THIS NOTE HAS NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR REGISTERED OR QUALIFIED  UNDER THE  SECURITIES  LAWS OF ANY STATE
AND MAY NOT BE SOLD OR TRANSFERRED  EXCEPT IN COMPLIANCE WITH THE ACT, THE RULES
AND REGULATIONS PROMULGATED THEREUNDER AND ANY APPLICABLE STATE SECURITIES LAWS.

PAYMENT OF ALL SUMS DUE UNDER THIS NOTE IS SUBJECT TO  SUBORDINATION  PROVISIONS
SET  FORTH IN A JUNIOR  SUBORDINATED  NOTE  AGREEMENT  AMONG  GENERAL  TEXTILES,
AMERICAN  ENDEAVOUR FUND LIMITED AND LONDON PACIFIC LIFE & ANNUITY COMPANY DATED
APRIL 30, 1998. A COPY OF THE JUNIOR  SUBORDINATED  NOTE AGREEMENT IS ON FILE AT
THE CORPORATION'S PRINCIPAL OFFICE.

$8,274,779.94     April 30, 1998

                            JUNIOR SUBORDINATED NOTE

         FOR VALUE RECEIVED,  General  Textiles,  a California  corporation (the
"Corporation")  hereby  promises to pay to the order of American  Endeavour Fund
Limited,  or its registered  assigns (the "Holder"),  the principal sum of eight
million two hundred seventy-four thousand seven hundred seventy-nine dollars and
ninety-four cents  ($8,274,779.94) which shall be due and payable to the Holder,
without interest thereon, as follows:

                    ------------------------ ----------------------------------
                    Principal Payment        Percentage of Original
                           Date              Principal Amount to be Paid
                    ------------------------ ----------------------------------
                    ------------------------ ----------------------------------
                    December 31, 1999        5.768644%
                    December 31, 2000        5.768644%
                    December 31, 2001        11.537287%
                    December 31, 2002        11.537287%
                    December 31, 2003        17.305931%
                    December 31, 2004        17.305931%
                    May 28, 2005             30.776276%
                                             ----------
                                             100.000000%
                    ------------------------ ----------------------------------
         All principal and interest (if any), which is not paid prior to May 28,
2005 will be due and payable on that day.

         This Note is one of the "Junior Subordinated Notes" referred to in, and
the Holder is entitled to all the rights,  preferences  and privileges set forth
in and other  benefits of, that certain  Junior  Subordinated  Note Agreement of
even date herewith by and among the Corporation, American Endeavour Fund Limited
and  London  Pacific  Life & Annuity  Company  (the  "Junior  Subordinated  Note
Agreement").  Capitalized terms used without  definition in this Note shall have
the meanings given to them in the Junior Subordinated Note Agreement.

<PAGE> 77

         This Note will not bear interest,  except that if any principal  amount
of this Note is not paid when due, then interest shall accrue on the entire Note
outstanding  from the date such sum is due until paid at the rate of ten percent
(10%) per annum,  compounded quarterly, or at the maximum rate permitted by law,
whichever is less. Interest will be calculated on the basis of the actual number
of days  elapsed in a year of 360 days from the last day on which  interest  was
paid (or if no interest has been paid,  from the day on which  interest began to
accrue).

         Each payment  with regard to this Note will be made in U.S.  Dollars in
cash or by wire transfer of funds which are  immediately  available at the place
of payment to the account of the Holder set forth in  Attachment  1 to this Note
or at any other  place of payment  that may be  designated  by the Holder in the
manner  described in the Note  Purchase  Agreement  at least two  Business  Days
before the day on which the payment is due.

         The  Corporation may prepay all or any portion of the principal of this
Note at any time without  prepayment  penalty or premium.  If this Note is to be
prepaid only in part, this Note shall be surrendered to the  Corporation  (with,
if the Corporation so requires,  due endorsement by, or a written  instrument of
transfer in form satisfactory to the Corporation duly executed by, the Holder or
its attorney duly authorized in writing),  and the Corporation shall execute for
the Holder a new Note equal in principal amount to the unprepaid  portion of the
Note surrendered and identical to the Note surrendered in all other respects.

         The Holder may assign,  pledge or  transfer  all or any portion of this
Note or such Holder's rights hereunder to the extent permitted by law, including
state and federal  securities laws. In the event of any such assignment,  pledge
or  transfer,  the assignee of this Note shall,  to the extent  provided in such
assignment,  pledge or transfer, be entitled to exercise the rights of a Holder.
Upon any transfer of all or any portion of this Note,  the Holder shall  present
this Note to the Corporation, accompanied by an executed form of assignment. The
Corporation  shall  thereupon  issue a new Note or Notes  to the  transferee  or
transferees  having a principal equal to the amount of this Note so transferred,
but otherwise in all other  respects  identical to this Note, and shall issue to
the Holder a new Note having a principal equal to the amount of this Note not so
transferred,  which Note shall  otherwise be identical to this Note in all other
respects.

         Except as otherwise  expressly provided in the Junior Subordinated Note
Agreement,  the Corporation waives presentment,  demand, notice, protest and all
other  demands  and  notices  in  connection  with  the  delivery,   acceptance,
performance,  default or  enforcement  of this Note and the Junior  Subordinated
Note Agreement.  In any action on this Note, the Holder or its assignee need not
produce or file the  original of this Note,  but need only file a  photocopy  of
this Note certified by the Holder or such assignee to be a true and correct copy
of this Note.

         The  Corporation  agrees  to pay  all  costs  and  expenses,  including
reasonable  attorneys' fees and expenses,  expended or incurred by the Holder in
connection  with  the  enforcement  of this  Note,  the  collection  of any sums
hereunder,  any actions for declaratory  relief in any way related to this Note,
or the protection or preservation of any rights of the Holder hereunder.

         IN WITNESS WHEREOF, the Corporation has caused this Junior Subordinated
Note to be  executed  by its duly  authorized  officer  as of the date set forth
above.

                   GENERAL TEXTILES, a California corporation

                                     By:/s/ Jonathan W. Spatz

                                     Its: Executive Vice President

<PAGE> 78

                                                             Attachment 1

                                Place of Payment

Wire transfer payments should be made to the account of the Holder at:

         Bank:             Bankers Trust New York
         ABA Number:       021001033
         Account Name:     Ansbacher (Jersey) Limited
         Account Number:   0416 3691
         Reference:        American Endeavour Fund, 600809 at David Preddy
                                    Family Bargain Centers