<PAGE>

                      SECOND WAIVER AND AMENDMENT AGREEMENT

                  SECOND WAIVER AND AMENDMENT AGREEMENT, dated as of February
28, 1999, to the Credit Agreement, dated as of June 5, 1995, as amended and
restated as of November 13, 1998 (as the same has been amended pursuant to the
First Waiver and Amendment dated as of January 29, 1999, or may be further
amended, supplemented or modified from time to time in accordance with its
terms, the "Credit Agreement"), among Donnkenny Apparel, Inc., a Delaware
corporation ("DKA"), Megaknits, Inc., a New York corporation ("Megaknits"),
Beldoch Industries Corporation, a Delaware corporation ("BIC"; BIC, together
with DKA and Megaknits, the "Borrowers"), the Guarantors named therein and
signatories thereto, the lenders named in Schedules 2.01(a) and (b) of the
Credit Agreement (collectively, the "Lenders"), The CIT Group/Commercial
Services, Inc., as collateral agent for the Lenders (in such capacity, the
"Collateral Agent") and The Chase Manhattan Bank (formerly known as Chemical
Bank) as lead arranger and administrative agent for the Lenders (in such
capacity, the "Administrative Agent"). Capitalized terms used herein but not
otherwise defined herein shall have the meanings attributed thereto in the
Credit Agreement.

                  WHEREAS, the parties to the Credit Agreement have agreed to
waive certain provisions the Credit Agreement and to amend certain provisions of
the Credit Agreement.

                  NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and subject to the fulfillment of
the conditions set forth below, the parties hereto agree as follows:

                  SECTION 1.  AMENDMENTS TO THE CREDIT AGREEMENT

         1.1 The definition of "Inventory Amount" contained in Section 1.01 of
the Credit Agreement is hereby amended in its entirety to read as follows:

                  "Inventory Amount" shall mean, during any month, the amount
         set forth below as corresponds to such amount:

                  Month                          Inventory Amount
                  -----                          ----------------

                  February 1999                    $13,500,000
                  March 1999                        12,300,000
                  April 1999                        12,600,000
                  May 1999                          14,500,000
                  June 1999                         14,200,000
                  July 1999                         14,700,000
                  August 1999                       17,600,000
                  September 1999                    16,800,000
                  October 1999                      14,100,000


<PAGE>

                  Month                          Inventory Amount
                  -----                          ----------------

                  November 1999                     14,000,000
                  December 1999                     13,700,000
                  January 2000                      13,500,000
                  February 2000                     13,500,000
                  March 2000                        12,300,000

         1.2 The definition of "Overadvance Amount" contained in Section 1.01 of
the Credit Agreement is hereby amended in its entirety to read as follows:

                  "Overadvance Amount" shall mean, during any End of Month
         Period and Intramonth Period, the amounts set forth below as correspond
         to the End of Month Period and the Intramonth Period during the months
         set forth below:

                                      Overadvance                Overadvance
              Month                Amount during the          Amount during the
              -----               End of Month Period         Intramonth Period
                                  -------------------         -----------------
     February 1999                    $4,600,000                 $9,000,000
     March 1999                        3,600,000                  9,600,000
     April 1999                        3,000,000                  8,600,000
     May 1999                          6,900,000                  8,000,000
     June 1999                         6,600,000                 11,900,000
     July 1999                         7,600,000                 11,600,000
     August 1999                       6,900,000                 12,600,000
     September 1999                    4,600,000                 11,900,000
     October 1999                      2,900,000                  9,600,000
     November 1999                     2,000,000                  7,900,000
     December 1999                     3,600,000                  7,000,000
     January 2000                      4,000,000                  8,600,000
     February 2000                     4,600,000                  9,000,000
     March 2000                        3,600,000                  9,600,000

         ; provided, however, that each of the foregoing amounts shall be
         reduced by the aggregate amount of cash proceeds received by the Parent
         and/or any of its Subsidiaries (i) as tax refunds (other than (i) the
         $1,537,000 tax refund received by the Borrowers in November 1998 and
         (ii) the $275,000 tax refund received by the Borrowers from the State
         of Virginia related to the 1997 tax year) and (ii) as proceeds (net of
         taxes due and any reasonable expenses of sale) from the sale or other
         disposition of any assets of the Parent and/or any of its Subsidiaries
         (other than the sale of the Lee County building and the Elkton County
         building and land and excluding sales of inventory in the ordinary
         course of business consistent with past practices and the potential
         sale of the Christiansburg, Virginia real property ). 

<PAGE>

         The foregoing shall not be deemed to be a consent by the Agent, the 
         Administrative Agent or any Lender to any sale of assets.

         For purposes of this paragraph, (i) the term "End of Month Period"
         shall mean the period commencing on the last Business Day of a month
         and ending on the fifth day of the immediately following month and (ii)
         the term "Intramonth Period" shall mean the period commencing on the
         sixth day of a month and ending on the day immediately preceding the
         last Business Day of the same month.

         1.3 Section 2.05(a) of the Credit Agreement is hereby amended in its
entirety to read as follows:

                  (a) Subject to the provisions of Section 2.05(b), Section 2.08
         and 2.09(c) hereof, each Loan shall bear interest at a rate per annum
         equal to the Prime Rate plus the Applicable Percentage then in effect.
         In the event of any change in the Prime Rate, the rate of interest
         hereunder shall change as of the first day of the month following any
         change, so as to remain equal to the Applicable Percentage then in
         effect above the Prime Rate. For the purposes hereof, the "Applicable
         Percentage" shall initially be 2 1/2%, provided that (i) the Applicable
         Percentage shall be increased by one-eighth of one percent (_ of 1%) on
         each of July 1, 1999, August 1, 1999 and September 1, 1999 and (ii) the
         Applicable Percentage shall be increased by one quarter of one percent
         (1/4 of 1%) on the first day of each month thereafter, commencing
         October 1, 1999.

         1.4 Section 2.06(a) of the Credit Agreement is hereby amended by adding
the following proviso at the end of the first sentence thereof:

         provided, further, that the Revolving Credit Commitment Fee shall be
         increased by one-tenth of one percent (1/10 of 1%) on the first day of
         each month, commencing July 1, 1999.

         1.5 Section 6.15 of the Credit Agreement is hereby amended in its
entirety to read as follows:

                  SECTION 6.15. Fee. If the Revolving Credit Termination Date
         shall not have occurred by June 30, 1999, the Borrowers shall pay, on
         June 30, 1999, a fee of $150,000 to the Administrative Agent for the
         ratable benefit of the Lenders (based upon each Lender's Commitment).

         1.6 Section 7.11 of the Credit Agreement is hereby amended by (x)
restating clauses (i) and (ii) in their entirety and (y) adding a new clause
(iii) thereto, in each case to read as follows:

                  (i) $1,800,000 for the fiscal quarters ending March 31, 1999
                  and June 30, 1999, (ii) $3,300,000 for the fiscal quarter
                  ending September 30, 1999 and (iii) $7,700,000 for each fiscal
                  quarter thereafter;


                                       3
<PAGE>


         1.7 Section 7.12 of the Credit Agreement is hereby amended by deleting
the amount "$19,500,000" and substituting the amount "$16,000,000" therefor.

                  SECTION 2.  WAIVERS UNDER CREDIT AGREEMENT

         2.1 The Lenders hereby waive any existing Default or Event of Default
that arose under Section 7.11 of the Credit Agreement solely as a result of the
Parent's and its Subsidiaries' failure to have EBITDA (on a Consolidated basis)
of at least $5,800,000 for the four fiscal quarter period ended December 31,
1998; provided, however, that EBITDA of the Parent and its Subsidiaries (on a
Consolidated basis) for such period shall not have been less than $2,200,000.

         2.2 The Lenders hereby waive the provisions of Section 7.03 of the
Credit Agreement solely for the purpose of permitting the Parent to incur
Indebtedness of $880,000 to the selling shareholders of BIC, provided that such
Indebtedness constitutes Subordinated Indebtedness and is evidenced by a note
that is in form and substance satisfactory to the Lenders.

         2.3 The Lenders hereby waive the provisions of Section 7.05 of the
Credit Agreement solely for the purpose of permitting the Borrowers to sell the
property described on Schedule I hereto, such sale to be in form and substance
satisfactory to the Lenders.

         2.4 Except for the specific waivers set forth above, nothing herein
shall be deemed to be a waiver of any covenant or agreement contained in the
Credit Agreement.

                  SECTION 3.  CONDITIONS PRECEDENT

                  Upon the execution and delivery of counterparts of this Second
Amendment Agreement (this "Agreement") by the parties listed below and the
fulfillment of the following conditions, this Agreement shall be deemed to have
become effective as of the date hereof:

         3.1 All representations and warranties contained in this Agreement, the
Credit Agreement or otherwise made in writing to the Administrative Agent or any
Lender in connection herewith shall be true and correct in all material respects
after giving effect to the amendments contained in this Agreement.

         3.2 No event shall have occurred and be continuing which constitutes a
Default or an Event of Default.

         3.3 The Administrative Agent shall have received such other documents
as the Lenders or the Administrative Agent or Administrative Agent's counsel
shall reasonably deem necessary.


                                       4
<PAGE>

                  SECTION 4.  MISCELLANEOUS

         4.1 Each of the Borrowers reaffirms and restates the representations
and warranties set forth in the Credit Agreement, as applicable, and all such
representations and warranties shall be true and correct on the date hereof with
the same force and effect as if made on such date after giving effect to the
amendments contained in this Agreement.

         4.2 Except as herein expressly amended, the Credit Agreement and the
other documents executed and delivered in connection therewith are each ratified
and confirmed in all respects and shall remain in full force and effect in
accordance with their respective terms.

         4.3 Except as specifically set forth herein, nothing herein contained
shall constitute a waiver or be deemed to be a waiver of any existing Defaults
or Events of Default, and the Lenders and Administrative Agent reserve all
rights and remedies granted to them by the Credit Agreement, the other documents
executed and delivered in connection therewith, by law and otherwise.

         4.4 This Agreement may be executed by the parties hereto individually
or in combination, in one or more counterparts, each of which shall be an
original and all of which shall constitute one and the same agreement. A
facsimile signature page shall constitute an original for the purposes hereof.

         4.5 Each of the Guarantors, by its signature below, (i) confirms in
favor of the Lenders that it consents to this Agreement, (ii) agrees that it has
no defense, offset, claim, counterclaim or recoupment with respect to any of its
obligations or liabilities with respect to its guarantee and (iii) hereby
irrevocably and unconditionally confirms to the Agent, the Administrative Agent
and the Lenders that its guarantee is and shall continue to be in full force and
effect in accordance with its terms and shall continue to be applicable to the
Credit Agreement, as amended hereby.

         4.6 THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
THE CONFLICTS OF LAWS PRINCIPLES THEREOF.


                                       5
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.

                                           DONNKENNY APPAREL, INC.


                                            By: /s/    Harvey A. Appelle
                                                -------------------------------
                                                Name:  Harvey A. Appelle
                                                Title: Chairman of the Board of
                                                       Directors and Chief
                                                       Executive Officer

                                            BELDOCH INDUSTRIES CORPORATION


                                            By: /s/    Harvey A. Appelle
                                                -------------------------------
                                                Name:  Harvey A. Appelle
                                                Title: Chairman of the Board of
                                                       Directors and Chief
                                                       Executive Officer


                                           CHRISTIANSBURG GARMENT
                                            COMPANY INCORPORATED


                                            By: /s/    Harvey A. Appelle
                                                -------------------------------
                                                Name:  Harvey A. Appelle
                                                Title: Chairman of the Board of
                                                       Directors and Chief
                                                       Executive Officer

                                            MEGAKNITS, INC.


                                            By: /s/    Harvey A. Appelle
                                                -------------------------------
                                                Name:  Harvey A. Appelle
                                                Title: Chairman of the Board of
                                                       Directors and Chief
                                                       Executive Officer

                                            DONNKENNY, INC.


                                            By: /s/    Harvey A. Appelle
                                                -------------------------------
                                                Name:  Harvey A. Appelle
                                                Title: Chairman of the Board of
                                                       Directors and Chief
                                                       Executive Officer




                                       6
<PAGE>

                                            THE CHASE MANHATTAN BANK
                                            (formerly known as Chemical Bank),
                                            as Administrative Agent  and Lender


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


                                            THE CIT GROUP/COMMERCIAL SERVICES, 
                                            INC., as Collateral Agent and Lender


                                            By: /s/ Jeffrey Heller
                                                -------------------------------
                                                Name:  Jeffrey Heller
                                                Title: Vice President


                                            THE BANK OF NEW YORK


                                            By: /s/ Joanne M. Collett
                                                -------------------------------
                                                Name:  Joanne M. Collett
                                                Title: Vice President


                                            FLEET BANK N.A.


                                            By: /s/ Steven R. Navarro
                                                -------------------------------
                                                Name:  Steven R. Navarro
                                                Title: Senior Vice President



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