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<CONFORMED-NAME>JACLYN INC
<CIK>0000052969
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<STREET1>635 59TH STREET
<CITY>WEST NEW YORK
<STATE>NJ
<ZIP>07093
<PHONE>2018689400
</BUSINESS-ADDRESS>
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<STREET1>5801 JEFFERSON STREET
<CITY>WEST NEW YORK
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<FILENAME>jaclyn8_k.txt
<DESCRIPTION>FORM 8-K
<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 8-K


                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


       Date of report (Date of earliest event reported): January 10, 2002

                                  JACLYN, INC.
                                  ------------
             (Exact Name of Registrant as Specified in its Charter)


          Delaware                    1-5863                  22-1432053
          --------                    ------                  ----------
(State or Other Jurisdiction   (Commission File Number)     (I.R.S. Employer
     of Incorporation)                                      Identification No.)


               635 59th Street
           West New York, New Jersey                            07093
           --------------------------                           -----
      (Address of Principal Executive Offices)                (Zip Code)


(Registrant's telephone number, including area code):   (201) 868-9400


                                 Not Applicable
                                 --------------

          (Former Name or Former Address, if Changed Since Last Report)

<PAGE>
Item 2.  Acquisition or Disposition of Assets.
         ------------------------------------

         On January 10, 2002, Jaclyn, Inc. (the "Registrant") acquired from Mark
Nitzberg (the "Seller") all of the issued and outstanding stock of Max N.
Nitzberg, Inc., a Pennsylvania corporation (the "Holding Company"), Topsville,
Inc., a Florida corporation ("Topsville") and a wholly-owned subsidiary of the
Holding Company, and Josell Global Sourcing Ltd., a Hong Kong corporation and a
wholly-owned subsidiary of Topsville. ("Josell"). The Holding Company, Topsville
and Josell are hereinafter referred to as the "Acquired Companies".

         Topsville is a New York City based manufacturer and distributor of
private label infants' and children's clothing. Josell is a sourcing company for
Topsville. The assets of the Acquired Companies include, among other things,
finished goods inventory, work-in-process, piece goods, customer orders, trade
names, office leases in New York City and Hong Kong, an office/warehouse
facility in Florida, and office equipment, furniture and fixtures, all of which
the Registrant intends to continue to use in the operations of Topsville and
Josell. At closing, the liabilities of Topsville were primarily comprised of
ordinary course of business trade accounts payable and accrued expenses totaling
approximately $900,000.

         The aggregate purchase price for the acquisition was $3,245,702, of
which $1,745,702 was paid at the closing of the transaction and the remainder of
which will be paid during the fifteen-month period after closing. The purchase
price, which was determined through arm's length negotiation, is subject to
adjustment upon the occurrence of certain events. The Registrant used its
existing line of credit from Fleet National Bank, the Registrant's bank lender,
to pay the purchase price at closing and for the funding of certain debt of
Topsville, described below.

         Contemporaneously with the closing of the transaction, the Registrant
also funded certain of Topsville's outstanding obligations, totaling
$4,411,749.07, to Topsville's factor (the "Factor"). In connection with such
funding, the Factor assigned to the Registrant, among other things, certain
accounts receivable of Topsville (which the Registrant believes will be
sufficient to cover the funding of such obligations, as well as any interest
carrying charges), and the Factor's rights under its factoring and certain
related agreements with Topsville.

         Pursuant to a consulting agreement (the "Consulting Agreement") entered
into between the Registrant and a company controlled by the Seller (the
"Consultant"), the Consultant is required, for a thirty-month period ending June
30, 2004, to provide consulting services to the Registrant relating, among other
things, to the conduct of Topsville's business. The Seller, which the Registrant
anticipates will continue direction of the day-to-day operations of Topsville,
is required to provide the consulting services on behalf of the Consultant.
Under the consulting agreement, the Consultant is entitled to receive base
compensation of $33,854.17 per month during the term of the Consulting
Agreement, plus contingent bonus payments of up to 4% of net sales of Topsville
if certain levels of net sales are achieved at prescribed gross margin levels.

                                      -2-
<PAGE>

The Seller was also granted an option to purchase an aggregate of 120,000 shares
of the Registrant's common stock, vesting over a two-year period after closing,
at an exercise price of $2.10 per share.

         The foregoing description is qualified by reference to the actual terms
of the Purchase and Sale Agreement, the Consulting Agreement and the Payment and
Indemnification Agreement, copies of which are filed as Exhibits 2.1, 2.2 and
2.3 hereto, and which are incorporated by reference herein and made a part
hereof.

Item 7.  Financial Statements and Exhibits.
         ---------------------------------

(a)      Financial Statements of Business Acquired: The Registrant intends to
         file the financial statements required by this item no later than 60
         days after the date hereof.

(b)      Pro Forma Financial Information: The Registrant intends to file the pro
         forma financial information required to be filed by this item no later
         than 60 days after the date hereof.

(c)      Exhibits.
         --------

         Exhibit No.         Description
         -----------         -----------

            2.1              Purchase and Sale Agreement dated January 10, 2002
                             between Mark Nitzberg and the Registrant.

            2.2              Consulting Agreement dated January 10, 2002 between
                             Natoosh, LLC, Mark Nitzberg and the Registrant.

            2.3              Payment and Indemnification Agreement dated January
                             10, 2002 by and among Capital Factors, Inc.,
                             Topsville, Inc., Mark Nitzberg and the Registrant.

                                      -3-
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date:    January 24, 2002                   JACLYN, INC.


                                            By: /s/ ROBERT CHESTNOV
                                                --------------------------------
                                                Robert Chestnov,
                                                President and Chief Executive
                                                Officer

                                      -4-
<PAGE>

                                  EXHIBIT INDEX
                                  -------------

         Exhibit No.         Description
         -----------         -----------

            2.1              Purchase and Sale Agreement dated January 10, 2002
                             between Mark Nitzberg and the Registrant.

            2.2              Consulting Agreement dated January 10, 2002 between
                             Natoosh, LLC, Mark Nitzberg and the Registrant.

            2.3              Payment and Indemnification Agreement dated January
                             10, 2002 by and among Capital Factors, Inc.,
                             Topsville, Inc., Mark Nitzberg and the Registrant.

                                      -5-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.1
<SEQUENCE>4
<FILENAME>ex2_1.txt
<DESCRIPTION>EXHIBIT 2.1
<TEXT>

                                                                     EXHIBIT 2.1
                                                                     -----------

                           PURCHASE AND SALE AGREEMENT
                           ---------------------------

         PURCHASE AND SALE AGREEMENT, made the 10th day of January, 2002, by and
between MARK NITZBERG ("Seller") and JACLYN, INC., ("Buyer").

                                R E C I T A L S:
                                - - - - - - - -

         A.    Seller owns one hundred percent (100%) of the outstanding shares
of Max N. Nitzberg, Inc., ("MNNI"), a Pennsylvania corporation (such 100% is
referred to as the "Shares").

         B.    MNNI owns one hundred percent (100%) of the outstanding shares of
Topsville, Inc. ("Topsville"), a Florida corporation (such 100% is referred to
as the "Topsville Shares").

         C.    Topsville is engaged in the business of manufacturing,
distributing and selling children and infants' apparel.

         D.    Topsville owns one hundred percent (100%) of the outstanding
shares of Josell Global Sourcing Ltd. ("JGSL"), a Hong Kong corporation (such
100% is referred to as the "JGSL Shares").

         E.    Topsville uses offices located at 1333 Broadway, New York, New
York (the "Topsville Office") and owns all of the furnishings, fixtures,
equipment and chattels located at the Topsville Office (the "Office Property"),
except for certain items that Topsville leases in that regard (the "Leased
Property").

                                      -1-
<PAGE>

         F.    JGSL uses offices located at Unit #3, Peninsula Tower, 19th
Floor, Kowloon, Hong Kong (the "JGSL Office") and owns all of the furnishings,
fixtures, equipment and chattels located at the JGSL Office (the "JGSL Office
Property"), except for certain items that JGSL leases in that regard (the "JGSL
Leased Property").

         G.    Topsville is party to a factoring agreement with Capital factors,
Inc. ("Capital"), pursuant to which Topsville has assigned its accounts
receivable to Capital (the "Factoring Agreement").

         H.    Seller is desirous of selling the Shares to Buyer, and Buyer is
desirous of purchasing same, on the terms and conditions set forth herein.

         NOW, THEREFORE, it is agreed as follows:

                                   ARTICLE I.
                                   DEFINITIONS

         A.    Definitions. In addition to the definitions set forth above, the
following terms shall have the meanings specified:

               "Agreement" shall mean this Purchase and Sale Agreement, together
with the Schedules and the Exhibits attached hereto;

               "Artwork" shall mean all of MNNI's, Topsville's and JGSL's
rights, claims and interests in and to all artwork, patterns, trademarks, trade
names, copyrights and intellectual property of any nature or medium whatsoever,
which were created or developed by or for MNNI, Topsville or JGSL and which are
or have been associated with the conduct of their business;

                                      -2-
<PAGE>

               "Closing Date" shall mean (a) January 10, 2002; or (b) such other
date as Buyer and Seller may agree upon in writing. The Closing shall be deemed
effective as of the end of business on the Closing Date. Immediately upon the
Closing, the purchase and sale of the Shares shall be deemed fully executed;

               "Closing" shall mean the conference to be held at 10:00 AM local
time on the Closing Date at the offices of Klein & Liss, LLP, 470 Park Avenue
South, 12th Floor, New York, New York, or at such other time and place as the
parties may mutually agree to in writing;

               "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended;

               "Exhibits" shall mean the exhibits referred to in this Agreement;

               "JGSL Leased Property" shall mean the items set forth on SCHEDULE
4.6, which schedule sets forth a description of each item of JGSL Leased
Property and the financial and durational terms of its respective lease;

               "Knowledge of Seller" or "to the Seller's Knowledge" shall mean
that which Seller knows or, based upon objective facts of which Seller is or
should be aware, has reason to know or reasonably should believe;

               "Leased Property" shall mean the items set forth on SCHEDULE 4.5,
which schedule sets forth a description of each item of Leased Property and the
financial and durational terms of its respective lease;

                                      -3-
<PAGE>

               "Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, security interest, encumbrance, claim, lien, lease (including any
capitalized lease) or charge of any kind, whether voluntarily incurred or
arising by operation of law or otherwise, which affects (i) the Shares, (ii) the
Topsville Shares, (iii) the JGSL Shares, (iv) any assets or property of MNNI,
(v) any assets or property of Topsville and/or (vi) any assets or property of
JGSL, including any agreement to give or grant any of the foregoing, any
conditional sale or other title retention agreement and the filing of or
agreement to give any financing statement with respect to any assets or property
under the Uniform Commercial Code of the State of New York or the comparable law
of any U.S. or foreign jurisdiction;

               "Material Adverse Effect" means anything that could have a
materially adverse effect upon Buyer's right, title or interest in and to any of
the Shares, the Topsville Shares or the JGSL Shares;

               "Net Sales" means the total invoiced price of goods sold by
Topsville, less all discounts, customer allowances, markdowns, returns and
unrecovered chargebacks;

               "Person" shall mean any natural person, general or limited
partnership, corporation, limited liability company, firm, association or other
legal entity;

               "Prescribed Margin Level" means an overall profit margin of at
least twenty-two and one-half percent (22.5%) on Net Sales, when comparing the
Net Sales to their "cost of goods sold";

                                      -4-
<PAGE>

               "Purchase Price" shall mean the amount of three million two
hundred forty-five thousand seven hundred two dollars ($3,245,702). The Purchase
Price has been calculated based on Topsville's net book value, plus a premium of
two million one hundred thousand dollars ($2,100,000), as more particularly set
forth in Exhibit "A".

               "Schedules" shall mean the schedules referred to in this
Agreement;

         B.    Singular/Plural; Gender. Where the context so requires or
permits, the use of the singular form includes the plural, and the use of the
plural form includes the singular, and the use of any gender includes any and
all genders.

                                   ARTICLE II.
                                PURCHASE AND SALE

         A.    Purchase and Sale. At the Closing, on the Closing Date, Seller
shall fully and absolutely sell, assign, convey, transfer and deliver to Buyer
all of the Shares, free and clear of any and all Liens of any nature whatsoever,
and Buyer shall purchase same.

         B.    Payment on Closing. At the Closing, on the Closing Date, Buyer
shall pay to Seller the sum of one million seven hundred forty-five thousand
seven hundred two dollars ($1,745,702) on account of the Purchase Price. The
balance of the Purchase Price shall be paid as set forth in Article VIII.

         C.    Closing Date Deliveries. At the Closing, on the Closing Date,
Seller shall deliver, or cause to be delivered, to Buyer, properly executed and

                                      -5-
<PAGE>

dated and effective as of the Closing Date: (i) the official corporate records
and corporate kit of Topsville and JGSL, including the stock ledgers, minutes
and corporate seals thereof, (ii) the certificates for the Shares, duly endorsed
to Buyer as owner/assignee thereof, (iii) the certificates for the Topsville
Shares, evidencing MNNI's 100% interest therein, (iii) the certificates for the
JGSL Shares, evidencing Topsville's 100% interest therein, (iv) the Consulting
Agreement, and (v) such other documents as Buyer shall reasonably request.

         D.    Taxes. All federal, state, local and other transfer, sales and
use taxes (if any) applicable to, imposed upon or arising out of the transfer to
Buyer of the Shares as contemplated by this Agreement shall be paid by Seller.

                                  ARTICLE III.
                            GOVERNMENTAL APPROVALS

           Seller represents and warrants that, to Seller's Knowledge, no
approvals or requests for approval or waiver are required from any governmental
authorities in connection with Seller's consummation of the Closing or any of
the transactions by Seller that are contemplated thereby.

                                   ARTICLE IV.
                    REPRESENTATIONS AND WARRANTIES OF SELLER

         Seller represents and warrants to Buyer as follows:

         A.    Organization. MNNI is a corporation duly incorporated, validly
existing and in good standing under the laws of Pennsylvania and is duly

                                      -6-
<PAGE>

qualified to do business in every jurisdiction where it does business and where
such qualification is necessary. Topsville is a corporation duly incorporated,
validly existing and in good standing under the laws of Florida and is duly
qualified to do business in every jurisdiction where it does business and where
such qualification is necessary. JGSL is a corporation duly incorporated,
validly existing and in good standing under the laws of Hong Kong and is duly
qualified to do business in every jurisdiction where it does business and where
such qualification is necessary. Each of MNNI, Topsville and JGSL has the power
and authority to own, lease, and operate its properties and to carry on its
business in the places where such properties are now owned, leased or operated,
as such business is now conducted, and as it will be conducted at the time of
Closing.

         B.    Authorization; Enforceability. The execution, delivery and
performance of this Agreement and all of the documents and instruments required
hereby by Seller, and the consummation and effectiveness of the transactions to
be done by Seller contemplated hereby and thereby, are within the corporate
power and authority of MNNI, Topsville and JGSL and have been duly authorized by
all necessary corporate action by MNNI, Topsville and JGSL and do not require
any further authorization or approval by any Person. This Agreement is and the
other documents and instruments required hereby will be, when executed and
delivered by Seller, valid and binding obligations of Seller, fully effective
and enforceable against Seller.

         C.    Absence of Conflicting Agreements. The execution, delivery and
performance of this Agreement by Seller, and the execution and performance of
the Consulting Agreement by Seller and Consultant, does not and will not, after
the giving of notice, or the lapse of time or both, or otherwise:

                                      -7-
<PAGE>

               i)     conflict with, result in a breach of, or constitute a
default under, the Certificate of Incorporation or by-laws of MNNI, Topsville or
JGSL;

               ii)    conflict with, result in a breach of, or constitute a
default under any federal, foreign, state or local law, statute, ordinance, rule
or regulation which is applicable to Seller, MNNI, Topsville, JGSL, the Shares,
the Topsville Shares, the JGSL Shares and/or the transactions contemplated
hereby, or any court or administrative order or process, or any contract,
agreement, arrangement, commitment or plan to which Seller, MNNI, Topsville or
JGSL is a party or by which Seller, MNNI, Topsville or JGSL is bound and which
relates to the Shares, the Topsville Shares, the JGSL Shares and/or the
transactions contemplated hereby;

               iii)   result in the creation of any Lien upon the Shares, the
Topsville Shares, the JGSL Shares or any assets of property of MNNI, Topsville
or JGSL;

               iv)    require the consent, waiver, approval, permit, license,
clearance or authorization of, or any declaration or filing with, any court or
governmental or public agency or other authority; or

               v)     require the consent of any Person under any contract,
agreement, arrangement, commitment or plan to which Seller, MNNI, Topsville or
JGSL is a party or by which Seller, MNNI, Topsville or JGSL is bound.

         D.    Title to Assets; Liens and Encumbrances. On the Closing Date and

                                      -8-
<PAGE>

simultaneously with the Closing, there shall not be any Liens on the Shares, the
Topsville Shares or the JGSL Shares. Except as set forth in SCHEDULE 4.1, and
except for the Leased Property, as to which it holds valid leasehold interest,
each of MNNI and Topsville owns good and exclusive title to all of its assets,
free and clear of any and all Liens of any nature whatsoever. Except as set
forth in SCHEDULE 4.2, and except for the JGSL Leased Property, as to which it
holds valid leasehold interest, JGSL owns good and exclusive title to all of its
assets, free and clear of any and all Liens of any nature whatsoever. As
provided in Exhibit "E" {the "Factoring Assignment"), Capital will assign to
Buyer both the Factoring Agreement and Liens that it has upon MNNI's,
Topsville's and JGSL's assets no later than the Closing.

         E.    Condition of Equipment. To Seller's Knowledge, except as set
forth on SCHEDULE 4.3, no item of Office Property or JGSL Office Property is in
need of imminent repair or replacement. To the extent that a scheduled item of
Office Property or JGSL Office Property is in need of imminent repair or
replacement, Buyer shall bear, collectively as to all such items, the first five
thousand dollars ($5,000) of the cost of such repair or replacement and Seller
shall bear the balance.

         F.    Leases of Real and Personal Property
               ------------------------------------

               i)     Seller has delivered a true and complete copy of the
leases for the Topsville Office and JGSL Office (including all riders, exhibits
and amendments) to Buyer. If and when the originals of said documents are
discovered by Seller, they will promptly be delivered to Buyer. To the extent,
if any, that consent of any of the landlords of those leases is required for the
continuation of those lease after the sale of the Shares, such consent has been
obtained by Seller, copies thereof are annexed as SCHEDULE 4.4, and the
originals thereof will be delivered to Buyer at or before Closing.

                                      -9-
<PAGE>

               ii)    Annexed as SCHEDULE 4.5 is a complete and accurate list of
all Leased Property. Annexed as SCHEDULE 4.6 is a complete and accurate list of
all JGSL Leased Property. Seller has delivered a true and complete copy of all
leases for the Leased Property and JGSL Leased Property (including all riders,
exhibits and amendments) to Buyer. If and when the originals of said documents
are discovered by Seller, they will promptly be delivered to Buyer.

               iii)   Topsville and JGSL have made all payments required under
the aforesaid real and personal property leases which accrued at or prior to
Closing and, to Seller's Knowledge, there is no default under any of those
leases.

               iv)    Except as set forth in SCHEDULE 4.11, and except for
personal effects of other employees of Topsville and JGSL who work at the
Topsville Office and JGSL Office, upon Closing, and subject only to the terms of
any leases identified in SCHEDULE 4.5 and SCHEDULE 4.6, any and all items
located at those offices will be subject to disposition as directed by Buyer in
its sole discretion.

         G.    Artwork.
               -------

               i)     There are no claims, demands or proceedings instituted,
pending or, to the Knowledge of Seller, threatened by any Person pertaining to
or challenging Topsville's or JGSL's right to use or ownership of any Artwork.
Without limiting the foregoing, to the extent any Artwork was made or developed,
in whole or in part, by any third party, such third-party work was a "work for
hire".

                                      -10-
<PAGE>

               ii)    After the Closing, Seller shall not use any trademark or
trade name that was used by MNNI, Topsville or JGSL, or any word or phrase that
is similar to any of those trademarks or trade names, in connection with any
goods, services, trade or business, nor shall Seller be associated, directly or
indirectly, with any Person (other than MNNI, Topsville, JGSL or Buyer) who uses
any of those trademarks or trade names, or any word or phrase that is similar to
any of those trademarks or trade names, in connection with any goods, services,
trade or business.

         H.    No Litigation; Labor Disputes; Compliance with Laws.
               ---------------------------------------------------

               i)     Except as set forth on SCHEDULE 4.7, there
is no decree, judgment, order, litigation at law or in equity, arbitration
proceeding or proceeding before or by any court, commission, agency or other
administrative or regulatory body or authority pending or, to the Knowledge of
Seller, threatened, to which MNNI, Topsville or JGSL is a party or which might
have a Material Adverse Effect. To the Knowledge of Seller, there is no
investigation by any commission, agency or other administrative or regulatory
body or authority pending or threatened, which is concerned with the operations,
business or affairs of MNNI, Topsville or JGSL, or the Shares, Topsville Shares
or JGSL Shares.

               ii)    To Seller's Knowledge, each of MNNI, Topsville and JGSL
owns and operates, and has owned and operated, its properties and assets, and
carries on and conducts, and has carried on and conducted, its business in
compliance with all applicable federal, foreign, state and local laws, statutes,

                                      -11-
<PAGE>

ordinances, rules and regulations (including those pertaining to equal
employment opportunity, the environment and hazardous materials), and all court
or administrative orders or processes, including but not limited to Occupational
Safety and Health Administration, Equal Employment Opportunity Commission and
National Labor Relations Board.

               iii)   There is no litigation or proceeding of any nature pending
or, to Seller's Knowledge, threatened against or affecting him, MNNI, Topsville,
JGSL or any of their affiliates that might adversely affect (i) Seller's ability
to fully and timely perform his obligations hereunder or (ii) the post-Closing
conduct of MNNI's, Topsville's and JGSL's businesses. To Seller's Knowledge,
there is no investigation pending or threatened against or affecting him, MNNI,
Topsville, JGSL or any of their affiliates that might adversely affect (i)
Seller's ability to fully and timely perform his obligations hereunder or (ii)
the post-Closing conduct of MNNI's, Topsville's and JGSL's businesses.

               iv)    Each of the employees listed in SCHEDULE 4.8 has been paid
all compensation, fringe benefits and bonuses that are or may become due him/her
from Topsville, and there is no dispute with any of those employees in that
regard. None of those employees is entitled to pay in lieu of unused vacation
days. Those employees who have unused vacation days, and the respective number
thereof, are set forth in SCHEDULE 4.8. Such unused vacation days are further
dealt with in Article VII, Section I(i)

               v)     Seller shall, at his sole cost and expense, defend and
fully indemnify Buyer, MNNI, Topsville and JGSL from any and all out of pocket
loss, damage and expense (including reasonable attorneys' fees) which relates to
or arises out of the litigation and potential litigation listed on SCHEDULE 4.7,

                                      -12-
<PAGE>

as well as any other litigation or potential litigation that should have been
listed on that schedule. Seller shall use his best efforts to settle, as soon as
possible, the case of Topsville v. Pashkoff, listed on that schedule.

         I.    Taxes. Except to the extent that it could not result in Liens
against any of the Shares, the Topsville Shares, the JGSL Shares, or any assets
or property of MNNI, Topsville or JGSL:

               i)     To Seller's Knowledge, each of Seller, MNNI, Topsville and
JGSL has filed all federal, foreign, state and local tax returns, reports and
estimates for all years and periods (and portions thereof) for which any such
returns, reports and estimates were due (except that MNNI may not have filed a
Form 5471 with respect to JGSL on its consolidated tax returns), and any and all
amounts shown on such returns and reports to be due and payable have been paid
in full except as may be contested in good faith. To Seller's Knowledge, each of
Seller, MNNI, Topsville and JGSL has withheld all taxes required to be withheld
under applicable law and regulations, and such withholdings have either been
paid to the proper governmental agency or properly set aside and deposited in
accounts for such purpose. To Seller's Knowledge, there are no tax deficiencies
(including penalties and interest) of any kind assessed against or relating to
Seller, MNNI, Topsville or JGSL with respect to any taxable periods ending on or
before or including the Closing Date. Irrespective of whether it results in
Liens against any of the Shares, the Topsville Shares, the JGSL Shares, or any
assets or property of MNNI, Topsville or JGSL, if any present or future contest
of taxes or other assessments (whether known or unknown to Seller, and
regardless of whether the assessment occurs before or after the Closing Date,

                                      -13-
<PAGE>

and including, but not limited to, customs duties) which are owed or owing with
respect to pre-Closing taxable periods (or the pre-Closing portion of taxable
periods that include the Closing Date) is decided adversely to Seller, MNNI,
Topsville or JGSL (or if any such taxes or assessments are not contested),
Seller shall fully indemnify Buyer, MNNI, Topsville and JGSL against any and all
resulting liabilities and assessments (including, but not limited to, any
interest, fines or penalties that may be assessed). All such contests shall be
at Seller's sole cost and expense. The aforesaid indemnification need not be
made to such extent, if any, as the tax liability that is to be indemnified has,
as set forth in Exhibit "A", already been deducted in arriving at the Purchase
Price.

         J.    Governmental Authorizations. No governmental qualifications,
registrations, filings, privileges, franchises, licenses, permits, approvals or
authorizations, other than those which apply to all businesses generally, are
required for Topsville or JGSL to own and operate their businesses in the manner
that they were operated during the two-year period preceding the Closing.

         K.    Brokers. Neither this Agreement nor the sale and purchase of the
Shares nor any other transaction contemplated by this Agreement was induced or
procured through any Person who might have a claim to a brokerage fee, finder's
fee or similar fee other than Arnold Sanford Cohen ("Cohen"). Cohen shall be
entitled to a fee only if and when the Closing occurs. One-half of that fee (but
in no event more than a maximum of seventy-five thousand dollars [$75,000])
shall be paid by Buyer. The balance of that fee shall be paid by Seller. Seller
shall defend and indemnify Buyer against any claim that is made against Buyer
for a brokerage fee, finder's fee or similar fee other than as provided herein,
if such claim is based on alleged actions or conduct of Seller.

                                      -14-
<PAGE>

         L.    Employee Benefit Plans. The consummation of the transactions
contemplated hereby will not result in any liability on the part of MNNI,
Topsville, JGSL or Buyer under any plan that is subject to ERISA, or in the
violation of any obligation or duty that MNNI, Topsville, JGSL or Seller has
under ERISA, or in any claim against MNNI, Topsville, JGSL or Buyer or the
imposition of any liability or obligation upon MNNI, Topsville, JGSL or Buyer in
respect of any plan of Seller or his affiliates that is subject to ERISA.
Topsville is in full compliance with the terms and legal requirements of the
401(k) plan that was established by it, which plan is employee-funded only.

         M.    Customer Satisfaction. To Seller's Knowledge, none of the Persons
listed on SCHEDULE 4.9 has indicated, nor is there any reason to believe, that
the volume of such Persons' purchase orders to Topsville during the 12-month
period following the Closing will fall below the respective amounts forecast by
Seller in SCHEDULE 4.9a. The forecasts made by Seller in SCHEDULE 4.9a are based
on a careful and thorough analysis and assessment by Seller of all relevant
factors known to him. Buyer acknowledges that it has met with the Persons listed
on SCHEDULE 4.9 and that, based on such meetings, there is no reason to believe
that the volume of such Persons' purchase orders to Topsville during the
12-month period following the Closing will fall below the respective amounts
forecast by Seller in SCHEDULE 4.9a.

         N.    Disclosure of Liabilities. All actual, potential and contingent
liabilities of MNNI, Topsville and JGSL (including any that are disputed in any
way) are fully and accurately disclosed in the financial statements annexed as
Exhibit "B" (including any footnotes or other comments thereto). If not so fully

                                      -15-
<PAGE>

and accurately disclosed, any and all additions or modifications are set forth
in SCHEDULE 4.10. Annexed as Exhibit "F" is written consent, from the
accountants who prepared the aforesaid financial statements, to the use of their
audit opinions for the last three years in registration statements and reports
that are filed with the SEC.

         O.    Additional Representations and Warranties by Seller. Additional
representations and warranties by Seller are set forth in Article VIII.

                                   ARTICLE V.
                     REPRESENTATIONS AND WARRANTIES OF BUYER

         Buyer represents and warrants to Seller as follows:

         A.    Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and Buyer
has full corporate power to consummate the transactions contemplated by this
Agreement.

         B.    Authorization; Enforceability. The execution, delivery and
performance of this Agreement and all of the documents and instruments required
hereby by Buyer, and the consummation and effectiveness of the transactions to
be done by Buyer contemplated hereby and thereby, are within the corporate power
and authority of Buyer and have been duly authorized by all necessary corporate
action by Buyer and do not require any further authorization or approval by any
Person. This Agreement is and the other documents and instruments required
hereby will be, when executed and delivered by Buyer, valid and binding
obligations of Buyer, fully effective and enforceable against Buyer.

                                      -16-

<PAGE>

         C.    Absence of Conflicting Agreements. The execution, delivery and
performance of this Agreement, the Note and the Consulting Agreement by Buyer
does not and will not, after the giving of notice, or the lapse of time or both,
or otherwise:

               i)     conflict with, result in a breach of, or constitute a
default under, the Certificate or Articles of Incorporation or bylaws of Buyer;

               ii)    conflict with, result in a breach of, or constitute a
default under any federal, foreign, state or local law, statute, ordinance, rule
or regulation which is applicable to Buyer or any court or administrative order
or process, or any contract, agreement, arrangement, commitment or plan to which
Buyer is a party or by which Buyer is bound and which relates to the Shares, the
Topsville Shares, the JGSL Shares and/or the transactions contemplated hereby;

               iii)   require the consent, waiver, approval, permit, license,
clearance or authorization of, or any declaration or filing with, any court or
governmental or public agency or other authority (except for requisite SEC
filings); or

               iv)    require the consent of any Person under any contract,
agreement, arrangement, commitment or plan to which Buyer is bound.

         D.    Brokers. Neither this Agreement nor the sale and purchase of the
Shares nor any other transaction contemplated by this Agreement was induced or
procured through any Person who might have a claim to a brokerage fee, finder's
fee or similar fee other than Arnold Sanford Cohen ("Cohen"). Cohen shall be

                                      -17-

<PAGE>

entitled to a fee only if and when the Closing occurs. One-half of that fee (but
in no event more than a maximum of seventy-five thousand dollars [$75,000])
shall be paid by Buyer. The balance of that fee shall be paid by Seller. Buyer
shall defend and indemnify Seller against any claim that is made against Seller
for a brokerage fee, finder's fee or similar fee other than as provided herein,
if such claim is based on alleged actions or conduct of Buyer.

         E.    Litigation. There is no litigation, proceeding or investigation
of any nature pending or, to Buyer's knowledge, threatened against or affecting
it or any of its affiliates that would materially adversely affect Buyer's
ability fully to perform its obligations hereunder.

                                   ARTICLE VI.
                CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER

         Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the following
express conditions precedent:

         A.    Compliance with Agreement. Seller shall have performed and
complied in all respects with all of its obligations under this Agreement which
are to be performed or complied with by it prior to or at the Closing.

         B.    Representations and Warranties. The representations and
warranties made by Seller in this Agreement shall be true and correct in all
respects as of the Closing Date and, to Seller's Knowledge, that will not change
after Closing except for post-Closing matters that will be in the sole control
of Buyer.

                                      -18-
<PAGE>

         C.    Deliveries at Closing. Seller shall have delivered or caused to
be delivered to Buyer the documents, each properly executed, required to be
delivered pursuant to this Agreement.

         D.    Approvals and Consent. There shall have been secured such
permissions, approvals, determinations, consents and waivers, if any, as may be
required by law, regulatory authorities, or any third party.

         E.    Absence of Investigations and Proceedings. Neither Seller nor
Buyer nor MNNI nor Topsville nor JGSL shall be subject to any restraining order
or injunction restraining or prohibiting the consummation of any of the
transactions contemplated hereby; no action or proceeding shall have been
instituted before any court or governmental body to restrain or prohibit, or to
obtain substantial damages in respect of, the consummation of the transactions
contemplated by this Agreement; and none of the parties to this Agreement shall
have received written notice from any Person of (i) its intention to institute
any action or proceeding to restrain or enjoin or nullify this Agreement or the
transactions contemplated hereby, or to commence any investigation (other than a
routine letter of inquiry) into the consummation of this Agreement or (ii) the
actual commencement of such investigation.

         F.    Absence of Liens. On the Closing Date and simultaneously with the
Closing, there shall not be any Liens on the Shares, the Topsville Shares or the
JGSL Shares, nor (except as provided in SCHEDULES 4.1 and 4.2) on any of the
assets or property of MNNI, Topsville or JGSL.

         G.    Future Services of Key Personnel. Prior to the Closing, each of
the Persons set forth in SCHEDULE 4.8a must have committed to continue to work

                                      -19-
<PAGE>

for Topsville after the Closing, and, to Seller's Knowledge, there shall be no
reason to believe that any of those commitments is untrue or that any of the
Persons who made such a commitment plans to terminate his/her employment in the
foreseeable future after Closing. If, as of the time of Closing, a Person listed
on SCHEDULE 4.8a has indicated that he/she (i) will not continue to work for
Topsville or (ii) plans to terminate his/her employment in the foreseeable
future, Seller shall, at Closing, modify SCHEDULE 4.8a accordingly. At Closing,
Natoosh, LLC ("Consultant"), a company whose principal is Seller, must enter
into a written consulting agreement with Buyer in the form annexed as Exhibit
"C" (the "Consulting Agreement"). Seller must be insurable, and must submit to
and cooperate in being insured, for Buyer's benefit, for no less than $2 million
in life insurance. Such life insurance policy will not be maintained by Buyer
for more than one year after the termination of the Consulting Agreement, as the
same may be extended or renewed.

         If any of the conditions set forth in this Article VI has not been
satisfied, Buyer may in its sole discretion nevertheless elect to proceed with
the consummation of the transactions contemplated hereby, without thereby
waiving (except to the limited and specific extent set forth in SCHEDULE 6.1)
any of Seller's representations, warranties or obligations.

                                  ARTICLE VII.
                CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER

         Each and every obligation of Seller to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the following
express conditions precedent:

                                      -20-
<PAGE>

         A.    Compliance with Agreement. Buyer shall have performed and
complied in all respects with all of its obligations under this Agreement which
are to be performed or complied with by it prior to or at the Closing.

         B.    Representations and Warranties. The representations and
warranties made by Buyer shall be true and correct in all respects as of the
Closing Date.

         C.    Deliveries at Closing. Buyer shall have delivered, or caused to
be delivered, to Seller the following: (i) the $1,745,702 referred to in Article
II, Section B, (ii) the Note, (ii) the Consulting Agreement, and (iii) the
Factoring Assignment.

         D.    Absence of Investigations and Proceedings. Neither Seller nor
Buyer nor MNNI nor Topsville nor JGSL shall be subject to any restraining order
or injunction restraining or prohibiting the consummation of any of the
transactions contemplated hereby; no action or proceeding shall have been
instituted before any court or governmental body to restrain or prohibit, or to
obtain substantial damages in respect of, the consummation of the transactions
contemplated by this Agreement; and none of the parties to this Agreement shall
have received written notice from any Person of (i) its intention to institute
any action or proceeding to restrain or enjoin or nullify this Agreement or the
transactions contemplated hereby, or to commence any investigation (other than a
routine letter of inquiry) into the consummation of this Agreement or (ii) the
actual commencement of such investigation.

         If any of the conditions set forth in this Article VII has not been
satisfied, Seller may nevertheless elect to proceed with the consummation of the

                                      -21-
<PAGE>

transactions contemplated hereby, without thereby waiving (except to the limited
and specific extent set forth in SCHEDULE 7.1) any of Buyer's representations,
warranties or obligations.

                                  ARTICLE VIII.
                              ADDITIONAL AGREEMENTS

         A.    Installment Payments to Seller. Subject to the rights of offset
and recoupment discussed in Section J of this Article VIII, Buyer shall, on the
dates set forth below, cause the following additional payments to be made to
Seller on account of the Purchase Price for the Shares:

               i)     $500,000 - three (3) months after the Closing Date

               ii)    $400,000 - six (6) months after the Closing Date

               iii)   $300,000 - nine (9) months after the Closing Date

               iv)    $200,000 - one (1) year after the Closing Date

               v)     $100,000 - fifteen (15) months after the Closing Date.

Buyer's obligation to make such payments will be evidenced by a non-negotiable
promissory note in the form annexed as Exhibit "D" (the "Note").

         B.    Seller's Right to Receive Certain Assets.
               ----------------------------------------

               i)     SCHEDULE 8.1 sets forth items that have previously been
delivered to Capital as collateral security for Topsville's performance under
the Factoring Agreement. Capital is, by separate agreement, releasing those
items only. To the extent that an item listed on SCHEDULE 8.1 is being released
to Seller, Seller's right to such distribution is pursuant to the Redemption
Agreement.

                                      -22-
<PAGE>

               ii)    SCHEDULE 8.2 sets forth obsolete inventory and non-first
quality inventory of Topsville that is being distributed to Seller. Seller's
right to such distribution is pursuant to the Redemption Agreement.

               iii)   SCHEDULE 8.3 sets forth accounts receivable of Topsville,
unpaid as of the Closing Date, which were assigned to Capital pursuant to the
Factoring Agreement. Pursuant to the Factoring Assignment, such accounts
receivable are being assigned to Buyer. Subject to the terms of (i) the
Factoring Assignment and (ii) Buyer's rights of offset and/or recoupment, the
Excess referred to in the Factoring Assignment will be paid over to Seller.
Seller's right to such distribution is pursuant to the Redemption Agreement.
After the Closing, Topsville will make reasonable collection efforts (not
including incurrence of attorney's fees or other extraordinary expenses), in the
ordinary course of its business and without cost to the Seller, to collect the
receivables set forth in SCHEDULE 8.3 and, upon collection, to remit the same to
Jaclyn, pursuant to Jaclyn's rights under the Factoring Assignment.

         C.    Topsville's Inventory and Work In Process.
               -----------------------------------------

         Seller represents and warrants that annexed as SCHEDULE 8.4 is a full
and accurate list of (i) Topsville's inventory of finished goods and (ii) all
work in process ("WIP") of Topsville, which WIP list includes a correlation, by
the number of to-be-finished units and their particular style number, of each
particular work in process with the numbered customer purchase order that that
work is intended to fill. Seller represents and warrants that true and complete
copies of the aforesaid purchase orders have been delivered to Buyer prior to
Closing. Seller represents and warrants that none of those purchase orders has
been cancelled or modified, in whole or in part, that Topsville will not make
any cancellation or modification, in whole or in part, and that none of the
customers of those orders has indicated that it intends to cancel or modify
them, in whole or in part. There may be a variance of not more than two percent
(2%) between the raw materials and piece goods that are being used in the WIP
and the finished goods resulting therefrom, which variance will be attributable
to ordinary and customary loss in the cutting and assembly of goods.

                                      -23-
<PAGE>

         D.    "Backlog" Orders.
               ----------------

         Seller represents and warrants that annexed as SCHEDULE 8.5 is a full
and accurate list of all "backlog" orders of Topsville, together with their
related cost sheets. Seller represents and warrants that true and complete
copies of such orders have been delivered to Buyer prior to Closing. Seller
represents and warrants that none of such orders has been cancelled or modified,
in whole or in part, that Topsville will not make any cancellation or
modification, in whole or in part, and that none of the customers of those
orders has indicated that it intends to cancel or modify them, in whole or in
part. Seller further represents and warrants that the orders set forth on
SCHEDULE 8.5 will generate post-Closing receivables of at least $21 million at
the Prescribed Margin Level and that all of those receivables will be free of
any Lien except for such Lien as Buyer, and only Buyer, will have as assignee of
the Factoring Agreement.

         E.    Piece Goods and Raw Materials.
               -----------------------------

         Seller represents and warrants that annexed as SCHEDULE 8.6 is a full
and accurate list of all piece goods and raw materials that are owned by
Topsville and are not part of SCHEDULE 8.2.

         F.    Protection of Goodwill and Value.
               --------------------------------

               i)     The Purchase Price was arrived at with the understanding
that the value of the Shares, and the interest that they represent, will be
severely and irreparably damaged by the possibility that customers of Topsville
may do business with Persons, other than Buyer, with whom Seller has some
connection. In order to avoid such a possibility, for the period set forth in
subdivision (iii), Seller agrees not to engage in any of the following
activities:

                                      -24-
<PAGE>

                      (a)    provide direct or indirect financing to any Person
who is engaged in the manufacture, sale, distribution or marketing of children
or infants' apparel in the United States;

                      (b)    have any direct or indirect ownership or equity
interest in any Person who is engaged in the manufacture, sale, distribution or
marketing of children or infants' apparel in the United States;

                      (c)    directly or indirectly provide consulting services
or other assistance to any Person who is engaged in the manufacture, sale,
distribution or marketing of children or infants' apparel in the United States;

                      (d)    be directly or indirectly employed by any Person
who is engaged in the manufacture, sale, distribution or marketing of children
or infants' apparel in the United States;

                      (e)    directly or indirectly solicit or induce any Person
to cease being a customer of Buyer or to diminish its purchases from Buyer;

                      (f)    directly or indirectly solicit or induce any Person
to become a children or infants' apparel customer of, or to increase its
purchases of children or infants' apparel from, any Person other than Buyer.

               ii)    The restrictions set forth in subdivision (i)(b) of this
Section "F" shall not apply in a situation in which the "ownership or equity
interest" consists solely of shareholder status in a publicly-held and
publicly-traded company, but only if all of the following conditions to such an
exemption are met: (1) the aggregate shareholdings of both Seller and the
members of his family (to the second degree of kinship) do not exceed five (5%)
percent, (2) no member of Seller's family (to the second degree of kinship) is
an officer, director or executive employee of the publicly-held and
publicly-traded company, and (3) none of subdivisions (a), (c), (d), (e) or (f)
of this Section "F" is applicable to the situation.

               iii)   The restrictions set forth in subdivision (i) of this
Section "F" shall apply until six (6) months after the termination of the

                                      -25-
<PAGE>

Consulting Agreement (as the same may be extended or renewed), irrespective of
why or by whom the Consulting Agreement is terminated. Notwithstanding the
immediately preceding sentence, if the Consulting Agreement is terminated within
one year after the Closing Date, Buyer may, at its option, continue to impose
the restrictions set forth in subdivision (i) of this Section "F" until eighteen
(18) months after the Closing Date, but only if, during that 18-month period,
Buyer is making the payments that are required to be made to the consultant
pursuant to the Consulting Agreement (except for allowable offsets against those
payments). This reference to making payments during the said 18-month period
shall not be construed as relieving Buyer from its respective financial
obligations under the Consulting Agreement for the full duration of the initial
30-month term of that agreement, except that Buyer shall be relieved from those
obligations if the Consulting Agreement is rightfully terminated by it pursuant
P. P. 5-6 of the Consulting Agreement. If Buyer does not exercise the aforesaid
option, or if the option is exercised but the payments that are necessary for
its effectiveness are not made, the aforesaid six-months-after-termination-of-
the-Consulting-Agreement period shall apply.

         G.    Hiring Restrictions.
               -------------------

               i)     As a further inducement to Buyer to pay the Purchase
Price, Seller agrees that, subject to the limited exceptions set forth in
subdivision (vi), until five (5) years after the termination of the Consulting
Agreement (as the same may be extended or renewed, and irrespective of why or by
whom the Consulting Agreement is terminated), he will not engage in any of the
following activities:

                      (a)    provide direct or indirect financing to any Person
(other than Buyer, MNNI, Topsville or JGSL) who hires or engages a Restricted
Person after the Closing;

                      (b)    have any direct or indirect ownership or equity
interest in any Person (other than Buyer, MNNI, Topsville or JGSL) who hires or
engages a Restricted Person after the Closing;

                                      -26-
<PAGE>

                      (c)    directly or indirectly provide consulting services
or other assistance to any Person (other than Buyer, MNNI, Topsville or JGSL)
who hires or engages a Restricted Person after the Closing, if such consulting
services or assistance relate to any product or service with which the
Restricted Person is involved;

                      (d)    be directly or indirectly employed by any Person
(other than Buyer, MNNI, Topsville or JGSL) who hires or engages a Restricted
Person after the Closing, if such employment relates to any product or service
with which the Restricted Person is involved;

                      (e)    solicit or induce any Restricted Person to cease
being an employee or sales representative of Buyer, MNNI, Topsville or JGSL.

               ii)    "Restricted Person" means (i) any employee, consultant or
sales representative of Buyer, MNNI, Topsville or JGSL who, immediately after
Closing, is or previously was an employee, consultant or sales representative of
MNNI, Topsville or JGSL or (ii) any person who is listed on SCHEDULE 8.7. After
the Closing, Buyer shall have the unilateral right, on notice to Seller, to add
persons from among the following to SCHEDULE 8.7: (i) employees, consultants
(other than Natoosh, LLC) or sales representatives of Buyer, MNNI, Topsville or
JGSL who became such after the Closing and/or (ii) employees, consultants (other
than Natoosh, LLC) or sales representatives of Buyer, MNNI, Topsville or JGSL
with whom Seller has contact during the term of the Consulting Agreement.

               iii)   The restrictions of this Section "G" shall apply (1)
irrespective of whether the Restricted Person was solicited by Seller or the
Person(s) referred to in subdivisions (i)(a) through (i)(d), and (2)
irrespective of why the Restricted Person's employment or engagement by Buyer,
MNNI, Topsville or JGSL terminated.

                                      -27-
<PAGE>

               iv)    The restriction set forth in subdivision (i)(b) of this
Section "G" shall not apply in a situation in which the "ownership or equity
interest" consists solely of shareholder status in a publicly-held and
publicly-traded company, but only if all of the following conditions to such an
exemption are met: (1) the aggregate shareholdings of both Seller and the
members of his family (to the second degree of kinship) do not exceed five (5%)
percent, (2) neither Seller nor any member of his family (to the second degree
of kinship) is an officer, director or executive employee of the publicly-held
and publicly-traded company, and (3) none of subdivisions (a), (c), (d) or (e)
of this Section "G" is applicable to the situation.

               v)     The restrictions of this Section "G" shall not apply to a
Restricted Person once that Restricted Person's employment or engagement by
Buyer, MNNI, Topsville and/or JGSL has terminated for at least two (2) years.

               vi)    During the otherwise-applicable restriction period,
Seller's restrictions with respect to the following Restricted Persons are
modified as set forth in this subdivision (vi).

                      1.     Maurice Amiel shall be entitled to perform work for
Seller personally and in connection with his companies, but only if such work
does not interfere with the performance of Maurice Amiel's work, duties and
responsibilities for MNNI, Topsville, JGSL or Buyer.

                      2.     Seller may engage in business ventures with Dana
Rader, but only if such ventures do not involve or relate to the manufacture,
sale, distribution or marketing of children or infants' apparel in the United
States.

                      3.     Seller may engage in business ventures with Leonard
Jaffee, but only if such ventures do not involve or relate to the manufacture,
sale, distribution or marketing of children or infants' apparel in the United
States.

                      4.     Seller may engage in business ventures with Lori
Nitzberg, even if such ventures involve or relate to the manufacture, sale,
distribution or marketing of children or infants' apparel, but not during the
period that Seller is prohibited from engaging in such ventures pursuant to
Article VIII, Section F.

                                      -28-
<PAGE>

                      5.     Seller may use the professional services of
attorneys or accountants who represented MNNI, Topsville or JGSL, but only if
that will not conflict with those Restricted Persons' duties to MNNI, Topsville
or JGSL, including, but not limited to, their responsibilities in respect of the
litigation referenced in SCHEDULE 4.7.

         H.    Adjustments.
               -----------

               i)     It is acknowledged that Buyer is not doing a manual count
or analysis of Topsville's inventory, WIP or raw materials before the Closing.
To the extent, if any, that a post-Closing count or analysis indicates that
SCHEDULE 8.4 (subject to allowable variance) or SCHEDULE 8.6 does not accurately
reflect those items, the Purchase Price will, after due consultation by the
parties about any inaccuracies, be modified accordingly. In connection with such
consultation, Seller shall be afforded an opportunity to review the pertinent
business records of Topsville to verify the position taken by Buyer. If,
notwithstanding being afforded an opportunity for such review, Seller is unable
or unwilling to agree on the amount of adjustment that should be made because of
inaccuracies in SCHEDULE 8.4 or SCHEDULE 8.6, and if such dispute continues for
at least thirty (30) days, the issue of "What amount of adjustment should be
made because of inaccuracies in SCHEDULE 8.4 or SCHEDULE 8.6?" -- and only that
issue -- shall be submitted to an independent accounting firm, jointly selected
by Buyer and Seller, whose (i) determination shall be final and binding and (ii)
cost shall be jointly borne by Buyer and Seller. The provisions of this
subdivision regarding submission to an independent accounting firm shall be
enforced in accordance with Article 76 of the New York Civil Practice Law and
Rules. In the event of undue delay by Seller in conducting the aforesaid review,
in selecting an independent accounting firm, or in cooperating with or
participating in that independent accounting firm's proceedings, Buyer may
unilaterally make an adjustment, which unilateral adjustment shall be subject to
correction by the independent accounting firm, if and when its determination is
made.

                                      -29-

<PAGE>

               ii)    In calculating the Purchase Price, Buyer is assuming that
all actual, potential and contingent liabilities and assets of Topsville and
JGSL have been accurately recorded in accordance with GAAP and fully disclosed.
To the extent, if any, that post-Closing events indicate otherwise, the Purchase
Price will, after due consultation by the parties about any inaccuracies, be
modified down (because of liabilities) or up (because of assets) accordingly.
If, notwithstanding being afforded an opportunity for such consultation, Seller
is unable or unwilling to agree on the amount of adjustment that should be made,
and if such dispute continues for at least ten (10) business days, Buyer may
unilaterally make an adjustment, which unilateral adjustment shall be subject to
correction by legal action.

               iii)   Certain bills of Topsville that would reduce the formula
by which the Purchase Price was calculated may not be received or booked by
Topsville until after the Closing Date. Once they are properly booked, the
amount thereof will be credited towards the next installment due under the Note.
The basis for such credit will be reported to Seller, and Seller shall be
provided with appropriate documentation with respect thereto.

         I.    Payment of Certain Liabilities.
               ------------------------------

               i)     Except as set forth in subdivision (ii), and except for
those accounts payable, prospective lease payments and accrued expenses that are
set forth in SCHEDULE 8.8, all liabilities of MNNI, Topsville and JGSL that
accrued prior to the Closing Date or are attributable to pre-Closing events
(e.g., taxes and customs obligations [even if assessed after Closing], but in
the case of taxes only if attributable to pre-Closing taxable periods or the
pre-Closing portion of taxable periods that include the Closing Date) shall be
the responsibility of Seller. Seller shall pay (or otherwise fully eliminate)
all of those liabilities at or prior to Closing. This includes, but is not
limited to, any inter-company liabilities (including the one with Topsville
Brands, Inc.) and the 9.65% note payable to a former shareholder. Buyer may, at
its option, draw checks for any liabilities which are not so paid or eliminated
by Seller out of the sum that would otherwise be paid to Seller under Article

                                      -30-
<PAGE>

II, Section B. To the extent, if any, that Buyer gives any of the persons listed
on SCHEDULE 4.8 additional post-Closing vacation days because of unused
pre-Closing vacation days, Buyer shall not deduct the cost of such additional
post-Closing days from the Purchase Price. Seller shall have the right, at his
sole cost and expense, to contest any taxes for which he is liable hereunder,
before or after such taxes are paid, in the name of the entity against whom such
taxes are asserted, and Buyer shall cause each such entity to take such actions
and to provide such Form 2848 and similar tax powers of attorney as are
reasonably necessary to enable Seller to undertake, control the conduct of and
make all decisions with respect to such contest. If Seller successfully contests
any such taxes after the taxes have been paid, Buyer shall pay to Seller the
taxes recovered in that contest, but only to the extent that such taxes were
previously paid by Seller directly or by way of offset, recoupment or adjustment
of the Purchase Price

               ii)    The following pre-Closing liabilities of Topsville or JGSL
shall, in accordance with the payment schedule set forth in SCHEDULE 8.9, be
paid by Topsville or Buyer after the Closing. The fact that such payments will
be made does not affect the calculation of the Purchase Price: $67,000 that is
due Max Nitzberg; $138,425 that is due Dana Rader; $25,000 that is due Maurice
Amiel. In the event that Seller pays any of those liabilities at or before
Closing, the payment that SCHEDULE 8.9 otherwise required to the payee(s) to
whom Seller made such payment shall, instead, be made to Seller by Topsville or
Buyer, but only on the same installment schedule that SCHEDULE 8.9 prescribed.

               iii)   SCHEDULE 8.10 sets forth the particulars regarding vendors
of Topsville with whom Seller made arrangements whereby Topsville could take, as
a credit towards the amount due them, chargebacks that Topsville's customers
make because of defects which are attributable to goods provided by those
vendors. To the extent, if any, that, because of such arrangements, (i)
Topsville ends up paying a listed vendor a sum that is less than its recorded
payable and (ii) the "savings" to Topsville in that regard exceed the amount of
corresponding chargebacks made by Topsville's customers, such "excess savings"
shall be paid to Seller.

                                      -31-
<PAGE>

         J.    Mistaken Payments Or Deductions; Buyer's Rights To Offsets And/Or
               Recoupment.
               -----------

               i)     In the event any customer or other debtor of Topsville
makes payment to Seller (or for Seller's benefit, e.g., to Capital) or makes a
chargeback, deduction or other claim of any nature whatsoever against MNNI,
Topsville, JGSL or Buyer because of (i) a transaction that occurred prior to the
Closing Date or (ii) goods that were purchased from Topsville prior to the
Closing Date, Buyer shall (without limitation of its rights or remedies) have
the right to offset and/or recoup the amount of such payment, chargeback,
deduction or claim against/from any money that it owes Seller and/or the
Consultant, including, but not limited to, payments due under or pursuant to the
Note, the Consulting Agreement and/or the Factoring Assignment.

               ii)    In the event a breach of any of Seller's representations,
warranties or obligations under this agreement causes MNNI, Topsville, JGSL or
Buyer to incur any out of pocket loss, damage or expense, Buyer shall (without
limitation of its rights or remedies) have the right to offset and/or recoup the
amount of such loss, damage and expense against/from any money that its owes
Seller and/or the Consultant under the Consulting Agreement, including, but not
limited to, payments due under or pursuant to the Note, Consulting Agreement
and/or the Factoring Assignment.

               iii)   In the event that any claim is made against Buyer, MNNI,
Topsville or JGSL because of liabilities of MNNI, Topsville or JGSL that are the
responsibility of Seller under Article VIII, Section I(i), Buyer shall (without
limitation of its rights or remedies) have the right to offset and/or recoup the
amount of such claim against/from any money that its owes Seller and/or the
Consultant under the Consulting Agreement, including, but not limited to,
payments due under or pursuant to the Note, Consulting Agreement and/or the
Factoring Assignment.

               iv)    In the event Seller fails to make any adjustment to the
Purchase Price that is reasonably warranted pursuant to Article VIII, Section H,
Buyer shall (without limitation of its rights or remedies) have the right to
offset and/or recoup the amount of the adjustment that is reasonably warranted

                                      -32-
<PAGE>

against/from any money that they it owes Seller and/or the Consultant under the
Consulting Agreement, including, but not limited to, payments due under or
pursuant to the Note, the Consulting Agreement and/or the Factoring Assignment.

               v)     Buyer shall notify Seller of any mistaken payment,
chargeback or deduction that gives rise to a right of offset or recoupment under
subdivision (i) within ten (10) business days after the actual making of such
payment, or the actual taking of such chargeback or deduction, has become known
to Buyer. If Seller does not promptly cause the mistaken payment, chargeback or
deduction to be rectified, Buyer shall proceed with the offset or recoupment.

               vi)    Buyer shall notify Seller of any claim that gives rise to
a right of offset or recoupment under subdivision (i), any situation that gives
rise to a right of offset or recoupment under subdivision (ii), any loss, damage
or expense that gives rise to a right of offset or recoupment under subdivision
(ii), or any claim that gives rise to a right of offset or recoupment under
subdivision (iii) within a reasonable time after the existence of same has
become known to Buyer. If Seller does not promptly cause the loss or damage to
be made whole, or the expense (to the reasonable extent of its amount) to be
made whole, or, in the case of a claim or situation which has not yet resulted
in loss or damage, does not promptly cause Buyer to be fully indemnified and
adequately protected against such claim or situation, Buyer shall proceed with
the offset or recoupment.

               vii)   The amount of any mistaken payment that is made to Seller
or for Seller's benefit shall not be deemed the property of its recipient
(whether that be Seller, Capital or anyone else), but, rather, shall be deemed
property held in trust by that recipient for the benefit of Topsville (but need
not be segregated by the recipient for such purpose), and the recipient shall
promptly pay over the amount of such mistaken payment to Topsville. The
Factoring Assignment includes an undertaking by Capital in respect of mistaken
payments.

                                      -33-
<PAGE>

               viii)  In the event the basis for an adjustment, offset and/or
recoupment or other remedy of Buyer has been rectified, the adjustment, offset
and/or recoupment shall, to the extent of such rectification, be reversed, and,
if such reversal requires payment, such payment shall be made within ten (10)
business days. In that regard, the fact that Buyer has unilaterally made an
adjustment, offset and/or recoupment shall not preclude Seller from contesting
the basis for such adjustment, offset and/or recoupment, including contesting
the same with a third party whose conduct constituted the basis for the
adjustment, offset and/or recoupment. Any such contest shall be at Seller's sole
cost and expense. Buyer shall provide reasonable cooperation to Seller (at
Seller's expense) in Seller's contest with such a third party, including such
reasonable access to Buyer's, MNNI's and Topsville's personnel, books and
records as may be necessary for that contest. To the extent that requirements of
law make it necessary for Seller to pursue such contest with a third party in
the name of MNNI, Topsville or JGSL, Buyer shall not unreasonably withhold its
consent from Seller pursuing such contest in the name of MNNI, Topsville or
JGSL, all, however, at Seller's sole cost and expense.

         K.    Indemnification of Seller. SCHEDULE 8.11 sets forth the extent,
if any, to which Topsville, JGSL or Buyer will indemnify Seller.

         L.    Crediting of Insurance Proceeds. To the extent that Seller or
Buyer actually collects insurance proceeds which cover all or part of a
liability that Seller or Buyer has to the other pursuant to this Agreement, the
amount of such collected proceeds shall be credited towards that liability.
Nothing contained herein shall be construed as imposing an obligation on Seller
or Buyer to pursue such an insurance claim.

         M.    Seller's Redemption Agreement.
               -----------------------------

               (a)    Seller represents and warrants that, prior to the signing
of this Agreement, Seller, MNNI and Topsville entered into and consummated a
redemption agreement, dated January 10, 2002 (the "Redemption Agreement")
pursuant to which MNNI acquired from Seller (i) all of the shares of Topsville

                                      -34-
<PAGE>

that MNNI did not previously own (free of all liens, encumbrances and claims
upon such shares) and (ii) certain shares of MNNI (free of all liens,
encumbrances and claims upon such shares), which Redemption Agreement also
provided for MNNI to make the distributions referred to in Article VIII, Section
B. Seller represents and warrants that, prior to the signing of this Agreement,
(i) Seller has become the owner of 100% of the outstanding shares of MNNI (free
of all liens, encumbrances and claims upon such shares) and (ii) MNNI has become
the owner of 100% of the outstanding shares of Topsville (free of all liens,
encumbrances and claims upon such shares). Buyer was not and is not a party to
the Redemption Agreement. Seller represents and warrants that in no way shall
Buyer's rights and interests as owner of the Shares following the Closing (free
of all liens, encumbrances and claims upon such shares) or MNNI's rights and
interests as owner of the Topsville Shares (free of all liens, encumbrances and
claims upon such shares) be adversely affected by the performance,
non-performance or manner of performance of the Redemption Agreement by any
party to that agreement. Seller shall fully indemnify Buyer against any such
adverse effect, as well as against any and all claims that may be made against
Buyer because of the Redemption Agreement, including, but not limited to, any
claims for tax liabilities which relate to the Redemption Agreement.

               b)     Article VIII, Section B sets forth distributions that the
parties to the Redemption Agreement have provided are to be made to Seller
pursuant to that agreement.

               c)     Notwithstanding that the Closing is deemed effective as of
the end of business on the Closing Date, Seller shall, by his signature to this
Agreement, and immediately upon such signing, be deemed to have done the
following: (i) immediately resigned as an officer and director of MNNI and
Topsville, (ii) as the-then sole shareholder of MNNI, which, in turn, is
the-then sole shareholder of Topsville, immediately elected Robert Chestnov as
president of both MNNI and Topsville. Seller acknowledges that, as president,
only Robert Chestnov shall have the power and authority to take significant
corporate acts on behalf of Topsville until such time as the Closing becomes
effective. Immediately following the effectiveness of the Closing, Buyer, as
the-then sole shareholder of MNNI, shall have the exclusive right to elect (or
control the election) of such persons as it, in its sole discretion, chooses to
be the officers and directors of MNNI and its subsidiaries.

                                      -35-
<PAGE>

                                   ARTICLE IX.
                                  MISCELLANEOUS

         A.    Further Assurances. From time to time after the Closing Date,
upon the reasonable request of Buyer, Seller shall, at his own cost and expense,
execute and deliver or cause to be executed and delivered such further
instruments of conveyance, assignment and transfer and take such further action
as Buyer may reasonably request in order more effectively to sell, assign,
convey, transfer, possess, use and/or record title to the Shares. Seller agrees,
at his own cost and expense, to cooperate with Buyer in all reasonable respects
to assure to Buyer the continued title to, use and possession of the Shares in
the condition and manner contemplated by this Agreement.

         B.    Survival. The Closing shall not be deemed to extinguish any
representations, warranties or other agreements contained herein which, by their
nature or purpose, should survive the Closing. The transactions contemplated by
this Agreement shall survive any dissolution, merger or consolidation of Buyer
or Seller and shall bind the legal representatives, assigns and successors of
Buyer and Seller.

         C.    Entire Agreement; Amendment; and Waivers. This Agreement and the
documents that are to be executed and delivered pursuant hereto constitute the
entire agreement between the parties pertaining to the subject matter hereof,
and supersede all prior and contemporaneous agreements, understandings,
negotiations and discussions of the parties, whether oral or written. This
Agreement may not be altered, modified, terminated or discharged except by a
writing signed by the party against whom such alteration, modification,
termination or discharge is sought to be enforced. The failure (whether or not
knowing and whether or not prolonged) to take action against a breach or default
under this Agreement shall not be construed as a waiver of the right to take
action against such or a similar breach or default, it being understood that no
waiver shall be effective and no waiver is to be relied upon unless it be made
in a writing signed by the party charged with it.

                                      -36-
<PAGE>

         D.    Benefit; Assignment. This Agreement shall be binding upon and
inure to the benefit of and shall be enforceable by Buyer and Seller and their
respective successors and assigns. In no event shall any employee of MNNI,
Topsville or JGSL, or the aforesaid broker, Cohen, be deemed a third party
beneficiary of any provision of this Agreement.

         E.    Notices. All communications or notices required or permitted by
this Agreement shall be in writing and shall be deemed to have been given on the
date when personally delivered to an officer of the other party or when sent by
confirmed facsimile transmission to the number (and copy number) shown below;
or, if sent by commercial overnight delivery service, then one (1) business day
after being properly deposited for delivery by commercial overnight delivery
service, prepaid; or, if sent by U.S. mail, then three (3) business days after
being properly deposited in the United States mail, certified or registered
mail, postage prepaid, return receipt requested, and addressed as follows;
unless and until either of such parties notifies the other in accordance with
this Section of a change of address or change of facsimile number:

If to Buyer:             Jaclyn, Inc.
                         635-59th Street
                         West New York, New Jersey 07093
                         Attention: Robert E. Chestnov
                         Fax No.: (201) 868-6525

With a copy to:          Robert J. Kaplan, Esq.
                         15 Maiden Lane
                         New York, New York 10038
                         Fax No.: (212) 964-0867

If to Seller:            Mark Nitzberg
                         86 Rock Road West
                         Green Brook, New Jersey 08812
                         Fax No.: (908) 769-7230

                                      -37-
<PAGE>

With a copy to:          Philip Klein, Esq.
                         Klein & Liss
                         40 Park Avenue South
                         12th Floor
                         New York, New York 10016
                         Fax No.: (212) 683-7737


         F.    Counterparts; Headings. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement. The Section headings
are inserted for convenience of reference only and shall be disregarded in
interpreting this Agreement.

         G.    Severability. If any word, provision, clause or other part of
this Agreement, or the application thereof under certain circumstances, is held
invalid, or unenforceable, the remainder of this Agreement, or the application
of such word, provision, clause or other part under different circumstances,
shall not be affected thereby. In the event any word provision, clause or other
part of this Agreement shall be held invalid or unenforceable, it shall be
deemed modified, but only to the extent necessary to make it lawful. To effect
such modification, the said word, provision, clause or other part shall be
deemed deleted, added to and/or rewritten, whichever shall most fully preserve
the intentions of the parties as originally expressed herein.

         H.    Governing Law. This Agreement shall be governed by and
interpreted under the laws of the State of New York without regard to the
conflict of law principles thereof. Except to the limited extent provided in
Article VIII, Section H, Subdivision (i), any controversy arising out of or
relating to this Agreement, or any duty created thereby, shall be resolved
without a jury in a federal or state court located within the City of New York
(and/or in any appellate court therefrom) and in no other forum. The parties
consent to jurisdiction in such courts, waive any objection to such exclusive
venue, waive trial by jury, and agree that service of the summons to such
proceedings (and of any papers which may accompany it) shall be deemed
sufficient if made by certified mail, postage prepaid, addressed to the parties'
addresses as designated in or hereafter changed under Article IX, Section E.

                                      -38-
<PAGE>

Service by such method shall be deemed complete five (5) business days after
such mailing. Seller acknowledges that, without limiting or precluding other
appropriate remedies, the remedies of injunction and/or specific performance are
necessary and proper to enforce his obligations under Article IV, Section G,
Article VIII, Section F, Article VIII, Section G, and Article IX, Section A,
and, further, that, in the event a temporary injunction is obtained, Seller
waives the right to a bond.

         IN WITNESS WHEREOF, the parties have executed this Purchase and Sale
Agreement as of the day and year first above written.


                                            "BUYER"

                                            JACLYN, INC.

                                            By: /s/ ROBERT CHESTNOV
                                                --------------------------------
                                            Name: Robert Chestnov
                                                  ------------------------------
                                            Title: President
                                                  ------------------------------


                                            "SELLER"

                                            /s/ MARK NITZBERG
                                            ------------------------------------
                                            Mark Nitzberg

                                      -39-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.2
<SEQUENCE>5
<FILENAME>ex2_2.txt
<DESCRIPTION>EXHIBIT 2.2
<TEXT>

                                                                     EXHIBIT 2.2
                                                                     -----------

                              CONSULTING AGREEMENT
                              --------------------


         CONSULTING AGREEMENT, made the 10th day of January, 2002, by and
between NATOOSH, LLC, New Jersey limited liability company ("Consultant") and
MARK NITZBERG ("Provider"), on the one hand, and JACLYN, Inc. ("Jaclyn"), on the
other.

                                R E C I T A L S:
                                - - - - - - - -

         A.    Provider is the principal of Consultant.

         B.    Provider is the sole shareholder of Max N. Nitzberg, Inc.
("MNNI").

         C.    Pursuant to an agreement, dated January 10, 2002, between
Provider and Jaclyn (the "Purchase and Sale Agreement"), Jaclyn is acquiring,
from Provider, all of the outstanding shares of MNNI (the "Shares").

         D.    MNNI is the sole shareholder of Topsville, Inc. ("Topsville")
and, until the Closing of the Purchase and Sale Agreement, Provider will be the
president of Topsville.

         E.    In order to preserve, protect and realize the value of Jaclyn's
investment in MNNI and Topsville, and in the property, assets, business and
goodwill that the Shares represent, Jaclyn needs Consultant, by way of Provider,
to provide services and assistance in respect of the conduct of Topsville's
business after the Closing of the Purchase and Sale Agreement ("Consulting
Services").

         F.    Provider has agreed to personally provide the Consulting Services
on behalf of Consultant.

NOW, THEREFORE, it is agreed as follows:

1.       Definitions. Capitalized terms have the meanings ascribed to them by
this Consulting Agreement and/or by the Purchase and Sale Agreement.

2.       Consulting Services. From the Closing Date of the Purchase and Sale
Agreement and until June 30, 2004 (the "Consulting Period"), Consultant shall
provide such Consulting Services as Jaclyn shall, in the reasonable exercise of
its business judgment, from time-to-time request. The Consulting Services shall
be of a similar nature to the services that Provider provided to Topsville prior
to the Closing. The Consulting Services shall be provided by Provider
personally. In that regard, Provider shall (subject to reasonably excusable
absence due to illness or personal matters) devote, on the average, thirty-five
(35) work hours per week, forty-eight 48) weeks per calendar year, to the

                                      -1-
<PAGE>

performance of the Consulting Services. Provider shall, to the extent
practicable, coordinate the hours of the Consulting Services to coincide with
the regular business hours of Topsville. Except to the extent that they involve
travel, the Consulting Services shall, to the extent practicable, be rendered at
the current New York City offices of Topsville, or, if Topsville moves its
offices during the Consulting Period, then at such other location(s) in the
metropolitan New York City area as Jaclyn may reasonably request. Jaclyn shall
endeavor to provide an executive-type office for Provider to use in connection
with the performance of Consulting Services at the above location(s).

3.       Priority of Consulting Services. Except for the restrictions set forth
in the Purchase and Sale Agreement, Consultant and Provider may engage in other
business activities besides the Consulting Services, but only if such other
business activities (i) do not impinge upon or conflict with the coordinations
of hours and locations that are required by P. 3, (ii) do not impinge upon or
conflict with the travel requirements of P. 4, and (iii) do not become a
principal business activity of Consultant or Provider, it being understood and
agreed that, during the Consulting Period, Consultant's and Provider's priority
business activity and priority business responsibility shall be the Consulting
Services.

4.       Travel. The Consulting Services shall include such reasonable
business-related travel as Jaclyn deems advisable for or helpful to the conduct
of Topsville's business, including, but not limited to, domestic travel to
actual or potential customers of Topsville, foreign shopping trips (with or
without Topsville's customers) to aid in the selection or development of
product, and foreign trips which relate to the production of goods for
Topsville. Jaclyn shall reimburse Consultant for authorized air travel expenses
that it or Provider incurs in that regard, at the coach class rate for
business-related domestic travel and at the business class rate for
business-related travel outside North America. Jaclyn shall also reimburse
Consultant for other reasonable business-related travel and entertainment
expenses (documented and submitted for reimbursement) that it or Provider incurs
in that regard, in accordance with Provider's past practices when traveling on
Topsville-related business prior to the Closing. Reimbursement shall be made
within fourteen (14) days after the submission of properly documented vouchers
and expense records to Jaclyn. Consultant may, if the circumstances so warrant,
request a reasonable advance towards projected "on the ground" expenses that it
anticipates will be incurred in connection with reimbursable foreign travel
and/or business sample costs, and Jaclyn shall, after due consultation with
Consultant, provide a reasonable advance in that regard. Retention of any such
advance is subject to the same post-expense documentation support as
non-advanced reimbursable expenses.

                                      -2-
<PAGE>

5.       Termination for Cause.
         ---------------------

         (a) Provider shall use his best efforts to perform the Consulting
         Services with the same degree of diligence and aptitude that he used in
         performing similar services for Topsville prior to the Closing. If
         Provider fails to do so, or if Consultant or Provider fails to comply
         with any reasonable request or directive of Jaclyn regarding the
         performance of the Consulting Services, Jaclyn may give Consultant
         written notice of such failing and how it should be corrected (if
         capable of correction) or, if incapable of correction, how it should be
         prevented in the future. If, within thirty (30) days after such notice,
         Consultant and Provider do not substantially correct a noticed failing
         that is capable of correction (or repeat it thereafter), or, if such
         noticed failing is incapable of correction within that 30-day period,
         fail, within the 30-day period, to reasonably and diligently correct
         the noticed failing as soon as possible and/or prevent its
         reoccurrence, then Jaclyn may, at its option, terminate this Consulting
         Agreement. Termination by Jaclyn under such circumstances shall be
         deemed a permissible termination for cause. Nothing contained herein
         shall be construed (A) as precluding Consultant from contesting the
         correctness of an assertion by Jaclyn (i) that Provider has not
         performed with the requisite degree of diligence and aptitude, (ii)
         that Consultant or Provider has failed to comply with a reasonable
         request or directive, (iii) that such failures have not been timely and
         substantially corrected (or, where applicable, that reasonable and
         diligent measures were not timely taken), or (iv) that such failures
         have been repeated, or (B) as precluding Jaclyn from opposing any such
         contest. In the event of legal proceedings concerning such a contest,
         the prevailing party in such legal proceedings shall recover from the
         other its reasonable costs and expenses in such legal proceedings,
         including its reasonable attorneys' fees. In the event Jaclyn is the
         prevailing party, it shall recover such costs, expenses and attorneys'
         fees from Consultant and Provider, jointly and severally, even if only
         one of Consultant or Provider made or opposed the contest.

         (b) If Consultant has knowingly made any materially false
         representation or warranty in the Purchase and Sale Agreement, Jaclyn
         may, at its option, terminate this Consulting Agreement. Termination by
         Jaclyn under such circumstances shall be deemed a permissible
         termination for cause. Termination by Jaclyn pursuant to the option set
         forth in this subdivision (b) can only be made within thirty (30) days
         after Jaclyn learns that a materially false representation or warranty
         was made to it; provided, however, that the 30-day period for
         exercising the option shall re-start in the event Jaclyn learns that a
         materially false representation or warranty, not previously known to
         it, was made to it.

         (c) If, in the course of performing the Consulting Services, Consultant
         knowingly makes any materially false statement to Jaclyn regarding
         something that materially impacts upon the business of Topsville, or
         knowingly conceals or in bad faith knowingly withholds from Jaclyn
         information that materially impacts upon the business of Topsville,
         Jaclyn may, at its option, terminate this Consulting Agreement.
         Termination by Jaclyn under such circumstances shall be deemed a
         permissible termination for cause.

         (d) If Jaclyn, without (i) terminating this Consulting Agreement as
         permitted in P. P. 5-6 or (ii) exercising its rights of setoff and/or
         recoupment under the Purchase and Sale Agreement, fails to pay

                                      -3-
<PAGE>

         Consultant an amount that is rightfully due Consultant under this
         Consulting Agreement, Consultant shall give Jaclyn written notice of
         such payment default. If, within thirty (30) days after such notice,
         Jaclyn does not correct the noticed default, Consultant may, at its
         option, terminate this Consulting Agreement within ten (10) business
         days thereafter. Termination by Consultant under such circumstances
         shall be deemed a permissible termination for cause. Nothing contained
         herein shall be construed (A) as precluding Jaclyn from contesting the
         correctness of an assertion by Consultant (i) that Jaclyn has failed to
         pay an amount that is rightfully due or (iii) that such failure was not
         timely corrected, or (B) as precluding Consultant from opposing any
         such contest. In the event of legal proceedings concerning such a
         contest, the prevailing party in such legal proceedings shall recover
         from the other its reasonable costs and expenses in such legal
         proceedings, including its reasonable attorneys' fees. In the event
         Jaclyn is the prevailing party, it shall recover such costs, expenses
         and attorneys' fees from Consultant and Provider, jointly and
         severally, even if only one of Consultant or Provider made or opposed
         the contest.

         (e) If Jaclyn terminates this Consulting Agreement because of a
         material breach by Provider of the Purchase and Sale Agreement, or if
         Consultant terminates this Consulting Agreement because of a material
         breach by Jaclyn of the Purchase and Sale Agreement, and if the party
         asserting such material breach is ultimately sustained in that
         assertion by a judgment, final as to all appeals, then the termination
         of this Consulting Agreement by such party shall be deemed a
         permissible termination for cause.

         (f) Consultant specifically agrees that its rights to any payments
         under this Consulting Agreement are subject to Jaclyn's rights of
         setoff and/or recoupment under the Purchase and Sale Agreement and
         that, given the overall nature of the transactions among the parties,
         Jaclyn's exercise of rights of setoff and/or recoupment is warranted.

6.       Termination for Lack of Business. If, during any consecutive twelve
(12) month period following the Closing Date, Topsville does not actually
receive orders from its customers for the purchase of apparel (which orders are
accounted for substantially in the form and manner of SCHEDULE 8.5 to the
Purchase and Sale Agreement) in the amount of twenty-one million dollars
($21,000,000) or greater, Jaclyn may, at its option, terminate this Consulting
Agreement. Termination by Jaclyn under such circumstances shall be deemed a
permissible termination for lack of business. The fact that Jaclyn is entitled
to terminate this Consulting Agreement under such circumstances shall not be
construed as giving Jaclyn the right to seek damages from Consultant or Provider
for such lack of business.

7.       Base Compensation.
         -----------------

         (a) For the Consulting Services, Jaclyn shall pay Consultant a "base
         compensation" of thirty-three thousand eight hundred fifty-four and
         17/100 dollars ($33,854.17) for each calendar month of the Consulting
         Period, except that, for the month of January 2002 only, the "base
         compensation" shall be $33,854.17 plus the amount of cash in bank that

                                      -4-
<PAGE>

         Topsville, MNNI and JGSL have immediately following the Closing. If
         this Consulting Agreement is (i) wrongfully terminated by Consultant or
         (ii) rightfully terminated by Jaclyn, "base compensation" shall only be
         paid to the date of termination, and, if such termination occurs before
         the end of a calendar month, the "base compensation" for that month
         shall be prorated accordingly.

         (b) The said monthly "base compensation" shall be paid on the fifteenth
         (15th) day of the calendar month, or if the fifteenth is not a business
         day, then on the first business day after the fifteenth. The first such
         payment shall be made on January 15, 2002, for the first calendar month
         of the term of the Consulting Period, even though Consultant is not
         providing Consulting Services for the entirety of that calendar month.
         Jaclyn shall not be entitled to any credit or offset for the days of
         that calendar month which preceded the beginning of the Consulting
         Period, it being the intention of the parties that the payment for that
         full calendar month constitutes a bonus payment. Unless this Consulting
         Agreement is (i) wrongfully terminated by Consultant or (ii) rightfully
         terminated by Jaclyn, the last such payment shall be made on June 15,
         2004. If this Consulting Agreement is wrongfully terminated by
         Consultant or rightfully terminated by Jaclyn before the end of a
         calendar month, but after the date that the "base compensation" payment
         for that month was made, Consultant shall promptly refund the
         overpayment for that month, pro-rata.

8.       Bonus Payments. In addition to the aforesaid "base compensation",
Jaclyn shall, under the conditions stated in thisP. 8, pay Consultant the
following "bonus" amounts:

         (a) If, for the period from July 1, 2002 through June 30, 2003, the Net
         Sales of Topsville at the Prescribed Margin Level exceed thirty-two
         million five hundred thousand dollars ($32,500,000), Consultant shall,
         on July 31, 2003, receive a bonus payment equal to four percent (4%) of
         those Net Sales at the Prescribed Margin Level which exceeded $32.5
         million.

         (b) If, for the period from July 1, 2003 through June 30, 2004, the Net
         Sales of Topsville at the Prescribed Margin Level exceed thirty-two
         million five hundred thousand dollars ($32,500,000), Consultant shall,
         on July 31, 2004, receive a bonus payment equal to four percent (4%) of
         those Net Sales at the Prescribed Margin Level which exceeded $32.5
         million.

         (c) If, for the applicable period under subdivision (a) or (b),
         Topsville's Net Sales exceed $32.5 million, and the overall profit
         margin is less than the Prescribed Margin Level (i.e., 22.5%) but is at
         least 20.5%, Consultant shall still receive a bonus payment, but a
         reduced one, in accordance with the following schedule:

               (i)    If the overall profit margin is at least 21.5% but is less
         than 22.5%, the bonus percentage shall be reduced from four percent
         (4%) to two percent (2%).

               (ii)   If the overall profit margin is at least 20.5% but is less
         than 21.5%, the bonus percentage shall be reduced from four percent
         (4%) to one percent (1%).

                                      -5-
<PAGE>

               (iii)  There will be no bonus payment if Net Sales do not exceed
         the applicable threshold (i.e., $32.5 million) or if the overall profit
         margin is not at least 20.5%.

         (d) If, prior to June 30, 2003, this Consulting Agreement is terminated
         (i) by Consultant (whether pursuant P. 5(d) or otherwise) or (ii) by
         Jaclyn as provided in P. P. 5-6, the amount of the bonus payment, if
         any, that is payable on July 31, 2003, shall be prorated in accordance
         with that amount of the period July 1, 2002 - June 30, 2003 which
         preceded termination. If, prior to June 30, 2003, this Consulting
         Agreement is terminated (i) by Consultant (whether pursuant P. 5(d) or
         otherwise) or (ii) by Jaclyn as provided in P. P. 5-6, Consultant shall
         receive no bonus payment (or part thereof) that might otherwise be
         payable on July 31, 2004.

         (e) If, prior to June 30, 2004, this Consulting Agreement is terminated
         (i) by Consultant (whether pursuant P. 5(d) or otherwise) or (ii) by
         Jaclyn as provided in P. P. 5-6, the amount of the bonus payment, if
         any, that is payable on July 31, 2004, shall be prorated in accordance
         with that amount of the period July 1, 2003 - June 30, 2004 which
         preceded termination.

9.       Reservation of Rights.
         ---------------------

         (a) Except as provided in P. P. 5(d) and (e), none of the references to
         this Consulting Agreement being terminated by Consultant shall be
         construed as giving Consultant any right or option to terminate this
         Consulting Agreement prior to the end of the Consulting Period. If
         Consultant wrongfully terminates this Consulting Agreement, then, in
         addition to losing "base compensation" and "bonus compensation" as
         aforesaid, Consultant and Provider shall be jointly and severally
         liable for damages and/or such other remedies as law or equity may
         afford to Jaclyn for such a breach. If Consultant purports to terminate
         this Consulting Agreement pursuant to P. P. 5(d) or (e) and Jaclyn
         contests such conduct and is the prevailing party thereon, then, in
         addition to losing "base compensation" and "bonus compensation" as
         aforesaid, Consultant and Provider shall be jointly and severally
         liable for damages and/or such other remedies as law or equity may
         afford to Jaclyn for such conduct, including, but not limited to,
         reasonable attorneys' fees as provided herein.

         (b) Jaclyn's right to terminate this Consulting Agreement for cause as
         provided in P. 5 shall not be construed as giving Consultant any right
         or option to act in a manner which permits such termination. If
         Consultant does so act, then, in addition to losing "base compensation"
         and "bonus compensation" as aforesaid, Consultant and Provider shall be
         jointly and severally liable for damages and/or such other remedies as
         law or equity may afford to Jaclyn for such conduct, including, but not
         limited to, reasonable attorneys' fees as provided herein.

                                      -6-
<PAGE>

         (c) Except as provided in P. P. 5-6, Jaclyn shall not have any right or
         option to terminate this Consulting Agreement prior to the end of the
         Consulting Period. If Jaclyn wrongfully terminates this Consulting
         Agreement, it shall be liable for damages, which shall be calculated as
         follows: (1) "base" and/or "bonus" compensation that was due but unpaid
         as of that termination date, plus (2) "base" and/or "bonus"
         compensation for the period after that termination date and up to the
         date that this Consulting Agreement would otherwise have terminated
         (the "Future Period"), (3) less all money that Provider (or a company
         of which Provider is principal) earns or will earn during the Future
         Period as an employee or for services rendered as an independent
         contractor.

10.      Limit on Recovery of Attorneys' Fees. It is only in the events
specified in P. P. 5(a) and (d) that the prevailing party shall be entitled to
recover all of its reasonable attorneys' fees. In all other instances in which
there is litigation concerning any alleged wrongful termination of this
Consulting Agreement or any alleged breach of this Consulting Agreement, the
prevailing party shall also be entitled to recover its reasonable attorneys'
fees, but only up to an aggregate maximum of twenty-five thousand dollars
($25,000). In the event Jaclyn is the prevailing party in such litigation, it
shall recover such attorneys' fees from Consultant and Provider, jointly and
severally, even if only one of Consultant or Provider was party to the
litigation.

11.      Stock Option.
         ------------

         (a) Jaclyn hereby grants to Consultant an option (the "Option") to
         purchase an aggregate of one hundred twenty thousand (120,000) shares
         of the common stock, $1.00 par value per share, of the Jaclyn ("Common
         Stock") at an exercise price which shall be equal to the closing price
         of that stock on the last date before the date of this Consulting
         Agreement on which that stock is reported (in the Wall Street Journal
         or similarly reputable publication) as having been publicly traded on
         the American Stock Exchange, such price being the fair market value (as
         hereinafter defined) per share of Common Stock on the date hereof. The
         Option is a nonstatutory stock option and is not intended to constitute
         an incentive stock option within the meaning of Section 422 of the
         Internal Revenue Code of 1986, as amended (the "Code").

         (b) The term of the Option shall be seven (7) years. Subject to earlier
         termination as provided in thisP. 11, the Option shall be exercisable
         as to forty thousand (40,000) shares of Common Stock on the date of
         this Consulting Agreement (the "First Tranche"), as to an additional
         forty thousand (40,000) shares of Common Stock on the first anniversary
         of that date (the "Second Tranche") and as to the remaining forty
         thousand (40,000) shares of Common Stock on the second anniversary of
         that date (the "Third Tranche"). The First Tranche, the Second Tranche
         and the Third Tranche are each sometimes hereinafter referred to herein
         as a "Tranche" and collectively, as the "Tranches"). The term of each
         Tranche shall be five (5) years from the first date such Tranche shall
         become exercisable hereunder (the First Tranche shall have a term

                                      -7-
<PAGE>

         commencing on the date of this Consulting Agreement and ending on the
         fifth anniversary thereof, the Second Tranche shall have a term
         commencing on the first anniversary of this Consulting Agreement and
         ending on the sixth anniversary thereof, and the Third Tranche shall
         have a term commencing on the second anniversary of this Consulting
         Agreement and ending on the seventh anniversary thereof), and,
         accordingly, Consultant shall be entitled to exercise the Option as to
         each Tranche only during the applicable term of such Tranche, but, in
         no event, after the end of the applicable term of such Tranche. In no
         event may a fraction of a share of Common Stock be purchased or issued
         under the Option. Shares of Common Stock to be issued hereunder may
         consist, in whole or in part, of authorized but unissued shares of
         Common Stock or shares of Common Stock held in the treasury of Jaclyn.

         (c) The Option shall be exercised by giving written notice to Jaclyn at
         its then principal office, presently 635 59th Street, West New York,
         New Jersey 07093, Attention: Chief Financial Officer, stating that
         Consultant is exercising the Option, specifying the number of shares
         being purchased and the Tranche being exercised, and accompanied by
         payment in full of the aggregate purchase price therefor in cash or by
         certified check. Consultant shall not have the rights of a stockholder
         with respect to such shares until the date of issuance of a stock
         certificate to him for such shares. No adjustment shall be made for
         dividends (ordinary or extraordinary, whether in cash, securities,
         other property or otherwise) or distributions or other rights for which
         the record date is prior to the date any such stock certificate shall
         be issued.

         (d) Jaclyn may withhold cash, shares of Common Stock to be issued to
         Consultant, or a combination thereof, in the amount which Jaclyn
         determines is necessary to satisfy its obligation, if any, to withhold
         federal, state and local income taxes or other amounts incurred by
         reason of the grant, vesting, exercise or disposition of the Option or
         the underlying shares of Common Stock. Alternatively, Jaclyn may
         require Consultant to pay Jaclyn such amount in cash upon demand.

         (e) The Option shall not be exercisable by Consultant unless (a) a
         Registration Statement under the Securities Act of 1933, as amended
         (the "Securities Act"), with respect to the shares of Common Stock to
         be received upon the exercise of the Option shall be effective and
         current at the time of exercise or (b) there is an exemption from
         registration under the Securities Act for the issuance of the shares of
         Common Stock upon such exercise. Jaclyn may require, in its sole
         discretion, as a condition to the exercise of the Option, that
         Consultant execute and deliver to Jaclyn the Consultant's
         representations and warranties, in form, substance and scope
         satisfactory to Jaclyn, that Jaclyn determines is necessary or
         convenient to facilitate the perfection of an exemption from the
         registration requirements of the Securities Act, applicable state
         securities laws or other legal requirements, including without
         limitation, that the shares of Common Stock to be issued upon the
         exercise of the Option will be acquired by Consultant for his own
         account, for investment only and not with a view to the resale or
         distribution thereof. In order to induce Jaclyn to grant the Option,
         Consultant hereby represents and warrants to Jaclyn that, unless a
         Registration Statement under the Securities Act is effective and
         current at the time of each exercise of the Option with regard to the
         shares of Common Stock to be issued to him upon such exercise, the

                                      -8-
<PAGE>

         shares of Common Stock to be issued upon the exercise of the Option
         will be acquired by Consultant for his own account, for investment only
         and not with a view to the resale or distribution thereof. Any
         subsequent resale or distribution of shares of Common Stock by
         Consultant shall be made only pursuant to (x) a Registration Statement
         under the Securities Act which is effective and current with respect to
         the sale of shares of Common Stock being sold, or (y) a specific
         exemption from the registration requirements of the Securities Act, but
         in claiming such exemption, Consultant shall, prior to any offer of
         sale or sale of such shares of Common Stock, provide Jaclyn (unless
         waived by Jaclyn) with a favorable written opinion of counsel, in form,
         substance and scope satisfactory to Jaclyn, as to the applicability of
         such exemption to the proposed sale or distribution. Nothing herein
         shall be construed as requiring Jaclyn to register the shares subject
         to the Option under the Securities Act or to keep any Registration
         Statement current or effective.

         (f) If at any time Jaclyn shall determine, in its sole discretion, that
         the listing or qualification of the shares of Common Stock subject to
         the Option on any securities exchange, The Nasdaq Stock Market, Inc.,
         or under any applicable law, or the consent or approval of any
         governmental regulatory body or other governmental authority, is
         necessary or desirable as a condition to, or in connection with, the
         issuance of shares of Common Stock hereunder, the Option may not be
         exercised in whole or in part unless such listing, qualification,
         consent or approval shall have been effected or obtained free of any
         conditions not acceptable to Jaclyn.

         (g) Jaclyn may endorse such legend or legends upon the certificates for
         shares of Common Stock issued upon exercise of the Option and may issue
         such "stop transfer" instructions to its transfer agent in respect of
         such shares as it determines, in its sole discretion, to be necessary
         or appropriate to (a) prevent a violation of, or to perfect an
         exemption from, the registration requirements of the Securities Act,
         applicable state securities laws or other legal requirements, or (b)
         implement the provisions of any agreement between Jaclyn and Consultant
         with respect to such shares of Common Stock.

         (h) In the event of any change in the outstanding Common Stock by
         reason of a stock dividend, recapitalization, merger in which Jaclyn is
         the surviving corporation, spinoff, split-up, combination or exchange
         of shares or the like which results in a change in the number or kind
         of shares of Common Stock which are outstanding immediately prior to
         such event, the aggregate number and kind of shares subject to the
         Option and the exercise price hereof may be appropriately adjusted by
         Jaclyn, whose determination shall be conclusive and binding on all
         parties. Such adjustment may provide for the elimination of fractional
         shares that might otherwise be subject to the Option without payment
         therefor. In addition, and without limiting the generality of the
         foregoing, in the event of any offer to holders of Common Stock
         generally relating to the acquisition of their shares, Jaclyn may make
         such adjustment in respect of the Option, including, in Jaclyn's sole
         discretion, revision of the Option and the rights of Consultant
         hereunder, so that it may be exercisable for the consideration payable
         in such transaction. The determinations of Jaclyn in respect of the
         foregoing shall be conclusive and binding.

                                      -9-
<PAGE>

         (i) In the event of a proposed dissolution or liquidation of Jaclyn, or
         in the event of a proposed sale of all or substantially all of the
         assets of Jaclyn, or the merger of Jaclyn with or into another
         corporation or entity, Jaclyn may, as to outstanding options, (a) make
         appropriate provision for the protection of the Option by the
         substitution of an option to purchase appropriate stock or other
         securities or property of Jaclyn or of the merged, consolidated or
         otherwise reorganized corporation or other entity which will be
         issuable in respect to each share of Common Stock of Jaclyn, (b) upon
         written notice to an optionee, provide that all unexercised options, to
         the extent then exercisable, must be exercised within a specified
         number of days of the date of such notice or they, along with the
         Tranches, if any, that shall not yet be exercisable, will be
         terminated, or (c) take such other action in connection therewith as
         Jaclyn may deem necessary or convenient. In any such case, the board of
         directors of Jaclyn may, in its discretion, advance the lapse of any
         waiting or installment periods and exercise dates.

         (j) The grant of this Option shall not be construed as giving
         Consultant any right to be associated with Jaclyn or any of its
         subsidiaries or affiliates other than as set forth in this Consulting
         Agreement.

         (k) Consultant represents and agrees that he will comply with all
         applicable laws relating to the grant and exercise of the Option and
         the disposition of the shares of Common Stock acquired upon exercise of
         the Option, including without limitation, federal and state securities
         and "blue sky" laws.

         (l) The Option is not transferable by Consultant, and it shall
         automatically expire upon the death of Provider, except that, in the
         event of Provider's death, the Option may be exercised, to the extent
         it was exercisable on the date of such death, by Provider's executor,
         administrator or other person at the time entitled by law to exercise
         Consultant's rights under the Option, at any time within six months
         after Provider's death, but in no event after the expiration of the
         applicable term of the respective Tranches or the Option. Except to the
         extent provided above, the Option may not be assigned, transferred,
         pledged, hypothecated or disposed of in any way (whether by operation
         of law or otherwise) and shall not be subject to execution, attachment
         or similar process, and any such attempted assignment, transfer,
         pledge, hypothecation or disposition shall be null and void ab initio
         and of no force or effect.

         (m) Jaclyn shall have the authority, in its sole discretion, to make
         all determinations necessary or advisable relating to the Option. Each
         controversy or claim arising out of or relating to this P. 11 or the
         Option shall be determined by Jaclyn, which determination shall be
         conclusive and binding on Consultant. Neither Jaclyn nor any officer,
         director or employee of Jaclyn shall be liable for any action, failure
         to act or determination made in good faith with regard to the Option.

         (n) The provisions of this P. 11, and only this P. 11, shall be
         governed by and interpreted under the laws of the State of Delaware,
         without regard to the conflicts of law principles thereof. At Jaclyn's
         option, the provisions of this P. 11, and only this P. 11, may be
         enforced and/or adjudicated, without a jury, in a federal or state
         court located in Delaware.

                                      -10-
<PAGE>

12.      No Fringe Benefits. Consultant is an independent contractor with
Jaclyn. Except for the Option discussed in P. 11, neither Consultant nor
Provider shall receive any fringe benefits from Topsville, MNNI or Jaclyn, nor
shall they be entitled to any rights, privileges or entitlements that might
apply to employees of Topsville, MNNI or Jaclyn. Except as provided in this
Consulting Agreement, Neither Provider nor Consultant shall be subject to any
obligations that Jaclyn presently or in the future may impose on its employees,
except such obligations as are required by law.

13.      Protection of Information. Both during and after the Consulting Period,
and notwithstanding any termination of this Consulting Agreement, Consultant and
Provider shall hold in confidence, and shall not use for any purpose that is not
specifically authorized by Jaclyn, any and all trade secrets of Topsville, MNNI
and/or Jaclyn, as well as any and all other trade data of Topsville, MNNI and/or
Jaclyn which is not generally known outside of those companies. "Trade secret"
means "any formula, pattern, device or compilation of information which is used
in one's business, and which gives him an opportunity to obtain an advantage
over competitors who do not know or use it."

14.      Extension of Consulting Period. The parties hereto may, by written
amendment that is signed by all of them, extend the term of the Consulting
Period beyond June 30, 2004, on such terms and conditions as such an amendment
may provide.

15.      Death or Disability of Provider. It is an essential condition and
element of this Consulting Agreement that the Consulting Services be personally
provided by Provider. Accordingly, Consultant's "base" and "bonus" compensation
shall be prorated in the event of Provider's death, to the date of such death.
In the event Provider is disabled from fully performing the services required of
him hereunder, such compensation shall be prorated to account for any period of
such disability.

16.      Assignment. In the event MNNI transfers or liquidates all or a majority
of its shares in Topsville and/or in the event Jaclyn transfers or liquidates
all or a majority of its shares in MNNI (including, without limitation, causing
Topsville's business to be absorbed into Jaclyn itself), this Consulting
Agreement shall inure to the benefit of Jaclyn's assignees in that regard (which
may, in the event of absorption, be Jaclyn itself). To obtain such benefit, the
assignee(s) shall, in writing, assume the terms, conditions and obligations of
this Consulting Agreement. It is an essential condition and element of this
Consulting Agreement that the Consulting Services be personally provided by
Provider, and Consultant may not delegate its obligations hereunder in any way
that is inconsistent with that. Topsville and MNNI are intended third party
beneficiaries of this Consulting Agreement.

17.      Notices. Notices under P. 5(a) and P. 5(d) of this Consulting Agreement
shall be in writing and shall be deemed to have been given on the date when
personally delivered to an officer of the other party or when sent by confirmed
facsimile transmission to the number (and copy number) shown below; or, if sent
by commercial overnight delivery service, then one (1) business day after being

                                      -11-
<PAGE>

properly deposited for delivery by commercial overnight delivery service,
prepaid; or, if sent by U.S. mail, then three (3) business days after being
properly deposited in the United States mail, certified or registered mail,
postage prepaid, return receipt requested, and addressed as follows; unless and
until either of such parties notifies the other in accordance with this P. 17 of
a change of address or change of facsimile number:

         If to Jaclyn:            Jaclyn, Inc.
                                  635-59th Street
                                  West New York, New Jersey 07093
                                  Attention: Robert E. Chestnov
                                  Fax No.: (201) 868-6525


         With a copy to:          Robert J. Kaplan, Esq.
                                  15 Maiden Lane
                                  New York, New York 10038
                                  Fax No.: (212) 964-0867


         If to Consultant         Natoosh LLC
             or Provider:         86 Rock Road West
                                  Green Brook, New Jersey 08812
                                  Fax No.: (908) 769-7230

         With a copy to:          Philip Klein, Esq.
                                  Klein & Liss
                                  40 Park Avenue South
                                  12th Floor
                                  New York, New York 10016
                                  Fax No.: (212) 683-7737


18.      Counterparts; Headings. This Consulting Agreement may be executed in
several counterparts, each of which shall be deemed an original, but such
counterparts shall together constitute but one and the same agreement. The
paragraph headings are inserted for convenience of reference only and shall be
disregarded in interpreting this Consulting Agreement.

                                      -12-
<PAGE>

19.      Severability. If any word, provision, clause or other part of this
Consulting Agreement, or the application thereof under certain circumstances, is
held invalid, or unenforceable, the remainder of this Consulting Agreement, or
the application of such word, provision, clause or other part under different
circumstances, shall not be affected thereby. In the event any word provision,
clause or other part of this Consulting Agreement shall be held invalid or
unenforceable, it shall be deemed modified, but only to the extent necessary to
make it lawful. To effect such modification, the said word, provision, clause or
other part shall be deemed deleted, added to and/or rewritten, whichever shall
most fully preserve the intentions of the parties as originally expressed
herein.

20.      Survival. Termination of this Consulting Agreement, whether by lapse of
time or otherwise, shall not be deemed to extinguish any representations,
warranties or other agreements contained herein which, by their nature or
purpose, should survive.

21.      Entire Agreement; Amendment; and Waivers. This Consulting Agreement and
the Purchase and Sale Agreement constitute the entire agreement between the
parties pertaining to the subject matter hereof, and supersede all prior and
contemporaneous agreements, understandings, negotiations and discussions of the
parties, whether oral or written. This Consulting Agreement may not be altered,
modified, terminated or discharged except by a writing signed by the party
against whom such alteration, modification, termination or discharge is sought
to be enforced. The failure (whether or not knowing and whether or not
prolonged) to take action against a breach or default under this Consulting
Agreement shall not be construed as a waiver of the right to take action against
such or a similar breach or default, it being understood that no waiver shall be
effective and no waiver is to be relied upon unless it be made in a writing
signed by the party charged with it.

22.      Governing Law. Except as provided in P. 11, this Consulting Agreement
shall be governed by and interpreted under the laws of the State of New York,
without regard to the conflicts of law principles thereof. Subject only to P.
11, any controversy arising out of or relating to this Consulting Agreement, or

                                      -13-
<PAGE>

any duty created thereby, shall be resolved without a jury in a federal or state
court located within the City of New York (and/or in any appellate court
therefrom) and in no other forum. The parties consent to jurisdiction in such
courts, waive any objection to such exclusive venue (except that Jaclyn reserves
its option under P. 11(n)), waive trial by jury, and agree that service of the
summons to such proceedings (and of any papers which may accompany it) shall be
deemed sufficient if made by certified mail, postage prepaid, addressed to the
parties' addresses as designated in or hereafter changed under P. 17. Service by
such method shall be deemed complete five (5) business days after such mailing.

         IN WITNESS WHEREOF, the parties have executed this Consulting Agreement
as of the day and year first above written.

                                            JACLYN, INC.

                                            By: /s/ ROBERT CHESTNOV
                                                --------------------------------
                                            Name: Robert Chestnov
                                                  ------------------------------
                                            Title: President
                                                  ------------------------------

                                            NATOOSH, LLC

                                            By: /s/ MARK NITZBERG
                                                --------------------------------
                                            Name: Mark Nitzberg
                                                  ------------------------------
                                            Title:  President
                                                  ------------------------------

                                            PROVIDER

                                            /s/ MARK NITZBERG
                                            ------------------------------------
                                            MARK NITZBERG, individually

                                      -14-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2.3
<SEQUENCE>6
<FILENAME>ex2_3.txt
<DESCRIPTION>EXHIBIT 2.3
<TEXT>

                                                                     EXHIBIT 2.3
                                                                     -----------

                      PAYMENT AND INDEMNIFICATION AGREEMENT


         AGREEMENT, dated January 10, 2002, by and among, CAPITAL FACTORS, INC.
("Capital"), TOPSVILLE, INC. ("Topsville"), MARK NITZBERG ("Mark"), and JACLYN,
INC. ("Jaclyn").

                                    RECITALS:
                                    ---------

         A.    Capital and Topsville are parties to a written factoring
agreement, dated July 1, 2000, which agreement was amended by a writing dated
August 31, 2001 and has not otherwise been amended (the said agreement, as
amended, is referred to as the "Existing Factoring Agreement" or "EFA"). Capital
and Topsville are also parties to a Letters of Credit/Bankers Acceptance
Agreement dated July 1, 2000 (the "LC Agreement") which supplements the EFA,
pursuant to which Capital has assisted Topsville with and guaranteed Topsville's
obligations under various letters of credit which currently remain open and
outstanding including any and all fees, costs, expenses and interest chargeable
to Topsville under the LC Agreement as may now or hereafter be incurred from
time to time (the "LC Obligations").

         B.    In connection with the EFA and the LC Agreement, Capital has
received various items of security from Topsville, Max N. Nitzberg, Inc.
("MNNI"), Mark, Max and Rita Nitzberg ("Max and Rita"), Leonard and Alta Jaffee
("Leonard and Alta"), including but not necessarily limited to: a Security
Agreement Supplement-Inventory executed by Topsville dated July 1, 2000 (the
"Inventory Security Agreement"), a Guarantee executed by Mark dated July 7, 2000
(the "Mark Guarantee"), a letter agreement executed by Topsville, Mark, Max and
Rita and Leonard and Alta dated July 1, 2000 (the "Letter Agreement"), a
Collateral Pledge Agreement executed by Topsville dated July 24, 2000 (the
"Topsville Collateral Pledge Agreement"), a Collateral Pledge Agreement executed
by Max and Rita dated September 22, 2000 (the "Max and Rita Collateral Pledge
Agreement"), a Collateral Pledge Agreement executed by Leonard and Alta as
Trustees dated September 20, 2000 (the "Leonard and Alta Collateral Pledge
Agreement"), the Limited Guarantee of Leonard and Alta as Trustees of the Jaffee
family Trust dated September 20, 2000 (the "Leonard and Alta Limited
Guarantee"), the Limited Guarantee of Max and Rita dated September 22, 2000 (the
"Max and Rita Limited Guarantee"), the Guaranty By Corporation of MNNI dated
July 1, 2000 (the "MNNI Corporate Guaranty"), the Guaranty By Corporation of
Topsville guaranteeing the obligations of MNNI to Capital dated July 1, 2000
(the "Topsville Corporate Guaranty"), the Collateral Pledge Agreement of Mark
dated July 2, 2000 (the "Mark Collateral Pledge Agreement"), an Assignment of
Life Insurance Policy on the life of Mark up to $3,000,000.00 (the "Life
Insurance Policy Assignment") and several form UCC-1 filings (the "Filed UCCs").
The Inventory Security Agreement, the Mark Guarantee, the Letter Agreement, the
Topsville Collateral Pledge Agreement, the Max and Rita Collateral Pledge
Agreement, the Leonard and Alta Collateral Pledge Agreement, the Leonard and
Alta Limited Guarantee, the Max and Rita Limited Guarantee, the MNNI Corporate
Guaranty, the Topsville Corporate Guaranty, the Mark Collateral Pledge
Agreement, the Life Insurance Policy, Assignment and the Filed UCCs may
collectively be hereinafter referred to as the "Security Items."

<PAGE>

         C.    Jaclyn, Topsville and Mark have advised Capital that, through a
Purchase and Sale Agreement dated January 10, 2002 entered into between Jaclyn
and Mark (the "Purchase and Sale Agreement"), a copy of which has been provided
to Capital, Jaclyn will be acquiring 100% of the outstanding shares of MNNI,
which, in turn, will own 100% of the outstanding shares of Topsville. Further,
and in order to effectuate an assignment to Jaclyn of Capital's security
interest in the assets of Topsville, Jaclyn, Topsville and Mark have requested
that Capital accept payment from Jaclyn of an amount (the "Assignment Amount")
equal to all of Topsville's outstanding Obligations (as defined in the EFA) with
the exception of the LC Obligations which Jaclyn shall promptly pay on demand
and for which Jaclyn shall indemnify Capital hereunder and shall arrange to be
fully secured by a standby letter of credit in favor of Capital from Fleet Bank
on terms and conditions acceptable to Capital. Provided further, and in
consideration of Jaclyn's payment of the Assignment Amount and Jaclyn's
indemnification of all LC Obligations to Capital, Capital will assign to Jaclyn
the EFA, the Inventory Security Agreement, the Pre-Assignment Receivables (as
hereafter defined), purchased by Capital pursuant to the EFA and the Filed UCCs,
all without recourse, representation or warranty of any kind or nature.

         NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

         1.    Simultaneously with the execution of this Agreement, Jaclyn is
delivering the following to Capital:

               (a) the sum of Four Million Four Hundred Eleven Thousand Seven
Hundred Forty-Nine and 07/100 U.S. dollars ($4,411,749.07) (the "Loan Amount" or
"Assignment Amount"), and

               (b) a standby letter of credit, issued by Fleet Bank in favor of
Capital, a copy of which is annexed in Exhibit "A", to secure any and all
outstanding obligations arranged for or on behalf of Topsville pursuant to the
LC Agreement as any of such obligations may be amended or modified from time to
time including all fees, costs, expenses, interest and applicable charges.
Capital shall, upon request, on a monthly basis review the then-outstanding
balance of the LC Obligations and promptly notify Fleet Bank as to the amount by
which the standby letter of credit can be reduced to comport with that
then-outstanding balance. For purposes of requesting any modifications,
merchandise releases, authorizations or any other amendments to the foregoing LC
Obligations of Topsville, Jaclyn, Topsville and Mark agree and acknowledge that,
unless and until Capital receives written notice from Jaclyn to the contrary,
Mark Nitzberg, Maurice Amiel, Robert Chestnov and/or Tony Christon are hereby
designated by Topsville to jointly and/or severally make any and all such
requests to you. Any such requested modification or amendment requested and
consented to by you shall immediately become part of the LC Obligations and
subject to Jaclyn's indemnity hereunder and the stand-by letter of credit issued
by Fleet Bank in favor of Capital. Capital shall be under no obligation to
verify the authenticity or validity or accuracy of any correspondence or
communication received by Capital which Capital believes in Capital's sole
discretion to have been given or delivered to Capital by Mark Nitzberg, Maurice
Amiel, Robert Chestnov and/or Tony Christon, except that if, Capital shall have
received written notice that it believes came from a duly authorized officer of
Jaclyn (Robert Chestnov is the President of Jaclyn; neither Mark Nitzberg nor
Maurice Amiel is or will be an officer of Jaclyn) that one or more of the
foregoing designated persons is no longer authorized to make modifications,
merchandise releases, authorizations, amendments,
                                      2
<PAGE>

correspondence or communication with respect to the LC Obligations, Capital
shall thereafter not honor same if Capital believes that any such requested
modification, merchandise release, authorization, amendment, correspondence or
communication was received by Capital from that person.

         2.    Jaclyn and Topsville agree and acknowledge that the assignment of
the EFA, the Inventory Security Agreement along with the Pre-Assignment
Receivables to Jaclyn hereunder shall not affect, modify or waive any of
Capitals rights and Topsville's obligations under the LC Agreement including
Capitals right to charge for all fees, costs, expenses and charges in connection
therewith. The LC Agreement shall continue and be secured by Jaclyn's
indemnification pursuant to this Agreement and the standby letter of credit
issued by Fleet Bank in favor of Capital. Any interest which may accrue and be
due Capital under the LC Agreement shall be as set forth in paragraph 5(e) of
the EFA which is hereby incorporated into the LC Agreement. The LC Agreement
shall continue to be governed by the laws of the State of Florida. All
representations and warranties of Topsville set forth in the EFA as of the date
of this agreement shall continue to pertain to and be subject to the LC
Agreement. Paragraphs 11(e) and (g) of the EFA are also incorporated into the LC
Agreement.

         3.    Simultaneously with the execution of this Agreement, and delivery
of a standby letter of credit issued by Fleet Bank in favor of Capital as set
forth above and releases from Max and Rita, Leonard and Alta individually and as
Trustee of the Jaffee Family Trust and Mark as set forth in paragraph 5 below,
Capital hereby assigns to Jaclyn without recourse, representation or warranty of
any kind or nature, all of Capital's right, title and interest in and to the
Pre-Assignment Receivables (as defined in paragraph 6), the EFA, the Inventory
Security Agreement and the Filed UCCs (however, as to the Filed UCCs,
reservation to Capital of its interest in the Previously Collected Accounts, as
provided in paragraph 10(ii) below).

         4.    The Loan Amount includes a charge of Eighteen Thousand Six
Hundred Sixty-Six and 20/100 dollars ($18,666.20) that Capital has assessed
against Topsville for making, at Topsville's request, the assignment contained
herein to Jaclyn.

         5.    Subsequent to the remittance of the Loan Amount in good and clear
U.S. dollars to Capital from Jaclyn as set forth in paragraph 2 above and
delivery of the standby letter of credit issued by Fleet Bank in favor of
Capital as referenced in paragraph I above, Capital shall deem the Letter
Agreement terminated, the Topsville Collateral Pledge Agreement terminated, the
Max and Rita Collateral Pledge Agreement terminated, the Leonard and Alta
Collateral Pledge Agreement terminated, the Leonard and Alta Limited Guarantee
terminated, the Max and Rita Limited Guarantee terminated, the MNNI Corporate
Guaranty terminated, the Topsville Corporate Guaranty terminated and the Mark
Collateral Pledge Agreement terminated and the Life Insurance Policy Assignment
terminated. Except as provided below, any and all collateral which remains in
Capital's possession pursuant to the foregoing Security Items shall be released
or returned to the respective party or his, her or its designee for which
Capital shall be entitled to a satisfactory release from such party. Anything
else contained herein notwithstanding, in no event shall the termination of the
Letter Agreement, the Topsville Collateral Pledge Agreement, the Max and Rita
Collateral Pledge Agreement, the Leonard and Alta Collateral Pledge Agreement,
the Leonard and Alta Limited Guarantee, the Max and Rita Limited Guarantee, the'
MNNI Corporate Guaranty, the Topsville Corporate Guaranty, the Mark Collateral
Pledge Agreement or the Life Insurance Policy Assignment result in, have the
effect of, or be construed

                                       3
<PAGE>

as a release of Capital's interest in any item that was listed on any of the
UCC-1 financing statements that Capital has filed which identify Topsville as
debtor. In no event shall Capital terminate or release its interest in any such
item, except that such interest shall be assigned to Jaclyn, which assignment
without recourse, representation or warranty of any kind or nature, from
Capital.

         6.    Annexed as SCHEDULE 6.1 is a list of all of the receivables of
Topsville which (i) were, pursuant to the EFA assigned to Capital prior to the
date of this agreement, and (ii) have not, as of the date of this agreement,
been collected by Capital (the "Pre-Assignment Receivables").

         7.    To the extent that the amounts which are actually collected and
received by Jaclyn from the Pre-Assignment Receivables (the "Proceeds") exceed
(i) the Loan Amount, plus (ii) interest thereon at the floating prime rate that
Fleet Bank charges Jaclyn for Jaclyn's line-of-credit borrowings from Fleet (the
"Floating Fleet Rate"), which interest shall accrue from the date of this
agreement until the date that the Assignment Amount and such interest are paid
in full from the Proceeds, plus (iii) any sums that Capital charges to or claims
against Jaclyn pursuant to paragraphs 11, 12 and/or 14 of this Agreement, such
excess (the "Excess") shall, within ten (10) business days after its receipt by
Jaclyn, be paid over to Mark by Jaclyn, without interest; provided, however,
that so much of the amount of the excess as is still subject to paragraph
11,12,and /or 14 charges or claims shall not be payable at that time if Capital
has not, by that time, advised Jaclyn, in writing, that no further sums can or
will be charged against Jaclyn pursuant to paragraphs 11, 12 and/or 14 of this
Agreement.

         8.    All letters of credit and merchandise releases that were, prior
to the date of this agreement, issued by Capital or its bank at the request of
Topsville, and which have not been drawn upon by their beneficiaries, shall
continue in full force and effect after the date of this agreement
notwithstanding the assignment to Jaclyn. The liability of Capital and/or its
affiliated bank under such letters of credit and the LC Obligations are hereby
fully indemnified by Jaclyn and payable upon demand by Capital without dispute
or set-off of any kind or nature by Jaclyn or Topsville. Jaclyn hereby
indemnifies and holds Capital harmless from and against any and all claims,
demands, causes of action, obligations, damages, liabilities, costs and
expenses including reasonable attorney's fees that may be asserted against or
incurred by Capital with respect to or in any way arising from any LC
Obligations and/or the LC Agreement. If Jaclyn fails to remit full payment of
any such LC Obligations within seventy-two (72) hours after Capital sends notice
to Jaclyn of such demand, interest as set forth in the LC Agreement (as modified
in accordance with paragraph 2 above of this Agreement) shall immediately accrue
and be payable on such unpaid obligations.

The indemnification provisions under this paragraph 8 of this agreement are
irrevocable.

         9.    To the extent that any of the terms of this agreement differs
with terms of the EFA, the LC Agreement or the Security Items, the EFA, the LC
Agreement and the Security Items shall be deemed modified accordingly.

         10.   As soon as practicable after the date of this agreement, Capital
shall deliver to Jaclyn properly executed Form UCC-3 statements which:

                                       4
<PAGE>

               (i)    shall correspond to all Form UCC-1 statements that (a)
were filed in connection with the EFA or any of its predecessor agreements and
(b) were in effect as of the date of this agreement, and

               (ii)   shall name Jaclyn as the sole and exclusive assignee of
the entirety of the security interests which are reflected in such Form UCC-1
statements with the exception only of those of Topsville's accounts which were
paid and collected prior to the date of this Agreement (the "Previously
Collected Accounts"). Capital shall continue to retain a security interest in
the Previously Collected Accounts. Further Jaclyn and Topsville, acknowledge
that, as of the date of this agreement, Capital has sought to "in lieu" its
filed UCCs on Topsville in an effort to record such UCCs in conformity with
Revised Article 9 of the Uniform Commercial Code and has not received any
confirmation that such "in lieu" filing has been accepted and filed by the
Secretary of State's office in the State of Florida. Jaclyn, Topsville and
Capital shall promptly notify all account debtors of the Pre-Assignment
Receivables to remit payment directly to Jaclyn.

         11.   Capital shall promptly comply with all reasonable requests by
Jaclyn, at Jaclyn's sole cost and expense, regarding the conformity or
correction of such Form UCC-3 statements. Jaclyn shall, at the time that such
statements are delivered to Jaclyn or its designee, reimburse Capital for the
reasonable cost of preparing such Form UCC-3 statements (including reasonable
attorney's fees). Mark shall promptly pay Jaclyn (i) the full amount of the
reimbursement that Jaclyn makes to Capital in that regard, and (ii) the cost to
Jaclyn (including reasonable attorneys' fees) of filing such Form UCC-3
statements. To the extent, if any, that Mark fails to make such payment to
Jaclyn, Jaclyn shall deduct such unpaid amount (plus interest thereon at the
Floating Fleet Rate) from the Excess.

         12.   In the event that any customer of Topsville makes payment to
Capital for all or part of any receivable of Topsville which, because of the
assignment to Jaclyn, must, instead, be paid to Jaclyn, the amount of any such
payment shall not be deemed the property of Capital, but, rather, shall be
deemed property held in trust by Capital for the benefit of Jaclyn (but need not
be segregated by Capital for such purpose), and Capital shall, within a
reasonable period of time, at Jaclyn's sole cost and expense and subject to
Capital's right to offset the amount of checks, drafts or other payments
delivered to Capital in payment of any outstanding Pre-Assignment Receivables or
any other accounts of Topsville which are dishonored because of insufficient
funds or for any other reason whatsoever, pay over the amount of such payment to
Jaclyn. If, for any reason whatsoever, Capital fails to do so, the amount of any
payment that is made to Capital but not paid-over to Jaclyn shall (without
prejudice to any of Jaclyn's or Mark's rights or remedies against Capital),
until the time of the pay-over to Jaclyn, be disregarded for purposes of
determining whether and to what extent there is an Excess. Capital shall not be
obligated to make any payment to Jaclyn hereunder, if any such payment is
enjoined, restrained, or stayed by any court or by any statute or governmental
rule or regulation. In the event any conflicting demands are made upon Capital
with respect to moneys to be paid hereunder, Capital shall not be required to
determine the same and shall have the right to file suit in interpleader or for
declaratory relief. In the event Capital shall bring any such action, Jaclyn
agrees to reimburse Capital for its reasonable attorneys' fees, costs and
expenses incurred in connection therewith, if Capital is unable to recover such
fees, costs and expenses from the moneys so interpleaded.

         13.   Notwithstanding anything to the contrary contained herein, and
notwithstanding any information that may have been requested of or given by
Capital, Jaclyn acknowledges that

                                       5
<PAGE>

insofar as Jaclyn's right of recourse against Capital, its officers, directors,
employees and agents is concerned (and not insofar as Jaclyn's right of recourse
against any other person is concerned), nothing communicated by Capital other
than what is specifically reflected in this agreement, may be or has been relied
upon by Jaclyn in making any decision that Jaclyn has made or may make to
undertake to purchase the shares of MNNI or accept the assignment from Capital
hereunder. Moreover, Jaclyn acknowledges to Capital that insofar as Jaclyn's
right of recourse against Capital, its officers, directors, employees and agents
is concerned (and not insofar as Jaclyn's right of recourse against any other
person is concerned) any decision Jaclyn has made or may undertake to finance
Jaclyn's purchase of the shares of MNNI and the indemnification of Capital as
set forth herein, has been or will be made by Jaclyn based upon its own due
diligence and independent evaluations, without regard to any information
received from Capital.

         14.   Jaclyn hereby confirms the agreement that (i) Jaclyn shall
indemnify, and hold Capital harmless from and against any expense or liability
sustained or incurred by Capital as a result of non-payment or dishonor of any
checks the proceeds of which were remitted by Capital to Jaclyn in accordance
with the foregoing paragraphs; (ii) Capital may deduct from the proceeds of
receivables remitted by Capital to Jaclyn, any expenses incurred by Capital in
collecting such proceeds; (iii) in the event any payment which is the subject of
remittance by Capital (the "Remitter") to Jaclyn (the "Recipient") is sought to
be recovered by the payor or a representative thereof (including a trustee in
bankruptcy or assignee for the benefit of creditors on the grounds of
preference), then the Remitter shall promptly so advise the Recipient in
writing, following which the Recipient shall have the exclusive right and
obligation, at its sole cost and expense, to contest, defend or settle such
claim, and the Recipient shall indemnify and hold the Remitter harmless from any
loss or expense (including the Remitter's reasonable attorneys' fees) arising
out of the assertion of such claim. The indemnification clauses set forth in
this paragraph 14 are irrevocable.

         15.   All notices provided for in this agreement shall be in writing
and shall be given to the addresses set forth below by registered or certified
mail, return receipt requested, and by regular mail, both with postage prepaid,
or personally delivered, or sent by facsimile transmission (provided the
transmitting device provides a record of transmission) or by prepaid express
mail or other overnight delivery service of any nationally recognized private
carrier guaranteeing overnight delivery. Any such notice shall be deemed given
(I) when so delivered personally or sent by facsimile transmission if received
at the receiving location during business hours, (ii) on the next business day
if sent by facsimile transmission and received at the receiving location after
business hours, (iii) on the date of delivery if sent by express mail or such
private carrier guaranteeing overnight delivery if delivered during business
hours at the receiving location, (iv) on the next business day if sent by
express mail or such private carrier guaranteeing overnight delivery if
delivered at the receiving location at any time other than during business
hours, or (v) if mailed, five (5) business days after the date of deposit in the
United States mail.

         The addresses referred to above are:

         Jaclyn's address:        Jaclyn, Inc.
                                  635 - 59th Street
                                  West New York, New Jersey 07093
                                  Attention: Robert E. Chestnov
                                  Facsimile Number: (201) 868-6525

                                        6
<PAGE>

         Capital's address:       Capital Factors, Inc.
                                  1700 Broadway, 19th Floor
                                  New York, NY 10019
                                  Attention: Ric Mazza, Senior Vice President
                                  Facsimile Number: (212) 887-7910

         Topsville's
         address:                 Topsville, Inc.
                                  11800 N.W. 102nd Road
                                  Medley, Florida 33178
                                  Attention:  Mark Nitzberg, President
                                  Facsimile Number: (305) 888-1365

         Mark's address:          Mark Nitzberg
                                  86 Rock Road West
                                  Green Brook, New Jersey 08812
                                  Facsimile Number (908) 769-7230


Any party at any time may give notice of another address for it, him or for
copies in accordance with the provisions of this Paragraph 15.

         16.   The execution, delivery and performance of this agreement and all
of the documents and instruments required hereunder, and the consummation and
effectiveness of the transactions to be done by the parties contemplated hereby
and thereby, are within the corporate power and authority of each party hereto
and have been duly authorized by all necessary corporate action as appropriate
and do not require any further authorization or approval of any kind or nature.
This agreement is and the other documents and instruments required hereby will
be, when executed and delivered by the parties hereto, valid and binding
obligations of each such party hereto, fully effective and enforceable against
each such party hereto.

         17.   This agreement shall be governed by and interpreted under the
laws of the State of New York without regard to the conflict of laws principles
thereof. Any controversy which arises out of or relates to this agreement, or to
any duty created thereby, shall be resolved without a jury in a federal or state
court located within the City of New York (and/or in any appellate court
therefrom) and in no other forum. Each of Capital, Topsville, Mark and Jaclyn
consents to jurisdiction in such courts, waives any objection to such exclusive
venue, and waives any objection to such exclusive venue, and waives trial by
jury. In the event of litigation based upon or arising out of this agreement,
the prevailing party shall be entitled to recover from each or all of the
non-prevailing parties all costs, fees and expenses incurred in connection with
such litigation, including without limitation, reasonable attorney's fees.

         18.   This agreement constitutes the entire agreement between the
parties pertaining to the matters concerning the same. This agreement may not be
altered, modified, terminated or discharged except by a writing signed by the
party against whom such alteration, modification, termination or discharge is
sought to be enforced. The failure (whether or not knowing and whether or not
prolonged) to take action against a breach or default under this agreement shall

                                       7
<PAGE>

not be construed as a waiver of the right to take action against such or a
similar breach or default, it being understood that no waiver shall be effective
and no waiver is to be relied upon unless it be made in a writing signed by the
party charged with it.

         19.   Neither Jaclyn nor Topsville may assign any of its rights or
obligations under this agreement absent the express written consent of Capital.
The preceding sentence shall not, however, be construed as requiring Capital's
consent for, or as limiting in any way, Jaclyn's - absolute right to re-assign,
pledge or hypothecate the EFA and/or the security interests that Capital is
assigning to Jaclyn to Fleet and/or to any other banking institution with whom
Jaclyn has or will have a financing relationship. Any such reassignment, or
pledge or hypothecation by Jaclyn shall expressly state to such Assignee or
Pledgee that the Assignee's or Pledgee's rights are without recourse to Capital.
All covenants, agreements, representations and warranties contained in this
agreement shall bind and inure to the benefit of the parties hereto and its
successors and permitted assigns.

         20.   If any provision of this agreement shall be held illegal or
unenforceable, such illegality or unenforceability shall relate to such
provisions only and shall not affect the remainder this agreement.

         IN WITNESS WHEREOF, the parties have executed this agreement as of the
day and year first above written.


Witnesses:                                  CAPITAL FACTORS, INC.

                                            By: /s/ GARY NORMAN
--------------------------------                --------------------------------
                                            Print Name: Gary J. Norman
--------------------------------            Title: S.V.P.

                                            JACLYN, INC.

                                            By: /s/ ROBERT CHESTNOV
--------------------------------                --------------------------------
                                            Print Name: Robert Chestnov
--------------------------------            Title: President

Witnesses                                   TOPSVILLE, INC.

                                            By: /s/ MARK NITZBERG
--------------------------------                --------------------------------
                                            Print Name: Mark Nitzberg
--------------------------------            Title: President


                                            /s/ MARK NITZBERG
--------------------------------            ------------------------------------
                                            Mark Nitzberg
--------------------------------

                                        8

</TEXT>
</DOCUMENT>
</SUBMISSION>
