The CIT Group/
Commercial Services, Inc.
1211 Avenue of the Americas
New York, NY 10036



                                               February 23, 1998


Leslie Fay Marketing, Inc.
1412 Broadway
New York, New York 10018

Gentlemen:

Reference is made to the Revolving Credit Agreement between us, dated as of June
2, 1997, as supplemented and amended (herein the "Agreement"). Capitalized terms
used herein and  defined in the  Agreement  shall have the same  meanings as set
forth therein unless otherwise specifically defined herein.

Pursuant  to mutual  understanding,  effective  as of  December  31,  1997,  the
Agreement is hereby amended as follows:

           1. Section  10.15 of Article X of the  Agreement  entitled  "Negative
Covenants"  is  hereby  deleted  in its  entirety  and shall  hereafter  read as
follows:

                                 "10.15.   Minimum  Consolidated   Tangible  Net
                      Worth.   The   Borrower   will  not  permit  the  Parent's
                      Consolidated  Tangible  Net  Worth  to be  less  than  the
                      following  amounts  during  and at the  end of each of the
                      following  fiscal months:  (a) $34 million for each of the
                      fiscal  months of April,  May,  June,  July and  August of
                      1997,  (b) $35  million  for each of the fiscal  months of
                      September,  October and November of 1997,  (c) $35 million
                      for each of the  fiscal  months  of  December  of 1997 and
                      January,  February,  March,  April,  May, June,  July, and
                      August of 1998,  and (d) $37 million for each fiscal month
                      thereafter."

           2. Section  10.17 of Article X of the  Agreement  entitled  "Negative
Covenants"  is  hereby  deleted  in its  entirety  and shall  hereafter  read as
follows:

                                 "10.17.  Minimum Ratio of Consolidated  Current
                      Assets to Consolidated Current  Liabilities.  The Borrower
                      will not  permit  the ratio of the  Parent's  Consolidated
                      Current Assets to the Parent's Consolidated Current


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                                       -2-

                      Liabilities to be less than (a) 2.60 to 1.00 as of the end
                      of the second fiscal  quarter of 1997, (b) 2.60 to 1.00 as
                      of the end of the third fiscal quarter of 1997 (c) 2.60 to
                      1.00 as of the end of the  fourth  fiscal  quarter of 1997
                      (d) 3.00 to 1.00 as of the end of the first fiscal quarter
                      of 1998  (e)  3.10  to  1.00 as of the end of the  second,
                      third and fourth  fiscal  quarters of 1998 and (f) 3.30 to
                      1.00 as of the end of each fiscal quarter thereafter."

           3. Section  10.20 of Article X of the  Agreement  entitled  "Negative
Covenants"  is  hereby  deleted  in its  entirety  and shall  hereafter  read as
follows:

                                 "10.20.  Capital  Expenditures.   The  Borrower
                      shall not make Capital  Expenditures  in an amount greater
                      than (i) $1.5 million in the aggregate for the period from
                      the  Closing  Date  through  January  3,  1998,  (ii) $2.5
                      million in the  aggregate  for the 1998 fiscal  year,  and
                      (iii) $2.5  million in the  aggregate  for the 1999 fiscal
                      year, and for each fiscal year thereafter."

Except to the extent specifically set forth herein, no other change or waiver of
any of the terms or provisions of the Agreement is intended or implied,  and all
of the terms and  conditions of the Agreement  shall  continue in full force and
effect.  This letter shall not  constitute  a waiver by us of any other  default
under the  Agreement,  whether  or not we have  knowledge  of same and shall not
constitute a waiver of any other defaults whatsoever.

If the  foregoing is in accordance  with your  understanding  of our  agreement,
kindly so indicate by signing and returning the enclosed copy of this letter.

                                         Very truly yours,

                                         THE CIT GROUP/COMMERCIAL SERVICES, INC.


                                         By   /s/John Hendrickson
                                              Name:  John Hendrickson
                                              Title:   Vice President


Read and Agreed to:

LESLIE FAY MARKETING, INC.

By   /s/Warren Wishart
     Name:  Warren Wishart
     Title:    Chief Financial Officer