kennethcole_10k-ex1017.htm


    EXHIBIT
10.17

    


    Date:
November 7, 2008

    


    


    


    


    Kenneth
Cole Productions, L.P.

    400 Plaza
Drive

    Secaucus,
NJ 07094

    


    


    


    RECEIVABLES
MANAGEMENT AGREEMENT

    


    Ladies
and Gentlemen:

    


    We are
pleased to confirm the terms and conditions that will govern our funds in use
accounting, non-borrowing, notification receivables management arrangement with
you (the “Agreement”).

    


    1.  ASSIGNMENT
OF ACCOUNTS

    


    Except as
otherwise provided herein, you hereby assign to us for purposes of collection
only, the right to collect on all accounts arising from your sales of inventory
or rendition of services including those under any trade names, through any
divisions and through any selling agent (except only for the “Excluded
Accounts”, as defined below; collectively, the "Accounts" and individually, an
"Account") and we acknowledge and agree that, except as otherwise provided
herein, all Accounts and all proceeds thereof shall be your sole
property.  For all purposes hereof, except to the extent otherwise
provided herein, you hereby appoint us as your agent to collect all Accounts, to
receive all collections in respect thereof, and to perform all tasks and duties
that may be necessary or advisable for carrying out of the transactions
contemplated by this Agreement. Further in this regard, you also hereby
authorize us to take any and all steps, in your name or in ours, which we deem
necessary or desirable in accordance with applicable law, to collect all amounts
due or to become due under any and all of the Accounts. We hereby confirm that
until such time as we may purchase any Account in accordance with this
Agreement, we shall not have any security interest in any of your Accounts, but
we shall only be granted a security interest in your Accounts upon our purchase
of any Account, subject to and in accordance with the terms of this Agreement.
We shall keep records covering the transactions contemplated by this Agreement,
including the identity and collection status of each Account and collections in
respect thereof. As used herein, the term “Excluded Accounts” shall mean: (a)
the accounts of any customer in respect of which we have declined to assume any
Credit Risk whatsoever for such customer, provided and to the extent, however,
that you have requested us to assume the Credit Risk for any additional sales
made by you to such customer and we remain unwilling to assume any Credit Risk
concerning such customer, (b) non-credit sales which are based solely upon and
covered by letters of credit or other credit enhancements established your
customer in your behalf, and (c) all fees and charges due from your licensees
that do not relate to the sale  of goods or services by you to
them.

    


    2.  CREDIT
APPROVAL

    


    2.1
Requests for credit approval for all of your orders must be submitted to our
Credit Department via computer by either: (a) On-Line Terminal Access, or (b)
Electronic Batch Transmission.  If you are unable to submit orders via
computer, then orders can be submitted over the phone, by fax or in
writing.  All credit decisions by our Credit Department (including
approvals, declines and holds) will be sent to you daily by a Credit Decisions
Report, which constitutes the official record of our credit
decisions.  Credit approvals will be effective only if shipment is
made or services are rendered within thirty (30) days from the completion date
specified in our credit approval.    Credit approval of any
Account may be withdrawn by us any time before delivery is made or services are
rendered.

    


    2.2   We
assume the Credit Risk on each Account approved in the Credit Decision Report.
“Credit Risk” means the customer's failure to pay the Account in full when due
on its longest maturity solely because of its financial inability to pay and for
no other reason.  If there is any change in the amount, terms,
shipping date or delivery date for any shipment of goods or rendition of
services (other than accepting returns and granting allowances as provided in
section 8 below), you must submit a change of terms request to us, and, if such
pertains to a Factor Risk Account then we shall advise you of our decision
either to retain the Credit Risk or to withdraw the credit
approval.  Accounts on which we bear the Credit Risk are referred to
collectively as "Factor Risk Accounts", and individually as a "Factor Risk
Account".  Accounts on which you bear some or all of the risk as to
credit are referred to collectively as "Client Risk Accounts", and individually
as a "Client Risk Account".

     

    
      
        
        

      

      
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2.3 We
shall have no liability to you or to any person, firm or entity for declining,
withholding or withdrawing credit approval on any order.  If we
decline to credit approve an order and furnish to you any information regarding
the credit standing of that customer, such information is confidential and you
agree not to reveal same to the customer, your sales agent or any third
party.  You agree that we have no obligation to perform, in any
respect, any contracts relating to any Accounts.

    


    3.  INVOICING

    


    You agree
to place a notice (in form and content acceptable to us) on each invoice and
invoice equivalent that for the purposes of collection, the Account is assigned
and payable only to us, and to take all necessary steps so that payments and
remittance information are directed to us. All invoices, or their equivalents,
will be promptly mailed or otherwise transmitted by you to your customers at
your expense.  You will provide us with copies of all invoices (or the
equivalent thereof if the invoices were sent electronically), confirmation of
the assignment of the Accounts to us and proof of shipment or delivery, all as
we may reasonably request.  If you fail to provide us with copies of
such invoices (or equivalents) or such proofs when requested by us, we will not
bear any Credit Risk as to those Accounts.

    


    4.  REPRESENTATIONS
AND WARRANTIES

    


    4.1  You
represent and warrant that: each Account is based upon a bona fide sale and
delivery of inventory or rendition of services made by you in the ordinary
course of business; the inventory being sold and the Accounts created are your
exclusive property and that upon our purchase of any Accounts of a customer, all
Accounts due and to become due from the customer involved are not, and will not
be, subject to any lien, consignment arrangement, encumbrance, claim or security
interest other than in our favor; all amounts are due in United States Dollars;
all original invoices bear notice of the assignment to us; any taxes or fees
relating to your Accounts or inventory are solely your responsibility; and none
of the Accounts assigned to us hereunder represent sales to any subsidiary,
affiliate or parent company. You also warrant and represent that: your customers
have accepted the goods or services and owe and are obligated to pay the full
amounts stated in the invoices according to their terms, without dispute, claim,
offset, defense, deduction, rejection, recoupment, counterclaim or contra
account, other than as to returns and allowances as provided in section 8 below
(the foregoing being referred to in this Agreement as "Customer Claims"); you
and, to your knowledge, your affiliates are not Blocked Persons (as defined in
section 18.6 below); and no Account is due from a Blocked
Person.  Notwithstanding section 1, you shall not assign to us any
Account due from a Blocked Person. You covenant and agree that the average
dollar amount of all of your invoices and credits representing your Accounts
will be at least $1,000.00 (“Warranted Invoice Size”).

    


    4.2  You
further represent and warrant that: your legal name is exactly as set forth on
the signature page of this Agreement, you are a duly organized and validly
existing business organization incorporated or registered in the state of
Delaware and are qualified to do business in all states where required; the most
recent financial statements provided by you to us accurately reflect your
financial condition as of that date and there has been no material adverse
change in your financial condition since the date of those financial
statements.  You agree to furnish us with such information concerning
your business affairs and financial condition as we may reasonably request from
time to time, including financial statements as of the end of each fiscal
year.

     

    
      
        
        

      

      
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    4.3  You
agree that you will promptly notify us of any change in your:  name,
state of incorporation or registration, location of your chief executive office,
place(s) of business, and legal or business structure.  Further, you
agree that you will promptly notify us of any change in control of the ownership
of your business organization, and of significant lawsuits or proceedings
against you.

    


    5.  PURCHASE
OF ACCOUNTS

    


    Except as
otherwise provided herein, we shall purchase Factor Risk Accounts from you,
subject to and in accordance with the CIT Optional Purchase Provisions (defined
in section 7 below), the Client Mandatory Purchase Provisions (defined in
section 7 below) and/or  the Customer Purchase Provisions (defined in
section 9 below), for the gross amount of the respective invoices,
less:  accounts receivable management fees or charges, trade and cash
discounts allowable to, or taken by, your customers, credits, cash on account
and allowances and all amounts paid, collected or otherwise recovered prior to
our purchase in respect of the customer’s invoices ("Purchase
Price").  Our purchase of those Accounts will be reflected on the
Statement of Account (defined in section 10 below), which we shall render to
you, which will also reflect all credits and discounts made available to your
customers.

    


    6.  ADVANCES

    


    We do not
expect to advance funds to you prior to the collection of the Accounts, but we
may do so at your request in our sole discretion, subject to such additional
terms and conditions as we may reasonably request.  We have the right,
at any time and from time to time, to hold any reserves we deem reasonably
necessary as security for the payment and performance of any and all of your
Obligations (defined in section 12 below). All amounts you owe us, including all
advances to you and any debit balance in your Client Position Account (defined
in section 10 below), and any Obligations, are payable on demand and may be
charged to your account at any time.

    


    7.  PAYMENT
OF ACCOUNTS

    


    7.1 All
payments received by us on the Accounts will be promptly applied to your account
with us after crediting your customer's account.  Upon receipt by us
of any remittances made in respect of the Accounts, all such remittances
received and applied by us, less any amounts due us hereunder, will be
transferred and disbursed to you as follows:  (i) on Monday of the
following week (or on the next business day thereafter, if that Monday is not a
business day) for payments applied by us on the previous Friday, (ii) on
Wednesday of the same week (or on the next business day thereafter, if that
Wednesday is not a business day) for payments applied by us on Monday and
Tuesday of any week, and (iii) on Friday of  the same week (or on the
next business day thereafter, if that Friday is not a business day) for payments
applied on Wednesday and Thursday of any week. No checks, drafts or other
instruments received by us will constitute final payment of an Account unless
and until such items have actually been collected.  With respect to
any Factor Risk Account that has become past due, or with respect to which a
customer has undergone an adverse change in its financial condition or business
prospects, or has called a meeting of creditors or ceased to do business, we
shall have the right at any time in such an instance, at our sole option, to
purchase the Accounts of the customer from you, subject to section 9.1 below, by
paying the Purchase Price of the customer’s Factor Risk Accounts to you,
regardless of whether payment on such Factor Risk Accounts have been received by
us from the customer, and regardless of whether any of the circumstances
described in section 7.2 below have occurred (herein collectively, the “CIT
Optional Purchase Provisions”).

    


    
      
        
        

      

      
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    7.2 We
shall purchase any Factor Risk Account and the amount of the Purchase Price of
any Factor Risk Account will be credited to your account and promptly paid to
you as of the earlier of the following dates:

    


    (a)  the
date of the Factor Risk Account's longest maturity if a proceeding or petition
is filed by or against the customer under any state or federal bankruptcy or
insolvency law, or if a receiver or trustee is appointed for the customer;
or

    


    (b)  the
last day of the third month following the Account’s longest maturity date if
such Account remains unpaid as of said date without the occurrence of any of the
events specified in clause (a) above (the foregoing, herein collectively, the
“Client Mandatory Purchase Provisions”).

    


    If any
Factor Risk Account credited to you was not paid for any reason other than
Credit Risk, we shall reverse the credit and charge your account accordingly and
such Account shall then be deemed to be a Client Risk Account.

    


    8.  CUSTOMER
CLAIMS AND CHARGE BACKS

    


    8.1 You
must notify us promptly of any matter affecting the value, enforceability or
collectibility of any Account and of all Customer Claims.  You agree
to promptly issue credit memoranda or otherwise adjust the customer’s account
upon accepting returns or granting allowances.  For full invoice
credit memoranda, you agree to send duplicate copies thereof to us and to
confirm their assignment to us.  We shall cooperate with you in the
adjustment of Customer Claims, but we retain the right to adjust Customer Claims
on Factor Risk Accounts directly with customers, upon such terms as we in our
sole discretion may deem advisable.

    


    8.2  We
may at any time charge back to your account the amount of:  (a) any
Factor Risk Account which is not paid in full when due for any reason other than
Credit Risk; (b) any Factor Risk Account which is not paid in full when due
because of an act of God, civil strife, or war; (c) anticipation (interest)
deducted by a customer on any Account; (d) Customer Claims; (e) any Client Risk
Account which is not paid in full when due; and (f) any Account for which there
is a breach of any representation, warranty or covenant.  We shall not
bear the Credit Risk on any Account charged back to you.  A charge
back does not constitute a reassignment of an Account; provided, however, we
have the right in our sole discretion to reassign to you any Client Risk
Account.  We shall immediately charge any deduction taken by a
customer to your account.

    


    8.3  We
may at any time charge to your account the amount of:  (a) payments we
receive on Client Risk Accounts which we are required at any time to turnover or
return (including preference claims); (b) all remittance expenses (including
incoming wire charges, currency conversion fees and stop payment fees), other
than stop payment fees on Factor Risk Accounts; (c) expenses, collection agency
fees and attorneys' fees incurred by us in collecting or attempting to collect
any Client Risk Account or any Obligation (defined in section 12 below); (d) our
fees for handling collections on Client Risk Accounts which you have requested
us to process, as provided in the Guide (see section 18.2 below); and (e) any
loss, liability, claim or expense covered by the indemnity in the immediately
following sentence.  You shall indemnify us for, and hold us harmless
against, and we may charge your account for, any loss, liability, claim or
expense of any kind (including attorneys’ fees and disbursements) arising from:
(i) any Customer Claims, (ii) any claim for a return of any payment on or
relating to any Client Risk Account, (iii) any breach of your representation and
warranty set forth in section 4.1 above, to the effect that upon our purchase of
any Accounts of a customer, all such Accounts from the customer involved,
whether due or to become due, shall not be subject to any lien, consignment
arrangement, encumbrance, claim or security interest other than in our favor,
(iv) any other matter, except for: (i) any claim for a return of any payment on
or relating to any Factor Risk Account,  or (ii) any claim resulting
solely and directly from our own gross negligence or willful
misconduct.  The foregoing indemnity shall survive any termination of
this Agreement.

    


    
      
        
        

      

      
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    9.  HANDLING
AND COLLECTING ACCOUNTS; RETURNED GOODS

    


    9.1  Upon
our purchase of the Factor Risk Accounts, we may, at our sole election, also
purchase from you any other present and future Accounts of the same customer,
due and to become due, and all of such other present and future Accounts shall
be Client Risk Accounts. Notwithstanding the foregoing, after the purchase by us
of any Factor Risk Account(s), and if applicable, any other Account of the same
customer, in the event that such Factor Risk Account(s) is (are) subsequently
indefeasibly paid to us in full, then the Factor Risk Accounts and any other
Accounts of the customer involved will then be handled by us for purposes of
collection only, in accordance with section 1 of this Agreement ,and any
subsequent  purchases by us of Accounts of that customer will also
then be handled in accordance with the terms and conditions of this Agreement.
With respect to all Accounts of the customer that we purchase from you pursuant
to this Agreement, however, other than the Factor Risk Accounts (collectively,
the “Non-Factor Risk Purchased Accounts”), we shall have no obligation to you to
pay the Purchase Price therefor in accordance with section 7.2 above, and we
shall be obligated to pay you the Purchase Price for the Non-Factor Risk
Purchased Accounts only upon and to the extent of our receipt of payment thereof
from the customer, subject to the final sentence of this section and after first
deducting from such Purchase Price your pro rata allocated share of any costs,
fees and expenses paid or incurred by us in connection with our obtaining such
payment from the customer. Upon our purchase of the Accounts of any customer, we
shall have the right, in accordance with applicable law to: (a) bring suit, or
otherwise enforce collection thereof, in your name or ours; (b) modify the terms
of payment, (c) settle, compromise or release, in whole or in part, any amounts
owing, and (d) issue credits in your name or ours.  You agree to fully
cooperate with us and comply with our instructions in order to enforce our
rights and interests in and to the purchased Accounts in the underlying goods,
including all returned, rejected or repossessed inventory (“Returned
Goods”).  To the extent applicable, you waive any and all claims and
defenses based on suretyship. In the event any suit or proceeding  may
be instituted to collect from a customer obligated on purchased Accounts, you
agree to cooperate fully with us and our counsel in prosecuting the
same.  If moneys are due and owing from a customer for both Factor
Risk Accounts and Client Risk Accounts, you agree that any payments or
recoveries received on purchased Accounts may be applied first to reduce our
liability to you on any Factor Risk Accounts. All of the provisions as set forth
in this sub-section 9.1 are hereby collectively referred to as the “Customer
Purchase Provisions”).

    


    9.2  You
will promptly notify us upon your granting or issuing a discount, credit or
allowance with respect to any Account; provided however, that following our
purchase of any Accounts in accordance with this Agreement, any discounts,
credits or allowances granted or issued by you with respect to any Accounts of a
customer shall only occur with our prior written consent and shall reduce any
Credit Risk we may have pertaining to such Accounts by an equal dollar
amount.  You must immediately notify us if you receive any checks,
cash, notes or other documents or instruments, proceeds or property received
with respect to the Accounts and either promptly deliver the same to us, or
request that we charge back the Account to you. We may endorse your name or ours
on any such check, draft, instrument or document.  You hereby further
represent and warrant to us that upon our purchase of any Accounts by us
pursuant to this Agreement, such Accounts: (i) shall be free and clear of any
and claims, offsets, security interests and liens whatsoever; and
(ii)  you shall have sold, assigned and transferred to us as absolute
owner all of your right, title and interest thereto and therein.

    


    10.  STATEMENT
OF ACCOUNT

    


    Periodically
we shall make available to you certain reports reflecting Accounts assigned,
advances made, if any, fees and charges and all other financial transactions
between us during the applicable period ("Reports").  The Reports that
shall be made available to you include a Statement of Account reflecting
transactions in three sections: Accounts Receivable, Client Position Account and
Funds In Use.  The Reports shall be deemed correct and binding upon
you and shall constitute an account stated between us unless we receive your
written statement of exceptions within thirty (30) days after same are made
available to you.

     

    
      
        
        

      

      
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11.  GRANT
OF SECURITY INTEREST

    


    11.1   Concurrently
with our purchase of any Account and solely in connection therewith, as herein
provided, you shall assign and grant to us a first and paramount security
interest in: (a) all such purchased Accounts, as well as any related
instruments, documents, chattel paper (including electronic chattel paper) and
any other obligations owing to you of the customer; (b) unpaid seller's rights
(including rescission, repossession, replevin, reclamation and stoppage in
transit) with respect to such purchased Accounts; (c) rights to any inventory
represented by the foregoing, including Returned Goods; (d) reserves and credit
balances arising hereunder; (e) guarantees, collateral, supporting obligations
and letter of credit    rights with respect to the
foregoing; (f) insurance policies, proceeds or rights relating to the foregoing;
(g) cash and non-cash proceeds of the foregoing; and (h) Books and Records
(defined in section 13 below) evidencing or pertaining to the foregoing (herein
collectively, the “Collateral”).

    


    11.2   You
agree to comply with all applicable laws to perfect our security interest in
Collateral pledged to us hereunder, and to execute such documents as we may
require to effectuate the foregoing and to implement this
Agreement.  You irrevocably authorize us to file financing statements,
and all amendments and continuations with respect thereto, all in order to
create, perfect or maintain our security interest in the Collateral, as more
fully described above and you hereby ratify and confirm any and all financing
statements, amendments and continuations with respect thereto hereafter filed by
us pursuant to the foregoing authorization.

    


    12.  OBLIGATIONS
SECURED

    


    The
security interest granted hereunder and any lien or security interest that we
now or hereafter have in any of your other assets, collateral or property,
secure the payment and performance of all of your now existing and future
indebtedness and obligations to us, whether absolute or contingent, whether
arising under this Agreement or any other agreement or arrangement between us,
by operation of law or otherwise ("Obligations"). Obligations also includes
indebtedness arising under any guaranty, credit enhancement or other credit
support granted by you in our favor or issued by us on your
behalf.  Any reserves or balances to your credit and any other assets,
collateral or property of yours in our possession constitutes security for any
and all Obligations.

    


    13.  BOOKS
AND RECORDS AND EXAMINATIONS

    


    13.1 You
agree to maintain such Books and Records concerning the purchased Accounts as we
may reasonably request and to reflect our ownership of such Accounts in
accordance with this Agreement.  “Books and Records” means your
accounting and financial records (whether paper, computer or electronic), data,
tapes, discs, or other media, and all programs, files, recordsand procedure
manuals relating thereto, wherever located.

    


    13.2  Upon
our reasonable request, you agree to make your Books and Records available to us
for examination and to permit us to make copies or extracts
thereof.  Also, you agree to permit us to visit your premises during
your business hours and to conduct such examinations as we deem reasonably
necessary.  To cover our costs and expenses of any such examinations,
we shall charge you a fee for each day, or part thereof, during which such
examination is conducted, plus any out-of-pocket costs and expenses incurred by
us, as provided in the Guide (see section 18.2 below), which costs and expenses
pertaining to any such examination, shall not however, in the absence of the
occurrence of an Event of Default, exceed the sum of $2,500.00 per
annum.

    


    14.  INTEREST

    


    14.1  Interest
is charged on any adjustments under this Agreement and on any advances that may
be made under section 6 above, as of the last day of each month based on the
daily debit balances in your Funds In Use account for that month, at a rate
equal to the Chase Prime Rate JPMorgan Chase Bank (or its successor) in New
York, New York from time to time as its prime rate, and is not intended to be
the lowest rate of interest charged by JPMorgan Chase Bank to its borrowers. Any
change in the rate of interest hereunder due to a change in the Chase Prime Rate
will take effect as of the first of the month following such change in the Chase
Prime Rate. All interest is calculated on a 360 day year.

     

    
      
        
        

      

      
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    14.2   In
no event will interest charged hereunder exceed the highest lawful rate. In the
event, however, that we do receive interest in excess of the highest lawful
rate, you agree that your sole remedy would be to seek repayment of such excess,
and you irrevocably waive any and all other rights and remedies which may be
available to you under law or in equity.

    


    15.  ACCOUNTS
RECEIVABLE MANAGEMENT FEES AND OTHER CHARGES

    


    15.1 For
our services hereunder, you will pay us an accounts receivable management fee of
the gross face amount of all Accounts assigned to us.   In
addition, you will pay a fee of one-quarter of the gross face amount of each
Account for each thirty (30) day period or part thereof by which the longest
terms of sale applicable to such Account exceed ninety (90) days (whether as
originally stated or as a result of a change of terms requested by you or the
customer).  For Accounts arising from sales to customers located
outside the fifty states of the United States of America, you will pay us an
additional accounts receivable management fee of the gross face amount of all
such Accounts. All accounts receivable management fees or charges are due and
charged to your account upon your assignment to us of the underlying Account
pursuant to section 1 of this Agreement.

    


    15.2 You
agree to pay all costs and expenses incurred by us in connection with or in any
way related to: (i) this Agreement or (ii) the preparation, execution,
administration and enforcement of this Agreement, or any modification, waiver,
release or amendment relating hereto, including all reasonable fees and expenses
attributable to the services of our attorneys (whether in-house or outside),
search fees and public record filing fees.  The above reimbursement
provision shall survive any termination of this Agreement. Furthermore, you
agree to pay to us our fees (as more fully set forth in the Guide, see section
18.2 below) including fees for: (a) special reports prepared by us at your
request; and (b) wire transfers.  All such fees will be charged to
your account when incurred.  Our fees may be changed by us from time
to time upon notice to you; however, any failure to give you such notice does
not constitute a breach of this Agreement and does not impair our ability to
institute any such change.

    


    15.3 Any
tax or fee of any governmental authority imposed on or arising from any
transactions between us, any sales made by you, or any inventory relating to
such sales is your sole responsibility (other than income and franchise taxes
imposed on us which are not related to any specific transaction between
us).  If we are required to withhold or pay any such tax or fee, or
any interest or penalties thereon, you hereby indemnify and hold us harmless
therefor and we shall charge your account with the full amount
thereof.

    


    16.  TERMINATION

    


    16.1   Unless
earlier terminated as provided below, this Agreement shall terminate as of the
Termination Date.  "Termination Date" shall mean December 31, 2009.
Notwithstanding the foregoing, however, you shall have the right to terminate
this Agreement at any time prior to December 31, 2009, by giving us at least
ninety (90) days prior written notice of termination. Except as otherwise
provided, we may terminate this Agreement at any time: (i) by giving you at
least ninety (90) days prior written notice of termination, or (ii) in the event
that we shall reasonably determine that: (a) any material portion of this
Agreement is not enforceable under applicable law, (b) the performance of this
Agreement would require any filing with, or consent or approval from, any
governmental or regulatory authority, or (c) this Agreement and/or the
performance thereof becomes the subject of any proceeding instituted by any
governmental authority.  However, we may terminate this Agreement
immediately, without prior notice to you, upon the occurrence of an Event of
Default (defined in section 17.1 below).

    


    
      
        
        

      

      
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    16.2 Unless
sooner demanded, all Obligations will become immediately due and payable upon
any termination of this Agreement.

    


    16.3   All
of our rights, liens and security interests hereunder continue and remain in
full force and effect after any termination of this Agreement and pending a
final accounting, we may withhold any balances in your account unless we are
supplied with an indemnity satisfactory to us to cover all
Obligations.  In respect of any Customer as to which we have any
Credit Risk on the effective date of termination, you agree to continue to
assign all accounts receivable to us of such Customer and to remit to us all
collections on such accounts receivable, until all Obligations have been paid in
full or we have been supplied with an indemnity satisfactory to us to cover all
Obligations.  Upon any termination of this Agreement, in addition to,
and without limitation of, our other rights hereunder, we in our sole discretion
shall have the right to confirm and verify that all Accounts created on or
before the effective date of termination have been assigned to us
hereunder.  In the event we determine that you have not assigned to us
all such Accounts, then we shall charge your account with the aggregate amount
of the accounts receivable management fees or charges that we would have been
paid if you had assigned to us all such Accounts as is required
hereunder.  Such amount shall be included in the
Obligations.  In order to conduct such confirmation and verification,
you agree at all reasonable times to make your Books and Records available to us
for examination and to permit us to make copies or extracts
thereof.  Also, you agree to permit us to visit your premises during
your business hours and to conduct such examinations as we deem reasonably
necessary to effectuate the foregoing confirmation and
verification.

    


    17.  EVENTS OF DEFAULT AND
REMEDIES UPON DEFAULT

    


    17.1  It
is an "Event of Default" under this Agreement if: (a) your business ceases or a
meeting of your creditors is called; (b) any bankruptcy, insolvency,
arrangement, reorganization, receivership or similar proceeding is commenced by
or against you under any federal or state law; (c) you breach any
representation, warranty or covenant contained in this Agreement; (d) you fail
to pay any Obligation when due; or (e) any default shall have occurred under any
other agreement or arrangement between us.

    


    17.2
After the occurrence of an Event of Default which is not waived by us, we may
terminate this Agreement without notice to you.

    


    17.3    Upon
any termination of this Agreement, we shall then have immediate access to any
and all Books and Records as may pertain to the Collateral referred to
herein.  Furthermore, as may be necessary to administer and enforce
our rights in the Collateral hereunder, or to facilitate the collection or
realization thereof, we have your permission to use (at your expense) your
personnel, supplies, equipment, computers and space, at your place of business
or elsewhere.

    


    17.4   Upon
the Purchase Price of any Factor Risk Account being credited and/or paid to you,
as herein provided and/or following the occurrence of any Event of Default
(which is not waived by us), with respect to all present and future Accounts of
the customer and all other Collateral in which we have a security interest, as
more fully set forth above, we shall have all of the rights and remedies of a
secured party under Article 9 of the Uniform Commercial Code.  If
notice of intended disposition of any such Collateral is required by law, it is
agreed that five (5) days notice constitutes reasonable notice.  The
net cash proceeds resulting from the exercise of any of the foregoing rights,
after deducting all charges, costs and expenses (including reasonable attorneys'
fees) will be applied by us to the payment or satisfaction of the Obligations,
whether due or to become due, in such order as we may elect.  You
shall remain liable to us for any deficiency with respect to your
Obligations.  With respect to any Accounts purchased from you in
accordance with this Agreement, and any Returned Goods relating thereto, you
hereby confirm that we shall be the owners thereof and that our rights of
ownership will permit us to deal with this property as the owner thereof
and you confirm that you shall have no interest therein.

    


    
      
        
        

      

      
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    18.  MISCELLANEOUS
PROVISIONS

    


    18.1  This
Agreement, and all attendant documentation, as the same may be amended from time
to time, constitutes the entire agreement between us with regard to the subject
matter hereof, and supersedes any prior agreements or
understandings.  This Agreement can be changed only by a writing
signed by both of us.  Our failure or delay in exercising any right
hereunder will not constitute a waiver thereof or bar us from exercising any of
our rights at any time. The validity, interpretation and enforcement of this
Agreement is governed by the laws of the State of New York, excluding the
conflict laws of such State.

    


    18.2  The
Client Service Guide, as supplemented and amended from time to time (the
“Guide”) has been furnished to you or is being furnished to you concurrently
with the signing of this Agreement, and by your signature below you acknowledge
receipt thereof. The Guide provides information on credit approval processes,
accounting procedures and fees.  The procedures for Electronic Batch
Transmission are covered in supplemental instructions to the
Guide.  From time to time, we may provide you with amendments,
additions, modifications, revisions or supplements to the Guide, which will be
operative for transactions between us. All information and exhibits contained in
the Guide, on any screen accessed by you, and on any print-outs, reports,
statements or notices received by you are, and will be, our exclusive property
and are not to be disclosed to, or used by, anyone other than you, your
employees or your professional advisors, in whole or in part, unless we have
consented in writing.

    


    18.3  This
Agreement binds and benefits each of us and our respective successors and
assigns; provided,  however, that except in connection with the
assignment of this Agreement by you to another wholly-owned subsidiary (the
“Successor Concern”) of your parent company, Kenneth Cole Productions, Inc.,
upon the merger of your company into the Successor Concern (as the surviving
entity), including without limitation upon the execution and delivery to us of a
written assumption by, and agreement of, the Successor Concern to be bound by
and perform under this Agreement in all respects, to the same extent as if the
Successor Concern had originally been a party hereto, you may not assign this
Agreement or your rights hereunder without our prior written
consent.

    


    18.4
Section headings are for convenience only and are not
controlling.  The use of “including” means “including without
limitation”.

    


    18.5  If
any provision of this Agreement is contrary to, prohibited by, or deemed invalid
under applicable laws or regulations, such provision will be inapplicable and
deemed omitted to such extent,  but the remainder will not be
invalidated thereby and will be given effect so far as possible.

    


    18.6  You
further represent or covenant, as the case may be, that you: (i) are familiar
with all applicable laws, regulations, orders, etc. in effect from time to time
relating to anti-money laundering and terrorism ("Anti-Terrorism Laws") of the
United States of America, including the USA Patriot Act; (ii) acknowledge that
your transactions are subject to applicable Anti-Terrorism Laws; (iii) will
comply in all material respects with all applicable Anti-Terrorism Laws,
including, if appropriate, the USA Patriot Act; (iv) acknowledge that our
performance hereunder is also subject to our compliance with all applicable
Anti-Terrorism Laws, including the USA Patriot Act; (v) acknowledge that we will
not conduct business with any Blocked Person and we will not knowingly accept
assignment of and/or purchase any Account due from a Blocked Person; (vi) will
provide to us all such information about your ownership, officers, directors,
business structure and, to the extent not prohibited by applicable law or
agreement, customers, as we may reasonably require; and (vii) will take such
other action as we may reasonably request in connection with our obligations
described in clause (iv) above.  “Blocked Person” shall mean any
person: (i) listed in the annex to Executive Order 13224, (ii) owned or
controlled by, or acting for or on behalf of, any person listed in the annex to
Executive Order 13224, (iii) with which we are prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law, (iv) that
commits, threatens or conspires to commit or supports “terrorism” as defined in
Executive Order 13224, (v) a person that is named a “specially designated
national” or “blocked person” on the most current list published by OFAC or
other similar list, (vi) a person that is named a “denied person” on the most
current list published by the U.S. Commerce Department, or (vii) (A) an agency
of the government of a Sanctioned Country, (B) an organization controlled by a
Sanctioned Country, or (C) a person resident in a Sanctioned Country to the
extent subject to a sanctions program administered by
OFAC.  “Sanctioned Country” shall mean any country subject to the
sanctions program identified on the most current list maintained by
OFAC.

     

    
      
        
        

      

      
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19.  JURY
TRIAL WAIVER

    


    To
the extent permitted by applicable law, we each hereby waive any right to a
trial by jury in any action or proceeding arising directly or indirectly out of
this Agreement, or any other agreement or transaction between us or to which we
are parties.

     

     

    If the
foregoing is in accordance with your understanding, please so indicate by
signing and returning to us the original and one copy of this
Agreement.  This Agreement will take effect as of the date set forth
above but only after being accepted below by one of our officers in New York,
New York, after which we shall forward a fully executed copy to you for your
files.

    


    


     

    
      	 	

              Very
      truly yours,

              


              


              THE
      CIT GROUP/COMMERCIAL SERVICES, INC.

              By: /s/
      Joseph Sgalardi

              Name:
      Joseph Sgalardi

              Title:
      Vice President

            
	 	 
	

              Read
      and Agreed to:

              


              KENNETH
      COLE PRODUCTIONS, LP

              By: /s/
      David P. Edelman

              Name:
      David P. Edelman

              Title:
      Chief Financial Officer

            	 
	 	 
	 	

              Accepted
      at: New York, New York

              THE
      CIT GROUP/COMMERCIAL SERVICES, INC

               

              By: /s/
      Patrick J. Rohan

              Name:
      Patrick J. Rohan

              Title:
      Senior Vice President

            


    

     

     

     

    10