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                               BERNARD CHAUS, INC.
                                  1410 Broadway
                            New York, New York 10018


                                                   November 5, 1999


Ms. Ivy Karkut
137 East 36th Street
Apt. 7G
New York, NY 10016

Dear Ms. Karkut:

     We are pleased to offer you employment with Bernard Chaus, Inc. (the
"Company") commencing November 29, 1999 (the "Commencement Date"; if employment
commences on a day other than November 29, 1999, the Commencement Date shall be
the actual date of commencement), on the terms set forth below:

POSITION:           President (reporting to Chief Executive Officer and Board of
                    Directors). You shall devote all of your business time and
                    attention to the business and affairs of the Company
                    consistent with your position with the Company.

TERM:               November 29, 1999 through November 29, 2002

SALARY:             $800,000 per year from the Commencement Date through June
                    30, 2000; $900,000 per year from July 1, 2000 to June 30,
                    2001; $1,000,000 per year from July 1, 2001 to November
                    29, 2002.

CASH SIGN-ON        $250,000 payable in cash within thirty (30) days of the
BONUS:              Commencement Date.

RESTRICTED STOCK:   Common stock of the Company ("Common Stock") valued
                    at $250,000 (valued based on the closing price of the
                    Common Stock on the Commencement Date (the "Commencement
                    Date Price")), subject to forfeiture if you cease to be
                    employed by the Company (except by reason of a termination
                    by the Company without cause) on or prior to July 1, 2000.
                    Such forfeiture restrictions shall be lifted on July 1,
                    2000.

ANNUAL BONUS:       For each fiscal year of the Company during the term, if
                    profit goals established by the Board of Directors for such
                    year are achieved, 2 1/2 % of net income of Company as
                    determined in accordance with Company's audited financial
                    statements. Your minimum bonus for fiscal year ending June
                    30, 2000 shall be $250,000. Each annual bonus shall be
                    payable within thirty (30) days of completion of the audit
                    if you were employed at the end of the applicable fiscal
                    year.


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Ms. Ivy Karkut
November 5, 1999
Page 2

BOARD MEMBERSHIP:   You will be nominated to serve as a member of the Board of
                    Directors during each year of the term of this Agreement.
                    You will be deemed to have resigned if your employment is
                    terminated for any reason.

TRAVEL:             You will be expected to travel to key accounts of the
                    Company throughout the United States. You may travel first
                    class at your discretion.

AUTOMOBILE
ALLOWANCE:          $2,000 per month.

BENEFITS:           Participant in the Company's 401(k) plan. Health insurance,
                    including family coverage (with a deductible not to exceed
                    $1,000 per plan year). Dental coverage up to $5,000 per plan
                    year (self-insured; no deductible). Eye care up to $2,500
                    per plan year (self-insured; no deductible). Term life
                    insurance equal to two (2) times base salary, subject to
                    your being in good health and not rated an insurance risk
                    based upon any past medical history at the time the
                    insurance is obtained. Long-term disability coverage equal
                    to 60% of salary, up to a maximum of $10,000 a month.
                    Coverage under the Company's directors and officers
                    liability insurance policy and other policies available to
                    executive officers of the Company generally, including the
                    Executive Medical Plan which covers your deductibles,
                    premiums, co-payments and most other amounts not covered
                    under the basic health insurance plan with current plan
                    limits up to $10,000 per occurrence and $100,000 annually,
                    per person.

VACATION:           Four weeks paid vacation, not to be taken more than two
                    weeks at a time and not to be carried over from year to year

OPTIONS:            Options for 675,000 shares (approximately 2 1/2% of the
                    outstanding shares) of Common Stock at an exercise price
                    equal to the Commencement Date Price; options to vest in
                    equal annual increments of 25% a year over four years. The
                    option grant (to the extent an amendment of the Company's
                    Stock Option Plan is required to increase the number of
                    shares available for grant thereunder) shall be subject to
                    shareholder approval. In the event your employment is
                    terminated without cause, any options which would have
                    vested at the anniversary of the Commencement Date next
                    following the date of termination shall vest immediately,
                    any unvested options shall be forfeited and you shall have
                    thirty (30) days from the termination date to exercise
                    vested options. In the event of termination for any other
                    reason, other than a change in control, all unvested options
                    shall be forfeited and you shall have thirty


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Ms. Ivy Karkut
November 5, 1999
Page 3

                    (30) days from the termination date to exercise vested
                    options. All options shall vest immediately upon a change in
                    control. Your options shall otherwise be subject to the
                    terms of the Company's Stock Option Plan.

TERMINATION
BENEFITS:           In the event your employment is terminated by the Company
                    without cause, other than due to your death or disability
                    and other than following a change in control, you shall be
                    paid, in full satisfaction of your rights against the
                    Company for termination of your employment, non-competition
                    payments equal to two years' base salary, payable in
                    twenty-four monthly installments, if such termination occurs
                    in the first twelve months of the term, and twelve months'
                    base salary, payable in twelve monthly installments, if such
                    termination occurs during the remainder of the term. As
                    further non-competition payments, your automobile allowance
                    and medical insurance will also remain in effect during the
                    period of monthly installments of non-competition payments
                    that are made to you. The foregoing payments shall terminate
                    immediately upon your acceptance of a position as employee
                    (including self-employment) or consultant with another
                    entity, and you agree to provide immediate notice to the
                    Company of your acceptance of any such position. 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 180 days within any
                    two year period, you shall be paid only through the date of
                    termination.

CAUSE               Conviction of or plea of guilty or nolo contendere to a
                    felony; gross negligence or willful misconduct in performing
                    your duties resulting in material harm to the Company or
                    material diminution in the value of the Common Stock;
                    failure to comply with this Agreement in any material
                    respect or failure to carry out responsibilities assigned by
                    management or the Board of Directors after, in either case,
                    notice of such failure and a 30 day cure period; commission
                    of fraud, theft against or embezzlement from the Company.

CHANGE IN CONTROL:  The Company shall be merged or consolidated with an
                    unaffiliated entity resulting in a change in a majority of
                    the Board of Directors or the Company shall have sold
                    substantially all of its assets to an unaffiliated entity;
                    the acquisition by any person or group of beneficial
                    ownership (as such terms are defined under Regulation 13D of
                    the rules and regulations adopted under the Securities
                    Exchange Act of 1934, as amended) of more than 50% of the
                    Company's then outstanding common stock resulting in a
                    change in a majority of the Board of Directors.


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Ms. Ivy Karkut
November 5, 1999
Page 4

CHANGE IN CONTROL
BENEFIT:            All options accelerated upon a change in control and, in the
                    event your employment is terminated without cause (other
                    than due to death or disability) by the Company during the
                    term of this Agreement following a change in control, you
                    shall also be entitled, in lieu of the termination benefits
                    set forth above, to a lump sum payment equal to two year's
                    base salary.

NON-COMPETITION:    You agree not to compete with the business of the Company
                    directly or indirectly, whether as principal, manager,
                    agent, employee, consultant, investor, advisor or
                    representative, during the term of your employment and for a
                    period equal to the period of payment of termination or
                    change in control benefits; if your employment is terminated
                    for cause, the non-competition period shall be two years
                    from such termination. The foregoing will not prohibit a
                    passive investment by you in a public company not exceeding
                    2% of any class of equity securities of such company.

NON-SOLICITATION
PERIOD:             You agree that, for one year after the termination of your
                    employment, you will not solicit or hire any persons who
                    were employed or acting as a consultant to the Company
                    during the one year period prior to the termination of
                    your employment.

CONFIDENTIALITY:    You agree that you will, during and after the end of the
                    term of your employment, keep confidential all non-public
                    information concerning the Company or its business, except
                    in the business of and for the benefit of the Company, and
                    you will not, directly or indirectly, use for your own
                    account any of such information.

REMEDIES:           As you can understand, since we have to be protected, the
                    Company will be entitled, in addition to other remedies,
                    to obtain an injunction against any potential or actual
                    violations of your non-competition, non-solicitation or
                    confidentiality agreements.

WITHHOLDING TAXES:  All compensation hereunder shall be subject to applicable
                    withholding taxes.

GOVERNING LAW:      New York

REPRESENTATION:     You represent that your execution of this letter and your
                    performance of your obligations hereunder will not violate
                    the terms of any agreement,




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Ms. Ivy Karkut
November 5, 1999
Page 5

                    arrangement, or understanding, order or decree to which you
                    are a party or by which you are bound.

     Please indicate your acceptance of the terms of this offer letter by your
signature below. Once signed by both parties, this offer letter shall be binding
on both parties. We look forward to your joining the Company.

                                             Sincerely,


                                             Bernard Chaus, Inc.


                                             By: _________________________
                                                    Josephine Chaus
                                                    Chief Executive Officer

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

_______________________
Ivy Karkut