PARAGON TRADE BRANDS INC
NOVATION AGREEMENT
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>10
<FILENAME>0010.txt
<DESCRIPTION>NOVATION AGREEMENT
<TEXT>

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                                                                    EXHIBIT 10.9

                              NOVATION AGREEMENT
                                      AND
                                GENERAL RELEASE

     This Novation Agreement and General Release ("Agreement") is made and
entered into by and between Robert McClain ("McClain") an individual, on the one
hand, and Paragon Trade Brands, Inc. ("Paragon"), on the other hand (jointly,
McClain and Paragon shall be referred to as the "Parties").

                                   RECITALS

     A.  McClain is employed by Paragon as its Executive Vice President of
Marketing, pursuant to an Employment Agreement entered into on August 11, 1998.
Pursuant to the Employment Agreement, McClain is entitled to participate in
Paragon's Confirmation Retention Plan for Top Eight Executives ("Confirmation
Retention Plan"), approved by the U. S. Bankruptcy Court on August 7, 1998.

     B.  McClain has advised Paragon that he intends to terminate his employment
at Paragon, and that he believes he is entitled to full benefits and severance
pay under the Employment Agreement and Confirmation Retention Plan. Paragon has
advised McClain that it believes he is not entitled to those benefits and
severance pay.

     C.  The Parties desire to resolve all differences between them, to
terminate McClain's employment amicably, and to provide McClain with a portion
of the benefits under the Employment Agreement and Confirmation Retention Plan.
They intend this Agreement to replace all obligations Paragon may have to
McClain under the Employment Agreement and Confirmation Retention Plan.

     NOW, THEREFORE, in consideration of the terms, conditions, and promises set
forth herein, it is agreed as follows:


                             TERMS AND SETTLEMENT

     1.  Nonadmission of Liability. This Agreement is entered into in compromise
of disputed claims. McClain acknowledges that the execution of this Agreement
and the agreed-upon consideration hereunder are not and shall not be construed
in any way as an admission of wrongdoing or liability on the part of Paragon.
The Parties intend by their actions pursuant to this Agreement merely to avoid
the expense, delay, and burden of further proceedings and disputes.

     2.  Monetary Consideration from Paragon. Paragon shall pay to McClain as
Severance Pay, in replacement of any and all Severance Pay that might be due
under the Employment Agreement or under the Confirmation Retention Plan, an
amount equal to the annual base salary of McClain. This Severance Pay shall be
paid in a lump sum promptly upon

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the expiration of the Revocation Period described below, if this Agreement
remains unrevoked. Paragon shall deduct applicable tax and other authorized
withholdings from the Severance Pay.

     3.  Benefits. Pursuant to obligations under COBRA, McClain shall remain
eligible to participate in Paragon's health and dental insurance plans for
eighteen (18) months following the effective date of this Agreement, unless
eligibility is earlier terminated under COBRA regulations. For the first twelve
(12) months of such COBRA eligibility (the "Benefit Period"), Paragon shall pay
the premium amounts it pays for other employees, and McClain shall be
responsible for paying any amounts paid by employees for coverage under the
terms of the benefit plans. If McClain shall fail to pay timely the portion of
the premium for which he is responsible Paragon shall be entitled to terminate
his coverage for the remainder of the Benefit Period. Further, if McClain
becomes eligible for alternative health insurance coverage or dental insurance
coverage during the Benefit Period, Paragon's obligations to pay any premiums
for him shall cease on the first of the month following his eligibility for
other coverage, provided such coverage is relatively equivalent to the benefit
coverage provided under the Paragon plans. McClain agrees that he shall promptly
notify Paragon if and when he becomes eligible for alternative health insurance
coverage or dental insurance coverage.

     4.  Release. McClain releases all rights and claims he has, or claims to
have, against Paragon arising on or before the execution of this Agreement. This
release specifically includes, but is not limited to, all rights and claims that
arose or may have arisen in connection with McClain's employment by Paragon or
the termination thereof, and any acts or omissions by Paragon during the period
of that employment, including, but not limited to, any defamation, libel and
slander claims, breach of contract claims, claims of conversion, interference
with contractual relationships, fraud, intentional or negligent
misrepresentation, discrimination of any kind, retaliation of any kind, tortious
interference with business relations or expectancy, negligence, intentional or
negligent infliction of emotional distress, claims for wrongful termination in
violation of public policy, and claims for breach of covenant of good faith or
fair dealing, whether arising under statute or common law. This release also
includes, but is not limited to, claims arising under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, and all other
federal, state and local statutes and regulations. Further, this release
includes, but is not limited to, any claims or rights McClain may have under the
Employment Agreement and the Confirmation Retention Plan. This release covers
all of McClain's rights against Paragon, as well as its successors,
predecessors, officers, directors, trustees, managers, creditors, servants,
heirs, agents, employees, representatives, attorneys, and insurers, past or
present (collectively, the "Paragon Releasees"). As used herein, the "Paragon
Releasees" includes all of Paragon's related or affiliated entities.

     5.  Release of Unknown Claims. For the purpose of implementing a full and
complete release and discharge of the Paragon Releasees, McClain expressly
acknowledges that, except as provided herein, this Agreement is intended to
include in its effect, without limitation, all claims that McClain did not know
or suspect to exist in his favor at the time of execution hereof, regardless of
whether the knowledge of such claims, or the facts upon which they might be
based, would materially have affected the settlement of this matter, and that
the consideration received from Paragon was also for the release of those claims
and contemplates the

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extinguishment of any such claims. McClain acknowledges that he intends and
expressly agrees that, except as provided herein, this Agreement shall be
effective as a bar to each and every claim, demand and cause of action McClain
has against the Paragon Releasees.

     6.  Confidentiality. McClain agrees to keep the fact and amount of this
settlement and the terms and contents of this Agreement completely confidential,
and agrees that he will not publicize or disclose the conditions, terms, or
contents of this Agreement in any manner, whether in writing or orally, to any
person, directly or indirectly, or by or through any agent, representative,
attorney, or any other person unless compelled to do so by law or except as
necessary to effectuate the terms of this Agreement. Under no circumstances may
McClain state or indicate to persons not authorized herein that he has received
any financial payment from Paragon as a part of this settlement. McClain may
acknowledge that his employment at Paragon ended amicably. McClain may discuss
this Agreement with his attorneys, his financial advisor and accountant as long
as he informs each that the terms of this Agreement are confidential and direct
that they maintain the same.

     7.  No Disparagement. The Parties agree that each will not disparage the
character, conduct, or abilities of any of the others with regard to the
circumstances surrounding McClain's employment with Paragon or his separation
from that employment.

     8.  No Filings. McClain represents that he has not filed any action,
lawsuit, claim, charge, or complaint against any of the Paragon Releasees with
any local, state, or federal agency or court, and covenants that he will not do
so at any time hereafter based upon events or omissions occurring prior to the
date of execution of this Agreement. In the event that any such agency or court
assumes jurisdiction of any lawsuit, claim, charge or complaint, or purports to
bring any legal proceedings against the Paragon Releasees on McClain's behalf,
he will request that such an agency or court withdraw from and/or dismiss the
lawsuit, claim, charge, complaint or any such proceeding with prejudice.

     9.  Novation and Continuing Terms. The Parties hereby cancel and rescind
the Employment Agreement between McClain and Paragon, except that McClain hereby
reaffirms his obligations under Sections 6 "Restrictive Covenant" and 7 "Non-
Disclosure of Confidential Information" of the Employment Agreement, and agrees
that such obligations are incorporated herein as set forth in full. Likewise,
McClain agrees that Section 8 of the Employment Agreement shall continue in
effect as though set forth in here in full. McClain specifically disavows and
renounces any rights he may have under the Confirmation Retention Plan.

     10.  Successors. This Agreement shall be binding upon the Parties, and
their heirs, spouses, representatives, executors, administrators, successors,
and assigns, and shall inure to the benefit of each and all of the Paragon
Releasees, and to their heirs, representatives, executors, administrators,
successors, and assigns.

     11.  No Costs. Each side shall bear its own attorneys' fees and costs
incurred in the negotiation of this Agreement.

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     12.  Full and Independent Knowledge. McClain represents and agrees that he
has thoroughly discussed all aspects of this Agreement with his attorney, that
he has carefully read and fully understands all the provisions of the Agreement,
and that he is voluntarily entering into this Agreement.

     13.  No Representations. McClain acknowledges that, except as expressly set
forth herein, no representation of any kind or character have been made to him
by any of the Paragon Releasees to induce the execution of this Agreement.

     14.  Ownership of Claims. McClain represents that he has not transferred or
assigned, or purported to transfer or assign, to any person or entity any claim,
or any portion thereof or interest therein, related in any way to the Paragon
Releasees. McClain further agrees to indemnify and hold harmless the Paragon
Releasees against any and all claims based upon, arising out of, or in any way
connected with any such actual or purported transfer or assignment.

     15.  Notices. All notices, requests, demands and other communications in
connection with this Agreement shall be made in writing and shall be deemed to
have been given when delivered by hand or facsimile transmission, or 48 hours
after mailing at any general or branch United States Post Office, by registered
or certified mail, postage prepaid, addressed as follows, or to such other
address as shall have been designated in writing by the addressee:

     (a)  If to the Company:

          Paragon Trade Brands, Inc.
          Attn:  Corporate Secretary
          180 Technology Parkway
          Norcross, Georgia  30092
          Facsimile:  (770) 300-3959

     (b)  If to Employee:

          Robert McClain
          196 N. Salem Rd
          Cross River, NY  10518

     16.  Miscellaneous.

          a. This Agreement is made and entered into in the State of Georgia and
shall in all respects be interpreted, enforced, and governed under the laws of
that State. The language of all parts in this Agreement shall be construed as a
whole, according to its fair meaning, and not strictly for or against either
party.

          b. Should any provision in this Agreement be declared or determined to
be illegal or invalid, the validity of the remaining parts, terms, or provisions
shall not be affected thereby, and the illegal or invalid part, term, or
provision shall be deemed not to be part of this Agreement, and all remaining
provisions shall remain valid and enforceable. However, should

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the releases contained in paragraph 4 and 5 of this Agreement be declared
unenforceable, in whole or in any part, Paragon shall have the option of
rescinding this Agreement. If Paragon elects to rescind this Agreement, McClain
shall immediately repay all monies paid to him pursuant to this Agreement.

          c. The Parties may execute this Agreement in one or more counterparts.
All counterparts shall be construed together and shall constitute one agreement.

          d. McClain has a period of twenty-one (21) days in which to consider
this Agreement, but may sign it in less than twenty-one (21) days at his option.

          e. McClain shall have a period of seven (7) days after he signs this
Agreement in which to revoke it (the "Revocation Period"). This Agreement shall
not become effective or enforceable until the Revocation Period has expired.

          f. This Agreement sets forth the entire agreement between the Parties
and fully supersedes any and all prior agreements and understandings between the
Parties pertaining to the subject matter of this Agreement.

                 *          *          *          *          *

PLEASE READ CAREFULLY.  THIS AGREEMENT INCLUDES THE RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.

                                    PARAGON TRADE BRANDS, INC.

Dated: August 1, 2000               By:  /s/  Michael T. Riordan
                                         --------------------------------

                                         ___________ TITLE:______________



                                    ROBERT McCLAIN, An Individual

Dated: July 18, 2000                By:  /s/  Robert McClain
                                         ---------------------------------
                                              Robert McClain

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