EXHIBIT 10(G)


                          AGREEMENT AND PLAN OF MERGER


         THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated effective
March 25, 1999, is among PremiumWear, Inc., a Delaware corporation
("PremiumWear"), KLI Acquisition Corp., a Minnesota corporation and a
wholly-owned subsidiary of PremiumWear ("Acquisition Corp."), Klouda- Lenz,
Inc., a Minnesota corporation ("KLI"), and Timothy C. Klouda and Dennis G. Lenz,
the shareholders of KLI (individually, the "Shareholder" and collectively, the
"Shareholders").

                                   BACKGROUND:

         KLI has been and continues to act as PremiumWear's independent sales
representative organization. PremiumWear desires to acquire KLI by means of a
merger (the "Merger") of KLI into Acquisition Corp. with Acquisition Corp. as
the surviving corporation ("Surviving Corporation") and the separate corporate
existence of KLI shall cease, on the terms and conditions set forth in this
Agreement and in the Plan of Merger attached as Exhibit A.

         NOW, THEREFORE, it is agreed:

1.       Merger.

         1.1      Closing. The closing (the "Closing") of the Merger will take
                  place at such time and place as may be mutually agreeable to
                  the parties as soon as practicable after satisfaction of the
                  conditions stated in Sections 4.1 and 4.2 (the "Closing
                  Date"), and no later than April 5, 1999, unless a later date
                  is subsequently agreed to by the parties hereto in writing.

         1.2      The Merger. As soon as practicable after satisfaction, or, to
                  the extent permitted under this Agreement, the written waiver,
                  of all conditions to the Merger set forth in Sections 4.1 and
                  4.2, the parties must cause the Merger to be consummated by
                  filing articles of merger (the "Articles of Merger") with the
                  Minnesota Secretary of State, in such form as required by, and
                  executed in accordance with, the relevant provisions of the
                  Minnesota Business Corporation Act ("MBCA"), and the parties
                  must make all other filings or recordings required by the MBCA
                  in connection with the Merger and the transactions
                  contemplated by this Agreement. The Merger shall be effective
                  when the Articles of Merger are duly filed with the Minnesota
                  Secretary of State or such later date as may be set forth in
                  the Articles of Merger (the "Effective Time"), but in no event
                  later than the date of Closing unless a later date is
                  subsequently agreed to by the parties in writing.

         1.3      Merger Consideration; Exchange of Shares. Each share of common
                  stock, no par value per share, of KLI ("KLI Common Stock")
                  outstanding immediately prior to the Effective Time will, by
                  virtue of the Merger and without any action on the part of the
                  holder thereof, be converted into

                  (A)      0.241892 of shares of newly authorized $.01 par value
                           Common Stock of PremiumWear ("PremiumWear Common
                           Stock"), as a result of which the


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                           aggregate number of shares of PremiumWear Common
                           Stock to be received by each of the two Shareholders
                           shall be 120,946; and

                  (B)      $1.510634 in cash, as a result of which the aggregate
                           cash to be received by each of the two Shareholders
                           shall be $755,317.

         1.4      Additional Effects of the Merger.

                  (A)      Rights and Obligations. All the properties, rights,
                           privileges, powers and franchises of KLI and
                           Acquisition Corp. shall vest in the Surviving
                           Corporation, and all debts, liabilities and duties of
                           KLI and Acquisition Corp. shall become the debts,
                           liabilities and duties of the Surviving Corporation.

                  (B)      Articles of Incorporation and Bylaws. The articles of
                           incorporation of Acquisition Corp. in effect at the
                           Effective Time shall be the articles of incorporation
                           of the Surviving Corporation until amended in
                           accordance with applicable law. The bylaws of
                           Acquisition Corp. in effect at the Effective Time
                           shall be the bylaws of the Surviving Corporation
                           until amended in accordance with applicable law.

                  (C)      Directors. The directors of Acquisition Corp. at the
                           Effective Time shall be the initial directors of the
                           Surviving Corporation, each to hold office in
                           accordance with the articles of incorporation and
                           bylaws of the Surviving Corporation until each such
                           director's successor is duly elected or appointed.

                  (D)      Officers. The officers of Acquisition Corp. at the
                           Effective Time shall be the initial officers of the
                           Surviving Corporation, each to hold office in
                           accordance with the articles of incorporation and
                           bylaws of the Surviving Corporation until each such
                           officer's successor is duly elected or appointed.

         1.5      Facilitation of Closing. Between the date of this Agreement
                  and the Closing Date, the parties to this Agreement must take
                  all actions reasonably necessary to promptly facilitate the
                  Closing, including, but not limited to working toward
                  satisfying the conditions to Closing set forth in Sections 4.1
                  and 4.2 over which such party has control. In particular:

                  (A)      Conduct of Business. KLI will conduct its business
                           only in the ordinary course and use its reasonable
                           efforts to preserve intact its business organization
                           and goodwill, keep available the services of its
                           officers and employees and maintain satisfactory
                           relations with suppliers, customers and others having
                           a business relationship with KLI.

                  (B)      Negative Covenants. KLI will not (i) make any changes
                           with respect to its management or supervisory
                           personnel or its employment arrangements; (ii)
                           create, incur or assume any debt without the written
                           consent of PremiumWear; (iii) directly or indirectly
                           encourage, solicit or initiate discussions or
                           negotiations with any corporation, partnership,
                           person or any other entity or group (other than
                           PremiumWear) concerning any sale, merger or other
                           transaction related to the sale of its business prior
                           to April 5, 1999 and will not permit its officers,
                           directors or


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                           agents to do any of the foregoing; or (iv) take any
                           action which would cause a breach of any of the
                           representations in Section 2.

                  (C)      Director and Shareholder Vote. The Shareholders, as
                           the only two shareholders and directors KLI, will
                           vote their shares in favor of approval of the Merger
                           and all transactions related to the completion of the
                           Merger.

                  (D)      State Merger Filings. Upon approval of the Boards of
                           Directors and the shareholders of KLI and Acquisition
                           Corp., the officers of each corporation must file all
                           appropriate documents with the Secretary of State of
                           Minnesota necessary to consummate the Merger.

                  (E)      Due Diligence. KLI shall grant PremiumWear full
                           access to the employees, properties, books,
                           accounting and financial records, corporate records
                           and other business files of KLI for purposes of
                           examining the same in connection with the Merger.

                  (F)      Target Closing Date. The parties to this Agreement
                           shall utilize their best faith efforts to complete
                           the Merger prior to April 5, 1999.

2.       Representations and Warranties of KLI and the Shareholders. KLI and the
         Shareholders, jointly and severally, make the following representations
         and warranties to PremiumWear and Acquisition Corp.:

         2.1      Organization and Qualifications of KLI. KLI is a corporation
                  lawfully existing and in good standing under the laws of
                  Minnesota with full corporate power and authority to own and
                  lease its properties and to conduct its business in the manner
                  and in the places where such properties are owned or leased or
                  such business is conducted by it. Except its ownership of
                  100,000 shares in Future Products, Inc., a Minnesota
                  corporation (which will be divested by KLI prior to Closing),
                  KLI does not have any subsidiaries or own any securities
                  issued by any other entity, except for securities held for
                  investment in publicly held companies representing less than
                  one percent of the outstanding Common Stock of each such
                  publicly held company. KLI is not a partner or joint venturer
                  in any partnership or joint venture.

         2.2      Capitalization of KLI. The authorized capital stock of KLI
                  consists of 1,000,000 shares of common stock, no par value per
                  share, of which 1,000,000 shares are issued and outstanding,
                  fully paid and non-assessable. Schedule 2.2 attached hereto
                  sets forth a complete and correct list of the shareholders of
                  KLI and the number of shares of KLI's capital stock owned by
                  each shareholder. None of the KLI Common Stock has been issued
                  in violation of any federal or state securities laws or other
                  applicable laws. There are no outstanding warrants, options,
                  preemptive rights, or other rights to purchase or acquire
                  shares of KLI Common Stock or any other KLI capital stock. No
                  securities or other instruments of KLI are either directly or
                  indirectly convertible into or exchangeable for shares of
                  capital stock of KLI and there are no stock appreciation,
                  phantom or similar rights based on the book value or any other
                  attribute of any capital stock of KLI. No restrictions exist
                  on the transfer of shares of KLI Common Stock.



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         2.3      Authority of KLI and the Shareholders. This Agreement is the
                  valid and binding obligation of KLI and each of the
                  Shareholders in accordance with its terms. The execution,
                  delivery and performance by KLI of this Agreement and the
                  consummation by KLI of the transactions contemplated hereby
                  have been duly and validly authorized by all necessary action
                  on the part of KLI and no other corporate proceedings on the
                  part of KLI are necessary to authorize the execution and
                  delivery of this Agreement and to consummate the transactions
                  so contemplated. The execution, delivery and performance of
                  this Agreement by KLI and the Shareholders and the
                  consummation of the transactions contemplated by this
                  Agreement will not violate or result in a default under

                  (A)      any provision of the articles of incorporation or 
                           bylaws of KLI;

                  (B)      any provision of any agreement or obligation to which
                           KLI or either Shareholder is party or by which any of
                           KLI's property is bound; or

                  (C)      any laws, rules or regulations to which KLI, either
                           Shareholder or any of their respective properties may
                           be subject.

         2.4      Title to Properties; Condition of Properties. Except as listed
                  on Schedule 2.4, KLI has good and marketable title to all of
                  the assets owned or used in its business, including, without
                  limitation, all assets listed on the KLI Financial Statements
                  (as defined in Section 2.6), free and clear of any lien,
                  security interest, mortgage, pledge or other encumbrance of
                  any kind (collectively, "Encumbrances"). All assets owned or
                  used by KLI are in good working order, normal wear and tear
                  excepted. All assets necessary for the continued operation of
                  KLI's business as it is currently being conducted are owned by
                  KLI.

         2.5      Real Property.  KLI owns no real property.

         2.6      Financial Statements. KLI has delivered to PremiumWear the
                  unaudited income statement and balance sheet of KLI for each
                  of the preceding three years with the last one ended December
                  31, 1998 (the "KLI Financial Statements"). Except as disclosed
                  on Schedule 2.6, all of the KLI Financial Statements referred
                  to in this Section have been prepared in accordance with
                  generally accepted accounting principles applied on a basis
                  consistent with KLI's past practices, are complete and correct
                  and present fairly the financial condition of KLI as of the
                  dates of said statements and the results of its operations for
                  the periods covered.

         2.7      Taxes. KLI filed an election to be treated as an S Corporation
                  effective November 1, 1986, and from that date through the
                  Closing has been and will be fully qualified as an S
                  Corporation under the Internal Revenue Code (the "Code"). In
                  the event that KLI's Subchapter S Corporation election and
                  status under the Code is held invalid with respect to any
                  period of time prior to the Closing Date and, as a result,
                  Acquisition Corp. as a successor to KLI, or PremiumWear, is
                  required to pay corporate Taxes with respect to any period of
                  time prior to the Closing Date, the Shareholders shall
                  promptly reimburse PremiumWear for any and all such Tax
                  payments. Subject to the foregoing, KLI and the Shareholders
                  have timely filed and will timely file all federal, state,
                  county, local and foreign income, excise, property, franchise,
                  and other tax returns which are required to be filed by it and
                  them (in connection with income from KLI), respectively, with
                  respect to any period of time ending 



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                  on or before the Closing Date and, subject to the foregoing,
                  have paid or will pay all Taxes, if any, with respect to such
                  periods which have or may hereafter become due so that
                  Acquisition Corp. as a successor to KLI, or PremiumWear, will
                  not have any tax deficiencies, including penalties and
                  interest, assessed against them arising from any audit by any
                  tax authority with respect to any period ending on or prior to
                  the Closing Date. Such returns are true, complete and correct
                  in all material respects. Neither KLI nor any Shareholder has
                  received notice of any tax deficiency proposed or assessed
                  against it or him which has not been paid through settlement
                  or otherwise, and has not executed any waiver of any statute
                  of limitations on the assessment or collection of any tax.
                  None of KLI's or any Shareholder's tax returns has been
                  audited by governmental authorities in or during the three
                  most recent full fiscal years of KLI. Neither KLI nor any
                  Shareholder has received any notice of any impending audit by
                  any taxing authority. None of KLI or its Affiliates are
                  subject to or bound by any agreement which imposes an actual
                  or potential tax indemnification obligation on KLI. The terms
                  "Tax" or "Taxes" shall mean any kind of tax imposed by a
                  local, state, federal or foreign tax authority.

         2.8      Absence of Undisclosed Liabilities. Except as reflected or
                  reserved against on the KLI Financial Statements and except
                  for liabilities (none of which individually or in the
                  aggregate are material) incurred in the ordinary course of
                  business since the date of the KLI Financial Statements, KLI
                  has no liabilities of any nature, whether accrued, absolute or
                  contingent. There are no agreements, judgments, decrees,
                  orders or, to the best of KLI's and the Shareholders'
                  knowledge, any facts which materially affect, or may in the
                  future (so far as can now be reasonably foreseen) materially
                  affect, the business, properties, operations or condition of
                  KLI which have not been specifically disclosed in this
                  Agreement.

         2.9      Accounts Receivable. To the best of KLI's and the
                  Shareholders' knowledge, all of the accounts receivable of KLI
                  reflected on the KLI Financial Statements or thereafter
                  acquired (including KLI Receivables) are valid and enforceable
                  claims, fully collectible and subject to no setoff or
                  counterclaim in the recorded amounts, subject only to the
                  allowance for doubtful accounts maintained in accordance with
                  KLI's past practices and reflected on the KLI Financial
                  Statements.

         2.10     Inventories. To the best of KLI's and the Shareholders'
                  knowledge, the inventory of KLI consists of items of a
                  quantity consistent with normal inventory levels of KLI and of
                  a quality and condition that is usable and saleable in the
                  ordinary course of business for the purposes for which the
                  inventory is intended, reasonable wear and tear excepted. Such
                  inventory is carried on KLI's books of account in accordance
                  with generally accepted accounting principles consistently
                  applied.

         2.11     Conduct of Business in the Ordinary Course. KLI has conducted
                  its business since December 31, 1998, only in the usual and
                  ordinary course consistent with past practice and since such
                  date, KLI has not

                  (A)      sold or transferred any of its assets, except
                           inventory in the ordinary course of business;

                  (B)      changed any method of accounting or accounting
                           practice;



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                  (C)      increased or promised to increase the compensation
                           payable to any employee or independent contractor,
                           other than in the ordinary course of business
                           consistent with past practice;

                  (D)      except as otherwise expressly contemplated by this
                           Agreement, made any direct or indirect payments,
                           dividends, distributions, sales or transfers of
                           assets, other than normal compensation consistent
                           with past practices, to any officer, director,
                           shareholder or employee of KLI or any of their
                           affiliates;

                  (E)      changed its outstanding shares of capital stock or
                           repurchased, redeemed or acquired any outstanding
                           shares of capital stock or other ownership interest
                           in securities of KLI; or

                  (F)      to the best of KLI's and the Shareholders' knowledge,
                           suffered any damage or casualty to its assets.

         2.12     Intellectual Property. KLI does not own any patents,
                  copyrights, trademarks or tradenames, nor, to the best of
                  KLI's and the Shareholders' knowledge, has it infringed upon
                  any intellectual property rights owned, held or used by any
                  person or entity. KLI has the right to use, free and clear of
                  any claims or rights of any person or entity, all trademarks,
                  service marks, tradenames, trade secrets and customer lists
                  which KLI is using, to the best of KLI's and the Shareholders'
                  knowledge.

         2.13     Contracts and Loans.

                  (A)      Except for contracts, commitments, plans, agreements
                           and licenses described on Schedule 2.13
                           ("Commitments"), KLI is not a party to or subject to
                           any agreement:

                           (1)      creating any obligation of KLI to pay more
                                    than $1,000;

                           (2)      providing for the purchase of all or
                                    substantially all of KLI's requirements of a
                                    particular product or service from a
                                    supplier, or for periodic minimum purchases
                                    of a particular product or service from a
                                    supplier;

                           (3)      not terminable on 30 days notice without
                                    penalty to or additional consideration from
                                    KLI, other than sales and purchase
                                    commitments entered into in the ordinary
                                    course of business for less than $1,000
                                    each;

                           (4)      with any sales agent or distributor;

                           (5)      other than as otherwise expressly provided
                                    in this Agreement, containing covenants
                                    limiting KLI's freedom to compete in any
                                    line of business, or with any person or
                                    entity, in any location;

                           (6)      for the licensure of any property (either as
                                    licensor or licensee); or



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                           (7)      with any present or former officer,
                                    director, employee, agent or shareholder of
                                    KLI or with any person or entity controlled
                                    by or affiliated with any of them.

                  (B)      True, correct and complete copies of the Commitments
                           have been provided to PremiumWear prior to the
                           execution of this Agreement. All Commitments are in
                           full force and effect and have not been amended,
                           extended or otherwise modified. Other than as
                           disclosed on Schedule 2.13, neither KLI nor, to the
                           best knowledge of KLI and each Shareholder, any other
                           person or entity is in default under any Commitments.

                  (C)      Notwithstanding the foregoing, except with respect to
                           the $100,000 line of credit with First Minnetonka
                           City Bank ("Line of Credit"), KLI is not a party to,
                           and none of the Commitments constitutes, a loan
                           agreement, a promissory note or indebtedness for
                           borrowed money which KLI has an obligation to repay
                           whether in the form of bank borrowings, guarantee of
                           indebtedness of a third party or otherwise. There is
                           no outstanding balance or any other amounts due under
                           the Line of Credit, except as may have been incurred
                           in the ordinary course of business consistent with
                           past practice. The Shareholders agree to pay any and
                           all outstanding balance or other amounts due under
                           the Line of Credit as of the Closing Date without
                           regard to the indemnification limitation contained in
                           Section 5.4(D), except as may have been incurred in
                           the ordinary course of business consistent with past
                           practice.

         2.14     Litigation. There is no legal, administrative, arbitration or
                  other proceeding or governmental investigation pending or, to
                  the best knowledge of KLI or any Shareholder, threatened
                  against KLI, or against any Shareholder relating to the
                  business of KLI or the KLI Common Stock.

         2.15     Compliance with Laws. Neither KLI, nor any Shareholder with
                  respect to the business of KLI, has violated, and neither are
                  violating, any statutes, regulations, ordinances or other
                  laws. There has never been any citation, fine or penalty
                  imposed or asserted against KLI, or any Shareholder relating
                  to the business of KLI or the KLI Common Stock, under any
                  foreign, federal, state or local law or regulation.

         2.16     Insurance. Schedule 2.16 lists each insurance policy
                  maintained by KLI with respect to its properties, assets and
                  business and a brief description of their respective
                  coverages, including coverage dates, deductibles, premiums and
                  policy limits.

         2.17     Permits. KLI holds all licenses, permits and franchises which
                  are required to permit it to conduct its business, and all
                  such licenses, permits and franchises are listed on Schedule
                  2.17.

         2.18     Consents and Approvals. No consent, authorization, order, or
                  approval of or filing with any governmental authority, person
                  or entity, including, without limitation, consents from
                  parties to the Commitments, is required for the execution and
                  delivery of this Agreement or the consummation by KLI and the
                  Shareholders of the transactions contemplated by this
                  Agreement.



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         2.19     Warranty or Other Claims. To the best of KLI's and the
                  Shareholders' knowledge, there are no existing claims against
                  KLI for goods or services sold, transferred or marketed which
                  are defective or fail to meet any product warranties or
                  contract or industry standards and, to the best knowledge of
                  KLI or each Shareholder, there are no threatened claims, or
                  any facts upon which a claim could be based, against KLI for
                  goods or services which are defective or fail to meet any
                  product warranties or contract or industry standards.

         2.20     Finder's Fee. Neither Shareholder nor KLI has incurred
                  liability or will become liable for any broker's commission or
                  finder's fee relating to or in connection with the transaction
                  contemplated by this Agreement.

         2.21     Employee Benefit Plans and Compensation.

                  (A)      All employee benefit plans (as that term is defined
                           in Section 3(3) of the Employee Retirement Income
                           Security Act of 1974 ("ERISA")), as amended, which
                           are maintained or contributed to by KLI for the
                           benefit of its employees or former employees are
                           described in Schedule 2.21, and KLI is in full
                           compliance with the Code and ERISA with respect to
                           all such employee benefit plans.

                  (B)      Other than claims for benefits by employees,
                           beneficiaries or dependents arising in the normal
                           course of the operation of such plans, no claim is
                           currently pending or, to the best knowledge of KLI or
                           any Shareholder, threatened against any such employee
                           benefit plan. There are no unfunded obligations of
                           KLI under any of its retirement, pension,
                           profit-sharing and deferred compensation plans and
                           programs. Except as disclosed in Schedule 2.21, each
                           such plan or program can be terminated at any time by
                           PremiumWear without penalty or material expense. The
                           Shareholders agree to pay any and all required
                           funding to KLI's pension plan for all periods before
                           and after the Closing Date without regard to the
                           indemnification limitations contained in Section
                           5.4(D).

                  (C)      KLI has filed all returns required under the Code
                           with respect to its employee benefit plans, including
                           returns required by the Department of Labor.

                  (D)      Schedule 2.21 sets forth the current compensation of
                           each employee of KLI.

         2.22     Bank Accounts. All of the bank accounts of KLI, and the
                  individuals with signature authority, are listed on Schedule
                  2.22.

         2.23     No Default. Neither KLI nor any Shareholder is in default or
                  violation (and no event has occurred which with notice or the
                  lapse of time or both would constitute a default or violation)
                  of any term, condition or provision of (i) KLI's articles of
                  incorporation or bylaws (or similar governing documents), (ii)
                  any note, bond, mortgage, indenture, lease, license, contract,
                  agreement or other instrument or obligation to which KLI, or a
                  Shareholder with respect to the business of KLI, is now a
                  party or by which either of them or any of their respective
                  properties or assets may be bound or (iii) any order, writ,
                  injunction, decree, law, statute, rule or regulation
                  applicable to KLI, or to a Shareholder with respect to the
                  business of KLI or any of their respective properties or
                  assets.



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         2.24     Investment Intent of Shareholder and Two-Year Holding Period.
                  Each Shareholder agrees, represents and warrants to
                  PremiumWear with respect to the shares of PremiumWear Common
                  Stock to be received in the Merger as follows:

                  (A)      Each Shareholder is acquiring beneficial ownership in
                           the PremiumWear Common Stock for investment for his
                           own account and not with a view to, or for resale in
                           connection with, any distribution thereof. Each
                           Shareholder understands that the shares of
                           PremiumWear Common Stock to be acquired have not been
                           registered under the Securities Act of 1933, as
                           amended, (the "Act") by reason of a specific
                           exemption from the registration provisions of the Act
                           which depends upon, among other things, the bona fide
                           nature of the investment intent as expressed herein;

                  (B)      Each Shareholder acknowledges that the shares of
                           PremiumWear Common Stock must be held indefinitely
                           unless subsequently registered under the Act or an
                           exemption from such registration is available. More
                           specifically, each Shareholder agrees to hold the
                           shares of PremiumWear Common Stock received by the
                           Shareholder in the Merger for a minimum holding
                           period of two (2) years from the date of Closing.
                           Nothing contained in this subsection (B) shall
                           prevent the Shareholders from participating in a
                           tender offer, merger or a similar transaction for the
                           purchase of all outstanding shares of PremiumWear;

                  (C)      Each Shareholder has such knowledge and experience in
                           financial and business matters that he is able to
                           evaluate the merits and risks of an investment in the
                           PremiumWear Common Stock and has determined to bear
                           and can well afford to bear the economic risks of
                           such investment;

                  (D)      Each Shareholder has had access to all material
                           information concerning PremiumWear and its
                           businesses, financial condition, and prospects for
                           the future, and to all additional information each
                           has deemed necessary to verify the accuracy of such
                           information;

                  (E)      Each Shareholder has had the ongoing opportunity to
                           ask questions of and receive answers from the
                           officers of PremiumWear regarding the businesses,
                           financial condition and future prospects of
                           PremiumWear; and

                  (F)      Each Shareholder agrees that each certificate
                           representing shares of PremiumWear Common Stock
                           issued in the Merger shall be endorsed with
                           substantially the following legend: "THE SHARES
                           REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
                           FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
                           CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO
                           SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
                           EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR
                           AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
                           THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
                           SECURITIES ACT OF 1933." Each Shareholder further
                           agrees that such certificates shall also be endorsed




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                           with a legend with respect to the two-year holding
                           period set forth in Section 2.24(B) above, which
                           legend shall automatically expire at the end of such
                           two-year period.

         2.25     No Tax Advice. Each Shareholder has received his own
                  independent advice with respect to the tax treatment of the
                  transactions contemplated hereby under federal, state and
                  local tax laws, and neither Shareholder has received or relied
                  upon any tax advice from PremiumWear, Acquisition Corp. or
                  their counsel in connection with such transactions.

         2.26     Customer Relationships. To the best of KLI's and the
                  Shareholders' knowledge, there has not occurred any material
                  or significant change in KLI's customer or vendor
                  relationships.

3.       Representations and Warranties of PremiumWear and Acquisition Corp.
         PremiumWear and Acquisition Corp., jointly and severally, make the
         following representations and warranties to KLI and each Shareholder:

         3.1      Organization and Qualifications of Acquisition Corp.
                  Acquisition Corp. and PremiumWear are corporations lawfully
                  existing and in good standing under the laws of the states of
                  Minnesota and Delaware, respectively, with full corporate
                  power and authority to own or lease their respective
                  properties and to conduct their respective businesses in the
                  manner and in the places where such properties are owned or
                  leased or such businesses are conducted by them.

         3.2      Authority of PremiumWear and Acquisition Corp. This Agreement
                  is a valid and binding obligation of PremiumWear and
                  Acquisition Corp. in accordance with its terms. The execution,
                  delivery and performance by PremiumWear and Acquisition Corp.
                  of this Agreement and the consummation by such parties of the
                  transactions contemplated hereby have been duly authorized by
                  all necessary corporate action on the part of PremiumWear and
                  Acquisition Corp., and no other corporate proceedings on the
                  part of any of them are necessary to authorize the execution
                  and delivery of this Agreement or to consummate the
                  transactions so contemplated. The execution, delivery and
                  performance of this Agreement by Acquisition Corp. and
                  PremiumWear and the consummation of the transactions
                  contemplated by this Agreement will not violate or result in a
                  default under

                  (A)      any provision of the articles or certificate of
                           incorporation or bylaws of Acquisition Corp. or
                           PremiumWear;

                  (B)      any provision of any agreement or obligation to which
                           Acquisition Corp. or PremiumWear is a party or by
                           which any of their respective properties is bound; or

                  (C)      any laws, rules or regulations to which Acquisition
                           Corp. or PremiumWear or any of their respective
                           properties may be subject.

         3.3      PremiumWear Common Stock. The shares of PremiumWear Common
                  Stock to be issued and delivered to the Shareholders by
                  PremiumWear pursuant to this Agreement will, on delivery of
                  the certificates therefor in accordance with the terms hereof,
                  be validly issued, fully paid, and nonassessable.



                                       10
<PAGE>

         3.4      SEC Filings. PremiumWear has filed all reports required to be
                  filed by it under the Securities Exchange Act of 1934, as
                  amended (the "Exchange Act"), including pursuant to Section
                  13(a) or 15(d) thereof, for the two years preceding the date
                  hereof (the foregoing materials being collectively referred to
                  herein as the "SEC Documents") on a timely basis, or has
                  received a valid extension of such time of filing and has
                  filed any such SEC Documents prior to the expiration of any
                  such extension. As of their respective dates, the SEC
                  Documents complied in all material respects with the
                  requirements of the Exchange Act and the rules and regulations
                  of the Securities and Exchange Commission (the "Commission")
                  promulgated thereunder. All material agreements to which
                  PremiumWear is a party or by which the property or assets of
                  PremiumWear is subject have been filed as exhibits to the SEC
                  Documents in accordance with applicable law to the extent such
                  documents were required to have been filed. The financial
                  statements of PremiumWear included in the SEC Documents,
                  including the notes thereto, (i) are true, complete and
                  correct in all material respects, (ii) comply in all material
                  respects with applicable accounting requirements and the
                  published rules and regulations of the Commission with respect
                  thereto, (iii) have been prepared in accordance with GAAP
                  consistently maintained and applied throughout the periods
                  indicated and consistent with past practices, except as may be
                  otherwise indicated in such financial statements or the notes
                  thereto, and (iv) present fairly and accurately in all
                  material respects the financial position of PremiumWear and
                  its wholly-owned subsidiaries as of and for the dates thereof
                  and the results of operations and cash flows for the periods
                  then ended, subject, in the case of unaudited statements, to
                  normal year-end audit adjustments, (v) are in accordance with
                  the books and records of PremiumWear and its wholly-owned
                  subsidiaries for the respective periods indicated, and (vi) do
                  not omit to state or reflect any material fact concerning
                  PremiumWear and its wholly-owned subsidiaries required by GAAP
                  to be stated or reflected therein.

4.       Conditions to Closing.

         4.1      Conditions to Obligations of KLI and the Shareholders. The
                  obligations of KLI and the Shareholders to consummate the
                  transactions contemplated by this Agreement are subject to the
                  fulfillment, prior to or at the Closing, of all of the
                  following conditions:

                  (A)      Each of the representations and warranties of
                           PremiumWear and Acquisition Corp. contained in
                           Section 3 must be true and correct in all material
                           respects as though made on and as of the Closing Date
                           and PremiumWear and Acquisition Corp. must, on or
                           before the Closing, have each performed all of their
                           respective obligations under this Agreement which are
                           to be performed on or before the Closing;

                  (B)      At the Closing, KLI shall have received a certificate
                           of the Secretary of Acquisition Corp. certifying as
                           to:

                           (1)      a copy of the resolutions of Acquisition
                                    Corp.'s board of directors which authorize
                                    the execution, delivery and performance of
                                    this Agreement as having been duly adopted
                                    and as being in full force and effect on the
                                    Closing Date; and



                                       11
<PAGE>

                           (2)      a copy of the articles of incorporation and
                                    bylaws of Acquisition Corp. as in effect on
                                    the Closing Date;

                  (C)      At the Closing, KLI shall have received a certificate
                           of the Secretary of PremiumWear certifying as to a
                           copy of the resolutions of PremiumWear's Board of
                           Directors which authorize the execution, delivery and
                           performance of this Agreement as having been duly
                           adopted and as being in full force and effect on the
                           Closing Date;

                  (D)      At the Closing, the Shareholders shall have received
                           the cash portion of the Merger consideration set
                           forth in Section 1.3 and a copy of instructions to
                           PremiumWear's transfer agent to promptly issue the
                           stock portion of the Merger consideration set forth
                           in Section 1.3;

                  (E)      The Articles of Merger shall have been filed in
                           accordance with the MBCA;

                  (F)      There shall not have occurred any material adverse
                           change in the business of PremiumWear subsequent to
                           the date of this Agreement;

                  (G)      Each of the Shareholders and PremiumWear shall have
                           executed an employment agreement in the form attached
                           hereto as Exhibit B;

                  (H)      All agreements, documents and other instruments to be
                           executed by the parties shall have been approved by
                           KLI's legal counsel which approval shall not be
                           unreasonably withheld;

                  (I)      KLI shall have completed its due diligence review of
                           PremiumWear to its reasonable satisfaction; and

                  (J)      All material consents and approvals of third parties
                           required under any contract to which KLI, any
                           Shareholder or PremiumWear is a party shall have been
                           received.

         4.2      Conditions to Obligations of PremiumWear and Acquisition
                  Corp.. The obligations of PremiumWear and Acquisition Corp. to
                  consummate the transactions contemplated by this Agreement are
                  subject to the fulfillment, prior to or at the Closing, of all
                  of the following conditions:

                  (A)      Each of the representations and warranties of KLI and
                           each Shareholder contained in Section 2 must be true
                           and correct in all material respects as though made
                           on and as of the Closing Date and KLI and each
                           Shareholder must, on or before the Closing, have
                           performed all of their respective obligations which
                           are to be performed on or before the Closing;

                  (B)      At the Closing, PremiumWear shall have received a
                           certificate of the Secretary of KLI certifying as to:



                                       12
<PAGE>

                           (1)      a copy of the resolutions of KLI's board of
                                    directors and shareholders authorizing the
                                    execution, delivery and performance of this
                                    Agreement as having been duly adopted and as
                                    being in full force and effect on the
                                    Closing Date; and

                           (2)      a copy of the articles of incorporation and
                                    bylaws of KLI as in effect on the Closing
                                    Date;

                  (C)      At the Closing, PremiumWear shall have received all
                           certificates and other instruments or documents
                           representing shares of KLI Common Stock;

                  (D)      The Articles of Merger shall have been filed in
                           accordance with MBCA;

                  (E)      There shall not have occurred any material adverse
                           change in the business of KLI subsequent to the date
                           of this Agreement;

                  (F)      Each of the Shareholders and PremiumWear shall have
                           executed an employment agreement in the form attached
                           hereto as Exhibit B;

                  (G)      KLI and each Shareholder shall have executed and
                           delivered to PremiumWear such certificates as may be
                           reasonably requested by PremiumWear;

                  (H)      All agreements, documents and other instruments to be
                           executed by the parties shall have been approved by
                           PremiumWear' legal counsel which approval shall not
                           be unreasonably withheld;

                  (I)      PremiumWear shall have completed its due diligence
                           investigation of KLI to its reasonable satisfaction;

                  (J)      All material consents and approvals of third parties
                           required under any contract to which KLI, any
                           Shareholder or PremiumWear is a party shall have been
                           received;

                  (K)      The Shareholders shall have provided to PremiumWear
                           assurances, in each case satisfactory to PremiumWear
                           in its sole discretion, that the following current
                           vendors of KLI will remain vendors of KLI follow the
                           Merger: California Manufacturing; Nucom, Ltd./Burks'
                           Bay; American Dry Goods; and Winona Knitting Mills;
                           and

                  (L)      KLI shall have delivered PremiumWear with evidence
                           satisfactory to PremiumWear that KLI shall have
                           divested its ownership in Future Products, Inc.
                           (identified as 100,000 shares of Common Stock of
                           Future Products, Inc.) and, shall have transferred
                           from KLI all accounts receivable and payable with
                           respect to which Future Products, Inc. has the right
                           to receive payment or has an obligation to make a
                           payment and shall have transferred from KLI all of
                           its employee receivables (identified to be $32,000 as
                           of 12/31/1998), such that in each case, KLI shall
                           have no further right or obligation with respect
                           thereto.



                                       13
<PAGE>

5.       Indemnification.

         5.1      Indemnification of PremiumWear. Subject to the provisions of
                  this Section 5, PremiumWear shall be indemnified by the
                  Shareholders, jointly and severally, against any damages,
                  claims, liabilities, losses and expenses, of any kind or
                  nature whatsoever which may be sustained or suffered by
                  PremiumWear as a result of any breach of any agreement,
                  representation, warranty or covenant made by KLI or any
                  Shareholder in this Agreement (each a "Loss" and collectively
                  "Losses").

         5.2      Indemnification of the Shareholders. Subject to the provisions
                  of this Section 5, the Shareholders shall be indemnified by
                  PremiumWear, against any damages, claims, liabilities, losses
                  and expenses, of any kind or nature whatsoever which may be
                  sustained or suffered by the Shareholders as a result of any
                  breach of any agreement, representation, warranty or covenant
                  made by PremiumWear in this Agreement (each a "Loss" and
                  collectively "Losses").

         5.3      Notice of Indemnification Claims. Promptly after the receipt
                  by an indemnified party of notice of any Loss as to which such
                  party may seek indemnification under this Agreement, the party
                  receiving such notice shall notify the party or parties from
                  whom it is seeking indemnification (the "Indemnifying Party").
                  In the case of a claim asserted by a third party, such
                  Indemnifying Party shall have the right to defend at its own
                  expense by its own counsel such matter to the extent of the
                  potential indemnification liability of the Indemnifying Party.
                  If the Indemnifying Party shall undertake to defend the
                  matter, it shall promptly notify the other party or parties of
                  such determination.

         5.4      Limitations on Indemnification Claims. The right to
                  indemnification under this Agreement shall be limited as
                  follows:

                  (A)      No claims for indemnification shall be made more than
                           two years after the Closing Date, and any such claims
                           which have been made and remain outstanding two years
                           after the Closing Date shall be processed to a
                           conclusion.

                  (B)      Any proceeds from insurance paid to the party seeking
                           indemnification as a result of the Loss shall
                           constitute a reduction of the amount of the Loss for
                           purposes of indemnification.

                  (C)      The calculation of the Loss shall take into account
                           any tax liabilities and/or tax benefits attributable
                           to the Loss.

                  (D)      No claim for indemnification shall be made unless the
                           amount of the Loss for which the claim is made, after
                           any reductions as provided in (B) and (C) above,
                           exceeds a threshold of $5,000 and the claim shall be
                           only for the amount of the Loss in excess of such
                           $5,000 threshold, provided, however, that
                           indemnification pursuant to Section 2.7 (taxes) of
                           this Agreement shall not be subject to the threshold
                           set forth above.


                                       14
<PAGE>



6.       Termination.

         6.1      Notwithstanding any provision in this Agreement to the
                  contrary, this Agreement may be terminated, and the
                  transactions contemplated by this Agreement abandoned, at any
                  time on or prior to the Closing Date:

                  (A)      by mutual written consent of PremiumWear and KLI;

                  (B)      by PremiumWear if any of the conditions set forth in
                           Section 4.2 have not been satisfied, or waived in
                           writing by PremiumWear, on the Closing Date;

                  (C)      by KLI if any of the conditions set forth in Section
                           4.1 have not been satisfied, or waived in writing by
                           KLI, on the Closing Date; or

                  (D)      by either PremiumWear or KLI in writing if the
                           Closing does not occur by April 5, 1999.

7.       Miscellaneous; Other Agreements.

         7.1      Survival. All representations, warranties, agreements,
                  covenants and obligations herein shall survive the execution
                  and delivery of this Agreement and the Closing and the
                  consummation of the transactions contemplated hereby and shall
                  not be affected by any examination made for or on behalf of
                  PremiumWear, Acquisition Corp. or KLI. Notwithstanding
                  anything contained herein to the contrary, the representations
                  and warranties of the parties shall survive the Closing for a
                  period of two years after the Closing Date, except for the
                  representations and warranties of KLI and Shareholder under
                  Sections 2.7, 2.15 and 2.21, which shall survive for the
                  period of the applicable statute of limitations.

         7.2      Cash Distributions to Shareholders. There shall have been no
                  cash distributions to the Shareholders since December 31, 1998
                  except for salaries and normal travel expense reimbursements.

         7.3      Restrictions on Transactions in PremiumWear Common Stock.
                  PremiumWear, KLI and each Shareholder agree not to effect any
                  purchases or sales of PremiumWear Common Stock during the 10
                  trading days immediately prior to Closing and agree to use
                  their best efforts to restrict such purchases and sales by
                  their respective directors and officers during such 10-day
                  period.

         7.4      Directorship. After Closing, PremiumWear shall nominate and
                  recommend that Mr. Klouda become a member of the Board of
                  Directors of PremiumWear at the 1999 Annual Meeting of
                  Shareholders; provided, however, if the Closing does not occur
                  prior to the mailing of PremiumWear's proxy materials to its
                  shareholders, the Board of Directors of PremiumWear shall
                  appoint Mr. Klouda to the Board following the 1999 Annual
                  Meeting of Shareholders and shall include him in management's
                  slate of nominees to the Board at the 2000 Annual Meeting of
                  Shareholders.



                                       15
<PAGE>

         7.5      Shareholder and Shareholder Spouse Car Leases.

                  (A)      The Shareholders represent and warrant that as of the
                           Closing, the following vehicle leases are the only
                           vehicle leases to which KLI is a party: (1) Motor
                           Vehicle Lease Agreement dated 9/6/1997 with respect
                           to a 1997 Infiniti QX4 Truck; (2) Closed End Motor
                           Vehicle Lease Agreement, as extended by the Matured
                           Lease Extension Agreement dated 10/23/1998 with
                           respect to a 1995 Toyota Sport Van; and (3) Closed
                           End Motor Vehicle Lease Agreement dated 7/13/1998
                           with respect to a 1999 Lexus RX300.

                  (B)      Mr. Klouda agrees that Mr. Klouda, individually,
                           shall be solely responsible for payments under and
                           for complying with the terms and conditions of the
                           vehicle leases set forth in section 7.5(A)(1) and
                           7.5(A)(3) above. Mr. Lenz agrees that Mr. Lenz,
                           individually, shall be solely responsible for
                           payments under and for complying with the terms and
                           conditions of the vehicle lease set forth in section
                           7.5(A)(2) above. In addition, the responsible party
                           for each lease shall be obligated to pay any and all
                           amounts that are now due or may hereafter become due
                           under the leases, adequate insurance for the
                           operation of such vehicles, annual registration fees
                           and any other fees and taxes that may be imposed by
                           the vehicle lease or by the State of Minnesota for
                           the operation of such vehicles. The obligations set
                           forth above shall apply regardless of who operates or
                           uses the vehicle. It is understood between the
                           parties that the only payment or other obligation of
                           PremiumWear or KLI with respect to the vehicles set
                           forth above shall be those which arise from under the
                           Employment Agreements between PremiumWear and each of
                           Messrs. Klouda and Lenz.

                  (C)      Messrs. Klouda and Lenz shall indemnify and hold
                           harmless PremiumWear and KLI (with respect to the
                           vehicle lease with respect to which such party is
                           responsible) against (i) any damages, claims,
                           liabilities, losses and expenses, of any kind or
                           nature whatsoever which may be sustained or suffered
                           by PremiumWear or KLI as a result of any breach of
                           any agreement, representation, warranty or covenant
                           made by Messrs. Klouda and Lenz in this Section 7.5
                           and (ii) any cost, tax, expense, liability or
                           obligation which may arise out of the lease
                           agreements set forth in Section 7.5(A) above or arise
                           out of the operation or use of the vehicle subject to
                           the lease, including as a result of accidents, other
                           moving violations or parking tickets.

                  (D)      Messrs. Klouda and Lenz further agree that they will
                           not renew or extend the vehicle leases listed in
                           Section 7.5(A) above in the name of KLI and shall not
                           enter into new vehicle leases of any kind in the name
                           of KLI.

         7.6      Publicity and Confidentiality. KLI and PremiumWear shall
                  consult each other prior to issuing any press release or
                  otherwise making any public statements with respect to the
                  transactions contemplated hereby, and neither shall issue any
                  such press release or make any such public statement without
                  the prior consent of the other, except as may be required by
                  applicable law.



                                       16
<PAGE>

                  The parties have signed a Confidentiality Agreement dated
                  January 18, 1999. Such Confidentiality Agreement shall
                  continue in effect notwithstanding a termination of this
                  Agreement.

         7.7      Fees and Expenses. Each party will bear all of its own
                  expenses in connection with the negotiation and the
                  consummation of the transactions contemplated by this
                  Agreement. Notwithstanding the foregoing, all such expenses
                  incurred by KLI and the Shareholders subsequent to December
                  31, 1998 shall be paid by the Shareholders. Furthermore, if
                  either PremiumWear on one hand, or KLI and the Shareholders,
                  on the other hand, terminate this Agreement and fail to
                  consummate the transactions contemplated hereby, and the other
                  party is not then in material breach or default under this
                  Agreement, the party terminating this Agreement and failing to
                  consummate the transaction shall reimburse the other party for
                  its out-of-pocket costs and expenses (including reasonable
                  attorneys' fees) incurred in the preparation, negotiation and
                  due diligence performed in connection with this Agreement and
                  the transactions contemplated hereby. This Section shall
                  survive the Termination of this Agreement.

         7.8      Governing Law. This Agreement, and all ancillary documents
                  related to this Agreement, is governed by the internal laws of
                  the state of Minnesota, without regard to the conflict of laws
                  provisions of any jurisdiction. KLI, THE SHAREHOLDERS,
                  PREMIUMWEAR AND ACQUISITION CORP. HEREBY IRREVOCABLY SUBMIT TO
                  THE JURISDICTION OF THE MINNESOTA STATE COURTS AND FEDERAL
                  COURTS SITTING IN OR ENCOMPASSING HENNEPIN COUNTY, MINNESOTA,
                  OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
                  THIS AGREEMENT OR ANY OF THE OTHER ANCILLARY DOCUMENTS RELATED
                  TO THIS AGREEMENT AND AGREE THAT ALL CLAIMS IN RESPECT OF SUCH
                  ACTION OR PROCEEDING MAY ONLY BE HEARD AND DETERMINED IN ANY
                  SUCH COURT.

         7.9      Notices. All notices required or permitted to be given under
                  this Agreement must be in writing and are deemed given when
                  delivered in person (or three business days after being
                  deposited in the United States mail, postage prepaid,
                  registered or certified mail, addressed as set forth below, or
                  on the next business day after being deposited with a
                  nationally-recognized overnight courier service, addressed as
                  set forth below, or upon dispatch if sent by facsimile with
                  telephonic confirmation of receipt from the intended recipient
                  to the facsimile number set forth below):

         To PremiumWear,                            PremiumWear, Inc.
           Acquisition Corp.,                       5500 Feltl Road
           or the Surviving                         Minnetonka, MN 55343
           Corporation:                             Attention: James S. Bury
                                                    Fax No.: (612) 979-1717


                                       17
<PAGE>



         With a copy to:                  Lindquist & Vennum P.L.L.P.
                                          4200 IDS Center
                                          80 South Eighth Street
                                          Minneapolis, MN 55402
                                          Attention: John R. Houston, Esq.
                                          Fax No.: (612) 371-3207

         To either Shareholder:           Timothy C. Klouda
                                          Dennis G. Lenz
                                          5500 Feltl Road
                                          Minnetonka, MN 55343
                                          Fax No.: (612) 979-1717

         With a copy to:                  Standke, Greene & Greenstein, Ltd.
                                          17717 Highway No. 7
                                          Minnetonka, MN 55345
                                          Attn: H. Kelsey Page, Esq.
                                          Fax No.: (612) 474-2575

         7.10     Entire Agreement. This Agreement, including the Schedules and
                  Exhibits, constitute the entire agreement between the parties
                  with respect to its subject matter of this Agreement.

         7.11     Assignability. This Agreement is enforceable by, and will
                  inure to the benefit of, the parties to this Agreement and
                  their successors and assigns, provided no party may assign its
                  rights or obligations under this Agreement without the prior
                  written consent of the other parties.

         7.12     Counterparts. This Agreement may be executed in any number of
                  counterparts, each of which, once delivered, shall be deemed
                  an original and all of which, once delivered, shall constitute
                  one agreement.

         7.13     Headings. The descriptive headings in this Agreement are
                  inserted for convenience only and do not constitute a part of
                  this Agreement.

         7.14     Non-exclusivity. The rights, remedies, powers and privileges
                  provided in this Agreement are cumulative and not exclusive
                  and shall be in addition to any and all rights, remedies,
                  powers and privileges granted by law, rule, regulation or
                  instrument.

         7.15     Amendments; Waivers. Any provision of this Agreement may be
                  amended or waived prior to the Effective Time, only if such
                  amendment or waiver is in writing and signed, in the case of
                  an amendment, by both parties, or in the case of a waiver, by
                  the parties against whom the waiver is to be effective.


                                       18
<PAGE>


         IN WITNESS WHEREOF, this Agreement is executed effective as of the date
first above written.

                                          KLI ACQUISITION CORP.



                                          By /s/ Thomas D. Gleason
                                             -----------------------------------
                                             Its  Chairman


                                          PREMIUMWEAR, INC.



                                          By /s/ Thomas D. Gleason
                                             -----------------------------------
                                             Its Chairman and CEO
                                                 -------------------------------


                                          KLOUDA-LENZ, INC.



                                          By /s/ Timothy C. Klouda
                                             -----------------------------------
                                             Its CEO
                                                 -------------------------------


                                          SHAREHOLDERS:


                                          /s/ Timothy C. Klouda
                                          --------------------------------------
                                          Timothy C. Klouda


                                          /s/ Dennis G. Lenz
                                          --------------------------------------
                                          Dennis G. Lenz

                                                         19