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          THIRD AMENDMENT TO CREDIT AGREEMENT DATED AS OF APRIL 3, 2000
                (AS AMENDED FROM TIME TO TIME, THE "AGREEMENT"),
                BY AND BETWEEN HEADS & THREADS INTERNATIONAL LLC,
             A DELAWARE LIMITED LIABILITY COMPANY (THE "BORROWER"),
              AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO,
               LASALLE BANK NATIONAL ASSOCIATION AND SUMMIT BANK,
             AS LENDERS (THE "LENDERS"), AND AMERICAN NATIONAL BANK
              AND TRUST COMPANY OF CHICAGO, AS AGENT (THE "AGENT")

        This Third Amendment to the Agreement ("Amendment") is entered into as
of March 19, 2001 by and among the Borrower, the Lenders and the Agent.

        All capitalized terms stated in this Amendment and not defined herein
shall have the same meaning as set forth in the Agreement.

        WHEREAS, the Lenders have made Loans to the Borrower pursuant to the
Agreement;

and

        WHEREAS, the Borrower and the Lenders have agreed to amend certain
financial covenants as stated herein. Now, therefore, in consideration of the
fulfillment of each of the terms and conditions set forth herein, the parties
hereto agree as follows:

        Section 1.        Amendments to Agreement.

        a.      Section 1.1 of the Agreement is amended as follows:

        (i)     The definition of "Capital Expenditures" is amended in its
entirety to state the following:

        "Capital Expenditures" means, without duplication, any expenditures for
any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with GAAP, provided that for purposes of
Section 6.10.4 and for purposes of determining the Debt Service Coverage Ratio,
Capital Expenditures shall include only such expenditures funded by cash flow
internally generated by Borrower in the normal course of its business
operations.

        (ii)    A new definition of "Debt Service Coverage Ratio" is added to
Section 1.1 of the Agreement as follows:


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        "Debt Service Coverage Ratio", for any period, means the ratio of (A)
Net Income plus (a) (i) Interest Expense and (ii) depreciation and amortization,
minus (b) (i) Capital Expenditures and (ii) dividends paid, plus (or minus) (c)
the gain (or loss) on sale of assets, plus (or minus) (d) the increase (or
decrease) in LIFO reserve to (B) Interest Expense plus (i) required principal
payments upon the Obligations plus (ii) that portion of regularly scheduled
payments under Capitalized Lease Obligations which are allocable to principal
under GAAP.

        (iii)   The definition of "Fixed Charge Coverage Ratio" is deleted.

        (iv)    The definition of "Leverage Ratio" is deleted.

        (v)     A new definition of "Tangible Net Worth" is added to Section 1.1
of the Agreement as follows:

        "Tangible Net Worth" means at any time Borrower's (a) total assets minus
(b) total liabilities, Intangible Assets, notes receivable from Affiliates and
prepaid expenses, all computed in accordance with GAAP.

        b.      Section 6.10.1 of the Agreement is deleted.

        c.      Section 6.10.2 of the Agreement is deleted and substituted
therefor is the following:

        6.10.2. Debt to Tangible Net Worth Ratio. The Borrower will maintain a
ratio of Indebtedness to Tangible Net Worth at all times of not greater than (i)
2.00:1.00 on and before December 31, 2001 and (ii) 1.50:1.00 thereafter.

        d.      Section 6.10.3 of the Agreement is deleted and substituted
therefor is the following:

        6.10.3 Debt Service Coverage Ratio. The Borrower will maintain a Debt
Service Coverage Ratio, at all times of not less than (i) 1.00 to 1.00 on and
before December 31, 2001 and (ii) 1.20:1.00 thereafter for each trailing twelve
month period preceding the testing date, provided that the first test of such
ratio shall be on June 30, 2001 at which time such ratio will be tested only for
the Borrower's second fiscal quarter of 2001, and thereafter on September 30,
2001 and December 31, 2001 such ratio shall be tested on year to date
performance from April 1, 2001.

       Section 2.  Representations and Warranties. The Borrower represents and
warrants that:



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        a.      The representations and warranties contained in the Agreement
are true and correct in all material respects on and as of the date hereof as if
such representations and warranties had been made on and as of the date hereof
(except to the extent any such representation or warranty is stated to relate
solely to an earlier date, in which case such representation or warranty is true
and correct in all material respects on and as of such earlier date); and

        b.      The Borrower is in compliance with all the terms and provisions
set forth in the Agreement and no Default or Unmatured Default has occurred and
is continuing.


        Section 3.      Conditions to Effectiveness. This Amendment is subject
to the satisfaction in full of the following conditions precedent:

        a.      The Agent shall have received executed originals of this
Amendment;

        b.      The Agent shall have received payment of the fees provided in
Section 6 of this Amendment;

        c.      The Agent shall have received board resolutions from the
Borrower authorizing the execution of this Amendment; and

        d.      All legal matters incident to this Amendment shall be reasonably
satisfactory to Neal, Gerber & Eisenberg, counsel for the Agent.


        Section 4.      Full Force and Effect. Except as expressly amended and
waived herein, the Agreement and the Loan Documents are hereby ratified and
confirmed, and shall continue in full force and effect in accordance with the
provisions thereof on the date hereof. As used in the Agreement and the Loan
Documents, the terms "Agreement", "this Agreement", "herein", "hereafter",
"hereto", "hereof", and words of similar import, shall, unless the context
otherwise requires, mean the Agreement as amended prior to the date hereof and
as amended by this Amendment.



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        Section 5. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.


        Section 6. Expenses. The Borrower agrees to pay all out-of-pocket
expenses incurred by Agent in connection with the preparation, execution and
delivery of this Amendment and the other documents incident hereto, including,
but not limited to, the reasonable fees and disbursements of Neal, Gerber &
Eisenberg, counsel for the Agent.

        Section 7. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original,
but all of which when taken together shall constitute one
instrument.

        Section 8. Headings. The headings of this Amendment are for the purposes
of reference only and shall not affect the construction of
this Amendment.

        IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their duly authorized officers, all as of the date and year
first above written.

                                    BORROWER:

                                    HEADS & THREADS INTERNATIONAL LLC,
                                    A DELAWARE LIMITED LIABILITY COMPANY




                                    BY:  /s/ STEVEN R. SCHONHOLTZ
                                         ---------------------------------------
                                         ITS: PRESIDENT
                                         ---------------------------------------


                                    LENDERS:

                                    AMERICAN NATIONAL BANK AND TRUST
                                    COMPANY OF CHICAGO




                                    BY:   /s/ LINDA K. MIKUTIS
                                          --------------------------------------
                                          ITS: OFFICER
                                          --------------------------------------



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                                    LASALLE BANK NATIONAL ASSOCIATION




                                    BY:   /s/ HENRY J. MUNEZ
                                          --------------------------------------
                                          ITS: VICE PRESIDENT
                                          --------------------------------------

                                    SUMMIT BANK




                                    BY:   /s/ URI PILTZER
                                          --------------------------------------
                                          ITS: VICE PRESIDENT
                                          --------------------------------------

                                    AGENT:

                                    AMERICAN NATIONAL BANK AND TRUST
                                    COMPANY OF CHICAGO




                                    BY:   /s/ LINDA K. MIKUTIS
                                          --------------------------------------
                                          ITS: OFFICER
                                          --------------------------------------


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