Document:

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                                                                    Exhibit 10.2

                             PARTICIPATION AGREEMENT

THIS AGREEMENT made and entered into this ____day of __________, 20__, by and
between KH Funding Company, whose principal office address is 10801 Lockwood
Drive, Suite 370, Silver Spring, Maryland 20901 (hereinafter referred to as the
"Lender"), and (insert name of bank), whose principal office address is (insert
address),(hereinafter referred to as "Participant").

                               W I T N E S S E T H

         WHEREAS, Lender has agreed to make a certain commercial term Loan to
the Borrower named below, which Loan is, or will be, evidenced by a certain
promissory note from the said Borrower and payable to the Lender in the maximum
principal amount of the said Loan; and,

         WHEREAS, the said promissory notes and all other documents evidencing
or securing the Loan shall be made in the name of the Lender, and delivered to,
the Lender and the Lender shall have the sole right to supervise and manage the
said Loan; and,

         WHEREAS, Lender desires to sell and the Participant desires to purchase
an undivided ownership interest in the Loan on the terms and conditions
hereinafter set forth.

         NOW. THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto, intending to be legally bound, mutually agree as
follows:

1.       Definitions.

         1.1   Advance(s): All disbursements made or to be made by Lender to
Borrower or on behalf of Borrower pursuant to the Loan Documents.

         1.2   Agreed Compensation: The rate of return per annum based on the
Participant's Percentage Interest, payable from the date an Advance is made or
the receipt of Participant's share of such Advance, whichever later occurs.

         1.3   Agreement:  This Participation Agreement.

         1.4   Borrower:

         1.5   Certificate: The Participation Certificate, in the form attached
hereto as "Exhibit A" and incorporated herein, which shall be issued by Lender
to evidence the Participation purchased by the Participant, as forth in Section
2.3 below.

         1.6   Collateral: The Collateral described in the Loan Documents which
secures the repayment of the Loan and the obligations of the Borrower, including
without limitation any real or

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personal property, as the case may be.

         1.7   Collections: All monies received by Lender from Borrower, or
other sources, representing principal or interest (excluding fees) on account of
the Loan, as proceeds of the Collateral, or as payment of Expenses.

         1.8   Emergency Situation: A circumstance or state of affairs or
occurrence that impairs the Collateral, the value of the Collateral or the
ability to receive Collections.

         1.9   Expenses: Shall include, but are not limited to, attorney's fees
and disbursements, court costs, the fees of any outside agency, and other costs
incurred by Lender (excluding such fees and costs which directly arise from the
Lender's breach of the Loan Documents or Lender's gross negligence) in
connection with the enforcement of any rights and remedies against the Borrower,
for the protection or preservation of any Collateral, and for administration of
the Loan other than the Lender's Service of the Loan.

         1.10  Loan: The loan made by the Lender to the Borrower in the maximum
principal amount of ________________________________.

         1.11  Loan Closing: The date the Loan Documents are executed and
delivered to the Lender by the Borrower.

         1.12  Loan Commitment Letter:

         1.13  Loan Documents: The Loan Commitment Letter, the Note and all
other documents securing or evidencing the Loan.

         1.14  Majority of Participants: The Lender and other entities owning
Certificates whose aggregate face value is more than fifty percent (50%) of the
Advances outstanding from time to time.

         1.15  Note: The term "Note" shall collectively mean (i) a certain
promissory note in the principal amount of (_____________) made by the Borrower
and payable to the order of the Lender.

         1.16  Notice: Notice to Lender or Participant as set forth in Section
12.1 below.

         1.17  Participation: Participant's undivided fractional interest in the
Loan, the Advances, the Collateral and the Collections.

         1.18  Payment Date: The date the Agreed Compensation is paid to
Participant by Lender

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which date shall be no more than three (3) business days after Lender has
received the Collection of such amount.

         1.19  Percentage Interest: The Participation of Participant expressed
as a percentage of the entire Loan as determined from time to time.

         1.20  Personalty: The personal property, if any, which is security for
the Loan.

         1.21  Property: The real property, if any, which is security for the
Loan.

         1.22  Service: The servicing and administration of the Loan by Lender.

2.       General Conditions.

         2.1   Purpose of Loan: The Advances will be made by Lender in
accordance with the terms and conditions of the Loan Documents for the purposes
set forth in the Loan Commitment Letter.

         2.2   Condition of Disbursements: Prior to any Advances being made, the
conditions in the Loan Documents shall have been satisfied, as reasonably
determined by Lender.

         2.3   A) Purchase of Participation: Subject to the terms and provision
of this Agreement, the Lender hereby sells and Participant hereby purchases a
Participation in the Loan equal to the Percentage Interest of __% of the Loan
balance, equal to the aggregate amount of up to (__________) of the total
principal amount of the Loan. On the date any Advance is to be made by the
Lender to the Borrower, the Participant shall transfer to Lender within two (2)
business days, by wire transfer or by another method mutually agreed upon by the
Lender and the Participant, that portion of the amount of the applicable Advance
equal to the Participant's Percentage Interest. The Lender shall thereafter
promptly deliver to Participant a Certificate evidencing the Participation in
such Advance.

               B) Subject to the Lender's receipt of Collections, the Lender
agrees to provide Participant a rate of interest equal to ____%.

         2.4   Priority of Participants: The interest of Lender and Participants
in the Loan shall be equal in lien and no party shall have any priority over the
other party; In the event of acceleration upon default or otherwise, the
Participant shall receive 100% of the Principal collected until the Participant
has received an amount equal to the Participant's investment.

         2.5   Recourse; Liability of Lender: Participant shall have no recourse
against Lender for any loss except for the remedies set forth herein if the
Lender breaches this Agreement. Neither the Lender nor any of its officers,
directors, employees, agents or attorneys shall be liable for any action taken
or omitted to be taken by it or by any of them under any of the Loan Documents
or in

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connection therewith or under this Agreement, except for its or their own
gross negligence or willful misconduct.

3.       Lender's Obligations.

         3.1   Possession of Loan Documents: Lender covenants, warrants and
represents that it has and will continue to have in its possession the Loan
Documents. The Lender acknowledges and grants the Participant the right to
inspect the original documents upon reasonable notice.

         3.2   Delivery of Copies of Loan Documents to Participant: Lender
covenants to Participant that it will deliver to each Participant a file binder
consisting of true and correct copies of all of the Loan Documents within thirty
(30) days from the date of the Loan Documents.

         3.3   Payment to Participant; Collections:  Lender shall:

               3.3.1: receive all Collections on the Loan;

               3.3.2: remit to Participant the Agreed Compensation on the
         Payment Date and Participant's Percentage of all Collections; and,

               3.3.3: use best efforts to recover from Borrower all Expenses
         that are reimbursable from Borrower and shall remit to Participant its
         respective share thereof on the next occurring Payment Date after such
         recovery from the Borrower.

               3.3.4: Notwithstanding anything contained herein to the contrary,
         it is understood and agreed that when the principal amount of the Loan
         evidenced by the Promissory Note is paid by the Borrower in accordance
         with its terms, the amount received by the Lender shall be applied on a
         pro rata basis to the Participation.

         3.4   Administration: Lender shall:

               3.4.1: furnish to Participant copies of all Loan Documents
         executed or approved subsequent to the date of the original Loan
         Documents;

               3.4.2: keep and maintain at the offices of the Lender, complete
         and accurate books, files and records of all matters pertaining to the
         Loan, which books, files and records shall be available for inspection
         by Participant during normal business hours.

         3.5   Service: Lender shall Service the Loan continuously from the date
of Loan Closing without compensation or charge (other than its share of the
Collections and any fees charged to Borrower pursuant to the Loan Commitment
Letter) and at Lender's sole cost and expense, except as otherwise specifically
stated in the Certificate. In performing its functions and

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duties hereunder, the Lender shall exercise the same care which it would
exercise in dealing with loans for its own account. Lender promises that the
Lender shall service the Loan as an independent contractor and shall use its own
facilities and regular employees and shall process by such means and in such
manner as it deems best to carry out the terms of this Agreement in accordance
with the standard above defined.

         3.6   Trust Relationship: Lender shall hold the Loan Documents and
Collateral in trust for Participant and any Collections due Participant in trust
for Participant.

4.       Negative Covenants of Lender.

         Lender agrees that Lender will not, without the prior written consent
of a majority of the Participants:

         4.1:  make or consent to any material alteration of the terms of any of
the Loan Documents which would (i) change the time for, or amount of, any
payment of Collections, Expenses or other amounts in which the Participant has
acquired an interest hereunder; (ii) increase the maximum principal amount of
the Loan; or (iii) extend the maturity of the Note;

         4.2:  make or consent to any release or substitution of the terms of
any of the Loan Documents or the Collateral;

         4.3:  waive any material claim against the Borrower or any guarantor of
the Loan in connection with their obligations under the Loan.

5.       Representations and Warranties of the Lender. Lender represents and
warrants that:

         5.1   Lender is the legal owner of the entire indebtedness evidenced by
the Note, and the entire beneficial interest in the Loan Documents and has not
heretofore sold or transferred or otherwise disposed of any portion of its
interest in the Loan Documents or the Loan and has no obligation to sell or
transfer any portion of the Loan Documents or the Loan to anyone; except for the
transfer contemplated by this Agreement and any other transfers of participation
interests in the Loan which have been disclosed to the Participant in writing.

         5.2   Lender has the full right, power and authority to assign,
transfer and convey the Participation to Participant without notice to or
consent of anyone and has taken all corporate action necessary to authorize it
to enter into and execute this Agreement.

         5.3   Lender has not knowingly done or omitted to do or permitted
anything to be done or omitted to be done which materially or adversely affects
the validity or priority of the Collateral or the validity of the Loan
Documents, and Lender knows of no change from any cause whatsoever materially
affecting the Loan.

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         5.4   The Lender certifies that it is in good standing with the State
of Maryland, is authorized and licensed to act as a mortgage lender and
maintains a Financial Institution Bond.

6.       Obligations of Participant.

         6.1   Payment for Future Advances: If any future Advances are made to
Borrower, each payment by Participant for its undivided interest based on
Advances hereafter made to the Borrower in accordance with the Loan Documents,
shall be made as specified by Lender for the Advances provided that Lender has
given notice not less than three (3) business days prior to the time the
Advances are to be made. Participant's payments shall be made by wire transfer
(or by another method mutually agreed upon by the Lender and the Participant) to
the account specified by Lender.

         6.2   Participant shall pay its Percentage Interest of Expenses within
three (3) days after notice of such Expenses from Lender.

         6.3   Participant's Duty to Respond: Participant recognizes the need to
respond to requests of Lender in matters related to the Loans and Participant
agrees that if it does not respond to Lender's request for a decision on a
matter relating to the Loan, requiring Participant's consent within three (3)
business days after Notice to Participant by Lender, then Participant shall be
deemed to have consented to the proposed action by Lender.

         6.4   Risks of the Loan: Participant acknowledges that it has become a
party hereto in reliance upon its own independent analysis of the Loan Documents
and Borrower's financial condition and credit worthiness based on such documents
and information as Participant deemed appropriate or necessary and not in
reliance on any analysis or advice provided by Lender. Participant further
acknowledges that Participant will, independently and without reliance on
Lender's advice and analysis and based on such documents and information as
Participant deems appropriate at the time, continue to make its own credit
decisions in connection with this Agreement.

7.       Representations and Warranties of Participant:

         7.1   Directors' Authorization: Participant has the full right, power
and authority to purchase, acquire and pay the purchase price for the
Participation from Lender without notice to or consent of anyone and has taken
all corporate action necessary to authorize it to enter into and execute this
Agreement.

         7.2   Loan Documents: Participant has reviewed and approved the Loan
Documents and Participant has analyzed and underwritten the Loan. Participant
represents and warrants that it has been furnished with a copy of the Loan
Documents and that Lender has made no representation or warranty, express or
implied, and shall have no responsibility, with respect to (i) the genuineness,
legality, validity, binding effect, enforceability, sufficiency, accuracy or
completeness of the Loan

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Documents; (ii) filing, recording or taking of any action with respect to the
Loan Documents; (iii) the collectibility of the Note or any of the other Loan
Documents and the value of the Collateral; (iv) the financial or other condition
of the Borrower; (v) any other matter having any relation to this Agreement or
the Loan Documents, or the Borrower, or any other person or entity not
specifically referred to herein.

8.       Mutual Agreements of Participant and Lender.

         8.1   Losses and Expenses: Lender and Participant shall share in
accordance with their respective Percentage Interests any losses sustained in
connection with the Loan and all Expenses incurred hereafter by Lender. All such
cost and expenses to be paid within three (3) business days of notification of
the amount due. Lender shall use best efforts to recover from Borrower all
Expenses that are reimbursable from Borrower under the Loan Documents and shall
remit Participant`s share of such Expenses promptly after receipt. However, in
the event of acceleration by default or otherwise, the Participant shall receive
100% of the payments received by the Lender until the Participant's investment
and costs have been paid in full.

         8.2   Advances of Funds by Lender: If Lender shall be obligated to make
any Advance to Borrower or the Borrower's designee in accordance with the terms
of the Loan Documents; or if Lender, because of Borrower default incurs any
Expenses required to be paid by Borrower, Lender shall advise Participant of the
Expense or Advance by written, telegraphic or telephonic or facsimile notice,
and Participant shall pay to Lender in accordance with Sections 6.1 and 6.2
above, as the case may be, its Percentage Interest of such Advance or Expense.
Lender shall immediately execute and deliver to Participant an amended
Certificate evidencing the Advance or Expense. Notwithstanding the foregoing, in
the event the Lender deems it necessary to incur Expenses in excess of the
aggregate amount of $25,000.00, then the prior written consent of a Majority of
Participants shall be required for the payment of any Expenses in excess of the
aggregate amount of $25,000.00; provided, however, such consent of a Majority of
Participants shall not be required in an Emergency Situation.

         8.3   No Partnership or Joint Venture Relationship: Neither the
execution of this Agreement, nor the sharing in the Loan, the Collateral or the
Loan Documents, nor any agreement to share in profits or losses resulting from
the transaction, is intended to be, nor shall it be construed to be, the
formation of a partnership or joint venture between Lender and Participant.

         8.4   Other Loans to Borrower: Neither Lender or Participant has, as of
the date of this Agreement, any loans to, or other direct or indirect financial
accommodations to, or financial interest to, the Borrower or any principal or
affiliate of Borrower which has not been disclosed in writing to the other party
hereto. Any such loans made or interest acquired hereafter by Lender or
Participant shall be reported promptly in writing to the other party.

         8.5   Subparticipations: The Participant reserves the right to sell to
other financial institutions subparticipation interests in the Loan from its
Percentage Interest; however, the

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Participant shall continue to be primarily liable to the Lender for its
obligations under this Agreement and any modifications hereto. No Certificates
shall be issued by the Lender to evidence any such subparticipations and such
subparticipants shall not be entitled to the Participant's rights hereunder. The
Lender shall be liable solely to the Participant for its obligations hereunder
and the Participant's rights shall not run to the benefit of or be enforceable
by any subparticipant of the Participant.

         8.6   Evidence of Termination: The Lender and Participant agree that
upon Participant's being paid, in full, its share of Collections and Expenses,
it will immediately execute and furnish to Lender, upon request, an instrument
certifying to such fact and to the fact that it no longer holds any interest
with respect to the Loan.

         8.7   Participation Not a Security: The interest in the Loans sold by
Lender to Participant shall not be deemed to be a security within the meaning of
the Securities Act of 1933 and the Securities Exchange Act of 1934.

         8.8   Parties' Intent: It is the intent and purpose of the parties
hereto that this Agreement represent a sale by Lender to Participant of (a) an
undivided interest in a debt, together with the security therefore, and (b) an
undivided interest in the Loan, Loan Documents and Collateral and the rights,
benefits and obligations arising there from. This Agreement shall not be deemed
to represent a pledge of any interest in the Loan by Lender to Participant, nor
a loan from Participant to Lender. Upon execution of this Agreement, Lender and
Participant shall be deemed to be joint owners of the Note and the Loan
Documents in accordance with their Percentage Interests.

9.       Default by Borrower:

         9.1   Responsibilities of Lender: Lender shall retain all rights with
respect to enforcement, collection and administration of the Loan and the
Collateral, including the right to accelerate the Note. However, Lender shall,
within ten (10) days of Lender having actual knowledge of the occurrence
thereof, inform Participant of any default under the Loan Documents and of all
material facts relating to such default or relating to any other aspect of the
Loan which could or might have a material adverse effect on the value of the
Collateral or the Loan Documents. Lender shall use its best efforts to keep the
Participant informed and up to date with respect to any default and such facts
and any actions taken by Lender in connection therewith.

         9.2   Action on Default: Notwithstanding the foregoing, following the
occurrence of a default by Borrower under the Loan Documents, which gives the
Lender the right to accelerate either immediately or after a limited period of
time, and within five (5) days (or sooner if the nature of the default so
requires) after notification to Participant by Lender of such default, Lender
and Participant shall (i) consult to determine a mutually acceptable course of
action to take with respect to such default and (ii) pursue such course of
action without delay and with due diligence. If Lender and Participant cannot
agree upon a mutually acceptable course of action, then the decision of the
Majority of Participants shall determine what actions shall be taken or Lender
shall

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have the right (but not the obligation) to purchase the Percentage Interest of
each Participant who has voted against the course of action, recommended by
Lender in accordance with this Section 9.2, at the price equal to the Purchase
Price (as defined in Section 11.1 below). If Lender acquires the Collateral
through a foreclosure or UCC sale, Participant shall have an undivided interest
in the Collateral equal to its Percentage Interest in the Loan and title shall
be taken in such manner as a Majority of Participants shall determine. In the
event of liquidation of the Collateral, then after payment of all reasonable
costs and expenses of collection, the Lender shall promptly remit to the
Participant its share, based on the Participant's Percentage Interest, of all
net proceeds received by the Lender as a consequence of such liquidation
proceeding or action.

         In the event of a payment default that remains uncured for ninety (90)
days, the Participant may request that the Lender repurchase the Participant's
interest in the Loan. Upon such written request, the Lender shall be obligated
to pay off the Participant in full within ten (10) days.

10.      Breach by Lender. Upon failure of the Lender to perform any material
obligation imposed upon it under the Loan Documents or this Agreement, not cured
within thirty (30) days after written notice of such breach is given by the
Participant to the Lender, or upon failure of Lender to pay Participant its
share of any Collections, or if any dissolution, termination of existence,
insolvency, business failure, appointment of receiver of any part of the
property, assignment for the benefit of creditors, or the commencement of any
proceeding under any bankruptcy or insolvency law, State or Federal, by or
against the Lender, then the Majority of the Participants shall have the right
to notify the Borrower of their interests therein and demand and receive payment
when due from the Borrower to the extent of their Percentage Interests and
Lender upon demand of a Majority of the Participants, shall assign to the
designee of the Majority of Participants the Loan Documents then held by Lender,
reserving unto Lender, however, its own Participation therein.

         Upon such assignment, the designee of a Majority of the Participants
shall thereupon become and be deemed to be the Lender hereunder; and Lender
shall become and be deemed to be a Participant hereunder, each with all the same
rights, powers, duties, privileges and obligations in such new capacity hereunto
pertaining.

11.      Breach by Participant.

         11.1  Material Breach; Failure to Fund: In the event of any material
breach of this Agreement by Participant, not cured within ten (10) days after
notice of such breach is given by the Lender to the Participant, or after any
failure of Participant to fund its Percentage of the Loan within the time
funding is due under this Agreement, the Lender shall, in addition to all other
remedies available to it at law or in equity, have the right (but not the
obligation) to purchase Participant's Percentage Interest at a purchase price
(the "Purchase Price") equal to the principal amount plus accrued interest at
the rate of the Certificate. The Percentage Interest must be conveyed free and

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clear of all liens, encumbrances and subparticipations at the time of the
repurchase by an instrument in a form and with warranties reasonably
satisfactory to Lender. In the alternative, Lender shall have the right (but not
the obligation to Participant) to fund Participant's share of any Advance, and
Participant shall pay Lender interest on the amount funded at the default rate
under the Note until Participant shall fund its share of such Advance.

         11.2  Insolvency of Participant: If any proceeding is commenced which
involves the dissolution, termination of existence, insolvency, business
failure, appointment of receiver of any part of the property, or assignment for
the benefit of creditors of, by or against Participant, or upon the commencement
of any proceeding under any bankruptcy or insolvency law, State or Federal, by
or against Participant, Lender shall have the right (but not the obligation) to
purchase Participant's interest in the Loan at par value plus accrued interest
at the rate of return provided in Section 2.3(B) above.

12.      Miscellaneous.

         12.1  Notices: Any notice which may be required herein shall be in
writing and shall be considered to have been given as of the date and time when
the same is deposited in a United States Post Office with postage prepaid and
mailed by registered or certified United States Mail, return receipt requested
to Lender at the following address:

                           KH Funding Company
                           10801 Lockwood Drive, Suite 370
                           Silver Spring, Maryland  20901

                           Attention:  Robert Harris
                           Phone: (301) 592-8100

and to Participant at the following address:

                           Attention:  Loan Administration
                           Phone:

         12.2  Successor and Assigns: This Agreement shall be binding upon and
inure to the benefit of the parties hereunder and their respective legal
representatives, successors and assigns, including, but not limited to, any
transferees.

         12.3  Law Governing: This Agreement shall be governed, construed and
               -------------
interpreted in all respects in accordance with the laws of the Commonwealth of
Virginia.

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         12.4  Amendments: This Agreement may not be modified, amended,
terminated or otherwise changed orally or by any course of dealing or in any
manner except by an agreement in writing signed by the duly authorized officer
of the party to be charged.

         12.5  Entire Agreement: This Agreement and any agreements incorporated
herein by reference constitute the entire contract between the parties hereto
and there are no other understandings, oral or written, related to the subject
matter hereof other than those specifically incorporated by reference herein.

         12.6  Severability: If any term or provision of this Agreement or the
application thereof shall to any extent be invalid or unenforceable, the
remainder of this Agreement, or the application of such term or provision to
persons, properties and circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby. Each term and provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their respective seals to be
affixed as of the day and year first above written.

ATTEST:                             KH Funding Company

_________________________           By:___________________________
                                    Name:
                                    Title:

ATTEST:

_________________________           By:___________________________

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                                   Exhibit "A"

                            PARTICIPATION CERTIFICATE

The Participant hereby acknowledges a __% participation interest in the Loan of
the Borrower(s) listed below and the Lender acknowledges acceptance of this
participation, more fully described in a Participation Agreement dated
______________, 20__.

Borrower:

Note Amount:  $

Current Loan Balance:  $

Percent of Participation:    %

Participation Amount:  $

Note Rate:      %
---------

Participant Rate:  %

Fee Paid To Participant:  none.

TOTAL ADVANCED TO DATE:
----------------------

Date                                                 Amount

                                                     $-------------

SEEN AND AGREED:

ATTEST:

_________________________           By:___________________________

ATTEST:                             KH Funding Company

_________________________           By:___________________________
                                         Name:
                                         Title:Amendment No. 1 to Loan and Security Agreement Dated June 19, 2003.

 EXHIBIT 10.57 
  
 AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT 
  
 AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT, dated June 19, 2003, entered into by and among Congress Financial
Corporation (Florida), a Florida corporation, in its capacity as agent acting for and on behalf of the parties to the Loan Agreement (as hereinafter defined) as lenders (in such capacity, “Agent”), the parties to the Loan Agreement as
lenders (individually a “Lender” and collectively, “Lenders”), Supreme International, Inc., a Delaware corporation (“Supreme”) and Jantzen, Inc., a Delaware corporation (“Jantzen”, and together with Supreme,
each individually an “Existing Borrower” and collectively, “Existing Borrowers”), Salant Corporation, a Delaware corporation (“Salant”), Salant Holding Corporation, a Delaware corporation (“Salant Holding”,
and together with Salant, each individually a “New Borrower” and collectively, “New Borrowers”), Perry Ellis International, Inc., a Florida corporation (“Parent”), PEI Licensing, Inc., a Delaware corporation (“PEI
Licensing”), Jantzen Apparel Corp., a Delaware corporation (“Jantzen Apparel”), BBI Retail, L.L.C., a Florida limited liability company (“BBI”), Supreme I Real Estate, LLC, a Florida limited liability company (“Supreme
I”), Supreme II Real Estate, LLC, Florida limited liability company (“Supreme II”), Supreme Realty, LLC, a Florida limited liability company (“Supreme Realty”), Supreme Munsingwear Canada Inc., a Canada corporation
(“Supreme Canada”), and Perry Ellis Real Estate Corporation, a Delaware corporation (“PE Real Estate”, and together with Parent, PEI Licensing, Jantzen Apparel, BBI, Supreme I, Supreme II, Supreme Realty and Supreme Canada, each
individually a “Guarantor” and collectively, “Guarantors”). 
  
 W  I  T  N  E  S  S  E  T  H : 
  
 WHEREAS, Agent, Lenders, Existing Borrowers and Guarantors have entered into financing arrangements pursuant to which
Lenders (or Agent on behalf of Lenders) have made and may make loans and advances and provide other financial accommodations to Existing Borrowers as set forth in the Loan and Security Agreement, dated October 1, 2002, by and among Agent, Lenders,
Existing Borrowers and Guarantors (as amended hereby and as the same may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the “Loan Agreement”, and together with all agreements, documents and
instruments at any time executed and/or delivered in connection therewith or related thereto, as from time to time amended, modified, supplemented, extended, renewed, restated, or replaced, collectively, the “Financing Agreements”);

  
 WHEREAS, Parent has created a newly formed wholly owned
subsidiary, Connor Acquisition Corp. (“Connor” as hereinafter further defined), which is to merge with and into Salant with Salant as the surviving corporation, with the shares of capital stock of Connor converted into the shares of the
surviving corporation (so that the surviving corporation shall be a wholly owned subsidiary of Parent) and the shares of Salant as the surviving corporation converted into the right to receive certain merger consideration consisting of cash and
shares of capital stock of Parent, all as set forth in, and pursuant to, the Merger Agreements (as hereinafter defined); 

 WHEREAS, Existing Borrowers, New Borrowers and Guarantors have requested that Agent and Lenders amend the
Loan Agreement to provide for Agent and Lenders to make loans and advances and provide other financial accommodations to each New Borrower under the terms and conditions of the Loan Agreement and that each New Borrower becomes an additional Borrower
under the Loan Agreement, as amended hereby, and in connection therewith have requested that the Loan Agreement be amended in order to (1) consent to the formation by Parent of Connor, (2) consent to the merger of Connor with and into Salant, (3)
add each New Borrower as an additional Borrower, subject to the provisions set forth herein and in the Loan Agreement, (4) add the grant by New Borrower and New Guarantor to Agent, for itself and the benefit of Lenders, of a security interest in and
lien upon the assets and properties of such New Borrower to secure the payment and performance of all obligations of each of them to Agent and Lenders, and (5) make certain other amendments to the Loan Agreement; and 
  
 WHEREAS, by this Amendment No. 1, Agent, Lenders, Existing Borrowers, New
Borrowers and Guarantors desire and intend to evidence such consent and amendments. 
  
 NOW, THEREFORE, In consideration of the foregoing, the mutual agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows: 
  
 1. Definitions.

  
 1.1 Additional Definitions. As used herein, the
following terms shall have the meanings given to them below, and the Loan Agreement and the other Financing Agreements are hereby amended to include, in addition and not in limitation, the following definitions: 
  
 (a) “Amendment No. 1” shall mean Amendment No. 1 to Loan and
Security Agreement as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. 
  
 (b) “Commercial Letter of Credit” shall mean any Letter of Credit Accommodation consisting of a letter of credit issued for the purpose of
providing the primary manner of payment for the purchase price of goods or services by a Borrower in the ordinary course of the business of such Borrower. 
  
 (c) “Connor” shall mean Connor Acquisition Corp., a Delaware corporation, and its successors and assigns. 
  
 (d) “Existing Salant Lenders” shall mean the lenders to a New
Borrower listed on Exhibit A hereto (and including The CIT Group/Commercial Services, Inc. in its capacity as agent acting for such lenders) and their respective predecessors, successors and assigns; sometimes referred to herein individually as an
“Existing Salant Lender”. 
  
 (e) “Existing Salant
Letters of Credit” shall mean, collectively, the letters of credit issued for the account of a New Borrower or for which such New Borrower is otherwise liable, as listed on Exhibit B hereto, as the same now exist or may hereafter be amended,
modified, 

  

 2 

 
supplemented, extended, renewed, restated or replaced; sometimes referred to herein individually as an “Existing Salant Letter of Credit”.

  
 (f) “LC Indemnification Agreement” shall mean the
Letter of Credit Indemnification Agreement, dated of even date herewith, between Agent and The CIT Group/ Commercial Services, Inc. in its capacity as agent for the Existing Salant Lenders with respect to certain of the Existing Salant Letters of
Credit, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. 
  
 (g) “Merger” shall mean the merger of Connor with and into Salant, with Salant as the surviving corporation, pursuant to and in accordance with
the terms of the Merger Agreements. 
  
 (h) “Merger
Agreements” shall mean, collectively, the following (as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated, or replaced): (i) the Agreement and Plan of Merger dated February 3, 2003, by and among
Connor, Salant and Parent and (ii) all other agreements, documents or instruments executed or delivered in connection therewith. 
  
 (i) “Salant” shall mean Salant Corporation, a Delaware corporation, and its successors and assigns. 
  
 (j) “Salant Holding” shall mean Salant Holding Corporation, a
Delaware corporation, and its successors and assigns. 
  
 (k)
“Salant Supplemental Financing Agreements” shall mean, collectively, the following (as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated, or replaced): (i) the Guarantee by Existing
Borrowers, Salant Holding and Guarantors in favor of Agent, for itself and the benefit of Lenders, with respect to the Obligations of Salant, (ii) the Guarantee by Existing Borrowers, Salant and Guarantors in favor of Agent, for itself and the
benefit of Lenders, with respect to the Obligations of Salant Holding, (iii) the Pledge and Security Agreement by Parent in favor of Agent with respect to all of the issued and outstanding shares of Salant, (iv) the Pledge and Security Agreement by
Salant in favor of Agent with respect to all of the issued and outstanding shares of Salant Holding, (v) the Trademark Collateral Assignment and Security Agreement by Salant in favor of Agent, (vi) the Trademark Collateral Assignment and Security
Agreement by Salant Holding in favor of Agent, (vii) the Deposit Account Control Agreements by and among Agent, each New Borrower and the depository bank at which the deposit accounts of such New Borrower are maintained, and (viii) all other
agreements, documents and instruments executed and/or delivered in connection with this Amendment No.1 and any of the foregoing. 
  
 (l) “Special Reserve” shall mean a Reserve in the amount of $1,000,000 established by Agent as of the date hereof. 
  
 1.2 Amendments to Definitions. 
  

 3 

 (a) All references to the term “Applicable Margin” in the Loan Agreement and each such
reference is hereby amended to mean, at any time, as to the Interest Rate for Prime Rate Loans and the Interest Rate for Eurodollar Rate Loans the applicable percentage (on a per annum basis) set forth below if either (i) the sum of: (A) the
Quarterly Average Excess Availability for the immediately preceding fiscal quarter plus (B) the Excess Cash as of the last day of the immediately preceding fiscal quarter is at or within the amounts indicated for such percentage or (ii) the Leverage
Ratio as of the last day of the immediately preceding fiscal quarter (which ratio for this purpose shall be calculated based on the four (4) immediately preceding fiscal quarters) is at or within the levels indicated for such percentage: 

 

	Tier

	  	 Quarterly Average
 Excess Availability
 plus Excess Cash

	  	 Leverage Ratio

	  	 Applicable
 Prime
 Rate Margin

	 	 	 Applicable
 Eurodollar
 Rate Margin

	 
	 1
	  	$45,000,000 or more	  	2.00 to 1.00 or less	  	0	%	 	2 	%
	 2
	  	Greater than or equal to $35,000,000 and less than $45,000,000	  	Greater than 2.00 to 1.00 but equal to or less than 3.00 to 1.00	  	0	%	 	2 1/4	%
	 3
	  	Greater than or equal to $25,000,000 and less than $35,000,000	  	Greater than 3.00 to 1.00 but equal to or less than 4.00 to 1.00	  	 1/4	%	 	2 1/2	%
	 4
	  	Less than $25,000,000	  	Greater than 4.00 to 1.00	  	 1/2	%	 	2 3/4 	%

  
 provided, that, (A) the
Applicable Margin shall be calculated and established once each fiscal quarter (commencing with the fiscal quarter ending on October 31, 2003) and shall remain in effect until adjusted thereafter at the end of the next quarter and (B) the Applicable
Margin shall be the lower percentage set forth above based on (1) the sum of the Quarterly Average Excess Availability and the Excess Cash as provided above or (2) the Leverage Ratio. 
  
 (b) All references to the term “Borrower” or “Borrowers” in the Loan Agreement or any of the other
Financing Agreements and each such reference is hereby amended to include, in addition and not in limitation, each New Borrower. 
  
 (c) All references to the term “Collateral” in the Loan Agreement and each such reference is hereby amended to include, in addition and not in
limitation, the assets and properties of New Borrowers at any time subject to the security interest or lien of Agent for itself and the benefit of Lenders, including the assets and properties described in Section 9 of this Amendment No. 1.

  
 (d) The reference to the amount of “$5,000,000” in
the definition of the term “Eligible Factor Receivables” in the Loan Agreement is hereby deleted and the amount of “$20,000,000” substituted therefor. 
  

 4 

 (e) All references to the term “Factoring Agreements” in the Loan Agreement and any of the
other Financing Agreements and each such reference is hereby amended to include, in addition and not in limitation, the following in each case as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced: (i) the Non-Notification Factoring Agreement, dated on or about the date hereof, between The CIT Group/Commercial Services, Inc. and Salant, and all agreements, documents and instruments at any time executed and/or delivered by any
Borrower or Guarantor in connection therewith; and (ii) the Non-Notification Factoring Agreement, dated on or about the date hereof, between The CIT Group/Commercial Services, Inc. and Salant Holding, and all agreements, documents and instruments at
any time executed and/or delivered by any Borrower or Guarantor in connection therewith. 
  
 (f) All references to the term “Fee Letter” in the Loan Agreement and any of the other Financing Agreements and each such reference is hereby amended to include, in addition and not in limitation, the letter
agreement, dated January 17, 2003, by and among Existing Borrowers, Guarantors and Agent, setting forth certain fees payable by Borrowers to Agent for the benefit of itself and Lenders, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced. 
  
 (g) All
references to the term “Financing Agreements” in the Loan Agreement and any of the other Financing Agreements and each such reference is hereby amended to include, in addition and not in limitation, collectively, this Amendment No. 1 and
the Salant Supplemental Financing Agreements. 
  
 (h) All
references to the term “Information Certificate” in the Loan Agreement or any of the other Financing Agreements and each such reference is hereby amended to mean the Amended and Restated Information Certificate with respect to Borrowers
(including New Borrowers) and Guarantors included with this Amendment No. 1 as Exhibit C hereto. 
  
 (i) All references to the term “Interest Rate” in the Loan Agreement or any of the other Financing Agreements and each such reference is hereby
amended to mean: 
  
 (i) Prior to June 19, 2003, subject to
clauses (ii) and (iii) below: 
  
 (A) as to Prime Rate Loans, a
rate equal to one-quarter ( 1/4%) percent in excess of the Prime Rate; 
  
 (B) as to Eurodollar Rate Loans, a rate equal to two and one-half (2 1/2%) percent per annum in excess of the Adjusted Eurodollar Rate (in each case, based on the Eurodollar Rate
applicable for the relevant Interest Period, whether such rate is higher or lower than any rate previously quoted to a Borrower). 
  
 (ii) Subject to clause (iii) below, effective as of the first (1st) day of the second month of each fiscal quarter (commencing with the fiscal quarter
ending on October 31, 2003), the Interest Rate payable by each Borrower shall be increased or decreased, as the case may be, (A) as to Prime Rate Loans, to the rate equal to the Applicable Margin for Prime Rate Loans on a 

  

 5 

 
per annum basis in excess of the Prime Rate, and (B) as to Eurodollar Rate Loans, to the rate equal to the Applicable Margin for Eurodollar Rate Loans on a
per annum basis in excess of the Adjusted Eurodollar Rate. 
  
 (iii) Notwithstanding anything to the contrary contained in clauses (i) or (ii) above, the Applicable Margin otherwise used to calculate the Interest Rate for Prime Rate Loans and Eurodollar Rate Loans shall be the highest percentage set
forth in the definition of the term Applicable Margin for each category of Loans (without regard to the amount of Quarterly Average Excess Availability or the Leverage Ratio) plus two (2%) percent per annum, at Agent’ s option, (A) for the
period (1) from and after the effective date of termination or non-renewal of the Loan Agreement until Agent and Lenders have received full and final payment of all outstanding and unpaid Obligations which are not contingent and cash collateral or
letter of credit, as Agent may specify, in the amounts and on the terms required under Section 13.1 of the Loan Agreement for contingent Obligations (notwithstanding entry of a judgment against any Borrower or Guarantor) and (2) from and after the
date of the occurrence of an Event of Default and for so long as such Event of Default is continuing and (B) on Loans to a Borrower at any time outstanding in excess of the Borrowing Base of such Borrower (whether or not such excess(es) arise or are
made with or without the knowledge or consent of Agent or any Lender and whether made before or after an Event of Default). 
  
 (j) All references to the term “Inventory Loan Limit” in the Loan Agreement or any of the other Financing Agreements and each such reference is
hereby amended to mean $60,000,000. 
  
 (k) All references to the
term “Letter of Credit Facility Agreements” in the Loan Agreement and any of the other Financing Agreements and each such reference is hereby amended to include, in addition and not in limitation, the following in each case as the same now
exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced: (i) the Letter of Credit and Security Agreement, dated on or about the date hereof, by New Borrowers and Israel Discount Bank of New York and the
General Security Agreement, dated on or about the date hereof, between New Borrowers and Israel Discount Bank of New York; (ii) the Commitment Letter, dated on or about the date hereof, by and among New Borrowers and CommerceBank, N.A. and the
Commercial Security Agreement, dated on or about the date hereof, by New Borrowers in favor of CommerceBank, N.A.; and (iii) the Continuing Letter of Credit Agreement, dated on or about the date hereof, by and among New Borrowers and HSBC Bank USA
and the General Security Agreement, dated on or about the date hereof, by and among New Borrowers and HSBC Bank USA. 
  
 (l) All references to the term “Maximum Credit” in the Loan Agreement or any of the other Financing Agreements and each such reference is hereby
amended to mean $110,000,000. 
  
 (m) All references to the term
“Reserves” in the Loan Agreement or any of the other Financing Agreements and each such reference is hereby amended to include, in addition and not in limitation, the Special Reserve, except that for purposes of calculating the Excess
Availability 

  

 6 

 
as such term is used in the Loan Agreement, the Special Reserve shall not be considered in such calculation. 
  
 (n) All references to the term “The CIT Group/Commercial Services, Inc.
(as successor to Congress Talcott Corporation)” in the Loan Agreement or any of the other Financing Agreements and each such reference is hereby amended to mean The CIT Group/Commercial Services, Inc. and its successors and assigns. 

 
 1.3 Interpretation. For purposes of this Amendment No. 1, unless
otherwise defined herein, all capitalized terms used herein which are defined in the Loan Agreement shall have the meanings given to such terms in the Loan Agreement. 
  
 2. Consent. Subject to the terms and conditions contained herein, to the extent such consent is or may be required
under the Loan Agreement, Agent and Lenders hereby consent to: (a) the formation by Parent of Connor as a wholly-owned Subsidiary of Parent formed solely for the purpose of merging with Salant pursuant to the Merger and (b) the Merger. 

 
 3. Assumption of Obligations; Amendments to Guarantees and Financing
Agreements. 
  
 3.1 Each New Borrower hereby expressly (a)
assumes and agrees to be directly liable to Agent and Lenders, jointly and severally with Existing Borrowers, for all Obligations under, contained in, or arising pursuant to the Loan Agreement or any of the other Financing Agreements applicable to
Existing Borrowers and as applied to such New Borrower as a Borrower, (b) agrees to perform, comply with and be bound by all terms, conditions and covenants of the Loan Agreement and the other Financing Agreements applicable to Existing Borrowers as
applied to such New Borrower, with the same force and effect as if such New Borrower had originally executed and been an original Borrower signatory to the Loan Agreement and the other Financing Agreements, (c) each New Borrower is deemed to make as
to itself and the Existing Borrowers, and is, in all respects, bound by all representations and warranties made by Existing Borrowers to Agent and Lenders set forth in the Loan Agreement or in any of the other Financing Agreements, and (d) agrees
that Agent, for itself and the benefit of Lenders, shall have all rights, remedies and interests, including security interests in and liens upon the Collateral granted to Agent pursuant to Section 9 hereof, under and pursuant to the Loan Agreement
and the other Financing Agreements, with respect to such New Borrower and its properties and assets with the same force and effect as Agent, for itself and the benefit of Lenders, has with respect to Existing Borrowers and their respective assets
and properties, as if such New Borrower had originally executed and had been an original Borrower signatory, as the case may be, to the Loan Agreement and the other Financing Agreements. 
  
 3.2 Each Existing Borrower, in its capacity as a Guarantor of the payment and performance of the Obligations of the other
Existing Borrowers, and each Guarantor hereby agrees that each of the Guarantees, dated October 1, 2002, by the Existing Borrowers and Guarantors in favor of Agent (collectively, the “Existing Guarantees”) is hereby amended to include New
Borrowers as additional guarantor party signatories thereto, and each New Borrower hereby agrees that the Existing Guarantees are hereby amended to include such New Borrower as additional guarantor party signatories thereto. Each New Borrower hereby
expressly (a) assumes and agrees to be 

  

 7 

 
directly liable to Agent and Lenders, jointly and severally with Guarantors and Existing Borrowers signatories thereto, for payment and performance of all
Obligations (as defined in the Existing Guarantees), (b) agrees to perform, comply with and be bound by all terms, conditions and covenants of the Existing Guarantees with the same force and effect as if such New Borrower had originally executed and
been an original party signatory to each of the Existing Guarantees as a Guarantor, and (c) agrees that Agent and Lenders shall have all rights, remedies and interests with respect to such New Borrower and its property under the Existing Guarantees
with the same force and effect as if such New Borrower had originally executed and been an original party signatory as a Guarantor to each of the Existing Guarantees. 
  
 4. Loans. Section 2.1(b)(iii) of the Loan Agreement is hereby amended by deleting the reference therein to
“$40,000,000” and substituting the amount of “$60,000,000” therefor. 
  
 5. Letter of Credit Accommodations. 
  
 5.1 Section 2.2(b) of the Loan Agreement is hereby deleted in its entirety and the following substituted therefor: 
  
 “(b) In addition to any charges, fees or expenses charged by any bank or issuer in connection with the Letter of Credit
Accommodations, Borrowers shall pay to Agent, for the benefit of Lenders, (i) a letter of credit fee at a rate equal to one (1%) percent per annum on the daily outstanding balance of the Letter of Credit Accommodations consisting of Commercial
Letters of Credit for the immediately preceding month (or part thereof), payable in arrears as of the first day of each succeeding month and (ii) a letter of credit fee at a rate equal to two (2%) percent per annum on the daily outstanding balance
of all other Letter of Credit Accommodations for the immediately preceding month (or part thereof), payable in arrears as of the first day of each succeeding month, except that Agent may, and upon the written direction of Required Lenders
shall, require Borrowers to pay to Agent for the benefit of Lenders such letter of credit fee at a rate equal to three (3%) percent per annum on the daily outstanding balance of the Letter of Credit Accommodations consisting of Commercial Letters of
Credit and at a rate equal to four (4%) percent per annum on the daily outstanding balance of all other Letter of Credit Accommodations for: (A) the period from and after the date of termination hereof until Agent and Lenders have received full and
final payment of all Obligations (notwithstanding entry of a judgment against any Borrower) and (B) the period from and after the date of the occurrence of an Event of Default for so long as such Event of Default is continuing as determined by
Agent. Such letter of credit fee shall be calculated on the basis of a three hundred sixty (360) day year and actual days elapsed and the obligation of Borrowers to pay such fee shall survive the termination of this Agreement.” 
  
 5.2 Section 2.2(e) of the Loan Agreement is hereby amended to delete the
reference to the amount of “$30,000,000” therein and substitute the amount of “$60,000,000” therefor. 
  

 8 

 6. Fees. Section 3.2(a) of the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor: 
  
 “(a) Borrowers
shall pay to Agent for the benefit of Lenders monthly an unused line fee at a rate equal to the percentage (on a per annum basis) set forth below calculated upon the amount by which $45,000,000 prior to June 19, 2003 and $80,000,000 on and after
June 19, 2003 exceeds the average daily principal balance of the outstanding Loans and Letter of Credit Accommodations during the immediately preceding month (or part thereof) while this Agreement is in effect and for so long thereafter as any
Obligations are outstanding. Such fee shall be payable on the first day of each month in arrears. The percentage used for determining the unused line fee shall be one-quarter ( 1/4%) percent until April 30, 2003 and three-eighths ( 3/8%) percent thereafter, provided, that, effective as of the first (1st) day of the
second month of each fiscal quarter (commencing with the fiscal quarter ending on October 31, 2003), the percentage used for determining the unused line fee shall be as set forth below if either (i) the sum of the Quarterly Average Excess
Availability for the immediately preceding fiscal quarter plus the Excess Cash as of the last day of the immediately preceding fiscal quarter is at or within the amounts indicated for such percentage or (ii) the Leverage Ratio as of the last day of
the immediately preceding fiscal quarter (which ratio for this purpose shall be calculated based on the four (4) immediately preceding fiscal quarters) is at or within the levels indicated for such percentage: 
  

	 Quarterly Average
 Excess Availability plus
 Excess Cash

	  	 Leverage Ratio

	  	 Unused Line
 Fee Percentage

	 
	 $45,000,000 or more
	  	2.00 to 1.00 or less	  	 1/4	%
	 Greater than or equal to $35,000,000 and less than $45,000,000
	  	Greater than 2.00 to 1.00 but equal to or less than 3.00 to 1.00	  	 1/4	%
	 Greater than or equal to $25,000,000 and less than $35,000,000
	  	Greater than 3.00 to 1.00 but equal to or less than 4.00 to 1.00	  	 3/8	%
	 Less than $25,000,000
	  	Greater than 4.00 to 1.00	  	 3/8	%

  
 provided,
that, (A) the unused line fee percentage shall be calculated and established once each fiscal quarter (commencing with the fiscal quarter ending on or after October 31, 2003) and (B) the unused line fee percentage shall be the lower
percentage set forth above based on (1) the sum of the Quarterly Average Excess Availability plus the Excess Cash as provided above or (2) the Leverage Ratio.” 
  

 9 

 7. Collection of Accounts. Section 6.3(a)(ii) of the Loan Agreement is hereby amended to delete
the amount of “$20,000,0000” referred to therein and substitute “$35,000,000” therefor. 
  
 8. Sharing of Payments, Etc. Section 6.9 of the Loan Agreement is hereby amended to add a new Section 6.9(e) at the end thereof as follows:

  
 “(e) Nothing contained in this Section
6.9 shall be construed to require that a Lender acting in its capacity as a Factor to the extent permitted hereunder who has purchased any accounts receivable owing by a Borrower or Guarantor to a third party share any payments received by it as a
Factor in respect of such accounts receivable with any other Lender pursuant to the terms of this Section 6.9.” 
  
 9. Grant of Security Interest by New Borrowers. 
  
 9.1 Without limiting the provisions of Section 3 hereof, the Loan Agreement and the other Financing Agreements, to secure payment and performance of all
of its Obligations, each New Borrower hereby grants to Agent, for itself and the benefit of Lenders, a continuing security interest in, a lien upon, and a right of set off against, and each New Borrower hereby assigns to Agent, for itself and the
benefit of Lenders, as security all personal property and interests in personal property of such New Borrower, whether now owned or hereafter acquired or existing, and wherever located, including: 
  
 (a) all Accounts; 
  
 (b) all general intangibles, including, without limitation, all Intellectual
Property; 
  
 (c) all goods, including, without limitation,
Inventory and Equipment; 
  
 (d) all chattel paper, including,
without limitation, all tangible and electronic chattel paper; 
  
 (e) all instruments, including, without limitation, all promissory notes; 
  
 (f) all documents; 
  
 (g) all
deposit accounts; 
  
 (h) all letters of credit, banker’s
acceptances and similar instruments for which such New Borrower is a beneficiary or otherwise entitled to any payment (contingent or otherwise), and including all letter-of-credit rights; 
  
 (i) all supporting obligations and all present and future liens, security interests, rights, remedies, title and interest
in, to and in respect of Receivables and other Collateral, including (i) rights and remedies under or relating to guaranties, contracts of suretyship, letters of credit and credit and other insurance related to the Collateral, (ii) rights of
stoppage in transit, replevin, repossession, reclamation and other rights and remedies of an unpaid vendor, lienor or secured 

  

 10 

 
party, (iii) goods described in invoices, documents, contracts or instruments with respect to, or otherwise representing or evidencing, Receivables or other
Collateral, including returned, repossessed and reclaimed goods, and (iv) deposits by and property of account debtors or other persons securing the obligations of account debtors; 
  
 (j) all (i) investment property (including securities, whether certificated or uncertificated, securities accounts, security
entitlements, commodity contracts or commodity accounts) and (ii) monies, credit balances, deposits and other property of such New Borrower now or hereafter held or received by or in transit to Agent, any Lender or its Affiliates or at any other
depository or other institution from or for the account of such New Borrower, whether for safekeeping, pledge, custody, transmission, collection or otherwise; 
  

(k) all commercial tort claims, including, without limitation, those identified in the Information Certificate; 
  
 (l) to the extent not otherwise described above, all Receivables; 

 
 (m) all Records; and 
  
 (n) all products and proceeds of the foregoing, in any form, including
insurance proceeds and all claims against third parties for loss or damage to or destruction of or other involuntary conversion of any kind or nature of any or all of the other Collateral. 
  
 9.2 Notwithstanding anything to the contrary contained in this Section 9
above, the types or items of Collateral described in this Section 9 shall not include any rights or interest in any contract, license or license agreement covering personal property of New Borrowers, if under the terms of such contract, license or
license agreement, or applicable law with respect thereto, the grant of a security interest or lien therein to Agent is prohibited and such prohibition has not been or is not waived or the consent of the other party to such contract, license or
license agreement has not been or is not otherwise obtained; provided, that, the foregoing exclusion shall in no way be construed (a) to apply if any such prohibition is unenforceable under the UCC or other applicable law or (b) so as
to limit, impair or otherwise affect Agent’s unconditional continuing security interests in and liens upon any rights or interests of such New Borrower in or to monies due or to become due under any such contract, license or license agreement
(including any Receivables). 
  
 9.3 In the event that Agent has
not received evidence in form and substance satisfactory to Agent that each of the Subsidiaries of Salant set forth on Exhibit D hereto have been liquidated and dissolved to the extent permitted hereunder and the assets thereof validly transferred
and assigned to a Borrower or Guarantor by October 31, 2003, promptly upon the request of Agent, as to any such Subsidiary which shall not have been so liquidated and dissolved and assets transferred and assigned: (a) Borrowers and Guarantors shall
cause each of such Subsidiaries of Salant to execute and deliver to Agent, in form and substance satisfactory to Agent, (i) an absolute and unconditional guarantee of payment of any and all Obligations, (ii) a security agreement granting to Agent a
first priority security interest and lien upon all of the assets of such Subsidiary (except as otherwise consented to in writing by Agent), (iii) related Uniform 

  

 11 

 
Commercial Code Financing Statements and the authorization to file the same, and (b) the Borrowers and Guarantors that are the owner or holder of the Capital
Stock of such Subsidiaries of Salant shall execute and deliver to Agent, in form and substance satisfactory to Agent, (i) a pledge and security agreement granting to Agent a first priority pledge of, security interest in and lien upon, all of the
issued and outstanding shares of Capital Stock of such Subsidiary, and (ii) the original stock certificates or other instruments evidencing the Capital Stock of such Subsidiary, together with such stock powers with respect to such Capital Stock as
Agent may request, and (c) Borrowers and Guarantors shall execute and deliver, or shall cause to be executed and delivered, such other agreements, documents and instruments as Agent may require, including, but not limited to, supplements and
amendments hereto and other loan agreements or instruments evidencing indebtedness of such Subsidiary to Agent, including such opinion letters of counsel with respect to such guarantee, security agreements and related matters as Agent may request.

  
 9.4 In the event that Agent does not receive evidence, in form
and substance satisfactory to Agent, that all of the deposit accounts of New Borrower maintained at SunTrust Bank have been closed and are no longer receiving any checks or other items, by October 31, 2003, promptly upon Agent’s request,
Borrowers and Guarantors shall cause to be executed and delivered Deposit Account Control Agreements with respect to any such deposit accounts, duly authorized, executed and delivered by SunTrust Bank and such New Borrower. 
  
 9.5 In the event that Agent does not receive evidence, in form and substance
satisfactory to Agent, that all of the deposit accounts of each New Borrower maintained at JPMorgan Chase Bank as set forth in the Information Certificate or otherwise have been closed and are no longer receiving any checks or other items, by
October 31, 2003, promptly upon Agent’s request, Borrowers and Guarantors shall cause to be executed and delivered Deposit Account Control Agreements with respect to any such deposit accounts, duly authorized, executed and delivered by JPMorgan
Chase Bank and such New Borrower. 
  
 10. Use of Proceeds.
Notwithstanding anything to the contrary contained in the Loan Agreement, Borrowers shall use a portion of the proceeds of the Loans for payments of the merger consideration required to be paid to the shareholders of Salant pursuant to and in
accordance with the terms of the Merger Agreements as in effect on the date hereof and cost, expenses and fees in connection with the preparation, negotiation, execution and delivery of this Amendment No. 1. 
  
 11. Priority of Liens. Notwithstanding anything to the contrary
contained in Section 5.2 or Section 8.4 of the Loan Agreement, the security interests and liens granted to Agent under this Amendment No. 1 or any of the other Financing Agreements in the deposit accounts of Salant and Salant Holding used for retail
store locations, the deposit accounts at SunTrust Bank, N.A. and JPMorgan Chase Bank of Salant and the deposit accounts of the Subsidiaries of Salant organized under the laws of a jurisdiction outside of the United States of America, in each case as
listed on the Information Certificate shall be valid but not perfected security interests in and liens upon such deposit accounts. 
  
 12. Sale of Assets, Consolidation, Merger, Dissolution, Etc. 
  

 12 

 12.1 Section 9.7(c) of the Loan Agreement is hereby deleted in its entirety and the following substituted
therefor: 
  
 “(c) wind up, liquidate or
dissolve except that any Guarantor (other than Parent) or any Subsidiary of Salant (other than Salant Holding) may wind up, liquidate and dissolve, provided, that, each of the following conditions is satisfied, (i) the
winding up, liquidation and dissolution of such Guarantor or Subsidiary shall not violate any law or any order or decree of any court or other Governmental Authority in any material respect and shall not conflict with or result in the breach of, or
constitute a default under, any indenture, mortgage, deed of trust, or any other agreement or instrument to which any Borrower, Guarantor or Subsidiary is a party or may be bound, (ii) such winding up, liquidation or dissolution shall be done in
accordance with the requirements of all applicable laws and regulations, (iii) effective upon such winding up, liquidation or dissolution, all of the assets and properties of such Guarantor or Subsidiary shall be duly and validly transferred and
assigned to a Borrower or another Guarantor, free and clear of any liens, restrictions or encumbrances other than the security interest and liens of Agent (and Agent shall have received such evidence thereof as Agent may reasonably require) and
Agent shall have received copies of such deeds, assignments or other agreements as Agent may request to evidence and confirm the transfer of such assets of such Guarantor or Subsidiary to a Borrower or Guarantor, (iv) Agent shall have received all
documents and agreements that any Borrower, Guarantor or Subsidiary has filed with any Governmental Authority or as are otherwise required to effectuate such winding up, liquidation or dissolution, (v) no Borrower or Guarantor shall assume any
Indebtedness, obligations or liabilities as a result of such winding up, liquidation or dissolution, or otherwise become liable in respect of any obligations or liabilities of the entity that is winding up, liquidating or dissolving, unless such
Indebtedness is otherwise expressly permitted hereunder, (vi) Agent shall have received not less than ten (10) Business Days prior written notice of the intention of such Guarantor or Subsidiary (other than any Subsidiary of Salant except Salant
Holding) to wind up, liquidate or dissolve, and (vii) as of the date of such winding up, liquidation or dissolution and after giving effect thereto, no Default or Event of Default shall exist or have occurred; or” 
  
 13. Minimum EBITDA. Section 9.17 of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor: 
  
 “9.17 Minimum EBITDA. At any time that the aggregate amount of the Excess Availability is less than $20,000,000, (a) the EBITDA of Parent and its Subsidiaries (on a consolidated basis) for the preceding
twelve (12) consecutive months (treated as a single accounting period) as of the end of the most recent fiscal month for which Agent or any Lender has received financial statements of Borrowers or Guarantors, shall be not less than $40,000,000
(after giving effect to the EBITDA of Salant and its Subsidiaries on a pro forma basis in a manner satisfactory to Agent) and (b) the EBITDA of Parent and its Subsidiaries (on a consolidated basis) as of 

  

 13 

 
the end of the most recent two (2) fiscal months, on a combined basis, for which Agent or any Lender has received financial statements of Borrowers or
Guarantors shall be positive.” 
  
 14. Assignments;
Participations. Agent hereby confirms that its consent to the assignment by a Lender of a portion of such Lender’s rights and obligations under the Loan Agreement to one or more Eligible Transferees as required under Section 13.7(a) of the
Loan Agreement shall not be unreasonably withheld. 
  
 15.
Existing Salant Letters of Credit. 
  
 15.1 Borrowers and
Guarantors confirm and acknowledge that Agent, on behalf of Lenders, and for the account of Borrowers and Guarantors, has agreed to indemnify and reimburse the Existing Salant Lenders for certain liabilities of the Existing Salant Lenders in
connection with or related to certain of the Existing Salant Letters of Credit as set forth in the LC Indemnification Agreement. Without limiting any other rights of Agent and Lenders or other obligations and liabilities of Borrowers and Guarantors,
each Borrower shall reimburse Agent on demand (or, at its option, Agent may charge the loan account of any Borrower or Guarantor) for all liability, loss, costs, damage or expense (including, but not limited to, attorneys’ fees and expenses)
which Agent or any Lender may suffer or incur by reason of any reimbursement or payment to any Existing Salant Lender in connection with the Existing Salant Letters of Credit or any other cause or matter arising out of or relating to the LC
Indemnification Agreement. The Existing Salant Letters of Credit that are subject to the LC Indemnification Agreement shall constitute Letter of Credit Accommodations and shall be subject to a Reserve in the full amount of the liability of Agent to
the Existing Salant Lenders (contingent or otherwise) pursuant to the LC Indemnification Agreement. The Reserve shall be reduced to the extent of any payment by Agent to an Existing Salant Lender in respect of or in connection with an Existing
Salant Letter of Credit and, except as Agent may otherwise determine, shall not terminate as to any undrawn amounts under an Existing Salant Letter of Credit (and interest and fees related thereto) until Agent shall receive the written agreement of
Existing Salant Lenders (or the agent on their behalf), in form and substance satisfactory to Agent, that Agent and Lenders have no further liability to Existing Salant Lenders in respect thereof. 
  
 15.2 Agent is irrevocably authorized to pay any Existing Salant Lender any
amounts demanded by such Existing Salant Lender under the LC Indemnification Agreement without regard to any dispute or claim that any Borrrower or Guarantor may have or assert against any Existing Salant Lender or any issuer of any Existing Salant
Letter of Credit, Agent or any party to any Existing Salant Letter of Credit and Borrowers and Guarantors shall indemnify and pay to Agent as set forth above, without offset, defense or counterclaim of any kind, nature or description. 
  
 15.3 In addition, Agent is transferring the liability to the issuer of
certain of the Existing Salant Letters of Credit from the Existing Salant Lenders to Agent (on behalf of Lenders and for the account of Salant) as set forth in the letter agreement, dated of even date herewith, by and among such issuer, The CIT
Group/Commercial Services, Inc. as agent for the other Existing Salant Lenders, Agent, Salant and Salant Holding. The Existing Salant Letters of Credit that are 

  

 14 

 
so transferred shall constitute Letter of Credit Accommodations and shall be subject to a Reserve in the full amount of the liability of Agent to the issuer
thereof (contingent or otherwise). 
  
 16. Representations,
Warranties and Covenants. Borrowers (including New Borrowers) and Guarantors jointly and severally, represent, warrant and covenant with and to Agent and Lenders as follows, which representations, warranties and covenants shall survive the
execution and delivery hereof: 
  
 16.1 This Amendment No. 1 and
the Salant Supplemental Financing Agreements have been duly authorized, executed and delivered by all necessary action on the part of each Borrower and Guarantor which is a party hereto and thereto and, if necessary, their respective stockholders,
and is in full force and effect as of the date hereof, as the case may be, and the agreements and obligations of Borrowers and Guarantors contained herein and therein constitute legal, valid and binding obligations of Borrowers and Guarantors
enforceable against them in accordance with their terms except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors’
rights and (ii) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 
  

16.2 No action of, or filing with, or consent of any Governmental Authority, other than the filing of UCC financing statements, and no approval or
consent of any other party, is required to authorize, or is otherwise required in connection with, the execution, delivery and performance of this Amendment No. 1 and the Salant Supplemental Financing Agreements. 
  
 16.3 None of the transactions contemplated by this Amendment No. 1 or the
Salant Supplemental Financing Agreements are in contravention of any applicable law, or the terms of any agreement to which any Borrower or Guarantor is a party or by which any property of any Borrower or Guarantor is bound. 
  
 16.4 As of the date hereof, except as otherwise provided in Section 11 above,
Agent has and will have a valid and perfected first priority security interest in the assets of New Borrowers, subject only to the liens indicated on Schedule 8.4 to the Information Certificate and the other liens permitted under Section 9.8 of the
Loan Agreement. 
  
 16.5 After giving effect to the amendments
provided for herein, including the new Information Certificate included with this Amendment No. 1, all of the representations and warranties set forth in the Loan Agreement and the other Financing Agreements, each as amended hereby, are true and
correct in all material respects on and as of the date hereof as if made on the date hereof, except to the extent any such representation or warranty is made as of an earlier specified date, in which case such representation or warranty shall have
been true and correct as of such date. 
  
 16.6 After giving
effect to the amendments provided for herein and the Merger and other transactions contemplated hereby and in the Merger Agreements, each Borrower (including each New Borrower) is not insolvent (as such term is defined in the US Bankruptcy Code and
any applicable state law) or will not become insolvent, and does not have unreasonably small 

  

 15 

 
capital after the consummation of the transactions contemplated hereby and thereby to continue to engage in its business and has not incurred liabilities as
a result of the transactions contemplated hereby and thereby that are beyond its ability to pay as such liabilities mature. 
  
 16.7 The Merger Agreements and the transactions contemplated thereby have been duly executed, delivered and performed in accordance with their terms,
including the fulfillment (not the waiver, except as disclosed and consented to by Agent) of all conditions precedent set forth therein. Pursuant to the Merger Agreements and the transactions contemplated thereby, Parent has acquired and has good
and marketable title to all of the issued and outstanding shares of Capital Stock of Salant and Salant has good and marketable title to all of the issued and outstanding shares of Capital Stock of Salant Holding and each of Salant Caribbean, S.A.,
Birdhill Limited and Salant Far East Limited (except for 5 shares in the case of Salant Caribbean, S.A., which are issued to Erick Sterkel Caal and one share in the case of each of Birdhill Limited and Salant Far East Limited, which are issued to
Descona Ltd., a solicitor for the trustee of Salant), free and clear of all claims, liens, pledges and encumbrances of any kind, except as permitted under Section 9.8 of the Loan Agreement. The total amount of the purchase price and other
consideration required to be paid by Parent for all of the issued and outstanding shares of Capital Stock of Salant does not exceed $92,000,000. 
  
 16.8 All actions and proceedings required by the Merger Agreements, applicable law or regulation (including, but not limited to, compliance with the
Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended and all applicable securities laws) have been taken and the transactions contemplated thereby have been duly and validly taken and consummated. 
  
 16.9 Agent has, on or before the date hereof, received from Borrowers, true,
complete and correct copies of the Merger Agreements, and all notices, instruments, documents and agreements related thereto, including all exhibits and schedules thereto. 
  
 16.10 Borrowers and Guarantors shall take such steps and execute and deliver, and cause to be executed and delivered, to
Agent, such additional UCC financing statements and termination statements, and other and further agreements, documents and instruments as Agent may require in order to more fully evidence, perfect and protect Agent’s first priority security
interest in the Collateral (including the Collateral of New Borrowers). 
  
 16.11 Each of the Subsidiaries of Salant set forth on Exhibit D hereto, other than Salant Caribbean, S.A., Birdhill Limited and Salant Far East Ltd., are and shall continue to be inactive and are not engaged in, and shall not engage in, any
business or commercial activity or hold or own any assets or properties. 
  
 16.12 On or before the date hereof, Ocean Bank has ceased to be a Letter of Credit Issuer. On or before July 31, 2003, (a) all Letter of Credit Facility Agreements with Ocean Bank shall be terminated and of no further
force and effect and Ocean Bank shall not have any security interest in or lien upon any of the assets or properties of any Borrower or Guarantor and (b) all UCC financing statements between Ocean Bank as secured party and any Borrower or Guarantor,
as debtor filed with any Governmental Authority prior to the date hereof shall have been 

  

 16 

 
terminated of record pursuant to termination statements the filing of which were duly authorized by Ocean Bank. 
  
 16.13 As of the date hereof, no Default or Event of Default exists or has
occurred and is continuing. 
  
 17. Conditions Precedent.
The effectiveness of the consent and amendments contained herein shall only be effective upon the satisfaction of each of the following conditions precedent in a manner satisfactory to Agent: 
  
 17.1 Agent shall have received an executed original or executed original
counterparts of this Amendment No. 1 (including all schedules and exhibits hereto) and the Salant Supplemental Financing Agreements, duly authorized, executed and delivered by the respective party or parties hereto; 
  
 17.2 Agent shall have received, in form and substance satisfactory to Agent,
(a) amendments to the Letter of Credit Intercreditor Agreements providing for the addition of the New Borrowers thereto, and related matters, duly authorized, executed and delivered by the Letter of Credit Issuers and (b) amendments to the Factor
Assignment Agreements providing for the addition of the New Borrowers thereto (to the extent that the New Borrowers have been added to or are included in the arrangements with a Factor), and related matters, duly authorized, executed and delivered
by the Factors and Borrowers and Guarantors; 
  
 17.3 each of the
Merger Agreements and the transactions contemplated thereby shall have been or shall be duly authorized, executed and delivered by the respective parties thereto prior to or contemporaneously with the effectiveness thereof; 
  
 17.4 all conditions precedent to the obligations of the parties to the Merger
Agreements shall have been fulfilled (and not merely waived, except if approved in writing by Agent), at or before the consummation of the Merger; 
  
 17.5 all actions and proceedings required by the Merger Agreements, applicable law or regulation and the transactions contemplated thereby shall have been
duly and validly taken in accordance with the terms thereof, and all required consents thereto under any agreement, document or instrument to which Borrowers, Salant, Salant Holdings or any of their affiliates is a party or by which any of its or
their properties are bound, and all applicable consents or approvals of each Governmental Authority, shall have been obtained and be in full force and effect; 
  

17.6 no court of competent jurisdiction shall have issued any injunction, restraining order or other order which prohibits the consummation of the
transactions described in the Merger Agreements or the Financing Agreements or modifies such transactions, and no governmental or other action or proceeding shall have been commenced, seeking any injunction, restraining order or other order which
seeks to void or otherwise modify the transactions described in the Merger Agreements or the Financing Agreements; 
  
  

 17 

 17.7 Agent shall have received UCC, Federal and State tax lien and judgment searches with respect to New
Borrowers in all relevant jurisdictions, as determined by Agent; 
  
 17.8 Agent shall have received evidence of insurance and loss payee endorsements required under the Loan Agreement and under the other Financing Agreements with respect to New Borrowers, in form and substance satisfactory to Agent, and
certificates of insurance policies and/or endorse-ments naming Agent as loss payee; 
  
 17.9 the aggregate amount of the Excess Availability of Borrowers as determined by Agent, as of the date hereof, shall be not less than $40,000,000 after giving effect to the Loans made or to be made and Letter of
Credit Accommodations issued or to be issued in connection with the Merger and the other transactions contemplated hereunder and the amount of any fees and expenses payable in connection therewith (except that for purposes of this
Section 17.9, the calculation of Excess Availability shall be without regard to the limitations of the Maximum Credit and the Loan Limits as to any Borrower for up to the aggregate amount of $10,000,000); 
  
 17.10 Agent shall have received, in form and substance satisfactory to Agent,
all releases, terminations and such other documents as Agent may request to evidence and effectuate the termination by the Existing Salant Lenders of their respective financing arrangements with Salant and its Subsidiaries and the termination and
release by it or them, as the case may be, of any interest in and to any assets and properties of Salant and its Subsidiaries, duly authorized, executed and delivered by it or each of them, including, but not limited to, UCC termination statements
for all UCC financing statements previously filed by it or any of them or their predecessors, as secured party and Salant or any of its Subsidiaries, as debtor; 
  

17.11 no material adverse change shall have occurred in the assets, business or prospects of Borrowers and Guarantors since the date of Agent’s
latest field examination (not including for this purpose the field review referred to in Section 17.12 below) and no change or event shall have occurred which would impair the ability of any Borrower or Guarantor to perform its obligations hereunder
or under any of the other Financing Agreements to which it is a party or of Agent or any Lender to enforce the Obligations or realize upon the Collateral; 
  
 17.12 Agent shall have completed a field review of the Records and such other information with respect to the Collateral of Salant and its Subsidiaries as
Agent may require to determine the amount of Loans available to Salant and Salant Holding (including, without limitation, current perpetual inventory records and/or roll-forwards of Accounts and Inventory through the date of closing and test counts
of the Inventory in a manner satisfactory to Agent, together with such supporting documentation as may be necessary or appropriate, and other documents and information that will enable Agent to accurately identify and verify the Collateral), the
results of which in each case shall be satisfactory to Agent, not more than three (3) Business Days prior to the date hereof; 
  
 17.13 Agent shall have received evidence, in form and substance satisfactory to Agent, that Agent has a valid perfected first priority security interest
in all of the Collateral (other than the Senior Note Priority Collateral, the Letter of Credit Issuer Priority Collateral and certain deposit accounts to the extent set forth in Section 11 hereof) and a valid perfected second priority 

  

 18 

 
security interest in all other Collateral (other than certain deposit accounts to the extent set forth in Section 11 hereof); 
  
 17.14 Agent shall have received Borrowers’ projected financial
statements for the period from the date hereof through January 31, 2004, which shall be prepared on a monthly basis, together with a certificate, dated the date hereof, of the chief financial officer or chief executive officer of Parent stating that
such projected financial statements were prepared by such officer of Parent in good faith and are based on assumptions that are believed by such officer in good faith to be reasonable in light of all facts and circumstances known to Parent at such
time, all of which shall be reasonably satisfactory to Agent; 
  
 17.15 Agent shall have received, in form and substance satisfactory to Agent, all consents, waivers, acknowledgments and other agreements from third persons which Agent may deem necessary or desirable in order to permit, protect and perfect
its security interests in and liens upon the Collateral (including the Collateral of New Borrowers) or to effectuate the provisions of this Amendment No.1 and the other Financing Agreements; 
  
 17.16 Agent shall have received, in form and substance satisfactory to Agent,
the Information Certificate duly authorized, executed and delivered by Borrowers and Guarantors; 
  
 17.17 New Borrowers shall have authorized Agent to prepare and file such Uniform Commercial Code financing statements and other documents and instruments
which Agent has determined are necessary to perfect or continue perfecting the security interests of Agent in all of the assets now or hereafter owned by New Borrowers; 
  
 17.18 Agent shall have received originals of the shares of the stock certificates representing one hundred percent (100%) of
the issued and outstanding shares of the Capital Stock of the direct and indirect Subsidiaries of a Borrower or Guarantor which are organized under the laws of a jurisdiction within the United States of America (in each case together with stock
powers duly executed in blank with respect thereto); 
  
 17.19
Agent shall have received, in form and substance satisfactory to Agent, Deposit Account Control Agreements by and among Agent, each New Borrower and each bank where such New Borrower has a deposit account (other than deposit accounts used
exclusively in connection with an individual retail store location and for the deposit accounts of New Borrower currently maintained at SunTrust Bank and JPMorgan Chase Bank), in each case, duly authorized, executed and delivered by such bank and
New Borrower; 
  
 17.20 Agent shall have received, in form and
substance satisfactory to Agent, true, correct and complete copies of the Merger Agreements, duly executed, authorized and delivered by each of the parties thereto; 
  
 17.21 Agent shall have received (i) a copy of the Certificate of Incorporation (or comparable document), and all amendments
thereto, for each New Borrower certified by the Secretary of State of its jurisdiction of incorporation as of a recent date certifying that each of the foregoing documents remains in full force and effect and has not been modified or amended,

  

 19 

 except as described therein and (ii) a certificate from an officer of each Borrower and Guarantor dated the date hereof
certifying that its Certificate of Incorporation (or comparable document) and all amendments thereto for it remains in full force and effect and has not been modified or amended as to Existing Borrowers and Guarantors since the date of the certified
copy thereof previously delivered to Agent prior to the date hereof and as to New Borrowers except as described therein; 
  
 17.22 Agent shall have received, in form and substance satisfactory to Agent, the Officer’s Certificate of Directors’ Resolutions, Corporate
By-Laws, Incumbency and Shareholder’s Consent of each Borrower and each Guarantor (except as to Parent, without the Shareholder’s Consent) evidencing the adoption and subsistence of resolutions approving the execution, delivery and
performance by each Borrower and Guarantor of this Amendment No. 1 and the Salant Supplemental Financing Agreements to which it is a party; 
  
 17.23 Agent shall have received original good standing certificates (or its equivalent) from the Secretary of State (or comparable official) from each
jurisdiction where each Borrower and Guarantor conducts business; 
  
 17.24 Agent shall have received, in form and substance satisfactory to Agent, a legal opinion of counsel to Borrowers and Guarantors with respect to the matters contemplated by this Amendment No. 1, the Salant Supplemental Financing
Agreements and the Merger Agreements, and including opinions of counsel qualified in such jurisdictions as Agent may specify; and 
  
 17.25 No Default or Event of Default shall exist or have occurred and be continuing. 
  
 18. Effect of this Amendment. This Amendment No.1 and the instruments and agreements delivered pursuant hereto
constitute the entire agreement of the parties with respect to the subject matter hereof and thereof, and supersede all prior oral or written communications, memoranda, proposals, negotiations, discussions, term sheets and commitments with respect
to the subject matter hereof and thereof. Except as expressly amended pursuant hereto and except for the consent expressly granted herein, no other changes or modifications or waivers to the Financing Agreements are intended or implied, and in all
other respects the Financing Agreements are hereby specifically ratified, restated and confirmed by all parties hereto as of the effective date hereof. To the extent that any provision of the Loan Agreement or any of the other Financing Agreements
are inconsistent with the provisions of this Amendment No.1, the provisions of this Amendment No.1 shall control. 
  
 19. Further Assurances. Each Borrower and Guarantor shall execute and deliver such additional documents and take such additional action as may be
reasonably requested by Agent or Lenders to effectuate the provisions and purposes of this Amendment No.1. 
  
 20. Governing Law. The rights and obligations hereunder of each of the parties hereto shall be governed by and interpreted and determined in
accordance with the internal laws of the State of Florida (but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of Florida).

  

 20 

 21. Binding Effect. This Amendment No.1 shall be binding upon and inure to the benefit of each of
the parties hereto and their respective successors and assigns. 
  
 22. Counterparts. This Amendment No.1 may be executed in any number of counterparts, but all of such counterparts shall together constitute but one and the same agreement. In making proof of this Amendment No.1, it shall not be
necessary to produce or account for more than one counterpart thereof signed by each of the parties hereto. Delivery of an executed counterpart of this Amendment No.1 by telecopier shall have the same force and effect as delivery of an original
executed counterpart of this Amendment No.1. Any party delivering an executed counterpart of this Amendment No.1 by telecopier also shall deliver an original executed counterpart of this Amendment No.1, but the failure to deliver an original
executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment No.1 as to such party or any other party. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 21 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly executed and delivered
by their authorized officers as of the day and year first above written. 
  

	 SUPREME INTERNATIONAL, INC

		
	 By:
	 	 Rosemary B. Trudeau

		
	 Title:
	 	 Treasurer

	
	 JANTZEN, INC.

		
	 By:
	 	 Rosemary B. Trudeau

		
	 Title:
	 	 Treasurer

	
	 SALANT CORPORATION

		
	 By:
	 	 Rosemary B. Trudeau

		
	 Title:
	 	 Treasurer

	
	 SALANT HOLDING CORPORATION

		
	 By:
	 	 Rosemary B. Trudeau

		
	 Title:
	 	 Treasurer

	
	 PERRY ELLIS INTERNATIONAL, INC.

	 PEI LICENSING, INC.

	 JANTZEN APPAREL CORP.

	 SUPREME REAL ESTATE I, LLC

	 SUPREME REAL ESTATE II, LLC

	 SUPREME REALTY, LLC

	 BBI RETAIL, L.L.C.

	 PERRY ELLIS REAL ESTATE CORPORATION

		
	 By:
	 	 Rosemary B. Trudeau

		
	 Title:
	 	 Secretary, Treasurer, V.P. or Manager, as applicable

  
 [SIGNATURES CONTINUE ON
FOLLOWING PAGE] 

 [SIGNATURES CONTINUED FROM PRECEDING PAGE] 
  

	 SUPREME MUNSINGWEAR CANADA INC.

		
	 By:
	 	 Rosemary B. Trudeau

		
	 Title:
	 	 Treasurer

  

	 AGREED:

	
	 CONGRESS FINANCIAL CORPORATION
 (FLORIDA), as Agent

		
	 By:
	 	 [ILLEGIBLE]

		
	 Title:
	 	 A.V.P

 EXHIBIT A 
 TO 
 AMENDMENT NO. 1 
  

Existing Salant Lenders 
  
 The CIT Group/Commercial Services, Inc. 
  

 A-1 

 EXHIBIT B 
 TO 
 AMENDMENT NO. 1 
  

Existing Letters of Credit 
  
 See Attached 
  

 B-1 

 EXHIBIT C 
 TO 
 AMENDMENT NO. 1 
  

Information Certificate 
  
 See Attached 
  

 C-1 

 EXHIBIT D 
 TO 
 AMENDMENT NO. 1 
  

List of Salant Subsidiaries 
  
 Salant Caribbean, S.A. 
 Birdhill Limited

 Salant Far East Ltd. 
  

 D-1

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