Exhibit 10.5

EXCHANGE AGREEMENT

This Exchange Agreement (this “Agreement”) is made and entered into as of
June 6, 2012, by and among Cole Family Holdco, LLC, a Delaware limited liability
company (“Family LLC”), KCP Holdco, Inc., a Delaware corporation and
wholly-owned subsidiary of Family LLC (“Parent”), and KCP Acquisitions, Inc., a
Delaware corporation and wholly-owned subsidiary of Parent (“Intermediate
Holdco”, and together with Family LLC and Parent, the “Parties”).

WHEREAS, concurrent with the execution and delivery of this Agreement, Parent,
KCP MergerCo, Inc., a New York corporation and wholly-owned subsidiary of Parent
(“Merger Sub”), and Kenneth Cole Productions, Inc. (the “Company”) are entering
into an Agreement and Plan of Merger (the “Merger Agreement”), which provides,
among other things, for the merger of Merger Sub with and into the Company, with
the Company surviving as a wholly-owned subsidiary of Parent (the “Merger”);

WHEREAS, concurrent with the execution and delivery of this Agreement, Family
LLC and the stockholders (“Family Stockholders”) of the Company parties thereto
are entering into a Rollover Agreement (the “Rollover Agreement”), which
provides, among other things, for the exchange of (i) (A) that number of shares
of Class A Common Stock, par value $0.01 per share, of the Company (“Class A
Stock”) and (B) that number of shares of Class B Common Stock, par value $0.01
per share, of the Company (“Class B Stock” and together with Class A Stock,
“Rollover Shares”) described therein, for (ii) limited liability company
interests in Family LLC;

WHEREAS, subject to the conditions set forth herein, immediately after the
Rollover Closing (as defined in the Rollover Agreement), (i) Family LLC desires
to contribute the Rollover Shares to Parent and (ii) Parent desires to issue to
Family LLC, in exchange for the contribution of such Rollover Shares, shares of
common stock, par value $0.01, of Parent (the “Parent Common Stock”),
representing 100% of the outstanding capital stock of Parent; and

WHEREAS, subject to the conditions set forth herein, immediately after the
Family LLC Contribution (as defined below), (i) Parent desires to contribute the
Rollover Shares to Intermediate Holdco and (ii) Intermediate Holdco desires to
issue to Parent, in exchange for such contribution of the Rollover Shares,
shares of common stock, par value $0.01, of Intermediate Holdco (the
“Intermediate Holdco Common Stock”) representing 100% of the outstanding capital
stock of Intermediate Holdco.

NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties contained herein, the Parties hereto agree as
follows:

1. Contributions.

(a) Immediately after the Rollover Closing and prior to the Effective Time,
(i) Family LLC will contribute, assign, transfer, convey and deliver the
Rollover Shares to Parent and, in exchange for the contribution of such Rollover
Shares, Parent shall issue and deliver to Family LLC 100 shares of Parent Common
Stock (the “Family LLC Contribution”) representing 100% of the outstanding
capital stock of Parent and (ii) all Parent Common Stock previously issued shall
cease to be outstanding and shall automatically be cancelled and shall cease to
exist.

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(b) Immediately after the Family LLC Contribution and prior to the Effective
Time, (i) Parent will contribute, assign, transfer, convey and deliver the
Rollover Shares to Intermediate Holdco and, in exchange for such contribution of
the Rollover Shares, Intermediate Holdco shall issue and deliver to Parent 100
shares of Intermediate Holdco Common Stock (the “Parent Contribution” and,
together with the Family LLC Contribution, the “Contributions”) representing
100% of the outstanding capital stock of Intermediate Holdco and (ii) all
Intermediate Holdco Common Stock previously issued shall cease to be outstanding
and shall automatically be cancelled and shall cease to exist.

(c) In the event that the Contributions are consummated but the Merger Agreement
is terminated in accordance with its terms, then the Contributions will be void
ab initio and deemed not to have occurred and each of Family LLC and Parent,
respectively, will deliver to each of Parent and Intermediate Holdco,
respectively, the number of shares of Parent Common Stock or Intermediate Holdco
Common Stock received pursuant to paragraphs (a) or (b) of this Section 1 and
each of Intermediate Holdco and Parent, respectively, will deliver to each of
Parent and Family LLC, respectively, the Rollover Shares previously delivered by
Parent and Family LLC, respectively, to Intermediate Holdco and Parent.

2. Closing.

(a) The closing of the transactions contemplated by this Agreement (the
“Contribution Closing”) will take place at the offices of Willkie Farr &
Gallagher LLP, 787 Seventh Avenue, New York, New York 10019, immediately prior
to the Effective Time.

(b) At the Contribution Closing, each of Family LLC and Parent, respectively,
will deliver to each of Parent and Intermediate Holdco, respectively, stock
certificates duly endorsed for transfer to each of Parent and Intermediate
Holdco, respectively, or accompanied by stock powers duly endorsed in blank,
representing the Rollover Shares, and each of Parent and Intermediate Holdco
will reflect on their books and records each of Family LLC’s and Parent’s
ownership, respectively, of 100 of shares of Parent Common Stock or Intermediate
Holdco Common Stock, respectively.

3. Representations and Warranties of the Parties. Each of the Parties hereto
represents and warrants, severally but not jointly, as follows:

(a) Binding Agreement. Such Party has the capacity to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. Such Party has
duly and validly executed and delivered this Agreement and this Agreement
constitutes a legal, valid and binding obligation of such Party, enforceable
against such Party in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or other
similar laws affecting creditors’ rights generally and by general equitable
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law).

 

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(b) No Conflict. Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, nor the performance of
such Party’s obligations hereunder will (a) result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation, or acceleration) under
any contract, agreement, instrument, commitment, arrangement or understanding to
which such Party is a party, or result in the creation of a security interest,
lien, charge, encumbrance, equity or claim with respect to the Rollover Shares,
or (b) require any material consent, authorization or approval of any person,
entity or governmental entity, or (c) violate or conflict with any writ,
injunction or decree applicable to such Party.

4. Conditions Precedent. The obligations of each Party to consummate the
transactions contemplated hereby are subject to the conditions set forth in
Sections 6.01 and 6.02 of the Merger Agreement being satisfied or waived by
Parent (other than any conditions that by their nature are to be satisfied at
the Closing, but subject to the prior or substantially concurrent satisfaction
of such conditions), and such other conditions set forth in the Equity
Commitment Letter, dated of even date herewith, among the Family Stockholders,
Family LLC, Parent and the Company (the “Equity Commitment Letter”).

5. Tax Matters.

The Parties hereto (i) shall treat each of the Contributions as a tax-free
contribution under Section 351 of the Internal Revenue Code of 1986, as amended,
for all federal, state and local income tax purposes, and (ii) will not take any
position on any return that is inconsistent with such treatment.

6. Miscellaneous.

(a) Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally or sent by
telecopy, overnight courier service or by registered or certified mail (postage
prepaid, return receipt requested), to the attention of Family LLC, Parent or
Intermediate Holdco, respectively, at the following address or at such other
address as shall be specified by Family LLC, Parent or Intermediate Holdco by
like notice:

c/o Kenneth Cole Productions, Inc.

603 West 50th Street

New York, NY 10019

Telecopier: 1-866-698-7042

Attention: Kenneth D. Cole

 

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with a copy to (which shall not constitute notice):

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, New York 10019

Telecopier: (212) 728-9129

Attention: Adam M. Turteltaub

(b) Binding Effect; Benefits.

(i) This Agreement will be binding upon the successors, heirs, executors and
administrators of the Parties hereto. Except as set forth in Section 6(b)(ii)
and other than as set forth in the Equity Commitment Letter, nothing in this
Agreement, express or implied, is intended or will be construed to give any
person other than the Parties to this Agreement and their respective successors
or permitted assigns any legal or equitable right, remedy or claim under or in
respect of any agreement or any provision contained herein.

(ii) Notwithstanding anything to the contrary in this Agreement, each of the
Parties acknowledges and agrees that the Company is hereby made a third party
beneficiary of this Agreement for the purposes of enforcing (including specific
performance of) Parent’s rights to cause the Contributions to be consummated in
accordance with the terms hereof, solely to the extent expressly provided and
permitted by the terms and conditions of Section 8.08(b) of the Merger Agreement
and the terms and conditions hereof.

(c) Amendments. This Agreement may not be modified, amended, altered or
supplemented except upon the execution and delivery of a written agreement
executed by all of the Parties hereto and the Company and in accordance with the
terms of the Equity Commitment Letter.

(d) Assignability. Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof will be assignable by any Party,
without the prior written consent of the other Parties and the Company and in
accordance with the terms of the Equity Commitment Letter.

(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof,
except to the extent that mandatory provisions of federal law apply. Each of the
Parties hereto hereby irrevocably and unconditionally submits, for itself and
its property, to the exclusive jurisdiction of the courts of the State of New
York and any appellate court thereof and the United States District Court for
the Southern District of New York and any appellate court thereof, in any action
or proceeding arising out of or relating to this Agreement or the agreements
delivered in connection herewith or the transactions contemplated hereby or
thereby or for recognition or enforcement of any judgment relating thereto, and
each of the Parties hereby irrevocably and unconditionally (i) agrees not to
commence any such

 

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action except in such courts, (ii) agrees that any claim in respect of any such
action or proceeding may be heard and determined in such courts, (iii) waives,
to the fullest extent it may legally and effectively do so any objection which
it may now or hereafter have to venue of any such action or proceeding in any
such courts, and (iv) waives, to the fullest extent permitted by law, the
defense of any inconvenient forum to the maintenance of such action or
proceeding in any such courts. Each of the Parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Each of the Parties to this Agreement irrevocably consents to
service of process in any such action or proceeding in the manner provided for
notices in Section 7(a) of this Agreement; provided, however, that nothing in
this Agreement shall affect the right of any Party to this Agreement to serve
process in any other manner permitted by law.

(f) Counterparts. This Agreement may be executed by facsimile and in two or more
counterparts, each of which will be deemed to be an original, but all of which
together will constitute one and the same instrument.

(g) Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law, or public policy, all
other conditions and provisions of this Agreement will nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated herein are not affected in any manner materially
adverse to any Party hereto. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties hereto
will negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in a mutually acceptable
manner.

(h) Waiver. Any Party to this Agreement may waive any condition to their
obligations contained herein.

(i) Termination. This Agreement will terminate on the earlier of the termination
of the Merger Agreement in accordance with its terms or the expiration or
termination of the obligations of Family LLC and the Family Stockholders under
the Equity Commitment Letter. Termination will not relieve any Party from
liability for any breach of its obligations hereunder committed prior to such
termination.

(j) Further Assurances. Each Party to this Agreement shall execute such
documents and other papers and take such further actions as may be reasonably
required or desirable to carry out the provisions hereof and the transactions
contemplated hereby.

(k) Effectiveness. The obligations of the Parties under this Agreement shall not
be effective or binding upon the Parties until such time as the Merger Agreement
is executed and delivered by the parties thereto.

(l) Definitions. Capitalized terms not otherwise defined herein have the
meanings ascribed to such terms in the Merger Agreement.

[Signatures on the following page]

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.

 

COLE FAMILY HOLDCO, LLC By:    /s/ Kenneth D. Cole  

Name: Kenneth D. Cole

Title: Manager

 

KCP HOLDCO, INC. By:    /s/ Kenneth D. Cole  

Name: Kenneth D. Cole

Title: President and Chief Executive Officer

 

KCP ACQUISITIONS, INC. By:    /s/ Kenneth D. Cole  

Name: Kenneth D. Cole

Title: President and Chief Executive Officer