FORM 10-Q

Exhibit 2.1(k)
                 OMNIBUS TERMINATION AND RELEASE
                        AND RECONVEYANCE

          This OMNIBUS TERMINATION AND RELEASE (this
"Termination"), dated as of March 26, 1997 is made by and between
CONE MILLS CORPORATION, a North Carolina corporation ("Cone
Mills") and DELAWARE FUNDING CORPORATION, a Delaware corporation
("DFC").

                      W I T N E S S E T H:

          WHEREAS, Cone Mills and DFC are parties to that certain
Receivables Purchase Agreement, dated as of August 11, 1992 (as
amended, the "1992 Receivables Purchase Agreement"), by and
between Cone Mills, as seller (Cone Mills in such capacity, the
"Seller") and DFC, as buyer (DFC in such capacity, the "Buyer"),
pursuant to which the Buyer from time to time purchases undivided
percentage ownership interests (the "Purchased Interests") in
trade receivables of the Seller resulting from the sale of goods
or services to its customers by the Seller ("Receivables");

          WHEREAS, Cone Mills, DFC and a certain subsidiary of
Cone Mills desire to enter into new receivables purchase
arrangements (the "1997 Agreements") with respect to the
Receivables; and 

          WHEREAS, it is a condition precedent to the
consummation of the 1997 Agreements that, contemporaneously with
the execution and delivery thereof, the 1992 Receivables Purchase
Agreement be terminated and the parties released from their
obligations thereunder.

          NOW, THEREFORE, in consideration of the premises and
mutual covenants contained herein and for other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound,
do covenant and agree as follows:

          1.   Capitalized terms used in this Termination and not
otherwise defined herein shall have the meanings assigned to them
in the 1992 Receivables Purchase Agreement (such definitions to
be equally applicable to both the singular and the plural forms
of the terms defined).  Any term defined by reference to an
agreement, instrument or other document shall have the meaning so
assigned to it whether or not such document is in effect.  The
words "hereof", "herein" and "hereunder" and words of similar
import when used in this Termination shall refer to this
Termination as a whole and not to any particular provision of
this Termination.
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FORM 10-Q

Exhibit 2.1(k)  (continued)

               2.   DFC, as assignor, hereby assigns and
transfers to Cone Mills all of its right, title and interest in,
to and under, and all of its duties, liabilities and obligations
(collectively, the "Assigned Interests") under or pursuant or
with respect to the Receivables and all Related Security with
respect thereto, and the Purchased Interests therein.

               3.   Cone Mills hereby assumes and accepts the
Assigned Interests and agrees to perform under and be bound by
all the terms of each of the Receivables.

               4.   The 1992 Receivables Purchase Agreement is
hereby terminated and the parties thereto are hereby released
from, and each of the parties hereto hereby cancels and
discharges, any and all obligations and liabilities thereunder
with respect to the period from and after the date hereof.

               5.   Each of the parties hereto agrees that the
termination of the 1992 Receivables Purchase Agreement hereunder
is irrevocable and it will not take any action or make any
direction which could prejudice any of the rights hereunder of
the parties to any such 1992 Receivables Purchase Agreement and
that any such action or direction shall be void.  Each party
hereto agrees that it shall, at any time and from time to time,
promptly and duly execute and deliver any and all such
instruments and documents of further assurance and all such
supplemental instruments and take such further action as a party
to the 1992 Receivables Purchase Agreement may reasonably deem
necessary to carry out the purposes and intent of this
Termination.

               6.   This Termination shall be binding upon the
successors and assigns of each of the parties hereto and shall
inure to the benefit of each of the parties to the 1992
Receivables Purchase Agreement and its successors and permitted
assigns.

               7.   This Termination may be executed in any
number of counterparts, all such counterparts together
constituting but one and the same instrument.  This Termination
shall be effective, and shall be binding on each party hereto, on
the date first above written.

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FORM 10-Q

Exhibit 2.1(k)  (continued)


          IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Termination as of the day and year first above
set forth.

                              CONE MILLS CORPORATION



                              By:/s/ David E. Bray               
                                 Title: Treasurer


                              DELAWARE FUNDING CORPORATION
                              By:  MORGAN GUARANTY TRUST COMPANY
                                   OF NEW YORK, as attorney-in-
                                   fact for Delaware Funding
                                   Corporation


                              By:/s/ Richard A. Burke            
                                 Title: Vice President

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