EXHIBIT 10.3


                              SEVERANCE AGREEMENT

            SEVERANCE  AGREEMENT,  dated as of February 10,  1999,  by and among
WORLDTEX,  INC.,  a Delaware  corporation  ("WTX"),  and  RICHARD J. MACKEY (the
"Executive").

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

            WHEREAS,  the  Executive  has been  employed as an  executive of WTX
pursuant to an  Employment  Contract  dated as of November 15, 1993,  as amended
(the "Employment Contract"); and

            WHEREAS,  the parties wish to terminate the Employment  Contract and
end the employment relationship thereunder on mutually agreeable terms;

            NOW,  THEREFORE,  in consideration of the premises and of the mutual
covenants herein contained,  and for other good and valuable consideration,  the
parties hereto agree as follows:

            1.    TERMINATION OF EMPLOYMENT CONTRACT.
                  -----------------------------------

                  The Employment Contract and all rights and obligations arising
thereunder are terminated effective as of the date of this Agreement.

            2.    RESIGNATIONS AND TERMINATION OF EMPLOYMENT.
                  -------------------------------------------

                  The  Executive  hereby  resigns  as a  director,  officer  and
employee  of WTX, as an officer and  director  of all of WTX's  Subsidiaries  or
Affiliates and from all corporate  committees of WTX or of any such Subsidiaries
or Affiliates,  effective as of the date of this Agreement. For purposes of this

<PAGE>

Agreement,   a  "Subsidiary"  of  a  corporation  shall  mean  any  corporation,
association or other business entity which is required to be  consolidated  with
such  corporation  under  generally  accepted  accounting  principles,   and  an
"Affiliate"  of a corporation  shall mean a person or other entity that directly
or indirectly  controls,  or is controlled  by, or is under common  control with
such corporation.

            3.    PAYMENTS TO THE EXECUTIVE.
                  --------------------------

                  WTX shall pay the Executive the following amounts:

                  (a) $675,000,  representing 300% of his current annual salary,
payable on the eighth day after the date of this Agreement;

                  (b) The  bonus  the  Executive  is  entitled  to  receive  for
services  rendered  during 1998 under Section 4(c) of the  Employment  Contract,
payable  when and as provided in such Section  (which bonus shall be  calculated
without  giving  effect to any  special  charges  relating to the closing of the
Rubyco fine denier  operations  in 1998);  and

                  (c) The supplemental  retirement benefit that the Executive is
entitled to receive  pursuant to Section 19 of the Employment  Contract,  in the
amount of $18,567 per month, payable on the first business day of each month for
120  consecutive  months,  commencing  with the month next following the date of
this  Agreement.  If  Executive  shall die prior to the  payment of all  amounts
payable  under this clause (c),  all such  remaining  payments  shall be made to
Executive's estate or his designated beneficiary.

            4.    OPTIONS AND BENEFIT PLANS.
                  --------------------------

                  (a) The  Executive  will be entitled to exercise in accordance
with their terms his outstanding stock options to purchase 300,000 shares of WTX
common stock, it being understood that, solely for purposes of the provisions of
such  options,  Executive  shall be  deemed  to be an  employee  of WTX and such

<PAGE>

employment  shall  be  deemed  terminated  upon  termination  of the  Consulting
Agreement (as defined below).

                  (b) WTX acknowledges  that the Executive's  benefits under the
Worldtex  Profit  Sharing and  Retirement  Savings Plan (which  includes the WTX
401(k) plan) (the "ESOP") are fully vested.

            5.    OTHER BENEFITS.
                  ---------------

                  (a) WTX and the Executive agree that, effective as of the date
of this Agreement, the Executive shall be entitled to retain the possession, and
WTX shall transfer ownership,  of the 1999 Mercedes Benz 500 automobile provided
to the Executive by WTX.

                  (b)  WTX  agrees  to  provide,  at its  expense,  coverage  to
Executive under the medical insurance plans or policies generally  applicable to
employees  of WTX,  as such may be  modified  from time to time,  so long as the
Consulting  Agreement  continues  in effect.  WTX will not provide the  enhanced
benefits  currently  provided  by WTX  to the  Executive  under  the  Employment
Contract.  Executive  acknowledges  and confirms that he is electing the medical
insurance coverage set forth in this Section 5(b) in lieu of all rights to COBRA
continuation  coverage  to which he would  otherwise  be  entitled  under  WTX's
medical  insurance  plans or policies  pursuant to Section 4980B of the Internal
Revenue  Code  or  Sections   601-608  of  ERISA.

            6.    CONSULTING AGREEMENT.
                  ---------------------

                  Simultaneously  with the execution of this Agreement,  WTX and
the Executive shall execute a consulting  agreement in the form attached to this
Agreement  as  Exhibit  A  (the  "Consulting  Agreement"),  which  shall  become
effective on the date of this Agreement if the Executive  shall not have revoked
this  Agreement at or before  expiration  of the period  specified in Section 10
hereof.

<PAGE>

            7.    NONSOLICITATION, NONCOMPETITION AND
                  CONFIDENTIALITY AGREEMENTS.
                  -----------------------------------

                  (a) For a period of one year  following  the execution of this
Agreement,  the Executive shall not, directly or indirectly,  solicit any person
who is employed by WTX or any of its Subsidiaries or Affiliates to (A) terminate
his or her employment with WTX or such other company,  or (B) accept  employment
with anyone other than WTX or such other company.

                  (b)  The  Executive  agrees  that  he will  not,  directly  or
indirectly  (individually  or for,  with or through  any other  person,  firm or
corporation),  compete with WTX or any of its  Subsidiaries  or Affiliates for a
period of three years  following his  termination  of  employment  with WTX with
respect  to any  business  carried  on by WTX  or  any  of its  Subsidiaries  or
Affiliates as of the date of this Agreement.  Notwithstanding the foregoing, the
Executive shall be permitted to own not in excess of one percent of any class of
securities of any publicly traded company, provided the Executive is not part of
any controlling  group and is solely a passive  investor.

                  (c) All confidential  information  which the Executive may now
have or may have obtained  during his employment by WTX relating to the business
of WTX or any  Subsidiary  or  Affiliate  thereof  shall not be disclosed to any
other person (except as required by law) without the prior written permission of
WTX,  and  Executive  shall return all  tangible  evidence of such  confidential
information  to WTX  on the  date  of  this  Agreement  or  promptly  thereafter
following discovery thereof.  Such information shall not include any information
otherwise publicly known.

                  (d) The  Executive  shall also, no later than the date of this
Agreement,  or promptly thereafter following the Executive's  discovery thereof,

<PAGE>

return to WTX any credit cards, cardkey passes,  computer access codes, door and
file keys, and other property provided by WTX, if any.

                  (e)  All  of   Executive's   interest   in   patents,   patent
applications,  inventions,  technological innovations,  copyrights, developments
and  processes  during his  employment  by WTX owned or  developed  by Executive
relating to the business of WTX or any  affiliate  of WTX,  shall belong to WTX,
and without further compensation,  but at WTX's expense,  forthwith upon request
of WTX, Executive shall execute any and all such assignments and other documents
and take any and all such other action as WTX may reasonably request in order to
vest in WTX all  Executive's  right,  title and interest in and to such patents,
patent  applications,   inventions,   technological   innovations,   copyrights,
developments or processes,  free and clear of liens,  charges and  encumbrances.

                  (f) In the  event  of a breach  or  threatened  breach  of the
provisions  of this  Section  7,  the  Executive  acknowledges  that WTX will be
entitled  to seek from a court any  interim or  provisional  relief  that may be
necessary to protect  WTX's rights or property  pending the arbitral  tribunal's
determination of the merits of the controversy.

                  (g) If it is  determined  that any of the  provisions  of this
Section 7, or any part  thereof,  is  unenforceable  because of the  duration or
scope of such provision, it is the intention of the parties that the duration or
scope of such  provision,  as the case may be,  shall be  reduced  so that  such
provision becomes enforceable.

            8.    RELEASES.
                  ---------

                  (a) The Executive,  having received  independent legal advice,
voluntarily and knowingly  releases WTX, each of its Subsidiaries and Affiliates
and their  respective  officers and directors from any and all claims,  actions,

<PAGE>

and  causes of action he has or may have  arising  on or before the date of this
Agreement,  whether  known  or  unknown,  relating  to  his  employment  by,  or
termination of employment  with, WTX or any of its  Subsidiaries and Affiliates,
including, without limitation, (a) those arising under the Age Discrimination in
Employment Act of 1967, as amended, and other federal,  state or local human and
civil rights,  employment  discrimination  or labor laws,  and (b) those arising
under the  Employment  Contract,  except that the Executive does not release (i)
his right to have WTX  perform  its  obligations  under  this  Agreement  or the
Consulting  Agreement,  (ii) his right to  benefits  under  the ESOP,  (iii) any
claim, action or cause of action against an officer or director of WTX or any of
its  Subsidiaries or Affiliates for an intentional  tort as to which the primary
factual basis is not known by the Executive as of the date of this  Agreement or
(iv) his right to indemnification  under (1) the certificate of incorporation or
bylaws of WTX or any of its  Subsidiaries  or Affiliates of which he has been an
officer or director,  (2) the laws of the state of  incorporation  of WTX or any
such Subsidiary or Affiliate,  or (3) any insurance policy  maintained by WTX or
any such Subsidiary of Affiliate, as the case may be. The Executive acknowledges
that he was given a period of at least 21 days to  consider  whether  to execute
this Agreement and during such period he consulted with counsel of his choosing.
The Executive  further  acknowledges  that he has carefully read the release set
forth in this  paragraph,  fully  understands  it,  is  signing  this  Agreement
voluntarily,  and is receiving  consideration for the release.

                  (b) WTX, each of its Affiliates and Subsidiaries,  voluntarily
and knowingly releases the Executive from any and all claims, actions and causes
of action it has or may have  arising on or before  the date of this  Agreement,
whether known or unknown, except that WTX does not release its right to have the
Executive  perform  his  obligations  under  this  Agreement  or the  Consulting

<PAGE>

Agreement  or any  claim,  action  or  cause  of  action  that  WTX,  any of its
Affiliates  or  Subsidiaries  may have against the Executive to the extent it is
determined by a final  judgment  adverse to the Executive  that the  Executive's
acts or  omissions  were in bad faith or involved  intentional  misconduct  or a
knowing violation of law, or the Executive personally gained in fact a financial
profit or other advantage to which he was not legally  entitled.

            9.    COOPERATION IN LITIGATION.
                  --------------------------

                  The  Executive  shall  cooperate  and  generally  make himself
available to give testimony and assistance in connection  with any litigation or
arbitration  proceeding  or any  proceeding  or  investigation  initiated by any
governmental  authority or agency  involving WTX or any of its  Subsidiaries  or
Affiliates  and  arising  out  of  activities  of WTX  or  its  Subsidiaries  or
Affiliates  prior to the date of this  Agreement  and  during  the period of his
employment  with  WTX.  WTX  or  one of its  Subsidiaries  or  Affiliates  shall
reimburse  the  Executive  for,  or advance  to the  Executive,  all  reasonable
out-of-pocket  travel  and  other  expenses  incurred  by the  Executive  at the
specific   request  of  WTX  in  connection  with  the  Executive's   testimony,
cooperation  and  assistance  under  this  Section  9.  Such  expenses  shall be
reimbursed  or advanced  promptly  after the  Executive's  submission  to WTX of
statements in such reasonable  detail as WTX may require.  Time spent performing
Executive's  obligations  under this  Section 9 shall be deemed to be time spent
consulting  pursuant  to  the  Consulting   Agreement  and,   accordingly,   the
Executive's  compensation  for performing his  obligations  under this Section 9
shall be governed by the Consulting  Agreement.

            10.   OPPORTUNITY  FOR  REVIEW  BY  COUNSEL
                  AND  PERIOD  TO  REVOKE AGREEMENT.
                  -------------------------------------

                  The Executive acknowledges that he has been advised to consult
with an attorney before executing this Agreement. The Executive shall have seven
days after  executing this Agreement  (until  February 17, 1999) to revoke it by

<PAGE>

providing  written  notice to the  President  of  Worldtex  within the seven day
period,  whereupon the rights and  obligations  of the parties to this Agreement
and the Consulting Agreement shall be revoked  retroactively to the date of this
Agreement,  and WTX and the Executive  shall return to each other any amounts or
other benefits  provided under this Agreement or the Consulting  Agreement.

            11.   RIGHTS RELATING TO EMPLOYMENT AND TERMINATION.
                  ----------------------------------------------

                  This  Agreement and the  Consulting  Agreement  integrates and
embodies all understandings  and agreements among the Executive,  WTX and/or any
of its Subsidiaries or Affiliates in connection with the Executive's  employment
and termination of employment with WTX or any of its Subsidiaries or Affiliates.
Except as specifically  provided in this Agreement and the Consulting Agreement,
the Executive shall not be entitled to any payments or other benefits on account
of his having been employed by, or having terminated his employment with, WTX or
any of its Subsidiaries or Affiliates.

            12.   WITHHOLDING.
                  ------------

                  WTX shall  withhold from all amounts  payable to the Executive
under this  Agreement all federal,  state and local taxes  required by law to be
withheld with respect to such payments.  The withholding amounts for payments or
other  benefits to be made or provided  under this  Agreement  on the eighth day
after the date of this  Agreement  are set forth on Exhibit B.

            13.   NOTICE.
                  -------

                  Any  notice  required  or  permitted  to be given  under  this
Agreement  shall be in  writing  and shall be deemed  to have  been  given  when
delivered  personally  or on the fifth day after  being  sent by  registered  or

<PAGE>

certified mail, postage prepaid, return receipt requested, duly addressed to the
party  concerned at the address  indicated  below or to such changed  address as
such party may subsequently give notice of:

                  If to WTX:                Worldtex,  Inc.
                                            Westover Park, Suite 106
                                            915 Tate Boulevard,  S.E.
                                            Hickory,  North Carolina 28602
                                            Attention:  President

                  If to the Executive:      Richard J. Mackey
                                            107 Legendary Circle
                                            Palm Beach Gardens, Florida 33418

            14.   AMENDMENT OR WAIVER.
                  --------------------

                  No  provision  in this  Agreement  may be amended  unless such
amendment is agreed to in writing,  signed by the Executive and by an authorized
officer  of WTX.  No waiver by either  party  hereto of any  breach by the other
party of any  condition or  provision of this  Agreement to be performed by such
other party  shall be deemed a waiver of a similar or  dissimilar  provision  or
condition  at the same or any prior or  subsequent  time.  Any waiver must be in
writing and signed by the Executive or an authorized officer of WTX, as the case
may be.

            15.   SEVERABILITY.
                  -------------

                  In the event that any  provision  of this  Agreement  shall be
held to be invalid or  unenforceable  for any reason,  in whole or in part,  the
remaining  provisions of this  Agreement  shall be unaffected  thereby and shall
remain in full force and effect to the  fullest  extent  permitted  by law.

            16.   HEADINGS.
                  ---------

                  The headings of sections  contained in this  Agreement are for
convenience  only and shall not be deemed to control  or affect  the  meaning or
construction  of  any  provision  of  this  Agreement.


<PAGE>

            17.   COUNTERPARTS.
                  -------------

                  This  Agreement  may be executed in one or more  counterparts.

            18.   REFERENCES.
                  -----------

                  In  the  event  of  the   Executive's   death  or  a  judicial
determination of his incompetence, references in this Agreement to the Executive
shall be deemed,  where appropriate,  to refer to his legal representative or to
his beneficiary or beneficiaries.

            19.   BINDING AGREEMENT; ASSIGNMENT.
                  ------------------------------

                  Except as provided  in Section 10 hereof,  this  Agreement  is
binding  upon the  parties  hereto and their  respective  successors,  heirs and
assigns.  No rights or  obligations  under this  Agreement  may be  assigned  or
transferred by the Executive except that the Executive's  rights to compensation
and benefits  hereunder shall, in the event of death,  pass to his estate, or to
his designated beneficiary,  and may be transferred by will or operation of law.
In the  event of a future  disposition  of (or  including)  the  properties  and
business of WTX, substantially as an entirety, by merger, consolidation, sale of
stock or assets or otherwise,  then WTX shall require the acquiring or surviving
corporation  (which shall be substituted for WTX hereunder) to expressly  assume
and agree to perform  this  Agreement  in the same manner and to the same extent
that  WTX  would  have  been  required  to  perform  it had no such  disposition
occurred.  The Executive's rights under this Agreement shall not be transferable
by assignment or otherwise,  shall not be subject to  commutation or encumbrance
and shall not be subject to the claims of the Executive's creditors.

            20.   PAYMENT OBLIGATION ABSOLUTE.
                  ----------------------------

                  Except as provided in Section 10 hereof,  WTX's  obligation to
make  payments  provided  for  in  this  Agreement  and  otherwise  perform  its

<PAGE>

obligations  hereunder  shall be  absolute  and  unconditional  and shall not be
affected by any setoff, counterclaim,  recoupment, defense or other circumstance
or rights  which WTX may have against the  Executive  or anyone else  (including
without  limitation  any rights  which WTX may have  against the  Executive  for
violation of Section 7 of this Agreement),  all of which shall be required to be
asserted in  independent  proceedings.  The  Executive  shall not be required to
mitigate  the  amount  of any  payment  provided  for  herein by  seeking  other
employment  or taking  any other  action  nor  shall the  amount of any  payment
provided  for herein be reduced by amounts  earned by the  Executive  from other
employment or otherwise.

            21.   ARBITRATION; INDEMNIFICATION.
                  -----------------------------

                  (a) Any  controversy  or claim arising out of or in connection
with this  Agreement  shall be settled by  arbitration  held in New York City in
accordance  with  the  rules of the  American  Arbitration  Association  then in
effect,  and  judgment  upon the award  rendered  (including  an award for money
damages)  may be  entered  in any court  having  jurisdiction.  The costs of the
arbitration  proceedings  shall be  borne  by WTX.  Either  party  may,  without
inconsistency with this Agreement,  seek from a court any interim or provisional
relief  that may be  necessary  to protect  the rights or property of that party
pending the arbitral tribunal's  determination of the merits of the controversy.

                  (b) In addition to (and not in lieu of) any of the Executive's
rights to  indemnification  or  otherwise,  contained  in WTX's  certificate  of
incorporation,  by laws or any other agreement,  if any action, suit, proceeding
(including  any  arbitration  proceeding)  or claim shall be brought or asserted
with  respect to the  enforcement  or  interpretation  of this  Agreement or any
provision  contained herein, WTX, to the full extent permitted by applicable law

<PAGE>

and its  certificate  of  incorporation  and  by-laws  as in  effect on the date
hereof,  hereby indemnifies the Executive for his reasonable attorneys' fees and
other  expenses  incurred in connection  with such action,  suit,  proceeding or
claim and  agrees  to pay or  reimburse  the same  promptly  upon  demand by the
Executive  (plus  interest at the  applicable  Federal rate  provided in Section
7872(f)(2) of the Internal Revenue Code of 1986, as amended),  provided that WTX
shall not be obligated to indemnify  the  Executive  under this  Agreement  with
respect to any action,  suit,  proceeding  or claim  brought by the Executive in
which it is finally  determined  that the  Executive's  interpretations  of this
Agreement at issue, taken as a whole, are less correct than the  interpretations
asserted by WTX. WTX shall  preserve and make  available  to the  Executive  all
documents and information now or hereafter in the possession of WTX which may be
required by the  Executive  for the  prosecution  or defense of any such action,
suit,  proceeding or claim.

            22.   GOVERNING LAW.
                  --------------

            This  Agreement  shall be  governed  by the laws of the State of New
York. IN WITNESS WHEREOF, the Executive and WTX have caused this Agreement to be
executed as of the day and year first above written.

                                                WORLDTEX, INC.

                                                By: _______________________



                                                ________________________________
                                                        Richard J. Mackey


<PAGE>

                                                                       EXHIBIT A


                              CONSULTING AGREEMENT

            CONSULTING  AGREEMENT,   made  as  of  February  10,  1999,  between
WORLDTEX,  INC.,  a Delaware  corporation  ("WTX"),  and  RICHARD J. MACKEY (the
"Consultant").

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

            WHEREAS, the Consultant has previously been employed as an executive
of WTX and the  parties  now  wish to  enter  into an  arrangement  whereby  the
Consultant will act as a consultant to WTX.

            NOW,  THEREFORE,  in consideration of the premises and of the mutual
covenants herein contained,  and for other good and valuable consideration,  the
parties  hereto  agree as follows:

            1.    TERM.
                  -----

                  The term of this Agreement  shall commence on the date of this
Agreement and end on the day preceding the third anniversary of the date of this
Agreement,  unless the Agreement is earlier  terminated due to Cause (as defined
below).

            2.    SERVICES.
                  ---------

                  During  the  term of this  Agreement,  WTX  shall  retain  the
Consultant  as a  consultant  to WTX.  During that period the  Consultant  shall
consult  with and  advise  the  officers  of WTX with  respect  to such  matters
involving  the business and affairs of WTX as the officers may from time to time
present to him, which  consultation  may be made by telephone upon  Consultant's
request. Unless Disability (as defined below) has occurred, the Consultant shall
be  obligated to devote the  equivalent  of 15 business  days to his  consulting
duties during any yearly period  (treating the balance of 1999 after the date of

<PAGE>

this Agreement as a yearly period for these purposes to the extent his physician
advises his health permits).  Such consultation  shall be rendered at such times
as the Consultant  shall  reasonably  advise WTX's chief  executive  officer are
appropriate  giving  effect to his then  regular  personal  and  other  business
activities.  WTX's chief executive officer shall give the Consultant  reasonable
advance notice of any  requirements for  consultation,  and the Consultant shall
use his  reasonable  best efforts to perform such  consultation  on the schedule
requested.  Where  the  Consultant  is  required  to  render  any  service  on a
particular  day,  he shall  receive  credit  for a full day's  service.  WTX may
terminate this Agreement without any further  obligation  hereunder in the event
Cause has occurred.

            3.    FEES AND EXPENSES.
                  ------------------

                  (a) On the first  business  day of every month during the term
of this Agreement  commencing  with the month after the date of this  Agreement,
WTX shall pay the  Consultant  a fee of $4,767 in full  payment for his services
under  this  Agreement.  In the event of the  Consultant's  death or  Disability
during the term of this Agreement, any remaining fees payable during the term of
this Agreement shall become payable in monthly  installments to the Consultant's
beneficiaries.  If  the  Consultant  is  requested  by WTX to  perform  and  the
Consultant  consents and does perform consulting services hereunder in excess of
15 days per year he shall be paid at a rate of $250 per hour.

                  (b) The  Consultant  shall be  entitled to  reimbursement  for
expenses  reasonably  and  necessarily  incurred by him in  connection  with the
performance of his consultation duties, in accordance with WTX's then applicable
procedures,  including without  limitation  reimbursement for travel and related
expenses to and from  whatever  may be his then  current  place of  residence or
place where he may be conducting other business activities.


<PAGE>

            4.    DEFINITIONS OF DISABILITY AND CAUSE.
                  ------------------------------------

                  (a) "Cause" shall have occurred if the Consultant is convicted
of a felony  relating to the conduct of the business of WTX or any  affiliate of
WTX, the Consultant  commits an act of personal  dishonesty which is intended to
personally  enrich the  Consultant  or  members  of his family at the  financial
expense of WTX or any affiliate of WTX, or the  Consultant  fails to perform his
obligations  under this  Agreement  in any material  respect,  other than due to
death or  Disability,  after being given five business days in which to cure his
failure to perform.

                  (b)  "Disability"  shall have occurred if the  Consultant  has
been  physically  or  mentally  incapacitated  or  disabled  for a period of six
consecutive  months to an extent which renders the Consultant  unable to perform
his services as evidenced by the written confirmation of Consultant's  physician
and, if WTX shall so require, an independent physician.

            5.    NOTICE.
                  -------

                  Any  notice  required  or  permitted  to be given  under  this
Agreement  shall be in  writing  and shall be deemed  to have  been  given  when
delivered  personally  or on the fifth day after  being  sent by  registered  or
certified mail, postage prepaid, return receipt requested, duly addressed to the
party  concerned at the address  indicated  below or to such changed  address as
such party may subsequently give notice of:


<PAGE>

            If to  WTX:                 Worldtex, Inc.
                                        Westover Park, Suite 106
                                        915 Tate Boulevard, S.E.
                                        Hickory, North Carolina 28602

                                        Attention:  President

            If to the  Executive:       Richard J. Mackey
                                        107 Legendary Circle Palm
                                        Beach Gardens, Florida  33418

            6.    AMENDMENT OR WAIVER.
                  --------------------

                  No  provision  in this  Agreement  may be amended  unless such
amendment is agreed to in writing, signed by the Consultant and by an authorized
officer  of WTX.  No waiver by either  party  hereto of any  breach by the other
party of any  condition or  provision of this  Agreement to be performed by such
other party  shall be deemed a waiver of a similar or  dissimilar  provision  or
condition  at the same or any prior or  subsequent  time.  Any waiver must be in
writing and signed by the  Consultant  or an  authorized  officer of WTX, as the
case may be.

            7.    SEVERABILITY.
                  -------------

                  In the event that any  provision  of this  Agreement  shall be
held to be invalid or  unenforceable  for any reason,  in whole or in part,  the
remaining  provisions of this  Agreement  shall be unaffected  thereby and shall
remain in full force and effect to the fullest extent permitted by law.

            8.    HEADINGS.
                  ---------

                  The headings of sections  contained in this  Agreement are for
convenience  only and shall not be deemed to control  or affect  the  meaning or
construction of any provision of this Agreement.


<PAGE>

            9.    COUNTERPARTS.
                  -------------

                  This Agreement may be executed in one or more counterparts.

            10.   ASSIGNMENTS.
                  ------------

                  No rights or obligations  under this Agreement may be assigned
or  transferred  by the  Consultant  except  that  the  Consultant's  rights  to
compensation and benefits  hereunder  shall, in the event of death,  pass to his
estate,  or to his  designated  beneficiary,  and may be  transferred by will or
operation of law. In the event of a future  disposition  of (or  including)  the
properties  and  business  of WTX,  substantially  as an  entirety,  by  merger,
consolidation,  sale of stock or assets or otherwise, then WTX shall require the
acquiring  or  surviving   corporation  (which  shall  be  substituted  for  WTX
hereunder) to expressly  assume and agree to perform this  Agreement in the same
manner and to the same  extent  that WTX would have been  required to perform it
had no such disposition  occurred.  The Consultant's rights under this Agreement
shall not be  transferable  by assignment or otherwise,  shall not be subject to
commutation  or  encumbrance  and  shall  not be  subject  to the  claims of the
Consultant's creditors.

            11.   ARBITRATION; INDEMNIFICATION.
                  -----------------------------

                  (a) Any  controversy  or claim arising out of or in connection
with this  Agreement  shall be settled by  arbitration  held in New York City in
accordance  with  the  rules of the  American  Arbitration  Association  then in
effect,  and  judgment  upon the award  rendered  (including  an award for money
damages)  may be  entered  in any court  having  jurisdiction.  The costs of the
arbitration  proceedings  shall be  borne  by WTX.  Either  party  may,  without
inconsistency with this Agreement,  seek from a court any interim or provisional
relief  that may be  necessary  to protect  the rights or property of that party
pending the arbitral tribunal's determination of the merits of the controversy.


<PAGE>

                  (b)  In   addition  to  (and  not  in  lieu  of)  any  of  the
Consultant's  rights  to  indemnification  or  otherwise,   contained  in  WTX's
certificate of  incorporation,  by-laws or any other  agreement,  if any action,
suit,  proceeding  (including  any  arbitration  proceeding)  or claim  shall be
brought or asserted with respect to the  enforcement or  interpretation  of this
Agreement or any provision  contained herein,  WTX, to the full extent permitted
by applicable law and its certificate of incorporation  and by-laws as in effect
on the  date  hereof,  hereby  indemnifies  the  Consultant  for his  reasonable
attorneys'  fees and other  expenses  incurred in  connection  with such action,
suit,  proceeding or claim and agrees to pay or reimburse the same promptly upon
demand by the Consultant (plus interest at the applicable  Federal rate provided
in  Section  7872(f)(2)  of the  Internal  Revenue  Code of 1986,  as  amended),
provided that WTX shall not be obligated to indemnify the Consultant  under this
Agreement with respect to any action,  suit,  proceeding or claim brought by the
Consultant   in  which  it  is   finally   determined   that  the   Consultant's
interpretations  of this Agreement at issue,  taken as a whole, are less correct
than the interpretations  asserted by WTX. WTX shall preserve and make available
to  the  Consultant  all  documents  and  information  now or  hereafter  in the
possession of WTX which may be required by the Consultant for the prosecution or
defense of any such action, suit, proceeding or claim.

            12.   WITHHOLDING.
                  ------------

                  WTX shall withhold from all amounts  payable to the Consultant
under this  Agreement all federal,  state and local taxes  required by law to be
withheld with respect to such payments.

            13.   NO MITIGATION OR OFFSET.
                  ------------------------

                  The  Consultant  shall not be obligated to mitigate the amount
of any payment  provided for under this Agreement by seeking other employment or
taking any other action nor shall the amount of any payment  provided for herein
be  reduced  by  amounts  earned by the  Consultant  from  other  employment  or
otherwise.

<PAGE>

            14.   GOVERNING LAW.
                  --------------

                  This  Agreement  shall be governed by the laws of the State of
New York. IN WITNESS WHEREOF,  the Consultant and WTX have caused this Agreement
to be executed as of the day and year first above written.

                                                WORLDTEX, INC.

                                                By: ____________________________



                                                ________________________________
                                                        Richard J. Mackey


<PAGE>

               WITHHOLDING AMOUNTS FROM FEBRUARY 18, 1999 PAYMENT


A.   WTX PAYMENTS
     ------------

     1.   Section 3(a) - 300% of current salary       $  675,000

     2.   Section 3(c) - total of monthly
            installments remaining                     2,228,040

     3.   Section 5(a) - automobile                       65,000

B.   WITHHOLDING
     -----------

     1.   Federal Supplemental Wage Withholding
             (28%)
             -  $675,000 x 28%  = $189,000
             -    65,000 x 28%  =   18,200               207,200

     2.   FICA Withholding  (7.65% of first $68,400
                             plus 1.45% of balance)

             -  $ 68,400 x 7.65%  =$5,232.60              35,343.10
             -  2,076,586.49 (675,000 + 1,404,986.49
                (p.v. of $2,228,040) + 65,000 -
                68,400) x 1.45%  =  30,110.50

C.   NET CASH DUE TO RJM FEBRUARY 18, 1999               432,456.90
     -------------------------------------