Document:

<PAGE>

                                                                    EXHIBIT 4-f

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                               GUARANTEE AGREEMENT

                                 BY AND BETWEEN

                    SEACOAST FINANCIAL SERVICES CORPORATION,
                                  AS GUARANTOR

                                       and

                      STATE STREET BANK AND TRUST COMPANY,
                              AS GUARANTEE TRUSTEE

                                   relating to

                            SEACOAST CAPITAL TRUST I

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

                           Dated as of          , 2002
                                       ---------

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

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<PAGE>

                             CROSS-REFERENCE TABLE*

<TABLE>
<CAPTION>

    SECTION OF
TRUST INDENTURE ACT                                               SECTION OF
OF 1939, AS AMENDED                                          GUARANTEE AGREEMENT
-------------------                                          -------------------
<S>                                                               <C>
310(a)...........................................................   4.1(a)
310(b)...........................................................   4.1(c), 2.8
310(c)...........................................................   Inapplicable
311(a)...........................................................   2.2(b)
311(b)...........................................................   2.2(b)
311(c)...........................................................   Inapplicable
312(a)...........................................................   2.2(a)
312(b)...........................................................   2.2(b)
313..............................................................   2.3
314(a)...........................................................   2.4
314(b)...........................................................   Inapplicable
314(c)...........................................................   2.5
314(d)...........................................................   Inapplicable
314(e)...........................................................   1.1, 2.5, 3.2
314(f)...........................................................   2.1, 3.2
315(a)...........................................................   3.1(d)
315(b)...........................................................   2.7
315(c)...........................................................   3.1
315(d)...........................................................   3.1(d)
316(a)...........................................................   1.1, 2.6, 5.4
316(b)...........................................................   5.3
316(c)...........................................................   8.2
317(a)...........................................................   Inapplicable
317(b)...........................................................   Inapplicable
318(a)...........................................................   2.1
318(b)...........................................................   2.1
318(c)...........................................................   2.1
</TABLE>

---------------------------
*  This Cross-Reference Table does not constitute part of the Guarantee
   Agreement and shall not affect the interpretation of any of its terms or
   provisions.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
<S>                                                                         <C>
                                    ARTICLE I

                                   DEFINITIONS
SECTION 1.1.  DEFINITIONS...................................................   2

                                   ARTICLE II

                               TRUST INDENTURE ACT

SECTION 2.1.  TRUST INDENTURE ACT; APPLICATION..............................   5
SECTION 2.2.  LIST OF HOLDERS...............................................   5
SECTION 2.3.  REPORTS BY THE GUARANTEE TRUSTEE..............................   6
SECTION 2.4.  PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.....................   6
SECTION 2.5.  EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT..............   6
SECTION 2.6.  EVENTS OF DEFAULT; WAIVER.....................................   6
SECTION 2.7.  EVENT OF DEFAULT; NOTICE......................................   6
SECTION 2.8.  CONFLICTING INTERESTS.........................................   7

                                   ARTICLE III

               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

SECTION 3.1.  POWERS AND DUTIES OF THE GUARANTEE TRUSTEE....................   7
SECTION 3.2.  CERTAIN RIGHTS OF GUARANTEE TRUSTEE...........................   9
SECTION 3.3.  COMPENSATION; INDEMNITY; FEES.................................  10

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

SECTION 4.1.  GUARANTEE TRUSTEE; ELIGIBILITY................................  11
SECTION 4.2.  APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE
                TRUSTEE.....................................................  12
</TABLE>

                                      -i-
<PAGE>

<TABLE>
<CAPTION>
                                                                            PAGE
<S>                                                                         <C>
                                    ARTICLE V

                                    GUARANTEE

SECTION 5.1.  GUARANTEE.....................................................  12
SECTION 5.2.  WAIVER OF NOTICE AND DEMAND...................................  12
SECTION 5.3.  OBLIGATIONS NOT AFFECTED......................................  13
SECTION 5.4.  RIGHTS OF HOLDERS.............................................  14
SECTION 5.5.  GUARANTEE OF PAYMENT..........................................  14
SECTION 5.6.  SUBROGATION...................................................  14
SECTION 5.7.  INDEPENDENT OBLIGATIONS.......................................  14

                                   ARTICLE VI

                           COVENANTS AND SUBORDINATION

 SECTION 6.1.  SUBORDINATION................................................  15
 SECTION 6.2.  PARI PASSU GUARANTEES........................................  15

                                   ARTICLE VII

                                   TERMINATION

SECTION 7.1.  TERMINATION...................................................  15

                                  ARTICLE VIII

                                  MISCELLANEOUS

SECTION 8.1.  SUCCESSORS AND ASSIGNS........................................  16
SECTION 8.2.  AMENDMENTS....................................................  16
SECTION 8.3.  NOTICES.......................................................  16
SECTION 8.4.  BENEFIT.......................................................  17
SECTION 8.5.  GOVERNING LAW.................................................  17
SECTION 8.6.  COUNTERPARTS..................................................  17
</TABLE>

                                      -ii-

<PAGE>

     GUARANTEE AGREEMENT, dated as of _____________, 2002, between SEACOAST
FINANCIAL SERVICES CORPORATION, a Massachusetts corporation (the
"GUARANTOR"), having its principal office at One Compass Place, New Bedford,
Massachusetts 02740, and State Street Bank and Trust Company, as trustee (the
"GUARANTEE TRUSTEE"), for the benefit of the Holders (as defined herein) from
time to time of the Trust Preferred Securities (as defined herein) of
seACOAST CAPITAL Trust I, a Delaware statutory business trust (the "ISSUER
TRUST").

                            RECITALS OF THE GUARANTOR

     WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of _____________,2002 (the "TRUST AGREEMENT"), among Seacoast Financial
Services Corporation, as Depositor, the Property Trustee, the Delaware
Trustee, the Administrative Trustees named therein and the several Holders,
the Issuer Trust is issuing $50,000,000 aggregate Liquidation Amount (as
defined in the Trust Agreement) of its ___% Trust Preferred Securities,
(Liquidation Amount $25 per Trust Preferred Security) (and may issue up to an
additional $7,500,000 aggregate Liquidation Amount of such securities)
(collectively, the "TRUST PREFERRED SECURITIES"), representing preferred
undivided beneficial interests in the assets of the Issuer Trust and having
the terms set forth in the Trust Agreement; and

     WHEREAS, the Trust Preferred Securities will be issued by the Issuer Trust
and the proceeds thereof, together with the proceeds from the issuance of the
Issuer Trust's Common Securities (as defined herein), will be used to purchase
the Debentures (as defined in the Trust Agreement) of the Guarantor, which
Debentures will be deposited with State Street Bank and Trust Company, as
Property Trustee under the Trust Agreement, as trust assets; and

     WHEREAS, as an incentive for the Holders to purchase the Trust Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Trust Preferred
Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the purchase of the Trust Preferred
Securities by each Holder, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time.

<PAGE>

                                   ARTICLE I

                                   DEFINITIONS

     SECTION 1.1. DEFINITIONS.

     For all purposes of this Guarantee Agreement, except as otherwise expressly
provided or unless the context otherwise requires:

     (a) The terms defined in this Article have the meanings assigned to them in
this Article, and include the plural as well as the singular;

     (b) All other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;

     (c) The words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation";

     (d) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles;

     (e) Unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this
Guarantee Agreement; and

     (f) The words "hereby", "herein", "hereof" and "hereunder" and other words
of similar import refer to this Guarantee Agreement as a whole and not to any
particular Article, Section or other subdivision.

     "AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"CONTROL", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the
foregoing.

     "BOARD OF DIRECTORS" means the board of directors of the Guarantor or the
Executive Committee of the board of directors of the Guarantor (or any other
committee of the board of directors of the Guarantor performing similar
functions) or a committee designated by the board of directors of the Guarantor
(or such committee), comprised of two or more members of the board of directors
of the Guarantor or officers of the Guarantor, or both.

     "COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer Trust.

                                      -2-

<PAGE>

     "EVENT OF DEFAULT" means (i) a default by the Guarantor in any of its
payment obligations under this Guarantee Agreement or (ii) a default by the
Guarantor in any other obligation hereunder that remains unremedied for 30 days.

     "GUARANTEE AGREEMENT" means this Guarantee Agreement, as modified, amended
or supplemented from time to time.

     "GUARANTEE PAYMENTS" means the following payments or distributions, without
duplication, with respect to the Trust Preferred Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Trust Preferred Securities, to the extent the Issuer Trust shall have funds on
hand available therefor at such time; (ii) the Redemption Price (as defined in
the Trust Agreement) with respect to any Trust Preferred Securities called for
redemption by the Issuer Trust, to the extent the Issuer Trust shall have funds
on hand available therefor at such time; and (iii) upon a voluntary or
involuntary termination, winding-up or liquidation of the Issuer Trust, unless
Debentures are distributed to the Holders, the lesser of (a) the Liquidation
Distribution (as defined in the Trust Agreement) with respect to the Trust
Preferred Securities, to the extent that the Issuer Trust shall have funds on
hand available therefor at such time, and (b) the amount of assets of the Issuer
Trust remaining available for distribution to Holders on liquidation of the
Issuer.

     "GUARANTEE TRUSTEE" means State Street Bank and Trust Company, solely in
its capacity as Guarantee Trustee and not in its individual capacity, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement, and thereafter means each
such Successor Guarantee Trustee.

     "GUARANTOR" has the meaning specified in the first paragraph of this
Guarantee Agreement.

     "HOLDER" means any Holder (as defined in the Trust Agreement) of any Trust
Preferred Securities; PROVIDED, HOWEVER, that in determining whether the holders
of the requisite percentage of Trust Preferred Securities have given any
request, notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor, the Guarantee Trustee, or any Affiliate of the Guarantor or the
Guarantee Trustee.

     "INDENTURE" means the Junior Subordinated Indenture, dated as of
___________, 2002, between Seacoast Financial Services Corporation and State
Street Bank and Trust Company, as trustee, as the same may be modified, amended
or supplemented from time to time.

     "ISSUER TRUST" has the meaning specified in the first paragraph of this
Guarantee Agreement.

     "LIST OF HOLDERS" has the meaning specified in Section 2.2(a).

                                      -3-

<PAGE>

     "MAJORITY IN LIQUIDATION AMOUNT OF THE TRUST PREFERRED SECURITIES" means,
except as provided by the Trust Indenture Act, Trust Preferred Securities
representing more than 50% of the aggregate Liquidation Amount (as defined in
the Trust Agreement) of all Trust Preferred Securities then Outstanding (as
defined in the Trust Agreement).

     "OFFICERS' CERTIFICATE" means, with respect to any Person, a certificate
signed by the Chairman or a Vice Chairman of the Board of Directors of such
Person or the President or a Vice President of such Person, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Guarantor, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:

     (a) a statement by each officer signing the Officers' Certificate that such
officer has read the covenant or condition and the definitions relating thereto;

     (b) a brief statement of the nature and scope of the examination or
investigation undertaken by such officer in rendering the Officers' Certificate;

     (c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

     (d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.

     "PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, company,
limited liability company, trust, business trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.

     "RESPONSIBLE OFFICER" means, with respect to the Guarantee Trustee, any
Senior Vice President, any Vice President, any Assistant Vice President, or any
Assistant Secretary working in its Corporate Trust Department or any other
officer of the Corporate Trust Department of the Guarantee Trustee and also
means, with respect to a particular matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.

     "SUCCESSOR GUARANTEE TRUSTEE" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.

     "TRUST AGREEMENT" means the Amended and Restated Trust Agreement of the
Issuer Trust referred to in the recitals to this Guarantee Agreement, as
modified, amended or supplemented from time to time.

     "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force at
the date as of which this Guarantee Agreement was executed; PROVIDED, HOWEVER,
that in the
                                      -4-

<PAGE>

 event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.

     "TRUST PREFERRED SECURITIES" has the meaning specified in the recitals to
this Guarantee Agreement.

     "VICE PRESIDENT," when used with respect to the Guarantor, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."

                                   ARTICLE II

                               TRUST INDENTURE ACT

     SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.

     (a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.

     (b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Section 310 and 317,
inclusive, of the Trust Indenture Act through operation of Section 318(c)
thereof, such imposed duties shall control. If any provision of this Guarantee
Agreement modifies or excludes any provision of the Trust Indenture Act which
may be so modified or excluded, the latter provision shall be deemed to apply to
this Guarantee Agreement as so modified or to be excluded, as the case may be.

     SECTION 2.2. LIST OF HOLDERS.

     (a) The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (a) semiannually, on or before June 30 and December 31 of each year, a
list, in such form as the Guarantee Trustee may reasonably require, of the names
and addresses of the Holders (a "LIST OF HOLDERS") as of a date not more than 15
days prior to the delivery thereof, and (b) at such other times as the Guarantee
Trustee may request in writing, within 30 days after the receipt by the
Guarantor of any such request, a List of Holders as of a date not more than 15
days prior to the time such list is furnished, in each case to the extent such
information is in the possession or control of the Guarantor and has not
otherwise been received by the Guarantee Trustee in its capacity as such. The
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.

     (b) The Guarantee Trustee shall comply with the requirements of Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.

                                      -5-

<PAGE>

     SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE.

     Not later than 60 days after May 15 of each year, commencing with May 15,
2003, the Guarantee Trustee shall provide to the Holders such reports as are
required by Section 313 of the Trust Indenture Act, if any, dated as of May 15
of such year and in the form and in the manner provided by Section 313 of the
Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.

     SECTION 2.4. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE.

     The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 314 of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act, in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.

     SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.

     The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer of the Guarantor pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.

     SECTION 2.6. EVENTS OF DEFAULT; WAIVER.

     The Holders of at least a Majority in Liquidation Amount of the Trust
Preferred Securities may, by vote, on behalf of the Holders of all the Trust
Preferred Securities, waive any past default or Event of Default and its
consequences. Upon such waiver, any such default or Event of Default shall cease
to exist, and any default or Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.

     SECTION 2.7. EVENT OF DEFAULT; NOTICE.

     (a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default known to the Guarantee Trustee, transmit by mail, first class
postage prepaid, to the Holders, notice of any such Event of Default, unless
such Event of Default has been cured before the giving of such notice; PROVIDED
that, except in the case of a default in the payment of a Guarantee Payment, the
Guarantee Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Guarantee Trustee in

                                      -6-

<PAGE>

good faith determines that the withholding of such notice is in the interests of
the Holders.

     (b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained actual knowledge, of such Event of
Default.

     SECTION 2.8. CONFLICTING INTERESTS.

     The Trust Agreement and the Indenture shall be deemed to be specifically
described in this Guarantee Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.

                                  ARTICLE III

               POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

     SECTION 3.1. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.

     (a) This Guarantee Agreement shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Guarantee Trustee hereunder. The right, title and interest of the Guarantee
Trustee, as such, hereunder shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.

     (b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders,
subject to the terms of this Guarantee Agreement.

     (c) The Guarantee Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this Guarantee
Agreement against the Guarantee Trustee. During the occurrence of an Event of
Default the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Guarantee Agreement, and use the same degree of care and
skill in its exercise thereof, as a prudent person would exercise or use under
the circumstances in the conduct of his or her own affairs.

                                      -7-

<PAGE>

     (d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own wilful misconduct, except that:

          (i) Prior to the occurrence of any Event of Default and after the
     curing or waiving of all such Events of Default that may have occurred:

               (A) the duties and obligations of the Guarantee Trustee shall be
          determined solely by the express provisions of this Guarantee
          Agreement (including pursuant to Section 2.1), and the Guarantee
          Trustee shall not be liable except for the performance of such duties
          and obligations as are specifically set forth in this Guarantee
          Agreement; and

               (B) in the absence of bad faith on the part of the Guarantee
          Trustee, the Guarantee Trustee may conclusively rely, as to the truth
          of the statements and the correctness of the opinions expressed
          therein, upon any certificates or opinions furnished to the Guarantee
          Trustee and conforming to the requirements of this Guarantee
          Agreement; but in the case of any such certificates or opinions that
          by any provision hereof or of the Trust Indenture Act are specifically
          required to be furnished to the Guarantee Trustee, the Guarantee
          Trustee shall be under a duty to examine the same to determine whether
          or not they conform to the requirements of this Guarantee Agreement.

          (ii) The Guarantee Trustee shall not be liable for any error of
     judgment made in good faith by a Responsible Officer of the Guarantee
     Trustee, unless it shall be proved that the Guarantee Trustee was negligent
     in ascertaining the pertinent facts upon which such judgment was made.

          (iii) The Guarantee Trustee shall not be liable with respect to any
     action taken or omitted to be taken by it in good faith in accordance with
     the direction of the Holders of not less than a Majority in Liquidation
     Amount of the Trust Preferred Securities relating to the time, method and
     place of conducting any proceeding for any remedy available to the
     Guarantee Trustee, or exercising any trust or power conferred upon the
     Guarantee Trustee under this Guarantee Agreement.

          (iv) No provision of this Guarantee Agreement shall require the
     Guarantee Trustee to expend or risk its own funds or otherwise incur
     personal financial liability in the performance of any of its duties or in
     the exercise of any of its rights or powers, if the Guarantee Trustee shall
     have reasonable grounds for believing that the repayment of such funds or
     liability is not reasonably assured to it under the terms of this Guarantee
     Agreement or adequate indemnity against such risk or liability is not
     reasonably assured to it.

                                      -8-

<PAGE>

          SECTION 3.2. CERTAIN RIGHTS OF GUARANTEE TRUSTEE.

     (a) Subject to the provisions of Section 3.1:

          (i) The Guarantee Trustee may rely and shall be fully protected in
     acting or refraining from acting upon any resolution, certificate,
     statement, instrument, opinion, report, notice, request, direction,
     consent, order, bond, debenture, note, other evidence of indebtedness or
     other paper or document reasonably believed by it to be genuine and to have
     been signed, sent or presented by the proper party or parties.

          (ii) Any direction or act of the Guarantor contemplated by this
     Guarantee Agreement shall be sufficiently evidenced by an Officers'
     Certificate unless otherwise prescribed herein.

          (iii) Whenever, in the administration of this Guarantee Agreement, the
     Guarantee Trustee shall deem it desirable that a matter be proved or
     established before taking, suffering or omitting to take any action
     hereunder, the Guarantee Trustee (unless other evidence is herein
     specifically prescribed) may, in the absence of bad faith on its part,
     request and rely upon an Officers' Certificate which, upon receipt of such
     request from the Guarantee Trustee, shall be promptly delivered by the
     Guarantor.

          (iv) The Guarantee Trustee may consult with legal counsel, and the
     written advice or opinion of such legal counsel with respect to legal
     matters shall be full and complete authorization and protection in respect
     of any action taken, suffered or omitted to be taken by it hereunder in
     good faith and in accordance with such advice or opinion. Such legal
     counsel may be (but is not required to be) legal counsel to the Guarantor
     or any of its Affiliates and may be one of its employees. The Guarantee
     Trustee shall have the right at any time to seek instructions concerning
     the administration of this Guarantee Agreement from any court of competent
     jurisdiction.

          (v) The Guarantee Trustee shall be under no obligation to exercise any
     of the rights or powers vested in it by this Guarantee Agreement at the
     request or direction of any Holder unless such Holder shall have provided
     to the Guarantee Trustee such adequate security and indemnity as would
     satisfy a reasonable person in the position of the Guarantee Trustee
     against the costs, expenses (including attorneys' fees and expenses) and
     liabilities that might be incurred by it in complying with such request or
     direction, including such reasonable advances as may be requested by the
     Guarantee Trustee; provided that nothing contained in this Section
     3.2(a)(v) shall be taken to relieve the Guarantee Trustee, upon the
     occurrence of an Event of Default, of its obligation otherwise, in the
     absence of any such direction or request of Holders, to exercise the rights
     and powers vested in it by this Guarantee Agreement.

                                      -9-

<PAGE>

          (vi) The Guarantee Trustee shall not be bound to make any
     investigation into the facts or matters stated in any resolution,
     certificate, statement, instrument, opinion, report, notice, request,
     direction, consent, order, bond, debenture, note, other evidence of
     indebtedness or other paper or document, but the Guarantee Trustee, in its
     discretion, may make such further inquiry or investigation into such facts
     or matters as it may see fit.

          (vii) The Guarantee Trustee may execute any of the trusts or powers
     hereunder or perform any duties hereunder either directly or by or through
     its agents or attorneys, and the Guarantee Trustee shall not be responsible
     for any misconduct or negligence on the part of any such agent or attorney
     appointed by it with due care hereunder.

          (viii) Whenever in the administration of this Guarantee Agreement the
     Guarantee Trustee shall deem it desirable to receive instructions with
     respect to enforcing any remedy or right or taking any other action
     hereunder, the Guarantee Trustee (A) may request instructions from the
     Holders, (B) may refrain from enforcing such remedy or right or taking such
     other action until such instructions are received, and (C) shall be
     protected in acting in accordance with such instructions.

     (b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.

     SECTION 3.3. COMPENSATION; INDEMNITY; FEES.

     The Guarantor agrees:

     (a) to pay to the Guarantee Trustee from time to time such reasonable
compensation for all services rendered by it hereunder as may be agreed by the
Guarantor and the Guarantee Trustee from time to time (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);

     (b) except as otherwise expressly provided herein, to reimburse the
Guarantee Trustee upon request for all reasonable expenses, disbursements and
advances incurred or made by the Guarantee Trustee in accordance with any
provision of this Guarantee Agreement (including the reasonable compensation and
the expenses and disbursements of its agents and counsel), except any such

                                      -10-

<PAGE>

expense, disbursement or advance as may be attributable to its negligence or bad
faith; and

     (c) to indemnify the Guarantee Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence, wilful
misconduct or bad faith on the part of the Guarantee Trustee, arising out of or
in connection with the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.

The Guarantee Trustee will not claim or exact any lien or charge on any
Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement. The provisions of this Section 3.3 shall survive the termination of
this Guarantee Agreement or the resignation or removal of the Guarantee Trustee.

                                   ARTICLE IV

                                GUARANTEE TRUSTEE

     SECTION 4.1. GUARANTEE TRUSTEE; ELIGIBILITY.

     (a) There shall at all times be a Guarantee Trustee which shall:

          (i) not be an Affiliate of the Guarantor; and

          (ii) be a Person that is eligible pursuant to the Trust Indenture Act
     to act as such and has a combined capital and surplus of at least
     $50,000,000, and shall be a corporation meeting the requirements of Section
     310(a) of the Trust Indenture Act. If such corporation publishes reports of
     condition at least annually, pursuant to law or to the requirements of its
     supervising or examining authority, then, for the purposes of this Section
     4.1 and to the extent permitted by the Trust Indenture Act, the combined
     capital and surplus of such corporation shall be deemed to be its combined
     capital and surplus as set forth in its most recent report of condition so
     published.

     (b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in the
manner and with the effect set out in Section 4.2.

     (c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.

                                      -11-

<PAGE>

     SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE TRUSTEE.

     (a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.

     (b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.

     (c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.

     (d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.

                                   ARTICLE V

                                    GUARANTEE

     SECTION 5.1. GUARANTEE.

     The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer Trust), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer Trust may have or
assert, except the defense of payment. The Guarantor's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Guarantor to the Holders or by causing the Issuer Trust to pay such amounts
to the Holders.

     SECTION 5.2. WAIVER OF NOTICE AND DEMAND.

     The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the
Guarantee Trustee, the Issuer Trust or

                                      -12-

<PAGE>

any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.

     SECTION 5.3. OBLIGATIONS NOT AFFECTED.

     The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:

     (a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer Trust of any express or implied
agreement, covenant, term or condition relating to the Trust Preferred
Securities to be performed or observed by the Issuer Trust;

     (b) the extension of time for the payment by the Issuer Trust of all or any
portion of the Distributions (as defined in the Trust Agreement) (other than an
extension of time for payment of Distributions that results from the extension
of any interest payment period on the Debentures as provided in the Indenture),
Redemption Price (as defined in the Trust Agreement), Liquidation Distribution
(as defined in the Trust Agreement), or any other sums payable under the terms
of the Trust Preferred Securities or the extension of time for the performance
of any other obligation under, arising out of, or in connection with, the Trust
Preferred Securities;

     (c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Trust Preferred
Securities, or any action on the part of the Issuer Trust granting indulgence or
extension of any kind;

     (d) the voluntary or involuntary liquidation, dissolution, receivership,
insolvency, bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other similar
proceedings affecting, the Issuer Trust or any of the assets of the Issuer
Trust;

     (e) any invalidity of, or defect or deficiency in, the Trust Preferred
Securities;

     (f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or

     (g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor (other than payment of
the underlying obligation), it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and unconditional under
any and all circumstances.

                                      -13-

<PAGE>

There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the foregoing.

     SECTION 5.4. RIGHTS OF HOLDERS.

     The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Trust Preferred Securities have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Guarantee Trustee in respect of this Guarantee Agreement or exercising
any trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer Trust
or any other Person.

     SECTION 5.5. GUARANTEE OF PAYMENT.

     This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer Trust) or upon the distribution of Debentures to Holders as
provided in the Trust Agreement.

     SECTION 5.6. SUBROGATION.

     The Guarantor shall be subrogated to all rights (if any) of the Holders
against the Issuer Trust in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement; PROVIDED, HOWEVER, that the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Guarantee Agreement, if, at the time of any such
payment, any amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.

     SECTION 5.7. INDEPENDENT OBLIGATIONS.

     The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer Trust with respect to the Trust Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.

                                      -14-

<PAGE>

                                   ARTICLE VI

                           COVENANTS AND SUBORDINATION

     SECTION 6.1. SUBORDINATION.

     The obligations of the Guarantor under this Guarantee Agreement (other than
obligations to the Guarantee Trustee pursuant to Section 3.3) will constitute
unsecured obligations of the Guarantor and will rank subordinate and junior in
right of payment to all Senior Debt (as defined in the Indenture) of the
Guarantor to the extent and in the manner set forth in the Indenture with
respect to the Debentures, and the provisions of Article XIII of the Indenture
will apply, MUTATIS MUTANDIS, to the obligations of the Guarantor hereunder
(other than obligations to the Guarantee Trustee pursuant to Section 3.3). The
obligations of the Guarantor hereunder (other than obligations to the Guarantee
Trustee pursuant to Section 3.3) do not constitute Senior Debt (as defined in
the Indenture) of the Guarantor.

     SECTION 6.2. PARI PASSU GUARANTEES.

     (a) Subject to Section 6.2(b) below, the obligations of the Guarantor under
this Guarantee Agreement shall rank PARI PASSU with the obligations of the
Guarantor under (i) any similar guarantee agreements issued by the Guarantor on
behalf of the holders of preferred or capital securities issued by any Issuer
Trust (as defined in the Indenture), (ii) the Indenture and the Securities (as
defined therein) issued thereunder, (iii) the Expense Agreement (as defined in
the Trust Agreement) and any similar expense agreements entered into by the
Guarantor in connection with the offering of Trust Preferred Securities (as
defined in the Indenture) by any Issuer Trust (as defined in the Indenture), and
(iv) any other security, guarantee or other agreement or obligation that is
expressly stated to rank PARI PASSU with the obligations of the Guarantor under
this Guarantee Agreement or with any obligation that ranks PARI PASSU with the
obligations of the Guarantor under this Guarantee Agreement.

     (b) Nothing herein shall be deemed to subordinate obligations owing to the
Guarantee Trustee pursuant to Section 3.3. The person service as Guarantee
Trustee, acting in its individual capacity, shall be entitled to its rights
under Section 3.3 to the same extent as any other holder of Senior Debt.

                                  ARTICLE VII

                                   TERMINATION

     SECTION 7.1. TERMINATION.

     This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price (as defined in the Trust
Agreement) of all

                                      -15-

<PAGE>

Trust Preferred Securities, (ii) the distribution of Debentures to the Holders
in exchange for all of the Trust Preferred Securities or (iii) full payment of
the amounts payable in accordance with Article IX of the Trust Agreement upon
liquidation of the Issuer Trust. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder is required to repay any sums paid with respect to
the Trust Preferred Securities or this Guarantee Agreement.

                                  ARTICLE VIII

                                  MISCELLANEOUS

     SECTION 8.1. SUCCESSORS AND ASSIGNS.

     All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Trust Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article VIII of the
Indenture and pursuant to which the successor or assignee agrees in writing to
perform the Guarantor's obligations hereunder, the Guarantor shall not assign
its obligations hereunder, and any purported assignment other than in accordance
with this provision shall be void.

     SECTION 8.2. AMENDMENTS.

     Except with respect to any changes that do not adversely affect the rights
of the Holders in any material respect (in which case no consent of the Holders
will be required), this Guarantee Agreement may only be amended with the prior
approval of the Holders of not less than a Majority in Liquidation Amount of the
Trust Preferred Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.

     SECTION 8.3. NOTICES.

     Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:

                                      -16-

<PAGE>

     (a) if given to the Guarantor, to the address or telecopy number set forth
below or such other address or telecopy number as the Guarantor may give notice
to the Guarantee Trustee and the Holders:

                  Seacoast Financial Services Corporation
                  One Compass Place
                  New Bedford, Massachusetts  02740
                  Attention:  Treasurer
                  Facsimile:  (508) 994-4874

     (b) if given to the Guarantee Trustee, at the address or telecopy number
set forth below or such other address or telecopy number as the Guarantee
Trustee may give notice to the Guarantor and Holders:

                  State Street Bank and Trust Company
                  2 Avenue de Lafayette
                  Boston, Massachusetts 02111-1724
                  Attention:  Corporate Trust Department
                              (Seacoast Capital Trust I)

         with a copy to:

                  Seacoast Capital Trust I
                  c/o Seacoast Financial Services Corporation
                  One Compass Place
                  New Bedford, Massachusetts  02740
                  Attention:  Treasurer
                  Telecopy:  (508) 994-4874

     (c) if given to any Holder, at the address set forth on the books and
records of the Issuer Trust.

     All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid.

     SECTION 8.4. BENEFIT.

     This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Trust Preferred Securities.

     SECTION 8.5. GOVERNING LAW.

     THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.

     SECTION 8.6. COUNTERPARTS.

     This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                                      -17-

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Guarantee
Agreement as of the day and year first above written.

                                    SEACOAST FINANCIAL SERVICES CORPORATION

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                    STATE STREET BANK AND TRUST COMPANY,
                                        as Guarantee Trustee

                                    By:
                                       ----------------------------------------
                                       Name:
                                       Title:

                                      -18-<Page>

                                                                    Exhibit 10.9

                  =============================================

             THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

                  =============================================

                            FLEET RETAIL FINANCE INC.
                           AS ADMINISTRATIVE AGENT AND
                                COLLATERAL AGENT

                  =============================================

                            REVOLVING CREDIT LENDERS
                                  NAMED HEREIN

                  =============================================

                          BACK BAY CAPITAL FUNDING LLC
                              THE TRANCHE B LENDER

                         WELLS FARGO RETAIL FINANCE, LLC
                              AS SYNDICATION AGENT

                   NATIONAL CITY COMMERCIAL FINANCE, INC. AND
                             HELLER FINANCIAL, INC.
                           AS CO-DOCUMENTATION AGENTS

                  =============================================

                                  DESIGNS, INC.

                          THE BORROWERS' REPRESENTATIVE
                                      FOR:
                           THE BORROWERS NAMED HEREIN

                  =============================================

                                  MAY 14, 2002

<Page>

<Table>
<S>         <C>                                                                                                 <C>
ARTICLE 1 - DEFINITIONS:..........................................................................................2

 ARTICLE 2 - THE REVOLVING CREDIT: ..............................................................................38
         2.1 .    Establishment of  Revolving Credit.............................................................38
         2.2.     Advances in Excess of Borrowing Base (OverLoans)...............................................39
         2.3.     Initial Reserves. Changes to Reserves..........................................................40
         2.4.     Risks of Value of Collateral...................................................................40
         2.5.     Commitment to Make Revolving Credit Loans and Support Letters of Credit........................40
         2.6.     Revolving Credit Loan Requests.................................................................40
         2.7      Making of Revolving Credit Loans...............................................................42
         2.8.     SwingLine Loans................................................................................43
         2.9.     The Loan Account...............................................................................43
         2.10.    The Revolving Credit Notes.....................................................................44
         2.11.    Payment of The Loan Account....................................................................45
         2.12.    Interest on Revolving Credit Loans. ...........................................................46
         2.13.    Revolving Credit Commitment Fee................................................................46
         2.14.    Administrative Agent's Fee.....................................................................47
         2.15.    Unused Line Fee................................................................................47
         2.16.    Revolving Credit Early Termination Fee.........................................................47
         2.17.    Intentionally omitted..........................................................................47
         2.18.    Agents' and Lenders' Discretion................................................................47
         2.19.    Procedures For Issuance of L/C's...............................................................48
         2.20.    Fees For L/C's.................................................................................49
         2.21.    Concerning L/C's...............................................................................50
         2.22.    Changed Circumstances..........................................................................52
         2.23.    Designation of Borrowers' Representative as Borrowers'  Agent..................................53
         2.24.    Lenders' Commitments...........................................................................53
         2.25.    References to Original Agreement...............................................................55

ARTICLE 3 - THE TRANCHE B LOAN:..................................................................................55
         3.1.     The  Tranche B Loan............................................................................55
         3.2.     The Tranche B Note.............................................................................55
         3.3.     Payment of Principal of the Tranche B Loan .  .................................................56
         3.4      Interest On The Tranche B Loan. ...............................................................56
         3.5.     Tranche B Commitment Fee and Tranche B Monitoring Fee..........................................57
         3.6.     Payments On Account of Tranche B Loan .........................................................58

ARTICLE 4 - CONDITIONS PRECEDENT: ...............................................................................58
         4.1        Due Diligence................................................................................58
         4.2.     Opinion........................................................................................58
         4.3.     Additional Documents...........................................................................59
         4.4.     Officers' Certificates.........................................................................59
         4.5.     Casual Male Acquisition........................................................................59
         4.6.     Representations and Warranties.................................................................59
         4.7.     Minimum Day One Excess Availability............................................................59
         4.8.     All Fees and Expenses Paid.....................................................................59
         4.9      INVESTMENT.  ..................................................................................60
         4.10              Collateral, Etc.  ....................................................................60
         4.11.    No Default.....................................................................................60
         4.12.    Financial Statements; Legal Due Diligence; No Adverse Change...................................60

                                                                                                            Page ii

<Page>

         4.14.    Benefit of Conditions Precedent................................................................61

ARTICLE 5 - GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES:...................................................61
         5.1.     Payment and Performance of Liabilities.........................................................62
         5.2.     Due Organization. Authorization. No Conflicts..................................................62
         5.3.     Trade Names....................................................................................63
         5.4.     Infrastructure.................................................................................63
         5.5.     Locations......................................................................................64
         5.6.     Stores.........................................................................................64
         5.7.     Title to Assets................................................................................65
         5.8.     Indebtedness...................................................................................65
         5.9.     Insurance......................................................................................66
         5.10.    Licenses.......................................................................................67
         5.11.    Leases.........................................................................................67
         5.12.    Requirements of Law............................................................................67
         5.13.    Labor Relations................................................................................67
         5.14.    Maintain Properties............................................................................68
         5.15.    Taxes..........................................................................................69
         5.16.    No Margin Stock................................................................................69
         5.17.    ERISA..........................................................................................69
         5.18.    Hazardous Materials............................................................................70
         5.19.    Litigation.....................................................................................70
         5.20.    Dividends. Investments. Entity Action..........................................................70
         5.21.    Permitted Acquisitions.........................................................................71
         5.22.    Loans..........................................................................................72
         5.23.    Restrictions on Sale of Collateral; License Agreements.........................................72
         5.24.    Protection of Assets...........................................................................73
         5.25.    Line of Business...............................................................................73
         5.26.    Affiliate Transactions.........................................................................74
         5.27.    Further Assurances.............................................................................74
         5.28.    Adequacy of Disclosure.........................................................................75
         5.29.    No Restrictions on Liabilities.................................................................75
         5.30.    Other Covenants................................................................................75
         5.31.    Inventory Purchasing...........................................................................76

ARTICLE 6 FINANCIAL REPORTING AND PERFORMANCE COVENANTS:.........................................................76
         6.1.     Maintain Records...............................................................................76
         6.2.     Access to Records..............................................................................76
         6.3.     Prompt Notice to Administrative Agent..........................................................77
         6.4.     Borrowing Base Certificate.....................................................................78
         6.5.     Weekly and Monthly Reports.....................................................................79
         6.6.     Quarterly Reports..............................................................................79
         6.7.     Annual Reports.................................................................................79
         6.8.     Officers' Certificates.........................................................................80
         6.9.     Inventories, Appraisals, and Audits............................................................81
         6.10.    Additional Financial Information...............................................................82
         6.11.    Financial Performance Covenants................................................................82

ARTICLE 7 - USE OF COLLATERAL:...................................................................................83
         7.1.     Use of Inventory Collateral....................................................................83
         7.2.     Inventory Quality..............................................................................83

                                                                                                           Page iii
<Page>

         7.3.     Adjustments and Allowances.....................................................................83
         7.4.     Validity of Accounts...........................................................................83
         7.5.     Notification to Account Debtors................................................................84

ARTICLE 8 - CASH MANAGEMENT. PAYMENT OF LIABILITIES: ............................................................84
         8.1      Depository Accounts............................................................................84
         8.2.     Credit Card Receipts...........................................................................85
         8.3.     The Concentration, Blocked, and Operating Accounts.............................................85
         8.4.     Proceeds and Collections.......................................................................85
         8.5.     Payment of Liabilities.........................................................................86
         8.6.     The Operating Account..........................................................................87

ARTICLE 9 - GRANT OF SECURITY INTEREST:..........................................................................88
         9.1.     Grant of Security Interest.....................................................................88
         9.2.     Extent and Duration of Security Interest; Notice...............................................89

ARTICLE 10 - COLLATERAL AGENT AS ATTORNEY-IN-FACT:...............................................................89
         10.1.    Appointment as Attorney-In-Fact................................................................89
         10.2.    No Obligation to Act...........................................................................90

ARTICLE 11 - EVENTS OF DEFAULT:..................................................................................90
         11.1.    Failure to Pay the Revolving Credit or the Tranche B Loan......................................91
         11.2.    Failure To Make Other Payments.................................................................91
         11.3.    Failure to Perform Covenant or Liability (No Grace Period).....................................91
         11.4.    Financial Reporting Requirements...............................................................91
         11.5.    Failure to Perform Covenant or Liability (Grace Period)........................................92
         11.6.    Tranche B Loan Action Event Acceleration.......................................................92
         11.7.    Misrepresentation..............................................................................92
         11.8.    Acceleration of Other Debt; Breach of Lease. ..................................................92
         11.9.    Default Under Other Agreements.................................................................92
         11.10.   Uninsured Casualty Loss........................................................................93
         11.11.   Attachment. Judgment. Restraint of Business....................................................93
         11.12.   Canton Mortgage Default........................................................................93
         11.13.   Indictment - Forfeiture........................................................................93
         11.14.   Challenge to Loan Documents....................................................................93
         11.15.   Change in Control..............................................................................94
         11.16.   Business Failure...............................................................................94
         11.17.   Bankruptcy.....................................................................................94

ARTICLE 12 - RIGHTS AND REMEDIES UPON DEFAULT:...................................................................95
         12.1     Acceleration...................................................................................95
         12.2.    Rights of Enforcement..........................................................................95
         12.3.    Sale of Collateral.............................................................................96
         12.4.    Occupation of Business Location................................................................97
         12.5.    Grant of Nonexclusive License..................................................................97
         12.6.    Assembly of Collateral.........................................................................98
         12.7.    Rights and Remedies............................................................................98

ARTICLE 13 - REVOLVING CREDIT FUNDINGS AND DISTRIBUTIONS:........................................................98
         13.1.    Revolving Credit Funding Procedures............................................................98

                                                                                                            Page iv

<Page>

         13.2.    SwingLine Loans................................................................................98
         13.3.    Administrative Agent's Covering of Fundings:...................................................99
         13.4.    Ordinary Course Distributions: Revolving Credit...............................................101
         13.5.    Ordinary Course Distributions : The Tranche B Loan............................................103

ARTICLE 14 - ACCELERATION AND LIQUIDATION:......................................................................103
         14.1.    Acceleration Notices..........................................................................103
         14.2.    Mandatory Acceleration Right of The Tranche B Lender:.........................................104
         14.3.    Acceleration..................................................................................104
         14.4.    Initiation of Liquidation.....................................................................105
         14.5.    Actions At and  Following Initiation of Liquidation...........................................105
         14.6.    Collateral Agent's Conduct of Liquidation.....................................................105
         14.7.    Distribution of Liquidation Proceeds:.........................................................106
         14.8.    Relative Priorities To Proceeds of Liquidation ...............................................106

ARTICLE 15 - THE AGENTS:            ............................................................................108
         15.1.    Appointment of The Agents   ..................................................................108
         15.2.    Responsibilities of Agents ...................................................................108
         15.3.    Concerning Distributions By the Agents .......................................................109
         15.4.    Dispute Resolution:...........................................................................110
         15.5.    Distributions of Notices and of Documents.....................................................110
         15.6.    Confidential Information......................................................................110
         15.7.    Reliance by Agents ...........................................................................111
         15.8.    Non-Reliance on Agents and Other Lenders......................................................111
         15.9.    Indemnification...............................................................................112
         15.10.   Resignation of Agent..........................................................................112

 ARTICLE 16 - ACTION BY AGENTS - CONSENTS - AMENDMENTS - WAIVERS:...............................................113
         16.1.    Administration of Credit Facilities...........................................................113
         16.2.    Actions Requiring or On Direction of Majority Lenders.........................................114
         16.3.    Actions Requiring or On Direction of SuperMajority Revolving Credit  Lenders..................114
         16.4.    Action Requiring Certain Consent .............................................................114
         16.5.    Actions Requiring or Directed By Unanimous Consent............................................116
         16.6.    Actions Requiring SwingLine Lender Consent....................................................117
         16.7.    Actions Requiring Tranche B  Lender Consent...................................................117
         16.8.    Actions Requiring Agents' Consent.............................................................118
         16.9.    Miscellaneous Actions.........................................................................118
         16.10.   Actions Requiring Borrowers' Representative's Consent.........................................119
         16.11.   NonConsenting Revolving Credit Lender.........................................................119
         16.12.   The BuyOut:...................................................................................120

ARTICLE 17 -  ASSIGNMENTS BY LENDERS: ..........................................................................121
         17.1.    Assignments and Assumptions:..................................................................121
         17.2.    Assignment Procedures.........................................................................121
         17.3.    Effect of Assignment..........................................................................122

ARTICLE 18 - NOTICES:...........................................................................................122
         18.1.    Notice Addresses..............................................................................122
         18.2.    Notice Given..................................................................................124
         18.3.    Wire Instructions.............................................................................124

                                                                                                             Page v
<Page>

ARTICLE 19 - TERM:..............................................................................................124
         19.1.    Termination of Revolving Credit...............................................................124
         19.2.    Actions On Termination........................................................................125

ARTICLE 20 - GENERAL:...........................................................................................126
         20.1.    Protection of Collateral......................................................................126
         20.2.    Publicity.....................................................................................126
         20.3.    Successors and Assigns........................................................................126
         20.4.    Severability..................................................................................126
         20.5.    Amendments.  Course of Dealing................................................................126
         20.6.    Power of Attorney.............................................................................127
         20.7.    Application of Proceeds.......................................................................127
         20.8.    Increased Costs...............................................................................127
         20.9.    Costs and Expenses Of Agents and Lenders .....................................................128
         20.10.   Copies and Facsimiles.........................................................................128
         20.11.   Massachusetts Law.............................................................................129
         20.12.   Indemnification. .............................................................................129
         20.13.   Rules of Construction.........................................................................129
         20.14.   Intent........................................................................................131
         20.15.   Participations................................................................................131
         20.16.   Right of Set-Off..............................................................................132
         20.17.   Pledges To Federal Reserve Banks: ............................................................132
         20.18.   Maximum Interest Rate.........................................................................132
         20.19.   Waivers. .....................................................................................132

                                                                                                            Page vi
                                                                                                                 vi
</Table>

<Page>

                                EXHIBITS

         1.0(a)       :   Borrowers
         1.0(b)       :   Guarantors
         1.0(c)       :   Casual Male Companies
         1.0(d)       :   Designs Inc. Companies
         1.1          :   Permitted Encumbrances
         2.8          :   SwingLine Note
         2.10         :   Revolving Credit Note
         2.24         :   Revolving Credit Lenders' Commitments
         3.2          :   Tranche B Note
         5.2          :   Loan Parties' Information
         5.3          :   Trade Names
         5.4(b)       :   Exceptions to Property Rights
         5.5          :   Locations, Leases, and Landlords
         5.7(b)       :   Consigned Inventory
         5.7(c)(ii)   :   Equipment Usage Agreement
         5.9          :   Insurance Policies
         5.11         :   Capital Leases
         5.13(a)      :   Labor Relations
         5.19         :   Litigation
         5.28(b)      :   Contingent Obligations
         6.4          :   Borrowing Base Certificate
         6.5          :   Weekly and Monthly Financial Reporting Requirements
         8.1          :   DDA's
         8.2          :   Credit Card Arrangements
         17.1         :   Assignment / Assumption

                                                                        Page vii

<Page>

================================================================================

THIRD AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT                            FLEET RETAIL FINANCE INC.
                                             ADMINISTRATIVE AND COLLATERAL AGENT

================================================================================

                                                                    May 14, 2002

         THIS THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (the
"AGREEMENT") is made amongst

                   Fleet Retail Finance Inc. (in such capacity, the
         "ADMINISTRATIVE AGENT"), a Delaware corporation with offices at 40
         Broad Street, Boston, Massachusetts 02109, as Administrative Agent for
         the ratable benefit of (i) the Collateral Agent, (ii) the "REVOLVING
         CREDIT LENDERS" who are, at present, those financial institutions
         identified on the signature pages of this Agreement and any Person who
         becomes a "Revolving Credit Lender" in accordance with the provisions
         of Article 17.1 of this Agreement and (iii) the Tranche B Lender,

                  and

                  Fleet Retail Finance Inc. (in such capacity, the "COLLATERAL
         AGENT"), a Delaware corporation with offices at 40 Broad Street,
         Boston, Massachusetts 02109, as Collateral Agent for the ratable
         benefit of (i) the Administrative Agent, (ii) the Revolving Credit
         Lenders and (iii) the Tranche B Lender,

         and

                  The Revolving Credit Lenders;

                  and

                  Back Bay Capital Funding LLC (in such capacity, with any
         successor or assign, the "TRANCHE B LENDER"), a limited liability
         company with offices at 40 Broad Street, Boston, Massachusetts 02109,

                  and

                  Designs, Inc. ( in such capacity, the "BORROWERS'
         REPRESENTATIVE"), a Delaware corporation with its principal executive
         offices at 66 B Street, Needham, Massachusetts 02194 as agent for the
         Persons named on EXHIBIT 1.0(A) annexed hereto (individually, a
         "BORROWER" and collectively, the "BORROWERS").

         WHEREAS, on December 7, 2000, Designs, Inc. and FRFI entered into a
Second Amended and Restated Loan and Security Agreement (as amended and in
effect, the "ORIGINAL AGREEMENT"), pursuant to which, among other things, FRFI
agreed to make Revolving Loans to Designs, Inc.;

                                                                          Page 1

<Page>

         WHEREAS, Designs, Inc. has requested that FRFI amend the Original
Agreement in certain respects in order to, among other thing, add additional
lenders and borrowers, increase the Revolving Credit amount, make a term loan
and extend the Maturity Date of the Original Agreement;

         WHEREAS, FRFI is willing to amend the Original Agreement on the terms
set forth herein; and

         WHEREAS, the parties hereto desire to amend and restate the Original
Agreement in its entirety.

         NOW THEREFORE, Designs, Inc. and FRFI hereby agree that the Original
Agreement shall be amended and restated in its entirety as follows:

                                   WITNESSETH:

ARTICLE 1 - DEFINITIONS:

         As used herein, the following terms have the following meanings or are
defined in the section of this Agreement so indicated:

         "ACCELERATION": The making of demand or declaration that any
                  indebtedness, not otherwise due and payable, is due and
                  payable. Derivations of the word "Acceleration" (such as
                  "Accelerate") are used with like meaning in this Agreement.

         "ACCELERATION NOTICE": Written notice as follows:

                           (a) From the Administrative Agent to the Collateral
                  Agent and the Revolving Credit Lenders, as provided in Section
                  14.1(a).

                           (b) From the SuperMajority Revolving Credit Lenders
                  to the Administrative Agent, as provided in Section 14.1(b).

                           (c) From the Tranche B Lender to the Administrative
                  Agent, as provided in Section 14.2(c).

         "ACCOUNT DEBTOR": Has the meaning given that term in the UCC.

         "ACCOUNTS" and "ACCOUNTS RECEIVABLE" include, without limitation,
                  "accounts" as defined in the UCC, and also all: accounts,
                  accounts receivable, receivables, and rights to payment
                  (whether or not earned by performance) for: property that has
                  been or is to be sold, leased, licensed, assigned, or
                  otherwise disposed of; services rendered or to be rendered; a
                  policy of insurance issued or to be issued; a secondary
                  obligation incurred or to be incurred; energy provided or to
                  be provided; for the use or hire of a vessel; arising out of
                  the use of a credit or charge card or information contained on
                  or used with that card;

                                                                          Page 2
<Page>

                  winnings in a lottery or other game of chance; and also all
                  Inventory which gave rise thereto, and all rights associated
                  with such Inventory, including the right of stoppage in
                  transit; all reclaimed, returned, rejected or repossessed
                  Inventory (if any) the sale of which gave rise to any Account.

         "ACH": Automated clearing house.

         "ACQUISITION": The purchase or other acquisition, by a Loan Party (no
                  matter how structured in one transaction or in a series of
                  transactions), of: (a) equity interests in any other Person
                  which would constitute or which results in a Change in Control
                  of such other Person, or (b) such of the assets of any Person
                  as would permit a Loan Party to operate one or more retail
                  locations of such Person or to conduct other business
                  operations with such assets (provided, however, none of the
                  following shall constitute an "Acquisition": purchases of
                  inventory in the ordinary course of a Loan Party's business;
                  purchases, leases or other acquisitions of Equipment in the
                  ordinary course of a Loan Party's business; and Capital
                  Expenditures permitted hereunder).

         "ADMINISTRATIVE AGENT": Defined in the Preamble.

         "ADMINISTRATIVE AGENT'S COVER": Defined in Section 13.3(c)(i).

         "ADMINISTRATIVE AGENT'S FEE": Is defined in Section 2.14.

         "AFFILIATE": The following:

                           (a) With respect to any two Persons, a relationship
                  in which (i) one holds, directly or indirectly, not less than
                  twenty five percent (25%) of the capital stock, beneficial
                  interests, partnership interests, or other equity interests of
                  the other; or (ii) one has, directly or indirectly, the right,
                  under ordinary circumstances, to vote for the election of a
                  majority of the directors (or other body or Person who has
                  those powers customarily vested in a board of directors of a
                  corporation); or (iii) not less than twenty five percent (25%)
                  of their respective ownership is directly or indirectly held
                  by the same third Person.

                           (b) Any Person which: is a parent, brother-sister or
                  Subsidiary of a Loan Party; could have such enterprise's tax
                  returns or financial statements consolidated with that Loan
                  Party's; could be a member of the same controlled group of
                  corporations (within the meaning of Section 1563(a)(1), (2)
                  and (3) of the Internal Revenue Code of 1986, as

                                                                          Page 3
<Page>

                  amended from time to time) of which any Loan Party is a
                  member; or controls or is controlled by any Loan Party.

         "AGENT": When not preceded by "Administrative" or "Collateral", the
                  term "Agent" refers collectively and individually to the
                  Administrative Agent and the Collateral Agent.

         "AGENTS' RIGHTS AND REMEDIES": Is defined in Section 12.7.

         "APPLICABLE LAW": As to any Person: (i) All statutes, rules,
                  regulations, orders, or other requirements having the force of
                  law and (ii) all court orders and injunctions, arbitrator's
                  decisions, and/or similar rulings, in each instance ((i) and
                  (ii)) of or by any federal, state, municipal, and other
                  governmental authority, or court, tribunal, panel, or other
                  body which has or claims jurisdiction over such Person, or any
                  property of such Person, or of any other Person for whose
                  conduct such Person would be responsible.

         "APPLICABLE MARGIN": The following percentages for Base Margin Loans
                  and Libor Loans based upon the following criteria:

<Table>
<Caption>
LEVEL       AVERAGE EXCESS AVAILABILITY                LIBOR MARGIN     BASE MARGIN
            Less Than     Equal to Or Greater Than
<S>         <C>           <C>                          <C>              <C>
I                         $50,000,000                  2.25%            0.00%
II          $50,000,000   $25,000,000                  2.50%            .25%
III         $25,000,000   $15,000,000                  2.75%            .50%
IV          $15,000,000                                3.00%            .75%
</Table>

                  The Applicable Margin shall initially be established at Level
                  III. Thereafter, the Applicable Margin shall be adjusted
                  quarterly on the first day of each calendar quarter,
                  commencing with the Fiscal quarter June, 2003, based upon the
                  average Excess Availability during the prior quarter, PROVIDED
                  that in no event shall the Applicable Margin be established at
                  Level I or Level II during the first twelve (12) months
                  subsequent to the Closing Date. Upon the occurrence of an
                  Event of Default, the Applicable Margin may, at the option of
                  the Administrative Agent, be immediately increased to the
                  percentages set forth in Level IV (even if the Excess
                  Availability requirements for another Level have been met) and
                  interest shall be determined in the manner set forth in
                  Section 2.12(f).

                                                                          Page 4
<Page>

         "APPRAISED INVENTORY LIQUIDATION VALUE": The product of (a) (i) the
                  Retail of Eligible Inventory (net of Inventory Reserves) of
                  the Casual Male Companies plus (ii) the Cost of Eligible
                  Inventory (net of Inventory Reserves) of the Designs, Inc.
                  Companies MULTIPLIED by (b) that percentage, determined from
                  the then most recent appraisal of the Loan Parties' Inventory
                  undertaken at the request of the Administrative Agent, to
                  reflect the appraiser's estimate of the net recovery on the
                  Loan Parties' Inventory in the event of an in-store
                  liquidation of that Inventory.

         "ASSIGNEE REVOLVING CREDIT LENDER": Defined in Section 17.1(a).

         "ASSIGNING REVOLVING CREDIT LENDER": Defined in Section 17.1(a).

         "ASSIGNMENT AND ACCEPTANCE": Defined in Section 17.2.

         "AVAILABILITY": The least of (a), (b), or (c), where:

                           (a) is the result of

                                    (i)   The Revolving Credit Ceiling

                                          MINUS

                                    (ii)  The aggregate unpaid balance of the
                                          Loan Account

                                          MINUS

                                    (iii) The aggregate undrawn Stated Amount of
                                          all then outstanding L/C's.

                           (b) is the result of

                                    (i)   The Borrowing Base MINUS

                                    (ii)  The aggregate unpaid balance of the
                                          Loan Account

                                          MINUS

                                    (iii) The aggregate undrawn Stated Amount of
                                          all then outstanding L/C's.

                                          MINUS

                                    (iv)  The aggregate of the Availability
                                          Reserves.

                           (c) is the result of

                                                                          Page 5
<Page>

                                    (i)   The Tranche B Borrowing Base MINUS

                                    (ii)  The aggregate unpaid balance of the
                                          Loan Account

                                          MINUS

                                    (iii) The aggregate undrawn Stated Amount of
                                          all then outstanding L/C's.

                                          MINUS

                                    (iv)  The aggregate of the Availability
                                          Reserves.

                                          MINUS

                                    (v)   The then unpaid principal balance of
                                          the Tranche B Loan and all accrued but
                                          unpaid interest thereon.

         "AVAILABILITY RESERVES": Such reserves as the Administrative Agent from
                  time to time determines in the Administrative Agent's
                  reasonable discretion as being appropriate to reflect the
                  impediments to the Collateral Agent's ability to realize upon
                  the Collateral. Without limiting the generality of the
                  foregoing, Availability Reserves may include (but are not
                  limited to) reserves based on the following:

                           (i)      Rent (but only if a landlord's waiver,
                                    acceptable to the Administrative Agent, has
                                    not been received by the Administrative
                                    Agent).

                           (ii)     Customer Credit Liabilities.

                           (iii)    Taxes and other governmental charges,
                                    including, ad valorem, personal property,
                                    and other taxes which might have priority
                                    over the Collateral Interests of the
                                    Collateral Agent in the Collateral.

                           (iv)     L/C Landing Costs.

                           (v)      Gift cards or gift certificates.

         "BANKRUPTCY BREACH": The occurrence of any Event of Default described
                  in any of Sections 11.16, 11.17 and 11.18.

         "BANKRUPTCY CODE": Title 11, U.S.C., as amended from time to time.

         "BANKRUPTCY COURT": United States Bankruptcy Court for the Southern
                  District of New York.

                                                                          Page 6
<Page>

         "BASE": The Base Rate announced from time to time by Fleet National
                  Bank (or any successor in interest to Fleet National Bank). In
                  the event that said bank (or any such successor) ceases to
                  announce such a rate, "Base" shall refer to that rate or index
                  announced or published from time to time as the Administrative
                  Agent, in good faith, designates as the functional equivalent
                  to said Base Rate. Any change in "Base" shall be effective,
                  for purposes of the calculation of interest due hereunder,
                  when such change is made effective generally by the bank on
                  whose rate or index "Base" is being set.

         "BASE MARGIN": As determined from the definition of Applicable
                  Margin.

         "BASE MARGIN LOAN": Each Revolving Credit Loan while bearing
                  interest at the Base Margin Rate.

         "BASE MARGIN RATE": The aggregate of Base PLUS the then applicable
                  Base Margin.

         "BBC": Back Bay Capital Funding LLC.

         "BLOCKED ACCOUNT": Any account, including, without limitation, any DDA,
                  over which one or more of the Agents exercise control pursuant
                  to a Blocked Account Agreement.

         "BLOCKED ACCOUNT AGREEMENT": An Agreement, in form satisfactory to the
                  Administrative Agent, which recognizes the Collateral Agent's
                  Collateral Interest in the contents of the account which is
                  the subject of such Agreement and provides that such contents
                  shall be transferred only to the Concentration Account or as
                  otherwise instructed by the Collateral Agent.

         "BORROWER" and "BORROWERS": Defined in the Preamble.

         "BORROWERS' REPRESENTATIVE": Defined in the Preamble.

         "BORROWING BASE": The aggregate of the following:

                           (a)      The lesser of

                                             (i) The (x) product of the Retail
                                    of Eligible Inventory (net of Inventory
                                    Reserves) of the Casual Male Companies
                                    multiplied by the

                                                                          Page 7
<Page>

                                    Revolving Credit Casual Male Companies
                                    Inventory Advance Rate and (y) product of
                                    the Cost of Eligible Inventory (net of
                                    Inventory Reserves) of the Designs, Inc.
                                    Companies multiplied by the Revolving Credit
                                    Designs, Inc. Companies Inventory Advance
                                    Rate, or

                                             (ii) 85% of the Appraised Inventory
                                    Liquidation Value.

                           PLUS

                           (b)      The face amount of Eligible Credit Card
                                    Receivables multiplied by the Credit Card
                                    Advance Rate.

                           PLUS

                           (c)      The face amount of Eligible Receivables (net
                                    of Receivables Reserves) multiplied by the
                                    Receivables Advance Rate.

         "BORROWING BASE CERTIFICATE": Is defined in Section 6.4.

         "BUSINESS DAY": Any day other than (a) a Saturday or Sunday; (b) any
                  day on which banks in Boston, Massachusetts generally are not
                  open to the general public for the purpose of conducting
                  commercial banking business; or (c) a day on which the
                  principal office of the Administrative Agent is not open to
                  the general public to conduct business.

         "BUSINESS PLAN": The Loan Parties' business plan dated February 8,
                  2002, as updated from time to time by the Borrowers'
                  Representative pursuant to this Agreement.

         "BUYOUT": The consummation of a transaction described in Section 16.12.

         "CANTON MORTGAGE": The mortgage made by JBAK Canton Realty, Inc., to
                  The Chase Manhattan Bank, dated as of December 30, 1996,
                  encumbering the Canton Warehouse.

         "CANTON WAREHOUSE": That certain real property located at 555 Turnpike
                  Street, Canton, Massachusetts 02021.

         "CAPITAL EXPENDITURES": The expenditure of funds or the incurrence of
                  liabilities which may be capitalized in accordance with GAAP.

         "CAPITAL LEASE": Any lease which may be capitalized in accordance with
                  GAAP.

                                                                          Page 8
<Page>

         "CASUAL MALE ACQUISITION": The acquisition by Designs, Inc. and
                  certain of its Affiliates of substantially all of the assets
                  of Casual Male Corp. and its subsidiaries in accordance with
                  the terms of the Casual Male Acquisition Agreement.

         "CASUAL MALE ACQUISITION AGREEMENT": The Asset Purchase Agreement
                  dated as of April 26, 2002 among Buckmin Inc., Casual Male
                  Corp., Elm Equipment Corp., ISAB Inc., JBAK Canton Realty,
                  Inc., JBI Apparel Inc., JBI Holding Company Inc., JBI Inc., LP
                  Innovations Inc., Morse Shoe Inc., Morse Shoe International
                  Inc., Spencer Companies Inc., TCM Holding Company Inc., TCMB&T
                  Inc., The Casual Male Inc., White Cap Footwear, Inc., WGS
                  Corp., and Designs, Inc. and certain of its Affiliates, as
                  amended through the date of this Agreement.

         "CASUAL MALE APPROVAL ORDER": The order entered by the Bankruptcy
                  Court pursuant to 11 USC Section 363 approving the Casual Male
                  Acquisition Agreement and authorizing the purchase and sale
                  pursuant to the Casual Male Acquisition Agreement.

         "CASUAL MALE CORP.": Casual Male Corp.

         "CASUAL MALE COMPANIES": The Persons listed on EXHIBIT 1.0(C) annexed
                  hereto.

         "CHANGE IN CONTROL": The occurrence of any of the following:

                  (a) The acquisition, by any group of persons (within the
                  meaning of the Securities Exchange Act of 1934, as amended) or
                  by any Person, of beneficial ownership (within the meaning of
                  Rule 13d-3 of the Securities and Exchange Commission) of 25%
                  or more of the issued and outstanding capital stock of
                  Designs, Inc. having the right, under ordinary circumstances,
                  to vote for the election of directors of Designs, Inc.

                  (b) At any time, (a) occupation of a majority of the seats
                  (other than vacant seats) on the board of directors of
                  Designs, Inc. by Persons who were neither (i) nominated by the
                  board of directors of Designs, Inc. nor (ii) appointed by
                  directors so nominated.

                  (c) The persons who are directors of Designs, Inc. as of the
                  Closing Date cease, for any reason other than death,
                  disability, or resignation in the ordinary course (and not in
                  connection with a proxy contest or similar occurrence), to
                  constitute a majority of the board of directors of Designs,
                  Inc.

                                                                          Page 9
<Page>

                  (d) The failure by Designs, Inc. (i) to own directly 100% of
                  the issued and outstanding capital stock of Designs Apparel,
                  Inc. or (ii) to own, directly or indirectly, 100% of the
                  issued and outstanding capital stock of all other Loan
                  Parties.

         "CHATTEL PAPER": Has the meaning given that term in the UCC.

         "CLOSING DATE": May 14, 2002.

         "COLLATERAL": Is defined in Section 9.1.

         "COLLATERAL AGENT": Defined in the Preamble.

         "COLLATERAL INTEREST": Any interest in property to secure an
                  obligation, including, without limitation, a security
                  interest, mortgage, and deed of trust.

         "CONCENTRATION ACCOUNT": Is defined in Section 8.3.

         "CONSENT": Actual consent given by the Lender from whom such consent is
                  sought; or the passage of seven (7) Business Days from receipt
                  of written notice to a Lender from an Agent of a proposed
                  course of action to be followed by an Agent without such
                  Lender's giving that Agent written notice of that Lender's
                  objection to such course of action, PROVIDED THAT all Agents
                  may rely on such passage of time as consent by a Lender only
                  if such written notice states that consent will be deemed
                  effective if no objection is received within such time period.

         "CONSOLIDATED": When used to modify a financial term, test, statement,
                  or report, refers to the application or preparation of such
                  term, test, statement or report (as applicable) based upon the
                  consolidation, in accordance with GAAP, of the financial
                  condition or operating results of the Loan Parties.

         "COST": The lower of

                           (a) the calculated cost of purchases, as determined
                  from invoices received by Design Apparel, Inc., its purchase
                  journal or stock ledger, based upon its accounting practices,
                  known to the Administrative Agent, which practices are in
                  effect on the date on

                                                                         Page 10
<Page>

                  which this Agreement was executed; or

                           (b) the lowest ticketed or promoted price at which
                  the subject inventory is offered to the public by any Loan
                  Party, after all mark-downs (whether or not such price is then
                  reflected on a Loan Party's accounting system).

                  "Cost" does not include inventory capitalization costs or
                  other non-purchase price charges used in a Loan Party's
                  calculation of cost of goods sold (other than freight, which
                  may be capitalized consistent with GAAP and such Loan Party's
                  prior practices).

         "COSTS OF COLLECTION": Includes, without limitation, all reasonable
                  attorneys' fees and reasonable out-of-pocket expenses incurred
                  by any Agent's attorneys or the Tranche B Lender's attorneys,
                  and all reasonable out-of-pocket costs incurred by any Agent
                  or the Tranche B Lender in the administration of the
                  Liabilities and/or the Loan Documents, including, without
                  limitation, reasonable costs and expenses associated with
                  travel on behalf of any Agent or the Tranche B Lender, where
                  such costs and expenses are directly or indirectly related to
                  or in respect of any Agent's or the Tranche B Lender's:
                  administration and management of the Liabilities; negotiation,
                  documentation, and amendment of any Loan Document; or efforts
                  to preserve, protect, collect, or enforce the Collateral, the
                  Liabilities, and/or the Agents' Rights and Remedies and/or any
                  of the rights and remedies of any Agent or the Tranche B
                  Lender against or in respect of any guarantor or other person
                  liable in respect of the Liabilities (whether or not suit is
                  instituted in connection with such efforts). "Costs of
                  Collection" also includes the reasonable fees and expenses of
                  Lenders' Special Counsel and the Tranche B Lender's counsel.
                  The Costs of Collection are Liabilities, and at the
                  Administrative Agent's option may bear interest at the then
                  effective Base Margin Rate.

         "CREDIT CARD ADVANCE RATE": 85%

         "CUSTOMER CREDIT LIABILITY": Gift certificates, customer deposits,
                  merchandise credits, layaway obligations, frequent shopping
                  programs, and similar liabilities of any Loan Party to its
                  retail customers and prospective customers.

         "DDA": Any checking, other demand daily depository account or other
                  bank or like account, other than an Exempt DDA, maintained by
                  any Loan Party including, on the date of this Agreement, the
                  accounts listed on EXHIBIT 8.1 hereto.

                                                                         Page 11
<Page>

         "DEFAULT": Any occurrence, circumstance, or state of facts with respect
                  to a Loan Party which (a) is an Event of Default; or (b) would
                  become an Event of Default if any requisite notice were given
                  and/or any requisite period of time were to run and such
                  occurrence, circumstance, or state of facts were not cured
                  within any applicable grace period.

         "DELINQUENT REVOLVING CREDIT LENDER": Defined in Section 13.3(c).

         "DEPOSIT ACCOUNT": Has the meaning given that term in the UCC.

         "DESICAND": DesiCand Inc., a Delaware corporation wholly-owned by
                  Designs, Inc.

         "DESICAND LICENSE AGREEMENT": The Retail Store License Agreement dated
                  January 9, 2002 between Candie's, Inc. and Designs, Inc., as
                  in effect on the Closing Date.

         "DESIGNS, INC. COMPANIES": The Persons listed on EXHIBIT 1.0(D) annexed
                  hereto.

         "DOCUMENTS": Has the meaning given that term in the UCC.

         "DOCUMENTS OF TITLE": Has the meaning given that term in the UCC.

         "EARLY TERMINATION ASSESSMENT": The Revolving Credit Early
                  Termination Fee and the Tranche B Early Termination Fee.

         "ECKO": ECKO. Complex, LLC d/b/a Ecko Unltd.

         "ECKO JOINT VENTURE": The joint venture between ECKO and Designs,
                  Inc. referred to in the Letter of Intent between ECKO and
                  Designs, Inc. dated February 18, 2002.

         "EBITDA": Earnings before interest, taxes, depreciation and
                  amortization, each as determined in accordance with GAAP.

         "ELIGIBLE ASSIGNEE": With respect to an assignee of a Revolving Credit
                  Lender: a bank, insurance company, or company engaged in the
                  business of making commercial loans having a combined capital
                  and surplus in excess of $300 Million or any Affiliate of any
                  Revolving Credit Lender, or any Person to whom a Revolving
                  Credit Lender assigns its

                                                                         Page 12
<Page>

                  rights and obligations under this Agreement as part of a
                  programmed assignment and transfer of such Revolving Credit
                  Lender's rights in and to a material portion of such Revolving
                  Credit Lender's portfolio of asset based credit facilities.

         "ELIGIBLE CREDIT CARD RECEIVABLES": Under 5 Business Day accounts due
                  on a non-recourse basis from major credit card processors
                  (which, if due on account of a private label credit card
                  program, are deemed in the discretion of the Administrative
                  Agent to be eligible).

         "ELIGIBLEIN-TRANSIT INVENTORY": "Eligible In-Transit Inventory " will
                  be calculated at 75% of (i) the Retail value of such of the
                  Inventory of the Casual Male Companies and (ii) the Cost of
                  such of the Inventory of the Designs, Inc. Companies (in each
                  case, without duplication as to Eligible Inventory and
                  Eligible In-Transit Inventory ), in each case in which title
                  has passed to a Loan Party and which is then being shipped
                  from a foreign location for receipt, within 45 days, at a
                  warehouse of one of the Loan Parties, PROVIDED THAT

                                    (a) Such Inventory is of such types,
                           character, qualities and quantities (net of Inventory
                           Reserves) as the Administrative Agent in its
                           discretion from time to time determines to be
                           eligible for borrowing;

                                    (b) The documents which relate to such
                           shipment names the Collateral Agent as consignee of
                           the subject Inventory and the Collateral Agent has
                           control over the documents which evidence ownership
                           of the subject Inventory (such as by the providing to
                           the Collateral Agent of a Customs Brokers Agreement
                           in form reasonably satisfactory to the Collateral
                           Agent); and

                                    (c) The Collateral Agent has a first
                           priority perfected security interest in such
                           Inventory.

         "ELIGIBLE INVENTORY": The following (without duplication):

                           (a) Such of the Loan Parties' Inventory, at such
                  locations, and of such types, character, qualities and
                  quantities, as the Administrative Agent, in its sole
                  discretion from time to time determines to be acceptable for
                  borrowing, as to which Inventory, the Collateral Agent has a
                  perfected security interest which is prior and superior to all
                  security interests, claims, and encumbrances.

                           (b)      Eligible L/C Inventory.

                           (c)      Eligible In-Transit Inventory.

                                                                         Page 13
<Page>

                  Without limiting the foregoing, "Eligible Inventory" shall not
                  include (i) direct shipment inventory; (ii) inventory which
                  can not be sold including, without limitation, any non-
                  merchandise inventory (such as labels, bags, and packaging
                  materials, etc.); (iii) "dummy warehouse inventory"; (iv)
                  damaged goods, return to vendor merchandise, packaways,
                  consigned inventory, samples and other similar categories; (v)
                  inventory which is the subject of a store closing,
                  liquidation, going-out-of-business or similar sale, as to
                  which in each case, any Loan Party has received an initial
                  payment of the guaranteed price from the Person conducting the
                  sale; and (vi) inventory in locations outside the United
                  States (except for Eligible L/C Inventory) and in locations in
                  the United States not under any Loan Party's control (unless
                  waivers acceptable to the Agents are obtained).

         "ELIGIBLEL/C INVENTORY": "Eligible L/C Inventory" will be calculated
                  at 75% of (i) the Retail value of such of the Inventory of the
                  Casual Male Companies and (ii) the Cost of such of the
                  Inventory of the Designs, Inc. Companies (in each case,
                  without duplication as to Eligible Inventory and Eligible
                  In-Transit Inventory ), in each case the purchase of which is
                  supported by a documentary L/C then having an initial expiry
                  of forty-five (45) or less days, PROVIDED THAT

                                    (a) Such Inventory is of such types,
                           character, qualities and quantities (net of Inventory
                           Reserves) as the Administrative Agent in its
                           discretion from time to time determines to be
                           eligible for borrowing; and

                                    (b) The documentary L/C supporting such
                           purchase names the Collateral Agent as consignee of
                           the subject Inventory and the Collateral Agent has
                           control over the documents which evidence ownership
                           of the subject Inventory (such as by the providing to
                           the Collateral Agent of a Customs Brokers Agreement
                           in form reasonably satisfactory to the Collateral
                           Agent) .

         "ELIGIBLE RECEIVABLES": Such of the Loan Parties' Accounts and accounts
                  receivable as arise in the ordinary course of the Loan
                  Parties' business (without duplication of Eligible Credit Card
                  Receivables) for goods sold and/or services rendered by the
                  Loan Parties' to corporate customers, which Accounts and
                  accounts receivable have been determined by the Administrative
                  Agent to be satisfactory and have been earned by performance
                  and are owed to the Loan Parties' by such of the Loan Parties'
                  corporate Account Debtors as the Administrative Agent
                  determines to be satisfactory, in the Administrative Agent's
                  discretion in each instance.

                                                                         Page 14
<Page>

         "EMPLOYEE BENEFIT PLAN": As defined in ERISA.

         "ENCUMBRANCE": A Collateral Interest or agreement to create or grant a
                  Collateral Interest; the interest of a lessor under a Capital
                  Lease, conditional sale or other title retention agreement;
                  sale of accounts receivable or chattel paper; or other
                  arrangement pursuant to which any Person is entitled to any
                  preference or priority with respect to the property or assets
                  of another Person or the income or profits of such other
                  Person; and each of the foregoing whether consensual or
                  non-consensual and whether arising by way of agreement,
                  operation of law, legal process or otherwise.

         "END DATE": The date upon which all of the following conditions are
                  met: (a) all Liabilities have been paid in full; (b) all
                  obligations of any Lender to make loans and advances and to
                  provide other financial accommodations to the Borrowers
                  hereunder shall have been irrevocably terminated; and (c) the
                  arrangements regarding L/Cs described in Section 19.2(b) have
                  been made.

         "ENVIRONMENTAL LAWS": All of the following:

                           (a) Applicable Law which regulates or relates to, or
                  imposes any standard of conduct or liability on account of or
                  in respect to environmental protection matters, including,
                  without limitation, Hazardous Materials, as are now or
                  hereafter in effect.

                           (b) The common law relating to damage to Persons or
                  property from Hazardous Materials.

         "EQUIPMENT": Includes, without limitation, "equipment" as defined in
                  the UCC, and also all furniture, store fixtures, motor
                  vehicles, rolling stock, machinery, office equipment, plant
                  equipment, tools, dies, molds, and other goods, property, and
                  assets which are used and/or were purchased for use in the
                  operation or furtherance of a Person's business, and any and
                  all accessions or additions thereto, and substitutions
                  therefor.

         "ERISA": The Employee Retirement Income Security Act of 1974, as
                  amended.

         "ERISA AFFILIATE": Any Person which is under common control with a
                  Loan Party within the meaning of Section 4001 of ERISA or is
                  part of a group which includes any Loan Party and which would
                  be treated as a single employer under Section 414 of the
                  Internal

                                                                         Page 15
<Page>

                  Revenue Code of 1986, as amended.

         "EVENTS OF DEFAULT": Is defined in Article 11. An "Event of Default"
                  shall be deemed to have occurred and to be continuing unless
                  and until that Event of Default has been duly waived by the
                  requisite Lenders or by the Administrative Agent, as
                  applicable.

         "EXCESS AVAILABILITY": The result of (a) Availability MINUS (b) all
                  then past due obligations of the Loan Parties including
                  accounts payable which are beyond customary trade terms and
                  rent obligations which are beyond applicable grace periods.

         "EXEMPT DDA": A depository account maintained by any Loan Party, the
                  only contents of which may be transfers FROM the Operating
                  Account and actually used solely (i) for petty cash purposes;
                  or (ii) for payroll.

         "FARM PRODUCTS": Has the meaning given that term in the UCC.

         "FEE LETTER": Collectively, the letters, each dated May 14, 2002,
                  between (i) Designs, Inc. and the Administrative Agent and
                  (ii) Designs, Inc. and the Tranche B Lender, as each such
                  letter may from time to time be amended.

         "FINANCIAL COVENANT BREACH": The breach of any of the financial
                  performance covenants provided for in Section 6.11.

         "FISCAL":When followed by "month" or "quarter", it refers to the
                  relevant fiscal period based on the Loan Parties' fiscal year
                  and accounting conventions (e.g. reference to the Loan
                  Parties' "Fiscal June, 2002" is to the Loan Parties' fiscal
                  month of June in the calendar year 2001). When followed by
                  reference to a specific year, it refers to the fiscal year
                  which ends in a month of the year to which reference is being
                  made (e.g. if the Loan Parties' fiscal year ends in January
                  2002 reference to that year would be to the Loan Parties'
                  "Fiscal 2002").

         "5% SUBORDINATED NOTE": Collectively, (i) the Designs, Inc. 5%
                  Subordinated Note due April 26, 2007 in the original principal
                  amount of $1,000,000 made by Designs, Inc. to the Kellwood
                  Company, and (ii) the Designs, Inc. 5% Subordinated Note due
                  April 26, 2007 in

                                                                         Page 16
<Page>

                  the original principal amount of $10,000,000 made by Designs,
                  Inc. to the Kellwood Company.

         "FIXTURES": Has the meaning given that term in the UCC.

         "FRFI":  Fleet Retail Finance Inc.

         "GAAP": Principles which are consistent with those promulgated or
                  adopted by the Financial Accounting Standards Board and its
                  predecessors (or successors) in effect and applicable to that
                  accounting period in respect of which reference to GAAP is
                  being made, PROVIDED, HOWEVER, in the event of a Material
                  Accounting Change, then unless otherwise specifically agreed
                  to by the Administrative Agent, (a) the Loan Parties'
                  compliance with the financial performance covenants imposed
                  pursuant to Section 6.11 shall be determined as if such
                  Material Accounting Change had not taken place and (b) the
                  Borrowers' Representative shall include, with its monthly,
                  quarterly, and annual financial statements a schedule,
                  certified by the Borrowers' Representative's chief financial
                  officer, on which the effect of such Material Accounting
                  Change on that statement shall be described.

         "GENERAL INTANGIBLES": Includes, without limitation, "general
                  intangibles" as defined in the UCC; and also all: rights to
                  payment for credit extended; deposits; amounts due to any
                  Person; credit memoranda in favor of any Person; warranty
                  claims; tax refunds and abatements; insurance refunds and
                  premium rebates; all means and vehicles of investment or
                  hedging, including, without limitation, options, warrants, and
                  futures contracts; records; customer lists; telephone numbers;
                  goodwill; causes of action; judgments; payments under any
                  settlement or other agreement; literary rights; rights to
                  performance; royalties; license and/or franchise fees; rights
                  of admission; licenses; franchises; license agreements,
                  including all rights of any Person to enforce same; permits,
                  certificates of convenience and necessity, and similar rights
                  granted by any governmental authority; patents, patent
                  applications, patents pending, and other intellectual
                  property; internet addresses and domain names; developmental
                  ideas and concepts; proprietary processes; blueprints,
                  drawings, designs, diagrams, plans, reports, and charts;
                  catalogs; manuals; technical data; computer software programs
                  (including the source and object codes therefor), computer
                  records, computer software, rights of access to computer
                  record service bureaus, service bureau computer contracts, and
                  computer data; tapes, disks, semi-conductors chips and

                                                                         Page 17
<Page>

                  printouts; trade secrets rights, copyrights, mask work rights
                  and interests, and derivative works and interests; user,
                  technical reference, and other manuals and materials; trade
                  names, trademarks, service marks, and all goodwill relating
                  thereto; applications for registration of the foregoing; and
                  all other general intangible property of any Person in the
                  nature of intellectual property; proposals; cost estimates,
                  and reproductions on paper, or otherwise, of any and all
                  concepts or ideas, and any matter related to, or connected
                  with, the design, development, manufacture, sale, marketing,
                  leasing, or use of any or all property produced, sold, or
                  leased, by any or credit extended or services performed, by
                  any Person, whether intended for an individual customer or the
                  general business of any Person, or used or useful in
                  connection with research by any Person.

         "GOODS": Has the meaning given that term in the UCC, and also includes
                  all things movable when a security interest therein attaches
                  and also all computer programs embedded in goods and any
                  supporting information provided in connection with a
                  transaction relating to the program if (i) the program is
                  associated with the goods in such manner that it customarily
                  is considered part of the goods or (ii) by becoming the owner
                  of the goods, a Person acquires a right to use the program in
                  connection with the goods.

         "GUARANTOR" and "GUARANTORS": Each Person named on EXHIBIT 1.1(b)
                  annexed hereto individually, and the Persons named on EXHIBIT
                  1.1(b) annexed hereto, collectively.

         "GUARANTOR AGREEMENT": Each instrument and document executed by a
                  Guarantor of the Liabilities to evidence or secure the
                  Guarantor's guaranty thereof.

         "GUARANTOR DEFAULT": Default or breach or the occurrence of any event
                  of default under any Guarantor Agreement.

         "HAZARDOUS MATERIALS": Any (a) substance which is defined or regulated
                  as a hazardous material in or under any Environmental Law and
                  (b) oil in any physical state.

         "INDEBTEDNESS": All indebtedness and obligations of or assumed by any
                  Person on account of or with respect to any of the following:

                           (a) In respect of money borrowed (including any
                  indebtedness which is non-recourse to the credit of such
                  Person but which is secured by an Encumbrance on

                                                                         Page 18
<Page>

                  any asset of such Person) whether or not evidenced by a
                  promissory note, bond, debenture or other written obligation
                  to pay money.

                           (b) In connection with any letter of credit or
                  acceptance transaction (including, without limitation, the
                  face amount of all letters of credit and acceptances issued
                  for the account of such Person or reimbursement on account of
                  which such Person would be obligated).

                           (c) In connection with the sale or discount of
                  accounts receivable or chattel paper of such Person.

                           (d) On account of deposits or advances (but not
                  including any liabilities with respect to gift cards and gift
                  certificates).

                           (e) As lessee under Capital Leases.

                           (f) In connection with any sale and leaseback
                  transaction. "Indebtedness" of any Person also includes:

                                    (x) Indebtedness of others secured by an
                           Encumbrance on any asset of such Person, whether or
                           not such Indebtedness is assumed by such Person.

                                    (y) Any guaranty, endorsement, suretyship or
                           other undertaking pursuant to which that Person may
                           be liable on account of any obligation of any third
                           party other than on account of the endorsement of
                           checks and other items in the ordinary course.

                                    (z) The Indebtedness of a partnership or
                           joint venture for which such Person is liable as a
                           general partner or joint venturer.

         "INDEMNIFIED PERSON": Is defined in Section 20.12.

         "INSTRUMENTS": Has the meaning given that term in the UCC.

         "INTEREST PAYMENT DATE": With reference to:

                           Each Libor Loan: The last day of the Interest Period
                  relating thereto (and on the last day of the third month for
                  any such loan which has a six (6) month Interest Period); the
                  Termination Date; and the End Date.

                           Each Base Margin Loan: The first day of each month;
                  the Termination Date; and the End Date.

         "INTEREST PERIOD": The following:

                                                                         Page 19
<Page>

                           (a) With respect to each Libor Loan: Subject to
                  Subsection (c), below, the period commencing on the date of
                  the making or continuation of, or conversion to, the subject
                  Libor Loan and ending one, two, three or six months
                  thereafter, as the Borrowers' Representative may elect by
                  notice (pursuant to Section 2.6) to the Administrative Agent.

                           (b) With respect to each Base Margin Loan: Subject to
                  Subsection (c), below, the period commencing on the date of
                  the making or continuation of or conversion to such Base
                  Margin Loan and ending on that date (i) as of which the
                  subject Base Margin Loan is converted to a Libor Loan, as the
                  Borrowers' Representative may elect by notice (pursuant to
                  Section 2.6) to the Administrative Agent, or (ii) on which the
                  subject Base Margin Loan is paid by the Borrowers.

                           (c) The setting of Interest Periods is in all
                  instances subject to the following:

                                    (i) Any Interest Period for a Base Margin
                           Loan which would otherwise end on a day which is not
                           a Business Day shall be extended to the next
                           succeeding Business Day.

                                    (ii) Any Interest Period for a Libor Loan
                           which would otherwise end on a day that is not a
                           Business Day shall be extended to the next succeeding
                           Business Day, unless that succeeding Business Day is
                           in the next calendar month, in which event such
                           Interest Period shall end on the last Business Day of
                           the month during which the Interest Period ends.

                                    (iii) Subject to Subsection (iv), below, any
                           Interest Period applicable to a Libor Loan, which
                           Interest Period begins on a day for which there is no
                           numerically corresponding day in the calendar month
                           during which such Interest Period ends, shall end on
                           the last Business Day of the month during which that
                           Interest Period ends.

                                    (iv) Any Interest Period which would
                           otherwise end after the Termination Date shall end on
                           the Termination Date.

                                    (v) The number of Interest Periods in effect
                           at any one time is subject to Section 2.12(d) hereof.

         "INVENTORY": Includes, without limitation, "inventory" as defined in
                  the UCC and also all: (a) Goods which are leased by a Person
                  as lessor; are held by a Person for sale or lease or to be
                  furnished under a contract of service; are furnished by a
                  Person under a contract of service; or consist of raw
                  materials, work in process, or materials used or consumed in a
                  business; (b) Goods of said description in transit; (c) Goods
                  of said description which are returned, repossessed and
                  rejected; (d) packaging, advertising, and shipping materials

                                                                         Page 20
<Page>

                  related to any of the foregoing; (e) all names, marks, and
                  General Intangibles affixed or to be affixed or associated
                  thereto; and (f) Documents and Documents of Title which
                  represent any of the foregoing.

         "INVENTORY PURCHASE AGREEMENT": The Inventory Purchase Agreement dated
                  as of May 14, 2002 by and between Designs Apparel, Inc. and
                  the other Loan Parties.

          INVENTORY RESERVES": Such Reserves as may be established from time to
                  time by the Administrative Agent in the Administrative Agent's
                  reasonable discretion with respect to the determination of the
                  saleability, at Retail, of the Eligible Inventory or which
                  reflect such other factors as affect the market value of the
                  Eligible Inventory. Without limiting the generality of the
                  foregoing, Inventory Reserves may include (but are not limited
                  to) reserves based on the following:

                           (i)      Obsolescence (based upon Inventory on hand
                                    beyond a given number of days).

                           (ii)     Seasonality.

                           (iii)    Shrinkage.

                           (iv)     Imbalance.

                           (v)      Change in Inventory character.

                           (vi)     Change in Inventory composition

                           (vii)    Change in Inventory mix.

                           (viii)   Markdowns (both permanent and point of sale)

                           (ix)     Retail markons and markups inconsistent with
                                    prior period practice and performance;
                                    industry standards; current business plans;
                                    or advertising calendar and planned
                                    advertising events.

                           (x)      Consigned Inventory.

         "INVESTMENT PROPERTY": Has the meaning given that term in the UCC.

         "ISSUER": Fleet National Bank and any successor to Fleet National Bank.

         "L/C": Any letter of credit, the issuance of which is procured by the
                  Administrative Agent for the account of any Borrower and any
                  acceptance made on account of such letter of credit.

         "L/C LANDING COSTS": To the extent not included in the Stated
                  Amount of an L/C, customs, duty,

                                                                         Page 21
<Page>

                  freight, and other out-of-pocket costs and expenses which will
                  be expended to "land" the Inventory, the purchase of which is
                  supported by such L/C.

         "LEASE": Any lease or other agreement, no matter how styled or
                  structured, pursuant to which a Loan Party is entitled to the
                  use or occupancy of any space.

         "LEASEHOLD INTEREST": Any interest of a Loan Party as lessee under any
                  Lease.

         "LEASEHOLD PROCEEDS": Any proceeds of the sale or other disposition of
                  a Leasehold Interest.

         "LENDER": Collectively and each individually, each Revolving Credit
                  Lender and the Tranche B Lender.

         "LENDERS'SPECIAL COUNSEL": Collectively, (i) a single counsel selected
                  by Revolving Credit Lenders holding more than 51% of the Loan
                  Commitments (other than any Loan Commitments held by
                  Delinquent Revolving Credit Lenders) following the occurrence
                  of an Event of Default to represent their interests in
                  connection with the enforcement, attempted enforcement, or
                  preservation of any rights and remedies under this, or any
                  other Loan Document, (ii) a single counsel selected by the
                  Tranche B Lender to represent the interests of the Tranche B
                  Lender in connection with the preparation, negotiation,
                  administration, enforcement, attempted enforcement, or
                  preservation of any rights and remedies under this, or any
                  other Loan Document.

         "LETTER-OF-CREDIT RIGHT": Has the meaning given that term in the UCC
                  and also refers to any right to payment or performance under
                  an L/C, whether or not the beneficiary has demanded or is at
                  the time entitled to demand payment or performance.

         "LIABILITIES": (a) All and each of the following, whether now existing
                  or hereafter arising under this Agreement or under any of the
                  other Loan Documents, including, without limitation, the
                  following:

                           (i) Any and all direct and indirect liabilities,
                  debts, and obligations of each Borrower to any Agent or any
                  Lender, each of every kind, nature, and description owing on
                  account of this Agreement or any other Loan Document.

                           (ii) Each obligation to repay any loan, advance,
                  indebtedness, note, obligation, overdraft, or amount now or
                  hereafter owing by any Borrower to any Agent or

                                                                         Page 22
<Page>

                  any Lender (including all future advances whether or not made
                  pursuant to a commitment by any Agent or any Lender), whether
                  or not any of such are liquidated, unliquidated, primary,
                  secondary, secured, unsecured, direct, indirect, absolute,
                  contingent, or of any other type, nature, or description, or
                  by reason of any cause of action which any Agent or any Lender
                  may hold against any Borrower.

                           (iii) All notes and other obligations of each
                  Borrower now or hereafter assigned to or held by any Agent or
                  any Lender, each of every kind, nature, and description,
                  including, without limitation, any interest rate swaps, caps,
                  or similar hedging instruments.

                           (iv) All interest, fees, and charges and other
                  amounts which may be charged by any Agent or any Lender to any
                  Borrower and/or which may be due from any Borrower to any
                  Agent or any Lender from time to time.

                           (v) All costs and expenses incurred or paid by any
                  Agent in respect of any agreement between any Borrower and any
                  Agent or instrument furnished by any Borrower to any Agent
                  (including, without limitation, Costs of Collection,
                  reasonable attorneys' fees, and all court and litigation costs
                  and expenses).

                           (vi) Any and all covenants of each Borrower to or
                  with any Agent or any Lender and any and all obligations of
                  each Borrower to act or to refrain from acting in accordance
                  with any agreement between that Borrower and any Agent or any
                  Lender or instrument furnished by that Borrower to any Agent
                  or any Lender.

                           (vii) Each of the foregoing as if each reference to
                  "any Agent or any Lender" were to each Affiliate of the
                  Administrative Agent.

                  (b) Any and all direct or indirect liabilities, debts, and
         obligations of each Borrower to any Agent or any Affiliate of any
         Agent, each of every kind, nature, and description owing on account of
         any service or accommodation provided to, or for the account of any
         Borrower pursuant to this or any other Loan Document, including cash
         management services and the issuances of L/C's.

         "LIBOR BUSINESS DAY": Any day which is both a Business Day and a day
                  on which the principal interbank market for Libor deposits in
                  London in which Fleet National Bank participates is open for
                  dealings in United States Dollar deposits.

         "LIBOR LOAN": Any Revolving Credit Loan which bears interest at a
                  Libor Rate.

         "LIBOR MARGIN": As determined from the definition of Applicable
                  Margin.

                                                                         Page 23
<Page>

         "LIBOR OFFER RATE": That rate of interest (rounded upwards, if
                  necessary, to the next 1/100 of 1%) determined by the
                  Administrative Agent in good faith to be the highest
                  prevailing rate per annum at which deposits on U.S. Dollars
                  are offered to Fleet National Bank, by first-class banks in
                  the London interbank market in which Fleet National Bank
                  participates at or about 10:00AM (Boston Time) two (2) Libor
                  Business Days before the first day of the Interest Period for
                  the subject Libor Loan, for a deposit approximately in the
                  amount of the subject loan for a period of time approximately
                  equal to such Interest Period.

         "LIBOR RATE": That per annum rate which is the aggregate of the Libor
                  Offer Rate PLUS the Libor Margin EXCEPT THAT, in the event
                  that the Administrative Agent determines in good faith that
                  any Revolving Credit Lender may be subject to the Reserve
                  Percentage, the "Libor Rate" shall mean, with respect to any
                  Libor Loans then outstanding (from the date on which that
                  Reserve Percentage first became applicable to such loans), and
                  with respect to all Libor Loans thereafter made, an interest
                  rate per annum equal the sum of (a) plus (b), where:

                                    (a)      is the decimal equivalent of the
                                             following fraction:

                                                 Libor Offer Rate
                                                 ----------------
                                            1 minus Reserve Percentage

                                    (b)      is the applicable Libor Margin.

         "LIQUIDATION": The exercise, by the Collateral Agent, of those rights
                  accorded to the Collateral Agent under the Loan Documents as a
                  creditor of the Loan Parties following and on account of the
                  occurrence of an Event of Default looking towards the
                  realization on the Collateral. Derivations of the word
                  "Liquidation" (such as "Liquidate") are used with like meaning
                  in this Agreement.

         "LOAN ACCOUNT": Is defined in Section 2.9.

         "LOAN COMMITMENT": With respect to each Revolving Credit Lender,
                  that respective Revolving Credit Lender's Revolving Credit
                  Dollar Commitment. With respect to the Tranche B Lender, the
                  then unpaid principal balance of the Tranche B Loan.

         "LOAN DOCUMENTS": This Agreement, each instrument and document
                  executed as contemplated by the Original Agreement and by
                  Article 5, below, and each other instrument or document from
                  time to time executed and/or delivered in connection with the

                                                                         Page 24
<Page>

                  arrangements contemplated hereby or in connection with any
                  transaction with the Administrative Agent or the Collateral
                  Agent or any Affiliate of the Administrative Agent or the
                  Collateral Agent, including, without limitation, any
                  transaction which arises out of any cash management,
                  depository, investment, letter of credit, interest rate
                  protection, or equipment leasing services provided by the
                  Administrative Agent or the Collateral Agent or any Affiliate
                  of the Administrative Agent or the Collateral Agent, as each
                  may be amended from time to time.

         "LOAN PARTY AND LOAN PARTIES": Each Borrower and each Guarantor.

         "MAJORITY LENDERS": Lenders (other than Delinquent Revolving Credit
                  Lenders) holding 51% or more of the Loan Commitments (other
                  than any Loan Commitments held by Delinquent Revolving Credit
                  Lenders).

         "MAJORITY REVOLVING CREDIT LENDERS": Revolving Credit Lenders (other
                  than Delinquent Revolving Credit Lenders) holding 51% or more
                  the Loan Commitments which support the Revolving Credit (other
                  than such Loan Commitments held by a Delinquent Revolving
                  Credit Lender).

         "MATERIAL ACCOUNTING CHANGE": Any change in GAAP applicable to
                  accounting periods subsequent to the Loan Parties' Fiscal year
                  most recently completed prior to the execution of this
                  Agreement, which change has a material effect on the Loan
                  Parties' Consolidated financial condition or operating
                  results, as reflected on financial statements and reports
                  prepared by or for the Loan Parties, when compared with such
                  condition or results as if such change had not taken place or
                  where preparation of the Loan Parties' statements and reports
                  in compliance with such change results in the breach of a
                  financial performance covenant imposed pursuant to Section
                  6.11 where such a breach would not have occurred if such
                  change had not taken place or VISA VERSA.

         "MATURITY DATE": May 14, 2005.

         MINIMUM EXCESS AVAILABILITY BREACH: The failure of the Borrowers at
                  any time to comply with the provisions of Section 6.11(a).

         "NOMINEE": A business entity (such as a corporation or limited
                  partnership) formed by the

                                                                         Page 25
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                  Collateral Agent to own or manage any Post Foreclosure Asset.

         "NON CONSENTING LENDER": Is defined in Section 16.11.

         "OPERATING ACCOUNT": Is defined in Section 8.3.

         "ORIGINAL AGREEMENT:": Is defined in the Preamble.

         "OVERLOAN": A loan, advance, or providing of credit support (such as
                  the issuance of any L/C) to the extent that, immediately after
                  its having been made, Availability is less than zero.

         "PARTICIPANT": Is defined in Section 20.15, hereof.

         "PAYMENT INTANGIBLE": Has the meaning given that term in the UCC and
                  also refers to any general intangible under which the Account
                  Debtor's primary obligation is a monetary obligation.

         "PERMITTED ACQUISITION": An Acquisition complying with the following:

                                    (A) Such Acquisition shall be of assets
                           ancillary, incidental or necessary to the retail sale
                           of apparel and related activities, or of 100% of the
                           stock of a corporation whose assets consist
                           substantially of such assets, or through the merger
                           of such a corporation with a Loan Party (with a Loan
                           Party as the surviving corporation), or with a
                           Subsidiary of a Loan Party where, after giving effect
                           to such merger, such corporation becomes a
                           wholly-owned Subsidiary of a Loan Party;

                                    (B) If such Acquisition includes the
                           acquisition of assets by, or the merger of, a Loan
                           Party, there shall have been no change in the
                           identity of the president, chief financial officer or
                           any executive vice president of such Loan Party as a
                           consequence of such acquisition, or if there has been
                           such a change, the Administrative Agent shall have
                           consented in writing to such change in identity
                           within thirty (30) days thereafter (which consent
                           shall not be unreasonably withheld or delayed); and

                                    (C) If a new Subsidiary is formed or
                           acquired as a result of such Acquisition, such
                           Subsidiary shall execute documentation, reasonably
                           satisfactory in form and substance to the
                           Administrative Agent, guarantying payment and
                           performance of

                                                                         Page 26
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                  the Liabilities and granting a first lien, subject only to
                  Permitted Encumbrances, in its assets in favor of the
                  Collateral Agent, for the ratable benefit of the Lenders.

         "PERMITTED ASSET DISPOSITION": The following:

                  (a) A sale or other disposition of the assets of any Loan
                  Party (other than as specified in clauses (b) and (c) of this
                  definition), not in the ordinary course, so long as the
                  following conditions are satisfied:

                                    (i) The sale, liquidation or other
                           disposition of Inventory at any locations from which
                           a Loan Party determines to cease the conduct of its
                           business, (x) shall be on terms satisfactory to the
                           Administrative Agent and (y) notwithstanding the
                           Administrative Agent's furnishing of any such
                           consent, the Administrative Agent may, in the
                           exercise of its reasonable discretion, impose
                           Inventory Reserves as a result of the occurrence of
                           any such sale, liquidation, or disposition;

                                    (ii) The aggregate of all such sales or
                           other dispositions of assets during the term of this
                           Agreement shall not exceed five percent (5%) of the
                           value of all assets of Designs, Inc. as of the
                           Closing Date;

                                    (iii) Each such sale or other disposition
                           shall be for fair consideration in an arm's length
                           transaction; and

                                    (iv) On the date on which any sale or other
                           disposition of assets is consummated, no Default
                           shall have occurred and be continuing or will occur
                           as a result of such consummation.

                  (b) The rejection of up to fifteen (15) leases as contemplated
                  by Section 6.16 of the Casual Male Acquisition Agreement.

                  (c) The sale, spin-off or other disposition of Designs LPI
                  Corp., and its ownership interests in Securex, on terms
                  reasonably satisfactory to the Administrative Agent. The
                  Administrative Agent shall execute and deliver such releases
                  as shall be reasonably requested in order for such disposition
                  to be consummated.

         "PERMITTED ENCUMBRANCES": The following:

                  (a) Encumbrances described on EXHIBIT 1.1 hereto.

                  (b) Encumbrances on properties to secure taxes, assessments
                  and other government charges or claims for labor, material or
                  supplies in respect of obligations not then overdue; deposits
                  or pledges made in connection with, or to secure payment of,
                  workmen's compensation, unemployment insurance, old age
                  pensions or other social security

                                                                         Page 27
<Page>

                  obligations; Encumbrances on property hereafter acquired
                  (either in connection with purchase money encumbrances, rental
                  purchase agreements, including Capital Leases, or conditional
                  sale or other title retention agreements), which are
                  restricted to the property so acquired and do not secure
                  Indebtedness exceeding the fair value (at the time of
                  acquisition) thereof; Encumbrances of carriers, warehousemen,
                  mechanics and materialmen, and other like Encumbrances on
                  properties in existence less than 90 days from the date of
                  creation thereof in respect of obligations not overdue; and
                  Encumbrances on properties consisting of easements, rights of
                  way, zoning restrictions, restrictions on the use of real
                  property and defects and irregularities in the title thereto,
                  landlord's or lessor's Encumbrances under leases to which any
                  Loan Party is a party, and other minor Encumbrances or
                  encumbrances none of which interferes materially with the use
                  of the property affected in the ordinary conduct of the
                  business of the Loan Parties, which defects do not
                  individually or in the aggregate have a materially adverse
                  effect on the business of any Loan Party individually or of
                  the Loan Parties as a whole or which are being actively
                  contested in good faith by appropriate proceedings as to which
                  the Loan Parties have established reasonable reserves, IT
                  BEING UNDERSTOOD, HOWEVER, that the filing of a tax lien which
                  includes any Inventory or Accounts does not constitute a
                  "Permitted Encumbrance", even if being so contested.

         "PERMITTED INDEBTEDNESS": The following Indebtedness:

                           (a)      Indebtedness on account of the Revolving
                                    Credit.

                           (b)      Indebtedness on account of the Tranche B
                                    Loan.

                           (c)      The Subordinated Indebtedness.

                           (d)      Capital Leases and purchase money
                                    Indebtedness secured by Permitted
                                    Encumbrances.

                           (e)      Indebtedness assumed in connection with
                                    Permitted Acquisitions pursuant to Sections
                                    5.21 (it being understood that the principal
                                    amount so assumed shall be deemed part of
                                    the purchase price of any such Permitted
                                    Acquisition) and any refinancing or
                                    replacement thereof on terms and conditions
                                    (including, without limitation, interest
                                    rate and providing that, in any event, the
                                    principal amount thereof shall not exceed
                                    that outstanding on the date of refinance or
                                    replacement) at least as favorable as those
                                    being refinanced or replaced.

                           (f)      Intercompany Indebtedness permitted under
                                    Section 5.22.

                                                                         Page 28
<Page>

         "PERMITTED INVESTMENTS": Any or all of the following:

                  (a) marketable direct full faith and credit obligations of, or
         marketable obligations guaranteed by, the United States of America;
         PROVIDED that such securities, as a group, may not, on the date of
         determination, have a remaining weighted average maturity of more than
         five years;

                  (b) marketable direct full faith and credit obligations of
         States of the United States or of political subdivisions or agencies;
         PROVIDED that such securities, as a group, may not, on the date of
         determination, have a remaining weighted average maturity of more than
         five years; and PROVIDED, FURTHER, that such obligations carry a rating
         of "A" or better by a Rating Service;

                  (c) certificates of deposit and bankers acceptances maturing
         within one year after the acquisition thereof issued by (i) Fleet
         National Bank, or (ii) any commercial bank organized under the laws of
         the United States of America or of any political subdivision thereof
         the long term obligations of which are rated "A" or better by a Rating
         Service;

                  (d) Eurodollar certificates of deposit maturing within one
         year after the acquisition thereof issued by any commercial bank having
         combined capital, surplus and undivided profits of at least $1 billion;
         and

                  (e) tax-exempt bonds or notes which have a remaining maturity
         at the time of purchase of no more than five years issued by any State
         of the United States or the District of Columbia, or any political
         subdivision thereof; PROVIDED, that such obligations carry a rating of
         "A" or better by a Rating Service.

         "PERMITTED OVERHEAD CONTRIBUTIONS": Rent under the Lease Agreement,
                  dated December 11, 1996, by and between JBAK Canton, or its
                  assigns, as landlord, and JBI, or its assigns, as tenant, with
                  respect to the Canton Warehouse.

         "PERMITTED PROTECTIVE OVERADVANCE" Is defined in Section 16.3(a).

         "PERSON": Any natural person, and any corporation, limited liability
                  company, trust, partnership, joint venture, or other
                  enterprise or entity.

         "POST FORECLOSURE ASSET": All or any part of the Collateral,
                  ownership of which is acquired by the

                                                                         Page 29
<Page>

                  Collateral Agent or a Nominee on account of the "bidding in"
                  at a disposition as part of a Liquidation or by reason of a
                  "deed in lieu" type of transaction.

         "PROCEEDS": Includes, without limitation, "Proceeds" as defined in the
                  UCC and each type of property described in Section 9.1 hereof.

         "PRO-RATA": A proportional distribution based upon a Lender's
                  percentage claim to the overall aggregate amount being
                  distributed.

         "PROTECTIVE OVERADVANCES": Revolving Credit Loans which are OverLoans,
                  but as to which each of the following conditions is satisfied:
                  (a) the Revolving Credit Ceiling is not exceeded; (b) when
                  aggregated with all other Protective OverAdvances, such
                  Revolving Credit Loans do not aggregate more than 5% of the
                  aggregate of the Borrowing Base; and (c) such Revolving Credit
                  Loans are made or undertaken in the Agents' discretion to
                  protect and preserve the interests of the Lenders.

         "RECEIPTS": All cash, cash equivalents, money, checks, credit card
                  slips, receipts and other Proceeds from any sale of the
                  Collateral.

         "RECEIVABLES ADVANCE RATE": 75%.

         "RECEIVABLES COLLATERAL": That portion of the Collateral which consists
                  of Accounts, Accounts Receivable, General Intangibles, Chattel
                  Paper, Instruments, Documents of Title, Documents, Investment
                  Property, Payment Intangibles, Letter-of-Credit Rights,
                  bankers' acceptances, and all other rights to payment.

         "RECEIVABLES RESERVES": Such Reserves as may be established from time
                  to time by the Administrative Agent in the Administrative
                  Agent's reasonable discretion with respect to the
                  determination of the collectibility in the ordinary course and
                  of the creditworthiness of the applicable Account Debtor.
                  Without limiting the generality of the foregoing, Receivables
                  Reserves shall include (but are not limited to) reserves based
                  on the following:

                           (i)      The aggregate of all accounts receivables
                                    which are more than 60 days past invoice.

                           (ii)     The aggregate of all accounts receivable
                                    owed by any Account Debtor 25% or more of
                                    whose accounts are more than 60 days past
                                    invoice.

                                                                         Page 30
<Page>

                           (iii)    The aggregate of all accounts receivable
                                    which arise out of the sale by a Loan Party
                                    of goods consigned or delivered to such Loan
                                    Party or to the Account Debtor on sale or
                                    return terms (whether or not compliance has
                                    been made with the applicable provisions of
                                    Article 2 of the UCC).

                           (iv)     The aggregate of all accounts receivable
                                    which arise out of any sale made on a basis
                                    other than upon terms usual to the business
                                    of a Loan Party.

                           (v)      The aggregate of all accounts receivable
                                    which arise out of any sale made on a "bill
                                    and hold," dating, or delayed shipping
                                    basis.

                           (vi)     The aggregate of all accounts receivable
                                    which are owed by any Account Debtor whose
                                    principal place of business is not within
                                    the United States, the District of Columbia,
                                    or Canada.

                           (vii)    The aggregate of all accounts receivable
                                    which are owed by any Affiliate.

                           (viii)   The aggregate of all accounts receivable to
                                    the extent that the Account Debtor holds or
                                    is entitled to any claim, counterclaim, set
                                    off, or chargeback as determined by the
                                    Administrative Agent in its discretion.

                           (ix)     The aggregate of all accounts receivable
                                    which are evidenced by a promissory note or
                                    other documentation evidencing modified
                                    payment terms.

                           (x)      The aggregate of all accounts receivable
                                    which are owed by any person employed by, or
                                    a salesperson of, a Loan Party.

                           (xi)     That portion of Eligible Receivables owed by
                                    any Account Debtor which exceed15% of all
                                    Eligible Receivables owed by all Account
                                    Debtors.

         "REGISTER": Is defined in Section 17.2(c).

         "REQUIREMENTS OF LAW": As to any Person:

                           (a) Applicable Law.

                           (b) That Person's organizational documents.

                           (c) That Person's by-laws and/or other instruments
                  which deal with corporate or similar governance, as
                  applicable.

         "RESERVE PERCENTAGE": The decimal equivalent of that rate applicable to
                  the Lender under regulations issued from time to time by the
                  Board of Governors of the Federal Reserve System for
                  determining the maximum reserve requirement of Lender with
                  respect to "Eurocurrency liabilities" as defined in such
                  regulations. The Reserve Percentage

                                                                         Page 31
<Page>

                  applicable to a particular Libor Loan shall be based upon that
                  in effect during the subject Interest Period, with changes in
                  the Reserve Percentage which take effect during such Interest
                  Period to take effect (and to consequently change any interest
                  rate determined with reference to the Reserve Percentage) if
                  and when such change is applicable to such loans.

         "RESERVES": The following: Receivables Reserves; Availability Reserves;
                  and Inventory Reserves.

         "RETAIL":As reflected in a Loan Party's stock ledger, being the
                  current ticket price aggregated by SKU, except that to the
                  extent that Eligible Inventory is not reflected in the stock
                  ledger, "Retail" shall be determined as tracked on such non
                  stock ledger inventory systems of a Loan Party which are
                  deemed adequate for such purpose by the Administrative Agent
                  in the exercise of the Administrative Agent's discretion.

         "REVOLVING CREDIT": Is defined in Section 2.1.

         "REVOLVING CREDIT CASUAL MALE COMPANIES INVENTORY ADVANCE RATE": 30.4%

         "REVOLVING CREDIT DESIGNS, INC. COMPANIES INVENTORY ADVANCE RATE": 63%.

         "REVOLVING CREDIT CEILING": $120,000,000.00.

         "REVOLVING CREDIT COMMITMENT FEE": Is defined in Section 2.13.

         "REVOLVING CREDIT DEBT": At any time, the lesser of (a) or (b), where

                           (a) is $120,000,000.00.

                           (b) is Indebtedness of the Borrowers on account of
                  loans and advances under the Revolving Credit which
                  Indebtedness, when incurred or when Acceleration takes place,
                  is within amounts available to be borrowed under the Revolving
                  Credit or constitutes Protective OverAdvances, as reflected on
                  the Borrowing Base Certificate (if any) in reliance on which
                  the subject loan or advance was made, IT BEING UNDERSTOOD
                  that, (i) in the absence of manifest computational error by
                  the Borrowers' Representative, the Administrative Agent may
                  rely on, and the Tranche B Lender shall be bound by, the

                                                                         Page 32
<Page>

                  determination of such availability as reflected on such
                  Borrowing Base Certificate, and (ii) the status of
                  indebtedness as "Revolving Credit Debt" is determined without
                  regard to any subsequent declination in the appraised value of
                  the Inventory or other assets on which such availability had
                  been so determined, and (iii) the occurrence of a Tranche B
                  Availability Breach, in and of itself, shall not affect the
                  status of indebtedness as "Revolving Credit Debt". (For
                  purposes of the determination of whether a loan or advance to
                  cover the honoring of a L/C constitutes "Revolving Credit
                  Debt", the date of issuance of the subject L/C shall
                  constitute the date on which the subject indebtedness was
                  incurred).

         "REVOLVING CREDIT DOLLAR COMMITMENT": As set forth on EXHIBIT 2.24,
                  annexed hereto (as such amounts may change in accordance with
                  the provisions of this Agreement).

         "REVOLVING CREDIT EARLY TERMINATION FEE": Is defined in Section 2.16.

         "REVOLVING CREDIT FEES": The Unused Line Fee, Revolving Credit
                  Commitment Fee, Revolving Credit Early Termination Fee, fees
                  for L/C's which are specifically for the account of the
                  Revolving Credit Lenders and all other fees (such as a fee (if
                  any) on account of the execution of an amendment of a Loan
                  Document) payable by any Borrower in respect of the Revolving
                  Credit other than any amount payable to an Agent as
                  reimbursement for any cost or expense incurred by that Agent
                  on account of the discharge of that Agent's duties under the
                  Loan Documents.

         "REVOLVING CREDIT LENDERS": Each Revolving Credit Lender to which
                  reference is made in the Preamble and any other Person who
                  becomes a "Revolving Credit Lender" in accordance with the
                  provisions of this Agreement.

         "REVOLVING CREDIT LOANS": Loans made under the Revolving Credit, EXCEPT
                  THAT where the term "Revolving Credit Loan" is used with
                  reference to available interest rates applicable to the loans
                  under the Revolving Credit, it refers to so much of the unpaid
                  principal balance of the Loan Account as bears the same rate
                  of interest for the same Interest Period. (SEE Section
                  2.12(c)).

         "REVOLVING CREDIT NOTE": Is defined in Section 2.10.

                                                                         Page 33
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         "REVOLVING CREDIT OBLIGATIONS": The aggregate of the Borrowers'
                  liabilities, obligations, and indebtedness of any character on
                  account of or in respect to the Revolving Credit.

         "REVOLVING CREDIT PERCENTAGE COMMITMENT": As set forth on EXHIBIT 2.24,
                  annexed hereto (as such amounts may change in accordance with
                  the provisions of this Agreement).

         "REVOLVING CREDIT SENIOR COLLATERAL": All Collateral other than the
                  Tranche B Senior Collateral.

         "SEC":   The Securities and Exchange Commission.

         "SECUREX": Securex LLC, a Delaware limited liability company.

         "STANDSTILL PERIOD": A 15 consecutive day period initiated by written
                  notice by the Tranche B Lender to the Administrative Agent, in
                  accordance with Section 14.2(a), after the occurrence of a
                  Tranche B Loan Action Event (other than a Bankruptcy Breach).

         "STATED AMOUNT": The maximum amount for which an L/C may be honored.

         "STORE": Each location at which a Loan Party regularly offers Inventory
                  for sale to the public.

         "SUBORDINATED INDEBTEDNESS": The Indebtedness evidenced by the 12%
                  Subordinated Note and the 5% Subordinated Note.

         "SUBORDINATION AGREEMENTS": The several Subordinated Agreements between
                  the holders of the 12% Subordinated Note and the 5%
                  Subordinated Note, on the one hand, and FRFI, as agent for the
                  Lenders, and the Borrowers, on the other hand, each dated as
                  of May 14, 2002.

         "SUBSCRIPTION AGREEMENT": Collectively, the Designs, Inc. Subscription
                  Agreement for Common Stock dated as of April 26, 2002 between
                  Designs, Inc. and the purchasers named therein and the
                  Designs, Inc. Subscription Agreement for Preferred Stock dated
                  as of April 26, 2002 between Designs, Inc. and the purchasers
                  named therein.

         "SUBSIDIARY": With respect to any Person, any corporation, partnership
                  or other entity of which

                                                                         Page 34
<Page>

                  securities or other ownership interests having ordinary voting
                  power to elect a majority of the board of directors or other
                  Persons performing similar functions are at the time directly
                  or indirectly owned by such Person.

         "SUPERMAJORITY LENDERS": Lenders (other than Delinquent Revolving
                  Credit Lenders) holding 66-2/3% or more of the Loan
                  Commitments (other than Loan Commitments held by a Delinquent
                  Revolving Credit Lender).

         "SUPERMAJORITY REVOLVING CREDIT LENDERS": Revolving Credit Lenders
                  (other than Delinquent Revolving Credit Lenders) holding
                  66-2/3% or more of the Loan Commitments which support the
                  Revolving Credit (other than such Loan Commitments held by a
                  Delinquent Revolving Credit Lender).

         "SUPPORTING OBLIGATION": Has the meaning given that term in UCC and
                  also refers to a Letter-of-Credit Right or secondary
                  obligation which supports the payment or performance of an
                  Account, Chattel Paper, a Document, a General Intangible, an
                  Instrument, or Investment Property.

         "SWINGLINE": The facility pursuant to which the SwingLine Lender may
                  advance Revolving Credit Loans aggregating up to the SwingLine
                  Loan Ceiling.

         "SWINGLINE LENDER": FRFI.

         "SWINGLINE LOAN CEILING": $15,000,000.

         "SWINGLINE LOANS": Defined in Section 2.8.

         "TERMINATION DATE": The earliest of (a) the Maturity Date; or (b) the
                  Administrative Agent's notice to the Borrowers' Representative
                  setting the Termination Date on account of the occurrence of
                  any Event of Default; or (c) a date, irrevocable written
                  notice of which is provided by the Borrowers' Representative
                  to the Administrative Agent, which is at least ninety (90)
                  days after the date of such written notice.

         "TRANCHE B AVAILABILITY BREACH": The aggregate of the following is
                  equal to or less than zero:

                                                                         Page 35
<Page>

                  (a)      The Tranche B Borrowing Base

                           MINUS

                  (b)      The aggregate unpaid balance of the Loan Account

                           MINUS

                  (c)      The aggregate undrawn Stated Amount of all then
                           outstanding L/C's.

                           MINUS

                  (d)      The then unpaid principal balance of the Tranche B
                           Loan and all accrued but unpaid interest thereon.

                           MINUS

                  (e)      The aggregate of the Availability Reserves.

         "TRANCHE B BORROWING BASE": The aggregate of the following:

                  (a)      For the Casual Male Companies, the lesser of

                           (i)      The product of the Retail of Eligible
                                    Inventory (net of Inventory Reserves) of the
                                    Casual Male Companies multiplied by the
                                    Tranche B Casual Male Companies Inventory
                                    Advance Rate, and

                           (ii)     (A) 105% of the Appraised Inventory
                                    Liquidation Value of the Inventory of the
                                    Casual Male Companies from the Closing Date
                                    through and including November 30, 2002, and

                                    (B) 100% of the Appraised Inventory
                                    Liquidation Value of the Inventory of the
                                    Casual Male Companies from December 1, 2002,
                                    through and including November 30, 2003, and

                                    (C) 95% of the Appraised Inventory
                                    Liquidation Value of the Inventory of the
                                    Casual Male Companies from December 1, 2003
                                    and thereafter.

                           PLUS

                  (b)      (a)      For the Designs, Inc. Companies, the lesser
                                    of

                           (i)      The Cost of Eligible Inventory (net of
                                    Inventory Reserves) of the Designs,

                                                                         Page 36
<Page>

                                    Inc. Companies multiplied by the Tranche B
                                    Designs, Inc. Companies Inventory Advance
                                    Rate ; or

                           (ii)     95% of the Appraised Inventory Liquidation
                                    Value of the Inventory of the Designs, Inc.
                                    Companies

                           PLUS

                  (c)      The face amount of Eligible Credit Card Receivables
                           multiplied by the Credit Card Advance Rate.

                           PLUS

                  (d)      The face amount of Eligible Receivables (net of
                           Receivables Reserves) multiplied by the Receivables
                           Advance Rate.

         "TRANCHE B CASUAL MALE COMPANIES INVENTORY ADVANCE RATE": 37.5%

         "TRANCHE B CURRENT PAY INTEREST": Is defined in Section 3.4(c)(i)

         "TRANCHE B COMMITMENT FEE": Described in Section 3.5.

         "TRANCHE B DESIGNS, INC. DIVISION INVENTORY ADVANCE RATE": 70%.

         "TRANCHE B EARLY TERMINATION FEE": Defined in Section 3.3(b).

         "TRANCHE B FEES": The Tranche B Commitment Fee, the Tranche B Early
                  Termination Fee, the Tranche B Monitoring Fee and all other
                  fees (such as a fee (if any) on account of the execution of an
                  amendment of any Loan Document) payable by any Borrower in
                  respect of the Tranche B Loan other than any amount payable to
                  an Agent as reimbursement for any cost or expense incurred by
                  that Agent on account of the discharge of that Agent's duties
                  under the Loan Documents.

         "TRANCHE B INTEREST PAYMENT DATE": Defined in Section 3.4(c)(i).

         "TRANCHE B INTEREST RATE": Defined in Section 3.4(a).

                                                                         Page 37
<Page>

         "TRANCHE B LENDER": Defined in the Preamble.

         "TRANCHE B LOAN ": Defined in Section 3.1.

         "TRANCHE B LOAN ACTION EVENT": The occurrence of any of the following:
                  a Tranche B Availability Breach; a Financial Covenant Breach;
                  a Bankruptcy Breach; or a Tranche B Payment Breach.

         TRANCHE B LOAN PREPAYMENT CONDITIONS": The following:

                  (a) The subject prepayment is made after May 14, 2003.

                  (b) Excess Availability, for each of the 45 days prior to the
         making of such prepayment, is not less than $40,000,000.

                  (c) Immediately after, and giving effect to such prepayment,
         Excess Availability is not less than $30,000,000.

                  (d) EBITDA for the 12 months immediately prior to such
         prepayment is not less than 80% of EBITDA for such period projected in
         the Business Plan.

                  (e) No more than fifteen days prior to such prepayment, the
         Borrowers' Representative has provided the Administrative Agent with a
         forecast, for the then next succeeding 12 month period which reflects
         that Excess Availability will never be less than $30,000,000.

                  (f) On the date on which such prepayment is made and
         immediately after giving effect to such prepayment, no Default shall
         have occurred and be continuing.

         "TRANCHE B MONITORING FEE": Described in Section 3.5.

         "TRANCHE B NOTE": Defined in Section 3.2.

         "TRANCHE B PAYMENT BREACH": The failure by the Borrowers to have made
                  any payment on account of the Borrowers' Liabilities to the
                  Tranche B Lender under the Loan Documents prior to expiry of
                  any grace period applicable to such payment.

         "TRANCHE B PIK INTEREST": Defined in Section 3.4(c)(ii).

         "TRANCHE B SENIOR COLLATERAL": All Collateral which consists of
                  Equipment.

                                                                         Page 38
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         "TRANSFER": Wire transfer pursuant to the wire transfer system
                  maintained by the Board of Governors of the Federal Reserve
                  Board, or as otherwise may be agreed to from time to time by
                  the Administrative Agent making such Transfer and the subject
                  Revolving Credit Lender. Wire instructions may be changed in
                  the same manner that Notice Addresses may be changed (Section
                  18.1), except that no change of the wire instructions for
                  Transfers to any Revolving Credit Lender shall be effective
                  without the consent of the Administrative Agent.

         "12% SUBORDINATED NOTE": Collectively, (i) the Designs, Inc. 12%
                  Senior Subordinated Note No. 1 due 2007 in the original
                  principal amount of $10,000,000 made to Clark Partners I,
                  L.P., (ii) the Designs, Inc. 12% Senior Subordinated Note No.
                  2 due 2007 in the original principal amount of $4,500,000 made
                  to Jewelcor Management Inc., (iii) the Designs, Inc. 12%
                  Senior Subordinated Note No. 3 due 2007 in the original
                  principal amount of $1,250,000 made to Clark Partners I, L.P.,
                  (iv) the Designs, Inc. 12% Senior Subordinated Note No. 4 due
                  2007 in the original principal amount of $1,250,000 made to
                  Jewelcor Management, Inc., and (v) the Designs, Inc. 12%
                  Senior Subordinated Note No. 5 in the original principal
                  amount of $7,500,000 made to Baron Asset Fund on behalf of the
                  Baron Small Cap Fund Series.

         "UCC": The Uniform Commercial Code as in effect from time to time in
                  Massachusetts.

         "UNANIMOUS CONSENT": Consent of Lenders (other than Delinquent
                  Revolving Credit Lenders) holding 100% of the Loan Commitments
                  (other than Loan Commitments held by a Delinquent Revolving
                  Credit Lender).

         "UNUSED LINE FEE": Is defined in Section 2.15.

         "YIELD REVENUE": All amounts which are (or would be) payable on
                  account of the Tranche B Commitment Fee, the Tranche B
                  Monitoring Fee and the Tranche B Interest Rate (as if all
                  interest on the principal being prepaid were paid in cash on
                  the relevant Tranche B Interest Payment Date) with respect to
                  the Tranche B Loan.

ARTICLE 2 - THE REVOLVING CREDIT:

         2.1 . ESTABLISHMENT OF REVOLVING CREDIT

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                  (a) The Revolving Credit Lenders hereby establish a revolving
line of credit (the "REVOLVING CREDIT") in the Borrowers' favor pursuant to
which each Revolving Credit Lender, subject to, and in accordance with, this
Agreement, acting through the Administrative Agent, shall make loans and
advances and otherwise provide financial accommodations to and for the account
of the Borrowers as provided herein.

                  (b) Loans, advances, and financial accommodations under the
Revolving Credit shall be subject to Availability. The Borrowing Base and
Availability shall be determined by the Administrative Agent by reference to
Borrowing Base Certificates furnished as provided in Section 6.4, below, and
shall be subject to the following:

                           (i) Such determination shall take into account such
         Reserves as the Administrative Agent may determine as being applicable
         thereto.

                           (ii) The Retail of Eligible Inventory will be
         calculated in a manner consistent with current tracking practices,
         based on stock ledger inventory at Retail, and the Cost of Eligible
         Inventory will be calculated in a manner consistent with current
         tracking practices, based on stock ledger inventory at Cost.

                  (c) The commitment of each Revolving Credit Lender to provide
such loans, advances, and financial accommodations is subject to Section 2.24.

                  (d) The proceeds of borrowings under the Revolving Credit
shall be used solely as follows:

                           (i)      For the Casual Male Acquisition.

                           (ii)     For the Borrowers' working capital needs and
                                    general corporate purposes.

                           (iii)    For advances by the Borrowers to Guarantors
                                    to finance the purchases by Guarantors of
                                    Inventory pursuant to the Inventory Purchase
                                    Agreement and to permit such Guarantors to
                                    pay ordinary course operating expenses
                                    (including, without limitation, rent,
                                    utilities and taxes).

                           (iii)    For Capital Expenditures to the extent
                                    permitted by this Agreement.

         2.2. ADVANCES IN EXCESS OF BORROWING BASE (OVERLOANS).

                  (a) No Revolving Credit Lender has any obligation to make any
loan or advance, or otherwise to provide any credit to or for the benefit of the
Borrowers where the result of such loan, advance, or credit is an OverLoan.

                  (b) The Revolving Credit Lenders' obligations, among
themselves, are subject to Section 13.3(a) (which relates to each Revolving
Credit Lender's making amounts available to the Administrative Agent) and to
Section 16.3(a) (which relates to Protective OverAdvances).

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                  (c) The Revolving Credit Lenders' providing of an OverLoan on
any one occasion does not affect the obligations of each Borrower hereunder
(including each Borrower's obligation to immediately repay any amount which
otherwise constitutes an OverLoan) nor obligate the Revolving Credit Lenders to
do so on any other occasion.

         2.3. INITIAL RESERVES. CHANGES TO RESERVES.

                  (a) At the execution of this Agreement, the only Reserves are
as reflected on the Borrowing Base Certificate, a specimen of which is annexed
hereto as EXHIBIT 6.4.

                  (b) The Administrative Agent shall provide not less than seven
(7) days prior notice to the Borrowers' Representative of the establishment of
any Reserve (other than those established at the execution of this Agreement)
EXCEPT THAT the following may be undertaken without such prior notice:

                           (i) a change to the amount of a then existing Reserve
         (as distinguished from a change by which such Reserve is measured or
         determined), which change reflects changed circumstances (e.g. the
         amount of the Reserve for Customer Credit Liability will change based
         on the aggregate of Customer Credit Liability at any one time); and

                           (ii) the creation of, or a change to an existing,
         Reserve on account of circumstances which the Administrative Agent
         determines as having a material adverse change on the maintenance of
         loan to collateral values.

         2.4. RISKS OF VALUE OF COLLATERAL. The Administrative Agent's reference
to a given asset in connection with the making of loans, credits, and advances
and the providing of financial accommodations under the Revolving Credit and/or
the monitoring of compliance with the provisions hereof shall not be deemed a
determination by the Administrative Agent or any Revolving Credit Lender
relative to the actual value of the asset in question. All risks concerning the
value of the Collateral are and remain upon the Borrowers. All Collateral
secures the prompt, punctual, and faithful performance of the Liabilities
whether or not relied upon by the Administrative Agent in connection with the
making of loans, credits, and advances and the providing of financial
accommodations under the Revolving Credit.

         2.5. COMMITMENT TO MAKE REVOLVING CREDIT LOANS AND SUPPORT LETTERS OF
CREDIT. Subject to the provisions of this Agreement, the Revolving Credit
Lenders shall make a loan or advance under the Revolving Credit and the
Administrative Agent shall cause L/C's to be issued for the account of the
Borrowers' Representative, in each instance if duly and timely requested by the
Borrowers' Representative as provided herein PROVIDED THAT:

                  (a) No OverLoan is then outstanding and none will result
therefrom.

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                  (b) No Default has occurred and is continuing or will occur as
a result of the borrowing of such loan or advance or the issuance of such L/C.

         2.6. REVOLVING CREDIT LOAN REQUESTS.

                  (a) Requests for loans and advances under the Revolving Credit
or for the continuance or conversion of an interest rate applicable to a
Revolving Credit Loan may be requested by the Borrowers' Representative in such
manner as may from time to time be reasonably acceptable to the Administrative
Agent.

                  (b) Subject to the provisions of this Agreement, the
Borrowers' Representative may request a Revolving Credit Loan and elect an
interest rate and Interest Period to be applicable to that Revolving Credit Loan
by giving notice to the Administrative Agent by no later than the following:

                           (i) If such Revolving Credit Loan is to be or is to
         be converted to a Base Margin Loan: By 1:00PM on the Business Day prior
         to the Business Day on which the subject Revolving Credit Loan is to be
         made or is to be so converted. Base Margin Loans requested by the
         Borrowers' Representative, other than those resulting from the
         conversion of a Libor Loan, shall not be less than $10,000.00.

                           (ii) If such Revolving Credit Loan is to be, or is to
         be continued as, or converted to, a Libor Loan: By 1:00PM three (3)
         Libor Business Days before the commencement of any new Interest Period
         or the end of the then applicable Interest Period. Libor Loans and
         conversions to Libor Loans shall each be not less than $1,000,000.00
         and in increments of $100,000.00 in excess of such minimum.

                           (iii) Any Libor Loan which matures while a Default
         has occurred and is continuing shall be converted, at the option of the
         Administrative Agent, to a Base Margin Loan notwithstanding any notice
         from the Borrowers' Representative that such Loan is to be continued as
         a Libor Loan.

                  (c) Any request for a Revolving Credit Loan or for the
continuance or conversion of an interest rate applicable to a Revolving Credit
Loan which is made after the applicable deadline therefor, as set forth above,
shall be deemed to have been made at the opening of business on the then next
Business Day or Libor Business Day, as applicable. Each request for a Revolving
Credit Loan or for the conversion of a Revolving Credit Loan shall be made in
such manner as may from time to time be acceptable to the Administrative Agent.

                  (d) The Borrowers' Representative may request that the
Administrative Agent cause the issuance by the Issuer of L/C's for the account
of a Borrower as provided in Section 2.19.

                  (e) The Administrative Agent may rely on any request for a
loan or advance, or other financial accommodation under the Revolving Credit
which the Administrative Agent, in good faith, believes

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to have been made by a Person duly authorized to act on behalf of the Borrowers'
Representative and may decline to make any such requested loan or advance, or
issuance, or to provide any such financial accommodation pending the
Administrative Agent's being furnished with such documentation concerning that
Person's authority to act as reasonably may be satisfactory to the
Administrative Agent.

                  (f) A request by the Borrowers' Representative for a loan or
advance, or other financial accommodation under the Revolving Credit shall be
irrevocable and shall constitute certification by each Borrower that as of the
date of such request, each of the following is true and correct:

                           (i) There has been no material adverse change in the
         Loan Parties' financial condition (taken as a whole) from the most
         recent financial information furnished Administrative Agent or any
         Lender pursuant to this Agreement.

                           (ii) Each representation, not relating to a specific
         date, which is made herein or in any of the Loan Documents is then true
         and correct in all material respects as of and as if made on the date
         of such request (except (A) to the extent of changes resulting from
         transactions contemplated or permitted by this Agreement or the other
         Loan Documents and changes occurring in the ordinary course of business
         which singly or in the aggregate are not materially adverse and (B) to
         the extent that such representations and warranties expressly relate to
         a then earlier date).

                           (iii) Unless accompanied by the Certificate of the
         Borrowers' Representative's Chief Executive Officer, President, or
         Chief Financial Officer describing (in reasonable detail) the facts and
         circumstances thereof and the steps (if any) being taken to remedy such
         condition, no Default has occurred and is continuing.

                  (g) If, at any time or from time to time, a Default shall
occur:

                           (i) The Administrative Agent may suspend the
         Revolving Credit immediately, in which event, neither the
         Administrative Agent nor any Revolving Credit Lender shall be obligated
         during such suspension, to make any loans or advance, or to provide any
         financial accommodation hereunder or to seek the issuance of any L/C.

                           (ii) The Administrative Agent may suspend the right
         of the Borrowers' Representative to request any Libor Loan or to
         convert any Base Margin Loan to a Libor Loan.

         2.7 MAKING OF REVOLVING CREDIT LOANS.

                  (a) A loan or advance under the Revolving Credit shall be made
by the transfer of the proceeds of such loan or advance to the Operating Account
or as otherwise instructed by the Borrowers' Representative.

                  (b) A loan or advance shall be deemed to have been made under
the Revolving Credit (and the Borrowers shall be indebted to the Administrative
Agent and the Revolving Credit Lenders for the amount thereof immediately) at
the following:

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                           (i) The Administrative Agent's initiation of the
         transfer of the proceeds of such loan or advance in accordance with the
         Borrowers' Representative's instructions (if such loan or advance is of
         funds requested by the Borrowers' Representative).

                           (ii) The charging of the amount of such loan to the
         Loan Account (in all other circumstances).

                  (c) There shall not be any recourse to or liability of any
Agent or any Lender on account of:

                           (i) Any delay, beyond the reasonable control of the
         Agents and the Revolving Credit Lenders, in the making of any loan or
         advance requested under the Revolving Credit.

                           (ii) Any delay, beyond the reasonable control of the
         Agents and the Revolving Credit Lenders, by any bank or other
         depository institution in treating the proceeds of any such loan or
         advance as collected funds.

                           (iii) Any delay in the receipt, and/or any loss, of
         funds which constitute a loan or advance under the Revolving Credit,
         the wire transfer of which was properly initiated by the Administrative
         Agent in accordance with wire instructions provided to the
         Administrative Agent by the Borrowers' Representative.

         2.8. SWINGLINE LOANS.

                  (a) For ease of administration, Base Margin Loans may be made
by the SwingLine Lender (in the aggregate, the "SWINGLINE LOANS") in accordance
with the procedures set forth in this Agreement for the making of loans and
advances under the Revolving Credit. The unpaid principal balance of the
SwingLine Loans shall not at any one time be in excess of the SwingLine Loan
Ceiling.

                  (b) The aggregate unpaid principal balance of SwingLine Loans
shall bear interest at the rate applicable to Base Margin Loans and shall be
repayable as a loan under the Revolving Credit.

                  (c) The Borrowers' obligation to repay SwingLine Loans shall
be evidenced by a Note in the form of EXHIBIT 2.8, annexed hereto, executed by
the Borrowers, and payable to the SwingLine Lender. Neither the original nor a
copy of that Note shall be required, HOWEVER, to establish or prove any
Liability. The Borrowers shall execute a replacement of any SwingLine Note which
has been lost, mutilated, or destroyed thereof and deliver such replacement to
the SwingLine Lender.

                  (d) For all purposes of this Loan Agreement, the SwingLine
Loans and the Borrowers' obligations to the SwingLine Lender constitute
Revolving Credit Loans and are secured as "Liabilities".

                  (e) SwingLine Loans may be subject to periodic settlement with
the Revolving Credit Lenders as provided in this Agreement.

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         2.9. THE LOAN ACCOUNT.

                  (a) An account ("LOAN ACCOUNT") shall be opened on the books
of the Administrative Agent in which a record shall be kept of all loans and
advances made under the Revolving Credit.

                  (b) The Administrative Agent shall also keep a record (either
in the Loan Account or elsewhere, as the Administrative Agent may from time to
time elect) of all interest, fees, service charges, costs, expenses, and other
debits owed to the Administrative Agent and each Lender on account of the
Liabilities and of all credits against such amounts so owed.

                  (c) All credits against the Liabilities shall be conditional
upon final payment to the Administrative Agent for the account of each Lender of
the items giving rise to such credits. The amount of any item credited against
the Liabilities which is charged back against the Administrative Agent or any
Lender for any reason or is not so paid shall be a Liability and, if arising
under the Revolving Credit, shall be added to the Loan Account, whether or not
the item so charged back or not so paid is returned.

                  (d) Except as otherwise provided herein, all fees, service
charges, costs, and expenses for which any Borrower is obligated hereunder are
payable on demand. In the determination of Availability, the Administrative
Agent may deem fees, service charges, accrued interest, and other payments which
will be due and payable between the date of such determination and the first day
of the then next succeeding month as having been advanced under the Revolving
Credit whether or not such amounts are then due and payable.

                  (e) The Administrative Agent, without the request of the
Borrowers' Representative, may advance under the Revolving Credit any interest,
fee, service charge, or other payment to which any Agent or any Lender is
entitled from any Borrower pursuant hereto and may charge the same to the Loan
Account notwithstanding that an OverLoan may result thereby. Such action on the
part of the Administrative Agent shall not constitute a waiver of the
Administrative Agent's rights and each Borrower's obligations under Section
2.11(b). Any amount which is added to the principal balance of the Loan Account
as provided in this Section 2.9(e) shall bear interest at the interest rate then
and thereafter applicable to Base Margin Loans.

                  (f) In the absence of manifest error, a statement rendered by
the Administrative Agent or any Lender to the Borrowers' Representative
concerning the Liabilities shall be considered correct and accepted by each
Borrower and shall be conclusively binding upon each Borrower unless the
Borrowers' Representative provides the Administrative Agent with written
objection thereto within thirty (30) days from the mailing of such statement,
which written objection shall indicate, with particularity, the reason for such
objection. In the absence of manifest error, the Loan Account and the
Administrative Agent's books and records concerning the loan arrangement
contemplated herein and the Liabilities shall be prima facie evidence and proof
of the items described therein.

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         2.10. THE REVOLVING CREDIT NOTES. The Borrowers' obligation to repay
loans and advances under the Revolving Credit, with interest as provided herein,
shall be evidenced by notes (each, a "REVOLVING CREDIT NOTE") in the form of
EXHIBIT 2.10, annexed hereto, executed by each Borrower, one payable to each
Revolving Credit Lender. Neither the original nor a copy of any Revolving Credit
Note shall be required, HOWEVER, to establish or prove any Liability. Upon the
Borrowers' Representative's being provided with an affidavit, from the
Administrative Agent to the effect that any Revolving Credit Note has been lost,
mutilated, or destroyed, the Borrowers shall execute a replacement thereof and
deliver such replacement to the Administrative Agent.

         2.11. PAYMENT OF THE LOAN ACCOUNT.

                  (a) The Borrowers MAY repay all or any portion of the
principal balance of the Loan Account from time to time until the Termination
Date. Unless the Borrowers' Representative otherwise advises the Administrative
Agent, such payments shall be applied first to Base Margin Loans and only then
to Libor Loans.

                  (b) The Borrowers, without notice or demand from the
Administrative Agent or any Revolving Credit Lender, SHALL pay the
Administrative Agent that amount, from time to time, which is necessary so that
there is no OverLoan outstanding.

                  (c) The Borrowers SHALL repay the then entire unpaid balance
of the Loan Account and all other Liabilities on the Termination Date.

                  (d) The Administrative Agent shall endeavor to cause the
application of payments (if any), pursuant to Sections 2.11(a) and 2.11(b)
against Libor Loans then outstanding in such manner as results in the least cost
to the Borrowers, but shall not have any affirmative obligation to do so nor
liability on account of the Administrative Agent's failure to have done so. In
no event shall action or inaction taken by the Administrative Agent excuse any
Borrower from any indemnification obligation under Section 2.11(e).

                  (e) The Borrowers shall indemnify the Administrative Agent and
each Revolving Credit Lender and hold the Administrative Agent and each
Revolving Credit Lender harmless from and against any loss, cost or expense
(including loss of anticipated profits and amounts payable by the Administrative
Agent or such Revolving Credit Lender on account of "breakage fees" (so-called))
which the Administrative Agent or such Revolving Credit Lender may sustain or
incur (including, without limitation, by virtue of acceleration after the
occurrence of any Event of Default) as a consequence of the following:

                           (i) Default by any Borrower in payment of the
         principal amount of or any interest on any Libor Loan as and when due
         and payable, including any such loss or expense arising from interest
         or fees payable by such Revolving Credit Lender in order to maintain
         its Libor Loans.

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                           (ii) Default by any Borrower in making a borrowing or
         conversion after the Borrowers' Representative has given (or is deemed
         to have given) a request for a Revolving Credit Loan or a request to
         convert a Revolving Credit Loan from one applicable interest rate to
         another.

                           (iii) The making of any payment on a Libor Loan or
         the making of any conversion of any such Loan to a Base Margin Loan on
         a day that is not the last day of the applicable Interest Period with
         respect thereto.

         2.12. INTEREST ON REVOLVING CREDIT LOANS.

                  (a) Each Revolving Credit Loan shall bear interest at the Base
Margin Rate unless timely notice is given (as provided in Section 2.6) that the
subject Revolving Credit Loan (or a portion thereof) is, or is to be converted
to, a Libor Loan.

                  (b) Each Revolving Credit Loan which consists of a Libor Loan
shall bear interest at the applicable Libor Rate .

                  (c) Subject to, and in accordance with, the provisions of this
Agreement, the Borrowers' Representative may cause all or a part of the unpaid
principal balance of the Loan Account to bear interest at the Base Margin Rate
or the Libor Rate as specified from time to time by notice to the Administrative
Agent. For ease of reference and administration, each part of the Loan Account
which bears interest at the same interest and for the same Interest Period is
referred to herein as if it were a separate "Revolving Credit Loan".

                  (d) The Borrowers' Representative shall not select, renew, or
convert any interest rate for a Revolving Credit Loan such that, in addition to
interest at the Base Margin Rate, there are more than seven (7) Libor Rates
applicable to the Revolving Credit Loans at any one time.

                  (e) The Borrowers shall pay accrued and unpaid interest on
each Revolving Credit Loan in arrears as follows:

                           (i) On the applicable Interest Payment Date for that
                  Revolving Credit Loan.

                           (ii) On the Termination Date and on the End Date.

                           (iii) Following the occurrence of any Event of
                  Default, with such frequency as may be determined by the
                  Administrative Agent.

                  (f) Following the occurrence of any Event of Default (and
whether or not the Administrative Agent exercises the Administrative Agent's
rights on account thereof), all Revolving Credit Loans shall bear interest, at
the option of the Administrative Agent or at the instruction of the
SuperMajority Revolving Credit Lenders, at a rate which is the aggregate of the
rate applicable to Base Margin Loans PLUS three percent (3%) per annum.

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         2.13. REVOLVING CREDIT COMMITMENT FEE. In consideration of the
commitment to make loans and advances to the Borrowers under the Revolving
Credit, and to maintain sufficient funds available for such purpose, there has
been earned by FRFI and the Borrowers shall pay the "REVOLVING CREDIT COMMITMENT
FEE" (so referred to herein) to the Administrative Agent in the amount and
payable as provided in the Fee Letter.

         2.14. ADMINISTRATIVE AGENT'S FEE. In addition to any other fee or
expense to be paid by the Borrowers on account of the Revolving Credit, the
Borrowers shall pay the Administrative Agent the "ADMINISTRATIVE AGENT'S FEE" at
the times and in the amounts as set forth in the Fee Letter.

         2.15. UNUSED LINE FEE. In addition to any other fee to be paid by the
Borrowers on account of the Revolving Credit, the Borrowers shall pay the
Administrative Agent the "UNUSED LINE FEE" (so referred to herein) of 0.375% per
annum of the average difference, during the quarter just ended (or relevant
period with respect to the payment being made on the Termination Date) between
the Revolving Credit Ceiling and the aggregate of the unpaid principal balance
of the Loan Account and the undrawn Stated Amount of L/C's outstanding during
the relevant period. The Unused Line Fee shall be paid in arrears, on the first
day of each quarter after the execution of this Agreement and on the Termination
Date.

         2.16. REVOLVING CREDIT EARLY TERMINATION FEE.

                  (a) In the event that the Termination Date occurs, for any
reason (whether by virtue of Acceleration or otherwise), prior to the Maturity
Date, then except as provided in Section 2.16(b), the Borrowers shall pay the
Administrative Agent, for the Pro-Rata account of the Revolving Credit Lenders,
the "REVOLVING CREDIT EARLY TERMINATION FEE" (so referred to herein) consisting
of (i) one and one-half percent (1 1/2%) of the Revolving Credit Ceiling in
effect as of the date of this Agreement if the Termination Date shall occur at
any time prior to the first anniversary of the Closing Date and (i) one percent
(1%) of the Revolving Credit Ceiling in effect as of the date of this Agreement
if the Termination Date shall occur at any time after the first anniversary of
the Closing Date and more than 90 days prior to the Maturity Date.

                  (b) No Revolving Credit Early Termination Fee shall be due and
payable in the event of the early termination of the Revolving Credit in
connection with a refinancing of the Revolving Credit which is agented or
provided by FRFI or any Affiliate of FRFI, IT BEING UNDERSTOOD THAT neither FRFI
nor any affiliate of FRFI has agreed to provide any such refinancing.

         2.17. INTENTIONALLY OMITTED.

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         2.18. AGENTS' AND LENDERS' DISCRETION.

                  (a) Each reference in the Loan Documents to the exercise of
discretion, reasonable discretion, or the like by any Agent or any Lender shall
be to such Person's reasonable exercise of its judgment, in good faith (which
shall be rebuttably presumed), based upon such Person's consideration of any
such factors as that Agent or that Lender, taking into account information of
which that Person
then has actual knowledge, reasonably believes:

                           (i) Will or reasonably could be expected to affect,
         in more than a DE MINIMIS manner, the value of the Collateral, the
         enforceability of the Collateral Agent's Collateral Interests therein,
         or the amount which the Collateral Agent would likely realize therefrom
         (taking into account delays which may possibly be encountered in the
         Collateral Agent's realizing upon the Collateral and likely Costs of
         Collection).

                           (ii) Indicates that any report or financial
         information delivered to any Agent or any Lender by or on behalf of any
         Loan Party is incomplete, inaccurate, or misleading in any material
         manner or was not prepared in accordance with the requirements of this
         Agreement.

                           (iii) That a Default has occurred and is continuing.

                  (b) In the exercise of such judgement, each Agent or each
Lender reasonably also may take into account any of the following factors:

                           (i) Those included in, or tested by, the definitions
         of "Eligible Accounts" and "Eligible Inventory".

                           (ii) The current financial and business climate of
         the industry in which each Loan Party competes (having regard for that
         Loan Party's position in that industry).

                           (iii) General macroeconomic conditions which have a
         material effect on the Loan Parties' cost structure.

                           (iv) Material changes in or to the mix of the
         Borrowers' Inventory.

                           (v) Seasonality with respect to the Borrowers'
         Inventory and patterns of retail sales.

                           (vi) Such other factors as each Agent and each Lender
         reasonably determine as having a material bearing on credit risks
         associated with the providing of loans and financial accommodations to
         the Borrowers.

                  (c) The burden of establishing the failure of any Agent or any
Lender to have acted in a reasonable manner in such Person's exercise of such
discretion shall be the Loan Parties' and may be made only by clear and
convincing evidence.

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         2.19.    PROCEDURES FOR ISSUANCE OF L/C'S.

                  (a) The Borrowers' Representative may request that the
Administrative Agent cause the issuance by the Issuer of L/C's for the account
of a Borrower. Each such request shall be in such manner as may from time to
time be reasonably acceptable to the Administrative Agent.

                  (b) The Administrative Agent will endeavor to cause the
issuance of any L/C so requested by the Borrowers' Representative, PROVIDED
THAT, at the time that the request is made, the Revolving Credit has not been
suspended as provided in Section 2.6(g) and if so issued:

                           (i) The aggregate Stated Amount of all L/C's then
         outstanding, does not exceed $20,000,000.

                           (ii) The expiry of the L/C is not later than the
         earlier of thirty (30) days prior to the Maturity Date or the
         following:

                                    (A) Standby's: One (1) year from initial
                                    issuance.

                                    (B) Documentary's: one hundred (100) days
                                    from issuance.

                           (iii) If the expiry of an L/C is later than the
         Maturity Date, it is 103% cash collateralized at its issuance.

                           (iv) An OverLoan will not result from the issuance of
         the subject L/C.

                  (c) Each Borrower shall execute such documentation to apply
for and support the issuance of an L/C as may be required by the Issuer.

                  (d) There shall not be any recourse to, nor liability of, any
Agent or any Lender on account of

                           (i) Any delay or refusal by an Issuer to issue an
          L/C;

                           (ii) Any action or inaction of an Issuer on account
         of or in respect to, any L/C except where there is a specific finding
         in a judicial proceeding (in which the Administrative Agent has had an
         opportunity to be heard), from which finding no further appeal is
         available, that the subject action or omission to act had been in
         actual bad faith or grossly negligent or constituted willful
         misconduct.

                  (e) The Borrowers shall reimburse the Issuer for the amount of
any honoring of a drawing under an L/C on the same day on which such honoring
takes place. The Administrative Agent, without the request of any Borrower, may
advance under the Revolving Credit (and charge to the Loan Account) the amount
of any honoring of any L/C and other amount for which any Borrower, the Issuer,
or the Revolving Credit Lenders become obligated on account of, or in respect
to, any L/C. Such advance shall be made whether or not any Default has occurred
and is continuing or such advance would result in an OverLoan. Such action shall
not constitute a waiver of the Administrative Agent's rights under Section
2.11(b) hereof.

                                                                         Page 50
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         2.20. FEES FOR L/C'S.

                  (a) The Borrowers shall pay to the Administrative Agent the
following per annum fees on account of L/C's, the issuance of which had been
procured by the Administrative Agent monthly in arrears, and on the Termination
Date and on the End Date based on the weighted average Stated Amount of L/C's
outstanding during the period in respect of which such fee is being paid EXCEPT
THAT, following the occurrence and during the continuance of any Event of
Default (and whether or not the Administrative Agent exercises the
Administrative Agent's rights on account thereof), such fees, at the option of
the Administrative Agent or the direction of the SuperMajority Revolving Credit
Lenders, shall be the respective aggregate of those set forth below PLUS three
percent (3%) per annum.

                  (i) Documentaries: The Libor Margin then in effect MINUS 50
         basis points.

                  (ii) Standbys: The Libor Margin then in effect.

                  (b) In addition to the fee to be paid as provided in
Subsection 2.20(a) above, the Borrowers shall pay to the Administrative Agent
(or to the Issuer, if so requested by Administrative Agent), on demand, all
customary issuance, processing, negotiation, amendment, and administrative fees
and other amounts charged by the Issuer on account of, or in respect to, any
L/C.

                  (c) If any change in Applicable Law shall either:

                           (i) impose, modify or deem applicable any reserve,
         special deposit or similar requirements against letters of credit
         heretofore or hereafter issued by any Issuer or with respect to which
         any Revolving Credit Lender or any Issuer has an obligation to lend to
         fund drawings under any L/C; or

                           (ii) impose on any Issuer any other condition or
         requirements relating to any such letters of credit;

and the result of any event referred to in Section 2.20(c)(i) or 2.20(c)(ii),
above, shall be to increase the cost to any Revolving Credit Lender or to any
Issuer of issuing or maintaining any L/C (which increase in cost shall be the
result of such Issuer's reasonable allocation among that Revolving Credit
Lender's or Issuer's letter of credit customers of the aggregate of such cost
increases resulting from such events), then, upon demand by the Administrative
Agent and delivery by the Administrative Agent to the Borrowers' Representative
of a certificate of an officer of the subject Revolving Credit Lender or the
subject Issuer describing such change in law, executive order, regulation,
directive, or interpretation thereof, its effect on such Revolving Credit Lender
or such Issuer, and the basis for determining such increased costs and their
allocation, the Borrowers shall immediately pay to the Administrative Agent,
from time to time as specified by the Administrative Agent, such amounts as
shall be sufficient to compensate the subject Revolving Credit Lender or the
subject Issuer for such increased cost. In the absence of manifest error, any
Revolving Credit Lender's or any Issuer's determination of costs incurred under
Section 2.20(c)(i) or 2.20(c)(ii),

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above, and the allocation, if any, of such costs among the Borrowers and other
letter of credit customers of such Revolving Credit Lender or such Issuer, if
done in good faith and made on an equitable basis and in accordance with such
officer's certificate, shall be conclusive and binding on the Borrowers.

         2.21. CONCERNING L/C'S.

                  (a) None of the Issuer, the Issuer's correspondents, any
Lender, any Agent, or any advising, negotiating, or paying bank with respect to
any L/C shall be responsible in any way for:

                           (i) The performance by any beneficiary under any L/C
         of that beneficiary's obligations to any Borrower.

                           (ii) The form, sufficiency, correctness, genuineness,
         authority of any person signing; falsification; or the legal effect of;
         any documents called for under any L/C if (with respect to the
         foregoing) such documents on their face appear to be in order.

                  (b) The Issuer may honor, as complying with the terms of any
L/C and of any drawing thereunder, any drafts or other documents otherwise in
order, but signed or issued by an administrator, executor, conservator, trustee
in bankruptcy, debtor in possession, assignee for the benefit of creditors,
liquidator, receiver, or other legal representative of the party authorized
under such L/C to draw or issue such drafts or other documents.

                  (c) Unless otherwise agreed to, in the particular instance,
each Borrower hereby authorizes any Issuer to:

                           (i) Select an advising bank, if any.

                           (ii) Select a paying bank, if any.

                           (iii) Select a negotiating bank, if any.

                  (d) All directions, correspondence, and funds transfers
relating to any L/C are at the risk of the Borrowers. The Issuer shall have
discharged the Issuer's obligations under any L/C which, or the drawing under
which, includes payment instructions, by the initiation of the method of payment
called for in, and in accordance with, such instructions (or by any other
commercially reasonable and comparable method). None of the Agent, the Lenders,
or the Issuer shall have any responsibility for any inaccuracy, interruption,
error, or delay in transmission or delivery by post, telegraph or cable, or for
any inaccuracy of translation.

                  (e) Each Agent's, each Lender's and the Issuer's rights,
powers, privileges and immunities specified in or arising under this Agreement
are in addition to any heretofore or at any time hereafter otherwise created or
arising, whether by statute or rule of law or contract.

                  (f) Except to the extent otherwise expressly provided
hereunder or agreed to in writing by the Issuer and the Borrowers'
Representative, documentary L/C's will be governed by the Uniform Customs and
Practice for Documentary Credits, International Chamber of Commerce, Publication
No. 500,

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and standby L/C's will be governed by International Standby Practices ISP98
(adopted by the International Chamber of Commerce on April 6, 1998) and any
respective subsequent revisions thereof.

                  (g) The obligations of the Borrowers under this Agreement with
respect to L/C's are absolute, unconditional, and irrevocable and shall be
performed strictly in accordance with the terms hereof under all circumstances,
whatsoever including, without limitation, the following:

                           (i) Any lack of validity or enforceability or
         restriction, restraint, or stay in the enforcement of this Agreement,
         any L/C, or any other agreement or instrument relating thereto.

                           (ii) Any Borrower's consent to any amendment or
         waiver of, or consent to the departure from, any L/C.

                           (iii) The existence of any claim, set-off, defense,
         or other right which any
         Borrower may have at any time against the beneficiary of any L/C.

                           (iv) Any good faith honoring of a drawing under any
         L/C, which drawing possibly could have been dishonored based upon a
         strict construction of the terms of the L/C.

                  (h) Each Issuer shall be deemed to have agreed as follows:

                           (i) That any action taken or omitted by that Issuer,
that Issuer's correspondents, or any advising, negotiating or paying bank with
respect to any L/C and the related drafts and documents, shall be done in good
faith and in compliance with foreign or domestic laws.

                           (ii) That the Borrowers shall not be required to
indemnify the Issuer, the Issuer's correspondents, or any advising, negotiating
or paying bank with respect to any L/C for any claims, damages, losses,
liabilities, costs or expenses to the extent, caused by (x) the willful
misconduct or gross negligence of the Issuer, the Issuer's correspondents, or
any advising, negotiating or paying bank with respect to any L/C in determining
whether a request presented under any Letter of Credit complied with the terms
of such Letter of Credit or (y) the Issuer's failure to pay under any Letter of
Credit after the presentation to it of a request strictly complying with the
terms and conditions of such Letter of Credit.

         2.22. CHANGED CIRCUMSTANCES.

                  (a) The Administrative Agent may advise the Borrowers'
Representative (in reasonable detail as to the facts and circumstances thereof)
that the Administrative Agent has made the good faith determination (which
determination, in the absence of manifest error, shall be final and conclusive)
of any of the following:

                  (i) Adequate and fair means do not exist for ascertaining the
         rate for Libor Loans .

                           (ii) The continuation of or conversion of any
         Revolving Credit Loan to a Libor Loan has been made impracticable or
         unlawful by the occurrence of a contingency that materially and
         adversely affects the applicable market or the compliance by the
         Administrative Agent or any

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         Revolving Credit Lender in good faith with any Applicable Law.

                           (iii) The indices on which the interest rates for
         Libor Loans are based shall no longer represent the effective cost to
         the Administrative Agent or any Revolving Credit Lender for U.S. dollar
         deposits in the interbank market for deposits in which it regularly
         participates.

                  (b) In the event that the Administrative Agent advises the
Borrowers' Representative of an occurrence described in Section 2.22(a), then,
until the Administrative Agent notifies the Borrowers' Representative that the
circumstances giving rise to such notice no longer apply:

                           (i) The obligation of the Agent or each Revolving
         Credit Lender to make loans of the type affected by such changed
         circumstances or to permit the Borrowers' Representative to select the
         affected interest rate as otherwise applicable to any Revolving Credit
         Loans shall be suspended.

                           (ii) Any notice which the Borrowers' Representative
         had given the Administrative Agent with respect to any Libor Loan, the
         time for action with respect to which has not occurred prior to the
         Administrative Agent's having given notice pursuant to Section 2.22(a),
         shall be deemed at the option of the Administrative Agent to not having
         been given.

         2.23. DESIGNATION OF BORROWERS' REPRESENTATIVE AS BORROWERS' AGENT.

                  (a) Each Borrower hereby irrevocably designates and appoints
the Borrowers' Representative as that Borrower's agent to obtain loans and
advances under the Revolving Credit, and Tranche B, the proceeds of which shall
be available to each Borrower for those uses as those set forth in this
Agreement. As the disclosed principal for its agent, each Borrower shall be
obligated to the Agent and each Lender on account of loans and advances so made
as if made directly by the Lenders to that Borrower, notwithstanding the manner
by which such loans and advances are recorded on the books and records of the
Borrowers' Representative and of any Borrower. In addition, each Loan Party
other than the Borrowers hereby irrevocably designates and appoints the
Borrowers' Representative as that Loan Party's agent to represent such Loan
Party in all respects under this Agreement and the other Loan Documents.

                  (b) Each Borrower recognizes that credit available to it under
the Revolving Credit and the Tranche B Loan is in excess of and on better terms
than it otherwise could obtain on and for its own account and that one of the
reasons therefor is its joining in the credit facility contemplated herein with
all other Borrowers. Consequently, each Borrower hereby assumes and agrees to
discharge all Liabilities of each of the other Borrowers as if the Borrower
which is so assuming and agreeing were each of the other Borrowers.

                  (c) The Borrowers' Representative shall act as a conduit for
each Borrower (including itself, as a "Borrower") on whose behalf the Borrowers'
Representative has requested a Revolving Credit Loan or Tranche B Loan.

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                  (d) The proceeds of each loan and advance provided under the
Revolving Credit which is requested by the Borrowers' Representative shall be
deposited into the Operating Account or as otherwise indicated by the Borrowers'
Representative. The Borrowers' Representative shall cause the transfer of the
proceeds thereof to the (those) Borrower(s) on whose behalf such loan and
advance was obtained. Neither the Agent nor any Lender shall have any obligation
to see to the application of such proceeds.

         2.24. LENDERS' COMMITMENTS

                  (a) Subject to Section 17.1 (which provides for assignments
and assumptions of commitments), each Revolving Credit Lender's "REVOLVING
CREDIT PERCENTAGE COMMITMENT", and "REVOLVING CREDIT DOLLAR COMMITMENT"
(respectively so referred to herein) is set forth on EXHIBIT 2.24, annexed
hereto.

                  (b) The obligations of each Revolving Credit Lender are
several and not joint. No Revolving Credit Lender shall have any obligation to
make any loan or advance under the Revolving Credit in excess of either of the
following:

                           (i) That Revolving Credit Lender's Revolving Credit
         Percentage Commitment of the subject loan or advance or of
         Availability.

                           (ii) that Revolving Credit Lender's Revolving Credit
         Dollar Commitment.

                  (c) No Revolving Credit Lender shall have any liability to the
Borrowers on account of the failure of any other Revolving Credit Lender to
provide any loan or advance under the Revolving Credit nor any obligation to
make up any shortfall which may be created by such failure.

                  (d) The Revolving Credit Dollar Commitments, Revolving Credit
Commitment Percentages, and identities of the Revolving Credit Lenders (but not
the Revolving Credit Ceiling) may be changed, from time to time by the
reallocation or assignment of Revolving Credit Dollar Commitments and Revolving
Credit Commitment Percentages amongst the Revolving Credit Lenders or with other
Persons who determine to become "Revolving Credit Lenders"; PROVIDED, HOWEVER
unless an Event of Default has occurred (in which event, no consent of any
Borrower is required) any assignment to a Person not then a Revolving Credit
Lender shall be subject to the prior consent of the Borrowers' Representative
(not to be unreasonably withheld), which consent will be deemed given unless the
Borrowers' Representative provides the Administrative Agent with written
objection not more than five (5) Business Days after the Administrative Agent
shall have given the Borrowers' Representative written notice of a proposed
assignment, such notice to state that consent will be deemed given by the
Borrowers' Representative if written objection is not received by the
Administrative Agent within such five (5) Business Days.

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                  (e) Upon written notice given the Borrowers' Representative
from time to time by the Administrative Agent of any assignment or allocation
referenced in Section 2.24(d):

                           (i) Each Borrower shall execute one or more
         replacement Revolving Credit Notes to reflect such changed Revolving
         Credit Dollar Commitments, Revolving Credit Commitment Percentages, and
         identities and shall deliver such replacement Revolving Credit Notes to
         the Administrative Agent (which promptly thereafter shall deliver to
         the Borrowers' Representative the Revolving Credit Notes so replaced)
         PROVIDED HOWEVER, in the event that a Revolving Credit Note is to be
         exchanged following its acceleration or the entry of an order for
         relief under the Bankruptcy Code with respect to any Borrower, the
         Administrative Agent, in lieu of causing the Borrowers to execute one
         or more new Revolving Credit Notes, may issue the Administrative
         Agent's Certificate confirming the resulting Revolving Credit Dollar
         Commitments and Revolving Credit Percentage Commitments.

                           (ii) Such change shall be effective from the
         effective date specified in such written notice and any Person added as
         a Revolving Credit Lender shall have all rights, privileges, and
         obligations of a Revolving Credit Lender hereunder thereafter as if
         such Person had been a signatory to this Agreement and any other Loan
         Document to which a Revolving Credit Lender is a signatory and any
         Person removed as a Revolving Credit Lender shall be relieved of any
         obligations or responsibilities of a Revolving Credit Lender hereunder
         thereafter.

         2.25. REFERENCES TO ORIGINAL AGREEMENT. The terms "Loan and Security
Agreement," "this Agreement," "Loan Agreement," and similar references as used
in the documents, instruments and agreements executed and/or delivered in
connection with the Original Agreement, shall mean the Original Agreement as
amended and restated hereby in its entirety, and each of such documents,
instruments and agreements is hereby so amended. Except as specifically agreed
herein, each of the Loan Documents executed and delivered in connection with the
Original Agreement are hereby ratified and confirmed and shall remain in full
force and effect in accordance with their terms. Without limitation of the
foregoing, the Loan Parties hereby confirm that the Collateral granted under the
Original Agreement, and all pledge and other security instruments and
agreements, continue to secure all Liabilities.

ARTICLE 3 - THE TRANCHE B LOAN:

         3.1. THE TRANCHE B LOAN.

                  (a) Subject to satisfaction of the Conditions Precedent
(Article 4), the Borrower shall borrow from the Tranche B Lender and the Tranche
B Lender shall lend to the Borrower the sum of

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$15,000,000.00 (the "TRANCHE B LOAN "), repayable with interest as provided
herein.

                  (b) The proceeds of the Tranche B Loan shall be used solely
for the Casual Male Acquisition.

         3.2. THE TRANCHE B NOTE. The obligation to repay the Tranche B Loan,
with interest as provided herein, shall be evidenced by a note (the "TRANCHE B
NOTE") in the form of EXHIBIT 3.2, annexed hereto, executed by the Borrowers.
Neither the original nor a copy of the Tranche B Note shall be required,
HOWEVER, to establish or prove any Liability. Upon the Borrowers'
Representative's being provided with an affidavit from the Administrative Agent
to the effect that said Tranche B Note has been lost, mutilated, or destroyed,
the Borrowers shall execute a replacement thereof and deliver such replacement
to the Tranche B Lender.

         3.3. PAYMENT OF PRINCIPAL OF THE TRANCHE B LOAN .

                  (a) The Borrowers may not prepay all or any portion of the
principal balance of the Tranche B Loan prior to the Maturity Date or
Acceleration unless each of the Tranche B Loan Prepayment Conditions is
satisfied in connection with such prepayment; PROVIDED, HOWEVER, that
notwithstanding the foregoing, so long as no Default shall have occurred and be
continuing on the date on which such prepayment is made and immediately after
giving effect to such prepayment, the Tranche B Loan may be prepaid without
satisfaction of the Tranche B Loan Prepayment Conditions if the sole source of
funds for such prepayment shall be either (i) subordinated indebtedness with
terms and conditions (including, without limitation, interest rate and fees)
more favorable (as a whole) than those governing the Tranche B Loan or (ii)
proceeds from the sale of equity in Designs, Inc., in each case on terms and
conditions and subject to execution of documentation satisfactory to the
Administrative Agent.

                  (b) If any portion of the Tranche B Loan is paid prior to the
Maturity Date for any reason ( whether following satisfaction of the Tranche B
Loan Prepayment Conditions, Acceleration, or otherwise), all such prepayments in
any event to be in increments of not less than $2,000,000, the Borrowers shall
pay the Administrative Agent, contemporaneously with such prepayment, for the
account of the Tranche B Lender, the "TRANCHE B EARLY TERMINATION FEE" (so
referred to herein) equal to the greater of:

                           (i)      (A) The aggregate Yield Revenue accruing (or
                                    which would have accrued) on the Tranche B
                                    Loan during the first fifteen (15) months
                                    after the date such Tranche B Loan is made,

                                    MINUS

                                    (B) The aggregate Yield Revenue actually
                                    received by the Tranche B

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                                    Lender prior to the date of prepayment,

                                    or

                           (ii)     An amount equal to one and one half percent
                                    (1 1/2%) of the principal balance of the
                                    Tranche B Loan which is so paid prior to the
                                    Maturity Date.

                  (c) The Borrowers shall repay the then entire unpaid balance
of the Tranche B Loan and all accrued and unpaid interest thereon on the
Termination Date.

         3.4 INTEREST ON THE TRANCHE B LOAN.

                  (a) Subject to Section 3.4(d), the unpaid principal balance of
the Tranche B Loan shall bear interest, until repaid, fixed at 15% per annum
(the "TRANCHE B INTEREST RATE").

                  (b) In the event of the amendment of any interest rate which
is or which may be applicable to the unpaid principal balance of the Revolving
Credit, the Tranche B Interest Rate shall be increased by a like amount (e.g. if
the Base Margin Rate is increased by one-quarter of one percent per annum or the
Libor Rate is increased by 25 basis points, the Tranche B Interest Rate shall
likewise be increased by one-quarter of one percent per annum) and such increase
shall be treated as an increase to Current Pay Interest.

                  (c) Interest on the Tranche B Loan, at the Tranche B Interest
Rate, shall be payable as follows:

                           (i) Accrued interest on the unpaid principal balance
         of the Tranche B Loan equal to 12% per annum ("TRANCHE B CURRENT PAY
         INTEREST") shall be payable quarterly in arrears, on the first Business
         Day of each quarter (the "TRANCHE B INTEREST PAYMENT DATE"), and on the
         Maturity Date.

                           (ii) Subject to Section 3.4(c)(ii)(C), accrued
         interest on the unpaid principal balance of the Tranche B Loan in
         excess of Tranche B Current Pay Interest (which excess is referred to
         herein as "TRANCHE B PIK INTEREST") shall be payable as follows:

                                    (A) The Borrowers shall have the option,
                  exercisable by irrevocable written notice by the Borrowers'
                  Representative to the Administrative Agent made at least three
                  (3) Business Days prior to the relevant Tranche B Interest
                  Payment Date, to pay all or any part of such Tranche B PIK
                  Interest by adding the same to the principal balance of the
                  Tranche B Note on that Tranche B Interest Payment Date.

                                    (B) Tranche B PIK Interest as to which the
                  option provided in Section 3.4(c)(ii)(A) is not exercised
                  shall be paid on the then next Tranche B Interest Payment
                  Date.

                                    (C) At the direction of the Tranche B
                  Lender, following the

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                  occurrence of any Event of Default (and whether or not
                  Acceleration has taken place), the option provided in Section
                  3.4(c)(ii)(A) shall terminate and accrued interest to which
                  such option otherwise could have been exercised shall be paid
                  on each Tranche B Interest Payment Date.

                  (d) Following the occurrence of any Event of Default (and
whether or not Acceleration has taken place), at the direction of the Tranche B
Lender, interest shall accrue and shall be payable on the unpaid principal
balance of the Tranche B Loan at the aggregate of the Tranche B Interest Rate
then in effect plus four percent (4%) per annum.

         3.5. TRANCHE B COMMITMENT FEE AND TRANCHE B MONITORING FEE. As
compensation for the Tranche B Lender's having committed to enter into this
Agreement, the Tranche B Lender has earned the Tranche B Commitment Fee and
Tranche B Monitoring Fee in the amount and payable as provided in the Fee
Letter.

         3.6. PAYMENTS ON ACCOUNT OF TRANCHE B LOAN . The Borrowers authorize
the Administrative Agent to determine and to pay over directly to the Tranche B
Lender any and all amounts due and payable from time to time under or on account
of the Tranche B Loan as advances under the Revolving Credit IT BEING
UNDERSTOOD, HOWEVER, that the authorization of the Administrative Agent provided
in this Section 3.6 shall not excuse the Borrowers from fulfilling their
obligations to the Tranche B Lender on account of the Tranche B Loan nor place
any obligation on the Administrative Agent to do so. The Administrative Agent
shall provide prompt advice to the Borrowers' Representative of any amount which
is so paid over by the Administrative Agent to the Tranche B Lender pursuant to
this Section 3.6. The Tranche B Lender shall refund to the Administrative Agent
any overpayment which may have been made pursuant to this Section 3.6. The
Borrower shall not be entitled to any credit, rebate or repayment of any fee
previously earned by the Tranche B Lender pursuant to this Agreement
notwithstanding any termination of this Agreement or suspension or termination
of the Administrative Agent's and any Lender's respective obligation to make
loans and advances hereunder.

ARTICLE 4 - CONDITIONS PRECEDENT:

         As a condition to the effectiveness of this Agreement, the
establishment of the Revolving Credit, the making of the first loan under the
Revolving Credit, and the making of the Tranche B Loan, each of the documents
respectively described in Sections 4.1 through and including 4.5, (each in form
and substance satisfactory to the Administrative Agent and the Tranche B Lender)
shall have been delivered to the Administrative Agent, and the conditions
respectively described in Sections 4.6 through and including 4.14,

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shall have been satisfied:

         4.1. DUE DILIGENCE.

                  (a) Certificates of good standing for each Loan Party,
respectively issued by the Secretary of State for the state in which that Loan
Party is organized.

                  (b) Certificates of due qualification, in good standing,
issued by the Secretary(ies) of State of each State in which the nature of a
Loan Party's business conducted or assets owned could require such
qualification.

                  (c) Certificates of each Loan Party's clerk or secretary, as
applicable, of the due adoption, continued effectiveness, and setting forth the
texts of, each resolution adopted in connection with the establishment of the
loan arrangement contemplated by the Loan Documents and attesting to the true
signatures of each Person authorized as a signatory to any of the Loan
Documents.

         4.2. OPINION. One or more reasonable and customary opinions of counsel
to the Loan Parties

         4.3. ADDITIONAL DOCUMENTS. Such additional instruments and documents as
the Administrative Agent or its counsel or the Tranche B Lender reasonably may
require or request, including, without limitation, written instructions to the
Administrative Agent to apply the proceeds of the Tranche B Loan and the first
funding under the Revolving Credit to the Casual Male Acquisition.

         4.4. OFFICERS' CERTIFICATES. Certificates executed by (a) either the
President or the Chief Executive Officer and (b) the Chief Financial Officer of
the Borrowers' Representative and stating that the representations and
warranties made by the Loan Parties to the Agents and the Lenders in the Loan
Documents are true and complete in all material respects as of the date of such
Certificate, and that no event has occurred which is or which, solely with the
giving of notice or passage of time (or both) would be an Event of Default.

         4.5. CASUAL MALE ACQUISITION. The Administrative Agent shall have
received (i) a fully executed copy of the Casual Male Acquisition Agreement,
together with all exhibits and schedules thereto and all other agreements,
documents and instruments executed and delivered in accordance therewith, each
certified by an officer of the Borrowers' Representative as being true and
correct copies thereof and (ii) evidence that the Casual Male Acquisition
Agreement is in full force and effect, all filings, consents and approvals
required by applicable law for consummation of the Casual Male Acquisition,
including, without limitation, the Casual Male Approval Order, shall have been
obtained and shall be effective and that the

                                                                         Page 60
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Casual Male Acquisition shall be consummated contemporaneously with the making
of the first loan under the Revolving Credit and the making of the Tranche B
Loan.

         4.6. REPRESENTATIONS AND WARRANTIES. Each of the representations made
by or on behalf of each Loan Party in this Agreement or in any of the other Loan
Documents or in any other report, statement, document, or paper provided by or
on behalf of each Loan Party shall be true and complete in all material respects
as of the date as of which such representation or warranty was made.

         4.7. MINIMUM DAY ONE EXCESS AVAILABILITY. After giving effect to the
first funding under the Revolving Credit and the Tranche B Loan, and the
issuance of any L/Cs, Excess Availability shall not be less than $20,000,000.

         4.8. ALL FEES AND EXPENSES PAID. All fees due at or immediately after
the first funding under the Revolving Credit and the Tranche B Loan, and all
costs and expenses incurred by the Administrative Agent, the Collateral Agent
and the Tranche B Lender in connection with the establishment of the credit
facility contemplated hereby (including the reasonable fees and expenses of
counsel to the Administrative Agent, the Collateral Agent and the Tranche B
Lender), shall have been paid in full.

         4.9 INVESTMENT. The Administrative Agent shall have received (i) a copy
of the fully executed 12% Subordinated Note and the 5% Subordinated Note, (ii)
executed originals of the Subordination Agreements, (iii) a copy of the
Subscription Agreement and (iv) evidence of the application to the Casual Male
Acquisition of not less than $35,000,000 in proceeds of the Subordinated
Indebtedness and $77,000,000 in proceeds of the sale of equity pursuant to the
Subscription Agreement.

         4.10 COLLATERAL, ETC.

         (a) Each document (including, without limitation, Uniform Commercial
Code financing statements) required by law or requested by the Administrative
Agent to be filed, registered or recorded in order to create in favor of the
Collateral Agent a first priority perfected security interest in the Collateral
shall have been properly filed, registered or recorded in each jurisdiction
where required and the Collateral Agent shall have a first priority perfected
security interest in the Collateral, subject only to Permitted Encumbrances.

         (b) All accounts payable of the Loan Parties shall be within invoice
terms (subject only to good faith disputes).

         (c) The Inventory Purchase Agreement shall have been executed and
delivered by all the Loan

                                                                         Page 61
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Parties, shall be in full force and effect and shall be satisfactory to the
Administrative Agent

         4.11. NO DEFAULT.

         (a) No Default shall have occurred and be continuing.

         (b) No default shall have occurred and be continuing under any material
contract or other agreement to which any Loan Party is a party.

         4.12. FINANCIAL STATEMENTS; LEGAL DUE DILIGENCE; NO ADVERSE CHANGE.

         (a) The Administrative Agent shall be satisfied that all financial
statements and projections delivered to it fairly present the Consolidated
business and financial condition of Designs, Inc. and its subsidiaries and upon
the effectiveness of this Agreement and consummation of the Casual Male
Acquisition, Designs, Inc. shall have restructured its Indebtedness and balance
sheet in a manner reasonably acceptable to the Administrative Agent. The
Administrative Agent shall have received and be satisfied with certain asset
based reports previously requested of Designs, Inc.

         (b) No event shall have occurred or failed to occur, which occurrence
or failure is or could have a materially adverse effect upon any Loan Party's
financial condition when compared with the financial condition of such Loan
Party as reflected in its most recent interim management prepared financial
statements, annual report(s), public filings and projections provided to the
Administrative Agent or any Lender.

         (c) Counsel to the Administrative Agent shall have completed its legal
due diligence (including, without limitation, with respect to the Casual Male
Acquisition) with results reasonably satisfactory to the Administrative Agent
and such counsel.

         (d) The Administrative Agent and the Tranche B Lender shall be
satisfied that no information or materials supplied by or on behalf of the Loan
Parties contain material misstatements or omissions which could be materially
misleading.

         (e) The Administrative Agent and the Tranche B Lender shall be
satisfied that no materially adverse change in any governmental regulations or
policies affecting any Loan Party or Agent shall have occurred.

         4.13. NO LITIGATION. The Administrative Agent and its counsel shall
have received evidence satisfactory to each that there are no actions, suits or
proceedings at law or in equity or by or before any governmental instrumentality
or other agency or regulatory authority now pending or threatened against any
Loan Party the result of which is reasonably likely to have a material adverse
effect on the Casual Male

                                                                         Page 62
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Acquisition or on such Loan Party or its businesses or assets.

         4.14. BENEFIT OF CONDITIONS PRECEDENT. The conditions set forth in this
Article 4 are for the sole benefit of each Agent and each Lender and may be
waived by the Administrative Agent and the Tranche B Lender, in whole or in
part, without prejudice to any Agent or any Lender.

No document shall be deemed delivered to the Administrative Agent, the
Collateral Agent, the Tranche B Lender or any Revolving Credit Lender until
received and accepted by the Administrative Agent at its offices in Boston,
Massachusetts. Under no circumstances shall this Agreement take effect until
executed and accepted by the Administrative Agent at said offices.

ARTICLE 5 - GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES:

         To induce each Lender to establish the credit facilities contemplated
herein and to induce the Revolving Credit Lenders to provide loans and advances
under the Revolving Credit (each of which loans shall be deemed to have been
made in reliance thereupon) and to induce the Tranche B Lender to make the
Tranche B Loan, respectively, as contemplated hereby, the Loan Parties, in
addition to all other representations, warranties, and covenants made by any
Loan Party in any other Loan Document, make those representations, warranties,
and covenants included in this Agreement.

         5.1. PAYMENT AND PERFORMANCE OF LIABILITIES. The Borrowers shall pay
each payment Liability when due (or when demanded, if payable on demand) and
shall promptly, punctually, and faithfully perform each other Liability.

         5.2. DUE ORGANIZATION. AUTHORIZATION. NO CONFLICTS.

                  (a) Each Loan Party presently is and hereafter shall remain in
good standing under the laws of the State in which it is organized, as set forth
in the Preamble and is and shall hereafter remain duly qualified and in good
standing in every other State in which, by reason of the nature or location of
such Loan Party's assets or operation of such Loan Party's business, such
qualification may be necessary, except where the failure to so qualify would not
have a material adverse effect on the business or assets of that Loan Party.

                  (b) Each Loan Party's respective organizational identification
number assigned to it by the State of its organization and its respective
federal employer identification number is stated on EXHIBIT 5.2, annexed hereto.

                  (c) No Loan Party shall change its State of organization; any
organizational

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identification number assigned to that Loan Party by that State;
or that Loan Party's federal taxpayer identification number on less than sixty
(60) days prior written notice (in reasonable detail) to the Administrative
Agent.

                  (d) Each Affiliate of the Loan Parties is listed on EXHIBIT
5.2. The Borrowers' Representative shall provide the Administrative Agent with
prior written notice of any entity's becoming or ceasing to be an Affiliate.

                  (e) Each Loan Party has all requisite power and authority to
execute and deliver all Loan Documents to which that Loan Party is a party and
has and will hereafter retain all requisite power to perform all Liabilities.

                  (f) The execution and delivery by each Loan Party of each Loan
Document to which it is a party; each Loan Party's consummation of the
transactions contemplated by such Loan Documents (including, without limitation,
the creation of Collateral Interests by that Loan Party to secure the
Liabilities); each Loan Party's performance under those of the Loan Documents to
which it is a party; the borrowings hereunder; and the use of the proceeds
thereof:

                           (i) Have been duly authorized by all necessary
         action.

                           (ii) Do not, and will not, contravene in any material
         respect any provision of any Requirement of Law or obligation of that
         Loan Party, where such contravention would have a material adverse
         effect on that Loan Party.

                           (iii) Will not result in the creation or imposition
         of, or the obligation to create or impose, any Encumbrance upon any
         assets of that Loan Party pursuant to any Requirement of Law or
         obligation, except pursuant to or as permitted by the Loan Documents.

                  (g) The Loan Documents have been duly executed and delivered
by each Loan Party and are the legal, valid and binding obligations of each Loan
Party, enforceable against each Loan Party in accordance with their respective
terms, except as such enforceability may be subject to limitations on the rights
and remedies of secured creditors generally imposed under bankruptcy or
insolvency law and that the availability of equitable relief is subject to the
discretion of the court from which such relief is sought.

         5.3. TRADE NAMES.

                  (a) EXHIBIT 5.3, annexed hereto, is a listing of:

                  (i) All names under which any Loan Party conducted its
         business during the five (5) years preceding the date of this
         Agreement.

                  (ii) All Persons with whom any Loan Party consolidated or
         merged, or from whom any Loan Party acquired in a single transaction or
         in a series of related transactions substantially all of such Person's
         assets, in each case during the five (5) years preceding the date of
         this Agreement.

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                  (b) The Borrowers' Representative will provide the
Administrative Agent with not less than twenty-one (21) days prior written
notice (with reasonable particularity) of any change to any Loan Party's name
from that under which that Loan Party is conducting its business at the
execution of this Agreement and will not effect such change unless each Loan
Party is then in compliance with all provisions of this Agreement.

         5.4. INFRASTRUCTURE.

                  (a) Each Loan Party has and will maintain a sufficient
infrastructure to conduct its business as presently conducted and as
contemplated to be conducted following its execution of this Agreement.

                  (b) To the Borrowers' knowledge, except as set forth in
EXHIBIT 5.4(B), each Loan Party owns and possesses, or has the right to use (and
will hereafter own, possess, or have such right to use) all patents, industrial
designs, trademarks, trade names, trade styles, brand names, service marks,
logos, copyrights, trade secrets, know-how, confidential information, and other
intellectual or proprietary property of any third Person necessary for that Loan
Party's conduct of that Loan Party's business except where the failure to own,
possess, or have such right or use will not have more than a DE MINIMIS adverse
effect on any Loan Party.

                  (c) To the Borrowers' knowledge, the conduct by each Loan
Party of that Loan Party's business does not presently infringe (nor will any
Loan Party conduct its business in the future so as to infringe) the patents,
industrial designs, trademarks, trade names, trade styles, brand names, service
marks, logos, copyrights, trade secrets, know-how, confidential information, or
other intellectual or proprietary property of any third Person except where such
infringement will not have no more than a DE MINIMIS adverse effect on that Loan
Party.

         5.5. LOCATIONS.

                  (a) The Collateral, and the books, records, and papers of the
Loan Parties pertaining thereto, are kept and maintained solely at the following
locations:

                           (i) The Borrowers' Representative's chief executive
         offices which are at 66 B Street, Needham, Massachusetts 02194.

                           (ii) Those locations which are listed on EXHIBIT 5.5,
         annexed hereto, which EXHIBIT includes, with respect to each such
         location, the name and address of the landlord on the Lease which
         covers such location (or an indication that a Loan Party owns the
         subject location) and of all service bureaus with which any such
         records are maintained and the names and addresses of each Loan Party's
         landlord(s).

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                  (b) No Loan Party shall remove any of the Collateral from said
chief executive office or those locations listed on EXHIBIT 5.5 except for the
following purposes:

                           (i) To accomplish sales of Inventory in the ordinary
         course of business or sales permitted by Section 5.14(d).

                           (ii) To move Inventory from one such location to
         another such location.

                           (iii) To utilize such of the Collateral as is removed
         from such locations in the ordinary course of business (such as motor
         vehicles).

                  (c) Except where caused by a force majeure or as otherwise
         agreed by the Administrative Agent, and except with respect to the
         locations referred to in Section 5.14(d)(v) as to which 5 days notice
         shall be deemed sufficient, no Loan Party shall cease the conduct of
         business at any of its present or future Stores for more than fifteen
         (15) consecutive days without first furnishing the Administrative Agent
         with not less than thirty (30) days (or such lesser period as the
         Administrative Agent may agree) prior written notice thereof.

         5.6. STORES.

                  (a) No Loan Party is or may commit to or become legally
obligated to open additional Stores where such commitment, obligation, or
opening is prohibited by, or would result in a breach of, this Agreement.

                  (b) No tangible personal property of any Loan Party (beyond a
DE MINIMIS amount of such property) is in the care or custody of any third party
or stored or entrusted with a bailee or other third party OTHER THAN as
otherwise consented to in writing by the Administrative Agent.

         5.7. TITLE TO ASSETS.

                  (a) The Loan Parties are, and shall hereafter remain, the
owners of the Collateral free and clear of all Encumbrances with the exceptions
of the following:

                           (i) Encumbrances in favor of the Collateral Agent.

                           (ii) Permitted Encumbrances.

                  (b) Except as disclosed on EXHIBIT 5.7(B), annexed hereto, the
Loan Parties do not have possession of any property on consignment to the Loan
Parties and will not have possession of property on consignment hereafter.

                  (c) No Loan Party shall acquire or obtain the right to use any
Equipment, the acquisition or right to use of which Equipment is otherwise
permitted by this Agreement, in which Equipment any third party has an interest,
except for:

                           (i) Equipment which is merely incidental to the
         conduct of that Loan Party's

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          business; or

                           (ii) Equipment, the acquisition or right to use of
         which has been consented to by the Administrative Agent, which consent
         may be conditioned solely upon the Administrative Agent's receipt of an
         agreement, substantially in the form of EXHIBIT 5.7(C)(II), annexed
         hereto with the third party which has an interest in such Equipment..

                  (d) No Affiliate (other than a Loan Party) which is owned,
directly or indirectly, by a Loan Party has, and none will acquire, any assets
other than assets of nominal value, unless (i) such acquisition of assets is not
prohibited by another provision of this Agreement and (ii) the ownership
interests of such Affiliate shall have been pledged to the Collateral Agent for
the benefit of the Lenders as their interests may appear and the Collateral
Agent has a first priority, perfected security interest in such ownership
interests.

         5.8. INDEBTEDNESS.

                  The Loan Parties do not, and shall not hereafter, have any
Indebtedness with the exception of Permitted Indebtedness and shall not make,
directly or indirectly, any payment or other distribution (whether in cash,
securities or other property) of or in respect of principal of or interest on
any Indebtedness except Permitted Indebtedness; PROVIDED, HOWEVER, that the Loan
Parties will not make, directly or indirectly, any payment or other distribution
(whether in cash, securities or other property) of or in respect of principal of
or interest on any Subordinated Indebtedness except for the following:

                  (i)      with respect to the 5% Subordinated Note, (x)
                           regularly scheduled payments of interest and (y)
                           commencing with May 14, 2003, regularly scheduled
                           payments of principal (the aggregate of principal
                           payments during any twelve month period not in any
                           event to exceed $3,000,000), so long as in the case
                           of any payment under clause (x) or (y), as of the
                           date of such payment, and after giving effect
                           thereto, there exists no Default; and

                  (ii)     with respect to the 12% Subordinated Note, (x)
                           regularly scheduled payments of interest may be made
                           so long as on the date of any such payment, and after
                           giving effect thereto, there exists no Default and
                           (y) principal payments made be made solely with the
                           prior written consent of the Administrative Agent,
                           SuperMajority Revolving Credit Lenders and the
                           Tranche B Lender.

                           The terms and conditions (including without
                           limitation, the payment terms thereunder (including,
                           without limitation, the timing thereof)) of the 5%
                           Subordinated

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                           Note, and the 12% Subordinated Note and Subordination
                           Agreements may not be amended, modified or
                           supplemented in any respect without the prior written
                           consent of the Administrative Agent, SuperMajority
                           Revolving Credit Lenders and the Tranche B Lender.

         5.9. INSURANCE.

                  (a) EXHIBIT 5.9, annexed hereto, is a schedule of all
insurance policies owned by the Loan Parties or under which any Loan Party is
the named insured. Each of such policies is in full force and effect. Neither
the issuer of any such policy nor any Loan Party is in default or violation of
any such policy.

                  (b) The Loan Parties shall have and maintain at all times
insurance covering such risks, in such amounts, containing such terms, in such
form, for such periods, and written by such companies as may be satisfactory to
the Administrative Agent.

                  (c) All insurance carried by the Loan Parties shall provide
for a minimum of thirty (30) days' prior written notice of cancellation to the
Administrative Agent and all such insurance which covers the Collateral shall
include an endorsement in favor of the Agents, which endorsement shall provide
that the insurance, to the extent of the Agent's respective interest therein,
shall not be impaired or invalidated, in whole or in part, by reason of any act
or neglect of any Loan Party or by the failure of any Loan Party to comply with
any warranty or condition of the policy, and shall not include an endorsement in
favor of any other Person except for endorsements naming one or more of the
sellers under the Casual Male Acquisition Agreement as additional insureds to
the extent required or contemplated by such Casual Male Acquisition Agreement.

                  (d) The coverage reflected on EXHIBIT 5.9 presently satisfies
the foregoing requirements, IT BEING RECOGNIZED BY EACH LOAN PARTY, HOWEVER,
that such requirements may change hereafter to reflect changing circumstances.

                  (e) The Borrowers' Representative shall furnish the
Administrative Agent from time to time with certificates or other evidence
satisfactory to the Administrative Agent regarding compliance by the Loan
Parties with the foregoing requirements.

                  (f) In the event of the failure by the Loan Parties to
maintain insurance as required herein, the Administrative Agent, at its option,
may obtain such insurance, PROVIDED, HOWEVER, the Administrative Agent's
obtaining of such insurance shall not constitute a cure or waiver of any Event
of Default occasioned by the Loan Parties' failure to have maintained such
insurance.

         5.10. LICENSES. Each license, distributorship, franchise, and similar
agreement issued to, or to which any Loan Party is a party, is in full force and
effect, except where the failure thereof to be in full

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force and effect does not have a material adverse effect on the Loan Parties. No
party to any such license or agreement is in default or violation thereof. No
Loan Party has received any notice or threat of cancellation of any such license
or agreement.

         5.11. LEASES. EXHIBIT 5.11, annexed hereto, is a schedule of all
presently effective Capital Leases. EXHIBIT 5.5 includes a list of all other
presently effective Leases. Each of such Leases and Capital Leases is in full
force and effect. No party to any such Lease or Capital Lease is in default or
violation of any such Lease or Capital Lease and no Loan Party has received
notice or a threat of cancellation of any such Lease or Capital Lease. Each Loan
Party hereby authorizes the Administrative Agent at any time and from time to
time, with the consent of the Borrowers' Representative and at any time
following the occurrence of an Event of Default, to contact any of the Loan
Parties' respective landlords in order to confirm the Loan Parties' continued
compliance with the terms and conditions of the Lease(s) between the subject
Loan Party and that landlord and to discuss such issues, concerning the subject
Loan Party's occupancy under such Lease(s), as the Administrative Agent may
determine.

         5.12. REQUIREMENTS OF LAW. Each Loan Party is in compliance with, and
shall hereafter comply with and use its assets in compliance with, all
Requirements of Law except where the failure of such compliance will not have
more than a DE MINIMIS adverse effect on the Loan Party's business. No Loan
Party has received any notice of any violation of any Requirement of Law (other
than of a violation which has no more than a DE MINIMIS adverse effect on the
Loan Party's business or assets), which violation has not been cured or
otherwise remedied.

         5.13. LABOR RELATIONS.

                  (a) Except as disclosed on EXHIBIT 5.13(A), annexed hereto, no
Loan Party is presently a party to any collective bargaining or other labor
contract.

                  (b) There is not presently pending and, to any Loan Party's
knowledge, there is not threatened any of the following:

                           (i) Any strike, slowdown, picketing, work stoppage,
         or material employee
         grievance process.

                           (ii) Any proceeding against or affecting any Loan
         Party relating to the alleged violation of any Applicable Law
         pertaining to labor relations or before National Labor Relations Board,
         the Equal Employment Opportunity Commission, or any comparable
         governmental body, organizational activity, or other labor or
         employment dispute against or affecting any Loan Party, which, if
         determined adversely to that Loan Party could have more than a DE
         MINIMIS adverse

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         effect on that Loan Party.

                           (iii) Any lockout of any employees by any Loan Party
         (and no such action is contemplated by any Loan Party).

                           (iv) Any application for the certification of a
         collective bargaining agent.

                  (c) To the knowledge of the Borrowers' Representative and each
Loan Party, no material event has occurred or circumstance exists which could
provide the basis for any work stoppage or other labor dispute.

                  (d) Each Loan Party:

                           (i) Has complied in all material respects with all
         Applicable Law relating to employment, equal employment opportunity,
         nondiscrimination, immigration, wages, hours, benefits, collective
         bargaining, the payment of social security and similar taxes,
         occupational safety and health, and plant closing.

                           (ii) Is not liable for the payment of more than a DE
         MINIMIS amount of compensation, damages, taxes, fines, penalties, or
         other amounts, however designated, for that Loan Party's failure to
         comply with any Applicable Law referenced in Section 5.13(d)(i).

         5.14. MAINTAIN PROPERTIES. The Loan Parties shall:

                  (a) Keep the Collateral in good order and repair (ordinary
reasonable wear and tear and insured casualty excepted).

                  (b) Not suffer or cause the waste or destruction of any
material part of the Collateral.

                  (c) Not use any of the Collateral in violation of any policy
of insurance thereon.

                  (d) Not sell, lease, or otherwise dispose of any of the
Collateral, other than the following:

                           (i) The sale of Inventory in compliance with this
         Agreement.

                           (ii) The disposal of Equipment which is obsolete,
         worn out, or damaged beyond repair, which Equipment is replaced to the
         extent necessary to preserve or improve the operating efficiency of any
         Loan Party.

                           (iii) The turning over to the Administrative Agent of
         all Receipts as provided herein.

                           (iv) Permitted Asset Dispositions.

         5.15. TAXES.

                  (a) The Loan Parties, in compliance with all Applicable Law,
have properly filed the Loan Party's tax returns due to be filed up to the date
of this Agreement. All federal and state taxes and

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other amounts in the nature of taxes for which the Loan Party is liable or
obligated are presently due and payable without penalty; or have been paid or
settled.

                 (b) The Loan Parties shall: pay, as they become due and
payable, all taxes and unemployment contributions and other charges of any kind
or nature levied, assessed or claimed against any Loan Party or the Collateral
by any person or entity whose claim could result in an Encumbrance upon any
asset of any Loan Party or by any governmental authority; properly exercise any
trust responsibilities imposed upon any Loan Party by reason of withholding from
employees' pay or by reason of any Loan Party's receipt of sales tax or other
funds for the account of any third party; timely make all contributions and
other payments as may be required pursuant to any Employee Benefit Plan now or
hereafter established by any Loan Party; and timely file all tax and other
returns and other reports with each governmental authority to whom any Loan
Party is obligated to so file except where failure to file would not have a
material adverse effect PROVIDED HOWEVER, nothing included in this Section
5.15(b) shall prevent the Loan Parties from contesting, in good faith and by
appropriate proceedings, any tax liability claimed against any Loan Party, but
only PROVIDED THAT and so long as no tax lien is filed with respect thereto. (c)
At its option, with prior notice to the Borrower's Representative, the
Administrative Agent may pay any tax, charge levied, assessed, or claimed upon
any Loan Party or the Collateral by any person or entity or governmental
authority, and make any payments on account of any Loan Party's Employee Benefit
Plan as the Administrative Agent , in the Administrative Agent's discretion, may
deem necessary or desirable, to protect the Agents' Rights and Remedies.

         5.16. NO MARGIN STOCK. No Loan Party is engaged in the business of
extending credit for the purpose of purchasing or carrying any margin stock
(within the meaning of Regulations U, T, and X of the Board of Governors of the
Federal Reserve System of the United States). No part of the proceeds of any
borrowing hereunder will be used at any time to purchase or carry any such
margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock.

         5.17. ERISA.

                  (a) Neither any Loan Party nor any ERISA Affiliate has ever:

                           (i) Violated or failed to be in full compliance with
         any Loan Party's Employee Benefit Plan.

                           (ii) Failed timely to file all reports and filings
         required by ERISA to be filed by any Loan Party.

                           (iii) Engaged in any nonexempt "prohibited
         transactions" or "reportable events" (respectively as described in
         ERISA).

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<Page>

                           (iv) Engaged in, or committed, any act such that a
         tax or penalty could be imposed upon any Loan Party on account thereof
         pursuant to ERISA.

                           (v) Accumulated any material cumulative funding
         deficiency within the meaning of ERISA.

                           (vi) Terminated any Employee Benefit Plan such that a
         lien could be asserted against any assets of any Loan Party on account
         thereof pursuant to ERISA.

                           (vii) Been a member of, contributed to, or had any
         obligation under any Employee Benefit Plan which is a multiemployer
         plan within the meaning of Section 4001(a) of ERISA.

                  (b) Neither any Loan Party nor any ERISA Affiliate shall ever
         engage in any action of the type described in Section 5.17(a).

         5.18. HAZARDOUS MATERIALS.

                  (a) No Loan Party has ever: (i) been legally responsible for
         any release or threat of release of any Hazardous Material or (ii)
         received notification of the incurrence of any expense in connection
         with the assessment, containment, or removal of any Hazardous Material
         for which that Loan Party would be responsible.

                  (b) Each Loan Party shall: (i) dispose of any Hazardous
         Material only in compliance with all Environmental Laws and (ii) have
         possession of any Hazardous Material only in the ordinary course of
         that Loan Party's business and in compliance with all Environmental
         Laws.

         5.19. LITIGATION. Except as described in EXHIBIT 5.19, annexed hereto,
there is not presently pending or to its knowledge, threatened in writing, by or
against the Loan Parties, any suit, action, proceeding, or investigation which
if determined adversely to the Loan Parties, would have a material adverse
effect upon the Loan Parties' financial condition or ability to conduct their
business as such business is presently conducted or is contemplated to be
conducted in the foreseeable future.

         5.20. DIVIDENDS. INVESTMENTS. ENTITY ACTION. No Loan Party shall:

                  (a) Pay any cash dividend or make any other distribution in
         respect of any class of their respective capital stock or other
         ownership interests, other than payments to another Loan Party.

                  (b) Redeem, retire, purchase, or acquire any of Design Inc.'s
         capital stock.

                  (c) Invest in or purchase any stock or securities or other
         ownership interests, or rights to purchase any such stock or securities
         or other ownership interests, of any corporation or other Person,
         except for

                           (i) Permitted Investments,

                                                                         Page 72

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                           (ii) capital stock or other ownership interests of
         wholly owned direct or indirect Subsidiaries (in existence on the
         Closing Date) of the Loan Parties, and

                           (iii) investments in the ECKO Joint Venture not to
         exceed $5,000,000 in the aggregate during the term of this Agreement.

                  (d) Merge or consolidate or be merged or consolidated with or
         into any other corporation or other entity; provided that nothing in
         this Agreement shall prevent any Loan Party from merging into any other
         Loan Party.

                  (e) Consolidate any of that Loan Party's operations with those
         of any other corporation or other entity other than another Loan Party.

                  (f) Subordinate any debts or obligations owed to that Loan
         Party by any third party to any other debts owed by such third party to
         any other Person.

                  (g) Engage in any interest rate swaps, caps, or similar
         activities, or any hedging activities, other than in the ordinary
         course and conduct of that Loan Party's business and then only with a
         Lender or any affiliate of a Lender.

         5.21. PERMITTED ACQUISITIONS. The Loan Parties may make Permitted
Acquisitions without the consent of the Agent or the Lenders; provided that:

                  (a) Not less than fifteen (15) days prior written notice (with
         reasonable particularity as to the facts and circumstances in respect
         of which such notice is being given) of such Permitted Acquisition is
         given to the Administrative Agent.

                  (b) The aggregate purchase price (exclusive of the portion of
         the purchase price paid for with capital stock of the Loan Parties) of
         all such Permitted Acquisitions undertaken from and after the Closing
         Date is not greater than $5,000,000.

                  (c) No Event of Default then exists or would result from any
         such Permitted Acquisition.

                  (d) With respect, to and in the event of any Permitted
         Acquisition which consists of, or results in the creation of, a
         Subsidiary, the Administrative Agent shall be provided with such
         Subsidiary's Guarantor Agreement (in form and substance satisfactory to
         the Administrative Agent), which Guarantor Agreement shall be secured
         by first perfected security interests and liens on substantially all of
         the assets of such Subsidiary, subject to the same limitations set
         forth in Section 9.1 hereof and subject to Permitted Encumbrances.

                  (e) The Agent and the Lenders shall have no obligation to
         include any Inventory acquired in such Permitted Acquisition (or
         Inventory of a similar type and nature acquired after the Permitted
         Acquisition) as Eligible Inventory.

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<Page>

         5.22. LOANS. The Loan Parties shall not make any loans to, nor acquire
the Indebtedness of, any Person, PROVIDED, HOWEVER, the foregoing does not
prohibit any of the following:

                  (a) Subject to such conditions respectively as apply thereto,
         the making of Permitted Investments.

                  (b) Advance payments made to a Loan Party's suppliers in the
         ordinary course.

                  (c) Advances to a Loan Party's officers, employees, and
         salespersons with respect to reasonable expenses to be incurred by such
         officers, employees, and salespersons for the benefit of a Loan Party,
         which expenses are properly substantiated by the person seeking such
         advance and properly reimbursable by a Loan Party.

                  (d) Loans to a Loan Party's officers and employees not
         exceeding $400,000 in the aggregate at any one time outstanding,
         provided that each such loan is for a term of not more than 90 days
         from the date on which it is made and is paid within such 90-day
         period; PROVIDED THAT, all amounts due on account of loans permitted
         under this clause (d) shall constitute Collateral and shall be pledged
         to the Collateral Agent for the benefit of the Lenders and their
         interests may appear; and

                  (e) Advances to contractors for the construction or renovation
         of stores, buildings or improvements for use in the business of a Loan
         Party.

                  (f) Loans by Designs, Inc. to Securex not to exceed $5,000,000
         in the aggregate during the term of this Agreement, so long as in each
         case such intercompany loans shall be evidenced by, and subject to,
         such documentation (including, without limitation, notes and pledge
         agreements) as the Collateral Agent may require, and no Default shall
         have occurred and be continuing on the date of any such loan.

                  (g) Loans by Designs, Inc. or Designs Apparel, Inc. to
         Guarantors to finance the purchases by Guarantors of Inventory pursuant
         to the Inventory Purchase Agreement and to permit such Guarantors to
         pay ordinary course operating expenses (including, without limitation,
         rent, utilities and taxes) so long as in each case such intercompany
         loans shall be evidenced by, and subject to, such documentation
         (including, without limitation, notes and pledge agreements) as the
         Collateral Agent may require.

         5.23. RESTRICTIONS ON SALE OF COLLATERAL; LICENSE AGREEMENTS. To the
Loan Parties' knowledge, the Loan Parties are not, and shall not become, party
to any agreement or understanding which limits, impairs, or otherwise restricts
the ability of the Collateral Agent to freely sell and dispose of any of the
Collateral (including, without limitation, any repurchase agreements, rights of
first refusal or other agreements which limit or condition the time, manner,
place or price for the sale or disposition of the Collateral), other than
certain Trademark License Agreements with Levi Strauss & Co. dated November 1,

                                                                       Page 74

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1991 and November 15, 1996. The Loan Parties shall not effect or permit
any material change or amendment to the terms of such License Agreements which
would impose further restrictions to the Collateral Agent's disposition of the
Collateral or would shorten the term of such License Agreements, other than as
contemplated in the Amendment and Distribution Agreement dated as of October 31,
1998 by and among Designs JV Corp., LDJV, Inc. and The Designs/OLS Partnership.

         5.24. PROTECTION OF ASSETS. The Administrative Agent, in the
Administrative Agent's discretion, from time to time, may discharge any tax or
Encumbrance on any of the Collateral, or take any other action which the
Administrative Agent may deem necessary or desirable to repair, insure,
maintain, preserve, collect, or realize upon any of the Collateral. The
Administrative Agent shall not have any obligation to undertake any of the
foregoing and shall have no liability on account of any action so undertaken
except where there is a specific finding in a judicial proceeding (in which the
Administrative Agent has had an opportunity to be heard), from which finding no
further appeal is available, that the Administrative Agent had acted in actual
bad faith or in a grossly negligent manner. The Loan Parties shall pay to the
Administrative Agent, on demand, or the Administrative Agent, in its discretion,
may add to the Loan Account, all amounts paid or incurred by the Administrative
Agent pursuant to this Section 5.24.

         5.25.    LINE OF BUSINESS.

                  (a) Except as provided in Sections 5.20, 5.23 and 5.25(c), no
         Loan Party shall engage in any business other than the business in
         which it is currently engaged or plans to be engaged, as reflected in
         the Business Plan, or a business reasonably related thereto (the
         conduct of which reasonably related business is reflected in the
         Business Plan), PROVIDED THAT the foregoing shall not prohibit the
         expansion or contraction of a Loan Party's business so long as the Loan
         Parties are still engaged solely in the retail sale of apparel,
         footwear and related accessories and other activities, ancillary,
         incidental or necessary thereto, and such expansion or contraction is
         otherwise permitted under other Sections of this Agreement.

                  (b) The Loan Parties, with the prior written notice to the
         Administrative Agent in each instance, may license the use of up to 5%
         of the selling space of any Store (measured in terms of square feet)
         for the operation of certain departments of their Stores by third
         parties.

                  (c) The Loan Parties, with the prior written consent of the
         Administrative Agent (as to which, SEE Section 5.25(c)(i)), may (x)
         license the use of more than 5% of the selling space of any Store
         (measured in terms of square feet) for the operation of certain
         departments by third parties and (y) franchise to others the right to
         operate comparable Stores, IT BEING UNDERSTOOD THAT:

                           (i) The Administrative Agent's determination to
         consent to the Loan Parties'

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         activities described in Section 5.25(c) may be conditioned on the
         Administrative Agent's being satisfied that the secured position of the
         Collateral Agent, and the Agents' Rights and Remedies, would not be
         adversely affected by such restructuring and that such restructuring
         does not place any material additional administrative burdens on the
         Agents.

                  (ii) The Administrative Agent may provide such consent
         pursuant to this Section 5.25(c) on its own authority and without
         obtaining the Consent of the Majority Lenders.

                  (iii) The Administrative Agent may condition its providing of
         such consent pursuant to this Section 5.25(c) on the Consent of the
         Majority Lenders.

         5.26. AFFILIATE TRANSACTIONS. No Loan Party shall make any payment, nor
give any value, to any Affiliate except for:

                  (a) Goods and services actually purchased by that Loan Party
         from, or sold by that Loan Party to, such Affiliate for a price and on
         terms which shall

                           (i) be competitive and fully deductible as an
         "ordinary and necessary business expense" and/or fully depreciable
         under the Internal Revenue Code of 1986 and the Treasury Regulations,
         each as amended; and

                           (ii) be no less favorable to that Loan Party than
         those which would have been charged and imposed in an arms length
         transaction.

                  (b) Permitted Overhead Contributions. It is hereby agreed that
         Permitted Overhead Contributions shall be deemed to include lease
         payments under any amendment to or replacement of the Lease Agreement
         referred to in the definition of Permitted Overhead Contributions
         PROVIDING that such lease amendment or replacement is on terms and
         conditions satisfactory to the Administrative Agent.

         5.27.    FURTHER ASSURANCES.

                  (a) No Loan Party is the owner of, nor has it any interest in,
         any property or asset which, immediately upon the satisfaction of the
         conditions precedent to the effectiveness of the credit facility
         contemplated hereby (Article 4) will not be subject to a perfected
         Collateral Interest in favor of the Collateral Agent (subject only to
         Permitted Encumbrances) to secure the Liabilities.

                  (b) Except as otherwise permitted by this Agreement, no Loan
         Party will hereafter acquire any asset or any interest in property
         which is not, immediately upon such acquisition, subject to such a
         perfected Collateral Interest in favor of the Collateral Agent to
         secure the Liabilities (subject only to Permitted Encumbrances).

                  (c) Each Loan Party shall execute and deliver to the
         Administrative Agent such instruments, documents, and papers, and shall
         do all such things from time to time hereafter as the

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Administrative Agent reasonably may request, to carry into effect the provisions
and intent of this Agreement; to protect and perfect the Collateral Agent's
Collateral Interests in the Collateral; and to comply with all applicable
statutes and laws, and facilitate the collection of the Receivables Collateral.
Each Loan Party shall execute all such instruments as may be required by the
Administrative Agent with respect to the recordation and/or perfection of the
Collateral Interests created or contemplated herein.

                  (d) Each Loan Party hereby designates the Collateral Agent as
         and for that Loan Party's true and lawful attorney, with full power of
         substitution, to sign and file any financing statements in order to
         perfect or protect the Collateral Agent's Collateral Interests in the
         Collateral.

                  (e) This Agreement constitutes an authenticated record which
         authorizes the Collateral Agent to file such financing statements as
         the Collateral Agent determines as appropriate to perfect or protect
         the Agent's Collateral Interests created hereby.

                  (f) A carbon, photographic, or other reproduction of this
         Agreement or of any financing statement or other instrument executed
         pursuant to this Section 5.27 shall be sufficient for filing to perfect
         the security interests granted herein.

         5.28.    ADEQUACY OF DISCLOSURE.

                  (a) All financial statements furnished to each Agent and each
         Lender by each Loan Party have been prepared in accordance with GAAP
         consistently applied and present fairly the condition of the Loan
         Parties at the date(s) thereof and the results of operations and cash
         flows for the period(s) covered (PROVIDED HOWEVER, that unaudited
         financial statements are subject to normal year end adjustments and to
         the absence of footnotes). There has been no change in the Consolidated
         financial condition, results of operations, or cash flows of the Loan
         Parties since the date(s) of such financial statements, as supplemented
         by the Business Plan, other than changes in the ordinary course of
         business, which changes have not been materially adverse, either
         singularly or in the aggregate.

                  (b) Except as set forth on EXHIBIT 5.28(B), annexed hereto, no
         Loan Party has any contingent obligations or obligation under any Lease
         or Capital Lease which is not noted in the Loan Parties' Consolidated
         financial statements furnished to each Agent and each Lender prior to
         the execution of this Agreement other than obligations which are
         entered into in the ordinary course of business since the date of such
         financial statement.

                  (c) No document, instrument, agreement, or paper now or
         hereafter given to any Agent and any Lender by or on behalf of each
         Loan Party or any guarantor of the Liabilities in connection with the
         execution of this Agreement by each Agent and each Lender (except for
         any projections provided by or on behalf of any Loan Party) contains or
         will contain any untrue statement of a material fact or omits or will
         omit to state a material fact necessary in order to make the statements
         therein not misleading.

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         5.29. NO RESTRICTIONS ON LIABILITIES. No Loan Party shall enter into or
directly or indirectly become subject to any agreement which prohibits or
restricts, in any manner, any Loan Party's:

                  (a) Creation of, and granting of Collateral Interests in favor
         of the Collateral Agent.

                  (b) Incurrence of Liabilities.

         5.30. OTHER COVENANTS. No Loan Party shall indirectly do or cause to be
done any act which, if done directly by that Loan Party, would breach any
covenant contained in this Agreement.

         5.31. INVENTORY PURCHASING. Any Person which at any time becomes a Loan
Party shall become party to, and shall at all times comply with the terms and
conditions set forth in, the Inventory Purchase Agreement including, without
limitation, the obligation of each Loan Party (other than Designs Apparel, Inc.)
to purchase of all of its Inventory exclusively from Designs Apparel, Inc. The
Inventory Purchase Agreement may not be amended, modified or supplemented,
except for the addition of Loan Parties, or terminated without the prior written
consent of the Administrative Agent.

ARTICLE 6 FINANCIAL REPORTING AND PERFORMANCE COVENANTS:

         6.1. MAINTAIN RECORDS. The Loan Parties shall:

                  (a) At all times, keep proper books of account, in which full,
         true, and accurate entries shall be made of all of the Loan Parties'
         financial transactions, all in accordance with GAAP applied
         consistently with prior periods to fairly reflect the Consolidated
         financial condition of the Loan Parties at the close of, and its
         results of operations for, the periods in question.

                  (b) Timely provide the Administrative Agent with those
         financial reports, statements, and schedules required by this Article 6
         or otherwise, each of which reports, statements and schedules shall be
         prepared, to the extent applicable, in accordance with GAAP applied
         consistently with prior periods to fairly reflect the Consolidated
         financial condition of the Loan Parties at the close of, and the
         results of operations for, the period(s) covered therein.

                  (c) At all times, keep accurate current records of the
         Collateral including, without limitation, accurate current stock, cost,
         and sales records of its Inventory, accurately and sufficiently
         itemizing and describing the kinds, types, and quantities of Inventory
         and the cost and selling prices thereof.

                  (d) At all times, retain Ernst & Young, LLP or such other
         independent certified public accountants who are reasonably
         satisfactory to the Administrative Agent and instruct such accountants
         to fully cooperate with, and be available to, the Administrative Agent
         to discuss the Loan Parties' financial

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performance, financial condition, operating results, controls, and such other
matters, within the scope of the retention of such accountants, as may be raised
by the Administrative Agent.

 (e) Not change any Loan Party's
Fiscal year.

         6.2. ACCESS TO RECORDS.

(a) Each Loan Party shall accord the
Administrative Agent with reasonable access on reasonable notice during
customary business hours from time to time as the Administrative Agent
reasonably may require to all properties owned by or over which any Loan Party
has control. The Administrative Agent shall have the right during customary
business hours on reasonable notice, and each Loan Party will permit the
Administrative Agent from time to time as Administrative Agent reasonably may
request, to examine, inspect, copy, and make extracts from any and all of the
Loan Parties' books, records, electronically stored data, papers, and files.
Each Loan Party shall make all of that Loan Party's copying facilities available
to the Administrative Agent.

                  (b) Each Loan Party hereby authorizes the Administrative Agent
during customary business hours on reasonable notice to:

                           (i) Inspect, copy, duplicate, review, cause to be
         reduced to hard copy, run off, draw off, and otherwise use any and all
         computer or electronically stored information or data which relates to
         any Loan Party, or any service bureau, contractor, accountant, or other
         person, and directs any such service bureau, contractor, accountant, or
         other person fully to cooperate with the Administrative Agent with
         respect thereto.

                           (ii) Verify at any time the Collateral or any portion
         thereof, including verification with Account Debtors, and/or with each
         Loan Party's computer billing companies, collection agencies, and
         accountants and to sign the name of each Loan Party on any notice to
         each Loan Party's Account Debtors or verification of the Collateral.

                  (c) The Borrowers' Representative, on reasonable request from
         time to time from the Administrative Agent, will make representatives
         of management available from time to time to discuss the Loan Parties'
         operating results and other related matters with the Administrative
         Agent.

                  (d) The Administrative Agent from time to time may designate
         one or more representatives to exercise the Administrative Agent's
         rights under this Section 6.2 as fully as if the Administrative Agent
         were doing so.

                  (e) The Tranche B Lender and its participants, likewise shall
         have those rights accorded to the Administrative Agent under this
         Section 6.2.

         6.3. PROMPT NOTICE TO ADMINISTRATIVE AGENT.

                  (a) The Borrowers' Representative shall provide the
         Administrative Agent with written

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notice promptly upon its becoming aware of the occurrence of any of the
following events, which written notice shall be with reasonable particularity as
to the facts and circumstances in respect of which such notice is being given:

                           (i) Any material adverse change in the business
         affairs of any Loan Party.

                           (ii) Any change in the executive officers of any Loan
         Party.

                           (iii) Any ceasing of the Loan Parties' making of
         payments, in the ordinary course, to any of its creditors, on account
         of obligations aggregating in excess of $180,000.00 (including the
         ceasing of the making of such payments on account of a dispute with the
         subject creditor).

                           (iv) Any failure by a Loan Party to pay rent at any
         of the Loan Parties' locations which rent in the aggregate exceeds
         $180,000.00, which failure continues for more than Ten (10) days
         following the day on which such rent first came due.

                           (v) A Default shall occur.

                           (vi) Any intention on the part of a Loan Party to
         discharge that Loan Party's present independent accountants or any
         withdrawal or resignation by such independent accountants from their
         acting in such capacity (as to which, SEE Subsection 6.1(d)).

                           (vii) Any litigation which, if determined adversely
         to a Loan Party, would have a material adverse effect on the financial
         condition of that Loan Party.

                  (b) The Borrowers' Representative shall:

                           (i) Add the Administrative Agent as an addressee on
         all mailing lists maintained by or for any Loan Party.

                           (ii) At the request of the Administrative Agent
         provide the Administrative Agent with a copy of the results of any
         physical or cycle count of a Loan Party's Inventory.

                           (iii) Provide the Administrative Agent, when received
         by any Loan Party, with a copy of any management letter or similar
         communications from any accountant of that Loan Party.

                           (iv) Provide the Administrative Agent with copies of
         all filings by each Loan Party with the Securities and Exchange
         Commission, when so filed, and when received, copies of all
         correspondence from the SEC, other than routine non-substantive general
         communications from the SEC.

                           (v) Provide the Administrative Agent with written
         notice of any intended bulk sale, liquidation, or other disposition of
         assets of any Loan Party at least ten (10) Business Days prior to the
         consummation of such sale or disposition, or commencement of such
         liquidation and a detailed summary of the net proceeds expected to be
         received therefrom, PROVIDING that nothing in

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this Section is intended to be, or shall be deemed to be, a waiver of any
restriction on such disposition of assets set forth elsewhere in this Agreement
including without limitation Section 6.15 .

                           (vi) Provide the Administrative Agent, when so
         distributed, with copies of any materials distributed to the
         shareholders of Designs, Inc. and each of the other Loan Parties (QUA
         such shareholders).

         6.4. BORROWING BASE CERTIFICATE. The Borrowers' Representative shall
provide the Administrative Agent by 11:30 a.m., daily, with a Borrowing Base
Certificate (in the form of EXHIBIT 6.4 annexed hereto, as such form may be
revised from time to time by the Administrative Agent, the "BORROWING BASE
CERTIFICATE"). Such Certificate may be sent to the Administrative Agent by
facsimile transmission, PROVIDED THAT the original thereof is forwarded to the
Administrative Agent on the date of such transmission.

         6.5. WEEKLY AND MONTHLY REPORTS. The Borrowers' Representative shall
provide the Administrative Agent with those financial statements and reports
described in EXHIBIT 6.5.

         6.6. QUARTERLY REPORTS. Quarterly, within fifty (50) days following the
end of each Loan Party's Fiscal quarters, the Borrowers' Representative shall
provide the Administrative Agent with the following:

                  (a) An original counterpart of a management prepared
         Consolidated and consolidating financial statement of the Loan Parties
         for the period from the beginning of the Loan Parties' then current
         Fiscal year through the end of the subject quarter, with comparative
         information for the same period of the previous Fiscal year, which
         statement shall include, at a minimum, a balance sheet, income
         statement, cash flows and a schedule of consolidation, as well as a
         comparison of same store sales and operating results for the
         corresponding quarter of the then immediately previous year and to the
         year-to- date period and to the Business Plan or updated forecast.

                  (b) The officer's compliance certificate described in Section
         6.8.

         6.7. ANNUAL REPORTS.

                  (a) Commencing with the Loan Parties' Fiscal 2002, and
annually thereafter, within ninety-five (95) days following the end of the Loan
Parties' Fiscal year, the Borrowers' Representative shall furnish the
Administrative Agent with the following:

                           (i) An original signed counterpart of the Loan
         Parties' annual Consolidated

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         financial statement (with consolidating schedules), which statement
         shall have been prepared by, and bear the unqualified opinion of, the
         Loan Parties' independent certified public accountants (i.e. said
         statement shall be "certified" by such accountants). Such annual
         statement shall include, at a minimum (with comparative information for
         the then prior Fiscal year, a balance sheet, income statement,
         statement of changes in shareholders' equity, and cash flows.

                           (ii) The following Consolidated and consolidating
         financial statements for the Loan Parties for the prior Fiscal year
         (each prepared by the Loan Parties' independent accountants): Balance
         sheet, income statement, statement of changes in stockholders' equity
         and cash flow.

                  (b) No later than the earlier of fifteen (15) days prior to
         the end of each of the Loan Party's Fiscal years or the date on which
         such accountants commence their work on the preparation of the Loan
         Parties' annual financial statement, the Borrowers' Representative
         shall give written notice to such accountants (with a copy of such
         notice, when sent, to the Administrative Agent) that:

                           (i) Such annual financial statement will be delivered
         by the Borrowers' Representative to the Administrative Agent (for
         subsequent distribution to each Lender).

                           (ii) Among other things, it is the intention of each
         Loan Party, in its engagement of such accountants, to satisfy the
         financial reporting requirements set forth in this Article 7. (iii) The
         Borrowers' Representative has been advised that the Administrative
         Agent and each Lender) will rely thereon with respect to the
         administration of, and transactions under, the credit facility
         contemplated by this Agreement.

                  (c) Each annual statement shall be accompanied by such
         accountant's Certificate indicating that, in conducting the audit for
         such annual statement, nothing came to the attention of such
         accountants to believe that such Loan Party is in Default (or that if
         the Loan Party is in Default, the facts and circumstances thereof).

         6.8. OFFICERS' CERTIFICATES. The Borrowers' Representative shall cause
the Borrowers' Representative's Chief Executive Officer, its President or its
Chief Financial Officer, in each instance, to provide such Person's Certificate
with those monthly, quarterly, and annual statements to be furnished pursuant to
this Agreement, which Certificate shall:

                  (a) Indicate that the subject statement was prepared in
         accordance with GAAP consistently applied and presents fairly the
         Consolidated financial condition of the Loan Parties at the close of,
         and the results of the Loan Parties' operations and cash flows for, the
         period(s) covered, SUBJECT,

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         HOWEVER to the following:

                           (i) Usual year end adjustments (this exception shall
         not be included in the Certificate which accompanies such annual
         statement).

                           (ii) Material Accounting Changes (in which event,
         such Certificate shall include a schedule (in reasonable detail) of the
         effect of each such Material Accounting Change) not previously
         specifically taken into account in the determination of the financial
         performance covenant(s) imposed pursuant to Section 6.11.

                  (b) Indicate either that (i) no Default has occurred and is
         continuing, or (ii) if a Default has occurred and is continuing, its
         nature (in reasonable detail) and the steps (if any) being taken or
         contemplated by the Loan Parties to be taken on account thereof.

                  (c) Include calculations concerning the Loan Parties'
         compliance (or failure to comply) at the date of the subject statement
         with each of the financial performance covenants included in Section
         6.11 hereof.

         6.9.     INVENTORIES, APPRAISALS, AND AUDITS.

                  (a) The Administrative Agent and the Tranche B Lender may
         observe each inventory and any cycle count of the Collateral which is
         undertaken on behalf of any Loan Party. The Loan Parties shall conduct
         not less than one physical inventory, per Store and per warehouse, per
         Fiscal year. The Administrative Agent does not contemplate undertaking
         or requiring any additional physical inventories by or of the Loan
         Parties, PROVIDED, HOWEVER, the Administrative Agent may do so if a
         Default has occurred and is continuing.

                           (i) On the Administrative Agent's request, the
         Borrowers' Representative shall provide the Administrative Agent with a
         copy of the preliminary results of each such inventory (as well as of
         any other physical inventory undertaken by any Loan Party) within ten
         (10) days following the completion of such inventory.

                           (ii) The Borrowers' Representative, within thirty
         (30) days following the completion of such inventory, shall provide the
         Administrative Agent with a reconciliation of the results of each such
         inventory (as well as of any other physical inventory undertaken by any
         Loan Party) and shall post such results to the Loan Parties' stock
         ledger and, as applicable to the Loan Parties' other financial books
         and records .

                           (iii) The Administrative Agent, in its discretion, if
         a Default has occurred and is continuing, may cause such additional
         inventories to be taken as the Administrative Agent determines (each,
         at the expense of the Loan Parties)

                  (b) The Administrative Agent may obtain appraisals of the
         Collateral, from time to time

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         (in all events, at the Loan Parties' expense) conducted by such
         appraisers as are satisfactory to the Administrative Agent. As of the
         Closing Date, the Administrative Agent contemplates obtaining four (4)
         appraisals (in all events, at the Loan Parties' expense) of the Loan
         Parties' Inventory during any twelve (12) month period during which
         this Agreement is in effect, each conducted by such appraisers as are
         satisfactory to the Administrative Agent, and, in any event, the
         Administrative Agent shall obtain not less than the four (4) appraisals
         contemplated as of the Closing Date if so requested by the Tranche B
         Lender; in addition, following the occurrence of an Event of Default,
         the Administrative Agent may cause additional such audits to be
         undertaken (in each event, at the Loan Parties' expense).

                  (c) The Administrative Agent contemplates conducting four (4)
         commercial finance audits (in each event, at the Loan Parties' expense)
         of the Loan Parties' books and records during any twelve (12) month
         period during which this Agreement is in effect, and, in any event, the
         Administrative Agent shall obtain not less than the four (4) commercial
         finance audits contemplated as of the Closing Date if so requested by
         the Tranche B Lender; in addition, following the occurrence of an Event
         of Default, the Administrative Agent may cause additional such audits
         to be undertaken (in each event, at the Loan Parties' expense).

         6.10.    ADDITIONAL FINANCIAL INFORMATION.

                  (a) In addition to all other information required to be
         provided pursuant to this Article 6, the Borrowers' Representative
         promptly shall provide the Administrative Agent (and any guarantor of
         the Liabilities), with such other and additional information concerning
         the Loan Parties, the Collateral, the operation of the Loan Parties'
         business, and the Loan Parties' financial condition, including original
         counterparts of financial reports and statements, as the Administrative
         Agent reasonably may from time to time request, in its own discretion
         or upon the reasonable request of the Tranche B Lender, from the
         Borrowers' Representative.

                  (b) The Borrowers' Representative MAY provide the
         Administrative Agent, from time to time hereafter, with updated
         forecasts of the Loan Parties' anticipated performance and operating
         results.

                  (c) In all events, the Borrowers' Representative, by no later
         than 30 days prior the end of the Loan Parties' Fiscal year, shall
         furnish the Administrative Agent with an updated and extended forecast
         (which shall include, on a monthly basis, balance sheets, income
         statements, and cash flow, as well as of all components of each
         borrowing base as of Fiscal month's end) which shall go out at least
         through the end of the then next Fiscal year.

                  (d) Each Loan Party recognizes that all appraisals,
         inventories, analysis, financial information, and other materials which
         the Administrative Agent may obtain, develop, or receive with respect
         to the Loan Parties are confidential to the Administrative Agent and
         that, except as otherwise

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         provided herein, no Loan Party is entitled to receipt of any of such
         appraisals, inventories, analysis, financial information, and other
         materials, nor copies or extracts thereof or therefrom.

         6.11. FINANCIAL PERFORMANCE COVENANTS.

                  (a) The Loan Parties shall maintain at all times Excess
         Availability of not less than $8,000,000.

                  (b) The Loan Parties shall not permit or suffer Capital
         Expenditures for the

                           (i) Fiscal year ending January 25, 2003, to be
         greater than $12,000,000;

                           (ii) Fiscal year ending January 30, 2004, to be
         greater than $15,000,000;

                           (iii) Fiscal year ending January 29, 2005, to be
         greater than $20,000,000; and

                           (iv) period from January 30, 2005, through the
         Maturity Date, to be greater than $6,000,000.

         Notwithstanding, the foregoing, any amount set forth in clauses (i)
through (iii) which is not committed or spent in such Fiscal year may be carried
over for Capital Expenditures during the next Fiscal year.

         The Administrative Agent may determine the Loan Parties' compliance
with such covenants based upon financial reports and statements provided by the
Borrowers' Representative to the Administrative Agent (whether or not such
financial reports and statements are required to be furnished pursuant to this
Agreement) as well as by reference to interim financial information provided to,
or developed by, the Administrative Agent.

ARTICLE 7 - USE OF COLLATERAL:

         7.1. USE OF INVENTORY COLLATERAL.

                  (a) No Loan Party shall engage in any of the following with
         respect to its Inventory:

                           (i) Any sale other than for fair consideration in the
         conduct of the Loan Parties' business in the ordinary course.

                           (ii) Sales or other dispositions to creditors.

                           (iii) Sales or other dispositions in bulk .

                           (iv) Sales of any Collateral in breach of any
         provision of this Agreement.

                  (b) No sale of Inventory shall be on consignment, approval, or
         under any other circumstances such that, with the exception of the Loan
         Parties' customary return policy applicable to the return of inventory
         purchased by the Loan Parties' retail customers in the ordinary course,
         such Inventory may be returned to a Loan Party without the consent of
         the Administrative Agent.

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         7.2. INVENTORY QUALITY. All Inventory now owned or hereafter acquired
by a Loan Party is and will be of good and merchantable quality and free from
defects (other than defects within customary trade tolerances), other than
Inventory owned or acquired for outlet stores, which in the ordinary course sell
manufacturer's overruns, discontinued lines, and irregulars.

         7.3. ADJUSTMENTS AND ALLOWANCES. Each Loan Party may grant such
allowances or other adjustments to that Loan Party's Account Debtors (exclusive
of extending the time for payment of any material Account or Account Receivable,
which shall not be done without first obtaining the Administrative Agent's prior
written consent in each instance) as that Loan Party may reasonably deem to
accord with sound business practice, PROVIDED, HOWEVER, at any time that a
Default has occurred and is continuing, the authority granted the Loan Parties
pursuant to this Section 7.3 may be limited or terminated by the Administrative
Agent at any time in the Administrative Agent's discretion.

         7.4. VALIDITY OF ACCOUNTS.

                  (a) The amount of each Account shown on the books, records,
         and invoices of the Loan Parties represented as owing by each Account
         Debtor is and will be the correct amount actually owing by such Account
         Debtor and shall have been fully earned by performance by the Loan
         Parties.

                  (b) The Administrative Agent from time to time may verify the
         Receivables Collateral directly with the Loan Parties' Account Debtors,
         such verification to be undertaken in keeping with commercially
         reasonable commercial lending standards.

                  (c) The Loan Parties have no knowledge of any impairment of
         the validity or collectibility of any of the Accounts and shall notify
         the Administrative Agent of any such fact immediately after the Loan
         Parties become aware of any such impairment.

                  (d) No Loan Party shall post any bond to secure any Loan
         Party's performance under any agreement to which any Loan Party is a
         party nor cause any surety, guarantor, or other third party obligee to
         become liable to perform any obligation of any Loan Party (other than
         to the Administrative Agent) in the event of any Loan Party's failure
         to so perform.

         7.5. NOTIFICATION TO ACCOUNT DEBTORS. The Administrative Agent shall
have the right at any time that an Event of Default has occurred to notify any
of the Loan Parties' Account Debtors to make payment directly to the
Administrative Agent and to collect all amounts due on account of the
Collateral.

ARTICLE 8 - CASH MANAGEMENT. PAYMENT OF LIABILITIES:

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<Page>

         8.1 DEPOSITORY ACCOUNTS.

                  (a) Annexed hereto as EXHIBIT 8.1 is a Schedule of all present
         DDA's, which Schedule includes, with respect to each depository (i) the
         name and address of that depository; (ii) the account number(s) of the
         account(s) maintained with such depository; and (iii) a contact person
         at such depository.

                  (b) The Borrowers' Representative shall deliver to the
         Administrative Agent, as a condition to the effectiveness of this
         Agreement:

                           (i) Notifications (in a form satisfactory to the
         Administrative Agent) executed on behalf of the relevant Loan Party to
         each depository institution with which any DDA (other than any Exempt
         DDA and the Operating Account ) is maintained of the Collateral Agent's
         Collateral Interest in such DDA.

                           (ii) A Blocked Account Agreement with any depository
         institution at which either of the following conditions applies:

                                    (A) Both a DDA (other than the Operating
         Account) and the Operating Account are maintained.

                                    (B) A Blocked Account is maintained.

                           (iii) An agreement (generally referred to as a
         "Blocked Account Agreement"), in form satisfactory to the
         Administrative Agent, with each depository institution at which a
         Blocked Account is maintained.

                  (c) No Loan Party will establish any DDA hereafter unless,
contemporaneously with such establishment, the Borrowers' Representative
provides a notification of the Collateral Agent's Collateral Interest in such
DDA and will not establish any Blocked Account unless the Borrowers'
Representative provides the Administrative Agent with a Blocked Account
Agreement.

         8.2.     CREDIT CARD RECEIPTS.

                  (a) Annexed hereto as EXHIBIT 8.2, is a Schedule which
describes all arrangements to which each Loan Party is a party with respect to
the payment to such Loan Party of the proceeds of all credit card charges for
sales by such Loan Party.

                  (b) The Borrowers' Representative shall deliver to the
Administrative Agent, as a condition to the effectiveness of this Agreement,
notification, executed on behalf of the relevant Loan Party, to each of such
Loan Party's credit card clearinghouses and processors of notice (in form
satisfactory to the Administrative Agent ), which notice provides that payment
of all credit card charges submitted by any Loan Party to that clearinghouse or
other processor and any other amount payable to any Loan Party by such
clearinghouse or other processor shall be directed to the Concentration Account
or as otherwise designated from time to time by the Administrative Agent. No
Loan Party shall change such direction or

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<Page>

designation except upon and with the prior written consent of the Administrative
Agent .

         8.3.     THE CONCENTRATION, BLOCKED, AND OPERATING ACCOUNTS .

                  (a) The following checking accounts have been or will be
established (and are so referred to herein):

                           (i) The "CONCENTRATION ACCOUNT" (so referred to
         herein): Established by the Administrative Agent with Fleet National
         Bank.

                           (ii) The "BLOCKED ACCOUNT" (so referred to herein):
         Established by the Borrowers' Representative with Fleet National Bank.

                           (iii) The "OPERATING ACCOUNT" (so referred to
         herein): Established by the Borrowers' Representative with Fleet
         National Bank.

                  (b) The contents of each DDA and of the Blocked Account
constitutes Collateral and Proceeds of Collateral. The contents of the
Concentration Account constitutes the Administrative Agent's property.

                  (c) The Loan Parties shall pay all fees and charges of, and
maintain such impressed balances as may be required by the depository in which
any account is opened as required hereby (even if such account is opened by
and/or is the property of the Administrative Agent).

         8.4.     PROCEEDS AND COLLECTIONS .

                  (a) All Receipts and all other cash proceeds of any sale or
other disposition of any of each Loan Party's assets:

                           (i) Constitute Collateral and proceeds of Collateral.

                           (ii) Shall be held in trust by the Loan Parties for
         the Administrative Agent.

                           (iii) Shall not be commingled with any of any Loan
         Party's other funds.

                           (iv) Shall be deposited and/or transferred only to
         the Blocked Account or the Concentration Account.

                  (b) The Borrowers' Representative shall cause the ACH or wire
transfer to the Blocked Account or the Concentration Account, no less frequently
than daily (and whether or not there is then an outstanding balance in the Loan
Account) the following:

                           (i) The entire contents (net of any minimum required
         balance not in any event to exceed $2500) of each DDA (but excluding
         any Exempt DDA).

                           (ii) The proceeds of all credit card charges not
         otherwise provided for pursuant hereto.

Telephone advice (confirmed by written notice) shall be provided to the
Administrative Agent on each

                                                                         Page 88
<Page>

Business Day on which any such transfer is made.

                  (c) The Borrowers' Representative shall cause the ACH or wire
transfer to the Concentration Account, no less frequently than daily (and
whether or not any Liabilities are then outstanding), of the entire ledger
balance (net of any minimum required balance not in any event to exceed $2500)
of the Blocked Account.

                  (d) In the event that, notwithstanding the provisions of this
Section 8.4, any Loan Party receives or otherwise has dominion and control of
any Receipts, or any other proceeds or collections of any Collateral, such
Receipts, proceeds, and collections shall be held in trust by that Loan Party
for the Administrative Agent and shall not be commingled with any of that Loan
Party's other funds or deposited in any account of any Loan Party other than as
instructed by the Administrative Agent.

         8.5.     PAYMENT OF LIABILITIES.

                  (a) On each Business Day, the Administrative Agent shall apply
the then collected balance of the Concentration Account (net of fees charged,
and of such impressed balances as may be required by the bank at which the
Concentration Account is maintained) first, towards the SwingLine Loans and
second, towards the unpaid balance of the Loan Account and all other Liabilities
other than principal and interest on the Tranche B Loan, provided, however, for
purposes of the calculation of interest on the unpaid principal balance of the
Loan Account, such payment shall be deemed to have been made One (1) Business
Day after such transfer, and further provided that until the occurrence, and
during the continuance, of an Event of Default, unless the Borrower
Representative otherwise instructs the Administrative Agent, the balance of the
Concentration Account shall not be applied to any LIBOR Loans until the end of
the applicable Interest Period therefor.

                  (b) The following rules shall apply to deposits and payments
under and pursuant to this Section 8.5:

                           (i) Funds shall be deemed to have been deposited to
                  the Concentration Account on the Business Day on which
                  deposited, PROVIDED THAT notice of such deposit is delivered
                  to the Administrative Agent by 2:00PM on that Business Day.

                           (ii) Funds paid to the Administrative Agent, other
                  than by deposit to the Concentration Account, shall be deemed
                  to have been received on the Business Day when they are good
                  and collected funds, PROVIDED THAT notice of such payment is
                  delivered to the Administrative Agent by 2:00PM on that
                  Business Day.

                           (iii) If notice of a deposit to the Concentration
                  Account (Section 8.5(b)(i)) or payment (Section 8.5(b)(ii)) is
                  not delivered to the Administrative Agent until after 2:00PM
                  on a Business Day, such deposit or payment shall be deemed to
                  have been made at

                                                                         Page 89
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                  9:00AM on the then next Business Day.

                           (iv) All deposits to the Concentration Account and
                  other payments to the Administrative Agent are subject to
                  clearance and collection.

                  (c) The Administrative Agent shall transfer to the Operating
Account any surplus in the Concentration Account remaining after the application
towards the Liabilities referred to in Section 8.5(a), above (less those amount
which are to be netted out, as provided therein) PROVIDED, HOWEVER, in the event
that

                           (i)      a Default has occurred and is continuing;
                  and

                           (ii)     either

                                    (A) one or more L/C's are then outstanding;
or

                                    (B) there is any amount unpaid on account of
the Tranche B Loan, then the Administrative Agent may establish a funded reserve
of up to 110% of the aggregate of (x) the Stated Amounts of such L/C's PLUS (y)
amounts unpaid on account of the Tranche B Loan. Such funded reserve shall
either be (i) returned to the Borrowers' Representative PROVIDED THAT no Default
has occurred and is continuing or (ii) applied towards the Liabilities following
Acceleration.

         8.6. THE OPERATING ACCOUNT. Except as otherwise specifically provided
in, or permitted by, this Agreement, all checks shall be drawn by the Borrowers'
Representative upon, and other disbursements shall be made by the Borrowers'
Representative solely from, the Operating Account.

ARTICLE 9 - GRANT OF SECURITY INTEREST:

         9.1. GRANT OF SECURITY INTEREST. To secure the Borrowers' prompt,
punctual, and faithful performance of all and each of the Liabilities, each
Borrower hereby grants to the Collateral Agent, for the benefit of the Lenders
as their interests may appear herein, a continuing security interest in and to,
and assigns to the Collateral Agent, for the benefit of the Lenders as their
interests may appear herein, the following, and each item thereof, whether now
owned or now due, or in which that Borrower has an interest, or hereafter
acquired, arising, or to become due, or in which that Borrower obtains an
interest, and all products, Proceeds, substitutions, and accessions of or to any
of the following (all of which, together with any other property in which the
Collateral Agent may in the future be granted a security interest, is referred
to herein as the "COLLATERAL"; any of the following terms not defined in this
Agreement shall have the meanings attributed thereto in the UCC):

                  (a)      All Accounts and accounts receivable.

                  (b)      All Inventory.

                  (c)      All General Intangibles.

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<Page>

                  (d)      All Equipment.

                  (e)      All Goods.

                  (f)      All Farm Products.

                  (g)      All Fixtures.

                  (h)      All Chattel Paper.

                  (i)      All Letter-of-Credit Rights.

                  (j)      All Payment Intangibles.

                  (k)      All Supporting Obligations.

                  (l)      All books, records, and information relating to the
                           Collateral and/or to the operation of each Borrower's
                           business, and all rights of access to such books,
                           records, and information, and all property in which
                           such books, records, and information are stored,
                           recorded, and maintained.

                  (m)      All Leasehold Interests.

                  (n)      All Investment Property, Instruments, Documents,
                           Deposit Accounts, money, policies and certificates of
                           insurance, deposits, impressed accounts, compensating
                           balances, cash, or other property.

                  (o)      Commercial Tort Claims

                  (p)      All insurance proceeds, refunds, and premium rebates,
                           including, without limitation, proceeds of fire and
                           credit insurance, whether any of such proceeds,
                           refunds, and premium rebates arise out of any of the
                           foregoing (9.1(a) through 9.1(n)) or otherwise.

                  (q)      All liens, guaranties, rights, remedies, and
                           privileges pertaining to any of the
                           foregoing (9.1(a) through 9.1(p)), including the
                           right of stoppage in transit.

         Notwithstanding anything in this Agreement to the contrary, with
respect to each item of Collateral constituting Equipment subject to a Capital
Lease, or constituting an agreement, license, permit or other instrument of a
Borrower, such item shall be subject to the security interest created hereby
only to the extent that the granting of such security interest, under the terms
of such Capital Lease, agreement, license, permit or other instrument, or as
provided by law, does not cause any default under or termination of such Capital
Lease, agreement, license, permit or other instrument or the loss of any
material right of a Borrower thereunder; provided, however, that in no event
shall the foregoing be construed to exclude from the security interest created
by this Agreement, proceeds or products of any such Capital Lease, agreement,
license, permit or other instrument of a Borrower or any accounts receivable or
the right to payments due or to become due a Borrower under any such agreement
or other instrument.

                                                                         Page 91
<Page>

         9.2.     EXTENT AND DURATION OF SECURITY INTEREST; NOTICE.

                  (a) The security interest created and granted herein is in
addition to, and supplemental of, any security interest previously granted by
any Borrower to the Collateral Agent and shall continue in full force and effect
applicable to all Liabilities until both (a) all Liabilities have been paid
and/or satisfied in full and (b) the security interest created herein is
specifically terminated in writing by a duly authorized officer of the
Collateral Agent.

                  (b) It is intended that the Collateral Interests created
herein extend to and cover all assets of each Borrower.

                  (c) If a Borrower shall at any time acquire a Commercial Tort
Claim, the Borrowers' Representative shall promptly notify the Administrative
Agent in writing of the details thereof and the Borrower shall take such actions
as the Collateral Agent shall request in order to grant to the Collateral Agent,
for the benefit of the Lenders as their interests may appear herein, a perfected
and first priority security interest therein and in the Proceeds thereof.

ARTICLE 10 - COLLATERAL AGENT AS ATTORNEY-IN-FACT:

         10.1. APPOINTMENT AS ATTORNEY-IN-FACT. Each Borrower hereby irrevocably
constitutes and appoints the Collateral Agent as that (acting through any of its
officers) Borrower's true and lawful attorney, with full power of substitution,
following the occurrence of an Event of Default, to convert the Collateral into
cash at the sole risk, cost, and expense of that Borrower, but for the sole
benefit of the Agents and the Lenders. The rights and powers granted the
Collateral Agent by this appointment include but are not limited to the right
and power to:

                  (a) Prosecute, defend, compromise, or release any action
relating to the Collateral.

                  (b) Sign change of address forms to change the address to
which each Borrower's mail is to be sent to such address as the Collateral Agent
shall designate; receive and open each Borrower's mail; remove any Receivables
Collateral and Proceeds of Collateral therefrom and turn over the balance of
such mail either to the Borrowers' Representative or to any trustee in
bankruptcy or receiver of the Borrowers' Representative, or other legal
representative of a Borrower whom the Collateral Agent determines to be the
appropriate person to whom to so turn over such mail.

                  (c) Endorse the name of the relevant Borrower in favor of the
Collateral Agent upon any and all checks, drafts, notes, acceptances, or other
items or instruments; sign and endorse the name of the relevant Borrower on, and
receive as secured party, any of the Collateral, any invoices, schedules of
Collateral, freight or express receipts, or bills of lading, storage receipts,
warehouse receipts, or other documents of title respectively relating to the
Collateral.

                  (d) Sign the name of the relevant Borrower on any notice to
that Borrower's Account

                                                                         Page 92
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Debtors or verification of the Receivables Collateral; sign the relevant
Borrower's name on any Proof of Claim in Bankruptcy against Account Debtors, and
on notices of lien, claims of mechanic's liens, or assignments or releases of
mechanic's liens securing the Accounts.

                  (e) Take all such action as may be necessary to obtain the
payment of any letter of credit and/or banker's acceptance of which any Borrower
is a beneficiary.

                  (f) Repair, manufacture, assemble, complete, package, deliver,
alter or supply goods, if any, necessary to fulfill in whole or in part the
purchase order of any customer of each Borrower.

                  (g) Use, license or transfer any or all General Intangibles of
each Borrower.

         10.2. NO OBLIGATION TO ACT. The Collateral Agent shall not be obligated
to do any of the acts or to exercise any of the powers authorized by Section
10.1 herein, but if the Collateral Agent elects to do any such act or to
exercise any of such powers, it shall not be accountable for more than it
actually receives as a result of such exercise of power, and shall not be
responsible to any Borrower for any act or omission to act except for any act or
omission to act as to which there is a final determination made in a judicial
proceeding (in which proceeding the Collateral Agent has had an opportunity to
be heard) which determination includes a specific finding that the subject act
or omission to act had been grossly negligent or in actual bad faith or
constituted wilful misconduct.

ARTICLE 11 - EVENTS OF DEFAULT:

         The occurrence of any event described in this Article 11 respectively
shall constitute an "EVENT OF DEFAULT" herein. The occurrence of any Event of
Default shall also constitute, without notice or demand, a default under all
other agreements between any Agent and any Lender and any Loan Party and
instruments and papers heretofore, now, or hereafter given any Agent and any
Lender by any Loan Party.

         11.1. FAILURE TO PAY THE REVOLVING CREDIT OR THE TRANCHE B LOAN The
failure by any Loan Party to pay when due any principal of, interest on, or fees
in respect of, the Revolving Credit or the Tranche B Loan.

         11.2. FAILURE TO MAKE OTHER PAYMENTS. The failure by any Loan Party to
pay within five (5) Business Days when due (or upon demand, if payable on
demand) any payment Liability other than any payment liability on account of the
principal of, or interest on, or fees in respect of, the Revolving Credit or the
Tranche B Loan.

         11.3. FAILURE TO PERFORM COVENANT OR LIABILITY (NO GRACE PERIOD) . The
failure by

                                                                         Page 93
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any Loan Party to promptly, punctually, faithfully and timely
perform, discharge, or comply with any covenant or Liability not otherwise
described in Section 11.1 or Section 11.2 hereof, and included in any of the
following provisions hereof:

<Table>
<Caption>

                           SECTION                           RELATES TO            :
                           --------------------------------------------------------
<S>                                         <C>
                           5.2(c)           State of Organization, State Identification Number and Taxpayer
                                            Identification Number
                           5.3(b)           Notice of Name Change
                           5.5              Location of Collateral
                           5.7(a)           Title to Assets
                           5.8              Indebtedness
                           5.9              Insurance Policies
                           5.20, 5.21       Dividends, Investments and Other Entity Actions
                           5.26             Affiliate Transactions
                           5.27             Further Assurances
                           6.11             Minimum Excess Availability and Capital Expenditures
                           7.1              Use of Inventory Collateral
                           Article 8        Cash Management (except if the failure to comply is as a result of force
                                            majeure or through no fault of the Loan Parties)
</Table>

         11.4. FINANCIAL REPORTING REQUIREMENTS. The failure by the any Loan
Party to promptly, punctually, faithfully and timely perform, discharge, or
comply with the financial reporting requirements included in Article 6, subject,
however, to the following limited number of grace periods applicable to certain
of those requirements:

<Table>
<Caption>

REPORT/STATEMENT                     REQUIRED BY          GRACE PERIOD                NUMBER OF GRACE
                                     SECTION                                          PERIODS

<S>                                  <C>                  <C>                         <C>
Borrowing Base Certificates          6.4                  One Business Day            Three per Fiscal Quarter
Weekly Report                        6.5                  Two Business Days           Six in any 12 months
Monthly Report (15 Days)             6.5                  Three Business Days         Three in any 12 months
Monthly Reports (30 Days)            6.5                  Three Business Days         Three in any 12 months
</Table>

         11.5.    FAILURE TO PERFORM COVENANT OR LIABILITY (GRACE PERIOD). The
failure by any Loan Party, within fifteen (15) days following the earlier of any
Loan Party's knowledge of a breach of any covenant or Liability not described in
any of Sections 11.1, 11.2, 11.3 or 11.4, or of the Borrowers' Representative's
receipt of written notice from the Administrative Agent of the breach of any
such covenants or Liabilities.

         11.6.    TRANCHE B LOAN ACTION EVENT ACCELERATION.

                  (a)      The occurrence of any Tranche B Loan Action Event.

                  (b)      The Administrative Agent's receipt of an Acceleration
Notice pursuant to Section 14.2.

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         11.7. MISREPRESENTATION. The determination by the Administrative Agent
that any representation or warranty at any time made by any Loan Party to any
Agent or any Lender was not true or complete in all material respects when
given; PROVIDED, HOWEVER, that for purposes of this Section 11.7, any
representation or warranty made by the Loan Parties in reliance on
representations and warranties made by Casual Male Corp. and certain of its
Subsidiaries in the Casual Male Acquisition Agreement shall be deemed to have
been made to the Loan Parties' knowledge; and, PROVIDED FURTHER, that if any
such representation or warranty is deemed repeated by the Loan Parties under the
terms of this Agreement on and after September 30, 2002, and such representation
and warranty was not true or complete in all material respects when given, and
the Loan Parties have failed to correct such representation or warranty by
providing revised schedules or exhibits, or otherwise, in each case to the
Administrative Agent's satisfaction, then the foregoing proviso shall be of no
effect.

         11.8. ACCELERATION OF OTHER DEBT; BREACH OF LEASE. The occurrence of
any event such that any Indebtedness of any Loan Party in excess of
$1,000,000.00 to any creditor other than the Agent or any Lender could be
accelerated (provided, that an event of default under the 12% Subordinated Note
(or any Note Purchase Agreement under which such Subordinated Note is issued)
caused solely by a breach of a representation or warranty shall not be an Event
of Default hereunder) or, without the consent of a Loan Party, Leases with
aggregate monthly rents of at least $500,000.00 could be terminated prior to the
stated termination date thereof (whether or not the subject creditor or lessor
takes any action on account of such occurrence).

         11.9. DEFAULT UNDER OTHER AGREEMENTS. The occurrence of any breach or
default under any agreement between the Agent or any Lender and any Loan Party
or instrument or paper given the Agent or any Lender by any Loan Party not
constituting a Loan Document, whether such agreement, instrument, or paper now
exists or hereafter arises, with respect to Indebtedness in excess of
$1,000,000.00 (notwithstanding that the Agent or the subject Lender may not have
exercised its rights upon default under any such other agreement, instrument or
paper).

         11.10. UNINSURED CASUALTY LOSS. The occurrence of any uninsured loss,
theft, damage, or destruction of or to any material portion of the Collateral.

         11.11. ATTACHMENT. JUDGMENT. RESTRAINT OF BUSINESS.

                  (a) The service of process upon any Agent or any Lender or any
Participant of a

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court order or order of any other applicable governmental authority attaching,
by trustee, mesne, or other process, any funds of any Loan Party on deposit
with, or assets of any Loan Party in the possession of, that Agent or that
Lender or such Participant.

                  (b) The entry of judgments against any Loan Party, to the
extent not covered by insurance (subject to a reasonable deductible) aggregating
more than $750,000, which judgments are not satisfied (if a money judgment) or
appealed from (with execution or similar process stayed) within thirty (30) days
of entry.

                  (c) The entry of any order or the imposition of any other
process having the force of law, the effect of which is to restrain in any
material way the conduct by any Loan Party of its business in the ordinary
course.

         11.12. CANTON MORTGAGE DEFAULT. The (i) acceleration of any
Indebtedness which is secured by the Canton Warehouse or (ii) the failure of the
Loan Parties to cause the proceeds of any refinancing or replacement of the
Canton Mortgage, and/or any second mortgage on the Canton Warehouse, in each
case in excess of the principal outstanding under the Canton Mortgage on the
Closing Date, to be applied immediately upon receipt thereof to repayment of the
Revolving Credit Obligations.

         11.13. INDICTMENT - FORFEITURE. The indictment of, or institution of
any legal process or proceeding against, any Loan Party, under any federal,
state, municipal, and other civil or criminal statute, rule, regulation, order,
or other requirement having the force of law where the relief, penalties, or
remedies sought or available include the forfeiture of more than a DE MINIMIS
part of the property of that Loan Party and/or the imposition of any stay or
other order, the effect of which could be to restrain in any material way the
conduct by any Loan Party of its business in the ordinary course.

         11.14.   CHALLENGE TO LOAN DOCUMENTS.

                  (a) Any challenge by or on behalf of the Borrowers'
Representative, any Loan Party to the validity of any Loan Document or the
applicability or enforceability of any Loan Document strictly in accordance with
the subject Loan Document's terms or which seeks to void, avoid, limit, or
otherwise adversely affect any security interest created by or in any Loan
Document or any payment made pursuant thereto.

                  (b) Any determination by any court or any other judicial or
government authority that any Loan Document is not enforceable strictly in
accordance with the subject Loan Document's terms or which voids, avoids,
limits, or otherwise adversely affects any security interest created by any Loan
Document or any payment made pursuant thereto.

                                                                         Page 96
<Page>

         11.15. CHANGE IN CONTROL. Any Change in Control.

         11.16. BUSINESS FAILURE. Any act by, against or relating to any Loan
Party, or its property or assets, which act constitutes the determination by any
Loan Party to initiate or acquiesce to: a program of partial or total
self-liquidation; an application for, consent to, or sufferance of the
appointment of a receiver, trustee, or other person, pursuant to court action or
otherwise, with respect to all or any part of any Loan Party's property; the
granting of any trust mortgage or execution of an assignment for the benefit of
the creditors of any Loan Party; any other voluntary or involuntary liquidation
or extension of debt agreement for any Loan Party; the offering by, or entering
into by, any Loan Party of any composition, extension, or any other arrangement
seeking relief from or extension of the debts of any Loan Party; or the
initiation of any judicial or non-judicial proceeding or agreement by, against,
or including any Loan Party which seeks or intends to accomplish a
reorganization or arrangement with creditors; and/or the initiation by or on
behalf of any Loan Party of the liquidation or winding up of all or any part of
any Loan Party's business or operations.

         11.17. BANKRUPTCY. The failure by any Loan Party to generally pay the
debts of that Loan Party as they mature; adjudication of bankruptcy or
insolvency relative to any Loan Party; the entry of an order for relief or
similar order with respect to any Loan Party in any proceeding pursuant to the
Bankruptcy Code or any other federal bankruptcy law; the filing of any
complaint, application, or petition by any Loan Party initiating any matter in
which any Loan Party is or may be granted any relief from the debts of that Loan
Party pursuant to the Bankruptcy Code or any other insolvency statute or
procedure; the filing of any complaint, application, or petition against any
Loan Party initiating any matter in which that Loan Party is or may be granted
any relief from the debts of that Loan Party pursuant to the Bankruptcy Code or
any other insolvency statute or procedure, which complaint, application, or
petition is not timely contested in good faith by that Loan Party by appropriate
proceedings or, if so contested, is not dismissed within ninety (90) days of
when filed.

         11.18 TERMINATION OF BUSINESS. Unless subject to the prior written
consent of the Agent, the determination of the Loan Parties, whether by vote of
the Loan Parties' board of directors or otherwise to: suspend the operation of
the Loan Parties' business in the ordinary course, liquidate all or a material
portion of the Loan Parties' assets or Stores, or employ an agent or other third
party to conduct any so- called store closing, store liquidation or
"Going-Out-Of-Business" sales (other than in connection with a Permitted Asset
Disposition).

         11.19 PAYMENT OF OTHER INDEBTEDNESS. The Loan Parties shall prepay or
discharge any

                                                                         Page 97
<Page>

Indebtedness prior to its maturity date except as expressly permitted hereunder.

         11.20 DEFAULT BY GUARANTOR; TERMINATION OF GUARANTY. The occurrence of
any Guarantor Default and/or the termination or attempted termination of any
Guaranty Agreement by any Person.

         11.21 MATERIAL ADVERSE CHANGE. An event shall have occurred or failed
to occur, which occurrence or failure is or could have a materially adverse
effect upon the financial condition of (i) Designs, Inc. and its Subsidiaries
when compared with such financial condition as of March 6, 2002 and (ii) Casual
Male and its subsidiaries when compared with such financial condition as of
April 6, 2002.

         11.22 LEVI STRAUSS CHANGES. There shall have occurred any material
adverse change in or to the Loan Parties' business relationship with Levi
Strauss & Co. when compared to such relationship as of the Closing Date.

ARTICLE 12 - RIGHTS AND REMEDIES UPON DEFAULT:

         12.1 ACCELERATION. Upon the occurrence of any Event of Default, the
Administrative Agent may (and on the issuance of Acceleration Notice(s)
requisite to the causing of Acceleration, the Administrative Agent shall)
declare all Indebtedness of the Loan Parties to the Lenders to be immediately
due and payable and may exercise all of the Administrative Agent's Rights and
Remedies (and the Collateral Agent may likewise exercise all of its rights and
remedies upon default) as the Administrative Agent from time to time thereafter
determines as appropriate.

         12.2. RIGHTS OF ENFORCEMENT. The Collateral Agent shall have all of the
rights and remedies of a secured party upon default under the UCC, in addition
to which the Collateral Agent shall have all and each of the following rights
and remedies:

                  (a) To give notice to any bank at which any DDA or Blocked
Account is maintained and in which Proceeds of Collateral are deposited, to turn
over such Proceeds directly to the Collateral Agent.

                  (b) To give notice to any customs broker of any of the Loan
Parties to follow the instructions of the Collateral Agent as provided in any
written agreement or undertaking of such broker in favor of the Collateral
Agent.

                  (c) To collect the Receivables Collateral with or without the
taking of possession of any of the Collateral.

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                  (d) To take possession of all or any portion of the
Collateral.

                  (e) To sell, lease, or otherwise dispose of any or all of the
Collateral, in its then condition or following such preparation or processing as
the Collateral Agent deems advisable and with or without the taking of
possession of any of the Collateral.

                  (f) To conduct one or more going out of business sales which
include the sale or other disposition of the Collateral.

                  (g) To apply the Receivables Collateral or the Proceeds of the
Collateral towards (but not necessarily in complete satisfaction of) the
Liabilities.

                  (h) To exercise all or any of the rights, remedies, powers,
privileges, and discretions under all or any of the Loan Documents.

         12.3.    SALE OF COLLATERAL.

                  (a) Any sale or other disposition of the Collateral may be at
public or private sale upon such terms and in such manner as the Collateral
Agent deems advisable, having due regard to compliance with any statute or
regulation which might affect, limit, or apply to the Collateral Agent's
disposition of the Collateral.

                  (b) The Collateral Agent, in the exercise of the Collateral
Agent's rights and remedies upon default, may conduct, or may require the Loan
Parties to conduct, one or more going out of business sales, in the Collateral
Agent's own right or by one or more agents and contractors. Such sale(s) may be
conducted upon any premises owned, leased, or occupied by any Loan Party. The
Collateral Agent and any such agent or contractor, in conjunction with any such
sale, may augment the Inventory with other goods (all of which other goods shall
remain the sole property of the Collateral Agent or such agent or contractor).
Any amounts realized from the sale of such goods which constitute augmentations
to the Inventory (net of an allocable share of the costs and reasonable expenses
incurred in their disposition) shall be the sole property of the Collateral
Agent or such agent or contractor and neither any Loan Party nor any Person
claiming under or in right of any Loan Party shall have any interest therein.
The proceeds of any such going out of business sale which is conducted by a Loan
Party at the request of the Collateral Agent shall be first applied to the
direct costs of such sale.

                  (c) Unless the Collateral is perishable or threatens to
decline speedily in value, or is of a type customarily sold on a recognized
market (in which event the Collateral Agent shall provide the Borrowers'
Representative such notice as may be practicable under the circumstances), the
Collateral Agent shall give the Borrowers' Representative at least ten (10) days
prior written notice of the date, time, and place of any proposed public sale,
and of the date after which any private sale or other disposition of the
Collateral may be made. Each Borrower agrees that such written notice shall
satisfy all requirements for notice to that Borrower which are imposed under the
UCC or other applicable law with respect to the

                                                                         Page 99
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exercise of the Collateral Agent's rights and remedies upon default.

                  (d) The Collateral Agent, the Administrative Agent, and any
Lender may purchase the Collateral, or any portion of it at any sale held under
this Article.

                  (e) If any of the Collateral is sold, leased, or otherwise
disposed of by the Collateral Agent on credit, the Liabilities shall not be
deemed to have been reduced as a result thereof unless and until payment is
finally received thereon by the Collateral Agent.

                  (f) The Collateral Agent shall turn over to the Administrative
Agent the proceeds of the exercise by the Collateral Agent of its rights and
remedies under this Article 12. The Administrative Agent shall apply the
proceeds of the Collateral Agent's exercise of its rights and remedies upon
default pursuant to this Article 12 in accordance with Sections 14.7 and 14.8.

         12.4. OCCUPATION OF BUSINESS LOCATION. In connection with the
Collateral Agent's exercise of the Collateral Agent's rights under this Article
12, the Collateral Agent may enter upon, occupy, and use any premises owned or
occupied by each Loan Party, and may exclude each Loan Party from such premises
or portion thereof as may have been so entered upon, occupied, or used by the
Collateral Agent. The Collateral Agent shall not be required to remove any of
the Collateral from any such premises upon the Collateral Agent's taking
possession thereof, and may render any Collateral unusable to the Loan Parties.
In no event shall the Collateral Agent be liable to any Loan Party for use or
occupancy by the Collateral Agent of any premises pursuant to this Article 12,
nor for any charge (such as wages for any Loan Party's employees and utilities)
incurred in connection with the Collateral Agent's exercise of the Collateral
Agent's Rights and Remedies.

         12.5. GRANT OF NONEXCLUSIVE LICENSE. Except to the extent prohibited by
a Borrower's contractual obligations, which prohibition has been disclosed to
the Administrative Agent, each Borrower hereby grants to the Collateral Agent a
royalty free, nonexclusive and irrevocable license to use, apply, and affix any
trademark, trade name, logo, or the like in which any Borrower now or hereafter
has rights, such license being with respect to the Collateral Agent's exercise
of the rights hereunder including, without limitation, in connection with any
completion of the manufacture of Inventory or sale or other disposition of
Inventory.

         12.6. ASSEMBLY OF COLLATERAL. The Collateral Agent may require any
Borrower to assemble the Collateral and make it available to the Collateral
Agent at the Loan Parties' sole risk and expense at a place or places which are
reasonably convenient to both the Collateral Agent and the Borrowers'
Representative.

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<Page>

         12.7. RIGHTS AND REMEDIES. The rights, remedies, powers, privileges,
and discretions of the Administrative Agent hereunder (herein, the "AGENTS'
RIGHTS AND REMEDIES") shall be cumulative and not exclusive of any rights or
remedies which it would otherwise have. No delay or omission by an Agent in
exercising or enforcing any of the Agents' Rights and Remedies shall operate as,
or constitute, a waiver thereof. No waiver by an Agent of any Event of Default
or of any default under any other agreement shall operate as a waiver of any
other default hereunder or under any other agreement. No single or partial
exercise of any of the Agents' Rights or Remedies, and no express or implied
agreement or transaction of whatever nature entered into between any Agent and
any person, at any time, shall preclude the other or further exercise of the
Agents' Rights and Remedies. No waiver by any Agent of any of the Agents' Rights
and Remedies on any one occasion shall be deemed a waiver on any subsequent
occasion, nor shall it be deemed a continuing waiver. The Agents' Rights and
Remedies may be exercised at such time or times and in such order of preference
as the Agents may determine. The Agents' Rights and Remedies may be exercised
without resort or regard to any other source of satisfaction of the Liabilities.

ARTICLE 13 - REVOLVING CREDIT FUNDINGS AND DISTRIBUTIONS:

         13.1.    REVOLVING CREDIT FUNDING PROCEDURES.

                  (a) The Agent shall advise each Revolving Credit Lender, no
later than 2:00PM on a date on which any Revolving Credit Loan (other than a
SwingLine Loan) is to be made, that such Revolving Credit Loan is to be made.
Such advice, in each instance, may be by telephone or facsimile transmission,
PROVIDED THAT if such advice is by telephone, it shall be confirmed in writing.
Advice of a Revolving Credit Loan shall include the amount of and interest rate
applicable to the subject Revolving Credit Loan.

                  (b) Subject to that Revolving Credit Lender's Revolving Credit
Dollar Commitment, each Revolving Credit Lender, by no later than the end of
business on the day on which the subject Revolving Credit Loan is to be made,
shall Transfer that Revolving Credit Lender's Revolving Credit Percentage
Commitment of the subject Revolving Credit Loan to the Administrative Agent.

         13.2.    SWINGLINE LOANS.

                  (a) In the event that, when a Revolving Credit Loan is
requested, the aggregate unpaid balance of the SwingLine Loan is less than the
SwingLine Loan Ceiling, then the SwingLine Lender may advise the Administrative
Agent that the SwingLine Lender has determined to include up to the amount of
the requested Revolving Credit Loan as part of the SwingLine Loan. In such
event, the SwingLine Lender shall Transfer the amount of the requested Revolving
Credit Loan to the Administrative Agent.

                  (b) The SwingLine Loan shall be converted to a Revolving
Credit Loan in which all

                                                                        Page 101
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Revolving Credit Lenders participate as follows:

                           (i) At any time and from time to time, the SwingLine
         Lender may advise the Administrative Agent that all, or any part, of
         the SwingLine Loan is to be converted to a Revolving Credit Loan in
         which all Revolving Credit Lenders participate, provided that if the
         Administrative Agent is not so advised by the SwingLine Lender, then
         all SwingLine Loans shall be converted no less frequently than weekly
         to Revolving Credit Loans in which all Revolving Credit Lenders
         participate.
                           (ii) At the initiation of a Liquidation, the then
         entire unpaid principal balance of the SwingLine Loan shall be
         converted to a Revolving Credit Loan in which all Revolving Credit
         Lenders participate.
In either such event, the Administrative Agent shall advise each Revolving
Credit Lender of such conversion as if, and with the same effect as if, such
conversion were the making of a Revolving Credit Loan as provided in Section
14.1.

                  (c) The SwingLine Lender, in separate capacities, may also be
one or more Agents, a Revolving Credit Lender or the Tranche B Lender.

                  (d) The SwingLine Lender, in its capacity as SwingLine Lender,
is not a "Revolving Credit Lender" for any of the following purposes:

                           (i) Except as otherwise specifically provided in the
         relevant Section, any distribution pursuant to Section 14.8.

                           (ii) Determination of whether the requisite holders
         of Loan Commitments have Consented to action requiring such Consent.

         13.3.    ADMINISTRATIVE AGENT'S COVERING OF FUNDINGS:

                  (a) Each Revolving Credit Lender shall make available to the
Administrative Agent, as provided herein, that Revolving Credit Lender's
Revolving Credit Percentage Commitment of the following:

                           (i) Each Revolving Credit Loan, up to the maximum
         amount of that Revolving Credit Lender's Revolving Credit Dollar
         Commitment of the Revolving Credit Loans.

                           (ii) Up to the maximum amount of that Revolving
         Credit Lender's Revolving Credit Dollar Commitment of each L/C Drawing
         (to the extent that such L/C Drawing is not "covered" by a Revolving
         Credit Loan as provided herein).

                  (b)      In all circumstances, the Administrative Agent may:

                           (i) Assume that each Revolving Credit Lender, subject
         to Section 13.3(a), timely shall make available to the Administrative
         Agent that Revolving Credit Lender's Revolving Credit Percentage
         Commitment of each Revolving Credit Loan, notice of which is provided
         pursuant to Section 13.1 and shall make available, to the extent not
         "covered" by a Revolving Credit

                                                                        Page 102
<Page>

         Loan, that Revolving Credit Lender's Revolving Credit Percentage
         Commitment of any honoring of an L/C.

                           (ii) In reliance upon such assumption, make available
         the corresponding amount to the Loan Parties.

                           (iii) Assume that each Revolving Credit Lender timely
         shall pay, and shall make available, to the Administrative Agent all
         other amounts which that Revolving Credit Lender is obligated to so pay
         and/or make available hereunder or under any of the other Loan
         Documents.

                  (c) In the event that, in reliance upon any of such
assumptions, the Administrative Agent makes available a Revolving Credit
Lender's Revolving Credit Percentage Commitment of one or more Revolving Credit
Loans, or any other amount to be made available hereunder or under any of the
other Loan Documents, which amount a Revolving Credit Lender (a "DELINQUENT
REVOLVING CREDIT LENDER") fails to provide to the Administrative Agent within
One (1) Business Day of written notice of such failure, then:

                           (i) The amount which had been made available by the
         Administrative Agent is an " ADMINISTRATIVE AGENT'S COVER" (and is so
         referred to herein).

                           (ii) All interest paid by the Loan Parties on account
         of the Revolving Credit Loan or coverage of the subject L/C Drawing
         which consist of the Administrative Agent's Cover shall be retained by
         the Administrative Agent until the Administrative Agent's Cover, with
         interest, has been paid.

                           (iii) The Delinquent Revolving Credit Lender shall
         pay to the Administrative Agent, on demand, interest at a rate equal to
         the prevailing federal funds rate on any Administrative Agent's Cover
         in respect of that Delinquent Revolving Credit Lender

                           (iv) The Administrative Agent shall have succeeded to
         all rights to payment to which the Delinquent Revolving Credit Lender
         otherwise would have been entitled hereunder in respect of those
         amounts paid by or in respect of the Loan Parties on account of the
         Administrative Agent's Cover together with interest until it is repaid.
         Such payments shall be deemed made first towards the amounts in respect
         of which the Administrative Agent's Cover was provided and only then
         towards amounts in which the Delinquent Revolving Credit Lender is then
         participating. For purposes of distributions to be made pursuant to
         Section 13.4(a) (which relates to ordinary course distributions) or
         Section 14.7 (which relates to distributions of proceeds of a
         Liquidation) below, amounts shall be deemed distributable to a
         Delinquent Revolving Credit Lender (and consequently, to the
         Administrative Agent to the extent to which the Administrative Agent is
         then entitled) at the highest level of distribution (if applicable) at
         which the Delinquent Revolving Credit Lender would otherwise have been
         entitled to a distribution.

                  (v) Subject to Subsection 13.3(c)(iv), the Delinquent
         Revolving Credit Lender shall be

                                                                        Page 103
<Page>

         entitled to receive any payments from the Loan Parties to which the
         Delinquent Revolving Credit Lender is then entitled, PROVIDED HOWEVER
         there shall be deducted from such amount and retained by the
         Administrative Agent any interest to which the Administrative Agent is
         then entitled on account of Section 13.3(c)(ii), above.

                  (d) A Delinquent Revolving Credit Lender shall not be relieved
of any obligation of such Delinquent Revolving Credit Lender hereunder (all and
each of which shall constitute continuing obligations on the part of any
Delinquent Revolving Credit Lender).

                  (e) A Delinquent Revolving Credit Lender may cure its status
as a Delinquent Revolving Credit Lender by paying the Administrative Agent the
aggregate of the following:

                           (i)      The Administrative Agent's Cover (to the
                                    extent not previously repaid by the Loan
                                    Parties and retained by the Administrative
                                    Agent in accordance with Subsection
                                    13.3(c)(iv), above) with respect to that
                                    Delinquent Revolving Credit Lender.

                           PLUS

                           (ii)     The aggregate of the amount payable under
                                    Subsection 13.3(c)(iii), above (which
                                    relates to interest to be paid by that
                                    Delinquent Revolving Credit Lender).

                           PLUS

                           (iii)    All such costs and expenses as may be
                                    incurred by the Administrative Agent in the
                                    enforcement of the Administrative Agent's
                                    rights against such Delinquent Revolving
                                    Credit Lender.

         13.4. ORDINARY COURSE DISTRIBUTIONS: REVOLVING CREDIT. (THIS SECTION
13.4 APPLIES UNLESS THE PROVISIONS OF SECTION 14.7 (WHICH RELATES TO
DISTRIBUTIONS IN THE EVENT OF A LIQUIDATION) BECOME OPERATIVE).

                  (a) Weekly, on such day as may be set from time to time by the
Administrative Agent (or more frequently at the Administrative Agent's option),
the Administrative Agent and each Revolving Credit Lender shall settle up on
amounts advanced under the Revolving Credit and collected funds received in the
Concentration Account.

                  (b) The Administrative Agent shall distribute to the SwingLine
Lender and to each Revolving Credit Lender such Person's respective Pro-Rata
share of interest payments on the Revolving Credit Loans when actually received
and collected by the Administrative Agent (excluding the one Business Day for
settlement provided for in Section 8.5(a), which shall be for the account of the
Administrative Agent only). For purposes of calculating interest due to a
Revolving Credit Lender, that Revolving Credit Lender

                                                                        Page 104
<Page>

shall be entitled to receive interest on the actual amount contributed by that
Revolving Credit Lender towards the principal balance of the Revolving Credit
Loans outstanding during the applicable period covered by the interest payment
made by the Loan Parties. Any net principal reductions to the Revolving Credit
Loans received by the Administrative Agent in accordance with the Loan Documents
during such period shall not reduce such actual amount so contributed, for
purposes of calculation of interest due to that Revolving Credit Lender, until
the Administrative Agent has distributed to that Revolving Credit Lender its
Pro-Rata share thereof.

                  (c) The Administrative Agent shall distribute fees paid on
account of the Revolving Credit, as follows:

                           (i) L/C Fee (Section 2.20(a)): Pro-Rata to the
         Revolving Credit Lenders.

                           (ii) Unused Line Fee (Section 2.15): Pro-Rata to the
         Revolving Credit Lenders.

                           (iii) Revolving Credit Early Termination Fee (Section
         2.16) : Pro-Rata to the Revolving Credit Lenders.

                           (iv) Revolving Credit Commitment Fee (Section 2.13) :
         As provided in separate letter agreements with the respective Revolving
         Credit Lenders.

                  (d) No Lender shall have any interest in or right to receive
any part of the following:

                           (i) Any interest which reflects "float" as described
         in the PROVISO included in Section 8.5(a), all of which float shall be
         for the account of the Administrative Agent only.

                           (ii) The Administrative Agent's Monitoring Fee
         (Section 2.14) to be paid by the Loan Parties to the Administrative
         Agent.

                           (iii) Fees described in Section 2.20(b) (which
         relates to fees associated with, among other things, the issuance of
         L/C's): Retained by the Issuer.

                  (e) No Revolving Credit Lender shall have any interest in or
right to receive any part of the Tranche B Fees.

                  (f) Any amount received by the Administrative Agent or the
Collateral Agent as reimbursement for any cost or expense (including without
limitation, reasonable attorneys' fees) shall be distributed by the
Administrative Agent to that Person which is entitled to such reimbursement as
provided in this Agreement (and if such Person(s) is (are) the Lenders, Pro-Rata
determined as of the date on which the expense, in respect of which such
reimbursement is being made, was incurred).

                  (g) Each distribution pursuant to this Section 13.4 is subject
to Section 13.3(c), above (which relates to the effect of the failure of any
Revolving Credit Lender to have Transferred to the Administrative Agent any
amount which that Revolving Credit Lender is then obligated to so Transfer
pursuant to the within Agreement).

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<Page>

         13.5. ORDINARY COURSE DISTRIBUTIONS : THE TRANCHE B LOAN (THIS SECTION
13.5 APPLIES UNLESS THE PROVISIONS OF SECTION 14.7 (WHICH RELATES TO
DISTRIBUTIONS IN THE EVENT OF A LIQUIDATION) BECOME OPERATIVE).

                  (a) The Administrative Agent shall distribute to the Tranche B
Lender payments on account of principal of, and interest on, the Tranche B Loan
and the Tranche B Fees as received and collected by the Administrative Agent
from the Loan Parties in accordance with the provisions of this Agreement or as
made available by the Administrative Agent as the proceeds of advances under the
Revolving Credit. As provided in Section 13.4(f), any amount received by the
Administrative Agent or the Collateral Agent as reimbursement for any cost or
expense (including without limitation, reasonable attorneys' fees) shall be
distributed by the Administrative Agent to that Person which is entitled to such
reimbursement as provided in this Agreement (and if such Person(s) is (are) the
Lenders, Pro-Rata determined as of the date on which the expense, in respect of
which such reimbursement is being made, was incurred).

                  (b) Unless otherwise specifically agreement to in writing, the
Administrative Agent shall distribute the proceeds of a disposition of
Collateral, other than in the ordinary course, in accordance with the ordering
of distributions set forth in Section 14.8(c).

ARTICLE 14 - ACCELERATION AND LIQUIDATION:

        14.1.    ACCELERATION NOTICES

                  (a) The Administrative Agent may give the Collateral Agent and
Lenders an Acceleration Notice at any time following the occurrence of an Event
of Default.
                  (b) The SuperMajority Revolving Credit Lenders may give the
Administrative Agent an Acceleration Notice at any time following the occurrence
of an Event of Default. Such notice may be by multiple counterparts, PROVIDED
THAT counterparts executed by the requisite Lenders are received by the
Administrative Agent within a period of five (5) consecutive Business Days.

                 (c)  The Tranche B  Lender may give the Administrative Agent
an Acceleration Notice as follows:

                           (i) At any time following the occurrence of an Event
         of Default which occurs after the Revolving Credit Debt has been paid
         in full, all L/C's have been cash collateralized, and there is no
         obligation on the Revolving Credit Lenders to make any further loans or
         to provide any further financial accommodation under the Revolving
         Credit.
                           (ii) At any time following the occurrence of an Event
         of Default which occurs after a BuyOut by the Tranche B Lender.

                           (iii)    At any time following the occurrence of a
         Bankruptcy Breach.

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<Page>

                           (iv)     At any time as permitted pursuant to
         Section 14.2.

         14.2.    MANDATORY ACCELERATION RIGHT OF THE TRANCHE B LENDER:

                  (a) The Tranche B Lender may initiate a Standstill Period by
written notice to the Administrative Agent at any time after the occurrence of
any Tranche B Loan Action Event and may so initiate a Standstill Period on
account of a separate Tranche B Loan Action Event during the pendency of another
Standstill Period which has been initiated by it.

                  (b) After the expiry of a Standstill Period initiated by a
Tranche B Loan Action Event, the Tranche B Lender may give the Administrative
Agent and the Collateral Agent an Acceleration Notice unless either 14.2(b)(i)
or 14.2(b)(ii) is applicable:

                           (i) Acceleration has been stayed by judicial or
                  statutory process.

                           (ii)     As applicable:

                                    (A) If the relevant Tranche B Loan Action
                  Event had been a Tranche B Availability Breach: On three (3)
                  consecutive days during the relevant Standstill Period, no
                  Tranche B Availability Breach exists or occurs.

                                    (B) If the relevant Tranche B Event is a
                  Minimum Excess Availability Breach: On any three (3) days
                  during the relevant Standstill Period, no Minimum Excess
                  Availability Breach exists or occurs.

                                    (C) If the relevant Tranche B Loan Action
                  Event is a Tranche B Payment Breach: All payments which are
                  due or overdue on account of the Tranche B Loan (other than
                  those which would be due only if the Tranche B Loan were
                  accelerated) are paid prior to the expiry of the relevant
                  Standstill Period.

                  (c) Notwithstanding the foregoing Section 14.2(b), after the
expiry of more than two Standstill Periods initiated by the same type of Tranche
B Loan Action Event within any 45 day period, the Tranche B Lender may give the
Administrative Agent and the Collateral Agent an Acceleration Notice.

         14.3. ACCELERATION Unless stayed by judicial or statutory process, the
Administrative Agent shall Accelerate the Revolving Credit Obligations and the
Tranche B Loan within a commercially reasonable time following:

                  (a) The Administrative Agent's giving of an Acceleration
Notice to the Collateral Agent and the Revolving Credit Lenders as provided in
Section 14.1(a).

                  (b) The Administrative Agent's receipt of an Acceleration
Notice from the SuperMajority Revolving Credit Lenders, in compliance with
Section14.1(b).

                  (c) The Administrative Agent's receipt of an Acceleration
Notice from the Tranche B Lender, in compliance with Section 14.2(c).

                                                                      Page 107

<Page>

         14.4. INITIATION OF LIQUIDATION Unless stayed by judicial or statutory
process, a Liquidation shall be initiated by the Collateral Agent within a
commercially reasonable time following Acceleration of the Revolving Credit
Obligations and the Tranche B Loan.

         14.5.    ACTIONS AT AND  FOLLOWING INITIATION OF LIQUIDATION

                 (a)      At the initiation of a Liquidation:

                           (i) The unpaid principal balance of the SwingLine
         Loan (if any) shall be converted, pursuant to Section 14.2(b)(ii), to a
         Revolving Credit Loan in which all Revolving Credit Lenders
         participate.
                           (ii) The Administrative Agent and the Revolving
         Credit Lenders shall "net out" each Revolving Credit Lender's
         respective contributions towards the Revolving Credit Loans, so that
         each Revolving Credit Lender holds that Revolving Credit Lender's
         Revolving Credit Percentage Commitment of the Revolving Credit Loans
         and advances.

                  (b) Following the initiation of a Liquidation, each Revolving
Credit Lender shall contribute, towards any L/C thereafter honored and not
immediately reimbursed by the Loan Parties, that Revolving Credit Lender's
Revolving Credit Percentage Commitment of such honoring.

                  (c) Following the initiation of a Liquidation, each Revolving
Credit Lender shall contribute, towards any L/C thereafter honored and not
immediately reimbursed by the Loan Parties, that Revolving Credit Lender's
Revolving Credit Percentage Commitment of such honoring.

         14.6.    COLLATERAL AGENT'S CONDUCT OF LIQUIDATION

                  (a) Any Liquidation shall be conducted by the Collateral Agent
in the manner determined by it to be commercially reasonable. Any Liquidation of
the Tranche B Senior Collateral shall be conducted by the Collateral Agent with
the advice and assistance of the Tranche B Lender.

                  (b) The Collateral Agent may establish one or more Nominees to
"bid in" or otherwise acquire ownership to any Post Foreclosure Asset.

                  (c) The Collateral Agent shall manage the Nominee and manage
and dispose of any Post Foreclosure Assets with a view towards the realization
of the economic benefits of the ownership of the Post Foreclosure Assets and in
such regard, the Collateral Agent and/or the Nominee may operate, repair,
manage, maintain, develop, and dispose of any Post Foreclosure Asset in such
manner as the Collateral Agent determines as appropriate under the
circumstances.
                  (d) Each Agent may decline to undertake or to continue taking
a course of action or to execute an action plan (whether proposed by an Agent or
a Lender) unless indemnified Pro-Rata to that Agent's satisfaction by the
Lenders against any and all liability and expense which may be incurred by that

                                                                      Page 108

Agent by reason of taking or continuing to take that course of action or action
plan.
                 (e) The Administrative Agent and each Lender shall execute all
such instruments and documents not inconsistent with the provisions of this
Agreement as the Administrative Agent and/or the Nominee reasonably may request
with respect to the creation and governance of any Nominee, the conduct of the
Liquidation, and the management and disposition of any Post Foreclosure Asset.

         14.7.    DISTRIBUTION OF LIQUIDATION PROCEEDS:

                  (a) The Collateral Agent may establish one or more reasonably
funded reserve accounts into which proceeds of the conduct of any Liquidation
may be deposited in anticipation of future expenses which may be incurred by any
Agent in the exercise of rights as a secured creditor of the Loan Parties and
prior claims which the Agents anticipate may need to be paid.

                  (b) The Collateral Agent shall distribute the proceeds of any
Liquidation to the Administrative Agent.

                  (c) The Administrative Agent shall distribute the net proceeds
of Liquidation, as distributed to the Administrative Agent by the Collateral
Agent pursuant to Section 14.7(b), in accordance with the relative priorities
set forth in Section 14.8.

                 (d) Each Revolving Credit Lender, on the written request of
the Administrative Agent and/or any Nominee, not more frequently than once each
month, shall reimburse the Agents and/or any Nominee, Pro-Rata, for any cost or
expense reasonably incurred by the Agents and/or the Nominee in the conduct of a
Liquidation, which amount is not covered out of current proceeds of the
Liquidation, which reimbursement shall be paid over to and distributed by the
Administrative Agent.

         14.8.    RELATIVE PRIORITIES TO PROCEEDS OF LIQUIDATION

                  (a) Proceeds of a Liquidation shall be distributed based on
levels of priority with respect to each classification of Collateral without
taking any Early Termination Assessments into account except as specified below.
(b) All distributions of proceeds of a Liquidation shall be net of payment over
to the Agents as reimbursement for all reasonable third party costs and expenses
incurred by the Agents and to Lenders' Special Counsel and to any funded reserve
established pursuant to Section 14.7(a). (c) The relative priorities to the
proceeds of a Liquidation shall be distributed based on the following relative
priorities:

                           (i)  Revolving Credit Senior Collateral:

                                (A)     First:, as provided in Section
                                        14.8(d); and then

                                (B)     Second,  to the Tranche B Lender;
                                        and then

                                                                 Page 109

<Page>

                                (C)     Third, in the same order as in First
                                        and Second above towards Early
                                        Termination Assessments; and then

                                (D)     Fourth, to all other Liabilities.

                           (ii)     Tranche B Senior Collateral:

                                    (A)     First, to the Tranche B Lender; and
                                            then

                                    (B)     Second, as provided in Section
                                            14.8(d); and then

                                    (C)     Third, in the same order as in First
                                            and Second above towards Early
                                            Termination Assessments; and

                                   then (D) Fourth, to all other Liabilities.

                  (d)      Distributions which are made pursuant to reference
to Section14.8(d) shall be in the following order:

                           (i)       To the SwingLine Lender, on account of any
                                     SwingLine loans not converted to Revolving
                                     Credit Loans pursuant to Section
                                     14.5(a)(i); and then

                           (ii)      To the Revolving Credit Lenders (other than
                                     any Delinquent Revolving Credit Lender) and
                                     to FRFI or any of its Affiliates providing
                                     cash management services or L/Cs to the
                                     extent of any credit exposure in connection
                                     therewith (but excluding any fees earned on
                                     account thereof), Pro-Rata, to the unpaid
                                     principal balance of Revolving Credit Debt
                                     and any amounts owed on account of such
                                     cash management services and any L/Cs
                                     (including as cash collateral for any
                                     undrawn L/Cs) and fees due to the Issuer on
                                     account thereof; and then

                           (iii)     To the Revolving Credit Lenders (other than
                                     any Delinquent Revolving Credit Lender),
                                     Pro-Rata, to accrued interest which
                                     constitutes Revolving Credit Debt; and then

                           (iv)      To the Revolving Credit Lenders (other than
                                     any Delinquent Revolving Credit Lender),
                                     Pro-Rata, to Revolving Credit Fees, other
                                     than the Revolving Credit Early Termination
                                     Fee; and then

                           (v)      To any Delinquent Revolving Credit Lenders,
                                    Pro-Rata to amounts to which such Revolving
                                    Credit Lenders otherwise would have been
                                    entitled pursuant to Sections 14.8(d)(ii),
                                    14.8(d)(iii), and 14.8(d)(iv).

                                                                    Page 111

<Page>

ARTICLE 15 - THE AGENTS:

         15.1.    APPOINTMENT OF THE AGENTS
                  (a)      Each  Lender appoints and designates Fleet Retail
Finance Inc. as the "Administrative Agent" hereunder and under the Loan
Documents.

                  (b)      Each Lender appoints and designates Fleet Retail
Finance Inc. as the "Collateral Agent" hereunder and under the Loan Documents.

                  (c)      Each Lender authorizes each Agent:

                           (i)      To execute those of the Loan Documents and
all other instruments relating thereto to which that Agent is a party.

                           (ii) To take such action on behalf of the Lenders and
to exercise all such powers as are expressly delegated to that Agent hereunder
and in the Loan Documents and all related documents, together with such other
powers as are reasonably incident thereto.

                           (d) Each Lender recognizes that Fleet Retail Finance
Inc. and Back Bay Capital Funding LLC are interrelated and waives any potential
claim which may be based on an Agent's acting in conflict of interest on account
thereof. Nothing contained herein shall be deemed to release the Agents from
liability under Section 16.2(f) hereof for conduct undertaken in a grossly
negligent manner, in actual bad faith, or in willful misconduct.

                           (e) Wells Fargo Retail Finance LLP has been granted
the title of "Syndication Agent", and National City Commercial Finance, Inc. and
Heller Financial Inc. have each been granted the title of "Co-Documentation
Agent" in which capacity none shall have any rights nor any responsibilities.
Any of the foregoing may resign such position at any time by written notice to
the Administrative Agent and, in any event, shall cease to be Syndication Agent
or Co-Documentation Agent, as the case may be, contemporaneously with its
ceasing to be a Revolving Credit Lender.

         15.2.    RESPONSIBILITIES OF AGENTS

                  (a) The Administrative Agent shall have principal
responsibilities for and primary authority for the administration of the credit
facilities contemplated by this Agreement and for all matters for which the
Collateral Agent is not responsible. In all instances where the allocation of
responsibility and authority, as between the Collateral Agent and the
Administrative Agent is in doubt, the Administrative Agent shall be vested with
such responsibility and authority.

                  (b) The Collateral Agent shall have principal responsibilities
for and primary authority for the conduct of the Liquidation and the
distribution of the proceeds of such Liquidation.

                  (c) Neither Agent shall have any duties or responsibilities
to, or any fiduciary

                                                                     Page 111

<Page>

relationship with, any Lender except for those expressly set forth in this
Agreement.

                  (d) Neither Agent nor any of its Affiliates shall be
responsible to any Lender for any of the following:

                           (i) Any recitals, statements, representations or
          warranties made by any Loan Party or any other Person.

                           (ii) Any appraisals or other assessments of the
          assets of any Loan Party or of any other Person responsible for or on
          account of the Liabilities.

                           (iii) The value, validity, effectiveness,
          genuineness, enforceability, or sufficiency of the Loan Agreement, the
          Loan Documents or any other document referred to or provided for
          therein.

                           (iv) Any failure by any Loan Party or any other
          Person (other than the subject Agent) to perform its obligations under
          the Loan Documents.

                  (e) Each Agent may employ attorneys, accountants, and other
professionals and agents and attorneys-in-fact and shall not be responsible for
the negligence or misconduct of any such attorneys, accountants, and other
professionals or agents or attorneys-in-fact selected by the subject Agent with
reasonable care. No such attorney, accountant, other professional, agent, or
attorney-in-fact shall be responsible for any action taken or omitted to be
taken by any other such Person.

                  (f) Neither Agent, nor any of its directors, officers, or
employees shall be responsible for any action taken or omitted to be taken or
omitted to be taken by any other of them in connection herewith in reliance upon
advice of their respective counsel nor, in any other event except for any action
taken or omitted to be taken as to which a final judicial determination has been
or is made (in a proceeding in which such Person has had an opportunity to be
heard) that such Person had acted in a grossly negligent manner, in actual bad
faith, or in willful misconduct.

                  (g) Neither Agent shall have any responsibility in any event
for more funds than that Agent actually receives and collects.

                  (h) The Agents, in their separate capacities as Lenders, shall
have the same rights and powers hereunder as any other Lender.

         15.3.    CONCERNING DISTRIBUTIONS BY THE AGENTS

                  (a) Each Agent, in that Agent's reasonable discretion based
upon that Agent's determination of the likelihood that additional payments will
be received, expenses incurred, and/or claims made by third parties to all or a
portion of such proceeds, may delay the distribution of any payment received on
account of the Liabilities.

                  (b) Each Agent may disburse funds prior to determining that
the sums which that Agent expects to receive have been finally and
unconditionally paid to that Agent. If and to the extent that

                                                                      Page 112

<Page>

Agent does disburse funds and it later becomes apparent that the Agent did not
then receive a payment in an amount equal to the sum paid out, then any Lender
to whom the Agent made the funds available, on demand from the Agent, shall
refund to the Administrative Agent the sum paid to that person.

                  (c) If, in the opinion of an Agent, the distribution of any
amount received by that Agent might involve that Agent in liability, or might be
prohibited hereby, or might be questioned by any Person, then that Agent may
refrain from making distribution until that Agent's right to make distribution
has been adjudicated by a court of competent jurisdiction.

                  (d) The proceeds of any Lender's exercise of any right of, or
in the nature of, set-off shall be deemed, FIRST, to the extent that a Lender is
entitled to any distribution hereunder, to constitute such distribution and
SECOND, shall be shared with the other Lenders as if distributed pursuant to
(and shall be deemed as distributions under) Section 14.8.

                  (e) Each Lender recognizes that the crediting of the Loan
Parties with the "proceeds" of any transaction in which a Post Foreclosure Asset
is acquired is a non-cash transaction and that, in consequence, no distribution
of such "proceeds" will be made by the Administrative Agent to any Lender.

                  (f) In the event that (x) a court of competent jurisdiction
shall adjudge that any amount received and distributed by the Administrative
Agent is to be repaid or disgorged or (y) the requisite Lenders (as provided in
Section 16.4(g)) determine to effect such repayment or disgorgement, then each
Lender to which any such distribution shall have been made shall repay, to the
Agent which had made such distribution, that Lender's Pro-Rata share of the
amount so adjudged or determined to be repaid or disgorged.

         15.4. DISPUTE RESOLUTION: Any dispute among the Lenders and/or any
Agent concerning the interpretation, administration, or enforcement of the
financing arrangements contemplated by this or any other Loan Document or the
interpretation or administration of this or any other Loan Document which cannot
be resolved amicably shall be resolved in the United States District Court for
the District of Massachusetts, sitting in Boston or in the Superior Court of
Suffolk County, Massachusetts, to the jurisdiction of which courts each Lender
hereby submits.

         15.5. DISTRIBUTIONS OF NOTICES AND OF DOCUMENTS The Administrative
Agent will forward to each Lender, promptly after the Administrative Agent's
receipt thereof, a copy of each notice or other document furnished to the
Administrative Agent pursuant to this Agreement, including monthly, quarterly,
and annual financial statements received from the Borrowers' Representative
pursuant to Article 6 of this Agreement, other than any of the following:
         (a)      Routine communications associated with requests for Revolving
Credit Loans and/or the

                                                                      Page 113
issuance of L/C's.

         (b)      Routine or nonmaterial communications.

         (c)      Any notice or document required by any of the Loan Documents
to be furnished to the Lenders by the Borrowers' Representative.

         (d) Any notice or document of which the Administrative Agent has
knowledge that such notice or document had been forwarded to the Lenders other
than by the Administrative Agent.

         15.6.    CONFIDENTIAL INFORMATION

                  (a) Each Lender will maintain, as confidential (other than to
their respective attorneys, agents, accountants, participants and prospective
participants) all of the following:

                           (i) Proprietary approaches, techniques, and methods
         of analysis which are applied by the Administrative Agent in the
         administration of the credit facility contemplated by this Agreement.

                           (ii) Proprietary forms and formats utilized by the
         Administrative Agent in providing reports to the Lenders pursuant
         hereto, which forms or formats are not of general currency.

                           (iii) Confidential information provided by any Loan
         Party pursuant to the Loan Documents, other than any information which
         becomes known to the general public through sources other than that
         Lender.
                  (c) Nothing included herein shall prohibit the disclosure of
any such information as may be required to be provided by judicial process or by
regulatory authorities having jurisdiction over any party to this Agreement.

         15.7. RELIANCE BY AGENTS Each Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, telex, or
facsimile) reasonably believed by that Agent to be genuine and correct and to
have been signed or sent by or on behalf of the proper person or persons, and
upon advice and statements of attorneys, accountants and other experts selected
by that Agent. As to any matters not expressly provided for in this Agreement,
any Loan Document, or in any other document referred to therein, that Agent
shall in all events be fully protected in acting, or in refraining from acting,
in accordance with the applicable Consent required by this Agreement.
Instructions given with the requisite Consent shall be binding on all Lenders.

         15.8.    NON-RELIANCE ON AGENTS AND OTHER LENDERS

                  (a)      Each Lender represents to all other Lenders and to
                           the Agents that such Lender:

                           (i)      Independently and without reliance on any

                                                                      Page 114
<Page>

         representation or act by any Agent or by any other Lender, and based on
         such documents and information as that Lender has deemed appropriate,
         has made such Lender's own appraisal of the financial condition and
         affairs of the Loan Parties and decision to enter into this Agreement.

                           (ii)     Has relied upon that Lender's review of the
         Loan Documents by that Lender and by counsel to that Lender as that
         Lender deemed appropriate under the circumstances.

                  (b) Each Lender agrees that such Lender, independently and
without reliance upon any Agent or any other Lender, and based upon such
documents and information as such Lender shall deem appropriate at the time,
will continue to make such Lender's own appraisals of the financial condition
and affairs of the Loan Parties when determining whether to take or not to take
any discretionary action under this Agreement.

                  (c) Neither Agent in the discharge of that Agent's duties
hereunder, shall be required to make inquiry of, or to inspect the properties or
books of, any Person.

                  (d) Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the
Administrative Agent hereunder (as to which, SEE Section 15.5), the Agents shall
not have any affirmative duty or responsibility to provide any Lender with any
credit or other information concerning any Person, which information may come
into the possession of Agents or any Affiliate of an Agent.

                  (e) Each Lender, at such Lender's request, shall have
reasonable access to all nonprivileged documents in the possession of the
Agents, which documents relate to the Agents' performance of their duties
hereunder.

         15.9. INDEMNIFICATION Without limiting the liabilities of the Loan
Parties under any this or any of the other Loan Documents, each Lender shall
indemnify each Agent, Pro-Rata, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including reasonable attorneys'
fees and expenses and other out-of-pocket expenditures) which may at any time be
imposed on, incurred by, or asserted against that Agent and in any way relating
to or arising out of this Agreement or any other Loan Document or any documents
contemplated by or referred to therein or the transactions contemplated thereby
or the enforcement of any of terms hereof or thereof or of any such other
documents, PROVIDED, HOWEVER, no Lender shall be liable for any of the foregoing
to the extent that any of the foregoing arises from any action taken or omitted
to be taken by the subject Agent as to which a final judicial determination has
been or is made (in a proceeding in which the subject Agent has had an
opportunity to be heard) that the subject Agent had acted in a grossly negligent
manner, in actual bad faith, or in willful misconduct.

                                                                     Page 115

<PAGE>

         15.10.   RESIGNATION OF AGENT

                  (a) An Agent may resign at any time by giving 60 days prior
written notice thereof to the Lenders and to the other Agent. Upon receipt of
any such notice of resignation, the SuperMajority Lenders and the Tranche B
Lender shall have the right to appoint a successor to such Agent (and if no
Event of Default has occurred, with the consent of the Borrowers'
Representative, not to be unreasonably withheld and, in any event, deemed given
by the Borrowers' Representative if no written objection is provided by the
Borrowers' Representative to the (resigning) Agent within seven (7) Business
Days notice of such proposed appointment). If a successor Agent shall not have
been so appointed and accepted such appointment within 30 days after the giving
of notice by the resigning Agent, then the resigning Agent may appoint a
successor Agent, which shall be a financial institution having a combined
capital and surplus in excess of $500,000,000.00 (unless, after a BuyOut such
Agent shall be the Tranche B Lender in which case the foregoing capital and
surplus requirement shall not apply). The consent of the Borrowers'
Representative otherwise required by this Section 15.10(a) shall not be required
if an Event of Default has occurred.

                  (b) Upon the acceptance of any appointment as an Agent
hereunder by a successor Agent, such successor shall thereupon succeed to, and
become vested with, all the rights, powers, privileges, and duties of the
(resigning) Agent so replaced, and the (resigning) Agent shall be discharged
from the (resigning) Agent's duties and obligations hereunder, other than on
account of any responsibility for any action taken or omitted to be taken by the
(resigning) Agent as to which a final judicial determination has been or is made
(in a proceeding in which the (resigning) Person has had an opportunity to be
heard) that such Person had acted in a grossly negligent manner or in bad faith.

                  (c) After any retiring Agent's resignation, the provisions of
this Agreement and of all other Loan Documents shall continue in effect for the
retiring Person's benefit in respect of any actions taken or omitted to be taken
by it while it was acting as an Agent.

ARTICLE 16 - ACTION BY AGENTS - CONSENTS - AMENDMENTS - WAIVERS:

         16.1.    ADMINISTRATION OF CREDIT FACILITIES

                  (a) Except as otherwise specifically provided in this
Agreement, each Agent may take any action with respect to the credit facility
contemplated by the Loan Documents as that Agent determines to be appropriate
within their respective areas of responsibility and authority, as set forth in
Sections 15.2(b) and 15.2(a), PROVIDED, HOWEVER, neither Agent is under any
affirmative obligation to take any action which it is not required by this
Agreement or the Loan Documents specifically to so take.

                  (b) Except as specifically provided in the following Sections
of this Agreement, whenever a Loan Document or this Agreement provides that
action may be taken or omitted to be taken in

                                                                      Page 116

<PAGE>

an Agents' discretion, that Agent shall have the sole right to take, or refrain
from taking, such action without, and notwithstanding, any vote of the Lender:

                  ACTIONS DESCRIBED IN SECTION     TYPE OF CONSENT REQUIRED
                  -----------------------------------------------------------
                           16.2           Majority Lenders
                           16.3           SuperMajority Revolving Credit Lenders
                           16.4           Certain Consent
                           16.5           Unanimous Consent
                           17.4           Consent of SwingLine Lender
                           16.7           Consent of Tranche B  Lender
                           16.8           Consent of the Agents

                  (c) The rights granted to the Lenders in those sections
referenced in Section 16.1(b) shall not otherwise limit or impair any Agent's
exercise of its discretion under the Loan Documents.

         16.2. ACTIONS REQUIRING OR ON DIRECTION OF MAJORITY LENDERS Except as
otherwise provided in this Agreement, the Consent or direction of the Majority
Lenders is required for any amendment, waiver, or modification of any Loan
Document.

         16.3. ACTIONS REQUIRING OR ON DIRECTION OF SUPERMAJORITY REVOLVING
         CREDIT LENDERS

         The Consent or direction of the SuperMajority Revolving Credit Lenders
 is required as follows:

                  (a) The Lenders agree that any loan or advance under the
Revolving Credit which results in a Protective OverAdvance may be made by the
Administrative Agent in its discretion without the Consent of the Lenders and
that each Lender shall be bound thereby, PROVIDED, HOWEVER, the Consent or
direction of the SuperMajority Revolving Credit Lenders is required to permit a
Protective OverAdvance to be outstanding for more than 45 consecutive Business
Days or more than twice in any twelve month period. (Any Protective OverAdvance
which is permitted by this Section 16.3(a) is referred to as a "PERMITTED
PROTECTIVE OVERADVANCE").

                  (b) If any Default has occurred and is continuing, the
SuperMajority Revolving Credit Lenders may direct the Administrative Agent to
suspend the Revolving Credit, whereupon, as long as a Default shall have
occurred and be continuing, the only Revolving Credit Loans which may be made
are the following:

                           (i)      Revolving Credit Loans made to "cover" the
                                    honoring of L/C's.

                           (ii)     Permitted Protective OverAdvances.

                           (iii)    Revolving Credit Loans made with Consent of
                                    the SuperMajority Lenders.

                                                                      Page 117

<PAGE>

                  (c) If an Event of Default has occurred and not been duly
waived, the SuperMajority Revolving Credit Lenders may:

                           (i) Give the Administrative Agent an Acceleration
         Notice in accordance with Section 15:15-1(b).

                           (ii) Direct the Administrative Agent to increase the
         rate of interest to the default rate of interest as provided in, and to
         the extent permitted by, this Agreement.

         16.4.    ACTION REQUIRING CERTAIN CONSENT  The following Consent shall
be required for the following actions:

-------------------------------------------------------------------------------
ACTION                                      REQUIRED CONSENT
-------------------------------------------------------------------------------
    (a) Any change to the dates on which    SuperMajority Revolving Credit
any payment of principal of the Tranche     Lenders and the Tranche B Lender
B Loan  shall be due and payable or the
amount of any such payment.
-------------------------------------------------------------------------------
    (b) Waiver or amendment of              SuperMajority Revolving Credit
financial performance covenants in          Lenders and the Tranche B Lender.
Section 6.11
-------------------------------------------------------------------------------
    (c) Increase in the SwingLine Ceiling:  SwingLine Lender and the Majority
                                            Lenders.
-------------------------------------------------------------------------------
    (d) Any increase in any Revolving       All Revolving Credit Lenders
Credit Lender's Revolving Credit Dollar     affected thereby other than any
Commitment or Revolving Credit Percentage   Delinquent Revolving Credit Lender.
Commitment (other than by reason of the
application of Section 16.11 (which deals
with NonConsenting Revolving Credit
Lenders) or Section 17.1 (which deals
with assignments and participations)),
it being understood that this
Section 16.4(d) addresses changes to
commitments inter se and not any increase
in the overall size of the Revolving
Credit.
-------------------------------------------------------------------------------
   (e) Any forgiveness of all or any        All Lenders whose payment Liability
portion of any payment Liability.           is being so forgiven (other than any
                                            Delinquent Revolving Credit Lender,
                                            if otherwise applicable).
-------------------------------------------------------------------------------

                                                                      Page 118

<PAGE>

-------------------------------------------------------------------------------
ACTION                                      REQUIRED CONSENT
-------------------------------------------------------------------------------
   (f) Any decrease in any interest rate,   All Lenders adversely affected
fee or assessment payable under any of      thereby (other than any Delinquent
the Loan Documents (other than any          Revolving Credit Lender, if
Administrative Agent's Monitoring Fee       otherwise applicable).
(for which the consent of the
Administrative Agent shall also be
required)) and of any fee provided for
by any Fee Letter (which may be amended
by written agreement between the
Borrowers' Representative on the one hand,
and the Administrative Agent on the other).
-------------------------------------------------------------------------------
  (g) Disgorgement as described in          If disgorgement is
Section 15.3(f).                                By the Revolving Credit Lenders-
                                            The SuperMajority Revolving Credit
                                            Lenders.

                                            By the Tranche B Lender - The
                                            Tranche B Lender.
-------------------------------------------------------------------------------
         16.5.    ACTIONS REQUIRING OR DIRECTED BY UNANIMOUS CONSENT  None of
the following may take place except with Unanimous Consent:

                  (a)      Any extension of the Maturity Date.

                  (b) Any release of all or substantially all of the Collateral
not otherwise required or provided for in the Loan Documents or to facilitate a
Liquidation.

                  (c) Any amendment of the definition of the terms "Borrowing
Base", "Tranche B Borrowing Base", or "Availability" or of any definition of any
component thereof, such that more credit would be available to the Loan Parties,
based on the same assets, as would have been available to the Loan Parties
immediately prior to such amendment , IT BEING UNDERSTOOD, HOWEVER, that:

                     (i) The foregoing shall not limit the adjustment by
         the Administrative Agent of any Reserve in the Administrative Agent's
         administration of the Revolving Credit as otherwise permitted by this
         Agreement.

                           (ii) The foregoing shall not prevent the
         Administrative Agent, in its administration of the Revolving Credit,
         from restoring any component of Borrowing Base which had been lowered
         by the Administrative Agent back to the value of such component, as
         stated in this Agreement or to an intermediate value.

                  (d) Any release of any Person obligated on account of the
Liabilities (except in

                                                                     Page 119

<PAGE>

connection with a sale of such Person approved by the SuperMajority Lenders in
accordance with the terms of this Agreement).

                  (e) The making of any Revolving Credit Loan which, when made,
exceeds Availability and is not a Permitted Protective OverAdvance, PROVIDED,
HOWEVER, (i) no Consent shall be required in connection with the making of any
Revolving Credit Loan to "cover" any honoring of a drawing under any L/C; and

                           (ii) each Lender recognizes that subsequent to the
         making of a Revolving Credit Loan which does not constitute a Permitted
         Protective OverAdvance, the unpaid principal balance of the Loan
         Account may exceed the Borrowing Base on account of changed
         circumstances beyond the control of the Administrative Agent (such as a
         drop in collateral value).

                  (f) The waiver of the obligation of the Loan Parties to reduce
the unpaid principal balance of loans under the Revolving Credit to an amount
which does not exceed a Permitted Protective OverAdvance or, subject to the time
limits included in Section 16.3(a) (which places time and frequency limits on
Permitted Protective OverAdvances).

                  (g)      Any amendment of this Article 16.

                  (h) Amendment of any of the following Sections of this
Agreement:

                           (i)      13.4
                           (ii)     13.5
                           (iii)    14.7
                           (iv)     14.8

            (i)      Amendment of any of the following Definitions:

                                    "Appraised Inventory Liquidation Value"

                                    "Majority Lenders"

                                    "Majority Revolving Credit Lenders"

                                    "Minimum Excess Availability Breach"

                                    "Tranche B Availability Breach"

                                    "Tranche B Payment Breach"

                                    "Permitted Protective OverAdvance"

                                    "Standstill Period"

                                    "SuperMajority Lenders"

                                    "SuperMajority Revolving Credit Lenders"

                                    "Tranche B Loan Action Events"

                                    "Unanimous Consent"

                                                                    Page 120

<PAGE>

         16.6. ACTIONS REQUIRING SWINGLINE LENDER CONSENT No action, amendment,
or waiver of compliance with, any provision of the Loan Documents or of this
Agreement which affects the SwingLine Lender may be undertaken without the
Consent of the SwingLine Lender.

         16.7. ACTIONS REQUIRING TRANCHE B LENDER CONSENT None of the following
may be made without the Consent of the Tranche B Lender:

                  (a) Any increase in any interest rate or fee payable to the
Revolving Credit Lenders on account of the Revolving Credit Loans in excess of
150 basis points per annum in the aggregate.

                  (b) Any increase in any interest rate or fee payable to the
Revolving Credit Lenders on account of the Revolving Credit Loans not requiring
the Consent of the Tranche B Lender pursuant to Section 16.7(a), unless the Loan
Parties agree to increase the interest rate and fees payable to the Tranche B
Lender contemporaneously therewith by a like amount.

                  (c) Any amendment, modification, or waiver of any provision of
Article 3 (entitled "The Tranche B Loan"). (d) Any amendment of Sections 2.2,
11.6, 14.1(c), 14.2, 14.3(c) or 14.4. (e) Amendment of any of the following
Definitions: "Change in Control" "Equipment" "Overloan" "Protective OverAdvances
"Revolving Credit Ceiling" "Standstill Period." (f) Any release of Collateral
comprised of Equipment except as otherwise required or provided for in the Loan
Documents (including, without limitation, under Section 5.14) and except to
facilitate a Liquidation.

         16.8.    ACTIONS REQUIRING AGENTS' CONSENT

                  (a) No action, amendment, or waiver of compliance with, any
provision of the Loan Documents or of this Agreement which affects an Agent in
its capacity as an Agent may be undertaken without the written consent of the
Agents.
                  (b) No action referenced herein which affects the rights,
duties, obligations, or liabilities of an Agent shall be effective without the
written consent of the Agents.

         16.9.    MISCELLANEOUS ACTIONS

                  (a) Notwithstanding any other provision of this Agreement, no
single Lender

                                                                     Page 121
<PAGE>

independently may exercise any right of action or enforcement against or with
respect to any Loan Party.

                  (b) Each Agent shall be fully justified in failing or refusing
to take action under this Agreement or any Loan Document on behalf of any Lender
unless that Agent shall first

                            (i) receive such clear, unambiguous, written
         instructions as that Agent deems appropriate; and

                           (ii) be indemnified to that Agent's satisfaction by
         the Lenders against any and all liability and expense which may be
         incurred by that Agent by reason of taking or continuing to take any
         such action, unless such action had been grossly negligent, in willful
         misconduct, or in bad faith.

                  (c) Each Agent may establish reasonable procedures for the
providing of direction and instructions from the Lenders to that Agent,
including its reliance on multiple counterparts, facsimile transmissions, and
time limits within which such direction and instructions must be received in
order to be included in a determination of whether the requisite Loan
Commitments has provided its direction, Consent, or instructions.

         16.10.   ACTIONS REQUIRING BORROWERS' REPRESENTATIVE'S CONSENT

                  (a) The Borrowers' Representative's consent is required for
any amendment of this Agreement, except that each of the following Articles of
this Agreement may be amended without the consent of the Borrowers'
Representative:

         ARTICLE          TITLE OF ARTICLE
         ---------------------------------
         13                Revolving Credit Fundings and Distributions

         15                The Agents

                  (b) The Borrowers' Representative's consent to the amendment
of those provisions referenced in Section 16.10(a)

                           (i)   Shall be deemed given unless written objection
          is made, within seven (7) Business Days following the Administrative
          Agent's giving notice to the Borrowers' Representative of the proposed
          amendment; and

                           (ii)  shall not be required following the occurrence
          of any Event of Default.

         16.11.   NONCONSENTING REVOLVING CREDIT LENDER

                  (a) In the event that a Revolving Credit Lender (in this
Section 16.11, a "NONCONSENTING LENDER") does not provide its Consent to a
proposal by the Administrative Agent to take action which requires consent under
this Article 16, then one or more Revolving Credit Lenders who

                                                                      Page 122
<PAGE>

provided Consent to such action may require the assignment, without recourse and
in accordance with the procedures outlined in Section 17.1, below, of the
NonConsenting Lender's commitment hereunder on five (5) days written notice to
the Administrative Agent and to the NonConsenting Lender.

                  (b) At the end of such five (5) days, AND PROVIDED THAT the
NonConsenting Lender delivers the Note held by the NonConsenting Lender to the
Administrative Agent, the Revolving Credit Lenders who have given such written
notice shall Transfer the following to the NonConsenting Lender:

                           (i) Such NonConsenting Lender's Pro-Rata share of the
          principal and interest of the Loans to the date of such assignment.

                           (ii) All fees distributable hereunder to the
          NonConsenting Lender to the date of such assignment.

                           (iii) Any out-of-pocket costs and expenses for which
          the NonConsenting Lender is entitled to reimbursement from the Loan
          Parties.

                  (c) In the event that the NonConsenting Lender fails to
deliver to the Administrative Agent the Note held by the NonConsenting Lender as
provided in Section 16.11(b), then:

                           (i) The amount otherwise to be Transferred to the
         NonConsenting Lender shall be Transferred to the Administrative Agent
         and held by the Administrative Agent, without interest, to be turned
         over to the NonConsenting Lender upon delivery of the Note held by that
         NonConsenting Lender.

                           (ii) The Note held by the NonConsenting Lender shall
          have no force or effect whatsoever.

                           (iii) The NonConsenting Lender shall cease to be a
          "Lender".

                           (iv) The Revolving Credit Lender(s) which have
          Transferred the amount to the Administrative Agent as described above
          shall have succeeded to all rights and become subject to all of the
          obligations of the NonConsenting Lender as a "Revolving Credit
          Lender".

                  (d) In the event that more than One (1)Revolving Credit Lender
wishes to require such assignment, the NonConsenting Lender's commitment
hereunder shall be divided among such Revolving Credit Lenders, pro-rata based
upon their respective Loan Commitments, with the Administrative Agent
coordinating such transaction.

                  (e) The Administrative Agent shall coordinate the retirement
of the Note held by the NonConsenting Lender and the issuance of Notes to those
Lenders which "take-out" such NonConsenting Lender, PROVIDED, HOWEVER, no
processing fee otherwise to be paid as provided in Section 17.2(b) shall be due
under such circumstances.

         16.12.   THE BUYOUT:
                                                                     Page 123
<PAGE>

                  (a) The Tranche B Lender may (but shall not be obligated to)
cause the assignment to the Tranche B Lender, or its designee, by the Revolving
Credit Lenders, of all right, title and interest in, to, arising under, or in
respect of the Revolving Credit Obligations upon five (5) Business Days prior
written notice given at any time that the Tranche B Lender has the right, under
Section 14.1, to give an Acceleration Notice.

                  (b) Such assignments shall be effected on the Business Day
next following the expiry of such five (5) Business Days by the execution, by
the Revolving Credit Lenders, of an Assignment and Assumption (in the form of
EXHIBIT 17.1, annexed hereto) in exchange for the payment, in immediately
available funds, of the amount of Revolving Credit Obligations (including the
Revolving Credit Early Termination Fee as if the same were then due and
payable), providing that if the Revolving Credit Early Termination Fee is not
collected on such date by the Tranche B Lender, then the Tranche B Lender shall
use its best efforts to collect such Revolving Credit Early Termination Fee and
upon collection thereof shall cause it to be paid in the order of priority set
forth in Section 14.8(c).

The Tranche B Lender's buy out right under this Section 16.12 may only be
exercised completely with respect to the entire Revolving Credit.

ARTICLE 17 -  ASSIGNMENTS BY LENDERS:

         17.1.    ASSIGNMENTS AND ASSUMPTIONS:

                  (a) Except as provided herein, each Revolving Credit Lender
(in this Section 17.1(a), an "ASSIGNING REVOLVING CREDIT LENDER") may assign to
one or more Eligible Assignees (in this Section 17.1(a), each an "ASSIGNEE
REVOLVING CREDIT LENDER") all or a portion of that Lender's interests, rights
and obligations under this Agreement and the Loan Documents (including all or a
portion of its Commitment) and the same portion of the Loans at the time owing
to it, and of the Note held by the Assigning Revolving Credit Lender, PROVIDED
THAT:
                           (i) The Administrative Agent shall have given its
         prior written consent to such assignment, which consent shall not be
         unreasonably withheld, but need not be given if the proposed assignment
         would result in any Assigning Revolving Credit Lender's having a Dollar
         Commitment of less than the "minimum hold" amount specified in Section
         17.1(a)(iii).
                           (ii) Each such assignment shall be of a constant, and
         not a varying, percentage of all the Assigning Revolving Credit
         Lender's rights and obligations under this Agreement.

                           (iii) Following the effectiveness of such assignment,
         the Assigning Revolving Credit Lender's Dollar Commitment (if not an
         assignment of all of the Assigning Revolving Credit

                                                                     Page 124
<PAGE>

         Lender's Commitment) shall not be less than $10,000,000.00.

                        (iv) If no Event of Default has occurred, such
         assignment shall be subject to the consent of the Borrowers'
         Representative, not to be unreasonably withheld or delayed and which
         consent shall be deemed given if no written objection is received
         within seven (7) days of the Borrowers' Representative's receipt of
         notice of such proposed assignment.

                  (b) The Tranche B Lender, with prior written notice to the
Administrative Agent, may assign all or a portion of that Lender's interests,
rights and obligations under this Agreement and the Loan Documents freely to any
Person.

         17.2.    ASSIGNMENT PROCEDURES. (THIS SECTION 17.2 DESCRIBES THE
PROCEDURES TO BE FOLLOWED IN CONNECTION WITH AN ASSIGNMENT EFFECTED PURSUANT
TO THIS ARTICLE 17 AND PERMITTED BY SECTION 17.1).

                  (a) The parties to such an assignment shall execute and
deliver to the Administrative Agent, for recording in the Register, an
Assignment and Acceptance substantially in the form of EXHIBIT 17.1, annexed
hereto (an "ASSIGNMENT AND ACCEPTANCE").

                  (b) The Assigning Revolving Credit Lender shall deliver to the
Administrative Agent, with such Assignment and Acceptance, the Note held by the
subject Assigning Revolving Credit Lender and the Administrative Agent's
processing fee of $3,000.00, PROVIDED, HOWEVER, no such processing fee shall be
due where the Assigning Revolving Credit Lender is one of the Lenders at the
initial execution of this Agreement.

                  (c) The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
"REGISTER") for the recordation of the names and addresses of the Lenders and of
the Loan Commitments, the Revolving Credit Percentage Commitment and Revolving
Credit Percentage Commitment of each Lender. The Register shall be available for
inspection by the Lenders at any reasonable time and from time to time upon
reasonable prior notice. In the absence of manifest error, the entries in the
Register shall be conclusive and binding on all Lenders. The Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as a "Lender" hereunder for all purposes of this Agreement.

                  (d) The Assigning Revolving Credit Lender and Assignee
Revolving Credit Lender, directly between themselves, shall make all appropriate
adjustments in payments for periods prior to the effective date of an Assignment
and Assumption.

         17.3.    EFFECT OF ASSIGNMENT.

                           (a) From and after the effective date

                                                                     Page 125

<PAGE>

specified in an Assignment and Acceptance which has been executed, delivered,
and recorded (which effective date the Administrative Agent may delay by up to
five (5) Business Days after the delivery of such Assignment and Acceptance):

                           (i)      The Assignee Revolving Credit Lender:

                                    (A) Shall be a party to this Agreement and
                  the other Loan Documents (and to any amendments thereof) as
                  fully as if the Assignee Revolving Credit Lender had executed
                  each.

                                    (B) Shall have the rights of a Lender
                  hereunder to the extent of the Loan Commitment, the Revolving
                  Credit Percentage Commitment and Revolving Credit Percentage
                  Commitment assigned by such Assignment and Acceptance.

                           (ii) The Assigning Revolving Credit Lender shall be
         released from the Assigning Revolving Credit Lender's obligations under
         this Agreement and the Loan Documents to the extent of the Commitment
         assigned by such Assignment and Acceptance.

                           (iii) The Administrative Agent shall undertake to
         obtain and distribute replacement Notes to the subject Assigning
         Revolving Credit Lender and Assignee Revolving Credit Lender.

                  (b) By executing and delivering an Assignment and Acceptance,
the parties thereto confirm to and agree with each other and with all parties to
this Agreement as to those matters which are set forth in the subject Assignment
and Acceptance.

ARTICLE 18 - NOTICES:

         18.1. NOTICE ADDRESSES. All notices, demands, and other communications
made in respect of any Loan Document (other than a request for a loan or advance
or other financial accommodation under the Revolving Credit) shall be made to
the following addresses, each of which may be changed upon seven (7) days
written notice to all others given by certified mail, return receipt requested:

If to either Agent:
                                    Fleet Retail Finance Inc.
                                    40 Broad Street
                                    Boston, Massachusetts 02109
                                    Attention : James Dore
                                                Director
                                    Fax       : 617 434 4339

         WITH A COPY TO:
                                    Riemer & Braunstein LLP
                                    Three Center Plaza
                                    Boston, Massachusetts 02108
                                    Attention : Robert E. Paul Esquire
                                    Fax       : 617 880 3456

                                                                    Page 126
<PAGE>

If to the Tranche B Lender

                                    Back Bay Capital Funding LLC
                                    40 Broad Street
                                    Boston, Massachusetts 02109
                                    Attention  :
                                    Fax:       :  617 434 4312

WITH A COPY TO:
                                    Brown Rudnick Berlack Israels LLP
                                    One Financial Center
                                    Boston, Massachusetts 02111
                                    Attention  :   Andrew Strehle Esquire
                                    Fax        :   617-856-8201

If to the Borrowers' Representative
And All Loan Parties:

                                    Designs, Inc.
                                    66 B Street,
                                    Needham, Massachusetts 02194
                                    Attention : Dennis Hernreich
                                    Fax       : 781-444-8999

         WITH A COPY TO:

                                    Kramer Levin Naftalis & Frankel LLP
                                    919 Third Avenue
                                    New York, New York 10022
                                    Attention : Peter Smith Esquire
                                    Fax       :   212-715-8278

         18.2.    NOTICE GIVEN.

                  (a) Except as otherwise specifically provided herein, notices
shall be deemed made and correspondence received, as follows (all times being
local to the place of delivery or receipt):

                           (i) By mail: the sooner of when actually received or
          three (3) days following deposit in the United States mail, postage
          prepaid.

                           (ii) By recognized overnight express delivery: the
          Business Day following the day when sent.

                           (iii) By Hand: If delivered on a Business Day after
          9:00 AM and no later than three (3) hours prior to the close of
          customary business hours of the recipient, when delivered. Otherwise,
          at the opening of the then next Business Day.

                           (iv) By Facsimile transmission (which must include a
          header on which the party sending such transmission is indicated): If
          sent on a Business Day after 9:00 AM and no later than three (3) hours
          prior to the close of customary business hours of the recipient, one
          (1) hour after being sent. Otherwise, at the opening of the then next
          Business Day.

                                                                     Page 127

<PAGE>

                  (b) Rejection or refusal to accept delivery and inability to
deliver because of a changed address or Facsimile Number for which no due notice
was given shall each be deemed receipt of the notice sent.

         18.3. WIRE INSTRUCTIONS. Subject to change in the same manner that a
notice address may be changed (as to which, SEE Section 18.1), wire transfers to
the Administrative Agent shall be made in accordance with the following wire
instructions:

                                    Fleet National Bank
                                    ABA No.            011000390
                                    Acct Name:        Fleet Retail Finance Inc.
                                    Acct No. :        530-39952
                                    Reference:        Designs, Inc.

ARTICLE 19 - TERM:

         19.1.    TERMINATION OF REVOLVING CREDIT.  The Revolving Credit shall
remain in effect (subject to suspension as provided in Section 2.6(g) hereof)
until the Termination Date.

         19.2.    ACTIONS ON TERMINATION.

                  (a) On the Termination Date, the Loan Parties shall pay the
Administrative Agent (whether or not then due), in immediately available funds,
all then Liabilities including, without limitation: the following:

                           (i) The entire balance of the Loan Account (including
         the unpaid principal balance of the Revolving Credit Loans, SwingLine
         Loan and the Tranche B Loan).

                           (ii) Any then remaining unpaid installments of the
          Revolving Credit Commitment Fee.

                           (iii) Any then remaining unpaid installments of the
          Administrative Agent's Monitoring Fee.

                           (iv) Any payments due on account of the
          indemnification obligations included in Section 2.11(e).

                           (v) Any accrued and unpaid Unused Line Fee.

                           (vi) Any applicable Revolving Credit Early
          Termination Fee.

                           (vii) All accrued and unpaid interest (including all
          accrued and unpaid Tranche B Current Pay Interest and all accrued and
          unpaid Tranche B PIK Interest) on the Tranche B Loan.

                           (viii) Any then remaining unpaid installments of the
          Tranche B Commitment

                                                                     Page 128
<PAGE>

          Fee and Tranche B Monitoring Fee.

                           (ix) Any accrued and unpaid Tranche B Early
          Termination Fee.

                           (x) All unreimbursed costs and expenses of each Agent
          and of Lenders' Special Counsel for which each Loan Party is
          responsible.

                  (b) On the Termination Date, the Loan Parties shall also shall
make such arrangements concerning any L/C's then outstanding as are reasonably
satisfactory to the Administrative Agent (such as their being cash
collateralized at 103 % of their then Stated Amount).

                  (c) Until such payment (Section 19.2(a)) and arrangements
concerning L/C's (Section 19.2(b)), all provisions of this Agreement, other than
those included in Article 2 which place any obligation on the Administrative
Agent or any Revolving Credit Lender to make any loans or advances or to provide
any financial accommodations to any Borrower and those included in Article 3
which place any obligation on the Tranche B Lender to make any loan or advance
or to provide any financial accommodation to any Borrower, shall remain in full
force and effect until all Liabilities shall have been paid in full.

                  (d) The release by the Collateral Agent of the Collateral
Interests granted the Collateral Agent by the Loan Parties hereunder may be upon
such conditions and indemnifications as the Administrative Agent reasonably may
require.

ARTICLE 20 - GENERAL:

         20.1. PROTECTION OF COLLATERAL. No Agent has any duty as to the
collection or protection of the Collateral beyond the safe custody of such of
the Collateral as may come into the possession of that Agent.

         20.2. PUBLICITY. The Agents (or either of them) and the Tranche B
Lender respectively may issue a "tombstone" notice of the establishment of the
credit facility contemplated by this Agreement and may make reference to each
Loan Party (and may utilize any logo or other distinctive symbol associated with
each Loan Party) in connection with any advertising, promotion, or marketing
undertaken by the Agents (or either of them) and/or by the Tranche B Lender.

         20.3. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Borrowers' Representative, each Loan Party, and their respective
representatives, successors, and assigns and shall enure to the benefit of each
Agent and each Lender and their respective successors and assigns, PROVIDED,
HOWEVER, no trustee or other fiduciary appointed with respect to any Loan Party
shall have any rights hereunder. In the event that any Agent or any Lender
assigns or transfers its rights under this Agreement, the assignee shall
thereupon succeed to and become vested with all rights, powers, privileges,

                                                                     Page 129

<PAGE>

and duties of such assignor hereunder and such assignor shall thereupon be
discharged and relieved from its duties and obligations hereunder.

         20.4. SEVERABILITY. Any determination that any provision of this
Agreement or any application thereof is invalid, illegal, or unenforceable in
any respect in any instance shall not affect the validity, legality, or
enforceability of such provision in any other instance, or the validity,
legality, or enforceability of any other provision of this Agreement.

         20.5.    AMENDMENTS.  COURSE OF DEALING.

                  (a) This Agreement and the other Loan Documents incorporate
all discussions and negotiations between each Loan Party and each Agent and each
Lender, either express or implied, concerning the matters included herein and in
such other instruments, any custom, usage, or course of dealings to the contrary
notwithstanding. No such discussions, negotiations, custom, usage, or course
of dealings shall limit, modify, or otherwise affect the provisions thereof. No
failure by any Agent or any Lender to give notice to the Borrowers'
Representative of any Loan Party's having failed to observe and comply with any
warranty or covenant included in any Loan Document shall constitute a waiver of
such warranty or covenant or the amendment of the subject Loan Document.

                  (b) Each Loan Party may undertake any action otherwise
prohibited hereby, and may omit to take any action otherwise required hereby,
upon and with the express prior written consent of the Administrative Agent.
Subject to Article 16, no consent, modification, amendment, or waiver of any
provision of any Loan Document shall be effective unless executed in writing by
or on behalf of the party to be charged with such modification, amendment, or
waiver (and if such party is the Administrative Agent then by a duly authorized
officer thereof). Any modification, amendment, or waiver provided by the
Administrative Agent shall be in reliance upon all representations and
warranties theretofore made to the Administrative Agent by or on behalf of the
Loan Parties (and any other guarantor, endorser, or surety of the Liabilities)
and consequently may be rescinded in the event that any of such representations
or warranties was not true and complete in all material respects when given.

         20.6. POWER OF ATTORNEY. In connection with all powers of attorney
included in this Agreement, each Loan Party hereby grants unto the
Administrative Agent (acting through any of its officers) full power to do any
and all things necessary or appropriate in connection with the exercise of such
powers as fully and effectually as that Loan Party might or could do, hereby
ratifying all that said attorney shall do or cause to be done by virtue of this
Agreement. No power of attorney set forth in this Agreement shall be affected by
any disability or incapacity suffered by any Loan Party and each shall survive
the same. All powers conferred upon the Administrative Agent or the Collateral
Agent by this

                                                                     Page 130
<PAGE>

Agreement, being coupled with an interest, shall be irrevocable until this
Agreement is terminated by a written instrument executed by a duly authorized
officer of the Administrative Agent.

         20.7. APPLICATION OF PROCEEDS. The proceeds of any collection, sale, or
disposition of the Collateral, or of any other payments received hereunder,
shall be applied towards the Liabilities in such order and manner as the
Administrative Agent determines in its sole discretion, consistent, HOWEVER,
with Sections 14.7 and 14.8 and any other applicable provisions of this
Agreement. The Loan Parties shall remain liable for any deficiency remaining
following such application.

         20.8. INCREASED COSTS. If, as a result of any Requirement of Law, or of
the interpretation or application thereof by any court or by any governmental or
other authority or entity charged with the administration thereof, whether or
not having the force of law, which on and after the Closing Date:

                  (a) subjects any Lender to any taxes or changes the basis of
          taxation, or increases any existing taxes, on payments of principal,
          interest or other amounts payable by any Loan Party to the
          Administrative Agent or any Lender under this Agreement (except for
          taxes on the Administrative Agent or any Lender based on net income or
          capital imposed by the jurisdiction in which the principal or lending
          offices of the Administrative Agent or that Lender are located);

                  (b) imposes, modifies or deems applicable any reserve, cash
          margin, special deposit or similar requirements against assets held
          by, or deposits in or for the account of or loans by or any other
          acquisition of funds by the relevant funding office of any Lender;

                  (c). imposes on any Lender any other condition with respect to
          any Loan Document; or

                  (d) imposes on any Lender a requirement to maintain or
          allocate capital in relation to the Liabilities;

and the result of any of the foregoing, in such Lender's reasonable opinion, is
to increase the cost to that Lender of making or maintaining any loan, advance
or financial accommodation or to reduce the income receivable by that Lender in
respect of any loan, advance or financial accommodation by an amount which that
Lender deems to be material, then upon written notice from the Administrative
Agent, from time to time, to the Borrowers' Representative (such notice to set
out in reasonable detail the facts giving rise to and a summary calculation of
such increased cost or reduced income), the Loan Parties shall forthwith pay to
the Administrative Agent, for the benefit of the subject Revolving Credit
Lender, upon receipt of such notice, that amount which shall compensate the
subject Lender for such additional cost or reduction in income.

         20.9.    COSTS AND EXPENSES OF AGENTS AND LENDERS .

                                                                      Page 131
<PAGE>

                  (a) The Loan Parties shall pay from time to time on demand all
Costs of Collection and all reasonable costs, expenses, and disbursements
(including reasonable attorneys' fees and expenses) which are incurred by each
Agent and by the Tranche B Lender (and the respective Participants with the
Tranche B Lender) in connection with the preparation, negotiation, execution,
and delivery of this Agreement and of any other Loan Documents, and all other
reasonable costs, expenses, and disbursements which may be incurred in
connection with or in respect to the credit facility contemplated hereby or
which otherwise are incurred with respect to the Liabilities.

                  (b) The Loan Parties shall pay from time to time on demand all
reasonable costs and expenses (including reasonable attorneys' fees and
expenses) incurred by the Lenders to Lenders' Special Counsel.

                  (c) Each Loan Party authorizes the Administrative Agent to pay
all such fees and expenses and in the Administrative Agent's discretion, to add
such fees and expenses to the Loan Account.

                  (d) The undertaking on the part of each Loan Party in this
Section 20.9 shall survive payment of the Liabilities and/or any termination,
release, or discharge executed by any Agent in favor of any Loan Party, other
than a termination, release, or discharge which makes specific reference to
this Section 20.9.

         20.10. COPIES AND FACSIMILES. Each Loan Document and all documents and
papers which relates thereto which have been or may be hereinafter furnished any
Agent or any Lender may be reproduced by any Lender or by any Agent by any
photographic, microfilm, xerographic, digital imaging, or other process, and
such Person making such reproduction may destroy any document so reproduced. Any
such reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made in the regular course of
business). Any facsimile which bears proof of transmission shall be binding on
the party which or on whose behalf such transmission was initiated and likewise
shall be so admissible in evidence as if the original of such facsimile had been
delivered to the party which or on whose behalf such transmission was received.

         20.11.   MASSACHUSETTS LAW. This Agreement and all rights and
obligations hereunder, including matters of construction, validity, and
performance, shall be governed by the law of The Commonwealth of Massachusetts
(without regard to the conflict of laws principles thereof).

         20.12. INDEMNIFICATION. The Borrowers' Representative and each Loan
Party shall indemnify, defend, and hold each Agent and each Lender and any of
their respective employees, officers, or agents (each, an "INDEMNIFIED PERSON")
harmless of and from any claim brought or threatened against

                                                                      Page 132
<PAGE>

any Indemnified Person by any Loan Party, any other guarantor or endorser of the
Liabilities, or any other Person (as well as from reasonable attorneys' fees,
expenses, and disbursements in connection therewith) on account of the
relationship of the Borrowers' Representative, the Loan Parties or of any other
guarantor or endorser of the Liabilities, including all costs, expenses,
liabilities, and damages as may be suffered by any Indemnified Person in
connection with (x) the Collateral; (y) the occurrence of any Event of Default;
or (z) the exercise of any rights or remedies under any of the Loan Documents
(each of claims which may be defended, compromised, settled, or pursued by the
Indemnified Person with counsel of the Administrative Agent's selection, but at
the expense of the Borrowers' Representative and the Loan Parties) other than
any claim as to which a final determination is made in a judicial proceeding (in
which the Administrative Agent and any other Indemnified Person has had an
opportunity to be heard), which determination includes a specific finding that
the Indemnified Person seeking indemnification had acted in a grossly negligent
manner or in actual bad faith or wilful misconduct. This indemnification shall
survive payment of the Liabilities and/or any termination, release, or discharge
executed by the Administrative Agent in favor of the Borrowers' Representative
and/or the Loan Parties, other than a termination, release, or discharge duly
executed on behalf of the Administrative Agent which makes specific reference to
this Section 20.12.

         20.13.   RULES OF CONSTRUCTION.  The following rules of construction
shall be applied in the interpretation, construction, and enforcement of this
Agreement and of the other Loan Documents:

                  (a) Unless otherwise specifically provided for herein,
interest and any fee or charge which is stated as a per annum percentage shall
be calculated based on a 360 day year and actual days elapsed.

                  (b) Words in the singular include the plural and words in the
 plural include the singular.

                  (c) Any reference, herein, to a circumstance or event's having
"more than a DE MINIMIS adverse effect" and any similar reference is to a
circumstance or event which (x) in a well managed enterprise, would receive the
active attention of senior management with a view towards its being reversed or
remedied; or (y) if not reversed or remedied could reasonably be expected to
lead to its becoming a material adverse effect.

                  (d) Titles, headings (indicated by being UNDERLINED or shown
in SMALL CAPITALS) and any Table of Contents are solely for convenience of
reference; do not constitute a part of the instrument in which included; and do
not affect such instrument's meaning, construction, or effect.

                  (e) The words "includes" and "including" are not limiting.

                  (f) Text which follows the words "including, without
limitation" (or similar words) is illustrative and not limitational.

                                                                      Page 133
<PAGE>

                  (g) Text which is shown in ITALICS (except for parenthesized
italicized text), shown in BOLD, shown IN ALL CAPITAL LETTERS, or in any
combination of the foregoing, shall be deemed to be conspicuous.

                  (h)      The words "may not" are prohibitive and not
permissive.

                  (i) Any reference to a Person's "knowledge" (or words of
similar import) are to such Person's knowledge assuming that such Person has
undertaken reasonable and diligent investigation with respect to the subject of
such "knowledge" (whether or not such investigation has actually been
undertaken).

                  (j) Terms which are defined in one section of any Loan
Document are used with such definition throughout the instrument in which so
defined.

                  (k)      The symbol "$" refers to United States Dollars.

                  (l) Unless limited by reference to a particular Section or
provision, any reference to "herein", "hereof", or "within" is to the entire
Loan Document in which such reference is made.

                  (m) References to "this Agreement" or to any other Loan
Document is to the subject instrument as amended to the date on which
application of such reference is being made.

                  (n) Except as otherwise specifically provided, all references
to time are to Boston time.
                  (o) In the determination of any notice, grace, or other
period of time prescribed or allowed hereunder:

                           (i) Unless otherwise provided (I) the day of the act,
         event, or default from which the designated period of time begins to
         run shall not be included and the last day of the period so computed
         shall be included unless such last day is not a Business Day, in which
         event the last day of the relevant period shall be the then next
         Business Day and (II) the period so computed shall end at 5:00 PM on
         the relevant Business Day.

                           (ii)     The word "from" means "from and including".

                           (iii)    The words "to" and "until" each mean "to,
                                    but excluding".

                           (iv)     The word "through" means "to and including".

                  (p) The Loan Documents shall be construed and interpreted in a
harmonious manner and in keeping with the intentions set forth in Section 20.14
hereof, PROVIDED, HOWEVER, in the event of any inconsistency between the
provisions of this Agreement and any other Loan Document, the provisions of this
Agreement shall govern and control.

         20.14.   INTENT.   It is intended that:

                  (a)      This Agreement take effect as a sealed instrument.

                                                                      Page 134
<PAGE>

                  (b) The scope of all Collateral Interests created by any Loan
Party to secure the Liabilities be broadly construed in favor of the
Administrative Agent and that they cover all assets of each Loan Party.

                  (c) All Collateral Interests created in favor of the
Collateral Agent at any time and from time to time by any Loan Party secure all
Liabilities, whether now existing or contemplated or hereafter arising.

                  (d) All reasonable costs, expenses, and disbursements incurred
by any Agent, and, to the extent provide in Section 20.9 each Lender, in
connection with such Person's relationship(s) with any Loan Party shall be borne
by the Loan Parties.

                  (e) Unless otherwise explicitly provided herein, the
Administrative Agent's consent to any action of any Loan Party which is
prohibited unless such consent is given may be given or refused by the
Administrative Agent in its sole discretion and without reference to Section
2.18 hereof.

         20.15.   PARTICIPATIONS.  Each Lender may sell participations to one
or more financial institutions (each, a "PARTICIPANT") in that Lender's
interests herein PROVIDED THAT no such participation shall include any provision
which accords that Participant with any rights, VIS A VIS any Agent, with
respect to any requirement herein for approval by a requisite number or
proportion of the Lenders, but PROVIDED FURTHER, such participation, if in the
Tranche B Loan, may be on such "voting" rights between that Lender and its
Participant as the two may determine. No such sale of a participation shall
relieve a Lender from that Lender's obligations hereunder nor obligate any Agent
to any Person other than a Lender.

         20.16. RIGHT OF SET-OFF. Any and all deposits or other sums at any time
credited by or due to any Loan Party from any Agent or any Lender or any
Participant or from any Affiliate of any of the foregoing, and any cash,
securities, instruments or other property of any Loan Party in the possession of
any of the foregoing, whether for safekeeping or otherwise (regardless of the
reason such Person had received the same) to the extent permitted by law, shall
at all times constitute security for all Liabilities and for any and all
obligations of each Loan Party to each Agent and such Lender or any Participant
or such Affiliate and following the occurrence of an Event of Default may be
applied or set off against the Liabilities and against such obligations at any
time, whether or not such are then due and whether or not other collateral is
then available to any Agent or that Lender.

         20.17. PLEDGES TO FEDERAL RESERVE BANKS: Nothing included in this
Agreement shall prevent or limit any Lender, to the extent that such Lender is
subject to any of the twelve Federal Reserve Banks organized under ss.4 of the
Federal Reserve Act (12 U.S.C. ss.341) from pledging all or any portion of that

                                                                      Page 135
<PAGE>

Lender's interest and rights under this Agreement, PROVIDED, HOWEVER, neither
such pledge nor the enforcement thereof shall release the pledging Lender from
any of its obligations hereunder or under any of the Loan Documents.

         20.18. MAXIMUM INTEREST RATE. Regardless of any provision of any Loan
Document, neither any Agent nor any Lender shall be entitled to contract for,
charge, receive, collect, or apply as interest on any Liability, any amount in
excess of the maximum rate imposed by Applicable Law. Any payment which is made
which, if treated as interest on a Liability would result in such interest's
exceeding such maximum rate shall be held, to the extent of such excess, as
additional collateral for the Liabilities as if such excess were "Collateral."

         20.19.   WAIVERS.

                  (a) The Borrowers' Representative and each Loan Party (and all
guarantors, endorsers, and sureties of the Liabilities) make each of the waivers
included in Section 20.19(b), below, knowingly, voluntarily, and intentionally,
and understands that each Agent and each Lender, in establishing the facilities
contemplated hereby and in providing loans and other financial accommodations to
or for the account of the Loan Parties as provided herein, whether not or in the
future, is relying on such waivers.

                  (b)  THE BORROWERS' REPRESENTATIVE, EACH LOAN PARTY, AND EACH
SUCH GUARANTOR, ENDORSER, AND SURETY RESPECTIVELY WAIVES THE FOLLOWING:

                           (i) Except as otherwise specifically required hereby,
         notice of non-payment, demand, presentment, protest and all forms of
         demand and notice, both with respect to the Liabilities and the
         Collateral.
                           (ii) Except as otherwise specifically required
         hereby, the right to notice and/or hearing prior to an Agent's
         exercising of that Agent's rights upon default.

                           (III) THE RIGHT TO A JURY IN ANY TRIAL OF ANY CASE OR
         CONTROVERSY IN WHICH ANY AGENT OR ANY LENDER IS OR BECOMES A PARTY
         (WHETHER SUCH CASE OR CONTROVERSY IS INITIATED BY OR AGAINST ANY AGENT
         OR ANY LENDER OR IN WHICH ANY AGENT OR ANY LENDER IS JOINED AS A PARTY
         LITIGANT), WHICH CASE OR CONTROVERSY ARISES OUT OF OR IS IN RESPECT OF,
         ANY RELATIONSHIP AMONGST OR BETWEEN THE BORROWERS' REPRESENTATIVE, ANY
         LOAN PARTY OR ANY OTHER PERSON AND THE AGENT AND EACH LENDER LIKEWISE
         WAIVES THE RIGHT TO A JURY IN ANY TRIAL OF ANY SUCH CASE OR
         CONTROVERSY).

                           (iv) Except for manifest error, any defense,
         counterclaim, set-off, recoupment, or other basis on which the amount
         of any Liability, as stated on the books and

                                                                      Page 136
<PAGE>

         records of the Administrative Agent or any Lender, could be reduced or
         claimed to be paid otherwise than in accordance with the tenor of and
         written terms of such Liability.

                           (v)  Any claim to consequential, special, or
punitive damages.

                                                                      Page 137

<PAGE>

                                                THE  BORROWERS' REPRESENTATIVE

                                                                 DESIGNS, INC.

                                           By_________________________________

                                   Print Name:________________________________

                                        Title:________________________________

                                                                     BORROWERS

                                                                 DESIGNS, INC.

                                           By_________________________________

                                   Print Name:________________________________

                                        Title:________________________________

                                                         DESIGNS APPAREL, INC.

                                           By_________________________________

                                   Print Name:________________________________

                                        Title:________________________________

                                     ADMINISTRATIVE AGENT AND COLLATERAL AGENT

                                                     FLEET RETAIL FINANCE INC.

                                           By_________________________________

                                   Print Name:________________________________

                                        Title:________________________________

                                                              TRANCHE B LENDER

                                                  BACK BAY CAPITAL FUNDING LLC

                                           By_________________________________

                                   Print Name:________________________________

                                        Title:________________________________

                                                              Signature Page 1

<Page>

                                                 THE REVOLVING CREDIT LENDERS:

                                                    FLEET  RETAIL FINANCE INC.
                                           By_________________________________

                                         Name:________________________________

                                        Title:________________________________

                                                        HELLER FINANCIAL, INC.
                          (CO-DOCUMENTATION AGENT AND REVOLVING CREDIT LENDER)

                                           By_________________________________

                                         Name:________________________________

                                        Title:________________________________

                                        NATIONAL CITY COMMERCIAL FINANCE, INC.
                          (CO-DOCUMENTATION AGENT AND REVOLVING CREDIT LENDER)

                                           By_________________________________

                                         Name:________________________________

                                        Title:________________________________

                                                WELLS FARGO RETAIL FINANCE LLC
                               (SYNDICATION AGENT AND REVOLVING CREDIT LENDER)

                                           By_________________________________

                                         Name:________________________________

                                        Title:________________________________

                                                             Signature Page 2

<Page>

                                                             Signature Page 3

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