Document:

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                                                                 EXHIBIT 10.53.1

                             TERMINATION AGREEMENT
                             ---------------------

     THIS TERMINATION AGREEMENT (this "Agreement"), dated as of March 29, 2002,
is made by and between STANDARD CHARTERED BANK (the "Bank") and TARRANT APPAREL
GROUP dba FASHION RESOURCE, a California corporation ("Tarrant")

                                  WITNESSETH:

     WHEREAS, the Bank and Tarrant are parties to that certain Security
Agreement, dated November 1, 1996, a copy of which is attached hereto as Exhibit
A (the "Security Agreement"); and

     WHEREAS, the Bank and Tarrant desire to terminate the Security Agreement;

     NOW, THEREFORE, In consideration of the premises and the respective
representations, warranties, covenants and other agreements set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

     1. Recitals. The recitals and exhibits to this Agreement are incorporated
        --------
herein and, by this reference, made part a part hereof as if fully set forth at
length herein.

     2. Authorization. Each of the parties hereto represents and warrants that
        -------------
it has full corporate power and authority to enter into this Agreement.

     3. Termination. The Security Agreement (other than Section 4L. of the
        -----------
Security Agreement which, notwithstanding anything to the contrary contained
herein, shall remain in full force and effect and shall survive the execution of
this Agreement) is hereby terminated in all respects and is of no further force
and effect.

     4. Severability. If any provision of this Agreement is invalid and
        ------------
unenforceable in any jurisdiction, then, to the fullest extent permitted
by law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction, (ii) such provision shall be ineffective, but only to the
extent of such invalidity and unenforceability and (iii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.

     5. Jurisdiction. The rights of the parties hereto shall be governed by and
        ------------
construed according to the laws of the State of California.

     6. WAIVER OF JURY TRIAL. THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
        --------------------
INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT AND AGREE THAT ANY SUCH
ACTION OR PROCEEDINGS SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
TARRANT REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF THE BANK
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WILL

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NOT, IN THE EVENT OF ANY LITIGATION, SEEK TO ENFORCE THIS WAIVER OF JURY TRIAL.
TARRANT ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
IN RELIANCE ON, AMONG OTHER THINGS, THE PROVISIONS OF THIS PARAGRAPH.

     7. Counterparts. This Agreement may be executed in any number of
        ------------
counterparts, all of which taken together shall constitute one and the same
instrument and either of the parties hereto may execute this Agreement by
signing such counterparts.

     8. Expenses. Tarrant and its affiliate, Tarrant Company Limited, shall be
        --------
jointly and severally responsible for and shall pay any and all fees and
expenses incurred by Tarrant and the Bank in connection with the preparation,
negotiation and execution of this Agreement.

                         [SIGNATURES ON THE NEXT PAGE]

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     IN WITNESS WHEREOF, each of the parties hereto has executed this or has
caused this Agreement to be executed on its behalf by a representative duly
authorized, all as of the date first above set forth.

BANK:

STANDARD CHARTERED BANK                For STANDARD CHARTERED BANK

By                                     /s/ Illegible
   ------------------------------      --------------------------------
Name                                                            Manager
     ----------------------------
Title
      ---------------------------

TARRANT:

TARRANT APPAREL GROUP dba
FASHION RESOURCE, a California
corporation

By  /s/ P CHOW
   ------------------------------
Name  P CHOW
Title  CFO

The undersigned hereby acknowledges and agrees to the terms set forth above as
of this 29th day of March 2002.

TARRANT COMPANY LIMITED

By  /s/ Illegible
   ------------------------------
Name  Illegible
     ----------------------------
Title   CFO

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                                   EXHIBIT A
                                   ---------

                                  See attached

<PAGE>

                               SECURITY AGREEMENT
                               ------------------

     This Security Agreement is made and entered into as of this 1ST day of
NOVEMBER, 1996 by and between STANDARD CHARTERED BANK (the "Bank") and TARRANT
APPAREL GROUP dba FASHION RESOURCE, a California corporation (the "Debtor").

     1. Grant of Security Interest. For value received, the Debtor hereby
        --------------------------
grants to the Bank a first priority (unless expressly noted otherwise herein)
security interest in and to all of the following property, whether now owned or
existing or hereafter arising, created or acquired (hereinafter collectively
referred to as the "Collateral").

          A. Inventory. All inventory now owned or hereafter acquired by the
             ---------
Debtor from Tarrant Co. Ltd. ("Tarrant"), or its affiliates, including but not
limited to, all raw materials, work in progress, finished goods, merchandise,
parts and supplies of every kind and description, including inventory
temporarily out of the Debtor's custody or possession, together with all returns
on accounts, now acquired or to be acquired by Debtor (the "Inventory").

          B. Books and Records. All now existing or hereafter made, compiled or
             -----------------
acquired books and records, including electronic data, relating to the foregoing
Inventory and information storage device and media containing such books and
records ("Books and Records").

     The Bank's security interest in the Collateral shall be a continuing lien
and shall include all proceeds and products of the Collateral including, but not
limited to, the proceeds of any insurance, indemnity, warranty or guaranty
payable to the Debtor from time to time thereon.

     2. Security.
        --------

          (i) The security interest and assignment of rights contained herein is
     granted to secure the payment and performance of:

               (a) any and all indebtedness, obligations and liabilities of
               Debtor to Bank evidenced by or arising under the facility letter
               dated February 22, 1996, by and between Tarrant and Bank (the
               "Facility Letter") now or hereafter existing, all renewals,
               extensions and modifications thereto, together with all fees
               incurred thereon ("Indebtedness") including Indebtedness which
               arose pursuant to said Facility Letter on or after May 8, 1996.

               (b) all costs and expenses reasonably incurred by Bank to obtain,
               preserve, perfect and enforce the security interest granted
               hereby and all other liens and security interests securing
               payments of the Indebtedness, to collect the Indebtedness and to
               maintain, preserve and collect the

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               Collateral, including, but not limited to, taxes, assessments,
               insurance premiums, repairs, reasonable attorneys' fees and legal
               expenses, rent, storage charges, advertising costs, brokerage
               fees and expenses of sale.

               (c) each and every covenant and condition contained in this
               Security Agreement.

          (ii) Prior to or concurrently with the execution and delivery of this
     Security Agreement, the Company shall file such financing statements and
     other documents in such offices as the Bank may reasonably request to
     perfect the security interests granted by this Security Agreement.

     3. Debtor's Representations and Warranties. The Debtor hereby makes the
        ---------------------------------------
following representations and warranties to the Bank, which representations and
warranties are continuing.

          A. Status. If the Debtor is other than an individual who is not
             ------
conducting business as a sole proprietorship, the Debtor is a corporation duly
organized and validly existing under the laws of the State of California and is
properly licensed, qualified to do business and in good standing in, and, where
necessary to maintain the Debtor's rights and privileges, has complied with the
fictitious name statute of every jurisdiction in which the Debtor is doing
business.

          B. Authority. The execution, delivery and performance by the Debtor of
             ---------
this Security Agreement and any document, instrument or agreement required
hereunder have been duly authorized and do not and will not: (i) violate any
provision of any law, rule, regulation, writ, judgment or injunction presently
in effect affecting the Debtor; (ii) result in a breach of or constitute a
default under any material agreement to which the Debtor is a party or by which
it or its assets may be bound or affected; (iii) require any consent or approval
of its stockholders or violate any provision of its articles of incorporation or
by-laws, if the Debtor is a corporation; or (iv) violate any provision of its
partnership agreement, if the Debtor is partnership.

          C. Legal Effect. This Security Agreement constitutes, and any
             ------------
document, instrument or agreement required hereunder when executed and delivered
will constitute legal, valid and binding obligations of the Debtor enforceable
against the Debtor in accordance with their respective terms.

          D. Title to Collateral, Permitted Liens. The Debtor has good and
             ------------------------------------
marketable title to the Collateral and the same is not now and shall not become
subject to any security interest, encumbrance, lien or claim of any third person
other than: (i) liens and security interests to secure the Indebtedness or other
indebtedness owed to the Bank; (ii) liens for taxers, assessments or similar
charges either not yet due or being duly contested in good faith; (iii) liens of
mechanics, materialmen, warehousemen or other like liens arising in the ordinary
course of business and securing obligations which are not delinquent; (iv) liens
and security interest which,

                                       2

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as of the date hereof, have been disclosed to and approved by the Bank in
writing which, as of the date of this Security Agreement consists solely of
those certain UCC-1 Financing Statements recorded by NationsBanc Commercial
Corporation Instrument Nos. 93-201729 and 94-148385: (v) liens and security
interest which, as of the date hereof, have been disclosed to and approved by
the Bank in writing which, as of the date of this Security Agreement consist of
those certain UCC-2 Financing Statements recorded by Hongkong and Shanghai
Banking Corporation Limited ("HKSB") as Instrument Nos. 95-16360313, 95-16360317
and 95-163603051: and (vi) purchase money liens or purchase money security
interests upon or in any property acquired or held by the Debtor in the ordinary
course of business (collectively "Permitted Liens").

          E. Financial Statements. All financial statements, information and
             --------------------
other data now or hereafter submitted to the Bank in connection with the
transaction with respect to which this Security Agreement is entered into are
true, accurate and correct and have been applied. Since the most recent
submission of any such financial statement, information or other data to the
Bank, the Debtor represents and warrants that no material adverse change in the
financial condition or operations as disclosed therein or thereby has occurred
which has not been fully disclosed to the Bank in writing.

          F. Litigation. Except as have been disclosed to the Bank in writing,
             ----------
there are no actions, suits or proceedings pending or, to the knowledge of the
Debtor, threatened against or affecting the Debtor or Tarrant or their
respective properties before any court or administrative agency which, if
determined adversely to the Debtor or Tarrant as the case may be, would have a
material adverse effect on the Debtor's financial condition or operations or on
the Collateral.

          G. Taxes. The Debtor and Tarrant have filed all tax returns required
             -----
to be filed and paid all taxes shown thereon to be due, including interest and
penalties, other than taxes which are currently payable without penalty or
interest or those which are being duly contested in good faith.

          H. Priority of Security Interest. Debtor hereby grants Bank a security
             -----------------------------
interest in the Collateral, subject only to the UCC-1 Financing Statements filed
by NationsBanc Commercial Corporation as instrument nos. 93-201729 and
94-148385: the UCC-1 Financing Statements filed by HKSB as instrument nos.
95-16360313, 95-16360317 and 95-16360305: and to Permitted Liens for purchase
money under subparagraph D(vi) above.

          I. Ownership of Debtor. 31% of Debtor's outstanding shares are
             -------------------
publicly traded; 69% of its shares are owned by Mr. Gerald Guez (66.7% of the
69%) and Mr. Todd Kay (33.3% of the 69%).

          J. Ownership of Tarrant. Tarrant is a wholly-owned subsidiary of
             --------------------
Debtor,

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          K. Benefits to Debtor; Solvency. The Guarantee by Debtor of Tarrant's
             ----------------------------
indebtedness to Bank and this Security Agreement are given by Debtor in
consideration, inter alia, of the Bank's conditional agreement to provide credit
               ----- ----
facilities to Tarrant. Debtor and Tarrant are interdependent corporations that,
inter alia, Tarrant is a principal supplier of new materials to Debtor. The
----- ----
extension of credit by Bank to Tarrant substantially benefits Debtor both
directly and indirectly. Debtor is not insolvent and has sufficient working
capital for the conduct of its business, nor would Debtor be insolvent nor its
working capital be impaired if Debtor were required to satisfy all indebtedness
of Tarrant to Bank.

          4. Debtor's Covenants. The Debtor covenants and agrees that, unless
             ------------------
the Bank otherwise consents in writing, the Debtor shall at all times.

          A. Maintenance of Insurance. Keep and maintain the Collateral insured
             ------------------------
for not less than its full replacement value against all risks of loss and
damage and maintain such other insurance as is usually carried by companies
engaged in similar businesses and owing similar properties in the same general
areas in which the Debtor operates and maintain such other insurance and
coverage as may be required by the Bank. All such insurance shall be in form and
amount and with companies satisfactory to the Bank. With respect to insurance
covering the Collateral, such insurance shall name the Bank as loss payee
pursuant to a loss payable endorsement satisfactory to Bank or as an additional
insured, as its interest may appear, and shall not be altered or cancelled
except upon 10 days' prior written notice to the Bank. Upon the Bank's request,
the Debtor shall furnish the Bank with the original policy or binder of all such
insurance.

          B. Maintenance of Collateral. Except for Permitted Liens, keep and
             -------------------------
maintain the Collateral free and clear of all levies, liens, encumbrances and
other security interests (including, but not limited to, any lien of attachment,
judgment or execution) and defend the Collateral against any such levy, lien,
encumbrance or security interest, comply with all laws, statues and regulations
pertaining to the Collateral, its use and operation: execute, file and record
such statements, notices and agreements, take such actions and obtain such
certificates and other documents necessary to perfect, evidence and continue
the Bank's security interest in the Collateral and the priority thereof;
maintain accurate and complete records of the Collateral; and properly care for,
house, store and maintain the Collateral in good condition, free of misuse,
abuse and deterioration, other than normal wear and tear.

          C. Intentionally omitted.
             ---------------------

          D. Location of Inventory. The inventory is now and shall at all times
             ---------------------
hereafter be of good and merchantable quality and free from defects; is not now
and shall not at any time hereafter be stored with a bailee, warehouseman or
similar party without the Bank's prior written consent, shall at all times be in
the Debtor's physical possession except customary samples; shall not be held by
others on consignment, sale on approval, or sale or return, and shall be kept at
the following location(s): 3151 East Washington Boulevard, Los Angeles,
California 90023 and such other locations as may be designated by Debtor and
approved by Bank in writing.

                                        4

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          E. Inspection Rights. At any reasonable time and from time to time,
             -----------------
permit the Bank or any representative thereof to examine and make copies of the
Books and Records and visit the properties of the Debtor and discuss the
business and operations of the Debtor with any employee or representative
thereof. If the Debtor now or at any time hereafter maintains any Books and
Records (including, but not limited to, computer generated records and computer
programs for the generation of such records) in the possession of a third party,
the Debtor hereby agrees to notify such third party to permit the Bank free
access to such Books and Records at all reasonable times and to provide the Bank
with copies of any Books and Records it may request, all at the Debtor's expense
the amount of which shall be payable immediately upon demand.

          F. Reporting Requirements. Furnish, or cause to be furnished, to the
             ----------------------
Bank within ninety (90) days after the end of each fiscal year of the Debtor,
consolidated statements of income, balance sheet, capital accounts and cash
flows of the Debtor and its consolidated subsidiaries for such fiscal year,
setting forth in comparative form the figures as at the end of and for the
previous fiscal year and certified without qualification by independent
certified public accountants of recognized standing reasonably satisfactory to
the Bank, whose option shall be in scope and substance satisfactory to the Bank.
Promptly upon the Banks request, deliver or cause to be delivered to the Bank.
such other information pertaining to the Debtor, the Collateral or such other
matters as the Bank may reasonably request.

          G. Transfer of Collateral. Not sell, contract for sale,
             ----------------------
convey, transfer, assign, lease or  sublet any of the Collateral except in the
ordinary course of business as presently conducted by the Debtor and then, only
for full, fair and reasonable consideration.

          H. Payment of Obligations. Pay, and cause Tarrant to pay, all their
             ----------------------
respective liabilities and obligations, when due.

          I. Compensation of Employees. Compensate its employees for services
             -------------------------
rendered at an hourly rate at least qual to the minimum hourly rate prescribed
by any applicable federal or state law or regulation.

          J. Notices. Give the Bank prompt written notice of: (i) any change in
             -------
its place of business: (ii) any proposed or actual change in its name, identity
or business nature: (iii) any Event of Default: (iv) litigation, arbitration or
administrative proceedings to which the Debtor is a party and in which the claim
or liability exceeds 10% of Tangible Net Worth which means the gross book value
of Debtor's assets (exclusive of goodwill, patents, trademarks, trade names,
organization expense, treasury stock, deferred research and development costs,
deferred marketing expenses and other like intangibles), less liabilities of
Debtor) or which affects the Collateral in any way: and (v) any other matter
which has resulted in, or might result in, a material adverse change on the
Collateral or the financial condition or business operations of the Debtor

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          K. Delivery of Documents. Promptly deliver, upon Bank's request, any
             ---------------------
further information or documentation required to establish due authorization of
this Agreement and/or to further perfect or otherwise carry out the intentions
of Bank and Debtor.

          L. Indemnity. The Debtor will indemnify and hold harmless the Bank and
             ---------
its respective employees, representatives, officers and directors from and
against any and all claims, liabilities, losses, damages, actions, and demands
by any party (other than with respect to any claims, actions or demands made by
other such indemnified parties or any liabilities, losses or damages caused
thereby) against the Bank, resulting from any breach or alleged breach by the
commitment of the making or administration of the Indebtedness unless the Bank
is determined to have acted or failed to act with gross negligence or willful
misconduct.

     5. Events of Default. Any one or more of the following described events
        -----------------
shall constitute an event of default ("Event of Default") hereunder:

          A. The occurrences of a default by Debtor with respect to the
Indebtedness.

          B. The failure by Debtor in any material respect to perform or observe
any term, covenant or agreement contained in this Security Agreement, or any
other agreement memorializing, securing or supposing the Indebtedness.

          C. The occurrence of a default by Tarrant Co. Ltd. under its
obligations to the Bank under the Facility Letter.

          D. Any representation or warranty made under this Security Agreement
shall prove incorrect or misleading in any material respect when made.

          E. There shall be entered a decree or order by a court having
jurisdiction in the premises constituting an order for relief in respect of the
Debtor under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal or state bankruptcy law or other
similar law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or similar official of the Debtor or of any substantial part of its
property or ordering the winding-up or liquidation of the affairs of the Debtor
or an involuntary petition or case is filed or commenced against the Debtor, and
a temporary stay entered and any such decree or order shall continue unstayed
and in effect for a period of forty-five (45) consecutive days or similar events
shall occur with respect to Tarrant under Hong Kong law.

          F. The Debtor shall file a petition, answer or consent seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal or state bankruptcy law or other
similar law, or the Debtor shall consent to the institution of proceedings
thereunder or to the filing of any such petition or to the appointment or taking
of possession of a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar

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official of the Debtor of any substantial part of its property, or the Debtor
shall fail generally to pay its debts as they become due, or admit in writing
its inability to pay its debts as they become due, or the Debtor shall authorize
any such action, or Tarrant shall take similar actions under Hong Kong law.

     6. Bank's Rights and Remedies on Default. Upon the occurrence of any Event
        -------------------------------------
of Default, the Bank may, at its sole and absolute election, without demand and
only upon such notice as may be required by law:

          A. Acceleration. Declare the Indebtedness and any or all other
             ------------
indebtedness owing to the Bank by the Debtor or any obligor on the Indebtedness
(however such indebtedness may be evidenced or secured) immediately due and
payable, whether or not otherwise due and payable.

          B. Cease Extending Credit. Cease extending credit to or for the
             ----------------------
account of the Tarrant. Debtor or any other guarantor of Tarrant's indebtedness
to Bank under any agreement now existing or hereafter entered into with the
Bank.

          C. Termination. Terminate any agreement as to any future obligation of
             -----------
the Bank without affecting the Debtor's obligations to the Bank or the Bank's
rights and remedies under this Security Agreement or under any other document,
instrument or agreement.

          D. Segregate Collections. Require the Debtor to segregate all
             ---------------------
collections and proceeds of the Collateral so that they are capable of
identification and to deliver such collections and proceeds to the Bank, in
kind, without commingling, at such times and in such manner as required by the
Bank.

          E. Records of Collateral. Require the Debtor to deliver periodically
             ---------------------
to the Bank all Books and Records and any other information showing the status,
condition and location of the Collateral and such contracts or other matters
which affect the Collateral. In connection herewith, the Bank may conduct such
audits or other examination of such records, including, but not limited to,
verification of balances owing by any account debtor of the Debtor, as the Bank,
in its sole and absolute discretion, deems necessary.

          F. Notification of Account Debtors. Notify any or all of the Debtor's
             -------------------------------
account debtors, buyers or transferees of the Collateral, or other persons of
the Bank's interest in the Collateral and the proceeds thereof and instruct such
person(s) to thereafter make any payment due the Debtor directly to the Bank

          The Debtor hereby irrevocably constitutes and appoints the Bank as its
attorney-in-fact to (i) endorse the Debtor's name on any notes, acceptances,
checks, drafts, money orders or other evidence of payment that may come into the
Bank's possession: (ii) sign the Debtor's name on any invoice or bill of lading
relating to any of the Collateral: (iii) notify post office authorities

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to change the address for delivery of mail addressed to the Debtor to such
address as the Bank may designate and take possession of and open mail addressed
to the Debtor and remove therefrom proceeds of and payments on the Collateral:
and (iv) demand, receive and enforce payment and give receipts, releases and
satisfactions for and sue for all money payable to the Debtor. All of the
preceding may be done either in the name of the Bank or in the name of the
Debtor with the same force and effect as the Debtor could have done had this
Security Agreement not been entered into.

          G. Compromise. Grant extensions, compromise claims and settle any
             ----------
accounts for less than the amount owing thereunder, all without notice to the
Debtor or any obligor on or any guarantor of the Indebtedness.

          H. Protection of Security Interest in Collateral. Make such payments
             ---------------------------------------------
and do such acts as the Bank, in its sole judgment, considers necessary and
reasonable to protect its security interest in the Collateral. The Debtor hereby
irrevocably authorizes the Bank to pay, purchase, contest or compromise any
encumbrance, lien or claim which the Bank, in its sole judgment, deems to be
prior or superior to its security interest. Further, the Debtor hereby agrees to
pay to the Bank, upon demand therefor, all expenses and expenditures (including
attorneys' fees) incurred in connection with the foregoing.

          I. Foreclosure. Enforce any security interest or lien given or
             -----------
provided for under this Security Agreement or under any other document relating
to the Collateral, in such manner and such order, as to all or any part of the
Collateral, as the Bank, in its sole judgment, deems to be necessary or
appropriate and the Debtor hereby waives any and all rights, obligations or
defenses now or hereafter established by law relating to the foregoing. In the
enforcement of its security interest in the Collateral, the Bank is authorized
to enter upon the premises where any Collateral is located and take possession
of the Collateral or any part thereof, together with the Debtor's records
pertaining thereto, or the Bank may require the Debtor to assemble the
Collateral and records pertaining thereto and make such Collateral and records
available to the Bank at a place designated by the Bank. The Bank may sell the
Collateral or any portions thereof, together with all additions, accessions and
accessories thereto, giving only such notices and following only such procedures
as are required by law, at either a public or private sale, or both, with or
without having the Collateral present at the time of sale, which sale shall be
on such terms and conditions and conducted in such manner as the Bank determines
in its sole judgment to be commercially reasonable. Any deficiency which exists
after the disposition or liquidation of the Collateral shall be a continuing
liability of any obligor on or any guarantor of the Indebtedness and shall be
immediately paid to the Bank.

          J. Non-Exclusivity of Remedies. Exercise one or more of the Bank's
             ---------------------------
rights set forth therein or seek such other rights or pursue such other remedies
as may be provided by law, in equity or in any other agreement now existing or
hereafter entered into between the Bank and the Debtor or any obligor on or
guarantor of the Indebtedness or otherwise.

                                        8

<PAGE>

          K. Application of Proceeds. All amounts in deposit accounts held and
             -----------------------
received by the Bank as proceeds from the disposition or liquidation of the
Collateral shall be applied as follows: first, to the costs and expenses of
collection, including court costs and reasonable attorneys' fees, whether or not
suit is commenced by the Bank: next, to those costs and expenses incurred by the
Bank in protecting, preserving, enforcing, collecting, selling or disposing of
the Collateral: next, to the payment of accrued and unpaid interest or fees on
all of the Indebtedness: next, to the payment of the outstanding principal
balance of the Indebtedness: and last, to the payment of any other indebtedness
owed by the Debtor to the Bank. Such application may be made in the case of cash
or monies including funds in Bank's possession prior to an Event of Default or
after, without the necessity of a sale of Collateral, and such application shall
not constitute retention of Collateral in satisfaction of the Indebtedness. Any
excess collateral or excess proceeds existing after the collection or
disposition or liquidation of the Collateral will be returned or paid by the
Bank to the Debtor.

          L. Cumulative Rights. The rights, powers and remedies of Bank under
             -----------------
this Security Agreement shall be in addition to all rights, powers and remedies
given to Bank by virtue of any statute or rule of law, the loan documents
between Bank and Tarrant or any other agreement, all of which rights, powers and
remedies shall be cumulative and may be exercised successively or concurrently
without impairing Bank's interest in the Collateral.

     7. Miscellaneous.
        -------------

          A. Amounts Payable Under This Security Agreement. If the Debtor fails
             ---------------------------------------------
to pay on demand the amount of any obligation referred to in this Security
Agreement, the Bank may pay such amount at its option and without any obligation
to do so and without waiving any default occasioned by the Debtor's failure to
pay such amount. All amounts so paid by the Bank, together with reasonable
attorneys' fees and all other costs, charges and expenses relating to the
Indebtedness, shall be a part of the Indebtedness and shall bear interest at the
highest rate chargeable on any Indebtedness until paid in full

          B. Other Terms. Terms not otherwise defined in this Security Agreement
             -----------
shall have the meanings attributed to such terms in the California Uniform
Commercial Code.

          C. Reliance. Each warranty, representation, covenant and agreement
             --------
contained in this Security Agreement shall be conclusively presumed to have been
relied upon by the Bank regardless of any investigation made or information
possessed by the Bank and shall be cumulative and in addition to any other
warranties, representations, covenants or agreements which the Debtor shall now
or hereafter give, or cause to be given, to the Bank

          D. Attorneys' Fees. In the event of any action in relation to this
             ---------------
Security Agreement, the Collateral or any document, instrument or agreement
secured hereby or related hereto, the prevailing party, in addition to all other
sums to which it may be entitled, shall be entitled to reasonable attorneys'
fees.

                                       9

<PAGE>

          E. Notices. All notices, payments, requests, information and demands
             -------
which either party hereto may desire, or be required to give or make to the
other party, shall be given or delivered to such party in writing by telecopier
to the telecopier numbers as specified below, addressed to the address set forth
below such party's signature to this Security Agreement or to such other address
as may be specified from time to time in writing by either party to the other.

          F. Waiver. Neither the failure nor delay by the Bank in exercising any
             ------
right hereunder or under any document, instrument or agreement mentioned herein
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right hereunder or under any other document, instrument or agreement
mentioned herein preclude other or further exercise thereof or the exercise of
any other right nor shall any waiver of any right or default hereunder or under
any other document, instrument or agreement mentioned herein constitute a waiver
of any other right or default or constitute a waiver of any other term or
provision.

          G. Assignment. This Security Agreement shall be binding upon and inure
             ----------
to the benefit of the Debtor and the Bank and their respective successors and
assigns, except that the Debtor shall not have the right to assign its rights
hereunder or any interest herein without the Bank's prior written consent. The
Bank may sell or assign all or any portion of its rights and benefits hereunder
and, in connection therewith, may deliver to such prospective buyer or assignee
financial statements and other relevant information pertaining to the Debtor or
any obligor on the Indebtedness.

          H. Severability. If any provision hereof is invalid and unenforceable
             ------------
in any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in fully force and effect in such jurisdiction
and shall be liberally construed in favor of the Bank in order to carry out the
intentions of the parties hereto as nearly as may be possible, (ii) such
provision shall be ineffective, but only to the extent of such invalidity and
unenforceability, and (iii) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.

          I. Jurisdiction. This Security Agreement and the rights of the parties
             ------------
hereunder to and concerning the Collateral, and any documents, instruments or
agreements mentioned or referred to herein, shall be governed by and construed
according to the laws of the State of California.

          J. WAIVER OF JURY TRIAL. THE DEBTOR AND THE BANK HEREBY KNOWINGLY,
             --------------------
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT AND AGREE
THAT ANY SUCH ACTION OR PROCEEDINGS SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY. THE DEBTOR REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF
THE BANK WAS REPRESENTED EXPRESSLY OR OTHERWISE THAT THE BANK

                                       10

<PAGE>

WILL NOT, IN THE EVENT OF ANY LITIGATION, SEEK TO ENFORCE THIS WAIVER OF JURY
TRIAL. THE DEBTOR ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT IN RELIANCE UPON, AMONG OTHER THINGS, THE PROVISIONS OF THIS
PARAGRAPH.

          K. Counterparts. This Security Agreement may be executed in any number
             ------------
of counterparts, all of which taken together shall constitute one and the same
instrument and either of the parties hereto may execute this Security Agreement
by signing any such counterpart.

          L. Legal Representation. Walker, Wright, Tyler & Ward acted as
             --------------------
scrivener for this agreement but did not represent the Secured Party nor the
Debtor in negotiating this agreement and is not responsible to either of said
parties for the form or content of the agreement.

                                      DEBTOR:

                                      TARRANT APPAREL GROUP dba FASHION
                                      RESOURCE, a California corporation

                                      By: /s/ Illegible
                                          --------------------------------------
                                      Its: V.P.
                                      Address:    3151 East Washington Boulevard
                                                  Los Angeles, CA 90023
                                      Telecopier: (213) 780-0751

                                      BANK:

                                      STANDARD CHARTERED BANK

                                      By: /s/ Bernie Ip
                                          --------------------------------------
                                      Its: Senior Manager, CBG/T&G2
                                      Address:    Room 705-6, Tower 1
                                                  Cheung Sha Wan Plaza
                                                  Kowloon, Hong Kong
                                      Attention:  Corporate Banking Group
                                      Telecopier: 011-852-2371-2953

<PAGE>

     This FINANCING STATEMENT is presented for filing and will remain effective,
with certain exceptions, for five years from the date of filing, pursuant to
Section 9403 of the California Uniform Commercial Code.

<TABLE>
<S>                                                                   <C>
-------------------------------------------------------------------------------------------------------------------
1.  DEBTOR (LAST NAME FIRST--IF AN INDIVIDUAL)                        1A. SOCIAL SECURITY OR FEDERAL TAX NO.

    TARRANT APPAREL GROUP DBA FASHION RESOURCE                            95-4181026
-------------------------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS                     1C. CITY, STATE                                         1D. ZIP CODE

    3151 EAST WASHINGTON BOULEVARD          LOS ANGELES            CA                           90023
-------------------------------------------------------------------------------------------------------------------
2.  ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST--IF AN INDIVIDUAL)    2A. SOCIAL SECURITY OR FEDERAL TAX NO.

-------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS                     2C. CITY, STATE                                         2D. ZIP CODE

-------------------------------------------------------------------------------------------------------------------
3.  DEBTOR'S TRADE NAMES OR STYLES  (IF ANY)                          3A.  FEDERAL TAX NUMBER.

===================================================================================================================
4.  SECURED PARTY    STANDARD CHARTERED BANK                          4A. SOCIAL SECURITY NO. FEDERAL TAX NO.
    NAME             CORPORATE BANKING GROUP                              OR BANK TRANSIT AND A B A NO.
    MAILING ADDRESS  ROOM 705-6, TOWER 1,
                     CHEUNG SHA WAN PLAZA
                     833 CHEUNG SHA WAN ROAD

    CITY  KOWLOON  HONG KONG       STATE                   ZIP CODE
-------------------------------------------------------------------------------------------------------------------
5.  ASSIGNEE OF SECURED PARTY (IF ANY)                                5A. SOCIAL SECURITY NO. FEDERAL TAX NO.
                                                                          OR BANK TRANSIT AND A B A NO.
    NAME

    MAILING ADDRESS

    CITY                           STATE                   ZIP CODE
-------------------------------------------------------------------------------------------------------------------
6.   This FINANCING STATEMENT covers the following types or items of property
     (include description of real property on which located and owner of record
     when required by instruction 4).

     SEE ATTACHED EXHIBIT A

-------------------------------------------------------------------------------------------------------------------
                                                  7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH
7.  CHECK     [X]    7A. PRODUCTS OF COLLATERAL       INSTRUCTION 5(o) ITEM:
    IF APPLICABLE    [ ] ARE ALSO COVERED                [ ](1)    [ ](2)   [ ](3)   [ ](4)

-------------------------------------------------------------------------------------------------------------------
8.  CHECK     [X]
    IF APPLICABLE    [ ] DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC (S)9105 (1) (0)

-------------------------------------------------------------------------------------------------------------------
9.                                                        DATE        C     10. THIS SPACE FOR USE OF FILING OFFICER
                                                                      O         (DATE, TIME, FILE NUMBER
                                                                      D         AND FILING OFFICER)
  /s/ Illegible                                         Illegible     E
SIGNATURE(S) OF DEBTOR(S)  SECRETARY/TREASURER
                                                                      1                   9701060409
-------------------------------------------------------------------   2
                                                                      3
   TARRANT APPAREL GROUP DBA FASHION RESOURCE                         4
TYPE OR PRINT NAME(S) OF DEBTOR(S)                                    5
-------------------------------------------------------------------   6
                                                                      7
  /s/ Illegible                                                       8                       FILED
SIGNATURE(S) OF SECURED PARTY(IES)                                    9                   SACRAMENTO, CA
-------------------------------------------------------------------   0                JAN 10, 1997 AT 1149

   STANDARD CHARTERED BANK                                                                  BILL JONES
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)                                            SECRETARY OF STATE

===================================================================
11. Return copy to:

NAME       CSC
ADDRESS    2730 Gateway Oaks Drive, Suite 100
CITY       Sacramento, CA 95833                         WAN
STATE      Acct.# P6-0000-743-9                        PLAZA
ZIP CODE
===================================================================
</TABLE>

FILING OFFICER COPY ACKNOWLEDGMENT            FORM UCC - 1
                                              Approved by the Secretary of State

<PAGE>

     This FINANCING STATEMENT is presented for filing and will remain effective,
with certain exceptions, for five years from the date of filing, pursuant to
Section 9403 of the California Uniform Commercial Code.

<TABLE>
<S>                                                                   <C>
-------------------------------------------------------------------------------------------------------------------
1.  DEBTOR (LAST NAME FIRST--IF AN INDIVIDUAL)                        1A. SOCIAL SECURITY OR FEDERAL TAX NO.

    TARRANT APPAREL GROUP DBA FASHION RESOURCE                            95-4181026
-------------------------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS                     1C. CITY, STATE                                         1D. ZIP CODE

    3151 EAST WASHINGTON BOULEVARD          LOS ANGELES            CA                           90023
-------------------------------------------------------------------------------------------------------------------
2.  ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST--IF AN INDIVIDUAL)    2A. SOCIAL SECURITY OR FEDERAL TAX NO.

-------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS                     2C. CITY, STATE                                         2D. ZIP CODE

-------------------------------------------------------------------------------------------------------------------
3.  DEBTOR'S TRADE NAMES OR STYLES (IF ANY)                           3A.  FEDERAL TAX NUMBER.

===================================================================================================================
4.  SECURED PARTY    STANDARD CHARTERED BANK                          4A. SOCIAL SECURITY NO FEDERAL TAX NO.
    NAME             CORPORATE BANKING GROUP                              OR BANK TRANSIT AND A B A NO.
    MAILING ADDRESS  ROOM 705-6, TOWER 1,
                     CHEUNG SHA WAN PLAZA
                     833 CHEUNG SHA WAN ROAD

    CITY  KOWLOON  HONG KONG      STATE                    ZIP CODE
-------------------------------------------------------------------------------------------------------------------
5.  ASSIGNEE OF SECURED PARTY (IF ANY)                                5A. SOCIAL SECURITY NO FEDERAL TAX NO.

    NAME                                                                  OR BANK TRANSIT AND A B A NO.

    MAILING ADDRESS

    CITY                           STATE                   ZIP CODE
-------------------------------------------------------------------------------------------------------------------

6.   This FINANCING STATEMENT covers the following types or items of property
     (include description of real property on which located and owner of record
     when required by instruction 4).

     SEE ATTACHED EXHIBIT A

-------------------------------------------------------------------------------------------------------------------
                                                  7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH
7.  CHECK     [X]    7A. PRODUCTS OF COLLATERAL       INSTRUCTION 5(o) ITEM:
    IF APPLICABLE    [ ] ARE ALSO COVERED                [ ](1)    [ ](2)   [ ](3)   [ ](4)

-------------------------------------------------------------------------------------------------------------------
8.  CHECK     [X]
    IF APPLICABLE    [ ] DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC (S)9105 (1) (0)

-------------------------------------------------------------------------------------------------------------------
9.                                                        DATE        C     10. THIS SPACE FOR USE OF FILING OFFICER
                                                                      O         (DATE, TIME, FILE NUMBER
                                                                      D         AND FILING OFFICER)
  /s/ Illegible                                         Illegible     E
SIGNATURE OF DEBTOR(S)  SECRETARY/TREASURER
                                                                      1
-------------------------------------------------------------------   2
                                                                      3
   TARRANT APPAREL GROUP DBA FASHION RESOURCE                         4
TYPE OR PRINT NAME(S) OF DEBTOR(S)                                    5
-------------------------------------------------------------------   6
                                                                      7
  /s/ Illegible                                                       8
SIGNATURE(S) OF SECURED PARTY(IES)                                    9
-------------------------------------------------------------------   0

   STANDARD CHARTERED BANK
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)
===================================================================
11. Return copy to:

NAME       STANDARD CHARTERED BANK
ADDRESS    CORPORATE BANKING GROUP
CITY       ROOM 705-6, TOWER 1, CHEUNG SHA WAN PLAZA
STATE      833 CHEUNG SHA WAN RD
ZIP CODE   KOWLOON  HONG KONG
===================================================================
</TABLE>

(3) FILE COPY--SECURED PARTY                FORM UCC 1
                                            Approved by the Secretary of State

<PAGE>

     for five years from the date of filing, pursuant to Section 9403 of the
California Uniform Commercial Code.

<TABLE>
<S>                                                                   <C>
-------------------------------------------------------------------------------------------------------------------
1.  DEBTOR (LAST NAME FIRST--IF AN INDIVIDUAL)                        1A. SOCIAL SECURITY OR FEDERAL TAX NO.

    TARRANT APPAREL GROUP DBA FASHION RESOURCE                            95-4181026
-------------------------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS                     1C. CITY, STATE                                         1D. ZIP CODE

    3151 EAST WASHINGTON [Illegible]        LOS ANGELES            CA                           90023
-------------------------------------------------------------------------------------------------------------------
2.  ADDITIONAL DEBTOR (IF ANY) (LAST NAME FIRST--IF AN INDIVIDUAL)    2A. SOCIAL SECURITY OR FEDERAL TAX NO.

-------------------------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS                     2C. CITY, STATE                                         2D. ZIP CODE

-------------------------------------------------------------------------------------------------------------------
3.  DEBTOR'S TRADE NAMES OR STYLES  (IF ANY)                          3A.  FEDERAL TAX NUMBER.

-------------------------------------------------------------------------------------------------------------------
4.  SECURED PARTY    STANDARD CHARTERED BANK                          4A. SOCIAL SECURITY NO FEDERAL TAX NO.
    NAME             CORPORATE BANKING GROUP                              OR BANK TRANSIT AND A B A NO.
    MAILING ADDRESS  ROOM 705-6, TOWER 1,
                     CHEUNG SHA WAN PLAZA
                     833 CHEUNG SHA WAN ROAD

    CITY  KOWLOON  HONG KONG      STATE                    ZIP CODE
-------------------------------------------------------------------------------------------------------------------
5.  ASSIGNEE OF SECURED PARTY (IF ANY)                                5A. SOCIAL SECURITY NO FEDERAL TAX NO.

    NAME                                                                  OR BANK TRANSIT AND A B A NO.

    MAILING ADDRESS

    CITY                           STATE                   ZIP CODE
-------------------------------------------------------------------------------------------------------------------

6.   This FINANCING STATEMENT covers the following types or items of property
     (include description of real property on which located and owner of record
     when required by instruction 4.)

     SEE ATTACHED EXHIBIT A

-------------------------------------------------------------------------------------------------------------------
                                                  7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN ACCORDANCE WITH
7.  CHECK     [X]    7A. PRODUCTS OF COLLATERAL       INSTRUCTION 5(o) ITEM:
    IF APPLICABLE    [ ] ARE ALSO COVERED                [ ](1)    [ ](2)   [ ](3)   [ ](4)

-------------------------------------------------------------------------------------------------------------------
8.  CHECK     [X]
    IF APPLICABLE    [ ] DEBTOR IS A "TRANSMITTING UTILITY" IN ACCORDANCE WITH UCC (S)9105 (1) (0)

-------------------------------------------------------------------------------------------------------------------
9.                                                        DATE        C     10. THIS SPACE FOR USE OF FILING OFFICER
                                                                      O         (DATE, TIME, FILE NUMBER
                                                                      D         AND FILING OFFICER)
SIGNATURE OF DEBTOR(S)  SECRETARY/TREASURER                           E
-----------------------------------------------------------------------
                                                                      1
   TARRANT APPAREL GROUP DBA FASHION RESOURCE                         2
TYPE OR PRINT NAME(S) OF DEBTOR(S)                                    3
-------------------------------------------------------------------   4
                                                                      5
                                                                      6
SIGNATURE(S) OF SECURED PARTY(IES)                                    7
-------------------------------------------------------------------   8
                                                                      9
   STANDARD CHARTERED BANK                                            0
TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)
===================================================================
11. Return copy to:

NAME       STANDARD CHARTERED BANK
ADDRESS    CORPORATE BANKING GROUP
CITY       ROOM 705-6, TOWER 1, CHEUNG SHA WAN PLAZA
STATE      833 CHEUNG SHA WAN RD
ZIP CODE   KOWLOON  HONG KONG
===================================================================

(4)FILE COPY--DEBTOR                          FORM UCC 1
                                              Approved by the Secretary of State
===================================================================================================================
</TABLE>

<PAGE>

[Illegible] TYPE THIS FORM USING BLACK TYPEWRITER RIBBON

2.   If the space provided for any item is inadequate:
     a.   Note "Cont'd" in the appropriate space(s).
     b.   Continue the item(s) preceded by the Item No. on an additional 8 1/2"*
          11" sheet.
     c.   Head each additional sheet with the Debtor's name (last name first for
          individuals) appearing in Item No. 1 of this form. Be sure to attach a
          copy of the additional sheet to each copy of the form.

3.   NUMERICAL IDENTIFICATION:
     a.   If the Debtor, Secured Party or Assignee is an individual, include
          Social Security number in the appropriate space. Disclosure of Social
          Security number is optional for the filing of this statement. It will
          be used to assist in correctly identifying individuals with similar
          names. (UCC (S) 9403[5])
     b.   If the Debtor, Secured Party or Assignee is other than an individual
          or a bank, show Federal Tax-payer Number in the appropriate space.
     c.   If the Secured Party or Assignee is a bank, show Transit and ABA
          number in the appropriate space. This must be complete 10 digit
          number.

4.   COLLATERAL DESCRIPTION--Item 6
     a.   If the financing statement covers crops growing or to be grown, the
          statement must also contain a description of the real estate concerned
          in accordance with UCC (S) 9402(1).
     b.   If the financing statement covers timber to be cut or covers minerals
          or the like, oil or gas or accounts subject to UCC (S) 9103(5),
          the statement must show that is covers this type of collateral and the
          statement must also show it is to be recorded in the real estate
          records, and the financing statement must contain a description of the
          real estate sufficient if it were contained in a mortgage of the real
          estate to give constructive notice of the mortgage under the law of
          this State. If the debtor does not have an interest of record in the
          real estate, the financing statement must show the name of a record
          owner in Item No. 6.

5.   SIGNATURES:

     Before mailing, be sure that the financing statement has been properly
     signed. A financing statement requires the signature of the debtor only
     except under the following circumstances. If only of these circumstances
     apply, check the appropriate box in item 7B and enter required information
     in Item 6.
     a.   Under the provisions of UCC (S)9402(2) a financing statement is
          sufficient when it is signed by the secured party alone if it is filed
          to perfect a security interest in:
          (1) collateral already subject to a security interest in another
          jurisdiction when it is brought into this State or when the debtor's
          location is changed to this State. Such a financing statement must
          state that the collateral was brought into this State or that the
          debtor's location was changed to this State.
          (2) proceeds under UCC (S)9306, if the security interest in the
          original collateral was perfected. Such a financing statement must
          describe the original collateral and give the date of filing and the
          file number of the prior financing statement.
          (3) collateral as to which the filing has lapsed. Such a financing
          statement must include a statement to the effect that the prior
          financing statement has lapsed and give the date of filing and the
          file number of the prior financing statement.
          (4) collateral acquired after a change of name, identity or corporate
          structure of the debtor. Such a financing statement must include a
          statement that the name, identity or corporate structure of the debtor
          has been changed and give the date of filing and the file number of
          the prior financing statement and the name of the debtor as shown in
          the prior financing statement.

6.   FILING FEE--PROPER PLACE TO FILE
     Enclose filing fee of                 payable to the appropriate Filing
                           ---------------
     Officer. Financing statements and related papers pertaining to consumer
     goods should be filed with the County Recorder in the county of the
     debtor's residence, or if the debtor is not a resident of this State, then
     in the office of the County Recorder of the county in which the goods are
     kept. When the collateral is crops growing or to be grown, timber to be
     cut, or minerals or the like (including oil and gas), or accounts subject
     to UCC (S)9103(5), then filing is with the County Recorder where the
     property is located. In all other cases, filing is with the Secretary of
     State.

7.   REMOVE SECURED PARTY AND DEBTOR COPIES.
     Send the original and first copy with interleaved carbon paper to the
     Filing Officer with the correct filing fee. The original will be retained
     by the Filing Officer. The copy will be returned with the filing date and
     time stamped thereon. Indicate the name and mailing address of the person
     or firm to whom the copy is to be returned in Item No. 11.

     For current fee to the Secretary of State Call (916) 445-8061.

<PAGE>

                                  " EXHIBIT A"
                          TO UCC-1 FINANCING STATEMENT

     All inventory now owned or hereafter acquired by the Debtor from Tarrant
Co. Ltd., or its affiliates (the "Inventory") including, but not limited to, all
raw materials, work in process, finished goods, merchandise, parts and supplies
of every kind and description, including inventory temporarily out of the
Debtor's custody or possession, together with all returns on accounts, now
acquired or to be acquired by Debtor,

     All now existing or hereafter made, compiled or acquired books and records,
including electronics data, related to the foregoing inventory and information
storage devices and media containing such books and records ("Books and
Records").<PAGE>

                                                                 Exhibit 10.90.6

[LOGO]
Commercial
Credit LLC

        March   , 2002

        Tarrant Apparel Group
        Tag Max. Inc.
        Fashion Resource (TLC), INC.
        United Apparel Ventures, LLC

        3151 East Washington Boulevard
        Los Angeles, CA 90023

        Ladies/Gentlemen:

             Reference is made to the Revolving Credit, Factoring and Security
        Agreement between us dated as of January 21, 2000 as amended and
        supplemented (the "Agreement"). All capitalized terms not otherwise
        defined herein shall have such meaning as are set forth under the
        Agreement.

             This letter shall (among other things) serve to confirm that you
        will within 10 Business Days from the date hereof deliver to us the
        necessary documents ("Blocked Account Documents"), required by the banks
        where your depository accounts are established to establish, a lock box,
        and blocked account in our favor on terms which are reasonably
        acceptable us, so as to establish the direct remittance to us of the
        collected payments of your Receivables. You will thereupon have 30 days
        from the date you deliver such documentation to us to demonstrate to us
        that the establishment of such a procedure would cause a material
        adverse effect upon your cash flow. If you are not able to demonstrate
        to our satisfaction you agree to immediately secure the Blocked Account
        Documents which shall be delivered to the banks to establish the lock
        box and blocked accounts in our favor. Provided that you comply with the
        provisions of this paragraph above we agree that the Agreement shall be
        amended in the following manner.

                  1.   For the fiscal periods ending March 31, 2002 through
        December 31, 2002 only, the Tangible Net Worth financial covenant
        requirement set forth in section 7.5(a) of the Agreement shall be
        amended to require a Tangible Net Worth of not less than the amounts
        indicated below for the corresponding dates set forth below:

               March 31, 2002             $91,500,000
               June 30, 2002              $94,500,000
               September 30, 2002         $98,500,000
               December 31, 2002          $98,500,000

<PAGE>

GMAC Commercial Credit LLC
     Tarrant Apparel Group
     Tag Mex, Inc.
     Fashion Resource (TCL), Inc.
     March    , 2002
     Page 2

         2. For the fiscal periods ending March 31, 2002 through December 31,
2002 only, the Fixed Charge Coverage Ratio financial covenant requirement set
forth in section 7.5(b) of the Agreement shall be amended to require a Fixed
Charge Coverage Ratio of not less than the ratios indicated below for the
corresponding dates set forth below:

              March 31, 2002         0.4 to 1
              June 30, 2002          1.0 to 1
              September 30, 2002     1.1 to 1
              December 31, 2002      1.1 to 1

         3. For the fiscal periods ending March 31, 2002 through December 31,
2002 only, the Interest Coverage Ratio financial covenant requirement set forth
in section 7.5(c) of the Agreement shall be amended to require an Interest
Coverage Ratio of not less than the ratios indicated below for the corresponding
dates set forth below:

              March 31, 2002         1.5 to 1
              June 30, 2002          3.0 to 1
              September 30, 2002     3.2 to 1
              December 31, 2002      3.2 to 1

         4. For the fiscal periods ending March 31, 2002 through December 31,
2002 only, the Total Leverage Ratio financial covenant requirement set forth in
section 7.5(d) of the Agreement shall be amended to require a Total Leverage
Ratio of not more than the ratios indicated below for the corresponding dates
set forth below:

              March 31, 2002         2.0 to 1
              June 30, 2002          2.0 to 1
              September 30, 2002     2.0 to 1
              December 31, 2002      1.6 to 1

        It is also hereby agreed that in part consideration of the
accommodations provided by us to you by the provisions of this letter you hereby
agree as follows:

            (a) You shall pay us an accommodation fee of $25,000 payment of
which shall be effectuated immediately by our charging your loan account with
us.

            (b) You agree that you shall pay us a facility fee (the "Facility
Fee") of $100,000 during each year the Agreement is in effect, payment of which
shall commence

<PAGE>

GMAC Commercial Credit LLC
     Tarrant Apparel Group
     Tag Mex, Inc.
     Fashion Resource (TCL), Inc.
     March   ,2002
     Page 3

retroactive to January 1, 2002 and which shall be payable each year in four (4)
equal quarterly installments due on the first day of each calendar quarter.
Payment of such fee shall be effectuated by our charging your loan account with
us.

                (c)  You hereby agree that commencing as of January 21, 2002 the
aggregate dollar amount of the Receivables which you shall factor with us (the
"Volume") in each Contract Year (the 12 month period from one anniversary of the
effective date of the Agreement to the next anniversary thereof) shall not be
less than Twenty Million Dollars ($20,000,000), and that to the extent that your
actual Volume is less than such amount, you agree to pay us the difference
between the factoring commission we earned on your actual Volume during the
applicable Contract Year and the commission which we would have earned had your
Volume during such Contract Year been Twenty Million Dollars ($20,000,000) (the
"Deficiency Charge"). Payment of the Deficiency Charge (if any) shall be paid
by our charging your loan account with us after the calculation thereof can be
made.

                (d)  The definition of "Applicable LIBOR Rate Margin" appearing
on page 2 of the Agreement shall be amended by deleting the grid appearing in
the definition and by substituting the following grid in its place and stead:

                                              Applicable LIBOR Rate Margin
                 Total Leverage Ratio         For LIBOR Rate Advances
                 --------------------         -----------------------------
                 greater than 2.00:1                    3.50%

                 greater than 1.5:1 but less            3.00%
                 than 2:1

                 greater than 1:1 but less              2.50%
                 than 2:1

                 less than 1:1                          2.00%

                (e)  A new definition of "Alternate Base Rate Margin" shall be
inserted in its applicable alphabetical order on page 2 of the Agreement, the
text of which definition shall state:

           "Applicable Alternate Base Rate Margin" means with respect to any
            -------------------------------------
           Base Rate Advance, the applicable per annum percentage set forth
           below opposite the Total Leverage Ratio, as determined in accordance
           with the Compliance Certificate most recently delivered pursuant to
           Section 10.8 hereof.

<PAGE>

GMAC Commercial Credit LLC
   Tarrant Apparel Group
   Tag Mex, Inc.
   Fashion Resources (TCL), Inc.
   March    , 2002
   Page 4

                                            Applicable Alternate Base Rate
                                            ------------------------------
              Total Leverage Ratio          Margin For Base Rate Advances
              --------------------          -----------------------------
              greater than 2.00:1                     1.00%

              greater than 1.5:1 but less             0.50%
              than 2:1

              greater than 1:1 but less               0.25%
              than 2:1

              less than 1:1                           0.00%

        Any reduction or increase in the Applicable Alternate Base Rate Margin
   shall be effective beginning on the date that is three (3) days following the
   date on which Agent receives Borrower's Compliance Certificate pursuant to
   section 10.8 hereof. In the event Borrower does not timely deliver a
   Compliance Certificate pursuant to Section 10.8 below, in addition to any
   rights and remedies Lenders may have against Borrower as a result of its
   failure to provide such Compliance Certificate the Applicable Alternate Base
   Rate Margin shall be deemed to be 1% from the date such Compliance
   Certificate was due until the third day following the receipt thereof by the
   Agent, at which date the Applicable Alternate Base Rate Margin shall be
   established pursuant to the grid set forth above."

                    (f)  The definition of "Base Rate Advance" shall be amended
   by deleting the text therein and by inserting the following text in its place
   and stead:

          "Base Rate Advance" shall mean each Revolving Advance bearing interest
           -----------------
          at the Alternate Base Rate plus the Applicable Alternate Base Rate
          Margin"

                    (g)  The text of Section 4.1(a) of the Agreement shall be
   deleted and the following text shall be inserted in its place and stead:

          "with Respect to a Base Rate Advance, equal to the sum of the
          Alternate Base Rate from time to time in effect plus the Applicable
          Alternate Base Rate Margin; or"

                    (h)  Section 4.1 shall be amended by adding thereto a
   Section 4.1(c) which shall immediately follow Section 4.1(b) and the text of
   which shall state:

<PAGE>

GMAC Commercial Credit LLC
     Tarrant Apparel Group
     Tag Mex, Inc.
     Fashion Resource (TCL), Inc.
     March    , 2002
     Page 5

               "(c) Revolving Advances at any time outstanding which are in
               excess of $45,000,000 shall be deemed to be Base Rate Advances."

                         (i) Section 4.1 shall also be amended on Sep. 30, 2002
               by deleting the text of the final paragraph thereof and by adding
               the following text thereto which shall state:

               "In no event shall the LIBOR RATE plus the Applicable LIBOR Rate
               Margin nor the Alternate Base Rate plus the Applicable Alternate
               Base Rate Margin (which ever is applicable as the case may be) be
               less than 6% for the purposes of calculating Interest on
               outstanding Revolving Credit Advances and other Obligations under
               this Agreement. Upon and after the occurrence of an Event of
               Default, and during the continuation thereof, the Obligations
               hereunder shall bear interest at the Alternate Base Rate plus the
               Applicable Alternate Base Rate Margin plus any increased charges
               (if applicable) assessed pursuant to Section 2.2 hereof plus two
               percent (2%) per annum (the "Default Rate")."

                    (i) Section 2.2 of the Agreement shall be amended by
     deleting the last sentence therein (as inserted by the Third Amendment to
     the Agreement dated as of February 2001, and by inserting the following
     sentence in its place and stead:

               "Should at any time any overadvance outstanding under this
               Agreement exceed that which is permitted under the Agreement
               (regardless of whether same is as a result of scheduled
               overadvance reductions, monthly charges, Borrowing Base
               Collateral reductions, or for any other reason), Borrower shall
               have 5 days to repay such excess and failure to do so shall
               constitute an Event of Default hereunder."

          It is also hereby agreed that the temporary discretionary overadvance
     of Ten Million Dollars ($10,000,000) which was to be outstanding from the
     15th day of each month to the 5th Business Day of the following month
     (referred to in our letter agreement of November 2001 as the "Monthly
     Overadvance") shall be amortized at the rate of One Million Dollars
     ($1,000,000) per month commencing April 15, 2002 and on the 15th day of
     each consecutive month thereafter. In the event that you are able to close
     a loan transaction with UPS Financial to finance your assets located in
     Mexico (the terms of which must be satisfactory to us) then in such event
     any then remaining balance then outstanding on the Monthly Overadvance
     shall be paid in two (2) equal consecutive monthly installments commencing
     on the 15th of the month

<PAGE>

GMAC Commercial Credit LLC
     Tarrant Apparel Group
     Tag Mex, Inc.
     Fashion Resources (TCL), Inc.
     March    , 2002
     Page 6

     immediately following your closing with UPS Financial and on the 15th day
     of the next month following thereafter.

          Additionally you agree that effective August 31, 2002 the reduction of
     the Overadvance Limit and the overadvance outstanding thereunder shall be
     accelerated and that the amortization payment thereof shall be increased
     such that the amount outstanding thereunder on August 31, 2002 (projected
     to be $16,500,000) shall be ammortized in 24 equal monthly amortization
     payments commencing from August 31, 2002 and continuing on the last day of
     each month thereafter until fully paid.

          Except as hereby or heretofore modified or amended all of the
     provisions of the Agreement shall continue to remain in full force and
     effect in accordance with their original terms.

          If the foregoing correctly set forth the agreement between us please
     execute a copy of this letter in the space provided below and return an
     executed copy of this letter to the undersigned.

                                                 Very truly yours,

                                                 GMAC COMMERCIAL CREDIT LLC

                                                 By: /s/ FRANK IMPERIAL
                                                     ---------------------------
                                                     Name
                                                     Title

     READ AND AGREED TO:

     TARRANT APPAREL GROUP

     By: /s/ P. Chow
        ------------------------
        Name: P. Chow
        Title: CFO

<PAGE>

GMAC Commercial Credit LLC
     Tarrant Apparel Group
     Tag Mex, Inc.
     Fashion Resource (TCL), Inc.
     March    , 2002
     Page 7

     TAG MEX, INC.

     By: /s/ P. Chow
        -----------------------------
        Name: P. CHOW
        Title: C F O

     FASHION RESOURCE (TCL), INC.

     By: /s/ P. Chow
        -----------------------------
        Name: P. CHOW
        Title: C F O

     UNITED APPAREL VENTURES, LLC

     By: /s/ Eddy Yuen
         ----------------------------
         Name: Eddy YUEN
         Title: Director

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