BERNARD CHAUS, INC. 530 Seventh Avenue 18th Floor New York, NY 10018 October 18, 2004 Mr. Nicholas DiPaolo 530 Seventh Avenue 18th Floor New York, NY 10018 Dear Nick: As we have discussed, to assist with your need for additional support as the Company...

                               XXXXXXX XXXXX, INC.
                               000 Xxxxxxx Xxxxxx
                                   00xx Xxxxx
                               Xxx Xxxx, XX 00000


                                                              October 18, 2004


Xx. Xxxxxxxx XxXxxxx
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000

Dear Xxxx:

                  As we have discussed, to assist with your need for additional
support as the Company has grown through acquisitions, the Company intends to
hire a chief operating officer. You will continue to serve as Vice Chairman of
the Board. Please indicate, by your signature below, your consent to this
modification of your employment agreement with Xxxxxxx Xxxxx, Inc., dated
January 20, 2001, as amended effective as of December 1, 2003.

         Except as amended hereby, your employment agreement shall remain in
full force and effect.

                                            Sincerely,


                                            XXXXXXX XXXXX, INC.


                                            By: /s/Xxxxxxxxx Xxxxx
                                                __________________
                                                   Xxxxxxxxx Xxxxx
                                                   Chief Executive Officer


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


/s/:Xxxxxxxx Xxxxxxx
Xxxxxxxx XxXxxxx