Item 1.01     Entry into a Material Definitive Agreement

Item 2.03     Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

          On August 12, 2011, the Kenneth Cole Productions, Inc. (the “Company”) entered into an asset-based credit facility (the “Facility”) with Wells Fargo Bank, National Association as administrative agent and certain banks named therein as lenders. Availability under the Facility is $50 million, which may be increased to $75 million at the election of the Company upon the satisfaction of certain conditions, but may not exceed a borrowing base equal to a percentage of the Company’s accounts receivable and inventory.

          The Facility terminates by its terms, and all amounts borrowed under the Facility shall be due and payable, on August 12, 2016. The Facility includes a $10 million sublimit for swing line loans and a $40 million aggregate sublimit for letters of credit. There are no loans outstanding under the Facility. Any amounts borrowed under the Facility would be expected to be used for working capital and other general corporate purposes. The Company also noted that in the Form 10-Q for the period ended June 30, 2011 filed with the Securities and Exchange Commission on August 5, 2011, the Company’s balance sheet included cash and cash equivalents in excess of $56 million.

          Revolving loans under the Facility may be base rate loans or LIBO rate loans, at the Company’s election. Base rate loans shall bear interest at a rate per annum equal to the highest of (a) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent (0.50%), (b) the Adjusted LIBO Rate plus one percent (1.00%), or (c) the rate of interest in effect for such day as publicly announced from time to time by Wells Fargo as its “prime rate” plus three quarters of one percent (0.75%). LIBO rate loans shall bear interest at the “adjusted LIBO rate”, plus one and three quarters of one percent (1.75%).

          The Facility is secured by substantially all the assets of the Company and its domestic subsidiaries except certain specified assets, principally the Company’s corporate headquarters. The security includes a pledge by the Company of its equity interest in each of its domestic subsidiaries.

          The Facility contains customary covenants and events of default for transactions of this type as detailed in the Credit Agreement attached hereto. Upon the occurrence of an event of default, the outstanding obligations under the Facility may be accelerated and become immediately due and payable.

          The foregoing description is a summary and is qualified in its entirety by the actual terms of the Credit Agreement itself, attached hereto as Exhibit 10.1, and incorporated by reference herein.

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