**Exhibit10(a)**

 

THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDITAGREEMENT

 

THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT(the “Amendment”), dated as of May 27, 2004, is among HAGGARCLOTHING CO. (“Company”), HAGGAR CORP. (“Haggar”), the Bankswhich are party hereto and JPMORGAN CHASE BANK, (formerly The Chase ManhattanBank) individually as a Bank and as Agent for itself and the other Banks (insuch capacity as Agent, together with its successors in such capacity, “Agent”).

 

RECITALS:

 

A.                                   Pursuantto that certain Second Amended and Restated Credit Agreement datedJune 13, 2002 among Company, Haggar, each of the banks which are partiesthereto (individually a “Bank” and collectively, the “Banks”) andthe Agent (as the same has been amended by that certain First Amendment toSecond Amended and Restated Credit Agreement dated December 11, 2002, thatcertain Second Amendment to Second Amended and Restated Credit Agreement datedJune 6, 2003, and as the same may be further amended, restated or otherwisemodified from time to time, the “Agreement”), the banks party theretoagreed to make Loans to Company as set forth therein.

 

B.                                     Companyformed two new Domestic Subsidiaries, Phlox Acquisitions LLC, a Delawarelimited liability company, and Phlox Acquisitions Trust, a Delaware statutorytrust, which have joined the Subsidiary Guaranty as Guarantors.

 

C.                                     Companyand Haggar have requested that the Banks agree to modify the Agreement asherein set forth.  The Banks party heretoare willing to do so upon the terms and provisions of this Amendment.

 

NOW, THEREFORE, in consideration of the premises herein contained andother good and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, the parties hereto agree as follows:

 

# **ARTICLE1.**Definitions

#  

## 1.1.                              Definitions.  Capitalized terms used in this Amendment, tothe extent not otherwise defined herein, shall have the same meanings as in theAgreement, as amended hereby.

##  

# **ARTICLE2.**Amendment

#  

## 2.1.                              Additionsto Section 1.1.  The followingdefinitions are added to Section 1.1 of the Agreement in properalphabetical order.

##  

“Aircraft Indebtedness” means purchase money Indebtedness (includingany Indebtedness refinancing an Advance) in a principal amount not to exceed$4,150,000 which is: (a) incurred in connection with Company’s acquisitionof the aircraft it leases as of May 27, 2004 upon the termination of thelease thereof and (b) is secured only by a Lien on such aircraft.

 

“Base Margin” shall have the meaning set forth in Section 2.7(c).

 

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“Commitment Fee Rate” shall have the meaning set forth inSection 2.7(c).

 

“Life Insurance Indebtedness” means any Indebtedness (including anyIndebtedness refinancing an Advance) that is secured only by the cash value ofthe key man life insurance policies which are owned by Company and issued byNational Life of Vermont; provided that the aggregate principal amount of suchIndebtedness does not exceed the lesser of: (i) $9,100,000 or (ii) the aggregate amount of such cashvalue.

 

## 2.2.                              Amendmentto Section 1.1.  The followingdefinitions contained in Section 1.1 of the Agreement are amendedin their respective entireties to read as follows:

##  

“CD Margin” shall be determined in accordance with the terms ofSection 2.7(c).

 

“Eurodollar Margin” shall be determined in accordance with the terms ofSection 2.7(c).

 

“Funded Debt” means, for Company Group on a consolidated basis for anydate, all amounts advanced and outstanding with respect to any Indebtedness ofany member of Company Group, including, without limitation, the Obligations butspecifically excluding: (a) obligations under any Guarantee; (b) obligations under anySwap Agreement; (c) Aircraft Indebtedness, and (d) Life InsuranceIndebtedness.

 

“Termination Date” means June 30, 2007, unless the Commitments areterminated prior to such date pursuant to Sections 2.4 or 9.1.

 

## 2.3.                              Amendmentto “Permitted Indebtedness”.  Thedefinition of “Permitted Indebtedness” contained in Section 1.1 ofthe Agreement is amended to: (a) delete the “and” at the end of clause (j) thereto;(b) replace the “.” at the end of clause (k) with “; and” and(c) add the following clause (l) to the end of such definition.

##  

(l) the Aircraft Indebtedness, the Life Insurance Indebtedness andany extensions, renewals and replacements thereof.

 

## 2.4.                              Amendmentto “Permitted Liens”.  The definitionof “Permitted Liens” contained in Section 1.1 of the Agreement isamended to:  (a) delete the “and” atthe end of clause (f) thereto; (b) replace the “.” at the end ofclause (g) with “, and” and (c) add the following clause (h) tothe end of such definition.

##  

(h) Liens securing the Aircraft Indebtedness encumbering only theaircraft financed thereby and Liens securing the Life Insurance Indebtednessencumbering only the cash value of the key man life insurance policies whichare owned by Company and issued by National Life of Vermont.

 

## 2.5.                              Amendmentto Section 2.5.  Clause (a)of Section 2.5 of the Agreement is amended and restated in itsentirety to read as follows:

##  

(a)                                  Onthe date three Business Days following each Payment Date and on the TerminationDate, a commitment fee equal to the Commitment Fee Rate *times*the average daily amount of the Total Commitments *minus*the sum of (i) the outstanding principal amount of all Advances and(ii) the Letter of Credit Exposure during the quarter ending on andincluding such Payment Date, or such shorter period ending on and including theTermination Date, as the case may be.

 

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## 2.6.                              Amendmentto Section 2.7(a).  The thirdsentence of clause (a) of Section 2.7 of the Agreementis amended in its entirety to read as follows:

##  

Floating RateAdvances shall bear interest at a rate equal to the sum of the Alternate BaseRate plus the Base Margin, and the interest rate on any Floating Rate Advancesshall change when and as the Alternate Base Rate changes; provided that in noevent shall the sum of the foregoing exceed the Highest Lawful Rate.

 

## 2.7.                              Additionof Section 2.7(c).  The following clause (c)is added to Section 2.7 immediately following clause (b)thereto:

##  

(c)                                  Determinationsof Margins and Fees.  The BaseMargin, CD Margin and Eurodollar Margin and the fees payable underSection 2.5(a) shall be defined and determined as follows:

 

“Base Margin” shall mean (i) during the period commencingon May 27, 2004 and ending on but not including the first Adjustment Date(as defined below), zero percent (0%) per annum and (ii) during eachperiod, from and including one Adjustment Date to but excluding the nextAdjustment Date (herein a “Calculation Period”), the percent per annumset forth in the table below under the heading “Base Margin” andopposite the Funded Debt Ratio which corresponds to the Funded Debt Ratio setforth in, and as calculated in accordance with, the applicable ComplianceCertificate.

 

“CD Margin” shall mean (i) during the period commencing onMay 27, 2004 and ending on but not including the first Adjustment Date,one and one-quarter percent (1.25%) per annum and (ii) during eachCalculation Period, the percent per annum set forth in the table below underthe heading “CD Margin” and opposite the Funded Debt Ratio whichcorresponds to the Funded Debt Ratio set forth in, and as calculated inaccordance with, the applicable Compliance Certificate.

 

“Commitment Fee Rate” shall mean (i) during the periodcommencing on May 27, 2004 and ending on but not including the firstAdjustment Date, one-quarter of one percent (0.25%) per annum and(ii) during each Calculation Period, the percent per annum set forth inthe table below under the heading “Commitment Fee” and opposite theFunded Debt Ratio which corresponds to the Funded Debt Ratio set forth in, andas calculated in accordance with, the applicable Compliance Certificate.

 

“Eurodollar Margin” shall mean (i) during the periodcommencing on May 27, 2004 and ending on but not including the firstAdjustment Date, one and one-eighth percent (1.125%) per annum and(ii) during each Calculation Period, the percent per annum set forth inthe table below under the heading “Eurodollar Margin” and opposite theFunded Debt Ratio which corresponds to the Funded Debt Ratio set forth in, andas calculated in accordance with, the applicable Compliance Certificate.

 

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| **Tier** | ** ** | **Funded Debt  Ratio**                  | ** ** | **Commitment  Fee** | ** ** | **Base  Margin** | ** ** | **CD  Margin** | ** ** | **Eurodollar  Margin** | ** ** |
|----------|------------|-----------------------------------------|------------|---------------------|------------|------------------|------------|----------------|------------|------------------------|------------|
| Tier V   |       | < 1.00 to 1.00                       |       | 0.25                | %          | 0.00             | %          | 1.25           | %          | 1.125                  | %          |
| Tier IV  |       | > 1.00 to 1.00  but< 1.50 to 1.00 |       | .30                 | %          | 0.00             | %          | 1.375          | %          | 1.25                   | %          |
| Tier III |       | > 1.50 to 1.00  but< 2.00 to 1.00 |       | 0.375               | %          | 0.00             | %          | 1.625          | %          | 1.50                   | %          |
| Tier II  |       | > 2.00 to 1.00  but< 2.50 to 1.00 |       | 0.375               | %          | 0.00             | %          | 1.75           | %          | 1.625                  | %          |
| Tier I   |       | > 2.50 to 1.00                       |       | 0.50                | %          | 0.00             | %          | 1.875          | %          | 1.75                   | %          |

 

Upon delivery of the ComplianceCertificate pursuant to Section 6.1(c) in connection with the financialstatements required to be delivered pursuant to Sections 6.1(a) and (b)commencing with such Compliance Certificate delivered at the end of the fiscalquarter ending on June 30, 2004, the Base Margin, Eurodollar Margin, CDMargin and Commitment Fee Rate shall automatically be adjusted in accordancewith the Funded Debt Ratio set forth therein and the table set forth above,such automatic adjustment to take effect as of the date five (5) Business Daysafter the receipt by the Agent of the related Compliance Certificate pursuantto Section 6.1(c) (each such Business Day when such margins or fees changepursuant to this sentence or the next following sentence, herein an “AdjustmentDate”).  If Haggar and the Companyfail to deliver such Compliance Certificate which so sets forth the Funded DebtRatio within the period of time required by Section 6.1(c), or if an Eventof Default exists and the Agent provides notice to Haggar, the margin and feesprovided for hereunder shall automatically be adjusted to the margin and feesset forth in the line in the table above labeled Tier I, such automaticadjustments to take effect as of the first Business Day after the last day onwhich Haggar and the Company were required to deliver the applicable ComplianceCertificate in accordance with Section 6.1(c) hereof or, in the case of anEvent of Default, on the date the written notice is given to Haggar and toremain in effect until subsequently adjusted in accordance herewith upon thedelivery of such Compliance Certificate or, in the case of an Event of Default,when such Event of Default has been cured to the satisfaction of the Agent orwaived in accordance with this Agreement.

 

## 2.8.                              Amendmentto Section 7.8.  Section 7.8of the Agreement is amended in its entirety to read as follows:

##  

7.8.                              NetWorth.  Permit the Net Worth ofCompany Group to be or become less than an amount equal to the sum of:  (1) $133,100,000, plus (2) fiftypercent (50%) of the cumulative net income of Company Group, on a consolidatedbasis, for each of the fiscal quarters to have completely elapsed sinceDecember 31, 2003, as of the date of determination, plus (3) in theevent Haggar or Company shall make a registered public offering of its capitalstock after the Effective Date, 66 2/3% of that portion of the net proceedsfrom such offering attributable to the primary issuance of new shares (but notthe secondary issuance of existing shares). Notwithstanding the foregoing, in the event that Net Worth is less thanthe amount required hereby, Company shall have a period of ten (10) days fromthe earlier of the date on which Net Worth is disclosed to the Agent or is tobe disclosed to the Agent under Section 6.1 in which to cause Net Worth tobe in compliance with the terms hereof. Cumulative net income shall be determined by reference to the statementsof income described in Section 6.1(a) and shall not be decreased by anylosses occurring during any fiscal quarter.

 

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## 2.9.                              Amendmentto Schedule 4; Pro Rata Adjustment. Schedule 4 to the Agreement is amended in its entirety toread as Schedule 4 attached hereto. On the effective date of this Amendment, the Commitment of certain Banksare being modified.  As a result, if anyLoans are outstanding under the Agreement on the effective date, such Loanswill not be held by the Banks in accordance with each Bank’s Ratable Share asdetermined after giving effect to this Amendment.  To remedy the foregoing, if any Loans areoutstanding on the effective date of this Amendment, the Banks shall makeadvances among themselves (either directly or through the Agent) so that aftergiving effect thereto the Loans will be held by the Banks in accordance witheach Bank’s Ratable Share determined after giving effect to thisAmendment.  The advances made on theeffective date by each Bank whose Ratable Share has increased shall be deemedto be a purchase of a corresponding amount of the Loans of the Bank or Bankswhose Ratable Share has decreased.

##  

## 2.10.                        Amendmentto Exhibit A (Borrowing Base Certificate) and Exhibit C (ComplianceCertificate).  Exhibits Aand C to the Agreement are amended in their respective entireties toread as Exhibits A and C attached hereto.

##  

# **ARTICLE3.**Conditions

#  

## 3.1.                              Conditions.  The effectiveness of Article 2 of thisAmendment subject to the satisfaction of the following conditions precedent onor before May 31, 2004:

##  

### (a)                                  Agentshall have received all of the following, each dated (unless otherwiseindicated) a current date, in form and substance satisfactory to the Agent:

###  

#### (i)                                     Amendment.  This Amendment fully executed by Haggar andthe Company and the attached Consent of Domestic Subsidiaries executed by theDomestic Subsidiaries of the Company;

####  

#### (ii)                                  Notes.  Amended and restated promissory notesexecuted by the Company;

####  

#### (iii)                               Authorization.  Such evidence of Haggar’s, the Company’s andeach Guarantor’s authority to enter into this Amendment as the Agent mayrequest;

####  

#### (iv)                              GovernmentalCertificates.  Certificates of theappropriate government officials of the state of incorporation (or the otherappropriate governmental officials of its jurisdiction of organization) ofHaggar, the Company and each Guarantor as to its existence and good standing;and

####  

#### (v)                                 AdditionalInformation.  The Agent shall havereceived such additional documentation and information as the Agent or itslegal counsel, Jenkens & Gilchrist, a Professional Corporation, mayrequest; and

####  

### (b)                                 Therepresentations and warranties contained herein and in all other LoanDocuments, as amended hereby, shall be true and correct in all materialrespects as of the date hereof as if made on the date hereof, except for suchrepresentations and warranties limited by their terms to a specific date;

###  

### (c)                                  NoDefault shall exist; and

 

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### (d)                                 Allproceedings taken in connection with the transactions contemplated by thisAmendment and all documentation and other legal matters incident thereto shallbe satisfactory to the Agent and its legal counsel, Jenkens & Gilchrist, aProfessional Corporation.

###  

# **ARTICLE4.**Miscellaneous

#  

## 4.1.                              Ratifications.  The terms and provisions set forth in thisAmendment shall modify and supersede all inconsistent terms and provisions setforth in the Agreement and except as expressly modified and superseded by thisAmendment, the terms and provisions of the Agreement and the other LoanDocuments are ratified and confirmed and shall continue in full force and effect.Company, Haggar, the Agent and Banks party hereto agree that the Agreement asamended hereby and the other Loan Documents shall continue to be legal, valid,binding and enforceable in accordance with their respective terms. For allmatters arising prior to the effective date of this Amendment, the Agreement(as unmodified by this Amendment) shall control.

##  

## 4.2.                              Representationsand Warranties.  Company and Haggarhereby represent and warrant to Agent and the Banks as follows:  (a) no Default exists, (b) therepresentations and warranties set forth in the Loan Documents are true andcorrect in all material respects on and as of the date hereof with the sameeffect as though made on and as of such date except with respect to anyrepresentations and warranties limited by their terms to a specific date, and(c) the articles of incorporation, certificates of limited partnership(other than the certificate of limited partnership of Haggar Women’s Wear, Ltd.(formerly Jerell Ltd.), articles of organization, regulations, operatingagreements, partnership agreements, bylaws, consents and resolutions ofCompany, Haggar and each Guarantor attached to the respective Certificates ofSecretary of Company, Haggar and the Guarantors most recently delivered to theAgent have not been modified or rescinded and remain in full force and effectand that officers identified in such Certificates of Secretary continue to holdthe office or offices reflected therein. IN ADDITION, TO INDUCE THE AGENT AND THE BANKS TO AGREE TO THE TERMS OFTHIS AMENDMENT, THE COMPANY, HAGGAR AND EACH GUARANTOR (BY ITS EXECUTION BELOW)REPRESENTS AND WARRANTS THAT AS OF THE DATE OF ITS EXECUTION OF THIS AMENDMENTTHERE ARE NO CLAIMS OR OFFSETS AGAINST OR RIGHTS OF RECOUPMENT WITH RESPECT TOOR DEFENSES OR COUNTERCLAIMS TO ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS AND INACCORDANCE THEREWITH IT:

##  

##### (A)                              WAIVER.  WAIVES ANY AND ALL SUCH CLAIMS, OFFSETS,RIGHTS OF RECOUPMENT, DEFENSES OR COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN,ARISING PRIOR TO THE DATE OF ITS EXECUTION OF THIS AMENDMENT AND

#####  

##### (B)                                RELEASE.  RELEASES AND DISCHARGES THE AGENT AND THEBANKS, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,SHAREHOLDERS, AFFILIATES AND ATTORNEYS (COLLECTIVELY THE “RELEASED PARTIES”)FROM ANY AND ALL OBLIGATIONS, INDEBTEDNESS, LIABILITIES, CLAIMS, RIGHTS, CAUSESOF ACTION OR DEMANDS WHATSOEVER, WHETHER KNOWN OR UNKNOWN, SUSPECTED ORUNSUSPECTED, IN LAW OR EQUITY, WHICH COMPANY, HAGGAR OR ANY GUARANTOR EVER HAD,NOW HAS, CLAIMS TO HAVE OR MAY HAVE AGAINST ANY RELEASED PARTY ARISING PRIOR TOTHE DATE HEREOF AND FROM OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THETRANSACTIONS CONTEMPLATED THEREBY.

 

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## 4.3.                              Survivalof Representations and Warranties. All representations and warranties made in this Amendment shall survivethe execution and delivery of this Amendment, and no investigation by Agent orany Bank or any closing shall affect the representations and warranties or theright of Agent or any Bank to rely upon them.

##  

## 4.4.                              Referenceto Agreement.  Each of the LoanDocuments, including the Agreement, are hereby amended so that any reference insuch Loan Documents to the Agreement shall mean a reference to the Agreement asamended hereby.

##  

## 4.5.                              Expensesof Agent.  As provided in theAgreement, Company agrees to pay on demand all costs and expenses incurred byAgent or any Bank in connection with the preparation, negotiation, andexecution of this Amendment, including without limitation, the costs and feesof Agent’s and each Bank’s legal counsel.

##  

## 4.6.                              Severability.  Any provision of this Amendment held by acourt of competent jurisdiction to be invalid or unenforceable shall not impairor invalidate the remainder of this Amendment and the effect thereof shall beconfined to the provision so held to be invalid or unenforceable.

##  

## 4.7.                              ApplicableLaw.  This Amendment and all otherLoan Documents shall be governed by and construed in accordance with the lawsof the State of Texas and the applicable laws of the United States of America.

##  

## 4.8.                              Successorsand Assigns.  This Amendment isbinding upon and shall inure to the benefit of Agent, each Bank, Company andHaggar and their respective successors and assigns, except that neither Companyor Haggar may assign or transfer any of its rights or obligations hereunderwithout the prior written consent of the Banks.

##  

## 4.9.                              Counterparts.  This Amendment may be executed in one or morecounterparts and on telecopy counterparts, each of which when so executed shallbe deemed to be an original, but all of which when taken together shallconstitute one and the same agreement.

##  

## 4.10.                        Effectof Waiver.  No consent or waiver,express or implied, by Agent or any Bank to or for any breach of or deviationfrom any covenant, condition or duty by Haggar, the Company or any Guarantorshall be deemed a consent or waiver to or of any other breach of the same orany other covenant, condition or duty.

##  

## 4.11.                        Headings.  The headings, captions, and arrangements usedin this Amendment are for convenience only and shall not affect theinterpretation of this Amendment.

##  

## 4.12.                        ENTIREAGREEMENT.  THIS AMENDMENT EMBODIESTHE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THESUBJECT MATTER HEREOF AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THISAMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIESHERETO.  THERE ARE NO ORAL AGREEMENTSAMONG THE PARTIES HERETO.

 

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EXECUTED as of the date first written above.

 
|   | **Company and Haggar:**                                                                                                                                                                                                              |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                 |   |
|   | HAGGAR CLOTHING CO., a  Nevada corporation                                                                                                                                                                                           |
|   | HAGGAR CORP., a Nevada  corporation                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                 |   |
|   |                                                                                                                                                                                                                                 |   |
|   | By:                                                                                                                                                                                                                                  | /s/ J. M Haggar, III |
|   |                                                                                                                                                                                                                                 | J. M Haggar, III |
|   |                                                                                                                                                                                                                                 | Chief Executive Officer  for both |
|   |                                                                                                                                                                                                                                 |   |
|   | **Agent:**                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                 |   |
|   | JPMORGAN CHASE BANK  (formerly The Chase Manhattan Bank who was successor in interest by merger to  Chase Bank of Texas, National Association who was formerly Texas Commerce  Bank National Association), Individually and as Agent |
|   |                                                                                                                                                                                                                                 |   |
|   |                                                                                                                                                                                                                                 |   |
|   | By:                                                                                                                                                                                                                                  | /s/ D. Scott Harvey |
|   |                                                                                                                                                                                                                                 | Name: | D. Scott Harvey |
|   |                                                                                                                                                                                                                                 | Title: | Vice President |
|   |                                                                                                                                                                                                                                 |   |
|   | **Banks:**                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                 |   |
|   | GUARANTY BANK                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                 |   |
|   |                                                                                                                                                                                                                                 |   |
|   | By:                                                                                                                                                                                                                                  | /s/ Robert S. Hays |
|   |                                                                                                                                                                                                                                 | Name: | Robert S. Hays |
|   |                                                                                                                                                                                                                                 | Title: | Senior Vice President |
|   |                                                                                                                                                                                                                                 |   |
|   | COMERICA BANK,  successor in interest by merger to  Comerica Bank - Texas                                                                                                                                                            |
|   |                                                                                                                                                                                                                                 |   |
|   | By:                                                                                                                                                                                                                                  | /s/ Margareth Fanini |
|   |                                                                                                                                                                                                                                 | Name: | Margareth K. Fanini |
|   |                                                                                                                                                                                                                                 | Title: | Vice President - Tax  Division |
|   |                                                                                                                                                                                                                                 |   |
|   | BANK OF AMERICA, N.A.                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                 |   |
|   |                                                                                                                                                                                                                                 |   |
|   | By:                                                                                                                                                                                                                                  | /s/ Douglas J. Bolt |
|   |                                                                                                                                                                                                                                 | Name: | Douglas J. Bolt |
|   |                                                                                                                                                                                                                                 | Title: | Vice President |

 

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|   | SOUTHWEST BANK OF  TEXAS, N.A.  |
|--------|---------------------------------|
|   |                            |   |
|   |                            |   |
|   | By:                             | /s/ Melinda Jackson |
|   |                            | Name: | Melinda N. Jackson |
|   |                            | Title: | Senior Vice President |
|   |                            |   |
|   | U.S. BANK NATIONAL  ASSOCIATION |
|   |                            |   |
|   |                            |   |
|   | By:                             | /s/ John Holland |
|   |                            | Name: | John Holland |
|   |                            | Title: | Senior Vice President |
|   |                            |   |
|   | THE BANK OF NOVA SCOTIA         |
|   |                            |   |
|   |                            |   |
|   | By:                             | /s/ William E. Zarrett |
|   |                            | Name: | William E. Zarrett |
|   |                            | Title: | Managing Director |

 

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**CONSENT OF DOMESTIC SUBSIDIARIES**

 

Each of the undersigned Subsidiaries hereby (a) agrees that theSubsidiary Guaranty to which it is a signatory is and shall remain in fullforce and effect; (b) ratifies and confirms all terms and provisions ofthe Subsidiary Guaranty to which it is a signatory, (c) acknowledges itsconsent and agreement to the Amendment including, without limitation Section4.2 thereof, (d) reaffirms all agreements and obligations under theSubsidiary Guaranty to which it is a signatory, with respect to the Loans, theNotes, the Agreement and all other documents, instruments or agreementsgoverning, securing or pertaining to the Loans, and (f) represents andwarrants that all requisite corporate action necessary for it to execute thisConsent of Domestic Subsidiaries has been taken.

 
|   | BOWIE MANUFACTURING  COMPANY, a Nevada corporation                                         |
|--------|--------------------------------------------------------------------------------------------|
|   | CORSICANA COMPANY, a  Nevada corporation                                                   |
|   | DALLAS PANT  MANUFACTURING COMPANY, a Nevada corporation                                   |
|   | GREENVILLE PANT  MANUFACTURING COMPANY, a Nevada corporation                               |
|   | MCKINNEY PANT  MANUFACTURING COMPANY, a Nevada corporation                                 |
|   | OLNEY MANUFACTURING  COMPANY, a Nevada corporation                                         |
|   | WAXAHACHIE GARMENT  COMPANY, a Nevada corporation                                          |
|   | LA ROMANA MANUFACTURING  CORPORATION, a Nevada corporation                                 |
|   | HAGGAR SERVICES, INC.,  a Texas corporation                                                |
|   | DUNCAN MANUFACTURING  COMPANY, an Oklahoma corporation                                     |
|   | WESLACO CUTTING, INC.,  a Nevada corporation                                               |
|   | WESLACO SEWING, INC., a  Nevada corporation                                                |
|   | HAGGAR DIRECT, INC., a  Nevada corporation                                                 |
|   | SAN GABRIEL ENTERPRISES,  INC., a Texas corporation                                        |
|   | MULTIPLES, U.S.A.,  INC., a Texas corporation                                              |
|   | EDINBURG DIRECT GARMENT  COMPANY, INC., a Texas corporation                                |
|   | WESLACO DIRECT CUTTING  COMPANY, INC., a Texas corporation                                 |
|   | HAGGAR.COM, INC., a  Texas corporation                                                     |
|   | JERELL CLOTHING  MANAGEMENT, INC., a Texas corporation                                     |
|   | HAGGAR WOMEN’S WEAR,  LTD. (formerly Jerell, Ltd.), a Texas limited  partnership |
|   | HAGGAR CANADA, INC, a  Nevada corporation                                                  |
|   | PHLOX ACQUISITIONS LLC,  a Delaware limited liability company                              |
|   | PHLOX ACQUISITIONS  TRUST, a Delaware statutory trust                                      |
|   |                                                                                       | By: Phlox Acquisitions LLC, its sole trustee |
|   |                                                                                       |
|   |                                                                                       |
|   | By:                                                                                        | /s/ J. M. Haggar, III |
|   |                                                                                       | J. M. Haggar, III |
|   |                                                                                       | Chairman/Chief  Executive Officer of each Subsidiary |
|        |                                                                                            |  |  |

 

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SCHEDULE 4

to

HAGGAR CORP.

 

THIRD AMENDMENT TO SECONDAMENDED AND RESTATED CREDIT AGREEMENT

 

COMMITMENTS

 
| **Bank**                       | ** ** | **Commitment** | ** **     |
|--------------------------------|------------|----------------|----------------|
| JPMorgan Chase Bank            |       | $              | 17,000,000.00  |   |
| Comerica Bank                  |       | $              | 17,000,000.00  |   |
| Guaranty Bank                  |       | $              | 17,000,000.00  |   |
| Bank of America, N.A.          |       | $              | 15,000,000.00  |   |
| Southwest Bank of Texas, N.A.  |       | $              | 15,000,000.00  |   |
| U.S. Bank National Association |       | $              | 15,000,000.00  |   |
| The Bank of Nova Scotia        |       | $              | 15,000,000.00  |   |
|                           |       | $              | 111,000,000.00 |   |

 

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EXHIBIT A

to

HAGGAR CORP.

 

SECOND AMENDED ANDRESTATED CREDIT AGREEMENT

 

BORROWING BASECERTIFICATE

 

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BORROWING BASECERTIFICATE

 

(for the month ending                      or as of                      )

 

HAGGAR CLOTHING CO.

 

TO:                            JPMORGANCHASE BANK

2200 Ross Avenue

Third Floor

Dallas, Texas75266

Attention:  Scott Harvey

 

DATE:                        ,200  

 

RE:                              SecondAmended and Restated Credit Agreement dated as of June 13, 2002 (as amended,the “Agreement”), by and among Haggar Clothing Co., Haggar Corp., JPMorganChase Bank and the Banks listed in the Agreement.

 
| 1.     | Receivables |              |                                                                                                                                                                                                                                                                              |   |   |                                                                            |
|--------|-------------|-------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------|
|   |        |              |                                                                                                                                                                                                                                                                              |   |   |                                                                            |   |
|   | A.          | Total Receivables |                                                                                                                                                                                                                                                                              |   |   | $                                                                               |   |   |
|   |        |              |                                                                                                                                                                                                                                                                              |   |   |                                                                            |   |
|   | B.          | Less:             |                                                                                                                                                                                                                                                                              |   |   |                                                                            |   |
|   |        |              |                                                                                                                                                                                                                                                                              |   |   |                                                                            |   |
|   |        | (i)               | affiliate and employee  Receivables                                                                                                                                                                                                                                               |   | $      | (              | ) |   |   |
|   |        |              |                                                                                                                                                                                                                                                                              |   |   |                                                                            |   |   |
|   |        | (ii)              | Receivables unpaid  after 90 days after date of invoice (or the effective date of Dated Invoices)                                                                                                                                                                                 |   | $      | (              | ) |   |   |
|   |        |              |                                                                                                                                                                                                                                                                              |   |   |                                                                            |   |   |
|   |        | (iii)             | Receivables subject to  Lien                                                                                                                                                                                                                                                      |   | $      | (              | ) |   |   |
|   |        |              |                                                                                                                                                                                                                                                                              |   |   |                                                                            |   |   |
|   |        | (iv)              | Receivables with  respect to which goods are placed on consignment, guaranteed sale or other  terms by reason of which the payment obligation of the account debtor may be  conditional, but only to the extent that such Receivables equal or exceed  $500,000 in the aggregate. |   | $      | (              | ) |   |   |
|   |        |              |                                                                                                                                                                                                                                                                              |   |   |                                                                            |   |   |
|   |        | (v)               | all uncollectible  Receivables                                                                                                                                                                                                                                                    |   | $      | (              | ) |   |   |
|   |        |              |                                                                                                                                                                                                                                                                              |   |   |                                                                            |   |   |
|   |        | (vi)              | reserve for “discounts”                                                                                                                                                                                                                                                 |   | $      | (              | ) |   |   |
|   |        |              |                                                                                                                                                                                                                                                                              |   |   |                                                                            |   |   |
|   |        | (vii)             | reserve for “build-ups”                                                                                                                                                                                                                                                 |   | $      | (              | ) |   |   |
|   |        |              |                                                                                                                                                                                                                                                                              |   |   |                                                                            |   |   |
|   |        | (viii)            | reserve for  “deductions”                                                                                                                                                                                                                                               |   | $      | (              | ) |   |   |
|   |        |              |                                                                                                                                                                                                                                                                              |   |   |                                                                            |   |   |
|   |        | (ix)              | other reserves                                                                                                                                                                                                                                                                    |   | $      | (              | ) |   |   |
|        |             |                   |                                                                                                                                                                                                                                                                                   |        |        |                                                                                 |  |  |  |  |

 

1

----

 
|   | C.                           | Preliminary Total of  Eligible Receivables                                                                                                                                |                                       |   |                                                                            | $      |                                                                            |   |
|--------|------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------|--------|---------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|--------|
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | D.                           | 5% of line C                                                                                                                                                              |                                       |   |                                                                            | $      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | E.                           | Total Dated Invoices  included in line C.                                                                                                                                 |                                       |   |                                                                            | $      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | F.                           | If line E greater than  line D, Line E minus line D =                                                                                                                     |                                       |   |                                                                            | $      | (              | )      |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | G.                           | Total of Eligible  Receivables (line C minus line F)                                                                                                                      |                                       |   |                                                                            | $      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | H.                           | 80% of Total Eligible  Receivables (i.e., line G)                                                                                                                         |                                       |   |                                                                            | $      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
| 2.     | Inventory                    |                                                                                                                                                                      |                                       |   |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | A.                           | Total Inventory per  attached summary schedule                                                                                                                            |                                       |   |                                                                            | $      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | B.                           | Less: ineligible  Inventory (i.e., subject to Liens)                                                                                                                      |                                       | $      | (              | )      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | C.                           | Total Eligible  Inventory                                                                                                                                                 |                                       |   |                                                                            | $      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | D.                           | 50% of Eligible  Inventory                                                                                                                                                |                                       |   |                                                                            | $      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
| 3.     | Borrowing Base               |                                                                                                                                                                      |                                       |   |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | A.                           | (i)                                                                                                                                                                       | 80% of Eligible  Receivables (from line H) |   |                                                                            |   | $                                                                               |   |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   |                         | (ii)                                                                                                                                                                      | 50% of Eligible  Inventory (from line D)   |   |                                                                            |   | $                                                                               |   |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | B.                           | Borrowing Base Formula  Sum                                                                                                                                               |                                       |   |                                                                            | $      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | C.                           | Less: amount by which  (A)(ii) is greater than 60% of the Total Commitments (i.e., $66,600,000)                                                                           |                                       | $      | (              | )      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | D.                           | Borrowing Base                                                                                                                                                            |                                       |   |                                                                            | $      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
| 4.     | Borrowing Base  Availability |                                                                                                                                                                      |                                       |   |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | A.                           | Borrowing Base                                                                                                                                                            |                                       |   |                                                                            | $      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | B.                           | Less:                    Principal  amount outstanding under the Agreement |                                       | $      | (              | )      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | C.                           | Borrowing Base  Availability                                                                                                                                              |                                       |   |                                                                            | $      |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
| 5.     | Available Commitment         |                                                                                                                                                                      |                                       |   |                                                                            |   |
|   |                         |                                                                                                                                                                      |                                       |   |                                                                            |   |                                                                            |   |
|   | A.                           | Total Commitments                                                                                                                                                         |                                       |   |                                                                            | $      | 111,000,000                                                                     |   |

 

2

----

 
|   | B.           | Less:                        |                                                              |   |   |                                                                            |   |
|--------|--------------|------------------------------|-------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------|--------|
|   |         |                         |                                                              |   |   |                                                                            |   |   |
|   |         | (i)                          | Principal amount  outstanding under the Agreement                 |   | $      | (              | )      |   |   |
|   |         |                         |                                                              |   |   |                                                                            |   |   |
|   |         | (ii)                         | aggregate amount of all  issued and outstanding Letters of Credit |   | $      | (              | )      |   |   |
|   |         |                         |                                                              |   |   |                                                                            |   |   |
|   | C.           | Available Commitment         |                                                              |   |   | $                                                                               |   |   |
|   |         |                         |                                                              |   |   |                                                                            |   |   |
| 6.     | Availability |                         |                                                              |   |   |                                                                            |
|   |         |                         |                                                              |   |   |                                                                            |   |   |
|   | A.           | Borrowing Base  Availability |                                                              |   |   | $                                                                               |   |   |
|   |         |                         |                                                              |   |   |                                                                            |   |   |
|   | B.           | Available Commitment         |                                                              |   |   | $                                                                               |   |   |
|   |         |                         |                                                              |   |   |                                                                            |   |   |
|   | C.           | Lesser of A or B             |                                                              |   |   | $                                                                               |   |   |

 

I hereby certifythat, to the best of my knowledge after appropriate inquiry, the foregoing istrue and correct as of the last day of the month indicated.

 
|   | HAGGAR CLOTHING CO. |
|--------|---------------------|
|   |                |
|   |                |
|   | By:                 |   |
|   |                | Name |   |
|   |                | Title: |   |

 

3

----

 

EXHIBIT C

to

HAGGAR CORP.

 

SECOND AMENDED ANDRESTATED CREDIT AGREEMENT

 

COMPLIANCE CERTIFICATE

 

----

 

COMPLIANCE CERTIFICATE

 

As of the date indicated below, the undersigned hereby certifies that(i) no Default or Unmatured Default (as defined in the Credit Agreement)has occurred and is continuing under that certain Second Amended and RestatedCredit Agreement (as amended, the “Credit Agreement”) among Haggar ClothingCo., Haggar Corp., JPMorgan Chase Bank and the Banks listed therein,(ii) the value of all Inventory (as defined in the Credit Agreement) asreflected in the Company’s financial statements does not exceed its netrealizable value and (iii) the information contained on the Annexes heretois true, correct and complete.

 
|   | HAGGAR CLOTHING CO. |
|--------|---------------------|
|   |                |
|   |                |
|   | By:                 |   |
|   |                | Name: |   |
|   |                | Title: |   |
|   |                | Dated: |   |

 

----

 

**ANNEX A TO COMPLIANCE CERTIFICATE**

 

Summary

 
| **Requirement** | ** **                                                                                                                                                                                                                             | **Required Level** | ** **   | **Current Status** | ** ** | **Compliance** | ** **                    |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------|--------------|--------------------|------------|----------------|-------------------------------|
|            |                                                                                                                                                                                                                                   |               |         |               |       |           |                          |
| (I)             | Fixed Charge                                                                                                                                                                                                                           |               | 1.25 to 1.00 |               | to 1.00    |           | Yes    No |   |
|            | (detail on Annex B)                                                                                                                                                                                                                    |               |         |               |       |           |                          |   |
|            |                                                                                                                                                                                                                                   |               |         |               |       |           |                          |   |
| (II)            | Funded Debt Ratio                                                                                                                                                                                                                      |               | 3.00 to 1.00 |               | to 1.00    |           | Yes    No |   |
|            | (detail on Annex C)                                                                                                                                                                                                                    |               |         |               |       |           |                          |   |
|            |                                                                                                                                                                                                                                   |               |         |               |       |           |                          |   |
| (III)           | Net Worth Company Group:                                                                                                                                                                                                               |               |         |               | $          |           |                          |   |   |
|            |                                                                                                                                                                                                                                   |               |         |               |       |           |                          |   |
|            | 10% of the Net  Worth of the Company Group                                                                                                                                                                                             |               |         |               | $          |           |                          |   |   |
|            |                                                                                                                                                                                                                                   |               |         |               |       |           |                          |   |
|            | Net Worth  attributable to non–guarantor subsidiaries (not to exceed 10% of the Net  Worth of the Company Group)                                                                                                                  |               |         |               | $          |           |                          | Yes    No |   |
|            |                                                                                                                                                                                                                                   |               |         |               |       |           |                          |   |
|            | (a)     $133,100,000;                                                                                                                                                                                              |               | $            |               |       |           |                          |   |   |
|            |                                                                                                                                                                                                                                   |               |         |               |       |           |                          |   |
|            | (b)    Plus 50% of the cumulative net income of the Company  Group, on a consolidated basis for each fiscal quarter to have completely  elapsed since December 31, 2003 (with no reduction for negative quarters);  and |               | $            |               |       |           |                          |   |   |
|            |                                                                                                                                                                                                                                   |               |         |               |       |           |                          |   |
|            | (c)     Plus (66–2/3%) of the net proceeds from any  registered public offering of the capital stock of Haggar or the Company (if  any).                                                                      |               | $            |               |       |           |                          |   |   |
|            |                                                                                                                                                                                                                                   |               |         |               |       |           |                          |   |
|            | (d)    Required Net Worth of the Company Group (sum of  (a),(b) and (c)):                                                                                                                                               |               | $            |               |       |           |                          |   |   |
|            |                                                                                                                                                                                                                                   |               |         |               |       |           |                          |   |
|            | Is line (III) greater than line (d)?                                                                                                                                                                                                   |               |         |               |       |           | Yes    No |   |
|            |                                                                                                                                                                                                                                   |               |         |               |       |           |                          |   |
| (IV)            | Inventory Turns                                                                                                                                                                                                                        |               | 2.0          |               |       |           | Yes    No |   |
|            | (detail on Annex D)                                                                                                                                                                                                                    |               |         |               |       |           |                          |   |
|            |                                                                                                                                                                                                                                   |               |         |               |       |           |                          |   |
| (V)             | Actual Capital  Expenditures for current fiscal year                                                                                                                                                                                   |               | $            |               |       |           |                          |   |   |

 

1

----

 
|   | (a)     less any expenditures for repair or replacement  of property made with insurance proceeds (to the extent such expenditures do  not exceed the net cash amount of such insurance proceeds)                    |   | $      | (                   | )      |   |                          |   |   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|
|   | (b)    less any expenditures for purchase of the  Company’s headquarters at 11511 Luna Road (to the extent such expenditures do  not exceed proceeds from the sale of the prior headquarters at 6113 Lemmon  Avenue) |   | $      |                                                                                                          |   |   |                          |   |   |
|   | (c)     SUBTOTAL                                                                                                                                                                                                     |   |   |                                                                                                          | $      |   |                          |   |   |
|   | Does 10% of the  Net Worth of the Company Group as set forth above exceed line (c)?                                                                                                                                                 |   |   |                                                                                                          |   |   | Yes    No |   |
|        |                                                                                                                                                                                                                                          |        |        |                                                                                                               |        |        |                               |        |        |  |

 

2

----

 

**ANNEX B TO COMPLIANCE CERTIFICATE**

 

**HAGGAR CORP.**

**FIXED CHARGE RATIO**

**12 MONTHS ENDED            ,200  **

**($000’S)**

 
| ** **                                                                                                                                   | ** ** | **Qtr.** | ** ** | **Qtr.** | ** ** | **Qtr.** | ** ** | **Qtr.** | ** ** | **12 Months Ended** | ** ** |
|----------------------------------------------------------------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|----------|------------|---------------------|------------|
|                                                                                                                                         |       |     |       |     |       |     |       |     |       |                |       |
| Net Income                                                                                                                                   |       |     |       |     |       |     |       |     |       |                |       |
| - Gains + Losses Cap assets Extr Event                                                                                                       |       |     |       |     |       |     |       |     |       |                |       |
| + Depreciation and Amortization                                                                                                              |       |     |       |     |       |     |       |     |       |                |       |
| + Interest Expense                                                                                                                           |       |     |       |     |       |     |       |     |       |                |       |
| + Taxes (exclusive of the tax effects relating to  the closing of the Edinburg facility, the operations in Japan, and the  Weslaco facility) |       |     |       |     |       |     |       |     |       |                |       |
| + Japan, Edinburg and Weslaco Charges (not to exceed  $14,915,000 after tax or $21,800,000 before tax) or minus the reversal  thereof        |       |     |       |     |       |     |       |     |       |                |       |
| Total = Operating Cash Flow                                                                                                                  |       |     |       |     |       |     |       |     |       |                |       |
| - Taxes (exclusive of the tax effects relating to  the closing of the Edinburg facility, the operations in Japan and the Weslaco  facility)  |       |     |       |     |       |     |       |     |       |                |       |
|                                                                                                                                         |       |     |       |     |       |     |       |     |       |                |       |
| Total Operating Cash Flow minus tax                                                                                                          |       | $        |       |     | $          |     |       | $        |       |                | $          |   |   | $ |   |   |
|                                                                                                                                         |       |     |       |     |       |     |       |     |       |                |       |
| Interest Expense                                                                                                                             |       |     |       |     |       |     |       |     |       |                |       |
| Req. Principal Payments                                                                                                                      |       |     |       |     |       |     |       |     |       |                |       |
| Cash Dividends                                                                                                                               |       |     |       |     |       |     |       |     |       |                |       |
| Maintenance  Capital Expenditure ($2,000,000)                                                                                                |       |     |       |     |       |     |       |     |       |                |       |
|                                                                                                                                         |       |     |       |     |       |     |       |     |       |                |       |
| Total Fixed Charges                                                                                                                          |       | $        |       |     | $          |     |       | $        |       |                | $          |   |   | $ |   |   |
|                                                                                                                                         |       |     |       |     |       |     |       |     |       |                |       |
| Fixed Charge Ratio                                                                                                                           |       |     |       |     |       |     |       |     |       |                |       |
|                                                                                                                                         |       |     |       |     |       |     |       |     |       |                |       |
| Fixed Charges/Cash Flow                                                                                                                      |       |     |       |     |       |     |       |     |       | to 1.0              |       |

 

----

 

**ANNEX C TO COMPLIANCE CERTIFICATE**

 

**HAGGAR CORP.**

**FUNDED DEBT RATIO**

**12 MONTHS ENDED                        **

**($000’S)**

 
| Funded Debt                                   |   |   |                                                                                                          |    |   |
|-----------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------|---------|--------|
|                                          |   |   |                                                                                                          |    |   |
| Revolver                                      |   | $      |                                                                                                          |    |   |   |
| Industrial Revenue Bonds +                    |   | $      |                                                                                                          |    |   |   |
| other notes                                   |   | $      |                                                                                                          |    |   |   |
| other long term indebtedness                  |   | $      |                                                                                                          |    |   |   |
| indebtedness secured by Liens                 |   | $      |                                                                                                          |    |   |   |
| Capital Lease Obligations                     |   | $      |                                                                                                          |    |   |   |
| *less*: obligations under any  Guarantee      |   | $      | (                   | )       |   |   |
| *less*: obligations under any  Swap Agreement |   | $      | (                   | )       |   |   |
| *less*: Aircraft Indebtedness                 |   | $      | (                   | )       |   |   |
| *less*: Life Insurance  Indebtedness          |   | $      | (                   | )       |   |   |
|                                          |   |   |                                                                                                          |    |   |
| Total Funded Indebtedness                     |   |   |                                                                                                          | $       |   |   |
|                                          |   |   |                                                                                                          |    |   |
| Operating Cash Flow                           |   |   |                                                                                                          | $       |   |   |
| (detail on Annex B)                           |   |   |                                                                                                          |    |   |
|                                          |   |   |                                                                                                          |    |   |
| Funded Debt/Operating Cash Flow               |   |   |                                                                                                          | to 1.00 |   |

 

----

 

**ANNEX D TO COMPLIANCE CERTIFICATE**

 

**HAGGAR CORP.**

**INVENTORY TURNS ANALYSIS**

**($000’S)**

 
| PRIOR 12 MONTHS’ COST OF SALES                                                                                                                   |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
|                                                                                                                                                  |   |   |   |
| 3rd  Prior Quarter                                                                                                                               |   |   |   |
|                                                                                                                                                  |   | $      |   |   |
|                                                                                                                                                  |   | $      |   |   |
|                                                                                                                                                  |   | $      |   |   |
| Total                                                                                                                                                 |   | $      |   |   |
|                                                                                                                                                  |   |   |   |
| 2nd Prior Quarter                                                                                                                                     |   |   |   |
|                                                                                                                                                  |   | $      |   |   |
|                                                                                                                                                  |   | $      |   |   |
|                                                                                                                                                  |   | $      |   |   |
| Total                                                                                                                                                 |   | $      |   |   |
|                                                                                                                                                  |   |   |   |
| Prior Quarter                                                                                                                                         |   |   |   |
|                                                                                                                                                  |   | $      |   |   |
|                                                                                                                                                  |   | $      |   |   |
|                                                                                                                                                  |   | $      |   |   |
| Total                                                                                                                                                 |   | $      |   |   |
|                                                                                                                                                  |   |   |   |
| Current Quarter                                                                                                                                       |   |   |   |
|                                                                                                                                                  |   | $      |   |   |
|                                                                                                                                                  |   | $      |   |   |
|                                                                                                                                                  |   | $      |   |   |
| Total                                                                                                                                                 |   | $      |   |   |
|                                                                                                                                                  |   |   |   |
| Total 12 Months                                                                                                                                       |   | $      |   |   |
| Cost of Sales                                                                                                                                         |   |   |   |
|                                                                                                                                                  |   |   |   |
| Current Cost of  Inventory,                   ,  200   |   |   |   |
|                                                                                                                                                  |   |   |   |
| Total 12 Months  Cost of Sales/  Current Inventory Level                                                                                              |   | to 1.0 |   |

 

----

 

**ANNEX E TO COMPLIANCE CERTIFICATE**

 

**STANDBY**

**LETTERS OF CREDIT OUTSTANDING**

**           ,200  **

 
| **ISSUER** | ** ** | **LC#** | ** ** | **Maturity** | ** ** | **Amount** | ** ** |
|------------|------------|---------|------------|--------------|------------|------------|------------|
|       |       |    |       |         |       |       |       |
|       |       |    |       |         |       | $          |       |   |
|       |       |    |       |         |       | $          |       |   |
|       |       |    |       |         |       |       |       |
|       |       |    |       | Total        |       | $          |       |   |

 

----

 

**ANNEX F TO COMPLIANCE CERTIFICATE**

 

**PERMITTED INDEBTEDNESS**

 
| ** ** | ** **                                                                                                         | ** ** | ** ** | ** ** | **Compliance** | ** **                    |
|------------|--------------------------------------------------------------------------------------------------------------------|------------|------------|------------|----------------|-------------------------------|
|       |                                                                                                               |       |       |       |           |                          |
| (a)        | Commercial Letters of  Credit ($75,000,000 permitted)                                                              |       | $          |       |           | Yes    No |   |
|       |                                                                                                               |       |       |       |           |                          |
| (b)        | Standby Letters of  Credit (other than those issued by the Agent) ($2,000,000 permitted)                           |       | $          |       |           | Yes    No |   |
|       |                                                                                                               |       |       |       |           |                          |
| (c)        | Share Repurchase  Obligations Severance ($2,500,000 permitted) $10,000,000 total permitted                         |       | $          |       |           | Yes    No |   |
|       |                                                                                                               |       |       |       |           |                          |
| (d)        | Other Indebtedness  (permitted:  $20,000,000)                                                                 |       | $          |       |           | Yes    No |   |
|       |                                                                                                               |       |       |       |           |                          |
| (e)        | Intercompany  Indebtedness (no limit on amount)                                                                    |       | $          |       |           | N/A                           |   |
|       |                                                                                                               |       |       |       |           |                          |
| (f)        | Accounts payable to  officers, directors (no limit on amount)                                                      |       | $          |       |           | N/A                           |   |
|       |                                                                                                               |       |       |       |           |                          |
| (g)        | Guarantees (no limit on  amount)                                                                                   |       | $          |       |           | N/A                           |   |
|       |                                                                                                               |       |       |       |           |                          |
| (h)        | Guarantees (Haggar  Direct less than one years rental) (no limit on amount)                                        |       | $          |       |           | N/A                           |   |
|       |                                                                                                               |       |       |       |           |                          |
| (i)        | Guarantees (Haggar  Direct exceeding one years rental) not to exceed $6,000,000 in the aggregate                   |       | $          |       |           | Yes    No |   |
|       |                                                                                                               |       |       |       |           |                          |
| (j)        | Additional senior  unsecured promissory notes with maturities after the Termination Date  ($35,000,000 permitted)  |       | $          |       |           | Yes    No |   |
|       |                                                                                                               |       |       |       |           |                          |
| (k)        | Aircraft Indebtedness  (not to exceed $4,150,000)                                                                  |       | $          |       |           | Yes    No |   |
|       |                                                                                                               |       |       |       |           |                          |
| (l)        | Life Insurance Indebtedness  (not to exceed the lesser of (a) $9,100,000 or (b) cash value of insurance  policies) |       | $          |       |           | Yes    No |   |

 

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