<PAGE>

                              EMPLOYMENT AGREEMENT

         AGREEMENT dated as of September 5, 1996 between Donnkenny Apparel,
Inc. (the "Company"), and Mr. Harvey Horowitz ("Employee").

                             W I T N E S S E T H :
                             - - - - - - - - - - 

         WHEREAS, the Company desires to enter into this Employment Agreement
with Employee, and Employee desires to be employed by the Company, on the terms
and conditions set forth in this Employment Agreement.

         NOW, THEREFORE, the parties hereto, in consideration of the premises
and the mutual covenants herein contained, hereby agree as follows:

         1. (a) Term of Employment. Subject to the terms and conditions
hereinafter set forth, the Company shall employ Employee and Employee shall be
employed by the Company, or of any subsidiary or affiliate of the Company as
the Company shall from time to time select, for an employment term of three (3)
years commencing as of October 1, 1996 and terminating on September 30, 1999
(the "Initial Term"). Such three (3) year period, as it may be extended
pursuant to paragraph 1(b) below, or such shorter period as may be contemplated
by this Employment Agreement during which Employee shall be employed by the
Company is hereinafter called the "Term of Employment."

<PAGE>

            (b) Renewal. Following the Initial Term, this Employment Agreement
shall be automatically renewed upon the same terms and conditions hereof for
successive one-year periods unless either party gives the other party 60 days
prior written notice of termination before the end of any such one-year period.

         2. (a) Scope of Employment. During the Term of Employment, Employee
shall be employed as Vice President, General Counsel and Director of Operations
and shall report directly to the President of the Company. In addition,
Employee shall well and faithfully render and perform such other reasonable
executive and managerial services as may be assigned to him, from time to time,
by or under the authority of the Board of Directors or the President of the
Company. Employee will devote his full time and efforts to the business and
affairs of the Company, as now or hereafter conducted, and shall be at all
times subject to the direction and control of the Board of Directors or the
President of the Company. Employee shall render such services to the best of
his ability and shall use his best efforts to promote the interests of the
Company. Employee will not engage in any capacity or activity which is, or may
be, contrary to the welfare, interest or benefit of the business now or
hereafter conducted by the Company.

            (b) Board Positions. Notwithstanding anything to the contrary
contained herein, Employee may continue to serve on the Boards of Director or
similar governing bodies of the United Jewish Appeal, Queens College, Paul
Taylor Dancers, and such other

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charitable, educational or arts-related organizations as Employee may elect
from time to time so long as any such position does not conflict with
Employee's obligations hereunder.

         3. (a) Compensation. As full compensation for all services provided
for herein, the Company will pay, or cause to be paid, to Employee, and
Employee will accept:

                (i) a salary of $400,000 for the year ending September 30,
         1997, with an annual increase of 5% for each subsequent year during
         the Term of Employment. The salary shall be paid in regular
         installments in accordance with the Company's usual paying practices,
         but not less frequently than monthly (the "Base Salary"); and

                (ii) a bonus (the "Bonus") for each of the fiscal years (pro
         rated for any partial fiscal years) during the Term of Employment,
         based upon the Company's "pre-tax profits" (as hereinafter defined).
         Employee shall receive a Bonus in the amount set forth in the
         following table:

         Amount of Pre-tax Profits
         per Fiscal Year                    Aggregate Amount of Bonus
         -------------------------          -------------------------

         to $10,000,000                             $100,000
         $10,000,001-$20,000,000                    $200,000
         $20,000,001-$30,000,000                    $300,000

         If the pre-tax profits should exceed $30,000,000 in any fiscal year,
         an additional bonus may be payable at the Company's discretion.

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<PAGE>

         Such Base Salary and Bonus payments will be subject to such deductions
by the Company as the Company is from time to time required to make pursuant to
law, government regulations or order or by agreement with, or consent of,
Employee. Such payments may be made by check or checks of the Company or any of
its parent, subsidiaries or affiliates as the Company may, from time to time,
find proper and appropriate. The Employee's Bonus shall be paid not more than
one hundred twenty (120) days after the end of each of the Company's fiscal
years. If Employee terminates his employment with the Company or if his
employment is terminated by the Company for cause (as hereinafter defined), no
Bonus shall be due or payable to Employee for the Term of Employment. If the
Company terminates this Employment Agreement in accordance with the terms
hereof for any reason other than cause, the Company shall pay to Employee the
Bonus for the fiscal year during which such termination occurs, as determined
herein, prorated by multiplying the pre-tax profits of the Company for such
fiscal year by a fraction, the numerator of which is the number of days of
actual employment pursuant to this Employment Agreement and the denominator of
which is 365, and thereafter Employee shall not be entitled to receive any
Bonus with respect to any subsequent periods.

         (b) Pre-tax Profits of the Company Defined. For purposes of this
Employment Agreement, "pre-tax profits" shall be

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<PAGE>

as determined by the Company's internal accounting department in accordance
with the Company's accounting practice.

            The determination of the Company's internal accounting department
as to pre-tax profits shall be final and binding on the parties and shall not
be subject to arbitration as provided herein unless the arbitration proceeding
is commenced within six (6) months after the parties are advised of such
determination.

         4. Expenses. Employee shall be entitled to (a) a non-accountable
expense allowance of $2,000 per month to cover his car lease and maintenance
payments, bar association and other professional organization membership dues,
and home office expenses and (b) reimbursement by the Company for other
reasonable expenses actually incurred by him on the Company's behalf, in the
course of his employment, upon the presentation by Employee, from time to time,
of an itemized account of such expenditures together with such vouchers and
other receipts as the Company may request.

         5. Vacation. Employee shall be entitled to vacations in accordance
with the Company's prevailing policy for its operating executives as in prior
years.

         6. Termination.

            (a) Disability. If, during the Term of Employment, Employee shall
be unable, for a period of more than three (3) consecutive months or for
periods aggregating more than twenty (20)

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<PAGE>

weeks in any fifty-two (52) consecutive weeks to perform the services provided
for herein as a result of illness, incapacity or a physical or other disability
of any nature, the Company may, upon not less than thirty (30) days notice,
terminate Employee's employment hereunder. The Company shall pay to Employee,
or his legal representatives, compensation as specified in paragraph 3 hereof
to the end of the month in which such termination occurs. Employee shall be
considered unable to perform the services provided for herein if he is unable
to attend to the normal duties required of him. Upon completion of the
termination payments provided for in this paragraph, all of the Company's
obligations to pay compensation under this Employment Agreement shall cease.

            (b) Death. If Employee shall die during the Term of Employment,
this Employment Agreement shall terminate at the end of the month in which
Employee's death takes place and Employee's estate shall continue to receive
the compensation specified in paragraph 3 hereof until the end of such month
and Employee's family's coverage under the Company's medical and
hospitalization plan will continue for a period of six (6) months thereafter.

            (c) For Cause. In addition to the provisions for the cancellation
and/or termination hereof hereinabove provided, the Company may, at any time
and in its sole discretion, terminate and/or cancel this Employment Agreement
and the Term of Employment for cause (as hereinafter defined) by sending notice
to the Employee of its intention to so cancel and/or terminate.

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<PAGE>

Cancellation and/or termination under this paragraph shall become effective
within forty-eight (48) hours of the date of receipt of notice under this
paragraph, without Employee having any recourse against the Company for
damages.

         For purposes of this Employment Agreement, "cause" shall be defined to
mean (i) fraud, dishonesty or similar malfeasance, (ii) substantial refusal to
comply or default in complying with the Company's reasonable directions and/or
failure to comply or perform any of the material terms and/or obligations of
this Employment Agreement and such refusal, default or failure continues for a
period of more than ten (10) days after receipt by Employee of notice from the
Company setting forth in reasonable detail the activity by Employee which the
Company deems to be cause for termination of this Employment Agreement or (iii)
Employee's alcohol or drug abuse.

            (d) Change of Control. In the event Mr. Richard Rubin no longer
serves in an executive management position with the Company, Employee may, upon
not less than thirty (30) days notice, terminate his employment hereunder and
the Company shall continue to pay to Employee compensation as specified in
paragraph 3 hereof for a period of one year following the Initial Term.

            (e) Election Not to Renew. In the event the Company elects not to
renew this Employment Agreement pursuant to paragraph 1(b), the Company shall
pay to Employee compensation as specified

                                      -7-
<PAGE>

in paragraph 3 hereof for a period of one year following the end of the Term of
Employment.

         7. Benefits.

            (a) Employee shall be entitled to participate in all group life
insurance, group disability insurance, medical and hospitalization plans, and
pension and profit sharing plans as are presently being offered by the Company
or which may hereafter, during the Term of Employment, be offered to its
operating executives on a company wide basis.

            (b) From and after the date of this Employment Agreement the term
"compensation" as used in any pension or profit sharing plan maintained by the
Company shall include only the Base Salary (exclusive of the Bonus) payable
hereunder.

         8. Disclosure. Employee will not any at time, directly or indirectly,
disclose or furnish to any other person, firm or corporation:

            (a) any information concerning the methods of conducting or
obtaining business, of manufacturing or advertising products, or of obtaining
customers;

            (b) any confidential information acquired by him during the course
of his employment by the Company, including, without limiting the generality of
the foregoing, the names of any customers or prospective customers of, or any
person, firm or

                                      -8-
<PAGE>

corporation who or which have or shall have traded or dealt with, the Company
(whether such customers have been obtained by Employee or otherwise); and/or

            (c) any confidential information relating to the products, designs,
styles, processes, discoveries, materials, ideas, creations, inventions or
properties of the Company.

         9. Covenants Not to Compete.

            (a) During the Term of Employment, Employee agrees not to engage,
directly or indirectly, in any business which is competitive with the business
now or at any time during the Term of Employment conducted by the Company.

            (b) During the Term of Employment and for the period that any
payments are made pursuant to paragraphs 6(d) or 6(e), Employee agrees not to:

                (i) engage, directly or indirectly, within the United States of
         America in any apparel business involving ladies' or children's
         wearing apparel which is directly competitive with the business
         conducted by the Company; or

                (ii) directly or indirectly, on behalf of himself or any
         business in which he may, directly or indirectly, be engaged, recruit,
         solicit, induce (or attempt to induce), or have any part in, the
         diversion of any of the Company's employees or sales representatives
         from their relationships

                                      -9-
<PAGE>

         with the Company or retain or employ any of the Company's employees or
         sales representatives.

            (c) In addition, Employee shall not at any time, during or after
the termination of this Employment Agreement, engage in any business which uses
as its name, in whole or in part, "Donnkenny" or any other name used by the
Company during or prior to the Term of Employment.

            For the purposes of this paragraph 9, Employee will be deemed
directly or indirectly engaged in a business if he participates in such
business as proprietor, partner, joint venturer, stockholder, director,
officer, lender, manager, employee, consultant, advisor or agent or if he
controls such business. Employee shall not for purposes of this paragraph be
deemed a stockholder or lender if he holds less than two (2%) percent of the
outstanding equity or debt of any publicly owned corporation engaged in the
same or similar business to that of the Company, provided that Employee shall
not be in a control position with regard to such corporation.

         10. Inventions. As between Employee and the Company, all products,
designs, styles, processes, discoveries, materials, ideas, creations,
inventions and properties, whether or not furnished by Employee, created,
developed, invented, or used in connection with Employee's employment hereunder
or prior to this Employment Agreement, will be the sole and absolute property
of the

                                      -10-
<PAGE>

Company for any and all purposes whatever in perpetuity, whether or not
conceived, discovered and/or developed during regular working hours. Employee
will not have, and will not claim to have, under this Employment Agreement or
otherwise, any right, title or interest of any kind or nature whatsoever in or
to any such products, designs, styles, processes, discoveries, materials,
ideas, creations, inventions and properties.

         11. Arbitration. Any controversy arising out of or relating to this
Employment Agreement, including any modification or amendment thereof, shall be
resolved by arbitration in the City of New York, pursuant to the rules then
obtaining of the American Arbitration Association. The parties agree that the
arbitrators sitting in any controversy shall have no power to alter or modify
any express provision of this Employment Agreement, or make any award which by
its terms effects such alteration or modification. The parties consent to the
application of the New York or Federal Arbitration Statutes and to the
jurisdiction of the Supreme Court of the State of New York, and of the United
States District Court of the Southern District of New York, for judgment on an
award and for all other purposes in connection with said arbitration and
further consent that any notice, process or notice of motion or other
application to either of said Courts or Judges thereof, or of any notice in
connection with any arbitration hereunder, may be served in or out of the State
or Southern District of New York by certified or registered mail, return
receipt requested, or by

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<PAGE>

personal service, provided a reasonable time for appearance is allowed, or in
such other manner as may be permitted under the rules of the American
Arbitration Association or of either of said Courts. Judgment upon the award
rendered may be entered by any Court having jurisdiction. Any provisional
remedy which, but for this provision to arbitrate disputes, would be available
at law, shall be available to the parties hereto pending the final award of the
arbitrators.

         12. Injunctive Relief. The parties hereto recognize that irreparable
damage may result to the Company and its business and properties if Employee
fails or refuses to perform his obligations under this Employment Agreement and
that the remedy at law for any such failure or refusal may be inadequate.
Accordingly, notwithstanding the provisions of paragraph 11 hereof to arbitrate
disputes arising hereunder, it is understood that the Company has not waived
its rights to seek any provisional remedies (including, without limitation,
injunctive relief) and damages. The institution of any arbitration proceedings
shall not bar injunctive relief, or any other provisional remedy, pending the
final award of the arbitrators.

         13. Absence of Restrictions. Employee represents and warrants that he
is not a party to any agreement or contract pursuant to which there is any
restriction or limitation upon his entering into this Employment Agreement or
performing the services called for by this Employment Agreement.

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<PAGE>

         14. Further Instruments. Employee will execute and deliver all such
other further instruments and documents as may be necessary, in the opinion of
the Company, to carry out the purposes of this Employment Agreement, or to
confirm, assign or convey to the Company any products, designs, styles,
processes, discoveries, materials, ideas, creations, inventions or properties
referred to in paragraph 10 hereof, including the execution of all patent,
design patent, copyright, trademark or trade name applications.

         15. Invalidity and Severability. If any provisions of this Employment
Agreement are held invalid or unenforceable, such invalidity or
unenforceability shall not affect the other provisions of this Employment
Agreement, and, to that extent, the provisions of this Employment Agreement are
intended to be and shall be deemed severable. In particular and without
limiting the foregoing sentence, if any provision of paragraph 9 of this
Employment Agreement shall be held to be invalid or unenforceable by reason of
geographic or business scope or the duration thereof, such invalidity or
unenforceability shall attach only to such provisions and shall not affect or
render invalid or unenforceable any other provisions of this Employment
Agreement, and any such provisions of this Employment Agreement shall be
construed as if the geographic or business scope or the duration of such
provision had been more narrowly drawn so as not to invalid or unenforceable.

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<PAGE>

         16. Notices. Any notice required or permitted to be given under this
Employment Agreement shall be sufficient if in writing and if sent by
registered or certified mail or telegram, as follows:

         As to Employee:               Harvey Horowitz, Esq.
                                       239 East 79th Street
                                       New York, New York  10021

         As to the Company:            Donnkenny Apparel, Inc.
                                       1411 Broadway
                                       New York, New York  10018
                                       Attn:  Richard Rubin, Chairman
                                              and Chief Executive Officer

              with a copy to:          Kramer, Levin, Naftalis & Frankel
                                       919 Third Avenue
                                       New York, New York  10022
                                       Attn:  Thomas E. Constance, Esq.

or to such other address as either party hereto may designate by notice given
in accordance with this Employment Agreement.

         17. Assignment. A party hereto may not assign this Employment
Agreement or any rights or obligations hereunder without the consent of the
other party hereto; provided, however, that upon the sale or transfer of all or
substantially all of the assets of the Company, or upon the merger by the
Company into, or the combination with, another corporation, this Employment
Agreement will inure to the benefit of and be binding upon the person, firm or
corporation purchasing such assets, or the corporation surviving such merger or
consolidation, as the case may be. The provisions of this Employment Agreement
where applicable are binding upon the

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heirs of Employee and upon the successors and assigns of the parties hereto.

         18. Waiver of Breach. Waiver by either party of a breach of any
provision of this Employment Agreement by the other shall not operate or be
construed as a waiver of any subsequent breach by such other party.

         19. Definition of Company. As used in this Employment Agreement the
term "Company" shall also include any subsidiary or affiliate of the Company.

         20. Entire Employment Agreement. This instrument contains the entire
agreement of the parties as to the subject matter hereof and supersedes and
replaces all prior oral or written agreements between the parties. It may not
be changed orally, but only by an amendment to the Employment Agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.

         21. Applicable Law. This Employment Agreement shall be construed in
accordance with the laws of New York.

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


                                        DONNKENNY APPAREL, INC.


                                        By: /s/ Richard Rubin
                                           ------------------------------
                                            Richard Rubin, Chairman
                                            and Chief Executive Officer


                                             /s/ Harvey Horowitz
                                        ---------------------------------
                                                 Harvey Horowitz


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