
<PAGE>

                               As of January 4, 1993


Congress Financial Corporation
1133 Avenue of the Americas
New York, NY  10036

               Re: Second Amendment to Financing Agreements

Dear Gentlemen:

   Reference is made to Accounts Financing Agreement [Security Agreement] 
between Congress Financial Corporation ("Congress") and I.C. Issacs & Co. 
L.P. ("Borrower") dated as of June 16, 1992 ( the "Accounts Agreement") and 
all supplements thereto, and all other agreements, documents and instruments 
related thereto and executed in connection therewith including, the Covenant 
Supplement to Accounts Financing Agreement [Security Agreement] ("Covenant 
Supplement") and the Inventory and Equipment Security Agreement Supplement to 
Accounts Financing Agreement [Security Agreement] ("Inventory and Equipment 
Security Agreement"), as each is amended by the amendment to Financing 
Agreements dated October 30, 1992, as the same now exists or may hereafter be 
further amended, modified, supplemented, extended, renewed, restated or 
replaced (collectively, the "Financing Agreements"). Capitalized terms used 
herein, unless otherwise defined herein shall have the meaning set forth in 
the Financing Agreements.

   Borrower has requested supplemental loans in an amount up to $500,000 
under the Financing Agreements and certain modifications to the Financing 
Agreements and Congress is willing to agree to such supplemental loans and 
modifications, subject to the terms and conditions set forth herein.

   In consideration of the foregoing, and the mutual agreements and covenants 
contained herein and for other good and valuable consideration, Borrower and 
Congress hereby agree as follows:

   1. Maximum Credit. All references to "Maximum Credit" in the Financing 
Agreements, including but not limited to Section 1.7 of the Accounts 
Agreement, shall be deemed and each such reference is hereby amended by 
replacing the figure "$10,000,000" with the figure "$11,000,000".

   2. Supplemental Loans. Section 2.1 of the Accounts Agreement is hereby 
deleted in its entirety and replaced with the following:

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

        Date of Reduction                         Reduced Maximum Amount
        -----------------                         ----------------------

        May 7, 1993                                      $375,000
        May 14, 1993                                     $250,000
        May 21, 1993                                     $125,000
        May 28, 1993                                        -0- "

   3. Capital Expenditures. Section 4.12 of the Covenant Supplement is hereby
deleted in its entirety and replaced with the following:

      "4.12 Capital Expenditures. Borrower will not, in the aggregate, 
directly or indirectly, expend or commit to expend, Capital Expenditures in 
excess of $431,000 in fiscal year 1992 or in excess of $300,000 in any fiscal 
year thereafter."

   4. Fee. In partial consideration of the amendments to the Financing 
Agreements as set forth herein, Borrower agrees to pay Congress a fee in an 
amount equal to $10,000, payable simultaneously with the execution hereof, 
which fee is fully

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earned as of the data hereof.  At Congress' option, Congress may charge such 
fee directly to Borrower's loan account.  

     5.  Effect and Entirety of this Amendment.  Except as specifically 
modified pursuant hereto, no other changes or modifications to the Financing 
Agreements are intended or implied and, in all others respects, the Financing 
Agreements are hereby ratified and confirmed by all parties hereto as of the 
date hereof.  This Amendment represents and incorporates the entire 
understanding and agreements of the parties with respect to the matters set 
forth herein and the parties hereto agree that there are no representations, 
warranties, covenants or understandings of any kind, nature or description 
whatsoever made by Congress to Borrower with respect to this Amendment, 
except as specifically set forth herein.  This Amendment represents the final 
agreement between the parties and may not be contradicted by evidence or 
prior, contemporaneous or subsequent oral agreements of the parties.

     6.  Waiver, Modification, Etc.  No provision or term hereof may be 
modified, altered, waived, discharged or terminated orally, but only by an 
instrument in writing executed by the party against whom such modification, 
alteration, waiver, discharge or termination is sought.

     7.  Further Assurances.  The parties hereto shall execute and deliver 
such additional documents and take such additional action as may be necessary 
to effectuate the provisions and purposes of this Amendment.

     8.  Counterparts.  This Amendment may be executed in one or more 
counterparts which, taken together, shall constitute the agreement of the 
parties.  

                                       Very truly yours,

                                       I.C. ISAACS & CO. L.P.

                                       By:  ISBUYCO, INC., General Partner
                                            By: /s/ Eugene C. Wielepski
                                                --------------------------
                                            Title: VP
                                                   -----------------------

Agreed and Accepted:

CONGRESS FINANCIAL CORPORATION

By: /s/ Alan M. Lapidus
-------------------------------
Title: AVP
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