EXECUTION
                                                                            COPY

                  SIXTH AMENDMENT dated as of July 1, 2000 (the  "Amendment") to
REVOLVING  CREDIT  AGREEMENT  dated as of June 2, 1997 ( as amended  through the
date hereof,  the "Credit  Agreement")  between LESLIE FAY MARKETING,  INC. (the
"Borrower") and THE CIT GROUP/COMMERCIAL SERVICES, INC. ("CIT"). Terms which are
capitalized in this Amendment and not otherwise  defined shall have the meanings
ascribed to them in the Credit Agreement.

                  WHEREAS,  the  Borrower  and Liz  Claiborne,  Inc., a Delaware
corporation ("Claiborne") entered into a Purchase Agreement dated as of February
15, 2000 (the "Claiborne Purchase  Agreement"),  pursuant to which (i) Claiborne
sold to the Borrower  certain assets of Claiborne and (ii) the Borrower  assumed
certain obligations of Claiborne, all on the terms and subject to the conditions
contained in the Claiborne Purchase Agreement;

                  WHEREAS,  the  Borrower,  Cynthia  Steffe,  Inc.,  a New  York
corporation   ("Steffe"),   and  Cynthia  Steffe  and  Richard   Roberts,   each
individually, entered into an Asset Purchase Agreement dated April 18, 2000 (the
"Steffe Purchase Agreement"), pursuant to which: (i) Steffe sold to the Borrower
substantially  all of the assets of Steffe used in its business of manufacturing
womens'  apparel and (ii) the Borrower  assumed  certain of the  obligations  of
Steffe,  all on the terms and subject to the conditions  contained in the Steffe
Purchase Agreement;

                  WHEREAS,  in  connection  with  the  transactions  hereinabove
described, the Borrower has requested CIT's consent to an increase in the amount
of the Revolving Credit  Commitment and to the modification of various terms and
provisions contained in the Credit Agreement;

                  WHEREAS,  CIT  has  agreed  to  increase  the  amount  of  the
Revolving  Credit  Commitment  and to  make  such  modifications  to the  Credit
Agreement,  all on the terms and subject to the  satisfaction  of the conditions
contained in this Amendment;

                  NOW,  THEREFORE,  in  consideration  of  the  mutual  promises
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

         SECTION ONE AMENDMENT OF CREDIT AGREEMENT. Upon the satisfaction of the
conditions contained in Section Two hereof, effective as of the date hereof, the
Credit Agreement is hereby amended to provide as follows:

         (A) Section 1.01. Certain Definitions.
         --------------------------------------

             (i) The  definition  of the term  Revolving  Credit  Commitment  is
deleted in its entirety,  the following is substituted in lieu thereof,  and the
terms set forth below, and the definitions thereof, are added to Section 1.01 in
the appropriate alphabetical order, as follows:
<PAGE>

             "Claiborne"  shall mean Liz  Claiborne,  Inc., a Delaware
             corporation, and its successors and assigns.

             "Claiborne Licensed Marks" shall mean, collectively,  the
             following  trademarks:   "Liz  Claiborne  Dresses,"  "Liz
             Claiborne  Petites  Dresses,"   "Elisabeth  Dresses"  and
             "Elisabeth   Petites   Dresses"   and   such   additional
             trademarks and trade names as may be used by the Borrower
             from time to time  pursuant to a license from  Claiborne,
             L.C. Licensing or any of their Affiliates.

             "Claiborne  Purchase  Agreement"  shall mean the Purchase
             Agreement,  dated as of February  15,  2000,  between the
             Borrower and Liz Claiborne, Inc.

             "Steffe  Acquisition"  shall mean the  acquisition by the
             Borrower  of  substantially  all of the  assets of Steffe
             used in its business of  manufacturing  womens'  apparel,
             all as  more  fully  set  forth  in the  Steffe  Purchase
             Agreement.

             "Steffe Purchase Agreement" shall mean the Asset Purchase
             Agreement,  dated  April 18,  2000,  among the  Borrower,
             Steffe, Cynthia Steffe and Richard Roberts.

             "L.C.  Licensing"  shall  mean L.C.  Licensing,  Inc.,  a
             Delaware corporation, and its successors and assigns.

             "Revolving  Credit  Commitment" shall mean the commitment
             of CIT to make Loans to the Borrower  pursuant to Section
             2.01(a)  hereof in an aggregate  principal  amount not to
             exceed  $52,000,000  at any time,  as such  amount may be
             reduced pursuant to the terms of this Agreement.

             "Steffe"  shall mean  Cynthia  Steffe,  Inc.,  a New York
             corporation, and its successors and assigns.

             "Steffe Licensed Marks" shall mean, collectively,  all of
             the   "Licensed   Marks"  as  defined  in  the  Licensing
             Agreement,  dated  as of May  10,  2000,  by and  between
             Cynthia  Steffe  and the  Borrower,  and such  additional
             trademarks  and tradenames as may be used by the Borrower
             from  time to time  pursuant  to a license  from  Cynthia
             Steffe, Steffe or any of their Affiliates.

             (ii) Clause (x) of the definition of Eligible  Accounts  Receivable
is deleted in its entirety, and the following is substituted in lieu thereof:

             "(x) the Account  Debtor with respect  thereto is not (A)
             also a supplier  to or  creditor  of the  Borrower or any
             other  Obligor   (excluding   Account  Debtors  that  are
             creditors  solely  as a  result  of

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<PAGE>

             chargebacks in the ordinary  course of business),  or (B)
             Claiborne,  L.C.  Licensing,  or any of their  respective
             Affiliates,  unless any such Account Debtor  described in
             clause (A) or (B) hereof has duly  executed and delivered
             to CIT a letter,  satisfactory to CIT,  pursuant to which
             such Account Debtor waives its rights of set-off;"

             (iii) The  definition  of Eligible  Accounts  Receivable is further
amended by (A) deleting the word "and" after clause (xii) thereof,  (B) deleting
the period at the end of clause (xiii) thereof and  substituting in lieu thereof
a semi-colon  and the word "and" and (C) inserting  the  following  clause (xiv)
immediately after clause (xiii) thereof:

             "(iv) such Account Receivable did not arise in connection
             with  the sale of  Inventory  (A)  containing  any of the
             Claiborne  Licensed Marks or Steffe Licensed Marks or (B)
             shipped  from a  location  leased  and/or  controlled  by
             Claiborne,  L.C.  Licensing,   Steffe  or  any  of  their
             respective Affiliates,  unless Claiborne,  L.C. Licensing
             or  Steffe,  as the case may be,  has duly  executed  and
             delivered to CIT a letter,  satisfactory to CIT, pursuant
             to which such Person has agreed  that,  in the event such
             Person receives any proceeds of such Accounts Receivable,
             such Person will promptly remit such proceeds to CIT."

             (iv)  Clause  (vii) of the  definition  of  Eligible  Inventory  is
deleted in its entirety, and the following is substituted in lieu thereof:

             "(vii) in the case of finished goods Inventory sold under
             or containing a licensed  trademark  (including,  without
             limitation,  the Claiborne  Licensed Marks and the Steffe
             Licensed  Marks),  CIT and the licensor of such trademark
             (including,  without limitation,  L.C. Licensing,  in the
             case of the Claiborne Licensed Marks, and Cynthia Steffe,
             in the case of the  Steffe  Licensed  Marks)  shall  have
             entered  into  an   agreement,   in  form  and  substance
             satisfactory to CIT, with respect to the rights of CIT to
             sell or otherwise dispose of such Inventory;"

             (v) The definition of Eligible  Inventory is further amended by (A)
deleting the word "and" after clause (viii) thereof,  (B) deleting the period at
the end of clause (ix) thereof and substituting in lieu thereof a semi-colon and
the word "and" and (C)  inserting  the following  clause (x)  immediately  after
clause (ix) thereof:

             "(x) in the case of  Inventory  located  at any  premises
             leased and/or controlled by Claiborne or Steffe or any of
             their respective agents or Affiliates,  CIT and Claiborne
             or Steffe,  or such agent or  Affiliate,  as the case may
             be, and, if such  premises  are leased or  sub-leased  to
             Claiborne or Steffe, or such agent or Affiliate,  CIT and
             the lessor of such premises,  shall have entered into one
             or

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<PAGE>

             more  agreements,  in form and substance  satisfactory to
             CIT,  pursuant to which  Claiborne,  Steffe,  such agent,
             such Affiliate,  and/or such lessor,  as the case may be,
             acknowledges the first priority  security interest of CIT
             in such  Inventory,  agrees  to waive or  subordinate  to
             CIT's  security  interest  (which   subordination   shall
             include  provisions  for a prohibition on the exercise by
             Claiborne,  Steffe,  such agent,  such Affiliate,  and/or
             such  lessor,  as the case may be, of its  remedies and a
             waiver of its right to  require  marshaling)  any and all
             claims such Person may, at any time,  have  against  such
             Inventory, whether for processing,  storage or otherwise,
             agrees to permit  CIT  access to, and the right to remain
             on,  such  premises,  for  such  period  of  time  as CIT
             determines is necessary or  desirable,  so as to exercise
             CIT's rights and remedies  and  otherwise  deal with such
             Inventory,  agrees not to commingle  such  Inventory with
             any other property,  and in the case of any Person who at
             any time has custody,  control or possession of any bills
             of lading or other  documents  of title  with  respect to
             such  Inventory,  agrees to hold such  bills of lading or
             other  documents  as  bailee  for CIT and to  follow  all
             instructions of CIT with respect thereto."

             (B) SECTION 3.01. LETTERS OF CREDIT. Section 3.01 (a)(i) is amended
by deleting the first two sentences  thereof,  and by substituting the following
in lieu thereof:

             "No documentary Letter of Credit may have a tenor of more
             than 90 days from the date of  issuance,  and no  standby
             Letter of  Credit  may have a tenor of more than 365 days
             from date of issuance,  provided, however, that no Letter
             of Credit  may have a final  expiry  date  which is later
             than five  Business Days before the  applicable  Maturity
             Date,  unless  it  is  cash  collateralized  in a  manner
             satisfactory to CIT, and provided,  further,  that one or
             more  documentary  Letters  of  Credit,  to be  issued in
             connection  with  transactions  between the  Borrower and
             suppliers,   vendors  or   contractors   that  deal  with
             inventory which bears a Claiborne  Licensed Mark,  having
             an  aggregate   maximum  amount  available  to  be  drawn
             thereunder  not in excess of $5,000,000 at any time,  may
             be issued  with  tenors  of more than 90 days,  but in no
             event more than 180 days. The aggregate  Letter of Credit
             Exposure shall not exceed $30,000,000,  of which not more
             than  $5,000,000  may be Letter of Credit  Exposure  with
             respect to Standby Letters of Credit; provided,  however,
             that  the  calculation  of such  $5,000,000  limit  shall
             exclude the Letter of Credit Exposure with respect to the
             "Warren Apparel Stand-by L/C", as such term is defined in
             Section Three of the Third Amendment, dated as of October
             27, 1998, to this Agreement."

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<PAGE>

             (C) SECTION 10.05. LOANS,  ADVANCES AND INVESTMENTS.  Section 10.05
is amended by (A) deleting clause (a) thereof and  substituting the following in
lieu thereof, (B) deleting the word "and" after clause (d) thereof, (C) deleting
the period at the end of clause (e) thereof and  substituting  in lieu thereof a
semi-colon  and the word  "and"  and (D)  inserting  the  following  clause  (f)
immediately after clause (e) thereof:

             "(a) loans to the  Parent,  all of the  proceeds of which
             are  lent   simultaneously  by  the  Parent  to  Dominick
             Felicetti and to each of the Designated  Officers  (each,
             including Dominick Felicetti,  a "senior manager") in the
             following original principal amounts:  (I) John Pomerantz
             - $1,176,666,  (II) John Ward - $1,115,521,  (III) Warren
             Wishart  -  $675,963  and  (IV)   Dominick   Felicetti  -
             $675,963, provided that (i) the proceeds of such loans by
             the  Parent to each of the  Designated  Officers  (each a
             "stock   acquisition   loan")   are   used  to  fund  the
             acquisition  of shares of  capital  stock of the  Parent,
             (ii)   such   shares   shall  be  owned  or   controlled,
             beneficially and of record, by the senior manager to whom
             such stock  acquisition  loan shall be made, (iii) on the
             date any such stock acquisition loan is made, no Event of
             Default,  or event  which with notice  and/or  passage of
             time would  constitute  an Event of  Default,  shall have
             occurred and be continuing,  and (iv)  concurrently  with
             the making of such stock  acquisition loan, the shares of
             capital  stock of the Parent  acquired  with the proceeds
             thereof  shall be pledged  and  assigned to the Parent as
             collateral  security  for the  repayment  of  such  stock
             acquisition  loan, and the Parent shall pledge and assign
             to  CIT,  and  deliver  to  CIT,  the   promissory   note
             evidencing  the  indebtedness  incurred by the applicable
             senior manager in connection with such stock  acquisition
             loan,  together  with the stock  certificates  evidencing
             such  shares of stock,  as  collateral  security  for all
             obligations,  liabilities and  indebtedness of the Parent
             to CIT arising under the Guaranty executed by the Parent,
             dated as of June 2, 1997, as amended, in favor of CIT (it
             being  understood  that to the extent  that the shares of
             capital  stock  so  acquired  are  subsequently  sold  or
             transferred  for cash and a portion  of the  proceeds  of
             such stock are  remitted to the  Borrower  in  accordance
             with the applicable  stock  acquisition loan to repay the
             principal  of the loan from the  Borrower  to the Parent,
             the  proceeds  of  which  were  used to fund  such  stock
             acquisition  loan, CIT shall promptly release its lien on
             and security  interest in the Parent's  security interest
             in the shares of capital stock so sold or transferred);"

             "(f) a loan  made to  Cynthia  Steffe,  or to her and her
             husband, Richard Roberts,  jointly, in a principal amount
             not to  exceed  the  original  principal  amount  of that
             certain  promissory  note  payable  to the  order  of the
             Borrower  executed  by one or both  of such  individuals,
             dated on or  about  May 10,  2000  (the  "Steffe  Closing

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<PAGE>

             Date"),  provided,  that (i) the interest rate applicable
             to  such  loan  shall  at  all  times  be  equal  to  the
             applicable  federal  funds rate;  (ii) the payment of all
             outstanding  principal of, and interest  accrued on, such
             loan  shall  become  due no later  than the tenth  (10th)
             anniversary  of the Steffe  Closing  Date;  (iii) amounts
             repaid with  respect to such loan may not be  reborrowed,
             (iv) the terms of such loan shall  provide  that it shall
             be  immediately  due and payable upon the  termination of
             Cynthia Steffe's employment with the Borrower; (v) on the
             date such  loan is made,  no Event of  Default,  or event
             which with notice and/or passage of time would constitute
             an  Event  of  Default,   shall  have   occurred  and  be
             continuing; and (vi) the terms of such loan shall require
             that (A) the entire amount of any  severance  payment due
             under any employment agreements or contracts entered into
             between the Borrower and Cynthia  Steffe  and/or  Richard
             Roberts  or (B) the  amount of any  distribution  (to the
             extent  required  pursuant to the applicable  document or
             agreement executed in connection with the Steffe Purchase
             Agreement, as in effect on the date of execution thereof)
             from any  profit-sharing  or other  retirement or similar
             benefit  plans of the Borrower or any of its  Affiliates,
             in which Cynthia Steffe or Richard Roberts  participates,
             or to which  either of them is entitled to the  benefits,
             be  applied  first,  to pay in full all then  outstanding
             principal and interest on such loan."

             (D) SECTION  10.06.  DIVIDENDS AND RELATED  DISTRIBUTIONS.  Section
10.06 is deleted in its  entirety,  and the  following  is  substituted  in lieu
thereof:

             "10.06.  The  Borrower  shall not declare,  make,  pay or
             agree to pay, any dividend or other  distribution  of any
             nature   (whether  in  cash,   property,   securities  or
             otherwise)  on  account of or in respect of shares of its
             capital stock or on account of the purchase,  redemption,
             retirement or  acquisition of any shares of capital stock
             (or  warrants,  options  or rights  therefor),  provided,
             however,  that,  in  addition  to  amounts  paid  by  the
             Borrower on or prior to the Fifth Amendment  Closing Date
             as dividends or to repurchase  stock,  the Borrower shall
             be permitted to declare and pay  dividends or  repurchase
             stock so long as the amount to be declared  and paid as a
             dividend or the amount to be paid to repurchase stock, as
             the  case  may  be,   together   with  all  such  amounts
             theretofore paid after the Fifth Amendment  Closing Date,
             shall not exceed, in the aggregate, the sum of $2,000,000
             plus,  if and to the  extent  that the Net  Income of the
             Parent,  calculated on a cumulative  basis for the period
             commencing with the fiscal quarter during which the Fifth
             Amendment  Closing Date occurs and ending with the fiscal
             quarter  preceding  any  date of  determination,  exceeds
             $1,000,000,  an  amount  equal  to (x)  one-half  of such
             cumulative  Net Income in excess of $1,000,000  minus (y)
             all amounts  after the Fifth

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<PAGE>

             Amendment   Closing  Date  and  prior  to  such  date  of
             determination   distributed   as  dividends  or  paid  to
             repurchase  stock  (including  amounts so  distributed or
             paid  pursuant  to  the  $2,000,000  basket   hereinabove
             provided),  provided further that (a) at the time of, and
             after giving  effect to, any such payment of dividends or
             repurchase  of  stock,  no Event of  Default  shall  have
             occurred and be continuing and (b) solely for purposes of
             determining the Borrower's compliance with this covenant,
             the calculation of such Net Income shall exclude negative
             goodwill, and provided further that any amounts which the
             Borrower  may loan or advance to the Parent  pursuant  to
             Section  10.05  (a) may  instead  be  distributed  to the
             Parent,  or  otherwise  paid to the Parent as a dividend,
             but  without  duplication  of any  amounts  so  loaned or
             advanced."

             (E) SECTION 10.20. CAPITAL  EXPENDITURES.  Section 10.20 is deleted
in its entirety, and the following is substituted in lieu thereof:

             "10.20 Capital Expenditures.  The Borrower shall not make
             Capital  Expenditures  in  an  amount  greater  than  (a)
             $4,000,000 in the aggregate for the fiscal year ending in
             December 2000 and (b) $2,500,000 in the aggregate for the
             fiscal year ending in December  2001, and for each fiscal
             year thereafter, provided, however, that if the aggregate
             amount of Capital  Expenditures  actually made during any
             such fiscal year (or lesser period,  if applicable) shall
             be less than the limit  with  respect  thereto  set forth
             above (such limit,  without giving effect to any increase
             therein  pursuant to this  proviso,  the "base  amount"),
             then  the  amount  of  such  short  fall  (the  "rollover
             amount")   may  be  added  to  the   amount  of   Capital
             Expenditures  permitted  to be made  for the  immediately
             succeeding  fiscal  year,  provided,  further,  that  any
             Capital  Expenditures  made  during any  fiscal  year for
             which any rollover  amount shall have been so added shall
             be applied  first,  to the base  amount for such year and
             second,  to the  rollover  amount  added  to such  fiscal
             year."

             (F) SCHEDULE  1.01 A.  Schedule  1.01 A to the Credit  Agreement is
deleted in its entirety and Schedule 1.01 A to this  Amendment is substituted in
lieu thereof.

             SECTION TWO  --CONDITIONS  PRECEDENT.  This Amendment  shall become
effective on the date when all of the following conditions,  the satisfaction of
each of which is a condition  precedent to the  effectiveness of this Amendment,
shall have occurred:

             (A) CIT  shall  have  received  a  fully  executed  counterpart  or
original of this  Amendment,  including  revised  Schedule  1.01 A to the Credit
Agreement;

             (B) CIT  shall  have  received  the  Second  Amended  and  Restated
Promissory Note, substantially in the form annexed hereto as Exhibit A, executed
by the Borrower;

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<PAGE>

             (C) CIT  shall  have  received  a  fully  executed  counterpart  or
original of a Confirmation of Continuing Secured  Guaranties,  executed in favor
of CIT by each Guarantor, substantially in the form annexed hereto as Exhibit B;

             (D) CIT shall have received a  Certificate  of the Secretary of the
Borrower  (1)  relating  to the  adoption  of the  resolutions  of the  Board of
Directors of the Borrower,  approving  this  Amendment  and the other  documents
executed  or to be  executed  by the  Borrower  in  connection  herewith  and in
connection  with  the  Claiborne  Purchase  Agreement  and the  Steffe  Purchase
Agreement  and  (2)  certifying  that  since  June  4,  1997,  no  amendment  or
modification to the certificate of incorporation and by-laws of the Borrower has
been made,  and further  certifying  the names and incumbency of officers of the
Borrower  authorized  to sign  this  Amendment  and the  other  documents  to be
executed in  connection  herewith  and the  validity of the  signatures  of such
officers;

             (E) CIT shall have received a Solvency  Certificate  from the chief
financial officer of the Parent and the Borrower;

             (F)  CIT  and  its  counsel  shall  have  received  copies  of  the
definitive  Claiborne  Purchase  Agreement and the Steffe Purchase Agreement and
all ancillary documents relating thereto, each as executed;

             (G) CIT shall have received, in form and substance  satisfactory to
CIT, a collateral  assignment of all of the Borrower's  rights under each of the
Steffe Purchase Agreement and the Claiborne Purchase Agreement;

             (H) Upon the effectiveness of this Amendment,  all  representations
and warranties set forth in this Amendment and in the Credit  Agreement  (except
for such inducing  representations  and warranties that were only required to be
true and correct as of a prior  date) shall be true and correct in all  material
respects on and as of the effective date hereof;

             (I) No event or  development  shall have occurred since the date of
delivery to CIT of the most recent  financial  statements  of the Parent and its
Subsidiaries  which event or development has had or is reasonably likely to have
a Material Adverse Effect;

             (J) All  corporate  and legal  proceedings  and all  documents  and
instruments  executed or delivered in connection  with this  Amendment  shall be
satisfactory in form and substance to CIT and its counsel;

             (K)  There  shall  be no  action,  suit or  proceeding  pending  or
threatened  against the  Borrower  before any court  (including  any  bankruptcy
court),  arbitrator  or  governmental  or  administrative  body or agency  which
challenges or relates to the  consummation of the  transactions  contemplated by
the Steffe Purchase Agreement or the other transactions contemplated herein;

             (L) CIT  shall  have  received  payment  for its own  account  of a
closing fee in the amount of $200,000, which shall be payable in cash and which,
when paid, shall be deemed to be fully earned and non-refundable;

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<PAGE>

             (M) CIT shall have received a legal opinion from the firm of Parker
Chapin LLP, in form and substance  satisfactory to CIT and its counsel, and such
further agreements,  consents,  instruments and documents as may be necessary or
proper  in the  reasonable  opinion  of CIT and its  counsel  to  carry  out the
provisions and purposes of this Amendment;

             (N) CIT and its counsel  shall have  received and reviewed to their
satisfaction  results  of UCC  searches  performed  with  respect to (i) any new
locations set forth in revised Schedule 1.01A to the Credit  Amendment,(ii)  the
assets of Steffe  purchased  by the  Borrower  pursuant  to the Steffe  Purchase
Agreement;  and (iii) the assets of Claiborne purchased by the Borrower pursuant
to the Claiborne Purchase Agreement;

             (O) CIT shall have received evidence,  satisfactory to it, that the
Borrower has obtained  adequate  insurance,  in accordance with the terms of the
Credit Agreement, for each of the locations set forth in revised Schedule 1.01 A
to the Credit Agreement; and

             (P) CIT shall have  received  such  further  agreements,  consents,
instruments  and  documents  as may be  necessary  or proper  in the  reasonable
opinion of CIT and its counsel to carry out the  provisions and purposes of this
Amendment.

             SECTION  THREE   -REPRESENTATIONS  AND  WARRANTIES.   The  Borrower
represents and warrants (which  representations and warranties shall survive the
execution and delivery hereof) to CIT that:

             (A) The Borrower has the corporate power, authority and legal right
to execute, deliver and perform this Amendment, and the instruments, agreements,
documents  and  transactions  contemplated  hereby,  and has taken  all  actions
necessary  to  authorize  the  execution,   delivery  and  performance  of  this
Amendment,   and  the  instruments,   agreements,   documents  and  transactions
contemplated hereby;

             (B)  No  consent  of any  Person  (including,  without  limitation,
stockholders  or creditors  of the  Borrower or creditors of the Parent,  as the
case may be) other than CIT, and no consent,  permit,  approval or authorization
of,  exemption by, notice or report to, or  registration,  filing or declaration
with any governmental  authority,  is required in connection with the execution,
delivery,  performance,  validity or enforceability  of this Amendment,  and the
instruments,  agreements, documents and transactions contemplated hereby, except
for such consents which have been obtained;

             (C) This  Amendment  has been duly executed and delivered on behalf
of the Borrower by its duly authorized officer, and constitutes the legal, valid
and binding  obligation of the  Borrower,  enforceable  in  accordance  with its
terms;

             (D) The Borrower is not in default under any  indenture,  mortgage,
deed of trust, or other material agreement or material instrument to which it is
a party or by which it may be bound.  Neither the execution and delivery of this
Amendment,  nor the consummation of the transactions  herein  contemplated,  nor
compliance  with the  provisions  hereof will (i) violate any law or  regulation
applicable  to the Borrower,  or (ii) cause a violation by the Borrower,  of any
order or decree of any court or government  instrumentality applicable to it, or
(iii)  conflict with, or result in the breach of, or constitute a default under,
any indenture,  mortgage, deed of trust, or

                                       9
<PAGE>

other material agreement or material instrument to which the Borrower is a party
or by which it may be bound, or (iv) result in the creation or imposition of any
lien, charge, or encumbrance upon any of the property of the Borrower, except in
favor of CIT, to secure the  Obligations,  or (v) violate any  provision  of the
Certificate  of  Incorporation,  By-Laws or any capital stock  provisions of the
Borrower;

             (E) No Event of Default,  or event which with notice and/or passage
of time would  constitute an Event of Default,  has occurred and is  continuing;
and

             (F) Since the date of CIT's receipt of the financial  statements of
the Parent and its  Subsidiaries on a consolidated and  consolidating  basis for
the annual  period  ended on January  1, 2000,  no change or event has  occurred
which has had or is reasonably likely to have a Material Adverse Effect.

             SECTION FOUR -GENERAL PROVISIONS.

             (A) Except as herein  expressly  amended,  the Credit Agreement and
all other  agreements,  documents,  instruments  and  certificates  executed  in
connection  therewith,  are  ratified  and  confirmed  in all respects and shall
remain in full force and effect in accordance with their respective terms.

             (B) All  references in the Related  Documents and Loan Documents to
the  Credit  Agreement  shall  mean the  Credit  Agreement  as amended as of the
effective  date  hereof,  and  as  amended  hereby  and  as  hereafter  amended,
supplemented or modified from time to time. From and after the date hereof,  all
references in the Credit Agreement to "this Agreement,"  "hereof,"  "herein," or
similar terms,  shall mean and refer to the Credit  Agreement as amended by this
Amendment.

             (C)  This   Amendment  may  be  executed  by  the  parties   hereto
individually or in combination, in one or more counterparts, each of which shall
be an original and all of which shall constitute one and the same agreement.

             (D) This Amendment  shall be governed and controlled by the laws of
the State of New York without reference to its conflict of law principles.

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

                                 LESLIE FAY MARKETING, INC.

                                 By:
                                    --------------------------------------------
                                    Name:
                                    Title:

                                 THE CIT GROUP/COMMERCIAL  SERVICES, INC.

                                 By:
                                    --------------------------------------------
                                    Name:
                                    Title:

                                       10
<PAGE>


                                                                       EXHIBIT A
                                                                       ---------

                           SECOND AMENDED AND RESTATED
                                 PROMISSORY NOTE

$52,000,000                                               Date of Original Note:
New York, New York                                            as of June 2, 1997

                                               Date of Amendment and Restatement
                                        of Original Note: as of October 27, 1998

                                            Date of Amendment and Restatement of
                                                Amended Note: as of July 1, 2000


                  FOR VALUE  RECEIVED,  LESLIE FAY  MARKETING,  INC., a Delaware
corporation  (the  "Borrower"),  promises  to  pay  to  the  order  of  THE  CIT
GROUP/COMMERCIAL  SERVICES,  INC.  ("CIT")  on or before the  Maturity  Date (as
defined in the Agreement referred to below), and at such earlier dates as may be
required by the  Agreement,  the lesser of (i) the  principal  sum of  FIFTY-TWO
MILLION DOLLARS  ($52,000,000)  or (ii) the aggregate unpaid principal amount of
all Loans made by CIT to the Borrower  pursuant to the  Agreement.  The Borrower
further  promises to pay to the order of CIT  interest  on the unpaid  principal
amount  hereof  from  time to time  outstanding  at the rate or rates  per annum
determined  pursuant  to the  Agreement,  payable  on the dates set forth in the
Agreement.

                  This Second Amended and Restated  Promissory Note  constitutes
an amendment and restatement of the Amended and Restated  Promissory Note, dated
as of October 27,  1998,  in a principal  amount of  $42,000,000,  issued by the
Borrower and payable to CIT (the "Amended  Note").  The Amended Note constituted
an amendment and restatement of the "Note" (the "Original  Note") referred to in
the  Revolving  Credit  Agreement  dated as of June 2, 1997 by and  between  the
Borrower and CIT (as the same may be amended, modified or supplemented from time
to time, the "Agreement").  This Second Amended and Restated  Promissory Note is
entitled to the benefits of the Agreement,  which, among other things,  provides
for the  acceleration  of the  maturity  hereof upon the  occurrence  of certain
events and for prepayments in certain  circumstances  and upon certain terms and
conditions. Terms defined in the Agreement have the same meanings herein.

                  This Second Amended and Restated Promissory Note is secured by
and is entitled to the benefits of the liens and security  interests  granted by
the Agreement and the other Related Documents referred to in the Agreement,  and
is further entitled to the benefits of the security  agreements,  guarantees and
other Related Documents referred to in the Agreement.

                  The Borrower  hereby  expressly  waives  presentment,  demand,
notice,  protest  and all other  demands  and  notices  in  connection  with the
delivery, acceptance, performance, default

                                      A-1
<PAGE>

or  enforcement  of this Second  Amended and  Restated  Promissory  Note and the
Agreement,  and  an  action  for  amounts  due  hereunder  or  thereunder  shall
immediately accrue.

                  This Second  Amended  and  Restated  Promissory  Note shall be
governed by,  construed and enforced in accordance with the laws of the State of
New York,  without regard to choice of law  principles.  This Second Amended and
Restated  Promissory  Note amends and restates in its entirety the Amended Note,
which amended and restated in its entirety the Original Note, but no novation or
cancellation of the  indebtedness  evidenced by the Amended Note or the Original
Note has been created by virtue of this amendment and  restatement,  and none is
intended or implied.  The Borrower  hereby  confirms and reaffirms that all such
indebtedness  continues  to be owing by it in  accordance  with the terms of the
Agreement.

                                    LESLIE FAY MARKETING, INC.

                                    --------------------------------------------
                                    By:    Warren Wishart
                                    Title: Senior Vice President
                                           Chief Financial Officer and Treasurer

                                      A-2
<PAGE>

                                                                       EXHIBIT B
                                                                       ---------

                     THE CIT GROUP/COMMERCIAL SERVICES INC.
                           1211 Avenue of the Americas
                            New York, New York 10036


                                                              As of July 1, 2000

The Leslie Fay Company, Inc.
Leslie Fay Licensing Enterprises Corp.
1412 Broadway
New York, NY 10018

                Re: Confirmation of Continuing Secured Guaranties
                -------------------------------------------------

Gentlemen:

                  Reference  is made to the  separate  instruments  of guaranty,
each  dated  as of June 2,  1997,  executed  by each of you in  favor of The CIT
Group/Commercial   Services,   Inc.  (the  "Lender")   (each  a  "Guaranty"  and
collectively  the  "Guaranty").  Terms  which  are  capitalized  herein  and not
otherwise defined shall have the meanings ascribed to them in the Guaranty.

                  By  your  signature   below,  you  each  hereby  confirm  your
acknowledgment of and agreement with the following:

                  1.  Concurrently  with the execution of this letter agreement,
the Lender and Leslie Fay Marketing, Inc. (the "Borrower") are entering into the
Sixth  Amendment to the Credit  Agreement (the "Sixth  Amendment"),  pursuant to
which,  among other things,  the Revolving Credit  Commitment (as defined in the
Credit Agreement) shall be increased to $52,000,000.

                  2. In conjunction  with the execution of the Sixth  Amendment,
the Amended and  Restated  Promissory  Note,  dated  October  27,  1998,  in the
principal  amount of  $42,000,000,  evidencing the  indebtedness of the Borrower
under the Credit Agreement, will be amended and restated in full, in the form of
a Second  Amended  and  Restated  Promissory  Note in the  principal  amount  of
$52,000,000 (the "Second Amended and Restated Note").

                  3. The term "Obligations", as set forth in the Guaranty, means
and includes all Obligations  evidenced by, arising under or relating to (a) the
Second  Amended and Restated  Note and (b) the Credit  Agreement,  as heretofore
amended,  as amended  pursuant  to the Sixth  Amendment,  and as the same may be
hereafter amended from time to time.

                  4. Each of you  continues  to be liable  for the  payment  and
performance of all  Obligations,  in accordance  with the terms of the Guaranty,
and the Guaranty  executed by each of you continues to be valid and binding upon
each of you, respectively, and enforceable against each of you, respectively, in
accordance with its terms.

                                      B-1
<PAGE>

                  5. This letter agreement shall be governed by and construed in
accordance with the internal  substantive  laws of the State of New York without
giving  effect to conflicts of law  principles  thereof.  If the foregoing is in
accordance  with  your  understanding,  kindly  sign in the  space  below  to so
indicate.

                                         Very truly yours,

                                         THE CIT GROUP/COMMERCIAL
                                         SERVICES INC.


                                         By:
                                            ------------------------------------
                                            Name:
                                            Title:
Acknowledged and Agreed:

THE LESLIE FAY COMPANY, INC.

By:
   ----------------------------
       Name:
       Title:

LESLIE FAY LICENSING
ENTERPRISES CORP.

By:
   ----------------------------
       Name:
       Title:


                                      B-2
<PAGE>

                                 Schedule 1.01A

                           Leslie Fay Marketing, Inc.
                          Domestic Inventory Locations

                          [to be supplied by Borrower]