EXHIBIT 10.59




                              AMENDED AND RESTATED
                          ACCOUNTS FINANCING AGREEMENT

                              [SECURITY AGREEMENT]

                            DATED AS OF JUNE 1, 1997


                                      AMONG


                   CONGRESS FINANCIAL CORPORATION (SOUTHWEST)

                                1201 Main Street
                               Dallas, Texas 75202





                                       AND



                               FARAH U.S.A., INC.
                          VALUE CLOTHING COMPANY, INC.
                       FARAH MANUFACTURING (U.K.) LIMITED

                                 4171 NORTH MESA
                                   BUILDING D
                                    SUITE 500
                            EL PASO, TEXAS 79902-1433



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                               FARAH U.S.A., INC.
                            Dated as of June 1, 1997
                        [Amending and Restating Accounts
                    Financing Agreement [Security Agreement]
                              dated August 2, 1990
                   Congress Financial Corporation (Southwest)
                              1500 One Main Place
                              Dallas, Texas 75250

Gentlemen:

         Congress Financial Corporation (Southwest) (sometimes called "Lender"),
Farah  U.S.A.,  Inc.  ("Farah  USA"),  Value  Clothing  Company,   Inc.  ("Value
Clothing"),  Farah  Manufacturing  (U.K.) Limited ("Farah UK," and together with
Farah USA and Value  Clothing,  individually,  sometimes  called a "Borrower" or
collectively the "Borrowers") have entered into financing  arrangements pursuant
to the Accounts Financing Agreement [Security Agreement],  dated as of August 2,
1990, between Lender and Farah USA (the "Original Accounts Financing Agreement")
and various  Supplements  thereto,  as amended  pursuant to  Amendment  No. 1 to
Financing  Agreements,  dated  November 5, 1990,  Amendment  No. 2 to  Financing
Agreements,  dated February 11, 1991,  Amendment No. 3 to Financing  Agreements,
dated January 29, 1992, Amendment No. 4 to Financing Agreements,  dated June 25,
1992, Amendment No. 5 to Financing Agreements,  dated August 31, 1992, Amendment
No. 6 to  Financing  Agreements,  dated  September 4, 1992,  Amendment  No. 7 to
Financing  Agreements,  dated  September 16, 1992,  Amendment No. 8 to Financing
Agreements,  dated as of June 7, 1993, Amendment No. 9 to Financing  Agreements,
dated July 16, 1993, Amendment No. 10 to Financing Agreements, dated November 3,
1993,  Amendment  No. 11 to Financing  Agreements,  dated as of February 9, 1994
("Amendment No. 11"), Amendment No. 12 to Financing Agreements, dated as of July
14, 1994, Amendment No. 13 to Financing  Agreements,  dated as of March 7, 1995,
Amendment  No. 14 to  Financing  Agreements,  dated as of April 5, 1995,  and as
amended pursuant to the letter agreement dated as of October 28, 1992, Amendment
No.  15 to  Financing  Agreements,  dated as of  August  1,  1995  and  Consent,
Amendment and Agreement  dated as of June 5, 1996  (collectively,  as so amended
and as  amended  hereby,  the  "Financing  Agreement",  and  together  with  all
Supplements thereto,  including,  but not limited to, the Covenant Supplement to
Accounts Financing Agreement [Security  Agreement],  dated as of August 2, 1990,
the  Trade  Financing  Agreement  Supplement  to  Accounts  Financing  Agreement
[Security  Agreement] dated as of August 2, 1990,  (collectively,  the "Original
Financing Agreements").

         Borrower and Lender desire to amend and restate certain of the Original
Financing  Agreements as of June 1, 1997 to clarify their existing agreements by
consolidating  the foregoing  amendments,  to make certain new agreements and to
execute  the Farah (UK)  Supplement,  dated as of June 1, 1997 (the  "Farah (UK)
Supplement"),  among Borrowers and Lender (amending and restating  Amendment No.
11), and all other  agreements,  documents and  instruments at any time executed
and/or delivered in connection with any of the foregoing or related thereto,  as
the same  exist as of June 1,  1997 and as the  same may  hereafter  be  further
amended,  modified,  supplemented,  extended,  renewed,  restated,  confirmed or
replaced, collectively, the "Financing Agreements").

         The  Original  Financing  Agreements  include  guarantees  and  related
security agreements by companies  affiliated with the Borrowers.  The Lender and
the Borrowers desire that each of Farah Incorporated, Farah International, Inc.,
Farah Manufacturing  Company,  Inc., Farah Manufacturing  Company of New Mexico,
Inc.,  Farah  Clothing  Company,  Inc., a Delaware  corporation,  Value Clothing
Company,  Inc., FTX, Inc., Value Slacks, Inc., and Corporacion  Farah-Costa Rica
S.A.  (collectively  the "Guarantors")  confirm their respective  guarantees and
related security agreements.

         This  Agreement  amends and  restates the terms and  conditions  of the
Original Accounts Financing  Agreement (as so amended restated,  and as the same
may hereafter be further amended,  modified,  supplemented,  extended,  renewed,
restated,  confirmed or replaced,  this "Agreement" or the "Amended and Restated
Accounts  Financing  Agreement")  and  effective as of the date of acceptance by
Lender,  Borrowers may continue to obtain loans and the financial accommodations
from Lender for  Borrowers'  general  corporate  and  business  purposes  and to
finance certain capital expenditure of Farah USA upon the terms and the security
referred to herein. We shall be jointly and severally bound hereunder.

Section I.        DEFINITIONS.

         1.1.  All terms used herein which are defined in Article 1 or Article 9
of the Uniform  Commercial  Code ("UCC") shall have the meanings  given therein,
unless  otherwise  defined  in  this  Agreement  or  in a  Supplement,  and  all
references to the plural herein shall also mean the singular.

         1.2.  "Accounts"  shall mean all of our  present  and future  accounts,
contract rights, general intangibles,  chattel paper, documents and instruments,
as such  terms  are  defined  in the UCC,  including,  without  limitation,  all
obligations  for the payment of money  arising  out of our sale,  lease or other
disposition of good or other property or rendition of services.

         1.3.  "Account  Debtor"  shall  mean  each  debtor  or  obligor  in any
way obligated on or in connection with any Account.

         1.4.     "Annual Rate" shall have the meaning set forth in Section  3.1
hereof.
         1.5.     "Bank" shall mean CoreStates Bank, N.A. (or its successors) in
Philadelphia, Pennsylvania.

         1.6.     "Borrower(s)"  shall  mean,  collectively,  Farah  USA,  Value
Clothing and Farah UK.

         1.7.     "Collateral" shall have the meaning set forth in  Section  4.1
hereof.

         1.8. "Covenant Supplement" shall mean the Amended and Restated Covenant
Supplement,  dated as of June 1, 1997,  among  Borrowers  and Lender as amended,
modified, supplemented,  extended, renewed, restated, confirmed or replaced from
time to time.

         1.9.  "Current  Assets"  shall mean the aggregate net book value of all
assets of any Person and its Subsidiaries,  on a consolidated basis, calculating
the book value of  inventory  for this  purpose on a  first-in-first-out  basis,
which would, in accordance with GAAP, be classified as current assets.

         1.10.  "Current  Liabilities" shall mean all Indebtedness of any Person
and its Subsidiaries,  on a consolidated  basis,  which would in accordance with
GAAP  be  classified  as  current  liabilities;   and  in  any  event  including
Indebtedness  payable  on  demand  or  within  one (1)  year  from  the  date of
determination  without any option of the obligor to extend or renew  beyond such
year, all accruals for federal or other taxes based on or measured by income and
payable  within such year,  and including the current  portion of long-term debt
required to be paid within one (1) year.

         1.11.  "Eligible  Accounts"  shall mean  Accounts  created by us in the
ordinary  course of business  arising out of our sale of goods or  rendition  of
services,  which are and at all times shall  continue to be acceptable to you in
all  respects.  Standards of  eligibility  may be fixed and revised from time to
time solely by you in your exclusive judgment. In determining  eligibility,  you
may, but need not, rely on agings,  reports and schedules of Accounts  furnished
by us,  but  reliance  by you  thereon  from time to time shall not be deemed to
limit your right to revise  standards of  eligibility at any time as to both our
present and future  Accounts.  In general,  an Account shall be deemed  eligible
unless:  (a) the Account  Debtor on such Account is and at all time continues to
be  acceptable  to you,  (b) such  Account  complies  in all  respects  with the
representations, covenants and warranties hereinafter set forth, and (c) no more
than 90 days have elapsed  since the invoice date of such Account if the Account
by its terms is payable  within 30 days of the invoice date and no more than 120
days have  elapsed  since the invoice date of such Account if the Account by its
terms is payable within more than 30 days of the invoice date.

         1.12.  "Eligible  Inventory" shall mean Eligible Inventory of Farah USA
consisting of Finished Goods,  Work-in-Process  and Raw Materials  acceptable to
Lender  in  all  respects.  General  criteria  for  Eligible  Inventory  may  be
established and revised from time to time by Lender in its exclusive  reasonable
judgment.  In determining such acceptability,  Lender may, but need not, rely on
report and schedules of Eligible Inventory furnished to Lender by Farah USA, but
reliance  thereon  by Lender  from time to time shall not be deemed to limit its
right to revise  standards of  eligibility  at any time.  In general,  except in
Lender's sole  discretion,  Eligible  Inventory shall not include (A) components
which are not to be  incorporated  into  Finished  Goods,  (B) spare parts,  (C)
packaging and shipping materials,  (D) supplies used or consumed in the business
of Farah USA, (E) Eligible  Inventory  subject to a security interest or lien in
favor of any third party, (F) bill and hold goods, (G) Eligible  Inventory which
is not  subject  to the  perfected  security  interest  of  Lender  (other  than
Work-in-Process located outside the United

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States of America),  (H)  defective  goods,  (I)  obsolete,  slow-moving  and/or
discontinued  goods,  (J)  "seconds"  and (K)  Eligible  Inventory  purchased on
consignment.

         1.13.    "Events  of  Default"  shall  have  the  meaning  set forth in
Section 8.1 hereof.

         1.14.    "Excess" shall have the  meaning  set  forth  in  Section  3.4
hereof.

         1.15.    "Farah USA" shall mean Farah U.S.A., Inc., a Texas corporation
and its successors and assigns.

         1.16.    "Farah Clothing"  shall  mean  Farah Clothing Company, Inc., a
Delaware corporation, and its successors and assigns.

         1.17.    "Farah UK" shall mean Farah Manufacturing (U.K.)  Limited,  an
England corporation, and its successors and assigns.

         1.18.  "Finished  Goods"  shall mean  Eligible  Inventory  of Borrowers
consisting of first quality finished goods held for resale to customers of Farah
USA in the ordinary course of our business.

         1.19.  "Governmental  Agency" shall mean the government of any country,
or any  province or state  thereof or a local  municipality  or other  political
subdivision  thereof  or  any  body,  department,   authority,   agency,  public
corporation or instrumentality of any of the foregoing.

         1.20.  "Interest  Period"  means,  with respect to any Libor Rate loan,
each period  commencing on the date such loan is established or converted from a
Prime  Rate  loan or the last day of the next  preceding  Interest  Period  with
respect to such Libor Rate loans,  and ending on the  numerically  corresponding
day in the first,  second,  third or sixth calendar month thereafter,  as we may
select,  except  that each such  Interest  Period  which  commences  on the last
business  day  of a  calendar  month  (or on  any  day  for  which  there  is no
numerically  corresponding  day in the  appropriate  subsequent  calendar month)
shall end on the last business day of the appropriate subsequent calendar month.
Notwithstanding  the foregoing:  (a) each Interest  Period which would otherwise
end on a day  which is not a  business  day  shall  end on the  next  succeeding
business day (or if such  succeeding  business day falls in the next  succeeding
calendar  month,  on the next preceding  business day); (b) any Interest  Period
which would otherwise  extend beyond the  termination  date of this Agreement as
set forth in  Section  9.1 below  applicable  to a given  loan shall end on such
termination  date; (c) no more than five (5) Interest Periods shall be in effect
at the same time;  (d) no  Interest  Period for any Libor Rate loan shall have a
duration of less than one (1) month and, if the Interest  Period would otherwise
be a  shorter  period,  the  related  Libor  Rate loan  shall  not be  available
hereunder;  and (e) no  Interest  Period in  respect of any term loan may extend
beyond a principal  repayment date thereof unless,  after giving effect thereto,
the  aggregate  principal  amount  of such loan  subject  to Libor  Rate  having
Interest Periods

<PAGE>


that end after such  principal  payment  date shall be equal to or less than the
aggregate  principal amount of such loan to be outstanding  hereunder after such
principal payment date.

         1.21.  "Libor  Rate"  means,  for any Libor Rate loan for any  Interest
Period  therefor,  the rate per annum  (rounded  upwards,  if necessary,  to the
nearest 1/16 of 1%) offered to Bank at approximately 11:00 a.m. Eastern Standard
time (or as soon thereafter as practicable) two business days prior to the first
day of such Interest Period by leading banks in the London  interbank  market of
U.S. dollar deposits in immediately  available funds having a term comparable to
such Interest Period and in an amount  comparable to the principal amount of the
Libor loan applicable to such bank to which such Interest Period relates.

         1.22.  "Maximum Credit" shall mean, with respect to all Borrowers,  the
aggregate amount of $75,000,000;  provided,  however, that such "Maximum Credit"
shall,  except in Lender's sole discretion,  have the following  sublimits:  (i)
with respect to Farah UK only,  (A) the aggregate  principal  amount of loans at
any one time  outstanding  shall not exceed  $5,000,000 in U.S.  Dollars or U.S.
Dollar  Equivalents;  and  (B)  the  aggregate  principal  amount  of the  loans
outstanding at any time based on the Eligible  Inventory of Farah UK, regardless
of the amount of such inventory,  shall not exceed $1,750,000 in U.S. Dollars or
U.S.  Dollar  Equivalents;  (ii) with  respect to Farah USA,  Farah UK and Value
Clothing,  the aggregate unpaid principal amount of the loans outstanding at any
time based on the Eligible  Inventory of Farah USA and the Value Slacks Eligible
Inventory,  regardless of the amounts of such Eligible Inventory or Value Slacks
Eligible Inventory,  shall not exceed  $35,000,000;  (iii) with respect to Value
Clothing only, the aggregate unpaid principal amount of the loans outstanding at
any time based on the Value of the Value Slacks Eligible  Inventory,  regardless
of the amounts of the Value Slacks  Eligible  Inventory,  shall  notwithstanding
clause (ii) not exceed $3,000,000;  and (iv) with respect to Farah USA only, the
aggregate  amount of the term loan  permitted  under Section  2.1.1(e) shall not
exceed the principal sum of  $10,000,000  and shall reduce the Maximum Credit by
the principal amount thereof which is outstanding from time to time.

         1.23.    "Maximum  Legal  Rate"  shall  have  the  meaning set forth in
Section 3.4 hereof.

         1.24. "Net Amount of Eligible  Accounts" shall mean the gross amount of
Eligible  Accounts  less  sales,  excise or  similar  taxes,  and less  returns,
discounts,  claims,  credits and  allowances  of any nature at any time  issued,
owing, granted, outstanding, available or claimed.

         1.25.  "Obligations"  shall  mean  any  and  all  loans,  indebtedness,
liabilities and obligations of any kind owing by us to you,  however  evidenced,
whether  as  principal,  guarantor  or  otherwise,  whether  arising  under this
Agreement, any other Financing Agreement, any Supplement, or otherwise,  whether
now  existing or hereafter  arising,  whether  direct or  indirect,  absolute or
contingent, joint or several, due or not due, primary or secondary liquidated or
unliquidated,  secured or unsecured,  original, renewed or extended, and whether
arising directly or acquired from others (including,  without  limitation,  your
participations or interests in our obligations to others) and including, without
limitation, your charges, commissions,  interest, expenses, costs and attorneys'
fees chargeable to us in connection with all of the foregoing.

         1.26.   "Person"  or   "person"   shall  mean  any   individual,   sole
proprietorship,   partnership,   corporation   (including  a  business   trust),
unincorporated  association,  joint stock  corporation,  trust, joint venture or
other  entity or  government  or any  agency  or  instrumentality  or  political
subdivision thereof.

         1.27.  "Prime  Rate"  shall  mean the prime  commercial  interest  rate
(presently  8.5% per annum) from time to time  publicly  announced by CoreStates
Bank,  N.A. (or its  successors)  at its offices in  Philadelphia,  Pennsylvania
whether or not such announced rate is the best rate available at such bank.

         1.28.  "Raw  Materials"  shall  mean  Eligible  Inventory  of Farah USA
consisting of raw materials used by Farah USA to produce  Work-in-Process and/or
Finished Goods (and including piece goods, major trim and minor trim).

         1.29.    "Records" shall have the meaning set forth in  Section  4.1(f)
hereof.

         1.30.    "Renewal Date" shall mean July 1, 2001, subject to Section 9.1
hereof.
         1.31.    "Revolving Loans" shall mean all  loans  hereunder other  than
the Term Loan.

         1.32.   "Subsidiary"   shall  mean  any  corporation,   association  or
organization,  active or inactive,  as to which more than fifty (50%) percent of
the  outstanding  voting stock or shares or interests  shall now or hereafter be
owned or  controlled,  directly or indirectly by any Person,  any  Subsidiary of
such Person, or any Subsidiary of such Subsidiary.

         1.33. "Supplements" shall mean, collectively, the Covenants Supplement,
the  Trade  Financing  Supplement,  the Farah UK  Supplement,  the  Amended  and
Restated Inventory and Equipment Security Agreement Supplement, dated as of June
1, 1997, by Farah USA and other Supplements to any Financing Agreements that may
exist  from  time  to  time,  as any  of the  same  may  be  amended,  modified,
supplemented,  extended,  renewed, restated,  confirmed or replaced from time to
time.

         1.35.    "Term Loan" or "term loan" shall mean the  loan  described  in
Section 2.1.1(e) hereof.

         1.36. "Trade Financing  Supplement" shall mean the Amended and Restated
Trade Financing Supplement dated as of June 1, 1997, among Borrowers and Lenders
amended, modified,  supplemented,  extended,  renewed,  restated,  confirmed and
replaced from time to time.

         1.37.    "Value" shall mean cost computed on a first-in-first-out basis
or market price, as determined by Lender, whichever is lower.



<PAGE>
         1.38.    "Value Clothing" shall mean  Value  Clothing  Company, Inc., a
Texas  corporation  and  wholly  owned  subsidiary  of  Value  Slacks,  and  its
successors and assigns.

         1.39.    "Value  Slacks"  shall  mean  Value  Slacks,  Inc.,  a   Texas
corporation, and its successors and assigns.

         1.40.    "Value   Slack   Companies"   shall   mean,  individually  and
collectively, Value Slacks and Value Clothing.

         1.41.  "Value Slacks  Eligible  Inventory"  shall mean inventory of the
Value Slacks  Companies  consisting  of finished  goods which are located at the
premises of the Value Slacks Companies and acceptable to Lender in all respects.
General  criteria for Value Slacks  Eligible  Inventory may be  established  and
revised from time to time by Lender in its  exclusive  reasonable  judgment.  In
determining  such  acceptability,  Lender may, but need not, rely on reports and
schedules of such  Eligible  Inventory  furnished to Lender by either or both of
the Value Slacks  Companies  or Farah USA,  but reliance  thereon by Lender from
time to time  shall not be deemed  to limit  its  right to revise  standards  of
eligibility at any time. In general,  except in Lender's sole discretion,  Value
Slacks   Eligible   Inventory   shall  not  include  (A)  raw   materials,   (B)
work-in-process,  (C) components which are not to be incorporated  into finished
goods, (D) spare parts, (E) packaging and shipping materials,  (F) supplies used
or  consumed  in the  business  of the  Value  Slacks  Companies,  (G)  Eligible
Inventory  subject to a security  interest or lien in favor of any third  party,
(H) bill and hold  goods,  (I)  Eligible  Inventory  which is not subject to the
perfected  security interest of Lender and (J) Eligible  Inventory  purchased on
consignment.

         1.42.    "We," "our,"  "us," or "Borrowers" shall collectively refer to
Farah USA, Value Clothing and Farah UK.

         1.43.    "Work-in-Process"  shall  mean Eligible Inventory of Farah USA
which is in the process of being converted from Raw Materials to Finished Goods.

         1.44.    "You," "you,"  "Your(s)," "your(s)" or "Lender" shall refer to
Congress Financial Corporation (Southwest).

Section 2.        LOANS.

         2.1.     You shall, make loans to us from time to time, at our request,
up to the Maximum Credit, on the terms set forth below:

                  2.1.1. Lender shall make the Term Loan described in clause (e)
below and, in its  discretion,  make  Revolving  Loans to Farah USA from time to
time,  at the request of Farah USA,  described  in clauses (a) to (e) below,  as
follows:



<PAGE>


                           (a)      Revolving Loans of up to eighty-five (85%)
percent  of  the  Net  Amount  of  Eligible  Accounts (or such greater or lesser
percentage  thereof as Lender may determine from time to time); plus

                           (b)      Revolving Loans of up to sixty (60%) percent
of the  Farah  USA  Eligible  Inventory  consisting  of Finished  Goods (or such
greater or lesser percentage thereof as Lender may determine from time to time);
plus
                           (c)      Revolving  Loans  of up to ten (10%) percent
of  the  Farah  USA  Eligible  Inventory  consisting of Work-in-Process (or such
greater or lesser percentage thereof as Lender may determine from time to time);
plus
                           (d)      Revolving Loans of up to fifty (50%) percent
of the  Farah  USA  Eligible  Inventory  consisting  of Raw  Materials  (or such
greater or lesser percentage thereof as Lender may determine from time to time);
plus
                           (e)      The    Term   Loan  of   $10,000,000  in the
aggregate, with principal  payments commencing  as of August 1,  1997,  payable:
(i) over  a term  of four  (4) years, (ii) in  installments  of $208,333.33  per
month and   (iii) at the Annual Rate or the Libor Rate  selected and  determined
as set forth in Section 3 below.  Such term  loans  shall  (A) be  evidenced  by
a term  promissory  note in  form  and substance satisfactory to Lender,  (B) be
issued  as  of June 1, 1997, bearing that date, in the original principal amount
of $10,000,000,  (C) have  a maturity date of June 30, 2001,  and (D) be secured
by all of the  Collateral.  Such term loan may not be reborrowed.

                  2.1.2    Value Clothing Loans.

     (a) Lender shall, in its discretion, make loans to Value Clothing from time
to time, at the request of Value Clothing an amount equal to fifty (50%) percent
of the Value Slacks  Eligible  Inventory  consisting of Finished  Goods (or such
greater or lesser percentage  thereof as Lender may determine from time to time)
up to aggregate loans of $3,000,000.

     (b) All  loans  shall be  charged  to a loan  account  in the name of Value
Clothing on Lender's  books.  Lender shall render to Farah USA, as agent for the
Value Slacks  Companies,  each month a statement of its loan account which shall
be considered correct and deemed accepted by, and binding upon, the Value Slacks
Companies  as an account  stated,  except to the extent that  Lender  receives a
written  notice of any specific  exceptions  by Value  Clothing  thereto  within
thirty (30) days after the date of such statement.

     (c) At Lender's option, all principal, interest, fees, commissions,  costs,
expenses or other  charges  payable by Value  Clothing to Lender and any and all
loans and advances by Lender to Value  Clothing  may be charged  directly to the
account of Value Clothing maintained by Lender.
                          
     (d) Until the authority of the Value Slacks Companies to do so is curtailed
or terminated at any time by Lender,  the Value Slacks Companies shall, at their
expense and on behalf of Lender, collect, as the property of Lender and in trust
for Lender,  all  proceeds  from the sale of the  inventory  of the Value Slacks
Companies,  in whatever form, including,  without limitation,  all cash, checks,
credit or debt card  transaction  records,  and all forms of daily  retail store
receipts,  as well as all proceeds of Collateral or any other cash proceeds.  At
such time hereafter as Lender may request,  the Value Slacks Companies shall not
commingle such  collections  with the Value Slacks  Companies'  own funds.  Upon
Lender's  request,  the Value Slacks Companies shall on the day received deposit
all such  proceeds into deposit  accounts  subject to the  provisions  set forth
below  for the  collection  and  transfer  of sales  proceeds.  At such  time as
proceeds of Collateral of the Value Slacks  Companies are deposited into deposit
accounts subject to the provisions set forth below,  such proceeds when received
by  Lender at such  place as Lender  may  designate  from time to time  shall be
credited to the loan  account of Value  Clothing  after  adding two (2) business
days for  remittances  by federal funds wire  transfers and after adding two (2)
business days for collection, clearance and transfer of all other remittance, in
each instance conditional upon final payment to Lender.

     (e) At such time as Lender may request,  the Value Slacks  Companies shall,
in a manner satisfactory to Lender from time to time, enter into deposit account
arrangements and merchant payment  arrangements with respect to credit and debit
card sales,  such that all  proceeds of the sale of the  inventory  of the Value
Slacks Companies of every form,  including,  without  limitation,  cash, checks,
credit or debit card  receipts  and charge  slips and other forms of daily store
receipts,  or amounts payable upon letters of credits,  bankers' acceptances and
other  proceeds of such  Collateral  shall be deposited  into a blocked  account
under  Lender's  control or deposited  into one of the deposit  accounts that is
approved by Lender with respect to which irrevocable instructions from the Value
Slacks  Companies  have been  accepted by the  depository  bank to transfer  all
collected funds to a blocked account under the control of Lender.  In connection
therewith,  the Value Slacks Companies shall execute such instructions,  blocked
account and other agreements as Lender, in its discretion, shall specify.

     (f) The Value Slacks Companies shall  immediately upon obtaining  knowledge
thereof  report to Lender all  reclaimed,  repossessed  or returned goods (other
than  returns in the ordinary  course of business of the Value Slacks  Companies
which shall only be reported to Lender with such frequency and in such manner as
Lender may reasonably require).

                  2.1.3 Lender shall, in its discretion, make Revolving Loans to
Farah UK from time to time, at the request of Farah UK, in  accordance  with the
Farah (UK) Supplement.

         2.2.  All loans shall be charged to a loan  account in our name on your
books.  You shall render to us each month a statement of our loan account  which
shall be considered  correct and deemed  accepted by, and  conclusively  binding
upon, us as an account  stated,  except to the extent that you receive a written
notice of any specific  exceptions  by us thereto  within thirty (30) days after
the date of such statement.

         2.3.  (a) Except in your sole  discretion,  the  outstanding  aggregate
principal  amount of all loans by you to us hereunder  or under any  Supplement,
shall not exceed the Maximum Credit at any time.  Without limiting your right to
demand payment of the Obligations,  or any portion  thereof,  in accordance with
any other  terms of this  Agreement,  or any  Supplement,  in the event that the
outstanding aggregate principal amount of loans by you to us exceeds the Maximum
Credit or the  formulas  set forth in Section 2.1 hereof or as  contemplated  in
Section  2.3(b),  we shall remain liable  therefor and the entire amount of such
excess(es) shall, at your option,  become immediately due and payable, upon your
demand.

                  (b) You may, from time to time, permit the outstanding  amount
of any  components of the loans by you to us, or the  aggregate  amounts of such
outstanding  loans to exceed the amounts available under the lending formulas or
sublimits  provided  for  herein  or  otherwise  applicable  as to  each  of the
Borrowers or $75,000,000, as applicable; provided, that, should you so permit in
any one  instance  such event  shall not  operate to limit,  waive or  otherwise
affect any rights of yours on any future  occasions.  In such event, and without
limiting the right of yours to demand payment of the Obligations, or any portion
thereof,  in  accordance  with any other terms of the Financing  Agreements,  we
shall remain liable therefor and we shall, upon demand by you, which may be made
at any time and from time to time,  repay to you the  entire  amount of any such
excess(es) or in accordance with such other terms as you may agree to in writing
at the time, except, that,  notwithstanding  anything contained herein or in the
other  Financing  Agreement to the  contrary,  Farah UK shall not be required to
repay  any  such  amounts  arising  as a result  of  loans  by you to the  other
Borrowers.

         2.4. At your option, all principal, interest, fees, commissions, costs,
expenses or other charges with respect to this Agreement or any Supplement  (all
of which  shall be  cumulative  and not  exclusive)  and any and all  loans  and
advances by you to us may be charged directly to our account maintained by you.

         2.5.  All loans shall be payable at your office  specified  above or at
such other place as you may  hereafter  designate  from time to time and at your
option and upon your  request,  we shall  execute and deliver to you one or more
promissory  notes in form and substance  satisfactory to you to further evidence
such loans.

Section 3.        INTEREST AND FEES.

         3.1. (a) With respect to Prime Rate loans, interest shall be payable by
us to you on the first day of each month upon the closing daily  balances in our
loan  account for each day during the  immediately  preceding  month,  at a rate
equal to  one-half  percent  (1/2%)  per annum in excess of the Prime  Rate (the
"Annual Rate").  With respect to Libor Rate loans,  interest shall be payable on
the first day of each month on the principal  amounts thereof at a rate equal to
two and  three-quarters of one percent (2.75%)  applicable  thereto per annum in
excess of the Libor  Rate.  The Annual  Rate shall  increase  or  decrease by an
amount  equal to each  increase or  decrease,  respectively,  in the Prime Rate,
effective on the first day of the month after any change in the

<PAGE>


Prime  Rate  based on the  Prime  Rate in effect on the last day of the month in
which any such change  occurs.  The Annual Rate in effect  hereunder on the date
hereof,  expressed  in terms of simple  interest,  is eight and  one-half of one
percent (8.5%) per annum.

                  (b) You shall have the right from time to time to convert  all
or part of a loan based on the Prime Rate into a loan based on the Libor Rate or
to continue in effect any loan based on the Libor Rate; provided,  that: (i) you
give us notice of such conversion or continuation,  substantially in the form of
Exhibit B hereto (which may be given by facsimile with  electronic  confirmation
of receipt) (a "Libor  Borrowing  Notice"),  within two (2) business days before
the end of an existing or new Interest  Period,  as the case may be,  specifying
the term,  amount and other information that we may request with respect to such
Libor Rate loan,  (ii) a Libor  Rate loan may not be  converted  to a Prime Rate
loan except on the last day of the  applicable  Interest  Period,  and (iii) the
requirements of Section 3.1(c), (d), (e) and (f) hereof shall have been met.

                  (c) Subject to the terms and conditions  contained herein, two
(2) business  days after  receipt by Lender of a Libor  Borrowing  Notice,  such
Prime Rate Loans shall be converted to Libor Rate loans or such Libor Rate loans
shall continue, as the case may be; provided,  that, (i) no Event of Default, or
event which with notice of passage of time or both would  constitute an Event of
Default  exists or has  occurred and is  continuing,  (ii) no party hereto shall
have sent any notice of  termination  or  non-renewal  of this  Agreement or the
other  Financing  Agreements,  (iii)  Borrowers  shall have  complied  with such
customary  procedures  as are  established  by Lender and specified by Lender to
Borrower  from time to time for requests by Borrower for Libor Rate loans,  (iv)
no more than five (5) Interest Periods may be in effect at any one time, (v) the
aggregate  amount of the Libor Rate loans  outstanding  must be in an amount not
less than Five  Million  Dollars  ($5,000,000)  or an  integral  multiple of One
Million Dollars  ($1,000,000) in excess thereof,  (vi) the maximum amount of the
Libor Rate loans at any time requested by Borrowers  shall not exceed the amount
equal to (A) the principal  amount of the Term Loan which it is anticipated will
be  outstanding as of the last day of the  applicable  Interest  Period plus (B)
ninety  percent  (90.0%)  of the daily  average of the  principal  amount of the
Revolving  Loans  which  it  is  anticipated  will  be  outstanding  during  the
applicable  Interest  Period,  in each case as determined by Lender (but with no
obligation of Lender to make such  Revolving  Loans) and (vii) Lender shall have
determined that the Interest Period or Libor Rate is available to Lender through
the Bank and can be readily  determined  as of the date of the  request for such
Libor Rate loan by Borrower. Any Libor Borrowing Notice delivered by Borrower to
convert  Prime Rate loans to Libor Rate loans or to continue any existing  Libor
Rate  loans  shall be  irrevocable.  Notwithstanding  anything  to the  contrary
contained  herein,  Lender and Bank shall not be  required  to  purchase  United
States dollar deposits in the London  interbank market or other applicable Libor
Rate market to fund any Libor Rate loans,  but the  provisions  hereof  shall be
deemed to apply as if Lender and Bank had  purchased  such  deposits to fund the
Libor Rate loans.

                  (d) Any Libor Rate loans shall automatically  convert to Prime
Rate loans  described in Section 2.1 hereof upon the last day of the  applicable
Interest  Period,  unless  Lender has received  and  approved a Libor  Borrowing
Notice to continue such Libor Rate loan at least

<PAGE>


two (2)  Business  Days  prior to such  last day in  accordance  with the  terms
hereof. Any Libor Rate loan shall, at Lender's option,  upon notice by Lender to
Borrower,  convert to Prime Rate loans in the event that (i) an Event of Default
shall exist, (ii) this Agreement shall terminate or not be renewed, or (iii) the
aggregate  principal  amount of the Prime Rate loans which have  previously been
converted  to Libor Rate loans or existing  Libor Rate loans  continued,  as the
case may be, at the  beginning  of an Interest  Period  shall at any time during
such Interest  Period exceed  either (A) the aggregate  principal  amount of the
loans then outstanding,  or (B) the sum of the then outstanding principal amount
of the Term Loan plus the  Revolving  Loans then  available  to  Borrower  under
Section 2 hereof with respect to the Libor Rate loans which, in any case, result
in such excess.  Borrower shall pay to Lender,  upon demand by Lender (or Lender
may, at its option, charge any loan account of Borrower) any amounts required to
compensate  Lender,  the  Bank or any  participant  with  Lender  for  any  loss
(including  loss of  anticipated  profits),  cost or  expense  incurred  by such
person,  as a result of the  conversion  of Libor Rate loans to Prime Rate loans
pursuant to any of the events set forth in the previous sentence.

                  (e) Notwithstanding anything to the contrary contained herein,
all Libor Rate loans shall, upon notice by Lender to Borrower,  convert to Prime
Rate loans in the event that (i) any change in applicable  law or regulation (or
the interpretation or administration  thereof) shall either (A) make it unlawful
for Lender,  Bank or any  participant to make or maintain Libor Rate loans or to
comply with the terms  hereof in  connection  with the Libor Rate  loans,  by an
amount  deemed by Lender to be material,  or (B) shall result in the increase in
the costs to Lender,  the Bank or any  participant of making or maintaining  any
Libor Rate loans or (C) reduce the amounts  received or  receivable by Lender in
respect  thereof,  by an amount deemed by Lender to be material or (ii) the cost
to Lender,  the Bank or any  participant of making or maintaining any Libor Rate
loans  affecting the Libor Rate on the London  Interbank  Market shall otherwise
increase by an amount  deemed by Lender to be  material.  Borrower  shall pay to
Lender,  upon demand by Lender (or Lender  may,  at its option,  charge any loan
account of Borrower) any amounts required to compensate  Lender, the Bank or any
participant  for any  loss  (including  loss of  anticipated  profits),  cost or
expense incurred by such person as a result of the foregoing, including, without
limitation, any such loss, cost or expense incurred by reason of the liquidation
or  reemployment  of deposits or other funds  acquired by such person to make or
maintain the Libor Rate loans or any portion  thereof.  A certificate  of Lender
setting  forth the basis  for the  determination  of such  amount  necessary  to
compensate  Lender as  aforesaid  shall be  delivered  to Borrower  and shall be
conclusive, absent manifest error.

                  (f) If any  payments  or  prepayments  in respect of the Libor
Rate loans are received by Lender  other than on the last day of the  applicable
Interest Period (whether pursuant to acceleration,  upon maturity or otherwise),
including any payments  pursuant to the application of collections under Section
8 hereof or any other  payments made with the proceeds of  Collateral,  Borrower
shall pay to Lender upon demand by Lender (or Lender may, at its option,  charge
any loan account of Borrower)  any amounts  required to compensate  Lender,  the
Bank or any  Participant  for any additional loss (including loss of anticipated
profits), cost or expense incurred by such person as a result of such prepayment
or payment, including, without limitation, any loss, cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such person to make or maintain such Libor Rate loans or any portion thereof.

         3.2.  Upon the  occurrence  and during the  continuance  of an Event of
Default or  termination  or  non-renewal  the interest  rate on all  outstanding
unpaid  Obligations  shall,  at Lender's  option,  accrue at a rate equal to two
percent  (2%) per annum in excess of the Annual Rate or four and  three-quarters
of one percent  (4.75%) in excess of the Libor Rate for Libor Rate loans, as the
case  may  be,  from  the  date of such  Event  of  Default  or  termination  or
non-renewal,  and all interest accruing hereunder shall thereafter be payable on
demand.

         3.3.  Interest  shall be  calculated on the basis of a 360-day year and
shall be included in each monthly statement of our loan account.  You shall have
the right,  at your  option,  to charge all  interest to our loan account on the
first day of each month,  in the case of loans based on the Annual Rate,  and on
the last day of the applicable  Interest  Period,  in the case of loans based on
the  Libor  Rate,  and such  interest  shall be  deemed  to be paid by the first
amounts subsequently credited thereto.

         3.4. No agreements, conditions, provisions or stipulations contained in
this Agreement or in any other  agreement  between you and us, or the occurrence
of an  Event  of  Default  hereunder,  or the  exercise  by you of the  right to
accelerate the payment of the maturity of principal and interest, or to exercise
any option whatsoever contained in this Agreement or any other agreement between
you and us, or the arising of any  contingency  whatsoever  shall entitle you to
collect,  in any event,  interest  exceeding  the  maximum  rate of  nonusurious
interest allowed from time to time by applicable state or federal laws as now or
as may hereafter be in effect (the "Maximum Legal Rate"),  and in no event shall
we be obligated  to pay interest  exceeding  such  Maximum  Legal Rate,  and all
agreements,  conditions  or  stipulations,  if any,  which  may in any  event or
contingency  whatsoever operate to bind,  obligate or compel us to pay a rate of
interest  exceeding  the Maximum  Legal Rate shall be without  binding  force or
effect at law or in equity,  to the extent only of the excess of  interest  over
such  maximum  interest  allowed by law. In the event any interest is charged in
excess of the  Maximum  Legal Rate  (herein  referred  to as the  "Excess"),  we
acknowledge  and  stipulate  that any such  charge  shall  be the  result  of an
accidental  and bona fide error,  and such Excess  shall be,  first,  applied to
reduce the principal of any  Obligations  due, and,  second,  returned to us, it
being  the  intention  of the  parties  hereto  not to enter at any time into an
usurious or otherwise  illegal  relationship.  The parties hereto recognize that
with  fluctuations  in the Prime Rate and the Libor  Rate such an  unintentional
result  could  inadvertently  occur.  By the  execution  of this  Agreement,  we
covenant  that (a) the  credit or  return of any  Excess  shall  constitute  the
acceptance  by us of any such  Excess,  and (b) we shall not seek or pursue  any
other remedy,  legal or equitable,  against you based, in whole or in part, upon
the charging or  receiving or any interest in excess of the Maximum  Legal Rate.
For the  purpose of  determining  whether or not any Excess has been  contracted
for,  charged or  received by you,  all  interest  at any time  contracted  for,
charged  or  received  by  you in  connection  with  our  Obligations  shall  be
amortized,  prorated, allocated and spread in equal parts during the entire term
of this Agreement.

         3.5.  Notwithstanding  the  provisions of Sections 3.1 or 3.2 hereof to
the contrary, (a) if at any time the amount of interest computed on the basis of
the Annual Rate or the Libor Rate,  as the case may be,  would exceed the amount
of such interest computed upon the basis of the Maximum Legal Rate, the interest
payable  under this  Agreement  shall be computed  upon the basis of the Maximum
Legal Rate, but any  subsequent  reduction in the Annual Rate or the Libor Rate,
as the case may be, shall not reduce such interest  thereafter payable below the
amount  computed  on the basis of the  Maximum  Legal Rate  until the  aggregate
amount of such  interest  accrued and payable  under this  Agreement  equals the
total amount of interest  which would have accrued if such  interest had been at
all time  computed  solely on the basis of the Annual Rate or the Libor Rate, as
the case may be; and (b) unless preempted by federal law, the Annual Rate or the
Libor Rate,  as the case may be, from time to time in effect  hereunder  may not
exceed the "Indicated Ceiling Rate" from time to time in effect under Chapter 15
of the Texas Credit Code (Vernon's Texas Civil  Statutes),  Section (c), Article
5069-1.04, as amended.

         3.6. The  provisions  of Sections 3.4 and 3.5 hereof shall be deemed to
be incorporated into every document or communication relating to the Obligations
which sets forth or preserves  any account,  right or claim or alleged  account,
right or claim of you with respect to us (or any other obligor in respect of the
Obligations), whether or not any provision of Sections 3.4 or 3.5 is referred to
therein. All such documents and communications and all figures set forth therein
shall, for the sole purpose of computing the extent of the Obligations  asserted
by you thereunder,  be automatically  recomputed by us or any other obligor, and
by any court  considering the same, to give effect to the adjustments or credits
required by Sections 3.4 and 3.5 hereof.

         3.7. If the applicable state or federal law is amended in the future to
allow  greater  rate of  interest  to be charged  under this  Agreement  than in
presently  allowed by applicable  state or federal law,  then the  limitation of
interest hereunder shall be increased to the maximum rate of interest allowed by
applicable  state or federal law as amended,  which  increase shall be effective
hereunder on the  effective  date of such  amendment,  and all interest  charges
owing to you by reason thereof shall be payable upon demand.

         3.8.  The fees  described  in this  Section 3.8 shall be payable if the
average  outstanding  daily principal balance of all loans and Credits by you to
us under the Financing Agreements is less than $17,500,000. With respect to each
month (or part  thereof)  that this  Agreement is in effect or so long as any of
the Obligations are  outstanding,  Borrowers shall pay to Lender a fee at a rate
equal to one-half of one (1/2%) percent per annum  calculated for such month and
payable monthly,  in arrears,  upon the excess, if any, of: (i) $17,500,000 over
(ii) the average of the daily  principal  balances of the loans  outstanding  to
Borrowers and the Credits outstanding for such month (or part thereof).

         3.9.     We  shall  pay  to  you  a  facility fee in an amount equal to
$125,000, payable simultaneously with the execution hereof.

Section 4.        SECURITY INTEREST

         4.1. As security for the prompt performance,  observance and payment in
full of all Obligations,  we hereby grant to you a continuing  security interest
in, a lien upon and a right of setoff against,  and we hereby assign,  transfer,
pledge and set over to you the following  (which  together with any of our other
property in which you may at any time have a security interest or lien,  whether
pursuant to any Supplement, or otherwise, are herein collectively referred to as
the "Collateral"):  All present and future (a) Accounts; (b) moneys,  securities
and other property and the proceeds  thereof,  now or hereafter held or received
by, or in  transit  to, you from or for us,  whether  for  safekeeping,  pledge,
custody, transmission, collection or otherwise, and all of our deposits (general
or special),  balances,  sums and credits with you at any time existing; (c) all
of our right, title and interest, and all of our rights, remedies,  security and
liens,  in, to and in respect of the Accounts and other  Collateral,  including,
without limitation,  rights of stoppage in transit,  replevin,  repossession and
reclamation  and other rights and remedies of an unpaid vendor,  lien or secured
party, guaranties or other contracts of suretyship with respect to the Accounts,
deposits or other security for the obligation of any Account Debtor,  and credit
and other  insurance;  (d) all of our right,  title and  interest  in, to and in
respect of all goods  relating to, or which by sale have  resulted in,  Accounts
including,  without  limitation,  all goods  described in  invoices,  documents,
contracts  or  instruments  with  respect  to,  or  otherwise   representing  or
evidencing, any Accounts or other Collateral, including, without limitation, all
returned,  reclaimed or repossessed  goods;  (e) all deposit  accounts;  (f) all
books, records,  ledger cards, computer programs, and other property and general
intangibles  evidencing or relating to the Accounts and any other  Collateral or
any Account  Debtor,  together with the file cabinets or containers in which the
foregoing are stored  ("Records");  (g) all other general  intangibles  of every
kind and description, including, without limitation, trade names and trademarks,
and the  goodwill  of the  business  symbolized  thereby,  patents,  copyrights,
licenses and Federal, State and local tax refund claims of all kinds and (h) all
proceeds of the  foregoing,  in any form,  including,  without  limitation,  any
claims  against third parties for loss or damage to or destruction of any or all
of the foregoing.

         4.2. We shall keep and maintain, at our cost and expense,  satisfactory
and complete books and records of all Accounts, all payments received or credits
granted thereon,  and all other dealings therewith.  At any time on or after the
occurrence  of an Event of  Default,  and at such times as you may  request,  we
shall deliver to you all original documents  evidencing the sale and delivery of
goods or the  performance of services which created any Accounts,  including but
not limited  to, all  original  contracts,  orders,  invoices,  bills of lading,
warehouse receipts, delivery tickets and shipping receipts. Any such time as you
may request,  we shall deliver to you schedules  describing the Accounts  and/or
written  confirmatory  assignments to you of each Account, in form and substance
satisfactory  to  you  and  duly  executed  by  us,  together  with  such  other
information  as you may  request.  You will  return to us, at our  expense,  any
original  documents  evidencing the sale and delivery of goods which created any
Accounts  delivered to you  pursuant to this Section 4.2 and in your  possession
when your actual or anticipated need therefor has ceased.  In no event shall the
making or the failure to make or the content of any  schedule or  assignment  or
our failure to comply with the  provisions  hereof be deemed or  construed  as a
waiver,  limitation or modification of your security  interest in, lien upon and
assignment  of the  Collateral or our  representations,  warranties or covenants
under this Agreement or any Supplement hereto.

Section 5.        COLLECTION AND ADMINISTRATION.

         5.1.  Until our  authority to do so is curtailed or  terminated  at any
time by you,  we shall,  at our  expense and on your  behalf,  collect,  as your
property  and in trust  for you,  all  remittances  and all  amounts  unpaid  on
Accounts,  and we shall not commingle such  collections  with our own funds.  We
shall on the day received remit all such collections to you in the form received
duly endorsed by us for deposit with you,  unless you shall direct us otherwise.
All  amounts  collected  on  Accounts  when  received  by  you in  your  account
designated for such purpose shall be credited to our loan account,  after adding
two (2) business days for federal funds, wire transfers and after adding two (2)
business  days for  collection,  clearance  and  transfer  of any other  form of
remittances, conditional upon final payment to you.

         5.2. You or your representatives shall at all times have free access to
and right of inspection of the  Collateral and have full access to and the right
to examine and make copies of our Records,  to confirm and verify all  Accounts,
to perform  general audits and to do whatever else you deem necessary to protect
your  interests.  You may at any time remove from our  premises or require us or
any accountants and auditors  employed by us to deliver any Records and you may,
without cost or expense to you, use such of our  personnel,  supplies,  computer
equipment and space at our places of business as may be reasonably necessary for
the handling of collections.

         5.3. We shall  immediately upon obtaining  knowledge  thereof report to
you all reclaimed,  repossessed or returned goods, Account Debtor claims and any
other matter affecting the value,  enforceability  or collectibility of Accounts
in excess of $25,000 and as to such matters for any amount, we shall report same
to you monthly prior to the  occurrence  of an Event of Default and  immediately
upon  obtaining  knowledge  thereof at any time on or after the occurrence of an
Event of  Default.  All claims  and  disputes  relating  to  Accounts  are to be
promptly  adjusted  within a reasonable  time, at our own cost and expense.  You
may,  at your  option,  at any time on or after the  occurrence  and  during the
continuance  of an Event of Default,  settle,  adjust or  compromise  claims and
disputes  relating to Accounts  which are not adjusted by us within a reasonable
time.

         5.4. We shall, in the manner requested by you from time to time, direct
that all proceeds of Accounts, letters of credit, bankers' acceptances and other
proceeds of Collateral shall be payable to a lock box or post office  designated
by you and under your control and/or deposited into a blocked account under your
control and/or deposited into an account  maintained in your name and under your
control and in connection therewith shall execute such lock box, blocked account
or other agreement as you in your sole discretion shall specify.

Section 6.        REPRESENTATIONS, WARRANTIES AND COVENANTS

         We jointly and severally hereby represent,  warrant and covenant to you
the  following   (which  shall  survive  the  execution  and  delivery  of  this
Agreement),  the truth  and  accuracy  of which,  or  compliance  with,  being a
continuing  condition  of the  making  of loans  hereunder  by you or under  any
Supplement:

         6.1. We will not directly sell, lease,  transfer,  abandon or otherwise
dispose  of  all  or any  substantial  portion  of our  property  or  assets  or
consolidate  or merge with or into any other entity to consolidate or merge with
or into us;  provided  that a  wholly-owned  Subsidiary of a Borrower may, on at
least ten (10) days prior written notice to you, merge with and into a Borrower;
provided  that such  Borrower is the  surviving  corporation  and we provide you
copies of all merger documentation on your request. Each of us will at all times
preserve, renew and keep in full force and effect our existence as a corporation
and the rights and  franchises  with  respect  thereto and continue to engage in
business  of the same type as we are engaged as of the date  hereof.  Each of us
shall give you thirty (30) days prior written  notice of any proposed  change in
our corporate name which notice shall set forth the new name.

         6.2.  Our  Records and chief  executive  office are  maintained  at the
address  referred to below. We shall not change such location without your prior
written  consent  and prior to making any such  change,  we agree to execute any
additional  financing  statements  or other  documents or notices  which you may
require.

         6.3. We shall maintain our shipping  forms,  invoices and other related
documents in a form  satisfactory  to you and shall maintain our books,  records
and  accounts  in  accordance  with  generally  accepted  accounting  principles
consistently  applied.  We agree to furnish you monthly with accounts receivable
agings,   inventory  reports  (if  requested  by  you),  and  interim  financial
statements (including balance sheet,  statement of income and retained earnings,
and statement of changes in financial position), and to furnish you, at any time
or from time to time with such other information  regarding our business affairs
and  financial  condition  as you may  reasonably  request,  including,  without
limitation,  balance  sheets,  statements  of income,  statements  of cash flow,
projections,  forecasts,  schedules,  agings and reports.  We hereby irrevocably
authorize and direct all accountants, auditors or other third parties to deliver
to you, at our  expense,  copies of our  financial  statements,  papers  related
thereto,  and other accounting  records of any nature in their possession and to
disclose to you any information they may have regarding our business affairs and
financial conditions.  We shall furnish you with audited financial statements on
an annual basis certified by independent public  accountants  selected by us and
acceptable to you. All such statements and information  shall fairly present our
financial  condition as of the dates and the results of our  operations  for the
periods, for which the same are furnished. Any documents, schedules, invoices or
other papers  delivered to you may be destroyed or otherwise  disposed of by you
one (1) year  after  the date the same  are  delivered  to you,  unless  we make
written  request  therefor and pay all expenses  attendant to their  return,  in
which event you shall return same when your actual or anticipated  need therefor
has ceased, except as to certain originals as specified in Section 4.2 hereof.

         6.4. Each Eligible Account  represents a valid and legally  enforceable
indebtedness  based upon an actual and bona fide sale and  delivery  of goods or
rendition  of services in the  ordinary  course of our  business  which has been
finally  accepted  by the  Account  Debtor and for which the  Account  Debtor is
unconditionally  liable to make  payment of the amount  stated in each  invoice,
document and instrument  evidencing the Eligible  Account in accordance with the
terms thereof,  without offset,  defense or counterclaim  and to the best of our
knowledge will be paid in full at maturity.

         6.5.  All  statements  made and all unpaid  balances  appearing  in the
invoices,  documents and instruments  evidencing each Eligible  Account are true
and correct and are in all respects  what they purport to be and all  signatures
and  endorsements  that  appear  thereon are  genuine  and all  signatories  and
endorsers  have full  capacity to contract  and at the time the Account  arises,
each Account Debtor is solvent and financially  able to pay in full the Eligible
Account when it matures.  None of the transactions  underlying or giving rise to
any Account  shall  violate any state or federal  laws or  regulations,  and all
documents  relating to the Accounts shall be legally  sufficient under such laws
or regulations  and shall be legally  enforceable in accordance with their terms
and all recording,  filing and other  requirements of giving public notice under
any applicable law have been duly compiled with.

         6.6.  We  shall  duly  pay  and  discharge   all  taxes,   assessments,
contributions  and governmental  charges upon or against us or our properties or
assets prior to the date on which penalties  attach thereto.  We shall be liable
for any tax or penalty imposed upon any transaction  under this Agreement or any
Supplement  or giving rise to the Accounts or any other  Collateral or which you
may be required to withhold or pay for any reason and we agree to indemnify  and
hold you harmless with respect thereto, and to repay to you on demand the amount
thereof,  and until paid by us such amount  shall be added to and deemed part of
your loans to us.

         6.7.  Except  as  otherwise   disclosed  to  you  in  writing  and  the
investigations  of us by the  Internal  Revenue  Service  or other  Governmental
Agency in accordance  with their  ordinary  customs and past  practices with us,
there  is no  present  investigation  by  any  governmental  agency  pending  or
threatened against us and there is no action, suit,  proceeding or claim pending
or  threatened  against  us  or  our  assets  or  goodwill,   or  affecting  any
transactions   contemplated  by  this  Agreement,  or  any  Supplement,  or  any
agreements,  instruments  or  documents  delivered  in  connection  herewith  or
therewith before any court,  arbitrator,  or governmental or administrative body
or agency which if adversely  determined  with respect to us would result in any
material  adverse  change in our  business,  properties,  assets,  goodwill,  or
condition, financial or otherwise.

         6.8. The execution,  delivery and  performance of this  Agreement,  any
Supplement, or any agreements,  instruments and documents executed and delivered
in  connection  herewith,  are  within  our  corporate  powers,  have  been duly
authorized, are not in contravention of law or the terms of our Charter, By-Laws
or  other  incorporation  papers,  or  any  material  indenture,   agreement  or
undertaking to which we are a party or by which we are bound.



<PAGE>


         6.9. We shall,  at our expenses  duly,  execute and  deliver,  or shall
cause to be duly executed and delivered,  such further  agreements,  instruments
and documents,  including,  without limitation,  additional security agreements,
mortgages, deeds of trust, deeds to secure debt, collateral assignments, Uniform
Commercial  Code financing  statements or amendments or  continuations  thereof,
landlord's or  mortgagee's  waivers of liens except for the  landlord's  waivers
with  respect to the stores of Value  Slacks and Value  Clothing and consents to
the  exercise  by you of all your  rights  and  remedies  hereunder,  under  any
Supplement or applicable law with respect to the Collateral,  and do or cause to
be done such  further  acts as may be  necessary  or proper in your  opinion  to
evidence,  perfect, maintain and enforce your security interest and the priority
thereof in the Collateral and to otherwise effectuate the provisions or purposes
of this Agreement or any Supplement. Where permitted by law, we hereby authorize
you to execute and file one or more Uniform Commercial Code financing statements
signed only by you.

Section 7.        SPECIFIC POWERS.

         7.1. We hereby constitute you and your agents and any designee,  as our
attorney-in-fact,  at our own cost and  expense,  to exercise at any time all or
any of the  following  powers which,  being  coupled with an interest,  shall be
irrevocable until all Obligations have been paid in full: (a) to receive,  take,
endorse,  assign,  deliver, accept and deposit, in your or our name, any and all
checks, notes, drafts,  remittances and other instruments and documents relating
to the  Collateral;  (b) on or after the  occurrence  of an Event of  Default to
receive  open and  dispose  of all mail  addressed  to us and to  notify  postal
authorities  to change the address for  delivery  thereof to such address as you
may  designate;  (c) to  transmit  to Account  Debtors  notice of your  interest
therein and to request  from such  Account  Debtors at any time,  in your or our
name or that of your  designee,  information  concerning  the  Accounts  and the
amounts owing thereon; (d) on or after the occurrence of an Event of Default, to
notify  Account  Debtors to make  payment  directly to you;  (e) on or after the
occurrence of an Event of Default,  to take or bring,  in your or our name,  all
steps,  actions,  suits or  proceedings  deemed by you necessary or desirable to
effect  collection of the Collateral;  and (f) to execute in our name and on our
behalf any UCC financing statements or amendments thereto. We hereby release you
and your officers,  employees and designees, from any liability arising from any
act or acts under this Agreement or in furtherance thereof,  whether of omission
or commission, and whether based upon any error of judgment or mistake of law or
fact, except for your own willful misconduct or gross negligence.



<PAGE>


Section 8.        EVENTS OF DEFAULT AND REMEDIES

         8.1.  All  Obligations  shall be, at your option,  immediately  due and
payable  without notice or demand  (notwithstanding  any deferred or installment
payments  allowed,  if any,  by any  instrument  evidencing  or  relating to the
Obligations) and any provision of this Agreement or any Supplement, as to future
loans and advances by you shall, at your option,  terminate forthwith,  upon the
termination  or  non-renewal of this Agreement or upon the occurrence of any one
or more of the Events of Default as defined in any Supplement (each an "Event of
Default").

         8.2.  Upon  the  occurrence  of any  Event of  Default  and at any time
thereafter,  you shall have the right (in  addition to any other  rights you may
have under the Agreement, any Supplement or otherwise) without further notice to
us,  to  appropriate,  set off and  apply  to the  payment  of any or all of the
Obligations,  any or all  Collateral,  in such  manner as you shall in your sole
discretion  determine,  to  enforce  payment  of  any  Collateral,   to  settle,
compromise or release in whole or in part, any amounts owing on the  Collateral,
to prosecute any action,  suit or proceeding with respect to the Collateral,  to
extend the time of payment of any and all  Collateral,  to make  allowances  and
adjustments with respect thereto, to issue credits in your or our name, to sell,
assign and deliver the Collateral  (or any part  thereof),  at public or private
sale, at broker's board, for cash, upon credit or otherwise, at your sole option
and discretion, and you may bid or become purchaser any at such sale, if public,
free from any right of redemption which is hereby expressly waived.

         8.3. In the event you seek to take  possession of all or any portion of
the Collateral by judicial process, we irrevocably waive: (a) the posting of any
bond, surety or security with respect thereto which might otherwise be required,
(b) any demand for possession prior to the commencement of any suit or action to
recover the Collateral,  and (c) any requirement that you retain  possession and
not dispose of any Collateral until after trial or final judgment.

         8.4.  We agree that the giving of five (5) days  notice by you,  to our
address set forth below, designating the place and time of any public sale or of
the time after  which any  private  sale or other  intended  disposition  of the
Collateral is to be made, shall be deemed to be reasonable notice thereof and we
waive any other notice with respect thereto.

         8.5. The net cash  proceeds  resulting  from the exercise of any of the
foregoing  rights or  remedies  shall be  applied  to you to the  payment of the
Obligations  in such order as you may elect,  and we shall remain  liable to you
for any  deficiency.  Without  limiting the generality of the foregoing,  if you
enter into any credit  transaction,  directly or indirectly,  in connection with
the  disposition of any Collateral,  you shall have the option,  at any time, in
your sole discretion,  to reduce the Obligations by the principal amount of such
credit transaction or to defer the reduction thereof until actual receipt by you
of cash or other immediately available funds in connection therewith.
<PAGE>
         8.6.     The enumeration of the foregoing rights and  remedies  is  not
intended to  be  exclusive,  and such rights and remedies are in addition to and
not by way of limitation of any other rights or remedies you may have under the
UCC or other applicable law. You shall have the right,  in your sole discretion,
to determine  which rights and remedies,  and in which  order  any of the  same,
are  to  be  exercised,  and  to  determine  which Collateral is to be proceeded
against and in which order, and the  exercise  of any right or remedy  shall not
preclude  the  exercise of any others, all of which shall be cumulative.

         8.7. No act,  failure or delay by you shall  constitute a waiver of any
of your rights and remedies. No single or partial waiver by you of any provision
of this Agreement or any Supplement hereto, or breach or default thereunder,  or
any right or remedy  which you may have  shall  operate as a waiver of any other
provision,  breach,  default, right or remedy or of the same provision,  breach,
default, right or remedy on a future occasion.

         8.8. We waive  presentment,  notice of dishonor,  protest and notice of
all  instruments  included  in or  evidencing  any  of  the  Obligations  or the
Collateral  and any and all notices or demands  whatsoever  (except as expressly
provided herein).  You may, at all times, proceed directly against us to enforce
payment of the  Obligations  and shall not be required to take any action of any
kind to preserve, collect or protect your or our rights in the Collateral.

Section 9.        EFFECTIVE DATE; TERMINATION COSTS.

         9.1.  (a) This  Agreement  and the  other  Financing  Agreements  shall
continue in full force and effect for a term ending on the Renewal Date and from
year to year thereafter,  unless sooner terminated pursuant to the terms hereof;
provided,  that,  (i) Lender or all Borrowers (as one group) (but not any one or
two  Borrowers  alone) may  terminate  this  Agreement  and the other  Financing
Agreements  effective on the Renewal Date or on the  anniversary  of the Renewal
Date in any year by giving to the other  party at least  sixty  (60) days  prior
written notice and (ii) all Borrowers  (but not any one or two Borrowers  alone)
may terminate this Agreement and the other  Financing  Agreements  other than on
the Renewal  Date in any year by giving to Lender at least sixty (60) days prior
written  notice,  subject to the terms hereof  (including,  without  limitation,
Section  9.1(c)  below and the  payment to Lender of the early  termination  fee
provided for in Section 9.2 below);  provided however, that, pursuant to Section
8 of the Farah UK Supplement,  Farah UK may terminate its rights and obligations
under this Agreement,  the Farah UK Supplement,  the Farah UK Agreements and the
other  Financing  Agreements  without  penalty and without  payment of the early
termination  fee  provided in Section 9.2 below.  This  Agreement  and all other
Financing Agreements must be terminated simultaneously except as permitted under
Section 8 of the Farah UK Supplement.

                  (b) In addition, Lender shall have the right to terminate this
Agreement  and the  other  Financing  Agreements  as to  future  loans and other
liabilities of Lender immediately at any time upon the occurrence of an Event of
Default or an act,  condition  or event  which with notice or passage of time or
both would constitute an Event of Default.
<PAGE>
                  (c)      Upon the effective date of termination or non-renewal
of  the  Financing  Agreements,  Borrowers  shall  pay  to  Lender  in full, all
outstanding and unpaid Obligations (including,  but not limited  to,  the  loans
and all interest, fees (including the early  termination fee provided herein, if
applicable),  charges,  expenses  and  other  amounts  provided  for  hereunder,
under  the  other  Financing   Agreements  or  otherwise) and shall furnish cash
collateral to Lender for all undrawn  amounts available  pursuant  to previously
issued and outstanding Credit, by wire transfer in  federal  funds to such  bank
account  of  Lender,  as  Lender  may,  in its discretion,  designate in writing
to Borrowers for such purpose.  Interest shall
be due until and  including  the next  business  day,  if the amounts so paid by
Borrowers  to the bank  account  designated  by Lender are received in such bank
account later than 12:00 noon, New York, New York time.

                  (d) No termination of the Financing  Agreements  shall relieve
or discharge  Borrowers of their duties,  obligations  and  covenants  under the
Financing   Agreements  until  all  Obligations  have  been  fully  indefeasibly
discharged  and  paid,  and  Lender's   continuing  security  interests  in  the
Collateral shall remain in effect until all such Obligations have been fully and
indefeasibly discharged and paid.

         9.2. (a) If Lender  terminates any Financing  Agreement  other than the
Farah UK  Supplement  upon the  occurrence  of an Event of  Default  or,  (b) if
Borrowers  terminate  (i)  prior  to the  Renewal  Date,  or (ii)  prior  to any
subsequent  anniversary  of the Renewal Date, or (c) if any  termination  of the
Financing  Agreements  occurs by either Lender or Borrowers  resulting  from the
sale  approved in writing by Lender of the capital  stock of any  Borrower or of
the  assets  of any  Borrower,  in  view  of the  impracticability  and  extreme
difficulty of ascertaining actual damages and by mutual agreement of the parties
as to a reasonable  calculation  of Lender's  lost profits as a result  thereof,
Farah USA, Farah UK and Value Clothing hereby agree jointly and severally to pay
to Lender,  upon the effective date of such  termination,  an early  termination
fee,  in an  amount  equal  to the  amounts  set  forth  below  opposite  of the
applicable periods:
<TABLE>
<S>    <C>                                                        <C>              

----------------------------------------------------------- ---------------------------------------------------------
                                                                         Prepayment as a Percentage of
                  Prepayment Date/Period                                         Maximum Credit
----------------------------------------------------------- ---------------------------------------------------------
----------------------------------------------------------- ---------------------------------------------------------
       From June 1, 1997 through December 31, 2000                1%, except .50% in the case of terminations
                                                                              under Section 9.2(c)
----------------------------------------------------------- ---------------------------------------------------------
----------------------------------------------------------- ---------------------------------------------------------
                 January 1, 2001 through
                      June 30, 2001                                                    0%
----------------------------------------------------------- ---------------------------------------------------------
----------------------------------------------------------- ---------------------------------------------------------
               July 1, 2001 and thereafter                                            .50%
----------------------------------------------------------- ---------------------------------------------------------
</TABLE>

The early  termination  fees  provided  for in this  Section 9.2 shall be deemed
included in the  Obligations.  Notwithstanding  the  foregoing or anything  else
contained herein to the contrary,  Farah UK may terminate its obligations  under
this Agreement,  the Farah UK Supplement,  the Farah UK Agreements and the other
Financing  Agreement  without penalty and without payment of the termination fee
provided in this  Section 9.2 in  accordance  with the terms and  conditions  of
Section 8 of the Farah UK Supplement.

         9.3. This Agreement and the other Financing Agreements, any Supplement,
and any  agreements,  instruments  or documents  delivered or to be delivered in
connection   herewith  or  therewith   represent   our  entire   agreement   and
understanding  concerning the subject  matter hereof and thereof,  and supersede
all other prior and contemporaneous agreements, understandings, negotiations and
discussions,   representations,   warranties,  commitments,  offers,  contracts,
whether oral or written,  including each Original Financing Agreement,  which is
amended and restated as of the date hereof;  provided,  however,  that each such
other Original Financing Agreement,  executed and delivered as of August 2, 1990
which is not so amended and  restated  and is in full force and effect as of the
date hereof, is hereby confirmed, ratified and approved as so amended, ratified,
supplemented  and  confirmed  to the date hereof as if each thereof were amended
and restated as of the date of this  Agreement in connection  with the execution
of the Financing Agreements.

         9.4. No  provision  hereof  shall be  modified or amended  orally or by
course of conduct but only by a written  instrument  expressly  referring hereto
signed by both parties.

         9.5.  Upon your request we shall pay to you, or reimburse  you for, all
sums, costs and expenses which you pay or incur in connection with or related to
the negotiation,  preparation,  consummation,  administration and enforcement of
this  Agreement,  any  Supplement,  and all other  agreements,  instruments  and
documents  in  connection   herewith  and   therewith,   and  the   transactions
contemplated   hereunder  and   thereunder,   together   with  any   amendments,
supplements,  consents or  modifications  which may be hereafter made or entered
into in respect hereto for thereof,  and all efforts made to defend,  protect or
enforce the security  interest granted herein or therein or in enforcing payment
of the Obligations,  including, without limitation,  appraisal fees, filing fees
and taxes,  title insurance  premiums,  recording taxes,  expenses for searches,
expenses  heretofore  incurred by you and from time to time hereafter during the
course of periodic field examinations of the Collateral and our operations, wire
transfer fees,  check dishonor  fees, the fees and  disbursements  of counsel to
you,  all fees and  expenses  for the service and filing of papers,  premiums on
bonds and undertakings, fees of marshalls, sheriffs, custodians, auctioneers and
others, travel expenses and all court costs and collection charges, all of which
shall be part of the  Obligations and shall accrue interest after demand thereof
at a rate equal to the  highest  rate then  payable  on any of the  Obligations;
provided that the legal fees of Lender's counsel incurred in connection with the
preparation,  negotiation  and  consummation  of this  Agreement  and the  other
Financing Agreements shall not exceed $20,000.

Section 10.       NOTICES.

         10.1.  All  notices,  requests  and  demands to or upon the  respective
parties  hereto  shall be deemed to have been duly given or made as  provided in
the Covenant Supplement.
<PAGE>
Section 11.       WAIVER OF JURY TRAIL; JURISDICTION; CHOICE OF LAW.

         11.1.    WE AND YOU EACH HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY  IN
ANY  ACTION  OR  PROCEEDING  OF  ANY  KIND  ARISING  OUT  OF OR RELATING TO THIS
AGREEMENT,  ANY SUPPLEMENT,  THE  OBLIGATIONS,  THE COLLATERAL OR ANY SUCH OTHER
TRANSACTION.   WE  HEREBY  WAIVE  RIGHTS  OF  SETOFF  AND  RIGHTS  TO  INTERPOSE
COUNTERCLAIMS  IN  THE EVENT  OF  ANY  LITIGATION  WITH  RESPECT  TO ANY  MATTER
CONNECTED   WITH   THIS  AGREEMENT,   ANY  SUPPLEMENT,  THE   OBLIGATIONS,   THE
COLLATERAL  OR  ANY  OTHER  TRANSACTION   BETWEEN THE PARTIES EXCEPT  COMPULSORY
COUNTERCLAIMS  AND WE HEREBY IRREVOCABLY CONSENT AND SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION  OF  THE  DISTRICT  COURTS  OF THE  STATE OF TEXAS  AND THE  UNITED
STATES  DISTRICT  COURT FOR THE NORTHERN  DISTRICT OF TEXAS IN  CONNECTION  WITH
ANY  ACTION  OR  PROCEEDING OF ANY KIND  ARISING  OUT  OF OR  RELATING  TO  THIS
AGREEMENT,  ANY  SUPPLEMENT,  THE  OBLIGATIONS, THE COLLATERAL OR ANY SUCH OTHER
TRANSACTION.

         11.2. In any such litigation we waive personal  service of any summons,
complaint  or other  process  and  agree  that  service  thereof  may be made by
certified or registered mail directed to us at our address set forth below.

         11.3. This Agreement and all transactions thereunder shall be deemed to
be consummated in the State of Texas and shall be governed by and interpreted in
accordance with the laws of the State of Texas. If any part or provision of this
Agreement is invalid or in  contravention  of any  applicable law or regulation,
such part or provision shall be severable  without affecting the validity of any
other party or provision of the Agreement.

         11.4.    Nonapplicability of  Article 5069-15.01 et seq.  Borrowers and
Lender hereby agree that, except for Section 15.10(b) thereof, the provisions of
Tex. Rev. Civ. Stat. Ann.  art.  5069-15.01  et  seq.  (Vernon 1987) (regulating
certain  revolving credit loans  and  revolving  tri-party  accounts)  shall not
apply to this Agreement or any of the other Financing Agreements.

         11.5 WAIVER OF CONSUMER RIGHTS.  EACH BORROWER HEREBY WAIVES ITS RIGHTS
UNDER THE DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT, SECTION 17.41 ET.
SEQ.  BUSINESS & COMMERCE  CODE, A LAW THAT GIVES  CONSUMERS  SPECIAL RIGHTS AND
PROTECTIONS.  AFTER  CONSULTATION  WITH  AN  ATTORNEY  OF  EACH  BORROWER'S  OWN
SELECTION,  EACH  BORROWER  VOLUNTARILY  CONSENTS TO THIS WAIVER.  EACH BORROWER
EXPRESSLY   WARRANTS  AND  REPRESENTS  THAT  SUCH  BORROWER  (a)  IS  NOT  IN  A
SIGNIFICANTLY DISPARATE BARGAINING POSITION RELATIVE TO LENDER, AND (b) HAS BEEN
REPRESENTED BY LEGAL COUNSEL IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT.

                                      EACH BORROWER HAS READ AND UNDERSTANDS
                                   SECTION 11.4: /s/ RGG     (INITIALS OF
                                               OFFICER OF FARAH USA)

                                                 /s/ RGG     (INITIALS OF
                                            OFFICER OF VALUE CLOTHING)


<PAGE>



                                                 /s/ TBP     (INITIALS OF
                                               OFFICER OF FARAH UK)

         11.6.    THIS  WRITTEN  FINANCING   AGREEMENT  REPRESENTS   THE   FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT  BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS,  OR  SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.  THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


Very truly yours,

FARAH U.S.A., INC.
VALUE CLOTHING COMPANY, INC.


By: /s/ Russell G. Gibson
Title:  Chief Financial Officer

Address:

4171 North Mesa
Building D
Suite 500
El Paso, Texas 79902-1433

FARAH MANUFACTURING (U.K.) LIMITED


By:   /s/  Timothy B. Page

Title:     Director

Address:

4171 North Mesa
Building D
Suite 500
El Paso, Texas 79902-1433

Accepted as of June 1, 1997 first written above:

CONGRESS FINANCIAL CORPORATION (SOUTHWEST)

By:     /s/   Mark Galovic, Jr.
Title:  Vice President