<PAGE>

                                                                    EXHIBIT 10.3

                      ASSIGNMENT AND ASSUMPTION AGREEMENT
                      -----------------------------------

          ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement") dated as of
August __, 1999 by and between GIANT GROUP, LTD. ("Assignor"), having an address
at 9000 Sunset Blvd., Los Angeles, California 90069 and PERISCOPE SPORTSWEAR,
INC. ("Assignee"), having an address at 1407 Broadway, Suite 620, New York, New
York 10018.

                                 BACKGROUND
                                 ----------

          Assignor and Century Business Credit Corporation ("Century") are
parties to Letter of Credit Security Agreement dated May 26, 1999 (the "Letter
of Credit Agreement") pursuant to which Century caused the opening of letters of
credit on behalf of Assignor.  The letters of credit opened by Century on behalf
of Assignor pursuant to the Letter of Credit Agreement covered goods to be
purchased for the benefit of Assignee, which is a wholly-owned subsidiary of
Assignor.

          Assignee and Century are entering into a Factoring Agreement (the
"Factoring Agreement"), Supplement Letter of Credit Security Agreement and
related agreements, dated as of the date hereof (collectively, the "Assignee
Documents") pursuant to which Century is establishing a factoring arrangement
for the benefit of Assignee and providing for the issuance of letters of credit
on Assignee's behalf.

          In connection with the transactions contemplated by the Assignee
Documents, Assignor has agreed to assign to Assignee all of Assignor's rights
and obligations under the Letter of Credit Agreement and Assignee has agreed to
assume all of Assignor's obligations to Century under the Letter of Credit
Agreement, in each case on the terms and conditions set forth in this Agreement.

          NOW, THEREFORE, in consideration of the foregoing and for other
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

          A.  Assignment
              -----------

          1.  As of the date hereof, Assignor hereby assigns, transfers, sells,
conveys and sets over unto Assignee, without recourse, all of Assignor's rights
under the Letter of Credit Agreement and all of Assignor's right, title and
interest in and to all goods shipped under, pursuant to, or in connection with
each letter of credit issued under the Letter of Credit Agreement, the proceeds
thereof and all warehouse receipts, bills of lading, shipping documents,
documents of title, chattel paper and instruments accompanying or relating to
any such letter of credit.

          2.  Assignor hereby acknowledges that it will from time to time after
the date hereof, upon request of Assignee or Century, execute and deliver such
further documents, instruments and agreements and take such further action as
Assignee or Century may request to effectuate the assignment contemplated
hereby.
<PAGE>

          B.  Assumption and Adoption
              -----------------------

          1.  Assignee hereby (a) assumes in full the payment and performance of
all of Assignor's obligations under the Letter of Credit Agreement and (b)
adopts all of the provisions, terms and conditions contained in the Letter of
Credit Agreement as if the Letter of Credit Agreement was entered into by and
between Assignee and Century.

          2.  Assignee hereby acknowledges that (a) it will from time to time
after the date hereof, upon request of Assignor or Century, execute and deliver
such further documents, instruments and agreements and take such further action
as Assignor or Century may request to effectuate the assumption and adoption
contemplated hereby and (b) all obligations of Assignor assumed by Assignee
hereunder shall be deemed Obligations under and as defined in the Factoring
Agreement and shall be secured by the Collateral (as such terms is defined in
the Factoring Agreement).

          C.  Miscellaneous
              -------------

          1.  This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to conflicts of law
principles.

          2.  EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREBY.

          3.  On the effective date of this Agreement and upon consummation of
the transactions contemplated by the Factoring Agreement, Century shall and by
this letter hereby does (a) release Assignor from any and all liability under
the Letter of Credit Agreement and (b) terminate the Cash Collateral Deposit
Letter dated May 26, 1999 between Century and Assignor and shall return to
Assignor the cash collateral pledged thereunder.



               [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

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

                                 GIANT GROUP, LTD.


                                 By: /s/ David Gotterer
                                    -------------------
                                    Name: David Gotterer
                                    Title: Vice Chairman


                                 PERISCOPE SPORTSWEAR, INC.


                                 By: /s/ Glenn Sands
                                     ---------------
                                     Name: Glenn Sands
                                     Title: President

AGREED TO:

CENTURY BUSINESS CREDIT
 CORPORATION

By: /s/ Andrew H. Tananbaum
    -----------------------
   Name: Andrew H. Tananbaum
   Title: President