THE CIT GROUP, INC.

                                December 6, 1996

Mr. Nikita Zdanow
1211 Avenue of the Americas 
New York, NY 10036

Dear Nikita

          Reference is made to your  employment  agreement,  dated  December 29,
1989 (the  "Employment  Agreement"),  with The CIT  Group  Holdings,  Inc.  (the
"Company"), as amended by letter agreements dated November 16, 1992 and December
20, 1994. The Board of Directors (the "Board") of The CIT Group  Holdings,  Inc.
(the "Company"), is pleased to extend your employment agreement with the Company
on the following terms and conditions, all other terms and conditions being null
and void:

     1. Term. This letter agreement will be effective as of January 1, 1997. The
term of this Agreement  (the "Term") will be for a period of twenty-four  months
beginning on January 1, 1997 and,  except as  otherwise  provided in paragraph 4
below,  ending on December 31, 1998.  This letter  agreement and the Term may be
extended for one or more additional  periods by written  agreement signed by you
and the Company at any time prior to the end of the Term then in effect.

     2. Duties.  During the Term,  you will serve in such  capacities and devote
substantially  all of your  business  time and  energies to the  business of the
Company and faithfully,  diligently and competently  perform such duties, as are
assigned to you by the Chief  Executive  Officer of the  Company  (the "CEO") or
pursuant to his delegation.

     3.  Compensation  and  Benefits.  In full  consideration  for all  services
rendered  by you in all  capacities  during  the  Term,  you  will  receive  the
following compensation and benefits:

          (a) Base Salary. An annual base salary of not less than the amount you
received  immediately  prior  to the  commencement  of this  current  employment
agreement  payable in  accordance  with the customary  payroll  practices of the
Company.  Your  Base  Salary  and  performance  will be  reviewed  by the CEO or
pursuant to his delegation during the Term pursuant to normal Company practices.
Your Base  Salary may be  increased  (but not  reduced)  by the CEO from time to
time,  based  upon  your  performance  and  responsibilities,  pursuant  to  the
Company's  standard  procedures for salary  adjustments. 

<PAGE>

          (b) Bonuses. You will participate in all executive bonus and incentive
compensation plans (collectively, "Incentive Plans") now or hereafter maintained
by the  Company  for  which  your  level of  employment  makes you  eligible  in
accordance with the Company's policies and the terms of such Incentive Plans.

          (c)  Expense  Reimbursement.   The  Company  will  reimburse  you,  in
accordance with applicable  policies and practices of the Company in effect from
time to time, for your ordinary and necessary business expenses.

          (d)  Other  Benefits.  You  will be  eligible  to  participate  in all
employee retirement and welfare benefit plans now or hereafter  maintained by or
on behalf of the Company,  including the Company's Executive  Retirement Program
and  receive  all  fringe  benefits  and  vacations,  for  which  your  level of
employment makes you eligible in accordance with the Company's  policies and the
terms of such  plans.  In  addition,  the  Company  will  provide you with (i) a
supplemental  pension benefit and (ii) a supplemental  savings benefit,  in each
case in an amount  equal to the value of the  benefit  you would be  entitled to
receive under the Company's  Retirement  Plan or Savings  Incentive Plan, as the
case may be, but for the  limitations on the amount of such benefits  imposed by
Internal  Revenue Code  Sections 415 and  401(a)(17).  In  connection  with your
benefits under the Company's Executive  Retirement Program, the Company will not
unreasonably withhold its consent to your retirement.

          (e)  Modifications.  The  Company may at any time or from time to time
amend, modify,  suspend or terminate any bonus,  incentive compensation or other
benefit  plans or programs  provided  hereunder  for any reason and without your
consent;  provided  that,  without your consent,  the Company may not reduce the
aggregate  value  of the  benefits  provided  to  the  Executive  hereunder,  or
administer the Company Executive  Retirement  Program in a manner  substantially
inconsistent with past practices.

     4. Termination of the Executive's Employment.

          (a) By the Company.  The Company may terminate your  employment in its
sole discretion at any time during the Term, with or without Cause, upon written
notice by the Company to you,  and your  employment  will  terminate on the date
such notice is given. For purposes of this letter  agreement,  "Cause" means (1)
Nonperformance,  defined as your  substantial  failure to perform your duties or
responsibilities,  as determined by the CEO, or (2) Malfeasance,  defined as (A)
your gross  negligence,  recklessness  or malfeasance in the performance of your
duties  hereunder,  (B) your  committing any criminal act, act or fraud or other
misconduct  resulting or intending to result  directly or  indirectly in gain or
personal  enrichment at the expense of the Company,  or (C) your engaging in any
conduct  relating  to the  business  of the  Company  that could  reasonably  be
expected to have a  materially  detrimental  effect on the business or financial
condition  of the  Company.  For  purposes  hereof,  you will be  deemed to have
committed  an act if based upon the  Company's  investigation  of the facts,  it
reasonably  concludes  that  you  committed  such  an act. 


                                       2
<PAGE>

          (b) By You. You may terminate your  employment with the Company at any
time during the Term, with or without Good Reason, upon written notice by you to
the  Company,  and your  employment  will  terminate  on the date such notice is
given. For purposes of this letter agreement, "Good Reason" means the assignment
to you of duties and  responsibilities  not  commensurate  with your status as a
senior  executive  of the  Company,  the  failure  of  the  Company  to  provide
compensation and benefits to you at the levels required herein or the failure of
the Company to adhere in any  substantial  manner to any of its other  covenants
herein.

     5. Severance Payment.

          (a) Without Cause and Good Reason Termination.  If during the Term the
Company   terminates  your  employment  without  Cause  or  you  terminate  your
employment for Good Reason,  all  compensation  payable to you under paragraph 3
hereof will cease as of the effective  date of notice of such  termination  (the
"Termination Date") and the Company will pay to you, subject to paragraph 6, the
following sums:

     1)   Your Base Salary on the Termination  Date for the greater of 24 months
          or the remainder of the Term,  payable 50% in 12 equal installments at
          the end of each of the 12 months  following the Termination  Date, and
          50% in a lump sum on the  anniversary  of the  Termination  Date.  If,
          however, prior to the anniversary of the Termination Date, you violate
          the noncompetition  provisions of paragraph 6(b)(A),  then the Company
          will  have no  obligation  to make  any of the  payments  that  remain
          payable by the Company  under this  paragraph  5(a)(1) on or after the
          date of such violation.

     2)   All previously  earned and accrued  entitlements and benefits from the
          Company,  including  any such  entitlements  and  benefits  under  the
          Company's pension,  disability and life insurance plans,  policies and
          programs.

     3)   Continued  participation  for  eighteen  months  under  the  Company's
          welfare benefit plans in which you participated  immediately  prior to
          the Termination Date.

     4)   The reasonable  costs of outplacement  services until such time as you
          accept new employment.


                                       3
<PAGE>

     5)   Any  awards  due to you  under  the  terms  of the  Company's  "Career
          Incentive  Plan"  (Long Term  Incentive)  or any plan as may have been
          hereafter  adopted  by the  Company.  Upon such  payment,  all of your
          rights under all such plans will then terminate.

     6)   All  benefits  payable  to you under the terms and  conditions  of the
          Company's Executive Benefits Program, if any.

          All of the  amounts and  benefits  to be provided  pursuant to clauses
(3),  (4),  (5) and (6) above  shall be  provided  without  duplication  for the
amounts and benefits to be provided pursuant to clause (2) above.

          (b) For Cause Termination -- Nonperformance.

     1)   If your  employment  is  terminated  by the Company for Cause based on
          Nonperformance,  as  determined  by the current CEO (Albert R. Gamper,
          Jr.), you will promptly receive the amounts and benefits  specified in
          paragraphs 5(a)(2),  (3) and (4) above. In addition,  you will receive
          an amount  equal to your Base  Salary on the  Termination  Date for 12
          months,  payable in 12 equal installments at the end of each of the 12
          months following the Termination Date.

     2)   If your  employment  is  terminated  by the Company for Cause based on
          Nonperformance,  as  determined  by the CEO (if other  than  Albert R.
          Gamper,  Jr.),  you will  promptly  receive the  amounts and  benefits
          specified in paragraph  5(a)(2),  (3) and (4) above. In addition,  yon
          will  receive an amount  equal to your Base Salary on the  Termination
          Date for 24 months, payable 50% in 12 equal installments at the end of
          each of the 12 months  following the  Termination  Date,  and 50% in a
          lump sum on the anniversary of the Termination Date.

          (c) For Cause Termination -- Malfeasance or Termination By You Without
Good Reason.  If your employment is terminated by the Company for Cause based on
Malfeasance or if you terminate  your  employment for any reason other than Good
Reason, you will receive only the amounts specified in paragraph 5(a)(2).



                                       4
<PAGE>

          (d) Death or Disability. In the event of your death or your disability
due to physical or mental illness or other  disability which renders you unable,
on other than a temporary basis, to perform the duties of your  employment,  the
Employment  Term will  terminate as of the date of your death or disability  and
you will  receive the benefits  specified  in paragraph  5(a)(2) and (6) plus an
amount equal to your Base Salary on such date for one year.  Disability  will be
determined by the CEO or pursuant to his delegation in a manner  consistent with
the Company's Long Term Disability Plan.

     6. Confidentiality and Competitive Activity.

          (a) You  acknowledge  that you have  acquired  and  will  continue  to
acquire during the Term, confidential  information regarding the business of the
Company, Dai-Ichi Kangyo Bank (DKB), Chase Manhattan Corporation (CMC) and their
respective subsidiaries and affiliates. Accordingly, you agree that, without the
written  consent  of the  Board,  you will  not,  at any time,  disclose  to any
unauthorized person or otherwise use any such confidential information. For this
purpose,  confidential  information means nonpublic  information  concerning the
financial  data,  business  strategies,  product  development  (and  proprietary
product  data),   customer  lists,   marketing  plans,  and  other   proprietary
information concerning the Company, DKB or CMC and their respective subsidiaries
and affiliates,  except for specific items which have become publicly  available
other than as a result of your breach of this letter agreement.

          (b) During the Term and, if you resign with or without  Good Reason or
your  employment is terminated by the Company with or without Cause prior to the
end of the Term,  then for one year after the  Termination  Date, in the case of
clause (A) below,  and for two years after the Termination  Date, in the case of
clause  (B)  below,  you will not,  without  the  written  consent of the Board,
directly or  indirectly,  (A)  knowingly  engage or be  interested in (as owner,
partner,   stockholder,   employee,  director,  officer,  agent,  consultant  or
otherwise),  with  or  without  compensation,  any  business  in  the  New  York
metropolitan  area which is in  competition  with any line of business  actively
being  conducted  on  the  Termination  Date  by  the  Company  or  any  of  its
subsidiaries;  provided  that if your  employment  has  been  terminated  by the
Company  without Cause or you have  terminated  your employment with the Company
for Good Reason,  you may so compete in which event you shall forfeit your right
to receive future severance  payments  pursuant to paragraph  5(a)(1) hereof and
(B) whether or not your termination of employment  occurred without Cause or for
Good  Reason,  hire any person  who was  employed  by the  Company or any of its
subsidiaries or affiliates  (other  than persons employed in a clerical or other
nonprofessional position) within the six-month period preceding the date of such
hiring or  solicit,  entice,  persuade  or  induce  any  person or entity  doing
business  with the Company,  DKB or CMC and their  respective  subsidiaries  and
affiliates,  to terminate  such  relationship  or to refrain  from  extending or
renewing the same. Nothing herein,  however, will prohibit you from acquiring or
holding not more than one percent of any class of publicly traded  securities of
any such business; provided that such securities entitle you to no more than one
percent of the total  outstanding  votes entitled to be cast by security holders
of such business in matters on which such securityholders are entitled to vote.



                                       5
<PAGE>

          (c) Remedy for Breach.  You hereby  acknowledge that the provisions of
this paragraph 6 are reasonable and necessary for the protection of the Company,
DKB, CMC and their  respective  subsidiaries  and affiliates.  In addition,  you
further acknowledge that the Company, DKB, CMC and their respective subsidiaries
and  affiliates   will  be  irrevocably   damaged  if  such  covenants  are  not
specifically  enforced.  Accordingly,  you agree that,  in addition to any other
relief to which the Company  may be  entitled,  the Company  will be entitled to
seek and obtain  injunctive  relief (without the requirement of any bond) from a
court of competent  jurisdiction  for the purposes of  restraining  you from any
actual or threatened breach of such covenants. In addition, and without limiting
the  Company's  other  remedies,  in the  event  of any  breach  by you of  such
covenants,  the Company will have no  obligation  to pay any of the amounts that
remain payable by the Company under paragraph 5(a)(1).

     7. Change of Control .

          (a)  Contract  Extension.  If during the Term,  a "Change of  Control"
occurs as defined hereafter,  the Term of your employment shall automatically be
extended until the second anniversary date of such Change of Control.

          (b) Special  Payment.  In addition to the  compensation  and  benefits
already required under the provisions of your Employment Agreement,  if a Change
of Control  should occur on or prior to December  31,  1998,  you will receive a
special  payment (the  "Special  Payment").  The amount of such Special  Payment
shall equal the sum of your prior two years' annual  bonuses under The CIT Group
Bonus Plan and will be payable  over a two-year  period as  follows:  1/3 of the
payment  shall be paid to you  within  30 days  after  the day of the  Change of
Control;  1/3 shall be paid to you on or before  the first  anniversary  date of
such  Change of  Control;  and 1/3 shall be paid to you on or before  the second
anniversary  date of such  Change  of  Control.  Notwithstanding  the  foregoing
provisions of this paragraph,  all or any part of such Special Payment shall not
be  payable  to you:  (1) to the extent  that such  Special  Payment or any part
thereof,  when aggregated with any other benefit or compensation  payment due or
owing to you, on account of a Change of Control, under the Employment  Agreement
or any other benefit  program  maintained by the Company,  would cause you to be
subject to taxation under Section 4999 of the Internal  Revenue Code of 1986, as
amended, or (2) if during the two-year period commencing on the date of a Change
of  Control,  and  ending  on the  second  anniversary  of such  date:  (i) your
employment is involuntarily  terminated by the Company for "Cause" as defined in
the Employment  Agreement;  (ii) you voluntarily  terminate  employment with the
Company  for any reason  other than "Good  Reason" as defined in the  Employment
Agreement;  or (iii) you breach any noncompetition or  confidentiality  covenant
under Section 6 of the Employment Agreement.  For purposes of this Paragraph (b)


                                       6
<PAGE>

"Special  Payment",  a termination of your  employment on account of your death,
disability  or  retirement  on or after age 55 under the terms of the  Company's
retirement plan shall constitute a termination for "Good Reason." In the absence
of a separate  beneficiary  designation,  your beneficiary  under the Group Life
Insurance Plan will receive any Special  Payment  remaining to be paid upon your
death.

          (c) Change of Control Defined.  For purposes of this letter agreement,
a "Change of  Control"  shall be deemed to have  occurred  if: (1) any Person or
Group other than DKB or CMC or their  Affiliates  becomes the Beneficial  Owner,
directly or  indirectly,  of securities  representing a majority of the combined
voting power of the Company's then outstanding  securities generally entitled to
vote for the  election of directors  (capitalized  terms not  otherwise  defined
herein  are used as  defined  under  the  Securities  Exchange  Act of 1934,  as
amended,  and the rules and  regulations  promulgated  thereunder);  or (2) as a
result of a cash tender offer,  merger or other business  combination,  sales of
assets or contested election,  or any combination of the foregoing  transactions
(a  "Transaction"),  the persons who were  directors of the Company  immediately
before the Transaction  shall cease to constitute a majority of the Board of the
Company or of any successor to the Company.  Notwithstanding  the  foregoing,  a
Change of  Control  resulting  from a Change of  Control of DKB or CMC shall not
require the extension of the Term hereunder.

     8. Miscellaneous.

          (a) Survival;  Notices.  The obligations of the Company in paragraph 5
and your  obligations in paragraph 6 will survive the termination of this letter
agreement.  Any  notice,  consent  or  other  communication  made  or  given  in
connection  with this letter  agreement will be in writing and will be deemed to
have been duly given when  delivered or five days after mailed by United  States
registered or certified mail,  return receipt  requested,  to the parties at the
address set forth on the first page of this letter agreement (attention: General
Counsel, if to the Company).

          (b) Entire  Agreement.  This letter  agreement  supersedes any and all
existing  agreements  between you and the Company or any of its  subsidiaries or
affiliates relating to the terms of your employment.

          (c} Amendments and Waivers. No provisions of this letter agreement may
be amended, modified, waived or discharged except as agreed to in writing by you
and the Company.  The failure of a party to insist upon strict  adherence to any
term of this letter  agreement on any occasion  will not be  considered a waiver
thereof or deprive  that party of the right  thereafter  to insist  upon  strict
adherence to that term or any other term of this letter agreement.



                                       7
<PAGE>

          (d) Successors.  This letter agreement shall be binding upon and inure
to the benefit of you and the Company and its successors and permitted  assigns.
Neither this letter agreement nor any of the rights of the parties hereunder may
be assigned by either party hereto except that the Company may assign its rights
and  obligations  hereunder  to a  corporation  or other  entity  that  acquires
substantially  all of its  assets.  Any  assignment  or  transfer of this letter
agreement in violation of the foregoing provisions will be void.

          (e)  Governing  Law.  This  letter  agreement  will be governed by and
construed in  accordance  with the laws of the State of New York  applicable  to
agreements made and to be performed in that State.

          (f) Legal  Counsel;  Offsets and  Reductions.  In the event you obtain
legal  counsel to enforce your rights under this letter  agreement,  the Company
will pay you  reasonable  legal fees if you  recover  any amount on such  claim.
Except as provided in  paragraph  6, if your  employment  is  terminated  by the
Company,  your  severance  shall not be subject to any offsets or reductions for
your  subsequently  earned  income  or  reduction  by reason of any claim by the
Company.

          (g) Severability. If the provision of this letter agreement is invalid
or  unenforceable,  the balance of this letter  agreement will remain in effect,
and if such provision is  inapplicable  to any person or  circumstance,  it will
nevertheless remain applicable to all other persons and circumstances.

          (h)  Withholding.  The  Company is  authorized  to  withhold  from any
benefit  provided or payment due hereunder the amount of  withholding  taxes due
any federal, state, or local authority in respect of such benefit or payment and
to take such other  action as may be  necessary in the opinion of the Company to
satisfy all obligations for the payment of such withholding taxes.

     If you are in agreement  with the terms of this letter,  please so indicate
by signing and returning the enclosed copy of this letter, whereupon this letter
shall constitute a binding agreement between you and the Company.

                                             Very truly yours,

                                             THE CIT GROUP HOLDINGS, INC.

                                             By: /s/ Albert R. Gamper, Jr.
                                                ------------------------
                                             Name: Albert R. Gamper, Jr.
                                             Title: President & CEO

Agreed: /s/ Nikita Zdanow