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Public Offering Registration - IC ISAACS & CO INC - 10-3-1997

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Public Offering Registration - IC ISAACS & CO INC - 10-3-1997 Powered By Docstoc
					As filed with the Securities and Exchange Commission on October 3, 1997 Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

I.C. ISAACS & COMPANY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE (State of Incorporation) 2253 (Primary Standard Industrial Classification Code Number) 3840 BANK STREET BALTIMORE, MARYLAND 21224-2522 (410) 342-8200 52-1377061 (I.R.S. Employer Identification No.)

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
ROBERT J. ARNOT CHAIRMAN OF THE BOARD AND CO-CHIEF EXECUTIVE OFFICER I.C. ISAACS & COMPANY, INC. 350 FIFTH AVENUE, SUITE 1029 NEW YORK, NEW YORK 10118 (212) 563-2720 GERALD W. LEAR PRESIDENT AND CO-CHIEF EXECUTIVE OFFICER I.C. ISAACS & COMPANY, INC. 3840 BANK STREET BALTIMORE, MARYLAND 21224-2522 (410) 342-8200

(Name, address, including zip code, and telephone number, including area code, of agent for service) Copies of all communications, including all communications sent to the agent for service, should be sent to:
EARL S. WELLSCHLAGER, ESQUIRE PIPER & MARBURY L.L.P. 36 SOUTH CHARLES STREET BALTIMORE, MARYLAND 21201 (410) 539-2530 JOEL J. HUGHEY, ESQUIRE ALSTON & BIRD LLP 1201 W. PEACHTREE STREET ATLANTA, GEORGIA 30309 (404) 881-7000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT. IF ANY OF THE SECURITIES BEING REGISTERED ON THIS FORM ARE TO BE OFFERED ON A DELAYED OR CONTINUOUS BASIS PURSUANT TO RULE 415 UNDER THE SECURITIES ACT OF 1933, CHECK THE FOLLOWING BOX: / / IF THIS FORM IS FILED TO REGISTER ADDITIONAL SECURITIES FOR AN OFFERING PURSUANT TO RULE 462(B) UNDER THE SECURITIES ACT, PLEASE CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING: / / IF THIS FORM IS A POST-EFFECTIVE AMENDMENT FILED PURSUANT TO RULE 462(C) UNDER THE SECURITIES ACT, CHECK THE FOLLOWING BOX AND LIST THE SECURITIES ACT REGISTRATION STATEMENT NUMBER OF THE EARLIER EFFECTIVE REGISTRATION STATEMENT FOR THE SAME OFFERING: / / IF DELIVERY OF THE PROSPECTUS IS EXPECTED TO BE MADE PURSUANT TO RULE 434,

PLEASE CHECK THE FOLLOWING BOX: / / CALCULATION OF REGISTRATION FEE
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED COMMON STOCK, $.0001 PAR VALUE........... AMOUNT TO BE REGISTERED(1) 4,370,000 PROPOSED MAXIMUM OFFERING PRICE PER UNIT(2) $14.00 PROPOSED MAXIMUM AGGREGATE OFFERING PRICE $61,180,000.00 AMOUNT OF REGISTRATION FEE $18,540.00

(1) INCLUDES 570,000 SHARES OF COMMON STOCK SUBJECT TO AN OPTION GRANTED TO THE UNDERWRITERS BY THE COMPANY (AS HEREINAFTER DEFINED) TO COVER OVER-ALLOTMENTS, IF ANY. SEE "UNDERWRITING." (2) ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE IN ACCORDANCE WITH RULE 457 UNDER THE SECURITIES ACT. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

SUBJECT TO COMPLETION, DATED OCTOBER 3, 1997 PROSPECTUS INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

3,800,000 SHARES [LOGO] I.C. ISAACS & COMPANY, INC. COMMON STOCK All of the 3,800,000 shares of Common Stock offered hereby are being sold by I.C. Isaacs & Company, Inc. (the "Company"). Prior to the Offering, there has been no public market for the Common Stock of the Company. It is currently anticipated that the initial public offering price will be between $12.00 and $14.00 per share. See "Underwriting" for information relating to the determination of the initial public offering price. Application has been made to list the Common Stock on the Nasdaq National Market under the symbol "ISAC." SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
PRICE TO PUBLIC $ $ UNDERWRITING DISCOUNTS AND COMMISSIONS(1) $ $ PROCEEDS TO COMPANY(2) $ $

Per Share.......................................... Total(3)...........................................

(1) See "Underwriting" for a description of the indemnification arrangements with the Underwriters and other matters. (2) Before deducting offering expenses payable by the Company estimated to be $ . (3) The Company has granted the Underwriters a 30-day option to purchase up to 570,000 additional shares of Common Stock solely to cover over-allotments, if any. If such option is exercised in full, the total Price to Public, Underwriting Discounts and Commissions and Proceeds to Company will total $ , $ and $ , respectively. See "Underwriting." The shares of Common Stock are offered severally by the Underwriters named herein, subject to prior sale, when, as and if received and accepted by them, subject to their right to reject orders, in whole or in part, and to certain other conditions. It is expected that delivery of the certificates representing such shares will be made against payment therefor in immediately available funds
at the office of The Robinson-Humphrey Company, LLC on or about -----------------------The Robinson-Humphrey Company The date of this Prospectus is , 1997.

Legg Mason Wood Walker Incorporated , 1997

4

[PHOTOS OF PRODUCTS AND MODELS] NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON STOCK OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON STOCK OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION TO SUCH PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.

"Lord Isaacs-Registered Trademark-," "I. C. Isaacs-Registered Trademark-," "Pizzazz-Registered Trademark-" and "I.G. Design-Registered Trademark-" are trademarks of the Company. In addition, subject to the closing of the Settlement (as described herein), "Boss-Registered Trademark-" will also be a trademark of the Company. All other trademarks or service marks, including Beverly Hills Polo Club-Registered Trademark-, appearing in this Prospectus are the property of their respective owners and are not the property of the Company.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK, INCLUDING OVER-ALLOTMENT, STABILIZING AND SHORT-COVERING TRANSACTIONS IN SUCH SECURITIES, AND THE IMPOSITION OF A PENALTY BID, IN CONNECTION WITH THE OFFERING. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING." 2

PROSPECTUS SUMMARY THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS (INCLUDING THE NOTES THERETO) APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS OTHERWISE NOTED, THE "COMPANY" REFERS TO I.C. ISAACS & COMPANY, INC. (FORMERLY I.G. DESIGN, INC.) AND ITS PREDECESSORS, SUBSIDIARIES AND AFFILIATED COMPANIES, INCLUDING I.C. ISAACS & COMPANY L.P. (SEE "COMPANY ORGANIZATION"). UNLESS OTHERWISE NOTED, ALL COMMON STOCK SHARE AMOUNTS, PER SHARE DATA AND OTHER INFORMATION SET FORTH IN THIS PROSPECTUS (I) HAVE BEEN ADJUSTED TO REFLECT A 370.4847-FOR-1 STOCK SPLIT, WHICH WILL BE EFFECTED PRIOR TO CONSUMMATION OF THE OFFERING, (II) GIVE EFFECT TO THE REORGANIZATION (AS DEFINED IN "COMPANY ORGANIZATION") AND (III) ASSUME THAT THE UNDERWRITERS' OVER-ALLOTMENT OPTION HAS NOT BEEN EXERCISED. THE COMPANY I.C. Isaacs & Company, Inc. is a rapidly growing designer, manufacturer and marketer of branded sportswear. Founded in 1913, the Company offers full lines of sportswear for young men, women and boys under the BOSS brand in the United States and Puerto Rico and sportswear for men and women under the Beverly Hills Polo Club brand in the United States, Puerto Rico and Europe. Through a focused strategy of providing fashionable, branded merchandise at value prices, the Company has emerged as a significant fashion source for youthful consumers who purchase sportswear and outerwear through specialty and department stores. The Company also offers women's sportswear under various other Company-owned brand names as well as under third-party private labels. In the first six months of 1997, net sales and operating income totaled $77.7 million and $8.8 million, respectively, as compared to $51.9 million and $3.7 million in the first six months of 1996. The Company manufactures and markets sportswear under the BOSS brand for sale at specified price points in the United States and Puerto Rico and has positioned the BOSS line to appeal to consumers who desire a fresh, urban, fashion-forward look. Through creative and innovative marketing, the Company has created powerful brand appeal for the BOSS line and has become an active influence in young men's fashion. The BOSS collection has been expanded from an initial line of denim products into a full array of sportswear consisting of jeans, tee shirts, sweatshirts, shorts, knit and woven shirts and outerwear, all of which are characterized by innovative design, creative graphics and bold uses of color. The Company also markets a juniors' sportswear line under the BOSS brand for young women, which includes a full selection of denim products and active sportswear. Over the past three years, the Company's net sales of BOSS sportswear increased at a compounded annual growth rate of 24.7%. In 1996, net sales of BOSS sportswear accounted for 72.6% of the Company's net sales. As exclusive licensee for Beverly Hills Polo Club sportswear in the United States, Puerto Rico and Europe, the Company targets men and women who desire updated traditional sportswear at competitive prices. To reach a broader demographic customer base, the Beverly Hills Polo Club collection combines contemporary design details and innovative fabrics with classic American sportswear styling. The Beverly Hills Polo Club collection consists primarily of cotton clothing, including jeans, pants, shorts, knit and woven shirts and outerwear targeting the active, image-conscious consumer. Since the line's introduction in the spring of 1994, the Company's net sales of Beverly Hills Polo Club sportswear increased at a compounded annual growth rate of 92.7%. In 1996, net sales of Beverly Hills Polo Club sportswear accounted for 12.0% of the Company's net sales. In the late 1980's, management made a decision to change the Company's marketing focus from a manufacturing-driven to a brand-driven strategy. As a result, the Company believes it has developed distinct competitive strengths that position it for continued success. The Company's key competitive strengths include: - EMPHASIS ON BRAND IDENTITY. The Company believes that brand identity, as well as the image and lifestyle that a brand conveys, are important factors that influence retail purchasing decisions. Both the BOSS and Beverly Hills Polo Club lines have strong brand identities and enable the Company 3

to offer a broad continuum of designs and products well recognized by fashion-conscious consumers. - COMBINATION OF FASHION AND VALUE. Through its manufacturing, sourcing and merchandising expertise, the Company achieves a distinct combination of fashion and value. The Company provides its customers with fashionable, brand name sportswear which typically sells at retail prices below those of many well known designer brands. - CREATIVE AND INNOVATIVE MARKETING. Through a coordinated merchandising, advertising and marketing strategy, the Company has built strong name recognition and brand image for its products. The Company targets youthful consumers who are influenced by fashion, music and sports by utilizing a variety of advertising media, including television, print, outdoor signage and professional sports sponsorships. - FLEXIBLE MANUFACTURING AND SOURCING. The Company believes that its ability to source products from its United States facilities and third party foreign and domestic manufacturers enhances the Company's production flexibility and capacity while enabling it to control more efficiently the delivery, quality and pricing of its products. The Company's growth strategy includes continued capitalization on its competitive strengths and the implementation of specific strategies for continued expansion. The Company's principal growth strategies are as follows: - BROADEN PRODUCT OFFERINGS. The Company believes that significant additional expansion opportunities exist in certain product categories under both the BOSS and Beverly Hills Polo Club brands. Expansion within the BOSS product line is expected to be driven by tops and outerwear as well as the development of the boys', youth and juniors' lines. In addition, the Company recently added two new product categories under the BOSS brand, polo shirts and swimwear, which are in the early stages of development. Similarly, the Beverly Hills Polo Club brand includes a number of product lines that are in the early stages of market penetration, such as outerwear, and a number of potential product line expansions, such as men's dress shirts. To further develop the Beverly Hills Polo Club brand, product offerings within the women's line are being expanded, and the Company is reorganizing and increasing its women's sales force. - ENHANCE MARKETING PROGRAMS. While the Company believes that its current marketing strategy is one of its primary competitive strengths, the Company intends to continue its efforts to increase sales by enhancing consumer recognition of its brand names and images through expanded marketing efforts. These efforts will include increased television, print, outdoor and point-of-sale advertising, as well as an expanded "Shop-in-Shop" program at the retail level. - EXPAND CHANNELS OF DISTRIBUTION. As demand for its sportswear increases, the Company believes that it can continue to expand and penetrate various channels of distribution. In recent years, the Company has expanded its distribution channels beyond specialty stores and specialty store chains with its BOSS label to begin significant distribution to department store customers. The Beverly Hills Polo Club brand has not penetrated the department store channel to the same extent as the BOSS brand, and the expanded distribution of Beverly Hills Polo Club products is a primary growth focus of the Company. - INCREASE EUROPEAN PRESENCE. The Company believes that it is well positioned to capitalize on the acceptance of the Beverly Hills Polo Club brand name by continuing to expand its European sportswear distribution. The classic American sportswear look conveyed by the Beverly Hills Polo Club line is popular with European youth, and the Company is expanding its wholesale and retail channels of distribution in Europe to meet this increasing demand. The Company currently has distributors in eight countries in Europe and has three franchise stores in Spain. 4

The Company's principal executive offices are located at 3840 Bank Street, Baltimore, Maryland 21224-2522 (telephone number (410) 342-8200) and 350 Fifth Avenue, Suite 1029, New York, New York 10118 (telephone number (212) 563-2720). THE OFFERING
Common Stock offered by the Company hereby......... Common Stock to be outstanding after the Offering (1).............................................. Use of Proceeds.................................... 3,800,000 shares 9,800,000 shares The estimated net proceeds of the Offering of approximately $45.4 million will be used (i) to repay approximately $20.0 million of the Company's outstanding debt under the Company's credit facilities, (ii) to pay the Initial S Corporation Distribution (as hereinafter defined) of approximately $15.4 million and the Subsequent S Corporation Distribution (as hereinafter defined) estimated to be between $4.0 million and $5.0 million and (iii) for general corporate and working capital purposes. See "Use of Proceeds." Application has been made for quotation of the Common Stock on the Nasdaq National Market under the symbol "ISAC."

Nasdaq National Market Symbol......................

(1) Excludes 500,000 shares of Common Stock reserved for issuance under the Company's 1997 Omnibus Stock Plan. See "Management--1997 Omnibus Stock Plan." RISK FACTORS See "Risk Factors" beginning on page 7 for a discussion of certain information that should be considered by prospective purchasers of the Common Stock offered hereby. 5

SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA The summary historical and pro forma consolidated financial data set forth below should be read in conjunction with the more detailed consolidated financial statements, including the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere herein.
YEAR ENDED DECEMBER 31, -----------------------------------------------------1992 1993 1994 1995 1996 --------- --------- --------- --------- ---------STATEMENT OF INCOME DATA: Net sales...................................... Cost of sales.................................. Gross profit................................... Selling, distribution, general and administrative expenses...................... Recovery of legal fees......................... Operating income............................... Interest expense............................... Other income (expense) (1)..................... Minority interest.............................. Income before extraordinary items (1)(2)....... PRO FORMA STATEMENT OF INCOME DATA: Income before income taxes..................... Income tax provision (3)....................... Net income..................................... Net income per share (4)....................... Weighted average common shares outstanding (4).......................................... (IN THOUSANDS, EXCEPT PER SHARE DATA) $ 62,232 48,051 --------14,181 12,282 ---------1,899 997 55 ---------957 3,184 1,236 --------$ 1,948 ----------------$ 72,414 54,880 --------17,534 15,214 ---------2,320 1,260 1,215 ---------2,275 2,275 933 --------$ 1,342 ----------------$ 85,298 62,216 --------23,082 $ 93,271 68,530 --------24,741 $ 118,655 84,421 ---------34,234 $ 51,899 36,224 --------15,675 $ 77,710 52,021 --------25,689 SIX MONTHS ENDED JUNE 30, -------------------1996 1997 --------- ---------

18,333 20,267 25,627 12,018 16,984 --(718) -(117) --------- --------- ---------- --------- --------4,749 4,474 9,325 3,657 8,822 1,191 1,247 1,365 660 922 1,235 (3) 85 82 22 (53) (33) (82) (31) (79) --------- --------- ---------- --------- --------4,740 3,191 7,963 3,048 7,843 5,129 2,103 --------$ 3,026 ----------------3,191 1,308 --------$ 1,883 ----------------7,963 3,265 ---------$ 4,698 ------------------$ 0.65 ------------------7,185 3,048 1,250 --------$ 1,798 ----------------7,843 3,216 --------$ 4,627 ----------------$ 0.64 ----------------7,185

AS OF JUNE 30, 1997 -------------------------------------AS FURTHER AS ADJUSTED ADJUSTED ACTUAL (5) (5) --------- -------------- ----------BALANCE SHEET DATA: Working capital........................................................................ Total assets........................................................................... Distribution payable................................................................... Notes payable and long-term debt....................................................... Stockholders' equity................................................................... (IN THOUSANDS) $ 19,388 55,116 -19,352 22,865 $ 3,988 56,416 15,400 19,352 8,766 $ 49,388 67,516 -452 54,165

(1) Includes income from settlement of license disputes of $0.3 million, $1.5 million and $1.2 million in 1992, 1993 and 1994, respectively. (2) Before extraordinary gains of $2.2 million in 1992 and $0.4 million in 1994 related to extinguishment of debt. (3) Reflects historical provision for income taxes in 1992 and pro forma provision for income taxes as if the Company had been taxed as a C corporation for the years ended December 31, 1993, 1994, 1995 and 1996 and the six months ended June 30, 1996 and 1997, respectively. (4) Pro forma income per share is based on the weighted average number of shares of Common Stock outstanding plus the estimated number of shares being sold by the Company which would be necessary to fund the distribution of earned and undistributed S corporation earnings totaling approximately $15.4 million as of June 30, 1997. See "Use of Proceeds." (5) Adjusted to reflect (i) the liability for the Initial S Corporation Distribution consisting of all earned but undistributed S corporation earnings as of June 30, 1997 and (ii) the recording of an estimated $1.3 million of deferred tax assets and corresponding tax benefit determined as if the Company's S corporation status had been terminated on June 30, 1997. Further adjusted to reflect the sale of 3.8 million shares of Common Stock by the Company assuming an initial public offering price of $13.00 and the application of approximately $15.4 million of the net proceeds to pay the Initial S Corporation Distribution and oustanding borrowings under its credit facilities. The Company anticipates that the Subsequent S Corporation Distribution (as hereinafter defined) consisting of all earned but undistributed S corporation earnings for the period beginning on July 1, 1997 and ending on the S Termination Date (as hereinafter defined) will be between $4.0 million and $5.0 million. See "Use of Proceeds" and "Company Organization." 6

RISK FACTORS PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY SHOULD CONSIDER CAREFULLY THE FACTORS SET FORTH BELOW, AS WELL AS OTHER INFORMATION SET FORTH IN THIS PROSPECTUS, IN EVALUATING AN INVESTMENT IN THE COMMON STOCK. THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS AND THE TIMING OF CERTAIN EVENTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED BY SUCH FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS DISCUSSED IN THIS PROSPECTUS, INCLUDING THE FACTORS SET FORTH BELOW AND IN "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" AND "BUSINESS," AS WELL AS THOSE DISCUSSED ELSEWHERE IN THIS PROSPECTUS. COMPETITION AND OTHER FACTORS AFFECTING THE APPAREL AND RETAILING INDUSTRIES The apparel industry is highly competitive, fragmented and subject to rapidly changing consumer demands and preferences. The Company believes that its success depends in large part upon its ability to anticipate, gauge and respond to changing consumer demands and fashion trends in a timely manner and upon the continued appeal to consumers of the BOSS and Beverly Hills Polo Club brand names. Failure by the Company to identify and respond appropriately to changing consumer demands and fashion trends could adversely affect consumer acceptance of its products and could have a material adverse effect on the Company's financial condition and results of operations. The Company competes with numerous apparel manufacturers and distributors, many of which have greater financial resources than the Company. The Company's products also compete with a substantial number of designer and non-designer lines. Although the level and nature of competition differ among its product categories, the Company believes that it competes primarily on the basis of brand image, quality of design and value pricing. Increased competition by existing and future competitors could result in reductions in sales or prices of the Company's products, which could have a material adverse effect on the Company's financial condition and results of operations. In addition, the apparel industry historically has been subject to substantial cyclical variations, and a recession in the general economy or uncertainties regarding future economic prospects that affect consumer spending habits could have a material adverse effect on the Company's financial condition and results of operations. DEPENDENCE UPON THIRD PARTY RIGHTS AND LICENSES The Company's business is heavily dependent upon its use of the BOSS and Beverly Hills Polo Club brand names and images, which are in turn dependent upon the existence and continuation of certain third party rights and covenants. The Company's right to use the BOSS brand in the manufacture and sale of apparel will be substantially dependent on third party concurrent use and license agreements. Pursuant to a recent settlement of litigation among the Company, Brookhurst, Inc. ("Brookhurst") and certain other parties (the "Settlement"), and subject to the satisfaction of certain conditions to the closing of the Settlement, the Company will acquire certain domestic and foreign trademark common law and registration rights to the BOSS name previously owned by Brookhurst, the Company's former licensor. The Company will then convey the foreign rights to the BOSS brand to a third party and receive a license to continue to manufacture apparel in certain foreign countries using the BOSS brand for sale in the United States and Puerto Rico. The Company will retain ownership of domestic rights to the BOSS brand, which will be subject to a concurrent use agreement. The Company's owned and licensed rights will be subject to material restrictions on the Company's right to manufacture and sell apparel using the BOSS brand. The Company's use of the BOSS brand name and image will be limited to certain specified products at specified price points in the United States and Puerto Rico. The initial term of the BOSS agreements is four years; however, such agreements may be extended at the Company's option through December 31, 2007. The Company is also dependent upon the rights of the licensor of the Beverly Hills Polo Club brand name in the use of such name on the Company's products. The Company's licenses for use of the Beverly Hills Polo Club brand name and image are limited to certain specified products in the United States, Puerto Rico and Europe and may be extended at the Company's option through December 31, 2004. There can be no assurance that the Company will be able to retain its right to use the BOSS And Beverly Hills Polo Club brand names or enter into comparable arrangements upon the expiration of the current 7

agreements. In addition, each of the agreements contains provisions that, under certain circumstances (not all of which are under the Company's control), could permit the licensor and third parties to terminate the agreements. Such provisions include, among other things (i) a default in the payment of certain amounts payable under the applicable agreement that continues beyond the specified grace period and (ii) the failure to comply with the covenants contained in the applicable agreement. Any termination could have a material adverse effect on the Company's financial condition or results of operations. In addition, under the operative agreements, the licensor and third parties will retain the right to produce, distribute, advertise and sell, and to authorize others to produce, distribute, advertise and sell, directly or through others, certain garments that are similar to some of the Company's products. Any such production, distribution, advertisement or sale of such garments by such parties or other authorized parties could have a material adverse effect on the Company's financial condition or results of operations. No assurance can be given that others will not assert rights in, or ownership of, these trademarks or other proprietary rights. If successful on the merits, such claims could have a material adverse effect on the Company's financial condition or results of operations. In the event of any litigation arising from such claim, any claiming party could have significantly greater resources than the Company to pursue litigation of such claims and the Company could be forced to incur substantial costs to defend legal actions taken against it relating to the Company's use of trademarks or other proprietary rights. In addition, if any such third party is successful in challenging the Company's use of trademarks, the Company could be forced to pay significant damages or enter into expensive royalty or licensing arrangements with such third party. See "Business--License and Other Rights Agreements." RISKS ASSOCIATED WITH ACHIEVING AND MANAGING GROWTH The Company's net sales have grown substantially over the last three years. No assurance can be given that the level of net sales will not decline or that the Company will be successful in increasing net sales in the future. To manage growth effectively, the Company must anticipate trends, changes in styles and customer demand, continue to implement changes in certain aspects of its business, continue to expand its operations (including the development of a new distribution facility), attract and retain qualified personnel (including management), and develop, train and manage an increasing number of management-level and other employees. Any unexpected difficulties encountered during expansion, including possible delays in the construction and opening of the Company's new distribution facility, could have a material adverse effect on the Company's financial condition or results of operations. In addition, the Company extends credit to its customers and, due to growth, continues to experience increases in the amount of its outstanding accounts receivable. The failure to accurately assess the credit risk from its customers, changes in overall economic conditions and other factors could cause the Company's credit losses to increase, which could have a material adverse effect on the Company's financial condition or results of operations. DEPENDENCE UPON UNAFFILIATED MANUFACTURERS; FOREIGN OPERATIONS AND SOURCING Approximately 70% of the Company's manufacturing needs are currently met through contracting with third party manufacturers such that the Company is largely dependent upon independent contractors for the manufacture of its products. The Company believes that its dependence on independent contractors will continue to increase. The Company currently contracts with approximately 50 manufacturers in more than 10 countries. The Company does not have long-term contracts with any manufacturers. During 1996, approximately 9% of the Company's purchases of raw materials, labor and finished goods for its apparel were made in Mexico; approximately 28% were made in Asia; approximately 23% were made at third party facilities elsewhere in the United States; and the balance was made in Company-operated facilities in the United States. The inability of a manufacturer to ship the Company's products in a timely manner or to meet the Company's quality standards could adversely affect the Company's ability to deliver products to its customers in a timely manner. Delays in delivery caused by manufacturing delays, disruption in services of delivery carriers or other factors could result in cancellations of orders, refusals to accept deliveries or a reduction in purchase prices, any of which could have a material adverse effect on the Company's financial condition or results of operations. The Company's operations may also be affected 8

adversely by political instability resulting in the disruption of trade with the countries in which the Company's contractors are located, the imposition of additional regulations relating to imports, the imposition of additional duties, tariff and other charges on imports, significant fluctuations in the value of the dollar against foreign currencies or restrictions on the transfer of funds. The Company manufactures a substantial portion of its BOSS brand apparel through unaffiliated foreign manufacturers and, under the Settlement, the Company's activities through these manufacturers will be subject to a foreign manufacturing rights agreement. This agreement contains certain restrictions governing use of the BOSS brand and the operations of third party manufacturers over which the Company may have limited control. Any material breach of the terms of the foreign manufacturing rights agreement could result in a termination of the Company's rights to manufacture BOSS brand apparel in one or more foreign countries, or loss of its overall rights to manufacture abroad under the BOSS brand, either of which could have a material adverse effect on the Company's financial condition and results of operations. See "-- Dependence Upon Third Party Rights and Licenses." The Company's import operations are subject to constraints imposed by bilateral textile agreements between the United States and a number of foreign countries. These agreements, which have been negotiated bilaterally either under the framework established by the Arrangement Regarding International Trade in Textiles, known as the Multifiber Agreement, or other applicable statutes, impose quotas on the amounts and types of merchandise that may be imported into the United States from these countries. These agreements also allow the United States to impose restraints at any time and on very short notice on the importation of categories of merchandise that, under the terms of the agreements, are not currently subject to specified limits. Imported products are also subject to United States customs duties, which comprise a material portion of the cost of the merchandise. A substantial increase in customs duties could have a material adverse effect on the Company's financial condition or results of operations. The United States and the countries in which the Company's products are produced or sold may, from time to time, impose new quotas, duties, tariffs or other restrictions, or adversely adjust prevailing quota, duty or tariff levels, any of which could have a material adverse effect on the Company's financial condition or results of operations. The Company's policy is to notify its independent manufacturers through its agents of the expectation that such manufacturers operate in compliance with applicable laws and regulations. While the Company's policies promote ethical business practices and the Company's staff periodically visits and monitors the operations of its independent manufacturers, the Company does not control such manufacturers or their labor practices. The violation of labor or other laws by an independent manufacturer of the Company or the divergence of an independent manufacturer's labor practices from those generally accepted as ethical in the United States could have a material adverse effect on the Company's financial condition and results of operations. See "Business--Manufacturing and Product Sourcing." DEPENDENCE UPON KEY PERSONNEL The success of the Company is largely dependent upon the personal efforts and abilities of its senior management, particularly Messrs. Robert J. Arnot, Chairman of the Board and Co-Chief Executive Officer, Gerald W. Lear, President and Co-Chief Executive Officer, Gary B. Brashers, Vice President-- Manufacturing and Chief Operating Officer, Eugene C. Wielepski, Vice President--Finance and Chief Financial Officer, and Thomas P. Ormandy, Vice President--Sales. Effective upon consummation of the Offering, these individuals, in the aggregate, will beneficially own approximately 23.4% of the Company's outstanding Common Stock. The Company has entered into employment agreements with each of these individuals. See "Management--Employment Agreements." The loss of the services of one or more of such individuals for an extended period of time could have a material adverse effect on the Company's financial condition or results of operations. The Company maintains and is the beneficiary of life insurance policies in the amount of $1.0 million on the lives of each of Messrs. Arnot, Lear and Brashers and in the amount of $0.5 million on the life of Mr. Wielepski. 9

DEPENDENCE UPON CERTAIN CUSTOMERS The Company's three largest customers accounted for an aggregate of approximately 20% of net sales in 1996. No single customer or group of related customers accounted for more than 13.0% of the Company's net sales in 1996. The retail apparel industry has periodically experienced consolidation and other ownership changes. In the future, the Company's customers may consolidate, undergo restructurings, reorganizations or bankruptcies, or realign these affiliations, any of which could decrease the number of stores that carry the Company's products or increase the ownership concentration within the retail apparel industry. See "Business--Customers and Sales." AVAILABILITY AND PRICE OF FABRICS The Company is dependent upon the ability of its suppliers to furnish fabrics in sufficient volumes at fair prices and to meet performance, quality and delivery criteria for its domestic and Mexican pant producers. The Company does not have any contracts with its suppliers that obligate them to continue selling fabrics to the Company. If shortages of fabrics occur or if the prices of these fabrics rise, and if the Company is unable to increase its prices to recover such costs increases, a material adverse effect on the Company's financial condition or results of operations could result. See "Business--Manufacturing and Product Sourcing" and "--Quality Control." ENVIRONMENTAL CONTROLS AND OTHER REGULATORY REQUIREMENTS The Company is subject to various federal, state and local environmental laws and regulations governing, among other things, the discharge, storage, handling and disposal of a variety of hazardous and nonhazardous substances and wastes used in or resulting from its present and past operations. The Company's operations also are governed by laws and regulations relating to employee safety and health, principally the Occupational Safety and Health Act and regulations thereunder, that, among other things, establish exposure limitations for cotton dust, formaldehyde, asbestos and noise and regulate chemical and ergonomic hazards in the workplace. There can be no assurance that regulatory requirements will not become more stringent in the future or that the Company will not incur significant costs relating to these matters in the future. See "Business--Environmental Matters." LACK OF SIGNIFICANT OPERATING HISTORY IN EUROPE The Company acquired a license to distribute, manufacture and market Beverly Hills Polo Club brand sportswear in Europe in the third quarter of 1996 and has had no significant operating history against which to assess the reasonableness of its strategy to expand sales internationally. The Company's European business strategy relies heavily upon its ability to align itself with effective distributors that are able to market the Beverly Hills Polo Club products to retailers. The Company is also dependent upon the services of contract warehouse facilities for the timely and accurate shipment of its products to its distributors and retail stores. A general failure by the Company to maintain and control its existing international distribution arrangements or to procure additional international distribution relationships could adversely affect the Company's growth strategy, which could adversely affect the Company's financial condition or results of operations. Thus, no assurance can be given that the Company's international strategy will be successfully and properly implemented. In addition, due to the Company's utilization of franchise store arrangements in Europe, the Company's European expansion strategy is also dependent upon selecting franchisees that can successfully execute a retail strategy. CONTROL BY EXISTING STOCKHOLDERS Following the consummation of the Offering, the Company's existing stockholders, all of whom are parties to the Amended and Restated Shareholders' Agreement (the "Restated Shareholders' Agreement"), will beneficially own an aggregate of approximately 61.2% of the outstanding Common Stock. Accordingly, such stockholders will have the ability to control the election of directors and the results of other matters submitted to a vote of stockholders. Such concentration of ownership, together with the Restated Shareholders' Agreement and the anti-takeover effects of certain provisions in the Delaware 10

General Corporation Law and in the Company's Amended and Restated Certificate of Incorporation (the "Restated Certificate") and Amended and Restated By-laws (the "Restated By-laws"), may have the effect of delaying or preventing a change in control of the Company. See "--Anti-Takeover Provisions," "Description of Capital Stock" and "Certain Transactions--Restated Shareholders' Agreement." ANTI-TAKEOVER PROVISIONS The Company's Restated Certificate and Restated By-laws include provisions that may have the effect of discouraging a non-negotiated takeover of the Company and preventing certain changes of control. These provisions, among other things (i) classify the Company's Board of Directors into three classes serving staggered, three-year terms, (ii) permit the Company's Board of Directors, without further stockholder approval, to issue up to 5.0 million shares of preferred stock with rights and preferences determined by the Board of Directors at the time of issuance, (iii) require a 66 2/3% vote of the Company's stockholders to approve any amendment, addition, or termination of the Restated By-laws of the Company and (iv) restrict the ability of stockholders to call special meetings of the stockholders, nominate individuals for election to the Board of Directors, or submit stockholder proposals. The Restated Shareholders' Agreement designates Messrs. Robert J. Arnot, Gerald W. Lear, Ira J. Hechler and Jon Hechler as principal shareholders (the "Principal Shareholders") and provides that the other stockholders subject to the Restated Shareholders' Agreement (the "Non-Principal Shareholders") shall vote, in elections of directors to fill Class I or Class II of the Board of Directors, for nominees of the Principal Shareholders. In addition, pursuant to the terms of the Company's agreement for use of the BOSS brand name, certain specified changes in the control of ownership of the Company may result in termination of such agreement. The Restated Shareholders' Agreement also provides for certain rights of first refusal and "drag along" rights. The provisions of the Restated Certificate, the Restated By-laws and the Restated Shareholders' Agreement might, therefore, have the effect of inhibiting stockholders' ability to realize the maximum value for their shares of Common Stock that might otherwise be realized because of a merger or other event affecting the control of the Company. See "Description of Capital Stock" and "Certain Transactions--Restated Shareholders' Agreement." DILUTION The initial public offering price is substantially higher than the book value per share of Common Stock. Investors purchasing shares of Common Stock in the Offering will therefore incur immediate and substantial dilution of $7.80 per share. See "Dilution." ABSENCE OF PUBLIC MARKET AND POSSIBLE VOLATILITY OF STOCK PRICE Prior to the Offering, there has been no public market for the Common Stock, and there can be no assurance that an active trading market will develop or be sustained. The initial public offering price of the Common Stock offered hereby will be determined through negotiations among the Company and the Underwriters and may bear no relationship to the market price for the Common Stock after the Offering. Subsequent to the Offering, prices for the Common Stock will be determined by the market and may be influenced by a number of factors, including depth and liquidity of the market for the Common Stock, investor perceptions of the Company, changes in conditions or trends in the Company's industry or in the industry of the Company's significant customers, publicly traded comparable companies and general economic and other conditions. See "Underwriting." FUTURE SALES BY EXISTING STOCKHOLDERS; SHARES ELIGIBLE FOR FUTURE SALE The Common Stock offered hereby will be freely tradable (other than by an "affiliate" of the Company as such term is defined in the Securities Act of 1933, as amended ( the "Securities Act")) without restriction or registration under the Securities Act. Immediately after the Offering, the Company's existing stockholders will beneficially own an aggregate of approximately 61.2% of the outstanding Common Stock. Subject to the restrictions set forth below, such stockholders will be free to sell such shares from time to time to take advantage of favorable market conditions or for any other reason. Future sales of shares of 11

Common Stock by the Company and/or its stockholders could adversely affect the prevailing market price of the Common Stock. The Company and each of its executive officers, directors and stockholders beneficially owning in the aggregate 6.0 million shares of Common Stock have entered into lock-up agreements with The Robinson-Humphrey Company, LLC and Legg Mason Wood Walker, Incorporated, as representatives of the Underwriters, pursuant to which they have agreed not to, directly or indirectly, sell, offer to sell, contract to sell, solicit an offer to buy, grant any option for the purchase or sale of, assign, pledge, distribute or otherwise transfer, dispose of or encumber any of their shares of Common Stock (other than those being sold pursuant to this Offering) or any securities convertible into or exercisable or exchangeable for shares of Common Stock without the prior written consent of the representatives of the Underwriters, for a period of 180 days after the date of this Prospectus. In addition, certain restrictions on transfers of shares of Common Stock by the existing stockholders of the Company are contained in the Restated Shareholders' Agreement. Thereafter, approximately 5.96 million shares of Common Stock will be eligible for sale pursuant to Rule 144 promulgated under the Securities Act. Sales of substantial amounts of Common Stock in the public market, or the perception that such sales may occur, could have a material adverse effect on the market price of the Common Stock. See "Shares Eligible for Future Sale," "Underwriting" and "Certain Transactions--Restated Shareholders' Agreement." FORWARD-LOOKING STATEMENTS This Prospectus contains certain forward-looking statements including, among other things, the Company's anticipated growth strategies, the Company's intention to continue to develop new products under the BOSS and Beverly Hills Polo Club brand names, the Company's future expenditures on capital projects and advertising, construction and opening of the Company's new distribution facility, continued operation under the license and third party agreements relating to the BOSS and Beverly Hills Polo Club brands, European expansion, the Company's ability to limit credit risk exposure to its customers and other aspects of the business of the Company. These forward-looking statements are subject to risks and uncertainties, many of which are beyond the Company's control, which could cause actual results to differ materially from those contemplated in such forward-looking statements, including in particular the risks and uncertainties described under "Risk Factors," including, among other things (i) changes in the marketplace for the Company's products, including consumer tastes, (ii) the introduction of new products or pricing changes by the Company's competitors, (iii) changes in the economy and (iv) termination of one or more of its agreements for use of the BOSS and Beverly Hills Polo Club brand names in the manufacture and sale of the Company's products. Prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events or circumstances or otherwise. There can be no assurance that the events described in these forward-looking statements will occur. COMPANY ORGANIZATION BACKGROUND The Company was founded by Mr. Isaac C. Isaacs in Baltimore, Maryland in 1913. It remained a family-owned business until 1984, when it was reorganized as I.C. Isaacs & Company L.P. (the "Partnership") by a group comprised of management and outside investors. Since that time, the Company has operated as the Partnership's general partner. Ira J. Hechler, a director and stockholder of the Company, is currently the Partnership's limited partner. The business of the Company is conducted through the Partnership. Upon consummation of the Offering, the Company's wholly-owned subsidiary, Isaacs Design, Inc., will become the limited partner of the Partnership. See "--The Reorganization." PRIOR S CORPORATION STATUS Since January 1, 1993, the Company has elected to be treated for federal and state income tax purposes as an S corporation under Subchapter S of the Internal Revenue Code of 1986, as amended (the "Code"), and under comparable state laws. As a result, the Company's stockholders, rather than the 12

Company, have been taxed directly on the income of the Company for federal and certain state income tax purposes, whether or not such income was distributed. One day prior to the consummation of the transactions related to the Offering, the Company's S corporation status will be terminated (the "S Termination Date"). On the S Termination Date the Company will declare the following dividend distributions to the stockholders of record of the Company: (i) a dividend distribution in the aggregate amount of approximately $15.4 million, which represents all earned but undistributed S corporation earnings of the Company as of June 30, 1997 (the "Initial S Corporation Distribution"); and (ii) a dividend distribution in the aggregate amount of the Company's earned but undistributed S corporation earnings for the period beginning on July 1, 1997 and ending on the S Termination Date (the "Subsequent S Corporation Distribution" and, together with the Initial S Corporation Distribution, the "S Corporation Distribution"). Only stockholders of record as of the S Termination Date will participate in the S Corporation Distribution. The Initial S Corporation Distribution is expected to be paid on the date of consummation of the transactions relating to the Offering (the "Closing Date"); the Subsequent S Corporation Distribution is expected to be paid within 30 days after the Closing Date. The Company expects to pay the S Corporation Distribution with a portion of the net proceeds from this Offering. See "Use of Proceeds." On and after the S Termination Date, the Company will no longer be treated as an S corporation and, accordingly, will be fully subject to federal and state income taxes. See "Capitalization" and Summary of Accounting Policies to the Company's consolidated financial statements. THE REORGANIZATION Prior to the Closing Date, the Company will (i) form a wholly-owned subsidiary, Isaacs Design, Inc., which will acquire the outstanding 1% limited partnership interest in the Partnership from Ira J. Hechler in exchange for approximately $280,000 in cash, which is an amount equal to the book value of that interest, (ii) file with the Secretary of State of Delaware an Amended and Restated Certificate of Incorporation changing the authorized shares of capital of the Company from 20,000 shares of common stock, par value $1.00 per share ("Old Common Stock"), to 50.0 million shares of Common Stock, par value $.0001 per share (the "Common Stock"), and 5.0 million shares of preferred stock, par value $.0001 per share (the "Preferred Stock"), (iii) effect a 370.4847 for 1 stock split and (iv) declare a dividend in the amount of the S Corporation Distribution. All of such transactions are referred to collectively herein as the "Reorganization." USE OF PROCEEDS The net proceeds to be received by the Company from the Offering are estimated to be approximately $45.4 million, assuming an initial public offering price of $13.00 (the mid-point of the range set forth on the cover page of this Prospectus) and after deducting the estimated underwriting discount and offering expenses payable by the Company. The Company intends to use such net proceeds as follows: (i) to repay approximately $20.0 million of the Company's outstanding borrowings under its credit facilities; (ii) to pay the S Corporation Distribution (estimated to be between $19.0 million and $20.0 million); and (iii) for general corporate and working capital purposes. The Company's credit facilities consist of a $1.0 million term loan, which will mature on June 30, 2001 and has an annual interest rate equal to the prime rate of interest plus 2.5%, and a revolving line of credit, which will mature on June 30, 1998 and has an annual interest rate equal to the prime rate of interest plus 1.0%. Amounts outstanding under the Company's credit facilities were used for working capital purposes. Pending application of the net proceeds as described above, the Company will invest the net proceeds in short-term, interest bearing instruments or other investment grade securities. See "Company Organization" and "Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources." 13

DIVIDEND POLICY Since January 1, 1993, the Company has elected to be treated for federal and state income tax purposes as an S corporation. As a result, the Company's stockholders, rather than the Company, have been taxed directly on the earnings of the Company for federal and certain state income tax purposes, whether or not such earnings were distributed. In 1995, 1996 and thus far in 1997, the Company made cash distributions to its stockholders in the amounts of $2.9 million, $3.2 million and $6.4 million, respectively, all of which were used to fund the stockholders' tax obligations as a result of the Company's status as an S corporation. One day prior to the Closing Date, the Company's S corporation status will be terminated. See "Company Organization." The Company anticipates that, after payment of the S Corporation Distribution to stockholders of record as of the S Termination Date, all earnings of the Company will be retained for the foreseeable future for use in the operations of the Company's business. Purchasers of shares of Common Stock in the Offering will not receive any portion of the S Corporation Distribution. Any future determination as to the payment of dividends will be at the discretion of the Company's Board of Directors and will depend upon the Company's results of operations, financial condition, contractual restrictions and other factors deemed relevant by the Board of Directors. 14

CAPITALIZATION The following table sets forth the capitalization of the Company (i) as of June 30, 1997, (ii) as adjusted as of that date to give effect to the Initial S Corporation Distribution, termination of the Company's S corporation status and the recording of an estimated $1.3 million of net deferred tax assets determined as if the Company's S corporation status had been terminated on June 30, 1997 and (iii) as further adjusted to reflect the sale of 3.8 million shares of Common Stock by the Company in the Offering at an assumed initial public offering price of $13.00 per share (the mid-point of the range set forth on the cover page of this Prospectus), after deducting the estimated underwriting discount and offering expenses payable by the Company, and the application of the estimated net proceeds therefrom to pay the Initial S Corporation Distribution, outstanding borrowings under the credit facilities and the application of the remainder of the net proceeds as further described under "Use of Proceeds." The information below should be read in conjunction with the Company's consolidated financial statements and the related notes thereto, which are included elsewhere in this Prospectus.
AS OF JUNE 30, 1997 ------------------------------------AS AS FURTHER ACTUAL ADJUSTED(1) ADJUSTED(2) --------- ------------- ----------(IN THOUSANDS) 18,300 179 --------$ 18,479 ----------------$ -----------------600 273 --------873 -1 266 22,613 (15) --------22,865 --------$ 23,738 ----------------$ 18,300 179 ------------$ 18,479 ------------------------$ 15,400 ------------------------600 273 ------------873 -1 266 8,513 (15) ------------8,766 ------------$ 9,639 ------------------------$ 179 ----------179 --------------------$ ----------------------$ --

Short-term debt: Current maturities of term loan and revolving line of credit............ Current maturities of capital lease obligations......................... Total short-term debt................................................. Distribution payable......................................................

Long-term debt: Term loan, net of current maturities.................................... Capital lease obligations............................................... Total long-term debt.................................................. Stockholders' equity: Preferred Stock, par value $.0001 per share, 5,000,000 shares authorized, none issued and outstanding............................... Common Stock, par value $.0001 per share, 50,000,000 shares authorized, 6,037,048 shares issued; 6,000,000 shares outstanding, 9,837,048 shares issued and outstanding as further adjusted(3).................. Additional paid-in capital.............................................. Retained earnings....................................................... Treasury stock, at cost (37,048 shares)................................. Total stockholders' equity............................................ Total capitalization..................................................

273 ----------273 -1 45,666 8,513 (15) ----------54,165 ----------$ 54,438 ---------------------

(1) The as-adjusted amounts reflect the liability for the Initial S Corporation Distribution to the stockholders of approximately $15.4 million, which represents the earned but undistributed S corporation earnings as of June 30, 1997, the termination of the Company's S corporation status and the recording of an estimated $1.3 million of net deferred tax assets. See "Use of Proceeds" and "Company Organization." (2) Adjusted to reflect (i) the liability for the Initial S Corporation Distribution consisting of all earned but undistributed S corporation earnings as of June 30, 1997 and (ii) the recording of an estimated $1.3 million of net deferred tax assets determined as if the Company's S corporation status had been terminated on June 30, 1997. Further adjusted to reflect the sale of 3.8 million shares of Common Stock by the Company assuming an initial public offering price of $13.00 and the application of approximately $15.4 million of the net proceeds to pay the Initial S Corporation Distribution and outstanding borrowings under its credit facilities. See "Use of Proceeds" and "Company Organization." (3) Excludes 500,000 shares of Common Stock reserved for issuance pursuant to awards under the 1997 Omnibus Stock Plan (the "Plan"). See "Management--Employment Agreements" and "--1997 Omnibus Stock Plan." 15

DILUTION The net tangible book value of the Company at June 30, 1997 was approximately $21.0 million, or $3.51 per share of Common Stock. After giving effect to the Reorganization and the Initial S Corporation Distribution, as if the distribution had been recorded as of June 30, 1997 and the Company's S corporation status had terminated at such date, the as adjusted net tangible book value of the Company at June 30, 1997 would have been approximately $5.6 million or $0.93 per share of Common Stock. After giving effect to the sale by the Company of shares of Common Stock in the Offering at an assumed initial public offering price of $13.00 per share (the mid-point of the range set forth on the cover page of this Prospectus) and after deducting the estimated underwriting discount and offering expenses payable by the Company and the application of the estimated net proceeds therefrom to pay the Initial S Corporation Distribution, the as further adjusted net tangible book value of the Company at June 30, 1997 would have been approximately $51.0 million, or $5.20 per share. See "Company Organization" and "Use of Proceeds." This represents an immediate increase in net tangible book value of $4.27 per share to the Company's existing stockholders and an immediate net tangible book value dilution of $7.80 per share to investors purchasing shares in the Offering. The following table illustrates this per share dilution:
Initial public offering price per share (1)................. Net tangible book value per share at June 30, 1997........ Decrease attributable to pro forma adjustments............ As adjusted net tangible book value per share at June 30, 1997...................................................... Increase attributable to new investors in the Offering.... Net tangible book value, as further adjusted, per share after the Offering (2).................................... Dilution per share to new investors......................... $ 3.51 $ 13.00

(2.58) --------.93 4.27 --------5.20 --------$ 7.80 -----------------

The following table summarizes, on a pro forma basis as of June 30, 1997, the number of shares of Common Stock purchased from the Company, the total consideration paid and the average consideration paid per share by the existing stockholders and by the new investors, assuming an initial public offering price of $13.00 per share but before deducting the underwriting discount and estimated offering expenses:
SHARES PURCHASED ----------------------NUMBER PERCENT ---------- ----------Existing stockholders............................... New investors....................................... Total............................................. 6,000,000 3,800,000 ---------9,800,000 ------------------61.2% 38.8 ----100.0% --------TOTAL CONSIDERATION -------------------------AMOUNT PERCENT ------------- ----------$ 252,113 0.5% 99.5 ----100.0% --------AVERAGE PRICE PER SHARE ------------$ $ 0.04 13.00

49,400,000 ------------$ 49,652,113 -------------------------

(1) Before deducting estimated underwriting discounts and commissions and estimated expenses of the Offering payable by the Company. (2) Excludes 500,000 shares of Common Stock reserved for issuance pursuant to awards under the Plan. See "Management--1997 Omnibus Stock Plan." 16

SELECTED FINANCIAL DATA The selected financial data set forth below have been derived from the consolidated financial statements of the Company and the related notes thereto. The statement of income data for the years ended December 31, 1994, 1995 and 1996 and the balance sheet data as of December 31, 1995 and 1996 are derived from the consolidated financial statements of the Company, which have been audited by BDO Seidman, LLP, independent certified public accountants, and which are contained elsewhere in this Prospectus. The statement of income data for the years ended December 31, 1992 and 1993 and the balance sheet data as of December 31, 1992, 1993 and 1994 are derived from the consolidated financial statements of the Company, which have been audited but are not contained herein. Financial data as of June 30, 1997, and for the six months ended June 30, 1996 and 1997, are derived from consolidated financial statements which are unaudited but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such data. The results of operations for the six months ended June 30, 1997 are not necessarily indicative of the results to be expected for the entire year. The following selected financial data should be read in conjunction with the Company's consolidated financial statements and the related notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations," which are included elsewhere in this Prospectus.
YEAR ENDED DECEMBER 31, ----------------------------------------------------1992 1993 1994 1995 1996 --------- --------- --------- --------- --------(IN THOUSANDS, EXCEPT PER SHARE DATA) 62,232 48,051 --------14,181 6,679 3,756 1,847 ---------1,899 997 55 ---------957 2,227 --------$ 3,184 ----------------3,184 1,236 --------$ 1,948 ----------------$ 72,414 54,880 --------17,534 9,035 4,276 1,903 ---------2,320 1,260 1,215 ---------2,275 ---------$ 2,275 ----------------2,275 933 --------$ 1,342 ----------------$ 85,298 62,216 --------23,082 10,474 2,046 5,813 ---------4,749 1,191 1,235 (53) --------4,740 389 --------$ 5,129 ----------------5,129 2,103 --------$ 3,026 ----------------$ 93,271 68,530 --------24,741 12,101 2,379 5,787 ---------4,474 1,247 (3) (33) --------3,191 ---------$ 3,191 ----------------3,191 1,308 --------$ 1,883 ----------------$ $ 118,655 84,421 --------34,234 16,715 2,669 6,243 (718) --------9,325 1,365 85 (82) --------7,963 ---------$ 7,963 ----------------7,963 3,265 --------$ 4,698 ----------------$ 0.65 ----------------7,185

STATEMENT OF INCOME DATA: Net sales.......................................................... Cost of sales...................................................... Gross profit..................................................... Selling expenses................................................... Distribution and shipping expenses................................. General and administrative expenses................................ Recovery of legal fees............................................. Operating income................................................. Interest, net...................................................... Other income (expense) (1)......................................... Minority interest.................................................. Income before extraordinary item................................... Extraordinary item (2)............................................. Net income.......................................................

PRO FORMA STATEMENT OF INCOME DATA: Income before income taxes......................................... Income tax provision (3)........................................... Net income....................................................... Net income per share (4)........................................... Weighted average common shares outstanding (4).....................

SIX MONTHS ENDED -------------------JUNE 30, JUNE 30, 1996 1997 --------- --------STATEMENT OF INCOME DATA: Net sales.......................................................... Cost of sales...................................................... Gross profit..................................................... Selling expenses................................................... Distribution and shipping expenses................................. General and administrative expenses................................ Recovery of legal fees............................................. Operating income................................................. Interest, net...................................................... Other income (expense) (1)......................................... Minority interest.................................................. Income before extraordinary item................................... Extraordinary item (2)............................................. Net income....................................................... PRO FORMA STATEMENT OF INCOME DATA: Income before income taxes......................................... Income tax provision (3)........................................... Net income....................................................... Net income per share (4)........................................... Weighted average common shares outstanding (4)..................... 51,899 36,224 --------15,675 8,057 1,227 2,734 ---------3,657 660 82 (31) --------3,048 ---------$ 3,048 ----------------3,048 1,250 --------$ 1,798 ----------------$ $ 77,710 52,021 --------25,689 11,630 1,978 3,376 (117) --------8,822 922 22 (79) --------7,843 ---------$ 7,843 -----------------

7,843 3,216 --------$ 4,627 ----------------$ 0.64 ----------------7,185
AS OF JUNE 30, 1997 -------------------------AS

DECEMBER 31, -----------------------------------------------------

1992 --------BALANCE SHEET DATA: Working capital............................... Total assets.................................. Distribution payable.......................... Total debt.................................... Stockholders' equity.......................... $ 5,343 24,443 -8,640 9,924

1993 --------$ 6,787 27,201 -9,405 10,824

1994 --------$ 10,035 30,103 -8,798 14,428

1995 1996 --------- --------(IN THOUSANDS) $ 10,807 31,764 -8,645 14,645 $ 16,274 37,257 -7,796 19,393

ACTUAL --------$ 19,388 55,116 -19,352 22,866

ADJUSTED (5) --------------$ 3,988 56,416 15,400 19,352 8,766

AS FURTHER ADJUSTED (5) --------------BALANCE SHEET DATA: Working capital............................... Total assets.................................. Distribution payable.......................... Total debt.................................... Stockholders' equity.......................... $ 49,388 67,516 -452 54,165

(1) Includes income from settlement of license disputes of $0.3 million, $1.5 million and $1.2 million in 1992, 1993 and 1994, respectively. (2) In connection with the early extinguishment of certain debt, the Company recorded an extraordinary gain of $2.2 million and $0.4 million in 1992 and 1994, respectively. (3) Reflects historical provision for income taxes in 1992 and pro forma provision for income taxes as if the Company had been taxed as a C corporation for the years ended December 31, 1993, 1994, 1995 and 1996 and the six months ended June 30, 1996 and 1997, respectively. (4) Pro forma income per share is based on the weighted average number of shares of Common Stock outstanding plus the estimated number of shares being sold by the Company which would be necessary to fund the distribution of earned and undistributed S corporation earnings totaling approximately $15.4 million as of June 30, 1997. (5) Adjusted to reflect (i) the liability for the Initial S Corporation Distribution consisting of all earned but undistributed S corporation earnings as of June 30, 1997 and (ii) the recording of an estimated $1.3 million of net deferred tax assets determined as if the Company's S corporation status had been terminated on June 30, 1997. Further adjusted to reflect the sale of 3.8 million shares of Common Stock by the Company assuming an initial public offering price of $13.00 and the application of approximately $15.4 million of the net proceeds to pay the Initial S Corporation Distribution and outstanding borrowings under its credit facilities. 17

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE "SELECTED FINANCIAL DATA" AND THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND THE RELATED NOTES THERETO, WHICH ARE INCLUDED ELSEWHERE IN THIS PROSPECTUS. OVERVIEW During its first 77 years, the Company became one of the leading manufacturers of pants, trousers and jeans in the United States. The Company was able to utilize its fabric sourcing and manufacturing expertise to build a well known franchise in the men's and women's bottoms segment of the apparel industry. In this period, the Company's marketing efforts were typically driven by its manufacturing capabilities, and branding was limited to Company-owned brands and third-party private labels. In the late 1980's, management made a decision to change the Company's marketing focus from a manufacturing-driven to a brand-driven strategy. This fundamental shift within the Company reflected senior management's belief that the American sportswear market would be dominated by recognized brands with clearly established images. Management also concluded that increasing market share would go to those companies that were market-driven and able to service their customers with diversified manufacturing and sourcing capabilities. Recognizing its strength in bottoms manufacturing, in 1990 the Company entered into a license agreement for the exclusive use of the BOSS brand name on men's denim apparel and on all types of juniors' sportswear for the young women's market. In 1994, the Company expanded its license agreement to include use of the BOSS brand name on men's, women's, boys' and youth sportswear in the United States and Puerto Rico. In 1997, the Company's rights to manufacture and market BOSS sportswear were further expanded to allow broader product offerings and significant Company control over styling, advertising and distribution. In the fall of 1993, the Company entered into license agreements for the use of the Beverly Hills Polo Club brand name on men's and women's sportswear in the United States and Puerto Rico. License rights were expanded to include Europe in 1996 and to include men's dress shirts in 1997. See "Business--License and Other Rights Agreements." The Company also manufactures and markets women's sportswear under its own "I.C. Isaacs," "Lord Isaacs" and "Pizzazz" brand names and under third-party private labels. Over the past three years, the Company has completed its strategic repositioning from a manufacturing-driven company to a marketing and brand-driven company. Through a focused strategy of providing fashionable, branded merchandise at value prices, the Company has emerged as a significant fashion influence for youthful consumers who purchase sportswear through specialty and department stores. The Company's brand-driven market strategy is evidenced by the increase of licensed, branded apparel as a percentage of the Company's net sales. In 1996, the BOSS and Beverly Hills Polo Club brands comprised 72.6% and 12.0% of net sales, respectively. Concurrent with this strategy, the Company has also shifted its product mix from predominately bottoms to a full array of sportswear, including tops and outerwear. As a result, net sales of the BOSS tops and outerwear lines have more than doubled since 1994 to approximately $29 million in 1996. The Company has also expanded its branded lines to include sportswear for boys, youth and juniors. The Company's growth is also demonstrated by the increase in its backlog. As of June 30, 1997, the Company had unfilled orders of approximately $60 million, compared to approximately $43 million of such orders as of June 30, 1996. The Company expects to fill substantially all of these orders in 1997. See "Business--Backlog and Seasonality." The following table sets forth, for the periods indicated, the Company's net sales categorized by brand and product category: 18

YEAR ENDED DECEMBER 31, ------------------------------1994 1995 1996 --------- --------- --------MEN'S(1) BOSS Bottoms.................................................... BOSS Tops....................................................... BOSS Boys'...................................................... Men's BHPC...................................................... Men's Private Label............................................. Men's total................................................. WOMEN'S(1) BOSS Juniors'(2)................................................ Women's BHPC.................................................... Women's Other(3)................................................ Women's total............................................... Total net sales............................................. (IN THOUSANDS) $ 37,724 6,709 1,834 2,795 3,227 --------52,289 --------$ 37,234 15,883 3,264 5,219 4,299 --------65,898 --------$ 44,667 29,284 6,736 12,226 500 --------93,414 ---------

SIX MONTHS ENDED JUNE 30, -------------------1996 1997 --------- ---------

$

21,224 11,268 2,055 4,598 427 --------39,572 ---------

$

29,075 19,447 6,771 11,822 50 --------67,165 ---------

9,528 1,047 22,433 --------33,009 --------$ 85,298 -----------------

5,423 1,833 20,116 --------27,373 --------$ 93,271 -----------------

5,413 2,043 17,786 --------25,242 --------$ 118,655 -----------------

3,464 774 8,089 --------12,327 --------$ 51,899 -----------------

1,954 819 7,772 --------10,545 --------$ 77,710 -----------------

(1) The net sales totals incorporate product returns allocated in proportion to gross sales. (2) Results for the year ended December 31, 1994 include approximately $2.5 million of net sales of tee shirts and sweatshirts with unisex styling that were discontinued after the Company obtained a license to manufacture and sell men's BOSS tops in the fourth quarter of 1994. As a result, these products were recategorized in men's BOSS tops in 1995 and thereafter. (3) Includes Company-owned brands and third-party private labels. RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, the percentage relationship to net sales of certain items in the Company's consolidated statements of income for the periods shown below:
YEAR ENDED DECEMBER 31, --------------------------------1994 1995 1996(1) --------- --------- ----------100.0% 100.0% 100.0% 72.9 73.5 71.1 --------- ------------27.1 26.5 28.9 12.3 13.0 14.1 2.4 2.6 2.3 6.8 6.2 4.7 --------- ------------5.6% 4.7% 7.8% --------- --------------------- ------------SIX MONTHS ENDED JUNE 30, -------------------1996 1997(1) --------- --------100.0% 100.0% 69.8 66.9 --------- --------30.2 33 .1 15.5 15.0 2.4 2.5 5.3 4.2 --------- --------7.0% 11.4% --------- ----------------- ---------

Net sales................................................ Cost of sales............................................ Gross profit............................................. Selling expenses......................................... Distribution and shipping expenses....................... General and administrative expenses...................... Operating income.........................................

(1) Includes the receipt in 1996 and 1997 of approximately $0.7 million and $0.1 million, respectively, related to an agreement with the Company's insurance carrier to reimburse it for legal fees associated with litigation billed in prior years. 19

SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996 NET SALES. Net sales increased 49.7% to $77.7 million in the six months ended June 30, 1997 from $51.9 million in the six months ended June 30, 1996. Substantially all of this increase was due to higher volume shipments of BOSS and Beverly Hills Polo Club sportswear. Net sales of BOSS sportswear increased $19.2 million or 50.5% to $57.2 million primarily driven by strong growth in the men's tops, boys' and youth segments and continued strength of the jeans segment. Net sales of the BOSS tops segment were $19.4 million in the six months ended June 30, 1997 versus $11.3 million in the six months ended June 30, 1996. Net sales of Beverly Hills Polo Club sportswear increased $7.2 million or 133.3% to $12.6 million over the same period, primarily driven by strong growth in the men's business. International sales were insignificant in the six months ended June 30, 1997. Although international orders were received in the first quarter of 1997, the Company began to fulfill such orders in April, 1997. GROSS PROFIT. Gross profit increased 63.7% to $25.7 million in the six months ended June 30, 1997 from $15.7 million in the six months ended June 30, 1996. Gross profit as a percentage of sales increased to 33.1% from 30.2% over the same period. The increase in gross margin was due in part to the expansion of the BOSS tops product line, which typically carries a higher gross margin than the bottoms product line. In addition, the tops line had improved gross margins due to reduced costs on imported tops resulting from volume purchase discounts. Also, the continued shift of production of denim bottoms from the United States to Mexico and the accompanying decrease in labor and overhead costs contributed to the improved gross margin. The Company's improved gross margin was also a result of increased sales of products at full margin, particularly in the first quarter, offset somewhat by markdowns taken in the second quarter related to unsold spring and summer goods. SELLING, DISTRIBUTION, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, distribution, general and administrative ("SG&A") expenses increased 40.8% to $16.9 million in the six months ended June 30, 1997 from $12.0 million in the six months ended June 30, 1996. As a percentage of net sales SG&A expenses decreased to 21.7% from 23.2% over the same period. This improvement reflects overall declines in SG&A expenses resulting from cost containment efforts in certain expense areas and expense leverage associated with the Company's growth. Selling expenses increased $3.5 million to $11.6 million as a result of higher commissions to the Company's salespersons and higher royalty payments as sales of branded apparel continued to increase as a percentage of overall net sales. The Company believes that its royalty expense will continue to increase as the percentage of net sales of branded products increase. Advertising costs rose $0.3 million to $1.6 million over the same period as the Company continued to focus on enhancing the identity and image of its brands through increased media exposure. Distribution and shipping expenses increased $0.8 million to $2.0 million due to higher unit shipments and increased overtime costs. The Company opted to incur additional overtime wages rather than adding personnel to process the increase in unit shipments. General and administrative expenses rose $0.6 million to $3.3 million due to salary increases for existing employees and salaries and costs associated with the hiring of new management and administrative personnel. OPERATING INCOME. Operating income increased 137.8% to $8.8 million or 11.4% of net sales in the six months ended June 30, 1997, from $3.7 million or 7.0% of net sales in the six months ended June 30, 1996. This increase resulted primarily from the increase in net sales and gross profit margins. INTEREST EXPENSE. Interest expense increased $0.2 million to $0.9 million in the six months ended June 30, 1997 due to an increase in working capital borrowing requirements. In the six months ended June 30, 1997, the average debt balance was $15.9 million, with an average effective interest rate of 9.50%. In the six months ended June 30, 1996, the average debt balance was $9.9 million with an average effective interest rate of 9.25%. 20

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995 NET SALES. Net sales increased 27.2% to $118.7 million in 1996 from $93.3 million in 1995. Substantially all of the increase in net sales was due to greater unit volume shipments of both the BOSS and Beverly Hills Polo Club sportswear lines. Net sales of BOSS sportswear increased 39.3% to $86.1 million in 1996 from $61.8 million in 1995. The volume increase in BOSS sportswear was primarily driven by strong growth in the tops segment, continued strength of the jeans segment and, to a lesser extent, growth in the boys' and youth segments. Net sales of BOSS tops and outerwear nearly doubled from $15.9 million in 1995 to $29.3 million in 1996, as a result of the Company's continued product expansion and increased consumer acceptance and demand. The BOSS bottoms segment also showed strong growth, as net sales increased 20.2% in 1996 to $44.7 million. Net sales of Beverly Hills Polo Club sportswear increased 101.4% to $14.3 million during the same period primarily driven by strong growth in the men's segment. This success was due in part to increased acceptance of the product after its first full year of sales and the ongoing reconfiguration of the Company's Beverly Hills Polo Club sales force to more effectively market to specialty store customers. These increases in net sales were partially offset by a decline in sales of the Company's men's private label collection and women's Company-owned and private label collections as the Company continued to place more emphasis on branded labels. The Company discontinued the men's private label collection in 1996 due to unsatisfactory gross margins relative to BOSS and Beverly Hills Polo Club sportswear. International sales were insignificant in 1996. GROSS PROFIT. Gross profit increased 38.5% to $34.2 million in 1996 from $24.7 million in 1995. Gross profit as a percentage of net sales increased to 28.9% in 1996 from 26.5% in 1995. The increase in gross profit was primarily due to the expansion of the BOSS tops product line as a percentage of total net sales. The tops line had a higher gross margin due to reduced costs on imported tops resulting from volume purchase discounts. Also, the continued shift of production of denim bottoms from the United States to Mexico and accompanying decrease in labor and overhead costs contributed to the improved gross margin. SELLING, DISTRIBUTION, GENERAL AND ADMINISTRATIVE EXPENSES. SG&A expenses increased 22.7% to $24.9 million in 1996 from $20.3 million in 1995. As a percentage of net sales, SG&A expenses decreased to 21.1% in 1996 from 21.8% in 1995. This improvement reflects overall declines in SG&A expenses resulting from cost containment efforts in certain expense areas and expense leverage associated with the Company's growth. Selling expense increased $4.6 million to $16.7 million over the same period, as a result of higher commissions to the Company's salespersons and higher royalty payments to licensors on increased sales of branded merchandise. Also, advertising expenditures increased to $2.5 million from $1.5 million as the Company initiated an advertising campaign to promote the BOSS brand. Distribution and shipping expenses increased $0.3 million to $2.7 million due to higher unit shipments and overtime wages for employees at the Company's distribution center. The Company opted to incur additional overtime wages rather than adding personnel to process the increase in unit shipments. General and administrative expenses increased $0.4 million to $6.2 million during the same period primarily due to higher data processing expenses. OPERATING INCOME. Operating income increased 106.7% to $9.3 million or 7.8% of net sales in 1996, from $4.5 million or 4.7% of net sales in 1995. This increase primarily resulted from the increase in net sales and gross profit margins as well as the receipt of approximately $0.7 million related to an agreement with the Company's insurance carrier to reimburse it for legal fees associated with litigation billed in prior years. INTEREST EXPENSE. Interest expense increased to $1.4 million from $1.2 million in 1996 due to an increase in working capital borrowing requirements which was partially offset by a reduction in borrowing costs. For 1996, the average outstanding short-term debt balance was $9.8 million, with an average effective interest rate of 9.25%. For 1995, the average balance was $8.5 million, with an average effective interest rate of 9.88%. 21

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994 NET SALES. Net sales increased 9.4% to $93.3 million in 1995 from $85.3 million in 1994. Substantially all of this increase was due to greater unit shipments of BOSS sportswear which was due to greater penetration of the specialty store channel and initial shipments to a major department store chain. Net sales of BOSS sportswear increased $6.0 million or 10.8% to $61.8 million in 1995 primarily due to the expansion of the tops product line. The overall increase in net sales was partially offset by weaker sales of colored denim shorts. Net sales of Beverly Hills Polo Club sportswear increased $3.3 million or 86.8% to $7.1 million over the same period as it continued to grow from its initial introduction by the Company in the first quarter of 1994. There were no international sales in 1995 or 1994. GROSS PROFIT. Gross profit increased 6.9% to $24.7 million in 1995 from $23.1 million in 1994. However, gross profit as a percentage of net sales decreased to 26.5% from 27.1% over the same period. The decrease in gross profit as a percentage of net sales resulted from weaker sales of higher gross margin colored denim shorts combined with stronger sales of the Company's lower gross margin private label products. SELLING, DISTRIBUTION, GENERAL AND ADMINISTRATIVE EXPENSES. SG&A expenses increased 10.9% to $20.3 million in 1995 from $18.3 million in 1994. As a percentage of net sales, SG&A expenses increased to 21.8% from 21.5% in 1994 as the Company increased investment in organizational structure and personnel to support growth and expanded advertising. Selling expenses increased $1.6 million to $12.1 million during the same period primarily due to a $1.1 million increase in advertising expenditures. Total advertising expenditures more than tripled to $1.5 million as the Company significantly expanded its campaign to increase awareness of the BOSS brand. Also, commission expenses to the Company's salespersons and royalty payments to licensors rose as sales of BOSS and Beverly Hills Polo Club sportswear continued to increase as a percentage of total net sales. Distribution and shipping expenses increased $0.4 million to $2.4 million over the same period as a result of increased unit shipments and overtime wages for employees at the Company's distribution center. General and administrative expenses were essentially unchanged from the $5.8 million experienced in 1994 as the Company contained personnel costs. OPERATING INCOME. Operating income decreased 4.3% to $4.5 million or 4.7% of net sales in 1995, from $4.7 million or 5.6% of net sales in 1994. This decrease primarily resulted from lower gross margins coupled with higher SG&A expenses. INTEREST EXPENSE. Interest expense increased minimally to $1.3 million in 1995 primarily due to an increase in average outstanding borrowings. For 1995, the average outstanding short-term debt balance was $8.5 million, with an average effective interest rate of 9.88%. For 1994, the average balance was $6.6 million, with an average effective interest rate of 9.72%. OTHER INCOME (EXPENSE). There was no significant other income in 1995 as compared to other income of $1.2 million in 1994. In 1994, the Company received approximately $1.2 million as the final payment related to the settlement of a license dispute with a third party. EXTRAORDINARY ITEM. The Company recognized an extraordinary gain of $0.4 million in 1994 related to early extinguishment of senior subordinated debt due a former partner. There was no comparable item in 1995. LIQUIDITY AND CAPITAL RESOURCES The Company has relied primarily on internally generated funds, trade credit and asset-based borrowings to finance its operations and expansion. The Company's capital requirements primarily result from working capital needed for inventory and accounts receivable. 22

OPERATING CASH FLOW Cash used by operations totaled $5.9 million for the six months ended June 30, 1997 due to a significant increase in accounts receivable and inventory which resulted from higher sales of BOSS and Beverly Hills Polo Club sportswear. This was partially offset by higher levels of accounts payable and improved operating results. Cash used for investing activities totaled $0.6 million for the six months ended June 30, 1997 and was used primarily for the purchase of machinery for the Company's factories. Cash provided by financing activities totaled $7.1 million for the six months ended June 30, 1997. The Company borrowed $7.4 million under its credit facilities primarily to finance the growth in accounts receivable and inventory and borrowed $4.4 million to fund distributions to its stockholders for the payment of federal and state income taxes. As of June 30, 1997, the Company had working capital of $19.4 million compared to $16.3 million at December 31, 1996. The $3.1 million increase in working capital primarily resulted from a $8.9 million increase in accounts receivable and a $7.9 million increase in inventories resulting from higher sales of BOSS and Beverly Hills Polo Club sportswear and higher levels of finished goods. This was partially offset by a $1.1 million increase in accounts payable, a $1.0 million increase in the overdraft directly related to the higher inventory levels necessary to support anticipated sales growth in early 1997 and a $11.8 million increase in outstanding borrowings under the Company's revolving line of credit. Capital expenditures were $0.6 million for the six months ended June 30, 1997 and $0.7 million in both 1996 and 1995. The Company's capital expenditures were comprised primarily of purchases of computer equipment and sewing machinery for its domestic factories. The Company anticipates that capital expenditures will be approximately $6.0 to $7.0 million in 1998, primarily related to the construction of a new 150,000 square foot distribution center in Milford, Delaware to be financed through a mortgage loan. As of June 30, 1997, the Company had outstanding borrowings under its revolving line of credit and term loan facility of $18.9 million compared to $7.2 million as of December 31, 1996. The higher borrowing level was necessary to support the growth in accounts receivable and inventory experienced in the first half of 1997. Because of the Company's treatment as an S corporation for federal and state income tax purposes, the Company has provided funds to its stockholders for the payment of income taxes on the earnings of the Company. Accordingly, the Company made cash distributions to its stockholders in the amounts of $2.9 million, $3.2 million and $4.4 million in 1995, 1996 and thus far in 1997, respectively. Prior to the Closing Date, the Company will declare the S Corporation Distribution. On and after the S Terminiation Date, the Company will no longer be treated as an S corporation. After completion of the Offering, the Company's immediate cash flow needs will not reflect any dividend distributions to the Company's stockholders for payment of income taxes on the earnings of the Company. However, the Company will assume responsibility for payment of federal and state income taxes, which will partially offset the Company's former cash commitment to provide its stockholders with funds for the payment of income taxes. CREDIT FACILITIES The Company has an asset-based revolving line of credit with a lender that allows it to borrow up to $30 million based on a percentage of eligible accounts receivable and inventory. Outstanding borrowings at December 31, 1995 and 1996 were $7.2 million and $6.3 million, respectively. Borrowings under the revolving line of credit bear interest at the lender's prime rate plus 1.0%. Also, the Company has a term loan facility with the lender, which allows it to continually borrow up to $1.0 million. Outstanding borrowings under the term loan were $0.3 million and $0.9 million at December 31, 1995 and 1996, respectively. The Company will use a portion of the net proceeds of the Offering to repay the amounts outstanding under these credit facilities. See "Use of Proceeds." The Company intends to enter into a new credit facility after consummation of the Offering, which will replace the existing revolving line of credit and term loan facilities. 23

In October 1997, the Company borrowed $11.3 million to finance the acquisition of certain BOSS trademark rights. This obligation is evidenced by a secured, limited recourse promissory note which matures on December 31, 2007 (the "Note"). The Note bears interest at 10.0% per annum, payable quarterly; principal is payable in full upon maturity of the Note, which is collateralized by the Trademark Rights. The Company has no recourse liability for payment of the principal. See "Business--License and Other Rights Agreements." The Company extends credit to its customers. Accordingly, the Company may have significant risk in collecting accounts receivable from its customers. The Company has credit policies and procedures which it uses to minimize its exposure to credit losses. As a result, the Company has experienced credit losses of less than one-half of one percent of net sales in 1994, 1995 and 1996 and in the six months ended June 30, 1997. The Company believes that the net proceeds of the Offering, cash from operations and its existing credit facilities will be sufficient to meet its working capital requirements for the next 12 months. PRO FORMA ADJUSTMENTS FOR INCOME TAXES Prior to the Reorganization, the Company's earnings were not subject to federal, state and local income taxes. In connection with the Reorganization, the Company's earnings will become subject to such taxes. In addition, as a result of the Reorganization, the Company will record a net deferred tax asset and a corresponding tax benefit in its statement of income in accordance with the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." If the Offering occurred on June 30, 1997, the deferred tax asset and corresponding tax benefit would have been approximately $1.3 million. The Company's pro forma effective tax rate, which excludes the non-recurring tax benefit discussed above, for the years ended December 31, 1994, 1995 and 1996 and for the six months ended June 30, 1997 and June 30, 1996 was 41.0%. The effect of taxes is not discussed herein because the historic taxation of the earnings of the Company is not meaningful with respect to periods after the Reorganization. SELECTED QUARTERLY RESULTS The Company's business is impacted by the general seasonal trends that are characteristic of the apparel and retail industries. In the Company's segment of the apparel industry, sales are generally higher in the first and third quarters. However, the Company's strong growth in 1996 minimized this seasonal effect. Historically, the Company has taken greater markdowns in the second and fourth quarter. As the timing of the shipment of products may vary from year to year, the results for any particular quarter may not be indicative of results for the full year. The Company has not had significant overhead and other costs generally associated with large seasonal variations. The following table sets forth certain unaudited quarterly financial information for the periods shown:
QUARTER ENDED -------------------------------------------------------------------------------MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, 1996 1996 1996 1996 1997 1997 ----------- ----------- ------------- ------------- ----------- ----------Net sales............................. Gross profit.......................... Gross profit margin................... Operating income...................... Operating margin...................... $ $ 25,902 7,839 30.3% 2,089 8.1% $ $ 25,997 7,837 30.2% 1,567 6.0% (DOLLARS IN THOUSANDS) 34,481 $ 32,275 10,716 7,842 31.1% 24.3% $ 3,924 $ 1,745 11.4% 5.4% $ $ $ 39,312 13,313 33.9% 4,854 12.3% $ $ 38,398 12,376 32.2% 3,968 10.3%

INFLATION The Company does not believe that the relatively moderate rates of inflation experienced in the United States over the last three years have had a significant effect on its net sales or profitability. Although higher rates of inflation have been experienced in a number of foreign countries in which the Company's products are manufactured, the Company does not believe that they have had a material effect on the Company's net sales or profitability. 24

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation ("SFAS 123"). SFAS 123 will begin to affect the Company in 1997 with the establishment of the 1997 Omnibus Stock Plan. See "Management-- 1997 Omnibus Stock Plan." The Company will adopt only the disclosure provisions of SFAS 123 and account for stock-based compensation using the intrinsic value method set forth in APB Opinion 25. In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, Earnings Per Share ("SFAS 128"). SFAS 128 provides a different method of calculating earnings per share than is currently used in APB Opinion 15. SFAS 128 provides for the calculation of basic and diluted earnings per share. Basic earnings per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could share in the earnings of an entity, similar to existing fully diluted earnings per share. As required by the policies of the Securities and Exchange Commission (the "Commission"), the Company has treated the shares being sold to fund the S Corporation Distribution as outstanding prior to the Offering. SFAS 128 does not have a provision requiring such treatment. The Commission is currently evaluating its policies concerning this issue. Assuming shares issued to fund the S Corporation Distribution continue to be treated as outstanding prior to the Offering, the Company believes adopting SFAS 128 will not have a material effect on its calculation of earnings per share. The Company will adopt the provisions for computing earnings per share set forth in SFAS 128 in December 1997. Statement of Financial Accounting Standards No. 129, Disclosure of Information about Capital Structure ("SFAS 129"), effective for periods ending after December 15, 1997, establishes standards for disclosing information about an entity's capital structure. SFAS 129 requires disclosure of the pertinent rights and privileges of various securities outstanding (stock, options, warrants, preferred stock, debt and participation rights) including dividend and liquidation preferences, participant rights, call prices and dates, conversion or exercise prices and redemption requirements. Adoption of SFAS 129 will have no effect on the Company as it currently discloses the information specified. In June 1997, the Financial Accounting Standards Board issued two new disclosure standards. The Company's results of operations and financial position will be unaffected by implementation of these new standards. Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS 130"), establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. Statement of Financial Accounting Standards No. 131, Disclosure about Segments of a Business Enterprise ("SFAS 131"), establishes standards for the way that public enterprises report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major customers. SFAS 131 defines operating segments as components of an enterprise about which separate financial information is available and that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Both SFAS 130 and SFAS 131 are effective for financial statements for periods beginning after December 15, 1997 and require comparative information for earlier years to be restated. Due to the recent issuance of these standards, management has been unable to fully evaluate the impact, if any, they may have on future financial statement disclosures. 25

BUSINESS INTRODUCTION I.C. Isaacs & Company, Inc. is a rapidly growing designer, manufacturer and marketer of branded sportswear. Founded in 1913, the Company offers full lines of sportswear for young men, women and boys under the BOSS brand in the United States and Puerto Rico and sportswear for men and women under the Beverly Hills Polo Club brand in the United States, Puerto Rico and Europe. Through a focused strategy of providing fashionable, branded merchandise at value prices, the Company has emerged as a significant fashion source for youthful consumers who purchase sportswear and outerwear through specialty and department stores. The Company also offers women's sportswear under various Company-owned brand names as well as under third-party private labels. Net sales of the Company grew from $85.3 million in 1994 to $118.7 million in 1996, and operating income grew from $4.7 million in 1994 to $9.3 million in 1996, a compounded annual growth rate of 40.1%. In the first six months of 1997, net sales and operating income to totaled $77.7 million, $8.8 million, respectively, as compared to $51.9 million and $3.7 million in the first six months in 1996. The Company manufactures and markets sportswear under the BOSS brand at specified price points in the United States and Puerto Rico and has positioned the BOSS line to appeal to consumers who desire a fresh, urban, fashion-forward look. Through creative and innovative marketing, the Company has created powerful brand appeal for the BOSS line and has become an active influence in young men's fashion. The BOSS collection has been expanded from an initial line of denim products into a full array of sportswear consisting of jeans, tee shirts, sweatshirts, shorts, knit and woven shirts and outerwear, many of which are characterized by innovative design, creative graphics and bold uses of color. The Company also markets a juniors' sportswear line under the BOSS brand for young women, which includes a full selection of denim products and active sportswear. Over the past three years, the Company's net sales of BOSS sportswear increased at a compounded annual growth rate of 24.7%. In 1996, net sales of BOSS sportswear accounted for 72.6% of the Company's net sales. As exclusive licensee for Beverly Hills Polo Club sportswear in the United States, Puerto Rico and Europe, the Company targets men and women who desire updated traditional sportswear at competitive prices. To reach a broader demographic customer base, the Beverly Hills Polo Club collection combines contemporary design details and innovative fabrics with classic American sportswear styling. The Beverly Hills Polo Club collection consists primarily of cotton clothing, including jeans, pants, shorts, knit and woven shirts and outerwear targeting the active, image-conscious consumer. Since the line's introduction in the spring of 1994, the Company's net sales of Beverly Hills Polo Club sportswear increased at a compounded annual growth rate of 92.7%. In 1996, net sales of Beverly Hills Polo Club sportswear accounted for 12.0% of the Company's net sales. COMPETITIVE STRENGTHS In the late 1980's, management made a decision to change the Company's marketing focus from a manufacturing-driven to a brand-driven strategy. As a result, the Company believes it has developed distinct competitive strengths which position it for continued success. The Company's key competitive strengths include: EMPHASIS ON BRAND IDENTITY. The Company believes that brand identity, as well as the image or lifestyle it conveys, are important factors that influence retail consumers' purchasing decisions. As a result of its branded product focus, the Company believes that the BOSS and Beverly Hills Polo Club brands have developed strong name recognition and consumer appeal. The Company has consistently positioned the BOSS line to be a fashion-forward brand with an urban attitude. The word "boss" conveys images of power and authority and is commonly used by today's youth as an expression of excellence. Similarly, the Company believes that the Beverly Hills Polo Club brand name, together with the accompanying distinctive horse and rider logo, connotes a "classic American" upscale image with which retail consumers easily 26

identify. The combination of these two brands enables the Company to offer a broad continuum of products and designs well recognized by fashion conscious consumers. COMBINATION OF FASHION AND VALUE. The Company is able to provide consumers with fashionable brand name sportswear at affordable prices. The BOSS and Beverly Hills Polo Club product lines both consistently provide exciting, fashion-forward products using fresh colors, striking graphic designs, unique fabrics, unusual trimmings and elaborate embroidery. The Company offers a wide array of traditional products (such as jeans, tee shirts, polo shirts and sweatshirts) that are updated with creative design details and innovative fabrics. The Company's manufacturing, sourcing and merchandising expertise enables it to provide its customers with fashion, image-oriented products at value prices. As a result, BOSS and Beverly Hills Polo Club products typically sell at retail prices below those of many well known designer brands. CREATIVE AND INNOVATIVE MARKETING. The Company has built the strong name recognition and brand image of its products through a coordinated merchandising, advertising and promotion strategy. Since the Company has not had the resources to commit to a major mass media campaign, it has relied on innovation and creativity to reach its target customers who are image conscious and influenced by fashion, music and sports. In advertising its products, the Company uses magazines such as VIBE, SOURCE, SLAM, GQ and POV, television shows and networks including Turner Network Television (TNT), Black Entertainment Television (BET), MTV: Music Television, Univision, Telemundo and various amateur and professional sporting events. The Company is also a sponsor of the Chicago Bulls, New York Knicks, New Jersey Nets, Atlanta Hawks, Detroit Pistons and Los Angeles Clippers professional basketball teams and promotes the image of its products by providing celebrities with its branded clothing and featuring its products in television programs and movies. The Company influences the presentation of its brands and products at the retail level by providing in-store signage, video advertisements and most recently, the "Shop-in-Shop" concept. FLEXIBLE MANUFACTURING AND SOURCING. The Company believes that its ability to source products from its United States facilities and third party foreign and domestic manufacturers provides it with significant manufacturing flexibility. The Company owns and operates three manufacturing facilities in the United States for the production of bottoms. In addition, the Company contracts for the manufacture of its products through third party foreign and domestic manufacturers. Currently, the Company utilizes approximately 50 factories in more than 10 countries including China, Hong Kong, Korea, Mexico, the Philippines, Taiwan, Thailand and the United States. The Company takes full advantage of a rapid delivery capability by producing jeans in its own manufacturing facilities and tee shirts at domestic contractors. In addition, the Company gains a significant cost advantage by utilizing factories in Mexico and Asia for the manufacture of innovative and labor intensive products that typically cannot be produced competitively in the United States. This combination of manufacturing and sourcing capabilities enhances the Company's production flexibility and capacity while effectively enabling it to control the timing, quality and pricing of its products. GROWTH STRATEGY The Company's growth strategy includes continued capitalization on its competitive strengths and the implementation of specific strategies for continued expansion. The Company's principal growth strategies are as follows: BROADEN PRODUCT OFFERINGS. The Company believes that significant additional expansion opportunities exist in certain product categories under both the BOSS and Beverly Hills Polo Club brands. As the BOSS brand has developed, the Company has shifted its product mix from predominantly bottoms to a broader collection of sportswear, driven by tops and outerwear. This evolution is consistent with many sportswear companies, which generally sell several tops for each pair of bottoms. Currently, the Company sells approximately the same number of units of tops and bottoms but believes this ratio will increase to three to four tops for each pair of bottoms sold. The continued evolution of the product mix provides significant 27

growth opportunities for the Company's tops segment. The Company is growing its BOSS line by adding new product categories, such as polo shirts and swimwear, broadening its outerwear collection and expanding its boys', juniors' and youth lines. Similarly, the Beverly Hills Polo Club brand includes a number of product lines that are in the early stages of market penetration, such as outerwear. To further develop the Beverly Hills Polo Club brand, the Company plans to introduce men's dress shirts as part of its 1998 fall collection. Product offerings within the Beverly Hills Polo Club women's line are also being expanded, and the Company is reorganizing and increasing its women's sales force. ENHANCE MARKETING PROGRAMS. While the Company believes that its current marketing strategy is one of its primary competitive strengths, it intends to continue its efforts to increase net sales by enhancing consumer recognition of its brand names and images through expanded marketing efforts. The BOSS brand is currently advertised through a variety of media, including television and print, while the Beverly Hills Polo Club brand is primarily advertised through print media. As the Company continues to grow, it plans to use its increased financial resources to further support and expand the brand exposure for BOSS and Beverly Hills Polo Club through increased television and print advertising, and various forms of outdoor advertising such as billboards and signage on buses and at bus stops. To further differentiate its products at the retail level, the Company also plans to expand its point-of-sale advertising. Specifically, the Company intends to build upon its existing programs to provide signage and posters and to expand its presence in the stores by providing additional permanently identified free-standing fixtures and presentation services. The Company also plans to enhance visual presentation of its products at the retail level through the "Shop-in-Shop" concept. The Company believes an expanded "Shop-in-Shop" program will further stimulate retailers to make longer term commitments to the Company's products and will encourage each store to carry a broader array of product lines each season. EXPAND CHANNELS OF DISTRIBUTION. With increased demand for its sportswear, the Company believes that it can continue to expand and penetrate certain channels of distribution, primarily the department store channel. In recent years, the Company has moved beyond the specialty stores and specialty store chains with its BOSS label to begin significant distribution to department store customers. As a result, J.C. Penney Company, Inc. was the Company's largest customer in 1996. Under the BOSS brand, the Company is also selling to other major department stores including The May Department Stores Company, Federated Department Stores, Inc. and Dayton Hudson Corporation. Further penetration of these accounts with the BOSS product line is a primary focus of the Company, and the recently introduced "Shop-in-Shop" concept should help facilitate this department store expansion. The Beverly Hills Polo Club brand has not penetrated the department store channel to the same extent as the BOSS brand, and the expanded distribution of Beverly Hills Polo Club products in department stores is a primary growth focus of the Company. In addition, the Company will continue to increase the number of products distributed to specialty stores and specialty store chains. The Company already sells to over 4,000 specialty stores and specialty store chains and believes that this broad cross-section of active accounts distinguishes it from many of its competitors. Utilizing its 44 sales representatives and in-house credit department, the Company plans to expand the product categories that it sells to the specialty store channel of distribution while maintaining its excellent credit risk experience. INCREASE EUROPEAN PRESENCE. The Company believes it is well positioned to capitalize on the appeal of its Beverly Hills Polo Club licensed brand name to continue to expand its European product distribution. The classic American sportswear look conveyed by the Beverly Hills Polo Club line is popular with European youth, due in part to the proliferation of American entertainment, including music, movies, television programs and professional sports. While the Company has only recently entered the European market in the fourth quarter of 1996, it currently has distributors in Belgium, France, Greece, Luxembourg, the Netherlands, Norway, Portugal and the United Kingdom. To meet the consumer demand for its Beverly Hills Polo Club sportswear, the Company has been moving to expand its network of wholesale distributors in Europe and is currently negotiating agreements to add distribution in Austria, Germany, Italy, and Switzerland. In addition, the Company has established three franchise stores in Spain, including 28

a franchise store in Madrid. Discussions are currently underway for several additional franchise stores in Spain and elsewhere in Europe. PRODUCTS The Company's sportswear collections under the BOSS and Beverly Hills Polo Club brands provide a broad range of product offerings for young men, women and boys, including a variety of tops, bottoms and outerwear. While each brand reflects a distinct image and style, both are targeted to consumers who are seeking high quality, fashionable products at competitive prices. The Company also manufactures and markets women's sportswear under its own "I.C. Isaacs," "Lord Isaacs" and "Pizzazz" brand names as well as under third-party private labels. Consistent with its focus on branded products, the Company discontinued its manufacture of men's private label apparel in the fourth quarter of 1996. The Company may seek to acquire additional licenses or brand names as a continuation of its branded-market strategy. The following table sets forth, for the periods indicated, the Company's net sales categorized by brand and product category:
YEAR ENDED DECEMBER 31, ------------------------------1994 1995 1996 --------- --------- --------MEN'S(1) BOSS Bottoms.................................................... BOSS Tops....................................................... BOSS Boys'...................................................... Men's BHPC...................................................... Men's Private Label............................................. Men's total................................................. WOMEN'S(1) BOSS Juniors'(2)................................................ Women's BHPC.................................................... Women's Other(3)................................................ Women's total............................................... Total net sales............................................. (IN THOUSANDS) $ 37,724 6,709 1,834 2,795 3,227 --------52,289 --------$ 37,234 15,883 3,264 5,219 4,299 --------65,898 --------$ 44,667 29,284 6,736 12,226 500 --------93,414 --------$ 21,224 11,268 2,055 4,598 427 --------39,572 --------$ 29,075 19,447 6,771 11,822 50 --------67,165 --------SIX MONTHS ENDED JUNE 30, -------------------1996 1997 --------- ---------

9,528 1,047 22,433 --------33,009 --------$ 85,298 -----------------

5,423 1,833 20,116 --------27,373 --------$ 93,271 -----------------

5,413 2,043 17,786 --------25,242 --------$ 118,655 -----------------

3,464 774 8,089 --------12,327 --------$ 51,899 -----------------

1,954 819 7,772 --------10,545 --------$ 77,710 -----------------

(1) The net sales totals incorporate product returns allocated in proportion to gross sales. (2) Results for the year ended December 31, 1994 include approximately $2.5 million of net sales of tee shirts and sweatshirts with unisex styling that were discontinued after the Company obtained a license to manufacture and sell men's BOSS tops in the fourth quarter of 1994. As a result, these products were recategorized in men's BOSS tops in 1995 and thereafter. (3) Includes Company-owned brands and third-party private labels. BOSS PRODUCTS The BOSS brand is a full sportswear line characterized by innovative fabrication, creative graphics and bold uses of color. BOSS products appeal to young men, young women and boys, who want a fresh, fashion-forward look with an urban attitude at a competitive price. As the line has expanded and matured, the demographics of BOSS customers have expanded beyond their urban base to include fashion-conscious young consumers across the United States. Over the past three years, the Company has placed increased emphasis on expansion of the top's segment, and it anticipates that this segment will continue to be the fastest growing category of products in the BOSS collection. Bottoms The Company's BOSS products began as a line of high-quality jeans and other denim casual wear. The bottoms line currently consists of a wide variety of denim jeans in a broad array of colors, designs and styles together with corduroy and twill pants. Many of the BOSS jeans feature elements such as unique 29

pocket treatments, innovative trim and embroidered logos. The Company maintains its own washing facilities, which allow it to create a variety of washes for its denim products. The Company identified an underserved niche in the young men's market for fashion jeans at moderate price points as compared with many designer jeans, which retail for $60 and up per pair. The estimated retail price for the Company's jeans is between $35 and $50 per pair. In the spring of 1997, the Company expanded its product offerings by introducing a swimwear collection. Estimated retail prices for swimwear range from $30 to $40. Tops and Outerwear The BOSS young men's line includes a variety of tops, tee shirts and outerwear. The BOSS tops collection consists of a range of products including cotton tee shirts, polo shirts, cotton pique shirts, novelty knit tops and fleece sweatshirts. These products utilize unique combinations of textured polyester fabrications, as well as a broad array of appliqued logos and innovative graphics. The styling of many of the BOSS tops is influenced by sports clothing and uniforms and conveys an energetic, youthful attitude. The Company has expanded its outerwear line, which includes a variety of products including nylon jackets and downfilled parkas. The estimated retail prices range from $19 to $22 for tee shirts, $30 to $55 for tops and $50 to $100 for outerwear products. Boys', Youth and Juniors' (Young Women) The Company complements its BOSS young men's line with BOSS boys' and youth lines which are targeted to appeal to boys ages 4 to 7 and youth ages 8 to 16. The BOSS boys' and youth product lines are substantially similar to the young men's line and include jeans, tee shirts, tops, sweatshirts and outerwear. Because the boys' market is more price conscious, some of the styles use less expensive fabrication and design detail. The boys' and youth lines typically sell at retail prices approximately 10% to 20% below the young men's line. The BOSS juniors' line is the female counterpart to the BOSS young men's line and is targeted to appeal to fashion-conscious girls and women ages 16 to 25. The BOSS juniors' collection maintains its own identity as contemporary sportswear with an urban attitude. The product line includes denim jeans, tee shirts, skirts, tops and jackets. Many of these styles are characterized by close-fitting designs utilizing textured fabrics and bold colors. The estimated retail prices for the juniors' line range from $15 to $20 for tee shirts, $25 to $50 for tops, $30 to $45 for jeans and $30 to $75 for outerwear. BEVERLY HILLS POLO CLUB PRODUCTS The Beverly Hills Polo Club sportswear products are positioned to be an updated traditional sportswear brand. The products combine contemporary design details and innovative fabric with classic American styling. With a broader demographic appeal than the BOSS brand, Beverly Hills Polo Club products are targeted to appeal to consumers 16 years and older. Today, the Beverly Hills Polo Club name and accompanying horse and rider logo symbolize quality, traditional sportswear at competitive prices. Tops and Outerwear The Company has merchandised the Beverly Hills Polo Club men's line to place more emphasis on tops, including a full line of tee shirts, polo shirts, rugby shirts, denim shirts and sweatshirts made primarily in cotton fabrics such as pique, jersey and jersey fleece. While classic in styling, the tops line is distinguished by innovative use of design, embroidery and fabric detail. The collections also include more contemporary styles and a broader array of novelty fabrics as well as product offerings such as woven shirts and outerwear, including jackets and downfilled parkas. In 1998, the Company intends to introduce a new line of men's dress shirts. Estimated retail prices range from $19 to $22 for tee shirts, $30 to $60 for tops and $60 to $120 for outerwear. 30

Bottoms While the primary focus of the Beverly Hills Polo Club men's line has been on tops, the collection also includes a full line of bottoms consisting of denim jeans, twill pants and corduroy casual pants. While somewhat more conservative in styling compared to the BOSS line, the Beverly Hills Polo Club bottoms line combines classic styling with unique trim, embroidery and pocket treatments. Estimated retail prices for jeans and casual pants range from $40 to $55 per pair. Women's The Company's Beverly Hills Polo Club women's sportswear line has a focus similar to that of the men's sportswear line. It targets active, image-conscious women 16 years and older and combines classic American styling with distinctive design detail and fabrication. The product offerings include tee shirts, polo shirts, denim shirts, jeans and casual pants. The collection also includes many activewear items which utilize a variety of fabrics and graphic elements. Estimated retail prices range from $18 to $20 for tee shirts, $30 to $60 for tops and $40 to $55 for bottoms. COMPANY-OWNED AND THIRD-PARTY PRIVATE LABEL PRODUCTS The Company also produces sportswear for women under its own brands, including "I.C. Isaacs," "Lord Isaacs" and "Pizzazz," as well as under customers' private labels. These brands focus on pull-on elastic waist pants and belted trousers in cotton, bleached and stonewashed denim, blended polyester and rayon. These pants are designed to appeal to more mature women looking for basic styling at value prices. The Company offers pants in a variety of fits including missy, petite and large sizes. Color-coordinated tops and sweaters in cotton, acrylic, blended polyester rayon and ramie cottons complete the mix. Estimated retail prices range from $13 to $50 for bottoms and $20 to $60 for tops. CUSTOMERS AND SALES The Company's BOSS products are sold throughout the United States and Puerto Rico in over 1,500 specialty stores and specialty store chains, such as Fine's and Miller's Outpost. The Company's newest level of distribution is to department stores, and its single largest customer in 1996 was J.C. Penney Company, Inc., which accounted for approximately 13.0% of net sales. Other department store customers include Federated Department Stores, Inc., The May Department Stores Company and Dayton Hudson Corporation. The Company's BOSS products are sold and marketed under the direction of its national sales office headquartered in New York. In addition to executive selling based in New York and Dallas, the Company has 18 commissioned sales representatives who work out of regional showrooms throughout the United States and Puerto Rico. The Company considers its professional sales force to be one of its major assets and one of the principal reasons why it has been successful in establishing relationships with department stores and thousands of specialty stores and specialty retail chains. The Company's Beverly Hills Polo Club sportswear is sold in the United States, Puerto Rico and Europe. Although the Company is only in its third year of distributing Beverly Hills Polo Club sportswear, the products are sold to over 1,000 specialty stores and specialty store chains. The Company has begun to sell Beverly Hills Polo Club products to department stores and believes that there is significant potential for expanded department store sales. The Company's Beverly Hills Polo Club products are sold and marketed under the direction of its men's and women's national sales offices in New York. In addition to executive selling based in New York and Dallas, the Company has a sales force consisting of 14 sales representatives for its line of men's sportswear and 11 sales representatives for its line of women's sportswear. To more effectively market the Beverly Hills Polo Club women's collection, the Company is currently in the process of reconfiguring and increasing its women's sales force. The Company's Beverly Hills Polo Club sportswear has recently begun to be sold throughout Europe through wholesale distributors, all of whom buy products directly from the Company. Since January 1, 31

1997, the Company has entered into wholesale distribution arrangements with distributors in Belgium, France, Greece, Luxembourg, the Netherlands, Norway, Portugal and the United Kingdom and is negotiating agreements with distributors in Austria, Germany, Italy and Switzerland. Under these arrangements, the distributors purchase goods from the Company's Spanish subsidiary in U.S. dollars under irrevocable letters of credit or by prepayment, thereby minimizing the Company's credit risk. In addition, the Company has established three franchise stores in Spain, including a showcase store in Madrid. Discussions are currently underway for several additional franchise stores in Spain and elsewhere in Europe. The Company-owned branded products and third-party private label products are sold under the direction of the women's sales headquarters in New York and by 15 commissioned sales representatives throughout the United States. The products are distributed to department stores such as Dayton Hudson Corporation, Mercantile Stores Company, Inc. and Sears Roebuck and Co.; mass merchandisers and discounters such as Hills Department Store Company and Ames Department Stores, Inc.; catalogs such as National Wholesale Co., Inc. and Arizona Mail-Order Company, Inc. and approximately 1,500 specialty stores nationwide. DESIGN AND MERCHANDISING The Company prides itself on its ability to identify and to respond to fashion trends. The Company's designers and merchandisers travel around the world in order to monitor emerging fashion trends and search for styling inspiration and fabrics. These sources, together with new styling and graphics developed by the Company's designers, serve as the primary creative influences for the Company's product lines. In addition, designers and merchandisers regularly meet with sales management to gain additional market insight and further refine the products to be consistent with the needs of each of the Company's markets. The Company's in-house design and product development is carried out by merchandising departments in New York. Many of the Company's products are developed using computer-aided design equipment, which allows designers to view and easily modify images of a new design. ADVERTISING AND MARKETING The Company aggressively communicates and reinforces the brand and image of its BOSS and Beverly Hills Polo Club products through creative and innovative advertising and marketing efforts. The Company's advertising and marketing strategies are directed by its national sales offices and developed in collaboration with its advertising agency. The Company's advertising strategy is geared towards its youthful consumers whose lifestyles are influenced by music, sports and fashion. The Company has been advertising the BOSS brand since 1992 and the Beverly Hills Polo Club brand since 1994, and its advertising campaigns have evolved from trade magazines to a wide variety of media, including billboards, television, fashion magazines and professional sports endorsements. Print advertisements for the BOSS brand appear regularly in VIBE, SOURCE and SLAM magazines, while television advertisements appear on various networks including Turner Network Television (TNT), Black Entertainment Television (BET), MTV: Music Television, Univision and Telemundo. Advertisements for the BOSS brand also appear on a variety of outdoor advertising media, including billboards and bus stops. Print advertisements for the Beverly Hills Polo Club brand are targeted to appeal to a broader demographic base and appear in magazines such as GQ and POV. Television advertisements for the Beverly Hills Polo Club brand are currently being developed. The Company's products can also be seen on some of today's most visible sports and music celebrities, whose attitude and image are captured by the BOSS and Beverly Hills Polo Club brands. In addition, the Company is a sponsor of selected professional basketball teams, including the Chicago Bulls, New York Knicks, New Jersey Nets, Atlanta Hawks, Detroit Pistons and Los Angeles Clippers. 32

The Company prides itself on its ability to efficiently utilize its advertising budget. Although the Company has increased its expenditures on advertising to approximately $2.5 million or 2.1% of net sales in 1996, this is still a relatively modest amount as compared with some of its competitors. As the Company continues to grow, it plans to use its increased financial resources to further support and expand the brand exposure for BOSS and Beverly Hills Polo Club. Recognizing that point of sale advertising is highly effective, the Company provides an array of in-store signage, fixtures and product videos for both BOSS and Beverly Hills Polo Club products. In addition, through the "Shop-in-Shop" concept, the Company seeks to enhance brand recognition and to differentiate its products from other branded apparel by creating an environment that is consistent with the image of its products. For example, J.C. Penney Company, Inc. currently has approximately 250 stores using the "Shop-in-Shop" concept to showcase BOSS young men's products and approximately 75 stores using the "Shop-in-Shop" concept to showcase Beverly Hills Polo Club men's merchandise. The Company plans to expand the "Shop-in-Shop" program to build longer term commitments with the retailer and enable the retailer to carry a broader array of the product lines each season. MANUFACTURING AND PRODUCT SOURCING GENERAL The Company believes that its flexible manufacturing and sourcing capabilities enable it effectively to control the timing, quality and pricing of products while providing customers with increased value. The Company uses its own facilities as well as both domestic and foreign contractors for the production of its products. During 1996, approximately 9% of the Company's purchases of raw materials, labor and finished goods for its apparel were made in Mexico; approximately 28% were made in Asia; approximately 23% were made at third-party facilities in the United States; and the balance was made at the Company's facilities in the United States. For the first half of 1997, approximately 71% of the Company's manufacturing and sourcing was done by third parties, all through arrangements with independent contractors. The Company evaluates its contractors frequently and believes that there are a number of manufacturers capable of producing products that meet the Company's quality standards. The Company represents all or a significant portion of many of its contractors' production and has the ability to terminate its arrangements with any of its contractors at any time. UNITED STATES AND MEXICO The Company operates three manufacturing facilities in the United States and currently utilizes seven contractors in the United States and three in Mexico. The majority of the production in these facilities is for bottoms and tee shirts. The Company produces approximately 50% of its bottoms (slacks, jeans, shorts and skirts) in three Company-operated manufacturing facilities in Mississippi, which combine to employ approximately 720 people. All three facilities are efficient plants utilizing a level of automation that enables the Company to competitively price its products and maintain the flexibility necessary to meet its customers' changing demands. The Company safeguards its manufacturing capacity by utilizing contractors in both the United States and Mexico to produce the same product lines. The Company has established ongoing relationships with all of these contractors but is not bound by written agreements to continue to do business with any of them. The Company also uses a variety of contractors in both the United States and Mexico as needed for value added functions such as embroidery, screen printing and laundering. Seasonal fluctuations in production requirements are accommodated by adjusting contracted quantities, while maintaining more consistent levels of production in Company-operated facilities. All contractors in the United States and Mexico are selected and managed by the Company's manufacturing staff in Mississippi and Mexico. The Company uses a variety of raw materials, principally consisting of woven fabrics including denim, cotton, polyrayons and various trim items. The Company must make commitments for a significant portion 33

of its fabric purchases in advance of sales, although the Company's risk is reduced because a substantial portion of the Company's products are sewn in basic denim. ASIA In addition to the Company's domestic and Mexican pant and tee shirt production facilities, the balance of the Company's sportswear products is produced by approximately 50 different manufacturers in more than 10 countries. Virtually all of the Company's products other than pants and tee shirts are produced in Asia, but none of the Asian contractors engaged by the Company accounted for more than 10% of the Company's total production in 1996. The Company has well established relationships with many of its contractors although it does not have written agreements with them. The Company retains independent buying agents in various countries in Asia to assist in selecting and overseeing independent manufacturers, sourcing fabric, trim and other materials, monitoring quotas and performing certain quality control functions. The sourcing and merchandising staffs in the Company's New York offices oversee all aspects of Asian fabric and product development, apparel manufacturing, price negotiation and quality control, as well as researching and developing new Asian sources of supply. The Company seeks to achieve the most efficient means for the timely delivery of its high quality products. With rare exceptions, the Company does not purchase fabrics but instead negotiates a finished garment price from its contractors. The contractor must then purchase the approved fabric as part of the package. Orders are generally placed after the Company has received customer orders, and delivery of finished goods to customers occurs generally 90 to 150 days after placement of the order. All of the Company's products manufactured abroad are paid for in United States dollars. Accordingly, the Company does not engage in any currency hedging transactions. During the last several years, the volume of the Company's products produced in Asia has increased dramatically, and this trend is likely to continue in the future. WAREHOUSING AND DISTRIBUTION The Company has serviced its United States customers for the last 38 years utilizing a Company-owned and operated distribution center in Milford, Delaware. This primary facility has been expanded during that time, resulting in its present size of approximately 70,000 square feet. Over the last few years, the Company has leased additional space in the Milford area to accommodate increased capacity requirements fueled by growth in sales. The Company is in the process of establishing a computerized "Warehouse Management System" with real-time internal tracking information and the ability to provide its customers with electronically transmitted "Advance Shipping Notices." The accuracy of shipments is increased by the ability to scan coded garments at the packing operation. This process also provides for computerized routing and customer invoicing. The vast majority of shipments are handled by UPS, common carriers or parcel post. The Company believes that its increased distribution requirements as a result of rapid growth can be better met by consolidating its warehousing and distribution functions into a new 150,000 square foot facility to be located in Milford, Delaware. Consolidating all the receiving, stocking, packing and shipping functions into one facility should result in improved management control and less redundancy in supervision and operational functions. The Company believes that its engineering plan for the new facility will provide the capacity to accommodate substantial growth in the Company's domestic volume and will reduce labor costs and improve response times. The Company believes the construction of this facility should be completed in 1998 at an estimated cost of between $6.0 million and $7.0 million to be financed through a mortgage loan. In order to ensure against the possibility of interrupted flow of goods to its customers, the Company plans to occupy the new facility in phases. The Company currently services its European customers through a contractual arrangement with a distribution center in Barcelona, Spain, where the Company maintains its European headquarters. 34

QUALITY CONTROL The Company's quality control program is designed to ensure that all of the Company's products meet its high quality standards. The quality of piece goods is monitored prior to garments being produced, and prototypes of each product are inspected and approved before production runs are commenced. The goods produced by Company-operated facilities, as well as by United States and Mexican contractors, undergo continual audits by quality personnel during production. The quality control efforts of Company-operated facilities are directed and coordinated by the Company's Quality Control Manager located in Mississippi. Frequent visits are made by the Quality Control Manager and other support staff, to all outside contractors to ensure compliance with the Company's rigorous quality standards. Audits are also performed by quality personnel at the Milford, Delaware distribution center on all categories of incoming merchandise. The Company employs a full-time staff of 43 persons dedicated to the quality control efforts of its United States and Mexican production. All garments produced for the Company in Asia must be produced in accordance with the Company's specifications. The Company's import quality control program is designed to ensure that all of the Company's products meet its high quality standards. The Company monitors the quality of fabrics prior to the production of garments and inspects prototypes of products before production runs are commenced. In many cases, the Company requires its agents or manufacturers to submit fabric to an independent outside laboratory for testing prior to production. The Company requires each agent to perform both in-line and final quality control checks during and after production before the garments leave the contractor. Personnel from the Company's New York office also visit Asia to conduct inspections. BACKLOG AND SEASONALITY The Company's business is impacted by the general seasonal trends that are characteristic of the apparel and retail industries. In the Company's segment of the apparel industry, sales are generally higher in the first and third quarters. The Company generally receives orders for its products three to five months prior to the time the products are delivered to stores. As a result of the Company's recent growth, as of June 30, 1997, the Company had unfilled orders of approximately $60 million, compared to approximately $43 million of such orders as of June 30, 1996. The Company expects to fill substantially all of these orders in 1997. The backlog of orders at any given time is affected by a number of factors, including seasonality, scheduling of manufacturing and shipment of products. All such orders are subject to cancellation for late delivery. Accordingly, a comparison of backlogs of orders from period to period is not necessarily meaningful and may not be indicative of eventual actual shipments. LICENSE AND OTHER RIGHTS AGREEMENTS BOSS TRADEMARK RIGHTS In 1990, the Company obtained a license from Brookhurst to use the registered trademark BOSS in the United States and Puerto Rico in connection with certain items of sportswear for men and women. Brookhurst and its predecessors had utilized the BOSS trademark since the late nineteenth century. Upon the closing of the Settlement, Brookhurst will (i) sell its BOSS trademark rights worldwide (excluding Mexico), goodwill and registrations to the Company, (ii) transfer its rights under certain agreements with third parties relating thereto (the rights under (i) and (ii) above referred to collectively as the "BOSS Trademark Rights") to the Company and (iii) cease to use the BOSS name (except for a limited sell-off of certain uniforms and samples bearing the BOSS mark). As part of the Settlement, the Company will sell its foreign BOSS trademark rights and its rights under related agreements acquired from Brookhurst (the "BOSS Foreign Trademark Rights") to a third party, in return for the third party's assumption of a purchase money note of $11.0 million delivered by the Company to Brookhurst (the "Brookhurst Note") pursuant to the purchase. The Company will also enter into a foreign manufacturing rights agreement with the third party (the "Foreign Rights Agreement") under which the Company will be licensed to manufacture apparel in certain foreign countries for sale in the United States using the BOSS name. The Company will retain its ownership of domestic BOSS Trademark Rights ("Domestic BOSS Trademark Rights") subject to a third party concurrent use agreement (the "Concurrent Use Agreement") governing the Company's use of the Domestic BOSS Trademark Rights. 35

Under the agreements entered into in connection with the Settlement, the Company's BOSS rights will be expanded to allow broader product offerings and additional Company control over styling, advertising and distribution. In addition to the categories of apparel which the Company was permitted to manufacture, distribute, market and sell under its previous license agreement with Brookhurst, under the Settlement, the Company will have the right to manufacture, distribute, market and sell, within specified wholesale price points, the following categories of apparel under the BOSS brand in a specified microgramma style (the "BOSS Logotype"): swimwear, jogging suits, polo shirts and belts (as parts of garments). The Company may use the BOSS trademark in forms other than the BOSS Logotype with prior approval of the other parties to the agreements. The Company will not be permitted to use the BOSS brand on footwear, formal and tailored clothing, leather clothing, body wear, underwear, intimate apparel, loungewear, sleepwear and robes and clothing designed for the primary purpose of engaging in skiing, tennis, motor sports, windsurfing and any non-apparel items. The Concurrent Use Agreement sets forth specific parameters governing the use by the Company of the BOSS trademark with respect to wholesale pricing points, size, location, appearance, style and coloring of the trademark on different product categories and advertising, and requires that the Company use the phrase "BOSS by I.G. Design" in the BOSS logotype on all products. Under the Foreign Rights Agreement, the Company will have the right to continue manufacturing BOSS apparel in foreign countries, including those in which the Company is currently manufacturing BOSS apparel. The Foreign Rights Agreement will terminate on December 31, 2001, but may be extended, at the Company's option, through December 31, 2007. Under the Foreign Rights Agreement, the Company will pay annual royalties of 12 1/2% on the first $32.0 million of net sales attributable to apparel manufactured in specified foreign countries ("Territory Net Sales") for each of the first four years of the agreement; on the first $20.0 million in Territory Net Sales for year five of the agreement; and on the first $16.0 million of Territory Net Sales in years six through ten of the agreement. Such base royalties will increase upon any prepayment of the Note. For the first four years of the agreement, an aggregate additional royalty of 5% is payable annually on Territory Net Sales from $84.0 million to approximately $105.3 million and an aggregate additional royalty of 4% is payable annually on Territory Net Sales of $158.0 million and up. Additional royalties in years five through ten of the agreement increase for certain corresponding sales levels. The Company is required, subject to certain royalty payment caps set forth in the agreement, to generate minimum annual Territory Net Sales of at least $32.0 million for each of the first four years of the agreement; $20.0 million for the fifth year of the agreement and $16.0 million for each of years six through ten of the agreement. The Company's Territory Net Sales for any given year under the agreement must equal at least 95% of total net sales attributable to apparel manufactured worldwide. To the extent that the Company does not achieve the required Territory Net Sales, the Company will have the right, in order to avoid termination of the agreement, to pay royalties as if such Territory Net Sales had been achieved. The Foreign Rights Agreement may be terminated by the licensor upon the occurrence of certain events, including, but not limited to (i) a material breach by the Company after expiration of the applicable grace period, (ii) certain events of bankruptcy, insolvency or assignment for the benefit of all creditors relating to the Company or the appointment of a receiver or trustee for the Company (a "Bankruptcy Event"), (iii) certain specified changes in the control of the ownership of the Company, and (iv) certain uncured breaches by the Company's foreign manufacturers of the terms of the agreements. In addition to terminating the agreement, the licensor may require the Company to pay on an accelerated basis all royalties due under certain sales assumptions through the then current term of the agreement upon the occurrence of certain events including, but not limited to (i) the failure of the Company to pay royalties when due or to meet certain minimum sales requirements, (ii) the failure of the Company to manufacture products in certain foreign countries, (iii) the sale of the licensed products outside the United States, (iv) certain attempts by the Company to create or establish trademark rights in the word BOSS in its own name anywhere outside of the United States, (v) the willful and material breach of the agreement and (vi) the occurrence of a Bankruptcy Event. The Company's rights to use the BOSS name will terminate upon exercise of the Option (as hereinafter defined) or upon earlier termination of any of the other agreements. 36

A third party holds an option to purchase the Domestic BOSS Trademark Rights from the Company (the "Option") for an amount equal to the principal of the Note (i) at any time between the ninth anniversary of the Option's execution and December 31, 2007, (ii) upon certain breaches of the Concurrent Use Agreement, (iii) an event of default under the Note, or (iv) termination for any reason of the Foreign Rights Agreement. See "Risk Factors--Dependence Upon Third Party Rights and Licenses" and "Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources." BEVERLY HILLS POLO CLUB LICENSES Beverly Hills Polo Club Domestic Licenses Since 1993, the Company has had exclusive wholesale licensing agreements (collectively, the "BHPC Agreements") with BHPC Marketing, Inc. for the manufacture and promotion of certain men's and women's sportswear bearing the registered trademark Beverly Hills Polo Club with an accompanying horse and rider design (the "BHPC Trademark") for sale to moderate or better department stores and specialty stores in the United States and its possessions, including Puerto Rico. Under the BHPC Agreements, the Company may sell up to 25% of its total volume for each of the men's and women's categories to warehouse clubs. The licenses generally allow the Company to use the BHPC Trademark on sportswear designed by or for the Company, subject to a quality approval process for marketing and advertising materials, manufacturing premises and products bearing the trademark. Under each of these licenses, as amended through April 1997, the Company is required to make payments to the licensor in an amount equal to 5% of the Company's net invoiced sales of licensed merchandise and to spend an amount equal to 1% of net invoiced sales of such merchandise in advertising for the licensed products. Under each license, the Company pays a monthly royalty equal to the greater of 1/12th of the guaranteed minimum annual royalty or the actual royalty earned by the licensor in the preceding month. Under the Beverly Hills Polo Club men's agreement (the "Men's Agreement") the Company has been granted an exclusive license to use the BHPC Trademark in connection with menswear fashions made of materials other than silk in the following categories: denim sportswear, outerwear, knit, woven, and dress shirts, knit and woven casual pants and shorts, sweaters, basic and fashion fleece tops and bottoms, overalls and shortalls, knit tops (including tee-shirts and polo shirts), swimwear and warm-ups. The Men's Agreement has an initial term expiring December 31, 1998 and is renewable at the option of the Company, provided the Company is not in breach thereof at the time renewal notice is given, for two consecutive three-year periods commencing January 1, 1999, through December 31, 2004. The Company's payment of royalties under the Men's Agreement is subject to a guaranteed minimum annual royalty of $350,000 for the contract year ending December 31, 1997 and $400,000 for the contract year ending December 31, 1998. A guaranteed minimum annual royalty payment of $300,000, which was required for the contract year ending December 31, 1996, was exceeded by the Company. Notwithstanding its term, the Men's Agreement may be terminated by the licensor in the event the Company fails to make net shipments of products for the contract year ending December 31, 1997 in the amount of $7.0 million and for the contract year ending December 31, 1998 in the amount of $8.0 million. Guaranteed minimum annual royalties and guaranteed annual net shipments for each of the renewal terms will be the greater of (i) 80% of the immediately preceding contract year's actual royalties and net shipments, or (ii) the previous year's guaranteed minimum royalty and guaranteed net shipments. The Beverly Hills Polo Club women's agreement (the "Women's Agreement") grants the Company the right to use the BHPC Trademark in connection with women's, missy, junior, petite and large size coordinated sportswear, sweaters, sweater dresses, sweater suits, basic fleece tops and bottoms, basic tee-shirts, basic polo shirts, warm ups in knit and woven fabrics and women's tennis and golf related shorts sets, skort sets and pant sets in knit and woven fabrics. The Women's Agreement has an initial term expiring December 31, 1998 and is renewable at the option of the Company, provided the Company is not in breach thereof at the time renewal notice is given, for two consecutive three-year periods commencing January 1, 1999, through December 31, 2004. The Company's payment of royalties under the Women's Agreement is subject to a guaranteed minimum annual royalty of $100,000 for the contract year ending December 31, 1997 and $150,000 for the 37

contract year ending December 31, 1998. No guaranteed minimum annual royalty payment was required for the contract year ending December 31, 1996. Notwithstanding the term of the Women's Agreement, the women's license may be terminated by the licensor in the event the Company fails to make net shipments of products for the contract year ending December 31, 1997 in the amount of $2.0 million and for the contract year ending December 31, 1998 in the amount of $3.0 million. Such termination provision has been waived for the contract year ending December 31, 1997. Guaranteed minimum annual royalties and guaranteed annual net shipments for each of the renewal terms will be the greater of (i) 80% of the immediately preceding contract year's actual royalties and net shipments, or (ii) the previous year's guaranteed minimum royalty and guaranteed net shipments. Each of the Men's and the Women's Agreements may be terminated by the licensor upon the occurrence of certain events, including but not limited to the following: (i) a breach by the Company of any obligation under the Agreement that remains uncured within 30 days following the receipt of written notice of such breach, (ii) the Company becomes insolvent, is the subject of a petition in bankruptcy or otherwise enters into any composition with its creditors, including reorganization, or (iii) the Company has committed three breaches of the Agreement, in which case no right to cure the breach is afforded to the Company. During the term of the Beverly Hills Polo Club domestic Men's and Women's Agreements, the Company is prohibited from manufacturing or otherwise distributing any merchandise under a brand name which closely resembles the BHPC Trademark and from using on non-Beverly Hills Polo Club products any graphic, style or design which closely resembles any items supplied to the Company by the licensor. In addition, the rights of the Company under the Men's and Women's Agreements are subject to the terms of a Settlement Agreement and Consent Judgment between the licensor and Polo Fashions Inc., which imposes certain restrictions on the licensor's manner of use and advertising of the BHPC Trademark, including a prohibition on the use of the words "Polo" and "Polo Club" alone on any item of apparel. The Company believes that the BHPC Trademark, as licensed to the Company, complies with those restrictions. Beverly Hills Polo Club International Licenses On August 15, 1996, I.C. Isaacs Europe, S.L., a Spanish limited corporation and wholly-owned subsidiary of the Company, entered into retail and wholesale license agreements (collectively, the "International Agreements") for use of the BHPC Trademark in Europe. The International Agreements, as amended through April 28, 1997, provide certain exclusive rights to use the BHPC Trademark in all countries of Europe for an initial term of three years ending December 31, 1999, renewable at the Company's option through two consecutive three-year extensions ending December 31, 2004. The International Agreements are subject to substantially the same terms and conditions as the BHPC Agreements described above. The Company commenced its operations under the International Agreements by January 1, 1997, as required by the terms thereof. The international retail agreement (the "Retail Agreement") grants the Company the right to use the BHPC Trademark in connection with the manufacture and sale through authorized Beverly Hills Polo Club retail stores and franchised stores in Europe of the following categories of products: (i) men's pants, woven shirts, knit shirts, jeans, shorts, sweaters, outerwear (excluding dress shirts and suits); (ii) women's slacks, skirts, dresses, sweaters, outerwear, blouses and jeans; and (iii) all other products licensed by the Beverly Hills Polo Club licensor to other third parties (which must be purchased by the Company from the authorized third-party licensees). The Retail Agreement excludes dress shirts and suits. Under the Retail Agreement, the Company is required to pay the licensor royalties equal to (i) 4% of the wholesale purchases by the Company of Beverly Hills Polo Club products sold to Beverly Hills Polo Club retail stores, and (ii) 2% of retail sales of licensed products by Beverly Hills Polo Club retail stores. The Company is subject to guaranteed minimum annual royalty payments of $60,000 in 1998 and $100,000 in 1999 and guaranteed net shipment volumes of $1.0 million in 1998 and $2.0 million in 1999. There are no guaranteed minimum annual royalty payments or guaranteed net shipment volumes for the contract year ended December 31, 1997. The Retail Agreement is subject to applicable franchising laws in Europe and, as a result, the licensor may terminate the agreement if the Company is unable to obtain any necessary 38

governmental approval or to make any necessary governmental filings within four months from the date of the first franchise agreement. The international wholesale agreement (the "Wholesale Agreement") grants the Company the right to use the BHPC Trademark in connection with the manufacture and sale at wholesale, for distribution to department stores and specialty stores in Europe, of the following categories of products: (i) men's apparel (excluding suits, ties, underwear, shoes and full length rainwear); and (ii) women's apparel (excluding hosiery, intimate apparel, business suits, underwear, accessories, shoes and full length rainwear). Under the Wholesale Agreement, the Company is required to pay the licensor a royalty equal to 6% of net shipments by the Company of licensed products directly to authorized Beverly Hills Polo Club distributors or to retail stores. The Wholesale Agreement imposes guaranteed minimum annual royalty payments of $120,000 in 1998 and $240,000 in 1999 and guaranteed net shipment volumes of $2.0 million in 1998 and $4.0 million in 1999. There are no guaranteed minimum annual royalty payments or guaranteed net shipment volumes for the contract year ended December 31, 1997. CREDIT CONTROL The Company manages its own credit and collection functions and has never used a factoring service or outside credit insurance. The Company sells to approximately 4,100 accounts throughout the United States and Puerto Rico. All of the functions necessary to service this large volume of accounts are handled by the Company's in-house credit department in Baltimore, Maryland. The Company currently employs eight people in its credit department and believes that managing its own credit gives it unique flexibility as to which customers the Company can sell and how much business it can do with each. The Company believes this provides a selling advantage over those competitors that are factored. In each of the last three years, the Company's actual bad debt as a percentage of net sales has been less than one-half of one percent. COMPETITION The apparel industry is highly competitive and fragmented and is subject to rapidly changing consumer demands and preferences. The Company believes that its success depends in large part upon its ability to anticipate, gauge and respond to changing consumer demands and fashion trends in a timely manner and upon the continued appeal to consumers of the BOSS and Beverly Hills Polo Club brands. The Company competes with numerous apparel brands and distributors (including Calvin Klein, Fila, FUBU, Guess, JNCO, Tommy Hilfiger and Nautica). Many of the Company's competitors have greater financial resources than the Company. Although the level and nature of competition differ among its product categories, the Company believes that it competes on the basis of its brand image, quality of design and value pricing. In addition, under the Concurrent Use Agreement and the BHPC Agreements, certain third parties have retained the right to produce, distribute, advertise and sell, and to authorize others to produce, distribute, advertise and sell certain garments that are similar to some of the Company's products, including, in the case of the BOSS brand, similar garments using the BOSS trademark at generally higher wholesale price points. Any such production, distribution, advertisement or sale of such garments by such licensor or another authorized party could have a material adverse effect on the Company's financial condition or results of operations. MANAGEMENT INFORMATION SYSTEMS The Company believes that advanced information processing is essential to maintaining its competitive position. The Company is currently upgrading systems that allow areas of the business to be more pro-active to customer requirements, to improve internal communication flow, to increase process efficiency and to support management decisions. The Company's systems provide, among other things, comprehensive order processing, production, accounting and management information for the marketing, selling, manufacturing, retailing and distribution functions of the Company's business. The Company's software program allows it to track, among other things, orders, manufacturing schedules, inventory and sales of its products. The program includes centralized management information systems, which provide the various operating departments with financial, sales, inventory and distribution related information. Via electronic 39

data interchange, the Company is able to ship orders to certain customers within 24 to 72 hours from the time of order receipt. EMPLOYEES The Company believes that its employees are one of its most valuable resources. As of June 30, 1997, the Company had approximately 900 full-time employees. The Company is not a party to any labor agreements, and none of its employees is represented by a labor union. The Company considers its relationship with its employees to be good and has not experienced any significant interruption of its operations due to labor disputes. See "Risk Factors--Dependence on Unaffiliated Manufacturers." PROPERTIES Certain information concerning the Company's principal facilities is set forth below:
LOCATION ----------------------------------------Baltimore, MD............................ New York, NY............................. New York, NY............................. Barcelona, Spain......................... Milford, DE.............................. Newton, MS............................... Carthage, MS............................. Raleigh, MS.............................. LEASED OR OWNED ----------Owned Leased Leased Leased Owned Leased Leased Leased USE ----------------------------------------Administrative Headquarters and Office Facilities Sales, Merchandising, Marketing and Sourcing Headquarters Sales, Marketing and Sourcing Headquarters European Headquarters Distribution Center Manufacturing Plant Manufacturing Plant Manufacturing Plant APPROXIMATE AREA IN SQUARE FEET ---------------40,000 7,449 4,300 2,000 70,000 101,000 110,000 90,000

The Company also has regional sales offices, all of which are leased, in the following cities: Atlanta, Georgia; Dallas, Texas; Miami, Florida; Seattle, Washington; Los Angeles, California; Philadelphia, Pennsylvania; Boston, Massachusetts; Minneapolis, Minnesota; Charlotte, North Carolina; and Santurce, Puerto Rico. The Company believes that its existing facilities are well maintained and in good operating condition. The Company also believes that its increased distribution requirements can be better met by consolidating its warehousing and distribution functions into a new 150,000 square foot facility to be located in Milford, Delaware. See Note 5 of Notes to Consolidated Financial Statements for further information regarding current lease obligations. ENVIRONMENTAL MATTERS The Company is subject to federal, state and local laws, regulations and ordinances that (i) govern activities or operations that may have adverse environmental effects (such as emissions to air, discharges to water, and the generation, handling, storage and disposal of solid and hazardous wastes) or (ii) impose liability for the costs of clean up or other remediation of contaminated property, including damages from spills, disposals or other releases of hazardous substances or wastes, in certain circumstances without regard to fault. Certain of the Company's operations routinely involve the handling of chemicals and wastes, some of which are or may become regulated as hazardous substances. The Company has not incurred, and does not expect to incur, any significant expenditures or liabilities for environmental matters. As a result, the Company believes that its environmental obligations will not have a material adverse effect on its financial condition or results of operations. LITIGATION The Company is a party to various claims, complaints and other legal actions that have arisen in the ordinary course of business from time to time. The Company believes that the outcome of such pending legal proceedings, in the aggregate, will not have a material adverse effect on the Company's financial condition or results of operations. 40

MANAGEMENT DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth certain information concerning the directors and executive officers of the Company:
NAME ----------------------------------------------------Robert J. Arnot...................................... Gerald W. Lear....................................... Gary B. Brashers..................................... Eugene C. Wielepski.................................. Ira J. Hechler....................................... Jon Hechler.......................................... Ronald S. Schmidt.................................... Thomas P. Ormandy.................................... AGE --49 54 49 51 79 44 53 46 POSITION ----------------------------------------------------Chairman of the Board, Co-Chief Executive Officer and Director President, Co-Chief Executive Officer and Director Vice President--Manufacturing, Chief Operating Officer and Director Vice President--Finance, Chief Financial Officer and Director Director Director Director Vice President--Sales

The Company has two Chief Executive Officers, Robert J. Arnot and Gerald W. Lear. Mr. Arnot and Mr. Lear share decision-making responsibility with respect to business strategy, product pricing, budgeting, financial management, institutional relationships, licensing decisions, European operations and legal issues. ROBERT J. ARNOT has been a Director of the Company since 1984, Vice President of Planning and Corporate Development from 1989 to 1991, Chairman of the Board of Directors since 1991, and Co-Chief Executive Officer since 1996. He has been employed by the Company since 1989. In addition to sharing overall decision-making responsibility as described above, Mr. Arnot has lead responsibility for the following operating areas, which report directly to him in New York: BOSS and Beverly Hills Polo Club design and merchandising, Asian sourcing and manufacturing, BOSS and Beverly Hills Polo Club sales management and advertising. GERALD W. LEAR has been a Director of the Company since 1980 and President and Chief Executive Officer since 1987. He was Vice President from 1975 to 1984 and Executive Vice President from 1984 to 1986. He has been employed by the Company since 1962. In addition to sharing overall decision-making responsibility as described above, Mr. Lear has lead responsibility for the following operating areas, which report directly to him in Baltimore: United States and Mexican production of bottoms, United States tee shirt production, I.C. Isaacs bottoms merchandising, bottoms design department, cost accounting, shipping and warehousing and corporate administration (which includes management information systems, credit, accounting, customer service and personnel). GARY B. BRASHERS has been a Director and Chief Operating Officer since 1988 and Vice President-- Manufacturing since 1985. Prior to that he held positions with the Company in quality control and manufacturing. He has been employed by the Company since 1978. Prior to joining the Company, he held various manufacturing management positions in the apparel industry since 1969. 41

EUGENE C. WIELEPSKI has been a Director, Vice President--Finance and Chief Financial Officer of the Company since 1991. He has held the positions of Secretary and Treasurer since 1976. From 1976 to 1990 he was Controller. He is a Certified Public Accountant and has been employed by the Company since 1973. IRA J. HECHLER has been a Director of the Company since 1984. He is a private investor who is also a member of the Board of Directors of American Banknote Corporation and Concord Camera Corporation. He is Vice Chairman of the Board of Directors of A.R.T./New York and a member of the Board of Trustees and Treasurer of the Nassau County Museum of Art. JON HECHLER has been a Director of the Company since 1984. He has been employed by Ira J. Hechler and Associates, an investment company, since 1980. He also serves as President of T. Eliot, Inc., a manufacturer of bathroom equipment. He is the son of Ira J. Hechler. RONALD S. SCHMIDT has been a Director of the Company since 1990. He is President and Chief Executive Officer of I.B. Diffusion, a manufacturer of ladies' apparel. THOMAS P. ORMANDY has been Vice President--Sales of the Company since 1986. Previously, he was a salesman with Thompson and Company, an apparel manufacturer, since 1975. He is responsible for the sales and marketing of the BOSS men's, boys' and juniors' lines as well as the Beverly Hills Polo Club men's line. BOARD OF DIRECTORS The Company's Board of Directors is currently comprised of seven members. There are currently two vacancies, and following the consummation of the Offering, the Company intends to appoint two additional directors who will be neither officers nor employees of the Company or its affiliates. The Company's Board of Directors is divided into three classes of three members each. Directors of each class will be elected at the annual meeting of stockholders held in the year in which the term for such class expires and will serve for three years thereafter. The first class, whose term will expire at the first annual meeting after the Offering, currently consists of Messrs. Arnot, Lear and Wielepski; the second class, whose term will expire at the second annual meeting after the Offering, currently consists of Messrs. Ira J. Hechler, Jon Hechler and Gary B. Brashers; the third class, whose term will expire at the third annual meeting after the Offering, currently consists of Mr. Ronald S. Schmidt. The vacancies in Class III will be filled when the Company appoints two additional directors after the Offering. For further information on the effect of the classified Board of Directors, see "Description of Capital Stock--Certain Certificate of Incorporation, By-law and Statutory Provisions Affecting Stockholders." Pursuant to the Restated Shareholders' Agreement, all of the existing stockholders of the Company have agreed to vote their shares of Common Stock in elections to fill Class I and Class II of the Board of Directors in favor of the nominees of the Principal Stockholders (as defined). See "Certain Transactions-- Restated Shareholders' Agreement." The Company has established a Compensation Committee consisting of Messrs. Ira J. Hechler, Jon Hechler and Ronald S. Schmidt. The Compensation Committee is responsible for reviewing and approving all compensation arrangements with officers of the Company and will also be responsible for administering the 1997 Omnibus Stock Plan. See "--1997 Omnibus Stock Plan." Within 90 days following the consummation of the Offering, the Board of Directors will establish an Audit Committee. The Audit Committee will be responsible for recommending to the Board of Directors the engagement of the independent auditors of the Company and reviewing with the independent auditors the scope and results of the audits, the internal accounting controls of the Company, audit practices and the professional services furnished by the independent auditors. The General Corporation Law of the State of Delaware (the "Delaware Corporation Law") provides that a company may indemnify its directors and officers as to certain liabilities. The Company's Restated 42

Certificate and Restated By-laws provide for the indemnification of the Company's directors and officers to the fullest extent permitted by law, and the Company intends to enter into separate indemnification agreements with each of its directors and officers to effectuate these provisions and to purchase directors' and officers' liability insurance. The effect of such provisions is to indemnify, to the fullest extent permitted by law, the directors and officers of the Company against all costs, expenses and liabilities incurred by them in connection with any action, suit or proceeding which they are involved by reason of their affiliation with the Company. See "Description of Capital Stock--Certain Certificate of Incorporation, Bylaw and Statutory Provisions Affecting Stockholders" and "--Director and Officer Indemnification." COMPENSATION OF DIRECTORS Directors who are employees of the Company receive no compensation for serving on the Board of Directors. Directors who are not employees of the Company will receive an annual retainer fee of $10,000 for their services and attendance fees of $750 per Board or committee meeting attended. All directors are reimbursed for expenses incurred in connection with attendance at Board or committee meetings. In addition, members of the Board of Directors will be eligible to participate in the Company's 1997 Omnibus Stock Plan. See "--1997 Omnibus Stock Plan." EXECUTIVE COMPENSATION The following table sets forth the compensation paid or awarded to, or earned by, the Co-Chief Executive Officers and the four most highly compensated officers other than the Co-Chief Executive Officers (the "Named Executive Officers") for the year ended December 31, 1996. SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(1)(2) -------------------------------NAME AND PRINCIPAL POSITION ----------------------------------------------------------------------------------Robert J. Arnot.................................................................... Chairman of the Board and Co-Chief Executive Officer Gerald W. Lear..................................................................... President and Co-Chief Executive Officer Gary B. Brashers................................................................... Vice President--Manufacturing and Chief Operating Officer Eugene C. Wielepski................................................................ Vice President--Finance and Chief Financial Officer Thomas P. Ormandy.................................................................. Vice President--Sales Marc Baff.......................................................................... Vice President--Sales YEAR --------1996 SALARY ---------$ 275,676 BONUS --------$ 50,000

1996

300,220

50,000

1996

200,220

25,000

1996

160,220

20,000

1996 1996

240,000 107,620

110,000 --

(1) In their capacity as stockholders of the Company, the officers listed above were reimbursed during 1996 for payment of taxes on income of the Company that was passed through to the stockholders. See "Dividend Policy." (2) Perquisites did not exceed the lesser of $50,000 or 10% of the total salary and bonus for any of the Named Executive Officers. 43

EMPLOYMENT AGREEMENTS The Company has entered into individual employment agreements (the "Executive Employment Agreements") with each of Messrs. Arnot, Lear, Brashers, Wielepski and Ormandy (collectively, the "Executives"). The initial term of the Executive Employment Agreements began on May 15, 1997 (the "Effective Date") and will terminate on the third anniversary of the Effective Date in the case of Messrs. Arnot and Lear and on the second anniversary of the Effective Date in the case of Messrs. Brashers, Wielepski and Ormandy. The Executive Employment Agreements will automatically extend after the initial term for successive one-year terms, unless notice not to extend is given by either party at least 60 days prior to the end of the then current term. The Executive Employment Agreements provide for an annual base salary of $400,000, $400,000, $240,000, $200,000, and $300,000 plus up to 20% thereof as bonus, respectively, which may be increased based on periodic reviews by the Compensation Committee. In addition, the Executive Employment Agreements provide that the Executives are entitled to participate in any bonus and stock option plans, programs, arrangements and practices sponsored by the Company as may be established from time to time by the Board of Directors of the Company for the benefit of such executive employees, in accordance with the terms of such plans. Each Executive is also entitled to certain fringe benefits, including Company-paid health and life insurance. If any of the Executives is terminated without cause (as such term is defined in the Executive Employment Agreements), then such Executive will receive as severance his then current base salary for the remainder of his term of employment. The Executive will also continue to participate in Company-sponsored health, life insurance and other fringe benefit plans and programs during the severance period. The Executive Employment Agreements also include certain noncompetition, nonsolicitation and confidentiality provisions. 1997 OMNIBUS STOCK PLAN On May 15, 1997, the Board of Directors of the Company and the Company's stockholders adopted the 1997 Omnibus Stock Plan (the "Plan"). The purpose of the Plan is to promote the long-term growth and profitability of the Company by providing key people with incentives to improve stockholder value and contribute to the growth and financial success of the Company, and by enabling the Company to attract, retain and reward the best-available persons for positions of substantial responsibility. The maximum number of shares of Common Stock that may be issued with respect to awards granted under the Plan is 500,000. The Plan is administered by the Compensation Committee of the Board of Directors. Participation in the Plan will be open to all employees, officers, directors and consultants of the Company or any of its affiliates, as may be selected by the Compensation Committee from time to time. The Plan allows for stock options, stock appreciation rights, stock awards, phantom stock awards and performance awards to be granted. The Compensation Committee will determine the prices, vesting schedules, expiration dates and other material conditions upon which such awards may be exercised. DEFINED BENEFIT PENSION PLAN The Company maintains a defined benefit pension plan (the "Pension Plan") for its employees. The normal retirement benefit, payable at age 65, is 20% of base compensation up to $10,000 plus 39.5% of base compensation over $10,000, prorated for service less than 30 years. A reduced benefit is also payable on early retirement, after age 55 and after 15 years of service. The Pension Plan also provides disability retirement and death benefits. The Company pays the full cost of the benefits under the Pension Plan through its contributions to a trust. The Company's cash contributions to the Pension Plan during the year ended December 31, 1996 aggregated $0.6 million. 44

The Pension Plan Table below provides the estimated annual benefits payable under the I.C. Isaacs Pension Plan upon retirement in specified compensation and years of service classifications. PENSION PLAN TABLE
YEARS OF SERVICE ----------------------------------------------------15 --------$ 10,875 10,875 10,875 10,875 10,875 10,875 10,875 10,875 10,875 10,875 10,875 20 --------$ 14,500 14,500 14,500 14,500 14,500 14,500 14,500 14,500 14,500 14,500 14,500 25 --------$ 18,126 18,126 18,126 18,126 18,126 18,126 18,126 18,126 18,126 18,126 18,126 30 --------$ 21,751 21,751 21,751 21,751 21,751 21,751 21,751 21,751 21,751 21,751 21,751 35 --------$ 21,751 21,751 21,751 21,751 21,751 21,751 21,751 21,751 21,751 21,751 21,751

RENUMERATION ------------$ 100,000 125,000 150,000 175,000 200,000 225,000 250,000 300,000 400,000 450,000 500,000 ............................................. ............................................. ............................................. ............................................. ............................................. ............................................. ............................................. ............................................. ............................................. ............................................. .............................................

The compensation considered in determining benefits under the plan (as provided in the column titled "Remuneration") is the annual average compensation for the five consecutive calendar years producing the highest average. The compensation considered is limited to $75,000. All amounts of salary, bonus and other compensation as reported in the Summary Compensation Table, up to $75,000, are included in compensation considered under the plan. The amounts of benefit provided in the Pension Plan Table are the amounts of benefit payable per year in equal monthly installments for the life expectancy of the participants (i.e., straight life annuity amounts). The plan is integrated with Social Security, and its benefit formula is as follows: (i) 0.6667% of compensation, multiplied by years of service up to 30 years; plus (ii) 0.65% of compensation in excess of $10,000 multipled by years of service up to 30 years. The estimated credited years of service for each of the Named Executive Officers are as follows, estimated as of January 1, 1997:
NAME -------------------------------------------------------------------------Robert J. Arnot........................................................... Gerald W. Lear............................................................ Gary B. Brashers.......................................................... Eugene C. Wielepski....................................................... Thomas P. Ormandy......................................................... Marc Baff................................................................. ESTIMATED CREDITED YEARS OF SERVICE ----------------------5 34 18 23 10 19

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Company did not have a Compensation Committee during 1996, but each of Messrs. Arnot and Lear (each of whom also served as an executive officer of the Company during 1996) participated in deliberations concerning executive compensation. The Executive Employment Agreements were approved by the Company's current Compensation Committee. KEY MAN INSURANCE The following individuals are key employees of the Company, and their contribution to the Company has been and will be a significant factor in the Company's future success: Robert J. Arnot, Gerald W. Lear, Gary B. Brashers and Eugene C. Wielepski. The loss of the services of one or more of these executive 45

officers for an extended period of time could have a material adverse effect on the Company's financial condition or results of operations. The Company maintains and is the beneficiary of life insurance policies in the amount of $1.0 million on the lives of each of Messrs. Arnot, Lear and Brashers and in the amount of $0.5 million on the life of Mr. Wielepski. CERTAIN TRANSACTIONS RESTATED SHAREHOLDERS' AGREEMENT The Company's Shareholders' Agreement dated December 20, 1984, as amended, has been amended and restated, effective as of the time of consummation of the Offering. Pursuant to the Restated Shareholders' Agreement, Messrs. Robert J. Arnot, Gerald W. Lear, Ira J. Hechler and Jon Hechler are designated as Principal Shareholders and the other stockholders of the Company immediately prior to consummation of the Offering are designated as Non-Principal Shareholders. The Principal Shareholders and the Non-Principal Shareholders have agreed to vote their shares of Common Stock, in elections to fill Class I and Class II of the Board of Directors, to elect nominees of the Principal Shareholders. The Restated Shareholders' Agreement provides that each of the Principal Shareholders has granted to each of the other Principal Shareholders and to the Company rights of first refusal with respect to the sale of any shares of the Company's outstanding Common Stock. The Restated Shareholders' Agreement provides that each of the Non-Principal Shareholders holding, at the time of the contemplated transfer, in excess of 0.5% of the outstanding Common Stock of the Corporation has granted to (i) each of the Principal Shareholders, (ii) each Non-Principal Shareholder and (iii) the Company, rights of first refusal with respect to the sale of any shares of the Company's outstanding Common Stock. The Restated Shareholders' Agreement also provides that in the event that any two of (i) Robert J. Arnot, (ii) Gerald W. Lear and (iii) Ira J. Hechler and Jon Hechler (a "Majority") agree to enter into a transaction with a third party for the tender of shares (including, without limitation, in a change of control transaction), the rights of first refusal set forth above shall not apply and the Majority and/or the Company may require the other Principal Shareholders and Non-Principal Shareholders to participate in such transaction on the same terms and conditions applicable to the Majority. ACQUISITION OF LIMITED PARTNERSHIP INTEREST Prior to the Closing Date, the Company's wholly-owned subsidiary, Isaacs Design, Inc., will acquire the outstanding 1% limited partnership interest in the Partnership from Ira J. Hechler, a director and stockholder of the Company, in exchange for $280,000 in cash. See "Company Organization." 46

PRINCIPAL STOCKHOLDERS The following table sets forth certain information with respect to the beneficial ownership of the Company's Common Stock as of September 30, 1997, and as adjusted to reflect the sale of the Common Stock being offered hereby (assuming no exercise of the Underwriters' over-allotment option) by (i) each person (or group of affiliated persons) who is known by the Company to own beneficially more than 5% of the outstanding Common Stock, (ii) each of the Company's directors, (iii) each of the Named Executive Officers and (iv) all directors and executive officers of the Company as a group:
BENEFICIAL OWNERSHIP OF COMMON STOCK PRIOR TO THE OFFERING ----------------------NUMBER PERCENT ---------- ----------671,688 11.19% 671,688 11.19 432,355 7.21 277,863 4.63 237,480 3.96 1,217,042 20.28 548,687 9.14 395,307 6.59 0 * 0 * 4,452,110 74.20% BENEFICIAL OWNERSHIP OF COMMON STOCK AFTER THE OFFERING ----------------------NUMBER PERCENT ---------- ----------671,688 6.85% 671,688 6.85 432,355 4.41 277,863 2.84 237,480 2.42 1,217,042 12.42 548,687 5.60 395,307 4.03 0 * 0 * 4,452,110 45.43%

NAME OF BENEFICIAL OWNERS (1) --------------------------------------------------------------------Robert J. Arnot...................................................... Gerald W. Lear....................................................... Gary B. Brashers..................................................... Eugene C. Wielepski.................................................. Thomas P. Ormandy.................................................... Ira J. Hechler....................................................... Jon Hechler.......................................................... The Stanley Keller Irrevocable Trust (2)............................. Ronald S. Schmidt.................................................... Marc Baff............................................................ All directors and executive officers as a group (10 persons).........

* Less than one percent. (1) The business address of each person listed above beneficially owning more than 5% of the outstanding Common Stock is c/o I.C. Isaacs & Company, Inc., 3840 Bank Street, Baltimore, Maryland 21224-2522. Except as described below and subject to the Restated Shareholders' Agreement and applicable community property laws and similar laws, each person listed above has sole voting and investment power with respect to such shares. See "Certain Transactions--Restated Shareholders' Agreement." (2) The trustees of the Stanley Keller Irrevocable Trust are Barbara Keller and Howard Schultz. 47

SHARES ELIGIBLE FOR FUTURE SALE Prior to the Offering, there has been no public market for the Common Stock. No predictions can be made as to the effect, if any, that future sales of Common Stock, and options to acquire shares of Common Stock, or the availability of shares for future sale, will have on the market price prevailing from time to time. Sales of substantial amounts of Common Stock in the public market, or the perception that such sales may occur, could have a material adverse effect on the market price of the Common Stock. See "Risk Factors--Future Sales by Existing Stockholders; Shares Eligible for Future Sale" and "Management--1997 Omnibus Stock Plan." Upon the consummation of the Offering, the Company will have 9.8 million shares of Common Stock outstanding. Of these shares, the 3.8 million shares of Common Stock sold by the Company in the Offering will be freely tradable without restriction or further registration under the Securities Act, unless held by an "affiliate" of the Company (as that term is defined under the Securities Act). Any such affiliate will be subject to the resale limitations of Rule 144 adopted under the Securities Act. The remaining 6.0 million shares of Common Stock outstanding are "restricted securities" for purposes of Rule 144 and are held by "affiliates" of the Company within the meaning of Rule 144 under the Securities Act. Restricted securities may not be resold in a public distribution except in compliance with the registration requirements of the Securities Act or pursuant to an exemption therefrom, including the exemption provided by Rule 144. In general, under Rule 144, a person (or persons whose shares are aggregated), including a person who may be deemed to be an "affiliate" of the Company, is entitled to sell within any three-month period a number of shares beneficially owned for at least one year that does not exceed the greater of (i) 1% of the then outstanding shares of Common Stock or (ii) the average weekly trading volume of the outstanding shares of Common Stock during the four calendar weeks preceding such sale. Sales under Rule 144 are also subject to certain requirements as to the manner of sale, notice and the availability of current public information about the Company. However, a person (or persons whose shares are aggregated) who is not an "affiliate" of the Company during the 90 days preceding a proposed sale by such person and who has beneficially owned "restricted securities" for at least two years is entitled to sell such shares under Rule 144 without regard to the volume, manner of sale or notice requirements. The Company, together with each of its executive officers, directors and stockholders beneficially owning in the aggregate 61.2% of the shares of Common Stock outstanding after the Offering have entered into lock-up agreements with The Robinson-Humphrey Company, LLC and Legg Mason Wood Walker, Incorporated, as representatives of the Underwriters, pursuant to which they have agreed not to, directly or indirectly, sell, offer to sell, contract to sell, solicit an offer to buy, grant any option for the purchase or sale of, assign, pledge, distribute or otherwise transfer, dispose of or encumber (or make any announcement with respect to any of the foregoing), any of their shares of Common Stock (other than those being sold pursuant to this Offering) or any options, rights, warrants or other securities convertible into or exercisable or exchangeable for Common Stock or evidencing any right to purchase or subscribe for shares of Common Stock for a period of up to 180 days following the date of this Prospectus without the prior written consent of the representatives of the Underwriters. In addition, certain restrictions on transfers of shares of Common Stock by the existing stockholders of the Company are contained in the Restated Stockholders' Agreement. Sales of substantial amounts of Common Stock in the public market, or the perception that such sales may occur, could have a material adverse effect on the market price of the Common Stock. See "Certain Transactions--Restated Shareholders' Agreement." The Company has adopted the 1997 Omnibus Stock Plan, pursuant to which an aggregate of 500,000 shares are available for option grants and other equity awards. See "Management--1997 Omnibus Stock Plan." The Company intends to file a registration statement on Form S-8 under the Securities Act to register all of the shares of Common Stock reserved for issuance under the Plan. Such registration statement is expected to be filed as soon as practicable after the date of the Offering and will automatically become effective upon filing. Shares issued under the 1997 Omnibus Stock Plan after the registration statement is filed may thereafter be sold in the public market, subject, in the case of the various holders, to the Rule 144 volume limitations applicable to affiliates, the lock-up agreement described above and any transfer or vesting restrictions imposed on the date of the grant. 48

DESCRIPTION OF CAPITAL STOCK The following summary description of the capital stock of the Company is qualified in its entirety by reference to the form of Restated Certificate and the form of Restated By-laws, each to become effective upon consummation of the Offering and each filed as an exhibit to the Registration Statement of which this Prospectus forms a part. The authorized capital stock of the Company consists of 50.0 million shares of Common Stock, par value $.0001 per share, and 5.0 million shares of Preferred Stock, par value $.0001 per share. COMMON STOCK Holders of Common Stock are entitled to one vote for each share held on all matters submitted to a vote of the stockholders, including the election of directors. The Restated Certificate does not provide for cumulative voting in the election of directors. Accordingly, holders of a majority of the shares of Common Stock entitled to vote in any election of directors may elect all of the directors standing for election. Subject to preferences that may be applicable to any Preferred Stock outstanding at the time, holders of Common Stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Board of Directors out of funds legally available therefor. See "Dividend Policy." In the event of a liquidation, dissolution or winding up of the Company, holders of Common Stock have no preemptive rights and no rights to convert their Common Stock into any other securities and there are no redemption provisions with respect to such shares. All of the outstanding shares of Common Stock are fully paid and non-assessable. The rights, preferences and privileges of holders of Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of Preferred Stock that the Board of Directors may designate and that the Company may issue in the future. At present there is no established trading market for the Common Stock. Application has been made for quotation of the Common Stock on the Nasdaq National Market under the symbol "ISAC." The transfer agent and registrar for the Common Stock is American Stock Transfer & Trust Company, New York, New York. PREFERRED STOCK The Restated Certificate provides that the Board of Directors, without further action by the stockholders, may issue shares of the Preferred Stock in one or more series and may fix or alter the relative, participating, optional or other rights, preferences, privileges and restrictions, including the voting rights, redemption provisions (including sinking fund provisions), dividend rights, dividend rates, liquidation preferences and conversion rights, and the description of and number of shares constituting any wholly unissued series of Preferred Stock. The Board of Directors, without further stockholder approval, can issue Preferred Stock with voting and conversion rights, which could adversely affect the voting power of the holders of Common Stock. No shares of Preferred Stock presently are outstanding, and the Company currently has no plans to issue shares of Preferred Stock. The issuance of Preferred Stock in certain circumstances may have the effect of delaying or preventing a change of control of the Company without further action by the stockholders, may discourage bids for the Company's Common Stock at a premium over the market price of the Common Stock and may adversely affect the market price and the voting and other rights of the holders of Common Stock. CERTAIN CERTIFICATE OF INCORPORATION, BY-LAW AND STATUTORY PROVISIONS AFFECTING STOCKHOLDERS CLASSIFIED BOARD OF DIRECTORS. The Company's Board of Directors is divided into three classes of directors, designated Class I, Class II and Class III. Each class shall consist, as nearly as possible, of one-third of the total number of directors. The term of the initial Class I directors will terminate on the date of the 1998 annual meeting of stockholders (an "Annual Meeting"), the term of the initial Class II directors 49

will expire on the date of the 1999 Annual Meeting, and the term of the initial Class III directors will expire on the date of the 2000 Annual Meeting. At each Annual Meeting, beginning in 1998, successors to the class of directors whose term expires at that Annual Meeting will be elected for a three-year term. See "Management--Board of Directors." At least two annual meetings of stockholders, instead of one, generally will be required to change the majority of the Company's Board of Directors. SPECIAL MEETINGS OF STOCKHOLDERS; STOCKHOLDER ACTION BY WRITTEN CONSENT. The Restated Certificate provides that any action required or permitted to be taken by the Company's stockholders may be effected without a meeting, without prior notice and without a vote if a consent in writing is signed by the holders of a number of shares that would be sufficient to take such action at a meeting of the stockholders. Additionally, the Restated By-laws provide that special meetings of the stockholders of the Company may be called only by the Chairman of the Board of Directors, the Chief Executive Officer or the President of the Company. ADVANCE NOTICE REQUIREMENTS OF STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS. The Restated By-laws provide that stockholders seeking to bring business before or to nominate directors at any meeting of stockholders, must provide timely notice thereof in writing. To be timely, a stockholder's notice must be delivered to, or mailed and received at, the principal executive offices of the Company not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that (i) in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date or (ii) in the case of the annual meeting of stockholders held during the 1998 fiscal year of the Company, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs. The Restated By-laws also specify certain requirements for a stockholder's notice to be in proper written form. These provisions may preclude some stockholders from bringing matters before the stockholders or from making nominations for directors. DIRECTOR AND OFFICER INDEMNIFICATION. The Delaware Corporation Law provides that a Delaware corporation may include provisions in its certificate of incorporation relieving each of its directors of monetary liability arising out of his or her conduct as a director for breach of his or her fiduciary duty except liability for (i) any breach of such director's duty of loyalty to the corporation or its stockholders, (ii) acts or omissions that are not in good faith or involve intentional misconduct or a knowing violation of law, (iii) conduct violating Section 174 of the Delaware Corporation Law (which section relates to unlawful distributions) or (iv) any transaction from which a director derived an improper personal benefit. The Company's Restated Certificate includes such provisions. To the fullest extent permitted by the Delaware Corporation Law, as amended from time to time, the Company's Restated Certificate and Restated By-laws provide that the Company shall indemnify and advance expenses to each of its currently acting and former directors and officers, and may so indemnify and advance expenses to each of its current and former employees and agents. The Company believes the foregoing provisions are necessary to attract and to retain qualified persons as directors and officers. Prior to the consummation of the Offering, the Company intends to enter into separate indemnification agreements with each of its directors and executive officers in order to effectuate such provisions. 50

UNDERWRITING Subject to the terms and conditions of the Underwriting Agreement, the Underwriters named below, for whom The Robinson-Humphrey Company, LLC and Legg Mason Wood Walker, Incorporated are acting as representatives (the "Representatives"), have severally agreed to purchase from the Company and the Company has agreed to sell to the Underwriters, the number of shares of Common Stock set forth opposite their respective names.
NUMBER OF SHARES ------------------3,800,000 -------------------

UNDERWRITER --------------------------------------------------------------------------------The Robinson-Humphrey Company, LLC............................................... Legg Mason Wood Walker, Incorporated............................................. Total........................................................................

The Underwriting Agreement provides that the obligations of the several Underwriters thereunder are subject to approval of certain legal matters by counsel and to various other conditions. The nature of the Underwriters' obligations is such that they are committed to purchase all shares of Common Stock offered hereby if any are purchased. The Underwriters propose to offer the shares of Common Stock directly to the public at the initial public offering price set forth on the cover page of this Prospectus and to certain dealers at such price less a concession not in excess of $ per share. The Underwriters may allow, and such dealers may reallow, a concession not in excess of $ per share in sales to certain other dealers. After the Offering, the public offering price and other selling terms may be changed. The Company has granted to the Underwriters a 30-day option to purchase up to an additional 570,000 shares of Common Stock at the Offering price less the underwriting discount set forth on the cover page of this Prospectus to cover over-allotments, if any. Prior to the offering made hereby, there has been no public market for the Common Stock. The initial public Offering price for the Common Stock will be determined through negotiations among the Company and the Representatives and will not be based upon any independent appraisal or valuation of the Company. Among the factors to be considered in making such determination are prevailing market and general economic conditions, the market capitalization of publicly-traded companies that the Company and the Representatives believe to be comparable to the Company, the revenues and earnings of the Company in recent periods, the experience of the Company's management, the economic characteristic of the business in which the Company competes, estimates of the business potential of the Company, the present state of the Company's development and other factors deemed relevant. The Underwriters do not intend to confirm sales of shares of Common Stock to any account over which they exercise discretionary authority. The Representatives intend to make a market in the Common Stock after completion of this Offering. The Company, together with each of its executive officers and directors and stockholders beneficially owning in the aggregate __ million shares of Common Stock, have entered into lock-up agreements with the Representatives pursuant to which they have agreed not to, directly or indirectly, sell, offer to sell, contract to sell, solicit an offer to buy, grant any option for the purchase or sale of, assign, pledge, distribute or otherwise transfer, dispose of or encumber (or make any announcement with respect to any of the foregoing) any shares of Common Stock (other than those being sold pursuant to this Offering) or any options, rights, warrants or other securities convertible into or exercisable or exchangeable for Common 51

Stock or evidencing any right to purchase or subscribe for shares of Common Stock for a period of 180 days from the date of this Prospectus without the prior written consent of the Representatives. In connection with the Offering, the Underwriters may purchase and sell shares of Common Stock in the open market. These transactions may include over-allotment and stabilizing transactions and purchases to cover syndicate short positions created in connection with the Offering. Stabilizing transactions consist of certain bids or purchases for the purpose of preventing or retarding a decline in the market price of the Common Stock, and syndicate short positions involve the sale by the Underwriters of a greater number of shares of Common Stock than they are required to purchase from the Company in the Offering. The Underwriters also may impose a penalty bid, whereby selling concessions allowed to syndicate members or other broker-dealers in respect of the shares sold in the Offering may be reclaimed by the syndicate if such shares of Common Stock are repurchased by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the Common Stock, which may be higher than the price that might otherwise prevail in the open market; and these activities, if commenced, may be discontinued at any time. These transactions may be effected in the Nasdaq National Market, in the over-the-counter market or otherwise. The Company has agreed to indemnify the Underwriters against, and to contribute to losses arising out of, certain liabilities, including liabilities under the Securities Act. LEGAL MATTERS The validity of the Common Stock offered hereby will be passed upon for the Company by Piper & Marbury L.L.P. Certain legal matters relating to the Offering will be passed upon for the Underwriters by Alston & Bird LLP. EXPERTS The consolidated financial statements and schedule included in this Prospectus and in the Registration Statement have been audited by BDO Seidman, LLP, independent certified public accountants, to the extent and for the periods set forth in their reports appearing elsewhere herein and in the Registration Statement and have been included herein in reliance upon such reports given upon the authority of said firm as experts in accounting and auditing. 52

ADDITIONAL INFORMATION The Company has filed with the Securities and Exchange Commission (the "Commission") a Registration Statement on Form S-1 (the "Registration Statement") under the Securities Act with respect to the Common Stock offered hereby. This Prospectus, which is part of the Registration Statement, does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto, certain items of which are omitted as permitted by the rules and regulations of the Commission. For further information with respect to the Company or the Common Stock, reference is made to the Registration Statement and the exhibits and schedules filed as a part thereof. Statements contained in this Prospectus regarding the contents of any contract or any other document are not necessarily complete and, in each instance, reference is hereby made to the copy of such contract or other document filed as an exhibit to such Registration Statement. The Registration Statement, including exhibits thereto, may be inspected, without charge, and copies of all or any part thereof may be obtained upon payment of prescribed fees at the public reference facilities of the Commission, maintained by the Commission at its principal office located at 450 Fifth Street, N.W., Washington, D.C. 20549, the New York Regional Office located at Seven World Trade Center, 13th Floor, New York, New York 10048, and the Chicago Regional Office located at Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Such material may also be accessed electronically by means of the Commission's home page on the Internet at http:\\www.sec.gov. Statements contained in this Prospectus concerning the contents of any contract or other document are not necessarily complete and, in each instance, reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference. The Company intends to furnish its stockholders with annual reports containing financial statements audited by independent accountants and with quarterly reports containing unaudited financial information for each of the first three quarters of each fiscal year. 53

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Certified Public Accountants.................................... Consolidated Balance Sheets at December 31, 1995, 1996 and June 30, 1997 (unaudited)......................................................................... Consolidated Statements of Income for the years ended December 31, 1994, 1995, 1996 and the six months ended June 30, 1996 and June 30, 1997 (unaudited)................ Consolidated Statements of Stockholders' Equity for the years ended December 31, 1994, 1995, 1996 and the six months ended June 30, 1996 and June 30, 1997 (unaudited)..... Consolidated Statements of Cash Flows for the years ended December 31, 1994, 1995, 1996 and the six months ended June 30, 1996 and June 30, 1997 (unaudited)........... Notes to Consolidated Financial Statements............................................ F-2 F-3 F-4 F-5 F-6 F-7

F-1

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Board of Directors and Stockholders I.C. Isaacs & Company, Inc. Baltimore, Maryland We have audited the accompanying consolidated balance sheets of I.C. Isaacs & Company, Inc. and subsidiaries as of December 31, 1995 and 1996 and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of I.C. Isaacs & Company, Inc. and subsidiaries at December 31, 1995 and 1996 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1996 in conformity with generally accepted accounting principles. BDO Seidman, LLP Washington, D.C. March 31, 1997, except for Note 9, the dates of which are May 15, 1997 and September 24, 1997 and Note 5, the date of which is September 30, 1997 F-2

I.C. ISAACS & COMPANY, INC. CONSOLIDATED BALANCE SHEETS
DECEMBER 31, ---------------------------1995 1996 ------------- ------------ASSETS Current Cash, including temporary investments of $779,436, $368,175 and $421,534................................................ Accounts receivable, less allowance for doubtful accounts of $350,000, $660,000 and $700,000 (Note 3).................... Inventories (Notes 1 and 3)................................... Prepaid expenses and other.................................... Total current assets............................................ Property, Plant and Equipment, at cost, less accumulated depreciation and amortization (Notes 2 and 3)................. Goodwill, less accumulated amortization of $731,025, $797,265 and $813,825.................................................. Other Assets (Note 5)........................................... PRO FORMA JUNE 30, JUNE 30, 1997 1997 ------------- ------------(UNAUDITED)

$

1,411,954

$

938,799

$

1,503,654

$

1,224,114

10,365,050 14,323,730 703,267 ------------26,804,001 2,818,637 1,921,075 219,941 ------------$ 31,763,654 ------------------------$ 1,217,832

16,582,990 14,090,974 1,266,655 ------------32,879,418 2,399,822 1,854,835 122,565 ------------$ 37,256,640 ------------------------$ 1,150,679

25,470,164 22,007,213 1,505,699 ------------50,486,730 2,595,631 1,821,715 212,113 ------------$ 55,116,189 ------------------------$ 2,177,148

25,470,164 22,007,213 1,505,699 ------------50,207,190 2,595,631 1,821,715 1,512,113 ------------$ 56,136,649 ------------------------$ 2,177,148

LIABILITIES AND STOCKHOLDERS' EQUITY Current Checks issued against future deposits......................... Current maturities of term loan and revolving line of credit (Note 3).................................................... Current maturities of capital lease obligations (Note 3)...... Accounts payable.............................................. Accrued expenses and other current liabilities (Note 4)....... Accrued compensation.......................................... Distribution payable.......................................... Total current liabilities....................................... Long-term Debt (Note 3) Term loan..................................................... Capital lease obligations..................................... Junior subordinated notes..................................... Total long-term debt............................................ Minority interest............................................... Commitments and Contingencies (Notes 3, 5 and 6) STOCKHOLDERS' EQUITY (Note 9): Preferred stock; $.0001 par value; 5,000,000 shares authorized, none outstanding................................ Common stock; $.0001 par value; 50,000,000 shares authorized; 6,037,048 shares issued; 6,000,000 shares outstanding....... Additional paid-in capital.................................... Retained earnings............................................. Treasury stock, at cost (37,048 shares)....................... Total stockholders' equity......................................

7,417,500 223,999 5,110,126 1,816,957 210,810 -------------15,997,224 ------------116,649 575,403 311,130 ------------1,003,182 ------------118,431 -------------

6,520,418 216,764 6,378,310 2,144,277 194,710 -------------16,605,158 ------------699,994 358,638 -------------1,058,632 ------------200,273 -------------

18,300,006 178,931 7,481,040 2,719,607 241,682 -------------31,098,414 ------------599,992 272,636 -------------872,628 ------------279,540 -------------

18,300,006 178,931 7,481,040 2,719,607 241,682 15,400,000 ------------46,498,414 ------------599,992 272,636 -------------872,628 --------------------------

-604 266,377 14,392,704 (14,868) ------------14,644,817 ------------$ 31,763,654 -------------------------

-604 266,377 19,140,464 (14,868) ------------19,392,577 ------------$ 37,256,640 -------------------------

-604 266,377 22,613,494 (14,868) ------------22,865,607 ------------$ 55,116,189 -------------------------

-604 266,377 8,513,494 (14,868) ------------8,765,607 ------------$ 56,136,649 -------------------------

See accompanying summary of accounting policies and notes to consolidated financial statements. F-3

I.C. ISAACS & COMPANY, INC. CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, -------------------------------------------1994 1995 1996 ------------- ------------- -------------Net sales.................................. Cost of sales.............................. Gross profit............................... Operating Expenses Selling (Note 5)......................... Distribution and shipping................ General and administrative............... Recovery of legal fees (Note 5).......... Total operating expenses................... Operating income........................... Other Income (Expense) Interest................................. Other, net (Note 8)...................... Total other income (expense)............... Income before minority interest and extraordinary item....................... Minority interest.......................... Income before extraordinary item........... Extraordinary Item--Gain on extinguishment of debt (Note 3)......................... Net income................................. Pro forma financial information: Income before income taxes, as presented... Pro forma provision for income taxes (unaudited).............................. Pro forma net income (unaudited)........... Pro forma earnings per share (unaudited)... Weighted average shares outstanding........ $ 85,298,186 62,216,041 ------------23,082,145 ------------10,473,631 2,045,911 5,813,853 -------------18,333,395 ------------4,748,750 ------------$ 93,271,157 68,529,969 ------------24,741,188 ------------12,101,456 2,378,728 5,786,524 -------------20,266,708 ------------4,474,480 ------------$ 118,655,253 84,421,651 -------------34,233,602 -------------SIX MONTHS ENDED JUNE 30, ---------------------------1996 1997 ------------- ------------(UNAUDITED) $ 51,898,868 $ 77,709,554 36,223,683 52,020,970 ------------- ------------15,675,185 25,688,584 ------------- ------------11,630,072 1,977,534 3,375,974 (117,435) ------------16,866,145 ------------8,822,439 -------------

16,714,871 8,056,958 2,669,093 1,227,549 6,243,327 2,733,753 (718,558) --------------- ------------24,908,733 12,018,260 -------------- ------------9,324,869 3,656,925 -------------- -------------

(1,191,047) (1,247,353) (1,365,163) (659,972) (922,251) 1,235,030 (3,178) 84,795 81,792 22,198 ------------- ------------- -------------- ------------- ------------43,983 (1,250,531) (1,280,368) (578,180) (900,053) ------------- ------------- -------------- ------------- ------------4,792,733 3,223,949 8,044,501 3,078,745 7,922,386 (52,520) (32,593) (81,842) (30,974) (79,267) ------------- ------------- -------------- ------------- ------------4,740,213 3,191,356 7,962,659 3,047,771 7,843,119 388,770 ------------$ 5,128,983 ------------------------$ 5,128,983 -------------$ 3,191,356 ------------------------$ 3,191,356 --------------$ 7,962,659 --------------------------$ 7,962,659 -------------$ 3,047,771 ------------------------$ 3,047,771 -------------$ 7,843,119 ------------------------$ 7,843,119

2,103,000 ------------$ 3,025,983 -------------------------

1,308,000 ------------$ 1,883,356 -------------------------

3,265,000 -------------$ 4,697,659 --------------------------$ 0.65 7,184,615

1,250,000 ------------$ 1,797,771 -------------------------

3,216,000 ------------$ 4,627,119 ------------------------$ 0.64 7,184,615

See accompanying summary of accounting policies and notes to consolidated financial statements. F-4

I.C. ISAACS AND COMPANY, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
PREFERRED STOCK -----------------------SHARES AMOUNT ----------- ----------------------------------------------------------------------------------------------------------------------------------------------------------------COMMON STOCK ---------------------SHARES AMOUNT --------- ----------6,037,048 $ 604 -------------6,037,048 -----------6,037,048 ----------6,037,048 ----------6,037,048 ---------------------------604 -------------604 ------------604 ------------$ 604 --------------------ADDITIONAL PAID-IN CAPITAL ----------$ 247,589 -------------247,589 -18,788 ----------266,377 ------------266,377 ------------$ 266,377 --------------------RETAINED TREASURY EARNINGS STOCK TOTAL ---------- --------- ---------$10,611,742 $ (63,143) $10,796,792 5,128,983 -5,128,983 (1,603,511) -(1,603,511) -(13,579) (13,579) ---------- --------- ---------14,137,214 (76,722) 14,308,685 3,191,356 -3,191,356 (2,935,866) (2,935,866) -61,854 ---------- --------14,392,704 (14,868) 7,962,659 (3,214,899) ----------- --------19,140,464 (14,868) 7,843,119 -(4,370,089) ----------- --------80,642 ---------14,644,817 7,962,659 (3,214,899) ---------19,392,577 7,843,119 (4,370,089) ----------

Balance at December 31, 1993... Net income..................... Stockholder distributions...... Purchase of treasury stock (100 shares)................. Balance at December 31, 1994... Net income..................... Stockholder distributions...... Sale of treasury stock (100 shares)...................... Balance at December 31, 1995... Net income..................... Stockholder distributions...... Balance at December 31, 1996... Net income (unaudited)......... Stockholder distributions (unaudited).................. Balance at June 30, 1997 (unaudited)..................

$22,613,494 $ (14,868) $22,865,607 ---------- --------- ------------------- --------- ----------

See accompanying summary of accounting policies and notes to consolidated financial statements. F-5

I.C. ISAACS & COMPANY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, ---------------------------------1994 1995 1996 ---------- ---------- ---------Operating Activities Net income..................................... Adjustments to reconcile net income to net cash provided by operating activities Write-off of other assets.................... Extraordinary gain........................... Provision for doubtful accounts.............. Write-off of accounts receivable............. Provision for sales returns and discounts.... Sales returns and discounts.................. Provision of overcharges..................... Depreciation and amortization................ (Gain) loss on sale of assets................ Minority interest............................ (Increase) decrease in assets Accounts receivable........................ Inventories................................ Prepaid expenses and other................. Other assets............................... Increase (decrease) in liabilities Checks issued against future deposits...... Accounts payable........................... Accrued expenses and other current liabilities.............................. Accrued compensation......................... Cash provided by (used in) operating activities....................................... Investing Activities (Purchase) sale of treasury stock.............. Proceeds from sale of assets................... Capital expenditures........................... Cash used in investing activities................ Financing Activities Stockholder distributions...................... Principal payments on debt..................... Principal proceeds from debt................... Deferred financing costs....................... Cash provided by (used in) financing activities....................................... Increase (decrease) in cash and cash equivalents...................................... Cash and Cash Equivalents, at beginning of period........................................... Cash and Cash Equivalents, at end of period...... $5,128,983 $3,191,356 $7,962,659 SIX MONTHS ENDED JUNE 30, ----------------------1996 1997 ---------- ----------(UNAUDITED) $3,047,771 $ 7,843,119 --553,895 (513,895) 4,790,896 (5,190,096) 150,450 495,669 -79,267 (8,678,424) (7,916,239) (239,044) -1,026,469 1,102,730

61,981 ---(388,770) ---278,338 398,451 1,193,693 391,646 (428,338) (398,451) (883,693) (391,646) 5,545,414 5,104,266 5,955,658 2,297,288 (5,483,107) (5,062,285) (5,717,525) (2,169,616) ----1,512,934 1,477,450 1,359,252 766,529 -99,115 (71,800) -52,520 32,594 81,842 30,975 (2,915,062) 886,051 (6,766,073) (5,747,646) 470,913 (2,936,042) 232,756 (1,323,231) 459,543 (161,621) (563,388) (119,115) (325,000) ---440,374 (1,099,403) 665,696 52,470 ---------4,029,486 ---------345,929 971,255 (67,153) 1,268,184 245,239 1,725,557

43,334 327,320 (430,376) 46,972 (44,030) (16,100) (79,663) 575,331 ---------- ---------- ---------- ----------3,947,372 ---------4,295,632 ---------(1,756,288) (5,872,900) ---------- -----------

(13,579) 80,642 ----13,750 71,800 --(676,648) (669,464) (701,821) (163,244) (639,609) ---------- ---------- ---------- ---------- ----------(690,227) (575,072) (630,021) (163,244) (639,609) ---------- ---------- ---------- ---------- ----------(1,603,511) (2,935,866) (3,214,899) (1,476,959) (4,370,089) (1,783,263) (760,618) (1,632,216) (222,001) (223,836) 833,230 291,552 783,349 3,453,782 11,779,587 --(75,000) (75,000) (108,298) ---------- ---------- ---------- ---------- ----------(2,553,544) (3,404,932) (4,138,766) 1,679,822 ---------- ---------- ---------- ---------785,715 658,871 ---------$1,444,586 ------------------(32,632) 1,444,586 ---------$1,411,954 ------------------(473,155) 1,411,954 ---------$ 938,799 ------------------(239,710) 1,411,954 ---------$1,172,244 ------------------7,077,364 ----------564,855 938,799 ----------$ 1,503,654 ---------------------

See accompanying summary of accounting policies and notes to consolidated financial statements. F-6

I.C. ISAACS & COMPANY, INC. SUMMARY OF ACCOUNTING POLICIES (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) BASIS OF PRESENTATION The consolidated financial statements include the accounts of I.C. Isaacs & Company, Inc. ("ICI"), I.C. Isaacs Europe, S.L. ("Isaacs Europe") and I.C. Isaacs & Company L.P. (the "Partnership"). Collectively, ICI, Isaacs Europe and the Partnership are referred to herein as the "Company." ICI, operates as the general partner of the Partnership and has a 99% ownership interest. The limited partner, with a 1% ownership interest, is an individual. The Company has accounted for the 1% limited partner's ownership as a minority interest in the accompanying consolidated financial statements. The Company established Isaacs Europe in July 1996 as the exclusive licensee of Beverly Hills Polo Club sportswear in Europe. Isaacs Europe did not have any significant revenue or expenses in 1996 or through June 30, 1997. All intercompany balances and transactions have been eliminated. BUSINESS DESCRIPTION The Company, which operates in one business segment, designs, manufactures and markets branded sportswear for men, women and boys under the BOSS brand in the United States and Puerto Rico and under the Beverly Hills Polo Club brand in the United States, Puerto Rico and Europe. The Company also manufactures women's sportswear under various Company-owned brand names as well as under third-party private labels. INTERIM FINANCIAL INFORMATION The financial information as of June 30, 1997 and for the six months ended June 30, 1996 and 1997 is unaudited. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such periods. Results for interim periods are not necessarily indicative of results to be expected for an entire year. REORGANIZATION AND PRO FORMA INFORMATION (UNAUDITED) ICI has or will initiate certain events (the "Reorganization") in connection with its initial public offering of common stock. ICI has established a wholly-owned subsidiary ("Isaacs Design, Inc.") to purchase, at book value, the ownership interest in the Partnership held by the limited partner. Consequently, upon completion of the initial public offering, the consolidated group will include ICI, Isaacs Design, Inc., Isaacs Europe and the Partnership. In connection with the Reorganization, ICI will declare a dividend to the stockholders representing earned but undistributed earnings through the closing date of the Reorganization. Concurrently with the Reorganization, ICI will terminate its Subchapter S corporation status and will become subject to federal and state income taxes. The accompanying consolidated statements of income reflect a pro forma provision for income taxes for the years ended December 31, 1994, 1995 and 1996 and for the six-month periods ended June 30, 1996 and 1997, based upon pretax income as if the consolidated group discussed above had been subject to federal and state income taxes, based on an estimated effective tax rate of 41.0%. In connection with termination of its Subchapter S corporation status, ICI will record a net deferred tax asset and accompanying tax benefit to reflect the differences in the financial statement and income tax bases of the assets and liabilities which principally relate to uniform inventory capitalization, allowance for doubtful accounts, depreciation and other accruals. If the Subchapter S corporation status had terminated on June 30, 1997, the net deferred tax asset that would have been recognized would have been approximately $1.3 million. F-7

I.C. ISAACS & COMPANY, INC. SUMMARY OF ACCOUNTING POLICIES (CONTINUED) (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) Pro forma earnings per share are based on pro forma net income and the weighted average number of shares of common stock outstanding adjusted to include the estimated number of shares (1,184,615) being sold by ICI which would be necessary to fund the distribution of all previously earned but undistributed Subchapter S corporation earnings. This amount, estimated at $15.4 million as of June 30, 1997, will be paid as the initial Subchapter S corporation distribution upon the closing of the initial public offering. Supplementary pro forma net income per share for the year ended December 31, 1996 and the six months ended June 30, 1997 of $0.69 and $0.59, respectively, is based upon the weighted number of shares of common stock used in the calculation of pro forma net income per share increased by the sale of 555,416 and 1,453,846 shares, respectively, assuming an initial offering price of $13.00, the proceeds of which would be necessary to repay approximately $7,220,408 and $18,899,998, respectively, of the Company's term loan and revolving line of credit. The pro forma balance sheet as of June 30, 1997 reflects the termination of the Subchapter S corporation status, establishment of the net deferred tax asset, declaration of the dividend of the earned but undistributed Subchapter S corporation earnings and the purchase of the minority interest as if they had occurred on June 30, 1997. RISKS AND UNCERTAINTIES The apparel industry is highly competitive. The Company competes primarily with larger, well capitalized companies, which may seek to increase market share through price reductions. The risk to the Company is that such a strategy may ultimately lead to reduced profit margins. In the past several years, many of the Company's competitors have switched much of their apparel manufacturing from the United States to foreign locations such as Mexico, the Dominican Republic and throughout Asia. As competitors lower production costs it gives them greater flexibility to alter prices. Over the last several years, the Company has switched a significant portion of its production to contractors outside the United States to reduce costs. Management believes that it will continue this strategy for the foreseeable future. The Company faces the uncertainty of the continued availability of increases in its borrowing capacity. Adequate working capital is essential to an apparel manufacturer due to the significant cash investment in inventory and accounts receivable and the long lead time between payment for such inventory and collection of customer receivables. The Company believes that it has an excellent relationship with its asset-based lender and that it will be able to obtain sufficient working capital to finance its requirements. The Company faces other risks inherent in the apparel industry. These risks include changes in fashion trends and related consumer acceptance and the continuing consolidation in the retail segment of the apparel industry. The Company's ability, or inability, to manage these risk factors could influence future financial and operating results. USE OF ESTIMATES The preparation of financial statements in accordance with generally accepted accounting principles requires management to make certain estimates and assumptions, particularly regarding valuation of accounts receivable and inventory, recognition of liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. F-8

I.C. ISAACS & COMPANY, INC. SUMMARY OF ACCOUNTING POLICIES (CONTINUED) (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) CONCENTRATION OF CREDIT RISK Financial instruments which potentially expose the Company to concentrations of credit risk consist primarily of trade accounts receivable. The Company's customer base is not concentrated in any specific geographic region but is concentrated in the retail industry. For the years ended December 31, 1994, 1995 and 1996 sales to one customer were 20.0%, 19.0% and 13.0% of total sales, respectively. The significant customer was the same in 1994 and 1995, but was different in 1996. For the six months ended June 30, 1996 and 1997 sales to one customer were 14.0% and 13.0% of total sales, respectively. The Company reviews a customer's credit history before extending credit and establishes an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. The Company's actual bad debt as a percentage of net sales has been less than one-half of one percent. The Company is also subject to concentrations of credit risk with respect to its cash and cash equivalents, which it minimizes by placing these funds with high-quality institutions. INVENTORIES Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out (FIFO) method. PROPERTY, PLANT AND EQUIPMENT Property and equipment are stated at cost. Depreciation is computed over the estimated useful lives of the assets by both straight-line and accelerated methods. Leasehold improvements are amortized using the straight-line method over the life of the lease. GOODWILL The Company has recorded goodwill based on the excess of purchase price over net assets acquired, and it is being amortized on a straight-line basis over 40 years. The Company periodically evaluates goodwill for possible impairment. The analysis consists of a comparison of future projected undiscounted cash flows to the carrying value of the goodwill. Any excess goodwill would be written off due to impairment. LICENSES Included in other assets is the cost of certain licenses which allow the Company to manufacture and market certain branded apparel. The Company capitalized the cost of obtaining the licenses, and the cost of the licenses is being amortized on a straight-line basis over the initial term of three years. The Company accrues royalty expense related to the licenses at the greater of the specified percentage of sales or the minimum guaranteed royalty set forth in the license agreements. REVENUE RECOGNITION Sales are recognized upon shipment of products. Allowances for estimated returns are provided when sales are recorded. F-9

I.C. ISAACS & COMPANY, INC. SUMMARY OF ACCOUNTING POLICIES (CONTINUED) (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) ADVERTISING COSTS Advertising costs, included in selling expenses, are expensed as incurred and were $368,765, $1,498,001, $2,529,109, $1,310,092 and $1,619,346 for the years ended December 31, 1994, 1995, 1996 and six months ended June 30, 1996 and 1997, respectively. CASH EQUIVALENTS For purposes of the statements of cash flows, all temporary investments purchased with a maturity of three months or less are considered to be cash equivalents. INCOME TAXES The entities in the consolidated group include principally a Subchapter S corporation and a partnership which are not subject to federal or certain state income taxes. Therefore, the Company has made no provision for income taxes in the accompanying financial statements as taxes are the liability of the respective stockholders and partners. The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes ("SFAS 109"). Under SFAS 109, deferred taxes are determined using the liability method which requires the recognition of deferred tax assets and liabilities based on differences between financial statement and income tax bases using presently enacted tax rates. FAIR VALUE OF FINANCIAL INSTRUMENTS Financial instruments of the Company include long-term debt. Based upon current borrowing rates available to the Company, estimated fair values of these financial instruments approximate their recorded amounts. RECENT ACCOUNTING PRONOUNCEMENTS In October 1995, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation ("SFAS 123"). SFAS 123 will begin to affect the Company in fiscal 1997 with the establishment of the 1997 Omnibus Stock Plan. See "Management--1997 Omnibus Stock Plan." The Company will adopt only the disclosure provisions of SFAS 123 and account for stock-based compensation using the intrinsic value method set forth in APB Opinion 25. In March 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, Earnings Per Share ("SFAS 128"). SFAS 128 provides a different method of calculating earnings per share than is currently used in APB Opinion 15. SFAS 128 provides for the calculation of basic and diluted earnings per share. Basic earnings per share includes no dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could share in the earnings of an entity, similar to existing fully diluted earnings per share. As required by the policies of the Securities and Exchange Commission (the "Commission"), the Company has treated the shares being sold to fund the S Corporation Distribution as outstanding prior to the Offering. SFAS 128 does not have a provision requiring such treatment. The Commission is currently evaluating its policies concerning this issue. Assuming shares issued to fund the S Corporation Distribution continue to be treated as outstanding prior to the Offering, the Company believes adopting SFAS 128 will not have a F-10

I.C. ISAACS & COMPANY, INC. SUMMARY OF ACCOUNTING POLICIES (CONTINUED) (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) material effect on its calculation of earnings per share. The Company will adopt the provisions for computing earnings per share set forth in SFAS 128 in December 1997. Statement of Financial Accounting Standards No. 129, Disclosure of Information about Capital Structure ("SFAS 129") effective for periods ending after December 15, 1997, establishes standards for disclosing information about an entity's capital structure. SFAS 129 requires disclosure of the pertinent rights and privileges of various securities outstanding (stock, options, warrants, preferred stock, debt and participation rights) including dividend and liquidation preferences, participant rights, call prices and dates, conversion or exercise prices and redemption requirements. Adoption of SFAS 129 will have no effect on the Company as it currently discloses the information specified. In June 1997, the Financial Accounting Standards Board issued two new disclosure standards. The Company's results of operations and financial position will be unaffected by implementation of these new standards. Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income ("SFAS 130"), establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, SFAS 130 requires that all items that are required to be recognized under current accounting standards as components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. Statement of Financial Accounting Standards No. 131, Disclosure about Segments of a Business Enterprise ("SFAS 131"), establishes standards for the way that public enterprises report information about operating segments in annual financial statements and requires reporting of selected information about operating segments in interim financial statements issued to the public. It also establishes standards for disclosures regarding products and services, geographic areas and major customers. SFAS 131 defines operating segments as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Both SFAS 130 and SFAS 131 are effective for financial statements for periods beginning after December 15, 1997 and require comparative information for earlier years to be restated. Due to the recent issuance of these standards, management has been unable to fully evaluate the impact, if any, they may have on future financial statement disclosures. F-11

I.C. ISAACS & COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) 1. INVENTORIES Inventories consist of the following:
DECEMBER 31, ---------------------------1995 1996 ------------- ------------$ 5,068,996 $ 6,491,950 9,254,734 7,599,024 ------------- ------------$ 14,323,730 $ 14,090,974 ------------- ------------------------- ------------JUNE 30, 1997 ------------$ 7,533,430 14,473,783 ------------$ 22,007,213 -------------------------

Raw materials and work-in-process............... Finished goods..................................

2. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consists of the following:
DECEMBER 31, -------------------------1995 1996 ------------ -----------$ 185,660 $ 185,660 5,301,761 5,301,761 7,878,836 8,570,577 1,025,362 1,035,442 ------------ -----------14,391,619 15,093,440 11,572,982 -----------$2,818,637 ----------------------12,693,618 -----------$ 2,399,822 ----------------------JUNE 30, 1997 -----------$ 188,160 5,301,761 9,112,546 1,130,582 -----------15,733,049 13,137,418 -----------$ 2,595,631 ----------------------ESTIMATED USEFUL LIVES ----------18 years 5-7 years various

Land................................. Buildings and improvements........... Machinery, equipment and fixtures.... Other................................ Less accumulated depreciation and amortization.......................

F-12

I.C. ISAACS & COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) 3. LONG-TERM DEBT Long-term debt consists of the following:
DECEMBER 31, -------------------------1995 1996 ------------ -----------$ 316,653 $ 899,998 7,207,496 6,320,414 10,000 ------------- -----------7,534,149 7,220,412 799,402 575,402 311,130 ------------- -----------$ 8,644,681 $ 7,795,814 7,417,500 223,999 -----------$ 1,003,182 ----------------------6,520,418 216,764 -----------$ 1,058,632 ----------------------JUNE 30, 1997 ------------$ 799,996 18,100,002 -------------18,899,998 451,567 -------------$ 19,351,565 18,300,006 178,931 ------------$ 872,628 -------------------------

Term loan (a)..................................... Revolving line of credit (a)...................... Installment purchase obligations (b).............. Capital lease obligations (c)..................... Junior subordinated notes (d)..................... Total............................................. Less current maturities of long-term debt and revolving line of credit........................ Less current maturities of capital lease obligations.....................................

(a) The Company has a renewable term loan agreement with a borrowing limit of $1,000,000. The term loan facility is payable in 60 monthly installments of $16,667 and is collateralized by property and equipment. The term loan facility may be renewed for periods of 60 months at the option of the lender. The term loan facility bears interest at the prime rate of interest plus 2.5% (effectively 11.0% at June 30, 1997) and is payable monthly. The revolving line of credit agreement and letter of credit arrangement provide that the Company may borrow up to 80% of the net amount of eligible accounts receivable and a portion of imported inventory, as defined in the financing agreement. The revolving line of credit expires on June 30, 1998. Borrowings under the revolving line of credit and outstanding letters of credit (limited to $10.0 million) may not exceed $30.0 million and bear interest at the prime rate of interest plus 1.0% (effectively 9.5% at June 30, 1997). Additional borrowings available under the revolving line of credit and letter of credit agreements are approximately $2.6 million at June 30, 1997. Borrowings under these agreements are collateralized by the Company's accounts receivable, imported inventories and other assets. Outstanding letters of credit approximated $9.5 million at June 30, 1997. Among the provisions of the financing agreement are requirements to maintain specified levels of working capital and net worth. Retained earnings of approximately $8.0 million are restricted as to the payment of dividends. F-13

I.C. ISAACS & COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) 3. LONG-TERM DEBT (CONTINUED) Average short-term borrowings and the related interest rates are as follows:
YEARS ENDED DECEMBER 31, ---------------------------1995 1996 ------------- ------------$ 7,207,496 $ 6,320,414 9.88% 9.25% $ 10,649,725 $ 11,024,807 $ 8,518,496 $ 9,814,896 SIX MONTHS ENDED JUNE 30, ------------1997 ------------$ 11,779,587 9.50% $ 18,261,269 $ 15,880,483

Borrowings under revolving line of credit....... Weighted average interest rate.................. Maximum month-end balance during the period..... Average balance during the period...............

(b) The Company's plants were financed by the issuance of industrial revenue and general obligation bonds by municipalities in Mississippi. These obligations bore interest at rates varying between 5% and 14%. The Company repaid the remaining obligation in 1996. (c) The Company leases equipment under various capital leases which are included in property, plant and equipment in the amount of $1,048,037 at December 31, 1995 and 1996 and June 30, 1997. Amortization expense related to assets under capital leases amounted to $276,080, $190,987, $150,058, $116,856 and $58,947 for the years ended December 31, 1994, 1995, 1996 and the six months ended June 30, 1996 and 1997, respectively. As of December 31, 1996, future net minimum lease payments under capital leases that have initial or remaining noncancelable lease terms in excess of one year are as follows:
1997.............................................................. 1998.............................................................. 1999.............................................................. 2000.............................................................. Total minimum lease payments...................................... Less: amount representing interest................................ Present value of net minimum lease payments....................... Less: current portion............................................. Long-term capital lease obligations............................... $ 267,208 202,827 189,551 6,296 --------665,882 (90,480) --------575,402 (216,764) --------$ 358,638 -----------------

(d) Junior subordinated notes totaling $311,130 were due to stockholders of ICI and had a maturity date of June 1998. Interest was calculated at the prime rate of interest plus 1.5% but could not exceed 16.0%. The Company repaid these subordinated notes in October 1996. As of December 31, 1993, the Company had two junior subordinated notes outstanding to a former partner in the Partnership which totalled $1,500,000 plus approximately $150,000 in contingent fees. The notes were due in full by February 1995. On September 30, 1994, the Company repaid the two notes, at a discount of 15.0%, as well as accrued interest through September 30, 1994. The Company recognized an extraordinary gain of $388,770 for the difference between the carrying value of the subordinated debt, F-14

I.C. ISAACS & COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) 3. LONG-TERM DEBT (CONTINUED) including accrued interest and contingent payments of $1,810,104 and the repayment amount of $1,421,334. Scheduled maturities of the Company's term loan and revolving line of credit are as follows:
1997............................................................... 1998............................................................... 1999............................................................... 2000............................................................... 2001............................................................... $6,520,418 200,004 200,004 200,004 99,982 --------$7,220,412 -----------------

4. ACCRUED EXPENSES Accrued expenses consist of the following:
DECEMBER 31, -------------------------1995 1996 ------------ -----------$ 878,918 $ 1,194,637 100,000 150,000 233,818 152,701 145,913 103,745 231,142 145,736 177,402 254,244 --49,764 143,214 ------------ -----------$ 1,816,957 $ 2,144,277 ------------ ----------------------- -----------JUNE 30, 1997 -----------$ 1,592,350 100,000 228,056 14,129 359,416 211,120 151,000 63,536 -----------$ 2,719,607 -----------------------

Royalties........................................... Accrued professional fees........................... Payable to salesmen................................. Severance agreements................................ Payroll tax withholdings............................ Customer credit balances............................ Accrued bonuses..................................... Other...............................................

5. COMMITMENTS AND CONTINGENCIES The Company rents real and personal property under leases expiring at various dates through 1999. Certain of the leases stipulate payment of real estate taxes and other occupancy expenses. Minimum annual rental commitments under noncancellable operating leases in effect at December 31, 1996 are summarized as follows:
TRUCKS ---------$ 137,942 98,898 56,784 56,784 56,784 42,588 ---------$ 449,780 ------------------SHOWROOMS -----------$ 365,677 171,020 133,350 135,572 138,684 219,583 -----------$ 1,163,886 ----------------------COMPUTER HARDWARE ---------$ 138,585 144,731 52,851 22,224 5,556 ----------$ 363,947 ------------------MACHINERY ---------$ 189,969 77,269 3,653 ------------$ 270,891 ------------------TOTAL -----------$ 832,173 491,918 246,638 214,580 201,024 262,171 -----------$ 2,248,504 -----------------------

1997.................................................... 1998.................................................... 1999.................................................... 2000.................................................... 2001.................................................... Thereafter..............................................

F-15

I.C. ISAACS & COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) 5. COMMITMENTS AND CONTINGENCIES (CONTINUED) Total rent expense is as follows:
YEARS ENDED DECEMBER 31, -----------------------------------1994 1995 1996 ---------- ---------- -----------$ 536,862 $ 344,047 $ 773,987 397,705 566,533 459,823 ---------- ---------- -----------$ 934,567 $ 910,580 $ 1,233,810 ---------- ---------- --------------------- ---------- -----------SIX MONTHS ENDED JUNE 30, ---------------------1996 1997 ---------- ---------$ 388,595 $ 422,108 214,484 254,724 ---------- ---------$ 603,079 $ 676,832 ---------- ------------------- ----------

Minimum rentals.................................... Other lease costs..................................

During 1990, the Company executed a license agreement for the manufacture and sale of "sports-wear" under the "BOSS" trademark. This "BOSS" agreement expires in December 1999 with additional options to extend it through 2004. The Company may terminate the agreement if certain sales and/or profit levels are not attained. The agreement provides for certain minimum license fees and additional license fees of 5% of denim sales and 6% of non-denim sales, as defined. Total license fees amounted to $2,908,532, $2,753,422, $4,209,750, $3,305,162 and $3,651,325 for the years ended December 31, 1994, 1995, 1996 and the six months ended June 30, 1996 and 1997, respectively. The Company executed certain agreements on September 30, 1997, which upon closing, will allow it to acquire the BOSS trademark, subject to certain restrictions on foreign manufacturing and conveyance of the foreign rights to the BOSS brand to a third party. The percentage of BOSS sportswear sales to total sales was 65.1%, 66.3%, 72.2%, 69.8% and 73.4% for the years ended December 31, 1994, 1995 and 1996 and the six months ended June 30, 1996 and 1997, respectively. In September 1993, the Company purchased a license to manufacture and sell certain apparel under the Beverly Hills Polo Club trademark. The agreement was amended in 1996 and expires in December 1998, with options to extend through 2004. The licensor may terminate the agreement if the Company does not meet minimum sales requirements as set forth in the agreement. The agreement provides for minimum annual license fees or license fees of 5% of sales whichever is greater. Also, the Company is required to spend 1% of annual sales on product advertising. The license fees were $103,661, $421,234, $607,287, $273,122 and $600,356 for the years ended December 31, 1994, 1995, 1996 and the six months ended June 30, 1996 and 1997, respectively. In 1996, Isaacs Europe executed an exclusive license for the manufacture and sale, in Europe, of sportswear under the Beverly Hills Polo Club trademark. The license agreement has an initial term of three years with three one-year renewal options. The agreement provides for minimum annual license fees, beginning in the second year, or 6% of sales whichever is greater. F-16

I.C. ISAACS & COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) 5. COMMITMENTS AND CONTINGENCIES (CONTINUED) The minimum license fees under the Beverly Hills Polo Club agreement are as follows:
YEAR ENDING DECEMBER 31, ---------------------------------------------------------------------------------1997.............................................................................. 1998.............................................................................. 1999..............................................................................

$

112,500 330,000 360,000 ---------$ 802,500 -------------------

In February 1993, suit was filed against the licensor of the "BOSS" trademark in the United States and several licensees, including the Company. The complaint alleges trademark infringement related to use of the "BOSS" trademark. However, the complaint does not challenge the exclusive right of the Company to use the "BOSS" trademark in connection with the manufacture and sale of certain clothing as set forth in its exclusive license agreement. The Company executed certain agreements on September 30, 1997, which upon closing will result in settlement of the BOSS trademark litigation described above. This settlement will allow the Company to acquire the BOSS trademark for use in the manufacture and sale of apparel, subject to certain restrictions as set forth in the agreements, and the Company's transfer of the BOSS foreign rights to a third party. The Company also entered into a foreign rights manufacturing agreement with the third party under which the Company will be licensed to manufacture apparel in foreign countries in which the Company is currently manufacturing BOSS products for sale in the United States and Puerto Rico. Under the foreign rights agreement, the Company will pay royalties based on a specified percentage of net sales attributable to apparel manufactured worldwide and will be subject to an annual net sales requirement. To the extent that the Company does not achieve the net sales requirements, it will have the right, in order to avoid termination of the foreign rights agreement, to pay royalties as if it had achieved such net sales requirement. The foreign rights agreement has an initial term of four years but may be extended at the Company's option through December 31, 2007. The BOSS trademark is subject to an option to purchase from the Company under conditions set forth in the agreements. The Company is party to employment agreements with five executive officers which provide for specified levels of compensation and certain other benefits. The agreements also provide for severance payments from the termination date through the expiration date under certain circumstances. 6. RETIREMENT PLAN The Company sponsors a defined benefit pension plan that covers substantially all employees with more than one year of service. The Company's policy is to fund pension costs accrued. Contributions to the plan reflect benefits attributed to employees' service to date, as well as service expected to be earned in the future. The benefits are based on the number of years of service and the employee's compensation during the three consecutive complete years of service prior to or including the year of termination of employment. Plan assets consist primarily of common stocks, fixed income securities and cash. The latest available actuarial valuation is as of December 31, 1996. F-17

I.C. ISAACS & COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) 6. RETIREMENT PLAN (CONTINUED) Pension expense for the years ended December 31, 1994, 1995 and 1996 and the six months ended June 30, 1996 and June 30, 1997 was $305,000, $310,000, $284,000, $182,000 and $165,000, respectively. The components of pension expense for the last three years are as follows:
YEARS ENDED DECEMBER 31, ---------------------------------1994 1995 1996 ---------- ---------- ---------$ 244,000 $ 223,000 $ 208,000 470,000 485,000 555,000 (456,000) (445,000) (526,000) 47,000 47,000 47,000 ---------- ---------- ---------$ 305,000 $ 310,000 $ 284,000 ---------- ---------- ------------------- ---------- ----------

Service cost of current period........................... Interest on the projected benefit obligation............. Return on plan assets.................................... Net other costs.......................................... Pension cost.............................................

The following table sets forth the Plan's funded status and amounts recognized at December 31, 1995 and 1996:
1995 -----------$ 5,987,000 37,000 -----------6,024,000 1996 -----------$ 6,730,000 56,000 -----------6,786,000

Vested benefits................................................... Nonvested benefits................................................ Accumulated benefit obligation.................................... Effect of anticipated future compensation levels and other events.......................................................... Projected benefit obligation...................................... Fair value of assets held in the plan............................. Excess of projected benefit obligation over plan assets........... Unrecognized net loss from past experience different from that assumed......................................................... Unrecognized prior service cost................................... Unamortized liability at transition............................... Net prepaid periodic pension cost.................................

457,000 862,000 ------------ -----------6,481,000 7,648,000 6,139,000 7,357,000 ------------ -----------(342,000) (291,000) 344,000 159,000 155,000 -----------$ 316,000 ----------------------661,000 143,000 124,000 -----------$ 637,000 -----------------------

With respect to the above table, the weighted average discount rate used to measure the projected benefit obligation was 8.0%; the rate of increase in future compensation levels was 3.0%; and the expected long-term rate of return on assets was 8.0%. 7. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for interest amounted to $1,192,040, $1,272,794, $1,389,023, $961,864 and $668,096 for the years ended December 31, 1994, 1995, 1996 and the six months ended June 30, 1996 and 1997, respectively. During 1994 and 1995 the Company purchased property and equipment totalling $731,792 and $316,245, respectively, by issuing notes payable. F-18

I.C. ISAACS & COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) (INFORMATION AS OF JUNE 30, 1997 AND FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1997 IS UNAUDITED) 8. NON-RECURRING INCOME During 1991, the Company received $6.0 million under the provisions of a settlement agreement related to termination of a license. Additionally, the agreement provided that, if certain conditions are met, the Company could receive up to $3.0 million through 1998. The Company had received the maximum amount allowable under this agreement as of December 31, 1994. Included in other income for 1994 are payments of approximately $1.18 million. 9. COMMON AND PREFERRED STOCK In May 1997, the Board of Directors of ICI authorized the filing of a registration statement for an initial public offering of the Company's common stock. In May 1997, the stockholders approved an amended and restated Certificate of Incorporation which increased the authorized common shares from 20,000 to 50.0 million and established a class of preferred shares with 5.0 million shares authorized. On September 24, 1997, the Board of Directors of ICI approved a 370.4847-for-1 stock split of the common stock, which will be paid in the form of a stock dividend to the stockholders effective September 24, 1997. The change in the Company's common stock for the stock dividend has been given retroactive effect for all periods presented. In May 1997, the Company adopted the 1997 Omnibus Stock Plan (the "Plan"). Under the Plan, the Company may grant qualified and nonqualified stock options, stock appreciation rights, restricted stock or performance awards, payable in cash or shares of common stock, to selected employees. The Plan will be administered by the Board of Directors. The Company has reserved 500,000 shares of common stock for issuance under the Plan. F-19

NO DEALER, SALES PERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. TABLE OF CONTENTS
PAGE -----

Prospectus Summary............................. Risk Factors................................... Company Organization........................... Use of Proceeds................................ Dividend Policy................................ Capitalization................................. Dilution....................................... Selected Financial Data........................ Management's Discussion and Analysis of Financial Condition and Results of Operations................................... Business....................................... Management..................................... Certain Transactions........................... Principal Stockholders......................... Shares Eligible for Future Sale................ Description of Capital Stock................... Underwriting................................... Legal Matters.................................. Experts........................................ Additional Information......................... Index to Financial Statements..................

3 7 12 13 14 15 16 17

18 26 41 46 47 48 49 51 52 52 53 F-1

UNTIL __________, 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK OFFERED HEREBY, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. 3,800,000 SHARES I.C. ISAACS & COMPANY, INC. [LOGO] COMMON STOCK

PROSPECTUS

The Robinson-Humphrey Company Legg Mason Wood Walker Incorporated , 1997

PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the expenses in connection with this Registration Statement. The Company will pay all expenses of the Offering. All of such expenses are estimates, other than the filing fees payable to the Securities and Exchange Commission, NASD and Nasdaq.
Securities and Exchange Commission Filing Fee...................................... NASD Filing Fee.................................................................... Nasdaq Listing Fee................................................................. Printing and Engraving Fees and Expenses........................................... Legal Fees and Expenses............................................................ Accounting Fees and Expenses....................................................... Blue Sky Fees and Expenses......................................................... Transfer Agent Fees................................................................ Miscellaneous...................................................................... TOTAL...................................................................... $ 18,591 6,618 43,425 * * * * * * *

* To be completed in an amendment. ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Pursuant to Section 145 of the General Corporation Law of Delaware (the "Delaware Corporation Law"), Article IX of the Restated By-laws of the Registrant, a copy of which is filed as Exhibit 3.02 to this Registration Statement, provides that the Registrant shall indemnify any person in connection with any threatened, pending or completed legal proceeding (other than a legal proceeding by or in the right of the Registrant) by reason of the fact that he is or was a director, officer, employee or agent of the Registrant or is or was serving at the request of the Registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such legal proceeding if he acted in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of the Registrant, and with respect to any criminal action or proceeding, if he has no reasonable cause to believe that his conduct was unlawful. If the legal proceeding is by or in the right of the Registrant, the director or officer may be indemnified by the Registrant against expenses (including attorneys' fees) actually and reasonably incurred in connection with the defense or settlement of actually and reasonably incurred in connection with the defense or settlement of such legal proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interest of the Registrant and believed to be in or not opposed to the best interest of the Registrant and except that he may not be indemnified in respect of any claim, issue or matter as to which he shall have been adjudged to be liable to the Registrant unless a court determines otherwise. Article IX of the Registrant's Restated By-laws also allows the Registrant to maintain liability insurance on behalf of any person who is or was a director, officer, employee or agent of the Registrant or such person who serves or served as director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise at the request of the Registrant. Pursuant to Section 102(b)(7) of the Delaware Corporation Law, Article VII of the Restated Certificate of the Registrant, a copy of which is filed with Exhibit 3.1 to this Registration Statement, provides that no director of the Registrant shall be personally liable to the Registrant or its stockholders for monetary damages for any breach of his fiduciary duty as a director; provided, however, that such II-1

clause shall not apply to any liability of a director (1) for any breach of his loyalty to the Registrant or its stockholders, (2) for acts or omissions that are not in good faith or involve intentional misconduct or a knowing violation of the law, (3) under Section 174 of the Delaware Corporation Law, or (4) for any transaction from which the director derived an improper personal benefit. The form of Underwriting Agreement, filed as Exhibit 1.01 hereto, contains provisions by which the Underwriters will agree to indemnify the Registrant and each officer, director and controlling person of the Registrant against certain liabilities. The Form of Indemnification Agreement, filed as Exhibit 10.09 hereto, contains provisions by which the Registrant will agree to indemnify each of its officers and directors against certain liabilities. ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES. In January 1997, the Company issued 37,048 shares of Common Stock to Thomas P. Ormandy, an executive officer of the Company, for $39,485 cash. In June 1997, the Company issued 8,619 shares of Common Stock to existing stockholders of the Company in consideration of the cancellation of stock certificates that had been issued at a time when the Company did not have a sufficient number of authorized shares of Common Stock. Immediately prior to the consummation of the Offering the Company will effect a 370.4847-for-1 stock split pursuant to which it will issue an aggregate of approximately 6.0 million shares of Common Stock to the Company's existing stockholders. See "Company Organization." Each of the foregoing transactions was exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), in reliance on Section 3(a)(9) and/or Section 4(2) of the Securities Act on the basis that such transaction was solely with existing security holders and/or did not involve a public offering. No underwriters were involved in connection with any of the foregoing transactions. ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. (A) EXHIBITS:
EXHIBIT NO DESCRIPTION ----------- -----------------------------------------------------------------------------------------------*1.01 Form of Underwriting Agreement 3.01 Amended and Restated Certificate of Incorporation 3.02 Amended and Restated By-laws 4.01 Specimen Common Stock Certificate 5.01 Opinion of Piper & Marbury L.L.P. 10.01 Form of Amended and Restated Shareholders' Agreement 10.02 Employment Agreement dated as of May 15, 1997, between the Registrant and Robert J. Arnot 10.03 Employment Agreement dated as of May 15, 1997, between the Registrant and Gerald W. Lear 10.04 Employment Agreement dated as of May 15, 1997, between the Registrant and Gary B. Brashers 10.05 Employment Agreement dated as of May 15, 1997, between the Registrant and Eugene C. Wielepski 10.06 Employment Agreement dated as of May 15, 1997, between the Registrant and Thomas Ormandy 10.07 1997 Omnibus Stock Plan 10.08(a) Accounts Financing Agreement dated June 16, 1992 10.08(b) Covenant Supplement to Accounts Financing Agreement dated June 16, 1992 10.08(c) Inventory and Equipment Security Agreement Supplement to Accounts Financing Agreement dated June 16, 1992 10.08(d) Trade Financing Agreement Supplement to Accounts Financing Agreement (Security Agreement) dated June 16, 1992

II-2

EXHIBIT NO DESCRIPTION ----------- -----------------------------------------------------------------------------------------------10.08(e) Amendment to Financing Agreements dated October 30, 1992 10.08(f) Second Amendment to Financing Agreements dated January 4, 1993 10.08(g) Third Amendment to Financing Agreements dated March 10, 1993 10.08(h) Fourth Amendment to Financing Agreements dated May 1, 1993 10.08(i) Fifth Amendment to Financing Agreements dated January 1, 1994 10.08(j) Sixth Amendment to Financing Agreements dated September 1, 1993 10.08(k) Seventh Amendment to Financing Agreements dated August , 1994 10.08(l) Eighth Amendment to Financing Agreements dated December 31, 1994 10.08(m) Ninth Amendment to Financing Agreements dated April , 1995 10.08(n) Tenth Amendment to Financing Agreements dated June 23, 1995 10.08(o) Eleventh Amendment to Financing Agreements dated January 1, 1996 10.08(p) Twelfth Amendment to Financing Agreements dated June 25, 1996 10.08(q) Thirteenth Amendment to Financing Agreements dated August , 1996 10.08(r) Term Promissory Note dated June , 1996 10.08(s) Trademark Collateral Assignment and Security Agreement dated June 16, 1992 10.09 Form of Indemnification Agreement **10.10 BOSS Master License Agreement dated September 30, 1997 **+10.11 BOSS Manufacturing Rights Agreement dated September 30, 1997 **10.12 Beverly Hills Polo Club Exclusive Domestic License Agreement dated December 14, 1995 **10.13 Beverly Hills Polo Club Amendment to Exclusive License Agreement (Men's) dated June 3, 1997 **10.14 Beverly Hills Polo Club Exclusive Domestic License Agreement dated June 1, 1993 **10.15 Beverly Hills Polo Club Assignment of Licenses (Women's) dated August 31, 1993 **10.16 Beverly Hills Polo Club Amendment (Women's) dated September 1, 1993 **10.17 Beverly Hills Polo Club Amendment to Exclusive License Agreement (Women's) dated June 3, 1997 *10.18 Amendment to License Agreement 10.19 Beverly Hills Polo Club Amendment to Exclusive License Agreement (Men's) dated July 29, 1997 **10.20 Beverly Hills Polo Club International Exclusive License Agreement (Wholesale) dated August 15, 1996 **10.21 Beverly Hills Polo Club Amendment to Exclusive License Agreement (Wholesale) dated June 3, 1997 **10.22 Beverly Hills Polo Club International Exclusive License Agreement (Retail) dated August 15, 1996 10.23 Beverly Hills Polo Club Amendment to Exclusive License Agreement (Retail) dated June 3, 1997 10.24 Beverly Hills Polo Club Amendment to Exclusive License Agreement dated July 29, 1997 21.01 List of Subsidiaries 23.01 Consent of BDO Seidman, LLP 23.02 Consent of Piper & Marbury L.L.P. (included in Exhibit 5.01) 24.01 Power of Attorney (included on signature pages hereto)

* To be filed by amendment. ** Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission. + Certain portions of this exhibit have not yet been finalized and will be filed by amendment. (B) FINANCIAL STATEMENT SCHEDULES:
SCHEDULE NUMBER --------II DESCRIPTION ----------------------------------------------------------------------------Valuation and Qualifying Accounts PAGE NO. ------------S-2

II-3

ITEM 17. UNDERTAKINGS. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act") may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in this Registration Statement or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling persons of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement (filed herewith as Exhibit 1.01) certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser. The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-4

SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Baltimore, Maryland on this 3rd day of October, 1997. I.C. ISAACS & COMPANY, INC.
By: /s/ ROBERT J. ARNOT ----------------------------------------Robert J. Arnot Chairman of the Board and Co-Chief Executive Officer

Know all men by these presents, that each person whose signature appears below constitutes and appoints Robert J. Arnot, Gerald W. Lear and Eugene C. Wielepski (with full power to each of them to act alone) as his true and lawful attorney-in-fact and agent, with full power of substitution, for him and in his name, place and stead in any and all capacities to sign any or all amendments or post-effective amendments to this Registration Statement, including amendments made pursuant to Rule 462 under the Securities Act of 1933, as amended, and to file the same with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, to sign any and all applications, registration statements, notices or other document necessary or advisable to comply with the applicable state securities laws, and to file the same, together with all other documents in connection therewith, with the appropriate state securities authorities, granting unto said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, thereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
SIGNATURE -----------------------------/s/ ROBERT J. ARNOT -----------------------------Robert J. Arnot /s/ GERALD W. LEAR -----------------------------Gerald W. Lear TITLE -------------------------Chairman of the Board and Co-Chief Executive Officer and Director (Principal Executive Officer) President and Co-Chief Executive Officer and Director (Principal Executive Officer) II-5 DATE ------------------October 3, 1997

October 3, 1997

SIGNATURE -----------------------------/s/ EUGENE C. WIELEPSKI -----------------------------Eugene C. Wielepski

TITLE -------------------------Vice President and Chief Financial Officer and Director (Principal Financial and Accounting Officer) Director

DATE ------------------October 3, 1997

/s/ GARY B. BRASHERS -----------------------------Gary B. Brashers /s/ IRA J. HECHLER -----------------------------Ira J. Hechler /s/ JON HECHLER -----------------------------Jon Hechler /s/ RONALD S. SCHMIDT -----------------------------Ronald S. Schmidt

October 3, 1997

Director

October 3, 1997

Director

October 3, 1997

Director

October 3, 1997

II-6

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE I.C. Isaacs & Company, Inc. The audits referred to in our report to I.C. Isaacs & Company, Inc., dated March 31, 1997, except for Note 9 the dates of which are May 15, 1997 and September 24, 1997, and Note 5 the date of which is September 30, 1997, which is contained in the Prospectus constituting part of this Registration Statement, included the audit of the financial statement schedule listed in the accompanying index for each of the three years in the period ended December 31, 1996. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statement schedule based upon our audits. In our opinion, such schedule presents fairly, in all material respects, the information set forth therein.
/s/ BDO Seidman, LLP Washington, D.C. March 31, 1997

S-1

SCHEDULE II I.C. ISAACS & COMPANY, INC. VALUATION AND QUALIFYING ACCOUNTS (IN THOUSANDS)
BALANCE AT BEGINNING OF YEAR ------------$ $ $ $ $ $ 500 382 350 445 350 487 CHARGED TO COSTS AND EXPENSES ----------$ $ $ $ $ $ 278 5,546 398 5,104 1,194 5,956 BALANCE AT END OF YEAR ------------$ $ $ $ $ $ 350 445 350 487 660 725

DESCRIPTION -------------------------------------------------------------------Year ended December 31, 1994 Allowance for doubtful accounts................................... Reserve for sales returns and discounts........................... Year ended December 31, 1995 Allowance for doubtful accounts................................... Reserve for sales returns and discounts........................... Year ended December 31, 1996 Allowance for doubtful accounts................................... Reserve for sales returns and discounts...........................

DEDUCTION ----------$ $ $ $ $ $ (428) (5,483) (398) (5,062) (884) (5,718)

S-2

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION I.G. DESIGN, INC. I.G. Design, Inc., a Delaware corporation having its principal Delaware office in Wilmington, Delaware (the "Corporation") hereby certifies to the Secretary of State of the State of Delaware that: FIRST: The name of the Corporation is I.G. Design, Inc. The Corporation, was originally incorporated under the name Isbuyco, Inc., and the original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on August 2, 1984. An Amended and Restated Certificate of Incorporation was filed on April 16, 1987. SECOND: This Amended and Restated Certificate of Incorporation (the "Certificate") was duly adopted and declared advisable by unanimous written consent of the Board of Directors in accordance with the applicable provisions of Sections 242 and 141 of the General Corporation Law of the State of Delaware. THIRD: The stockholders of the Corporation duly adopted this Certificate in a Special Meeting of the stockholders in accordance with the applicable provisions of Sections 211, 242 and 245 of the General Corporation Law of the State of Delaware. FOURTH: The Certificate of Incorporation of the Corporation is amended and restated in its entirety to read as follows: AMENDED AND RESTATED CERTIFICATE OF INCORPORATION I.C. ISAACS & COMPANY, INC.
Inc. FIRST. SECOND. Name. The name of the Corporation is I.C. Isaacs & Company, The address of the registered

Registered Office and Agent.

office of the Corporation in the State of Delaware is 1013 Centre Road, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is Corporation Service Company. THIRD. Purpose. The purposes for which the Corporation is formed are to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware, as amended from time to time, (the "DGCL") and to possess and exercise all of the powers and privileges granted by such law and other laws of Delaware. FOURTH. Capital Stock. The total number of shares of capital stock of all classes that the Corporation shall have authority to issue is 55,000,000 shares. The authorized capital stock is divided into 50,000,000 shares of common stock, with the par value of $.0001 each (the "Common Stock") and 5,000,000 shares of preferred stock, with the par value of $.0001 each (the "Preferred Stock"). Stockholders shall not have preemptive rights to acquire additional shares of stock of any class which the Corporation may elect to issue or sell. -1-

(b) Common Stock. Subject to all of the rights of the holders of Preferred Stock provided for by resolution or resolutions of the Board of Directors pursuant to this Article FOURTH or provided for by the DGCL, each holder of Common Stock shall have one vote per share of Common Stock held by such holder on all matters on which holders of Common Stock are entitled to vote and shall have the right to receive notice of and to vote at all meetings of the stockholders of the Corporation. The holders of Common Stock shall have the right to receive dividends as and if declared by the Board of Directors in its sole discretion, subject to any limitations on the declaring of dividends imposed by the DGCL or the rights of holders of Preferred Stock provided for by resolutions or resolutions of the Board of Directors pursuant to this Article FOURTH. (c) Preferred Stock. Authority is hereby expressly granted to the Board of Directors of the Corporation, subject to the provisions of this Article FOURTH and to the limitations prescribed by the DGCL, to authorize the issuance of one or more classes of Preferred Stock and, with respect to each such class, to fix by resolution or resolutions providing for the issue of such class, the voting powers, full or limited, if any, of the shares of such class, the designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof. The authority of the Board of Directors with respect to each class thereof shall include, but not be limited to, the determination or fixing of the following: (i) the designation of such class; (ii) the number of shares to compose such class, which number the Board of Directors may thereafter (except where otherwise provided in a resolution designating a particular class) increase (but not above the total number of authorized shares of the class) or decrease (but not below the number of shares thereof then outstanding); (iii) the dividend rate of such class, the conditions and dates upon which such dividends shall be payable, the relation which such dividends shall bear to the dividends payable on any other class or classes of capital stock of the Corporation and whether such dividends shall be cumulative or noncumulative; (iv) whether the shares of such class shall be subject to redemption by the Corporation and, if made subject to such redemption, the times, prices and other terms and conditions of such redemption; (v) the terms and amount of any sinking fund provided for the purchase or redemption of the shares of such class; (vi) whether the shares of such class shall be convertible into or exchangeable for shares of any other class or classes of any capital stock or any other securities of the Corporation, and, if provision is made for conversion or exchange, the times, prices, rates, adjustments and other terms and conditions of such conversion or exchange; (vii) the extent, if any, to which the holders of shares of such class shall be entitled to vote with respect to the election of directors or otherwise; -2-

(viii) the restrictions, if any, on the issuance or reissuance of any additional Preferred Stock; (ix) the rights of the holders of the shares of such class upon the dissolution of, voluntary or involuntary liquidation, winding up or the distribution of assets of the Corporation; and (x) the manner in which any facts ascertainable outside the resolution or resolutions providing for the issue of such class shall operate upon the voting powers, designations, preferences, rights and qualifications, limitations or restrictions of such class. (d) Subject to all of the rights of the holders of Preferred Stock provided for by resolution or resolutions of the Board of Directors pursuant to this Article FOURTH or by the DGCL, the Board of Directors is hereby authorized to create and to authorize and direct the issuance (on either a pro rata or a non-pro rata basis) by the Corporation of rights, options and warrants for the purchase of shares of capital stock of the Corporation, other securities of the Corporation or shares or other securities of any successor in interest of the Corporation (a "Successor"), at such times, in such amounts, to such persons, for such consideration (if any), with such form and content (including without limitation the consideration for which any shares of capital stock of the Corporation, other securities of the Corporation or shares or other securities of any Successor are to be issued) and upon such terms and conditions as it may from time to time determine, subject only to the restrictions, limitations, conditions and requirements imposed by the DGCL, other applicable laws and this Certificate. FIFTH. Term. The Corporation is to have perpetual existence. SIXTH. Management of the Affairs of the Corporation. (a) The business and affairs of the Corporation shall be managed by its Board of Directors, which may exercise all the powers of the Corporation and do all such lawful acts and things that are not conferred upon or reserved to the stockholders by law, by this Certificate or by the Amended and Restated By-laws of the Corporation (the "By-laws"). (b) The following provisions are inserted for the limitation and regulation of the powers of the Corporation and of its directors and stockholders: (i) The Board of Directors shall have the power to make, alter, amend, change or repeal the By-laws by the affirmative vote of a majority of the members of the Board of Directors then in office. In addition, the By-laws may be made, altered, amended, changed or repealed by the stockholders of the Corporation upon the affirmative vote of the holders of at least 66-2/3% of the outstanding capital stock entitled to vote thereon. (ii) The number of directors of the Corporation shall be as from time to time fixed by, or in the manner provided in, the By-laws of the Corporation. The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The term of the initial Class I directors shall terminate on the date of the 1998 -3-

annual meeting of stockholders; the term of the initial Class II directors shall terminate on the date of the 1999 annual meeting of stockholders; and the term of the initial Class III directors shall terminate on the date of the 2000 annual meeting of stockholders. At each annual meeting of stockholders beginning in 1998, successors to the class of directors whose term expires at that annual meeting shall be elected for a three year term. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, but in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his term expires and until his successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. The term of a director elected to fill a newly created directorship or other vacancy shall expire at the same time as the terms of the other directors of the class for which the new directorship is created or in which the vacancy occurred. Any vacancy on the Board of Directors that results from an increase in the number of directors and any other vacancy occurring on the Board of Directors, howsoever resulting, may be filled by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director. Any director so elected by the Board of Directors to fill a vacancy shall hold office for a term that shall coincide with the term of the class to which such director shall have been elected. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorships shall be governed by the terms of this Certificate or the resolution or resolutions adopted by the Board of Directors pursuant to Article FOURTH applicable thereto, and such directors so elected shall not be divided into classes pursuant to this clause (b) of Article SIXTH unless expressly provided by such terms. (iii) Subject to the rights, if any, of the holders of shares of Preferred Stock then outstanding, any or all of the directors of the Corporation may be removed from office at any time by the stockholders of the Corporation, but only for cause and only by the affirmative vote of the holders of a majority of the outstanding shares of the Corporation then entitled to vote generally in the election of directors, considered for purposes of this paragraph as one class. (iv) The Corporation may in its By-laws confer powers upon the Board of Directors in addition to the foregoing and in addition to the powers and authorities expressly conferred upon the Board of Directors by applicable law. SEVENTH. Limitation on Liability. No director of the Corporation shall be personally liable to the Corporation or to any stockholder of the Corporation for monetary damages for breach of fiduciary duty as a director, provided that this provision shall not limit the liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involved intentional misconduct -4-

or a knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from which the director derived an improper personal benefit. If the DGCL or any other statute of the State of Delaware hereafter is amended to authorize the further elimination or limitation of the liability of directors of the Corporation, then the liability of a director of the Corporation shall be limited to the fullest extent permitted by the statutes of the State of Delaware, as so amended, and such elimination or limitation of liability shall be in addition to, and not in lieu of, the limitation on the liability of a director provided by the foregoing provisions of this Article SEVENTH. Any repeal of or amendment to this Article SEVENTH shall be prospective only and shall not adversely affect any limitation on the liability of a director of the Corporation existing at the time of such repeal or amendment. EIGHTH. Meetings of Stockholders. Meetings of stockholders may be held within or without the State of Delaware, as the By-laws may provide. NINTH. Corporate Records. The books of the Corporation may be kept (subject to any provision contained in applicable statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-laws. TENTH. Right to Amend. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate and in any certificate amendatory hereof, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders or others hereunder or thereunder are granted subject to this reservation. Notwithstanding the foregoing, the affirmative vote of the holders of at least 66-2/3% of the outstanding shares of Common Stock shall be required to amend or repeal, or adopt any provision inconsistent with, clause (b) of Article SIXTH or this Article TENTH of this Certificate. ELEVENTH. Indemnification. (a) The Corporation shall, to the fullest extent permitted by Section 145 of the DGCL, indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or on his behalf in connection with such action, suit or proceeding and any appeal therefrom. (b) Indemnification may include payment by the Corporation of expenses in defending an action or proceeding in advance of the final disposition of such action or proceeding upon receipt of an undertaking by the person indemnified to repay such payment if it is ultimately determined that such person is not entitled to indemnification under this Article ELEVENTH, -5-

which undertaking may be accepted without reference to the financial ability of such person to make such repayment. (c) The Corporation shall not indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person unless the initiation thereof was approved by the Board of Directors of the corporation. (d) The indemnification rights provided in this Article ELEVENTH (i) shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any law, agreement or vote of stockholders or disinterested directors or otherwise, and (ii) shall inure to the benefit of the heirs, executors and administrators of such persons. The Corporation may, to the extent authorized from time to time by its Board of Directors, grant indemnification rights to other employees or agents of the Corporation or other persons serving the Corporation and such rights may be equivalent to, or greater or less than, those set forth in this Article ELEVENTH. This Certificate shall be effective upon its filing with the Secretary of State of the State of Delaware. I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for the purpose of forming a Corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is my act and deed and the facts herein stated are true and, accordingly, have hereunto set my hand this 2nd day of August, 1984.
/s/ Wendy J. Saunders -------------------------Wendy J. Saunders -------------------------Sole Incorporator

IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be affixed hereto and this Certificate to be signed by its President and Co-Chief Executive Officer and attested to by its Secretary this ____ day of _____, 1997. I.G. DESIGN, INC.
By: /s/ GERALD W. LEAR ----------------------Gerald W. Lear, President and Co-Chief Executive Officer

Attested: /s/ EUGENE C. WIELEPSKI ----------------------Eugene C. Wielepski Secretary

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I.C. ISAACS & COMPANY, INC. AMENDED AND RESTATED BY-LAWS ARTICLE I OFFICES Section 1.1 REGISTERED OFFICE. The registered office shall be at the office of Corporation Service Company in the City of Wilmington, County of New Castle, State of Delaware, and the resident agent of the Corporation shall be Corporation Service Company. Section 1.2 OTHER OFFICES. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 2.1 TIME AND PLACE OF MEETINGS. All meetings of the stockholders shall be held at such time and place, within or without the State of Delaware, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2.2 ANNUAL MEETING. A meeting of stockholders shall be held in each year for the election of directors at such time and place as the Board of Directors shall determine. Any other proper business, notice of which was given in the notice of the meeting or in a duly executed waiver of notice thereof, may be transacted at the annual meeting. Elections of directors shall be by written ballot, unless otherwise provided in the Certificate of Incorporation. Section 2.3 NOTICE OF ANNUAL MEETINGS. Unless otherwise provided by law, written notice of the annual meeting of stockholders, stating the time, place and date thereof shall be given to each stockholder entitled to vote thereat not less than ten nor more than sixty days before the date of the meeting. Section 2.4 LIST OF STOCKHOLDERS. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every election of directors, a complete list of the stockholders entitled to vote at said election, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the election, either at a place within the city, town or village where the election is to be held and which place shall be specified in the notice of the meeting, or, if not specified, at the place where said meeting is to be held, and the list shall be produced and kept at the time and place of election during the whole time thereof, and subject to the inspection of any stockholder who may be present. -1-

Section 2.5 SPECIAL MEETINGS. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the Certificate of Incorporation, may be called by the Chairman of the Board, the Chief Executive Officer or the President. Business transacted at any special meeting of stockholders shall be limited to the purpose or purposes stated in the notice. Section 2.6 NOTICE OF SPECIAL MEETINGS. Unless otherwise provided by law, written notice of a special meeting of stockholders, stating the time, place, date and purpose or purposes thereof, shall be given to each stockholder entitled to vote thereat, not less than ten nor more than sixty days before the date fixed for the meeting. Section 2.7 QUORUM. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting except as provided in Section 4.2, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. Section 2.8 ORGANIZATION. The Chairman of the Board or, in the absence of the Chairman of the Board, the Chief Executive Officer or, in the absence of the Chief Executive Officer, the President or, in the absence of the President, any Executive Vice President, shall preside at meetings of the stockholders. The Secretary of the Corporation shall act as Secretary, but in the absence of the Secretary the presiding officer shall appoint a Secretary. Section 2.9 STOCKHOLDER NOMINATIONS AND PROPOSALS. (a) No proposal for a stockholder vote (a "Stockholder Proposal") shall be submitted to the stockholders of the Corporation unless the stockholder submitting such proposal (the "Proponent") shall have filed a written notice setting forth with particularity (i) the names and business addresses of the Proponent and all Persons (as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934, as amended, (the "Exchange Act")) acting in concert with the Proponent; (ii) the names and addresses of the Proponent and the Persons identified in clause (i), as they appear on the Corporation's books (if they so appear); (iii) the class and number of shares of the Corporation beneficially owned by the Proponent and the Persons identified in clause (i); (iv) a description of the Stockholder Proposal containing all information material thereto; (v) a description of all arrangements or understandings between the Proponent and any other Persons (including the names of such other Persons) in connection with the Stockholder Proposal and any material interest of the Proponent or such Persons in such Stockholder Proposal and (vi) such other information as the Board of Directors reasonably determines is necessary or appropriate to enable the Board of Directors and stockholders to consider the Stockholder Proposal. Upon receipt of the Stockholder Proposal and prior to the stockholders' meeting at which such -2-

Stockholder Proposal will be considered, if the Board of Directors or a designated committee or the officer who will preside at the meeting of the stockholders determines that the information provided in a Stockholder Proposal does not satisfy the requirements of this Section 2.9 or is otherwise not in accordance with applicable law, the Secretary of the Corporation shall promptly notify the Proponent of the deficiency in the notice. Such Proponent shall have the opportunity to cure the deficiency by providing additional information to the Secretary within the period of time, not to exceed five days from the date such deficiency notice is given to the Proponent, determined by the Board of Directors, such committee or such officer. If the deficiency is not cured within such period, or if the Board of Directors, such committee or such officer determines that the additional information provided by the Proponent, together with the information previously provided, does not satisfy the requirements of this Section 2.9 or is otherwise not in accordance with applicable law, then such Stockholder Proposal shall not be presented for action at the stockholders' meeting in question. (b) Only persons who are selected and recommended by the Board of Directors or the nominating committee thereof, or who are nominated by the stockholders in accordance with the procedures set forth in this Section 2.9, shall be eligible for election or qualified to serve as directors. Nominations of individuals for election to the Board of Directors at any annual meeting or special meeting of the stockholders at which directors are to be elected may be made by any stockholder of the Corporation entitled to vote for the election of directors at that meeting by compliance with the procedures set forth in this Section 2.9 except as may be otherwise provided in the Certificate of Incorporation with respect to the right of holders of Preferred Stock of the Corporation to nominate and elect a specified number of directors in certain circumstances. Nominations by stockholders shall be made by written notice (a "Nomination Notice"), which shall set forth (i) as to each individual nominated (A) the name, date of birth, business address and residence address of such nominee; (B) the business experience during the past five years of such nominee, including his or her principal occupations or employment during such period, the name and principal business of any Corporation or other organization in which such occupations and employment were carried on, and such other information as to the nature of his or her responsibilities and the level of professional competence as may be sufficient to permit assessment of his or her prior business experience; (C) whether the nominee is or has ever been at any time a director, officer or owner of 5% or more of any class of capital stock, partnership interests or other equity interest of any Corporation, partnership or other entity; (D) any directorships held by such nominee in any company with a class of securities registered pursuant to section 12 of the Exchange Act or subject to the requirements of section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940, as amended; (E) whether, in the last five years, such nominee has been convicted in a criminal proceeding or has been subject to a judgment, order, finding or decree of any federal, state or other governmental entity, concerning any violation of federal, state, or other law, or any proceeding in bankruptcy, which conviction, judgment, order, finding, decree or proceeding may be material to the evaluation of the ability or integrity of the nominee; and (F) any other information relating to the nominee that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of -3-

directors pursuant to section 14 of the Exchange Act, and the rules and regulations promulgated thereunder; and (ii) as to the person submitting the Nomination Notice and any Person acting in concert with such Person, (w) the name and business address of such person and Persons, (x) the name and business address of such person and Persons as they appear on the books of the Corporation (if they so appear); (y) the class and number of shares of the Corporation which are beneficially owned by such person and Persons, and (z) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to section 14 of the Exchange Act and the rules and regulations promulgated thereunder. A written consent to being named in a proxy statement as a nominee, and to serve as a director if elected, signed by the nominee, shall be filed with any Nomination Notice. If the presiding officer at any stockholders' meeting determines that a nomination was not made in accordance with the procedures prescribed by these By-laws, he shall so declare to the meeting and the defective nomination shall be disregarded. (c) Nomination Notices and Stockholder Proposals must be delivered to the Secretary at the principal executive office of the Corporation or mailed and received at the principal executive offices of the Corporation (a) in the case of any annual meeting, not less than 60 days nor more than 90 days prior to the anniversary date of the immediately preceding annual meeting of stockholders; provided, however, that (i) in the event that the annual meeting is called for a date that is not within 30 days before or after such anniversary date, or (ii) in the case of the annual meeting of stockholders held during the 1998 fiscal year of the Corporation, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs; and (b) in the case of a special meeting of stockholders called for the purpose of electing directors, not later than the close of business on the tenth day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs. Section 2.10 ACTION BY STOCKHOLDERS. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy shall decide any question brought before such meeting, unless the question is one upon which by express provision of these By-laws, applicable law, or of the Certificate of Incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 2.11 VOTING; PROXIES. Each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted on after three years from its date, unless the proxy provides for a longer period, and, except where the transfer books of the Corporation have been closed or a date has been fixed as a record date for the determination of its stockholders entitled to vote, no share of stock which has been transferred on -4-

the books of the Corporation within twenty days preceding an election of directors shall be voted on at such election of directors. Section 2.12 WRITTEN ACTION. Any action required to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. ARTICLE III BOARD OF DIRECTORS Section 3.1 NUMBER AND QUALIFICATIONS. The business and affairs of the Corporation shall be managed by or under the direction of its Board of Directors. Subject to the rights, if any, of holders of Preferred Stock of the Corporation, the number of, retirement age of, and other restrictions and qualifications for directors constituting the Board of Directors shall be as authorized from time to time exclusively by a majority vote of the members of the Board of Directors then in office, provided that no amendment to the By-laws decreasing the number of directors shall have the effect of shortening the term of any incumbent director and provided that the number of directors shall not be increased by fifty percent (50%) or more in any twelve-month period without the approval by at least 66 2/3% of the members of the Board of Directors then in office. Except as provided in Section 3.2 of this Article, directors shall be elected by a plurality of the votes cast at meetings of stockholders, and each director so elected shall hold office until his successor is elected and qualified or until his earlier death, removal or resignation. None of the directors need be stockholders of the Corporation. Section 3.2 VACANCIES AND NEW DIRECTORSHIPS. Vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy shall hold office for a term that shall coincide with the term of the class to which such director shall have been elected. Section 3.3 POWERS. The business of the Corporation shall be managed by its Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-laws directed or required to be exercised or done by the stockholders. MEETINGS OF THE BOARD OF DIRECTORS Section 3.4 PLACE OF MEETINGS. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Delaware. -5-

Section 3.5 NOTICE OF REGULAR MEETINGS. Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board. Section 3.6 NOTICE OF SPECIAL MEETINGS. Special meetings of the Board may be called by the Chairman of the Board, the Chief Executive Officer, the President or the Secretary on two days notice to each director, either personally or by mail, telephone or telegram; special meetings shall be called in like manner and on like notice on the written request of at least two directors. Section 3.7 QUORUM; VOTING. At all meetings of the Board, a majority of directors shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by applicable law, the Certificate of Incorporation or these By-laws. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 3.8 WRITTEN ACTION. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, without prior notice and without a vote, if all members of the Board or of such committee, as they case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. Section 3.9 COMMITTEES. The Board of Directors may, by resolution passed by a majority of the whole Board, designate such committees as the Board of Directors deems appropriate, each committee to consist of one or more of the directors of the Corporation. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to amending the Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution or amending the By-laws of the Corporation; unless the resolution expressly so provides, no such committee shall have the power or authority to declare a dividend, authorize the issuance of stock or adopt a certificate of ownership pursuant to Section 253 of the General Corporation Law of the State of Delaware. -6-

Unless otherwise ordered by the Board of Directors, a majority of the members of any committee appointed by the Board of Directors pursuant to this section shall constitute a quorum at any meeting thereof, and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of such committee. Any such committee shall prescribe its own rules for calling and holding meetings and its method of procedure, subject to any rules prescribed by the Board of Directors, and shall keep a written record of all action taken by it and report the same to the Board of Directors when required. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when requested by the Board of Directors. Section 3.11 COMPENSATION COMMITTEE. The Board of Directors shall by resolution passed by a majority of the whole Board, designate a Compensation Committee, to which the Board shall delegate the authority to fix the compensation of the directors. Section 3.12 AUDIT COMMITTEE. The Board of Directors shall, by resolution passed by a majority of the whole Board, designate an Audit Committee, which shall have duty to recommend to the Board of Directors the accounting firm to be selected by the Board, or to be recommended by it for stockholder approval, as independent auditor of the Corporation and to act on behalf of the Board in meeting and reviewing with the independent auditors, the chief internal auditor and the appropriate corporate officers, matters relating to corporate financial reporting and accounting procedures and policies, adequacy of financial, accounting and operating controls and the scope of the respective audits of the independent auditors and the internal auditor. The committee shall review the results of such audits with the respective auditing agency and shall promptly report to the Board of Directors. The committee shall additionally submit to the Board of Directors any recommendations it may have from time to time with respect to financial reporting and accounting practices and policies and financial, accounting, and operation controls and safeguards. Section 3.13 PARTICIPATION IN MEETING BY TELEPHONE. Members of the Board of Directors or any committee designated by such Board may participate in a meeting of the Board or of a committee of the Board by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at such meeting. ARTICLE IV NOTICES Section 4.1 GENERALLY. Notices to directors and stockholders shall be in writing and delivered personally or mailed to the directors or stockholders at their addresses appearing on the books of the Corporation. Notice by mail shall be deemed to be given at the time when the same shall be mailed. Notice to directors may also be given by telegram or telephone. -7-

Section 4.2 ADJOURNMENTS. Whenever a meeting of stockholders, annual or special, is adjourned to another date, time or place, notice need not be given of the adjourned meeting if the date, time and place thereof are announced at the meeting at which the adjournment is taken. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder entitled to vote thereat. At the adjourned meeting, any business may be transacted which might have been transacted at the original meeting. Section 4.3 WAIVER. Whenever any notice is required to be given under the provisions of the statutes or of the Certificate of Incorporation or by these By-laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular, or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice. ARTICLE V OFFICERS Section 5.1 GENERALLY. The officers of the Corporation shall be chosen by the Board of Directors and shall be a Chairman of the Board, Chief Executive Officer, President, a Chief Operating Officer, a Chief Financial Officer, a Secretary and a Treasurer. The Board of Directors may also choose one or more Vice-Presidents (which may include Senior Vice-Presidents and Executive Vice-Presidents), one or more Assistant Secretaries and Assistant Treasurers and such other officers or agents as the Board of Directors may from time to time deem necessary or advisable in the conduct of the business and affairs of the Corporation. Any number of offices may be held by the same person and any office may be shared by more than one person unless the Certificate of Incorporation or these By-laws otherwise provide. Section 5.2 COMPENSATION. The compensation of all officers and agents of the Corporation who are also directors of the Corporation shall be fixed by the Board of Directors. The Board of Directors may delegate the power to fix the compensation of all other officers and agents of the Corporation to an officer of the Corporation. Section 5.3 SUCCESSION. The officers of the Corporation shall hold office until their successors are chosen and qualified. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. Section 5.4 AUTHORITIES AND DUTIES. The officers of the Corporation shall have such authority and shall perform such duties as are customarily incident to their respective offices, or -8-

as may be specified from time to time by the directors regardless of whether such authority and duties are customarily incident to such office. ARTICLE VI CERTIFICATES OF STOCK Section 6.1 CERTIFICATES. Every owner of stock in the Corporation shall be entitled to have a certificate signed by, or in the name of the Corporation by, the Chairman or Vice-Chairman of the Board or Chief Executive Officer, or President or a Vice-President and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. Section 6.2 TRANSFER AGENTS; REGISTRARS. Where a certificate is signed (l) by a transfer agent or an assistant transfer agent or (2) by a transfer clerk acting on behalf of the Corporation and a registrar, the signature of any such Chairman or Vice-Chairman of the Board of Directors, Chief Executive Officer, President, Vice-President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary may be facsimile. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the Corporation, whether because of death, resignation or otherwise, before such certificate or certificates have been delivered by the Corporation, such certificate or certificates may nevertheless be adopted by the Corporation and be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the Corporation. Section 6.3 LOST, DESTROYED OR MUTILATED CERTIFICATES. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, destroyed, or mutilated upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, destroyed or mutilated. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, destroyed or mutilated certificate or certificates, or his legal representative, to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, destroyed or mutilated upon the issuance of such new certificate. Section 6.4 TRANSFERS OF STOCK. (a) Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transactions upon its books, unless the Corporation has a duty to inquire as to adverse claims with respect to such transfer and such duty has not been discharged. The Corporation shall have no duty to inquire into adverse claims with respect to such transfer unless (i) the Corporation has received a written notification of an adverse claim at a time and in a manner -9-

which affords the Corporation a reasonable opportunity to act on it prior to the issuance of a new, reissued or re-registered share certificate and the notification identifies the claimant, the registered owner and the issue of which the share or shares is a part and provides an address for communications directed to the claimant; or (ii) the Corporation has required and obtained, with respect to a fiduciary, a copy of a will, trust, indenture, articles of co-partnership, By-laws or other controlling instruments, for a purpose other than to obtain appropriate evidence of the appointment or incumbency of the fiduciary, and such documents indicate, upon reasonable inspection, the existence of an adverse claim. (b) The Corporation may discharge any duty of inquiry by any reasonable means, including notifying an adverse claimant by registered or certified mail at the address furnished by him or, if there be no such address, at his residence or regular place of business that the security has been presented for registration of transfer by a named person, and that the transfer will be registered unless within thirty days from the date of mailing the notification, either (i) an appropriate restraining order, injunction or other process issues from a court of competent jurisdiction; or (ii) an indemnity bond, sufficient in the Corporation's judgment to protect the Corporation and any transfer agent, registrar or other agent of the Corporation involved from any loss which it or they may suffer by complying with the adverse claim, is filed with the Corporation. Section 6.5 FIXING RECORD DATE. (a) In order that the Corporation may determine the stockholders entitled to notice or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. (b) If no record date is fixed: (1) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. (2) The record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed. (3) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. -10-

(c) A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Section 6.6 REGISTERED STOCKHOLDERS. Prior to due presentment for transfer of any share or shares, the Corporation shall treat the registered owner thereof as the person exclusively entitled to vote, to receive notifications and to all other benefits of ownership with respect to such share or shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by applicable law. ARTICLE VII GENERAL PROVISIONS Section 7.1 DIVIDENDS. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall think conducive to the interest of the Corporation, and the directors may modify or abolish any such reserve in the manner in which it was created. Section 7.3 ANNUAL STATEMENT. The Board of Directors shall present at each annual meeting, and at any special meeting of the stockholders when called for by vote of the stockholders, a full and clear statement of the business and condition of the Corporation. Section 7.4 CHECKS. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other persons as the Board of Directors may from time to time designate. Section 7.5 FISCAL YEAR. The fiscal year of the Corporation shall be the calendar year. Section 7.6 SEAL. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any manner reproduced. -11-

ARTICLE VIII AMENDMENTS Section 8.1 AMENDMENTS. These By-laws may be altered or repealed or new By-laws may be adopted, either by the Board of Directors or by the stockholders of the Corporation upon the affirmative vote of the holders of at least 66-2/3% of the outstanding capital stock entitled to vote thereon. ARTICLE IX INDEMNIFICATION Section 9.1 RIGHT OF INDEMNIFICATION. (a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. The Corporation shall be required to indemnify a person in connection with a proceeding (or part thereof) initiated by such person only if the proceeding (or part thereof) was authorized by the Board of Directors. (b) The Corporation shall indemnify any person who was or is a party, or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless, and only to the extent that, the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in -12-

view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. (c) o the extent that a director, officer, employee or agent of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to Sections 9.1(a) or 9.1(b), or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith. (d) Any indemnification under sections 9.1(a) or 9.1(b) (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in such section. Such determination shall be made: (i) By the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, even though less than a quorum, or (ii) If there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (iii) By the stockholders. Section 9.2 UNDERTAKINGS FOR ADVANCEMENT OF EXPENSES. Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized in this Article. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Section 9.3 CLAIMS. If a claim for indemnification or payment of expenses under this Article IX is not paid with 60 days after a written claim therefor is received by the Corporation, the claimant may recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting the claim. In any such action, the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law. Section 9.4 RELATIONSHIP TO OTHER RIGHTS. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office. -13-

Section 9.5 INSURANCE. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify him against such liability under the provisions of this Article. Section 9.6 CONTINUATION OF RIGHTS. The indemnification and advancement of expenses provided by or granted pursuant to, this Article IX shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of any such person. Section 9.7 AMENDMENTS. All rights to indemnification under this by-law shall be deemed to be a contract between the Corporation and each director, officer, employee or agent of the Corporation who serves or served in such capacity at any time while this by-law is in effect. No amendment or repeal of this bylaw or of any relevant provisions of the Delaware General Corporation Law or any other applicable laws shall adversely affect or deny to any director, officer, employee or agent of the Corporation any rights to indemnification which such person may have, or change or release any obligations of the Corporation, under this by-law with respect to any costs, charges, expenses (including attorneys' fees), judgments, fines and amounts paid in settlement which arise out of any action, suit or proceeding based in whole or in substantial part on any act or failure to act, actual or alleged, which takes place while or before this by-law is in effect. The provision of this section shall apply to any such action, suit or proceeding whenever commenced, including such action, suit or proceeding commenced after any amendment or repeal of this by-law. Section 9.8 SEVERABILITY. In the event that any of the provisions of this Article IX (including any provision within a single section, paragraph or sentence) is held by a court of competent jurisdiction to be invalid, void or otherwise enforceable, the remaining provisions are severable and shall remain enforceable to the full extent permitted by law. -14-

Exhibit 4.01 I. C. Isaacs & Company, Inc. CERTIFICATE No. * For * Shares Issued to * Dated * 19 * FROM WHOM TRANSFERRED * Dated 19 NO. ORIGINAL NO. ORIGINAL NO. OF SHARES CERTIFICATE SHARES TRANSFERRED Received CERTIFICATE NO. For Shares this day of 19 SPECIMEN INCORPORATED UNDER THE LAWS OF THE State of Delaware NUMBER SHARES ** I. C. ISAACS & COMPANY, INC. AUTHORIZED CAPITAL: 50,000,000 SHARES OF Common Stock THIS CERTIFIES that SPECIMEN is the registered holder of * * * Shares of Common Stock (Par Value $.0001) of I. C. Isaacs & Company, Inc. transferable only on the books of the Corporation by the holder hereof in person or by Attorney upon surrender of this Certificate properly endorsed. IN WITNESS WHEREOF, the said Corporation has caused this Certificate to be signed by its duly authorized officers and its Corporate Seal to be hereunto affixed this * day of * A.D. 19 *
/s/ Eugene C. Wielepski -----------------------------Secretary (SEAL) SHARES Par Value $.0001 EACH /s/ Gerald W. Lear -----------------------------President

For Value Received, hereby sell, assign and transfer unto Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said Shares on the books of the within named Corporation with full power of substitution in the premises. Dated 19 In presence of NOTICE. THE SIGNATURE OF THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERNATION OR ENLARGEMENT OR ANY CHANGE WHATEVER
CERTIFICATE FOR * SHARES Common Stock of I. C. Isaacs & Company, INc. ISSUED TO A FULL STATEMENT OR SUMMARY OF THE DESIGNATIONS AND ANY PREFERENCES, CONVERSION AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO DIVIDENDS, QUALIFICATIONS, AND TERMS AND CONDITIONS OF REDEMPTION OF THE STOCK OF EACH CLASS WHICH THE CORPORATION IS AUTHORIZED TO ISSUE AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO SET THE RELATIVE RIGHTS AND PREFERENCES OF ANY SERIES OF CAPITAL STOCK, WILL BE FURNISHED TO ANY SHAREHOLDER, WITHOUT CHARGE, UPON REQUEST TO THE SECRETARY OF THE CORPORATION AT THE CORPORATION'S PRINCIPAL OFFICE.

SPECIMEN DATED *

Exhibit 5.01 PIPER & MARBURY L.L.P. CHARLES CENTER SOUTH 36 SOUTH CHARLES STREET WASHINGTON
Baltimore, Maryland 21201-3018 410-539-2530 FAX: 410-539-0489 NEW YORK PHILADELPHIA EASTON

October 3, 1997 I.C. Isaacs & Company, Inc. 3840 Bank Street Baltimore, Maryland 21224-2522 Re: Registration Statement on Form S-1 Ladies and Gentlemen: We have acted as counsel to I.C. Isaacs & Company, Inc., a Delaware corporation (the "Company") in connection with the Company's Registration Statement on Form S-1 (the "Registration Statement") filed October 3, 1997 with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"). The Registration Statement relates to up to 4,370,000 shares (including 570,000 shares to cover over-allotments, if any) of the Company's Common Stock, par value $.0001 per share, all of which will be newly issued by the Company (the "Shares"). In this capacity, we have examined the Company's Amended and Restated Certificate of Incorporation and Amended and Restated By-Laws, the proceedings of the Board of Directors of the Company relating to the issuance of the Shares and such other documents, instruments and matters of law as we have deemed necessary to the rendering of this opinion. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity with originals of all documents submitted to us as copies. Based upon the foregoing, we are of the opinion and advise you that each of the Shares described in the Registration Statement has been duly authorized and, upon sale of such Shares as contemplated by the Registration Statement, will be validly issued, fully paid and nonassessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving our consent, we do not thereby admit that we are in the category of

PIPER & MARBURY L.L.P. I.C. Isaacs & Company, Inc. October 3, 1997 Page 2 persons whose consent is required under Section 7 of the Act or the Rules and Regulations of the Commission thereunder. Very truly yours, Piper & Marbury L.L.P.
/s/ Piper & Marbury L.L.P.

I.G. DESIGN, INC. AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT This AMENDED AND RESTATED SHAREHOLDERS' AGREEMENT (the "Restated Agreement") is entered into as of May 15, 1997, by and among the Principal Shareholders (as hereinafter defined), the shareholders listed on Schedule A hereto (the "Non-Principal Shareholders" and, together with the Principal Shareholders, the "Shareholders"), and I.G. Design, Inc., a Delaware corporation having its principal office and place of business at 3840 Bank Street, Baltimore, Maryland 21224-2522 (the "Corporation"). WHEREAS, the Shareholders are currently the owners of 16,195 shares, which presently constitutes all of the issued and outstanding shares of the Corporation's capital stock (the "Stock"), and WHEREAS, after the proposed offering of up to 3 million shares of common stock by the Corporation, the Shareholders will continue to own approximately 65% of the Corporation's issued and outstanding common stock (the "Common Stock"); WHEREAS, the Shareholders and the Corporation are parties to a Shareholders' Agreement dated as of December 20, 1984, as amended, (the "Shareholders' Agreement"), which governs, among other issues, the management and ownership of the shares of Common Stock owned by the Shareholders; and WHEREAS, the Shareholders and the Corporation desire to amend and restate the Shareholders' Agreement in its entirety. NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein, the parties hereto agree that the Shareholders' Agreement is hereby further amended and restated to read in its entirety as follows: 1. DEFINITIONS The following terms shall have the meanings set forth in this Section 1: A. Beneficial Owner. Beneficial Owner shall have the meaning set forth in Rule 13d-3 of the Securities Exchange Act of 1934, as amended. B. Change of Control. Change of Control shall mean (i) the sale of all or substantially all of the assets of the Company, (ii) the sale of more than fifty percent (50%) of the outstanding Common Stock in a non-public sale, (iii) the dissolution or liquidation of the Company, or (iv) any merger or consolidation of the Company, if immediately after any such transaction either (A) persons who were directors of the Company immediately prior to such transaction do not constitute at least a majority of the directors of the surviving entity, or

(B) persons who hold a majority of the voting stock of the surviving entity are not persons who held a majority of the Common Stock of the Company immediately prior to such transaction. C. Corporation First Refusal Period. Corporation First Refusal Period shall mean the period within which the Corporation may exercise its Right of First Refusal. With respect to Stock proposed for transfer by Principal Shareholders, the Corporation First Refusal Period shall be the ten (10) days following the last day of the Principal Shareholder First Refusal Period and, with respect to Stock proposed for transfer by Non-Principal Shareholders, the Corporation First Refusal Period shall be the five (5) days following the last day of the Non-Principal Shareholder First Refusal Period. D. Involuntary Transfer. Involuntary Transfer shall mean any transfer, proceeding or action by or in which a Shareholder shall be deprived or divested of any right, title or interest in or to any of the Stock, including, without limitation, any seizure under levy of attachment or execution, any transfer in connection with bankruptcy (whether pursuant to the filing of a voluntary or an involuntary petition under the United States Bankruptcy Code, as amended, or any modifications or revisions thereto) or other court proceeding to a debtor in possession, trustee in bankruptcy or receiver or other officer or agency, any transfer to a state or to a public officer or agency pursuant to any statute pertaining to escheat or abandoned property, any transfer pursuant to a divorce or separation agreement or a final decree of a court in a divorce action, and any transfer by operation of a will or the laws of intestacy. E. Market Value. Market Value shall have the following meaning: (i) In the event that, as of the date of the Transfer Notice, the Corporation is a Reporting Company, the Market Value of the Stock for any purpose shall mean the last reported sale price per share of Stock, on the date of the Transfer Notice or, in case no such sale takes place on such date, the average of the closing bid and asked prices in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on a national securities exchange or included for quotation on the Nasdaq-National Market, or if the Stock is not so listed or admitted to trading or included for quotation, the last quoted price, or if the Stock is not so quoted, the average of the high bid and low asked prices, in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no longer in use, the principal other automated quotations system that may then be in use or, if the Stock is not quoted by any such organization, the average of the closing bid and asked prices, as furnished by a professional market maker making a market in the Stock as selected in good faith by the Board or by such other source or sources as shall be selected in good faith by the Board. If, as the case may be, the relevant date is not a trading day, the determination shall be made as of the next preceding trading day. As used herein, the term "trading day" shall mean a day on which public trading of securities occurs and is reported in the principal consolidated reporting system referred to above, or if the Stock is not listed or admitted to trading on a national securities exchange or included for quotation on the Nasdaq-National Market, any business day. -2-

(ii) If, as of the date of the Transfer Notice, the Corporation is not a Reporting Company, the Market Value shall be the appraised market value as of the date of the Transfer Notice, as determined by an independent appraiser of recognized standing selected by the Corporation. F. Non-Elected Shares. Non-Elected Shares shall mean Stock which has not been, or will not be, purchased pursuant to a Right of First Refusal. G. Principal Shareholders. Principal Shareholders means the individuals in the group comprising Robert J. Arnot ("Arnot"), Gerald W. Lear ("Lear"), and Ira J. Hechler and Jon Hechler (collectively, the "Hechler Group"), or, in each case, each Principal Shareholders' Permitted Transferees (as hereinafter defined). H. Principal Shareholder Action. Principal Shareholder Action shall mean the approval of any two of (i) Arnot, (ii) Lear and (iii) the Hechler Group (a "Majority"). I. Principal Shareholder First Refusal Period. The Principal Shareholder First Refusal Period shall mean the period within which Principal Shareholders may exercise their Right of First Refusal. With respect to Stock proposed for transfer by Principal Shareholders, the Principal Shareholder First Refusal Period shall be fifteen (15) days, and with respect to Stock proposed for transfer by Non-Principal Shareholders, the Principal Shareholder First Refusal Period shall be ten (10) days. J. Reporting Company. Reporting Company shall mean a company the common stock of which is registered under Section 12 of the Securities Exchange Act of 1934, as amended. 2. VOTING AGREEMENT Upon consummation of the Offering, the Board of Directors shall be classified into three classes of directors serving three-year, staggered terms as further specified in the By-laws of the Corporation adopted May 15, 1997. Each of the Shareholders agrees that, in elections to fill Class I or Class II of the Board of Directors of the Corporation, such Shareholder will vote (or cause the voting of) all Stock then owned by such Shareholder (or any such Stock which such Shareholder has the right to vote pursuant to any agreement or proxy), in favor of nominees specified in writing by Principal Shareholder Action. 3. LEGENDS ON CERTIFICATES The certificates evidencing the Stock held by the Shareholders shall bear any legends required by federal or state securities law and the following legend required by Section 202 (a) of the Delaware General Corporation Law (the "DGCL"): -3-

"The shares represented by this Certificate may not be assigned, sold, transferred, hypothecated, or otherwise disposed of, except in accordance with the Amended and Restated Shareholders' Agreement dated as of May 15, 1997, which is on file at the office of the issuer." 4. RESTRICTIONS ON DISPOSITION A. Limitations on Transfers. Subject to Subsection F. of this Section 4, no Shareholder shall voluntarily transfer, sell, assign, pledge, encumber, grant any option with respect to, or otherwise create any legal or equitable interest in any Stock owned by such Shareholder except pursuant to a sale of all or any part of such Stock made in accordance with Subsection B. or C. below. B. Stock Held by Principal Shareholders. (i) Except as otherwise provided in Subsection F. below, before any Stock may be voluntarily sold or transferred by a Principal Shareholder, including any contemplated sale of shares on a national securities exchange, the Principal Shareholder seeking to transfer such Stock (the "Transferring Principal Shareholder") shall first provide written notice of the proposed sale or transfer to the other Principal Shareholders and the Corporation, which notice shall include the number of shares of Stock proposed for transfer (the "Offered Shares"), the price per share of Stock, (the "Offer Price"), the name of the proposed transferee or, if the shares are proposed to be transferred on the stock market, the name of the proposed broker (the "Proposed Transferee"), a representation that the agreement to sell or transfer constitutes a bona-fide offer to purchase and all other terms and conditions of the transfer (the "Transfer Notice"). (ii) The other Principal Shareholders shall then have the right to purchase the Offered Shares at the lesser of the Offer Price or Market Value. Such Right of First Refusal shall be exercisable upon written notice to the Transferring Principal Shareholder within the Principal Shareholder First Refusal Period, which notice shall specify the number of Offered Shares to be purchased by the Principal Shareholder. Each Principal Shareholder electing to exercise the Right of First Refusal (an "Electing Principal Shareholder") may purchase a number of Offered Shares equal to the total number of Offered Shares multiplied by a fraction, the numerator of which is equal to the number of shares of Stock held by such Principal Shareholder and the denominator of which is equal to the total number of shares of Stock owned by all Electing Principal Shareholders. Any Principal Shareholder who elects not to purchase the full number of Offered Shares to which such Principal Shareholder is entitled shall, within five (5) days prior to the expiration of the Principal Shareholder First Refusal Period, notify the other Principal Shareholders (other than the Transferring Principal Shareholder), each of whom shall then be entitled to purchase that number of Non-Elected Shares equal to the number of Non-Elected Shares multiplied by a fraction, the numerator of which is the number of shares of Stock held by such Principal Shareholder and the denominator of which is the aggregate number of shares of Stock held by all Electing Principal Shareholders who wish to purchase Non-Elected Shares. -4-

(iii) If, upon termination of the Principal Shareholder First Refusal Period, the Principal Shareholders have not exercised their Rights of First Refusal with respect to some or all of the Offered Shares, the Corporation shall have a Right of First Refusal with respect to some or all of such Non-Elected Shares, exercisable upon written notice to the Transferring Principal Shareholder within the Corporation First Refusal Period. (iv) If, upon termination of the Corporation First Refusal Period, the Principal Shareholders and the Corporation have not exercised their Right of First Refusal with respect to some or all of the Offered Shares, the Transferring Principal Shareholder may sell such Non-Elected Shares to the Proposed Transferee at any time within three months after the termination of the Corporation First Refusal Period without again complying with this Section 4. C. Stock Held By Non-Principal Shareholders. (i) Except as otherwise provided in Subsection F. below or unless this Subsection C. is waived by a Majority of the Principal Shareholders, before any Stock may be voluntarily sold or transferred by a Non-Principal Shareholder holding, at the time of such contemplated transfer, in excess of one half of one percent (.5%) of the outstanding Stock of the Corporation (a "Transferring Non-Principal Shareholder"), such Transferring Non-Principal Shareholder shall first provide a Transfer Notice to the Principal Shareholders and each of the Non-Principal Shareholders who holds in excess of one half of one percent (.5%) of the outstanding Stock of the Corporation (the "Eligible Non-Principal Shareholders") and to the Corporation. (ii) The Principal Shareholders shall then have a Right of First Refusal, exercisable upon written notice to the Transferring Non-Principal Shareholder within the Principal Shareholder First Refusal Period. Such notice shall specify the number of Offered Shares sought to be purchased by the Principal Shareholder. Each Electing Principal Shareholder may purchase a number of Offered Shares equal to the total number of Offered Shares multiplied by a fraction, the numerator of which is equal to the number of shares of Stock held by such Principal Shareholder and the denominator of which is equal to the total number of shares of Stock owned by all Electing Principal Shareholders. Any Principal Shareholder who elects not to purchase the full number of Offered Shares to which such Principal Shareholder is entitled shall, within five (5) days prior to the expiration of the Principal Shareholder First Refusal Period, notify the other Principal Shareholders, each of whom shall then be entitled to purchase that number of shares of Stock equal to the total number of Non-Elected Shares multiplied by a fraction, the numerator of which is the number of shares of Stock held by such Principal Shareholder and the denominator of which is the aggregate number of shares held by all Electing Principal Shareholders who wish to purchase Non-Elected Shares. (iii) If, upon expiration of the Principal Shareholder Notification Period, the Principal Shareholders have not exercised their Right of First Refusal with respect to some or all of the Offered Shares, the Eligible Non-Principal Shareholders shall have a Right of First Refusal with respect to such Non-Elected Shares, exercisable upon written notice to the Transferring Non-Principal Shareholder within five (5) days after the Principal Shareholder First Refusal -5-

Period (the "Non-Principal Shareholder First Refusal Period"). Such notice shall specify the number of Offered Shares sought to be purchased by the Eligible Non-Principal Shareholder. Each Eligible Non-Principal Shareholder electing to exercise the Right of First Refusal (an "Electing Non-Principal Shareholder") may purchase a number of Offered Shares equal to the total number of Offered Shares multiplied by a fraction, the numerator of which is equal to the number of shares of Stock held by such Eligible Non-Principal Shareholder and the denominator of which is equal to the total number of shares of Stock owned by all Electing Non-Principal Shareholders. (iv) If, upon termination of the Non-Principal Shareholder First Refusal Period, the Eligible Non-Principal Shareholders have not exercised their Right of First Refusal with respect to some or all of the Offered Shares, the Corporation shall have a Right of First Refusal with respect to such Non-Elected Shares, exercisable upon written notice to the Transferring Non-Principal Shareholder within the Corporation First Refusal Period. (v) If, upon termination of the Corporation First Refusal Period, the Principal Shareholders, the Eligible Non-Principal Shareholders and the Corporation have not exercised their Right of First Refusal with respect to some or all of the Offered Shares, the Transferring Non-Principal Shareholder may sell such Non-Elected Shares to the Proposed Transferee any time within three months after the Transfer Notice without again complying with this Section 4. D. Involuntary Transfers. Any Involuntary Transfer by a Shareholder (an "Involuntary Transferor") shall be subject to the Rights of First Refusal set forth in Section 4B. (in the case of an Involuntary Transfer of Stock owned by a Principal Shareholder) or Section 4C. (in the case of Stock owned by a Non-Principal Shareholder) as if the Involuntary Transfer had been a proposed voluntary transfer except that: (i) the provisions of Subsections 4B.(i) and 4C.(i) shall not apply, but the Involuntary Transferor or the Involuntary Transferor's estate shall notify the Shareholders and the Corporation as soon as practicable upon obtaining knowledge of the Involuntary Transfer; (ii) the Principal Shareholder First Refusal Period shall run from the date of receipt by the Corporation of the notice of Involuntary Transfer; (iii) such Right of First Refusal shall be exercised by notice to the Involuntary Transferee rather than to the Shareholders who suffered or will suffer the Involuntary Transfer; and (iv) The purchase price per Offered Share shall be Market Value. E. Settlement. If the Principal Shareholders, the Eligible Non-Principal Shareholders or the Corporation elect to exercise their Rights of First Refusal to acquire all or any portion of the Offered Shares, settlement shall be made as follows: -6-

(i) If, at the time of the Transfer Notice, the Corporation is a Reporting Company, within the Principal Shareholder First Refusal Period, the Non-Principal Shareholder First Refusal Period or Corporation First Refusal Period, as applicable; or (ii) If, at the time of the Transfer Notice, the Corporation is not a Reporting Company, within 30 days of the Transfer Notice. F. Permitted Transfers. Nothing in this Section shall prohibit the transfer (i) by a Shareholder during any three month period of Stock amounting, in the aggregate, to less than two percent (2%) of the Stock held by such Shareholder or (ii) by any Shareholder of all or any portion of such Shareholder's Stock (a) to the spouse or any one or more of the lineal descendants of such Shareholder; (b) to any trust, partnership or limited liability company established solely for estate and gift planning purposes and solely for the benefit of such Shareholder, his or her spouse and/or lineal descendants (transferees described under subparagraphs (a) and (b) shall be deemed "Permitted Transferees"); (c) to the Corporation; or (d) in connection with a registered offering of Stock as provided under Section 6 below. Any successor or transferee who receives Stock pursuant to an event described in clauses (a) or (b) above shall, as a condition of such transfer, enter into an agreement to be bound by the provisions of this Restated Agreement in its entirety and shall be deemed to be a "Shareholder" hereunder. 5. "DRAG-ALONG" RIGHTS If a Majority of the Principal Shareholders enter into a transaction with a third party for the sale or tender of Stock held by such Principal Shareholders (including, without limitation, a Change of Control transaction), the Right of First Refusal set forth in Section 4 above shall not apply and the Corporation and/or the Majority may require the other Shareholders to participate in such transaction on the same terms and conditions as the Principal Shareholders by giving such Shareholders written notice thereof at least 30 days in advance of the date of closing of the transaction. Upon receipt of such notice, each of the other Shareholders shall tender the same proportion of Stock owned by him or her as the members of the Majority propose to sell on the same terms and conditions applicable to the Stock of the members of the Majority in the transaction. 6. REGISTRATION RIGHTS To the extent that the Corporation grants registration rights to one or more of the Principal Shareholders (a "Participating Principal Shareholder") under a registration statement filed with the Securities and Exchange Commission (a "Registration Statement"), each of the other Shareholders shall have the right to sell a number of shares of Stock to be registered under the Registration Statement equal to the number of shares held by such Shareholder multiplied by a fraction, the numerator of which is equal to the number of shares of Stock held by Participating Principal Shareholders that are to be registered pursuant to the Registration Statement and the denominator of which is equal to the total number of shares of Stock held by the Participating Principal Shareholders. -7-

7. ARBITRATION OF DISPUTES Any dispute regarding any aspect of this Restated Agreement or any act which allegedly has or would violate any provision of this Restated Agreement will be submitted to binding arbitration. Such arbitration shall be conducted before an arbitrator sitting in Baltimore, Maryland or in such other location as may be agreed upon by the Corporation and the Shareholder, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the award of the arbitrator in any court having competent jurisdiction. 8. BENEFIT Except upon the occurrence of a termination event as provided in Section 16, this Restated Agreement shall be binding upon and shall operate for the benefit of the parties hereto, their respective successors and assigns. 9. INVALIDITY OF ANY PROVISION The invalidity or unenforceability of any provision of this Restated Agreement shall not affect the other provisions hereof, and the Restated Agreement shall be construed in all respects as if such invalid or unenforceable provisions were omitted, provided that the parties shall negotiate in good faith to replace the invalid provision with a valid provision reflecting the same balance of economic interests. 10. MODIFICATION OF AGREEMENT No modification, amendment or waiver of any of the provisions of this Restated Agreement shall be valid unless made in writing and signed by the Corporation and Shareholders owning, in the aggregate, a majority of the Stock subject to this Restated Agreement. 11. FURTHER ACTION A. The Corporation shall not register, and shall instruct any transfer agent for the Common Stock not to register, on the books of the Corporation any transfer, pledge or encumbrance of any Stock subject to this Agreement, unless such transfer, pledge or encumbrance complies with terms of this Agreement and the Shareholders agree to provide the Corporation (or any such transfer agent) with such documents, including an opinion of counsel as to compliance with the terms of this Restated Agreement, as the Corporation (or any such transfer agent) may reasonably request. B. A copy of this Restated Agreement shall be made a part of the minutes of the Corporation. -8-

12. ATTORNEY'S FEES AND COSTS If any action at law or in equity (including any arbitration proceeding under Section 7 above) is necessary to enforce or interpret the terms of this Restated Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs, and necessary disbursements, in addition to any other relief to which he may be entitled. 13. APPLICABLE LAW This Restated Agreement shall be construed in accordance with the laws of the State of Delaware. 14. ENTIRE AGREEMENT This Restated Agreement supersedes all agreements as to the subject matter hereof among the Shareholders and the Corporation including in each case amendments thereto, previously executed by the Shareholders and the Corporation. This Restated Agreement sets forth all of the provisions, covenants, agreements, conditions and undertakings between the parties hereto with respect to the subject matter hereof, and superseded all prior and contemporaneous agreements and understandings express or implied, oral or written as to the subject matter hereof. 15. NOTICES Unless otherwise specified herein, all notices, requests, demands and other communications to be given under this Restated Agreement shall be in writing and shall be deemed given if (i) delivered in person, or by United States mail, certified or registered, with return receipt requested, (ii) if sent by telex or facsimile transmission, with a copy mailed on the same day in the manner provided in (i) above, when transmitted and receipt is confirmed by telephone, or (iii) if otherwise actually delivered: TO THE CORPORATION: 3840 Bank Street, Baltimore, MD 21224-2522, with copies to each Director and each Shareholder as their names and addresses appear on the records of the Corporation; TO ANY SHAREHOLDER: As the name and address of such Shareholder appears on the records of the Corporation; or at such other address as may have been furnished by such person in writing to the other parties. Any such notice, demand or other communication shall be deemed to have been given on the date actually delivered or as of the date mailed, as the case may be. -9-

16. TERM OF AGREEMENT This Restated Agreement shall be effective (i) With respect to Section 4C., from the date of consummation of the Offering until the earlier to occur of (A) the fourth anniversary of the execution of this Restated Agreement or (B) the Principal Shareholders' ceasing to be the Beneficial Owners of more than 30% of the issued and outstanding Stock; provided that a Principal Shareholder shall be deemed to be the Beneficial Owner of Stock held by a family trust established by such Principal Shareholder. (ii) With respect to all other Sections of this Restated Agreement, from the date of consummation of the Offering until the earlier to occur of (A) the sixth anniversary of the execution of this Restated Agreement or (B) the Principal Shareholders' ceasing to be the Beneficial Owners of more than 30% of the issued and outstanding Stock; provided that a Principal Shareholder shall be deemed to be the Beneficial Owner of Stock held by a family trust established by such Principal Shareholder.
ATTEST: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ I.G. DESIGN, INC. By: ________________________________ Name: Title: _________________________________ Andrew Joe Adkinson _________________________________ Julian Adler

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WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ _________________________________ Charles Boutwell _________________________________ Gary Brashers _________________________________ Charles M. Chamblee _________________________________ Joe W. Chamblee _________________________________ Marion Felton _________________________________ Hillary Figinski-Spieker _________________________________ Robert Flynn, Jr. _________________________________ Charles Godfrey

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WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ -12 __________________________________ Madlyn Goldman __________________________________ David Hechler __________________________________ Richard Hechler __________________________________ Robin Hechler __________________________________ Steven Hechler __________________________________ Stanley Keller __________________________________ Joyce Kingsley

WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ __________________________________ Susan Mark __________________________________ William Myatt __________________________________ Thomas Ormandy __________________________________ Eugene C. Wielepski __________________________________ Robert J. Arnot

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WITNESS: ___________________________ WITNESS: ___________________________ WITNESS: ___________________________ __________________________________ Gerald W. Lear _________________________________ Ira J. Hechler __________________________________ Jon Hechler

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SCHEDULE A Andrew Joe Adkinson Julian Adler Charles Boutwell Gary Brashers Charles M. Chamblee Joe W. Chamblee Marion Felton Hillary Figinski-Spieker Robert Flynn, Jr. Charles Godfrey Madlyn Goldman David Hechler Richard Hechler Robin Hechler Steven Hechler Stanley Keller Joyce Kingsley Susan Mark William Myatt Thomas Ormandy Eugene C. Wielepski

EXECUTIVE EMPLOYMENT AGREEMENT THIS EXECUTIVE EMPLOYMENT AGREEMENT is made this 15th day of May 1997, by and between I. C. Isaacs & Company, L.P., a Delaware limited partnership (the "Company"), and Robert J. Arnot (the "Executive"). EXPLANATORY STATEMENT The Company desires to continue to employ the Executive as the Chairman of the Board and Co-Chief Executive Officer on the terms and conditions herein set forth, and the Executive has agreed to accept employment with the Company on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and the mutual promises made herein, the parties agree as follows: 1. Employment. The Company hereby employs the Executive as its Chairman of the Board and Co-Chief Executive Officer and agrees to continue the Executive in that position during the term of this Agreement. 2. Term. This Agreement shall begin May 15, 1997 and shall continue until May 15, 2000. (the "Employment Period") Thereafter, this Agreement shall renew automatically from Employment Year to Employment Year, subject to the right of either party to terminate this Agreement as of the end of any Employment Year upon sixty (60) days' prior written notice to the other party. An "Employment Year" begins each May 15, and ends on the following May 15. 3. Base Salary. The Executive's base salary for the first Employment Year under this Agreement (May 15, 1997 through May 15, 2000) shall be at the rate of Four Hundred Thousand Dollars ($400,000) per annum. Such base salary may be increased based on periodic reviews by the Compensation Committee of the Board of Directors. The Executive's base salary shall be paid throughout the year, in accordance with normal payroll practices of the Company. 4. Bonuses; Stock Plans. In addition to his base salary, during the term of this Agreement, the Executive shall be entitled to participate in any bonus and stock option plans, programs, arrangements and practices sponsored by the Company for the benefit of executive employees serving in similar capacities with the Company (and/or its affiliates), if any, as may be established from time to time by the Board of Directors of the Company for the benefit of such executive employees, in accordance with the terms of such plans, as amended by the Company from time to time; it being understood that there is no assurance with respect to the establishment of such plans or, if established, the continuation of such plans during the term of this Agreement. -1-

5. Other Benefits. During the term of this Agreement, the Executive shall also be entitled to participate in or receive benefits under all of the Company's benefit plans, programs, arrangements and practices, including pension, disability, and group life, sickness, accident or health insurance programs, if any, as may be established from time to time by the Board of Directors of the Company for the benefit of executive employees serving in similar capacities with the Company (and/or its affiliates), in accordance with the terms of such plans, as amended by the Company from time to time; it being understood that there is no assurance with respect to the establishment of such plans or, if established, the continuation of such plans during the term of this Agreement. 6. Duties. A. During the term of this Agreement, the Executive shall serve as the Chairman of the Board and Co-Chief Executive Officer, have such powers and shall perform such duties as are incident and customary to his office, including those described in the Company's By-Laws (as amended from time to time), and shall perform such other additional executive and administrative duties and functions commensurate with such position as from time to time shall be assigned to him by the Board of Directors of the Company. The Executive shall perform such additional duties and functions without separate compensation, unless otherwise authorized by the Board. B. The Executive shall devote his full time, attention, skill, and energy to the performance of his duties under this Agreement, and shall comply with all reasonable professional requests of the Company; provided, however, that the Executive will be permitted to engage in and manage personal investments and to participate in community and charitable affairs, so long as such activities do not interfere with his duties under this Agreement. 7. Vacation and Sick Leave. A. The Executive shall be entitled to a total of four (4) weeks of vacation each Employment Year, such vacation to be in accordance with the terms of the Company's announced policy for executive employees, as in effect from time to time. The Executive may take his vacation at such time or times as shall not interfere with the performance of his duties under this Agreement. B. The Executive shall be entitled to paid sick leave and holidays in accordance with the Company's announced policy for executive employees, as in effect from time to time. 8. Expenses. The Company shall reimburse the Executive for all reasonable expenses, including but not limited to expenses for first class service for international air travel, incurred in connection with his duties on behalf of the Company, provided that the Executive shall keep, and present to the Company, records and receipts relating to reimbursable expenses incurred by him. Such records and receipts shall be maintained and presented in a format, and -2-

with such regularity, as the Company reasonably may require in order to substantiate the Company's right to claim income tax deductions for such expenses. Without limiting the generality of the foregoing, the Executive shall be entitled to reimbursement for any business-related travel, business-related entertainment, whether at his residence or otherwise, and other costs and expenses reasonably incident to the performance of his duties on behalf of the Company. 9. Termination of Employment for Cause. Notwithstanding the provisions of Section 2 of this Agreement, the Executive's employment (and all of his rights and benefits under this Agreement) shall terminate immediately and without further notice upon the happening of any one or more of the following events: A. The Executive has been or is guilty of (i) a criminal offense involving moral turpitude, (ii) criminal or dishonest conduct pertaining to the business or affairs of the Company (including, without limitation, fraud and misappropriation), (iii) any act or omission the intended or likely consequence of which is material injury to the Company's business, property or reputation, which act or omission continues uncured for a period of ten (10) days after the Executive has received written notice from the Company, and/or (iv) gross negligence or willful misconduct which continues uncured for a period of ten (10) days after the Executive has received written notice from the Company; B. The Executive persists, for a period of ten (10) days after written notice from the Company, in a course of conduct reasonably determined by the Board of Directors of the Company to be in violation of his duties to the Company under this Agreement or otherwise in violation of the covenants, agreements or obligations under the terms of this Agreement; C. The Executive's death; or D. The continuous and uninterrupted inability to perform the Executive's duties on behalf of the Company, by reason of accident, mental or physical illness or impairment, or disease, for a period of one hundred and eighty (180) days from the first day of such inability to perform his duties. (Subsections A, B, C, & D of this Section 9 hereinafter referred to collectively and individually as "Cause"). In the event of a termination for Cause, the Company shall pay the Executive his base salary through the effective date of the employment termination, and the Executive shall immediately thereafter forfeit all rights and benefits (other than vested benefits), including but not limited to any right to compensation pursuant to Section 4 of this Agreement, he would otherwise have been entitled to receive under this Agreement. The Company and the Executive thereafter shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 10. Termination of Employment by the Company Without Cause. Notwithstanding the provisions of Section 2 of this Agreement, the Board of Directors may terminate the -3-

Executive's employment, as provided under this Agreement, at any time, for reasons other than for Cause by notifying the Executive in writing of such termination. If the Executive is terminated pursuant to this Section 10, (i) during the remainder of the Non-Competition Period (as hereinafter defined), the Company shall pay the Executive his base salary at the rate and in the manner required by Section 3 and in effect immediately prior to the date of termination and (ii) after the Employment Period, the Company and the Executive shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 11. Termination of Employment by the Executive. Notwithstanding the provisions of Section 2 of this Agreement, the Executive may terminate this Agreement at any time by giving the Board of Directors written notice of his intent to terminate, delivered at least sixty (60) days prior to the effective date of such termination. Upon expiration of the sixty (60) day notice period (or such earlier date as may be approved by the Board of Directors), the termination by the Executive shall become effective. Upon the effective date of such termination, the Company's obligations under Sections 3, 4 and 5 of this Agreement shall immediately expire, except to the extent that the benefits described in Section 5 have vested and continue after termination under the terms of the benefit plans and programs that generally apply to executive employees serving in similar capacities with the Company. 12. Non-Renewal. If, upon termination of the Employment Period, the Company shall decide not to renew this Agreement and the Company does not waive the provisions of Section 13 below, (i) during the remainder of the Non-Competition Period, the Company shall pay the Executive his base salary at the rate and in the manner required by Section 3 of this Agreement and in effect immediately prior to the date of termination and (ii) after the Employment Period, the Company and the Executive shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 13. Non-Competition. The Executive and the Company recognize that due to the nature of his employment, and his relationship with the Company, the Executive has had and will have access to, and has acquired and will acquire, and has assisted and will assist in developing, confidential and proprietary information relating to the business and operations of the Company (for purposes of this Section 13 and Section 14 below, the Company shall mean the Company, I. G. Design, Inc., or any of its/their affiliates or successors) including, without limitation, information with respect to their present and prospective services, systems, products, clients, customers, agents, and sales and marketing methods. The Executive acknowledges that such information has been and will be of central importance to the Company's business and that disclosure of it to others or its use by others could cause substantial loss to the Company. The Executive and the Company also recognize that an important part of the Executive's duties will be to develop good will for the Company through his personal contact with the Company's clients, and that there is a danger that this good will, a proprietary asset of the Company, may follow the Executive if and when his relationship with the Company is terminated. A. The Executive agrees that, during the term of his employment with the Company, and for a period of two (2) years after the termination of his employment for any reason whatsoever (including the non-renewal of this Agreement by either party): (i) The Executive will not directly or indirectly, within the United States, whether as a partner, proprietor, employee, consultant, agent or otherwise, participate or engage in any business that competes with, restricts, or -4-

interferes with the business of the Company, including, without limitation, any business in the young men's and women's contemporary sportswear industry. (ii) The Executive will not directly or indirectly (for his own account, or for the account of others) interfere with, solicit, or accept for himself, his benefit, or for anyone other than the Company, any of the clients or customers of the Company, at the time of said termination, or any potential clients or customers solicited or being solicited by the Company at the time of such termination or within the period two (2) years prior thereto, or perform any services of any competitive nature in connection with said clients or customers for anyone other than the Company. (iii) The Executive further agrees that he shall not, at any time, directly or indirectly, urge any client (or customer) or potential client (or potential customer) of the Company to discontinue business, in whole or in part, or not to do business, with the Company. (iv) The Executive further agrees that he shall not, at any time, directly or indirectly, solicit, hire or arrange to hire any person who at the time of such hire or within two (2) years prior to the time of such hire was an employee of the Company and was not involuntarily terminated by the Company, for himself or for any business entity with which he may be, or may be planning to be, affiliated or associated, or otherwise interfere with the retention of employees that the Company desires to retain as such. B. The Executive expressly acknowledges and agrees (i) that the restrictions set forth herein are reasonable, in terms of scope, duration, geographic area, and otherwise, (ii) that the protections afforded to the Company hereunder are necessary to protect its legitimate business interests, and (iii) that the agreement to observe such restrictions form a material part of the consideration for this Agreement and the Executive's employment by the Company. 14. Confidential Information. The Executive agrees that, during the term of his employment with the Company, and for a period of two (2) years after the termination of his employment for any reason whatsoever, he shall not disclose to any person or use the same in any way, other than in the discharge of his duties under this Agreement in connection with the business of the Company, any trade secrets or confidential or proprietary information of the Company, including, without limitation, any information or knowledge relating to (i) the business, operations or internal structure of the Company, (ii) the clients (or customers) or potential clients (or potential customers) of the Company, (iii) any method and/or procedure (such as records, programs, systems, correspondence, or other documents), relating or pertaining to projects developed by the Company or contemplated to be developed by the Company, or (iv) the Company's business, which information or knowledge the Executive shall have obtained -5-

during the term of this Agreement, and which is otherwise of a secret or confidential nature. Further, upon leaving the employ of the Company for any reason whatsoever, the Executive shall not take with him, without prior written consent of the Board of Directors of the Company, any documents, forms, or other reproductions of any data or any information relating to or pertaining to the Company, any clients (or customers) or potential clients (or potential customers) of the Company, or any other confidential information or trade secrets. 15. Entire Agreement; Amendments, Other Agreements. This Agreement contains the entire understanding of the Executive and the Company with respect to employment of the Executive and supersedes any and all prior understandings, written or oral. This Agreement may not be amended, waived, discharged or terminated orally, but only by an instrument in writing. Any earlier employment agreements between the Executive and the Company are hereby terminated and shall be of no further effect after the effective date hereof. 16. Miscellaneous. A. Any notices required by this Agreement shall (i) be made in writing and mailed by certified mail, return receipt requested, with adequate postage prepaid; (ii) be deemed given when so mailed; (iii) be deemed received by the addressee within ten (10) days after given or when the certified mail receipt for such mail is executed, whichever if earlier; and (iv) in the case of the Company, be mailed to its principal office, or in the case of the Executive, be mailed to the last address that the Executive has given to the Company. B. This Agreement shall be binding upon and inure to the benefit of, the parties, their successors, assigns, personal representatives, distributees, heirs, and legatees. C. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without giving effect to the principles of conflicts of law thereof. D. Any dispute regarding any aspect of this Agreement or any act which allegedly has or would violate any provision of this Agreement will be submitted to binding arbitration. Such arbitration shall be conducted before an arbitrator sitting in a location agreed to by the Company and the Executive within fifty (50) miles of the location of the Executive's principal place of employment, in accordance with the rules of the American Arbitration Association then in effect. Each party will be entitled to limited discovery, to consist of a maximum of three (3) depositions (maximum two (2) hours each), and twenty-five (25) written interrogatories per party, which will be completed within one hundred twenty (120) days following the selection of the arbitrator. Judgment may be entered on the award of the arbitrator in any court having competent jurisdiction. E. Any failure by the Company to insist upon strict compliance with any term or provision of this Agreement, to exercise any option, to enforce any right, or to seek any remedy upon any breach by the Executive shall not affect, or constitute a waiver of, the Company's right to insist upon such strict compliance, exercise such option, enforce such right, or seek such -6-

remedy with respect to such breach or any prior, contemporaneous, or subsequent breach. No custom or practice of the Company at variance with any provision of this Agreement shall affect or constitute a waiver of, the Company's right to demand strict compliance with all provisions of this Agreement. F. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed severable from the remainder of this Agreement, and the remaining provisions contained in this Agreement shall be construed to preserve to the maximum permissible extent the intent and purposes of this Agreement. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. G. In the event that the Executive violates the provisions of Sections 13 and 14 above, upon notice from the Company informing him of the nature of such violation, the Executive shall immediately terminate any actions which constitute such violation. The existence of this right shall not preclude any other rights and remedies at law or in equity which the Company may have. H. It is recognized that damages in the event of breach of any provision of Sections 13 and 14 above by the Executive would be difficult, if not impossible, to ascertain, and it is therefore agreed that the Company, in addition to and without limiting any other remedy or right it may have, will be entitled to a decree of specific performance, mandamus or other appropriate remedy to enforce performance of such requirements. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first hereinabove written. I.C. ISAACS & COMPANY, LP I. G. DESIGN, INC.
By: /s/ Gerald W. Lear ------------------Gerald W. Lear President

EXECUTIVE
/s/ Robert J. Arnot ------------------Robert J. Arnot

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EXECUTIVE EMPLOYMENT AGREEMENT THIS EXECUTIVE EMPLOYMENT AGREEMENT is made this 15th day of May 1997, by and between I. C. Isaacs & Company, L.P., a Delaware limited partnership (the "Company"), and Gerald W. Lear (the "Executive"). EXPLANATORY STATEMENT The Company desires to continue to employ the Executive as the President and Co-Chief Executive Officer on the terms and conditions herein set forth, and the Executive has agreed to accept employment with the Company on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and the mutual promises made herein, the parties agree as follows: 1. Employment. The Company hereby employs the Executive as its President and Co-Chief Executive Officer and agrees to continue the Executive in that position during the term of this Agreement. 2. Term. This Agreement shall begin May 15, 1997 and shall continue until May 15, 2000. (the "Employment Period") Thereafter, this Agreement shall renew automatically from Employment Year to Employment Year, subject to the right of either party to terminate this Agreement as of the end of any Employment Year upon sixty (60) days' prior written notice to the other party. An "Employment Year" begins each May 15 and ends on the following May 15. 3. Base Salary. The Executive's base salary for the first Employment Year under this Agreement (May 15, 1997 through May 15, 2000) shall be at the rate of Four Hundred Thousand Dollars ($400,000) per annum. Such base salary may be increased based on periodic reviews by the Compensation Committee of the Board of Directors. The Executive's base salary shall be paid throughout the year, in accordance with normal payroll practices of the Company. 4. Bonuses; Stock Plans. In addition to his base salary, during the term of this Agreement, the Executive shall be entitled to participate in any bonus and stock option plans, programs, arrangements and practices sponsored by the Company for the benefit of executive employees serving in similar capacities with the Company (and/or its affiliates), if any, as may be established from time to time by the Board of Directors of the Company for the benefit of such executive employees, in accordance with the terms of such plans, as amended by the Company from time to time; it being understood that there is no assurance with respect to the establishment of such plans or, if established, the continuation of such plans during the term of this Agreement. 1

5. Other Benefits. During the term of this Agreement, the Executive shall also be entitled to participate in or receive benefits under all of the Company's benefit plans, programs, arrangements and practices, including pension, disability, and group life, sickness, accident or health insurance programs, if any, as may be established from time to time by the Board of Directors of the Company for the benefit of executive employees serving in similar capacities with the Company (and/or its affiliates), in accordance with the terms of such plans, as amended by the Company from time to time; it being understood that there is no assurance with respect to the establishment of such plans or, if established, the continuation of such plans during the term of this Agreement. 6. Duties. A. During the term of this Agreement, the Executive shall serve as the President and Co-Chief Executive Officer, have such powers and shall perform such duties as are incident and customary to his office, including those described in the Company's By-Laws (as amended from time to time), and shall perform such other additional executive and administrative duties and functions commensurate with such position as from time to time shall be assigned to him by the Board of Directors of the Company. The Executive shall perform such additional duties and functions without separate compensation, unless otherwise authorized by the Board. B. The Executive shall devote his full time, attention, skill, and energy to the performance of his duties under this Agreement, and shall comply with all reasonable professional requests of the Company; provided, however, that the Executive will be permitted to engage in and manage personal investments and to participate in community and charitable affairs, so long as such activities do not interfere with his duties under this Agreement. 7. Vacation and Sick Leave. A. The Executive shall be entitled to a total of four (4) weeks of vacation each Employment Year, such vacation to be in accordance with the terms of the Company's announced policy for executive employees, as in effect from time to time. The Executive may take his vacation at such time or times as shall not interfere with the performance of his duties under this Agreement. B. The Executive shall be entitled to paid sick leave and holidays in accordance with the Company's announced policy for executive employees, as in effect from time to time. 8. Expenses. The Company shall reimburse the Executive for all reasonable expenses, including but not limited to expenses for first class service for international air travel, incurred in connection with his duties on behalf of the Company, provided that the Executive shall keep, and present to the Company, records and receipts relating to reimbursable expenses incurred by him. Such records and receipts shall be maintained and presented in a format, and with such regularity, as the Company reasonably may require in order to substantiate the 2

Company's right to claim income tax deductions for such expenses. Without limiting the generality of the foregoing, the Executive shall be entitled to reimbursement for any business-related travel, business-related entertainment, whether at his residence or otherwise, and other costs and expenses reasonably incident to the performance of his duties on behalf of the Company. 9. Termination of Employment for Cause. Notwithstanding the provisions of Section 2 of this Agreement, the Executive's employment (and all of his rights and benefits under this Agreement) shall terminate immediately and without further notice upon the happening of any one or more of the following events: A. The Executive has been or is guilty of (i) a criminal offense involving moral turpitude, (ii) criminal or dishonest conduct pertaining to the business or affairs of the Company (including, without limitation, fraud and misappropriation), (iii) any act or omission the intended or likely consequence of which is material injury to the Company's business, property or reputation, which act or omission continues uncured for a period of ten (10) days after the Executive has received written notice from the Company, and/or (iv) gross negligence or willful misconduct which continues uncured for a period of ten (10) days after the Executive has received written notice from the Company; B. The Executive persists, for a period of ten (10) days after written notice from the Company, in a course of conduct reasonably determined by the Board of Directors of the Company to be in violation of his duties to the Company under this Agreement or otherwise in violation of the covenants, agreements or obligations under the terms of this Agreement; C. The Executive's death; or D. The continuous and uninterrupted inability to perform the Executive's duties on behalf of the Company, by reason of accident, mental or physical illness or impairment, or disease, for a period of one hundred and eighty (180) days from the first day of such inability to perform his duties. (Subsections A, B, C, & D of this Section 9 hereinafter referred to collectively and individually as "Cause"). In the event of a termination for Cause, the Company shall pay the Executive his base salary through the effective date of the employment termination, and the Executive shall immediately thereafter forfeit all rights and benefits (other than vested benefits), including but not limited to any right to compensation pursuant to Section 4 of this Agreement, he would otherwise have been entitled to receive under this Agreement. The Company and the Executive thereafter shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 10. Termination of Employment by the Company Without Cause. Notwithstanding the provisions of Section 2 of this Agreement, the Board of Directors may terminate the Executive's employment, as provided under this Agreement, at any time, for reasons other than 3

for Cause by notifying the Executive in writing of such termination. If the Executive is terminated pursuant to this Section 10, (i) during the remainder of the Non-Competition Period (as hereinafter defined), the Company shall pay the Executive his base salary at the rate and in the manner required by Section 3 and in effect immediately prior to the date of termination and (ii) after the Employment Period, the Company and the Executive shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 11. Termination of Employment by the Executive. Notwithstanding the provisions of Section 2 of this Agreement, the Executive may terminate this Agreement at any time by giving the Board of Directors written notice of his intent to terminate, delivered at least sixty (60) days prior to the effective date of such termination. Upon expiration of the sixty (60) day notice period (or such earlier date as may be approved by the Board of Directors), the termination by the Executive shall become effective. Upon the effective date of such termination, the Company's obligations under Sections 3, 4 and 5 of this Agreement shall immediately expire, except to the extent that the benefits described in Section 5 have vested and continue after termination under the terms of the benefit plans and programs that generally apply to executive employees serving in similar capacities with the Company. 12. Non-Renewal. If, upon termination of the Employment Period, the Company shall decide not to renew this Agreement and the Company does not waive the provisions of Section 13 below, (i) during the remainder of the Non-Competition Period, the Company shall pay the Executive his base salary at the rate and in the manner required by Section 3 of this Agreement and in effect immediately prior to the date of termination and (ii) after the Employment Period, the Company and the Executive shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 13. Non-Competition. The Executive and the Company recognize that due to the nature of his employment, and his relationship with the Company, the Executive has had and will have access to, and has acquired and will acquire, and has assisted and will assist in developing, confidential and proprietary information relating to the business and operations of the Company (for purposes of this Section 13 and Section 14 below, the Company shall mean the Company, I. G. Design, Inc., or any of its/their affiliates or successors) including, without limitation, information with respect to their present and prospective services, systems, products, clients, customers, agents, and sales and marketing methods. The Executive acknowledges that such information has been and will be of central importance to the Company's business and that disclosure of it to others or its use by others could cause substantial loss to the Company. The Executive and the Company also recognize that an important part of the Executive's duties will be to develop good will for the Company through his personal contact with the Company's clients, and that there is a danger that this good will, a proprietary asset of the Company, may follow the Executive if and when his relationship with the Company is terminated. A. The Executive agrees that, during the term of his employment with the Company, and for a period of two (2) years after the termination of his employment for any reason whatsoever, including the non-renewal of this Agreement by either party (the "Non-Competition Period"): (i) The Executive will not directly or indirectly, within the United States, whether as a partner, proprietor, employee, consultant, agent or otherwise, participate or engage in any business that competes with, restricts, or interferes with the business of the Company, including, without limitation, any business in the young men's and women's contemporary sportswear industry. 4

(ii) The Executive will not directly or indirectly (for his own account, or for the account of others) interfere with, solicit, or accept for himself, his benefit, or for anyone other than the Company, any of the clients or customers of the Company, at the time of said termination, or any potential clients or customers solicited or being solicited by the Company at the time of such termination or within the period two (2) years prior thereto, or perform any services of any competitive nature in connection with said clients or customers for anyone other than the Company. (iii) The Executive further agrees that he shall not, at any time, directly or indirectly, urge any client (or customer) or potential client (or potential customer) of the Company to discontinue business, in whole or in part, or not to do business, with the Company. (iv) The Executive further agrees that he shall not, at any time, directly or indirectly, solicit, hire or arrange to hire any person who at the time of such hire or within two (2) years prior to the time of such hire was an employee of the Company and was not involuntarily terminated by the Company, for himself or for any business entity with which he may be, or may be planning to be, affiliated or associated, or otherwise interfere with the retention of employees that the Company desires to retain as such. B. The Executive expressly acknowledges and agrees (i) that the restrictions set forth herein are reasonable, in terms of scope, duration, geographic area, and otherwise, (ii) that the protections afforded to the Company hereunder are necessary to protect its legitimate business interests, and (iii) that the agreement to observe such restrictions form a material part of the consideration for this Agreement and the Executive's employment by the Company. 14. Confidential Information. The Executive agrees that, during the term of his employment with the Company, and for a period of two (2) years after the termination of his employment for any reason whatsoever, he shall not disclose to any person or use the same in any way, other than in the discharge of his duties under this Agreement in connection with the business of the Company, any trade secrets or confidential or proprietary information of the Company, including, without limitation, any information or knowledge relating to (i) the business, operations or internal structure of the Company, (ii) the clients (or customers) or potential clients (or potential customers) of the Company, (iii) any method and/or procedure (such as records, programs, systems, correspondence, or other documents), relating or pertaining to projects developed by the Company or contemplated to be developed by the Company, or (iv) the Company's business, which information or knowledge the Executive shall have obtained during the term of this Agreement, and which is otherwise of a secret or confidential nature. Further, upon leaving the employ of the Company for any reason whatsoever, the Executive shall 5

not take with him, without prior written consent of the Board of Directors of the Company, any documents, forms, or other reproductions of any data or any information relating to or pertaining to the Company, any clients (or customers) or potential clients (or potential customers) of the Company, or any other confidential information or trade secrets. 15. Entire Agreement; Amendments, Other Agreements. This Agreement contains the entire understanding of the Executive and the Company with respect to employment of the Executive and supersedes any and all prior understandings, written or oral. This Agreement may not be amended, waived, discharged or terminated orally, but only by an instrument in writing. Any earlier employment agreements between the Executive and the Company are hereby terminated and shall be of no further effect after the effective date hereof. 16. Miscellaneous. A. Any notices required by this Agreement shall (i) be made in writing and mailed by certified mail, return receipt requested, with adequate postage prepaid; (ii) be deemed given when so mailed; (iii) be deemed received by the addressee within ten (10) days after given or when the certified mail receipt for such mail is executed, whichever if earlier; and (iv) in the case of the Company, be mailed to its principal office, or in the case of the Executive, be mailed to the last address that the Executive has given to the Company. B. This Agreement shall be binding upon and inure to the benefit of, the parties, their successors, assigns, personal representatives, distributees, heirs, and legatees. C. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without giving effect to the principles of conflicts of law thereof. D. Any dispute regarding any aspect of this Agreement or any act which allegedly has or would violate any provision of this Agreement will be submitted to binding arbitration. Such arbitration shall be conducted before an arbitrator sitting in a location agreed to by the Company and the Executive within fifty (50) miles of the location of the Executive's principal place of employment, in accordance with the rules of the American Arbitration Association then in effect. Each party will be entitled to limited discovery, to consist of a maximum of three (3) depositions (maximum two (2) hours each), and twenty-five (25) written interrogatories per party, which will be completed within one hundred twenty (120) days following the selection of the arbitrator. Judgment may be entered on the award of the arbitrator in any court having competent jurisdiction. E. Any failure by the Company to insist upon strict compliance with any term or provision of this Agreement, to exercise any option, to enforce any right, or to seek any remedy upon any breach by the Executive shall not affect, or constitute a waiver of, the Company's right to insist upon such strict compliance, exercise such option, enforce such right, or seek such remedy with respect to such breach or any prior, contemporaneous, or subsequent breach. No custom or practice of the Company at variance with any provision of this Agreement shall affect 6

or constitute a waiver of, the Company's right to demand strict compliance with all provisions of this Agreement. F. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed severable from the remainder of this Agreement, and the remaining provisions contained in this Agreement shall be construed to preserve to the maximum permissible extent the intent and purposes of this Agreement. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. G. In the event that the Executive violates the provisions of Sections 13 and 14 above, upon notice from the Company informing him of the nature of such violation, the Executive shall immediately terminate any actions which constitute such violation. The existence of this right shall not preclude any other rights and remedies at law or in equity which the Company may have. H. It is recognized that damages in the event of breach of any provision of Sections 13 and 14 above by the Executive would be difficult, if not impossible, to ascertain, and it is therefore agreed that the Company, in addition to and without limiting any other remedy or right it may have, will be entitled to a decree of specific performance, mandamus or other appropriate remedy to enforce performance of such requirements. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first hereinabove written. I. C. ISAACS & COMPANY, L.P. I. G. DESIGN, INC.
By: /s/ Robert J. Arnot --------------------------------Robert J. Arnot Co-Chief Executive Officer

EXECUTIVE
/s/ Gerald W. Lear -----------------------------------Gerald W. Lear

7

EXECUTIVE EMPLOYMENT AGREEMENT THIS EXECUTIVE EMPLOYMENT AGREEMENT is made this 15th day of May 1997, by and between I. C. Isaacs & Company, L.P., a Delaware limited partnership (the "Company"), and Gary Brashers (the "Executive"). EXPLANATORY STATEMENT The Company desires to continue to employ the Executive as Vice President and Chief Operating Officer on the terms and conditions herein set forth, and the Executive has agreed to accept employment with the Company on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and the mutual promises made herein, the parties agree as follows: 1. Employment. The Company hereby employs the Executive as Vice President and Chief Operating Officer and agrees to continue the Executive in that position during the term of this Agreement. 2. Term. This Agreement shall begin May 15, 1997 and shall continue until May 15, 1999. (the "Employment Period") Thereafter, this Agreement shall renew automatically from Employment Year to Employment Year, subject to the right of either party to terminate this Agreement as of the end of any Employment Year upon sixty (60) days' prior written notice to the other party. An "Employment Year" begins each May 15 and ends on the following May 15. 3. Base Salary. The Executive's base salary for the first Employment Year under this Agreement (May 15, 1997 through May 15, 1999) shall be at the rate of Two Hundred Forty Thousand Dollars ($240,000) per annum. Such base salary may be increased based on periodic reviews by the Compensation Committee of the Board of Directors. The Executive's base salary shall be paid throughout the year, in accordance with normal payroll practices of the Company. 4. Bonuses; Stock Plans. In addition to his base salary, during the term of this Agreement, the Executive shall be entitled to participate in any bonus and stock option plans, programs, arrangements and practices sponsored by the Company for the benefit of executive employees serving in similar capacities with the Company (and/or its affiliates), if any, as may be established from time to time by the Board of Directors of the Company for the benefit of such executive employees, in accordance with the terms of such plans, as amended by the Company from time to time; it being understood that there is no assurance with respect to the establishment of such plans or, if established, the continuation of such plans during the term of this Agreement. -1-

5. Other Benefits. During the term of this Agreement, the Executive shall also be entitled to participate in or receive benefits under all of the Company's benefit plans, programs, arrangements and practices, including pension, disability, and group life, sickness, accident or health insurance programs, if any, as may be established from time to time by the Board of Directors of the Company for the benefit of executive employees serving in similar capacities with the Company (and/or its affiliates), in accordance with the terms of such plans, as amended by the Company from time to time; it being understood that there is no assurance with respect to the establishment of such plans or, if established, the continuation of such plans during the term of this Agreement. 6. Duties. A. During the term of this Agreement, the Executive shall serve as Vice President and Chief Operating Officer, have such powers and shall perform such duties as are incident and customary to his office, including those described in the Company's By-Laws (as amended from time to time), and shall perform such other additional executive and administrative duties and functions commensurate with such position as from time to time shall be assigned to him by the Board of Directors of the Company. The Executive shall perform such additional duties and functions without separate compensation, unless otherwise authorized by the Board. B. The Executive shall devote his full time, attention, skill, and energy to the performance of his duties under this Agreement, and shall comply with all reasonable professional requests of the Company; provided, however, that the Executive will be permitted to engage in and manage personal investments and to participate in community and charitable affairs, so long as such activities do not interfere with his duties under this Agreement. 7. Vacation and Sick Leave. A. The Executive shall be entitled to a total of four (4) weeks of vacation each Employment Year, such vacation to be in accordance with the terms of the Company's announced policy for executive employees, as in effect from time to time. The Executive may take his vacation at such time or times as shall not interfere with the performance of his duties under this Agreement. B. The Executive shall be entitled to paid sick leave and holidays in accordance with the Company's announced policy for executive employees, as in effect from time to time. 8. Expenses. The Company shall reimburse the Executive for all reasonable expenses incurred in connection with his duties on behalf of the Company, provided that the Executive shall keep, and present to the Company, records and receipts relating to reimbursable expenses incurred by him. Such records and receipts shall be maintained and presented in a format, and with such regularity, as the Company reasonably may require in order to substantiate -2-

the Company's right to claim income tax deductions for such expenses. Without limiting the generality of the foregoing, the Executive shall be entitled to reimbursement for any business-related travel, business-related entertainment, whether at his residence or otherwise, and other costs and expenses reasonably incident to the performance of his duties on behalf of the Company. 9. Termination of Employment for Cause. Notwithstanding the provisions of Section 2 of this Agreement, the Executive's employment (and all of his rights and benefits under this Agreement) shall terminate immediately and without further notice upon the happening of any one or more of the following events: A. The Executive has been or is guilty of (i) a criminal offense involving moral turpitude, (ii) criminal or dishonest conduct pertaining to the business or affairs of the Company (including, without limitation, fraud and misappropriation), (iii) any act or omission the intended or likely consequence of which is material injury to the Company's business, property or reputation, which act or omission continues uncured for a period of ten (10) days after the Executive has received written notice from the Company, and/or (iv) gross negligence or willful misconduct which continues uncured for a period of ten (10) days after the Executive has received written notice from the Company; B. The Executive persists, for a period of ten (10) days after written notice from the Company, in a course of conduct reasonably determined by the Board of Directors of the Company to be in violation of his duties to the Company under this Agreement or otherwise in violation of the covenants, agreements or obligations under the terms of this Agreement; C. The Executive's death; or D. The continuous and uninterrupted inability to perform the Executive's duties on behalf of the Company, by reason of accident, mental or physical illness or impairment, or disease, for a period of one hundred and eighty (180) days from the first day of such inability to perform his duties. (Subsections A, B, C, & D of this Section 9 hereinafter referred to collectively and individually as "Cause"). In the event of a termination for Cause, the Company shall pay the Executive his base salary through the effective date of the employment termination, and the Executive shall immediately thereafter forfeit all rights and benefits (other than vested benefits), including but not limited to any right to compensation pursuant to Section 4 of this Agreement, he would otherwise have been entitled to receive under this Agreement. The Company and the Executive thereafter shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 10. Termination of Employment by the Company Without Cause. Notwithstanding the provisions of Section 2 of this Agreement, the Board of Directors may terminate the Executive's employment, as provided under this Agreement, at any time, for reasons other than -3-

for Cause by notifying the Executive in writing of such termination. If the Executive is terminated pursuant to this Section 10, (i) during the remainder of the Non-Competition Period (as hereinafter defined), the Company shall pay the Executive his base salary at the rate and in the manner required by Section 3 and in effect immediately prior to the date of termination and (ii) after the Employment Period, the Company and the Executive shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 11. Termination of Employment by the Executive. Notwithstanding the provisions of Section 2 of this Agreement, the Executive may terminate this Agreement at any time by giving the Board of Directors written notice of his intent to terminate, delivered at least sixty (60) days prior to the effective date of such termination. Upon expiration of the sixty (60) day notice period (or such earlier date as may be approved by the Board of Directors), the termination by the Executive shall become effective. Upon the effective date of such termination, the Company's obligations under Sections 3, 4 and 5 of this Agreement shall immediately expire, except to the extent that the benefits described in Section 5 have vested and continue after termination under the terms of the benefit plans and programs that generally apply to executive employees serving in similar capacities with the Company. 12. Non-Renewal. If, upon termination of the Employment Period, the Company shall decide not to renew this Agreement and the Company does not waive the provisions of Section 13 below, (i) during the remainder of the Non-Competition Period, the Company shall pay the Executive his base salary at the rate and in the manner required by Section 3 of this Agreement and in effect immediately prior to the date of termination and (ii) after the Employment Period, the Company and the Executive shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 13. Non-Competition. The Executive and the Company recognize that due to the nature of his employment, and his relationship with the Company, the Executive has had and will have access to, and has acquired and will acquire, and has assisted and will assist in developing, confidential and proprietary information relating to the business and operations of the Company (for purposes of this Section 13 and Section 14 below, the Company shall mean the Company, I. G. Design, Inc., or any of its/their affiliates or successors) including, without limitation, information with respect to their present and prospective services, systems, products, clients, customers, agents, and sales and marketing methods. The Executive acknowledges that such information has been and will be of central importance to the Company's business and that disclosure of it to others or its use by others could cause substantial loss to the Company. The Executive and the Company also recognize that an important part of the Executive's duties will be to develop good will for the Company through his personal contact with the Company's clients, and that there is a danger that this good will, a proprietary asset of the Company, may follow the Executive if and when his relationship with the Company is terminated. A. The Executive agrees that, during the term of his employment with the Company, and for a period of one (1) year after the termination of his employment for any reason whatsoever (including the non-renewal of this Agreement by either party): (i) The Executive will not directly or indirectly, within the United States, whether as a partner, proprietor, employee, consultant, agent or otherwise, participate or engage in any business that competes with, restricts, or interferes with the business of the Company, including, without limitation, any business in the young men's and women's contemporary sportswear industry. -4-

(ii) The Executive will not directly or indirectly (for his own account, or for the account of others) interfere with, solicit, or accept for himself, his benefit, or for anyone other than the Company, any of the clients or customers of the Company, at the time of said termination, or any potential clients or customers solicited or being solicited by the Company at the time of such termination or within the period one (1) year prior thereto, or perform any services of any competitive nature in connection with said clients or customers for anyone other than the Company. (iii) The Executive further agrees that he shall not, at any time, directly or indirectly, urge any client (or customer) or potential client (or potential customer) of the Company to discontinue business, in whole or in part, or not to do business, with the Company. (iv) The Executive further agrees that he shall not, at any time, directly or indirectly, solicit, hire or arrange to hire any person who at the time of such hire or within one (1) year prior to the time of such hire was an employee of the Company and was not involuntarily terminated by the Company, for himself or for any business entity with which he may be, or may be planning to be, affiliated or associated, or otherwise interfere with the retention of employees that the Company desires to retain as such. B. The Executive expressly acknowledges and agrees (i) that the restrictions set forth herein are reasonable, in terms of scope, duration, geographic area, and otherwise, (ii) that the protections afforded to the Company hereunder are necessary to protect its legitimate business interests, and (iii) that the agreement to observe such restrictions form a material part of the consideration for this Agreement and the Executive's employment by the Company. 13. Confidential Information. The Executive agrees that, during the term of his employment with the Company, and for a period of one (1) year after the termination of his employment for any reason whatsoever, he shall not disclose to any person or use the same in any way, other than in the discharge of his duties under this Agreement in connection with the business of the Company, any trade secrets or confidential or proprietary information of the Company, including, without limitation, any information or knowledge relating to (i) the business, operations or internal structure of the Company, (ii) the clients (or customers) or potential clients (or potential customers) of the Company, (iii) any method and/or procedure (such as records, programs, systems, correspondence, or other documents), relating or pertaining to projects developed by the Company or contemplated to be developed by the Company, or (iv) the Company's business, which information or knowledge the Executive shall -5-

have obtained during the term of this Agreement, and which is otherwise of a secret or confidential nature. Further, upon leaving the employ of the Company for any reason whatsoever, the Executive shall not take with him, without prior written consent of the Board of Directors of the Company, any documents, forms, or other reproductions of any data or any information relating to or pertaining to the Company, any clients (or customers) or potential clients (or potential customers) of the Company, or any other confidential information or trade secrets. 14. Entire Agreement; Amendments, Other Agreements. This Agreement contains the entire understanding of the Executive and the Company with respect to employment of the Executive and supersedes any and all prior understandings, written or oral. This Agreement may not be amended, waived, discharged or terminated orally, but only by an instrument in writing. Any earlier employment agreements between the Executive and the Company are hereby terminated and shall be of no further effect after the effective date hereof. 15. Miscellaneous. A. Any notices required by this Agreement shall (i) be made in writing and mailed by certified mail, return receipt requested, with adequate postage prepaid; (ii) be deemed given when so mailed; (iii) be deemed received by the addressee within ten (10) days after given or when the certified mail receipt for such mail is executed, whichever if earlier; and (iv) in the case of the Company, be mailed to its principal office, or in the case of the Executive, be mailed to the last address that the Executive has given to the Company. B. This Agreement shall be binding upon and inure to the benefit of, the parties, their successors, assigns, personal representatives, distributees, heirs, and legatees. C. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without giving effect to the principles of conflicts of law thereof. D. Any dispute regarding any aspect of this Agreement or any act which allegedly has or would violate any provision of this Agreement will be submitted to binding arbitration. Such arbitration shall be conducted before an arbitrator sitting in a location agreed to by the Company and the Executive within fifty (50) miles of the location of the Executive's principal place of employment, in accordance with the rules of the American Arbitration Association then in effect. Each party will be entitled to limited discovery, to consist of a maximum of three (3) depositions (maximum two (2) hours each), and twenty-five (25) written interrogatories per party, which will be completed within one hundred twenty (120) days following the selection of the arbitrator. Judgment may be entered on the award of the arbitrator in any court having competent jurisdiction. E. Any failure by the Company to insist upon strict compliance with any term or provision of this Agreement, to exercise any option, to enforce any right, or to seek any remedy upon any breach by the Executive shall not affect, or constitute a waiver of, the Company's right to insist upon such strict compliance, exercise such option, enforce such right, or seek such remedy with respect to such breach or any prior, contemporaneous, or subsequent breach. No custom or practice of the Company at variance with any provision of this Agreement shall affect -6-

or constitute a waiver of, the Company's right to demand strict compliance with all provisions of this Agreement. F. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed severable from the remainder of this Agreement, and the remaining provisions contained in this Agreement shall be construed to preserve to the maximum permissible extent the intent and purposes of this Agreement. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. G. In the event that the Executive violates the provisions of Sections 13 and 14 above, upon notice from the Company informing him of the nature of such violation, the Executive shall immediately terminate any actions which constitute such violation. The existence of this right shall not preclude any other rights and remedies at law or in equity which the Company may have. H. It is recognized that damages in the event of breach of any provision of Sections 13 and 14 above by the Executive would be difficult, if not impossible, to ascertain, and it is therefore agreed that the Company, in addition to and without limiting any other remedy or right it may have, will be entitled to a decree of specific performance, mandamus or other appropriate remedy to enforce performance of such requirements. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first hereinabove written. I. C. ISAACS & COMPANY, L.L.P. I. G. DESIGN, INC.
By: /s/ Gerald W. Lear ___________________________ Gerald W. Lear President

EXECUTIVE
/s/ Gary Brashers _______________________________ Gary Brashers

-7-

EXECUTIVE EMPLOYMENT AGREEMENT THIS EXECUTIVE EMPLOYMENT AGREEMENT is made this 15th day of May 1997, by and between I. C. Isaacs & Company, L.P., a Delaware limited partnership (the "Company"), and Eugene C. Wielepski (the "Executive"). EXPLANATORY STATEMENT The Company desires to continue to employ the Executive as the Vice President and Chief Financial Officer on the terms and conditions herein set forth, and the Executive has agreed to accept employment with the Company on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and the mutual promises made herein, the parties agree as follows: 1. Employment. The Company hereby employs Vice President and Chief Financial Officer and agrees to continue the Executive in that position during the term of this Agreement. 2. Term. This Agreement shall begin May 15, 1997 and shall continue until May 15, 1999. (the "Employment Period") Thereafter, this Agreement shall renew automatically from Employment Year to Employment Year, subject to the right of either party to terminate this Agreement as of the end of any Employment Year upon sixty (60) days' prior written notice to the other party. An "Employment Year" begins each May 15 and ends on the following May 15. 3. Base Salary. The Executive's base salary for the first Employment Year under this Agreement (May 15, 1997 through May 15, 1999) shall be at the rate of Two Hundred Thousand Dollars ($200,000) per annum. Such base salary may be increased based on periodic reviews by the Compensation Committee of the Board of Directors. The Executive's base salary shall be paid throughout the year, in accordance with normal payroll practices of the Company. 4. Bonuses; Stock Plans. In addition to his base salary, during the term of this Agreement, the Executive shall be entitled to participate in any bonus and stock option plans, programs, arrangements and practices sponsored by the Company for the benefit of executive employees serving in similar capacities with the Company (and/or its affiliates), if any, as may be established from time to time by the Board of Directors of the Company for the benefit of such executive employees, in accordance with the terms of such plans, as amended by the Company from time to time; it being understood that there is no assurance with respect to the establishment of such plans or, if established, the continuation of such plans during the term of this Agreement. -1-

5. Other Benefits. During the term of this Agreement, the Executive shall also be entitled to participate in or receive benefits under all of the Company's benefit plans, programs, arrangements and practices, including pension, disability, and group life, sickness, accident or health insurance programs, if any, as may be established from time to time by the Board of Directors of the Company for the benefit of executive employees serving in similar capacities with the Company (and/or its affiliates), in accordance with the terms of such plans, as amended by the Company from time to time; it being understood that there is no assurance with respect to the establishment of such plans or, if established, the continuation of such plans during the term of this Agreement. 6. Duties. A. During the term of this Agreement, the Executive shall serve as Vice President and Chief Financial Officer, have such powers and shall perform such duties as are incident and customary to his office, including those described in the Company's By-Laws (as amended from time to time), and shall perform such other additional executive and administrative duties and functions commensurate with such position as from time to time shall be assigned to him by the Board of Directors of the Company. The Executive shall perform such additional duties and functions without separate compensation, unless otherwise authorized by the Board. B. The Executive shall devote his full time, attention, skill, and energy to the performance of his duties under this Agreement, and shall comply with all reasonable professional requests of the Company; provided, however, that the Executive will be permitted to engage in and manage personal investments and to participate in community and charitable affairs, so long as such activities do not interfere with his duties under this Agreement. 7. Vacation and Sick Leave. A. The Executive shall be entitled to a total of four (4) weeks of vacation each Employment Year, such vacation to be in accordance with the terms of the Company's announced policy for executive employees, as in effect from time to time. The Executive may take his vacation at such time or times as shall not interfere with the performance of his duties under this Agreement. B. The Executive shall be entitled to paid sick leave and holidays in accordance with the Company's announced policy for executive employees, as in effect from time to time. 8. Expenses. The Company shall reimburse the Executive for all reasonable expenses incurred in connection with his duties on behalf of the Company, provided that the Executive shall keep, and present to the Company, records and receipts relating to reimbursable expenses incurred by him. Such records and receipts shall be maintained and presented in a format, and with such regularity, as the Company reasonably may require in order to substantiate -2-

the Company's right to claim income tax deductions for such expenses. Without limiting the generality of the foregoing, the Executive shall be entitled to reimbursement for any business-related travel, business-related entertainment, whether at his residence or otherwise, and other costs and expenses reasonably incident to the performance of his duties on behalf of the Company. 9. Termination of Employment for Cause. Notwithstanding the provisions of Section 2 of this Agreement, the Executive's employment (and all of his rights and benefits under this Agreement) shall terminate immediately and without further notice upon the happening of any one or more of the following events: A. The Executive has been or is guilty of (i) a criminal offense involving moral turpitude, (ii) criminal or dishonest conduct pertaining to the business or affairs of the Company (including, without limitation, fraud and misappropriation), (iii) any act or omission the intended or likely consequence of which is material injury to the Company's business, property or reputation, which act or omission continues uncured for a period of ten (10) days after the Executive has received written notice from the Company, and/or (iv) gross negligence or willful misconduct which continues uncured for a period of ten (10) days after the Executive has received written notice from the Company; B. The Executive persists, for a period of ten (10) days after written notice from the Company, in a course of conduct reasonably determined by the Board of Directors of the Company to be in violation of his duties to the Company under this Agreement or otherwise in violation of the covenants, agreements or obligations under the terms of this Agreement; C. The Executive's death; or D. The continuous and uninterrupted inability to perform the Executive's duties on behalf of the Company, by reason of accident, mental or physical illness or impairment, or disease, for a period of one hundred and eighty (180) days from the first day of such inability to perform his duties. (Subsections A, B, C, & D of this Section 9 hereinafter referred to collectively and individually as "Cause"). In the event of a termination for Cause, the Company shall pay the Executive his base salary through the effective date of the employment termination, and the Executive shall immediately thereafter forfeit all rights and benefits (other than vested benefits), including but not limited to any right to compensation pursuant to Section 4 of this Agreement, he would otherwise have been entitled to receive under this Agreement. The Company and the Executive thereafter shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 10. Termination of Employment by the Company Without Cause. Notwithstanding the provisions of Section 2 of this Agreement, the Board of Directors may terminate the Executive's employment, as provided under this Agreement, at any time, for reasons other than -3-

for Cause by notifying the Executive in writing of such termination. If the Executive is terminated pursuant to this Section 10, (i) during the remainder of the Non-Competition Period (as hereinafter defined), the Company shall pay the Executive his base salary at the rate and in the manner required by Section 3 and in effect immediately prior to the date of termination and (ii) after the Employment Period, the Company and the Executive shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 11. Termination of Employment by the Executive. Notwithstanding the provisions of Section 2 of this Agreement, the Executive may terminate this Agreement at any time by giving the Board of Directors written notice of his intent to terminate, delivered at least sixty (60) days prior to the effective date of such termination. Upon expiration of the sixty (60) day notice period (or such earlier date as may be approved by the Board of Directors), the termination by the Executive shall become effective. Upon the effective date of such termination, the Company's obligations under Sections 3, 4 and 5 of this Agreement shall immediately expire, except to the extent that the benefits described in Section 5 have vested and continue after termination under the terms of the benefit plans and programs that generally apply to executive employees serving in similar capacities with the Company. 12. Non-Renewal. If, upon termination of the Employment Period, the Company shall decide not to renew this Agreement and the Company does not waive the provisions of Section 13 below, (i) during the remainder of the Non-Competition Period, the Company shall pay the Executive his base salary at the rate and in the manner required by Section 3 of this Agreement and in effect immediately prior to the date of termination and (ii) after the Employment Period, the Company and the Executive shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 13. Non-Competition. The Executive and the Company recognize that due to the nature of his employment, and his relationship with the Company, the Executive has had and will have access to, and has acquired and will acquire, and has assisted and will assist in developing, confidential and proprietary information relating to the business and operations of the Company (for purposes of this Section 13 and Section 14 below, the Company shall mean the Company, I. G. Design, Inc., or any of its/their affiliates or successors) including, without limitation, information with respect to their present and prospective services, systems, products, clients, customers, agents, and sales and marketing methods. The Executive acknowledges that such information has been and will be of central importance to the Company's business and that disclosure of it to others or its use by others could cause substantial loss to the Company. The Executive and the Company also recognize that an important part of the Executive's duties will be to develop good will for the Company through his personal contact with the Company's clients, and that there is a danger that this good will, a proprietary asset of the Company, may follow the Executive if and when his relationship with the Company is terminated. A. The Executive agrees that, during the term of his employment with the Company, and for a period of one (1) year after the termination of his employment for any reason whatsoever (including the non-renewal of this Agreement by either party): (i) The Executive will not directly or indirectly, within the United States, whether as a partner, proprietor, employee, consultant, agent or otherwise, participate or engage in any business that competes with, restricts, or interferes with the business of the Company, including, without limitation, any business in the young men's and women's contemporary sportswear industry. -4-

(ii) The Executive will not directly or indirectly (for his own account, or for the account of others) interfere with, solicit, or accept for himself, his benefit, or for anyone other than the Company, any of the clients or customers of the Company, at the time of said termination, or any potential clients or customers solicited or being solicited by the Company at the time of such termination or within the period one (1) year prior thereto, or perform any services of any competitive nature in connection with said clients or customers for anyone other than the Company. (iii) The Executive further agrees that he shall not, at any time, directly or indirectly, urge any client (or customer) or potential client (or potential customer) of the Company to discontinue business, in whole or in part, or not to do business, with the Company. (iv) The Executive further agrees that he shall not, at any time, directly or indirectly, solicit, hire or arrange to hire any person who at the time of such hire or within one (1) year prior to the time of such hire was an employee of the Company and was not involuntarily terminated by the Company, for himself or for any business entity with which he may be, or may be planning to be, affiliated or associated, or otherwise interfere with the retention of employees that the Company desires to retain as such. B. The Executive expressly acknowledges and agrees (i) that the restrictions set forth herein are reasonable, in terms of scope, duration, geographic area, and otherwise, (ii) that the protections afforded to the Company hereunder are necessary to protect its legitimate business interests, and (iii) that the agreement to observe such restrictions form a material part of the consideration for this Agreement and the Executive's employment by the Company. 14. Confidential Information. The Executive agrees that, during the term of his employment with the Company, and for a period of one (1) year after the termination of his employment for any reason whatsoever, he shall not disclose to any person or use the same in any way, other than in the discharge of his duties under this Agreement in connection with the business of the Company, any trade secrets or confidential or proprietary information of the Company, including, without limitation, any information or knowledge relating to (i) the business, operations or internal structure of the Company, (ii) the clients (or customers) or potential clients (or potential customers) of the Company, (iii) any method and/or procedure (such as records, programs, systems, correspondence, or other documents), relating or pertaining to projects developed by the Company or contemplated to be developed by the Company, or (iv) the Company's business, which information or knowledge the Executive shall have obtained during the term of this Agreement, and which is otherwise of a secret or confidential nature. Further, upon leaving the employ of the Company for any reason whatsoever, the Executive shall not take with him, without prior written consent of the Board of Directors of the Company, any -5-

documents, forms, or other reproductions of any data or any information relating to or pertaining to the Company, any clients (or customers) or potential clients (or potential customers) of the Company, or any other confidential information or trade secrets. 15. Entire Agreement; Amendments, Other Agreements. This Agreement contains the entire understanding of the Executive and the Company with respect to employment of the Executive and supersedes any and all prior understandings, written or oral. This Agreement may not be amended, waived, discharged or terminated orally, but only by an instrument in writing. Any earlier employment agreements between the Executive and the Company are hereby terminated and shall be of no further effect after the effective date hereof. 16. Miscellaneous. A. Any notices required by this Agreement shall (i) be made in writing and mailed by certified mail, return receipt requested, with adequate postage prepaid; (ii) be deemed given when so mailed; (iii) be deemed received by the addressee within ten (10) days after given or when the certified mail receipt for such mail is executed, whichever if earlier; and (iv) in the case of the Company, be mailed to its principal office, or in the case of the Executive, be mailed to the last address that the Executive has given to the Company. B. This Agreement shall be binding upon and inure to the benefit of, the parties, their successors, assigns, personal representatives, distributees, heirs, and legatees. C. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without giving effect to the principles of conflicts of law thereof. D. Any dispute regarding any aspect of this Agreement or any act which allegedly has or would violate any provision of this Agreement will be submitted to binding arbitration. Such arbitration shall be conducted before an arbitrator sitting in a location agreed to by the Company and the Executive within fifty (50) miles of the location of the Executive's principal place of employment, in accordance with the rules of the American Arbitration Association then in effect. Each party will be entitled to limited discovery, to consist of a maximum of three (3) depositions (maximum two (2) hours each), and twenty-five (25) written interrogatories per party, which will be completed within one hundred twenty (120) days following the selection of the arbitrator. Judgment may be entered on the award of the arbitrator in any court having competent jurisdiction. E. Any failure by the Company to insist upon strict compliance with any term or provision of this Agreement, to exercise any option, to enforce any right, or to seek any remedy upon any breach by the Executive shall not affect, or constitute a waiver of, the Company's right to insist upon such strict compliance, exercise such option, enforce such right, or seek such remedy with respect to such breach or any prior, contemporaneous, or subsequent breach. No custom or practice of the Company at variance with any provision of this Agreement shall affect -6-

or constitute a waiver of, the Company's right to demand strict compliance with all provisions of this Agreement. F. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed severable from the remainder of this Agreement, and the remaining provisions contained in this Agreement shall be construed to preserve to the maximum permissible extent the intent and purposes of this Agreement. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. G. In the event that the Executive violates the provisions of Sections 13 and 14 above, upon notice from the Company informing him of the nature of such violation, the Executive shall immediately terminate any actions which constitute such violation. The existence of this right shall not preclude any other rights and remedies at law or in equity which the Company may have. H. It is recognized that damages in the event of breach of any provision of Sections 13 and 14 above by the Executive would be difficult, if not impossible, to ascertain, and it is therefore agreed that the Company, in addition to and without limiting any other remedy or right it may have, will be entitled to a decree of specific performance, mandamus or other appropriate remedy to enforce performance of such requirements. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first hereinabove written. I. C. ISAACS & COMPANY, L.P. I. G. DESIGN, INC.
By: /s/ Gerald W. Lear -----------------------Gerald W. Lear President

EXECUTIVE
/s/ Eugene C. Wielepski ------------------------Eugene C. Wielepski

EXECUTIVE EMPLOYMENT AGREEMENT THIS EXECUTIVE EMPLOYMENT AGREEMENT is made this 15th day of May 1997, by and between I. C. Isaacs & Company, L.P., a Delaware limited partnership (the "Company"), and Thomas Ormandy (the "Executive"). EXPLANATORY STATEMENT The Company desires to continue to employ the Executive as Vice President on the terms and conditions herein set forth, and the Executive has agreed to accept employment with the Company on the terms and conditions herein set forth. NOW, THEREFORE, in consideration of the premises and the mutual promises made herein, the parties agree as follows: 1. Employment. The Company hereby employs the Executive as Vice President and agrees to continue the Executive in that position during the term of this Agreement. 2. Term. This Agreement shall begin May 15, 1997 and shall continue until May 15, 1999. (the "Employment Period") Thereafter, this Agreement shall renew automatically from Employment Year to Employment Year, subject to the right of either party to terminate this Agreement as of the end of any Employment Year upon sixty (60) days' prior written notice to the other party. An "Employment Year" begins each May 15 and ends on the following May 15. 3. Base Salary. The Executive's base salary for the first Employment Year under this Agreement (May 15, 1997 through May 15, 1999) shall be at the rate of Three Hundred Thousand Dollars ($300,000) per annum. Such base salary may be increased based on periodic reviews by the Compensation Committee of the Board of Directors. The Executive's base salary shall be paid throughout the year, in accordance with normal payroll practices of the Company. 4. Bonuses; Stock Plans. In addition to his base salary, during the term of this Agreement, the Executive shall be eligible to receive a bonus of up to $60,000 per year, the amount of such bonus to be determined by the Board of Directors in its sole discretion, and shall be entitled to participate in any stock option plans, programs, arrangements and practices sponsored by the Company for the benefit of executive employees serving in similar capacities with the Company (and/or its affiliates), if any, as may be established from time to time by the Board of Directors of the Company for the benefit of such executive employees, in accordance with the terms of such plans, as amended by the Company from time to time; it being understood that there is no assurance with respect to the establishment of such plans or, if established, the continuation of such plans during the term of this Agreement. -1-

5. Other Benefits. During the term of this Agreement, the Executive shall also be entitled to participate in or receive benefits under all of the Company's benefit plans, programs, arrangements and practices, including pension, disability, and group life, sickness, accident or health insurance programs, if any, as may be established from time to time by the Board of Directors of the Company for the benefit of executive employees serving in similar capacities with the Company (and/or its affiliates), in accordance with the terms of such plans, as amended by the Company from time to time; it being understood that there is no assurance with respect to the establishment of such plans or, if established, the continuation of such plans during the term of this Agreement. 6. Duties. A. During the term of this Agreement, the Executive shall serve as Vice President, have such powers and shall perform such duties as are incident and customary to his office, including those described in the Company's By-Laws (as amended from time to time), and shall perform such other additional executive and administrative duties and functions commensurate with such position as from time to time shall be assigned to him by the Board of Directors of the Company. The Executive shall perform such additional duties and functions without separate compensation, unless otherwise authorized by the Board. B. The Executive shall devote his full time, attention, skill, and energy to the performance of his duties under this Agreement, and shall comply with all reasonable professional requests of the Company; provided, however, that the Executive will be permitted to engage in and manage personal investments and to participate in community and charitable affairs, so long as such activities do not interfere with his duties under this Agreement. 7. Vacation and Sick Leave. A. The Executive shall be entitled to a total of four (4) weeks of vacation each Employment Year, such vacation to be in accordance with the terms of the Company's announced policy for executive employees, as in effect from time to time. The Executive may take his vacation at such time or times as shall not interfere with the performance of his duties under this Agreement. B. The Executive shall be entitled to paid sick leave and holidays in accordance with the Company's announced policy for executive employees, as in effect from time to time. 8. Expenses. The Company shall reimburse the Executive for all reasonable expenses incurred in connection with his duties on behalf of the Company, provided that the Executive shall keep, and present to the Company, records and receipts relating to reimbursable expenses incurred by him. Such records and receipts shall be maintained and presented in a format, and with such regularity, as the Company reasonably may require in order to substantiate the Company's right to claim income tax deductions for such expenses. Without limiting the -2-

generality of the foregoing, the Executive shall be entitled to reimbursement for any business-related travel, business-related entertainment, whether at his residence or otherwise, and other costs and expenses reasonably incident to the performance of his duties on behalf of the Company. 9. Termination of Employment for Cause. Notwithstanding the provisions of Section 2 of this Agreement, the Executive's employment (and all of his rights and benefits under this Agreement) shall terminate immediately and without further notice upon the happening of any one or more of the following events: A. The Executive has been or is guilty of (i) a criminal offense involving moral turpitude, (ii) criminal or dishonest conduct pertaining to the business or affairs of the Company (including, without limitation, fraud and misappropriation), (iii) any act or omission the intended or likely consequence of which is material injury to the Company's business, property or reputation, which act or omission continues uncured for a period of ten (10) days after the Executive has received written notice from the Company, and/or (iv) gross negligence or willful misconduct which continues uncured for a period of ten (10) days after the Executive has received written notice from the Company; B. The Executive persists, for a period of ten (10) days after written notice from the Company, in a course of conduct reasonably determined by the Board of Directors of the Company to be in violation of his duties to the Company under this Agreement or otherwise in violation of the covenants, agreements or obligations under the terms of this Agreement; C. The Executive's death; or D. The continuous and uninterrupted inability to perform the Executive's duties on behalf of the Company, by reason of accident, mental or physical illness or impairment, or disease, for a period of one hundred and eighty (180) days from the first day of such inability to perform his duties. (Subsections A, B, C, & D of this Section 9 hereinafter referred to collectively and individually as "Cause"). In the event of a termination for Cause, the Company shall pay the Executive his base salary through the effective date of the employment termination, and the Executive shall immediately thereafter forfeit all rights and benefits (other than vested benefits), including but not limited to any right to compensation pursuant to Section 4 of this Agreement, he would otherwise have been entitled to receive under this Agreement. The Company and the Executive thereafter shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 10. Termination of Employment by the Company Without Cause. Notwithstanding the provisions of Section 2 of this Agreement, the Board of Directors may terminate the Executive's employment, as provided under this Agreement, at any time, for reasons other than -3-

for Cause by notifying the Executive in writing of such termination. If the Executive is terminated pursuant to this Section 10, (i) during the remainder of the Non-Competition Period (as herein after defined), the Company shall pay the Executive his base salary at the rate and in the manner required by Section 3 and in effect immediately prior to the date of termination and (ii) after the Employment Period, the Company and the Executive shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 11. Termination of Employment by the Executive. Notwithstanding the provisions of Section 2 of this Agreement, the Executive may terminate this Agreement at any time by giving the Board of Directors written notice of his intent to terminate, delivered at least sixty (60) days prior to the effective date of such termination. Upon expiration of the sixty (60) day notice period (or such earlier date as may be approved by the Board of Directors), the termination by the Executive shall become effective. Upon the effective date of such termination, the Company's obligations under Sections 3, 4 and 5 of this Agreement shall immediately expire, except to the extent that the benefits described in Section 5 have vested and continue after termination under the terms of the benefit plans and programs that generally apply to executive employees serving in similar capacities with the Company. 12. Non-Renewal. If, upon termination of the Employment Period, the Company shall decide not to renew this Agreement and the Company does not waive the provisions of Section 13 below, (i) during the remainder of the Non-Competition Period, the Company shall pay the Executive his base salary at the rate and in the manner required by Section 3 of this Agreement and in effect immediately prior to the date of termination and (ii) after the Employment Period, the Company and the Executive shall have no further obligations under this Agreement except as otherwise provided in Sections 13 and 14 of this Agreement. 13. Non-Competition. The Executive and the Company recognize that due to the nature of his employment, and his relationship with the Company, the Executive has had and will have access to, and has acquired and will acquire, and has assisted and will assist in developing, confidential and proprietary information relating to the business and operations of the Company (for purposes of this Section 13 and Section 14 below, the Company shall mean the Company, I. G. Design, Inc., or any of its/their affiliates or successors) including, without limitation, information with respect to their present and prospective services, systems, products, clients, customers, agents, and sales and marketing methods. The Executive acknowledges that such information has been and will be of central importance to the Company's business and that disclosure of it to others or its use by others could cause substantial loss to the Company. The Executive and the Company also recognize that an important part of the Executive's duties will be to develop good will for the Company through his personal contact with the Company's clients, and that there is a danger that this good will, a proprietary asset of the Company, may follow the Executive if and when his relationship with the Company is terminated. A. The Executive agrees that, during the term of his employment with the Company, and for a period of one (1) year after the termination of his employment for any reason whatsoever (including the non-renewal of this Agreement by either party): (i) The Executive will not directly or indirectly, within the United States, whether as a partner, proprietor, employee, consultant, agent or otherwise, participate or engage in any business that competes with, restricts, or interferes with the business of the Company, including, without limitation, any business in the young men's and women's contemporary sportswear industry. -4-

(ii) The Executive will not directly or indirectly (for his own account, or for the account of others) interfere with, solicit, or accept for himself, his benefit, or for anyone other than the Company, any of the clients or customers of the Company, at the time of said termination, or any potential clients or customers solicited or being solicited by the Company at the time of such termination or within the period one (1) year prior thereto, or perform any services of any competitive nature in connection with said clients or customers for anyone other than the Company. (iii) The Executive further agrees that he shall not, at any time, directly or indirectly, urge any client (or customer) or potential client (or potential customer) of the Company to discontinue business, in whole or in part, or not to do business, with the Company. (iv) The Executive further agrees that he shall not, at any time, directly or indirectly, solicit, hire or arrange to hire any person who at the time of such hire or within one (1) year prior to the time of such hire was an employee of the Company and was not involuntarily terminated by the Company, for himself or for any business entity with which he may be, or may be planning to be, affiliated or associated, or otherwise interfere with the retention of employees that the Company desires to retain as such. B. The Executive expressly acknowledges and agrees (i) that the restrictions set forth herein are reasonable, in terms of scope, duration, geographic area, and otherwise, (ii) that the protections afforded to the Company hereunder are necessary to protect its legitimate business interests, and (iii) that the agreement to observe such restrictions form a material part of the consideration for this Agreement and the Executive's employment by the Company. 14. Confidential Information. The Executive agrees that, during the term of his employment with the Company, and for a period of one (1) year after the termination of his employment for any reason whatsoever, he shall not disclose to any person or use the same in any way, other than in the discharge of his duties under this Agreement in connection with the business of the Company, any trade secrets or confidential or proprietary information of the Company, including, without limitation, any information or knowledge relating to (i) the business, operations or internal structure of the Company, (ii) the clients (or customers) or potential clients (or potential customers) of the Company, (iii) any method and/or procedure (such as records, programs, systems, correspondence, or other documents), relating or pertaining to projects developed by the Company or contemplated to be developed by the Company, or (iv) the Company's business, which information or knowledge the Executive shall have obtained during the term of this Agreement, and which is otherwise of a secret or confidential nature. Further, upon leaving the employ of the Company for any reason whatsoever, the Executive shall -5-

not take with him, without prior written consent of the Board of Directors of the Company, any documents, forms, or other reproductions of any data or any information relating to or pertaining to the Company, any clients (or customers) or potential clients (or potential customers) of the Company, or any other confidential information or trade secrets. 15. Entire Agreement; Amendments, Other Agreements. This Agreement contains the entire understanding of the Executive and the Company with respect to employment of the Executive and supersedes any and all prior understandings, written or oral. This Agreement may not be amended, waived, discharged or terminated orally, but only by an instrument in writing. Any earlier employment agreements between the Executive and the Company are hereby terminated and shall be of no further effect after the effective date hereof. 16. Miscellaneous. A. Any notices required by this Agreement shall (i) be made in writing and mailed by certified mail, return receipt requested, with adequate postage prepaid; (ii) be deemed given when so mailed; (iii) be deemed received by the addressee within ten (10) days after given or when the certified mail receipt for such mail is executed, whichever if earlier; and (iv) in the case of the Company, be mailed to its principal office, or in the case of the Executive, be mailed to the last address that the Executive has given to the Company. B. This Agreement shall be binding upon and inure to the benefit of, the parties, their successors, assigns, personal representatives, distributees, heirs, and legatees. C. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without giving effect to the principles of conflicts of law thereof. D. Any dispute regarding any aspect of this Agreement or any act which allegedly has or would violate any provision of this Agreement will be submitted to binding arbitration. Such arbitration shall be conducted before an arbitrator sitting in a location agreed to by the Company and the Executive within fifty (50) miles of the location of the Executive's principal place of employment, in accordance with the rules of the American Arbitration Association then in effect. Each party will be entitled to limited discovery, to consist of a maximum of three (3) depositions (maximum two (2) hours each), and twenty-five (25) written interrogatories per party, which will be completed within one hundred twenty (120) days following the selection of the arbitrator. Judgment may be entered on the award of the arbitrator in any court having competent jurisdiction. E. Any failure by the Company to insist upon strict compliance with any term or provision of this Agreement, to exercise any option, to enforce any right, or to seek any remedy upon any breach by the Executive shall not affect, or constitute a waiver of, the Company's right to insist upon such strict compliance, exercise such option, enforce such right, or seek such remedy with respect to such breach or any prior, contemporaneous, or subsequent breach. No -6-

custom or practice of the Company at variance with any provision of this Agreement shall affect or constitute a waiver of, the Company's right to demand strict compliance with all provisions of this Agreement. F. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be deemed severable from the remainder of this Agreement, and the remaining provisions contained in this Agreement shall be construed to preserve to the maximum permissible extent the intent and purposes of this Agreement. Any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. G. In the event that the Executive violates the provisions of Sections 13 and 14 above, upon notice from the Company informing him of the nature of such violation, the Executive shall immediately terminate any actions which constitute such violation. The existence of this right shall not preclude any other rights and remedies at law or in equity which the Company may have. H. It is recognized that damages in the event of breach of any provision of Sections 13 and 14 above by the Executive would be difficult, if not impossible, to ascertain, and it is therefore agreed that the Company, in addition to and without limiting any other remedy or right it may have, will be entitled to a decree of specific performance, mandamus or other appropriate remedy to enforce performance of such requirements. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first hereinabove written. I. C. ISAACS & COMPANY, L.P. I. G. DESIGN, INC.
By: /s/ Gerald W. Lear -------------------------------Gerald W. Lear President

EXECUTIVE
/s/ Thomas Ormandy --------------------------------Thomas Ormandy

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I. G. DESIGN, INC. 1997 OMNIBUS STOCK PLAN 1. Establishment, Purpose and Types of Awards I. G. Design, Inc. hereby establishes the I. G. DESIGN, INC. 1997 OMNIBUS STOCK PLAN (the "Plan"). The purpose of the Plan is to promote the long-term growth and profitability of I. G. Design, Inc. (the "Corporation") by (i) providing key people with incentives to improve stockholder value and to contribute to the growth and financial success of the Corporation, and (ii) enabling the Corporation to attract, retain and reward the best-available persons for positions of substantial responsibility. The Plan permits the granting of stock options (including incentive stock options qualifying under Code section 422 and nonqualified stock options), stock appreciation rights, restricted or unrestricted stock awards, phantom stock, performance awards, or any combination of the foregoing. 2. Definitions Under this Plan, except where the context otherwise indicates, the following definitions apply: (a) "Affiliate" shall mean any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, the Corporation (including, but not limited to, joint ventures, limited liability companies, and partnerships). For this purpose, "control" shall mean ownership of 50% or more of the total combined voting power or value of all classes of stock or interests of the entity. (b) "Award" shall mean any stock option, stock appreciation right, stock award, phantom stock award, or performance award. (c) "Board" shall mean the Board of Directors of the Corporation. (d) "Code" shall mean the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder. (e) "Common Stock" shall mean shares of common stock of the Corporation, par value of $0.0001 per share. (f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. (g) "Fair Market Value" of a share of the Corporation's Common Stock for any purpose on a particular date shall be determined in a manner such as the Administrator shall in good faith determine to be appropriate; provided that in the event the Common Stock shall become registered under Section 12 of the Exchange Act, then thereafter the Fair Market Value of the Corporation's Common Stock for any purpose on a particular date shall mean the last reported sale price per share of Common Stock, regular way, on such date or, in case no such sale takes place on such date, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on a national securities exchange or included for quotation on the Nasdaq-National Market, or if the Common Stock is not so listed or admitted to trading or included for quotation, the last quoted price, or if the Common Stock is not so quoted, the average of the high bid and low asked prices, regular way, in the over-the-counter market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation System or, if such system is no longer in use, the principal other automated quotations system that may then be in use or, if the Common Stock is not quoted by any such organization, the average of the closing bid and asked prices, regular way, as furnished by a professional market maker making a market in the

Common Stock as selected in good faith by the Administrator or by such other source or sources as shall be selected in good faith by the Administrator. If, as the case may be, the relevant date is not a trading day, the determination shall be made as of the next preceding trading day. As used herein, the term "trading day" shall mean a day on which public trading of securities occurs and is reported in the principal consolidated reporting system referred to above, or if the Common Stock is not listed or admitted to trading on a national securities exchange or included for quotation on the Nasdaq-National Market, any business day. (h) "Grant Agreement" shall mean a written document memorializing the terms and conditions of an Award granted pursuant to the Plan and shall incorporate the terms of the Plan. (i) "Parent" shall mean a corporation, whether now or hereafter existing, within the meaning of the definition of "parent corporation" provided in Code section 424(e), or any successor thereto. (j) "Subsidiary" and "subsidiaries" shall mean only a corporation or corporations, whether now or hereafter existing, within the meaning of the definition of "subsidiary corporation" provided in Section 424(f) of the Code, or any successor thereto. 3. Administration (a) Administration of the Plan. The Plan shall be administered by the Board or by such committee or committees as may be appointed by the Board from time to time (the Board, committee or committees hereinafter referred to as the "Administrator"). (b) Powers of the Administrator. The Administrator shall have all the powers vested in it by the terms of the Plan, such powers to include authority, in its sole and absolute discretion, to grant Awards under the Plan, prescribe Grant Agreements evidencing such Awards and establish programs for granting Awards. The Administrator shall have full power and authority to take all other actions necessary to carry out the purpose and intent of the Plan, including, but not limited to, the authority to: (i) determine the eligible persons to whom, and the time or times at which Awards shall be granted; (ii) determine the types of Awards to be granted; (iii) determine the number of shares to be covered by or used for reference purposes for each Award; (iv) impose such terms, limitations, restrictions and conditions upon any such Award as the Administrator shall deem appropriate; (v) modify, amend, extend or renew outstanding Awards, or accept the surrender of outstanding Awards and substitute new Awards (provided however, that, except as provided in Section 7(d) of the Plan, any modification that would materially adversely affect any outstanding Award shall not be made without the consent of the holder); (vi) accelerate or otherwise change the time in which an Award may be exercised or becomes payable and to waive or accelerate the lapse, in whole or in part, of any restriction or condition with respect to such Award, including, but not limited to, any restriction or condition with respect to the vesting or exercisability of an Award following termination of any grantee's employment; and (vii) establish objectives and conditions, if any, for earning Awards and determining whether Awards will be paid after the end of a performance period. The Administrator shall have full power and authority, in its sole and absolute discretion, to administer and interpret the Plan and to adopt and interpret such rules, regulations, agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Administrator deems necessary or advisable. (c) Non-Uniform Determinations. The Administrator's determinations under the Plan (including without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the Grant Agreements evidencing such Awards) need not -2-

be uniform and may be made by the Administrator selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated. (d) Limited Liability. To the maximum extent permitted by law, no member of the Administrator shall be liable for any action taken or decision made in good faith relating to the Plan or any Award thereunder. (e) Indemnification. To the maximum extent permitted by law and by the Corporation's charter and by-laws, the members of the Administrator shall be indemnified by the Corporation in respect of all their activities under the Plan. (f) Effect of Administrator's Decision. All actions taken and decisions and determinations made by the Administrator on all matters relating to the Plan pursuant to the powers vested in it hereunder shall be in the Administrator's sole and absolute discretion and shall be conclusive and binding on all parties concerned, including the Corporation, its stockholders, any participants in the Plan and any other employee of the Corporation, and their respective successors in interest. 4. Shares Available for the Plan; Maximum Awards Subject to adjustments as provided in Section 7(d) of the Plan, the shares of Common Stock that may be issued with respect to Awards granted under the Plan shall not exceed an aggregate of 500,000 shares of Common Stock after the Company's initial public offering. The Corporation shall reserve such number of shares for Awards under the Plan, subject to adjustments as provided in Section 7(d) of the Plan. If any Award, or portion of an Award, under the Plan expires or terminates unexercised, becomes unexercisable or is forfeited or otherwise terminated, surrendered or canceled as to any shares, or if any shares of Common Stock are surrendered to the Corporation in connection with any Award (whether or not such surrendered shares were acquired pursuant to any Award), the shares subject to such Award and the surrendered shares shall thereafter be available for further Awards under the Plan; provided, however, that any such shares that are surrendered to the Corporation in connection with any Award or that are otherwise forfeited after issuance shall not be available for purchase pursuant to incentive stock options intended to qualify under Code section 422. 5. Participation Participation in the Plan shall be open to all employees, officers, directors and consultants of the Corporation, or of any Affiliate of the Corporation, as may be selected by the Administrator from time to time. 6. Awards The Administrator, in its sole discretion, establishes the terms of all Awards granted under the Plan. Awards may be granted individually or in tandem with other types of Awards. All Awards are subject to the terms and conditions provided in the Grant Agreement. (a) Stock Options. The Administrator may from time to time grant to eligible participants Awards of incentive stock options as that term is defined in Code section 422 or nonqualified stock options; provided, however, that Awards of incentive stock options shall be limited to employees of the Corporation or of any Parent or Subsidiary of the Corporation. Options intended to qualify as incentive stock options under Code section 422 must have an exercise price at least equal to Fair Market Value on the date of grant, but nonqualified stock options may be granted with an exercise price less than Fair Market Value. No stock option shall be an incentive stock option unless so designated by the Administrator at the time of grant or in the Grant Agreement evidencing such stock option. -3-

(b) Stock Appreciation Rights. The Administrator may from time to time grant to eligible participants Awards of Stock Appreciation Rights ("SAR"). An SAR entitles the grantee to receive, subject to the provisions of the Plan and the Grant Agreement, a payment having an aggregate value equal to the product of (i) the excess of (A) the Fair Market Value on the exercise date of one share of Common Stock over (B) the base price per share specified in the Grant Agreement, times (ii) the number of shares specified by the SAR, or portion thereof, which is exercised. Payment by the Corporation of the amount receivable upon any exercise of an SAR may be made by the delivery of Common Stock or cash, or any combination of Common Stock and cash, as determined in the sole discretion of the Administrator. If upon settlement of the exercise of an SAR a grantee is to receive a portion of such payment in shares of Common Stock, the number of shares shall be determined by dividing such portion by the Fair Market Value of a share of Common Stock on the exercise date. No fractional shares shall be used for such payment and the Administrator shall determine whether cash shall be given in lieu of such fractional shares or whether such fractional shares shall be eliminated. (c) Stock Awards. The Administrator may from time to time grant restricted or unrestricted stock Awards to eligible participants in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by law, as it shall determine. A stock Award may be paid in Common Stock, in cash, or in a combination of Common Stock and cash, as determined in the sole discretion of the Administrator. (d) Phantom Stock. The Administrator may from time to time grant Awards to eligible participants denominated in stock-equivalent units ("phantom stock") in such amounts and on such terms and conditions as it shall determine. Phantom stock units granted to a participant shall be credited to a bookkeeping reserve account solely for accounting purposes and shall not require a segregation of any of the Corporation's assets. An Award of phantom stock may be settled in Common Stock, in cash, or in a combination of Common Stock and cash, as determined in the sole discretion of the Administrator. Except as otherwise provided in the applicable Grant Agreement, the grantee shall not have the rights of a stockholder with respect to any shares of Common Stock represented by a phantom stock unit solely as a result of the grant of a phantom stock unit to the grantee. (e) Performance Awards. The Administrator may, in its discretion, grant performance awards which become payable on account of attainment of one or more performance goals established by the Administrator. Performance awards may be paid by the delivery of Common Stock or cash, or any combination of Common Stock and cash, as determined in the sole discretion of the Administrator. Performance goals established by the Administrator may be based on the Corporation's or an Affiliate's operating income or one or more other business criteria selected by the Administrator that apply to an individual or group of individuals, a business unit, or the Corporation or an Affiliate as a whole, over such performance period as the Administrator may designate. 7. Miscellaneous (a) Withholding of Taxes. Grantees and holders of Awards shall pay to the Corporation, or make provision satisfactory to the Administrator for payment of, any taxes required to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability. The Corporation may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the grantee or holder of an Award. In the event that payment to the Corporation of such tax obligations is made in shares of Common Stock, such shares shall be valued at Fair Market Value on the applicable date for such purposes. (b) Loans. The Corporation may make or guarantee loans to grantees to assist grantees in exercising Awards and satisfying any withholding tax obligations. -4-

(c) Transferability. Except as otherwise determined by the Administrator, and in any event in the case of an incentive stock option or a stock appreciation right granted with respect to an incentive stock option, no Award granted under the Plan shall be transferable by a grantee otherwise than by will or the laws of descent and distribution. Unless otherwise determined by the Administrator in accord with the provisions of the immediately preceding sentence, an Award may be exercised during the lifetime of the grantee, only by the grantee or, during the period the grantee is under a legal disability, by the grantee's guardian or legal representative. (d) Adjustments; Business Combinations. In the event of changes in the Common Stock of the Corporation by reason of any stock dividend, split-up, recapitalization, merger, consolidation, business combination or exchange of shares and the like, the Administrator shall, in its discretion, make appropriate adjustments to the maximum number and kind of shares reserved for issuance or with respect to which Awards may be granted under the Plan as provided in Section 4 of the Plan and to the number, kind and price of shares covered by Awards granted, and shall, in its discretion and without the consent of holders of Awards, make any other adjustments in Awards, including but not limited to reducing the number of shares subject to Awards or providing or mandating alternative settlement methods such as settlement of the Awards in cash or in shares of Common Stock or other securities of the Corporation or of any other entity, or in any other matters which relate to Awards as the Administrator shall, in its sole discretion, determine to be necessary or appropriate. Notwithstanding anything in the Plan to the contrary and without the consent of holders of Awards, the Administrator, in its sole discretion, may make any modifications to any Awards, including but not limited to cancellation, forfeiture, surrender or other termination of the Awards in whole or in part regardless of the vested status of the Award, in order to facilitate any business combination that is authorized by the Board to comply with requirements for treatment as a pooling of interests transaction for accounting purposes under generally accepted accounting principles. The Administrator is authorized to make, in its discretion and without the consent of holders of Awards, adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Corporation, or the financial statements of the Corporation or any Subsidiary, or of changes in applicable laws, regulations, or accounting principles, whenever the Administrator determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. (e) Termination, Amendment and Modification of the Plan. The Board may terminate, amend or modify the Plan or any portion thereof at any time. (f) Non-Guarantee of Employment or Service. Nothing in the Plan or in any Grant Agreement thereunder shall confer any right on an individual to continue in the service of the Corporation or shall interfere in any way with the right of the Corporation to terminate such service at any time. (g) No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Corporation and a grantee or any other person. To the extent that any grantee or other person acquires a right to receive payments from the Corporation pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Corporation. (h) Governing Law. The validity, construction and effect of the Plan, of Grant Agreements entered into pursuant to the Plan, and of any rules, regulations, determinations or decisions made by the Administrator relating to the Plan or such Grant Agreements, and the rights of any and all persons having or claiming to have any interest therein or thereunder, shall be determined exclusively in accordance with applicable federal laws and the laws of the State of Delaware, without regard to its conflict of laws principles. -5-

(i) Effective Date; Termination Date. The Plan is effective as of the date on which the Plan was adopted by the Board, subject to approval of the stockholders within twelve months before or after such date. No Award shall be granted under the Plan after the close of business on the day immediately preceding the tenth anniversary of the effective date of the Plan. Subject to other applicable provisions of the Plan, all Awards made under the Plan prior to such termination of the Plan shall remain in effect until such Awards have been satisfied or terminated in accordance with the Plan and the terms of such Awards. Date Approved by the Board: May 15, 1997 Date Approved by the Stockholders: May 15, 1997

ACCOUNTS FINANCING AGREEMENT [SECURITY AGREEMENT] BETWEEN CONGRESS FINANCIAL CORPORATION 1133 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10036 AND I.C. ISAACS & COMPANY L.P. (NAME OF CLIENT) 3480 Bank Street (STREET ADDRESS) Baltimore, Maryland 21224 (CITY) (STATE) [LOGO] A CoreStates Company

June 16, 1992 Congress Financial Corporation 1133 Avenue of the Americas New York, New York 10036 Gentlemen: This Agreement states the terms and conditions upon which, effective as of the date of acceptance by you, we may obtain loans and other financial accommodations from you for our general corporate and business purposes upon the security referred to herein. We shall be, if two or more in number, jointly and severally bound hereunder. See Rider annexed hereto for language to be inserted after asterisks in applicable Sections hereof. Section 1. DEFINITIONS. 1.1. All terms used herein which are defined in Article 1 or Article 9 of the Uniform Commercial Code ("UCC") shall have the meanings given therein, unless otherwise defined in this Agreement and all references to the plural herein shall also mean the singular. 1.2. "ACCOUNTS" shall mean all of our present and future accounts, contract rights, general intangibles, chattel paper, documents and instruments, as such terms are defined in the UCC, including, without limitation, all obligations for the payment of money arising out of our sale, lease or other disposition of goods or other property or rendition of services. 1.3. "ACCOUNT DEBTOR" shall mean each debtor or obligor in any way obligated on or in connection with any Account. 1.4. "COLLATERAL" shall have the meaning set forth in Section 4.1 hereof. 1.5. "ELIGIBLE ACCOUNTS" shall mean Accounts created by us in the ordinary course of business arising out of our sale of goods or rendition of services, which are and at all times shall continue to be acceptable to you in all respects. Standards of eligibility may be fixed and revised from time to time solely by you in your exclusive judgment. In determining eligibility, you may, but need not, rely on agings, reports and schedules of Accounts furnished by us, but reliance by you thereon from time to time shall not be deemed to limit your right to revise standards of eligibility at any time as to both our present and future Accounts. In general, an Account shall not be deemed eligible unless: (a) the Account Debtor on such Account is and at all times continues to be acceptable to you, (b) such Account complies in all respects with the representations, covenants and warranties hereinafter set forth, and (c) no more than 90 days have elapsed since the invoice date of such Account. 1.6. "EVENTS OF DEFAULT" shall have the meaning set forth in Section 8.1 hereof. 1.7. "MAXIMUM CREDIT" shall mean the amount of $10,000,000. 1.8. "NET AMOUNT OF ELIGIBLE ACCOUNTS" shall mean the gross amount of Eligible Accounts less sales, excise or similar taxes, and less returns, discounts, claims, credits and allowances of any nature at any time issued, owing, granted, outstanding, available or claimed. 1.9. "OBLIGATIONS" shall mean any and all loans, indebtedness, liabilities and obligations of any kind owing by us to you, however evidenced, whether as principal, guarantor or otherwise, whether arising under this Agreement, any supplement hereto, or otherwise, whether now existing or hereafter arising, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, original, renewed or extended, and whether arising directly or acquired from others (including, without limitation, your participations or interests in our obligations to others) and including, without limitation, your charges, commissions, interest, expenses, costs and * attorneys' fees chargeable to us in connection with all of the foregoing. 1.10. "RECORDS" shall have the meaning set forth in Section 4.1(f) hereof. 1.11. "RENEWAL DATE" shall have the meaning set forth in Section 9.1 hereof. Section 2. LOANS. 2.1. You shall, in your discretion, make loans to us from time to time, at our request, of up to eighty percent (80%) of the Net Amount of Eligible Accounts (or such greater or lesser percentage thereof as you shall in your sole discretion determine from time to time). 2.2. All loans shall be charged to a loan account in our name on your books. You shall render to us each month a statement of our loan account which shall be considered correct and deemed accepted by, and conclusively binding upon, us as an account stated, except to the extent that you receive a written notice of any specific exceptions by us thereto within thirty (30) days after the date of such statement. 2.3. Except in your sole discretion, the outstanding aggregate principal amount of all loans by you to us hereunder, under any supplement hereto or evidenced by any promissory note, * shall not exceed the Maximum Credit at any time. Without limiting your right to demand

payment of the Obligations, or any portion thereof, in accordance with any other terms of this Agreement, or any supplement hereto, in the event that the outstanding aggregate principal amount of loans by you to us exceeds the Maximum Credit or the formula set forth in Section 2.1 hereof, we shall remain liable therefor and the entire amount of such excess(es) shall, at your option, become immediately due and payable, upon your demand. 2.4. At your option, all principal, interest, fees, commissions, costs, expenses or other charges with respect to this Agreement or any supplement hereto (all of which shall be cumulative and not exclusive) and any and all loans and advances by you to us may be charged directly to our account maintained by you. 2.5. All loans shall be payable at your office specified above or at such other place as you may hereafter designate from time to time and, at your option and upon your request, we shall execute and deliver to you one or more promissory notes in form and substance satisfactory to you to further evidence such loans. Section 3. INTEREST AND FEES. 3.1. Interest shall be payable by us to you on the first day of each month upon the closing daily balances in our loan account for each day during the immediately preceding month, at a rate equal to two and one-half percent (2 1/2%) per annum in excess of the prime commercial interest rate (presently 6 1/2% per annum) from time to time publicly announced by Philadelphia National Bank, incorporated as CoreStates Bank, N.A., Philadelphia, Pennsylvania, whether or not such announced rate is the best rate available at such bank. The interest rate charged hereunder shall increase or decrease by an amount equal to each increase or decrease, respectively, in said prime loan rate, effective on the first day of the month after any change in said prime loan rate based on the prime loan rate in effect on the last day of the month in which any such change occurs. The rate of interest in effect hereunder on the date hereof, expressed in terms of simple interest, is nine percent (9%) per annum.* -1-

3.2 On and after the date of any Event of Default or termination or non-renewal hereof, interest on all outstanding unpaid Obligations shall accrue at a rate equal to two percent (2%) per annum in excess of the pre-default rate set forth above from the date of such Event of Default or termination or non-renewal, and all interest accruing hereunder shall thereafter be payable on demand. 3.3 Interest shall be calculated on the basis of a 360-day year and shall be included in each monthly statement of our loan account. You shall have the right, at your option, to charge all interest to our loan account on the first day of each month, and such interest shall be deemed to be paid by the first amounts subsequently credited thereto. 3.4 In no event shall charges constituting interest, payable by us under this Agreement, exceed the rate permitted under any applicable law or regulation, and if any part or provision of this Agreement is in contravention of any such law or regulation, such part or provision shall be deemed amended to conform thereto. 3.5 If the average outstanding daily principal balance of all loans by you to us under this Agreement or any supplement hereto in any calendar month shall be less than $8,000,000, we shall pay to you on or before the tenth (10th) day of the next succeeding calendar month an unused line fee equal to one half of one percent (1/2 of 1%) per annum upon the amount by which $8,000,000 exceeds the average outstanding daily principal balance of all such loans in respect of such month. 3.6 We shall pay to you an auditing fee in an amount equal to $2,000 on or before the tenth (10th) day of each calendar month, in respect of your services for the preceding calendar month, during the term, including all renewal terms, of this Agreement or so long as any of the Obligations are outstanding. 3.7 We shall pay to you a closing fee in an amount equal to $100,000, payable simultaneously with the execution hereof, which fee is fully earned as of the date hereof. Section 4. SECURITY INTEREST. 4.1 As security for the prompt performance, observance and payment in full of all Obligations, we hereby grant to you a continuing security interest in, a lien upon and a right of setoff against, and we hereby assign, transfer, pledge and set over to you the following (which together with any of our other property in which you may at any time have a security interest or lien, whether pursuant to this Agreement or any supplement hereto, or otherwise, are herein collectively referred to as the "COLLATERAL"): All present and future (a) Accounts; (b) moneys, securities and other property and the proceeds thereof, now or hereafter held or received by, or in transit to, you from or for us, whether for safekeeping, pledge, custody, transmission, collection or otherwise, and all of our deposits (general or special), balances, sums and credits with you at any time existing; (c) all of our right, title and interest, and all of our rights, remedies, security and liens, in, to and in respect of the Accounts and other Collateral, including, without limitation, rights of stoppage in transit, replevin, repossession and reclamation and other rights and remedies of an unpaid vendor, lienor or secured party, guaranties or other contracts of suretyship with respect to the Accounts, deposits or other security for the obligation of any Account Debtor, and credit and other insurance; (d) all of our right, title and interest in, to and in respect of all goods relating to, or which by sale have resulted in, Accounts including, without limitation, all goods described in invoices, documents, contracts or instruments with respect to, or otherwise representing or evidencing, any Accounts or other Collateral, including without limitation, all returned, reclaimed or repossessed goods; (e) all deposit accounts; *(f) all books, records, ledger cards, computer programs, and other property and general intangibles evidencing or relating to the Accounts and any other Collateral or any Account Debtor, together with the file cabinets or containers in which the foregoing are stored ("RECORDS"); (g) all other general intangibles of every kind and description, including without limitation, trade names and trademarks, and the goodwill of the business symbolized thereby, patents, copyrights, licenses and Federal, State and local tax refund claims of all kinds and (h) all proceeds of the foregoing, in any form, including, without limitation, any claims against third parties for loss or damage to or destruction of any or all of the foregoing. 4.2. We shall keep and maintain, at our cost and expense, satisfactory and complete books and records of all Accounts, all payments received or credits granted thereon, and all other dealings therewith. At such times as you may * request, we shall deliver to you all original documents evidencing the sale and delivery of goods or the performance of services which created any Accounts, including but not limited to all original contracts, orders, invoices, bills of lading, warehouse receipts, delivery tickets and shipping receipts, together with schedules describing the Accounts and/or written confirmatory assignments to you of each Account, in form and substance satisfactory to you and duly executed by us, together with such other information as you may * request. In no event shall the making or the failure to make or the content of any schedule or assignment or our failure to comply with the provisions hereof be deemed or construed as a waiver, limitation or modification of your security interest in, lien upon and assignment of the Collateral or our representations, warranties or covenants under this Agreement or any supplement hereto. Section 5. COLLECTION AND ADMINISTRATION. 5.1. Until our authority to do so is curtailed or terminated at any time by you, we shall, at our expense and on your behalf, collect, as your property and in trust for you, all remittances and all amounts unpaid on Accounts, and we shall not commingle such collections with our own funds. We shall on the day received remit all such collections to you in the form received duly endorsed by us for deposit with you, unless you shall direct us otherwise. All amounts collected on Accounts when received by you shall be credited to our loan account, after adding five (5) business days for collection, clearance and transfer of remittances, * conditional upon final payment to you **

5.2. You or your representatives shall at all times * have free access to and right of inspection of the Collateral and have full access to and the right to examine and make copies of our Records, to confirm and verify all Accounts, to perform general audits and to do whatever else you deem ** necessary to protect your interests. You may at any time remove from our premises or require us or any accountants and auditors employed by us to deliver any Records and you may, without cost or expense to you, use such of our personnel, supplies, computer equipment and space at our places of business as may be reasonably necessary for the handling of collections. 5.3. We shall immediately upon obtaining knowledge thereof report to you all reclaimed, repossessed or returned goods, Account Debtor claims and any other matter affecting the value, enforceability or collectibility of Accounts. * At your request, ** any goods reclaimed or repossessed by or returned to us will be set aside, marked with your name and held by us for your account and subject to your security interest. All claims and disputes relating to Accounts are to be promptly adjusted within a reasonable time, at our own cost and expense. You may, ** at your option, settle, adjust or compromise claims and disputes relating to Accounts which are not adjusted by us within a reasonable time. 5.4. We shall, in the manner requested by you from time to time, direct that all proceeds of Accounts, letters of credit, bankers' acceptances and other proceeds of Collateral shall be payable to a lock box or post office box designated by you and under your control and/or deposited into a blocked account under your control and/or deposited into an account maintained in your name and under your control and in connection therewith shall execute such lock box, blocked account or other agreement as you in your sole discretion shall specify. Section 6. REPRESENTATIONS, WARRANTIES AND COVENANTS. We hereby represent, warrant and covenant to you the following (which shall survive the execution and delivery of this Agreement), the truth and accuracy of which, or compliance with, being a continuing condition of the making of loans hereunder by you or under any supplement hereto: -2-

6.1. We are and shall be, with respect to all Collateral and all our inventory now existing or hereafter acquired, the owner of such Collateral and inventory free from any lien, security interest, claim or encumbrance of any kind, except in your favor and as otherwise consented to in writing by you, * and we shall defend the same against the claims of all persons. 6.2. We will not directly or indirectly sell, lease, transfer, abandon or otherwise dispose of all or any substantial portion of our property or assets or consolidate or merge with or into any other entity or permit any other entity to consolidate or merge with or into us. We will at all times preserve, renew and keep in full force and effect our existence as a * and the rights and franchises with respect thereto and continue to engage in business of the same type as we are engaged as of the date hereof. We shall give you thirty (30) days prior written notice of any proposed change in our * name which notice shall set forth the new name. 6.3. Our Records and chief executive office are maintained at the address referred to below. We shall not change such location without your prior written consent and prior to making any such change, we agree to execute any additional financing statements or other documents or notices which you may require. 6.4. We shall maintain our shipping forms, invoices and other related documents in a form satisfactory to you and shall maintain our books, records and accounts in accordance with generally accepted accounting principles consistently applied. We agree to furnish you monthly with accounts receivable agings, inventory reports (if requested by you), and interim financial statements (including balance sheet, statement of income and surplus account, and cash flow statements), and to furnish you, at any time or from time to time with such other information regarding our business affairs and financial condition as you may reasonably request, including, without limitation, balance sheets, statements of profit and loss, financial statements, cash flow and other projections, earnings forecasts, schedules, agings and reports. We hereby irrevocably authorize and direct all accountants, auditors or other third parties to deliver to you, at our expense, copies of our financial statements, papers related thereto, and other accounting records of any nature in their possession and to disclose to you any information they may have regarding our business affairs and financial condition. We shall furnish you with audited financial statements on an annual basis certified by independent public accountants selected by us and acceptable to you. All such statements and information shall fairly present our financial condition as of the dates and the results of our operations for the periods, for which the same are furnished. Any documents, schedules, invoices or other papers delivered to you may be destroyed or otherwise disposed of by you one (1) year after the date the same are delivered to you, * unless we make written request therefor and pay all expenses attendant to their return, in which event you shall return same when your actual or anticipated need therefor has ceased. 6.5. Each Eligible Account represents a valid and legally enforceable indebtedness based upon an actual and bona fide sale and delivery of goods or rendition of services in the ordinary course of our business * which has been finally accepted by the Account Debtor and for which the Account Debtor is unconditionally liable to make payment of the amount stated in each invoice, document or instrument evidencing the Eligible Account in accordance with the terms thereof, without offset, defense or counterclaim and will be paid in full at maturity. ** 6.6 All statements made and all unpaid balances appearing in the invoices, documents and instruments evidencing each Eligible Account are * true and correct and are in all respects what they purport to be and all signatures and endorsements that appear thereon are genuine and all signatories and endorsers have full capacity to contract and each Account Debtor is solvent and financially able to pay in full the Eligible Account when it matures. None of the transactions underlying or giving rise to any Account shall violate any state or federal laws or regulations, and all documents relating to the Accounts shall be legally sufficient under such laws or regulations and shall be legally enforceable in accordance with their terms and all recording, filing and other requirements of giving public notice under any applicable law have been duly complied with. 6.7. We shall duly pay and discharge all taxes, assessments, contributions and governmental charges * upon or against us or our properties or assets prior to the date on which penalties attach thereto. ** We shall be liable for any tax or penalty imposed upon any transaction under this Agreement or any supplement hereto or giving rise to the Accounts or any other Collateral or which you may be required to withhold or pay for any reason and we agree to indemnify and hold you harmless with respect thereto, and to repay to you on demand the amount thereof, and until paid by us such amount shall be added to and deemed part of your loans to us. 6.8. Except as otherwise disclosed to you in writing, there is no present investigation by any governmental agency pending or threatened against us and there is no action, suit, proceeding or claim pending or threatened against us or our assets or goodwill, or affecting any transactions contemplated by this Agreement, or any supplement hereto, or any agreements, instruments or documents delivered in connection herewith or therewith before any court, arbitrator, or governmental or administrative body or agency which if adversely determined with respect to us would result in any material adverse change in our business, properties, assets, goodwill, or condition, financial or otherwise. 6.9. * 6.10. We shall, at our expense, duly execute and deliver, or shall cause to be duly executed and delivered, such further agreements, instruments and documents, including, without limitation, additional security agreements, mortgages, deeds of trust, deeds to secure debt, collateral assignments, Uniform Commercial Code financing statements or amendments or continuations thereof, landlord's or mortgagee's waivers of liens and consents to the exercise by you of all your rights and remedies hereunder, under any supplement hereto or applicable law with respect to the Collateral and do or cause to be done such further acts as may be necessary or proper in your opinion * to evidence, perfect, maintain and enforce your security interest and the priority thereof in the Collateral and to otherwise effectuate the provisions or purposes of this Agreement

or any supplement hereto. Where permitted by law, we hereby authorize you to execute and file one or more Uniform Commercial Code financing statements signed only by you ** Section 7. SPECIFIC POWERS. 7.1. We hereby constitute you and your agent and any designee, as our attorney-in-fact, at our own cost and expense, to exercise at any time all or any of the following powers which, being coupled with an interest, shall be irrevocable until all Obligations have been paid in full: (a) to receive, take, endorse, assign, deliver, accept and deposit, in your or our name, * any and all checks, notes, drafts, remittances and other instruments and documents relating to the Collateral; (b) on or after the occurrence of an Event of Default to receive open and dispose of all mail addressed to us and to notify postal authorities to change the address for delivery thereof to such address as you may designate; (c) to transmit to Account Debtors notice of your interest therein and to request from such Account Debtors at any time, in your or our name or that of your designee, information concerning the Accounts and the amounts owing thereon; (d) on or after the occurrence of an Event of Default, to notify Account Debtors to make payment directly to you; (e) on or after the occurrence of an Event of Default, to take or bring, in your or our name, all steps, actions, suits or proceedings deemed by you necessary or desirable to effect collection of the Collateral; and (f) to execute in our name and on our behalf any UCC financing statements or amendments thereto. ** We hereby release you and your officers, employees and designees, from any liability arising from any act or acts under this Agreement or in furtherance thereof, whether of omission or commission, and whether based upon any error of judgment or mistake of law or fact. Section 8. EVENTS OF DEFAULT AND REMEDIES. 8.1. All Obligations shall be, at your option, immediately due and payable without notice or demand (notwithstanding any deferred or installment payments allowed, if any, by any instrument evidencing or relating to the Obligations) and any provision of this Agreement or any

supplement hereto, as to future loans and advances by you shall, at your option, terminate forthwith, upon the termination or non-renewal of this Agreement or upon the occurrence of any one or more of the following ("EVENTS OF DEFAULT"): (a) if we shall fail to pay to you any amounts owing to you under any Obligation,* or shall breach any of the terms, covenants, conditions or provisions of this Agreement, any supplement hereto or any other agreement between you and us or between any other third person or entity and us;** (b) if any guarantor, endorser or other person liable on the Obligations shall terminate or breach any of the terms, covenants, conditions or provisions of any guarantee, endorsement or other agreement of such person with, or in favor of, you or any other third person or entity; (c) if any representation, warranty, or statement of fact made to you at any time by us or on our behalf is false or misleading in any material respect; (d) if we, or any guarantor, endorser or other person liable on the Obligations, shall become insolvent, fail to meet our or their debts as they mature, call a meeting of creditors or have a creditors' committee appointed, make an assignment for the benefit of creditors, commence or have commenced against us or them any action or proceeding for relief under any bankruptcy law, or if a judgment is rendered against us or them,**** or if we or they suspend or discontinue doing business for any reason, or if a receiver, custodian or trustee of any kind is appointed for us or them or any of our or their respective properties; (e) if there shall be a material adverse change in our business, assets or condition (financial or otherwise) from the date hereof; (f) if there is any change in our majority control or ownership; or (g) if at any time you shall, in your sole discretion,***** consider the Obligations insecure or any part of the Collateral unsafe, insecure or insufficient and we shall not on your demand furnish other Collateral or make payment on account, satisfactory to you. 8.2. Upon the occurrence of any Event of Default and at any time thereafter, you shall have the right (in addition to any other rights you may have under this Agreement, any supplement hereto or otherwise) without further notice to us, to appropriate, set off and apply to the payment of any or all of the Obligations, any or all Collateral, in such manner as you shall in your sole discretion determine, to enforce payment of any Collateral, to settle, compromise or release in whole or in part, any amounts owing on the Collateral, to prosecute any action, suit or proceeding with respect to the Collateral, to extend the time of payment of any and all Collateral, to make allowances and adjustments with respect thereto, to issue credits in your or our name, to sell, assign and deliver the Collateral (or any part thereof), at public or private sale, at broker's board, for cash, upon credit or otherwise, at your sole option and discretion, and you may bid or become purchaser at any such sale, if public, free from any right of redemption which is hereby expressly waived. 8.3. In the event you seek to take possession of all or any portion of the Collateral by judicial process, we irrevocably waive: (a) the posting of any bond, surety or security with respect thereto which might otherwise be required, (b) any demand for possession prior to the commencement of any suit or action to recover the Collateral, and (c) any requirement that you retain possession and not dispose of any Collateral until after trial or final judgment. 8.4. We agree that the giving of * days notice by you, sent by ** mail, postage prepaid, to our address set forth below, designating the place and time of any public sale or of the time after which any private sale or other intended disposition of the Collateral is to be made, shall be deemed to be reasonable notice thereof and we waive any other notice with respect thereto. 8.5. The net cash proceeds resulting from the exercise of any of the foregoing rights or remedies shall be applied by you to the payment of the Obligations in such order as you may elect, and we shall remain liable to you for any deficiency. Without limiting the generality of the foregoing, if you enter into any credit transaction, directly or indirectly, in connection with the disposition of any Collateral, you shall have the option, at any time, in your sole discretion, to reduce the Obligations by the principal amount of such credit transaction or to defer the reduction thereof until actual receipt by you of cash or other immediately available funds in connection therewith. 8.6. The enumeration of the foregoing rights and remedies is not intended to be exclusive, and such rights and remedies are in addition to and not by way of limitation of any other rights or remedies you may have under the UCC or other applicable law. You shall have the right, in your sole discretion, to determine which rights and remedies, and in which order any of the same, are to be exercised, and to determine which Collateral is to be proceeded against and in which order, and the exercise of any right or remedy shall not preclude the exercise of any others, all of which shall be cumulative. 8.7. No act, failure or delay by you shall constitute a waiver of any of your rights and remedies. No single or partial waiver by you of any provision of this Agreement or any supplement hereto, or breach or default thereunder, or of any right or remedy which you may have shall operate as a waiver of any other provision, breach, default, right or remedy or of the same provision breach, default, right or remedy on a future occasion. 8.8. We waive presentment, notice of dishonor, protest and notice of protest of all instruments included in or evidencing any of the Obligations or the Collateral and any and all notices or demands whatsoever (except as expressly provided herein). You may, at all times, proceed directly against us to enforce payment of the Obligations and shall not be required to take any action of any kind to preserve, collect or protect your or our rights in the Collateral. Section 9. EFFECTIVE DATE; TERMINATION; COSTS. 9.1. This Agreement shall become effective upon acceptance by you and shall continue in full force and effect for a term ending two (2) years from the date hereof (the "RENEWAL DATE") and from year to year thereafter, unless sooner terminated pursuant to the terms hereof. Either party may terminate this Agreement on the Renewal Date or on the anniversary of the Renewal Date in any year by giving the other party at least sixty (60) days prior written notice by registered or certified mail, return receipt requested, and, in addition, you shall have the right to

terminate this Agreement immediately at any time upon the occurrence of an Event of Default. No termination of this Agreement, however, shall relieve or discharge us of our duties, obligations and covenants hereunder until all Obligations have been paid in full, and your continuing security interest in the Collateral shall remain in effect until such Obligations have been fully discharged. 9.2. If you terminate this Agreement upon the occurrence of an Event of Default or at our request, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of your lost profits as a result thereof, we hereby agree that we shall pay to you, upon the effective date of such termination, an early termination fee in an amount equal to: * Such termination fee shall be presumed to be the amount of damages sustained by said early termination and we agree that it is reasonable under the circumstances currently existing. The early termination fee provided for in this paragraph 9.2 shall be deemed included in the Obligations. 9.3. This Agreement, any supplement hereto, and any agreements, instruments or documents delivered or to be delivered in connection herewith represent our entire agreement and understanding concerning the subject matter hereof and thereof, and supersede all other prior and contemporaneous agreements, understandings, negotiations and discussions, representations, warranties, commitments, offers, contracts, whether oral or written. 9.4. No provision hereof shall be modified or amended orally or by course of conduct but only by a written instrument expressly referring hereto signed by both parties. 9.5. Upon your request we shall pay to you, or reimburse you for, all sums, costs and expenses which you may pay or incur in connection with or related to the negotiation, preparation, consummation, administration and enforcement of this Agreement, any supplement hereto, and -4-

all other agreements, instruments and documents in connection herewith and therewith, and the transactions contemplated hereunder and thereunder, together with any amendments, supplements, consents or modifications which may be hereafter made or entered into in respect hereof or thereof, and all efforts made to defend, protect or enforce the security interest granted herein or therein or in enforcing payment of the Obligations, including without limitation, appraisal fees, filing fees and taxes, title insurance premiums, recording taxes, expenses for searches, expenses heretofore incurred by you and from time to time hereafter during the course of periodic field examinations of the Collateral and our operations, wire transfer fees, check dishonor fees, the * fees and disbursements of counsel to you, all fees and expenses for the service and filing of papers, premiums on bonds and undertakings, fees of marshalls, sheriffs, custodians, auctioneers and others, travel expenses and all court costs and collection charges, all of which shall be part of the Obligations and shall accrue interest after demand thereof at a rate equal to the highest rate then payable on any of the Obligations. Section 10. NOTICES. 10.1. All notices, requests and demands to or upon the respective parties hereto shall be deemed to have been duly given or made: if by hand, telex, telegram or facsimile, immediately upon sending; if by Federal Express, Express Mail or any other overnight delivery service, one (1) day after dispatch; and if mailed by certified mail, return receipt requested, five (5) days after mailing. All notices, requests and demands are to be given or made to the respective parties at the address (or to such other addresses as either party may designate by notice in accordance with the provisions of this paragraph) set forth herein. Section 11. WAIVER OF JURY TRIAL; JURISDICTION; CHOICE OF LAW. 11.1. We and you each hereby waive all rights to a trial by jury in any action or proceeding of any kind arising out of or relating to this Agreement, any supplement hereto, the Obligations, the Collateral or any such other transaction. We hereby waive rights of setoff and rights to interpose counterclaims in the event of any litigation with respect to any matter connected with this Agreement, any supplement hereto, the Obligations, the Collateral or any other transaction between the parties and we hereby irrevocably consent and submit to the non-exclusive jurisdiction of the Supreme Court of the State of New York and the United States District Court for the Southern District of New York in connection with any action or proceeding of any kind arising out of or relating to this Agreement, any supplement hereto, the Obligations, the Collateral or any such other transaction. 11.2. In any such litigation we waive personal service of any summons, complaint or other process and agree that service thereof may be made by certified or registered mail directed to us at our address set forth below. Within * days after such mailing, we shall appear in answer to such summons, complaint or other process, failing which we shall be deemed in default and judgment may be entered by you against us for the amount of the claim and other relief requested therein. 11.3. This Agreement and all transactions thereunder shall be deemed to be consummated in the State of New York and shall be governed by and interpreted in accordance with the laws of that State. If any part or provision of this Agreement is invalid or in contravention of any applicable law or regulation, such part or provision shall be severable without affecting the validity of any other part or provision of this Agreement. Very truly yours, I.C. ISAACS & COMPANY L.P. By: ISBUYCO, INC. General Partner
By: /s/ Robert J. Arnot ------------------------Title: Chairman ----------------------

Address: 3840 Bank Street Baltimore, Maryland 21224 Accepted at New York, New York on June 16, 1992 CONGRESS FINANCIAL CORPORATION
By: /s/ Steven Stone --------------------------Title: VP ------------------------

-5-

RIDER TO ACCOUNTS FINANCING AGREEMENT [SECURITY AGREEMENT] between Congress Financial Corporation and I.C. Isaacs & Company L.P. This Rider sets forth modifying terms to the respective indicated Sections of the Agreement corresponding to the asterisks in such Sections of the Agreement. Section 1.9 * reasonable Section 2.3 * and other financial accommodations extended by you to us or for our account, including, without limitation the indebtedness evidenced by the Term Promissory Note in the original principal amounts of $1,000,000 executed and delivered by us to you of even date hereof and the outstanding balance of all letters of credit, guaranties and indemnities issued or caused to be issued by you for our account, Section 3.1 * In the event that the outstanding aggregate amount of loans by you to us, together with the outstanding principal of other financial accommodations extended by us to you or for our account, exceeds the Maximum Credit, or the formula set forth in Section 2.1 hereof or any other formula or sublimit set forth in any supplement hereto, interest on the entire amount of such excess(es) shall be payable at the rate set forth in Section 3.2 hereof (whether or not such excess(es) arise or are made with or without your knowledge or consent). Section 4.1 * relating to the proceeds of Collateral Section 4.2 * reasonably Section 5.1 * , except for federal funds, as to which two (2) business days shall be added, ** , provided, however, solely for purposes of determining our loan availability under the lending formulas hereunder, such collections shall be credited to our loan account as of the next business day after the date of receipt by you. Section 5.2 * during normal business hours or upon reasonable notice at other times

** reasonably Section 5.3 * (collectively, "Claims and Deductions") in any material amount relative to the amount of unpaid Accounts and, within ten (10) days of the issuance of a credit or creation of a reserve with respect to all Claims and Deductions in the ordinary course of our business, report to you in writing the amounts thereof. ** on or after the occurrence of an Event of Default, Section 6.1 * including, without limitation, in the Covenant Supplement hereto, Section 6.2 * limited partnership Section 6.4 * , PROVIDED, HOWEVER, you shall not destroy any original invoices or other original documentation, books or records delivered by us to you evidencing any Account without giving us thirty (30) days prior written notice thereof, Section 6.5 * , to the best of our knowledge, ** In the event that any dispute arises pertaining to an Account previously classified as an Eligible Account or the Account Debtor obligated thereon is insolvent, such Account shall no longer constitute an Eligible Account for purposes hereof. Section 6.6 * in all material respects Section 6.7 * , except for any of the foregoing which on a combined basis do not exceed the aggregate amount of $10,000 at any time and which are not a lien on any of our properties, ** , PROVIDED HOWEVER, that if such taxes, assessments, contributions and governmental charges are being contested in food faith by us by appropriate proceedings diligently pursued, prior to the creation of any lien on our properties with respect thereto or commencement of foreclosure or other similar proceedings, and the same are adequately escrowed for or reserved against in you judgment, exercised in good faith, failure to pay and discharge the same shall not constitute an Event of Default hereunder -2-

Section 6.9 * The execution, delivery and performance of this Agreement, any supplement hereto, or any agreements, instruments and documents executed and delivered in connection herewith, are within our limited partnership powers, have been duly authorized, are not in contravention of law or the terms of our Certificate of Limited Partnership, limited partnership agreement or any papers relating to our formation or internal governance, or of any indenture, agreement or undertaking to which we are a party or by which we are bound. Section 6.10 * , exercised in good faith, ** with respect to the Collateral. Section 7.1 * , with any such deposits in your name being credited to our loan account(s) maintained by you, ** relating to the Collateral Section 8.1 * which remains unpaid five (5) days after the due date or maturity date thereof ** and, except as to any breaches resulting from our intentional misconduct or actions or inactions which by their nature are not capable of being cured, which remain uncured fifteen (15) days after the occurrence thereof *** , except if, within fifteen (15) days after such termination or breach by such guarantor, you receive a new or additional, written guarantee (in form and substance similar to the guarantee which has been terminated or is in default) from one or more of the other individual guarantors of the Obligations or any other person, reasonably acceptable to you, in an amount not less than the maximum liability under the guarantee which has been terminated or is in default **** which, together with all other unsatisfied judgments against us or them, exceeds $50,000 in the aggregate or which is a lien against any of our properties ***** exercised in good faith Section 8.4 * ten (10) ** certified Section 9.2 * (a) four (4%) percent of the Maximum Credit if such termination occurs on or prior to the first anniversary of this Agreement, or (b) three (3%) percent of the Maximum Credit -3-

if such termination occurs after the first anniversary of this Agreement but prior to the second anniversary of this Agreement. Section 9.5 * reasonable Section 11.2 * forty-five (45) SRK42/I11 -4-

COVENANT SUPPLEMENT TO ACCOUNTS FINANCING AGREEMENT [SECURITY AGREEMENT] June 16, 1992 Congress Financial Corporation 1133 Avenue of the Americas New York, New York 10036 Gentlemen: This Covenant Supplement ("Supplement") is a supplement to the Accounts Financing Agreement [Security Agreement] between I.C. Isaacs & Company L.P., a Delaware limited partnership, (together with its successors and assigns, "Borrower") and Congress Financial Corporation, a California corporation (together with its successors and assigns, "Congress"), dated as of the date hereof (the "Accounts Agreement", and together with this Supplement, any and all other supplements thereto, and all other agreements, documents and instruments now or at any time hereafter executed and/or delivered in connection therewith or related thereto, including, without limitation the Term Note and the Mortgages (each as hereinafter further defined) as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, individually and collectively, the "Financing Agreements"). This Supplement is (a) hereby incorporated into the Accounts Agreement, (b) made a part thereof and (c) subject to the terms, conditions, covenants and warranties thereof. All terms (including capitalized terms) used herein shall have the meanings ascribed to them respectively in the Accounts Agreement, unless otherwise defined in this Supplement. Section 1. ADDITIONAL DEFINITIONS As used herein: 1.1 "Affiliate" shall mean, with respect to a specified Person, any other Person (a) who, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with such Person, or (b) who is a limited partner, general partner (including managing general partner), director, officer, shareholder or employee of such Person.

1.2 "Arnot" shall mean Robert Arnot. 1.3 "Brashers" shall mean Gary Brashers. 1.4 "Capital Expenditures" shall mean all expenditures for, or contracts for expenditures for, any fixed assets or improvements, or for replacements, substitutions or additions thereto, which have a useful life of more than one (1) year, including, but not limited to, the direct or indirect acquisition of such assets by way of increased product service charges, offset items or otherwise, and shall include capitalized lease payments. 1.5 "CEA/EEI" shall mean CEA/EEI Portfolio Liquidation, L.P. a Delaware limited partnership and its successors and assigns. 1.6 "Chase" shall mean Chase Manhattan Bank (National Association), a national banking corporation and its successors and assigns. 1.7 "EEI" shall mean EEI Portfolio Liquidation L.P., a Delaware limited partnership and its successors and assigns. 1.8 "Excess Availability" shall mean at any time an amount equal to the loan availability from Congress, as determined by Congress, pursuant to the advance formula with respect to Eligible Accounts of Borrower, subject to the Maximum Credit or any sublimits with respect thereto, after deducting the amount of all then outstanding Obligations and reserves under and pursuant to the Financing Agreements. 1.9 "Financing Agreements" shall have the meaning set forth in the first paragraph hereof. 1.10 "GAAP" shall mean generally accepted accounting principles as in effect on the date hereof consistently applied. 1.11 "Hechler" shall mean Ira Hechler. 1.12 "Indebtedness" shall mean, as to any Person, all items which, in accordance with GAAP, would be included in determining total liabilities shown on the liability side of its balance sheet as at the date such Indebtedness is to be calculated and, in any event, shall include any liabilities secured by any mortgage, pledge, lien or security interest existing on such person's owned or acquired property. -2-

1.13 "Keller" shall mean Stanley Keller. 1.14 "Lear" shall mean Gerald Lear. 1.15 "Mortgages" shall mean that certain Mortgage and Security Agreement with respect to Borrower's Milford, Delaware premises, that certain Deed of Trust with respect to Borrower's Baltimore, Maryland premises, that certain Collateral Leasehold Assignment with respect to Borrower's Carthage, Mississippi premises, that certain Leasehold Assignment with respect to Borrower's Newton, Mississippi premises and that certain Collateral Leasehold Assignment with respect to Borrower's Raleigh, Mississippi premises as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed or replaced. 1.16 "NatWest" shall mean National Westminister Bank USA, a national banking corporation and its successors and assigns. 1.17 "Net Worth" shall mean, as to any Person at any time, in accordance with GAAP, the amount equal to the difference between: (a) the aggregate net book value of all assets, calculating the book value of inventory for this purpose on a first-in-first-out basis, after deducting from such book values all appropriate reserves (including all reserves for doubtful receivables, bad debts, obsolescence, depreciation and amortization) and (b) the aggregate Indebtedness of such Person (including tax and other proper accruals). 1.18 "Payment Blockage Event" shall mean the occurrence of any one or more of the following: (a) Borrower shall fail to pay to Congress when due any amounts owing under the Obligations; (b) Borrower shall breach any of the material representations, warranties or covenants contained in the Financing Agreements relating to any material part of the Collateral; or (c) Borrower shall fail to comply with any of the provisions of Sections 4.12, 4.13, 4.14 or 4.15 of this Supplement; or (d) Borrower shall fail to deliver to Congress, within the required time period, any financial statements required to be delivered by Borrower pursuant to Section 6.4 of the Accounts Agreement; or (e) Any Event of Default arising from the willful misconduct of the Borrower; or -3-

(f) Borrower shall become insolvent, fail to pay its debts as they mature, call a meeting of its creditors or have a creditors' committee appointed, make an assignment for the benefit proceeding for relief under any bankruptcy law, or Borrower shall suspend or discontinue doing business, or a receiver, custodian or trustee of any kind is appointed for Borrower or all or any party of its properties. 1.19 "Permitted Lien" shall have the meaning set forth in Section 4.4 hereof. 1.20 "Person" or "person" shall mean any individual, sole proprietorship, limited partnership, general partnership, corporation (including a business trust), unincorporated association, joint stock corporation, trust, joint venture or other entity or government or any agency or instrumentality or political subdivision thereof. 1.21 "Subordinated Notes" shall mean those certain notes further described on Exhibit A annexed hereto and made a part hereof. 1.22 "Subsidiary" or "subsidiary" shall mean any corporation, association or organization, active or inactive, as to which more than fifty (50%) percent of the outstanding voting stock or shares or shares or interests shall now or hereafter be owned or controlled, directly or indirectly by any Person, any Subsidiary of such Person, or any Subsidiary of such Subsidiary. 1.23 "Sunburst" shall mean Sunburst Bank, a Mississippi banking association and its successors and assigns. 1.24 "Term Loan" shall mean the outstanding Obligations owed to Congress by Borrower related to the secured term loan made by Congress to Borrower as provided for in Section 3.2 hereof. 1.25 "Term Note" shall mean the Term Promissory Note, dated of even date herewith, made by Borrower and payable to Lender in the original principal amount of One Million ($1,000,000) Dollars, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. 1.26 "Tradestyle" shall have the meaning set forth in Section 4.3 hereof. 1.27 "Wielepski" shall mean Eugene Wielepski. 1.28 "Working Capital" shall mean, as to any Person, at any time, the amount equal to the difference between: (a) the aggregate net book value of all assets of such Person and its subsidiaries, on a consolidated basis, which would, in accordance with GAAP, be classified as current assets, calculating the book -4-

value of inventory for this purpose on a first-in-first-out basis), and (b) all Indebtedness of such Person and its subsidiaries, on a consolidated basis, which would, in accordance with GAAP, be classified as current liabilities. Section 2. ADDITIONAL CONDITIONS PRECEDENT Each of the following, unless specifically waived by Congress in writing, is an additional condition precedent to Congress making any loans to Borrower pursuant to the Accounts Agreement, this Agreement and any other supplement thereto and the other Financing Agreements, including the making of the initial and any future loans (including the Term Loan), advances and other financial accommodations contemplated hereunder or thereunder: 2.1 Congress shall have received, in form and substance satisfactory to Congress, all consents, waivers, releases, terminations and other documents as Congress may request to evidence and effectuate the termination and release by NatWest, Chase and/or Sunburst of any and all Indebtedness and guarantees owed by Borrower to NatWest, Chase and/or Sunburst, respectively, and any and all security interests and liens of NatWest, Chase and/or Sunburst, respectively, in the Collateral, including but not limited to, UCC termination statements for all UCC financing statements and releases, reassignments and/or satisfactions of all real property mortgages, deeds of trust and assignments of leaseholds previously filed or recorded by NatWest, Chase and/or Sunburst, as secured party, against Borrower, as debtor; 2.2 Congress shall have received, in form and substance satisfactory to Congress, evidence that Borrower has exercised its purchase option and repurchased the limited partnership interests of EEI and CEA/EEI in Borrower, together with all indebtedness owed to EEI and CEA/EEI by Borrower, and, in full consideration for such purchases, has issued subordinated notes in the aggregate principal amount of $2,600,000 to EEI and CEA/EEI, payment of such notes being subordinated to the Obligations, and related matters duly authorized, executed and delivered by EEI, CEA/EEI and Borrower; 2.3 Borrower shall have an Excess Availability, as determined by Congress as of the date hereof in an amount not less than $750,000; 2.4 Congress shall have received, in form and substance satisfactory to Congress, a Limited Guarantee and Waiver in favor of Congress regarding the Obligations of Borrower to Congress by each of Arnot, Brashers, Keller, and Lear, each limited to $55,000 of the Obligations, and of Wielepski, limited to $30,000 of the Obligations, and of Hechler, limited to $750,000 of the Obligations; -5-

2.5 Congress shall have received, in form and substance satisfactory to Congress, Subordination Agreements in favor of Congress executed by the payees or other holders of each of the Subordinated Notes; 2.6 Congress shall have received, in form and substance satisfactory to Congress, all consents, waivers, acknowledgements and other agreements from third persons which Congress may deem necessary or desirable, in its good faith judgment, in order to permit, protect and perfect its security interests in and liens upon the Collateral or to effectuate the provisions or purposes of this Agreement and the other Financing Agreements, including, without limitation, waivers by lessors, mortgagees and warehousemen of any security interests, liens or other claims by such person to the Collateral and agreements permitting Congress access to the premises to exercise its rights and remedies and otherwise deal with the Collateral; 2.7 Congress shall have received evidence of insurance and loss payee endorsements in favor of Congress required hereunder and under the other Financing Agreements, including without limitation, title insurance with respect to the Mortgages, as required by Congress, in form and substance satisfactory to Congress, and certificates of insurance policies and/or endorsements naming Congress as loss payee, all at Borrower's cost and expense; 2.8 Congress shall have received, in form and substance satisfactory to Congress, such opinion letters of counsel to Borrower with respect to the Financing Agreements and such other matters as Congress may reasonably request; PROVIDED, that such opinion letters shall only be a condition to the initial advance under the Accounts Agreement and the initial Credit provided under the Trade Financing Supplement thereto; 2.9 the other Financing Agreements and all instruments and documents hereunder and thereunder shall have been duly executed and delivered to Congress, in form and substance reasonably satisfactory to Congress; 2.10 all representations and warranties contained herein and in the other Financing Agreements shall be true and correct in all material respects; and 2.11 no Event of Default shall have occurred and no event shall have occurred or condition be existing which, with notice or passage of time or both, would constitute an Event of Default. -6-

Section 3. ADDITIONAL LOAN PROVISIONS 3.1 TERMINATION. Notwithstanding anything to the contrary contained in in Section 9 of the Accounts Agreement, the Accounts Agreement may not be terminated by Borrower pursuant to Section 9.1 or at Borrower's request pursuant to Section 9.2 thereof unless each of the other Financing Agreements is terminated simultaneously therewith in accordance with their terms. No termination of the Financing Agreements shall relieve or discharge Borrower of its duties, obligations and covenants until all Obligations have been indefeasibly paid in full and Congress' continuing security interests shall remain in effect until such Obligations have been so discharged. 3.2 TERM LOAN. Subject to, and upon the terms and conditions contained herein, Congress shall make the Term Loan to Borrower in the original principal amount of One Million ($1,000,000) Dollars. The Term Loan shall be (a) evidenced by the Term Note, (b) repaid, together with interest and other amounts due thereunder, in accordance with the terms and provisions of the Term Note and the other Financing Agreements, and (c) secured by all of the Collateral. 3.3 RESERVES. Without limiting any other rights or remedies of Congress hereunder or under the other Financing Agreements, the availability of all loans, advances and other financial accommodations otherwise available to Borrower by Congress shall be subject to Congress' continuing right, in its discretion, exercised in good faith, to withhold a reserve, and to increase and decrease such reserve from time to time, if and to the extent that, in Congress' discretion, exercised in good faith, Congress believes such reserve is necessary to protect Congress against possible non-payment for any reason by any Account Debtor, possible non-payment of any Indebtedness owed by Borrower to third parties, or in respect of any state of facts which does or would, with the passage of time or notice or both, constitute an Event of Default under any of the Financing Agreements. Section 4. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS In addition to the representations, warranties and covenants contained in the Accounts Agreement and the other Financing Agreements, Borrower hereby represents, warrants and covenants to Congress the following, the truth and accuracy of which in all material respects are, and compliance therewith being, in accordance with Section 2.10 hereof, a continuing condition of the making of loans and providing other financial accommodations to Borrower by Congress under the Accounts Agreement or under any supplement thereto: -7-

4.1 USE OF PROCEEDS AND OTHER FINANCIAL ACCOMMODATIONS. Borrower shall use a portion of the initial proceeds of the loans and advances by Congress to repay all of the outstanding and unpaid Indebtedness consisting of loans to Borrower by NatWest, Chase and Sunburst, respectively. All other loans, advances and other financial accommodations provided by Congress to Borrower pursuant to the Accounts Agreements, this Agreement and any other supplement thereto and the other Financing Agreements shall be used by Borrower for general operating and working capital purposes of Borrower and such other purposes as are permitted hereunder. 4.2 SUBSIDIARIES. (a) Borrower does not have any Subsidiaries as of the date hereof except for Topper Fabrics, Inc., which is an inactive corporation with no material assets. (b) Borrower shall not form or acquire any Subsidiaries without the prior written consent of Congress. In the event Congress so consents, promptly upon such formation or acquisition, Borrower will execute and deliver, or will cause any such Subsidiary to execute and deliver, to Congress, in form and substance satisfactory to Congress and its counsel: (i) an absolute and unconditional guarantee of payment of any and all present and future Obligations of Borrower to Congress, (ii) a general security agreement granting to Congress a first and only lien (except as otherwise consented to by Congress in writing and as permitted pursuant to Section 4.4 hereof) upon all of such Subsidiary's assets, (iii) related Uniform Commercial Code Financing Statements, and (iv) such other agreements, documents and instruments as Congress may require, including, but not limited to, supplements and amendments hereto and other loan agreements or instruments evidencing the obligations and Indebtedness of such new Subsidiary to Congress. 4.3 TRADE NAMES. Some of Borrower's invoices may from time to time be rendered to customers under the trade names or tradestyles listed on Exhibit B hereto (which, together with any new trade names or tradestyles used after the date hereof are referred to collectively as the "Tradestyles" and individually, as a "Tradestyle"). As to the Tradestyles used by it, and the related Accounts, Borrower hereby agrees that: (a) each Tradestyle is a trade name and style (and not an independent corporation or other legal entity) by which Borrower may identify and sell certain of its goods or services and conduct a portion of its business; (b) all Accounts and proceeds thereof (including any returned merchandise) which arise from the sale of goods or rendition of services invoiced under the Tradestyle shall be -8-

owned solely by Borrower and shall be subject to the security interests of Congress and other terms of the Accounts Agreement and the other Financing Agreements; (c) all assignments or confirmatory schedules of Accounts delivered to Congress by Borrower, whether in the name of any of the Tradestyles or Borrower, shall be executed by Borrower as owner of such assigned Accounts; and (d) new Tradestyles may be used by Borrower, but only if (i) Congress is given at least thirty (30) days prior written notice of the intended use of any new Tradestyle, which notice shall set forth the proposed new Tradestyle and (ii) such supplemental financing statements as Congress shall request shall be executed and delivered by Borrower for filing by Congress prior to the use of such new Tradestyle. 4.4 LIMITATION ON LIENS. Borrower shall not, and Borrower shall not permit any subsidiary to create or suffer to exist any mortgage, pledge, security interest, lien, encumbrance, defect in title or restriction upon the use of their real or personal properties, including, without limitation its existing and hereafter acquired inventory, whether now owned or hereafter acquired, except the following, each being a "Permitted Lien": (a) the liens or security interests in favor of Congress; (b) tax, mechanics' and other like statutory liens arising in the ordinary course of Borrower's or its Subsidiaries' respective businesses to the extent (i) such liens secure Indebtedness which is not overdue or (ii) until foreclosure or similar proceedings shall have been commenced, such liens secure Indebtedness relating to claims or liabilities which are being contested in good faith by appropriate proceedings available to Borrower or its subsidiaries prior to the commencement of foreclosure or other similar proceedings and are adequately escrowed for or reserved against in Congress' judgment; (c) purchase money mortgages or other purchase money liens or security interests upon any specific fixed assets hereafter acquired, or mortgages, liens or security interests existing on such such future fixed assets at the time of acquisition thereof (including, without limitation, capitalized or finance leases), PROVIDED, THAT, (i) no such purchase money or other mortgage, lien or security interest (or capitalized or finance lease, as the case may be) with respect to specific future fixed assets or as refinanced shall extend to or cover any other property, other than the specific fixed assets so acquired and normal and customary parts and accessions to such specific fixed assets, or acquired subject to such mortgage, lien or security interest (or lease) and the proceeds thereof, (ii) such mortgage, lien or security interest secures the obligation to pay -9-

the purchase price of such specific fixed assets only (or the obligations under the capitalized or finance lease), (iii) the principal amount secured thereby shall not exceed one hundred (100%) percent of the cost of the fixed assets so acquired and (iv) the acquisition of such specified fixed assets shall not violate the provisions of Section 4.12 hereof; and (d) the existing liens, encumbrances or security interests described on Exhibit C hereto. 4.5 INDEBTEDNESS. Borrower shall not, and shall not permit any Subsidiary to, create, incur, assume or permit to exist, contingently or otherwise, any Indebtedness, except: (a) Indebtedness to Congress; (b) Indebtedness consisting of unsecured current liabilities incurred in the ordinary course of its business which are not unpaid more than thirty (30) days after their original or extended due dates; (c) Indebtedness incurred in the ordinary course of its business secured only by liens permitted under Section 4.4(b) and 4.4(c) hereof; (d) Indebtedness of Borrower, evidenced by the Subordinated Notes, which Indebtedness is, and shall be, in all respects, subject and subordinate to the Obligations; PROVIDED, THAT,: (i) Borrower shall not, directly or indirectly, (A) make any payments in respect of such Indebtedness except as permitted pursuant to Section 4.15 hereof, (B) redeem, retire, defease, purchase or otherwise acquire such Indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, or (C) amend, modify, alter or change the terms of such Indebtedness or any agreement or instrument related thereto in any material respect; and (ii) Borrower shall furnish to Congress all notices, demands or other materials concerning such Indebtedness, after receipt thereof or sent by it concurrently with the sending thereof, as the case may be; and (e) Indebtedness existing on the date hereof which is described on Exhibit D hereto; PROVIDED, THAT: (i) Borrower and its Subsidiaries may only make regularly scheduled payments of principal and interest in respect of such Indebtedness as set forth in Exhibit D; (ii) Borrower and its Subsidiaries shall not, directly or indirectly, (A) make any prepayments or other non-mandatory payments in respect of such Indebtedness or (B) redeem, retire, defease, purchase or otherwise acquire such Indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, or (C) materially amend, modify, alter or change the terms of such Indebtedness or any agreement or instrument related thereto; and (iii) Borrower and its Subsidiaries shall furnish to -10-

Congress all notices, demands or other materials concerning such Indebtedness, after receipt thereof or sent by any of them concurrently with the sending thereof, as the case may be. 4.6 TRANSACTIONS WITH AFFILIATES. Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly: (a) purchase, acquire or lease any property or receive any services from, or sell, transfer or lease any property or services to, any Affiliate of Borrower, except on prices and terms no less favorable than would have been obtained in an arm's length transaction with a non-affiliated person; or (b) lend or advance money or property to any Affiliate or pay or agree to be liable for the Indebtedness of any Affiliate; or (c) make any payment of salaries, management fees or the principal amount of or interest on any Indebtedness owing to any Affiliate of Borrower; PROVIDED, HOWEVER, this Section 4.6(c) shall not restrict or prohibit payments of salaries or other customary compensation in reasonable amounts to any person who is an employee of Borrower notwithstanding that such person may be an Affiliate of Borrower. 4.7 LOANS, INVESTMENTS, GUARANTIES, ETC. Borrower will not, and will not permit any Subsidiary to, directly or indirectly, make any loans or advance money or property to any Person, or invest in (by capital contribution or otherwise) or purchase or repurchase the stock or Indebtedness or all or a substantial part of the assets or property of any Person, or guarantee, assume, endorse, or otherwise become responsible for (directly or indirectly) the Indebtedness, performance, obligations or dividends of any Person or agree to do any of the foregoing, EXCEPT: (a) distributions described in Section 4.10 of this Agreement; (b) guarantees by any Affiliate or Subsidiary of Borrower of the Obligations in favor of Congress; (c) the endorsement of instruments for collection or deposit in the ordinary course of business; (d) after written notice thereof to Congress, investments in the following instruments, which shall be pledged and delivered to Congress upon Congress' request, (i) marketable obligations issued or guaranteed by the United States of America or an instrumentality or agency thereof, maturing not more than one (1) year after the date of acquisition thereof, (ii) certificates of deposit or other obligations maturing not more than one (1) year after the date of acquisition thereof issued by -11-

any bank or trust company organized under the laws of and located in the United States of America or any State thereof and having capital, surplus and undivided profits of at least $50,000,000, and (iii) open market commercial paper with a maturity not in excess of two hundred seventy (270) days from the date of acquisition thereof which have the highest credit rating by either Standard & Poor's Corporation or Moody's Investors Service, Inc.; and (e) loans and advances permitted under Section 4.6(b) and Section 4.6(c) of this Agreement. 4.8 ENVIRONMENTAL COMPLIANCE. The representations, warranties and covenants of this Section 4.8 are made to the best of Borrower's knowledge, information and belief. (a) Borrower and its Affiliates have not generated, used, stored, treated, transported, manufactured, handled, produced or disposed of any hazardous materials, on or off Borrower's premises (whether or not owned by it) in any manner which at any time violates any materially applicable statute, rule or regulation relating to environmental pollution and employee health and safety, or any license, permit, certificate, approval or similar authorization thereunder and the operations of Borrower and its Affiliates comply in all material respects with all such statutes, rules and regulations and all licenses, permits, certificates, approvals and similar authorizations thereunder. (b) There is no pending or threatened investigation, proceeding, complaint, order, directive, claim, citation or notice by any governmental authority or any other Person with respect to any alleged non-compliance with or violation of the requirements of any statute, rule or regulation relating to environmental pollution and employee health and safety, by Borrower or any of its Affiliates or the release, spill or discharge, threatened or actual, of any hazardous material or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any hazardous materials or any other environmental, health or safety matter, which affects Borrower or any of its Affiliates or any of their businesses, operations or assets or any properties at which Borrower or any of its Affiliates transported, stored or disposed of any hazardous materials. (c) Borrower and its Affiliates have no material liability (contingent or otherwise) in connection with hazardous materials or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any hazardous materials. -12-

(d) Borrower and its Affiliates have all licenses, permits, certificates, approvals or similar authorizations required to be obtained or filed in connection with the operations of Borrower and its Affiliates under any statute, rule or regulation relating to environmental pollution and employee health and safety, and all of such licenses, permits, certificates, approvals or similar authorizations are valid and in full force and effect. 4.9 COMPLIANCE WITH LAWS, REGULATIONS, ETC. Borrower shall, and shall cause each Subsidiary to, at all times comply in all material respects with all applicable provisions of laws, rules, regulations, licenses, permits, approvals and orders and duly observe all material requirements, of any foreign, federal, state or local governmental authority, including, without limitation, the Employee Retirement Income Security Act of 1974, as amended, the Internal Revenue Code of 1986, as amended, the Occupational Safety and Health Act of 1970, as amended, the Fair Labor Standards Act of 1938, as amended and the rules and regulations thereunder and all other statutes, rules, regulations, orders, permits and stipulations relating to environmental pollution and employee health and safety, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended and the Resource Conservation and Recovery Act of 1976 and any similar state or local statutes with respect thereto. 4.10 DISTRIBUTIONS. Borrower will not, and will not permit any Subsidiary to, directly or indirectly, during any fiscal year, commencing with the current fiscal year, declare or pay any distribution to its partners in respect of the general and limited partnership interests now or hereafter outstanding, or set aside or otherwise deposit or invest any sums for such purpose, or redeem, retire, defease, purchase or otherwise acquire (or set aside or otherwise deposit or invest any sums for such purpose) any such general or limited partnership interest or capital stock of any partner, general or limited, or agree to do any of the foregoing. Notwithstanding the foregoing, unless there exists any Event of Default or any condition or event which with notice or the passage of time or both would constitute an Event of Default hereunder or under any of the Financing Agreements, Borrower shall be permitted to make distributions to its general and limited partners (including such distributions to EEI and CEA/EEI with respect to their former partnership interests) for the payment of federal and state income taxes for which they are liable solely as a result of their respective partnership interests in Borrower's income, PROVIDED that Borrower gives Congress thirty (30) days prior written notice of any such intended distribution and, upon Congress' request, promptly furnishes documentation reasonably satisfactory to Congress evidencing compliance of any such intended distribution with the provisions hereof. -13-

4.11 INDEMNIFICATION FOR RETURNED ITEMS. Borrower agrees that Congress may pay any and all amounts demanded by any person which Borrower has given an indemnification for returned items and Congress may treat such amounts as advances to Borrower and change such amounts to any account of Borrower with Congress, all without inquiry as to whether such amounts are actually due and owing to such person and without regard to any dispute or claim that Borrower may have or assert against such person and/or other parties. 4.12 CAPITAL EXPENDITURES. Borrower will not, in the aggregate, directly or indirectly, expend or commit to expend, Capital Expenditures in excess of $300,000 in any fiscal year of Borrower. 4.13 NET WORTH. Borrower will, at all times, until all Obligations have been indefeasibly paid in full, maintain a Net Worth of not less than $8,000,000 on the date hereof and at all times thereafter. 4.14 WORKING CAPITAL. Borrower will, at all times, maintain a Working Capital of not less than $5,000,000. 4.15 PAYMENTS PERMITTED UNDER SUBORDINATED NOTES. Provided that there exists no Event of Default, or condition or event which with notice or passage of time or both would constitute an Event of Default hereunder or under any of the Financing Agreements: (a) Borrower may make regularly scheduled payments of interest, on an unaccelerated basis, with respect to the Subordinated Notes in accordance with the terms of each Subordinated Note as in effect on the date hereof (but not any prepayments or payments pursuant to acceleration or claims of breach or otherwise); (b) Borrower may make regularly scheduled payments of principal, on an unaccelerated basis with respect to the Subordinated Notes payable to the Estate of Harry Isaacs (but not any prepayments or payments pursuant to acceleration or claims of breach or otherwise); and (c) notwithstanding the foregoing provisions of this Section 4.15, Borrower may make regularly scheduled payments of principal and interest on an unaccelerated basis, with respect to the Subordinated Notes payable to EEI and CEA/EEI (but not any prepayments or payments pursuant to acceleration or claims of breach or otherwise) PROVIDED, that a Payment Blockage Event does not then exist or arise as a result thereof and Borrower shall have an Excess Availability: -14-

(i) in an average daily amount during the thirty (30) day period immediately upon prior to September 30, 1992, the due date of the first scheduled principal payment under the Subordinated Notes payable to EEI and CEA/EEI ("First Principal Payment") in an amount not less than $1,600,000 and an Excess Availability of an amount equal to or greater than $1,600,000 immediately before making the First Principal Payment; (ii) in an average daily amount during the thirty (30) day period immediately prior to September 30, 1993, the due date of the second scheduled principal payment under the Subordinated Notes payable to EEI and CEA/EEI ("Second Principal Payment") in an amount not less than $2,000,000 and an Excess Availability of an amount equal to or greater than $2,000,000 immediately before making the Second Principal Payment; and (iii) not less than $500,000 immediately after making each of the First Principal Payment and Second Principal Payment; and, PROVIDED, FURTHER, that immediately before Borrower makes the First Principal Payment and immediately before Borrower makes the Second Principal Payment, not more than $200,000 in the aggregate of Borrower's outstanding and unpaid accounts payable are delinquent past the maturity date thereof or their stated payment terms, and at Congress' request, compliance with such accounts payable status is confirmed to Congress' satisfaction by Congress' auditors before the making of the First Principal Payment and the Second Principal Payment, PROVIDED, FURTHER, such delinquent accounts payable shall not be deemed to include outstanding and unpaid accounts payable of Borrower which are disputed in good faith by Borrower and as to which the same are adequately reserved against by Borrower in Congress' judgment, exercised in good faith. 4.16 APPLICATION OF PROCEEDS. Any and all proceeds earned or collected by Borrower with respect to the Collateral, including but not limited to, in connection with the Settlement Agreement between Borrower and VF, Inc. with respect to trademark infringement litigation, shall be applied to the outstanding Obligations. Section 5. ADDITIONAL REMEDIES AND RELATED PROVISIONS. 5.1 ADDITIONAL REMEDIES. Without limiting any rights or remedies of Congress at any time on or after an Event of Default pursuant to the other Financing Agreements or applicable law, Congress may, at its option, cure any default by Borrower or any of its Affiliates under any agreement, law, regulation, permit, license or approval with, or issued or promulgated by, any Person, which constitutes, or with notice or passage of time or both would constitute an Event of Default hereunder or under any -15-

of the other Financing Agreements, or pay or bond on appeal any judgment, order, directive, claim or citation entered or made against Borrower (irrespective of the amount of said judgment or the time elapsed since entry thereof) and charge Borrower's account therefor, such amounts to be repayable by Borrower to Congress on demand, together with interest thereon at the rate of interest then payable by Borrower under the Accounts Agreement; PROVIDED, HOWEVER, Congress shall be under no obligation to effect such cure, payment or bonding and shall not, by making any payment for Borrower's account, be deemed to have assumed any obligation or liability of Borrower or any such Affiliate. Very truly yours, I.C. ISAACS & COMPANY L.P. By: ISBUYCO, INC., General Partner
By: /s/ Robert J. Arnot -------------------------------Title: Chairman -----------------------------

ACCEPTED: CONGRESS FINANCIAL CORPORATION
By: /s/ Steven Stone --------------------------Title: VP ------------------------

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EXHIBIT A TO COVENANT SUPPLEMENT SUBORDINATED NOTES EEI PORTFOLIO LIQUIDATION, L.P. 1. $549,500.00 Junior Subordinated Note dated June ____, 1992, payable on or before September 30, 1992 2. $750,000.00 Junior Subordinated Note dated June ____, 1992, payable on or before June 30, 1993 CEA/EEI PORTFOLIO LIQUIDATION, L.P.2. 1. $549,500.00 Junior Subordinated Note dated June ____, 1992, payable on or before September 30, 1992 2. $750,000.00 Junior Subordinated Note dated June ____, 1992, payable on or before June 30, 1993 HARRY Z. ISAACS 1. $600,000.00 Senior Subordinated Note dated May 4, 1990; outstanding principal balance $250,000.00 IRA J. HECHLER 1. $ 64,055.56 Senior Subordinated Note dated November 19, 1990 2. $ 62,777.78 Senior Subordinated Note dated April 30, 1991 3. $ 61,250,00 Senior Subordinated Note dated July 2, 1991 4. $ 43,384.00 Junior Subordinated Note dated December 20, 1984 5. $ 7,737.42 Junior Subordinated Note dated March 31, 1988 6. $ 9,259.42 Junior Subordinated Note dated September 30, 1990 7. $ 4,941.15 Junior Subordinated Note dated June 30, 1991 JOHN HECHLER 1. $ 9,001.00 Junior Subordinated Note dated December 20, 1984 2. $ 1,605.30 Junior Subordinated Note dated March 31, 1988

3. $ 1,921.08 Junior Subordinated Note dated September 30, 1990 4. $ 1,025.15 Junior Subordinated Note dated June 30, 1991 ROBERT ARNOT 1. $ 9,001.00 Junior Subordinated Note dated December 20, 1984 2. $ 1,605.30 Junior Subordinated Note dated March 31, 1988 3. $ 1,921.08 Junior Subordinated Note dated September 30, 1990 4. $ 1,025.15 Junior Subordinated Note dated June 30, 1991 HERBERT SCHWARTZ 1. $ 900.00 Junior Subordinated Note dated December 20, 1984 2. $ 160.52 Junior Subordinated Note dated March 31, 1988 3. $ 192.09 Junior Subordinated Note dated September 30, 1990 4. $ 102.50 Junior Subordinated Note dated June 30, 1991 SUSAN MARK 1. $ 338.00 Junior Subordinated Note dated December 20, 1984 2. $ 60.28 Junior Subordinated Note dated March 31, 1988 3. $ 72.14 Junior Subordinated Note dated September 30, 1990 4. $ 38.50 Junior Subordinated Note dated June 30, 1991 HECHLER VENTURES 1. $ 12,376.00 Junior Subordinated Note dated December 20, 1984 2. $ 2,207.23 Junior Subordinated Note dated March 31, 1988 3. $ 2,641.40 Junior Subordinated Note dated September 30, 1990 4. $ 1,409.54 Junior Subordinated Note dated June 30, 1991

JULIAN ADLER 1. $ 15,000.00 Junior Subordinated Note dated December 20, 1984 2. $ 2,675.23 Junior Subordinated Note dated March 31, 1988 3. $ 3,201.44 Junior Subordinated Note dated September 30, 1990 4. $ 1,708.40 Junior Subordinated Note dated June 30, 1991 STANLEY KELLER 1. $ 24,000.00 Junior Subordinated Note dated December 20, 1984 2. $ 4,280.32 Junior Subordinated Note dated March 31, 1988 3. $ 5,122.30 Junior Subordinated Note dated September 30, 1990 4. $ 2,733.44 Junior Subordinated Note dated June 30, 1991 GERALD LEAR 1. $ 24,000.00 Junior Subordinated Note dated December 20, 1984 2. $ 4,280.32 Junior Subordinated Note dated March 31, 1988 3. $ 5,122.30 Junior Subordinated Note dated September 30, 1990 4. $ 2,733.44 Junior Subordinated Note dated June 30, 1991 EUGENE WIELEPSKI 1. $ 12,000.00 Junior Subordinated Note dated December 20, 1984 2. $ 2,140.16 Junior Subordinated Note dated March 31, 1988 3. $ 2,561.15 Junior Subordinated Note dated September 30, 1990 4. $ 1,366.72 Junior Subordinated Note dated June 30, 1991 GARY BRASHERS 1. $ 6,000.00 Junior Subordinated Note dated December 20, 1984 2. $ 3,000.00 Junior Subordinated Note dated December 20, 1984

3. $ 1,070.09 Junior Subordinated Note dated March 31, 1988 4. $ 535.04 Junior Subordinated Note dated March 31, 1988 5. $ 1,280.58 Junior Subordinated Note dated September 30, 1990 6. $ 640.29 Junior Subordinated Note dated September 30, 1990 7. $ 683.36 Junior Subordinated Note dated June 30, 1991 8. $ 341.68 Junior Subordinated Note dated June 30, 1991 BILLIE THERRELL 1. $ 6,000.00 Junior Subordinated Note dated December 20, 1984 2. $ 1,070.09 Junior Subordinated Note dated March 31, 1988 3. $ 1,280.58 Junior Subordinated Note dated September 30, 1990 4. $ 683.36 Junior Subordinated Note dated June 30, 1991 ANDREW ADKISSON 1. $ 6,000.00 Junior Subordinated Note dated December 20, 1984 2. $ 1,070.09 Junior Subordinated Note dated March 31, 1988 3. $ 1,280.58 Junior Subordinated Note dated September 30, 1990 4. $ 683.36 Junior Subordinated Note dated June 30, 1991 JOE W. CHAMBLEE 1. $ 6,000.00 Junior Subordinated Note dated December 20, 1984 2. $ 1,070.09 Junior Subordinated Note dated March 31, 1988 3. $ 1,280.58 Junior Subordinated Note dated September 30, 1990 4. $ 683.36 Junior Subordinated Note dated June 30, 1991 MARTIN NADLER 1. $ 6,000.00 Junior Subordinated Note dated December 20, 1984 2. $ 1,070.09 Junior Subordinated Note dated March 31, 1988

3. $ 1,280.58 Junior Subordinated Note dated September 30, 1990 4. $ 683.36 Junior Subordinated Note dated June 30, 1991 THOMAS ORMANDY 1. $ 4,500.00 Junior Subordinated Note dated December 20, 1984 2. $ 802.57 Junior Subordinated Note dated March 31, 1988 3. $ 960.43 Junior Subordinated Note dated September 30, 1990 4. $ 512.52 Junior Subordinated Note dated June 30, 1991 CHARLES CHAMBLEE 1. $ 3,000.00 Junior Subordinated Note dated December 20, 1984 2. $ 535.04 Junior Subordinated Note dated March 31, 1988 3. $ 640.29 Junior Subordinated Note dated September 30, 1990 4. $ 341.68 Junior Subordinated Note dated June 30, 1991 WILLIAM MYATT 1. $ 3,000.00 Junior Subordinated Note dated December 20, 1984 2. $ 535.04 Junior Subordinated Note dated March 31, 1988 3. $ 640.29 Junior Subordinated Note dated September 30, 1990 4. $ 341.68 Junior Subordinated Note dated June 30, 1991

EXHIBIT B TRADESTYLES FOR BILLING I.C. Isaacs & Co. L.P. -18-

EXHIBIT C TO COVENANT SUPPLEMENT ADDITIONAL PERMITTED LIENS Outstanding A. Financing Statements Amount Secured DEBTOR I.C. ISAACS & COMPANY L.P. MARYLAND - STATE DEPARTMENT
1. 5/2/88 - Liber 3018, folio 1987, I.D. No. 81237962; Secured Party: Storage Technology Corporation; Collateral: STC equipment lease to Isaacs. 5/8/89 - Liber 3132, folio 1854, I.D. No. 91287666; Secured Party; Storage Technology Corporation; Collateral: STC equipment leased to Isaacs. 3/5/90 - Liber 3220, folio 1398, I.D. No. 100648427; Secured Party/Assignee; The CIT Group; Collateral: Specific equipment. 6/18/90 - Liber 3248, folio 2282, I.D. No. 101698361; Secured Party/Assignee: The CIT Group; Collateral: Specific equipment with additional note "Assignments of Inventory According to TAX PROPERTY ARTICLE #12-108(k) Conditional Sales Contract." $4,586.95/month Balance: $101,132.00

2.

Same as No. A.1. above

3.

$1,261.51/month Balance: $10,088.00 (approx.)

4.

Same as No. A.3. above

MASSACHUSETTS - SECRETARY OF STATE 1. 2/16/90 - File No. 938546; Secured Same as No. A.3. Party/Assignee: The CIT Group; above Collateral: Specific equipment. MASSACHUSETTS - CITY OF BOSTON 1. 2/15/90 - File No. 343185; Secured Party/Assignee: The CIT Group; Same as No. A.3. Collateral: Specific Equipment. above

B. Judgments I.C. ISAACS & COMPANY L.P. New York County - State tax lien dated October 21, 1991 in the amount of $6,370.68 SRK42a/I117/prf -2-

EXHIBIT D TO COVENANT SUPPLEMENT PERMITTED INDEBTEDNESS EEI PORTFOLIO LIQUIDATION, L.P.
1. 2. $549,500.00 $750,000.00 Junior Subordinated 1992, payable on or Junior Subordinated 1992, payable on or Note dated June ____, before September 30, 1992 Note dated June ____, before June 30, 1993

CEA/EEI PORTFOLIO LIQUIDATION, L.P.2.
1. 2. $549,500.00 $750,000.00 Junior Subordinated 1992, payable on or Junior Subordinated 1992, payable on or Note dated June ____, before September 30, 1992 Note dated June ____, before June 30, 1993

HARRY Z. ISAACS 1. $600,000.00 Senior Subordinated Note dated May 4, 1990; outstanding principal balance $250,000.00 IRA J. HECHLER
1. 2. 3. 4. 5. 6. 7. $ 64,055.56 $ 62,777.78 $ 61,250.00 $ 43,384.00 $ $ $ 7,737.42 9,259.42 4,941.15 Senior 1990 Senior Senior Junior 1984 Junior Junior 1990 Junior Subordinated Note dated November 19, Subordinated Note dated April 30, 1991 Subordinated Note dated July 2, 1991 Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

JOHN HECHLER
1. 2. 3. 4. $ $ $ $ 9,001.00 1,605.30 1,921.08 1,025.15 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

ROBERT ARNOT
1. 2. 3. 4. $ $ $ $ 9,001.00 1,605.30 1,921.08 1,025.15 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

HERBERT SCHWARTZ
1. 2. 3. 4. $ $ $ $ 900.00 160.52 192.09 102.50 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

SUSAN MARK
1. 2. 3. 4. $ $ $ $ 338.00 60.28 72.14 38.50 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

HECHLER VENTURES
1. 2. 3. 4. $ 12,376.00 $ $ $ 2,207.23 2,641.40 1,409.54 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

JULIAN ADLER
1. 2. 3. 4. $ 15,000.00 $ $ $ 2,675.23 3,201.44 1,708.40 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

STANLEY KELLER
1. 2. 3. 4. $ 24,000.00 $ $ $ 4,280.32 5,122.30 2,733.44 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

GERALD LEAR
1. 2. 3. 4. $ 24,000.00 $ $ $ 4,280.32 5,122.30 2,733.44 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

EUGENE WIELEPSKI
1. 2. 3. 4. $ 12,000.00 $ $ $ 2,140.16 2,561.15 1,366.72 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

GARY BRASHERS
1. 2. 3. 4. 5. 6. 7. 8. $ $ $ $ $ $ $ $ 6,000.00 3,000.00 1,070.09 535.04 1,280.58 640.29 683.36 341.68 Junior 1984 Junior 1984 Junior Junior Junior 1990 Junior 1990 Junior Junior Subordinated Note dated December 20, Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated September 30, Subordinated Note dated June 30, 1991 Subordinated Note dated June 30, 1991

BILLIE THERRELL
1. 2. 3. 4. $ $ $ $ 6,000.00 1,070.09 1,280.58 683.36 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

ANDREW ADKISSON
1. 2. 3. 4. $ $ $ $ 6,000.00 1,070.09 1,280.58 683.36 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

JOE W. CHAMBLEE
1. 2. 3. 4. $ $ $ $ 6,000.00 1,070.09 1,280.58 683.36 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

MARTIN NADLER
1. 2. 3. 4. $ $ $ $ 6,000.00 1,070.09 1,280.58 683.36 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

THOMAS ORMANDY
1. 2. 3. 4. $ $ $ $ 4,500.00 802.57 960.43 512.52 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

CHARLES CHAMBLEE
1. 2. 3. 4. $ $ $ $ 3,000.00 535.04 640.29 341.68 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

WILLIAM MYATT
1. 2. 3. 4. $ $ $ $ 3,000.00 535.04 640.29 341.68 Junior 1984 Junior Junior 1990 Junior Subordinated Note dated December 20, Subordinated Note dated March 31, 1988 Subordinated Note dated September 30, Subordinated Note dated June 30, 1991

CARTHAGE IRB $299,000.00

[LOGO] INVENTORY AND EQUIPMENT SECURITY AGREEMENT SUPPLEMENT TO ACCOUNTS FINANCING AGREEMENT [SECURITY AGREEMENT] Congress Financial Corporation 1133 Avenue of the Americas New York, New York 10036 entlemen: This Inventory and Equipment Security Agreement ("Supplement") is a supplement to the Accounts Financing Agreement [Security Agreement] between us, dated of even date herewith (the "Agreement"). This Supplement is (a) hereby incorporated into the Agreement, (b) made a part thereof and (c) subject to the other terms, conditions, covenants and warranties thereof. All terms (including capitalized terms) used herein shall have the meanings ascribed to them respectively in the Agreement, unless otherwise defined in this Supplement. See Rider annexed hereto for language to be inserted after the asterisks in applicable Sections hereof. SECTION 1. ADDITIONAL SECURITY INTEREST. As additional security for the prompt performance, observance and payment in full of all Obligations, we hereby grant to you a continuing security interest in, a lien upon, and a right of setoff against, and we hereby assign, transfer, pledge and set over to you the following (which is and shall be deemed part of the Collateral as defined and used in the Agreement): 1.1. All raw materials, work in process, finished goods, and all other inventory of whatsoever kind of nature, wherever located, whether now owned or hereafter existing or acquired by us * ("Inventory"), including without limitation, all wrapping, packaging, advertising, shipping materials, and all other goods consumed in our business, all labels and other devices, names or marks affixed or to be affixed thereto for purposes of selling or of identifying the same or the seller or manufacturer thereof and all of our right, title and interest therein and thereto; 1.2. All equipment, machinery, computers and computer hardware, vehicles, tools, dies, jigs, furniture, trade fixtures and fixtures; all attachments, accessions and property now or hereafter affixed thereto or used in connection therewith, substitutions and replacements thereof, wherever located, whether now owned or hereafter acquired by Borrower ("Equipment"); 1.3. All books, records, documents, other property and general intangibles at any time relating to the Inventory and the Equipment; and 1.4. All products and proceeds of the foregoing, in any form, including, without limitation, insurance proceeds and any claims against third parties for loss or damage to or destruction of any or all of the foregoing. SECTION 2. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS. We hereby represent, warrant and covenant to you the following (which shall survive the execution and delivery of this Supplement), the truth and accuracy of which, and compliance with, being a continuing condition of the making of loans by you under the Agreement or any other supplement thereto: 2.1. We are and shall be, with respect to the Equipment, the owner of such Equipment free from any lien, security interest, claim and encumbrance of any kind, except in your favor and as set forth on Exhibit A if any, annexed hereto and made a part hereof. 2.2. The only locations of any Collateral are those addresses listed on Exhibit B annexed hereto and made a part hereof. Exhibit B sets forth the owner and/or operator of the premises at such addresses for all locations which we do not own and operate and all mortgages, if any, with respect to the premises. We shall not remove any Collateral from such locations, without your prior written consent, except for sales of Inventory in the ordinary course of our business. * 2.3. We shall at all times maintain, with financially sound and reputable insurers, casualty and hazard insurance with respect to the Collateral for not less than its full market value and against all risks to which it may be exposed. All such insurance policies shall be in such form, substance, amounts and coverage as may be * satisfactory to you and shall provide for ** days' minimum prior cancellation notice in writing to you. You may act as attorney for us in obtaining, adjusting, settling, amending and cancelling such insurance. We shall promptly (a) obtain endorsements to all existing and future insurance policies with respect to the Collateral specifying that the proceeds of such insurance shall be payable to you and us as our interests may appear and further specifying that you shall be paid regardless of any act, omission or breach of warranty by us, (b) deliver to you an original executed copy of, or executed certificate of the insurance carrier with respect to, such endorsement and, at your request, the original or a certified duplicate copy of the underlying insurance policy, and (c) deliver to you such other evidence which is satisfactory to you of compliance with the provisions hereof.

2.4. We shall promptly notify you in writing of the details of any loss, damage, investigation, action, suit, proceeding or claim relating to the Collateral or which would result in any material adverse change in our business, properties, assets, goodwill or condition, financial or otherwise. 2.5. At your option, you may apply any insurance monies received at any time to the cost of repairs to or replacement for the Inventory and/or Equipment and/or to payment of any of the Obligations, whether or not due, in any order and in such manner as you, in your sole discretion, may determine. 2.6. Upon your * request, at any time and from time to time, we shall, at our sole cost and expense, execute and deliver to you written reports or appraisals as to the Inventory and Equipment listing all items and categories thereof, describing the condition of same and setting forth the value thereof (the lower of cost or market value of the Inventory and the lower of net cost less depreciation, fair market value and/or liquidation value of the Equipment), in such form as is satisfactory to you. 2.7. We shall, at our own expense, keep the Equipment in first class order, repair, running and marketable condition. 2.8. We shall (a) use, store and maintain the Inventory and the Equipment with all reasonable care and caution, and (b) use the Inventory and Equipment for lawful purposes only and in conformity * with applicable laws, ordinances and regulations.

2.9. All Inventory shall be produced in accordance with the requirements of the Federal Fair Labor Standards Act of 1938, as amended and all * rules, regulations and orders related thereto. 2.10. The Inventory and the Equipment are and shall be used in our business and not for personal, family, household or farming use. 2.11. The Equipment is now and shall remain personal property and we shall not permit any of the Equipment to be or become a part of or affixed to real property without (a) prior written notice to you and your written consent and (b) first making all arrangements, and delivering or causing to be delivered to you, such agreements and other documentation requested by you for the protection and preservation of your security interests and liens, in form and satisfactory to you, including, without limitation, waivers and subordination agreements by any landlords or mortgages of statutory and non-statutory liens and rights of distraint. 2.12. We assume all responsibility and liability arising from or relating to the use, sale or other disposition of the Inventory and the Equipment. SECTION 3. ADDITIONAL REMEDIES. Upon the occurrence of an Event of Default and at any time thereafter, you shall have the right (in addition to any other rights you may have under the Agreement, this Supplement or otherwise), without notice to us, at any time and from time to time, in your discretion, with or without judicial process or the aid or assistance of others and without cost to you: 3.1. To enter upon any premises on or in which any of the Inventory or Equipment may be located and, without resistance or interference by us, take possession of the Inventory and the Equipment; 3.2. To complete processing, manufacturing and repair of all or any portion of the Inventory; 3.3. To sell, foreclose or otherwise dispose of any part or all of the Inventory and the Equipment on or in any of our premises or premises of any other party; 3.4. To require us, at our expense, to assemble and make available to you any part or all of the Inventory and the Equipment at any place and time * designated by you; and 3.5. To remove any or all of the Inventory and the Equipment from any premises on or in which the same may be located, for the purpose of effecting the sale, foreclosure or other disposition thereof or for any other purpose (and if any of the Inventory or the Equipment consists of motor vehicles, you may use our registrations and license plates). IN WITNESS WHEREOF, we have caused these presents to be duly executed this 16th day of June, 1992. By: I.C. ISAACS & COMPANY, INC. By: ISBUYCO, INC., General Partner
By: /s/ Robert J. Arnot ----------------------------Title: Chairman --------------------------

RIDER TO INVENTORY AND EQUIPMENT SECURITY AGREEMENT SUPPLEMENT TO ACCOUNTS FINANCING AGREEMENT [SECURITY AGREEMENT] between Congress Financial Corporation and I.C. Isaacs & Company L.P. This Rider sets forth modifying terms to the respective indicated Sections of the Supplement corresponding to the asterisks in such Sections of the Supplement. Section 1.1 * which are imported by us or which are covered by letters of credit issued or indemnified by you Section 2.2 * or sales or trade-ins of Equipment having an aggregate appraised value in any calendar year, based upon the most recent appraisal thereof delivered to you, of not more than $50,000, PROVIDED, THAT, (a) any such sales shall be sold for cash and the sale proceeds shall be remitted to you for application to the Obligations, and (b) any such trade-ins shall be replaced by Equipment having a cost in excess of the appraised value of the Equipment for which it was traded. Section 2.3 * reasonably ** thirty (30) Section 2.6 * reasonable Section 2.8 * in all material aspects Section 2.9 * materially applicable Section 3.4 * reasonably SRK42/I19

EXHIBIT A EXISTING LIENS OUTSTANDING A. FINANCING STATEMENTS AMOUNT SECURED DEBTOR I.C. ISAACS & COMPANY L.P. MARYLAND--STATE DEPARTMENT
1. 5/2/88--Liber 3018, folio 1987, I.D. No. 81237962; Secured Party: Storage Techology Corporation; Collateral: STC equipment lease to Isaacs. 5/8/89--Liber 3132, folio 1854, I.D. No. 91287666; Secured Party; Storage Technology Corporation; Collateral: STC equipment leased to Isaacs. 3/5/90--Liber 3220, folio 1398, I.D. No. 100648427; Secured Party/Assignee; The CIT Group; Collateral: Specific equipment. 6/18/90--Liber 3248, folio 2282, I.D. No. 101698361; Secured Party/Assignee: The CIT Group; Collateral: Specific equipment with additional note "Assignments of Inventory According to TAX PROPERTY ARTICLE #12108(k)--Conditional Sales Contract." $4,586.95/month Balance: $101,132.00

2.

Same as No. A.1. above

3.

$1,261.51/month Balance: $10,088.00 (approx.)

4.

Same as No. A.3. above

MASSACHUSETTS--SECRETARY OF STATE 1. 2/16/90--File No. 938546; Secured Same as No. A.3. Party/Assignee: The CIT Group; above Collateral: Specific equipment. MASSACHUSETTS--CITY OF BOSTON
1. 2/15/90--File No. 343185; Secured Party/Assignee: The CIT Group; Collateral: Specific Equipment. Judgements Same as No. A.3. above

B.

I.C. ISAACS & COMPANY L.P. New York County--State tax lien dated October 21, 1991 in the amount of $6,370.68 SRK42a/I117/prf -2-

EXHIBIT B TO INVENTORY AND EQUIPMENT SECURITY AGREEMENT SUPPLEMENT LOCATIONS OF COLLATERAL 1. I.C. Isaacs & Company, L.P. 3840 Bank Street Baltimore, MD 21224 2. Sussex Co. McColley & S.E. 4th Street Milford, DE 19963 3. Lord Isaacs Factory Outlet 678A North Dupont Highway Milford, Delaware 19963 4. Newton Co. 300 North Newton Avenue Newton, MS 39345 5. Carthage Co. 511 East Franklin Street Carthage, MS 39051 6. Raleigh Co. Highway 18 West Box 278 Raleigh, MS 39153 7. 1410 Broadway New York, NY 10018 8. Empire State Building New York, NY 10118 9. Atlanta Apparel Mart 240 Peachtree Street, N.W. Suite 2200 Atlanta, GA 30043 10. Bayside Mdse. Mart 150-160 Mt. Vernon Street Boston, MA 02125 11. California Mart 110 East Ninth Street Suite A727 Los Angeles, CA 90079 12. Miami International Mdse. Mart 777 N.W. 72nd Avenue Miami, FL 33126 13. Dallas Market Center 2100 Stemmons Freeway Dallas, Texas 75207 351.Z00999A:06/11/92 12898-8

[LOGO] TRADE FINANCING AGREEMENT SUPPLEMENT TO ACCOUNTS FINANCING AGREEMENT [SECURITY AGREEMENT] Congress Financial Corporation 1133 Avenue of the Americas New York, New York 10036 Gentlemen: This Trade Financing Agreement ("Supplement") is a supplement to the Accounts Financing Agreement [Security Agreement] between us dated of even date herewith (the "Agreement"). This Supplement is (a) hereby incorporated into the Agreement, (b) made a part thereof and (c) subject to the other terms, conditions, covenants and warranties thereof. All terms, including capitalized terms, used herein shall have the meanings ascribed to them respectively in the Agreement, unless otherwise defined in this Supplement. This Supplement will confirm the terms and conditions upon which you may, from time to time in your sole discretion, assist us in establishing or opening foreign or domestic letters of credit and extend other financial accommodations for our account. Accordingly, each of us hereby agrees as follows: SECTION 1. CREDIT ACCOMMODATIONS 1.1. You may, in your sole discretion, from time to time, for our account, at our request, provide one or more of the following financial accommodations to us or our designee(s): (a) issue, open, or cause the issuance or opening of letters of credit or purchase or other guaranties for the purchase of goods and services in the ordinary course of our or any such designee's business or for any other purpose approved by you, (b) assist us in establishing or opening letters of credit for such purposes by indemnifying the issuer thereof or guaranteeing our payment or performance to such issuer in connection therewith, (c) make payments for our or such designee's account in connection with such purchases. All such letters of credit or purchase or other guaranties and other financial accommodations are referred to herein individually as a "Credit" and collectively as "Credits". *and continuing **and 1.2. The opening or issuance of any Credit shall at all times and in all respects be in your sole discretion. The amount and extent of any Credit and the terms, conditions and provisions thereof shall in all respects be determined solely by you and shall be subject to change, modification and revision by you, in your sole discretion, at any time and from time to time. The maturity of each Credit shall not exceed one hundred and eighty (180) days after opening or issuance, except in your sole discretion. 1.3. Our loan availability under the Agreement and any other Supplements thereto shall be reduced fifty (50%) percent of the amount of all outstanding letters of credit for the importation of goods issued or caused to be issued by you or as which you indemnify the issuer thereof and one hundred (100%) percent of the amount of all other Credits or such lesser amount as you may elect in your discretion. 1.4. All outstanding Credits shall be secured by all collateral in which you are now or hereafter granted a security interest by us or any guarantor of our Obligations. All outstanding Credits shall be deemed loans for purposes of determining whether the Maximum Credit has been exceeded. 1.5. Except in your sole discretion, the amount of all Credits and all other commitments and obligations made or incurred by you for our account in connection therewith shall not exceed a 1,500,000 in the aggregate at any time outstanding. 1.6. All indebtedness, liabilities, expenses and obligations of any kind paid, arising or incurred by you in connection with this Supplement, any Credit or any documents, drafts and acceptances thereunder, whether present or future, whether arising or incurred before or after termination or nonrenewal of this Agreement shall be incurred solely as an accommodation to us and for our account and constitute part of the Obligations, including without limitations; (a) all amounts due or which may become due under any Credit or any drafts or acceptances thereunder; (b) all amounts charged or chargeable to you or us by any bank or other issuer of any Credit or any correspondent which opens, issues or is otherwise involved with any Credit, including without limitation, all fees, expenses and commissions; (c) your fees, expenses and commissions; (d) duties, freight, taxes, costs, insurance and all such other charges and expenses which may pertain directly or indirectly to any Obligations or to the Credits or goods or documents relating thereto; and (e) all other indebtedness and obligations owed by us to you pursuant to, in connection with or arising from this Supplement, the Credits or any drafts or acceptances relating thereto. 1.7. All such Obligations shall accrue interest at the rate provided for in the Agreement, commencing on the date any payment is made, or non-contingent obligation incurred, by you and all such Obligations shall, together with interest thereon and other sums owed by us to youhereunder, be payable and evidenced as provided in the Agreement.

1.8. In addition to all other fees, charges and expenses payable under the Agreement, this Supplement, and to any bank or other issuer or correspondent in connection with any Credit, we agree to pay to you the following commissions for your services hereunder, which shall be due and payable on the opening or issuance of each Credit or, if the original term is extended, on the extension thereof: a charge of .2083% of such face amount for each thirty (30) days, or any portion thereof of the original term or any extension thereof. We also agree to pay you, your and any bank's, other issuer's or correspondent's customary charges for amendments, extensions and administration relating to any Credit, which charges shall be due and payable on the first day of the month following the date of incurrence and, at your option may be charged to any of our account(s) maintained by you. 1.9. Nothing contained hereon shall be deemed or construed to grant us any right, power or authority to pledge your credit in any manner. You shall have no liability of any kind with respect to any Credit opened or issued by a bank or other issuer or any draft or acceptance with respect thereto unless and until you shall have first duly executed and delivered your guarantee or indemnification in writing with respect thereto, as provided herein. SECTION 2. ADDITIONAL SECURITY INTEREST 2.1. As additional security for the prompt performance, observance and payment in full of all Obligations, we hereby grant to you a continuing security interest in, a lien upon, and a right to set off against, and we hereby assign, transfer, pledge and set over to you all following property acquired by us in connection with any Credit or otherwise owned by us, whether now owned or hereafter acquired (which, is and shall be deemed a part of the Collateral as defined and used in the Agreement): (a) all raw materials, work-in-process, finished goods and all other inventory and goods of whatsoever kind or nature, wherever located, including inventory or goods in transit ("Inventory"), including without limiations, all wrapping, packaging, advertising and shopping materials, and all other goods consumed in our business, all labels and other devices, names ormarks affixed or to be affixed thereto for purposes of selling or of identifying the same or the seller or manufacturer thereof and all of our right, title and interest therein and thereto; (b) documents of payments, transport and title or the equivalent thereof, including with-

* inventory imported by us and all of the

out limitation, original contracts, orders, invoices, checks, drafts, notes, letters of credit, documents, warehouse receipts, bills of lading, shipping receipts, dock receipts, delivery tickets and documents made available to us for the purpose of ultimate sale or exchange of Inventory or for the purpose of loading, unloading, storing, shipping, transhipping, manufacturing, processing or otherwise dealing with Inventory in a manner preliminary to their sale or exchange; (c) all books, records, other property and general intangibles relating to the foregoing; and (d) all products and proceeds of the foregoing in any form, including without limitation, insurance proceeds and any claims against third parties for loss or damage to or destruction of any or all of the foregoing. 2.2. We hereby recognize and admit that until all of the Obligations have been fully and indefeasibly paid and discharged, you may be deemed to have absolute ownership in and unqualified right to the possession and disposal of the following: (a) all property shipped under or pursuant to or in connection with any Credit or in any way related thereto and, including, but not limited to, the documents, drafts or acceptances drawn thereunder, whether or not released to us, (b) in and to all shipping documents, warehouse receipts, policies, or certificates of insurance and other documents accompanying or relative to documents, drafts or acceptances drawn under or relating to any Credit, and (c) all proceeds of each of the foregoing. 2.3. You may, on or after occurrence of any Event of Default, exercise any or all of your rights of ownership, including the rights of possession and sale or other disposition, with or without notice to us, without liability to you and entirely at our expense and without relieving us from any Obligations. SECTION 3. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS. We hereby represent, warrant and covenant to you the following (which shall survive the execution and delivery of this Supplement), the truth and accuracy of which, or compliance with, being a continuing condition of the making of loans by you under the Agreement or any supplement thereto and the extension by you of each Credit and other financial accommodations pursuant hereto: 3.1. All sales of any Inventory shall be made by us only in the ordinary course of business and the Accounts arising from such sales and proceeds thereof shall be and are hereby transferred and assigned to you and we confirm that your lien and security interest extends and attaches to those Accounts and proceeds. 3.2. Except as you may otherwise specifically consent in writing prior to the opening or issuance of any Credit, all Credits shall be opened or issued to cover the actual purchase and delivery of Inventory solely for our account. 3.3. All shipments made under any Credit are in accordance with the governmental laws and regulations of the countries in which the shipments originate and terminate, and are not prohibited by any such laws and regulations. 3.4. We assume all risk, liability and responsibility for, and agree to pay and discharge, all present and future local, state, federal or foreign taxes, duties, or levies. Any embargo, restriction, laws, customs or regulations of any country, state, city, or other political subdivision, where the Collateral is or may be located, or wherein payments are to be made, or wherein drafts may be drawn, negotiated, accepted, or paid, shall be solely our risk, liability and responsibility. 3.5. All documents, instruments, notices and statements relating to any Credit and/or the Collateral, if any, shall at your request, be promptly delivered to you. 3.6. We shall procure promptly, or cause to be procured, any necessary licenses for the shipping of goods and comply or cause any drawer under, or beneficiary of, any Credit (or any transferee or assignee thereof), to comply with all foreign and domestic governmental laws and regulations in regard to the shipping of the Inventory, the financing thereof or payment therefor, including governmental laws and regulations pertaining to transactions involving designated foreign countries or their nationals and to furnish such certificates in that respect as you or any bank or other issuer or correspondent may at any time require. 3.7. The only locations of any Collateral are those addresses listed on Exhibit A annexed hereto and made a part hereof. Exhibit A sets forth the owner and/or operator of the premises at such addresses, for all locations which we do not own and operate and all mortgages, if any, with respect to the premises. We shall not remove any Collateral from such locations, without your prior written consent, except for sales of Inventory in the ordinary course of our business. 3.8. We shall at all times maintain, with financially sound and reputable insurers, casualty and hazard insurance with respect to the Collateral for not less than its full market value and against all risks to which it may be exposed. All such insurance policies shall be in such form, substance, amounts and coverage as may be reasonably satisfactory to you and shall provide for thirty (30) days' minimum prior cancellation notice in writing to you. You may act as attorney for us in obtaining, adjusting, settling, amending and cancelling such insurance. We shall promptly (a) obtain endorsements to all existing and future insurance policies with respect to the Collateral specifying that the proceeds of such insurance shall be payable to you as your interests may appear and further specifying that you shall be paid regardless of any act, omission or breach of warranty by us, (b) deliver to you an original executed copy of, or executed certificate of the insurance carrier with respect to, such endorsement and, at your request, the original or a certified duplicate copy of the underlying insurance policy and (c) deliver to you such other evidence which is satisfactory to you of compliance with the provisions hereof.

3.9. We shall promptly notify you in writing of the details of any loss, damage, investigation, action, suit, proceeding or claim relating to the Collateral or which would result in any material adverse change in our business, assets, goodwill or condition, financial or otherwise. 3.10. At your option, you may apply any insurance monies received at any time to the cost of repairs to or replacement for the Inventory and/or to payment of any of the Obligations, whether or not due, in any order and in such manner as you, in your sole discretion, may determine. 3.11. Upon your request, at any time and from time to time, we shall, at our sole cost and expense, execute and deliver to you written reports or appraisals as to the Inventory listing all locations, items and categories thereof, describing the condition of same and setting forth the lower of cost or fair market value thereof, in such form as is reasonably satisfactory to you. 3.12. We shall (a) use, store and maintain the Inventory with all reasonable care and caution and (b) use the Inventory for lawful purposes only and in conformity with applicable laws, ordinances, regulations and insurance policies. 3.13. We assume all responsibility and liability arising from or relating to the use, sale or other disposition of the Inventory and other Collateral. SECTION 4. INDEMNIFICATION AND RELEASE. 4.1. We shall and do hereby indemnify you and hold you harmless from and against, and agree to pay you on demand the amount of, any and all losses, costs, claims,demands, causes of action, liabilities or expenses (collectively, "Liabilities") which you may suffer or incur arising from or in connection with any transactions or occurrences relating to any Credit, the Collateral and any documents, drafts or acceptances thereunder or relating thereto, including, but not limited to, Liabilities due to any action taken by any bank or other issuer or correspondent with respect to any Credit except for any such Liabilities arising from your own willful misconduct. We further agree to and do hereby release and hold you harmless for any acts, waivers, errors, delays or omissions, whether caused by you, by any bank or other issuer or correspondent or otherwise with respect to or relating to any Credit except for any such acts, waivers, errors, delays or omissions arising from your own willful misconduct. Our unconditional obligation to you hereunder shall not be modified or diminished for any reason or in any manner whatsoever. Any fees, commissions or other charges made to you with respect to any Credit or other Obligations by any bank or other issuer or correspondent thereof shall be conclusive and may be charged by you to any of our account(s) maintained by you.

all risk, loss, liabilities, charges and expenses with respect to their acts or omissions. *, absent your own willful misconduct, 4.3. If any Credit provides that payment is to be made by any bank, other issuer or correspondent, you shall not be responsible for the failure of any of the documents specified in any Credit to come into your possession or for any delay in connection therewith, and our obligation to make reimbursement shall not be affected by such failure or delay in the receipt by you of any such documents, absent your willful misconduct. 4.4. We agree that any action taken by you, or any action taken by any bank or other issuer or correspondent under or in connection with any Credit, the Collateral and any documents, drafts or acceptances thereunder, shall, notwithstanding any judgment or instructions we may or may not express to the contrary or inconsistent therewith, be conclusive and binding on us and shall not create any resulting liability to you, except for your own willful misconduct or gross negligence. In furtherance thereof, you shall have the full and sole right and authority to, in good faith,: (a) clear and resolve any questions of non-compliance of documents; (b) give any instructions as to acceptance or rejection of any documents or goods; (c) execute any and all applications for steamship or airway guaranties, indemnities or delivery orders; (d) grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances, or documents; and (e) agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Credits, or documents, drafts or acceptances thereunder or any letters of credit included in the Collateral; all in your sole name, and any bank or other issuer or correspondent shall be entitled to comply with and honor any and all such documents or instruments executed by or received solely from you, all without any notice to or any consent from us. 4.5. Without your express consent and endorsement in writing, we agree not to: (a) approve or resolve any questions of non-compliance of documents; (b) give any instructions as to acceptance or rejection of any documents or goods; (c) execute any and all applications for steamship or airway guaranties, indemnities or delivery orders; (d) grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances or documents; or (e) agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Credits, or documents, drafts or acceptances thereunder. 4.6. Any rights, remedies, duties or obligations granted or undertaken by us to any bank or other issuer or correspondent in any application for any Credit, or any outstanding agreement relating to the opening or issuance of any Credit or acceptances or otherwise, shall be deemed to have been granted to you and apply in all respects to you and shall be in addition to any rights, remedies, duties or obligations contained herein. 4.7. Any duties or obligations undertaken by you to any bank or other issuer or correspondent in any application for or in connection with any Credit, including any outstanding agreement relating to the opening or issuance of any Credit or otherwise, shall be deemed to have been undertaken by us and apply in all respects to us and shall be in addition to the duties or obligations contained herein. SECTION 5. ADDITIONAL REMEDIES Upon the occurence of any Event of Default and at any time thereafter, you shall have the right (in addition to any other rights you may have under the Agreement, this Supplement or otherwise), without notice to us, at any time and from time to time, in your discretion, with or without judicial process or the aid or assistance of others and without cost to you: 5.1. To enter upon any premises on or in which any of the Inventory may be located and, without resistance or interference by us, take possession of the Inventory; 5.2. To complete processing, manufacturing, repair and shipment to customers of all or any portion of the Inventory; 5.3. To sell, foreclose or otherwise dispose of any part or all of the Inventory on or in any of our premises or premises of any other party; 5.4. To require us, at our expense, to assemble and make available to you any part or all of the Inventory at any place and time reasonably designated by you; 5.5. To remove any or all of the Inventory from any premises on or in which the same may be located, for the purpose of effecting the sale, foreclosure or other disposition thereof or for any other purpose (and if any of the Inventory consists of motor vehicles, you may use our registrations and license plates). IN WITNESS WHEREOF, we have caused these presents to be duly executed this 16th day of June, 1992. By: I.C. ISAACS & COMPANY L.P. By: ISBUYCO, INC., General Partner
/s/ Robert J. Arnot By:--------------------------------Chairman Title:------------------------------

EXHIBIT A TO TRADE FINANCING AGREEMENT SUPPLEMENT LOCATIONS OF COLLATERAL 1. I.C. Isaacs & Company, L.P. 3840 Bank Street Baltimore, MD 21224 2. Sussex Co. McColley & S.E. 4t Street Milford, DE 19963 3. Lord Isaacs Factory Outlet 678A North Dupont Highway Milford, Delaware 19963 4. Newton Co. 300 North Newton Avenue Newton, MS 39345 5. Carthage Co. 511 East Franklin Street Carthage, MS 39051 6. Raleigh Co. Highway 18 West Box 278 Raleigh, MS 39153 7. 1410 Broadway New York, NY 10018 8. Empire State Building New York, NY 10118 9. Atlanta Apparel Mart 240 Peachtree Street, N.W. Suite 2200 Atlanta, GA 30043 10. Bayside Mdse. Mart 150-160 Mt. Vernon Street Boston, MA 02125 11. California Mart 110 East Ninth Street Suite A727 Los Angeles, CA 90079 12. Miami International Mdse. Mart 777 N.W. 72nd Avenue Miami, FL 33126 13. Dallas Market Center 2100 Stemmons Freeway Dallas, Texas 75207

Exhibit 10.08(e) October 30, 1992 Congress Financial Corporation 1133 Avenue of the Americas New York, NY 10036 Re: Amendment to Financing Agreements Dear Gentlemen: Reference is made to the Account Financing Agreement [Security Agreement] between Congress Financial Corporation ("Congress") and I.C. Isaacs & Company L.P. ("Borrower") dated as of June 16, 1992 (the "Accounts Agreement") and all supplements thereto, and all other agreements, documents and instruments related thereto and executed in connection therewith including, the Covenant Supplement to Account Financing Agreement {Security Agreement} ("Covenant Supplement"), as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced (collectively, the "Financing Agreements"). Capitalized terms used herein, unless otherwise defined herein shall have the meaning set forth in the Financing Agreements. Borrower has requested certain modifications to the Financing Agreements and Congress is willing to agree to such modifications, subject to the terms and conditions set forth herein. In consideration of the foregoing, and the mutual agreements and covenants contained herein and for other good and valuable consideration, Borrower and Congress hereby agree as follows: 1. Subordinated Notes. Exhibit A of the Covenant Supplement shall be and is hereby amended by adding the following thereto: "Charles Boutwell $3,386.26 Junior Subordinated Note, dated September 28, 1992. Robert Flynn, Jr. $3,386.26 Junior Subordinated Note, dated September 28, 1992.

Marion Pelton $3,386.26 Junior Subordinated Note, dated September 28, 1992. Joanne Kraft $3,386.26 Junior Subordinated Note, dated September 28, 1992. Charles Godfrey $8,465.65 Junior Subordinated Note, dated September 21, 1992. Thomas Ormandy $1,693.13 Junior Subordinated Note, dated September 28, 1992. Eugene C. Wielepski $3,961.92 Junior Subordinated Note, dated September 28, 1992. Charles Chamblee $575.66 Junior Subordinated Note, dated September 28, 1992. William Myatt $575.66 Junior Subordinated Note, dated September 28, 1992. 2. Permitted Indebtedness. Exhibit D to Covenant Supplement is hereby amended by adding the following thereto: "Charles Boutwell $3,386.26 Junior Subordinated Note, dated September 28, 1992. Robert Flynn, Jr. $3,386.26 Junior Subordinated Note, dated September 28, 1992. Marion Pelton $3,386.26 Junior Subordinated Note, dated September 28, 1992. Joanne Kraft $3,386.26 Junior Subordinated Note, dated September 28, 1992. Charles Godfrey $8,465.65 Junior Subordinated Note, dated September 21, 1992. Thomas Ormandy $1,693.13 Junior Subordinated Note, dated September 28, 1992. Eugene C. Wielepski $3,961.92 Junior Subordinated Note, dated September 28, 1992. Charles Chamblee $575.66 Junior Subordinated Note, dated September 28, 1992. William Myatt $575.66 Junior Subordinated Note, dated September 28, 1992. 2

3. Effect and Entirety of this Amendment. Except as specifically modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and, in all other respects, the Financing Agreements are hereby ratified and confirmed by all parties hereto as of the date hereof. This Amendment represents and incorporates the entire understanding and agreements of the parties with respect to the matters set forth herein and the parties hereto agree that there are no representations, warranties, covenants or understandings of any kind, nature or description whatsoever made by Congress to Borrower with respect to this Amendment, except as specifically set forth herein. This Amendment represents the final agreement between the parties and may not be contradicted by evidence or prior, contemporaneous or subsequent oral agreements of the parties. 4. Waiver, Modification, Etc. No provision or term hereof may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought. 5. Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary to effectuate the provisions and purposes of this Amendment. 6. Counterparts. This Amendment may be executed in one or more counterparts which, taken together, shall constitute the agreement of the parties. Very truly yours, I.C. Isaacs & Company L.P. By: Isbyco, Inc., General Partner
By: /s/ Eugene C. Wielepski ___________________________ Title: VP ________________________

Agreed and Accepted: CONGRESS FINANCIAL CORPORATION
By: /s/ Alan Lapidus ________________________ Title: AVP _____________________

3

As of January 4, 1993 Congress Financial Corporation 1133 Avenue of the Americas New York, NY 10036 Re: Second Amendment to Financing Agreements Dear Gentlemen: Reference is made to Accounts Financing Agreement [Security Agreement] between Congress Financial Corporation ("Congress") and I.C. Issacs & Co. L.P. ("Borrower") dated as of June 16, 1992 ( the "Accounts Agreement") and all supplements thereto, and all other agreements, documents and instruments related thereto and executed in connection therewith including, the Covenant Supplement to Accounts Financing Agreement [Security Agreement] ("Covenant Supplement") and the Inventory and Equipment Security Agreement Supplement to Accounts Financing Agreement [Security Agreement] ("Inventory and Equipment Security Agreement"), as each is amended by the amendment to Financing Agreements dated October 30, 1992, as the same now exists or may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced (collectively, the "Financing Agreements"). Capitalized terms used herein, unless otherwise defined herein shall have the meaning set forth in the Financing Agreements. Borrower has requested supplemental loans in an amount up to $500,000 under the Financing Agreements and certain modifications to the Financing Agreements and Congress is willing to agree to such supplemental loans and modifications, subject to the terms and conditions set forth herein. In consideration of the foregoing, and the mutual agreements and covenants contained herein and for other good and valuable consideration, Borrower and Congress hereby agree as follows: 1. Maximum Credit. All references to "Maximum Credit" in the Financing Agreements, including but not limited to Section 1.7 of the Accounts Agreement, shall be deemed and each such reference is hereby amended by replacing the figure "$10,000,000" with the figure "$11,000,000". 2. Supplemental Loans. Section 2.1 of the Accounts Agreement is hereby deleted in its entirety and replaced with the following:

"2.1. You shall, in your discretion, make loans to us from time to time, at our request, of up to eighty percent (80%) of the Net Amount of Eligible Accounts (or such greater or lesser percentage thereof as you shall in your sole discretion determine from time to time). Subject to the terms and conditions hereof, you may also, in your discretion, make loans to us from time to time, at our request, of up to $500,000 in excess of such lending formula until May 28, 1993, subject to reduction thereof as hereafter set forth, (the "Supplemental Loans"); provided, however, the maximum aggregate outstanding amount of such Supplemental Loans shall not exceed the lesser of (a) $500,000 and (b) the sum of (i) fifty percent (50%) of the "Value" (as hereinafter defined) of our first quality imported finished goods Inventory (as such term is defined in the Inventory and Equipment Security Agreement) for our current selling season, acceptable to you in all respects, plus (ii) up to five percent (5%) of the Net Amount of Eligible Accounts. "Value" shall mean the lower of (a) cost computed on a first-in-first-out basis or (b) market price, as determined by you. Notwithstanding anything to the contrary contained herein, the maximum amount of permitted Supplemental Loans available to us from you shall decrease on the dates and in the amounts indicated below and any outstanding Supplemental Loans in excess of such permitted maximum amount shall be repaid concurrently with such reduction:
Date of Reduction ----------------May May May May 7, 1993 14, 1993 21, 1993 28, 1993 Reduced Maximum Amount ---------------------$375,000 $250,000 $125,000 -0- "

3. Capital Expenditures. Section 4.12 of the Covenant Supplement is hereby deleted in its entirety and replaced with the following: "4.12 Capital Expenditures. Borrower will not, in the aggregate, directly or indirectly, expend or commit to expend, Capital Expenditures in excess of $431,000 in fiscal year 1992 or in excess of $300,000 in any fiscal year thereafter." 4. Fee. In partial consideration of the amendments to the Financing Agreements as set forth herein, Borrower agrees to pay Congress a fee in an amount equal to $10,000, payable simultaneously with the execution hereof, which fee is fully -2-

earned as of the data hereof. At Congress' option, Congress may charge such fee directly to Borrower's loan account. 5. Effect and Entirety of this Amendment. Except as specifically modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and, in all others respects, the Financing Agreements are hereby ratified and confirmed by all parties hereto as of the date hereof. This Amendment represents and incorporates the entire understanding and agreements of the parties with respect to the matters set forth herein and the parties hereto agree that there are no representations, warranties, covenants or understandings of any kind, nature or description whatsoever made by Congress to Borrower with respect to this Amendment, except as specifically set forth herein. This Amendment represents the final agreement between the parties and may not be contradicted by evidence or prior, contemporaneous or subsequent oral agreements of the parties. 6. Waiver, Modification, Etc. No provision or term hereof may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought. 7. Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary to effectuate the provisions and purposes of this Amendment. 8. Counterparts. This Amendment may be executed in one or more counterparts which, taken together, shall constitute the agreement of the parties. Very truly yours, I.C. ISAACS & CO. L.P. By: ISBUYCO, INC., General Partner
By: /s/ Eugene C. Wielepski -------------------------Title: VP -----------------------

Agreed and Accepted: CONGRESS FINANCIAL CORPORATION
By: /s/ Alan M. Lapidus ------------------------------Title: AVP ------------------------

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As of March 10, 1993 Congress Financial Corporation 1133 Avenue of the Americas New York, NY 10036 Re: Third Amendment to Financing Agreements Dear Gentlemen: Reference is made to the Accounts Financing Agreement [Security Agreement] between Congress Financial Corporation ("Congress") and I.C. Isaacs & Co. L.P. ("Borrower") dated as of June 16, 1992 (the "Accounts Agreement") and all supplements thereto, and all other agreements, documents and instruments related thereto and executed in connection therewith including, the Covenant Supplement to Accounts Financing Agreement [Security Agreement] ("Covenant Supplement") and the Inventory and Equipment Security Agreement Supplement to Accounts Financing Agreement [Security Agreement] ("Inventory and Equipment Security Agreement"), as each is amended by the Amendment to Financing Agreements dated October 30, 1992 and Second Amendment to Financing Agreements dated as of January 4, 1993, as the same now exists or may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced (collectively, the "Financing Agreements"). Capitalized terms used herein, unless otherwise defined herein shall have the meaning set forth in the Financing Agreements. Borrower has requested certain modifications to the Financing Agreements and Congress is willing to agree to such modifications, subject to the terms and conditions set forth herein. In consideration of the foregoing, and the mutual agreements and covenants contained herein and for other good and valuable consideration, Borrower and Congress hereby agree as follows: 1. Supplemental Loans. Section 2.1 of the Accounts Agreement, as amended by the Second Amendment, is hereby deleted in its entirety and replaced with the following: "2.1 You shall, in your discretion, make loans to us from time to time, at our request, of up to eighty percent (80%) of the Net Amount of Eligible Accounts (or such greater or lesser percentage thereof as you shall in your sole discretion determine from time to time). Subject to the terms and conditions hereof, you

may also, in your discretion, make loans to us from time to time, at our request, of up to $1,000,000 in excess of such lending formula until July 29, 1993, subject to reduction thereof as hereafter set forth, (the "Supplemental Loans"); provided, however, the maximum aggregate outstanding amount of such Supplemental Loans shall not exceed the lesser of (a) $1,000,000 and (b) the sum of (i) fifty percent (50%) of the aggregate "Value" (as hereinafter defined) of our first quality (A) imported finished goods Inventory (as such term is defined in the Inventory and Equipment Security Agreement), (B) imported raw materials Inventory and (C) imported raw materials Inventory which has been manufactured in the United States into finished goods Inventory, provided, however, in each such cash such Inventory is held by us for manufacturing and/or resale in our current selling season and is acceptable to you in all respects, plus (ii) up to five percent (5%) of the Net Amount of Eligible Accounts. "Value" shall mean the lower of (a) cost computed on a first-in-first-out basis or (b) market price, as determined by you. Notwithstanding anything to the contrary contained herein the outstanding balance of Supplemental Loans shall be repaid in full on July 30, 1993." 2. Fee. In partial consideration of the amendments to the Financing Agreements as set forth herein, Borrower agrees to pay Congress a fee in an amount equal to $7,500, payable simultaneously with the execution hereof, which fee is fully earned as of the date hereof. At Congress' option, Congress may charge such fee directly to Borrower's loan account. 3. Inventory Reports. In addition to any reports or appraisals as to Inventory which Borrower is currently required to deliver to Congress pursuant to the Financing Agreements, Borrower shall deliver to Congress, not less than once a week, a report of its first quality imported raw materials Inventory, imported finished goods Inventory and imported raw materials Inventory that has been converted into finished goods Inventory, all in a form satisfactory to Congress. 4. Effect and Entirety of this Amendment. Except as specifically modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and, in all other respects, the Financing Agreements are hereby ratified and confirmed by all parties hereto as of the date hereof. This Amendment represents and incorporates the entire understanding and agreements of the parties with respect to the matters set forth herein and the parties hereto agree that there are no representations, warranties, covenants or understandings of any kind, nature or description whatsoever made by Congress to -2-

Borrower with respect to this Amendment, except as specifically set forth herein. This Amendment represents the final agreement between the parties and may not be contradicted by evidence or prior, contemporaneous or subsequent oral agreements of the parties. 5. Waiver, Modification, Etc. No provision or term hereof may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought. 6. Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary to effectuate the provisions and purposes of this Amendment. 7. Counterparts. This Amendment may be executed in one or more counterparts which, taken together, shall constitute the agreement of the parties. Very truly yours, I.C. ISAACS & CO. L.P. By: ISBUYCO, INC., General Partner
By: /s/ Gerald W. Lear ------------------Title: CEO -------------------

Agreed and Accepted: CONGRESS FINANCIAL CORPORATION
By: /s/ Alan M. Lapidus --------------Title: AVP --------------Acknowledged: /s/ Robert J. Arnot --------------ROBERT ARNOT /s/ Gary Brashers --------------GARY BRASHERS /s/ Stanley Keller --------------STANLEY KELLER

[SIGNATURES CONTINUED ON NEXT PAGE] -3-

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
/s/ Gerald Lear -----------GERALD LEAR /s/ Eugene Wielepski -----------EUGENE WIELEPSKI /s/ Ira Hechler -----------IRA HECHLER

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May 1, 1993 Congress Financial Corporation 1133 Avenue of the Americas New York, NY 10036 Re: Fourth Amendment to Financing Agreements Gentlemen: Reference is made to the Accounts Financing Agreement [Security Agreement] between Congress Financial Corporation ("Congress") and I.C. Isaacs & Co. L.P. ("Borrower") dated as of June 16, 1992 (the "Accounts Agreement") and all supplements thereto, and all other agreements, documents and instruments related thereto and executed in connection therewith including, the Covenant Supplement to Accounts Financing Agreement [Security Agreement] ("Covenant Supplement") and the Inventory and Equipment Security Agreement Supplement to Accounts Financing Agreement [Security Agreement] ("Inventory and Equipment Security Agreement"), as each is amended by the Amendment to Financing Agreements dated October 30, 1992, Second Amendment to Financing Agreements dated as of January 4, 1993 and the Third Amendment to Financing Agreements dated as of March 10, 1993, as the same now exists or may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced (collectively, the "Financing Agreements"). Capitalized terms used herein, unless otherwise defined herein shall have the meaning set forth in the Financing Agreements. Borrower has requested supplemental loans in an amount up to $2,500,000 under the Financing Agreements and certain modifications to the Financing Agreements and Congress is willing to agree to such supplemental loans and modifications, subject to the terms and conditions set forth herein. In consideration of the foregoing, and the mutual agreements and covenants contained herein and for other good and valuable consideration, Borrower and Congress hereby agree as follows: 1. Maximum Credit. All references to Maximum Credit in the Financing Agreements, including but not limited to Section 1.7 of the Accounts Agreement, shall be deemed and each such reference is hereby amended by replacing the figure "$11,000,000" with the figure "$14,000,000".

2. Supplemental Loans. Section 2.1 of the Accounts Agreement, as amended by the Third Amendment, is hereby deleted in its entirety and replaced with the following: "2.1. You shall, in your discretion, make loans to us from time to time, at our request, of up to eighty percent (80%) of the Net Amount of Eligible Accounts (or such greater or lesser percentage thereof as you shall in your sole discretion determine from time to time). Subject to the terms and conditions hereof, you may also, in your discretion, make loans to us from time to time, at our request, of up to $2,500,000 in excess of such lending formula until November 11, 1993, subject to reduction thereof as hereafter set forth, (the "Supplemental Loans"); provided, however, the maximum aggregate outstanding amount of such Supplemental Loans shall be reduced, commencing September 10, 1993, in successive and cumulative amount of $250,000 each on September 10, 1993 and the last business day of each week thereafter. Notwithstanding anything to the contrary contained herein the entire outstanding balance of all Supplemental Loans shall be repaid in full not later than November 12, 1993." 3. Supplemental Loan and Increased Line Fee. In partial consideration of the increase in the Maximum Credit and Supplemental Loans as set forth herein, Borrower agrees to pay Congress a fee in an amount equal to $45,000, payable simultaneously with the execution hereof, which fee is fully earned as of the date hereof. At Congress' option, Congress may charge such fee directly to Borrower's loan account. 4. Unused Line Fee. Section 3.5 of the Accounts Agreement is amended by replacing the figure "$8,000,000" in two (2) places therein with the figure "$11,500,000" in such two (2) places. 5. Effect and Entirety of this Amendment. Except as specifically modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and, in all other respects, the Financing Agreements are hereby ratified and confirmed by all parties hereto as of the date hereof. This Amendment represents and incorporates the entire understanding and agreements of the parties with respect to the matters set forth herein and the parties hereto agree that there are no representations, warranties, covenants or understandings of any kind, nature or description whatsoever made by Congress to Borrower with respect to this Amendment, except as specifically set forth herein. This Amendment represents the final agreement between the parties and may not be contradicted by evidence or -2-

prior, contemporaneous or subsequent oral agreements of the parties. 6. Waiver, Modification, Etc. No provision or term hereof may be modified, alter, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought. 7. Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary to effectuate the provisions and purposes of this Amendent. 8. Counterparts. This Amendent may be executed in one or more counterparts which, taken together, shall constitute the agreement of the parties. Very truly yours, I.C. ISAACS & CO. L.P. By: ISBUYCO, INC., General Partner
By: /s/ Gerald W. Lear -------------------------Title: CEO --------------------------

Agreed and Accepted:

CONGRESS FINANCIAL CORPORATION
By: /s/ James DeSantis --------------------------Title: Vice President ------------------------

ACKNOWLEDGED:
/s/ Ira Hechler ------------------------------IRA HECHLER /s/ Robert Arnot ------------------------------ROBERT ARNOT /s/ Gerald Lear ------------------------------GERALD LEAR /s/ Eugene Wielepski ------------------------------EUGENE WIELEPSKI /s/ Gary Brashers ------------------------------GARY BRASHERS /s/ Stanley Keller ------------------------------STANLEY KELLER

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January 1, 1994 Congress Financial Corporation 1133 Avenue of the Americas New York, NY 10036 Re: Fifth Amendment to Financing Agreements Gentlemen: Reference is made to the Accounts Financing Agreement [Security Agreement] between Congress Financial Corporation ("Congress") and I.C. Isaacs & Co. L.P. ("Borrower") dated as of June 16, 1992 (the "Accounts Agreement") and all supplements thereto, and all other agreements, documents and instruments related thereto and executed in connection therewith including, the Covenant Supplement to Accounts Financing Agreement [Security Agreement] ("Covenant Supplement"), the Inventory and Equipment Security Agreement Supplement to Accounts Financing Agreement [Security Agreement] ("Inventory and Equipment Security Agreement") and the Trade Financing Agreement Supplement to Accounts Financing Agreement [Security Agreement] (the "Trade Financing Agreement"), as each is amended by the Amendment to Financing Agreements dated October 30, 1992, Second Amendment to Financing Agreements dated as of January 4, 1993, Third Amendment to Financing Agreements dated as of March 10, 1993 and Fourth Amendment to Financing Agreements dated May 1, 1993, as the same now exist or may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced (collectively, the "Financing Agreements"). Capitalized terms used herein, unless otherwise defined herein, shall have the meaning set forth in the Financing Agreements. Borrower has requested an extension of, and certain modifications to, the Financing Agreements and Congress is willing to agree to such extension and modifications, subject to the terms and conditions set forth herein. In consideration of the foregoing, and the mutual agreements and covenants contained herein and for other good and valuable consideration, Borrower and Congress hereby agree as follows: 1. Supplemental Loans. Section 2.1 of the Accounts Agreement, as amended by the Fourth Amendment, is hereby deleted in its entirety and replaced with the following: "2.1. You shall, in your discretion, make loans to us from time to time, at our request, of up to eighty percent (80%) of the Net Amount of Eligible Accounts (or such greater or lesser percentage thereof as you shall in your sole discretion determine from time to time). Subject to the terms and conditions hereof, you may also, in your discretion, make loans to us from time to time, in excess of such lending formula, at our request, of up to (a) $2,000,000 from the date hereof until February 28, 1994, and (b) $1,500,000 from March 1, 1994 until August 31, 1994,

subject to further reduction thereof as hereafter set forth (collectively, the "Supplemental Loans"); provided, however, the maximum aggregate outstanding amount of such Supplemental Loans shall be further reduced, commencing August 12, 1994, in successive and cumulative amounts of $375,000 each on August 12, 1994, August 19, 1994, August 26, 1994 and August 31, 1994. Notwithstanding anything to the contrary contained herein, the outstanding balance of any Supplemental Loans in excess of $1,500,000 shall be repaid not later than March 1, 1994 and the entire outstanding balance of all Supplemental Loans shall be repaid in full not later than August 31, 1994." 2. Renewal Date. Section 9.1 of the Accounts Agreement is hereby amended by deleting the first sentences thereof in it entirety and substituting the following therefor: "9.1. This Agreement shall become effective upon acceptance by you and shall continue in full force and effect for a term ending June 16, 1995 (the "Renewal Date") and from year to year thereafter, unless sooner terminated pursuant to the terms hereof." 3. Early Termination Fee. Section 9.2 of the Accounts Agreement is hereby amended by adding the following sentence at the end of Section 9.2 set forth on the Rider to the Accounts Agreement: ", or (c) one-half of one (1/2 of 1%) percent of the Maximum Credit if such termination occurs after the second anniversary of this Agreement but prior to the third anniversary of this Agreement." 4. Letter of Credit Sublimit. Section 1.5 of the Trade Financing Agreement is hereby amended by deleting the reference to "$1,500,000" and replacing it with "$2,000,000". 5. Supplemental Loan and Extension Fee. In partial consideration of the extension of the term of the Financing Agreements, the Supplemental Loans and the other modifications to the Financing Agreements as set forth herein, Borrower agrees to pay Congress a fee in an amount equal to $35,000, payable simultaneously with the execution hereof, which fee is fully earned as of the date hereof. At Congress' option, Congress may charge such fee directly to Borrower's loan account. 6. Effect and Entirety of this Amendment. Except as specifically modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and, in all other respects, the Financing Agreements are hereby ratified and confirmed by all parties hereto as of the date hereof. This Amendment represents and incorporates the entire understanding and agreements of the parties with respect to the matters set forth herein and the parties hereto agree that there are no representations, warranties, covenants or understandings of any kind, nature or description whatsoever made by Congress to Borrower with respect to this Amendment, except as specifically set forth herein. This Amendment represents the final agreement between the parties and may not be contradicted by evidence or -2-

prior, contemporaneous or subsequent oral agreements of the parties. 7. Waiver, Modification, Etc. No provision or term hereof may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought. 8. Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary to effectuate the provisions and purposes of this Amendment. 9. Counterparts. This Amendment may be executed in one or more counterparts which, taken together, shall constitute the agreement of the parties. Very truly yours, I.C. ISAACS & CO. L.P. By: ISBUYCO, INC., General Partner
By: /s/ Robert J. Arnot -------------------------Title: Chairman -----------------------

Agreed and Accepted: CONGRESS FINANCIAL CORPORATION
By: /s/ James DeSantis --------------------Title: Vice President ------------------

ACKNOWLEDGED:
/s/ Ira Hechler ------------------------Ira Hechler /s/ Robert Arnot ------------------------Robert Arnot /s/ Gerald Lear ------------------------Gerald Lear /s/ Eugene Wielepski ------------------------Eugene Wielepski /s/ Gary Brashers ------------------------Gary Brashers /s/ Stanley Keller ------------------------Stanley Keller

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[Letterhead] September 1, 1993 Congress Financial Corporation 1133 Avenue of the Americas New York, New York 10036 Re: Sixth Amendment to Financing Agreements Gentlemen: Reference is made to our letter agreement with respect to the above, dated May 1, 1993 (the "Fourth Amendment"). All capitalized terms used herein shall have the meanings set forth in the Fourth Amendment. This will confirm our mutual agreement as follows: 1. The Maximum Credit as defined in the Fourth Amendment and the Financing Agreements shall be increased to the sum of $15,000,000 on and after the date hereof; 2. Section 3.5 of the Accounts Agreement is amended as of the date hereof by replacing the figure "$11,500,000 in two places therein with the figure "12,500,000" in such two places; 3. In consideration of the foregoing, the undersigned agrees to pay you a fee in the amount of $10,000, payable simultaneously with the execution hereof, which fee is fully earned as of the date hereof and, at your option, you may charge such fee directly to our loan account with you; 4. Except as hereinabove specifically provided, the Financing Agreements are hereby ratified, confirmed and extended; and 5. This letter may be executed in one or more counterparts which, taken together shall constitute the agreement of the parties. Very truly yours, I.C. ISAACS & CO. L.P. By: ISBUYCO, INC., General Partner
By: /s/ Eugene C. Wiclopski ------------------------------Title: VP ----------------------------

Agreed and Accepted: CONGRESS FINANCIAL CORPORATION
By: /s/ Alan M. Lapidus -------------------------Title: AVP -----------------------

August 31 , 1994 Congress Financial Corporation 1133 Avenue of the Americas New York, NY 10036 Re: Seventh Amendment to Financing Agreements Gentlemen: Reference is made to the Accounts Financing Agreement [Security Agreement] between Congress Financial Corporation ("Congress") and I.C. Isaacs & Co. L.P. ("Borrower") dated as of June 16, 1992 ( the "Accounts Agreement") and all supplements thereto, and all other agreements, documents and instruments related thereto and executed in connection therewith including, the Covenant Supplement to Accounts Financing Agreement [Security Agreement], the Inventory and Equipment Security Agreement Supplement to Accounts Financing Agreement [Security Agreement] and the Trade Financing Agreement Supplement to Accounts Financing Agreement [Security Agreement], as from time to time amended, including the Fifth Amendment to Financing Agreements dated January 1, 1994, as the same now exist or may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced (collectively, the "Financing Agreements"). Capitalized terms used herein, unless otherwise defined herein, shall have the meaning set forth in the Financing Agreements. Borrower has requested certain modifications to the Financing Agreements and Congress is willing to agree to such modifications, subject to the terms and conditions set forth herein. In consideration of the foregoing, and the mutual agreements and covenants contained herein and for other good valuable consideration, Borrower and Congress hereby agree as follows: 1. Supplemental Loans. Section 2.1 of the Accounts Agreement, as amended by the Fifth Amendment, is hereby amended by (a) deleting all references to "August 31, 1994" contained therein and replacing them with "October 31, 1994", (b) deleting all references to "August 12, 1994" contained therein and replacing them with "October 10, 1994", (c) deleting the reference to "August 19, 1994" contained therein and replacing it with "October 17, 1994" and (d) deleting the reference to "August 26, 1994" contained therein and replacing it with "October 24, 1994". 2. Extension Fee. In partial consideration of the extension of the repayment of the Supplemental Loans as set forth herein, Borrower agrees to pay Congress an extension fee in an amount equal to $25,000, payable simultaneously with the execution hereof, which fee is fully earned as of the date

hereof. At Congress' option, Congress may charge such fee directly to Borrower's loan account. 3. Effect and Entirety of this Amendment. Except as specifically modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and, in all other respects, the Financing Agreements are hereby ratified and confirmed by all parties hereto as of the date hereof. This Amendment represents and incorporates the entire understanding and agreements of the parties with respect to the matters set forth herein and the parties hereto agree that there are no representations, warranties, covenants or understandings of any kind, nature or description whatsoever made by Congress to Borrower with respect to this Amendment, except as specifically set forth herein. This Amendment represents the final agreement between the parties as to the subject matter hereof and may not be contradicted by evidence or prior, contemporaneous or subsequent oral agreements of the parties. 4. Waiver, Modification, Etc. No provision or term hereof may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought. 5. Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary to effectuate the provisions and purposes of this Amendment. 6. Counterparts. This Amendment may be executed in one or more counterparts which, taken together, shall constitute the agreement of the parties. Very truly yours, I.C. ISAACS & CO. L.P. By: ISBUYCO, INC., General Partner
By: /s/ Gerald W. Lear -------------------Title: President --------------------

Agreed and Accepted:

CONGRESS FINANCIAL CORPORATION
By: /s/James DeSantis -------------------Title: Vice President --------------------

[SIGNATURES CONTINUE ON NEXT PAGE] -2-

[SIGNATURES CONTINUED FROM PREVIOUS PAGE] ACKNOWLEDGED:
/s/ Ira Hechler --------------------IRA HECHLER /s/ Robert Arnot --------------------ROBERT ARNOT /s/ Gerald Lear --------------------GERALD LEAR /s/ Eugene Wielepski --------------------EUGENE WIELEPSKI /s/ Gary Brashers --------------------GARY BRASHERS /s/ Stanley Keller --------------------STANLEY KELLER

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December 31, 1994 Congress Financial Corporation 1133 Avenue of the Americas New York, NY 10036 Re: Eighth Amendment to Financing Agreements Gentlemen: Reference is made to the Accounts Financing Agreement [Security Agreement] between Congress Financial Corporation ("Congress") and I.C. Isaacs & Co. L.P. ("Borrower") dated as of June 16, 1992, as amended (the "Accounts Agreement") and all supplements thereto, and all other agreements, documents and instruments related thereto and executed in connection therewith (collectively, all of the foregoing, as the same now exist or may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the "Financing Agreements"). Capitalized terms used herein, unless otherwise defined herein, shall have the meaning set forth in the Financing Agreements. Borrowers has requested certain amendments to the Financing Agreements and Congress is willing to agree to such amendments, subject to the terms and conditions set forth herein. In consideration of the foregoing, and the mutual agreements and covenants contained herein and for other good and valuable consideration, Borrower and Congress hereby agree as follows: 1. Definitions. The definition of "Financing Agreements" contained in the Covenant Supplement to the Accounts Agreement between Borrower and Congress is hereby amended to include, without limitation, the letter agreement re: Inventory Loans, dated of even date herewith, by Borrower in favor of Congress. 2. Letter of Credit Sublimit. Section 1.5 of the Trade Financing Agreement and Supplement to Accounts Agreement, dated June 16, 1992, by Borrower in favor of Congress, is hereby amended by deleting the reference to "$3,000,000" and replacing it with "$5,000,000". 3. Effect and Entirety of this Amendment. Except as specifically modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and, in all other respects, the Financing Agreements are hereby ratified and confirmed by all parties hereto as of the date hereof. This Amendment represents and incorporates the entire understanding and agreements of the parties with respect to the matters set forth herein and the parties hereto agree that there are no representations, warranties, covenants or understandings of any kind, nature or description whatsoever made by Congress to Borrower with respect to this Amendment, except as specifically set forth herein. This Amendment represent the final agreement

between the parties as to the subject matter hereof and may not be contradicted by evidence or prior, contemporaneous or subsequent oral agreements of the parties. 4. Waiver, Modification, Etc. No provision or term hereof may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought. 5. Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary to effectuate the provisions and purposes of this Amendment. 6. Counterparts. This Amendment may be executed in one or more counterparts which, taken together, shall constitute the agreement of the parties. Very truly yours, I.C. ISAACS & CO. L.P. By: ISBUYCO, INC., General Partner
By: /s/ Robert J. Arnot ------------------------Title: Chairman -------------------------

Agreed and Accepted:

CONGRESS FINANCIAL CORPORATION
By: /s/ Eric S. Miller ------------------------Title: Asst. Vice President -------------------------

ACKNOWLEDGED:
/s/ Ira Hechler ------------------------------IRA HECHLER /s/ Robert Arnot ------------------------------ROBERT ARNOT /s/ Gerald Lear ------------------------------GERALD LEAR /s/ Eugene Wielepski ------------------------------EUGENE WIELEPSKI /s/ Gary Brashers ------------------------------GARY BRASHERS /s/ Stanley Keller ------------------------------STANLEY KELLER

April , 1995 Congress Financial Corporation 1133 Avenue of the Americas New York, New York 10036 Re: Ninth Amendment to Financing Agreements Gentlemen: Reference is made to the Accounts Financing Agreement [Security Agreement] between Congress Financial Corporation ("Congress") and I.C. Isaacs & Co. L.P. ("Borrower") dated as of June 16, 1992, as amended (the "Accounts Agreement") and all supplements thereto, and all other agreements, documents and instruments related thereto and executed in connection therewith (collectively, all of the foregoing, as the same now exist or may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the "Financing Agreements"). Capitalized terms used herein, unless otherwise defined herein, shall have the meaning set forth in the Financing Agreements. Borrower has requested an extension of, and certain modifications to, the Financing Agreements and Congress is willing to agree to such extension and modifications, subject to the terms and conditions set forth herein. In consideration of the foregoing, and the mutual agreements and covenants contained herein and for other good and valuable consideration, Borrower and Congress hereby agree as follows: 1. Supplemental Loans. Section 2.1 of the Accounts Agreement, as amended, is hereby deleted in its entirety and replaced with the following: "2.1 You shall, in your discretion, make loans to us from time to time, at our request, of up to eighty (80%) percent of the Net Amount of Eligible Accounts (or such greater or lesser percentage thereof as you shall in your sole discretion determine from time to time). Subject to the terms and conditions hereof, you may also, in your discretion, make loans to us from time to time, in excess of such lending formula, at our request, of up to $1,000,000 from June 15, 1995 until August 15, 1995 (the "Supplemental Loans"). Notwithstanding anything to the contrary contained herein, the entire outstanding balance of all Supplemental Loans shall be repaid in full not later than August 15, 1995." 2. Interest. Effective June 1, 1995, Section 3.1 of the Accounts Agreement shall be automatically amended by deleting the reference to "two and one-half percent (2-1/2%): and replacing it with "one percent (1%)".

3. Unused Line Fee. Effective June 1, 1995, Section 3.5 of the Accounts Agreement, as amended, shall be automatically further amended by deleting all references to "$12,500,000" and replacing them with "$10,000,000". 4. Servicing Fee. Effective June 1, 1995, Section 3.6 of the Accounts Agreement shall be automatically amended by deleting the reference to "$2,000" and replacing it with "$1,500". 5. Clearance Days. Effective June 1, 1995, Section 5.1 of the Accounts Agreement shall be automatically amended by deleting the reference to "two (2) business days" and replacing it with "one (1) business day". 6. Renewal Date. Section 9.1 of the Accounts Agreement, as amended, is hereby further amended by deleting the first sentence thereof in its entirety and substituting the following therefor: "9.1 This Agreement shall become effective upon acceptance by you and shall continue in force and effect for a term ending June 16, 1996 (the "Renewal Date") and from year to year thereafter, unless sooner terminated pursuant to the terms hereof." 7. Early Termination Fee. Section 9.2 of the Accounts Agreement, as amended, is hereby further amended by deleting the period, and adding the following, at the end of the first sentence of such Section: ", or (d) one (1%) percent of the Maximum Credit if such termination occurs after the third anniversary of this Agreement but prior to the fourth anniversary of this Agreement." 8. Letter of Credit Fee. Effective June 1, 1995, Section 1.5 of the Trade Financing Agreement Supplement to Accounts Agreement, dated June 16, 1992, by Borrower in favor of Congress, shall be automatically amended by deleting the reference to ".2083%" and replacing it with ".1667%". 9. Effect and Entirety of this Amendment. Except as specifically modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and, in all other respects, the Financing Agreements are hereby ratified and confirmed by all parties hereto as of the date hereof. This Amendment represents and incorporates the entire understanding and agreements of the parties with respect to the matters set forth herein and the parties hereto agree that there are no representations, warranties, covenants or understandings of any kind, nature or description whatsoever made by Congress to Borrower with respect to this Amendment, except as specifically set forth herein. This Amendment represents the final agreement between the parties as to the subject matter hereof and may not -2-

be contradicted by evidence or prior, contemporaneous or subsequent oral agreements of the parties. 10. Waiver, Modification, Etc. No provision or term hereof may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought. 11. Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary to effectuate the provisions and purposes of this Amendment. 12. Counterparts. This Amendment may be executed in one or more counterparts which, taken together, shall constitute the agreement of the parties. Very truly yours, I.C. ISAACS & CO. L.P. By: ISBUYCO, Inc., General Partner
By: /s/ Robert J. Arnot -------------------------Title: Chairman -----------------------

Agreed and Accepted: CONGRESS FINANCIAL CORPORATION
By: /s/ Eric S. Miller -------------------------Title: Asst. Vice President -----------------------

ACKNOWLEDGED:
/s/ Ira Hechler -----------------------------IRA HECHLER /s/ Robert J. Arnot -----------------------------ROBERT ARNOT /s/ Gerald W. Lear -----------------------------GERALD LEAR /s/ Eugene Wielepski -----------------------------EUGENE WIELEPSKI /s/ Gary Brashers -----------------------------GARY BRASHERS /s/ Stanley Keller -----------------------------STANLEY KELLER

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June 23, 1995 Congress Financial Corporation 1133 Avenue of the Americas New York, New York 10036 Re: Tenth Amendment to Financing Agreements Gentlemen: Reference is made to the Accounts Financing Agreement [Security Agreement] between Congress Financial Corporation ("Congress") and I.C. Isaacs & Co. L.P. ("Borrower") dated as of June 16, 1992, as amended (the "Accounts Agreement") and all supplements thereto, and all other agreements, documents and instruments related thereto and executed in connection therewith (collectively, all of the foregoing, as the same now exist or may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the "Financing Agreements"). Capitalized terms used herein, unless otherwise defined herein, shall have the meaning set forth in the Financing Agreements. Borrower has requested certain amendments to the Financing Agreements and Congress is willing to agree to such amendments, subject to the terms and conditions set forth herein. In consideration of the foregoing, and the mutual agreements and covenants contained herein and for other good and valuable consideration, Borrower and Congress hereby agree as follows: 1. Supplemental Loans. Section 2.1 of the Accounts Agreement, as amended, is hereby deleted in its entirety and replaced with the following: "2.1 You shall, in your discretion, make loans to us from time to time, at our request, of up to eighty (80%) percent of the Net Amount of Eligible Accounts (or such greater or lesser percentage thereof as you shall in your sole discretion determine from time to time). Subject to the terms and conditions hereof, you may also, in your discretion, make loans to us from time to time, in excess of such lending formula, at our request, of up to $1,500,000 from June 15, 1995 until August 15, 1995 (the "Supplemental Loans"). Notwithstanding anything to the contrary contained herein, the entire outstanding balance of all Supplemental Loans shall be repaid in full not later than August 15, 1995." 2. Letter of Credit Sublimit. Section 1.5 of the Trade Financing Agreement Supplement to Accounts Financing

Agreement, dated June 16, 1992, by Borrower in favor of Congress (the "Trade Financing Supplement"), is hereby amended by deleting the reference to "$5,000,000" and replacing it with "$6,000,000". 3. Letter of Credit Fee. Effective June 1, 1995, Section 1.8 of the Trade Financing Supplement shall be automatically amended by deleting the reference to ".2083%" and replacing it with ".1667%". 4. Effect and Entirety of this Amendment. Except as specifically modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and, in all other respects, the Financing Agreements are hereby ratified and confirmed by all parties hereto as of the date hereof. This Amendment represents and incorporates the entire understanding and agreements of the parties with respect to the matters set forth herein and the parties hereto agree that there are no representations, warranties, covenants or understandings of any kind, nature or description whatsoever made by Congress to Borrower with respect to this Amendment, except as specifically set forth herein. This Amendment represents the final agreement between the parties as to the subject matter hereof and may not be contradicted by evidence or prior, contemporaneous or subsequent oral agreements of the parties. 5. Waiver, Modification, Etc. No provision or term hereof may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought. 6. Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary to effectuate the provisions and purposes of this Amendment. 7. Counterparts. This Amendment may be executed in one or more counterparts which, taken together, shall constitute the agreement of the parties. Very truly yours, I.C. ISAACS & CO. L.P. By: ISBUYCO, INC. General Partner
/s/ Gerald W. Lear -------------------------Title: Pres - CEO -----------------------By:

[SIGNATURES CONTINUE ON FOLLOWING PAGE] -2-

[SIGNATURES CONTINUED FROM PREVIOUS PAGE] Agreed and Accepted: CONGRESS FINANCIAL CORPORATION
By: /s/ Eric S. Miller ------------------------------Title: Asst. Vice President ----------------------------

ACKNOWLEDGED:
/s/ IRA HECHLER -----------------------------IRA HECHLER /s/ ROBERT ARNOT -----------------------------ROBERT ARNOT /s/ GERALD LEAR -----------------------------GERALD LEAR /s/ EUGENE WIELEPSKI -----------------------------EUGENE WIELEPSKI /s/ GARY BRASHERS -----------------------------GARY BRASHERS /s/ STANLEY KELLER -----------------------------STANLEY KELLER

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As of January 1, 1996 Congress Financial Corporation 1133 Avenue of the Americas New York, New York 10036 Re: Eleventh Amendment to Financing Agreements Gentlemen: Reference is made to the Accounts Financing Agreement [Security Agreement] between Congress Financial Corporation ("Congress") and I.C. Isaacs & Co. L.P. ("Borrower") dated as of June 16, 1992, as amended (the "Accounts Agreement") and all supplements thereto, and all other agreements, documents and instruments related thereto and executed in connection therewith (collectively, all of the foregoing, as the same now exist or may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the "Financing Agreements"). Capitalized terms used herein, unless otherwise defined herein, shall have the meaning set forth in the Financing Agreements. Borrower has requested certain amendments to the Financing Agreements and Congress is willing to agree to such amendments, subject to the terms and conditions set forth herein. In consideration of the foregoing, and the mutual agreements and covenants contained herein and for other good and valuable consideration, Borrower and Congress hereby agree as follows: 1. Supplemental Loans. Section 2.1 of the Accounts Agreement, as amended, is hereby deleted in its entirety and replaced with the following: "2.1 You shall, in your discretion, make loans to us from time to time, at our request, of up to eighty (80%) percent of the Net Amount of Eligible Accounts (or such greater or lesser percentage thereof as you shall in your sole discretion determine from time to time). Subject to the terms and conditions hereof, you may also, in your discretion, make loans to us from time to time, in excess of such lending formula, at our request, of up to $1,500,000 from January 1, 1996 until February 29, 1996 (the "Supplemental Loans"). Notwithstanding anything to the contrary contained herein, the entire outstanding balance of all Supplemental Loans shall be repaid in full not later than February 29, 1996." 2. Fees. In consideration of Congress' agreement to make the Supplemental Loans available as set froth in paragraph 1

hereof, Borrower agrees to pay Congress a fee in an amount equal to $7,500, which fee shall be payable simultaneously with the execution hereof, and which fee is fully earned as of the date hereof. 3. Effect and Entirety of this Agreement. Except as specifically modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and, in all other respects, the Financing Agreements are hereby ratified and confirmed by all parties hereto as of the date hereof. This Amendment represents and incorporates the entire understanding and agreements of the parties with respect to the matters set forth herein and the parties hereto agree that there are no representations, warranties, covenants or understandings of any kind, nature or description whatsoever made by Congress to Borrower with respect to this Amendment, except as specifically set forth herein. This Amendment represents the final agreement between the parties as to the subject matter hereof and may not be contradicted by evidence or prior, contemporaneous or subsequent oral agreements of the parties. 4. Waiver, Modification, Etc. No provision or term hereof may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought. 5. Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary to effectuate the provisions and purposes of this Amendment. 6. Counterparts. This Amendment may be executed in one or more counterparts which, taken together, shall constitute the agreement of the parties. Very truly yours, I.C. ISAACS & CO. L.P. By: ISBUYCO, INC., General Partner
By: /s/ Robert J. Arnot --------------------------Title: /s/ Chairman -----------------------[SIGNATURES CONTINUE ON FOLLOWING PAGE]

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE] Agreed and Accepted: CONGRESS FINANCIAL CORPORATION
By: /s/ Eric S. Miller ------------------------Title: Asst. Vice President ----------------------

ACKNOWLEDGED:
/s/ Ira Hechler ------------------------------IRA HECHLER /s/ Robert Arnot -------------------------------ROBERT ARNOT /s/ Gerald Lear -------------------------------GERALD LEAR /s/ Eugene Wielepski -------------------------------EUGENE WIELEPSKI /s/ Gary Brashers -------------------------------GARY BRASHERS /s/ Stanley Keller -------------------------------STANLEY KELLER

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June 25, 1996 Congress Financial Corporation 1133 Avenue of the Americas New York, New York 10036 Re: Twelfth Amendment to Financing Agreements Gentlemen: Reference is made to the Accounts Financing Agreement [Security Agreement] between Congress Financial Corporation ("Congress") and I.C. Isaacs & Company L.P. ("Borrower") dated as of June 16, 1992, as amended (the "Accounts Agreement") and all supplements thereto, and all other agreements, documents and instruments related thereto and executed in connection therewith (collectively, all of the foregoing, as the same now exist or may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the "Financing Agreements"). Capitalized terms used herein, unless otherwise defined herein, shall have the meaning set forth in the Financing Agreements. Borrower has requested an extension of, and certain modifications to, the Financing Agreements and Congress is willing to agree to such extension and modifications, subject to the terms and conditions set forth herein. In consideration of the foregoing, and the mutual agreements and covenants contained herein and for other good and valuable consideration, Borrower and Congress hereby agree as follows: 1. Definitions. (a) Additional Definition. As used herein the term "Amended Term Note" shall mean the Amended and Restated Term Promissory Note, dated of even date herewith, made by Borrower payable to the order of Congress in the original principal amount of $1,000,000 as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. (b) Amendments to Definitions. (i) All references to the term "Term Note" herein and in the Covenant Supplement and the other Financing Agreements shall be deemed and each such reference is hereby amended to mean the Amended Term Note as defined herein.

(ii) All references to the term "Term Loan" herein and in the Covenant Supplement and the other Financing Agreements shall be deemed and each such reference is hereby amended to mean the outstanding Obligations owed to Congress by Borrower consisting of the indebtedness evidenced by the Amended Term Note. (c) Interpretation. For purposes of this Amendment, unless otherwise defined herein, all terms used herein, including, but not limited to, those terms used and/or defined in the recitals hereto, shall have the respective meanings assigned to such terms in the other Financing Agreements. 2. Term Loan. (a) Borrower hereby acknowledges, confirms and agrees that as of June 1, 1996, the aggregate principal amount outstanding in respect of the Term Loan (as such term is defined in the Financing Agreements immediately prior to the effectiveness of this Amendment) is $216,651. On the date hereof, subject to the terms and conditions contained herein, Congress shall make an additional advance to Borrower in the amount of $783,349, so that the outstanding principal balance of the Term Loan shall be increased to $1,000,000. Such Term Loan shall be (i) evidenced by the Amended Term Note executed and delivered by Borrower to Congress concurrently herewith, (ii) repaid, together with interest and other amounts due thereunder, in accordance with the terms and provisions of such Amended Term Note and the other Financing Agreements, and (iii) secured by all of the Collateral. Borrower may not reborrow any principal amounts prepaid pursuant to the Amended Term Note. (b) The amendment and restatement contained herein, shall not, in any manner, be construed to constitute payment of, or impair, limit, cancel or extinguish, or constitute a novation in respect of, the Obligations evidenced by or arising under the Financing Agreements, and the liens and security interests securing such Obligations shall not in any manner be impaired, limited, terminated, waived or released. 3. Maximum Credit. (a) Effective as of April 8, 1996, all references to the Maximum Credit in the Financing Agreements, including but not limited to Section 1.7 of the Accounts Agreement, shall be deemed and each such reference is hereby amended by replacing "$15,000,000" with "$25,000,000". Notwithstanding the foregoing, during the period from June 15, 1996 through and including September 15, 1996, all references to the Maximum Credit in the Financing Agreements shall automatically be deemed and each such -2-

reference shall be automatically amended by replacing "$25,000,000" with $27,000,000". (b) Notwithstanding anything to the contrary contained in the Financing Agreements, and without limiting the right of Congress to demand payment of the Obligations, or any portion thereof, in accordance with any other terms of the Financing Agreements, if the outstanding aggregate principal amount of loans made by Congress to Borrower on and after September 16, 1996 exceeds the Maximum Credit, Borrower shall remain liable therefor and such excess shall automatically, without notice or demand, be absolutely and unconditionally due and payable in cash or other immediately available funds on September 16, 1996. 4. Accounts Advances. Section 2.1 of the Accounts Agreement, as amended, is hereby deleted in its entirety and replaced with the following: "2.1 You shall, in your discretion, make loans to us from time to time, at our request, of up to eighty (80%) percent of the Net Amount of Eligible Accounts (or such greater or lesser percentage thereof as you shall in your sole discretion determine from time to time); provided, that, for the period May 1, 1996 through July 31, 1996, you shall, in your discretion, make loans to us from time to time, at our request, of up to eighty-five (85%) percent of the Net Amount of Eligible Accounts (or such greater or lesser percentage thereof as you shall in your sole discretion as determined from time to time)." 5. Supplemental Loans. (a) In addition to the loans and advances which may be made by Congress to Borrower pursuant to the lending formulas set forth in the Financing Agreements, upon the request of Borrower made at any time and from time to time during the period April 1, 1996 to July 31, 1996, Congress shall, subject to the terms and conditions contained in the Financing Agreements, make supplemental loans to Borrower in such amounts from time to time as Congress shall in good faith determine, in its discretion, of up to $1,000,000 in excess of the amounts otherwise available to Borrower under the lending formulas set forth in the Financing Agreements, as calculated by Congress (the "Supplemental Loans"). (b) The Supplemental Loans shall be secured by all Collateral and shall be payable ON DEMAND. In any event, unless sooner demanded by Congress, all outstanding and unpaid obligations arising pursuant to the Supplemental Loans (including, but not limited to, principal, interest, fees, costs -3-

and expenses) shall automatically, without notice or demand, be absolutely and unconditionally due and payable in cash or other immediately available funds on July 31, 1996. 6. Unused Line Fee. Effective as of April 8, 1996, Section 3.5 of the Accounts Agreement, as amended, is hereby further amended by deleting all references to "$10,000,000" and replacing them with "$20,000,000". 7. Renewal Date. Section 9.1 of the Accounts Agreement, as amended, is hereby further amended by deleting the first two sentences thereof in their entirety and substituting the following therefor: "9.1 This Agreement shall become effective upon acceptance by you and shall continue in force and effect for a term ending June 30, 1998 (the "Renewal Date"), unless sooner terminated pursuant to the terms hereof. You shall have the right to terminate this Agreement immediately at any time upon the occurrence of an Event of Default." 8. Early Termination Fee. Section 9.2 of the Accounts Agreement, as amended, is hereby deleted in its entirety and replaced with the following: "9.2 If you terminate this Agreement upon the occurrence of an Event of Default or at our request, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of your lost profits as a result thereof, we hereby agree that we shall pay you, upon the effective date of such termination, an early termination fee, in an amount equal to: (i) $150,000 if such termination occurs on or prior to June 30, 1997 or (ii) $100,000 if such termination occurs after June 30, 1997 but prior to June 30, 1998." 9. Inventory Loans. (a) During the period from May 1, 1996 through July 31, 1996, and only for such period, Section 2 of the letter re: Inventory Loans, dated December 31, 1994, by Borrower in favor of Congress (the "Inventory Loan Letter") is hereby amended by replacing the reference to "fifty (50%) percent" with "sixty (60%) percent". (b) Effective as of May 1, 1996, Section 3(b) of the Inventory Loan Letter is hereby amended by deleting the reference to "$2,500,000" and replacing it with "$4,000,000". -4-

10. Letter of Credit Sublimit. Effective as of May 1, 1996, Section 1.5 of the Trade Financing Agreement Supplement to Accounts Agreement, dated June 16, 1992, by Borrower in favor of Congress is hereby amended by deleting the reference to "$6,000,000" and replacing it with "$8,000,000". 11. Fee. In partial consideration of the extension of the term of the Financing Agreements, the Supplemental Loans, the increase in the Maximum Credit and the other modifications to the Financing Agreements as set forth herein, Borrower agrees to pay Congress a fee in an amount equal to $75,000, payable as of May 1, 1996, which fee is fully earned as of May 1, 1996. At Congress' option, Congress may charge such fee directly to Borrower's loan account. 12. Conditions Precedent. The effectiveness of the amendments to the Financing Agreements provided for herein shall only be effective upon the satisfaction of each of the following conditions precedent in a manner satisfactory to Congress: (a) no Event of Default shall have occurred and be continuing and no event shall have occurred or condition be existing and continuing which, with notice or passage of time or both, would constitute an Event of Default; (b) Congress shall have received, in form and substance satisfactory to Congress, an original of the Amended Term Note, duly authorized, executed and delivered by Borrower; and (c) Congress shall have received, in form and substance satisfactory to Congress, an original of this Amendment, duly authorized, executed and delivered by Borrower, Ira Hechler, Robert Arnot, Gerald Lear, Eugene Wielepski, Gary Brashers and Stanley Keller. 13. Effect and Entirety of this Amendment. Except as specifically modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and, in all other respects, the Financing Agreements are hereby ratified and confirmed by all parties hereto as of the date hereof. This Amendment represents and incorporates the entire understanding and agreements of the parties with respect to the matters set forth herein and the parties hereto agree that there are no representations, warranties, covenants or understandings of any kind, nature or description whatsoever made by Congress to Borrower with respect to this Amendment, except as specifically set forth herein. This Amendment represents the final agreement between the parties as to the subject matter hereof and may not be contradicted by evidence or prior, contemporaneous or subsequent oral agreements of the parties. -5-

14. Waiver, Modification, Etc. No provision or term hereof may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought. 15. Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary to effectuate the provisions and purposes of this Amendment. 16. Counterparts. This Amendment may be executed in one or more counterparts which, taken together, shall constitute the agreement of the parties. Very truly yours, I.C. ISAACS & COMPANY L.P. By: ISBUYCO, INC., General Partner
By: /s/ Robert Arnot -------------------------Title: Chairman -----------------------

Agreed and Accepted: CONGRESS FINANCIAL CORPORATION
By: /s/ Eric S. Miller -------------------------Title: Asst. Vice President -----------------------

ACKNOWLEDGED:
/s/ Ira Hechler -----------------------------IRA HECHLER /s/ Robert Arnot -----------------------------ROBERT ARNOT /s/ Gerald Lear -----------------------------GERALD LEAR /s/ Eugene Wielepski -----------------------------EUGENE WIELEPSKI /s/ Gary Brashers -----------------------------GARY BRASHERS /s/ Stanley Keller -----------------------------STANLEY KELLER

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August , 1996 Congress Financial Corporation 1133 Avenue of the Americas New York, New York 10036 Re: Thirteenth Amendment to Financing Agreements Gentlemen: Reference is made to the Accounts Financing Agreement [Security Agreement] between Congress Financial Corporation ("Congress") and I.C. Isaacs & Company L.P. ("Borrower") dated as of June 16, 1992, as amended (the "Accounts Agreement") and all supplements thereto, and all other agreements, documents and instruments related thereto and executed in connection therewith (collectively, all of the foregoing, as the same now exist or may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the "Financing Agreements"). Capitalized terms used herein, unless otherwise defined herein, shall have the meaning set in the Financing Agreements. Borrower has requested certain modifications to the Financing Agreements and Congress is willing to agree to such modifications, subject to the terms and conditions set forth herein. In consideration of the foregoing, and the mutual agreements and covenants contained herein and for other good and valuable consideration, Borrower and Congress hereby agree as follows: 1. Definitions. For purposes of this Amendment, unless otherwise defined herein, all terms used herein, including, but not limited to, those terms used and/or defined in the recitals hereto, shall have the respective meanings assigned to such terms in the other Financing Agreements. 2. Accounts Advances. Section 2.1 of the Accounts Agreement, as amended, is hereby deleted in its entirety and replaced with the following: "2.1 You shall, in your discretion, make loans to us from time to time, at our request, of up to eighty (80%) percent of the Net Amount of Eligible Accounts (or such greater or lesser percentage thereof as you shall in your sole discretion determine from time to time); provided, that, for the period May 1, 1996 through August 31, 1996, you shall, in your discretion, make loans to us from time to time, at our request, of

up to eighty-five (85%) percent of the Net Amount of Eligible Accounts (or such greater or lesser percentage thereof as you shall in your sole discretion as determined from time to time)." 3. Supplemental Loans. (a) In addition to the loans and advances which may be made by Congress to Borrower pursuant to the lending formulas set forth in the Financing Agreements, upon the request of Borrower made at any time and from time to time during the period April 1, 1996 to August 31, 1996, Congress shall, subject to the terms and conditions contained in the Financing Agreements, make supplemental loans to Borrower in such amounts from time to time as Congress shall in good faith determine, in its discretion, of up to $1,000,000 in excess of the amounts otherwise available to Borrower under the lending formulas set forth in the Financing Agreements, as calculated by Congress (the "Supplemental Loans"). (b) The Supplemental Loans shall be secured by all Collateral and shall be payable ON DEMAND. In any event, unless sooner demanded by Congress, all outstanding and unpaid obligations arising pursuant to the Supplemental Loans (including, but not limited to, principal, interest, fees, costs and expenses) shall automatically, without notice or demand, be absolutely and unconditionally due and payable in cash or other immediately available funds on August 31, 1996. 4. Inventory Loans. During the period from May 1, 1996 through August 31, 1996, and only for such period, Section 2 of the letter re: Inventory Loans, dated December 31, 1994, by Borrower in favor of Congress (the "Inventory Loan Letter") is hereby amended by replacing the reference to "fifty (50%) percent" with "sixty (60%) percent". 5. Conditions Precedent. The effectiveness of the amendments to the Financing Agreements provided for herein shall only be effective upon the satisfaction of each of the following conditions precedent in a manner satisfactory to Congress: (a) no Event of Default shall have occurred and be continuing and no event shall have occurred or condition be existing and continuing which, with notice or passage of time or both, would constitute an Event of Default; and (b) Congress shall have received, in form and substance satisfactory to Congress, an original of this Amendment, duly authorized, executed and delivered by Borrower, Ira Hechler, Robert Arnot, Gerald Lear, Eugene Wielepski, Gary Brashers and Stanley Keller. -2-

6. Effect and Entirety of this Amendment. Except as specifically modified pursuant hereto, no other changes or modifications to the Financing Agreements are intended or implied and, in all other respects, the Financing Agreements are hereby ratified and confirmed by all parties hereto as of the date hereof. This Amendment represents and incorporates the entire understanding and agreements of the parties with respect to the matters set forth herein and the parties hereto agree that there are no representations, warranties, covenants or understandings of any kind, nature or description whatsoever made by Congress to Borrower with respect to this Amendment, except as specifically set forth herein. This Amendment represents the final agreement between the parties as to the subject matter hereof and may not be contradicted by evidence or prior, contemporaneous or subsequent oral agreements of the parties. 7. Waiver, Modification, Etc. No provision or term hereof may be modified, altered, waived, discharged or terminated orally, but only by an instrument in writing executed by the party against whom such modification, alteration, waiver, discharge or termination is sought. 8. Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be necessary to effectuate the provisions and purposes of this Amendment. 9. Counterparts. This Amendment may be executed in one or more counterparts which, taken together, shall constitute the agreement of the parties. Very truly yours, I.C. ISAACS & COMPANY L.P. By: I.G. DESIGN, INC., formerly known as Isbuyco, Inc., General Partner
By: /s/ Gerald W. Lear ----------------------Title: President --------------

Agreed and Accepted:

CONGRESS FINANCIAL CORPORATION By: Eric S. Miller Title: Asst. Vice President [SIGNATURES CONTINUED ON NEXT PAGE] -3-

[SIGNATURES CONTINUED FROM PREVIOUS PAGE] ACKNOWLEDGED:
/s/ Ira Hechler by John Hechler as Attorney-in-Fact --------------------------------------------------IRA HECHLER /s/ Robert Arnot --------------------------------------------------ROBERT ARNOT /s/ Gerald Lear --------------------------------------------------GERALD LEAR /s/ Eugene Wielepski --------------------------------------------------EUGENE WIELEPSKI /s/ Gary Brashers --------------------------------------------------GARY BRASHERS /s/ Stanley Keller --------------------------------------------------STANLEY KELLER

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Exhibit 10.08(r) TERM PROMISSORY NOTE $1,000,000 New York, New York June __, 1992 FOR VALUE RECEIVED, I.C. ISAACS & COMPANY L.P., a Delaware limited partnership (the "Debtor"), hereby unconditionally promises to pay to the order of CONGRESS FINANCIAL CORPORATION, a California corporation (the "Payee"), at the offices of Payee at 1133 Avenue of the Americas, New York, New York 10036, or at such other place as the Payee or any holder hereof may from time to time designate, the principal sum of ONE MILLION ($1,000,000) DOLLARS in lawful money of the United States of America and in immediately available funds, in sixty (60) consecutive monthly installments (or earlier as hereinafter referred to) on the first day of each month commencing August 1, 1992 of which the first fifty-nine (59) installments shall each be in the amount of SIXTEEN THOUSAND SIX HUNDRED SIXTY SEVEN ($16,667) DOLLARS, and the last and sixtieth (60th) installment shall be in the amount of the entire unpaid balance of this Note. Debtor hereby further promises to pay interest to the order of Payee in like money at said office or place from the date hereof, commencing July 1, 1992 and on the first day of each month thereafter, on the unpaid principal balance hereof at a rate prior to an Event of Default (as hereinafter defined) or termination or non-renewal of the Financing Agreements (as hereinafter defined), of two and one-half (2 1/2%) percent per annum in excess of the Prime Rate (as hereinafter defined), and at a rate, upon and after a Event of Default or termination or non-renewal of the Financing Agreements, of four and one-half (4 1/2%) percent per annum in excess of the Prime Rate. For purposes hereof, "Prime Rate" shall mean the prime commercial interest rate from time to time publicly announced by Philadelphia National Bank, incorporated as CoreStates Bank, N.A., Philadelphia, Pennsylvania, or its successors or assigns, whether or not such announced rate is the best rate available at such bank. For purposes hereof, "Event of Default" shall mean an Event of Default, as such term is defined in the Accounts Financing Agreement [Security Agreement], dated of even date herewith, between Debtor and Payee (the "Accounts Agreement"). The interest rate payable hereunder shall increase or decrease by an amount equal to each increase or decrease, respectively, in such Prime Rate, effective on the first day of the month after any change in such Prime Rate, based on the Prime Rate in effect on the

last day of the month in which any such change occurs. Interest shall be calculated on the basis of a three hundred sixty (360) day year and actual days elapsed. In no event shall the interest charged hereunder exceed the maximum permitted under the laws of the State of New York or other applicable law. This Note is issued pursuant to the terms and provisions of the Accounts Agreement, together with all supplements thereto, to evidence the "Term Loan" (as defined in the Covenant Supplement to the Accounts Agreement) by Payee to Debtor. This Note is secured by the "Collateral" described in the Accounts Agreement and any agreement, document or instrument now or at any time hereafter executed and/or delivered in connection therewith or related thereto (the foregoing, as the same now exist or may hereafter be amended, modified, supplemented, renewed, extended, restated or replaced, are hereinafter collectively referred to as the "Financing Agreements"), and is entitled to all of the benefits and rights thereof and of the Financing Agreements. At the time any payment is due hereunder, at its option, Payee may charge the amount thereof to any account of Debtor maintained by Payee. [Debtor may prepay this Note in whole or in part at any time without early termination fee, penalty or premium.] If any principal or interest payment is not made within five (5) days after it is due and payable hereunder, or if any other Event of Default shall occur for any reason which has not been waived in writing by Payee, or if the Financing Agreements shall be terminated or not renewed for any reason whatsoever, then and in any such event, in addition to all rights and remedies of Payee under the Financing Agreements, applicable law or otherwise, all such rights and remedies being cumulative, not exclusive and enforceable alternatively, successively and concurrently, Payee may, at its option, declare any or all of Debtor's obligations, liabilities and indebtedness owing to Payee under the Financing Agreements (the "Obligations"), including, without limitation, all amounts owing under this Note, to be due and payable, whereupon the then unpaid balance hereof, together with all interest accrued thereon, shall forthwith become due and payable, together with interest accruing thereafter at the then applicable rate stated above until the indebtedness evidenced by this Note is paid in full, plus the costs and expenses of collection hereof, including, but not limited to, reasonable attorneys' fees and expenses. Debtor (i) waives diligence, demand, presentment, protest and notice of any kind, other than such notices, if any, as may be required under the Financing Agreements, (ii) agrees that it will not be necessary for any holder hereof to first institute suit in -2-

order to enforce payment of this Note and bill, consents to pay any one or more extensions or postponements of time of payment, release, surrender or substitution of collateral, security, or forbearance or other indulgence, without notice or consent. The pleading of any statute of limitations as a defense to any demand against Debtor is expressly hereby waived. Upon any Event of Default or termination or non-renewal of the Financing Agreements, Payee shall have the right, but not the obligation to setoff against this Note all money owed by Payee to Debtor. Payee shall not be required to resort to any Collateral for payment, but may proceed against Debtor and any guarantors or endorsers hereof in such order and manner as Payee may choose. None of the rights of Payee shall be waived or diminished by any failure or delay in the exercise thereof. Debtor hereby waives the right to a trial by jury and all rights of setoff and rights to interpose counterclaims and crossclaims, (other than compulsory counterclaims), in any litigation or proceeding arising in connection with this Note, the Accounts Agreement, the other Financing Agreements, the Obligations or the Collateral. Debtor hereby irrevocably consents to the non-exclusive jurisdiction of the Supreme Court of the State of New York and the United States District Court for the Southern District of New York for all purposes in connection with any action or proceeding arising out of or relating to this Note, the Accounts Agreement, the other Financing Agreements, the Obligations or the Collateral and further consents that any process or notice of motion or other application to said Courts or judge thereof, or any notice in connection with any proceeding hereunder may be served (i) inside or outside the State of New York by registered or certified mail, return receipt requested, and service or notice so served shall be deemed complete five (5) days after the same shall have been posted or (ii) in such other manner as may be permissible under the rules of said Courts. The execution and delivery of this Note has been authorized by the board of directors of the general partner of Debtor, all necessary partnership action and by any necessary vote or consent of the limited partners of Debtor. This Note, the other Obligations and the Collateral shall be governed by and construed in accordance with the laws of the State of New York and shall be binding upon the successors and assigns of Debtor and inure to the benefit of Payee and its successors, endorsees and assigns. If any term or provision of this Note shall -3-

be held invalid, illegal or unenforceable, the validity of all other terms and provisions hereof shall in no way be affected thereby. This Note may not be changed, modified or terminated orally, but only by an agreement in writing signed by the Payee or the holder hereof. Whenever used herein, the terms "Debtor" and "Payee" shall be deemed to include their respective successors and assigns. I.C. ISAACS & COMPANY L.P. By: ISBUYCO, INC. General Partner By:
/s/ Gerald W. Lear -----------------------------------Title: President/CEO ---------------------------------

-4-

Exhibit 10.08(s) TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT AGREEMENT made this 16th day of June, 1992 by and between I.C. ISAACS & COMPANY L.P., a Delaware limited partnership ("Debtor"), with its principal place of business at 3480 Bank Street, Baltimore, Maryland 21224 and CONGRESS FINANCIAL CORPORATION, a California corporation ("Secured Party"), having an office at 1133 Avenue of the Americas, New York, New York 10036. WITNESSETH: WHEREAS, Debtor has adopted, used and is using, and is the owner of the entire right, title, and interest in and to the trademarks, trade names, terms, designs and applications therefor described in Exhibit A annexed hereto and made a part hereof; and WHEREAS, Secured Party and Debtor are contemporaneously herewith entering into financing arrangements pursuant to which Secured Party will make loans and advances and provide other financial accommodations to Debtor as set forth in the Accounts Financing Agreement [Security Agreement], dated of even date herewith, by and between Secured Party and Debtor (the "Accounts Agreement"), together with various other agreements, documents and instruments referred to therein or at any time executed and/or delivered in connection therewith or related thereto, including, but not limited to, this Agreement (all of the foregoing, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, being collectively referred to herein as the "Financing Agreements"); and WHEREAS, in order to induce Secured Party to enter into the Financing Agreements and make loans and advances and provide other financial accommodations to Debtor pursuant thereto, Debtor has agreed to grant to Secured Party certain collateral security as set forth herein; NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Debtor hereby agrees as follows: 1. GRANT OF SECURITY INTEREST As collateral security for the prompt performance, observance and indefeasible payment in full of all of the Obligations (as hereinafter defined), Debtor hereby grants to Secured Party a continuing security interest in and a general lien upon: (a) all of Debtor's now existing or hereafter acquired right, title, and interest in and to: all of Debtor's trademarks, trade names, trade styles and service marks; all prints and labels on which said trademarks, trade names, trade styles and service marks appear, have appeared or will appear, and all designs and general

intangibles of a like nature; all applications, registrations and recordings relating to the foregoing in the United States Patent and Trademark Office or in any similar office or agency of the United States, any state thereof, any political subdivision thereof or in any other countries, and all reissues, extensions and renewals thereof including those trademarks, terms, designs and applications described in Exhibit A hereto (the "Trademarks"); (b) the goodwill of the business symbolized by each of the Trademarks, including, without limitation, all customer lists and other records relating to the distribution of products or services bearing the Trademarks; and (c) any and all proceeds of any of the foregoing, including, without limitation, any claims by Debtor against third parties for infringement of the Trademarks or any licenses with respect thereto (all of the foregoing are collectively referred to herein as the "Collateral"). 2. OBLIGATIONS SECURED The security interest, lien and other interests granted to Secured Party pursuant to this Agreement shall secure the prompt performance, observance and indefeasible payment in full of any and all loans, indebtedness, liabilities and obligations of any kind owing by Debtor to Secured Party, however evidenced, whether as principal, guarantor or otherwise, whether arising under the Financing Agreements or otherwise, whether now existing or hereafter arising, whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, original, renewed or extended and whether arising directly or acquired from others (including, without limitation, Secured Party's participations or interests in Debtor's obligations to others) and including, without limitation, Secured Party's charges, commissions, interest, expenses, costs and reasonable attorneys' fees chargeable to Debtor under this Agreement or in connection with any of the foregoing (all hereinafter referred to as "Obligations"). 3. REPRESENTATIONS, WARRANTIES AND COVENANTS Debtor hereby covenants, represents and warrants with and to Secured Party that (all of such covenants, representations and warranties being continuing so long as any of the Obligations are outstanding): (a) Debtor will pay and perform all of the Obligations according to their terms. (b) All of the existing Collateral is valid and subsisting in full force and effect, and Debtor owns the sole, full, and clear title to the Collateral, and the right and power to grant the security interests granted hereunder. Debtor will, at Debtor's expense, perform all acts and execute all documents to the extent reasonably necessary to maintain the existence of the Collateral as valid, subsisting and registered trademarks, includ-2-

ing, without limitation, the filing of any renewal affidavits and applications. The Collateral is not subject to any liens, claims, mortgages, assignments, licenses, security interests, or encumbrances of any nature whatsoever, except: (i) the security interests granted hereunder and pursuant to the Accounts Agreement, (ii) the security interests permitted under the Accounts Agreement, (iii) the licenses specifically described on Exhibit B thereto and (iv) limited, revocable and non-exclusive licenses granted to specific sellers of goods to Debtor, solely for the purpose, and only to the extent necessary, to permit such sellers to use any of the Trademarks to produce goods to be sold and delivered to Debtor. (c) Debtor will not assign, sell, mortgage, lease, transfer, pledge, hypothecate, grant a security interest in or lien upon, encumber, grant an exclusive or non-exclusive license relating thereto, except as permitted herein, or otherwise dispose of any of the Collateral without the prior written consent of Secured Party. Nothing in this Agreement shall be deemed a consent by Secured Party to any such action, except as such action is expressly permitted hereunder. (d) Debtor will, at Debtor's expense, perform all acts and execute all documents reasonably requested at any time by Secured Party to evidence, perfect, maintain, record, or enforce the security interest in the Collateral granted hereunder or to otherwise further the provisions of this Agreement. Debtor hereby authorizes Secured party to execute and file one or more financing statements (or similar documents) with respect to the Collateral, signed only by Secured Party or as otherwise determined by Secured Party. Debtor further authorizes Secured Party to have this or any other similar security agreement filed with the Commissioner of Patents and Trademarks or other appropriate federal, state or government office. (e) As of the date hereof, Debtor does not have any Trademarks registered in, or the subject of pending applications in, the United States Patent and Trademark Office or any similar office or agency in the United States or any other country, other than those described in Exhibit A annexed hereto and has not granted any licenses with respect thereto other than as set forth in Exhibit B hereto or permitted in Section 3(b) above. (f) Debtor will, concurrently with the execution and delivery of this Agreement, execute and deliver to Secured Party five (5) originals of a Power of Attorney in the form of Exhibit C annexed hereto for the implementation of the assignment, sale or other disposition of the Collateral pursuant to Secured Party's exercise of the rights and remedies granted to Secured Party hereunder. (g) Secured Party may, in its discretion, exercised in good faith, pay any amount or do any act which Debtor fails to pay -3-

or do as required hereunder or as requested by Secured Party to preserve, defend, protect, maintain, record, amend or enforce the Collateral, or the security interest granted hereunder, including, but not limited to, all filing or recording fees, court costs, collection charges and reasonable attorneys' fees and legal expenses. Debtor will be liable to Secured Party for any such payment, which payment shall be deemed an advance by Secured Party to Debtor, shall be payable on demand together with interest at the then applicable rate set forth in the Financing Agreements and shall be part of the Obligations secured hereby. (h) Debtor will not file any application for the registration of a Trademark with the United States Patent and Trademark Office or any similar office or agency in the United States, any state therein, or any other country, unless Debtor has by ten (10) days prior written notice informed Secured Party of such action. Upon request of Secured Party, Debtor will execute and deliver to Secured Party any and all assignments, agreements, instruments, documents, and such other papers as may be requested by Secured Party to evidence the security interests of Secured Party in such Trademark. (i) Debtor has not abandoned any of the Trademarks and Debtor will not do any act, nor omit to do any act, whereby the Trademarks may become abandoned, invalidated, unenforceable, avoided, or avoidable. Debtor will notify Secured Party immediately if it knows or has reason to know of any reason why any application, registration, or recording may become abandoned, cancelled, invalidated, avoided, or avoidable. (j) Debtor will render any reasonable assistance, as Secured Party shall determine in its good faith judgement, necessary to Secured Party in any proceeding before the United States Patent and Trademark Office, any federal or state court, or any similar office or agency in the United States or any state therein or any other country to maintain such application and registration of the Trademarks as Debtor's exclusive property and to protect Secured Party's interest therein, including, without limitation, filing of renewals, affidavits of use, affidavits of incontestability and opposition, interference, and cancellation proceedings. (k) Debtor will promptly notify Secured Party if Debtor (or any affiliate or subsidiary thereof) learns of any use by any person of any term or design likely to cause confusion with any Trademark. If requested by Secured Party, Debtor, at Debtor's expense, shall join with Secured Party in such action as Secured Party, in its discretion, may deem advisable for the protection of Secured Party's interest in and to the Trademarks. (l) Debtor assumes all responsibility and liability arising from the use of the Trademarks and Debtor hereby indemnifies and holds Secured Party harmless from and against any -4-

claim, suit, loss, damage, or expense (including attorneys' fees) arising out of any alleged defect in any product manufactured, promoted, or sold by Debtor (or any affiliate or subsidiary thereof) in connection with any Trademark or out of the manufacture, promotion, labelling, sale or advertisement of any such product by Debtor (or any affiliate or subsidiary thereof). (m) Debtor will promptly pay Secured Party for any and all expenditures made by Secured Party pursuant to the provisions of this Agreement or for the defense, protection, or enforcement of the Obligations, the Collateral, or the security interests granted hereunder, including, but not limited to, all filing or recording fees, court costs, collection charges, travel expenses, and reasonable attorneys' fees and legal expenses. Such expenditures shall be payable on demand, together with interest at the then applicable rate set forth in the Financing Agreements and shall be part of the Obligations secured hereby. 4. EVENTS OF DEFAULT All Obligations shall become immediately due and payable, without notice or demand at the option of Secured Party, upon the occurrence of any one or more of the following events, each of which shall constitute and be deemed an Event of Default under this Agreement and the other Financing Agreements: (a) Debtor shall fail to pay to Secured Party when due any amounts owing to Secured Party under any Obligation which remains unpaid five [5] days after the due date or maturity date thereof, or shall breach any of the terms, covenants, conditions or provisions of this Agreement, any of the other Financing Agreements or any other agreement between Secured Party and Debtor or between any third person or entity and us and, except as to any breaches resulting from Debtor's intentional misconduct or actions or inactions which by their nature are not capable of being cured, which remain uncured fifteen (15) days after the occurrence thereof; or (b) any guarantor, endorser or other person liable on the Obligations shall terminate or breach any of the terms, covenants, conditions or provisions of any guarantee, endorsement or other agreement of such person with, or in favor of, Secured Party, except if, within fifteen (15) days after such termination or breach by such guarantor you receive a new or additional, written guarantee (in form and substance similar to the guarantee which has been terminated or is in default) from one or more of the individual guarantors of the Obligations or any other person reasonably acceptable to you, in an amount not less than the maximum liability under the guarantee which has been terminated or is in default, or between any third person or entity and us; or -5-

(c) any representation, warranty, or statement of fact made to Secured Party at any time by Debtor or on Debtor's behalf is false or misleading in any material respect; or (d) Debtor or any guarantor, endorser or other person liable on the Obligations, shall become insolvent, fail to meet Debtor's or their Debts as they mature, call a meeting of creditors or have a creditors' committee appointed, make an assignment for the benefit of creditors, commence or have commenced against it, any action or proceeding for the appointment of any trustee, receiver, custodian or liquidator of it or all or any part of its properties or assets, or commence any action or proceeding under any bankruptcy law, or if a judgment is rendered against Debtor or any guarantor, endorser or other person liable on the Obligations which, together with all other unsatisfied judgments against Debtor or any guarantor endorser or other person liable on the Obligations, in an amount which exceeds $50,000 in the aggregate or which is a lien against any of Debtor's properties or if a receiver, custodian or trustee of any kind is appointed for Debtor or any guarantor, endorser or other person liable on the Obligations or any of Debtor's or their respective properties; or (e) there shall be a material adverse change in the business, assets or condition (financial or otherwise) of Debtor from the date hereof; or (f) there is any change in Debtor's majority control or ownership; or (g) at any time Secured Party shall, in Secured Party's sole discretion, exercised in good faith, consider the Obligations insecure or any part of the Collateral unsafe, insecure or insufficient and Debtor shall not on Secured Party's demand furnish other Collateral or make payment on account, satisfactory to Secured Party. 5. RIGHTS AND REMEDIES Upon the occurrence of any such Event of Default and at any time thereafter, in addition to all other rights and remedies of Secured Party, whether provided under law, the Financing Agreements or otherwise, Secured Party shall have the following rights and remedies which may be exercised without notice to, or consent by, Debtor except as such notice or consent is expressly provided for hereunder. (a) Secured Party may require that neither Debtor nor any affiliate or subsidiary of Debtor make any use of the Trademarks or any marks similar thereto for any purpose whatsoever. Secured Party may make use of any Trademarks for the sale of goods, completion of work in process or rendering of -6-

services in connection with enforcing any other security interest granted to Secured Party by Debtor or any subsidiary of Debtor. (b) Secured Party may grant such license or licenses relating to the Collateral for such term or terms, on such conditions, and in such manner, as Secured Party shall in its discretion deem appropriate. Such license or licenses may be general, special, or otherwise, and may be granted on an exclusive or non-exclusive basis throughout all or any part of the United States of America, its territories and possessions, and all foreign countries. (c) Secured Party may assign, sell, or otherwise dispose of the Collateral or any part thereof, either with or without special conditions or stipulations except that if notice to Debtor of intended disposition of Collateral is required by law, ten (10) days notice by Secured Party sent by certified mail, postage prepaid, of the proposed disposition of any of the Collateral shall be deemed reasonable notice thereof and Debtor waives any other notice with respect thereto. Secured Party shall have the power to buy the Collateral or any part thereof, and Secured Party shall also have the power to execute assurances and perform all other acts which Secured Party may, in its discretion, deem appropriate or proper to complete such assignment, sale, or disposition. In any such event, Debtor shall be liable for any deficiency. (d) In addition to the foregoing, in order to implement the assignment, sale, or other disposition of any of the Collateral pursuant to Subparagraph 5(c) hereof, Secured Party may at any time execute and deliver on behalf of Debtor, pursuant to the authority granted in the Powers of Attorney described in Subparagraph 3(f) hereof, one or more instruments of assignment of the Trademarks (or any application, registration, or recording relating thereto), in form suitable for filing, recording, or registration. Debtor agrees to pay Secured Party on demand all costs incurred in any such transfer of the Collateral, including, but not limited to, any taxes, fees, and reasonable attorneys' fees and legal expenses. (e) Secured Party may first apply the proceeds actually received from any such license, assignment, sale, or other disposition of Collateral to the costs and expenses thereof, including, without limitation, reasonable attorneys' fees and all legal, travel, and other expenses which may be incurred by Secured Party. Thereafter, Secured Party may apply any remaining proceeds to such of the Obligations as Secured Party may in its discretion determine. Debtor shall remain liable to Secured Party for any expenses or obligations remaining unpaid after the application of such proceeds, and Debtor will pay Secured Party on demand any such unpaid amount, together with interest at a rate equal to the highest rate then payable on the Obligations. -7-

(f) Debtor shall supply to Secured Party or to Secured Party's designee, Debtor's knowledge and expertise relating to the manufacture and sale of the products and services bearing the Trademarks and Debtor's customer lists and other records relating to the Trademarks and the distribution thereof. (g) Nothing contained herein shall be construed as requiring Secured Party to take any such action at any time. All of Secured Party's rights and remedies, whether provided under law, the Financing Agreements, this Agreement, or otherwise, shall be cumulative and none is exclusive. Such rights and remedies may be enforced alternatively, successively, or concurrently. 6. MISCELLANEOUS (a) Any failure or delay by Secured Party to require strict performance by Debtor of any of the provisions, warranties, terms, and conditions contained herein or in any other agreement, document, or instrument, shall not affect Secured Party's right to demand strict compliance and performance therewith, and any waiver of any default shall not waive or affect any other default, whether prior or subsequent thereto, and whether of the same or of a different type. None of the warranties, conditions, provisions, and terms contained herein or in any other agreement, document, or instrument shall be deemed to have been waived by any act or knowledge of Secured Party, its agents, officers, or employees, but only by an instrument in writing, signed by an officer of Secured Party and directed to Debtor, specifying such waiver. (b) Except as otherwise provided, all notices, requests and demands to or upon the respective parties hereto shall be deemed to have been duly given or made: if by hand, telex, telegram or facsimile, immediately upon sending; if by Federal Express, Express Mail or any other overnight delivery service, one (1) day after dispatch; and if mailed by certified mail, return receipt requested, five (5) days after mailing. All notices, requests and demands are to be given or made to the respective parties at the address (or to such addresses as either party may designate by notice in accordance with the provisions of this paragraph) set forth herein. (c) In the event that any provision hereof shall be deemed to be invalid by any court, such invalidity shall not affect the remainder of this Agreement. (d) All references to Debtor and Secured Party herein shall include their respective successors and assigns. All references to the term "person" herein shall mean an individual, a partnership, a corporation (including a business trust), a joint stock company, a trust, an unincorporated association, a joint venture or other entity or a government or any agency, instrumentality or political subdivision thereof. -8-

(e) This Agreement shall be binding upon and for the benefit of the parties hereto and their respective successors and assigns. No provision hereof shall be modified, altered or limited except by a written instrument expressly referring to this Agreement signed by the party to be charged thereby. (f) The validity, interpretation, and effect of this Agreement shall be governed by the laws of the State of New York. Debtor hereby waives all rights of setoff and rights to interpose counterclaims (except compulsory counterclaims) in the event of any litigation with respect to any matter connected with this Agreement, the Obligations or the Collateral and irrevocably submits and consents to the non-exclusive jurisdiction of the Supreme Court of the State of New York and the United States District Court for the Southern District of New York and Debtor waives all rights to a trial by jury in any action in connection with this Agreement, the Obligations or the Collateral. Service of process or notice in connection with any proceedings may be served (i) inside or outside the State of New York by registered or certified mail, return receipt requested, addressed to the Debtor at the address set forth above or of which Debtor has advised Secured Party in writing and service or notice so served shall have been deemed complete five (5) days after the same shall have been posted, or (ii) in such manner as may be permissible under the rules of said courts. Within forty-five (45) days after such mailing, Debtor shall appear in answer to such process or notice of motion or other application to said Courts, failing which Debtor shall be deemed in default and judgment may be entered by Secured Party against Debtor for the amount of the claim and other relief requested therein. (g) In the event that any term or provision of this Agreement conflicts with any term or provision of the Accounts Agreement, the term or provision of the Accounts Agreement shall control. IN WITNESS WHEREOF, Debtor and Secured Party have executed this Agreement as of the day and year first above written. I.C. ISAACS & COMPANY L.P. By: ISBUYCO, INC., General Partner
By: /s/ Robert J. Arnot -------------------------Title: Chairman -----------------------

CONGRESS FINANCIAL CORPORATION
By: /s/ Steven Stone -------------------------Title: VP -----------------------

-9-

STATE OF NEW YORK COUNTY OF NEW YORK

) ) ss.: )

On this 15th day of June, 1992, before me personally came /s/ [Illegible], to me known, who being duly sworn, did depose and say, that he is the Chairman of ISBUYCO, INC., a corporation duly organized under the laws of the State of Delaware, having its principal place of business at 3840 Bank Street, Baltimore, Maryland 21224; that said corporation is the general partner of I.C. Isaacs & Company L.P., a Delaware limited partnership, the firm described in and which executed the foregoing instrument; and that he signed his name thereto by order or the Board of Directors of said corporation, and he acknowledged to me that said instrument was executed by said corporation as the act and deed of said partnership for the uses and purpose therein mentioned. /s/ Joanne Defillippo ------------------------------Notary Public STATE OF NEW YORK COUNTY OF NEW YORK ) ) ss.: ) JOANNE DEFILLIPPO Notary Public, State of New York No. 24-4988297 Qualified in Kings County Commission Expires Nov. 4, 1993

On this 15th day of June, 1992, before my personally came Steven A. Stone, to me known, who, being duly sworn, did depose and say, that he is the Vice President of CONGRESS FINANCIAL CORPORATION, the corporation described in and which executed the foregoing instrument; and that he signed his name thereto by order or the Board of Directors of said corporation.
/s/ Joanne Defillippo ------------------------------Notary Public

JOANNE DEFILLIPPO Notary Public, State of New York No. 24-4988297 Qualified in Kings County Commission Expires Nov. 4,1993 -10-

EXHIBIT A TO TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT LIST OF TRADEMARKS
Trademark --------Over the Top & Design Over the Top & Design Over the Top & Design Over the Top & Design Over the Top & Design Over the Top & Design Over the Top & Design Over the Top & Design Justa-Jean Bronco Buster Trimfit Fit-All Pipestem Royal Gem Over the Top Slim Jean Norsking Madrid Gemsheen Beau Gem Reg. No. -------299,851 312,899 312,978 314,393 332,003 342,581 365,093 377,425 500,797 562,330 573,063 573,778 573,779 592,234 597,641 598,793 598,815 608,899 622,349 626,605 Issue Date ---------December 27, 1932 May 15, 1934 May 15, 1934 June 26, 1934 January 28, 1936 January 19, 1937 February 21, 1939 May 7, 1940 July 1, 1952 July 29, 1952 April 7, 1953 April 28, 1953 April 28, 1953 July 6, 1954 November 2, 1954 November 30, 1954 November 30, 1954 July 12, 1955 February 28, 1956 May 8, 1956

Turn-to Broncho Slicfit Whipsaw All Time Royalon PHd Zacari Zacari, Ltd. Crestline All-Ways Prest Lady Isaacs Lord Isaacs Trimfit Lord Isaacs Lady Isaacs Double Dare Foreward Pass Pizzazz ZAC Ltd. ZAC Pocket Design Pocket Design Pocket Design Pocket Design Pocket Design

629,565 632,768 633,221 633,696 641,446 641,468 642,677 716,902 716,903 786,446 823,417 846,064 847,484 881,746 989,010 989,011 1,037,543 1,130,017 1,140,864 1,141,851 1,142,654 1,192,904 1,193,435 1,194,537 1,196,001 1,212,011

June 26, 1956 August 24, 1956 August 21, 1956 August 28, 1956 February 12, 1957 February 12, 1957 March 12, 1957 June 13, 1961 June 13, 1961 March 9, 1965 January 31, 1967 March 12, 1968 April 9, 1968 December 2, 1969 July 23, 1974 July 23, 1974 April 6, 1976 January 29, 1980 October 28, 1980 November 25, 1980 December 9, 1980 March 30, 1982 April 6, 1982 April 27, 1982 May 18, 1982 October 5, 1982

Pocket Design Pocket Design Pocket Design Pocket Design

1,217,112 1,248,009 1,289,558 1,289,559 PENDING APPLICATIONS --------------------

November 16, 1982 August 9, 1983 August 7, 1984 August 7, 1984

Turn - 2

491,040

July 23, 1984

Powder Point Isaacs Group Barbell Blues Gibson Isle

EXHIBIT B TO TRADEMARK COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT LIST OF LICENSES 1. License dated August 27, 1990 with Brookhurst, Inc. re: "Boss" for menswear. 2. License dated January, 1991 with Brookhurst, Inc. re: "Boss" for ladieswear.

EXHIBIT C SPECIAL POWER OF ATTORNEY STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) KNOW ALL MEN BY THESE PRESENTS, that I.C. ISAACS & COMPANY L.P. ("Debtor"), having an office at 3840 Bank Street, Baltimore, Maryland 21224, hereby appoints and constitutes, CONGRESS FINANCIAL CORPORATION ("Secured Party"), and each of its officers, its true and lawful attorney, with full power of substitution and with full power and authority to perform the following acts on behalf of Debtor: 1. Execution and delivery of any and all agreements, documents, instrument of assignment, or other papers which Secured Party, in its discretion, deem necessary or advisable for the purpose of assigning, selling, or otherwise disposing of all right, title, and interest of Debtor in and to any trademarks and all registrations, recordings, reissues, extensions, and renewals thereof, or for the purpose of recording, registering and filing of, or accomplishing any other formality with respect to the foregoing. 2. Execution and delivery of any and all documents, statements, certificates or other papers which Secured Party, in its discretion, deems necessary or advisable to further the purposes described in Subparagraph 1 hereof. This Power of Attorney is made pursuant to Trademark Collateral Assignment and Security Agreement between Debtor and Secured Party, of even date herewith (the "Security Agreement") and may not be revoked until indefeasible payment in full of all Debtor's "Obligations", as such term is defined in the Security Agreement and is subject to the terms and provisions thereof.
-------- -, 1992 I.C. ISAACS & COMPANY L.P. By: ISBUYCO, INC., General Partner By: -------------------------Title: -----------------------

-13-

STATE OF NEW YORK COUNTY OF NEW YORK

) ) ss.: )

On this ____ day of ______, 1992, before me personally came ________________________________, to me known, who being duly sworn, did depose and say, that he/she is the ________________ of ISBUYCO, INC., a corporation duly organized under the laws of the State of Delaware, having its principal place of business at 3840 Bank Street, Baltimore, Maryland 21224; that said corporation is the general partner of I.C. Isaacs & Company L.P., a Delaware limited partnership, the firm described in and which executed the foregoing instrument; and that he/she signed his/her name thereto by order of the Board of Directors of said corporation, and he/she acknowledged to me that said instrument was executed by said corporation as the act and deed of said partnership for the uses and purpose therein mentioned.

Notary Public -14-

[FORM OF] INDEMNIFICATION AGREEMENT INDEMNIFICATION AGREEMENT, dated as of _____________ 1997 (this "AGREEMENT"), by and between I. C. Isaacs & Company, Inc., a Delaware corporation (the "COMPANY"), and _________________________ ("INDEMNITEE"). W I T N E S S E T H: WHEREAS, the Company desires to attract and retain the services of able persons to serve as its officers and directors; WHEREAS, the Company and Indemnitee recognize the increasing difficulty in obtaining officers' and directors' liability insurance, the significant increase in the cost of such insurance and the general reduction in the coverage of such insurance; WHEREAS, the Company and Indemnitee further recognize the substantial increase in corporate litigation in general, subjecting officers and directors to litigation risks at the same time that liability insurance has been severely limited; and WHEREAS, neither Indemnitee nor the Company regards statutory indemnification protection as fully adequate given the present circumstances; NOW THEREFORE, the Company and Indemnitee hereby agree as follows: 1. (a) THIRD-PARTY PROCEEDINGS. The Company shall indemnify Indemnitee to the fullest extent of Delaware law, except as otherwise provided in Section 3 of this Agreement, if Indemnitee is or was a party or is threatened to be made a party to any threatened, pending or completed suit, action, proceeding, arbitration or alternative dispute resolution mechanism, investigation, administrative hearing, whether civil, criminal, administrative or investigative (any such suit, action, proceeding, arbitration or alternative dispute resolution mechanism, investigation, administrative hearing being referred to herein as a "PROCEEDING") (other than an action by or in the right of the Company) by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company or any subsidiary or affiliated entity (each, a "Subsidiary") of the Company, by reason of any action or inaction on the part of Indemnitee while an officer or director of the Company or any Subsidiary of the Company or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer, employee or agent of another Person (as defined in Section 6(d)), against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) actually and reasonably incurred by Indemnitee in connection with such action or proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the -1-

Company and its stockholders, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. (b) PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY. The Company shall indemnify Indemnitee to the fullest extent of Delaware law, except as otherwise provided in Section 3 of this Agreement, if Indemnitee is or was a party or is threatened to be made a party to any threatened, pending or completed Proceeding by or in the right of the Company or any subsidiary of the Company to procure a judgment in its favor by reason of the fact that Indemnitee is or was a director, officer, employee or agent of the Company or any Subsidiary of the Company, by reason of any action or inaction on the part of Indemnitee while an officer or director of the Company or any Subsidiary of the Company or by reason of the fact that Indemnitee is or was serving at the request of the Company as a director, officer, employee or agent of another Person, against expenses (including attorneys' fees) and, to the fullest extent permitted by Delaware law, amounts paid in settlement (if such settlement is approved by the Company, which approval shall not be unreasonably withheld), in each case to the extent actually and reasonably incurred by Indemnitee in connection with the defense or settlement of such Proceeding if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company and its stockholders, except that no indemnification shall be made in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Company and its stockholders in the performance of Indemnitee's duty to the Company and its stockholders unless and only to the extent that the Court of Chancery of the State of Delaware, or the court in which such action or proceeding shall have been brought or is pending, shall determine that in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for expense, and then only to the extent that the court shall determine. (c) SELECTION OF COUNSEL. In the event the Company shall be obligated under Section 1(a) or (b) hereof to pay the expenses of any Proceeding against Indemnitee, the Company shall be entitled to assume the defense of such Proceeding, with counsel approved by Indemnitee (who shall not unreasonably withhold such approval), upon the delivery to Indemnitee of written notice of its election so to do. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, PROVIDED, THAT, (i) Indemnitee shall have the right to employ his counsel in any such proceeding at Indemnitee's expense; and (ii) if (A) the employment of counsel by Indemnitee has been previously authorized in writing by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense and shall have notified the company in writing thereof, (C) Indemnitee shall have reasonably concluded that there may be a conflict of interest between Indemnitee and other indemnitees of the Company being represented by counsel retained by the Company in the same proceeding and shall have notified the Company in writing thereof, or (D) the Company shall not, in fact, have employed counsel to -2-

assume the defense of such proceeding, then the fees and expenses of Indemnitee's counsel shall be at the expense of the Company. 2. CONTRIBUTION. If, when Indemnitee has met the applicable standard of conduct, the indemnification provisions set forth in Section 1 should, under applicable law, be to any extent unenforceable, then the Company agrees that it shall be treated as though it is or was a party to the threatened, pending or completed Proceeding in which Indemnitee is or was involved and that the Company shall contribute to the amounts paid or payable by Indemnitee as a result of such expenses (including attorneys' fees), judgments in third-party Proceedings, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and Indemnitee on the other in connection with such action or inaction, or alleged action or inaction, as well as any other relevant equitable considerations. For purposes of this Section 2, the relative benefit to the Company shall be deemed to be the benefits accruing to it and to all of its directors, officers, employees and agents (other than Indemnitee), as a group and treated as one entity, and the relative benefit to Indemnitee shall be deemed to be an amount not greater than Indemnitee's yearly base salary or director's compensation as the case may be, from the Company during the first year in which the action or inaction, or alleged action or inaction, forming the basis for the threatened, pending or contemplated Proceeding was alleged to have occurred plus the amount, if any, of monetary benefit and other consideration received by Indemnitee in the transaction (s) that gave rise to such Proceeding. The relative fault shall be determined by reference to, among other things, the fault of the Company and all of its directors, officers, employees and agents (other than Indemnitee), as a group and treated as one entity, and such group's relative intent, knowledge, access to information and opportunity to have altered or prevented the action or inaction, or alleged action or inaction, forming the basis for the threatened, pending or contemplated Proceeding, and Indemnitee's relative fault in light of such factors on the other hand. 3. LIMITATIONS TO RIGHTS OF INDEMNIFICATION AND ADVANCEMENT OF EXPENSES. Except as otherwise provided in Sections 9 and 12 of this Agreement, Indemnitee shall not be entitled to indemnification or advancement of expenses under this Agreement: (a) with respect to any Proceeding initiated, brought or made by Indemnitee (i) against the Company, unless a Change in Control(as defined in Section 5(b) of this Agreement) shall have occurred, or (ii) against any person other than the Company, unless approved in advance by the Board of Directors of the Company (the "Board"); (b) on account of any suit in which it shall be determined by final judgment by a court having jurisdiction in the matter that Indemnitee intentionally caused or intentionally contributed to the injury complained of with the knowledge that such injury would occur; -3-

(c) on account of Indemnitee's conduct which shall be determined by final judgment by a court having jurisdiction in the mater that Indemnitee was knowingly fraudulent, deliberately dishonest, engaged in willful misconduct or that Indemnitee received an improper personal benefit; (d) for any expenses incurred by Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, to the extent that a court of competent jurisdiction determines that any of the material assertions made by Indemnitee in such proceeding was not made in good faith or was frivolous; (e) for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) which have been paid directly to Indemnitee by an insurance carrier under a policy of officers' and directors' liability insurance maintained by the Company; (f) for expenses or the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or any similar successor statute; or (g) if it shall be determined by final judgment by a court having jurisdiction in the matter that such indemnification is not lawful. 4. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION. (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification. (b) Upon written request by Indemnitee for indemnification, a determination with respect to Indemnitee's entitlement thereto shall be made in the specific case as follows: (i) if a Change in Control (as defined in section 5(b) of this Agreement) shall have occurred, by Independent Counsel (as defined in Section 5(a) of this Agreement) in a written opinion to the Board, a copy of which shall be delivered to Indemnitee (unless Indemnitee shall request that such determination be made by the Board or the Stockholders, in which case the determination shall be made in the manner provided below in clause (ii); or (ii) if a Change in Control shall not have occurred, (A) by the Board by a majority vote of a quorum consisting of disinterested directors, (B) if a quorum of the Board consisting of disinterested directors is not obtainable or, even if obtainable, such quorum of disinterested directors so directs, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (C) by the stockholders of the Company. -4-

(c) If it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information that is not privileged or otherwise protected from disclosure and that is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys' fees and disbursements) incurred by Indemnitee in so cooperating shall be borne by the Company (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom. (d) If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, a written objection to such selection. Such objection may be asserted only on the ground that the Independent Counsel so selected may not serve as Independent Counsel unless and until a court has determined that such objection is without merit. If, twenty (20) days after submission by Indemnitee of a written request for indemnification pursuant to Section 4 hereof, no Independent Counsel shall have been selected or if selected, shall have been objected to, in accordance with this Section 4(d), either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other's selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate. The person with respect to whom an objection is favorably resolved or the person so appointed shall act as Independent Counsel under Section 4 hereof. The Company shall pay any and all reasonable fees and expenses incident to the procedures of this Section 4, including reasonable fees and expenses incurred by such Independent Counsel regardless of the manner in which such Independent Counsel was selected or appointed. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 12 of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing). 5. (a) "Independent Counsel" means a law firm or a member of a law firm that neither at the time in question, nor in the five years immediately preceding such time has been retained to represent (i) the Company or Indemnitee in any matter material to either such party or (ii) any other party to the proceeding giving rise to a claim for indemnification under this Agreement. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing under the law of the -5-

State of Delaware, would be precluded from representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. (b) "Change in Control" means the occurrence of any of the following events: (i) the Company is merged, consolidated or reorganized into or with another corporation or other entity, and as a result of such merger, consolidation or reorganization less than a majority of the combined voting power of the then-outstanding securities of such corporation or entity immediately after such transaction are held in the aggregate by the holders of voting stock immediately prior to such transaction; (ii) the Company sells or otherwise transfers all or substantially all of its assets to another corporation or other entity in which, after giving effect to such sale or transfer, the holders of voting stock of the Company immediately prior to such sale or transfer hold in the aggregate less than a majority of the combined voting power of the then-outstanding securities of such other corporation; (iii) there is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report or item therein), each as promulgated pursuant to the Exchange Act, disclosing that any person or entity, other than any shareholder of the Company (and its affiliates) owning 10% or more of the Company's voting stock on the date hereof, has become the beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 50% or more of the combined voting power of the Company's voting stock; or (iv) if during any period of two consecutive years individuals who at the beginning of any such period constitute the Board cease for any reason to constitute at least a majority thereof; PROVIDED, HOWEVER, that for purposes of this clause (iv) each director of the Company who is first elected, or first nominated for election by the Company's stockholders, by a vote of at least majority of the directors of the Company (or a committee of the Board) then still in office who were directors of the Company at the beginning of any such period shall be deemed to have been a director of the Company at the beginning of such period. Notwithstanding the provisions of clause (iii) above, unless otherwise determined in the specific case by majority vote of the Board, a "Change in Control" shall not be deemed to have occurred solely because the Company, any subsidiary or any employee stock ownership plan or any other employee benefit plan of the Company or any subsidiary either files or becomes obligated to file a report or a proxy statement under or in response to Schedule 13D, Schedule 14D-1 or Schedule 14A (or any successor schedule, form or report or item therein) under the Exchange Act disclosing beneficial ownership by it of shares of voting stock of the Company, whether in excess of 50% or otherwise, or because the Company reports that a change in control of the Company has occurred or will occur in the future by reason of such beneficial ownership. -6-

6. PRESUMPTIONS AND EFFECT OF CERTAIN PROCEEDINGS. (a) In making a determination with respect to entitlement to indemnification hereunder, the person, persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 4 of this Agreement, and the Company shall bear the burden of proof to rebut that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. (b) The termination of any Proceeding or of any claim, issue or matter therein by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company, or, with respect to any criminal action or proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful. (c) Indemnitee's conduct with respect to an employee benefit plan for a purpose he reasonably believed to be in the interests of the participants in and beneficiaries of the plan shall be deemed to be conduct that Indemnitee reasonably believed to be in or not opposed to the best interests of the Company. (d) For purposes of any determination hereunder, Indemnitee shall be deemed to have acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action was based on (i) the records or books of account of the Company or another Person, including financial statements, (ii) information supplied to him by the officers of the Company or another Person in the course of their duties, (iii) the advice of legal counsel for the Company or another Person, or (iv) information or records given or reports made to the Company or another Person by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or another Person. the term "another Person" as used in this Agreement shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as an officer, director, partner, trustee, employee or agent. The provisions of this Section 6(d) shall not be deemed to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in Section 1. 7. SUCCESS ON MERITS OR OTHERWISE. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any action, suit or proceeding described in Section 1 hereof, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the investigation, defense, settlement or appeal thereof. For purposes of this Section 7, the term "successful on the merits or otherwise" shall include, but not be limited to, (i) any termination, withdrawal or dismissal (with -7-

or without prejudice) of any Proceeding against Indemnitee without any express finding of liability or guilt against him, (ii) the expiration of 180 days after the making of any claim or threat of a Proceeding without the institution of the same and without any promise of payment or payment made to induce a settlement or (iii) the settlement of any Proceeding under Section 1, pursuant to which Indemnitee pays less than $10,000. 8. PARTIAL INDEMNIFICATION. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the claims, damages, expenses (including attorneys' fees), judgments, fines or amounts paid in settlement by Indemnitee in connection with the investigation, defense, settlement or appeal of any Proceeding specified in Section 1, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. The party or parties making the determination shall determine the portion (if less than all) of such claims, damages, expenses (including attorneys' fees), judgments, fines or amounts paid in settlement for which Indemnitee is entitled to indemnification under this Agreement. 9. COSTS. All the costs of making the determination required by Section 4 hereof shall be borne solely by the Company, including, but not limited to, the costs of legal counsel, proxy solicitations and judicial determinations. The Company shall also be solely responsible for paying (i) all reasonable expenses incurred by Indemnitee to enforce this Agreement, including, but not limited to, the costs incurred by Indemnitee to obtain court-ordered indemnification pursuant to Section 12, regardless of the outcome of any such application or proceeding, and (ii) all costs of defending any Proceedings challenging payments to Indemnitee under this Agreement. 10. ADVANCE OF EXPENSES. The Company shall advance all expenses incurred by or on behalf of Indemnitee in connection with any Proceeding within twenty (20) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such expenses, which undertaking shall be accepted by or on behalf of the Company with reference to the financial ability of Indemnitee to make repayment, and without the pledging of any security by Indemnitee. Notwithstanding Indemnitee's above-described rights to advancement of expenses, no advance of expenses shall be made in the circumstances proscribed by Section 3(a). Notwithstanding any other provision of this Agreement, if Indemnitee requests an adjudication or an award in arbitration pursuant to the provisions of Section 12 below in order to establish an entitlement to indemnification or advancement of expenses, any determination made pursuant to Section 4 of this Agreement that Indemnitee is not entitled to indemnification or to receive advancement of expenses shall not be binding and Indemnitee shall not be required to reimburse the Company for any expense advance unless and until a final judicial determination or award in arbitration is made with respect thereto as to which all rights of appeal therefrom have been exhausted or lapsed. -8-

11. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Not withstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee or agent of the Company or any subsidiary of the Company, or is or was serving at the request of the Company as a director, officer, employee or agent of another Person, a witness in any Proceeding, whether instituted by the Company or any other party, and to which Indemnitee is not a party, he shall be indemnified against all expenses actually and reasonably incurred by him or on his behalf in connection therewith. 12. ENFORCEMENT. (a) If a claim for indemnification or advancement of expenses made to the Company pursuant to Section 3 or 10 is not timely paid in full to Indemnitee by the Company as required by Section 3 or 10, respectively, Indemnitee shall be entitled to seek judicial enforcement of the Company's obligations to make such payment in an appropriate court of the State of Delaware or any other court of competent jurisdiction. In the event that a determination is made that Indemnitee is not entitled to indemnification or advancement of expenses hereunder, (i) Indemnitee may seek a de novo adjudication of Indemnitee's entitlement to such indemnification or advancement either, at Indemnitee's sole option, or (A) an appropriate court of the State of Delaware or any other court of competent jurisdiction or (B) an arbitration to be conducted by a single arbitrator pursuant to the rules of the American Arbitration Association; (ii) any such judicial proceeding or arbitration shall not in any way be prejudiced by, and Indemnitee shall not be prejudiced in any way by such adverse determination; and (iii) in any such judicial proceeding or arbitration the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advancement of expenses under this Agreement. Indemnitee shall commence a proceeding seeking an adjudication of Indemnitee's right to indemnification or advancement of expenses pursuant to the preceding sentence within one year following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); PROVIDED, HOWEVER, that the foregoing time limitation shall not apply in respect of a proceeding brought by Indemnitee to enforce Indemnitee's rights under Section 7 hereof. (b) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to the provisions of Section 12(a) that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. (c) In any action brought under this Section 12, it shall be a defense to a claim for indemnification (other than an action brought to enforce a claim for advancement of expenses) that Indemnitee has not met the standards of conduct which make it permissible under Delaware law for the Company to indemnify Indemnitee for the amount claimed. The burden of proving such defense shall be on the Company. (d) It is the intent of the Company that Indemnitee not be required to incur the expenses associated with the enforcement of his rights under this Agreement by litigation or -9-

other legal action because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder. Accordingly, if it should appear to Indemnitee that the Company has failed to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any proceeding designed (or having the effect of being designed) to deny, or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder the Company irrevocably authorizes Indemnitee from time tot time to retain counsel of his choice, at the expense of the Company as hereafter provided, to represent Indemnitee in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, stockholder or other person affiliated with the Company, in any jurisdiction. Regardless of the outcome thereof, but subject to Indemnitee having acted in good faith, the Company shall pay and be solely responsible for any and all costs, charges and expenses, including attorneys' and others' fees and expenses, incurred by Indemnitee (i) as a result of the Company's failure to perform this Agreement or any provision thereof, or (ii) as a result of the Company's or any person's contesting the validity or enforceability of this Agreement or any provision thereof as aforesaid. 13. LIABILITY INSURANCE AND FUNDING. To the extent the Company maintains an insurance policy or policies providing directors' and officers' liability insurance, Indemnitee shall be covered by such policy or polices, in accordance with its or their terms, to the maximum extent of the coverage available for any director or officer of the Company. If, at the time of the receipt of a notice of a claim pursuant to Section 4 hereof, the Company has directors' and officers' liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies. The Company shall have no obligation to obtain or maintain such insurance. 14. MERGER OR CONSOLIDATION. In the event that the Company shall be a constituent corporation in a merger, consolidation or other reorganization, the Company shall require as a condition thereto, (a) if it shall not be the surviving, resulting or other corporation therein, the surviving, resulting or acquiring corporation to agree to indemnify Indemnitee to the full extent provided herein, and (b) whether or not the Company is the surviving, resulting or acquiring corporation therein, Indemnitee shall also stand in the same position under this Agreement with respect to the surviving, resulting or acquiring corporation as Indemnitee would have with respect to the Company if the Company's separate existence had continued. 15. NONDISCLOSURE OF PAYMENTS. Except as expressly required by federal securities laws or other applicable laws, Indemnitee shall not disclose any payments made under this Agreement, whether indemnification or advancement of expenses, unless prior written approval of the Company is obtained. Any payments to Indemnitee that must be disclosed shall, unless otherwise required by law, be described only in the Company proxy or information statements relating to special and/or annual meetings of the Company's -10-

stockholders, and the Company shall afford Indemnitee the reasonable opportunity to review all such disclosures and, if requested, to explain in such statement any mitigating circumstances regarding the events reported. 16. NONEXCLUSIVITY AND SEVERABILITY; SUBROGATION. (a) The right to indemnification and advancement of expenses provided by this Agreement shall not be exclusive of any other rights to which Indemnitee may be entitled under the Amended and Restated Certificate of Incorporation (the "Certificate") or Amended and Restated Bylaws (the "Bylaws") of the Company, Delaware law, any other statute, insurance policy, agreement, vote of stockholders of the Company or of the Board (or otherwise), both as to actions in his official capacity and as to actions in another capacity while holding such office, and shall continue after Indemnitee has ceased to be a director or officer of the Company and shall inure to the benefit of his heirs, executors and administrators; PROVIDED, HOWEVER, that to the extent Indemnitee otherwise would have any greater right to indemnification and/or advancement of expenses under any provision of the Certificate or the Bylaws of the Company, Indemnitee shall be deemed to have such greater right pursuant to this Agreement; and, PROVIDED, FURTHER, that to the extent that any change is made to the Delaware law (whether by legislative action or judicial decision), the Certificate and/or the Bylaws that permits any greater right to indemnification and/or advancement of expenses than that provided under this Agreement as of the date hereof, Indemnitee shall be deemed to have such greater right pursuant to this Agreement. No amendment, alteration, or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee prior to such amendment, alteration, or repeal. (b) If any provision or provisions of this Agreement are held to be invalid, illegal or unenforceable for any reason whatsoever: (i) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, all portions of any provisions of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and (ii) to the fullest extent possible, the provisions of this Agreement (including, without limitation, all portions of any provisions of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that are not themselves invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable. (c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all actions necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights. 17. NOTICES. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and receipted for by the party addressed, on the date of such receipt, or (ii) if mailed by domestic -11-

certified or registered mail with postage prepaid, on the third business day after the date postmarked. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice. 18. MUTUAL ACKNOWLEDGMENT. Both the Company and Indemnitee acknowledge that in certain instances federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise. For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the "COMMISSION") has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. INDEMNITEE understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the Commission to submit the question of indemnification to a court in certain circumstances for a determination of the Company's right under public policy to indemnify Indemnitee. 19. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to principles of conflict of laws. 20. CONSENT TO JURISDICTION. The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any action, suit or proceeding which arises out of or relates to this Agreement. 21. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforcement is sought needs to be produced to evidence the existence of this Agreement. 22. MODIFICATION; SURVIVAL. This Agreement may be modified only by an instrument in writing signed by both parties hereto. The provisions of this Agreement shall survive the death, disability or incapacity of Indemnitee or the termination of Indemnitee's service as a director or officer of the Company and shall inure to the benefit of Indemnitee's heirs, executors and administrators. IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the date first above written.
INDEMNITEE: _______________________________ I. C. ISAACS & COMPANY, INC. By: _______________________________ Title:

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Exhibit 10.10 WORLDWIDE RIGHTS ACQUISITION AGREEMENT AGREEMENT dated as of September 30, 1997, by and among I. C. Isaacs & Company L.P., a limited partnership organized and existing under the laws of Delaware ("Buyer"); Brookhurst, Inc., a corporation organized and existing under the laws of California ("Seller"); and William Ott (individually, "Ott", and collectively, with Brookhurst, the "Selling Parties"). WITNESSETH: WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all of Seller's right, title and interest in and to all "BOSS" trademarks and other proprietary interests, if any, related thereto owned by Seller and used in connection with its business throughout the world together with the goodwill symbolized by such trademarks, on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the mutual promises contained herein the parties hereby agree as follows: ARTICLE I PURCHASE AND SALE 1.1 Purchase and Sale of BOSS Assets. Upon the terms and conditions herein set forth, Seller shall sell, convey, transfer, assign and deliver to Buyer on the Closing Date (as hereinafter defined), and Buyer shall purchase from Seller on the Closing Date, the following assets, properties and rights of Seller throughout the world (excluding Mexico) (the "Trademark Assets"), all of which, taken together, represent the business of Seller operating under the BOSS marks:

(a) any and all right, title and interest of the Selling Parties in and to the trademarks, service marks, trade names, logos, insignias, designs, copyrights (if any), and other proprietary interests therein, containing the term "BOSS" or constituting a stylized B, throughout the world (excluding Mexico), including, without limitation, all registrations and applications for registration (including, to the fullest extent permitted by law, all "intent to use" applications) therefor throughout the world (excluding Mexico) (the "Trademarks"), and the goodwill symbolized by the Trademarks, together with all causes of action and the proceeds thereof (except as set forth in paragraph 1.1(d)) in favor of the Selling Parties heretofore accrued or hereafter accruing with respect to the Trademarks; (b) all rights of the Selling Parties under license agreements, concurrent use agreements and other agreements listed on Schedule 1.1(b) and all files relating thereto (the "Assumed Agreements"), including, without limitation, an assignment of all copyrights, if any, that the Selling Parties jointly or severally may own as a result of designs and other works created by any licensee of any portion of the Seller's BOSS business (including any works created by Buyer and owned by Seller under Buyer's license from Seller); and (c) all right, title and interest in and to all records and other information the Selling Parties or either of them have within their possession or control applicable to the products they or either of them have previously licensed under the Trademarks and all trademark files relating to the Trademark Assets, provided, however, that Seller shall not be responsible for (i) destruction of records caused by an Act of God or other "Force Majeure" event, or (ii) any immaterial non-intentional destruction of records. -2-

(d) Notwithstanding the foregoing, the parties acknowledge and agree that Buyer is not acquiring any rights of Seller under its license agreements (including, without limitation, rights to institute legal proceedings pursuant to such license agreements) with Buyer, Boss Sportswear (U.S.A.) Inc. and Checkmate Group LLC, all of which license agreements have been (or will at Closing be) terminated. Nothing set forth in this Section 1.1 (d) shall limit Seller's rights, if any, to seek indemnification and contribution from licensees of Seller with regard to Excluded Liabilities, as hereinafter defined, which rights are specifically reserved to Seller. 1.2 Liabilities. Buyer shall assume no liabilities or obligations, whether now existing or arising in the future, fixed or contingent, known, or unknown, relating to the use by the Selling Parties (including, without limitation, use by any of Seller's affiliates, subsidiaries, predecessors or licensees other than Buyer) of the Trademarks and any other matter relating to the conduct of any business relating thereto prior to the Closing or with respect to any permitted activities of Seller, or any of its affiliates, subsidiaries, predecessors or licensees after the Closing Date ("Excluded Liabilities"). 1.3 Encumbrances. The sale and transfer of the Trademark Assets shall be free and clear of all pledges, security interests, mortgages and liens ("Encumbrances"). ARTICLE CONSIDERATION 2.1 Consideration. In consideration of the sale and transfer of the Trademark Assets to Buyer, (a) on the Closing Date, Buyer shall pay * by wire transfer to a bank account designated in writing by Seller; * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -3-

(b) on the Closing Date, Buyer shall pay * to the escrow agent identified in the Escrow Agreement; (c) on the Closing Date, Buyer shall deliver an executed Promissory Note in the form annexed hereto as Exhibit A (the "Note"); and (d) on the Closing Date, Buyer shall deliver a guaranty by * of Buyer's obligations under the Note in the form annexed hereto as Exhibit B (the"Guaranty"). ARTICLE THE CLOSING 3.1 Time and Place of Closing. The closing of the purchase and sale of the Trademark Assets hereunder (the "Closing") shall take place at the offices of Coudert Brothers located at 1114 Avenue of the Americas, New York, New York 10036 at 10:00 a.m. local time on a date agreed to by the parties (the "Closing Date"), which date shall not be later than eight (8) business days following the date on which the applicable waiting period, including any extension thereof, under the HSR Act (as hereinafter defined) shall have expired. 3.2 Deliveries To Be Made by the Seller. On the Closing Date, Seller shall have executed and delivered to Buyer the following: (a) executed trademark assignments substantially in the forms attached hereto as Exhibit C; (b) possession of (i) an original of each of Seller's Trademark registrations currently in effect (except that a copy of Seller's California state registration may be delivered); (ii) an original of any other registrations for the Trademarks to the extent in Seller's possession, * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -4-

custody or control; and (iii) Seller's original trademark application and registration files including, for example, letters or other materials from each of Seller's domestic and foreign trademark counsel showing deadlines for trademark office actions to the extent in Seller's possession, custody or control; (c) an agreement of assignment and assumption of Assumed Agreements in the form annexed hereto as Exhibit D (the "Assumption Agreement"); (d) an Escrow Agreement substantially in the form attached hereto as Exhibit E (the "Escrow Agreement"); (e) an executed copy of the Note; (f) an agreement terminating the License Agreement dated August 11, l994 between Buyer and Seller substantially in the form annexed hereto as Exhibit F (the "Termination Agreement"); and (g) such other instruments and documents as may be elsewhere herein required. 3.3 Deliveries To Be Made by Buyer. On the Closing Date, Buyer shall have executed and delivered to Seller the following: (a) the cash payment provided for in Section 2.1(a); (b) the executed Note; (c) the Assumption Agreement; (d) the Escrow Agreement; (e) delivery of the payment described in Section 2.1(b) to the Escrow Agent; (f) the Guaranty duly executed by *; and (g) the Termination Agreement. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -5-

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLING PARTIES Each of the Selling Parties hereby jointly and severally makes the following representations and warranties, each of which is complete and correct on and as of the date hereof (it being acknowledged and agreed that *. 4.1 Organization and Good Standing of the Seller. Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of California. * All qualifications of such company to do business as well as similar registrations to do business or business name registrations have been or will within 90 days after the Closing Date hereof be altered, changed or withdrawn to reflect such name change. 4.2 Authority; Execution. Seller has all the requisite power and authority, corporate and otherwise, to execute, deliver and perform its obligations under this Agreement. The execution and delivery of this Agreement, and each of the other instruments of transfer, conveyance and assignment delivered hereunder, have been duly and validly authorized by all necessary corporate and other action on the part of each of the Selling Parties, as applicable, and this Agreement and each of such other instruments has been duly executed by each of the Selling Parties, as applicable. This Agreement constitutes the valid and binding agreement of each of the Selling Parties, as applicable, enforceable against the Selling Parties in accordance with its respective terms. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -6-

4.3 Breach of Statute or Contract. (a) The execution, delivery and performance of this Agreement by the Selling Parties and the consummation of the transactions contemplated hereby will not: (i) violate or conflict with any provision of the charter documents or by-laws of Seller; (ii) violate or conflict with, result in the breach or termination of or otherwise give any other contracting party the right to terminate, or constitute a default (or an event which, with the lapse of time, or the giving of notice, or both, will constitute a default) under, any contract or other instrument to which either Selling Party is a party and which relate to the Trademark Assets or by which either Selling Party is bound, or result in the creation of any Encumbrance upon any of the Trademark Assets pursuant to the terms of any such contract or instrument, or (iii) violate or conflict with any judgment, order, writ, injunction or decree of any court or governmental body of any jurisdiction applicable to either Selling Party (excluding any judgments, orders, writs, injunctions or decrees in any actions or proceedings involving * or its affiliates) or, to the knowledge of Seller, any law or regulation materially adversely affecting Buyer's ability to exploit the Trademark Assets. (b) Except as set forth on Schedule 4.3(b), there are no notices, licenses, consents, permissions or approvals of any nature whatsoever which are required to be obtained by Seller from any Federal, state or local governmental or regulatory body or other third party or, to Seller's knowledge, from any foreign governmental or regulatory body for the consummation of the transactions contemplated by this Agreement, or as a condition to the sale, assignment and transfer of the Trademark Assets to be effected hereunder. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -7-

4.4 No Claims or Litigation. Except as set forth on Schedule 4.4(a), no litigation, judicial or arbitral action, claim asserted in writing and received by Seller or the Selling Parties within the preceding two years or, to the knowledge of Seller, administrative or regulatory proceeding or adversarial proceeding in any trademark office, or governmental investigation involving the Trademark Assets or the transactions contemplated by this Agreement, including, without limitation, any claim of conflict with or violation of any proprietary or other right (collectively, "Litigation") is pending or, to the knowledge of Seller, threatened against Seller. For purposes of the foregoing, "Litigation" shall not be deemed to include any actions, proceedings or claims involving * or its affiliates. Except as set forth on Schedule 4.4(b), there is no judgment, order, injunction, decree or award outstanding (whether rendered by a court, tribunal, administrative agency or arbitral tribunal and excluding any judgments, orders, injunctions, decrees or awards in any actions or proceedings involving * or its affiliates), against Seller or referencing Seller by name or, to Seller's knowledge, by which Seller is bound which affects the Trademark Assets or the use of the Trademark Assets in any way. 4.5 Trademarks. Schedule 4.5.A hereto sets forth a correct and complete list of all registrations currently in effect and pending applications for registration of the Trademarks, together with dates of registration, including, without limitation, pending copyright applications or registrations currently in effect and current trade name or d/b/a applications or registrations, if any. Schedule 4.5B sets forth, to the knowledge of Seller, all registrations and applications for registration of Trademarks which are no longer in effect. All registrations described in Schedule 4.5A are currently in effect and have not been found to be invalid, and, except as set * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -8-

forth in Schedule 4.5.C hereto, to Seller's knowledge, as of the date hereof no filings or other action is required for at least 120 days from the date hereof to maintain the registrations or applications described in Schedule 4.5.A in full force and effect. Except as set forth in Schedule 4.5.D, Seller is not currently licensing any person to use or operate under any of the Trademarks. True and complete copies and, if not available, descriptions of all such licenses, including all amendments or modifications, have heretofore been delivered to Buyer. Except as set forth in Schedule 4.5.E, and except for customary sell-off rights granted to alleged infringers, Seller has not affirmatively agreed or consented to the non-use by Seller, or use by any third party, of any mark containing the word BOSS. * there are no countries in which Seller or its licensees (other than Buyer) currently manufacture products bearing the Trademarks. Other than with respect to counterfeiters whose identities are unknown to Seller, Seller has, or will within 30 days after the Closing Date have, delivered to Buyer all written materials in its possession relating to any possible infringement, unfair competition or other interference with Seller's rights in the Trademarks involving apparel by any third party. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -9-

Seller has paid, or will pay within a reasonable period of time, in full (or otherwise to the satisfaction of the invoicing party) all outstanding invoices of domestic and foreign trademark counsel (except counsel in Mexico) for work done and disbursements incurred on behalf of the Selling Parties (whether or not billed on or by the date hereof). 4.6 No Alienation of Rights. Except as set forth in the Assumed Agreements or any other documents identified on Schedule 4.5.D or E or Schedule 4.6, no Selling Party has transferred, assigned, licensed (which license is currently outstanding) or otherwise encumbered with Encumbrances any of its rights in any Trademark Asset. 4.7 * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -10-

4.8 Ownership of Trademark Assets. As between the Selling Parties and all affiliates and other persons or entities related in any manner to any Selling Party, Seller owns all rights in and to the Trademark Assets. 4.9 Knowledge. Whenever a statement regarding the existence or absence of facts in this Agreement is qualified by a phrase such as to Seller's knowledge or words to similar effect, it is intended by the parties that the information attributed to Seller be actually known, or information which should have been known based on reasonable inquiry by *. 4.10 Materiality. The phrase "materially adversely affecting Buyer's ability to exploit the Trademark Assets" or words of similar effect, shall be deemed to mean (i) the existence or occurrence at any time from and after the date hereof of any actual harm, or the existence of any reasonably anticipated actual harm, to Buyer's ability to exploit the Trademark Assets or (ii) either (x) the failure of Seller to remedy the breach in question assuming the breach is remediable or (y) the inability of Seller to remedy the breach in question without prejudice to Buyer's ability to exploit the Trademark Assets. For purposes of this Section 4.10, no "actual * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -11-

harm" shall be deemed to exist as to the first six claims of harm unless such claim of harm reasonably involves at least the following amounts in damage or loss:
First Claim Second Claim Third Claim Fourth Claim Fifth Claim Sixth Claim * * * * * *

it being agreed that, without prejudice to, or limitation of, Seller's ability to claim that such a subsequent claim involves no "actual harm", no such monetary threshold applies to any subsequent claims. ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER Buyer hereby makes the following representations and warranties each of which is complete and correct on and as of the date hereof: 5.1 Organization and Good Standing of Buyer. Buyer is a limited partnership duly organized and validly existing under the laws of Delaware 5.2 Authority; Execution. Buyer has all requisite power and authority, corporate and otherwise, to execute, deliver and perform its obligations under this Agreement. The execution and delivery of this Agreement, and each of the other instruments of transfer, conveyance and assignment delivered hereunder, by Buyer have been duly and validly authorized by all necessary corporate and other action on the part of Buyer, and this Agreement and each of such other * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -12-

instruments has been duly executed by Buyer, as applicable. This Agreement constitutes the valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms. 5.3 Breach of Statute or Contract. (a) The execution, delivery and performance of this Agreement by Buyer and the consummation of the transactions contemplated hereby will not: (i) violate or conflict with any provision of the certificate of limited partnership and other organizational documents of Buyer; (ii) violate or conflict with, result in the breach or termination of or otherwise give any other contracting party the right to terminate, or constitute a default (or an event which, with the lapse of time, or the giving of notice, or both, will constitute a default) under, any contract or other instrument to which Buyer is a party; or (iii) violate or conflict with any judgment, order, writ, injunction or decree of any court or governmental body of any jurisdiction applicable to Buyer (excluding any judgments, orders, injunctions, decrees or awards in any actions or proceedings involving Seller or its affiliates) or, to the knowledge of Buyer, any law or regulation materially adversely affecting Buyer's ability to consummate the transaction contemplated by this Agreement. (b) Except as provided in Schedule 5.3(B), there are no notices, licenses, consents, permissions or approvals of any nature whatsoever which are required to be obtained by Buyer from any Federal, state or local governmental or regulatory body or other third party or, to Buyer's knowledge, from any foreign governmental or regulatory body for the consummation of the transactions contemplated by this Agreement, or as a condition to the sale, assignment and transfer of the Trademark Assets to be effected hereunder. -13-

ARTICLE VI COVENANTS 6.1 Further Assurances. (a) From time to time until the expiration of * from the Closing Date, upon the request and at the expense of Buyer but without further consideration, Seller shall: (i) do, execute, acknowledge, deliver and file, or shall cause to be done, executed, acknowledged, delivered and filed, all such further acts, deeds, transfers, conveyances, assignments or assurances (including, without limitation, for purposes of transferring record ownership of the Trademark Assets to Buyer) as may be reasonably requested by Buyer for transferring, conveying, assigning and reducing to Buyer's possession, ownership and use of the Trademark Assets including, without limitation, executing on the Closing Date any assignments of foreign Trademarks in recordable form reasonably requested by Buyer; and (ii) deliver to Buyer such other records, documentation and information in Seller's possession or control as may be reasonably requested by Buyer to assist Buyer in the use and protection of the Trademark Assets. (b) Seller shall keep and preserve any and all records, documentation and information which relate to the Trademark Assets except as otherwise provided herein. Seller may dispose or destroy any such records, documentation and information at any time, provided that Seller first shall notify Buyer so that Buyer may, at its expense and within a reasonable time after receipt of such notice, obtain from Seller any or all of said records, documentation and information. Seller shall not be responsible for (i) destruction of records caused by an Act of * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -14-

God or other "Force Majeure" event, or (ii) any immaterial non-intentional destruction of records. 6.2 No Further Use of "BOSS". From and after the Closing Date hereof, Selling Parties, (including, without limitation, all affiliates thereof) shall cease all use of the name and mark "BOSS", all variations thereon and all other names and marks which incorporate the term "BOSS" and will never use the name or mark "BOSS", any variation thereon or any other names and marks which incorporate the term "BOSS" in the future, except to the limited extent permitted in Section 6.6. Notwithstanding the foregoing, Seller may make such limited use of the name and mark "BOSS" as is permitted under the Settlement Agreement (as hereinafter defined). 6.3 No Effect on Use of Other Marks of Seller. Nothing in this Agreement shall prohibit the use by Seller, for any purpose, of the name or mark "Brookhurst," or the name or mark * as to which trademarks Brookhurst retains all right, title and interest. 6.4 * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -15-

* 6.5 Mail and Communications. From and after the Closing Date, Seller shall promptly remit or refer to Buyer any mail or other communications, including, without limitation, any written inquiries, relating to the Trademarks Assets which are received by Seller from and after the Closing for a period of *. 6.6 Sell-off of Inventories. (a) Seller currently has: approximately * finished career apparel garments with a label that bears a BOSS logo in its possession, the substantial majority of which constitutes uniforms for * (such garments being hereinafter collectively referred to as the "Career Apparel Garments"). Notwithstanding anything to the contrary contained herein, Seller may for a period of * after the Closing Date: (i) continue to sell and distribute the Career Apparel Garments in its possession on the date hereof with a label that bears a * logo in the typeface which is set forth on Exhibit G; provided, that Seller may extend the aforesaid limited use of * labels up to an aggregate additional period of three years, provided it pays in advance an annual license fee of * and executes a license agreement with Buyer in a form mutually agreed to by the parties. Seller agrees that after the Closing Date it will not order any new labels with a BOSS logo, manufacture or cause to be manufactured any garments which will bear * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -16-

a BOSS logo or label and will destroy its current inventory of labels with a BOSS logo beyond those already used in the existing inventory of Career Apparel Garments and will make no further use of any labels with a BOSS logo. The use of any labels with a BOSS logo, or the sale or distribution of any Career Apparel Garments with a label containing a BOSS logo in accordance with the terms of this paragraph shall not constitute a breach of this Agreement. None of the Career Apparel Garments bears a BOSS mark on the exterior of such garments. 6.7 HSR Matters. As promptly as possible after the date hereof, but in any case, not later than * following the date hereof, unless the parties shall otherwise agree filing is unnecessary, Buyer and Seller shall file their respective Notification and Report Forms under the Hart-Scott Rodino Antitrust Improvements Act of 1976 as amended (the "HSR Act") with respect to the transactions contemplated hereby. The parties further agree to request early termination of the waiting period applicable to such filings under the HSR Act and to respond as promptly as practicable to any request for additional information made pursuant to the HSR Act. ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND SELLER 7.1 Conditions Precedent to Obligations of Buyer. The obligation of Buyer to consummate the transactions contemplated under this Agreement is subject to the fulfillment, as of the Closing Date, of each of the following conditions (any or all of which may be waived by Buyer): (a) the representations and warranties of the Selling Parties set forth in Article IV hereof shall be true and correct in all material respects; * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -17-

(b) the Selling Parties shall have performed and complied in all material respects with all covenants, obligations and undertakings required by this Agreement to be performed or complied with on or prior to the Closing Date: (c) Buyer shall have been furnished with a certificate, dated the Closing Date and *; (d) the applicable waiting period, including any extension thereof, under the HSR Act shall have expired without action taken to prevent consummation of the transactions contemplated by this Agreement; (e) no judgment, order or decree shall have been rendered which has the effect of enjoining the consummation of the transactions contemplated by this Agreement; (f) a settlement agreement by and among * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -18-

* (i) with respect to any intent-to-use applications for the Trademarks presently outstanding for which use has been made prior to the date hereof, a list of first use dates for each product listed in each of said applications, if any, and documentary support for same to support "amendments to allege use" shall have been delivered to Buyer; and (j) the Escrow Agreement shall have been entered into by all parties thereto. 7.2 Conditions Precedent to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated under this Agreement are subject to the fulfillment, as of the Closing Date, of each of the following conditions (any or all of which may be waived by Seller): (a) the representations and warranties of Buyer set forth in Article V shall be true and correct in all material respects as of the Closing Date; (b) Buyer shall have performed and complied in all material respects with all obligations and undertakings required by this Agreement to be performed or complied with by Buyer on or prior to the Closing Date; * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -19-

(c) Seller shall have been furnished with a certificate, dated the Closing Date and executed by an officer of Buyer certifying to the fulfillment of the conditions specified in Sections 7.2(a) and (b); (d) the applicable waiting period, including any extension thereof, under the HSR Act shall have expired without action taken to prevent consummation of the transactions contemplated by this Agreement; (e) no judgment, order or decree shall have been rendered which has the effect of enjoining the consummation of the transactions contemplated by this Agreement; and * (i) the Escrow Agreement shall have been entered into by all parties thereto. ARTICLE VIII SURVIVAL OF REPRESENTATIONS AND WARRANTIES INDEMNIFICATION 8.1 All representations and warranties contained in or made pursuant to this Agreement shall be continuing and shall survive and remain in full force and effect after the date hereof for a period of * notwithstanding any investigation conducted by any party hereto. All claims for indemnification under this Agreement shall be brought by the parties exclusively pursuant to, * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -20-

and shall be disposed of exclusively in accordance with the terms of, this Article VIII. 8.2 * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -21-

* 8.3 * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -22-

* 8.4 Notification of Claims. In the event of the occurrence of any event which any party asserts constitutes a Buyer Indemnity Claim or Seller Indemnity Claim, as applicable, the indemnified party shall provide the indemnifying party with prompt notice of such event, including, without limitation, any facts and circumstances which give rise to such claim, and shall otherwise make available to the indemnifying party all relevant information which is material to the claim and which is in the possession of the indemnified party. If such event involves the claim of any third party (a "Third-Party Claim"), the indemnifying party shall have the right to elect to join in the defense, settlement, adjustment or compromise of any such Third-Party Claim, and to employ counsel to assist such indemnifying party in connection with the handling of such claim, at the sole expense of the indemnifying party, and no such claim shall be settled, adjusted or compromised, or the defense thereof terminated, without the prior consent of the indemnifying party unless and until the indemnifying party shall have failed, after the lapse of a reasonable period of time, but in no event more than 30 days after written notice to it of the Third-Party Claim, to join in the defense, settlement, adjustment or compromise of the same. An indemnified party's failure within a reasonable time to give notice or to furnish the indemnifying party with any relevant data and documents in its possession in connection with any Third-Party Claim shall not constitute a defense (in part or in whole) to any claim for indemnification by such party, except and only to the extent that such failure shall result in any material prejudice to the indemnifying party. If so desired by any indemnifying party, such party may elect, at such party's sole expense, to assume control of the * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -23-

defense, settlement, adjustment or compromise of any Third-Party Claim, insofar as the claim relates to the liability of the indemnifying party, provided that such indemnifying party shall obtain the consent of all indemnified parties before entering into any settlement, adjustment and compromise of such claim, or ceasing to defend against such claim, if as a result thereof, or pursuant thereto, there would be imposed on an indemnified party any liability or obligation not covered by the indemnification obligations of the indemnifying party under this Agreement (including, without limitation, any injunctive relief or other remedy). If Buyer has not received a written notice from Seller disputing Buyer's Buyer Indemnity Claim within ninety (90) days after Buyer's submission of a notice of such claim to Seller, then Buyer may provide a further notice sent to Seller by registered or certified mail to the effect that Seller has not disputed such claim and that Buyer intends to submit a Settlement Notice (as defined in the Escrow Agreement) based on Seller having been deemed to have consented to such claim and the computation thereof, as applicable. If Seller does not within thirty (30) days after receipt of such latter notice dispute in writing the Buyer Indemnity Claim by notice to Buyer and Escrow Agent, then Seller shall be deemed to have consented to such claim and, to the extent set forth in Buyer's notices, the computation thereof. 8.5 Escrow Agreement. (a) At the Closing, Buyer will deposit * with the Escrow Agent, which amount shall be deemed to be part of the "Escrow Fund" as defined in the Escrow Agreement. In addition, under the terms of the Note and the Escrow Agreement, Buyer is obligated to deposit portions of certain installments of principal and interest due under the Note with the Escrow Agent on and as of the date payment of each such installment is due. Effective upon each such deposit, such funds shall be deemed to become part of the "Escrow * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -24-

Fund" for all purposes thereunder and shall be disbursed pursuant to the terms of the Escrow Agreement. 8.6 * 8.7 * ARTICLE IX GENERAL 9.1 Waiver. Any failure of Buyer, on the one hand, or the Selling Parties, on the other, to comply with any of the obligations or agreements set forth in this Agreement or to fulfill any condition set forth in this Agreement may be waived only by written instrument signed by the other party. No failure by any party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver of such right, nor shall any single or partial exercise of any right hereunder by any party preclude any other or future exercise of that right or any other right hereunder by that party. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -25-

9.2 Notices. All notices, requests or other communications required or permitted hereunder (excluding, however, mail and/or communications covered under paragraph 6.5 hereof) shall be given or made in writing and shall be (i) delivered personally (including commercial carrier), (ii) sent by registered or certified airmail, return receipt requested, postage prepaid or (iii) sent by telecopier, addressed to the party to whom they are directed at the following addresses, or at such other address as may from time to time be designated by such party to the others in accordance with this Section 9.2: If to Seller, to: Brookhurst, Inc. 107 West Carob Street Compton, California 90220 Attention: William Ott Telecopier: 310/763-3846 William Ott 107 West Carob Street Compton, California 90220 Telecopier: 310/763-3846 With a copy to: Shereff, Friedman, Hoffman & Goodman, LLP 919 Third Avenue New York, New York 10022 Attention: Robert J. Jossen, Esq. Telecopier: 212/758-9526 If to Buyer, to: I. C. Isaacs & Company L.P. 3840 Bank Street Baltimore, Maryland 21224 Attention: President and Co-Chief Executive Officer Telecopier: 410/558-2096 -26-

I. C. Isaacs & Company L.P. 350 Fifth Avenue Suite 1029 New York, New York 10118 Attention: Chairman and Co-Chief Executive Officer Telecopier: 212/695-7579 With a copy to: Piper & Marbury L.L.P. Charles Center South 36 South Charles Street Baltimore, Maryland 21201-3010 Attention: Robert J. Mathias, Esq. Telecopier: 410/576-1604 Any notice, request or other communications shall be deemed to have been given and to be effective upon receipt or refusal by the addressee. Any party may change its address for notices hereunder, effective upon giving of notice of such change hereunder to the other parties. 9.3 No Third Party Beneficiaries. Neither this Agreement nor any provision hereof, nor any document or instrument executed or delivered pursuant hereto, shall be deemed to create any right in favor of or impose any obligation upon any person or entity other than Buyer and Selling Parties and their respective successors and assigns. 9.4 * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -27-

* 9.5 Captions and Paragraph Headings. Captions and paragraph headings used in this Agreement are for convenience only and are not a part of this Agreement and shall not be used in interpreting or construing it. 9.6 Entire Agreement. The making, execution and delivery of this Agreement by the parties has been induced by no representations, statements, warranties or agreements other than those herein expressed. This Agreement embodies the entire understanding of the parties with respect to the subject matter hereof. Notwithstanding the foregoing, the parties acknowledge that a number of different agreements and instruments of which the parties are signatory are all being executed simultaneously with this Agreement and at Closing. The parties acknowledge that this Agreement or instrument is to be interpreted and enforced separately and independently of any other such * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -28-

agreement or instrument, and the breach of any such agreement by a party shall not affect the rights of such party under this Agreement. This Agreement may be amended or modified only by an instrument of equal formality signed by the parties or their duly authorized representatives. The parties have made no representations or warranties not expressly set forth in this Agreement. This Agreement supersedes and terminates all prior discussions, negotiations, understandings, arrangements and agreements among the parties relating to the subject matter hereof, except as expressly set forth herein. 9.7 Counterparts. This Agreement may be executed in any number of duplicate counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 9.8 Assignability. No party hereto may assign any of its interests, rights or obligations under the Agreement without the prior written consent of the other parties. Notwithstanding the foregoing, Buyer may assign its rights, but not its obligations, under this Agreement to any entity under common control with Buyer or to any assignee or other successor in interest to any of the Trademark Assets without the consent of Seller, and Seller may assign its rights under the Note and the Escrow Agreement in accordance with the terms of such instruments, provided, that neither party may assign any rights referred to in this Section 9.8 unless it has complied with all of its obligations under the instrument the rights under which it wishes to assign. Any impermissible attempted assignment of this Agreement without such prior written consent shall be void as to the other parties to this Agreement. Nothing in this Section 9.8 shall be construed as requiring Seller's consent to any assignment of Buyer's rights under this Agreement to * or any affiliate thereof and the * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -29-

assumption by such assignee of any obligations of Buyer (if any) relating thereto. 9.9 Expenses. The parties shall each bear their own expenses in connection with the negotiation, execution and delivery of this Agreement and the performance of their respective obligations hereunder. 9.10 Successors and Assigns. This Agreement and the provisions thereof shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties hereto. 9.11 Governing Law. The validity, construction, operation and effect of any and all of the terms and provisions of this Agreement shall be determined and enforced in accordance with the laws of * without giving effect to principles of conflicts of law thereunder except as to matters solely involving foreign trademark rights, in which case the applicable foreign trademark laws shall be applied to determine such foreign trademark rights. In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such action will be brought in *. 9.12 * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -30-

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -31-

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -32-

* 9.13 * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -33-

9.14 * 9.15 * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -34-

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -35-

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -36-

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -37-

IN WITNESS WHEREOF, the parties have duly signed this Agreement the day and year first written above. BROOKHURST, INC.
By: --------------------------------Name: William Ott Title: President

I. C. ISAACS & COMPANY L.P., a Delaware limited partnership
By: /s/ Robert J. Arnot -------------------------------Name: Robert J. Arnot Title: Chairman and Co-Chief Executive Officer /s/ Gerald W. Lear -------------------------------Name: Gerald W. Lear Title: President and Co-Chief Executive Officer

By:

WILLIAM OTT

IN WITNESS WHEREOF, the parties have duly signed this Agreement the day and year first written above. BROOKHURST, INC.
By: /s/ William Ott ---------------------------------Name: William Ott Title: President

I. C. ISAACS & COMPANY L.P., a Delaware limited partnership
By: -------------------------------Name: Robert J. Arnot Title: Chairman and Co-Chief Executive Officer -------------------------------Name: Gerald W. Lear Title: President and Co-Chief Executive Officer

By:

WILLIAM OTT
/s/ William Ott ---------------------------------

"CERTAIN OBLIGATIONS (AS DEFINED ABOVE) OF I.C. ISAACS & COMPANY L.P. ("ISAACS") HAVE BEEN ASSUMED BY * AND THE SELLING PARTIES HAVE RELEASED ISAACS FROM SAID OBLIGATIONS. BROOKHURST, INC. By:__________________________(Seal) WILLIAM OTT, PRESIDENT

WILLIAM OTT, INDIVIDUALLY" * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

WORLDWIDE RIGHTS ACQUISITION AGREEMENT EXHIBITS
Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G Exhibit H The Promissory Note The * Guaranty Trademark Assignments Assumption Agreement Escrow Agreement Termination Agreement "BOSS by Brookhurst" logo typeface Certain Provisions in Settlement Agreement

* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

SCHEDULE 1.1(b) ASSUMED AGREEMENTS * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

SCHEDULE 4.3(b) THIRD PARTY CONSENTS AND WAIVERS Hart-Scott-Rodino approval.

SCHEDULE 4.4(a) LITIGATION * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

* * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

LIST OF MACAU PROCEEDINGS * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

JAPAN List of All Legal Matters Involving Boss Trademark TRIALS * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

SCHEDULE 4.4(b) JUDGMENTS AND ORDERS * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

SCHEDULE 4.5.A CURRENT TRADEMARK REGISTRATIONS AND APPLICATIONS * * Prior to Closing, the Acquisition Agreement shall not be deemed to be breached by inclusion of incorrect information relating to the Marks and Classes in this Schedule. Said information shall be reviewed, corrected if necessary, updated and confirmed by Seller prior to Closing. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

2 SCHEDULE 4.5.A * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

3 SCHEDULE 4.5.A * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

SCHEDULE 4.5B PREVIOUS TRADEMARK REGISTRATIONS AND APPLICATIONS * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Mexico * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2

SCHEDULE 4.5.C FILINGS AND ACTIONS REQUIRED WITHIN 120 DAYS * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

SCHEDULE 4.5.D CURRENT BOSS LICENSES * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

SCHEDULE 4.5.E AGREEMENTS RE USE OF TRADEMARK * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

2 SCHEDULE 4.5.E * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

SCHEDULE 4.6 ALIENATION OF RIGHTS [NONE]

SCHEDULE 5.3(B) THIRD PARTY CONSENTS Hart-Scott-Rodino approval. Approval from secured lender, Congress Financial Corporation.

Exhibit A to 10.10 EXHIBIT A/WWA PROMISSORY NOTE October __, 1997 FOR VALUE RECEIVED, I.C. ISAACS & COMPANY L.P., a limited partnership organized and existing under the laws of Delaware with its principal place of business at 3840 Bank Street, Baltimore, MD 21224 ( Maker ), hereby promises to pay to BROOKHURST, INC., a corporation organized and existing under the laws of the State of California with its principal place of business located at 107 West Carob Street, Compton, California 90220-5206 ("Brookhurst"), the principal sum of U. S. $11,000,000, on the dates and in the amounts hereinafter set forth. This Promissory Note is the promissory note issued by Maker pursuant to a Worldwide Rights Acquisition Agreement by and between Maker and Brookhurst (the Rights Agreement"). Capitalized terms used but not defined herein shall have the respective meanings ascribed to them in the Rights Agreement. This Promissory Note is hereinafter referred to as the "Note". 1. Interest. The outstanding principal amount of this Note shall bear simple interest at the per annum rate of * (computed on the basis of a 365 day year and the number of actual days elapsed), and shall be payable quarterly, commencing with the quarterly payment due January 1, 1998 as set forth in paragraph 2. Interest shall accrue as of the date of this Note and thereafter on the outstanding and unpaid principal amount of this Note, and shall be payable quarterly, as set forth in paragraph 2. 2. Principal, Interest and Maturity Date. (a) Subject to paragraph 2(b) below, the following principal and interest payments are to be made by Maker to Brookhurst on the dates indicated:
Payment Due Date ----------------Jan. 1, 1998 Apr. 1, 1998 July 1, 1998 Oct. 1, 1998 Principal Due -------------Quarterly Interest -----------------* * * *

* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Jan. Apr. July Oct. Jan. Apr. July Oct. Jan. Apr. July Oct. Jan. Apr. July Oct.

1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1, 1,

1999 1999 1999 1999 2000 2000 2000 2000 2001 2001 2001 2001 2002 2002 2002 2002

*

*

*

*

* * * * * * * * * * * * * * * *

(b) The parties agree that subject to the provision of paragraph 3.2(e) of the Escrow Agreement by and between Maker and Brookhurst of even date herewith ("Escrow Agreement") * due under paragraph 2(a) of this Note shall be transmitted by Maker to the Escrow Agent for deposit in the Escrow Fund (as defined in the Escrow Agreement) under the terms and conditions of the Escrow Agreement. 3. Prepayment. This Note may be prepaid at any time by Maker upon payment of the total amount of principal and interest due as provided in paragraph 2 *, less payments previously made hereunder, or upon such other terms as the parties may agree. 4. General Payment Provisions. All payments of principal and interest and other sums due pursuant to this Note to Brookhurst shall be made * or to such other account as Brookhurst shall have previously designated to Maker in writing not later than * Business Days (as defined below) prior to the date on which such payment becomes due. (ii) All payments of principal and interest and other sums due pursuant to this Note to the Escrow Fund shall be made pursuant to the requirements of the Escrow Agreement. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2

(iii)If the due date of any payment under this Note would otherwise fall on a day which is not a Business Day, such date will be extended to the immediately succeeding Business Day. The term "Business Day" shall mean any day other than Saturday, Sunday, or a banking holiday of the United States, State of New York, or *. (iv) A late payment fee of * of any principal or interest payment made more than * days after the due date hereunder shall be due with such late payment, notwithstanding any right of cure by Maker. All such late payments shall continue to accrue interest of the rate of * per annum from the due date until the date actually paid. 5. Events of Default. An Event of Default shall occur upon one or more of the following events: (a) Maker shall default in the payment when due of any principal or interest under this Note and such default shall continue unremedied for a period of *, provided, however, that upon written notice from Brookhurst Maker shall have * to cure any such non-payment, and such cure shall preclude Brookhurst from declaring an Event of Default based upon non-payment; or (b) Maker shall admit in writing its inability to, or be generally unable to, pay its debts as such debts generally become due; or (c) Maker shall (i) apply for or consent in writing to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidation of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under Title II of the United States Code (as now or hereafter in effect) (the "Bankruptcy Code"), or such other such similar law in any jurisdiction, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or readjustment of debts, (v) acquiesce in writing to any petition filed against it in an involuntary case under the Bankruptcy Code, or (vi) take any corporate action for the purpose of effecting any of the foregoing; or (d) a proceeding or case shall be commenced, without the application or consent of Maker in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of such entity or * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 3

of all or any substantial part of its assets, or (iii) similar relief in respect of such entity, under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of ninety (90) days; or an order for relief against any such entity shall be entered in an involuntary case under the Bankruptcy Code or such other similar law in any jurisdiction; Upon and during the continuance of an Event of Default, and subject to the provisions of Section 15 of this Note, (i) Brookhurst may, by written notice to Maker, declare the principal amount then outstanding of, and the total interest on, this Note (ie., *), to be forthwith due and payable, whereupon such amount shall be immediately due and payable without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by Maker; (ii) Maker shall pay all of the expenses of Brookhurst incurred for the collection of this Note, including reasonable attorneys' fees and legal expenses, and (iii) Brookhurst may exercise from time to time any other rights and remedies available to it by law, including without limitation those available under any agreement or other instrument relating to the amounts owed under this Note. No delay on the part of Brookhurst in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by Brookhurst of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy. 6. * 7. No Assignment. The rights and obligations under this Note may be assigned by Maker only with the written consent of Brookhurst; provided that nothing in this Section 7 shall be construed as requiring Brookhurst's consent to an assumption of the obligations and assignment of the rights of Maker under this Note by * or its subsidiary * as permitted under Section 15 of this Note and nothing in this Section 7 shall be construed as affecting Maker's rights under Section 15. Upon assignment, Brookhurst agrees that the assignee shall stand in the shoes of Maker, and shall have all of the obligations and rights as Maker, including, without limitation, the rights and obligations assumed by Maker under the Rights Agreement, the Escrow Agreement, and the right of setoff as provided in paragraph 6 of this Note. Brookhurst may assign this Note to any third party, provided that such assignment does not in any way limit Maker's right of setoff as provided in paragraph 6 of this Note. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 4

8. Entire Agreement. Except as set forth in this Section 8 and the definition of capitalized terms used in this Note, the terms of this Note evidence the entire agreement between Maker and Brookhurst regarding the indebtedness evidenced by this Note and the terms and provisions of the Rights Agreement shall in no way control, interpret, amend, add to or affect the rights, duties and obligations of Maker and Brookhurst under this Note. 9. Governing Law. This Note shall be governed by, and construed in accordance with, the laws of * applicable to contracts made and to be performed entirely in the * without regard to such state's choice of law rules. 10. Notices. All notices, demands or requests or other communications relating to any matter set forth herein shall be given or made in writing and shall be (i) delivered personally (including commercial courier), or (ii) sent by registered or certified airmail, return receipt requested, postage prepaid, addressed to the party to whom they are directed at the following address, or at such other address as may be designated by notice from such party.
If to Brookhurst: Brookhurst, Inc. 107 West Carob Street Compton, California 90220-5206 Attn.: William E. Ott Shereff, Friedman, Hoffman & Goodman, LLP 919 Third Avenue New York, New York 10022-9998 Attn.: Robert J. Jossen, Esq. I.C. Isaacs & Company, L.P. 3840 Bank Street Baltimore, MD 21224 Attn: Gerald W. Lear President and Co-Chief Executive Officer

with a copy to:

If to Maker:

* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 5

and I.C. Isaacs & Company, L.P. 350 Fifth Avenue Suite 1029 New York, New York 10118 Attn: Robert J. Arnot Chairman and Co-Chief Executive Officer With a copy to: Piper & Marbury L.L.P. Charles Center South 36 South Charles Street Baltimore, MD 21201-3010 Attn: Robert J. Mathias, Esq. Any notice, request, demand or other communication given or made in the manner prescribed in this paragraph shall be deemed to have been given and to be effective upon receipt or refusal by the addressee. Any party may change its address for notices hereunder, effective upon giving notice of such change hereunder to the other party. 11. Adjustment of Interest Rate or Fees. No provision of this Note shall require the payment of interest to the extent that receipt of any such payment by Brookhurst would be contrary to the provisions of United States law, if any, limiting the maximum amount of interest or fees that may be charged to or collected from Maker, and if any sum in excess of such maximum rate of interest of fees is paid or charged, the excess will be returned to Maker, without premium or penalty, and all payments made thereafter will be appropriately applied to interest and principal to give effect to such maximum rate, and after such application any amount paid in excess of principal due Brookhurst shall be immediately refunded to Maker. If the maximum rate of interest, if any, now permitted by law to be charged for this transaction is increased, then for so long as the increase is in effect, the applicable maximum rate permitted to be charged as referred to in the paragraph immediately preceding will be deemed to be such increased rate. If the maximum rate of interest, if any, now permitted by law to be charged for this transaction should be eliminated so that there would be no maximum rate, then interest on this Note shall thereafter be paid at the rate provided in this Note. 6

12. Waiver. Maker hereby waives diligence, presentment, protest, demand for payment and notice of default, dishonor or nonpayment to or upon Maker with respect to this Note except as otherwise provided herein. No delay on the part of Brookhurst in exercising any right hereunder shall operate as a waiver of such right under this Note. 13. Modifications in Writing. This Note may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification or discharge is sought. 14. * 15. * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 7

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 8

16. Execution by Brookhurst. Notwithstanding anything in this Note to the contrary, this Note shall not be effective and enforceable against Maker unless and until it has been signed below by Brookhurst. Brookhurst signs below to further evidence Brookhurst's agreement to be bound by the terms of this Note. I.C. ISAACS & COMPANY L.P., a Delaware limited partnership By: I.G. DESIGN, INC., a Delaware corporation, its general partner By: ___________________________________
Name: Title: Gerald W. Lear President and Co-Chief Executive Officer

By: ___________________________________
Name: Title: Robert J. Arnot Chairman and Co-Chief Executive Officer

Brookhurst, Inc. By: ___________________________________ Name: Title: THE OBLIGATIONS (AS DEFINED ABOVE) OF I.C. ISAACS & COMPANY L.P. ( ISAACS ) HAVE BEEN ASSUMED BY * AND BROOKHURST HAS RELEASED ISAACS FROM THE OBLIGATIONS. ISAACS HAS NO OBLIGATIONS UNDER THIS NOTE OR THE ESCROW AGREEMENT. BROOKHURST, INC. By: (Seal) William Ott, President * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 9

EXHIBIT B/WWA GUARANTY OF PROMISSORY NOTE For valuable consideration, the undersigned, * ("Guarantor"), hereby unconditionally guarantees the due, prompt and complete performance (including payment) at stated maturity, by acceleration or otherwise by I.C. Isaacs & Company L.P., a Delaware limited partnership ("Buyer"), of each and every obligation and liability now or hereafter existing of Buyer under that certain Promissory Note, dated September ___, 1997 ("Note") to Brookhurst, Inc. ("Seller") whether for principal, interest, fees, expenses, attorneys' fees, court costs and collection charges incurred by Seller in enforcing this Guaranty ("the "Obligations") or otherwise. The obligations of Guarantor under this Guaranty are independent of the obligations of Buyer, and a separate action or actions may be brought against Guarantor, whether action is brought against Buyer or whether Buyer is joined in any such action or actions; provided, however, Seller shall be required to first comply with any procedures specified in the Note or any agreement ancillary thereto with respect to demands to be made against Buyer or actions to be taken in order to quantify an amount due or identify an issue in dispute. If any provision of this Guaranty is held invalid or unenforceable, the remainder of this Guaranty shall not be affected thereby, the provisions of this Guaranty being severable in any such instance. Guarantor guarantees that the Obligations will be paid strictly in accordance with the terms of the Note, regardless of any law, regulation or order, except an order with respect to the liability of Buyer or Guarantor under this Note now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of Seller with respect thereto. The liability of Guarantor under this Guaranty * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

* Any action, inaction, change, extension, waiver, or consent referred to above may be in such manner and upon such terms Seller and Buyer may deem proper, and without notice to or further assent from the Guarantor, and all without affecting this Guaranty or the obligations of the Guarantor hereunder, which shall continue in full force and effect until all of the Obligations and all obligations of the Guarantor hereunder shall be fully paid and performed. Guarantor hereby waives promptness, diligence, presentment, demand, protest, notice of acceptance or of the occurrence of an Event of Default and any other notice with respect to any of the Obligations and this Guaranty and any requirement that Seller exhaust any right or take any action against Buyer or other person or entity. Guarantor hereby represents and warrants as follows: (i) The execution, delivery and performance by Guarantor of this Guaranty do not contravene any law or contractual restriction binding on or affecting Guarantor. (ii) No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the due execution, delivery and performance by Guarantor of this Guaranty. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2

(iii) This Guaranty is a legal, valid and binding obligation of Guarantor, enforceable in accordance with its terms. No amendment or waiver of any provision of this Guaranty nor consent to any departure by Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by Seller. No failure on the part of Seller to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. * * This Guaranty shall be governed by, and construed in accordance with, the laws of * without reference to its choice of law rules.* IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. This Guaranty shall terminate immediately upon satisfaction of the Note.
Dated September ___, 1997 * By:

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

Name:

Title: ----------------------

* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 3

WITNESSES:

4

EXHIBIT C/WWA TRADEMARK ASSIGNMENT This Assignment is effective as of the ____ day of __________________, 1997, by and between Brookhurst, Inc., a California corporation with its principal place of business at 107 West Carob Street, Compton, California 90220 ("Assignor") and I.C. Isaacs, L.P., a Delaware Limited Partnership with its principal place of business at 3840 Bank Street, Baltimore, Maryland 21224 ("Assignee"). WITNESSETH: WHEREAS, Assignor is the owner of certain trademarks in the United States of America constituting or containing the word BOSS and the Stylized B, including common law rights and rights in certain trademark registrations and applications for registration listed on the "Schedule of Trademarks" attached hereto, together with the good will of the business associated therewith (the "Trademarks"); WHEREAS, Assignee desires to acquire all right, title and interest of Assignor in and to the Trademarks; NOW, THEREFORE, to All Whom It May Concern, be it known that for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Assignor does hereby sell, assign, transfer and set over, to Assignee, its successors and assigns forever, its entire right, title and interest in and to the Trademarks, the same to be held and enjoyed by Assignee for its own use and enjoyment, and for the use and enjoyment of its successors, assigns or other legal representatives forever, as fully and entirely as the same would have been held and enjoyed by Assignor had the assignment and sale set forth herein not been made.

IN TESTIMONY WHEREOF, Assignor has caused these presents to be signed by its officer thereunto duly authorized, and its corporate seal to be hereto affixed. BROOKHURST, INC. By: Name:

Title: COUNTY OF NEW YORK : :ss: STATE OF NEW YORK : On this ____ day of _____________, 1997, before me personally appeared ________________, to me personally known, who, being duly sworn, did say that he is ________________ of ____________________, a California corporation, and that the foregoing instrument was signed and sealed on behalf of the corporation by authority of its Board of Directors, and that he acknowledges such instrument to be the free deed and act of said corporation for the purposes therein set forth and intending that this instrument be recorded.

Notary Public -2-

SCHEDULE OF TRADEMARKS Brookhurst, Inc.'s BOSS U.S. Trademark Applications/Registrations * * Prior to Closing, the Acquisition Agreement shall not be deemed to be breached by inclusion of incorrect information relating to the Classification or Status in this Schedule. Said information shall be reviewed, corrected if necessary, updated and confirmed by Seller prior to Closing. ** For ease of reference the description of goods in this chart is generalized.

* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

U.S. Trademark Applications/Registrations (Page 2 of 3) * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

U.S. Trademark Applications/Registrations (Page 3 of 3) * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

EXHIBIT C/WWA TRADEMARK ASSIGNMENT This Assignment is effective as of the ____ day of __________________, 1997, by and between Brookhurst, Inc., a California corporation with its principal place of business at 107 West Carob Street, Compton, California 90220 ("Assignor") and I.C. Isaacs, L.P., a Delaware Limited Partnership with its principal place of business at 3840 Bank Street, Baltimore, Maryland 21224 ("Assignee"). WITNESSETH: WHEREAS, Assignor is the owner of certain trademarks outside of the United States of America except Mexico constituting or containing the word BOSS and the Stylized B, including common law rights and rights in trademark registrations and applications for registration outside the United States of America except Mexico and listed on the Schedule of Trademarks attached hereto, together with the good will of the business outside the United States of America except Mexico associated therewith throughout the world (the "Trademarks"); WHEREAS, Assignee desires to acquire all right, title and interest of Assignor in and to the Trademarks; NOW, THEREFORE, to All Whom It May Concern, be it known that for and in consideration of good and valuable consideration, the receipt and adequacy of which are hereby acknowledged. Assignor does hereby sell, assign, transfer and set over, to Assignee, its successors and assigns forever, its entire right, title and interest in and to the Trademarks, the same to be held and enjoyed by Assignee for its own use and enjoyment, and for the use and enjoyment of its successors, assigns or other legal representatives forever, as fully and entirely as the same would have been held and enjoyed by Assignor had the assignment and sale set forth herein not been made.

IN TESTIMONY WHEREOF, Assignor has caused these presents to be signed by its officer thereunto duly authorized, and its corporate seal to be hereto affixed. BROOKHURST, INC. By:_________________________ Name: Title: COUNTY OF NEW YORK : :ss: STATE OF NEW YORK : On this ____day of _____________, 1997, before me personally appeared _____________, to me personally known, who, being duly sworn, did say that he is ________________ of ___________________, a California corporation, and that the foregoing instrument was signed and sealed on behalf of the corporation by authority of its Board of Directors, and that he acknowledges such instrument to be the free deed and act of said corporation for the purposes therein set forth and intending that this instrument be recorded.

Notary Public -2-

SCHEDULE OF TRADEMARKS Brookhurst Inc.'s BOSS Non-U.S. Trademark Applications/Registrations* * * Prior to Closing, the Acquisition Agreement shall not be deemed to be breached by inclusion of incorrect information relating to the Classification or Status in this Schedule. Said informaion shall be reviewed, corrected if necessary, updated and confirmed by Seller prior to Closing. ** For ease of reference the decsription of goods in this chart is generalized.

* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

EXHIBIT D/WWA ASSIGNMENT AND ASSUMPTION AGREEMENT THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is made and entered into this ___ day of September, 1997, by and between Brookhurst, Inc., a California corporation ("Brookhurst") and I.C. Isaacs & Company L.P., a Delaware limited partnership ("Isaacs"). W I T N E S S E T H: WHEREAS, Brookhurst has agreed to sell, transfer and assign to Isaacs, and Isaacs has agreed to purchase and accept from Brookhurst certain assets of Brookhurst pursuant to a Worldwide Rights Acquisition Agreement entered into on September __, 1997 between Brookhurst and Isaacs (the "Acquisition Agreement"); WHEREAS, Isaacs has agreed to assume certain obligations related to said acquired assets; NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows: 1. Capitalized terms used herein and not defined herein shall have the meanings given such terms in the Acquisition Agreement. 2. Brookhurst hereby assigns to Isaacs all its rights under the agreements identified on the schedule attached hereto constituting the Assumed Agreements, and all files relating thereto, free and clear of all Encumbrances. 3. Isaacs hereby assumes all obligations of Seller arising from and after the date hereof under the Assumed Agreements solely insofar as they arise after Closing. IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day, month and year first above written. BROOKHURST, INC. By:_________________________ Name:_______________ Title:______________

I. C. ISAACS & COMPANY L.P., a Delaware limited partnership By:_______________________________________________ Name: Robert J. Arnot Title: Chairman and Co-Chief Executive Officer By:_______________________________________________ Name: Gerald W. Lear Title: President and Co-Chief Executive Officer -2-

SCHEDULE See Schedule 1.1(b)

Exhibit E to 10.10 EXHIBIT E/WWA ESCROW AGREEMENT THIS ESCROW AGREEMENT is entered into this ___ day of September 1997, by and among (i) I. C. Isaacs & Company L.P., a Delaware limited partnership ("Buyer"); (ii) Brookhurst, Inc., a California corporation ("Seller") and (iii) ______________________________________________ (the "Escrow Agent"). WITNESSETH: WHEREAS, Seller and Buyer are parties to a Worldwide Rights Acquisition Agreement dated September __, 1997 (the "Acquisition Agreement") pursuant to which Seller has sold to Buyer, and Buyer has purchased from Seller, subject to the terms and conditions set forth in the Agreement, certain assets, subject to certain liabilities, of Seller constituting the assets of the BOSS business of Seller; WHEREAS, Buyer and Seller wish to enter into this Escrow Agreement in order to establish an escrow arrangement for certain funds that are being and will be deposited with the Escrow Agent pursuant to the terms of the Acquisition Agreement and a promissory note of even date herewith in favor of Seller (the "Note"); WHEREAS, funds deposited with the Escrow Agent hereunder shall be referred to as the "Escrow Fund"; WHEREAS, Buyer and Seller wish to appoint the Escrow Agent, and the Escrow Agent has agreed to act, as a depository and administrator of the Escrow Fund upon the terms, conditions and provisions hereinafter set forth; and NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and other good and valuable consideration, receipt of which is hereby acknowledged by the Escrow Agent, it is hereby agreed among the parties hereto as follows: 1. Appointment of the Escrow Agent 1.1 Buyer and Seller hereby designate the Escrow Agent, and the Escrow Agent hereby agrees to act, as a depository and administrator of the Escrow Fund, subject to the terms and conditions set forth herein.

1.2 The Escrow Agent's duties and responsibilities, in its capacity as such, shall be limited to those expressly set forth in this Escrow Agreement, and the Escrow Agent shall not be subject to, nor obligated to recognize, any other agreement between any or all of the parties hereto even though reference thereto may be made herein, except to the extent that definitions contained in the Acquisition Agreement are incorporated into this Escrow Agreement. This Escrow Agreement may not be amended at any time in such a way as to affect the rights, responsibilities, obligations, liabilities or fees of the Escrow Agent except with the Escrow Agent's prior written consent, as evidenced by an instrument in writing signed by all the parties hereto. 1.3 The Escrow Agent, in its capacity as such, is authorized, in its sole discretion, to disregard any and all notices or directions given by Buyer or Seller or by any other person, firm or corporation, except (i) such notices, directions, instructions as are specifically provided for herein, (ii) joint written instructions received by the Escrow Agent from Buyer and Seller and (iii) a Final Order (as hereinafter defined). If any property subject hereto is at any time attached, garnished or levied upon under a Final Order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by the Final Order, or in case the Final Order shall be made or entered affecting such property or any part thereof, then and in any of such events the Escrow Agent is authorized to rely upon and comply with any such Final Order which the Escrow Agent is advised by competent and experienced legal counsel of its own choosing, or by legal counsel selected by mutual consent of Seller and Buyer, is not subject to further review or appeal and is binding upon the Escrow Agent for purposes hereof . The term "Final Order" as used herein shall mean a final judgment, order or award of a court of competent jurisdiction or arbitrator, as evidenced by a certified copy of such judgment, order or award, as certified by such court or arbitrator, as the case may be, provided that such judgment, order or award is not appealable or the time for taking an appeal has expired, or in the case of an arbitral award, payment is not stayed by a court of competent jurisdiction. 1.4 (a) In the event that the Escrow Agent shall be uncertain as to its duties or actions hereunder, or shall receive instructions from Buyer or Seller which, in the opinion of the Escrow Agent, are in conflict with any of the provisions of this Agreement, it shall be entitled to maintain the Escrow Fund and may decline to take any further action until the Escrow Agent receives joint written instructions from Buyer and Seller (or a Final Order) directing the disbursement of all or any portion of such Escrow Fund, in which case the Escrow Agent shall then make such disbursement in accordance with such instructions (or Final Order). Should any dispute arise with respect to the payment or ownership or right of possession of any proposed disbursement, the Escrow Agent is authorized and directed to retain in its possession, without liability to anyone, all or any part of the amount of such proposed disbursement until such dispute shall have been settled either by mutual agreement of the parties concerned or by a Final Order, provided that the Escrow Agent shall be under no duty whatsoever to institute or defend any such proceedings, and, provided further, that if any such dispute continues for more than 120 days, the Escrow Agent may, in its discretion, upon written notice to Buyer and Seller

interplead the Escrow Fund (or that portion thereof which is the subject of such dispute) to a court of competent jurisdiction (subject to the provisions of Section 6.4(b) hereof). (b) Notwithstanding the foregoing, the interpleader by the Escrow Agent of any sum to a court of competent jurisdiction (the "Interpleader Action") shall in no way operate to alter or affect the parties' obligations to arbitrate any dispute pursuant to paragraph 6.4(b) of this Agreement. In furtherance of the parties' obligations to arbitrate any dispute arising hereunder the parties agree to execute any reasonably necessary document, including but not limited to any stipulation, stipulated order and/or stipulation of discontinuance, to cause any sum interpleaded to a court of competent jurisdiction by the Escrow Agent to be transferred to an account under the control of the arbitrator(s) selected pursuant to paragraph 6.4(b) of this Agreement and to have the Interpleader Action dismissed. Thereafter, the dispute related to the interpleaded funds shall be resolved in arbitration pursuant to paragraph 6.4(b) of the Agreement. 1.5 (a) It is understood and agreed that the Escrow Agent shall: (i) be under no duty to accept notices or instructions from any person other than as expressly provided for in this Escrow Agreement; (ii) be protected in acting upon any notice, opinion, request, certificate, approval, consent or other document reasonably believed by it to be genuine and what it purports to be; (iii)be deemed conclusively to have given and delivered any notice required to be given or delivered hereunder if the same is in writing, signed by any one of its authorized officers and (A) mailed, by registered or certified mail, return receipt requested, postage prepaid, (B) sent via expedited courier service that regularly requires signed receipts evidencing delivery, or (C) hand delivered, in a sealed wrapper, manually receipted for by the addressee, in each case to Buyer or Seller with a copy to the other party to this Agreement at the addresses set forth in Section 6.3 hereof; (iv) be indemnified and held harmless jointly by Buyer and Seller from and against any claim made against it by reason of its acting or failing to act in connection with any of the transactions contemplated hereby and against any loss, liability or expense, including reasonable attorneys' fees and other reasonable expenses of defending itself against any claim of liability it may sustain in carrying out the terms of this Escrow Agreement, except for claims which are successfully asserted against the Escrow Agent based upon the Escrow Agent's failure to comply with the terms and conditions of this Escrow Agreement or the bad faith, gross negligence or willful misconduct of the Escrow Agent; provided however, that (A) promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any such action, suit or proceeding, the Escrow Agent shall notify all parties hereto in writing of the existence of such demand, claim, action, suit or proceeding; (B) the

indemnitor shall be entitled, at its own expense, to participate in and assume the defense of any such action, suit or proceeding; and (C) the aforesaid indemnity obligations shall survive the termination of this Escrow Agreement or the resignation of the Escrow Agent; (v) have no liability in respect of or duty to inquire into the terms and conditions of the Acquisition Agreement or any other document or agreement executed in connection with or pursuant to the Acquisition Agreement, its duties under this Escrow Agreement being understood by the parties to be ministerial in nature; (vi) be permitted to consult with counsel of its choice which is reasonably experienced in legal matters of a nature similar to those arising under this Escrow Agreement, and shall not be liable for any action taken, suffered or omitted by it in good faith in accordance with the advice of such counsel; provided, however, that nothing contained in this subsection (vi), nor any action taken by the Escrow Agent or by such counsel, shall relieve the Escrow Agent from liability for any claims which are occasioned by its failure to comply with the terms and conditions of this Escrow Agreement or the bad faith, gross negligence or willful misconduct of the Escrow Agent, as provided in subparagraph (iv) above; (vii) not be bound by any modification, amendment, termination, cancellation, rescission or supersession of this Escrow Agreement, unless the same shall be in writing and signed by both Buyer and Seller and notice thereof is provided to the Escrow Agent, except to the extent that any such modification, amendment, termination, cancellation, rescission or supersession affects the rights, responsibilities, obligations, liabilities or fees of the Escrow Agent hereunder, in which case any document or instrument reflecting such changes shall also be signed by the Escrow Agent; (viii) be entitled to refrain from taking any action other than to keep all cash and other payments and all other property held by it in escrow and to make the investments as herein provided until it shall be directed otherwise in writing by Buyer and Seller, or as otherwise provided herein or by a Final Order; and (ix) not have any interest in the Escrow Fund, other than possession thereof in its capacity as escrow agent hereunder. (b) Any payments of interest or income from the Escrow Fund shall be subject to withholding regulations then in force with respect to federal, state and local taxes. The parties will provide the Escrow Agent with appropriate W-9 forms for taxpayer identification number certifications. It is understood that the Escrow Agent shall be responsible for income reporting only with respect to income earned on investment of funds which are part of the Escrow Fund and shall not be responsible for any other reporting. This paragraph shall survive

notwithstanding any termination of this Escrow Agreement or the resignation of the Escrow Agent. (c) Notwithstanding anything to the contrary herein, unless and until funds are deposited with the Escrow Agent pursuant to Section 2.1, the Escrow Agent shall not have any liability or responsibility whatsoever to Buyer or Seller or any other person under this Escrow Agreement, except for its failure or refusal to accept delivery of any funds deposited in escrow with the Escrow Agent in the manner specified in Section 2.1 or to hold such funds thereafter pursuant to the terms hereof. 1.6 From and after the date hereof, Buyer and Seller shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments, or cause to be done such further acts, as the Escrow Agent may reasonably request in order to enable the Escrow Agent to carry out more effectively the provisions and purposes of this Escrow Agreement, to evidence compliance with this Escrow Agreement or to assure itself that it is reasonably protected in acting under this Escrow Agreement. 1.7 (a) For its services hereunder, the Escrow Agent shall be entitled to be paid an annual fee in the amount specified in Exhibit A, payable in advance. The Escrow Agent hereby acknowledges receipt from Buyer and Seller of the fee for the first annual period hereunder. Payment of the relevant fee for all subsequent annual periods shall be due on each anniversary of the date hereof. (b) All fees of the Escrow Agent hereunder shall be paid by Buyer and Seller, such parties sharing equally in such costs. 2. Establishment of Escrow Fund 2.1 The parties acknowledge and agree that * has been deposited with the Escrow Agent as of the date hereof and from time to time further funds will be deposited with the Escrow Agent. The parties further agree that subject to the provisions of paragraph 3.2(e), * due under paragraph 2 of the Note shall be transmitted by the maker thereunder to the Escrow Agent for deposit in the Escrow Fund. Under no circumstances shall Seller be obligated to deposit any funds in the Escrow Fund beyond the amounts set forth in this Section 2.1 which are deposited by the maker with the Escrow Agent. 2.2 The Escrow Fund shall be held by the Escrow Agent in a separate account and disbursed to Buyer or Seller in accordance with the terms of this Agreement. 2.3 The Escrow Agent shall invest all funds on deposit from time to time in the Escrow Fund, and all undistributed income earned thereon, and keep the same invested in certain instruments as Seller shall from time to time direct the Escrow Agent in writing, subject to the restrictions and limitations hereinafter provided, and disburse the same * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

terms, conditions and provisions hereof. The Escrow Agent shall invest the Escrow Fund solely in accordance with Seller's instructions, provided that Seller's instructions and the Escrow Agent's authority shall be restricted to: (i) obligations issued or unconditionally guaranteed by the Government of the United States of America or any State or political subdivision thereof; (ii) certificates of deposit and interest-bearing deposit accounts of any domestic bank or trust company which has a combined capital and surplus of at least $200,000,000; (iii) certificates of deposit with a maturity not to exceed one year or (iv) commercial paper with a maturity of no more than one year issued by any corporation organized and existing under the laws of the United States of America or any state thereof, which at the time of purchase has been rated, and the ratings for which are not less than, "A-1" if rated by Standard and Poor's Corporation or "P-1" if rated by Moody's Investors Services, Inc. In no event shall the Escrow Agent invest the Escrow Fund or any undistributed income earned thereon in any security or instrument having a maturity extending beyond one year, provided, that such limitation shall not apply to the obligations described in clause (i) above. The Escrow Agent shall have authority to invest daily cash receipts received by the Escrow Fund in the Paine Webber Money Market Fund, or equivalent brokerage house money market fund pending investment of such funds in accordance with the provisions of this Section 2.3. 3. Disposition of Escrow Fund 3.1 All funds on deposit from time to time in the Escrow Fund shall be held, invested and reinvested by the Escrow Agent pursuant to the terms of this Escrow Agreement until the funds therein shall be disbursed in accordance with the terms of this Escrow Agreement. 3.2 The Escrow Agent shall make disbursement of funds on deposit in the Escrow Fund only as set forth in this Section 3.2. (a) Buyer shall promptly provide Seller and the Escrow Agent with a copy of all Buyer Indemnity Claims submitted by Buyer pursuant to Section 8.2 of the Acquisition Agreement, whether such Buyer Indemnity Claims are issued before or after any funds are deposited into escrow hereunder. (b) Promptly following its receipt of notice of any Buyer Indemnity Claims, and without any further duty of investigation or inquiry on its part, the Escrow Agent shall establish a reserve (a "Reserve") in the Escrow Fund, which in all events shall be equal to the full amount of each claim identified in such notice (which shall include, without limitation, Buyer's good faith estimate of the costs and expenses reasonably expected to be incurred by Buyer in investigating and disposing of any such claim). Subject to Sections 9.12(b) and (c) of the Acquisition Agreement concerning release of funds from the Escrow Fund following *, the Escrow Agent shall not be authorized to release any funds from the Escrow Fund as to which a Reserve has been established pursuant to this Section 3.2(b) unless and until the relevant Buyer Indemnity Claim that gave rise to such Reserve has been Definitively Resolved and the Escrow Agent has received written notice of such resolution pursuant to the requirements of Section 3.2(c) below. Until they are Definitively Resolved in * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

the manner hereinafter provided, all unresolved Buyer Indemnity Claims shall be referred to herein as "Pending Claims." (c) For purposes hereof, a Pending Claim shall be deemed to have been "Definitively Resolved" when any of the following events has occurred: (i) a claim is settled by mutual written agreement of Buyer and Seller; or (ii) a Final Order deciding such claim has been rendered; or (iii) ninety (90) days have elapsed since Seller's initial receipt of notice of a Buyer Indemnity Claim ("First Notice") and neither Buyer nor Escrow Agent has received, on or before that date, a written notice from Seller disputing such claim in whole or in part, and Buyer has provided a further notice ("Second Notice") sent to Seller by registered or certified mail to the effect that Seller has not disputed such claim and that Buyer intends to submit a Settlement Notice (as hereinafter defined) and Seller has not within thirty (30) days after receipt of such Second Notice disputed in writing the Buyer Indemnity Claim by written notice to Buyer or Escrow Agent. The Escrow Agent shall not be deemed to have received notice that a Pending Claim has been Definitively Resolved, and shall not be obligated to take any action with respect thereto, until 10 days after the Escrow Agent shall have received one of the following (a "Settlement Notice"): (A) with respect to subparagraph (i) above, a copy of joint written instructions duly signed by Buyer and Seller stating that a Pending Claim has been settled by mutual agreement of Buyer and Seller; (B) with respect to subparagraph (ii) above, a certified copy of the final arbitration award which has not been stayed by a court of competent jurisdiction within 30 days thereafter, or the final non-appealable judgment, order or award of the relevant court, together with a certificate duly signed by the prevailing party in such proceeding certifying that such judgement, order or award is final and non-appealable for all purposes hereof; and (C) with respect to subparagraph (iii) above, written certification from Buyer issued to the Escrow Agent in good faith to the effect that Buyer has provided the First Notice and the Second Notice as described in subparagraph (iii) above without having received a written dispute notice from Seller, as provided above. Each Settlement Notice shall stipulate the amount(s) to be paid to Buyer or Seller in connection with such Definitively Resolved claim, and copies thereof shall be provided to each of the parties hereunder at the same time it is provided to the Escrow Agent. Buyer and Seller hereby acknowledge and agree that the Escrow Agent shall have the right to rely upon any Settlement Notice duly given jointly by Buyer and Seller under (A) in the preceding sentence, by Buyer or Seller under (B) in the preceding sentence and by Buyer under (C) in the preceding sentence, and shall be authorized to act upon any such written notice. (d) A Buyer Indemnity Claim that has been Definitively Resolved shall be referred to herein as a "Settled Claim". To the extent that a Settled Claim has been resolved in favor of Buyer, the Escrow Agent shall promptly disburse the full amount (or the relevant

portion, as applicable) of such claim to Buyer (or such other person as Buyer may direct) from the Escrow Fund (to the extent of funds in the Escrow Fund) in accordance with the relevant Settlement Notice. Following such payment, all Reserves that relate to such Buyer Indemnity Claim and are not due Buyer in accordance with the terms of the Settlement Notice shall be released, but the funds subject thereto shall remain in the Escrow Fund until otherwise disbursed in accordance with the terms hereof. (e) On November 30, 1999, the excess of the outstanding principal amount of the Escrow Fund over *, as such excess amount is further reduced by the aggregate amount of all outstanding Reserves, shall be disbursed by the Escrow Agent to Seller on five (5) days' prior written notice to Buyer. On November 30, 2000, the excess of the outstanding principal amount of the Escrow Fund over *, as such excess amount is further reduced by the aggregate amount of all outstanding Reserves, shall be disbursed by the Escrow Agent to Seller on five (5) days' prior written notice to Buyer. On November 30, 2001, the excess of the outstanding principal amount of the Escrow Fund over *, as such amount is further reduced by the aggregate amount of all outstanding Reserves, shall be disbursed by the Escrow Agent to Seller on five (5) days' prior written notice to Buyer. On November 30, 2002, the excess of the outstanding principal amount of the Escrow Fund over the aggregate amount of all outstanding Reserves, shall be disbursed by the Escrow Agent to Seller on five (5) days' prior written notice to Buyer. (f) Subject to paragraph (e) above, all funds deposited with the Escrow Agent shall continue to be held in escrow hereunder until November 30, 2002, on which date the balance of the Escrow Fund, net of any Reserves, shall be distributed to Seller. Any amounts remaining with the Escrow Agent thereafter shall be released from time to time as and when all remaining Pending Claims to which such funds relate have been Definitively Resolved. The Escrow Agent shall promptly disburse to Buyer the full amount of each Settled Claim resolved in favor of Buyer in accordance with the relevant Settlement Notice and any funds in the Escrow Fund in excess of remaining Reserves shall be distributed to Seller. Notwithstanding the foregoing, all funds deposited with the Escrow Agent shall be distributed to Buyer and/or Seller in accordance with any joint written instructions of Buyer and Seller. (g) The Escrow Agent shall provide written notice of any proposed distributions of funds to Buyer or Seller hereunder five (5) days before making any such disbursement. For purposes of such five (5)-day notice period, such period shall commence on the date on which the relevant notice is given by the Escrow Agent to Buyer and Seller and shall terminate at midnight on the fifth business day thereafter. The Escrow Agent shall also send copies of all notices it receives hereunder to the other parties hereto. 3.3 The party or parties receiving a disbursement from the Escrow Fund shall, upon request, furnish to the Escrow Agent concurrently with its receipt of such disbursement, a signed receipt for the amount of such disbursement. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

4. Disposition of Income All income earned from time to time by the Escrow Fund ("Income") shall be pooled with all other funds held in the Escrow Fund for investment purposes and shall become part of the Escrow Fund for all purposes, provided that on December 31 of each calendar year or any other date mutually agreeable to Buyer, Seller and the Escrow Agent, Escrow Agent shall disburse to Seller * (net of losses or any other expenses) unless such Income amounts are subject to a Reserve, Pending Claim or Settled Claim. Any losses realized upon any investment of the Escrow Fund pursuant to Section 2.3 or otherwise shall be charged to the Escrow Fund. 5. Term 5.1 The term of this Escrow Agreement shall commence on the date hereof and continue until the entire amount of principal and Income on deposit in the Escrow Fund shall have been disbursed by the Escrow Agent as provided in this Escrow Agreement, whereupon this Escrow Agreement and the escrow arrangements created hereunder shall terminate, and the Escrow Agent shall be released and discharged from all further duties and obligations hereunder, but without prejudice to any liability of the Escrow Agent for its failure to comply with the terms and conditions of this Escrow Agreement or its bad faith, gross negligence or willful misconduct hereunder. 5.2 The Escrow Agent shall have the right, upon termination of this Escrow Agreement as hereinabove provided, to require the other parties hereto, as a condition to receiving a final disbursement from the Escrow Fund, if applicable, to execute, acknowledge and deliver to the Escrow Agent releases of the Escrow Agent, in its capacity as such, reasonably satisfactory to the Escrow Agent in form and content; provided, however, that the Escrow Agent shall have accounted to each party delivering such release with respect to the Escrow Agent's administration of the Escrow Fund and provided further that any such release shall not extend to any acts of bad faith, gross negligence or willful misconduct on its part in connection with the Escrow Agent's administration of the Escrow Fund. 6. Miscellaneous 6.1 (a) Buyer and Seller may, upon at least 30 days' prior written notice to the Escrow Agent executed by each of them, dismiss the Escrow Agent hereunder and jointly appoint a successor. In such event, the Escrow Agent shall promptly account for and deliver to the successor escrow agent named in such notice the then balance of the Escrow Fund, if any, including all investments thereof and accrued income thereon. Upon acceptance thereof and of such accounting by such successor escrow agent, and upon reimbursement to the Escrow Agent by Buyer and Seller of all expenses due to it hereunder through the date of such accounting and delivery, the Escrow Agent, in its capacity as such, shall be released and discharged from all of its duties and obligations hereunder, but without prejudice to any liability of the Escrow * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Agent for failure to comply with the terms and conditions of this Escrow Agreement or its bad faith, gross negligence or willful misconduct hereunder. (b) (i) Without limiting the foregoing, the Escrow Agent (and any successor escrow agent hereunder) shall have the right, as provided in (ii) below, at any time to resign as such by delivering the Escrow Fund to any successor escrow agent jointly designated by the other parties hereto in writing , or to any escrow agent which constitutes a national banking association with assets in excess of _________________ who is willing to serve under this Agreement], or to any court of competent jurisdiction, [or to an account under the control of the arbitrator(s) selected pursuant to paragraph 9.12 of the Acquisition Agreement, whereupon the Escrow Agent shall be discharged of and from any and all further obligations arising in connection with this Escrow Agreement, but without prejudice to any liability of the Escrow Agent for its bad faith, gross negligence or willful misconduct hereunder. (ii) The resignation of the Escrow Agent will take effect on the earlier of (a) the appointment of a successor escrow agent (including a court of competent jurisdiction) or (b) the day which is 30 business days after the date of delivery of its written notice of resignation to the other parties hereto. If at that time the Escrow Agent has not received a designation of a successor escrow agent hereunder, the Escrow Agent's sole responsibility after that time shall be to safekeep the Escrow Fund until receipt of a designation of successor escrow agent hereunder or a joint written disposition instruction by the other parties hereto or a final order. 6.2 This Escrow Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto and their respective successors, heirs, remaindermen, assigns, executors, administrators, personal representatives, trustees and fiduciaries. The Escrow Agent shall have the right to rely upon any proper evidence of the authority of any such successors, heirs, remaindermen, assigns, executors, administrators, personal representatives, trustees and fiduciaries. Notwithstanding anything to the contrary herein contained, no beneficial interest of any person in the Escrow Fund shall be subject to anticipation or assignment by such person, nor shall the Escrow Fund be subject to interference or control of any creditor of such person, or be taken or reached by any legal or equitable process in satisfaction of any debt or other liability of such person prior to disbursement, and each party hereby agrees to indemnify the other parties in connection with any loss or diminution of such party's interest in the Escrow Fund as a result of any such matter. 6.3 Any notice, direction, instruction or other communications required or permitted hereunder shall be given or made in writing and shall be (i) delivered personally (including commercial carrier), (ii) sent by registered or certified airmail, return receipt requested, postage prepaid or (iii) sent by telecopier, addressed to the party to whom they are directed at the following addresses, or at such other address as may from time to time be designated by such party to the others in accordance with this Section 6.3:

If to Buyer, to: I. C. Isaacs & Company L.P. 3840 Bank Street Baltimore, Maryland 21224 Attention: President and Co-Chief Executive Officer Telecopier: 410/558-2096 I. C. Isaacs & Company L.P. 350 Fifth Avenue Suite 1029 New York, New York 10118 Attention: Chairman and Co-Chief Executive Officer Telecopier: 212/695-7579 With a copy to: Piper & Marbury L.L.P. Charles Center South 36 South Charles Street Baltimore, Maryland 21201-3010 Attention: Robert J. Mathias, Esq. Telecopier: 410/576-1604 If to Seller, to: Brookhurst, Inc. 107 West Carob Street Compton, California 90220 Attention: William E. Ott Telecopier: 310/763-3846 With a copy to: Shereff, Friedman, Hoffman & Goodman, LLP 919 Third Avenue New York, New York 10022 Attention: Robert J. Jossen, Esq. Telecopier: 212/758-9526

If to the Escrow Agent, to:

Attention: Telecopier: Copies of any written communications sent by Buyer or Seller to the Escrow Agent relating to this Escrow Agreement shall be sent to the other parties hereto, and copies of any written communications sent by the Escrow Agent relating to this Escrow Agreement shall be sent to Buyer and Seller. Notwithstanding the foregoing, Buyer and Seller shall have the right to engage in direct written communications between themselves relating to this Escrow Agreement without providing copies thereof to the Escrow Agent, except to the extent otherwise required under the terms of this Escrow Agreement. All notices, directions, instructions and communications hereunder shall be effective, and deemed given, if and when delivered, on and as of the date of receipt thereof, as evidenced by a written receipt by or on behalf of the party to which the same is so delivered, and, if mailed or sent by expedited courier, on and as of the date of delivery, as evidenced by the acknowledgement of delivery issued with respect thereto by the applicable postal authorities or by the confirmation of delivery issued by the applicable courier service. Any party may change its address for notices hereunder, effective upon giving of notice of such change hereunder to the other parties. 6.4 (a) The validity, construction, operation, and effect of any and all of the terms and provisions of this Agreement shall be determined and enforced in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law thereunder, except as to matters solely involving foreign trademark rights, in which case the applicable foreign trademark laws shall be applied to determine such foreign trademark rights. In the event any legal action becomes necessary to enforce or interpret the terms of this Agreement, the parties agree that such action will be brought in *. * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

* 6.5 This Escrow Agreement, and any notice, direction or other document or instrument delivered in connection herewith, may be executed in counterparts, each of which shall constitute an original instrument, but all of which together shall constitute a single agreement, notice, direction, document or instrument as the case may be. Buyer and Seller agree to cooperate with each other in good faith in joining in any notices or written instructions that are required to be delivered to the Escrow Agent jointly by Buyer and Seller. 6.6 The provisions of this Escrow Agreement shall not be altered or terminated by operation of law or by the occurrence of any event (except as otherwise specified herein), including, without limitation, the death or incapacity or the termination of the legal existence of any party hereto. 6.7 No party hereto may assign any of its interests, rights or obligations under this Agreement without the prior written consent of the other parties. Notwithstanding the foregoing, Buyer may, without the consent of Seller, assign rights and obligations under this Agreement to any entity under common control with Buyer or to any successor-in-interest, in whole or in part, to the assets acquired by Buyer from Seller, and Seller may assign its rights and obligations to any successor-in-interest to the assets of Seller by merger or liquidation. In addition, Seller may direct in writing to Escrow Agent (with a copy sent to Buyer) that proceeds of the Escrow Fund be paid to any third party Seller shall designate in writing. Nothing in this Agreement shall be construed as requiring Seller's or the Escrow Agent's consent to (a) the assignment, in whole or in part, of ICI's (as hereinafter defined) rights under this Agreement (including the right to make claims against and obtain proceeds from the Escrow Fund) to *, any affiliate of *, or (b) the assumption, in whole or in part, of ICI's obligations under this Agreement by *. In the event of such assignment and/or assumption, * shall be recognized as "Buyer" for purposes of all claims submitted by * as Buyer pursuant to Section 3, including, without limitation, for purposes of * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

distribution of funds pursuant to Settled Claims resulting therefrom. Nothing in this Agreement shall be construed as affecting Buyer's rights under Section 6.10. 6.8 All monetary amounts stated herein or determined hereunder are and shall be denominated in United States dollars, and all liabilities and obligations of any party hereunder, to the extent calling for the payment of money, shall be satisfied in United States dollars. IN WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the day and year first above written. I. C. ISAACS & COMPANY L.P., a Delaware limited partnership
By: ____________________________________ Name: Robert J. Arnot Title: Chairman and Co-Chief Executive Officer By: ____________________________________ Name: Gerald W. Lear Title: President and Co-Chief Executive Officer

BROOKHURST, INC. By: ____________________________________ Name: ________________ Title: _________________ _____________________________, as Escrow Agent By: Name: Title:

EXHIBIT F/WWA TERMINATION OF LICENSE AGREEMENT THIS TERMINATION OF LICENSE AGREEMENT ("Agreement") is entered into and effective as of the ____ day of ______, 1997 ("Effective Date"), by and between BROOKHURST, INC., a California corporation ("LICENSOR"), and I.C. ISAACS & CO., L.P., a Delaware limited partnership ("LICENSEE"). RECITALS A. LICENSOR and LICENSEE entered into that certain License Agreement dated August 11, 1994 regarding the use of the mark BOSS ("License Agreement"). B. LICENSOR and LICENSEE mutually desire to terminate the License Agreement effective as of the Effective Date. NOW, THEREFORE, the parties agree as follows: 1. TERMINATION The License Agreement is hereby terminated in all respects except as otherwise provided herein, effective as of the Effective Date. 2. ROYALTIES On or before 30 days after the Effective Date, LICENSEE shall pay to LICENSOR *. On or before 90 days after the Effective Date, Licensee shall pay to Licensor *. Notwithstanding anything to the contrary contained in the License Agreement, the sole permitted deduction from Royalties earned shall be a deduction for bad debts incurred by the Licensee in connection with the sale of the Licensed Products. * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

3. * 4. * IN WITNESS WHEREOF, the parties agree that this Agreement shall take effect as of the date first written above. BROOKHURST, INC., a California corporation By:_______________________ William Ott, President I.C. ISAACS & CO., L.P., a Delaware limited partnership By: Isbuyco, Inc., General Partner By:_______________________ * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

Exhibit G ["Boss by Brookhurst." logo typeface]

EXHIBIT H/WWA 1. * 2. * 3. * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

4. * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2

ATTACHMENT TO EXHIBIT H From 1889 to 1997, Brookhurst and its predecessor companies manufactured and sold clothing under the Brookhurst BOSS label.

Exhibit 10.11 CBYNO September 30, 1997 FOREIGN BOSS RIGHTS ACQUISITION AGREEMENT AGREEMENT dated as of September 30, 1997, by and between *, a corporation organized and existing under the laws of Delaware ("Buyer") and I. C. Isaacs & Company L.P., a limited partnership organized and existing under the laws of Delaware ("Seller"). WITNESSETH: WHEREAS, Seller has entered into a Worldwide Rights Acquisition Agreement dated as of September 30, 1997 with Brookhurst, Inc. ("Brookhurst") and William Ott to acquire all of Brookhurst's right, title and interest in and to all "BOSS" trademarks and other proprietary interests, if any, related thereto owned by Brookhurst and used in connection with its business throughout the world together with the goodwill symbolized thereby (the "Worldwide Rights Acquisition Agreement"). WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all of Seller's right, title and interest outside of the United States of America and its territories and possessions (hereinafter, the "United States of America") in and to all "BOSS" trademarks and other proprietary interests outside of the United States of America, if any, related thereto acquired and owned by Seller and used in connection with its business outside of the United States of America, together with the goodwill symbolized by such trademarks, on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the mutual promises contained herein the parties hereby agree as follows: * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

ARTICLE I PURCHASE AND SALE 1.1 Purchase and Sale of BOSS Assets. Upon the terms and conditions herein set forth, Seller shall sell, convey, transfer, assign and deliver to Buyer on the Closing Date (as hereinafter defined), and Buyer shall purchase from Seller on the Closing Date, the following assets, properties and rights of Seller (the "Trademark Assets"), all of which, taken together, represent the business of Seller operating under the BOSS marks outside of the United States of America acquired from Brookhurst: (a) any and all right, title and interest of Seller in and to the trademarks, service marks, trade names, logos, insignias, designs, copyrights (if any), and other proprietary interests therein, containing the term "BOSS" or constituting a stylized B, outside of the United States of America, including, without limitation, all registrations and applications for registration therefor throughout the world but not including the United States of America (collectively, the "Trademarks"), and the goodwill symbolized by the Trademarks relating to their use outside the United States of America, together with all causes of action and the proceeds thereof in favor of Seller heretofore accrued with respect to the Trademarks outside of the United States of America; (b) all rights of Seller under license agreements, concurrent use agreements and other agreements listed on Schedule 1.1(b) insofar as they relate to the Trademarks being acquired by Buyer from Seller hereunder, including, without limitation, all rights of Seller under the Worldwide Rights Acquisition Agreement and the Escrow Agreement referred to therein relating to the Trademarks (the "Assumed Agreements") and all files relating thereto, it being -2-

agreed that Seller shall retain all of Seller's rights under the Worldwide Rights Acquisition Agreement and the Escrow Agreement insofar as they relate to the trademark properties retained by Seller in the United States of America. In clarification of the foregoing, the parties acknowledge and agree that Buyer shall have recourse directly against Brookhurst and Ott under the Worldwide Rights Acquisition Agreement and the Escrow Fund as defined and set forth in the Escrow Agreement for any matters involving the breach of covenants, representations, warranties or conditions set forth in the Worldwide Rights Acquisition Agreement insofar as they relate to the Trademark Assets acquired by Buyer hereunder from Seller; (c) all right, title and interest in and to all records and other information the Selling Parties (as defined in the Worldwide Rights Acquisition Agreement) or either of them have within their possession or control applicable to the products they or either of them have previously licensed under the Trademarks and all trademark files relating to the Trademark Assets. (d) any and all copyrights that Seller may own arising outside of the United States of America as a result of designs and other works created by Seller, Brookhurst, or any licensee, nominee or manufacturer of either of them, in connection with the BOSS business. 1.2 Liabilities. Buyer shall assume the obligations of Seller arising from and after Closing under the Assumed Agreements solely insofar as they relate to the use of the Trademark Assets after Closing. Buyer shall assume no liabilities or obligations, whether now existing or arising in the future, fixed or contingent, known, or unknown, relating to the use by Seller (including, without limitation, use by any of Seller's affiliates, subsidiaries, predecessors or -3-

licensees) of the Trademarks and any other matter relating to the conduct of any business relating thereto prior to the Closing ("Excluded Liabilities"). 1.3 Encumbrances. The sale and transfer of the Trademark Assets shall be free and clear of all pledges, security interests, mortgages and liens made or created by Seller ("Encumbrances"). 1.4 Exclusions. Notwithstanding any other provision of this Agreement, Seller makes no representations or warranties of any kind, and shall have no responsibility, liability or obligations whatsoever to Buyer or any affiliate thereof (including, without limitation, for any claims for indemnity), with respect to any matter relating to the Trademark Assets prior to the time Seller acquired the Trademark Assets, including, without limitation, the quality of title, the condition or use of the Trademark Assets or the conduct of the business thereunder prior to the time Seller acquired the Trademark Assets from Brookhurst except as expressly set forth in this Agreement. ARTICLE II CONSIDERATION 2.1 Consideration. In consideration of the sale and transfer of the Trademark Assets to Buyer on the Closing Date, Buyer shall assume any and all obligations of Seller under the Promissory Note in the principal amount of US $11,000,000 of Seller referred to in the Worldwide Rights Acquisition Agreement and payable to the order of Brookhurst (the "Note"). -4-

ARTICLE III THE CLOSING 3.1 Time and Place of Closing. The closing of the purchase and sale of the Trademark Assets hereunder (the "Closing") shall take place at the offices of Coudert Brothers located at 1114 Avenue of the Americas, New York, New York 10036 at 10:00 a.m. local time on a date agreed to by the parties (the "Closing Date"), which date shall not be later than eight (8) business days following the date on which the applicable waiting period, including any extension thereof, under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, relating to the transactions contemplated by the Worldwide Rights Acquisition Agreement shall have expired. 3.2 Deliveries To Be Made by the Seller. On the Closing Date, Seller shall have executed and delivered to Buyer the following: (a) executed trademark assignments in the forms attached hereto as Exhibit A; (b) an agreement of assignment and assumption of Assumed Agreements in the form annexed hereto as Exhibit B (the "Assumption Agreement"); (c) a concurrent use agreement between Seller and * in the form annexed hereto as Exhibit C (the "Concurrent Use Agreement"); (d) a foreign manufacturing rights agreement between Seller and Buyer in the form annexed as Exhibit D (the "Foreign Manufacturing Rights Agreement"); (e) an option agreement between Seller and Buyer in the form annexed as Exhibit F (the "Option Agreement"); * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -5-

(f) a secured limited recourse promissory note in the form annexed as Exhibit F (the "ICI Note"); (g) an agreement of assumption of the Note and assignment of all rights related thereto (the "Note Assumption Agreement") in the form annexed hereto as Exhibit G; and (h) such other instruments and documents as may be elsewhere herein required. 3.3 Deliveries To Be Made by Buyer. On the Closing Date, Buyer shall have executed or caused to be executed and delivered to Seller the following: (a) the Note Assumption Agreement; (b) the Assumption Agreement; (c) the Concurrent Use Agreement, duly executed by *; (d) the Foreign Manufacturing Rights Agreement; (e) the Option Agreement; (f) the ICI Note; and (g) A Guaranty by * of the Note in the form annexed hereto as Exhibit H (the "Guaranty"); (h) an Agreement regarding Consent to Release and Waiver of Brookhurst Note Claims in the form annexed hereto as Exhibit I (the "Consent Agreement"); and (i) such other instruments and documents as may be elsewhere herein required. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -6-

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER Seller makes the following representations and warranties, each of which is complete and correct on and as of the date hereof. As used in this Agreement, including, without limitation, this Article IV, the term Seller shall not be construed to include reference to Seller's predecessor-in-interest to the Trademark Assets, namely Brookhurst. 4.1 Organization and Good Standing of the Seller. Seller is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware. 4.2 Authority; Execution. Seller has all the requisite power and authority, corporate and otherwise, to execute, deliver and perform its obligations under this Agreement. The execution and delivery of this Agreement, and each of the other instruments of transfer, conveyance and assignment delivered hereunder, have been duly and validly authorized by all necessary corporate and other action on the part of Seller, and this Agreement and each of such other instruments has been duly executed by Seller. This Agreement constitutes the valid and binding agreement of Seller enforceable against Seller in accordance with its respective terms. 4.3 Breach of Statute or Contract. (a) The execution, delivery and performance of this Agreement by Seller and the consummation of the transactions contemplated hereby will not: (i) violate or conflict with any provision of the charter documents or by-laws of Seller; (ii) violate or conflict with, result in the breach or termination of or otherwise give any other contracting party the right to terminate, or constitute a default (or an event which, with the lapse of time, or the giving of notice, or both, will constitute a default) under, any contract or other instrument to which Seller is a party -7-

and which relate to the Trademark Assets or by which Seller is bound, or result in the creation of any Encumbrance upon any of the Trademark Assets pursuant to the terms of any such contract or instrument, or (iii) violate or conflict with any judgment, order, writ, injunction or decree of any court or governmental body of any jurisdiction applicable to Seller (excluding any judgments, orders, writs, injunctions or decrees in any actions or proceedings involving * or its affiliates) or, to the knowledge of Seller, any law or regulation materially adversely affecting Buyer's ability to exploit the Trademark Assets. (b) Except as set forth on Schedule 4.3(b), there are no notices, licenses, consents, permissions or approvals of any nature whatsoever which are required to be obtained by Seller from any Federal, state or local governmental or regulatory body or other third party or, to Seller's knowledge, from any foreign governmental or regulatory body for the consummation of the transactions contemplated by this Agreement, or as a condition to the sale, assignment and transfer of the Trademark Assets to be effected hereunder. 4.4 No Claims or Litigation. Except as set forth on Schedule 4.4(a), no litigation, judicial or arbitral action, claim asserted in writing and received by Seller within the preceding two years or, to the knowledge of Seller, administrative or regulatory proceeding or adversarial proceeding in any trademark office, or governmental investigation involving the Trademark Assets or the transactions contemplated by this Agreement, including, without limitation, any claim of conflict with or violation of any proprietary or other right (collectively, "Litigation") is pending or, to the knowledge of Seller, threatened against Seller. For purposes of the foregoing, "Litigation" shall not be deemed to include any actions, proceedings or claims involving * or its affiliates. Except as set forth on Schedule 4.4(b), there is no * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -8-

judgment, order, injunction, decree or award outstanding (whether rendered by a court, tribunal, administrative agency or arbitral tribunal and excluding any judgments, orders, injunctions, decrees or awards in any actions or proceedings involving * or its affiliates), against Seller or referencing Seller by name or, to Seller's knowledge, by which Seller is bound which affects the Trademark Assets or the use of the Trademark Assets in any way. 4.5 Trademarks. Except as set forth in Schedule 4.5.A, Seller is not currently licensing any person to use or operate under any of the Trademarks. True and complete copies and, if not available, descriptions of all such licenses, including all amendments or modifications, have heretofore been delivered to Buyer. Except as set forth in Schedule 4.5.B, and except for customary sell-off rights granted to alleged infringers, Seller has not affirmatively agreed or consented to the non-use by Seller, or use by any third party, of any mark containing the word BOSS. To Seller's knowledge (such knowledge being based solely on Seller's actual knowledge), the countries in which Seller currently manufactures products bearing the Trademarks are: Hong Kong, Indonesia, Macao, Mexico, People's Republic of China, Phillipines, Republic of South Korea, Taiwan and Thailand. Seller has paid, or will pay within a reasonable period of time, in full (or otherwise to the satisfaction of the invoicing party) all outstanding invoices of domestic and foreign trademark counsel for work done and disbursements incurred on behalf of Seller (whether or not billed on or by the date hereof). 4.6 No Alienation of Rights By Seller. Except as set forth in the Assumed Agreements or any other documents identified on Schedule 4.5.A or B or Schedule 4.6, Seller has not transferred, assigned, licensed (which license is currently outstanding) or otherwise encumbered with Encumbrances any of its rights in any Trademark Asset. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -9-

4.7 Ownership Trademark Assets. As between Seller and all affiliates and other persons or entities who have an ownership interest in Seller (or any affiliate thereof) or who may have been expressly authorized by Seller to use the Trademark Assets, Seller owns all rights in and to the Trademark Assets (as defined in the Worldwide Rights Acquisition Agreement and as acquired from Brookhurst under said agreement). 4.8 Knowledge. Whenever a statement regarding the existence or absence of facts in this Agreement is qualified by a phrase such as to Seller's knowledge or words to similar effect, it is intended by the parties that the information attributed to Seller be actually known, or information which should have been known based on reasonable inquiry by the Chairman and Co-Chief Executive Officer, President and Co-Chief Executive Officer or Chief Financial Officer of Seller. 4.9 Materiality. The phrase "materially adversely affecting Buyer's ability to exploit the Trademark Assets" or words of similar effect, shall be deemed to mean (i) the existence or occurrence at any time from and after the date hereof of any actual harm, or the existence of any reasonably anticipated actual harm, to Buyer's ability to exploit the Trademark Assets or (ii) either (x) the failure of Seller to remedy the breach in question assuming the breach is remediable or (y) the inability of Seller to remedy the breach in question without prejudice to Buyer's ability to exploit the Trademark Assets. For purposes of this Section 4.10, no "actual -10-

harm" shall be deemed to exist as to any of the first three claims of harm unless any such claim of harm reasonably involves at least the following amounts in damage or loss:
First Claim Second Claim Third Claim * * *

it being agreed that, without prejudice to, or limitation of, Seller's ability to claim that any subsequent claim involves no "actual harm", no such monetary threshold applies to any subsequent claims. ARTICLE V REPRESENTATIONS AND WARRNTIES OF BUYER Buyer hereby makes the following representations and warranties each of which is complete and correct on and as of the date hereof: 5.1 Organization and Good Standing of Buyer. Buyer is a corporation duly organized and validly existing under the laws of Delaware. Buyer is a wholly-owned direct subsidiary of *, a corporation organized and existing under the laws of *. 5.2 Authority; Execution. Buyer has all requisite power and authority, corporate and otherwise, to execute, deliver and perform its obligations under this Agreement. The execution and delivery of this Agreement, and each of the other instruments of transfer, conveyance and assignment delivered hereunder, by Buyer have been duly and validly authorized by all necessary corporate and other action on the part of Buyer, and this Agreement and each of such other * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -11-

instruments has been duly executed by Buyer, as applicable. This Agreement constitutes the valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms. 5.3 Breach of Statute or Contract. (a) The execution, delivery and performance of this Agreement by Buyer and the consummation of the transactions contemplated hereby will not: (i) violate or conflict with any provision of the Certificate of Incorporation or by-laws of Buyer; (ii) violate or conflict with, result in the breach or termination of or otherwise give any other contracting party the right to terminate, or constitute a default (or an event which, with the lapse of time, or the giving of notice, or both, will constitute a default) under, any contract or other instrument to which Buyer is a party; or (iii) violate or conflict with any judgment, order, writ, injunction or decree of any court or governmental body of any jurisdiction applicable to Buyer (excluding any judgments, orders, injunctions, decrees or awards in any actions or proceedings involving Seller or its affiliates) or, to the knowledge of Buyer, any law or regulation materially adversely affecting Buyer's ability to consummate the transaction contemplated by this Agreement. (b) Except as provided in Schedule 5.3(b), there are no notices, licenses, consents, permissions or approvals of any nature whatsoever which are required to be obtained by Buyer from any Federal, state or local governmental or regulatory body or other third party or, to Buyer's knowledge, from any foreign governmental or regulatory body for the consummation of the transactions contemplated by this Agreement, or as a condition to the sale, assignment and transfer of the Trademark Assets to be effected hereunder. -12

ARTICLE VI COVENANTS 6.1 Further Assurances. (a) From time to time until the expiration of * from the Closing Date, upon the request and at the expense of Buyer but without further consideration, Seller shall: (i) do, execute, acknowledge, deliver and file, or shall cause to be done, executed, acknowledged, delivered and filed, all such further acts, deeds, transfers, conveyances, assignments or assurances (including, without limitation, for purposes of transferring record ownership of the Trademark Assets to Buyer) as may be reasonably requested by Buyer for transferring, conveying, assigning and reducing to Buyer's possession, ownership and use of the Trademark Assets, including, without limitation, executing on the Closing Date any assignments of Trademarks in recordable form requested by Buyer; and (ii) deliver to Buyer such other records, documentation and information in Seller's possession or control as may be reasonably requested by Buyer to assist Buyer in the use and protection of the Trademark Assets. (b) Seller shall keep and preserve any and all invoices, letters of credit, bills of lading, and purchase orders which relate to the Trademark Assets for * from and after the Closing Date, except as otherwise provided herein. Seller may dispose or destroy any such records, documentation and information at any time, provided that Seller first shall notify Buyer so that Buyer may, at its expense and within a reasonable time after receipt of such notice, obtain from Seller any or all of said records, documentation and information. Seller * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -13-

shall not be responsible for (i) destruction of records caused by an Act of God or other "Force Majeure" event, or (ii) any immaterial non-intentional destruction of records. 6.2 Mail and Communications. From and after the Closing Date, Seller shall promptly remit or refer to Buyer any mail or other communications, including, without limitation, any written inquiries, relating solely to the Trademark Assets, and copies of any such mail or communications which relate to the Trademark Assets and other matters, which are received by Seller from and after the Closing for a period of * from the date hereof. ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND SELLER 7.1 Conditions Precedent to Obligations of Buyer. The obligation of Buyer to consummate the transactions contemplated under this Agreement is subject to the fulfillment, as of the Closing Date, of each of the following conditions (any or all of which may be waived by Buyer): (a) the representations and warranties of Seller set forth in Article IV hereof shall be true and correct in all material respects as of the Closing Date; (b) Seller shall have performed and complied in all material respects with all covenants, obligations and undertakings required by this Agreement to be performed or complied with on or prior to the Closing Date: (c) Buyer shall have been furnished with a certificate, dated the Closing Date and executed by an officer of Seller, certifying to the fulfillment of the conditions specified in Sections 7.1(a) and (b); -14* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

* (h) the closing under the Worldwide Rights Acquisition Agreement shall have been completed; (i) Seller and all other parties thereto shall have executed and delivered the Foreign Manufacturing Rights Agreement; * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -15-

(j) Seller shall have delivered to Buyer possession of (i) an original of each of Seller's Trademark registrations currently in effect; (ii) an original of any other registrations for the Trademarks to the extent in Seller's possession, custody or control; and (iii) Seller's original trademark application and registration files relating to the Trademarks including, for example, letters or other materials from each of Seller's domestic and foreign trademark counsel showing deadlines for trademark office actions to the extent in Seller's possession, custody or control; provided, however, if any of such items apply to both the Trademark Assets and the trademark properties retained by Seller with respect to its BOSS business in the United States of America, then such information may be provided to Buyer by photocopy rather than original; (k) Seller and all other parties thereto shall have executed and delivered the Concurrent Use Agreement; (l) Brookhurst and William Ott shall have consented to the assignment and assumption by Buyer of all rights and obligations of Seller under the Note and of all rights and obligations of Seller under the Worldwide Rights Acquisition Agreement (except all "intent-to-use" trademark applications) and Escrow Agreement relating to the Trademark Assets; (m) Buyer and Seller shall have entered into a license agreement, consistent with the terms of Exhibit C, providing for an exclusive royalty-free license to Buyer of the right to use the Trademarks which are the subject of intent-to-use applications in the U.S. Patent & Trademark Office ("PTO") which were acquired by Seller from Brookhurst, on the products referred to in said applications, together with the right to have such trademarks transferred to Buyer upon such marks becoming registered with the PTO, and on such other terms as shall be mutually agreed by the parties (the "BOSS GOLF et al. License Agreement"); and -16-

(n) * and Isaacs shall have executed and delivered the Indemnification Agreement in the form annexed hereto as Exhibit L. 7.2 Conditions Precedent to Obligations of Seller. The obligations of Seller to consummate the transactions contemplated under this Agreement are subject to the fulfillment, as of the Closing Date, of each of the following conditions (any or all of which may be waived by Seller): (a) the representations and warranties of Buyer set forth in Article V shall be true and correct in all material respects as of the Closing Date; (b) Buyer shall have performed and complied in all material respects with all obligations and undertakings required by this Agreement to be performed or complied with by Buyer on or prior to the Closing Date; (c) Seller shall have been furnished with a certificate, dated the Closing Date and executed by an officer of Buyer certifying to the fulfillment of the conditions specified in Sections 7.2(a) and (b); * (g) no judgment, order or decree shall have been rendered which has the effect of enjoining the consummation of the transactions contemplated by this Agreement; (h) the closing under the Worldwide Rights Acquisition Agreement shall have been completed; * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -17-

(i) Buyer and all other parties thereto shall have executed and delivered the Foreign Manufacturing Rights Agreement; (j) * and all other parties thereto shall have executed and delivered the Concurrent Use Agreement; and (k) Brookhurst and William Ott shall have consented to the assignment and assumption by Buyer of all rights and obligations of Seller under the Note and of all rights and obligations of Seller under the Worldwide Rights Acquisition Agreement (except all "intent-to-use" trademark applications) and Escrow Agreement relating to the Trademark Assets and Brookhurst and William Ott shall have fully and unconditionally released Seller from such obligations in the form attached hereto as Exhibit K; (l) the BOSS GOLF et al License Agreement shall have been entered by all Parties thereto; and (m) * and Isaacs shall have executed and delivered the Indemnification Agreement in the form annexed hereto as Exhibit L. ARTICLE VIII SURVIVAL OF REPRESENTATIONS AND WARRANTIES INDEMNIFICATION 8.1 All representations and warranties contained in or made pursuant to this Agreement * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -18-

** * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -19-

8.3 * 8.4 Notification of Claims. In the event of the occurrence of any event which any party asserts constitutes a Buyer Indemnity Claim or Seller Indemnity Claim, as applicable, the * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -20-

indemnified party shall provide the indemnifying party with prompt notice of such event, including, without limitation, any facts and circumstances which give rise to such claim, and shall otherwise make available to the indemnifying party all relevant information which is material to the claim and which is in the possession of the indemnified party. If such event involves the claim of any third party (a "Third-Party Claim"), the indemnifying party shall have the right to elect to join in the defense, settlement, adjustment or compromise of any such Third-Party Claim, and to employ counsel to assist such indemnifying party in connection with the handling of such claim, at the sole expense of the indemnifying party, and no such claim shall be settled, adjusted or compromised, or the defense thereof terminated, without the prior consent of the indemnifying party unless and until the indemnifying party shall have failed, after the lapse of a reasonable period of time, but in no event more than 30 days after written notice to it of the Third-Party Claim, to join in the defense, settlement, adjustment or compromise of the same. An indemnified party's failure within a reasonable time to give notice or to furnish the indemnifying party with any relevant data and documents in its possession in connection with any Third-Party Claim shall not constitute a defense (in part or in whole) to any claim for indemnification by such party, except and only to the extent that such failure shall result in any material prejudice to the indemnifying party. If so desired by any indemnifying party, such party may elect, at such party's sole expense, to assume control of the defense, settlement, adjustment or compromise of any Third-Party Claim, insofar as the claim relates to the liability of the indemnifying party, provided that such indemnifying party shall obtain the consent of all indemnified parties before entering into any settlement, adjustment and compromise of such claim, or ceasing to defend against such claim, if as a result thereof, or pursuant thereto, there -21-

would be imposed on an indemnified party any liability or obligation not covered by the indemnification obligations of the indemnifying party under this Agreement (including, without limitation, any injunctive relief or other remedy). 8.5 * ARTICLE IX GENERAL 9.1 Waiver. Any failure of Buyer, on the one hand, or the Seller, on the other, to comply with any of the obligations or agreements set forth in this Agreement or to fulfill any condition set forth in this Agreement may be waived only by written instrument signed by the other party. No failure by any party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver of such right, nor shall any single or partial exercise of any right hereunder by any party preclude any other or future exercise of that right or any other right hereunder by that party. 9.2 Notices. All notices, requests or other communications required or permitted hereunder (excluding, however, mail and/or communications covered under paragraph 6.2 hereof) shall be given or made in writing and shall be (i) delivered personally (including * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -22-

commercial carrier), (ii) sent by registered or certified airmail, return receipt requested, postage prepaid or (iii) sent by telecopier, addressed to the party to whom they are directed at the following addresses, or at such other address as may from time to time be designated by such party to the others in accordance with this Section 9.2: If to Seller, to: I. C. Isaacs & Company L.P. 3840 Bank Street Baltimore, Maryland 21224 Attention: President and Co-Chief Executive Officer Telecopier: 410/558-2096 I. C. Isaacs & Company L.P. 350 Fifth Avenue Suite 1029 New York, New York 10118 Attention: Chairman and Co-Chief Executive Officer Telecopier: 212/695-7579 With a copy to: Piper & Marbury L.L.P. Charles Center South 36 South Charles Street Baltimore, Maryland 21201-3010 Attention: Robert J. Mathias, Esq. Telecopier: 410/576-1604 If to Buyer, to: * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -23-

With a copy to: Coudert Brothers 1627 I Street, N.W. Washington, D.C. 20006 Attention: Wendy L. Addiss, Esq. Telecopier: 202/775-1168 and Howrey & Simon 1299 Pennsylvania Avenue, N.W. Washington, D.C. 20004 Attention: Robert M. Bruskin, Esq. Telecopier: 202/383-6610 If to *, to: * With a copy to: Coudert Brothers (as specified above) and Howrey & Simon (as specified above) Any notice, request or other communications shall be deemed to have been given and to be effective upon receipt or refusal by the addressee. Any party may change its address for notices hereunder, effective upon giving of notice of such change hereunder to the other parties. 9.3 No Third Party Beneficiaries. Neither this Agreement nor any provision hereof, nor any document or instrument executed or delivered pursuant hereto, shall be deemed to create * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -24-

any right in favor of or impose any obligation upon any person or entity other than Buyer and Seller and their respective successors and assigns. 9.4 * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -25-

9.5 Captions and Paragraph Headings. Captions and paragraph headings used in this Agreement are for convenience only and are not a part of this Agreement and shall not be used in interpreting or construing it. 9.6 Entire Agreement. The making, execution and delivery of this Agreement by the parties has been induced by no representations, statements, warranties or agreements other than those herein expressed. This Agreement embodies the entire understanding of the parties with respect to the subject matter hereof. Notwithstanding the foregoing, the parties acknowledge that a number of different agreements and instruments of which the parties are signatory are all being executed simultaneously, as of the Closing Date, with this Agreement. The parties acknowledge that this Agreement or instrument is to be interpreted and enforced separately and independently of any other such agreement or instrument, and the breach of any such agreement by a party shall not affect the rights of such party under this Agreement. This Agreement may be amended or modified only by an instrument of equal formality signed by the parties or their duly authorized representatives. The parties have made no representations or warranties not expressly set forth in this Agreement. This Agreement supersedes and terminates all prior discussions, negotiations, understandings, arrangements and agreements among the parties relating to the subject matter hereof, except as expressly set forth herein. 9.7 Counterparts. This Agreement may be executed in any number of duplicate counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. 9.8 Assignability. No party hereto may assign any of its interests, rights or obligations under this Agreement without the prior written consent of the other parties. Notwithstanding -26-

the foregoing, Buyer may assign its rights, but not its obligations, under this Agreement to any entity under common control with Buyer or to any successor in interest to Trademark Assets without the consent of Seller. Any impermissible attempted assignment of this Agreement without such prior written consent shall be void as to the other parties to this Agreement. Notwithstanding anything to the contrary set forth in this Agreement, Seller shall be permitted to assign and transfer Seller's rights under this Agreement to any parent, subsidiary or other affiliate of Seller if Seller or its successor in interest remains fully liable for the performance of this Agreement by such assignee or transferee and indemnifies Buyer with respect to any costs and damages Buyer may incur because of such assignment or transfer. 9.9 Expenses. The parties shall each bear their own expenses in connection with the negotiation, execution and delivery of this Agreement and the performance of their respective obligations hereunder. 9.10 Successors and Assigns. This Agreement and the provisions thereof shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties hereto. 9.11 Governing Law. The validity, construction, operation and effect of any and all of the terms and provisions of this Agreement shall be determined and enforced in accordance with the laws of * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -27-

* 9.12 * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -28-

* 9.13 * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -29-

IN WITNESS WHEREOF, the parties have duly signed this Agreement the day and year first written above. I. C. ISAACS & COMPANY L.P., a Delaware limited partnership
By: /s/ Robert J. Arnot ---------------------------------Name: Robert J. Arnot Title: Chairman and Co-Chief Executive Officer /s/ Gerald W. Lear ----------------------------------Name: Gerald W. Lear Title: President and Co-Chief Executive Officer

By:

*
By: /s/ * -----------------------------------Name: Title:

* hereby irrevocably and unconditionally guarantees to Seller the full and timely performance of Buyer's obligations to Seller under this Agreement. * covenants and agrees to indemnify and save harmless Seller from and against any damage, liability and expense resulting from Buyer's breach of this Agreement. *
By: /s/ * --------------------------------------Name: Title:

* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -30-

FOREIGN BOSS RIGHTS ACQUISITION AGREEMENT EXHIBITS
Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Exhibit F Exhibit G Exhibit H Exhibit I Exhibit J Exhibit K Exhibit L Trademark Assignments Assumption Agreement Concurrent Use Agreement Foreign Manufacturing Rights Agreement Option Agreement The ICI Note Note Assumption Agreement * Guaranty Consent Agreement Certain Provisions in Settlement Agreement Form of Release *

* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -31-

FOREIGN SCHEDULE 1.1(b) ASSUMED AGREEMENTS For all of the following agreements to the extent they apply outside the U.S.: * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

FOREIGN SCHEDULE 4.3(b) THIRD PARTY CONSENTS AND WAIVERS Hart-Scott-Rodino approval. Approval from secured lender, Congress Financial Corporation.

FOREIGN SCHEDULE 4.4(a) LITIGATION * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

FOREIGN SCHEDULE 4.4(a) * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

FOREIGN SCHEDULE 4.4(b) JUDGMENTS AND ORDERS * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

FOREIGN SCHEDULE 4.5.A CURRENT BOSS LICENSES * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

FOREIGN SCHEDULE 4.5.B AGREEMENTS RE USE OF TRADEMARK * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

FOREIGN SCHEDULE 4.5.B * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2

SCHEDULE 4.6 ALIENATION OF RIGHTS NONE FOREIGN SCHEDULE 5.3(B) THIRD PARTY CONSENTS NONE

EXHIBIT A/FRA TRADEMARK ASSIGNMENT This Assignment is effective as of the ____ day of __________________, 1997, by and between I.C. Isaacs, L.P., a Delaware Limited Partnership with its principal place of business at 3840 Bank Street Baltimore, Maryland 21224 ("Assignor") and *, a Delaware corporation with its principal place of business at 1209 Orange Street, Wilmington, Delaware 19801 and ("Assignee"). W I T N E S S E T H: WHEREAS, Assignor is the owner of certain trademarks outside of the United States of America except Mexico constituting or containing the word BOSS and the Stylized B, including common law rights and rights in trademark registrations and applications for registration outside the United States of America except Mexico listed on the "Schedule of Trademarks" attached hereto, together with the good will of the business outside the United States of America except Mexico associated therewith (the "Trademarks"); WHEREAS Assignee desires to acquire all right, title and interest of Assignor in and to the Trademarks; NOW, THEREFORE, to All Whom It May Concern, be it known that for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Assignor does hereby sell, assign, transfer and set over, to Assignee, its successors and assigns forever, its entire right, title and interest in and to the Trademarks, the same to be held and enjoyed by Assignee for its own use and enjoyment, and for the use and enjoyment of its successors, assigns or other legal representatives forever, as fully and entirely as the same would have been held and enjoyed by Assignor had the assignment and sale set forth herein not been made. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

IN TESTIMONY WHEREOF, Assignor has caused these presents to be signed by its officer thereunto duly authorized, and its corporate seal to be hereto affixed. I.C. ISAACS, L.P. By:__________________________ Name: Title: COUNTY OF NEW YORK : :ss: STATE OF NEW YORK : On this ____ day of _____________, 1997, before me personally appeared ________________, to me personally known, who, being duty sworn, did say that he is _________________ of ____________________, a Delaware Limited Partnership, and that the foregoing instrument was signed and sealed on behalf of the corporation by authority of its _____________________________, and that he acknowledges such instrument to be the free deed and act of said corporation for the purposes therein set forth and intending that this instrument be recorded.

Notary Public -2-

SCHEDULE OF TRADEMARKS I.C. Isaacs & Co., L.P.'s BOSS Non-U.S. Trademark Applications/Registrations* * * Prior to Closing, the Acquisition Agreement shall not be deemed to be breached by inclusion of incorrect information relating to the Classification and Status in this Schedule. Said information shall be reviewed, corrected if necessary, updated and confirmed by Seller prior to Closing. ** For ease of reference the description of goods in this chart is generalized. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

EXHIBIT B/FRA ASSIGNMENT AND ASSUMPTION AGREEMENT THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is made and entered into this ____ day of September, 1997, by and between I.C. Isaacs & Company L.P., a Delaware limited partnership ("Isaacs") and *, a Delaware corporation *. W I T N E S S E T H: WHEREAS, Isaacs has agreed to sell, transfer and assign to *, and * has agreed to purchase and accept from Isaacs certain assets of Isaacs pursuant to a Foreign Boss Rights Acquisition Agreement entered into on September __,1997 between Isaacs and * (the "Acquisition Agreement"); WHEREAS. * has agreed to assume certain obligations of Isaacs related to said acquired assets; NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows: 1. Capitalized terms used herein and not defined herein shall have the meanings given such terms in the Acquisition Agreement. 2. Isaacs hereby assigns to * all its rights under the agreements identified on the schedule attached hereto constituting the Assumed Agreements insofar as they relate to the Trademarks acquired by * from Isaacs pursuant to the Acquisition Agreement, and all files relating thereto, free and clear of all Encumbrances. 3. * hereby assumes all obligations of Isaacs arising from and after the date hereof under the Assumed Agreements solely insofar as they relate to the use of the Trademark Assets after Closing. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

IN WITNESS WHEREOF, the parties have hereunto set their hands and seals the day, month and year first above written. I.C. ISAACS & COMPANY L.P., a Delaware limited partnership By ____________________________ Name: Robert J. Arnot Title: Chairman and Co-Chief Executive Officer By: ____________________________ Name: Gerald W. Lear Title: President and Co-Chief Executive Officer * By: __________________________ Name: __________________ Title: ___________________ * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. -2-

SCHEDULE See Schedule 1.1(b)

Exhibit C to 10.11 CONCURRENT USE AGREEMENT THIS CONCURRENT USE AGREEMENT ("Agreement") is effective as of the ___ day of ______________, 1997 ("Effective Date"), by and between *, a corporation of *, and I. C. Isaacs & Company L.P. ("ISAACS"), a Delaware Limited Partnership. RECITALS A. * is the owner of various trademarks including the word "BOSS" throughout the world and in the United States (* Marks"). * and its predecessors in interest have used for many years the mark BOSS and * Marks and have developed certain intellectual property rights in connection therewith. B. ISAACS, as the successor in interest of Brookhurst, Inc., is the owner of certain United States trademark rights in and registrations of the word BOSS. ISAACS and its predecessors in interest have used for many years the mark BOSS on certain products in the United States and have developed certain intellectual property rights in connection therewith. C. The parties intend that consistent with the terms of this Agreement, ISAACS will be able to market Isaacs' Trademark Products (as defined below) contemplated by this Agreement without causing confusion in the marketplace with the * and related brands marketed by * ("* Trademark Products"), and that * will be able to continue to market * Trademark Products without causing confusion in the marketplace with the BOSS and related brands marketed by ISAACS. NOW, THEREFORE, in consideration of the mutual agreements set forth in this Agreement, the parties agree as follows: 1. DEFINITIONS For purposes of this Agreement, the following terms shall have the meanings set forth below: a. "Isaacs' Mark" or "Isaacs' Marks" shall mean the trademarks BOSS in the Microgramma Typestyle and the stylized B (as set forth on Exhibit A attached hereto) whether used alone or in combination with other words or symbols, with the appearance and/or style of the said trademark in compliance with the provisions of Exhibit A. b. "Isaacs' Trademark Product" or "Isaacs' Trademark Products" shall mean solely the products listed in Exhibit B, Section I, as modified by Section II, bearing Isaacs' Marks in compliance with Exhibit A and sold pursuant to the schedule in Exhibit C. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

c. "United States" mean the United States of America, its territories, possessions and commonwealths, except Saipan and American Samoa. "United States" includes, without limitations, Puerto Rico. 2. CONCURRENT USE AGREEMENT a. Unless otherwise agreed to by the parties in writing, ISAACS agrees to use Isaacs' Trademark Products solely in accordance with Exhibits A, B and C. The parties recognize, however, that the marketplace is an ever changing environment and that it is not possible to predict the future trends. Accordingly, to ensure that there is no substantial likelihood of confusion between the marks of the parties, the parties agree that * shall, solely at its discretion, have the right commencing on January 1, 2008 to evaluate whether the type style and appearance of Isaacs' Marks remains unlikely to cause confusion with the * Marks and may, in its sole discretion, cause Isaacs to alter, change, amend or revise the typestyle and appearance of Isaacs' Marks. b. Unless otherwise agreed to by the parties in writing, ISAACS agrees that it shall not use the Isaacs' Marks in connection with the advertisement, promotion, distribution or sale of any products other than Isaacs' Trademark Products. c. Unless otherwise agreed to by the parties in writing, ISAACS agrees that it will not distribute or sell any Isaacs' Trademark Products bearing the Isaacs' Marks to athletic stores whose primary product line is composed of products intended to be used in connection with golf, tennis, skiing, sailing, windsurfing, motor sports or any combination thereof or at golf, tennis, skiing, sailing, windsurfing, or motor sports athletic events, without the prior written consent of *. The foregoing shall not prevent ISAACS from selling Isaacs' Trademark Products to general sporting goods stores selling multiple lines of products for a variety of sports (e.g., *). d. With respect to the limitations on the use of the Isaacs' Marks on Isaacs' Trademark Products described in Exhibit A, ISAACS shall begin to phase some of the limitations into its product line beginning with products produced by or for ISAACS after January 1, 1998. Thereafter, * percent * of the products bearing Isaacs' Marks produced by or for ISAACS during the period August 1, 1998 through December 31, 1998 (as measured by the number of styles) must comply therewith. ISAACS agrees to use its reasonable efforts to ensure that * percent * of its projected volume of such goods comply with the limitations described in Exhibit A. ISAACS shall be in full compliance with Exhibit A for all products bearing a BOSS mark produced on or after December 31, 1998 and for that season and thereafter may not manufacture or produce any products bearing a BOSS mark which are not in full compliance with Exhibit A. e. On those products listed on Exhibit C, * agrees to use the word BOSS, whether used alone or in combination with other words, phrases or designs on such * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2

products solely in accordance with the price points contained in Exhibit C; provided, however, that such Exhibit C shall not apply to such products used or distributed by * or its licensees for promotional purposes. f. * agrees that without ISAACS' written consent, which consent may be withheld in ISAACS' sole discretion, * shall not license any nonaffiliated third party to use * Marks alone in connection with the sale of the sportswear products listed in Exhibit C at or below ISAACS' maximum wholesale prices listed therein. g. Nothing herein is intended to or shall prevent or otherwise restrict * from designing, manufacturing, advertising, promoting, distributing or selling or licensing others to design, manufacture, distribute, advertise, promote or sell in the United States any product, whether or not bearing a mark including the word BOSS, listed in and consistent with Exhibit C, or any other product not listed in Exhibit C, provided that such products do not use the Microgramma typestyle shown in Exhibit A. h. Neither * nor ISAACS shall use on or in connection with apparel bearing the word "BOSS" sold in the United States, any apparel style, design, pattern, art work or color which are or have been primarily associated with products distributed by the other (or any licensee of the other) except those which are traditional or standard in the industry. i. Notwithstanding any other provision of this Agreement, Isaacs may, during 1998, use the Isaacs' Marks on the following goods so long as such goods are not intended to be sold to the public and are intended to be used solely in connection with and for the promotion of Isaacs' Trademark Products: compact discs, videos, stickers, stick-on-tattoos, photographs and posters, whistles, notebooks, lanyards, non-leather I.D. tags, basketballs, cassette tapes, sweatbands and visors; provided further that ISAACS shall not contest in any way the manufacturing, distributing or selling by * or its licensees of any of the above items with * Marks. Each year thereafter ISAACS shall submit for approval a list of goods it intends to use (subject to the terms and conditions of this Section 2.i.) for promotional purposes. * shall consider the request in good faith and advise ISAACS within ten (10) business days of receipt of such list which of the goods *, in the exercise of its sole discretion, approves; provided however, that notwithstanding the provision of Section 12.d., ISAACS may seek arbitration solely as to whether * has acted in good faith in considering ISAACS' request. Absent such approval, ISAACS shall not use Isaacs' Marks on such goods. j. Each party acknowledges the other party's legal and beneficial ownership interests in and to its respective trademarks referred to herein and undertakes that it will not take any action which may in any way impair the other party's rights in its marks, including, without limitation, by challenging or opposing, or raising or allowing to be raised, on any grounds whatsoever, any questions concerning or obligations to the validity of the other party's trademarks. 3 * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

3. GEOGRAPHIC SCOPE OF AGREEMENT a. ISAACS acknowledges that * owns extensive trademark rights relating to the word BOSS both within and outside of the United States. ISAACS does not and shall not own, or purport to own, any trademark rights relating to the word BOSS outside of the United States. b. ISAACS agrees that it will not sell or offer for sale or resale Isaacs Trademark Products anywhere in the world other than in the United States. ISAACS shall not sell or cause to be sold, directly or indirectly, any Isaacs' Trademark Products to any party which ISAACS knows, or has reason to know, has resold or distributed, is reselling or distributing, or is likely to resell or distribute such Isaacs' Trademark Products (i) outside of the United States; or (ii) as duty free merchandise. Within thirty (30) days after the Effective Date of this Agreement and thereafter from time to time as is reasonable, ISAACS shall advise each of its customers (other than consumers or other end users) in writing of the restrictions on such sales. c. The parties agree that ISAACS may sell Isaacs' Trademark Products to the United States military solely for resale on United States military installations in the United States. In making such sales, ISAACS shall seek to obtain agreement from ISAACS' United States military customers that Isaacs' Trademark Products will not be sold in United States military installations outside the United States ("Military Agreement"). (i) If ISAACS is unable to obtain a Military Agreement with any military customer, or if the obtaining of any such Military Agreement substantially adversely affects ISAACS' ability to make military sales in the United States, then ISAACS shall promptly notify *. Any such notice by ISAACS shall include a written explanation and documentation of all efforts by ISAACS to obtain such agreement and shall include (1) data disclosing ISAACS' sales of Isaacs' Trademark Products to the military customer(s) at issue during the immediate prior 12-month period, (2) projected sales of Isaacs' Trademark Products over the next 12-month period, (3) the basis for ISAACS' belief that obtaining such an agreement will substantially adversely affect ISAACS' military sales, and (4) all information known or reasonably available to ISAACS about sales of Isaacs' Trademark Products by the military customer(s) at U.S. military installations outside the United States. (ii) Upon receipt of such notice and at * request, the parties shall meet and confer within five (5) business days, to agree upon any further steps to be taken by ISAACS to obtain the Military Agreement. Thereafter, absent an agreement between the parties on this issue, or in the event such steps as may be agreed upon do not result in a Military Agreement and ISAACS does not agree to discontinue sales of Isaacs' Trademark Products to any such military customer, * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 4

* 4. ADVERTISING AND PROMOTION * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 5

* 5 PREVENTION OF CONFUSION a. The parties agree that adherence by both parties to the terms of this Agreement will avoid confusion between their respective products. b. The parties agree that nothing in this Agreement shall require either party to do business with any third party wholesaler or retailer. The parties further agree that each * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 6

party shall have the right at its sole discretion to take all steps necessary to prevent its products from being offered for sale to the public in proximity to the products of the other party or one of its licensees. c. Except as otherwise provided herein, the parties agree that each shall have no right to require the other to make any change in the rights or obligations set forth in this Agreement. The parties further agree that they will institute no legal action against each other based solely upon conduct which is expressly permitted by and in accordance with this Agreement. 6. USE AND DISPLAY OF THE MARKS ISAACS agrees to use, in connection with the Isaacs' Trademark Products only, labels, tags, signs, banners, stationery, order forms, business cards and other forms of identification for such products which are consistent with the terms of Exhibit A and Exhibit D. ISAACS agrees that it shall not use the name BOSS in any corporate, partnership or other trade name or as a form of entity identification. ISAACS shall not use the word BOSS or authorize any third party to use the word BOSS in connection with the name of any store or retail establishment; provided that nothing in this Section 6 shall be construed as prohibiting use of the Isaacs' Marks in shop-within-a-shop situations. ISAACS may continue its factory outlet operations in proximity to its distribution facilities which are currently located in Milford, Delaware; provided, however, that the word BOSS shall not be used in or as part of the name of the store. ISAACS agrees to provide * with written notice of any change in the location of such factory outlet. To the extent ISAACS uses and/or provides design layouts and/or fixtures for use in stores or retail establishments, it shall not use design layouts and/or fixtures which are or have been primarily associated with products distributed by * or its licensees, except those which are traditional or standard in the industry. 7. NONTRANSFERABILITY OF RIGHTS a. ISAACS shall not grant, assign or otherwise convey or transfer any rights inuring to ISAACS or any obligations or duties owed by ISAACS to * under this Agreement, without the prior written consent of * and any attempted transfer or assignment shall be null and void. * shall consider in good faith any request for such consent and promptly notify ISAACS of * decision, said decision to be in * sole discretion. Nothing in this Section 7 is intended to prevent ISAACS from offering and selling stock to the public. b. Notwithstanding anything to the contrary set forth in this Agreement, ISAACS shall be permitted to assign and transfer ISAACS' rights under this Agreement to any parent, subsidiary or other affiliate of ISAACS if ISAACS or its successor in interest remains fully liable for the performance of this Agreement by such Assignee or Transferee and indemnifies 7 * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

* with respect to any costs and damages * may incur because of such assignment or transfer. c. * shall provide ISAACS with written notice if * intends to assign or transfer to any third party any of its rights or obligations under this Agreement. 8. NO AFFILIATION The parties hereby agree that ISAACS is and shall be wholly independent of *, and vice-versa, and that no agency, license, joint venture, partnership, franchise or affiliation is created by this Agreement. Neither party shall incur any obligation in the name of the other party. 9.* 10. LEGAL ACTIONS a. Unless otherwise agreed to by the parties, the parties shall be responsible for the protection and enforcement of their respective marks (* for * Marks and ISAACS for Isaacs' Marks) in the United States. b. The parties agree to reasonably cooperate with and assist each other in protecting and defending the parties' trademark rights (* Marks and Isaacs' Marks). Each party shall promptly notify the other in writing of any infringements, counterfeiting, claims or actions by third parties that the party reasonably believes may be a violation of the other party's trademark rights. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 8

c. The parties agree that they shall determine solely at their own discretion and not subject to dispute by the other party or review in any arbitration or litigation their respective conduct of such protection and enforcement, and neither party shall have a claim for damages or other relief against the other based thereon. d. * and ISAACS shall each have the right to record, or continue the recordation of, their respective trademarks (* Marks and Isaacs' Marks) with the Customs Service of the United States and neither party shall interfere with the efforts of the other, and each party shall cooperate with the other in such efforts. 11. NOTICES All notices, requests or other communications required or permitted hereunder shall be given or made in writing and shall be (i) delivered personally (including commercial carrier), (ii) sent by registered or certified airmail, return receipt requested, postage prepaid or (iii) sent by telecopier, addressed to the party to whom they are directed at the following addresses, or at such other address as may from time to time be designated by such party to the others in accordance with this Section 11: If to *, to: * With a copy to: Coudert Brothers 1627 I Street, N.W. Washington, D.C. 20006 Attention: Wendy L. Addiss, Esq. Telecopier: 202/775-1168 and Howrey & Simon 1299 Pennsylvania Avenue, N.W. Washington, D.C. 20004 Attention: Robert M. Bruskin, Esq. Telecopier: 202/383-6610 * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 9

If to ISAACS, to: I. C. Isaacs & Company L.P. 3840 Bank Street Baltimore, Maryland 21224 Attention: Gerald W. Lear, President and Co-Chief Executive Officer Telecopier: 410/558-2096 I. C. Isaacs & Company L.P. 350 Fifth Avenue Suite 1029 New York, New York 10118 Attn: Robert J. Arnot, Chairman and Co-Chief Executive Officer Telecopier: 212/695-7579 With a copy to: Piper & Marbury L.L.P. Charles Center South 36 South Charles Street Baltimore, Maryland 21201-3010 Attention: Robert J. Mathias, Esq. Telecopier: 410/576-1604 Any notice, request or other communications shall be deemed to have been given and to be effective upon receipt or refusal by the addressee. Any party may change its address for notices hereunder, effective upon giving of notice of such change hereunder to the other parties. 12. GOVERNING LAW AND RESOLUTION OF DISPUTES a. The validity, construction and effect of any and all of the terms and provisions of this Agreement shall be determined and enforced in accordance with the laws of * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 10

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 11

13. BINDING EFFECT This Agreement shall be binding on the parties, their subsidiaries, successors, affiliates, permitted licensees and assigns (if any), and they each warrant that the undersigned are authorized to execute this Agreement on behalf of their respective parties. 14. GENERAL PROVISIONS a. No waiver or modification of any of the terms or provisions of this Agreement shall be valid unless contained in a written document signed by both parties. No course of conduct of dealing between the parties shall act as a waiver of any provision of this Agreement. b. This Agreement, including the entirety of Exhibits A through F2, attached hereto, contains the entire understanding of the parties as to the subject matter herein, and there are no representations, warranties, promises or undertakings other than those contained herein. This Agreement supersedes and cancels all previous agreements between the parties hereto. This Agreement shall be construed against both parties equally, regardless of the party that drafted it. * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 12

d. If any provision of this Agreement should be held to be void or unenforceable, such provision will be treated as severable, leaving valid the remainder of this Agreement. e. The parties agree to execute promptly any documents necessary to effectuate the purpose and intent of this Agreement. f. This Agreement may be executed in any number of duplicate counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. g. Captions and paragraph headings used in this Agreement are for convenience only and are not a part of this Agreement and shall not be used in interpreting or construing it. 13

IN WITNESS WHEREOF, the parties agree that this Agreement shall take effect as of the Effective Date. * By: Name: Title: By: Name: Title: I. C. ISAACS & COMPANY L.P.
By: _______________________________ Name: Robert J. Arnot Title: Chairman and Co-Chief Executive Officer

By:

_______________________________ Name: Gerald W. Lear Title: President and Co-Chief Executive Officer

* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 14

LIST OF EXHIBITS
Exhibit A: Exhibit B: Exhibit C: Exhibit D: Exhibit E: Exhibit F1: Exhibit F2: Specifications and limitations on ISAACS' use of Isaacs' Marks List of products on which ISAACS is permitted and forbidden to use Isaacs' Marks Price Points ISAACS advertising rules * advertising rules * *

* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

EXHIBIT A ISAACS MARKS [LOGO] ( The Microgramma Typestyle ) [LOGO]

In using these Isaacs' Marks on Isaacs' Trademark Products and in all advertising and promotional uses, ISAACS will comply with the following: * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 2

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 3

* 8. Unless otherwise agreed to by the parties, ISAACS shall not use the terms * or any other words that are similar in sound, sight or meaning, as exemplified in Attachment 8 to this Exhibit A. * In addition, the parties may, from time to time, submit to each other exemplars of logos, designs or decorative motifs which they are using or plan to use in the next selling season, provided that such logos, designs, or decorative motifs shall not have been used by the other party. The party so notified shall not use any such logos, designs or decorative motifs, or anything similar to them in the following selling season, without the other party's written permission; provided, however, that either party may use logos, designs or decorative motifs that are standard in the industry. Notwithstanding the foregoing, ISAACS shall not use any design or decorative motif similar to the BOSS SPORT patch shown in Attachment 9 to Exhibit A. 9. For purposes of this Agreement, "polo shirt" or "polo shirts" shall mean a pullover shirt for sportswear that is made of knitted fabric and has short or long sleeves and a turnover collar or a round banded collar and placket. In addition to all other rules herein applicable to tops, ISAACS may use the word "BOSS" by itself on the exterior of polo shirts only in accordance with the following: * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 4

* * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. 5

10. Prior to use, ISAACS may submit to * for approval typestyles other than Microgramma for the word "BOSS", provided those typestyles are less similar to the typestyles used by * than the Microgramma typestyle used by ISAACS. ISAACS shall not use any such typestyle unless * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

ATTACHMENT 1 TO EXHIBIT A o Exemplars of interior and exterior permanent/temporary labels, tags, etc. with acceptable "BOSS by I G Design."

BMA-1368 -- info tag [Graphic Logo] THESE EXAMPLARS DO NOT SUPERSEDE THE RATIO REQUIREMENTS AS OTHERWISE PROVIDED BY THIS EXHIBIT A

BMA-1241R -- [Graphic Logo] THESE EXAMPLARS DO NOT SUPERSEDE THE RATIO REQUIREMENTS AS OTHERWISE PROVIDED BY THIS EXHIBIT A

Jr. Hang Tag/BJ-537W FRONT [Graphic Logo] 22 DEG. ANGLE 6 TO 1 RATIO THESE EXAMPLARS DO NOT SUPERSEDE THE RATIO REQUIREMENTS AS OTHERWISE PROVIDED BY THIS EXHIBIT A

BMA-458 -- [Graphic Logo] THESE EXAMPLARS DO NOT SUPERSEDE THE RATIO REQUIREMENTS AS OTHERWISE PROVIDED BY THIS EXHIBIT A

Jr. Hang Tag/BJ-537 BACK [Graphic Logo] 22 DEG. ANGLE 6 TO 1 RATIO THESE EXAMPLARS DO NOT SUPERSEDE THE RATIO REQUIREMENTS AS OTHERWISE PROVIDED BY THIS EXHIBIT A

[Graphic Logo] BMA-1242 22 DEG. ANGLE 6 TO 1 RATIO THESE EXAMPLARS DO NOT SUPERSEDE THE RATIO REQUIREMENTS AS OTHERWISE PROVIDED BY THIS EXHIBIT A

[Graphic Logo] -- Shirt

[Graphic Logo] -- Shirt

[Graphic Logo] -- Shirt

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[Graphic Logo]

ATTACHMENT 2 TO EXHIBIT A o Exemplars of acceptable graphic environments.

[Graphic Logo]

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[Graphic Logo]

[Graphic Logo] -- Jeans

[Graphic Logo] -- Jeans

[Graphic Logo] -- Jeans

[Graphic Logo] * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

[Graphic Logo]

[Graphic Logo] -- Shirt

[Graphic Logo]

[Graphic Logo]

[Graphic Logo] -- Shirt

[Graphic Logo] -- Shirt

[Graphic Logo]

[Graphic Logo]

[Graphic Logo]

[Graphic Logo] -- Shirt

[Graphic Logo]

[Graphic Logo]

[Graphic Logo] -- Shirt

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o Exemplars of unacceptable graphic environments

[Graphic Logo]

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[Graphic Logo] -- Shirt

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[Graphic Logo] -- Jeans

[Graphic Logo] -- Shirt

[Graphic Logo]

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[Graphic Logo]

[Graphic Logo]

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[Graphic Logo] -- Shirt

[Graphic Logo] -- Shirt

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ATTACHMENT 3 TO EXHIBIT A o Exemplars of acceptable distorted letters.

[Graphic Logo]

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[Graphic Logo] -- Jeans

[Graphic Logo] -- Jeans

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ATTACHMENT 4 TO EXHIBIT A o Exemplars of 24(degree) slant.

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ATTACHMENT 5 TO EXHIBIT A o Exemplars of 22(degree) slant.

[Graphic Logo]

ATTACHMENT 6A TO EXHIBIT A o Exemplars of vertical alignment.

[Graphic Logo] -- Shirt

[Graphic Logo] -- Shirt

[Graphic Logo] -- Jeans

[Graphic Logo] -- Shirt

[Graphic Logo] -- Shirt

[Graphic Logo] -- Shirt

[Graphic Logo] -- Shirt

[Graphic Logo] -- Shirt

[Graphic Logo] -- Jeans

[Graphic Logo] -- Jeans

[Graphic Logo] -- Shirt

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[Graphic Logo] -- Jeans

[Graphic Logo]

ATTACHMENT 6B TO EXHIBIT A o Exemplars of 19(degree) slant.

[Graphic Logo]

ATTACHMENT 7A TO EXHIBIT A o Exemplars of acceptable vertical BOSS logos.

[Graphic Logo] -- Shirt

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ATTACHMENT 7B TO EXHIBIT A o Exemplars of unacceptable vertical BOSS logos.

[Graphic Logo]

ATTACHMENT 8 TO EXHIBIT A o Exemplars of forbidden words. * * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

ATTACHMENT 9 TO EXHIBIT A o The BOSS Sport Patch

[Graphic Logo]--Shirt

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ATTACHMENT 10 TO EXHIBIT A o Exemplars of acceptable coloration for "BOSS by I G Design" on polo shirts.

[Graphic Logo] -- Shirt

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[Graphic Logo] -- Shirt

o Exemplar of unacceptable coloration for "BOSS by I G Design" on polo shirts.

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ATTACHMENT 11 TO EXHIBIT A o Exemplar of acceptable shirts under Exhibit A, Section 9.a.

[Graphic shirts]

[Graphic Logo] -- Shirts

[Graphic Logo] -- Shirts

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[Graphic Logo] -- Shirts

[Graphic Logo] -- Shirts

o Exemplar of acceptable shirts under Exhibit A, Section 9.b.

[Graphic Logo] -- Shirts

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[Graphic Logo] -- Shirts

[Graphic Logo] -- Shirts

o Exemplar of acceptable shirts under Exhibit A, Section 9.c.

[Graphic shirts]

[Graphic Logo] -- Shirts

[Graphic Logo] -- Shirts

[Graphic shirts]

[Graphic Logo] -- Shirts

[Graphic Logo] -- Shirts

[Graphic Logo] -- Shirts

[Graphic Logo] -- Shirts

EXHIBIT B I. PRODUCTS BEARING ISAACS' MARKS THAT ISAACS MAY SELL A. Men's Apparel 1. Sportswear and Activewear. All sportswear and activewear clothing other than the exclusions listed below. All fabrications may be used. 2. Outerwear. All jackets, coats, vests, capes and ponchos other than the exclusions listed below. Such outerwear garments may be reversible, lined, unlined, filled and or fabric treated (waterproofed, coated, etc.) and may have detachable sleeves, hoods and/or interlinings. Lengths of such garments shall be 22" to 60". All fabrications may be used except fur (except as trim) and leather (except as trim). 3. Headwear. All sports hats, visors and caps. 4. Swimwear. All types of swimwear. 5. Jogging Suits. All types of warm-ups and jogging suits of any fabrication 6. Belts. Belts bearing Isaacs' Marks provided that such belts shall be sold only as part of a Bottom and shall not be made out of leather. B. Women's Apparel 1. Sportswear and Activewear. All sportswear and activewear clothing for juniors, contemporary, misses and large sizes other than the exclusions listed below. All fabrications may be used. 2. Outerwear. All jackets coats, vests, capes and ponchos other than the exclusions listed below. Such outerwear garments may be reversible, lined, unlined, filled and/or fabric treated (waterproofed coated, etc.) and may have detachable sleeves, hoods and/or interlinings. Lengths of such garments shall be 22" to 60". All fabrications may be used except fur (except as trim) and leather (except as trim). 3. Headwear. All sports hats, visors and caps. 4. Swimwear. All types of swimwear. 5. Jogging Suits. All types of warm-ups and jogging suits of any fabrication. 6. Belts. All belts bearing Isaacs' Marks provided that such belts shall be sold only as part of a Bottom and shall not be made out of leather.

7. Other. Women's knit garments to be worn on the upper torso that are either snapped or fixed through the crotch and the top portion of which may be a halter, shoulder strap, short sleeve or long sleeve. C. Children's Apparel l. Children's Sportswear and Activewear. All sportswear and activewear clothing other than the exclusions listed below. All fabrications may be used. 2. Outerwear. All jackets, coats, vests, capes and ponchos other than the exclusions listed below. Such outerwear garments may be reversible, lined, unlined, filled and/or fabric treated (waterproofed, coated, etc.) and may have detachable sleeves, hoods and/or interlinings. All fabrications may be used except fur (except as trim) and leather (except as trim). 3. Headwear. All sports hats, visors and caps. 4. Swimwear. All types of swimwear. 5. Jogging Suits. All types of warm-ups and jogging suits of any fabrication. 6. Belts. All belts bearing Isaacs' Marks provided that such belts shall be sold only as part of a Bottom and shall not be made out of leather. D. Other 1. All apparel, including uniforms and work clothes, which is intended to be worn solely and exclusively while persons are performing the normal duties of their employment.

II. PRODUCTS BEARING ISAACS' MARKS THAT ISAACS SHALL NOT SELL A. Notwithstanding the foregoing, the parties agree that Isaacs' Trademark Products do not include any of the following men's, women's or children's apparel: 1. All styles of tailored clothing, furnishings and accessories, including but not limited to tuxedos, gowns and evening wear, sportcoats, blazers, jackets, suits, dress pants, career apparel including blouses, skirts and dresses, raincoats, top coats, dress shirts, ties, dress vests, hosiery (including but not limited to socks, stockings and hose), and leather belts. 2. All types of leather clothing (although leather trim may be used on all products listed in Section I of this Exhibit B). 3. All styles of shoes and other footwear. 4. Clothing designed and sold for the primary purpose of engaging in [to be deleted and dealt with in * Boss Golf License Agreement] golf, tennis, skiing, motor sports, windsurfing, or sailing. 5. Except as described in Exhibit B Section I.B.7. above, bodywear, including but not limited to underwear (including t-shirts intended to be worn as underwear); loungewear and intimate apparel; and sleepwear and robes. B. Except as agreed upon in writing by the parties, the parties further agree that Isaacs' Trademark Products shall not include any non-apparel products of any kind. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

EXHIBIT 10.11(c)(3) EXHIBIT C PRICE POINTS 1. ISAACS shall sell products bearing Isaacs' Marks and permitted under the schedule contained in Exhibit B that bear wholesale prices prior to any bona fide trade, quantity and early payment discounts and any other credits, no greater than those listed below. * shall sell or license others to sell products bearing * Marks and permitted under the schedule contained in Exhibit B that bear wholesale prices prior to any bona fide trade, quantity and early payment discounts and any other credits, no less than those listed below:
-------------------------------------------------------------------------------* ISAACS' MAXIMUM MINIMUM WHOLESALE WHOLESALE -------------------------------------------------------------------------------All long bottoms except jeans and warm-up (or jogging) suits -------------------------------------------------------------------------------Cotton * * -------------------------------------------------------------------------------Synthetic Blend * * --------------------------------------------------------------------------------------------------------------------------------------------------------------All short bottoms except jeans and warm-up (or jogging) suits -------------------------------------------------------------------------------Cotton * * -------------------------------------------------------------------------------Synthetic Blend * * --------------------------------------------------------------------------------------------------------------------------------------------------------------Jeans -------------------------------------------------------------------------------Basic * * -------------------------------------------------------------------------------Fashion * * --------------------------------------------------------------------------------------------------------------------------------------------------------------Jean Shorts -------------------------------------------------------------------------------Basic * * -------------------------------------------------------------------------------Fashion * * --------------------------------------------------------------------------------------------------------------------------------------------------------------Overalls -------------------------------------------------------------------------------Short * * -------------------------------------------------------------------------------Long * * --------------------------------------------------------------------------------------------------------------------------------------------------------------Outerwear -------------------------------------------------------------------------------Filled * * -------------------------------------------------------------------------------Lined * * -------------------------------------------------------------------------------Waterproof * * --------------------------------------------------------------------------------------------------------------------------------------------------------------Vest --------------------------------------------------------------------------------

* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

-------------------------------------------------------------------------------* ISAACS' MAXIMUM MINIMUM WHOLESALE WHOLESALE -------------------------------------------------------------------------------Filled * * -------------------------------------------------------------------------------Lined * * --------------------------------------------------------------------------------------------------------------------------------------------------------------Polo Shirts and Knit Tops -------------------------------------------------------------------------------Basic Short * * -------------------------------------------------------------------------------Basic Long * * -------------------------------------------------------------------------------Fashion Short * * -------------------------------------------------------------------------------Fashion Long * * --------------------------------------------------------------------------------------------------------------------------------------------------------------Sweatshirts -------------------------------------------------------------------------------Basic * * -------------------------------------------------------------------------------Fashion * * --------------------------------------------------------------------------------------------------------------------------------------------------------------Warm-up (or jogging) suits -------------------------------------------------------------------------------Cotton * * -------------------------------------------------------------------------------Synthetic * * --------------------------------------------------------------------------------------------------------------------------------------------------------------T-shirts -------------------------------------------------------------------------------Basic * * -------------------------------------------------------------------------------Fashion * * -------------------------------------------------------------------------------Embroidered * * --------------------------------------------------------------------------------------------------------------------------------------------------------------Sweaters -------------------------------------------------------------------------------Basic * * -------------------------------------------------------------------------------Fashion * * --------------------------------------------------------------------------------------------------------------------------------------------------------------Hats -------------------------------------------------------------------------------Basic * * -------------------------------------------------------------------------------Fashion * * --------------------------------------------------------------------------------------------------------------------------------------------------------------Woven Shirts -------------------------------------------------------------------------------Basic Short * * -------------------------------------------------------------------------------Basic Long * * -------------------------------------------------------------------------------Fashion Short * * -------------------------------------------------------------------------------Fashion Long * * --------------------------------------------------------------------------------------------------------------------------------------------------------------Swimwear -------------------------------------------------------------------------------Basic * * -------------------------------------------------------------------------------Fashion * * --------------------------------------------------------------------------------

* Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

2. All price points are expressed in 1997 dollars. ISAACS price points shall adjust over the term of this Agreement with changes in the rate of inflation applicable to clothing according to the Producer Price Index for Apparel and Other Finished Products Made From Fabrics and Similar Materials. * price points shall remain as stated herein. 3. To the extent ISAACS desires to add additional products to its line, or to the extent either party desires to use fabrics or constructions materially different from those currently being used consistent with the limitations of Exhibit B, the parties will in good faith negotiate reasonable price points applicable to such products. 4. The parties agree that the price points included in this Exhibit C are based upon existing market conditions and reasonably foreseeable changes in such market conditions. In the event that market conditions relating to the manufacture, distribution or sale of products contained in Exhibit B should change substantially, to a degree not contemplated by the price points in this Exhibit C, and such change would result in economic hardship to a party to this Agreement, the parties agree to negotiate in good faith to agree upon reasonable alternative price points. * Text omitted pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission.

EXHIBIT 10.11(c)(4) EXHIBIT D ADVERTISING AND PROMOTION (ISAACS) 1. On all advertising and promotional materials for Isaac's Trademark Products, ISAACS may use the word "BOSS", provided the phrase "BOSS by I G Design" appears at least once in accordance with the rules listed in Sections 2. 3 and 4 below of this Exhibit D. 2. In all print or Internet advertising and promotions for Isaacs' Trademark Products, whether by ISAACS, or by retailers, or by any other entity authorized by ISAACS, each and every page shall prominently feature "BOSS by I G Design" as illustrated by the acceptable exemplars shown in Attachment 1 to this Exhibit D. 3. In all radio, television and motion picture advertising for Isaacs' Trademark Products, the first and last time BOSS is shown or mentioned, it shall be as part of the phrase "BOSS by I G Design". 4. In all visual presentations of the phrase "BOSS by I G Design" in advertising and promotions for Isaacs' Trademark Products, including but not limited to print, Internet, television, motion picture, billboards, posters, flyers, in-store signage, point-of-sale displays, sports sponsorships, promotional tie-ins and/or samples, whether by ISAACS, or by retailers, or by any other entity authorized by ISAACS, the size ratio between the word "BOSS" and the phrase "I G Design" shall be similar to, and in no event greater than, that shown in Attachment 1 to this Exhibit D. 5. ISAACS shall be entitled to display Isaacs' Trademark Products and people wearing Isaacs' Trademark Products in all advertising and promotional material, provided that such Isaacs' Trademark Products comply with Exhibit A and Exhibit B. 6. Nothing in this Agreement is intended to give * any right to approve or disapprove any aspect of the contents of any advertising other than as expressly set forth above and in Exhibit A and Exhibit B; provided, however, that ISAACS shall not use any advertising style or format which is or has been prim