Exhibit 10.18


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                               TULTEX CORPORATION
                          CALIFORNIA SHIRT SALES, INC.
                              DOMINION STORES, INC.
                            TULTEX/T-SHIRT CITY, INC.
                                TRACK GEAR, INC.
                                   AKOM, LTD.
                           DOMINION DISTRIBUTION, INC.
                       LIGA MAYOR DE MEXICO, S.A. DE C.V.
                          TULTEX SUBSIDIARY (VA), INC.
                         TULTEX SUBSIDIARY (MASS), INC.
                               TULTEX CANADA, INC.
                              SWEATJET INCORPORATED
                           TULTEX INTERNATIONAL, INC.


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


                              MASTER COLLATERAL AND
                               SECURITY AGREEMENT

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



                                       TO
                   U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE


                             DATED AS OF MAY 7, 1999



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                                       TABLE OF CONTENTS

                                                                                          PAGE

<S>     <C>                                                                                 <C>
1.      PRELIMINARY STATEMENTS...............................................................1

2.      INTERPRETATION OF THIS AGREEMENT.....................................................2
        2.1    Terms Defined.................................................................2
        2.2    Section Headings and Table of Contents and Construction, etc.................12
        2.3    Separate Agreements..........................................................13
        2.4    Partial Invalidity...........................................................13
        2.5    Governing Law................................................................13

3.      COLLATERAL..........................................................................13
        3.1    Grant of Security Interest...................................................13
        3.2    Collateral-Related Rights and Undertakings...................................14
        3.3    Covenant Regarding Additional Real Estate and Leases.........................21
        3.4    Covenant Regarding Proprietary Rights........................................21
        3.5    Covenant Regarding Notices to the Agent......................................22
        3.6    Assignment of Claims Act.....................................................22

4.      REPRESENTATIONS AND WARRANTIES......................................................22
        4.1    Ownership of Collateral......................................................22
        4.2    Incorporation................................................................22
        4.3    Corporate Powers and Authorization...........................................23
        4.4    Governmental Filings; Registration...........................................23
        4.5    Enforceability...............................................................24
        4.6    Location of Inventory and Equipment, etc.....................................24
        4.7    Proprietary Rights...........................................................25
        4.8    Receivables..................................................................25
        4.9    Real Property................................................................25
        4.10   Year 2000 Compliance.........................................................25
        4.11   Accuracy of Preliminary Statements...........................................25

5.      DEFAULTS -- REMEDIES................................................................25
        5.1    Default Remedies.............................................................25
        5.2    Other Enforcement Rights.....................................................28
        5.3    Power of Attorney............................................................28
        5.4    Effect of Sale, etc..........................................................29
        5.5    Delay or Omission; No Waiver.................................................29
        5.6    Restoration of Rights and Remedies...........................................30
        5.7    Application of Proceeds......................................................30
        5.8    Cumulative Remedies..........................................................30
        5.9    Waivers by the Obligors......................................................30
        5.10   Consent......................................................................31
</TABLE>


                                              ii

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<TABLE>
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<S>     <C>                                                                                 <C>
6.      MISCELLANEOUS.......................................................................31
        6.1    Communications...............................................................31
        6.2    Waiver and Amendment.........................................................31
        6.3    Survival.....................................................................31
        6.4    Successors and Assigns.......................................................32
        6.5    Reproduction of Documents....................................................32
        6.6    Additional Parties...........................................................32
        6.7    Consistent with Indentures and Intercreditor Agreement.......................32
        6.8    Term of Agreement............................................................33
        6.9    Entire Agreement.............................................................33
        6.10   Execution in Counterpart.....................................................33

Annex 1        --     Principal Executive Offices; Location of Books and Records; Trade Names
Annex 2        --     Locations of Inventory and Equipment
Annex 3        --     Trademarks, Trade Names and Patents
Annex 4        --     Real Estate
Annex 5        -      Five Specified Real Properties
Annex 6        -      Nine Specified Real Properties

Exhibit A      --     Form of Acknowledgment and Agreement
</TABLE>



                                       iii

<PAGE>



                    MASTER COLLATERAL AND SECURITY AGREEMENT

        MASTER COLLATERAL AND SECURITY AGREEMENT (as may be amended, restated,
supplemented or otherwise modified from time to time, this "AGREEMENT"), dated
as of May 7, 1999, among each of TULTEX CORPORATION, a Virginia corporation
(together, with its successors and assigns, the "COMPANY"), CALIFORNIA SHIRT
SALES, INC., a Virginia corporation ("CALIFORNIA SHIRT"), DOMINION STORES, INC.,
a Virginia corporation ("DOMINION STORES"), TULTEX/T-SHIRT CITY, INC., a
Virginia corporation, TRACK GEAR, INC., a Virginia corporation, AKOM, LTD., a
Cayman Islands, B.W.I. corporation ("AKOM"), DOMINION DISTRIBUTION, INC., a
Virginia corporation, LIGA MAYOR DE MEXICO S.A. DE C.V., a Mexican corporation,
TULTEX SUBSIDIARY (VA) INC., a Virginia corporation formerly known as Logo
Athletic, Inc. and Logo 7, Inc. ("TULTEX VIRGINIA"), TULTEX SUBSIDIARY (MASS)
INC., a Massachusetts corporation formerly known as Universal Industries, Inc.
and as Logo Athletic/Headwear, Inc. ("TULTEX MASSACHUSETTS"), TULTEX CANADA,
INC., a Canadian corporation ("TULTEX CANADA"), SWEATJET INCORPORATED, a
Virginia corporation ("SWEATJET"), and TULTEX INTERNATIONAL, INC., a Virginia
corporation ("TULTEX INTERNATIONAL") (all of the foregoing (other than the
Company), together with their respective successors and assigns, referred to
herein, individually, as a "SUBSIDIARY GRANTOR," and, collectively, as the
"SUBSIDIARY GRANTORS;" the Company and the Subsidiary Grantors being
collectively referred to herein as the "OBLIGORS"), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as beneficiary and grantee ("US
BANK"), not in its individual corporate capacity but solely in its capacity as
security trustee (in its capacity as such security trustee, and together with
any successor or co-security trustee that becomes such in accordance with the
provisions of the Indentures (as hereinafter defined), the "TRUSTEE") for the
Noteholders (as hereinafter defined) pursuant to the Indentures. Capitalized
terms used herein, and not otherwise defined herein, have the respective
meanings ascribed thereto in Section 2.1; and interpretive provisions with
respect to certain other terms used herein are set forth in Section 2.2.

1.      PRELIMINARY STATEMENTS

        1.1 The Company, as issuer, AKOM, Dominion Stores, California Shirt,
Tultex International, Logo 7, Inc. (predecessor to Tultex Virginia), Universal
Industries, Inc. (predecessor to Tultex Massachusetts), Tultex Canada and
Sweatjet, as guarantors, and First Union National Bank of Virginia ("FIRST
UNION"), as trustee, entered into an indenture, dated as of March 15, 1995 (the
"1995 INDENTURE"), pursuant to which the Company was authorized to issue
$110,000,000 in Securities (as defined therein) and said guarantors were
obligated to Guarantee (as defined therein) any such issued Securities. The 1995
Indenture was amended by that certain First Supplemental Indenture, dated May 
1, 1997, and is being further amended by that certain Second Supplemental
Indenture, on or about the date hereof (the 1995 Indenture, as amended by said
First and Second Supplemental Indentures, is referred to herein as the "FIRST
INDENTURE").

        1.2 The Company, as issuer, AKOM, Dominion Stores, Logo 7, Inc.
(predecessor to Tultex Virginia), Universal Industries, Inc. (predecessor to
Tultex Massachusetts), Sweatjet, Tultex International and Tultex Canada, as
guarantors, and First Union, as trustee, entered into an indenture, dated as of
April 15, 1997 (the "1997 INDENTURE"), pursuant to which the Company was
authorized to issue $75,000,000 in Securities (as defined therein) and said
guarantors were obligated to Guarantee (as defined therein) any such issued
Securities. The 1997 Indenture was amended by that certain First Supplemental
Indenture, dated May


                                       1
<PAGE>


1, 1997, and is being further amended by that certain Second Supplemental
Indenture, on or about the date hereof (the 1997 Indenture, as amended by said
First and Second Supplemental Indentures, is referred to herein as the "SECOND
INDENTURE"; the First Indenture and the Second Indenture are collectively
referred to herein as the "INDENTURES," which term shall refer to such
Indentures, as each may be amended, supplemented, restated or otherwise modified
from time to time).

        1.3 Pursuant to the First Indenture the Company issued certain 10-5/8%
Senior Notes due March 15, 2005. Pursuant to the Second Indenture the Company
issued certain 9-5/8% Senior Notes due April 15, 2007. Such notes, as amended,
extended, renewed, consolidated or otherwise modified from time to time,
together with any and all notes that may be given from time to time in
substitution or replacement therefor, are collectively referred to herein as the
"NOTES." The Persons whose names appear on the register, maintained pursuant to
each Indenture for the registration and for the transfer and exchange of Notes,
as the registered owners from time to time of any of the Notes are collectively
referred to herein as the "NOTEHOLDERS."

        1.4 The indebtedness evidenced by the Notes bears interest and is
payable as provided in the Notes and the Indentures.

        1.5 To induce the Noteholders to enter into the Second Supplemental
Indenture which amends the 1995 Indenture and the Second Supplemental Indenture
which amends the 1997 Indenture, the Obligors have agreed to execute and deliver
this Agreement as security for the Secured Obligations.

        1.6 The Liens granted herein to the Trustee by each of the Obligors are
for the ratable benefit of the Noteholders, as provided in the Indentures.

        1.7 The Trustee is to act as trustee on behalf of the Noteholders, in
accordance with the terms of the Indentures, this Agreement and the other
Financing Documents.

        1.8 All acts and proceedings required by law and by the certificate or
articles of incorporation and bylaws of each of the Obligors necessary to
constitute this Agreement a valid and binding agreement for the uses and
purposes set forth herein, in accordance with its terms, have been done and
taken, and the execution and delivery hereof has been in all respects duly
authorized.

2.      INTERPRETATION OF THIS AGREEMENT

        2.1    TERMS DEFINED.

        As used in this Agreement, the following terms have the respective
meanings set forth below or provided for in the section or other part of this
Agreement referred to immediately following such term (such definitions to be
equally applicable to both the singular and plural forms of the terms defined)
or, if not defined herein, then as defined in the Indentures.

        ACCOUNT DEBTOR -- means a Person who is obligated on a Receivable.

        AGENT - means NationsBank, N.A., in its capacity as Agent for the
Lenders under the Loan Agreement, together with its successors and assigns in
such capacity.

        AGREEMENT -- has the meaning set forth in the introductory sentence
hereof.

                                        2

<PAGE>

        AKOM -- has the meaning specified in the introductory sentence hereof.

        BOOKS AND RECORDS -- means all books, records, operator's manuals,
ledger cards, computer programs, computer disks and tapes and other similar
Property and general intangibles at any time evidencing or relating to any of
the Obligors' Receivables, Inventory or other Property constituting Collateral.

        CALIFORNIA SHIRT - has the meaning set forth in the introductory
sentence hereof.

        CAPITAL LEASE -- means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

        CAPITALIZED LEASE OBLIGATION -- means Indebtedness represented by
obligations under a Capital Lease, and the amount of such Indebtedness shall be
the capitalized amount of such obligations determined in accordance with GAAP.

        COLLATERAL -- means and includes, collectively, all of the collateral
referred to in each of the Security Documents and all of each Obligor's right,
title and interest in and to each of the following, wherever located and whether
now or hereafter existing or now owned or hereafter acquired or arising:

                      (a)    all Receivables;

                      (b)    all Inventory;

                      (c)    all Contract Rights;

                      (d)    all General Intangibles;

                      (e)    all Tax Refund Claims;

                      (f)    all Equipment;
 
                      (g)    all Real Estate;

                      (h) all goods and other Property, whether or not
        delivered, (i) the sale or lease of which gives or purports to give rise
        to any Receivable, including all merchandise returned or rejected by or
        repossessed from customers, or (ii) securing any Receivable, including
        all rights as an unpaid vendor or lienor (including stoppage in transit,
        replevin and reclamation) with respect to such goods and other Property;


                      (i) all mortgages, deeds to secure debt and deeds of trust
        on real or personal Property, guaranties, leases, security agreements,
        and other agreements and Property which secure or relate to any
        Receivable or other Collateral, or are acquired for the purpose of
        securing and enforcing any item thereof;

                      (j) all documents of title, policies and certificates of
        insurance, securities, chattel paper and other documents and instruments
        evidencing or pertaining to any and all items of Collateral;

                                              3

<PAGE>

                      (k) all files, correspondence, computer programs, tapes,
        discs and related data processing software which contain information
        identifying or pertaining to any Tax Refund Claim or any of the
        Receivables or any Account Debtor, or showing the amounts thereof or
        payments thereon or otherwise necessary or helpful in the realization
        thereon or the collection thereof;

               (l) any demand, time, savings, passbook, money market or like
        depository account, and all certificates of deposit, maintained with a
        bank, savings and loan association, credit union or like organization;

                      (m) all cash deposited with the Trustee or any Noteholder,
        or which the Trustee, for the benefit of the Secured Creditors, or any
        Noteholder, is entitled to retain or otherwise possess as collateral
        pursuant to the provisions of this Agreement or any of the Security
        Documents; and

               (n) any and all products and proceeds of the foregoing (including
        any claim to any item referred to in this definition, and any claim
        against any third party for loss of, damage to or destruction of any or
        all of, the Collateral or for proceeds payable under, or unearned
        premiums with respect to, policies of insurance) in whatever form,
        including cash, negotiable instruments and other instruments for the
        payment of money, investment property, chattel paper, security
        agreements and other documents.

               COMPANY -- has the meaning specified in the introductory sentence
        hereof.

               CONTRACT RIGHTS - means any rights under contracts not yet earned
        by performance and not evidenced by an instrument or chattel paper,
        which contracts relate to or arise out of any of the Receivables or
        Inventory.

               COPYRIGHTS - means and includes, in each case whether now
        existing or hereafter arising, all of each Obligor's right, title and
        interest in and to: (a) all copyrights, rights and interests in
        copyrights, works protectable by copyright, copyright registrations and
        copyright applications; (b) all renewals of any of the foregoing; (c)
        all income, royalties, damages and payments now or hereafter due and/or
        payable under any of the foregoing, including damages or payments for
        past or future infringements of any of the foregoing; (d) the right to
        sue for past, present and future infringements of any of the foregoing;
        and (e) all rights corresponding to any of the foregoing throughout the
        world.

               DEFAULT -- means an event or condition the occurrence of which
        would, with the lapse of time or the giving of notice or both, become an
        Event of Default.


               DOLLAR and $ mean freely transferable United States dollars.

               DOMINION STORES -- has the meaning specified in the introductory
sentence hereof.

               EFFECTIVE DATE - means May 7, 1999, or such later date upon which
        this Agreement shall first become effective.

               ENVIRONMENTAL PROTECTION LAW -- means any and all Federal, state,
        local, and foreign statutes, laws, regulations, ordinances, rules,
        judgments, orders, decrees, permits, concessions, grants, franchises,
        licenses, agreements or governmental restrictions relating to pollution
        and the 
                                        4

<PAGE>



        protection of the environment or the release of any materials into the
        environment, including but not limited to those related to hazardous
        substances or wastes, air emissions and discharges to waste or public
        systems.

               EQUIPMENT - means all machinery, apparatus, equipment, motor
        vehicles, tractors, trailers, rolling stock, fittings and fixtures and
        other tangible personal property (other than Inventory) of every kind
        and description used in the Obligors' business operations or owned by an
        Obligor or in which an Obligor has an interest, and all parts,
        accessories and special tools and all increases and accessions thereto
        and substitutions and replacements therefor.

               EVENT OF DEFAULT -- means, at any time, the occurrence and
        continuance of any one or more of the following, for any reason
        whatsoever (and whether such occurrence shall be voluntary or
        involuntary or come about or be effected by operation of law or
        otherwise):

                      (i) an "Event of Default" under and as defined in either
               or both of the Indentures; or

                      (ii) a failure by any Obligor to perform or comply in any
               material respect with any covenant or agreement of such Obligor
               set forth in this Agreement or any other Financing Document; or

                      (iii) any warranty, representation or other statement by
               or on behalf of any Obligor contained in any of the Financing
               Documents, in any written amendment, supplement, modification or
               waiver with respect to any Financing Document or in any
               instrument furnished in compliance herewith or in reference
               hereto, shall have been false or misleading in any material
               respect when made; or

                      (iv) any Financing Document shall cease to be in full
               force and effect or shall be declared by a court or other
               Govenmental Authority of competent jurisdiction to be void,
               voidable or unenforceable against any Obligor party thereto; the
               validity or enforceability of any Financing Document against any
               Obligor party thereto shall be contested by any Obligor or any
               Affiliate thereof; or any Obligor shall deny that any one or more
               of the Obligors has any further liability or obligation under any
               Financing Document to which it is a party; or

                      (v) the failure of the Obligors, prior to June 24, 1999,
               to (A) grant to the Trustee, subject to the following clauses
               (B), (C), (D), (E), (F) and (G), (1) perfected first priority
               Liens (subject only to prior Permitted Liens) on all of the
               Noteholder Priority Collateral (as defined in the Intercreditor
               Agreement) (other than leasehold interests in retail outlet
               stores) in which any of the Obligors possess any right, title or
               interest on and as of the Effective Date and (2) perfected Liens,
               prior to all Liens other than those granted to the Agent pursuant
               to the Loan Agreement, on all of the Bank Priority Collateral (as
               defined in the Intercreditor Agreement) in which any of the
               Obligors possess any right, title or interest on and as of the
               Effective Date, (B) obtain landlord consents and lien waivers
               (substantially in the form and on the terms requested by Trustee)
               with respect to each of the real Properties listed on Annex 5,
               (C) obtain landlord consents and lien waivers (substantially in
               the form and on the terms requested by Trustee) with respect to
               seven of the nine real Properties listed on Annex 6, (D) have
               used their best efforts to (1) grant to the Trustee perfected
               first
                                              5

<PAGE>




               priority Liens on all of its interests in real Property located
               in Jamaica and (2) obtain landlord consents and lien waivers
               (substantially in the form and on the terms requested by Trustee)
               with respect to such real Property, (E) obtain landlord lien
               waivers (substantially in the form and on the terms requested by
               Trustee) with respect to substantially all other real Properties
               leased by any of the Obligors, (F) deliver to the Trustee one or
               more survey maps, reasonably satisfactory in form and substance
               to Trustee and prepared by a surveyor licensed in Virginia,
               depicting all of the Company's real Property located in
               Martinsville, Virgina, and all of the Company's real Property
               located in Henry County, Virginia, and cooperate with Trustee's
               efforts to develop correct legal descriptions for each site
               forming part of such real Property (including correction of any
               errors or oversights with respect to the legal descriptions
               presently attached to the Mortgages) and take all steps required
               to correct or supplement the Mortgages accordingly, and (G)
               comply with the obligations referred to in the last sentence of
               Section 3.2(c)(ii) as the Trustee shall request in order to
               perfect such Liens and protect the Trustee's interest in such
               Collateral, except, in each of the foregoing cases, for such
               failures that shall have been expressly waived by the Trustee in
               writing.

               FINANCING DOCUMENTS - means the Notes, the Indentures, this
        Agreement, the Security Documents and all other documents and
        instruments now or hereafter evidencing, securing or guarantying all or
        any part of the Secured Obligations or otherwise governing the
        responsibilities of the Obligors, or any of them, in connection with the
        Secured Obligations, the Collateral or any other security for the
        Secured Obligations.

               FINANCING STATEMENTS -- means any and all Uniform Commercial Code
        financing statements (or other similar documents), in form and substance
        satisfactory to the Trustee, executed and delivered by any Obligor to
        the Trustee, naming the Trustee, for the benefit of the Secured
        Creditors, as secured party, and such Obligor as debtor, in connection
        with this Agreement.

               FIRST INDENTURE - has the meaning specified in Section 1.1.

               FIRST UNION - has the meaning specified in Section 1.1.

               GAAP -- means generally accepted accounting principles as in
        effect from time to time in the United States of America.

               GENERAL INTANGIBLES -- means all of the Obligors' now owned or
        hereafter acquired general intangibles and other intangible personal
        property of every kind and nature which relate to or arise out of any of
        the Receivables or Inventory, including all of the following which
        relate to or arise out of any of the Receivables or Inventory: all
        Proprietary Rights, corporate or other business records, inventions,
        designs, blueprints, plans, specifications, goodwill, computer software,
        customer lists, registrations, licenses, franchises, rights and claims
        against carriers and shippers, rights to indemnification, business
        interruption insurance and proceeds thereof, property, casualty or any
        similar type of insurance and any proceeds thereof, and any letter of
        credit, guarantee, claims, security interest or other security held by
        or granted to any Obligor to secure payment by an Account Debtor of any
        of the Receivables.


                                        6

<PAGE>




               GOVERNMENTAL AUTHORITY -- means

                      (a)    the government of

                             (i) the United States of America or any state or
                      other political subdivision thereof, or

                             (ii) any jurisdiction in which the Company or any
                      Subsidiary thereof conducts all or any part of its
                      business, or which asserts jurisdiction over any
                      Properties of the Company or any Subsidiary thereof, or

                      (b) any entity exercising executive, legislative,
               judicial, regulatory or administrative functions of, or
               pertaining to, any such government.

               INDENTURES - has the meaning specified in Section 1.2.

               INTERCREDITOR AGREEMENT -- means the Intercreditor Agreement,
        dated as of the date of this Agreement, between the Agent and Trustee.

               INVENTORY - means all "inventory" as such term is defined in the
        Uniform Commercial Code and shall include, without limitation, (a) all
        goods intended for sale or lease by the Obligors, or for display or
        demonstration, (b) all work in process, (c) all raw materials and other
        materials and supplies of every nature and description used or which
        might be used in connection with the manufacture, packing, shipping,
        advertising, selling, leasing or furnishing of such goods or otherwise
        used or consumed in the Obligors' business, and (d) all documents
        evidencing and general intangibles relating to any of the foregoing.

               LENDERS - means, at any time, all of the financial institutions
        party to the Loan Agreement at such time, including their successors and
        assigns.

               LIEN - means, as applied to the Property of any Person: (a) any
        mortgage, deed to secure debt, deed of trust, lien, pledge, charge,
        lease constituting a Capitalized Lease Obligation, conditional sale or
        other title retention agreement, or other security interest, security
        title or encumbrance of any kind in respect of any Property of such
        Person, or upon the income or profits therefrom; (b) any arrangement,
        express or implied, under which any Property of such Person is
        transferred, sequestered or otherwise identified for the purpose of
        subjecting the same to the payment of Indebtedness or performance of any
        other obligation in priority to the payment of the general, unsecured
        creditors of such Person; (c) any Indebtedness which is unpaid more than
        60 days after the same shall have become due and payable and which if
        unpaid might by law (including bankruptcy and insolvency laws), or
        otherwise, be given any priority whatsoever over the claims of general
        unsecured creditors of such Person; and (d) the filing of, or any
        agreement to give, any financing statement under the Uniform Commercial
        Code or its equivalent in any jurisdiction, excluding informational
        financing statements relating to leased property.

               LOAN AGREEMENT - means the Loan and Security Agreement, dated as
        of the date hereof, among the Obligors, the Lenders and the Agent, as in
        effect on the date hereof.

                                        7

<PAGE>

               LOGO ATHLETIC NOTE - means, collectively, (a) the Non-Negotiable
        Subordinated Promissory Note of TKS Acquisition, Inc., dated July 15,
        1998, payable to the Company in the Company in the principal amount of
        $5,000,000, (b) the Non-Negotiable Subordinated Promissory Note of TKS
        Acquisition, Inc., dated July 15, 1998, payable to the Company in the
        Company in the principal amount of $2,500,000, (c) the Non-Negotiable
        Subordinated Promissory Note of TKS Acquisition, Inc., dated July 15,
        1998, payable to the Company in the Company in the principal amount of
        $5,000,000.

               MAJORITY NOTEHOLDERS -- means, at any time, (a) the holders of a
        majority in aggregate principal amount of the "Securities" (as defined
        in the First Indenture) and (b) the holders of a majority in aggregate
        principal amount of the "Securities" (as defined in the Second
        Indenture), in each case, excluding any such Securities held by, or
        owing to, one or more of the Company, any Obligor, or any of their
        respective Subsidiaries or Affiliates.

               MATERIAL ADVERSE EFFECT -- means a material adverse effect on

                      (a) the business, operations, affairs, financial
               condition, assets or properties of the Obligors, taken as a
               whole, or

                      (b) the fair market value of the Collateral, taken as a
               whole, or

                      (c) the ability of any Obligor to perform its material
               obligations under any of the Financing Documents to which it is a
               party, or

                      (d) the validity or enforceability of any of the Financing
               Documents.

               MORTGAGED REAL ESTATE -- means and includes all "Property" (as
        such term is defined in each of the Mortgages) subject to the Lien in
        favor of the Trustee granted pursuant to the Mortgages and (without
        duplication) all of the Real Estate described on ANNEX 4, together with
        all Real Estate with respect to which the Obligors are required to
        deliver a Mortgage to the Trustee pursuant to Section 3.3(a).

               MORTGAGES - means and includes any and all of the mortgages,
        deeds of trust, deeds to secure debt, assignments and other instruments
        executed and delivered by the Obligors pursuant to which the Obligors
        grant to the Trustee, for the benefit of the Secured Creditors, a Lien
        on all Mortgaged Real Estate, and all amendments, modifications and
        supplements thereto.


               1995 INDENTURE - has the meaning specified in Section 1.1.

               1997 INDENTURE - has the meaning specified in Section 1.2.

               NOTEHOLDERS - has the meaning specified in Section 1.3.

               NOTES - has the meaning specified in Section 1.3.

               OBLIGORS -- has the meaning specified in the introductory
        sentence hereof.
                                        8

<PAGE>



               PATENT ASSIGNMENT -- means the Collateral Assignment and Patent
        Security Agreement, dated on or about the Effective Date, made by the
        Obligors to the Trustee, for the benefit of the Secured Creditors.

               PATENTS -- means and includes, in each case whether now existing
        or hereafter arising, all of the Obligors' right, title and interest in
        and to (a) any and all patents and patent applications, (b) inventions
        and improvements described and claimed therein, (c) reissues, divisions,
        continuations, renewals, extensions and continuations-in-part thereof,
        (d) income, royalties, damages, claims and payments now or hereafter due
        and/or payable under and with respect thereto, including damages and
        payments for past and future infringements thereof, (e) rights to sue
        for past, present and future infringements thereof, and (f) all rights
        corresponding to any of the foregoing throughout the world.

               PERMITS AND WARRANTIES -- means all permits, licenses,
        manufacturer's warranties, performance guarantees, service contracts,
        maintenance contracts, and other similar general intangibles which are
        necessary for, or used or useful in connection with, the operation or
        use of any of the Collateral or any of the Mortgaged Real Estate.

               PERMITTED EQUIPMENT SALE - means a sale of Equipment of any
        Obligor in an arms-length transaction, PROVIDED that: (i) the
        consideration for such sale shall be at least equal to the fair market
        value of the items of Equipment so sold, as determined in good faith by
        the Board of Directors of such Obligor and as evidenced by a certified
        resolution of such Board of Directors delivered to the Trustee on or
        before the date of the transfer of title, together with an accurate and
        complete copy of the agreement pursuant to which such transaction is to
        be, or shall have been, consummated; and (ii) the consideration for such
        sale, when combined with the consideration for all other Equipment Sales
        (as hereinafter defined) consummated within the period of twelve
        consecutive months immediately preceding the transfer of title of such
        Equipment, shall not exceed $2,000,000 in the aggregate. As used herein,
        the term "Equipment Sales" means any and all sales of Equipment and any
        and all sales of like personal Property encumbered by any of the
        Security Documents prior to the consummation of such sale or sales.

               PERMITTED LIEN S -- means

                      (a) one or more Liens or security interests in favor of
               the Trustee securing the Secured Obligations and

                      (b) other Liens that comply with the terms of all of the
               Financing Documents, including Liens granted to the Agent
               pursuant to the Loan Agreement, provided such Liens are
               consistent in all respects with the Intercreditor Agreement.

               PERSON -- means an individual, sole proprietorship, partnership,
        corporation, trust, joint venture, unincorporated organization, limited
        liability company or a government or agency or political subdivision
        thereof.

               PROPRIETARY RIGHTS -- means all of the Obligors' now owned and
        hereafter arising or acquired Patents, Copyrights, and Trademarks,
        including those Proprietary Rights set forth on ANNEX 3 hereto, and all
        other rights under any of the foregoing, all extensions, renewals,
        reissues, 


                                        9

<PAGE>

        divisions, continuations, and continuations-in-part of any of the
        foregoing, and all rights to sue for past, present and future
        infringement of any of the foregoing.

               PROPERTY -- means any interest in any kind of property or asset,
        whether real, personal or mixed, and whether tangible or intangible.

               REAL ESTATE -- means all of the Obligors' now or hereafter owned
        or leased estates in real Property, including the real Property
        described on ANNEX 4.

               RECEIVABLES -- means and includes, as to each Obligor, (a) any
        and all rights to the payment of money or other forms of consideration
        of any kind (whether classified under the Uniform Commercial Code as
        accounts, contract rights, chattel paper, general intangibles, or
        otherwise) including accounts receivable, letters of credit and the
        right to receive payment thereunder, chattel paper, tax refunds,
        insurance proceeds, Contract Rights, notes, drafts, instruments,
        documents, acceptances, and all other debts, obligations and liabilities
        in whatever form from any Person, but excluding the Logo Athletic Note
        and the Vendor Note, (b) all guarantees, security and Liens for payment
        thereof, (c) all goods, whether now owned or hereafter acquired, and
        whether sold, delivered, undelivered, in transit or returned, which may
        be represented by, or the sale or lease of which may have given rise to,
        any such right to payment or other debt, obligation or liability, and
        (d) all proceeds of any of the foregoing.

               SECOND INDENTURE - has the meaning specified in Section 1.2.

               SECURED CREDITORS - means, collectively, the Trustee and the
        Noteholders.

               SECURED OBLIGATIONS -- means and includes, in each case whether
        now in existence or hereafter arising, (a) all principal, interest,
        premium, if any, and other obligations of the Company and the other
        Obligors under the Notes, the Indentures and the other Financing
        Documents, and (b) all indebtedness, liabilities, obligations, covenants
        and duties of the Obligors to any one or more of the Secured Creditors
        of every kind, nature and description arising under or in respect of
        this Agreement, the Notes or any of the other Financing Documents,
        whether direct or indirect, absolute or contingent, due or not due,
        contractual or tortious, liquidated or unliquidated, and whether or not
        evidenced by any note, and whether or not for the payment of money,
        including, without limitation, fees required to be paid and expenses
        required to be paid or reimbursed, indemnities, and any other amounts
        whatsoever.


               SECURITY DOCUMENTS - means this Agreement, the Financing
        Statements, the Patent Assignment, the Trademark Assignment, the
        Mortgages, and each other writing executed and delivered by any one or
        more of the Obligors securing the Secured Obligations.

               SUBSIDIARY GRANTOR -- has the meaning specified in the
        introductory sentence hereof.

               SWEATJET - has the meaning specified in the introductory sentence
        hereof.

               TAX REFUND CLAIMS - means all tax refund claims and all rights
        with respect thereto, including all rights to settle or compromise the
        amount of such claims, to file amendments and other documents with
        respect thereto, and to receive the proceeds thereof.
 
                                       10

<PAGE>



               TRADEMARK ASSIGNMENT -- means the Conditional Assignment and
        Trademark Security Agreement, dated on or about the Effective Date,
        entered into by the Trustee with the Obligors.

               TRADEMARKS - means and includes, in each case whether now
        existing or hereafter arising, all of the Obligors' right, title and
        interest in and to (a) trademarks (including service marks), trade names
        and trade styles and the registrations and applications for registration
        thereof and the goodwill of the business symbolized by the trademarks,
        (b) licenses of the foregoing, whether as licensee or licensor, (c)
        renewals thereof, (d) income, royalties, damages and payments now or
        hereafter due and/or payable with respect thereto, including damages,
        claims and payments for past and future infringements thereof, (e)
        rights to sue for past, present and future infringements thereof,
        including the right to settle suits involving claims and demands for
        royalties owing, and (f) all rights corresponding to any of the
        foregoing throughout the world.

               TRUSTEE -- has the meaning set forth in the introductory sentence
        hereof.

               TULTEX CANADA -- has the meaning specified in the introductory
        sentence hereof.

               TULTEX INTERNATIONAL -- has the meaning specified in the
        introductory sentence hereof.

               TULTEX MASSACHUSETTS -- has the meaning specified in the
        introductory sentence hereof.

               TULTEX VIRGINIA -- has the meaning specified in the introductory
        sentence hereof.

               UNIFORM COMMERCIAL CODE --means the Uniform Commercial Code as in
        effect from time to time in any specified or applicable jurisdiction.

               US BANK -- has the meaning specified in the introductory sentence
        hereof.

               VENDOR NOTE - means, collectively, (a) a promissory note dated
        July 1, 1997 of Textiles Arco, S.A. de C.V., as amended, payable to the
        Company in the amount of $198,000 as of April 3, 1999, and (b) the
        contract obligations due from [OMSA] and related parties under the
        agreement dated October 11, 1995, as amended on July 1, 1997, payable to
        the Company in the amount of $4,354,000 as of April 3, 1999.


            2.2    SECTION HEADINGS AND TABLE OF CONTENTS AND CONSTRUCTION, ETC.

                      (A) SECTION HEADINGS AND TABLE OF CONTENTS, ETC. The
               titles of the Sections of this Agreement and the Table of
               Contents of this Agreement appear as a matter of convenience
               only, do not constitute a part hereof and shall not affect the
               construction hereof. The words "herein," "hereof," "hereunder"
               and "hereto" refer to this Agreement as a whole and not to any
               particular Section or other subdivision. References to Sections
               are, unless otherwise specified, references to Sections of this
               Agreement. References to Annexes, Schedules, Exhibits and
               Attachments are, unless otherwise specified, references to
               Annexes, Schedules, Exhibits and Attachments attached to this
               Agreement.

                      (B) CONSTRUCTION. Each covenant contained herein shall be
               construed (absent an express contrary provision herein) as being
               independent of each other covenant contained


                                       11

<PAGE>



               herein, and compliance with any one covenant shall not (absent
               such an express contrary provision) be deemed to excuse
               compliance with one or more other covenants.

                      (C)    OTHER TERMS AND RULES OF CONSTRUCTION.

                             (i) The terms "accounts," "chattel paper,"
                      "contract rights," "documents," "equipment,"
                      "instruments," "general intangibles," "investment
                      property" and "inventory," as and when used in the lower
                      case in this Agree ment (and not as a capitalized term) or
                      the other Security Documents, shall have the meanings
                      given those terms in the Uniform Commercial Code.

                             (ii) Unless otherwise specified, the word
                      "including" means "including but not limited to".

                             (iii) References to any legislation or statute or
                      code, or to any provisions of any legislation or statute
                      or code, shall include any modification or reenactment of,
                      or any legislative, statutory or code provision
                      substituted for, such legislation, statute or code or
                      provision thereof.

                             (iv) Unless otherwise specified with respect
                      thereto, references to any document or agreement
                      (including this Agreement) shall include references to
                      such document or agreement as amended, novated,
                      supplemented, modified or replaced from time to time, so
                      long as and to the extent that such amendment, novation,
                      supplement, modification or replacement is either not
                      prohibited by the terms of any Financing Document or is
                      consented to by the Majority Noteholders and the Trustee.

                             (v) References to any Person include its successor
                      or permitted substitutes and assigns.


               2.3    SEPARATE AGREEMENTS.

               Notwithstanding that this Agreement is among each of the Obligors
        and the Trustee, this Agreement shall be construed and interpreted as a
        separate Agreement between each Obligor, respectively, and the Trustee,
        and any whole or partial invalidity of this Agreement in respect of any
        Obligor shall not have any effect on the validity or enforceability of
        this Agreement as among each other Obligor, respectively, as the case
        may be, and the Trustee.

               2.4    PARTIAL INVALIDITY.

               The unenforceability or invalidity of any provision or provisions
        of this Agreement shall not render any other provision or provisions
        contained in this Agreement unenforceable or invalid.

               2.5    GOVERNING LAW.

               THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
        BY THE INTERNAL LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT
        THE PERFECTION OF THE LIENS IN AND TO THE 
                                              12

<PAGE>

        COLLATERAL ARE GOVERNED BY THE LAWS OF ANY JURISDICTION OTHER THAN THE
        STATE OF NEW YORK.

        3.     COLLATERAL

               3.1    GRANT OF SECURITY INTEREST.

                      (a) To secure the payment, observance and performance of
               the Secured Obligations, each Obligor hereby mortgages, pledges
               and assigns all of its right, title and interest in and to the
               Collateral to the Trustee, for the benefit of the Secured
               Creditors, and grants to the Trustee, for the benefit of the
               Secured Creditors, a continuing security interest in, and a
               continuing Lien upon, all of its right, title and interest in and
               to the Collateral.

                      (b) As additional security for all of the Secured
               Obligations, each Obligor grants to the Trustee and the
               Noteholders, for the benefit of the Trustee and the Noteholders,
               a security interest in, and assigns to the Trustee and the
               Noteholders, for the benefit of the Trustee and the Noteholders,
               all of such Obligor's right, title and interest in and to, any
               deposits or other sums at any time credited by or due from the
               Trustee and each Noteholder to such Obligor, or credited by or
               due from any participant of any Noteholder to such Obligor, with
               the same rights therein as if the deposits or other sums were
               credited by or due from such Noteholder. Each Obligor hereby
               authorizes the Trustee and each Noteholder to pay or deliver to
               the Trustee, for the account of the Trustee and the Noteholders,
               without any necessity on the Trustee's or any Noteholder's part
               to resort to other security or sources of reimbursement for the
               Secured Obligations, at any time during the continuation of any
               Event of Default or in the event that the Trustee, on behalf of
               the Secured Creditors, should make demand for payment under any
               Financing Document and without further notice to any Obligor
               (such notice being expressly waived), any of the aforesaid
               deposits (general or special, time or demand, provisional or
               final) or other sums for application to any Secured Obligation,
               irrespective of whether any demand has been made or whether such
               Secured Obligation is mature, and the rights given the Trustee
               and the Noteholders hereunder and under each other Financing
               Document are cumulative with such Person's other rights and
               remedies, including other rights of setoff. The Company will
               promptly notify the Trustee of its receipt of any such funds for
               application to the Secured Obligations, but failure to do so will
               not affect the validity or enforceability thereof. The Trustee
               may give notice of the above grant of a security interest in and
               assignment of the aforesaid deposits and other sums, and
               authorization, to, and make any suitable arrangements with, any
               Noteholder for effectuation thereof, and each Obligor hereby
               irrevocably appoints the Trustee as its attorney to collect any
               and all such deposits or other sums to the extent any such
               payment is not made to the Trustee or any Noteholder by such
               Noteholder.

               3.2    COLLATERAL-RELATED RIGHTS AND UNDERTAKINGS.

                      (A) CHIEF EXECUTIVE OFFICE; NOTICE OF CHANGES OF ADDRESS
               OR NAME. Each of the Obligors hereby represents, warrants and
               covenants to the Trustee that,

                             (1) the chief executive office of each of the
                      Obligors (and the office where all of the Books and
                      Records of each of the Obligors are maintained) is located
                      at the applicable address set forth on ANNEX 1, and

                                              13

<PAGE>




                             (2) the Inventory and Equipment currently owned by
                      such Obligor is physically located at the address or
                      addresses set forth on ANNEX 2.

               None of the Obligors shall

                                    (1) change the address of such chief
                             executive office, or merge or consolidate with any
                             Person or change its name, or

                                    (2) change the specified locations of such
                             Inventory (other than pursuant to sales of such
                             Inventory in the normal course of business) and
                             Equipment,

               unless such Obligor shall have given thirty (30) days prior
               written notice thereof to the Trustee.

                      (B) OWNERSHIP OF COLLATERAL; LIEN OF THE TRUSTEE; TAXES.
               Each of the Obligors hereby represents, warrants and covenants to
               the Trustee that the Collateral granted by each Obligor hereunder
               is now, and at all times shall be, solely owned by such Obligor
               free and clear of all Liens, security interests, claims and
               encumbrances, except Permitted Liens. Each of the Obligors hereby
               represents, warrants and covenants to the Trustee that the
               security interests of the Trustee in the Collateral are now, and
               shall at all times be, valid, perfected, first priority security
               interests in the Noteholder Priority Collateral (as defined in
               the Intercreditor Agreement) and perfected Liens, prior to all
               Liens other than those granted to the Agent pursuant to the Loan
               Agreement, on all of the Bank Priority Collateral (as defined in
               the Intercreditor Agreement), in all cases subject only to
               Permitted Liens. Each of the Obligors shall defend the Collateral
               from all claims and demands of all other Persons, except the
               holders of Permitted Liens. Each of the Obligors shall comply
               with the requirements of all state and federal laws, rules and
               regulations in order to grant the security interests herein
               granted in and to the Collateral, to maintain the perfection and
               priority of such security interests and to permit the Trustee to
               realize promptly and directly on such Collateral, as provided
               herein. Each of the Obligors shall pay all taxes, assessments and
               other claims lawfully levied or assessed on any of the
               Collateral, except to the extent that such taxes, assessments and
               other claims constitute Permitted Liens.

                      (C)    FINANCING STATEMENTS; FURTHER ASSURANCES

                             (i) Each of the Obligors hereby agrees to execute
                      such financing statements

                                    (A) as may be requested by the Trustee or
                             the Noteholders on or prior to the Effective Date,
                             and

                                    (B) as the Trustee or the Majority
                             Noteholders may from time to time request, and

                                    (C) at all times take such action
                             (including, without limitation, the preparation and
                             filing, at its own expense, of all continuation

                                              14

<PAGE>

                             statements) as may be required to perfect
                             (including in respect of after-acquired Property in
                             the nature of Collateral) and to keep continuously
                             perfected the Trustee's security interest and Lien
                             in the Collateral.

                      The Trustee is hereby authorized by each of the Obligors
                      to execute and file any such financing statements and
                      continuation statements on such Obligor's behalf, unless
                      prohibited by law, and, if such Obligor fails to make such
                      filings within five (5) days of any request therefor by
                      the Trustee, the Trustee shall make such filings subject
                      to the provisions hereof.

                             (ii) Each of the Obligors shall, at its sole cost
                      and expense, perform all acts and execute all documents
                      reasonably requested by the Trustee or the Majority
                      Noteholders from time to time to evidence, perfect,
                      preserve the priority of, maintain or enforce the
                      Trustee's security interests granted herein or otherwise
                      in furtherance of the provisions of this Agreement. At any
                      time and from time to time, each of the Obligors shall, at
                      its sole cost and expense, execute and deliver to the
                      Trustee such financing statements pursuant to the Uniform
                      Commercial Code or other applicable law of any applicable
                      jurisdiction, and shall execute, acknowledge, deliver and
                      record, or will cause to be executed, acknowledged,
                      delivered or recorded, all such further instruments,
                      deeds, conveyances, mortgages, supplemental indentures,
                      transfers, continuation statements and assurances as are
                      necessary or reasonably appropriate to perfect, preserve,
                      protect, continue and maintain the perfection and priority
                      of the Lien of the Trustee in and to the Collateral or, as
                      the Trustee may reasonably require, for the better
                      granting, bargaining, selling, remising, releasing,
                      confirming, conveying, warranting, assigning,
                      transferring, mortgaging, pledging, delivering and setting
                      over to the Trustee every part of such security, or as may
                      be required in order to transfer to any successor trustee
                      or trustees the estate, powers, instruments and funds held
                      in trust hereunder. Each of the Obligors hereby authorizes
                      the Trustee to execute and file at any time and from time
                      to time one or more financing statements or copies thereof
                      or of this Agreement (and any continuation statements in
                      respect thereof) with respect to the Collateral signed
                      only by Trustee. In particular, and without limiting the
                      generality of this clause (ii), (A) each of the Obligors
                      shall comply with the foregoing provisions of this clause
                      (ii) with respect to (I) any and all of its Property
                      located in any one or more of Canada and Mexico, and (II)
                      any and all of its Property consisting of motor vehicles,
                      and (B) the Company shall comply, prior to June 24, 1999,
                      with the obligations described in clause (v) of the
                      definition of "Event of Default" set forth herein.

                      (D) SALE OF COLLATERAL. No Obligor shall assign, sell,
               transfer, or otherwise dispose of, nor shall any Obligor suffer
               or permit any of the same to occur with respect to, any
               Collateral other than

                             (i) in respect of the sale of Inventory in the
                      ordinary course of business,

                             (ii) (A) as otherwise permitted under each of the
                      Financing Documents and (B) Equipment which is disposed of
                      in a Permitted Equipment Sale,

                                              15

<PAGE>

                             (iii) in respect of the collection of checks,
                      drafts, money orders or other instruments in respect of
                      the Receivables as contemplated by Section 3.2(i)(ii), or

                             (iv) with the prior written consent of the Majority
                      Noteholders.

               The foregoing notwithstanding and notwithstanding anything to the
               contrary in the Financing Documents, the Majority Noteholders
               may, in their sole discretion, withdraw the aforesaid permissions
               to assign, sell, transfer or otherwise dispose of Inventory upon
               the occurrence and continuance of any Event of Default.

                      (E) ACCESS TO COLLATERAL; MAINTENANCE OF BOOKS AND
               RECORDS. The Trustee shall at all times have free access to and
               right of inspection of the Collateral and any records pertaining
               thereto (and the right to make extracts from and to receive from
               the Obligors originals or true copies of such records and any
               papers and instruments relating to any Collateral upon request
               therefor at reasonable times and as reasonably requested). Each
               of the Obligors shall maintain the Books and Records and such
               other records as will enable it and the Trustee to accurately
               determine the status of the Collateral in a prompt manner. All of
               the Books and Records and such other records shall be maintained
               at the respective addresses set forth on ANNEX 1 until such time
               as any Obligor shall be permitted to change such location in
               accordance with this Section 3.2.

                      (F) USE OF EQUIPMENT; NOTICES REGARDING CHANGES IN
               EQUIPMENT.

                             (i) Each of the Obligors hereby represents,
                      warrants and covenants to the Trustee that all of the
                      Equipment is used in the business of such Obligor (and not
                      for personal, family, household or farming use) for lawful
                      purposes only and in compliance in all material respects
                      with all laws, rules and governmental regulations relating
                      thereto.

                             (ii) Each Obligor will, at such Obligor's sole
                      expense, keep each item of Equipment (other than obsolete
                      Equipment) in functional condition and repair, running and
                      marketable condition.

                             (iii) The Obligors shall promptly (and in any event
                      within ten (10) Business Days) advise the Trustee and the
                      Noteholders in sufficient detail of any substantial change
                      relating to the type, quantity, quality or location of the
                      Equipment or any event which would have a material adverse
                      effect on the value of the Equipment.

                      (G)    [INTENTIONALLY DELETED].

                                              16

<PAGE>



                      (H)    INSURANCE.

                             (i) Anything contained in the other Financing
                      Documents notwithstanding, the Obligors agree to maintain
                      insurance, with financially sound and reputable insurers,
                      with respect to the Inventory and any returned,
                      repossessed or reclaimed tangible personal Property
                      included in the Collateral against casualties,
                      contingencies, hazards and such other risks (including,
                      without limitation,

                                    (A) fire, hurricane, tornado, wind damage,
                             and such other risks insured against by a standard
                             all-risk property and fire insurance policy and
                             endorsement for extended coverage and

                                    (B)     flood, earthquake and public 
                             disturbance insurance)

                      and in such amounts (and with such reasonable deductibles)
                      as shall be customary in the case of corporations of
                      established reputations engaged in the same or a similar
                      business and similarly situated (it being understood that
                      the deductibles in respect of such insurance on the
                      Effective Date shall be deemed to be reasonable for the
                      purposes hereof). The Obligors shall deliver copies of the
                      policies of such insurance to the Trustee, with
                      satisfactory lender's loss payable endorsements naming the
                      Trustee as loss payee to the extent of its interest and as
                      such interest may appear. Each such policy of insurance or
                      endorsement shall contain a clause requiring the insurer
                      to give not less than thirty (30) days prior written
                      notice to the Trustee in the event of cancellation of the
                      policy for any reason whatsoever and a clause that the
                      interest of the Trustee shall not be impaired or
                      invalidated by any act or neglect of any Obligor. If the
                      Obligors shall fail to provide and pay for such insurance,
                      or have the same provided and paid for, the Trustee, upon
                      being instructed by the Majority Noteholders, may, at the
                      sole expense of the Obligors, procure the same, but may
                      not be required by the Obligors to do so. Each of the
                      Obligors agrees to deliver to the Trustee, promptly as
                      rendered, true copies of all material reports made in any
                      reporting form to insurance companies.

                             (ii) Anything contained in the other Financing
                      Documents notwithstanding, each Obligor shall maintain or
                      caused to be maintained insurance, with financially sound
                      and reputable insurers, with respect to its Property
                      (including, without limitation, the Collateral) and
                      business covering any public and/or product liability of
                      any Obligor, or its officers, agents or employees, and in
                      such amounts as shall be customary in the case of
                      corporations of established reputations engaged in the
                      same or a similar business and similarly situated. The
                      Trustee and each of the Noteholders shall be named as a
                      co-insured on such policies. The Obligors shall deliver to
                      the Trustee on the Closing Date evidence of insurance of
                      the type and in the amounts provided for in this Section
                      3.2(h)(ii) being in full force and effect and payment of
                      all premiums in respect thereof.

                      (I) COLLECTION OF RECEIVABLES, ETC. Anything herein to the
               contrary notwithstanding, but subject in all cases to the
               provisions of the Intercreditor Agreement:

                                              17

<PAGE>




                             (i) each of the Obligors shall remain responsible
                      and liable to perform all of its duties and obligations
                      under or in respect of each of the Receivables;

                             (ii) until such time as the Trustee shall have
                      informed any of the Obligors to the contrary, the Obligors
                      shall remain obligated to collect, and account for all
                      proceeds in respect of, the Receivables and shall do so
                      diligently and in accordance with reasonable commercial
                      procedures and practices for similarly situated
                      corporations and shall be entitled to retain and use such
                      proceeds, and, if an Event of Default shall exist and if
                      so instructed by the Trustee, each of the Obligors shall
                      deliver all such proceeds to the Trustee, or as directed
                      by the Trustee, for application to the Secured Obligations
                      and the obligations secured by the Permitted Liens; and

                             (iii) the execution and delivery of this Agreement,
                      and the granting of the security interests in and to the
                      Collateral, shall not subject the Trustee or any holder of
                      the Secured Obligations to, or transfer or pass to such
                      Persons, or in any way affect or modify, the liability of
                      the Obligors under any or all of their respective
                      Receivables or any obligations of the Obligors in
                      connection therewith, it being understood and agreed that
                      notwithstanding this Agreement, and the granting of the
                      security interests in and to the Collateral, all of the
                      obligations of each of the Obligors to each and every
                      other party under each and every one of the Receivables
                      shall be and remain enforceable by such other party, its
                      successors and assigns, only against the Obligors, and the
                      Trustee and each holder of Secured Obligations have not
                      assumed any of the obligations or duties of any of the
                      Obligors thereunder or in connection therewith.

                      (J) INDEMNIFICATION. Each of the Obligors hereby agrees to
               indemnify each of the Trustee and each holder of Secured
               Obligations, and hold each such Person harmless, from any and all
               liability, loss or damage which any such Person may or might
               incur by reason of any and all claims and demands whatsoever
               which may be asserted against any such Person arising out of, as
               a result of, or otherwise connected with, the security interests
               hereby granted to the Trustee by the Obligors under or in respect
               of any of the Collateral by reason of

                             (i) the failure by any of the Obligors to perform
                      any alleged obligations or undertakings required to be
                      performed by such Obligor, as the case may be, under or in
                      connection with the Collateral (including, without
                      limitation, the failure of any warranty or representation
                      (express or implied) in respect of the sale of any
                      Inventory),

                             (ii) any failure by any of the Obligors, in
                      connection with any of the Collateral, to comply with any
                      applicable federal, state or local law and the rules and
                      regulations promulgated thereunder and

                             (iii) any bodily injury, death or property damage
                      occurring in connection with the sale, lease or use of the
                      Collateral.

                      (K)    CERTAIN RIGHTS OF TRUSTEE.

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<PAGE>

                             (i) Neither the Trustee nor any holder of Secured
                      Obligations shall be obligated to, or be responsible for,
                      the payment of any of the amounts or sums referred to in
                      this Section 3.2 or the other performance of any of the
                      undertakings of the Obligors hereunder. Each of the
                      Obligors hereby agrees and acknowledges that neither the
                      acceptance of this Agreement by the Trustee nor the
                      exercise of, or failure to exercise, any right, power or
                      remedy in this Agreement conferred upon the Trustee shall
                      be deemed or construed to obligate the Trustee or any
                      holder of Secured Obligations to pay any sum of money,
                      take any other action or incur any liability in connection
                      with, or collect or realize upon, any of the Collateral.
                      It is further agreed and understood by each of the
                      Obligors that the Trustee and the Noteholders shall not be
                      liable in any way for any cost, expense or liability
                      connected with, or any charge or liability arising from,
                      any of the Collateral. All insurance expenses, all
                      expenses of protecting, storing, warehousing, insuring,
                      handling, maintaining and shipping the Collateral, and any
                      and all excise, property, sales, use and other taxes
                      imposed by any state, federal or local authority on
                      any of the Collateral or in respect of the sale or other
                      disposal thereof shall be borne and paid by the Obligors.

                             (ii) If any of the Obligors shall fail to pay any
                      of the aforesaid expenses and taxes, the Trustee may, at
                      the instruction of the Majority Noteholders and at such
                      Obligor's expense, pay the same, and any such payment
                      shall be deemed an advance by the Trustee to such Obligor
                      payable on demand together with interest at the highest
                      rate then payable on any of the Secured Obligations. If
                      any of the Obligors shall fail to perform any of its other
                      undertakings or agreements or obligations under this
                      Agreement, the Trustee may (but shall not be required to)
                      itself perform, or cause performance of, such undertaking,
                      agreement or obligation, and the expenses of the Trustee
                      incurred in connection therewith shall be payable by such
                      Obligor on demand together with interest at the highest
                      rate then payable on any of the Secured Obligations and
                      shall otherwise be treated as a Secured Obligation
                      hereunder.

                             (iii) If, by reason of any suit or proceeding of
                      any kind, nature or description against any of the
                      Obligors, or by any Obligor or any other party against any
                      other Person, which in the Trustee's sole discretion makes
                      it advisable for the Trustee to seek counsel for the
                      protection and preservation of the Collateral, or to
                      defend its own interest or the interests of the
                      Noteholders, such out-of-pocket expenses and reasonable
                      counsel fees shall be allowed to the Trustee and borne and
                      paid by such Obligor.

                      (L) NO LIABILITY FOR SAFEKEEPING. Except to the extent
               specifically limited by applicable law, the Trustee shall not be
               liable or responsible in any way for the safekeeping of the
               Collateral or for any loss or damage thereto or for any
               diminution in the value thereof, or any act or default of any
               warehouseman, carrier, forwarding agency or other Person, but the
               same shall be at the sole risk of the Obligor owning such
               Collateral.

                      (M)    NO VIOLATION OF LAW.  No Obligor shall


                                              19

<PAGE>

                             (i) violate any law, ordinance or governmental rule
                      or regulation (including, without limitation, any
                      Environmental Protection Laws) to which it or the
                      Collateral is subject (except to the extent being
                      contested in good faith by appropriate proceedings and for
                      which reserves in respect of such Obligor's reasonably
                      anticipated liability therefor have been established), nor

                             (ii) fail to obtain any license, permit, franchise
                      or other governmental authorization necessary to the
                      ownership of the Collateral, the sale or lease of the
                      Inventory, the collection of the Receivables, or the
                      operation of the Equipment,

               which violation or failure to obtain might have a Material
               Adverse Effect.

                      (N) FURTHER ASSIGNMENTS; MARKING OF COLLATERAL. Each of
               the Obligors shall deliver to the Trustee, at such times and in
               such form as may be reasonably designated by the Trustee or the
               Majority Noteholders from time to time, assignments, reports and
               schedules relating to the Collateral. Upon request by the Trustee
               or the Majority Noteholders, each of the Obligors shall mark its
               books and records to reflect the security interests of the
               Trustee in the Collateral.

                      (O) PERMITS AND WARRANTIES. To further protect the
               security afforded by this Agreement with respect to the Permits
               and Warranties, each Obligor agrees:

                             (i) to faithfully abide by, perform and discharge
                      in all material respects each and every obligation,
                      covenant, condition, duty and agreement which each or any
                      of the Permits and Warranties provides are to be performed
                      by such Obligor;

                             (ii) not to amend, assign, modify, cancel,
                      surrender, otherwise change or terminate any of the
                      Permits and Warranties, or waive any provision thereof in
                      any manner that would materially affect the security
                      interest of the Trustee in the Permits and Warranties,
                      without the written consent of the Trustee and the
                      Majority Noteholders, except to the extent that such
                      actions would not, individually or in the aggregate, have
                      a Material Adverse Effect; and

                             (iii) to appear in and defend any action or
                      proceeding to the extent deemed necessary in its
                      reasonable business judgment arising under, growing out of
                      or in any manner connected with the obligations,
                      covenants, conditions, duties, agreements or liabilities
                      of such Obligor under any of the Permits and Warranties,
                      at the sole cost and expense of such Obligor.

               3.3    COVENANT REGARDING ADDITIONAL REAL ESTATE AND LEASES.

                      (A) REAL ESTATE. Promptly upon any Obligor's acquisition
               of any fee or leasehold interest in any Real Estate, such Obligor
               shall deliver to the Trustee, for the benefit of the Secured
               Creditors, an executed Mortgage in form and substance
               satisfactory to the Trustee and the Majority Noteholders,
               conveying to the Trustee, for the benefit of the Secured
               Creditors, a first priority Lien on such Real Estate.


                                              20

<PAGE>

                      (b) LEASES. Promptly upon any Obligor's entry into any
               lease of Real Estate, such Obligor shall use its best efforts to
               deliver to the Trustee an executed landlord's agreement, release,
               subordination or waiver with respect to such lease in form and
               substance satisfactory to the Trustee and the Majority
               Noteholders.

               3.4    COVENANT REGARDING PROPRIETARY RIGHTS.

               Each Obligor shall take all action necessary or desirable, or
        that the Trustee may reasonably request, in order to obtain, after the
        Effective Date, sublicense agreements from licensors of Proprietary
        Rights to such Obligor, in each case, in form and substance
        satisfactory to the Trustee and the Majority Noteholders, except, in
        each case, to the extent the foregoing requirements are otherwise
        expressly waived by the Agent.

               3.5    COVENANT REGARDING NOTICES TO THE AGENT.

               Each Obligor shall deliver to the Trustee, contemporaneously with
        the delivery thereof to the Agent or any Lender, copies of any
        statement, report or certificate furnished to the Agent to the extent
        that the information contained in such statement, report or certificate
        has not already been delivered to the Trustee.

               3.6    ASSIGNMENT OF CLAIMS ACT.

               Subject to the Intercreditor Agreement, upon the request of the
        Trustee, the Obligors (or any of them) shall execute any documents or
        instruments and shall take such steps or actions reasonably required by
        the Trustee so that all monies due or to become due under any contract
        with the United States of America, the District of Columbia or any
        state, county, municipality or other domestic or foreign governmental
        entity, or any department, agency or instrumentality thereof, will be
        assigned to the Trustee, for the benefit of the Secured Creditors, and
        notice given in respect thereof in accordance with the Assignment of
        Claims Act of 1940, as amended, or any other law, rules or regulations
        relating to the assignment of any such contract or monies due or to
        become due.

        4.     REPRESENTATIONS AND WARRANTIES

               Each Obligor represents and warrants, as of the Effective Date,
        as follows:

               4.1    OWNERSHIP OF COLLATERAL.

               The Collateral being granted by such Obligor is owned solely by
        such Obligor, and no other Person has any right, title, interest, claim
        or Lien thereon, or thereto, except for Permitted Liens.

               4.2    INCORPORATION.

               Such Obligor:

                      (a) is a corporation duly incorporated, validly existing
               and in good standing under the laws of its jurisdiction of
               incorporation as set forth in the introductory sentence hereof;


                                              21

<PAGE>

                      (b) has all corporate power and authority necessary to own
               and operate its Properties and to carry on its business as now
               conducted and as presently proposed to be conducted;

                      (c) has all licenses, certificates, permits, franchises
               and other governmental authorizations necessary to own and
               operate its Properties and to carry on its business as now
               conducted and as presently proposed to be conducted, except where
               the failure to have such licenses, certificates, permits,
               franchises and other governmental authorizations, in the
               aggregate for all such failures, could not have a Material
               Adverse Effect; and

                      (d) has duly qualified or has been duly licensed, and is
               authorized to do business and is in good standing, as a foreign
               corporation, in each state in the United States of America and in
               each other jurisdiction where the failure to be so qualified or
               licensed and authorized and in good standing, in the aggregate
               for all such failures, could have a Material Adverse Effect.

               4.3    CORPORATE POWERS AND AUTHORIZATION.

               The execution, delivery and performance by such Obligor of this
        Agreement and all other instruments and documents to be delivered
        hereunder, and the transactions contemplated hereby and thereby, are
        within the corporate powers of such Obligor, have been duly authorized
        by all necessary corporate action and

                      (a) do not contravene such Obligor's certificate or
               articles of incorporation or bylaws or, to such Obligor's
               knowledge, any law, rule, regulation, order, writ, judgment,
               injunction or decree presently in effect having applicability to
               it,

                      (b) do not contravene any indenture, loan or credit
               agreement or any other material agreement, lease or instrument

                             (1) to which such Obligor is a party or

                             (2) by which such Obligor or its Property may be
                      bound or affected, and

                      (c) do not result in or require the creation of any Lien,
               security interest or other charge or encumbrance upon or with
               respect to any of its Properties (except as provided herein).

               4.4    GOVERNMENTAL FILINGS; REGISTRATION.

                      (A) FILINGS AND REGISTRATIONS. No authorization or
               approval or other action by, and no notice to or filing with, any
               Governmental Authority is required for

                             (i) the grant by each Obligor of the security
                      interest granted hereby or the due execution, delivery and
                      performance by such Obligor of this Agreement or any other
                      document or instrument to be delivered hereunder, or

                                              22

<PAGE>
            
                             (ii) the perfection of such security interest or
                      the exercise by the Trustee of its rights and remedies
                      hereunder and under the other Financing Documents,

               except for the filings of the Uniform Commercial Code financing
               statements and filings under other applicable foreign laws, in
               each case filed to perfect the Liens created hereby on the
               Collateral, and filings with the United States Patent and
               Trademark Office required by the Trademark Assignment and the
               Patent Assignment, all of which shall be duly made on or
               immediately after the Effective Date and will, upon the filing
               thereof, be in full force and effect.

                      (B) NO OTHER FINANCING STATEMENTS. No effective financing
               statement which names any Obligor as debtor is on file in any
               jurisdiction except for the financing statements in respect of
               Permitted Liens.

               4.5    ENFORCEABILITY.

               All acts and proceedings required by law and by the certificate
        or articles of incorporation and bylaws of such Obligor necessary to
        constitute this Agreement a valid and binding agreement for the uses and
        purposes set forth herein, in accordance with its terms, have been done
        and taken. Assuming the corporate existence, power and authority of, and
        the due authorization, execution and delivery hereof by, the Trustee,
        this Agreement is the legal, valid and binding obligation of such
        Obligor, enforceable in accordance with its terms, except as the
        enforceability hereof may be

                      (a) limited by applicable bankruptcy, insolvency,
               reorganization, moratorium or similar laws affecting the
               enforceability of creditors' rights generally and

                      (b) subject to the availability of equitable remedies and
               judicial discretion in the enforcement thereof.

               4.6    LOCATION OF INVENTORY AND EQUIPMENT, ETC.

                      (A) LOCATION OF INVENTORY AND EQUIPMENT. Such Obligor does
               not currently hold, nor has such Obligor held at any time during
               the four months immediately preceding the date hereof, any
               interest in tangible personal Property constituting a part of the
               Collateral which is located in any location other than the
               locations listed on ANNEX 2.

                      (B) CHANGES OF NAME AND ADDRESSES. Such Obligor has not,
               in the last five (5) years,

                             (i) changed its name or operated all or a portion
                      of its business under any name other than its present
                      legal name, except as otherwise stated on ANNEX 1, or

                             (ii) changed the address of its chief executive
                      office other than as set forth on ANNEX 1.

               4.7    PROPRIETARY RIGHTS.


                                       23

<PAGE>

               Such Obligor owns or possesses all Proprietary Rights necessary
        for the present and presently planned future conduct of its business,
        without any known conflict with the rights of others. All patents owned
        by such Obligor and all of the trademarks, service marks or trade names
        found on, or used in connection with the sale, lease or other
        disposition of, Inventory are set forth on Annex 3.

               4.8    RECEIVABLES.

                      (a) The Receivables evidenced by promissory notes or other
               instruments do not in the aggregate exceed $1,100,000 in amount.

                      (b) Each of the Receivables is a true and correct
               statement of the actual amount owing by each Account Debtor with
               respect thereto.

               4.9    REAL PROPERTY.

               None of the Obligors nor any of their respective Subsidiaries
        owns any Real Estate or leases any Real Estate other than as described
        on ANNEX 4.

               4.10   YEAR 2000 COMPLIANCE.

               Each Obligor (i) has initiated a review and assessment of all
        areas within its and each of its Subsidiaries' business and operations
        (including those affected by suppliers, vendors and customers) that
        could be adversely affected by the "Year 2000 Problem" (that is, the
        risk that computer applications used by such Obligor or any of its
        Subsidiaries (or suppliers, vendors and customers) may be unable to
        recognize and perform properly date-sensitive functions involving
        certain dates prior to and any date after December 31, 1999), (ii) has
        developed a plan and timeline for addressing the Year 2000 Problem on a
        timely basis, and (iii) to date, implemented that plan in accordance
        with that timetable. Based on the foregoing, each Obligor believes that
        all computer applications (including those of its suppliers, vendors and
        customers) that are material to its or any of its Subsidiaries' business
        and operations are reasonably expected on a timely basis to be able to
        perform properly date-sensitive functions for all dates before and after
        January 1, 2000.

               4.11   ACCURACY OF PRELIMINARY STATEMENTS.

               Each statement contained in Section 1 of this Agreement is
        accurate.

        5.     DEFAULTS -- REMEDIES

               5.1    DEFAULT REMEDIES.

                      (A)   GENERAL.  If an Event of Default exists, the Trustee
               may

                             (i) exercise all of the rights and remedies
                      conferred in this Agreement, in the Indenture and in the
                      other Financing Documents, and

                                       24
<PAGE>

                             (ii) exercise all of the rights and remedies of a
                      secured party under the Uniform Commerical Code and all of
                      the rights and remedies in this Agreement or otherwise
                      available at law or in equity.

                      (B)    RIGHTS AND REMEDIES.

                             (I) PAYMENTS TO LOCKBOX. If an Event of Default
                      exists, the Trustee may require the Obligors to instruct
                      the Account Debtors to make payment thereof directly to
                      the Trustee or to a Person or lockbox so designated by the
                      Trustee. If an Event of Default shall exist and any
                      Obligor receives any cash, checks, drafts, money orders or
                      other instruments in payment of any Receivables, it shall
                      hold the same in trust for the Trustee and shall segregate
                      the same and shall promptly deliver the same (in the
                      identical form as received) to the Trustee or to such
                      Person or lockbox as the Trustee may designate.

                             (II) NOTIFICATION OF DEBTORS. If an Event of
                      Default shall exist, each of the Obligors authorizes the
                      Trustee (but the Trustee shall not be obligated) to
                      communicate with any Account Debtor or any other Person
                      primarily or secondarily liable under a Receivable with
                      regard to any delinquent payment or other payment status
                      of such Receivable or any matter relating thereto or with
                      regard to the verification that such Account Debtor did
                      incur the obligations thereunder and the terms and
                      provisions thereof. If an Event of Default exists, each of
                      the Obligors agrees, upon the request of the Trustee, to
                      notify each Account Debtor in writing of the assignment to
                      the Trustee of its respective Receivables, the Trustee's
                      security interest therein and any other matter relating
                      thereto. Notwithstanding the immediately preceding
                      sentence, the Trustee shall, during the existence of any
                      Event of Default, have the right, without first making a
                      request of the Obligor owning such Receivable, to notify
                      each Account Debtor of the assignment to the Trustee of
                      its respective Receivable, the Trustee's security interest
                      therein and any other matter relating thereto.

                      (C) COLLECTION. The Trustee may, at any time and from time
               to time during the existence of any Event of Default, demand, sue
               for, collect or receive any money or Property at any time payable
               or receivable on account of or in exchange for, or make any
               compromise or settlement reasonably deemed desirable by the
               Trustee with respect to, any Receivable, and/or extend the time
               of payment, arrange for payment in installments, or otherwise
               modify the terms of, or release, any Receivable or any
               collateral, guaranty or insurance therefor or in respect thereof,
               all without notice to or consent by the Obligors and without
               otherwise discharging or affecting the Secured Obligations, the
               other Collateral or the security interest granted herein. Without
               limiting any of the foregoing, each of the Obligors hereby
               authorizes the Trustee and any agent or designee thereof during
               the existence of any Event of Default to take any and all steps
               in the name of such Obligor, necessary or desirable, in the
               determination of the Trustee or the Majority Noteholders, to
               collect all amounts due under any and all Receivables, including,
               without limitation, endorsing such Obligor's name on checks and
               other instruments representing collections and/or proceeds of
               Receivables and enforcing such Receivables.

                                       25
<PAGE>

                      (D) POSSESSION OF COLLATERAL; ENTRY OF PREMISES. If an
               Event of Default exists, the Trustee shall have the right, at any
               time or from time to time, to take immediate possession of any or
               all Collateral that is tangible personal Property, and may
               require each of the Obligors to assemble such Collateral, at the
               expense of each such Obligor, and to make it available to the
               Trustee at a place to be designated by the Trustee that is
               reasonably convenient to both parties, and may enter any of the
               premises of each of the Obligors (or wherever such Collateral
               shall be located) without force and with or without process of
               law, and keep and store the same on such premises until sold (and
               if such premises be the Property of any Obligor, such Obligor
               agrees not to charge the Trustee for storage thereof for a period
               of at least ninety (90) days after sale or disposition of such
               Collateral).

                      (E) BOOKS AND RECORDS. At the request of the Trustee at
               any time while an Event of Default exists, each of the Obligors
               shall assemble all of the Books and Records which evidence the
               Collateral and make the same available to the Trustee or its
               designee at a place selected by the Trustee or its designee.

                      (F) SALE OF COLLATERAL; COMMERCIAL REASONABLENESS. Each of
               the Obligors and the Trustee agree that ten (10) days notice to
               such Obligor of any public or private sale or other disposition
               of the Collateral shall be reasonable notice thereof, and such
               sale shall be at such reasonable location as the Trustee shall
               designate in such notice. Any other requirement of notice, demand
               or advertisement for sale is, to the extent permitted by law,
               waived by each of the Obligors. Sales for cash, or on credit to a
               wholesaler, retailer or user of the Collateral, at any public or
               private sale are all hereby deemed (without limitation) to be
               commercially reasonable (as defined in the Uniform Commercial
               Code as in effect in any applicable jurisdiction). The Collateral
               may be sold at any private or public sale in one or more lots.
               The Trustee shall have, to the extent permitted by applicable
               law, the right to bid at any such public sale on behalf of any
               one or more Noteholders (who shall also have the right to bid
               individually).

                      (G) CERTAIN OFFSET RIGHTS IN RESPECT OF COLLATERAL. If an
               Event of Default exists, the Trustee may also, with or without
               proceeding with sale or foreclosure or demanding payment of the
               Secured Obligations, without notice, appropriate and apply to the
               payment of the Secured Obligations and the other obligations
               secured under this Agreement any and all Collateral in its
               possession (including, without limitation, any and all balances,
               credits, deposits, accounts, reserves, or other moneys due or
               owing to any of the Obligors held by the Trustee hereunder or
               otherwise) in accordance with the provisions of the Indentures.

                      (H) UNDERTAKINGS CUMULATIVE. All covenants, conditions,
               provisions, warranties, guaranties, indemnities and other
               undertakings of the Obligors contained in this Agreement or any
               other Financing Document, or in any document referred to in this
               Agreement or any other Financing Document or contained in any
               agreement supplementary to this Agreement or any other Financing
               Document, shall be deemed cumulative to and not in derogation or
               substitution of any of the terms, covenants, conditions or
               agreements of the Obligors contained in this Agreement or any
               other Financing Document.

                      (I) PAYMENT OF EXPENSES AND CHARGES. Each of the Obligors
               shall be obligated, jointly and severally, to pay to the Trustee
               all out-of-pocket expenses (including

                                       26
<PAGE>

               court costs and reasonable attorneys' fees and expenses) of, or
               incident to, the enforcement of any of the provisions of this
               Agreement and all other charges due against the Collateral,
               including, without limitation, taxes, assessments, security
               interests, Liens or encumbrances upon the Collateral and any
               expenses, including transfer or other taxes, arising in
               connection with any sale, transfer or other disposition of
               Collateral.

               5.2    OTHER ENFORCEMENT RIGHTS.

               The Trustee may proceed to protect and enforce this Agreement by
        suit or suits or proceedings in equity, at law or in bankruptcy, and
        whether for the specific performance of any covenant or agreement in
        this Agreement contained or in execution or aid of any power in this
        Agreement granted, or for foreclosure under this Agreement, or for the
        appointment of a receiver or receivers for the Collateral or any part
        thereof, for the recovery of judgment for the obligations secured by
        this Agreement or for the enforcement of any other proper, legal or
        equitable remedy available under applicable law.

               5.3    POWER OF ATTORNEY.

               Each Obligor hereby makes, constitutes and appoints the Trustee
        the true and lawful agent and attorney in fact of such Obligor with full
        power of substitution:

                      (a) if an Event of Default shall exist, to receive, open
               and dispose of all mail addressed to such Obligor and remove
               therefrom any notes, checks, drafts, money orders or other
               instruments included in the Collateral, with full power to
               endorse the name of such Obligor upon any such checks, drafts,
               money orders, or other instruments relating to the Collateral and
               to effect the deposit and collection thereof, and the further
               right and power to endorse the name of such Obligor on any other
               document relating to the Collateral;

                      (b) if an Event of Default exists, to sign the name of
               such Obligor to drafts against its debtors, to notices to such
               debtors, to assignments and notices of assignments, financing
               statements, continuation statements or other public records or
               notices and all other instruments and documents; and

                      (c) to do any and all things necessary to take action in
               the name and on behalf of such Obligor to carry out the
               provisions of this Agreement.

        Each of the Obligors agrees, in the absence of willful wrongdoing or
        gross negligence, that neither the Trustee nor any of its agents,
        designees or attorneys-in-fact will be liable for any acts of commission
        or omission, or for any error of judgment or mistake of fact or law with
        respect to the exercise of the power of attorney granted under this
        Section 5.3. The power of attorney granted under this Section 5.3 is
        coupled with an interest and shall be irrevocable so long as any Secured
        Obligation remains outstanding.

               5.4    EFFECT OF SALE, ETC.

                      (A) TITLE. Any sale or sales pursuant to the provisions of
               this Agreement, whether under any right or power granted hereby
               or pursuant to any legal proceedings, shall operate to divest
               each of the Obligors of all of any such Obligor's right, title,
               interest, claim 

                                       27
<PAGE>

               and demand whatsoever, either at law or in equity, of, in and to
               the Collateral, or any part thereof, so sold, and any Property so
               sold shall be free and clear of any and all rights of redemption
               by, through or under such Obligor. At any such sale any holder of
               Secured Obligations may, to the extent permitted by applicable
               law, bid for and purchase the Property sold and may make payment
               therefor as set forth in Section 5.4(b), and any such Person so
               purchasing any such Property, upon compliance with the terms of
               sale, may hold, retain and dispose of such Property without
               further accountability.

                      (B) APPLICATION OF PROCEEDS. The receipt by the Trustee,
               or by any Person authorized under any judicial proceedings to
               make any such sale, of the proceeds of any such sale shall be a
               sufficient discharge to any purchaser of the Collateral, or of
               any part thereof, sold as aforesaid; and no such purchaser shall
               be bound to see to the application of such proceeds, or be bound
               to inquire as to the authorization, necessity or propriety of any
               such sale. In the event that, at any such sale, any holder of
               Secured Obligations is the successful purchaser, it shall be
               entitled, for the purpose of making settlement or payment, to use
               and apply such Collateral to its Secured Obligations by crediting
               thereon the amount apportionable and applicable thereto out of
               the net proceeds of such sale.

               5.5    DELAY OR OMISSION; NO WAIVER.

               No course of dealing on the part of the Trustee or any holder of
        Secured Obligations nor any delay or failure on the part of the Trustee
        or such holder to exercise any right shall impair such right or operate
        as a waiver of such right or otherwise prejudice the Trustee's or such
        holder's rights, powers and remedies. No waiver by the Trustee or any
        holder of Secured Obligations of any Default or Event of Default,
        whether such waiver be full or partial, shall extend to or be taken to
        affect any subsequent Default or Event of Default, or to impair the
        rights resulting therefrom except as may be otherwise expressly provided
        in this Agreement. Every right and remedy given by this Agreement, by
        any other Financing Document or by law to the Trustee or any holder of
        Secured Obligations may be exercised from time to time as often as may
        be deemed expedient by such Person.

               5.6    RESTORATION OF RIGHTS AND REMEDIES.

               If the Trustee shall have instituted any proceeding to enforce
        any right or remedy under this Agreement or under any other Financing
        Document and such proceeding shall have been discontinued or abandoned
        for any reason, or shall have been determined adversely to the Trustee,
        then and in every such case the Trustee, the Obligors and the
        Noteholders shall, subject to any determination in such proceeding, be
        restored severally and respectively to their former positions under this
        Agreement and under the other Financing Documents, and thereafter all
        rights and remedies of the Trustee and the Noteholders shall continue as
        though no such proceeding had been instituted.

               5.7    APPLICATION OF PROCEEDS.

               The proceeds of any exercise of rights with respect to the
        Collateral, or any part thereof, and the proceeds and the avails of any
        remedy under this Agreement shall be paid to the Trustee and applied by
        the Trustee for the ratable benefit of the Noteholders, based on the
        outstanding principal amount of Notes held by each Noteholder, in
        accordance with the provisions of the Indentures. If 

                                       28
<PAGE>

        there is a deficiency, each of the Obligors shall, subject always to the
        other provisions of this Agreement, remain liable therefor and shall
        forthwith pay the amount of any such deficiency to the Trustee.

               5.8    CUMULATIVE REMEDIES.

               No remedy under this Agreement or under any other Financing
        Document is intended to be exclusive of any other remedy, but each and
        every remedy shall be cumulative and in addition to any and every other
        remedy given under this Agreement or under any other Financing Document
        or otherwise existing; nor shall the giving, taking or enforcement of
        any other or additional security, collateral or guaranty for the payment
        or performance of the Secured Obligations operate to prejudice, waive or
        affect the security of this Agreement or any rights, powers or remedies
        under this Agreement, nor shall the Trustee or the holder of any Secured
        Obligation be required to look first to, enforce or exhaust any such
        other or additional security, collateral or guaranties.

               5.9    WAIVERS BY THE OBLIGORS.

                      (ii Each of the Obligors hereby waives notice of
               acceptance of this Agreement. Each of the Obligors further waives
               presentment and demand for payment of any of the Secured
               Obligations, protest and notice of dishonor or default with
               respect to any of the Secured Obligations, and all other notices
               to which such Obligor might otherwise be entitled.

                      (ii Each of the Obligors (to the extent that it may
               lawfully do so) covenants that it shall not at any time insist
               upon or plead, or in any manner claim or take the benefit or
               advantage of, any stay (except in connection with a pending
               appeal), valuation, appraisal, redemption or extension law now or
               at any time hereafter in force that, but for this waiver, might
               be applicable to any sale made under any judgment, order or
               decree based on this Agreement or any other Financing Document;
               and each of the Obligors (to the extent that it may lawfully do
               so) hereby expressly waives and relinquishes all benefit and
               advantage of any and all such laws and hereby covenants that it
               will not hinder, delay or impede the execution of any power in
               this Agreement or therein granted and delegated to the Trustee,
               but that it will suffer and permit the execution of every such
               power as though no such law or laws had been made or enacted.

               5.10   CONSENT.

               Each of the Obligors hereby consents that from time to time
        (before or after the occurrence or existence of any Event of Default,
        with or without notice to or assent from such Obligor)

                      (a) any Collateral or other security at any time held by
               or available to the Trustee or any holder of Secured Obligations
               for any of the Secured Obligations, or any other security at any
               time held by or available to the Trustee or such holder for any
               obligation of any other Person secondarily or otherwise liable
               for any of the Secured Obligations, may be exchanged with the
               Person providing such Collateral or other security, surrendered
               or released, and

                                       29
<PAGE>

                      (b) any of the Secured Obligations may be changed,
               altered, renewed, extended, continued, surrendered, compromised,
               waived or released, in whole or in part,

        in each case as the Trustee or the holder thereof may see fit, and such
        Obligor shall remain bound under this Agreement notwithstanding any such
        exchange, surrender, release, change, alteration, renewal, extension,
        continuance, compromise, waiver or release.

        6.     MISCELLANEOUS

               6.1    COMMUNICATIONS.

               All communications under this Agreement shall be in writing and
        shall be made to the Persons and addresses, and in the manner, provided
        in the Indentures.

               6.2    WAIVER AND AMENDMENT.

               No provision of this Agreement shall be waived, amended, modified
        or supplemented except by a written instrument executed by the Obligors
        and the Trustee in accordance with the Indentures.

               6.3    SURVIVAL.

               All warranties, representations, certifications and covenants
        made by the Obligors in this Agreement and in the other Financing
        Documents or in any certificate or other document or instrument
        delivered by it or on behalf of it under this Agreement or any other
        Financing Document shall be considered to have been relied upon by the
        Trustee and each holder of the Secured Obligations and shall survive the
        delivery to each holder of Secured Obligations of
        any instrument or other document evidencing the same regardless of any
        investigation made by the Trustee, any of the Noteholders or on their
        behalf. All statements in any such certificate or other instrument shall
        constitute warranties and representations by the Obligors under this
        Agreement. This Agreement shall be binding upon the Obligors and inure
        to the benefit of and be enforceable by the Trustee and the Noteholders.

               6.4    SUCCESSORS AND ASSIGNS.

               Whenever any of the parties to this Agreement is referred to,
        such reference shall be deemed to include the successors and assigns of
        such party, and all the covenants, promises and agreements in this
        Agreement contained by or on behalf of any of the Obligors, or by or on
        behalf of the Trustee, shall bind and inure to the benefit of the
        respective successors and assigns of such parties whether so expressed
        or not.

               6.5    REPRODUCTION OF DOCUMENTS.

               This Agreement and all documents relating thereto may be
        reproduced by the Trustee by any photographic, photostatic, microfilm,
        micro-card, miniature photographic, digital or other similar process and
        the Trustee may destroy any original document so reproduced. Each of the
        Obligors agrees and stipulates that any such reproduction shall be
        admissible in evidence as the original itself in any judicial or
        administrative proceeding (whether or not the original is in existence

                                       30
<PAGE>

        and whether or not such reproduction was made by the Trustee in the
        regular course of business) and that any enlargement, facsimile or
        further reproduction of such reproduction shall likewise be admissible
        in evidence.

               6.6    ADDITIONAL PARTIES.

               Any Person which becomes a Subsidiary of the Company or any other
        Obligor after the Effective Date shall execute and deliver an
        acknowledgement and agreement in the form of Exhibit A and, upon
        acceptance thereof by the Trustee, such Subsidiary shall become an
        "Obligor" under this Agreement for all purposes and shall be deemed to
        have made the covenants and agreements of each Obligor set forth herein
        as of the date of the execution and delivery of such acknowledgment and
        agreement (including, without limitation, the grant of the security
        interest contained in Section 3.1) and shall comply with all other
        obligations to be performed by an Obligor party hereto.

               6.7    CONSISTENT WITH INDENTURES AND INTERCREDITOR AGREEMENT.

               Any and all rights granted to the Trustee under this Agreement
        are to be held and exercised by the Trustee as trustee for the benefit
        of the Noteholders, pursuant to the provisions of the Indentures. To the
        extent set forth in the Financing Documents and any other document or
        instrument creating or evidencing any Secured Obligation, each of the
        Noteholders shall be a beneficiary of the terms of this Agreement. Any
        and all obligations under this Agreement of the parties to this
        Agreement, and the rights and indemnities granted to the Trustee under
        this Agreement, are created and granted consistent with, and in
        furtherance (and not in limitation) of, the terms of the Indentures and
        the Intercreditor Agreement. Nothing in this Agreement expressed or
        implied is intended or shall be construed to give to any Person other
        than the Obligors, the Noteholders, and the Trustee any legal or
        equitable right, remedy or claim under or in respect of this Agreement
        or any covenant, condition or provision herein contained, and all such
        covenants, conditions and provisions are and shall be held to be for the
        sole and exclusive benefit of the Obligors, the Noteholders and the
        Trustee.

               6.8    TERM OF AGREEMENT.

               This Agreement shall be and remain in full force and effect until
        all of the Secured Obligations shall have been indefeasibly paid in
        full; PROVIDED, that all indemnities of the Obligors contained in this
        Agreement shall survive, and remain operative and in full force and
        effect regardless of, the termination of this Agreement.

               6.9    ENTIRE AGREEMENT.

               This Agreement constitutes the final written expression of all of
        the terms hereof and is a complete and exclusive statement of those
        terms.

               6.10   EXECUTION IN COUNTERPART

               This Agreement may be executed in one or more counterparts and
        shall be effective when at least one counterpart shall have been
        executed by each party to this Agreement, and each set of 

                                       31
<PAGE>

        counterparts which, collectively, show execution by each party to
        this Agreement shall constitute one duplicate original.

             [Remainder of page blank. Next page is signature page.]





                                       32
<PAGE>

               IN WITNESS WHEREOF, EACH OF THE OBLIGORS has caused this
        Agreement to be executed by an authorized officer, and U.S. BANK
        NATIONAL ASSOCIATION, as Trustee, has caused this Agreement to be
        executed by an authorized officer, all as of the day and year first
        above written.
                                    TULTEX CORPORATION


                                    By:__________________________________
                                    Name:
                                    Title:

                                    CALIFORNIA SHIRT SALES, INC.


                                    By:__________________________________
                                    Name:
                                    Title:

                                    DOMINION STORES, INC.


                                    By:__________________________________
                                    Name:
                                    Title:

                                    TULTEX/T-SHIRT CITY, INC.


                                    By:__________________________________

                                    Name:
                                    Title:

                                    TRACK GEAR, INC.


                                    By:__________________________________

                                    Name:
                                    Title:






          [Signature Page to Master Collateral and Security Agreement]

<PAGE>



                                   AKOM, LTD.


                                   By:__________________________________

                                   Name:
                                   Title:

                                   DOMINION DISTRIBUTION, INC.

                                   By:__________________________________

                                   Name:
                                   Title:

                                   LIGA MAYOR DE MEXICO, S.A. DE C.V.


                                   By:__________________________________

                                   Name:
                                   Title:

                                   TULTEX SUBSIDIARY (VA), INC.


                                   By:__________________________________

                                   Name:
                                   Title:

                                   TULTEX SUBSIDIARY (MASS), INC.


                                   By:__________________________________

                                   Name:
                                   Title:

                                   TULTEX CANADA, INC.


                                    By:__________________________________

                                    Name:
                                    Title:


          [Signature Page to Master Collateral and Security Agreement]

<PAGE>



                                     SWEATJET INCORPORATED


                                     By:__________________________________

                                     Name:
                                     Title:

                                     TULTEX INTERNATIONAL, INC.


                                     By:__________________________________

                                     Name:
                                     Title:

                                     U.S. BANK NATIONAL ASSOCIATION,
                                     AS TRUSTEE


                                     By:__________________________________

                                     Name:
                                     Title:

          [Signature Page to Master Collateral and Security Agreement]

<PAGE>



                                     ANNEX 1

     PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY AND THE SUBSIDIARY GRANTORS;
                          LOCATION OF BOOKS AND RECORDS

                                [To be Provided]



                                    Annex 1-1

<PAGE>



                                     ANNEX 2

                      LOCATIONS OF INVENTORY AND EQUIPMENT


                                [To be Provided]


                                    Annex 2-1

<PAGE>



                                     ANNEX 3

                       TRADEMARKS, TRADE NAMES AND PATENTS


                                [To be Provided]


                                    Annex 3-1

<PAGE>



                                     ANNEX 4

                                   REAL ESTATE


                                [To be Provided]

                                    Annex 4-1

<PAGE>



                                     ANNEX 5

                         FIVE SPECIFIED REAL PROPERTIES


        1.  Brownsville, TX -- Dominion Distribution, Inc.

        2. Fullerton, CA - Tultex Corporation/California Shirt Sales, Inc.

        3. San Diego, CA - California Shirt Sales, Inc.

        4. Oakland, CA - Tultex Corporation/California Shirt Sales, Inc.

        5.Cincinnati/Sycamore Township, OH (new location) - Tultex Corporation,
          as sublessee (T-Shirt City)









                                    Annex 5-2

<PAGE>



                                     ANNEX 6

                         NINE SPECIFIED REAL PROPERTIES

   1.  Phoenix, AZ - Tultex Corporation, sublessee (Dominion Distribution, Inc.)

   2. Charlotte, NC - Track Gear, Inc.

   3. Tempe, AZ - Tultex Corporation (California Shirt Sales, Inc.)

   4. Las Vegas, NV - - Tultex Corporation/California Shirt Sales, Inc.

   5. Honolulu, HI - Tultex Corporation/California Shirt Sales, Inc.

   6. Kent, WA - Tultex Corporation/California Shirt Sales, Inc.

   7. Charlotte, NC - Tultex/T-Shirt City, Inc.

   8. Mansfield, MA - Tultex/T-Shirt City, Inc.

   9. Mississaugua, Ontario (warehouse) - Tultex Canada



                                    Annex 6-3

<PAGE>



                                                                       EXHIBIT A

                            [FORM OF ACKNOWLEDGMENT AND AGREEMENT]

                                 ACKNOWLEDGMENT AND AGREEMENT

MASTER COLLATERAL AND SECURITY AGREEMENT, DATED AS OF MAY 7, 1999, AMONG TULTEX
CORPORATION, THE SUBSIDIARY GRANTORS PARTY THERETO, AND U.S. BANK NATIONAL
ASSOCIATION, AS TRUSTEE (AS MAY BE AMENDED, RESTATED OR OTHERWISE MODIFIED FROM
TIME TO TIME, THE "SECURITY AGREEMENT")

                                                                          [DATE]

               Reference is made to Section 6.6 of the Security Agreement as
        defined above; capitalized terms used herein and not otherwise defined
        herein shall have the meanings specified by the Security Agreement. The
        undersigned is a Subsidiary of the Company or another Obligor and, in
        accordance with the terms of the Security Agreement, is required to
        become a party to the Security Agreement. By execution and delivery of
        this Acknowledgment and Agreement and, upon acceptance hereof by the
        Trustee, the undersigned hereby becomes a party to the Security
        Agreement for all purposes, agrees to comply with all of the covenants
        and agreements of each Obligor set forth in the Security Agreement as of
        the date hereof (including, without limitation, the grant of the
        security interest contained in Section 3.1 of the Security Agreement)
        and agrees to comply with all other obligations to be performed by an
        Obligor under the Security Agreement.

               The correct legal name and address of the undersigned and its
        address for all communications is set forth on Annex 1 hereto.

               This Acknowledgment and Agreement hereby incorporates by
        reference the provisions of the Security Agreement, which are deemed to
        be a part hereof, and this Acknowledgment and Agreement shall also be
        deemed to be a part of the Security Agreement.

                                                  [NAME OF OBLIGOR]


                                                   By:________________________
                                                   Name:
                                                   Title:

        Accepted as of the date first above written:
        U.S. BANK  NATIONAL ASSOCIATION, as Trustee


        By:____________________________
        Name:
        Title:

                                         Exhibit A-1

<PAGE>


                                     Annex 1

                    [NAME AND ADDRESS OF OBLIGOR TO BE ADDED]





                                   Exhibit A-2

<PAGE>