Document:

FIFTH AMENDMENT TO CREDIT AGREEMENT

          FIFTH AMENDMENT TO CREDIT AGREEMENT, dated as of July 6, 2000 (this
"Amendment"), to the Credit Agreement dated as of June 29, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement")
among DONNKENNY APPAREL, INC. a Delaware corporation ("DKA"), BELDOCH INDUSTRIES
CORPORATION, a Delaware corporation ("BIC"; together with DKA, and severally,
the "Borrowers"), the Guarantors party thereto, the Lenders party thereto and
THE CIT GROUP/COMMERCIAL SERVICES, INC. as agent for the Lenders (in such
capacity, the "Agent").

          The Borrowers, the Guarantors, the Lenders and the Agent are parties
to the Credit Agreement.

          The Borrowers have requested that the Lenders make additional term
loans to Borrowers under the Credit Agreement in an aggregate amount of
$1,300,000 and amend certain provisions of the Credit Agreement, and the Lenders
are willing to make such additional term loans and make such amendments to the
Credit Agreement upon the terms and subject to the conditions set forth in this
Amendment.

          Accordingly, in consideration of the mutual agreements set forth
herein, and for good and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

          1. Defined Terms.
           (a) Existing Definitions. Initially capitalized terms used and not
              --------------------
otherwise defined herein shall have their respective meanings as defined in the
Credit Agreement.

          (b) Additional Definitions. As used herein, the following terms shall
have the respective meanings given to them below and Section 1.01 of the Credit
Agreement is hereby amended to include, in addition, and not in limitation, each
of the following definitions:

          "Supplemental Term Loan" shall mean the Supplemental Term Loan made
  pursuant to Sections 2.01 and 2.02.

          "Supplemental Term Loan Closing Date" shall mean July , 2000.
"Supplemental Term Loan Commitment" shall mean, with respect to any Lender, the
Supplemental Term Loan Commitment of such Lender as set forth in Schedule
2.01(c).

<PAGE>

          "Supplemental Term Notes" shall mean the Supplemental Term Notes of
Borrowers, executed and delivered as provided in Section 2.04, in substantially
the form of Exhibit A-1 hereto, as amended, modified or supplemented from time
to time.

          "Total Supplemental Term Loan Commitment" shall mean the sum of the
Lenders' Supplemental Term Loan Commitments, as the same may be reduced from
time to time pursuant to Section 2.07.

    (c) Amendments to Existing Definitions.

          (i) Amendment of Definition of Commitment. The defined term
"Commitment" set forth in Section 1.01 of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:

          ""Commitment" shall mean, with respect to each Lender, the sum of the
     Term Loan Commitment of such Lender as set forth in Schedule 2.01 (a) and
     the Supplemental Term Loan Commitment of such Lender as set forth in
     Schedule 2.01(c), as each maybe adjusted from time to time pursuant to
     Section 2.07, and the Revolving Credit Commitment of such Lender as set
     forth in Schedule 2.01(12)."

          (ii) Amendment of Definition of Loan. The defined term "Loan" set
forth in Section 1.01 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:

          "'Loan" shall mean the Term Loan, the Supplemental Term Loan or any
Revolving Credit Loan."

          (iii) Amendment of Definition of Notes. The defined term "Notes" set
forth in Section 1.01 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:

          "'Notes" shall mean, collectively, the Term Notes, the Supplemental
Term Notes and the Revolving Credit Notes."

          (iv) Amendment of Definition of Obligations. All references in the
Credit Agreement and in the other Loan Documents to the defined term
"Obligations" are hereby amended in each instance to include in addition, and
not in limitation, the Supplemental Term Loan.

          (v) Amendment of Definition of Total Commitment. The defined term
"Total Commitment" set forth in Section 1.01 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:

          "'Total Commitment" shall mean the sum of the Lenders' Total Term Loan
     Commitment plus Total Supplemental Term Loan

                                       2
<PAGE>

     Commitment plus Total Revolving Credit Commitment, as the same may be
     reduced from time to time pursuant to Section 2.07 hereof."

          2. Amendment of Section 2.01(a). Section 2.01(a) of the Credit
     Agreement is hereby amended by inserting the following new sentence at the
     end of such Section:

            "Subject to the terms and conditions and relying upon the
            representations and warranties herein set forth, each Lender,
            severally and not jointly, agrees to make the Supplemental Term Loan
            to the Borrowers on the Supplemental Term Loan Closing Date, in an
            aggregate principal amount not to exceed the amount of such Lender's
            Supplemental Term Loan Commitment set forth opposite its name in
            Schedule 2.01 (c) hereto."

          3. Amendment of Section 2.01(b). Section 2.01(b) of the Credit
     Agreement is hereby amended as follows:

                  (a) The third sentence of the first paragraph of Section 2.01
(b) is hereby amended by inserting therein, as new clause (ii) thereof, the
phrase " plus (ii) the principal amount of the Supplemental Term Loam
outstanding at any time" and by redesignating the currently existing clause (ii)
thereof as clause (iii) thereof.

                  (b) As a result of the amendments to Section 2.01(b) made by
clause (a) immediately above, Section 2.01(b) is amended and restated in its
entirety to read as follows:

                           "(b) Subject to the terms and conditions and relying
                  upon the representations and warranties herein set forth, each
                  Lender, severally and not jointly, agrees to make Revolving
                  Credit Loans to, and through the Agent open Letters of Credit
                  for the benefit of, the Borrowers, at any time and from time
                  to time from the date hereof to the Revolving Credit
                  Termination Date, in an aggregate principal amount at any time
                  outstanding not to exceed the amount of such Lender's
                  Revolving Credit Commitment set forth opposite its name in
                  Schedule 2.01 (b) annexed hereto. Notwithstanding the
                  foregoing, the aggregate principal amount of Revolving Credit
                  Loans outstanding at any time to the Borrowers shall not
                  exceed (1) the lesser of (A) the Total Revolving Credit
                  Commitment and (B) an amount equal to the total of (i) up to
                  ninety percent (90%) of the Net Amount of Eligible Receivables
                  plus (ii) the sum of (I) up to sixty percent (60%) of the Net
                  Amount of Eligible Inventory plus (II) up to sixty percent
                  (60%) of the undrawn amount of all outstanding Letters of
                  Credit for the importation of finished goods inventory
                  consigned to the Agent as of the date of determination (not to
                  exceed $37,000,000 at any time) minus (iii) any Availability
                  Reserves (the amount determined pursuant to this clause (B)
                  referred to herein as the "Borrowing Base"), minus (2) the
                  Letter of Credit Usage at such

                                        3
<PAGE>

                  time (not to exceed $35,000,000 at any time). In no event,
                  however, shall the sum of (i) the principal amount of the Term
                  Loan outstanding at any time plus (ii) the principal amount of
                  the Supplemental Term Loan outstanding at any time plus (iii)
                  the aggregate principal amount of Revolving Credit Loans
                  outstanding at any time exceed $75,000,000. In addition to and
                  not in limitation of the foregoing limitations with respect to
                  Revolving Credit Loans outstanding at any time to Borrowers,
                  and notwithstanding anything to the contrary contained in this
                  Section 2.01(b), the aggregate principal amount of Revolving
                  Credit Loans outstanding at any time to Borrowers solely with
                  respect to Eligible Receivables and Eligible Inventory shall
                  not exceed an amount equal to the total amount of Revolving
                  Credit Loans then available based upon the immediately
                  preceding clauses (B)(i) and (B)(ii)(I). The Borrowing Base
                  will be computed daily and a compliance certificate from a
                  Responsible Officer of the Borrowers presenting its
                  computation will be delivered to the Agent in accordance with
                  Section 6.05 hereof.

                         Subject to the foregoing and within the foregoing
                  limits, the Borrowers may borrow, repay (or, subject to the
                  provisions of Section 2.09 hereof, prepay) and reborrow
                  Revolving Credit Loans, on and after the date hereof and prior
                  to the Revolving Credit Termination Date, subject to the
                  terms, provisions and limitations set forth herein, including
                  without limitation, the requirement that, except as set forth
                  in Section 2.01(c), no Revolving Credit Loan shall be made
                  hereunder if the amount thereof exceeds the Availability
                  outstanding at such time."

          4. Addition of Schedule 2.01(c). The Credit Agreement is hereby
amended by adding thereto a new Schedule 2.01(c) - Supplemental Term Loan
Commitment in the form of Schedule 2.01 c attached hereto.

          5. Amendment of Section 2.02(b). Section 2.02(b) of the Credit
Agreement is hereby amended and restated in its entirety as follows:

                           "(b) Loans shall be made ratably by the Lenders in
                  accordance with their respective Term Loan Commitments,
                  Supplemental Term Loan Commitments or Revolving Credit
                  Commitments, as the case maybe, provided, however, that the
                  failure of any Lender to make any Loan shall not in itself
                  relieve any other Lender of its obligation to lend hereunder."

          6. Amendment of Section 2.02(d). Section 2.02(d) of the Credit
Agreement is hereby amended by inserting ",its Supplemental Term Loan" in the
first line thereof immediately after "Term Loan."

                                       4
<PAGE>

          7. Addition of Sections 2.04(f) and 2.04(g). Section 2.04 of the
Credit Agreement is hereby amended by adding thereto new Sections 2.04(f) and
3.04(g) as follows:

                           "(f) The Supplemental Term Loan made by a Lender
                  shall be evidenced by a single Supplemental Term Note, duly
                  executed by the Borrowers, dated as of the Supplemental Term
                  Loan Closing Date, in substantially the form of Exhibit A-1
                  annexed hereto, delivered and payable to such Lender in a
                  principal amount equal to its Supplemental Term Loan
                  Commitment on such date.

                           (g) The entire aggregate principal amount of the
                  Supplemental Term Loan (plus all accrued and unpaid interest
                  thereon), as evidenced by the Supplemental Term Notes, shall
                  be payable in thirty-six (36) consecutive monthly installments
                  commencing on January 1, 2001 and continuing on the first day
                  of each calendar month thereafter, of which the initial
                  thirty-five (35) monthly installments shall each be in an
                  amount equal to one-thirtyfifth (1/35th) of the original
                  principal amount of the Supplemental Term Loan and the
                  thirty-sixth (36th) and final installment shall be in the
                  amount of the entire remaining balance of the Supplemental
                  Term Loan together with all interest accrued thereon, provided
                  that, the entire unpaid balance of the Supplemental Term Loan,
                  together with all interest accrued thereon, shall be due and
                  payable no later than the earlier to occur of the Revolving
                  Credit Termination Date and the Final Maturity Date. All such
                  payments shall be distributed ratably among the Lenders in
                  accordance with their respective Supplemental Term Loan
                  Commitments. Each Supplemental Term Note shall bear interest
                  from its date on the outstanding principal balance thereof, as
                  provided in Section 2.05. All principal payments in respect of
                  the Supplemental Term Loan shall be accompanied by accrued
                  interest on the principal amount being repaid to the date of
                  payment. No scheduled payment of principal in respect of the
                  Supplemental Term Loan shall be made to the extent that a
                  lesser principal payment would result in the payment in full
                  of the outstanding amount of the Supplemental Term Loan, and
                  such lesser amount is paid."

          8. Amendment of Section 2.06(a).

            (a) The first sentence of Section 2.06(a) of the Credit Agreement is
hereby amended by inserting " plus the outstanding principal amount of such
Lender's Supplemental Term Loan" immediately after "Lenders' Term Loan" and
immediately prior to "during the quarter."

            (b) As a result of the amendments to Section 2.06(a) made by clause
(a) immediately above, Section 2.06(a) is amended and restated in its entirety
to read as follows:

                                       5

<PAGE>

                         "(a) The Borrowers shall pay each Lender, through the
                  Agent, (i) on the first Business Day of each October, January,
                  April and July, commencing October 1, 1999, and (ii) on the
                  Revolving Credit Termination Date, in immediately available
                  funds, a commitment fee (the "Revolving Credit Commitment
                  Fee") of one-quarter of one percent (1 /4 of 1%) perannum on
                  the amount by which the average daily unused amount of the
                  Revolving Credit Commitment of such Lender exceeds the sum of
                  the outstanding principal amount of such Lender's Term Loan
                  plus the outstanding principal amount of such Lender's
                  Supplemental Term Loan during the quarter (or shorter period
                  commencing with the date hereof or ending with the Revolving
                  Credit Termination Date) ending on such date."

            9. Amendment of Section 2.07(b). Section 2.07(b) of the Credit
 Agreement is hereby amended and restated in its entirety to read as follows:

                         "(b) The Total Term Loan Commitment and the Total
                  Supplemental Term Loan Commitment shall each be permanently
                  reduced by the amount of any repayment or prepayment of the
                  outstanding principal amount of the Term Loans or the
                  Supplemental Term Loans (as the case may be) on the date of
                  any such repayment or prepayment. In any event, all amounts
                  due and owing under the Total Term Loan Commitment and under
                  the Total Supplemental Term Loan Commitment shall be due and
                  payable on the earlier to occur of the Revolving Credit
                  Termination Date and the Final Maturity Date."

            10. Amendment of Section 7.10. Section 7.10 of the Credit Agreement
 is amended in its entirety to read as follows:

                         "Section 7.10 Minimum Interest Coverage Ratio. Permit
                  the Interest Coverage Ratio of the Parent and its Subsidiaries
                  on a Consolidated basis for each four consecutive fiscal
                  quarter period ending on the last day of each of the fiscal
                  quarters set forth below to be less than the ratio set forth
                  below opposite such fiscal quarter:

                  Quarterly Period Ending        Minimum Interest Coverage Ratio
                  -----------------------        -------------------------------
                  June 30, 2000                              N/A
                  September 30, 2000                         N/A
                  December 31, 2000                          1.14 to 1.00"

            11. Amendment of Section 7.11. Section 7.11 of the Credit Agreement
is hereby amended in its entirety to read as follows:

                                       6

<PAGE>

                           "Section 7.11 EBITDA. Permit EBITDA of the Parent and
                  its Subsidiaries (in each case computed and calculated in
                  accordance with GAAP) on a Consolidated basis for each four
                  consecutive fiscal quarter period ending on the last day of
                  each of the fiscal quarters set forth below to be less than
                  the amount set forth below opposite each such fiscal quarter:

                           Quarterly Period           Ending EBITDA
                           ----------------           -------------
                           June 30, 2000              ($1,650,000)

                           September 30, 2000            $395,000)

                           December 31, 2000           $3,882,000

            12. Amendment of Section 7.12A. Section 7.12A of the Credit
Agreement is hereby amended in its entirety to read as follows:

                           "Section 7.12A Tanizible Net Worth. Permit the
                  Tangible Net Worth of the Parent and its Subsidiaries (in each
                  case computed and calculated in accordance with GAAP) on a
                  Consolidated basis as of the end of each of the fiscal
                  quarters set forth below to be less than the amount set forth
                  below opposite each such fiscal quarter:

                  Quarterly Period Ending            Tangible Net Worth
                  -----------------------            ------------------
                  June 30, 2000                           $6,000,000

                  September 30, 2000                      $7,400,000

                  December 31, 2000                       $9,500,000

            13 . Organization and Amendment Fee. In consideration of the making
of the Supplemental Term Loan and the amendments to the Credit Agreement as set
forth herein, Borrowers shall pay to Agent, for the benefit of Lenders, or
Agent, at its option, may charge the account(s) of Borrowers maintained by Agent
an origination and amendment fee in the amount of $100,000, which fee is fully
earned and payable as of the date hereof and shall constitute part of the
Obligations.

            14. Representations and Warranties. Borrowers hereby represent and
warrant to Lenders that the representations and warranties set forth in Article
IV of the Credit Agreement are true on and as of the date hereof, as if made on
and as of the date hereof, after giving effect to this Amendment, except to the
extent that any such representation or warranty expressly relates to a prior
date, and breach of any of the representations and warranties made in this
paragraph 14 shall constitute and Event of Default under Article VIII(a) of the
Credit Agreement. Borrowers further represent and warrant that, after giving
effect to this Amendment, no Event of Default or event which, with the lapse of
time or the giving of notice or both, would become an Event of Default has
occurred and is continuing.

                                       7
<PAGE>

            15. Effectiveness. This Amendment shall become effective on the date
Agent shall have received counterparts of this Amendment duly executed and
delivered by each of the parties hereto.

         16. Continuing Effect of Credit Agreement. This Amendment shall not
constitute a waiver or amendment of any provision of the Credit Agreement not
expressly referred to herein and shall not be construed as a consent to any
further or future action on the part of either of the Borrowers that would
require consent of Lenders. Except as expressly amended by this Amendment, the
provisions of the Credit Agreement are and shall remain in full force and
effect.

          17. Applicable Law. This Amendment shall be construed in accordance
with and governed by the laws of the State of New York (other than the conflicts
of law principles thereof).

         18. Counterparts; Facsimile Sign. This Amendment may be executed in
counterparts, each of which shall constitute and original and all of which when
taken together shall constitute but one contract. Delivery of an executed
counterpart of the signature page of this Amendment by facsimile shall be
effective as delivery of a manually executed signature page hereto.

                            [Signature pages follow]

                                       8
<PAGE>

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

                               DONNKENNY APPAREL, INC.,
                                  as a Borrower and a Guarantor

                               By:   /s/ Beverly Eichel
                                    ---------------------------
                               Name:  Beverly Eichel
                               Title: Executive Vice President,
                                      Chief Financial Officer

                               BELDOCH INDUSTRIES CORPORATION,
                                  as a Borrower and a Guarantor

                               By:   /s/ Beverly Eichel
                                    ---------------------------
                               Name:  Beverly Eichel
                               Title: Executive Vice President,
                                      Chief Financial Officer

                               DONNKENNY, INC.,
                                  as a Guarantor

                               By:   /s/ Beverly Eichel
                                    ---------------------------
                               Name:  Beverly Eichel
                               Title: Executive Vice President,
                                      Chief Financial Officer

                               CHRISTIANSBURG GARMENT COMPANY,
                                  INCORPORATED, as a Guarantor

                               By:   /s/ Beverly Eichel
                                    ---------------------------
                               Name:  Beverly Eichel
                               Title: Executive Vice President,
                                      Chief Financial Officer

                               H SQUARED DISPOSITIONS, INC., as a Guarantor

                               By:   /s/ Beverly Eichel
                                    ---------------------------
                               Name:  Beverly Eichel
                               Title: Executive Vice President,
                                      Chief Financial Officer

                                          [SIGNATURES CONTINUE ON NEXT PAGE]

                                       9

<PAGE>

                                THE CIT GROUP/COMMERCIAL SERVICES, INC.,
                                  as Agent

                                By:   /s/ Lisa Murakami
                                     ---------------------------
                                Name:  Lisa Murakami
                                Title: Vice President

                                THE CIT GROUP/COMMERCIAL SERVICES, INC.,
                                  as a Lender

                                By:   /s/ Lisa Murakami
                                     ---------------------------
                                Name:  Lisa Murakami
                                Title: Vice President

                                CENTURY BUSINESS CREDIT CORPORATION,
                                  as a Lender

                                By:   /s/
                                     ---------------------------
                                Name:
                                Title:

                                       10

<PAGE>

                              SCHEDULE 2.01(c)

                       Supplemental Term Loan Commitments
<TABLE>
<CAPTION>

                                               Supplemental           Percentage of Total
                                               Term Loan              Supplemental Term
Lender                                         Commitment1            Loan Commitment
------                                         ----------             ---------------
<S>                                            <C>                    <C>
The CIT Group/Commercial Services, Inc.        $953,290                   73.33%
1211 Avenue of the Americas
New York, New York 10036
Attn: Lisa Murakami

Century Business Credit Corporation 119 West   $346,710                   26.66%
40th Street
New York, New York 10018
Attn: Steven Stone

</TABLE>

--------
 1 Based on the original principal amount of the Supplemental Term Loan

                                       11FIRST AMENDMENT TO
                              EMPLOYMENT AGREEMENT

         THIS FIRST AMENDMENT is made as of the 17th day of May, 2000, by and
among DANIEL H. LEVY (the "Executive"), DONNKENNY APPAREL, INC., a Delaware
corporation (the "Company") and DONNKENNY, INC., a Delaware corporation which
is the parent of the Company ("Donnkenny")

                               W I T N E S S E T H:

          WHEREAS, Executive, the Company and Donnkenny entered into that
 certain Employment Agreement dated as of June 1, 2000, pursuant to which
 Executive was employed as Chairman of the Board and Chief Executive Officer of
 the Company and each of its subsidiaries as well as in the capacity of Chief
 Executive Officer of Donnkenny (the "Employment Agreement"); and

         WHEREAS, the parties to the Employment Agreement deem it to be in their
mutual best interests to amend the Employment Agreement in certain respects in
recognition of the desire of the parties to solidify their respective
relationships on a long-term basis.

          NOW, THEREFORE, in consideration of the mutual covenants and
 agreements of the parties and other good and valuable consideration, the
 receipt and sufficiency of which is hereby acknowledged, effective immediately
 the Employment Agreement is hereby amended as follows:

          1. Section 3 of the Employment Agreement is amended by adding the
following new Section 3.j:

                   j. MOVING EXPENSES. The Company shall, within thirty (30)
          days after request by the Executive, either directly pay or reimburse
          Executive for each of (i) brokerage commissions paid or payable by
          Executive in connection with relocating his current residence from

<PAGE>

           Apartment 38H, 641 5th Avenue, New York, New York (the "Current
           Apartment") to another apartment residence in New York City selected
           by Executive (the "New Apartment"); provided, however, that in no
           event shall the Company's obligation respecting the payment of
           brokerage commissions exceed fifteen percent (15%) of annual rent for
           the New Apartment; and (ii) in the event that the rental term of the
           Current Apartment shall overlap the rental term of the New Apartment
           (the "Overlap Period"), the Company shall pay, during the overlap
           Period, the lesser of the rent for the Current Apartment and the rent
           for the New Apartment; and (iii) the federal, state and local income
           taxes for which Executive is liable on account of the payments
           referred to in Section 3j(i) and (ii) above, together with an amount
           sufficient to satisfy any additional federal, state or local income
           taxes for which Executive is liable on account of the amounts
           received pursuant to this Section 3.j (iii). Subsequent to the date
           Executive shall terminate occupancy of the Current Apartment during
           the current lease term therefor, Executive shall use his reasonable
           best efforts, subject to the terms of the lease for the Current
           Apartment, to make the Current Apartment available to the Company for
           use as a Company apartment. In the event the Company shall utilize
           the Current Apartment as a Company apartment during the current lease
           term, the Company shall indemnify, defend and hold Executive harmless
           from and against any and all losses, liabilities, costs, damages
           (including, without limitation, property damage, wrongful death or
           personal injury), penalties, fines, fees and expenses including,
           without limitation, reasonable legal fees and litigation expenses,
           suffered, sustained or incurred by Executive as a result of, in
           connection with or relating to, or alleged to result from, in
           connection with

                                       2
<PAGE>

          or in relation to, any breach of lease or acts or omissions associated
          with the occupancy of the Current Apartment.

          2. Section 4 of the Employment Agreement is amended by deleting the
  third sentence of such Section in its entirety and by substituting the
  following revised third sentence of such Section in its stead:

          In addition to and without limiting the generality of the foregoing,
          (i) the Company (x) may obtain and maintain a "key man" life insurance
          policy under which the Company is the named beneficiary in the amount
          of $2,500,000, and (y) shall promptly obtain and maintain a term life
          insurance policy in the amount of $2,500,000, which policy shall be
          owned by the Executive, in each case from a nationally-recognized
          insurance carrier reasonably acceptable to the Executive, and (ii) the
          Company shall provide, in addition to any such insurance regularly
          provided to the Company's executives and/or employees, long-term
          disability insurance which will pay at least sixty percent (60%) of
          Executive's Base Salary until the Executive reaches age 65.

  Section 4 of the Employment Agreement is further amended by deleting from the
  last sentence of such Section the words, "or on or after December 31, 2000."

          3. Section Sb. of the Employment Agreement is amended by deleting from
  the second paragraph of such Section the phrase, "In the event Executive shall
  become disabled or shall die on or after December 31, 2000, then the", and by
  substituting the word, "The", in its stead.

          4. Section Sc.l of the Employment Agreement is deleted in its
  entirety, and the following new Section Sc.l is substituted in its stead:

                                        3

<PAGE>

                    c. By the Company Without Cause.

                             i. The Company may only terminate the employment of
                    the Executive for Cause or upon the death or disability of
                    the Executive. If the employment of the Executive shall be
                    terminated without Cause and other than as a result of death
                    or disability of the Executive then, within thirty (30) days
                    after such termination, in addition to any amounts payable,
                    or benefits provided for in Section 5c.ii. below, or as
                    otherwise specifically provided for in this Employment
                    Agreement, the Company shall pay to the Executive, by wire
                    transfer of immediately available funds, an amount which is
                    equal to the greater of (x) the aggregate Base Salary
                    Executive would have been entitled to receive following such
                    termination through the end of the term hereof (including
                    any renewals or extensions) or (y) one year's annual Base
                    Salary which is in effect on the date such employment
                    terminates. The Executive shall have no obligation
                    whatsoever to mitigate any damages, costs or expenses
                    suffered or incurred by the Company or Donnkenny with
                    respect to the severance obligations set forth in this
                    Section 5c.1., and no such severance payment which is
                    received or receivable by the Executive shall be subject to
                    any reduction, offset, rebate or repayment as a result of
                    any subsequent employment or other business activity by the
                    Executive including, without limitation, self employment.

           5. Section 5c.ii. of the Employment Agreement is amended by
  deleting the phrase, "on or after December 31, 2000" from the second line of
  such Section.

           6. Section 5d.v. of the Employment Agreement is amended by deleting
  from the third sentence of such Section the phrase, "if such termination
  occurs on or after December 31, 2000,".

                                        4
<PAGE>

           7. Section Se. of the Employment Agreement is amended by deleting
  from such Section the words, "as of the December Termination Date".

           9. Except as is specifically provided for in this First Amendment to
  Employment Agreement, the Employment Agreement shall remain unamended and in
  full force and effect in accordance with its original terms; provided,
  however, that any prior ancillary letter agreements or other understandings
  entered into between Executive and the Company or Donnkenny with respect to
  the Employment Agreement or Executive's employment by the Company or Donnkenny
  including, without limitation, the letter from Executive to Donnkenny dated
  February 9, 2000 purporting to amend Section 5d.vi. of the Employment
  Agreement upon the occurrence of a certain Change of Control, shall be deemed
  immediately terminated, cancelled, superseded hereby and of no further force
  or effect.

                                        5
<PAGE>

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

                                             DONNKENNY, INC., a Delaware
                                             corporation

                                             By: /s/Lynn Siemers-Cross
                                                 -------------------------------
                                                 Name:Lynn Siemers-Cross
                                                 Title:PRESIDENT, CHIEF
                                                       OPEERATING OFFICER

                                             DONNKENNY APPAREL, INC., a
                                             Delaware corporation

                                             By: /s/Lynn Siemers-Cross
                                                 ------------------------------
                                                 Name:Lynn Siemers-Cross
                                                 Title:PRESIDENT, CHIEF
                                                       OPEERATING OFFICER

                                             EXECUTIVE

                                             /s/Daniel H. Levy
                                             -----------------------------------
                                             DANIEL H. LEVY

                                        6

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