." SFAS No. 128
requires the Company to present "basic" and "diluted" earnings per share
("EPS") for all periods presented in the statements of operations. Basic EPS
excludes dilution and is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding for
the period. Diluted EPS reflects the potential dilution that could

7
<PAGE> 8

occur if securities or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of common stock that
then shared in the earnings of the entity.

Prior to the adoption of SFAS No. 128, the Company followed the
provisions of Accounting Principles Board Opinion No. 15, "Earnings Per Share,"
under which "primary" and "fully diluted" EPS were $0.16 and $0.15,
respectively, for the three months ended June 30, 1997, and $0.49 for the nine
months ended June 30, 1997. SFAS No. 128 requires restatement of all prior
period earnings per share data presented in the statements of operations. As
restated, "basic" and "diluted" EPS were $0.19 and $0.16, respectively, for the
three months ended June 30, 1997, and $0.60 and $0.49, respectively, for the
nine months ended June 30, 1997. Net income per common share for the three
months and nine months ended June 30, 1997, was calculated using the capital
structure of Marcam Corporation including the weighted average number of common
and common equivalent shares outstanding, giving effect to the Distribution on
a proforma basis.

The weighted average number of common shares outstanding used to
calculate basic EPS includes the weighted average number of common shares
outstanding plus the number of shares of common stock issued in the 1997
Offering, the proceeds from which were deemed to be used to pay the capital
contribution of $39.0 million to Marcam Solutions, based on the offering price
of $9.00 per share (4,333,000 shares for the three months and nine months ended
June 30, 1997). The weighted average number of common and common equivalent
shares outstanding used to calculate diluted EPS includes the weighted average
number of common shares outstanding plus the number of shares of common stock
issued in the 1997 Offering as described above, plus the weighted average
number of common equivalent shares from the assumed exercise of dilutive stock
options, warrants and convertible preferred stock. The calculations of basic
and diluted EPS are presented in the following table for the periods indicated:

FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------------ ---------------------------
1998 1997 1998 1997
------------------------ ---------------------------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Basic EPS:
Weighted average common shares outstanding............. 18,590 11,498 18,527 11,472
Proforma shares issued in the 1997 Offering............ -- 4,333 -- 4,333
---------- ---------- ---------- ----------
18,590 15,831 18,527 15,805
========== ========== ========== ==========

Net income............................................. $ 4,044 $ 2,990 $ 12,292 $ 9,491
========== ========== ========== ==========

Basic EPS.............................................. $ 0.22 $ 0.19 $ 0.66 $ 0.60
========== ========== ========== ==========

Diluted EPS:
Weighted average common shares outstanding............. 18,590 11,498 18,527 11,472
Proforma shares issued in the 1997 Offering............ -- 4,333 -- 4,333
Common share equivalents:
Convertible preferred stock........................ 3,250 3,250 3,250 3,250
Common stock options............................... 841 83 593 127
Common stock warrants.............................. 682 98 474 115
---------- ---------- ---------- ----------
23,363 19,262 22,844 19,297
========== ========== ========== ==========

Net income............................................. $ 4,044 $ 2,990 $ 12,292 $ 9,491
========== ========== ========== ==========

Diluted EPS............................................ $ 0.17 $ 0.16 $ 0.54 $ 0.49
========== ========== ========== ==========
</TABLE>

(4) COMMITMENTS AND CONTINGENCIES

The Company is subject to legal proceedings and claims which arise in
the normal course of business. While the outcome of these matters cannot be
predicted with certainty, management does not believe the outcome of any of
these legal matters will have a material adverse effect on the Company's future
financial position or results of operations.

<PAGE> 9

ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere herein.
This discussion contains forward-looking statements that involve risks and
uncertainties, such as statements of the Company's plans, objectives,
expectations and intentions. Words such as "may," "would," "could," "will,"
"expect," "estimate," "anticipate," "believe," "intends," "plans," and similar
expressions and variations thereof are intended to identify forward-looking
statements. The Company's actual results could differ materially from those
contemplated by the forward-looking statements contained herein. Factors that
may cause such a difference include but are not limited to those discussed in
the cautionary statements contained herein as well as those discussed in the
section entitled "Management's Discussion and Analysis of Financial Condition
and Results of Operations - Factors Affecting Future Performance" contained in
the Company's Annual Report on Form 10-K for the fiscal year ended September 30,
1997 as filed with the Commission. The cautionary statements made in this report
should be read as being applicable to all related forward-looking statements
wherever they appear in this report.

OVERVIEW

The Company is a leading and growing provider of ERP software applications
for mid-sized discrete and batch-process manufacturing enterprises worldwide.
The Company's products provide an integrated and function-rich ERP solution
with the breadth and depth of applications needed to manage an entire
manufacturing enterprise and its supply chain. The MAPICS XA product line
currently consists of 49 integrated application modules in the areas of
Engineering and Cost Management, Market and Demand Management, Plant Operations
and Logistics Management, Production Resource Planning, Financial Management
and Measurements and Cross Applications Solutions. The Company continually
enhances its product offerings to meet the specific needs of mid-sized
manufacturers and offers such manufacturers the opportunity to gradually
migrate to new technologies, one user at a time if desired, while protecting
their investments in both hardware and software. The Company sells its products
primarily through a global network of more than 80 independent affiliates. The
Company also provides services to customers in the form of product support. The
Company's primary geographic markets include North America, EMEA and the Latin
America and Asia Pacific regions.

The Company generates revenues primarily from licensing its software, which
is conducted principally through a global network of independent affiliates.
These affiliates provide the principal channel through which the Company's
products are distributed to its customers. However, the license agreement is
typically executed directly between the Company and the ultimate customer. When
it first licenses its software, the Company receives both an initial license fee
and a periodic license fee. Initial license fees are recorded as license
revenues and typically recognized upon delivery of the software to the ultimate
customer. Periodic license fees are recorded as services revenue and recognized
ratably over the term of the periodic license agreement. The periodic license
fee, which is typically paid annually in advance, entitles the customer to
continue using the software and to receive certain support services, as
available. If a customer does not renew its periodic license, it is no longer
entitled to use the Company's software. The Company believes this licensing
arrangement provides a source of recurring revenues from its installed base of
customers and enables customers to take advantage of new releases and
enhancements of its software.

The Company's cost structure is designed so that a significant portion of
the Company's costs vary in direct relation to license revenues, particularly
commissions paid to affiliates, which are included in selling and marketing
expenses, and product royalties, which are included in cost of license revenues
The Company's single largest expense is commissions paid to affiliates, which
are based on the revenues they generate from licensing MAPICS products. The
affiliates, rather than the Company, provide the Company's customers with
consulting and implementation services relating to the MAPICS products. As a
result, the Company does not generate revenues from providing consulting and
implementation services nor does it incur the fixed costs inherent in
maintaining a services business, other than those costs associated with customer
support provided by MAPICS.

In January 1998, the Company formally launched MAPICS XA Release 4 ("Release
4"), the latest version of its ERP software solution and its first major release
since becoming an independent company. Release 4 adds six new applications and
enhancements to 22 of the existing applications of MAPICS XA, including enriched
multiple language capabilities, expanded international financial management and
improved multi-facility demand and supply management. These new applications and
enhancements are designed to help companies further streamline their global
communications and information exchange within their own enterprises, across
multinational sites and among their supply-chain partners. The Company believes
that the availability of Release 4 has had a positive effect on license revenues
during the nine months ended June 30, 1998.

With MAPICS XA Release 5 ("Release 5"), scheduled for delivery in the fourth
quarter of calendar 1998, the Company plans to feature euro-currency support
and, in addition to other application enhancements, Release 5 will greatly
expand the products' client/server capabilities through MAPICS Browser, an
interactive inquiry tool which provides users dynamic access to their business
information. In addition, during the fourth quarter of fiscal 1998, the Company
plans to introduce eWorkPlace ("eWP"), a Java-based graphical user interface

<PAGE> 10

for the Company's applications. eWP will provide customers a means to utilize
MAPICS XA throughout their enterprise via the Internet.

The Company is continuing its Java-based development activities to re-host
certain of its applications to run on the Microsoft Windows(R) NT platform as
well as the AS/400 platform. In connection with this development effort, in May
1998, MAPICS and International Business Systems ("IBS") in Sweden announced the
intent to cooperatively develop integrated, component-based business software
using IBM SanFrancisco(TM) in order to deliver a broader suite of applications
sooner and more cost effectively for MAPICS customers. Also, in May 1998, the
Company executed a license agreement with International Business Machines
Corporation ("IBM") to use and redistribute IBM SanFrancisco(TM).

In June 1998, MAPICS executed an agreement with Symix Systems, Inc.
("Symix") to produce and market an Advanced Planning and Scheduling ("APS")
solution. As part of the agreement, MAPICS acquired certain ongoing rights to
use and redistribute the APS software solution and enhancements made thereto
during the term of the agreement. MAPICS and Symix will both contribute product
development resources and personnel to advance the APS product and will market
and distribute the resulting APS solution as separate products in each company's
ERP application suite.

The Company anticipates continued investments in sales and marketing
programs designed to support the Company's independent affiliate channel and to
promote the MAPICS product and the Company. For example, the Company has
developed sales programs which assist its affiliates in hiring persons whose
focus is selling to new MAPICS accounts. As a result of these and other planned
efforts to grow sales of its products, the Company anticipates that sales and
marketing expenditures will continue to increase.

The Company anticipates that core development expenditures will continue to
increase as a result of the Company's plans to enhance its existing offerings to
take advantage of new technologies, offer new applications and business
function, and continue its Java-based development activities to re-host certain
of its applications to run on the Microsoft Windows(R) NT platform as well as
the AS/400 platform.

<PAGE> 11

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the percentage of
total revenues represented by certain line items in the Company's consolidated
statements of operations.

<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ------------------
1998 1997 1998 1997
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenues:
License ...................... 59.4% 55.4% 59.6% 56.7%
Services ..................... 40.6 44.6 40.4 43.3
----- ----- ----- -----
Total revenues .......... 100.0 100.0 100.0 100.0
----- ----- ----- -----
Operating expenses:
Cost of license revenues ..... 11.1 10.2 10.8 9.6
Cost of services revenues .... 12.7 13.1 11.8 12.4
Selling and marketing ........ 37.4 33.8 36.5 33.7
Product development .......... 11.9 11.5 12.0 11.3
General and administrative ... 7.2 9.3 7.3 9.7
----- ----- ----- -----
Total operating expenses 80.3 77.9 78.4 76.7
----- ----- ----- -----

Income from operations ......... 19.7 22.1 21.6 23.3

Interest income, net ........... 0.8 -- 0.5 --
----- ----- ----- -----

Income before income tax expense 20.5 22.1 22.1 23.3

Income tax expense ............. 7.9 8.5 8.5 9.0
----- ----- ----- -----

Net income ..................... 12.6% 13.6% 13.6% 14.3%
===== ===== ===== =====
</TABLE>

THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO THREE MONTHS ENDED JUNE 30,
1997

Revenues. Total revenues increased 45.5% to $32.0 million for the three
months ended June 30, 1998 from $22.0 million for the three months ended June
30, 1997.

License revenues increased 56.3% to $19.0 million for the three months ended
June 30, 1998 from $12.2 million for the three months ended June 30, 1997, due
to a volume increase in license sales to new customers and a volume increase in
license sales to existing customers for additional applications and upgraded
systems. The Company achieved similar license revenue growth in each of its
primary geographic markets during the three months ended June 30, 1998.
Operations in North America, the EMEA region and the combined Latin America/Asia
Pacific region accounted for 68%, 23% and 9% of total license revenues,
respectively, during the three months ended June 30, 1998, compared to 69%, 22%
and 9% respectively, for the three months ended June 30, 1997.

Management believes that future license revenue growth will be most
significant in North America and the EMEA region, and that license revenue
growth in the Company's two smallest geographic markets, Latin America and Asia
Pacific, will be less predictable.

Services revenues increased 32.2% to $13.0 million for the three months
ended June 30, 1998 from $9.8 million for the three months ended June 30, 1997,
primarily due to the increase in the number of customers paying periodic license
fees.

Cost of License Revenues. Cost of license revenues increased 59.7% to $3.6
million for the three months ended June 30, 1998 from $2.2 million for the three
months ended June 30, 1997, primarily as a result of an increase in product
royalty expense due to the increased volume in license revenues and an increase
in amortization expense related to computer software costs. Cost of license
revenues increased as a percentage of license revenues to 18.7% for the three
months ended June 30, 1998 from 18.3% for the three months ended June 30, 1997,
primarily as a result of proportionally higher total product royalty expenses
paid to third party software suppliers ("Solution Partners") due to the mix of
products sold during the three months ended June 30, 1998.

11
<PAGE> 12

Cost of Services Revenues. Cost of services revenues increased 41.0% to $4.1
million for the three months ended June 30, 1998 from $2.9 million for the three
months ended June 30, 1997. Cost of services revenues increased as a percentage
of services revenues to 31.2% for the three months ended June 30, 1998 from
29.3% for the three months ended June 30, 1997. These increases resulted from
the additional distribution and support costs associated with the significant
increase in new customers and the increased volume in fees paid to affiliates
and Solution Partners for providing support services in the EMEA, Latin America
and Asia Pacific regions.

Selling and Marketing. Selling and marketing expenses increased 61.1% to
$12.0 million for the three months ended June 30, 1998 from $7.4 million for the
three months ended June 30, 1997. As a percentage of total revenues, selling and
marketing expenses increased to 37.4% for the three months ended June 30, 1998
from 33.8% for the three months ended June 30, 1997. These increases were due to
increased commissions earned by affiliates on increased license revenues, the
hiring of additional sales and marketing personnel and increased spending on
selling and marketing programs.

Product Development. Overall product development expenses increased 49.6% to
$3.8 million for the three months ended June 30, 1998 from $2.5 million for the
three months ended June 30, 1997. As a percentage of total revenues, product
development expenses increased to 11.9% for the three months ended June 30, 1998
from 11.5% for the three months ended June 30, 1997.

Gross core development expenditures increased 54.1% to $4.7 million for the
three months ended June 30, 1998 from $3.1 million for the three months ended
June 30, 1997. This increase was due to incremental spending on product
development resources and personnel to support the ongoing Java development
effort to re-host certain of the Company's software applications to the
Microsoft Windows(R) NT environment, while continuing efforts to expand the
MAPICS XA product line. The amounts of core development expenditures capitalized
during the three months ended June 30, 1998 and June 30, 1997 were $912,000 and
$550,000, respectively, representing 19.4% and 18.0% of gross core development
expenditures during those periods. The amount of core development expenditures
capitalized as a percentage of gross core development expenditures during the
three months ended June 30, 1998 increased because a higher proportion of these
expenditures had reached the technological feasibility stage as compared to
those for the three months ended June 30, 1997. Gross computer software
translation expenditures decreased 0.7% to $847,000 during the three months
ended June 30, 1998 from $853,000 during the three months ended June 30, 1997.
Translation expenditures are typically project related, and the timing of these
expenditures is subject to change from period to period. The amounts of
translation expenditures capitalized during the three months ended June 30, 1998
and June 30, 1997 were $843,000 and $818,000, respectively, representing 99.5%
and 95.9%, respectively, of gross translation expenditures during those periods.

In addition to the amounts spent on core product development and computer
software translation, the Company spent approximately $2.7 million during June
1998 to acquire certain rights to computer software. The amounts spent to
acquire computer software were capitalized and are included in computer software
costs at June 30, 1998. No amortization for these purchased computer software
costs will be recorded until the purchased software is integrated with the
Company's products and made available for general release to customers.

General and Administrative. General and administrative expenses increased
12.2% to $2.3 million during the three months ended June 30, 1998 from $2.1
million during the three months ended June 30, 1997. These expenses represented
7.2% and 9.3% of total revenues during the three months ended June 30, 1998 and
1997, respectively. The decrease in general and administrative expenses as a
percentage of total revenues reflects the generally fixed nature of the general
and administrative expenses.

Interest Income, Net. Interest income, net, which was $254,000 for the three
months ended June 30, 1998 compared to $0 for the three months ended June 30,
1997, reflects interest earned on cash and cash equivalents net of costs to
maintain the Company's revolving credit facility. Prior to the Distribution,
MAPICS routinely transferred its surplus cash to Marcam Corporation.

Income Tax Expense. Income tax expense represented 38.4% and 38.5% of income
before income tax expense for the three months ended June 30, 1998 and 1997,
respectively.

Net Income. Net income increased 35.3% to $4.0 million, or $0.17 per share
(diluted), for the three months ended June 30, 1998 from $3.0 million, or $0.16
per share (diluted), for the three months ended June 30, 1997.

12
<PAGE> 13

NINE MONTHS ENDED JUNE 30, 1998 COMPARED TO NINE MONTHS ENDED JUNE 30, 1997

Revenues. Total revenues increased 37.0% to $90.6 million for the nine
months ended June 30, 1998 from $66.2 million for the nine months ended June 30,
1997.

License revenues increased 43.9% to $54.0 million for the nine months ended
June 30, 1998 from $37.5 million for the nine months ended June 30, 1997, due to
a volume increase in license sales to existing customers for additional
applications and upgraded systems and a volume increase in license sales to new
customers. The Company achieved similar license revenue growth in each of its
primary geographic markets during the nine months ended June 30, 1998.
Operations in North America, the EMEA region and the combined Latin America/Asia
Pacific region accounted for 67%, 24% and 9% of total license revenues,
respectively, during the nine months ended June 30, 1998, compared to 65%, 25%
and 10% respectively, for the nine months ended June 30, 1997.

Services revenues increased 27.9% to $36.6 million for the nine months ended
June 30, 1998 from $28.7 million for the nine months ended June 30, 1997,
principally due to the increase in the number of customers paying periodic
license fees.

Cost of License Revenues. Cost of license revenues increased 54.0% to $9.8
million for the nine months ended June 30, 1998 from $6.4 million for the nine
months ended June 30, 1997, primarily as a result of an increase in product
royalty expense due to the increased volume in license revenues and an increase
in amortization expense related to computer software costs. Cost of license
revenues increased as a percentage of license revenues to 18.1% for the nine
months ended June 30, 1998 from 17.0% for the nine months ended June 30, 1997,
primarily as a result of proportionally higher total royalty expenses paid to
Solution Partners due to the mix of products sold during the nine months ended
June 30, 1998.

Cost of Services Revenues. Cost of services revenues increased 30.4% to
$10.7 million for the nine months ended June 30, 1998 from $8.2 million for the
nine months ended June 30, 1997. Cost of services revenues increased as a
percentage of total services revenues to 29.1% for the nine months ended June
30, 1998 from 28.5% for the nine months ended June 30, 1997. These increases
resulted from the additional distribution and support costs associated with the
significant increase in new customers and the increased volume in fees paid to
affiliates and Solution Partners for providing support services in the EMEA,
Latin America and Asia Pacific regions.

Selling and Marketing. Selling and marketing expenses increased 48.6% to
$33.1 million for the nine months ended June 30, 1998 from $22.3 million for the
nine months ended June 30, 1997. As a percentage of total revenues, selling and
marketing expenses increased to 36.5% for the nine months ended June 30, 1998
from 33.7% for the nine months ended June 30, 1997. These increases were due to
increased commissions earned by affiliates on increased license revenues, the
hiring of additional sales and marketing personnel and increased spending on
selling and marketing programs.

Product Development. Overall product development expenses increased 44.6% to
$10.8 million for the nine months ended June 30, 1998 from $7.5 million for the
nine months ended June 30, 1997. As a percentage of total revenues, product
development expenses increased to 12.0% for the nine months ended June 30, 1998
from 11.3% for the nine months ended June 30, 1997.

Gross core development expenditures increased 42.5% to $13.0 million for the
nine months ended June 30, 1998 from $9.1 million for the nine months ended June
30, 1997. This increase was due to incremental spending on product development
resources and personnel to support the ongoing Java development effort to
re-host certain of the Company's software applications to the Microsoft
Windows(R) NT environment, while continuing efforts to expand the MAPICS XA
product line. The amounts of core development expenditures capitalized during
the nine months ended June 30, 1998 and June 30, 1997 were $2.1 million and $1.7
million, respectively, representing 16.5% and 18.7% of gross core development
expenditures during those periods. The amount of core development expenditures
capitalized as a percentage of gross core development expenditures during the
nine months ended June 30, 1998 decreased because a lower proportion of these
expenditures had reached the technological feasibility stage as compared to
those for the nine months ended June 30, 1997. Gross computer software
translation expenditures increased 47.6% to $3.2 million during the nine months
ended June 30, 1998 from $2.2 million during the nine months ended June 30,
1997. Translation expenditures are typically project related, and the timing of
these expenditures is subject to change from period to period. The amounts of
translation

13
<PAGE> 14

expenditures capitalized during the nine months ended June 30, 1998 and June 30,
1997 were $3.2 million and $2.1 million, respectively, representing 99.1% and
94.6%, respectively, of gross translation expenditures during those periods.

General and Administrative. General and administrative expenses increased
3.7% to $6.6 million during the nine months ended June 30, 1998 from $6.4
million during the nine months ended June 30, 1997. These expenses represented
7.3% and 9.7% of total revenues during the nine months ended June 30, 1998 and
1997, respectively. The decrease in general and administrative expenses as a
percentage of total revenues reflects the generally fixed nature of the general
and administrative expenses.

Interest Income, Net. Interest income, net, which was $421,000 for the nine
months ended June 30, 1998 compared to $0 for the nine months ended June 30,
1997, reflects interest earned on cash and cash equivalents net of costs to
maintain the Company's revolving credit facility. Prior to the Distribution,
MAPICS routinely transferred its surplus cash to Marcam Corporation.

Income Tax Expense. Income tax expense represented 38.5% of income before
income tax expense for the nine months ended June 30, 1998 and 1997.

Net Income. Net income increased 29.5% to $12.3 million, or $0.54 per share
(diluted), for the nine months ended June 30, 1998 from $9.5 million, or $0.49
per share (diluted), for the nine months ended June 30, 1997.

LIQUIDITY AND CAPITAL RESOURCES

The Company has funded its operations and capital expenditures primarily
with cash generated from operating activities. Prior to the Distribution, any
cash surplus was routinely transferred to Marcam Corporation. As of June 30,
1998, the Company had $24.9 million in cash and cash equivalents and working
capital of $29.6 million, excluding $27.3 million of deferred revenues which are
included in current liabilities. As of September 30, 1997, the Company had $5.6
million in cash and cash equivalents and working capital of $12.7 million,
excluding $25.1 million of deferred revenues. During the nine months ended June
30, 1998, MAPICS increased cash and cash equivalents and working capital,
excluding deferred revenues, by $19.3 million and $16.9 million, respectively.

Net cash provided by operating activities was $28.6 million for the nine
months ended June 30, 1998 compared with $17.0 million for the nine months ended
June 30, 1997, reflecting growth in earnings and cash savings from the favorable
income tax attributes inherited from Marcam Corporation in connection with the
Distribution. Pursuant to a tax sharing agreement between Marcam Corporation and
Marcam Solutions, the Company became entitled to utilize certain favorable
income tax attributes (principally net operating loss carryforwards and tax
credits) of Marcam Corporation immediately following the Distribution. The
Company believes that these favorable income tax attributes will result in cash
savings from the reduction of income taxes payable in future periods as these
favorable income tax attributes are utilized. The utilization of the inherited
net operating loss carryforwards and tax credits from periods ended on or before
September 30, 1996 are limited on an annual basis due to a change in ownership
of Marcam Corporation during fiscal 1996. The Company does not believe that this
limitation will have a significant impact on its ability to utilize the net
operating loss carryforwards or tax credits prior to their expiration.

Net cash used for investing activities was $10.6 million for the nine months
ended June 30, 1998 compared with $4.6 million for the nine months ended June
30, 1997. The Company used cash for investing activities related to computer
software development, computer software translation, and purchases of computer
equipment. During June 1998, the Company spent approximately $2.7 million to
acquire certain rights to computer software. The amounts spent to acquire
computer software were capitalized and are included in computer software costs
at June 30, 1998. No amortization for these purchased computer software costs
will be recorded until the purchased software is integrated with the Company's
products and made available for general release to customers.

14
<PAGE> 15

Net cash provided by financing activities for the nine months ended June 30,
1998 was $1.4 million, reflecting proceeds of $2.6 million from the exercise of
common stock options, less payments of $1.3 million to purchase 128,600 shares
of the Company's common stock pursuant to a stock repurchase plan authorized by
the Company's Board of Directors on December 15, 1997.

Additional borrowings of up to $15.0 million, subject to certain
limitations, are available to the Company under a revolving credit facility with
a bank. Availability of revolving credit loans and the rate of interest thereon
vary depending upon the Company's ability to maintain certain financial ratios.
As of June 30, 1998, the Company met all of those financial ratios, although no
amount was outstanding under the revolving credit facility at any time during
the nine months ended June 30, 1998.

As of June 30, 1998, the Company did not have any material commitments for
capital expenditures.

Management believes that cash and cash equivalents on hand at June 30, 1998,
together with cash flows from operations and available borrowings under the
revolving credit facility, will be sufficient to maintain the current level of
operations for at least the next 12 months.

YEAR 2000 ISSUE

Many existing computer hardware and software systems were designed to use
only two digits to identify a year in date fields (e.g., "98" for "1998"). If
not corrected, these systems and programs could fail or create erroneous results
when working with dates beyond the year 1999. This is commonly referred to as
the "Year 2000 Issue."

In July 1997, the Company received Information Technology Association of
America *2000 certification, validating that the Company's development processes
meet the information technology industry's best software development practices
for addressing the Year 2000 Issue. Early versions of the Company's product
which are no longer supported by the Company are not Year 2000-enabled. The
Company believes that its currently available product, MAPICS XA, is Year
2000-enabled and that no significant additional Year 2000 expenditures will be
required with regard to MAPICS XA. However, there can be no assurance that the
products the Company develops or those of its suppliers or others contain all
necessary date code changes or that errors will not be found in new products or
product enhancements after their commercial release, and the costs to resolve
any such Year 2000 Issues could be significant, depending on the nature and
magnitude of the problem. In addition, it has been widely reported that
"business interruption" litigation may arise out of the Year 2000 Issue, and
while the Company is not aware of any such claims against it and believes that
any such claims will be without merit, the Company is uncertain whether and to
what extent it may be affected by such litigation.

The Company's internal business operations use the MAPICS XA product as well
as third party computer hardware and software systems. While management believes
it has successfully addressed the Year 2000 Issue with the MAPICS XA product it
uses, the Company is uncertain whether all of the third party hardware and
software systems it uses internally are Year 2000-enabled. The Company continues
to work with its vendors and affiliates to verify that their systems are Year
2000-enabled and is currently unaware of any Year 2000 Issue with its internal
systems that would have a material adverse effect on the Company's business,
financial condition or results of operations. However, if any of such third
party systems are not timely enabled or if system conversions are incompatible
with the Company's internal systems, the Year 2000 Issue could have a material
adverse effect on the Company's business, financial condition or results of
operations.

Management believes that the Year 2000 Issue is favorably impacting current
demand for Year 2000-enabled hardware and software products, including those
offered by the Company. However, such demand is likely to decrease once
companies have repaired or replaced their existing systems which are not Year
2000-enabled. Management is unable to quantify the effect that the demand for
Year 2000-enabled products has had on its current business, financial condition
or results of operations and cannot predict the effect that any increase or
decrease in demand will have on its future business, financial condition or
results of operations.

Management has applied a substantial amount of judgement in arriving at the
above assessment of its potential exposure to the Year 2000 Issue. Consequently,
there can be no assurance that the above assessment of the Company's Year 2000
readiness and the magnitude of any remaining costs to resolve any Year 2000
issues will prove to be accurate, and actual results could differ materially
from such assessment.

15
<PAGE> 16

EURO CONVERSION ISSUE

On January 1, 1999, 11 of the 15 member countries of the European Union are
scheduled to establish fixed conversion rates between their existing currencies
and the euro and to adopt the euro as their common legal currency (the "Euro
Conversion"). The Company has established a taskforce to make an internal
analysis of the effects of the Euro Conversion on the Company, but the Company
is currently unsure of the potential impact that the Euro Conversion will have
on its business, financial condition or results of operations, particularly as
the Euro Conversion relates to the Company's European operations.

INFLATION

To date, the Company believes inflation has not had a material impact on the
Company's operations.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

16
<PAGE> 17

PART II: OTHER INFORMATION

ITEM 5: OTHER EVENTS

The proxy to be solicited by management of the Company in connection with
the 1999 Annual Meeting of Shareholders will confer discretionary authority
to vote on any proposals of shareholders of the Company intended to be
presented for consideration at such Annual Meeting that are submitted to the
Company after November 11, 1998.

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

(A) EXHIBITS

EXHIBIT
NO. DESCRIPTION
--- -----------
<S> <C>

10-1 Amended and Restated Revolving Credit and Term Loan Agreement
dated as of August 4, 1997 among MAPICS, Inc., BankBoston,
N.A. and the other lending institutions set forth on Schedule
I thereto, and BankBoston, N.A. as agent

27-1 Financial Data Schedule for the nine months ended June 30,
1998 (for SEC use only)

27-2 Restated Financial Data Schedule for the nine months ended
June 30, 1997 (for SEC use only)

</TABLE>

(B) REPORTS ON FORM 8-K

The Company filed a Current Report on Form 8-K with the Securities and
Exchange Commission dated May 19, 1998, which reported pursuant to Item 9
the issuance of common stock of MAPICS, Inc. in reliance on Regulation S
under the Securities Act of 1933, as amended.

17
<PAGE> 18

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on August 13, 1998.

MAPICS, Inc.

By: /s/ WILLIAM J. GILMOUR
-------------------------------------
William J. Gilmour
Vice President of Finance and
Chief Financial and Accounting Officer

18
<PAGE> 19

EXHIBITS INDEX

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --- -----------

<S> <C>
10-1 Amended and Restated Revolving Credit and Term Loan Agreement dated as of August 4,
1997 among MAPICS, Inc., BankBoston, N.A. and the other lending institutions set forth
on Schedule I thereto and BankBoston, N.A. as agent

27-1 Financial Data Schedule for the nine months ended June 30, 1998 (for SEC use only)

27-2 Restated Financial Data Schedule for the nine months ended June 30, 1997 (for SEC use only)
</TABLE>

<PAGE> 1
EXHIBIT 10-1

REVOLVING CREDIT
AND
TERM LOAN AGREEMENT

Dated as of August 4, 1997

among

MAPICS, INC.

BANKBOSTON, N.A.

and the other lending institutions
set forth on Schedule 1 hereto

and

BANKBOSTON, N.A. as Agent

As Amended through March 31, 1998

<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<S> <C> <C>
1. DEFINITIONS AND RULES OF INTERPRETATION. ........................................................1
1.1. Definitions. .........................................................................1
1.2. Rules of Interpretation. ............................................................17
2. THE REVOLVING CREDIT FACILITY. .................................................................19
2.1. Commitment to Lend. .................................................................19
2.2. Commitment Fee. .....................................................................19
2.3. Reduction of Total Commitment. ......................................................19
2.4. The Revolving Credit Notes. .........................................................20
2.5. Interest on Revolving Credit Loans. .................................................20
2.6. Requests for Revolving Credit Loans. ................................................20
2.7. Conversion Options. .................................................................21
2.7.1. Conversion to Different Type of Revolving Credit Loan. ...................21
2.7.2. Continuation of Type of Revolving Credit Loan. ...........................21
2.7.3. Eurodollar Rate Loans. ...................................................22
2.8. Funds for Revolving Credit Loan. ....................................................22
2.8.1. Funding Procedures. ......................................................22
2.8.2. Advances by Agent. .......................................................22
2.9. Change in Borrowing Base. ...........................................................23
3. REPAYMENT OF THE REVOLVING CREDIT LOANS. .......................................................23
3.1. Maturity. ...........................................................................23
3.2. Mandatory Repayments of Revolving Credit Loans. .....................................23
3.3. Optional Repayments of Revolving Credit Loans. ......................................24
4. THE TERM LOAN. .................................................................................24
4.1. Commitment to Lend. .................................................................24
4.2. The Term Notes. .....................................................................24
4.3. Repayments of the Term Loan. ........................................................25
4.3.1 Schedule of Installment Payments of Principal of Term Loan. ...............25
4.3.2 Proceeds. .................................................................25
4.4. Optional Prepayment of Term Loan. ...................................................25
4.5. Interest on Term Loan. ..............................................................25
4.5.1. Interest Rates. ..........................................................25
4.5.2. Notification by Borrower. ................................................26
4.5.3. Amounts, etc. ............................................................26
5. LETTERS OF CREDIT. .............................................................................26
5.1. Letter of Credit Commitments..........................................................26
5.1.1. Commitment to Issue Letters of Credit. ...................................26
5.1.2. Letter of Credit Applications. ...........................................27
5.1.3. Terms of Letters of Credit. ..............................................27
5.1.4. Reimbursement Obligations of Banks. ......................................27
5.1.5. Participations of Banks. .................................................28
5.2. Reimbursement Obligation of the Borrower. ...........................................28
5.3. Letter of Credit Payments. ..........................................................28
5.4. Obligations Absolute. ...............................................................29
</TABLE>

<PAGE> 3

-ii-

<TABLE>
<S> <C> <C>
5.5. Reliance by Issuer. .................................................................29
5.6. Letter of Credit Fee. ...............................................................30
6. CERTAIN GENERAL PROVISIONS. ....................................................................30
6.1. [Reserved]6.2.........................................................................30
6.2. [Reserved]6.3.........................................................................30
6.3. Funds for Payments. .................................................................30
6.3.1. Payments to Agent. .......................................................30
6.3.2. No Offset, etc. ..........................................................30
6.4. Computations. .......................................................................31
6.5. Inability to Determine Eurodollar Rate. .............................................31
6.6. Illegality. .........................................................................32
6.7. Additional Costs, etc. ..............................................................32
6.8. Capital Adequacy. ...................................................................33
6.9. Certificate. ........................................................................34
6.10. Indemnity. .........................................................................34
6.11. Interest After Default. ............................................................34
6.11.1. Overdue Amounts. ........................................................34
6.11.2. Amounts Not Overdue. ....................................................34
7. COLLATERAL SECURITY AND GUARANTIES. ............................................................34
7.1. Security of Borrower. ...............................................................34
7.2. Guaranties and Security of Domestic Subsidiaries. ...................................35
8. REPRESENTATIONS AND WARRANTIES. ................................................................35
8.1. Corporate Authority. ................................................................35
8.1.1. Incorporation; Good Standing. ............................................35
8.1.2. Authorization. ...........................................................35
8.1.3. Enforceability. ..........................................................35
8.2. Governmental Approvals. .............................................................36
8.3. Title to Properties; Leases. ........................................................36
8.4. Financial Statements and Projections. ...............................................36
8.4.1. Fiscal Year. .............................................................36
8.4.2. Financial Statements. ....................................................36
8.4.3. Projections. .............................................................36
8.5. No Material Changes, etc. ...........................................................37
8.6. Franchises, Patents, Copyrights, etc. ...............................................37
8.7. Litigation. .........................................................................37
8.8. No Materially Adverse Contracts, etc. ...............................................37
8.9. Compliance with Other Instruments, Laws, etc. .......................................38
8.10. Tax Status. ........................................................................38
8.11. No Event of Default. ...............................................................38
8.12. Holding Company and Investment Company Acts. .......................................38
8.13. Absence of Financing Statements, etc. ..............................................38
8.14. Perfection of Security Interest. ...................................................38
8.15. Certain Transactions. ..............................................................39
8.16. Employee Benefit Plans. ............................................................39
8.16.1. In General. .............................................................39
8.16.2. Terminability of Welfare Plans. .........................................39
8.16.3. Guaranteed Pension Plans. ...............................................39
</TABLE>

<S> <C> <C>
8.16.4. Multiemployer Plans. ....................................................40
8.17. Use of Proceeds. ...................................................................40
8.17.1. General. ................................................................40
8.17.2. Regulations U and X. ....................................................40
8.17.3. Ineligible Securities. ..................................................40
8.18. Environmental Compliance. ..........................................................41
8.19. Subsidiaries, etc. .................................................................42
8.20. Bank Accounts. .....................................................................42
8.21. Additional Representations. ........................................................42
8.22. Disclosure. ........................................................................43
9. AFFIRMATIVE COVENANTS OF THE BORROWER. .........................................................43
9.1. Punctual Payment. ...................................................................43
9.2. Maintenance of Office. ..............................................................43
9.3. Records and Accounts. ...............................................................43
9.4. Financial Statements, Certificates and Information. .................................44
9.5. Notices. ............................................................................45
9.5.1. Defaults. ................................................................45
9.5.2. Environmental Events. ....................................................45
9.5.3. Notification of Claim against Collateral. ................................46
9.5.4. Notice of Litigation and Judgments. ......................................46
9.6. Corporate Existence; Maintenance of Properties. .....................................46
9.7. Insurance. ..........................................................................47
9.8. Taxes. ..............................................................................47
9.9. Inspection of Properties and Books, etc. ............................................47
9.9.1. General. .................................................................47
9.9.2. Collateral Reports. ......................................................47
9.9.3. Environmental Assessments. ...............................................48
9.9.4. Communications with Accountants. .........................................48
9.10. Compliance with Laws, Contracts, Licenses, and Permits. ............................48
9.11. Employee Benefit Plans. ............................................................49
9.12. Use of Proceeds. ...................................................................49
9.13. Bank Accounts. .....................................................................49
9.14. New Guarantors. ....................................................................49
9.15. Copyright Registration. ............................................................49
9.16. Further Assurances. ................................................................49
10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. ...................................................50
10.1. Restrictions on Indebtedness. ......................................................50
10.2. Restrictions on Liens. .............................................................50
10.3. Restrictions on Investments. .......................................................52
10.4. Distributions. .....................................................................53
10.5. Merger, Consolidation and Disposition of Assets. ...................................53
10.5.1. Mergers and Acquisitions. ...............................................53
10.5.2. Disposition of Assets. ..................................................53
10.6. Sale and Leaseback. ................................................................53
10.7. Compliance with Environmental Laws. ................................................53
10.8. Subordinated Debt. .................................................................54
10.9. Employee Benefit Plans. ............................................................54
</TABLE>

<PAGE> 5
-iv-

<TABLE>
<S> <C> <C>
10.10. Business Activities. ..............................................................54
10.11. Fiscal Year. ......................................................................54
10.12. Transactions with Affiliates. .....................................................54
10.13. Upstream Limitations. .............................................................55
11. FINANCIAL COVENANTS OF THE BORROWER. ..........................................................55
11.1. Leverage Ratio. ....................................................................55
11.2. Consolidated Operating Cash Flow to Debt Service. ..................................55
11.3. Profitable Operations. .............................................................55
11.4. Quick Ratio. .......................................................................55
11.5. Leases. ............................................................................55
12. CLOSING CONDITIONS. ...........................................................................56
12.1. Loan Documents. ....................................................................56
12.2. Certified Copies of Charter Documents. .............................................56
12.3. Corporate, Action. .................................................................56
12.4. Incumbency Certificate. ............................................................56
12.5. Validity of Liens. .................................................................56
12.6. Perfection Certificates and UCC Search Results. ....................................56
12.7. Certificates of Insurance. .........................................................57
12.8. Agency Account Agreements. .........................................................57
12.9. Borrowing Base Report. .............................................................57
12.10. Accounts Receivable Aging Report. .................................................57
12.11. Solvency Certificate. .............................................................57
12.12. Opinion of Counsel. ...............................................................57
12.13. Disbursement Instructions. ........................................................57
13. CONDITIONS TO ALL BORROWINGS. .................................................................57
13.1. Representations True; No Event of Default. .........................................58
13.2. No Legal Impediment. ...............................................................58
13.3. Governmental Regulation. ...........................................................58
13.4. Proceedings and Documents. .........................................................58
13.5. Borrowing Base Report. .............................................................58
13.6. Commercial Finance Exam. ...........................................................58
14. EVENTS OF DEFAULT; ACCELERATION; ETC. .........................................................59
14.1. Events of Default and Acceleration. ................................................59
14.2. Termination of Commitments. ........................................................62
14.3. Remedies. ..........................................................................62
14.4. Distribution of Collateral Proceeds. ...............................................63
15. SETOFF. .......................................................................................64
16. THE AGENT. ....................................................................................64
16.1. Authorization. .....................................................................64
16.2. Employees and Agents. ..............................................................65
16.3. No Liability. ......................................................................65
16.4. No Representations. ................................................................65
16.4.1. General. ................................................................65
16.4.2. Closing Documentation, etc. .............................................66
16.5. Payments. ..........................................................................66
16.5.1. Payments to Agent. ......................................................66
16.5.2. Distribution by Agent. ..................................................66
</TABLE>

<PAGE> 6
-v-

<TABLE>
<S> <C> <C>
16.5.3. Delinquent Banks. .......................................................67
16.6. Holders of Notes. ..................................................................67
16.7. Indemnity. .........................................................................67
16.8. Agent as Bank. .....................................................................68
16.9. Resignation. .......................................................................68
16.10. Notification of Defaults and Events of Default. ...................................68
16.11. Duties in the Case of Enforcement. ................................................68
17. EXPENSES AND INDEMNIFICATION. .................................................................69
17.1. Expenses. ..........................................................................69
17.2. Indemnification. ...................................................................69
17.3. Survival. ..........................................................................70
18. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION. ................................................70
18.1. Sharing of Information with Section 20 Subsidiary. .................................70
18.2. Confidentiality. ...................................................................70
18.3. Prior Notification. ................................................................71
18.4. Other. .............................................................................71
19. SURVIVAL OF COVENANTS, ETC. ...................................................................71
20. ASSIGNMENT AND PARTICIPATION. .................................................................72
20.1. Conditions to Assignment by Banks. .................................................72
20.2. Certain Representations and Warranties; Limitations; Covenants. ....................72
20.3. Register. ..........................................................................73
20.4. New Notes. .........................................................................74
20.5. Participations. ....................................................................74
20.6. Disclosure. ........................................................................74
20.7. Assignee or Participant Affiliated with the Borrower. ..............................75
20.8. Miscellaneous Assignment Provisions. ...............................................75
20.9. Assignment by Borrower. ............................................................76
21. NOTICES, ETC. .................................................................................76
22. GOVERNING LAW. ................................................................................76
23. HEADINGS. .....................................................................................77
24. COUNTERPARTS. .................................................................................77
25. ENTIRE AGREEMENT, ETC. ........................................................................77
26. WAIVER OF JURY TRIAL. .........................................................................77
27. CONSENTS, AMENDMENTS, WAIVERS, ETC. ...........................................................78
28. SEVERABILITY. .................................................................................78
</TABLE>

<PAGE> 7

REVOLVING CREDIT
AND
TERM LOAN AGREEMENT

This REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as of August 4,
1997, by and among MAPICS, INC. (the "Borrower"), a Massachusetts corporation
having its principal place of business at 5775-D Glenridge Drive, Atlanta,
Georgia 30328 (formerly known as Marcam Corporation), BANKBOSTON, N.A. and the
other lending institutions listed on Schedule 1 hereto and BANKBOSTON, N.A. as
agent for itself and such other lending institutions.

1. DEFINITIONS AND RULES OF INTERPRETATION.

1.1. DEFINITIONS. The following terms shall have the meanings set
forth in this ss.1 or elsewhere in the provisions of this Credit Agreement
referred to below:

Accounts Receivable. All rights of the Borrower or any of its
Subsidiaries which are party to a Security Agreement to payment for goods sold,
leased, licensed or otherwise marketed in the ordinary course of business or
services rendered in the ordinary course of business and all sums of money or
other proceeds due thereon pursuant to transactions with account debtors, except
for that portion of the sum of money or other proceeds due thereon that relate
to sales, use or property taxes in conjunction with such transactions, recorded
on books of account in accordance with generally accepted accounting principles.

Adjustment Date. The first day of the month immediately following the
month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to ss.9.4(d).

Affiliate. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.

Agency Account Agreement. See ss.9.14.1.

Agent's Head Office. The Agent's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time.

Agent. BankBoston, N.A. acting as agent for the Banks.

Agent's Special Counsel. Bingham, Dana & Gould LLP or such other
counsel as may be approved by the Agent.

<PAGE> 8
-2-

Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Borrower's Leverage Ratio, as determined for the
fiscal period of the Borrower and its Subsidiaries ending immediately prior to
the applicable Rate Adjustment Period.

<TABLE>
<CAPTION>
------------------------------------------------------------------
Base Rate Eurodollar Letter of
Loans Rate Loans Credit Fee
Tier Leverage Ratio (basis pts) (basis pts) (basis pts)
------------------------------------------------------------------

------------------------------------------------------------------
<S> <C> <C> <C>
1 Less than 2.00:1.00 25 175 175
------------------------------------------------------------------
2 Less than 2.50:1.00 50 200 200
but greater than or
equal to 2.00:1.00
------------------------------------------------------------------
3 Less than 3.00:1.00 75 225 225
but greater than or
equal to 2.50:1.00
------------------------------------------------------------------
4 Equal to or greater 150 250 250
than 3.00:1.00
------------------------------------------------------------------
</TABLE>

Notwithstanding the foregoing, (a) Loans outstanding and Letter of
Credit Fees payable during the period commencing on the Closing Date through the
date immediately preceding the first Adjustment Date to occur after the fiscal
quarter ending September 30, 1997, the Applicable Margin shall be a Tier 2, and
(b) if the Borrower fails to deliver any Compliance Certificate pursuant to
ss.9.4(d) hereof then, for the period commencing on the next Adjustment Date to
occur subsequent to such failure through the date immediately following the date
on which such Compliance Certificate is delivered, the Applicable Margin shall
be the highest Applicable Margin set forth above.

Asset Sale. Any one or series of related transactions on which any
Person conveys, sells, transfers or otherwise disposes of, directly or
indirectly, any of its properties, businesses or assets (including the sale or
issuance of capital stock of any Subsidiary other than to the Borrower or any
Subsidiary) whether owned on the Closing Date or thereafter acquired.

Assignment and Acceptance. See ss.20.1.

Balance Sheet Date. March 31, 1997.

Banks. BKB and the other lending institutions listed on Schedule 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to ss.20.

<PAGE> 9
-3-

Base Rate. The higher of (i) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (ii) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.

Base Rate Loans. Revolving Credit Loans and all or any portion of the
Term Loan bearing interest calculated by reference to the Base Rate.

BKB. BankBoston, N.A. a national banking association, in its individual
capacity.

BKB Concentration Account. See ss.9.14.1.

Borrower. As defined in the preamble hereto.

Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to ss.9.4(h), as adjusted pursuant
to the provisions below, which is equal to eighty percent (80%) of Eligible
Accounts Receivable for which invoices have been issued and are payable.

The Agent may, in accordance with its standard commercial practices, from time
to time, upon five (5) days' prior notice to the Borrower, reduce the lending
formula with respect to Eligible Accounts Receivable to the extent that the
Agent determines that: (i) the dilution with respect of the Accounts Receivable
for any period has increased in any material respect or may be reasonably
anticipated to increase in any material respect above historical levels, or (ii)
the general creditworthiness of account debtors or other obligors of the
Borrower has declined in any material respect. In determining whether to reduce
the lending formula, the Agent may consider events, conditions, contingencies or
risks which are also considered in determining Eligible Accounts Receivable.

Borrowing Base Report. A Borrowing Base Report signed by the chief
financial officer of the Borrower and in substantially the form of Exhibit A
hereto.

Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.

Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks,

<PAGE> 10
-4-

franchises and good will); provided that Capital Assets shall not include any
item customarily charged directly to expense or depreciated over a useful life
of twelve (12) months or less in accordance with generally accepted accounting
principles.

Capital Expenditures. Amounts paid or Indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with (i) the purchase or lease
by the Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles or (ii) the lease of
any assets by the Borrower or any of its Subsidiaries as lessee under any
synthetic lease referred to in clause (vi) of the definition of the term
"Indebtedness" to the extent that such assets would have been Capital Assets had
the synthetic lease been treated for accounting purposes as a Capitalized Lease.

Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.

CERCLA. See ss.8.18(a).

Closing Date. The first date on which the conditions set forth in ss.12
have been satisfied and any Revolving Credit Loans and the Term Loan are to be
made or any Letter of Credit is to be issued hereunder.

Code. The Internal Revenue Code of 1986.

Collateral. All of the property, rights and interests of the Borrower
and its Subsidiaries that are or are intended to be subject to the security
interests created by the Security Documents.

Commitment. With respect to each Bank, the amount set forth on Schedule
1 hereto as the amount of such Bank's commitment to make Loans to, and to
participate in the issuance, extension and renewal of Letters of Credit for the
account of, the Borrower, as the same may be reduced from time to time; or if
such commitment is terminated pursuant to the provisions hereof, zero.

Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.

Compliance Certificate. A certificate delivered pursuant to ss.9.4(d).

Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting

<PAGE> 11
-5-

principles; provided, however, that such terms shall mean and refer to the
accounts of MAPICS, Inc., combined in accordance with generally accepted
accounting principles on a basis consistent with the audited financial
statements of MAPICS, Inc. contained in the Borrower's Registration Statement on
Form S-3 (No. 333-26203) for all periods that include periods prior to July 30,
1997, unless and until the audited financial statements of the Borrower and its
Subsidiaries are subsequently presented as consolidated in accordance with
generally accepted accounting principles.

Consolidated Financial Obligations. With respect to any fiscal quarter,
an amount equal to the sum of all payments on Indebtedness that become due and
payable or that are to become due and payable during the such fiscal quarter
pursuant to any agreement or instrument to which the Borrower or any of its
Subsidiaries is a party relating to the borrowing of money or the obtaining of
credit or in respect of any Capitalized Lease, or of any synthetic lease
referred to in clause (vi) of the definition of the term "Indebtedness."
(collectively, "Borrowed Money Indebtedness"). For purposes of this definition,
any obligations in respect of Borrowed Money Indebtedness which are on a demand
basis shall be deemed to be due and payable during any fiscal quarter during
which such obligations are outstanding. In addition, for the avoidance of doubt,
Consolidated Financial Obligations do not include (a) trade accounts payable or
accrued liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith; and (b) voluntary repayments
of any amounts outstanding under the Credit Agreement.

Consolidated Current Liabilities. All liabilities and other
Indebtedness of the Borrower and its Subsidiaries, excluding deferred revenue,
on a consolidated basis maturing on demand or within one (1) year from the date
as of which Consolidated Current Liabilities are to be determined, and such
other liabilities as may properly be classified as current liabilities in
accordance with generally accepted accounting principles.

Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income.

Consolidated Net Worth. The excess of (a) all assets of a Person and
its Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles over (b) all liabilities of such Person and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles, and all Indebtedness of such Person and its
Subsidiaries, whether or not so classified, less, to the extent otherwise
includable in the computations of Consolidated Net Worth, any subscriptions
receivable.

Consolidated Operating Cash Flow. For any period, an amount equal to
(i) EBITDA for such period, less (ii) the sum of (A) cash payments for all taxes
paid during such period, plus (B) Capital Expenditures made during such period
to the

<PAGE> 12
-6-

extent permitted by ss.11.6, plus (C) the portion of the costs of software
development required to be capitalized pursuant to FASB Statement No. 86.

Consolidated Quick Assets. All cash and Accounts Receivable of the
Borrower and its Subsidiaries on a consolidated basis that, in accordance with
generally accepted accounting principles, are properly classified as current
assets, provided that accounts receivable shall be included only if good and
collectible as determined by the Borrower in accordance with established
practice consistently applied; and such accounts receivable shall be taken at
their face value less reserves determined to be sufficient in accordance with
generally accepted accounting principles.

Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrower and its
Subsidiaries during such period on all Indebtedness of the Borrower and its
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of any
Capitalized Lease, or any synthetic lease referred to in clause (vi) of the
definition of the term "Indebtedness," and including commitment fees, agency
fees, facility fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money.

Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Loan in accordance with ss.2.7.

Copyright Mortgages. The several Copyright Mortgage and Security
Agreements, dated or to be dated on or prior to the Closing Date, made by the
Borrower and its domestic Subsidiaries, if any, in favor of the Agent and in
form and substance satisfactory to the Banks and the Agent.

Credit Agreement. This Revolving Credit and Term Loan Agreement,
including the Schedules and Exhibits hereto.

Default. See ss.14.1.

Delinquent Bank. See ss.16.5.3.

DeMinimis Subsidiary. See ss.14.1 hereof.

Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.

<PAGE> 13
-7-

Distribution Agreement. The Distribution Agreement dated as of July 17,
1997 between the Borrower and Marcam Solutions, Inc.

Dollars or $. Dollars in lawful currency of the United States of
America.

Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.

Drawdown Date. The date on which any Revolving Credit Loan or the Term
Loan is made or is to be made, and the date on which any Revolving Credit Loan
is converted or continued in accordance with ss.2.7 or all or any portion of the
Term Loan is converted or continued in accordance with ss.4.5(b).

Earnings Before Interest and Taxes. The consolidated earnings (or loss)
from the operations of the Borrower and its Subsidiaries for any period, after
all expenses and other proper charges but before payment or provision for any
income taxes or interest expense for such period, determined in accordance with
generally accepted accounting principles.

EBITDA. With respect to any fiscal period, an amount equal to the sum
of (a) Consolidated Net Income of the Borrower and its Subsidiaries for such
fiscal period, plus (b) in each case to the extent deducted in the calculation
of such Person's Consolidated Net Income and without duplication (i)
amortization and depreciation for such period, plus (ii) tax expense for such
period, plus (iii) Consolidated Total Interest Expense paid or accrued during
such period, all as determined in accordance with generally accepted accounting
principles.

Eligible Accounts Receivable. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) (i) that the Borrower reasonably and in good faith
determines to be collectible; (ii) that are with account debtors or other
obligors that (A) are not Affiliates of the Borrower, (B) purchased or licensed
the goods or services giving rise to the relevant Account Receivable in an arm's
length transaction, (C) are not insolvent or involved in any case or proceeding,
whether voluntary or involuntary, under any bankruptcy, reorganization,
arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar
law of any jurisdiction and (D) are, in the Agent's reasonable judgment in
accordance with standard commercial practices, creditworthy; (iii) that are in
payment of obligations that have been fully performed, do not consist of
progress billings or bill and hold invoices and are not subject to dispute or
any other similar claims that would reduce the cash amount payable therefor;
(iv) that are not subject to any pledge, restriction, security interest or other
lien or encumbrance other than those created by the Loan Documents; (v) in which
the Agent has a valid and perfected first priority security interest; (vi) that
are not outstanding for more than ninety (90) days past the earlier to occur of
(A) the date of the respective invoices therefor and (B) the date of shipment
thereof in the case of goods or the end of the calendar month following the
provision thereof

<PAGE> 14
-8-

in the case of services; (vii) that are not due from an account debtor or other
obligor located in Minnesota or New Jersey unless the Borrower (A) has received
a certificate of authority to do business and is in good standing in such state
or (B) has filed a notice of business activities report with the appropriate
office or agency of such state for the current year; (viii) that are not due
from any single account debtor or other obligor if more than fifteen percent
(15%) of the aggregate amount of all Accounts Receivable owing from such account
debtor or other obligor would otherwise not be Eligible Accounts Receivable;
(ix) that are payable in Dollars; (x) that are not payable from an office
outside of the United States unless the Agent in its discretion approves the
inclusion of such foreign receivables; and (xi) that are not secured by a letter
of credit unless the Agent has a prior, perfected security interest in such
letter of credit. General criteria for Eligible Accounts Receivable may be
established and revised from time to time by the Agent.

Eligible Assignee. Any of (i) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (ii)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (iii) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; and (v) if, but only
if, any Event of Default has occurred and is continuing, any other bank,
insurance company, commercial finance company or other financial institution or
other Person approved by the Agent, such approval not to be unreasonably
withheld.

Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained of contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.

Environmental Laws. See ss.8.18(a).

EPA. See ss.8.18(b).

ERISA. The Employee Retirement Income Security Act of 1974.

ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under ss.414 of the Code.

ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder.

<PAGE> 15
-9-

Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.

Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.

Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1 hereto; thereafter, such other office of such
Bank, if any, that shall be making or maintaining Eurodollar Rate Loans.

Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (i) the arithmetic average of the rates
per annum for each Reference Bank (rounded upwards to the nearest 1/16 of one
percent) of the rate at which such Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two Eurodollar Business Days prior to the beginning of
such Interest Period in the interbank eurodollar market where the eurodollar and
foreign currency and exchange operations of such Eurodollar Lending Office are
customarily conducted, for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount comparable to the amount
of the Eurodollar Rate Loan of such Reference Bank to which such Interest Period
applies, divided by (ii) a number equal to 1.00 minus the Eurocurrency Reserve
Rate, if applicable.

Eurodollar Rate Loans. Revolving Credit Loans and all or any portion of
the Term Loan bearing interest calculated by reference to the Eurodollar Rate.

Event of Default. See ss.14.1.

Fee Letter. The fee letter agreement between the Borrower and the Agent
dated on or prior to the Closing Date.

generally accepted accounting principles. (i) When used in ss.11,
whether directly or indirectly through reference to a capitalized term used
therein, means (A) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal periods ended on the Balance Sheet Date,
and (B) to the extent consistent with such principles, the accounting practice
of the Borrower reflected in its financial statements for the fiscal period
ended on the Balance Sheet Date, and (ii) when used in general, other than as
provided above, means principles that are (A) consistent with the principles
promulgated or adopted by the Financial Accounting Standards

<PAGE> 16
-10-

Board and its predecessors, as in effect from time to time, and (B) consistently
applied with past financial statements of the Borrower adopting the same
principles, provided that in each case referred to in this definition of
"generally accepted accounting principles" a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied, provided, however, that all
references to accounting practices of the Borrower or financial statements of
the Borrower that include periods prior to July 30, 1997 shall refer only to
those, and be consistent with those, as set forth in the audited financial
statements of MAPICS, Inc. contained in the Borrower's Registration Statement on
Form S-3 (No. 333-26203).

Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.

Hazardous Substances. See ss.8.18(b).

Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:

(i) every obligation of such Person for money borrowed,

(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,

(iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person,

(iv) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),

(v) every obligation of such Person under any Capitalized
Lease,

(vi) every obligation of such Person under any lease (a
"synthetic lease") treated as an operating lease under generally
accepted accounting principles and as a loan or financing for U.S.
income tax purposes,

(vii) all sales by such Person of (A) accounts or general
intangibles for money due or to become due, (B) chattel paper,
instruments or

<PAGE> 17
-11-

documents creating or evidencing a right to payment of money or (C)
other receivables (collectively "receivables"), whether pursuant to a
purchase facility or otherwise, other than in connection with the
disposition of the business operations of such Person relating thereto
or a disposition of defaulted receivables for collection and not as a
financing arrangement, and together with any obligation of such Person
to pay any discount, interest, fees, indemnities, penalties, recourse,
expenses or other amounts in connection therewith,

(viii) every obligation of such Person (an "equity related
purchase obligation") to purchase, redeem, retire or otherwise acquire
for value any shares of capital stock of any class issued by such
Person, any warrants, options or other rights to acquire any such
shares, or any rights measured by the value of such shares, warrants,
options or other rights,

(ix) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing agreement
or arrangement (including, without limitation, caps, floors, collars
and similar agreements), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices,

(x) every obligation in respect of Indebtedness of any
other entity (including any partnership in which such Person is a
general partner) to the extent that such Person is liable therefor as a
result of such Person's ownership interest in or other relationship
with such entity, except to the extent that the terms of such
Indebtedness provide that such Person is not liable therefor and such
terms are enforceable under applicable law,

(xi) every obligation, contingent or otherwise, of such
Person guaranteeing, or having the economic effect of guarantying or
otherwise acting as surety for, any obligation of a type described in
any of clauses (i) through (x) (the "primary obligation") of another
Person (the "primary obligor"), in any manner, whether directly or
indirectly, and including, without limitation, any obligation of such
Person (A) to purchase or pay (or advance or supply funds for the
purchase of) any security for the payment of such primary obligation,
(B) to purchase property, securities or services for the purpose of
assuring the payment of such primary obligation, or (C) to maintain
working capital, equity capital or other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor
to pay such primary obligation.

The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (v) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (w) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (x) any sale of

<PAGE> 18
-12-

receivables shall be the amount of unrecovered capital or principal investment
of the purchaser (other than the Borrower or any of its wholly-owned
Subsidiaries) thereof, excluding amounts representative of yield or interest
earned on such investment, (y) any synthetic lease shall be the stipulated loss
value, termination value or other equivalent amount and (z) any equity related
purchase obligation shall be the maximum fixed redemption or purchase price
thereof inclusive of any accrued and unpaid dividends to be comprised in such
redemption or purchase price.

Ineligible Securities. Securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1993 (12 U.S.C. ss.24, Seventh), as amended.

Interest Payment Date. (i) As to any Base Rate Loan, the last day of
the calendar quarter with respect to interest accrued during such calendar
quarter, including, without limitation, the calendar quarter which includes the
Drawdown Date of such Base Rate Loan; and (ii) as to any Eurodollar Rate Loan in
respect of which the Interest Period is (A) 3 months or less, the last day of
such Interest Period and (B) more than 3 months, the date that is 3 months from
the first day of such Interest Period and, in addition, the last day of such
Interest Period.

Interest Period. With respect to each Revolving Credit Loan or all or
any relevant portion of the Term Loan, (i) initially, the period commencing on
the Drawdown Date of such Loan and ending on the last day of one of the periods
set forth below, as selected by the Borrower in a Loan Request or as otherwise
required by the terms of this Credit Agreement (A) for any Base Rate Loan, the
last day of the calendar quarter; and (B) for any Eurodollar Rate Loan, 1, 2, 3,
or 6 months; and (ii) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Revolving Credit Loan or all
or such portion of the Term Loan and ending on the last day of one of the
periods set forth above, as selected by the Borrower in a Conversion Request;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:

(a) if any Interest Period with respect to a Eurodollar Rate
Loan would otherwise end on a day that is not a Eurodollar Business
Day, that Interest Period shall be extended to the next succeeding
Eurodollar Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Eurodollar
Business Day;

(b) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;

(c) if the Borrower shall fail to give notice as provided in
ss.2.7, the Borrower shall be deemed to have requested a conversion of
the affected Eurodollar Rate Loan to a Base Rate Loan and the
continuance of all Base

<PAGE> 19
-13-

Rate Loans as Base Rate Loans on the last day of the then current
Interest Period with respect thereto;

(d) any Interest Period relating to any Eurodollar Rate Loan
that begins on the last Eurodollar Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the
last Eurodollar Business Day of a calendar month; and

(e) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date (if comprising a Revolving Credit
Loan) or the Term Loan Maturity Date (if comprising the Term Loan or a
portion thereof) shall end on the Revolving Credit Loan Maturity Date
or (as the case may be) the Term Loan Maturity Date.

Interim Concentration Account. See ss.9.14.1.

Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.

Letter of Credit. See ss.5.1.1.

Letter of Credit Application. See ss.5.6.

Letter of Credit Fee. See ss.5.1.1.

Letter of Credit Participation. See ss.5.1.4.

Leverage Ratio. For any fiscal quarter, the ratio of (a) Total Funded
Indebtedness of the Borrower and its Subsidiaries outstanding on the last day of
such quarter to (b) the EBITDA of the Borrower and its Subsidiaries for the
period of four consecutive fiscal quarters (treated as a single accounting
period) ended on such date.

<PAGE> 20
-14-

Loan Documents. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit and the Security Documents.

Loan Request. See ss.2.6.

Loans. The Revolving Credit Loans and the Term Loan.

Local Account. See ss.9.14.1.

Majority Banks. As of any date, the Banks holding at least sixty-six
and two-thirds percent (66 2/3%) of the outstanding principal amount of the
Notes on such date; and if no such principal is outstanding, the Banks whose
aggregate Commitments constitutes at least sixty-six and two-thirds percent (66
2/3%) of the Total Commitment.

Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.

Multiemployer Plan. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.

Net Cash Proceeds. With respect to any sale of stock, partnership
interests or other equity issuances, the excess of the gross cash proceeds
received by such Person for such issuance after deduction of all reasonable and
customary transaction expenses (including without limitation, underwriting
discounts and commissions) actually incurred in connection with such a sale or
other issuance.

Net Cash Sale Proceeds. The net cash proceeds received by a Person in
respect of any Asset Sale, less the sum of (a) all reasonable out-of-pocket
fees, commissions and other reasonably and customary expenses actually incurred
in connection with such Asset Sale, including the amount of income, franchise,
sales and other applicable taxes required to be paid by such Person in
connection with such Asset Sale, and (b) the aggregate amount of cash so
received by such Person which is required to be used to retire (in whole or in
part) any Indebtedness (other than under the Loan Documents) of such Person
permitted by this Credit Agreement that was secured by a lien or security
interest permitted by this Credit Agreement having priority over the liens and
security interests (if any) of the Agent (for the benefit of the Agent and the
Banks) with respect to such assets transferred and which is required to be
repaid in whole or in part (which repayment, in the case of any other revolving
credit arrangement or multiple advance arrangement, reduces the commitment
thereunder) in connection with such Asset Sale.

Non-Material Subsidiary. At the relevant time of determination, any
Subsidiary with a Consolidated Net Worth of less than $500,000

Notes. The Term Notes and the Revolving Credit Notes.

<PAGE> 21
-15-

Obligations. All indebtedness, obligations and liabilities of any of
the Borrower and its Subsidiaries to any of the Banks and the Agent,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Loans made or Reimbursement Obligations incurred or any of
the Notes, Letter of Credit Application, Letter of Credit or other instruments
at any time evidencing any thereof or under any interest rate swap, cap or other
hedging agreements between the Borrower and any of the Banks.

Operating Account. See ss.2.6.2.

outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.

PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.

Perfection Certificates. The Perfection Certificates as defined in the
Security Agreements.

Permitted Liens. Liens, security interests and other encumbrances
permitted by ss.10.2.

Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.

Rate Adjustment Period. See the definition of Applicable Margin.

RCRA. See ss.8.18(a).

Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.

Record. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.

Reference Bank. BKB

Reimbursement Obligation. The Borrower's obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in ss.5.2.

<PAGE> 22
-16-

Rental Obligations. All present or future obligations of the Borrower
or any of its Subsidiaries under any rental agreements or leases of real or
personal property, other than (i) obligations that can be terminated by the
giving of notice without liability to the Borrower or such Subsidiary in excess
of the liability for rent due as of the date on which such notice is given and
under which no penalty or premium is paid as a result of any such termination,
and (ii) obligations in respect of any Capitalized Leases or any synthetic
leases referred to in clause (vi) of the definition of the term "Indebtedness".

Reserves. As determined by the Agent, such amounts as the Agent may
from time to time establish and revise (a) to reflect events, conditions,
contingencies or risks which do or may (i) adversely affect either (A) any
Collateral, the rights of the Agent or any of the Banks in any Collateral or its
value or (B) the security interest and other rights of the Agent or any of the
Banks in the Collateral (including the enforceability, perfection and priority
thereof) or (ii) adversely affect in any material respect the assets (other than
any Collateral) or business or financial condition of the Borrower or any of its
Subsidiaries or (b) to reflect the belief of the Agent that any Borrowing Base
Report or other collateral report or financial information furnished by or on
behalf of the Borrower to the Agent or any of the Banks is or may have been
incomplete, inaccurate or misleading in any material respect.

Revolving Credit Loan Maturity Date. June 30, 2000.

Revolving Credit Loans. Revolving credit loans made or to be made by
the Banks to the Borrower pursuant to ss.2.

Revolving Credit Note Record. A Record with respect to a Revolving
Credit Note.

Revolving Credit Notes. See ss.2.4.

SARA. See ss.8.18(a).

Section 20 Subsidiary. A Subsidiary of the bank holding company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.

Security Agreements. The several Security Agreements, dated or to be
dated on or prior to the Closing Date, between the Borrower and its domestic
Subsidiaries and the Agent and in form and substance satisfactory to the Banks
and the Agent.

Security Documents. The Security Agreements, the Trademark Assignments,
the Copyright Mortgages and all other instruments and documents, including
without limitation Uniform Commercial Code financing statements, required to be
executed or delivered pursuant to any Security Document.

<PAGE> 23
-17-

Subordinated Debt. Unsecured Indebtedness of the Borrower or any of its
Subsidiaries that is expressly subordinated and made junior to the payment and
performance in full of the Obligations, and evidenced as such by a written
instrument containing subordination provisions in form and substance approved by
the Agent and the Majority Banks in writing.

Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.

Term Loan. The term loan made or to be made by the Banks to the
Borrower on the Closing Date in the aggregate principal amount of $15,000,000
pursuant to ss.4.1.

Term Loan Maturity Date. September 30, 2000.

Term Notes. See ss.4.2.

Term Note Record. A Record with respect to a Term Note.

Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.

Total Funded Indebtedness. All Indebtedness of the Borrower and its
Subsidiaries for borrowed money, purchase money Indebtedness and with respect to
Capitalized Leases, determined on a consolidated basis in accordance with
generally accepted accounting principles.

Trademark Assignments. The several Trademark Assignments, dated or to
be dated on or prior to the Closing Date, made by the Borrower and its domestic
Subsidiaries, if any, in favor of the Agent and in form and substance
satisfactory to the Banks and the Agent.

Type. As to any Revolving Credit Loan or all or any portion of the Term
Loan, its nature as a Base Rate Loan or a Eurodollar Rate Loan.

Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Agent in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.

Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, ss.5.2.

Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote

<PAGE> 24
-18-

for the election of a majority of the directors (or persons performing similar
functions) of the corporation, association, trust or other business entity
involved, whether or not the right so to vote exists by reason of the happening
of a contingency.

1.2. RULES OF INTERPRETATION.

(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.

(b) The singular includes the plural and the plural includes
the singular.

(d) A reference to any Person includes its permitted
successors and permitted assigns.

(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer; provided, however, that, in the case of the Borrower and its
Subsidiaries, applied on a basis consistent with that set forth in the
audited financial statements of MAPICS, Inc. contained in the
Borrower's Registration Statement on Form S-3 (No. 333-26203).
Accounting terms referring to the Borrower and its Subsidiaries (i)
shall give retroactive effect to the transactions contemplated by the
Distribution Agreement for all fiscal periods, and (ii) shall not
include any payments with respect to or Indebtedness under the
Promissory Note dated as of July 25, 1997 made by the Borrower to
BankBoston, N.A.

(f) The words "include", "includes" and "including" are not
limiting.

(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.

(h) Reference to a particular "ss." refers to that section of
this Credit Agreement unless otherwise indicated.

(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.

<PAGE> 25
-19-

(j) Unless otherwise expressly indicated, in the computation
of periods of time from a specified date to a later specified date, the
word "from" means "from and including," the words "to" and "until" each
mean "to but excluding," and the word "through" means "to and
including."

(k) This Credit Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the
same or similar matters. All such limitations, tests and measurements
are, however, cumulative and are to be performed in accordance with the
terms thereof.

(l) This Credit Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to,
among others, the Agent and the Borrower and are the product of
discussions and negotiations among all parties. Accordingly, this
Credit Agreement and the other Loan Documents are not intended to be
construed against the Agent or any of the Banks merely on account of
the Agent's or any Bank's involvement in the preparation of such
documents.

(m) Notwithstanding any other provision of this Credit
Agreement, the other Loan Documents and the Security Documents, the
Borrower shall not be prohibited from completing the transactions
contemplated by the Distribution Agreement.

2. THE REVOLVING CREDIT FACILITY.

2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Revolving Credit Loan Maturity Date
upon notice by the Borrower to the Agent given in accordance with ss.2.6, such
sums as are requested by the Borrower up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested) at any one time equal
to such Bank's Commitment minus such Bank's Commitment Percentage of the sum of
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations, provided
that the sum of the outstanding amount of the Revolving Credit Loans (after
giving effect to all amounts requested) plus the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not at any time exceed the lesser of (i)
the Total Commitment and (ii) the Borrowing Base. The Revolving Credit Loans
shall be made pro rata in accordance with each Bank's Commitment Percentage.
Each request for a Revolving Credit Loan hereunder shall constitute a
representation and warranty by the Borrower that the conditions set forth in
ss.12 and ss.13, in the case of the initial Revolving Credit Loans to be made on
the Closing Date, and ss.13, in the case of all other Revolving Credit Loans,
have been satisfied on the date of such request.

2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the rate of three-eighths of one percent (.375%)
per

<PAGE> 26
-20-

annum on the average daily amount during each calendar quarter or portion
thereof from the Closing Date to the Revolving Credit Loan Maturity Date by
which the Total Commitment minus the sum of the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations exceeds the outstanding amount of Revolving
Credit Loans during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit Maturity
Date or any earlier date on which the Commitments shall terminate.

2.3. REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right
at any time and from time to time upon five (5) Business Days prior written
notice to the Agent to reduce by $5,000,000 or an integral multiple of
$1,000,000 in excess thereof or terminate entirely the Total Commitment,
whereupon the Commitments of the Banks shall be reduced pro rata in accordance
with their respective Commitment Percentages of the amount specified in such
notice or, as the case may be, terminated. Promptly after receiving any notice
of the Borrower delivered pursuant to this ss.2.3, the Agent will notify the
Banks of the substance thereof. Upon the effective date of any such reduction or
termination, the Borrower shall pay to the Agent for the respective accounts of
the Banks the full amount of any commitment fee then accrued on the amount of
the reduction. No reduction or termination of the Commitments may be reinstated.

2.4. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of Exhibit B hereto (each a "Revolving Credit Note"), dated as of the Closing
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's Revolving Credit Note Record reflecting the
making of such Revolving Credit Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Revolving Credit Loans set forth on such
Bank's Revolving Credit Note Record shall be prima facie evidence of the
principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on such Bank's Revolving
Credit Note Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.

2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided
in ss.6.11,

(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of

<PAGE> 27
-21-

the Interest Period with respect thereto at the rate per annum equal to
the Base Rate plus the Applicable Margin.

(b) Each Eurodollar Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the rate per annum
equal to the Eurodollar Rate determined for such Interest Period plus
the Applicable Margin.

(c) The Borrower promises to pay interest on each Revolving
Credit Loan in arrears on each Interest Payment Date with respect
thereto.

2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give to
the Agent written notice in the form of Exhibit C hereto (or telephonic notice
confirmed in a writing in the form of Exhibit C hereto) of each Revolving Credit
Loan requested hereunder (a "Loan Request") no less than (i) one (1) Business
Day prior to the proposed Drawdown Date of any Base Rate Loan and (ii) three (3)
Eurodollar Business Days prior to the proposed Drawdown Date of any Eurodollar
Rate Loan. Each such notice shall specify (A) the principal amount of the
Revolving Credit Loan requested, (B) the proposed Drawdown Date of such
Revolving Credit Loan, (C) the Interest Period for such Revolving Credit Loan
and (D) the Type of such Revolving Credit Loan. Promptly upon receipt of any
such notice, the Agent shall notify each of the Banks thereof. Each Loan Request
shall be irrevocable and binding on the Borrower and shall obligate the Borrower
to accept the Revolving Credit Loan requested from the Banks on the proposed
Drawdown Date. Each Loan Request shall be in a minimum aggregate amount of
$1,000,000 or an integral multiple thereof.

2.7. CONVERSION OPTIONS.

2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.
The Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type,
provided that (i) with respect to any such conversion of a Revolving
Credit Loan to a Base Rate Loan, the Borrower shall give the Agent at
least one (1) Business Day prior written notice of such election; (ii)
with respect to any such conversion of a Base Rate Loan to a Eurodollar
Rate Loan, the Borrower shall give the Agent at least three (3)
Eurodollar Business Days prior written notice of such election; (iii)
with respect to any such conversion of a Eurodollar Rate Loan into a
Revolving Credit Loan of another Type, such conversion shall only be
made on the last day of the Interest Period with respect thereto and
(iv) no Loan may be converted into a Eurodollar Rate Loan when any
Default or Event of Default has occurred and is continuing. On the date
on which such conversion is being made each Bank shall take such action
as is necessary to transfer its Commitment Percentage of such Revolving
Credit Loans to its Domestic Lending Office or its Eurodollar Lending
Office, as the case may be. All or any part of outstanding Revolving
Credit Loans of any Type may be converted into a Revolving Credit Loan
of another Type as provided

<PAGE> 28
-22-

herein, provided that any partial conversion shall be in an aggregate
principal amount of $1,000,000 or a whole multiple thereof. Each
Conversion Request relating to the conversion of a Revolving Credit
Loan to a Eurodollar Rate Loan shall be irrevocable by the Borrower.

2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any
Revolving Credit Loan of any Type may be continued as a Revolving
Credit Loan of the same Type upon the expiration of an Interest Period
with respect thereto by compliance by the Borrower with the notice
provisions contained in ss.2.7.1; provided that no Eurodollar Rate Loan
may be continued as such when any Default or Event of Default has
occurred and is continuing, but shall be automatically converted to a
Base Rate Loan on the last day of the first Interest Period relating
thereto ending during the continuance of any Default or Event of
Default of which officers of the Agent active upon the Borrower's
account have actual knowledge. In the event that the Borrower fails to
provide any such notice with respect to the continuation of any
Eurodollar Rate Loan as such, then such Eurodollar Rate Loan shall be
automatically converted to a Base Rate Loan on the last day of the
first Interest Period relating thereto. The Agent shall notify the
Banks promptly when any such automatic conversion contemplated by this
ss.2.7 is scheduled to occur.

2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from
Eurodollar Rate Loans shall be in such amounts and be made pursuant to
such elections so that, after giving effect thereto, the aggregate
principal amount of all Eurodollar Rate Loans having the same Interest
Period shall not be less than $5,000,000 or a whole multiple of
$1,000,000 in excess thereof. In addition, there shall not be more than
ten (10) Eurodollar Rate Loans outstanding at any one time.

2.8. FUNDS FOR REVOLVING CREDIT LOAN.

2.8.1. FUNDING PROCEDURES. Not later than 11:00 a.m. (Boston
time) on the proposed Drawdown Date of any Revolving Credit Loans, each
of the Banks will make available to the Agent, at the Agent's Head
Office, in immediately available funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Revolving Credit
Loans. Upon receipt from each Bank of such amount, and upon receipt of
the documents required by ss.ss.12 and 13 and the satisfaction of the
other conditions set forth therein, to the extent applicable, the Agent
will make available to the Borrower the aggregate amount of such
Revolving Credit Loans made available to the Agent by the Banks. The
failure or refusal of any Bank to make available to the Agent at the
aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the requested Revolving Credit Loans shall not
relieve any other Bank from its several obligation hereunder to make
available to the Agent the amount of such other Bank's Commitment
Percentage of any requested Revolving Credit Loans.

<PAGE> 29

-23-

2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to
the contrary by any Bank prior to a Drawdown Date, assume that such
Bank has made available to the Agent on such Drawdown Date the amount
of such Bank's Commitment Percentage of the Revolving Credit Loans to
be made on such Drawdown Date, and the Agent may (but it shall not be
required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the
Agent such amount on a date after such Drawdown Date, such Bank shall
pay to the Agent on demand an amount equal to the product of (i) the
average computed for the period referred to in clause (iii) below, of
the weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, times
(ii) the amount of such Bank's Commitment Percentage of such Revolving
Credit Loans, times (iii) a fraction, the numerator of which is the
number of days that elapse from and including such Drawdown Date to the
date on which the amount of such Bank's Commitment Percentage of such
Revolving Credit Loans shall become immediately available to the Agent,
and the denominator of which is 365. A statement of the Agent submitted
to such Bank with respect to any amounts owing under this paragraph
shall be prima facie evidence of the amount due and owing to the Agent
by such Bank. If the amount of such Bank's Commitment Percentage of
such Revolving Credit Loans is not made available to the Agent by such
Bank within three (3) Business Days following such Drawdown Date, the
Agent shall be entitled to recover such amount from the Borrower on
demand, with interest thereon at the rate per annum applicable to the
Revolving Credit Loans made on such Drawdown Date.

2.9. CHANGE IN BORROWING BASE. The Borrowing Base shall be determined
monthly (or at such other interval as may be specified pursuant to ss.9.4(f)) by
the Agent by reference to the Borrowing Base Report delivered to the Banks and
the Agent pursuant to ss.9.4(f). The Agent shall give to the Borrower written
notice of any change in the Borrowing Base determined by the Agent. In the case
of a reduction in the lending formula with respect to Eligible Accounts
Receivable, such notice shall be effective 5 Business Days after its receipt by
the Borrower, and in the case of any change in the general criteria for Eligible
Accounts Receivable, such notice shall be effective upon its receipt by the
Borrower. Prior to the time that such notice becomes effective the Borrowing
Base shall be computed as it would have been computed in the absence of such
notice.

3. REPAYMENT OF THE REVOLVING CREDIT LOANS.

3.1. MATURITY. The Borrower promises to pay on the Revolving Credit
Loan Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.

3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time the
sum of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the lesser of

<PAGE> 30
-24-

(i) the Total Commitment and (ii) the Borrowing Base, then the Borrower shall
immediately pay the amount of such excess to the Agent for the respective
accounts of the Banks for application: first, to any Unpaid Reimbursement
Obligations; second, to the Revolving Credit Loans; and third, to provide to the
Agent cash collateral for Reimbursement Obligations as contemplated by ss.5.2(b)
and (c). Each payment of any Unpaid Reimbursement Obligations or prepayment of
Revolving Credit Loans shall be allocated among the Banks, in proportion, as
nearly as practicable, to each Reimbursement Obligation or (as the case may be)
the respective unpaid principal amount of each Bank's Revolving Credit Note,
with adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.

3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, provided that any full or partial prepayment of the outstanding amount
of any Eurodollar Rate Loans pursuant to this ss.3.3 may be made only on the
last day of the Interest Period relating thereto. The Borrower shall give the
Agent, no later than 10:00 a.m., Boston time, at least one (1) Business Day
prior written notice of any proposed prepayment pursuant to this ss.3.3 of Base
Rate Loans, and three (3) Eurodollar Business Days notice of any proposed
prepayment pursuant to this ss.3.3 of Eurodollar Rate Loans, in each case
specifying the proposed date of prepayment of Revolving Credit Loans and the
principal amount to be prepaid. Each such partial prepayment of the Revolving
Credit Loans shall be in an integral multiple of $1,000,000, shall be
accompanied by the payment of accrued interest on the principal prepaid to the
date of prepayment and shall be applied, in the absence of instruction by the
Borrower, first to the principal of Base Rate Loans and then to the principal of
Eurodollar Rate Loans, at the Agent's option. Each partial prepayment shall be
allocated among the Banks, in proportion, as nearly as practicable, to the
respective unpaid principal amount of each Bank's Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior repayments not
exactly in proportion.

4. THE TERM LOAN.

4.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each Bank agrees to lend to the Borrower on the
Closing Date the amount of its Commitment Percentage of the principal amount of
$15,000,000.

4.2. THE TERM NOTES. The Term Loan shall be evidenced by separate
promissory notes of the Borrower in substantially the form of Exhibit D hereto
(each a "Term Note"), dated the Closing Date and completed with appropriate
insertions. One Term Note shall be payable to the order of each Bank in a
principal amount equal to such Bank's Commitment Percentage of the Term Loan and
representing the obligation of the Borrower to pay to such Bank such principal
amount or, if less, the outstanding amount of such Bank's Commitment Percentage
of the Term Loan, plus interest accrued thereon, as set forth below. The
Borrower irrevocably

<PAGE> 31
-25-

authorizes each Bank to make or cause to be made a notation on such Bank's Term
Note Record reflecting the original principal amount of such Bank's Commitment
Percentage of the Term Loan and, at or about the time of such Bank's receipt of
any principal payment on such Bank's Term Note, an appropriate notation on such
Bank's Term Note Record reflecting such payment. The aggregate unpaid amount set
forth on such Bank's Term Note Record shall be prima facie evidence of the
principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on such Bank's Term Note
Record shall not affect the obligations of the Borrower hereunder or under any
Term Note to make payments of principal of and interest on any Term Note when
due.

4.3. REPAYMENTS OF THE TERM LOAN.

4.3.1 SCHEDULE OF INSTALLMENT PAYMENTS OF PRINCIPAL OF TERM
LOAN. The Borrower promises to pay to the Agent for the account of the
Banks the principal amount of the Term Loan in eight (8) consecutive
quarterly payments of $1,250,000, such installments to be due and
payable on the last day of each calendar quarter of each calendar year,
commencing on September 30, 1998, with a final payment on the Term Loan
Maturity Date in an amount equal to the unpaid balance of the Term
Loan.

4.3.2 PROCEEDS. Concurrently with the receipt by the Borrower
or any of its Subsidiaries of (a) Net Cash Sale Proceeds from Assets
Sales or other dispositions of assets (other than the sale or
disposition of assets in the ordinary course of business consistent
with past practices), (b) Net Cash Proceeds from the sale of stock,
partnership interests or other equity issuances of the Borrower or any
of its Subsidiaries or (c) cash proceeds received from insurance claims
received by the Borrower or any of its Subsidiaries which have not been
applied by the Borrower or such Subsidiary within 180 days of receipt
by such Person of such proceeds (provided, however, if a Default or
Event of Default has occurred and is continuing, such proceeds shall be
immediately paid to the Agent), the Borrower shall pay to the Agent for
the respective accounts of the Banks an amount equal to 100% of such
proceeds, to be applied against the scheduled installments of principal
on the Term Loan in the inverse order of maturity.

4.4. OPTIONAL PREPAYMENT OF TERM LOAN. The Borrower shall have the
right at any time to prepay the Term Notes on or before the Term Loan Maturity
Date, as a whole, or in part, upon not less than five (5) Business Days prior
written notice to the Agent, without premium or penalty, provided that (i) each
partial prepayment shall be in the principal amount of $1,000,000.00 or an
integral multiple thereof, (ii) any portion of the Term Loan bearing interest at
the Eurodollar Rate prepaid pursuant to this ss.4.4 except on the last day of
the Interest Period relating thereto shall be subject to the indemnity
requirement in ss.6.10, and (iii) each partial prepayment shall be allocated
among the Banks, in proportion, as nearly as practicable, to the respective
outstanding amount of each Bank's Term Note, with adjustments to the extent
practicable to equalize any prior prepayments not exactly in proportion. Any
prepayment of principal of the Term Loan shall include all

<PAGE> 32
-26-

interest accrued to the date of prepayment and shall be applied against the
scheduled installments of principal due on the Term Loan in the inverse order of
maturity. No amount repaid with respect to the Term Loan may be reborrowed as a
Term Loan.

4.5. INTEREST ON TERM LOAN.

4.5.1. INTEREST RATES. Except as otherwise provided in
ss.6.11, the Term Loan shall bear interest during each Interest Period
relating to all or any portion of the Term Loan at the following rates:

(a) To the extent that all or any portion of the Term
Loan bears interest during such Interest Period at the Base
Rate, the Term Loan or such portion shall bear interest during
such Interest Period at the rate of per annum equal to the
Base Rate plus the Applicable Margin.

(b) To the extent that all or any portion of the Term
Loan bears interest during such Interest Period at the
Eurodollar Rate, the Term Loan or such portion shall bear
interest during such Interest Period at the rate of per annum
equal to the Eurodollar Rate plus the Applicable Margin.

The Borrower promises to pay interest on the Term Loan or any portion
thereof outstanding during each Interest Period in arrears on each
Interest Payment Date applicable to such Interest Period.

4.5.2. NOTIFICATION BY BORROWER. The Borrower shall notify the
Agent, such notice to be irrevocable, at least three (3) Eurodollar
Business Days prior to the Drawdown Date of the Term Loan if all or any
portion of the Term Loan is to bear interest at the Eurodollar Rate.
After the Term Loan has been made, the provisions of ss.2.7 shall apply
mutatis mutandis with respect to all or any portion of the Term Loan so
that the Borrower may have the same interest rate options with respect
to all or any portion of the Term Loan as it would be entitled to with
respect to the Revolving Credit Loans.

4.5.3. AMOUNTS, ETC. Any portion of the Term Loan bearing
interest at the Eurodollar Rate relating to any Interest Period shall
be in the amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof. No Interest Period relating to the Term Loan or any
portion thereof bearing interest at the Eurodollar Rate shall extend
beyond the date on which a regularly scheduled installment payment of
the principal of the Term Loan is to be made unless a portion of the
Term Loan at least equal to such installment payment has an Interest
Period ending on such date or is then bearing interest at the Base
Rate.

5. LETTERS OF CREDIT.

5.1. LETTER OF CREDIT COMMITMENTS.

<PAGE> 33
-27-

5.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and the execution and delivery by the
Borrower of a letter of credit application on the Agent's customary
form (a "Letter of Credit Application"), the Agent on behalf of the
Banks and in reliance upon the agreement of the Banks set forth in
ss.5.1.4 and upon the representations and warranties of the Borrower
contained herein, agrees, in its individual capacity, to issue, extend
and renew for the account of the Borrower one or more standby or
documentary letters of credit (individually, a "Letter of Credit"), in
such form as may be requested from time to time by the Borrower and
agreed to by the Agent; provided, however, that, after giving effect to
such request, (a) the sum of the aggregate Maximum Drawing Amount and
all Unpaid Reimbursement Obligations shall not exceed $5,000,000 at any
one time and (b) the sum of (i) the Maximum Drawing Amount on all
Letters of Credit, (ii) all Unpaid Reimbursement Obligations, and (iii)
the amount of all Revolving Credit Loans outstanding shall not exceed
the lesser of (A) the Total Commitment and (B) the Borrowing Base.
Notwithstanding the foregoing, the Agent shall have no obligation to
issue any Letter of Credit to support or secure any Indebtedness of the
Borrower or any of its Subsidiaries to the extent that such
Indebtedness was incurred prior to the proposed issuance date of such
Letter of Credit, unless in any such case the Borrower demonstrates to
the satisfaction of the Agent that (x) such prior incurred Indebtedness
were then fully secured by a prior perfected and unavoidable security
interest in collateral provided by the Borrower or such Subsidiary to
the proposed beneficiary of such Letter of Credit or (y) such prior
incurred Indebtedness were then secured or supported by a letter of
credit issued for the account of the Borrower or such Subsidiary and
the reimbursement obligation with respect to such letter of credit was
fully secured by a prior perfected and unavoidable security interest in
collateral provided to the issuer of such letter of credit by the
Borrower or such Subsidiary.

5.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.

5.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (i)
provide for the payment of sight drafts for honor thereunder when
presented in accordance with the terms thereof and when accompanied by
the documents described therein, and (ii) have an expiry date no later
than the date which is fourteen (14) days (or, if the Letter of Credit
is confirmed by a confirmer or otherwise provides for one or more
nominated persons, forty-five (45) days) prior to the Revolving Credit
Loan Maturity Date. Each Letter of Credit so issued, extended or
renewed shall be subject to the Uniform Customs.

<PAGE> 34
-28-

5.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Bank's Commitment
Percentage, to reimburse the Agent on demand for the amount of each
draft paid by the Agent under each Letter of Credit to the extent that
such amount is not reimbursed by the Borrower pursuant to ss.5.2 (such
agreement for a Bank being called herein the "Letter of Credit
Participation" of such Bank).

5.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a
Bank shall be treated as the purchase by such Bank of a participating
interest in the Borrower's Reimbursement Obligation under ss.5.2 in an
amount equal to such payment. Each Bank shall share in accordance with
its participating interest in any interest which accrues pursuant to
ss.5.2.

5.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,

(a) except as otherwise expressly provided in ss.5.2(b) and
(c), on each date that any draft presented under such Letter of Credit
is honored by the Agent, or the Agent otherwise makes a payment with
respect thereto, (i) the amount paid by the Agent under or with respect
to such Letter of Credit, and (ii) the amount of any taxes, fees,
charges or other costs and expenses whatsoever incurred by the Agent or
any Bank in connection with any payment made by the Agent or any Bank
under, or with respect to, such Letter of Credit,

(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations, and

(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with ss.14, an amount equal to the then
Maximum Drawing Amount on all Letters of Credit, which amount shall be
held by the Agent for the benefit of the Banks and the Agent as cash
collateral for all Reimbursement Obligations.

Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this ss.5.2 at any time from the date such amounts become due
and payable (whether as stated in this ss.5.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on

<PAGE> 35
-29-

demand at the rate specified in ss.6.11 for overdue principal on the Revolving
Credit Loans.

5.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrower fails to reimburse the Agent as
provided in ss.5.2 on or before the date that such draft is paid or other
payment is made by the Agent, the Agent may at any time thereafter notify the
Banks of the amount of any such Unpaid Reimbursement Obligation. No later than
3:00 p.m. (Boston time) on the Business Day next following the receipt of such
notice, each Bank shall make available to the Agent, at the Agent's Head Office,
in immediately available funds, such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (i)
the average, computed for the period referred to in clause (iii) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, times (ii) the amount equal
to such Bank's Commitment Percentage of such Unpaid Reimbursement Obligation,
times (iii) a fraction, the numerator of which is the number of days that elapse
from and including the date the Agent paid the draft presented for honor or
otherwise made payment to the date on which such Bank's Commitment Percentage of
such Unpaid Reimbursement obligation shall become immediately available to the
Agent, and the denominator of which is 360. The responsibility of the Agent to
the Borrower and the Banks shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit.

5.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this ss.5
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under ss.5.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit, except if such error was the direct result of the Agent or
any Bank's gross negligence or willful misconduct. The Borrower agrees that any
action taken or omitted by the Agent or any Bank under or in connection with
each Letter of Credit and the related drafts and documents, if done in good
faith and

<PAGE> 36
-30-

absent the Agent's or such Bank's gross negligence and willful misconduct, shall
be binding upon the Borrower and shall not result in any liability on the part
of the Agent or any Bank to the Borrower.

5.5. RELIANCE BY ISSUER. To the extent not inconsistent with ss.5.4,
the Agent shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed in good faith by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Credit Agreement
unless it shall first have received such advice or concurrence of the Majority
Banks as it reasonably deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Credit Agreement in accordance with a request
of the Majority Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Banks and all future holders of the
Revolving Credit Notes or of a Letter of Credit Participation.

5.6. LETTER OF CREDIT FEE. The Borrower shall, on the date of issuance
or any extension or renewal of any Letter of Credit pay a fee (in each case, a
"Letter of Credit Fee") to the Agent (i) in respect of each standby Letter of
Credit calculated at the Applicable Margin per annum of the face amount of such
standby Letter of Credit, plus a fee equal to one-quarter of one percent (1/4%)
per annum of the face amount of such standby Letter of Credit for the account of
the Agent, as a fronting fee, and the balance of which Letter of Credit Fee
shall be for the accounts of the Banks in accordance with their respective
Commitment Percentages and (ii) in respect of each documentary Letter of Credit
calculated at the rate of the Applicable Margin per annum on the face amount of
such documentary Letter of Credit, plus a fee equal to one-quarter of one
percent (1/4%) per annum of the face amount of such documentary Letter of Credit
for the account of the Agent, as a fronting fee, and the balance of which Letter
of Credit Fee shall be for the accounts of the Banks in accordance with their
respective Commitment Percentages. In respect of each Letter of Credit, the
Borrower shall also pay to the Agent for the Agent's own account, at such other
time or times as such charges are customarily made by the Agent, the Agent's
customary issuance, amendment, negotiation or document examination and other
administrative fees as in effect from time to time.

6. CERTAIN GENERAL PROVISIONS.

6.1. [RESERVED]6.2. [RESERVED]6.3. FUNDS FOR PAYMENTS.

6.3.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan
Documents

<PAGE> 37
-31-

shall be made to the Agent, for the respective accounts of the Banks
and the Agent, at the Agent's Head Office or at such other location in
the Boston, Massachusetts, area that the Agent may from time to time
designate, in each case in immediately available funds.

6.3.2. NO OFFSET, ETC. All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without setoff
or counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any
political subdivision thereof or taxing or other authority therein
unless the Borrower is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Borrower with
respect to any amount payable by it hereunder or under any of the other
Loan Documents, the Borrower will pay to the Agent, for the account of
the Banks or (as the case may be) the Agent, on the date on which such
amount is due and payable hereunder or under such other Loan Document,
such additional amount in Dollars as shall be necessary to enable the
Banks or the Agent to receive the same net amount which the Banks or
the Agent would have received on such due date had no such obligation
been imposed upon the Borrower. The Borrower will deliver promptly to
the Agent certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by the
Borrower hereunder or under such other Loan Document.

6.4. COMPUTATIONS. All computations of interest on the Loans and of
commitment fees, Letter of Credit Fees or other fees shall, be based on a
360-day year and paid for the actual number of days elapsed. Except as otherwise
provided in the definition of the term "Interest Period" with respect to
Eurodollar Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Loans as
reflected on the Revolving Credit Note Records and the Term Note Records from
time to time shall be considered correct and binding on the Borrower unless
within five (5) Business Days after receipt of any notice by the Borrower of
such outstanding amount, the Borrower shall notify the Agent or any Bank to the
contrary.

6.5. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine in accordance with its standard commerical practice that
adequate and reasonable methods do not exist for ascertaining the Eurodollar
Rate that would otherwise determine the rate of interest to be applicable to any
Eurodollar Rate Loan during any Interest Period, the Agent shall forthwith give
notice of such determination (which shall be conclusive and binding on the
Borrower and the Banks) to the Borrower and the Banks. In such event (i) any
Loan Request or Conversion Request with respect to Eurodollar Rate Loans shall
be automatically withdrawn and shall be deemed a request for Base Rate Loans,
(ii)

<PAGE> 38
-32-

each Eurodollar Rate Loan will automatically, on the last day of the then
current Interest Period relating thereto, become a Base Rate Loan, and (iii) the
obligations of the Banks to make Eurodollar Rate Loans shall be suspended until
the Agent determines in accordance with its standard commercial practice that
the circumstances giving rise to such suspension no longer exist, whereupon the
Agent shall so notify the Borrower and the Banks.

6.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (i) the
commitment of such Bank to make Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (ii) such
Bank's Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if any,
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such Eurodollar Rate Loans or within such earlier
period as may be required by law. The Borrower hereby agrees promptly to pay the
Agent for the account of such Bank, upon demand by such Bank, any additional
amounts necessary to compensate such Bank for any costs incurred by such Bank in
making any conversion in accordance with this ss.6.6, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make or
maintain its Eurodollar Rate Loans hereunder.

6.7. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:

(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters of
Credit, such Bank's Commitment or the Loans (other than taxes based
upon or measured by the income or profits of such Bank or the Agent),
or

(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Loans or any other amounts payable
to any Bank or the Agent under this Credit Agreement or any of the
other Loan Documents, or

(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by,

<PAGE> 39
-33-

or deposits in or for the account of, or loans by, or letters of credit
issued by, or commitments of an office of any Bank, or

(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Bank's Commitment, or
any class of loans, letters of credit or commitments of which any of
the Loans or such Bank's Commitment forms a part, and the result of any
of the foregoing is

(i) to materially increase the cost to any Bank of
making, funding, issuing, renewing, extending or maintaining
any of the Loans or such Bank's Commitment or any Letter of
Credit, or

(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank
or the Agent hereunder on account of such Bank's Commitment,
any Letter of Credit or any of the Loans, or

(iii) to require such Bank or the Agent to make any
payment or to forego any interest or Reimbursement Obligation
or other sum payable hereunder, the amount of which payment or
foregone interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Agent from
the Borrower hereunder,

then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time within one hundred eighty (180) days
of the event giving rise thereto and from time to time and as often as the
occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or Reimbursement
Obligation or other sum.

6.8. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (i) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (ii) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Loans to a level below that which such Bank or the Agent could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's or the Agent's then existing policies with respect to
capital adequacy and assuming full utilization of such entity's capital) by any
amount reasonably deemed by such Bank or (as the case may be) the Agent in
accordance with its standard commercial practices to be

<PAGE> 40
-34-

material, then such Bank or the Agent may notify the Borrower of such fact
within one hundred eighty (180) days of the event giving rise thereto. To the
extent that the amount of such reduction in the return on capital is not
reflected in the Base Rate, the Borrower agrees to pay such Bank or (as the case
may be) the Agent for the amount of such reduction in the return on capital as
and when such reduction is determined upon presentation by such Bank or (as the
case may be) the Agent of a certificate in accordance with ss.6.9 hereof. Each
Bank shall allocate such cost increases among its customers in good faith and on
an equitable basis.

6.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to ss.ss.6.7 or 6.8 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.

6.10. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (i)
default by the Borrower in payment of the principal amount of or any interest on
any Eurodollar Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurodollar Rate Loans, (ii)
default by the Borrower in making a borrowing or conversion after the Borrower
has given (or is deemed to have given) a Loan Request, notice (in the case of
all or any portion of the Term Loans pursuant to ss.4.5.2) or a Conversion
Request relating thereto in accordance with ss.2.6 or ss.2.7 or ss.4.5 or (iii)
the making of any payment of a Eurodollar Rate Loan or the making of any
conversion of any such Loan to a Base Rate Loan on a day that is not the last
day of the applicable Interest Period with respect thereto, including interest
or fees payable by such Bank to lenders of funds obtained by it in order to
maintain any such Loans.

6.11. INTEREST AFTER DEFAULT.

6.11.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other
overdue amounts payable hereunder or under any of the other Loan
Documents shall bear interest compounded monthly and payable on demand
at a rate per annum equal to three percent (3%) above the Base Rate
until such amount shall be paid in full (after as well as before
judgment).

6.11.2. AMOUNTS NOT OVERDUE. During the continuance of a
Default or an Event of Default the principal of the Revolving Credit
Loans and the Term Loan not overdue shall, until such Default or Event
of Default has been cured or remedied or such Default or Event of
Default has been waived by the Majority Banks pursuant to ss.27, bear
interest at a rate per annum equal to the greater of (i) three percent
(3%) above the rate of interest otherwise applicable to such Revolving
Credit Loans pursuant to ss.2.5 and the Term Loan pursuant to ss.4.5
and (ii) the rate of interest applicable to overdue principal pursuant
to ss.6.11.1.

<PAGE> 41
-35-

7. COLLATERAL SECURITY AND GUARANTIES.

7.1. SECURITY OF BORROWER. The Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the assets of the Borrower,
whether now owned or hereafter acquired, pursuant to the terms of the Security
Documents to which the Borrower is a party.

7.2. GUARANTIES AND SECURITY OF DOMESTIC SUBSIDIARIES. If the Borrower
shall have in the future any Subsidiaries which operate in the United States,
the Obligations shall also be guaranteed by such domestic Subsidiary pursuant to
the terms of a guaranty in a form satisfactory to the Agent. The obligations of
the Borrower's domestic Subsidiaries under the Guaranty shall be in turn secured
by a perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the assets of each such
Subsidiary, whether now owned or hereafter acquired, pursuant to the terms of
the Security Documents to which such Subsidiary is a party.

8. REPRESENTATIONS AND WARRANTIES.

The Borrower represents and warrants to the Banks and the Agent as
follows:

8.1. CORPORATE AUTHORITY.

8.1.1. INCORPORATION; GOOD STANDING. Except as set forth on
Schedule 8.1.1 hereto, each of the Borrower and its Subsidiaries (i) is
a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation, (ii) has all requisite
corporate power to own its property and conduct its business as now
conducted and as presently contemplated, and (iii) is in good standing
as a foreign corporation and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a
failure to be so qualified would not have a materially adverse effect
on the business, assets or financial condition of the Borrower or such
Subsidiary.

8.1.2. AUTHORIZATION. The execution, delivery and performance
of this Credit Agreement and the other Loan Documents to which the
Borrower or any of its Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (i) are within the
corporate authority of such Person, (ii) have been duly authorized by
all necessary corporate proceedings, (iii) do not conflict with or
result in any breach or contravention of any provision of law, statute,
rule or regulation to which the Borrower or any of its Subsidiaries is
subject or any judgment, order, writ, injunction, license or permit
applicable to the Borrower or any of its Subsidiaries and (iv) do not
conflict with any provision of the corporate charter or bylaws of, or
any agreement or other instrument binding upon, the Borrower or any of
its Subsidiaries.

<PAGE> 42
-36-

8.1.3. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which the Borrower or
any of its Subsidiaries is or is to become a party will result in valid
and legally binding obligations of such Person enforceable against it
in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.

8.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrower and any of its Subsidiaries of this Credit Agreement and the other
Loan Documents to which the Borrower or any of its Subsidiaries is or is to
become a party and the transactions contemplated hereby and thereby do not
require the approval or consent of, or filing with, any governmental agency or
authority other than those already obtained.

The Borrower and its Subsidiaries own all of the assets reflected in
the combined balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.

8.4. FINANCIAL STATEMENTS AND PROJECTIONS.

8.4.1. FISCAL YEAR. The Borrower and each of its Subsidiaries
has a fiscal year which is the twelve months ending on September 30 of
each calendar year.

8.4.2. FINANCIAL STATEMENTS. There has been furnished to each
of the Banks a combined balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date, and a combined statement of
income of the Borrower and its Subsidiaries for the fiscal period then
ended, certified by Coopers & Lybrand LLP. Such balance sheet and
statement of income have been prepared in accordance with generally
accepted accounting principles and fairly present the financial
condition of the Borrower as at the close of business on the date
thereof and the results of operations for the fiscal period then ended.
There are no contingent liabilities of the Borrower or any of its
Subsidiaries as of such date involving material amounts, known to the
officers of the Borrower, which were not disclosed in such balance
sheet and the notes related thereto.

8.4.3. PROJECTIONS. The projections of the annual operating
budgets of the Borrower and its Subsidiaries on a combined basis,
balance sheets and cash flow statements for the 1997 to 2000 fiscal
years, copies of which have

<PAGE> 43
-37-

been delivered to each Bank, disclose all assumptions made with respect
to general economic, financial and market conditions used in
formulating such projections. To the knowledge of the Borrower or any
of its Subsidiaries, no facts exist that (individually or in the
aggregate) would result in any material change in any of such
projections. The projections are based upon reasonable estimates and
assumptions, have been prepared on the basis of the assumptions stated
therein and reflect the reasonable estimates of the Borrower and its
Subsidiaries (as of the date thereof) of the results of operations and
other information projected therein.

8.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Borrower and its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date,
or the combined statement of income for the fiscal period then ended, other than
changes contemplated by the Distribution Agreement or in the ordinary course of
business that have not had any materially adverse effect either individually or
in the aggregate on the business or financial condition of the Borrower or any
of its Subsidiaries. Since the Balance Sheet Date, the Borrower has not made any
Distributions, except as contemplated by the Distribution Agreement or except as
expressly permitted by the terms of this Credit Agreement.

8.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrower and its
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.

8.7. LITIGATION. Except as set forth in Schedule 8.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or
threatened against the Borrower or any of its Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, might,
either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of the Borrower and its
Subsidiaries, considered as a whole, or materially impair the right of the
Borrower and its Subsidiaries, considered as a whole, to carry on business
substantially as now conducted by them, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet of the Borrower and its
Subsidiaries, or which question the validity of this Credit Agreement or any of
the other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.

8.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower nor any
of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrower or any of its Subsidiaries. Except
as previously disclosed to the Agent in writing, neither the Borrower nor any of
its Subsidiaries is a party to any contract or

<PAGE> 44
-38-

agreement that has or is expected, in the judgment of the Borrower's officers,
to have any materially adverse effect on the business of the Borrower or any of
its Subsidiaries.

8.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Except as previously
disclosed to the Agent in writing, neither the Borrower nor any of its
Subsidiaries is in violation of any provision of its charter documents, bylaws,
or any agreement or instrument to which it may be subject or by which it or any
of its properties may be bound or any decree, order, judgment, statute, license,
rule or regulation, in any of the foregoing cases in a manner that could result
in the imposition of substantial penalties or materially and adversely affect
the financial condition, properties or business of the Borrower or any of its
Subsidiaries.

8.10. TAX STATUS. The Borrower and its Subsidiaries (i) have made or
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them is subject, (ii)
have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (iii) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.

8.11. NO EVENT OF DEFAULT. No Event of Default has occurred and is
continuing.

8.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.

8.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or any
rights relating thereto.

8.14. PERFECTION OF SECURITY INTEREST. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken, or arrangements satisfactory to the Agent have been
made for taking, that are necessary or advisable, under applicable law, to
establish and perfect the Agent's security interest in the Collateral. The
Collateral and the Agent's rights with respect to the Collateral are not subject
to any setoff, claims, withholdings or

<PAGE> 45
-39-

other defenses. The Borrower or a Subsidiary of the Borrower party to one of the
Security Agreements is the owner of the Collateral free from any lien, security
interest, encumbrance and any other claim or demand, except for Permitted Liens.

8.15. CERTAIN TRANSACTIONS. None of the officers, directors, or
employees of the Borrower or any of its Subsidiaries is presently a party to any
transaction with the Borrower or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.

8.16. EMPLOYEE BENEFIT PLANS.

8.16.1. IN GENERAL. Each Employee Benefit Plan and each
Guaranteed Pension Plan has been maintained and operated in compliance
in all material respects with the provisions of ERISA and, to the
extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions and the
bonding of fiduciaries and other persons handling plan funds as
required by ss.412 of ERISA. The Borrower has heretofore delivered to
the Agent the most recently completed annual report, Form 5500, with
all required attachments, and actuarial statement required to be
submitted under ss.103(d) of ERISA, with respect to each Guaranteed
Pension Plan.

8.16.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit
Plan, which is an employee welfare benefit plan within the meaning of
ss.3(1) or ss.3(2)(B) of ERISA, provides benefit coverage subsequent to
termination of employment, except as required by Title I, Part 6 of
ERISA or the applicable state insurance laws. The Borrower may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of
the Borrower without liability to any Person other than for claims
arising prior to termination.

8.16.3. GUARANTEED PENSION PLANS. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice
or lien provisions of ss.302(f) of ERISA, or otherwise, has been timely
made. No waiver of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any Guaranteed
Pension Plan, and neither the Borrower nor any ERISA Affiliate is
obligated to or has posted security in connection with an amendment to
a Guaranteed Pension Plan pursuant to ss.307 of ERISA or ss.401(a)(29)
of the Code. No liability to the PBGC (other than required insurance
premiums, all of which have been paid) has been incurred by the
Borrower or any ERISA Affiliate with respect to any Guaranteed Pension
Plan and there has not been any ERISA Reportable Event (other than an
ERISA Reportable Event as to which the

<PAGE> 46
-40-

requirement of 30 days notice has been waived), or any other event or
condition which presents a material risk of termination of any
Guaranteed Pension Plan by the PBGC. Based on the latest valuation of
each Guaranteed Pension Plan (which in each case occurred within twelve
months of the date of this representation), and on the actuarial
methods and assumptions employed for that valuation, the aggregate
benefit liabilities of all such Guaranteed Pension Plans within the
meaning of ss.4001 of ERISA did not exceed the aggregate value of the
assets of all such Guaranteed Pension Plans, disregarding for this
purpose the benefit liabilities and assets of any Guaranteed Pension
Plan with assets in excess of benefit liabilities.

8.16.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any
ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under
ss.4201 of ERISA or as a result of a sale of assets described in
ss.4204 of ERISA. Neither the Borrower nor any ERISA Affiliate has been
notified that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of ss.4241 or ss.4245 of ERISA or is at
risk of entering reorganization or becoming insolvent, or that any
Multiemployer Plan intends to terminate or has been terminated under
ss.4041A of ERISA.

8.17. USE OF PROCEEDS.

8.17.1. GENERAL. The proceeds of the Loans, together with the
proceeds of the Borrower's public offering shall be used on the Closing
Date to pay in full any Indebtedness which remains outstanding under a
$64,000,000 note payable to BankBoston, N.A. and thereafter for working
capital and general corporate purposes. The Borrower will obtain
Letters of Credit solely for general corporate purposes.

8.17.2. REGULATIONS U AND X. No portion of any Loan is to be
used, and no portion of any Letter of Credit is to be obtained, for the
purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.

8.17.3. INELIGIBLE SECURITIES. No portion of the proceeds of
any Loans is to be used, and no portion of any Letter of Credit is to
be obtained, for the purpose of (a) knowingly purchasing, or providing
credit support for the purchase of, Ineligible Securities from a
Section 20 Subsidiary during any period in which such Section 20
Subsidiary makes a market in such Ineligible Securities, (b) knowingly
purchasing, or providing credit support for the purchase of, during the
underwriting or placement period, any Ineligible Securities being
underwritten or privately placed by a Section 20 Subsidiary, or (c)
making, or providing credit support for the making of, payments of
principal or interest on Ineligible Securities underwritten or
privately placed

<PAGE> 47
-41-

by a Section 20 Subsidiary and issued by or for the benefit of the
Borrower or any Subsidiary or other Affiliate of the Borrower.

8.18. ENVIRONMENTAL COMPLIANCE. To the Borrower's knowledge, and except
as set forth on Schedule 8.18 attached hereto:

(a) none of the Borrower, its Subsidiaries or any of their
operations at the Real Estate is in violation, or alleged violation, of
any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation,
those arising under the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act,
the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance, order or decree relating
to health, safety or the environment (hereinafter "Environmental
Laws"), which violation would have a material adverse effect on the
environment or the business, assets or financial condition of the
Borrower or any of its Subsidiaries;

(b) neither the Borrower nor any of its Subsidiaries has
received notice from any third party including, without limitation, any
federal, state or local governmental authority, (i) that any one of
them has been identified by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300 Appendix B; (ii) that any hazardous waste, as defined by 42
U.S.C. ss.6903(5), any hazardous substances as defined by 42 U.S.C.
ss.9601(14), any pollutant or contaminant as defined by 42 U.S.C.
ss.9601(33) and any toxic substances, oil or hazardous materials or
other chemicals or substances regulated by any Environmental Laws
("Hazardous Substances") which any one of them has generated,
transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or
has ordered that any Borrower or any of its Subsidiaries conduct a
remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iii) that it is or shall be a named party to
any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Substances;

(c) (i) no portion of the Real Estate has been used for the
handling, processing, storage or disposal of Hazardous Substances
except in accordance with applicable Environmental Laws; and no
underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Real Estate; (ii) in the
course of any activities conducted by the Borrower or its Subsidiaries,
no Hazardous Substances have been generated or are being used on the
Real Estate except in accordance with applicable Environmental Laws;
(iii) there have been no

<PAGE> 48
-42-

releases (i.e. any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping) or threatened releases of Hazardous Substances
on, upon, into or from the properties of the Borrower or its
Subsidiaries, which releases would have a material adverse effect on
the value of any of the Real Estate or adjacent properties or the
environment; (iv) to the best of the Borrower's knowledge, there have
been no releases on, upon, from or into any real property in the
vicinity of any of the Real Estate which, through soil or groundwater
contamination, may have come to be located on, and which would have a
material adverse effect on the value of, the Real Estate; and (v) in
addition, any Hazardous Substances that have been generated on any of
the Real Estate have been transported offsite only by carriers having
an identification number issued by the EPA, treated or disposed of only
by treatment or disposal facilities maintaining valid permits as
required under applicable Environmental Laws, which transporters and
facilities have been and are, to the best of the Borrower's knowledge,
operating in compliance with such permits and applicable Environmental
Laws; and

(d) None of the Borrower and its Subsidiaries or any of the
Real Estate is subject to any applicable environmental law requiring
the performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the giving of notice
to any governmental agency or the recording or delivery to other
Persons of an environmental disclosure document or statement by virtue
of the transactions set forth herein and contemplated hereby or to the
effectiveness of any other transactions contemplated hereby.

8.19. SUBSIDIARIES, ETC. The only Subsidiaries of the Borrower are
listed on Schedule 8.19. Neither the Borrower nor any Subsidiary of the Borrower
is engaged in any joint venture or partnership with any other Person.

8.20. BANK ACCOUNTS. Schedule 8.20 sets forth the account numbers and
location of all Local Accounts, Interim Concentration Accounts and other bank
accounts of the Borrower or any of its Subsidiaries.

8.21. ADDITIONAL REPRESENTATIONS. (a) The Borrower has in all material
respects transferred the business, assets and liabilities relating to its PRISM,
Protean and Avantis product lines to Marcam Solutions, Inc. and has contributed
$39,000,000 in cash to Marcam Solutions, Inc. pursuant to the Distribution
Agreement.

(b) The shares of Marcam Solutions, Inc. have been distributed to
stockholders of the Borrower in a tax-free distribution under Section 355 of the
Code.

(c) The Borrower and Marcam Solutions, Inc. are party to a
Distribution Agreement, a General Services Agreement, an International
Facilities Sharing

<PAGE> 49
-43-

Agreement, and a Tax Sharing Agreement, copies of which have been delivered to
the Agent on or prior to the Closing Date.

(d) The Borrower's Earnings Before Interest and Taxes for the four
fiscal quarters ended prior to the Closing Date exceeded $19,000,000.

(e) The Borrower has completed a public offering and received Net Cash
Proceeds therefrom in excess of $34,000,000.

8.22. DISCLOSURE. None of this Credit Agreement or any of the other
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact (known to the Borrower or any of its Subsidiaries in the
case of any document or information not furnished by it or any of its
Subsidiaries) necessary in order to make the statements herein or therein, in
light of the circumstances under which they were made not misleading. Except as
otherwise disclosed to the Agent on or prior to the Closing Date, there is no
fact known to the Borrower or any of its Subsidiaries which materially adversely
affects, or which is reasonably likely in the future to materially adversely
affect, the business, assets, financial condition or prospects of the Borrower
or any of its Subsidiaries, exclusive of effects resulting from changes in
general economic conditions, legal standards or regulatory conditions.

9. AFFIRMATIVE COVENANTS OF THE BORROWER.

The Borrower covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:

9.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, the Letter of Credit Fees, the commitment fees, the Agent's fee and
all other amounts provided for in this Credit Agreement and the other Loan
Documents to which the Borrower or any of its Subsidiaries is a party, all in
accordance with the terms of this Credit Agreement and such other Loan
Documents.

9.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office in Atlanta, Georgia, or at such other place in the United
States of America as the Borrower shall designate upon written notice to the
Agent, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents to which the Borrower is a party may be given or
made.

9.3. RECORDS AND ACCOUNTS. The Borrower will (i) keep, and cause each
of its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles, (ii) maintain adequate accounts and reserves for
all taxes (including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its Subsidiaries,
contingencies, and other

<PAGE> 50
-44-

reserves, and (iii) at all times engage Coopers & Lybrand LLP or other
independent certified public accountants satisfactory to the Agent as the
independent certified public accountants of the Borrower and its Subsidiaries
and will not permit more than thirty (30) days to elapse between the cessation
of such firm's (or any successor firm's) engagement as the independent certified
public accountants of the Borrower and its Subsidiaries and the appointment in
such capacity of a successor firm as shall be satisfactory to the Agent.

9.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to each of the Banks:

(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries, each
as at the end of such year, and the related consolidated statement of
income and consolidated statement of cash flow for such year, each
setting forth in comparative form the figures for the previous fiscal
year and all such consolidated and consolidating statements to be in
reasonable detail, prepared in accordance with generally accepted
accounting principles, and certified without qualification by Coopers &
Lybrand LLP or by other independent certified public accountants
satisfactory to the Agent, together with a written statement from such
accountants to the effect that they have read a copy of this Credit
Agreement, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Default or Event
of Default, or, if such accountants shall have obtained knowledge of
any then existing Default or Event of Default they shall disclose in
such statement any such Default or Event of Default; provided that such
accountants shall not be liable to the Banks for failure to obtain
knowledge of any Default or Event of Default; and, provided further
that the information required by this paragraph may be satisfied by
delivery by the Borrower within such ninety (90) day period of the
Borrower's Form 10-K for such fiscal year;

(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of
the Borrower, copies of the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries, each as at the end of such quarter, and
the related consolidated statement of income and consolidated statement
of cash flow for the portion of the Borrower's fiscal year then
elapsed, all in reasonable detail and prepared in accordance with
generally accepted accounting principles, together with a certification
by the principal financial or accounting officer of the Borrower that
the information contained in such financial statements fairly presents
the financial position of the Borrower and its Subsidiaries on the date
thereof (subject to year-end adjustments); provided that the
information required by this paragraph may be satisfied by the Borrower
within such forty-five (45) day period of the Borrower's Form 10-Q for
such fiscal quarter;

<PAGE> 51
-45-

(d) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement
certified by the principal financial or accounting officer of the
Borrower in substantially the form of Exhibit E hereto and setting
forth in reasonable detail computations evidencing compliance with the
covenants contained in ss.11 and (if applicable) reconciliations to
reflect changes in generally accepted accounting principles since the
Balance Sheet Date;

(e) contemporaneously with the filing or mailing thereof,
copies of all publicly available material of a financial nature filed
with the Securities and Exchange Commission or sent to the stockholders
of the Borrower;

(f) if any Revolving Credit Loans are outstanding or
requested, within twenty (20) days after the end of each calendar month
or at such earlier time as the Agent may reasonably request, a
Borrowing Base Report setting forth the Borrowing Base as at the end of
such calendar month or other date so requested by the Agent;

(g) if any Revolving Credit Loans are outstanding or
requested, within twenty (20) days after the end of each calendar
month, an Accounts Receivable aging report; and

(h) from time to time such other financial data and
information (including accountants, management letters) as the Agent or
any Bank may reasonably request.

9.5. NOTICES.

9.5.1. DEFAULTS. The Borrower will promptly notify the Agent
and each of the Banks in writing of the occurrence of any Default or
Event of Default. If any Person shall give any notice or take any other
action in respect of a claimed default (whether or not constituting an
Event of Default) under this Credit Agreement or any other note,
evidence of indebtedness, indenture or other obligation to which or
with respect to which the Borrower or any of its Subsidiaries is a
party or obligor, whether as principal, guarantor, surety or otherwise,
the Borrower shall forthwith give written notice thereof to the Agent
and each of the Banks, describing the notice or action and the nature
of the claimed default.

9.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give
notice to the Agent and each of the Banks (i) of any violation of any
Environmental Law that the Borrower or any of its Subsidiaries reports
in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal,
state or local environmental agency and (ii) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental
liability, of any federal, state or local environmental agency or
board, that has the potential to materially adversely

<PAGE> 52
-46-

affect the assets, liabilities, financial conditions or operations of
the Borrower or any of its Subsidiaries.

9.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Borrower
will, immediately upon becoming aware thereof, notify the Agent and
each of the Banks in writing of any setoff, claims (including, with
respect to the Real Estate, environmental claims), withholdings or
other defenses to which any of the Collateral, or the Agent's rights
with respect to the Collateral, are subject.

9.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will,
and will cause each of its Subsidiaries to, give notice to the Agent
and each of the Banks in writing within fifteen (15) days of becoming
aware of any litigation or proceedings threatened in writing or any
pending litigation and proceedings affecting the Borrower or any of its
Subsidiaries or to which the Borrower or any of its Subsidiaries is or
becomes a party involving an uninsured claim against the Borrower or
any of its Subsidiaries that could reasonably be expected to have a
materially adverse effect on the Borrower or any of its Subsidiaries
and stating the nature and status of such litigation or proceedings.
The Borrower will, and will cause each of its Subsidiaries to, give
notice to the Agent and each of the Banks, in writing, in form and
detail satisfactory to the Agent, within ten (10) days of any judgment
not covered by insurance, final or otherwise, against the Borrower or
any of its Subsidiaries in an amount in excess of $1,000,000.

9.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence (provided, simultaneously with the execution
and delivery by the Borrower to the Agent of an assumption agreement in
substantially the form of Exhibit G hereto, the Borrower shall be permitted to
merge with and into MAPICS, Inc., a Georgia corporation ("Mapics-Georgia"), with
the survivor of such merger being Mapics-Georgia, for the purpose of changing
the Borrower's state of incorporation from Massachusetts to Georgia), rights and
franchises and those of its Subsidiaries and will not, and will not cause or
permit any of its Subsidiaries to, convert to a limited liability company. It
(i) will cause all of its properties and those of its Subsidiaries used or
useful in the conduct of its business or the business of its Subsidiaries to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment, (ii) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and (iii) will, and will cause each of its Subsidiaries to, continue to engage
primarily in the businesses now conducted by them and in related businesses;
provided that nothing in this ss.9.6 shall prevent the Borrower from
discontinuing the operation and maintenance of any of its properties or any of
those of its Subsidiaries if such discontinuance is, in the judgment of the
Borrower, desirable in the conduct of its or their business and that do not in
the aggregate materially adversely affect the business of the Borrower and its
Subsidiaries on a consolidated basis.

<PAGE> 53
-47-

9.7. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent and in accordance with the terms of the Security
Agreements.

9.8. TAXES. The Borrower will, and will cause each of its Subsidiaries
to, duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided further that the Borrower and each Subsidiary of the
Borrower will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.

9.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.

9.9.1. GENERAL. The Borrower shall permit the Banks, through
the Agent or any of the Banks' other designated representatives, to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom), and
to discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times during regular business hours
and intervals as the Agent or any Bank may reasonably request and, so
long as no Event of Default has occurred and is continuing, upon
reasonable prior notice.

9.9.2. COLLATERAL REPORTS. No more frequently than once during
each calendar year, or more frequently as determined by the Agent if an
Event of Default shall have occurred and be continuing, upon the
request of the Agent, the Borrower will obtain and deliver to the
Agent, or, if the Agent so elects, will cooperate with the Agent in the
Agent's obtaining, a report of an independent collateral auditor
satisfactory to the Agent (which may be affiliated with one of the
Banks) with respect to the Accounts Receivable and inventory components
included in the Borrowing Base, which report shall indicate whether or
not the information set forth in the Borrowing Base Report most
recently delivered is accurate and complete in all material respects
based upon a review by such auditors of the Accounts Receivable
(including verification with respect to the amount, aging, identity and
credit of the respective account debtors and the billing practices of
the Borrower or

<PAGE> 54
-48-

its applicable Subsidiary). All such collateral value reports shall be
conducted and made at the expense of the Borrower.

9.9.3. ENVIRONMENTAL ASSESSMENTS. Whether or not an Event of
Default shall have occurred, the Agent may, from time to time, obtain
one or more environmental assessments or audits of the Real Estate
prepared by a hydrogeologist, an independent engineer or other
qualified consultant or expert approved by the Agent to evaluate or
confirm (i) whether any Hazardous Materials are present in the soil or
water at such property and (ii) whether the use and operation of such
property complies with all Environmental Laws; provided, however,
notwithstanding anything to the contrary contained in this ss.9.9.3,
the Agent shall not obtain any assessment or audit on any leased Real
Estate if the Lease pertaining to such Real Estate prohibits the
Borrower from permitting the Agent to obtain such assessments or
audits. Environmental assessments may include without limitation
detailed visual inspections of such property including any and all
storage areas, storage tanks, drains, dry wells and leaching areas, and
the taking of soil samples, surface water samples and ground water
samples, as well as such other investigations or analyses as the Agent
deems appropriate. All such environmental assessments shall be
conducted and made at the expense of the Borrower.

9.9.4. COMMUNICATIONS WITH ACCOUNTANTS. The Borrower
authorizes the Agent and, if accompanied by the Agent, the Banks to
communicate directly with the Borrower's independent certified public
accountants and authorizes such accountants to disclose to the Agent
and the Banks any and all financial statements and other supporting
financial documents and schedules including copies of any management
letter with respect to the business, financial condition and other
affairs of the Borrower or any of its Subsidiaries. At the request of
the Agent, the Borrower shall deliver a letter addressed to such
accountants instructing them to comply with the provisions of this
ss.9.9.4.

9.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will, and will cause each of its Subsidiaries to, comply with (i) the
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, (ii) the provisions of its charter documents and
by-laws, (iii) all agreements and instruments by which it or any of its
properties may be bound and (iv) all applicable decrees, orders, and judgments.
If any authorization, consent, approval, permit or license from any officer,
agency or instrumentality of any government shall become necessary or required
in order that the Borrower or any of its Subsidiaries may fulfill any of its
obligations hereunder or any of the other Loan Documents to which the Borrower
or such Subsidiary is a party, the Borrower will, or (as the case may be) will
cause such Subsidiary to, immediately take or cause to be taken all reasonable
steps within the power of the Borrower or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.

<PAGE> 55
-49-

9.11. EMPLOYEE BENEFIT PLANS. The Borrower will (i) promptly upon
filing the same with the Department of Labor or Internal Revenue Service upon
request of the Agent, furnish to the Agent a copy of the most recent actuarial
statement required to be submitted under ss.103(d) of ERISA and Annual Report,
Form 5500, with all required attachments, in respect of each Guaranteed Pension
Plan and (ii) promptly upon receipt or dispatch, furnish to the Agent any
notice, report or demand sent or received in respect of a Guaranteed Pension
Plan under ss.ss.302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or
in respect of a Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245
of ERISA.

9.12. USE OF PROCEEDS. The Borrower will use the proceeds of the Loans
solely for the purposes specified in ss.8.17.1. The Borrower will obtain Letters
of Credit solely for general corporate purposes.

9.13. BANK ACCOUNTS. The Borrower will, and will cause each of its
Subsidiaries to, together with the employees, agents and other Persons acting on
behalf of the Borrower or such Subsidiary, receive and hold in trust for the
Agent and the Banks all payments constituting proceeds of Accounts Receivable or
other Collateral which come into their possession or under their control and,
immediately upon receipt thereof, deposit such payments in the form received,
with any appropriate endorsements, in one of the accounts designated as a
central depositary account on Schedule 8.20.

9.14. NEW GUARANTORS. In the event any Subsidiary organized under the
laws of the United States of America or any State thereof is formed or acquired
after the date hereof, such Subsidiary shall, on the date of its formation or
acquisition, guarantee the Obligations and shall execute and deliver to the
Agent a joinder to the Guaranty in form and substance satisfactory to the Agent.

9.15. COPYRIGHT REGISTRATION. The Borrower hereby agrees to, and to
cause each of its Subsidiaries to, register copyrights for all software products
with the United States Copyright Office not later than sixty (60) days after the
Closing Date with respect to products existing on the date hereof and within
sixty (60) days of marketing any new product and the Borrower shall, and shall
cause each of its Subsidiaries to, simultaneously with such registration,
execute and deliver to the Bank for recordation with the United States Copyright
Office an amendment to the Copyright Memorandum covering such registered
copyrights in form and substance satisfactory to the Agent.

9.16. FURTHER ASSURANCES. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.

<PAGE> 56
-50-

10. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.

10.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:

(a) Indebtedness to the Banks and the Agent arising under any
of the Loan Documents;

(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;

(d) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by the Borrower
or such Subsidiary or under any Capitalized Lease, provided that the
aggregate principal amount of such Indebtedness of the Borrower and its
Subsidiaries shall not exceed the aggregate amount of $1,000,000 at any
one time;

(e) Indebtedness existing on the date hereof and listed and
described on Schedule 10.1 hereto; and

(f) Indebtedness of a Subsidiary of the Borrower existing on
the date hereof to the Borrower.

10.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit
any of its Subsidiaries to, (i) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (ii) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (iii) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (iv) suffer to
exist for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; or (v) sell, assign, pledge or otherwise
transfer any "receivables" as defined in clause (vii) of the definition of the
term

<PAGE> 57
-51-

"Indebtedness," with or without recourse; or (vi) enter into or permit to
exist any arrangement or agreement, enforceable under applicable law, which
directly or indirectly prohibits the Borrower or any of its Subsidiaries from
creating or incurring any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest other than in favor of the Agent for the
benefit of the Banks and the Agent under the Loan Documents and other than
customary anti-assignment provisions in leases and licensing agreements entered
into by the Borrower or such Subsidiary in the ordinary course of its business,
provided that the Borrower or any of its Subsidiaries may create or incur or
suffer to be created or incurred or to exist:

(a) liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;

(b) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to
secure claims for labor, material or supplies in respect of obligations
not overdue;

(c) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations or deposits made in
connection with performance bonds obtained in the ordinary course of
business;

(d) liens on properties in respect of judgments or awards that
have been in force for less than the applicable period for taking an
appeal so long as execution is not levied thereunder or in respect of
which the Borrower or such Subsidiary shall at the time in good faith
be prosecuting an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained pending such appeal
or review;

(e) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens, in existence less than 120 days from
the date of creation thereof in respect of obligations not overdue;

(f) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Borrower or a
Subsidiary of the Borrower is a party, and other minor liens or
encumbrances none of which in the opinion of the Borrower interferes
materially with the use of the property affected in the ordinary
conduct of the business of the Borrower and its Subsidiaries, which
defects do not individually or in the aggregate have a materially
adverse effect on the business of the Borrower individually or of the
Borrower and its Subsidiaries on a consolidated basis;

(g) liens existing on the date hereof and listed on Schedule
10.2 hereto;

<PAGE> 58
-52-

(h) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof
to secure purchase money Indebtedness of the type and amount permitted
by ss.10.1(d), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real or
personal property so acquired and liens in favor of lessors under
Capitalized Leases on assets subject to Capitalized Leases permitted by
ss.10.1(d) hereof;

(i) liens in favor of the Agent for the benefit of the Banks
and the Agent under the Loan Documents.

10.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:

(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by the Borrower;

(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks or banks organized
under the laws of any country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political
subdivision of any such country, provided that such bank is acting
through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD, having
in each case total capital and surplus in excess of $1,000,000,000;

(c) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1" if
rated by Moody's Investors Service, Inc., and not less than "A 1" if
rated by Standard and Poor's Rating Group;

(d) Investments existing on the date hereof and listed on
Schedule 10.3 hereto;

(e) Investments with respect to Indebtedness permitted by
ss.10.1(f) so long as such entities remain Subsidiaries of the
Borrower;

(f) Investments consisting of the Guaranty or Investments by
the Borrower in Subsidiaries of the Borrower existing on the Closing
Date or Investments by the Borrower in domestic Subsidiaries of the
Borrower existing after the Closing Date, so long as the Borrower and
such Subsidiary shall have complied with the provisions of ss.7.2
hereof;

<PAGE> 59
-53-

(g) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by ss.10.5.2;

(h) Investments consisting of loans and advances to employees
for moving, entertainment, travel and other similar expenses in the
ordinary course of business not to exceed $1,000,000 in the aggregate
at any time outstanding; and

(i) Investments consisting of Investments in money-market
mutual funds consisting entirely of (i) United States treasury or
agency funds; (ii) Boston 1784 funds; (iii) Fidelity Investment
money-market funds which are open-end investment companies registered
under the Investment Company Act of 1940, as amended; and (iv) other
money market mutual funds acceptable to the Agent;

provided, however, that, with the exception of demand deposits referred to in
ss.10.3(b) and loans and advances referred to in ss.10.3(h), such Investments
will be considered Investments permitted by this ss.10.3 only if all actions
have been taken to the satisfaction of the Agent to provide to the Agent, for
the benefit of the Banks and the Agent, a first priority perfected security
interest in all of such Investments free of all encumbrances other than
Permitted Liens.

10.4. DISTRIBUTIONS. The Borrower will not make any Distributions
except as provided in the Distribution Agreement; provided, however,
notwithstanding anything to the contrary contained in this Credit Agreement, so
long as no Default or Event of Default has occurred and is continuing or would
exist as a result thereof, the Borrower shall be permitted to repurchase shares
of its capital stock provided that the aggregate amount of all such
Distributions made in connection with all such repurchases permitted by this
ss.10.4 does not exceed, in the aggregate, $30,000,000 during the term of this
Credit Agreement.

10.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.

10.5.1. MERGERS AND ACQUISITIONS. The Borrower will not, and
will not permit any of its Subsidiaries to, become a party to any
merger or consolidation, or agree to or effect any asset acquisition or
stock acquisition (other than the acquisition of assets in the ordinary
course of business consistent with past practices) except the merger or
consolidation of one or more of the Subsidiaries of the Borrower with
and into the Borrower, or the merger or consolidation of two or more
Subsidiaries of the Borrower or, so long as the Borrower has duly
executed and delivered to the Agent an assumption agreement in
substantially the form of Exhibit G hereto, the Borrower shall be
permitted to merge with and into MAPICS, Inc., a Georgia corporation,
("Mapics-Georgia"), with the survivor of such merger being
Mapics-Georgia, for the purpose of changing the Borrower's state of
incorporation from Massachusetts to Georgia.

<PAGE> 60
-54-

10.5.2. DISPOSITION OF ASSETS. The Borrower will not, and will
not permit any of its Subsidiaries to, become a party to or agree to or
effect any disposition of assets, other than the sale of inventory, the
licensing of intellectual property and the disposition of obsolete
assets, in each case in the ordinary course of business consistent with
past practices, except as contemplated by the Distribution Agreement.

10.6. SALE AND LEASEBACK. The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Borrower or any Subsidiary of the Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that the Borrower or any Subsidiary of the Borrower intends
to use for substantially the same purpose as the property being sold or
transferred.

10.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and
will not permit any of its Subsidiaries to, (i) use any of the Real Estate or
any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances, (ii) cause or permit to be located on any of the Real
Estate any underground tank or other underground storage receptacle for
Hazardous Substances, (iii) generate any Hazardous Substances on any of the Real
Estate, (iv) conduct any activity at any Real Estate or use any Real Estate in
any manner so as to cause a release (i.e. releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
disposing or dumping) or threatened release of Hazardous Substances on, upon or
into the Real Estate or (v) otherwise conduct any activity at any Real Estate or
use any Real Estate in any manner that would violate any Environmental Law or
bring such Real Estate in violation of any Environmental Law.

10.8. SUBORDINATED DEBT. The Borrower will not, and will not permit any
of its Subsidiaries to, amend, supplement or otherwise modify the terms of any
of the Subordinated Debt or prepay, redeem or repurchase any of the Subordinated
Debt.

10.9. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate will

(a) engage in any "prohibited transaction" within the meaning
of ss.406 of ERISA or ss.4975 of the Code which could result in a
material liability for the Borrower or any of its Subsidiaries; or

(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in ss.302 of
ERISA, whether or not such deficiency is or may be waived; or

(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any of its Subsidiaries pursuant to ss.302(f)
or ss.4068 of ERISA; or

<PAGE> 61
-55-

(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to ss.307 of ERISA or
ss.401(a)(29) of the Code; or

(e) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of ss.4001 of ERISA) of
all Guaranteed Pension Plans exceeding the value of the aggregate
assets of such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of
benefit liabilities.

10.10. BUSINESS ACTIVITIES. The Borrower will not, and will not permit
any of its Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Closing Date and in related businesses.

10.11. FISCAL YEAR. The Borrower will not, and will not permit any of
it Subsidiaries to, without the written consent of the Agent, change the date of
the end of its fiscal year from that set forth in ss.8.4.1.

10.12. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will
not permit any of its Subsidiaries to, engage in any transaction with any
Affiliate (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
Affiliate or, to the knowledge of the Borrower, any corporation, partnership,
trust or other entity in which any such Affiliate has a substantial interest or
is an officer, director, trustee or partner, on terms more favorable to such
Person than would have been obtainable on an arm's-length basis in the ordinary
course of business.

10.13. UPSTREAM LIMITATIONS. Neither the Borrower nor any of its
Subsidiaries will enter into any agreement, contract or arrangement (other than
the Credit Agreement and the other Loan Documents) restricting the ability of
any Subsidiary to pay or make dividends or distributions in cash or kind to the
Borrower, to make loans, advances or other payments of whatsoever nature to the
Borrower, or to make transfer or distributions of all or any part of its assets
to the Borrower.

11. FINANCIAL COVENANTS OF THE BORROWER.

11.1. LEVERAGE RATIO. The Borrower will not permit the ratio of (a)
Total Funded Indebtedness of the Borrower and its Subsidiaries outstanding on
the last day of any fiscal quarter to (b) EBITDA for the four fiscal quarter
period ending on

<PAGE> 62
-56-

the last day of such quarter less the sum of (A) Capital Expenditures made
during such period plus (B) the portion of the costs of software development
required to be capitalized pursuant to FASB Statement No. 86 during such period
to exceed 2:1.

11.2. CONSOLIDATED OPERATING CASH FLOW TO DEBT SERVICE. The Borrower
will not permit the ratio of Consolidated Operating Cash Flow to the sum of
Consolidated Financial Obligations plus Consolidated Total Interest Expense for
any fiscal quarter ending on or prior to December 31, 1997 to exceed 2:1 and for
any fiscal quarter ending thereafter to be less than 2.50:1.

11.3. PROFITABLE OPERATIONS. The Borrower will not permit Consolidated
Net Income for any fiscal quarter to be less than $1,000,000.

11.4. QUICK RATIO. The Borrower will not permit the ratio of
Consolidated Quick Assets to Consolidated Current Liabilities to be less than
1.25 to 1 at any time.

11.5. LEASES. The Borrower will not, and will not permit any of its
Subsidiaries to, as lessee, enter into, permit to exist, or renew any agreements
to rent or lease any real or personal property if the aggregate amount of Rental
Obligations accrued and to accrue under all such agreements will exceed
$4,500,000 in any fiscal year.

12. CLOSING CONDITIONS.

The obligations of the Banks to make the initial Revolving Credit Loans
and the Term Loan and of the Agent to issue any initial Letters of Credit shall
be subject to the satisfaction of the following conditions precedent on or prior
to August 4, 1997:

12.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the Banks.
Each Bank shall have received a fully executed copy of each such document.

12.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall
have received from the Borrower and each of its Subsidiaries party to and Loan
Document, unless otherwise agreed by the Agent, a copy, certified by a duly
authorized officer of such Person to be true and complete on the Closing Date,
of each of (i) its charter or other incorporation documents as in effect on such
date of certification, and (ii) its by-laws as in effect on such date.

12.3. CORPORATE, ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of its Subsidiaries
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.

<PAGE> 63
-57-

12.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received
from the Borrower and each of its Subsidiaries party to any Loan Document an
incumbency certificate, dated as of the Closing Date, signed by a duly
authorized officer of the Borrower or such Subsidiary, and giving the name and
bearing a specimen signature of each individual who shall be authorized: (i) to
sign, in the name and on behalf of each of the Borrower of such Subsidiary, each
of the Loan Documents to which the Borrower or such Subsidiary is or is to
become a party; (ii) in the case of the Borrower, to make Loan Requests and
Conversion Requests and to apply for Letters of Credit; and (iii) to give
notices and to take other action on its behalf under the Loan Documents.

12.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) security interest in
and lien upon the Collateral. All filings, recordings, deliveries of instruments
and other actions necessary or desirable in the opinion of the Agent to protect
and preserve such security interests shall have been duly effected. The Agent
shall have received evidence thereof in form and substance satisfactory to the
Agent.

12.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Agent shall
have received from each of the Borrower and its Subsidiaries a completed and
fully executed Perfection Certificate and the results of UCC searches with
respect to the Collateral, indicating no liens other than Permitted Liens and
otherwise in form and substance satisfactory to the Agent.

12.7. CERTIFICATES OF INSURANCE. The Agent shall have received (i) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained and naming the
Agent as loss payee and additional insured in accordance with the provisions of
the Security Agreements and (ii) certified copies of all policies evidencing
such insurance (or certificates therefore signed by the insurer or an agent
authorized to bind the insurer).

12.8. AGENCY ACCOUNT AGREEMENTS. The Borrower shall have established
the BKB Concentration Account, and the Agent shall have received an Agency
Account Agreement executed by each depository institution with a Local Account
or an Interim Concentration Account.

12.9. BORROWING BASE REPORT. The Agent shall have received from the
Borrower the initial Borrowing Base Report dated as of the Closing Date.

12.10. ACCOUNTS RECEIVABLE AGING REPORT. The Agent shall have received
from the Borrower the most recent Accounts Receivable aging report of the
Borrower and its Subsidiaries dated as of a date which shall be no more than
fifteen (15) days prior to the Closing Date and the Borrower shall have notified
the Agent in writing on the Closing Date of any material deviation from the
Accounts Receivable values reflected in such Accounts Receivable aging report
and shall have

<PAGE> 64
-58-

provided the Agent with such supplementary documentation as the Agent may
reasonably request.

12.11. SOLVENCY CERTIFICATE. Each of the Banks shall have received a
certificate of an officer of the Borrower dated not less than one (1) day prior
to the Closing Date, describing in detail the solvency of the Borrower and its
Subsidiaries after the consummation of the transactions contemplated herein and
in form and substance satisfactory to the Banks.

12.12. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from Testa, Hurwitz & Thibeault, LLP, counsel to the Borrower and its
Subsidiaries.

12.13. DISBURSEMENT INSTRUCTIONS. The Agent shall have received
disbursement instructions from the Borrower, indicating that a portion of the
proceeds of the Loans are paid to satisfy the obligations described in
ss.8.17.1.

13. CONDITIONS TO ALL BORROWINGS.

The obligations of the Banks to make any Loan, including the Revolving
Credit Loan and the Term Loan, and of the Agent to issue, extend or renew any
Letter of Credit, in each case whether on or after the Closing Date, shall also
be subject to the satisfaction of the following conditions precedent:

13.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Loan or the issuance, extension or
renewal of such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.

13.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Agent would make it illegal for the Agent to
issue, extend or renew such Letter of Credit.

13.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank

<PAGE> 65
-59-

shall require for the purpose of compliance with any applicable regulations of
the Comptroller of the Currency or the Board of Governors of the Federal Reserve
System.

13.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.

13.5. BORROWING BASE REPORT. Prior to the making of any Revolving
Credit Loan, Agent shall have received the most recent Borrowing Base Report
required to be delivered to the Agent in accordance with ss.9.4(f) and, if
requested by the Agent, a Borrowing Base Report dated within three (3) days of
the Drawdown Date of such Loan or of the date of issuance, extension or renewal
of such Letter of Credit.

13.6. COMMERCIAL FINANCE EXAM. The Agent shall have completed a
commercial finance exam of the Borrower and the results thereof shall be
satisfactory to the Agent.

14. EVENTS OF DEFAULT; ACCELERATION; ETC.

14.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:

(a) the Borrower shall fail to pay any principal of the Loans
or any Reimbursement Obligation when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;

(b) the Borrower or any of its Subsidiaries shall fail to pay
any interest on the Loans, the commitment fee, any Letter of Credit
Fee, the Agent's fee, or other sums due hereunder or under any of the
other Loan Documents, when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of
maturity or at any other date fixed for payment;

(d) the Borrower or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified elsewhere in this
ss.14.1) for fifteen (15) days after written notice of such failure has
been given to the Borrower by the Agent;

<PAGE> 66
-60-

(e) any representation or warranty of the Borrower or any of
its Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant to
or in connection with this Credit Agreement shall prove to have been
false in any material respect upon the date when made or deemed to have
been made or repeated;

(f) the Borrower or any of its Subsidiaries shall fail to pay
at maturity, or within any applicable period of grace, any obligation
for borrowed money or credit received or in respect of any Capitalized
Leases, or fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound, evidencing
or securing borrowed money or credit received or in respect of any
Capitalized Leases for such period of time as would permit (assuming
the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the
maturity thereof;

(g) the Borrower or any of its Subsidiaries (other than a
Non-Material Subsidiary unless the Borrower or any other Subsidiary has
been adversely effected by the occurrence of such event (a "Deminimis
Subsidiary")) shall make an assignment for the benefit of creditors, or
admit in writing its inability to pay or generally fail to pay its
debts as they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of
the Borrower or any of its Subsidiaries (other than a Deminimis
Subsidiary) or of any substantial part of the assets of the Borrower or
any of its Subsidiaries (other than a Deminimis Subsidiary) or shall
commence any case or other proceeding relating to the Borrower or any
of its Subsidiaries (other than a Deminimis Subsidiary) under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any jurisdiction,
now or hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall
be commenced against the Borrower or any of its Subsidiaries (other
than a Deminimis Subsidiary) and the Borrower or any of its
Subsidiaries (other than a Deminimis Subsidiary) shall indicate its
approval thereof, consent thereto or acquiescence therein or such
petition or application shall not have been dismissed within forty-five
(45) days following the filing thereof;

(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any
of its Subsidiaries (other than a Deminimis Subsidiary) bankrupt or
insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of
the Borrower or any Subsidiary (other than a Deminimis Subsidiary) of
the Borrower in an involuntary case under federal bankruptcy laws as
now or hereafter constituted;

(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any
final

<PAGE> 67
-61-

judgment against the Borrower or any of its Subsidiaries (other than a
Deminimis Subsidiary) that, with other outstanding final judgments,
undischarged, against the Borrower or any of its Subsidiaries (other
than a Deminimis Subsidiary) exceeds in the aggregate $1,000,000;

(j) the holders of all or any part of the Subordinated Debt
shall accelerate the maturity of all or any part of the Subordinated
Debt or the Subordinated Debt shall be prepaid, redeemed or repurchased
in whole or in part;

(k) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded or the Agent's security interests,
mortgages or liens in a substantial portion of the Collateral shall
cease to be perfected, or shall cease to have the priority contemplated
by the Security Documents, in each case otherwise than in accordance
with the terms thereof or with the express prior written agreement,
consent or approval of the Banks, or any action at law, suit or in
equity or other legal proceeding to cancel, revoke or rescind any of
the Loan Documents shall be commenced by or on behalf of the Borrower
or any of its Subsidiaries party thereto or any of their respective
stockholders, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid
or unenforceable in accordance with the terms thereof;

(l) the Borrower or any ERISA Affiliate incurs any liability
to the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA,
or the Borrower or any ERISA Affiliate is assessed withdrawal liability
pursuant to Title IV of ERISA by a Multiemployer Plan, or any of the
following occurs with respect to a Guaranteed Pension Plan: (i) an
ERISA Reportable Event, or a failure to make a required installment or
other payment (within the meaning of ss.302(f)(1) of ERISA), provided
that the Agent determines in its reasonable discretion that such event
(A) could be expected to result in liability of the Borrower or any of
its Subsidiaries to the PBGC or such Guaranteed Pension Plan in an
aggregate amount exceeding $1,000,000 and (B) could constitute grounds
for the termination of such Guaranteed Pension Plan by the PBGC, for
the appointment by the appropriate United States District Court of a
trustee to administer such Guaranteed Pension Plan or for the
imposition of a lien in favor of such Guaranteed Pension Plan; or (ii)
the appointment by a United States District Court of a trustee to
administer such Guaranteed Pension Plan; or (iii) the institution by
the PBGC of proceedings to terminate such Guaranteed Pension Plan;

(m) the Borrower or any of its Subsidiaries (other than a
Deminimis Subsidiary) shall be enjoined, restrained or in any way
prevented by the order of any court or any administrative or regulatory
agency from conducting any material part of its business and such order
shall continue in effect for more than thirty (30) days;

<PAGE> 68
-62-

(n) there shall occur any material damage to, or loss, theft
or destruction of, any Collateral, whether or not insured, or any
strike, lockout, labor dispute, embargo, condemnation, act of God or
public enemy, or other casualty, which in any such case causes, for
more than fifteen (15) consecutive days, the cessation or substantial
curtailment of revenue producing activities at any facility of the
Borrower or any of its Subsidiaries if such event or circumstance is
not covered by business interruption insurance and would have a
material adverse effect on the business or financial condition of the
Borrower or such Subsidiary;

(o) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter
acquired by the Borrower or any of its Subsidiaries if such loss,
suspension, revocation or failure to renew would have a material
adverse effect on the business or financial condition of the Borrower
and its Subsidiaries, taken as a whole;

(p) the Borrower or any of its Subsidiaries shall be indicted
for a state or federal crime, or any civil or criminal action shall
otherwise have been brought or threatened against the Borrower or any
of its Subsidiaries, a punishment for which in any such case could
include the forfeiture of any assets of the Borrower or such Subsidiary
included in the Borrowing Base or any assets of the Borrower or such
Subsidiary not included in the Borrowing Base but having a fair market
value in excess of $1,000,000; or

(q) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under said
Act) of 30% or more of the outstanding shares of common stock of the
Borrower; or, during any period of twelve consecutive calendar months,
individuals who were directors of the Borrower on the first day of such
period shall cease to constitute a majority of the board of directors
of the Borrower;

then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents and all Reimbursement Obligations to be,
and they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of any Event
of Default specified in ss.ss.14.1(g), 14.1(h) or 14.1(j), all such amounts
shall become immediately due and payable automatically and without any
requirement of notice from the Agent or any Bank.

14.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in ss.14.1(g), ss.14.1(h) or ss.14.1(j) shall occur, any
unused portion of the credit hereunder shall forthwith terminate and each of the
Banks shall be relieved of all further obligations to make Loans to the Borrower
and the Agent

<PAGE> 69
-63-

shall be relieved of all further obligations to issue, extend or renew Letters
of Credit. If any other Event of Default shall have occurred and be continuing,
the Agent may and, upon the request of the Majority Banks, shall, by notice to
the Borrower, terminate the unused portion of the credit hereunder, and upon
such notice being given such unused portion of the credit hereunder shall
terminate immediately and each of the Banks shall be relieved of all further
obligations to make Loans and the Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. No termination of the
credit hereunder shall relieve the Borrower or any of its Subsidiaries of any of
the Obligations.

14.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to ss.14.1, each Bank, if owed
any amount with respect to the Loans or the Reimbursement Obligations, may, with
the consent of the Majority Banks but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.

14.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, following
the occurrence or during the continuance of any Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement of any the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application as follows:

(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies
by the Agent, for the exercise, protection or enforcement by the Agent
of all or any of the rights, remedies, powers and privileges of the
Agent under this Credit Agreement or any of the other Loan Documents or
in respect of the Collateral or in support of any provision of adequate
indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such
monies;

(b) Second, to all other Obligations in such order or
preference as the Majority Banks may determine; provided, however, that
(i) distributions

<PAGE> 70
-64-

shall be made (A) pari passu among Obligations with respect to the
Agent's fee payable pursuant to ss.6.2 and all other Obligations and
(B) with respect to each type of Obligation owing to the Banks, such as
interest, principal, fees and expenses, among the Banks pro rata, and
(ii) the Agent may in its discretion make proper allowance to take into
account any Obligations not then due and payable;

(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the Agent
of all of the Obligations, to the payment of any obligations required
to be paid pursuant to ss.9-504(1)(c) of the Uniform Commercial Code of
the Commonwealth of Massachusetts; and

(d) Fourth, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.

15. SETOFF.

Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the Borrower and any securities or other property of the Borrower
in the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities then due, direct,
or indirect, absolute or contingent, now existing or hereafter arising, of the
Borrower to such Bank. Each of the Banks agrees with each other Bank that (i) if
an amount to be set off is to be applied to Indebtedness of the Borrower to such
Bank, other than Indebtedness evidenced by the Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, such amount shall be
applied ratably to such other Indebtedness and to the Indebtedness evidenced by
all such Notes held by such Bank or constituting Reimbursement Obligations owed
to such Bank, and (ii) if such Bank shall receive from the Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by, or constituting
Reimbursement Obligations owed to, such Bank by proceedings against the Borrower
at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of the Note or Notes held by, or Reimbursement
Obligations owed to, such Bank any amount in excess of its ratable portion of
the payments received by all of the Banks with respect to the Notes held by, and
Reimbursement Obligations owed to, all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to such excess,
either by way of distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Notes held by
it or Reimbursement obligations owed it, its proportionate payment as
contemplated by this Credit Agreement; provided that if all or any part of such
excess payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.

<PAGE> 71
-65-

16. THE AGENT.

16.1. AUTHORIZATION.

(a) The Agent is authorized to take such action on behalf of
each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably
incident thereto, provided that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agent.

(b) The relationship between the Agent and each of the Banks
is that of an independent contractor. The use of the term "Agent" is
for convenience only and is used to describe, as a form of convention,
the independent contractual relationship between the Agent and each of
the Banks. Nothing contained in this Credit Agreement nor the other
Loan Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Agent and any of the Banks.

(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Banks, as that term is defined in Article 1
of the Uniform Commercial Code, for purposes of actions for the benefit
of the Banks and the Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents. Such actions include the
designation of the Agent as "secured party", "mortgagee" or the like on
all financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust
in collateral security intended to secure the payment or performance of
any of the Obligations, all for the benefit of the Banks and the Agent.

16.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.

16.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment

<PAGE> 72
-66-

whatsoever, except that the Agent or such other Person, as the case may be, may
be liable for losses due to its willful misconduct or gross negligence.

16.4. NO REPRESENTATIONS.

16.4.1. GENERAL. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the
Notes, the Letters of Credit, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute,
collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Notes, or
for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or
instrument hereafter furnished to it by or on behalf of the Borrower or
any of its Subsidiaries, or be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or
intended to constitute, collateral security for the Notes or to inspect
any of the properties, books or records of the Borrower or any of its
Subsidiaries. The Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the Borrower or
any holder of any of the Notes shall have been duly authorized or is
true, accurate and complete. The Agent has not made nor does it now
make any representations or warranties, express or implied, nor does it
assume any liability to the Banks, with respect to the credit
worthiness or financial conditions of the Borrower or any of its
Subsidiaries. Each Bank acknowledges that it has, independently and
without reliance upon the Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own
credit analysis and decision to enter into this Credit Agreement.

16.4.2. CLOSING DOCUMENTATION, ETC. For purposes of
determining compliance with the conditions set forth in ss.12, each
Bank that has executed this Credit Agreement shall be deemed to have
consented to, approved or accepted, or to be satisfied with, each
document and matter either sent, or made available, by the Agent or
BancBoston Securities, Inc., as arranger to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be to
be consent to or approved by or acceptable or satisfactory to such
Bank, unless an officer of the Agent or BancBoston Securities, Inc.
active upon the Borrower's account shall have received notice from such
Bank not less than two days prior to the Closing Date specifying such
Bank's objection thereto and such objection shall not have been
withdrawn by notice to the Agent or BancBoston Securities, Inc. to such
effect on or prior to the Closing Date.

16.5. PAYMENTS.

16.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the
Agent hereunder or any of the other Loan Documents for the account of
any Bank

<PAGE> 73
-67-

shall constitute a payment to such Bank. The Agent agrees promptly to
distribute to each Bank such Bank's pro rata share of payments received
by the Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.

16.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent
the distribution of any amount received by it in such capacity
hereunder, under the Notes or under any of the other Loan Documents
might involve it in liability, it may refrain from making distribution
until its right to make distribution shall have been adjudicated by a
court of competent jurisdiction. If a court of competent jurisdiction
shall adjudge that any amount received and distributed by the Agent is
to be repaid, each Person to whom any such distribution shall have been
made shall either repay to the Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such
manner and to such Persons as shall be determined by such court.

16.5.3. DELINQUENT BANKS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Bank that fails (i) to make available to the Agent its
pro rata share of any Loan or to purchase any Letter of Credit
Participation or (ii) to comply with the provisions of ss.15 with
respect to making dispositions and arrangements with the other Banks,
where such Bank's share of any payment received, whether by setoff or
otherwise, is in excess of its pro rata share of such payments due and
payable to all of the Banks, in each case as, when and to the full
extent required by the provisions of this Credit Agreement, shall be
deemed delinquent (a "Delinquent Bank") and shall be deemed a
Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments
due to it from the Borrower, whether on account of outstanding Loans,
Unpaid Reimbursement Obligations, interest, fees or otherwise, to the
remaining nondelinquent Banks for application to, and reduction of,
their respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in
proportion to their respective pro rata shares of all outstanding Loans
and Unpaid Reimbursement Obligations. A Delinquent Bank shall be deemed
to have satisfied in full a delinquency when and if, as a result of
application of the assigned payments to all outstanding Loans and
Unpaid Reimbursement Obligations of the nondelinquent Banks, the Banks'
respective pro rata shares of all outstanding Loans and Unpaid
Reimbursement Obligations have returned to those in effect immediately
prior to such delinquency and without giving effect to the nonpayment
causing such delinquency.

16.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any
Note or the purchaser of any Letter of Credit Participation as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been
furnished in

<PAGE> 74
-68-

writing with a different name by such payee or by a subsequent holder, assignee
or transferee.

16.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrower as required by ss.17), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Notes, or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Agent's willful misconduct or gross negligence.

16.8. AGENT AS BANK. In its individual capacity, BKB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes and
as the purchaser of any Letter of Credit Participations, as it would have were
it not also the Agent.

16.9. RESIGNATION. The Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.

16.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this ss.16.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.

16.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (i) so requested by
the Majority Banks and (ii) the Banks have provided to the Agent such additional

<PAGE> 75
-69-

indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.

17. EXPENSES AND INDEMNIFICATION.

17.1. EXPENSES. The Borrower agrees to pay (i) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (ii) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's net income) on
or with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (iii) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent reasonably incurred in
connection with the preparation, syndication, administration or interpretation
of the Loan Documents and other instruments mentioned herein, each closing
hereunder, any amendments, modifications, approvals, consents or waivers hereto
or hereunder, or the cancellation of any Loan Document upon payment in full in
cash of all of the Obligations or pursuant to any terms of such Loan Document
for providing for such cancellation, (iv) the fees, expenses and disbursements
of the Agent or any of its affiliates reasonably incurred by the Agent or such
affiliate in connection with the preparation, syndication, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
including all title insurance premiums and surveyor, engineering and appraisal
charges, (v) any fees, costs, expenses and bank charges, including bank charges
for returned checks reasonably incurred by the Agent in establishing,
maintaining or handling agency accounts, lock box accounts and other accounts
for the collection of any of the Collateral; (vi) all reasonable out-of-pocket
expenses (including without limitation reasonable attorneys' fees and costs,
which attorneys may be employees of any Bank or the Agent, and reasonable
consulting, accounting, appraisal, investment banking and similar professional
fees and charges) reasonably incurred by any Bank or the Agent in connection
with (A) the enforcement of or preservation of rights under any of the Loan
Documents against the Borrower or any of its Subsidiaries or the administration
thereof after the occurrence of a Default or Event of Default and (B) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to any Bank's or the Agent's relationship with the Borrower or any
of its Subsidiaries and (vii) all reasonable fees, expenses and disbursements of
any Bank or the Agent reasonably incurred in connection with UCC searches, UCC
filings or mortgage recordings.

<PAGE> 76
-70-

17.2. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Agent, its affiliates and the Banks from and against any and all
claims, actions and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages and expenses of every nature and
character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(i) any actual or proposed use by the Borrower or any of its Subsidiaries of the
proceeds of any of the Loans or Letters of Credit, (ii) the reversal or
withdrawal of any provisional credits granted by the Agent upon the transfer of
funds from lock box, bank agency or concentration accounts or in connection with
the provisional honoring of checks or other items, (iii) any actual or alleged
infringement of any patent, copyright, trademark, service mark or similar right
of the Borrower or any of its Subsidiaries comprised in the Collateral, (iv) the
Borrower or any of its Subsidiaries entering into or performing this Credit
Agreement or any of the other Loan Documents or (v) with respect to the Borrower
and its Subsidiaries and their respective properties and assets, the violation
of any Environmental Law, the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release or threatened release of any Hazardous
Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not limited
to, claims with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of internal counsel incurred in
connection with any such investigation, litigation or other proceeding. In
litigation, or the preparation therefor, the Banks and the Agent and its
affiliates shall be entitled to select their own counsel and, in addition to the
foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees and
expenses of such counsel. If, and to the extent that the obligations of the
Borrower under this ss.17.2 are unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment in satisfaction of
such obligations which is permissible under applicable law.

17.3. SURVIVAL. The covenants contained in this ss.17 shall survive
payment or satisfaction in full of all other Obligations.

18. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.

18.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. The Borrower
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower or one or more of its
Subsidiaries, in connection with this Credit Agreement or otherwise, by a
Section 20 Subsidiary. The Borrower, for itself and each of its Subsidiaries,
hereby authorizes (a) such Section 20 Subsidiary to share with the Agent and
each Bank any information delivered to such Section 20 Subsidiary by the
Borrower or any of its Subsidiaries, and (b) the Agent and each Bank to share
with such Section 20 Subsidiary any information delivered to the Agent or such
Bank by the Borrower or any of its Subsidiaries pursuant to this Credit
Agreement, or in connection with the decision of such Bank to enter into this
Credit Agreement; it being understood, in each case, that any such Section 20
Subsidiary receiving such information shall be

<PAGE> 77
-71-

bound by the confidentiality provisions of this Credit Agreement. Such
authorization shall survive the payment and satisfaction in full of all of
Obligations.

18.2. CONFIDENTIALITY. Each of the Banks and the Agent agrees, on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower or any of its Subsidiaries
pursuant to this Credit Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Banks or the Agent,
provided that nothing herein shall limit the disclosure of any such information
(a) after such information shall have become public other than through a
violation of this ss.18, (b) to the extent required by statute, rule, regulation
or judicial process, (c) to counsel for any of the Banks or the Agent, (d) to
bank examiners or any other regulatory authority having jurisdiction over any
Bank or the Agent, or to auditors or accountants, (e) to the Agent, any Bank or
any Section 20 Subsidiary, (f) in connection with any litigation to which any
one or more of the Banks, the Agent or any Section 20 Subsidiary is a party, or
in connection with the enforcement of rights or remedies hereunder or under any
other Loan Document, (g) to a Subsidiary or affiliate of such Bank as provided
in ss.18.1 or (h) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant agrees to be bound by the
provisions of ss.20.6.

18.3. PRIOR NOTIFICATION. Unless specifically prohibited by applicable
law or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.

18.4. OTHER. In no event shall any Bank or the Agent be obligated or
required to return any materials furnished to it or any Section 20 Subsidiary by
the Borrower or any of its Subsidiaries. The obligations of each Bank under this
ss.18 shall supersede and replace the obligations of such Bank under any
confidentiality letter in respect of this financing signed and delivered by such
Bank to the Borrower prior to the date hereof and shall be binding upon any
assignee of, or purchaser of any participation in, any interest in any of the
Loans or Reimbursement Obligations from any Bank.

19. SURVIVAL OF COVENANTS, ETC.

All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Banks of any of the Loans and the
issuance, extension or renewal of any Letters of Credit, as herein contemplated,
and shall

<PAGE> 78
-72-

continue in full force and effect so long as any Letter of Credit or any amount
due under this Credit Agreement or the Notes or any of the other Loan Documents
remains outstanding or any Bank has any obligation to make any Loans or the
Agent has any obligation to issue, extend or renew any Letter of Credit, and for
such further time as may be otherwise expressly specified in this Credit
Agreement. All statements contained in any certificate or other paper delivered
to any Bank or the Agent at any time by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrower or such Subsidiary hereunder.

20. ASSIGNMENT AND PARTICIPATION.

20.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); provided that (i) each
of the Agent and, unless a Default or Event of Default shall have occurred and
be continuing, the Borrower shall have given its prior written consent to such
assignment, which consent, in the case of the Borrower, will not be unreasonably
withheld, (ii) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Bank's rights and obligations under this Credit
Agreement, (iii) each assignment shall be either such Bank's entire interest or
be in an amount that is $5,000,000 or a multiple of $1,000,000 in excess
thereof, and (iv) the parties to such assignment shall execute and deliver to
the Agent, for recording in the Register (as hereinafter defined), an Assignment
and Acceptance, substantially in the form of Exhibit F hereto (an "Assignment
and Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder,
and (ii) the assigning Bank shall, to the extent provided in such assignment and
upon payment to the Agent of the registration fee referred to in ss.20.3, be
released from its obligations under this Credit Agreement.

20.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:

(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Bank makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this

<PAGE> 79
-73-

Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other
Loan Documents or any other instrument or document furnished pursuant
hereto or the attachment, perfection or priority of any security
interest or mortgage,

(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower and its Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement or
any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;

(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in ss.8.4 and ss.9.4 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;

(d) such assignee will, independently and without reliance
upon the assigning Bank, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Credit Agreement;

(e) such assignee represents and warrants that it is an
Eligible Assignee;

(f) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Credit Agreement and the other Loan Documents as are delegated to
the Agent by the terms hereof or thereof, together with such powers as
are reasonably incidental thereto;

(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank;

(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and

(i) such assignee acknowledges that it has made arrangements
with the assigning Bank satisfactory to such assignee with respect to
its pro rata share of Letter of Credit Fees in respect of outstanding
Letters of Credit.

20.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the

<PAGE> 80
-74-

recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to and
Letter of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrower and
the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $3,500.

20.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (i) record the information contained therein in
the Register, and (ii) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. Within five (5) days of issuance of any new Notes
pursuant to this ss.20.4, the Borrower shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such new Notes and the legality, validity and binding
effect thereof, in form and substance satisfactory to the Banks. The surrendered
Notes shall be cancelled and returned to the Borrower.

20.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (i) each such participation shall be in an amount of not less than
$5,000,000, (ii) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (iii) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.

20.6. DISCLOSURE. The Borrower agrees that in addition to disclosures
made in accordance with standard and customary banking practices any Bank may

<PAGE> 81
-75-

disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (i) to treat in confidence such information unless such
information otherwise becomes public knowledge, (ii) not to disclose such
information to a third party, except as required by law or legal process and
(iii) not to make use of such information for purposes of transactions unrelated
to such contemplated assignment or participation.

20.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to ss.14.1 or ss.14.2, and
the determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to such assignee
Bank's interest in any of the Loans or Reimbursement Obligations. If any Bank
sells a participating interest in any of the Loans or Reimbursement Obligations
to a participant, and such participant is the Borrower or an Affiliate of the
Borrower, then such transferor Bank shall promptly notify the Agent of the sale
of such participation. A transferor Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the Agent
pursuant to ss.14.1 or ss.14.2 to the extent that such participation is
beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to the interest of
such transferor Bank in the Loans or Reimbursement Obligations to the extent of
such participation.

20.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to ss.17 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrower and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. If any Reference Bank
transfers all of its interest, rights and obligations under this Credit
Agreement, the Agent shall, in consultation with the Borrower and with the
consent of the Borrower and the Majority Banks, appoint another Bank to act as a
Reference Bank hereunder. Anything contained in this ss.20 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Notes) to any of the twelve Federal Reserve Banks organized under ss.4 of
the Federal Reserve Act, 12 U.S.C. ss.341. No such pledge or the enforcement
thereof shall release the pledgor Bank from its obligations hereunder or under
any of the other Loan Documents.

<PAGE> 82
-76-

20.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.

21. NOTICES, ETC.

Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:

(a) if to the Borrower, at 5775-D Glenridge Drive, Atlanta,
Georgia 30328, Attention: William J. Gilmour, Chief Financial Officer
and Vice President of Finance, or at such other address for notice as
the Borrower shall last have furnished in writing to the Person giving
the notice;

(b) if to the Agent, at 100 Federal Street, Boston,
Massachusetts 02110, USA, Attention: Joseph L. Massimo, Vice President,
or such other address for notice as the Agent shall last have furnished
in writing to the Person giving the notice; and

(c) if to any Bank, at such Bank's address set forth on
Schedule 1 hereto, or such other address for notice as such Bank shall
have last furnished in writing to the Person giving the notice.

Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.

22. GOVERNING LAW.

THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND

<PAGE> 83
-77-

CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS
IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED
IN SS.21. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS
BROUGHT IN AN INCONVENIENT COURT.

23. HEADINGS.

The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.

24. COUNTERPARTS.

This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.

25. ENTIRE AGREEMENT, ETC.

The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in ss.27.

26. WAIVER OF JURY TRIAL.

The Borrower hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with this Credit
Agreement, the Notes or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of which rights and
obligations. Except as prohibited by law, the Borrower hereby waives any right
it may have to claim or recover in any litigation referred to in the preceding
sentence any special, exemplary, punitive or consequential damages or any
damages other than, or in addition to, actual damages. The Borrower (i)
certifies that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (ii)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.

27. CONSENTS, AMENDMENTS, WAIVERS, ETC.

Any consent or approval required or permitted by this Credit Agreement
to be given by the Banks may be given, and any term of this Credit Agreement,
the

<PAGE> 84
-78-

other Loan Documents or any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrower or any of its
Subsidiaries of any terms of this Credit Agreement, the other Loan Documents or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of the Borrower and
the written consent of the Majority Banks. Notwithstanding the foregoing, the
rate of interest on the Notes (other than interest accruing pursuant to
ss.6.11.2 following the effective date of any waiver by the Majority Banks of
the Default or Event oF Default relating thereto), the amount of the Commitments
of the Banks, and the amount of commitment fee or Letter of Credit Fees
hereunder may not be changed without the written consent of the Borrower and the
written consent of each Bank affected thereby; the Revolving Credit Loan
Maturity Date and the Term Loan Maturity Date may not be postponed without the
written consent of each Bank affected thereby; this ss.27 and the definition of
MajoritY Banks may not be amended, without the written consent of all of the
Banks; all or substantially all of the Collateral may not be released without
the written consent of all of the Banks; and the amount of the Agent's Fee or
any Letter of Credit Fees payable for the Agent's account and ss.16 may not be
amended without the writteN consent of the Agent. No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Agent or
any Bank in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. No notice to or demand upon the Borrower shall entitle
the Borrower to other or further notice or demand in similar or other
circumstances.

28. SEVERABILITY.

The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.

<PAGE> 85

-79-

IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.

MAPICS, INC.

By: /s/William J. Gilmour
-----------------------------------------
Name: William J. Gilmour
Title: Chief Financial Officer

BANKBOSTON, N.A., individually and as Agent

By: /s/ Debra E. Delvecchio
-----------------------------------------
Name:
Vice President

<PAGE> 86

SCHEDULE 1

BANKS/COMMITMENTS

<TABLE>
<CAPTION>
Commitment
Revolving Percentage of Revolving Credit
Credit Loan Loans, Term Loan and Letters
Banks Commitment of Credit

<S> <C> <C>
BANKBOSTON, N.A. $15,000,000 100%

Domestic Lending Office:

100 Federal Street, 01-08-06

Boston, Massachusetts 02110

Attn: Joseph L. Massimo, Vice
President,

Eurodollar Lending Office:
Same as above

Totals: $15,000,000 100%
</TABLE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MAPICS, INC. FOR THE NINE MONTHS ENDED JUNE 30, 1998
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> JUN-30-1998
<CASH> 24,882
<SECURITIES> 0
<RECEIVABLES> 32,997
<ALLOWANCES> 1,907
<INVENTORY> 0
<CURRENT-ASSETS> 62,798
<PP&E> 9,826
<DEPRECIATION> 4,969
<TOTAL-ASSETS> 99,552
<CURRENT-LIABILITIES> 60,454
<BONDS> 0
0
325
<COMMON> 188
<OTHER-SE> 38,585
<TOTAL-LIABILITY-AND-EQUITY> 99,552
<SALES> 53,976
<TOTAL-REVENUES> 90,618
<CGS> 9,796
<TOTAL-COSTS> 20,462
<OTHER-EXPENSES> 10,849
<LOSS-PROVISION> 400
<INTEREST-EXPENSE> 46
<INCOME-PRETAX> 19,977
<INCOME-TAX> 7,685
<INCOME-CONTINUING> 12,292
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,292
<EPS-PRIMARY> 0.66<F1>
<EPS-DILUTED> 0.54<F2>
<FN>
<F1>REPRESENTS BASIC EPS FOR THE NINE MONTHS ENDED JUNE 30, 1998.
<F2>REPRESENTS DILUTED EPS FOR THE NINE MONTHS ENDED JUNE 30, 1998.
</FN>

</TABLE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF MAPICS, INC. FOR THE NINE MONTHS ENDED JUNE 30, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 846
<SECURITIES> 0
<RECEIVABLES> 22,623
<ALLOWANCES> 1,750
<INVENTORY> 0
<CURRENT-ASSETS> 24,471
<PP&E> 6,052
<DEPRECIATION> 3,246
<TOTAL-ASSETS> 48,053
<CURRENT-LIABILITIES> 40,887
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 6,730
<TOTAL-LIABILITY-AND-EQUITY> 48,053
<SALES> 37,505
<TOTAL-REVENUES> 66,162
<CGS> 6,362
<TOTAL-COSTS> 14,540
<OTHER-EXPENSES> 7,504
<LOSS-PROVISION> 949
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 15,433
<INCOME-TAX> 5,942
<INCOME-CONTINUING> 9,491
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,491
<EPS-PRIMARY> 0.60<F1>
<EPS-DILUTED> 0.49<F2>
<FN>
<F1>REPRESENTS BASIC EPS FOR THE NINE MONTHS ENDED JUNE 30, 1997, as restated.
<F2>REPRESENTS DILUTED EPS FOR THE NINE MONTHS ENDED JUNE 30, 1997, as restated.
</FN>

</TABLE>