Exhibit 10.1

                      AMENDMENT AGREEMENT NO. 4 AND WAIVER

                  AMENDMENT AGREEMENT NO. 4 AND WAIVER, dated as of June 19,
2001 (this "Agreement"), to the Amended and Restated Credit Agreement dated as
of July 9, 1999 (as amended, restated or modified from time to time, the "Credit
Agreement"), among KASPER A.S.L., LTD., a Delaware corporation (the "Borrower"),
the Guarantors named therein, the financial institutions from time to time party
thereto (collectively, the "Lenders"), THE CHASE MANHATTAN BANK, as
administrative and collateral agent for the Lenders (in such capacity, the
"Agent"), and THE CIT GROUP/COMMERCIAL SERVICES, INC., as collateral monitor (in
such capacity, the "Collateral Monitor"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the Credit
Agreement.

                  WHEREAS, the Borrower has requested that the Lenders agree (i)
to waive certain Events of Defaults that have occurred and are continuing under
the Credit Agreement and (ii) to amend certain terms and provisions of the
Credit Agreement;

                  WHEREAS, the Lenders have agreed to waive certain Events of
Defaults that have occurred and are continuing under the Credit Agreement and
the Lenders, the Borrower and the Guarantors have agreed to amend the Credit
Agreement, in each case as described herein;

                  NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and subject to the fulfillment of
the conditions set forth below, the parties hereto agree as follows:

         SECTION 1. WAIVERS OF EVENTS OF DEFAULT

                  Upon the fulfillment of the conditions set forth in Section 4
below, the following provisions of the Credit Agreement are hereby waived as
follows:

                  1.1 The Lenders hereby agree to waive any Event of Default
which has occurred and is continuing as a result of the Borrower's failure to
comply with the provisions of Section 7.08 for the period ended on or about
March 31, 2001.

                  1.2 The Lenders hereby agree to waive any Event of Default
which has occurred and is continuing as a result of the Borrower's failure to
comply with the provisions of Section 7.09 for the period ended on or about
March 31, 2001.

                  1.3 The Lenders hereby agree to waive any Event of Default
which has occurred and is continuing as a result of the Borrower's failure to
comply with the provisions of Section 7.10 for the periods ended on or about
February 28, 2001, March 31, 2001, April 30, 2001 and May 31, 2001.


<PAGE>

         SECTION 2. AMENDMENTS TO CREDIT AGREEMENT

                  Upon the fulfillment of the conditions set forth in Section 4
below, the Credit Agreement is hereby amended as follows:

                  2.1 The definitions set forth in Article I of the Credit
Agreement are hereby amended by inserting the following new definition in
appropriate alphabetical order:

                           "Amendment Agreement No. 3" shall mean that certain
                  Amendment Agreement No. 3 and Waiver, dated as of November 13,
                  2000, to the Credit Agreement.

                  2.2 The definition of the term "Obligations" set forth in
Section 1.01 of the Credit Agreement is hereby amended by inserting the
parenthetical phrase "(or any of their Affiliates)" immediately following the
words "Indebtedness of the Borrower to the Lenders" each time the same appears
therein and immediately following the words "so long as any Lender" appearing in
the first parenthesis thereof.

                  2.3 The definition of the term "Trademark Advance" set forth
in Section 1.01 of the Credit Agreement is hereby amended by inserting the words
"fiscal monthly" immediately preceding the words "period as set forth on Exhibit
A annexed hereto" appearing in clause (ii)(y) of such definition.

                  2.4 Section 2.17 of the Credit Agreement is hereby amended (i)
by deleting the amount "$10,000,000" appearing in the first sentence thereof and
inserting in lieu thereof the amount "$15,000,000" and (ii) by inserting the
following proviso at the end of the first sentence thereof:

                  "and provided, further, that no standby Letter of Credit shall
                  be issued for the purchase of inventory other than standby
                  Letters of Credit in the aggregate undrawn face amount not in
                  excess of $500,000 and which are issued for the benefit of
                  Nissho Iwai Textile (USA) Inc., DFK Trading Corp. Ltd. and
                  Union Industries Inc."

                  2.5 Section 7.01 of the Credit Agreement is hereby amended by
inserting the word "; or" at the end of subsection (n) thereof and by inserting
the following new subsection (o) immediately thereafter:

                  "(o) Liens, in an amount not to exceed $1,700,000 in the
                  aggregate, on unearned insurance premiums that are financed by
                  one or more finance companies."

                  2.6 Section 7.03(xii) of the Credit Agreement is hereby
amended in its entirety to read as follows:



                                       2
<PAGE>

                  "and (xii) other Indebtedness of the Borrower and its
                  subsidiaries provided that the aggregate amount of
                  Indebtedness permitted pursuant to this clause (xii) shall not
                  exceed $3,500,000 in the aggregate during the period from and
                  after June 1, 2001 through February 10, 2002, and at any time
                  thereafter, $2,500,000."

                  2.7 Subject to the proviso set forth at the end of this
Section 2.7, Sections 7.08, 7.09 and 7.10 of the Credit Agreement are hereby
amended in their entireties to read as follows (it being understood that if any
of the Senior Notes are converted to equity, the covenant levels set forth in
such Sections shall be recalculated and reset at levels mutually agreed upon
between the Borrower and the Required Lenders):

                           "SECTION 7.08 Capitalization Ratio. Permit the
                  Capitalization Ratio of the Borrower and its subsidiaries on a
                  Consolidated basis for the four consecutive fiscal quarter
                  periods ending on or about the dates set forth below to be
                  greater than the respective amounts set forth below opposite
                  such dates:

         Fiscal Quarter ending                                      Ratio
         ---------------------                                      -----
         on or about
         -----------

         June 30, 2001                                                70%

         September 30, 2001                                           72%

         December 31, 2001                                            70%

         March 31, 2002                                               66%

         June 30, 2002                                                64%

         September 30, 2002                                           65%

         December 31, 2002                                            61%

         March 31, 2003                                               63%

         June 30, 2003                                                63%

         September 30, 2003                                           63%


                                       3
<PAGE>

                           SECTION 7.09 Interest Coverage Ratio. Permit the
                  Interest Coverage Ratio of the Borrower and its subsidiaries
                  on a Consolidated basis for the four consecutive fiscal
                  quarter periods ending on or about the dates set forth below
                  to be less than the respective amounts set forth below
                  opposite such dates:

         Fiscal Quarter ending                                       Ratio
         ---------------------                                       -----
         on or about
         -----------

         June 30, 2001                                              .27:1.00

         September 30, 2001                                         .37:1.00

         December 31, 2001                                          .77:1.00

         March 31, 2002                                            1.40:1.00

         June 30, 2002                                             1.50:1.00

         September 30, 2002                                        1.65:1.00

         December 31, 2002                                         1.80:1.00

         March 31, 2003                                            1.95:1.00

         June 30, 2003                                             2.05:1.00

         September 30, 2003                                        2.25:1.00

                           SECTION 7.10 Net Worth. Permit the Net Worth of the
                  Borrower and its subsidiaries on a Consolidated basis at any
                  time to be less than the respective amounts set forth below
                  for the fiscal periods indicated:



                                       4
<PAGE>

Fiscal Month ending                                          Amount
-------------------                                          ------
on or about
-----------

May 31, 2001                                                 $80,000,000

June 30, 2001                                                $78,000,000

July 31, 2001                                                $78,000,000

August 31, 2001                                              $79,000,000

September 30, 2001                                           $78,000,000

October 31, 2001                                             $78,000,000

November 30, 2001                                            $76,500,000

December 31, 2001                                            $74,500,000

Fiscal Quarter ending
---------------------
on or about
-----------

March 31, 2002                                               $  97,000,000

June 30, 2002                                                $  98,000,000

September 30, 2002                                           $  99,000,000

December 31, 2002                                            $103,000,000

March 31, 2003                                               $104,000,000

June 30, 2003                                                $108,000,000

September 30, 2003                                           $109,000,000

December 31, 2003                                            $115,000,000"

; provided that in the event the Borrower shall make any payment on account of
the principal of, interest on, or any redemption or sinking fund payment in
respect of, any of the Senior Notes, the amendments provided for in this Section


                                       5
<PAGE>

2.7 as well as the amendments provided for in Section 2.8 of Amendment Agreement
No. 3 shall be automatically rescinded in their entirety and the applicable
covenant amounts for any period shall again be the covenant amounts set forth in
Sections 7.08, 7.09 and 7.10 as applicable as of the date immediately preceding
the date on which Amendment Agreement No. 3 became effective.

                  2.8 Section 7.20 of the Credit Agreement is hereby amended in
its entirety to read as follows:

                           "SECTION 7.20. Revolving Credit Loans. Permit the
                  aggregate outstanding principal amount of Revolving Credit
                  Loans (excluding Letter of Credit Usage) on the last Business
                  Day of any of the fiscal months set forth below to exceed the
                  lesser of (A) the amount permitted by Section 2.01(a) hereof
                  and (B) the amount (or such other amount as may be consented
                  to by the Required Lenders) set forth opposite such fiscal
                  month:


                  Fiscal Month                                Maximum Amount
                  ------------                                --------------

                  June 2001                                      $80,900,000

                  July 2001                                      $89,904,000

                  August 2001                                   $107,114,000

                  September 2001                                $104,096,000

                  October 2001                                   $79,600,000

                  November 2001                                  $88,867,000

                  December 2001                                  $76,051,000

                  January 2002                                   $91,000,000

                  February 2002                                 $102,500,000

                  March 2002 and thereafter through the
                  Revolving Credit Termination Date              $92,000,000



                                       6
<PAGE>

                  2.9 Subject to the proviso set forth at the end of this
Section 2.9, Exhibit A to the Credit Agreement is hereby amended by deleting the
entries for the fiscal monthly periods commencing with "May `01" and ending with
"August `01" appearing therein and inserting in lieu thereof the following:

                          "May `01           Jun `01            Jul `01
                          $42,000            $42,000            $42,000

                          Aug `01
                          $42,000"

; provided that in the event the Borrower shall make any payment on account of
the principal of, interest on or any redemption or sinking fund payment in
respect of, any of the Senior Notes, the amendments provided for in this Section
2.9 as well as the amendments provided for in Section 2.10 of Amendment
Agreement No. 3 shall be automatically rescinded in their entirety and the
applicable amount of the Trademark Advance for any period shall again be the
amount set forth on Exhibit A to the Credit Agreement as of the date immediately
preceding the date on which Amendment Agreement No. 3 became effective.
Notwithstanding anything to the contrary set forth in this Section 2.9 or in
Exhibit A to the Credit Agreement as amended hereby, from the fifth calendar day
through the twenty-fifth calendar day of each fiscal month commencing with June,
2001 and ending with the fiscal month of September 2001, the amount of the
Trademark Advance may be up to $3,000,000 in excess of the amount thereof for
such fiscal month set forth on Exhibit A, but at no time in excess of
$45,000,000.

         SECTION 3. CONFIRMATION OF LOAN DOCUMENTS

                  3.1 Each Loan Party, by its execution and delivery of this
Agreement, irrevocably and unconditionally ratifies and confirms in favor of the
Agent and the Lenders that (i) it consents to the terms and conditions of the
Credit Agreement as it has been amended by this Agreement and that
notwithstanding this Agreement, each Loan Document to which such Loan Party is a
party shall continue in full force and effect in accordance with its terms, as
it has been amended by this Agreement, and is and shall continue to be
applicable to all of the Obligations and (ii) it is truly and justly indebted to
the Agent, the Collateral Monitor and the Lenders, for all of the Obligations
without defense, offset or counterclaim of any kind whatsoever and hereby
releases the Agent, the Collateral Monitor and each of the Lenders from any and
all claims, obligations, acts, omissions, damages or causes of action arising
out of, related or in any way connected with any action or failure to act, prior
to the execution of this Agreement , in connection with the events or
circumstances arising under or otherwise related to the Credit Agreement or any
other Loan Document.



                                       7
<PAGE>

         SECTION 4. CONDITIONS PRECEDENT

         This Agreement shall become effective upon the execution and delivery
to the Agent of counterparts hereof by the Borrower, each Guarantor and Lenders
constituting the Required Lenders and the fulfillment of the following
conditions:

                  4.1 The Agent shall have received a non-refundable amendment
fee in the amount of $675,000 for the ratable benefit of the Lenders who have
executed and delivered to the Agent a counterpart to this Agreement by not later
than 5:00 p.m. (New York City time) on June 25, 2001.

                  4.2 Morgan, Lewis & Bockius LLP counsel to the Agent, shall
have received payment in full for all legal fees charged, and all costs and
expenses incurred and invoiced, by such counsel through the date hereof and all
legal fees charged, and all costs and expenses incurred, by such counsel in
connection with the transactions contemplated under the Credit Agreement, this
Agreement and the other Loan Documents and instruments in connection herewith
and therewith and the Agent shall have received payment in full of any other
fees and expenses of the Agent, the Collateral Monitor, or any other
professional retained by the Agent which the Borrower is obligated to pay
pursuant to the Credit Agreement and the other Loan Documents.

                  4.3 All legal matters in connection with this Agreement shall
be satisfactory to the Agent and its counsel in their sole discretion.

                  4.4 The Agent shall have received a certificate signed by a
Financial Officer of the Borrower and each Guarantor stating that after giving
effect to this Agreement (i) all representations and warranties contained in
this Agreement and the Credit Agreement shall be true and correct in all
material respects with the same effect as though made on and as of the date on
which the conditions set forth in this Section 4 are fulfilled (except insofar
as such representations and warranties relate expressly to an earlier date) and
(ii) there exists no Event of Default.

                  4.5 The Agent shall have received such other documents as the
Agent or Agent's counsel shall reasonably deem necessary.

         SECTION 5. MISCELLANEOUS

                  5.1 Each of the Borrower and the Guarantors reaffirms and
restates the representations and warranties set forth in Article IV of the
Credit Agreement, and represents that after giving effect to this Agreement all
such representations and warranties shall be true and correct in all material
respects with the same effect as though made on and as of the date on which the
conditions set forth in Section 4 are fulfilled (except insofar as such
representations and warranties relate expressly to an earlier date). Each Loan


                                       8
<PAGE>

Party represents and warrants (which representations and warranties shall
survive the execution and delivery hereof) to the Lenders that:

                  (a) It has the corporate power and authority to execute,
         deliver and carry out the terms and provisions of this Agreement hereby
         and has taken or caused to be taken all necessary corporate action to
         authorize the execution, delivery and performance of this Agreement;

                  (b) No consent of any other person (including, without
         limitation, shareholders or creditors of any Loan Party), and no action
         of, or filing with any governmental or public body or authority is
         required to authorize, or is otherwise required in connection with the
         execution, delivery and performance of this Agreement;

                  (c) This Agreement has been duly executed and delivered on
         behalf of each Loan Party by a duly authorized officer, and constitutes
         a legal, valid and binding obligation of each Loan Party enforceable in
         accordance with its terms, subject to bankruptcy, reorganization,
         insolvency, moratorium and other similar laws affecting the enforcement
         of creditors' rights generally and the exercise of judicial discretion
         in accordance with general principles of equity; and

                  (d) The execution, delivery and performance of this Agreement
         will not violate any law, statute or regulation, or any order or decree
         of any court or governmental instrumentality, or conflict with, or
         result in the breach of, or constitute a default under any contractual
         obligation of any Loan Party.

                  5.2 Except, as herein expressly amended, the Credit Agreement
is ratified and confirmed in all respects and shall remain in full force and
effect in accordance with its terms.

                  5.3 All references to the Credit Agreement in the Credit
Agreement and the other Loan Documents and the other documents and instruments
delivered pursuant to or in connection therewith shall mean the Credit Agreement
as amended hereby and as may in the future be amended, restated, supplemented or
modified from time to time.

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

                  5.5 Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.



                                       9
<PAGE>

                  5.6 THIS AGREEMENT, IN ACCORDANCE WITH SECTION 5-1401 OF THE
GENERAL OBLIGATION LAW OF THE STATE OF NEW YORK, SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ANY CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION
OF THE LAWS OF ANY OTHER JURISDICTION.

                  5.7 The parties hereto shall, at any time and from time to
time following the execution of this Agreement, execute and deliver all such
further instruments and take all such further actions as may be reasonably
necessary or appropriate in order to carry out the provisions of this Agreement.

               [Remainder of this page intentionally left blank.]




                                       10
<PAGE>

                  IN WITNESS WHEREOF, the Borrower, Guarantors, the Agent, the
Collateral Monitor and the Lenders have caused this Amendment Agreement No. 4
and Waiver to be duly executed by their respective authorized officers as of the
day and year first above written.

                                KASPER A.S.L., LTD., as Borrower


                                By: /s/ Arthur S. Levine
                                    ---------------------
                                   Name: Arthur S. Levine
                                   Title: Chief Executive Officer

                                A.S.L. RETAIL OUTLETS, INC., as a Guarantor


                                By: /s/ Arthur S. Levine
                                    ---------------------
                                   Name: Arthur S. Levine
                                   Title: Chief Executive Officer


                                ASL/K LICENSING CORP., as a Guarantor


                                By: /s/ Arthur S. Levine
                                    ---------------------
                                   Name: Arthur S. Levine
                                   Title: Chief Executive Officer

                                KASPER A.S.L. EUROPE, LTD., as a Guarantor


                                By: /s/ Arthur S. Levine
                                    ---------------------
                                   Name: Arthur S. Levine
                                   Title: Chief Executive Officer

                                KASPER HOLDINGS INC., as a Guarantor


                                By: /s/ Arthur S. Levine
                                    ---------------------
                                   Name: Arthur S. Levine
                                   Title: Chief Executive Officer



<PAGE>




                                AKC ACQUISITION, LTD., as a Guarantor


                                By: /s/ Lester E. Schreiber
                                    ------------------------
                                   Name: Lester E. Schreiber
                                   Title: Director

                                LION LICENSING, LTD., as a Guarantor


                                By: /s/ Lester E. Schreiber
                                    ------------------------
                                   Name: Lester E. Schreiber
                                   Title: Director

                                ASIA EXPERT LIMITED, as a Guarantor


                                By: /s/ Arthur S. Levine
                                    ---------------------
                                   Name: Arthur S. Levine
                                   Title: Director

                                TOMWELL LIMITED, as a Guarantor


                                By: /s/ Arthur S. Levine
                                    ---------------------
                                   Name: Arthur S. Levine
                                   Title: Director

                                THE CHASE MANHATTAN BANK, as Lender


                                By: /s/ Susan H. Atha
                                    ---------------------
                                   Name: Susan H. Atha
                                   Title: Vice President

                                THE CHASE MANHATTAN BANK, as Agent


                                By: /s/ Susan H. Atha
                                    ------------------------
                                   Name: Susan H. Atha
                                   Title: Vice President


<PAGE>

                                THE CIT GROUP/COMMERCIAL
                                SERVICES, INC., as Lender


                                By: /s/ Frank A. Grimaldi
                                    ---------------------
                                   Name: Frank A. Grimaldi
                                   Title: Vice President

                                THE CIT GROUP/COMMERCIAL
                                SERVICES, INC., as Collateral Monitor


                                By: /s/ Frank A. Grimaldi
                                    ---------------------
                                   Name: Frank A. Grimaldi
                                   Title: Vice President

                                LASALLE BANK, NATIONAL ASSOCIATION, as
                                Lender


                                By: /s/ Michael W. Kiss
                                    ---------------------
                                   Name: Michael W. Kiss
                                   Title: Senior Vice President


                                FLEET CAPITAL CORPORATION, as Lender


                                By: /s/ Frank J. Galle
                                    ---------------------
                                   Name: Frank J. Galle
                                   Title: Senior Vice President

                                FINOVA CAPITAL CORPORATION, as Lender


                                By: /s/ William D. Robinson
                                    --------------------------
                                   Name: William D. Robinson
                                   Title: Vice President Senior Credit Officer


<PAGE>

                                ISRAEL DISCOUNT BANK OF NEW
                                YORK, as Lender


                                By: /s/ Tim McCurry
                                    ---------------------
                                   Name: Tim McCurry
                                   Title: Assistant Manager


                                By: /s/ Howard Weinberg
                                    ---------------------
                                   Name: Howard Weinberg
                                   Title: Senior Vice President

                                PNC BANK, NATIONAL ASSOCIATION,
                                as Lender


                                By: /s/ Wallace G. Clements
                                    ------------------------
                                   Name: Wallace G. Clements
                                   Title: Vice President

                                DEBIS FINANCIAL SERVICES, INC., as Lender


                                By: /s/ G. Alexander Cole
                                    ----------------------
                                   Name: G. Alexander Cole
                                   Title: Managing Director -
                                         Credit ABL Division

                                BANK LEUMI USA, as Lender


                                By: /s/ Steven Farron
                                    ---------------------
                                   Name: Steven Farron
                                   Title: Vice President