<PAGE>   1
                                                                 EXHIBIT 10.12


                              AMENDED AND RESTATED
                               SECURITY AGREEMENT

         THIS SECURITY AGREEMENT, entered into as of this 26th day of
September, 1997, by and between CELEBRITY, INC., a Texas corporation
("Celebrity") whose address is 4520 Old Troup Road, Tyler, Texas 75707,
MAGICSILK, INC., a Texas corporation ("Magicsilk") whose address is 4520 Old
Troup Road, Tyler, Texas 75707, THE CLUETT CORPORATION, a California
corporation ("Cluett") whose address is 3200 Centre Park Boulevard,
Winston-Salem, North Carolina _______, INDIA EXOTICS, INC., a Texas corporation
whose address is 4346 Green Ash Drive, Earth City, Missouri 63045 ("India"),
and STAR WHOLESALE FLORIST, INC., a Texas corporation ("Star") whose address is
8223 N. Stemmons, Dallas, Texas 75247 (collectively, the "Grantors"), and
NATIONAL CANADA FINANCE CORP., a Delaware corporation, having an address at 125
North 55th Street, 23rd Floor, New York, New York 10009 ("NCFC"), Individually
and as Agent for National Bank of Canada, a commercial banking institution
organized and existing under the laws of Canada with a United States domestic
branch office located in New York, New York (the "Bank"), the said NCFC,
Individually and as such Agent being herein sometimes called the "Lender";

                              W I T N E S S E T H:

That for good and valuable considerations, the receipt and sufficiency of which
are hereby acknowledged, the Grantors hereby agree with the Lender as follows:

         1. Definitions. Reference is made to the Loan Agreement dated May 10,
1993, as amended by a First Amendment dated July 27, 1993, a Second Amendment
dated November 17, 1993, a Third Amendment dated March 18,1994, a Fourth
Amendment dated November 4, 1994, a Fifth Amendment dated February 3, 1995, a
Sixth Amendment dated as of March 14, 1995, a Seventh Amendment dated as of
August 4, 1995, an Eighth Amendment dated as of July 22, 1997, and a Ninth
Amendment of even date herewith (as so amended and as hereafter amended or
modified from time to time, the "Loan Agreement"), among Celebrity, Magicsilk,
Cluett, India, Star, and the Lender, said Loan Agreement being incorporated
herein by reference. All terms used in this Security Agreement which are
defined in the Loan Agreement or in Article 9 of the Uniform Commercial Code
(the "Code") of the State of New York and which are not otherwise defined
herein shall have the same meanings herein as set forth therein.

         2. Grant of Security Interest. As collateral security for all of the
Obligations (as defined in Section 3 hereof), the Grantors hereby jointly,
severally, and jointly and severally pledge and assign to Lender, and grant to
Lender a continuing security interest in, the following (the "Collateral"):



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                  (a) All of the Grantors' U.S. inventory in all of its forms,
         wherever located and whether now or hereafter existing, and all
         accessions thereto and products thereof, including raw materials,
         materials awaiting manufacture, work-in-process, finished products,
         and materials used or consumed in Grantor's business (collectively
         hereinafter called "Inventory");

                  (b) All warehouse receipts, bills of lading, and other
         documents of title of every kind and character, now or at any time
         hereafter evidencing or representing all or any part of Inventory;

                  (c) All of the Grantors' U.S. accounts, accounts receivable,
         chattel paper, instruments, and other obligations of any kind, whether
         or not evidenced by an instrument or chattel paper, and whether or not
         earned by performance (collectively hereinafter called "Accounts
         Receivable" or "Receivables") whether now or hereafter existing,
         arising out of or in connection with the sale or lease of goods or the
         rendering of services or otherwise, and all rights now or hereafter
         existing in and to all security agreements, leases and other contracts
         securing or otherwise relating to any such Accounts Receivable;

                  (d) All claims for tax refund, whether now existing or
         hereafter arising, of any of the Grantors against any city, county,
         state or federal government or any agency or authority or other
         subdivision thereof, and the proceeds thereof;

                  (e) To the extent applicable to Inventory, all of the
         Grantors' contract rights and general intangibles ("General
         Intangibles") of every kind, character, and description, both now
         owned and hereafter acquired, including, without limitation, goodwill,
         trademarks, trade styles, trade names, patents, patent applications,
         and deposit accounts;

                  (f) To the extent applicable to Receivables, all of the
         Grantors' customer lists, original books and records, ledger and
         account cards, computer tapes, discs, and printouts, whether now in
         existence or hereafter created;

                  (g) All proceeds ("Proceeds") of any and all of the foregoing
         Collateral and, to the extent not otherwise included, all payments
         under insurance (whether or not Lender is the loss payee thereof), any
         indemnity, warranty, or guaranty, payable by reason of loss or damage
         to or otherwise with respect to any of the foregoing Collateral, and
         including, without limitation, all moneys due or to become due in
         connection with any of the Collateral, guaranties and security for the
         payment of such moneys, the right of stoppage in transit, and all
         returned or repossessed goods arising from a sale or lease thereof.
         (Although proceeds are covered, Lender does not authorize the sale or
         other transfer of any of the Collateral or the transfer of any
         interest in the Collateral, except for the sale of goods in the
         ordinary course of the Grantors' business);



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         in each case, whether now owned or hereafter acquired by any of the
         Grantors and howsoever such Grantor's interest therein may arise or
         appear (whether by ownership, lease, security interest, claim, or
         otherwise). The Collateral described in subparagraphs (a) and (f) of
         this Section is hereinafter sometimes called the "Tangible
         Collateral."

         3. Security for Obligations.  The security interest created hereby in 
the Collateral constitutes continuing collateral security for all of the
following obligations, whether now existing or hereafter incurred (the
"Obligations"):

                  (a) The full and prompt payment, when due, of the
         indebtedness (and interest thereon) evidenced and to be evidenced by
         that certain promissory note of even date herewith, in the principal
         sum of Thirty-five Million Dollars (U.S. $35,000,000.00), executed by
         the Grantors, and payable to the order of NCFC, and any and all
         renewals, modifications, and extensions of said note, in whole or in
         part;

                  (b) The due performance and observance by each of the
         Grantors of all of its covenants, agreements, representations,
         liabilities, obligations, and undertakings as set forth herein, or in
         the Loan Agreement (as the same may be modified, renewed or extended
         from time to time) or in any other instrument or document which now or
         at any time hereafter evidences or secures, in whole or in part, all
         or any part of the Obligations hereby secured; and

                  (c) The prompt payment and performance of any and all
         obligations of any of the Grantors with respect to any letters of
         credit or banker's acceptances now or at any time hereafter (i) issued
         by NCFC at the request and for the benefit of a Borrower, or (ii)
         issued by the Bank at the request and for the benefit of any of the
         Grantors.

         4. Representations and Warranties.  Each of the Grantors represents 
and warrants as follows:

                  (a) Such Grantor's chief place of business and chief
         executive office, where such Grantor keeps its records concerning
         Accounts Receivable and all originals of all chattel paper which
         constitute Accounts Receivable are located at the address specified
         for such Grantor in the initial paragraph hereof. None of the Accounts
         Receivable is evidenced by a promissory note or other instrument.

                  (b) (i) Except for Permitted Encumbrances, each of the
         Grantors owns the Collateral free and clear of any lien, security
         interest or other charge or encumbrance except for the security
         interest created by this Agreement; and (ii) except for the financing
         statements filed in favor of the Lender relating to this Agreement,
         and except for any financing statements filed with respect to
         Permitted Encumbrances, no other financing statement or other
         instrument similar in effect covering all or any part of the
         Collateral is on file in any recording office.


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                  (c) The exercise by the Lender of its rights and remedies
         hereunder will not contravene any law or governmental regulation or
         any contractual restriction binding on or affecting such Grantor or
         any of its properties and will not result in or require the creation
         of any lien, security interest or other charge or encumbrance upon or
         with respect to any of its properties.

                  (d) To the best knowledge of such Grantor, except with regard
         to amounts payable by the government of the United States under any
         Government Contract, no authorization or approval or other action by,
         and no notice to or filing with, any governmental authority or other
         regulatory body is required either for the grant by such Grantor of
         the security interest created hereby in the Collateral or for the
         exercise by the Lender of its rights and remedies hereunder.

                  (e) This Agreement creates a valid security interest in favor
         of the Lender in the Collateral. The taking possession by the Lender
         of all instruments and chattel paper constituting Collateral from time
         to time, and the filing of financing statements with the filing
         offices designated on Exhibit A hereto will perfect and establish the
         priority of the Lender's security interest hereunder in the
         Collateral, subject to no other liens and encumbrances, except
         Permitted Encumbrances. Except as set forth in this Section 4(e), and
         except with regard to amounts payable by the government of the United
         States under any Government Contract, no action is necessary or
         desirable to perfect or otherwise protect such security interest.

         5. Covenants as to the Collateral. So long as any of the Obligations 
shall remain outstanding, unless the Lender shall otherwise consent in writing:

                  (a) Further Assurances. The Grantors will at their expense,
         at any time and from time to time, promptly execute and deliver all
         further instruments and documents and take all further action that the
         Lender deems necessary or desirable or that the Lender may request in
         order (i) to perfect and protect the security interest created or
         purported to be created hereby; (ii) to enable the Lender to exercise
         and enforce its rights and remedies hereunder in respect of the
         Collateral; or (iii) to otherwise effect the purposes of this
         Agreement, including, without limitation: (A) executing and filing
         such financing or continuation statements, or amendments thereto, as
         the Lender deems necessary or desirable or that the Lender may request
         in order to perfect and preserve the security interest created or
         purported to be created hereby; (B) furnishing to the Lender from time
         to time statements and schedules further identifying and describing
         the Collateral and such other reports in connection with the
         Collateral as the Lender may reasonably request, all in reasonable
         detail; (C) marking conspicuously each chattel paper included in the
         Accounts Receivable and, at the request of the Lender, each of the
         Grantors' respective records pertaining to the Account Receivable with
         a legend, in form and substance satisfactory to the Lender, indicating
         that such chattel paper is subject to the security interest created
         hereby; (D) if any Account Receivable shall be evidenced by a
         promissory note or other instrument or chattel paper, delivering and 
         pledging to the





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         Lender hereunder such note, instrument or chattel paper duly
         endorsed and accompanied by executed instruments of transfer or
         assignment, all in form and substance satisfactory to the Lender; and
         (E) if any Inventory shall be represented by a warehouse receipt or
         other document of title, delivering such warehouse receipt or other
         document to Lender duly endorsed or assigned to the Lender, all in
         form and substance satisfactory to the Lender.

                  (b) Location of Tangible Collateral. Except for items of
         Inventory temporarily in transit to a Grantor following the purchase
         of same by such Grantor, each of the Grantors will keep all of the
         Tangible Collateral, both now owned and hereafter acquired, at the
         location(s) described in EXHIBIT "B," hereto attached, or at such
         other location or locations to which the Lender shall consent in
         writing in advance of placing Tangible Collateral at such location(s).

                  (c) Taxes. The Grantors will pay promptly when due all
         property and other taxes, assessments, and governmental charges or
         levies imposed upon, and all claims (including claims for labor,
         materials, and supplies) against, the Collateral, except to the extent
         the validity thereof is being contested diligently and in good faith
         by proper proceedings satisfactory to the Lender.

                  (d) Insurance. (i) The Grantors will, at their own expense,
         maintain insurance with respect to the Inventory in such amounts,
         against such risks, in such form and with such insurers, as shall be
         satisfactory to the Lender from time to time, and in accordance with
         the provisions of the Loan Agreement.

                  (e) As to Receivables and General Intangibles.

                           (i) Each of the Grantors will (A) keep its chief
                  place of business and chief executive office and all
                  originals of all chattel paper which constitute Accounts
                  Receivable and all documents which constitute or create
                  General Intangibles, at the location(s) specified in
                  paragraph 4(a) hereof, and (B) maintain and preserve complete
                  and accurate records concerning the Receivables, General
                  Intangibles, and such chattel paper.

                           (ii) As of the time any Receivable becomes subject
                  to the security interest granted by this Security Agreement,
                  including, without limitation, as of each time any specific
                  assignment or transfer or identification is made to the
                  Lender of any Receivable, the Grantor that owns such
                  Receivable shall be deemed to have warranted that such
                  Receivable and all papers and documents relating thereto are
                  genuine and in all respects what they purport to be; that
                  such Receivable is valid and subsisting and arises out of a
                  bona fide sale of goods sold and delivered, or in the process
                  of being delivered, or out of and for services theretofore
                  actually rendered, to the account debtor named in such
                  Receivable; that the amount of such Receivable represented as 
                  owing is the correct amount



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                  actually and unconditionally owing except for normal cash
                  discounts and is not disputed except for immaterial claims
                  not in excess of $5,000 in any one instance, and except for
                  such normal cash discount and immaterial claims, is not
                  subject to any set-offs, credits, deductions or
                  counter-charges; that such Grantor is the owner thereof free
                  and clear of all prior liens, except for the security
                  interest in favor of the Lender and any Permitted
                  Encumbrances; and that no surety bond was required or given
                  in connection with such Receivable or the contracts or
                  purchase orders out of which the same arose; and that such
                  Grantor has no notice of or reason to believe that the
                  account debtor is subject to any pending bankruptcy
                  proceeding, insolvency proceeding or operations of any
                  creditors' committee.

                           (iii) The Lender shall have the privilege at any
                  time upon its request, of inspection during reasonable
                  business hours of any of the business, properties or premises
                  of the Grantors and the books and records of the Grantors
                  relating to said Receivables and Inventory or the processing
                  or collection thereof as well as those relating to their
                  general business affairs and financial condition. The Lender
                  shall have the right at any time, whether before or after an
                  Event of Default, to notify any and all account debtors to
                  make payment thereof directly to the Lender; but to the
                  extent the Lender does not so elect, each of the Grantors
                  shall continue to collect such Grantor's Receivables. Except
                  as the Lender shall otherwise expressly agree in writing, all
                  proceeds of collection of Receivables received by the
                  Grantors shall be forthwith accounted for and transmitted to
                  the Lender in the form as received by the Grantors and shall
                  not be commingled with any funds of the Grantors. In the
                  event the account debtor of any Receivable included in this
                  Security Agreement shall also be indebted to any of the
                  Grantors in any other respect and such account debtor shall
                  make payment without designating the particular indebtedness
                  against which it is to apply, such payment shall be
                  conclusively presumed to be payment on the Receivable of such
                  account debtor included in this Security Agreement. Any
                  proceeds of Receivables so transmitted to the Lender shall be
                  handled and administered by the Lender in and through a
                  Remittance or similar account, but the Grantors acknowledge
                  that the maintenance of such an account by the Lender is
                  solely for its convenience in facilitating its own operations
                  pursuant hereto and that the Grantors have no, and shall not
                  have any, right, title or interest in said Receivable or in
                  the amounts at any time to the credit thereof. Except to the
                  extent the Lender may from time to time in its discretion
                  release proceeds to any of the Grantors for use in its
                  business, all proceeds received by the Lender shall be
                  applied on the Obligations secured hereby, whether or not
                  such Obligations shall have by their terms matured, such
                  application to be made at such intervals as the Lender may
                  determine, except that the Lender need not apply or give
                  credit for any item included in such proceeds until two (2)
                  business days after receipt by NCFC of such item at its main
                  office in New York City, New York. Items received after 1:00
                  o'clock p.m. current New York time on any business day shall 
                  be deemed 


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                  to have been received the following business day. In
                  administering the collection of proceeds as herein provided
                  for, the Lender may accept checks or drafts in any amount and
                  bearing any notation without incurring liability to any of
                  the Grantors for so doing.

                           (iv) Following the occurrence of an Event of
                  Default, the Lender shall have the right, but shall incur no
                  liability for failing to do so, in its own name, or in the
                  name of the Grantor to demand, collect, receive, receipt for,
                  sue for, compound and give acquittance for, any and all
                  amounts due or to become due on the Receivables, to adjust,
                  settle or compromise the amount or payment thereof, in the
                  same manner and to the same extent as any of the Grantors
                  might have done, and to endorse the name of any of the
                  Grantors on all commercial paper given in payment or part
                  payment thereof, and in its discretion to file any claim or
                  take any action or proceedings which the Lender may deem
                  necessary or appropriate to protect and preserve and realize
                  upon the security interest of the Lender in the Receivables
                  and the proceeds thereof.

                           (v) Each of the Grantors will from time to time
                  execute such further instruments and do such further acts and
                  things as the Lender may reasonably require by way of further
                  assurance to the Lender of the matters and things herein
                  provided for or intended so to be. Without limiting the
                  foregoing, each of the Grantors agrees to execute and deliver
                  to the Lender an assignment or other form of identification
                  in the form required by the Lender of all Receivables at any
                  time included under this Security Agreement, together with
                  such other evidence of the existence and identity of such
                  Receivables as the Lender may reasonably require; each of the
                  Grantors will mark its books and records to reflect this
                  Security Agreement. Each of the Grantors will accompany each
                  transmission of proceeds of Receivables to the Lender with a
                  report in such form as the Lender may require in order to
                  identify the Receivables to which such proceeds apply.

                           (vi) Returned or repossessed goods arising from or
                  relating to any Receivables, if requested by the Lender,
                  shall be held separate and apart from any other property.
                  Each of the Grantors shall as often as required by Lender,
                  but not less often than weekly, report to the Lender the
                  appropriate identifying information with respect to such
                  goods and the Receivables out of which or to which such goods
                  relate.

                  (f) Transfers and Other Liens. Without the prior consent of
         the Lender the Grantors shall not (i) sell, assign (by operation of
         law or otherwise), exchange, or otherwise dispose of any of the
         Collateral (except for sale or other use of Inventory in the ordinary
         course of business as presently conducted); or (ii) create or suffer
         to exist any lien, security interest or other charge or encumbrance
         upon or with respect to any of the Collateral except for the security
         interest created by this Agreement and Permitted Encumbrances.




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                  (g) Damage to Collateral.  Each of the Grantors will promptly 
         furnish to the Lender a statement respecting any material loss or 
         damage to any of the Tangible Collateral.

                  (h) Field Warehouse Arrangement. Following the occurrence of
         an Event of Default, if the Lender shall so require, each of the
         Grantors will at its own expense continue in force and effect and
         comply with and operate under a field warehouse arrangement
         satisfactory in form and substance to the Lender with an independent
         field warehouse company selected by such Grantor and satisfactory to
         the Lender, providing for the warehousing of such portion or portions
         of such Grantor's Inventory as the Lender may designate and for the
         issuance of non-negotiable warehouse receipts in the name of the
         Lender for or representing the Inventory located therein.

         6.       Additional Provisions Concerning the Collateral.

                  (a) Each of the Grantors hereby authorizes Lender to file,
         without the signature of such Grantor where permitted by law, one or
         more financing or continuation statements, and amendments thereto,
         relating to the Collateral.

                  (b) Each of the Grantors hereby irrevocably appoints the
         Lender such Grantor's attorney-in-fact and proxy, with full authority
         in the place and stead of such Grantor and in the name of such Grantor
         or otherwise, from time to time in the Lender's discretion following
         the occurrence of an Event of Default, to take any action and to
         execute any instrument which the Lender may deem necessary or
         advisable to accomplish the purposes of this Agreement, including,
         without limitation: (i) to obtain and adjust insurance required to be
         paid to the Lender pursuant to Section 5(d) hereof; (ii) to ask,
         demand, collect, sue for, recover, compound, receive, and give
         acquittance and receipts for moneys due and to become due under or in
         respect of any of the Collateral; (iii) to receive, endorse, and
         collect any checks, drafts or other instruments, documents, and
         chattel paper in connection with clause (i) or (ii) above; (iv) to
         sign its name on any invoice or bill of lading relating to any
         Receivable, on drafts against customers, on schedules and assignments
         of Receivables, on notices of assignment, financing statements and
         other public records, on verification of accounts and on notices to
         customers (including notices directing customers to make payment
         direct to the Lender); (v) to notify the post office authorities to
         change the address for delivery of its mail to an address designated
         by the Lender, to receive, open and process all mail addressed to the
         Grantor, to send requests for verification of Receivables to
         customers; and (vi) to file any claims or take any action or institute
         any proceedings which the Lender may deem necessary or desirable for
         the collection of any of the Collateral or otherwise to enforce the
         rights of the Lender with respect to any of the Collateral. Each of
         the Grantors hereby ratifies and approves all acts of said attorney;
         and so long as the attorney acts in good faith, it shall have no
         liability to any such Grantor for any act or omission as such attorney.


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<PAGE>   9



                  (c) If any of the Grantors fails to perform any agreement
         contained herein, the Lender may itself perform, or cause performance
         of, such agreement or obligation, and the costs and expenses of the
         Lender incurred in connection therewith shall be payable by the
         Grantors under Section 9 hereof, and shall be fully secured hereby.

                  (d) The powers conferred on the Lender 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 the safe custody
         of any Collateral in its possession and the accounting for moneys
         actually received by it hereunder, the Lender shall have no duty as to
         any Collateral or as to the taking of any necessary steps to preserve
         rights against prior parties or any other rights pertaining to any
         Collateral.

                  (e) Anything herein to the contrary notwithstanding, (i) the
         Grantors shall remain liable under any contracts and agreements
         relating to the Collateral to the extent set forth therein to perform
         all of their obligations thereunder to the same extent as if this
         Agreement had not been executed; (ii) the exercise by the Lender of
         any of its rights hereunder shall not release any of the Grantors from
         any obligations under the contracts and agreements relating to the
         Collateral; and (iii) the Lender shall not have any obligation or
         liability by reason of this Agreement under any contracts and
         agreements relating to the Collateral, nor shall the Lender be
         obligated to perform any of the obligations or duties of any of the
         Grantors thereunder or to take any action to collect or enforce any
         claim for payment assigned hereunder.

         7.       Remedies Upon Default.  If an Event of Default shall have 
occurred:

                  (a) The Lender may exercise in respect of the Collateral, in
         addition to other rights and remedies provided for herein or otherwise
         available to it, all the rights and remedies of a secured party on
         default under the Code (whether or not the Code applies to the
         affected Collateral), and also may (i) require the Grantors to, and
         the Grantors hereby agree that they will at their expense and upon
         request of the Lender forthwith, assemble all or part of the
         Collateral as directed by the Lender and make it available to the
         Lender at a place to be designated by the Lender which is reasonably
         convenient to the Lender; and (ii) without notice except as specified
         below, sell the Collateral or any part thereof in one or more parcels
         at public or private sale, at any of the Lender's offices or
         elsewhere, for cash, on credit or for future delivery, and at such
         price or prices and upon such other terms as the Lender may deem
         commercially reasonable. The Grantors agree that, to the extent notice
         of sale shall be required by law, at least five (5) days' notice to
         the Grantors of the time and place of any public sale or the time
         after which any private sale is to be made shall constitute reasonable
         notification. The Lender shall not be obligated to make any sale of
         Collateral regardless of notice of sale having been given. The Lender
         may adjourn any public or private sale from time to time by
         announcement at the time and place fixed therefor, and such sale may, 
         without further notice, be made at the time and place to which it was 
         so adjourned.


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                  (b) Any cash held by the Lender as Collateral and all cash
         proceeds received by the Lender in respect of any sale of, collection
         from, or other realization upon, all or any part of the Collateral
         shall be applied as follows:

                           (i)   First, to the repayment of the reasonable costs
                  and expenses, including reasonable attorneys' fees and legal
                  expenses, incurred by the Lender in connection with (A) the
                  administration of this Agreement, (B) the retaking, custody,
                  preservation, use, or operation of, or the sale of,
                  collection from, or other realization upon, any Collateral,
                  (C) the exercise or enforcement of any of the rights of the
                  Lender hereunder, or (D) the failure of any of the Grantors
                  to perform or observe any of the provisions hereof;

                           (ii)  Second, to the reimbursement of the Lender for
                  the amount of any obligations of the Grantor paid or
                  discharged by the Lender pursuant to the provisions of this
                  Agreement, and of any expenses of the Lender payable by the
                  Grantors hereunder;

                           (iii) Third, to the satisfaction of the Obligations, 
                  in such order as Lender shall elect;

                           (iv)  Fourth, to the payment of any other amounts
                  required by applicable law [including, without limitation,
                  Section 47-9-504(1)(c) of the Code or any successor or
                  similar, applicable statutory provision]; and

                           (v)   Fifth, the surplus proceeds, if any, to the
                  Grantors or to whomsoever shall be lawfully entitled to
                  receive the same or as a court of competent jurisdiction
                  shall direct.

                  (c) In the event that the proceeds of any such sale,
         collection or realization are insufficient to pay all amounts to which
         the Lender is legally entitled, the Grantors shall be liable for the
         deficiency, together with interest thereon at such rate(s) as shall be
         fixed by instrument(s) evidencing the Obligation(s) with respect to
         which such deficiency exists, together with the costs of collection
         and the reasonable fees of any attorneys employed by the Lender to
         collect such deficiency.

         8. Rights and Duties of the Lender, Etc. The Lender undertakes, as to
this Agreement, to exercise only such duties as are specifically set forth in
this Agreement and to exercise such of the rights, powers and remedies as are
vested in it by this Agreement or by law. The Lender may consult with counsel,
and the written advice or opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.



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<PAGE>   11



         9.  Indemnity and Expenses.

             (a) The Grantors agree to indemnify the Lender from and
         against any and all claims, losses, and liabilities growing out of or
         resulting from this Agreement (including, without limitation,
         enforcement of this Agreement and any matter growing out of or
         resulting from the ordinary negligence of the Lender), except claims,
         losses, or liabilities resulting solely and directly from the Lender's
         gross negligence or willful misconduct.

             (b) The Grantors will upon demand pay to Lender the amount of
         any and all costs and expenses, including the reasonable fees and
         disbursements of the Lender's counsel and of any experts and agents,
         which the Lender may incur in connection with (i) the administration
         of this Agreement (excluding the salary of the Lender's employees and
         the Lender's normal and usual overhead expenses); (ii) the custody,
         preservation, use, or operation of, or the sale of, collection from,
         or other realization upon, any Collateral; (iii) the exercise or
         enforcement of any of the rights of Lender hereunder; or (iv) the
         failure by the Grantor to perform or observe any of the provisions
         hereof, even if such failure constitutes ordinary negligence, except
         expenses resulting solely and directly from the Lender's gross
         negligence or willful misconduct.

         10.  Notices, Etc.  All notices and other communications provided 
for hereunder (except for routine informational communications) shall be in
writing and shall be mailed, by registered or certified mail, return receipt
requested, sent by recognized national overnight courier service, telecopied by
facsimile machine, or delivered, if to any of the Grantors, to it at its
address specified in the first paragraph of this Agreement, with copies (if
other than routine informational communication) to Celebrity, 4520 Old Troup
Road, Tyler, Texas 75707, Attention: Ken Cichocki (Telecopy No.: 903/509-3631)
and Thompson & Knight, P.C., Suite 3300, 1700 Pacific Avenue, Dallas, Texas
75201-4693, Attention: James W. McKeller (Telecopy No.: 214/969-1751; and if to
Lender, to it at Suite 1850, 2121 San Jacinto, Dallas, Texas 75201, Attention:
William W. Handley (Telecopy No.: 214/871-2015). All such notices and other
communications shall be effective (i) if mailed, when received or three (3)
days after mailing, whichever is earlier; (ii) if sent by recognized national
overnight courier service, one (1) business day after sending; and (iii) if
telecopied, upon receipt, or (iv) if delivered, upon delivery.

         11.  Security Interest Absolute. All rights of the Lender, and all
security interests and all obligations of the Grantors hereunder, shall be
absolute and unconditional irrespective of: (i) any lack of validity or
enforceability of the Loan Agreement, any guaranty, or any other agreement or
instrument relating thereto; (ii) any change in the time, manner, or place of
payment of, or in any other term in respect of, all or any of the Obligations,
or any other amendment or waiver of or consent to any departure from this
Agreement, or any guaranty, or any other agreement or instrument relating
thereto; (iii) any increase in, addition to, or exchange, release, or
non-perfection of, any other collateral, or any release or amendment or waiver
of or consent to departure from any guaranty, for all or any of the
Obligations; (iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, 



                                     -11-
<PAGE>   12



any of the Grantors in respect of the Obligations or this Agreement; or (v) the
absence of any action on the part of the Lender to obtain payment or
performance of the Obligations from the Grantors or any other party.

         12. Miscellaneous.

                  (a) No amendment of any provision of this Security Agreement
         shall be effective unless it is in writing and signed by the Grantors
         and the Lender, and no waiver of any provision of this Agreement, and
         no consent to any departure by the Grantor therefrom, shall be
         effective unless it is in writing and signed by the Lender, and then
         such waiver or consent shall be effective only in the specific
         instance and for the specific purpose for which given.

                  (b) No failure on the part of the Lender to exercise, and no
         delay in exercising, any right hereunder or under any other instrument
         or document shall operate as a waiver thereof; nor shall any single or
         partial exercise of any such right preclude any other or further
         exercise thereof or the exercise of any other right. The rights and
         remedies of the Lender provided herein and in the other instruments
         and documents are cumulative and are in addition to, and not exclusive
         of, any rights or remedies provided by law. The rights of the Lender
         under any Loan Agreement between the parties, any guaranty, any other
         instrument which now or hereafter evidences or secures all or part of
         the Obligations, or any related document against any party thereto are
         not conditional or contingent on any attempt by the Lender to exercise
         any of its rights under any other such instrument or document against
         such party or against any other party.

                  Any provision of this Security Agreement which is prohibited
         or unenforceable in any jurisdiction shall, as to such jurisdiction,
         be ineffective to the extent of such prohibition or invalidity without
         invalidating the remaining portions hereof or thereof or affecting the
         validity or enforceability of such provision in any other
         jurisdiction.

                  (d) This Agreement shall create a continuing security
         interest in the Collateral and shall (i) remain in full force and
         effect until the payment in full of all of the Obligations, (ii) be
         binding on the Grantors and their respective successors and permitted
         assigns and shall inure, together with all rights and remedies of the
         Lender hereunder, to the benefit of the Lender and its successors,
         transferees, and assigns. None of the rights or obligations of the
         Grantors hereunder may be assigned or otherwise transferred without
         the prior written consent of the Lender.

                  (e) Upon the satisfaction in full of all of the Obligations,
         the Lender will, upon the Grantors' request and at the Grantors'
         expense, (i) return to the Grantor such of the Collateral as shall not
         have been sold or otherwise disposed of or applied pursuant to the
         terms hereof; and (ii) execute and deliver to the Grantors such
         documents as the Grantors shall reasonably request to evidence
         termination of the security interest herein granted.


                                     -12-
<PAGE>   13



                  (f) This Agreement shall be governed by and construed in
         accordance with the internal statutes and laws of the state of New
         York, (without regard to principles of conflicts of law), except as
         required by mandatory provisions of law and except to the extent that
         the validity or perfection of the security interest created hereby, or
         remedies hereunder, in respect of any particular Collateral are
         governed by the laws of a jurisdiction other than the State of New
         York. If any provision hereof is in conflict with the provisions of
         the Loan Agreement, the provisions of the Loan Agreement shall
         control.

         13. Effect of Prior Documents. This Agreement is given in renewal,
extension, consolidation, and modification, and as a complete restatement of
(i) that certain Security Agreement dated as of May 10, 1993 executed by
Celebrity and Magicsilk in favor of the Lender, (ii) that certain Security
Agreement dated as of November 17, 1993 executed by Cluett in favor of the
Lender, and (iii) that certain Security Agreement dated as of February 3, 1995
executed by India in favor of the Lender; provided however, that nothing herein
shall be deemed to be an extinguishment or novation of any of the liens,
security interests, obligations, or duties evidenced or created by any of the
above-described documents.

         14. Special Provisions. If any Rider, initialed by the parties, is
attached hereto, the provisions of such Rider are made a part hereof by
reference as fully and particularly as if set out herein verbatim. Should there
be any conflict between the provisions hereof and the provisions contained in
such Rider, the provisions of such Rider shall control.



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                                     -13-
<PAGE>   14



         IN WITNESS WHEREOF, the Grantors have caused this Agreement to be
executed and delivered by their respective duly authorized officers on this the
day and year first above written.


CELEBRITY, INC.                           INDIA EXOTICS, INC.


By:  /s/ ROBERT H. PATTERSON, JR.         By:   /s/ ROBERT H. PATTERSON, JR. 
    --------------------------------           -------------------------------
    Print Name:  Robert H. Patterson           Print Name: Robert H. Patterson  
                --------------------                       -------------------
    Title:       Chairman                      Title:      Chairman             
           -------------------------                    ----------------------


MAGICSILK, INC.                           STAR WHOLESALE FLORIST, INC.


By:   /s/ ROBERT H. PATTERSON, JR.        By:   /s/ ROBERT H. PATTERSON, JR. 
    --------------------------------           -------------------------------
    Print Name: Robert H. Patterson            Print Name: Robert H. Patterson
                --------------------                       -------------------
    Title:      Chairman                       Title:      Chairman          
           -------------------------                    ----------------------



THE CLUETT CORPORATION


By:   /s/ ROBERT H. PATTERSON, JR.                                     
    --------------------------------      
    Print Name: Robert H. Patterson       
                --------------------      
    Title:      Chairman                          
           -------------------------      



                                     -14-

<PAGE>   15



                                   EXHIBIT A
                             TO SECURITY AGREEMENT
                          (List of UCC Filing Offices)


1.       Celebrity:

         a.       Secretary of State - Texas



2.       Magicsilk:

         a.       Secretary of State - Texas



3.       Cluett:

         a.       Secretary of State - North Carolina
         b.       Register of Deeds -  Forsyth County, North Carolina
         c.       Secretary of State - California
         d.       County Recorder - San Diego County, California



4.       India:

         a.       Secretary of State - Texas
         b.       Secretary of State - Missouri
         c.       Recorder of Deeds - St. Louis County, Missouri
         d.       Office of Clerk of Superior Court - Fulton County, Missouri



5.       Star:

         a.       Secretary of State - Texas



                                     -15-

<PAGE>   16


                                   EXHIBIT B
                             TO SECURITY AGREEMENT
                   (List of Locations of Tangible Collateral)


A.       Inventory Locations for Celebrity:

         1.       4501 and 4520 Old Troup Road, Tyler, Texas 75707;
         2.       3637 Shiloh Road, Tyler, Texas 75707; and
         3.       15150 State Line Drive, Charlotte, North Carolina 28244.

B.       Inventory Locations for Magicsilk:

         1.       4520 Old Troup Road, Tyler, Texas 75707; and
         2.       15150 State Line Drive, Charlotte, North Carolina 28244.

C.       Inventory Locations for Cluett:

         1.       3200 Centre Park Boulevard, Winston-Salem, North Carolina;
         2.       1289 Birmingham Drive, Encinitas, California 92024; and
         3.       2590 Pioneer Avenue, Suite D, Vista, California _____.

D.       Inventory Locations for India:

         1.       4346 Green Ash Drive, Earth City, Missouri 63045;
         2.       4333 Green Ash Drive, Earth City, Missouri 63045;
         3.       4341 Green Ash Drive, Earth City, Missouri 63045;
         4.       13527-31 Earth City Expressway, Earth City, Missouri 63045; 
                  and
         5.       230 Spring Street, N.W., Suite 111-GA, Atlanta, Georgia 30303.

E.       Inventory Locations for Star:

         1.       8223 N. Stemmons, Dallas, Texas 75247;
         2.       8700 Sovereign Row, Dallas, Texas 75247
         3.       2301 N. Broadway, Tyler, Texas 75701



                                     -16-