<PAGE>


                                                                EXHIBIT 10.39
                            DONNKENNY APPAREL, INC.
                   Revolving Credit and Term Loan Agreement
                               Summary Term Sheet

                                 April 14, 1997

                         *For Discussion Purposes Only*

CO-BORROWERS:            Donnkenny Apparel, Inc.
                         Beldoch Industries Corporation
                         Megaknits, Inc.

TYPES OF FACILITIES:     1) Term Loan
                         2) Revolving Credit
                         3) Two year notification factoring agreement covering
                            all new and takeover sales of the Company on a 
                            collected funds basis.

PURPOSE:                 1) Finance the acquisition of the stock of Beldoch 
                            Industries Corp. and the purchase of certain assets
                            of Oak Hill Sportswear Corp.
                         2) General working capital purposes including the
                            issuance of letters of credit.

EXPIRY DATE:             Two years (March 31, 1999)

CLOSING FEE:             $500,000 shared amongst the bank group on a pro rata
                         basis payable at closing.

AGENT:                   The Chase Manhattan Bank (35.0762%)

COLLATERAL AGENT:        The CIT Group/Commercial Services Inc. (14.8148%)

CO-LENDERS:              Fleet Bank, N.A. (25.0545%)
                         The Bank of New York (25.0545%)


TERM LOAN

COMMITMENT AMOUNT:       $25,000,000 (Current balance at 4/1/97 of $16,250,000)

AMORTIZATION:            $1,250,000 payable quarterly beginning September 30, 
                           1995.
                         Balloon payment of $7,500,000 due March 31, 1999.
                         Excess cashflow recapture (defined as 50% of annual 
                           consolidated: net income + depreciation + 
                           amortization + other non-cash charges - capital 
                           expenditures - scheduled long term debt payments -
                           change in net



                                       1

<PAGE>

                           working assets) to reduce balloon payment, payable
                           15 days after receipt of audited fiscal year-end
                           financial statements.
                         Any tax refunds received in excess of $2,000,000
                           applicable to 1996 and prior years to be applied
                           to reduce balloon payment.

MATURITY:                March 31, 1999

INTEREST RATE:           Prime + 1 1/2% p.a.

DEFAULT INTEREST:        2% above the otherwise applicable rate.

PREPAYMENT PENALTY:      None


REVOLVING CREDIT

COMMITMENT AMOUNT:       $85,000,000

SUBLIMIT AMOUNT:         Direct Debt - $70,000,000
                         Letters of Credit - $35,000,000

PERMITTED STANDBY L/C:   $200,000 (1.75% p.a. commission) to support insurance
                           premium on workmen's compensation policy.

BORROWING BASE:          Advances and L/Cs (aggregate) limited to -
                         1) up to 85% of Eligible Accounts Receivable of the
                            Borrowers PLUS;
                         2) up to 60% of Eligible Inventory of the Borrowers 
                            including inventory covered by letters of credit 
                            issued for the importation of finished goods 
                            (per agreed upon caps outlined in attached
                            Attachment), PLUS;
                         3) the Allowable Overadvance.

                         Eligibility of collateral to be determined by the
                           Collateral Agent in its sole discretion.

ALLOWABLE OVERADVANCE:   See Attachment

INTRAMONTH OVERADVANCE:  See Attachment

ALLOWABLE INVENTORY 
     ADVANCE:            See Attachment


                                       2


<PAGE>


EXPIRATION DATE:         March 31, 1999

INTEREST RATE:           Prime + 1 1/2% p.a.
                         (Borrowings in excess of the Allowable Overadvance
                           will bear interest at Prime + 3 1/2% p.a.).

DEFAULT INTEREST:        2% p.a. above the otherwise applicable rate.

LETTER OF CREDIT FEES:   1/8% upon issuance; 1/8% on the average monthly
                           balance; plus all bank charges (CIT to act as letter
                           of credit issuing bank).

UNUSED COMMITMENT FEES:  40 bp per annum on the unused Revolving Credit
                           Commitment Amount, payable quarterly in arrears.

COLLATERAL AGENT'S FEE:  $6,000 per month.


FACTORING FACILITY

FACTORING COMMISSION:    .45% of the gross amount of sales, plus our customary
                           surcharges for sales with extended terms and sales
                           to D.I.P. and other special risk customers.
                         .20% on takeover accounts receivable.

COLLECTION DAYS:         One business day will be charged at a per annum rate
                           equal to Prime + 1.50%.


COVENANTS AND CONDITIONS

COLLATERAL:              First priority lien on all accounts receivable, 
                           machinery, equipment, trademarks, intangibles and 
                           all inventory.
                         First mortgage on all real property.
                         Pledge of stock of Beldoch Industries Corp.
                         Pledge of stock of Donnkenny Apparel Inc.

GUARANTORS:              Donnkenny, Inc.
                         Donnkenny Apparel, Inc.
                         Beldoch Industries Corporation
                         Christiansburg Garment Company Incorporated
                         Megaknits, Inc.


                                       3


<PAGE>


REPRESENTATIONS AND
     WARRANTIES:         1) Usual and customary representations and warranties,
                            including but not limited to, corporate 
                            organization and existence, good standing, power 
                            and authorization, employee benefit plans, 
                            environmental compliance, non-contravention, title
                            to assets, adequate insurance, legal compliance and
                            no tax deficiencies.

EVENTS OF DEFAULT:       1) Cross default with all other indebtedness.
                         2) Material change of ownership and/or control.
                         3) Standard bankruptcy and material adverse change
                            clauses.
                         4) Usual and customary events of default, including,
                            but not limited to, inaccuracies of representations,
                            failure to make payments or comply with covenants,
                            final judgments over $325,000 and tax liens 
                            aggregating $100,000 or more.

AFFIRMATIVE COVENANTS:   1) Financial Information:
                              a) Consolidated annual audited statements and 
                                 auditor's management letter along with 
                                 unaudited consolidating statements within 
                                 90 days.
                              b) Consolidated and consolidating three, six and
                                 nine month unaudited statements, within 
                                 45 days.
                              c) Management prepared quarterly compliance 
                                 certificate.
                              d) Detailed one year monthly projection to be 
                                 provided to Banks by November 30 of each year
                                 updated quarterly thereafter.
                              e) Monthly inventory certificates detailing 
                                 locations and amounts by division by normal 
                                 course vs excess classifications at each 
                                 location.
                              f) Weekly inventory certificates segregating 
                                 finished goods and piece goods by company by 
                                 normal course vs excess classification.
                              g) Eight week, weekly cashflow and collateral 
                                 projection by the last day of each month 
                                 until June 30, 1997.
                              h) Other standard information as may be requested 
                                 by the Banks.
                         2) Usual and customary affirmative covenants, 
                            including, but not limited to, corporate existence,
                            maintenance of insurance and properties, payment
                            of taxes, notice of significant events, inspection,
                            maintain compliance with laws and cause any newly 
                            formed subsidiary to guarantee and pledge its 
                            assets.
                         3) Covenant pledging to liquidate excess inventory 
                            consistent with the Company's projections.

NEGATIVE COVENANTS:      1) Limitation on additional debt and guarantees, 
                            except Donnkenny Apparel, Inc. and Beldoch 
                            Industries Corp. may guarantee each others'



                                       4


<PAGE>


                            normal trade liabilities under guarantee 
                            agreements acceptable to the Banks.
                         2) Limitation on additional liens, subject to usual
                            exceptions.
                         3) Limitation on restricted payments: The Borrowers
                            and all subsidiaries are prohibited from making
                            loans and advances to, or investments in other 
                            entities, except for:
                              a) Loans and advances to Donnkenny, Inc. to pay 
                                 taxes which are currently due and payable, to 
                                 pay litigation costs and to fund payroll and 
                                 payroll related expenses and general overhead
                                 expenses, but not in excess of $500,000) up 
                                 to an aggregate amount of $5,000,000 in any 
                                 fiscal year.
                              b) Loans and advances to any affiliate (other 
                                 than Donnkenny, Inc. or Beldoch Industries 
                                 Corp.) in excess of $500,000.
                         4) Dividends and stock redemptions are prohibited 
                            without the prior consent of the Banks.
                         5) Limitation on transfer of assets: Mergers, 
                            consolidations and acquisitions, or the sale, 
                            transfer or disposal (except in the ordinary course
                            of business) of assets prohibited without the prior
                            consent of the Banks.
                         6) Other usual and customary negative covenants.

                         Financial tests to be tested quarterly on a 
                         consolidated basis.

                         1) Pre-tax loss on a rolling four quarter basis of no
                            greater than $4.0MM effective 12/31/97.
                         2) Capital Expenditures no greater than $1,500,000 in 
                            any fiscal year.
                         3) Tangible Net Worth of not less than $15,000,000 at
                            6/30/97 and 6/30/98 and $18,000,000 at all other 
                            times.

CONDITIONS PRECEDENT:    1) Execution of legal documentation satisfactory to 
                            the Banks and counsel.
                         2) Usual and customary conditions to funding, 
                            including, but not limited to, legal opinion, 
                            certified charter, by-laws and resolutions and 
                            incumbency, perfection of collateral, payment of 
                            fees, expenses and insurance.

MISCELLANEOUS:           1) Usual and customary, including but not limited to 
                            capital adequacy protection, survival of 
                            agreements, waiver and delay, waiver of jury trial,
                            extensions of maturity, modification of agreements,
                            severability, counterparts, enforcement, 
                            indemnities, and payment of fees and expenses. 
                            Approval for non-monetary amendments/waivers 
                            requires consent by Lenders representing 51% of the
                            aggregate Commitments. Monetary amendments/waivers 
                            require 100%.


                                       5


<PAGE>


                         2) Field examinations to be performed by the 
                            Collateral Agent on a quarterly basis. Daily fee 
                            of $750/day/field examiner to be paid by the 
                            Borrower.
                         3) Legal fees and other due diligence expenses are for
                            the account of the Borrower.
                         4) Receipt of a $50,000 deposit payable to The CIT
                            Group/Commercial Services, Inc. to cover out-of-
                            pocket expenses including legal fees and other due
                            diligence expenses which must be paid upon
                            acceptance of this term sheet. This deposit will be
                            refunded net of actual expenses incurred in the 
                            event a transaction is not consummated; otherwise,
                            any balance after expenses will be applied to the
                            closing fee.

THIS TERM SHEET IS PROVIDED FOR DISCUSSION PURPOSES ONLY AND DOES NOT IMPLY
A COMMITMENT TO LEND.




                                       6


<PAGE>


                            DONNKENNY APPAREL, INC.
                     $85,000,000 REVOLVING CREDIT FACILITY
                                  ATTACHMENT


<TABLE>
<CAPTION>

                              MAXIMUM/MINIMUM                 END OF MONTH
                       (OVERADVANCE)/AVAILABILITY           MAXIMUM INVENTORY
                    END OF MONTH*        INTRAMONTH*          AVAILABILITY
                    ------------         ----------           ------------
<S>                 <C>                  <C>                <C>
April 1997             (5,500)             (6,500)             21,900
May                    (8,500)            (11,500)             24,000
June                  (13,000)            (14,500)             27,000
July                  (12,000)            (19,000)             29,800
August                 (8,800)            (18,000)             28,100
September              (3,600)            (14,800)             23,400
October                   800              (9,600)             19,200
November                2,800              (5,200)             15,600
December                1,800              (3,200)             16,600
January 1998            2,600              (4,200)             17,000
February                2,200              (3,400)             16,400
March                     700              (3,800)             15,800

</TABLE>


Intramonth Maximum Overadvances are calculated based on the prior month end
figure per the Company's projection plus an additional $7,000M flexibility.

End of Month Overadvance/Minimum Availability is based on the Company's 
budgeted figure plus $1MM in flexibility.

Inventory availability is calculated based on inventory projections at 70% of 
gross at a 60% advance rate with $500M in flexibility.

*End of Month is defined as the last business day of the month through the 
fifth day of the following month.

**Intramonth is defined as all other days of the month.

All overadvance limits will be re-adjusted quarterly based on the results of 
field examinations performed by the collateral agent's auditors.

                                       7

<PAGE>



                                                 April 15, 1997 

Donnkenny Apparel, Inc.
Beldoch Industries Corporation
The Guarantors Listed as Signatories Below
1411 Broadway
New York, New York 10018
Attention: Mr. Harvey Appelle

     Re:   Eighth Amendment to the Credit Agreement dated June 5, 1995 among 
           Donnkenny Apparel, Inc. and Beldoch Industries Corporation, the 
           Guarantors named therein, the Lenders named therein and The Chase 
           Manhattan Bank, as Agent 


Dear Mr. Appelle:

Reference is made to the Credit Agreement dated June 5, 1995 among Donnkenny 
Apparel, Inc. and Beldoch Industries Corporation (each a "Borrower"), the 
Guarantors named therein, the lenders named in Schedules 2.01(a) and (b) 
thereof (the "Lenders") and The Chase Manhattan Bank (formerly known as 
Chemical Bank), as Agent (the "Agent") for the Lenders (as the same has been 
amended, modified or supplemented from time to time to the date hereof in 
accordance with its terms, the "Credit Agreement").  All capitalized terms used
but not defined herein shall have the meanings ascribed to them in the Credit 
Agreement. 

Please be advised that the Agent, the Lenders and The CIT Group/Commercial 
Services, Inc. ("CIT") are prepared to enter into an Eighth Amendment to the 
Credit Agreement (the "Proposed Amendment") on the terms and conditions 
contained in the attached Summary Term Sheet, dated April 14, 1997 (which by 
reference is incorporated into this commitment letter), subject to the 
conditions set forth below.  The Proposed Amendment would, among other things, 
(i) extend the Final Maturity Date to March 31, 1999, (ii) add MegaKnits, Inc., 
a New York corporation ("MegaKnits"), as a Borrower, (iii) reflect the partial 
assignment of Notes by one or more of the Lenders to CIT, (iv) reflect the 
addition of CIT as Administrative Agent for the Lenders, (v) increase the Total
Revolving Credit Commitment to $85,000,000 and the direct debt sublimit to 
$70,000,000 and (vi) amend certain financial covenants. 

This commitment letter and Summary Term Sheet supersedes all prior proposals 
for a further amendment to the Credit Agreement issued to you by the Agent 
and/or CIT.  The text of this letter and Summary Term Sheet is intended to 
provide a brief description of the principal terms of the Proposed Amendment
as contemplated by the Agent, the Lenders and CIT. Furthermore, this commitment
is subject to: (i) no situation, event or circunstance occurring which would,
in the opinion of the Agent or CIT, materially adversely affect (a) the
ability of any Borrower (including MegaKnits which is proposed to be added as 
a Borrower) or Guarantor to perform its obligations under the documents 
governing and to be delivered pursuant to the Proposed Amendment and/or 
(b) the assets and properties currently pledged as collateral under the 
Loan Documents and contemplated to be pledged as collateral in connection 
with the Proposed Amendment; (ii) the preparation, completion and execution 
of legal documentation that is satisfactory to the Agent, the Lenders, 
CIT and their respective counsel; and (iii) CIT's providing to the Borrowers
the factoring facility described, in part, in the Summary Term Sheet. 

<PAGE>


By executing this letter, the Borrowers and the Guarantors agree to indemnify, 
defend and hold harmless each of the Agent, the Lenders and CIT and their 
respective officers, directors, controlling persons, agents, employees and 
counsel (collectively, the "Indemnified Persons") from and against any and 
all losses, claims, damages, liabilities, deficiencies, judgments or expenses
incurred by any of them arising out of or by result of any litigation, 
investigation, claim or proceeding, pending or threatened, which arise out of
or are in any way based upon this letter and/or the Proposed Amendment, 
including without limitation, amounts paid in settlement, court costs and the
fees and disbursements of counsel of any Indemnified Person incurred in 
connection with any such litigation, investigation, claim or proceeding, but
excluding any loss, claim, damage, liability, deficiency, judgment or expense
arising from the gross negligence and willful misconduct of the Indemnified
Persons. 

Based upon (i) your acceptance of this commitment letter, (ii) your payment 
of the portion of the Closing Fee due upon acceptance of this commitment letter 
(the "Deposit"), as detailed in the Closing Fee definition contained in the 
attached Summary Term Sheet (with the balance of such Closing Fee due at 
closing), (iii) your payment of the portion of CIT's out-of-pocket expenses 
due upon acceptance of this commitment letter (the "Expense Deposit"), as 
detailed in the Miscellaneous Section of the attached Summary Term Sheet 
(with the remaining balance of such Expense Deposit, if any, after expenses 
to be applied to the Closing Fee) and (iv) your acknowledgment (which shall 
be evidenced by your acceptance of this commitment letter) that the entire 
Deposit is non-refundable and that only that portion of the Expense Deposit 
in excess of actual expenses incurred, if any, is refundable, we shall 
authorize our attorneys to prepare the necessary documentation, the charges 
for which agree to pay, whether or not the transaction contemplated herein 
is consummated (it being understood and agreed that each of the Agent and 
CIT are engaging separate outside counsel in connection with the Proposed 
Amendment and your obligation to pay attorneys' fees and expenses applies 
to each such outside counsel). In addition, this offer is governed by the 
laws of the State of New York, shall not be assignable, and may not be 
amended, waived or modified without the prior written consent of the Agent, 
the Lenders and CIT and is contingent upon your acceptance by April 15, 1997 
and to documentation for the proposed transaction being executed and 
delivered, and a closing occurring no later than April 30, 1997. 

In addition, the Borrowers, the Guarantors and the Agent, the Lenders and CIT 
agree that this letter is delivered on the understanding that neither this 
letter nor any of its terms or substance nor the existence of this letter 
shall be disclosed by you, directly or indirectly, to any other person, 
except to the Borrowers' (including MegaKnits) respective employees, agents 
and advisors who are directly involved in the consideration of this matter; 
provided, however, that neither this letter nor any of its terms or substance
nor the existence of this letter shall be disclosed or referred to by you or 
any of the foregoing persons in any press release or public filing except 
with the prior consent of each of the Agent and CIT. 

The execution and delivery of this letter by the parties shall not in any way 
limit the rights and remedies of the Agent and/or the Lenders under the Credit 
Agreement and the other Loan Documents as currently in effect. The obligations
of the Borrowers and the Guarantors arising under this letter shall be joint 
and several.

If this letter or the subject matter hereof  becomes the subject of any 
dispute, each of the parties waives trial by jury in connection herewith.  
The Borrowers, the Guarantors and the Agent, the Lenders and CIT waive any 
claims for consequential damages with respect to any such dispute. 

                                         2

<PAGE>

If the Summary of Terms and this commitment letter correctly set forth your 
understanding of the terms and conditions the parties have discussed, please 
indicate your acceptance by signing in the space provided below and returning 
the original to the Agent, together with the Deposit in the aggregate amount 
of $250,000 payable to the Agent for the ratable benefit of the Lenders and 
CIT (in the percentages set forth in the Summary Term Sheet) and the Expense 
Deposit in the amount of $50,000 payable to CIT.

                                        Very truly yours, 

                                        THE CHASE MANHATTAN BANK 
                                        (formerly known as Chemical Bank) 


                                        By: /s/ Joseph F. Abruzzo
                                           ---------------------------------- 
                                           Name: Joseph F. Abruzzo
                                           Title: Vice President


                                        THE BANK OF NEW YORK 

                                        By: /s/ Ronald R. Pagoto
                                           ---------------------------------- 
                                           Name: Ronald R. Pagoto
                                           Title: Vice President


                                        FLEET BANK, N.A. 

                                        By: /s/ Ralph C. Palma
                                           ---------------------------------- 
                                           Name: Ralph C. Palma
                                           Title: Senior Vice President


                                        THE CIT GROUP/COMMERCIAL SERVICES, INC.

                                        By: /s/ Terry S. Schwartz
                                           ---------------------------------- 
                                           Name: Terry S. Schwartz
                                           Title: Vice President


ACCEPTED AS OF THE DATE
FIRST ABOVE WRITTEN:

DONNKENNY APPAREL, INC. 


By: /s/ Harvey Appelle
   -------------------------- 
   Name: Harvey Appelle
   Title: President


BELDOCH INDUSTRIES CORPORATION


By: /s/ Harvey Appelle
   -------------------------- 
   Name: Harvey Appelle
   Title: President


CHRISTIANSBURG GARMENT
 COMPANY INCORPORATED


By: /s/ Harvey Appelle
   -------------------------- 
   Name: Harvey Appelle
   Title: President


MEGAKNITS, INC.


By: /s/ Harvey Appelle
   -------------------------- 
   Name: Harvey Appelle
   Title: President


DONNKENNY INC.


By: /s/ Harvey Appelle
   -------------------------- 
   Name: Harvey Appelle
   Title: Chairman


                                            3