SIXTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER

THIS SIXTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this "Amendment"), dated as
of June__,2000, is by and among Cluett American Corp. (the "Borrower"), Cluett
American   Investment  Corp.  (the  "Parent"),   Cluett  American  Group,   Inc.
("Interco")  and  the  certain  subsidiaries  of the  Parent  identified  on the
signature pages hereto (together with the Parent and Interco, the "Guarantors"),
the lenders  identified on the signature pages hereto (the  "Lenders"),  Bank of
America,  N.A.  (formerly known as NationsBank,  N.A.), as agent for the Lenders
(in such capacity,  the "Agent"),  and Gleacher  NatWest Inc., as  documentation
agent (the "Documentation Agent").

W I T N E S S E T H

WHEREAS,  the  Borrower,  the  Guarantors,   the  Lenders,  the  Agent  and  the
Documentation  Agent have entered into that certain Credit Agreement dated as of
May 18, 1998, as amended as of May 27, 1998, December 18, 1998,  March 19, 1999,
September 30, 1999, March 29, 2000 and May 2, 2000 (as so previously amended the
"Existing Credit Agreement"); and

WHEREAS,  the parties to the Existing Credit  Agreement have agreed to amend the
Existing  Credit  Agreement  and waive  certain  provisions  thereof as provided
herein.

NOW,  THEREFORE,  in consideration of the agreements  hereinafter set forth, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

PART 1
DEFINITIONS

SUBPART 1.1 Certain Definitions.  Unless otherwise defined herein or the context
otherwise  requires,  the following terms used in this Amendment,  including its
preamble and recitals, have the following meanings:

"Amended  Credit  Agreement"  means the  Existing  Credit  Agreement  as amended
     hereby.

"Amendment No. 6 Effective Date" is defined in Subpart 3.1.

SUBPART 1.2 Other  Definitions.  Unless otherwise  defined herein or the context
otherwise  requires,  terms used in this  Amendment,  including its preamble and
recitals, have the meanings provided in the Amended Credit Agreement.


PART 2

AMENDMENTS TO EXISTING CREDIT AGREEMENT

Effective on (and subject to the  occurrence of) the Amendment  No.6  Effective
Date, the Existing  Credit  Agreement is hereby amended in accordance  with this
Part 2. Except as so amended, the Existing Credit Agreement and all other Credit
Documents shall continue in full force and effect.

SUBPART 2.1 Amendments to Section 1.1.

(a) The following  definitions  appearing in Section 1.1 of the Existing  Credit
Agreement are amended and restated in their entireties to read as follows:

"Investment  and  Deposit  Agreement"  means the  Second  Amended  and  Restated
     Investment and Deposit  Agreement,  dated as of June__,  2000,  between the
     Sponsor and the Agent, as amended, modified,  restated or supplemented from
     time to time.

"Leverage  Reduction  Period"  means the period from and including the Amendment
     No. 5  Effective  Date  through  and  including  June 30, 2000;   provided,
     however, that the Leverage Reduction Period automatically shall be extended
     on June 30, 2000 to  August 31, 2000  if (A the Shirt Group  Restructuring
     shall not have been consummated by June 30, 2000, but there shall exist one
     or more  legally  binding and  enforceable  definitive  purchase  (or other
     appropriate)  agreements (as determined by the Agent in its sole reasonable
     discretion,  supported  by such  opinions  of  counsel  for the  applicable
     Consolidated Party(ies) and/or the relevant purchaser(s) as the Agent shall
     reasonably  request)  providing  for the  consummation  of the Shirt  Group
     Restructuring  by  August 31, 2000  and  (B either  (1) cash  and/or  Cash
     Equivalents  in an  aggregate  amount  at  least  equal  to the  Investment
     Commitment as of  June 30, 2000  shall be on deposit in the Cash Collateral
     Account  or (2) the  Sponsor  Letter of Credit  shall have been  issued and
     delivered to the Agent.

"Leverage Reduction  Requirements"  shall be deemed to have been satisfied as of
     the last day of the  Leverage  Reduction  Period if, as of the most  recent
     fiscal month end preceding the date of determination  with respect to which
     the Agent has received the Required  Financial  Information,  (i) the Fixed
     Charge Coverage Ratio is at least 1.0 to 1.0,  (ii) the  Interest  Coverage
     Ratio is at least 1.5 to 1.0, (iii) the Senior Leverage Ratio is no greater
     than 3.25 to 1.0 and (iv) the  Total  Leverage Ratio is no greater than 5.5
     to 1.0. For purposes of any  determination  under this definition,  (1) all
     calculations  shall be made on a pro forma basis using the  principles  set
     forth in  clauses (2),  (3) and (4) below and  Section 1.3,  (2) any  Asset
     Disposition  consummated  after the Amendment  No. 5 Effective Date and any
     prepayment made pursuant to  Section 3.3(b)(v)(B)  of the Credit  Agreement
     after the Amendment  No. 5  Effective Date shall be deemed to have occurred
     as of the most recent fiscal month end preceding the date of  determination
     with  respect  to which the  Agent  has  received  the  Required  Financial
     Information,  (3) liabilities  for restructuring costs (such as liabilities
     for severance  payments and lease  termination  payments and, to the extent
     that the aggregate amount thereof exceeds the amount of accounts receivable
     associated with the related Equity Interests or Property,  accounts payable
     and accrued  expenses  associated  with such Equity  Interests or Property)
     resulting from all Asset  Dispositions  relating to any Equity Interests or
     Property  comprising the Shirt Group  consummated on or before the last day
     of the Leverage Reduction Period shall be deemed to constitute Indebtedness
     of the Consolidated Parties and (4) Funded Indebtedness of the Consolidated
     Parties  on such date shall be deemed to be  increased  by the amount as of
     such date, as reasonably  calculated by the Borrower,  of the non-recurring
     benefit  to  leverage   associated  with  a  sale  of  receivables  to  the
     Receivables  Financing  Subsidiary and the corresponding  prepayment of the
     Credit Party  Obligations,  provided  that, in no event shall such increase
     exceed  the Net Cash  Proceeds  from such sale of  receivables.  Solely for
     purposes  of  this  definition,  Funded  Indebtedness  of the  Consolidated
     Parties  shall  be  calculated   without   netting  for  (a) cash  or  Cash
     Equivalents  on deposit in the Cash  Collateral  Account or (b) the  amount
     available to be drawn under the Sponsor Letter of Credit.

"Senior Leverage  Ratio" means,  as of the last day of any fiscal quarter of the
     Consolidated  Parties for the twelve month period ending on such date,  the
     ratio of (a) all  Funded  Indebtedness  (net of cash and Cash  Equivalents,
     including  cash and Cash  Equivalents  on  deposit  in the Cash  Collateral
     Account,  and net of the amount  available  to be drawn  under the  Sponsor
     Letter of Credit) of the  Consolidated  Parties on a consolidated  basis on
     the  last  day of  such  period,  excluding (i) Subordinated  Indebtedness,
     (ii) the  Tranche C Obligations and (iii) any  Credit Party  Obligations in
     which a participation  interest has been purchased by, or on behalf of, the
     Sponsor pursuant to  Section 2.1(c) or Section 2.2(c) of the Investment and
     Deposit Agreement, to (b) Consolidated EBITDA for such period.

"Total Leverage  Ratio" means,  as of the last day of any fiscal  quarter of the
     Consolidated  Parties for the twelve month period ending on such date,  the
     ratio of (a) all  Funded  Indebtedness  (net of cash and Cash  Equivalents,
     including  cash and Cash  Equivalents  on  deposit  in the Cash  Collateral
     Account,  and net of the amount  available  to be drawn  under the  Sponsor
     Letter of Credit) of the  Consolidated  Parties on a consolidated  basis on
     the last  day of such  period,  including  Subordinated  Indebtedness,  but
     excluding  (i) the  Tranche C Loans  Obligations  and (ii) any Credit Party
     Obligations in which a participation  interest has been purchased by, or on
     behalf of, the Sponsor pursuant to  Section 2.1(c) or Section 2.2(c) of the
     Investment  and  Deposit  Agreement,  to  (b) Consolidated  EBITDA for such
     period.

(b) The following new  definition is hereby added to Section 1.1 of the Existing
Credit  Agreement  in the  appropriate  alphabetical  order  and  shall  read as
follows:

"Sponsor Letter of Credit" means an irrevocable  standby letter of credit issued
     by Bank of  America,  N.A.  for the  account of the Sponsor in favor of the
     Agent,  for the benefit of the Lenders  other than the Tranche C Lender (in
     its  capacity as such),  in the form of Exhibit  1.1C having a maximum face
     amount equal to the  Investment  Commitment as of  June 30, 2000  (less the
     aggregate  amount  of cash  and Cash  Equivalents  on  deposit  in the Cash
     Collateral Account on such date).

SUBPART 2.2  Amendments  to Section  8.5.  Section 8.5  of the  Existing  Credit
Agreement is amended and restated in its entirety to read as follows:

8.5 Asset Dispositions.

The Credit Parties will not permit the Parent or any Consolidated  Party to make
any Asset Disposition  (including,  without  limitation,  any Sale and Leaseback
Transaction)  other than Excluded  Asset  Dispositions  and a Permitted  Austell
Property Sale,  unless (a) except in connection with the licensing of any of the
intellectual property of the Shirt Group on terms providing for the reversion to
the applicable  Consolidated Parties of all rights to such intellectual property
at the end of the license term and upon default in the payment of licensing fees
by the  applicable  licensee  thereof,  the  consideration  paid  in  connection
therewith is at least 75% cash or Cash Equivalents, (b) if such transaction is a
Sale and Leaseback  Transaction,  such  transaction is permitted by the terms of
Section 8.13  and  (c) the  Credit  Parties  shall,  immediately  following  the
consummation of such Asset  Disposition apply (or cause to be applied) an amount
equal to the Net Cash  Proceeds of such Asset  Disposition  to prepay the Credit
Party   Obligations  in  accordance  with  the  terms  of   Section 3.3(b)(iii).
Notwithstanding  any provision of this Credit Agreement to the contrary,  (i) no
Asset  Disposition  involving  any portion of the Sock Group shall be  permitted
unless  simultaneously  all of the Credit Party  Obligations are repaid and this
Credit Agreement is terminated in accordance with the terms of  Section 11.13(b)
except  pursuant to a  transaction  permitted  under  clause  (ii)(A)  below and
(ii) none of the  Consolidated  Parties may sell,  lease,  transfer or otherwise
dispose of  accounts  receivable  except  pursuant  to (A) up to three (3) Asset
Dispositions  of receivables  having an aggregate fair market value (for both of
such transactions taken together) of not greater than $24,000,000 by one or more
Consolidated  Parties to the Receivables  Financing Subsidiary and each of which
(1) is  non-recourse to the  Consolidated  Parties (except for  representations,
warranties,  covenants  and  indemnities  which are  reasonably  customary in an
accounts receivable transaction),  (2) complies with the foregoing terms of this
Section 8.5, (3) does not constitute an "Asset Sale" under and as defined in the
documents  evidencing  or  governing  the  Senior  Subordinated  Debt and (4) is
consummated by August 31,  2000 and (B) a  transaction  constituting an Excluded
Asset Disposition.

Upon a sale of  Property  (including,  without  limitation,  the sale of  Equity
Interests of a  Consolidated  Party)  permitted by this  Section 8.5,  the Agent
shall (to the extent  applicable  and provided that such Person is also released
from  any  and  all of  its  obligations,  if  any,  in  respect  of  all  other
Indebtedness  of the Credit  Parties)  deliver to the Credit  Parties,  upon the
Credit Parties' request and at the Credit Parties' expense,  such  documentation
as is  reasonably  necessary  to evidence  the  release of the Agent's  security
interest,  if any, in such  Property  or Equity  Interests,  including,  without
limitation,  amendments or terminations of UCC financing statements, if any, the
return of stock certificates, if any, and the release of such Consolidated Party
from all of its obligations, if any, under the Credit Documents.

SUBPART 2.3  Amendments to  Section 9.1.  Subsection (m)  of  Section 9.1 of the
Existing  Credit  Agreement  is amended and  restated in its entirety to read as
follows:

(m)  Investment and Deposit  Agreement.  There shall occur and be continuing any
"Event of  Default"  under,  and as  defined  in,  Section 6.1(a)  or (h) of the
Investment and Deposit Agreement; or

SUBPART 2.4 New Exhibit  1.1C.  A new Exhibit  1.1C in the form of Exhibit  1.1C
attached hereto is added to the Existing Credit Agreement immediately succeeding
existing Exhibit 1.1B thereof.

PART 3
EFFECTIVENESS

SUBPART 3.1 Amendment  No. 6  Effective Date. This Amendment shall be and become
effective as of the date hereof (the "Amendment No. 6 Effective  Date") when all
of the  conditions  set forth in this  Part 3 shall  have  been  satisfied,  and
thereafter this Amendment shall be known,  and may be referred to, as "Amendment
No. 6."

SUBPART  3.1.1  Execution of  Counterparts  of  Amendment.  The Agent shall have
received  counterparts of this Amendment which collectively shall have been duly
executed on behalf of each of the  Borrower,  the  Guarantors  and the  Required
Lenders.

SUBPART 3.1.2 Investment and Deposit Agreement. The Agent shall have received an
original copy of the  Investment and Deposit which shall have been duly executed
on behalf of the Sponsor.


PART 4
MISCELLANEOUS

SUBPART  4.1.  Cross-References.  References  in this  Amendment  to any Part or
Subpart  are,  unless  otherwise  specified,  to such  Part or  Subpart  of this
Amendment.

SUBPART 4.2 Instrument Pursuant to Existing Credit Agreement.  This Amendment is
a Credit Document  executed  pursuant to the Existing Credit Agreement and shall
(unless otherwise  expressly  indicated therein) be construed,  administered and
applied in  accordance  with the terms and  provisions  of the  Existing  Credit
Agreement.

SUBPART 4.3 References in Other Credit Documents. At such time as this Amendment
No.  6 shall  become  effective  pursuant  to the  terms  of  Subpart  3.1,  all
references in the Credit Documents to the "Credit  Agreement" shall be deemed to
refer to the Credit Agreement as amended by this Amendment No. 6.

SUBPART 4.4 Counterparts/Telecopy. This Amendment may be executed by the parties
hereto in several counterparts,  each of which shall be deemed to be an original
and all of which  shall  constitute  together  but one and the  same  agreement.
Delivery  of  executed  counterparts  of this  Amendment  by  telecopy  shall be
effective as an original and shall constitute a representation  that an original
shall be delivered.

SUBPART 4.5 Governing Law. THIS AMENDMENT  SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

SUBPART 4.6  Successors and Assigns.  This  Amendment  shall be binding upon and
inure to the benefit of the parties hereto and their  respective  successors and
assigns.


IN WITNESS  WHEREOF the Borrower,  the Guarantors and the Required  Lenders have
caused this Amendment to be duly executed on the date first above written.



CREDIT PARTIES:                             CLUETT AMERICAN Corp.
                                            Cluett American Investment Corp.
                                            Cluett American Group, Inc.
                                            CONSUMER DIRECT CORPORATION
                                            ARROW FACTORY STORES, INC.
                                            GAKM RESOURCES CORPORATION
                                            CLUETT PEABODY RESOURCES CORPORATION
                                            CLUETT PEABODY HOLDING CORP.
                                            CLUETT, PEABODY & CO., INC.
                                            BIDERTEX SERVICES INC.
                                            GREAT AMERICAN KNITTING MILLS, INC.
                                            CLUETT DESIGNER GROUP, INC.
                                            BIDERMANN TAILORED CLOTHING, INC.

                                            By:
                                            Name:
                                            Title:



AGENT:                                      BANK OF AMERICA, N.A.
                                            (formerly known as NationsBank,
                                             N. A.), as Agent

                                            By:
                                            Name:
                                            Title:


LENDERS:                                    BANK OF AMERICA, N.A.
                                            (formerly known as NationsBank,
                                             N. A.)

                                            By:
                                            Name:
                                            Title:

                                            NATIONAL WESTMINSTER BANK PLC

                                            By:
                                            Name:
                                            Title:


                                            FLEET BANK, N.A.

                                            By:
                                            Name:
                                            Title:


                                            BANKBOSTON, N.A.

                                            By:
                                            Name:
                                            Title:


                                            FLEET BUSINESS CREDIT CORPORATION
                                            (successor in interest to Sanwa
                                             Business Credit Corporation)

                                            By:
                                            Name:
                                            Title:


                                            BANK AUSTRIA CREDITANSTALT
                                            CORPORATE FINANCE, INC.

                                            By:
                                            Name:
                                            Title:

                                            By:
                                            Name:
                                            Title:


                                            FIRST SOURCE FINANCIAL LLP,
                                            By:  First Source Financial Inc.,
                                            its manager

                                            By:
                                            Name:
                                            Title:

<PAGE>

(Signatures Continued)

                                            GENERAL ELECTRIC CAPITAL
                                            CORPORATION

                                            By:
                                            Name:
                                            Title:


                                            SUMMIT BANK

                                            By:
                                            Name:
                                            Title:


                                            HSBC BANK USA

                                            By:
                                            Name:
                                            Title:


                                            AG CAPITAL FUNDING PARTNERS, L.P.
                                            By:  Angelo Gordon & Co., L.P. as
                                            Investment Advisor

                                            By:
                                            Name:
                                            Title:

                                            NORTHWOODS CAPITAL LIMITED
                                            By:  Angelo Gordon & Co., L.P. as
                                            Collateral Manager

                                            By:
                                            Name:
                                            Title:


                                            NEW YORK LIFE INSURANCE COMPANY

                                            By:
                                            Name:
                                            Title:


                                            SENIOR DEBT PORTFOLIO
                                            By:  Boston Management and Research,
                                                    as Investment Advisor

                                            By:
                                            Name:
                                            Title:


                                            ML CLO XX PILGRIM AMERICA (CAYMAN)
                                            LTD.

                                            By:
                                            Name:
                                            Title:


                                            TORONTO DOMINION (TEXAS), INC.

                                            By:
                                            Name:
                                            Title:


                                            GREAT POINT CLO 1999-1 LTD.

                                            By:      Sankaty Advisors, Inc., as
                                                     Collateral Managers

                                            By:
                                            Name:
                                            Title:


                                            EATON VANCE SENIOR INCOME TRUST

                                            By:
                                            Name:
                                            Title:


Exhibit 1.1C

Form of Sponsor Letter of Credit