Exhibit 3.1
                                                                     -----------



                       SECOND AMENDED AND RESTATED BY-LAWS

                                       OF

                               KASPER A.S.L., LTD.
                          (f/k/a Sassco Fashions, Ltd.)

              Incorporated under the Laws of the State of Delaware


                           dated as of April 16, 2001


                                    ARTICLE I

                               OFFICES AND RECORDS

         Section 1.1. Delaware Office. The principal office of Kasper A.S.L.,
Ltd. (the "Corporation") in the State of Delaware shall be located in the City
of Wilmington, County of New Castle, and the name and address of its registered
agent is The Corporation Trust Company, 1209 Orange Street, Wilmington,
Delaware.

         Section 1.2. Other Offices. The Corporation may have such other
offices, either within or without the State of Delaware, as the Board of
Directors may from time to time designate or as the business of the Corporation
may from time to time require.

         Section 1.3. Books and Records. The books and records of the
Corporation may be kept inside or outside the State of Delaware at such place or
places as may from time to time be designated by the Board of Directors.

                                   ARTICLE II

                                  STOCKHOLDERS

         Section 2.1. Annual Meeting. The annual meeting of stockholders of the
Corporation shall be held at such place, either within or without the State of
Delaware, and at such time and date as the Board of Directors, by resolution,
shall determine for the purpose of electing directors and for the transaction of
such other business as may be properly brought before the meeting.

         Section 2.2. Special Meeting. Subject to the rights of the holders of
any series of stock having a preference over the Common Stock of the Corporation
as to dividends or upon liquidation (the "Preferred Stock") to elect additional
directors under specific circumstances, special meetings of the stockholders may
be called only by the Chairman of the Board or by the Board of Directors
pursuant to a resolution adopted by a majority of the total number of directors
which the Corporation would have if there were no vacancies (the "Whole Board").

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         Section 2.3. Place of Meeting. The Board of Directors may designate the
place of meeting for any meeting of the stockholders. If no designation is made
by the Board of Directors, the place of meeting shall be the principal office of
the Corporation.

         Section 2.4. Notice of Meeting. Written or printed notice, stating the
place, day and hour of the meeting and the purpose or purposes for which the
meeting is called, shall be prepared and delivered by the Corporation not less
than ten days nor more than sixty days before the date of the meeting, either
personally or by mail, to each stockholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail with postage thereon prepaid, addressed to the
stockholder at such stockholder's address as it appears on the stock transfer
books of the Corporation. Such further notice shall be given as may be required
by law. Only such business shall be conducted at a special meeting of
stockholders as shall have been brought before the meeting pursuant to the
Corporation's notice of meeting. Meetings may be held without notice if all
stockholders entitled to vote are present, or if notice is waived by those not
present in accordance with Section 6.4 of these Bylaws. Any previously scheduled
meeting of the stockholders may be postponed, and (unless the Certificate of
Incorporation otherwise provides) any special meeting of the stockholders may be
canceled, by resolution of the Board of Directors upon public notice given prior
to the time previously scheduled for such meeting of stockholders.

         Section 2.5. Quorum and Adjournment. Except as otherwise provided by
law or by the Certificate of Incorporation, the holders of a majority of the
voting power of the outstanding shares of the Corporation entitled to vote
generally in the election of directors (the "Voting Stock"), represented in
person or by proxy, shall constitute a quorum at a meeting of stockholders,
except that when specified business is to be voted on by a class or series
voting as a class, the holders of a majority of the voting power of the shares
of such class or series shall constitute a quorum for the transaction of such
business. The chairman of the meeting or a majority of the shares of Voting
Stock so represented may adjourn the meeting from time to time, whether or not
there is such a quorum (or, in the case of specified business to be voted on by
a class or series, the chairman or a majority of the shares of such class or
series so represented may adjourn the meeting with respect to such specified
business). No notice of the time and place of adjourned meetings need be given
except as required by law. The stockholders present at a duly organized meeting
may continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.

         Section 2.6. Proxies. At all meetings of stockholders, a stockholder
may vote by proxy executed in writing by the stockholder or as may be permitted
by law, or by such stockholder's duly authorized attorney-in-fact. Such proxy
must be filed with the Secretary of the Corporation or such stockholder's
representative at or before the time of the meeting.



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         Section 2.7. Notice of Stockholder Business and Nominations.

         (A) Annual Meetings of Stockholders. (1) Nominations of persons for
election to the Board of Directors of the Corporation and the proposal of
business to be considered by the stockholders may be made at an annual meeting
of stockholders (a) pursuant to the Corporation's notice of meeting delivered
pursuant to Section 2.4 of these Bylaws, (b) by or at the direction of the
Chairman of the Board or the Board of Directors or (c) by any stockholder of the
Corporation who is entitled to vote at the meeting, who complied with the notice
procedures set forth in clauses (2) and (3) of this paragraph (A) of this By-law
and who was a stockholder of record at the time such notice is delivered to the
Secretary of the Corporation.

                  (2) For nominations or other business to be properly brought
         before an annual meeting by a stockholder pursuant to clause (c) of
         paragraph (A)(l) of this By-law, the stockholder must have given timely
         notice thereof in writing to the Secretary of the Corporation and such
         other business must otherwise be a proper matter for stockholder
         action. To be timely, a stockholder's notice shall be delivered to the
         Secretary at the principal office of the Corporation not less than
         seventy days nor more than ninety days prior to the first anniversary
         of the preceding year's annual meeting; provided, however, that in the
         event that the date of an annual meeting is advanced by more than
         thirty days, or delayed by more than seventy days, from the first
         anniversary date of the previous year's annual meeting, notice by the
         stockholder to be timely must be so delivered not earlier than the
         ninetieth day prior to such annual meeting and not later than the close
         of business on the later of the seventieth day prior to such annual
         meeting or the tenth day following the day on which public announcement
         of the date of such meeting is first made by the Corporation. In no
         event shall the public announcement of an adjournment of an annual
         meeting commence a new time period for the giving of a stockholder's
         notice as described above. Such stockholder's notice shall set forth
         (a) as to each person whom the stockholder proposes to nominate for
         election or reelection as a director all information relating to such
         person that is required to be disclosed in solicitations of proxies for
         election of director in an election contest, or is otherwise required,
         in each case pursuant to Regulation 14A under the Securities Exchange
         Act of 1934, as amended (the "Exchange Act"), and the regulations
         promulgated thereunder, including such person's written consent to
         being named in the proxy statement as a nominee and to serving as a
         director if elected; (b) as to any other business that the stockholder
         proposes to bring before the meeting, a brief description of the
         business desired to be brought before the meeting, the reasons for
         conducting such business at the meeting and any material interest in
         such business of such stockholder and the beneficial owner, if any, on
         whose behalf the proposal is made; and (c) as to the stockholder giving
         the notice and the beneficial owner, if any, on whose behalf the
         nomination or proposal is made (i) the name and address of such
         stockholder, as they appear on the Corporation's books, and of such
         beneficial owner and (ii) the class and number of shares of the


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         Corporation which are owned beneficially and of record by such
         stockholder and such beneficial owner.

                  (3) Notwithstanding anything in the second sentence of
         paragraph (A)(2) of this By-law to the contrary, in the event that the
         number of directors to be elected to the Board of Directors of the
         Corporation is increased and there is no public announcement by the
         Corporation naming all of the nominees for director or specifying the
         size of the increased Board of Directors made by the Corporation at
         least eighty days prior to the first anniversary of the preceding
         year's annual meeting, a stockholder's notice required by this By-law
         shall also be considered timely, but only with respect to nominees for
         any new positions created by such increase, if it shall be delivered to
         the Secretary at the principal office of the Corporation not later than
         the close of business on the tenth day following the day on which such
         public announcement is first made by the Corporation.

         (B) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting pursuant to Section
2.4 of these By-laws. Nominations of persons for election to the Board of
Directors may be made at a special meeting of stockholders at which directors
are to be elected pursuant to the Corporation's notice of meeting (a) by or at
the direction of the Board of Directors or (b) by any stockholder of the
Corporation who is entitled to vote at the meeting, who complies with the notice
procedures set forth in this By-law and who is a stockholder of record at the
time such notice is delivered to the Secretary of the Corporation. Nominations
by stockholders of persons for election to the Board of Directors may be made at
such a special meeting of stockholders if the stockholder's notice as required
by paragraph (A)(2) of this By-law shall be delivered to the Secretary at the
principal office of the Corporation not earlier than the ninetieth day prior to
such special meeting and not later than the close of business on the later of
the seventieth day prior to such special meeting or the tenth day following the
day on which public announcement is first made of the date of the special
meeting and of the nominees proposed by the Board of Directors to be elected at
such meeting. In no event shall the public announcement of an adjournment of a
special meeting commence a new time period for the giving of a stockholder's
notice as described above.

         (C) General. (1) Only persons who are nominated in accordance with the
procedures set forth in this By-law shall be eligible to serve as directors and
only such business shall be conducted at a meeting of stockholders as shall have
been brought before the meeting in accordance with the procedures set forth in
this By-law. Except as otherwise provided by law, the Certificate of
Incorporation or these By-laws, the chairman of the meeting shall have the power
and duty to determine whether a nomination or any business proposed to be
brought before the meeting was made or proposed in accordance with the
procedures set forth in this By-law and, if any proposed nomination or business
is not in compliance with this By-law, to declare that such defective proposal
or nomination shall be disregarded.



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                  (2) For purposes of this By-law, "public announcement" shall
         mean disclosure in a press release reported by the Dow Jones News
         Service, Associated Press or comparable national news service or in a
         document publicly filed by the Corporation with the Securities and
         Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange
         Act.

                  (3) Notwithstanding the foregoing provisions of this By-law, a
         stockholder shall also comply with all applicable requirements of the
         Exchange Act and the rules and regulations thereunder with respect to
         the matters set forth in this By-law. Nothing in this By-law shall be
         deemed to affect any rights of stockholders to request inclusion of
         proposals in the Corporation's proxy statement pursuant to Rule 14a-8
         under the Exchange Act.

         Section 2.8. Procedure for Election of Directors. Election of directors
at all meetings of the stockholders at which directors are to be elected shall
be by written ballot, and, except as otherwise set forth in the Certificate of
Incorporation with respect to the rights of the holders of any series of
Preferred Stock to elect additional directors under specific circumstances, a
plurality of the votes cast thereat shall elect. Except as otherwise provided by
law, the Certificate of Incorporation or these By-laws, all matters other than
the election of directors submitted to the stockholders at any meeting shall be
decided by the affirmative vote of a majority of the shares present in person or
represented by proxy at the meeting and entitled to vote thereon.

         Section 2.9. Inspectors of Elections; Opening and Closing the Polls.
(A) The Board of Directors by resolution shall appoint one or more inspectors,
which inspector or inspectors may include individuals who serve the Corporation
in other capacities, including, without limitation, as officers, employees,
agents or representatives of the Corporation, to act at a meeting of
stockholders and make a written report thereof. One or more persons may be
designated as alternate inspectors to replace any inspector who fails to act. If
no inspector or alternate has been appointed to act, or if all inspectors or
alternates who have been appointed are unable to act at a meeting of
stockholders, the chairman of the meeting shall appoint one or more inspectors
to act at the meeting. Each inspector, before discharging his or her duties,
shall take and sign an oath faithfully to execute the duties of inspector with
strict impartiality and according to the best of his or her ability. The
inspectors shall have the duties prescribed by the General Corporation Law of
the State of Delaware.

         (B) The secretary of the meeting shall fix and announce at the meeting
the date and time of the opening and the closing of the polls for each matter
upon which the stockholders will vote at a meeting.

         Section 2.10. No Stockholder Action by Written Consent. Subject to the
rights of the holders of any series of Preferred Stock to elect additional
directors under specific circumstances, any action required or permitted to be
taken by the stockholders of the Corporation must be effected at an annual or
special meeting of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders, provided, however, that actions


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with respect to the approval of the Kasper A.S.L., Ltd. 1997 Management Stock
Option Plan, and stock options granted with respect to such plan, may be
effected by consent in writing in lieu of a meeting of stockholders of the
Corporation.

                                   ARTICLE III

                               BOARD OF DIRECTORS

         Section 3.1. General Powers. The business and affairs of the
Corporation shall be managed by or under the direction of its Board of
Directors. In addition to the powers and authorities by these By-laws expressly
conferred upon them, the Board of Directors may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by law or by the
Certificate of Incorporation or by these By-laws required to be exercised or
done by the stockholders.

         Section 3.2. Number, Tenure and Qualifications. Subject to the rights
of the holders of any series of Preferred Stock to elect directors under
specific circumstances, the number of directors shall be fixed from time to time
exclusively pursuant to a resolution adopted by a majority of the Whole Board
but shall consist of not less than seven directors. Each director shall hold
office until the next annual meeting of stockholders and until his or her
successor shall have been duly elected and qualified. At each annual meeting of
stockholders, if authorized by a resolution of the Board of Directors, directors
may be elected to fill any vacancy on the Board of Directors, regardless of how
such vacancy shall have been created.

         Section 3.3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this By-law immediately after,
and at the same place as, each annual meeting of stockholders. The Board of
Directors may, by resolution, provide the time and place for the holding of
additional regular meetings without other notice than such resolution.

         Section 3.4. Special Meetings. Special meetings of the Board of
Directors shall be called at the request of the Chairman of the Board, the Chief
Executive Officer or a majority of the Board of Directors. The person or persons
authorized to call special meetings of the Board of Directors may fix the place
and time of the meetings.

         Section 3.5. Notice. Notice of any special meeting shall be given to
each director at such director's business or residence in writing or by telegram
or by telephone communication. If mailed, such notice shall be deemed adequately
delivered when deposited in the United States mails so addressed, with postage
thereon prepaid, at least five days before such meeting. If by telegram, such
notice shall be deemed adequately delivered when the telegram is delivered to
the telegraph company at least twenty-four hours before such meeting. If by
facsimile transmission, such notice shall be transmitted at least twenty-four
hours before such meeting. If by telephone, the notice shall be given at least
twelve hours prior to the time set for the meeting. Neither the business to be


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transacted at, nor the purpose of, any regular or special meeting of the Board
of Directors need be specified in the notice of such meeting, except for
amendments to these Bylaws as provided under Section 8.1 of Article VIII hereof.
A meeting may be held at any time without notice if all the directors are
present or if those not present waive notice of the meeting in accordance with
Section 6.4 hereof, either before or after such meeting.

         Section 3.6. Conference Telephone Meetings. Members of the Board of
Directors, or any committee thereof, may participate in a meeting of the Board
of Directors or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.

         Section 3.7. Quorum. A whole number of directors equal to at least a
majority of the Whole Board shall constitute a quorum for the transaction of
business, but if at any meeting of the Board of Directors there shall be less
than a quorum present, a majority of the directors present may adjourn the
meeting from time to time without further notice. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors. The directors present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough directors to leave less than a quorum.

         Section 3.8. Vacancies. Subject to the rights of the holders of any
series of Preferred Stock to elect additional directors under specific
circumstances, and unless the Board of Directors otherwise determines, vacancies
resulting from death, resignation, retirement, disqualification, removal from
office or other cause, and newly created directorships resulting from any
increase in the authorized number of directors, may be filled only by the
affirmative vote of a majority of the remaining directors, though less than a
quorum of the Board of Directors, and directors so chosen shall hold office
until the next annual meeting of stockholders and until such director's
successor shall have been duly elected and qualified. No decrease in the number
of authorized directors constituting the Whole Board shall shorten the term of
any incumbent director.

         Section 3.9. Executive and Other Committees. The Board of Directors
may, by resolution adopted by a majority of the Whole Board, designate an
Executive Committee to exercise, subject to applicable provisions of law, all
the powers of the Board in the management of the business and affairs of the
Corporation when the Board of Directors is not in session, including without
limitation the power to declare dividends, to authorize the issuance of the
Corporation's capital stock and to adopt a certificate of ownership and merger
pursuant to Section 253 of the General Corporation Law of the State of Delaware,
and may, by resolution similarly adopted, designate one or more other
committees. The Executive Committee and each such other committee shall consist
of two or more directors of the Corporation. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. Any
such committee may to the extent permitted by law exercise such powers and shall
have such responsibilities as shall be specified in the designating resolution.


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In the absence or disqualification of any member of such committee or
committees, the member or members thereof present at any meeting and not
disqualified from voting, whether or not constituting a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member. Each committee shall keep
written minutes of its proceedings and shall report such proceedings to the
Board of Directors when required.

         A majority of any committee may determine its action and fix the time
and place of its meetings, unless the Board of Directors shall otherwise
provide. Notice of such meetings shall be given to each member of the committee
in the manner provided for in Section 3.5 of these By-laws. The Board of
Directors shall have power at any time to fill vacancies in, to change the
membership of, or to dissolve any such committee. Nothing herein shall be deemed
to prevent the Board of Directors from appointing one or more committees
consisting in whole or in part of persons who are not directors of the
Corporation; provided, however, that no such committee shall have or may
exercise any authority of the Board of Directors.

         Section 3.10. Removal. Subject to the rights of the holders of any
series of Preferred Stock to elect additional directors under specific
circumstances, any director, or the entire Board of Directors, may be removed
from office at any time, but only for cause and only by the affirmative vote of
the holders of at least 66-2/3 percent of the voting power of the then
outstanding Voting Stock, voting together as a single class.

         Section 3.11. Observer. During the term of employment (the "Employment
Term") of Arthur S. Levine ("Levine") as Chairman and Chief Executive Officer of
the Corporation, Levine shall have the right to designate one observer to the
Board of Directors. Any such observer so designated by Levine shall be entitled
to receive notice of, and to attend meetings of, the Board of Directors, but
shall not have the right to vote at such meetings.

                                   ARTICLE IV

                                    OFFICERS

         Section 4.1. Elected Officers. The elected officers of the Corporation
shall be a Chairman of the Board, a Chief Executive Officer, a President, one or
more Vice Presidents, a Secretary, a Treasurer and such other officers
(including, without limitation, a Chief Operating Officer and a Chief Financial
Officer) as the Board of Directors from time to time may deem proper. The
Chairman of the Board shall be chosen from the directors. All officers chosen by
the Board of Directors shall each have such powers and duties as generally
pertain to their respective offices, subject to the specific provisions of this
Article IV. Such officers shall also have powers and duties as from time to time
may be conferred by the Board of Directors or by any committee thereof.



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         Section 4.2. Election and Term of Office. The elected officers of the
Corporation shall be elected annually by the Board of Directors at the regular
meeting of the Board of Directors held after each annual meeting of the
stockholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as convenient. Subject to Section
4.9 of these By-laws, each officer shall hold office until such officer's
successor shall have been duly elected and shall have qualified or until such
officer's death or until such officer shall resign.

         Section 4.3. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the stockholders and of the Board of Directors. The
Chairman of the Board shall make reports to the Board of Directors and the
stockholders, and shall perform all such other duties as are properly required
of him by the Board of Directors.

         Section 4.4. Chief Executive Officer. The Chief Executive Officer shall
be responsible for the general management of the affairs of the Corporation and
shall perform all duties incidental to the Chief Executive Officer's office
which may be required by law and all such other duties as are properly required
of him by the Board of Directors. The Chief Executive Officer shall see that all
orders and resolutions of the Board of Directors and of any committee thereof
are carried into effect.

         Section 4.5. President. The President shall act in a general executive
capacity and shall assist the Chairman of the Board in the administration and
operation of the Corporation's business and general supervision of its policies
and affairs. The President shall, in the absence of or because of the inability
to act of the Chairman of the Board, perform all duties of the Chairman of the
Board and preside at all meetings of stockholders and of the Board of Directors.
The President may sign, alone or with the Secretary, or an Assistant Secretary,
or any other proper officer of the Corporation authorized by the Board of
Directors, certificates, contracts, and other instruments of the Corporation as
authorized by the Board of Directors.

         Section 4.6. Vice Presidents. Each Vice President shall have such
powers and perform such duties as from time to time may be assigned to him or
her by the Board of Directors or be delegated to him or her by the President.
The Board of Directors may assign to any Vice President general supervision and
charge over any territorial or functional division of the business and affairs
of the Corporation.

         Section 4.7. Secretary. The Secretary shall give, or cause to be given,
notice of all meetings of stockholders and directors and all other notices
required by law or by these By-laws, and in case of the Secretary's absence or
refusal or neglect so to do, any such notice may be given by any person
thereunto directed by the Chairman of the Board, the Chief Executive Officer, or
by the Board of Directors, upon whose request the meeting is called as provided
in these By-laws. The Secretary shall record all the proceedings of the meetings
of the Board of Directors, any committees thereof and the stockholders of the
Corporation in a book to be kept for that purpose, and shall perform such other
duties as may be assigned to him by the Board of Directors, the Chairman of the
Board or the Chief Executive Officer. The Secretary shall have the custody of


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the seal of the Corporation and shall affix the same to all instruments
requiring it, when authorized by the Board of Directors, the Chairman of the
Board or the Chief Executive Officer, and attest to the same.

         Section 4.8. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate account of
receipts and disbursements in books belonging to the Corporation. The Treasurer
shall deposit all moneys and other valuables in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, the Chairman of the Board, or the Chief
Executive Officer, taking proper vouchers for such disbursements. The Treasurer
shall render to the Chairman of the Board, the Chief Executive Officer and the
Board of Directors, whenever requested, an account of all his transactions as
Treasurer and of the financial condition of the Corporation. If required by the
Board of Directors, the Treasurer shall give the Corporation a bond for the
faithful discharge of his duties in such amount and with such surety as the
Board of Directors shall prescribe.

         Section 4.9. Removal. Any officer elected by the Board of Directors may
be removed by a majority of the members of the Whole Board whenever, in their
judgment, the best interests of the Corporation would be served thereby. No
elected officer shall have any contractual rights against the Corporation for
compensation by virtue of such election beyond the date of the election of such
officer's successor or such officer's death, resignation or removal, whichever
event shall first occur, except as otherwise provided in an employment contract
or an employee plan.

         Section 4.10. Vacancies. A newly created office and a vacancy in any
office because of death, resignation, or removal may be filled by the Board of
Directors for the unexpired portion of the term at any meeting of the Board of
Directors.

                                    ARTICLE V

                        STOCK CERTIFICATES AND TRANSFERS

         Section 5.1. Stock Certificates and Transfers. (A) The interest of each
stockholder of the Corporation shall be evidenced by certificates for shares of
stock in such form as the appropriate officers of the Corporation may from time
to time prescribe, provided that the Board of Directors may provide by
resolution or resolutions that some or all of any or all classes or series of
the stock of the Corporation shall be uncertificated shares. Notwithstanding the
adoption of such a resolution by the Board of Directors, every holder of stock
represented by certificates and upon request every holder of uncertificated
shares shall be entitled to have a certificate signed by, or in the name of the
Corporation by the Chairman of the Board of Directors, the Chief Executive
Officer or the President or Vice-President, and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation,
representing the number of shares registered in certificate form. Except as
otherwise expressly provided by law, the rights and obligations of the holders


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of uncertificated stock and the rights and obligations of the holders of
certificates representing stock of the same class and series shall be identical.

         (B) The certificates of stock shall be signed, countersigned and
registered in such manner as the Board of Directors may by resolution prescribe,
which resolution may permit all or any of the signatures on such certificates to
be in facsimile. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate has ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.

         (C) The shares of the stock of the Corporation represented by
certificates shall be transferred on the books of the Corporation by the holder
thereof in person or by his attorney, upon surrender for cancellation of
certificates for the same number of shares, with an assignment and power of
transfer endorsed thereon or attached thereto, duly executed, with such proof of
the authenticity of the signature as the Corporation or its agents may
reasonably require. Upon receipt of proper transfer instructions from the
registered owner of uncertificated shares such uncertificated shares shall be
cancelled and issuance of new equivalent uncertificated shares or certificated
shares shall be made to the person entitled thereto and the transaction shall be
recorded upon the books of the Corporation. Within a reasonable time after the
issuance or transfer of uncertificated stock, the Corporation shall send to the
registered owner thereof a written notice containing the information required to
be set forth or stated on certificates pursuant to the Delaware General
Corporation Law or, unless otherwise provided by the Delaware General
Corporation Law, a statement that the Corporation will furnish without charge to
each stockholder who so requests the powers, designations, preferences and
relative participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.

         Section 5.2. Lost, Stolen or Destroyed Certificates. No certificate for
shares or uncertificated shares of stock in the Corporation shall be issued in
place of any certificate alleged to have been lost, destroyed or stolen, except
on production of such evidence of such loss, destruction or theft and on
delivery to the Corporation of a bond of indemnity in such amount, upon such
terms and secured by such surety, as the Board of Directors or any financial
officer of the Corporation may in its or his discretion require.

                                   ARTICLE VI

                            MISCELLANEOUS PROVISIONS

         Section 6.1. Fiscal Year. The fiscal year of the Corporation shall end
on the Saturday closest to December 31 of each year and shall begin on the
Sunday following immediately thereafter.



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         Section 6.2. Dividends. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in the
manner and upon the terms and conditions provided by law and its Certificate of
Incorporation.

         Section 6.3. Seal. The corporate seal shall have inscribed thereon the
words "Corporate Seal," the year of incorporation of the Corporation and around
the margin thereof the words "Kasper A.S.L., Ltd. -- Delaware."

         Section 6.4. Waiver of Notice. Whenever any notice is required to be
given to any stockholder or director of the Corporation under the provisions of
the General Corporation Law of the State of Delaware, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice. Neither the business to be transacted at, nor the purpose of, any
annual or special meeting of the stockholders or of the Board of Directors or
committee thereof need be specified in any waiver of notice of such meeting.

         Section 6.5. Audits. The accounts, books and records of the Corporation
shall be audited upon the conclusion of each fiscal year by an independent
certified public accountant selected by the Board of Directors, and it shall be
the duty of the Board of Directors to cause such audit to be made annually.

         Section 6.6. Resignations. Any director or any officer, whether elected
or appointed, may resign at any time by serving written notice of such
resignation on the Chairman of the Board, the Chief Executive Officer, the
President, or the Secretary, and such resignation shall be deemed to be
effective as of the close of business on the date said notice is received by the
Chairman of the Board, the Chief Executive Officer, the President, or the
Secretary or at such later date as is stated therein. No formal action shall be
required of the Board of Directors or the stockholders to make any such
resignation effective.

         Section 6.7. Indemnification and Insurance. (A) Each person who was or
is made a party or is threatened to be made a party to or is involved in any
action, suit, or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or she
or a person of whom he or she is the legal representative is or was a director
or officer of the Corporation or is or was serving at the request of the
Corporation as a director or officer of another corporation or of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans maintained or sponsored by the Corporation, whether the
basis of such proceeding is alleged action in an official capacity as a director
or officer or in any other capacity while serving as a director or officer,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended (but, if permitted by applicable law, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said law permitted
the Corporation to provide prior to such amendment), against all expense,


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liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of his or her heirs, executors and
administrators; provided, however, that except as provided in paragraph (C) of
this By-law, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person only if such proceeding (or part thereof) initiated by such person
was authorized by the Board of Directors. The right to indemnification conferred
in this By-law shall be a contract right and shall include the right to be paid
by the Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition, such advances to be paid by the Corporation
within 20 days after the receipt by the Corporation of a statement or statements
from the claimant requesting such advance or advances from time to time;
provided, however, that if the General Corporation Law of the State of Delaware
requires, the payment of such expenses incurred by a director or officer in his
or her capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the Corporation of an undertaking by or on behalf of such director or officer,
to repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this By-law or
otherwise.

         (B) To obtain indemnification under this By-law, a claimant shall
submit to the Corporation a written request, including therein or therewith such
documentation and information as is reasonably available to the claimant and is
reasonably necessary to determine whether and to what extent the claimant is
entitled to indemnification. Upon written request by a claimant for
indemnification pursuant to the first sentence of this paragraph (B), a
determination, if required by applicable law, with respect to the claimant's
entitlement thereto shall be made as follows: (1) if requested by the claimant,
by Independent Counsel (as hereinafter defined), or (2) if no request is made by
the claimant for a determination by Independent Counsel, (i) by a majority vote
of the Disinterested Directors (as hereinafter defined), even though less than a
quorum, or (ii) if there are no Disinterested Directors or, if the Disinterested
Directors so direct, by Independent Counsel in a written opinion to the Board of
Directors, a copy of which shall be delivered to the claimant, or (iii) if the
Disinterested Directors so direct, by the stockholders of the Corporation. In
the event the determination of entitlement to indemnification is to be made by
Independent Counsel at the request of the claimant, the Independent Counsel
shall be selected by the Board of Directors unless there shall have occurred
within two years prior to the date of the commencement of the action, suit or
proceeding for which indemnification is claimed a "Change of Control" as defined
in the Kasper A.S.L., Ltd. 1997 Management Stock Option Plan, in which case the
Independent Counsel shall be selected by the claimant unless the claimant shall
request that such selection be made by the Board of Directors. If it is so


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determined that the claimant is entitled to indemnification, payment to the
claimant shall be made within 10 days after such determination.

         (C) If a claim under paragraph (A) of this By-law is not paid in full
by the Corporation within 30 days after a written claim pursuant to paragraph
(B) of this By-law has been received by the Corporation, the claimant may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has not met the standard of
conduct which makes it permissible under the General Corporation Law of the
State of Delaware for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including without limitation, the
Disinterested Directors, Independent Counsel or stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the General Corporation Law of the
State of Delaware, nor an actual determination by the Corporation (including,
without limitation, the Disinterested Directors, Independent Counsel or
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.

         (D) If a determination shall have been made pursuant to paragraph (B)
of this By-law that the claimant is entitled to indemnification, the Corporation
shall be bound by such determination in any judicial proceeding commenced
pursuant to paragraph (C) of this By-law.

         (E) The Corporation shall be precluded from asserting in any judicial
proceeding commenced pursuant to paragraph (C) of this By-law that the
procedures and presumptions of this By-law are not valid, binding and
enforceable and shall stipulate in such proceeding that the Corporation is bound
by all the provisions of this By-law.

         (F) The right to indemnification and the payment of expenses incurred
in defending a proceeding in advance of its final disposition conferred in this
By-law shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, By-laws, agreement, vote of stockholders or Disinterested
Directors or otherwise. No repeal or modification of this By-law shall in any
way diminish or adversely affect the rights of any director, officer, employee
or agent of the Corporation hereunder in respect of any occurrence or matter
arising prior to any such repeal or modification.

         (G) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would


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have the power to indemnify such person against such expense, liability or loss
under the General Corporation Law of the State of Delaware. To the extent that
the Corporation maintains any policy or policies providing such insurance, each
such director or officer, and each such agent or employee to which rights to
indemnification have been granted as provided in paragraph (H) of this By-law,
shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage thereunder for any such director,
officer, employee or agent.

         (H) The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification, and rights to be paid
by the Corporation the expenses incurred in defending any proceeding in advance
of its final disposition, to any employee or agent of the Corporation, and to
persons serving as employees or agents of another corporation, partnership,
joint venture, trust or other enterprise, at the request of the Corporation, to
the fullest extent of the provisions of this By-law with respect to the
indemnification and advancement of expenses of directors arid officers of the
Corporation.

         (I) If any provision or provisions of this By-law shall be held to be
invalid, illegal or unenforceable for any reason whatsoever: (1) the validity,
legality and enforceability of the remaining provisions of this By-law
(including, without limitation, each portion of any paragraph of this By-law
containing any such provision held to be invalid, illegal or unenforceable, that
is not itself held to be invalid, illegal or unenforceable) shall not in any way
be affected or impaired thereby; and (2) to the fullest extent possible, the
provisions of this By-law (including, without limitation, each such portion of
any paragraph of this By-law containing any such provision held to be invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.

         (J) For purposes of this By-law:

                  (1) "Disinterested Director" means a director of the
         Corporation who is not and was not a party to the proceeding or matter
         in respect of which indemnification is sought by the claimant.

                  (2) "Independent Counsel" means a law firm, a member of a law
         firm, or an independent practitioner, that is experienced in matters of
         corporation law and shall include any person who, under the applicable
         standards of professional conduct then prevailing, would not have a
         conflict of interest in representing either the Corporation or the
         claimant in an action to determine the claimant's rights under this
         By-law.

         (K) Any notice, request or other communication required or permitted to
be given to the Corporation under this By-law shall be in writing and either
delivered in person or sent by telecopy, telex, telegram, overnight mail or
courier service, or certified or registered mail, postage prepaid, return


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receipt requested, to the Secretary of the Corporation and shall be effective
only upon receipt by the Secretary.

         Section 6.8. Extraordinary Transactions. Notwithstanding any other
provision of these By-laws, and in addition to any affirmative vote required by
law, these By-laws or the Certificate of Incorporation of the Corporation,
during the Employment Term, unless otherwise agreed by the Corporation and
Levine, the following extraordinary transactions shall require the approval of
Levine:

                  (i) any merger or consolidation of the Corporation with any
         person;

                  (ii) any sale, lease, exchange, mortgage, pledge, transfer or
         other disposition (in one transaction or a series of transactions) to
         or with any person of all or substantially all of the assets of the
         Corporation; or

                  (iii) any material amendment to these By-laws, whether made or
         approved by the Board of Directors or by the Stockholders.

                                   ARTICLE VII

                            CONTRACTS, PROXIES, ETC.

         Section 7.1. Contracts. Except as otherwise required by law, the
Certificate of Incorporation or these By-laws, any contracts or other
instruments may be executed and delivered in the name and on the behalf of the
Corporation by such officer or officers of the Corporation as the Board of
Directors may from time to time direct. Such authority may be general or
confined to specific instances as the Board of Directors may determine. The
Chairman of the Board, the Chief Executive Officer, the President or any Vice
President may execute bonds, contracts, deeds, leases and other instruments to
be made or executed for or on behalf of the Corporation. Subject to any
restrictions imposed by the Board of Directors or the Chairman of the Board, the
Chief Executive Officer, the President or any Vice President of the Corporation
may delegate contractual powers to others under such officer's jurisdiction, it
being understood, however, that any such delegation of power shall not relieve
such officer of responsibility with respect to the exercise of such delegated
power.

         Section 7.2. Proxies. Unless otherwise provided by resolution adopted
by the Board of Directors, the Chairman of the Board, the Chief Executive
Officer, the President or any Vice President may from time to time appoint an
attorney or attorneys or agent or agents of the Corporation, in the name and on
behalf of the Corporation, to cast the votes which the Corporation may be
entitled to cast as the holder of stock or other securities in any other
corporation or entity, any of whose stock or other securities may be held by the
Corporation, at meetings of the holders of the stock or other securities of such
other corporation, or to consent in writing, in the name of the Corporation as
such holder, to any action by such other corporation or entity, and may instruct
the person or persons so appointed as to the manner of casting such votes or
giving such consent, and may execute or cause to be executed in the name and on


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behalf of the Corporation and under its corporate seal or otherwise, all such
written proxies or other instruments as such officer may deem necessary or
proper.

                                  ARTICLE VIII

                                   AMENDMENTS

         Section 8.1. Amendments. These By-laws may be altered, amended or
repealed at any meeting of the Board of Directors or of the stockholders,
provided notice of the proposed change was given in the notice of the meeting
and, in the case of a meeting of the Board of Directors, in a notice given no
less than twenty-four hours prior to the meeting; provided, however, that, in
the case of amendments by stockholders, notwithstanding any other provisions of
these By-laws or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the stock required by law, the Certificate of
Incorporation or these By-laws, the affirmative vote of the holders of at least
66-2/3 percent of the voting power of the then outstanding Voting Stock, voting
together as a single class, shall be required to alter, amend or repeal any
provision of these By-laws.











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