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Exhibit 10(r)(r)    
    

         

  

 
 

HEWLETT-PACKARD COMPANY
  ‹PLAN›
  LONG-TERM PERFORMANCE CASH AWARD AGREEMENT
  2005 Program (May 2005—April 2008)    
    

        THIS AGREEMENT, dated ‹GRANT DATE› ("Grant Date") between HEWLETT-PACKARD COMPANY, a
Delaware corporation ("Company"), and ‹EMPNO› ‹NAME> (the "Employee"), is entered into as follows: 

 
 

WITNESSETH:    
    

        WHEREAS, the Company has established the ‹PLAN› ("Plan"), a copy of which is available at
the Stock Incentive Program Web Site at: http://persweb.corp.hp.com/comp/employee/program/sip/stok_opt.htm or by written request to the Company
Secretary, and which Plan is made a part hereof; and 

        WHEREAS,
the HR and Compensation Committee of the Board of Directors of the Company or its delegate(s) (the "Committee") has determined that the Employee shall be granted a cash award
agreement ("Agreement") under the Plan as hereinafter set forth; 

        NOW
THEREFORE, the parties hereby agree that the Company grants the Employee a cash award underlying this Agreement ("Cash Award") of [Insert merge field for currency
symbol][Insert merge field for amount] subject to the terms and conditions set forth herein. 

	1.
	This
Agreement is granted under and pursuant to the Plan and is subject to each and all of the provisions thereof.

	2.
	Vesting
Schedule. 

The
Employee's Cash Award shall vest on the third anniversary of the Grant Date; provided that the Employee satifies the milestones and performance conditions set forth in paragraph 3 below, as
determined by the Committee. Notwithstanding the foregoing, the Employee must remain in the employ of the Company on a continuous, full-time basis through the close of business on the
third anniversary of the Grant Date, for such Cash Award to vest, subject to paragraphs 6-9 of this Agreement. The period of time between the Grant Date and the date the Employee's
Cash Award becomes vested is referred to herein as the "Restriction Period." 

	3.
	Milestones
and Performance Conditions

	(a)
	The
milestones and performance conditions associated with the Cash Award have been established by the Committee, and are set forth in Appendix A attached to this Agreement.

	(b)
	Milestones

	(1)
	Milestone
Periods: The amount of the Cash Award credited in accordance with paragraph 5 is determined after the end of each prescribed period. Period 1 shall be the
six-month period ending on October 31, 2005. Period 2 shall be the twelve-month period ending on October 31, 2006. Period 3 shall be the twelve-month period
ending on October 31, 2007. Period 4 shall be the six-month period ending on April 30, 2008. 

	(2)
	Crediting
of Cash Award

	•
	If
100% of the associated milestone are achieved for each of the following periods, then the respective percentages of the Cash Award to be credited in accordance with
paragraph 5 below are as follows:

	•
	Periods
1 and 4—17% for each respective period; and

	•
	Periods
2 and 3—33% for each respective period.

	•
	If
the Threshold amounts of the associated milestones are achieved for each of the following periods, then the respective percentages of the Cash Award to be credited in
accordance with paragraph 5 below are as follows:

	•
	Periods
1 and 4—8.5% for each respective period; and

	•
	Periods
2 and 3—16.5% for each respective period.

	•
	If
the Aspirational amounts of the associated milestones are achieved for each of the following periods, then the respective percentages of the Cash Award to be credited in
accordance with paragraph 5 below are as follows:

	•
	Periods
1 and 4—25.5% for each respective period; and

	•
	Periods
2 and 3—49.5% for each respective period.

	•
	If
greater than 90%, but less than 100%, of the associated milestones are achieved at the end of the applicable period, then the percentage of the Cash Award that will be
credited in accordance with paragraph 5 below will be determined on a linear scale relative to the proportion of Target achieved, with adjustments to reflect the length of time in the
applicable period.

	•
	If
greater than 100% of the associated milestones are achieved at the end of the applicable period, then the percentage of the Cash Award that will be credited in accordance
with paragraph 5 below will be determined on a linear scale relative to the proportion of Aspirational achieved, with adjustments to reflect the length of time in the applicable period;
provided, however, that such percentage cannot exceed 150%.

	•
	If
less than 90% of the associated milestones are achieved, nothing will be credited. 

The
total amount credited at the end of the Restriction Period is the "Conditional Payout". 

	(c)
	Following
the completion of Period 4, with respect to the Cash Award and if the Employee remains employed by the Company, subject to paragraphs 6-9 of this Agreement, then
the Conditional Payout will be adjusted by a modifier to be determined by the Committee based on the performance conditions set forth on Appendix A. The modifier will be calculated as indicated
on Appendix A with respect to the Restriction Period. Notwithstanding the foregoing, the modifier will be equal to zero if the minimum threshold indicated on Appendix A is not met,
resulting in no payout under this Agreement, and the modifier cannot exceed 2.

	4.
	Restrictions.

	(a)
	The
Employee's Cash Award granted hereunder may not be sold, pledged or otherwise transferred until vested in accordance with paragraph 2.

	(b)
	Subject
to paragraphs 6-9 of this Agreement, if the Employee's employment with the Company is terminated at any time prior to the expiration of the Restriction Period,
this Agreement granted hereunder shall terminate and any interest in the Cash Award shall be forfeited by the Employee, and full ownership will be retained by the Company. 

	5.
	Credits. 

As
milestones are achieved, the applicable portion of the Cash Award, as set forth in paragraph 3(b), shall be credited in the Employee's name. Such credited amounts shall increase at a rate of
3.54%, compounded annually, which is the AFR for May 2005. The credited amounts and any additional amounts, shall be paid by the Company to the Employee, subject to the application of the
modifier as set forth in paragraph 3(c); provided, however, that the terms and conditions set forth in this Agreement are fulfilled. Notwithstanding the foregoing, a portion of the Cash Award
shall be surrendered in payment of required withholding taxes in accordance with paragraph 10 below, unless the Company establishes alternative procedures for the payment of required
withholding taxes. 

The
Company is under no obligation to transfer amounts credited to any trust or escrow account, and the Company is under no obligation to secure any amount credited by any specific assets of the
Company or any other asset in which the Company has an interest. This Plan shall not be construed to require the Company to fund any of the benefits provided hereunder nor to establish a trust for
such purpose. The Company may make such arrangements as it desires to provide for the payment of the Cash Award, including, but not limited to, the establishment of a rabbi trust or such other
equivalent arrangements as the Company may decide. No such arrangement shall cause the Plan to be a funded plan within the meaning of Title I of ERISA, nor shall any such arrangement change the nature
of the obligation of the Company or the rights of the Employees under the Plan as provided in this Agreement. Neither the Employee nor his or her estate shall have any rights against the Company with
respect to any portion of the Cash Award except as a general unsecured creditor. No Employee has an interest in his or her Cash Award until the Employee actually receives a payout. The Employee's
rights in the Cash Award shall be no greater than the rights of any other unsecured general creditor of the Company. Credited amounts of the Cash Award hereunder shall for all purposes be part of the
general funds of the Company. Any payout to an Employee of amounts credited is not due, nor is such payout ascertainable, until determined by the Committee. 

	6.
	Retirement
of the Employee. 

If
the Employee retires after attaining 55 years of age with 15 years of service to the Company or 65 years of age or age under local law without regard to service, in accordance
with the Company's retirement policy, the Employee shall receive a pro rata amount of the Cash Award determined by multiplying the total Cash Award due after such Cash Award is vested at the end of
the Restriction Period by a fraction equal to the number of whole months elapsed between the Grant Date and the Employee's retirement, divided by the number of whole months between the Grant Date and
the date the Cash Award would have vested in accordance with paragraph 2 above, payable at the end of such period. The Company's obligation to deliver the pro rata amount due under the Cash
Award is subject to the condition that for the entire Restriction Period: 

	(a)
	The
Employee shall render, as an independent contractor and not as an employee, such advisory or consultative services to the Company as shall reasonably be requested by the Company,
consistent with the Employee's health and any other employment or other activities in which such Employee may be engaged;

	(b)
	The
Employee shall not render services for any organization or engage directly or indirectly in any business which, in the opinion of the Company, competes with or is in conflict with
the interests of the Company;

	(c)
	The
Employee shall not, without prior written authorization from the Company, disclose to anyone outside the Company, or use in other than the Company's business, any confidential
information or material relating to the business of the Company, either during or after employment with the Company; and 

	(d)
	The
Employee shall disclose promptly and assign to the Company all right, title and interest in any invention or idea, patentable or not, made or conceived by the Employee during
employment by the Company, relating in any manner to the actual or anticipated business, anything reasonably necessary to enable the Company to secure a patent where appropriate in the United States
and in foreign countries.

	7.
	Total
and Permanent Disability of the Employee. 

In
the event of total and permanent disability of the Employee, the Employee shall receive a pro rata amount of the Cash Award determined by multiplying the total Cash Award due after such Cash Award
is vested at the end of the Restriction Period by a fraction equal to the number of whole months elapsed between the Grant Date and the Employee's termination date due to the total and permanent
disability, divided by the number of whole months between the Grant Date and the date the Cash Award would have vested in accordance with paragraph 2 above, payable at the end of such period.
Any unpaid but vested portion of the Cash Award shall be paid to the Employee if legally competent or to a legally designated guardian or representative if the Employee is legally incompetent. 

	8.
	Death
of the Employee. 

In
the event of the Employee's death prior to the end of the Restriction Period, the Employee's estate or designated beneficiary shall receive a pro rata amount of the Cash Award determined by
multiplying the amount of the Cash Award due on the date vested at the end of the Restriction Period by a fraction equal to the number of whole months elapsed between the Grant Date and the Employee's
death, divided by the number of whole months between the Grant Date and the date the Cash Award would have vested in accordance with paragraph 2 above, payable at the end of such period. In the
event of the Employee's death after the vesting dates but prior to the payment of cash, said cash shall be paid to the Employee's estate or designated beneficiary. 

	9.
	Workforce
Reduction. 

In
the event the Employee is placed in a workforce reduction program approved by the Board of Directors or its delegate(s), the Employee shall receive a pro rata amount of the Cash Award determined by
multiplying the total Cash Award due after such Cash Award is vested at the end of the Restriction Period by a fraction equal to the number of whole months elapsed between the Grant Date and the
Employee's termination date due to workforce reduction, divided by the number of whole months between the Grant Date and the date the Cash Award would have vested in accordance with paragraph 2
above, payable at the end of such period. 

	10.
	Taxes.

	(a)
	The
Employee shall be liable for any and all taxes, including withholding taxes, arising out of this grant of the Agreement or the vesting of the Cash Award hereunder. The Employee
authorizes the Company, its Affiliates and Subsidiaries (as defined in the Plan), which are qualified to deduct tax at source, to deduct all applicable required withholding taxes and social security
contributions from the Cash Award prior to remittance to the Employee, and, if necessary from the Employee's compensation. The Employee agrees to pay any amounts that cannot be satisfied from wages or
other cash compensation, to the extent permitted by law.

	(b)
	The
Company will assess its requirements regarding tax, social insurance, payroll tax, payment on account or other tax-related withholding ("tax-related
items") withholding and reporting in connection with this grant or the vesting of the Cash Award hereunder. These requirements may change from time to time as laws or interpretations change.
Regardless of any action the Company or Employee's employer (the "Employer") takes with respect to any tax-related items, the Employee acknowledges and agrees that the ultimate liability
for any and all tax-related items is and remains the Employee's responsibility and liability and that the Company (i) makes no representations nor undertakings regarding the
treatment of any 

tax-related
items in connection with any aspect of the Cash Award, including the grant or vesting; and (ii) does not commit to structure the terms or the grant or any aspect of the
Cash Award to reduce or eliminate the Employee's liability regarding tax-related items. 

	11.
	By
accepting the grant of this Agreement, the Employee acknowledges and agrees that: (i) the Plan is established voluntarily by the Company, it is discretionary in nature and
may be modified, amended, suspended or terminated by the Company at any time unless otherwise provided in the Plan or this Agreement; (ii) the grant of this Agreement is voluntary and
occasional and does not create any contractual or other right to receive future grants of cash awards, or benefits in lieu of cash awards, even if cash awards have been granted in the past;
(iii) all decisions with respect to future grants, if any, will be at the sole discretion of the Company; (iv) the Employee's participation in the Plan shall not create a right to
further or continued employment with the Employer and shall not interfere with the ability of the Employer to terminate the Employee's employment relationship at any time with or without cause and it
is expressly agreed and understood that employment is terminable at the will of either party, insofar as permitted by law; (v) the Employee is participating voluntarily in the Plan,
(vi) the Cash Award is an extraordinary, voluntary and discretionary item of compensation which is outside the scope of the Employee's contractual remuneration and/or employment contract, if
any; (vii) the Cash Award is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination,
redundancy, end of service payments, bonuses, service awards, pension or retirement benefits or similar payments, except where required by law or Company policy; (viii) in the event that the
Employee is not an employee of the Company, the Cash Award will not be interpreted to form an employment contract or relationship with the Company, and furthermore, the Cash Award will not be
interpreted to form an employment contract with the Employer or any Subsidiary or Affiliate of the Company; (ix) the future value of the Cash Award is unknown and cannot be predicted with
certainty; (x) in consideration of the grant of the Cash Award, no claim or entitlement to compensation or damages shall arise from termination of the Cash Award or diminution in value of the
Cash Award resulting from termination of the Employee's employment by the Company or the Employer (for any reason whatsoever and whether or not in breach of local labor laws) and the Employee
irrevocably releases the Company and the Employer from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen,
then, by accepting the terms of this Agreement, the Employee shall be deemed irrevocably to have waived any entitlement to pursue such claim; (xi) notwithstanding any terms or conditions of the
Plan to the contrary, in the event of involuntary termination of the Employee's employment (whether or not in breach of local labor laws), the Employee's right to receive awards or vest in awards
under the Plan, if any, will terminate effective as of the date that the Employee is no longer actively employed and will not be extended by any notice period mandated under local law (e.g., active
employment would not include a period of "garden leave" or similar period pursuant to local law); furthermore, in the event of involuntary termination of employment (whether or not in breach of local
labor laws); the Committee shall have the exclusive discretion to determine when Employee is no longer actively employed for purposes of the Cash Award (xii) the vesting of the Cash Award
ceases upon termination of employment for any reason except as may otherwise be explicitly provided in the Plan document or this Agreement; (xiii) that this Agreement has been granted to the
Employee in the Employee's status as an employee of the Employer; and (xiv) the Employee has no right or interest in any amount held in Escrow, and such amount is not earned, unless the
Committee determines that a payout is due at the end of the Restriction Period.

	12.
	The
Employee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Employee's personal data as described in this
document by and among, as applicable, the Employer, and the Company and its Subsidiaries and Affiliates for the exclusive purpose of implementing, administering and managing the Employee's
participation in the Plan. The Employee understands that the Company, its Affiliates, its Subsidiaries and the Employer hold certain personal information about the Employee, including, but not limited
to, name, home address and telephone number, date of birth, social security number, social insurance 

number
or other identification number, salary, nationality, job title, any cash or shares of stock or directorships held in the Company, details of this Agreement or any other entitlement to cash or
shares of stock awarded, canceled, purchased, exercised, vested, unvested or outstanding in the Employee's favor for the purpose of implementing, managing and administering the Plan ("Data"). The
Employee understands that the Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in the
Employee's country or elsewhere and that the recipient country may have different data privacy laws and protections than the Employee's country. Employee understands that he may request a list with
the names and addresses of any potential recipients of the Data by contacting the local human resources representative. The Employee authorizes the recipients to receive, possess, use, retain and
transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Employee's participation in the Plan, including any requisite transfer of such Data, as
may be required for the administration of the Plan, to a third party with whom the Employee may elect to deposit any cash or shares of stock acquired pursuant to the Plan. The Employee understands
that Data will be held only as long as is necessary to implement, administer and manage participation in the Plan. The Employee understands that he may, at any time, review Data, require any necessary
amendments to it or refuse or withdraw the consents herein, in any case without cost, by contacting the Company in writing. The Employee understands that withdrawing consent may affect the Employee's
ability to participate in the Plan. For more information on the consequences of refusing to consent or withdrawing consent, the Employee understands that he may contact an HP local human resources
representative. 

	13.
	The
Employee agrees to receive copies of the Plan, the Plan prospectus and other Plan information, including information prepared to comply with laws outside the United States, from
the Stock Incentive Program Web Site referenced above and stockholder information, including copies of any annual report, proxy and Form 10-K, from the investor relations section of
the HP web site at www.hp.com. The Employee acknowledges that copies of the Plan, Plan prospectus, Plan information and stockholder information are
available upon written request to the Company Secretary. 

The
Plan is incorporated herein by reference. The Plan and this Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all
prior undertakings and agreements of the Company and the Employee with respect to the subject matter hereof, and may not be modified adversely to the Employee's interest except by means of a writing
signed by the Company and the Employee. This Agreement is governed by the laws of Delaware. 

	14.
	Miscellaneous.

	(a)
	The
parties agree to execute such further instruments and to take such action as may reasonably be necessary to carry out the intent of this Agreement.

	(b)
	Any
notice required or permitted hereunder shall be given in writing and shall be deemed effectively given upon delivery to the Employee at his address then on file with the Company.

	(c)
	The
Committee shall have the discretion to increase or decrease cash payout subject to this Agreement for those Employees who terminate employment in situations covered by paragraphs
6-9 above during the Restriction Period, and for exceptional circumstances, except that such payout cannot be increased for Covered Employees as defined in Section 162(m) of the
Internal Revenue Code of 1986, as amended. 

	15.
	The
provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions
shall nevertheless be binding and enforceable. 

	

 	
 	
HEWLETT-PACKARD COMPANY
	

 	
 	

By	

 Mark V. Hurd

CEO and President
	

 	
 	

By	

 Ann O. Baskins

Senior Vice President, General Counsel and Secretary

RETAIN THIS AGREEMENT FOR YOUR RECORDS  

 
 

APPENDIX A    
    

PERFORMANCE CONDITIONS

Total Stockholder Return (TSR)  

        The following multiplier will be applied to the Conditional Payout at the end of the Restriction Period, depending on the Company's three-year average
performance as compared to the three-year average of the S&P 500 beginning on May 1, 2005: 

	 
	 	TSR percentile of the three-year

average of the S&P 500
	 	Multiplier

	Below Threshold	 	 	 	 
	Threshold	 	 	 	 
	Target	 	 	 	 
	Aspirational	 	 	 	 

        The
multiplier is linearly applied between threshold and target, and target and aspirational. 

MILESTONES

Period [NO.]: [DATES]  

	 
	 	Cash Flow
	 	Amount credited

	Below Threshold	 	 	 	 
	Threshold	 	 	 	 
	Target	 	 	 	 
	Aspirational	 	 	 	 

Please
note that future milestones will be posted to the website at:

"http://persweb.corp.hp.com/comp/employee/program/tr/hrcomm/ltpc_table.htm" 

QuickLinks

Exhibit 10(r)(r)

HEWLETT-PACKARD COMPANY ‹PLAN› LONG-TERM PERFORMANCE CASH AWARD AGREEMENT 2005 Program (May 2005—April 2008)

WITNESSETH

APPENDIX AUnassociated Document

    
      
        

      

    Exhibit
      4.10

    

     

    AMENDMENT
      NO. 1 TO CREDIT AGREEMENT

     

    THIS
      AMENDMENT NO. 1 TO CREDIT AGREEMENT
      (this
“Amendment
      Agreement”)
      is
      made and entered into as of September 1, 2005, by and among KELLWOOD
      COMPANY,
      a
      Delaware corporation (the “Borrower”),
      EACH
      OF THE GUARANTORS
      (as
      defined in the Credit Agreement), EACH
      LENDER SIGNATORY HERETO,
      and
BANK
      OF AMERICA, N.A.,
      as the
      administrative agent for the Lenders (in such capacity, the “Administrative
      Agent”)
      and an
      L/C Issuer.

     

    W
      I T N E S S E T H:

     

    WHEREAS,
      the
      Administrative Agent, the lenders party thereto (collectively, the “Lenders”
      and
      individually each a “Lender”)
      and
      the Borrower have entered into that certain Credit Agreement dated as of October
      20, 2004 (as hereby and from time to time amended, restated, amended and
      restated, extended, supplemented, modified or replaced, the “Credit
      Agreement”;
      capitalized terms used herein but not otherwise defined herein shall have the
      meanings assigned to such terms in the Credit Agreement), pursuant to which
      the
      Lenders have agreed to make and have made available to the Borrower a revolving
      credit facility in an aggregate principal amount of $400,000,000;
      and

     

    WHEREAS,
      each of
      the Guarantors has entered into a Guaranty pursuant to which it has guaranteed
      the payment and performance of the obligations of the Borrower under the Credit
      Agreement and the other Loan Documents; and

     

    WHEREAS,
      the
      Borrower has requested, among other things, that certain terms of the Credit
      Agreement and the Exhibits thereto be amended, each in the manner set forth
      herein, and the Administrative Agent and the Lenders, subject to the terms
      and
      conditions contained herein, are willing to effect such amendments on the terms
      and conditions contained in this Amendment Agreement; 

     

    NOW,
      THEREFORE,
      in
      consideration of the premises and further valuable consideration, the receipt
      and sufficiency of which is hereby acknowledged, the parties hereby agree as
      follows:

     

    1.           
      Amendments
      to Credit Agreement.
      Subject
      to the terms and conditions set forth herein, the Credit Agreement is hereby
      amended as follows:

     

    (a)          
      Section
      1.01
      of
      the Credit
      Agreement is hereby amended to add the following definitions to such Section,
      in
      alphabetical order:

    

    “Borrowing
      Base”
      means,
      at any time until the Borrower has achieved Debt Ratings of BB+ and Ba1 from
      both S&P and Moody’s, respectively, after September 1, 2005, an amount equal
      to the sum of (i) eighty-five percent (85%) of the Net Amount of Eligible
      Accounts; plus
      (ii)
      sixty percent (60%) of the 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    book value
      of Eligible Inventory; plus
      (iii)
      forty percent (40%) of the book value of Eligible Raw Materials Inventory;
      it
      being understood, however, that the calculation of items
      (b),
      (c),
      (d),
      (e),
      (f)
      and
(i)
      under
      the definition of “Eligible Accounts” (including the Net Amount of Eligible
      Accounts attributable thereto) and items
      (f)
      and
(g)
      under
      the definition of “Eligible Inventory” may, where necessary given the
      limitations of the operational and accounting practices of the Borrower on
      the
      Closing Date, be made on the basis of good faith estimates or historical
      percentages; provided,
      however,
      that to
      the extent the Administrative Agent at any time has any reasonable basis to
      believe that any estimate or percentage is materially incorrect or does not
      accurately reflect the quantity to be calculated in any material respect, then
      the Administrative Agent may, upon written notice to the Borrower and the
      Lenders, (i) adjust the calculation of the Borrowing Base to the extent
      necessary render such estimate or percentage correct and accurate in its
      reasonable discretion and/or (ii) perform, or cause to be performed, an audit
      of
      the Accounts and Inventory of the Borrower and its Subsidiaries at the
      Borrower’s expense.

     

    “Borrowing
      Base Certificate”
      means a
      certificate by a Responsible Officer of the Borrower, substantially in the
      form
      of Exhibit
      I
      (or
      another form acceptable to the Administrative Agent) setting forth the
      calculation of the Borrowing Base, including a calculation of each component
      thereof, all in such detail as shall be reasonably satisfactory to the
      Administrative Agent.

    

    “Collateral”
      means
      all of the working assets of the Loan Parties subject to a Lien in favor of
      the
      Administrative Agent, for the benefit of the Secured Parties, pursuant to any
      Security Instrument.

     

    “Eligible Accounts”
      means
      the Accounts of the Borrower and its Subsidiaries other than any Account:

     

    (a)    with
      respect to which more than 90 days have elapsed since the date of the original
      invoice therefor or which more than 60 days have elapsed since the original
      due
      date; 

     

    (b)    with
      respect to which any one or more of the following events has occurred to the
      Account Debtor on such Account: the filing by or against the Account Debtor
      of a
      request or petition for liquidation, reorganization, arrangement, adjustment
      of
      debts, adjudication as a bankrupt, winding-up, or other relief under the
      bankruptcy, insolvency, or similar laws of the United States, any state or
      territory thereof, or any foreign jurisdiction, now or hereafter in effect;
      the
      institution by or against the Account Debtor of any other type of insolvency
      proceeding (under the bankruptcy laws of the United States or otherwise) or
      of
      any formal or informal proceeding for the dissolution or liquidation of,
      settlement of claims against, or winding up of affairs of, the Account Debtor;
      the sale, assignment, or transfer of all or any material part of the assets
      of
      the Account Debtor; the nonpayment generally by the Account Debtor of its debts
      as they become due; or the cessation of the business of the Account

     

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

     

    Debtor
      as
      a going concern, or fifty percent (50%) or more of the aggregate Dollar amount
      of outstanding Accounts owed at such time by the Account Debtor thereon is
      classified as ineligible under clause
      (a)
      above;

     

    (c)    owed
      by
      an Account Debtor which: (i) does not maintain its chief executive office in
      the
      United States of America
      or
      Canada (other than the Province of Newfoundland);
      or
(ii)
      is
      not organized under the laws of the United States of America or Canada or any
      state or province thereof; or (iii) is the government of any foreign country
      or
      sovereign state, or of any state, province, municipality, or other political
      subdivision thereof, or of any department, agency, public corporation, or other
      instrumentality thereof; except to the extent that such Account is secured
      or
      payable by a letter of credit satisfactory to the Administrative Agent in its
      discretion;

     

    (d)    owed
      by
      an Account Debtor which is an Affiliate or employee of the Borrower or any
      Subsidiary; 

     

    (e)    with
      respect to which either the perfection, enforceability, or validity of a
      security interest in such Account would be governed by or subject to any
      federal, state, or local statutory requirements other than those of the UCC;
      

     

    (f)    which
      represents a sale on a bill-and-hold, guaranteed sale, sale and return, sale
      on
      approval, consignment, or other repurchase or return basis; 

     

    (g)    which
      is
      evidenced by a promissory note or other instrument or by chattel paper;

     

    (h)    which
      arises out of a sale not made in the ordinary course of the Borrower’s or the
      applicable Subsidiary’s business; 

     

    (i)    with
      respect to which the goods giving rise to such Account have not been shipped
      and
      delivered to and accepted by the Account Debtor or the services giving rise
      to
      such Account have not been performed by the Borrower or a Subsidiary, and,
      if
      applicable, accepted by the Account Debtor, or the Account Debtor revokes its
      acceptance of such goods or services; 

     

    (j)    owed
      by
      an Account Debtor whose debt is not rated or is rated lower than BBB or Baa2
      by
      S&P or Moody’s, respectively, and which is obligated to the Borrower or any
      Subsidiary respecting Accounts the aggregate unpaid balance of which exceeds
      fifteen percent (15%) of the aggregate unpaid balance of all Accounts owed
      to
      the Borrower or any Subsidiary at such time by all of the Borrower’s and its
      Subsidiaries’ Account Debtors, but only to the extent of such
      excess;

     

    (k)    which
      is
      subject to a security interest in favor of any Person (other than KFR in
      connection with the Factoring Program) or which is transferred in connection
      with any Permitted Securitization
      Transaction;

     

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

     

    (l)    which,
      after the Security Effective Date, is not subject to a first priority perfected
      Lien in favor of the Administrative Agent for the benefit of the Secured
      Parties; or

     

    (m)    which
      arises out of a sale by any
      discontinued operations (in accordance with GAAP) of any Subsidiary pursuant
      to
      the Restructuring Plan.

     

    If
      any
      Account at any time ceases to be an Eligible Account, then such Account shall
      promptly be excluded from the calculation of Eligible Accounts.

     

    “Eligible
      Inventory”
      means
      all Inventory:

     

    (a)    that
      is
      owned by the Borrower or its Subsidiaries; 

     

    (b)    with
      respect to which the validity, perfection and enforcement of a security interest
      would be governed solely by the UCC and which is not subject to any other Lien
      whatsoever; 

     

    (c)    that
      consists of finished goods generally made available for sale by the Borrower
      and
      its Subsidiaries in the ordinary course of business; 

     

    (d)    that
      is
      in good condition, is merchantable and is salable at prices approximating at
      least cost in the normal course of the Borrower’s and its Subsidiaries’
      business;

     

    (e)    that
      is
      located inside the United States of America or Canada;

     

    (f)    that,
      if
      in-transit from vendors or suppliers, has the support of a commercial or
      documentary letter of credit issued by an established financial institution
      regularly engaged in the issuance of such letters of credit; 

     

    (g)    that
      is
      not placed on consignment; 

     

    (h)    that,
      after the Security Effective Date, is subject to a first priority perfected
      Lien
      in favor of the Administrative Agent for the benefit of the Secured Parties;
      and

     

    (i)    that
      is
      not Inventory attributed to any discontinued operations (in accordance with
      GAAP) of any Subsidiary pursuant to the Restructuring Plan.

     

    If
      any
      Inventory at any time ceases to be Eligible Inventory, such Inventory shall
      promptly be excluded from the calculation of Eligible Inventory. 

     

    “Eligible
      Raw Materials Inventory”
      means
      Inventory consisting of raw materials which would otherwise constitute Eligible
      Inventory if it were finished goods. If any Inventory at any time ceases to
      be
      Eligible Raw Materials Inventory, such Inventory shall promptly be excluded
      from
      the calculation of Eligible Raw Materials Inventory.

     

    
      
        
        

      

      
        -
          4
          -

        
          

        

      

      
        
        

      

    

     

    “Net
      Amount of Eligible Accounts”
      means,
      at any time, the gross amount of Eligible Accounts less sales, excise or similar
      taxes, and less returns, discounts, claims, credits and allowances accrued
      rebates, offsets, deductions, counterclaims, disputes and other defenses of
      any
      nature at any time issued, owing, granted, outstanding, available or
      claimed.

     

    “Pricing
      Consolidated Leverage Ratio”
      means,
      as of any date of determination, the ratio of (a) Consolidated Funded
      Indebtedness as of such date
      to
(b)
      Consolidated EBITDA for the period of the four fiscal quarters most recently
      ended.

    

    “Restructuring
      Plan”
      means
      the restructuring plan of the Borrower announced on July 27, 2005.

     

    “Secured
      Parties”
      means,
      collectively, with respect to each of the Security Instruments, the
      Administrative Agent, the Lenders and such other Persons for whose benefit
      the
      Lien thereunder is conferred, as therein provided.

     

    “Security
      Agreement”
      means
      the Security Agreement in form and substance reasonably acceptable to the
      Administrative Agent and made by the Borrower and the Guarantors in favor of
      the
      Administrative Agent for the benefit of the Secured Parties providing for a
      lien
      on Inventory, Accounts, proceeds (including cash) and deposit accounts into
      which collections of Accounts are deposited, as supplemented from time to time
      by the execution and delivery of Security Agreement Joinder Agreements pursuant
      to Section
      6.15,
      as the
      same may be otherwise supplemented, amended, modified or amended and
      restated.

     

    “Security
      Effective Date”
      has the
      meaning specified in Section
      6.15.
      

     

    “Security
      Instruments”
      means,
      collectively or individually as the context may indicate, the Security Agreement
      (including the Security Joinder Agreements) and all other agreements (including
      control agreements), instruments and other documents, whether now existing
      or
      hereafter in effect, pursuant to which Borrower or any other Person shall grant
      or convey to the Administrative Agent, for the benefit of the Secured Parties,
      a
      Lien in, or any other Person shall acknowledge any such Lien in, personal
      property as security for all or any portion of the Obligations, any other
      obligation under any Loan Document, as any of them may be amended, modified
      or
      supplemented from time to time.

     

    “Security
      Joinder Agreement”
      means
      each Security Joinder Agreement, substantially in the form thereof attached
      to
      the Security Agreement, executed and delivered by a Guarantor or any other
      Person to the Administrative Agent, for the benefit of the Secured Parties,
      pursuant to Section
      6.15.

    

    “Smart
      Shirts Credit Facility”
      means
      an up to $55,000,000 term and revolving credit facility entered into by, among
      others, Smart Shirts Limited, as borrower.

    

    
      
        
        

      

      
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          5
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    (b)    Section
      1.01
      of
      the Credit
      Agreement is hereby further amended to restate the definition of “Applicable
      Rate” in its entirety to read as follows:

    

    “Applicable
      Rate”
      means
      the following percentages per annum, based upon the Pricing Consolidated
      Leverage Ratio as set forth in the most recent Compliance Certificate received
      by the Administrative Agent pursuant to Section
      6.02(b):

    

    Applicable
      Rate

    

    
      	
              Pricing

              Level

            	
              Pricing
                Consolidated 

              Leverage
                Ratio

            	
              Facility
                

              Fee

            	
              Eurocurrency
                

              Rate
                + 

              Standby
                Letters of 

              Credit
                

            	
              Commercial

              Letters
                of

              Credit

            
	
              1

            	
              Less
                than or equal to

              1.25:1

            	
              .150%

            	
              .600%

            	
              .250%

            
	 	 	 	 	 
	
              2

            	
              Less
                than or equal to

              1.75:1
                but greater than

              1.25:1

            	
              .175%

            	
              .825%

            	
              .250%

            
	 	 	 	 	 
	
              3

            	
              Less
                than or equal to

              2.50:1
                but greater than

              1.75:1

            	
              .200%

            	
              1.05%

            	
              .300%

            
	 	 	 	 	 
	
              4

            	
              Less
                than or equal to

              3.25:1
                but greater than

              2.50:1

            	
              .250%

            	
              1.25%

            	
              .350%

            
	 	 	 	 	 
	
              5

            	
              Greater
                than 3.25:1

            	
              .300%

            	
              1.45%

            	
              .400%

            

    

    

    Any
      increase or decrease in the Applicable Rate resulting from a change in the
      Pricing Consolidated Leverage Ratio shall become effective as of the first
      Business Day immediately following the date a Compliance Certificate is
      delivered pursuant to Section
      6.02(b);
      provided,
      however,
      that if
      a Compliance Certificate is not delivered when due in accordance with such
      Section, then Pricing Level 5 shall apply as of the first Business Day after
      the
      date on which such Compliance Certificate was required to have been delivered.
      Subject to the preceding sentence, the Applicable Rate in effect from September
      1, 2005 through the date of delivery of the Compliance Certificate required
      by
Section
      6.02
      for the
      fiscal quarter ending July 31, 2005 shall be determined based upon Pricing
      Level
      5.

    

    (c)    Section
      1.01
      of
      the Credit
      Agreement is hereby further amended to restate the definition of “Consolidated
      Leverage Ratio” in its entirety to read as follows:

    

    “Consolidated
      Leverage Ratio”
      means,
      as of any date of determination, the ratio of (a) for the measuring period
      through and including the fiscal quarter of the Borrower ending January 31,
      2007, (i)(A) Consolidated Funded Indebtedness as of such date less
      (B) all
      cash and cash equivalents domiciled in the United States

     

    
      
        
        

      

      
        -
          6
          -

        
          

        

      

      
        
        

      

    

     

    for
      the
      account of the Borrower or any of its Material Domestic Subsidiaries in excess
      of $100,000,000
      to
(ii)
      Consolidated EBITDA for the period of the four fiscal quarters most recently
      ended, and (b) for the measuring period commencing with the fiscal quarter
      of
      the Borrower ending April 30, 2007 and continuing thereafter, (i) Consolidated
      Funded Indebtedness as of such date
      to
(ii)
      Consolidated EBITDA for the period of the four fiscal quarters most recently
      ended.

    

    (d)    Section
      1.01
      of
      the Credit
      Agreement is hereby further amended to restate the definition of “Consolidated
      Net Income” in its entirety to read as follows:

    

    “Consolidated
      Net Income”
      means,
      for any period of computation thereof, the gross revenues from operations of
      the
      Borrower and its Subsidiaries (including payments received by the Borrower
      and
      its Subsidiaries of (i) interest income, and (ii) dividends and distributions
      made in the ordinary course of their businesses by Persons in which investment
      is permitted pursuant to this Agreement and not related to an extraordinary
      event), less
      all
      operating and non-operating expenses of the Borrower and its Subsidiaries
      including taxes on income and actual charges incurred in connection to the
      Restructuring Plan in an amount not to exceed in the aggregate either (a)
      $225,000,000 as incurred on a pre-tax basis or (b) $155,000,000 as incurred
      on
      an after-tax basis, all determined on a consolidated basis in accordance with
      GAAP and subject to Acquisition Adjustments; but excluding (for all purposes
      other than compliance with Section
      7.13(a)
      hereof)
      as income: (i) net gains and net losses on the sale, conversion or other
      disposition of capital assets, (ii) net gains and net losses on the
      acquisition, retirement, sale or other disposition of capital stock and other
      securities of the Borrower or its Subsidiaries, (iii) net gains on the
      collection of proceeds of life insurance policies, (iv) any write-up of any
      asset, and (v) any other net gain or credit of an extraordinary nature as
      determined in accordance with GAAP.

    

    (e)    Section
      1.01
      of
      the Credit
      Agreement is hereby further amended to restate the definition of “Convertible
      Debenture Guaranty” in its entirety to read as follows:

    

    “Convertible
      Debenture Guaranty”
      means
      that certain Guaranty Agreement (and including any guaranty joinder agreement
      excluded pursuant to the terms thereof) dated as of March 15, 2005 by and among
      the Guarantors and Union Bank of California, N.A., as trustee for the holders
      of
      the Convertible Debentures, as amended or supplemented from time to
      time.

    

    (f)    Section
      1.01
      of
      the Credit
      Agreement is hereby further amended to restate the definition of “Factoring
      Program” in its entirety to read as follows:

    

    “Factoring
      Program”
      collectively means: (i) the purchase of accounts receivable from time to time
      by
      KFR from the Borrower and/or certain of its Subsidiaries pursuant to various
      Receivables Purchase and Sale Agreements dated as of January 31, 2000,
      as
      amended or modified from time to time, and (ii) the

     

    
      
        
        

      

      
        -
          7
          -

        
          

        

      

      
        
        

      

    

     

    performance
      of collection and other services by Kellwood Financial Services, Inc. (formerly
      known as Kellwood Shared Services Inc.), for the benefit of KFR pursuant to
      various Receivables Collection and Administrative Services Agreements dated
      as
      of January 31, 2000, as amended or modified from time to time.

    

    (g)    Section
      1.01
      of
      the Credit
      Agreement is hereby further amended to restate the definition of “Indenture
      Guaranty” in its entirety to read as follows:

    

    “Indenture
      Guaranty”
      means
      those certain Guaranty Agreement(s) (and including any guaranty joinder
      agreement executed pursuant to the terms thereof) dated as of March 15, 2005
      by
      and among the Guarantors and JPMorganChase Bank, as trustee or any successor
      trustee, for the holders of those certain debt securities issued pursuant to
      the
      Indenture, as amended or supplemented from time to time.

    

    (h)    Section
      1.01
      of
      the Credit
      Agreement is hereby further amended to restate the definition of “Permitted
      Securitization Transaction” in its entirety to read as follows:

    

    “Permitted
      Securitization Transaction”
      means
      any Asset Securitization pursuant to Standard Securitization Undertakings
      providing working capital financing on terms that are more favorable to the
      Borrower and its Subsidiaries than would otherwise be available at that time;
      provided,
      (i) the
      Borrower and/or its Subsidiaries enters into such transaction or series of
      transactions with a Lender or an Affiliate thereof or a conduit administered
      thereby, and (ii) the obligations owed to third parties (including the net
      investment of such third parties in the assets transferred) with respect to
      such
      transaction shall not exceed $75,000,000 at any one time; and, provided,
      however,
      that
      such Asset Securitization shall be permitted only after the Borrower has
      achieved Debt Ratings of BB+ and Ba1 from both S&P and Moody’s after
      September 1, 2005 (and provided further
      that any
      such Asset Securitization may be incurred thereafter without regard to the
      Debt
      Rating of the Borrower).

    

    (i)    Section
      1.01
      of
      the Credit
      Agreement is hereby further amended to restate the definition of “Restricted
      Payment” in its entirety to read as follows:

    

    “Restricted
      Payment”
      means
      any dividend or other distribution (whether in cash, securities or other
      property) with respect to any capital stock or other Equity Interest of the
      Borrower or any Subsidiary, or any payment (whether in cash, securities or
      other
      property), including any sinking fund or similar deposit, on account of the
      purchase, redemption, retirement, acquisition, cancellation or termination
      of
      any such capital stock or other equity interest or of any option, warrant or
      other right to acquire any such capital stock or other equity interest;
provided
      that,
      actual payments made in connection with the $75,000,000 share repurchase program
      of the Borrower announced on July 27, 2005 shall be excluded from the meaning
      of
“Restricted Payment”.

     

    
      
        
        

      

      
        -
          8
          -

        
          

        

      

      
        
        

      

       

    

    (j)    Section
      2.01
      of
      the Credit
      Agreement is hereby amended to restate such Section in its entirety to read
      as
      follows:

    

    2.01 Committed
      Loans. Subject
      to the terms and conditions set forth herein, each Lender severally agrees
      to
      make loans (each such loan, a “Committed
      Loan”)
      to the
      Borrower in Dollars or in one or more Alternative Currencies from time to time,
      on any Business Day during the Availability Period, in an aggregate amount
      not
      to exceed at any time outstanding the amount of such Lender’s Commitment;
provided,
      however,
      that
      after giving effect to any Committed Borrowing, (i) the Total Outstandings
      shall
      not exceed the Aggregate Commitments, (ii) the aggregate Outstanding Amount
      of
      the Committed Loans of any Lender, plus
      such
      Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations
      shall not exceed such Lender’s Commitment, (iii) the aggregate Outstanding
      Amount of all Committed Loans and of all L/C Obligations denominated in
      Alternative Currencies shall not exceed the Alternative Currency Sublimit and
      (iv) the Total Outstandings shall not exceed the Borrowing Base, if applicable,
      calculated as of the date of the most recently delivered Borrowing Base
      Certificate. Within the limits of each Lender’s Commitment, and subject to the
      other terms and conditions hereof, the Borrower may borrow under this
Section
      2.01,
      prepay
      under Section
      2.04,
      and
      reborrow under this Section
      2.01.
      Committed Loans may be Base Rate Loans or Eurocurrency Rate Loans, as further
      provided herein.

    

    (k)   Section
      2.03(a)
      of
      the Credit
      Agreement is hereby amended to restate clause
      (i)
      thereof
      in its entirety to read as follows:

    

    (i) Subject
      to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in
      reliance upon the agreements of the Lenders set forth in this Section
      2.03,
      (1)
      from time to time on any Business Day during the period from the Closing Date
      until the Letter of Credit Expiration Date, to issue Letters of Credit
      denominated in Dollars or in one or more Alternative Currencies for the account
      of the Borrower or jointly for the account of the Borrower and a Designated
      Subsidiary, and to amend or extend Letters of Credit previously issued by it,
      in
      accordance with subsection
      (b)
      below,
      and (2) to honor drawings under the Letters of Credit; and (B) the Lenders
      severally agree to participate in Letters of Credit issued for the account
      of
      the Borrower or jointly for the account of the Borrower and a Designated
      Subsidiary and any drawings thereunder; provided
      that
      after giving effect to any L/C Credit Extension with respect to any Letter
      of
      Credit, (u) the Total Outstandings shall not exceed the Aggregate Commitments,
      (v) the Total Outstandings shall not exceed the Borrowing Base, if applicable,
      calculated as of the date of the most recently delivered Borrowing Base
      Certificate, (w) the aggregate Outstanding Amount of all Committed Loans and
      of
      all L/C Obligations denominated in Alternative Currencies shall not exceed
      the
      Alternative Currency Sublimit, (x) the aggregate Outstanding Amount of the
      Committed Loans of any Lender, plus
      such
      Lender’s Applicable Percentage of the

     

    
      
        
        

      

      
        -
          9
          -

        
          

        

      

      
        
        

      

    

     

    Outstanding
      Amount of all L/C Obligations shall not exceed such Lender’s Commitment, (y) the
      Outstanding Amount of the L/C Obligations with respect to standby Letters of
      Credit shall not exceed the Standby L/C Sublimit, and (z) the Outstanding Amount
      of the L/C Obligations with respect to commercial Letters of Credit shall not
      exceed the Commercial L/C Sublimit. Each request by the Borrower for the
      issuance or amendment of a Letter of Credit shall be deemed to be a
      representation by the Borrower that the L/C Credit Extension so requested
      complies with the conditions set forth in the proviso to the preceding sentence.
      Within the foregoing limits, and subject to the terms and conditions hereof,
      the
      Borrower’s ability to obtain Letters of Credit shall be fully revolving, and
      accordingly the Borrower may, during the foregoing period, obtain Letters of
      Credit to replace Letters of Credit that have expired or that have been drawn
      upon and reimbursed. All Existing Letters of Credit shall be deemed to have
      been
      issued pursuant hereto, and from and after the Closing Date shall be subject
      to
      and governed by the terms and conditions hereof. 

    

    (l)   Section
      2.04
      of
      the Credit
      Agreement is hereby amended to restate subsection
      (b)
      thereof
      in its entirety to read as follows:

            

          
      (b)    If
      the
      Administrative Agent notifies the Borrower at any time that the Total
      Outstandings at such time exceed either
      the
      Aggregate Commitments or Borrowing Base (the Borrowing Base to be calculated
      as
      of the date of the most recently delivered Borrowing Base Certificate), as
      applicable, then, within two Business Days after receipt of such notice, the
      Borrower shall prepay Loans and/or the Borrower shall Cash Collateralize the
      L/C
      Obligations in an aggregate amount sufficient to reduce such Outstanding Amount
      as of such date of payment to an amount not to exceed 100% of either the
      Aggregate Commitments or the Borrowing Base, as applicable; provided,
      however,
      that,
      subject to the provisions of Section
      2.03(g)(ii),
      the
      Borrower shall not be required to Cash Collateralize the L/C Obligations
      pursuant to this Section
      2.05(c)
      unless
      after the prepayment in full of the Loans the Total Outstandings exceed either
      the Aggregate Commitments or the Borrowing Base, as applicable.

    

    (m)    Section
      2.05
      of
      the Credit
      Agreement is hereby amended to restate such Section in its entirety to read
      as
      follows:

     

          2.05    Termination
      or Reduction of Commitments. The
      Borrower may, upon notice to the Administrative Agent, terminate the Aggregate
      Commitments, or from time to time permanently reduce the Aggregate Commitments;
      provided
      that (i)
      any such notice shall be received by the Administrative Agent not later than
      11:00 a.m. five Business Days prior to the date of termination or reduction,
      (ii) any such partial reduction shall be in an aggregate amount of $10,000,000
      or any whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall
      not terminate or reduce the Aggregate Commitments if, after giving effect
      thereto and to any concurrent prepayments hereunder, the Total Outstandings
      would exceed the Aggregate Commitments,

     

    
      
        
        

      

      
        -
          10
          -

        
          

        

      

      
        
        

      

    

     

    (iv)
      the
      Borrower shall not terminate or reduce the Aggregate Commitments if, after
      giving effect thereto and to any concurrent prepayments hereunder, the Total
      Outstandings would exceed the Borrowing Base, if applicable, calculated as
      of
      the date of the most recently delivered Borrowing Base Certificate, and (v)
      if,
      after giving effect to any reduction of the Aggregate Commitments, the
      Alternative Currency Sublimit, the Commercial L/C Sublimit or the Standby L/C
      Sublimit exceeds the Borrowing Base, if applicable, calculated as of the date
      of
      the most recently delivered Borrowing Base Certificate, such Sublimit shall
      be
      automatically reduced by the amount of such excess. The Administrative Agent
      will promptly notify the Lenders of any such notice of termination or reduction
      of the Aggregate Commitments. The amount of any such Aggregate Commitment
      reduction shall not be applied to the Alternative Currency Sublimit, the Standby
      L/C Sublimit or the Commercial L/C Sublimit unless otherwise specified by the
      Borrower. Any reduction of the Aggregate Commitments shall be applied to the
      Commitment of each Lender according to its Applicable Percentage. All fees
      accrued until the effective date of any termination of the Aggregate Commitments
      shall be paid on the effective date of such termination.

    

    (n)   Section
      6.02
      of
      the Credit
      Agreement is hereby amended to restate subsection
      (b)
      thereof
      in its entirety to read as follows:

     

     (b)    concurrently
      with the delivery of the financial statements referred to in Sections
      6.01(a)
      and
(b),
      a duly
      completed Compliance Certificate and, if applicable, a duly completed Borrowing
      Base Certificate as of the end of the immediately preceding fiscal quarter,
      each
      signed by a Responsible Officer; provided,
      however,
      that in
      the event that a Default or an Event of Default has occurred and is continuing,
      a Borrowing Base Certificate signed by a Responsible Officer shall also be
      so
      delivered at such additional times as determined by the Administrative
      Agent;

    

    (o)   Section
      6.15
      of
      the Credit
      Agreement is hereby amended to restate such Section in its entirety to read
      as
      follows:

    

    6.15 Security
      Agreement; Additional Subsidiary Guarantors.

     

    (a)   At
      any
      time until the Borrower has achieved Debt Ratings of BB+ and Ba1 from both
      S&P and Moody’s, respectively, after September 1, 2005, promptly, but in any
      event no later than ten Business
      Days, after the earlier to occur of (x) an Event of Default or (y) the Borrower
      having received a Debt Rating of BB- or below from S&P or Ba3 or below from
      Moody’s (the “Security
      Effective Date”),
      the
      Borrower shall, and shall cause each Guarantor to, deliver to the Administrative
      Agent each of the following, regardless if the Borrower has achieved Debt
      Ratings of BB+ and Ba1 from both S&P and Moody’s after the Security
      Effective Date:

     

    (i)    a
      Security Agreement duly executed by Borrower and each Guarantor (with all
      schedules thereto appropriately completed);

     

     

    
      
        
        

      

      
        -
          11
          -

        
          

        

      

      
        
        

      

    

     

    (ii)    UCC
      financing statements for filing in all places required by applicable law to
      perfect the Liens of the Administrative Agent for the benefit of the Secured
      Parties under the Security Instruments as a first priority Lien as to items
      of
      Collateral in which a security interest may be perfected by the filing of
      financing statements, and such other documents and/or evidence of other actions
      as may be necessary under applicable law to perfect the Liens of the
      Administrative Agent for the benefit of the Secured Parties under the Security
      Instruments as a first priority Lien in and to such other Collateral as the
      Administrative Agent may reasonably require; and

     

    (iii)    unless
      the Administrative Agent expressly waives such requirement, an opinion or
      opinions of counsel to each Loan Party and addressed to the Administrative
      Agent
      and each Lender as to the matters set forth concerning the Loan Parties and
      the
      Security Agreement (but excluding priority of the Liens granted therein) in
      form
      and substance reasonably acceptable to the Administrative Agent. 

    

    (b)   At
      any
      time after the Security Effective Date (if applicable), as soon as practicable
      but in any event within 30 days following the acquisition or creation of any
      Subsidiary that is a Material Domestic Subsidiary, cause to be delivered to
      the
      Administrative Agent:

     

    (i)    a
      Security Joinder Agreement duly executed by such Subsidiary (with all schedules
      thereto appropriately completed);

     

    (ii)    with
      respect to any Person that has executed a Security Joinder Agreement hereunder,
      Uniform Commercial Code financing statements naming such Person as “Debtor” and
      naming the Administrative Agent for the benefit of the Secured Parties as
“Secured Party”, in form, substance and number sufficient in the reasonable
      opinion of the Administrative Agent and its special counsel to be filed in
      all
      Uniform Commercial Code filing offices and in all jurisdictions in which filing
      is necessary or advisable to perfect in favor of the Secured Parties the Lien
      on
      the Collateral conferred under such Security Instrument to the extent such
      Lien
      may be perfected by Uniform Commercial Code filing; and

     

    (iii)    current
      copies of the documents of the types referred to in clauses
      (iii)
      and
(iv)
      of
Section
      4.01(a)
      of each
      such Subsidiary, all certified by the applicable Governmental Authority or
      appropriate officer as the Administrative Agent may elect, all in form, content
      and scope reasonably satisfactory to the Administrative Agent.

     

    (c)   Notify
      the Administrative Agent at the time that any Person becomes a Material Domestic
      Subsidiary (excluding any Securitization Entity), and promptly thereafter (and
      in any event within 30 days), cause such Person to

     

    
      
        
        

      

      
        -
          12
          -

        
          

        

      

      
        
        

      

    

     

    (i)
      become a Subsidiary Guarantor by executing and delivering to the Administrative
      Agent a Guaranty Joinder Agreement, and (ii) deliver to the Administrative
      Agent
      documents of the types referred to in clauses
      (iii)
      and
(iv)
      of
Section
      4.01(a)
      and
      favorable opinions of counsel to such Person (which shall cover, among other
      things, the legality, validity, binding effect and enforceability of the
      documentation referred to in clause
      (i)),
      all in
      form, content and scope reasonably satisfactory to the Administrative Agent.
      In
      addition, and notwithstanding anything contained above, in the event that any
      Person becomes party to the Indenture Guaranty or to the Convertible Debenture
      Guaranty and such Person has not at such date executed a Guaranty Joinder
      Agreement, the Borrower shall immediately notify the Administrative Agent
      thereof and cause such Person to immediately deliver to the Administrative
      Agent
      all documents required by clauses
      (i)
      and
(ii)
      above.

    

    (p)   Article
      VI
      of the
      Credit Agreement is hereby further amended by adding a new Section
      6.17
      to the
      end thereof, to read as follows:

     

    6.17    Further
      Assurances.
      At any
      time after the Security Effective Date, promptly upon request by the
      Administrative Agent (and in any event within 30 days of any such request),
      execute, acknowledge, deliver, record, re-record, file, re-file, register and
      re-register, any and all such further acts, deeds, conveyances, security
      agreements, financing statements and continuations thereof, termination
      statements, notices of assignment, transfers, certificates, assurances and
      other
      instruments as may reasonably require from time to time in order (a) to perfect
      a Lien on any assets in which a lien has been granted under the Security
      Instruments, (b) to carry out more effectively the purposes of this Agreement
      or
      any other Loan Document, (c) to subject to the Liens created by any of the
      Security Instruments any of the properties, rights or interests covered by
      any
      of the Security Instruments, (d) to perfect and maintain the validity,
      effectiveness and first priority of any of the Security Instruments and the
      Liens intended to be created thereby, and (e) to better assure, convey, grant,
      assign, transfer, preserve, protect and confirm to the Secured Parties the
      rights granted or now or hereafter intended to be granted to the Secured Parties
      under the Security Instruments or under any other document executed in
      connection therewith.

    

    (q)   Section
      7.01
      of the
      Credit Agreement is hereby amended by adding a new clause
      (n)
      thereof,
      with appropriate punctuation changes, to read as follows:

    

    (n)    Liens
      securing Indebtedness permitted by Section
      7.03(n).

    

    (r)   Section
      7.03
      of
      the Credit
      Agreement is hereby amended to restate subsection
      (l)
      thereof
      in its entirety to read as follows:

    

    (l)    other
      unsecured Indebtedness of any Loan Party provided
      that (A)
      such Indebtedness does not contain terms or conditions that are more restrictive
      than this Agreement or any other Loan Document, (B) no Default or Event of
      Default had occurred or was continuing at the time such Indebtedness
      was

     

    
      
        
        

      

      
        -
          13
          -

        
          

        

      

      
        
        

      

    

     

    incurred,
      (C) such Indebtedness is pari
      passu
      both
      structurally and contractually with the Indebtedness under the Loan Documents,
      (D) such Indebtedness does not have a maturity date which occurs earlier than
      six (6) months following the Maturity Date, (E) such Indebtedness does not
      contain any amortization provisions which are more rapid or occur more quickly
      than is customary in the marketplace, as reasonably determined by the
      Administrative Agent and the Borrower, (F) notice of the incurrence of such
      Indebtedness has been given to the Administrative Agent not less than ten (10)
      Business Days prior to such incurrence, and such notice includes calculations
      demonstrating compliance with the financial covenants in Section
      7.13,
      substantially in the form of a Compliance Certificate, and (G) such Indebtedness
      is incurred (i) prior to July 25, 2005 or (ii) on or after February 1, 2007;
      and

    

    (s)   Section
      7.03
      of the
      Credit Agreement is hereby further amended by adding a new clause
      (n)
      thereof,
      with appropriate punctuation changes, to read as follows:

    

    (n)    Indebtedness
      under the Smart Shirts Credit Facility in an amount not to exceed in the
      aggregate $55,000,000 at any time outstanding.

    

    (t)   Section
      7.05
      of the
      Credit Agreement is hereby amended by adding a new clause
      (o)
      thereof,
      with appropriate punctuation changes, to read as follows:

    

    (o)    Dispositions
      of property identified in the Restructuring Plan.

    

    (u)   Section
      7.07
      of
      the Credit
      Agreement is hereby amended to restate such Section in its entirety to read
      as
      follows:

    

    7.07    Restricted
      Payments. Declare
      or make, directly or indirectly, any Restricted Payment, or incur any obligation
      (contingent or otherwise) to do so, if immediately after giving effect to such
      proposed action, a Default or Event of Default would exist;
      provided,
      however,
      that,
      at any time through and including the fiscal quarter of the Borrower ending
      January 31, 2007 that the Consolidated Leverage Ratio is greater than or equal
      to 2.50 to 1.00, such Restricted Payments shall not exceed, in the aggregate,
      $75,000,000.

    

    (v)    Section
      7.11
      of
      the Credit
      Agreement is hereby amended to add a new sentence at the end of such Section
      to
      read as follows:

    

    For
      purposes of this Section
      7.11
      only,
“Contractual Obligations” shall not include any agreement, instrument or
      undertaking pursuant to the Smart Shirts Credit Facility.

    

    (w)    Section
      7.13
      of
      the Credit
      Agreement is hereby amended to restate such Section
      in its entirety to read as follows:

     

     

    
      
        
        

      

      
        -
          14
          -

        
          

        

      

      
        
        

      

       

    

    (a)    Consolidated
      Net Worth. Permit
      Consolidated Net Worth at any time to be less than the sum of (i)
      $546,500,000.00, (ii) an amount equal to 50% of the Consolidated Net Income
      earned in each full fiscal quarter ending after January 31, 2004 (with no
      deduction for a net loss in any such fiscal quarter) and (iii) an amount equal
      to 50% of the aggregate increases in Shareholders’ Equity of the Borrower and
      its Subsidiaries after the date hereof by reason of the issuance and sale of
      Equity Interests of the Borrower or any Subsidiary (other than issuances to
      the
      Borrower or a wholly-owned Subsidiary), including upon any conversion of debt
      securities of the Borrower into such Equity Interests and any exercise of
      outstanding options or warrants, less
      (iv) any
      reduction of intangible assets resulting from any impairment charge pursuant
      to
      FAS 142, which reduction shall not exceed, in the aggregate, $100,000,000 and
      less
      (v)
      actual charges incurred in connection to the Restructuring Plan in an amount
      not
      to exceed $155,000,000 on an after-tax basis.

    

    (b)    Consolidated
      Interest Coverage Ratio. Permit
      the Consolidated Interest Coverage Ratio to be less than (i) 2.50 to 1.00 at
      the
      end of each fiscal quarter of the Borrower commencing with the fiscal quarter
      ending immediately after the Closing Date and continuing through and including
      the fiscal quarter of the Borrower ending January 31, 2007, and (ii) 3.00 to
      1.00 at the end of each fiscal quarter of the Borrower commencing with the
      fiscal quarter of the Borrower ending April 30, 2007 and continuing
      thereafter.

    

    (c)    Consolidated
      Leverage Ratio.
      Permit
      the Consolidated Leverage Ratio at any time to be greater than (i) 3.25 to
      1.00
      for the measuring period commencing with the Closing Date and continuing through
      and including the fiscal quarter of the Borrower ending April 30, 2006, (ii)
      3.00 to 1.00 for the measuring period commencing with the fiscal quarter of
      the
      Borrower ending July 31, 2006 through and including the fiscal quarter of the
      Borrower ending January 31, 2007, and (iii) 3.25 to 1.00 commencing with the
      fiscal quarter of the Borrower ending April 30, 2007 and continuing
      thereafter.

    

    (x)   Section
      7.14
      of
      the Credit
      Agreement is hereby amended to restate such Section in its entirety to read
      as
      follows:

    

    7.14    Acquisitions.
      Enter
      into any agreement, contract, binding commitment or other arrangement providing
      for any Acquisition, or take any action to solicit the tender of securities
      or
      proxies in respect thereof in order to effect any Acquisition, other than
      Permitted Acquisitions;
      provided,
      however,
      that,
      until the Borrower has achieved Debt Ratings of BB+ and Ba1 from both S&P
      and Moody’s after September 1, 2005 (and continuing thereafter without regard to
      the Debt Rating of the Borrower), after giving effect to such Acquisition,
      the
      aggregate costs of Permitted Acquisitions incurred in any fiscal year of the
      Borrower (on a non-cumulative basis, with the effect that amounts not incurred
      in any fiscal year may not be carried forward to a subsequent period) shall
      not
      exceed (a) $75,000,000 of Non-Equity Consideration at any time that
      the

     

     

    
      
        
        

      

      
        -
          15
          -

        
          

        

      

      
        
        

      

    

     

    Consolidated
      Leverage Ratio (pro forma after giving effect to such Acquisition) is greater
      than or equal to 2.50 to 1.00, and (b) $150,000,000 of Non-Equity Consideration
      at any time that the Consolidated Leverage Ratio (pro forma after giving effect
      to such Acquisition) is less than 2.50 to 1.00.

    

    (y)   Section
      10.01
      of the
      Credit Agreement is hereby amended by adding a new clause
      (i)
      thereof,
      with appropriate punctuation changes, to read as follows:

     

    (i)    release
      all or substantially all of the Collateral without the written consent of each
      Lender;

    

    2.    Amendments
      to Exhibit.
      Subject
      to the terms and conditions set forth herein:

    

    (a)    Exhibit
      D of
      the
      Credit Agreement is hereby amended to restate such Schedule in its entirety
      as
      set forth on Annex
      I
      attached
      hereto; and

    

    (b)    The
      Exhibits to the Credit Agreement are hereby amended to add a new Exhibit
      I
      thereto,
      in alphabetical order, as set forth on Annex
      II
      attached
      hereto.

    

    3.    Consent
      of the Guarantors.
      Each
      Guarantor hereby consents, acknowledges and agrees to the amendments set forth
      herein and hereby confirms, reaffirms and ratifies in all respects the Guaranty
      to which such Guarantor is a party (including without limitation the
      continuation of such Guarantor’s payment and performance obligations thereunder
      upon and after the effectiveness of this Amendment Agreement and the amendments
      contemplated hereby) and the enforceability of such Guaranty against such
      Guarantor in accordance with its terms.

     

    4.    Full
      Force and Effect of Credit Agreement.
      Except
      as hereby specifically amended, modified or supplemented, the Borrower hereby
      acknowledges and agrees that the Credit Agreement and all of the other Loan
      Documents are hereby confirmed and ratified in all respects and shall remain
      in
      full force and effect according to their respective terms.

     

    5.    Representations
      and Warranties.
      The
      Borrower hereby certifies that after
      giving effect to this Amendment Agreement:

     

    (a)    The
      representations and warranties of (i) the Borrower contained in Article
      V
      of the
      Credit Agreement and (ii) each Loan Party contained in each other Loan Document
      or in any document furnished at any time under or in connection with the Credit
      Agreement or any other Loan Documents shall be true and correct on and as of
      the
      date hereof, except to the extent that such representations and warranties
      specifically refer to an earlier date, in which case they shall be true and
      correct as of such earlier date, and except that for purposes of Section
      4.02
      of the
      Credit Agreement, the representations and warranties contained in subsections
      (a)
      and
(b)
      of
Section
      5.05
      of the
      Credit Agreement shall be deemed to refer to the most recent statements
      furnished pursuant to clauses
      (a)
      and
(b),
      respectively, of Section
      6.01
      of the
      Credit Agreement;

     

    (b)    This
      Amendment Agreement has been duly authorized, executed and delivered by the
      Borrower and Guarantors party hereto and constitutes a legal, valid
      and

     

    
      
        
        

      

      
        -
          16
          -

        
          

        

      

      
        
        

      

    

     

    binding
      obligation of such parties, except as may be limited by general principles
      of
      equity or by the effect of any applicable bankruptcy, insolvency,
      reorganization, moratorium or similar law affecting creditors’ rights generally;
      and

     

    (c)    After
      giving effect hereto, no Default or Event of Default exists.

     

    6.    Conditions
      to Effectiveness.
      The
      effectiveness of this Amendment Agreement and the amendments to the Credit
      Agreement provided herein are subject to the satisfaction of the following
      conditions precedent: 

     

    (a)    twenty
      (20) original counterparts of this Amendment Agreement, duly executed by the
      Borrower, the Guarantors, the Administrative Agent and the Required
      Lenders;

     

    (b)    payment
      of (i) all reasonable out of pocket fees and expenses to date of counsel to
      the
      Administrative Agent incurred in connection with the Credit Agreement and the
      other Loan Documents and the execution and delivery of this Amendment Agreement
      to the extent invoiced prior to the date hereof; (ii) an
      upfront fee to each Lender executing this Amendment by 6:00 p.m. (New York,
      New
      York time) on September 1, 2005, such upfront fee for each such Lender’s own
      account, equal to ten basis points (10 “bps”) multiplied by
      each
      such Lender’s pro-rata portion of the Commitments immediately prior to the
      effective date of this Amendment
      Agreement; and (iii) all other fees agreed to be paid;

     

    (c)    an
      initial Borrowing Base Certificate as of April 30, 2005; and

     

    (d)    such
      other documents, instruments and certificates as reasonably requested by the
      Administrative Agent.

     

    Upon
      satisfaction of the conditions set forth in this Section
      6,
      this
      Amendment Agreement shall be effective as of the date hereof.

     

    7.    Counterparts.
      This
      Amendment Agreement may be executed in one or more counterparts, each of which
      shall be deemed an original but all of which together shall constitute one
      and
      the same instrument.

     

    8.    Governing
      Law.
      This
      Amendment Agreement shall in all respects be governed by, and construed in
      accordance with, the laws of the State of New York.

     

    9.    Enforceability.
      Should
      any one or more of the provisions of this Amendment Agreement be determined
      to
      be illegal or unenforceable as to one or more of the parties hereto, all other
      provisions nevertheless shall remain effective and binding on the parties
      hereto.

     

    10.        
      Successors
      and Assigns.
      This
      Amendment Agreement shall be binding upon and inure to the benefit of Borrower,
      Administrative Agent and each of the Guarantors and Lenders, and their
      respective successors, legal representatives, and assignees to the extent such
      assignees are permitted assignees as provided in Section
      10.06
      of the
      Credit Agreement.

     

    
      
        
        

      

      
        -
          17
          -

        
          

        

      

      
        
        

      

    

     

    11.    Expenses.
      Without
      limiting the provisions of Section
      10.04
      of the
      Credit Agreement, the Borrower agrees to pay all reasonable out of pocket costs
      and expenses (including without limitation reasonable legal fees and expenses)
      incurred before or after the date hereof by the Administrative Agent and its
      Affiliates in connection with the preparation, negotiation, execution, delivery
      and administration of this Amendment Agreement.

     

    [Signature
      pages follow.]

     

     

    
      
        
        

      

      
        -
          18
          -

        
          

        

      

      
        
        

      

    

     

    

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

    

    

    BORROWER:

     

    KELLWOOD
      COMPANY

     

     

    
      
        	 	By:	/s/ W. Lee Capps,
                III

      

      
        	 	Name:	W. Lee Capps, III

      

      
        	 	
                Title:

              	
                Chief
                  Operating Officer and Chief Financial
                  Officer

              

      

    

    

    

    

    GUARANTORS:

    

    AMERICAN
      RECREATION PRODUCTS, INC.

    BIFLEX
      INTERNATIONAL, INC.

    BRIGGS
      NEW YORK, INC.

    DORBY
      FROCKS, LTD.

    HALMODE
      APPAREL, INC.

    PHAT
      FASHIONS LLC

    PHAT
      LICENSING LLC

    SIERRA
      DESIGNS ACQUISITION CORPORATION

    

    

    
       

      
        
          	 	By:	/s/ W. Lee Capps,
                  III

        

        
          	 	Name:	W. Lee Capps, III

        

        
          	 	
                  Title:

                	
                  Senior
                    Vice President Finance

                

        

      

    

     

    
 

    COSTURA
      DOMINICANA, INC.

    GERBER
      CHILDRENSWEAR, INC.

    

      
         

        
          
            	 	By:	/s/ W. Lee Capps,
                    III

          

          
            	 	Name:	W. Lee Capps, III

          

          
            	 	
                    Title:

                  	
                    Senior
                      Vice President Finance and Chief

                    Financial
                      Officer

                  

          

        

      

    

    

     

     

    
      
        
        

      

      
        
          Kellwood
            Company

          Amendment No. 1 Signature Page

        

        
          

        

      

      
        
        

      

    

     

     

    GCI
      IP SUB, INC.

    KELLWOOD
      FINANCIAL RESOURCES, INC.

    KWD
      HOLDINGS, INC.

     

    
      
         

        
          
            	 	By:	/s/ W. Lee Capps,
                    III

          

          
            	 	Name:	W. Lee Capps, III

          

          
            	 	
                    Title:

                  	
                    President

                  

          

        

      

    GCW
      HOLDINGS, INC.

    

    
      
         

        
          
            	 	By:	/s/ Thomas H.
                    Pollihan

          

          
            	 	Name:	Thomas H. Pollihan

          

          
            	 	
                    Title:

                  	
                    Vice
                      President and General
                      Counsel

                  

          

        

      

    

    

    

    KORET
      OF CALIFORNIA, INC.

    NEW
      CAMPAIGN, INC.

    

    
      
         

        
          
            	 	By:	/s/ W. Lee Capps,
                    III

          

          
            	 	Name:	W. Lee Capps, III

          

          
            	 	
                    Title:

                  	
                    Vice
                      President
                      Finance

                  

          

        

      

    
       

      
        
          
          

        

        
          
            Kellwood
              Company

            Amendment No. 1 Signature Page

          

          
            

          

        

        
          
          

        

      

       

    

     

    BANK
      OF AMERICA, N.A.,
      as
      Administrative Agent

     

    
      
         

        
          
            	 	By:	/s/ Kimberly D.
                    Williams

          

          
            	 	Name:	Kimberly D. Williams

          

          
            	 	
                    Title:

                  	
                    Vice
                      President

                  

          

        

      

    

     

    
       

    

    BANK
      OF AMERICA, N.A., as
      a
      Lender and L/C Issuer 

     

    
      
         

        
          
            	 	By:	/s/ Douglas J.
                    Bolt

          

          
            	 	Name:	Douglas J. Bolt

          

          
            	 	
                    Title:

                  	
                    Vice
                      President

                  

          

        

      

    

    

    

    JPMORGAN
      CHASE BANK, as
      Syndication Agent and a Lender

     

    
      
         

        
          
            	 	By:	/s/  Jules
                    Panno

          

          
            	 	Name:	Jules Panno

          

          
            	 	
                    Title:

                  	
                    Vice
                      President

                  

          

        

      

    THE
      BANK OF NOVA SCOTIA, as
      Co-Documentation Agent and a Lender

     

    
      
         

        
          
            	 	By:	/s/  N. Bell

          

          
            	 	Name:	N. Bell

          

          
            	 	
                    Title:

                  	
                    Senior
                      Manager Loan
                      Operations

                  

          

        

      

    SUNTRUST
      BANK, as
      Co-Documentation Agent and a Lender

     

    
      
         

        
          
            	 	By:	/s/ Robert
                    Bugbee

          

          
            	 	Name:	Robert Bugbee

          

          
            	 	
                    Title:

                  	
                    Director

                  

          

        

      

    U.S.
      BANK NATIONAL ASSOCIATION, as
      Co-Documentation Agent and a Lender

     

    
      
         

        
          
            	 	By:	/s/ Veronica
                    Morrissette

          

          
            	 	Name:	Veronica Morrissette

          

          
            	 	
                    Title:

                  	
                    Vice
                      President

                  

          

        

      

    
       

      
        
          
          

        

        
          
            Kellwood
              Company

            Amendment No. 1 Signature Page

          

          
            

          

        

        
          
          

        

         

      

    

    

    WACHOVIA
      BANK NATIONAL ASSOCIATION, as
      Co-Documentation Agent and a Lender

     

    
      
         

        
          
            	 	By:	/s/ Susan T.
                    Gallagher

          

          
            	 	Name:	Susan T. Gallagher

          

          
            	 	
                    Title:

                  	
                    Vice
                      President

                  

          

        

      

    THE
      BANK OF NEW YORK, as
      a
      Lender

    

    
      
         

        
          
            	 	By:	/s/ Randolph E.J.
                    Medrano

          

          
            	 	Name:	Randolph E.J. Medrano

          

          
            	 	
                    Title:

                  	
                    Vice
                      President

                  

          

        

      

    

    

    

    HSBC
      BANK USA, NATIONAL ASSOCIATION, as
      a
      Lender

     

    
      
         

        
          
            	 	By:	/s/ Ignatius J.
                    Marotta

          

          
            	 	Name:	Ignatius J. Marotta

          

          
            	 	
                    Title:

                  	
                    First
                      Vice
                      President

                  

          

        

      

    MIZUHO
      CORPORATE BANK, LTD., as
      a
      Lender

     

    
      
         

        
          
            	 	By:	/s/ Raymond
                    Ventura

          

          
            	 	Name:	Raymond Ventura

          

          
            	 	
                    Title:

                  	
                    Senior
                      Vice
                      President

                  

          

        

      

    STANDARD
      CHARTERED BANK, as
      a
      Lender

     

    
      
         

        
          
            	 	By:	/s/ Robert K.
                    Reddington

          

          
            	 	Name:	Robert K. Reddington

          

          
            	 	
                    Title:

                  	
                    AVP/Credit
                      Documentation

                  

          

        

      

    UMB
      BANK, NATIONAL ASSOCIATION, as
      a
      Lender

     

    
      
         

        
          
            	 	By:	/s/ Cecil G. Wood

          

          
            	 	Name:	Cecil G. Wood

          

          
            	 	
                    Title:

                  	
                    Executive
                      Vice
                      President

                  

          

        

      

    
      
        
          
          

        

        
          
            Kellwood
              Company

            Amendment No. 1 Signature Page

          

          
            

          

        

        
          
          

        

      

    UNION
      BANK OF CALIFORNIA, N.A., as
      a
      Lender

    

    
      
         

        
          
            	 	By:	/s/ Matthew R.
                    Krajniak

          

          
            	 	Name:	Matthew R. Krajniak

          

          
            	 	
                    Title:

                  	
                    Assistant
                      Vice
                      President

                  

          

        

      

     

    NATIONAL
      CITY BANK OF THE MIDWEST, as
      a
      Lender

    

    
      
         

        
          
            	 	By:	/s/ Eric Hartman

          

          
            	 	Name:	Eric Hartman

          

          
            	 	
                    Title:

                  	
                    Vice
                      President

                  

          

        

      

     

    FIRST
      BANK, as
      a
      Lender

    

    
      
         

        
          
            	 	By:	/s/ Traci L.
                    Dodson

          

          
            	 	Name:	Traci L. Dodson

          

          
            	 	
                    Title:

                  	
                    Vice
                      President

                  

          

        

      

     

    CITIBANK,
      NA, as
      a
      Lender

    

    
      
         

        
          
            	 	By:	/s/ Stanley K.
                    Ross

          

          
            	 	Name:	Stanley K. Ross

          

          
            	 	
                    Title:

                  	
                    Director

                  

          

        

      

    

    ISRAEL
      DISCOUNT BANK OF NEW YORK, as
      a
      Lender

    

    
      
         

        
          
            	 	By:	/s/ Matilde Reyes

          

          
            	 	Name:	Matilde Reyes

          

          
            	 	
                    Title:

                  	
                    First
                      Vice
                      President

                  

          

        

      

     

    
      
         

        
          
            	 	By:	/s/ Howard
                    Weinberg

          

          
            	 	Name:	Howard Weinberg

          

          
            	 	
                    Title:

                  	
                    Senior
                      Vice President
                      I

                  

          

        

      

    

     

    
       

      
        
          
          

        

        
          
            Kellwood
              Company

            Amendment No. 1 Signature Page

          

          
            

          

        

        
          
          

        

      

    ANNEX
      I

    

    [see
      attached]

    

    
       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      D

     

    FORM
      OF COMPLIANCE CERTIFICATE

     

    Financial
      Statement Date: _______________, _____

     

    To: Bank
      of
      America, N.A., as Administrative Agent

     

    Ladies
      and Gentlemen:

     

    Reference
      is made to that certain Credit Agreement dated as of October 20, 2004 (as
      amended by Amendment No. 1 to Credit Agreement dated as of September 1, 2005
      and
      as amended, restated, extended, supplemented or otherwise modified in writing
      from time to time, the “Agreement”;
      the
      terms defined therein being used herein as therein defined), among KELLWOOD
      COMPANY, a Delaware corporation (the “Borrower”),
      the
      Lenders from time to time party thereto, and BANK OF AMERICA, N.A., as
      Administrative Agent and L/C Issuer.

     

    The
      undersigned Responsible Officer hereby certifies as of the date hereof that
      he/she is the _____________________________________________ of the Borrower,
      and
      that, as such, he/she is authorized to execute and deliver this Certificate
      to
      the Administrative Agent on the behalf of the Borrower, and that:

     

    [Use
      following paragraph 1 for fiscal year-end
      financial statements]

     

    1.    Attached
      hereto as Schedule
      1
      are the
      year-end audited financial statements required by Section
      6.01(a)
      of the
      Agreement for the fiscal year of the Borrower ended as of the above date,
      together with the report and opinion of an independent certified public
      accountant required by such section.

     

    [Use
      following paragraph 1 for fiscal quarter-end
      financial statements]

     

    1.    Attached
      hereto as Schedule
      1
      are the
      unaudited financial statements required by Section
      6.01(b)
      of the
      Agreement for the fiscal quarter of the Borrower ended as of the above date.
      Such financial statements fairly present the financial condition, results of
      operations and cash flows of the Borrower and its Subsidiaries in accordance
      with GAAP as at such date and for such period, subject only to normal year-end
      audit adjustments and the absence of footnotes.

     

    2.    The
      undersigned has reviewed and is familiar with the terms of the Agreement and
      has
      made, or has caused to be made under his/her supervision, a detailed review
      of
      the transactions and condition (financial or otherwise) of the Borrower during
      the accounting period covered by the attached financial statements.

     

    3.    A
      review
      of the activities of the Borrower during such fiscal period has been made under
      the supervision of the undersigned with a view to determining whether during
      such fiscal period the Borrower performed and observed all its Obligations
      under
      the Loan Documents, and 

     

     

    
      
        
        

      

      
        
          D-1

          Form of Compliance Certificate

        

        
          

        

      

      
        
        

      

       

    

    [select
      one:]

     

    [to
      the best knowledge of the undersigned during such fiscal period, the Borrower
      performed and observed each covenant and condition of the Loan Documents
      applicable to it.] 

     

    --or--

     

    [the
      following covenants or conditions have not been performed or observed and the
      following is a list of each such Default and its nature and
      status:]

     

    4.    The
      representations and warranties of (i) the Borrower contained in Article
      V
      of the
      Agreement and (ii) each Loan Party contained in each other Loan Document or
      in
      any document furnished at any time under or in connection with the Loan
      Documents, are true and correct on and as of the date hereof, except to the
      extent that such representations and warranties specifically refer to an earlier
      date, in which case they are true and correct as of such earlier date, and
      except that for purposes of this Compliance Certificate, the representations
      and
      warranties contained in subsections (a) and (b) of Section
      5.05
      of the
      Agreement shall be deemed to refer to the most recent statements furnished
      pursuant to clauses (a) and (b), respectively, of Section
      6.01
      of the
      Agreement, including the statements in connection with which this Compliance
      Certificate is delivered.

     

    5.    The
      financial covenant analyses and information set forth on Schedule
      2
      attached
      hereto are true and accurate on and as of the date of this
      Certificate.

     

    IN
      WITNESS WHEREOF,
      the
      undersigned has executed this Certificate as of _______________,
      ________

     

     

    KELLWOOD
      COMPANY

     

     

    By:_________________________________________
       

     

    Name:_______________________________________

     

    Title:________________________________________

     

    

    
      
         

        
          
            
            

          

          
            
              D-2

              Form of Compliance Certificate

            

            
              

            

          

          
            
            

          

           

        

      

    

    

    For
      the
      Quarter/Year ended ___________________ (“Statement
      Date”)

     

    

     

    SCHEDULE
      2 

    to
      the
      Compliance Certificate 

    ($
      in
      000’s)

     

     

    
      
        
          	I.	Section
                  7.13(a) - Consolidated Net Worth.	 
	 	 	 	 
	 	
                  A.

                	
                  Consolidated
                    Net Worth at Statement Date

                	$____________
	 	 	 	 
	 	
                  B.

                	
                  50%
                    of Consolidated Net Income for each full fiscal quarter ending
                    after
                    January 31, 2004 (no deduction for net losses):

                	
                  $____________

                
	 	 	 	 
	 	
                  C.

                	
                  50%
                    of increases in Shareholders’ Equity after date of Agreement from issuance
                    and sale of Equity Interests (other than issuances to the Borrower
                    or a
                    wholly-owned Subsidiary):

                	

                  $____________

                
	 	 	 	 
	 	
                  D.

                	
                  Any
                    reduction of intangible assets resulting from any impairment
                    charge
                    pursuant to FAS 142 (which reduction shall not exceed
                    $100,000,000):

                	
                  $____________

                
	 	 	 	 
	 	
                  E. 

                	
                  Charges
                    incurred in connection to the Restructuring (not to exceed
                    $155,000,000):

                	
                  $____________

                
	 	 	 	 
	 	
                  F. 

                	
                  $546,500,000
                    + Line I.B + I.C - I.D - I.E:

                	
                  $____________

                
	 	 	 	 
	 	
                  G. 

                	
                  Excess
                    (deficient) for covenant compliance (Line I.A - I.F):

                	$____________
	 	 	 	 
	II.	
                  Section
                    7.13(b) - Consolidated Interest Coverage Ratio.

                	 
	 	 	 	 
	 	
                  A.

                	
                  Consolidated
                    EBIT for any period ending on above date (“Subject
                    Period”):

                	
                   

                
	 	 	 	 
	 	 	
                  1.
                    Consolidated Net Income for Subject Period:

                	
                  $____________

                
	 	 	 	 
	 	 	
                  2.
                    Consolidated Interest Charges for Subject Period:

                	
                  $____________

                
	 	 	 	 
	 	 	
                  3.
                    Provision for income taxes for Subject Period:

                	
                  $____________

                
	 	 	 	 
	 	 	
                  4.
                    Consolidated EBIT (Lines II.A.1 + 2 + 3): 

                	
                  $____________

                
	 	 	 	 
	 	
                  B.

                	
                  Consolidated
                    Interest Charges for Subject Period:

                	$____________

        

         

        
           

          
            
              
              

            

            
              
                D-3

                Form of Compliance Certificate

              

              
                

              

            

            
              
              

            

          

        

         

         

        
          
            	 	
                    C.

                  	
                    Consolidated
                      Interest Coverage Ratio (Line II.A.8 ÷ Line II.B):

                  	
                    __________to
                      1

                  
	 	 	 	 
	 	 	
                    Minimum
                      Permitted:

                  	 
	 	 	 	 
	 	 	
                    Each
                      Statement Date through and including the fiscal quarter ending
                      January 31,
                      2007: 

                  	
                    2.50
                      to 1

                  
	 	 	 	 
	 	 	
                    Each
                      Statement Date for each fiscal quarter ending April 30, 2007
                      and
                      continuing thereafter:

                  	
                    3.00
                      to 1

                  
	 	 	 	 
	 	 	 	 
	III.	Section
                    7.13 (c) - Consolidated Leverage Ratio.	 
	 	 	 	 
	 	
                    A.

                  	
                    Consolidated
                      Funded Indebtedness at Statement Date:

                  	
                    $____________

                  
	 	 	 	 
	 	 	
                    1.    
                      For
                      each Statement Date through and including the fiscal quarter
                      ending
                      January 31, 2007, all cash and cash equivalents domiciled in
                      the
                      United
                      States for the account of the Borrower or any of its Material
                      Domestic
                      Subsidiaries in excess of $100,000,000:

                  	
                     

                    $____________

                  
	 	 	 	 
	 	 	2.   
                    For
                    each Statement Date through and including the fiscal quarter
                    ending
                    January 31, 2007, Line III.A - Line III.A.1:	
                    $____________

                  
	 	 	 	 
	 	B.	
                    Consolidated
                      EBITDA for any period ending on above date (“Subject
                      Period”):

                  	 
	 	 	 	 
	 	
                  	
                    1.
                      Consolidated Net Income for Subject Period:

                  	
                    $____________

                  
	 	 	 	 
	 	 	
                    2.
                      Consolidated Interest Charges for Subject Period:

                  	
                    $____________

                  
	 	 	 	 
	 	 	
                    3.
                      Provision for income taxes for Subject Period:

                  	
                    $____________

                  
	 	 	 	 
	 	 	
                    4.
                      Depreciation expenses for Subject Period:

                  	
                    $____________

                  
	 	 	 	 
	 	 	
                    5.
                      Amortization expenses for Subject Period:

                  	
                    $____________

                  
	 	 	 	 
	 	
                    C.

                  	
                    Consolidated
                      EBITDA (Lines III.B.1 + 2 + 3 + 4 + 5): 

                  	
                    $____________

                  
	 	 	 	 
	 	 	
                     [select
                      one:]

                  	 
	 	 	 	 
	 	
                    [D.

                  	
                    Consolidated
                      Leverage Ratio for each Statement Date through and including
                      the fiscal
                      quarter ending January 31, 2007 (Line III.A.2 ÷ Line
                      III.C):

                  	

                    ________to
                      1]

                  
	 	 	 	 
	 	
                    [D.

                  	
                    Consolidated
                      Leverage Ratio for each Statement Date commending with the
                      fiscal quarter
                      ending April 30, 2007 and continuing thereafter (Line III.A
÷ Line
                      III.C):

                  	_______to
                    1]
	 	 	 	 
	 	 	
                    Maximum
                      Permitted:

                  	 
	 	 	 	 
	 	 	
                    Each
                      Statement Date through and including the fiscal quarter ending
                      April 30,
                      2006: 

                  	
                    3.25
                      to 1

                  

          

          
             

            
              
                
                

              

              
                
                  D-4

                  Form of Compliance Certificate

                

                
                  

                

              

              
                
                

              

            

          

           

           

          
            	 	 	
                    Each
                      Statement Date for each fiscal quarter commencing with the
                      fiscal quarter
                      July 31, 2006 through and including January 31, 2007:

                  	
                    3.00
                      to 1

                  
	 	 	 	 
	 	 	
                    Each
                      Statement Date for each fiscal quarter ending April 30, 2007
                      and
                      continuing thereafter:

                  	
                    3.25
                      to 1

                  

          

        

      

    

     

     

    
       

      
        
          
          

        

        
          
            D-5

            Form of Compliance Certificate

          

          
            

          

        

        
          
          

        

    

    ANNEX
      II

    

    [see
      attached]

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

     

    EXHIBIT
      I

     

    FORM
      OF BORROWING BASE CERTIFICATE

     

    
      BORROWING
        BASE REPORT

    

     

    
      
        
          	For
                  the
                  Fiscal Quarter ending __________________:	 
	 	 	 	 
	 	
                  [Note:
                    All amount are shown in thousands of U.S. dollars unless otherwise
                    indicated.]

                	 	 
	 	 	 	 
	
                  I,
                    __________________, [office title] of
                    Kellwood Company, hereby certify that, to the best of my knowledge
                    and
                    belief, with respect to that certain Credit Agreement date as
                    of October
                    20, 2004 among the Borrower, the Lenders and Bank of America,
                    as
                    Administrative Agent (as amended by Amendment No. 1 to Credit
                    Agreement
                    dated as of September 1, 2005, as may be further amended, amended
                    and
                    restated, modified, or supplemented from time to time, the “Credit
                    Agreement”; all of the defined terms in the Credit Agreement are
                    incorporated herein by reference), the figures set forth below
                    are true
                    and correct.

                  
The
                    amounts reported herein are from the consolidated financial statements
                    of
                    Kellwood Company and its Subsidiaries for the fiscal quarter
                    ending on the
                    date set forth above.

                	 	 
	 	 	 	 
	 	
                  Accounts

                	 	 
	 	 	 	 
	
                  1.

                	
                  Accounts
                    net
                    of any reserves for doubtful or uncollectable accounts and less
                    sales,
                    excise or similar taxes, returns, discounts, claims, credits
                    and
                    allowances, accrued rebates, offsets and deductions

                	 	$____________
	 	 	 	 
	
                  2.

                	
                  (i)
                    Accounts
                    subject to any Lien 

                	 	
                  $____________

                
	 	 	 	 
	 	
                  (ii)
                    Accounts
                    which more than 90 days have elapsed since the date of the original
                    invoice therefor or which more than 60 days have elapsed since
                    the
                    original due date.

                	 	$____________
	 	 	 	 
	 	
                  (iii)
                    Accounts owing by an account debtor which is not solvent of is
                    subject to
                    any bankruptcy or insolvency proceeding or any kind, unless account
                    debtor
                    is classified as a debtor in possession or with respect to which
                    50% or
                    more of the aggregate amount of outstanding Accounts owing by
                    such account
                    debtor are ineligible under 2(ii) above

                	 	
                  $____________

                
	 	 	 	 
	 	
                  (iv)
                    Accounts
                    excluded from Eligible Accounts under clauses (d) through (i)
                    of the
                    definition of "Eligible Accounts" in Section 1.01 of the Credit
                    Agreement.

                	 	
                  $____________

                
	 	 	 	 
	 	
                  (v)
                    Accounts
                    over the 15% concentration limitation for account debtors who
                    are unrated
                    or are rated lower than BBB or Baa2 by S&P or Moody’s,
                    respectively.

                	 	
                  $____________

                
	 	 	 	 
	 	
                  (vi)
                    Sum of
                    Lines 2(i) through 2(v)

                	 	
                  $____________

                
	 	 	 	 
	
                  3.

                	
                  Net
                    Eligible
                    Accounts

                	 	 
	 	
                  (Line
                    1
                    less Line 2(vi))

                	 	
                  $____________

                

        

         

        
          
            
            

          

          
            I-1

            
              

            

          

          
            
            

          

        

         

         

        
          
            	
                    4.

                  	
                    Borrowing
                      Base Accounts

                  	 	 
	 	
                    (85%
                      of Net
                      Eligible Accounts)

                  	 	
                    $____________

                  
	 	 	 	 
	
                    Raw
                      Materials Inventory*

                  
	 	 	 	 
	
                    5.

                  	
                    Raw
                      materials
                      Inventory (based on a FIFO valuation, consistently applied)
                      owned by the
                      Borrower and its Subsidiaries less appropriate reserves determined
                      in
                      accordance with GAAP.

                  	 	
                    $____________

                  
	 	 	 	 
	
                    6.

                  	
                    (i)
                      Raw
                      Materials Inventory subject to any Lien or as to which perfection
                      of a
                      security interest would not be governed by the UCC;

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (ii)
                      Raw
                      Materials Inventory outside North America;

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (iii)
                      Raw
                      Materials Inventory that is not in good condition, is not merchantable
                      or
                      is not salable at prices approximating at least cost in the
                      normal course
                      of business;

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (iv)
                      Raw
                      Materials Inventory in-transit from vendors or suppliers, that
                      is not
                      supported by a commercial or documentary letter of credit;

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (v)
                      Raw
                      Materials Inventory that is placed on consignment

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (vi)
                      Total

                  	 	
                    $____________

                  
	 	 	 	 
	
                    7.

                  	
                    Eligible
                      Raw
                      Materials Inventory

                  	 	 
	 	
                    (Line
                      5
                      less Line 6(vi))

                  	 	
                    $____________

                  
	 	 	 	 
	
                    8.

                  	
                    Borrowing
                      Base Raw Materials Inventory 

                  	 	
                  
	 	
                    (40%
                      of
                      Eligible Raw Materials Inventory )

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    *
                      Without duplication 

                  	 	 
	 	 	 	 
	
                    Finished
                      Goods Inventory*

                  
	 	 	 	 
	
                    9.

                  	
                    Inventory
                      (based on a FIFO valuation, consistently applied) consisting
                      of all
                      finished goods inventory owned by the Borrower and its Subsidiaries
                      less
                      appropriate reserves determined in accordance with GAAP. 

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (i)
                      Inventory
                      subject to any Lien or as to which perfection of a security
                      interest would
                      not be governed by the UCC;

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (ii)
                      Inventory outside North America;

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (iii)
                      Inventory that is not in good condition, is not merchantable
                      or is not
                      salable at prices approximating at least cost in the normal
                      course of the
                      Loan Parties' business;

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (iv)
                      Inventory in-transit from vendors or suppliers, that is supported
                      by a
                      commercial or documentary letter of credit;

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (v)
                      Inventory
                      that is placed on consignment

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (vi)
                      Total

                  	 	
                    $____________

                  

          

           

          
            
              
              

            

            
              I-2

              
                

              

            

            
              
              

            

          

           

           

          
            	
                    10.

                  	
                    Eligible
                      Inventory

                  	 	 
	 	
                    (Line
                      9
                      less Line 10(vi))

                  	 	
                    $____________

                  
	 	 	 	 
	
                    11.

                  	
                    Borrowing
                      Base Inventory 

                  	 	 
	 	
                    (60%
                      of
                      Eligible Inventory)

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    *
                      Without duplication

                  	 	 
	 	 	 	 
	
                    Borrowing
                      Base

                  
	 	 	 	 
	
                    12.

                  	
                    Borrowing
                      Base assets

                  	 	 
	 	
                    (Line
                      4
                      plus Line 8 plus Line 11) 

                  	 	
                    $____________

                  
	 	 	 	 
	
                    13.

                  	
                    (i)
                      Aggregate
                      amount of outstanding Revolving Loans

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (ii)
                      Aggregate amount of outstanding Uncommitted Loans

                  	 	
                    $____________

                  
	 	 	 	 
	 	
                    (iii)
                      Aggregate amount of outstanding L/C Obligations 

                  	 	
                    $____________

                  
	 	 	 	 
	
                    14.

                  	
                    Total
                      deductions from the Borrowing Base assets

                  	 	 
	 	
                    (sum
                      of Line
                      13(i) through 13(iii))

                  	 	
                    $____________

                  
	 	 	 	 
	
                    15.

                  	
                    Remaining
                      availability (but not exceeding unused Aggregate Commitments):
                      The
                      difference of Line 12 minus Line 14.

                  	 	
                    $____________

                  

          

        

      

    

     

    

      IN
        WITNESS WHEREOF, the undersigned has executed this Borrowing Base Certificate
        as

      of
        _________________ , ____________.

      

      KELLWOOD
        COMPANY

      By:
        _____________________________

      Name:
        ___________________________

      Title:
        ____________________________

     

    
      
        
        

      

      
        I-3

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