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                                 AMENDMENT NO. 5

                                       TO

                               FINANCING AGREEMENT

     AMENDMENT NO. 5 TO FINANCING AGREEMENT (this "Amendment") is entered into
as of May 12, 2005, by and among CYNTHIA STEFFE ACQUISITION, LLC, a New York
limited liability company ("CS Acquisition"), S.L. DANIELLE ACQUISITION, LLC, a
New York limited liability company ("Danielle Acquisition"), BERNARD CHAUS, INC.
a New York corporation ("Chaus" and together with CS Acquisition and Danielle
Acquisition, collectively, the "Company") and THE CIT GROUP/COMMERCIAL SERVICES,
INC. ("CIT") as agent (in such capacity, "Agent") for itself and the various
other financial institutions (together with CIT, collectively, the "Lenders")
named in or which hereafter become a party to the Financing Agreement (as
hereafter defined).

                                   BACKGROUND
                                   ----------

     The Company, Agent and Lenders are parties to a Financing Agreement dated
as of September 27, 2002 (as amended, modified, restated or supplemented from
time to time, the "Financing Agreement") pursuant to which Agent and Lenders
provide financial accommodations to Company.

     The Company has requested that Agent and Lenders amend the Financing
Agreement as hereinafter provided, and Agent on behalf of Lenders is willing to
do so on the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Company by Agent and
Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

     1. Definitions. All capitalized terms not otherwise defined herein shall
have the meanings given to them in the Financing Agreement.

     2. Amendments to Financing Agreement. Subject to satisfaction of the
conditions precedent set forth in Section 3 below, the Financing Agreement is
hereby amended as follows:

     (a) Sub-clause (a) of Paragraph 7.10 of Section 7 of the Financing
Agreement is hereby amended by deleting the amount "$15,500,000" set forth in
the table appearing said sub-clause for the fiscal quarter ending June 30, 2005
and inserting the amount "$12,400,000" in said table in lieu thereof.

     (b) Sub-clause (b) of Paragraph 7.10 of Section 7 of the Financing
Agreement is hereby amended by deleting the ratio "1.25 to 1.0" set forth in the
table appearing in

said sub-clause for the fiscal quarter ending June 30, 2005 and inserting "0.35
to 1.0" in said table in lieu thereof

     (c) Sub-clause (e) of Paragraph 7.10 of Section 7 of the Financing
Agreement is hereby amended by deleting the amount "$9,500,000" set forth in the
table appearing in said sub-clause for the calendar months ending May 31, 2005
and June 30, 2005 and inserting the amount (x) "$8,000,000" in said table for
the calendar month ending May 31, 2005 and (y) "$9,000,000" in said table for
the calendar month ending June 30, 2005.

     3. Conditions of Effectiveness. This Amendment shall become effective as of
the date hereof upon satisfaction of the following conditions:

          (a) Agent's receipt of five (5) copies of this Amendment No. 5 duly
executed by the Company and Agent; and

          (b) Agent shall have received such other certificates, instruments,
documents and agreements as may reasonably be required by Agent or its counsel,
each of which shall be in form and substance satisfactory to Agent and its
counsel.

     4. Representations and Warranties. Company hereby represents and warrants
as follows:

          (a) This Amendment No. 5 and the Financing Agreement, as modified
hereby, constitute legal, valid and binding obligations of Company and are
enforceable against Company in accordance with their respective terms.

          (b) Company hereby reaffirms all covenants, representations and
warranties made in the Financing Agreement as amended herein are true and
correct in all material respects and agrees that all such covenants,
representations and warranties, as applicable, shall be deemed to have been
remade as of the effective date of this Amendment No. 5 (except to the extent of
changes resulting from transactions contemplated or permitted by the Financing
Agreement and the other Loan Documents and except to the extent that such
representations and warranties relate expressly to an earlier date).

          (c) No Event of Default or Default has occurred and is continuing or
would exist after giving effect to this Amendment No. 5.

          (d) As of the date hereof, Company has no defense, counterclaim or
offset with respect to the Financing Agreement.

     5. Governing Law. This Amendment No. 5 shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
and shall be governed by and construed in accordance with the laws of the State
of New York without regard to any conflicts of laws principles thereto that
would call for the application of the laws of any other jurisdiction.

                                        2

     6. Headings. Section headings in this Amendment No. 5 are included herein
for convenience of reference only and shall not constitute a part of this
Amendment No. 5 for any other purpose.

     7. Counterparts, Facsimile Signatures. This Amendment No. 5 may be executed
by the parties hereto in one or more counterparts, each of which shall be deemed
an original and all of which taken together shall be deemed to constitute one
and the same agreement. Any signature delivered by a party by facsimile
transmission shall be deemed to be an original signature hereto.

     8. Effect on the Financing Agreement.

          (a) Upon the effectiveness of this Amendment No. 5, each reference in
the Financing Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import shall mean and be a reference to the Financing Agreement as
modified hereby.

          (b) Except as specifically modified hereby, the Financing Agreement,
and all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.

          (c) The execution, delivery and effectiveness of this Amendment No. 5
shall not operate as a waiver of any right, power or remedy of Agent or any
Lender, nor constitute a waiver of any provision of the Financing Agreement, or
any other documents, instruments or agreements executed and/or delivered under
or in connection therewith.

          (d) The security interests and liens and rights securing payment of
the Obligations are hereby ratified and confirmed by the Company in all
respects.

                            [Signature page follows]

                                       3

     IN WITNESS WHEREOF, this Amendment No. 5 has been duly executed as of the
day and year first written above.

                                             CYNTHIA STEFFE ACQUISITION, LLC

                                             By: /s/ Barton Heminover
                                                 -------------------------------
                                                 Name: Barton Heminover
                                                 Title: Chief Financial Officer

                                             S.L. DANIELLE ACQUISITION, LLC

                                             By: /s/ Barton Heminover
                                                 -------------------------------
                                                 Name: Barton Heminover
                                                 Title: Chief Financial Officer

                                             BERNARD CHAUS, INC.

                                             By: /s/ Barton Heminover
                                                 -------------------------------
                                                 Name: Barton Heminover
                                                 Title: Chief Financial Officer

                                             THE CIT GROUP/COMMERCIAL SERVICES,
                                             INC., as Agent and a Lender

                                             By: /s/ Charles M. Carbone
                                                 -------------------------------
                                                 Name: Charles M. Carbone
                                                 Title: Vice President

                            GUARANTOR ACKNOWLEDGEMENT

     Each of the undersigned hereby acknowledges and agrees that,
notwithstanding the execution of the foregoing Amendment No. 5, the consummation
of the amendments and transactions contemplated thereby, (i) all of the terms
and conditions, representations and covenants contained in the undersigned's
respective Guaranties and Security Agreements are and shall remain in full force
and effect in accordance with their respective terms and (ii) the security
interests and liens theretofore granted, pledged and/or assigned under the
Security Agreements as security for the Obligations shall not be impaired,
limited or affected in any manner whatsoever by reason of Amendment No. 5.

                                             BERNARD CHAUS INTERNATIONAL
                                             (HONG KONG), INC.

                                             By: /s/ Barton Heminover
                                                 -------------------------------
                                                 Name: Barton Heminover
                                                 Title: Chief Financial Officer

                                             BERNARD CHAUS INTERNATIONAL
                                             (KOREA), INC.

                                             By: /s/ Barton Heminover
                                                 -------------------------------
                                                 Name: Barton Heminover
                                                 Title: Chief Financial Officer

                                             CHAUS RETAIL, INC.

                                             By: /s/ Barton Heminover
                                                 -------------------------------
                                                 Name: Barton Heminover
                                                 Title: Chief Financial Officer

                                             BERNARD CHAUS INTERNATIONAL
                                             (TAIWAN), INC.

                                             By: /s/ Barton Heminover
                                                 -------------------------------
                                                 Name: Barton Heminover
                                                 Title: Chief Financial Officer
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