SECURITY AGREEMENT
                                   (BORROWER)


     THIS SECURITY AGREEMENT (this "Agreement"), made as of the 26th of January,
1996, by ONEITA  INDUSTRIES,  INC., a Delaware  corporation (the "Company"),  in
favor of SUNTRUST BANK, ATLANTA, a Georgia banking corporation ("SunTrust"),  as
collateral  agent  (SunTrust,  in such  capacity,  the  "Collateral  Agent") for
itself,  First  Union  National  Bank of  South  Carolina,  a  national  banking
association  ("First Union"),  NatWest Bank N.A., a national banking association
("NatWest"),  and The  Prudential  Insurance  Company of  America,  a New Jersey
corporation   ("Prudential")  (each  of  SunTrust,   First  Union,  NatWest  and
Prudential,   together  with  their  respective   successors  and  assigns,  are
hereinafter   referred  to   individually,   a  "Lender"  and  collectively  the
"Lenders").

                              W I T N E S S E T H :


     WHEREAS, SunTrust, First Union and NatWest (the "Credit Agreement Lenders")
have agreed to make  available  to the Company a  $60,000,000  revolving  credit
facility (the "Revolving  Credit  Facility")  pursuant to that certain Revolving
Credit  Agreement,  dated as of the date hereof,  among the  Company,  SunTrust,
First Union and NatWest as  Lenders,  SunTrust  and First Union as Agent for the
Credit  Agreement  Lenders and SunTrust as  Administrative  Agent for the Credit
Agreement Lenders (as amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement");

     WHEREAS,  on December 20, 1988,  Prudential  purchased from the Company its
senior  promissory  note, dated as of December 20, 1988, in the stated principal
amount of $20,000,000, of which $9,230,766 remains outstanding, pursuant to that
certain Note Agreement,  dated as of December 20, 1988,  between  Prudential and
the Company (as  heretofore and hereafter  amended,  restated,  supplemented  or
otherwise  modified  from  time to time,  the  "Prudential  Agreement"),  and in
connection with the  establishment of the Revolving Credit Facility,  Prudential

<PAGE>

has  agreed  to make  certain  amendments  to the  terms  and  covenants  of the
Prudential Agreement (the "Prudential Amendment"); and

     WHEREAS,  it is a condition precedent to the establishment of the Revolving
Credit  Facility and to Prudential's  agreeing to the Prudential  Amendment that
the Company enter into this  Agreement,  and the Company  wishes to fulfill said
condition precedent; and

     NOW,  THEREFORE,  in order to induce the Credit Agreement Lenders to extend
the  Revolving  Credit  Facility  and  Prudential  to enter into the  Prudential
Amendment  and for  other  good and  valuable  consideration,  the  receipt  and
sufficiency  of  which is  hereby  acknowledged,  the  parties  hereto  agree as
follows:

     1. Defined Terms.  Unless  otherwise  defined herein,  terms defined in the
Credit  Agreement are used herein as therein  defined,  and the following  terms
shall have the following  meanings (such  meanings  being equally  applicable to
both the singular and plural forms of the terms defined):

     "Account  Debtor" shall mean any "account  debtor," as such term is defined
in Section 9-105(1)(a) of the UCC.

     "Accounts"  shall  mean any  "account,"  as such term is defined in Section
9-106 of the UCC, now owned or hereafter acquired by the Company or in which the
Company now has or hereafter acquires any rights,  wherever located,  and in any
event, shall include,  without limitation,  all accounts receivable,  book debts
and other rights to payment and forms of obligations (other than those evidenced
by Chattel Paper,  Documents or Instruments) now owned or hereafter  received or
acquired by or belonging or owing to the Company (including, without limitation,
under any trade names, styles or divisions thereof) arising out of goods sold or
leased or services  rendered by the Company and all of the Company's  rights in,
to and under all purchase orders or receipts now owned or hereafter  acquired by
it for  goods  or  services,  and  all  of the  Company's  rights  to any  goods
represented  by any of the  foregoing  (including,  without  limitation,  unpaid
seller's rights of rescission, replevin, reclamation and stoppage in transit and
rights to returned,  reclaimed or repossessed  goods),  and all moneys due or to
become  due to the  Company  under  all  contracts  for the sale of goods or the
performance  of services  or both by the  Company  (whether or not yet earned by
performance  on  the  part  of the  Company  or in  connection  with  any  other
transaction),  now in  existence  or  hereafter  occurring,  including,  without
limitation,  the right to  receive  the  proceeds  of said  purchase  orders and

<PAGE>

contracts,  and all collateral  security and guarantees of any kind given by any
Person with respect to any of the foregoing and all insurance  policies insuring
any of the foregoing.

     "Chattel Paper" shall mean any "chattel  paper," as such term is defined in
Section  9-105(1)(b) of the UCC, now owned or hereafter  acquired by the Company
or in which the Company now has or  hereafter  acquires  any rights and wherever
located.

     "Collateral"  shall have the meaning  assigned to such term in Section 2 of
this Security Agreement.

     "Consignee" shall have the meaning assigned to such term in Section 5(l) of
this Security Agreement.

     "Contracts"  shall mean all contracts,  undertakings,  or other  agreements
relating to or governing all Accounts and Inventory (other than rights evidenced
by Chattel Paper,  Documents or  Instruments)  in or under which the Company may
now or hereafter have any right, title or interest and wherever located, subject
to  any  limitations  or  prohibitions  contained  therein,  including,  without
limitation,  any agreement relating to the terms of payment of an Account or the
terms of performance thereof.

     "Credit  Agreement"  shall mean that certain  Revolving  Credit  Agreement,
dated as of the date hereof,  among the Company,  the Credit Agreement  Lenders,
SunTrust and First Union as Agent for the Credit Agreement  Lenders and SunTrust
as Administrative  Agent for the Credit Agreement Lenders, as hereafter amended,
restated, supplemented or otherwise modified from time to time.

     "Credit Agreement Lenders" shall mean, collectively,  SunTrust, First Union
and  NatWest,  together  with  their  successors  and  assigns  under the Credit
Agreement.

     "Credit  Documents"  shall  mean  the  Credit  Agreement,   the  Prudential
Agreement,  each Exhibit and Schedule to the Credit Agreement and the Prudential
Agreement, the Notes, the Guaranty Agreements,  the Intercreditor Agreement, the
Security Documents,  the Supplemental Documents hereafter executed and delivered
to the Lenders and the  Collateral  Agent and each other  document,  instrument,
certificate and opinion executed and delivered in connection with the foregoing,
each as amended, restated, supplemented or otherwise modified from time to time.



                                       1
<PAGE>

     "Documents"  shall mean any "documents," as such term is defined in Section
9-105(1)(f)  of the UCC,  now owned or  hereafter  acquired by the Company or in
which the Company now has or hereafter acquires any rights and wherever located,
relating to or governing any Accounts or Inventory.

     "Event of  Default"  shall  mean any "Event of  Default"  as defined in the
Credit Agreement or as defined in the Prudential Agreement.

     "Facility" shall mean either the $60,000,000 revolving credit facility made
available to the Company by the Credit Agreement  Lenders pursuant to the Credit
Agreement or the $9,230,766 term loan made to the Company by Prudential pursuant
to the  Prudential  Agreement,  and the term  "Facilities"  shall  mean all such
facilities, collectively.

     "General Intangibles" shall mean any "general intangibles," as such term is
defined in Section  9-106 of the UCC,  now owned or  hereafter  acquired  by the
Company or in which the Company now has or hereafter  acquires any rights,  and,
in any event, shall include,  without limitation,  all right, title and interest
which the Company may now or  hereafter  have in,  under or with  respect to any
Contract,  causes of action,  franchises,  tax refund  claims,  customer  lists,
Trademarks,   Patents,  rights  in  intellectual  property,  Licenses,  permits,
copyrights, trade secrets,  proprietary or confidential information,  inventions
and  discoveries   (whether   patented  or  patentable  or  not)  and  technical
information,  procedures,  designs,  know-how,  software,  data bases,  business
records data, processes,  models, drawings, materials and records, goodwill, all
claims under guaranties, security interests or other security held by or granted
to the Company to secure payment of the Accounts by an Account Debtor  obligated
thereon,  all rights of indemnification and all other intangible property of any
kind and  nature,  in each case,  as the  foregoing  relate to any  Accounts  or
Inventory.

     "Government  Agency" shall mean the United States of America,  any federal,
local  or  other  political   subdivision  thereof  and  any  entity  exercising
executive, legislative, judicial, regulatory or administrative functions thereof
or pertaining thereto.

     "Guarantor" shall mean Oneita-Kinston  Corp., a North Carolina  corporation
and a wholly owned  subsidiary  of the Company,  together  with all  Significant
Subsidiaries of the Company that hereafter execute or join a Guaranty Agreement.



                                       2
<PAGE>

     "Guaranty Agreements" shall mean,  collectively,  (i) that certain Guaranty
Agreement,  dated as of the date hereof,  executed by the  Guarantor in favor of
SunTrust  and  First  Union as  Agents  for the  Credit  Agreement  Lenders,  as
hereafter  amended,  restated,  supplemented or otherwise  modified from time to
time and (ii) that  certain  Guaranty  Agreement,  dated as of the date  hereof,
executed  by the  Guarantor  in  favor  of  Prudential,  as  hereafter  amended,
restated, supplemented or otherwise modified from time to time.

     "hereby," herein," hereof," hereunder" and words of similar import refer to
this Security Agreement as a whole (including, without limitation, any schedules
hereto) and not merely to the specific Section, paragraph or clause in which the
respective word appears.

     "Instruments"  shall  mean any  "instrument,"  as such term is  defined  in
Section  9-105(1)(i) of the UCC, now owned or hereafter  acquired by the Company
or in which the Company now has or hereafter acquires any rights, in either case
as Proceeds  from any Accounts or Inventory  and  wherever  located,  other than
instruments  that  constitute,  or  are a  part  of a  group  of  writings  that
constitute, Chattel Paper.

     "Intercreditor  Agreement" shall mean that certain Intercreditor Agreement,
dated as of the date hereof,  among the Lenders,  and acknowledged and agreed to
by the Company and the Subsidiary  Guarantor,  as hereafter  amended,  restated,
supplemented or otherwise modified from time to time.

     "Inventory"  shall mean any "inventory," as such term is defined in Section
9-109(4) of the UCC, now owned or hereafter  acquired by the Company or in which
the Company now has or hereafter acquires any rights and wherever located,  and,
in any event, shall include,  without  limitation,  all inventory,  merchandise,
goods and  other  personal  property,  now owned or  hereafter  acquired  by the
Company or in which the Company  now has or  hereafter  acquires  any rights and
wherever located, which are held for sale or lease or are furnished or are to be
furnished under a contract of service or which constitute raw materials, work in
process or materials used or consumed or to be used or consumed in the Company's
business,  or the processing,  packaging,  delivery or shipping of the same, and
all finished goods.

     "License" shall mean any Patent License, Trademark License or other license
under  which the Company is the  licensor  or  licensee  relating to Accounts or
Inventory,  and in the case of Licenses under which the Company is the licensor,
all rights to collect royalties thereunder.



                                       3
<PAGE>

     "Lien" shall mean any mortgage,  pledge,  security  interest,  encumbrance,
lien or charge of any kind or description and shall include, without limitation,
any agreement to give any of the foregoing,  any conditional sale or other title
retention  agreement,  any lease in the nature  thereof  including  any lease or
similar  arrangement  with a public  authority  executed in connection  with the
issuance of industrial  development  revenue bonds or pollution  control revenue
bonds, and the filing of or agreement to give any financing  statement under the
Uniform Commercial Code of any jurisdiction.

     "Notes"  shall mean,  collectively,  the  Revolving  Credit  Notes and that
certain  Senior Note due  October  31,  1998,  dated as of  December  20,  1988,
executed by the Company in favor of Prudential in the initial  principal  amount
of $20,000,000, as heretofore amended or modified.

     "Patent  License" shall mean all written  agreements  granting any right to
make,  use, sell and/or  practice any invention or discovery that is the subject
matter of a Patent now owned or  hereafter  acquired  by the Company or in which
the Company now has or hereafter  acquires  any rights,  relating to Accounts or
Inventory.

     "Patent" or "Patents"  shall mean one or all of the  following now owned or
hereafter  acquired or  developed by the Company or in which the Company now has
or hereafter acquires any rights, including, without limitation, pursuant to any
Patent  License,  and  wherever  located,  to the extent  related to Accounts or
Inventory:  (i) all letters patent of the United States or any other country and
all  applications  for letters patent of the United States or any other country,
and (ii) all  reissues,  reexaminations,  continuations,  continuations-in-part,
divisions, and extensions of any of the foregoing.

     "Proceeds"  shall  mean  "proceeds,"  as such term is  defined  in  Section
9-306(1) of the UCC and, in any event, shall include,  without  limitation,  (i)
any and all proceeds of any insurance,  indemnity,  warranty or guaranty payable
to the Company from time to time with respect to any of the Collateral, (ii) any
and all payments (in any form whatsoever) made or due and payable to the Company
from  time  to  time  in   connection   with  any   requisition,   confiscation,
condemnation,  seizure or forfeiture of all or any part of the Collateral by any
governmental body, authority, bureau or agency (or any person acting under color
of governmental authority), (iii) any claim of the Company against third parties


                                       4
<PAGE>

(A) for past, present or future  infringement of any Patent or Patent License or
(B) for past,  present or future  infringement  or dilution of any  Trademark or
Trademark  License or for injury to the goodwill  associated with any Trademark,
Trademark  registration or Trademark licensed under any Trademark License,  (iv)
any  and all  other  amounts  from  time to time  paid or  payable  under  or in
connection with any of the  Collateral,  and (v) the following types of property
acquired with cash  proceeds:  Accounts,  Chattel Paper,  Contracts,  Documents,
General Intangibles and Inventory.

     "Prudential" shall mean The Prudential  Insurance Company of America, a New
Jersey corporation.

     "Prudential Agreement" shall mean that certain Note Agreement,  dated as of
December 20, 1988,  between the Company and  Prudential,  as  heretofore  and as
hereafter  amended,  restated,  renewed,  extended,  supplemented  or  otherwise
modified from time to time, pursuant to which Prudential purchased the Company's
senior  promissory note, dated as of December 20, 1988 in the current  principal
amount of $9,230,766.

     "PTO"  shall mean the United  States  Patent and  Trademark  Office and its
successors.

     "Secured  Obligations" shall mean all present and future obligations of the
Company and its Subsidiaries incurred under, with respect to or evidenced by the
Credit Agreement,  the Prudential Agreement,  the Notes, the Security Documents,
the Guaranty  Agreements,  the other Credit Documents and all other  agreements,
documents and instruments  evidencing any of the Facilities,  including  without
limitation  all  loans  evidenced  by  the  Notes,  interest  accruing  thereon,
make-whole  and  yield  maintenance  premiums  required  thereunder  (including,
without  limitation,  the  Make-Whole  Premium  (as  defined  in the  Prudential
Agreement)),   and  fees  payable   thereunder   and  all  other   indebtedness,
liabilities,  obligations,  covenants  and  duties of the  Company to any of the
Secured  Parties,  of every kind,  nature and  description,  direct or indirect,
absolute or  contingent,  due or not due, in  contract  or tort,  liquidated  or
unliquidated,  arising  under,  with  respect  to or  evidenced  by  the  Credit
Agreement,  the Prudential  Agreement,  the Notes, the Security  Documents,  the
Guaranty  Agreements,  the other  Credit  Documents  and all  other  agreements,
documents and instruments evidencing any of the Facilities,  by operation of law
or  otherwise,  now  existing  or  hereafter  arising  or whether or not for the
payment of money or the performance or the nonperformance of any act, including,


                                       5
<PAGE>

but not limited to, all debts,  liabilities and obligations owing by the Company
to others which the Lenders may have obtained by  assignment  or otherwise,  and
all damages which the Company may owe to any of the Secured Parties by reason of
any breach by the Company of any representation,  warranty,  covenant, agreement
or other provision of the Credit Agreement, the Prudential Agreement, the Notes,
the Security Documents, the Guaranty Agreements,  all other Credit Documents and
all  other  agreements,   documents  and  instruments   evidencing  any  of  the
Facilities.

     "Secured  Parties"  shall mean,  collectively,  the Collateral  Agent,  the
Lenders,  SunTrust  in its  capacity as Agent and  Administrative  Agent for the
Credit Agreement Lenders and First Union in its capacity as Agent for the Credit
Agreement Lenders.

     "Security Agreement" shall mean this Security Agreement, as the same may be
amended, restated,  supplemented or otherwise modified from time to time and any
exhibits or schedules hereto.

     "Security Documents" shall mean, collectively,  this Security Agreement and
that  certain  Security  Agreement  (Guarantors),  dated as of the date  hereof,
executed  by the  Subsidiary  Guarantor  in favor of the  Collateral  Agent,  as
hereafter  amended,  restated,  supplemented or otherwise  modified from time to
time,  and  all  UCC  financing  statements  naming  the  Company  or any of its
Subsidiaries as debtor and the Collateral Agent as secured party.

     "Supplemental Documents" shall mean, collectively,  the documents described
on Schedule 6 executed or  delivered  by any  Significant  Subsidiary  after the
Closing Date.

     "Trademark License" shall mean all written agreements granting any right to
use any Trademark or Trademark  registration now owned or hereafter  acquired by
the Company or in which the Company now has or hereafter acquires any rights.

     "Trademark"  or  "Trademarks"  shall mean one or all of the  following  now
owned or  hereafter  acquired  by the Company or in which the Company now has or
hereafter acquires any rights to the extent related to any Accounts or Inventory
(including,  without  limitation,  pursuant to any Trademark  License):  (i) all
trademarks,  trade names, corporate names, business names, trade styles, service
marks,  logos, other source or business  identifiers,  now existing or hereafter
adopted  or  acquired,   all  registrations  and  recordings  thereof,  and  all


                                       6
<PAGE>

applications   in   connection   therewith,   including,   without   limitation,
registrations,  recordings and  applications  in the PTO or any other country or
any political  subdivision thereof,  (ii) all extensions or renewals thereof and
(iii) the  goodwill  of the  Company  business  connected  with the use of,  and
symbolized by, any of the foregoing.

     "UCC" shall mean the Uniform  Commercial Code as the same may, from time to
time,  be in effect in the State of  Georgia;  provided,  however,  in the event
that, by reason of mandatory  provisions  of law, any or all of the  attachment,
perfection  or  priority  of  the  Secured  Parties'  security  interest  in any
Collateral  is  governed  by the  Uniform  Commercial  Code  as in  effect  in a
jurisdiction  other than the State of  Georgia,  the term  "UCC"  shall mean the
Uniform  Commercial Code as in effect in such other jurisdiction for purposes of
the provisions  hereof relating to such  attachment,  perfection or priority and
for purposes of definitions related to such provisions.

     "Value" shall mean,  with respect to any Inventory,  the lower of FIFO cost
or market value of such Inventory.

     2. Grant of Security  Interest.  (a) As collateral  security for the prompt
and complete payment and performance  when due (whether at stated  maturity,  by
acceleration  or  otherwise)  of all the Secured  Obligations  and to induce the
Credit  Agreement  Lenders to enter into the Credit  Agreement and Prudential to
enter into the  Prudential  Amendment and to extend the Facilities in accordance
with the terms thereof,  the Company hereby pledges to the Collateral Agent, for
ratable  benefit of the Secured  Parties,  and hereby  grants to the  Collateral
Agent,  for the ratable benefit of the Secured Parties,  a security  interest in
all of the  Company's  right,  title and interest in, to and under the following
(all of which being hereinafter collectively referred to as the "Collateral"):

           (i)     all Accounts of the Company;

           (ii)    all Chattel Paper of the Company;

           (iii)   all Contracts of the Company;

           (iv)    all Documents of the Company;

           (v)     all General Intangibles of the Company;

           (vi)    all Instruments of the Company;

           (vii)   all Inventory of the Company;
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<PAGE>

           (viii) all  accounts  maintained  by the Company  with any  financial
         institution,   including  without  limitation,   all  of  the  accounts
         described  in  Schedule  5  attached  hereto,  and all funds on deposit
         therein,  all  investments  arising  out  of  such  funds,  all  claims
         thereunder or in connection therewith, all cash, securities, rights and
         other property at any time and from time to time  received,  receivable
         or otherwise  distributed  in respect of such  accounts,  such funds or
         such investments;

         (ix)   all   books,   records,    printouts,   ledger   cards,   files,
         correspondence,  computer  programs,  tapes,  disks  and  related  data
         processing  software,  including  source and object codes (owned by the
         Company or in which it has an interest)  which at any time  evidence or
         contain  information  relating  to any of  the  collateral  (including,
         without limitation, customer lists and supplier lists) or are otherwise
         necessary  or  helpful  in  the   collection   thereof  or  realization
         thereupon;

           (x) all guaranties,  warranties,  liens on real or personal property,
         leases,  and other  agreements  and property which in any way secure or
         relate to any  Accounts,  Inventory,  General  Intangibles,  Contracts,
         Documents,  Instruments  or  Chattel  Paper,  or are  acquired  for the
         purpose of securing and enforcing any item thereof; and

           (xi) to the extent not  otherwise  included,  all Proceeds of each of
         the foregoing and all accessions  to,  substitutions  and  replacements
         for, and rents, profits and products of each of the foregoing;

provided,  however,  that  the  foregoing  grant of a security  interest shall
not include a security interest in, and the term "Collateral"  shall not include
any equipment (as such term is defined in Section 9-109(2) of the UCC), any real
estate,  plants or fixtures (as such term is defined in Section  9-313(1) of the
UCC) or any Patent License,  Trademark License or equipment lease of the Company
to the extent that the granting of a security  interest in such Patent  License,
Trademark  License  or  equipment  lease is  prohibited  by the  terms  thereof;


                                       9
<PAGE>

provided,   further  that  upon  the  termination  or  expiration  of  any  such
prohibition  with  respect  to any such  Patent  License,  Trademark  License or
equipment lease, such Patent License, Trademark License or equipment lease shall
become subject to the security interest hereunder and shall thereafter be deemed
to be Collateral.

     (b) In addition, as collateral security for the prompt and complete payment
and performance  when due of the Secured  Obligations and in order to induce the
Lenders as aforesaid, each Lender is hereby granted a lien and security interest
in all  property  of  the  Company  held  by  such  Lender,  including,  without
limitation,  all  Property  of  every  description,  now  or  hereafter  in  the
possession or custody of or in transit to such Lender for any purpose, including
safekeeping,  collection  or pledge,  for the account of the  Company,  or as to
which the Company may have any right or power.

     (c) The  Company  intends  and  hereby  acknowledges  that  the  grant of a
security  interest in the  Collateral to the Collateral  Agent,  for the ratable
benefit of the Secured Parties,  conveys a security interest in all right, title
and interest of the Company to the Collateral,  whether such Collateral is owned
individually, jointly or severally by the Company.

     3.  Right of the  Secured  Parties;  Limitations  on the  Secured  Parties'
Obligations.  It is expressly agreed by the Company that, anything herein to the
contrary  notwithstanding,  the Company  shall  remain  liable under each of its
Contracts and each of its Licenses to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, and the Company shall
perform all of its duties and obligations thereunder, all in accordance with and
pursuant to the terms and  provisions of each such Contract or License.  None of
the Secured Parties shall have any obligation or liability under any Contract or
License by reason of or arising out of this  Security  Agreement or the granting
to the  Collateral  Agent or any  other  Secured  Party of a  security  interest
therein or the receipt by the Collateral Agent or any other Secured Party of any
payment  relating to any  Contract  or License  pursuant  hereto,  nor shall the
Collateral  Agent or any other  Secured  Party be required or  obligated  in any
manner to perform or fulfill  any of the  obligations  of the  Company  under or
pursuant  to any  Contract or License,  or to make any  payment,  or to make any
inquiry as to the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any Contract or License, or to
present  or file any claim,  or to take any  action to  collect  or enforce  any
performance  or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.



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<PAGE>

     4.   Representations,   Warranties  and   Covenants.   The  Company  hereby
represents,  warrants and covenants that: (a) all of the Inventory is located at
the places  specified  in  Schedule 1 attached  hereto and such  location  is an
owned,  leased or bailment  location as specified in Schedule 1 attached hereto.
The correct  corporate  name,  the  principal  place of  business  and the chief
executive  office of the Company and the places  where the  Company's  books and
records concerning the Collateral are currently kept are set forth in Schedule 2
attached  hereto and made a part  hereof.  All records  concerning  Accounts and
General  Intangibles and all originals of any Documents,  Instruments or Chattel
Paper are  located  at the  addresses  set forth on  Schedule  2 and none of the
Accounts is evidenced by a promissory note or other Instrument.

     (b)  The  amount  represented  by the  Company  from  time  to  time to the
Collateral  Agent as the amount owing by each  Account  Debtor or by all Account
Debtors in respect of any Accounts  will,  at such time,  be the correct  amount
actually and unconditionally owing by such Account Debtor(s) thereunder, (except
to the extent,  if any,  that such Account  Debtor(s)  may be entitled to normal
trade discounts, adjustments, returns and allowances).

     (c) The  Company has  exclusive  possession  and control of the  Inventory,
except for (i) Inventory  temporarily  in transit with common or other  carriers
and (iii) Inventory  located at (A) a location  specified on Schedule 1 attached
hereto or (B) such other  locations  as are  permitted by the  Collateral  Agent
pursuant to Section 5 of this Security Agreement.

     (d) The Company is the legal and beneficial owner of, or has rights to use,
the Collateral free and clear of all Liens. The Company has not, during the five
(5) years preceding the date hereof,  been known as or used any other corporate,
trade or fictitious name, except as disclosed on Schedule 3 hereto, nor acquired
all or  substantially  all the assets,  capital  stock or operating  unit of any
Person,  except as  disclosed  on  Schedule 3 hereto,  and each  predecessor  in
interest of the Company during the five (5) years  preceding the Closing Date is
disclosed on Schedule 3 hereto.

     (e) This Security  Agreement  creates in favor of the Collateral Agent, for
the ratable benefit of the Secured Parties,  a legal, valid and enforceable Lien
on the  Collateral,  securing  the  payment  of the  Secured  Obligations.  When
financing statements have been filed in the appropriate offices under the UCC in


                                       11
<PAGE>

the  locations  listed on  Schedule  4, the  Collateral  Agent will have a fully
perfected first priority Lien on the Collateral,  to the extent such Lien may be
perfected by UCC filings.

     (f) No  authorization,  approval,  or other  action by, and no notice to or
filing with, any  Governmental  Agency is required either (i) for the grant of a
Lien by the Company in the  Collateral  pursuant to this  Security  Agreement or
(ii) the  exercise by the  Collateral  Agent of the rights  provided for in this
Security Agreement or the remedies in respect to the Collateral pursuant to this
Security Agreement,  except in the case of clause (ii), the filings described in
the preceding Section 4(e).

     (g) (i) As of the date hereof,  the  Trademarks are  subsisting,  valid and
enforceable,  and no claim has been made that the Company's use of any Trademark
does or may  violate  the rights of any third  person,  and (ii) the Company has
used,  and will  continue to use for the  duration of this  Security  Agreement,
reasonably necessary statutory notice in connection with its use of Trademarks.

     5. Covenants.  The Company  covenants and agrees with the Collateral  Agent
and the other  Secured  Parties  that  from and after the date of this  Security
Agreement:

     (a) At any  time  and  from  time to  time,  upon  the  Collateral  Agent's
reasonable request and at the expense of the Company,  the Company will promptly
and duly execute and deliver any and all such further  instruments and documents
and take such  further  action as the  Collateral  Agent may deem  necessary  or
desirable  in order to perfect and protect any Lien  granted or  purported to be
granted  hereby or to enable the  Collateral  Agent to exercise  and enforce its
right and remedies  hereunder with respect to the Collateral.  Without  limiting
the  generality of the  foregoing,  the Company will (i) secure all consents and
approvals necessary or appropriate for the assignment to the Collateral Agent of
any material  License or material  Contract  held by the Company or in which the
Company has any rights,  (ii) mark  conspicuously each item of Chattel Paper and
each related  Contract and each of its records  pertaining to the Chattel Paper,
with a legend,  in form and  substance  satisfactory  to the  Collateral  Agent,
indicating  that such  Chattel  Paper or  related  Contract  is  subject  to the
security  interest granted hereby,  (iii) if any Account shall be evidenced by a
promissory note or other Instrument (including,  without limitation,  any letter
of credit on which the Company is named as a beneficiary), deliver and pledge to
the Collateral Agent hereunder such  certificate,  note or other Instrument duly


                                       12
<PAGE>

indorsed and accompanied by duly executed instruments of transfer or assignment,
all in form and substance  reasonably  satisfactory to the Collateral Agent, and
(iv) execute and file such financing or continuation  statements,  or amendments
thereto,  and  such  other  instruments  or  notices,  as  may be  necessary  or
desirable,  in form and  substance  reasonably  satisfactory  to the  Collateral
Agent,  in order to  perfect  and  preserve  the  security  interest  granted or
purported to be granted  hereby.  The Company  hereby  authorizes the Collateral
Agent  to file  any  such  financing  or  continuation  statements  without  the
signature of the Company to the extent  permitted by applicable law. The Company
hereby agrees that a carbon, photographic,  photostatic or other reproduction of
this Security Agreement or of a financing statement is sufficient as a financing
statement to the extent  permitted by applicable law. If any Inventory is in the
possession  or control of any  warehouseman  or any of the  Company's  agents or
processors,  the Company shall, upon the Collateral Agent's reasonable  request,
notify such warehouseman,  agent or processor of the Collateral Agent's security
interest in such Inventory and, upon the Collateral  Agent's  request,  instruct
them to hold all such Inventory for the Collateral Agent's account and, from and
after the  occurrence  of, and during the  continuance  of, an Event of Default,
subject to the Collateral Agent's instructions.

              (b) (i)  The  Company  shall  keep  the  Inventory  at the  places
         specified in Schedule 1 hereof,  except for  Inventory  temporarily  in
         transit  between  such  locations.  So long as no Event of Default  has
         occurred  and  is  continuing  the  Company  may  designate  additional
         Inventory  locations  by  delivering  written  notice  thereof  to  the
         Collateral  Agent at least fifteen (15) days prior to establishing  any
         such  location  where the Value of the  Inventory at such location will
         equal or exceed  $1,500,000.  Written  notice of  additional  Inventory
         locations where the Value of the Inventory located thereon will be less
         than  $1,500,000  shall be provided  by the  Company to the  Collateral
         Agent no  later  than the date  that  the next  weekly  Borrowing  Base
         Certificate is delivered by the Company to the Lenders  pursuant to the
         Credit Agreement after the  establishment  of such Inventory  location;
         nothing contained in this clause (i) shall limit the obligations of the
         Company in clause (ii) and (iii) below.

              (ii) Prior to the  establishment  of any such location  within the
         United States, the Company shall (1) cause to be made all filings under
         the UCC  necessary or  appropriate  to preserve the  perfection  of the
         security  interests  described herein in the Inventory to be located at


                                       13
<PAGE>

         such   locations  and  deliver  to  the   Collateral   Agent   recorded
         counterparts to all such filings,  (2) to the extent that such location
         is leased by the  Company  from any other  Person  and the Value of the
         Inventory  of the Company  and the  Guarantors  at such  location is at
         least $2,500,000, obtain and deliver to the Collateral Agent a landlord
         agreement substantially in the form of Exhibit A hereto from each party
         directly or indirectly  leasing such location to the Company (including
         the title owner of such property),  and (3) to the extent such location
         is not owned or leased by the Company and the Value of the Inventory of
         the Company and the  Guarantors at such location is at least  $300,000,
         obtain  and   deliver  to  the   Collateral   Agent  a  bailee   letter
         substantially  in the form of Exhibit B hereto from the party  directly
         controlling possession of such Inventory at such location.

              (iii) Prior to the  establishment of any such location outside the
         United  States,  the Company shall obtain and deliver to the Collateral
         Agent a bailee  letter  substantially  in the form of  Exhibit B hereto
         from the party  directly  controlling  possession of such  Inventory at
         such location;  provided, however, that if at any time the Value of the
         Inventory at locations outside the United States is equal to or exceeds
         the lesser of (i) 20% of the  aggregate  Value of all  Inventory of the
         Company and (ii)  $15,000,000,  then the Company shall promptly deliver
         such  security  documents,  filing  instruments  and  opinions  as  the
         Collateral  Agent shall reasonably deem necessary or desirable in order
         to ascertain that the Collateral  Agent has a first priority  perfected
         lien on such Inventory at such locations.

              (iv)  Notwithstanding  the  foregoing,  no  more  than  10% of all
         Inventory  of the Company and the  Guarantors  may be located at leased
         locations  in the United  States for which no landlord  waiver has been
         obtained and delivered to the Collateral  Agent and at locations  which
         are neither owned nor leased by the Company or the Guarantors for which
         no bailee  letter has been  obtained and  delivered  to the  Collateral
         Agent;  provided,  however,  Inventory of the Company may be located at
         the Fayette,  Alabama plant while no landlord  waiver has been obtained
         for a period of fifteen  days after the date  hereof,  and the  Company
         agrees to  undertake  to obtain a landlord  waiver from its landlord at
         Fayette, Alabama during such fifteen-day period.



                                       14
<PAGE>

              (v) Upon the establishment of any new locations in accordance with
         the  foregoing  clauses (i) through  (iv),  Schedule 1 hereto  shall be
         deemed amended to add such location  thereto  without further action by
         the Collateral Agent or the Company,  and the Company hereby authorizes
         the  Collateral  Agent to substitute a new Schedule 1 hereto to reflect
         such additional location(s).

     (c) The  Company  will  keep its  principal  place of  business  and  chief
executive  office  and the  office  where it keeps its  records  concerning  the
Accounts,  and the office where it keeps all originals of all Chattel Paper,  at
the locations therefor specified in Schedule 2 unless (i) the Company shall have
given the  Collateral  Agent at least thirty (30) days' prior written  notice of
the  establishment of a new location which shall be within the United States and
the  Collateral  Agent  shall have  consented  in writing  thereto  and (ii) the
Company shall have made all filings under the UCC necessary or  appropriate  (as
determined by the Collateral Agent in its reasonable discretion) to preserve the
perfection of Collateral Agent's Lien in the Accounts and other Collateral.  The
Company  will hold and preserve  such records and Chattel  Paper and will permit
representatives  of the  Collateral  Agent  or  any  Lender,  or any  authorized
employee, agent or representative thereof, at any time during customary business
hours and as often as shall be reasonably requested,  to inspect and make copies
and abstracts from such records and Chattel  Paper.  The Company will maintain a
set of books and records  related to its  Accounts at all times at its  Andrews,
South Carolina location, which books and records shall be updated daily.

     (d) The  Company  will  keep and  maintain  at the  Company's  own cost and
expense  satisfactory  and  complete  records  of  the  Collateral  in a  manner
reasonably acceptable to the Collateral Agent, including,  without limitation, a
record of all  payments  received  and all credits  granted with respect to such
Collateral  and a record of the  Collateral  Agent's  security  interest  on the
Collateral.  Upon the  occurrence  and  during  the  continuance  of an Event of
Default, the Company shall, for the Collateral Agent's further security, deliver
and turn  over to the  Collateral  Agent or the  Collateral  Agent's  designated
representatives  at any  time  upon  request  by  the  Collateral  Agent  or the
Collateral Agent's designated representative,  copies any such books and records
(including, without limitation, any and all computer tapes, programs, and source
codes relating to the Collateral or any part or parts thereof).



                                       15
<PAGE>

     (e) In any suit,  proceeding or action brought by the Collateral Agent with
respect  to  any  Account,  Chattel  Paper,  Contract,   Instrument  or  General
Intangible  comprising part of the Collateral,  the Company will save, indemnify
and keep the  Collateral  Agent and each other Secured  Party  harmless from and
against all expense, loss or damages suffered by reason of any defense,  setoff,
counterclaim,  recoupment  or reduction of liability  whatsoever  of the obligor
thereunder,  arising out of a breach by the Company of any obligation or arising
out of any other agreement, indebtedness or liability at any time owing to or in
favor  of such  obligor  or its  successors  from  the  Company,  and  all  such
obligations  of the Company  shall be and shall remain  enforceable  against and
only  against the Company and shall not be  enforceable  against the  Collateral
Agent or any other  Secured  Party;  provided  that the  Company  shall  have no
obligation to indemnify the Collateral  Agent with respect to costs caused by or
resulting  from the willful  misconduct or gross  negligence  of the  Collateral
Agent.

     (f) The Company will not create, permit or suffer to exist, and will defend
the Collateral against and take such other action as is necessary to remove, any
Lien on the  Collateral,  and will defend the right,  title and  interest of the
Collateral  Agent in and to the Company's  rights to the Collateral,  including,
without  limitation,  the Proceeds and products thereof,  against the claims and
demands of all  Persons  whatsoever,  excluding  any Liens  permitted  under the
Credit Agreement and the Prudential Agreement.

     (g) The Company will not (i) grant any  extension of the time of payment of
any of the Collateral  except in the ordinary  course of business or compromise,
compound or settle the same for less than the full amount  thereof except in the
ordinary course of business,  (ii) release,  wholly or partly, any Person liable
for the payment thereof, except in the ordinary course of business in connection
with a settlement  permitted under clause (i) hereof,  or (iii) allow any credit
or  discount  whatsoever  thereon  other  than  trade  discounts  granted in the
ordinary course of business.

     (h) The Company will not sell, transfer,  lease or otherwise dispose of any
of the Collateral or contract to do so, except to the extent permitted under the
terms of each of the Credit Agreement and the Prudential Agreement.

     (i)  The  Company  will  advise  the  Collateral  Agent  promptly,  and  in
reasonable detail, of (i) any material Lien or claim made by or asserted against
any or all of the  Collateral  (other  than  Liens  permitted  under the  Credit


                                       16
<PAGE>

Agreement and the  Prudential  Agreement),  and (ii) the occurrence of any other
event which would have a material  adverse effect on the aggregate  value of the
Collateral or on the Liens with respect to such Collateral created hereunder.

     (j) The Company shall, at the Collateral Agent's request, in the event that
the Company has Accounts with respect to which the Account  Debtor is the United
States of America or any department, agency or instrumentality thereof (all such
Accounts hereinafter referred to as "Government  Receivables"),  promptly comply
with the Assignment of Claims Act of 1940, as amended (31 U.S.C.  3727 et seq.),
with respect to such Government  Receivables  and shall promptly  deliver to the
Collateral  Agent evidence of such  compliance,  which evidence shall be in form
and substance reasonably satisfactory to the Collateral Agent.

     (k) The Company will not change its name,  identity or corporate  structure
in any manner which might make any financing statement filed hereunder seriously
misleading,  unless it shall have (i) given the Collateral Agent at least thirty
(30) days' prior written  notice thereof (and received in writing any consent of
the Lenders that may be required under the terms of the Credit Agreement and the
Prudential  Agreement),  and (ii)  certified  to the  Collateral  Agent that all
filings reflecting such new name, identity or structure have been made which are
necessary or appropriate  to preserve the  perfection of the security  interests
described herein.

     (l) The Company  will not at any time place any  Inventory  on  consignment
with any Person  without the  Collateral  Agent's prior written  consent,  which
consent  will not be  unreasonably  withheld.  If at any time during the term of
this Security  Agreement,  any Inventory is placed by the Company on consignment
with any Person ("Consignee"),  with the prior written consent of the Collateral
Agent, the Company shall, prior to the delivery of any such consigned Inventory:
(i) provide  the  Collateral  Agent with all  consignment  agreements  and other
instruments and  documentation  to be used in connection with such  consignment,
all of which agreements,  instruments and  documentation  shall be acceptable in
form and  substance to the  Collateral  Agent,  (ii)  prepare,  execute and file
appropriate financing statements with respect to any consigned Inventory showing
the Consignee as debtor,  the Company as secured party and the Collateral  Agent
as assignee  of secured  party,  (iii)  prepare,  execute  and file  appropriate
financing statements with respect to any consigned Inventory showing the Company
as debtor and the Collateral  Agent as secured  party,  (iv) after all financing


                                       17
<PAGE>

statements  referred  to in clauses  (ii) and (iii) above shall have been filed,
conduct a search of all filings made against the Consignee in all  jurisdictions
in which the  Inventory to be consigned is to be located  while on  consignment,
and deliver to the Collateral  Agent copies of the results of all such searches,
and (v) notify,  in writing,  all creditors of the Consignee which are or may be
holders of security  interests in the Inventory to be consigned that the Company
expects to deliver  certain  Inventory to the Consignee,  all of which Inventory
shall be described in such notice by item or type.

     (m) The Company shall notify the Collateral  Agent  immediately if it knows
or has  reason  to know  that any  Patent or any  registration  relating  to any
Trademark which is material to the conduct of the Company's  business may become
abandoned,  cancelled or declared invalid,  or if any Trademark or the invention
disclosed  in any of the Patents is dedicated  to the public  domain,  or of any
material  adverse  determination  in any  proceeding in the PTO or in any United
States court regarding the Company's  ownership of any Patent or Trademark which
is material to the conduct of the Company's business,  its right to register the
same, or to keep and maintain the same. If the Company, either itself or through
any agent,  employee,  licensee  or  designee,  applies for a Patent or files an
application  for  the  registration  of any  Trademark  with  the  PTO or in any
analogous  office or agency in any other  country or any  political  subdivision
thereof,  or otherwise  obtains  rights in any Patent or Trademark,  the Company
will promptly inform the Collateral  Agent,  and, upon request of the Collateral
Agent,  execute and deliver any and all agreements,  instruments,  documents and
papers as the Collateral  Agent may request to evidence the  Collateral  Agent's
security  interest in such Patent or Trademark and the General  Intangibles used
in  connection  therewith,   including,  without  limitation,  in  the  case  of
Trademarks,  the  goodwill  of the  Company's  business  connected  with the use
thereof or  symbolized  thereby.  Consistent  with the  Company's  past business
practice,  the Company will (i) take all reasonably  necessary actions permitted
by applicable  law to prosecute  each Patent or Trademark  application  which is
material to the conduct of the company's business; (ii) to attempt to obtain the
broadest Patent or  registration of a Trademark  therefrom and (iii) to maintain
each Patent and Trademark  registration  which is material to the conduct of the
Company's  business,  including,  without  limitation,  with respect to Patents,
payments of required  maintenance fees, and, with respect to Trademarks,  filing
of   applications   for   renewal,   affidavits   of  use  and   affidavits   of
incontestability.  In the  event  that  the  Company  fails  to take any of such
actions, the Collateral Agent may do so in the Company's name or, if an Event of


                                       18
<PAGE>

Default has occurred and is continuing in the  Collateral  Agent's name, and all
expenses incurred by the Collateral Agent in connection  therewith shall be paid
by the  Company  in  accordance  with  Section  9  hereof.  Consistent  with the
Company's  past  business  practices,  the Company shall use its best efforts to
detect  infringers  of the  Patents  and  Trademarks  which are  material to its
business. In the event that any of the Patents or Trademarks is infringed or, in
the case of any  Trademark,  diluted by a third  party,  the  Company  shall (i)
notify the Collateral Agent promptly after it learns thereof and (ii) unless the
Company shall reasonably determine that such Patent or Trademark is not material
to the conduct of the Company's business, to promptly take appropriate action to
enjoin such infringement or, in the case of any Trademark,  dilution and to seek
any and all damages for such  infringement  or dilution or shall take such other
actions  (including  entering  into  licenses  or  covenants  not to sue) as the
Company  in  the  exercise  of  its  business  judgment  shall  reasonably  deem
appropriate under the circumstances to protect the Patents or Trademarks. In the
event that the Company fails to take any such actions the  Collateral  Agent may
do so in the  Company's  name or, if an Event of  Default  has  occurred  and is
continuing  the  Collateral  Agent's  name,  and all  expenses  incurred  by the
Collateral  Agent  in  connection  therewith  shall  be paid by the  Company  in
accordance with Section 9 hereof.

     6.  Insurance.  (a) The Company shall at its sole cost and expense  provide
and maintain in full force and effect  insurance  with respect to the Collateral
and all parts thereof,  as required  under,  and on the terms and conditions set
forth in, Section 6.12 of the Credit  Agreement,  which terms and conditions are
hereby  incorporated  herein by  reference as fully as if fully set forth herein
and,  in  addition  shall (i) provide for all losses in excess of $250,000 to be
paid directly to the Collateral Agent pursuant to a loss payable  endorsement in
form and substance  satisfactory to the Collateral  Agent, (ii) name the Secured
Parties  as  additional  insureds  thereunder  (without  any  representation  or
warranty by or any obligation by or any obligation upon the Collateral Agent) as
their  interest may appear,  (iii) obtain the  agreement by the insurer that any
proceeds thereunder shall be payable to the Collateral Agent notwithstanding any
action,  inaction or breach of representation  or warranty by the Company,  (iv)
provide that there shall be no recourse  against the Secured Parties for payment
of premiums or other amounts with respect thereto, and (v) provide that at least
30 days' prior written notice of  cancellation  or of lapse of such policy shall
be given to the Collateral  Agent by the insurer unless  otherwise  agreed to by
the  Collateral  Agent.  The Company  shall,  if so requested by the  Collateral


                                       19
<PAGE>

Agent,  deliver to the  Collateral  Agent  original or duplicate  copies of such
insurance and, as often as the Collateral Agent may reasonably request, a report
of a reputable insurance broker with respect to such insurance.

     (b) The  Company  hereby (i) directs all  insurers  under such  policies of
insurance  maintained  hereunder  and under the Credit  Agreement  for which the
Collateral  Agent is required to be named loss payee to pay all proceeds payable
thereunder  in excess of  $250,000  irectly  to the  Collateral  Agent,  for the
ratable benefit of the Secured Parties and (ii) irrevocably  makes,  constitutes
and  appoints  the  Collateral  Agent  (and all  officers,  employees  or agents
designated by the Collateral  Agent) as the Company's  true and lawful  attorney
(and  agent-in-fact)  for the purpose of making,  settling and adjusting  claims
under such  policies  of  insurance  if the  proceeds  of such  claims are to be
applied to the Secured Obligations pursuant to the last sentence of this Section
6(b), endorsing the name of the Company on any check, draft, instrument or other
item of payment for the proceeds of such  policies of insurance  which are to be
applied to the  Obligations  pursuant to the last sentence of this Section 6(b),
and for making all determinations and decisions with respect to such policies of
insurance which relate to proceeds to be applied to the  Obligations;  provided,
however,  that the  Collateral  Agent agrees not to exercise  such rights as the
Company's true and lawful attorney (and agent-in-fact) unless a Default or Event
of Default has occurred and is continuing. The Company shall promptly notify the
Collateral Agent in writing of any payment it receives of insurance  proceeds in
respect of damaged or destroyed Collateral.  Proceeds of such insurance received
by the Collateral  Agent in respect of damages or destruction to the Collateral,
after  deducting  therefrom  all expenses  incurred by the  Collateral  Agent in
collecting or administering such funds, shall be applied by the Collateral Agent
to the  payment  of  outstanding  Secured  Obligations  in  accordance  with the
Intercreditor Agreement.

     (c) If any insurance  required to be provided  hereunder  shall expire,  be
withdrawn,  become void by breach of any  condition  thereof by the Company,  or
become  void or  questionable  by reason of the  failure  or  impairment  of the
capital of any insurer, or if for any other reason whatsoever any such insurance
shall become  unsatisfactory  to the Collateral  Agent in its reasonable  credit
judgment, the Company immediately shall obtain new or additional insurance which
shall be satisfactory to the Collateral Agent in its reasonable credit judgment.
The Company  shall not take out any separate or  additional  insurance  which is
contributing  in the event of loss unless it is properly  endorsed and otherwise
satisfactory to the Collateral Agent in all respects.



                                       20
<PAGE>

     (d) In the event the Company at any time or times  hereafter  shall fail to
obtain or maintain any of the policies of insurance required above or to pay any
premium in whole or in part relating  thereto,  the  Collateral  Agent,  without
waiving or releasing any obligations or default by the Company hereunder, may at
any time or times thereafter (but shall not be obligated to) obtain and maintain
such  policies of insurance  and pay such premium and take any other action with
respect  thereto  which  the  Collateral  Agent  deems  advisable.  All  sums so
disbursed by the  Collateral  Agent,  including  attorneys'  fees,  court costs,
expenses and other charges relating thereto, shall be payable, on demand, by the
Company to the Collateral Agent in accordance with Section 9 hereof.

     7.  Collections,  Verifications.  (a) The Collateral Agent may at any time,
upon the occurrence and during the  continuation  of any Event of Default,  open
the Company's mail and collect any and all amounts due from Account  Debtors and
notify Account Debtors of the Company,  parties to the Contracts of the Company,
obligors of  Instruments of the Company and obligors in respect of Chattel Paper
of the  Company  that the  Accounts  and the right,  title and  interest  of the
Company in and under such  Contracts,  Instruments  and Chattel  Paper have been
assigned to the Collateral Agent and that payments shall be made directly to the
Collateral Agent or to a lockbox  designated by the Collateral  Agent.  Upon the
request  of the  Collateral  Agent,  the  Company  will so notify  such  Account
Debtors, parties to such Contracts, obligors of such Instruments and obligors in
respect of such Chattel Paper.  The Collateral Agent may at any time, in its own
name or in the name of the  Company,  communicate  with  such  Account  Debtors,
parties to such Contracts,  obligors of such Instruments and obligors in respect
of such  Chattel  Paper to verify with such  Persons to the  Collateral  Agent's
satisfaction  the existence,  amount and terms of any such Accounts,  Contracts,
Instruments or Chattel Paper.

     (b) The Collateral Agent shall have the right to make test verifications of
the  Accounts  and  physical  verifications  of the  Inventory in any manner and
through  any medium  that it  considers  advisable,  and the  Company  agrees to
furnish all such assistance and information as the Collateral  Agent may require
in connection therewith.



                                       21
<PAGE>

     8.  Collateral  Agent's  Appointment as  Attorney-in-Fact.  (a) The Company
hereby irrevocably constitutes and appoints the Collateral Agent and any officer
or agent  thereof  with  full  power  of  substitution  as its  true and  lawful
attorney-in-fact  with full  irrevocable  power and  authority  in the place and
stead of the Company and in the name of the  Company or  otherwise  from time to
time in the Collateral Agent's discretion, to take any action and to execute and
deliver any and all documents and  instruments  which the  Collateral  Agent may
deem  necessary  or  advisable  to  accomplish  the  purposes  of this  Security
Agreement and,  without  limiting the generality of the foregoing,  hereby gives
the  Collateral  Agent the power and right,  on behalf of the  Company,  without
notice to or assent by the Company to do the following:

                          (i) upon  failure or refusal of the Company to execute
         and/or  deliver  to  the  Collateral  Agent  any  financing  statement,
         continuation  statement,  instrument or document  which the  Collateral
         Agent may deem  necessary or  desirable to obtain the full  benefits of
         this Security Agreement and of the rights and powers granted hereunder,
         to sign the Company's name on any of the foregoing documentation and to
         deliver such  documentation to any Person as the Collateral Agent shall
         elect;

                         (ii) upon the  occurrence  of an Event of  Default  and
         subject to Section 8(b) below,  to ask,  demand,  collect,  receive and
         give acquittances and receipts for any and all moneys due and to become
         due under any  Collateral  and,  in the name of the  Company or its own
         name or  otherwise,  to take  possession of and endorse and collect any
         checks, drafts, notes, acceptances or other Instruments for the payment
         of moneys due under any Collateral and to file any claim or to take any
         other action or  proceeding  in any court of law or equity or otherwise
         deemed   appropriate  by  the  Collateral  Agent  for  the  purpose  of
         collecting  any and all such moneys due under any  Collateral  whenever
         payable and to file any claim or to take any other action or proceeding
         in any court of law or equity or otherwise  deemed  appropriate  by the
         Collateral  Agent for the purpose of collecting any and all such moneys
         due under any Collateral whenever payable;

                        (iii) upon  failure  of the  Company to do so, to pay or
         discharge  taxes (except for those being contested in good faith by the
         Company for which  adequate  reserves have been  established)  or Liens
         levied or placed on or threatened against the Collateral, to obtain any
         insurance  called  for  by  the  terms  of the  Credit  Agreement,  the


                                       22
<PAGE>

         Prudential  Agreement or this Security  Agreement and to pay all or any
         part of the premiums therefor and the costs thereof;

                         (iv)     upon an Event of Default and the failure of 
         the Company to do so, to effect any repairs called for by the terms of
         this Security Agreement and to pay all or any of the costs
         thereof; and

                          (v) upon the  occurrence  of an Event of  Default  and
         subject to Section  8(b) below,  (A) to direct any party liable for any
         payment  under any of the  Collateral  to make  payment  of any and all
         moneys due, and to become due  thereunder,  directly to the  Collateral
         Agent or as the Collateral  Agent shall direct,  (B) to receive payment
         of and receipt for any and all moneys,  claims and other  amounts  due,
         and to become due at any time,  in  respect  of or  arising  out of any
         Collateral,  (C) to sign and endorse any  invoices,  freight or express
         bills, bills of lading,  storage or warehouse receipts,  drafts against
         debtors,  assignments,  verifications  and notices in  connection  with
         accounts  and  other   Documents   constituting   or  relating  to  the
         Collateral,  (D) to  commence  and  prosecute  any  suits,  actions  or
         proceedings at law or in equity in any court of competent  jurisdiction
         to collect the  Collateral or any part thereof and to enforce any other
         right in respect of any Collateral,  (E) to defend any suit,  action or
         proceeding  brought against the Company with respect to any Collateral,
         (F) to  settle,  compromise  or adjust any suit,  action or  proceeding
         described above and, in connection  therewith,  to give such discharges
         or releases as the Collateral  Agent may reasonably  deem  appropriate,
         (G) to license or, to the extent  permitted by an  applicable  license,
         sublicense,  whether general,  special or otherwise,  and whether on an
         exclusive or non-exclusive  basis, any Patent or Trademark,  throughout
         the  world  for such term or  terms,  on such  conditions,  and in such
         manner, as the Collateral Agent shall in its sole discretion determine,
         and (H) generally to sell,  transfer,  pledge,  make any agreement with
         respect to or otherwise  deal with any of the  Collateral  as fully and
         completely  as though  the  Collateral  Agent were the  absolute  owner
         thereof for all purposes,  and to do, at the Collateral  Agent's option
         and the Company's expense,  at any time, or from time to time, all acts
         and things  which the  Collateral  Agent  deems  necessary  to protect,
         preserve or realize upon the  Collateral and the Lien of the Collateral
         Agent and the other  Secured  Parties  therein,  in order to effect the
         intent of this Security Agreement,  all as fully and effectively as the
         Company might do.



                                       23
<PAGE>

     (b) The Company hereby  ratifies,  to the extent permitted by law, all that
said attorneys shall lawfully do or cause to be done by virtue hereof. The power
of  attorney  granted  pursuant  to this  Section 8 is a power  coupled  with an
interest and shall be irrevocable until the Secured Obligations are indefeasibly
paid in full.

     (c) The powers  conferred on the Collateral  Agent  hereunder are solely to
protect the interests of the Collateral  Agent and the other Secured  Parties in
the  Collateral  and shall not impose any duty upon any of them to exercise  any
such powers.  The Collateral Agent shall be accountable only for amounts that it
actually  receives as a result of the exercise of such powers and neither it nor
any of its officers, directors,  employees or agents shall be responsible to the
Company for any act or failure to act,  except for its own gross  negligence  or
willful misconduct.

     (d) The Company also authorizes the Collateral  Agent (i) to communicate in
its own name with any party to any Contract with regard to the assignment of the
right,  title and interest of the Company in and under the  Contracts  hereunder
and other matters relating  thereto and (ii) to execute,  in connection with any
sale provided for in Section 10 hereof,  any endorsements,  assignments or other
instruments of conveyance or transfer with respect to the Collateral.

     9. Performance by the Collateral Agent of the Company's Obligations. If the
Company fails to perform or comply promptly with any of its agreements contained
herein and the Collateral  Agent,  as provided for by the terms of this Security
Agreement,  itself  performs or complies,  or otherwise  causes  performance  or
compliance,  with such agreement,  the expenses of the Collateral Agent incurred
in  connection  with such  performance  or  compliance,  together  with interest
thereon at the highest rate then applicable under the Credit Agreement, shall be
payable by the Company to the  Collateral  Agent on demand and shall  constitute
Secured Obligations secured hereby.

     10.  Remedies Upon  Default.  (a) If an Event of Default shall occur and be
continuing,  the Collateral Agent may exercise,  in addition to all other rights
and remedies  granted to it in this  Security  Agreement and in any other Credit
Document,  all rights and  remedies of a secured  party  under the UCC.  Without
limiting the generality of the foregoing,  the Company  expressly agrees that in


                                       24
<PAGE>

any such event the  Collateral  Agent,  without  demand of  performance or other
demand,  advertisement  or notice of any kind (except the notice specified below
of time and place of public or private sale) to or upon the Company or any other
Person (all and each of which demands,  advertisements and/or notices are hereby
expressly  waived to the extent  permitted by the UCC and other applicable law),
may  forthwith  enter upon the premises of the Company  where any  Collateral is
located through self-help,  without judicial process,  without first obtaining a
final judgment or giving the Company notice and opportunity for a hearing on the
Collateral  Agent's claim or the Collateral  Agent's action,  and without paying
rent, and collect, receive, assemble, process,  appropriate and realize upon the
Collateral,  or any part thereof, and/or may forthwith sell, lease, assign, give
an option or options to purchase,  or sell or  otherwise  dispose of and deliver
said  Collateral  (or  contract to do so), or any part  thereof,  in one or more
parcels at public or private sale or sales, at any exchange or broker's board or
at any of the Collateral  Agent's  offices or elsewhere at such prices as it may
deem best, for cash or on credit or for future  delivery  without  assumption of
any credit risk.  The  Collateral  Agent or any Lender shall have the right upon
any such public sale or sales,  and, to the extent  permitted by applicable law,
upon any such private  sale or sales,  to purchase the whole or any part of said
Collateral so sold,  free of any right or equity of redemption,  which equity of
redemption  the  Company  hereby  releases.  Such  sales  may be  adjourned  and
continued from time to time with or without notice.  The Collateral  Agent shall
have the right to conduct such sales on the Company's  premises or elsewhere and
shall have the right to use the Company's premises without charge for such sales
for such time or times as Collateral  Agent deems  necessary or  advisable.  The
Company  further  agrees,  at the Collateral  Agent's  request,  to assemble the
Collateral  and make it  available to the  Collateral  Agent at places which the
Collateral Agent shall select,  whether at the Company's  premises or elsewhere.
Until the Collateral Agent is able to effect a sale, lease, or other disposition
of  Collateral,  the  Collateral  Agent  shall  have the right to use or operate
Collateral, or any part thereof, to the extent that it deems appropriate for the
purpose of preserving  Collateral  or its value or for any other purpose  deemed
appropriate  by the  Collateral  Agent.  The  Collateral  Agent  shall  have  no
obligation  to the Company to maintain or preserve  the rights of the Company as
against  third  parties with respect to  Collateral  while  Collateral is in the
possession of the Collateral  Agent.  The Collateral Agent may, if it so elects,
seek the  appointment  of a receiver or keeper to take  possession of Collateral
and to enforce  any of the  Collateral  Agent's  remedies  with  respect to such
appointment  without prior notice or hearing.  The Collateral  Agent shall apply


                                       25
<PAGE>

the net  proceeds  of any such  collection,  recovery,  receipt,  appropriation,
realization or sale, as provided in Section 10(d) hereof,  the Company remaining
liable for any  deficiency  remaining  unpaid  after such  application,  and the
Collateral  Agent shall be required to account for the  surplus,  if any, to the
Company only after so paying over such net proceeds and after the payment by the
Collateral Agent of any other amount required by any provision of law, including
Section  9-504(1)(c) of the UCC. To the extent  permitted by applicable law, the
Company waives all claims,  damages and demands against the Collateral Agent and
Lenders  arising out of the  repossession,  retention or sale of the  Collateral
except such as arise out of the gross  negligence  or wilful  misconduct  of the
Collateral  Agent or any Lender.  The Company agrees that the  Collateral  Agent
need not give more  than ten (10)  days'  notice  (which  notification  shall be
deemed given when given in the manner provided in Section 14 hereof) of the time
and place of any public sale or of the time after which a private  sale may take
place and that such  notice is  reasonable  notification  of such  matters.  The
Company  shall remain  liable for any  deficiency if the proceeds of any sale or
disposition of the Collateral are  insufficient to pay all Secured  Obligations,
the  Company  also being  liable for the  reasonable  fees and  expenses  of any
attorneys employed by the Collateral Agent to collect such deficiency.

     (b) The  Company  also  agrees  to pay all costs of the  Collateral  Agent,
including,  without  limitation,  the expenses and reasonable  attorneys'  fees,
incurred in connection  with the  enforcement  of any of its rights and remedies
hereunder.

     (c) The Company hereby waives  presentment,  demand,  protest or any notice
(to the maximum  extent  permitted by applicable  law) of any kind in connection
with this Security Agreement or any Collateral.

     (d) The Proceeds of any sale,  disposition or other realization upon all or
any part of the  Collateral  shall be  distributed  by the  Collateral  Agent in
accordance with the priorities set forth in the Intercreditor Agreement.

     11.  Grant of  License  to Use Patent  and  Trademark  Collateral.  For the
purpose of enabling the Collateral  Agent to exercise  rights and remedies under
Section 10 hereof at such time as the Collateral  Agent,  without regard to this
Section 11, shall be lawfully entitled to exercise such rights and remedies, the
Company  hereby grants to the  Collateral  Agent an  irrevocable,  non-exclusive
license  (exercisable upon the occurrence of an Event of Default without payment
of royalty or other  compensation to the Company) to use,  license or sublicense


                                       26
<PAGE>

any Patent or Trademark.  Any such license shall  include,  without  limitation,
access to all media in which any of the licensed items may be recorded or stored
and to all computer and automatic machinery,  software and programs used for the
compilation or printout thereof.

     12.  Limitation on the Collateral  Agent's Duties.  The powers conferred on
the  Collateral  Agent  hereunder  are solely to  protect  its  interest  in the
Collateral  and shall not impose any duty upon it to exercise  any such  powers.
Except  for  exercising  reasonable  care in the  custody  and  preservation  of
Collateral  in its  possession  or  possession of its agents or nominees and the
accounting for moneys actually  received by it hereunder,  the Collateral  Agent
shall  have no duty as to any  Collateral  or any  income  thereon  or as to the
taking of any  necessary  steps to  preserve  rights  against any parties or any
other rights pertaining to the Collateral.  The Collateral Agent shall be deemed
to  have  exercised  reasonable  care in the  custody  and  preservation  of the
Collateral  in  its  possession  if  such   Collateral  is  accorded   treatment
substantially equal to that which the Collateral Agent accords its own property.

     13. Term of Agreement;  Reinstatement. This Agreement and the Liens granted
hereunder  shall  remain  in full  force and  effect  until the later of (x) the
payment and performance in full of all Secured Obligations and all other amounts
payable  hereunder and (y) the  expiration  or  termination  of all  Facilities.
Further,  this  Agreement and the Liens granted  hereunder  shall remain in full
force and effect and continue to be effective should any petition be filed by or
against the Company for liquidation or reorganization, should the Company become
insolvent  or make an  assignment  for the  benefit  of  creditors  or  should a
receiver  or  trustee  be  appointed  for  all or any  significant  part  of the
Company's  assets,  and shall continue to be effective or be reinstated,  as the
case may be, if at any time payment and  performance of the Secured  Obligations
and the cash collateral for any such contingent obligations and liabilities,  or
any part  thereof,  is,  pursuant to  applicable  law,  rescinded  or reduced in
amount,  or must otherwise be restored or returned by any obligee of the Secured
Obligations,  whether as a "voidable preference",  "fraudulent  conveyance",  or
otherwise,  all as though such payment or performance  had not been made. In the
event that any payment or performance or any such cash  collateral,  or any part
thereof, is rescinded,  reduced,  restored or returned,  the Secured Obligations
shall be  reinstated  and deemed  reduced  only by such  amount  paid and not so
rescinded, reduced, restored or returned.



                                       27
<PAGE>

     14. Notices.  All notices,  requests and other  communications to any party
hereunder shall be in writing (including  telecopier) and shall be effective (a)
if given by mail,  when  deposited  in the mails or (b) if given by  telecopier,
when so telecopied. Notices hereunder shall be mailed or telecopied as follows:

         If to the Company:

              Oneita Industries, Inc.
              4130 Faber Place Drive, Ste. 200
              Charleston, South Carolina 29405
              Attention: James L. Ford
              Telephone No: 803-529-5102
              Telecopy No: 803-529-5120


         with a copy to:

              Johnson & Montgomery
              3060 Peachtree Road, N.W., Ste. 400
              Atlanta, Georgia 30305
              Attention: Thomas Sherman
              Telephone No:       404-240-7631
              Telecopy No:        404-262-1222

If to the Collateral Agent:

              SunTrust Bank, Atlanta
              55 Park Place,
              Eighth Floor
              Atlanta, GA 30303
              Attention: Mr. David Westerfield and
                         Mr. Tom Matthesen
              Telephone No: (404) 588-7920
              Telecopy No: (404) 332-3940

         with a copy to:

              King & Spalding
              191 Peachtree Street
              Atlanta, GA 30303
              Attention: G. Lemuel Hewes
              Telephone No: (404) 572-4600
              Telecopy No: (404) 572-5100



                                       28
<PAGE>

     15.  Severability.  Every  provision  of this  Agreement  is intended to be
severable.  If any term or  provision of this  Agreement  or any other  document
delivered in connection  herewith  shall be  unenforceable  in any respect,  the
enforceability of the remaining  provisions shall not thereby be affected.  Time
is of the essence of this Agreement.

     16. No Waiver;  Cumulative  Remedies.  Neither the Collateral Agent nor any
other Secured Party shall by any act, delay,  omission or otherwise be deemed to
have  waived any of its rights or  remedies  hereunder,  and no waiver  shall be
valid unless in writing,  signed by the Collateral  Agent,  and then only to the
extent  therein  set  forth.  A waiver by the  Collateral  Agent of any right or
remedy  hereunder  on any one  occasion  shall not be  construed as a bar to any
right or remedy  which the  Collateral  Agent  would  otherwise  have had on any
future occasion.  No failure to exercise nor any delay in exercising on the part
of the  Collateral  Agent  or any  other  Secured  Party,  any  right,  power or
privilege hereunder,  shall operate as a waiver thereof, nor shall any single or
partial exercise of any right,  power or privilege  hereunder preclude any other
or  future  exercise  thereof  or the  exercise  of any  other  right,  power or
privilege.  The rights and remedies hereunder provided are cumulative and may be
exercised  singly or  concurrently,  and are not  exclusive  of any  rights  and
remedies  provided  by law.  None of the terms or  provisions  of this  Security
Agreement  may be  altered,  modified  or  amended  except by an  instrument  in
writing,  duly  executed  by the  Company and  Collateral  Agent,  and then such
alteration,  modification  or amendment shall only be effective for the specific
instance  and for the specific  purpose for which  given.  None of the terms and
provisions of this  Security  Agreement may be waived except by an instrument in
writing,  duly executed by the Collateral  Agent and then such waiver shall only
be effective  for the specific  instance and for the specific  purpose for which
given.

     17. Successors and Assigns.  This Security Agreement and all obligations of
the Company  hereunder  shall be binding upon the  successors and assigns of the
Company,  and shall,  together  with the rights and  remedies of the  Collateral
Agent  hereunder,  inure to the  benefit of the  Collateral  Agent and the other
Secured Parties and any of their respective  successors and assigns. No sales of
participations, other sales, assignments, transfers or other dispositions of any
agreement  governing or instrument  evidencing  the Secured  Obligations  or any
portion  thereof or interest  therein  shall in any manner  affect the  security
interest granted to the Collateral Agent or the other Secured Parties hereunder.


                                       29
<PAGE>

Without  limiting  the  generality  of the  foregoing,  any Lender may assign or
otherwise  transfer all or any portion of its rights and  obligations  under any
Credit  Document  in  accordance  with the  terms  thereof  (including,  without
limitation,  any portion of the Facilities  owing to it), to any other person or
entity,  and such other person or entity shall thereupon  become vested with all
the benefits in respect thereof granted to such Lender herein or otherwise.

     18.  GOVERNING LAW; WAIVER OF JURY TRIAL.  (a) THIS AGREEMENT AND ALL OTHER
DOCUMENTS  CONTEMPLATED  HEREBY,  AND THE RIGHTS AND  OBLIGATIONS OF THE PARTIES
HEREUNDER  AND UNDER THE OTHER  DOCUMENTS  SHALL BE  CONSTRUED  AND  ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF GEORGIA  (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF).

     (b) ANY LEGAL ACTION OR  PROCEEDING  WITH RESPECT TO THIS  AGREEMENT OR ANY
OTHER  DOCUMENT  MAY BE  BROUGHT IN THE COURTS OF THE STATE OF GEORGIA OR OF THE
UNITED STATES OF AMERICA FOR THE NORTHERN DISTRICT OF GEORGIA, AND, BY EXECUTION
AND DELIVERY OF THIS  AGREEMENT,  THE COMPANY  HEREBY  ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,  THE JURISDICTION OF THE
AFORESAID  COURTS.  TO THE FULLEST  EXTENT  ALLOWED BY LAW,  THE PARTIES  HERETO
HEREBY  IRREVOCABLY  WAIVE  TRIAL BY JURY,  AND THE COMPANY  HEREBY  IRREVOCABLY
WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING
OF VENUE OR BASED ON THE  GROUNDS OF FORUM NON  CONVENIENS,  WHICH IT MAY NOW OR
HEREAFTER  HAVE  TO THE  BRINGING  OF ANY  SUCH  ACTION  OR  PROCEEDING  IN SUCH
RESPECTIVE JURISDICTIONS.

     (c) THE COMPANY HEREBY IRREVOCABLY DESIGNATES THE CT CORPORATION,  ATLANTA,
GEORGIA,  AS ITS  DESIGNEE,  APPOINTEE  AND LOCAL AGENT TO  RECEIVE,  FOR AND ON
BEHALF OF THE COMPANY,  SERVICE OF PROCESS IN SUCH RESPECTIVE  JURISDICTIONS  IN
ANY LEGAL ACTION OR  PROCEEDING  WITH RESPECT TO THIS  AGREEMENT OR THE NOTES OR
ANY  DOCUMENT  RELATED  THERETO.  IT IS  UNDERSTOOD  THAT A COPY OF SUCH PROCESS
SERVED ON SUCH LOCAL AGENT WILL BE PROMPTLY FORWARDED BY SUCH LOCAL AGENT AND BY
THE SERVER OF SUCH  PROCESS  BY MAIL TO THE  COMPANY  AT ITS  ADDRESS  SET FORTH
OPPOSITE  ITS  SIGNATURE  BELOW,  BUT THE FAILURE OF THE COMPANY TO RECEIVE SUCH
COPY  SHALL NOT  AFFECT IN ANY WAY THE  SERVICE  OF SUCH  PROCESS.  THE  COMPANY
FURTHER  IRREVOCABLY   CONSENTS  TO  THE  SERVICE  OF  PROCESS  OF  ANY  OF  THE
AFOREMENTIONED  COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,  TO THE COMPANY AT ITS
SAID ADDRESS, SUCH SERVICE TO BECOME EFFECTIVE 3 DAYS AFTER SUCH MAILING.



                                       30
<PAGE>

     (d) Nothing herein shall affect the right of the  Collateral  Agent and the
other Secured  Parties to serve process in any other manner  permitted by law or
to commence legal  proceedings or otherwise  proceed  against the Company in any
other jurisdiction.

     19. Indemnity.  The Company shall protect,  indemnify and save harmless the
Collateral  Agent and the other  Secured  Parties,  their  officers,  directors,
employees,  representatives and agents (each, an "Indemnified  Party") from, and
hold each of them  harmless  against,  any and all costs,  losses,  liabilities,
claims, damages or expenses actually incurred by any of them (whether or not any
of them is  designated  a party  thereto)  arising  out of or by  reason  of any
investigation,  litigation or other proceeding  related to this Agreement or any
transaction contemplated hereby, including,  without limitation,  the reasonable
fees  and  disbursements  of  counsel  incurred  in  connection  with  any  such
investigation,  litigation or other proceeding. Notwithstanding anything in this
Agreement  to  the  contrary,  the  Company  shall  not  be  responsible  to any
Indemnified Party for any losses, damages,  liabilities or expenses which result
from such  Indemnified  Party's  gross  negligence  or willful  misconduct.  The
Company's  obligations  under this Section shall survive any termination of this
Agreement.

              20.  Payment of Expenses, Etc.  The Company shall:

     (a) whether or not the  transactions  hereby  contemplated are consummated,
pay all reasonable, out-of-pocket costs and expenses of the Collateral Agent and
the other  Secured  Parties  in the  administration  (both  before and after the
execution hereof and including reasonable expenses actually incurred relating to
advice of counsel as to the  rights and duties of the  Collateral  Agent and the
other  Secured  Parties with respect  thereto)  of, and in  connection  with the
preparation,   execution  and  delivery  of,   preservation   of  rights  under,
enforcement  of,  and,  after  a  Default  or  Event  of  Default,  refinancing,
renegotiation or restructuring of, this Agreement and the other Credit Documents
and the documents and instruments referred to therein, and any amendment, waiver
or consent relating thereto (including,  without limitation, the reasonable fees
actually incurred and disbursements of counsel for the Collateral Agent), and in
the case of enforcement of this Agreement or any Credit  Document after an Event
of Default,  all such reasonable,  out-of-pocket costs and expenses  (including,
without  limitation,  the reasonable fees actually incurred and disbursements of
counsel), of the Collateral Agent or any of the other Secured Parties; and



                                       31
<PAGE>

     (b) pay and  hold  the  Collateral  Agent  and the  other  Secured  Parties
harmless from and against any and all present and future stamp, documentary, and
other  similar  Taxes with  respect to this  Agreement,  the Notes and any other
Credit  Documents,  any  collateral  described  therein,  or  any  payments  due
thereunder,  and  save  each  Lender  harmless  from  and  against  any  and all
liabilities  with respect to or resulting from any delay or omission to pay such
Taxes.

     21.  Security  Interest  Absolute.  All rights of the Collateral  Agent and
security  interests  hereunder,  and all  obligations of the Company  hereunder,
shall be absolute and unconditional irrespective of:

     (a) any lack of validity or  enforceability  of the Credit  Documents,  the
other Security Documents or any other agreement or instrument relating thereto;

     (b) any change in the time,  manner or place of payment of, or in any other
term of, all or any of the  obligations,  or any other amendment or waiver of or
any  consent to any  departure  from the Credit  Documents,  including,  without
limitation, any increase in the Secured Obligations resulting from the extension
of additional credit to the Company or any of its Subsidiaries or otherwise;

     (c)  any  taking,   exchange,   release  or  non-perfection  of  any  other
collateral,  or any  taking,  release  or  amendment  or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;

     (d) any manner of application of collateral, or proceeds thereof, to all or
any of the Secured  Obligations,  or any manner of sale or other  disposition of
any  collateral  for all or any part of the  Secured  Obligations  or any  other
assets of the Company or any of its Subsidiaries;

     (e) any change,  restructuring or termination of the corporate structure or
existence of the Company or any of its Subsidiaries; or

     (f) any other  circumstance  which  might  otherwise  constitute  a defense
available to, or a discharge of, the Company or a third party pledgor.



                                       32
<PAGE>

     22.  Entire  Agreement.  This  Agreement  and the  other  Credit  Documents
executed and delivered  contemporaneously  herewith,  together with the exhibits
and schedules attached hereto and thereto,  constitute the entire  understanding
of the parties with respect to the subject matter hereof, and any other prior or
contemporaneous  agreements,  whether written or oral, with respect thereto. The
execution of this  Agreement  and the other Credit  Documents by the Company was
not based upon any facts or materials provided by the Collateral Agent or any of
the Secured  Parties,  nor was the Company  induced to execute this Agreement or
any other Credit Document by any  representation,  statement or analysis made by
the Collateral Agent or any other Secured Party.

     23.  Counterparts.  This  Agreement  may  be  executed  in  any  number  of
counterparts,  each of which shall be deemed to be an original and all of which,
taken together, shall constitute one and the same instrument.

<PAGE>

     IN WITNESS  WHEREOF,  the Company has caused this Security  Agreement to be
executed  and  delivered by its duly  authorized  officers on the date first set
forth above.


                                       ONEITA INDUSTRIES, INC.,
                                       a Delaware corporation


Address: 4130 Faber Place Drive        By: /s/  James L. Ford
             Suite 200                 Name: James L. Ford
             Charleston, SC 29405      Title: Executive Vice President
                                              and Chief Financial Officer
             Attn: James Ford
Telecopier No.: 803-529-5120


                                       Attest: /s/ Edward I. Kramer
                                       Name:    Edward I. Kramer
                                       Title:   Secretary

<PAGE>

                                   SCHEDULE 1
                                       TO
                               SECURITY AGREEMENT

                        Locations of Inventory and Status

Location                                          Owned, Leased, Bailment
--------                                          ----------------------- 

Conifer Street                                              Owned
Andrews, South Carolina 29510
Georgetown County

Airport Industrial Park                                     Owned
Andrews, South Carolina 29510
Georgetown County

Outlet Store                                                Leased
2 West Main Street
Andrews, South Carolina  29510
Georgetown County

1335 Old Norcross Road                                      Leased
Lawrenceville, Georgia  30245
Gwinnett County

Old Hanceville Road                                         Owned
Cullman, Alabama  35055
Cullman County

1015 Temple Avenue S.                                       Leased
Fayette, Alabama  35555
Fayette County

207 15th Street SW                                          Leased
Fayette, Alabama  35555
Fayette County

Oneita-Kinston Corp.                                        Bailment
Hwy 11 & Cunningham Rd.
Kinston, North Carolina  28502
Lenoir County



                                       33
<PAGE>

Oneita Mexicana SA de CV                                    Bailment
Amapolas #3804 Alta Vista
Ciudad Juarez
Chihuahua, Mexico

Oneita-Strathleven Limited                                  Bailment
Guinep Way
Montego Bay, Jamaica

Oneita Freeport Limited                                     Bailment   
Montego Bay, Freezone
Montego Bay, Jamaica

 Acro Tex, Inc.                                             Bailment
1025 Central Avenue
Trion, Georgia  30753

Big Sur S.A. de C.V.
Perifarico PTE Casaliesq Blvd.
Culosio, Int. Parque Octillo                                Bailment
Hermosillo, Sonora, Mexico
Attn:  Sergio Gluschankoff

Classic Manufacturing                                       Bailment
P.O. Box 349
Montego Bay, Jamaica

Contract Apparel                                            Bailment
11216 Armour Drive
El Paso, Texas  79935

Daugherty Manufacturing                                     Bailment
842 Barbrow Lane
Knoxville, Tennessee  27932

Daun Ray                                                    Bailment
c/o All Seasons Sportswear
120 West Main
Waverly, TN  37185

Down East Fabrics                                           Bailment
1018-A W. Vernon Avenue
Kinston, NC  28502

                                       34
<PAGE>

JRF Enterprises                                             Bailment
2094D Alabama Hwy 79
Scottsboro, Alabama 35768

Major League                                                Bailment
c/o Four D's
122 Payne Loop
Telico Plains, TN  37385

Maquilas Kino S.A. de C.V.                                  Bailment
Paqua De Negocios Octillo
Hermosillo, Sonora, Mexico

Multitex S.A. de C.V.                                       Bailment
8th Avenue 11-49
Zona 1
Guatemala City, Guatemala

Peace Textiles, Inc.                                        Bailment
1605 S. Guignard Pkwy
Sumter, SC  29151

 Pottesville Bleach & Dye Company                           Bailment
250 Route 61 South
Schuylkill Haven, PA  17972

Quality Mills                                               Bailment
P.O. Box 1580
Pilot Mountain, NC  27041

Standard Warehouse Distribution Center                      Bailment
1355 Old Norcross Road
Lawrenceville, Georgia  30753
Gwinnett County

Texfi, Inc.                                                 Bailment
P.O. Box 819
Haw River, NC  27258

Tifton Textiles, Inc.                                       Bailment
Route 2, Box 433-H
Tifton, Ga  31794

                                       35
<PAGE>

Whitwell Sportwear                                          Bailment
1 Industrial Park
Whitwell, Tennessee 37397


<PAGE>


                                   SCHEDULE 2
                                       TO
                               SECURITY AGREEMENT

                         Locations of Books and Records

4130 Faber Place Drive
Suite 200
Ashley Corporate Center
Charleston, South Carolina  29405
Charleston County

Conifer Street
Andrews, South Carolina 29510
Georgetown County


<PAGE>

                                   SCHEDULE 3
                                       TO
                               SECURITY AGREEMENT

                      Previous Company Names and Tradenames

Acquisition  of  certain  assets  of Montego Bay Traders Corporation,  a Cayman
Island corporation, by Oneita Industries, Inc. on June 30, 1995

Mars  Bluff  Industries,  Inc.,  a  South  Carolina  corporation,  manufacturing
facility closed and sold.  Corporation  liquidated into Oneita,  its parent,  in
1994

<PAGE>

                                   SCHEDULE 4
                                       TO
                               SECURITY AGREEMENT

                            UCC Financing Statements


(1)      Alabama

         Secretary of State, Alabama

(2)      Georgia

         Gwinnett County, Georgia

(3)      North Carolina

         Secretary of State, North Carolina
         Lenoir County, North Carolina

(4)      South Carolina

         Secretary of State, South Carolina

(5)      Pennsylvania

         Secretary of State, Pennsylvania

(6)      Tennessee

         Secretary of State, Tennessee

(7)      Texas

         Secretary of State, Texas

<PAGE>

                                   SCHEDULE 6
                                       TO
                               SECURITY AGREEMENT


                             Supplemental Documents



         1.   Supplement to Security Agreement (Guarantor) (as defined in the
              Credit Agreement)

         2.   Supplement to Guaranty Agreements

         3.   Lien Search Results in such locations as the Secured Parties shall
              require

         4.   UCC Financing Statements in such locations as the Secured Parties
              shall require

         5.   Opinions of Counsel as the Secured Parties shall require

         6.   Corporate Authority Documents (article of incorporation, bylaws,
              resolutions of the Board of Directors, incumbency)

         7.   Such other documents, instruments and certificates as the Secured
              Parties shall reasonably require consistent with the Credit
              Agreement

<PAGE>

                                    EXHIBIT A

                          [FORM OF LANDLORD AGREEMENT]


     THIS  LANDLORD'S  AGREEMENT  ("Agreement")  is  made  and  entered  by  the
undersigned  landlord (the  "Landlord")  in favor of SUNTRUST BANK,  ATLANTA,  a
Georgia banking corporation ("SunTrust") in its capacity as collateral agent (in
such  capacity the "Agent") for itself and certain  other  "Lenders" (as defined
below).

                              W I T N E S S E T H:

RECITALS:

     (a) Landlord is the landlord and Oneita  Kinston Corp.  ("Company")  is the
tenant under a lease, sublease or similar agreement, a copy of which is attached
hereto as Exhibit "A" (the  "Lease").  The business  premises  (the  "Premises")
described in the Lease are used by Company for the the  manufacture of goods and
storage of inventory.

     (b) Company has entered  into,  and  contemplates  that it will enter into,
certain financing arrangements (the "Financing  Arrangements") with SunTrust and
certain other lenders (collectively the "Lenders") for whom SunTrust will act as
Agent.  Pursuant to the Financing  Arrangements,  the Lenders have made and will
make certain  loans and other  financial  accommodations  to Oneita  Industries,
Inc., which owns 100% of the Company,  which loans and other accommodations have
been guaranteed by the Company.

     (c) Company  will secure its  obligations  to Lenders  under the  Financing
Arrangements  by granting to the Agent,  for the benefit of Lenders,  a security
interest in, among other property, all of its inventory (the "Collateral"), some
of which are or hereafter may be located on the Premises.

     (d) In connection  therewith and pursuant to Lenders' request,  Company has
requested that Landlord  execute this  Agreement in favor of the Agent,  for the
benefit of Lenders.

     (e) Landlord has agreed,  at Company's  request and as an  accommodation to
Company, to execute this Agreement.



                                       36
<PAGE>

     NOW,  THEREFORE,  in  consideration of the foregoing and for other good and
valuable consideration,  Landlord certifies to and agrees as follows in favor of
the Agent, for the benefit of Lenders:

     (i) Valid Lease.  The Lease is a valid and  subsisting  lease for the terms
set forth  therein,  and no  modifications  or amendments to the Lease have been
entered into by the parties subsequent to their execution thereof.

     (ii) No  Default.  No  event  has  occurred  as of the  date  hereof  which
constitutes a default under the Lease, or would constitute such a default either
with passage of time or the giving of any required notice.

     (iii) Lien  Subordination.  Landlord  acknowledges and agrees that: (a) the
lien and  security  interest  of the Agent (for the  benefit of  Lenders) in the
Collateral shall be superior to any lien, right,  title, claim or interest which
Landlord may now or hereafter  have  therein;  (b) Landlord  shall not assert as
against the Agent's  interest  therein any statutory,  contractual or possessory
lien,  right,  title,  claim or interest in the  Collateral,  including  without
limitation,  rights  of levy or  distraint  for  rent,  all of which  it  hereby
subordinates  to the Agent's  lien and  security  interest  for the term of this
Agreement; (c) the Agent and Lenders shall have access to the Collateral and the
Premises at all times  hereafter  during  regular  business  hours to remove the
Collateral  therefrom  should the Agent or Lenders  elect to enforce the Agent's
security interest in the Collateral,  without hindrance or delay by Landlord and
(d) all  Collateral  now or hereafter  situated on the Premises shall remain the
property of Company  notwithstanding the mode or manner of its affixation to the
Premises.

     (iv) Termination of the Lease. If, after the date hereof,  Landlord intends
to  terminate  the Lease or otherwise  exercise the right to require  Company to
surrender  the Premises or if Landlord  becomes aware that Company has abandoned
the Premises or  terminated  the Lease (each of the  foregoing,  a  "Termination
Event"),  Landlord  agrees to notify  the Agent in  writing  at  SunTrust  Bank,
Atlanta, 55 Park Place, Atlanta, Georgia 30303, Attention: David Westerfield and
Tom Matthesen,  of the occurrence of such Termination Event (such notice herein,
a "Termination Notice").

     (v) Use of the Premises;  Continuance of the Lease. Landlord agrees that if
a  Termination  Event occurs the Agent or its  designee may (at its option,  but
without  obligation):  (i) within ten (10) days after the Agent's receipt of the
Termination  Notice  relative  thereto,  notify  Landlord that the Agent or such
designee  desires to use or have  access to the  Premises  for up to ninety (90)


                                       37
<PAGE>

days,  after which notice the Agent or its designee  shall have the right to use
or have  access to the  Premises  for up to ninety  (90) days  (with the  actual
number of days to be at the Agent's or its designee's option), provided that the
Agent or its  designee  shall  pay or cause to be paid rent to  Landlord  at the
rental rate provided under the Lease (pro-rated on a daily basis) for the actual
number of days that the Agent or its  designee has access to or is making use of
the Premises (but without incurring any other obligation under the Lease);  (ii)
within  such  ninety  (90) day  period,  notify  Landlord  that the Agent or its
designee desires to lease the Premises for the then remaining term of the Lease,
after which notice the Agent or its  designee  shall have the right to lease the
Premises for the then remaining  term of the Lease in accordance  with the terms
of the Lease,  provided that the Agent or its designee  performs or causes to be
performed  all  obligations  of  Company as lessee  under the Lease  (including,
without  limitation,  the  obligation  of Company to pay any past due rent);  or
(iii) enter onto the Premises  within thirty (30) days after the Agent's receipt
of the Termination Notice in order to remove the Collateral  therefrom,  without
charge, except for reasonable compensation for any damage to the Premises caused
by such removal, and in either such event, Landlord agrees to cooperate with the
Agent and not to hinder the Agent's actions in protecting the Collateral.

     (vi) Bankruptcy. Notwithstanding anything contained herein to the contrary,
in the  event  that the  Company  is the  subject  of a  bankruptcy  or  similar
proceeding, the periods described in the preceding Section 5 shall be stayed for
so  long as the  Agent  is  stayed  as a  result  of such  bankruptcy  or  other
proceeding   from  exercising  its  rights  and  remedies  under  the  Financing
Arrangements and such periods shall commence to run only when any stay affecting
the Agent is  lifted.  Furthermore,  the  Landlord  agrees  that if the Lease is
rejected at any time during such bankruptcy or similar proceeding,  the Landlord
will enter into an identical  lease with  identical  terms with the Agent or its
successor or assign.

     (vii) Consent of Landlord.  Landlord  hereby  consents to the execution and
delivery by Company of a Security Agreement or similar instrument (the "Security
Agreement")  in favor of the Agent,  for the  benefit of Lenders,  securing  the
Financing  Arrangements  and the  granting  thereunder  by the Company of liens,
security  title and security  interests  on or with  respect to the  Collateral.
Notwithstanding  anything to the contrary in the Lease or any other agreement of
the Company, the execution and delivery by the Company of the Security Agreement
and the  granting of liens,  security  title and security  interests  thereunder
shall not constitute a breach or default under the Lease or any other  agreement
of the Company with the Landlord.



                                       38
<PAGE>

     (viii) Notice to Transferee.  Landlord hereby agrees to make this Agreement
known to any transferee of the Premises and any person who may have any right or
interest in the Premises, the Lease or the Collateral.

     (ix) Term.  This Agreement  shall remain in full force and effect until the
Financing Arrangements have been terminated, and all obligations and liabilities
of Company to Lenders and the Agent have been paid and satisfied in full.

     (x) Modification;  Successors and Assigns. The provisions of this Agreement
may not be  modified  or  terminated  orally,  and  shall  be  binding  upon the
successors,  assigns and  personal  representatives  of  Landlord,  and upon any
successor owner or transferee of the Premises, and shall inure to the benefit of
the successors and assigns of the Agent and Lenders.

     IN WITNESS WHEREOF,  Landlord has caused this Agreement to be executed,  by
its duly authorized officer,  agent or other  representative as of the _____ day
of ______, ___.


Signed and delivered                        LANDLORD:
in the presence of:
                                            ------------------------

Notary Public
                                            ---------------------------------
My Commission Expires:                      By:
---------------------



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

(NOTARY SEAL)                               Landlord's Address for Notices:


<PAGE>


ACKNOWLEDGED AND
AGREED TO:

ONEITA INDUSTRIES, INC.


By:_________________________
   Name:____________________
   Title:___________________


SUNTRUST BANK, ATLANTA,
as Agent


By:_________________________
   Name:____________________
   Title:___________________


By:_________________________
   Name:____________________
   Title:___________________


<PAGE>

                      Schedule 1 to the Landlord Agreement


                             [Attach Copy of Lease]

<PAGE>

                                    EXHIBIT B

                             [FORM OF BAILEE LETTER]

                                     [Date]

[Name of Bailee]
[Address of Bailee]


              Re:  Oneita Industries, Inc.


Ladies and Gentlemen:

     Pursuant to Section  9-305 of the Uniform  Commercial  Code as in effect in
the State of Georgia and the State of [insert state where bailee is located], we
hereby  notify you that Oneita  Industries,  Inc., a Delaware  corporation  (the
"Company"), will enter into that certain Security Agreement, dated as of January
__, 26,  1996,  in favor of  SunTrust  Bank,  Atlanta as  collateral  agent (the
"Collateral  Agent") for itself,  First Union  National Bank of South  Carolina,
NatWest Bank,  N.A., The Prudential Life Insurance  Company of America and their
respective successors and assigns (as hereafter amended, restated,  supplemented
or otherwise modified from time to time, the "Security Agreement".

     Pursuant  to the  Security  Agreement,  the  Company  will grant a security
interest in the  collateral  described  therein (the  "Collateral"),  including,
without  limitation,  all of its Inventory,  as defined  therein,  some of which
Inventory is in your possession. Upon receipt of this notice by you, you will be
effectively  appointed  as the bailee of the  Collateral  Agent and the security
interest in the Collateral  granted  pursuant to the Security  Agreement will be
perfected  under the  Uniform  Commercial  Code as in  effect  in the  States of
Georgia and [state where bailee is located].  By its signed  confirmation below,
the Company joins in this notification.

     We request that you countersign below to evidence your  acknowledgment that
(1) you are the  bailee  for the  Collateral  Agent,  (2) you  will  notify  the
Collateral  Agent  at the  address  provided  below  upon  your  receipt  of any
notification by any other party of a lien,  security  interest or encumbrance on
any of the  Inventory  of the  Company  in  your  possession  and (3) you do not


                                       39
<PAGE>

currently  have,  nor  will you  accept  at any time in the  future,  any  lien,
security interest or other encumbrance on any of the Inventory of the Company in
your possession.

                                       Very truly yours,

                                       SUNTRUST BANK, ATLANTA


                                       By:
                                          Name:
                                          Title:


                                       By:
                                          Name:
                                          Title:


Agreed and Confirmed:

ONEITA INDUSTRIES, INC.


By:
   Name:
   Title:


     We hereby  acknowledge that (1) we are the bailee for the Collateral Agent,
(2) we will notify the Collateral  Agent upon our receipt of any notification by
any  other  party of a lien,  security  interest  or  encumbrance  on any of the
Inventory of the Company in our possession and (3) we do not currently have, nor
will we accept at any time in the future,  any lien,  security interest or other
encumbrance on any of the Inventory of the Company in our possession.

                                          [NAME OF BAILEE]


                                          By:
                                            Name:
                                            Title: