Document:

PROMISSORY NOTE

$500,000.00                                                        July 12, 2000

RSI Holdings, Inc.
28 East Court Street
Greenville, South Carolina 29601
(Individually and collectively "Borrower")

First Union National Bank
55 Beattie Place
Greenville, South Carolina 29602
(Hereinafter referred to as "Bank")

Borrower  promises  to pay to the order of Bank,  in lawful  money of the United
States of  America,  at its office  indicated  above or  wherever  else Bank may
specify,  the sum of Five Hundred  Thousand and No/100 Dollars  ($500,000.00) or
such sum as may be advanced and outstanding  from time to time, with interest on
the  unpaid  principal  balance  at the rate and on the terms  provided  in this
Promissory Note  (including all renewals,  extensions or  modifications  hereof,
this "Note").

RENEWAL/MODIFICATION.  This Promissory Note renews, extends and/or modifies that
certain  Promissory Note dated April 30, 1999 (the "Original  Promissory Note"),
evidencing an original principal amount of $500,000.00.  This Promissory Note is
not a novation.

LOAN  AGREEMENT.  This Note is subject to the  provisions  of that  certain Loan
Agreement  between Bank and Borrower dated April 30, 1999, as modified from time
to time.

SECURITY.  (a) MICCO  Corporation  has granted  Bank a security  interest in the
collateral  described  in the Loan  Documents,  including,  but not  limited to,
personal  property  collateral  described in that certain Security  Agreement of
even date herewith.  (b) Minor H. Mickel as granted Bank a security  interest in
the collateral  described in the Loan  Documents,  including but not limited to,
personal property collateral  described in that certain Security Agreement dated
March 24, 2000.

INTEREST  RATE.  Interest shall accrue on the unpaid  principal  balance of this
Note from the date hereof at the Bank's Prime Rate, as that rate may change from
time to time in  accordance  with changes in the Bank's  Prime Rate,  ("Interest
Rate").  "Bank's  Prime Rate" shall be that rate  announced by Bank from time to
time as its prime rate and is one of several  interest  rate bases used by Bank.
Bank  lends at rates  both  above and below  Bank's  Prime  Rate,  and  Borrower
acknowledges  that Bank's  Prime Rate is not  represented  or intended to be the
lowest or most favorable rate of interest offered by Bank.

DEFAULT  RATE.  In addition to all other  rights  contained  in this Note,  if a
default in the payment of Obligations occurs, all outstanding  Obligations shall
bear  interest at the Interest Rate plus 3% ("Default  Rate").  The Default Rate
shall also apply from demand until the  Obligations  or any judgment  thereon is
paid in full.

INTEREST AND FEES) COMPUTATION (ACTUAL/360). Interest and fees, if any, shall be
computed  on the basis of a 360-day  year for the  actual  number of days in the
applicable  period  ("Actual/360   Computation").   The  Actual/360  Computation
determines the annual  effective  interest yield by taking the stated  (nominal)
rate for a year's  period and then  dividing  said rate by 360 to determine  the
daily  periodic  rate to be  applied  for  each  day in the  applicable  period.
Application of the Actual/360  Computation produces an annualized effective rate
exceeding the nominal rate.

<PAGE>

REPAYMENT  TERMS.  This Note  shall be due and  payable in  consecutive  monthly
payments of accrued interest only, commencing on August 15, 2000, and continuing
on the same day of each month  thereafter  until fully paid. In any event,  this
Note shall be due and  payable in full,  including  all  principal  and  accrued
interest, on demand.

APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of the Obligations  shall be applied to accrued interest and then
to principal. Upon the occurrence of a default in the payment of the Obligations
or a Default  (as  defined  in the other  Loan  Documents)  under any other Loan
Document, monies may be applied to the Obligations in any manner or order deemed
appropriate by Bank.

If any  payment  received  by Bank under this Note or other  Loan  Documents  is
rescinded,  avoided or for any reason  returned  by Bank  because of any adverse
claim or threatened  action,  the returned  payment  shall remain  payable as an
obligation  of all persons  liable  under this Note or other Loan  Documents  as
though such payment had not been made.

DEFINITIONS. Loan Documents. The term "Loan Documents" used in this Note and the
other Loan  Documents  refers to all documents  executed in  connection  with or
related to the loan  evidenced  by this Note and any prior notes which  evidence
all or any portion of the loan evidenced by this Note, and any letters of credit
issued  pursuant  to any loan  agreement  to which  this  Note is  subject,  any
applications  for such  letters of credit and any other  documents  executed  in
connection therewith or related thereto, and may include,  without limitation, a
commitment letter that survives closing, a loan agreement,  this Note,  guaranty
agreements,  security agreements,  security  instruments,  financing statements,
mortgage  instruments,  any  renewals  or  modifications,  whenever  any  of the
foregoing are executed,  but does not include swap  agreements (as defined in 11
U.S.C. Sec. 101).  Obligations.  The term "Obligations" used in this Note refers
to any and all  indebtedness  and other  obligations  under this Note, all other
obligations under any other Loan Document(s), and all obligations under any swap
agreements (as defined in 11 U.S.C. Sec. 101) between Borrower and Bank whenever
executed. Certain Other Terms. All terms that are used but not otherwise defined
in any of the Loan Documents shall have the definitions  provided in the Uniform
Commercial Code.

LATE CHARGE.  If any payments  are not timely made,  Borrower  shall also pay to
Bank a late charge equal to 5% of each payment past due for 15 or more days.

Acceptance by Bank of any late payment without an accompanying late charge shall
not be deemed a waiver of Bank's right to collect such late charge or to collect
a late charge for any subsequent late payment received.

ATTORNEYS'  FEES AND OTHER  COLLECTION  COSTS.  Borrower shall pay all of Bank's
reasonable  expenses  incurred  to  enforce or  collect  any of the  Obligations
including, without limitation, reasonable arbitration,  paralegals',  attorneys'
and experts' fees and expenses,  whether  incurred without the commencement of a
suit,  in  any  trial,  arbitration,  or  administrative  proceeding,  or in any
appellate or bankruptcy proceeding.

USURY. If at any time the effective interest rate under this Note would, but for
this  paragraph,  exceed the maximum  lawful rate,  the effective  interest rate
under this Note shall be the maximum  lawful  rate,  and any amount  received by
Bank in excess of such rate shall be applied to  principal  and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.

DEMAND NOTE.  This is a demand Note and all  Obligations  hereunder shall become
immediately  due and payable upon demand.  In addition,  the  Obligations  shall
automatically become immediately due and payable if Borrower or any guarantor or
endorser of this Note  commences or has  commenced  against it a  bankruptcy  or
insolvency proceeding.

REMEDIES.  Upon the occurrence of a default in the payment of the Obligations or
a  Default  (as  defined  in the other  Loan  Documents)  under  any other  Loan
Document, Bank may at any time thereafter, take the

                                     Page 2

<PAGE>

following  actions:  BANK LIEN.  Foreclose its security interest or lien against
Borrower's accounts without notice. Cumulative. Exercise any rights and remedies
as provided under the Note and the other Loan  Documents,  or as provided by law
or equity.

FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such information
as Bank may reasonably request from time to time,  including without limitation,
financial   statements  and  information   pertaining  to  Borrower's  financial
condition. Such information shall be true, complete, and accurate.

LINE OF CREDIT ADVANCES.  Borrower may borrow, repay and reborrow,  and Bank may
advance and readvance under this Note  respectively  from time to time until the
maturity hereof (each an "Advance" and together the "Advances"),  so long as the
total  principal  balance  outstanding  under this Note at any one time does not
exceed the  principal  amount  stated on the face of this  Note,  subject to the
limitations  described  in any loan  agreement  to which  this Note is  subject.
Bank's  obligation to make Advances under this Note shall  terminate if a demand
for  payment is made under  this Note or if a Default  (as  defined in the other
Loan  Documents)  under any Loan Document  occurs or in any event, on January 1,
2001  unless  renewed  or  extended  by Bank in  writing  upon such  terms  then
satisfactory to Bank. As of the date of each proposed Advance, Borrower shall be
deemed to represent that each  representation made in the Loan Documents is true
as of such date.

If Borrower  subscribes to Bank's cash management services and such services are
applicable  to this line of credit,  the terms of such service shall control the
manner in which funds are  transferred  between the  applicable  demand  deposit
account and the line of credit for credit or debit to the line of credit.

WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and
other Loan  Documents  shall be valid unless in writing and signed by an officer
of Bank.  No  waiver  by Bank of any  Default  (as  defined  in the  other  Loan
Documents) shall operate as a waiver of any other Default or the same Default on
a future  occasion.  Neither  the  failure  nor any delay on the part of Bank in
exercising any right,  power, or remedy under this Note and other Loan Documents
shall  operate  as a waiver  thereof,  nor  shall a single or  partial  exercise
thereof  preclude any other or further  exercise  thereof or the exercise of any
other right, power or remedy.

Each Borrower or any person liable under this Note waives presentment,  protest,
notice of  dishonor,  notice of  intention  to  accelerate  maturity,  notice of
acceleration  of  maturity,  notice of sale and all other  notices  of any kind.
Further,  each agrees that Bank may extend,  modify or renew this Note or make a
novation  of the loan  evidenced  by this  Note for any  period,  and  grant any
releases,  compromises  or indulgences  with respect to any collateral  securing
this Note,  or with  respect to any other  Borrower or any other  person  liable
under this Note or other Loan  Documents,  all  without  notice to or consent of
each Borrower or each person who may be liable under this Note or any other Loan
Document and without  affecting  the liability of Borrower or any person who may
be liable under this Note or any other Loan Document.

MISCELLANEOUS  PROVISIONS.  ASSIGNMENT.  This Note and the other Loan  Documents
shall  inure to the  benefit  of and be  binding  upon  the  parties  and  their
respective  heirs,  legal  representatives,   successors  and  assigns.   Bank's
interests in and rights under this Note and the other Loan  Documents are freely
assignable,  in whole or in part, by Bank. In addition,  nothing in this Note or
any of the other Loan  Documents  shall prohibit Bank from pledging or assigning
this Note or any of the other  Loan  Documents  or any  interest  therein to any
Federal  Reserve  Bank.  Borrower  shall not  assign  its  rights  and  interest
hereunder without the prior written consent of Bank, and any attempt by Borrower
to assign without Bank's prior written  consent is null and void. Any assignment
shall not  release  Borrower  from the  Obligations.  Applicable  Law;  Conflict
Between  Documents.  This Note and the other Loan Documents shall be governed by
and  construed  under the laws of the state named in Bank's  address shown above
without regard to that state's conflict of laws principles. If the terms of this
Note should  conflict  with the terms of the Loan  Agreement  or any  commitment
letter that survives closing,  the terms of this Note shall control.  Borrower's
Accounts.  Except as prohibited by law, Borrower grants Bank a security interest
in all of Borrower's accounts with Bank and any of its affiliates. Jurisdiction.
Borrower irrevocably agrees to non-exclusive  personal jurisdiction in the state
named in Bank's address shown above. Severability.

                                     Page 3

<PAGE>
If any provision of this Note or of the other Loan Documents shall be prohibited
or invalid under applicable law, such provision shall be ineffective but only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such  provision  or the  remaining  provisions  of this  Note or  other  such
document.  Notices.  Any notices to Borrower shall be sufficiently  given, if in
writing and mailed or delivered to the  Borrower's  address  shown above or such
other  address as provided  hereunder,  and to Bank, if in writing and mailed or
delivered to Bank's office address shown above or such other address as Bank may
specify  in  writing  from time to time.  In the  event  that  Borrower  changes
Borrower's  address  at any time prior to the date the  Obligations  are paid in
full,  Borrower agrees to promptly give written notice of said change of address
by registered or certified mail, return receipt requested,  all charges prepaid.
Plural;  Captions. All references in the Loan Documents to Borrower,  guarantor,
person,  document or other nouns of reference  mean both the singular and plural
form,  as the case may be,  and the term  "person"  shall  mean any  individual,
person or entity.  The captions contained in the Loan Documents are inserted for
convenience only and shall not affect the meaning or  interpretation of the Loan
Documents. Advances. Bank may, in its sole discretion, make other advances which
shall be deemed to be advances under this Note, even though the stated principal
amount of this Note may be exceeded as a result  thereof.  Posting of  Payments.
All payments  received during normal banking hours after 2:00 p.m. local time at
the office of Bank first shown above shall be deemed  received at the opening of
the next banking day. Joint and Several Obligations.  Each person who signs this
Note as a Borrower (as defined herein) is jointly and severally obligated.  Fees
and Taxes. Borrower shall promptly pay all documentary,  intangible  recordation
and/or similar taxes on this transaction  whether assessed at closing or arising
from time to time.

ARBITRATION.  Upon  demand of any party  hereto,  whether  made  before or after
institution of any judicial proceeding,  any claim or controversy arising out of
or relating to the Loan Documents  between parties hereto (a "Dispute") shall be
resolved by binding  arbitration  conducted under and governed by the Commercial
Financial Disputes  Arbitration Rules (the "Arbitration  Rules") of the American
Arbitration  Association (the "AAA") and the Federal  Arbitration Act.  Disputes
may include,  without limitation,  tort claims,  counterclaims,  a dispute as to
whether a matter is subject to arbitration,  claims brought as class actions, or
claims arising from documents  executed in the future. A judgment upon the award
may be entered in any court having jurisdiction.  Notwithstanding the foregoing,
this  arbitration  provision does not apply to disputes under or related to swap
agreements.  Special Rules.  All arbitration  hearings shall be conducted in the
city named in the  address of Bank first  stated  above.  A hearing  shall begin
within 90 days of demand for  arbitration and all hearings shall conclude within
120 days of demand for  arbitration.  These time limitations may not be extended
unless a party shows cause for extension and then for no more than a total of 60
days. The expedited  procedures set forth in Rule 51 et seg. of the  Arbitration
Rules  shall be  applicable  to claims of less than  $1,000,000.00.  Arbitrators
shall be licensed  attorneys  selected  from the  Commercial  Financial  Dispute
Arbitration  Panel of the AAA.  The parties do not waive  applicable  Federal or
state substantive law except as provided herein.  Preservation and Limitation of
Remedies.  Notwithstanding  the preceding binding  arbitration  provisions,  the
parties agree to preserve,  without diminution,  certain remedies that any party
may exercise before or after an arbitration  proceeding is brought.  The parties
shall  have the  right to  proceed  in any court of  proper  jurisdiction  or by
self-help to exercise or prosecute the following  remedies,  as applicable:  (i)
all rights to foreclose  against any real or personal property or other security
by exercising a power of sale or under  applicable  law by judicial  foreclosure
including  a  proceeding  to  confirm  the sale;  (ii) all  rights of  self-help
including peaceful occupation of real property and collection of rents, set-off,
and peaceful  possession of personal  property;  (iii) obtaining  provisional or
ancillary remedies  including  injunctive  relief,  sequestration,  garnishment,
attachment,  appointment  of  receiver  and  filing  an  involuntary  bankruptcy
proceeding;  and (iv) when applicable, a judgment by confession of judgment. Any
claim or controversy with regard to any party's  entitlement to such remedies is
a Dispute.  Waiver of Exemplary  Damages.  The parties agree that they shall not
have a remedy of punitive or  exemplary  damages  against  other  parties in any
Dispute and hereby  waive any right or claim to punitive  or  exemplary  damages
they have now or which may arise in the future in  connection  with any  Dispute
whether the Dispute is resolved by  arbitration  or  judicially.  Waiver of Jury
Trial. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE
IRREVOCABLY  WAIVED  ANY  RIGHT  THEY MAY HAVE TO JURY  TRIAL  WITH  REGARD TO A
DISPUTE.

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<PAGE>

IN WITNESS  WHEREOF,  Borrower,  on the day and year first  above  written,  has
caused this Note to be executed under seal.

PLACE OF EXECUTION AND DELIVERY.  Borrower  hereby  certifies that this Note and
the Loan Documents were executed in the State of North Carolina and delivered to
Bank in the State of North Carolina.

                                    RSI Holdings, Inc.
                                    Taxpayer Identification Number: 56-1200363

                                     By: /s/ Buck A. Mickel         (SEAL)
                                         ---------------------------------
                                          Buck A. Mickel, President/CEO

                                     Page 5

<PAGE>

                               SECURITY AGREEMENT

                                                           July 12, 2000
MICCO Corporation
c/o uck A. Mickel
28 East Court Street
Greenville, South Carolina 29601
(Individually and collectively
 "Debtor")

First Union National Bank
55 Beattie Place
Greenville, South Carolina 29602
(Hereinafter referred to as "Bank")

This  Security  Agreement  amends and restates that certain  Security  Agreement
dated April 30, 1999.

For value received and to secure payment and  performance of the Promissory Note
executed  by RSI  Holdings,  Inc.  ("Borrower")  of even date  herewith,  in the
original  principal amount of $500,000.00,  payable to Bank, and any extensions,
renewals,  modifications  or  novations  thereof  (the  "Note"),  this  Security
Agreement and the other Loan Documents, and any other obligations of Borrower to
Bank however created, arising or evidenced, whether direct or indirect, absolute
or contingent, now existing or hereafter arising or acquired, and whether or not
evidenced by a Loan Document, including swap agreements (as defined in 11 U.S.C.
Sec.  101),  future  advances,  and all costs and  expenses  incurred by Bank to
obtain,  preserve,  perfect and enforce the security interest granted herein and
to maintain,  preserve and collect the property subject to the security interest
(collectively,  "Obligations"),  Debtor  hereby  grants  to  Bank  a  continuing
security interest in and lien upon the following described property, whether now
owned or hereafter acquired,  and any additions,  replacements,  accessions,  or
substitutions  thereof and all cash and non-cash  proceeds and products  thereof
(collectively, "Collateral"):

              SEE SCHEDULE A ATTACHED HERETO AND MADE A PART HEREOF

 Debtor hereby represents and agrees that:

OWNERSHIP.  Debtor owns the Collateral.  The Collateral is free and clear of all
liens,  security  interests,  and claims  except  those  previously  reported in
writing to Bank,  and Debtor  will keep the  Collateral  free and clear from all
liens,  security  interests and claims,  other than those  granted to Bank.  All
securities  and security  entitlements  pledged as Collateral are fully paid and
non-assessable   and  if   certificated,   have  been  delivered  to  Bank  with
unrestricted  endorsements.  All income,  dividends,  earnings  and profits with
respect to the  Collateral  shall be reported  for state and federal  income tax
purposes as attributable to the Debtor and not Bank, and Third Party (as defined
herein), Bank or any other person authorized to report income distributions, are
authorized  to issue IRS Forms 1099  indicating  Debtor as the recipient of such
income, earnings and profits.

NAME AND  OFFICES.  There has been no change in the name of Debtor,  or the name
under which Debtor conducts  business,  within the five years preceding the date
hereof and Debtor has not moved its  executive  offices or residence  within the
five years preceding the date hereof except as previously reported in writing to
Bank.

TITLE/TAXES. Debtor has good and marketable title to Collateral and will warrant
and defend same against all claims.  Debtor will not  transfer,  sell,  or lease
Collateral (except as permitted herein). Debtor agrees to pay promptly all taxes
and  assessments  upon  or for  the  use of  Collateral  and  on  this  Security
Agreement. At its option, Bank may discharge taxes, liens, security interests or
other encumbrances at

<PAGE>
any time levied or placed on  Collateral.  Debtor  agrees to reimburse  Bank, on
demand, for any such payment made by Bank. Any amounts so paid shall be added to
the Obligations.

WAIVERS. Debtor waives presentment,  demand, protest, notice of dishonor, notice
of default, demand for payment, notice of intention to accelerate, and notice of
acceleration of maturity.  Debtor further agrees not to assert against Bank as a
defense (legal or equitable), as a set-off, as a counterclaim, or otherwise, any
claims  Debtor may have  against  any seller or lessor  that  provided  personal
property or services  relating to any part of the Collateral.  Debtor waives all
exemptions and homestead rights with regard to the Collateral. Debtor waives any
and all  rights  to  notice  or to  hearing  prior to  Bank's  taking  immediate
possession or control of any Collateral, and to any bond or security which might
be required by  applicable  law prior to the exercise of any of Bank's  remedies
against any Collateral. All rights of Bank and security interests hereunder, and
all obligations of Debtor hereunder,  shall be absolute and  unconditional,  not
discharged  or  impaired  irrespective  of (and  regardless  of  whether  Debtor
receives any notice of): (i) any lack of validity or  enforceability of any Loan
Document;  (ii)  any  change  in  the  time,  manner  or  place  of  payment  or
performance,  or in any  term,  of all or  any of the  Obligations  or the  Loan
Documents or any other  amendment  or waiver of or any consent to any  departure
from any Loan Document;  (iii) any exchange,  release or  non-perfection  of any
collateral,  or  any  release  of or  modifications  of the  obligations  of any
guarantor  or other  obligor;  (iv) any  amendment  or waiver of or  consent  to
departure from any Loan Document or other agreement.  To the extent permitted by
law,  Debtor hereby waives any rights under any valuation,  stay,  appraisement,
extension  or  redemption  laws now  existing or which may  hereafter  exist and
which, but for this provision, might be applicable to any sale or disposition of
the  Collateral  by Bank;  and any  other  circumstance  which  might  otherwise
constitute a defense  available  to, or a discharge of any party with respect to
the Obligations.

NOTIFICATIONS.  Debtor will notify Bank in writing at least 30 days prior to any
change in: (i) Debtor's chief place of business and/or residence;  (ii) Debtor's
name or  identity;  or (iii)  Debtor's  corporate/organizational  structure.  In
addition,  Debtor shall promptly  notify Bank of any claims or alleged claims of
any  other  person  or  entity  to  the  Collateral  or the  institution  of any
litigation,   arbitration,    governmental   investigation   or   administrative
proceedings against or affecting the Collateral.  Debtor will keep Collateral at
the  location(s)  previously  provided to Bank until such time as Bank  provides
written  advance  consent to a change of location.  Debtor will bear the cost of
preparing and filing any documents necessary to protect Bank's liens.

FINANCING STATEMENTS,  POWER OF ATTORNEY. No financing statement (other than any
filed by Bank or  disclosed  above)  covering any  Collateral  is on file in any
public  filing  office.  On request of Bank,  Debtor  will  execute  one or more
financing  statements  in form  satisfactory  to Bank and will pay all costs and
expenses of filing the same or of filing this  Security  Agreement in all public
filing  offices,  where  filing  is  deemed  by  Bank to be  desirable.  Bank is
authorized to file financing  statements relating to Collateral without Debtor's
signature where  authorized by law. Debtor hereby  constitutes and appoints Bank
the true and lawful  attorney of Debtor with full power of  substitution to take
any and  all  appropriate  action  and to  execute  any  and  all  documents  or
instruments  that may be necessary or  desirable to  accomplish  the purpose and
carry out the terms of this Security Agreement,  including,  without limitation,
endorsements desirable for transfer or delivery of any Collateral,  registration
of any Collateral  under  applicable  laws,  retitling any Collateral,  receipt,
endorsement  and/or  collection  of all checks and other  orders for  payment of
money  payable to Debtor with  respect to  Collateral.  The  foregoing  power of
attorney is coupled with an interest and shall be  irrevocable  until all of the
Obligations have been paid in full. Neither Bank nor anyone acting on its behalf
shall be liable for acts, omissions,  errors in judgment, or mistakes in fact in
such  capacity  as  attorney-in-fact.  Debtor  ratifies  all  acts  of  Bank  as
attorney-in-fact. Debtor agrees to take such other actions as might be requested
for the perfection,  continuation  and  assignment,  in whole or in part, of the
security  interests  granted  herein.  If  certificates,   passbooks,  or  other
documentation  or  evidence  is/are  issued  or  outstanding  as to  any  of the
Collateral,  Debtor  will cause the  security  interests  of Bank to be properly
protected, including perfection by notation thereon or delivery thereof to Bank.
Upon  Bank's  request,  Debtor  will,  at its  own  expense:  (i) do all  things
determined by Bank to be desirable to register such Collateral or qualify for an
exemption from registration,  under the provisions of all applicable  securities
laws, and (ii) otherwise do or cause to be done all other acts and things as may
be necessary to make the sale of the Collateral valid, binding and in compliance
with applicable law.

                                     Page 2

<PAGE>
STOCK, DIVIDENDS.  If, with respect to any securities pledged hereunder, a stock
dividend is declared,  any stock split made or right to subscribe is issued, all
the certificates for the shares representing such stock dividend, stock split or
right to subscribe will be immediately delivered,  duly endorsed, to the Bank as
additional  Collateral,  and any cash or non-cash proceeds and products thereof,
including  investment  property and security  entitlements  will be  immediately
delivered to Bank.  Debtor  acknowledges that such grant includes all investment
property and security entitlements,  now existing or hereafter arising, relating
to such  securities.  In  addition,  Debtor  agrees to execute  such notices and
instructions to securities intermediaries as Bank may reasonably request.

VALUE REQUIREMENT.  The outstanding  balance of the Obligations shall not exceed
at any time 50.00% of the Fair Market  Value of the  securities  pledged to Bank
hereunder.  If at any time the outstanding  balance of the  Obligations  exceeds
this percentage, Debtor shall, within 3 business days, either pledge and deliver
additional  securities or reduce the  outstanding  balance of the Obligations so
that the  outstanding  balance  of the  Obligations  does not  exceed the stated
percentage  as of the close of business on the day  immediately  preceding  such
delivery or  reduction.  "Fair Market  Value" means the value of the  securities
pledged  hereunder  based on the closing price per unit of any of the investment
property  which is a part of the  Collateral  as quoted or  reported in The Wall
Street  Journal  or,  if not  available,  other  customary  publication  of such
information,  plus the amount of any cash or other financial  assets  comprising
the  Collateral.  If the Fair Market Value of any securities  pledged  hereunder
cannot be determined by the foregoing  procedure,  the Fair Market Value of such
Collateral  shall  be  determined  by the  Bank  by  reference  to  such  public
information as may be available.

NO TRADING OF COLLATERAL. Until a Default occurs, Debtor shall have the right to
vote the securities pledged hereunder;  provided,  however, Debtor may not sell,
transfer,  exchange for other property or cash  ("Trade") or otherwise  exercise
rights  with  respect to such  Collateral  or receive  any  distributions,  cash
dividends,  interest, or proceeds from such Collateral without the prior written
consent  of the  Bank,  and any  such  distributions,  dividends,  interest,  or
proceeds  shall be held in trust for, and  immediately  delivered to, Bank.  Any
consent pursuant to this paragraph shall be in Bank's sole discretion.

COLLATERAL DUTIES. Bank shall have no custodial or ministerial duties to perform
with respect to Collateral  pledged  except as set forth  herein;  and by way of
explanation and not by way of limitation,  Bank shall incur no liability for any
of the following:  (i) loss or depreciation of Collateral  (unless caused by its
willful misconduct or gross  negligence),  (ii) failure to present any paper for
payment or protest, to protest or give notice of nonpayment, or any other notice
with respect to any paper or  Collateral,  (iii)  failure to  ascertain,  notify
Debtor  of,  or take  any  action  in  connection  with  any  conversion,  call,
redemption,  retirement or any other event relating to any of the Collateral, or
failure  to notify any party  hereto  that  Collateral  should be  presented  or
surrendered  for  any  such  reason.  Debtor  acknowledges  that  Bank is not an
investment  advisor or insurer with respect to the  Collateral;  and Bank has no
duty to advise Debtor of any actual or  anticipated  changes in the value of the
Collateral.

TRANSFER OF  COLLATERAL.  Bank may assign its rights in  Collateral  or any part
thereof to any assignee who shall  thereupon  become  vested with all the powers
and rights herein given to Bank with respect to the property so transferred  and
delivered,  and Bank shall  thereafter be forever  relieved and fully discharged
from any  liability  with  respect to such  property  so  transferred,  but with
respect to any  property  not so  transferred,  Bank shall retain all rights and
powers hereby given.

INSPECTION,  BOOKS AND  RECORDS.  Debtor  will at all times  keep  accurate  and
complete  records  covering  each item of  Collateral,  including  the  proceeds
therefrom.  Bank, or any of its agents, shall have the right, at intervals to be
determined  by Bank and  without  hindrance  or delay,  to inspect,  audit,  and
examine the Collateral and to make extracts from the books,  records,  journals,
orders, receipts, correspondence and other data relating to Collateral, Debtor's
business or any other transaction between the parties hereto. Debtor will at its
expense furnish Bank copies thereof upon request.

CROSS COLLATERALIZATION  LIMITATION. As to any other existing or future consumer
purpose loan made by Bank to Debtor,  within the meaning of the Federal Consumer
Credit Protection Act, Bank

                                     Page 3

<PAGE>
expressly waives any security  interest granted herein in Collateral that Debtor
uses as a principal dwelling and household goods.

ATTORNEYS'  FEES AND OTHER COSTS OF  COLLECTION.  Debtor shall pay all of Bank's
reasonable  expenses  incurred  in  enforcing  this  Security  Agreement  and in
preserving and liquidating Collateral,  including but not limited to, reasonable
arbitration,  paralegals',  attorneys'  and experts' fees and expenses,  whether
incurred with or without the  commencement  of a suit,  trial,  arbitration,  or
administrative proceeding, or in any appellate or bankruptcy proceeding.

DEFAULT.  If any of the  following  occurs,  a default  ("Default")  under  this
Security Agreement shall exist: (i) the failure of timely payment or performance
of any of Obligations  or a default under any Loan Document;  (ii) any breach of
any  representation  or  agreement  contained  or referred  to in this  Security
Agreement or other Loan Document;  (iii) any loss, theft, substantial damage, or
destruction  of  Collateral  not  fully  covered  by  insurance,  or as to which
insurance proceeds are not remitted to Bank within 30 days of the loss; (iv) any
sale, lease, or encumbrance of any Collateral not specifically  permitted herein
without prior written consent of Bank; (v) the making of any levy,  seizure,  or
attachment on or of  Collateral  which is not removed  within 10 days;  (vi) the
death of, appointment of guardian for,  dissolution of, termination of existence
of, loss of good standing status by,  appointment of a receiver for,  assignment
for the benefit of creditors of, or commencement of any bankruptcy or insolvency
proceeding by or against Debtor,  its  Subsidiaries  or Affiliates  ("Affiliate"
shall have the meaning as defined in 11 U.S.C. Sec. 101; and "Subsidiary"  shall
mean any corporation of which more than 50% of the issued and outstanding voting
stock is owned directly or indirectly by Debtor), if any, or any general partner
of or the holder(s) of the majority  ownership  interests in Debtor or any party
to the Loan  Documents;  or (vii) any  attempt to  terminate,  revoke,  rescind,
modify,  or  violate  the terms of this  Security  Agreement  without  the prior
written consent of Bank.

REMEDIES ON DEFAULT  (INCLUDING POWER OF SALE). If a Default occurs,  all of the
Obligations shall be immediately due and payable,  without notice and Bank shall
have all the rights and remedies of a secured party under the Uniform Commercial
Code.  Without  limitation  thereto,  Bank shall have the  following  rights and
remedies:  (i) to take  immediate  possession of  Collateral,  without notice or
resort to legal  process,  and for such  purpose,  to enter upon any premises on
which  Collateral  or any part  thereof may be  situated  and to remove the same
therefrom,  or, at its option, to render Collateral  unusable or dispose of said
Collateral  on  Debtor's  premises;  (ii) to  require  Debtor  to  assemble  the
Collateral  and make it available to Bank at a place to be  designated  by Bank;
(iii) to  exercise  its right of set-off or bank lien as to any monies of Debtor
deposited in accounts of any nature maintained by Debtor with Bank or affiliates
of Bank, without advance notice, regardless of whether such accounts are general
or special; (iv) to dispose of Collateral,  as a unit or in parcels,  separately
or with any real property interests also securing the Obligations, in any county
or place to be  selected  by Bank,  at either  private or public  sale (at which
public sale Bank may be the  purchaser)  with or without  having the  Collateral
physically  present at said sale.  In addition to the  foregoing,  Bank shall be
authorized to: transfer into Bank's name or the name of its nominee,  all or any
part of the Collateral;  receive all interest,  dividends, and other proceeds of
the  Collateral;  notify any person  obligated on any Collateral of the security
interest of Bank  therein and require  such person to make  payment  directly to
Bank;  demand,  sue for,  collect or receive  the  Collateral  and any  proceeds
thereof,  and/or make any settlement or compromise as Bank deems  desirable with
respect to any Collateral;  and exercise any voting,  conversion,  registration,
purchase  or other  rights of an  owner,  holder  or  entitlement  holder of the
Collateral.  Debtor agrees that Bank may exercise its rights under this Security
Agreement  without regard for the actual or potential tax consequences to Debtor
under federal or state law and without regard to any  instructions or directives
given Bank by Debtor.

Any notice of sale, disposition or other action by Bank required by law and sent
to Debtor at Debtor's address shown above, or at such other address of Debtor as
may from time to time be shown on the records of Bank,  at least 5 days prior to
such  action,  shall  constitute  reasonable  notice to Debtor.  Notice shall be
deemed given or sent when mailed postage prepaid to Debtor's address as provided
herein.  Bank  shall be  entitled  to apply  the  proceeds  of any sale or other
disposition of the Collateral, and the payments received by Bank with respect to
any of the  Collateral,  to  Obligations  in such  order and  manner as Bank may
determine.  Collateral  that is  subject  to  rapid  declines  in  value  and is
customarily sold in

                                     Page 4
<PAGE>

recognized  markets may be disposed of by Bank in a  recognized  market for such
collateral  without  providing  notice  of  sale.  Debtor  waives  any  and  all
requirements  that the Bank sell or dispose of all or any part of the Collateral
at any particular time,  regardless of whether Debtor has requested such sale or
disposition.

REMEDIES  ARE  CUMULATIVE.  No failure on the part of Bank to  exercise,  and no
delay in exercising,  any right,  power or remedy  hereunder  shall operate as a
waiver thereof,  nor shall any single or partial  exercise by Bank or any right,
power or remedy hereunder  preclude any other or further exercise thereof or the
exercise  of any right,  power or  remedy.  The  remedies  herein  provided  are
cumulative and are not exclusive of any remedies  provided by law, in equity, or
in other Loan Documents.

MISCELLANEOUS.  (i) Amendments and Waivers. No waiver, amendment or modification
of any provision of this Security Agreement shall be valid unless in writing and
signed by Debtor and an officer of Bank.  No waiver by Bank of any Default shall
operate  as a waiver of any other  Default  or of the same  Default  on a future
occasion.  (ii) Assignment.  All rights of Bank hereunder are freely assignable,
in whole or in part,  and shall  inure to the benefit of and be  enforceable  by
Bank, its successors, assigns and affiliates. Debtor shall not assign its rights
and  interest  hereunder  without  the prior  written  consent of Bank,  and any
attempt by Debtor to assign  without  Bank's prior  written  consent is null and
void.  Any  assignment  shall not  release  Debtor  from the  Obligations.  This
Security  Agreement  shall be  binding  upon  Debtor,  and the  heirs,  personal
representatives,  successors,  and  assigns of  Debtor.  (iii)  Applicable  Law;
Conflict  Between  Documents.  This Security  Agreement shall be governed by and
construed  under the law of the state  named in the  address  of the Bank  first
shown above without regard to that state's conflict of laws  principles.  If any
terms of this  Security  Agreement  conflict  with the  terms of any  commitment
letter or loan  proposal,  the terms of this Security  Agreement  shall control.
(iv)  Jurisdiction.   Debtor   irrevocably  agrees  to  non-exclusive   personal
jurisdiction  in the  state in  which  the  office  of Bank as  stated  above is
located. (v) Severability.  If any provision of this Security Agreement shall be
prohibited  by  or  invalid  under  applicable  law,  such  provision  shall  be
ineffective  but only to the extent of such  prohibition or invalidity,  without
invalidating the remainder of such provision or the remaining provisions of this
Security  Agreement.  (vi) Notices.  Any notices to Debtor shall be sufficiently
given,  if in writing and mailed or  delivered  to the  address of Debtor  shown
above or such other  address as provided  hereunder;  and to Bank, if in writing
and mailed or  delivered  to Bank's  office  address  shown  above or such other
address  as Bank may  specify in  writing  from time to time.  In the event that
Debtor  changes  Debtor's  mailing  address  at any  time  prior to the date the
Obligations  are paid in full,  Debtor agrees to promptly give written notice of
said  change  of  address  by  registered  or  certified  mail,  return  receipt
requested,  all charges prepaid.  (vii) Captions.  The captions contained herein
are  inserted  for  convenience  only  and  shall  not  affect  the  meaning  or
interpretation of this Security  Agreement or any provision  hereof.  The use of
the plural  shall  also mean the  singular,  and vice  versa.  (viii)  Joint and
Several  Liability.  If more than one party has signed this Security  Agreement,
such  parties  are jointly  and  severally  obligated  hereunder.  (ix)  Binding
Contract. Debtor by execution and Bank by acceptance of this Security Agreement,
agree  that each  party is bound by all terms and  provisions  of this  Security
Agreement.  (x)  Loan  Documents.  The  term  "Loan  Documents"  refers  to  all
documents,  whether now or hereafter  existing,  executed in connection  with or
related to the  Obligations  and may  include,  without  limitation  and whether
executed by Debtor or others,  commitment  letters,  loan  agreements,  guaranty
agreements,  confirmations,  deposit or other similar agreements, other security
agreements,  letters of credit,  instruments,  financing statements,  mortgages,
deeds  of  trust,  deeds to  secure  debt,  and any  amendments  or  supplements
(excluding swap agreements as defined in 11 U.S.C. Sec. 101).

ARBITRATION.  Upon  demand of any party  hereto,  whether  made  before or after
institution of any judicial proceeding,  any claim or controversy arising out of
or relating to the Loan Documents  between parties hereto (a "Dispute") shall be
resolved by binding  arbitration  conducted under and governed by the Commercial
Financial Disputes  Arbitration Rules (the "Arbitration  Rules") of the American
Arbitration  Association (the "AAA") and the Federal  Arbitration Act.  Disputes
may include,  without limitation,  tort claims,  counterclaims,  a dispute as to
whether a matter is subject to arbitration,  claims brought as class actions, or
claims arising from documents  executed in the future. A judgment upon the award
may be entered in any court having jurisdiction.  Notwithstanding the foregoing,
this  arbitration  provision does not apply to disputes under or related to swap
agreements. Special Rules. All arbitration hearings shall be

                                     Page 5
<PAGE>
conducted in the city named in the address of Bank first stated above. A hearing
shall begin  within 90 days of demand for  arbitration  and all  hearings  shall
conclude within 120 days of demand for  arbitration.  These time limitations may
not be extended  unless a party shows cause for  extension  and then for no more
than a total of 60 days.  The expedited  procedures set forth in Rule 51 et seg.
of  the   Arbitration   Rules  shall  be  applicable  to  claims  of  less  than
$1,000,000.00.  Arbitrators  shall  be  licensed  attorneys  selected  from  the
Commercial  Financial  Dispute  Arbitration Panel of the AAA. The parties do not
waive  applicable  Federal or state  substantive law except as provided  herein.
Preservation and Limitation of Remedies.  Notwithstanding  the preceding binding
arbitration  provisions,  the parties  agree to  preserve,  without  diminution,
certain  remedies  that any party may  exercise  before or after an  arbitration
proceeding is brought.  The parties shall have the right to proceed in any court
of proper  jurisdiction  or by self-help to exercise or prosecute  the following
remedies,  as  applicable:  (i) all  rights  to  foreclose  against  any real or
personal  property  or other  security  by  exercising  a power of sale or under
applicable  law by judicial  foreclosure  including a proceeding  to confirm the
sale;  (ii) all  rights  of  self-help  including  peaceful  occupation  of real
property and collection of rents,  set-off,  and peaceful possession of personal
property; (iii) obtaining provisional or ancillary remedies including injunctive
relief,  sequestration,  garnishment,  attachment,  appointment  of receiver and
filing  an  involuntary  bankruptcy  proceeding;  and (iv)  when  applicable,  a
judgment by confession of judgment.  Any claim or controversy with regard to any
party's entitlement to such remedies is a Dispute.  Waiver of Exemplary Damages.
The parties  agree that they shall not have a remedy of  punitive  or  exemplary
damages against other parties in any Dispute and hereby waive any right or claim
to punitive or exemplary  damages they have now or which may arise in the future
in connection with any Dispute whether the Dispute is resolved by arbitration or
judicially.  Waiver of Jury Trial.  THE PARTIES  ACKNOWLEDGE THAT BY AGREEING TO
BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY
TRIAL WITH REGARD TO A DISPUTE.

IN WITNESS WHEREOF,  Debtor, on the day and year first written above, has caused
this Security Agreement to be executed under seal.

                                     MICCO Corporation
                                     Taxpayer Identification Number: 57-0551217

                                     By: /s/ Buck A. Mickel      (SEAL)
                                         ----------------------------------
                                     Buck A. Mickel, Vice President

                                     Page 6

<PAGE>

                                Schedule A to UCC

All securities  that are  certificated  and held in vault at Bank,  described as
follows:

Common  stock  issued by Delta  Woodside  Industries,  Inc. in the name of MICCO
Corporation, cusip number 247909 10 4. Shares represented in certificate numbers
as follows:

 Certificate No.                                        Shares

 AC 2640                                                20,000
 AC 2641                                                20,000
 AC 2642                                                20,000
 AC 2643                                                20,000
 AC 2644                                                20,000
 AC 2645                                                20,000
 AC 2646                                                20,000
 AC 2669                                                10,000
 AC 2670                                                10,000
 AC 2671                                                10,000
 AC 2638                                                20,000
 AC 2639                                                20,000
 AC 2667                                                10,000
 AC 2672                                                10,000
 AC 2673                                                10,000
 AC 2674                                                10,000
 AC 2675                                                10,000
 AC 2676                                                10,000
 AC 2677                                                10,000
 AC 2678                                                10,000
 AC 2679                                                10,000
 AC 2680                                                10,000
 AC 2681                                                10,000
 AC 2682                                                10,000
 AC 2683                                                10,000
 AC 2684                                                10,000
 AC 2685                                                10,000
 AC 2686                                                10,000
 AC 2687                                                10,000
 AC 2703                                                10,000
 AC 2704                                                10,000
 AC 2751                                                 5,000
 AC 2752                                                 5,000
 AC 2753                                                 5,000
 AC 2762                                                 5,000
 AC 2763                                                 5,000
 AC 2764                                                 5,000
 AC 2765                                                 5,000
 AC 2770                                                 5,000
 AC 2793                                                 9,234

All  products  and  proceeds   (including   investment   property  and  security
entitlements)  of any of the  property  described  above  in any  form,  and all
proceeds of such products.SPECIMEN COMMON STOCK CERTIFICATE

                                    New York

(Certificate No)                                            (Certificate Amount)

                       Community Home Mortgage Corporation

                  20,000,000 SHARES OF COMMON STOCK AUTHORIZED
                                 $0.01 PAR VALUE

           This Certificates that (Shareholder Name) is the owner of

               (Share Amount) fully paid and non-assessable Shares
            of Common Shares of Community Home Mortgage Corporation

Transferable only on the books of the Corporation by the holder hereof in person
or by duly authorized Attorney upon surrener of the Certificate properly
endorsed.

In Witness Whereof the said Corporation has caused this Certificate to be signed
by its duly authorized officers and to be sealed with the Seal of the
Corporation this (DATE OF ISSUE)

IRA SILVERMAN, PRESIDENT           Corporate         DANIEL SILVERMAN, SECRETARY
                                      Seal

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