POST-CLOSING ESCROW AGREEMENT

     THIS   POST-CLOSING   ESCROW   AGREEMENT,   dated  as  of  August  5,  1997
("Agreement"),  is by and among  Westgate  Fabrics,  Inc.  ("Purchaser"),  Payne
Fabrics, Inc. ("Seller") and Crouch and Hallett, L.L.P. ("Escrow Agent").

                              W I T N E S S E T H:

     WHEREAS,  the Seller  and  Purchaser  are  parties  to that  certain  Asset
Purchase Agreement, dated July 17, 1997 (as amended by Amendment No. 1, thereto,
the "Purchase Agreement")  (capitalized terms not otherwise defined herein shall
have the meanings set forth in the Purchase Agreement); and

     WHEREAS,   the  Seller   agreed  in  the   Purchase   Agreement   that  the
indemnification  obligations  of the Seller  thereunder  shall be secured in the
manner set forth in this Agreement; and

     WHEREAS, as contemplated by the Purchase Agreement, Purchaser has deposited
the sum of $150,000  (together  with any interest  earned  thereon,  the "Escrow
Funds") on the Closing Date in an escrow account with the Escrow Agent;

     In consideration  of the mutual  covenants and agreements  contained herein
and certain other good and valuable  consideration,  the receipt and sufficiency
of which are hereby  acknowledged,  the  parties  hereto  covenant  and agree as
follows:

     1.  Appointment of Escrow Agent and Deposit of Escrow Funds.  The Purchaser
and the Seller hereby appoint and designate the Escrow Agent as the Escrow Agent
hereunder,  and the Escrow Agent hereby accepts such  appointment  and agrees to
serve  hereunder for the purposes and on the terms set forth herein.  The Escrow
Agent shall receive,  hold and deliver the Escrow Funds, as provided for herein.
The  Escrow  Funds  shall  be  invested  in  money  market  and  similar  liquid
investments, as directed by Seller.

     2. Disbursement of the Escrow Funds.

     (a) Unless  and to the extent  that  subparagraphs  (b) or (c) below  shall
apply,  the Escrow  Agent shall hold the Escrow Funds until the later of (i) the
90th day after the  Closing or (ii) 10 days after  finalization  of the  Closing
Balance Sheet (the "Termination  Date"), and shall thereafter deliver all Escrow
Funds held by the Escrow Agent on such Termination Date to the Seller.


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     (b) In the event that,  after  finalization of the Closing Balance Sheet in
accordance with Section 2.4 of the Purchase Agreement, the Closing Date Value is
less than $2.5  million,  Purchaser  shall then be entitled to receive  from the
Escrow Agent the dollar  amount of Escrow Funds as is equal to the dollar amount
of the shortfall between the Closing Date Value and $2.5 million.

     (c) If, at any time prior to the Termination Date,  Purchaser has given the
Escrow Agent a notice (the  "Purchaser  Notice")  that it is entitled to receive
Escrow  Funds as a  result  of the  indemnification  obligations  of the  Seller
arising under the Purchase Agreement,  the Escrow Agent shall give a copy of the
Purchaser  Notice to the Seller.  If the Escrow Agent does not receive a written
objection  from  the  Seller  to the  Purchaser  Notice  prior  to the  10th day
following the date the Purchaser Notice is deemed  delivered to the Seller,  the
Escrow  Agent  shall  disburse  to the  Purchaser  the  amount of  Escrow  Funds
described in the Purchaser Notice. If the Escrow Agent timely receives a copy of
a written objection from the Seller to the Purchaser Notice, then the provisions
of Section 4 hereof shall apply.

     (d) On the date which is 60 days after the Closing  Date,  the Escrow Agent
shall  deliver to Purchaser  an amount equal to the sum of $10,000.  Such amount
shall be taken from the Escrow Funds unless the Escrow Agent has received notice
by such date from the Seller and the Purchaser that the Tax Liens (as defined in
that certain  Amendment  No. 1 to the Purchase  Agreement),  has been  released.
Payment of Escrow Funds to Purchaser  under this section 4(d) does not foreclose
or otherwise impair or affect Purchaser's right to seek indemnification or other
recourse  available to Purchaser under the Purchase  Agreement or otherwise with
respect to any damage incurred by Purchaser, arising from the Tax Liens.

     3. Escrow Agent Duties.  Without in any way limiting any other provision of
this  Agreement,  it is  expressly  understood  and agreed that the Escrow Agent
shall be under no duty or obligation to give any notice, or to do or to omit the
doing of any action with respect to the Escrow Funds. The Escrow Agent shall not
be liable for any error in judgment or any act or steps taken or permitted to be
taken in good faith,  or for any mistake of law or fact,  or for anything it may
do or refrain  from doing in  connection  herewith,  except for its own  willful
misconduct  or gross  negligence.  The Escrow Agent shall not be required in any
way to determine the validity or sufficiency,  whether in form or substance,  of
any instrument,  document, certificate,  statement or notice referred to in this
Agreement or  contemplated  hereby,  or the identity or authority of the persons
executing the same,  and it shall be sufficient if any writing  purporting to be
such instrument, document, certificate,  statement or notice is delivered to the
Escrow Agent and purports to be correct in form and signed or otherwise executed
by the  party  or  parties  required  to sign or  execute  the same  under  this
Agreement.

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     4. Right of Interpleader. Should any controversy arise between or among the
Purchaser and the Seller, or any other person,  firm or entity,  with respect to
this Agreement or the Escrow Funds, or the Escrow Agent should be in doubt as to
what  action to take,  the Escrow  Agent  shall  have the right to (i)  withhold
delivery of the Escrow Funds until the controversy is resolved,  the conflicting
demands are  withdrawn  or the doubt is  resolved,  or (ii)  institute a bill of
interpleader  in a court of applicable  jurisdiction  to determine the rights of
the parties hereto.  Should a bill of interpleader be instituted,  or should the
Escrow Agent be threatened  with  litigation or become involved in litigation in
any manner  whatsoever on account of this Agreement or the Escrow Funds, then as
between themselves and the Escrow Agent,  Purchaser and the Seller,  jointly and
severally,  hereby  bind  and  obligate  themselves,  their  successors,  heirs,
executors and assigns to pay the Escrow Agent its reasonable attorney's fees and
any and all other  disbursements,  expenses,  losses,  costs and  damages of the
Escrow Agent in  connection  with or resulting  from such  threatened  or actual
litigation.

     5.  Indemnity.  Purchaser  and  Seller,  jointly  and  severally,  agree to
indemnify the Escrow Agent  against and hold the Escrow Agent  harmless from any
and all losses,  costs (other than general  servicing of the account),  damages,
expenses, claims and attorney's fees suffered or incurred by the Escrow Agent as
a result of, in connection  with or arising from or out of the acts or omissions
of the Escrow Agent in performance of or pursuant to this Agreement, except such
acts or omissions as may result from the Escrow  Agent's  willful  misconduct or
gross  negligence.  Except  for a claim  for  indemnification  pursuant  to this
Section 5, if applicable, the Escrow Agent shall not deduct any charges from the
Escrow Funds for serving as Escrow Agent.

     6.  Resignation.  The Escrow  Agent may resign upon 10 days' prior  written
notice to Purchaser and the Seller,  and, upon joint instructions from Purchaser
and the Seller,  shall  deliver the Escrow  Funds to any  designated  substitute
Escrow Agent  selected by Purchaser and the Seller.  If Purchaser and the Seller
fail to  designate a substitute  Escrow  Agent within 10 days,  the Escrow Agent
may,  at  its  sole  discretion  and  its  sole  option,  institute  a  bill  of
interpleader as contemplated by Section 4 hereof.

     7.  Termination.  Upon  delivery of all of the Escrow  Funds as provided in
Section 2 or upon the  institution  of a bill of  interpleader  as  provided  in
Section 4 hereof,  this Agreement shall  terminate  except for the provisions of
Section 5.

     8. Notices. Any notice or communication must be in writing and given in the
manner set forth in the  Purchase  Agreement.  For the  purpose  of notice,  the
addresses  of  Purchaser  and the Seller  shall be as set forth in the  Purchase
Agreement,  and the address of the Escrow  Agent shall be as set forth  opposite
its name on the  


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signature  page  hereto.  Any party may change its address for notice by written
notice given to the other parties.

     9. Choice of Laws;  Cumulative  Rights.  This Agreement  shall be construed
under the laws of the State of Texas. All of the Escrow Agent's rights hereunder
are cumulative of any other rights it may have by law or otherwise.

     10.  Counterparts.  This  Agreement  may  be  executed  in  any  number  of
counterparts,  each of which when so executed and  delivered  shall be deemed an
original, and such counterparts together shall constitute only one original.

     11. Entire  Agreement.  This Agreement and any other documents  executed or
delivered  pursuant to this Agreement,  contain the complete agreement among the
parties with respect to the transactions  contemplated  hereby and supersede all
prior agreements and understandings,  whether oral or written, among the parties
with respect to such transactions.

     12.  Binding  Effect.   This  Agreement  and  the  rights,   interests  and
obligations  hereunder  shall be binding  upon and shall inure to the benefit of
the  parties  hereto  and  their  respective  heirs,  personal  representatives,
successors and assigns. 


                            [signature page follows]


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     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first above written.

                                      WESTGATE FABRICS, INC.


                                      By:   /s/ Floyd W. Collins
                                            ------------------------------------
                                      Its:  Chief Executive Officer


                                      PAYNE FABRICS, INC.


                                      By:   /s/ Thomas R. Druggish
                                            ------------------------------------
                                      Its:  Vice President


                                      ESCROW AGENT:

                                      Crouch & Hallett, L.L.P.


                                      By:   /s/ Bruce H. Hallett
                                            ------------------------------------
                                            Bruce H. Hallett

                                      Address:   717 N. Harwood, Suite 1400
                                                 Dallas, Texas 75201





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