<PAGE>
                                       
                                   CONSENT
                                      TO
                              SECURITY AGREEMENT
                     (SUPPLEMENT TO FACTORING AGREEMENT)

                                 June 5, 1997

Republic Business Credit Corporation
1000 Wilshire Boulevard
Suite 400
Los Angeles, California 90017

Re: Yes Clothing Co.

Gentlemen:

     The undersigned acknowledge receipt of the Security Agreement 
(Supplement to Factoring Agreement) (the "Agreement") being entered into 
concurrently herewith by and between you and Yes Clothing Co. (the "Client").

     The undersigned acknowledge that their consent to the foregoing 
Agreement is not required, but the undersigned nevertheless do hereby consent 
to the foregoing Agreement and to the documents and agreements referred to 
therein and to all future modifications and amendments thereto, and any 
termination thereof.

                                       
                                       Sincerely yours,


                                   /s/ GUY ANTHOME
                                       ----------------------------------
                                       Guy Anthome


<PAGE>

                                            [LOGO] REPUBLIC BUSINESS CREDIT
                                       
                             SECURITY AGREEMENT
                    (SUPPLEMENT TO FACTORING AGREEMENT)

CLIENT: YES CLOTHING CO.

DATE: JUNE 5, 1997

This Security Agreement between Republic Business Credit Corporation 
("Republic") and the client named above ("Client"), is a supplement to the 
Factoring Agreement between Republic and Client dated May 15, 1994 (the 
"Factoring Agreement"). This Supplement is hereby incorporated into the 
Factoring Agreement and made a part thereof and is subject to the other 
terms, conditions, covenants and warranties thereof. All terms (including 
capitalized terms) used herein shall have the meanings ascribed to them in 
the Factoring Agreement, unless otherwise defined in this Supplement.

    1. GRANT OF SECURITY INTEREST. As security for the unconditional payment 
and performance when due of all of the Client's "Obligations" (as defined in 
Factoring Agreement), including without limitation, any and all liabilities, 
indebtedness, obligations, guarantees, representations, warranties and 
covenants now existing or hereafter arising under this Security Agreement or 
otherwise, the client hereby grants Republic a continuing security interest 
in all of Client's right, title and interest in the following types of 
property, whether now owned or existing or hereafter acquired or arising, and 
wherever located (collectively, the "Collateral"):

         (i) All inventory and goods, including without limitation, all 
inventory and goods held for sale or lease or to be furnished under contracts 
of service, raw materials, work in process, finished goods, goods in transit, 
advertising, packaging and shipping materials, and all designs, creations, 
patterns, styles, samples and all other materials, and supplies 
(collectively, the "Inventory");

         (ii) All documents, including without limitation, documents of 
transport, payment and title relating to any of the foregoing and all such 
other documents as are made available to Client for the purpose of ultimate 
sale or exchange of goods or for the purpose of loading, unloading, storing, 
shipping, transhipping, manufacturing, processing or otherwise dealing with 
goods in a manner preliminary to their sale or exchange;

         (iii) All rights, claims, rights of offset, rights of return, 
actions and causes of action, against any person, including without 
limitation, those arising out of the purchase by Client of any of its 
Inventory, and all rights of stoppage in transit, replevin, reclamation and 
rights of an unpaid vendor or as a lienor;

         (iv) All other collateral described in the Factoring Agreement; and

         (v) All proceeds, insurance proceeds, products and accessions of or 
to any and all of the foregoing, and all collateral and security for, and 
guarantees of, any and all of the foregoing, and all books and records 
relating to any and all of the foregoing (including without limitation, any 
and all microfilm, microfiche, computer programs and records, source 
materials, tapes and discs) and all equipment containing said books and 
records. The term "Collateral" as used in the Factoring Agreement shall be 
deemed to include all of the Collateral described above, for all purposes of 
the Factoring Agreement. Nothing herein shall be deemed to constitute a 
commitment or agreement on the part of Republic to make loans or other 
advances to Client or to permit Client to incur Obligations, all of which 
remain a matter of Republic's sole and absolute discretion.

    2. REPRESENTATIONS AND WARRANTIES.  Client represents and warrants to 
Republic that all of the following representations and warranties are 

                                       1

<PAGE>

true and correct on the date hereof and will continue to be true and correct 
throughout the term of this Security Agreement.

         (a) Client, if a corporation, is duly authorized, existing and in 
good standing under the laws of the jurisdiction of its incorporation. Client 
is and will continue to be qualified and licensed in all jurisdictions in 
which the nature of the business transacted by it, or the ownership or 
leasing of its property, make such qualification or licensing necessary, and 
Client has all the requisite power and authority to carry on its business as 
it is now, or may hereafter be, conducted.

         (b) The execution, delivery and performance of this Security 
Agreement, the Factoring Agreement and all other documents, instruments and 
agreements between Republic and the Client (collectively, the "Factoring 
Documents") have been duly authorized by all necessary corporate and other 
action, are enforceable against Client in accordance with their terms, and do 
not conflict with any instrument or agreement to which Client is a party or 
to which any of its property is subject.

         (c) Set forth in the heading to this Security Agreement is Client's 
true and correct name, and set forth on Exhibit A hereto is each prior name 
of Client and each fictitious name, trade name and trade style by which 
Client has been, or is now, known or has previously, or now, transacts 
business. Client shall provide Republic with ten (10) business days advance 
written notice before doing business under any other name, fictitious name, 
trade name or trade style. Client has complied, and will hereafter comply, 
with all laws relating to the conduct of business under, and the continuation 
of the right to use, a corporate, fictitious or trade name or trade style.

         (d) Client has places of business, and Inventory and other 
Collateral is kept only at the locations identified on Exhibit A hereto. 
Client will give Republic ten (10) business days' prior written notice of any 
discontinuance, or change in location, of any place of business, or the 
establishment of any new place of business, or any change in the location of 
the places where Inventory or other Collateral is or is to be kept.

         (e) Client is the sole owner of all of the Collateral, free and 
clear of all liens, claims, security interests and encumbrances, except a 
security interest in favor of Republic and/or Republic National Bank of New 
York ("Republic Bank") and/or Republic Bank California N.A.

         (f) None of the Collateral is affixed to any real property in such a 
manner, or with such intent, as to make it a fixture or a part of the real 
property. Client is not a lessee under any real property lease pursuant to 
which the lessor has obtained or may obtain any rights to the Collateral, and 
no such lease prohibits, restrains, or impairs Client's right to remove any 
Collateral from the leased premises, whether such removal is to be 
accomplished prior or subsequent to any default by Client under any such real 
property lease or any termination thereof. Client shall, whenever requested 
by Republic, cause the owner and lessor of any premises on which Collateral 
is located, and any person having a lien, mortgage or deed of trust on any 
such premises to execute and deliver to Republic, in form and substance 
acceptable to Republic, whatever waivers and subordinations that Republic in 
its sole discretion requires, so as to ensure that Republic's rights in and 
to the Collateral are, and will continue to be, prior and superior to the 
rights of any such owner, lessor or lienor. Client will keep in full force 
and effect, and will comply with all the terms of, any lease of real property 
where any of the Collateral now is or hereafter may be located.

         (g) All of Client's assets useful or necessary in the conduct of 
Client's business and all Collateral is in good working order and condition. 
Client will not use the Collateral or any of Client's other assets in any 
unlawful business or for any unlawful purpose and will not secrete or abandon 
the Collateral or any other assets. Client will immediately advise Republic 
in writing of any loss of, or material adverse change in the condition of any 
of the Collateral or of any of Client's other assets.

         (h) Client has complied, and will hereafter comply, with all 
provisions of all laws, rules and regulations relating to Client, including, 
but not limited to, those relating to environmental matters, hazardous and 
waste materials, Client's ownership of real or personal property, conduct or 
licensing of Client's business, payment and withholding of taxes, and payment 
of minimum wages and other matters relating to employment of Client's 
personnel.

         (i) There is no claim, litigation, proceeding or investigation 
pending or threatened by or against or affecting Client (or any basis 
therefor known to Client) which might result, either separately or in the 
aggregate, in any material adverse change in the business, prospects or 
condition of Client, or in any impairment in the ability or right of Client 
to carry on its business in substantially the same manner as it is now being 
conducted. Client will immediately inform Republic in writing of any claim, 
proceeding, litigation or investigation hereafter threatened or instituted by 
or against Client involving amounts in excess of $25,000.

         (j) Client has not, and will not, engage in any activity which 
constitutes or may constitute a pattern of racketeering activity within the 
meaning of, or may be illegal under, any statute of the United States or any 
other governmental authority, and Client has not, and will not, engage in any 
activity which may subject any of the Collateral or any of its other assets 
to any forfeiture or other adverse claim.

         (k) There is no fact which Client has not disclosed to Republic in 
writing which could materially adversely affect the properties, business or 
financial condition of Client or any of the Collateral or which it is 
necessary to disclose in order to keep the foregoing representations and 
warranties from being misleading.

                                       2

<PAGE>

    3. COVENANTS. Client shall at all times comply with the following 
covenants, at its sole cost:

         (a) Client will have and maintain, at its sole cost and expense, 
insurance at all times with respect to all Inventory and all other insurable 
Collateral, against risk of fire (including extended coverage), theft, and 
all other usual risks and such special risks as Republic may designate and in 
the case of motor vehicles, collision insurance, all such insurance to be in 
such form and amounts, for such periods and written by such companies as may 
be satisfactory to Republic, such insurance proceeds to be payable to 
Republic and Client as their interest may appear; and all policies of 
insurance shall provide for a minimum of twenty (20) days prior written 
cancellation notice to Republic, and Client shall provide Republic with 
proof, satisfactory to it, of full payment of all premiums thereon. All such 
policies shall have endorsements thereon designating Republic as a secured 
party thereunder and shall have lender's loss payee endorsements in favor of 
Republic in such form as Republic may require. In addition, at the request of 
Republic, the originals of such policies shall be delivered to and held by 
Republic. In the event of failure to provide insurance as herein provided, 
Republic may, at its option, but without any obligation, obtain such 
insurance and Client shall pay to Republic, on demand, the cost thereof. The 
cost of any such insurance which Republic may obtain shall be added to the 
Obligations. Client's liability to Republic hereunder shall not be affected, 
impaired, released, or discharged, in whole or in part, by reason of any 
loss, theft, or destruction of, or depreciation or damage to, any Collateral, 
regardless of the cause of any such loss, theft, destruction, depreciation or 
damage, or absence or non-receipt of insurance proceeds and whether such 
non-receipt of insurance proceeds is caused by the failure of the insurer to 
pay claims or otherwise.

         (b) So long as any of the Obligations are outstanding, Client shall 
maintain Collateral so that the total "value" of the Collateral shall at all 
times be not less than 150% of the total amount of the outstanding 
Obligations, and, for purposes of this covenant, the term "value" with 
respect to the Inventory shall mean the lower of wholesale cost or wholesale 
market value. Client acknowledges that the foregoing covenant is a material 
part of the consideration to Republic for entering into this Security 
Agreement, and extending credit pursuant thereto, and that one of the reasons 
for the foregoing covenant is to provide an equity cushion and adequate 
protection to Republic caused by the delays, difficulty and expense which can 
occur in liquidation of the Collateral, and probability of rapid 
deterioration in the value of the Collateral in a liquidation, and other 
circumstances.

         (c) Client shall not sell, exchange, trade, lease or otherwise 
transfer any of the Inventory, or any other Collateral, without Republic's 
specific prior written consent, except for sales of finished Inventory for 
fair consideration in the ordinary course of business, and not in 
satisfaction of any pre existing debt.

         (d) Client shall: (i) perform any and all steps requested by 
Republic to perfect its security interest in the Inventory and other 
Collateral, such as placing and maintaining signs, appointing custodians and 
transferring Inventory to warehouses under the control of Republic or its 
designee. If any Inventory is in the possession or control of Client's agents 
or processors, Client shall notify such agents or processors of Republic's 
security interest therein, and upon request instruct them to hold all such 
Inventory for Republic's account and subject to Republic's instructions; (ii) 
execute and deliver to Republic, each month, or at any time upon Republic's 
request, a written certification of Inventory, in such form as Republic may 
from time to time request; (iii) allow Republic through any of its officers 
or agents, at all reasonable times, to examine and inspect the Inventory and 
any of the other Collateral and to examine, inspect, utilize, and make copies 
and/or extracts from all of Client's books and records, relating to the 
Collateral; (iv) promptly notify Republic in writing of any change of 
Client's officers, directors and key employees, a death of any co-partner or 
joint venturer (if Client is a partnership or joint venture), any sale or 
purchase out of the regular course of Client's business, and any material 
adverse change in the business or financial affairs of Client; (v) make 
available Client and its officers, employees, and agents and Client's books, 
computer discs, runs and printouts, records and files to the extent that 
Republic may deem necessary in order to prosecute or defend any such suit or 
proceeding relating to Client or the Collateral; (vi) pay when due all 
brokers' fees, freight, cargo insurance, demurrage charges, warehousing 
and/or storage charges, duties, taxes and assessments upon the Collateral, or 
for its use or operation, or upon the proceeds thereof, or upon this Security 
Agreement, or upon any instrument or instruments evidencing the Obligations. 
Republic may, at its option, but without obligation and without waiving any 
of its rights and remedies, discharge any of the foregoing, and Client agrees 
to reimburse Republic on demand for any payment made or any expense incurred 
by Republic pursuant to the foregoing authorization; and any such payment 
made or expense incurred shall be deemed to be Obligations.

    4. EVENTS OF DEFAULT; REMEDIES.

         (a) The occurrence of any of the following events with respect to 
Client or any obligor, maker, endorser, acceptor, surety or guarantor of, or 
any other party to, any of the Obligations or the Collateral (each and all of 
whom, including Client, are included in the term "Obligor" as hereinafter 
used in this Section 4) shall constitute a "default" under this Security 
Agreement: failure to pay or perform when due any of the Obligations 
(including without limitation, any breach of the Factoring Agreement or this 
Security Agreement or any other present or future instrument or agreement 
with Republic); failure to pay when due any sum payable 

                                       3

<PAGE>

with respect to any of the Collateral; the occurrence of any default or event 
of default under or as specified in the Factoring Agreement with respect to 
the Client or any other Obligor; failure of any Obligor, after demand, to 
furnish any financial information to Republic or to permit Republic to 
inspect any books or records of any Obligor; any loss, theft, or substantial 
damage to or destruction of any or all of the Collateral; any levy, 
assessment, attachment, seizure, lien or encumbrance for any cause or reason 
whatsoever, shall be made upon all or any part of the Collateral or any other 
asset of Client; institution against Client of any criminal proceedings, 
including without limitation, any criminal proceedings with respect to which 
forfeiture of any or all of the property of the Client is a penalty provided 
by law; if, in the judgment of Republic, any impairment occurs in the value 
of the Collateral or in the financial responsibility of any Obligor or in the 
prospect of payment or performance of any of the Obligations; or death of any 
guarantor or revocation or termination of any guarantee of any or all of the 
Obligations or the Collateral; or Republic, acting in good faith and in a 
commercially reasonable manner, deems itself insecure. Upon the occurrence of 
any such default, all of the Obligations shall, without notice or demand, at 
the election of Republic, forthwith become and be immediately due and 
payable, notwithstanding any time or credit allowed under any of the 
Obligations, or under any instruments evidencing the same.

         (b) Upon the occurrence of any default and at any time thereafter, 
Republic may, at its option, do any or all of the following: (i) cease 
advancing money or extending credit to or for the benefit of Client; (ii) 
exercise all of the rights and remedies granted to secured parties by the 
provisions of the applicable Uniform Commercial Code and all other applicable 
law; (iii) institute legal proceedings to foreclose upon the security 
interests granted in and by the Factoring Agreement and this Security 
Agreement, to recover judgment for all Obligations, and to collect the same 
out of any of the Collateral; (iv) institute legal proceedings for the 
recovery of possession of any or all of the Collateral and for the specific 
performance of any covenant or agreement herein contained or in aid of the 
execution of any power herein granted, and Client waives any bond or surety 
otherwise required in connection therewith, any demand for possession prior 
to the institution of any such proceedings and any requirement that Republic 
not dispose of any of the Collateral until after trial or judgment; (v) 
institute legal proceedings for sale, under the judgment or decree of any 
court of competent jurisdiction, of any of the Collateral; (vi) institute 
legal proceedings for the appointment of a receiver pending foreclosure 
hereunder or the sale of any of the Collateral under the order of a court of 
competent jurisdiction or under other legal process, and Client hereby 
consents to the appointment of a receiver in any such proceedings and waives 
any and all bonds in connection therewith; (vii) personally or by agents or 
representatives or employees or attorneys, enter any premises where 
Collateral is or may be, without hindrance, and take possession of any part 
or all of the Collateral at any time, wherever the same may be, with or 
without process of law and without being responsible for loss or damage; keep 
or store any or all of the Collateral on Client's premises and remain on such 
premises or cause a custodian to remain thereon, in exclusive control 
thereof, without charge, for so long as Republic deems necessary; process or 
complete the processing, manufacturing or repair of any or all of the 
Collateral, and in connection therewith Republic shall have the exclusive 
right to utilize any or all of the Client's premises, machinery, equipment, 
fixtures, and other assets without charge; and Republic may demand, sue for, 
collect or receive any money or property at any time payable or receivable on 
account of or in exchange for, or make any compromise or settlement deemed 
desirable with respect to, any of the Collateral and/or sell or dispose of 
all or any part of the same, free from any and all claims of Client or of any 
other party claiming by, through or under Client, at law or in equity, at one 
or more public or private sales, in such place or places (including without 
limitation, the premises of Client), in lots or in bulk, at such time or 
times, in such order, and upon such terms as Republic shall determine in its 
sole discretion, in its condition at the time Republic obtains possession or 
after further processing or repair, with or without any previous demand or 
notice to Client or advertisement of any such sale or other disposal except 
as may be required by law. Republic shall have the right to conduct such 
disposition on Client's premises without charge for such time or times as 
Republic deems fit, or on Republic's premises, or elsewhere and the 
Collateral need not be located at the place of disposition. Republic may 
directly or through any affiliated company purchase or lease any Collateral 
at any such disposition and, if permissible under applicable law, at any 
private disposition. Any sale or other disposition of Collateral shall not 
relieve Client of any liability Client may have if any Collateral is 
defective as to title or physical condition or otherwise at the time of sale. 
The power of sale hereunder shall not be exhausted by one or more sales, and 
Republic may from time to time adjourn any sale to be made pursuant to this 
Section, by oral announcement at the time of the sale, without any further 
notice or publication. If Republic shall demand possession of the Collateral 
or any part thereof pursuant to this Security Agreement, Client shall, at its 
own expense, forthwith cause such Collateral or any part thereof designated 
by Republic to be assembled and made available or delivered to Republic at 
any place reasonably designated by Republic. In the event that any mandatory 
requirement of applicable law shall obligate Republic to give prior written 
notice to Client of any of the foregoing acts, Client hereby covenants and 
agrees that a notice sent to it, in writing, by first class or certified 
United States mail, addressed to it at its address set forth below, and 
deposited in the United States mail at least five (5) days before the date of 
any such act, shall be deemed to be reasonable notice of such act and, 
specifically, reasonable notification of the time and place of any public or 
private sale hereunder 

                                       4

<PAGE>

and reasonable notification of the time after which 
any intended sale or disposition thereof is to be made. Any and all 
attorneys' fees, expenses, costs, liabilities and obligations incurred by 
Republic with respect to the foregoing shall be added to and become part of 
the Obligations.
 
         (c) Client and Republic agree that the following conduct by Republic 
with respect to any disposition of Collateral shall conclusively be deemed 
commercially reasonable (but other conduct by Republic including, but not 
limited to, Republic's use in its sole discretion of other or different 
times, places and manners of noticing, and conducting any disposition of 
Collateral shall not be deemed unreasonable): Any public or private 
disposition as to which on no later than the fifth calendar day prior thereto 
written notice thereof is mailed or personally delivered to Client and, with 
respect to any public disposition, on no later than the fifth calendar day 
prior thereto notice thereof describing in general, non-specific terms the 
Collateral to be disposed of is published in the Los Angeles Daily Journal, 
the Metropolitan News or the Los Angeles Times; which is held in Los Angeles 
County at any place designated by Republic with or without the Collateral 
being present and which commences at any time between 8:00 A.M. and 5:00 P.M. 
Without limiting the generality of the foregoing, Client expressly agrees 
that, with respect to any disposition of accounts, receivables and general 
intangibles (collectively "Intangibles") it shall be commercially reasonable 
for Republic to direct any prospective purchaser thereof to ascertain 
directly from Client any and all information (and Republic shall not be 
required to maintain records of, or answer any inquiries) concerning the 
Intangibles offered for disposition including, but not limited to, the terms 
of payment, aging and delinquency, if any, of the Intangibles, the financial 
condition of any maker or guarantor thereof or debtor thereunder, any 
collateral therefor and the condition and location of the goods, if any, that 
are the subject of any of the Intangibles.

         (d) All proceeds realized as the result of any disposition of the 
Collateral shall be applied by Republic first to the costs, expenses, 
liabilities, obligations and attorneys' fees incurred by Republic in the 
exercise of its rights under this Security Agreement, second to the interest 
due upon any of Client's Obligations and third to the principal of Client's 
Obligations in such order as may be determined by Republic in its sole 
discretion. In the event that, as a result of the disposition of any of the 
Collateral, Republic directly or indirectly enters into a credit transaction 
with any third party, Republic shall have the option, exercisable at any 
time, in its sole discretion, of either reducing the Obligations by the 
principal amount of such credit transaction or deferring the reduction 
thereof until the actual receipt by Republic of cash therefor from such third 
party. The surplus, if any, shall be paid to Client or other persons legally 
entitled thereto; if any deficiency shall arise, Client shall remain liable 
to Republic therefor.

    5. FURTHER ASSURANCES; POWER OF ATTORNEY. Client will at any time or from 
time to time, upon request of Republic, sign such financing statements, 
continuation statements and amendments thereto and such trust receipts, 
security agreements and other agreements or instruments as Republic 
determines to be necessary or desirable to preserve and protect any of 
Republic's rights hereunder. Client hereby agrees to pay all filing fees and 
reimburse Republic for all costs and expenses of any kind incurred in any way 
in connection with the Collateral. Client hereby grants to Republic an 
irrevocable power of attorney coupled with an interest, authorizing Republic 
(through any of its officers, employees, attorneys or agents), at any time 
and from time to time, at its option but without obligation, with or without 
notice to Client, and at Client's sole expense, to do any or all of the 
following, in Client's name or otherwise: (i) execute, deliver, present, 
file, record, endorse (with full recourse to Client), assign, and take 
control of any and all warehouse, shipping, dock and other receipts, letters 
of credit (including without limitation of the foregoing, applications for 
letters of credit, red clause letters of credit, agreements to letters of 
credit, letters of indemnity to steamship companies, ship-side bonds, air 
releases to airline companies and/or freight forwarders and indemnification 
agreements in favor of issuers of letters of indemnity to steamship 
companies, ship-side bonds and air releases, and waivers of discrepancies in 
documentation), notes, tax refund checks or warrants from any and all 
governmental agencies, instruments, acceptances, checks, drafts, money 
orders, customs duty drawbacks, chattel paper, invoices, trust receipts, 
bills of lading, title documents, and evidence of indebtedness, and any and 
all financing statements, continuation financing statements, financing 
statement amendments, security agreements, assignments, certificates of 
title, application for vehicle title, affidavits, reports, notices, 
schedules, claims, proofs of claim in bankruptcy and all other documents and 
instruments, and take all such other and further action, as Republic may, in 
its sole and absolute discretion, deem advisable in order to perfect, 
maintain, improve or protect Republic's security interest in the Collateral, 
or to carry out or enforce any of Republic's rights and remedies under 
Factoring Agreement and/or this Security Agreement, or to collect any sums 
owed to Republic or for which Client may be or become liable, or to carry out 
or consummate any transaction contemplated by this Security Agreement and any 
documents or instruments executed in connection herewith or relating hereto; 
(ii) pay, contest or settle any lien, charge, encumbrance, security interest 
and adverse claim in or to any of the Collateral, or any judgment based 
thereon, or otherwise take any action to terminate or discharge the same; 
(iii) grant extensions of time to pay, compromise and/or settle any claims 
for less than face value, and execute and deliver all releases and other 
documents in connection therewith; (iv) pay any sums required on account of 
Client's taxes or to secure the release of any liens therefor, or both; 

                                       5

<PAGE>

         (v) upon the occurrence of any default, to receive, and open and 
examine all mail addressed to Client, and in the exercise of such right, 
Republic shall have the right, in the name of Client, to notify the Post 
Office authorities to change the address for the delivery of mail addressed 
to Client to such other address as Republic may designate, including without 
limitation, Republic's own address, in which event Republic shall turn over 
to Client all of such mail not relating to the Collateral; (vi) upon any 
default, direct any financial institution to pay to Republic all monies on 
deposit by Client with said financial institution, regardless of any loss of 
interest, charge or penalty as a result of payment before maturity; (vii) 
settle and adjust, and give releases with respect to, any insurance claim 
that relates to any of the Collateral, and obtain payment therefore directly 
to Republic, and make all determinations and decisions with respect to any 
such insurance and any such insurance claim, and endorse Client's name on any 
check, draft, instrument or other item of payment or the proceeds of such 
insurance; and (viii) take any action or pay any sum required of Client 
pursuant to this Security Agreement and any other present or future 
agreements. Any and all sums paid and any and all costs, expenses, 
liabilities, obligations, accounting fees, adjustors' fees, consulting fees, 
appraisal fees, and attorneys' fees incurred by Republic with respect to the 
foregoing shall be added to and become part of the Obligations and shall be 
payable on demand. Republic shall have no liability to Client for any action 
taken or omitted to be taken by it pursuant to the foregoing power of 
attorney. In no event shall Republic's rights under this Security Agreement 
or any other documents or agreements be deemed to indicate that Republic is 
in control of the Client or Client's business or management or that Republic 
has control over the daily management functions or operating decisions of 
Client.

    6. GENERAL.

         (a) Republic shall not be deemed to have waived any of its rights 
hereunder or under the Factoring Agreement or any other agreement, instrument 
or paper signed by Client unless such waiver is in writing and signed by 
Republic and specifically refers to the right being waived. No delay or 
omission on the part of Republic in exercising any right shall operate as a 
waiver of such right or of any other right. A waiver upon any occasion shall 
not be construed as a bar or waiver of any right or remedy on any future 
occasion. All of the rights and remedies of Republic, under Factoring 
Agreement, this Security Agreement and under any other agreement, instrument 
or document, shall be cumulative and may be exercised singularly or 
concurrently.

         (b) Client hereby assents to any agreement Republic may elect to 
enter into with any other party providing for the sharing or the 
participation of said party with Republic in the Obligations and/or the 
Collateral or any realizations thereon. Republic shall have no obligation to 
give any credit references for or with respect to Client to any third party.

         (c) This Security Agreement shall continue in full force and effect 
until all of the Obligations have been paid and performed in full and the 
Factoring Agreement has been terminated. Notwithstanding any termination of 
this Security Agreement and payment and performance of all Obligations, 
Republic shall not be required to deliver a termination statement with 
respect to any financing statement filed by it until Client has executed and 
delivered to Republic a General Release, in form acceptable to Republic, 
whereby Client releases any and all known and unknown claims of Client 
against Republic.

         (d) All notices to be given hereunder shall be in writing and may be 
served either personally or by telecopy, or by depositing the same in the 
United States mail, first-class postage prepaid, or ordinary, registered or 
certified mail addressed to Republic or Client at the addresses shown in the 
Factoring Agreement or herein, or at any other address as shall be designated 
by one party in a written notice to the other party. Any such notice shall be 
deemed to have been given upon delivery in the case of notices personally 
delivered or sent by telecopy, or at the expiration of two (2) business days 
following the deposit thereof in the United States mail (except that any 
notice of disposition of Collateral pursuant to Section 4 above that is 
mailed shall be deemed given at the time of deposit thereof in the United 
States mail).

         (e) Client shall defend, indemnify and hold Republic, and its 
directors, officers, employees, agents, attorneys and affiliates harmless 
from and against any and all claims, costs (including without limitation, 
attorneys' fees), losses, demands, actions, causes of action, lawsuits, 
damages, penalties, fines, judgments and liabilities of any kind or nature in 
any manner relating to Client's business, assets or operations, or otherwise 
relating to Client, including (but not limited to) any of the foregoing 
arising from any breach of any representation, warranty, covenant or 
provisions contained in this Security Agreement or any other document or 
agreement between Client and Republic, or any other transaction contemplated 
thereby or relating hereto or thereto, and including (but not limited to) any 
of the foregoing arising from any law, rule or regulation relating to 
hazardous or toxic materials or waste or the environment, or relating to the 
withholding or payment of income or other taxes, or relating to wages or 
hours of Client's employees. Defense of any action or proceeding with respect 
to which Republic or others are entitled to indemnity hereunder shall be by 
attorneys of Republic's choice, at Client's expense. This indemnity agreement 
shall continue in full force and effect notwithstanding any termination of 
this Security Agreement or termination of the security interests granted 
herein.

         (f) As used in this Security Agreement, the term "affiliate" of any 
party shall mean and include any person, firm or corporation controlling, 

                                       6

<PAGE>

controlled by or under common control with such party, but in no event shall 
Republic be deemed to be an "affiliate" of Client for purposes of this 
Security Agreement or for any other purpose whatsoever.  As used in this 
Security Agreement, the term "Client" shall be deemed to include the 
individual or individuals, association, partnership or corporation named 
herein as "Client," and (a) any successor, and any association, partnership, 
corporation or other person to which all or substantially all of the business 
or assets of Client shall have been transferred, and (b) in the case of a 
partnership, any general or limited partnership which shall have been created 
by reason of, or continue in existence after the admission of any new partner 
or partners therein, or the dissolution of the existing partnership by, or 
the condition thereof after the death, resignation or other withdrawal of any 
partner.

         (g) Client shall reimburse Republic for all attorneys' fees, 
accounting fees, and investigation fees, and for all filing, recording, 
publication, search and other costs and expenses which Republic may incur 
pursuant to or in connection with this Security Agreement or any transaction 
contemplated hereby or with respect to any of the Collateral or in connection 
with the defense or enforcement of its rights, remedies and interests 
(whether or not any suit is brought or judgment obtained). Without limiting 
the generality of the foregoing, Client will pay all such expenses and 
attorneys' fees incurred by Republic in connection with the enforcement of 
payment and performance of all Obligations and in any litigation relating to, 
or affecting this Security Agreement, and in any case or proceeding under any 
provision of the Bankruptcy Code (including without limitation, Chapter 7 or 
11, thereof), or any successor statute thereto, the negotiating of this 
Security Agreement and any other agreements or documents relating to Client, 
the enforcement of any of its rights; the filing or prosecution of a claim in 
any action or proceeding (including without limitation, any probate claim, 
bankruptcy claim, third-party claim, secured creditor claim or reclamation 
complaint); the protection of, obtaining possession of, or enforcement of its 
security interest in the Collateral, or the representation of Republic in any 
litigation with respect to Client or its affairs. All attorneys' fees and 
costs to which Republic may be entitled pursuant to this Section shall 
immediately become part of Client's Obligations.

         (h) If this Security Agreement be signed by more than one party, 
their obligations hereunder shall be joint and several. This Security 
Agreement does not create, and shall not be construed as creating, any rights 
enforceable by any person not a party to this Security Agreement. If any 
provision of this Security Agreement is held by a court of competent 
jurisdiction to be invalid, illegal or unenforceable, the remaining 
provisions of this Security Agreement shall nevertheless remain in full force 
and effect.

         (i) Neither Republic, nor any of its directors, officers, employees, 
agents, attorneys or any other person affiliated with or representing 
Republic shall be liable for any claims, demands, losses or damages, of any 
kind whatsoever, made, claimed, incurred or suffered by the undersigned or 
any other party through the ordinary negligence of Republic, or any of its 
directors, officers, employees, agents, attorneys or any other person 
affiliated with or representing Republic.

         (j) This Security Agreement and the Factoring Agreement, and the 
other written documents and instruments between Republic and Client set forth 
in full the terms of agreement between the parties, are intended as the full, 
complete and exclusive contract governing the relationship between the 
parties, and supersede all prior and contemporaneous oral discussions, 
promises, representations, warranties, agreements and understandings between 
the parties. This Security Agreement may not be modified or amended, nor may 
any rights hereunder be waived, except in a writing signed by the party 
against whom enforcement of the modification, amendment or waiver is sought. 
No course of dealing between the parties, no usage of trade, and no parol or 
extrinsic evidence of any nature shall be used or be relevant to supplement, 
explain or modify any term or provision of this Security Agreement or any 
supplement or amendment thereto. This Security Agreement shall be construed 
in an even-handed manner and not strictly against or in favor of any party 
hereto, nor shall any ambiguities in this Security Agreement be construed 
strictly against or in favor of any party hereto.

         (k) Client agrees that any claim or cause of action by Client 
against Republic, or any of Republic's directors, officers, employees, 
agents, accountants or attorneys, based upon, arising from, or relating to 
this Security Agreement, or any other present or future agreement, or any 
other transaction contemplated hereby or thereby or relating hereto or 
thereto, or any other matter, cause or thing whatsoever, whether or not 
relating hereto or thereto, occurred, done, omitted or suffered to be done by 
Republic, or by Republic's directors, officers, employees, agents, 
accountants or attorneys, whether sounding in contract or in tort or 
otherwise, shall be barred unless asserted by Client by the commencement of 
an action or proceeding in a court of competent jurisdiction by the filing of 
a complaint within twelve months after the first act, occurrence or omission 
upon which such claim or cause of action, or any part thereof, is based and 
service of a summons and complaint on an officer of Republic or any other 
person authorized to accept service of process on behalf of Republic, within 
thirty (30) days thereafter. Client agrees that such twelve-month period of 
time is a reasonable and sufficient time for a Client to investigate and act 
upon any such claim or cause of action. The twelve-month period provided 
herein shall not be waived, tolled, or extended except by a specific written 
agreement of Republic. This provision shall survive any termination of this 
Security Agreement or any other agreement.

                                       7

<PAGE>

         (l) As a material part of the consideration to Republic for entering 
into this Security Agreement, Client agrees that all actions and proceedings 
arising out of or relating to this Security Agreement or to any transaction 
in connection herewith shall, at the option of Republic, be litigated 
exclusively in courts located in the State of California, and that, at the 
option of Republic, the exclusive venue therefore shall be in Los Angeles 
County, California; Client hereby consents and submits to the jurisdiction of 
any such court and hereby waives personal service of any summons and 
complaint or other process or papers to be issued therein and hereby agrees 
that service of such summons and complaint or process may be made by 
registered or certified mail addressed to Client at its address as set forth 
below; failure on the part of Client to appear or answer within thirty (30) 
days after the mailing of such summons, complaint or process shall constitute 
a default entitling Republic to enter a judgment or order as demanded or 
prayed for therein. Client further waives any right to transfer or change the 
venue of any such action or proceeding. Client, in any litigation in which 
Republic and Client shall be adverse parties, waives the right to interpose 
any defense based upon any Statute of Limitations or any claims of laches and 
any set-off or counterclaim of any nature or description. This Security 
Agreement is being entered into in the State of California. This Security 
Agreement shall be governed by the internal laws (and not the conflict of law 
rules) of the State of California.

         (m) REPUBLIC AND CLIENT EACH HEREBY WAIVE THE RIGHT TO TRIAL BY JURY 
IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF, OR IN ANY WAY 
RELATING TO: (i) THIS SECURITY AGREEMENT OR THe FACTORING AGREEMENT; OR (ii) 
ANY OTHER PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN REPUBLIC AND 
CLIENT; OR (iii) ANY CONDUCT, ACTS OR OMISSIONS OF REPUBLIC OR CLIENT OR ANY 
OF THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER 
PERSONS AFFILIATED WITH REPUBLIC OR CLIENT; IN EACH OF THE FOREGOING CASES, 
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.

Client:

YES CLOTHING CO.

   /s/ GUY ANTHOME
By ------------------------------------
                         Chairman & CEO

   /s/ JEFFREY BUSSE
By ------------------------------------
                              Secretary


Republic:

REPUBLIC BUSINESS CREDIT CORPORATION

   /s/ DAVID LANDY
By ------------------------------------
                Senior (Vice) President

                                       8

<PAGE>

                                   EXHIBIT A

Client's prior names, fictitious names, trade names and trade styles, past 
and present (Section 2(c)):

Carol Ames, Inc., Carol Ames, Michael B, Elegant Miss, Tangerine, 
Pinc-Coconuts, Sedan, Misfits-Men, GMS-Junior, GMS-Men, Body Glove, Audience, 
CS Sportswear, Yes Wear, Into Reality,

Locations of Collateral (Section 2(d)):

1380 W. Washington Blvd.
Los Angeles, CA 90007

                                       9

<PAGE>

                       AMENDMENT TO FACTORING AGREEMENT

                                 June 5, 1997

Republic Business Credit Corporation
1000 Wilshire Boulevard, Suite 400
Los Angeles, California 90017

Gentlemen:

     Reference is made to the Factoring Agreement between us dated May 15, 
1994 (the "Factoring Agreement"). 

     This will confirm that the Factoring Agreement is amended as follows, 
effective June 1, 1997:

     1. CHANGE IN INTEREST RATE. The first sentence of Section 5.B. is 
amended to read as follows: "All interest charges to our account shall be at 
2% above the reference rate of Republic National Bank of New York ("Republic 
Reference Rate"), computed on the basis of a 360-day year for the actual 
number of days elapsed and charged to our account at the end of each month."

     This Amendment, the Factoring Agreement, any prior written amendments to 
the Factoring Agreement signed by you and us, and the other written documents 
and agreements between you and us set forth in full all of your and our 
representations and agreements with respect to the subject matter hereof and 
supersede all prior discussions, representations, agreements and 
understandings between us with respect to the subject hereof. As herein 
expressly amended, all of the terms and provisions of the Factoring Agreement 
(as the same may have been previously amended), and all other documents and 
agreements between you and us shall continue in full force and effect and the 
same are hereby ratified and confirmed. 

     Please confirm the foregoing by signing the enclosed copy of this letter 
and returning it to us.  


                                       Sincerely yours,

                                       YES CLOTHING CO.


                                       By /s/ GUY ANTHOME
                                          -------------------------------------
                                       Title Chairman & CEO
                                             ----------------------------------

                                       

<PAGE>

ACCEPTED AND AGREED:

REPUBLIC BUSINESS CREDIT CORPORATION


By /s/ DAVID LANDY
   ------------------------------------
Title Senior Vice President
      ---------------------------------



                                    CONSENT

The undersigned guarantor acknowledges that his consent is not required to 
the foregoing Amendment, but the undersigned nevertheless does consent to the 
foregoing Amendment.


/s/ GUY ANTHOME
---------------------------------------
Guy Anthome

                                       2