Exhibit 10.1

                                                            EXECUTION VERSION

                             ALVAREZ & MARSAL, INC.
                        599 LEXINGTON AVENUE - SUITE 2700
                            NEW YORK, NEW YORK 10022

                                 (212) 759-4433
                               FAX: (212) 759-5532


April 11, 2001


Board of Directors
Kasper A.S.L., Ltd.
c/o Alan B. Miller
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY  10153

Gentlemen:

The purpose of this letter is to set forth the terms of the engagement between
Alvarez & Marsal, Inc. ("A&M"), Steven J. Cohn (the "Officer" or the "Chief
Restructuring Officer") and Kasper A.S.L., Ltd. (the "Company"), including the
scope of the services to be performed and the basis of compensation for those
services. Upon your execution, this letter will constitute an agreement (this
"Agreement") between the Company, the Officer, and A&M, and will constitute an
amendment and restatement of our previous engagement letter dated October 25,
2000.

         1.       Description of Services and Duties

                  (a)      During the term of the engagement A&M shall make
                           available to the Company the services of the Officer.
                           The Officer shall be duly appointed by the Board of
                           Directors of the Company (the "Board") at the next
                           meeting of the Board as its Chief Restructuring
                           Officer. As such, the Officer shall report directly
                           to and take directions from the Board and shall, with
                           senior management, develop for the Board's
                           consideration proposals that address the Company's
                           financial and operating performance. It is
                           anticipated that the organization structure of the
                           Company will be substantially as shown on the
                           attached organization charts, and that the Officer
                           shall work with senior management on the following
                           activities:

                           (i)      overall management of the Company's
                                    operations;


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                           (ii)     the preparation of a revised operating plan
                                    and cash flow forecast and present such plan
                                    and forecast to the Board and the Company's
                                    creditors;

                           (iii)    identification of cost reduction and
                                    operations improvement opportunities through
                                    review of the Company's facilities,
                                    personnel and operating procedures, and the
                                    implementation thereof;

                           (iv)     communications with shareholders and
                                    creditors of the Company and meetings with
                                    representatives of such constituents to
                                    discuss the business operations, financial
                                    performance and general condition of the
                                    Company and the progress made to implement
                                    the operating plan and any modifications
                                    thereof;

                           (v)      other activities as are approved by the
                                    Board and agreed to by A&M from time to
                                    time.

                  (b)      The Officer will continue to be employed by A&M.
                           During the term of the engagement, the Officer will
                           devote substantially all of his business time and
                           efforts to the services and duties set forth in
                           paragraph 1(a) hereof.

                  (c)      The Company understands that the services to be
                           rendered by the Officer (and, if applicable, other
                           A&M personnel) may include the preparation of
                           projections and other forward-looking statements, and
                           numerous factors can affect the actual results of the
                           Company's operations, which may materially and
                           adversely differ from those projections and other
                           forward looking statements. In addition, the Officer
                           (and, if applicable, other A&M personnel) will be
                           relying on information provided by other members of
                           the Company's management in the preparation of those
                           projections and other forward-looking statements. In
                           the event the Company engages in a financial
                           restructuring, neither the Officer nor A&M makes any
                           representation or guarantee that an appropriate
                           restructuring proposal can be formulated for the
                           Company, that any restructuring proposal presented to
                           the Board will be more successful than all other
                           possible restructuring proposals, that restructuring
                           is the best course of action for the Company, or, if
                           formulated, that any proposed restructuring plan will
                           be accepted by the Company's creditors, shareholders
                           and other constituents. Further, neither the Officer
                           nor A&M assumes responsibility for the selection of
                           any restructuring proposal which the Officer assists
                           in formulating and presenting to the Board, and the
                           Officer shall be responsible for implementation only
                           of the restructuring proposal approved by the Board
                           and only to the extent and in the manner authorized
                           and directed by the Board.


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         2.       Compensation

                  (a)      During the term of the engagement, A&M will receive a
                           monthly fee equal to $185,000 for the Officer and one
                           additional person who will also be appointed and
                           serve as an officer of the Company, devoting
                           substantially all his business time and efforts to
                           the engagement (such person in such capacity,
                           together with the Chief Restructuring Officer, the
                           "Officers"). A&M will assign Jeff Feinberg initially
                           to serve as the additional officer. Any person
                           provided by A&M to serve as officer and subsequently
                           appointed as an officer by the Board will be deemed
                           to be a party to this Agreement without further
                           execution hereof upon his or her appointment and his
                           or her written acceptance of such appointment. If
                           additional A&M personnel are required, A&M will
                           receive an hourly fee for such personnel based on the
                           following hourly rates:

                                Managing Directors            $400 - $425
                                Directors                     $350 - $400
                                Associates                    $275 - $340
                                Analysts                      $145 - $220

                           Such rates shall be subject to adjustment annually at
                           such time as A&M adjusts its rates generally. A&M
                           will provide the Company with prompt notice of any
                           such adjustment.

                  (b)      The Officers and A&M will be reimbursed for their
                           reasonable out-of-pocket expenses incurred during the
                           term of the engagement in connection with the
                           performance of the engagement such as travel, lodging
                           and telephone charges; provided that the Company
                           shall have the right to pre-approve any single
                           expense in excess of $3,000. Upon request, A&M will
                           substantiate such expenses. In addition, A&M shall be
                           reimbursed for the reasonable fees and expenses of
                           its counsel; provided that the aggregate amount of
                           counsel fees and expenses which the Company shall be
                           obligated to reimburse A&M for shall not exceed
                           $12,000. All fees and expenses will be billed and
                           payable on a monthly basis.

                  (c)      In addition to the monthly fee set forth in paragraph
                           2(a), A&M shall be entitled to receive incentive
                           compensation as follows:

                           i.       Upon termination of this Agreement (other
                                    than in connection with a Disposition, as
                                    defined below), incentive compensation shall
                                    become due and payable on the earliest of
                                    (x) the effective date of the termination of
                                    the engagement; (y) December 30, 2001; and
                                    (z) the date on which it is determined by a
                                    court of competent jurisdiction that the
                                    Officers are no longer permitted under
                                    applicable law to perform the services set
                                    forth in paragraph 1 hereof as evidenced by
                                    such court's disqualification of the
                                    Officers or by the authorization to retain


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                                    or employ other professionals or other
                                    persons to perform services comparable to
                                    those provided by the Officers. The amount
                                    payable shall be a minimum of $200,000,
                                    increasing to either $450,000 or $500,000 if
                                    the year-to-date "2001 Operating EBITDA"
                                    reaches at least 85% or 100%, respectively,
                                    of the "Fiscal Year 2001 Plan" for the same
                                    period, as both such terms are defined in
                                    clause (iii) below, all as set forth in
                                    Exhibit A attached hereto. Amounts payable
                                    under this clause (i) shall be net of
                                    amounts paid, if any, under clause (ii)
                                    below. If termination occurs after a
                                    Disposition (as defined in clause (ii)
                                    below), then all the financial data used in
                                    the calculations on Exhibit A for the period
                                    following the Disposition shall be adjusted
                                    (including the definition of 2001 Operating
                                    EBITDA) by including operating results only
                                    for those assets remaining after the
                                    Disposition.

                           ii.      Upon a Disposition (as defined below),
                                    incentive compensation shall become due and
                                    payable immediately upon the sale, transfer,
                                    lease or other disposition of all or
                                    substantially all the Company's assets (a
                                    "Disposition"). The amount payable shall be
                                    a minimum of $350,000, increasing to either
                                    $450,000 or $500,000 if the year-to-date
                                    "2001 Operating EBITDA" reaches at least 85%
                                    or 100%, respectively, of the "Fiscal Year
                                    2001 Plan" for the same period, as both such
                                    terms are defined in clause (iii) below, all
                                    as set forth in Exhibit A attached hereto.
                                    Amounts payable under this clause (ii) shall
                                    be net of amounts paid, if any, under clause
                                    (i) above.

                           iii.     Defined Terms:

                                    "Fiscal Year 2001 Plan" shall mean the
                                    forecast reviewed by the Board at its March
                                    21, 2001 meeting as a revision to the 2001
                                    plan originally adopted by the Board in
                                    September 2000.

                                    "2001 Operating EBITDA" shall mean earnings
                                    before interest, taxes, depreciation and
                                    amortization net of other income (expense);
                                    extraordinary items; gains or losses on the
                                    sale of assets, expenses of litigation
                                    (including administrative proceedings) and
                                    related professional fees, fines, damages
                                    and settlement payments; and restructuring
                                    charges (whether or not such expenses would
                                    be treated as restructuring charges pursuant
                                    to generally accepted accounting principles,
                                    including, without limitation, professional
                                    fees and expenses, employee severance and
                                    incentive payments, other than bonus
                                    compensation provided for in the Company's
                                    operating plan) and costs of operations
                                    discontinued or identified to be
                                    discontinued for fiscal year 2001. 2001
                                    Operating EBITDA shall be determined based
                                    on the Company's internal financial
                                    reporting.


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                  (c)      Upon the last day on which any amount becomes payable
                           under the Agreement, A&M shall credit the retainer it
                           holds in the amount of $150,000, and will return the
                           remaining balance, if any, to the Company promptly
                           thereafter.


         3.       Term

                  (a)      The engagement will commence as of the date hereof
                           and may be terminated by either the Company or A&M
                           without cause by giving 30 days' written notice to
                           the other party. In the event of such termination by
                           either the Company or A&M, any fees and expenses due
                           to A&M shall be remitted promptly. A&M shall remain
                           entitled to the incentive compensation provided for
                           in paragraph 2(c) hereof, except as provided in
                           paragraphs 3(b) and 3(c) hereof.

                  (b)      The Company may at any time immediately terminate
                           A&M's services hereunder "For Cause" by giving
                           written notice to A&M. "For Cause" shall mean (i)
                           either of the Officers is convicted of, admits guilt
                           in a written document filed with a court of competent
                           jurisdiction to, or enters a plea of nolo contendere
                           to, an allegation of fraud, embezzlement,
                           misappropriation or any felony; (ii) either of the
                           Officers willfully disobeys a lawful direction of the
                           Board; or (iii) a material breach of any of A&M's or
                           either of the Officers' material obligations under
                           this Agreement which is not cured within 15 days of
                           the Company's written notice thereof to A&M
                           describing in reasonable detail the nature of the
                           alleged breach. A&M shall not be entitled to earn any
                           incentive compensation following the termination of
                           the engagement by the Company For Cause.

                  (c)      A&M may at any time immediately terminate its
                           services hereunder for "Good Reason". "Good Reason"
                           shall mean any material breach of any of the
                           Company's material obligations under this Agreement
                           which is not cured within 15 days of A&M's written
                           notice thereof to the Company describing in
                           reasonable detail the nature of the alleged breach.
                           In the event A&M terminates the engagement without
                           Good Reason, then A&M shall not be entitled to earn
                           any incentive compensation following such
                           termination.


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         4.       Relationship of the Parties

                  The parties intend that an independent contractor relationship
                  will be created between A&M and the Company by this Agreement.
                  The Officers shall remain employees of A&M, which shall retain
                  the rights (subject to the terms hereof) to direct and control
                  their performance. The compensation set forth in paragraph 2
                  shall be exclusive, and neither the Officers nor any other A&M
                  personnel shall be entitled to participate in any other
                  compensation or benefit plan or perquisite of the Company.

                  The Company acknowledges that A&M's engagement shall not
                  constitute an audit, review or compilation, or any other type
                  of financial statement reporting engagement that is subject to
                  the rules of the American Institute of Certified Public
                  Accountants, the Securities and Exchange Commission or any
                  other state or national professional or regulatory body.


         5.       No Third-Party Beneficiary

                  The Company acknowledges that all advice (written or oral)
                  given by A&M and the Officers to the Company in connection
                  with the engagement is intended solely for the benefit and use
                  of the Company (limited to its Board and management and other
                  professionals as the Board or management may direct from time
                  to time) in considering the matters to which the engagement
                  relates. The Company agrees that no such advice shall be used
                  for any other purpose or reproduced, disseminated, quoted or
                  referred to at any time in any manner or for any purpose other
                  than accomplishing the tasks referred to herein or in
                  discussions with the Company's shareholders or creditors in
                  connection with such tasks, without A&M's prior approval
                  (which shall not be unreasonably withheld or delayed), except
                  as required by law.


         6.       Conflicts

                  A&M is not currently aware of any relationship that would
                  create a conflict of interest with the Company or those
                  parties-in-interest of which it is aware. Because A&M is a
                  consulting firm that serves clients on a national basis in
                  numerous cases, both in and out of court, it is possible that
                  A&M may have rendered services to or have business
                  associations with other entitles or people which had or have
                  or may have relationships with the Company, including
                  creditors of the Company. In the event you accept the terms of
                  the engagement, A&M will not represent the interests of such
                  entitles or people in connection with this matter.


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         7.       Confidentiality / Non-Solicitation

                  A&M and the Officers shall keep as confidential all non-public
                  information received from the Company in conjunction with the
                  engagement, except: (i) as requested by the Company or its
                  legal counsel; (ii) as required by legal proceedings or (iii)
                  as reasonably required in communication with the Company's
                  shareholders, affiliates and creditors, or their advisors, in
                  the performance of this engagement. The Company agrees not to
                  solicit, recruit or hire any employees of A&M for a period of
                  two years subsequent to the termination of this agreement.


         8.       Indemnification

                  The attached indemnification agreement is incorporated herein
                  by reference and shall be executed upon the acceptance of this
                  Agreement. In addition to the indemnity provided in the
                  indemnity agreement incorporated herein, each of the Officers
                  shall be indemnified by the Company for all acts performed as
                  an officer to the maximum extent permitted by law. The Company
                  shall afford to each of the Officers directors' and officers'
                  liability insurance of the same type, terms, deductible,
                  amounts and tenor as the best such coverage it provides to any
                  of its officers or directors from the same or a comparable
                  insurance provider. Termination of the engagement shall not
                  affect any of these indemnification and insurance provisions,
                  which shall remain in full force and effect.


         9.       Miscellaneous

                  This Agreement (together with the attached indemnity
                  provisions); (a) shall be governed and construed in accordance
                  with the laws of the State of New York, regardless of the laws
                  that might otherwise govern under applicable principles of
                  conflict of laws thereof; (b) incorporates the entire
                  understanding of the parties with respect to the subject
                  matter hereof; and (c) may not be amended or modified except
                  in writing executed by all parties hereto. Neither A&M nor the
                  Chief Restructuring Officer may delegate their obligations
                  hereunder, and any such attempted delegation shall be null and
                  void and without effect. The Company, the Officers and A&M
                  agree to waive trial by jury in any action, proceeding or
                  counterclaim brought by or on behalf of the parties hereto
                  with respect to any matter relating to or arising out of the
                  engagement or the performance or non-performance of the
                  Officers or A&M hereunder. If any provision of this Agreement
                  is held to be invalid or unenforceable, all provisions of this
                  Agreement which can be given effect without such invalid or
                  unenforceable provision shall remain in full force and effect.
                  This Agreement may be executed in one or more counterparts,
                  each of which shall be deemed to be an original, but all of
                  which together shall constitute one and the same instrument.


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         Please sign the enclosed copy of this and the attached Indemnification
Agreement to acknowledge your agreement with their terms.



                                   Very truly yours,

                                   Alvarez & Marsal, Inc.

                                   By: /s/ Steven J. Cohn
                                       ------------------------------------
                                       Steven J. Cohn
                                       Managing Director



ACCEPTED AND AGREED to as of the date first written above:

Kasper A.S.L., Ltd.

By: /s/ Arthur Levine
    ------------------------------
    Arthur Levine
    Chief Executive Officer


    /s/ Steven J. Cohn
    ------------------------------
    Steven J. Cohn


    /s/ Jeff Feinberg
    ------------------------------
    Jeff Feinberg










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<PAGE>
                            INDEMNIFICATION AGREEMENT

This indemnity is made part of an agreement, dated April 11, 2001 (which
together with any renewals, modifications or extensions thereof, is herein
referred to as the "Agreement") by and between Alvarez & Marsal, Inc. ("A&M"),
Steven J. Cohn (the "Officer") and Kasper A.S.L., Ltd. (the "Company"), for
services to be rendered to the Company by A&M.


A. The Company agrees to indemnify and hold harmless each of A&M, its
shareholders, employees, agents, representatives and subcontractors (each, an
"Indemnified Party" and collectively, the "Indemnified Parties") against any and
all losses, claims, damages, liabilities, penalties, obligations and expenses,
including the costs for counsel or others (including employees of A&M, based on
their then current hourly billing rates) in investigating, preparing or
defending any action or claim, whether or not in connection with litigation in
which any Indemnified Party is a party, or enforcing the Agreement (including
these indemnity provisions), as and when incurred, caused by, relating to, based
upon or arising out of (directly or indirectly) the Indemnified Parties'
acceptance of or the performance or nonperformance of their obligations under
the Agreement; provided, however, such indemnity shall not apply to any such
loss, claim, damage, liability or expense to the extent it is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal) to
have resulted from such Indemnified Party's gross negligence or willful
misconduct. The Company also agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company for or in connection with the engagement of A&M, except to the extent
for any such liability for losses, claims, damages, liabilities or expenses that
are found in a final judgment by a court of competent jurisdiction (not subject
to further appeal) to have resulted from such Indemnified Party's gross
negligence or willful misconduct. The Company further agrees that it will not,
without the prior consent of an Indemnified Party, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding in respect of which such Indemnified Party seeks
indemnification hereunder (whether or not such Indemnified Party is an actual
party to such claim, action, suit or proceedings) unless such settlement,
compromise or consent includes an unconditional release of such Indemnified
Party from all liabilities arising out of such claim, action, suit or
proceeding, which consent shall not be unreasonably withheld.


B. These indemnification provisions shall be in addition to any liability which
the Company may otherwise have to the Indemnified Parties.


C. If any action, proceeding or investigation is commenced to which any
Indemnified Party proposes to demand indemnification hereunder, such Indemnified
Party will notify the Company in writing with reasonable promptness and shall
describe in reasonable detail the nature of such action, proceeding or
investigation; provided, however, that any failure by such Indemnified Party to
notify the Company will not relieve the Company from its obligations hereunder,
except to the extent that such failure shall have actually prejudiced the
defense of such action. The Company shall promptly pay expenses reasonably
incurred by any Indemnified Party in defending, participating in, or settling


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any action, proceeding or investigation in which such Indemnified Party is a
party or is threatened to be made a party or otherwise is participating in by
reason of the engagement under the Agreement, upon submission of invoices
therefor, whether in advance of the final disposition of such action,
proceeding, or investigation or otherwise. Each Indemnified Party hereby
undertakes, and the Company hereby accepts its undertaking, to repay any and all
such amounts so advanced if it shall ultimately be determined that such
Indemnified Party is not entitled to be indemnified therefor. If any such
action, proceeding or investigation in which an Indemnified Party is a party is
also against the Company, the Company may, in lieu of advancing the expenses of
separate counsel for such Indemnified Party, provide such Indemnified Party with
legal representation by the same counsel who represents the Company, provided
such counsel is reasonably satisfactory to such Indemnified Party, at no cost to
such Indemnified Party; provided, however, that if such counsel or counsel to
the Indemnified Party shall determine that due to the existence of actual or
potential conflicts of interest between such Indemnified Party and the Company
such counsel is unable to represent both the Indemnified Party and the Company,
then the Indemnified Party shall be entitled to use separate counsel of its own
choice, and the Company shall promptly pay the reasonable expenses of such
separate counsel upon submission of invoices therefor. Nothing herein shall
prevent an Indemnified Party from using separate counsel of its own choice at
its own expense. The Company will be liable for any settlement of any claim
against an Indemnified Party made with the Company's written consent, which
consent shall not be unreasonably withheld.


D. In order to provide for just and equitable contribution if a claim for
indemnification pursuant to these indemnification provisions is made but it is
found in a final judgment by a court of competent jurisdiction (not subject to
further appeal) that such indemnification may not be enforced in such case, even
though the express provisions hereof provide for indemnification, then the
relative fault of the Company, on the one hand, and the Indemnified Parties, on
the other hand, in connection with the statements, acts or omissions which
resulted in the losses, claims, damages, liabilities and costs giving rise to
the indemnification claim and other relevant equitable considerations shall be
considered; and further provided that in no event will the Indemnified Parties'
aggregate contribution for all losses, claims, damages, liabilities and expenses
with respect to which contribution is available hereunder exceed the amount of
fees actually received by the Indemnified Parties pursuant to the Agreement. No
person found liable for a fraudulent misrepresentation shall be entitled to
contribution hereunder from any person who is not also found liable for such
fraudulent misrepresentation.


E. In the event the Company and A&M seek judicial approval for the assumption of
the Agreement or authorization to enter into a new engagement agreement pursuant
to either of which A&M would continue to be engaged by the Company, the Company
shall promptly pay expenses reasonably incurred by the Indemnified Parties,
including attorneys' fees and expenses, in connection with any motion, action or
claim made either in support of or in opposition to any such retention or
authorization, whether in advance of or following any judicial disposition of
such motion, action or claim, promptly upon submission of invoices therefor and
regardless of whether such retention or authorization is approved by any court.
The Company will also promptly pay the Indemnified Parties for any expenses
reasonable incurred by them, including attorneys' fees and expenses, in seeking


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payment of all amounts owed it under the Agreement (or any new engagement
agreement) whether through submission of a fee application or in any other
manner, without offset, recoupment or counterclaim, whether as a secured claim,
an administrative expense claim, an unsecured claim. a prepetition claim or a
postpetition claim.


F. Neither termination of the Agreement nor termination of A&M's engagement
shall affect these indemnification provisions, which shall hereafter remain
operative and in full force and effect.


G. The rights provided herein shall not be deemed exclusive of any other rights
to which the Indemnified Parties may be entitled under the certificate of
incorporation or bylaws of the Company, any other agreements, any vote of
stockholders or disinterested directors of the Company, any applicable law or
otherwise.


KASPER A.S.L., LTD.                                ALVAREZ & MARSAL, INC.

By: /s/ Arthur Levine                              By: /s/ Steven Cohn
    ---------------------------                        -------------------------
    Arthur Levine                                      Steven Cohn
    Chief Executive Officer                            Managing Director












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