EXHIBIT 10.16.14


                         GUARANTY AND SECURITY AGREEMENT

   Borrowers:     Tarrant  Company  Limited  ("TCL"),  Marble Limited ("ML") and
                  Trade  Link  Holdings  Limited  ("TLHL"),   each  corporations
                  organized  under the laws of Hong Kong  (TCL,  ML and TLHL may
                  hereinafter be referred to  collectively  as  "BORROWERS"  and
                  individually as "BORROWER")


         WHEREAS,   the   undersigned,   TARRANT  APPAREL  GROUP,  a  California
corporation  ("TAG"),  FASHION  RESOURCE (TCL),  INC., a California  corporation
("FR" and, together with TAG,  collectively  "PARENTS" and each individually,  a
"PARENT")  have  requested  that UPS CAPITAL  GLOBAL TRADE  FINANCE  CORPORATION
(herein called "LENDER") extend credit or make certain financial  accommodations
to Borrowers,  or renew or extend, in whole or in part, existing indebtedness or
financial  accommodations of Borrowers to Lender, and Lender has extended credit
or extended or renewed  existing  indebtedness or made financial  accommodations
and/or may in the future extend credit or extend or renew existing  indebtedness
or make  certain  financial  accommodations  by  reason of such  request  and in
reliance upon this Guaranty and Security Agreement;

         NOW,  THEREFORE,  in  consideration  of ten  dollars and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged the parties hereto agree as follows:

         1.       GUARANTEE.  Each Parent hereby  unconditionally  guarantees to
Lender the punctual payment when due, whether by acceleration or otherwise,  and
at all times thereafter, of all indebtedness and other obligations of Borrowers,
or any of them, or any other person,  to Lender (herein  called the  "GUARANTEED
OBLIGATIONS")  arising  pursuant to that  certain Loan  Agreement  relating to a
US$5,000,000 loan, dated the date hereof,  among Borrowers and Lender, as it may
be modified, amended, restated,  supplemented or expanded from time to time (the
"LOAN  Agreement"),  and the  other  Finance  Documents.  References  herein  to
Borrowers, or any of them, shall be deemed to include,  without limitation,  any
successor  corporations  to such  Borrower or Borrowers.  Any other  capitalized
terms used herein,  but not expressly  defined  herein,  shall have the meanings
given to such terms in the Loan Agreement;  provided that references  therein to
"Borrower,"  "Borrowers,"  "Obligor" or "Obligors" shall be deemed references to
Parent or Parents for purposes hereof.

         2.       CONSENT OF PARENTS.  Each of the Parents consents that, at any
time, and from time to time, either with or without consideration,  the whole or
any part of any security now or hereafter  held for any  Guaranteed  Obligations
may be substituted,  exchanged, compromised,  impaired, released, or surrendered
with or without  consideration;  the time or place of payment of any  Guaranteed
Obligations or of any security  thereof may be changed or extended,  in whole or
in part; Borrowers, or any of them, may be granted indulgences generally; any of
the  provisions  of any  note or  other  instrument  evidencing  any  Guaranteed
Obligations or any security therefor may be modified or waived; any party liable
for the payment  thereof  (including but not being limited to any  co-guarantor)
may be granted  indulgences or released;  neither the  termination of existence,
bankruptcy  nor lack of authority of  Borrowers,  or any of them,  or any one or
more of the  guarantors,  including any of Parents,  shall affect the continuing
obligation of any other  guarantor,  including  any of the Parents,  and that no
claim need be asserted against the personal representative, guardian, custodian,
trustee  or debtor in  bankruptcy  or  receiver  of any  deceased,  incompetent,
bankrupt or insolvent guarantor; any deposit balance to the credit of Borrowers,
or any of them,  or any other  party  liable for the  payment of the  Guaranteed
Obligations or liable upon any security therefor may be released, in whole or in
part, at, before and/or after the stated,  extended or  accelerated  maturity of
any Guaranteed  Obligations;  and Lender may release,  discharge,  compromise or
enter into any accord and  satisfaction  with respect to any  collateral for the
Guaranteed Obligations, or the liability of Borrowers, or any of them, or any of
the  Parents,  or any  liability of any other  person  primarily or  secondarily
liable on any of the  Guaranteed  Obligations,  all without notice to or further
assent by the Parents,  who shall remain bound hereon,  notwithstanding any such
exchange, compromise, surrender, extension, renewal, acceleration, modification,
indulgence, release, discharge or accord and satisfaction.


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         3.       PAYMENT UPON DEFAULT; SECURITY FOR GUARANTEED OBLIGATIONS. The
security  interest and security title granted by each Parent under this Guaranty
and Security Agreement secures the payment of all of the Guaranteed Obligations.
Without limiting any of the foregoing,  upon demand by Lender,  made at any time
hereafter  during  which an "Event of  Default"  (as that  term is  defined  and
described in the Loan  Agreement)  has occurred and is  continuing,  each Parent
agrees to pay to Lender  upon  demand  the full  amount  which  would be payable
hereunder by the Parents if all such  Guaranteed  Obligations  were then due and
payable and this  Guaranty  and  Security  Agreement  secures the payment of all
amounts which constitute part of the Guaranteed Obligations and would be owed by
the  Borrowers  or the  Parents  to the  Lender  but for the fact  that they are
unenforceable or not allowable due to the existence of an insolvency  proceeding
involving the Borrowers or the Parents.

         4.       GUARANTY OF PAYMENT.  THIS IS A GUARANTY OF PAYMENT AND NOT OF
COLLECTION. The liability of the Parents on this Guaranty and Security Agreement
shall be continuing, direct and immediate and not conditional or contingent upon
either the pursuit of any remedies  against  Borrowers,  or any of them,  or any
other  person or  foreclosure  of any security  interests or liens  available to
Lender, its successors,  endorsees or assigns. Lender may accept any payment(s),
plan for adjustment of debts, plan of reorganization or liquidation,  or plan of
composition  or  extension  proposed by, or on behalf of,  Borrowers,  or any of
them, or any other  guarantor  without in any way affecting or  discharging  the
liability of the Parents hereunder.  If the Guaranteed Obligations are partially
paid, the Parents shall remain  jointly and severally  liable for any balance of
such  Guaranteed  Obligations.  This  Guaranty and Security  Agreement  shall be
revived  and  reinstated  in the event  any  payment  received  by Lender on any
Obligation is required to be repaid or rescinded under present or future federal
or state law or regulation relating to bankruptcy, insolvency or other relief of
debtors.

         5.       GRANT OF  SECURITY.  Each Parent  hereby  grants,  assigns and
pledges to Lender a security  interest in and security title to (together with a
right of setoff) the  following  property  of such  Parent,  including,  without
limitation,  such Parent's  right,  title and interest in and to the  following,
whether now owned and  existing or  hereafter  created or acquired  and wherever
located,  and all substitutions  therefor,  accessions  thereto and improvements
thereon (collectively,  the "COLLATERAL"), to secure prompt repayment of any and
all of the  Guaranteed  Obligations  and to secure  prompt  performance  by such
Parent of its  covenants  and duties under the  Guaranty  and the other  Finance
Documents to which it is a party:

                  (a)      any and all  Inventory  (as  defined  in the  Uniform
Commercial Code) financed pursuant to the Facility Agreement,  acquired directly
or indirectly by such Parent from one or more Borrowers (the "Inventory");

                  (b)      that certain  deposit  account  maintained  by TAG at
Union Bank of  California,  N.A.,  Account  Number  2100716472  and any proceeds
thereof; and

                  (c)      proceeds   and   products,    whether   tangible   or
intangible,  of any of the foregoing,  including  proceeds of insurance covering
any  or  all  of the  foregoing,  and  any  and  all  accounts,  books,  general
intangibles,  inventory,  investment  property,  negotiable  collateral,  money,
deposit accounts,  or other tangible or intangible  property  resulting from the
sale, exchange, collection, or other disposition of any of the foregoing, or any
portion thereof or interest therein, and the proceeds thereof.

         To the extent not  prohibited by law, each of the Parents hereby grants
to Lender a security interest in and security title and hereby assigns, pledges,
transfers and conveys to Lender any balance or deposit  accounts of such Parent,
whether such accounts be general or special,  or  individual or multiple  party,
and upon all drafts, notes, or other items deposited for collection or presented
for payment by such Parent with Lender,  exclusive  of any such  property in the
possession or control of Lender as a fiduciary  other than as agent,  and Lender
may at any time, without demand or notice,  appropriate and apply any of such to
the payment of any of the Guaranteed  Obligations,  as and when due,  except for
other indebtedness, obligations and liabilities owing to Lender.

         6.       EACH PARENT REMAINS  LIABLE.  Anything  herein to the contrary
notwithstanding,  (a) each Parent shall remain  liable under any  contracts  and
agreements relating to the Collateral to the extent set forth therein to perform
all of the  duties  and  obligations  thereunder  to the same  extent as if this
Guaranty  and  Security  Agreement  had not been  executed,  (b) the exercise by
Lender of any of the rights  hereunder  shall not release either Parent from any
of its duties or obligations under any contracts and agreements  relating to the
Collateral, and (c) Lender Group


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<PAGE>


shall not have any  obligation or liability  under any contracts and  agreements
relating to the  Collateral by reason of this  Guaranty and Security  Agreement,
nor shall  Lender be obligated  to perform any of the  obligations  or duties of
either  Parent  thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.

         7.       WAIVER.  Each of the Parents expressly  waives:  (a) notice of
acceptance  of this  Guaranty and Security  Agreement  and of all  extensions or
renewals of credit or other  financial  accommodations  to Borrowers,  or any of
them;  (b)  presentment  and  demand  for  payment  of  any  of  the  Guaranteed
Obligations;  (c) protest and notice of dishonor or of default to the Parents or
to any other party with  respect to any of the  Guaranteed  Obligations  or with
respect to any security  therefor;  (d) any invalidity or disability in whole or
in part at the time of the  acceptance  of, or at any time with  respect to, any
security for the Guaranteed  Obligations or with respect to any party  primarily
or secondarily  liable for the payment of Guaranteed  Obligations to Lender; (e)
the fact that any security  for the  Guaranteed  Obligations  may at any time or
from time to time be in default or be inaccurately  estimated or may deteriorate
in  value  for any  cause  whatsoever;  (f) any  diligence  in the  creation  or
perfection of a security  interest or collection or protection of or realization
upon  the  Guaranteed  Obligations  or  any  security  therefor,  any  liability
hereunder,  or any party  primarily  or  secondarily  liable for the  Guaranteed
Obligations  or any lack of  commercial  reasonableness,  except  to the  extent
required by  applicable  law, in dealing with any  security  for the  Guaranteed
Obligations;  (g) any duty or  obligation on the part of Lender to ascertain the
extent  or  nature  of any  security  for  the  Guaranteed  Obligations,  or any
insurance or other rights  respecting  such  security,  or the  liability of any
party primarily or secondarily liable for the Guaranteed Obligations, or to take
any steps or actions to safeguard, protect, handle, obtain or convey information
respecting,  or otherwise follow in any manner, any such security,  insurance or
other rights;  (h) all benefits and defenses it may have under  California Civil
Code  Sections  2845,  2849 and 2850 or any similar laws of Georgia or any other
jurisdiction with respect to its obligations under this guaranty,  including any
duty or  obligation of Lender to proceed to collect the  Guaranteed  Obligations
from, or to commence an action  against,  Borrowers,  or any of them,  any other
guarantor,  or any other person,  or to resort to any security or to any balance
of any deposit  account or credit on the books of Lender in favor of  Borrowers,
or any of them,  or any other  person,  or pursue any other rights or remedy for
the  undersigned's  benefit,  despite any notice or request of the Parents to do
so; (i) any rights of the Parents  pursuant to Official Code of Georgia  Section
10-7-24 or any  similar or  subsequent  law;  (j) the right to assert any of the
benefits under any statute providing  appraisal or other rights which may reduce
or prohibit any deficiency judgments in any foreclosure or other action; (k) all
other notices to which the Parents might  otherwise be entitled;  and (l) demand
for payment  under this  Guaranty  and Security  Agreement.  Each of the Parents
hereby expressly waives,  for Lender's benefit and the benefit of Borrowers,  or
any of them,  and any  other  guarantor,  maker or  endorser  of the  Guaranteed
Obligations,  until the termination of this Guaranty and Security  Agreement and
the full  payment of the  Guaranteed  Obligations  any and all claims or actions
against Borrowers, or any of them, any other guarantor, maker or endorser of the
Guaranteed  Obligations and any and all rights of recourse  against any property
or assets of Borrowers,  or any of them, any other guarantor,  maker or endorser
of the Guaranteed Obligations (including,  without limitation,  any security for
the Guaranteed Obligations) arising out of or related to any payment made by the
Parents  under  this  Guaranty  and  Security  Agreement,   including,   without
limitation, any claim of the Parents for subrogation, reimbursement, exoneration
or indemnity that the Parents may have against Borrowers, or any of them, or any
other guarantor, maker or endorser of the Guaranteed Obligations and any benefit
of, and any other  right to  participate  in, any  security  for the  Guaranteed
Obligations or any guaranty of the Guaranteed  Obligations now or hereafter held
by Lender.

         8.       REPRESENTATIONS,  WARRANTIES AND COVENANTS. Each Parent hereby
represents, warrants and covenants as follows:

                  (a)      The exact  legal name of such  Parent is set forth in
the  introductory  paragraph of this Guaranty and Security  Agreement,  and such
Parent does not conduct as of the date hereof,  and, during the five-year period
immediately  preceding the date hereof,  has not  conducted,  business under any
trade  name or other  fictitious  name other than those that may be set forth on
SCHEDULE 1 attached hereto. The Internal Revenue Service taxpayer identification
number of each Parent is set forth on SCHEDULE 1.

                  (b)      All of the  Inventory  of  each  Parent,  other  than
Inventory in transit, is located in the United States at the places specified in
SCHEDULE 2 attached  hereto.  The chief  place of business  and chief  executive
office of each  Parent is at the  address  set forth on  SCHEDULE 2. The offices
where each Parent keeps records  concerning  its  Collateral  are located at the
addresses  specified in SCHEDULE 2 attached  hereto.  None of the  Collateral of
either Parent is evidenced by a promissory note or other instrument,  other than
a note or other


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instrument which has been delivered to Lender.  Each Parent covenants and agrees
that it will not (i) maintain Collateral at any location other than those listed
on SCHEDULE 2 or in transit between such locations, (ii) otherwise change or add
to any of such locations, or (iii) change the location of its principal place of
business or chief  executive  office from the  locations  identified  as such on
SCHEDULE 2,  unless it gives  Lender at least  twenty  (20) days' prior  written
notice thereof and executes any and all financing statements and other documents
that Lender reasonably requests in connection therewith.

                  (c)      SCHEDULE  3  attached   hereto  sets  forth  a  true,
complete and correct list of (i) all leases for real property on which Inventory
of such Parent is stored  (together  with the name and  mailing  address of each
lessor with respect  thereto) and (ii) the name and address of each  location at
which  Inventory of such Parent is stored with a  reprocessor,  warehouseman  or
other  bailee  (together  with  the  name  and  address  of  each   reprocessor,
warehouseman or bailee with respect thereto).

                  (d)      As of the  date  hereof,  no  Parent  owns  any  real
property.

                  (e)      This Guaranty and Security  Agreement creates a valid
security  interest  in the  Collateral  of such  Parent to the extent a security
interest  therein can be created under Article 9 of the Uniform  Commercial Code
(the  "CODE"),  securing  the  payment of the  Guaranteed  Obligations,  and all
filings and other  actions  necessary  or  desirable to perfect and protect such
security  interest  have been duly taken or will have been taken upon the filing
of Uniform  Commercial Code financing  statements listing the applicable Parent,
as debtor,  and Lender,  as secured  party,  with the  Secretary of State of the
State of  California,  except  for any  action  necessary  to  perfect  Lender's
security interest in any Collateral to the extent a security interest therein is
not perfected by the filing of a financing  statement  under the Code.  Upon the
making of such filings,  Lender shall have a perfected  security interest in the
Collateral of the applicable  Parent to the extent such security interest can be
perfected by the filing of a financing statement under the Code.

                  (f)      The parties intend that all of the  Collateral  shall
remain  personal  property  regardless  of  the  manner  of  its  attachment  or
affixation to real property.

                  (g)      At any time upon the  request of Lender,  such Parent
shall  execute  and  deliver to Lender all  financing  statements,  continuation
financing   statements,   fixture   filings,   security   agreements,   pledges,
assignments,  endorsements  of certificates  of title,  applications  for title,
affidavits,  reports, notices,  schedules of accounts,  letters of authority and
all other documents that Lender reasonably may request,  in form satisfactory to
Lender, to perfect and continue perfected the liens of Lender in the Collateral,
and in order to fully  consummate all of the  transactions  contemplated  by the
Loan Agreement and under the other Finance Documents.

                  (h)      Each Parent is a corporation  duly  incorporated or a
corporation  duly organized and validly  existing and in good standing under the
laws of the State of California having the power and authority to own its assets
and to conduct  the  business  and  operations  which it conducts or proposes to
conduct.

                  (i)      Each  Parent  has full power and  authority  to enter
into and perform this Guaranty and Security  Agreement and any other document to
be entered into by it pursuant thereto and has taken all necessary  corporate or
other action to authorize the execution,  delivery and  performance of each such
document.

                  (j)      All actions,  conditions  and things  required by all
applicable  laws and  regulations  to be taken,  fulfilled,  obtained or done in
order (i) to enable each Parent  lawfully  to enter  into,  exercise  its rights
under and  perform  and comply  with its  obligations  under this  Guaranty  and
Security  Agreement and any other  document to be entered into pursuant  thereto
and (ii) to ensure  that  those  obligations  are  valid,  legally  binding  and
enforceable in accordance with their respective terms.

                  (k)      The  execution by each Parent of, and the exercise by
such Parent of its rights and  performance of or compliance with its obligations
under this  Guaranty and Security  Agreement do not and will not (i) violate (A)
any law or  regulation to which it or any of its assets is subject or (B), to an
extent or in a manner which has or could have a material  adverse  effect on it,
any  agreement to which it is a party or which is binding on it or its assets or
(ii) conflict with its organizational documents and in particular will not cause
any limit on the


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<PAGE>


borrowing  or other  powers of any of the Parents or the exercise of such powers
by its board of directors to be exceeded.

                  (l)      The  obligations  of each Parent under this  Guaranty
and  Security  Agreement  are  legal,  valid  and  binding  and  enforceable  in
accordance with their respective terms;

                  (m)      Except as disclosed  in writing and  attached  hereto
and agreed by Lender prior to the date of this Guaranty and Security  Agreement,
no  Parent  is  involved   or  engaged  in  any   litigation,   arbitration   or
administrative  proceedings  (whether  as  plaintiff  or  defendant)  which,  if
adversely  determined,  would be  reasonably  likely to have a material  adverse
effect on the Parents  taken as a whole nor, to the best of its knowledge is any
such litigation,  arbitration or administrative  proceedings threatened, nor are
there any circumstances likely to give rise to any such litigation,  arbitration
or proceedings.

                  (n)      No  Parent  is in  breach  of or  default  under  any
agreement or arrangement  or any statutory or legal  requirement to an extent or
in a manner which has or could reasonably be expected to have a material adverse
effect on the Parents  taken as a whole and no Event of Default has occurred and
is continuing.

                  (o)      No  encumbrance  exists  over the  present  or future
assets of any Parent except for encumbrances permitted in Section 8(jj)(vii).

                  (p)      The execution by each Parent of each of this Guaranty
and  Security  Agreement  and the exercise by each such Parent of its rights and
performance of or compliance with its obligations  thereunder will not result in
the existence of or oblige any Parent to create any encumbrance  over all or any
of its present or future assets except for encumbrances permitted herein.

                  (q)      The financial statements of each Parent were prepared
in accordance with GAAP and give a true and fair view of the financial condition
of the Parents at the date as of which they were prepared and the results of the
Parent's  business  and  operations  during  the  financial  year then ended and
disclose or reserve  against all  liabilities  (contingent or otherwise) of each
Parent  as at that  date  and all  unrealized  or  anticipated  losses  from any
commitment  entered  into by each member of the Group and which  existed on that
date.

                  (r)      No   Parent   has   any   indebtedness   except   for
indebtedness  permitted  herein and indebtedness as of the date hereof disclosed
in such  Parent's  most  recent  10-K filed  with the  Securities  and  Exchange
Commission for the most recent  Financial Year and the 10-Qs and 8-Ks filed with
the  Securities  and Exchange  Commission  for the most recent  Financial  Year,
copies of which has been provided to Lender.

                  (s)      Each Parent is in compliance in all material respects
with applicable  Environmental  Laws and no condition exists or act or event has
occurred  which  could  give rise to any  material  breach  of, or any  material
liability of any kind under, any Environmental Laws.

                  (t)      Each  Parent is in  possession  of all  Environmental
Authorizations  required for the conduct of its business or  operations  (or any
part  thereof) and no Parent has breached any of the terms or  conditions of any
such Environmental  Authorization,  except where any failure to possess any such
Environmental  Authorization  or any  breach  thereof  could not  reasonably  be
expected to have a material adverse effect on the Parents taken as a whole.

                  (u)      No Parent has received any summons,  complaint, order
or similar  written  notice  that it is not in  compliance  with,  or any public
authority is investigating its compliance with, any  Environmental  Laws or that
it is or may be liable to any other  person as a result of a potential or actual
discharge of a Hazardous Substance; and

                  (v)      No Parent has  received  notice  that its  present or
past  operations  is the subject of any  investigation  by any public  authority
evaluating  whether any  remedial  action is needed to respond to a potential or
actual discharge of a Hazardous Substance.


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                  (w)      To the knowledge of the Parents, upon due inquiry, no
Hazardous Substance has at any time been used,  disposed of, generated,  stored,
transported,  dumped, released, deposited, buried, discharged or emitted at, on,
from or under any premises owned, leased, occupied or controlled by any Parent.

                  (x)      No  Parent  has  entered  into  any  negotiations  or
settlement agreements with any person (including,  without limitation, any prior
owner of its property)  imposing material  obligations or liabilities on it with
respect to any remedial action in response to the potential or actual  discharge
of a Hazardous Substance or environmentally related claim;

                  (y)      Each  Parent  has  filed  all tax  returns  and other
reports  required to be filed and has paid all taxes due and payable by it (save
where the same are being contested in good faith and by appropriate  proceedings
and where adequate  reserves are being  maintained with respect  thereto) and no
material  claims  are being  asserted  with  respect  to taxes  save for  normal
assessments.

                  (z)      There  has been no  material  adverse  change  in the
financial  condition  of any  Parent  since  the date to which  the most  recent
financial  statements  delivered to Lender were made up nor in the  consolidated
financial  condition,  business,  assets or operations of the Parents since that
date.

                  (aa)     All information provided by any Parent to Lender from
time to time in  connection  herewith  was  true  and  correct  in all  material
respects  as at its date or as at the date it was  provided  and did not at that
date omit anything  material and no adverse  change has occurred since such date
which renders any such information misleading in a material respect; in addition
full  disclosure  has been made to Lender  prior to the date hereof of all other
facts in  relation  to the  assets  of the  Parents  as are  material  and ought
properly  to be made known to any  person  proposing  to advance  moneys or make
facilities  available  to the Parents  and to enable a true and correct  view of
such assets to be obtained and all expressions of expectation, intention, belief
and opinion contained therein were correct in all material respects and honestly
made on reasonable grounds after due and careful enquiry.

                  (bb)     No  Parent  has  done or  omitted  to do or  suffered
anything to be done or not to be done which has or might  render any policies of
insurance  taken out by it void or voidable  and, to the best of its  knowledge,
information  and belief,  there are no  circumstances  which would or might give
rise to any material claim under any such policies of insurance.

                  (cc)     All necessary  licenses,  consents and authorizations
have been  obtained  by each  Parent for the  carrying  on of its  business  and
operations as the same are currently carried on in all material respects and are
in full force and effect and there are no circumstances  which indicate that any
of such licenses,  consents and authorizations are likely to be revoked in whole
or in part in the ordinary course of events the effect of which revocation would
be likely to have a material adverse effect on any Parent.

                  (dd)     No Parent has taken any corporate action nor have any
other steps been taken or legal proceedings been started or (to the best of such
Parent's knowledge and belief) threatened against any Parent for its winding-up,
dissolution  or  re-organization  (other  than for the  purposes  of a bona fide
solvent scheme of reconstruction or amalgamation  previously approved in writing
by Lender) or for the appointment of a receiver,  administrator,  administrative
receiver, trustee or similar officer of it or of any or all of its assets.

                  (ee)     The  Parents  shall  maintain,  at all times,  books,
records and accounts which are complete and correct in all material respects and
in relation to which timely entries are made of their transactions in accordance
with GAAP. The Parents shall, by means of appropriate  entries,  reflect in such
accounts and in all financial statements proper liabilities and reserves for all
taxes and proper  provision for depreciation and amortization of any property or
asset and bad debts, all in accordance with GAAP.

                  (ff)     The  Parents  shall  without  notice   following  the
occurrence of a Default which is  continuing,  or otherwise  upon  receiving not
less than  forty-eight (48) hours' notice from Lender at any reasonable time and
by  arrangement  with the relevant  Parent,  permit and procure that each Parent
permits Lender or any person authorized by Lender to have access to its premises
and accounting records and to make extracts from and take


                                       6
<PAGE>


copies of its  accounting  records  and to discuss  any  matter  with any of its
personnel and officers and make such inquiries as Lender may reasonably  require
from time to time, the reasonable costs and expenses  properly  incurred thereby
to be for the account of the relevant Parent.

                  (gg)     [Intentionally omitted].

                  (hh)     Each  of the  Parents  shall  deliver  to  Lender  in
sufficient copies for Lender:

                           (i)      as soon as the same become available, but in
any event within 100 days after the end of each  Financial  Year,  its financial
statements for such  Financial  Year together with the audited  accounts of each
Parent for such Financial Year;

                           (ii)     as soon as the same become available, but in
any event within 45 days of the end of each Management  Accounting  Period,  its
Management Accounts as at the end of and for that Management  Accounting Period,
and a consolidation of those Management  Accounts showing the financial position
for the Financial Year to date;

                           (iii)    together with the delivery of the Management
Accounts,  a compliance  certificate duly signed by one of its directors and its
chief financial or accounting  officer  confirming that, at all times during the
relevant  Management  Accounting  Period,  all the  financial  covenants set out
herein have been fully complied with;

                           (iv)     at the same time as sent to its shareholders
or creditors generally, any circular, document or other written information sent
to its shareholders or creditors as such; and

                           (v)      from time to time on the  request of Lender,
such information about the business,  operations and financial condition of each
Parent as Lender may reasonably require.

                  (ii)     Each Parent shall ensure that:

                           (i)      each set of financial  statements  delivered
by it is prepared using the same accounting principles and policies as were used
in the preparation of its original financial  statements delivered to Lender and
gives a true and fair view of the financial condition of the relevant Parent and
of the result of its business and operations during such period;

                           (ii)     each set of financial  statements  delivered
by it to Lender  pursuant to (gg)(i)  above has been audited by its Auditors and
each set of  Management  Accounts  delivered  by it has been  certified as being
correct by the relevant Parent, acting through its chief financial or accounting
officer, subject to normal year-end adjustments.

                  (jj)     Each Parent undertakes that:

                           (i)      it will obtain, comply with the terms of and
do  all  that  is   necessary   to   maintain  in  full  force  and  effect  all
authorizations, approvals, licenses and consents required by all applicable laws
and regulations to enable it lawfully to enter into, perform and comply with its
obligations  hereunder or any document to be entered into pursuant  hereto or to
ensure the legality,  validity,  enforceability  or admissibility in evidence of
such documents and, if different,  its  jurisdiction  of  incorporation  and any
jurisdiction in which any of its assets may be situated;

                           (ii)     it will  maintain  policies of  insurance on
and in relation to its business and assets with financially  sound and reputable
insurers  acceptable to Lender against such risks and to such extent as is usual
for  companies  carrying  on a business  such as that  carried on by each Parent
whose practice is not to self insure;


                                       7
<PAGE>


                           (iii)    it will comply in all material respects with
all  applicable  laws  and  regulations  including,   without  limitation,   any
applicable Environmental Laws;

                           (iv)     it has the right to conduct its business and
operations as they are conducted in all applicable jurisdictions and will do all
things  necessary  (including  compliance  with all terms and  conditions of any
licenses and consents) to obtain, preserve and keep in full force and effect all
rights,  licenses  and  authorizations   (including,   without  limitation,  all
Environmental  Authorizations)  and consents as are necessary for the conduct of
such business and operations;

                           (v)      it  will   duly  and   punctually   pay  and
discharge (A) all taxes imposed upon it or its  properties  (save where the same
are being  contested  in good  faith and by  appropriate  proceedings  and where
adequate  reserves are being maintained with respect thereto) and (B) all lawful
claims  which,  if  unpaid,  would by law  become  encumbrances  upon any of the
Collateral;

                           (vi)     it will  promptly  notify  Lender in writing
(in reasonable detail and setting out the action that is proposed to be taken in
relation  to it) of the  occurrence  of any Default  and, as soon as  reasonably
practicable  following  receipt of a written request to that effect from Lender,
confirm to Lender that, save as previously  notified to Lender or as notified in
such confirmation, no Default has occurred.

                           (vii)    it will not,  without  the prior  consent of
Lender,  create, agree to create or permit to subsist any encumbrance on or over
its respective  assets to secure any  indebtedness  of any person other than the
following:

                                    (A)      any  encumbrance  on  or  over  the
                  assets of any Parent  subsisting  at the date of this Guaranty
                  and Security  Agreement and agreed to by Lender (including the
                  security in favor of GMAC as  specified  or referred to in the
                  Intercreditor  Agreement  and the  security  interest  of T.R.
                  Winston & Company,  as agent, in the  Subordinated  Collateral
                  (as  defined in that  certain  Intercreditor  Agreement  dated
                  December  14, 2004,  among GMAC,  the Lender,  T.R.  Winston &
                  Company,  as agent for itself and the  Debenture  Holders  (as
                  defined  therein),  and TAG),  provided that,  except with the
                  prior  consent of Lender,  the  principal,  capital or nominal
                  amount  secured by any such  encumbrance  may not be increased
                  beyond the maximum amount which may be secured by the relevant
                  encumbrance at the date hereof;

                                    (B)      liens  arising  solely by operation
                  of law incurred in the ordinary  course of business and not in
                  connection  with  the  borrowing  of  money,  for sums not yet
                  overdue;

                                    (C)      encumbrances  arising  out of title
                  retention  provisions in a supplier's  standard  conditions of
                  supply (any such standard  conditions to have been approved by
                  Lender) in respect of goods acquired by the relevant person in
                  the ordinary course of trading; and

                                    (D)      any other  encumbrance  created  or
                  outstanding with the prior written consent of Lender.

                           (viii)   without the prior  consent of Lender  (which
may be subject to,  inter alia,  the  application  of all proceeds of a disposal
towards  prepayment of the  Obligations  in such manner as Lender may reasonably
require), it will not (whether by a single transaction or a number of related or
unrelated  transactions and whether at one time or over a period of time), sell,
transfer,  assign, lease out, lend or otherwise dispose of (whether outright, by
a sale and  repurchase or sale and leaseback  arrangement or otherwise) any part
of its assets  (other than any sale of goods or services in the ordinary  course
of its  business)  having an aggregate  value in excess of $1,000,000 in any one
Financial Year.

                           (ix)     it  will   not   incur   or   maintain   any
indebtedness other than:

                                    (A)      indebtedness guaranteed hereunder;


                                       8
<PAGE>


                                    (B)      the guarantee by the Parents of the

                  indebtedness  under the  Facility  Agreement  and the Facility
                  Documents (as defined in the Facility Agreement);

                                    (C)      suppliers'  credit  extended in the
                  ordinary course of trading and on arms' length terms;

                                    (D)      indebtedness between members of the
                  Group as disclosed to and permitted by Lender;

                                    (E)      loans  from its major  shareholders
                  (provided  that  all  such  loans  are   subordinated  to  the
                  guaranteed indebtedness hereunder;

                                    (F)      indebtedness  to GMAC as  specified
                  or referred to in the Intercreditor Agreement;

                                    (G)      indebtedness    of   TAG   to   the
                  Debenture Holders in an aggregate principal amount outstanding
                  not to exceed the sum of $10,000,000 at any time; and

                                    (H)      loans by the Parents,  or either of
                  them,  to any other person not in excess of  $1,000,000 in the
                  aggregate at any given time.

                           (x)      it will not make any loans, grant any credit
(save in the  ordinary  course of trading) or give any  guarantee  to or for the
benefit of any person or otherwise  voluntarily  assume any  liability,  whether
actual or contingent,  in respect of any obligation of any other person (save as
required hereunder) in excess of US$1 million in aggregate.

                           (xi)     it will  ensure  that  there is no  material
change in the nature of its business or operations or the business or operations
of the Group taken as a whole  (whether by a single  transaction  or a number of
related or unrelated transactions,  whether at one time or over a period of time
and whether by disposal, acquisition or otherwise).

                           (xii)    it will not,  without the prior  approval of
Lender,  change, and will procure that no other member of the Group changes, its
accounting reference date.

                           (xiii)   save with Lender's prior written consent, it
will not, directly or indirectly, organize or acquire any Subsidiary (other than
those in  existence  as at the date hereof and which have been advised to Lender
in writing).

                           (xiv)    save with Lender's prior written consent, it
will not make any acquisitions of a capital asset,  enter into any finance lease
or any other capital asset commitment, or otherwise make any capital expenditure
involving  payments in excess of  $5,000,000  in the  aggregate in any Financial
Year,  other than any budgeted  capital  expenditure  which has been approved by
Lender.

                           (xv)     Unless  Lender  shall  be  satisfied  in its
reasonable  determination of the compliance and anticipated continued compliance
with all financial  ratios set out herein,  it will not pay, make or declare any
dividend or other  distribution  nor repay or permit to be repaid any  unsecured
loan stock or other subordinated indebtedness.

                           (xvi)    it will not make any  change in its  capital
structure  or its  jurisdiction  of  formation  save  where  made with the prior
consent of Lender, not to be unreasonably withheld or delayed.

Each of the  representations and warranties set forth herein will be correct and
complied with on the date hereof and will also be correct and complied with each
date on which a Letter  of Credit  is  issued  or  requested  to be issued as if
repeated then by reference to the then existing circumstances.  The undertakings
herein  shall  remain in force from the date hereof and so long as any amount is
outstanding hereunder.


                                       9
<PAGE>


         9.       FURTHER ASSURANCES.

                  (a)      Each Parent agrees that from time to time, at its own
expense,  such Parent will promptly execute and deliver all further  instruments
and documents, and take all further action, that may be necessary or that Lender
may reasonably  request,  in order to perfect and protect any security  interest
granted or  purported to be granted  hereby or to enable  Lender to exercise and
enforce its rights and remedies hereunder with respect to any of the Collateral.
Without  limiting  the  generality  of the  foregoing,  each  Parent  shall upon
Lender's request, execute and file such financing or continuation statements, or
amendments  thereto,  and such other instruments or notices, as may be necessary
or as Lender may request, in order to perfect and preserve the security interest
granted or purported to be granted hereby.

                  (b)      Each Parent  hereby  authorizes  Lender and  appoints
Lender  its  attorney-in-fact  to file  one or more  financing  or  continuation
statements,  and  amendments  thereto,  relating  to  all  or  any  part  of the
Collateral  without its signature  where  permitted by law. A photocopy or other
reproduction of this Guaranty and Security Agreement or any financing  statement
covering the  Collateral  or any part thereof shall be sufficient as a financing
statement where permitted by law.

         10.      CONSIDERATION.  Each of the Parents  expressly  represents and
acknowledges  that any  loans or other  financial  accommodations  by  Lender to
Borrowers,  or any of them, are and will be to the direct interest and advantage
of such Parent.

         11.      AGENT   APPOINTED   ATTORNEY-IN-FACT.   Each   Parent   hereby
irrevocably  makes,  constitutes  and appoints  Lender,  and its  successors  or
assigns, as its attorney-in-fact,  with full authority in the place and stead of
such  Parent  and in the name of such  Parent or  otherwise,  at such time as an
Event of Default has occurred and is  continuing  under the Loan  Agreement,  to
take any action and to execute any instrument which Lender may deem necessary or
advisable to accomplish  the purposes of this  Guaranty and Security  Agreement,
including, without limitation:

                  (a)      to  ask,   demand,   collect,   sue   for,   recover,
compromise,  receive and give  acquittance  and  receipts  for moneys due and to
become due under or in connection with the Collateral of such Parent;

                  (b)      to receive and open all mail addressed to such Parent
and to notify postal  authorities to change the address for the delivery of mail
to such Parent to that of Lender;

                  (c)      to file any  claims or take any  action or  institute
any proceedings  which Lender may deem necessary or desirable for the collection
of any of the  Collateral  of such Parent or  otherwise to enforce the rights of
Lender with respect to any of the Collateral of such Parent;

                  (d)      make,   settle  and  adjust  all  claims  under  such
Parent's  policies of insurance and make all  determinations  and decisions with
respect to such policies of insurance; and

                  (e)      to use any labels, patents,  trademarks, trade names,
URLs, domain names, industrial designs, copyrights,  advertising matter or other
industrial or intellectual  property rights, in advertising for sale and selling
Inventory and other Collateral of such Parent.

         12.      NO WAIVER BY LENDER. No delay or failure on the part of Lender
in the exercise of any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by Lender of any right or remedy shall preclude other
or further  exercise  thereof or the exercise of any other right or remedy.  For
purposes  of  this  Guaranty  and  Security  Agreement,   the  term  "Guaranteed
Obligations" shall include all obligations  arising under the Loan Agreement and
the other Finance Documents, notwithstanding any right or power of Borrowers, or
any of them, or anyone else to assert any claim or defense as to the  invalidity
or unenforceability thereof, and no such claim or defense shall impair or affect
the obligations and liabilities of the Parents  hereunder.  Without limiting the
generality of the  foregoing,  this Guaranty and Security  Agreement  covers all
Guaranteed  Obligations purporting to


                                       10
<PAGE>


be made on behalf of such Borrowers by any officer or agent of the same, without
regard to the actual authority of such officer or agent.

         13.      REMEDIES. Upon the occurrence and during the continuance of an
Event of Default:

                  (a)      Lender may exercise in respect of the Collateral,  in
addition to other rights and remedies  provided for herein, in the other Finance
Documents,  or  otherwise  available  to it, all the rights  and  remedies  of a
secured  party on default  under the Code in effect in the State of Georgia from
time  to  time  or any  other  applicable  jurisdiction.  Without  limiting  the
generality of the foregoing, each Parent expressly agrees that in any such event
Lender without demand for performance or other demand,  advertisement  or notice
of any kind  (except  a notice  specified  below of time and  place of public or
private sale or as  expressly  required by the Loan  Agreement)  to or upon such
Parent or any other person (all and each of which  demands,  advertisements  and
notices are hereby  expressly waived to the maximum extent permitted by the Code
and other applicable  law), may take immediate  possession of the Collateral and
(i) require  such Parent to, and such Parent  hereby  agrees that it will at its
own expense and upon  request of Lender  forthwith,  assemble all or part of the
Collateral  as directed by Lender and make it available to Lender at one or more
locations  where such Parent  regularly  maintains  Inventory  and (ii)  without
notice except as specified below, sell the Collateral or any part thereof in one
or more  parcels  at public or  private  sale,  at any of  Lender's  offices  or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as Lender may deem  commercially  reasonable.  Each Parent  agrees that,  to the
extent notice of sale shall be required by law, at least ten (10) calendar days'
notice to such Parent of the time and place of any public sale or the time after
which  any  private   sale  is  to  be  made  shall   constitute   a  reasonable
"authenticated  notification of disposition" within the meaning of Section 9-611
of the Uniform Commercial Code, as in effect from time to time in any applicable
jurisdiction.  Lender  shall  not be  obligated  to make any sale of  Collateral
regardless of notice of sale having been given. Lender may adjourn any public or
private  sale from  time to time by  announcement  at the time and  place  fixed
therefor,  and such sale may,  without further  notice,  be made at the time and
place to which it was so adjourned.  Lender is hereby granted a license or other
right to use, without charge, such Parent's labels, patents, copyrights,  rights
of use of any name, trade secrets,  trade names,  trademarks,  service marks and
advertising matter, URLs, domain names,  industrial designs, other industrial or
intellectual property or any property of a similar nature, whether owned by such
Parent or with respect to which such Parent has rights under license, sublicense
or other  agreements,  as it pertains to the Collateral,  in preparing for sale,
advertising for sale and selling any Collateral,  and such Parent's rights under
all licenses and all franchise agreements shall inure to the benefit of Lender.

                  (b)      Any cash held by Lender  as  Collateral  and all cash
proceeds received by Lender in respect of any sale of, collection from, or other
realization  upon all or any part of the  Collateral  may, in the  discretion of
Lender,  be held  by  Lender  as  Collateral  for,  and/or  then or at any  time
thereafter be applied in whole or in part by Lender against,  all or any part of
the  Guaranteed  Obligations  in such  order  as may be set  forth  in the  Loan
Agreement.  Any  surplus  of such  cash  or cash  proceeds  held by  Lender  and
remaining  after  payment  in full of all the  Guaranteed  Obligations  shall be
delivered to either Parent.

                  (c)      Each Parent hereby  acknowledges  that the Guaranteed
Obligations arose out of a commercial  transaction,  and agrees that if an Event
of  Default  shall  occur and be  continuing  Lender  shall have the right to an
immediate writ of possession without notice of a hearing.  Lender shall have the
right to the  appointment  of a receiver for the  properties  and assets of such
Parent,  and such Parent hereby consents to such rights and such appointment and
hereby waives any objection  such Parent may have thereto or the right to have a
bond or other security posted by Lender in connection therewith.

         14.      REMEDIES  CUMULATIVE.  Each right, power, and remedy of Lender
as provided for in this Guaranty and Security  Agreement or in the other Finance
Documents  or now or  hereafter  existing  at law or in equity or by  statute or
otherwise  shall be cumulative  and concurrent and shall be in addition to every
other  right,  power,  or remedy  provided  for in this  Guaranty  and  Security
Agreement or in the other Finance Documents or now or hereafter  existing at law
or in equity or by statute or  otherwise,  and the  exercise or beginning of the
exercise by Lender of any one or more of such rights,  powers or remedies  shall
not preclude  the  simultaneous  or later  exercise by Lender of any or all such
other rights, powers or remedies.


                                       11
<PAGE>


         15.      APPLICATION  OF PAYMENTS.  Any amount  received by Lender from
whatever  source  and  applied  by it  toward  the  payment  of  the  Guaranteed
Obligations  shall be applied in such  order of  application  as Lender may from
time to time elect.

         16.      INDEMNITY AND EXPENSES.

                  (a)      Each  Parent  agrees upon demand to pay to Lender the
amount of any and all reasonable expenses,  including,  without limitation,  the
fees and expenses of its counsel  incurred and of any experts and agents,  which
Lender may incur in connection with (i) the  administration of this Guaranty and
Security  Agreement,  (ii) the custody,  preservation,  use or operation of, or,
upon an Event of Default,  the sale of,  collection  from, or other  realization
upon,  any of the  Collateral  in  accordance  with this  Guaranty  and Security
Agreement and the other Finance Documents,  (iii) the exercise or enforcement of
any of the rights of Lender  hereunder  or (iv) the failure by either  Parent to
perform or observe any of the provisions hereof.

                  (b)      Each  Parent  agrees  to  indemnify  Lender  from and
against all claims,  lawsuits and liabilities  (including  reasonable attorneys'
fees  actually  incurred)  growing out of or  resulting  from this  Guaranty and
Security Agreement (including, without limitation,  enforcement of this Guaranty
and Security  Agreement) or any other Finance Document to which such Parent is a
party, except claims,  losses or liabilities resulting from the gross negligence
or willful  misconduct of the party seeking  indemnification  as determined by a
final non-appealable order of a court of competent jurisdiction.

         17.      POSSESSION  UNTIL  DEFAULT.  Until an Event of  Default  shall
occur and be  continuing,  except as  otherwise  provided in this  Guaranty  and
Security Agreement,  the Loan Agreement or other Finance Documents,  each Parent
shall have the right to  possession  and  enjoyment  of the  Collateral  for the
purpose of conducting the ordinary  course of its business,  subject to and upon
the terms hereof and of the Loan Agreement and other Finance Documents.

         18.      AMENDMENTS;  ETC. No waiver of any  provision of this Guaranty
and Security Agreement, and no consent to any departure by the Parents herefrom,
shall in any event be  effective  unless the same shall be in writing and signed
by  Lender,  and then such  waiver or  consent  shall be  effective  only in the
specific  instance and for the specific purpose for which given. No amendment of
any provision of this Guaranty and Security  Agreement shall be effective unless
the same shall be in writing and signed by Lender and the Parents.

         19.      ADDRESSES  FOR NOTICES.  All notices and other  communications
provided  for  hereunder  shall be given in the form and manner  prescribed  for
notices  in the Loan  Agreement  at the  address  for the  Parents  set forth on
Schedule  2  hereto  and  at the  at  Lender's  address  specified  in the  Loan
Agreement,  or, as to any party, at such other address as shall be designated by
such party in a written notice to the other party.

         20.      CONTINUING   SECURITY   INTEREST:   ASSIGNMENTS   UNDER   LOAN
AGREEMENT.  This  Guaranty  and  Security  Agreement  shall  create a continuing
security  interest  in the  Collateral  and  shall (i)  terminate  only when the
Guaranteed  Obligations  (other  than  those  Guaranteed  Obligations  which may
survive  termination  of the Loan  Agreement as provided for therein)  have been
paid in full and the Loan Agreement shall have been terminated,  (ii) be binding
upon the Parents,  their  successors  and assigns and (iii) inure to the benefit
of, and be enforceable by, Lender and its  successors,  transferees and assigns.
Without limiting the generality of the foregoing clause (iii), Lender may assign
or otherwise transfer all or any portion of its rights and obligations under the
Loan Agreement (including,  without limitation, all, or any ratable part, of the
Guaranteed Obligations) and the other rights and obligations of Lender under the
Loan  Agreement  and the other Finance  Documents to any other Person,  and such
other  Person  shall  thereupon  become  vested with all the benefits in respect
thereof  granted to Lender herein or otherwise.  Upon the payment in full of the
Guaranteed  Obligations  and all other  amounts  payable under this Guaranty and
Security Agreement and the expiration or termination of the Loan Agreement,  the
security  interest  granted  hereby  shall  terminate  and  all  rights  to  the
Collateral  shall  revert to the  applicable  Parent.  No  transfer  or renewal,
extension,  assignment or termination of this Guaranty and Security Agreement or
of the Loan  Agreement,  any other Finance  Document or any other  instrument or
document  executed  and  delivered  by the Parents to Lender nor any  additional
extension  of  credit  by Lender to the  Borrowers,  nor the  taking of  further
security,  nor the retaking or  re-delivery  of the Collateral to the Parents by
Lender,  nor any other act of Lender  shall  release the  Parents,  or either of
them, from any obligation,  except a release or discharge executed in writing by
Lender with respect to such


                                       12
<PAGE>


obligation or payment of such  obligation or upon full  satisfaction  of all the
Guaranteed  Obligations.  Lender  shall  not  by any  act,  delay,  omission  or
otherwise,  be deemed to have waived any of their rights or remedies  hereunder,
unless  such  waiver is in  writing  and  signed by Lender  and then only to the
extent  therein  set  forth.  A waiver  by  Lender of any right or remedy on any
occasion  shall not be  construed  as a bar to the exercise of any such right or
remedy which Lender would otherwise have had on any other occasion.

         21.      SUCCESSORS AND ASSIGNS;  JOINT AND SEVERAL  UNDERTAKING.  This
Guaranty and Security  Agreement  shall bind and inure to the benefit of Lender,
its successors and assigns,  and likewise shall bind and inure to the benefit of
the Parents, their heirs, executors, administrators,  successors and assigns. If
more than one person  shall  execute this  Guaranty and Security  Agreement or a
similar,  contemporaneous  guaranty,  the term "undersigned" shall mean, as used
herein,  all parties  executing  this  Guaranty and Security  Agreement and such
similar guaranties and all such parties shall be liable,  jointly and severally,
one with the other with Borrowers, or any of them, for each of the undertakings,
agreements,  obligations,  covenants  and  liabilities  provided for herein with
respect to the Parents. This Guaranty and Security Agreement contains the entire
agreement and there is no understanding that any other person shall execute this
or a similar guaranty. Furthermore, no course of dealing between the parties, no
usage of trade,  and no parol or extrinsic  evidence shall be used to supplement
or modify any terms of this Guaranty and Security  Agreement;  nor are there any
conditions  to  the  complete   effectiveness  of  this  Guaranty  and  Security
Agreement.

         22.      GOVERNING  LAW;  SEVERABILITY.   This  Guaranty  and  Security
Agreement  shall be deemed  accepted  by Lender  in the  State of  Georgia.  The
parties agree that this Guaranty and Security  Agreement shall be deemed,  made,
delivered, performed and accepted by Lender in the State of Georgia and shall be
governed by the laws of the State of Georgia.  Wherever  possible each provision
of this Guaranty and Security  Agreement  shall be interpreted in such manner as
to be effective  and valid under  applicable  law, but if any  provision of this
Guaranty and Security  Agreement  shall be  prohibited  by or invalid under such
law, such provision  shall be  ineffective to the extent of such  prohibition or
invalidity,  without  invalidating  the  remainder  of  such  provision  or  the
remaining provisions of this Guaranty and Security Agreement.

         23.      JURISDICTION.  Each of the  Parents  (a)  submits to  personal
jurisdiction  in the State of New York, the courts thereof and any United States
District  Court  sitting  therein,  for the  enforcement  of this  Guaranty  and
Security Agreement,  (b) waives any and all personal rights under the law of any
jurisdiction   to   object  on  any  basis   (including,   without   limitation,
inconvenience  of forum) to  jurisdiction  or venue within the State of New York
for the purpose of litigation  to enforce this Guaranty and Security  Agreement,
(c) agrees  that  service of process may be made upon the Parents by first class
mail,  postage  prepaid,  addressed  to either  Parent at the latest  address of
either  Parent  known to Lender (or at such other  address  as the  Parents  may
specify for such purpose by notice to Lender) and (d) to the extent permitted by
law,  waives  trial by jury in any action or  proceeding  with  respect  hereto.
Nothing herein contained, however, shall prevent Lender from bringing any action
or exercising any rights against any security and against  Borrowers,  or any of
them,   and  against  any  assets  of  Borrower,   within  any  other  state  or
jurisdiction.

         24.      COLLECTION  COSTS.  Each of the Parents  agrees,  in the event
that this  Guaranty  and  Security  Agreement is enforced or collected by law or
through an attorney at law, to pay all costs of collection  actually incurred by
Lender, including, without limitation, attorneys' fees actually incurred.

         25.      VOIDED  PAYMENTS.   Notwithstanding  anything  herein  to  the
contrary,  to the  extent  that any of the  Parents  makes  any  payment  on the
Guaranteed  Obligations  which,  within  twelve  (12) months of the date of such
payment, is subsequently  invalidated,  declared to be fraudulent,  avoidable or
preferential,  set aside or is required to be repaid to a trustee, receiver, the
estate of such undersigned or any other party under any bankruptcy act, state or
Federal  law,  common law or equitable  cause (such  payment  being  hereinafter
referred to as a "VOIDED  PAYMENT"),  then to the extent of such Voided  Payment
that portion of the Guaranteed  Obligations which had been previously  satisfied
by such Voided Payment shall be revived and continue in full force and effect as
if such Voided  Payment had never been made. In the event that a Voided  Payment
is sought to be  recovered  from  Lender,  an "Event of Default"  under the Loan
Agreement shall be deemed to have occurred and to be continuing from the date of
such recovery  from Lender of such Voided  Payment until the full amount of such
Voided  Payment is fully and finally  restored to Lender and until such time the
provisions of this Guaranty and Security  Agreement,  and the guaranty  provided
herein, shall be in full force and effect.


                                       13
<PAGE>


         26.      PAYMENTS.  All payments made by any Parent  hereunder  will be
made  without  setoff,  counterclaim,  or other  defense,  except as required by
applicable law other than for Taxes (as defined  below).  All such payments will
be made free and clear of, and without deduction or withholding for, any present
or future taxes, levies, imposts,  duties, fees, assessments or other charges of
whatever  nature now or hereafter  imposed by any  jurisdiction  (other than the
United States) or by any political  subdivision or taxing  authority  thereof or
therein  (other than of the United States) with respect to such payments and all
interest,  penalties  or similar  liabilities  with  respect  thereto  (all such
non-excluded taxes, levies, imposts,  duties, fees, assessments or other charges
being  referred  to  collectively  as  "TAXES").  If any  Taxes are so levied or
imposed,  each  Parent  agrees to pay the full  amount of such  Taxes,  and such
additional  amounts as may be necessary so that every payment of all amounts due
under this  Guaranty and Security  Agreement  or under any note,  including  any
amount paid pursuant to this Section 265 after  withholding  or deduction for or
on account of any Taxes,  will not be less than the amount  provided for herein;
PROVIDED,  HOWEVER,  that  Parents  shall not be required  to increase  any such
amounts  payable to Lender if the increase in such amount  payable  results from
Lender's own willful  misconduct  or gross  negligence.  Parents will furnish to
Lender as promptly  as  possible  after the date the payment of any Taxes is due
pursuant to applicable  law  certified  copies of tax receipts  evidencing  such
payment by Parents.

         27.      ADDITIONAL WAIVERS.

                  (a)      WITHOUT  LIMITING THE  GENERALITY OF ANY OTHER WAIVER
OR OTHER  PROVISION SET FORTH IN THIS GUARANTY AND SECURITY  AGREEMENT,  EACH OF
THE PARENTS  HEREBY  WAIVES,  TO THE MAXIMUM  EXTENT SUCH WAIVER IS PERMITTED BY
LAW, ANY AND ALL BENEFITS OR DEFENSES  ARISING  DIRECTLY OR INDIRECTLY UNDER ANY
ONE OR MORE OF CALIFORNIA CIVIL CODE SECTIONS 2787 THROUGH AND INCLUDING SECTION
2855,  CALIFORNIA CODE OF CIVIL PROCEDURE  SECTIONS 580A,  580B, 580C, 580D, AND
726, AND CHAPTER 2 OF TITLE 14 OF THE CALIFORNIA  CIVIL CODE OR ANY SIMILAR LAWS
OF GEORGIA OR ANY OTHER JURISDICTION.

                  (b)      Without waiving the generality of any other waiver or
other provision set forth in this Guaranty and Security  Agreement,  each of the
Parents also agrees to the following waivers:

                           (i)      each of the  Parents  agrees  that  Lender's
right to enforce this  Guaranty  and  Security  Agreement is absolute and is not
contingent  upon  the  genuineness,  validity  or  enforceability  of  the  Loan
Agreement  or any of the  Security  Documents.  Each of the  Parents  waives all
benefits  and defenses it may have under  California  Civil Code Section 2810 or
any similar laws of Georgia or any other  jurisdiction  and agrees that Lender's
rights under this Guaranty and Security  Agreement shall be enforceable  even if
no Borrower had any liability at the time of execution of the Loan  Agreement or
any of the other Finance Documents or later ceases to be liable;

                           (ii)     each of the Parents  waives all benefits and
defenses it may have under  California  Civil Code  Section  2809 or any similar
laws of Georgia or any other  jurisdiction with respect to its obligations under
this Guaranty and Security  Agreement and agrees that Lender's  rights under the
Loan Agreement and the other Finance  Documents will remain  enforceable even if
the  amount  secured  by the  Security  Documents  is larger in amount  and more
burdensome than that for which Borrowers are responsible; and

                           (iii)    each of the  Parents  agrees that Lender may
exercise its rights under this Guaranty and Security  Agreement  without  taking
any  action  against  any  Borrower,  any  other  guarantor  of  any  Borrower's
obligations under the Loan Agreement or any of the other Finance Documents,  any
pledgor of collateral for any person's obligations to Lender or any other person
in connection with the Obligations, and without proceeding against or exhausting
any security or collateral Lender holds.

                  (c)      Each of the  Parents  waives all rights and  defenses
arising out of an election of remedies by Lender,  even though that  election of
remedies,  such as a  nonjudicial  foreclosure  with  respect to security  for a
guaranteed  obligation,   has  destroyed  Lender's  rights  of  subrogation  and
reimbursement against Borrowers or the Parents, or any of them, by the operation
of Section 580(d) of the California Code of Civil  Procedure or otherwise.  Each
of the Parents waives all rights and defenses that the Parents to the extent the
Guaranteed Obligations may be secured by real property.  This means, among other
things: (i) Lender may collect from the


                                       14
<PAGE>


Parents without first  foreclosing on any real or personal  property  collateral
pledged by any other  obligor;  (ii) If Lender  forecloses  on any real property
collateral  pledged  by any other  obligors:  (A) the  amount of the  Guaranteed
Obligations  may be reduced only by the price for which that  collateral is sold
at the  foreclosure  sale,  even if the  collateral  is worth more than the sale
price and (B) Lender may collect from the Parents even if Lender, by foreclosing
on the real property collateral, has destroyed any right the Parents may have to
collect from the other obligors. This is an unconditional and irrevocable waiver
of any  rights  and  defenses  the  Parents  may  have  because  the  Guaranteed
Obligations are secured by real property. These rights and defenses include, but
are not limited to, any rights or defenses based upon Section 580a,  580b,  580d
or 726 of the California Code of Civil Procedure.

                  (d)      The   paragraphs   in  this   Guaranty  and  Security
Agreement which refer to certain  sections of the California  Civil Code and the
California  Code of Civil  Procedure  are included in this Guaranty and Security
Agreement  solely out of an  abundance  of caution and shall not be construed to
mean that any of the  above-referenced  provisions of California  law are in any
way applicable to this Guaranty and Security Agreement.

         28.      LENDER'S DUTIES.  The powers conferred on Lender hereunder are
solely to protect its interest in the  Collateral  and shall not impose any duty
upon  Lender to exercise  any such  powers.  Except for the safe  custody of any
Collateral  in its actual  possession  and the  accounting  for moneys  actually
received by it hereunder,  Lender shall have no duty as to any  Collateral or as
to the taking of any necessary steps to preserve rights against prior parties or
any other rights  pertaining to any  Collateral.  Lender shall be deemed to have
exercised  reasonable care in the custody and  preservation of any Collateral in
its actual  possession if such  Collateral is accorded  treatment  substantially
equal to that which Lender  accords its own property.  If either Parent fails to
perform any agreement  contained  herein,  Lender may itself  perform,  or cause
performance of, such agreement,  and the reasonable  expenses of Lender incurred
in  connection  therewith  shall be payable by such Parent and the  Borrowers as
part of the Guaranteed Obligations.

         29.      BLOCKED  ACCOUNT   AGREEMENT.   All  amounts  which  shall  be
deposited  into the deposit  account  described  in Section  5(b) (the  "Blocked
Account") hereof shall be under the dominion and control of TAG unless and until
the  occurrence  and  continuance  of an Event  of  Default,  whereupon  amounts
deposited in such Blocked  Account shall  immediately  be under the dominion and
exclusive  control of Lender  pursuant  to the terms of the  applicable  blocked
account agreement,  and as provided in the applicable blocked account agreement,
TAG shall have no right to withdraw such amounts  thereafter without the consent
of Lender.

         30.      LANDLORD  AGREEMENTS.  Each  Parent  agrees  that it shall not
renew (nor permit any automatic  renewal of) any existing  lease,  or enter into
any new lease,  for real  property  unless prior to executing or effecting  such
renewal or proposed  lease such Parent shall have  delivered to Lender  evidence
that such lessor  shall  execute and deliver to Lender a  collateral  access and
landlord subordination  agreement in form and substance reasonably  satisfactory
to Lender.

         31.      QUARTERLY FIELD AUDITS:  Lender shall be entitled to conduct a
quarterly field audit of the books and accounting records of any of the Parents,
such field  audits to be  conducted  at any time  within the  fourteen  (14) day
period following the end of each calendar quarter (namely 31st March, 30th June,
30th  September and 31st  December).  Each of the Parents shall permit Lender or
any person  authorized  by Lender to have access to its premises and  accounting
records and to make extracts from and take copies of its accounting  records and
to discuss  any matter  with any of its  personnel  and  officers  and make such
inquiries as Lender may  reasonably  require from time to time,  the  reasonable
costs and  expenses  properly  incurred  thereby  to be for the  account  of the
relevant  Parent,  provided  that such  costs and  expenses  in  respect of each
quarterly  field audit  conducted by Lender shall not exceed $750 per person per
day plus any out-of-pocket costs and expenses.

         32.      MISCELLANEOUS.

                  (a)      This Guaranty and Security  Agreement may be executed
in any number of counterparts,  each of which shall be deemed to be an original,
but all such separate  counterparts  shall  together  constitute but one and the
same  instrument.  Delivery  of an executed  counterpart  of this  Guaranty  and
Security


                                       15
<PAGE>


Agreement by facsimile  shall be equally as effective as delivery of an original
executed counterpart of this Guaranty and Security Agreement.

                  (b)      The paragraph  titles herein are for  convenience  of
reference only, and shall not affect in any way the interpretation of any of the
provisions hereof.

                  (c)      Time is of the essence of this  Guaranty and Security
Agreement.



                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


                                       16
<PAGE>


         IN WITNESS WHEREOF,  each of the Parents has executed this Guaranty and
Security Agreement under seal, as of December 31, 2004.


                                            "GUARANTORS"

Signed and delivered                         TARRANT APPAREL GROUP
in the presence of:

                                             By: /S/ CORAZON REYES
                                                --------------------------------
                                             Name:   CORAZON REYES
                                             Title:  CHIEF FINANCIAL OFFICER

                                             Address:


Notary Public
             ----------------------------------

My Commission Expires:
                      -------------------------



         [NOTARY SEAL]


Signed and delivered                         FASHION RESOURCE (TCL), INC.
in the presence of:
                                             By: /S/ CORAZON REYES
                                                --------------------------------
                                             Name:   CORAZON REYES
                                             Title:  CHIEF FINANCIAL OFFICER

                                             Address:

Notary Public
             ----------------------------------

My Commission Expires:
                      -------------------------



         [NOTARY SEAL]


Accepted and agreed:

UPS CAPITAL GLOBAL TRADE FINANCE CORPORATION

By:  /S/ JOHN P. HOLLOWAY
    -------------------------------------------
Name:  JOHN P. HOLLOWAY
Title: DIRECTOR OF PORTFOLIO MANAGEMENT


                                       17
<PAGE>


                                   SCHEDULE 1

                            NAME AND FEIN FOR PARENTS


NAME                                         FEIN
----------------------------                 ----------
Tarrant Apparel Group                        95-4181026
Fashion Resource (TCL), Inc.                 95-4784981


                                       18
<PAGE>


                                   SCHEDULE 2

                CHIEF EXECUTIVE OFFICES, RECORDS LOCATIONS


CHIEF EXECUTIVE OFFICES, RECORDS LOCATION:
------------------------------------------
3151 E. Washington Boulevard
Los Angeles, California 90023

INVENTORY LOCATIONS:
------------------------------------------
Please see Schedule 3


                                       19
<PAGE>


                                   SCHEDULE 3

               LEASES OF REAL PROPERTY; INVENTORY LOCATIONS


LEASED REAL PROPERTY:
---------------------

Lease, dated as of January 1, 1994, by and between GET, a California
corporation, as Lessor and Fashion Resource, Inc. (now known as Tarrant
Apparel Group), as Lessee.  The premises are located at 3151 E.
Washington Boulevard, Los Angeles, California 90023.  Contact:  Gerard
Guez, as President of Lessor, 3151 E. Washington Boulevard, Los Angeles,
California 90023.

INVENTORY LOCATIONS:
--------------------

3151 E. Washington Boulevard
Los Angeles, California 90023

ITC Warehouse
309 Nafta Blvd.
Laredo, TX 78045

FARO Services, Inc./FARO Logistics Solutions, Inc.
3275 Alum Creek Drive
Columbus, OH 43207

Vista Industrial Package, Inc.
4311 Janitorial Road, Suite 100
Columbus, OH 43228

UPS - New Jersey
1000 Port Carteret Dr.
Carteret, NJ 07008

UPS - Columbus
2250 Spiegel Drive #F
Groveport, OH 43125

ADI Pacific
12450 Philadelphia Ave.
Mira Loma, CA 91752

Transgroup
13200 SOurth Broadway
Los Angeles, CA 90061

FMI NJ
800 Federal Blvd.
Carteret, NJ 07008


                                       20