Document:

GUARANTEE

                  GUARANTEE, dated as of May 12, 2000 (as amended,  supplemented
or  otherwise  modified  from  time to time,  the  "Guarantee"),  made by CLUETT
AMERICAN  CORP.  (together with its  successors  and assigns  permitted  herein,
"Cluett  American"),   in  favor  of  CLUETT  AMERICAN  RECEIVABLES,   LLC  (the
"Purchaser").

                              W I T N E S S E T H :

                  WHEREAS, pursuant to the Receivables Transfer Agreement, dated
as of May 12, 2000 (as amended,  supplemented or otherwise modified from time to
time, the "Transfer  Agreement"),  between Great American  Knitting Mills,  Inc.
("Great  American"),  as  seller  and  servicer  ("Great  American"),   and  the
Purchaser,  the Purchaser has agreed to purchase certain Receivables (as defined
therein) on the Purchase Dates referred to therein;

                  WHEREAS,  pursuant to Sections 2.6, 2.7 and  6.2(a)(vi) of the
Transfer  Agreement,  Great  American shall have,  under certain  circumstances,
certain repurchase and indemnification obligations with respect to the Purchased
Receivables (as defined therein); and

                  WHEREAS, Great American is a wholly-owned subsidiary of Cluett
American  and it is to the  advantage  of  Cluett  American  that the  Purchaser
purchase certain Receivables from Great American;

                  NOW THEREFORE,  in consideration of the premises and to induce
the  Purchaser to enter into the Transfer  Agreement and to induce the Purchaser
to make the purchases from Great American under the Transfer  Agreement,  Cluett
American hereby agrees with the Purchaser as follows:

                  1. Defined  Terms.  Terms  defined in the preamble  hereof and
the recitals  hereto and terms defined in the Transfer Agreement and used herein
without definition shall have their defined meanings when used herein.

                  2. Cluett American Indemnification Obligation. Cluett American
hereby  unconditionally  guarantees to the Purchaser  the  performance  by Great
American when due of its  obligations  under  Sections  2.6, 2.7 and  6.2(a)(vi)
of the Transfer
Agreement.

                  3. No Subrogation,  Contribution,  Reimbursement or Indemnity.
Notwithstanding  anything to the  contrary in this  Guarantee,  Cluett  American
hereby  irrevocably  waives all rights which may have arisen in connection  with
this Guarantee to be subrogated to any of the rights (whether contractual, under
Title 11 of the United States Code, including Section 509 thereof,  under common
law or otherwise) of the Purchaser  against Great  American or against any right
of offset of the Purchaser with respect to Great  American's  obligations  under
Section  6.2(a)(vi)  the Transfer  Agreement.  Cluett  American  hereby  further
irrevocably  waives all  contractual,  common law,  statutory or other rights of
reimbursement,  contribution,  exoneration  or indemnity (or any similar  right)
from or against  Great  American  or any other  Person  which may have arisen in
connection with this  Guarantee.  The provisions of this paragraph shall survive
the termination of the Transfer  Agreement and the Guarantee;  provided that the
foregoing  waiver  shall be of no  force  and  effect  370  days  following  the
termination of the Transfer  Agreement and the Guarantee but only if during such
370-day period Great American shall not have commenced or have commenced against
it a bankruptcy proceeding under Title 11 of the United States Code.

                  4. Amendments, etc. with respect to the Purchased Receivables.
Cluett American shall remain obligated hereunder  notwithstanding  that, without
any  reservation  of rights against  Cluett  American,  and without notice to or
further  assent  by  Cluett  American,  any  demand  for  payment  of any of the
Purchased  Receivables made by the Purchaser may be rescinded by such Purchaser,
and  the  liability  of any  Obligor  upon  or for  any  part  of the  Purchased
Receivables, or any collateral security or guarantee therefor or right of offset
with respect  thereto,  may, from time to time, in whole or in part, be renewed,
extended, amended, modified,  accelerated,  compromised,  waived, surrendered or
released by the  Purchaser,  and the Transfer  Agreement or any other  documents
executed  and  delivered  in  connection  therewith  may be  amended,  modified,
supplemented  or  terminated,  in whole or in part,  as the  Purchaser  may deem
advisable from time to time, and any collateral security,  guarantee or right of
offset  at any time  held by the  Purchaser  for the  payment  of the  Purchased
Receivables  may be  sold,  exchanged,  waived,  surrendered  or  released.  The
Purchaser  shall not have any obligation to protect,  secure,  perfect or insure
any Lien at any time held by it as security for the Purchased Receivables or for
this Guarantee or any property subject thereto.

                  5.  Guarantee  Absolute  and  Unconditional.  Cluett  American
waives any and all notice of the creation,  renewal, extension or accrual of any
of the Purchased Receivables and notice of or proof of reliance by the Purchaser
upon this  Guarantee or acceptance  of this  Guarantee;  the Transfer  Agreement
shall  conclusively  be deemed to have been  created,  contracted or incurred in
reliance upon this Guarantee;  and all dealings between Great American or Cluett
American,  on the one hand, and the Purchaser,  on the other,  shall likewise be
conclusively  presumed to have been had or  consummated  in  reliance  upon this
Guarantee.  Cluett American waives diligence,  presentment,  protest, demand for
payment and notice of default or nonpayment to or upon Great  American or Cluett
American  with respect to the Purchased  Receivables.  This  Guarantee  shall be
construed as a continuing,  absolute and unconditional  Guarantee without regard
to (a) the validity or enforceability of the Transfer Agreement,  the Guarantee,
the Assignments or any other document or instrument  executed in connection with
any  of  the  foregoing  documents,  any of  the  Purchased  Receivables  or any
collateral  security  therefor  or  guarantee  or right of offset  with  respect
thereto at any time or from time to time held by the Purchaser,  (b) any defense
which  relates,   directly  or  indirectly,   to  the  matters  covered  by  the
representations  and warranties  set forth in the Transfer  Agreement or set-off
which in either  case may at any time be  available  to or be  asserted by Great
American against the Purchaser,  or (c) any other circumstance  whatsoever (with
or without  notice to or knowledge of Great American or Cluett  American)  which
constitutes,  or  might  be  construed  to  constitute,  an  equitable  or legal
discharge of Great American,  any Obligor for the Purchased  Receivables,  or of
Cluett  American under this  Guarantee,  in bankruptcy or in any other instance;
provided  that this  clause (c) shall not  prevent  Cluett  American  from being
discharged from its obligations under this Guarantee pursuant to confirmation of
a plan of reorganization under Chapter 11 of the United States Code in a case in
which Cluett  American is the debtor.  When the Purchaser is pursuing its rights
and remedies hereunder against Cluett American,  the Purchaser may, but shall be
under no  obligation  to, pursue such rights and remedies as it may have against
Great American,  the Obligor on any Purchased  Receivable or any other Person or
against any  collateral  security or guarantee for the Purchased  Receivables or
any right of offset with respect  thereto,  and any failure by the  Purchaser to
pursue  such other  rights or remedies  or to collect  any  payments  from Great
American,  any such Obligor or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of Great  American,  any such Obligor or any such other Person or of any
such collateral security, guarantee or right of offset, shall not relieve Cluett
American of any liability  hereunder,  and shall not impair or affect the rights
and remedies,  whether express,  implied or available as a matter of law, of the
Purchaser against Cluett American.

                  6.   Reinstatement.   This  Guarantee  shall  continue  to  be
effective, or be reinstated,  as the case may be, if at any time payment, or any
part thereof, of any of the Purchased Receivables is rescinded or must otherwise
be  restored  or  returned by the  Purchaser  upon the  insolvency,  bankruptcy,
dissolution,  liquidation or  reorganization of Great American or any Obligor or
upon or as a result of the appointment of a receiver,  intervenor or conservator
of, or trustee or similar  officer  for,  Great  American  or any Obligor or any
substantial part of its property, or otherwise,  all as though such payments had
not been made.

                  7.   Payments.  Cluett American  hereby agrees that payments
required to be made by it hereunder will be paid to the Purchaser in immediately
available funds without set-off in U.S.  Dollars at the office of the Purchaser
at the address  specified in subsection 6.8 of the Transfer Agreement.

                  8.  Severability.  Any  provision of this  Guarantee  which is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

                  9.  Section  Headings.  The section  headings used in this
Guarantee are for  convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

                  10. No Waiver; Cumulative Remedies. The Purchaser shall not by
any act (except by a written instrument  pursuant to Section 11 hereof),  delay,
indulgence,  omission or  otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default or breach of any of the terms and
conditions hereof. No failure to exercise,  nor any delay in exercising,  on the
part of the Purchaser,  any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further  exercise  thereof or the exercise
of any other right,  power or privilege.  A waiver by the Purchaser of any right
or remedy  hereunder on any one occasion  shall not be construed as a bar to any
right or remedy which the Purchaser would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative,  may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.

                  11. Waivers and  Amendments;  Successors and Assigns.  None of
the terms or provisions of this Guarantee may be waived,  amended,  supplemented
or otherwise modified except by a written instrument executed by Cluett American
and the  Purchaser.  This  Guarantee  shall be binding upon the  successors  and
permitted  assigns  of Cluett  American  and shall  inure to the  benefit of the
Purchaser and its successors and assigns; provided,  however, that the Purchaser
shall not assign this  Guarantee  to any Person  except in  accordance  with the
Transfer Agreement;  and provided further,  that the Company agrees that it will
not assign or transfer  all or any portion of its rights or delegate  any of its
obligations hereunder without the prior written consent of the Purchaser.

         Cluett  American  acknowledges  that the Purchaser  will,  concurrently
herewith,  assign to the  Unaffiliated  Purchaser all of the Purchaser's  right,
title and  interest  in, to and under (but none of the  Purchaser's  obligations
under),  whether now or hereafter  owned,  existing or arising,  this Guarantee.
Cluett  American  consents to such  assignment and agrees that the  Unaffiliated
Purchaser,  to the extent provided in the Receivables Purchase Agreement,  shall
be entitled to enforce the terms of this  Guarantee  and the rights  (including,
without limitation, the right to grant or withhold any consent or waiver) of the
Purchaser  directly against Cluett American.  Cluett American hereby consents to
all of the terms of the Receivables Purchase Agreement.

                  12.      GOVERNING LAW. THIS GUARANTEE AND THE  OBLIGATIONS OF
CLUETT  AMERICAN  HEREUNDER  SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  13.  Notices.  All notices by the Purchaser to Cluett American
hereunder to be effective shall be in writing  (including by telecopy or telex),
and shall be deemed to have been duly given or made (d) when  delivered by hand,
(e) in the case of mail, three Business Days after deposit in the mail,  postage
prepaid,  (f) in the case of telecopy notice, when received,  or (g) in the case
of telex notice,  when sent, answer back received,  addressed to Cluett American
at its  address or  transmission  number set forth  under its  signature  below.
Cluett  American  may change its  address  and  transmission  numbers by written
notice to the Purchaser.

                  14.   Waiver.    The   Purchaser   hereby    irrevocably   and
unconditionally  waives,  to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal  action or  proceeding  relating to
this  Guarantee  any  special,  exemplary,  punitive or  consequential  damages;
provided  that the waiver  contained  in this Section 14 shall not extend to any
right to claim or recover from Cluett American any special, exemplary,  punitive
or consequential  damages for which the Purchaser is liable to any Person (other
than an affiliate of such Purchaser).

                  15.   Acknowledgments.  Cluett American  hereby  acknowledges
with respect to the transactions  contemplated by the Transfer Agreement that:

                  (h)  it has been advised by counsel in the negotiation,
execution and delivery of this Guarantee;

                  (i) the  Purchaser  has no  fiduciary  relationship  to Cluett
         American or Great American and the relationship  between the Purchaser,
         on the one hand, and Cluett  American or Great  American,  on the other
         hand, is solely that of debtor and creditor; and

                  (j) no joint venture  exists  between  Great  American and the
Purchaser or between Cluett American and the Purchaser.

                  16.  WAIVERS OF JURY TRIAL.  EACH OF CLUETT AMERICAN AND THE
PURCHASER  HEREBY  IRREVOCABLY  AND  UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE AND FOR ANY COUNTERCLAIM
THEREIN.

<PAGE>

         IN WITNESS  WHEREOF,  Cluett  American has caused this  Guarantee to be
duly  executed  and  delivered  in New  York,  New York by its  proper  and duly
authorized officer as of the day and year first above written.

                                               CLUETT AMERICAN CORP.

                                               By:
                                               Name:
                                               Title:

                                               Address for Notices:

                                               Cluett American Corp.
                                               48 West 38th Street, 8th Floor
                                               New York, New York 10018-6211
                                               Attention: General Counsel

                                               Acknowledged By:

                                               CLUETT AMERICAN RECEIVABLES, LLC

                                               By:
                                               Name:
                                               Title:

<PAGE>REPURCHASE AGREEMENT

                  REPURCHASE  AGREEMENT,  dated as of May 12, 2000 (as  amended,
supplemented   or  otherwise   modified  from  time  to  time,  the  "Repurchase
Agreement"),  made by VESTAR  CAPITAL  PARTNERS  III,  L.P.  (together  with its
successors and assigns  permitted  herein,  "Vestar  III"),  in favor of BANC OF
AMERICA COMMERCIAL CORPORATION (the "Purchaser").

                             W I T N E S S E T H :

                  WHEREAS, pursuant to the Receivables Purchase Agreement, dated
as of May 12, 2000 (as amended,  supplemented or otherwise modified from time to
time, the "Purchase Agreement"),  between Cluett American Receivables,  LLC (the
"Seller"),  as seller,  and the  Purchaser,  the Purchaser may purchase  certain
Receivables (as defined therein) on the Purchase Dates referred to therein;

                  WHEREAS,  it is a  condition  precedent  to any  purchases  of
Receivables by the Purchaser  from the Seller under the Purchase  Agreement that
Vestar III shall have executed and delivered this Repurchase Agreement; and

                  WHEREAS,  Vestar III owns a majority of the outstanding common
stock of the indirect  parent of the Seller and it is to the advantage of Vestar
III that the Purchaser purchase certain Receivables from the Seller;

                  NOW THEREFORE,  in consideration of the premises and to induce
the  Purchaser to enter into the Purchase  Agreement and to induce the Purchaser
to make the purchases from the Seller under the Purchase  Agreement,  Vestar III
hereby agrees with the Purchaser as follows:

                  1. Defined Terms. Terms defined in the preamble hereof and the
recitals  hereto and terms  defined in the  Purchase  Agreement  and used herein
without  definition shall have their defined meanings when used herein,  and the
following terms shall have the following meanings:

                  "Bankruptcy  Event":  with  respect to any Person,  either (i)
         such Person  shall have an order for relief  entered with respect to it
         under the Federal  bankruptcy laws as now or hereafter in effect,  (ii)
         such Person shall have  voluntarily  commenced any  proceeding or filed
         any petition  under any  bankruptcy,  insolvency or similar law seeking
         the dissolution,  liquidation or reorganization of such Person or (iii)
         involuntary  proceedings or an involuntary  proceeding  shall have been
         commenced or filed against such Person under any bankruptcy, insolvency
         or similar law seeking the dissolution,  liquidation or  reorganization
         of such  Person and such  proceeding  or  petition  shall have not been
         dismissed for sixty (60) days.

                  "Capital  Call  Notice":  a capital  call  notice  satisfying
         the  requirements  of Section  3.1 of the  Partnership Agreement and
         substantially in the form of Exhibit A attached hereto.

                  "Cluett American":  Cluett American Corp., a Delaware
         corporation.

                  "Deposited  Notices":  a collective  reference to the Capital
         Call Notices  delivered by Vestar III to the  Purchaser pursuant to
         Section 8 and maintained on deposit with the Purchaser as contemplated
         by Section 10(g).

                  "Diluted  Receivable":  a Purchased  Receivable to the extent
         such Purchased  Receivable has not been paid in full at maturity for
         any reason other than the applicable Customer's financial inability to
         pay.

                  "Limited Partners":  the limited partners of Vestar III.

                  "Material  Adverse  Effect":  a material adverse effect on (i)
         the condition (financial or otherwise),  operations,  business, assets,
         liabilities or results of operations of Vestar III, (ii) the ability of
         Vestar III to perform any  material  obligation  under this  Repurchase
         Agreement or (iii) the rights and remedies of the Purchaser  under this
         Repurchase Agreement.

                  "Obligations":  all obligations of the Seller to the Purchaser
         under the Purchase Agreement, whether now existing or hereafter
         arising.

                  "Outstanding  Balance":  of a Pool of Purchased Receivables at
         any time, the Purchase Price of such Pool of Purchased Receivables
         minus all amounts theretofore received and applied by the Purchaser in
         payment of such Purchase Price.

                  "Partnership  Agreement":  that certain limited  partnership
         agreement,  dated as of November 22, 1996, among Vestar Associates III,
         L.P., a Delaware limited partnership, as general  partner of Vestar III
         and the  individuals  and entities party thereto, as limited partners.

                  "Plan Asset  Regulations":  the plan asset regulations of the
         U.S. Department of Labor, 29 CFR 2510.3-101 et seq., as amended, and
         the advisory opinions and rulings issued thereunder.

                  "Remaining  Capital Commitment  Balance":  with respect to any
         Limited  Partner at any time,  an amount  equal to the total  remaining
         amount of capital  contributions that such Limited Partner is obligated
         at such  time to  make to  Vestar  III  pursuant  to the  terms  of the
         Partnership Agreement.

                  "Repurchase Date":  as defined in paragraph 2.

                  "Repurchase Obligation": for any Pool of Purchased Receivables
         on any Repurchase Date, the sum of: (i) the Outstanding Balance of such
         Pool of Purchased  Receivables  on the Final  Settlement  Date for such
         Pool  multiplied  by (A) in the event that any  Bankruptcy  Event shall
         have occurred with respect to Cluett  American or Great  American on or
         prior to such Final  Settlement Date, 100%, or (B) in the event that no
         Bankruptcy Event shall have occurred with respect to Cluett American or
         Great  American on or prior to such Final  Settlement  Date,  20% minus
         (ii)  all  amounts  received  by the  Purchaser  on or  prior  to  such
         Repurchase  Date from Great  American or Cluett  American in payment of
         any Diluted Receivables.

                  2. Vestar III Repurchase  Obligation.  On the seventh Business
Day  following  delivery  to  Vestar of the  notice  referred  to in the  second
sentence of  paragraph  8(b) (the  "Repurchase  Date") with respect to a Pool of
Purchased Receivables, Vestar III agrees to repurchase from the Purchaser, up to
the  Repurchase  Obligation,  all Purchased  Receivables  in such Pool which are
Diluted  Receivables.  The repurchase  price for such Diluted  Receivables  (the
"Repurchase  Price")  on such  Repurchase  Date  will be equal to the  aggregate
Outstanding  Balance  of such  Diluted  Receivables.  In  addition,  Vestar  III
promises  to pay to the  Purchaser  interest,  at a rate equal to the Prime Rate
plus 2% per annum,  on the  amount  payable  hereunder  on any  Repurchase  Date
pursuant to the first  sentence of this  paragraph for each day, if any,  during
the period  from such  Repurchase  Date  through the date such amount is paid in
full.

                  If on any Repurchase Date the aggregate Outstanding Balance of
the Diluted  Receivables in the related Pool exceeds the Repurchase  Obligation,
Vestar III shall be deemed to acquire (i) first Diluted  Receivables  in full to
the extent  the  Repurchase  Prices  thereof  would not  exceed  the  Repurchase
Obligation  and (ii) to the extent of any  remaining  Repurchase  Obligation,  a
subordinated  fractional  interest in each  remaining  Diluted  Receivable,  the
numerator  of  which  shall  be the  remaining  Repurchase  Obligation  and  the
denominator  of  which  shall be the  aggregate  Repurchase  Price  for all such
remaining  Diluted  Receivables.  Vestar III agrees that any  payments  made the
Customers  on account of any Diluted  Receivables  in which it owns a fractional
interest  shall be paid first to the Purchaser  until the Purchaser has received
in full the Purchase  Price paid by it for such  Receivables  together  with all
other  amounts  owed  to it  thereunder  pursuant  to the  Receivables  Purchase
Agreement.

                  No less than ten Business Days prior to each Final  Settlement
Date,  the  Purchaser  shall give  Vestar III written  notice of the  Repurchase
Obligation  as of  such  notification  date  (assuming  such  date  was a  Final
Settlement Date).

                  3. No Subrogation,  Contribution,  Reimbursement or Indemnity.
Notwithstanding  anything to the contrary in this Repurchase  Agreement,  Vestar
III hereby  irrevocably  waives all rights  which may have arisen in  connection
with this  Repurchase  Agreement to be subrogated to any of the rights  (whether
contractual,  under Title 11 of the United  States Code,  including  Section 509
thereof,  under common law or otherwise)  of the  Purchaser  against the Seller,
Great  American  or  Cluett  American  or  against  any  right of  offset of the
Purchaser with respect to the Obligations. Vestar III hereby further irrevocably
waives all contractual,  common law, statutory or other rights of reimbursement,
contribution,  exoneration  or indemnity (or any similar  right) from or against
the Seller,  Great American,  Cluett American or any other Person which may have
arisen in connection  with this  Repurchase  Agreement.  The  provisions of this
paragraph  shall  survive the  termination  of the  Purchase  Agreement  and the
Repurchase  Agreement;  provided that the foregoing  waiver shall be of no force
and effect 370 days following the termination of the Purchase  Agreement and the
Repurchase Agreement but only if during such 370-day period the Seller shall not
have commenced or have commenced against it a bankruptcy  proceeding under Title
11 of the United States Code.

                  4. Amendments, etc. with respect to the Purchased Receivables.
Vestar III shall remain obligated  hereunder  notwithstanding  that, without any
reservation  of rights  against  Vestar III,  and  without  notice to or further
assent by Vestar III, any demand for payment of any of the Purchased Receivables
made by the Purchaser may be rescinded by such  Purchaser,  and the liability of
any  Customer  upon  or for  any  part  of  the  Purchased  Receivables,  or any
collateral  security  or  guarantee  therefor  or right of offset  with  respect
thereto,  may,  from time to time,  in whole or in part,  be renewed,  extended,
amended, modified, accelerated,  compromised, waived, surrendered or released by
the Purchaser,  and the Purchase  Agreement or any other documents  executed and
delivered in connection  therewith  may be amended,  modified,  supplemented  or
terminated,  in whole or in part, as the Purchaser may deem  advisable from time
to time, and any collateral  security,  guarantee or right of offset at any time
held by the Purchaser for the payment of the Purchased  Receivables may be sold,
exchanged,  waived,  surrendered or released.  The Purchaser  shall not have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Purchased  Receivables or for this  Repurchase  Agreement or
any property subject thereto.

                  5. Repurchase Agreement Absolute and Unconditional. Vestar III
waives any and all notices of the creation, renewal, extension or accrual of the
Purchase Agreement or any of the Purchased Receivables and notice of or proof of
reliance by the Purchaser upon this  Repurchase  Agreement or acceptance of this
Repurchase  Agreement;  the Purchased  Agreement shall conclusively be deemed to
have been  created,  contracted  or incurred in  reliance  upon this  Repurchase
Agreement; and all dealings between the Seller, Great American,  Cluett American
or Vestar III, on the one hand, and the Purchaser,  on the other, shall likewise
be  conclusively  presumed to have been had or consummated in reliance upon this
Repurchase Agreement. Vestar III waives diligence,  presentment, protest, demand
for payment  and notice of default or  nonpayment  to or upon the Seller,  Great
American,   Cluett  American  or  Vestar  III  with  respect  to  the  Purchased
Receivables.  This  Repurchase  Agreement  shall be construed  as a  continuing,
absolute  and  unconditional  Repurchase  Agreement  without  regard  to (k) the
validity or enforceability of the Purchase Agreement,  the Receivables  Transfer
Agreement,  the  Assignments  or any other  document or  instrument  executed in
connection with any of the foregoing documents, any of the Purchased Receivables
or any collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Purchaser,  (l) any defense
which  relates,   directly  or  indirectly,   to  the  matters  covered  by  the
representations  and  warranties  set forth in the  Purchase  Agreement  or this
Repurchase  Agreement  or  set-off  which  in  either  case  may at any  time be
available  to or be asserted by the Seller,  Great  American or Cluett  American
against the Purchaser, or (m) any other circumstance whatsoever (with or without
notice to or knowledge of the Seller, Great American,  Cluett American or Vestar
III) which  constitutes,  or might be construed to  constitute,  an equitable or
legal discharge of the Seller, Great American, Cluett American, any Customer for
the Purchased Receivables,  or of Vestar III under this Repurchase Agreement, in
bankruptcy  or in any other  instance;  provided  that this  sentence  shall not
prevent  Vestar  III from  being  discharged  from its  obligations  under  this
Repurchase  Agreement pursuant to confirmation of a plan of reorganization under
Chapter  11 of the  United  States  Code in a case in  which  Vestar  III is the
debtor. Except as provided in paragraph 8(b), when the Purchaser is pursuing its
rights and remedies  hereunder  against Vestar III, the Purchaser may, but shall
be under no  obligation  to,  pursue  such  rights and  remedies  as it may have
against the Seller, the Customer on any Purchased Receivable or any other Person
or against any collateral security or guarantee for the Purchased Receivables or
any right of offset with respect  thereto,  and any failure by the  Purchaser to
pursue such other rights or remedies or to collect any payments from the Seller,
any  such  Customer  or any  such  other  Person  or to  realize  upon  any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Seller, any such Customer or any such other Person or of any such
collateral security,  guarantee or right of offset, shall not relieve Vestar III
of any  liability  hereunder,  and shall not  impair or affect  the  rights  and
remedies,  whether  express,  implied or  available  as a matter of law,  of the
Purchaser against Vestar III.

                  6. Reinstatement.  This Repurchase Agreement shall continue to
be effective,  or be reinstated,  as the case may be, if at any time payment, or
any part  thereof,  of any of the  Purchased  Receivables  is  rescinded or must
otherwise  be  restored  or  returned  by the  Purchaser  upon  the  insolvency,
bankruptcy,  dissolution,  liquidation  or  reorganization  of the Seller or any
Customer or upon or as a result of the appointment of a receiver,  intervenor or
conservator of, or trustee or similar officer for, the Seller or any Customer or
any substantial part of its property, or otherwise,  all as though such payments
had not been made.  Vestar III agrees that it will  indemnify  the Purchaser for
all  reasonable  costs and expenses  (including,  without  limitation,  fees and
expenses  of  counsel)  incurred  by  the  Purchaser  in  connection  with  such
rescission or  restoration,  including  any such costs and expenses  incurred in
defending against any claim alleging that such payment constituted a preference,
fraudulent  transfer or similar  payment  under any  bankruptcy,  insolvency  or
similar law.

                  7.       Payments.  Vestar III hereby agrees that all payments
made by it hereunder will be paid to the Purchaser in immediately available
funds  without  set-off in U.S.  Dollars at the office of the  Purchaser  at the
address  for  notices  thereto specified in the Purchase Agreement.

                  8. Deposit of Capital Call Notices. (a) On each Purchase Date,
Vestar III will  deliver to the  Purchaser  Capital Call Notices for the Pool of
Receivables  to be  purchased  on such date.  Each of the Capital  Call  Notices
delivered  by  Vestar  III to the  Purchaser  hereunder  shall  be  held  by the
Purchaser  and shall be (i) duly  completed by the Purchaser no earlier than the
Final Settlement Date for the related Pool of Receivables, stating the amount of
the applicable  Capital  Contribution  thereunder  will be equal to the pro rata
share of the  applicable  Limited  Partner  (determined  in  proportion  to such
Limited  Partner's total capital  commitment  obligation to Vestar III under the
Partnership Agreement) of the Repurchase Obligation due on such Final Settlement
Date (such amount for a Pool of Purchased Receivables, the "Reserved Amount" for
such Pool) and (ii)  delivered by the Purchaser to the Limited  Partners only in
the event that Vestar III fails to pay any of its payment obligations  hereunder
within three  Business Days after the  applicable  Final  Settlement  Date.  All
payments  received by the Purchaser  from the Limited  Partners  pursuant to the
Capital Call Notices shall be applied to the payment of Vestar III's obligations
hereunder.

                  (b) It shall be a condition  precedent  to the  obligation  of
Vestar III to pay any amounts  hereunder,  and to the right of the  Purchaser to
deliver any  Deposited  Notices that the  Purchaser  shall have made demand,  in
writing,  for  payment of any Diluted  Receivables  of both Great  American  and
Cluett  American to the extent each such Person is obligated  therefor under the
Receivables  Transfer Agreement or any guaranties  thereof.  The Purchaser shall
deliver  a copy of such  notice  to  Vestar.  It  shall be a  further  condition
precedent to the right of the Purchaser to deliver any Deposited  Notices to the
Limited  Partners that the Purchaser  shall have given Vestar III no less than 2
Business Days' prior written notice of such intended action.

                  (c) No later than the  fifteenth  (15)  Business Day following
each  Final  Settlement  Date,  the  Purchaser  shall  deliver to Vestar III any
Deposited Notices for the related Pool of Receivables which have not theretofore
been delivered to the Limited Partners.

                  9. Attorneys' Fees and Costs of Collection. Vestar III further
agrees  to pay all costs  and  expenses  of the  Purchaser,  if any  (including,
without  limitation,  reasonable  attorneys'  fees and  expenses and the cost of
internal  counsel),   in  connection  with  any  enforcement   (whether  through
negotiations, legal proceedings, or otherwise) of this Repurchase Agreement.

                  10. Representations and Warranties.  Vestar III represents and
warrants to the  Purchaser that:

                  (a)  Vestar  III  is a  limited  partnership  duly  organized,
         validly  existing and in good  standing  under the laws of the State of
         Delaware,  and is in good standing as a foreign limited  partnership in
         each other  jurisdiction  where the ownership of its  properties or the
         conduct  of its  business  requires  it to be so  other  than  in  such
         jurisdictions where failure to be in good standing could not reasonably
         be expected to have a Material  Adverse  Effect,  and has all power and
         authority  under  such  laws  and  its  partnership  agreement  and all
         material governmental licenses, authorizations,  consents and approvals
         required to carry on its business as now conducted.

                  (b) Vestar III has the  partnership or other  necessary  power
         and  authority,  and the legal  right,  to enter  into this  Repurchase
         Agreement and to perform its  obligations  hereunder and consummate the
         transactions   contemplated  hereby  and  has  by  proper  action  duly
         authorized the execution and delivery of this Repurchase Agreement.

                  (c)  Neither the  execution  and  delivery of this  Repurchase
         Agreement nor the consummation of the transactions contemplated herein,
         nor performance of and compliance with the terms and provisions  hereof
         will (i)  violate or conflict  with any  provision  of the  Partnership
         Agreement or other governance  document of Vestar III, (ii) violate any
         material law, regulation, order, writ, judgment,  injunction, decree or
         permit  applicable  to Vestar  III,  (iii)  violate  or  conflict  with
         contractual  provisions  of, or cause an event of  default  under,  any
         indenture,  loan agreement,  mortgage, deed of trust, contract or other
         agreement or  instrument  to which Vestar III is a party or by which it
         may be bound,  (iv)  result in or  require  the  creation  of any lien,
         security  interest or other charge or encumbrance  upon or with respect
         to Vestar III's properties.

                  (d) No  consent,  approval,  authorization  or  order  of,  or
         filing,  registration or qualification  with, any court or Governmental
         Authority or other Person is required in connection with the execution,
         delivery or performance of this Repurchase Agreement.

                  (e) This  Agreement  has been duly  executed and  delivered by
         Vestar III and  constitutes  legal,  valid and binding  obligations  of
         Vestar  III,  enforceable  in  accordance  with its  terms,  subject to
         applicable    bankruptcy,     insolvency,     fraudulent    conveyance,
         reorganization,   moratorium  or  laws  affecting   creditors'   rights
         generally and subject to general  principles  of equity,  regardless of
         whether considered in proceedings in equity or at law and by an implied
         covenant of good faith and fair dealing.

                  (f) Vestar III is a venture capital  operating  company within
         the  meaning of the Plan  Asset  Regulations  or Vestar  III  satisfies
         another exception under the Plan Asset Regulations such that the assets
         of Vestar III are not "plan  assets"  within the meaning and as defined
         in the Plan Asset Regulations.

                  (g) On each  Purchase  Date Vestar III will have  delivered to
         the Purchaser an original Capital Call Notice for each Limited Partner,
         in each case  executed  in blank by the General  Partner and  directing
         such  Limited  Partner to wire  transfer  funds to the  Purchaser in an
         amount to be completed by the  Purchaser  pursuant to paragraph 8. Each
         Deposited  Notice,  when  delivered by the Purchaser to the  applicable
         Limited  Partner in  accordance  with the terms of Section 8, will give
         rise to a  legal,  valid  and  binding  obligation  on the part of such
         Limited Partner to pay to the Purchaser (for the account of Vestar III)
         such Limited  Partner's  pro rata share of the Reserved  Amount for the
         applicable  Pool of  Purchased  Receivables,  enforceable  against such
         Limited Partner in accordance  with the terms of such Deposited  Notice
         and the Partnership Agreement.

                  (h)  Limitations  on  Actions.  Vestar III is not aware of any
         event or condition that could (i) have a material adverse effect on its
         ability of Vestar III to perform its obligations  under this Repurchase
         Agreement,  (ii) render invalid or  unenforceable  any of the Deposited
         Notices  or  (iii)  otherwise  modify  the  obligations  of  any of the
         Partners  and/or any Person  becoming  Partners  subsequent to the date
         hereof which arise upon the due delivery  of, and as  contemplated  by,
         the Deposited Notices.

                  (i) Remaining Capital  Commitments.  As of each Purchase Date,
         the  aggregate  Remaining  Capital  Commitment  Balance of all  Limited
         Partners  will  equal or exceed  the sum of (i) the  maximum  aggregate
         Reserved  Amount as of such date (after  giving effect to any purchased
         on such date)  plus (ii) all other  outstanding  indebtedness  or other
         obligations of Vestar III.

                  Vestar  III  agrees  that the  foregoing  representations  and
warranties  shall be deemed to have  been  made by Vestar  III on each  Purchase
Date.

                  11. Covenants.  Vestar III hereby covenants and agrees that so
 long as this Agreement is in effect.

                  (a)  Vestar  III will cause the  aggregate  Remaining  Capital
         Commitment  Balance of all Limited  Partners to equal or exceed the sum
         of (i) the aggregate  Reserved Amount plus (ii) all other  indebtedness
         or other obligations of Vestar III.

                  (b)  General  Partner.  Vestar III will cause (i) Vestar
        Associates III, L.P. to be the sole general partner of Vestar III at all
        times and (ii) Vestar Associates Corporation  III to be the sole general
        partner of the General Partner at all times.

                  (c) Plan Assets, etc. Vestar III shall either (i) be a venture
         capital  operating  company  within  the  meaning  of  the  Plan  Asset
         Regulations  or (ii)  satisfy  another  exception  under the Plan Asset
         Regulations  such that the assets of Vestar  III are not "plan  assets"
         within the meaning and as defined in the Plan Asset Regulations.

                  (d) Receipt of Vestar III Pursuant to the  Deposited  Notices.
         Immediately  upon  receipt  by Vestar III or any of its  Affiliates  of
         payment  by any  Limited  Partner  in  respect  of a  Deposited  Notice
         delivered by the Purchaser  pursuant to Section 8, Vestar III shall (i)
         notify the Purchaser in writing  specifying the Limited  Partner making
         such payment and the amount  thereof and (ii)  forward,  or cause to be
         forwarded, the funds representing such payment to the Purchaser.

                  (e)  Limitations  on  Actions.  Vestar  III shall not take any
         action  that  could (i)  render  invalid  or  unenforceable  any of the
         Deposited  Notices or (ii) otherwise  modify the  obligations of any of
         the Partners and/or any Person becoming Partners subsequent to the date
         hereof which arise upon the due delivery  of, and as  contemplated  by,
         the Deposited Notices.

                  12.  Severability.  Any provision of this Repurchase Agreement
which is prohibited  or  unenforceable  in any  jurisdiction  shall,  as to such
jurisdiction,   be   ineffective   to  the   extent  of  such   prohibition   or
unenforceability  without  invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

                  13.  Section  Headings.  The section  headings  used  in  this
Repurchase Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.

                  14. No Waiver; Cumulative Remedies. The Purchaser shall not by
any act (except by a written instrument  pursuant to Section 14 hereof),  delay,
indulgence,  omission or  otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any default or breach of any of the terms and
conditions hereof. No failure to exercise,  nor any delay in exercising,  on the
part of the Purchaser,  any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further  exercise  thereof or the exercise
of any other right,  power or privilege.  A waiver by the Purchaser of any right
or remedy  hereunder on any one occasion  shall not be construed as a bar to any
right or remedy which the Purchaser would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative,  may be exercised singly
or concurrently and are not exclusive of any rights or remedies provided by law.

                  15. Waivers and  Amendments;  Successors and Assigns.  None of
the terms or provisions  of this  Repurchase  Agreement may be waived,  amended,
supplemented or otherwise  modified except by a written  instrument  executed by
Vestar III and the Purchaser.  This  Repurchase  Agreement shall be binding upon
the  successors  and assigns of Vestar III and shall inure to the benefit of the
Purchaser and its successors and assigns. The Purchaser agrees that it shall not
assign its rights under this Repurchase Agreement nor shall it assign any rights
under any Purchased  Receivable  except that any such assignment may be made (i)
if a  Bankruptcy  Event shall have  occurred and be  continuing  with respect to
Great American,  Cluett  American,  the Seller or Vestar III or (ii) if any such
party shall be in default in the performance of any of its material  obligations
under the Receivables  Transfer Agreement,  the Receivables  Purchase Agreement,
the  Guaranty or this  Repurchase  Agreement or (iii) as a result of a change in
control, merger, consolidation or sale of all or substantially all the assets of
the Purchaser.

                  16.  GOVERNING LAW. THIS  REPURCHASE  AGREEMENT AND THE
OBLIGATIONS OF VESTAR III HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                  17.  Notices.  All  notices  by the  Purchaser  to Vestar  III
hereunder to be effective shall be in writing  (including by telecopy or telex),
and shall be deemed to have been duly given or made (n) when  delivered by hand,
(o) in the case of mail, three Business Days after deposit in the mail,  postage
prepaid, (p) in the case of telecopy notice, when received, or (q in the case of
telex notice,  when sent,  answerback  received,  addressed to Vestar III at its
address or transmission  number set forth under its signature below.  Vestar III
may change  its  address  and  transmission  numbers  by  written  notice to the
Purchaser.

                  18.   Waiver.    The   Purchaser   hereby    irrevocably   and
unconditionally  waives,  to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal  action or  proceeding  relating to
this  Repurchase  Agreement any special,  exemplary,  punitive or  consequential
damages;  provided that the waiver contained in this Section 12 shall not extend
to any  right  to claim or  recover  from  Vestar  III any  special,  exemplary,
punitive  or  consequential  damages  for which the  Purchaser  is liable to any
Person (other than an affiliate of such Purchaser).

                  19.  Acknowledgments.  Vestar III hereby acknowledges with
respect to the  transactions  contemplated  by the Purchase Documents that:

                  (a)  it has been advised by counsel in the negotiation,
         execution and delivery of this Repurchase Agreement;

                  (b) the Purchaser has no fiduciary  relationship to Vestar III
         or the Seller and the  relationship  between the Purchaser,  on the one
         hand,  and Vestar III or the Seller,  on the other hand, is solely that
         of debtor and creditor; and

                  (c) no joint venture exists among the Seller and the Purchaser
or among Vestar III and the Purchaser.

                  20.   WAIVERS OF JURY TRIAL. VESTAR III AND THE PURCHASER
HEREBY IRREVOCABLY AND UNCONDITIONALLY  WAIVES TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS REPURCHASE AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.

                  IN WITNESS  WHEREOF,  Vestar III has  caused  this  Repurchase
Agreement to be duly executed and delivered in New York,  New York by its proper
and duly authorized officer as of the day and year first above written.

                                         VESTAR CAPITAL PARTNERS III, L.P.

                                         By:  Vestar Associates III, L.P., its
                                                  General Partner

                                         By:  Vestar Associates Corporation III,
                                                  its General Partner

                                         By:
                                         Name:
                                         Title:

                                         Address for Notices:

                                         Vestar Capital Partners
                                         245 Park Avenue, 41st Floor
                                         New York, NY 10067
                                         Attention: General Counsel

                                         Acknowledged By:

                                         BANC OF AMERICA COMMERCIAL
                                         CORPORATION

                                         By:
                                         Name:
                                         Title:

<PAGE>

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