AMENDED AND RESTATED

                                   INVESTMENT

                                       AND

                                DEPOSIT AGREEMENT

                           Dated as of March 29, 2000

                                     between

                        Vestar Capital Partners III, L.P.

                                       and

                                                  BANK OF AMERICA, N. A.,
                        in its capacity as Agent for the Lenders herein defined



<PAGE>


ii


                                TABLE OF CONTENTS

SECTION 1 DEFINITIONS                                                   3
         Section 1.1       Definitions.                                 3
         Section 1.2       Terms Generally.                             5
         Section 1.3       Accounting Terms.                            5
SECTION 2 MANDATORY INVESTMENTS                                         5
         Section 2.1       Leverage Reduction relating to Shirt Group
                           Restructuring or Vestar Default.             5
         Section 2.2       Leverage Reduction in Bankruptcy.            7
         Section 2.3       Cash Collateral Account.                     7
         Section 2.4       Limitation on Investment Obligations.        7
SECTION 3 CONDITIONS                                                    8
         Section 3.1       Conditions to Effectiveness.                 8
SECTION 4 DEPOSIT OF CAPITAL CALL NOTICES WITH AGENT                    9
         Section 4.1       Deposit of Capital Call Notices.             9
SECTION 5 REPRESENTATIONS AND WARRANTIES                                9
         Section 5.1       Existence and Power.                         9
         Section 5.2       Authorization.                               9
         Section 5.3       No Conflicts.                                10
         Section 5.4       Consents.                                    10
         Section 5.5       Enforceable Obligations.                     10
         Section 5.6       Permitted Investment.                        10
         Section 5.7       Venture Capital Operating Company.           10
         Section 5.8       Deposited Notices.                           10
         Section 5.9       Limitations on Actions.                      11
SECTION 6 AFFIRMATIVE COVENANTS                                         11
         Section 6.1       Outstanding Subscriptions.                   11
         Section 6.2       General Partner.                             11
         Section 6.3       Plan Assets, etc.                            11
         Section 6.4       Receipt of the Funds Pursuant to the
                           Deposited Notices.                           11
         Section 6.5       Partners and Pro Rata Shares.                11
SECTION 7 NEGATIVE COVENANTS                                            11
         Section 7.1       Limitations on Actions.                      12
SECTION 8 EVENTS OF DEFAULT                                             12
         Section 8.1       Events of Default.                           12
         Section 8.2       Remedies.                                    13
         Section 8.3       Receipt of the Funds Pursuant to the
                           Deposited Notices.                           13
SECTION 9 MISCELLANEOUS                                                 13
         Section 9.1       Notices.                                     13
         Section 9.2       Payments.                                    15
         Section 9.3       Benefit of Agreement.                        15
         Section 9.4       No Waiver; Remedies Cumulative.              15
         Section 9.5       Payment of Expenses, etc.                    15
         Section 9.6       Amendments, Waivers and Consents.            16
         Section 9.7       Counterparts.                                16
         Section 9.8       Headings.                                    16
         Section 9.9       Survival.                                    16
         Section 9.10      Governing Law; Submission to Jurisdiction;
                           Venue.                                       16
         Section 9.11      Severability.                                17
         Section 9.12      Entirety.                                    17
         Section 9.13      Binding Effect; Termination.                 17
         Section 9.14      Limitation on Recourse.                      17
         Section 9.15      Confidentiality.                             18


                                     ANNEXES

Exhibit A                  Form of Capital Call Notice
Exhibit B                  Terms of Preferred Stock
Exhibit C                  Terms of Subordination



<PAGE>






                              AMENDED AND RESTATED

                                   INVESTMENT

                                       AND

                                DEPOSIT AGREEMENT

         THIS AMENDED AND RESTATED INVESTMENT AND DEPOSIT AGREEMENT, dated as of
March 29, 2000 (the  "Agreement"),  amends and restates that certain  Investment
and Deposit  Agreement  dated as of September  30, 1999 by and among the parties
hereto (the "Existing  Investment and Deposit  Agreement"),  and is executed and
entered  into by and between  Vestar  Capital  Partners  III,  L.P.,  a Delaware
limited partnership (the "Sponsor"),  and Bank of America,  N.A. (formerly known
as  NationsBank,  N.A.),  in its  capacity as Agent  under the Credit  Agreement
hereinafter defined (in such capacity, the "Agent").

                               W I T N E S S E T H

               WHEREAS, Cluett American Corp. (the "Borrower"),  Cluett American
          Investment  Corp.  (the "Parent"),  Cluett  American  Group,  --------
          ------ Inc.  ("Interco"),  the Subsidiary  Guarantors parties thereto,
          the  Lenders   parties   thereto  and  Gleacher   NatWest   Inc.,   as
          Documentation  -------  Agent,  have entered into that certain  Credit
          Agreement  dated as of May 18,  1998 and  amended as of May 27,  1998,
          December  18,  1998,  March 19,  1999 and  September  30,  1999 (as so
          previously   amended,   the   "Existing   Credit   Agreement");    and

         WHEREAS,  the parties to the Existing  Credit  Agreement have agreed to
further amend the Existing Credit  Agreement by entering into that certain Fifth
Amendment, dated as of the date hereof (such amendment herein referred to as the
"Fifth  Amendment"  and,  together  with the Existing  Credit  Agreement and any
further  amendments  entered into  subsequent  to the date  hereof,  the "Credit
Agreement"); and

         WHEREAS,  as a condition to the  effectiveness  of the Fifth Amendment,
the Lenders have required that the Existing  Investment and Deposit Agreement be
amended and restated in the manner set forth below;

         NOW,  THEREFORE,  for  and in  consideration  of the  mutual  promises,
covenants and representations and warranties contained herein and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  and intending to be legally  bound,  the parties  hereto agree as
follows:

                                                                   SECTION 1
                                                                  DEFINITIONS

Section 1.1  Definitions.

         All  capitalized  terms not  defined in this  Agreement  shall have the
meanings  ascribed  to  such  terms  in the  Credit  Agreement.  As used in this
Agreement,  the following  terms shall have the meanings  specified below unless
the context otherwise requires:

                  "Amendment  No. 5  Effective  Date"  shall  have  the  meaning
assigned to such term in the Fifth Amendment.

                  "Capital Call Notice"  means a capital call notice  satisfying
         the  requirements  of  Section  3.1 of the  Partnership  Agreement  and
         substantially in the form of Exhibit A attached hereto.

                  "Cash  Collateral  Account" shall have the meaning assigned to
such term in Section 2.3.

                  "Deposited  Notices"  means  a  collective  reference  to  the
         Capital Call Notices  delivered by the Sponsor to the Agent pursuant to
         Section 3.1(b) and maintained on deposit with the Agent as contemplated
         by Section 4.1.

                  "Event of Default" means such term as defined in Section 8.1.

                  "General  Partner"  means  Vestar   Associates   III,  L.P., a
         Delaware  limited  partnership,  as general  partner of the
                   ----------------
         Sponsor.

                  "Investment Commitment" means, on any date, $30,000,000 minus,
         without duplication, the sum of (i) the aggregate outstanding principal
         amount of the Tranche C  Obligations  on such date,  (ii) the aggregate
         amount of  payments  made by, or on behalf  of, the  Sponsor  after the
         Amendment No. 5 Effective  Date through and  including  such date which
         permanently  reduce  the  Tranche  C  Commitment  (including,   without
         limitation,  pursuant  to  payments  under the  Tranche C Guaranty  and
         payments   made  in  order  to  cash   collateralize   Tranche   C  LOC
         Obligations),  (iii) the aggregate amount of capital contributions made
         by, or on behalf of, the Sponsor to the Parent after the  Amendment No.
         5 Effective  Date through and including such date which are used by the
         Borrower to make a mandatory  prepayment of the Loans outstanding under
         the Credit Agreement pursuant to Section  3.3(b)(v)(B) thereof and (iv)
         the  aggregate   amount  of  Credit  Party   Obligations   in  which  a
         participation  interest  has been  purchased  by, or on behalf  of, the
         Sponsor pursuant to Section 2.1(c) or Section 2.2(c).

                  "Limited Partners" means the limited partners of the Sponsor.

                  "Mandatory  Investment" means a capital contribution by, or on
         behalf  of,  the  Sponsor  to  the  Parent  in  Dollars  and  in  funds
         immediately available to the Parent on the terms set forth in Exhibit B
         attached hereto made for the purpose of enabling the Borrower to make a
         mandatory   prepayment  of  the  Loans  outstanding  under  the  Credit
         Agreement pursuant to Section 3.3(b)(v)(B) thereof.

                  "Material  Adverse Effect" means a material  adverse effect on
         (i) the  condition  (financial  or  otherwise),  operations,  business,
         assets,  liabilities or results of operations of the Sponsor,  (ii) the
         ability of the Sponsor to perform any  material  obligation  under this
         Agreement  or (iii) the rights  and  remedies  of the Agent  under this
         Agreement.

                  "Obligations"   means,  with  respect  to  the  Sponsor,   all
         Indebtedness,   all  other  obligations  that  would  be  reflected  as
         liabilities  on a balance  sheet of the Sponsor and the purchase  price
         that the Sponsor  (directly or indirectly,  including,  but not limited
         to, through any  Subsidiary of the Sponsor) or the General  Partner has
         agreed,  pursuant to a binding  contract,  to pay for any investment or
         acquisition that has not yet closed.  The Obligations of the Sponsor on
         any date  shall  include  (i) the  obligations  of the  Sponsor to make
         Mandatory  Investments  (and other  payments  to the Agent  pursuant to
         Section  2.1  or  Section  2.2)  in  an  amount  up to  the  Investment
         Commitment  on such date and any and all other payment  obligations  of
         the  Sponsor  to the  Agent  (on  behalf  of the  Lenders)  under  this
         Agreement on such date and (ii) the  obligations  of the Sponsor  under
         the Tranche C Guaranty.

                  "Partners" means a collective reference to the General Partner
         and the Limited Partners.

                  "Partnership Agreement" means that certain limited partnership
         agreement, dated as of November 22, 1996, among the General Partner and
         the individuals and entities party thereto, as limited partners.

                  "Plan Asset  Regulations"  means the plan asset regulations of
         the Department of Labor, 29 CFR ss.2510.3-101 et seq., as amended,  and
         the advisory opinions and rulings issued thereunder.

                  "Pro Rata Share"  means,  with  respect to any  Partner,  such
         Partner's   share,   expressed  as  a  percentage,   of  the  aggregate
         obligations of all of the Partners to make capital contributions to the
         Sponsor in accordance with the terms of the Partnership Agreement.  The
         Pro Rata Share of each Partner  shall be based on the  proportion  that
         such Partner's  Total Capital  Commitment  bears to the aggregate Total
         Capital Commitments of all of the Partners. In determining the Pro Rata
         Shares of the Partners for purposes of completing  Deposited Notices as
         contemplated by Section 8.2, the Agent shall (and shall be entitled to)
         rely on the  information  delivered  to the Agent  pursuant  to Section
         3.1(f)  unless the Sponsor  shall have  provided the Agent with updated
         information regarding Pro Rata Shares pursuant to Section 6.5, in which
         case the Agent  shall (and shall be entitled  to) rely on such  updated
         information.

                  "Subsidiary" means, at any time, (i) any corporation more than
         50% of whose  Equity  Interests  of any class or classes  having by the
         terms  thereof  ordinary  voting  power  to  elect  a  majority  of the
         directors of such  corporation  (irrespective of whether or not at such
         time, any class or classes of such corporation shall have or might have
         voting power by reason of the happening of any  contingency) is at such
         time owned by the Sponsor, directly or indirectly through Subsidiaries,
         and (ii) any partnership, association, joint venture or other entity of
         which the Sponsor, directly or indirectly through Subsidiaries, owns at
         such time more than 50% of the Equity Interests.

                  "Total Capital  Commitment" means, with respect to any Limited
         Partner,  an amount equal to the total amount of capital  contributions
         that such Limited Partner is obligated to make to the Sponsor  pursuant
         to the terms of the Partnership Agreement.

Section 1.2  Terms Generally.

                    All references  herein to Articles,  Sections,  Exhibits and
          Schedules shall be deemed  references to Articles and Sections of, and
          Exhibits and  Schedules  to, this  Agreement  unless the context shall
          otherwise  require.  For  purposes of  computation  of periods of time
          hereunder,  the word "from" means "from and  including"  and the words
          "to" and "until" each mean "to but excluding."

Section 1.3  Accounting Terms.

         Except as otherwise  expressly  provided  herein,  all accounting terms
used herein shall be interpreted in accordance with GAAP.

                                    SECTION 2

                              MANDATORY INVESTMENTS

Section 2.1  Leverage Reduction relating to  Shirt Group Restructuring or Vestar
             Default.
            --------------------------------------------------------------------

                  (a) In the  event  that the  Leverage  Reduction  Requirements
         shall not have been satisfied by the last day of the Leverage Reduction
         Period, the Sponsor shall make a Mandatory Investment on such day in an
         amount  equal to (i) if the Shirt Group  Restructuring  shall have been
         consummated by such date, the amount  necessary (after giving effect to
         all prepayments made pursuant to Section  3.3(b)(iii)(A)  of the Credit
         Agreement  after  the  Amendment  No.  5  Effective  Date  through  and
         including such date) to enable  satisfaction of the Leverage  Reduction
         Requirements  or (ii) if the Shirt Group  Restructuring  shall not have
         been consummated by such date, the then current Investment Commitment.

                  (b) Upon the occurrence of any Event of Default hereunder, the
         Sponsor  immediately  shall,  upon written demand by the Agent,  make a
         Mandatory  Investment in an amount equal to the then current Investment
         Commitment.

                  (c) The  Sponsor  may,  at its  option,  in lieu of  making  a
         Mandatory Investment required by Section 2.1(a)(i), pay directly to the
         Agent and direct the Agent to purchase on behalf of the Sponsor,  on or
         before the time that such Mandatory  Investment is required to be made,
         an  undivided,  non-voting  participation  interest in the Credit Party
         Obligations then outstanding  under the Credit Documents for a purchase
         price equal to the amount of the Mandatory  Investment  that  otherwise
         would have been  required.  The Sponsor may, at its option,  in lieu of
         making a  portion  of the  Mandatory  Investment  required  by  Section
         2.1(a)(ii) in an amount equal to the amount of the prepayment  required
         to be made on the last day of the Leverage Reduction Period pursuant to
         Section 3.3(c) of the Credit  Agreement,  pay directly to the Agent and
         direct the Agent to purchase on behalf of the Sponsor, on or before the
         time  that  such  Mandatory  Investment  is  required  to be  made,  an
         undivided,  non-voting  participation  interest  in  the  Credit  Party
         Obligations then outstanding  under the Credit Documents for a purchase
         price equal to the amount of the prepayment  required to be made on the
         last day of the Leverage Reduction Period pursuant to Section 3.3(c) of
         the Credit Agreement.  Any  participation  interest in the Credit Party
         Obligations  acquired on behalf of the Sponsor in  accordance  with the
         terms of this  Section  2.1(c)  shall be  subject  to an  intercreditor
         agreement   with  the  Agent  on  behalf  of  the  Lenders   containing
         substantially the terms and conditions set forth on Exhibit C.

                  (d) In the event that the Sponsor  shall fail,  at its option,
         to either (A) make a Mandatory Investment when due as required pursuant
         to Section  2.1(a) or Section  2.1(b) or (B) to the extent  applicable,
         make a payment to the Agent for the  purchase  on behalf of the Sponsor
         of a  participation  interest  in the Credit  Party  Obligations  on or
         before the time that such  Mandatory  Investment is required to be made
         in  accordance  with the terms of Section  2.1(c),  the Sponsor  hereby
         promises to pay on demand to the Agent (for the benefit of the Lenders)
         an  amount  equal  to the  amount  of  the  Mandatory  Investment  that
         otherwise would have been required.

                  (e) All amounts  paid by the Sponsor to the Agent  pursuant to
         Section  2.1(a) or  Section  2.1(b)  shall be  applied  by the Agent on
         behalf of the Lenders to the prepayment of the Loans  outstanding under
         the  Credit   Agreement  in  accordance   with  the  terms  of  Section
         3.3(b)(v)(B)  thereof.  Subject  to the terms of  Section  2.1(f),  all
         amounts  paid by the Sponsor to the Agent  pursuant  to Section  2.1(c)
         shall be applied  by the Agent on behalf of the  Lenders to pay for the
         purchase  by the  Sponsor  of an  undivided,  non-voting  participation
         interest in the Credit Party  Obligations  then  outstanding  under the
         Credit Documents which shall be subject to an  intercreditor  agreement
         with the Agent on behalf of the Lenders  containing  substantially  the
         terms and conditions set forth on Exhibit C and, in making the purchase
         of such participation  interest in the Credit Party Obligations,  shall
         be  applied  (i) in the case of any such  payment  pursuant  to Section
         2.1(c)  made in lieu of a  Mandatory  Investment  required  by  Section
         2.1(a)(i),  in the  same  manner  prescribed  for  the  application  of
         prepayment proceeds under Section 3.3(b)(vi)(D) of the Credit Agreement
         and (ii) in the case of any such  payment  pursuant  to Section  2.1(c)
         made in lieu of a portion of a Mandatory Investment required by Section
         2.1(a)(ii),  in the  same  manner  prescribed  for the  application  of
         prepayment   proceeds  under  Section   3.3(b)(vi)(C)   of  the  Credit
         Agreement.

                  (f)  Notwithstanding  any provision to the contrary  contained
         herein or in the Credit  Agreement,  amounts paid by the Sponsor to the
         Agent  pursuant to Section  2.1(c)  shall not be applied to pay for the
         purchase  on behalf of the Sponsor of a  participation  interest in any
         Swingline Loans, Revolving Loans or LOC Obligations (or cash collateral
         therefor),  and, to the extent that any provision of this  Agreement or
         the Credit Agreement  provides for such amounts to be so applied,  such
         amounts instead shall be applied,  at the Sponsor's option,  either (i)
         to the pro rata  prepayment  of (A) the  Swingline  Loans  (without any
         reduction  in the  Revolving  Committed  Amount) and (B) the  Revolving
         Loans  and,  after all  Revolving  Loans  have been  repaid,  to a cash
         collateral account in respect of LOC Obligations (without any reduction
         in the Revolving  Committed Amount),  in which case such proceeds shall
         be deemed to constitute a Mandatory Investment,  or (ii) to purchase an
         undivided,  non-voting  participation  interest  in the Term Loans then
         outstanding under the Credit Documents,  such participation interest to
         be subject to an  intercreditor  agreement  with the Agent on behalf of
         the Lenders containing substantially the terms and conditions set forth
         on Exhibit C and the purchase price of such  participation  interest to
         be  applied  in the  same  manner  prescribed  for the  application  of
         prepayment   proceeds  under  Section   3.3(b)(vi)(C)   of  the  Credit
         Agreement.

Section 2.2  Leverage Reduction in Bankruptcy.

         Notwithstanding any provision to contrary set forth in this Agreement:

                  (a) The obligations of the Sponsor under Section 2.1 shall not
         be  satisfied  by the making of a  Mandatory  Investment  (or any other
         capital  contribution  to or  investment  in the  Parent  or any of the
         Consolidated  Parties) at any time after the Business  Day  immediately
         preceding  the first day that a  Bankruptcy  Event with  respect to the
         Parent or the Borrower shall have occurred.

                  (b) If a  Bankruptcy  Event with  respect to the Parent or the
         Borrower shall occur prior to the end of the Leverage Reduction Period,
         the Sponsor  hereby  promises to pay  immediately to the Agent (for the
         benefit of the Lenders) an amount equal to the then current  Investment
         Commitment.

                  (c) All amounts  paid by the Sponsor to the Agent  pursuant to
         this  Section  2.2  immediately  shall be applied by the Agent (for the
         benefit of the  Lenders)  to pay for the  purchase by the Sponsor of an
         undivided,  non-voting  participation  interest  in  the  Credit  Party
         Obligations  then  outstanding  under  the  Credit  Documents  shall be
         subject to an  intercreditor  agreement with the Agent on behalf of the
         Lenders containing  substantially the terms and conditions set forth on
         Exhibit C and, in making the purchase of such participation interest in
         the Credit  Party  Obligations,  shall be  applied  in the same  manner
         prescribed  for the  application  of prepayment  proceeds under Section
         3.3(b)(vi)(E) of the Credit Agreement.

Section 2.3  Cash Collateral Account.

                    To the extent that the Sponsor shall have deposited with the
          Agent on June 30, 2000 cash and/or Cash  Equivalents  in an  aggregate
          amount at least equal to the  Investment  Commitment  as of such date,
          the Leverage  Reduction Period shall be extended until August 31, 2000
          as provided in the definition of the term "Leverage  Reduction Period"
          set forth in Section 1.1 of the Credit Agreement. All cash and/or Cash
          Equivalents  so deposited with the Agent shall be held by the Agent in
          a cash collateral  account subject to the sole dominion and control of
          the Agent (the "Cash  Collateral  Account")  until this  Agreement  is
          terminated in accordance  with the terms of Section 9.13.  The Sponsor
          hereby  authorizes  the Agent to apply  amounts on deposit in the Cash
          Collateral Account to the payment, on behalf of the Sponsor,  when due
          of  all  amounts   payable  under  Section  2.1  or  Section  2.2,  as
          applicable,  and, in the case of amounts  payable under Section 2.1(a)
          or  Section  2.1(c) (in lieu of a  Mandatory  Investment  (or  portion
          thereof)  required by Section 2.1(a)),  if so directed by the Sponsor,
          the  amount so applied  by the Agent  shall be used by the  Agent,  on
          behalf of the  Sponsor,  to purchase  participation  interests  in the
          Credit Party Obligations  pursuant to Section 2.1(c),  and any balance
          remaining in the Cash Collateral Account promptly shall be turned over
          by the Agent to the  Sponsor in such manner as the Sponsor at the time
          shall specify to the Agent. At the request of the Sponsor,  amounts on
          deposit in the Cash Collateral  Account shall be invested by the Agent
          in Cash  Equivalents.  Any income earned on such Cash Equivalents will
          be for the account of the Sponsor  and shall be  distributed  not less
          than  quarterly  by the Agent to the  Sponsor.  To the extent that any
          loss is incurred in respect of such investments by the Agent on behalf
          of the Sponsor,  the Sponsor not less than  quarterly  will deliver to
          the Agent,  for  deposit in the Cash  Collateral  Account,  additional
          amounts sufficient to offset such losses.

Section 2.4  Limitation on Investment Obligations.

                    Notwithstanding  any provision to contrary set forth in this
          Agreement,  the  Sponsor  shall not be  obligated  at any time to make
          Mandatory  Investments (or any other payments to the Agent pursuant to
          Section 2.1 or Section  2.2) in an amount in excess of the  Investment
          Commitment at such time.
                                    SECTION 3
                                   CONDITIONS

Section 3.1  Conditions to Effectiveness.

                    This Agreement shall become effective on the Amendment No. 5
          Effective Date provided the following conditions are satisfied in form
          and substance reasonably acceptable to the Agent:

                  (a)      Execution of this  Agreement.  Receipt  by  the Agent
         of an executed copy of this  Agreement  signed by a duly
                           ----------------------------
         authorized officer of the General Partner.

                  (b)  Deposited  Notices.  Receipt by the Agent of an  original
         Capital Call Notice for each Limited Partner,  in each case executed by
         the  General  Partner and  uncompleted  in respect of the amount of the
         total capital  contribution  to be made by all of the Limited  Partners
         pursuant  to such  Capital  Call  Notices  and the  applicable  Limited
         Partner's  Pro Rata  Share of such  total  capital  contribution.  Upon
         satisfaction  of the  requirements  of this clause (b), the Agent shall
         promptly  return to the  Sponsor  the  original  Capital  Call  Notices
         delivered to the Agent pursuant to the Existing  Investment and Deposit
         Agreement.

                  (c)      Legal Opinion.  Receipt of a legal opinion of Simpson
         Thacher & Bartlett,  counsel for the Sponsor,  in form
                           -------------
         and substance reasonably satisfactory to the Agent.

                  (d)  Partnership  Documents.  Receipt  by  the  Agent  of  all
         documents  reasonably  requested by the Agent relating to the existence
         of the Sponsor,  the enforceability of this Agreement and the Deposited
         Notices  and other  matters  relating  thereto,  in form and  substance
         satisfactory to the Agent, including, but not limited to:

                           (i)  Certificates of  Authorization.  Certificates of
                  authorization of the General Partner as of the Amendment No. 5
                  Effective Date,  approving and adopting this Agreement and the
                  delivery  of  the  Deposited   Notices  and   authorizing  the
                  execution  and  delivery  thereof  by the  General  Partner on
                  behalf of the Sponsor.

                           (ii)  Partnership  Agreement.  A  certificate  of the
                  President or any duly authorized  officer and Secretary of the
                  general partner of the General Partner providing that the copy
                  of the  Partnership  Agreement,  together with all  amendments
                  thereto,  delivered  to  the  Agent  in  connection  with  the
                  Existing  Investment  and  Deposit  Agreement  is a  true  and
                  complete copy of the Partnership Agreement and that there have
                  been no amendments to the Partnership Agreement since the date
                  of the Existing Investment and Deposit Agreement.

                           (iii)   Incumbency    Certificate.    An   incumbency
                  certificate  of the President or any duly  authorized  officer
                  and  Secretary of the general  partner of the General  Partner
                  who will be executing this Agreement, any Deposited Notice, or
                  any other document,  instrument or certificate to be delivered
                  pursuant to the terms hereof  (including  the name,  title and
                  signature of each such officer).

                  (e)  Total  Capital  Commitments.  Receipt  by the  Agent of a
         certificate  executed  by an  officer  of the  general  partner  of the
         General  Partner  on  behalf  of the  Sponsor,  in form  and  substance
         satisfactory  to the Agent,  stating that the  aggregate  Total Capital
         Commitments of all Limited Partners as of the Amendment No. 5 Effective
         Date equals or exceeds the sum of (i) the  Investment  Commitment  plus
         (ii) all other Obligations of the Sponsor.

                  (f) Partners  and Pro Rata  Shares.  Receipt by the Agent of a
         certificate  executed  by an  officer  of the  general  partner  of the
         General  Partner  on  behalf  of the  Sponsor,  in form  and  substance
         satisfactory to the Agent, setting forth a list of Limited Partners and
         their  respective  Pro Rata Shares as of the  Amendment No. 5 Effective
         Date. Except as otherwise permitted under Section 9.15, the information
         contained in the certificate  delivered to the Agent as contemplated by
         this  Section  3.1(f)  shall not be disclosed by the Agent to any other
         Person (including,  without limitation,  the Lenders) without the prior
         written consent of the Sponsor.

                                    SECTION 4

                   DEPOSIT OF CAPITAL CALL NOTICES WITH AGENT

Section 4.1  Deposit of Capital Call Notices.

                    The Sponsor  hereby  agrees  that each of the  Capital  Call
          Notices  delivered  by the  Sponsor to the Agent  pursuant  to Section
          3.1(b) shall be held by the Agent on deposit and shall be delivered by
          the Agent to the Partners  only under the  circumstances  contemplated
          by, and otherwise in accordance with the terms of, Section 8.2.

                                    SECTION 5

                         REPRESENTATIONS AND WARRANTIES

                    The Sponsor hereby represents and warrants to the Agent (for
          the benefit of the Lenders) that:

Section 5.1  Existence and Power.

                  (a) Each of the Sponsor  and the General  Partner is a limited
         partnership duly organized, validly existing and in good standing under
         the laws of the State of Delaware, and is in good standing as a foreign
         limited  partnership in each other  jurisdiction where ownership of its
         properties  or the conduct of its  business  requires it to be so other
         than in such  jurisdictions  where failure to be in good standing could
         not reasonably be expected to have a Material  Adverse Effect,  and has
         all power and authority under such laws and its  partnership  agreement
         and all material governmental  licenses,  authorizations,  consents and
         approvals required to carry on its business as now conducted.

                  (b) The  general  partner of the  General  Partner (i) is duly
         incorporated,  validly  existing and in good standing under the laws of
         the state of its  incorporation,  (ii) has all corporate power pursuant
         to proper  authorization  to enable it to act as the general partner of
         the General  Partner and to enter into this  Agreement on the Sponsor's
         behalf,  and  (iii) is duly  qualified  to do  business  and is in good
         standing  in  each  other  jurisdiction  where  it  is  required  to be
         qualified  in  order  to act  as the  general  partner  of the  General
         Partner,  other than in such  jurisdiction  where the  failure to be so
         qualified and in good standing could not reasonably be expected to have
         a Material Adverse Effect.

Section 5.2  Authorization.

                    The Sponsor has the partnership or other necessary power and
          authority,  and the legal right,  to enter into this  Agreement and to
          perform its  obligations  hereunder and  consummate  the  transactions
          contemplated  hereby  and has by proper  action  duly  authorized  the
          execution and delivery of this  Agreement  and the Deposited  Notices.
          Without  limiting  the  generality  of the above,  the  Sponsor has by
          proper action duly authorized (i) the execution and delivery of one or
          more  Capital  Call  Notices  to each  Partner  in  order  to fund the
          obligations  of the Sponsor to make Mandatory  Investments  (and other
          payments  to the Agent  pursuant  to Section  2.1 or  Section  2.2) in
          accordance  with the terms of this  Agreement,  (ii) the depositing of
          such Capital Call Notices with the Agent in the manner contemplated by
          Section 4.1 and (iii) the  authorizing  of the Agent to  complete  and
          deliver  such  Capital  Call  Notices  on  behalf  of the  Sponsor  in
          accordance with the terms of Section 8.2.

Section 5.3  No Conflicts.

                    Neither the execution and delivery of this Agreement nor the
          consummation of the transactions  contemplated herein, nor performance
          of and  compliance  with the  terms  and  provisions  hereof  will (i)
          violate or conflict with any provision of the Partnership Agreement or
          other governance document,  (ii) violate any material law, regulation,
          order, writ, judgment,  injunction, decree or permit applicable to it,
          (iii) violate or conflict with contractual  provisions of, or cause an
          event of default under, any indenture, loan agreement,  mortgage, deed
          of trust,  contract or other  agreement or instrument to which it is a
          party  or by which  it may be  bound,  the  violation  of which  could
          reasonably be expected to have a Material Adverse Effect,  (iv) result
          in or require  the  creation of any lien,  security  interest or other
          charge  or  encumbrance  (other  than  those  contemplated  in  or  in
          connection  with this Agreement) upon or with respect to the Sponsor's
          properties.

Section 5.4  Consents.

                    No consent, approval,  authorization or order of, or filing,
          registration  or   qualification   with,  any  court  or  Governmental
          Authority  or  other  Person  is  required  in  connection   with  the
          execution,  delivery  or  performance  of this  Agreement  or with the
          execution and delivery of the Deposited Notices.

Section 5.5  Enforceable Obligations.

                    This  Agreement  has been duly executed and delivered by the
          Sponsor and constitutes  legal,  valid and binding  obligations of the
          Sponsor,   enforceable  in  accordance  with  its  terms,  subject  to
          applicable    bankruptcy,     insolvency,    fraudulent    conveyance,
          reorganization,   moratorium  or  laws  affecting   creditors'  rights
          generally and subject to general  principles of equity,  regardless of
          whether  considered  in  proceedings  in  equity  or at law  and by an
          implied covenant of good faith and fair dealing.

Section 5.6  Permitted Investment.

                    (a) The  incurrence  of the  obligations  of the Sponsor set
          forth in this Agreement and the making by the Sponsor of any Mandatory
          Investment (and other payments to the Agent pursuant to Section 2.1 or
          Section 2.2) are permitted by the Partnership  Agreement,  and (b) the
          Limited  Partners  shall  be  obligated  to  make  additional  capital
          contributions (each in a pro rata amount in proportion to such Limited
          Partner's Total Capital Commitment) for the purpose of providing funds
          to or for the account of the Sponsor in an aggregate amount sufficient
          to pay in full the amount  required to satisfy the  obligation  of the
          Sponsor to make Mandatory Investments (and other payments to the Agent
          pursuant to Section 2.1 or Section 2.2) in an  aggregate  amount of up
          to the Investment Commitment, if so requested by the General Partner.

Section 5.7  Venture Capital Operating Company.

                    The Sponsor is a venture  capital  operating  company within
          the meaning of the Plan Asset  Regulations,  or, the Sponsor satisfies
          another  exception  under  the Plan  Asset  Regulations  such that the
          assets of the Sponsor are not "plan assets"  within the meaning and as
          defined in the Plan Asset Regulations.

Section 5.8  Deposited Notices.

                    Each  Deposited  Notice,  when  completed  by the  Agent and
          delivered by the Agent to the applicable Limited Partner in accordance
          with the terms of Section 8.2 and the  definition  of "Pro Rata Share"
          set forth in Section 1.1, will give rise to a legal, valid and binding
          obligation  on the part of such  Limited  Partner to pay such  Limited
          Partner's Pro Rata Share of each Mandatory  Investment (and each other
          payment  to  the  Agent  pursuant  to  Section  2.1 or  Section  2.2),
          enforceable  against such Limited Partner in accordance with the terms
          of such Deposited Notice and the Partnership Agreement.

Section 5.9  Limitations on Actions.

                    The  Sponsor  is not  aware of any event or  condition  that
          could (i) have a material adverse effect on the ability of the Sponsor
          to perform its obligations  under this Agreement,  (ii) render invalid
          or  unenforceable  any of the  Deposited  Notices  or (iii)  otherwise
          modify  the  obligations  of any of the  Partners  and/or  any  Person
          becoming  Partners  subsequent to the date hereof which arise upon the
          due delivery of, and as contemplated by, the Deposited Notices.

                                    SECTION 6

                              AFFIRMATIVE COVENANTS

                    The Sponsor hereby covenants and agrees that so long as this
          Agreement is in effect:

Section 6.1  Outstanding Subscriptions.

                    At all times prior to the  termination  of this Agreement in
          accordance  with the terms of Section 9.13, the Sponsor will cause the
          aggregate Total Capital  Commitments of all Limited  Partners to equal
          or exceed the sum of (i) the Investment Commitment plus (ii) all other
          Obligations of the Sponsor.

Section 6.2  General Partner.

                    The Sponsor will cause (i) Vestar Associates III, L.P. to be
          the sole  general  partner of the Sponsor at all times and (ii) Vestar
          Associates  Corporation  III to be the  sole  general  partner  of the
          General Partner at all times.

Section 6.3  Plan Assets, etc.

                    The  Sponsor  shall at all  times  either  (i) be a  venture
          capital  operating  company  within  the  meaning  of the  Plan  Asset
          Regulations,  or (ii) satisfy  another  exception under the Plan Asset
          Regulations  such that the assets of the Sponsor are not "plan assets"
          within the meaning and as defined in the Plan Asset Regulations.

Section 6.4  Receipt of the Funds Pursuant to the Deposited Notices.
             ------------------------------------------------------

                    Immediately  upon  receipt  by  the  Sponsor  or  any of its
          Affiliates of payment by any Limited Partner in respect of a Deposited
          Notice  delivered  by the Agent  pursuant to Section  8.2, the Sponsor
          shall (i) notify the Agent in writing  specifying the Limited  Partner
          making such payment and the amount thereof and (ii) forward,  or cause
          to be forwarded, the funds representing such payment to the Parent.

Section 6.5  Partners and Pro Rata Shares.

                    Upon the reasonable  request of the Agent from time to time,
          the Sponsor  shall  promptly  deliver to the Agent an updated  list of
          Limited Partners and their respective Pro Rata Shares, certified by an
          officer of the general partner of the General Partner on behalf of the
          Sponsor as true and complete.

                                    SECTION 7

                               NEGATIVE COVENANTS

Section 7.1  Limitations on Actions.

                    So  long  as  this  Agreement  is  in  effect,  the  Sponsor
          covenants  and agrees that it shall not take any action that could (i)
          render invalid or unenforceable  any of the Deposited  Notices or (ii)
          otherwise  modify the  obligations  of any of the Partners  and/or any
          Person  becoming  Partners  subsequent  to the date hereof which arise
          upon the due  delivery  of,  and as  contemplated  by,  the  Deposited
          Notices.

                                    SECTION 8

                                EVENTS OF DEFAULT

Section 8.1  Events of Default.

                    An Event of Default  shall exist upon the  occurrence of any
          of the following specified events (each an "Event of Default"):

                  (a)      Payment.  The Sponsor  shall  default in the  payment
         when due of any amounts  owing under  Section 2.1  or
                           -------
         Section 2.2; or

                  (b) Representations. Any representation, warranty or statement
         made or deemed to be made  herein or in any  statement  or  certificate
         delivered  or  required to be  delivered  pursuant  hereto  shall prove
         untrue in any material respect on the date as of which it was deemed to
         have been made; or

                  (c)      Covenants.
                           ---------

                           (i)     Default in the due  performance or observance
                  of any term,  covenant or  agreement  contained in
                  Section 6 or Section 7, or

                           (ii) Default in the due  performance or observance by
                  it of any  term,  covenant  or  agreement  (other  than  those
                  referred to in subsections  (a), (b) or (c)(i) of this Section
                  8.1)  contained  in this  Agreement  and  such  default  shall
                  continue unremedied for a period of at least 30 days after the
                  earlier of an officer of the  Sponsor  becoming  aware of such
                  default or notice thereof by the Agent; or

                    (d) Effectiveness of Documents. This Agreement or any of the
          Deposited    Notices    shall    fail    to   be   in    full    force
          ---------------------------  and  effect or to give the Agent (for the
          benefit of the Lenders) any  material  part of the rights,  powers and
          privileges purported to be created hereby; or

                  (e)      Bankruptcy, etc.  A Bankruptcy Event shall occur with
         respect to the Sponsor; or
                           ---------------

                    (f)  Defaults  under Other  Agreements.  With respect to any
          Indebtedness (other than Indebtedness outstanding under this Agreement
          or the Credit Agreement (but including the Guaranty Obligations of the
          Sponsor  arising  under  the  Tranche  C  Guaranty))  in excess of $20
          million in the  aggregate  for the Sponsor,  (A)(1) the Sponsor  shall
          default in any  payment  (beyond  the  applicable  grace  period  with
          respect thereto, if any) with respect to any such Indebtedness, or (2)
          the  occurrence  and  continuance  of a default in the  observance  or
          performance   relating  to  such  Indebtedness  or  contained  in  any
          instrument or agreement  evidencing,  securing or relating thereto, or
          any other event or  condition  shall  occur or  condition  exist,  the
          effect of which  default or other event or condition  is to cause,  or
          permit,  the  holder or holders of such  Indebtedness  (or  trustee or
          agent on behalf of such holders) to cause  (determined  without regard
          to  whether  any  notice  or  lapse  of time is  required),  any  such
          Indebtedness  to become due prior to its stated  maturity;  or (B) any
          such Indebtedness shall be declared due and payable, or required to be
          prepaid other than by a regularly scheduled required prepayment, prior
          to   the   stated   maturity   thereof;   provided,    however,   that
          notwithstanding  the  foregoing,  no Default or Event of Default shall
          exist under this  Section  8.1(f) with  respect to a default  which is
          being contested in good faith by appropriate proceedings; or

                  (g)  Judgments.  The Sponsor  shall fail within 30 days of the
         date due and payable to pay, bond or otherwise  discharge any judgment,
         settlement or order for the payment of money (to the extent not paid or
         fully covered by insurance  provided by a carrier who has  acknowledged
         coverage and has the ability to perform) which judgment,  settlement or
         order,  when aggregated  with all other such judgments,  settlements or
         orders due and unpaid at such time,  exceeds $20 million,  and which is
         not stayed on appeal (or for which no motion for stay is pending) or is
         not otherwise being executed.

Section 8.2  Remedies.

                    Upon the occurrence and during the  continuance of any Event
          of Default, the Agent may, and shall be authorized to: (i) declare the
          unpaid amount of any of the Sponsor's  obligations  arising under this
          Agreement  (including,  without limitation,  the Sponsor's obligations
          under Section 2.1 and Section 2.2) to be due, whereupon the same shall
          be immediately due and payable without presentment, demand, protest or
          other  notice  of any  kind,  all of which  are  hereby  waived by the
          Sponsor;  (ii) complete appropriate  Deposited Notices for the Limited
          Partners  based on each Limited  Partner's  Pro Rata Share of the then
          current amount of the Investment Commitment;  and (iii) after at least
          2 Business  Days'  prior  written  notice  thereof by the Agent to the
          Sponsor,  deliver such Deposited Notices to the Limited Partners.  The
          rights of the Agent  under this  Section  8.2 are  independent  and in
          addition  to such  rights as the Agent may have at law or in equity or
          otherwise based on the failure of the Sponsor to perform any covenant,
          agreement or undertaking  made by it in this Agreement,  including the
          right to seek  specific  performance  of such covenant or agreement or
          seek any other equitable relief.

Section 8.3  Receipt of the Funds Pursuant to the Deposited Notices.
             ------------------------------------------------------

                    The Agent agrees that,  promptly  after receipt by the Agent
          of any capital  contribution  by any Limited  Partner  pursuant to the
          exercise of the Agent's  rights  under  Section  8.2,  the Agent shall
          notify the Sponsor of the amount of such capital  contribution and the
          identity of the Limited Partner making such capital contribution.

                                    SECTION 9
                                  MISCELLANEOUS

Section 9.1  Notices.

                    Except as otherwise  expressly  provided herein, all notices
          and other  communications  shall have been duly  received and shall be
          effective (i) when delivered,  (ii) when  transmitted via telecopy (or
          other  facsimile  device) to the  number set out below,  (iii) the day
          following  the day on which the same has been  delivered  prepaid to a
          reputable  national  overnight air courier service,  or (iv) the third
          Business Day  following the day on which the same is sent by certified
          or registered mail,  postage  prepaid,  in each case to the respective
          parties at the  address  set forth  below or at such other  address as
          such party may specify by written notice to the other parties hereto:

                  if to the Sponsor:

                           Vestar Capital Partners III, L.P.
                           245 Park Avenue
                           41st Floor
                           New York, New York  10167
                           Attn:  Jack Feder
                           Telephone:  (212) 351-1630
                           Telecopy:  (212) 808-4922

                           with copies to:

                           Vestar Capital Partners III, L.P.
                           245 Park Avenue
                           41st Floor
                           New York, New York  10167
                           Attn:  Brian P. Schwartz
                           Telephone:  (212) 351-1651
                           Telecopy:  (212) 808-4922

                           and

                           Simpson Thacher & Bartlett
                           425 Lexington Avenue
                           New York, New York  10017
                           Attn:  Marissa Wesely
                           Telephone:  (212) 455-7173
                           Telecopy:  (212) 455-2502

                  if to the Agent:

                           Bank of America, N.A.
                           100 North Tryon Street

                           Bank of America Corporate Center, 13th Floor
                           NC1-007-13-06
                           Charlotte, North Carolina  28255
                           Attn:  Bob Klawinski
                           Telephone: (704) 387-0467
                           Telecopy:  (704) 386-9607

         with a copy to:

                           Bank of America, N.A.
                           NY1-503-06-07
                           335 Madison Ave
                           New York, New York 10017
                           Attn: Fred Zagar
                           Telephone: (212) 503-8242
                           Telecopy:  (212) 503-7080

Section 9.2  Payments.

         Except as otherwise  specifically  provided  herein,  all payments made
pursuant  to any  Deposited  Notice  shall be made to the  Agent in  Dollars  in
immediately  available  funds,  without  offset,   deduction,   counterclaim  or
withholding  of any kind,  not later than 2:00 P.M.  (Charlotte,  North Carolina
time).  Payments  received after such time shall be deemed to have been received
on the next succeeding Business Day.

Section 9.3  Benefit of Agreement.

         This Agreement shall be binding upon and inure to the benefit of and be
enforceable  by the  respective  successors  and  assigns  of the  Agent and the
Sponsor;  provided  that (i) the Sponsor  may not assign or transfer  any of its
interests and obligations  hereunder  without prior written consent of the Agent
and  (ii)  the  Agent  may not  assign  or  transfer  any of its  interests  and
obligations hereunder without prior written consent of the Sponsor except to any
Person which  becomes a successor  Agent  pursuant to Section 10.7 of the Credit
Agreement and except during the continuance of an Event of Default.

Section 9.4  No Waiver; Remedies Cumulative.

         No  failure  or  delay  on the  part of the  Agent  or the  Lenders  in
exercising  any right,  power or  privilege  hereunder  and no course of dealing
between  the Agent or any  Lender  and the  Sponsor  shall  operate  as a waiver
thereof;  nor shall any  single  or  partial  exercise  of any  right,  power or
privilege  hereunder  preclude  any other or  further  exercise  thereof  or the
exercise of any other right,  power or privilege  hereunder or  thereunder.  The
rights and remedies  provided  herein are  cumulative  and not  exclusive of any
rights or  remedies  which the Agent or the Lenders  would  otherwise  have.  No
notice to or demand on the Sponsor in any case shall  entitle the Sponsor to any
other  or  further  notice  or  demand  in  similar  or other  circumstances  or
constitute  a waiver of the rights of the Agent and the  Lenders to any other or
further action in any circumstances without notice or demand.

Section 9.5  Payment of Expenses, etc.

         The  Sponsor  shall  cause  the  Borrower  to (i)  pay  all  reasonable
out-of-pocket  costs  and  expenses  (A) of the  Agent  in  connection  with the
negotiation,  preparation,  execution  and delivery and  administration  of this
Agreement  and the  documents  and  instruments  referred to herein  (including,
without limitation, the reasonable fees and expenses of Moore & Van Allen, PLLC,
special  counsel  to the Agent) and any  amendment,  waiver or consent  relating
hereto including,  but not limited to, any such amendments,  waivers or consents
resulting from or related to any work-out, renegotiation or restructure relating
to the  performance  by the Sponsor under this Agreement and (B) of the Agent in
connection with  enforcement of this Agreement and the documents and instruments
referred to herein (including,  without limitation,  in connection with any such
enforcement,  the reasonable fees and  disbursements  of counsel for the Agent);
and  (ii)  indemnify  the  Agent,  its  officers,   directors,   employees,  and
representatives  from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of any  investigation,
litigation  or other  proceeding  (whether or not the Agent is a party  thereto)
related  to the  entering  into  and/or  performance  of this  Agreement  or the
consummation  of  any  other   transactions   contemplated  in  this  Agreement,
including,  without limitation, the reasonable fees and disbursements of counsel
incurred  in  connection  with  any  such  investigation,  litigation  or  other
proceeding  (but  excluding  any such losses,  liabilities,  claims,  damages or
expenses  to the  extent  incurred  by reason  of gross  negligence  or  willful
misconduct on the part of the Person to be indemnified).

Section 9.6  Amendments, Waivers and Consents.

         Except  pursuant to the terms of Section 9.13,  this  Agreement and the
provisions hereof may not be amended, waived, modified,  changed,  discharged or
terminated unless such amendment,  waiver,  modification,  change,  discharge or
termination is in writing entered into, or approved in writing, by the Agent and
the Sponsor.

Section 9.7  Counterparts.

         This Agreement may be executed in any number of  counterparts,  each of
which when so executed  and  delivered  shall be an  original,  but all of which
shall  constitute  one and the same  instrument.  It shall not be  necessary  in
making  proof of this  Agreement  to produce  or account  for more than one such
counterpart.

Section 9.8  Headings.

         The headings of the Sections  and  subsections  hereof are provided for
convenience  only and shall not in any way affect the meaning or construction of
any provision of this Agreement.

Section 9.9  Survival.

         All indemnities set forth herein,  including,  without  limitation,  in
Section 9.5,  shall  survive the  execution  and delivery of this  Agreement and
other obligations under this Agreement.

Section 9.10  Governing Law; Submission to Jurisdiction; Venue.

                  (a) THIS  AGREEMENT  AND THE  RIGHTS  AND  OBLIGATIONS  OF THE
         PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
         ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK. Any legal action or
         proceeding  with respect to this Agreement may be brought in the courts
         of the State of New York in New York  County,  or of the United  States
         for the Southern  District of New York,  and, by execution and delivery
         of this Agreement, each of the Sponsor and the Agent hereby irrevocably
         accepts  for  itself  and in respect  of its  property,  generally  and
         unconditionally,  the nonexclusive jurisdiction of such courts. Each of
         the Sponsor and the Agent further  irrevocably  consents to the service
         of process out of any of the  aforementioned  courts in any such action
         or  proceeding  by the  mailing  of copies  thereof  by  registered  or
         certified  mail,  postage  prepaid,  to it at the  address  set out for
         notices pursuant to Section 9.1, such service to become effective three
         (3) days after such mailing.  Nothing  herein shall affect the right of
         the Agent,  as the case may be, to serve  process  in any other  manner
         permitted  by law or to  commence  legal  proceedings  or to  otherwise
         proceed  against  the  Sponsor,  as the  case  may  be,  in  any  other
         jurisdiction.

                  (b)  Each of the  Sponsor  and the  Agent  hereby  irrevocably
         waives any objection  which it may now or hereafter  have to the laying
         of venue of any of the aforesaid actions or proceedings  arising out of
         or in connection with this Agreement  brought in the courts referred to
         in subsection (a) of this Section 9.10 and hereby  further  irrevocably
         waives and agrees not to plead or claim in any such court that any such
         action or  proceeding  brought in any such court has been brought in an
         inconvenient forum.

                  (c) TO THE EXTENT  PERMITTED BY LAW, EACH OF THE AGENT AND THE
         FUND  HEREBY  IRREVOCABLY  WAIVES  ALL  RIGHT  TO  TRIAL BY JURY IN ANY
         ACTION,  PROCEEDING OR COUNTERCLAIM  ARISING OUT OF OR RELATING TO THIS
         AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 9.11  Severability.

         If any provision of this Agreement is determined to be illegal, invalid
or  unenforceable,  such  provision  shall be fully  severable and the remaining
provisions shall remain in full force and effect and shall be construed  without
giving effect to the illegal, invalid or unenforceable provisions.

Section 9.12  Entirety.

         This Agreement  represents the entire  agreement of the parties hereto,
and supersedes all prior agreements and understandings, oral or written, if any,
including the Existing Investment and Deposit Agreement.

Section 9.13  Binding Effect; Termination.

         This  Agreement  shall  become  effective  at such date  determined  in
accordance  with  Section  3.1.  The term of this  Agreement  shall be until the
earliest of (i) the date that the Credit  Agreement is  terminated in accordance
with the  terms of  Section  11.13(b)  thereof,  (ii)  the date  that the  Agent
receives the proceeds of a Mandatory  Investment  (and/or a payment to the Agent
in order to purchase a participation  interest in the Credit Party  Obligations)
in an aggregate  amount that is equal to or exceeds the then current  Investment
Commitment,  (iii) the date that (A) the ratio  (calculated on a pro forma basis
using  the  principles  set  forth  in the  definition  of  "Leverage  Reduction
Requirements"  set forth in  Section  1.1 of the  Credit  Agreement)  of (1) all
Funded  Indebtedness (net of cash and Cash Equivalents,  but without netting for
cash  and Cash  Equivalents  on  deposit  in the Cash  Collateral  Account,  and
excluding (x) Subordinated  Indebtedness,  (y) the Tranche C Obligations and (z)
any  Credit  Party  Obligations  in  which a  participation  interest  has  been
purchased by, or on behalf of, the Sponsor pursuant to Section 2.1(c) or Section
2.2(c))  of the  Consolidated  Parties  on a  consolidated  basis on the date of
determination,  to (2) Consolidated  EBITDA for the four  fiscal-quarter  period
ending  as  of  the  most  recent   fiscal  month  end  preceding  the  date  of
determination  with  respect  to which  the  Agent  has  received  the  Required
Financial  Information,  is equal to or less  than 3.25 to 1.0 and (B) the ratio
(calculated  on a pro  forma  basis  using  the  principles  set  forth  in  the
definition of "Leverage Reduction Requirements" set forth in Section 1.1) of (1)
all Funded  Indebtedness (net of cash and Cash Equivalents,  but without netting
for cash and Cash Equivalents on deposit in the Cash Collateral  Account) of the
Consolidated  Parties  on a  consolidated  basis  on the  date of  determination
(including  Subordinated  Indebtedness,  but excluding the Tranche C Obligations
and any Credit  Party  Obligations  in which a  participation  interest has been
purchased by, or on behalf of, the Sponsor pursuant to Section 2.1(c) or Section
2.2(c)) to (2) Consolidated EBITDA for the four fiscal-quarter  period ending as
of the most recent  fiscal month end preceding  the date of  determination  with
respect to which the Agent has received the Required  Financial  Information  is
equal to or less  than 5.5 to 1.0 and  (iv)  the date  that the sum of,  without
duplication,  (A) the aggregate amount of capital  contributions  made by, or on
behalf of, the Sponsor to the Parent after the  Amendment  No. 5 Effective  Date
through  and  including  such  date  which  are used by the  Borrower  to make a
mandatory prepayment of the Loans pursuant to Section 3.3(b)(v)(B) of the Credit
Agreement and (B) the aggregate amount of payments made by, or on behalf of, the
Sponsor to purchase  participation  interests  in the Credit  Party  Obligations
after the Amendment No. 5 Effective Date through and including such time,  shall
equal or exceed the then current Investment Commitment.

Section 9.14  Limitation on Recourse.

         The Agent  agrees that its rights in respect of any claim or  liability
under this  Agreement  asserted  against  the  Sponsor by it shall be limited to
satisfaction  out of,  and  enforcement  against,  the  assets  of the  Sponsor.
Notwithstanding  anything  to the  contrary  contained  herein  or in any  other
document, certificate or instrument executed by the Sponsor pursuant hereto, the
Agent  acknowledges  and agrees that no  officer,  employee,  partner,  servant,
controlling Person, manager,  agent,  authorized  representative or Affiliate of
the Sponsor (collectively,  the "Non-Recourse Persons") shall have any liability
to the Agent (such  liability,  including such as may arise by operation of law,
being  hereby  expressly  waived) for the  payment of any sums now or  hereafter
owing by the Sponsor under this  Agreement or for the  performance of any of the
obligations  of the Sponsor  contained  herein or shall  otherwise  be liable or
responsible with respect thereto.  If any Event of Default shall occur or if any
claim of the Agent against the Sponsor or alleged  liability to the Agent of the
Sponsor shall be asserted under this  Agreement,  the Agent agrees that it shall
not have the right to proceed  directly or indirectly  against the  Non-Recourse
Persons or against their  respective  properties and assets for the satisfaction
of any such claim or liability or for any deficiency  judgment in respect of any
such claim or liability.  Notwithstanding any of the foregoing,  it is expressly
understood  and agreed,  however,  that  nothing  contained in this Section 9.14
shall in any  manner  or any way  constitute  or be  deemed  (i) to  excuse  any
obligations  of any  Partner to make  additional  capital  contributions  to the
Sponsor pursuant to the terms of the Partnership  Agreement,  (ii) to impair the
enforceability  of any of the rights  arising  from this  Agreement  or (iii) to
restrict the  remedies  available to the Agent to realize upon the assets of the
Sponsor. The foregoing acknowledgments, agreements and waivers shall survive the
termination  of this  Agreement  and shall be  enforceable  by any  Non-Recourse
Person.

Section 9.15  Confidentiality.

         The Agent agrees to keep confidential any information furnished or made
available to it by or on behalf of the Sponsor  pursuant to this  Agreement that
is marked  confidential,  provided  that nothing  herein shall prevent the Agent
from  disclosing  such  information  (a)  as  required  by  any  law,  rule,  or
regulation,  (b) upon the order of any court or administrative  agency, (c) upon
the request or demand of any regulatory agency or authority having  jurisdiction
over the Agent or any Affiliate thereof, (d) that is or becomes available to the
public or that is or becomes  available  to the Agent or any  Affiliate  thereof
other  than  as a  result  of a  disclosure  by the  Agent  prohibited  by  this
Agreement,  (e) in connection  with any  litigation to which the Agent or any of
its Affiliates may be a party,  (f) to the extent  necessary in connection  with
the exercise of any remedy under this Agreement, and (g) to any Affiliate of the
Agent.

         IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Investment and Deposit Agreement to be duly executed and delivered as of
the date first above written.

                                    Vestar Capital Partners III, L.P.,
                                    a Delaware limited partnership

                                    By:  Vestar Associates III, L.P.,
                                          its General Partner

                                    By:  Vestar Associates Corporation III,
                                          its General Partner

                                    By: __________________________________
                                                 Name:
                                                 Title:


                                    Bank of America, N.A.

                                    By: ________________________________
                                    Name:
                                    Title:



<PAGE>




                                    Exhibit A

                   [Letterhead of Vestar Associates III, L.P.]

[Name and address of partner]

Re:  [Vestar/Cluett-American Corp.]

Dear ___________:

         Pursuant to Section  3.1(a) of the Agreement of Limited  Partnership of
Vestar Capital  Partners III, L.P.,  Vestar  Associates  III, L.P. (the "General
Partner")  is calling  for  payment of the  Capital  Contribution  to be made in
connection  with  Vestar/Cluett  American  Corp.  Your pro  rata  share of the $
__________  Capital   Contribution  for  your  $  __________   commitment  is  $
__________.  Kindly  pay  either  by  certified  or  cashier's  check or by wire
transfer of  immediately  available  funds to the account set forth below (or to
such other account as Bank of America,  N.A. shall have notified you in writing)
no later than the tenth (10th) business day following the date of this letter.

Via Check:                                                    or Via Bank Wire:
---------                                                     -----------------

Payable to:   Bank of America, N.A.      Payable to: Bank of America, N.A.

Send to:      Bank of America, N.A..                Bank of America, N.A.
              100 North Tryon Street                Charlotte, North Carolina
              NC1-007-13-06                         ABA Routing No.: 053-000-196
              Bank of America Corporate Center      Account No.: 1366212250600
              Charlotte, North Carolina 28255  For Credit to: Corporate Services
              Attn: Bob Klawinski                     Reference:  Vestar Capital
              Telephone: (704) 387-0467                       Partners III, L.P.
              Account No. 1366212250600             Amount: $______________
              For Credit to: Corporate Services
              Reference:  Vestar Capital
                               Partners III, L.P.
         Amount: $______________

If you have any questions, please feel free to call me at (212) 351-1651.

                          Very truly yours,

                          Vestar Associates III, L.P.,

                          General Partner of Vestar Capital Partners III, L.P.

                          By:      Vestar Associates Corporation III,
                                   its General Partner
                          By: __________________________________
                             Name: Brian P. Schwartz

                         Title: Chief Financial Officer



<PAGE>


22


                                    Exhibit B

                   Illustrative Terms of New Equity Securities

Issuer                        Cluett American Investment Corp. (the "Issuer").
                                                                 ------

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


Security                 Junior Preferred Stock, par value $.01 per share (the
                         "Preferred Stock").
                         ----------------

Offering                 Private offering of the Preferred Stock by the Issuer.

Liquidation              Preference  Per Share $100.00
                         per share,  plus an amount in
                         cash equal to all accrued and
                         unpaid dividends.

Use of Proceeds          All the net proceeds of the Preferred Stock will be
                         invested by the Issuer in  its wholly-owned subsidiary
                         Cluett American Corp.
                                                   ("Cluett").
                                                     ------

Optional                                           Redemption  Unless prohibited
                                                   by the Credit Agreement,  the
                                                   Issuer    may    redeem   the
                                                   Preferred  Stock  in whole or
                                                   in part at any  time and from
                                                   time to time,  pro rata, at a
                                                   redemption price equal to the
                                                   liquidation        preference
                                                   thereof, payable in cash.

Mandatory  Redemption  The  Preferred  Stock will not be  subject  to  mandatory
redemption.

Dividend Rate                                      Dividends on the Preferred
                                                   Stock will accrue at the rate
                                                   of 22?% per annum compounded
                                                   quarterly ("Dividend Rate").
                                                              -------------

Dividends                                          Dividends  on  the  Preferred
                                                   Stock will be payable only if
                                                   declared   by  the   Issuer?s
                                                   Board of Directors.  Upon any
                                                   such  declaration,  dividends
                                                   are payable in cash, at a per
                                                   annum   rate   equal  to  the
                                                   Dividend    Rate    of    the
                                                   liquidation       preference.
                                                   Dividends  will be cumulative
                                                   and will  accumulate from the
                                                   date of issuance.

Voting                                             The  Preferred  Stock will be
                                                   non-voting,     except     as
                                                   otherwise required by law and
                                                   except in  certain  customary
                                                   circumstances,      including
                                                   amendments  to the  rights of
                                                   the holders of the  Preferred
                                                   Stock  and  the  creation  of
                                                   equivalent     and     senior
                                                   securities.

Ranking                                            The   Preferred   Stock  will
                                                   rank,  with  respect  to  the
                                                   dividend  rights,  redemption
                                                   and    distributions     upon
                                                   liquidation,  winding-up  and
                                                   dissolution  of  the  Issuer,
                                                   senior  to  all   classes  of
                                                   common  stock  of the  Issuer
                                                   and to  the  Class  C  Junior
                                                   Preferred Stock and junior to
                                                   the Class A Senior  Preferred
                                                   Stock.

Covenants
The Issuer may not repurchase,  redeem or otherwise acquire or retire securities
of  equal  or  junior  ranking,   other  than   repurchases  of  employee  stock
substantially  on the same basis as provided for in the Issuer?s  Class A Senior
Preferred Stock; the Issuer may not permit any subsidiary to make any payment or
distribution  on  securities  of the Issuer that the Issuer would be  prohibited
from making itself.


Remedies                                           Until  all  Non-Sponsor  Debt
                                                   (as defined in Exhibit C) has
                                                   been  paid  or  purchased  in
                                                   full   in   cash    and   the
                                                   Commitments  under the Credit
                                                   Agreement   shall  have  been
                                                   terminated,  holders  of  the
                                                   Preferred   Stock   may   not
                                                   exercise  remedies other than
                                                   increasing     pricing    and
                                                   acceleration.


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



<PAGE>



                                    Exhibit C

                  Illustrative Terms of Intercreditor Agreement

o    All payments or prepayments  of principal or interest on the  participation
     interests of the Sponsor,  the Partners and/or their respective  Affiliates
     (collectively,  the "Sponsor Lenders") in the Credit Party Obligations (the
     "Sponsor  Participation  Interests")  received  by the Agent or the Sponsor
     Lenders shall be used to purchase additional  participation  interests from
     the Lenders other than the Sponsor Lenders (collectively,  the "Non-Sponsor
     Lenders") in the Credit Party  Obligations held by the Non-Sponsor  Lenders
     (the  "Non-Sponsor  Debt")  until  the  Non-Sponsor  Debt has been  paid or
     purchased  in full in cash,  no  Letters  of Credit or Tranche C Letters of
     Credit shall be outstanding and the Commitments  under the Credit Agreement
     shall have been terminated.

o    Interest on the Sponsor Participation Interests shall be PIK only until all
     Non-Sponsor  Debt has been paid or purchased in full in cash, no Letters of
     Credit  or  Tranche  C  Letters  of  Credit  shall be  outstanding  and the
     Commitments under the Credit Agreement shall have been terminated.

o    Until all  Non-Sponsor  Debt has been paid or purchased in full in cash, no
     Letters of Credit or Tranche C Letters of Credit shall be  outstanding  and
     the Commitments under the Credit Agreement shall have been terminated,  the
     Sponsor  Lenders  shall have no voting  rights in  respect  of the  Sponsor
     Participation Interests.

o    Until  the  date 91 days  after  all  Non-Sponsor  Debt  has  been  paid or
     purchased  in full in cash,  no  Letters  of Credit or Tranche C Letters of
     Credit shall be outstanding and the Commitments  under the Credit Agreement
     shall have been  terminated,  the Sponsor Lenders shall not take any action
     in their  capacity as holders of the  Sponsor  Participation  Interests  to
     initiate  an  involuntary  bankruptcy  proceeding  in respect of any Credit
     Party.

o    The  Non-Sponsor  Lenders  shall have the right,  if not  exercised  by the
     Sponsor  Lenders,  to file proofs of claim (and any notice of assignment of
     the right to receive  payments)  in respect  of the  Sponsor  Participation
     Interests in any bankruptcy proceeding in respect of any Credit Party.

o    In  any  bankruptcy   proceeding  in  respect  of  any  Credit  Party,  the
     Non-Sponsor Lenders shall be entitled to payment in full in cash before the
     Sponsor Lenders, in their capacity as holders of the Sponsor  Participation
     Interests,  shall be entitled to receive any  payments,  property or assets
     (other than (i) debt  securities  having payment terms no more favorable to
     the  Sponsor  Lenders  vis-a-vis  the  Non-Sponsor  Lenders  than the terms
     provided  in  this  Exhibit  C and  (ii)  equity  securities  that  are not
     redeemable  for  cash,  and in  respect  of  which  no cash  dividends  are
     payable),  until all  Non-Sponsor  Debt has been  paid in full in cash,  no
     Letters of Credit or Tranche C Letters of Credit shall be  outstanding  and
     the Commitments under the Credit Agreement shall have been terminated.

o    Any payments received by the Sponsor Lenders,  in their capacity as holders
     of the Sponsor Participation  Interests,  in contravention of the foregoing
     provisions  shall  be held in  trust  for the  benefit  of the  Non-Sponsor
     Lenders,  and immediately  turned over to, the Agent for the benefit of the
     Non-Sponsor Lenders.

o    Until the Credit Party  Obligations  have been paid or purchased in full in
     cash,  no  Letters  of Credit  or  Tranche  C  Letters  of Credit  shall be
     outstanding  and the  Commitments  under  the  Credit  Agreement  have been
     terminated,  in any  reorganization  proceeding  in  respect  of any Credit
     Party,  the Non-Sponsor  Lenders shall be entitled to approve (on behalf of
     the  Sponsor  Lenders,   in  their  capacity  as  holders  of  the  Sponsor
     Participation Interests) the use of cash collateral by such Credit Party.

o    Until the Credit Party  Obligations  have been paid or purchased in full in
     cash,  no  Letters  of Credit  or  Tranche  C  Letters  of Credit  shall be
     outstanding  and the  Commitments  under  the  Credit  Agreement  have been
     terminated,  in any  bankruptcy  proceeding in respect of any Credit Party,
     the  Sponsor  Lenders,   in  their  capacity  as  holders  of  the  Sponsor
     Participation   Interests,   shall  not  (i)  vote   against  any  plan  of
     reorganization or liquidation  supported by the Non-Sponsor Lenders or (ii)
     vote  for  any  plan  of  reorganization  or  liquidation  opposed  by  the
     Non-Sponsor Lenders.

     o Until the Credit Party Obligations have been paid or purchased in full in
     cash,  no  Letters  of Credit  or  Tranche  C  Letters  of Credit  shall be
     outstanding  and the  Commitments  under  the  Credit  Agreement  have been
     terminated,  in any  bankruptcy  proceeding in respect of any Credit Party,
     (i) the  Sponsor  Lenders,  in their  capacity  as holders  of the  Sponsor
     Participation  Interests,  shall not file any motion,  application or other
     pleading seeking affirmative  relief,  including without limitation for the
     appointment  of a trustee or examiner,  for the conversion of the case to a
     liquidation  proceeding,  for the substantive  consolidation of such Credit
     Party's bankruptcy case with the case of any other entity, for the creation
     of a separate official  committee  representing only the Sponsor Lenders or
     any other form of  affirmative  relief of any other kind or nature and (ii)
     the  Sponsor  Lenders,   in  their  capacity  as  holders  of  the  Sponsor
     Participation  Interests,  shall not file any objection or other responsive
     pleading opposing any relief requested by the Non-Sponsor  Lenders.  o If a
     Bankruptcy  Event shall occur with  respect to the Parent or the  Borrower,
     the Sponsor Lenders shall, subject to obtaining any necessary consents from
     the holders of the Senior  Subordinated  Debt or as  otherwise  required by
     law,  take such action as the Agent shall  reasonably  request to cause the
     Sponsor  Participation  Interests  to  rank  pari  passu  with  the  Senior
     Subordinated Debt.


<PAGE>