UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION

                         Washington, D.C. 20549

                                Form 10-Q

 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                          EXCHANGE ACT OF 1934

              For the quarterly period ended June 30, 2005


     (  )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                     SECURITIES EXCHANGE ACT OF 1934

                     Commission File Number  1-13082

                     KENNETH COLE PRODUCTIONS, INC.
          (Exact name of registrant as specified in its charter)

              New York                           13-3131650
           (State or other jurisdiction of       (I.R.S. Employer
              incorporation or organization)       Identification Number)



        603 West 50th Street, New York, NY                  10019
        (Address of principal executive offices)          (Zip Code)


    Registrant's telephone number, including area code (212) 265-1500

Indicate by check mark whether the registrant (1) has filed all  reports
required  to be filed by Section 13 or 15(d) of the Securities  Exchange
Act  of  1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes (X)  No (  )


Indicate  by  check mark whether the registrant is an accelerated  filer
(as defined in Rule 12b-2 of the Exchange Act).
Yes (X)  No ( )

Indicate  the  number  of shares outstanding of  each  of  the  issuer's
classes of common stock, as of the latest practicable date:

                Class                                   August 2, 2005

     Class A Common Stock ($.01 par value)                   15,449,253
     Class B Common Stock ($.01 par value)                    8,010,497



<PAGE>



                     Kenneth Cole Productions, Inc.
                              Index to 10-Q


Part I.    FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets as of June 30, 2005
and December 31, 2004............................................      3

Condensed Consolidated Statements of Income for the three  and six-
month periods ended June 30, 2005 and 2004..........................   5

Condensed Consolidated Statement of Changes in Shareholders' Equity
for the six-month period ended June 30, 2005 .......................   6

Condensed Consolidated Statements of Cash Flows for the six-month
periods ended June 30, 2005 and 2004................................   7

Notes to Condensed Consolidated Financial Statements................   8

Item 2.Management's Discussion and Analysis of Financial Condition
       and Results of Operations.....................................  18

Item 3. Quantitative and Qualitative Disclosures about Market Risk...  24

Item 4. Controls and Procedures......................................  24

Part II.  OTHER INFORMATION

Item 1.Legal Proceedings.............................................. 26

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.... 26

Item 3.Defaults Upon Senior Securities................................ 26

Item 4.Submission of Matters to a Vote of Security Holders............ 26

Item 5.Other Information.............................................. 27

Item 6.Exhibits....................................................... 27

Signatures............................................................ 28









<PAGE>



Part I. FINANCIAL INFORMATION
Item 1.  Financial Statements


<TABLE>
             Kenneth Cole Productions, Inc. and Subsidiaries
                  Condensed Consolidated Balance Sheets
                               (Unaudited)

<CAPTION>
                                                    June 30,      December 31,
                                                      2005           2004
<S>                                               <C>            <C>
Assets
Current assets:
Cash and cash equivalents                         $ 49,096,000   $ 80,014,000
Marketable securities                               69,673,000     40,000,000
Due from factors                                    38,051,000     34,936,000
Accounts receivable, net                            12,259,000     16,978,000
Inventories, net                                    47,672,000     47,166,000
Prepaid expenses and other current assets            3,266,000      2,664,000
Deferred taxes, net                                  2,855,000      3,136,000
                                                   -----------    -----------
Total current assets                               222,872,000    224,894,000


Property and equipment, at cost, less
accumulated depreciation and amortization           39,465,000     38,510,000


Other assets:
 Deferred taxes, net                                11,799,000      9,625,000
 Deposits and sundry                                14,309,000      8,826,000
 Deferred compensation plan assets                  27,550,000     22,732,000
                                                   -----------    -----------
Total other assets                                  53,658,000     41,183,000
                                                   -----------    -----------

Total assets                                      $315,995,000   $304,587,000
                                                   ===========    ===========

</TABLE>
        See accompanying notes to condensed consolidated financial statements.




<PAGE>

<TABLE>
                     Kenneth Cole Productions, Inc. and Subsidiaries
                    Condensed Consolidated Balance Sheets (continued)
                                       (Unaudited)

<CAPTION>
                                                   June 30,    December31,
                                                      2005         2004
<S>                                               <C>            <C>
Liabilities and shareholders' equity
Current liabilities:
Accounts payable                                  $ 32,557,000   $ 35,767,000
Accrued expenses and other current liabilities       6,940,000      8,947,000
Deferred income                                      3,532,000      2,920,000
Income taxes payable                                   555,000      4,253,000
                                                   -----------    -----------
Total current liabilities                           43,584,000     51,887,000
                                                   -----------    -----------
Accrued rent and other long-term liabilities        15,213,000     13,440,000
Deferred compensation plans liabilities             27,550,000     22,732,000

Commitments and contingencies

Shareholders' equity:
   Series A Convertible Preferred Stock,
   par value $1.00, 1,000,000 shares
   authorized, none outstanding
   Class A Common Stock, par value $.01,
   20,000,000 shares authorized; 15,400,021
   and 15,054,845 issued as of June 30, 2005
   and December 31, 2004,respectively                  154,000        150,000
   Class B Common Stock, par value $.01,
   9,000,000 shares authorized; 8,055,497
   issued and outstanding as of
   June 30, 2005 and December 31, 2004                  81,000         81,000
   Additional paid-in capital                       86,997,000     78,417,000
   Deferred Compensation                            (4,052,000)
   Accumulated other comprehensive income              784,000      1,053,000
   Retained earnings                               225,840,000    216,983,000
                                                   -----------    -----------
                                                   309,804,000    296,684,000

   Class A Common Stock in treasury, at cost,
   3,388,400 shares as of June 30, 2005
   and December 31, 2004                           (80,156,000)   (80,156,000)
                                                   -----------    -----------

Total Shareholders' Equity                         229,648,000    216,528,000
                                                   -----------    -----------

Total Liabilities and Shareholders' Equity         $315,995,000  $304,587,000
                                                   ===========    ===========

</TABLE>

         See accompanying notes to condensed consolidated financial statements.


<Page>

<TABLE>
                     Kenneth Cole Productions, Inc. and Subsidiaries
                       Condensed Consolidated Statements of Income
                                         (Unaudited)

<CAPTION>

                        Three Months Ended              Six Months Ended
                            June 30,                        June 30,
                        2005         2004            2005            2004
<S>                  <C>           <C>              <C>           <C>
Net sales            $109,281,000  $103,720,000     $229,573,000  $217,071,000
Royalty revenue        10,054,000     9,337,000       19,660,000    18,363,000
                     ------------  ------------     ------------  ------------
Net revenues          119,335,000   113,057,000      249,233,000   235,434,000
Cost of goods sold     63,966,000    61,683,000      137,698,000   131,592,000
                     ------------  ------------     ------------  ------------
Gross profit           55,369,000    51,374,000      111,535,000   103,842,000

Selling, general
 and administrative
  expenses             44,161,000    40,382,000       89,143,000    81,174,000
                     ------------  ------------     ------------  ------------
Operating income       11,208,000    10,992,000       22,392,000    22,668,000
Interest and other
  income, net             835,000       342,000        1,352,000       591,000
                     ------------  ------------     ------------  ------------
Income before
provision for
income taxes           12,043,000    11,334,000       23,744,000    23,259,000
Provision for
income taxes            4,335,000     4,307,000        8,547,000     8,839,000
                     ------------  ------------     ------------  ------------
Net income           $  7,708,000  $  7,027,000     $ 15,197,000  $ 14,420,000
                     ============  ============     ============  ============

Earnings per share:

Basic                $        .39  $        .35     $        .77  $        .72
Diluted              $        .38  $        .34     $        .75  $        .70

Dividends declared
share per            $        .16  $        .12     $        .32  $        .24


Shares used to
compute earnings
per share:

Basic                  19,845,000    20,048,000       19,790,000    19,951,000

Diluted                20,318,000    20,727,000       20,252,000    20,669,000

</TABLE>



         See accompanying notes to condensed consolidated financial statements.
<PAGE>

<TABLE>

                    Kenneth Cole Productions, Inc. and Subsidiaries
       Condensed Consolidated Statement of Changes in Shareholders' Equity
                                   (Unaudited)

<CAPTION>
                                  Class A                    Class B
                                Common Stock              Common Stock
                                 Number                  Number
                                of shares   Amount     of shares   Amount
<S>                             <C>         <C>          <C>        <C>
Shareholders' equity
January 1, 2005                 15,054,845  $  150,000   8,055,497  $ 81,000

Net income
  Translation adjustment
   foreign currency
   net of taxes $6,000

  Forward contracts, net
   of taxes of ($770,000)

Unrealized gain on available
   for sale security, net
   of taxes $613,000

Comprehensive Income

Issuance of Restricted Stock       146,833       2,000

Amortization of Deferred
   Compensation

Exercise of stock options, and
   Related tax benefits
   of $959,000                     192,526       2,000

Issuance of Class A Common
   Stock for ESPP                    5,817

Dividends paid on Common Stock
   Class A and B
                                -----------------------------------------------
Shareholders' equity
   June 30,2005                 15,400,021  $  154,000   8,055,497  $ 81,000
                                ===============================================

</TABLE>
         See accompanying notes to condensed consolidated financial statements.

<PAGE>


<TABLE>


                    Kenneth Cole Productions, Inc. and Subsidiaries
       Condensed Consolidated Statement of Changes in Shareholders' Equity
                                   (Unaudited)

<CAPTION>
                                                                  Accumulated
                                 Additional                          Other
                                  Paid-in        Deferred       Comprehensive
                                  Capital      Compensation           Income
<S>
Shareholders' equity            <C>               <C>              <C>
January 1, 2005                 78,417,000                         $ 1,053,000

Net income
  Translation adjustment
   foreign currency
   net of taxes $6,000                                                  10,000

  Forward contracts, net
   of taxes of ($770,000)                                           (1,368,000)

Unrealized gain on available
   for sale security, net
   of taxes $613,000                                                 1,089,000

Comprehensive Income

Issuance of Restricted Stock     4,400,000        (4,402,000)

Amortization of Deferred
   Compensation                                      350,000

Exercise of stock options, and
   Related tax benefits
   of $959,000                   4,038,000

Issuance of Class A Common
   Stock for ESPP                  142,000

Dividends paid on Common Stock
   Class A and B
                                -----------------------------------------------
Shareholders' equity
   June 30,2005                 86,997,000        (4,052,000)          784,000
                                ===============================================

</TABLE>
         See accompanying notes to condensed consolidated financial statements.


<PAGE>

<TABLE>

                Kenneth Cole Productions, Inc. and Subsidiaries
       Condensed Consolidated Statement of Changes in Shareholders' Equity
                                   (Unaudited)

<CAPTION>

                                              Treasury Stock
                              Retained    Number of
                              Earnings    Shares       Amount        Total
<S>                        <C>
Shareholders' equity                     <C>         <C>           <C>
January 1, 2005            $216,983,000  (3,388,400) $(80,156,000) $216,528,000

Net income                   15,197,000                              15,197,000
  Translation adjustment
   foreign currency
   net of taxes $6,000                                                  10,000

  Forward contracts, net
   of taxes of ($770,000)                                           (1,368,000)

Unrealized gain on available
   for sale security, net
   of taxes $613,000                                                 1,089,000
                                                                    -----------
Comprehensive Income                                                14,928,000

Issuance of Restricted Stock                                                 -

Amortization of Deferred
   Compensation                                                         350,000

Exercise of stock options, and
   Related tax benefits
   of $959,000                                                        4,040,000

Issuance of Class A Common
   Stock for ESPP                                                       142,000

Dividends paid on Common Stock
   Class A and B               (6,340,000)                          (6,340,000)
                                -----------------------------------------------
Shareholders' equity
   June 30,2005              $225,840,000 (3,388,400)$(80,156,000) $229,648,000
                             ==================================================


</TABLE>
         See accompanying notes to condensed consolidated financial statements.

<PAGE>


<TABLE>
        See accompanying notes to condensed consolidated financial statements
                   Kenneth Cole Productions, Inc. and Subsidiaries
                    Condensed Consolidated Statements of Cash Flows
                                     (Unaudited)
<CAPTION>
                                                          Six Months Ended
                                                               June 30,
                                                           2005          2004
<S>                                                   <C>          <C>
Cash flows from operating activities
Net income                                            $15,197,000  $14,420,000
Adjustments to reconcile net income to net cash
  provided by operating activities:
   Depreciation and amortization                         4,442,000   3,810,000
   Unrealized (gain) loss on deferred
      compensation plans                                  (410,000)    492,000
   Deferred compensation                                   350,000           -
   Realized gain on sale of property and equipment               -     (14,000)
   Provision for doubtful accounts                         120,000      40,000
   Benefit for deferred taxes                           (1,893,000)          -
   Tax benefit from stock options                          959,000   2,674,000
   Unrealized gains from available-for-sale securities  (1,089,000)          -
   Changes in operating assets and liabilities:
    Increase in due from factors                        (3,115,000)   (784,000)
    Decrease in accounts receivable                      4,599,000     779,000
    Increase in inventories                             (1,874,000)(10,481,000)
    Increase in prepaid expenses and other
      current assets                                      (602,000) (2,000,000)
    Increase in other assets                            (1,874,000) (2,032,000)
   (Decrease) increase in accounts payable              (3,210,000)  5,374,000
    Decrease in deferred income, accrued expenses
      and other current liabilities                     (1,457,000) (1,881,000)
    Decrease in income taxes payable                    (3,698,000) (2,939,000)
    Increase in other long-term liabilities              6,591,000   2,639,000
                                                         ---------------------
Net cash provided by operating activities               13,036,000  10,097,000
Cash flows from investing activities
Acquisition of property and equipment                   (5,397,000) (4,008,000)
Proceeds from sale of property and equipment                     -      68,000
Purchases of marketable securities and
  other investments                                    (35,512,000)(43,000,000)
                                                        ----------------------
Net cash used in investing activities                  (40,909,000)(46,940,000)
Cash flows from financing activities
Proceeds from exercise of stock options                  3,081,000   4,258,000
Proceeds from employee stock purchase plan                 142,000     114,000
Dividends paid to shareholders                          (6,340,000) (4,802,000)
                                                         ----------------------
Net cash used in financing activities                   (3,117,000)   (430,000)
Effect of exchange rate changes on cash                     72,000      (4,000)
                                                        ----------------------
Net decrease in cash                                   (30,918,000)(37,277,000)
Cash, beginning of period                               80,014,000 111,102,000
                                                       -----------------------
Cash, end of period                                     49,096,000  73,825,000
                                                       ========================

Supplemental disclosures of cash flow information

Cash paid during the period for:
  Interest                                                    2,000      3,000
  Income taxes, net                                      13,179,000 11,037,000


</TABLE>

See accompanying notes to condensed consolidated financial statements.

<PAGE>





             Kenneth Cole Productions, Inc. and Subsidiaries
          Notes to Condensed Consolidated Financial Statements
                               (Unaudited)

     1.  Basis of Presentation

          The  accompanying  unaudited condensed consolidated  financial
     statements  have  been prepared by Kenneth Cole  Productions,  Inc.
     (the  "Company") in accordance with accounting principles generally
     accepted  in  the United States for interim financial  information.
     Accordingly,  they  do  not  include all  of  the  information  and
     footnotes  required by accounting principles generally accepted  in
     the United States for complete financial statements.  Certain items
     contained in these financial statements are based on estimates.  In
     the opinion of the Company's management, the accompanying unaudited
     condensed consolidated financial statements reflect all significant
     adjustments,  consisting of only normal and recurring  adjustments,
     necessary  for  a fair presentation of the financial  position  and
     results  of  operations and cash flows for the  periods  presented.
     All significant intercompany transactions have been eliminated.

          Operating results for the six months ended June 30,  2005  are
     not  necessarily indicative of the results that may be expected for
     the  year  ended  December  31, 2005.   These  unaudited  condensed
     consolidated  financial statements should be  read  in  conjunction
     with  the  financial  statements  and  footnotes  included  in  the
     Company's  Annual Report on Form 10-K for the year  ended  December
     31, 2004.

          The  consolidated  balance  sheet at  December  31,  2004,  as
     presented,  was  derived  from  the  audited  financial  statements
     included in the Company's Annual Report on Form 10-K for the period
     ended December 31, 2004.



<PAGE>

              Kenneth Cole Productions, Inc. and Subsidiaries
          Notes to Condensed Consolidated Financial Statements
                               (Unaudited)


     2.  Stock-Based Compensation

                The Company measures compensation expense for its stock-
     based   compensation  plans  using  the  intrinsic   value   method
     prescribed   in  Accounting  Principles  Board  Opinion   No.   25,
     "Accounting  for  Stock Issued to Employees"  ("APB  No.  25")  and
     related  Interpretations.  The Company has adopted  disclosure-only
     provisions of Statement of Financial Accounting Standards No.  123,
     "Accounting for Stock-Based Compensation" ("SFAS 123").

                Pro  forma  disclosures,  as required  by  Statement  of
     Financial  Accounting Standard No. 148, "Accounting for Stock-Based
     Compensation - Transition and Disclosure," are computed as  if  the
     Company  recorded compensation expense based on the fair value  for
     stock-based  awards or grants.  The following pro forma information
     includes the effects of the options discussed above.


     <TABLE>
     <CAPTION>
                                  Three Months Ended        Six Months Ended
                                      June 30,                    June 30,
                                   2005       2004           2005      2004
    <S>                       <C>          <C>         <C>         <C>
    Net  Income,as reported   $ 7,708,000  $ 7,027,000 $15,197,000 $14,420,000

    Add:  Stock-based
    compensation included
    in reported net income,
    net of related tax effects    224,000            -     224,000           -

       Deduct:  Stock-based
    employee compensation
    expense determined under
    fair value method,net of
    related tax effects        (3,023,000)    (672,000) (4,020,000) (1,408,000)
                              ------------  ----------- ----------- -----------
    Pro   forma net income   $  4,909,000  $ 6,355,000 $11,401,000  $13,012,000
                             ============  =========== ===========  ===========
    Earnings per share:

    Basic - as reported      $        .39  $       .35 $       .77  $      .72
    Basic - pro forma        $        .25  $       .32 $       .58  $      .65

    Diluted - as reported    $        .38  $       .34 $       .75  $      .70
    Diluted - pro forma      $        .24  $       .31 $       .56  $      .63

</TABLE>

<PAGE>


            Kenneth Cole Productions, Inc. and Subsidiaries
          Notes to Condensed Consolidated Financial Statements
                               (Unaudited)


     2.  Stock-Based Compensation (continued)

        On April 7, 2005, the Company accelerated the vesting of 250,000
     "out-of-the-money" stock options held by Kenneth D.  Cole.    These
     options  were originally granted on August 4, 2004 and  would  have
     vested   ratably   in  annual  installments  on  the   next   three
     anniversaries  of the date of grant.  The per share exercise  price
     for  these  options was  $32.09, which was above  the  $30.34  fair
     market  value of the Company's Class A common stock on the date  of
     acceleration.    The purpose of the acceleration was  to  eliminate
     future compensation expense recognition the Company would otherwise
     have   been  required  to  recognize  in  the  Consolidated  Income
     Statement with respect to these accelerated options once  SFAS  No.
     123R  "Share-Based  Payment"  ("SFAS 123R")  becomes  effective  in
     January 2006. The estimated future expense recognition that will be
     eliminated  is approximately $2,115,000.  This amount differs  from
     the  amount  previously reported in the Company's Form  8-K,  dated
     April 7, 2005, due to the deferral of SFAS 123R (See Note 12).  The
     acceleration  of options did not trigger an expense for  accounting
     purposes, as the stock options had no intrinsic value at  the  date
     of acceleration.

        During the three months ended June 30, 2005, the Company granted
     146,000  Class  A  common shares of restricted  stock  to  selected
     employees.  The shares have vesting periods up to four years.   The
     Company   recorded  the  total  compensation  expense  as  Deferred
     Compensation in the Condensed Consolidated Statement of Changes  in
     Shareholders' Equity, and recognized $224,000, net of related taxes
     of  $126,000, of compensation expense in the Condensed Consolidated
     Statement of Income for the three months ended June 30, 2005, which
     represents  the amortization of the original deferred  compensation
     on a straight-line basis over the vesting period.


     3.    Earnings Per Share

       The  Company  calculates earnings per share  in  accordance  with
     SFAS  No.  128, "Earnings Per Share."  Basic earnings per share  is
     calculated by dividing net income by weighted average common shares
     outstanding.   Diluted earnings per share is calculated  similarly,
     except that it includes the dilutive effect of the assumed exercise
     of securities under the Company's stock incentive plans.

<PAGE>

             Kenneth Cole Productions, Inc. and Subsidiaries
          Notes to Condensed Consolidated Financial Statements
                               (Unaudited)


     3. Earnings Per Share (continued)

     The following is an analysis of the differences between basic
     and diluted earnings per common share:

<Table>

<CAPTION>
                              Three Months Ended          Six Months Ended
                              June 30,   June 30,         June 30,  June 30,
                               2005        2004             2005      2004
<S>				     <C>         <C>            <C>         <C>
Weighted average
common shares outstanding    19,845,000  20,048,000     19,790,000  19,951,000

Effect  of  dilutive
securities:
    Restricted Stock              6,000                      6,000
    Stock options               467,000     679,000        456,000     718,000
                            -----------  ----------     ----------  ----------
Weighted average
 common shares outstanding
 and common share
 equivalents                 20,318,000  20,727,000     20,252,000  20,669,000
                            ===========  ===========    ==========  ==========

</TABLE>

     Stock options outstanding as of June 30, 2005 and 2004, aggregating
     903,000  and  30,000, respectively, have not been included  in  the
     diluted  per  share  calculations  since  their  effect  would   be
     antidilutive.


     4.  Comprehensive Income

       Comprehensive  income is comprised of net income, the  effect  of
     foreign  currency  translation, changes  in  unrealized  gains  and
     losses   on   forward  exchange  contracts  and  available-for-sale
     securities.   Comprehensive income for the six-month periods  ended
     June  30,  2005  and 2004 amounted to $14,928,000 and  $13,950,000,
     respectively.    Comprehensive income for the  three-month  periods
     ended June 30, 2005 and 2004 amounted to $7,675,000 and $7,164,000,
     respectively.

     5.   Derivative Instruments and Hedging Activities

       In  the  normal course of business, the Company routinely  enters
     into  forward  contracts  in anticipation of  future  purchases  of
     inventory denominated in Euros.  These forward contracts  are  used
     to hedge against the Company's exposure to changes in Euro exchange
     rates  to  protect  the  purchase price of merchandise  under  such
     commitments  and  are  not  held for  the  purpose  of  trading  or
     speculation.  The  Company has classified these contracts  as  cash
     flow  hedges  in  accordance  with SFAS  No.  133  "Accounting  for
     Derivative  Instruments  and Hedge Activities."   The  Company  had
     outstanding forward contracts of $16,000,000 at June 30, 2005  with
     maturity dates through January 2006.


             Kenneth Cole Productions, Inc. and Subsidiaries
          Notes to Condensed Consolidated Financial Statements
                               (Unaudited)


     5.   Derivative Instruments and Hedging Activities (continued)

       All  terms and conditions of the Company's forward contracts  are
     included  in  the  measurement of the related hedge  effectiveness.
     The  critical terms of the forward contracts are the  same  as  the
     underlying  forecasted transactions. As a result,  changes  in  the
     fair  value  of  the  contracts  should  be  highly  effective   in
     offsetting  changes in the expected cash flows from the  forecasted
     transactions.   No  gains or losses related to  ineffectiveness  of
     cash flow hedges were recognized in earnings during the three-  and
     six-  month  periods ended June 30, 2005.  At June  30,  2005,  the
     notional amount of the Company's forward contracts was $16,000,000,
     and  resulted in an unrealized loss of approximately $816,000,  net
     of  taxes, which was included in Other Comprehensive Income in  the
     Company's   Condensed   Consolidated  Statement   of   Changes   in
     Shareholders' Equity and as a decrease to inventory, the underlying
     exposure  on the Balance Sheet.  The Company expects to  reclassify
     all  of  the  unrealized loss from Other Comprehensive Income  into
     earnings  within the next seven months due to the actual executions
     of  foreign  exchange  contracts to purchase  merchandise  and  the
     ultimate sale of that merchandise.

     6.    Segment Information

       The  Company  has three reportable segments: Wholesale,  Consumer
     Direct  and  Licensing.   The  Company's  reportable  segments  are
     business  units  that  offer different  products  and  services  or
     similar  products through different channels of distribution.   The
     Wholesale  segment designs, sources and markets a  broad  range  of
     quality  footwear  and  handbags for wholesale  distribution.   The
     Consumer  Direct segment markets a broad selection of the Company's
     branded products, including licensee products for sale directly  to
     the  consumer  through  its  own channels  of  distribution,  which
     include  full price retail stores, outlet stores, catalogs  and  e-
     commerce    (at    website   addresses   www.kennethcole.com    and
     www.kennethcolereaction.com).    The   Licensing   segment    earns
     royalties  on  licensee  sales to third parties  of  the  Company's
     branded  products and royalties on the purchase and sale to foreign
     retailers  or  to  consumers  in foreign  countries.   The  Company
     maintains  control over quality and image and allows  licensees  to
     sell primarily to channels of distribution the same as, similar  to
     or  otherwise  consistent  with those of  the  Company's  Wholesale
     segment.  The Company evaluates performance and allocates resources
     based on profit or loss before income taxes from each segment.  The
     Wholesale  segment  is evaluated on income from  operations  before
     income  taxes.  The Consumer Direct segment is evaluated on  profit
     or  loss from operations before unallocated corporate overhead  and
     income  taxes.   The  Licensing segment is evaluated  on  royalties
     earned  and pretax segment profit.  Intersegment sales between  the
     Wholesale  and Consumer Direct segment include a markup,  which  is
     eliminated in consolidation.

<PAGE>


             Kenneth Cole Productions, Inc. and Subsidiaries
          Notes to Condensed Consolidated Financial Statements
                               (Unaudited)


     6.  Segment Information (continued)

	 Financial  information of the Company's reportable  segments
       is as follows (in thousands):

<TABLE>

<CAPTION>

                    Three   Months Ended            Three   Months Ended
                      June 30, 2005                   June 30, 2005
                      Consumer                          Consumer
            Wholesale  Direct Licensing Total  Wholesale Direct Licensing Total
<S>           <C>      <C>      <C>     <C>      <C>      <C>    <C>    <C>
Revenue from
external
customers     62,885   46,396   10,054  119,335  141,416  88,157 19,660 249,233
Intersegment
revenues       8,546                      8,546   18,746                 18,746
Segment
income (1)     5,556    3,371    8,013   16,940   16,425   1,701 15,635  33,761
Segment
assets                                           263,477  52,330  3,877 319,684

</TABLE>

<TABLE>

<CAPTION>

                    Three   Months Ended            Three   Months Ended
                      June 30, 2004                   June 30, 20
                      Consumer                          Consumer
            Wholesale  Direct Licensing Total  Wholesale Direct Licensing Total
<S>           <C>      <C>      <C>     <C>      <C>      <C>    <C>    <C>
Revenue from
external
customers     58,920   44,800    9,337  113,057  131,257  85,814 18,363 235,434
Intersegment
revenues       7,702                      7,702   15,890                 15,890
Segment
income (1)     4,307    3,471    7,910   15,688   12,468   3,820 15,307  31,595
Segment
assets                                           243,299  49,185  3,169 295,653


          (1)  Before elimination of intersegment profit, unallocated corporate
               overhead and income taxes.

</TABLE>


<PAGE>


                 Kenneth Cole Productions, Inc. and Subsidiaries
               Notes to Condensed Consolidated Financial Statements
                               (Unaudited)


     6.   Segment Information (continued)

     The reconciliation of the Company's reportable segment revenues,
     profit and loss, and assets are as follows (in thousands):

<TABLE>

<CAPTION>

                                 Three Months Ended            Six Months Ended
                                  June 30,    June 30,     June 30,    June 30,
                                   2005        2004         2005        2004
<S>                               <C>        <C>          <C>        <C>
Revenues
Revenues for external customers   $ 119,335  $ 113,057    $ 249,233  $ 235,434
Intersegment revenues                 8,546      7,702       18,746     15,890

Elimination of intersegment revenues (8,546)    (7,702)     (18,746)   (15,890)
                                   ---------  ---------    ---------  ---------
  Total  consolidated revenues    $ 119,335  $ 113,057    $ 249,233  $ 235,434
                                   =========  =========    =========  =========
</TABLE>

<TABLE>

<S>                               <C>        <C>          <C>        <C>
Income
Total profit for reportable
   segments                       $  16,940  $  15,688    $  33,761  $  31,595
Elimination of intersegment
   profit and unallocated
   corporate overhead                (4,897)    (4,354)     (10,017)    (8,336)
                                   ---------  ---------    ---------  ---------
   Total  income before
   income taxes                   $  12,043  $  11,334    $  23,744  $  23,259
                                   =========  =========    =========  =========
</TABLE>

<TABLE>

<S>                                                       <C>        <C>
Assets
Total assets for reportable
   segments                                               $ 319,684  $ 295,653
Elimination of intersegment
   inventory profit                                          (3,689)    (2,441)
                                                           ---------  --------
Total consolidated assets                                 $315,995   $ 293,212
                                                           =========  ========


     Revenues  from international customers were approximately 2.1%  and
     1.4%  of  the Company's consolidated revenues for the three  months
     ended June 30, 2005 and 2004, respectively, and approximately  2.6%
     and  1.6% of the Company's consolidated revenues for the six months
     ended June 30, 2005 and 2004, respectively.

</TABLE>

<PAGE>


               Kenneth Cole Productions, Inc. and Subsidiaries
          Notes to Condensed Consolidated Financial Statements
                               (Unaudited)

     7. Related Party

           The  Company has an exclusive license agreement  with  Iconix
     Brand  Group,  Inc.,  formerly Candies,  Inc.,  and  its  trademark
     holding  company, IP Holdings, LLC ("Candies"), to  use  the  Bongo
     trademark  in  connection  with  worldwide  manufacture,  sale  and
     distribution of women's, men's and children's footwear.  The  Chief
     Executive  Officer and Chairman of Candies is the  brother  of  the
     Company's  Chief Executive Officer and Chairman.  The initial  term
     of  the  agreement is through December 31, 2007,  with  options  to
     renew  through  December 31, 2016 based upon the  Company  reaching
     certain  sales  thresholds.  During these periods, the  Company  is
     obligated to pay Candies a percentage of net sales based  upon  the
     terms   of  the  agreement.   The  Company  recorded  approximately
     $315,000 and $630,000 in royalty and advertising expense to Candies
     for  the  three-month  and six-month periods ended  June  30,  2005
     respectively.   The  Company  recorded approximately  $238,000  and
     $566,000  in  royalty and advertising expense to  Candies  for  the
     three-month and six-month periods ended June 30, 2004 respectively.

     8. Legal Proceedings

          In  2004,  a purported class action lawsuit was filed  against
     the  Company in the Superior Court of California for the County  of
     Los Angeles.  The individual plaintiffs are current or former store
     managers or assistant managers who purport to bring suit on  behalf
     of  themselves  and  other similarly situated  store  managers  and
     assistant  managers. In 2005, a second purported class  action  was
     filed  on  behalf  of  floor supervisors.   In  each  lawsuit,  the
     plaintiffs allege, among other claims, that they worked  hours  for
     which  they were entitled to receive, but did not receive, overtime
     compensation  under  California law.  The  lawsuits  seek  damages,
     penalties,  restitution, reclassification and attorneys'  fees  and
     costs.  The  Company denies the allegations in each  complaint  and
     plans to defend the actions vigorously.

          In  addition, the Company is, from time to time,  a  party  to
     other  litigation that arises in the normal course of its  business
     operations.   The  Company is not presently a  party  to  any  such
     litigation that it believes would have a material adverse effect on
     its business operations.

     9.   New Agreements

          In  June  2005,  the  Company entered into  a  Stock  Purchase
     Agreement  (the  "Stock Purchase Agreement")  with  Bernard  Chaus,
     Inc.,  ("Chaus"), pursuant to which the Company purchased 6,000,000
     shares  of  Chaus common stock for an aggregate purchase  price  of
     $6,000,000.  The Stock Purchase Agreement provides the Company with
     one  demand  and  one  piggyback registration right.   The  Company
     recorded the shares at their fair value at the date of acquisition,
     and  classified the shares as "available for sale" under  SFAS  No.
     115   "Accounting  for  Certain  Investments  in  Debt  and  Equity
     Securities,"  which  is  included in Deposits  and  Sundry  in  the
     accompanying Consolidated Balance Sheet.

<PAGE>

              Kenneth Cole Productions, Inc. and Subsidies
             Kenneth Cole Productions, Inc. and Subsidiaries
          Notes to Condensed Consolidated Financial Statements
                               (Unaudited)


     9.  New Agreements (continued)

                In  addition,  the Company also entered into  a  license
     agreement  ("License Agreement") with Chaus, dated June  13,  2005.
     The  License Agreement grants Chaus an exclusive license to design,
     manufacture,  sell  and  distribute women's  sportswear  under  the
     Company's  trademark, Kenneth Cole Reaction.  The initial  term  of
     the  License Agreement expires on December 31, 2010. Chaus has  the
     option  to  renew the License Agreement for an additional  term  of
     three  years  if  it  meets  specified  sales  targets  and  is  in
     compliance with the agreement. The License Agreement provides  that
     the  Company receives payment of specified royalties on net  sales.
     The  License  Agreement  also requires  Chaus  to  achieve  certain
     minimum  sales  levels,  to pay certain minimum  royalties  and  to
     maintain  a  minimum  net worth. Chaus is  also  obligated  to  pay
     specified  percentages of net sales to support advertising  and  to
     expend a specified amount in the period ending December 31, 2007
     to support the initial launch of the Licensed Products.

     10.  Severance

                In  April  2004,  the Company entered  into  a  shutdown
     agreement  with  a  local  affiliate of the  International  Leather
     Goods,  Plastics,  Handbags  and Novelty  Workers  Union,  Local  I
     Division  of Local 342-50 United Food and Commercial Workers  Union
     in  conjunction  with  the  closing of  the  Company's  east  coast
     distribution  center.    In connection with  this  transition,  the
     Company  incurred  approximately $1.1 million in  aggregate  costs,
     including severance from the aforementioned agreement and the write-
     off  of unamortized leasehold improvements and moving costs, during
     the  three months ended June 30, 2004.   These costs were  expensed
     as  incurred in accordance with SFAS No. 146 "Accounting for  Costs
     Associated with Exit or Disposal Activity" within Selling,  General
     and Administrative Expenses in the Condensed Consolidated Statement
     of Income.

     11. Reclassifications

       Certain  amounts  in the Company's previous financial  statements
     have been reclassified to conform to the 2005 presentation.



     12. New Accounting Pronouncements

           In  December  2004, the Financial Accounting Standards  Board
     issued  SFAS  No.  123R,  which requires  the  Company  to  measure
     compensation  cost for all share-based payments at fair  value  for
     interim  and  annual  periods.  In April 2005, the  Securities  and
     Exchange  Commission  deferred  implementation  of  SFAS  123R  for
     certain  registrants to no later than the beginning  of  the  first
     fiscal  year  beginning  after  June  15,  2005.   The  Company  is
     currently evaluating the

<PAGE>

             Kenneth Cole Productions, Inc. and Subsidiaries
          Notes to Condensed Consolidated Financial Statements
                               (Unaudited)


     12. New Accounting Pronouncements (continued)

     requirements  and impact of SFAS 123R on the Company's consolidated
     financial statements, and expects to adopt the provisions  of  SFAS
     123R on January 1, 2006.

          In October 2004, Internal Revenue Code Section 965 was enacted
     as  part  of  the American Job Creation Act.  This is  a  temporary
     provision  that allows U.S. companies to repatriate  earnings  from
     their  foreign  subsidiaries at a reduced tax  rate  provided  that
     specified  conditions and restrictions are satisfied.  In addition,
     FASB Staff Position FAS 109-2 was issued to provide accounting  and
     disclosure  evidence relating to the repatriation  provision.   The
     Company  believes  the  range  of reasonably  possible  amounts  of
     unremitted earnings that is being considered for repatriation, as a
     result  of  this provision, is between $7 million and $12  million.
     The  related  reduction in income tax expense  is  expected  to  be
     between  $1.5 million to $3.0 million.  In addition, the  Company's
     2005  effective tax rate will decrease due to this provision.   The
     Company's Board of Directors approved the repatriation plan, and as
     such, the Company expects to adopt this in the second half of 2005.


     13. Subsequent Events

          On July 27, 2005, the Company's Board of Directors declared  a
     quarterly cash dividend of $0.16 per share payable on September 15,
     2005, which will be paid to shareholders of record at the close  of
     business on August 25, 2005.

<PAGE>

Item  2.  MANAGEMENT'S  DISCUSSION AND ANALYSIS OF  FINANCIAL  CONDITION  AND
RESULTS OF OPERATIONS

Forward-Looking Statements Disclosure

      The statements contained in this report which are not historical facts,
including,  without limitation, statements that relate to future  performance
and/or  statements regarding the Company's anticipated results  or  level  of
business  for  2005 or any other future period, may be deemed  to  constitute
"forward-looking  statements" within the meaning of  the  Private  Securities
Litigation  Reform  Act  of  1995.   Such statements  are  based  on  current
expectations  only,  and actual future results might differ  materially  from
those   projected  in  such  statements  due  to  a  number  of   risks   and
uncertainties, including, but not limited to, demand and competition for  the
Company's  products,  the ability to enter into new licensee  agreements,  to
maintain  and  renew existing licensing agreements and to  open  new  stores,
changes  in consumer preferences or fashion trends, events causing disruption
in  product  shipment,  change in import regulations, dependence  on  certain
large  customers and changes in the Company's relationships with vendors  and
other  resources.  The forward-looking statements contained herein  are  also
subject  to other risks and uncertainties that are described in the Company's
reports  and  registration statements filed with the Securities and  Exchange
Commission.   The  Company undertakes no obligation  to  publicly  update  or
revise any forward-looking statement, whether as a result of new information,
future results or otherwise.

Update on Critical Accounting Policies

       The  Company's  consolidated  financial  statements  are  prepared  in
accordance  with  accounting  principles generally  accepted  in  the  United
States, which require the Company to make estimates in the application of its
accounting policies based on the best assumptions, judgments and opinions  of
management.  For a summary of the Company's significant accounting  policies,
see the Company's consolidated financial statements included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2004.

Overview

      Kenneth  Cole Productions, Inc., designs, sources and markets  a  broad
range  of  fashion  footwear and handbags, and, through  license  agreements,
designs and markets apparel and accessories under its Kenneth Cole New  York,
Kenneth  Cole  Reaction, Unlisted, and Bongo brand names.  During  2004,  the
Company  introduced  the Tribeca trademark brand for  women's  footwear.   In
addition,  the  Company designs and sources footwear  and  handbags  for  its
customers  under its customers' own trademarks.  The Company's  products  are
targeted to appeal to fashion conscious consumers, reflecting a casual  urban
perspective and a lifestyle uniquely associated with Kenneth Cole.

      The  Company  markets  its products to more than 7,500  department  and
specialty  store locations, as well as through its Consumer Direct  business,
which  includes  an  expanding  base of retail and  outlet  stores,  consumer
catalogs and websites, including online e-commerce.

<PAGE>

      The  popularity of the Kenneth Cole New York and Kenneth Cole  Reaction
brand  names  among consumers has enabled the Company to expand  its  product
offerings  and  channels  of distribution through  licensing  agreements  and
allows  it to offer through these agreements a lifestyle collection of  men's
product  categories  such as tailored clothing, dress  shirts,  dress  pants,
sportswear,  neckwear,  briefcases, portfolios,  jewelry,  fragrance,  belts,
leather and fabric outerwear, swimwear, sunglasses, optical eyewear, watches,
luggage,  hosiery  and  small  leather  goods.   Women's  product  categories
currently being sold pursuant to license agreements include sportswear, small
leather  goods,  belts,  scarves  and  wraps,  hosiery,  leather  and  fabric
outerwear,   sunglasses,  optical  eyewear,  watches,   jewelry,   fragrance,
swimwear,  and  luggage.  In addition, the Company also  licenses  children's
apparel.

     The Company recorded net revenues of $119.3 million for the three months
ended  June 30, 2005; a 5.6% increase over the comparable period in the prior
year, and diluted earnings per share grew 11.8% to $0.38 from $0.34 over  the
second  quarter  of  2004. The Company also recorded net revenues  of  $249.2
million  for  the  six months ended June 30, 2005, a 5.9% increase  over  the
comparable period in the prior year and diluted earnings per share grew  7.1%
to  $0.75  from  $0.70 in the prior comparable year.  The  Company's  balance
sheet reflected $118.8 million in cash and marketable securities, and had  no
debt  as of June 30, 2005.  The Company's strategic plan to elevate and
reposition  its brands  continues.  As such, the Company continues to focus on
designing  and delivering  high  quality,  fashionable  products,  creating
efficient   and compelling retail environments, and maintaining close
partnerships  with  its licensees to ensure brand quality and distribution
integrity.

Results of Operations

     The  following  table  sets forth the Company's  condensed  consolidated
statements  of  income in thousands of dollars and as  a  percentage  of  net
revenues for the three and six months ended June 30, 2005 and June 30, 2004.

<TABLE>
<CAPTION>
                        Three Months Ended            Six Months Ended
                             June 30,                        June 30,
                          2005            2004          2005        2004

<S>             <C>        <C>   <C>       <C>   <C>      <C>   <C>      <C>
Net sales       $ 109,281  91.6% $103,720  91.7% $229,573 92.1% $217,071 92.2%
Royalty revenue    10,054   8.4    9,337    8.3    19,660   7.9   18,363  7.8
Net revenues      119,335 100.0  113,057  100.0   249,233 100.0  235,434 100.0
Gross Profit (1)   55,369  46.4   51,374   45.4   111,535  44.8  103,842  44.1
Selling, general
 & administrative
 expenses (2)      44,161  37.0%   40,382  35.7    89,143  35.8   81,174 34.5
Operating Income   11,208   9.4%   10,992   9.7    22,392   9.0   22,668  9.6
Interest
 income,net           835   0.7%      342   0.3     1,352   0.5      591  0.3
Income before
 income taxes      12,043  10.1%   11,334  10.0    23,744   9.5   23,259  9.9
Income
 Tax expense        4,335   3.6%    4,307   3.8     8,547   3.4    8,839  3.8
Net income          7,708   6.5%    7,027   6.2    15,197   6.1   14,420  6.1

</TABLE>

  (1)  Gross Profit  may  not be comparable to other entities,  since  some
     entities include the costs related to their distribution network in cost of
     goods sold and others entities, similar to the Company, exclude these
     costs from gross profit, including them instead in a line item such as
     selling general and administrative expenses.
  (2)  Included in SG&A for the three and six months ended June 30, 2004 were
     $1.1 million in severance and other costs in connection with the closing
     of the Company's east coast distribution facility and transfer of the
     operations to a third-party service provider.


<PAGE>


Three Months Ended June 30, 2005 Compared to Three Months Ended June 30, 2004

REVENUES:   Consolidated net revenues increased $6.3  million,  or  5.6%,  to
$119.3  million for the three months ended June 30, 2005 from $113.1  million
for  the three months ended June 30, 2004.  The increase in revenues occurred
in all of the Company's segments: Wholesale, Consumer Direct and Licensing as
further  described below in the sections entitled "Net Sales" and  "Licensing
Revenue."

NET  SALES:  Wholesale net sales (excluding sales to the  Company's  Consumer
Direct  business segment) increased $4.0 million, or 6.7%, to $62.9  million,
for  the  three months ended June 30, 2005 from $58.9 million for  the  three
months  ended  June  30,  2004.  This increase is primarily  attributable  to
increased  sales of the Company's Kenneth Cole Reaction branded  footwear  in
excess of 13%, as compared to the three months ended June 30, 2004.  This was
partially  offset by declines in sales of Kenneth Cole New York footwear  and
the Company's volume businesses of Unlisted and Bongo branded footwear.

Net sales in the Company's Consumer Direct segment increased $1.6 million, or
3.6%,  to  $46.4 million for the three months ended June 30, 2005 from  $44.8
million for the three months ended June 30, 2004.  The increase in net  sales
is  due primarily to new stores opened in 2005 and that portion of 2005 sales
for  stores not open for all of 2004, increased by $2.4 million, offset by  a
decrease  in  comparable store sales of $1.7 million or  4%.   The  remaining
increase  in  sales  is  attributable  to  the  Company's  Catalog  /Internet
operations and Gift Program.

LICENSING REVENUE:  Royalty revenue increased 7.7% to $10.1 million  for  the
three months ended June 30, 2005 from $9.3 million for the three months ended
June  30,  2004.   The growth in licensing revenues was primarily  driven  by
incremental  minimum  royalties from existing  licensee  product  categories,
specifically fragrance, women's jewelry and watches.

GROSS  PROFIT:   Consolidated gross profit, as a percentage of net  revenues,
increased  to 46.4% for the three months ended June 30, 2005 from  45.4%  for
the  three months ended June 30, 2004.  This increase was primarily a  result
of  an  increase in margin in the Consumer Direct segment.  The  increase  in
gross  profit from the Consumer Direct segment resulted from improved product
assortment  resulting in better sell-thrus.  The increase in  margin  in  the
Consumer Direct segment was offset by the mix of the Company's revenues  from
its  Wholesale  and Consumer Direct segments.  Although the  Consumer  Direct
segment  operates at a higher gross profit level than the Wholesale  segment,
its  revenue as a percentage of net revenue decreased to 38.9% for the  three
months  ended  June 30, 2005 from 39.6% for the three months ended  June  30,
2004.    Revenues from the Wholesale segment as a percentage of  net  revenue
increased  to 52.7% for the three months ended June 30, 2005 from  52.1%  for
the three months ended June 30, 2004.

SELLING,   GENERAL  AND  ADMINISTRATIVE  EXPENSES:   Selling,   general   and
administrative  expenses,  including  warehousing  and  receiving   expenses,
increased  9.4%  to $44.2 million (or 37.0% of net revenues)  for  the  three
months ended June 30, 2005 from $40.4 million (or 35.7% of net revenues)  for
the  three  months  ended June 30, 2004.  Expenses, as a  percentage  of  net
revenues,  increased primarily due to investments in people and systems,  the
Company's  loss  of  leverage on its comparable stores' sales  base  and  the
increase  in  fixed  costs  from new and expanding retail  stores.   Included
within  Selling,  General, and Administrative expenses for the  three  months
ended June 30, 2004 was the one-time cost of $1.1 million associated with the
closing  and transition of the Company's east cost distribution center  to  a
third-party service provider.

<PAGE>

INTEREST  AND  OTHER  INCOME:  Interest and other income  increased  to  $0.8
million  for the three months ended June 30, 2005 from $0.3 million  for  the
three months ended June 30, 2004.  The increase was primarily due to a higher
average rate of return on the Company's investments.

INCOME  TAXES:   The Company's effective tax rate decreased to  36%  for  the
three  months ended June 30, 2005 from 38.0% for the three months ended  June
30,  2004 as a result of a temporary provision that allows U.S. companies  to
repatriate  earnings from their foreign subsidiaries at a reduced  tax  rate.
(See "New Accounting and Tax Developments.")

NET  INCOME:  As a result of the foregoing, net income increased 9.7% for the
three months ended June 30, 2005 to $7.7 million (6.5% of net revenues)  from
$7.0 million (6.2% of net revenues) for the three months ended June 30, 2004.

Six months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004

REVENUES:  Consolidated net revenues increased 5.9% to $249.2 million for the
six  months ended June 30, 2005 from $235.4 million for the six months  ended
June  30,  2004.   This  increase is attributable primarily  to  the  factors
described below in the sections entitled "Net Sales" and "Licensing Revenue."

NET  SALES:  Wholesale net sales (excluding sales to the  Company's  Consumer
Direct  business segment) increased $10.1 million or 7.7% for the six  months
ended  June 30, 2005 to $141.4 million from $131.3 million for the six months
ended  June 30, 2004.   This increase is primarily attributable to  increased
sales of the Company's Kenneth Cole Reaction branded footwear, in addition to
increased  sales  in  the Company's handbag business.  Sales  increases  were
offset by declines in Kenneth Cole New York footwear and the Company's volume
businesses of Bongo and Unlisted branded footwear.

Net sales in the Company's Consumer Direct segment increased $2.4 million  or
2.7%  to  $88.2  million for the six months ended June 30, 2005  compared  to
$85.8  million  for the six months ended June 30, 2004. The increase  in  net
sales is due primarily to new stores opened in 2005 and that portion of  2005
sales  for stores not open for all of 2004, increased by $4.1 million, offset
by  a  decrease  in  comparable store sales of  $3.9  million  or  4.9%.  The
remaining increase in sales is attributable to the Company's Catalog/Internet
operations and Gift Program.

LICENSING REVENUE:  Royalty revenue increased 7.1% to $19.7 million  for  the
six  months  ended June 30, 2005 from $18.4 million for the six months  ended
June  30,  2004.  This increase is attributable primarily to the  incremental
minimum  royalties from the Company's existing licensees, most  significantly
fragrance and watches.

GROSS  PROFIT:   Consolidated gross profit, as a percentage of net  revenues,
increased to 44.8% for the six months ended June 30, 2005 from 44.1% for  the
six  months ended June 30, 2004.  This was primarily a result of an  increase
in  margin  in  the  Consumer  Direct segment, while  the  Wholesale  segment
produced  mild  increases.  The increase in gross margin  from  the  Consumer
Direct segment resulted from improved product assortments resulting in better
sell-thrus, while the Wholesale segment improved sell-thrus early in the year
from  changes in sourcing.  In addition, changes in the mix of the  Company's
revenues  from  its  Wholesale  and Consumer Direct  segments  also  affected
consolidated gross margins.  Although the Consumer Direct segment operates at
a  higher  gross profit level than the Wholesale segment, its  revenue  as  a
percentage  of net revenue decreased to 35.4% for the six months  ended  June
30,  2005 from 36.4% for the six months ended June 30, 2004.   Revenues  from
the  Wholesale segment as a percentage of net revenue increased to 56.7%  for
the  six months ended June 30, 2005 from 55.8% for the six months ended  June
30, 2004.

<PAGE>

SELLING,   GENERAL  AND  ADMINISTRATIVE  EXPENSES:   Selling,   general   and
administrative  expenses,  including  warehousing  and  receiving   expenses,
increased 9.8% to $89.1 million (or 35.8% of net revenues) for the six months
ended June 30, 2005 from $81.2 million (or 34.5% of net revenues) for the six
months  ended  June  30, 2004.  Expenses, as a percentage  of  net  revenues,
increased  primarily due to investments in people and systems, the  Company's
loss  of  leverage on its comparable stores' sales base and the  increase  in
fixed  costs from new and expanding retail stores.  Included within  Selling,
General,  and Administrative expenses for the six months ended June 30,  2004
was  the  one-time  cost  of $1.1 million associated  with  the  closing  and
transition  of  the Company's east cost distribution center to a  third-party
service provider.

INTEREST  AND  OTHER  INCOME:  Interest and other income  increased  to  $1.4
million for the six months ended June 30, 2005 from approximately $.6 million
for  the six months ended June 30, 2004.  The primary increase was due  to  a
higher average rate of return on the Company's investments.

INCOME TAXES:  The Company's effective tax rate decreased to 36% for the  six
months ended June 30, 2005 from 38.0% for the six months ended June 30,  2004
as a result of a temporary provision that allows U.S. companies to repatriate
earnings  from  their  foreign subsidiaries at  a  reduced  tax.   (See  "New
Accounting and Tax Developments.")

NET  INCOME:  As a result of the foregoing, net income increased 5.4% for the
six  months ended June 30, 2005 to $15.2 million (6.1% of net revenues)  from
$14.4 million (6.1% of net revenues) for the six months ended June 30, 2004.

New Accounting and Tax Developments

      In  December 2004, the Financial Accounting Standards Board issued SFAS
No.  123R ("SFAS 123R"), Share-Based Payment.  SFAS 123R requires the Company
to  measure compensation cost for all share-based payments at fair value  for
interim  and  annual  periods.  In April 2005, the  Securities  and  Exchange
Commission deferred implementation of SFAS 123R for certain registrants to no
later  than the beginning of the first fiscal year beginning after  June  15,
2005. The Company is currently evaluating the requirements and impact of SFAS
123R on the Company's consolidated financial statements, and expects to adopt
the provisions of SFAS 123R on January 1, 2006.

      In  October 2004, Internal Revenue Code Section 965 was enacted as part
of  the American Job Creation Act.  This is a temporary provision that allows
U.S.  companies to repatriate earnings from their foreign subsidiaries  at  a
reduced  tax  rate  provided that specified conditions and  restrictions  are
satisfied.  In addition, FASB Staff Position FAS 109-2 was issued to  provide
accounting  and  disclosure evidence relating to the repatriation  provision.
The  Company believes the range of reasonably possible amounts of  unremitted
earnings  that  is  being considered for repatriation, as a  result  of  this
provision,  is between $7 million and $12 million.  The related reduction  in
income  tax  expense is expected to be between $1.5 million to $3.0  million.
In  addition, the Company's 2005 effective tax rate will decrease due to this
provision.  The Company's Board of Directors approved the repatriation  plan,
and as such, the Company expects to adopt this in the second half of 2005.


<PAGE>

Liquidity and Capital Resources

     The Company uses cash from operations as the primary source of financing
for  its  expansion and seasonal requirements.  Cash requirements  vary  from
time  to  time  as a result of the timing of the receipt of merchandise  from
suppliers,  the delivery by the Company of merchandise to its customers,  and
the  level of accounts receivable and due from factors balances.  At June 30,
2005  and  December  31, 2004 working capital was $179.2 million  and  $173.0
million, respectively.

     Cash  provided  by operating activities was $13.0 million  for  the  six
months  ended  June  30, 2005, compared to $10.1 million  used  in  operating
activities  for  the six months ended June 30, 2004.  The  increase  in  cash
flows  provided  by operations is primarily attributable  to  a  decrease  in
inventory purchases and the timing of payables.

     Net cash used in investing activities decreased to $40.9 million for the
six  months  ended June 30, 2005 from $46.9 million for the six months  ended
June  30, 2004.  Investing activities for the six months ended June 30,  2005
and  2004  were primarily for capital expenditures and marketable  securities
and  other  investments.  Capital expenditures for new retail store  openings
and  expansions were approximately $4.6 million and $2.2 million for the  six
months  ended  June 30, 2005 and June 30, 2004, respectively.  The  remaining
expenditures were used primarily for information technology and office build-
out  and  renovations.   In  addition, $29.5 million  was  used  to  purchase
marketable  securities, and $6 million was used to purchase 6 million  shares
of  Bernard Chaus, Inc., in connection with the Company's licensing agreement
with  Bernard  Chaus, Inc., during the six months ended June 30,  2005.   The
Company  purchased  $43.0  million of marketable securities  during  the  six
months ended June 30, 2004.

     Net  cash  used  in financing activities was $3.1 million  for  the  six
months ended June 30, 2005 compared to  $0.4 million for the six months ended
June  30,  2004.    During the six months ended June 30,  2005,  the  Company
declared  and paid quarterly cash dividends of approximately $6.3 million  to
common stock shareholders compared to $4.8 million of dividends declared  and
paid during the six months ended June 30, 2004. This was primarily offset  by
proceeds  from the exercise of stock options of $3.1 million during  the  six
months  ended  June  30,  2005  compared to $4.3  million  of  proceeds  from
exercises during the six months ended June 30, 2004.

The  Company's  material obligations under contractual agreements,  primarily
commitments for future payments under operating lease agreements as  of  June
30, 2005, are summarized as follows:
<TABLE>
<CAPTION>
                               Payments Due by Period
                      Total      1 year or    2-3 years   4-5 years   After 5
                                   less                                years
<S>			<C>          <C>          <C>         <C>          <C>
Operating Leases
 and Other
 Obligations      $202,692,000 $ 26,063,000 $74,118,000 $21,722,000 $80,789,000

   Purchase
   Obligations     63,712,000   63,712,000
                 ---------------------------------------------------------------
   Total
   Contractual
   Obligations   $266,404,000  $89,775,000 $74,118,000 $21,722,000 $80,789,000
                ==============================================================
</TABLE>
<PAGE>

	The  Company  utilizes forward contracts to hedge  its  cost  on  future
purchases  of inventory in Euros. These forward contracts are used  to  hedge
against  the  Company's  exposure to changes in the Euro  exchange  rates  to
protect the purchase price of merchandise under such commitments and are  not
held for the purpose of trading or speculation. At June 30, 2005, the Company
had  forward  contracts  totaling $16.0 million in  notional  value  with  an
unrealized loss of $816,000, net of taxes.

      In  2004, the Company entered into an agreement to purchase the  office
building that it is currently leasing for its corporate headquarters  in  New
York  City  providing approximately 119,500 square feet of office  space  for
approximately $24 million.  The closing date must occur by May 2006, with the
specific timing to be determined by the parties based on the ability  of  the
current landlord to satisfy certain terms and conditions.

     The  Company currently has a line of credit, which allows for borrowings
and  letters  of  credit up to a maximum of $25 million  to  finance  working
capital  requirements.  The Company has no outstanding  advances  under  this
line  of  credit; however, amounts available under the line  of  credit  were
reduced by $6.7 million in standby letters of credit and $0.8 million in open
letters of credit to $17.5 million at June 30, 2005.

     The  Company  believes  that  it  will  be  able  to  satisfy  its  cash
requirements  for  the  next  year, including  requirements  for  its  retail
expansion  and  renovations, office build-out of its corporate  headquarters,
the  purchase of the New York City corporate headquarters, dividend payments,
and  enhancements to its information systems, primarily with cash  flow  from
operations and current cash levels.

           The  foregoing commentary should be considered to fall within  the
coverage  of  the  "Safe  Harbor  Statement"  under  the  Private  Securities
Litigation reform Act of 1995 included in this report.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     The  Company does not believe it has a material exposure to market risk.
The Company is primarily exposed to currency exchange rate risks with respect
to  its inventory transactions denominated in Euros.  Business activities  in
various  currencies  expose the Company to the risk  that  the  eventual  net
dollar  cash  flows from transactions with foreign suppliers  denominated  in
foreign  currencies may be adversely affected by changes in  currency  rates.
The  Company manages these risks by utilizing forward contracts to hedge  its
cost  on  future purchases.  The Company does not enter into foreign currency
transactions  for speculative purposes.   At June 30, 2005, the  Company  had
forward  contracts totaling $16 million in notional value with an  unrealized
loss  of  $816,000, net of taxes. The Company's earnings may also be affected
by  changes in short-term interest rates as a result of borrowings under  its
line  of  credit facility.  At the Company's borrowing levels, a two  percent
increase in interest rates affecting the Company's credit facility would  not
have a material effect on the Company's year-to-date earnings.

<PAGE>

Item 4.  Controls and Procedures

Evaluation of disclosure controls and procedures

      The  Company's Chief Executive Officer and Chief Financial Officer have
evaluated  the  effectiveness  of  the  Company's  "disclosure  controls  and
procedures"  (as defined in Rules 13a-15(e) and 15d-15(e) of  the  Securities
Exchange Act of 2004, as amended) as of the end of the period covered by this
quarterly  report, and have concluded that the Company's disclosure  controls
and   procedures  were  effective  and  designed  to  ensure  that   material
information   relating   to  the  Company  and  the  Company's   consolidated
subsidiaries would be made known to them by others within those  entities  to
allow timely decisions regarding required disclosures.

Changes in internal control over financial reporting

      There were no changes in the Company's internal controls over financial
reporting  during  the  period covered by this report  that  have  materially
affected,  or  are  reasonably  likely to materially  affect,  the  Company's
internal control over financial reporting.

<PAGE>

Part II - OTHER INFORMATION

Item 1.                              Legal Proceedings.

     In  2004, a purported class action lawsuit was filed against the Company
in  the  Superior  Court of California for the County of  Los  Angeles.   The
individual  plaintiffs  are  current or former store  managers  or  assistant
managers  who  purport  to  bring  suit on behalf  of  themselves  and  other
similarly situated store managers and assistant managers. In 2005,  a  second
purported  class  action was filed on behalf of floor supervisors.   In  each
case,  the plaintiffs allege, among other claims, that they worked hours  for
which   they  were  entitled  to  receive,  but  did  not  receive,  overtime
compensation  under  California law. The lawsuits  seek  damages,  penalties,
restitution,  reclassification and attorneys' fees  and  costs.  The  Company
denies  the  allegations in each complaint and plans to  defend  the  actions
vigorously.

      In  addition,  the  Company is, from time to time,  a  party  to  other
litigation that arises in the normal course of its business operations.   The
Company  is  not  presently a party to any such litigation that  it  believes
would have a material adverse effect on its business operations.


Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.  None

Item 3.Defaults Upon Senior Securities. None

Item 4.Submission of Matters to a Vote of Security Holders.

     (a) Kenneth Cole Productions, Inc.'s Annual Meeting of Shareholders was
held on May 26, 2005.

       (b)Election  of Directors - All nominees were elected through  proxies
       solicited  pursuant  to  Regulation  14A  under  the  Securities   and
       Exchange  Act  of  1934,  as amended.  There was  no  solicitation  in
       opposition  to management's nominees as listed in the Proxy Statement,
       and  each  of the nominees was elected to hold office until  the  next
       Annual  Meeting of Shareholders.  In addition, the Directors  who  did
       not  participate  in the election, but will serve after  the  election
       are Philip R. Peller and Martin E. Franklin

     (c) Matters voted on at the Annual Meeting of Shareholders included, (i)
       the  election of directors, (ii) the ratification of the selection  of
       the  Independent Registered Public Accountant Firm for the 2005 fiscal
       year, and (iii) the ratification of the amendment to the Kenneth  Cole
       Productions, Inc. 2004 Stock Incentive Plan.

     The results of the election of directors were as follows:

                               FOR        AGAINST/ABSTAIN     BROKER NON- VOTE

     Paul Blum               88,084,622        2,428,537            0
     Kenneth D. Cole         88,219,650        2,293,509            0
     Robert C. Grayson        9,309,154          649,035            0
     Denis F. Kelly           9,289,245          668,944            0
     Philip B. Miller        89,864,683          648,476            0

<PAGE>

	Holders  of  11,711,289 shares of Class A Common  Stock,  and  8,055,497
     shares of Class B Common Stock, constituting approximately 98.0% of  the
     shares  entitled  to vote, were present in person or  by  proxy  at  the
     Annual  Meeting of Shareholders.  Each record holder of Class  A  Common
     Stock is entitled to one vote per share, and each record holder of Class
     B  Common Stock is entitled to 10 votes per share.  Holders of  Class  A
     Common  Stock voted separately to elect Robert C. Grayson and  Denis  F.
     Kelly.

     With regard to the ratification of the appointment of Ernst & Young LLP
     as the Company's                             Independent Registered
     Public Accounting Firm, the results were as follows:

                FOR          AGAINST        ABSTAIN      BROKER NON-VOTE
            90,475,470        33,642          4,047             0


     With regard to the ratification of the amendment to the Kenneth Cole
     Productions, Inc. 2004 Stock Incentive Plan, the results were as
     follows:

                FOR          AGAINST        ABSTAIN      BROKER NON-VOTE
            82,097,271     6,245,338        824,125          1,346,425


Item 5.                            Other Information. None

Item 6.   Exhibits.

10.21 Stock Purchase Agreement by and between Bernard Chaus, Inc. and Kenneth
    Cole Productions, Inc. dated June 13, 2005.

31.1    Certification  of  Chief  Executive Officer  pursuant  to  Securities
    Exchange Act Rule 13a-14 and 15d-14, as adopted pursuant to Section 302 of
    the Sarbanes-Oxley Act of 2002.
31.2    Certification  of  Chief  Financial Officer  pursuant  to  Securities
    Exchange Act Rule 13a-14 and 15d-14, as adopted pursuant to Section 302 of
    the Sarbanes-Oxley Act of 2002.
32.1   Certification of Chief Executive Officer pursuant to 18 U.S.C. Section
    1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2   Certification of Chief Financial Officer pursuant to 18 U.S.C. Section
    1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


 <PAGE>



                               SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                   Kenneth Cole Productions, Inc.
                                   Registrant



August 5, 2005                     /s/ DAVID P. EDELMAN
                                   ---------------------
                                   David P. Edelman
                                   Chief Financial Officer


<PAGE>

                                                                 Exhibit 31.1

                CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Kenneth D. Cole, certify that:

1.  I have reviewed this quarterly report on Form 10-Q being filed by Kenneth
Cole Productions, Inc.;

2.   Based  on my knowledge, the report does not contain any untrue statement
of  a  material fact or omit to state a material fact necessary to  make  the
statements  made, in light of the circumstances under which  such  statements
were made, not misleading with respect to the period covered by the report;

3.   Based  on  my  knowledge, the financial statements, and other  financial
information  included in the report, fairly present in all material  respects
the  financial  condition,  results  of operations  and  cash  flows  of  the
registrant as of, and for, the periods presented in the report;

4.   The  registrant's  other certifying officer and I  are  responsible  for
establishing and maintaining disclosure controls and procedures  (as  defined
in  Exchange  Act  Rules 13a-15(e) and 15d-15(e)) and internal  control  over
financial  reporting  (as defined in Exchange Act Rules  13a-15(f)  and  15d-
15(f)) for the registrant and have:

  (a)   Designed  such  disclosure controls and procedures,  or  caused  such
     disclosure controls and procedures to be designed under our supervision to
     ensure that material information relating to the registrant, including its
     consolidated  subsidiaries, is made known to us by others  within  those
     entities, particularly during the period in which this quarterly report is
     being prepared;

  (b)  Designed such internal control over financial reporting, or caused such
     internal  control  over  financial reporting to be  designed  under  our
     supervision, to provide reasonable assurance regarding the reliability of
     financial reporting and the preparation of financial statements for
     external purposes in accordance with generally accepted accounting
     principles;

(c)  Evaluated the effectiveness of the registrant's disclosure controls and
     procedures  and  presented  in this report  our  conclusions  about  the
     effectiveness of the disclosure controls and procedures, as of the end of
     the period covered by this report based on such evaluation; and

  (d)Disclosed in this report any change in the registrant's internal control
     over financial reporting that occurred during the registrant's most recent
     fiscal quarter that has materially affected, or is reasonably likely  to
     materially  affect,  the  registrant's internal control  over  financial
     reporting; and

<PAGE>

5.   The registrant's other certifying officer and I have disclosed, based on
our  most recent evaluation of internal control over financial reporting,  to
the  registrant's auditors and the audit committee of the registrant's  board
of directors (or persons performing the equivalent functions):

  (a)   All significant deficiencies and material weaknesses in the design or
     operation of internal control over financial reporting which are
     reasonable likely  to adversely affect the registrant's ability to record,
     process, summarize and report financial information; and

  (b)   Any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal control
     over financial reporting.




                                   By:       /s/ KENNETH D. COLE
                                             ---------------------------

                                             Kenneth D. Cole
                                             Chief Executive Officer



Date:  August 5, 2005

<PAGE>

                                                                  Exhibit 31.2

                CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, David P. Edelman, certify that:

1.  I have reviewed this quarterly report on Form 10-Q being filed by Kenneth
Cole Productions, Inc.;

2.    Based on my knowledge, the report does not contain any untrue statement
of  a  material fact or omit to state a material fact necessary to  make  the
statements  made, in light of the circumstances under which  such  statements
were made, not misleading with respect to the period covered by the report;

3.   Based  on  my  knowledge, the financial statements, and other  financial
information  included in the report, fairly present in all material  respects
the  financial  condition,  results  of operations  and  cash  flows  of  the
registrant as of, and for, the periods presented in the report;

4.   The  registrant's  other certifying officer and I  are  responsible  for
establishing and maintaining disclosure controls and procedures  (as  defined
in  Exchange  Act  Rules 13a-15(e) and 15d-15(e)) and internal  control  over
financial  reporting  (as defined in Exchange Act Rules  13a-15(f)  and  15d-
15(f)) for the registrant and have:

  (a)   Designed  such  disclosure controls and procedures,  or  caused  such
     disclosure controls and procedures to be designed under our supervision to
     ensure that material information relating to the registrant, including its
     consolidated  subsidiaries, is made known to us by others  within  those
     entities, particularly during the period in which this quarterly report is
     being prepared;

  (b)  Designed such internal control over financial reporting, or caused such
     internal  control  over  financial reporting to be  designed  under  our
     supervision, to provide reasonable assurance regarding the reliability of
     financial reporting and the preparation of financial statements for
     external purposes in accordance with generally accepted accounting
     principles;

(c)  Evaluated the effectiveness of the registrant's disclosure controls and
     procedures  and  presented  in this report  our  conclusions  about  the
     effectiveness of the disclosure controls and procedures, as of the end of
     the period covered by this report based on such evaluation; and

  (d)Disclosed in this report any change in the registrant's internal control
     over financial reporting that occurred during the registrant's most recent
     fiscal quarter that has materially affected, or is reasonably likely  to
     materially  affect,  the  registrant's internal control  over  financial
     reporting; and

5.   The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,  to
the registrant's auditors and the audit committee of the registrant's  board
of directors (or persons performing the equivalent functions):

  (a)   All significant deficiencies and material weaknesses in the design or
     operation of internal control over financial reporting which are
     reasonably likely  to adversely affect the registrant's ability to record,
     process, summarize and report financial information; and

  (b)   Any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal control
     over financial reporting.




                                   By:  /s/ DAVID P. EDELMAN
                                        ------------------------
                                        David P. Edelman
                                        Chief Financial Officer



Date:  August 5, 2005


<PAGE>



                       CERTIFICATION PURSUANT TO
                         18 U.S.C. SECTION 1350,
                         AS ADOPTED PURSUANT TO
              SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In  connection  with the Quarterly Report of Kenneth Cole  Productions,  Inc.
(the  "Company") on Form 10-Q for the period ending June 30,  2005  as  filed
with  the  Securities  and  Exchange  Commission  on  the  date  hereof  (the
"Report"),  I, Kenneth D. Cole, Chairman and Chief Executive Officer  of  the
Company, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that:
           (1)  The  Report fully complies with the requirements  of  Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
          (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations  of  the
Company.

/s/ KENNETH D. COLE
--------------------
Kenneth D. Cole
Chairman and Chief Executive Officer
Kenneth Cole Productions, Inc.
August 5, 2005

<PAGE>


                                                                   Exhibit 32.2
                        CERTIFICATION PURSUANT TO
                         18 U.S.C. SECTION 1350,
                         AS ADOPTED PURSUANT TO
              SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection  with the Quarterly Report of Kenneth Cole  Productions,  Inc.
(the  "Company") on Form 10-Q for the period ending June 30,  2005  as  filed
with  the  Securities  and  Exchange  Commission  on  the  date  hereof  (the
"Report"),  I,  David  P. Edelman, Chief Financial Officer  of  the  Company,
certify,  pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906  of
the Sarbanes-Oxley Act of 2002, that:
           (1)  The  Report fully complies with the requirements  of  Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
           (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations  of  the
Company.

/s/ DAVID P. EDELMAN
--------------------
David P. Edelman
Chief Financial Officer
Kenneth Cole Productions, Inc.
August 5, 2005


<PAGE>


                                                          Exhibit  10.21
                         STOCK PURCHASE AGREEMENT

          THIS  AGREEMENT (the "Agreement") is made as of June 13,  2005,  by
and   between   Kenneth  Cole  Productions,  Inc.,  a  New  York  corporation
("Purchaser"),  and Bernard Chaus, Inc., a New York corporation  ("Company").
Unless  otherwise  provided, capitalized terms used  herein  are  defined  in
Article 6 below.

          WHEREAS,  subject  to the terms and conditions  set  forth  herein,
Purchaser desires to acquire from the Company six million (6,000,000)  shares
(the  "Acquired  Stock") of common stock, par value $0.01 per  share  of  the
Company  (the "Common Stock"), and the Company desires to issue and  sell  to
Purchaser  the  Acquired Stock subject to the terms and  conditions  of  this
Agreement.

          WHEREAS,  the parties hereto desire to provide for the registration
under  the Securities Act of the disposition of the shares of Acquired Stock,
on the terms and conditions set forth herein.

          NOW,  THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:


ARTICLE 1.

PURCHASE AND SALE OF STOCK

     1.1. Purchase and Sale of Acquired Stock.  At the closing of the
transactions contemplated by this Agreement (the "Closing"), upon the terms
and subject to the  conditions set forth in this Agreement, the Company shall
issue,  sell,assign,  transfer and convey to Purchaser, and Purchaser shall
purchase  and acquire from the Company, the Acquired Stock.

1.2. Purchase Price.  The aggregate purchase price for the Acquired Stock
(the "Purchase Price") shall be six million dollars ($6,000,000).

1.3. Manner of Payment of Purchase Price.  At the Closing, Purchaser shall
pay the Purchase Price by wire transfer of immediately available funds to the
Company, made to such bank account or accounts as the Company shall specify
by written notice to Purchaser delivered in sufficient time to allow for the
transfer to be so made in the ordinary course.

1.4. Time and Place of Closing.  The Closing shall take place at the offices
of the Company at 10:00 A.M. on the date this Agreement is executed and
delivered by the parties hereto or on such other date as is mutually
agreeable to Purchaser and the Company.  The date of the Closing is herein
referred to as the "Closing Date."

1.5. Manner of Delivery of Shares.  At the Closing, the Company shall deliver
to Purchaser an irrevocable instruction letter in the form annexed hereto as
Exhibit A to its transfer agent with respect to the issue to Purchaser of a
stock certificate representing all of the Acquired Stock (the "Instruction
Letter").

<PAGE>

ARTICLE 2.

CLOSING DELIVERIES

     2.1.  Company Deliveries.  At the Closing, the Company shall deliver  to
Purchaser the Instruction Letter.

     2.2. Purchaser Deliveries.  At the Closing, Purchaser shall deliver to the
Company the Purchase Price payable in accordance with Section 1.3 of this
Agreement.

ARTICLE 3.

REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY

The Company represents and warrants to Purchaser that:
     3.1.  Organization  and Corporate Power.  Each of the  Company  and  its
subsidiaries  is  an  entity duly organized, validly  existing  and  in  good
standing  under  the  laws  of the state of its organization.   Each  of  the
Company  and  its subsidiaries has all requisite power to own its  properties
and  to  carry  on  its  business as it is now being conducted  and  is  duly
licensed or qualified to do business in each jurisdiction in which the nature
of  its  business  or the ownership or leasing of its properties  makes  such
license  or  qualification necessary, except where the failure to  effect  or
obtain  such  qualification,  individually or in  the  aggregate,  would  not
reasonably be expected to have a Material Adverse Effect on the Company.

     3.2. Authority.  The Company has all requisite corporate power and
authority
(a) to execute and deliver this Agreement and any other Acquisition Documents
to which it is a party, and (b) to perform its obligations hereunder
(including, without limitation, all right, power, capacity and authority to
issue, sell and convey the Acquired Stock as provided by this Agreement,
subject to applicable federal and state securities law restrictions) and (c)
to conduct its business as and to the extent now conducted and to own, use
and lease its assets and properties.  The execution, delivery and performance
of the Acquisition Documents by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly and validly
approved by its Board of Directors, and no other corporate proceedings on the
part of the Company are necessary to authorize the execution, delivery and
performance of the Acquisition Documents by the Company and the consummation
of the transactions contemplated hereby.  The Acquisition Documents have been
duly and validly executed and delivered by the Company and constitute legal,
valid and binding obligations of the Company, enforceable in accordance with
their terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

      3.3. No Violations.  Neither the execution and the delivery of the
Acquisition Documents, nor the consummation of the transactions contemplated
thereby by the Company, will contravene, violate, result in a breach of or
constitute a default under (i) any Applicable Law, (ii) any material
provision of the charter or bylaws of the Company, or (iii) any agreement,
indenture or other instrument to which it is a party or by which it or its
properties may be bound or affected, except, with respect to this clause
(iii), for contraventions, violations, breaches or defaults that,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Company, or materially impair or restrict the
Company's ability to perform its obligations under the Acquisition Documents.


<PAGE>

      3.4. Consents.  Except for filings with the SEC pursuant to the
Securities Act, the Securities Act of 1934, as amended, and the rules and
regulations thereunder (the "Exchange Act"), and customary notice filings with
state securities commissions, no permit, consent, approval or authorization
of,or declaration to or filing with, any Governmental Authority or other public
or private third party is necessary or required in connection with any of the
execution, delivery or performance of the Acquisition Documents by the
Company or the consummation of any other transaction contemplated thereby.

       3.5. Sarbanes-Oxley Compliance.
Each  of  the principal executive officer and the principal financial officer
of  the  Company (or each former principal executive officer and each  former
principal  financial  officer of the Company, as  applicable)  has  made  all
certifications  required by Rule 13a-14 or 15d-14 under the Exchange  Act  of
Sections  302 and 906 of the Sarbanes-Oxley Act and the rules and regulations
of  the  SEC  promulgated thereunder with respect to Commission  Filings  (as
defined  in  Section  3.8 hereto).  For purposes of the  preceding  sentence,
"principal  executive officer" and "principal financial officer"  shall  have
the  meanings given to such terms in the Sarbanes-Oxley Act.  The Company has
delivered to Purchaser a summary of any disclosure made by management to  the
Company's auditors and audit committee since January 1, 2002 referred  to  in
such certifications.

The  Company  and  each subsidiary has (i) designed disclosure  controls  and
procedures  to  ensure  that material information  relating  to  it  and  its
subsidiaries, is made known to its management by others within those entities
and  (ii) to the extent required by applicable laws, disclosed, based on  its
most  recent evaluation, to its auditors and the audit committee of its Board
of  Directors (A) any significant deficiencies and material weaknesses in the
design  or operation of internal controls over financial reporting which  are
reasonably  likely  to  adversely  affect its  ability  to  record,  process,
summarize  and report financial information and (B) to the Knowledge  of  the
Company,  any  fraud,  whether or not material, that involves  management  or
other  employees  who  have a significant role in its internal  control  over
financial reporting.

The Company is not aware of any reason it will not be able to comply with the
requirements  of  Section 404 of the Sarbanes-Oxley  Act  on  the  applicable
compliance date.

Through the date hereof the Company has delivered to Purchaser copies of  any
written  notifications  it has received since December  31,  2001  of  a  (i)
"reportable condition" or (ii) "material weakness" in the Company's  internal
controls.   For purposes of this Agreement, the terms "reportable  condition"
and  "material  weakness" shall have the meanings assigned  to  them  in  the
Statements of Auditing Standards No. 60, as in effect on the date hereof.

     3.6. Valid Issuance; Free of Encumbrances; Private Placement.

          (a)  Upon issuance of the Acquired Stock pursuant to the Acquisition
Documents, the Acquired Stock will be duly and validly issued, fully paid and
non-assessable, and Purchaser will receive good title thereto, free and clear
of all Encumbrances except (i) under the provisions of applicable federal and
state securities law and (ii) as a result of acts of Purchaser.

(b)  The Company has not taken any action that would result in the offering
and sale of the Acquired Stock pursuant to the Acquisition Documents being
treated as a public offering rather than a valid private offering under
applicable securities law.

<PAGE>

     3.7.  Brokerage.   Except as set forth on Schedule 3.7  of  the  Company
Disclosure  Letter  hereto,  there are no claims for  brokerage  commissions,
finders'  fees  or  similar compensation in connection with the  transactions
contemplated by the Acquisition Documents based on any agreement made  by  or
on behalf of the Company.

     3.8. Commission Filings.  The Company has filed all reports, proxy
statements and other statements, together with any amendments required to be
made with respect thereto, that were required to be filed with the SEC under
the Exchange Act from and after July 1, 2003 (all such reports and statements
are collectively referred to herein as the "Commission Filings").  As of their
respective dates, the Commission Filings, including the financial statements
contained therein, complied as to form in all material respects with all of
the statutes and published rules and regulations enforced or promulgated by
the regulatory authority with which the Commission Filings were filed, and,
except to the extent the information in any Commission Filing has been
revised or superseded by a later filed Commission Filing, did not and do not
as of the date hereof 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 the light of the circumstances under
which they were made, not misleading.  Neither the Company nor any of its
subsidiaries has any material liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which would reasonably
be expected to have a Material Adverse Effect on the Company.

      3.9. Financial Information.  The audited consolidated financial
statements and unaudited interim consolidated financial statements (including,
in each case the notes, if any, thereto) included in the Commission Filings
(the "Company Financial Statements") complied as to form in all material
respects with the published rules and regulations of the SEC with respect
thereto,were prepared in accordance with U.S. generally accepted accounting
principles applied on a consistent basis during the periods involved (except
as may be indicated therein or in the notes thereto and except with respect
to unaudited statements as permitted by SEC rules governing Form 10-Q) and
fairly present (subject, in the case of the unaudited interim financial
statements, to normal, recurring year-end audit adjustments (which are not
expected to be, individually or in the aggregate, materially adverse to the
Company and its subsidiaries taken as a whole)) the consolidated financial
position of the Company and its consolidated subsidiaries as of the
respective dates thereof and the consolidated results of their operations and
cash flows for the respective periods then ended.

     3.10.     Litigation.

 (a)  There is no action, suit or proceeding including, without
limitation, investigations  or  audits by Governmental Authorities  pending
or,  to  the Company's   Knowledge,  threatened  against  the  Company  or
any   of   its subsidiaries  including, without limitation, any of its
officers, directors,employees, assets and properties that (1) impairs in any
material respect the ability  of the Company to perform its obligations under
this Agreement, (2)restricts in any material respect or prohibits the sale of
the Acquired Stock to  Purchaser or (3) would reasonably be expected to have a
Material  Adverse Effect on the Company.

     3.11.     Capitalization.

(a) As of the date of this Agreement, the authorized capital stock
the Company  consists of 50,000,000 shares of Common Stock, and 1,000,000
shares of preferred stock, par value $0.01 per share (the "Preferred Stock").


<PAGE>

     (b)  As of May 31, 2005, there were (1) 28,093,601 shares of Common Stock
issued and outstanding, (2) no shares of Preferred Stock issued and
outstanding, (3) 6,104,027 shares of Common Stock reserved for issuance upon
exercise of outstanding stock options issued by the Company to current or
former employees, directors and consultants of the Company and its
subsidiaries, and (4) no shares of Common Stock were reserved for issuance
upon the exercise of any warrants of the Company or upon the conversion or
exchange of any security of the Company.  No options, warrants or convertible
or exchangeable securities of the Company are issued and outstanding other
than as described in this Section 3.11(b).

   (c)  All outstanding shares of the Common Stock are, and all shares reserved
for issuance, when issued, will be, duly authorized, validly issued, fully
paid and non-assessable with respect to the issuance and delivery thereof.
Except as set forth in Section 3.11(b), as of the date hereof, there are no
outstanding subscriptions, options, warrants, rights (including, but not
limited to, stock appreciation rights), preemptive rights or other contracts,
commitments, understandings or arrangements, including, but not limited to,
any right of conversion or exchange under any outstanding security,
instrument or agreement (together, "Options"), obligating the Company or any
of its subsidiaries to issue or sell any shares of capital stock of the
Company or to grant, extend or enter into any Option with respect thereto.

     3.12.     Absence of Certain Changes or Events.

Except  as  disclosed in the Commission Filings, since March  31,  2005,  (a)
there  has  not been any change, event or development having, or  that  would
reasonably be expected to have, individually or in the aggregate, a  Material
Adverse  Effect on the Company and its subsidiaries taken as a  whole  (other
than  those changes, events or developments occurring as a result of  general
economic or financial conditions, in each case which are not unique to or  do
not  disproportionately  affect in a material  manner  (in  relation  to  the
effects  on  other entities who participate or are engaged in  the  lines  of
business  in which the Company and its subsidiaries are engaged) the  Company
and its subsidiaries) and (b) the Company and its subsidiaries have conducted
their   respective  businesses  only  in  the  ordinary  course  of  business
consistent with past practice.

<PAGE>

    3.13.  Absence of Undisclosed Liabilities.  Except for matters
reflected or  reserved against in the balance sheet for the period ended March
31, 2005 included  in  the  Company  Financial  Statements  or  as  disclosed
in  the Commission Filings made, neither the Company nor any of its
subsidiaries had at such date, or has incurred since such date, any liabilities
or obligations(whether absolute, accrued, contingent, fixed or otherwise, or
whether due or to  become  due)  of  any  nature that would be required  by
U.S.  generally accepted  accounting  principles to be reflected on  a
consolidated  balance sheet  or the Company and its consolidated subsidiaries
(including the  notes thereto), except liabilities or obligations (i) which
did not so exist on  or before  March 31, 2005 and were incurred in the
ordinary course  of  business consistent  with past practice or (ii) which are
not having,  and  would  not reasonably  be expected to have individually or
in the aggregate, a  Material Adverse Effect on the Company and its
subsidiaries taken as a whole.

      3.14. Contracts Requiring Consent.  There are no consents or waivers of
any party to any bonds, debentures, notes, or other indebtedness of the
Company or any of its subsidiaries ("Debt Documents") or any other third
party required to (a) execute this Agreement, (b) consummate this Agreement
and the transactions contemplated hereby, or (c) enable the Company to
operate the Company after the Closing in the same manner as it is presently
operated (except for the setting of the financial covenants for fiscal 2006
in respect of the Company's senior secured credit facility).  The execution
of this Agreement and the consummation of this Agreement and the transactions
hereby will not accelerate, breach or otherwise trigger any obligations in
the Debt Documents on the part of the Company.

      3.15.     Employee Benefit Matters

(a)  For purposes of this Section 3.15, "Plan" means individually and "Plans"
mean  collectively  (i)  all material employee benefit  plans,  policies  and
arrangements,  including, but not limited to, all material "employee  benefit
plans"  (as  defined  in  Section 3(3) of ERISA),  sponsored,  maintained  or
contributed  to,  or  required to be contributed to, by the  Company  or  any
subsidiary, and (ii) "employee benefit pension plan" (as defined  in  Section
3(2)  of  ERISA) sponsored, maintained or contributed to, or required  to  be
contributed  to,  by any entity required to be aggregated  with  the  Company
under  Section  414(b),  (c),  (m), or (o)  of  the  Code  (each,  an  "ERISA
Affiliate")  whether or not for the benefit of employees or former  employees
of the Company or any subsidiary.
(b)   With  respect to each Plan:  (i) if intended to qualify  under  Section
401(a)  of the Code, such plan has received a determination letter  from  the
Internal  Revenue Service stating that it so qualifies and that its trust  is
exempt  from  taxation  under Section 501(a) of the  Code,  and  nothing  has
occurred  since  the  date  of such determination that  could  reasonably  be
expected  to result in the loss of such qualification or exempt status;  (ii)
such  plan  has  been administered and operated in all material  respects  in
accordance with its terms and applicable law (including ERISA and  the  Code,
and all rules and regulations promulgated thereunder); (iii) no fiduciary has
any  material liability for breach of fiduciary duty or any other failure  to
act  or  comply  in connection with the administration or investment  of  the
assets  of any such Plan; (iv) no material disputes are pending, or,  to  the
best  Knowledge  of  the  Company, threatened by any governmental  agency  or
authority  or by any participant or beneficiary against any Plan, the  assets
of any trust under any Plan or the Plan sponsor or the Plan administrator, or
against  any  fiduciary  of any of any Plan with respect  to  the  design  or
operation  of  such Plan, other than routine claims for benefits  thereunder;
(v)  no non-exempt prohibited transaction (within the meaning of Section  406
of  ERISA) has occurred that gives rise to or might reasonably be expected to
give  rise  to material liability on the part of the Company or  any  of  its
subsidiaries; and (vi) all material contributions required to be made  by  or
under  any  Plan  (or trust or fund established thereunder or  in  connection
therewith)  or  any related collective bargaining agreement as  of  the  date
hereof  (taking  into account any extensions of time for the making  of  such
contributions) have been made in full.

<PAGE>

(d)   No  Plan has incurred an accumulated funding deficiency, as defined  in
Section  302 of ERISA or Section 412 of the Code, whether or not waived.   No
liability  has been or is reasonably expected to be incurred by the  Company,
any  subsidiary or any ERISA Affiliate (either directly or indirectly)  under
or  pursuant to Title IV of ERISA, and no event, transaction or condition has
occurred  or  exists that has resulted in or would reasonably be expected  to
result  in  any  such  liability to the Company, any  subsidiary,  any  ERISA
Affiliate or any Plan.
(e)   No Plan is a "multiemployer plan" as defined in Section 3(37) of ERISA,
and  none of the Company, any subsidiary or any ERISA Affiliate has withdrawn
at  any  time within the preceding six years from any multiemployer plan,  or
incurred  any withdrawal liability which remains unsatisfied, and  no  events
have occurred and no circumstances exist that could reasonably be expected to
result  in  any such liability to the Company, any subsidiary  or  any  ERISA
Affiliate.
(f)   None  of  the  Plans provide retiree health or life insurance  benefits
except  as  may be required by Section 4980B of the Code and Section  601  of
ERISA,  any other applicable law or at the expense of the participant or  the
participant's  beneficiary.   There has been no  material  violation  of  the
"continuation coverage requirement" of "group health plans" as set  forth  in
Section  4980B of the Code and Part 6 of Subtitle B of Title I of ERISA  with
respect to any Plan to which such continuation coverage requirements apply.

  3.16.     Labor Matters.  (a) Except as disclosed in the Commission Filings,
neither  the Company nor any of its subsidiaries is a party to any collective
bargaining  agreement  or  other labor agreement  with  any  union  or  labor
organization.  Except as disclosed in the Commission Filings,  there  are  no
disputes pending or, to the Knowledge of the Company, threatened between  the
Company   or  any  of  its  subsidiaries  and  any  trade  union   or   other
representatives of its employees, except for such disputes as have  not  had,
and  would  not  reasonably  be  expected to have,  individually  or  in  the
aggregate,  a  Material Adverse Effect on the Company  and  its  subsidiaries
taken  as a whole, and, to the Knowledge of the Company, except as set  forth
in  Schedule  3.16,  there are no material organizational  efforts  presently
being  made involving any of the now unorganized employees of the Company  or
any  of  its  subsidiaries. Since December 31, 2002, there has been  no  work
stoppage,  or  strike by employees of the Company or any of its  subsidiaries
except  for  such  work  stoppages or strikes as  have  not,  and  would  not
reasonably be expected to have, individually or in the aggregate, a  Material
Adverse Effect on the Company and its subsidiaries taken as a whole.

To  the  Knowledge  of  the  Company, neither the  Company  nor  any  of  its
subsidiaries  is in material violation of any labor laws in any  country  (or
political  subdivision thereof) in which they transact  business  except  for
such  violations as have not, and would not reasonably be expected  to  have,
individually  or in the aggregate, a Material Adverse Effect on  the  Company
and its subsidiaries taken as a whole.

<PAGE>

     3.17.     Intellectual Property Rights.  The Company and its subsidiaries
have all right, title and interest in, or a valid and binding license to use,
all Intellectual Property (as defined below) individually or in the aggregate
material to the conduct of the businesses of the Company and its subsidiaries
taken  as a whole.  Neither the Company nor any subsidiary of the Company  is
in  default (or with the giving of notice or lapse of time or both, would  be
in  default) under any license to use such Intellectual Property and, to  the
Knowledge  of the Company, such Intellectual Property is not being  infringed
by any third party, and neither the Company nor any subsidiary of the Company
is  infringing any Intellectual Property of any third party, except for  such
defaults and infringements which, individually or in the aggregate,  are  not
having  and would not reasonably be expected to have, individually or in  the
aggregate,  a  Material Adverse Effect on the Company  and  its  subsidiaries
taken  as  a whole.  For purposes of this Agreement, "Intellectual  Property"
means patents and patent rights, trademarks and trademark rights, trade names
and  trade name rights, service marks and service mark rights, service  names
and   service  name  rights,  copyrights  and  copyright  rights  and   other
proprietary intellectual property rights and all pending applications for and
registrations of any of the foregoing.

	3.18. Insurance.  Each of the Company and its subsidiaries is, and has
been continuously since January 1, 2000, insured with financially responsible
insurers in such amounts and against such risks and losses as are customary in
all material respects for companies conducting the business conducted by the
Company and its subsidiaries during such time period.  Since January 1, 2000,
neither the Company nor any of its subsidiaries has received any notice of
cancellation or termination with respect to any material  insurance policy of
the Company or any of its subsidiaries, except in the ordinary course of
business.  The material insurance policies of the Company and each of its
subsidiaries are valid and enforceable policies.

     3.19.     Title.  Each of the Company and its subsidiaries has a valid
leasehold interest in all real property described in its Commission Filings
as owned by them, and good title to all personal property owned by them that
are material to the business of the Company.

     3.20.     Environmental Matters. Except as has not had, and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on the Company and its subsidiaries taken as a whole:

     (a)(i) Each of the Company and its subsidiaries is in compliance with
applicable Environmental Laws (as hereinafter defined); and
neither  the  Company  nor any of its subsidiaries has received  any  written
communication from any person or Governmental Authority that alleges that the
Company  or any of its subsidiaries is not in such compliance with applicable
Environmental Laws.
Each  of  the  Company and its subsidiaries has obtained  all  environmental,
health and safety permits and governmental authorizations (collectively,  the
"Environmental Permits") necessary for the construction of its facilities and
the  conduct  of  its  operations, as applicable, and all such  Environmental
Permits are in good standing or, where applicable, a renewal application  has
been  timely  filed and is pending agency approval, and the Company  and  its
subsidiaries  are  in  compliance  with  all  terms  and  conditions  of  the
Environmental Permits.
There is no Environmental Claim (as hereinafter defined) pending
against the Company or any of its subsidiaries;
to the Knowledge of the Company, against any person or entity whose liability
for  any such Environmental Claim the Company or any of its subsidiaries  has
or  may have retained or assumed either contractually or by operation of law;
or
to  the  Knowledge of the Company, against any real or personal  property  or
operations  which  the  Company or any of its subsidiaries  owns,  leases  or
manages, in whole or in part.

<PAGE>

To  the  Knowledge  of  the Company, there have not  been  any  Releases  (as
hereinafter defined) of any Hazardous Material (as hereinafter defined)  that
would  be  reasonably likely to form the basis of any material  Environmental
Claim  against the Company or any of its subsidiaries, or against any  person
or  entity whose liability for any Environmental Claim the Company or any  of
its   subsidiaries  has  or  may  have  been  retained  or   assumed   either
contractually or by operation of law.
To  the  Knowledge  of the Company, with respect to any  predecessor  of  the
Company  or any of its subsidiaries, there is no Environmental Claim  pending
or, to the Knowledge of the Company threatened in writing, and there has been
no Release of Hazardous Materials that would be reasonably likely to form the
basis of any Environmental Claim.
There  are  no  material facts specific to the Company  that  have  not  been
disclosed  to the Purchaser which the Company reasonably believes are  likely
to form the basis of an Environmental Claim against the Company or any of its
subsidiaries  arising  from  (x)  current environmental  remediation  of  the
Company or its subsidiaries or such remediation costs known to be required in
the  future, or (y) any other environmental matter affecting the  Company  or
its subsidiaries.

As used in this Section 3.20:
"Environmental  Claims"  means  any  and all  administrative,  regulatory  or
judicial actions, suits, demands, demand letters, directives, claims,  liens,
investigations, proceedings or written notices of noncompliance, liability or
violation  by  any  person  or entity (including, but  not  limited  to,  any
Governmental  Authority)  alleging potential  liability  (including,  without
limitation,   potential   responsibility  or   liability   for   enforcement,
investigatory  costs,  cleanup costs, governmental  response  costs,  removal
costs,  remedial costs, natural resources damages, property damages, personal
injuries or penalties) arising out of, based on or resulting from
the  presence, or Release or threatened Release into the environment, of  any
Hazardous  Materials at any location, whether or not owned, operated,  leased
or managed by the Company or any of its subsidiaries;
circumstances  forming the basis of any violation, or alleged  violation,  of
any Environmental Law; or
any  and  all  claims  by  any  third party  seeking  damages,  contribution,
indemnification,  cost recovery, compensation or injunctive relief  resulting
from the presence or Release of any Hazardous Materials;
"Environmental  Laws"  means all Federal, state and  local  laws,  rules  and
regulations  relating  to  pollution,  the  environment  (including,  without
limitation,  ambient  air,  surface  water,  groundwater,  land  surface   or
subsurface  strata)  or  protection of human health  as  it  relates  to  the
environment  including, without limitation, laws and regulations relating  to
Releases or threatened Releases of Hazardous Materials, or otherwise relating
to  the  manufacture,  processing,  distribution,  use,  treatment,  storage,
disposal, transport or handling of Hazardous Materials;
"Hazardous  Materials"  means  (a)  any  petroleum  or  petroleum   products,
radioactive materials, asbestos in any form that is or could become  friable,
urea  formaldehyde foam insulation, and transformers or other equipment  that
contain  dielectric fluid containing polychlorinated biphenyls; and  (b)  any
chemicals,  materials or substances which are now defined as or  included  in
the  definition  of  "hazardous substances", "hazardous  wastes",  "hazardous
materials",  "extremely  hazardous wastes",  "restricted  hazardous  wastes",
"toxic substances", "toxic pollutants", or words of similar import, under any
Environmental Law; and (c) any other chemical, material, substance or  waste,
exposure  to  which  is  now  prohibited,  limited  or  regulated  under  any
Environmental  Law  in  a jurisdiction in which the Company  or  any  of  its
subsidiaries  operates or any jurisdiction which has received such  chemical,
material, substance or waste from the Company or its subsidiaries; and
"Release"  means  any release, spill, emission, leaking, injection,  deposit,
disposal,  discharge, dispersal, leaching or migration into  the  atmosphere,
soil, surface water, groundwater or property.

<PAGE>

ARTICLE 4.

REPRESENTATIONS AND WARRANTIES CONCERNING PURCHASER

Purchaser represents and warrants to the Company that:
     4.1. Authority.  Purchaser has all requisite corporate power and authority
(a) to execute and deliver this Agreement and any other Acquisition Documents
to  which it is a party, and, (b) to perform its obligations hereunder.  This
Agreement   constitutes  a  valid  and  binding  obligation   of   Purchaser,
enforceable  in  accordance with its terms, except as enforceability  may  be
limited  by  bankruptcy,  insolvency,  reorganization,  moratorium  or  other
similar laws affecting the enforcement of creditors' rights generally and  by
general  equitable  principles (regardless of whether such enforceability  is
considered in a proceeding in equity or at law).

      4.2. No Violations.  Neither the execution and the delivery of the
Acquisition Documents, nor the consummation of the transactions contemplated
thereby by Purchaser, will contravene, violate, result in a breach or
constitute a default under (i) any Applicable Law, or (ii) any material
provision of the charter or bylaws of Purchaser.

     4.3. Consents.  Except for the filings with and notices to the New York
Stock Exchange and with the SEC pursuant to the Exchange Act, no permit,
consent, approval or authorization of, or declaration to or filing with, any
Governmental Authority is required in connection with any of the execution,
delivery or performance of the Acquisition Documents by Purchaser or the
consummation of Purchaser of any other transaction contemplated thereby.

     4.4. Brokerage.  Except as set forth in Schedule 4.4 hereto, there are no
claims for brokerage commissions, finders' fees or similar compensation in
connection with the transactions contemplated by the Acquisition Documents
based on any arrangement or agreement made by or on behalf of Purchaser.

     4.5. Knowledge and Experience.  Purchaser is a sophisticated investor with
sufficient knowledge and experience in financial and business matters to be
capable of evaluating the merits, risks and suitability of an unregistered,
non-liquid investment such as an investment in the Company, and has evaluated
the merits, risks and suitability of such an investment.  Purchaser has
expertise in, and is not relying on the Company with respect to, the
corporate, tax, legal, regulatory and economic considerations involved in its
investment in the Company.  Purchaser understands that the offer and sale of
the Acquired Stock has not been approved or disapproved by the SEC or any
other Governmental Authority.  Purchaser is dealing with the Company on a
professional arms-length basis and neither the Company nor any of its
Affiliates or representatives is acting as a fiduciary or advisor to
Purchaser with respect to this Agreement or any of the transactions
contemplated hereby.

     4.6. Accredited Investor; Securities Law Restrictions.  Purchaser is an
"accredited investor" (as defined in Rule 501(a)(5) under the Securities Act)
and is acquiring the Acquired Stock hereunder for its own account.  Purchaser
is purchasing the Acquired Stock for investment purposes and not with a view
to offer or sale thereof in connection with any public distribution or in any
other manner that would violate the Securities Act or the securities or blue
sky laws of any state or of any foreign jurisdiction or require registration
thereunder.  Purchaser will not offer or sell or otherwise dispose of any of
the Acquired Stock so purchased in violation of the Securities Act or the
Exchange Act.  Purchaser understands that the shares of Acquired Stock are
characterized as "restricted securities" under the Securities Act and are
being offered and sold in reliance upon specific exemptions from the
registration requirements of federal and state securities laws and that the
Company is relying upon the truth and accuracy of the representations and
warranties of Purchaser set forth herein in order to determine the
availability of such exemptions.  Purchaser understands and agrees that the

<PAGE>

Acquired Stock has not been registered under the Securities Act, or any
foreign or state securities laws and that, accordingly, will not be
transferable except as permitted under various exemptions contained in the
Securities Act, foreign or state securities laws, or upon satisfaction of the
registration and prospectus delivery requirements of the Securities Act.
Purchaser acknowledges and agrees that it must bear the economic risk of the
Acquired Stock it is acquiring hereunder for an indefinite period of time
because such stock has not been registered under the Securities Act and
therefore cannot be transferred unless subsequently registered or an
exemption from registration is available.  Purchaser is familiar with Rule
144 promulgated under the Securities Act, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.

     4.7. No other Representations or Warranties.  No representations or
warranties have been made to Purchaser by the Company or any director,
officer, employee, agent or Affiliate of the Company other than the limited
representations of the Company set forth herein and Purchaser understands,
acknowledges and agrees that the Company makes no other representations and
warranties of any kind or nature, expressed or implied, all of which are
specifically disclaimed by the Company.  No representations or warranties
have been made to Purchaser by the Company or any director, officer,
employee, agent or Affiliate of the Company other than the limited
representations of the Company set forth herein and the Purchaser
understands, acknowledges and agrees that the Company makes no other
representations and warranties of any kind or nature, expressed or implied,
all of which are specifically disclaimed by the Company.  The decision of
Purchaser to purchase the securities being acquired by it pursuant hereto is
based on the information contained in this Agreement and Purchaser's own
independent investigation of the Company.  Purchaser acknowledges that it has
had an opportunity to ask questions of the executive officers of the Company
and has received sufficient information to evaluate its investment in the
Company.  Purchaser has been, and will continue to be, solely responsible for
making its own independent appraisal of an investigation into, and in
connection with this Agreement and the transactions contemplated hereby it
has made such an independent appraisal of an investigation into, the
financial condition, creditworthiness, affairs, status and nature of the
Company and its related companies and it has not relied, and will not
hereafter rely, on the Company or any Affiliate or representative of the
Company with respect to such matters or to update Purchaser with respect to
such matters.

     4.8. No Action Taken to Invalidate Private Placement.  Purchaser has not
taken any action that would result in the offering of the Acquired Stock
pursuant to this Agreement being treated as a public offering rather than a
valid private offering under applicable securities law.

     4.9. Legend.
    (a)  Purchaser understands that any certificate or certificates
representing the  Acquired  Stock shall be subject to a legend restricting
transfer  under the Securities Act, such legend to be substantially
as follows:

          "The  shares  represented by this certificate  have  been
          acquired  for  investment and have  not  been  registered
          under the Securities Act of 1933, as amended. Such shares
          may  not  be sold or transferred in the absence  of  such
          registration   or   an  opinion  of  counsel   reasonably
          satisfactory to the Company as to the availability of  an
          exemption from registration."

   (b)  The Company agrees to remove from the Acquired Stock the legend set
forth in the preceding paragraph in connection with a transfer pursuant to an
effective registration statement or upon receipt of an opinion of counsel in
form  and  substance reasonably satisfactory to the Company that the Acquired
Stock is eligible for transfer without registration under the Securities Act.

<PAGE>

ARTICLE 5.

REGISTRATION RIGHTS

     5.1. Demand Registration.

     (a)  Subject to the blackout provisions contained in Section 5.5, at any
time,  a  Holder (as defined below) may make one (1) written request  on  the
Company  (a  "Demand Registration") for the registration under the Securities
Act   of   the  Registrable  Securities  (as  defined  below).   The   Demand
Registration will specify the number of Registrable Securities proposed to be
sold  and will also specify the intended method of disposition thereof.   For
purposes  of this Section 5, (i) "Holder" means any person owning  of  record
Registrable Securities that have not been sold to the public or any permitted
assignee  of  record  of such Registrable Securities, and  (ii)  "Registrable
Securities"  shall mean shares of the Acquired Stock and any stock  dividends
received  thereon; provided, however, that shares of Common Stock  which  are
Registrable Securities shall cease to be Registrable Securities upon any sale
pursuant to a registration statement or Rule 144 under the Securities Act.

     (b)  A registration will not be deemed to have been effected as a Demand
Registration unless it has been declared effective by the SEC and the Company
has complied in all material respects with its obligations under this
Agreement with respect thereto; provided, however, that if, after it has
become effective, the offering of shares of Common Stock pursuant to such
registration is or becomes the subject of any stop order, injunction or other
order or requirement of the SEC or any other governmental or administrative
agency, or if any court prevents or otherwise limits the sale of the shares
of Common Stock pursuant to the registration for more than thirty (30)
trading days (which need not be consecutive trading days) within the ninety
(90) day period after the effective date of the registration statement, such
registration will be deemed not to have been effected.  If (i) a registration
requested pursuant to this Section 5.1 is deemed not to have been effected or
(ii) the registration requested pursuant to this Section 5.1 does not remain
effective for a period of at least one hundred and twenty (120) days beyond
the effective date thereof or, with respect to an underwritten offering of
Registrable Securities, until thirty (30) days after the commencement of the
distribution by the Holders of the Registrable Securities included in such
registration statement (in each case subject to the blackout periods
referenced in Section 5.4), then the Company shall continue to be obligated
to effect such registration pursuant to this Section 5.1.  The Holders shall
be permitted to withdraw all or any part of the Registrable Securities from a
Demand Registration at any time prior to the effective date of such
Demand Registration.

     (c) If the Holders so elect, the offering of Registrable Securities
pursuant to Demand Registration shall be in the form of an underwritten
offering.  The Company shall select one or more nationally recognized firms of
investment bankers reasonably acceptable to the Holders to act as the lead
managing underwriter (the "Underwriter") in connection with such offering and
shall select any additional investment bankers and managers to be used in
connection with the offering.

<PAGE>

     5.2. Piggy-Back Registration.

       (a)  If at any time the Company proposes to file a registration
statement under  the Securities Act with respect to an offering by the Company
for  its own  account  or  for the account of any of its respective  security
holders(other  than  a registration statement on Form S-4 or S-8 (or any
substitute form  that  may be adopted by the SEC)), then the Company shall
give  prompt written  notice of such proposed filing to the Holders as soon
as practicable(but  in no event less than 20 days before the anticipated
filing date), and such  notice shall offer Holders the opportunity to register
such  number  of Registrable  Securities  as  each Holder may  request (which
request  shall specify the Registrable Securities intended to be disposed of
by such  Holder and   the   intended   method   of  distribution  thereof)(a
"Piggy-Back Registration").   Any  Holder  desiring  to  participate  in   a
Piggy-Back Registration  must furnish such request to the Company within 10
days  after receipt  of  the Company's written notice of the proposed
registration.   The Company  shall  use  its  best efforts to cause the
managing  Underwriter  or Underwriters  of  a proposed underwritten offering
to permit the  Registrable Securities  requested  to  be  included in a Piggy-
Back  Registration  to  be included  on the same terms and conditions as any
similar securities  of  the Company or any other security holder included
therein and  to permit the  sale or  other  disposition of such Registrable
Securities in accordance with  the intended  method  of  distribution thereof.
Except as set  forth  in  Section 5.2(c),  each  Holder  shall  have the right
to  withdraw  its  request  for inclusion  of  its  Registrable  Securities in
any  registration  statement pursuant to this Section 5.2 by giving written
notice  to the Company  of  its request  to withdraw.  The Company may
withdraw a  Piggy-Back Registration  at any  time  prior  to  the time it
becomes  effective.  In  the  event  of  the Company's  withdrawal,  the
Company shall  be responsible  for  all  fees  and expenses  (including fees
and expenses of counsel) incurred  by  the  Company prior to such withdrawal,
and the fees and expenses of one special counsel to the Holders.  The Holders
shall have the right to participate in a Piggy-Back Registration  on  no more
than one  occasion (excluding for  such  purpose  an offering that is
withdrawn by the Company or is otherwise not completed).

     (b)  No registration effected under this Section 5.2, and no failure to
effect a registration under this Section 5.2, shall relieve the Company of
its obligation to effect a registration upon the request of a Holder pursuant
to Section 5.1, and no failure to effect a registration under this Section
5.2 and to complete the sale of Registrable Securities in connection
therewith shall relieve the Company of any other obligation under this
Section 5.

     (c)  Notwithstanding anything to the contrary contained herein, if the
managing Underwriter or Underwriters of any underwritten offering described
in Section 5.2 have informed, in writing, the Holders that it is their
opinion that the total number of shares which the Company, the Holders and
any other persons desiring to participate in such registration intend to
include in such offering is such as to materially and adversely affect the
success of such offering, including the price at which the securities could
be sold, the Company shall include in the registration the maximum number of
securities which it is so advised can be sold without the adverse effect,
allocated as follows: (i) first, all securities proposed to be registered by
the Company for its own account; (ii) second, all securities proposed to be
registered by the Company pursuant to the exercise by any person, other than
a Holder, of a "demand" right requesting the registration of shares of Common
Stock; and (iii) third, any other securities proposed to be registered by the
Company other than for its own account, including, without limitation,
Registrable Securities duly requested to be included in the registration and
securities proposed to be registered by the Company pursuant to the exercise
by any person, other than a Holder, of a "piggy-back" right requesting the
registration of shares of Common Stock pursuant to an agreement with the
Company, allocated pro rata among all Holders and such other persons on the
basis of the relative number of Registrable Securities or other securities
that each Holder or other person has duly requested to be included in such
registration.

<PAGE>

     5.3.  Expenses of Registration.  All Registration Expenses  incurred  in
connection with registrations pursuant to Sections 5.1 and 5.2 shall be borne
by  the  Company.  All Selling Expenses relating to securities registered  on
behalf of the Holders shall be borne by the holders of securities included in
such registration pro rata with the Company and among each other on the basis
of  the  number  of  shares  so  registered.  Notwithstanding  the  foregoing
sentence, if a registration proceeding begun pursuant to Section 5.1  or  5.2
is subsequently withdrawn by the Holders requesting such registration, either
(a)  if Holders of any number of the Registrable Securities agree, then  such
agreeing Holders of the Registrable Securities to have been registered  shall
bear  all  such Registration Expenses pro rata on the basis of the number  of
shares to have been registered for such Holders and the Holders shall not  be
treated as having requested such registration for purposes of limitations  of
the  numbers  of registrations that may be requested by Holders  pursuant  to
Section  5.1 or 5.2 as applicable, or (b) if no such Holders agree, then  the
Holders  will  forfeit  their  right to one  registration  pursuant  to  such
section,   and   the   Company   shall  bear  such   Registration   Expenses.
Notwithstanding the foregoing, however, the Holders shall not be required  to
pay  any of said Registration Expenses or to forfeit the right to one  demand
registration  and the Company shall pay the same if (x) at the  time  of  the
withdrawal,  the  Holders have learned of a material adverse  change  in  the
condition,  business  or  prospects of the Company from  that  known  to  the
Holders  at the time of their request, of which the Company should  have  had
knowledge at the time of the request or (y) if the Holders have withdrawn the
registration   pursuant  to  a  written  request  by  the  Company   or   its
underwriters.

     5.4. Registration Procedures.  Whenever the Company is required to effect
or cause the registration of Registrable Securities pursuant to Section 5.1,
the Company will use reasonable commercial efforts to effect the registration
and the sale of such Registrable Securities in accordance with the intended
method of disposition thereof as quickly as practicable, and in connection
with any such request:


     (a)  The Company will prepare and file with the SEC a registration
statement(which, in the case of an underwritten public offering, shall be on
Form  S-3(unless  the  Company does not qualify for use of Form S-3 in a
registration involving  only a secondary offering as provided in the General
Instructions to  Form  S-3 in such registration, in which case such
registration statement shall  be a Form S-1 or other form which the Company is
eligible to  use)  or other  form of general applicability satisfactory to the
managing underwriter selected  as therein provided) with respect to such
securities and  use  best efforts  to cause such registration statement to
become and remain  effective until the completion of the distribution; provided,
however, that, subject to the  provisions  contained in Section 5.5, the
Company shall be  required  to keep  any  registration statement effective at
least  ninety  (90)  days  (or thirty (30) days in the case of an underwritten
offering).

     (b)  The Company will prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for the period specified in Section 5.4(a) and as to comply with
the provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement in accordance
with the intended method of disposition set forth in such registration
statement for such period.

     (c)  The Company will, as far in advance as practical, prior to filing a
registration statement or prospectus or any amendment or supplement thereto,
furnish copies of such registration statement as proposed to be filed,
together with exhibits thereto, to (i) each Holder participating in the
distribution through such registration statement, (ii) not more than one
counsel representing such Holders, and (iii) each Underwriter, if any, of the
Registrable Securities covered by such registration statement, which
documents will be subject to review and approval by the foregoing within five
(5) days after delivery, and thereafter as far in advance as practical,
furnish to such Holders, counsel and Underwriters, if any, for their review
and comment such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein), the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents or information as such Holders, counsel or Underwriters may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by participating Holders.

<PAGE>

    (d)  After the filing of the registration statement, the Company will
promptly notify each participating Holder of any stop order issued or
threatened by the SEC and take all reasonable actions required to prevent the
entry of such stop order or to remove it if entered.

     (e)  The Company will use reasonable commercial efforts to (i) register or
qualify the Registrable Securities under such other securities or blue sky
laws of such jurisdictions in the United States as each participating Holder
reasonably (in light of each Holder's intended plan of distribution)
requests, and (ii) cause such Registrable Securities to be registered with or
approved by such other governmental agencies or authorities in the United
States as may be necessary by virtue of the business and operations of the
Company and do any and all other acts and things that may be reasonably
necessary or advisable to enable each Holder to consummate the disposition of
the Registrable Securities; provided, however, that the Company will not be
required to (A) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph (e), (B)
subject itself to taxation in any jurisdiction where it would not be subject
to taxation but for actions taken pursuant to this Section 5.3 or (C) consent
to general service of process in any such jurisdiction.

    (f)  The Company will immediately notify each participating Holder, at any
time when a prospectus relating to Registrable Securities is required to be
delivered under the Securities Act, of the occurrence of an event requiring
the preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the Holder, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and promptly make available to each Holder any such supplement or
amendment.

     (g)  The Company and each participating Holder will enter into customary
agreements including, if applicable, an underwriting agreement in customary
form (including lock-up provisions if required by the Underwriter) and which
is reasonably satisfactory to the Company (which shall not require the
Holders to indemnify the underwriter with respect to misstatements or
omissions in the registration statement other than such misstatements or
omissions in written material supplied by each Holder).  The Company and each
Holder will also take such other actions as are reasonably required in order
to expedite or facilitate the disposition of such Registrable Securities.

     (h)  The Company will make available to each participating Holder (and its
counsel) and each Underwriter, if any, subject to restrictions imposed by the
United States federal government or any agency or instrumentality thereof,
copies of all correspondence between the SEC and the Company, its counsel or
auditors and will also make available for inspection by each participating
Holder, any Underwriter participating in any disposition pursuant to such
registration statement and any attorney, accountant or other professional
retained to represent a participating Holder (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records") as they shall
reasonably request to enable them to exercise their due diligence
responsibility, and cause the Company's officers and employees to supply all
information reasonably requested by any Inspectors in connection with such
registration statement.  Each Holder agrees that information obtained by it
solely as a result of such inspections (not including any information
obtained from a third party who, insofar as is known to such Holder after
reasonable inquiry, is not prohibited from providing such information by a
contractual, legal or fiduciary obligation to the Company) shall be deemed

<PAGE>

confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company or its Affiliates unless and
until such information is made generally available to the public.  Each
Holder further agrees that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at the Company's expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.

     (i) In connection with an underwritten offering, the Company will
participate, to the extent reasonably requested by the managing Underwriter
for the offering or the participating Holders, in customary efforts to sell
the securities under the offering, including, without limitation,
participating in "road shows."

     (j) The Company may require each participating Holder to promptly
furnish in writing to the Company such information regarding the distribution
of the Registrable Securities as the Company may from time to time reasonably
request and such other information as may be legally required in connection
with such registration including, without limitation, all such information as
may be requested by the SEC or the NASD.  The Company may exclude any Holder
from such registration if such Holder fails to provide such information.

     (k) Each Holder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 5.3(f) hereof,
such Holder will forthwith discontinue disposition of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until such Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 5.3(f) hereof, and, if so directed by the
Company, each Holder will deliver to the Company all copies, other than
permanent file copies then in such Holder's possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of
such notice.  In the event the Company shall give such notice, the Company
shall extend the period during which such registration statement shall be
maintained effective (including the period referred to in Section 5.3(a)
hereof) by the number of days during the period from and including the date
of the giving of notice pursuant to Section 5.3(f) hereof to the date when
the Company shall make available to the Holders a prospectus supplemented or
amended to conform with the requirements of Section 5.3(f) hereof.

     5.5. Blackout Provisions.

        (a)  Notwithstanding anything in this Agreement to the contrary, by
delivery of  written  notice  to  any  of  the participating  Holders  (a
"Suspension Notice"), stating which one or more of the following limitations
shall  apply
to  the  addressee  of such Suspension Notice, the Company may  (1)  postpone
effecting  a registration under this Agreement, or (2) require such addressee
to  refrain  from disposing of Registrable Securities under the registration,
in  either  case for a period of no more than 90 consecutive  days  from  the
delivery  of  such  Suspension Notice (which period may not  be  extended  or
renewed).   The Company may postpone effecting a registration  or  apply  the
limitations on dispositions specified in clause 2 if (x) the Company in  good
faith  determines  that  such  registration or disposition  would  materially
impede,  delay  or interfere with any material financing, offer  or  sale  of
equity  securities of the Company, acquisition, disposition or other material
transaction  by  the  Company  or any of its material  subsidiaries,  (y)  an
investment  banking  firm of recognized national standing  shall  advise  the
Company in writing that effecting the registration or the disposition by such
person  of Registrable Securities or other equity securities of the  Company,
as  the  case  may be, would materially and adversely affect an  offering  of
equity  securities  of the Company, by the Company for its  own  account  the
preparation  of  which had then been commenced, or (z) the  Company  in  good
faith  determines  that the Company is in possession of  material  non-public
information  the  disclosure of which during the  period  specified  in  such
notice the Company reasonably believes would not be in the best interests  of
the  Company; provided that the Company may not take any action  pursuant  to
this  Section 5.5 for a period of time in excess of 90 days in any  one  year
period.

<PAGE>

      (b)  If the Company shall take any action pursuant to clause 2 of Section
5.4(a) with respect to any participating Holder in a period during which the
Company shall be required under Section 5.3(a) to cause the registration
statement to remain effective under the Securities Act and the prospectus to
remain current, such period shall be extended for such person by one day
beyond the end of such period for each day that, pursuant to Section 5.4(a),
the Company shall require such person to refrain from disposing of
Registrable Securities owned by such person.

      5.6. Indemnification.

     (a)  The Company shall, to the full extent permitted by law,  indemnify
and hold  harmless  each  Holder, its Affiliates, partners,   officers,
directors, employees  and  agents, and each person, if any, who  controls  or
is  under common  control  with such Holder within the meaning   of Section  15
of  the Securities Act or Section 20 of the Exchange Act of 1934, together  with
the partners,  officers,  directors, employees and   agents of  such
controlling person (collectively, the "Controlling Persons"), from and against
any  loss, claim,  damage,  liability, reasonable attorneys' fees, cost or
expense  and costs  and expenses of investigating and defending any such claim,
joint  or several,  and any action in respect thereof (collectively, the
"Damages")  to which  each Holder, its partners, officers, directors, employees
and  agents, and  any such Controlling Person may become subject under the
Securities  Act or  otherwise,  insofar as such Damages (or actions or
proceedings,  whether commenced or threatened, in respect thereof) arise out of,
or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in  any  registration  statement or prospectus relating
to  the  Registrable Securities or any amendment or supplement thereto, or
arises out of,  or  are based upon, any omission or alleged omission to state
therein a material fact required to be stated   therein or necessary to make the
statements therein not misleading or any violation by the Company of any federal
or state securities laws  or any rule  or regulation thereof, except insofar as
the same are based upon  information  furnished in writing to the Company by a
Holder  expressly for  use  therein, and shall reimburse the Holder, its
Affiliates,  partners, officers,   directors, employees and agents, and each
such Controlling  Person for  any  legal  and other expenses reasonably incurred
by such  Holder,  its   Affiliates, its partners, officers, directors, employees
and agents,  or  any such  Controlling Person in investigating or defending or
preparing to defend against  any such Damages or proceedings; provided, however,
that the Company shall  not  be liable to any Holder to the extent that any such
Damages  (or action  or proceeding in respect thereof) arise out of or are based
upon  an untrue  statement or omission made in any preliminary prospectus if (i)
such Holder failed to send or deliver a copy of the final prospectus with or
prior  to  the  delivery of written confirmation of the sale by the  Holder to
the person asserting the claim from which such Damages arise, and (ii) the
final prospectus  would  have  corrected such untrue statement  or  such
omission; provided,  further,  however, that the Company shall not  be  liable
to  any Holder in any such case to the extent that any such Damages arise out
of  or are  based upon an untrue statement or omission in any prospectus if (x)
such untrue  statement or omission is corrected in an amendment or  supplement
to such prospectus, and (y) having previously been furnished by or on behalf of
the  Company  with  copies of such prospectus as so amended or  supplemented,
such  Holder  thereafter fails to deliver such prospectus as  so  amended  or
supplemented  prior  to  or  concurrently with  the  sale  of  a  Registrable
Securities  to the person asserting the claim from which such Damages  arise.
The  Company  also  agrees to indemnify any Underwriters of  the  Registrable
Securities,  their officers and directors and each person who  controls  such
Underwriters  on  substantially the same basis as that of the indemnification
of the Holder provided in this Section 5.6(a).

<PAGE>

     (b)  Each Holder shall, to the full extent permitted by law, indemnify and
hold harmless the Company, its officers, directors, employees and agents and
each person, if any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, together with the
partners, officers, directors, employees and agents of such controlling
person, to the same extent as the foregoing indemnity from the Company to the
Holders, but only to the extent the Company's or such person's Damages are
attributable to the information related to the Holder, or its plan of
distribution, furnished in writing by a Holder or on a Holder's behalf
expressly for use in any registration statement or prospectus relating to the
Registrable Securities, or any amendment or supplement thereto, or any
preliminary prospectus and the aggregate amount which may be recovered from
any Holder pursuant to the indemnification provided for in this Section
5.6(b) in connection with any registration and sale of Registrable Securities
shall be limited to the net proceeds received by such Holder from the sale of
such Registrable Securities.  In case any action or proceeding shall be
brought against the Company or its officers, directors, employees or agents
or any such controlling person or its officers, directors, employees or
agents, in respect of which indemnity may be sought against any Holder, such
Holder shall have the rights and duties given to the Company, and the Company
or its officers, directors, employees or agents, or such controlling person,
or its officers, directors, employees or agents, shall have the rights and
duties given to such Holder under the preceding paragraph.  Each Holder also
agrees to indemnify and hold harmless any Underwriters of the Registrable
Securities, their officers and directors and each person who controls such
Underwriters on substantially the same basis as that of the indemnification
each Holder provides to the Company provided in this Section 5.6(b); provided
that the aggregate recovery that the Company and any Underwriters can recover
from any Holder pursuant to this Section 5.6(b) cannot exceed the net
proceeds received by such Holder from the sale of Registrable Securities.
The Company shall be entitled to receive indemnities from Underwriters,
selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, to the same extent as
provided above, with respect to information so furnished in writing by such
persons specifically for inclusion in any prospectus or registration
statement; provided, however, that if the Company does not receive such
indemnities, the Company will not be relieved of its duties and obligations
hereunder.

     (c)  Promptly after receipt by any person in respect of which indemnity may
be sought pursuant to Section 5.6(a) or 5.6(b) (an "Indemnified Party") of
notice of any claim or the commencement of any action, the Indemnified Party
shall, if a claim in respect thereof is to be made against the Person against
whom such indemnity may be sought (an "Indemnifying Party"), notify the
Indemnifying Party in writing of the claim or the commencement of such
action; provided, however, that the failure to notify the Indemnifying Party
shall not relieve it from any liability which it may have to an Indemnified
Party otherwise than under Section 5.6(a) or 5.6(b) and except to the extent
of any actual prejudice resulting therefrom.  If any such claim or action
shall be brought against an Indemnified Party, and it shall notify the
Indemnifying Party thereof, the Indemnifying Party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any
other similarly notified Indemnifying Party, to assume the defense thereof
with counsel reasonably satisfactory to the Indemnified Party.  After notice
from the Indemnifying Party to the Indemnified Party of its election to
assume the defense of such claim or action, the Indemnifying Party shall not
be liable to the Indemnified Party for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Indemnified Party shall have the right to employ separate counsel to
represent the Indemnified Party and its controlling Persons who may be
subject to liability arising out of any claim in respect of which indemnity
may be sought by the Indemnified Party against the Indemnifying Party, but
the fees and expenses of such counsel shall be for the account of such
Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party
shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of the Company and such Indemnified Party, representation

<PAGE>

of both parties by the same counsel would be inappropriate due to actual or
potential conflicts of interest between them, it being understood, however,
that the Indemnifying Party shall not, in connection with any one such claim
or action or separate but substantially similar or related claims or actions
in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (together with appropriate local counsel) at any time for
all Indemnified Parties, or for fees and expenses that are not reasonable.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any claim or pending or
threatened proceeding in respect of which the Indemnified Party is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Party, unless such settlement includes an unconditional release
of such Indemnified Party from all liability arising out of such claim or
proceeding. Whether or not the defense of any claim or action is assumed by
the Indemnifying Party, such Indemnifying Party will not be subject to any
liability for any settlement made without its consent, which consent will not
be unreasonably withheld.


      5.7. Termination of Registration Rights.  All of the Company's
obligations to register  Registrable Securities hereunder shall terminate upon
the  date  on which no Holder holds any Registrable Securities.

ARTICLE 6.

DEFINITIONS

     6.1. Definitions.

For  purposes  hereof, the following terms when used herein  shall  have  the
respective meanings set forth below:
"Acquired  Stock"  has  the meaning assigned to such  term  in  the  recitals
hereto.

"Acquisition  Documents"  means,  collectively,  this  Agreement,   and   all
agreements,  instruments,  certificates  and  other  documents  executed  and
delivered in connection herewith or contemplated hereby.
"Affiliate"  shall have the meaning given such term in Rule 12b-2  under  the
Exchange Act.
"Applicable  Law"  means  any  Law  or other legally  enforceable  obligation
imposed by a Governmental Authority in the applicable jurisdiction.
"Business Day" means any day that is not a Saturday, a Sunday or other day on
which banks are required or authorized by law to be closed in the City of New
York.
"Claims" has the meaning assigned to such term in Section 7.11.

"Closing" has the meaning assigned to such term in Section 1.1.

"Closing Date" has the meaning assigned to such term in Section 1.4.

"Code" means the Internal Revenue Code of 1986, as amended.

"Commission Filings" has the meaning assigned to such term in Section 3.8.
"Common Stock" has the meaning assigned to such term in the recitals hereto.

"Company" means Bernard Chaus, Inc., a New York corporation.

"Company  Financial  Statements" has the meaning assigned  to  such  term  in
Section 3.9.

"Controlling Persons" has the meaning assigned to such term in Section 5.6.

<PAGE>

"Damages" has the meaning assigned to such term in Section 5.6.

"Demand Registration" has the meaning assigned to such term in Section 5.1.
"Encumbrances" means all options, proxies, voting trusts, voting  agreements,
judgments, pledges, charges, escrows, rights of first refusal or first offer,
mortgages,  indentures,  claims,  transfer  restrictions,  liens,   equities,
security   interests  and  other  encumbrances  of  every  kind  and   nature
whatsoever, whether arising by agreement, operation of law or otherwise.
"Environmental Claim" has the meaning assigned to such term in Section 3.20.
"Environmental Laws" has the meaning assigned to such term in Section 3.20.
"Environmental  Permits" has the meaning assigned to  such  term  in  Section
3.20.
"ERISA"  means  the  Employee Retirement Income  Security  Act  of  1974,  as
amended.
"ERISA Affiliate" has the meaning assigned to such term in Section 3.15.
"Exchange  Act"  means Securities Exchange Act of 1934, as amended,  and  the
rules and regulations promulgated thereunder.
"GAAP" has the meaning assigned to such term in Section 1.8.

"Governmental  Authority"  means  any  nation  or  government,   any   state,
municipality,  or other political subdivision thereof and any  entity,  body,
agency,  commission,  department, board, bureau or court,  whether  domestic,
foreign,  or  multinational,  exercising  executive,  legislative,  judicial,
regulatory or administrative functions of or pertaining to government and any
executive official thereof.
"Hazardous Materials" has the meaning assigned to such term in Section 3.20.
"Holder" has the meaning assigned to such term in Section 5.1.

"Incremental Amount" has the meaning assigned to such term in Section 5.5.

"Indemnified Party" has the meaning assigned to such term in Section 5.6.

"Indemnifying Party" has the meaning assigned to such term in Section 5.6.

"Instruction Letter" has the meaning assigned to such term in Section 1.5.
"Intellectual  Property" has the meaning assigned to  such  term  in  Section
3.17.
"Knowledge" means, with respect to any Person, the actual knowledge after due
inquiry of such Person and its subsidiaries.
"Law" means any statute, law, ordinance, regulation, decision or rule of  any
Governmental Authority, whether foreign, federal, state, municipal, local  or
otherwise.
"Material Adverse Effect" shall mean, with respect to any Person, a  material
adverse   effect  on  the  business,  properties,  operations,  or  condition
(financial  or otherwise) of such Person (and its subsidiaries), taken  as  a
whole.
"Options" has the meaning assigned to such term in Section 3.11.
"Person" means an individual, a partnership, a corporation, an association, a
joint stock company, a trust, a joint venture, an unincorporated organization
and   a  Governmental  Authority  or  any  department,  agency  or  political
subdivision thereof.
"Piggy-Back  Registration" has the meaning assigned to such term  in  Section
5.2.

"Plan" has the meaning assigned to such term in Section 3.15.

<PAGE>

"Purchase Price" has the meaning assigned to such term in Section 1.2.

"Purchaser" means Kenneth Cole Productions, Inc., a New York corporation.

"Registrable  Securities" has the meaning assigned to such  term  in  Section
5.1.

"Registration Expenses" means the following expenses of registration: (i) all
registration  and  filing fees attributable to shares sold  by  the  Company,
(ii)  fees  and  expenses  of compliance with securities  or  blue  sky  laws
(including  reasonable fees and disbursements of counsel in  connection  with
blue  sky  qualifications of the Registrable Securities),  (iii)  processing,
duplicating  and  printing expenses, (iv) the fees and expenses  incurred  in
connection  with  the listing of the Registrable Securities,  (v)  reasonable
fees  and  disbursements  of counsel or the Company and  customary  fees  and
expenses for independent certified public accountants retained by the Company
(including the expenses of any comfort letters or costs associated  with  the
delivery  by independent certified public accountants of a comfort letter  or
comfort letters requested but not the cost of any audit other than a year end
audit), (vi) the reasonable fees and expenses of any special experts retained
by  the  Company  in connection with such registration, (vii)  any  fees  and
disbursements  of  underwriters customarily paid by  issuers  or  sellers  of
securities;  and (viii) any other expenses of registration, customarily  paid
by the Company.
"Release" has the meaning assigned to such term in Section 3.20.
"Securities Act" means the Securities Act of 1933, as amended, and the  rules
and regulations promulgated thereunder.
"SEC" means the Securities and Exchange Commission.
"Selling  Expenses" means any underwriting fees, discounts or commissions  or
SEC  filing fees attributable to the sale of Registrable Securities,  or  the
fees  and expenses of counsel for the Holders, such costs to be borne by  the
Holders.
"Underwriter" has the meaning assigned to such term in Section 5.1.

ARTICLE 7.

MISCELLANEOUS

     7.1. Press Releases and Communications.  Except as may be required by the
Exchange  Act, no press release, public announcement or statement related  to
this  Agreement  or  the  transactions  contemplated  herein,  or  any  other
announcement or communication to the employees, customers or suppliers of the
Company or Purchaser, shall be issued or made by any party hereto without the
joint  approval of Purchaser and the Company; provided, that, once  any  such
announcement  or  statement  is  jointly approved,  a  substantially  similar
announcement or statement may be republished without further approval.

     7.2. Expenses.  Except as otherwise expressly provided herein, each party
shall pay all of its own expenses (including without limitation attorneys',
consultants and accountants' fees and expenses) incurred in connection with
the negotiation of this Agreement, the performance of their respective
obligations hereunder and the consummation of the transactions contemplated
by this Agreement (whether consummated or not).

     7.3. Notices.  All notices, demands and other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when personally delivered or
by overnight courier to the parties at the following addresses or sent by
facsimile, with confirmation received, to the facsimile numbers below (or at
such other address or facsimile number for a party as shall be specified by
like notice):

<PAGE>


Notices to Purchaser:            with a copy (which shall not constitute
                                      delivery of notice) to:

Kenneth Cole Productions, Inc.         Kenneth Cole Productions, Inc.
603 West 50th Street                   603 West 50th Street
New York, NY  10019                    New York, NY  10019
Attn: Chairman or Vice Chairman        Attn: Michael Colosi, General Counsel
Tel: (212) 265-1500                    Tel: (212) 265-1500
Fax: (212) 830-7422                    Fax: (212) 830-7422

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


                                       Willkie Farr & Gallagher LLP
                                       787 Seventh Avenue
                                       New York, NY  10019
                                       Tel: (212) 728-8261
                                       Fax: (212) 728-9261



Notices to the Company       with a copy (which shall not constitute
                                     delivery of notice) to:


Bernard Chaus, Inc.                    Dechert LLP
530 Seventh Avenue                     30 Rockefeller Plaza
New York, NY  10018                    New York, NY 10112-2200
Attn:  Chief Executive Officer         Attn:  Richard A. Goldberg, Esq.
Tel.: (212)354-1280                    Tel:(212) 649-8740
Fax:  (212) 698-3599                   Fax:(212)869-2626


<PAGE>

    7.4. Assignment.  This Agreement and all of the provisions hereof shall be
binding  upon  and  inure  to the benefit of the  parties  hereto  and  their
respective  successors and assigns, except that, other than with  respect  to
registration rights as described below, neither this Agreement nor any of the
rights,  interests or obligations hereunder may be assigned by  Purchaser  or
the  Company without the written consent of the other party, such consent not
to  be  unreasonably withheld except that Purchaser may assign this Agreement
to  any  Affiliate.  Each Holder of Registrable Securities may assign to  any
transferee  of Registrable Securities its registration rights under  Sections
5.1  and 5.2 hereof and delegate to the transferee its obligations under this
Agreement including, without limitation, the rights of assignment pursuant to
this  Section  7.4;  provided  that (1) notice  of  any  assignment  of  such
registration  rights must be given to the Company, (2) such transferee  shall
accept such rights and assume such obligations for the benefit of the Company
by  written instrument, in form and substance reasonably satisfactory to  the
Company,  (3) only one such transferee can request a Demand Registration  (to
the extent the Demand Registration has not already been effected), and (4) no
more   than   three  such  transferees  may  participate  in   a   Piggy-Back
Registration.   Thereafter, without any further action  by  any  person,  all
references  in  this Agreement to the Holder of such Registrable  Securities,
and  all  comparable  references, shall be deemed to  be  references  to  the
transferee,  and  the transferor shall be released from  each  obligation  or
liability under this Agreement, with respect to the Registrable Securities so
transferred.

     7.5. Severability.  Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any
other situation or in any other jurisdiction.  If the final judgment of a
court of competent jurisdiction declares that any term or provision hereof is
invalid or unenforceable, the parties hereto agree that the court making the
determination of invalidity or unenforceability shall have the power to
reduce the scope, duration or area of the term or provision, to delete
specific words or phrases or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified
after the expiration of the time within which the judgment may be appealed.


     7.6. No Strict Construction.  The language used in this Agreement shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against
any Person.

     7.7. Amendment and Waiver.  Any provision of this Agreement may be
amended or waived only in writing signed by Purchaser and the Company.  No
waiver of any provision hereunder or any breach or default thereof shall
extend to or affect in any way any other provision or prior or subsequent
breach or default.

     7.8. Complete Agreement.  This Agreement and the documents referred to
herein contain the complete agreement between the parties hereto and supersede
any prior understandings, agreements or representations by or between the
parties, written or oral, which may have related to the subject matter hereof
in any way.

     7.9. Counterparts.  This Agreement may be executed in multiple
counterparts, any one of which need not contain the signatures of more than
one party, but all such counterparts taken together shall constitute one and
the same instrument.  Delivery of an executed signature page of this Agreement
by facsimile shall be effective as delivery of a manually executed counterpart
hereof.

<PAGE>

     7.10. Survival; Termination of Covenants. The representations and
warranties in Articles 3 and 4 of this Agreement shall survive until the
first anniversary of the date hereof. The covenants and agreements of the
Company and Purchaser under this Agreement shall survive in accordance with
their terms.
     7.11.     Indemnification.

        (a)  The Company hereby agrees to indemnify, defend and hold harmless
Purchaser from and against all actual third party demands, claims, or  causes
of  action,  assessments, losses, damages, liabilities,  costs  and  expenses
(collectively, "Claims"), including without limitation reasonable  attorneys'
fees  and  expenses,  asserted against, resulting  to,  or  imposed  upon  or
incurred  by  Purchaser  by  reason of or resulting  from  a  breach  of  any
representation  or  warranty  of the Company  contained  in  this  Agreement;
provided,  that,  the  aggregate maximum amount that  the  Company  shall  be
required to pay pursuant to this Section 7.11(a) shall be the Purchase Price.

(b)  Purchaser hereby agrees to indemnify, defend and hold harmless the
Company from and against all Claims, including without limitation reasonable
attorneys' fees and expenses, asserted against, resulting to, or imposed upon
or incurred by the Company by reason of or resulting from a breach of any
representation or warranty of Purchaser contained in this Agreement;
provided, that, the aggregate maximum amount that Purchaser shall be required
to pay pursuant to this Section 7.11(b) shall be the Purchase Price.

      7.12.  Governing  Law.  All matters relating to the  interpretation,
construction, validity and enforcement of this Agreement shall be governed by
and  construed in accordance with the domestic laws of the State of New  York
without  giving  effect to any choice or conflict of law  provision  or  rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of laws of any jurisdiction other than the State of New York.

      7.13. Submission to Jurisdiction.  All actions or proceedings arising in
connection with this Agreement may be tried and litigated in the New York
State Supreme Court, County of New York or the United States District Court
for the Southern District of New York.  Each party hereby waives any right it
may have to assert the doctrine of forum non conveniens or similar doctrine
or to object to venue with respect to any proceeding brought in accordance
with this paragraph, and stipulates that the New York State Supreme Court,
County of New York or the United States District Court for the Southern
District of New York shall have in persona jurisdiction over each of them for
the purpose of litigating any such dispute, controversy, or proceeding.  Each
party hereby authorizes and accepts service of process sufficient for
personal jurisdiction in any action against it as contemplated by this
Section 7.13 by registered or certified mail, return receipt requested,
postage prepaid, to its address for the giving of notices as set forth in
Section 7.3 above.  Nothing herein shall affect the right of any party to
serve process in any other manner permitted by law.

     7.14.Descriptive Headings; Interpretation.  The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a part
hereof or define, limit or otherwise affect the meaning of any of the terms
or provisions hereof.  The use of the word "including" in this Agreement
shall be by way of example rather than by limitation and shall be deemed to
include the phrase "including without limitation."

     7.15.  Construction of Certain Terms and Phrases.  Unless the context of
this Agreement otherwise requires, (i) words of any gender include each other
gender; (ii) unless the context requires otherwise, words using the singular
or plural number also include the plural or singular number, respectively;
(iii) the terms "hereof," "herein," "hereby" and derivative or similar words
refer to this entire Agreement; and (iv) the terms "Article" or "Section"
refer to the specified Article or Section of this Agreement.  Whenever this
Agreement refers to a number of days, such number shall refer to calendar
days unless business days are specified.

<PAGE>

     7.16. No Third Party Beneficiaries.  This Agreement shall not confer any
rights or remedies upon any Person other than the parties hereto and their
respective heirs, personal legal representatives, successors and permitted
assigns, and the Indemnified Parties.