Registration Rights Agreement

Registration Rights Agreement



 
                                                                    EXHIBIT 10.7

                         REGISTRATION RIGHTS AGREEMENT



     THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
                                               ---------                      
into as of April 14, 1997 by and among MAXWELL SHOE COMPANY INC., a Delaware
corporation ("Maxwell"), THE BUTLER GROUP INC., a Delaware corporation
              -------                                                 
("Butler"),  and each of MAXWELL V. BLUM, BETTY ANN BLUM, MARJORIE W. BLUM, MARK
  ------                                                                        
J. COCOZZA AND DAVID ANDELMAN, AS TRUSTEE OF THE ELEANOR S. BLUM TRUST
(individually, a "Holder" and collectively, the "Holders").
                  ------                         -------   


                                    RECITALS
                                    --------

     A.   Butler, Maxwell and Maxwell Retail Inc., a Delaware corporation
                                                                         
("Maxwell Retail"), are parties to a Contribution Agreement dated of even date
- ----------------                                                              
herewith (the "Contribution Agreement") pursuant to which, among other things,
               ----------------------                                         
Maxwell Retail and Butler have formed SLJ Retail LLC, a Delaware limited
liability company (the "Company").
                        -------   

     B.   Capitalized terms used in this Agreement and not otherwise defined
herein will have the definitions set forth in the Contribution Agreement, unless
otherwise clearly indicated to the contrary herein.

     C.   Pursuant to the Option Agreement, Butler has the right to require
Maxwell to purchase certain Class B Member Units of the Company held by Butler,
and Maxwell may pay the purchase price for such Class B Member Units, at
Maxwell's option, either in cash or by the issuance by Maxwell to Butler of that
number of shares of Maxwell's Class A Common Stock, $.01 Par value (the "Class A
                                                                         -------
Stock"), determined in accordance with the provisions of the Option Agreement.
- -----                                                                         

     D.   Pursuant to the Contribution Agreement, Maxwell has agreed to grant to
Butler certain registration rights with respect to any shares of Maxwell's Class
A Stock issued by Maxwell to Butler pursuant to the Option Agreement (the
                                                                         
"Registrable Shares").
- -------------------   

     E.   The Holders other than Mr. Cocozza own shares of Maxwell's Class B
Common Stock, $.01 par value (the "Class B Stock").
                                   -------------   

     F.   The Holders other than Mr. Andelman, as Trustee of the Eleanor S. Blum
Trust, own or hold options to acquire shares of Class A Stock (together with the
Class B Stock, the "Common Stock").
                    ------------   

     G.   Maxwell and the Holders are party to a Registration Rights Agreement
dated as of May 18, 1994 (the "Holders' Registration Rights Agreement"),
                               --------------------------------------   
granting certain registration rights to the Holders with respect to Common Stock
held by them (the "Holders' Registrable Shares").
                   ---------------------------   
                                      

                                      

 
     H.   Maxwell has further agreed to obtain the agreement of the Holders as
to certain matters affecting the priority of the respective registration rights
granted to Butler pursuant to this Agreement and to the Holders pursuant to the
Holders' Registration Rights Agreement.

     NOW, THEREFORE, in consideration of the foregoing premises and the
covenants and agreements contained herein, the parties agree as follows:

     SECTION 1.     Demand Registration Rights.  In the event that Maxwell
                    --------------------------                            
issues Registrable Shares to Butler pursuant to the provisions of Section 2.2 of
the Option Agreement:

     (a) On not more than one occasion, upon the written request of Butler,
Maxwell shall prepare and file, promptly after such request, and thereafter use
its best efforts to cause to become effective, a registration statement (the
                                                                            
"Demand Registration Statement") under and complying with the Securities Act of
- ------------------------------                                                 
1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the "Act"), covering such number of Registrable Shares as shall
                    ---                                                       
be specified in Butler's request (such registration hereinafter referred to as
the "Demand Registration"); provided, however, that Maxwell shall not be
     -------------------    --------  -------                           
obligated to file the Demand Registration Statement within ninety days of the
closing of an underwritten primary offering of Maxwell.  Butler's request shall
also specify the intended method of distribution of the Registrable Shares.
Promptly after receiving a request for the Demand Registration, Maxwell shall
provide written notice of the Demand Registration to the Holders, who will have
ten business days after the receipt of such notice in which to inform Maxwell in
writing of their intention to have Holder's Registrable Shares included in the
Demand Registration in accordance with Section 3 of the Holders' Registration
Rights Agreement (but subject to the provisions of paragraph (b) below).  The
Demand Registration Statement shall be on the Securities and Exchange Commission
(the "Commission") registration statement form selected by Maxwell and which
      ----------                                                            
Maxwell shall then be eligible to use to effect the Demand Registration.

     (b) If the offering of the Registrable Shares is underwritten and the
managing underwriter determines and advises Butler that the inclusion in the
Demand Registration Statement of all or a portion of the Holders' Registrable
Shares sought to be included by the Holders would, in the opinion of the
managing underwriter, (x) interfere with the successful marketing of the
offering or (y) adversely affect the price of the offering, then there shall be
included in such Demand Registration Statement only that number of Holders'
Registrable Shares, if any, as the managing underwriter shall deem advisable,
and such number of Holders' Registrable Shares shall be allocated pro rata among
                                                                  --- ----      
the Holders on the basis of the number of Holders' Registrable Shares requested
to be included by such Holders;

     (c) Maxwell may delay the filing of the Demand Registration Statement for a
reasonable period not to exceed 180 days if, in the good faith judgment of the
Board of Directors of Maxwell, (i) Maxwell would be required to include in the
Demand Registration Statement material business information which at that time
cannot be publicly disclosed without material disruption of a major corporate
development or transaction then pending or in progress or

                                      -2-

 
without other material adverse consequence or (ii) the filing of the Demand
Registration Statement would have a material adverse effect on a significant
financing transaction, business combination or acquisition or other significant
matter that is pending or proposed, in connection with which Maxwell is or is
expected to be a party (it being understood that the exercise by the Holders of
their rights under the Holders' Registration Rights Agreement would not be
grounds for delay under this clause (ii)); provided, however, that Maxwell 
                                           --------  ------- 
shall promptly make such filing after the earlier of (x) the end of such 180-day
period and (y) the date as of which the conditions that delayed such filing no
longer exist. In the event of any delay in the filing of the Demand Registration
Statement, Butler shall have the right to withdraw its request for registration,
and such withdrawn request shall not be considered the Demand Registration
pursuant to Section 1(a).
            ------------ 

     (d) If (i) the effective date of the Demand Registration Statement would
otherwise be forty-five calendar days after, but prior to ninety calendar days
after, the end of Maxwell's fiscal year, and (ii) the Act requires Maxwell to
include audited financials (as of the end of such fiscal year) or the Act
permits the use of, and Butler has requested that the Demand Registration
Statement include, audited financials (as of the end of such fiscal year),
Maxwell may delay the filing of the Demand Registration Statement for such
period as is reasonably necessary to include therein its audited financial
statements for such fiscal year.

     (e) Until the earlier of (i) sixty days after the effective date of the
Demand Registration Statement, or (ii) the period necessary to complete the
marketing of Registrable Shares after the effective date of the Demand
Registration Statement, except for registrations on Commission Form S-8 or Form
S-4 (or the then equivalent forms), Maxwell shall not register under the Act an
offering of shares of Common Stock or any other equity securities of Maxwell for
sale to the public for the account of Maxwell, the Holders and/or other third
parties.

     SECTION 2.     Preparation and Filing Pursuant to Demand.  So long as
                    -----------------------------------------             
Maxwell is under an obligation pursuant to the provisions of Section 1, Maxwell
                                                             ---------         
shall:

     (a) prepare and file with the Commission such amendments and supplements to
the Demand Registration Statement and the prospectus used in connection
therewith as may be necessary to keep the Demand Registration Statement
effective for such period as shall be necessary to complete the marketing of
Registrable Shares included therein, but in no event for more than sixty
consecutive days after the effective date of the Demand Registration Statement;

     (b) furnish to Butler such number of copies of a prospectus, including,
without limitation, a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as Butler may reasonably
request in order to facilitate the public sale or other disposition of such
Registrable Shares;

     (c) use its best efforts to register or qualify Registrable Shares covered
by the Demand Registration Statement under the securities or blue sky laws of
such jurisdictions within

                                      -3-

 
the United States as Butler may reasonably request(provided, however, that
Maxwell shall not be required to consent to general service of process for all
purposes in any jurisdiction where it is not then qualified or to qualify in any
jurisdiction in which it is not then qualified) and to do any and all other acts
or things that may be necessary or advisable to enable Butler to consummate the
public sale or other disposition in such jurisdiction of Registrable Shares;

     (d) promptly notify Butler, at any time when a prospectus relating to
Registrable Shares being distributed is required to be delivered under the Act,
of the happening of any event as a result of which the prospectus included in
the Demand Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances under which they were made or then existing and, at
the request of Butler, promptly prepare, file with the Commission and furnish to
Butler a reasonable number of copies of a supplement to, or an amendment of,
such prospectus as may be necessary so that, as thereafter delivered to the
purchasers of Registrable Shares, such prospectus shall not include an untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing; and

     (e) use its best efforts to furnish, at the request of Butler or any
underwriter or any distributor of Registrable Shares, an opinion of legal
counsel to Maxwell (covering such matters as are typically covered by opinions
of issuer's counsel in underwritten offerings under the Act and similar in form
and substance to those furnished in connection with prior offerings of the Class
A Stock), as Butler or the managing underwriter of any distribution of
Registrable Shares reasonably requests.

     SECTION 3.     Piggyback Registration Rights.
                    ----------------------------- 

     (a) If Maxwell intends to register under the Act any shares of Common Stock
for public sale, including without limitation any registration pursuant to its
obligations under Section 1 of the Holders' Registration Rights Agreement,
Maxwell shall give Butler fifteen business days prior written notice of the
proposed registration.  Butler shall then have ten business days to inform
Maxwell of Butler's desire to have all or a portion of the Registrable Shares
included in the registration statement covering such shares (a "Piggyback
                                                                ---------
Registration Statement") (such registration hereinafter referred to as a
- ----------------------                                                  
"Piggyback Registration"), and any participation of Butler and the Holders
- -----------------------                                                   
therein shall be subject to the following limitations and exceptions:

          (i) Maxwell shall have no obligation to include any of Butler's
     Registrable Shares in a Piggyback Registration Statement for an
     underwritten offering unless Butler (x) agrees that such Registrable Shares
     shall be included in the underwriting on the same terms and conditions
     applicable to the other Class A Stock included in such Registration
     Statement and (y) completes and executes all questionnaires, powers of
     attorney,

                                      -4-

 
 
     indemnities, underwriting agreements and other documents reasonably
     requested under the terms of the underwriting;

          (ii)  if the offering is underwritten and the managing underwriter
     determines and advises Maxwell that the inclusion in the Piggyback
     Registration Statement of all or a portion of the Registrable Shares sought
     to be included by Butler, together with all or a portion of the Holders'
     Registrable Shares sought to be included by the Holders, would, in the
     opinion of the managing underwriter, (x) interfere with the successful
     marketing of the offering or (y) adversely affect the price of the
     offering, then there shall be included in such Piggyback Registration
     Statement only that number of Registrable Shares and Holders' Registrable
     Shares, if any, as the managing underwriter shall deem advisable, and in
     allocating such number of Registrable Shares and Holders' Registrable
     Shares between Butler, on the one hand, and the Holders, on the other hand,

               (A) there shall first be included in the Piggyback Registration
          Statement all of the Registrable Shares requested to be included by
          Butler or such lesser number of the Registrable Shares as the managing
          underwriter shall deem advisable, with priority over any of the
          Holders' Registrable Shares requested to be included by such Holders;
          and

               (B) thereafter, to the extent the managing underwriter shall deem
          advisable, there may be included in the Piggyback Registration
          Statement any of the Holders' Registrable Shares requested to be
          included by such Holders; and

          (iii)  Maxwell shall have no obligation to include any Registrable
     Shares in the Piggyback Registration Statement if (x) the shares of Class A
     Stock are being registered pursuant to Commission Form S-8 or equivalent
     form, or (y) the shares of Class A Stock being registered are to be used to
     consummate an acquisition or are related to obligations assumed in
     connection with an acquisition.

     (b) If any of the Registrable Shares are included in a Piggyback
Registration, Maxwell shall comply with the requirements of Sections 2(b) and
                                                            -------------    
2(d) with respect to such Piggyback Registration.
- ----                                             

     (c) Maxwell may abandon a Piggyback Registration at any time pursuant to a
resolution duly adopted by Maxwell's Board of Directors.

     SECTION 4.     Standstill Obligations of Butler.  Butler shall agree, if
                    --------------------------------                         
requested by the managing underwriter of the Demand Registration or a Piggyback
Registration in order to facilitate the distribution of the Common Stock
proposed to be sold pursuant thereto, not to sell or otherwise transfer any of
Butler's remaining shares of Common Stock in the public market for a period not
to exceed 180 days after the effective date of the applicable Registration
Statement.

                                      -5-

 
     SECTION 5.     Expenses.  In connection with any Demand Registration
                    --------                                             
Statement or Piggyback Registration Statement, all expenses incurred by Maxwell
in complying with its obligations hereunder, including, without limitation, all
registration and filing fees, fees and expenses of complying with securities and
blue sky laws, listing fees, printing expenses and fees and disbursements of
accountants and counsel shall be paid by Maxwell; provided, however, that Butler
                                                  --------  -------             
shall pay all underwriting discounts and selling commissions applicable to the
included Registrable Shares.  In addition, the reasonable fees and disbursements
of one special counsel to Butler and the Holders shall be paid by Maxwell in
connection with each Demand Registration Statement or Piggyback Registration
Statement.

     SECTION 6.     Provision of Information.  In connection with any
                    ------------------------                         
registration pursuant to this Agreement, Butler will furnish to Maxwell in
writing such information regarding Butler, its Common Stock holdings and the
facts regarding the proposed sale or distribution of Registrable Shares and such
documents as Maxwell shall reasonably request and as shall be required in
connection with the actions to be taken by Maxwell pursuant to this Agreement.

     SECTION 7.     Indemnification.
                    --------------- 

     (a) In the event of any registration of any Registrable Shares under the
Act pursuant to this Agreement, Maxwell shall indemnify and hold harmless
Butler, each underwriter of Registrable Shares, if any, acting on behalf of
Butler, each broker or any other person acting on behalf of Butler, each officer
and director, if any, of any of the foregoing persons and each other person, if
any, who controls any of the foregoing persons, within the meaning of the Act,
against any losses, claims, damages or liabilities, joint or several, to which
any of the foregoing persons may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon (i) an untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement
under which Registrable Shares are registered under the Act, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, or any documents prepared and/or furnished by Maxwell incident to the
registration of any Registrable Shares or (ii) the omission or alleged omission
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and shall reimburse Butler, the underwriter, broker or other
person acting on behalf of Butler, each such officer or director, and each such
controlling person for any legal or any other expenses reasonably incurred by
any of them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that Maxwell shall not be liable
                             --------  -------                                  
in any such case to Butler, any underwriter of Registrable Shares, if any,
acting on behalf of Butler, any broker or any other person acting on behalf of
Butler, any officer or director, if any, of any of the foregoing persons or any
other person, if any, who controls any of the foregoing persons, within the
meaning of the Act to the extent that any loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from such Registration Statement, preliminary
prospectus, final prospectus or amendment or supplement or any document incident
to the registration if such untrue statement

                                      -6-

 
or alleged untrue statement or omission was made in reliance upon or in
conformity with written information furnished to Maxwell specifically for use in
the preparation thereof by Butler or such other person seeking indemnification.

     (b) Butler shall indemnify and hold harmless (in the same manner and to
same extent as set forth in Section 7(a)) Maxwell, each director of Maxwell,
                            ------------                                    
each officer of Maxwell who shall sign such Registration Statement and any
person who controls Maxwell within the meaning of the Act, with respect to any
untrue statement or alleged untrue statement in or omission from such
Registration Statement, preliminary prospectus or final prospectus contained
therein, amendment or supplement thereto or any document incident to the
registration, if such untrue statement or alleged untrue statement or omission
was made in reliance upon, and in conformity with, written information furnished
to Maxwell by Butler (or any person acting on Butler's behalf) specifically for
use in the preparation of such registration statement, preliminary prospectus,
final prospectus, amendment, supplement or document; provided that the maximum
                                                     --------                 
amount of liability in respect of such indemnification shall be limited to an
amount equal to the net proceeds actually received by Butler from the sale of
Registrable Shares effected pursuant to such registration.

     (c) Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs of this Section 7, the indemnified party will, if a claim in respect
                   ---------                                                   
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of the action.  The failure to so notify the
indemnifying party shall relieve the indemnifying party of its obligation under
this Section 7 to the extent such failure has materially prejudiced the
     ---------                                                         
indemnifying party.  The indemnifying party will be entitled to participate in,
and to assume the defense of, any such action brought against such indemnified
party, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be responsible for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof; provided, however, that if any indemnified party shall have reasonably
         --------  -------                                                     
concluded that there may be one or more legal defenses available to such
indemnified party that conflict with those available to the indemnifying party,
or if the indemnifying party fails to take reasonable steps necessary to defend
diligently the claim after receiving notice from the indemnified party that it
believes the indemnifying party has failed to defend diligently, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party and such indemnifying party shall reimburse
such indemnified party and any person controlling such indemnified party for
that portion of the reasonable fees and expenses of any counsel retained by the
indemnified party that are reasonably related to the matters covered by the
indemnity agreement provided in this Section 7.  If the indemnifying party is
                                     ---------                               
prohibited from assuming the defense of an action as a result of the preceding
sentence, then the indemnified party may not settle such action without the
prior written consent of the indemnifying party.  The indemnified parties shall
be kept fully informed of such action, suit or proceeding at all stages thereof
whether or not they are

                                      -7-

 
represented. The parties hereto agree to render to each other such assistance as
they may reasonably require of each other in order to ensure the proper and
adequate defenses of any such action, suit or proceeding.

     (d) If the indemnification provided for in this Section 7 shall for any
                                                     ---------              
reason be unavailable to any indemnified party in respect of any loss, claim,
damage or liability, or action referred to herein, then each indemnifying party
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand or the indemnified party on the other with respect to the statements or
omissions that resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations.  The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement or omission of a material fact relates to information supplied
by the indemnifying party on the one hand or the indemnified party on the other,
the intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission.  The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this paragraph
(d) shall be deemed to include, for purposes of this paragraph (d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.  No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

     (e) The indemnifying party shall not make any settlement of any claims
indemnified against hereunder without the written consent of the indemnified
party, which consent shall not be unreasonably withheld; provided, however, that
                                                         --------  -------      
the indemnifying party may settle any claim without the consent of the
indemnified party if (i) such settlement makes no admission or acknowledgment of
liability or culpability with respect to the indemnified party, (ii) includes a
complete release of the indemnified party, and (iii) does not require the
indemnified party to make any payment or forego or take any action.

     SECTION 8.     Limitations on Registration Rights of Others.  Maxwell
                    ---------------------------------------------         
represents and warrants to Butler that, other than pursuant to this Agreement,
the Holders' Registration Rights Agreement, and the Stock Option and
Registration Rights Agreement dated as of January 26, 1994, between Maxwell and
Mark J. Cocozza, it has not granted to any individual or entity the right to
request or require Maxwell to register any securities issued by Maxwell.
Maxwell also covenants and agrees with Butler that, from and after the date
hereof, Maxwell will not, without the prior written consent of Butler, enter
into any agreement with any holder or prospective holder of any securities of
Maxwell which allows such holder or prospective holder to require Maxwell to
effect a registration of such securities or to include such securities in any
registration filed under Sections 1 or 3 hereof, except for (i) agreements under
                         -------- -    -                                        
which such rights are expressly subject and subordinated to the rights of
registration granted to Butler pursuant to this

                                      -8-

 
Agreement and (ii) agreements to effect registrations on Form S-8 of securities
issued by Maxwell upon the exercise of stock options (including, but not limited
to, the options granted to Mr. Cocozza pursuant to the Stock Option and
Registration Rights Agreement dated as of January 26, 1994 between Maxwell and
Mr. Cocozza).

     SECTION 9.     Notices.  Any notice, demand, request, consent or other
                    -------                                                
communication required or permitted to be given hereunder shall be in writing
and shall be effective (i) when personally delivered or delivered by telex (with
correct answer-back received) or telecopy on a business day during normal
business hours at the address or number designated below or (ii) on the business
day following the date of mailing by overnight courier, fully prepaid, addressed
to such address, whichever shall first occur.  The addresses for such
communications shall be:

          If to Maxwell:      Maxwell Shoe Company Inc.
                              101 Sprague Street
                              Hyde Park, Massachusetts 02136
                              (or, if by mail, P.O. Box 37
                              Readville, Massachusetts 02137)
                              Attention: President
                              Facsimile: (617) 364-9058
 
         With a copy to:      Gibson, Dunn & Crutcher LLP
                              333 South Grand Ave.
                              Los Angeles, California 90071-3197
                              Attention: Jonathan K. Layne, Esq.
                              Facsimile:(213) 229-7520
 
         If to Butler:        c/o GE Capital Equity Capital Group, Inc.
                              260 Long Ridge Road
                              Stamford, Connecticut 06927
                              Attention: William R. Kraus
                              Facsimile: (203) 357-3945
 
         With copies to:      General Electric Capital Corporation
                              260 Long Ridge Road
                              Stamford, Connecticut  06927
                              Attention: Counsel -- Equity Capital Group
                              Facsimile: (203) 357-3047

                              and

                              King & Spalding

                                      -9-

 
                              191 Peachtree Street
                              Atlanta, Georgia 30303-1763
                              Attention: John Hays Mershon, Esq.
                              Facsimile: (404) 572-5149

Any party hereto may from time to time change its address for notices under this
Section 9 by giving at least ten days' notice of such changed address to the
- ---------
other parties hereto.

     SECTION 10.    Binding Agreement.  This Agreement shall be binding upon,
                    -----------------                                        
and shall inure to the benefit of, the parties hereto and their respective
successors and assigns, including any successor to or assignee of the rights of
Butler permitted under Section 11.3 of the Operating Agreement and any purchaser
of any Registrable Shares, but this Agreement shall terminate as to any
Registrable Shares sold in a distribution thereof pursuant to a Demand
Registration or a Piggyback Registration pursuant to this Agreement.

     SECTION 11.    Governing Law.  This Agreement shall be governed by and
                    -------------                                          
construed in accordance with the internal laws of the State of New York
applicable to contracts made and to be performed in that State.

     SECTION 12.    Counterparts.  This Agreement may be executed in several
                    ------------                                            
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same agreement.

     SECTION 13.    Amendment.  This Agreement may not be amended or modified
                    ---------                                                
except by an instrument in writing signed by the parties hereto.

     SECTION 14.    Entire Agreement.  This Agreement constitutes the entire
                    ----------------                                        
agreement among Maxwell, Butler and, to the extent provided in Sections 1(b),
                                                               ------------- 
3(a)(ii) and 8, the Holders, with respect to the subject matter hereof and
- --------     -                                                            
supersedes all prior written and oral and all contemporaneous oral agreements
and understandings with respect to the subject matter hereof.

     IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
executed this Agreement as of the date first above written.


                                 MAXWELL SHOE COMPANY INC.



                                 By:/s/ James J. Tinagero
                                    __________________________________
                                    James J. Tinagero
                                    Executive Vice President

                                      -10-

 
                                 THE BUTLER GROUP INC.



                                 By:/s/ Douglas P. Haensel
                                    ___________________________________
                                    Douglas P. Haensel
                                    Executive Vice President


                                 HOLDERS:

                                 /s/ Maxwell V. Blum
                                 ______________________________________
                                 Maxwell V. Blum

                                 /s/ Betty Ann Blum
                                 ______________________________________
                                 Betty Ann Blum

                                 /s/ Marjorie W. Blum
                                 ______________________________________
                                 Marjorie W. Blum

                                 /s/ Mark J. Cocozza
                                 ______________________________________
                                 Mark J. Cocozza

                                 /s/ David Andelman
                                 ______________________________________
                                 David Andelman, as Trustee of the
                                 Eleanor S. Blum Trust Fund of the
                                 Maxwell V. Blum Irrevocable Trust
                                 dated 12/23/80

                                      -11-