



<PAGE>

                                       June 25, 1996



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

     Re: Twelfth Amendment to Financing Agreements


Gentlemen:

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

     Borrower has requested an extension of, and certain modifications to, the 
Financing Agreements and Congress is willing to agree to such extension and 
modifications, subject to the terms and conditions set forth herein.

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

          1.  Definitions.

              (a)  Additional Definition.  As used herein the term "Amended 
Term Note" shall mean the Amended and Restated Term Promissory Note, dated of 
even date herewith, made by Borrower payable to the order of Congress in the 
original principal amount of $1,000,000 as the same now exists or may 
hereafter be amended, modified, supplemented, extended, renewed, restated or 
replaced.

              (b)  Amendments to Definitions.

              (i)  All references to the term "Term Note" herein and in the 
Covenant Supplement and the other Financing Agreements shall be deemed and 
each such reference is hereby amended to mean the Amended Term Note as 
defined herein.

                                      
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      (ii) All references to the term "Term Loan" herein and in the Covenant 
Supplement and the other Financing Agreements shall be deemed and each such 
reference is hereby amended to mean the outstanding Obligations owed to 
Congress by Borrower consisting of the indebtedness evidenced by the Amended 
Term Note.

      (c) Interpretation. For purposes of this Amendment, unless otherwise 
defined herein, all terms used herein, including, but not limited to, those 
terms used and/or defined in the recitals hereto, shall have the respective 
meanings assigned to such terms in the other Financing Agreements.

   2. Term Loan.

      (a) Borrower hereby acknowledges, confirms and agrees that as of June 
1, 1996, the aggregate principal amount outstanding in respect of the Term 
Loan (as such term is defined in the Financing Agreements immediately prior 
to the effectiveness of this Amendment) is $216,651. On the date hereof, 
subject to the terms and conditions contained herein, Congress shall make an 
additional advance to Borrower in the amount of $783,349, so that the 
outstanding principal balance of the Term Loan shall be increased to 
$1,000,000. Such Term Loan shall be (i) evidenced by the Amended Term Note 
executed and delivered by Borrower to Congress concurrently herewith, (ii) 
repaid, together with interest and other amounts due thereunder, in accordance 
with the terms and provisions of such Amended Term Note and the other 
Financing Agreements, and (iii) secured by all of the Collateral. Borrower 
may not reborrow any principal amounts prepaid pursuant to the Amended Term 
Note.

      (b) The amendment and restatement contained herein, shall not, in any 
manner, be construed to constitute payment of, or impair, limit, cancel or 
extinguish, or constitute a novation in respect of, the Obligations evidenced 
by or arising under the Financing Agreements, and the liens and security 
interests securing such Obligations shall not in any manner be impaired, 
limited, terminated, waived or released.

   3. Maximum Credit.

      (a) Effective as of April 8, 1996, all references to the Maximum Credit 
in the Financing Agreements, including but not limited to Section 1.7 of the 
Accounts Agreement, shall be deemed and each such reference is hereby amended 
by replacing "$15,000,000" with "$25,000,000". Notwithstanding the foregoing, 
during the period from June 15, 1996 through and including September 15, 
1996, all references to the Maximum Credit in the Financing Agreements shall 
automatically be deemed and each such


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reference shall be automatically amended by replacing "$25,000,000" with 
$27,000,000".

   (b) Notwithstanding anything to the contrary contained in the Financing 
Agreements, and without limiting the right of Congress to demand payment of 
the Obligations, or any portion thereof, in accordance with any other terms 
of the Financing Agreements, if the outstanding aggregate principal amount of 
loans made by Congress to Borrower on and after September 16, 1996 exceeds 
the Maximum Credit, Borrower shall remain liable therefor and such excess 
shall automatically, without notice or demand, be absolutely and 
unconditionally due and payable in cash or other immediately available funds 
on September 16, 1996.

   4. Accounts Advances. Section 2.1 of the Accounts Agreement, as amended, 
is hereby deleted in its entirety and replaced with the following:

   "2.1 You shall, in your discretion, make loans to us from time to time, 
at our request, of up to eighty (80%) percent of the Net Amount of Eligible 
Accounts (or such greater or lesser percentage thereof as you shall in your 
sole discretion determine from time to time); provided, that, for the period 
May 1, 1996 through July 31, 1996, you shall, in your discretion, make loans 
to us from time to time, at our request, of up to eighty-five (85%) percent 
of the Net Amount of Eligible Accounts (or such greater or lesser percentage 
thereof as you shall in your sole discretion as determined from time to 
time)."

   5. Supplemental Loans.

   (a) In addition to the loans and advances which may be made by Congress to 
Borrower pursuant to the lending formulas set forth in the Financing 
Agreements, upon the request of Borrower made at any time and from time to 
time during the period April 1, 1996 to July 31, 1996, Congress shall, 
subject to the terms and conditions contained in the Financing Agreements, 
make supplemental loans to Borrower in such amounts from time to time as 
Congress shall in good faith determine, in its discretion, of up to 
$1,000,000 in excess of the amounts otherwise available to Borrower under the 
lending formulas set forth in the Financing Agreements, as calculated by 
Congress (the "Supplemental Loans").

   (b) The Supplemental Loans shall be secured by all Collateral and shall be 
payable ON DEMAND. In any event, unless sooner demanded by Congress, all 
outstanding and unpaid obligations arising pursuant to the Supplemental Loans 
(including, but not limited to, principal, interest, fees, costs

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and expenses) shall automatically, without notice or demand, be absolutely 
and unconditionally due and payable in cash or other immediately available 
funds on July 31, 1996.

        6. Unused Line Fee. Effective as of April 8,
1996, Section 3.5 of the Accounts Agreement, as amended, is hereby further
amended by deleting all references to "$10,000,000" and replacing them with
"$20,000,000".

        7. Renewal Date. Section 9.1 of the Accounts Agreement,
as amended, is hereby further amended by deleting the first two sentences
thereof in their entirety and substituting the following therefor:

             "9.1 This Agreement shall become effective upon 
             acceptance by you and shall continue in force and effect for a 
             term ending June 30, 1998 (the "Renewal Date"), unless sooner 
             terminated pursuant to the terms hereof. You shall have the right 
             to terminate this Agreement immediately at any time upon the 
             occurrence of an Event of Default."

        8. Early Termination Fee. Section 9.2 of the Accounts 
Agreement, as amended, is hereby deleted in its entirety and replaced with 
the following:

              "9.2 If you terminate this Agreement upon the 
              occurrence of an Event of Default or at our request, in
              view of the impracticability and extreme difficulty of 
              ascertaining actual damages and by mutual agreement of 
              the parties as to a reasonable calculation of your lost 
              profits as a result thereof, we hereby agree that we 
              shall pay you, upon the effective date of such 
              termination, an early termination fee, in an amount equal 
              to: (i) $150,000 if such termination occurs on or prior to 
              June 30, 1997 or (ii) $100,000 if such termination occurs after 
              June 30, 1997 but prior to June 30, 1998."

        9. Inventory Loans.

             (a) During the period from May 1, 1996 through 
July 31, 1996, and only for such period, Section 2 of the letter re: 
Inventory Loans, dated December 31, 1994, by Borrower in favor of Congress  
 (the "Inventory Loan Letter") is hereby amended by replacing the 
reference to "fifty (50%) percent" with "sixty (60%) percent".

(b) Effective as of May 1, 1996, Section 3(b)
of the Inventory Loan Letter is hereby amended by deleting the 
reference to "$2,500,000" and replacing it with "$4,000,000".


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     10.  Letter of Credit Sublimit.  Effective as of May 1, 1996, Section 
1.5 of the Trade Financing Agreement Supplement to Accounts Agreement, dated 
June 16, 1992, by Borrower in favor of Congress is hereby amended by deleting 
the reference to "$6,000,000" and replacing it with "$8,000,000".

     11.  Fee.  In partial consideration of the extension of the term of the 
Financing Agreements, the Supplemental Loans, the increase in the Maximum 
Credit and the other modifications to the Financing Agreements as set forth 
herein, Borrower agrees to pay Congress a fee in an amount equal to $75,000, 
payable as of May 1, 1996, which fee is fully earned as of May 1, 1996.  At 
Congress' option, Congress may charge such fee directly to Borrower's loan 
account.

     12.  Conditions Precedent.  The effectiveness of the amendments to the 
Financing Agreements provided for herein shall only be effective upon the 
satisfaction of each of the following conditions precedent in a manner 
satisfactory to Congress:
 
     (a)  no Event of Default shall have occurred and be continuing and no 
event shall have occurred or condition be existing and continuing which, with 
notice or passage of time or both, would constitute an Event of Default;

     (b)  Congress shall have received, in form and substance satisfactory to 
Congress, an original of the Amended Term Note, duly authorized, executed and 
delivered by Borrower; and

     (c)  Congress shall have received, in form and substance satisfactory to 
Congress, an original of this Amendment, duly authorized, executed and 
delivered by Borrower, Ira Hechler, Robert Arnot, Gerald Lear, Eugene 
Wielepski, Gary Brashers and Stanley Keller.

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

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

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

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


                                       Very truly yours,

                                       I.C. ISAACS & COMPANY L.P.

                                       By: ISBUYCO, INC., General Partner

                                           By:  /s/ Robert Arnot
                                               --------------------------
                                           Title:     Chairman
                                                  -----------------------


Agreed and Accepted:

CONGRESS FINANCIAL CORPORATION

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


ACKNOWLEDGED:

   /s/ Ira Hechler
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IRA HECHLER

   /s/ Robert Arnot
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ROBERT ARNOT

   /s/ Gerald Lear
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GERALD LEAR

   /s/ Eugene Wielepski
------------------------------
EUGENE WIELEPSKI

   /s/ Gary Brashers
------------------------------
GARY BRASHERS

   /s/ Stanley Keller
------------------------------
STANLEY KELLER


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