Document:

Execution Copy

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                            STOCK PURCHASE AGREEMENT

                                 BY AND BETWEEN

                               BERNARD CHAUS, INC.

                                       AND

                         KENNETH COLE PRODUCTIONS, INC.

                                  JUNE 6, 2005

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                            STOCK PURCHASE AGREEMENT

                  THIS AGREEMENT (the  "Agreement") is made as of June 6,, 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").

                                   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,

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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.

         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.

              (a) 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.

              (b) 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.

              (c) 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.

              (d) 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.

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         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.

         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.

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         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
of 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").

              (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.

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         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

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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.

              (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.

              (e) 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

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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.

         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 all applicable Environmental Laws (as hereinafter defined); and

                  (ii) 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.

              (b) Each of the Company and its subsidiaries has obtained all
environmental, health and safety permits and governmental authorizations
(collectively, the "ENVIRONMENTAL

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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.

              (c)   There is no Environmental Claim (as hereinafter defined)
pending

                     (i) against the Company or any of its subsidiaries;

                     (ii) 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

                     (iii) 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.

              (d) 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.

              (e) 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.

              (f) 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.

              (g) As used in this Section 3.20:

                     (i) "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

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(A)  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;

(B)  circumstances forming the basis of any violation, or alleged violation, of
     any Environmental Law; or

(C)  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;

              (ii) "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;

              (iii) "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

              (iv) "RELEASE" means any release, spill, emission, leaking,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the atmosphere, soil, surface water, groundwater or property.

                                   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

                                       10

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 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

                                       11

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."

                                       12

              (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.

                                   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

                                       13

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.

         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

                                       14

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.

         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

                                       15

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.

              (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

                                       16

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 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

                                       17

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.

              (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.

                                       18

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).

              (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

                                       19

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 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

                                       20

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.

                                       21

              "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.

              "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.

                                       22

              "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.

              "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.

                                       23

              "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):

                                       24

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:  Richard A. Goldberg, Esq.
                                     Tel: (212) 649-8740
Attn:    Chief Executive Officer     Fax:  (212) 698-3599

Tel.:    (212) 354-1280
Fax:     (212) 869-2626

         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

                                       25

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.

         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,

                                       26

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.

                                       27

         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.

                                       28

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.

                                               BERNARD CHAUS, INC.

                                               By: /s/Josephine Chaus
                                                      Title:CEO

                                               KENNETH COLE PRODUCTIONS, INC.

                                               By: /s/David Edelman
                                                   Title: CFO

                                       29THIS LICENSE AGREEMENT (the "AGREEMENT") made as of the 6th day of June,
2005 (the "EFFECTIVE DATE"), by and between KENNETH COLE PRODUCTIONS (LIC),
INC., a Bahamas corporation with offices at 90 Sommerset House, Thompson
Boulevard, P.O. Box SS-5212, Nassau, Bahamas ("LICENSOR"), and BERNARD CHAUS,
INC., a New York corporation with offices at 530 Seventh Avenue, New York, New
York 10018 ("LICENSEE").

     WHEREAS, Licensor together with its parents and their subsidiaries,
divisions and affiliates (collectively, the "LICENSOR GROUP") is the exclusive
owner of all right, title and interest in and to the world-famous trade name,
trademark and service mark as are now or as may be hereinafter designated by
Licensor as the Licensed Mark (as such term is defined in Paragraph 1.1);

     WHEREAS, Licensor and the Licensed Mark have established a distinctive
reputation for excellence with the public as a leading fashion firm
manufacturing and selling merchandise (directly and through licensees) of the
highest quality, so that the preservation of the reputation and prestige of
Licensor and the Licensed Mark are of paramount importance.

     WHEREAS, it is the desire and intention of the parties that Licensee be
permitted to use the Licensed Mark throughout the Territory (as such term is
defined below) on certain Products (as such term is defined below);

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, and other good and valuable consideration, Licensor and Licensee do
hereby respectively grant, covenant and agree as follows:

1.   GRANT OF LICENSE

     1.1 (a) Licensor hereby grants to Licensee, during the Term (as such term
is defined in Paragraph 2.1), an exclusive license in the United States (defined
to include the Continental United States, Hawaii, Alaska, and Puerto Rico) (the
"TERRITORY") to manufacture and distribute at wholesale Women's Sportswear
("PRODUCTS") bearing the mark KENNETH COLE REACTION (the "LICENSED MARK" or
"BRAND").

WOMEN'S SPORTSWEAR shall consist of the following products in knit and woven
fabrications (including denim): dresses, suits, sport jackets, blazers, jackets,
coats, blouses, overalls, shirts (including T-shirts for use as sportswear),
vests, sweaters, skirts, pants, shorts, jeans and similar approved products. All
Products under this License Agreement shall be limited for sale solely as part
of a better sportswear or better petite sportswear collection. The definition of
"Products" shall not include any other items, specifically not (1) formalwear;
(2) contemporary sportswear; (3) women's classification products, including but
not limited to classification dresses, except as offered for sale in better
sportswear collections; or (4) products to be sold as part of any other
specialty collection, including but not limited to swimwear, intimate apparel,
sleepwear, scarves and other neckwear, outerwear or activewear (including
sweatshirts, sweatpants, golf

                                        1

apparel or other athletic clothing). Licensee will be permitted to manufacture,
distribute and sell certain women's classification or non-sportswear collection
items (e.g. outerwear, activewear, etc.) with Licensor approval consistent with
items found in other better sportswear collections by similarly situated
designers. Such sales shall be restricted to those channels of distribution that
market (i.e. merchandise) such Products in sportswear collection departments and
not into (i) the relevant classification departments or (ii) specialty stores.
The introduction of large and/or maternity sizes shall be subject to Licensor's
prior approval.

          (b) The definition of Products shall be limited only to goods marketed
for sale solely in the women's better sportswear or better petite sportswear
department of approved department stores and approved specialty retailers
("APPROVED STORES"). The items within the definition of Products, which are
manufactured, distributed and sold by Licensee using the Licensed Mark pursuant
to this Agreement, shall be referred to collectively herein as "ARTICLES."
Licensor hereby grants to Licensee, during the Term, a non-exclusive license in
the Territory to use the Licensed Mark in the promotion, marketing and
advertising of the Products in connection with the rights granted herein and in
accordance with the terms of this Agreement. For the sake of clarity, the phrase
"women's better sportswear" is used as a term of art having specific meaning in
the retail apparel business to contrast with other departments in department
stores (e.g. "contemporary sportswear", "juniors' sportswear", "dresses,"
"premium denim", etc.). Licensor specifically reserves its rights with respect
to these other departments and to all other goods bearing the Licensed Mark or
bearing any other trademark except the Licensed Mark. Such Products may be
substantially similar to Articles in styling, fabrication, color and the like
and may be sold to the same customers to which Articles are sold. It is
understood and agreed, however, that Licensor shall not offer, nor grant the
rights for others to offer, for sale such Products in the women's better
sportswear departments of department stores under the Licensed Mark. In the
event "better sportswear" ceases to exist as a specific department within
certain department stores, Licensor and Licensee shall confer in good faith
regarding the department, departments and/or doors in which Licensee shall
exclusively sell the Articles in such stores.

          (c) In the event Licensor determines to grant a license to * * *
Licensor will first negotiate in good faith with Licensee with respect to such
license. Within * days of receipt of notification of Licensor's intent to
consider such opportunity, Licensee shall present Licensor with a Business Plan
(as such term is defined below) with respect to * which will include setting
forth the * * for such proposed products bearing the relevant Licensed Mark(s).
The parties shall negotiate in good faith with respect to such * * * * * *. If
the parties cannot reach an agreement within * days of receipt of such Business
Plan, Licensor may then negotiate with and enter into an agreement with a third
party regard to such agreement, provided, however,

                                        2

that * * *.

          (d) In the event Licensor determines to grant a license to use the
Licensed Mark in connection solely with the manufacture and distribution of
Articles at wholesale in * Licensor will first negotiate in good faith with
Licensee with respect to such license. Within * days of receipt of notification
of Licensor's intent to consider such opportunity, Licensee shall present
Licensor with a Business Plan (as such term is defined below) with respect to
such license which will include setting forth the * for the Articles. The
parties shall negotiate in good faith with respect to * * *.

          If the parties cannot reach an agreement within * * * days, Licensor
may then negotiate with and enter into an agreement with a third party regard to
such agreement, provided, however, that during the initial Term (as defined
below), * * *.

          (e) It is expected that the Articles will not typically be sold in the
same doors where Products bearing the "*" trademark are sold. In the doors
where the two lines overlap, * * * *.

     1.2 All Articles shall bear a Licensed Mark and, except as explicitly
provided hereunder, no Articles shall be sold or otherwise distributed by
Licensee under any mark other than a Licensed Mark. Licensee shall not use the
Licensed Mark together with any other trademarks or name of any other products
(other than Ancillary Branding, as defined in this Paragraph 1.2). Licensor
reserves all rights to the Licensed Mark and Ancillary Branding, except as
specifically granted herein to Licensee. Licensor may make such changes as
Licensor deems necessary to the Licensed Mark, including without limitation, to
the use, style or appearance of the Licensed Mark (for example, REACTION KENNETH
COLE). Additionally, Licensor may, from time to time, provide to Licensee for
use in connection with the marketing, promotion, sale and distribution of
Articles, logotypes, designs or other materials for use on or with the Articles,
including such materials or taglines that may be used separately from the
Licensed Mark in labeling, hang tags, displays and similar promotional materials
(collectively, "ANCILLARY BRANDING"). Licensor and Licensee shall work together
in the design and selection of Ancillary Branding, provided, however, that
Licensor shall have ultimate approval rights over such Ancillary Branding.
Licensor shall notify Licensee if it elects to change the form of a Licensed
Mark or adopts or revises Ancillary Branding and Licensee shall effect the
change as promptly as commercially practicable thereafter and, in any event, no
later than for the next seasonal collection after the seasonal collection then
in production. If, after the change has been effected, Licensee has an inventory
of Articles bearing the previous form of such Licensed Mark or Ancillary
Branding, Licensee may sell

                                        3

off such Articles in the ordinary course pursuant to this Agreement. Also, if,
after the change has been effected, Licensee has an inventory of business
documents bearing the previous form of the Licensed Mark or Ancillary Branding,
Licensee may use them up in the ordinary course unless otherwise notified by
Licensor.

     1.3 Licensee shall not sell Articles to any customer unless such customer
has been pre-approved by Licensor pursuant to the provisions of Section 5. Upon
execution of this Agreement, Licensee shall provide Licensor a list of proposed
customers organized by brand for pre-approval. During the Term, Licensee may
submit additional customers and Licensor may approve such additional customers
in its sole discretion pursuant to the provisions of Paragraph 4.5 below.

     1.4 Licensee acknowledges that the rights granted hereunder do not include
the right to operate a retail or outlet store under any Licensed Mark or any
variation or simulation thereof; nor may Licensee, its parents or any of their
subsidiaries, affiliates or principals (collectively, the "LICENSEE GROUP") sell
Articles at retail.

     1.5 Licensee shall use commercially reasonable efforts to exploit the
rights herein granted throughout the Territory and, subject to the terms of this
Agreement, to sell Articles consistent with the high standards and prestige
represented by the Licensed Mark.

     1.6 (a) The license granted hereunder shall expressly exclude (i) mail
order catalogs and other direct mail materials ("DIRECT MAIL"), (ii) Web sites
or otherwise through the World Wide Web, Internet, or other global computer
information network (together, the "INTERNET"), (iii) any electronic sales
vehicles (such as television marketing or interactive television), (iv) retail
stores and outlet stores operating under the Licensed Mark (or other marks owned
or controlled by Licensor) located within and without the Territory, (v)
uniforms, (vi) bases and exchanges of the Armed Forces of any country, (vii)
premium and corporate promotional or corporate gift programs and (viii)
duty-free channels (including DFS) (collectively, the "RESERVED CHANNELS").

          (b) Licensee shall not, nor shall it authorize any of its customers to
(i) offer Articles for sale through the Reserved Channels or (ii) advertise,
market, promote, publicize or otherwise exploit Articles or any Licensed Mark or
otherwise use any Licensed Mark through the Reserved Channels or together with
any other trademarks or name or any other products. From time to time, Licensee
may propose specific opportunities to exploit such channels on a non-exclusive
basis. Licensor may approve or disapprove such proposals in its sole discretion.
Licensor may subsequently withdraw its approval of such proposal, and Licensee
shall use its best efforts to remove the Articles from such vehicle.

          (c) Licensee acknowledges that Licensor Group may market and sell
Products bearing the Licensed Mark not originating from Licensee to consumers in
the Territory through the Reserved Channels and such sales shall not be deemed a
breach of Licensee's exclusivity rights hereunder. Further, Licensee
acknowledges that Licensor

                                        4

Group may, directly or through another licensee, purchase Products bearing the
Licensed Mark from third party contractors for sale (i) outside the Territory or
(ii) inside the Territory through the Reserved Channels. To the extent
commercially practicable, Licensor will endeavor to purchase such Products from
Licensee. To the extent that Licensor Group seeks to purchase and Licensee
agrees to sell Articles to Licensor or its affiliates for resale in the Reserved
Channels, the price for such Articles shall be mutually agreed upon and
Paragraph 19.1(a) below shall apply only in the event Licensor is placing the
purchase order for such Articles at the time Licensee's other customers are
placing orders.

     1.7 (a) In no event shall Licensee sell Articles or cause Articles to be
sold: (i) to customers for sale outside the Territory; (ii) through the Reserved
Channels (except as provided in Paragraph 1.6(b)); or (iii) to a customer if
Licensee has reason to believe that such customer may sell Articles to customers
located outside the Territory or that such customer may divert Articles,
including by reason of a previous history of diversion of Articles, of other
Products or of any other products, or if Licensor provides notice to Licensee
that it has reason to believe such customer may divert Articles. (To "divert"
means to resell or otherwise transfer goods from approved distribution doors
other than to consumers.)

          (b) Licensor and Licensee acknowledge and agree that it is in their
mutual interests to take reasonable and appropriate steps to prevent diversion
of Products bearing the Licensed Marks, and shall cooperate to establish coding,
marking or other, similar standards for Articles, consistent with industry
practices, in order to monitor and trace the source of any diversion activities.
Licensee shall cooperate reasonably with Licensor and its affiliates in the
implementation of their anti-diversion and anti-counterfeiting measures,
contributing to enforcement efforts on a pro rata basis. Licensor shall attempt
in good faith to minimize enforcement costs consistent with the levels of
diverted and/or counterfeit products bearing the Licensed Marks actually
detected in the Territory, and whenever possible, Licensor will provide
reasonable notice and request Licensee approval, not to be unreasonably
withheld, before incurring costs pursuant to this Paragraph 1.7(b). Any amounts
recovered by the parties in connection with an enforcement action provided for
in this Paragraph 1.7(b) shall be applied in accordance with Paragraph 11.5
below. Licensor covenants and agrees that it shall require its other licensees
to take steps to prevent diversion of Products bearing the Licensed Mark,
including by way of example and not limitation, diversion of Products into the
Territory that are meant for sale outside the Territory, consistent with the
obligations upon Licensee hereunder.

     1.8 (a) Nothing herein shall be deemed to prevent the Licensor Group or any
of its other licensees or third party contractors from manufacturing Products
bearing the Licensed Mark in the Territory for distribution outside the
Territory or otherwise in keeping with the terms herein, provided that such use
is consistent with Licensor's obligations under Paragraph 1.7(b).

                                        5

          (b) Licensee acknowledges that nothing herein grants Licensee any
rights, including without limitation, the right of first refusal, to use any
Licensed Mark outside the Territory other than * as set forth in Paragraph 1.1
(d) and the Licensor Group may, on its own or through agreements with other
licensees or third parties, use any Licensed Mark for any purpose, including in
connection with the manufacture, distribution and sale of Products, outside the
Territory, provided that such use is consistent with Licensor's obligations
under Paragraph 1.7(b). Upon request by Licensor, Licensee shall cooperate with
the Licensor Group (or such licensee or third party as it may designate) in
connection therewith and, specifically, shall provide the Licensor Group for
itself or on behalf of its licensee (but only in instances where such licensee
is restricted by law from importing Licensee's Articles into its territory) or
designated third party, without charge, with such design and styling
information, including technical manufacturing specifications, as may be
necessary or appropriate to enable the production of Products consistent with
Articles produced by Licensee, provided that such use is consistent with
Licensor's obligations under Paragraph 1.7(b). In connection therewith or when
otherwise requested by Licensor, Licensee shall provide the Licensor Group for
itself or on behalf of its licensee (but only in instances where such licensee
is restricted by law from importing Licensee's Articles into its territory) or
designated third party with disk copies of the graded patterns and markers for
the Articles which any such affiliate or third party desires to include in its
collections and copies of such other materials as may be necessary for the
production of those Products. With respect solely to these items, Licensee's
cost thereof shall be reimbursed to Licensee. In the event Licensor requests
that Licensee include in its collection Products designed by a third party
licensee of Licensor, Licensor shall provide Licensee with any available disk
copies of the graded patterns and markers for such Products and copies of such
other materials as may be available for the production of those Products.

     1.9 Licensee acknowledges that the Licensor Group and/or its licensees may
purchase Articles bearing the Licensed Mark from Licensee or Products bearing
the Licensed Mark from third parties for use as promotional items in conjunction
with the sale or marketing inside and/or outside the Territory of items not
constituting Articles (e.g. "gift with purchase").

2.   TERM

     2.1 The term of this Agreement shall commence on the Effective Date and,
unless otherwise terminated as provided herein, shall continue through December
31, 2010 (the "TERM"). The period commencing on the Effective Date and ending on
December 31, 2006 and each twelve (12) month calendar year commencing on each
January 1st thereafter during the Term shall constitute and shall be referred to
herein as an "ANNUAL PERIOD."

     2.2 (a) Provided that Net Sales (as such term is defined in Paragraph
8.1(c) below) in the * Annual Period are at least the greater of: (i) * * or
(ii) * of the Guaranteed Minimum Net Sales (as such term is defined in Section 7
below) in the * Annual Period, and

                                        6

provided further, that Licensee is not in default beyond the expiration of any
applicable grace or cure period of the terms, covenants and conditions of this
Agreement, Licensee shall have the option to extend the Term for an additional
period of three (3) years commencing January 1, 2011 and terminating December
31, 2013 (the "RENEWAL OPTION"). Licensee may exercise the Renewal Option by
giving written notice that shall be received by Licensor no later than March 1,
2010. Time is of the essence with regard to the provisions of this Paragraph
2.2. In all other respects, all of the terms, covenants and provisions of this
Agreement shall remain in full force and effect during the periods covered by
the Renewal Option.

          (b) The effectiveness of any exercise of the Renewal Option is
expressly contingent upon Licensee achieving * * * * * * (as set forth below)
and not otherwise being in material default beyond the expiration of any
applicable grace or cure period of the terms, covenants and conditions of this
Agreement at the end of the fifth Annual Period of this Agreement.

          (c) Absent an agreement by and between the parties, Licensee shall
have no right to renew this Agreement beyond December 31, 2013.

3    DESIGN PROCESS

     3.1 (a) During each Annual Period, and subject to the Approval procedures
set forth in Section 5, Licensee shall manufacture, distribute and sell at least
four collections of Articles with additional designs to be injected in the line
during the season as required by market conditions upon Licensor's request.

          (b) No later than September 15th of an Annual Period or at such other
time (s) as the parties may mutually agree, Licensee shall submit to Licensor a
merchandising plan (the "MERCHANDISING PLAN") covering the subsequent two
seasons, the form of which will be provided by Licensor. Each Merchandising Plan
shall cover all Product classifications by style, by color, by volume, by
calendar rollout, by distribution door level (i.e. "A", "B" and "C" doors) and
such other information as Licensor may reasonably request. Licensee shall work
with Licensor in developing a buying matrix from the Merchandising Plan.

          (c) No later than September 15th of each Annual Period during the
Term, Licensee shall prepare and submit to Licensor a two-year business plan
(the "BUSINESS PLAN"), the form of which is attached hereto and made a part
hereof as "EXHIBIT 2" as such form may be amended by Licensor from time to time
and provided to Licensee. Each Business Plan shall cover the upcoming two Annual
Periods (including, as applicable, Annual Periods within the Renewal Option or
"potential" Annual Periods after the end of the then Term, even if this
Agreement has no renewal) and shall include any other information that Licensor
may reasonably request.

                                        7

          (d) No later than September 15th of each Annual Period during the
Term, the parties shall jointly develop an annual marketing, advertising and
promotion plan (the "MARKETING PLAN") covering the upcoming Annual Period. The
Marketing Plan shall include all expenditures by medium and any other
information that Licensor may reasonably request, all by Licensed Mark and by
jurisdiction. Licensee shall also submit to Licensor by the end of February and
July of each Annual Period, a complete copy of its marketing, advertising and
promotional expenditures for the preceding six (6) months along with copies of
supporting documentation for the foregoing, such as invoices and tear sheets.

     Licensee shall submit the Merchandising Plan, Marketing Plan and Business
Plan for the initial Annual Period promptly following execution of this
Agreement. No Merchandising Plan, Business Plan or Marketing Plan shall be
implemented without Licensor's prior written approval, pursuant to the Approval
provisions set forth in Section 5. Licensee shall at any time as requested by
Licensor promptly: (i) update any Merchandising Plan or Business Plan and (ii)
provide assistance in the update of any Marketing Plan.

          (e) Licensee shall appoint and maintain at all times during the Term,
a divisional president and at least one vice president dedicated to the Articles
and to Licensee's operations pursuant to this Agreement. Said personnel shall
operate in conjunction with Licensor to facilitate the design, production,
advertising and distribution of Articles. At all times the staffing must be
sufficient to support the business properly and to endeavor to maximize sales by
Brand. All personnel required pursuant to this Paragraph 3.1(e) shall be
employees of Licensee but shall be subject to Licensor's approval prior to
appointment and at all times thereafter during the Term. In the event Licensor
shall revoke or withdraw said approval at any time during the term hereof,
Licensor and Licensee shall consult regarding the designation of a replacement
to perform such functions, subject to the provisions of this Paragraph 3.1(e).

     3.2 Prior to each collection, Licensee shall submit to Licensor materials,
designs, sketches, colors, samples, and ideas for use in connection with
Articles for approval pursuant to the terms of Section 5. Any and all such items
shall be approved by Licensor in writing using the approval form attached hereto
as "EXHIBIT 2", which form may be amended from time to time (the "APPROVAL
FORM"). Licensee shall receive any such approval by Licensor prior to the use of
any of such items.

     3.3 Licensor may, in its sole discretion, prepare and deliver to Licensee
sketches and ideas for Articles. In connection with such design direction,
Licensor may, in its sole discretion, purchase design samples. Licensee shall
reimburse Licensor for any such design samples purchased by Licensor and
provided to Licensee, provided such purchases shall * * * in any Annual Period
without Licensee's prior written approval. All designs created or approved by
Licensor shall be and remain Licensor's sole and exclusive property. Licensee
shall use all sketches and other materials provided by or approved by Licensor
solely in connection with the manufacture, distribution and sale of Articles
pursuant to this Agreement.

                                        8

Licensor may use and permit others to use any such sketches and other material,
provided that such use does not conflict with any rights granted to Licensee
hereunder.

     3.4 Licensee shall be responsible for the production of all samples as well
as for the production of Articles and Licensee shall bear all costs in
connection therewith.

     3.5 Licensor hereby acknowledges that Licensee is a party to other
licensing arrangements with other parties for the manufacture and distribution
of products with labels and trademarks other than the Licensed Mark.
Consequently:

          (a) As of the date hereof, Licensee has provided Licensor with a
complete list of all such trademarks and existing businesses, including the
names of all such parties and a complete description of the product lines
thereunder, such list being attached hereto as EXHIBIT 3.

          (b) During the Term, in the event the Licensee Group intends to enter
into any other * * * ("PROPOSED TRANSACTION") * * * * * * Licensee shall
promptly notify Licensor in writing of such arrangement (the "TRANSACTION
NOTIFICATION") to the extent such notice is permitted by law, it being
understood that Licensor may be required to enter into a confidentiality
agreement with respect to such notice. Such notice shall include the * * *. In
the event that the Proposed Transaction is for: * * * * * Licensee and Licensor
agree to * * *. Goods shall be deemed * for purposes of (a), (b) and (c) above
if they * * * * *. In the event the parties do not reach agreement and Licensee
Group nevertheless proceeds with the * * Licensor may, in its sole discretion,
elect to * *.

     3.6 The parties acknowledge and agree that the Licensor Group (or any of
them) is and will be in the future a party to other licensing arrangements with
other parties for the manufacture and distribution of merchandise other than the
Products under the Licensed Mark. Consequently, Licensee shall, to the fullest
extent possible, avoid any conflicts between or among the definitions of any
apparel, accessories or other articles licensed by Licensor under such third
party agreements, including the Products

                                        9

hereunder. In the event of a conflict between or among the definitions of
apparel or accessories licensed under such third party Licensor agreements, and
the Products hereunder, Licensor reserves the right to resolve any such
conflict, taking into account the natural channels of distribution of the
Articles and other apparel, and the protection of the Licensed Mark. Licensor's
decision in resolving such conflicts shall be made in good faith and shall be
final and binding. In the event Licensee, directly or indirectly, engages in any
conduct that infringes on the legal rights of parties licensed under
arrangements with the Licensor Group for products manufactured or sold under the
Licensed Mark, whether in the Territory or other jurisdictions, Licensee shall
cease such activity upon written notice of Licensor.

4.   MANUFACTURE OF ARTICLES: QUALITY CONTROL

     4.1 Licensee acknowledges that Licensor has established a reputation for
excellence with the public as a leading fashion firm manufacturing and selling
merchandise (directly and through licensees) of high quality. Consequently, the
preservation of the reputation and prestige of Licensor and the Licensed Mark is
of paramount importance. Accordingly, Articles shall be of a standard of quality
consistent with approved Product prototypes as provided under Section 5 and
shall be distributed and sold with packaging and sales promotion materials
appropriate for such Products.

     4.2 The styles, designs, packaging, contents, workmanship and quality of
all Articles shall be approved by Licensor in writing, using the Approval Form
and pursuant to the provisions of Section 5, prior to the distribution or sale
thereof. Licensor may take all actions which it deems necessary, in Licensor's
sole discretion, to ensure that Articles sold hereunder are consistent with the
reputation and prestige of the Licensed Mark. It is expressly agreed and
acknowledged by the parties hereto that Licensee shall promptly produce
reasonable quantities of samples of specific Articles, groups of Articles or
styles of Articles as requested by Licensor. Thereafter, if approved by Licensor
in accordance with the provisions of Section 5, Licensee shall offer such
Articles for sale as part of Licensee's product assortment.

     4.3 Prior to the offer for sale of a particular Article, Licensee shall
deliver to Licensor for its approval pursuant to the provisions of Section 5,
free of charge, one sample of each such Article together with the tags, labels
and packaging to be used in connection therewith (the "ARTICLE MATERIALS").
Prior to distribution of each Article, Licensee shall deliver to Licensor for
its approval, free of charge, one production sample of each such Article
together with the Article Materials. After sale or distribution of an Article
has commenced, Licensee shall, upon the request of Licensor, submit to Licensor
then current production samples of each Article together with the Article
Materials so that Licensor may be assured of the maintenance of the required
quality standards. After any sample is approved, Licensee shall not deviate
therefrom without the prior written approval of Licensor. Licensee shall also
submit to Licensor samples of each Article for any reasonable business purpose
upon Licensor's request therefor free of charge. Articles sold hereunder shall
be consistent in quality with the approved samples. Licensor and its
representatives, upon reasonable advance notice and scheduled so as not

                                       10

to unduly disrupt Licensee's manufacturing operations, may examine Articles in
the process of being manufactured and inspect all facilities utilized in
connection therewith.

     4.4 (a) Licensee shall manufacture (or cause to be manufactured), sell,
label, package, distribute and advertise Articles in accordance with all
applicable laws and regulations, provided, however, that in the event Licensee
violates this provision, Licensee shall have the opportunity to cure such
violation in accordance with Paragraph 13.1. Licensee shall use and display the
Licensed Mark only in such form and manner as are approved by Licensor, pursuant
to the provisions of Section 5.

          (b) Licensee shall provide Licensor, at Licensor's reasonable request,
a complete list of facilities manufacturing Articles or components thereof
bearing the Licensed Mark (including names, addresses and contact information).

          (c) Licensee shall cause to appear on all Articles and Ancillary
Branding, all advertising, promotional and publicity material used in connection
therewith, and any printed matter on which the Licensed Mark appears, such
legends, markings and notices as Licensor may request in writing. Subject to the
provisions of Paragraph 1.2, no such printed matter shall include any other
name, mark or designation other than the Licensed Mark, except as required by
applicable laws or regulations. Before using or releasing any such material,
Licensee shall submit to Licensor, for its written approval pursuant to the
provisions of Section 5, proposed advertising, promotional and publicity copy,
finished artwork for tags, labels, packaging, point-of-sale materials and the
like and all printed matter on which the Licensed Mark appears. After any
sample, copy, artwork or other material is approved, Licensee shall not deviate
therefrom without the prior written approval of Licensor, provided, however,
that in the event Licensee breaches the foregoing, Licensee shall have the
opportunity to cure such breach in accordance with Paragraph 13.1. If Licensor
shall disapprove of any sample Article, any sample tag, label, packaging or the
like, or any advertising, promotional or publicity material or any other printed
matter, Licensee shall promptly cease and desist from any use thereof.

     4.5 (a) In order to maintain the reputation, image and prestige of Licensor
and the Licensed Mark, Licensee's distribution patterns shall consist solely of
such high-end department stores and specialty retailers whose location,
merchandising and overall operations are consistent with the quality of the
Articles and the reputation, image and prestige of the Licensed Mark. Licensee
shall only sell Products to such department stores and specialty retailers
approved in advance by Licensor in writing ("APPROVED STORES") using the
approval form attached hereto as "EXHIBIT 4" (which form may be amended from
time to time and provided by Licensor to Licensee) and pursuant to the
provisions of Section 5. Additionally, Licensee shall only sell Products from
the current seasonal collections to Approved Stores, except for Products from
the immediately preceding season, which are being sold off to Approved Stores in
the ordinary course. Licensee shall submit to Licensor the amount of Products
Licensee wishes to distribute to an Approved Store, categorized by Brand for
Licensor's prior written approval pursuant to the provisions of Section 5. Once
such approval is given, Licensor subsequently may,

                                       11

by written notice to Licensee, withdraw its approval of an Approved Store, an
individual door (i.e., a single branch of a multiple-unit retailer) of an
otherwise Approved Store or the amount sold to such Approved Store or door, for
any business reason, including but not limited to: (i) diversion of Articles or
other goods; (ii) advertising, marketing, promotion, offering for sale or sale
of Articles in a manner that would be a breach of or default under this
Agreement if done by Licensee; (iii) failing to continue to meet Licensor's
standards, including by reason of the manner in which such customer
merchandises, offers for sale or sells Articles; (iv) sale of Articles or other
goods not purchased from authorized sources; (v) being incompatible with the
image of the Articles or the Licensed Mark; or (vi) failing to sell a reasonable
cross-section of in-season Articles and/or other goods bearing the Licensed Mark
purchased from authorized sources. In instances in which Licensor withdraws
approval for a retailer or door pursuant to (iii), (v) or (vi) above or for a
similar reason not associated with wrongful conduct, Licensee may fulfill
existing orders for the then-current season for such retailer or door. Licensee
acknowledges that retailers approved for a particular Brand may not necessarily
be approved for another Brand.

          (b) Licensor may at any time and in its sole discretion designate an
Approved Store to which Licensee is selling Products in accordance with 4.5(a)
as an "* * *" Sales to * * * are subject to the * * * * * * In the event,
Licensee wishes to sell Closeouts, Licensee shall submit to Licensor for prior
approval pursuant to the provisions of Section 5 a schedule of * * *.

          (c) In addition, Licensee undertakes to monitor and supervise the
merchandising and display of the Articles to be sold at retail so that the
Licensed Mark wherever used is properly and correctly displayed and the Articles
are in fact shown and sold as quality and prestige merchandise consistent with
the worldwide reputation and prestige of the Licensed Mark. In the event
Licensor should find any fact inconsistent with the foregoing, then Licensor
shall notify Licensee thereof and Licensee shall supervise the retail location
concerned in rectifying such inconsistency. Should such retail location fail to
rectify the same within a reasonable time period, then Licensee shall cease to
supply the Articles to said retail location.

          (d) Licensee shall provide Licensor, within five business (5) days
after the end of each month during the Term, with a complete and itemized list
of all orders booked during the preceding month broken out by Brand, by customer
and by retail door (if and when such information is available by retail door).

          (e) Licensee shall provide Licensor with a complete wholesale customer
list on a quarterly basis (including names, addresses and such other information
as Licensor may reasonably request).

                                       12

     4.6 In an endeavor to ensure the highest level of customer service to all
consumers, and only in the event Licensor shall so request, Licensee shall place
the number "1-800-KEN-COLE" (collectively the "CONSUMER PHONE") or any other
phone designation as well as and any domain name that Licensor shall designate
for the Brand (e.g. www.kennethcole.com) (collectively the "WEB SITES") on all
Article Materials and other printed matter that are used in conjunction with the
Articles at retail. Licensor shall administer, coordinate and pay for all
expenses related to said Consumer Phone and Web Sites; provided, however, in the
event consumer complaints relating to the Articles shall constitute a materially
disproportionate share of such consumer complaints, Licensor reserves the right
to charge Licensee for its pro rata share of costs associated with said Consumer
Phone and Web Sites. Licensee shall cooperate with Licensor to satisfy all
reasonable consumer demands as may be deemed appropriate by Licensor for: (a)
replacement goods or merchandise credits; and (b) inquiries related to the
availability of Articles or other information reasonably required to service the
consumers. The provisions of this Paragraph 4.6 shall survive the termination or
expiration of this Agreement for a period of one (1) year subsequent to said
termination or expiration.

     4.7 In the event that Licensee determines to construct any concept shops or
shop-in-shops, they shall be built in accordance with concepts of design,
architectural planning, construction materials, layout, decor and other aspects
of decoration as provided in writing by Licensor and shall be subject to
Licensor's prior written approval pursuant to the provisions of Section 5. All
expenses in connection with the design, development or construction of any such
shops shall be borne by Licensee at its sole cost and expense.

     4.8 The styles, designs, appearance, components, images, materials,
manufacturing facilities and sources, workmanship and quality of all product
fixtures for the sale and marketing of Articles shall be approved by Licensor in
writing prior to the manufacture, distribution or sale thereof. From time to
time and at any time during this Agreement, Licensor may provide written
specifications for the fixtures, which must be strictly followed by Licensee.
Fixtures bearing the Licensed Mark or other proprietary image or design of
Licensor not approved by Licensor may not be used, sold or disposed of in any
way without Licensor's prior written approval pursuant to the provisions of
Section 5. All expenses in connection with the design, development or
construction of any such fixtures shall be borne or reimbursed by Licensee at
its sole cost and expense.

                                       13

5.   APPROVALS

     5.1 Licensor's approvals pursuant to this Agreement, except as otherwise
expressly provided, may be based solely on Licensor's subjective standards and
may be withheld in Licensor's sole and absolute discretion. Licensor shall use
commercially reasonable efforts to respond to requests for approval as soon as
possible and in any event within seven (7) business days except as otherwise
specifically provided herein. Any item not either approved or unapproved in
writing within seven (7) days shall be deemed unapproved, provided, however,
that upon request Licensor must then provide reasons for such disapproval within
three (3) business days.

     5.2 Licensor's approval of any designs, materials, printed matter, samples
or any and all things related thereto or contemplated under this Agreement, for
use in connection with any particular collection of Articles shall constitute
approval for such use only in connection with the then-current seasonal
collection by Brand and shall not constitute approval of the use of any such
materials in connection with any other collection of Articles.

     5.3 Any failure by Licensee to obtain Licensor's approval in accordance
with this Agreement, or the use by Licensee of any designs, materials, sources,
printed matter, samples or any and all things related thereto or contemplated
under this Agreement, in absence of Licensor's prior written approval, shall be
deemed to be a material default of this Agreement and shall be subject to the
rights and remedies of Licensor as provided herein.

6.   ADVERTISING; SHOWROOM

     6.1 (a) The Licensor Group shall promote, market and advertise the Licensed
Mark and shall administer the budget for such advertising, marketing and
promotion. As a contribution to said advertising, marketing and promotion,
Licensee shall pay to Licensor Group a fee (the "ADVERTISING FEE") for each
Annual Period in an amount equal to * * *: (i) the actual * for such Annual
Period; and (ii) the * * *, as such term is defined below, for such Annual
Period. During each Annual Period, Licensee shall pay the Advertising Fee to
Licensor Group in equal installments at the same time installments of Guaranteed
Minimum Royalty, as such term is defined in Paragraph 7.1 below, for such Annual
Period are payable hereunder. Each such installment shall total, at a minimum, *
* * of the total minimum Advertising Fee based upon *, despite prior payments in
any given Annual Period. Any additional Advertising Fee payable to Licensor
Group, or any refund of Advertising Fee payable to Licensee, for an Annual
Period shall be accounted for and paid in the same manner and at the same time
that Sales Royalty, as such term is defined below, is to be accounted for and
paid hereunder.

          (b) The Licensor Group shall use a portion of the Advertising Fee for
institutional advertising of the Licensed Mark, as it so determines, which may
include the

                                       14

cost of catalog advertising, Licensor's Websites and other electronic media and
which may or may not include the Articles. In the event such advertising
includes the Articles, Licensee shall cooperate with the Licensor Group in
connection with such advertising and, if requested by Licensor, shall produce
and deliver samples of Articles to Licensor for use in connection therewith at
no cost to Licensor.

     6.2 (a) During the Term, Licensee shall maintain at Licensee's expense, a
separate showroom for each Brand exclusively for the display of Articles. Said
showrooms shall be located in the borough of Manhattan and shall be located,
designed, decorated, staffed, maintained and re-modeled, if deemed necessary in
Licensor's reasonable judgment, in a manner commensurate with the reputation and
prestige of the Licensed Mark and shall be subject to the prior written approval
of Licensor. In connection therewith, Licensee shall also maintain separate
telephone numbers and listings under the name "KENNETH COLE REACTION LADIES
SPORTSWEAR." Licensee may also maintain a showroom presence in the Licensor
Group's corporate showroom for the display of Articles. Any such display shall
be built by the Licensor Group, provided, however, all costs associated with the
building of such display, shall be at Licensee's sole cost and expense, in an
amount * * * per square foot. In addition, Licensee shall pay * * * associated
with the display ("DISPLAY SERVICES FEE"). Said Display Services Fee shall * * *
per square foot per annum. The Display Services Fee shall commence on the day
Licensee takes possession of any such premises. Licensee and the Licensor Group
shall enter into a separate agreement setting forth the particulars prior to any
such possession by Licensee.

          (b) Under no circumstances shall the Licensed Mark be used in
combination with any other marks or products used by Licensee in conjunction
with the telephone listings or showroom detailed in Paragraph 6.2(a) above.
Licensee must submit representative copies of printed matter used by Licensee in
the course of its business that contain the Licensed Mark, including but not
limited to, stationery, letterheads, envelopes, invoices and business cards to
Licensor for prior written approval pursuant to the provisions of Section 5.

          (c) When Licensee participates in trade shows, separate areas shall be
maintained exclusively for the display of Articles under each Brand, subject to
Licensor's prior approval. At Licensor's request, Licensee shall also
participate and cooperate in trade shows in which the Licensor Group
participates, and pay its pro rata share of any expenses incurred by the
Licensor Group in connection therewith. Such pro rata share shall be paid within
twenty (20) days from the presentment of an invoice therefor.

          (d) For each Annual Period, Licensee shall pay toward the expenses
incurred by the Licensor Group in connection with any Licensor Group fashion or
"runway" shows ("FASHION SHOW FEE"). For each Annual Period, the Fashion Show
Fee shall be * * *. Amounts due under this Paragraph shall be paid within twenty
(20) business days from the presentment of an invoice therefor. In the event
Licensor Group decides to produce a fashion or "runway" show exclusively for the

                                       15

Licensed Mark, the Fashion Show Fee shall be the costs incurred by the Licensor
Group in connection with such fashion or "runway" show divided by the licensee
participants. In the event Licensor does not have a fashion or "runway" show in
an Annual Period, Licensor shall allocate the Fashion Show Fee to an alternate
brand building marketing event.

          (e) At Licensor's request and with Licensee's prior approval, Licensee
Group shall participate in charitable donations and similar endeavors together
with the Licensor Group, provided Licensee Group's donations shall * * * per
Annual Period. Where donations are made on a joint basis, Licensor will inform
the relevant charity of the extent of Licensee Group's participation and where
donations result in public recognition, seats at charitable dinners or similar
benefits, Licensor shall attempt to ensure that Licensee Group participates in
such benefits in proportion to the level of Licensee Group's contribution.

     6.3 (a) In addition to the Advertising Fee and the Campaign Fee (as set
forth below), Licensee shall spend in each Annual Period the amounts necessary
or appropriate to promote, advertise and market the Articles to maximize sales
of Articles consistent with the approved Marketing Plan and reflecting the image
and prestige of the Articles and the Licensed Mark. Upon Licensor's request
therefore, Licensee shall submit to Licensor documentary evidence in a form
reasonably satisfactory to Licensor that substantiates all such expenditures.

          (b) In the event Licensee requests Licensor Group to furnish
advertising and/or marketing services to assist Licensee's advertising and
marketing efforts relating specifically to the Articles and Licensor Group
agrees to provide such services, Licensee shall reimburse Licensor for * * * * *
*, as well as an agency fee of * * * * or the then-prevailing market rate for
providing such services. In advance of performing services or incurring expenses
under this Paragraph 6.3(b), Licensor shall submit an estimate of the
anticipated services and reimbursable costs and expenses (which estimate shall
reflect a contingency of * for such reasonable additional expenses as may be
incurred in the course of performing such services).

          (c) All amounts due to the Licensor Group under this Paragraph 6.3
shall be payable by Licensee within twenty (20) days from the presentment of an
invoice therefor.

     6.4 In addition to the Advertising Fee and Licensee's obligations with
respect to Paragraph 6.3, commencing in the Third Annual Period, for each Annual
Period, Licensee shall pay to Licensor not less than * * *: (i) the actual * for
such Annual Period; or (ii) the * * * * for such Annual Period (the "CAMPAIGN
FEE"). The Campaign Fee shall be spent on product-specific advertising in the
Licensor Group's national advertising campaign that includes Licensee's Articles
(i.e. the Articles must appear in the image in

                                       16

question). Upon the reasonable request of Licensee, Licensor shall provide
Licensee with supporting documentation for expenditures made in connection with
the foregoing. Payments relating to the Campaign Fee are to be made at the same
time installments of the Guaranteed Minimum Royalty are payable hereunder. Under
no circumstances shall the minimum Campaign Fee be refundable. In each Annual
Period, Licensor shall provide Licensee with two (2) product specific collateral
images delivered in an electronic file format at no additional charge (the costs
for such collateral images being credited from the Campaign Fee collected
hereunder).

     6.5 In addition to the Advertising Fee, Licensee shall expend the following
amounts to support the initial launch of the Products: a total of Four Million
Dollars ($4,000,000) in the first two Annual Periods (the "LAUNCH FEE"), such
amounts to be spent in accordance with a launch plan (which may include national
print advertising, outdoor advertising, television or radio advertising or
similar prestige image advertising but not co-op advertising, fixtures or point
of sale materials) proposed by Licensor and approved by Licensee in its sole
discretion prior to any expenditure.

     6.6 Licensee shall not be required to pay the Advertising Fee and Campaign
Fee for * up to and including * of Licensee's Net Sales in any Annual Period.
Licensee shall pay the Advertising Fee and Campaign fee on such sales in excess
of * of Net Sales.

     6.7 In the event Licensee wishes to generate its own press releases or
publicity of any kind including, but not limited to, interviews, relating to any
or all of the Licensed Mark or the Articles, such releases or publicity shall be
submitted to Licensor for Licensor's prior written approval. Licensee shall
promptly submit to Licensor any and all news releases, advertising, publicity or
promotional materials from any and all media and in any and all forms in which
the Licensed Mark or the Articles appear as soon as such items are made
available to Licensee. In all instances, Licensee shall fully cooperate with
Licensor's duly authorized public relations representative. Notwithstanding the
foregoing, the prohibitions of this Paragraph 6.5 shall be waived with respect
to any or all of Licensee's publications or materials which are required by any
law, statute, regulation or rule required of any publicly-held company.

     6.8 At any time upon reasonable notice, Licensor may change or direct that
procedures (but not the minimum amounts expended) be changed regarding the
advertising, marketing, publicity and promotion of the Articles pursuant to this
Article.

7.   GUARANTEED MINIMUM ROYALTY AND GUARANTEED MINIMUM NET SALES

     7.1 Licensee shall attain Guaranteed Minimum Net Sales by Brand in each
Annual Period as set forth below. In each Annual Period, the Guaranteed Minimum
Net Sales by Brand for such Annual Period shall be the greater of: (i) the
relevant Guaranteed Minimum Net Sales Thresholds for such Annual Period as set
forth below; or (ii) * of the actual Net Sales by Brand for the previous Annual

                                       17

Period, in which event, the relevant Guaranteed Minimum Net Sales Threshold for
such Annual Period, as set forth below, shall be increased to reflect such
amount. The Guaranteed Minimum Royalty for each Annual Period will be set based
on the application of the rates set forth in Paragraph 8.1 below to the
Guaranteed Minimum Net Sales Thresholds as adjusted.

                    KENNETH COLE
                      REACTION
                GUARANTEED MINIMUM
ANNUAL PERIOD   NET SALES THRESHOLD
-----------------------------------
  1   2006               $*
-----------------------------------
  2   2007               $*
-----------------------------------
  3   2008               $*
-----------------------------------
  4   2009               $*
-----------------------------------
  5   2010               $*
-----------------------------------

     7.2 In the event Licensee shall properly exercises its option to extend the
Term in accordance with Paragraph 2.2 hereinabove, and such option does not
subsequently expire for failure to satisfy any condition in this Agreement, then
the Guaranteed Minimum Net Sales in the Renewal Term shall be as set forth
below.

                      KENNETH COLE
                        REACTION
                  GUARANTEED MINIMUM
ANNUAL PERIOD     NET SALES THRESHOLD
--------------------------------------
  6   2011      * OF NET SALES IN 2010
--------------------------------------
  7   2012      * OF NET SALES IN 2011
--------------------------------------
  8   2013      * OF NET SALES IN 2012
--------------------------------------

     7.3 In each Annual Period, the Guaranteed Minimum Royalty (as well as the
minimum Advertising Fee and minimum Campaign Fee otherwise consistent with the
terms of this Agreement) shall be paid in four (4) equal quarterly installments
payable on the first day of January, April, July, and October during each such
Annual Period, provided that the first such payment is not due until January
2006. In the event that application of the alternate percentage minimum set
forth in Paragraph 7.1 above shall require adjustment of a January payment,
reconciliation shall be made in accordance with Paragraph 9.2 below.

     7.4 The Guaranteed Minimum Royalty by Brand for each Annual Period may be
credited only against the Sales Royalty by Brand for the same Annual Period.
Further, no payment of Guaranteed Minimum Royalty shall be refundable.

     7.5 If the * of Licensee determined in accordance with Generally Accepted
Accounting Principles ("*") falls below * at the end of any quarterly reporting
period, Licensee shall so notify Licensor immediately in writing. In such event,
Licensor

                                       18

may require Licensee to * * * * * shall contain terms and conditions reasonably
determined by Licensor and, once issued, shall * no later than January 15th, as
updated to reflect the total amounts payable for the new Annual Period. In the
event Licensee fails to deliver * due in accordance with this Paragraph 7.5,
Licensor shall have the option of * * * *. In the event the * is restored to *,
Licensee shall no longer be required to renew the * * * * * *. In the event the
* ever falls below * Licensee shall so notify Licensor immediately in writing
and Licensor shall have the option of * upon written notice, subject to the
provisions of this Agreement with respect to termination. Licensee's failure to
notify Licensor as required shall be deemed a material breach of this Agreement.

     7.6 In the event Licensee shall fail to make any payment required under
this Agreement, Licensor Group shall be entitled to deduct or set off such
payment from amounts owed by Licensor Group to Licensee hereunder.

8.   SALES ROYALTY

     8.1 (a) In each Annual Period, Licensee shall pay to Licensor a Sales
Royalty on "Net Sales" (as defined below) for the Licensed Mark in the amount
of: (i) * of actual full price Net Sales for Net Sales up to and including * and
(ii) * of actual full price Net Sales for Net Sales greater than *.

          (b) "NET SALES" shall mean gross sales amount of Articles shipped by
the Licensee Group, less: (i) customary industry trade or term discounts (which
shall not exceed * ); (ii) returns; (iii) freight and taxes; and (iv)
markdowns and allowances (which shall not exceed * of the gross sales amount
of Articles in any Annual Period). No deduction shall be made for other
discounts, uncollectible accounts or costs incurred by Licensee.

          (c) To the extent sales to approved * are expected to exceed * of
Licensee's Net Sales in any Annual Period, Licensee shall obtain Licensor's
approval for any further sales to approved off-price outlets in such Annual
Period. If sales to approved off-price outlets exceed * of Licensee's Net Sales
in any Annual Period, Licensee shall pay Sales Royalty on such sales in excess
of * of Net Sales as if these sales were made at full wholesale prices.
Notwithstanding the above, if sales to * exceed * of Licensee's Net Sales in any
Annual Period, Licensee shall be deemed to be in default for purposes of
Paragraph 13.1 hereunder. From time to time, Licensee may propose a specific
opportunity such as a one-time sell off or special production run to an * and
Licensor may approve or

                                       19

disapprove such proposal in its sole discretion with the terms governing such
opportunity to be determined by the parties at such time.

          (d) Licensee agrees not to designate sales prices so low or discounts
so high as to adversely affect the image, reputation and prestige of the
Licensed Mark and the consistency of Licensor's worldwide marketing efforts.
Licensee shall set its wholesale prices and suggested retail prices at a level
that would encourage the development of sales thereof while maintaining the
image and prestige of the Licensed Mark and the quality of the Articles.
However, Licensee shall set its wholesale prices and suggested retail prices for
each Category in its sole discretion.

     8.2 For each Annual Period, the Sales Royalty, Advertising Fee and Campaign
Fee shall be accounted for and paid quarterly within thirty (30) days from March
31, June 30, September 30 and December 31. The Sales Royalty, Advertising Fee
and Campaign Fee payable for each accounting and payment period (the "PAYMENT
PERIOD") during each Annual Period shall be computed on the basis of Net Sales
during such Payment Period, with a credit for any quarterly installment payments
theretofore made to Licensor for such applicable Payment Period only, provided,
however, that in no Payment Period shall the total payment of Sales Royalty,
Advertising Fee and Campaign Fee based on Guaranteed Minimum Net Sales be less
than * of the total Guaranteed Minimum Net Sales for the then-current Annual
Period, subject to further reconciliation in subsequent Payment Periods. Any
refund of Sales Royalty, Advertising Fee and/or Campaign Fee owed to Licensee
shall be calculated in the Payment Period reconciling each Annual Period and
paid within thirty (30) days of reconciliation.

     8.3 No payment of Sales Royalty for any Annual Period in excess of payments
of Guaranteed Minimum Royalty by Brand for the same Annual Period shall be
credited against the Guaranteed Minimum Royalty by Brand due to Licensor for any
other Annual Period.

     8.4 Licensee shall not be entitled to nor shall take deductions or set-offs
from any payments required to be made under this Agreement for any reason.

9.   SALES STATEMENT

     9.1 (a) Licensee shall deliver to Licensor, at the time each Sales Royalty
payment is due, a statement (the "QUARTERLY STATEMENT") signed and certified as
accurate by Licensee's chief financial officer, setting forth the just completed
Payment Period and the Annual Period-to-date: (i) the number and invoice price
of all Articles invoiced or shipped to Licensee's customers, the amount of
discounts and returns which properly may be deducted from Net Sales, all by
Brand, by customer, by month, and in the aggregate; (ii) the amount of Sales
Royalty due and payable; and (iii) the amounts spent by Licensee for
advertising, marketing and other promotional activities, by Brand and by type of
activities and in the aggregate.

                                       20

          (b) (i) Licensee shall deliver to Licensor monthly, within two (2)
weeks after the end of each month commencing with the first month during which
Articles are shipped, detailed sell-in reports, in both units and dollar
amounts, covering the preceding month and the Annual Period-to-date, by Brand,
by customer, by door, by style or stock keeping unit and by collection, with a
comparison to the corresponding period during the preceding Annual Period; (ii)
Licensee shall deliver to Licensor detailed weekly sell-through reports
(including sales and stock information for "this year," "last year" and
"planned"), by Brand, by customer, by door and by collection, with information
presented for the week, the month-to-date, the season-to-date and the Annual
Period-to-date. The final such report for each month also shall include the
required information by style. Each weekly sales report shall cover the
proceeding Sunday through Saturday and shall be delivered by telefax no later
than the following Friday.

          (c) Each of the Quarterly Statements and Licensee's other statements,
reports and other items to be delivered under this Paragraph 9.1 shall be
prepared in a format reasonably acceptable to Licensor which may be amended from
time to time upon written notice to Licensee.

     9.2 Licensee shall deliver to Licensor, not later than forty-five (45) days
after the end of each Annual Period, a statement signed and certified by a
certified public accountant, relating to the entire Annual Period and setting
forth the same information required of Licensee in accordance with Paragraph 9.1
above. Licensee shall also provide a copy of Licensee's audited annual report
certified by a certified public accountant including a separate breakout of
financial statement data for revenues and expenses associated with this License
Agreement (which breakout need not be certified by Licensee's certified public
accountants). If any such statement should indicate that there had been an
underpayment or overpayment of Sales Royalty in any Annual Period, then Licensee
shall pay or Licensor shall refund such amount (as the case may be) within
thirty (30) days of the receipt by Licensor of such statement.

10.  BOOKS AND RECORDS; AUDITS

     10.1 Licensee shall maintain complete and accurate books of account and
records as required under this Agreement (including the originals or copies of
documents supporting entries in the books of account) covering all transactions
relating to this Agreement and/or the distribution and sale of Articles,
including but not limited to invoices, credits and shipping documents. At any
reasonable time during the Term and for three (3) years thereafter, Licensor
may, upon five (5) days prior written notice to Licensee, cause an audit to be
made of Licensee's records and documents relating to this Agreement, but in no
event more than twice in any Annual Period. Any such audit performed by Licensor
or Licensor's certified public accountant or other auditing professional shall
be conducted so as to minimize disruption to Licensee's business operations. All
such records and documents shall be kept available for at least five (5) years
from the date thereof, including after the end of the Term, but in any event no
less than the applicable period required by law.

                                       21

     10.2 If, as a result of any audit of Licensee's books and records, such
audit discloses a deficiency in the payment of any amount due hereunder, such
deficiency shall become immediately due and payable with interest at the rate
provided in Paragraph 13.1 below from the date when such payment should have
been made, provided that Licensee may contest in good faith a finding of
deficiency, or the amount thereof, which objection shall be resolved by good
faith negotiation of the parties or pursuant to the arbitration provisions set
forth in Section 18 hereunder. In the event the deficiency for any 12 month
period shall be in excess of * (excluding mathematical, clerical, or similar
good-faith error) of the amount actually paid for the subject period, Licensee
shall pay to Licensor upon demand the cost of such audit as well as all costs
associated with two (2) subsequent actual audits. In the event such a deficiency
should occur on more than one occasion, or if the deficiency in any 12 month
period is in excess of * (excluding mathematical, clerical, or similar
good-faith error), then Licensee shall be deemed in default, and Licensor, in
addition to all other remedies at law, in equity or otherwise provided herein,
shall have the option to terminate this Agreement upon ten (10) days notice.

11.  THE LICENSED MARK; COPYRIGHTS; PATENTS

     11.1 The Licensee Group shall not use the Licensed Mark, in whole or in
part, as a corporate name, trade name or domain name.

     11.2 The Licensee Group acknowledges that as between the Licensee Group and
the Licensor Group the Licensor Group is the owner of all right, title and
interest in and to the Licensed Mark in the Territory in any form or embodiment
thereof and is also the owner of the goodwill attached or which shall become
attached to the Licensed Mark in connection with the business and goods in
relation to which the same has been, is or shall be used. Sales of Articles by
Licensee shall be deemed to have been made by Licensor for purposes of trademark
registration and all uses of the Licensed Mark by Licensee shall inure to the
benefit of Licensor. Licensee shall not do or cause any act or thing which may
reasonably be expected to adversely affect any rights of Licensor in and to the
Licensed Mark or any registrations thereof. The Licensee Group shall not sell
Articles as "seconds", "irregulars", "damaged", etc. without the prior written
approval of Licensor pursuant to the provisions of Section 5.

     11.3 Licensee shall use the Licensed Mark in the Territory strictly in
compliance with all legal requirements and shall use such markings in connection
therewith as may be required by Licensor pursuant to Paragraph 4.4(c).

     11.4 The Licensee Group shall never challenge the Licensor Group's
ownership of or the validity of the Licensed Mark or any application for
registration thereof, or any trademark registration thereof, or any rights of
the Licensor Group therein, nor shall the Licensee Group seek to register the
Licensed Mark or any variation or simulation thereof within or without the
Territory. Further, the Licensee Group shall cooperate fully, and at Licensor's
sole cost and expense, with any reasonable request by the Licensor Group in
connection with any application, registration or filing in connection with the
Licensed

                                       22

Mark. The provisions of this Paragraph 11.4 and the Licensee Group's obligations
hereunder shall survive the expiration of termination of this Agreement.

     11.5 The Licensor Group shall take such action as it deems advisable for
the protection of its rights in and to the Licensed Mark and the Licensee Group
shall fully cooperate with the Licensor Group in connection therewith. Licensee
agrees to bear all costs and fees for enforcement and anti-counterfeiting
efforts associated with the Articles. Licensor shall attempt in good faith to
minimize enforcement costs consistent with the levels of counterfeit products
bearing the Licensed Marks actually detected in the Territory, and whenever
possible, Licensor will provide reasonable notice and request Licensee approval,
not to be unreasonably withheld, before incurring costs pursuant to this
Paragraph 11.5(b). The Licensor Group shall not be required to take any action
if it deems inadvisable to do so, and the Licensee Group may not take any action
with respect to the Licensed Mark without Licensor's prior written approval.
Licensee shall notify Licensor promptly after the Licensee Group becomes aware
of: (a) an infringement or threatened infringement of the Licensed Mark; or (b)
any actionable imitation of the Licensed Mark or the Articles or of their
packaging or advertising. In such notice, Licensee shall identify the alleged
infringer or imitator and shall specify in reasonable detail the nature of the
acts constituting such infringement or actionable imitation. With respect to any
amounts recovered by the parties in connection with an enforcement action
provided for in this Paragraph 1.7(b), Licensor and Licensee shall first recover
their respective actual legal out-of-pocket expenses and fees, or equitable
proportions of them. With respect to any recovery in excess of expenses and
fees, the parties shall divide such amounts equally.

     11.6 All intellectual property rights contained in the Articles or Article
Materials whether (i) created by Licensor Group or (ii) created by Licensee
Group and approved by Licensor (collectively the "ARTICLE RIGHTS") shall be
owned solely by Licensor. All copyrights in the Article Rights created by
Licensee shall be considered works made for hire. In the event such copyrights
are deemed not to be works for hire or any other Article Rights are not
considered the property rights of Licensor, Licensee shall be deemed hereby to
have assigned to Licensor all right, title and interest, in and to all such
Article Rights held by Licensee including without limitation, all copyrights and
patents. At any time and from time to time and upon the request by Licensor, and
at the expense of Licensor, Licensee shall (x) execute, acknowledge and deliver,
or cause to be done, executed, acknowledged and delivered all such further
deeds, assignment, transfers and conveyances as may be reasonably required for
the better assigning, transferring, granting and confirming to Licensor and its
successors and assigns of the Licensor's rights as set forth herein, or (y)
otherwise assist Licensor in procuring registrations for Licensor's rights as
set forth herein including without limitation any patents or copyright
registrations. Licensee shall enter into written agreements on these same terms
with all freelance individuals creating work, copyrightable or otherwise, in
connection with the Articles or Article Materials and shall make any such
agreements available for review by Licensor at Licensor's request.

                                       23

12.  INDEMNITY; INSURANCE

     12.1 (a) Licensee shall hold Licensor, Mr. Kenneth Cole, individually, and
the Licensor Group, as well as the directors, officers, employees and agents,
and their respective successors and assigns, of the Licensor Group, harmless
from and shall indemnify each of them against any losses, liabilities, damages
and expenses (including interest, penalties and reasonable attorneys' fees and
expenses) which any of them may incur or become obligated to pay to a third
party, or for which any of them may become liable to pay to a third party in any
action, claim or proceeding against any of them, by reason of any representation
or warranty on the part of Licensee being untrue in any material respect or by
reason of any acts, whether of omission or commission, by Licensee, the Licensee
Group, any of their contractors, suppliers or any of their respective
affiliates, agents or employees arising out of or related to this Agreement.
Licensee's indemnification obligation also shall apply to any action, claim or
proceeding against any of the indemnitees brought by or on behalf of any of
Licensee's affiliates, customers, contractors or suppliers arising out of or
relating to their relationships or dealings with Licensee, the termination
thereof or otherwise.

          (b) Licensor shall hold the Licensee Group and its directors,
officers, employees and agents, and their respective successors and assigns,
harmless from and shall indemnify each of them against any losses, liabilities,
damages and expenses (including interest, penalties and reasonable attorneys'
fees and expenses) which any of them may incur or become obligated or liable to
pay in any action, claim or proceeding against any of them alleging that the
use, in accordance with the requirements hereof, of (i) the Licensed Mark, or
(ii) elements contained in the Ancillary Branding solely provided by Licensor,
infringe upon the trademark rights of a third party.

          (c) A party claiming indemnification shall give the indemnifying party
prompt notice of any such action, claim or proceeding. The indemnifying party
then may take such action as it deems advisable to defend the action, claim or
proceeding on behalf of the indemnitee. If appropriate action is not taken by
the indemnifying party timely after its receipt of notice, the indemnitee may
defend the action, claim or proceeding, but with only one counsel reasonably
acceptable to the indemnifying party and at no more than standard rates, and no
compromise or settlement may be made without the approval of the indemnitor and
the indemnitee, which shall not be withheld or delayed unreasonably. In either
case, the indemnitee, and each party shall keep the other fully advised of all
developments and shall cooperate fully with each other in connection with the
defense thereof. The provisions of, and Licensee's obligations under, this
Paragraph 12.1(a) shall survive the expiration or termination of this
Agreement.

     12.2 Licensee shall procure and maintain at its own expense in full force
and effect at all times during which Articles are being sold a public liability
insurance policy which shall include products liability coverage with respect to
Articles, with a limit of liability of not less than *. Such insurance policy
shall be written for the benefit of Licensee, with Licensor, Licensor's ultimate
parent, and Mr. Cole as additional insureds and shall provide for at least
thirty (30) days prior notice to

                                       24

Licensor of the cancellation or substantial modification thereof. Licensee shall
deliver certificates of such insurance to Licensor within thirty (30) days of
the date hereof and thirty (30) days prior to any renewal or replacement
thereof. Nothing in this Paragraph 12.2 shall be deemed to limit the
indemnification provisions of Paragraph 12.1 (a) above.

13.  DEFAULTS

     13.1 In the event Licensee fails to make any payment due hereunder and such
default shall continue uncured for a period of ten business (10) days after
receipt of notice from Licensor that such payment was due and payable, Licensor
may terminate this Agreement forthwith by notice thereof to Licensee. Interest
shall be payable with respect to late payments and shall accrue at a rate equal
to two (2) full percentage points over the prime rate being charged in New York,
New York by the Bank of New York as of the close of business on the date the
payment first becomes due. In the event:

     (i)  Subject to the provisions of Paragraph 19.8, Licensee discontinues to
          arrange for the manufacture or discontinues the distribution of
          Articles for a period of sixty (60) or more consecutive days after
          launch;

     (ii) The Licensee Group knowingly or intentionally sells or exports
          Articles out of the Territory or otherwise violates the provisions of
          Paragraphs 1.6 and 1.7 above;

     (iii) Net Sales in any * Annual Periods are less than the * * s in the
          relevant Annual Period;

     (iv) * in any Annual Period are more than * * of Net Sales by Brand during
          such Annual Period in violation of Paragraph 8.1(c) above;

     (v)  Licensee seriously or repeatedly violates the provisions of Paragraph
          13.3; or

     (vi) Licensee fails to comply with the requirements of Paragraph 7.4 above,

then in any such event, Licensor may terminate this Agreement forthwith by
notice thereof to Licensee. If Licensor or Licensee fails to perform any of its
non-monetary obligations under this Agreement and such default is not curable
or, if curable, shall continue uncured for a period of thirty (30) days after
notice thereof from the non-defaulting party, then the non-defaulting party, at
its sole election, may terminate this Agreement forthwith by notice thereof to
the defaulting party, provided, however, in the event such defaulting party has
commenced to cure any such breach during said thirty (30) day period which
cannot be completely cured within said thirty (30) day period and is diligently
prosecuting the cure of such breach, such default shall be deemed to have

                                       25

been cured unless and until the defaulting party has not, in fact, cured such
default within ninety (90) days of the initial notice of such default.

     13.2 (a) In the event that Licensee files a petition in bankruptcy, is
adjudicated a bankrupt or files a petition or otherwise seeks relief under or
pursuant to any bankruptcy, insolvency or reorganization statute or proceeding,
or if a petition in bankruptcy is filed against it, or it becomes insolvent or
makes an assignment for the benefit of creditors or a custodian, receiver or
trustee is appointed for it, or a substantial portion of its business or assets,
and such petition is not discharged or dismissed within ninety (90) days of its
filing, this Agreement shall terminate automatically without notice.

          (b) No assignee for the benefit of creditors, custodian, receiver,
trustee in bankruptcy, or any other officer of the court or official charged
with taking over custody of Licensee's assets or business may continue this
Agreement or exploit the Licensed Mark if this Agreement terminates pursuant to
Paragraph 13.2 (a) above.

          (c) If, pursuant to the United States Bankruptcy Code or any
amendment, supplement or successor thereto, a trustee in bankruptcy of Licensee,
or Licensee, as debtor, is permitted to assume this Agreement and does so and,
thereafter, desires to assign this Agreement to a third party, the trustee or
Licensee, as the case may be ("DEBTOR"), shall notify Licensor. The notice shall
set forth the name and address of the proposed assignee, the proposed
consideration for the assignment and all other relevant details thereof. The
giving of this notice shall constitute the grant to Licensor of an option to
have this Agreement assigned to it or to its designee for the consideration, or
its equivalent in money, and upon the terms specified in the notice. This option
may be exercised only by notice given by Licensor to Debtor by the 30th day
after Licensor's receipt of the notice from Debtor, unless a shorter period is
deemed appropriate by the court in the bankruptcy proceeding. If Licensor does
not exercise its option in a timely manner, Debtor may complete the assignment,
but only if the assignment is to the entity named in the notice and for the
consideration and upon the terms specified therein. Nothing herein is intended
to impair any rights that Licensor may have as a creditor in the bankruptcy
proceeding.

     13.3 Licensee shall not knowingly, nor shall Licensee knowingly suffer or
permit any person or entity engaged in the manufacture or distribution of
Articles, to violate any applicable labor laws or Customs laws (including those
regarding transshipment and improper designation of country of origin). The
Licensee Group may use contractors for the production of Articles
("CONTRACTORS"). However, no prospective Contractor shall be engaged until (i)
the Licensee Group conducts or has conducted its own factory audit of the
prospective Contractor's facilities and Licensee certifies to Licensor that the
prospective Contractor has passed the audit, i.e., satisfied Licensor's then
current standards therefor (as provided in writing to Licensee by Licensor), and
(ii) the prospective Contractor executes and delivers to Licensee and Licensor
an executed original of Licensor's factory guidelines and terms of engagement or
such new form of contractor agreement as may be adopted generally by Licensor
("FACTORY GUIDELINES"). The Contractor's compliance shall be monitored by the
Licensee Group in accordance

                                       26

with Licensor's policies as provided to Licensee in writing. If Licensor objects
to a Contractor, it shall provide Licensee with the basis for its determination,
such as the failure of a Contractor to comply with the requirements of this
Agreement or the Factory Guidelines, the failure of a Contractor to pass
follow-up factory audits or the failure of a Contractor to produce Articles of
the requisite quality. Thereupon, Licensee shall use its commercially reasonable
efforts to correct the problem, if possible, and, if the problem cannot be
corrected or is not corrected within a reasonable period after receipt of
Licensor's aforesaid notice, Licensee immediately shall terminate its engagement
of such Contractor. All costs incurred by Licensee in connection with a factory
audit of prospective Contractor or a current Contractor shall be borne by
Licensee. In the event that Licensor determines to inspect Contractors, either
through a member of the Licensor Group or by means of independent monitors
retained by the Licensor Group, the Licensee Group shall cooperate with and
facilitate such inspections, it being understood, however, that the costs
incurred by the Licensor Group shall be borne by Licensor. In the event that it
comes to Licensor's attention that there is a substantial risk that Contractors
are not in accordance with applicable law or with the Factory Guidelines, the
parties shall confer in good faith to determine appropriate safeguards to ensure
compliance. Any shipment of Articles knowingly produced or accepted in violation
of applicable labor law or Licensor's Factory Guidelines shall be deemed to be
default of this Agreement subject to cure (as appropriate) in accordance with
Paragraph 13.1. Repeated serious violations not cured or otherwise acted upon in
a timely fashion shall result in termination, subject to the rights and remedies
of Licensor.

14.  INJUNCTIVE RELIEF

     14.1 Licensee recognizes that certain breaches of its obligations,
including but not limited to its obligations under Paragraphs 1.4, 1.8, 1.9(a),
4.1, 4.3, 11 (in its entirety), 15.3 and 19.10 of this Agreement, may give rise
to irreparable harm to Licensor and that monetary damages will be inadequate to
compensate Licensor for such breach. Licensee therefore agrees that, in addition
to any other remedies at law, in equity or otherwise, Licensor shall be entitled
to obtain temporary and permanent injunctive relief from a court of competent
jurisdiction to restrain any breach violation or threatened breach or violation
of Paragraphs 1.4, 1.8, 1.9(a), 4.1, 4.3, 11 (in its entirety), 15.3 and 19.10
of this Agreement without bond and without the necessity of showing actual
monetary damages and that irreparable harm to Licensor shall be presumed with
each such breach, violation or threatened breach by Licensee. Licensee shall
also be entitled to obtain temporary and permanent injunctive relief from a
court of competent jurisdiction to restrain any unauthorized sale or
distribution of Articles by a third party. Each party further agrees that
breaches of the obligations of confidentiality under Paragraph 19.2 may give
rise to irreparable harm to the disclosing party thereunder and that monetary
damages will be inadequate to compensate the disclosing party for such breach.
Each of Licensor and Licensee therefore agrees that, in addition to any other
remedies at law, in equity or otherwise, a disclosing party shall be entitled to
obtain temporary and permanent injunctive relief from a court of competent
jurisdiction to restrain any breach violation or threatened breach or violation
of Paragraph 19.2 of this Agreement without bond and without the necessity of
showing actual monetary damages

                                       27

and that irreparable harm to the disclosing party shall be presumed with each
such breach, violation or threatened breach by the receiving party.

15.  RIGHTS ON EXPIRATION OR TERMINATION

     15.1 Upon termination of this Agreement by Licensor under *, Licensee shall
pay to Licensor, within thirty (30) days of the date of termination as
liquidated damages solely with respect to Licensee's financial obligations
hereunder, and not as a penalty, a sum equal to the * * * * * * (the "ROYALTY
DAMAGES") as well as any amounts owing as of the time of termination.

     15.2 Notwithstanding the expiration or termination of this Agreement,
Licensor shall have and hereby reserves all rights and remedies which it has, or
which are granted to it by operation of law or equity: (a) to enjoin the
unlawful or unauthorized use of the Licensed Mark; (b) to collect any amounts
owed by Licensee pursuant to this Agreement, including but not limited the
Royalty Damages; and (c) to recover any other damages resulting from Licensee's
breach hereof, provided, however that the Royalty Damages shall serve as
liquidated damages for lost Royalty and Advertising Fees and for the costs of
finding another party to replace Licensee. Notwithstanding the expiration or
termination of this Agreement, Licensee shall have and hereby reserves all
rights and remedies which it has, or which are granted to it by operation of law
or equity for breach of this Agreement by Licensor.

     15.3 Provided this Agreement is not terminated for default under * * *,
Licensee may, for an additional period of * months only, on a non-exclusive
basis, sell and dispose of its inventory of Articles (the "SELL-OFF ARTICLES").
Upon termination or expiration of this Agreement, the parties shall jointly and
immediately cause a physical inventory to be taken of the Articles held in
inventory by Licensee (including those expected from vendors or committed to
purchasers) which inventory shall be reduced to writing and copies thereof
delivered to and signed by each party. The sales of such Sell-Off Articles are
subject to all of the provisions hereof, including an accounting for and the
payment of Sales Royalty on a quarterly basis; provided, however, Sell-Off
Articles may not be advertised or promoted during such period. Unauthorized sale
or promotion of the Articles in the Territory or elsewhere upon termination or
expiration would cause irreparable damage to Licensor and the prestige of the
Licensed Mark. Any violation of this provision shall entitle Licensor to relief
in the form of a temporary restraining order and preliminary injunction.
Licensor reserves the prior right and option to purchase any or all Sell-Off
Articles at a price equal to * *. The accounting and payment shall be due within
thirty (30) days after the close of each three-month period. No payments of
Guaranteed Minimum Royalty made during the Annual Period in which this Agreement
shall terminate or expire shall be credited against any Sales Royalty payable on
the sales of Sell-Off Articles. In no event shall Licensee maintain more than *
inventory of Articles at any time as shall be estimated reasonably and in good
faith.

                                       28

     15.4 Except as provided in Paragraph 15.3 above, on the expiration or
termination hereof (except for termination as a result of breach by Licensor):
(a) all rights of Licensee shall terminate forthwith and shall revert
immediately to Licensor, and all payments of Sales Royalties, the Advertising
Fee and the Campaign Fee based upon Net Sales theretofore made, shall become
immediately due and payable; (b) Licensee may no longer use the Licensed Mark
and shall promptly transfer to Licensor, free of charge, all registrations,
filings and rights with regard to the Licensed Mark which it may have possessed
at any time; and (c) Licensee thereupon shall deliver to Licensor, free of
charge, all samples, sketches and other material in its possession particular or
unique to the Products, including materials which were designed by or approved
by Licensor or used in connection with the business conducted by Licensee
hereunder and all other material in its possession with the Licensed Mark
thereon. Nothing in the foregoing shall relieve Licensee of any obligation of
payment arising prior to the effective date of such expiration or termination.
After the expiration or termination hereof, Licensee shall not use or permit
others to use any of said sketches or other material in connection with Products
or any other merchandise.

16.  NOTICE

     16.1 All reports, approvals, requests, demands and notices required or
permitted hereby shall be in writing and shall be deemed to be duly given (i) if
personally delivered, (ii) one day after dispatch if delivered by
nationally-recognized overnight courier or mail service, such as Federal Express
or Express Mail, or (iii) five business days after dispatch if mailed (by
certified or registered mail, return receipt requested) to the party concerned
at its address set forth below:

          To Licensor:    at the address set forth on page 1:
                          Attention: Vice President, Licensing

          with a copy to: Chief Financial Officer
                          c/o Kenneth Cole Productions, Inc.
                          603 West 50th Street
                          New York, New York 10019

          and a copy to:  General Counsel
                          c/o Kenneth Cole Productions, Inc.
                          603 West 50th Street
                          New York, New York 10019

          To Licensee:    at the address set forth on page 1:
                          Attention: Chief Executive Officer

                                       29

          with a copy to: Dechert LLP
                          30 Rockefeller Plaza
                          New York, New York 10112-2200
                          Attention: Martin Nussbaum and Richard Goldberg

Either party may, from time to time, designate a different address by giving
written notice to the other designating such address.

17.  ASSIGNABILITY; BINDING EFFECT

     17.1 The performance of Licensee hereunder is of a personal nature and,
therefore, neither this Agreement nor the license or other rights granted
hereunder may be assigned, sublicensed or transferred by Licensee and any such
attempted assignment, sublicense or transfer, whether voluntary or by operation
of law, directly or indirectly, shall be void and of no force or effect. A
Change In Control (as defined below) of Licensee or any parent of Licensee shall
be deemed an assignment hereof. Licensor's consent to any assignment, sublicense
or transfer shall not be a waiver of Licensor's rights with respect to any
further assignment, sublicense or transfer.

     17.2 "CHANGE IN CONTROL" shall mean (except as provided below in this
definition) (i) the acquisition by any individual or group, other than Josephine
Chaus and her family trusts, in a single transaction or series of transactions
of more than * * of the aggregate voting power of the outstanding equity
securities or interests of Licensee, or (b) the membership in Licensee's Board
of Directors such that more than one-half of the directors are persons whose
election has not been previously recommended by the applicable pre-existing
Board of Directors, or (ii) any merger, consolidation or reorganization of
Licensee, or (iii) any sale or transfer of all or substantially all of the
assets of Licensee to a purchaser or other transferee, in the case of each of
(ii) or (iii), where the stockholders of the Licensee immediately before the
transaction do not own at least * of the combined voting power of the voting
securities of the surviving entity or its parent immediately after the
transaction, provided, however, that any transaction or series of transactions
that are effected solely in connection with a (x) reincorporation, (y) a
reorganization, recapitalization or financing not in connection with the sale of
all or substantially all of the assets or stock or other ownership interests of
Licensee or (z) an underwritten public offering of common stock of Licensee, is
not an Change of Control.

     17.3 This Agreement shall inure to the benefit of and shall be binding upon
the parties, their respective successors, Licensor's transferees and assigns and
Licensee's permitted transferees and assigns.

                                       30

18.  ARBITRATION; COURT ACTIONS

     18.1 Except as specifically set forth in Paragraph 14 above or otherwise in
this Agreement, any and all disputes, controversies and claims arising out of or
relating to this Agreement or concerning the respective rights or obligations
hereunder of the parties hereto except disputes, controversies and claims
relating to or affecting in any way Licensor's ownership of or the validity of
the Licensed Mark or any registration thereof, or any application for
registration thereof (the "LICENSED MARK DISPUTES") shall be settled and
determined by arbitration before three arbitrators in New York, New York before
the Commercial Panel of the American Arbitration Association in accordance with
and pursuant to the then existing Commercial Arbitration rules. The arbitrators
shall have the power to award specific performance or injunctive relief and
reasonable attorneys' fees and expenses to any party in any such arbitration and
the courts shall have similar power with regard to that injunctive relief sought
by Licensor, with regard to Licensed Mark Disputes or as otherwise provided
herein (collectively "COURT ACTIONS"). However, in any arbitration proceeding
arising under this Agreement, the arbitrators shall not have the power to
change, modify or alter any express condition, term or provision hereof, and to
that extent the scope of their authority is limited. The arbitration award shall
be final and binding upon the parties and judgment thereon may be entered in any
court having jurisdiction thereof. The service of any notice, process, motion or
other document in connection with an arbitration under this Agreement or for the
enforcement of any arbitration award hereunder may be effectuated in the manner
in which notices are to be given to a party pursuant to Paragraph 16 above.

     18.2 Court Actions shall be brought in New York, New York in any court
having competent jurisdiction, except that Licensor also may bring an injunctive
proceeding in any jurisdiction where deemed appropriate by reason of its subject
matter. Licensor and Licensee irrevocably submit to the jurisdiction of the
State and Federal courts in New York, New York and the courts in such other
jurisdictions in Court Actions and waive any claim or defense of inconvenient
forum or lack of personal jurisdiction in such forum under any applicable law or
decision or otherwise. Service of any notice, process, motion or other document
in connection with a Court Action may be made in the same manner that notices
may be given under Paragraph 16 above. However, Licensor may serve process in
any manner permitted by the laws of the State of New York, or by the State or
Federal courts located therein, or by the laws or courts of any such appropriate
jurisdiction or any subdivision thereof.

19.  MISCELLANEOUS

     19.1 (a) Licensee shall sell Articles to the Licensor Group in such
quantities as may be reasonably required. It is understood: (i) that Licensor
orders are subject to reasonable manufacturing calendars consistent with those
for other customers; (ii) that in no event shall Articles ordered by Licensor be
reallocated to other customers without Licensor's prior written approval; (iii)
that Licensee shall not be required to reallocate Articles from other customers
who have prior confirmed orders; and (iv) that Licensor shall have first
priority for all Articles in Licensee's inventory that are not

                                       31

subject to prior confirmed orders by other customers. All such purchases of
Articles shall be billed and paid on terms of sale no less favorable to Licensor
than any other retail customer of Articles of Licensee. In connection with such
sales, Licensee shall deliver to Licensor, free of charge, one sample of each
Article ordered by the Licensor Group (including each color or pattern ordered
for each style). For in-season goods, the price for sales to retail and outlet
stores operating under the Licensed Mark (or any other trademark owned or
controlled by Licensor) and to Licensor's catalogs and Websites shall be the
lowest * for such collection, before markdowns and excluding close-outs, less a
* discount. Such initial wholesale selling prices shall not include one-time
special offers to retailers provided such offers do not, in the aggregate,
constitute more than * of the total sales of the relevant Article. Delivery of
such Articles shall not be later than the dates of delivery of the same Articles
to any other customer unless otherwise specified by Licensor. For Closeouts,
Licensor shall have a first option to purchase all such Articles. Accordingly,
before offering any Closeouts to any third party, Licensee shall deliver to
Licensor a schedule of available Closeouts and Licensor shall notify Licensee,
within five (5) business days after the receipt of any such schedule, which, if
any, of the available Closeouts Licensor shall purchase. The price for sales of
Closeouts to retail and outlet stores operating under the Licensed Mark (or any
other mark owned or controlled by Licensor) and to Licensor's catalogs and
Websites shall be the lower of (i) * for such collection, before markdowns and
excluding close-outs, less a * discount, or (ii) *, defined as the * *. In no
event shall Licensee sell Closeouts to any third party at a price * * without
again offering them to the Licensor Group. No * * shall be due and payable on
any sales under this Paragraph 19.1(b); neither shall Licensee include such
sales in the calculation of * *.

          (b) At the request of Licensor, Licensee (or its affiliate) shall sell
any and all Articles available in either Licensee's seasonal collections or in
Licensor retail stores, in such quantities as may be ordered from time to time,
to the Licensor Group or to Licensor's authorized international distributors for
resale outside the Territory (the "FOREIGN DISTRIBUTORS"). The prices to be paid
for Articles sold to such Foreign Distributors shall be * of Licensee's * with *
due to Licensee as a buying agent's commission and * due to Licensor as an
administrative fee. * shall be deemed to mean the * * * not to exceed *. All
other terms of sale shall be * * to said Foreign Distributors than to any other
customer of the Articles. In the event Licensee shall sell Articles to any
Foreign Distributor, Licensee (or its affiliate) shall deal directly with such
Foreign Distributor and shall look solely to it in such dealings. No * shall be
due and payable on any sales under this Paragraph 19.1(b); neither shall
Licensee include such sales in the calculation of its *

                                       32

*. In the event Licensee shall sell custom Articles to any Foreign Distributor,
Licensee (or its affiliate) shall deal directly with such Foreign Distributor
and shall look solely to it in such dealings, provided, however that such
Articles are approved in advanced by Licensor.

     19.2 (a) All of the contents of this Agreement and all information relating
to the business, operations and personnel of the members of a party that the
other party learns or has learned during or prior to the Term, including all
financial information and business plans relating to the business of a party or
any of its affiliates, and all concepts, design components, specifications,
creative concepts and marketing, advertising and promotional concepts and plans
that a party provides to the other party or that is approved for use in
connection with Articles ("CONFIDENTIAL INFORMATION"), are their valuable
property. Confidential Information shall not include information or material
that (i) is or becomes generally available to the public other than as a result
of a disclosure by a party in violation of this agreement, (ii) was within the
receiving party's possession prior to its being furnished by or on behalf of the
disclosing party, or (iii) becomes available to the receiving party on a
non-confidential basis from a source other than the disclosing party, provided
that such source is not bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the disclosing
party. The parties acknowledge the need to preserve the confidentiality and
secrecy of the Confidential Information. Therefore, during the Term and
thereafter, the parties shall not use or disclose any of the Confidential
Information, except for such use that is permitted under this Agreement or
except as disclosure may be required by applicable law, regulation or legal or
regulatory process. The parties shall take all necessary steps to ensure that
any use by them and those acting on their behalf, including the members of the
Licensor Group and Licensee Group, their Contractors and its suppliers, shall
preserve the confidentiality and secrecy thereof.

          (b) All concepts, design components and specifications and all rights
therein, if either submitted by or approved by Licensor for use in connection
with the Articles, shall be the exclusive property of Licensor and may be used
by Licensee only in connection this Agreement. If any concepts, design
components, specifications or other materials so submitted by or approved by
Licensor are not used by Licensee, Licensee shall deliver such items to
Licensor, at Licensee's expense, and shall not use them or permit their use by
others. Whether or not Licensee uses any of these items in connection with the
Products, Licensor may permit others to use them, but only if such use does not
conflict with the rights granted to Licensee hereunder.

          (c) Neither Licensee nor any member of the Licensee Group shall
intentionally manufacture or sell any Products or other products bearing designs
or of a styling confusingly similar to the unique or distinctive designs or
unique or distinctive styling of any Articles or authorize any third party to do
so; nor shall Licensee or any member of the Licensee Group intentionally
manufacture or sell (i) any Products or other products using distinctive
materials used for any Articles or (ii) a collection of Products or other
products confusingly similar to any seasonal collection under this Agreement.
Also, Licensee shall implement appropriate internal procedures to ensure that
the provisions of this Paragraph 19.2(c) are not violated.

                                       33

     19.3. Notwithstanding anything to the contrary herein, Licensor may
negotiate and enter into agreements with third parties pursuant to which it may
grant licenses to use the Licensed Mark in connection with the manufacture,
distribution and/or sale of Products in the Territory, only upon (i) Licensee
failing to provide timely and valid notice of its intent to renew this Agreement
by *, or providing notice of its intent not to renew, (ii) the commencement of
the * Annual Period of the Renewal Term, (iii) Licensee failing to timely cure a
material breach following notice by Licensor, or (iv) Licensee informing
Licensor that it will not cure such material breach. In the event Licensor
enters into such a third party agreement, the third party may not ship its
initial collection of Products prior to the expiration or termination of this
Agreement. Nothing herein shall be construed to prevent the Licensor Group or
any such licensee from showing such Products and accepting orders therefor prior
to the expiration or termination hereof.

     19.4. This Agreement shall be construed and interpreted in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in said State, contains the entire understanding and agreement between
the parties hereto with respect to the subject matter hereof, supersedes all
prior oral and written understandings and agreements relating thereto and may
not be modified, discharged or terminated, nor may any of the provisions hereof
be waived orally.

     19.5. Nothing herein shall be construed to constitute the parties hereto as
partners or as joint venturers, or either as agent of the other. Under no
circumstances shall Licensee hold itself out as an affiliate or subsidiary of
the Licensor Group or as being associated with the Licensor Group other than as
a duly authorized Licensee of the Licensed Mark. Licensee shall have no power to
obligate or bind Licensor in any manner.

     19.6. No waiver by a party, whether express or implied, of any provision
hereof, or of any breach or default thereof, shall constitute a continuing
waiver of such provision or of any other provision of this Agreement. Acceptance
of payments by Licensor shall not be deemed a waiver of any violation of or
default under any of the provisions hereof by Licensee.

     19.7. Licensor and Licensee represent and warrant to each other that it has
not dealt with any broker, finder or other person in connection with the
negotiation and execution of this Agreement. Each party agrees to and shall
indemnify and hold harmless the other from any and all losses, costs, damages,
and expenses arising out of or in connection with claims of any kind which
assert the inaccuracy or breach by the indemnitor of the above representation
and warranty, including, without limitation, attorneys' fees and court costs.

     19.8. Notwithstanding any other provision of this Agreement and except for
any monetary obligations due under this Agreement, any performance by Licensee
or Licensor under this Agreement shall be extended for the period of any delay
caused by an act of God or the public enemy, civil war, insurrection or riot,
fires, explosions, major

                                       34

accidents, governmental priorities, restrictions or allocations or strikes or
labor disputes, but in no event shall such extension be longer than One Hundred
Twenty (120) days. In any such event, the party affected thereby shall promptly
notify the other in writing of such affected party's inability to perform.

     19.9. During the Term and for a two (2) year period following the
termination or expiration of this Agreement, Licensor and Licensee each agrees
and represents that it shall not, directly or indirectly, solicit for employment
or employ on any basis whatsoever, any level employee of the other party who, in
such party's reasonable judgment, then holds a position requiring a material
level of responsibility, trust, training, experience or know-how.

     19.10. Neither Licensee nor Licensor shall, directly or indirectly, during
the Term or at any time thereafter, do or refrain from doing anything, by words,
actions or other communications: (i) in the case of Licensee, that may adversely
affect, or disparage the reputation, prestige, value, image or impression of the
Licensed Mark, Licensor, the Articles, the Licensor Group or any of the Licensor
Group's officers, directors, affiliates, personnel, products, brands, or related
companies, and (ii) in the case of Licensor that may adversely affect, or
disparage the reputation, prestige, value, image or impression of Licensee, the
Articles, the Licensee Group or any of the Licensee Group's officers, directors,
affiliates, personnel, products, brands, or related companies.

     19.11. (a) Licensor hereby represents and warrants to Licensee that: (i)
Kenneth Cole Productions (LIC) is a corporation duly organized, validly existing
and in good standing under the laws of the Bahamas; (ii) it is the owner of the
Licensed Mark in the Territory; (iii) it has all requisite power and authority
to execute and deliver this Agreement and to carry out the transactions
contemplated hereby; and (iv) the execution by Licensor of this Agreement and
the execution of the transactions contemplated hereby do not and shall not (1)
conflict with, result in a breach of the terms and conditions of, or constitute
a default under Licensor's articles of incorporation or bylaws, or any license,
agreement, contract, indenture or other instrument to which Licensor is now a
party or by which Licensor or its assets may be bound or affected, or (2) to the
best of Licensor's knowledge, violate any law, regulation or court order
applicable to Licensor. Licensor further represents and warrants that Licensee's
exercise of the rights granted hereunder, in accordance with the terms of this
Agreement, (x) will not violate or infringe upon the rights of any third party
or entity; (y) that there is no claim, suit, demand, or allegation pending, or
to Licensor's knowledge, threatened, alleging that the use of the Licensed Mark
infringes or otherwise violates the rights or any third party or entity; and (z)
that Licensor knows of no basis for any such claim, suit, demand, or allegation.

          (b) Licensee hereby represents and warrants to Licensor that: (i) it
is a corporation duly organized, validly existing and in good standing under the
laws of the State of New York; (ii) it has all requisite power and authority to
execute and deliver this Agreement and to carry out the transactions
contemplated hereby; and (iii) the execution by Licensee of this Agreement and
the execution of the transactions contemplated hereby do not and shall not (1)
conflict with, result in a breach of the terms and conditions of, or

                                       35

constitute a default under Licensee's articles of incorporation or bylaws, or
any license, agreement, contract, indenture or other instrument to which
Licensee is now a party or by which Licensee or its assets may be bound or
affected, or (2) to the best of Licensee's knowledge, violate any law,
regulation or court order applicable to Licensee.

     19.12 This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument. If this Agreement is executed in counterparts, no signatory
hereto shall be bound until all parties named below have duly executed or caused
to be duly executed a counterpart of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
the day and year first above written.

                                        KENNETH COLE PRODUCTIONS (LIC), INC.

                                        ----------------------------------------
                                        BY:
                                        ITS:

                                        BERNARD CHAUS, INC.

                                        ----------------------------------------
                                        BY:
                                        ITS:

                                       36

                                    EXHIBIT 1

                     BUSINESS PLAN AND MARKETING PLAN SAMPLE

I.   BUSINESS PLAN

     A.   SALES OBJECTIVES

          1.   PROJECTED VOLUMES
          2.   PROJECTED DOORS
          3.   DISTRIBUTION STRATEGIES
          4.   ANALYSIS OF PAST SEASON VOLUMES
          5.   DOOR PLAN DETAILING PROJECTED PRODUCT ASSORTMENT BY DOOR

     B.   ADVERTISING, MARKETING, PROMOTION AND PUBLIC RELATIONS OBJECTIVES

     C.   SHOP-IN-SHOPS

          1.   STRATEGIES
          2.   PROJECTED EXPENDITURES BY BRAND, CUSTOMER, DOOR

     D.   ORGANIZATIONAL STRUCTURE

     E.   LAUNCHES OF BRANDS, NEW CATEGORIES

     F.   ANALYSIS OF COMPETITION INCLUDING PRICING

     G.   QUALITY, SOURCING AND OPERATIONAL ISSUES

II.  MARKETING PLAN

     A.   STRATEGY, INCLUDING EXPENDITURES, BY BRAND AND TYPE OF ADVERTISING
          VEHICLES, MARKETING AND PUBLIC RELATIONS

     B.   LAUNCH ACTIVITIES

     C.   COLLATERAL SUPPORT

     D.   MEDIA PLAN

                                       37

          1.   ADVERTISING SCHEDULE BY BRAND FOR ALL PRINT MEDIA

          2.   RADIO AND TELEVISION, IF APPLICABLE

                                       38

                                    EXHIBIT 2

                       KENNETH COLE PRODUCT APPROVAL FORM

LICENSEE: ___________________________

PRODUCT CATEGORY: ___________________

STYLE/ REFERENCE NO: ________________   DATE: ________

LINE: KENNETH COLE NEW YORK _________   COLLECTION: ____________
      REACTION KENNETH COLE _________

CONCEPT APPROVAL SKETCH/ DESCRIPTION:

MATERIALS: ____________________________________
           ____________________________________
           ____________________________________

APPROVAL SIGNATURE: _________________   DATE: ________

FINAL SAMPLE APPROVAL: ______________   DATE: ________

PRODUCTION APPROVAL: ________________   DATE: ________

                                       39

                                    EXHIBIT 3

                    PRE-EXISTING BRANDS & CATEGORY PORTFOLIO

                                       40

                                    EXHIBIT 4
                       RETAIL ACCOUNT STORE APPROVAL FORM

RETAIL ACCOUNT APPROVAL FORM
TO BE SUBMITTED FOR EACH NEW ACCOUNT

APPROVED                  [ ]              NOT APPROVED  [ ]

--------------------------------------------------------------------------------

DATE SUBMITTED            ___________________________________

DISTRIBUTOR NAME          ______________________________________________________

STORE NAME                ______________________________________________________

BRAND                        KC [ ]        REACTION [ ]

STORE TYPE

Specialty                 [ ]
Department                [ ]
# of stores               [ ]

Address                   ______________________________________________________
Phone/ fax                ______________________________________________________
E-mail                    ______________________________________________________
Contact name              ______________________________________________________

Store markup              [ ]

Footwear brands carried     1 __________________________________________________
                            2 __________________________________________________
                            3 __________________________________________________
                            4 __________________________________________________
                            5 __________________________________________________
                            6 __________________________________________________

Please attach 3 photos showing: 1) store front 2) interior 3) area proposed for
KC

                                       41

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]