1 Exhibit 99.5 [Heller Financial Letterhead] August 27, 1998 The Nahdree Group, Inc. f/k/a The He-Ro Group, Inc. 580 Seventh Avenue New York, New York 10018 Nah Nah Collection, Inc. 213 West 35th Street New York, New York 10001 HRNL, Inc. 580 Seventh...

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                                                                    Exhibit 99.5


[Xxxxxx Financial Letterhead]


                                                                 August 27, 1998



The Nahdree Group, Inc.
f/k/a The He-Ro Group, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000

Nah Nah Collection, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000

HRNL, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000

Gentlemen

                  Reference is made to that certain Factoring and Revolving
Inventory Loan Security Agreement having the Effective Date of December 24, 1997
(the "Agreement") entered into among THE NAHDREE GROUP, INC. F/K/A THE HE-RO
GROUP, INC., NAH NAH COLLECTION, INC. HRNL, INC. (collectively and severally
referred to as "Client"), the other Loan Parties and XXXXXX FINANCIAL, INC
("Xxxxxx"). Capitalized terms used herein and not otherwise defined, shall have
the meanings ascribed to them in the Agreement.

                  This letter shall confirm that, effective as of May 31, 1998,
the Agreement was amended as follows:

         1.       Section 7.10(a) of the Agreement referring to Tangible Net
                  Worth was amended by: (i) deleting the amount for Fiscal Year
                  Ending May 31, 1998 and replaced with $1,600,000 and (ii)
                  deleting the amount for Fiscal Year Ending May 31, 1999 and
                  replaced with $2,300,000.

         2.       The amount set forth in Section 7.10(b) of the Agreement
                  referring to Working Capital was amended to ($515,000).

         3.       The amount set forth in Section 7.10(d) of the Agreement
                  referring to Capital Expenditure Limits was amended to 
                  $450,000.

                  Except as herein or heretofore amended or supplemented, the
Agreement remains in full force and effect in accordance with its original terms
and conditions.
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The Nahdree Group, Inc.
f/k/a The He-Ro Group, Inc.,
Nah Nah Collection, Inc.,
HRNL, Inc.
August 27, 1998
Page 2


                  If the foregoing correctly sets forth Client's and Xxxxxx'x
understanding, please sign the enclosed copy of this letter agreement in the
space provided and return such fully executed copy to the undersigned as soon as
possible.

                                                 Very truly yours,

                                                 XXXXXX FINANCIAL, INC.


                                               By: /s/ Xxxxxxx X. Xxxxxx
                                                 Name: Xxxxxxx X. Xxxxxx
                                                 Title: Vice President

CONSENTED AND AGREED TO
this 27th day of August 1998

THE NAHDREE GROUP, INC.
f/k/a The He-Ro Group, Inc.

By :/s/ Xxxxx Xxx
Name:   Xxxxx Xxx
Title:  CFO

CONSENTED AND AGREED TO
this 27th day of August, 1998

NAH NAH COLLECTION, INC.

By:/s/ Xxxxx Xxx
Name:  Xxxxx Xxx
Title: CFO

CONSENTED AND AGREED TO
this 27th day of August, 1998

HRNL, INC.

By:/s/ Xxxxx Xxx
Name:  Xxxxx Xxx
Title: CFO