Exhibit 10.3

 

   June 6, 2012

To: KCP Holdco, Inc.

Re: Kenneth Cole Productions, Inc.

Ladies and Gentlemen:

This letter sets forth the commitment of (i) Cole Family Holdco, LLC (the
“Investor”) and Kenneth D. Cole (“KDC”) to jointly and severally purchase equity
securities of KCP Holdco, Inc. (“Parent”), which has been formed for the purpose
of acquiring Kenneth Cole Productions, Inc. (the “Company”) through the merger
of KCP Mergerco, Inc. (“Merger Sub”) with and into the Company, pursuant to that
certain Agreement and Plan of Merger dated as of June 6, 2012 (the “Merger
Agreement”), by and among Parent, Merger Sub and the Company, all on the terms
and subject to the conditions set forth in the Merger Agreement (the
“Transaction”) and (ii) the Family Stockholders (as defined in the Merger
Agreement) to effectuate, and cause the Investor, Parent and KCP Acquisitions,
Inc. (“Intermediate Holdco”) to effectuate, the transactions contemplated by the
Rollover Agreement, attached hereto as Exhibit A, and the Exchange Agreement,
attached hereto as Exhibit B, immediately prior to the Effective Time in
accordance with the respective terms thereof. Capitalized terms not otherwise
defined herein have the meanings ascribed to such terms in the Merger Agreement.

1. Commitment.

(a) Subject to the terms and conditions herein, (i) the Investor and KDC hereby
jointly and severally commit to Parent to purchase, directly or indirectly
through one or more intermediate entities, equity securities of Parent with an
aggregate purchase price of $15,000,000 immediately prior to the Effective Time
(the “Commitment”) and (ii) each of the Family Stockholders hereby commits to
Parent to effectuate, and cause the Investor, Parent and Intermediate Holdco to
effectuate, the transactions contemplated by the Rollover Agreement and the
Exchange Agreement immediately prior to the Effective Time in accordance with
the respective terms thereof (the “Rollover Transactions”).

(b) The proceeds from the Investor’s and KDC’s purchases of equity securities
pursuant to this commitment letter shall be used solely for funding the
Transaction, including the payment of the aggregate Merger Consideration and the
payment of fees and expenses in connection with the Transaction, and no other
purpose. All payments hereunder will be made in U.S. dollars by wire transfer of
immediately available funds. In no event shall the Investor and KDC be obligated
to contribute to Parent more than the Commitment, nor shall the Family
Stockholders be obligated to deliver to the Investor more than the number of
Rollover Shares (as defined in the Rollover Agreement) in accordance with the
terms of the Rollover Agreement.

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2. Closing Conditions. The Investor’s and KDC’s joint and several obligation to
purchase equity securities of Parent, and the Family Stockholders’ obligations
to effectuate, and cause the Investor, Parent and Intermediate Holdco to
effectuate, the Rollover Transactions, pursuant to this commitment letter is
conditioned only upon (i) the substantially concurrent funding of the Debt
Financing set forth in the Debt Commitment Letter, (ii) the satisfaction or
waiver by Parent of the conditions set forth in Sections 6.01 and 6.02 of the
Merger Agreement (other than any conditions that by their nature are to be
satisfied at the Closing and which are capable of being satisfied were the
Closing to occur) and (iii) either (x) the substantially concurrent consummation
of the Merger in accordance with the terms and conditions of the Merger
Agreement or (y) a final order or judgment having been validly entered which
awards specific performance of the Commitment and the Rollover Transactions
pursuant to, and in accordance with, Section 8.08(b) of the Merger Agreement.

3. Efforts. In the period between the date hereof and the Closing Date, Parent,
the Investor and the Family Stockholders shall (i) maintain in effect this
commitment letter, the Rollover Agreement and the Exchange Agreement, (ii) use
their respective reasonable best efforts to satisfy prior to the Closing all
conditions precedent applicable to Parent, the Investor or the Family
Stockholders, as applicable, in this commitment letter, the Rollover Agreement
and the Exchange Agreement that are within their respective control and that
have not been waived by the other parties hereto or thereto in accordance with
the terms hereof and thereof and (iii) subject to the satisfaction or waiver of
the conditions set forth in Section 2, consummate the funding of the Commitment
and the Rollover Transactions in accordance with the terms described in this
commitment letter and the Rollover Agreement and Exchange Agreement (or
otherwise acceptable to Parent and the Investor) at or prior to the Closing.
Subject to the terms and conditions hereof, the Investor and the Family
Stockholders shall use their respective reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable, and no later than the Closing, the transactions contemplated by
this commitment letter, the Rollover Agreement and the Exchange Agreement and
shall reasonably cooperate with each other in connection with the foregoing.

4. Required Information. The Investor and the Family Stockholders agree to
promptly provide to Parent (and no later than five (5) Business Days after
Parent or the Company makes such request) any information about the Investor or
the Family Stockholders (or their respective Affiliates or Associates) that
Parent or the Company reasonably determines upon the advice of counsel is
required to be included in (i) the Proxy Statement, (ii) solely with respect to
requests made by Parent, the Schedule 13E-3 or (iii) any other any other filing
or notification with any Governmental Entity in connection with the Merger and
the transactions contemplated by the Merger Agreement, this commitment letter,
the Rollover Agreement and the Exchange Agreement. The Investor and the Family
Stockholders shall cooperate with Parent in connection with the preparation of
the foregoing documents to the extent such documents relate to the Investor or
the Family Stockholders (or their respective Affiliates or Associates),
respectively. The Investor and the Family Stockholders hereby represent and
warrant, with respect to themselves respectively, to Parent that, solely with
respect to any information supplied by the Investor or the Family Stockholders
pursuant to this Section 4, none of such information contained or incorporated
by reference in the Proxy Statement will at the time of the mailing of the Proxy
Statement to the stockholders of the Company, at the time of Company
Stockholders

 

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Meeting, or at the time of any amendments thereof or supplements thereto, and
none of such information supplied or to be supplied by the Investor or the
Family Stockholders for inclusion or incorporation by reference in the Schedule
13E-3 to be filed with the SEC concurrently with each filing of the Proxy
Statement will, at the time of such filing with the SEC, or at the time of
filing with the SEC any amendments thereof or supplements thereto, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. If
required under applicable law, as reasonably determined by counsel to Parent,
the Investor or any of the Family Stockholders agree to join (and to cause their
respective Affiliates and Associates to join) as a filing party to any Schedule
13E-3 filing discussed in the previous sentence.

5. Notice of Closing. Parent shall use commercially reasonable efforts to
provide the Investor and the Family Stockholders with not less than five
(5) Business Days’ prior written notice of the Closing Date under the Merger
Agreement. Any notices or correspondence received by Parent under, in connection
with, or related to the Merger Agreement shall be promptly provided to the
Investor and the Family Stockholders in accordance with Section 11(c).

6. Enforcement.

(a) Except as set forth in Section 6(b), this commitment letter may be enforced
solely by Parent and the Investor. Except as set forth in Section 6(b), no
Person (including without limitation the Company, any shareholder, or any direct
or indirect creditor of the Company, Parent, Merger Sub or any direct or
indirect parent company of Merger Sub) shall: (a) be a beneficiary hereof; or
(b) have any right whatsoever hereunder (whether at law or in equity, whether in
contract, tort, statute, regulation or otherwise), including (without
limitation) to, or to cause Parent or the Company to, enforce the Commitment,
the Rollover Transactions or this commitment letter. This Commitment or this
commitment letter is not intended to create a fiduciary relationship between the
parties hereto.

(b) Notwithstanding anything to the contrary in this letter (or any of the
Exhibits hereto), each of the Investor, the Family Stockholders and Parent
acknowledges and agrees that the Company is hereby made a third party
beneficiary of this letter solely for the purposes of enforcing Parent’s
specific performance rights hereunder to enforce the Family Stockholders’ and
the Investor’s compliance with their obligations under Sections 1, 3 and 4 in
accordance with the terms hereof, including the Investor’s and KDC’s joint and
several obligation to fund their Commitment and the Family Stockholders’
obligations to effectuate the Rollover Transactions, 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.

7. Recourse. Notwithstanding anything that may be expressed or implied in, under
and/or by this commitment letter, Parent by its acceptance hereof covenants,
acknowledges and agrees that (a) no Person other than the Investor and the
Family Stockholders shall have any obligation hereunder or in connection
herewith (whether at law or in equity, whether in contract, tort, statute,
regulation or otherwise), (b) no recourse hereunder or in connection herewith
under any documents or instruments delivered in connection herewith may be
sought or had against any Non-Recourse Party, whether by or through attempted
piercing of the corporate, limited

 

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liability company or limited partnership veil, by or through a claim on behalf
of the Company, Parent, Merger Sub or any other Person against any Non-Recourse
Party, other than as expressly set forth herein, whether by the enforcement of
any judgment or assessment or by any legal or equitable proceeding or by virtue
of any statute, regulation or other law or otherwise, and (c) no liability
whatsoever will attach to, be imposed on or otherwise be suffered or incurred by
any Non-Recourse Party, other than with respect to the Company’s rights to
assert any Retained Claim against a Non-Recourse Party in accordance with and
subject to the terms of Section 9 of the Limited Guarantee. As used herein, the
term “Non-Recourse Parties” shall mean, individually or collectively, any direct
or indirect former, current or future equity holders, controlling persons,
directors, officers, employees, agents, advisors, general or limited partners,
managers, management companies, members, stockholders, lenders, Affiliates or
assignees of the Investor, the Family Stockholders, Parent or Merger Sub and any
and all direct or indirect former, current or future equity holders, controlling
persons, directors, officers, employees, agents, advisors, general or limited
partners, managers, management companies, members, stockholders, lenders,
Affiliates or assignees of any of the foregoing, and any and all former, current
or future heirs, executors, administrators, trustees, successors or assigns of
any of the foregoing; provided, however, in no event shall Non-Recourse Parties,
with respect to the Investor, the Family Stockholders, Parent or Merger Sub, be
interpreted to include the Investor, the Family Stockholders, Parent or Merger
Sub, respectively.

8. Expiration. The obligations of the Investor and the Family Stockholders under
or in connection with this commitment letter shall expire automatically and
immediately upon the earliest to occur of (a) the Closing (at which time all
such obligations shall be discharged); (b) the valid termination of the Merger
Agreement pursuant to its terms; provided, however, that, for the avoidance of
doubt, any purported termination of the Merger Agreement that is not a valid
termination shall not give rise to a termination of this commitment letter
pursuant to this clause (b); and (c) the assertion by the Company or any of its
Subsidiaries, or by any Person authorized by the Company or any of its
Subsidiaries to claim by, through or for the benefit of the Company or any of
its Subsidiaries, of any claim against any Non-Recourse Party under or in
connection with the Commitment Letters (including this commitment letter), the
Rollover Agreement, the Exchange Agreement, the Limited Guarantee or the Merger
Agreement, or the transactions contemplated hereby or thereby, other than any
Retained Claim against any Non-Recourse Party against which such Retained Claim
may be asserted pursuant to Section 9 of the Limited Guarantee; provided that
any rights of the Investor that survive termination shall continue in full force
and effect for purposes of clarity.

9. No Assignment; Amendment.

(a) Neither this commitment letter, the Rollover Agreement, the Exchange
Agreement nor any of Parent’s or the Investor’s or Family Stockholders’ rights
or obligations hereunder or thereunder shall be assigned or otherwise
transferred by Parent, the Investor or the Family Stockholders without the prior
written consent of Parent, the Investor and the Family Stockholders, and any
purported assignment or transfer without such consent shall be null and void;
provided that, with the prior written consent of Parent (which may be withheld
in Parent’s sole discretion), the Investor and KDC may assign or transfer a
portion of their Commitment to any Person (a “Permitted Assignee”), provided
that no such assignment or transfer shall reduce the Commitment or relieve the
Investor and KDC of their joint and several obligations under this

 

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commitment letter, and provided further that any Permitted Assignee shall, as a
condition to any such assignment or transfer, execute a joinder agreement, in
form and substance reasonably satisfactory to Parent, whereby the Permitted
Assignee agrees to be bound by the provisions of this Agreement applicable to
the Investor and KDC with respect to the portion of the Commitment assigned or
transferred to it. Neither this commitment letter, the Rollover Agreement or the
Exchange Agreement may be amended or otherwise modified except in a writing duly
executed by the Investor, the Family Stockholders, Parent and the Company. No
failure or delay by any party in exercising any rights under this commitment
letter shall operate as a waiver hereof.

(b) The Company may not assign or transfer this commitment letter or any of its
rights or obligations hereunder and any purported assignment or transfer without
the prior written consent of the Investor shall be null and void.

10. Parties in Interest; Third Party Beneficiaries. Except as set forth in
Section 6(b) above, this commitment letter shall inure to the benefit of and be
binding solely upon Parent, the Investor and the Family Stockholders. By
execution and delivery of this commitment letter, each of Parent, the Investor
and each Family Stockholder, on behalf of itself, its respective Affiliates, and
any Person claiming by, through or for its benefit, acknowledges and agrees that
it consents to and is bound by the terms, conditions and limitations of this
commitment letter. Except as set forth in Section 6(b) above, nothing in this
commitment letter, express or implied, is intended to confer upon any Person
other than Parent, the Investor, the Family Stockholders, any rights or remedies
under, or by reason of, this commitment letter or to confer upon any Person any
rights or remedies against any Person other than the Investor and the Family
Stockholders under or by reason of this commitment letter, except that any
Non-Recourse Party may rely on and enforce the provisions of Sections 6 and 7
hereof.

11. Governing Law; Jurisdiction; Venue; Waiver of Objections; Notice/Service of
Process.

(a) Governing Law. This commitment letter 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.

(b) Jurisdiction. Each party to this commitment letter, and the Company by its
acknowledgement hereof, 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 commitment letter 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 party, and the Company by its acknowledgement hereof, hereby
irrevocably and unconditionally (i) agrees not to commence any such 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,

 

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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 party
hereto, and the Company by its acknowledgement hereof, 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 party, and the Company by its acknowledgement hereof,
irrevocably consents to service of process in any such action or proceeding in
the manner provided for notices in Section 11(c) below; provided, however, that
nothing in this commitment letter shall affect the right of any party to serve
process in any other manner permitted by Law.

(c) Notice/Service of Process. Each party, and the Company by its
acknowledgement hereof, hereby (i) agrees that (x) all notices and other
communications hereunder and (y) service of process in any action described in
Section 11(b) hereof, in each case 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 respective party at the following addresses or at
such addresses as shall be specified by the party by like notice:

If to Parent, Merger Sub, the Investor or the Family Stockholders:

c/o Kenneth Cole Productions, Inc.

603 West 50th Street

New York, NY 10019

Telecopier: 1-866-698-7042

Attention: Kenneth D. Cole

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

If to the Company:

Kenneth Cole Productions, Inc.

603 West 50th Street

New York, NY 10019

Telecopier: (212) 315-8279

Attention: Michael Colosi

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

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Telecopier: (212) 839-5599

Attention: Joseph W. Armbrust

 

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(ii) agrees that service of process made in accordance with clause (i) will
constitute good and valid service of process in any such action, and
(iii) waives and agrees not to assert (by way of motion, as a defense, or
otherwise) in any such action any claim that service of process made in
accordance with clause (i) does not constitute good and valid service of
process.

12. WAIVER OF JURY TRIAL. EACH PARTY, AND THE COMPANY BY ITS ACKNOWLEDGEMENT
HEREOF, ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS
COMMITMENT LETTER IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS COMMITMENT LETTER AND ANY OF THE AGREEMENTS DELIVERED
IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY, AND THE COMPANY BY ITS ACKNOWLEDGEMENT HEREOF, CERTIFIES AND ACKNOWLEDGES
THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE SUCH WAIVER, (II) IT UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (III) IT MAKES SUCH WAIVER
VOLUNTARILY, AND (IV) IT HAS BEEN INDUCED TO ENTER THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.

13. Confidentiality. This commitment letter shall be treated as confidential and
is being provided to Parent solely in connection with the Transaction. Subject
to the immediately following sentence, this commitment letter may not be used,
circulated, quoted or otherwise referred to in any document, except with the
written consent of the Investor, the Family Stockholders and Parent. The
foregoing notwithstanding, this commitment letter shall be provided to the
Company, and the Company, the Investor and the Family Stockholders may disclose
this commitment letter (i) to their respective Affiliates and representatives,
and (ii) to the extent required by Law, including by disclosing this commitment
letter and the terms hereof in the Proxy Statement and Schedule 13E-3.

14. Representations. The Investor and the Family Stockholders hereby represent
and warrant, with respect to themselves respectively, to Parent that (a) it has
all power and authority or, if an individual, capacity to execute, deliver and
perform this commitment letter; (b) the execution, delivery and performance of
this commitment letter by the Investor or the Family Stockholders (i) has been
duly and validly authorized and approved by all necessary action by it and
(ii) does not require any consent from any spouse of any Family Stockholder or
any other person; (c) the Family Stockholders beneficially own and have the
right to dispose of the Rollover Shares (subject to the terms of the Rollover
Agreement); (d) this commitment letter has been duly and validly executed and
delivered by it and constitutes a valid and legally binding obligation of it;
(e) in the case of the Investor, the amount of the Commitment is less than the
maximum amount that it is permitted to invest in any one portfolio investment
pursuant to the terms of its constituent documents or otherwise; (f) in the case
of the Investor and KDC, as of the

 

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Closing, they will have available capital in excess of the sum of the Commitment
plus the aggregate amount of all other commitments and obligations they
currently have outstanding; (g) in the case of the Investor and KDC, all funds
necessary for the Investor and KDC to fulfill their joint and several
obligations under this commitment letter shall be available to the Investor and
KDC for so long as this Commitment shall remain in effect in accordance with the
terms hereof; (h) the execution, delivery and performance by it of this
commitment letter does not (i) if it is an entity, violate its organizational
documents, (ii) violate any applicable Law or judgment or (iii) result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to the loss of any benefit under, any Contract to which it is
a party; (i) there are no Contracts or other agreements, arrangements or
understandings (whether oral or written) or commitments to enter into
agreements, arrangements or understandings (whether oral or written) between the
Investor or any of the Family Stockholders or any of their respective Affiliates
(other than the Company), on the one hand, and any member of the Company’s
management or directors (other than Kenneth D. Cole), on the other hand, as of
the date hereof that relate in any way to the Company or the Merger; and
(j) none of the Investor, the Family Stockholders or any of their respective
Affiliates has entered into any agreement, discussion, arrangement or
understanding with any Third Party concerning the possible sale of the Surviving
Corporation or all or substantially all the assets of the Surviving Corporation
to a Third Party after the Merger has been consummated.

15. Expense Reimbursement. Parent shall reimburse all reasonable, documented
fees, costs and expenses of the Investor and the Family Stockholders (including,
without limitation, all reasonable out-of-pocket costs and expenses arising in
connection with the Commitment and the Rollover Transactions and the reasonable
fees and expenses of legal counsel to the Investor and the Family Stockholders
in connection with the negotiation, preparation and delivery of this commitment
letter) (collectively, the “Transaction Expenses”). Notwithstanding anything to
the contrary in this Agreement, in the event that the Closing does not occur,
Parent shall not be required to reimburse the Investor or the Family
Stockholders for any Transaction Expenses in respect of any expenses incurred as
a result of the Investor’s or the Family Stockholders’, respectively, or any of
such Investor’s or Family Stockholders’ Affiliates’ gross negligence, bad faith,
fraud or willful misconduct.

16. Indemnity.

(a) Parent agrees to indemnify and hold harmless the Investor as set forth in
Exhibit C hereto, the terms of which are incorporated herein in their entirety.

(b) In no event shall the Investor be liable to Parent for any punitive,
incidental, special or consequential damages arising out of or in any way
connected with the Commitment pursuant to this commitment letter, Rollover
Agreement, the Exchange Agreement or the Merger Agreement.

17. Miscellaneous. This commitment letter may be executed by facsimile or
electronic transmission in pdf format, and in one or more counterparts, each of
which, when so executed, shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. This commitment
letter shall become effective when one or more counterparts have been executed
and delivered by Parent, the Investor and the Family Stockholders to the other.
This commitment letter supersedes all prior understandings, whether written or
oral, between the parties hereto.

[Signature page follows]

 

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Very truly yours, COLE FAMILY HOLDCO, LLC By:   /s/ Kenneth D. Cole   Name:  
Kenneth D. Cole   Title:   Manager

 

KMC PARTNERS L.P. By: KMC Partners LLC, its general partner By:   /s/ Kenneth D.
Cole Name:   Kenneth D. Cole Title:   Managing Member

 

  /s/ Kenneth D. Cole   Kenneth D. Cole

 

  /s/ Robyn S. Transport   Robyn S. Transport, as Trustee of the Family Trust
u/a/d 4/26/10, KDC July 2010 GRAT u/a/d 7/12/10, KDC 2009 GRAT u/a/d 2/2/09, KDC
2009 Family GRAT u/a/d 2/2/09 and Kenneth Cole 1994 Charitable Remainder Trust
u/a/d 12/19/94

 

Agreed to and accepted: KCP HOLDCO, INC. By:   /s/ Kenneth D. Cole   Name:  
Kenneth D. Cole   Title:   President and Chief Executive Officer

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Acknowledged and accepted as third party beneficiary: KENNETH COLE PRODUCTIONS,
INC. By:   /s/ Paul Blum   Name:   Paul Blum   Title:   Chief Executive Officer

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Exhibit A

Rollover Agreement

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Exhibit B

Exchange Agreement

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Exhibit C

Indemnification Provisions

Unless otherwise defined, terms used herein shall have the meanings assigned
thereto in the commitment letter dated today’s date (the “Commitment Letter”)
(such term and each other capitalized term used but not defined herein having
the meaning assigned in the Commitment Letter).

In accordance with the Commitment Letter, whether or not the Closing Date
occurs, the Parent (the “Indemnitor”) hereby indemnifies and holds harmless all
Indemnified Parties (as defined below) from and against all Liabilities (as
defined below). “Indemnified Party” shall mean Investor, any Permitted Assignee,
each affiliate of any of the foregoing and the respective directors, officers,
members agents and employees of each of the foregoing, and each other person
controlling any of the foregoing within the meaning of either Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities Exchange Act
of 1934, as amended. “Liabilities” shall mean any and all losses, claims,
damages, liabilities or other reasonable out-of-pocket costs or expenses to
which an Indemnified Party may become subject which arise out of or related to
or result from any transaction, action or proceeding related to the transactions
or the other matters described or referred to in the Commitment Letter; provided
that Liabilities shall not include any losses, claims, damages, liabilities or
other costs or expenses which (a) a court of competent jurisdiction determines
in a final judgment that the Liabilities resulted primarily from a breach by the
Investor or any Permitted Assignee of the Commitment Letter or otherwise
primarily due to the bad faith, gross negligence or intentional misconduct of
such Indemnified Party; (b) arise out of statements made based solely on
information supplied in writing by the Investor (or Permitted Assignee)
specifically for inclusion in the Schedule 13E-3 or Proxy Statement; or (c) are
with respect to any loss in value of the equity securities purchased by the
Investor or any Permitted Assignee pursuant to the Commitment.

In addition to the foregoing, the Indemnitor agrees to reimburse each
Indemnified Party for all reasonable legal or other out-of-pocket expenses
incurred in connection with investigating, defending or participating in any
action or other proceeding relating to any Liabilities (whether or not such
Indemnified Party is a party to any such action or proceeding).

In no event shall the Parent have any liability to any Indemnified Party for any
consequential or punitive damages, except for any such consequential or punitive
damages included in any third party claim in connection with which such
Indemnified Person is entitled to indemnification. In connection with any action
or proceeding for which an Indemnified Party is entitled to indemnification
under this Exhibit C, the Indemnified Party shall provide prompt written notice
of such action or proceeding to Parent and Parent shall be entitled to assume
the defense of any such action or proceeding with counsel reasonably
satisfactory to the Indemnified Party. Upon assumption by Parent of the defense
of any such action or proceeding, the Indemnified Party shall have the right to
participate in such action or proceeding and to retain its own counsel at its
own cost and expense, provided that Parent shall pay any legal expenses of such
counsel incurred by such Indemnified Party in connection with the defense
thereof if (i) Parent has agreed to pay such fees and expenses, (ii) Parent
shall have failed to employ counsel reasonably satisfactory to the Indemnified
Party in a timely manner, or (iii) the Indemnified Party shall have been advised

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by counsel that there are actual or potential conflicting interests between
Parent and the Indemnified Party, including situations in which there are one or
more legal defenses available to the Indemnified Party that are different from
or additional to those available to Parent. Parent shall not consent to the
terms of any compromise or settlement of any action defended by Parent in
accordance with the foregoing without the prior written consent of the
Indemnified Party, not to be unreasonably delayed or withheld (other than any
such compromise or settlement exclusively requiring payment of money by Parent).

In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but is
found by a judgment of a court of competent jurisdiction (not subject to further
appeal) that such indemnification may not be enforced in such case, even though
the express provisions hereof provide for indemnification in such case, then the
Indemnitor, on the one hand, and the Indemnified Parties, on the other hand,
shall contribute to the losses, claims, damages, obligations, penalties,
judgments, awards, liabilities, costs, expenses and disbursements to which the
Indemnified Parties may be subject in accordance with the relative benefits
received by the Indemnitor, on the one hand, and the Indemnified Parties, on the
other hand, and also the relative fault of the Indemnitor, on the one hand, and
the Indemnified Parties collectively and in the aggregate, on the other hand, in
connection with the statements, acts or omissions which resulted in such losses,
claims, damages, obligations, penalties, judgments, awards, liabilities, costs,
expenses and disbursements and the relevant equitable considerations shall also
be considered. No person found liable for a fraudulent misrepresentation that
directly resulted in the relevant losses, claims, damages, obligations,
penalties, judgments, awards, liabilities, costs, expenses and disbursements
shall be entitled to contribution from any other person who is not also found
liable for such fraudulent misrepresentation.