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                              BERNARD CHAUS, INC.
                               530 Seventh Avenue
                            New York, New York 10018


                                                                October 15, 2003


Mr. Gregory Mongno
c/o Bernard Chaus, Inc.
530 Seventh Avenue
New York, New York 10018

Dear Mr. Mongno,

         Reference is hereby made to the employment letter agreement (the
"Agreement"), dated as of June 1, 2001 by and between you and Bernard Chaus,
Inc. (the "Company"). You and the Company hereby agree that the Agreement shall
be modified as follows:

         The paragraph opposite the caption "Position" shall be deleted and the
following shall be inserted in its stead:

                  "President (reporting to the Chief Operating Officer). You
                  shall be responsible for special projects, including
                  assistance with customer relationships, as assigned by the
                  Chief Operating Officer from time to time. You shall devote
                  such business time and attention to the business and affairs
                  of the Company as necessary to satisfy your obligations for
                  special projects hereunder."

         The paragraph with the caption "Automobile Allowance" shall be deleted,
effective as of October 31, 2003.

         The paragraph opposite the caption "Benefits" shall be modified to add
the following at the end of such paragraph:

                  "The Company shall not provide benefits to you under the
                  Exec-U-Care medical reimbursement program for any period after
                  October 31, 2003. You shall continue to participate in all
                  other benefit programs, which are currently in place, that are
                  made available to officers of the Company generally."

         The paragraphs opposite the caption "Termination Benefits" shall be
deleted and the following inserted in their stead:

                  "In the event your employment is terminated by the Company
                  without Cause prior to the end of the Term, you shall be paid,
                  in full satisfaction of your rights against the Company for
                  termination of your employment, monthly severance payments
                  equal to your monthly base salary of $50,000 through the end
                  of the Term of the Agreement. For the avoidance of doubt, you
                  shall not be entitled to




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                  any severance payments for a nonrenewal of the Agreement at
                  the end of the Term. Unless you shall have been terminated for
                  Cause, upon your acceptance of a position as employee
                  (including self-employment) or consultant with another entity,
                  prior to the end of the Term, your employment hereunder shall
                  be terminated (to the extent not theretofore terminated
                  pursuant to the preceding sentence) and you shall thereafter
                  be entitled to monthly severance payments for the remainder of
                  the Term equal to $50,000 less the amount of your monthly
                  compensation from any such other employment or consultancy.
                  For purposes of calculating the amount of your monthly
                  compensation from such other employment or consultancy, (i)
                  compensation shall include any payments attributable to the
                  severance period, whether or not paid during the severance
                  period, including any deferred compensation and the pro rated
                  portion of any guaranteed bonus or sign on bonus, and (ii) if
                  you enter into a compensation arrangement with escalating
                  compensation over a period exceeding the severance period,
                  your monthly compensation shall be the average monthly
                  compensation over the term of such compensation arrangement,
                  provided that escalating compensation reflecting year over
                  year increases of not more than 15% shall not require any such
                  averaging. You agree to provide immediate notice to the
                  Company of your acceptance of any such new position, including
                  a copy of the sections relating to compensation in any new
                  employment or consultant agreement (which sections may be
                  delivered "for the Company's "lawyers eyes only"), together
                  with a written representation that there are no other
                  agreements, arrangements or understandings relating to
                  compensation, with respect to such new employment or
                  consultancy. You hereby agree to use reasonable efforts to
                  obtain another position as employee or consultant. In the
                  event your employment is terminated by the Company without
                  Cause, you shall also be paid a bonus payment which shall be
                  equal to the pro rated portion of the bonus, if any, for the
                  year of termination as calculated in accordance with, and on
                  the time frame provided under, the "bonus" section above. If
                  you remain employed until the end of the Term, you shall be
                  entitled to the same bonus, if any, to which you would have
                  been entitled prior to this amendment to the Agreement. In the
                  event your employment is terminated due to Cause, your death
                  or a disability which prevents you from performing your duties
                  for three consecutive months or one hundred eighty (180) days
                  within any two year period, you shall be paid only through the
                  date of termination."



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         An additional paragraph shall be added to the Agreement, to read as
follows:





"WAIVER OF CLAIMS FOR
DIMINISHED RESPONSIBILITY:   You hereby agree to waive, and agree not to assert
                             in any forum, any claims you may have against the
                             Company for any diminishment in responsibility or
                             status that you may have whether prior to or
                             following the date of this amendment to the
                             Agreement. You further agree to waive and not to
                             assert in any forum any claim against the Company
                             for any matter arising from your employment
                             relationship with the Company prior to the date of
                             this amendment to the Agreement. The Company agrees
                             to waive, and not to assert in any forum, any claim
                             against you which it is aware of, for any matter
                             arising from your employment relationship with the
                             Company prior to the date of this amendment to the
                             Agreement. The Company represents that it is not
                             aware of any potential claim against you. Nothing
                             in this paragraph shall affect the right of either
                             party to enforce its rights under the Agreement for
                             any breach occurring on or after the date of this
                             Amendment to the Agreement."


         Except as otherwise provided herein, the Agreement shall continue in
full force and effect.








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         Please indicate your acceptance of the terms of this amendment to the
Agreement by your signature below. Once signed by both parties, this amendment
to the Agreement shall be binding on both parties.

                                              Sincerely,

                                              Bernard Chaus, Inc.

                                              By: /s/ Nicholas DiPaolo
                                                  ------------------------
                                                  Nicholas DiPaolo
                                                  Chief Operating Officer




Accepted and Agreed to
as of the date set forth above:


By: /s/ Gregory Mongno
    -------------------
    Gregory Mongno