FIRST AMENDMENT TO
                              EMPLOYMENT AGREEMENT

         THIS FIRST AMENDMENT is made as of the 17th day of May, 2000, by and
among DANIEL H. LEVY (the "Executive"), DONNKENNY APPAREL, INC., a Delaware
corporation (the "Company") and DONNKENNY, INC., a Delaware corporation which
is the parent of the Company ("Donnkenny")

                               W I T N E S S E T H:

          WHEREAS, Executive, the Company and Donnkenny entered into that
 certain Employment Agreement dated as of June 1, 2000, pursuant to which
 Executive was employed as Chairman of the Board and Chief Executive Officer of
 the Company and each of its subsidiaries as well as in the capacity of Chief
 Executive Officer of Donnkenny (the "Employment Agreement"); and

         WHEREAS, the parties to the Employment Agreement deem it to be in their
mutual best interests to amend the Employment Agreement in certain respects in
recognition of the desire of the parties to solidify their respective
relationships on a long-term basis.

          NOW, THEREFORE, in consideration of the mutual covenants and
 agreements of the parties and other good and valuable consideration, the
 receipt and sufficiency of which is hereby acknowledged, effective immediately
 the Employment Agreement is hereby amended as follows:

          1. Section 3 of the Employment Agreement is amended by adding the
following new Section 3.j:

                   j. MOVING EXPENSES. The Company shall, within thirty (30)
          days after request by the Executive, either directly pay or reimburse
          Executive for each of (i) brokerage commissions paid or payable by
          Executive in connection with relocating his current residence from


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           Apartment 38H, 641 5th Avenue, New York, New York (the "Current
           Apartment") to another apartment residence in New York City selected
           by Executive (the "New Apartment"); provided, however, that in no
           event shall the Company's obligation respecting the payment of
           brokerage commissions exceed fifteen percent (15%) of annual rent for
           the New Apartment; and (ii) in the event that the rental term of the
           Current Apartment shall overlap the rental term of the New Apartment
           (the "Overlap Period"), the Company shall pay, during the overlap
           Period, the lesser of the rent for the Current Apartment and the rent
           for the New Apartment; and (iii) the federal, state and local income
           taxes for which Executive is liable on account of the payments
           referred to in Section 3j(i) and (ii) above, together with an amount
           sufficient to satisfy any additional federal, state or local income
           taxes for which Executive is liable on account of the amounts
           received pursuant to this Section 3.j (iii). Subsequent to the date
           Executive shall terminate occupancy of the Current Apartment during
           the current lease term therefor, Executive shall use his reasonable
           best efforts, subject to the terms of the lease for the Current
           Apartment, to make the Current Apartment available to the Company for
           use as a Company apartment. In the event the Company shall utilize
           the Current Apartment as a Company apartment during the current lease
           term, the Company shall indemnify, defend and hold Executive harmless
           from and against any and all losses, liabilities, costs, damages
           (including, without limitation, property damage, wrongful death or
           personal injury), penalties, fines, fees and expenses including,
           without limitation, reasonable legal fees and litigation expenses,
           suffered, sustained or incurred by Executive as a result of, in
           connection with or relating to, or alleged to result from, in
           connection with


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          or in relation to, any breach of lease or acts or omissions associated
          with the occupancy of the Current Apartment.

          2. Section 4 of the Employment Agreement is amended by deleting the
  third sentence of such Section in its entirety and by substituting the
  following revised third sentence of such Section in its stead:

          In addition to and without limiting the generality of the foregoing,
          (i) the Company (x) may obtain and maintain a "key man" life insurance
          policy under which the Company is the named beneficiary in the amount
          of $2,500,000, and (y) shall promptly obtain and maintain a term life
          insurance policy in the amount of $2,500,000, which policy shall be
          owned by the Executive, in each case from a nationally-recognized
          insurance carrier reasonably acceptable to the Executive, and (ii) the
          Company shall provide, in addition to any such insurance regularly
          provided to the Company's executives and/or employees, long-term
          disability insurance which will pay at least sixty percent (60%) of
          Executive's Base Salary until the Executive reaches age 65.

  Section 4 of the Employment Agreement is further amended by deleting from the
  last sentence of such Section the words, "or on or after December 31, 2000."

          3. Section Sb. of the Employment Agreement is amended by deleting from
  the second paragraph of such Section the phrase, "In the event Executive shall
  become disabled or shall die on or after December 31, 2000, then the", and by
  substituting the word, "The", in its stead.

          4. Section Sc.l of the Employment Agreement is deleted in its
  entirety, and the following new Section Sc.l is substituted in its stead:


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                    c. By the Company Without Cause.

                             i. The Company may only terminate the employment of
                    the Executive for Cause or upon the death or disability of
                    the Executive. If the employment of the Executive shall be
                    terminated without Cause and other than as a result of death
                    or disability of the Executive then, within thirty (30) days
                    after such termination, in addition to any amounts payable,
                    or benefits provided for in Section 5c.ii. below, or as
                    otherwise specifically provided for in this Employment
                    Agreement, the Company shall pay to the Executive, by wire
                    transfer of immediately available funds, an amount which is
                    equal to the greater of (x) the aggregate Base Salary
                    Executive would have been entitled to receive following such
                    termination through the end of the term hereof (including
                    any renewals or extensions) or (y) one year's annual Base
                    Salary which is in effect on the date such employment
                    terminates. The Executive shall have no obligation
                    whatsoever to mitigate any damages, costs or expenses
                    suffered or incurred by the Company or Donnkenny with
                    respect to the severance obligations set forth in this
                    Section 5c.1., and no such severance payment which is
                    received or receivable by the Executive shall be subject to
                    any reduction, offset, rebate or repayment as a result of
                    any subsequent employment or other business activity by the
                    Executive including, without limitation, self employment.

           5. Section 5c.ii. of the Employment Agreement is amended by
  deleting the phrase, "on or after December 31, 2000" from the second line of
  such Section.

           6. Section 5d.v. of the Employment Agreement is amended by deleting
  from the third sentence of such Section the phrase, "if such termination
  occurs on or after December 31, 2000,".


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           7. Section Se. of the Employment Agreement is amended by deleting
  from such Section the words, "as of the December Termination Date".

           9. Except as is specifically provided for in this First Amendment to
  Employment Agreement, the Employment Agreement shall remain unamended and in
  full force and effect in accordance with its original terms; provided,
  however, that any prior ancillary letter agreements or other understandings
  entered into between Executive and the Company or Donnkenny with respect to
  the Employment Agreement or Executive's employment by the Company or Donnkenny
  including, without limitation, the letter from Executive to Donnkenny dated
  February 9, 2000 purporting to amend Section 5d.vi. of the Employment
  Agreement upon the occurrence of a certain Change of Control, shall be deemed
  immediately terminated, cancelled, superseded hereby and of no further force
  or effect.

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<PAGE>


           IN WITNESS WHEREOF, the parties hereto have executed and delivered
  this First Amendment to Employment Agreement as of the day and year first
  above written.

                                             DONNKENNY, INC., a Delaware
                                             corporation

                                             By: /s/Lynn Siemers-Cross
                                                 -------------------------------
                                                 Name:Lynn Siemers-Cross
                                                 Title:PRESIDENT, CHIEF
                                                       OPEERATING OFFICER

                                             DONNKENNY APPAREL, INC., a
                                             Delaware corporation

                                             By: /s/Lynn Siemers-Cross
                                                 ------------------------------
                                                 Name:Lynn Siemers-Cross
                                                 Title:PRESIDENT, CHIEF
                                                       OPEERATING OFFICER


                                             EXECUTIVE

                                             /s/Daniel H. Levy
                                             -----------------------------------
                                             DANIEL H. LEVY


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