GMAC COMMERCIAL FINANCE LLC
                           1290 Avenue of the Americas
                            New York, New York 10104


                                                           as of August 18, 2004

DELTA MILLS, INC.
100 Augusta Street
Greenville, South Carolina 29601


                           Re: Amendment to Credit Agreement

Gentlemen:

         Reference is made to the Revolving Credit and Security  Agreement dated
as of March 31, 2000 (as amended,  restated,  renewed,  extended,  supplemented,
substituted or otherwise modified, the "Credit Agreement"), by and between DELTA
MILLS, INC. ("Borrower") and GMAC COMMERCIAL FINANCE LLC, as successor by merger
with GMAC COMMERCIAL  CREDIT LLC, as a lender and as agent for the lenders party
to the  Credit  Agreement  from time to time (in such  capacity,  "Agent").  All
capitalized  terms  used  and  not  otherwise  defined  herein  shall  have  the
respective meanings ascribed to them in the Credit Agreement.

         Borrower has requested that Agent make certain amendments to the Credit
Agreement  and Agent has agreed to do so,  subject  to the terms and  conditions
contained herein.

         A. Amendments to Credit Agreement.

                  1. The  definition  of  "Maximum  Loan  Amount"  set  forth in
Article I of the Credit  Agreement  is amended and  restated in its  entirety to
read as follows:

                     ""Maximum Loan Amount" shall mean $38,000,000."

                  2.  Section  9.6(a) and (b) of the Credit  Agreement is hereby
deleted and restated in its entirety to read as follows:


<PAGE>



                           "6.9   EBITDA.  Maintain as of the last day  of  each
                  of  Borrower's  fiscal quarters set forth below, EBITDA of not
                  less than the amounts set forth below:

                           Minimum          Four Quarter
                           EBITDA           Period Ending

                           $7,800,000       First Quarter Fiscal Year, 2005
                           $6,700,000       Second Quarter Fiscal Year, 2005
                           $5,700,000       Third Quarter Fiscal Year, 2005
                           $6,600,000       Fourth Quarter Fiscal Year, 2005

                  and as of the last day of each of Borrower's  fiscal  quarters
                  occurring after the Fourth Quarter Fiscal Year,  2005,  EBITDA
                  of not less than such amounts as shall be agreed to in writing
                  by Agent and Borrower  prior to the  expiration of fiscal year
                  2005.  The failure of Agent and  Borrower to execute a written
                  amendment  to the  Credit  Agreement  establishing  an  EBITDA
                  Covenant for the period  subsequent  to fiscal year 2005 shall
                  constitute an event of default under the Credit Agreement."

         B.       General Provisions.

                  1. Except as specifically  set forth herein,  no other changes
or  modifications to the Credit Agreement or the Other Documents are intended or
implied,  and,  in all  other  respects,  the  Credit  Agreement  and the  Other
Documents  shall continue to remain in full force and effect in accordance  with
their terms as of the date  hereof.  Except as  specifically  set forth  herein,
nothing  contained  herein shall  evidence a waiver or amendment by Agent of any
other provision of the Credit Agreement, or any of the Other Documents nor shall
anything  contained herein be construed as a consent by Agent to any transaction
other than those specifically consented to herein.

                  2. The terms and provisions of this agreement shall be for the
benefit of the parties hereto and their  respective  successors and assigns;  no
other  person,  firm,  entity or  corporation  shall have any right,  benefit or
interest under this agreement.

                  3. This agreement may be signed in counterparts, each of which
shall be an original and all of which taken  together  constitute one amendment.
In making  proof of this  agreement,  it shall not be  necessary  to  produce or
account for more than one counterpart signed by the party to be charged.



                                       2
<PAGE>

         4. This agreement sets forth the entire agreement and  understanding of
the parties with respect to the matters set forth herein.  This agreement cannot
be changed,  modified, amended or terminated except in a writing executed by the
party to be charged.

                                Very truly yours,

                                GMAC COMMERCIAL FINANCE LLC, as Agent and Lender

                                By:        /s/ John Hendrickson
                                    ------------------------------------------

                               Title:     EVP
                                    ------------------------------------------



ACKNOWLEDGED AND AGREED:

DELTA MILLS, INC.

By:      /s/ W.H. Hardman, Jr.
       -------------------------------------------------------
         W.H. Hardman, Jr.
Title:   Chief Financial Officer
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