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                          STANDARD FORM OF LOFT LEASE
                    THE REAL ESTATE BOARD OF NEW YORK, INC.


AGREEMENT OF LEASE, made as of this 11th day of September 1999, between KAUFMAN
EIGHTH AVENUE ASSOCIATES c/o kaufman Management Company, LLC with offices
located 450 Seventh Avenue, New York, NY 10123 party of the first part,
hereinafter referred to as OWNER, and BERNARD CHAUS, INC. (a New York
corporation) having an office at 800 Secaucus Road, Secaucus, New Jersey 02094
party of the second part, hereinafter referred to as TENANT,

WITNESSETH: Owner hereby leases to Tenant and Tenant hereby hires from Owner
space consisting of the entire sixth (6th) floor in the building known as 519
Eighth Avenue, New York, NY 10011 in the Borough of Manhattan, City of New York,
for the term of ten (10) years (or until such term shall sooner cease and expire
as hereinafter provided) to commence(1) on the 1st day of September nineteen
hundred and ninty-nine, and to end(2) on the 31st day of August two thousand
nine, both dates inclusive, at an annual rental rate

                     of see rental schedule in paragraph #41

which Tenant agrees to pay in lawful money of the United States which shall be
legal tender in payment of all debts and dues, public and private, at the time
of payment, in equal monthly installments in advance on the first day of each
month during said term, at the office of Owner or such other place as Owner may
designate, without any set off or deduction whatsoever, except that Tenant shall
pay the first ________ monthly installment(s) on the execution hereof (unless
this lease be a renewal).

         The parties hereto, for themselves, their heirs, distributees,
executors, administrators, legal representatives, successors and assigns, hereby
covenant as follows:

RENT:       1.   Tenant shall pay the rent as above and as hereinafter provided.

OCCUPANCY:  2.   Tenant shall use and occupy demised premises for

provided such use is in accordance with the certificate of occupancy for the
building, if any, and for no other purpose.

ALTERATIONS: 3. Tenant shall make no changes in or to the demised premises of
any nature without Owner's prior written consent.(3) Subject to the prior
written consent of Owner, and to the provisions of this article, Tenant, at
Tenant's expense, may make alterations, installations, additions or improvements
which are nonstructural and which do not affect utility services or plumbing and
electrical lines, in or to the interior of the demised premises using
contractors or mechanics first(4) approved in each instance by Owner. Tenant
shall, at its expense, before making any alterations, additions, installations
or improvements obtain all permits, approval and certificates required by any
governmental or quasi_governmental bodies and (upon completion) certificates of
final approval thereof and shall deliver promptly duplicates of all such
permits, approvals and certificates to Owner. Tenant agrees to carry and will
cause Tenant's contractors and sub-contractors to carry such workman's
compensation, general liability, personal and property damage insurance as Owner
may(5) require. If any mechanic's lien is filed against the demised premises, or
the building of which the same forms a part, for work claimed to have been done
for, or materials furnished to, Tenant, whether or not done pursuant to this
article, the same shall be discharged by Tenant within thirty days thereafter,
at Tenant's expense, by payment or filing the bond required by law(6) or
otherwise. All fixtures and all paneling, partitions, and like railings and like
installations, installed in the premises at any time, either by Tenant or by
Owner on Tenant's behalf, shall, upon installation, become the property of Owner
and shall remain upon and be surrendered with the demised premises unless
Owner,(7) Nothing in this Article shall be construed to give Owner title to or
to prevent Tenant's removal of trade fixtures, moveable office


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furniture and equipment, but upon removal of any such from the premises or upon
removal of other installations as may be required by Owner, Tenant shall
immediately and at its expense, repair and restore the premises to the condition
existing prior to installation and repair any damage to the demised premises or
the building due to such removal. All property permitted or required to be
removed by Tenant at the end of the term remaining in the premises after
Tenant's removal shall be deemed abandoned and may, at the election of Owner,
either be retained as Owner's property or removed from the premises by Owner, at
Tenant's expense.

REPAIRS: 4. Owner shall maintain and repair the exterior of and the public
portions of the building. Tenant shall, throughout the term of this lease, take
good care of the demised premises including the bathrooms and lavatory
facilities (if the demised premises encompass the entire floor of the building)
and the windows and window frames and, the fixtures and appurtenances therein
and at Tenant's sole cost and expense promptly make all repairs thereto and to
the building, whether structural or non-structural in nature, caused by or
resulting from the carelessness, omission, neglect or (8) Tenant, Tenant's
servants, employees, inverses, or licensees, and whether or not arising from
such Tenant conduct or omission, when required by other provisions of this
lease, including Article 6. Tenant shall also repair all damage to the building
and the demised premises caused by the moving of Tenant's fixtures, furniture or
equipment. All the aforesaid repairs shall be of quality or class equal to the
original work or construction. If Tenant fails, after (9) ten days notice, to
proceed with due diligence to make repairs required to be made by Tenant, the
same may be made by the Owner at the expense of Tenant, and the expenses thereof
incurred by Owner shall be collectible, as additional rent, after rendition of a
bill or statement therefor. If the demised premises be or become infested with
vermin, Tenant shall, at its expense, cause the same to be exterminated. Tenant
shall give Owner prompt notice of any defective condition in any plumbing,
heating system or electrical lines located in the demised premises and following
such notice, Owner shall remedy the condition with due diligence, but at the
expense of Tenant, if repairs are necessitated by damage or injury attributable
to Tenant, Tenant's servants, agents, employees, invitees or licensees as
aforesaid. Except as specifically provided in Article 9 or elsewhere in this
lease, there shall be no allowance to the Tenant for a diminution of rental
value and no liability on the part of Owner by reason of inconvenience,
annoyance or injury to business arising from Owner, Tenant or others making or
failing to make any repairs, alterations, additions or improvements in or to any
portion of the building or the demised premises or in and to the fixtures,
appurtenances or equipment thereof.(10) It is specifically agreed that Tenant
shall not be entitled to any set off or reduction of rent by reason of any
failure of Owner to comply with the covenants of this or any other article of
this lease. Tenant agrees that Tenant's sole remedy at law in such instance will
be by way of any action for damages for breach of contract. The provisions of
this Article 4 with respect to the making of repairs shall not apply in the case
of fire or other casualty with regard to which Article 9 hereof shall apply.

WINDOW CLEANING: 5. Tenant will not clean nor require, permit, suffer or allow
any window in the demised premises to be cleaned from the outside in violation
of Section 202 of the New York State Labor Law or any other applicable law or of
the Rules of the Board of Standards and Appeals, or of any other Board or body
having or asserting jurisdiction.

REQUIREMENTS OF LAW, FIRE INSURANCE: 6. Prior to the commencement of the lease
term, if Tenant is then in possession, and at all times thereafter Tenant shall,
at Tenant's sole cost and expense, promptly comply with all present and future
laws, orders and regulations of all state, federal, municipal and local
governments, departments, commissions and boards and any direction of any public
officer pursuant to law, and all orders, rules and regulations of the New York
Board of Fire Underwriters, or the Insurance Services Office, or any similar
body which shall impose any violation, order or duty upon Owner or Tenant with
respect to the demised premises,(11) if arising out of Tenant's use or manner of
use of the damaged premises of the building. Except as provided in Article 30
hereof, nothing herein shall require Tenant to make structural repairs or
alterations unless Tenant has, by its manner of use of the demised premises or
method of operation therein, violated any such laws, ordinances, orders, rules,
regulations or requirements with respect thereto. Tenant shall not do or permit
any act or thing to be done in or to the demised premises which is contrary to
law, or which will invalidate or be in conflict with public liability, fire or
other policies of insurance at any time carried by or for the benefit of Owner.
Tenant shall not keep anything in the demised premises except as now or
hereafter permitted by the Fire Department, Board of Fire Underwriters, Fire
Insurance Rating Organization and other authority having jurisdiction, and then
only in such manner and such quantity so as not to increase the rate for fire
insurance applicable to the building, nor use the premises in a manner which
will increase the insurance rate for the building or any property located
therein over that in effect prior to the commencement of Tenant's occupancy. If
by reason of failure to comply with the foregoing the fire insurance rate shall,
at the beginning of this lease or at any time thereafter, be higher than it
otherwise would be, then Tenant shall reimburse Owner, as additional rent
hereunder, for that portion of all Fire insurance premiums thereafter paid by
Owner which shall have been charged because of such failure by Tenant. In any
action or proceeding wherein Owner and Tenant are parties, a schedule or
"make-up" or rate for the building or demised premises issued by a body making
fire insurance rates applicable to said premises shall be conclusive evidence of
the facts therein stated and of the several items and charges in the fire
insurance rates then applicable to said premises. Tenant shall not place a load
upon any floor of the demised premises exceeding the floor load per square foot
area which it was designed to carry and which is allowed by law. Owner reserves
the right to prescribe the weight and position of all safes, business machines
and mechanical equipment. Such installations shall be placed and maintained by
Tenant, at Tenant's expense, in settings sufficient, in Owner's (12) judgement,
to absorb and prevent vibration, noise and annoyance.

SUBORDINATION: 7. This lease is subject and subordinate to all ground or
underlying leases and to all


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mortgages which may now or hereafter affect such leases or the real property of
which demised premises are a part and to all renewals, modifications,
consolidations, replacements and extensions of any such underlying leases and
mortgages. This clause shall be self-operative and no further instrument or
subordination shall be required by any ground or underlying lessor or by any
mortgagee, affecting any lease or the real property of which the demised
premises are a part. In confirmation of such subordination, Tenant shall from
time to time (13) execute promptly any certificate that Owner may request.

TENANT'S LIABILITY INSURANCE PROPERTY LOSS, DAMAGE, INDEMNITY: 8. Owner or its
agents shall not be liable for any damage to property of Tenant or of others
entrusted to employees of the building, nor for loss of or damage to any
property of Tenant by theft or otherwise, nor for any injury or damage to
persons or property resulting from any cause of whatsoever nature, unless caused
by or due to the negligence (14) of Owner, its agents, servants or employees;
Owner or its agents shall not be liable for any damage caused by other tenants
or persons in, upon or about said building or caused by operations in connection
of any private public or quasi public work. If at any time any windows of the
demised premises are temporarily closed, darkened or bricked up (or permanently
closed, darkened or bricked up, if required by law) for any reason whatsoever
including, but not limited to Owner's own acts, Owner shall (15) not be liable
for any damage Tenant may sustain thereby and Tenant shall not be entitled to
any compensation therefor nor abatement or diminution of rent nor shall the same
release Tenant from its obligations hereunder nor constitute an eviction. Tenant
shall indemnify and save harmless Owner against and from all liabilities,
obligations, damages, penalties, claims, costs and expenses for which Owner
shall not be reimbursed by insurance, including reasonable attorney's fees,
paid, suffered or incurred as a result of any breach by Tenant, Tenant's agents,
contractors, employees, invitees, or licensees, of any covenant or condition of
this lease, or the carelessness, negligence or improper conduct of the Tenant,
Tenant's agents, contractors, employees, invitees or licensees. Tenant's
liability under this lease extends to the acts and omissions of any sub-tenant,
and any agent, contractor, employee, invitee or licensee of any sub-tenant. In
case any action or proceeding is brought against Owner by reason of any such
claim, Tenant, upon written notice from Owner, will, at Tenant's expense, resist
or defend such action or proceeding by counsel approved by Owner in writing,
such approval not to be unreasonably withheld.(16)(17)

DESTRUCTION, FIRE AND OTHER CASUALTY: 9. (a) If the demised premises or any part
thereof shall be damaged by fire or other casualty, Tenant shall give immediate
notice thereof to Owner and this lease shall continue in full force and effect
except as hereinafter set forth. (b) If the demised premises are partially
damaged or rendered partially unusable by fire or casualty, the damages thereto
shall be repaired by and at the expense of Owner and the rent and other items of
additional rent, until such repair shall be substantially completed, shall be
apportioned from the day following the casualty according to the part of the
premises which is usable. (c) If the demised premises are totally damaged or
rendered wholly unusable by fire or other casualty, then the rent and other
items of additional rent as hereinafter expressly provided shall be
proportionately paid up to the time of the casualty and thenceforth shall cease
until the date when the premises shall have been repaired and restored by Owner
(or sooner reoccupied in part by Tenant then rent shall be apportioned provided
in subsection (b) above), subject to Owner's right to elect not to restore the
same as hereinafter provided. (d) If the demised premises are rendered wholly
unusable or (whether or not the demised premises are damaged in whole or in
part) if the building shall be so damaged that Owner shall decide to demolish it
or to rebuild it, then, in any of such events, Owner may elect to terminate this
lease by written notice to Tenant, given within 90 (18) days after such fire or
casualty, or 30 days after adjustment of the insurance claim for such fire or
casualty, whichever is sooner, specifying a date for the expiration of the
lease, which date shall not be more than 60 (19) days after the giving of such
notice, and upon the date specified in such notice the term of this lease shall
expire as fully and completely as if such date were the date set forth above for
the termination of this lease and Tenant shall forthwith quit, surrender and
vacate the premises without prejudice however, to Owner's rights and remedies
against Tenant under the lease provisions in effect prior to such termination,
and any rent owing shall be paid up to such date and any payments of rent made
by Tenant which were on account of any period subsequent to such date shall be
returned to Tenant. Unless Owner shall serve a termination notice as provided
for herein, Owner shall make the repairs and restorations under the conditions
of (b) and (c) hereof with all reasonable expedition, subject to delays due to
adjustment of insurance claims, labor troubles and causes beyond Owner's
control. After any such casualty, Tenant shall cooperate with Owner's
restoration by removing from the premises as promptly as reasonably possible,
all of Tenant's salvageable inventory and movable equipment, furniture, and
other property. Tenant's liability for rent shall resume five (5) days after
written notice from Owner that the premises are substantially ready for Tenant's
occupancy. (e) Nothing contained hereinabove shall relieve Tenant from liability
that may exist as a result of damage from fire or other casualty.
Notwithstanding the foregoing, including Owner's obligation to restore under
subparagraph (b) above, each party shall look first to any insurance in its
favor before making any claim against the other party for recovery for loss or
damage resulting from fire or other casualty, and to the extent that such
insurance is in force and collectible and to the extent permitted by law, Owner
and Tenant each hereby releases and waives all right of recovery with respect to
subparagraphs (b), (d) and (e) above, against the other or any one claiming
through or under each of them by way of subrogation or otherwise. The release
and waiver herein referred to shall be deemed to include any loss or damage to
the demised premises and/or to any personal property, equipment, trade fixtures,
goods and merchandise located therein. The foregoing release and waiver shall be
in force only if both releasors' insurance policies contain a clause providing
that such a release or waiver shall not invalidate the insurance. If, and to the
extent, that such waiver can be obtained only by the payment of additional
premiums, then the party benefitting from the waiver shall pay such premium
within ten days after written demand or shall be deemed to have agreed that the
party obtaining insurance coverage shall be free of any further obligation under
the provisions hereof with

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respect to waiver of subrogation. Tenant acknowledges that Owner will not carry
insurance on Tenant's furniture and or furnishings or any fixtures or equipment,
improvements, or appurtenances removable by Tenant and agrees that Owner will
not be obligated to repair any damage thereto or replace the same. (f) Tenant
hereby waives the provisions of Section 227 of the Real Property Law and agrees
that the provisions of this article shall govern and control in lieu
thereof.(20)

EMIMENT DOMAIN: 10. If the whole or any part of the demised premises shall be
acquired or condemned by Eminent Domain for any public or quasi public use or
purpose, then and in that event, the term of this lease shall cease and
terminate from the date of title vesting in such proceeding and Tenant shall
have no claim for the value of any unexpired term or said lease. Tenant shall
have the right to make an independent claim to the condemning authority for the
value of Tenant's moving expenses and personal property, trade fixtures and
equipment, provided Tenant is entitled pursuant to the terms of the lease to
remove such property, trade fixtures and equipment at the end of the term and
provided further such claim does not reduce Owner's award.

ASSIGNMENT, MORTGAGE ETC.: 11. Tenant, for itself, its heirs, distributees,
executors, administrators, legal representatives, successors and assigns,
expressly covenants that it shall not assign, mortgage or encumber this
agreement, not underlet, or suffer or permit the demised premises or any part
thereof to be used by others, without the prior written consent of Owner in each
instance.(21) (22) Transfer of the majority of the stock of a corporate Tenant
or the majority partnership interest of a partnership Tenant shall be deemed an
assignment. If this lease be assigned, or if the demised premises or any part
thereof be underlet or occupied by anybody other than Tenant, Owner may, after
default by Tenant, collect rent from the assignee, under-tenant or occupant and
apply the net amount collected to the rent herein reserved, but no such
assignment, underletting. occupancy or collection shall be deemed a waiver of
this covenant, or the acceptance of the assignee, undertenant or occupant as
tenant, or a release of Tenant from the further performance by Tenant of
covenants on the part of Tenant herein contained. The consent by Owner to an
assignment or underletting shall not in any way be construed to relieve Tenant
from obtaining the express consent in writing of Owner to any further assignment
or underletting.(23)

ELECTRIC CURRENT: 12. Rates and conditions in respect to submetering or rent
inclusion, as the case may be, to be added in RIDER attached hereto. Tenant
covenants and agrees that at all times its use of electric current shall not
exceed the capacity of existing feeders to the building or the risers or wiring
installation and Tenant may not use any electrical equipment which, in Owner's
opinion, reasonably exercised, will overload such installations or interfere
with the use thereof by other tenants of the building. The change at any time of
the character of electric service shall in no way make Owner liable or
responsible to Tenant, for any loss, damage or expenses which Tenant may
sustain. (See Exhibit B)

ACCESS TO PREMISES 13. (24) Owner or Owner's agents shall have the right (but
shall not be obligated) to enter the demised premises in any emergency at any
time,(25) and, at other reasonable times, to examine the same and to make such
repairs, replacements and improvements as Owner may deem necessary and
reasonably desirable to any portion of the building or which Owner may elect to
perform in the premises after Tenant's failure to make repairs or perform any
work which Tenant is obligated to perform under this lease, or for the purpose
of complying with laws, regulations and other directions of governmental
authorities. Tenant shall permit Owner to use and maintain and replace pipes and
conduits therein provided, wherever possible, they are within walls or otherwise
concealed. Owner may, during the progress of any work in the demised premises,
take all necessary materials and equipment into said premises without the same
constituting an eviction nor shall the Tenant be entitled to any abatement of
rent while such work is in progress nor to any damages by reason of loss or
interruption of business or otherwise. Throughout the term hereof Owner shall
have the right to enter the demised premises at reasonable hours (26) for the
purpose of showing the same to prospective purchasers or mortgagees of the
building, and during the last six months of the term for the purpose of showing
the same to prospective tenants and may, during said six month period, place
upon the demised premises the usual notices "To Let" and "For Sale" which
notices Tenant shall permit to remain thereon without molestation. If Tenant is
not present to open and permit an entry into the demised premises, Owner or
Owner's agents may enter the same whenever such entry may be necessary or
permissible by master key. If during the last month of the term Tenant shall
have removed all or substantially all of Tenant's property therefrom, Owner may
immediately enter, alter, renovate or redecorate the demised premises without
limitation or abatement of rent, or incurring liability to Tenant for any
compensation and such act shall have no effect on this lease or Tenant's
obligation hereunder.

VAULT, VAULT SPACE, AREA: 14. No Vaults, vault space or area, whether or not
enclosed or covered, not within the property line of the building is leased
hereunder anything contained in or indicated on any sketch, blue print or plan,
or anything contained elsewhere in this lease to the contrary notwithstanding.
Owner makes no representation as to the location of the property line of the
building. All vaults and vault space and all such areas not within the property
line of the building, which Tenant may be permitted to use and/or occupy, is to
be used and/or occupied under a revocable license, and if any such license be
revoked, or if the amount of such space or area be diminished or required by any
federal, state or municipal authority or public utility, Owner shall not be
subject to any liability nor shall Tenant be entitled to any compensation or
diminution or abatement or rent, nor shall such revocation, diminution or
requisition be deemed constructive or actual eviction. Any tax, fee or charge of
municipal authorities for such vault or area shall be paid by Tenant, if used by
Tenant, whether or not specifically leased hereunder.

OCCUPANCY: 15. Tenant will not at any time use or occupy the demised premises in
violation of the certificate of occupancy issued for the building of which the
demised premises are a part. Tenant has inspected the premises and accepts them
as is, subject to the riders annexed hereto with respect to Owner's work, if
any. In any event Owner makes no representation as to the condition of the
premises and

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Tenant agrees to accept the same subject to violations, whether or not of
record. If any governmental license or permit shall be required for the proper
and lawful conduct of Tenant's business, Tenant shall be responsible for and
shall procure and maintain such license or permit.(27)

BANKRUPTCY: 16. (a) Anything elsewhere in this lease to the contrary
notwithstanding, this lease may be cancelled by Owner by sending of a written
notice to Tenant within a reasonable time after the happening of any one or more
of the following events: (1) the commencement of a case in bankruptcy or under
the laws of any state naming Tenant as the debtor (28) or (2) the making by
Tenant of an assignment or any other arrangement for the benefit of creditors
under any state statute. Neither Tenant nor any person claiming through or under
Tenant, or by reason of any statute or order of court, shall thereafter be
entitled to possession of the premises demised but shall forthwith quit and
surrender the premises. If this lease shall be assigned in accordance with its
terms, the provisions of this Article 16 shall be applicable only to the party
then owning Tenant's interest in this lease.

                  (b) It is stipulated and agreed that in the event of the
termination of this lease pursuant to (a) hereof, Owner shall forthwith,
notwithstanding any other provisions of this lease to the contrary, be entitled
to recover from Tenant as and for liquidated damages an amount equal to the
difference between the rental reserved hereunder for the unexpired portion of
the term demised and the fair and reasonable rental value of the demised
premises for the same period. In the computation of such damages the difference
between any installment of rent becoming due hereunder after the date of
termination and the fair and reasonable rental value of the demised premises for
the period for which such installment was payable shall be discounted to the
date of termination at the rate of four percent (4%) per annum. If such premises
or any part thereof be relet by the Owner for the unexpired term of said lease,
or any part thereof, before presentation of proof of such liquidated damages to
any court, commission or tribunal, the amount of rent reserved upon such
reletting shall be deemed to be the fair and reasonable rental value for the
part or the whole of the premises so re-let during the term of the re-letting.
Nothing herein contained shall limit or prejudice the right of the Owner to
prove for and obtain as liquidated damages by reason of such termination, an
amount equal to the maximum allowed by any statute or rule of law in effect at
the time when, and governing the proceedings in which, such damages are to be
proved, whether or not such amount be greater, equal to, or less than the amount
of the difference referred to above.

DEFAULT: 17. (1) If Tenant defaults in fulfilling any of the covenants of this
lease other than the covenants for the payment of rent or additional rent; "or
if this lease be rejected under ss.235 of Title 11 of the U.S. Code (bankruptcy
code);" or if any execution or attachment shall be issued against Tenant or any
of Tenant's property whereupon the demised premises shall be taken or occupied
by someone other than Tenant; if Tenant shall have failed, after five (5) days
written notice, to redeposit with Owner any portion of the security deposited
hereunder which Owner has applied to the payment of any rent and additional rent
due and payable hereunder or failed to move into or take possession of the
premises within thirty (30) days after the commencement of the term of this
lease, then in any one or more of such events, upon Owner serving a written
fifteen (15) days notice upon Tenant specifying the nature of said default and
upon the expiration of said fifteen (15) days, if Tenant shall have failed to
comply with or remedy such default, or if the said default or omission
complained of shall be of a nature that the same cannot be completed cured or
remedied within said fifteen day period, and if Tenant shall not have diligently
commenced during such default within such fifteen (15) day period, and shall not
thereafter with reasonable diligence and in good faith, proceed to remedy or
cure such default, then Owner may serve a written five (5) days' notice of
cancellation of this lease upon Tenant, and upon the expiration of said five (5)
days this lease and the term thereunder shall end and expire as fully and
completely as if the expiration of such five (5) day period were the day herein
definitely fixed for the end and expiration of this lease and the term thereof
and Tenant shall then quit and surrender the demised premises to Owner but
Tenant shall remain liable as hereinafter provided.

               (2) If the notice provided for in (1) hereof shall have been
given, and the term shall expire as aforesaid; or if Tenant shall make default
in the payment of the rent reserved herein or any item of additional rent herein
mentioned or any part of either or in making any other payment herein required;
then and in any of such events Owner may without notice, re-enter the demised
premises either by force or otherwise, and dispossess Tenant by summary
proceedings or otherwise, and the legal representative of Tenant or other
occupant of demised premises and remove their effects and hold the premises as
if this lease had not been made, and Tenant hereby waives the service of notice
of intention to re-enter or to institute legal proceedings to that end. If
Tenant shall make default hereunder prior to the date fixed as the commencement
of an renewal or extension of this lease, Owner may cancel and terminate such
renewal or extension agreement by written notice.

REMEDIES OF OWNER AND WAIVER OF REDEMPTION: 18. In case of any default,
re-entry, expiration and/or dispossess by summary proceedings or otherwise, (29)
(a) the rent and additional rent, shall become due thereupon and be paid up to
the time of such re-entry, dispossess and/or expiration, (b) Owner may re-let
the premises or any part or parts thereof either in the name of Owner or
otherwise, for a term or terms, which may at Owner's option be less than or
exceed the period which would otherwise have constituted the balance of the term
of this lease and may grant concessions or free rent or charge a higher rental
than that in this lease, (c) Tenant or the legal representatives of Tenant shall
also pay Owner as liquidated damages for the failure of Tenant to observe and
perform said Tenant's covenants herein contained, any deficiency between the
rent hereby reserved and or covenanted to be paid and the net amount, if any, of
the rents collected on account of the subsequent lease or leases of the demised
premises for each month of the period which would otherwise have constituted the
balance of the term of this lease. The failure of Owner to re-let the premises
or any part or parts thereof shall not release or affect Tenant's liability

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for damages. In computing such liquidated damages there shall be added to the
said deficiency such expenses as Owner may(30) incur in connection with
re-letting, such as legal expenses, reasonable attorneys' fees, brokerage,
advertising and for keeping the demised premises in good order or for preparing
the same for re-letting. Any such liquidated damages shall be paid in monthly
installments by Tenant on the rent day specified in this lease and any suit
brought to collect the amount of the deficiency for any month shall not
prejudice in any way the rights of Owner to collect the deficiency for any
subsequent month by a similar proceeding. Owner, in putting the demised premises
in good order or preparing the same for re-rental may, at Owner's option, make
such alterations, repairs, replacements, and/or decorations in the demised
premises as Owner, in Owner's (31) sole judgment, considers advisable and
necessary for the purpose of re-letting the demised premises, and the making of
such alterations, repairs, replacements, and/or decorations shall not operate or
be construed to release Tenant from liability hereunder as aforesaid. Owner
shall in no event be liable in any way whatsoever for failure to re-let the
demised premises, or in the event that the demised premises are re-let, for
failure to collect the rent thereof under such re-letting, and in no event shall
Tenant be entitled to receive any excess, if any, of such net rents collected
over the sums payable by Tenant to Owner hereunder. In the event of a breach or
threatened breach by Tenant of any of the covenants or provisions hereof, Owner
shall have the right of injunction and the right to invoke any remedy allowed at
law or in equity as if re-entry, summary proceedings and other remedies were not
herein provided for. Mention in this lease of any particular remedy shall not
preclude Owner from any other remedy, in law or in equity. Tenant hereby
expressly waives any and all rights of redemption granted by or under any
present or future laws. (32)

FEES AND EXPENSES 19: If Tenant shall default in the observance or performance
of any term or covenant on Tenant's part to be observed or performed under or by
virtue of any of the terms or provisions in an article of this lease, after
notice if required and upon expiration of any applicable grace period if any,
(except in an emergency), then, unless otherwise provided elsewhere in this
lease, Owner may (33) perform the obligation of Tenant thereunder. If Owner, in
connection with the foregoing or in connection with any default by Tenant in the
covenant to pay rent hereunder, makes any expenditures or incurs any obligations
for the payment of money, including but not limited to reasonable attorney's
fees, in instituting, prosecuting or defending any action or proceedings, and
prevails in any such action or proceeding, then Tenant will reimburse Owner for
such sums so paid or obligations incurred with interest and costs. The foregoing
expenses incurred by reason of Tenant's default shall be deemed to be additional
rent hereunder and shall be paid by Tenant to Owner within ten (10) days of
rendition or any bill or statement to Tenant therefor. If Tenant's lease term
shall have expired at the time of making of such expenditures or incurring of
such obligations, such sums shall be recoverable by Owner as damages.

BUILDING ALTERATIONS AND MANAGEMENT: 20. Owner shall have the right at any time
without the same constituting an eviction and without incurring liability to
Tenant therefor to change the arrangement and or location of public entrances,
passageways, doors, doorways, corridors, elevators, stairs, toilets or other
public parts of the building and to change the name, number or designation by
which the building may be known. There shall be no allowance to Tenant for
diminution of rental value and no liability on the part of Owner by reason of
inconvenience, annoyance or injury to business arising from Owner or other
Tenant making any repairs in the building or any such alterations, additions and
improvements. Furthermore, Tenant shall not have any claim against Owner by
reason of Owner's imposition of any controls of the manner of access to the
building by Tenant's social or business visitors as the Owner may deem necessary
for the security of the building and its occupants. (34)

NO REPRESENTATIONS BY OWNER: 21. Neither 0wner nor Owner's agents have made any
representations or promises with respect to the physical condition of the
building, the land upon which it is erected or the demised premises, the rents,
leases, expenses of operation or any other matter or thing affecting or related
to the demised premises or the building except as herein expressly set forth and
no rights, easements or licenses are acquired by Tenant by implication otherwise
except as expressly set forth in the provisions of this lease. Tenant has
inspected the building and the demised premises and is thoroughly acquainted
with their condition and agrees to take the same "as is" (35) on the date
possession is tendered and acknowledges that the taking of possession of the
demised premises by Tenant shall be conclusive evidence that the said premises
and the building of which the same form a part were in good and satisfactory
condition at the time such possession was so taken, except as to latent defects.
All understandings and agreements heretofore made between the parties hereto are
merged in this contract, which alone fully and completely expresses the
agreement between Owner and Tenant and any executory agreement hereafter made
shall be ineffective to change, modify, discharge or effect an abandonment of it
in whole or in part, unless such executory agreement is in writing and signed by
the party against whom enforcement of the change, modification, discharge or
abandonment is sought.

END OF TERM: 22. Upon the expiration or other termination of the term of this
lease, Tenant shall quit and surrender to Owner the demised premises, broom
clean, in good order and condition, ordinary wear (36) and damages which Tenant
is not required to repair as provided elsewhere in this lease excepted, and
Tenant shall remove all its property from the demised premises. Tenant's
obligation to observe or perform this covenant shall survive the expiration or
other termination of this lease. If the last day of the term of this Lease or
any renewal thereof, falls on Sunday, this lease shall expire at noon on the
preceding Saturday unless it be a legal holiday in which case it shall expire at
noon on the preceding business day.

QUIET ENJOYMENT: 23. Owner covenants and agrees with Tenant that upon Tenant
paying the rent and additional rent and observing and performing all the terms,
covenants and conditions, on Tenant's part to be observed and performed, Tenant
may peaceably and quietly enjoy the premises hereby demised, subject,
nevertheless, to the terms and conditions of this lease

<PAGE>

including, but not limited to, Article 34 hereof and to the ground leases,
underlying leases and mortgages hereinbefore mentioned.

FAILURE TO GIVE POSSESSION: 24. If Owner is unable to give possession of the
demised premises on the date of the commencement of the term hereof, because of
the holding_over or retention of possession of any tenant, undertenant or
occupants or if the demised premises are located in a building being
constructed, because such building has not been sufficiently completed to make
the premises ready for occupancy or because of the fact that a certificate of
occupancy has not been procured or if Owner has not completed any work required
to be performed by Owner, or for any other reason, Owner shall not be subject to
any liability for failure to give possession on said date and the validity of
the lease shall not be impaired under such circumstances, nor shall the same be
construed in any way to extend the term of this lease, but the rent payable
hereunder shall be abated (provided Tenant is not responsible for Owner's
inability to obtain possession or complete any work required) until after Owner
shall have given Tenant notice that Owner is able to deliver possession in the
condition required by this lease. If permission is given to Tenant to enter into
the possession of the demised premises or to occupy premises other than the
demised premises prior to the date specified as the commencement of the term of
this lease, Tenant covenants and agrees that such possession and/or occupancy
shall be deemed to be under all the terms, covenants, conditions and provisions
of this lease, except the obligation to pay the fixed annual rent set forth in
page one of this lease. The provisions of this article are intended to
constitute "an express provision to the contrary" within the meaning of Section
223_a of the New York Real Property Law. (37)

NO WAIVER: 25. The failure of Owner (38) to seek redress for violation of, or to
insist upon the strict performance of any covenant or condition of this lease or
of any of the Rules or Regulations, set forth or hereafter adopted by Owner,
shall not prevent a subsequent act which would have originally constituted a
violation from having all the force and effect of an original violation. The
receipt by Owner of rent with knowledge of the breach of any covenant of this
lease shall not be deemed a waiver of such breach and no provision of this lease
shall be deemed to have been waived by Owner unless such waiver be in writing
signed by Owner. No payment by Tenant or receipt by Owner of a lesser amount
than the monthly rent herein stipulated shall be deemed to be other than on
account of the earliest stipulated rent, nor shall any endorsement or statement
of any check or any letter accompanying any check or payment as rent be deemed
an accord and satisfaction, and Owner may accept such check or payment without
prejudice to Owner's right to recover the balance or such rent or pursue any
other remedy in this lease provided. All checks tendered to Owner as and for the
rent of the demised premises shall be deemed payments for the account of Tenant.
Acceptance by Owner of rent from anyone other than Tenant shall not be deemed to
operate as an attornment to Owner by the payor of such rent or as a consent by
Owner to an assignment or subletting by Tenant of the demised premises to such
payor, or as a modification of the provisions of this lease. No act or thing
done by Owner or Owner's agents during the term hereby demised shall be deemed
an acceptance of a surrender of said premises and no agreement to accept such
surrender shall be valid unless in writing signed by Owner. No employee of Owner
or Owner's agent shall have any power to accept the keys of said premises prior
to the termination of the lease and the delivery of keys to any such agent or
employee shall not operate as a termination of the lease or a surrender of the
premises.

WAIVER OF TRIAL BY JURY: 26. It is mutually agreed by and between Owner and
Tenant that the respective parties hereto shall and they hereby do waive trial
by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other (except for personal injury or property damage)
on any matters whatsoever arising out of or in any way connected with this
lease, the relationship of Owner and Tenant, Tenant's use of or occupancy of
said premises, and any emergency statutory or any other statutory remedy. It is
further mutually agreed that in the event Owner commences any proceeding or
action for possession including a summary proceeding for possession of the
premises, Tenant will not interpose any counterclaim of whatever nature or
description in any such proceeding including a counterclaim under Article 4
except for statutory mandatory counterclaims.

INABILITY TO PERFORM: 27. This Lease and the obligation of Tenant to pay rent
hereunder and perform all of the other covenants and agreements hereunder on
part of Tenant to be performed shall in no way be affected, impaired or excused
because Owner is unable to fulfill any of its obligations under this lease or to
supply or is delayed in supplying any service expressly or impliedly to be
supplied or is unable to make, or is delayed in making any repair, additions,
alterations or decorations or is unable to supply or is delayed in supplying any
equipment, fixtures or other materials if Owner is prevented or delayed from
doing so by reason of strike or labor troubles or any cause whatsoever beyond
Owner's sole control including, but not limited to, government preemption or
restrictions or by reason of any rule, order or regulation of any department or
subdivision thereof of any government agency or by reason of the conditions
which have been or are affected either directly or indirectly, by war or other
emergency. (38A)

BILLS AND NOTICES: 28. Except as otherwise in this lease provided, a bill
statement, notice or communication which Owner may desire or be required to give
to Tenant, shall be deemed sufficiently given or rendered if, in writing,
delivered to Tenant personally or sent by registered or certified mail addressed
to Tenant at the building of which the demised premises form a part or at the
last known residence address or business address of Tenant or left at any of the
aforesaid premises addressed to Tenant, and the time of the rendition of such
bill or statement and of the giving of such notice or communication shall be
deemed to be the time when the same is delivered to Tenant, or left at the
premises as herein provided. Any notice by Tenant to Owner must be served by
registered or certified mail addressed to Owner at the address first hereinabove
given or at such other address as Owner shall designate by written notice.

WATER CHARGES: 29. If Tenant requires, uses or consumes water for any purpose in
addition to ordinary lavatory purposes (of which fact

<PAGE>

Tenant constitutes Owner to be the sole judge) Owner may (39) install a water
meter and thereby measure Tenant's water consumption for all purposes. Tenant
agrees to pay for water consumed, as shown on said meter as and when bills are
rendered, and on default in making such payment Owner may pay such charges and
collect the same from Tenant, as additional rent. Tenant covenants and agrees to
pay, as additional rent, the sewer rent, charge or any other tax, rent, levy or
charge which now or hereafter is assessed, imposed or a lien upon the demised
premises or the realty of which they are part pursuant to law, order or
regulation made or issued in connection with the use, consumption, maintenance
or supply of water, water system or sewage or sewage connection or system. If
the building or the demised premises or any part thereof is supplied with water
through a meter through which water is also supplied to other premises Tenant
shall pay to Owner, as additional rent, on the first day of each month, ($50.00)
of the total meter charges as Tenant's portion. Independently of and in addition
to any of the remedies reserved to Owner hereinabove or elsewhere in this lease,
Owner may sue and collect any monies to be paid by Tenant or paid by Owner for
any of the reasons or purposes hereinabove set forth.

SPRINKLERS: 30. Anything elsewhere in this lease to the contrary
notwithstanding, if the New York Board of Fire Underwriters or the New York Fire
Insurance Exchange or any bureau, department or official of the federal, state
or city government recommend or require the installation of a sprinkler system
or that any changes, modifications, alterations, or additional sprinkler heads
or other equipment be made or supplied in an existing sprinkler system by reason
of Tenant's business, or the location of partitions, trade fixtures, or other
contents of the demised premises, or for any other reason, or if any such
sprinkler system installations, modifications, alterations, additional sprinkler
heads or other such equipment, become necessary to prevent the imposition of a
penalty or charge against the full allowance for a sprinkler system in the fire
insurance rate set by any said Exchange or by any fire insurance company, Tenant
shall, at Tenant's expense, promptly make such sprinkler system installations,
changes, modifications, alterations, and supply additional sprinkler heads or
other equipment as required whether the work involved shall be structural or
non_structural in nature. Tenant shall pay to 0wner as additional rent the sum
of $50.00, on the first day of each month during the term of this lease, as
Tenant's portion of the contract term price for sprinkler supervisory service.

ELEVATORS, HEAT, CLEANING: 31. (40)Owner shall (a) provide necessary passenger
elevator facilities on business days from 8 a.m. to 6 p.m. and on Saturdays from
8 a.m. to 1 p.m.; (b) if freight elevator service is provided, same shall be
provided only on regular business days Monday through Friday inclusive, and on
those days only between the hours of 9 a.m. and 12 noon and between 1 p.m. and 5
p.m.; (c) furnish heat, (41) water and other services supplied by Owner to the
demised premises, when and as required by law, on business days from 8 a.m. to 6
p.m. and on Saturdays from 8 a.m. to 1 p.m; (d) clean the public halls and
public portions of the building which are used in common by all tenants. Tenant
shall, at Tenant's expense, keep the demised premises, including the windows,
clean and in order, to the reasonable satisfaction of 0wner, and for that
purpose shall employ the person or persons, or corporation (41) approved by
Owner. Tenant shall pay to Owner the (42) cost of removal of any of Tenant's
refuse and rubbish from the building. Bills for the same shall be rendered by
Owner to Tenant at such time as Owner may (43) elect and shall be due and
payable hereunder, and the amount of such bills shall be deemed to be, and be
paid as, additional rent. Tenant shall, however, have the option of
independently contracting for the removal of such rubbish and refuse in the
event that Tenant does not wish to have same done by employees of Owner. Under
such circumstances, however, the removal of such refuse and rubbish by others
shall be subject to such rules and regulations as, in the (44) judgment of
Owner, are necessary for the proper operation of the building. Owner reserves
the right to stop service of the heating, elevator, plumbing and electric
systems, when necessary, by reason of accident, or emergency, or for repairs,
alterations, replacements or improvements, in the judgment of Owner desirable or
necessary to be made, until said repairs, alterations, replacements or
improvements shall have been completed. If the building of which the demised
premises are a part supplies manually operated elevator service, Owner may
proceed diligently with alterations necessary to substitute automatic control
elevator service without in any way affecting the obligations or Tenant
hereunder.

SECURITY: 32. Tenant has deposited with Owner the sum of $48,928.98 as security
for the faithful performance and observance by Tenant of the terms, provisions
and conditions of this lease it is agreed that in the event Tenant defaults in
respect of any of the terms, provisions and conditions of this lease, including,
but not limited to, the payment of rent and additional rent, Owner may use,
apply or retain the whole or any part of the security so deposited to the extent
required for the payment of any rent and additional rent or any other sum as to
which Tenant is in default or for any sum which Owner may expend or may be
required to expend by reason of Tenant's default in respect of any of the terms,
covenants and conditions of this lease, including but not limited to, any
damages or deficiency in the reletting of the premises, whether such damages or
deficiency accrued before or after summary proceedings or other re-entry by
Owner. In the event that Tenant shall fully and faithfully comply with all of
the terms, provisions, covenants and conditions of this lease, the security
shall be returned to Tenant after the date fixed as the end of the Lease and
after delivery of entire possession of the demised premises to Owner. In the
event of a sale of the land and building or leasing of the building, of which
the demised premises form a part, Owner shall have the right to transfer the
security to the vendee or lessee and Owner shall thereupon be released by Tenant
from all liability for the return of such security, and Tenant agrees to look to
the new Owner solely for the return of said security, and it is agreed that the
provisions hereof

<PAGE>
shall apply to every transfer or assignment made of the security to a new Owner.
Tenant further covenants that it will not assign or encumber or attempt to
assign or encumber the monies deposited herein as security and that neither
Owner nor its successors or assigns shall be bound by any such assignment,
encumbrance, attempted assignment or attempted encumbrance.(45)

CAPTION: 33. The Captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope of this lease nor
the intent of any provision thereof.

DEFINITIONS: 34. The term "Owner" as used in this lease means only the owner of
the fee or of the leasehold of the building, or the mortgagee in possession, for
the time being of the land and building (or the owner of a lease of the building
or of the land and building) of which the demised premises form a part, so that
in the event of any sale or sales of said land and building or of said lease, or
in the event of a lease of said building, or of the land and building, the said
Owner shall be and hereby is entirely freed and relieved of all covenants and
obligations of Owner hereunder, and it shall be deemed and construed without
further agreement between the parties or their successors in interest or between
the parties and the purchaser, at any such sale, or the said lessee of the
building, or of the land and building, that the purchaser or the lessee of the
building has assumed and agreed to carry out any and all covenants and
obligations of Owner hereunder. The words "re-enter" and "re-entry" as used in
this lease are not restricted to their technical legal meaning. The term "rent"
includes the annual rental rate whether so expressed or expressed in monthly
installments, and "additional rent." "Additional rent" means all sums which
shall be due to Owner from Tenant under this lease, in addition to the annual
rental rate. The term "business days" as used in this lease, shall exclude
Saturdays, Sundays and all days observed by the State or Federal Government as
legal holidays and those designated as holidays by the applicable building
service union employees service contract or by the applicable Operating
Engineers contract with respect to HVAC service. Wherever it is expressly
provided in this lease that consent shall not be unreasonably withheld, such
consent shall not be unreasonably delayed.

ADJACENT ESCAVATION-SHORING: 35. If an excavation shall be made upon land
adjacent to the demised premises, or shall be authorized to be made, Tenant
shall afford to the person causing or authorized to cause such excavation,
license to enter upon the demised premises for the purpose of doing such work as
said person shall deem necessary to preserve the wall or the building of which
demised premises form a part from injury or damage and to support the same by
proper foundations without any claim for damages or indemnity against Owner, or
diminution or abatement of rent.

RULES AND REGULATIONS: 36. Tenant and Tenant's servants, employees, agents,
visitors, and licensees shall observe faithfully, and comply strictly with, the
Rules and Regulations annexed hereto and such other and further reasonable Rules
and Regulations as Owner or Owner's agents may from time to time adopt. Notice
of any additional rules or regulations shall be given in such manner as Owner
may elect. In case Tenant disputes the reasonableness of any additional Rule or
Regulation hereafter made or adopted by Owner or Owner's agents, the parties
hereto agree to submit the question of the reasonableness of such Rule or
Regulation for decision to the New York office of the American Arbitration
Association, whose determination shall be final and conclusive upon the parties
hereto. The right to dispute the reasonableness of any additional Rule or
Regulation upon Tenant's part shall be deemed waived unless the same shall be
asserted by service of a notice, in writing upon Owner within fifteen (15) days
after the giving of notice thereof Nothing in this lease contained shall be
construed to impose upon Owner any duty or obligation to enforce the Rules and
Regulations or terms, covenants or conditions in any other lease, as against any
other Tenant and Owner shall not be liable to Tenant for violation of the same
by any other tenant, its servants, employees, agents, visitors or licensees.
(46)

GLASS: 37. Owner shall replace, at the expense of the Tenant, any and all plate
and other glass damaged or broken from any cause whatsoever in and about the
demised premises. Owner may insure, and keep insured, at Tenant's expense, all
plate and other glass in the demised premises for and in the name of Owner.
Bills for the premiums therefor shall be rendered by Owner to Tenant at such
times as Owner may elect, and shall be due from, and payable by, Tenant when
rendered, and the amount thereof shall be deemed to be, and be paid, as
additional rent.

ESTOPPEL CERTIFICATE: 38. Tenant, at any time, and from time to time, upon at
least 10 days' prior notice by Owner, shall execute, acknowledge and deliver to
Owner, and/or to any other person, firm or corporation specified by Owner, a
statement certifying that this Lease is unmodified in full force and effect (or,
if there have been modifications, that the same is in full force and effect as
modified and stating the modifications), stating the dates to which the rent and
additional rent have been paid, and stating whether or not there exists any
default by Owner under this Lease, and, if so, specifying each such default.

DIRECTORY BOARD LISTING: 39. (47)Owner shall place upon the directory board in
the lobby of the building, one or more names of persons other than Tenant, such
directory board listing shall not be construed as the, consent by Owner to
assignment or subletting by Tenant to such person or persons.(48)

SUCCESSORS AND ASSIGNS: 40. The covenants, conditions and agreements contained
in this lease shall bind and inure to the benefit of Owner and Tenant and their
respective heirs, distributees, executors, administrators, successors, and
except as otherwise provided in this lease, their assigns. Tenant shall look
only to Owner's estate and interest in the land and building for the
satisfaction of Tenant's remedies for the collection of a judgement (or other
judicial process) against Owner in the event of any default by Owner hereunder,
and no other property or assets of such Owner (or any partner, member, officer
or director thereof, disclosed or undisclosed), shall be subject to levy,
execution or other enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to this lease, the relationship of Owner and
Tenant hereunder, or Tenant's use and occupancy of the demised premises.


<PAGE>



IN WITNESS WHEREOF, Owner and Tenant have respectively signed and sealed this
lease as of the day and year first above written.



Witness for Owner:                   /s/ Eight Avenue Associates
                                     -------------------------------------------



                                     /s/ Stuart Levy, Chief Financial Officer of
----------------------------         -------------------------------------------



Witness for Tenant:                  Bernard Chaus, Inc
                                     -------------------------------------------



/s/ Carife A. Harvey                 132807386
----------------------------         -------------------------------------------
                                     Federal ID #




<PAGE>



CORPORATE TENANT
STATE OF NEW YORK,                   SS.:
COUNTY OF


       On this ______ day of ________, 19__, before me personally came
__________________________ to me known, who being by me duly sworn, did depose
and say that he resides in ________________________________ that he is the
____________________ of ___________________ the corporation described in and
which executed the foregoing instrument, as TENANT; that he knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and that he signed his name thereto by like order.


                                                -------------------------------

INDIVIDUAL TENANT
STATE OF NEW YORK,                   SS.:
COUNTY OF


On this ______ day of ________, 19__, before me personally came
__________________________ to me known and known to me to be the individual
described in and who, as TENANT, executed the foregoing instrument and
acknowledged to me that ___________________ he executed the same.


                                                -------------------------------


                             IMPORTANT - PLEASE READ



          RULES AND REGULATIONS ATTACHED TO AND MADE A PART OF THIS LEASE IN
ACCORDANCE WITH ARTICLE 36.

       1. The sidewalks, entrances, driveways. passages, courts, elevators,
vestibules, stairways, corridors or halls shall not be obstructed or encumbered
by any Tenant or used for any purpose other than for ingress or egress from the
demised premises and for delivery of merchandise and equipment in a prompt and
efficient manner using elevators and passageways designated for such delivery by
Owner. There shall not be used in any space, or in the public hall of the
building, either by any Tenant or by jobbers or others in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber tires
and sideguards. If said premises are situated on the ground floor of the
building, Tenant thereof shall further, at Tenant's expense, keep the sidewalk
and curb in front of said premises clean and free from ice, snow, dirt and
rubbish.

       2. The water and wash closets and plumbing fixtures shall not be used for
any purposes other than those for which they were designed or constructed and no
sweepings, rubbish, rags, acids or other substances shall be deposited therein,
and the expense of any breakage, stoppage, or damage resulting from the
violation of this rule shall be borne by the Tenant who, or whose clerks,
agents, employees or visitors, shall have caused it.

       3. No carpet, rug or other article shall be hung or shaken out of any
window of the building, and no Tenant shall sweep or throw or permit to be swept
or thrown from the demised premises any dirt or other substances into any of the
corridors of halls, elevators, or out of the doors or windows or stairways of
the building and Tenant shall not use keep or permit to be used or kept any foul
or noxious gas or substance in the demised premises, or permit or suffer the
demised premises to be occupied or used in a manner offensive or objectionable
to Owner or other occupants of the buildings by reason of noise, odors, and or
vibrations, or interfere in any way, with other Tenants or those having business
therein, nor shall any bicycles, vehicles, animals, fish, or birds be kept in or
about the building. Smoking or carrying lighted cigars or cigarettes in the
elevators of the building is prohibited.

       4. No awnings or other projections shall be attached to the outside walls
of the building without the prior written consent of Owner.

       5. (49) No sign, advertisement, notice or other lettering shall be
exhibited, inscribed, painted or affixed by any Tenant on any part of the
outside of the demised premises or the building or on the inside of the demised
premises if the same is visible from the outside or the premises without the
prior written consent of Owner, except that the name of Tenant may appear on the
entrance door of the premises. In the event of the violation or the foregoing by
any Tenant, Owner may remove same without any liability and may charge the
expense incurred by such removal to Tenant or Tenants violating this rule.
Interior signs on doors and directory tablet shall be inscribed, painted or
affixed for each Tenant by Owner at the expense of such Tenant, and shall be of
a size, color and style acceptable to Owner.

       6. No Tenant shall mark, paint, drill into, or in any way deface any part
of the demised premises or the building of which they form a part. No boring,
cutting or stringing of wires shall be permitted, except with the prior written
consent of Owner, and as Owner may direct. No Tenant shall lay linoleum, or
other similar floor covering, so that the same shall come in direct contact with
the floor of the demised premises, and, if linoleum or other similar floor
covering is desired to be used an interlining of builder's deadening felt shall
be first affixed to the floor, by a paste or other material, soluble in water,
the use of cement or other similar adhesive material being expressly prohibited.

       7. No additional lock or bolts of any kind shall be placed upon any of
the doors or windows by any Tenant, nor shall any changes be made in existing
locks or mechanism thereof.(50) Each Tenant must, upon the termination of his
Tenancy, restore to Owner all keys of stores, offices and toilet rooms, either
furnished to, or otherwise procured by, such Tenant, and in the event of the
loss of any keys, so furnished, such Tenant shall pay to Owner the cost thereof.

       8. Freight, furniture, business equipment, merchandise and bulky matter
of any description shall be delivered to and removed from the premises only on
the freight elevators and through the service entrances and corridors and only
during hours and in a manner

<PAGE>


approved by Owner. Owner reserves the right to inspect all freight to be brought
into the building and to exclude from the building all freight which violates
any of these Rules and Regulations of the lease of which these Rules and
Regulations are a part.

       9. No Tenant shall obtain for use upon the demised premises ice, drinking
water, towel and other similar services, or accept barbering or bootblacking
services in the demised premises, except from persons authorized by Owner, and
at hours and under regulations fixed by Owner. Canvassing, soliciting and
peddling in the building is prohibited and each Tenant shall cooperate to
prevent the same.

       10. Owner reserves the right to exclude from the building all persons who
do not present a pass to the building signed by Owner. Owner will furnish passes
to persons for whom any Tenant requests same in writing. Each Tenant shall be
responsible for all persons for whom he requests such pass and shall be liable
to Owner for all acts of such persons. Notwithstanding the foregoing, Owner
shall not be required to allow Tenant or any person to enter or remain in the
building, except on business days from 8:00 a.m. to 6:00 p.m. and on Saturdays
from 8:00 a.m. to 1:00 p.m. Tenant shall not have a claim against Owner by
reason of Owner excluding from the building any person who does not present such
pass.

       11. Owner shall have the right to (51) prohibit any advertising by any
Tenant which in Owner's opinion, tends to impair the reputation of the building
or its desirability as a loft building, and upon written notice from Owner,
Tenant shall refrain from or discontinue such advertising.

       12. Tenant shall not bring or permit to be brought or kept in or on the
demised premises, any inflammable, combustible, or explosive, or hazardous
fluid, material, chemical or substance, or cause or permit any odors of cooking
or other processes, or any unusual or other objectionable odors to permeate in
or emanate from the demised premises.

       13. Tenant shall not use the demised premises in a manner which disturbs
or interferes with other Tenants in the beneficial use of their premises.


Address


Premises
===============================================================================

                                       TO

===============================================================================
                                STANDARD FORM OF

                                      LOFT
                                      LEASE

                     THE REAL ESTATE BOARD OF NEW YORK, INC.
                    (C) Copyright 1994. All rights Reserved.
                  Reproduction in whole or in part prohibited.
===============================================================================


Dated                                 19

Rent Per Year

Rent Per Month



Term
From
To


Drawn by
         ---------------------------------------------

Checked by
           -------------------------------------------

Entered by
           -------------------------------------------

Approved by
            ------------------------------------------

===============================================================================

<PAGE>


    RIDER ATTACHED AND MADE OF PART OF LEASE DATED: AS OF September __, 1999

                                    between -

                        KAUFMAN EIGHTH AVENUE ASSOCIATES
                                      Owner

                                      and -

                               BERNARD CHAUS, INC.
                                     Tenant

                    For space on the entire sixth (6th) floor
                            in the building known as
                                519 Eighth Avenue
                                  New York, NY

41. Tenant to pay to Owner base annual rent as follows:

         PERIOD:  9/1/99 - 12/31/99 (FREE RENT) (See Article 48).
         PERIOD:  1/1/2000 - 8/31/2000: $225,000.00 p.a. ($18,750.00 p.m.);
         PERIOD:  9/1/2000 - 8/31/2001: $231,750.00 p.a. ($19,312.00 p.m.);
         PERIOD:  9/1/2001 - 8/31/2002: $238,702.50 p.a. ($19,891.87 p.m.);
         PERIOD:  9/1/2002 - 8/31/2003: $245,863.57 p.a. ($20,488.63 p.m.);
         PERIOD:  9/1/2003 - 8/31/2004: $253,239.47 p.a. ($21,103.29 p.m.);
         PERIOD:  9/1/2004 - 8/31/2005: $260,836.65 p.a. ($21,736.39 p.m.);
         PERIOD:  9/1/2005 - 8/31/2006: $268,661.75 p.a. ($22,388.48 p.m.);
         PERIOD:  9/1/2006 - 8/31/2007: $276,721.60 p.a. ($23,060.13 p.m.);
         PERIOD:  9/1/2007 - 8/31/2008: $285,023.25 p.a. ($23,751.94 p.m.);
         PERIOD:  9/1/2008 - 8/31/2009: $293,573.95 p.a. ($24,464.49 p.m.);

         Notwithstanding in the foregoing rent schedule, in the event that
Owner's Work (hereinafter defined) is not substantially complete and possession
of the Demised Premises is not delivered on September 1, 1999, then, in such
event the rent schedule and each twelve (12) month rental period shall be
adjusted to reflect the 12 month period commencing on the possession date and
ending one (1) year thereafter except that the last rental payment period shall
expire August 31, 2009.

                   (plus additional rental hereafter provided)

42. REAL ESTATE TAX: The term Real Estate Taxes shall mean all the Real Estate
Taxes and assessments, special or otherwise, levied, assessed or imposed by the
federal, state or local governments against or upon the building of which the
Demised Premises form a part or the land upon which it is erected, and any
improvements or additions to the land or building whether existing now, or in
the future. If due to a future change in the method of taxation, any franchise,
income, profit or other tax, or other payment, shall be levied against Owner in
whole or in part in substitution for or in lieu of any tax which would otherwise
constitute a Real Estate Tax, such franchise, income, profit, or other tax or
payment, shall be deemed to be Real Estate Taxes for purposes hereof.

         In the event that the Real Estate Taxes levied on the property of which
the demised premises are a part shall for any year after the fiscal year
1999/2000 be in excess of the Real Estate Taxes levied against the said property
for the fiscal year 1999/2000 hereafter known as the "base tax year", the Tenant
shall pay to the Owner as additional rent an amount equal to 4% ("Tenant's
Share") of such excess, if any, which has been computed, without representation,
by dividing the rentable area of the Demised Premises by the rentable area of
the Building. In addition, Tenant shall pay for each and every tax year, Tenant'
s share of the business improvement district or special assessment taxes if any,
levied against Owner for the district in which the building is located. The
submission of a duplicate original tax bill of the Owner shall be deemed
conclusive evidence of the amount of the taxes paid by the Owner for each year
and shall be the basis for the computation of any excess so to be paid by the
Tenant. Such excess in the case of Real Estate Taxes, and Tenant's share of the

<PAGE>

business improvement district taxes shall each be payable within ten (10)
business days of receipt of the bill. The obligation to make any payments of
additional rent pursuant to this Article shall survive the expiration or other
termination of this Lease.

#43. OWNER'S WORK: Owner hereby agrees at own cost and expense to do the work
("Owner's Work") specified in the work letter annexed hereto and made a part
hereof as Exhibit C.

#44. AIR CONDITIONING: The Owner hereby grants the Tenant permission to use the
air-conditioning unit(s) to be installed in the demised premises, which
air-conditioning unit(s) are the property of the Owner and may be used by the
Tenant during its occupancy of the demised premises. It is understood and agreed
that Tenant will execute and comply with all the laws, rules, orders, ordinances
and regulations of any governmental and quasi-governmental Bureaus and
Departments having jurisdiction thereover, and of the New York Board of Fire
Underwriters and the New York Fire Insurance Rating Organization.

         The Tenant covenants and agrees to carry Liability insurance and water
damage legal liability insurance with respect to the said air_conditioning
unit(s) throughout the term of the within Lease.

         The Tenant further covenants and agrees that at the end or other
expiration of the term, said air-conditioning unit(s) shall remain the property
of the Owner and may not be removed by Tenant without the permission of Owner.

         Owner represents that air-conditioning unit(s) are in good working
order on commencement of lease. Thereafter the Tenant to maintain service
contract and maintenance with service contractor to be approved by Landlord,
such approval not to be unreasonably withheld or delayed.

Any and all central airconditioning unit(s) including duct work and window
air_conditioning unit(s) installed by the Tenant or the Owner, shall become the
property of the Owner and may not be removed unless the Owner grants specific
permission to the Tenant to remove said central airconditioning unit(s) or
window air conditioning unit(s).

#45. FIXTURES, etc. All hanging fluorescent light fixtures and any other light
fixtures installed by the Tenant or Owner shall become the property of the Owner
and shall remain within the demised premises at the termination of this Lease
unless the Owner grants specific permission to the Tenant to remove said light
fixtures.

#46. INSURANCE: Tenant at its own cost and expense, shall maintain at all times
from the date that it shall first enter the premises for the mutual benefit of
Owner and Tenant comprehensive public liability insurance against claims for
personal injury or death or property damage occurring in or about the Demised
Premises or resulting directly or indirectly from any change, alteration,
construction, improvement or repair, or any installation thereat made by or on
behalf of the Tenant, with $1,000,000 combined single limit. The insurance
required hereunder shall be effected valid and enforceable policies issued by
insurance companies of recognized responsibility, authorized and licensed to do
business in the State of New York.

         Prior to Tenant's entry into the Demised Premises and at hereafter no
less than thirty (30) days prior to the expiration date of any expiring policy,
originals of each such policy or renewal policy, as the case may be, shall be
delivered by Tenant to Owner with proof of payment of the respective premiums
therefor. Each such policy or renewal policy shall contain a requirement that
the same may not be cancelled without giving written notice to Owner at least
fifteen (15) days prior to the proposed date of cancellation.

         In the event Tenant fails after ten (10) days prior written notice and
Tenant's failure to cure such default, to furnish any such policy on the date
therefor, Owner may obtain the same, all at Tenant's expense, and the cost
thereof shall be deemed additional rent and shall be paid within ten (10) days
after the rendition of a bill therefor.

#47. INTENTIONALLY OMITTED.

<PAGE>


#48. CONCESSION: Tenant shall be granted a rent abatement period for the first
four (4) months following possession and substantial completion of Owner's Work.
However, Tenant shall be made responsible for the payment of additional rent and
all other charges including electricity commencing immediately upon Tenant
having access to the demised premises.

#49. HOLDOVER: If the Demised Premises are not surrendered and vacated as and at
the time required by this lease whether it be a natural expiration or an
expiration due to default (time being of the essence), Tenant shall be liable to
Owner for (a) all losses, costs, liabilities and damages which owner may incur
by reason thereof, including without limitation, reasonable attorneys fees, and
Tenant shall indemnify, defend and hold harmless Owner against all claims made
by any succeeding tenants against Owner or otherwise arising out of or resulting
from the failure of tenant to timely surrender and vacate the Demised Premises
in accordance with the provisions of this Lease, and (b) per diem use and
occupancy with respect to the Demised Premises equal to 150% times the fixed
rent and additional rent payable under this Lease for the last year of the term
of this Lease (which amount Owner and Tenant presently agree is the minimum to
which Owner would be entitled, is presently contemplated by them as being fair
and reasonable under such circumstances and is not a penalty). In no event,
however, shall this Article be construed as permitting Tenant to hold over in
possession of the Demised Premises after the expiration or termination of the
term of this Lease.

#51. The submission of this Lease to Tenant shall not be construed as an offer,
nor shall Tenant have any rights with respect thereto unless and until Owner
shall execute a copy of this Lease and deliver the same to Tenant. Until such
execution and delivery, any action taken or expense incurred by Tenant shall be
at its sole risk and account.

#52.              FOOTNOTES TO PRINTED  PORTION OF LOFT LEASE

1.   subject to substantial completion of Owner's Work provided in Article 43

2.   nevertheless

3.   which consent in the case of non-structural changes costing
     $25,000 or less shall not be required and all other
     non-structural alterations shall be subject to Owner's consent
     not to be unreasonably withheld or delayed.

4.   reasonably

5.   reasonably

6.   settlement, payment

7.   at the time Owner approves Tenant's plans and elects to require Tenant to
     remove any non-building standard installations i.e. items such as raised
     flooring and supplementary airconditioning etc.

8.   wilful misconduct

9.   thirty (30)

10.  Except as hereinafter provided,

11.  solely when arising out of Tenant's manner of use of the Demised Premises
     (including Tenant's alterations)

12.  reasonable

13.  Owner agrees that it shall use reasonable efforts (at no cost or expense to
     Owner) to obtain and deliver to Tenant, as to the existing mortgage and
     mortgages hereafter made covering the real property of which the Demised
     Premises form a part, and/or any renewal, modification, consolidation,
     replacement and extension of the existing

<PAGE>


     mortgage, or future mortgages, non-disturbance agreements in recordable
     form (or such agreement shall be contained in such mortgage or any renewal,
     modification, consolidation, extension or replacement thereof) from the
     holder of any such mortgage, providing in substance that provided Tenant
     shall have entered into possession and occupancy of the Demised Premises
     and commenced payment of fixed rent and additional rent hereunder, and so
     long as Tenant is not in default in its obligations for the payment of
     fixed rent and additional rent and in the performance of the other terms,
     covenants and conditions to be performed on its part under this Lease, its
     possession of the Demised Premises will not be disturbed during the term
     hereof, notwithstanding the foreclosure of any such mortgage, and Tenant
     will not be named as a party defendant in any foreclosure proceedings
     brought for the recovery of possession, it being hereby covenanted and
     agreed to by Tenant that the holder of any such mortgage, or anyone
     claiming by, through or under said holder shall not be:

     (a)  liable for any act or omission for any prior Owner (including Owner),
          or

     (b)  subject to any offsets or defenses which Tenant might have against any
          prior Owner (including Owner), or

     (c)  bound by any fixed rent or additional rent or other charges which
          Tenant might have paid for more than the current month to a prior
          Owner (including Owner), or

     (d)  bound by any modification of this Lease made without the consent of
          such mortgagee. The inability of Owner to obtain such agreement shall
          be deemed a default on Owner's part of its obligations hereunder, or
          impose any claim in favor of Tenant against Owner by reason thereof,
          or affect the validity of this Lease.

          Tenant agrees to (i) execute and deliver to such mortgagee a
          nondisturbance and attornment agreement in form and substance
          customarily adopted by such mortgagee and (ii) reimburse Owner for
          all reasonable expenses incurred by Owner in connection therewith,
          including legal expenses.

14.  or willful misconduct, omissions or carelessness

15.  except as hereinafter provided

16.  or delayed

17.  Notwithstanding any other provision of this lease, in the event that
     substantially all of the Demised Premises shall become unusable or
     untenable by Tenant due to the performance by Owner of repairs,
     additions, alterations, replacements, decorations or improvements or due
     to interruption of services provided by Owner or Owner's failure to
     provide access to the Demised Premises required to be provided to Tenant
     under this lease and not due to any act or omission of Tenant or Tenant's
     employees, agents, contractors or licensees (the "Affected Space"), which
     condition (an "Interruption Condition") shall continue for a period of
     ten (10) consecutive business days after Tenant shall have notified Owner
     of the same, then, Tenant shall be entitled to abate the payment of Fixed
     Rent and Additional Rent with respect to the Affected Space to the extent
     not actually used or occupied by Tenant, if applicable, due under this
     lease for the period commencing on the eleventh (11th) business day of
     the existence of such condition and ending on the date.

18.  thirty (30)

19.  thirty (30)

<PAGE>


20.  If the building or the Demised Premises shall be so damaged by fire or
     other casualty so as to interfere substantially with the use of the
     Demised Premises by Tenant, and it shall have been determined by Owner,
     no later than thirty (30) days from the occurrence of the event, that
     such damage can not be repaired within three (3) months from the date of
     the occurrence of the event, then Tenant shall have the right, by giving
     written notice to Owner to such effect within fifteen (15) days after it
     has been determined that the damage can not be restored or repaired
     within the aforesaid period, to terminate this Lease and its obligations
     hereunder, in which event the fixed rent and additional rent shall be
     prorated to the date of the occurrence of such damage.

21.  which consent shall not be unreasonably withheld or delayed.

22.  Except as hereinafter provided,

23.  Tenant may, without Owner's consent, but upon prior written notice to
     Owner, assign or transfer its entire interest in this Lease and the
     leasehold estate hereby created or sublet the Demised Premises to a
     successor corporation of Tenant (as hereinafter defined); provided,
     however, that (i) Tenant shall not be in default in any of the terms of
     this Lease without applicable cure period, and (ii) the proposed
     subtenant or assignee shall not be entitled, directly or indirectly, to
     diplomatic or sovereign immunity and shall be subject to the service of
     process in, and the jurisdiction of the courts of, New York State. A
     "successor corporation", as used in this Section shall mean (a) a
     corporation into which or with which Tenant, its corporate successors or
     assigns, is merged or consolidated, in accordance with applicable
     statutory provisions for the merger or consolidation of corporations,
     provided that by operation of law or by effective provisions contained in
     the instruments of merger or consolidation, the liabilities of the
     corporations participating in such merger or consolidation are assumed by
     the corporation surviving such merger or consolidation, or (b) a
     corporation acquiring this lease and the term hereof and the estate
     hereby granted, the goodwill and all or substantially all of the other
     property and assets (other than capital stock of such acquiring
     corporation) of Tenant, its corporate successors or assigns, and assuming
     all or substantially all of the liabilities of Tenant, its corporate
     successors and assigns, or (c) any corporate successor to a successor
     corporation becoming such by either of the methods described in
     subdivisions (a) and (b) above; provided that, immediately after giving
     effect to any such merger or consolidation, or such acquisition and
     assumption, as the case may be, the corporation surviving such merger or
     created by such consolidation or acquiring such assets and assuming such
     liabilities, as the case may be, shall have assets, capitalization and a
     net worth, as determined in accordance with generally accepted accounting
     principles, at least equal to the assets, capitalization and net worth,
     similarly determined, of Tenant, its corporate successors or assigns,
     immediately prior to such merger or consolidation or such acquisition and
     assumption, as the case may be.

24.  Access to the Demised Premises shall be available to Tenant seven (7)
     days a week, 24 hours per day it being understood and agreed that
     services will only be provided by Owner as set forth in Article 31 and
     that any such access on non-business days or hours shall be subject to
     Owner's reasonable security requirements.

25.  upon reasonable prior notice to Tenant

26.  upon reasonable prior notice to Tenant

27.  Annexed to this Lease as Exhibit A is a true and correct copy of the
     existing Certificate of Occupancy for the Building.

28.  not dismissed in ninety (90) days

29.  adjudicated by a court of competent jurisdiction

<PAGE>


30.  reasonably

31.  reasonable

32.  In no event shall Owner have any lien on Tenant's personal property in the
     event of Tenant's default

33.  upon ten (10) days prior written notice and Tenant's failure to cure same
     within same ten (10) day cure period

34.  Owner shall exercise all commercial reasonable efforts under this Article
     to minimize interference or disruption of Tenant's business conducted at
     the Demised Premises

35.  Except for Owner's Work (hereinafter defined),

36.  and tear and damage by the elements

37.  Notwithstanding the foregoing provisions of this Lease, in the event that
     Landlord fails to deliver possession of the Demised Premises with Owner's
     Work substantially complete on or prior to December 31, 1999 then, Tenant
     shall have the right to terminate this Lease within the following ten
     (10) days by giving notice thereof to Landlord. Upon receipt of such
     notice by Landlord, all liability between the parties hereto shall be
     extinguished, except that Landlord shall return to Tenant any monies
     deposited with Landlord pursuant to this Lease.

38.  or Tenant (other than the covenant to pay rent)

38a. see footnote 17

39.  at Owner's sole cost and expense

40.  As long as this Lease is in full force and effect

41.  hot and cold

42.  reasonable

42A. reasonably

43.  reasonably

44.  reasonable

45.  Owner agrees to deposit said security in the segregated interest
     thereinafter FDIC Insure Bank account. Interest on such security shall be
     remitted to Tenant annually less the 1% per annum Administration Expense
     allowed Owner pursuant to the General Obligations Law.

46.  Rules and regulations shall be enforced in a non-discriminatory manner as
     and against Tenant

47.  No more than once annually Tenant may request Owner to execute an
     estoppel certificate substantially the form set forth above

48.  Tenant shall be entitled to no less than 4% of the available listings on
     the Building directory for the listings of the name to Tenant and its
     officers and employees

49.  Except as hereinafter expressly provided

<PAGE>


50.  without giving Owner a key thereto

51.  reasonably




                                    KAUFMAN EIGHTH AVENUE ASSOCIATES
                                    --------------------------------


                                    BY: /s/ Kaufman Eight Avenue Associates L.S.
                                    --------------------------------------------


                                    BERNARD CHAUS, INC.
                                    -------------------



                                    BY: /s/ Stuart S. Levy L.S.
                                        -----------------------
                                    Chief Financial Officer


<PAGE>


                                    EXHIBIT B
                                    ---------

         The Tenant agrees to purchase from Consolidated Electric Meter Co.,
Inc., hereinafter referred to as the Meter Company supplying electric current to
tile building, all electric current consumed, used or to be used in the Demised
Premises, and all bulbs, lamps or electric fixtures and to pay for the
installation thereof at industry competitive market rates. The amount to be paid
by the Tenant for current consumed shall be determined by an existing meter.
Bills for current consumed shall be rendered by the Meter Company to the Tenant
at such times as the Meter Company may elect. The Meter Company shall have the
right, in the event of any non-payment by the Tenant of such bill within thirty
(30) days after rendition, to discontinue and cut off the use of electric
current to the Tenant upon ten (10) days additional notice and Tenant's failure
to pay such amounts with said additional ten (10) day period and without
releasing the Tenant from any liability under this lease, and without the Owner
or said Meter Company incurring any liability for any damage caused by such
discontinuance of service. The Tenant further agrees, on demand by the Meter
Company, to sign an application for electric service and to place with the Meter
Company, a cash deposit sufficient to secure a two (2) month payment for the
peak current consumed by the Tenant in the Demised Premises, as estimated by the
Meter Company. Tenant agrees to pay for all electric current consumed, at a rate
hereinafter set forth.

         In the event the sale of the electric current in the building
containing the Demised Premises is hereafter prohibited and/or regulated by any
law hereinafter enacted, or by any order or ruling of the Public Service
Commission of the State of New York, or by any judicial decision of any
appropriate court, than the Meter Company, by reason of such prohibition, and/or
regulation and/or for any other reason whatsoever, may, at its option and in its
sole and absolute discretion, elect to terminate the practice of submetering in
the building containing the Demised Premises; and upon such election, the Tenant
will, upon notice from the Meter Company, apply within five (5) days thereafter
to the appropriate Public Service Corporation servicing the building containing
the Demised Premises for electric service, and comply with all the rules and
regulations of such Public Service Corporation, and all costs associated with
and pertaining thereto, and the Meter Company shall be relieved of any further
obligation to furnish electric current to the Tenant. In such case, Landlord
shall permit Tenant to use the existing risers and feeders. No current shall be
furnished until the equipment of the Tenant has been approved by the proper
public authorities, the New York Board of Fire Underwriters and the New York
Fire Insurance Rating Organization or similar organization having jurisdiction,
and no changes shall be made in such equipment without the consent of the Meter
Company. The Tenant shall make no changes in and/or additions to the electrical
equipment, wiring and/or appliances in the Demised Premises, without the written
consent of the Meter Company first had and obtained. Rigid conduit only will be
allowed by the Owner for exposed work.

         Notwithstanding anything to the contrary contained herein, Tenant's
base rate for electricity above, shall be Con Edison's Service Classification #4
plus 10%.


<PAGE>


                                    EXHIBIT C
                                    ---------

September __, 1999


Bernard Chaus, Inc.


Re:   Premises -  519 Eighth Avenue
                  Entire 6th Floor
                  New York, NY 10018


Gentlemen:

Confirming our understanding with reference to the Lease this day executed by
you (the "Tenant") with us (the "Owner"), for space consisting of the entire
sixth (6th) floor in the building known as 519 Eighth Avenue, New York, NY
10018, we hereby agree at our own cost and expense to do the following work
("Owner's Work") in accordance with all applicable laws and building standards:

1.   Supply and install in good working order three (3) new central
     air-conditioning units (but not duct work) (units only, no ducts), 12
     tons each for a total capacity of 36 tons required to cool the Demised
     Premises, including, without limitation, any alterations required to be
     made to the window openings in connection with installation of the
     air-conditioning units. Units will be hung from the ceiling and shall be
     placed in locations to be mutually agreed upon by Owner and Tenant. In
     the event that the radiators located in the Demised Premises do not
     function, Owner shall install a steam coil, in lieu of the electric duct
     heaters. Additionally, in such case, the system shall be capable of
     performing as a primary heat source.

2.   Replace missing window on northeast comer of floor with building standard
     window similar to other windows on the floor;

3.   Deliver bathrooms clean and in good working order;

4.   Deliver sprinklers in good working order;

5.   Supply water and exhaust feed for washing and drying machines and 220
     volt dedicated outlet; and

6.   Owner represents that demised premises has an electrical capacity of 600
     amps.

It is also understood the aforesaid work will be commenced after execution of
said Lease. You do hereby grant us an irrevocable license to enter the premises
for the purpose of doing the aforesaid work. It is also understood you are to
receive no abatement to property, for interruption or loss of business, or
disturbance in possession resulting directly or indirectly from the doing of the
aforesaid work by us. It is also understood that the doing of said work is
subject to strikes/and or lockouts and all other causes beyond the Owner's
control.


Very truly yours,


KAUFMAN EIGHTH AVE ASSOCIATES



By: /s/ Kaufman Eight Avenue Associates L.S.
    -----------------------------------

ACCEPTED AND AGREED:

BERNARD CHAUS, INC.

By: /s/ Stuart S. Levy   L.S.
    ------------------
Chief Financial Officer