JONES APPAREL GROUP INC
EXHIBIT 10.2
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>exhibit10_2.htm
<DESCRIPTION>EXHIBIT 10.2
<TEXT>
<html>

<head>
<title>Exhibiti 10.2</title>
</head>

<body>

<p align="right"><b>EXHIBIT 10.2</b></p>
<p align="center">$700,000,000</p>
<p align="center"><b>THREE YEAR CREDIT AGREEMENT<br>
</b><br>
dated as of June 10, 2003,<br>
<br>
by and among<br>
<br>
<b>JONES APPAREL GROUP USA, INC.,</b><br>
<br>
the Additional Obligors referred to herein,<br>
<br>
the Lenders referred to herein,<br>
<br>
<b>J.P. MORGAN SECURITIES INC.</b> and <b>CITIGROUP GLOBAL MARKETS INC.,</b><br>
as Joint Lead Arrangers<br>
and Joint Bookrunners,<br>
<br>
<b>WACHOVIA BANK, NATIONAL ASSOCIATION,</b><br>
as Administrative Agent,<br>
and<br>
<br>
<b>JPMORGAN CHASE BANK</b> and <b>CITIBANK, N.A.,</b><br>
as Syndication Agents,<br>
and<br>
<br>
<b>FLEET NATIONAL BANK</b> and <b>BANK OF AMERICA, N.A.,</b><br>
as Documentation Agents</p>
<hr noshade size="1" color="#000000">
<p align="center"><b>TABLE OF CONTENTS</b></p>
<div align="center">
  <center>
  <table border="0" cellpadding="5" cellspacing="0" width="100%">
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom"></td>
      <td width="10%" align="center" valign="bottom"><b>Page</b></td>
    </tr>
    <tr>
      <td width="90%" colspan="2" valign="bottom">ARTICLE I DEFINITIONS</td>
      <td width="10%" align="center" valign="bottom">1</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 1.1. Definitions</td>
      <td width="10%" align="center" valign="bottom">1</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 1.2. General</td>
      <td width="10%" align="center" valign="bottom">14</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 1.3. Other Definitions and
        Provisions</td>
      <td width="10%" align="center" valign="bottom">14</td>
    </tr>
    <tr>
      <td width="90%" colspan="2" valign="bottom">ARTICLE II REVOLVING CREDIT
        FACILITY</td>
      <td width="10%" align="center" valign="bottom">15</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 2.1. Revolving Credit Loans</td>
      <td width="10%" align="center" valign="bottom">15</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 2.2. Procedure for Advances of
        Revolving Credit Loans</td>
      <td width="10%" align="center" valign="bottom">15</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 2.3. Repayment of Revolving Credit
        Loans</td>
      <td width="10%" align="center" valign="bottom">16</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 2.4. Evidence of Debt</td>
      <td width="10%" align="center" valign="bottom">16</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 2.5. Permanent Reduction of the
        Revolving Credit Commitment</td>
      <td width="10%" align="center" valign="bottom">17</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 2.6. Termination of Revolving
        Credit Facility</td>
      <td width="10%" align="center" valign="bottom">17</td>
    </tr>
    <tr>
      <td width="90%" colspan="2" valign="bottom">ARTICLE III LETTER OF CREDIT
        FACILITY</td>
      <td width="10%" align="center" valign="bottom">17</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 3.1. L/C Commitment</td>
      <td width="10%" align="center" valign="bottom">17</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 3.2. Procedure for Issuance of
        Letters of Credit</td>
      <td width="10%" align="center" valign="bottom">18</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 3.3. Fees and Other Charges</td>
      <td width="10%" align="center" valign="bottom">18</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 3.4. L/C Participations</td>
      <td width="10%" align="center" valign="bottom">19</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 3.5. Reimbursement</td>
      <td width="10%" align="center" valign="bottom">20</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 3.6. Obligations Absolute</td>
      <td width="10%" align="center" valign="bottom">20</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 3.7 Effect of Application</td>
      <td width="10%" align="center" valign="bottom">21</td>
    </tr>
    <tr>
      <td width="90%" colspan="2" valign="bottom">ARTICLE IV [RESERVED]</td>
      <td width="10%" align="center" valign="bottom">21</td>
    </tr>
    <tr>
      <td width="90%" colspan="2" valign="bottom">ARTICLE V GENERAL LOAN
        PROVISIONS</td>
      <td width="10%" align="center" valign="bottom">21</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 5.1. Interest</td>
      <td width="10%" align="center" valign="bottom">21</td>
    </tr>
    <tr>
      <td width="10%" valign="bottom"></td>
      <td width="80%" valign="bottom">SECTION 5.2. Notice and Manner of
        Conversion or Continuation of Revolving Credit Loans</td>
      <td width="10%" align="center" valign="bottom">23</td>
    </tr>
  </table>
  </center>
</div>
<p align="center">i</p>
<hr noshade size="1" color="#000000">
<table border="0" cellpadding="5" cellspacing="0" width="100%">
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 5.3. Fees</td>
    <td width="10%" align="center" valign="bottom">23</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 5.4. Manner of Payment</td>
    <td width="10%" align="center" valign="bottom">24</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 5.5. Crediting of Payments and
      Proceeds</td>
    <td width="10%" align="center" valign="bottom">24</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 5.6. Adjustments</td>
    <td width="10%" align="center" valign="bottom">24</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 5.7. Nature of Obligations of
      Lenders Regarding Extensions of Credit; Assumption by the Administrative
      Agent</td>
    <td width="10%" align="center" valign="bottom">25</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 5.8. Joint and Several Liability of
      the Credit Parties</td>
    <td width="10%" align="center" valign="bottom">25</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 5.9. Changed Circumstances</td>
    <td width="10%" align="center" valign="bottom">27</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 5.10. Indemnity</td>
    <td width="10%" align="center" valign="bottom">29</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 5.11. Capital Requirements</td>
    <td width="10%" align="center" valign="bottom">30</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 5.12. Taxes</td>
    <td width="10%" align="center" valign="bottom">30</td>
  </tr>
  <tr>
    <td width="90%" colspan="2" valign="bottom">ARTICLE VI CLOSING; CONDITIONS
      OF CLOSING AND BORROWING</td>
    <td width="10%" align="center" valign="bottom">32</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 6.1. Closing</td>
    <td width="10%" align="center" valign="bottom">32</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 6.2. Conditions to Closing and
      Initial Revolving Credit Loans and Letters of Credit</td>
    <td width="10%" align="center" valign="bottom">32</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 6.3. Conditions to All Extensions of
      Credit</td>
    <td width="10%" align="center" valign="bottom">34</td>
  </tr>
  <tr>
    <td width="90%" colspan="2" valign="bottom">ARTICLE VII REPRESENTATIONS AND
      WARRANTIES OF THE CREDIT PARTIES</td>
    <td width="10%" align="center" valign="bottom">35</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 7.1. Representations and Warranties</td>
    <td width="10%" align="center" valign="bottom">35</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 7.2. Survival of Representations and
      Warranties, Etc.</td>
    <td width="10%" align="center" valign="bottom">40</td>
  </tr>
  <tr>
    <td width="90%" colspan="2" valign="bottom">ARTICLE VIII FINANCIAL
      INFORMATION AND NOTICES</td>
    <td width="10%" align="center" valign="bottom">40</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 8.1. Financial Statements and
      Projections</td>
    <td width="10%" align="center" valign="bottom">40</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 8.2. Officer's Compliance
      Certificate</td>
    <td width="10%" align="center" valign="bottom">41</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 8.3. Accountants' Certificate</td>
    <td width="10%" align="center" valign="bottom">41</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 8.4. Other Reports</td>
    <td width="10%" align="center" valign="bottom">41</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 8.5. Notice of Litigation and Other
      Matters</td>
    <td width="10%" align="center" valign="bottom">41</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 8.6. Accuracy of Information</td>
    <td width="10%" align="center" valign="bottom">42</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE IX AFFIRMATIVE COVENANTS</td>
    <td width="10%" align="center">42</td>
  </tr>
</table>
<p align="center">ii</p>
<hr noshade size="1" color="#000000">
<table border="0" cellpadding="5" cellspacing="0" width="100%">
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 9.1. Preservation of Corporate
      Existence and Related Matters</td>
    <td width="10%" align="center" valign="bottom">42</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 9.2. Maintenance of Property</td>
    <td width="10%" align="center" valign="bottom">42</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 9.3. Insurance</td>
    <td width="10%" align="center" valign="bottom">42</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 9.4. Accounting Methods and
      Financial Records</td>
    <td width="10%" align="center" valign="bottom">43</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 9.5. Payment and Performance of
      Obligations</td>
    <td width="10%" align="center" valign="bottom">43</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 9.6. Compliance With Laws and
      Approvals</td>
    <td width="10%" align="center" valign="bottom">43</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 9.7. Environmental Laws</td>
    <td width="10%" align="center" valign="bottom">43</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 9.8. Compliance with ERISA</td>
    <td width="10%" align="center" valign="bottom">44</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 9.9. Conduct of Business</td>
    <td width="10%" align="center" valign="bottom">44</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 9.10. Visits and Inspections</td>
    <td width="10%" align="center" valign="bottom">44</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 9.11. Use of Proceeds</td>
    <td width="10%" align="center" valign="bottom">44</td>
  </tr>
  <tr>
    <td width="90%" colspan="2" valign="bottom">ARTICLE X FINANCIAL COVENANTS</td>
    <td width="10%" align="center" valign="bottom">44</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 10.01. Interest Coverage Ratio</td>
    <td width="10%" align="center" valign="bottom">44</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 10.02. Minimum Net Worth</td>
    <td width="10%" align="center" valign="bottom">44</td>
  </tr>
  <tr>
    <td width="90%" colspan="2" valign="bottom">ARTICLE XI NEGATIVE COVENANTS</td>
    <td width="10%" align="center" valign="bottom">44</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 11.1. Limitations on Debt and
      Guaranty Obligations</td>
    <td width="10%" align="center" valign="bottom">45</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 11.2. [Reserved].</td>
    <td width="10%" align="center" valign="bottom">46</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 11.3. Limitations on Liens</td>
    <td width="10%" align="center" valign="bottom">46</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 11.4. Limitations on Loans,
      Advances, Investments and Acquisitions.</td>
    <td width="10%" align="center" valign="bottom">48</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 11.5. Limitations on Mergers and
      Liquidation</td>
    <td width="10%" align="center" valign="bottom">49</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 11.6. Limitations on Sale or
      Transfer of Assets.</td>
    <td width="10%" align="center" valign="bottom">49</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 11.7. Limitations on Dividends and
      Distributions</td>
    <td width="10%" align="center" valign="bottom">51</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 11.8. Transactions with Affiliates</td>
    <td width="10%" align="center" valign="bottom">51</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 11.9. Changes in Fiscal Year End</td>
    <td width="10%" align="center" valign="bottom">51</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 11.10. Amendments; Payments and
      Prepayments of Material Debt and Subordinated Debt</td>
    <td width="10%" align="center" valign="bottom">51</td>
  </tr>
  <tr>
    <td width="90%" colspan="2" valign="bottom">ARTICLE XII DEFAULT AND REMEDIES</td>
    <td width="10%" align="center" valign="bottom">51</td>
  </tr>
</table>
<p align="center">iii</p>
<hr noshade size="1" color="#000000">
<table border="0" cellpadding="5" cellspacing="0" width="100%">
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 12.1. Events of Default</td>
    <td width="10%" align="center" valign="bottom">51</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 12.2. Remedies</td>
    <td width="10%" align="center" valign="bottom">53</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 12.3. Rights and Remedies
      Cumulative; Non-Waiver; Etc.</td>
    <td width="10%" align="center" valign="bottom">54</td>
  </tr>
  <tr>
    <td width="90%" valign="bottom" colspan="2">ARTICLE XIII THE ADMINISTRATIVE
      AGENT</td>
    <td width="10%" align="center" valign="bottom">54</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 13.1. Appointment </td>
    <td width="10%" align="center" valign="bottom">54</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 13.2. Delegation of Duties</td>
    <td width="10%" align="center" valign="bottom">55</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 13.3. Exculpatory Provisions</td>
    <td width="10%" align="center" valign="bottom">55</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 13.4. Reliance by the Administrative
      Agent</td>
    <td width="10%" align="center" valign="bottom">55</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 13.5. Notice of Default</td>
    <td width="10%" align="center" valign="bottom">56</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 13.6. Non-Reliance on the
      Administrative Agent and Other Lenders</td>
    <td width="10%" align="center" valign="bottom">56</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 13.7. Indemnification</td>
    <td width="10%" align="center" valign="bottom">56</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 13.8. The Administrative Agent in
      Its Individual Capacity</td>
    <td width="10%" align="center" valign="bottom">57</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 13.9. Resignation of the
      Administrative Agent; Successor Administrative Agent</td>
    <td width="10%" align="center" valign="bottom">57</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 13.10. Syndication and Documentation
      Agents</td>
    <td width="10%" align="center" valign="bottom">57</td>
  </tr>
  <tr>
    <td width="90%" valign="bottom" colspan="2">ARTICLE XIV MISCELLANEOUS</td>
    <td width="10%" align="center" valign="bottom">57</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.1. Notices </td>
    <td width="10%" align="center" valign="bottom">58</td>
  </tr>
</table>
<p align="center">iv</p>
<hr noshade size="1" color="#000000">
<table border="0" cellpadding="5" cellspacing="0" width="100%">
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.2. Expenses; Indemnity</td>
    <td width="10%" align="center" valign="bottom">59</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.3. Set-off </td>
    <td width="10%" align="center" valign="bottom">59</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.4. Governing Law</td>
    <td width="10%" align="center" valign="bottom">59</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.5. Consent to Jurisdiction</td>
    <td width="10%" align="center" valign="bottom">59</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.6. Waiver of Jury Trial</td>
    <td width="10%" align="center" valign="bottom">60</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.7. Reversal of Payments</td>
    <td width="10%" align="center" valign="bottom">60</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.8. Injunctive Relief; Punitive
      Damages</td>
    <td width="10%" align="center" valign="bottom">60</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.9. Accounting Matters</td>
    <td width="10%" align="center" valign="bottom">60</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.10. Successors and Assigns;
      Participations</td>
    <td width="10%" align="center" valign="bottom">61</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.11. Amendments, Waivers and
      Consents</td>
    <td width="10%" align="center" valign="bottom">65</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.12. Performance of Duties</td>
    <td width="10%" align="center" valign="bottom">66</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.13. All Powers Coupled with
      Interest</td>
    <td width="10%" align="center" valign="bottom">66</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.14. Survival of Indemnities</td>
    <td width="10%" align="center" valign="bottom">66</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.15. Titles and Captions</td>
    <td width="10%" align="center" valign="bottom">66</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.16. Severability of Provisions</td>
    <td width="10%" align="center" valign="bottom">66</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.17. Counterparts</td>
    <td width="10%" align="center" valign="bottom">66</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.18. Term of Agreement</td>
    <td width="10%" align="center" valign="bottom">66</td>
  </tr>
  <tr>
    <td width="10%" valign="bottom"></td>
    <td width="80%" valign="bottom">SECTION 14.19. Inconsistencies with Other
      Documents; Independent Effect of Covenants</td>
    <td width="10%" align="center" valign="bottom">66</td>
  </tr>
</table>
<p><u>Exhibits</u></p>
<div align="center">
  <center>
  <table border="0" cellpadding="0" cellspacing="0" width="100%">
    <tr>
      <td width="20%">Exhibit A</td>
      <td width="4%">-</td>
      <td width="76%">Form of Revolving Credit Note</td>
    </tr>
    <tr>
      <td width="20%">Exhibit B</td>
      <td width="4%">-</td>
      <td width="76%">Form of Notice of Revolving Credit Borrowing</td>
    </tr>
    <tr>
      <td width="20%">Exhibit C</td>
      <td width="4%">-</td>
      <td width="76%">Form of Notice of Account Designation</td>
    </tr>
    <tr>
      <td width="20%">Exhibit D</td>
      <td width="4%">-</td>
      <td width="76%">Form of Notice of Prepayment</td>
    </tr>
    <tr>
      <td width="20%">Exhibit E </td>
      <td width="4%">-</td>
      <td width="76%">Form of Notice of Conversion/Continuation</td>
    </tr>
    <tr>
      <td width="20%">Exhibit F</td>
      <td width="4%">-</td>
      <td width="76%">Form of Officer's Compliance Certificate</td>
    </tr>
    <tr>
      <td width="20%">Exhibit G</td>
      <td width="4%">-</td>
      <td width="76%">Form of Assignment and Acceptance</td>
    </tr>
  </table>
  </center>
</div>
<p><u>Schedules</u></p>
<table border="0" cellpadding="0" cellspacing="0" width="100%">
  <tr>
    <td width="20%">Schedule 1.1(a)</td>
    <td width="4%">-</td>
    <td width="76%">Lenders and Revolving Credit Commitments</td>
  </tr>
  <tr>
    <td width="20%">Schedule 1.1(b)</td>
    <td width="4%">-</td>
    <td width="76%">Outstanding Letters of Credit</td>
  </tr>
  <tr>
    <td width="20%">Schedule 7.1(b)</td>
    <td width="4%">-</td>
    <td width="76%">Subsidiaries and Capitalization</td>
  </tr>
  <tr>
    <td width="20%">Schedule 7.1(g)</td>
    <td width="4%">-</td>
    <td width="76%">Disclosed Litigation</td>
  </tr>
  <tr>
    <td width="20%">Schedule 7.1(n)</td>
    <td width="4%">-</td>
    <td width="76%">Material Adverse Change</td>
  </tr>
  <tr>
    <td width="20%">Schedule 7.1(p)</td>
    <td width="4%">-</td>
    <td width="76%">Debt and Guaranty Obligations</td>
  </tr>
  <tr>
    <td width="20%">Schedule 7.1(q)</td>
    <td width="4%">-</td>
    <td width="76%">Litigation</td>
  </tr>
  <tr>
    <td width="20%">Schedule 11.3</td>
    <td width="4%">-</td>
    <td width="76%">Existing Liens</td>
  </tr>
  <tr>
    <td width="20%">Schedule 11.4</td>
    <td width="4%">-</td>
    <td width="76%">Existing Loans, Advances and Investments</td>
  </tr>
</table>
<p align="center">v</p>
<hr noshade size="1" color="#000000">
<p align="center">THREE YEAR CREDIT AGREEMENT</p>
<p align="center">Dated as of June 10, 2003</p>
<p align="left">&nbsp;&nbsp;&nbsp; JONES APPAREL GROUP USA, INC., a Pennsylvania
corporation, the Additional Obligors (as defined below), the Lenders who are or
may become a party to this Agreement, J.P. MORGAN SECURITIES INC. and CITIGROUP
GLOBAL MARKETS INC., as Joint Lead Arrangers and Joint Bookrunners, WACHOVIA
BANK, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders, JPMORGAN
CHASE BANK and CITIBANK, N.A., as Syndication Agents, and FLEET NATIONAL BANK
and BANK OF AMERICA, N.A., as Documentation Agents, agree as follows:</p>
<p align="left"><b>ARTICLE I DEFINITIONS</b></p>
<p align="left">SECTION 1.1. <u>Definitions.</u> The following terms when used
in this Agreement shall have the meanings assigned to them below:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Additional Debt Securitie</u>s&quot;
  shall have the meaning set forth in Section 11.1(f).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Additional Obligors</u>&quot;
  means the collective reference to Jones Apparel Group, Jones Apparel Group
  Holdings and Nine West Footwear in their capacities as co-obligors under this
  Agreement.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Administrative Agent</u>&quot;
  means Wachovia in its capacity as Administrative Agent hereunder, and any
  successor thereto appointed pursuant to Section 13.9.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Administrative Agent's Office</u>&quot;
  means the office of the Administrative Agent specified in or determined in
  accordance with the provisions of Section 14.1(c).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Affiliate</u>&quot; means, with
  respect to any Person, any other Person (other than a Subsidiary) which
  directly or indirectly through one or more intermediaries, controls, or is
  controlled by, or is under common control with, such first Person or any of
  its Subsidiaries. The term &quot;<u>control</u>&quot; means the possession,
  directly or indirectly, of the power to direct or cause the direction of the
  management and policies of a Person, whether through ownership of voting
  securities, by contract or otherwise.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Agreement</u>&quot; means this
  Three Year Credit Agreement, as amended, restated, supplemented or otherwise
  modified.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Alternative Currency</u>&quot;
  means (i) Pounds Sterling, (ii) the euro or (iii) any other lawful currency
  (other than Dollars) acceptable to the Issuing Lenders which, in the case of
  this clause (iii), is freely transferable and convertible into Dollars in the
  United States currency market and is freely available to all Issuing Lenders
  in the London interbank deposit market.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Alternative Currency L/C
  Commitment</u>&quot; means the lesser of (a) One Hundred Million Dollars
  ($100,000,000) and (b) the L/C Commitment.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Applicable Law</u>&quot; means all
  applicable provisions of constitutions, laws, statutes, ordinances, rules,
  treaties, regulations, permits, licenses, approvals, interpretations and</p>
</blockquote>
<hr noshade size="1" color="#000000">
<blockquote>
  <p>orders of courts or Governmental Authorities and all orders and decrees of
  all courts and arbitrators.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Applicable Margin</u>&quot; means, for purposes
  of calculating (a) the Base Rate and LIBOR Rate for purposes of Section
  5.1(a), (b) the L/C Fee for purposes of Section 3.3(a) or (c) the Facility Fee
  for purposes of Section 5.3(a), the corresponding rate set forth below for the
  applicable rating of the senior, unsecured, long-term debt of the Credit
  Parties, on a collective basis (the &quot;<u>Debt Rating</u>&quot;) publicly
  announced by Standard &amp; Poor's Ratings Group, a division of The
  McGraw-Hill Companies (&quot;<u>S&amp;P</u>&quot;), and Moody's Investors
  Service, Inc. (&quot;<u>Moody's</u>&quot;) as follows:</p>
</blockquote>
<div align="center">
  <center>
  <table border="0" cellpadding="2" cellspacing="0" width="100%">
    <tr>
      <td width="12%" align="center"></td>
      <td width="12%" align="center"></td>
      <td width="12%" align="center"></td>
      <td width="64%" colspan="5" align="center">Applicable Margin Per Annum
        <hr noshade size="1" color="#000000">
      </td>
    </tr>
    <tr>
      <td width="12%" align="center">Level</td>
      <td width="12%" align="center">S&amp;P<br>
        Rating</td>
      <td width="12%" align="center">Moody's<br>
        Rating</td>
      <td width="12%" align="center">LIBOR<br>
        Rate</td>
      <td width="13%" align="center">Base<br>
        Rate</td>
      <td width="13%" align="center">Trade<br>
        L/C Fee</td>
      <td width="13%" align="center">Standby<br>
        L/C Fee</td>
      <td width="13%" align="center">Facility<br>
        Fee</td>
    </tr>
    <tr>
      <td width="12%" align="center">I</td>
      <td width="12%" align="center">&gt;=A-</td>
      <td width="12%" align="center">&gt;=A3</td>
      <td width="12%" align="center">0.325%</td>
      <td width="13%" align="center">0.000%</td>
      <td width="13%" align="center">0.150%</td>
      <td width="13%" align="center">0.325%</td>
      <td width="13%" align="center">0.125%</td>
    </tr>
    <tr>
      <td width="12%" align="center">II</td>
      <td width="12%" align="center">&gt;=BBB+</td>
      <td width="12%" align="center">&gt;=Baa1</td>
      <td width="12%" align="center">0.475%</td>
      <td width="13%" align="center">0.000%</td>
      <td width="13%" align="center">0.200%</td>
      <td width="13%" align="center">0.475%</td>
      <td width="13%" align="center">0.150%</td>
    </tr>
    <tr>
      <td width="12%" align="center">III</td>
      <td width="12%" align="center">&gt;=BBB</td>
      <td width="12%" align="center">&gt;=Baa2</td>
      <td width="12%" align="center">0.550%</td>
      <td width="13%" align="center">0.000%</td>
      <td width="13%" align="center">0.250%</td>
      <td width="13%" align="center">0.550% </td>
      <td width="13%" align="center">0.200%</td>
    </tr>
    <tr>
      <td width="12%" align="center">IV</td>
      <td width="12%" align="center">&gt;=BBB-</td>
      <td width="12%" align="center">&gt;=Baa3</td>
      <td width="12%" align="center">0.750%</td>
      <td width="13%" align="center">0.000%</td>
      <td width="13%" align="center">0.300%</td>
      <td width="13%" align="center">0.750%</td>
      <td width="13%" align="center">0.250%</td>
    </tr>
    <tr>
      <td width="12%" align="center">V</td>
      <td width="12%" align="center">&lt;=BB+</td>
      <td width="12%" align="center">&lt;=Ba1</td>
      <td width="12%" align="center">1.075%</td>
      <td width="13%" align="center">0.000%</td>
      <td width="13%" align="center">0.350%</td>
      <td width="13%" align="center">1.075%</td>
      <td width="13%" align="center">0.300%</td>
    </tr>
  </table>
  </center>
</div>
<blockquote>
  <p><br>
  provided, that if both Moody's and S&amp;P shall not have in effect a Debt
  Rating (other than by reason of the circumstances referred to in the last
  sentence of this definition), then such Debt Rating shall be deemed to be
  Level V. In the event that the corresponding Debt Ratings publicly announced
  by S&amp;P and Moody's listed above differ by (a) one pricing level, the
  Applicable Margin shall be based on the higher of the two ratings, and (b) two
  or more pricing levels, the Applicable Margin shall be based on the rating one
  rating below the higher of the two ratings. Any change in the Applicable
  Margin shall be effective as of the Business Day on which the applicable
  rating is announced or is publicly available. If the rating system of S&amp;P
  and Moody's shall change, or if both of such rating agencies shall cease to be
  in the business of rating corporate debt obligations, the Borrower and the
  Lenders shall negotiate in good faith to amend this definition to reflect such
  changed rating system or the unavailability of ratings from such rating
  agencies and, pending the effectiveness of any such amendment, the Applicable
  Margin shall be determined by reference to the rating most recently in effect
  prior to such change or cessation.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Application</u>&quot; means an application, in
  the form specified by any Issuing Lender from time to time, requesting such
  Issuing Lender to issue a Letter of Credit.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Assignment and Acceptance</u>&quot; shall have
  the meaning assigned thereto in Section 14.10.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Base Rate</u>&quot; means, at any time, the
  higher of (a) the Prime Rate and (b) the sum of (i) the Federal Funds Rate
  plus (ii) 1/2 of 1%; each change in the Base Rate shall take</p>
</blockquote>
<p align="center">2</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p>effect simultaneously with the corresponding change or changes in the Prime
  Rate or the Federal Funds Rate.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Base Rate Loan</u>&quot; means any Revolving
  Credit Loan bearing interest at a rate based upon the Base Rate as provided in
  Section 5.1(a).</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Borrower</u>&quot; means Jones Apparel Group
  USA, Inc.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Business Day</u>&quot; means (a) any day other
  than a Saturday, Sunday or legal holiday on which banks in Charlotte, North
  Carolina, Philadelphia, Pennsylvania and New York, New York, are not
  authorized or required by law to remain closed for the conduct of their
  commercial banking business, (b) with respect to all notices and
  determinations in connection with, and payments of principal and interest on,
  any LIBOR Rate Loan, the term &quot;<u>Business Day</u>&quot; shall also
  exclude any day on which banks are not open for trading in Dollar deposits in
  the London interbank market, and (c) with respect to all notices and
  determinations in connection with, and payment of principal and interest on,
  any L/C Obligation denominated in an Alternative Currency; the term &quot;<u>Business
  Day</u>&quot; shall also exclude any day on which banks in London do not
  provide quotations for deposits denominated in such Alternative Currency.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Capital Lease</u>&quot; means, with respect to
  the Credit Parties and their Subsidiaries, any lease of any property that
  should, in accordance with GAAP, be classified and accounted for as a capital
  lease on a Consolidated balance sheet of the Credit Parties and their
  Subsidiaries.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Change in Control</u>&quot; shall have the
  meaning assigned thereto in Section 12.1(h).</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Closing Date</u>&quot; means the date of this
  Agreement or such later Business Day upon which each condition described in
  Section 6.2 shall be satisfied or waived in all respects.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Code</u>&quot; means the Internal Revenue Code
  of 1986, and the rules and regulations thereunder, each as amended,
  supplemented or otherwise modified from time to time.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Consolidated</u>&quot; means, when used with
  reference to financial statements or financial statement items of the Credit
  Parties and their Subsidiaries, such statements or items on a consolidated
  basis in accordance with applicable principles of consolidation under GAAP.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Correspondent</u>&quot; means any financial
  institution designated by an Issuing Lender to act as such Issuing Lender's
  correspondent hereunder with respect to the distribution and payment of
  Letters of Credit denominated in an Alternative Currency.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Credit Facility</u>&quot; means the collective
  reference to the Revolving Credit Facility and the L/C Facility.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Credit Parties</u>&quot; means each of the
  Additional Obligors and the Borrower.</p>
  <p>&nbsp;&nbsp;&nbsp; &quot;<u>Debt</u>&quot; means, with respect to the
  Credit Parties and their Subsidiaries at any date and without duplication, the
  sum of the following calculated in accordance with GAAP: (a) all liabilities,
  obligations and indebtedness, in each case for borrowed money</p>
</blockquote>
<p align="center">3</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">including but not limited to obligations evidenced by bonds,
  debentures, notes or other similar instruments of any such Person, (b) all
  obligations to pay the deferred purchase price of property or services of any
  such Person, except trade payables arising in the ordinary course of business,
  (c) all obligations of any such Person as lessee under Capital Leases, (d) all
  Debt of any other Person secured by a Lien on any asset of any such Person,
  (e) all Guaranty Obligations of any such Person, (f) all obligations,
  contingent or otherwise, of any such Person relative to the amount of drawn
  letters of credit not reimbursed as required by the terms thereof, including
  without limitation any Reimbursement Obligation not reimbursed as required by
  the terms hereof, and banker's acceptances issued for the account of any such
  Person, and (g) all net obligations incurred by any such Person pursuant to
  Hedging Agreements.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Default</u>&quot; means any of the
  events specified in Section 12.1 which with the passage of time, the giving of
  notice or any other condition, would constitute an Event of Default.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Dollar Amount</u>&quot; shall mean
  (a) with regard to any Obligation denominated in Dollars, the amount thereof
  and (b) with regard to any Obligation denominated in an Alternative Currency,
  the amount of Dollars which is equivalent to the sum of (i) the amount so
  expressed in an Alternative Currency at the applicable-quoted spot rate on the
  appropriate page of the Reuter's Screen as determined by the Administrative
  Agent at the relevant time; plus (ii) any amounts owed by the Borrower
  pursuant to Section 3.5(b).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Dollars</u>&quot; or &quot;<u>$</u>&quot;
  means, unless otherwise qualified, dollars in lawful currency of the United
  States.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>EBITDAR</u>&quot; means, with
  respect to the Credit Parties and their Subsidiaries on a Consolidated basis
  for any period, the sum of (a) Net Income for such period, plus (b) the sum of
  the following to the extent deducted in the determination of Net Income: (i)
  income and franchise taxes, (ii) Interest Expense, (iii) amortization,
  depreciation, extraordinary non-cash losses and any other non-cash charges
  (including amortization or write-off of goodwill, transaction expenses,
  covenants not to compete and other intangible assets, and non-cash charges
  resulting from purchase accounting related to any acquisition otherwise
  permitted pursuant to the terms of this Agreement) and (iv) Rental Expense
  less (c) any items of extraordinary gain which were included in determining
  Net Income.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Eligible Assignee</u>&quot; means,
  with respect to any assignment of the rights, interest and obligations of a
  Lender hereunder, a Person that is at the time of such assignment (a) a
  commercial bank organized under the laws of the United States or any state
  thereof, having combined capital and surplus in excess of $500,000,000, (b) a
  commercial bank organized under the laws of any other country that is a member
  of the Organization of Economic Cooperation and Development, or a political
  subdivision of any such country, having combined capital and surplus in excess
  of $500,000,000, (c) a finance company, insurance company or other financial
  institution which in the ordinary course of business extends credit of the
  type extended hereunder and that has total assets in excess of $1,000,000,000,
  (d) already a Lender hereunder (whether as an original party to this Agreement
  or as the assignee of another Lender) or an Affiliate of a Lender hereunder,
  (e) the successor (whether by transfer of assets, merger or otherwise) to all
  or substantially all of the commercial lending business of the assigning
  Lender, (f) any SPC solely to the extent permitted by Section 14.10(h), or (g)
  any other Person that has been</p>
</blockquote>
<p align="center">4</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">approved in writing as an Eligible Assignee by the Borrower
  and the Administrative Agent.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Employee Benefit Plan</u>&quot;
  means any employee benefit plan within the meaning of Section 3(3) of ERISA
  which (a) is maintained for employees of the Borrower or any ERISA Affiliate
  or (b) has at any time within the preceding six (6) years been maintained for
  the employees of the Borrower or any current or former ERISA Affiliate.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>EMU</u>&quot; mean economic and
  monetary union as contemplated in the Treaty on European Union.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Environmental Laws</u>&quot; means
  any and all federal, state and local laws, statutes, ordinances, rules,
  regulations, permits, licenses, approvals, binding interpretations and orders
  of courts or Governmental Authorities, relating to the protection of human
  health or the environment, including, but not limited to, requirements
  pertaining to the manufacture, processing, distribution, use, treatment,
  storage, disposal, transportation, handling, reporting, licensing, permitting,
  investigation or remediation of Hazardous Materials.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>ERISA</u>&quot; means the Employee
  Retirement Income Security Act of 1974, and the rules and regulations
  thereunder, each as amended, supplemented or otherwise modified from time to
  time.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>ERISA Affiliate</u>&quot; means
  any Person who together with the Borrower is treated as a single employer
  within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section
  4001(b) of ERISA.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>euro</u>&quot; means the lawful
  currency of the European Union as constituted by the Treaty of Rome which
  established the European Community, as such treaty may be amended from time to
  time and as referred to in the EMU legislation.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Eurodollar Reserve Percentage</u>&quot;
  means, for any day, the percentage (expressed as a decimal and rounded
  upwards, if necessary, to the next higher 1/100th of 1%) which is in effect
  for such day as prescribed by the Federal Reserve Board (or any successor) for
  determining the maximum reserve requirement (including without limitation any
  basic, supplemental or emergency reserves) in respect of eurocurrency
  liabilities or any similar category of liabilities for a member bank of the
  Federal Reserve System in New York City.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Event of Default</u>&quot; means
  any of the events specified in Section 12.1, provided that any requirement for
  passage of time, giving of notice, or any other condition, has been satisfied.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Existing Debt Securities</u>&quot;
  means the 7.50% Senior Notes due 2004, the 8 3/8% Series B Senior Notes due
  2005, the 7.875% Senior Notes due 2006 and the Zero Coupon Convertible Senior
  Notes due 2021 of Jones Apparel Group.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Existing Loans</u>&quot; shall
  have the meaning assigned thereto in Section 6.2(f).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Extensions of Credit</u>&quot;
  means, as to any Lender at any time, (a) an amount equal to the sum of (i) the
  aggregate principal amount of all Revolving Credit Loans made by</p>
</blockquote>
<p align="center">5</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">such Lender then outstanding, and (ii) such Lender's Revolving
  Credit Commitment Percentage of the Dollar Amount of the L/C Obligations then
  outstanding, or (b) the making of any loan or participation in any Letter of
  Credit by such Lender, as the context requires.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Facility Fee</u>&quot; shall have
  the meaning assigned thereto in Section 5.3(a).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>FDIC</u>&quot; means the Federal
  Deposit Insurance Corporation, or any successor thereto.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Federal Funds Rate</u>&quot;
  means, the rate per annum (rounded upwards, if necessary, to the next higher
  1/100th of 1%) representing the daily effective federal funds rate as quoted
  by the Administrative Agent and confirmed in Federal Reserve Board Statistical
  Release H.15 (519) or any successor or substitute publication selected by the
  Administrative Agent. If, for any reason, such rate is not available, then
  &quot;<u>Federal Funds Rate</u>&quot; shall mean a daily rate which is
  determined, in the opinion of the Administrative Agent, to be the rate at
  which federal funds are being offered for sale in the national federal funds
  market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be
  the same as the rate for the most immediate preceding Business Day.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Fiscal Year</u>&quot; means the
  fiscal year of the Credit Parties and their Subsidiaries ending on December
  31.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Five-Year Credit Agreement</u>&quot;
  means the Five-Year Credit Agreement dated as of June 15, 1999 by and among
  the Borrower, the Additional Obligors, the Administrative Agent and the
  financial institutions party thereto, as amended, restated, supplemented or
  otherwise modified from time to time.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Five-Year Credit Agreement
  Obligations</u>&quot; means the obligations of the Borrower and the Additional
  Obligors under the Five-Year Credit Agreement.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Foreign Lender</u>&quot; means any
  Lender that is organized under the laws of a jurisdiction other than that in
  which the Borrower is located. For purposes of this definition, the United
  States of America, each state thereof and the District of Columbia shall be
  deemed to constitute a single jurisdiction.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>GAAP</u>&quot; means generally
  accepted accounting principles, as recognized by the American Institute of
  Certified Public Accountants and the Financial Accounting Standards Board,
  consistently applied and maintained on a consistent basis for the Credit
  Parties and their Subsidiaries throughout the period indicated.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Governmental Approvals</u>&quot;
  means all authorizations, consents, approvals, licenses and exemptions of,
  registrations and filings with, and reports to, all Governmental Authorities.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Governmental Authority</u>&quot;
  means any nation, province, state or political subdivision thereof, and any
  government or any Person exercising executive, legislative, regulatory or
  administrative functions of or pertaining to government, and any corporation
  or other entity owned or controlled, through stock or capital ownership or
  otherwise, by any of the foregoing.</p>
</blockquote>
<p align="center">6</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Granting Lender</u>&quot; shall
  have the meaning assigned thereto in Section 14.10(h).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Guaranty Obligation</u>&quot;
  means, with respect to the Credit Parties and their Subsidiaries, without
  duplication, any obligation, contingent or otherwise, of any such Person
  pursuant to which such Person has directly or indirectly guaranteed any Debt
  or other obligation of any other Person and, without limiting the generality
  of the foregoing, any obligation, direct or indirect, contingent or otherwise,
  of any such Person (a) to purchase or pay (or advance or supply funds for the
  purchase or payment of) such Debt or other obligation (whether arising by
  virtue of partnership arrangements, by agreement to keep well, to purchase
  assets, goods, securities or services, to take-or-pay, or to maintain
  financial statement condition or otherwise) or (b) entered into for the
  purpose of assuring in any other manner the obligee of such Debt or other
  obligation of the payment thereof or to protect such obligee against loss in
  respect thereof (in whole or in part); provided, that the term Guaranty
  Obligation shall not include (i) endorsements for collection or deposit in the
  ordinary course of business or (ii) a contractual commitment by one Person to
  invest in another Person for so long as such investment is expected to
  constitute a permitted investment under Section 11.4.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Hazardous Materials</u>&quot;
  means any substances or materials (a) which are or become defined as hazardous
  wastes, hazardous substances, pollutants, contaminants, chemical substances or
  mixtures or toxic substances under any Environmental Law, (b) which are toxic,
  explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
  mutagenic or otherwise harmful to human health or the environment and are or
  become regulated by any Governmental Authority, (c) the presence of which
  require investigation or remediation under any Environmental Law, (d) the
  discharge or emission or release of which requires a permit or license under
  any Applicable Law or other Governmental Approval, or (e) which contain,
  without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde
  foam insulation, petroleum hydrocarbons, petroleum derived substances or
  waste, crude oil, nuclear fuel, natural gas or synthetic gas.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Hedging Agreement</u>&quot; means
  any agreement with respect to an interest rate swap, collar, cap, floor or
  forward rate agreement or other agreement regarding the hedging of interest
  rate risk exposure executed in connection with hedging the interest rate
  exposure of any Credit Party, and any confirming letter executed pursuant to
  such hedging agreement, all as amended, restated or otherwise modified from
  time to time.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Interest Coverage Ratio</u>&quot;
  shall have the meaning assigned thereto in Section 10.1.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Interest Expense</u>&quot; means,
  for any period, total interest expense (including, without limitation,
  interest expense attributable to Capital Leases) determined on a consolidated
  basis, without duplication, for the Credit Parties and their Subsidiaries in
  accordance with GAAP.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Interest Period</u>&quot; shall
  have the meaning assigned thereto in Section 5.1(b).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>ISP 98</u>&quot; means the
  International Standby Practices (1998 Revision, effective January 1, 1999),
  International Chamber of Commerce Publication No. 590.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Issuing Lender</u>&quot; means
  Wachovia, JPMorgan Chase Bank, Citibank, N.A., Fleet National Bank and Bank of
  America, N.A., each in its capacity as issuer of any Letter of</p>
</blockquote>
<p align="center">7</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">Credit, and any other Lender mutually acceptable and on terms
  satisfactory to the Borrower, the Administrative Agent and such Lender; and
  Issuing Lenders means all such Lenders.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Jones Apparel Group</u>&quot;
  means Jones Apparel Group, Inc., a Pennsylvania corporation.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Jones Apparel Group Holdings</u>&quot;
  means Jones Apparel Group Holdings, Inc., a Delaware corporation.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>L/C Commitment</u>&quot; means
  Seven Hundred Million Dollars ($700,000,000).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>L/C Facility</u>&quot; means the
  letter of credit facility established pursuant to Article III hereof.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>L/C Fee</u>&quot; shall have the
  meaning assigned thereto in Section 3.3(a).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>L/C Obligations</u>&quot; means at
  any time, an amount equal to the sum of (a) the aggregate undrawn and
  unexpired amount of the then outstanding Letters of Credit and (b) the
  aggregate amount of drawings under Letters of Credit which have not then been
  reimbursed pursuant to Section 3.5.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>L/C Participants</u>&quot; means
  the collective reference to all the Lenders having a Revolving Credit
  Commitment other than the applicable Issuing Lender.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Lender</u>&quot; means each Person
  executing this Agreement as a Lender set forth on the signature pages hereto
  and each Person that hereafter becomes a party to this Agreement as a Lender
  pursuant to Section 14.10 other than any party hereto that ceases to be a
  party hereto pursuant to any Assignment and Acceptance.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Lending Group Members</u>&quot;
  means the collective reference to (a) the Lenders party to this Agreement and
  (b) the lenders party to the Five Year Credit Agreement.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Lending Office</u>&quot; means,
  with respect to any Lender, the office of such Lender maintaining such
  Lender's Revolving Credit Commitment Percentage of the Revolving Credit Loans.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Letters of Credit</u>&quot; shall
  have the meaning assigned thereto in Section 3.1.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>LIBOR</u>&quot; means the rate of
  interest per annum determined on the basis of the rate for deposits in Dollars
  in minimum amounts of at least $5,000,000 for a period equal to the applicable
  Interest Period which appears on the Moneyline Telerate Markets Screen 3750
  (or on any successor or substitute page of such service, or any successor to
  or substitute for such service, providing rate quotations comparable to those
  currently provided on such page of such service, as determined by the
  Administrative Agent from time to time for purposes of providing quotations of
  interest rates applicable to dollar deposits in the London interbank market)
  at approximately 11:00 a.m. (London time) two (2) Business Days prior to the
  first day of the applicable Interest Period (rounded upward, if necessary, to
  the nearest one hundredth of one percent (1/100%)). If, for any reason, such
  rate does not appear on Moneyline Telerate Markets Screen 3750, then &quot;<u>LIBOR</u>&quot;
  shall be determined by the Administrative Agent to be the arithmetic average
  (rounded</p>
</blockquote>
<p align="center">8</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">upward, if necessary, to the nearest one-hundredth of one
  percent (1/100%)) of the rate per annum at which deposits in Dollars would be
  offered by the Reference Group in the London interbank market to the
  Administrative Agent as of approximately 11:00 a.m. (London time) two (2)
  Business Days prior to the first day of the applicable Interest Period for a
  period equal to such Interest Period and in an amount substantially equal to
  the amount of the applicable Revolving Credit Loan.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>LIBOR Rate</u>&quot; means a rate
  per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%)
  determined by the Administrative Agent pursuant to the following formula:</p>
  <div align="center">
    <table border="0" cellpadding="0" cellspacing="0" width="80%">
      <tr>
        <td width="41%" rowspan="2">
          <p align="right">LIBOR RATE =&nbsp;&nbsp; </td>
        <center>
        <td width="59%" align="center">LIBOR
          <hr noshade size="1" color="#000000">
        </td>
        </tr>
        <tr>
          <td width="59%" align="center">1.00 - Eurodollar Reserve Percentage</td>
        </tr>
      </table>
    </center>
  </div>
  <p align="left"><br>
  &nbsp;&nbsp;&nbsp; &quot;<u>LIBOR Rate Loan</u>&quot; means any Revolving
  Credit Loan bearing interest at a rate based upon the LIBOR Rate as provided
  in Section 5.1(a).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Lien</u>&quot; means, with respect
  to any asset, any mortgage, lien, pledge, charge, security interest or
  encumbrance of any kind in respect of such asset. For the purposes of this
  Agreement, a Person shall be deemed to own subject to a Lien any asset which
  it has acquired or holds subject to the interest of a vendor or lessor under
  any conditional sale agreement, Capital Lease or other title retention
  agreement relating to such asset.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Loan Documents</u>&quot; means,
  collectively, this Agreement, the Revolving Credit Notes, the Applications and
  each other document, instrument and agreement executed and delivered by any
  Credit Party, its Subsidiaries or their counsel in connection with this
  Agreement, all as may be amended, restated or otherwise modified.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Material Adverse Effect</u>&quot;
  means, with respect to the Credit Parties or any of their Subsidiaries, a
  material adverse effect on the business, assets, operations or financial
  condition of the Credit Parties and their Subsidiaries taken as a whole or the
  ability of any such Person to perform its obligations under the Loan
  Documents, in each case to which it is a party.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Multiemployer Plan</u>&quot; means
  a &quot;<u>multiemployer plan</u>&quot; as defined in Section 4001(a)(3) of
  ERISA to which the Borrower or any ERISA Affiliate is making (or has made), or
  is accruing (or has accrued) an obligation to make, contributions either
  presently or within the preceding six years.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Net Income</u>&quot; means, with
  respect to the Credit Parties and their Subsidiaries for any period, the
  Consolidated net income (or loss) of the Credit Parties and their Subsidiaries
  for such period determined in accordance with GAAP; <u>provided</u>, that
  there shall be excluded from net income (or loss) of a Person (the
  &quot;computing Person&quot;), the income (or loss) of any Person (other than
  a Subsidiary of the computing Person) in which the computing Person has an
  ownership interest unless received by the computing Person in a cash
  distribution.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Net Worth</u>&quot; means, with
  respect to the Credit Parties and their Subsidiaries, as of any date, the
  total shareholders' equity that would appear on a Consolidated balance sheet
  of the Credit Parties and their Subsidiaries prepared as of such date in
  accordance with GAAP.</p>
</blockquote>
<p align="center">9</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Nine West Footwear</u>&quot; means
  Nine West Footwear Corporation, a Delaware corporation.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Notice of Account Designation</u>&quot;
  shall have the meaning assigned thereto in Section 2.2(b).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Notice of Conversion/Continuation</u>&quot;
  shall have the meaning assigned thereto in Section 5.2.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Notice of Prepayment</u>&quot;
  shall have the meaning assigned thereto in Section 2.3(c).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Notice of Revolving Credit
  Borrowing</u>&quot; shall have the meaning assigned thereto in Section 2.2(a).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Obligations</u>&quot; means, in
  each case, whether now in existence or hereafter arising: (a) the principal of
  and interest on (including interest accruing after the filing of any
  bankruptcy or similar petition) the Revolving Credit Loans, (b) the L/C
  Obligations, (c) all payment and other obligations owing by the Credit Parties
  to any Lender or Affiliate of a Lender or the Administrative Agent under any
  Hedging Agreement with any Lender or Affiliate of a Lender (which such Hedging
  Agreement is permitted hereunder), and (d) all other fees and commissions
  (including attorney's fees), charges, indebtedness, loans, liabilities,
  financial accommodations, obligations, covenants and duties owing by the
  Credit Parties to the Lenders or the Administrative Agent, of every kind,
  nature and description, direct or indirect, absolute or contingent, due or to
  become due, contractual or tortious, liquidated or unliquidated, and whether
  or not evidenced by any note, in each case under or in respect of this
  Agreement, any Revolving Credit Note, any Letter of Credit or any of the other
  Loan Documents.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Officer's Compliance Certificate</u>&quot;
  shall have the meaning assigned thereto in Section 8.2.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Operating Lease</u>&quot; shall
  mean, as to any Person, as determined in accordance with GAAP, any lease of
  property (whether real, personal or mixed) by such Person as lessee which is
  not a Capital Lease.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Other Taxes</u>&quot; shall have
  the meaning assigned thereto in Section 5.12(b).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Outstanding Letters of Credit</u>&quot;
  means each letter of credit described on Schedule 1.1(b) and outstanding as of
  the Closing Date.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>PBGC</u>&quot; means the Pension
  Benefit Guaranty Corporation referred to and defined in ERISA or any successor
  agency.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Pension Plan</u>&quot; means any
  Employee Benefit Plan, other than a Multiemployer Plan, which is subject to
  the provisions of Title IV of ERISA or Section 412 of the Code.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Permitted Investment Policy</u>&quot;
  of the Credit Parties means the investment policy of the Credit Parties as in
  effect on the date of this Agreement which has been approved by the Board of
  Directors of Jones Apparel Group, as amended, restated, supplemented or
  otherwise modified from time to time.</p>
</blockquote>
<p align="center">10</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Permitted Lines of Business</u>&quot;
  shall have the meaning assigned thereto in Section 9.9.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Person</u>&quot; means an
  individual, corporation, limited liability company, partnership, association,
  trust, business trust, joint venture, joint stock company, pool, syndicate,
  sole proprietorship, unincorporated organization, Governmental Authority or
  any other form of entity or group thereof.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Pounds Sterling</u>&quot; means,
  unless otherwise qualified, pounds sterling in lawful currency of the United
  Kingdom.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Prime Rate</u>&quot; means, at any
  time, the rate of interest per annum publicly announced from time to time by
  Wachovia as its prime rate in effect at its principal office in Charlotte,
  North Carolina. Each change in the Prime Rate shall be effective as of the
  opening of business on the day such change in the Prime Rate occurs. The
  parties hereto acknowledge that the rate announced publicly by Wachovia as its
  Prime Rate is an index or base rate and shall not necessarily be its lowest or
  best rate charged to its customers or other banks.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Prior Credit Agreement</u>&quot;
  means the Fifth Amended and Restated 364-Day Credit Agreement dated as of June
  11, 2002, by and among the Borrower, the Prior Lenders and Wachovia Bank,
  National Association, as administrative agent.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Prior Lenders</u>&quot; means,
  collectively, the lenders party to the Prior Credit Agreement.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Reference Group</u>&quot; shall
  mean the Lenders party to this Agreement on the Closing Date.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Register</u>&quot; shall have the
  meaning assigned thereto in Section 2.4(a).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Reimbursement Obligation</u>&quot; means
  the obligation of the Borrower to reimburse each Issuing Lender pursuant to
  Section 3.5 for amounts drawn under Letters of Credit.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Rental Expense</u>&quot; means all
  obligations of the Credit Parties or any of their Subsidiaries for payments
  under Operating Leases.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Required Agreement Lenders</u>&quot;
  means, at any date, any combination of Lenders whose Revolving Credit
  Commitment Percentage equals at least fifty-one percent (51%) of the Revolving
  Credit Commitment or if the Revolving Credit Commitment has been terminated,
  any combination of Lenders who collectively hold at least fifty-one percent
  (51%) of the aggregate unpaid principal amount of the Extensions of Credit.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Required Lenders</u>&quot; means,
  at any date, any combination of Lending Group Members whose Total Committed
  Percentage equals at least fifty-one percent (51%) of the Total Committed
  Amount.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Responsible Officer</u>&quot;
  means any of the following: the chairman, president, chief executive officer,
  chief financial officer or vice president and corporate controller of the
  Borrower or Jones Apparel Group or any other officer of the Borrower or Jones
  Apparel Group reasonably acceptable to the Administrative Agent.</p>
</blockquote>
<p align="center">11</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Revolving Credit Commitment</u>&quot;
  means (a) as to any Lender, the obligation of such Lender to make Revolving
  Credit Loans to the Borrower and to participate in Letters of Credit hereunder
  in an aggregate principal amount at any time outstanding not to exceed the
  amount set forth opposite such Lender's name on Schedule 1.1(a) hereto as such
  amount may be reduced or modified at any time or from time to time pursuant to
  the terms hereof and (b) as to all Lenders, the aggregate Revolving Credit
  Commitment of all Lenders to make Revolving Credit Loans, as such amount may
  be reduced at any time or from time to time pursuant to the terms hereof. The
  Revolving Credit Commitment of all Lenders on the Closing Date shall be Seven
  Hundred Million Dollars ($700,000,000).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Revolving Credit Commitment
  Percentage</u>&quot; means, as to any Lender at any time, the ratio of (a) the
  amount of the Revolving Credit Commitment of such Lender to (b) the Revolving
  Credit Commitment of all of the Lenders.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Revolving Credit Facility</u>&quot;
  means the revolving credit facility established pursuant to Article II hereof.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Revolving Credit Loans</u>&quot;
  means any revolving loan made to the Borrower pursuant to Section 2.1, and all
  such revolving loans collectively as the context requires.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Revolving Credit Notes</u>&quot;
  means the collective reference to the Revolving Credit Notes made by the
  Borrower under this Agreement payable to the order of any such Lender
  requesting such note, substantially in the form of Exhibit A hereto,
  evidencing the obligation owed to such Lender under the Revolving Credit
  Facility, and any amendments and modifications thereto, any substitutes
  therefor, and any replacements, restatements, renewals or extension thereof,
  in whole or in part; &quot;<u>Revolving Credit Note</u>&quot; means any of
  such Revolving Credit Notes.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Revolving Credit Termination Date</u>&quot;
  means the earliest of the dates referred to in Section 2.6.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>SPC</u>&quot; shall have the
  meaning assigned thereto in Section 14.10(h).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Subordinated Debt</u>&quot; means
  the collective reference to Debt on Schedule 7.1(p) hereof designated as
  Subordinated Debt and any other Debt of the Credit Parties or any Subsidiary
  thereof subordinated in right and time of payment to the Obligations and
  otherwise permitted hereunder.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Subsidiary</u>&quot; means, with
  respect to any Person (the &quot;<u>parent</u>&quot;) at any date, any
  corporation, limited liability company, partnership, association or other
  entity the accounts of which would be Consolidated with those of the parent in
  the parent's Consolidated financial statements if such financial statements
  were prepared in accordance with GAAP as of such date, as well as any other
  corporation, limited liability company, partnership, association or other
  entity (a) of which securities or other ownership interests representing more
  than fifty percent (50%) of the equity or more than fifty percent (50%) of the
  ordinary voting power or, in the case of a partnership, more than fifty
  percent (50%) of the general partnership interests are, as of such date,
  owned, controlled or held, or (b) that is, as of such date, otherwise
  controlled, by the parent or one or more subsidiaries of the parent or by the
  parent and one or more subsidiaries of the parent. Unless otherwise qualified
  references to &quot;<u>Subsidiary</u>&quot; or &quot;<u>Subsidiaries</u>&quot;
  herein shall refer to those of the Borrower.</p>
</blockquote>
<p align="center">12</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Syndication Agents</u>&quot; means
  JPMorgan Chase Bank and Citibank, N.A., each in their capacity as syndication
  agent hereunder, and any successor thereto.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Taxes</u>&quot; shall have the
  meaning assigned thereto in Section 5.12(a).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Termination Event</u>&quot; means:
  (a) a &quot;<u>Reportable Event</u>&quot; described in Section 4043 of ERISA,
  or (b) the withdrawal of the Borrower or any ERISA Affiliate from a Pension
  Plan during a plan year in which it was a &quot;<u>substantial employer</u>&quot;
  as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a Pension
  Plan, the filing of a notice of intent to terminate a Pension Plan or the
  treatment of a Pension Plan amendment as a termination under Section 4041 of
  ERISA, or (d) the institution of proceedings to terminate, or the appointment
  of a trustee with respect to, any Pension Plan by the PBGC, or (e) any other
  event or condition which would constitute grounds under Section 4042(a) of
  ERISA for the termination of, or the appointment of a trustee to administer,
  any Pension Plan, or (f) the partial or complete withdrawal of the Borrower or
  any ERISA Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien
  pursuant to Section 412 of the Code or Section 302 of ERISA, or (h) any event
  or condition which results in the reorganization or insolvency of a
  Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i) any event or
  condition which results in the termination of a Multiemployer Plan under
  Section 4041A of ERISA or the institution by PBGC of proceedings to terminate
  a Multiemployer Plan under Section 4042 of ERISA.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Total Committed Amount</u>&quot;
  means (a) as to any Lending Group Member, the sum of (i) the Revolving Credit
  Commitment of such Lending Group Member (or, if such Revolving Credit
  Commitment has been terminated, the aggregate unpaid principal amount of all
  outstanding Extensions of Credit of such Lending Group Member) plus (ii) the
  Revolving Credit Commitment (as defined in the Five Year Credit Agreement) of
  such Lending Group Member (or, if such Revolving Credit Commitment has been
  terminated, the aggregate unpaid principal amount of all outstanding
  Extensions of Credit (as defined in the Five Year Credit Agreement) of such
  Lending Group Member) and (b) as to all Lenders, the aggregate Total Committed
  Amount of all Lending Group Members.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Total Committed Percentage</u>&quot;
  means, as to any Lending Group Member at any time, the ratio of (a) the amount
  of the Total Committed Amount of such Lending Group Member to (b) the
  aggregate Total Committed Amount of all Lending Group Members.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Treaty on European Union</u>&quot;
  means the Treaty of Rome of March 25, 1957, as amended by the Single European
  Act 1986 and the Maastricht Treaty (signed February 7, 1992), as amended from
  time to time.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>UCC</u>&quot; means the Uniform
  Commercial Code as in effect in the State of New York, as amended, restated or
  otherwise modified from time to time.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Uniform Customs</u>&quot; means
  the Uniform Customs and Practice for Documentary Credits (1994 Revision),
  International Chamber of Commerce Publication No. 500.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>United States</u>&quot; means the
  United States of America.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Utilization Fee</u>&quot; shall
  have the meaning assigned thereto in Section 5.3(b).</p>
</blockquote>
<p align="center">13</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Wachovia</u>&quot; means Wachovia
  Bank, National Association, a national banking association, and its
  successors.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; &quot;<u>Wholly-Owned</u>&quot; means, with
  respect to a Subsidiary, that all of the shares of capital stock or other
  ownership interests of such Subsidiary (other than directors' qualifying
  shares) are, directly or indirectly, owned or controlled by any Credit Party
  and/or one or more of its Wholly-Owned Subsidiaries.<br>
  </p>
</blockquote>
<p align="left">SECTION 1.2. <u>General.</u> Unless otherwise specified, a
reference in this Agreement to a particular section, subsection, Schedule or
Exhibit is a reference to that section, subsection, Schedule or Exhibit of this
Agreement. Terms defined in this Agreement and the Five-Year Credit Agreement
shall be construed consistently and no term defined herein shall be limited or
restricted by any similar definition in the Five-Year Credit Agreement nor shall
any such term herein limit or restrict any similar definition in the Five-Year
Credit Agreement. Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and plural,
and pronouns stated in the masculine, feminine or neuter gender shall include
the masculine, feminine and neuter. Any reference herein to &quot;<u>Charlotte
time</u>&quot; shall refer to the applicable time of day in Charlotte, North
Carolina.</p>
<p align="left">SECTION 1.3. <u>Other Definitions and Provisions.</u> (a) Use of
Capitalized Terms. Unless otherwise defined therein, all capitalized terms
defined in this Agreement shall have the defined meanings when used in this
Agreement and the other Loan Documents or any certificate, report or other
document made or delivered pursuant to this Agreement.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) Miscellaneous. The words &quot;<u>hereof</u>&quot;,
&quot;<u>herein</u>&quot; and &quot;<u>hereunder</u>&quot; and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (c) Any reference or usage of the word &quot;<u>amount</u>&quot;
herein as it pertains to any Obligation denominated in an Alternative Currency
shall be deemed to be a reference or usage of the term &quot;<u>Dollar Amount.</u>&quot;</p>
<p align="center">14</p>
<hr noshade size="1" color="#000000">
<p align="left"><b>ARTICLE II REVOLVING CREDIT FACILITY</b></p>
<p align="left">SECTION 2.1. <u>Revolving Credit Loans.</u> Subject to the terms
and conditions of this Agreement, each Lender severally agrees to make Revolving
Credit Loans in Dollars to the Borrower from time to time from the Closing Date
through the Revolving Credit Termination Date as requested by the Borrower in
accordance with the terms of Section 2.2; <u>provided</u>, that (a) the
aggregate principal amount of all outstanding Revolving Credit Loans (after
giving effect to any amount requested) shall not exceed the Revolving Credit
Commitment less the sum of all outstanding L/C Obligations and (b) the principal
amount of outstanding Revolving Credit Loans from any Lender to the Borrower
shall not at any time exceed such Lender's Revolving Credit Commitment less such
Lender's participations in outstanding L/C Obligations. Each Revolving Credit
Loan by a Lender shall be in a principal amount equal to such Lender's Revolving
Credit Commitment Percentage of the aggregate principal amount of Revolving
Credit Loans requested on such occasion. Subject to the terms and conditions
hereof, the Borrower may borrow, repay and reborrow Revolving Credit Loans
hereunder until the Revolving Credit Termination Date.</p>
<p align="left">SECTION 2.2. <u>Procedure for Advances of Revolving Credit
Loans.</u> (a) Requests for Borrowing. The Borrower shall give the
Administrative Agent irrevocable prior written notice in the form attached
hereto as Exhibit B (a &quot;<u>Notice of Revolving Credit Borrowing</u>&quot;)
not later than 11:00 a.m. (Charlotte time) (i) on the same Business Day as each
Base Rate Loan and (ii) at least three (3) Business Days before each LIBOR Rate
Loan, of its intention to borrow, specifying (A) the date of such borrowing,
which shall be a Business Day, (B) the amount of such borrowing, which shall be
in an amount equal to the unused amount of the Revolving Credit Commitment, or
if less, (x) with respect to Base Rate Loans in an aggregate principal amount of
$1,000,000 or a whole multiple of $250,000 in excess thereof and (y) with
respect to LIBOR Rate Loans in an aggregate principal amount of $5,000,000 or a
whole multiple of $1,000,000 in excess thereof, (C) whether such Revolving
Credit Loan is to be a LIBOR Rate Loan or Base Rate Loan, and (D) in the case of
a LIBOR Rate Loan, the duration of the Interest Period applicable thereto.
Notices received after 11:00 a.m. (Charlotte time) shall be deemed received on
the next Business Day. The Administrative Agent shall promptly notify the
Lenders of each Notice of Revolving Credit Borrowing.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Disbursement of Revolving Credit
Loans.</u> Not later than 2:00 p.m. (Charlotte time) on the proposed borrowing
date, each Lender will make available to the Administrative Agent, for the
account of the Borrower, at the office of the Administrative Agent in funds
immediately available to the Administrative Agent, such Lender's Revolving
Credit Commitment Percentage of the Revolving Credit Loans to be made on such
borrowing date. The Borrower hereby irrevocably authorizes the Administrative
Agent to disburse the proceeds of each borrowing requested pursuant to this
Section 2.2 in immediately available funds by crediting or wiring such proceeds
to the deposit account of the Borrower identified in the most recent notice of
account designation, substantially in the form of Exhibit C hereto (a &quot;<u>Notice
of Account Designation</u>&quot;), delivered by the Borrower to the
Administrative Agent or as may be otherwise agreed upon by the Borrower and the
Administrative Agent from time to time. Subject to Section 5.7 hereof, the
Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Revolving Credit Loan requested pursuant to this Section 2.2 for
which any Lender is responsible to the extent that such Lender has not made
available to the Administrative Agent its Revolving Credit Commitment Percentage
of such Revolving Credit Loan.</p>
<p align="center">15</p>
<hr noshade size="1" color="#000000">
<p align="left">SECTION 2.3. <u>Repayment of Revolving Credit Loans.</u> (a) <u>Repayment
on Termination Date.</u> The Borrower shall repay the outstanding principal
amount of all Revolving Credit Loans in full on the Revolving Credit Termination
Date, with all accrued but unpaid interest thereon.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Mandatory Repayment of Excess
Extensions of Credit.</u> (i) If at any time the outstanding principal amount of
all Revolving Credit Loans plus the sum of the Dollar Amount of all outstanding
L/C Obligations exceeds the Revolving Credit Commitment, the Borrower shall
repay immediately upon notice from the Administrative Agent, by payment to the
Administrative Agent for the account of the Lenders, Revolving Credit Loans
and/or furnish cash collateral reasonably satisfactory to the Administrative
Agent or repay the L/C Obligations in an amount equal to such excess. Such cash
collateral shall be applied in accordance with Section 12.2(b).</p>
<p align="left">&nbsp;&nbsp;&nbsp; (ii) Excess Alternative Currency Letters of
Credit. If the Administrative Agent shall determine that the outstanding
principal Dollar Amount of all outstanding Letters of Credit denominated in an
Alternative Currency exceeds one hundred and five percent (105%) of the lesser
of (A) the L/C Commitment less the sum of the outstanding principal amount of
all L/C Obligations denominated in Dollars and (B) the Alternative Currency L/C
Commitment, in each case as of the last Business Day of any calendar month
during the term hereof, then not later than three (3) Business Days after notice
of the amount of such excess from the Administrative Agent to the Borrower, the
Borrower shall deposit an amount in Dollars equal to such excess with the
Administrative Agent to be held as cash collateral in accordance with Section
12.2(b).</p>
<p align="left">&nbsp;&nbsp;&nbsp; (c) <u>Optional Repayments</u>. The Borrower
may at any time and from time to time repay the Revolving Credit Loans, in whole
or in part, upon at least three (3) Business Days' irrevocable notice to the
Administrative Agent with respect to LIBOR Rate Loans and one (1) Business Day's
irrevocable notice with respect to Base Rate Loans, in the form attached hereto
as Exhibit D (a &quot;<u>Notice of Prepayment</u>&quot;) specifying the date and
amount of repayment and whether the repayment is of LIBOR Rate Loans, Base Rate
Loans, or a combination thereof, and, if of a combination thereof, the amount
allocable to each. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Lender. If any such notice is given, the amount specified
in such notice shall be due and payable on the date set forth in such notice.
Partial repayments shall be in an aggregate amount of $1,000,000 or a whole
multiple of $250,000 in excess thereof with respect to Base Rate Loans and
$5,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to
LIBOR Rate Loans.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (d) <u>Limitation on Repayment of LIBOR Rate
Loans.</u> The Borrower may not repay any LIBOR Rate Loan on any day other than
on the last day of the Interest Period applicable thereto unless such repayment
is accompanied by any amount required to be paid pursuant to Section 5.10
hereof.</p>
<p align="left">SECTION 2.4. <u>Evidence of Debt.</u> (a) The Administrative
Agent shall maintain a register and a subaccount therein for each Lender (the
&quot;<u>Register</u>&quot;), in which shall be recorded (i) the amount of each
Revolving Credit Loan made hereunder, including each Revolving Credit Loan
evidenced by a Revolving Credit Note, and each Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) both
the amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender's share thereof.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) The entries made in the Register and the
accounts of each Lender maintained pursuant to Section 2.4(a) shall, to the
extent permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Borrowers therein recorded,</p>
<p align="center">16</p>
<hr noshade size="1" color="#000000">
<p align="left">absent manifest error; provided, however, that the failure of
the Administrative Agent to maintain the Register or any such account, or any
error therein, shall not in any manner affect the obligation of the Borrower to
repay (with applicable interest) the Revolving Credit Loans made to the Borrower
in accordance with the terms of this Agreement.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (c) The Borrower hereby agrees that, upon the
request to the Administrative Agent by any Lender, the Borrower will execute and
deliver to such Lender a Revolving Credit Note of such Borrower evidencing the
Revolving Credit Loans of such Lender, substantially in the form of Exhibit A.</p>
<p align="left">SECTION 2.5. <u>Permanent Reduction of the Revolving Credit
Commitment</u> (a) <u>Voluntary Reduction.</u> The Borrower shall have the right
at any time and from time to time, upon at least five (5) Business Days' prior
written notice to the Administrative Agent, to permanently reduce, without
premium or penalty, (i) the entire Revolving Credit Commitment at any time or
(ii) portions of the Revolving Credit Commitment, from time to time, in an
aggregate principal amount not less than $5,000,000 or any whole multiple of
$1,000,000 in excess thereof.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) Each permanent reduction of the Revolving
Credit Commitment made pursuant to this Section 2.5 shall be accompanied, if
necessary, by a payment of principal sufficient to reduce the aggregate
outstanding Revolving Credit Loans and L/C Obligations, as applicable, after
such reduction to the Revolving Credit Commitment as so reduced and if the
Revolving Credit Commitment as so reduced is less than the aggregate amount of
all outstanding Letters of Credit, the Borrower shall be required to deposit in
a cash collateral account opened by the Administrative Agent an amount equal to
the amount by which the aggregate then undrawn and unexpired amount of such
Letters of Credit exceeds the Revolving Credit Commitment as so reduced. Any
reduction of the Revolving Credit Commitment to zero (including upon termination
of the Revolving Credit Facility on the Revolving Credit Termination Date) shall
be accompanied by payment of all outstanding Revolving Credit Loans (and
furnishing of cash collateral satisfactory to the Administrative Agent for all
L/C Obligations) and shall result in the termination of the Revolving Credit
Commitment and the Revolving Credit Facility. Such cash collateral shall be
applied in accordance with Section 12.2(b). If the reduction of the Revolving
Credit Commitment requires the repayment of any LIBOR Rate Loan, such repayment
shall be accompanied by any amount required to be paid pursuant to Section 5.10
hereof.</p>
<p align="left">SECTION 2.6. <u>Termination of Revolving Credit Facility.</u>
The Revolving Credit Facility shall terminate on the earliest of (a) June 10,
2006, (b) the date of termination of the entire Revolving Credit Commitment by
the Borrower pursuant to Section 2.5(a), and (c) the date of termination by the
Administrative Agent on behalf of the Lenders pursuant to Section 12.2(a).</p>
<p align="left"><b>ARTICLE III LETTER OF CREDIT FACILITY</b></p>
<p align="left">SECTION 3.1. <u>L/C Commitment.</u> Subject to the terms and
conditions hereof, each Issuing Lender, in reliance on the agreements of the
other Lenders set forth in Section 3.4(a), agrees to issue trade and standby
letters of credit (&quot;Letters of Credit&quot;) for the account of the
Borrower on any Business Day from the Closing Date to but not including the
Revolving Credit Termination Date in such form as may be approved from time to
time by such Issuing Lender; <u>provided</u>, that no Issuing Lender shall have
any obligation to issue any Letter of Credit if, after giving effect to such
issuance, (a) the L/C Obligations would exceed the L/C Commitment or (b) the L/C
Obligations on account of Letters of Credit denominated in an Alternative
Currency would exceed the Alternative Currency L/C Commitment or (c) the
aggregate principal amount of outstanding Revolving Credit Loans, plus the
aggregate principal amount of L/C Obligations</p>
<p align="center">17</p>
<hr noshade size="1" color="#000000">
<p align="left">would exceed the Revolving Credit Commitment. Each Letter of
Credit shall (i) be denominated in (A) Dollars, if such Letter of Credit is a
standby Letter of Credit, or (B) Dollars or an Alternative Currency, if such
Letter of Credit is a trade Letter of Credit, (ii) be a trade or standby letter
of credit issued to support obligations of the Borrower or any of its
Subsidiaries, contingent or otherwise, incurred in the ordinary course of
business, (iii) expire on a date no later than (A) two hundred twenty-five (225)
days from the date of issuance thereof for trade Letters of Credit and (B) one
(1) year from the date of issuance thereof for standby Letters of Credit, and
(iv) be subject to the Uniform Customs and/or ISP 98, as set forth in the
Application or as determined by the applicable Issuing Lender and, to the extent
not inconsistent therewith, the laws of the State of New York. No Issuing Lender
shall at any time be obligated to issue any Letter of Credit hereunder if such
issuance would conflict with, or cause such Issuing Lender or any L/C
Participant to exceed any limits imposed by, any Applicable Law. References
herein to &quot;issue&quot; and derivations thereof with respect to Letters of
Credit shall also include extensions or modifications of any existing Letters of
Credit, unless the context otherwise requires. Each Outstanding Letter of Credit
shall be deemed to have been issued under this Agreement.</p>
<p align="left">SECTION 3.2. <u>Procedure for Issuance of Letters of Credit.</u>
The Borrower may from time to time request that any Issuing Lender issue a
Letter of Credit (or amend, extend or renew an outstanding Letter of Credit) by
delivering to such Issuing Lender at any Issuing Lender's office at any address
mutually acceptable to the Borrower and such Issuing Lender an Application
therefor, including, if applicable, the office of such Issuing Lender's
Correspondent, completed to the satisfaction of such Issuing Lender, and such
other certificates, documents and other papers and information as such Issuing
Lender may reasonably request. Upon receipt of any Application, such Issuing
Lender shall process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall, subject to Section 3.1 and Article VI
hereof, promptly issue the Letter of Credit (or amend, extend or renew the
outstanding Letter of Credit) requested thereby (but in no event shall any
Issuing Lender be required to issue any Letter of Credit (or amend, extend or
renew an outstanding Letter of Credit) earlier than three (3) Business Days
after its receipt of the Application therefor and all such other certificates,
documents and other papers and information relating thereto) by issuing the
original of such Letter of Credit to the beneficiary thereof or as otherwise may
be agreed by such Issuing Lender and the Borrower. Within fifteen (15) Business
Days after the end of each month, the Administrative Agent shall report to each
Lender the average daily outstandings for each day in such month for all Letters
of Credit during the previous month.</p>
<p align="left">SECTION 3.3. <u>Fees and Other Charges.</u> (a) The Borrower
shall pay to the Administrative Agent, for the account of each Issuing Lender
and the L/C Participants, a letter of credit fee (the &quot;L/C Fee&quot;) (i)
with respect to each trade Letter of Credit, in an amount equal to the
Applicable Margin for trade Letters of Credit times the average daily undrawn
amount of such issued Letter of Credit as reported by the Administrative Agent
pursuant to Section 3.2 and (ii) with respect to each standby Letter of Credit,
in an amount equal to the Applicable Margin for standby Letters of Credit times
the face amount of such Letter of Credit. Such fee shall be payable quarterly in
arrears (x) for trade Letters of Credit, within fifteen (15) Business Days after
the end of each calendar quarter and on the Revolving Credit Termination Date
and (y) for standby Letters of Credit, within fifteen (15) Business Days after
the end of each calendar quarter and on the Revolving Credit Termination Date.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) In addition to the foregoing commission,
the Borrower shall pay the Issuing Lenders an issuance fee of one eighth percent
(1/8%) per annum on the face amount of each standby Letter of Credit, payable
quarterly in arrears within fifteen (15) Business Days after the</p>
<p align="center">18</p>
<hr noshade size="1" color="#000000">
<p align="left">end of each calendar quarter of each calendar quarter and on the
Revolving Credit Termination Date.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (c) The Administrative Agent shall, promptly
following its receipt thereof, distribute to each Issuing Lender and the L/C
Participants all fees received by the Administrative Agent in accordance with
their respective Revolving Credit Commitment Percentages.</p>
<p align="left">SECTION 3.4. <u>L/C Participations.</u> (a) Each Issuing Lender
irrevocably agrees to grant and hereby grants to each L/C Participant, and, to
induce such Issuing Lender to issue Letters of Credit hereunder, each L/C
Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from such Issuing Lender, on the terms and conditions hereinafter
stated, for such L/C Participant's own account and risk an undivided interest
equal to such L/C Participant's Revolving Credit Commitment Percentage in such
Issuing Lender's obligations and rights under each Letter of Credit issued
hereunder and the amount of each draft paid by such Issuing Lender thereunder.
Each L/C Participant unconditionally and irrevocably agrees with each Issuing
Lender that, if a draft is paid under any Letter of Credit for which such
Issuing Lender is not reimbursed in full by the Borrower in accordance with the
terms of this Agreement, such L/C Participant shall pay to such Issuing Lender
upon demand at such Issuing Lender's address for notices specified herein an
amount in Dollars equal to such L/C Participant's Revolving Credit Commitment
Percentage of the Dollar Amount of such draft, or any part thereof, which is not
so reimbursed, such payment to be made by the making of a Base Rate Loan in
Dollars pursuant to Section 3.5(c) below.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) Upon becoming aware of any amount
required to be paid by any L/C Participant to any Issuing Lender pursuant to
Section 3.4(a) in respect of any unreimbursed portion of any payment made by
such Issuing Lender under any Letter of Credit, the Administrative Agent shall
notify each L/C Participant of the amount and due date of such required payment
and such L/C Participant shall pay to such Issuing Lender the amount specified
on the applicable due date. If any such amount is paid to such Issuing Lender
after the date such payment is due, such L/C Participant shall pay to such
Issuing Lender on demand, in addition to such amount, the product of (i) such
amount, times (ii) the daily average Federal Funds Rate as determined by the
Administrative Agent during the period from and including the date such payment
is due to the date on which such payment is immediately available to such
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. A
certificate of any Issuing Lender with respect to any amounts owing under this
Section 3.4(b) shall be conclusive in the absence of manifest error. With
respect to payment to any Issuing Lender of the unreimbursed amounts described
in this Section 3.4(b), if the L/C Participants receive notice that any such
payment is due (A) prior to 1:00 p.m. (Charlotte time) on any Business Day, such
payment shall be due that Business Day, and (B) after 1:00 p.m. (Charlotte time)
on any Business Day, such payment shall be due on the following Business Day.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (c) Whenever, at any time after any Issuing
Lender has made payment under any Letter of Credit and has received from any L/C
Participant its Revolving Credit Commitment Percentage of such payment in
accordance with this Section 3.4, such Issuing Lender receives any payment
related to such Letter of Credit (whether directly from the Borrower or
otherwise, or any payment of interest on account thereof), such Issuing Lender
will distribute to such L/C Participant its pro rata share thereof in accordance
with such L/C Participant's Revolving Credit Commitment Percentage; provided,
that in the event that any such payment received by such Issuing Lender shall be
required to be returned by such Issuing Lender, such L/C Participant shall</p>
<p align="center">19</p>
<hr noshade size="1" color="#000000">
<p align="left">return to such Issuing Lender the portion thereof previously
distributed by such Issuing Lender to it.</p>
<p align="left">SECTION 3.5. <u>Reimbursement.</u> (a) <u>Reimbursement by the
Borrower.</u> The Borrower agrees to reimburse each Issuing Lender on each date
the Administrative Agent notifies the Borrower of the date and amount of a draft
paid under any Letter of Credit for the amount of (i) such draft so paid and
(ii) any taxes, fees, charges or other costs or expenses incurred by any Issuing
Lender in connection with such payment (other than those payable pursuant to
Section 3.5(b) below). Each such payment shall be made to any Issuing Lender at
its address for notices specified herein (i) in Dollars if such Letter of Credit
was denominated in Dollars or (ii) in Dollars or the applicable Alternative
Currency, at the option of the Borrower, if such Letter of Credit was
denominated in an Alternative Currency, and in each case, in immediately
available funds. Interest shall be payable on any and all amounts remaining
unpaid by the Borrower under this Article III from the day immediately following
the date such amounts become payable (whether at stated maturity, by
acceleration or otherwise) until payment in full at the rate which would be
payable on any outstanding Base Rate Loans which were then overdue.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Exchange Indemnification and Increased
Costs.</u> The Borrower shall, upon demand from any Issuing Lender or L/C
Participant, pay to such Issuing Lender or L/C Participant, the amount of (i)
any loss or cost or increased cost incurred by such Issuing Lender or L/C
Participant, (ii) any reduction in any amount payable to or in the effective
return on the capital to such Issuing Lender or L/C Participant, (iii) any
currency exchange loss, in each case with respect to clauses (i), (ii) and
(iii), that such Issuing Lender or L/C Participant sustains as a result of the
Borrower's repayment in Dollars of any Letter of Credit denominated in an
Alternative Currency or (iv) any interest or any other return, including
principal, foregone by such Issuing Lender as a result of the introduction of,
change over to or operation of the euro in any member state participating in the
euro. A certificate of such Issuing Lender setting forth in reasonable detail
the basis for determining such additional amount or amounts necessary to
compensate such Issuing Lender shall be conclusively presumed to be correct save
for manifest error.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (c) <u>Reimbursement by the Lenders.</u> If
the Borrower fails to timely reimburse such Issuing Lender on the date the
Borrower receives the notice referred to in this Section 3.5, the Borrower shall
be deemed to have timely given a Notice of Revolving Credit Borrowing pursuant
to Section 2.2 hereunder to the Administrative Agent requesting the Lenders to
make a Base Rate Loan on such date in an amount in Dollars equal to the Dollar
Amount (as of the date of funding of such Base Rate Loan by each Lender) of such
draft paid, together with any taxes, fees, charges or other costs or expenses
incurred by any Issuing Lender and to be reimbursed pursuant to this Section 3.5
and, regardless of whether or not the conditions precedent specified in Article
VI have been satisfied, the Lenders shall make Base Rate Loans in such amount,
the proceeds of which shall be applied to reimburse such Issuing Lender for the
amount of the related drawing and costs and expenses. Notwithstanding the
foregoing, nothing in this Section 3.5 shall obligate the Lenders to make such
Base Rate Loans if the making of such Base Rate Loans would violate the
automatic stay under federal bankruptcy laws.</p>
<p align="left">SECTION 3.6. <u>Obligations Absolute.</u> The Borrower's
obligations under this Article III (including without limitation the
Reimbursement Obligation) shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrower may have or have had against any Issuing Lender or
any beneficiary of a Letter of Credit. The Borrower also agrees with each
Issuing Lender that no Issuing Lender shall be responsible for, and the
Borrower's Reimbursement Obligation under Section 3.5 shall</p>
<p align="center">20</p>
<hr noshade size="1" color="#000000">
<p align="left">not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. No Issuing Lender shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions caused by such Issuing Lender's gross negligence
or willful misconduct. The Borrower agrees that any action taken or omitted by
any Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in the
Uniform Customs and/or ISP 98, as set forth in the Application or as determined
by the Issuing Lender and, to the extent not inconsistent therewith, the laws of
the State of New York, shall be binding on the Borrower and shall not result in
any liability of any Issuing Lender to the Borrower. The responsibility of each
Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.</p>
<p align="left">SECTION 3.7 <u>Effect of Application.</u> To the extent that any
provision of any Application related to any Letter of Credit is inconsistent
with the provisions of this Article III, the provisions of this Article III
shall apply.</p>
<p align="left"><b>ARTICLE IV [RESERVED]</b></p>
<p align="left"><b>ARTICLE V GENERAL LOAN PROVISIONS</b></p>
<p align="left">SECTION 5.1. <u>Interest.</u> (a) <u>Interest Rate Options.</u>
Subject to the provisions of this Section 5.1, at the election of the Borrower,
the aggregate principal balance of any Revolving Credit Loans shall bear
interest at (i) the Base Rate plus the Applicable Margin or (ii) the LIBOR Rate
plus the Applicable Margin; provided that LIBOR Rate Loans shall not be
available until three (3) Business Days after the Closing Date unless the
Borrower executes and delivers an indemnity in favor of the Administrative Agent
and the Lenders in form and substance satisfactory to them. The Borrower shall
select the rate of interest and Interest Period, if any, applicable to any
Revolving Credit Loan at the time a Notice of Revolving Credit Borrowing is
given pursuant to Section 2.2 or at the time a Notice of Conversion/Continuation
is given pursuant to Section 5.2. Each Revolving Credit Loan or portion thereof
bearing interest based on the Base Rate shall be a &quot;<u>Base Rate Loan</u>&quot;,
and each Revolving Credit Loan or portion thereof bearing interest based on the
LIBOR Rate shall be a &quot;<u>LIBOR Rate Loan.</u>&quot; Any Revolving Credit
Loan or any portion thereof as to which the Borrower has not duly specified an
interest rate as provided herein shall be deemed a Base Rate Loan.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Interest Periods.</u> In connection
with each LIBOR Rate Loan, the Borrower, by giving notice at the times described
in Section 5.1(a), shall elect an interest period (each, an &quot;<u>Interest
Period</u>&quot;) to be applicable to such Revolving Credit Loan, which Interest
Period shall be a period of one (1), two (2), three (3), or six (6) months (or
nine (9) or twelve (12) months or any other period if available from all
Lenders) with respect to each LIBOR Rate; provided that:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) the Interest Period shall commence on
  the date of advance of or conversion to any LIBOR Rate Loan and, in the case
  of immediately successive Interest</p>
  <p align="center">21</p>
</blockquote>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">Periods, each successive Interest Period shall commence on the
  date on which the next preceding Interest Period expires;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (ii) if any Interest Period would otherwise
  expire on a day that is not a Business Day, such Interest Period shall expire
  on the next succeeding Business Day; provided, that if any Interest Period
  with respect to a LIBOR Rate Loan would otherwise expire on a day that is not
  a Business Day but is a day of the month after which no further Business Day
  occurs in such month, such Interest Period shall expire on the next preceding
  Business Day;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iii) any Interest Period with respect to a
  LIBOR Rate Loan that begins on the last Business Day of a calendar month (or
  on a day for which there is no numerically corresponding day in the calendar
  month at the end of such Interest Period) shall end on the last Business Day
  of the relevant calendar month at the end of such Interest Period;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iv) no Interest Period shall extend beyond
  the Revolving Credit Termination Date; and</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (v) there shall be no more than six (6)
  Interest Periods in effect at any time.</p>
</blockquote>
<p align="left">&nbsp;&nbsp;&nbsp; (c) <u>Default Rate.</u> Subject to Section
12.3, at the discretion of the Administrative Agent and Required Lenders, upon
the occurrence and during the continuance of an Event of Default, (i) the
Borrower shall no longer have the option to request LIBOR Rate Loans, (ii) all
outstanding LIBOR Rate Loans shall bear interest at a rate per annum two percent
(2%) in excess of the rate then applicable to LIBOR Rate Loans, as applicable,
until the end of the applicable Interest Period and thereafter at a rate equal
to two percent (2%) in excess of the rate then applicable to Base Rate Loans,
and (iii) all outstanding Base Rate Loans shall bear interest at a rate per
annum equal to two percent (2%) in excess of the rate then applicable to Base
Rate Loans. Interest shall continue to accrue on the amount of Revolving Credit
Loans outstanding after the filing by or against the Borrower of any petition
seeking any relief in bankruptcy or under any act or law pertaining to
insolvency or debtor relief, whether state, federal or foreign.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (d) <u>Interest Payment and Computation.</u>
Interest on each Base Rate Loan shall be payable in arrears on the last Business
Day of each calendar quarter commencing June 30, 2003; and interest on each
LIBOR Rate Loan shall be payable on the last day of each Interest Period
applicable thereto, and if such Interest Period exceeds three (3) months, at the
end of each three (3) month interval during such Interest Period. Interest on
LIBOR Rate Loans and all fees payable hereunder shall be computed on the basis
of a 360-day year and assessed for the actual number of days elapsed and
interest on Base Rate Loans shall be computed on the basis of a 365/66-day year
and assessed for the actual number of days elapsed.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (e) <u>Maximum Rate.</u> In no contingency or
event whatsoever shall the aggregate of all amounts deemed interest hereunder or
under any of the Loan Documents charged or collected pursuant to the terms of
this Agreement or pursuant to any other Loan Document exceed the highest rate
permissible under any Applicable Law which a court of competent jurisdiction
shall, in a final determination, deem applicable hereto. In the event that such
a court determines that the Lenders have charged or received interest hereunder
in excess of the highest applicable rate, the rate in effect hereunder shall
automatically be reduced to the maximum rate permitted by Applicable Law and the
Lenders shall at the Administrative Agent's option (i) promptly refund to the
Borrower any interest received by Lenders in excess of the maximum lawful rate
or (ii) shall apply such excess to the principal balance of the Obligations. It
is the</p>
<p align="center">22</p>
<hr noshade size="1" color="#000000">
<p align="left">intent hereof that the Borrower not pay or contract to pay, and
that neither the Administrative Agent nor any Lender receive or contract to
receive, directly or indirectly in any manner whatsoever, interest in excess of
that which may be paid by the Borrower under Applicable Law.</p>
<p align="left">SECTION 5.2. <u>Notice and Manner of Conversion or Continuation
of Revolving Credit Loans.</u> Provided that no Event of Default has occurred
and is then continuing, the Borrower shall have the option (a) to convert all or
any portion of its outstanding Base Rate Loans in a principal amount equal to
$5,000,000 or any whole multiple of $1,000,000 in excess thereof into one or
more LIBOR Rate Loans and (b), (i) to convert all or any part of its outstanding
LIBOR Rate Loans in a principal amount equal to $1,000,000 or a whole multiple
of $250,000 in excess thereof into Base Rate Loans or (ii) to continue such
LIBOR Rate Loans as LIBOR Rate Loans for an additional Interest Period; provided
that if any conversion or continuation is made prior to the expiration of any
Interest Period, the Borrower shall pay any amount required to be paid pursuant
to Section 5.10 hereof. Whenever the Borrower desires to convert or continue
Revolving Credit Loans as provided above, the Borrower shall give the
Administrative Agent irrevocable prior written notice in the form attached as
Exhibit E (a &quot;<u>Notice of Conversion/Continuation</u>&quot;) not later
than 11:00 a.m. (Charlotte time) three (3) Business Days before the day on which
a proposed conversion or continuation of such Revolving Credit Loan is to be
effective (except in the case of a conversion of a LIBOR Rate Loan to a Base
Rate Loan in which case same day notice by the Borrower shall be sufficient)
specifying (A) the Revolving Credit Loans to be converted or continued, and, in
the case of any LIBOR Rate Loan to be converted or continued, the last day of
the Interest Period therefor, (B) the effective date of such conversion or
continuation (which shall be a Business Day), (C) the principal amount of such
Revolving Credit Loans to be converted or continued, and (D) the Interest Period
to be applicable to such converted or continued LIBOR Rate Loan. The
Administrative Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation.</p>
<p align="left">SECTION 5.3. <u>Fees.</u> (a) <u>Facility Fees.</u> The Borrower
shall pay to the Administrative Agent, for the account of the Lenders, a
non-refundable facility fee (the &quot;<u>Facility Fee</u>&quot;) at a rate per
annum equal to the Applicable Margin on the full amount of the Revolving Credit
Commitment, regardless of usage. The Facility Fee shall be payable in arrears on
the last Business Day of each calendar quarter for the period commencing on the
Closing Date and ending on the Revolving Credit Termination Date. The Facility
Fee shall be distributed by the Administrative Agent to the Lenders pro rata in
accordance with the Lenders' respective Revolving Credit Commitment Percentages.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Utilization Fee.</u> The Borrower
shall pay a utilization fee (the &quot;<u>Utilization Fee</u>&quot;) at a rate
per annum equal to 0.125% on the average amount of outstanding Revolving Credit
Loans during each fiscal quarter that such average exceeds 50% of the Revolving
Credit Commitments (exclusive of any issued and outstanding Letters of Credit).
The average amount of Revolving Credit Loans for any fiscal quarter shall be
calculated by the Administrative Agent (which such calculation shall be
conclusively presumed correct save manifest error) as follows: (i) the sum of
the principal amount of outstanding Revolving Credit Loans at the close of
business for each day during such fiscal quarter, divided by (ii) the total
number of days of such fiscal quarter. The Utilization Fee shall be payable in
arrears on the fifteenth (15th) day following written notification by the
Administrative Agent to the Borrower of the average for the preceding quarter
and the resulting Utilization Fee. The Utilization Fee shall be distributed by
the Administrative Agent to the Lenders pro rata in accordance with the Lenders'
respective Revolving Credit Commitment Percentage.</p>
<p align="center">23</p>
<hr noshade size="1" color="#000000">
<p align="left">&nbsp;&nbsp;&nbsp; (c) Administrative Agent's and Other Fees. In
order to compensate the Administrative Agent for its obligations hereunder, the
Borrower agrees to pay to the Administrative Agent, for its account, the fees
set forth in the separate fee letter agreement executed by the Borrower and the
Administrative Agent dated May 15, 2003.</p>
<p align="left">SECTION 5.4. <u>Manner of Payment.</u> Each payment by the
Borrower on account of the principal of or interest on the Revolving Credit
Loans or of any fee, commission or other amounts (including the Reimbursement
Obligation) payable to the Lenders under this Agreement or any other Loan
Document shall be made not later than 1:00 p.m. (Charlotte time) on the date
specified for payment under this Agreement to the Administrative Agent at the
Administrative Agent's Office for the account of the Lenders (other than as set
forth below) pro rata in accordance with their respective Revolving Credit
Commitment Percentages (except as specified below), in Dollars, in immediately
available funds and shall be made without any set-off, counterclaim or deduction
whatsoever. Any payment received after such time but before 2:00 p.m. (Charlotte
time) on such day shall be deemed a payment on such date for the purposes of
Section 12.1, but for all other purposes shall be deemed to have been made on
the next succeeding Business Day. Any payment received after 2:00 p.m.
(Charlotte time) shall be deemed to have been made on the next succeeding
Business Day for all purposes. Upon receipt by the Administrative Agent of each
such payment, the Administrative Agent shall distribute to each Lender at its
address for notices set forth herein its pro rata share of such payment in
accordance with such Lender's Revolving Credit Commitment Percentage (except as
specified below), and shall wire advice of the amount of such credit to each
Lender. Each payment to the Administrative Agent of the L/C Participants'
commissions shall be made in like manner, but for the account of the L/C
Participants. Each payment to the Administrative Agent of Administrative Agent's
fees or expenses shall be made for the account of the Administrative Agent and
any amount payable to any Lender under Section 5.9, 5.10, 5.11, 5.12 or 14.2
shall be paid to the Administrative Agent for the account of the applicable
Lender. Subject to Section 5.1(b)(ii), if any payment under this Agreement or
any other Loan Document shall be specified to be made upon a day which is not a
Business Day, it shall be made on the next succeeding day which is a Business
Day and such extension of time shall in such case be included in computing any
interest if payable along with such payment.</p>
<p align="left">SECTION 5.5. <u>Crediting of Payments and Proceeds.</u> In the
event that the Borrower shall fail to pay any of the Obligations when due and
the Obligations have been accelerated pursuant to Section 12.2, all payments
received by the Lenders upon the Obligations and all net proceeds from the
enforcement of the Obligations shall be applied first to all expenses then due
and payable by the Borrower hereunder, then to all indemnity obligations then
due and payable by the Borrower hereunder, then to all Administrative Agent's
fees then due and payable, then to all commitment and other fees and commissions
then due and payable, then to accrued and unpaid interest hereunder or under any
other Loan Document, and Reimbursement Obligation (pro rata in accordance with
all such amounts due), then to the principal amount hereunder or under any other
Loan Document, Reimbursement Obligation and any termination payments due in
respect of a Hedging Agreement with any Lender or Affiliate of a Lender (which
Hedging Agreement is permitted hereunder) (pro rata in accordance with all such
amounts due) and then to the cash collateral account described in Section
12.2(b) hereof to the extent of any L/C Obligations then outstanding, in that
order.</p>
<p align="left">SECTION 5.6. <u>Adjustments.</u> If any Lender (a &quot;<u>Benefited
Lender</u>&quot;) shall at any time receive any payment of all or part of the
Obligations owing to it, or interest thereon, or if any Lender shall at any time
receive any collateral in respect to the Obligations owing to it (whether
voluntarily or involuntarily, by set-off or otherwise) in a greater proportion
than any such payment to and</p>
<p align="center">24</p>
<hr noshade size="1" color="#000000">
<p align="left">collateral received by any other Lender, if any, in respect of
the Obligations owing to such other Lender, or interest thereon, such Benefited
Lender shall purchase for cash from the other Lenders such portion of each such
other Lender's Extensions of Credit, or shall provide such other Lenders with
the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefited Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders; provided, that
if all or any portion of such excess payment or benefits is thereafter recovered
from such Benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned to the extent of such recovery, but without
interest. The Borrower agrees that each Lender so purchasing a portion of
another Lender's Extensions of Credit may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such portion
as fully as if such Lender were the direct holder of such portion.</p>
<p align="left">SECTION 5.7. <u>Nature of Obligations of Lenders Regarding
Extensions of Credit; Assumption by the Administrative Agent.</u> The
obligations of the Lenders under this Agreement to make the Revolving Credit
Loans and issue or participate in Letters of Credit are several and are not
joint or joint and several. Unless the Administrative Agent shall have received
notice from a Lender prior to a proposed borrowing date that such Lender will
not make available to the Administrative Agent such Lender's ratable portion of
the amount to be borrowed on such date (which notice shall not release such
Lender of its obligations hereunder), the Administrative Agent may assume that
such Lender has made such portion available to the Administrative Agent on the
proposed borrowing date in accordance with Sections 2.2(b) and 4.2, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If such amount is made
available to the Administrative Agent on a date after such borrowing date, such
Lender shall pay to the Administrative Agent on demand an amount, until paid,
equal to the product of (a) the amount not made available by such Lender in
accordance with the terms hereof, times (b) the daily average Federal Funds Rate
during such period as determined by the Administrative Agent, times (c) a
fraction the numerator of which is the number of days that elapse from and
including such borrowing date to the date on which such amount not made
available by such Lender in accordance with the terms hereof shall have become
immediately available to the Administrative Agent and the denominator of which
is 360. A certificate of the Administrative Agent with respect to any amounts
owing under this Section 5.7 shall be conclusive, absent manifest error. If such
Lender's Revolving Credit Commitment Percentage of such borrowing is not made
available to the Administrative Agent by such Lender within three (3) Business
Days of such borrowing date, the Administrative Agent shall be entitled to
recover such amount made available by the Administrative Agent with interest
thereon at the rate per annum applicable to such borrowing, on demand, from the
Borrower. The failure of any Lender to make available its Revolving Credit
Commitment Percentage of any Revolving Credit Loan requested by the Borrower
shall not relieve it or any other Lender of its obligation hereunder to make its
Revolving Credit Commitment Percentage of such Revolving Credit Loan available
on the borrowing date, but no Lender shall be responsible for the failure of any
other Lender to make its Revolving Credit Commitment Percentage of such
Revolving Credit Loan available on the borrowing date.</p>
<p align="left">SECTION 5.8. <u>Joint and Several Liability of the Credit
Parties.</u> (a) Each of the Credit Parties is jointly and severally liable not
merely as a surety but as a co-debtor for each and every Obligation. Each of the
Credit Parties is accepting joint and several liability hereunder in
consideration of the financial accommodations to be provided by the Lenders
under this Agreement, for the mutual benefit, directly or indirectly, of each of
the Credit Parties and in consideration of the undertakings of each of the
Credit Parties to accept joint and several liability for the Obligations.</p>
<p align="center">25</p>
<hr noshade size="1" color="#000000">
<p align="left">&nbsp;&nbsp;&nbsp; (b) Except as otherwise expressly provided
herein, each Credit Party hereby waives promptness, diligence, presentment,
demand, protest, notice of acceptance of its joint and several liability, notice
of any and all advances of the Revolving Credit Loans and Letters of Credit made
under this Agreement and the other Loan Documents, notice of occurrence of any
Default or Event of Default, or of any demand for any payment under this
Agreement and notice of any action at any time taken or omitted by the
Administrative Agent or any Lender under or in respect of any of the Obligations
hereunder. Each Credit Party hereby waives all defenses which may be available
by virtue of any valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshaling of assets of any of the
Credit Parties and any other entity or person primarily or secondarily liable
with respect to any of the Obligations, and all suretyship defenses generally.
Each Credit Party hereby assents to, and waives notice of, any extension or
postponement of the time for the payment, or place or manner for payment,
compromise, refinancing, consolidation or renewals of any of the Obligations
hereunder, the acceptance of any partial payment thereon, any waiver, consent or
other action or acquiescence by the Administrative Agent or any Lender at any
time or times in respect of any default by any Credit Party in the performance
or satisfaction of any term, covenant, condition or provision of this Agreement
and the other Loan Documents, any and all other indulgences whatsoever by the
Administrative Agent or any Lender in respect of any of the Obligations, and the
taking, addition, substitution or release, in whole or in part, at any time or
times, of any security for any of such Obligations or the addition, substitution
or release, in whole or in part, of any Credit Party or any other entity or
person primarily or secondarily liable for any Obligation. If for any reason any
of the Credit Parties has no legal existence or is under no legal obligation to
discharge any of the Obligations, or if any of the Obligations have become
irrecoverable from any of the Credit Parties by reason of such Credit Party's
insolvency, bankruptcy or reorganization or by other operation of law or for any
reason, this Agreement and the other Loan Documents shall nevertheless be
binding on each of the other Credit Parties to the same extent as if such Credit
Party at all times had been the sole obligor on such Obligations. The
Obligations of each Credit Party under this Section 5.8 shall not be diminished
or rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any
reconstruction or similar proceeding with respect to any Credit Party, the
Administrative Agent or any Lender.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (c) If at any time, any payment, or any part
thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by the Administrative Agent or any Lender upon
the insolvency, bankruptcy or reorganization of any of the Credit Parties, or
otherwise, the provisions of this Section 5.8 will forthwith be reinstated in
effect as though such payment had not been made.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (d) Until the payment and performance in full
of all the Obligations, none of the Credit Parties shall exercise and each
hereby waives any rights against the other Credit Parties as a result of payment
by such Credit Party hereunder, by way of subrogation, reimbursement,
restitution, contribution or otherwise, and none of the Credit Parties will
prove any claim in competition with the Administrative Agent or any Lender in
respect of any payment hereunder in bankruptcy, insolvency, or reorganization
proceedings of any nature; none of the Credit Parties will claim any set-off,
recoupment or counterclaim against any of the other Credit Parties in respect of
any liability of one Credit Party to another Credit Party. Each of the Credit
Parties hereby agrees that the payment of any amounts due with respect to any
indebtedness owing by any of the Credit Party to any other Credit Party is
hereby subordinated to the prior payment in full in cash of the Obligations.
Each Credit Party agrees that, after the occurrence and during the continuance
of any Default or Event of Default hereunder, none of the Credit Parties will
demand, sue for or otherwise attempt to collect any indebtedness of any other
Credit Party to such Credit Party until all of the Obligations of the Credit
Parties hereunder shall have been paid in full</p>
<p align="center">26</p>
<hr noshade size="1" color="#000000">
<p align="left">in cash. If, notwithstanding the foregoing sentence, any Credit
Party shall collect, enforce or receive any amounts in respect of such
indebtedness in violation of the foregoing sentence while any Obligations of the
Credit Parties are still outstanding, such amounts shall be collected, enforced
and received by such Credit Party as trustee for the Administrative Agent and
the Lenders and be paid over to the Administrative Agent on account of the
Obligations without affecting in any manner the liability of such Credit Party
under the other provisions hereof.</p>
<p align="left">SECTION 5.9. <u>Changed Circumstances.</u> (a) <u>Circumstances
Affecting LIBOR Rate Availability.</u> If with respect to any Interest Period: (i)
the Administrative Agent or any Lender (after consultation with Administrative
Agent) shall determine that, by reason of circumstances affecting the foreign
exchange and interbank markets generally, deposits in eurodollars, in the
applicable amounts are not being quoted via Moneyline Telerate Markets Screen
3750 (or on any successor or substitute page of such service, or any successor
to or substitute for such service, providing rate quotations comparable to those
currently provided on such page of such service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) or
offered to the Administrative Agent or such Lender for such Interest Period; or
(ii) the Required Lenders reasonably determine (which determination shall be
conclusive) and notify the Administrative Agent that the LIBOR Rate will not
adequately and fairly reflect the cost to the Required Lenders of funding LIBOR
Rate Loans for such Interest Period; then the Administrative Agent shall
forthwith give notice thereof to the Borrower. Thereafter, until the
Administrative Agent notifies the Borrower that such circumstances no longer
exist, the obligation of the Lenders to make LIBOR Rate Loans and the right of
the Borrower to convert any Revolving Credit Loan to or continue any Revolving
Credit Loan as a LIBOR Rate Loan shall be suspended, and the Borrower shall
repay in full (or cause to be repaid in full) the then outstanding principal
amount of each such LIBOR Rate Loan together with accrued interest thereon, on
the last day of the then current Interest Period applicable to such LIBOR Rate
Loan or convert the then outstanding principal amount of each such LIBOR Rate
Loan to a Base Rate Loan as of the last day of such Interest Period.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Laws Affecting LIBOR Rate
Availability.</u> If, after the date hereof, the introduction of, or any change
in, any Applicable Law or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
(or any of their respective Lending Offices) with any request or directive
(whether or not having the force of law) issued after the date hereof of any
such Authority, central bank or comparable agency, shall make it unlawful or
impossible for any of the Lenders (or any of their respective Lending Offices)
to honor its obligations hereunder to make or maintain any LIBOR Rate Loan, such
Lender shall promptly give notice thereof to the Administrative Agent and the
Administrative Agent shall promptly give notice to the Borrower and the other
Lenders. Thereafter, until the Administrative Agent notifies the Borrower that
such circumstances no longer exist, (i) the obligations of the Lenders to make
LIBOR Rate Loans and the right of the Borrower to convert any Revolving Credit
Loan or continue any Revolving Credit Loan as a LIBOR Rate Loan shall be
suspended and thereafter the Borrower may select only Base Rate Loans hereunder,
and (ii) if any of the Lenders may not lawfully continue to maintain a LIBOR
Rate Loan to the end of the then current Interest Period applicable thereto as a
LIBOR Rate Loan, the applicable LIBOR Rate Loan shall immediately be converted
to a Base Rate Loan for the remainder of such Interest Period.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (c) <u>Increased Costs.</u> If, after the
date hereof, the introduction of, or any change in, any Applicable Law, or in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration</p>
<p align="center">27</p>
<hr noshade size="1" color="#000000">
<p align="left">thereof, or compliance by any of the Lenders (or any of their
respective Lending Offices) with any request or directive (whether or not having
the force of law) issued after the date hereof of such Authority, central bank
or comparable agency:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) shall subject any of the Lenders (or
  any of their respective Lending Offices) to any tax, duty or other charge with
  respect to any Revolving Credit Loan, Letter of Credit or Application or shall
  change the basis of taxation of payments to any of the Lenders (or any of
  their respective Lending Offices) of the principal of or interest on any
  Revolving Credit Loan, Letter of Credit or Application or any other amounts
  due under this Agreement in respect thereof (except for changes in the rate of
  tax on the overall net income of any of the Lenders or any of their respective
  Lending Offices imposed by the jurisdiction in which such Lender is organized
  or is or should be qualified to do business or such Lending Office is
  located); or</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (ii) shall impose, modify or deem
  applicable any reserve (including, without limitation, any imposed by the
  Board of Governors of the Federal Reserve System), special deposit, insurance
  or capital or similar requirement against assets of, deposits with or for the
  account of, or credit extended by any of the Lenders (or any of their
  respective Lending Offices) or shall impose on any of the Lenders (or any of
  their respective Lending Offices) or the foreign exchange and interbank
  markets any other condition affecting any Revolving Credit Loan; and the
  result of any of the foregoing is to increase the costs to any of the Lenders
  of maintaining any LIBOR Rate Loan or issuing or participating in Letters of
  Credit or to reduce the yield or amount of any sum received or receivable by
  any of the Lenders under this Agreement or under any other Loan Document in
  respect of a LIBOR Rate Loan or Letter of Credit or Application, then such
  Lender may promptly notify the Administrative Agent, and the Administrative
  Agent shall promptly notify the Borrower of such fact and demand compensation
  therefor and, within fifteen (15) days after such notice by the Administrative
  Agent, the Borrower shall pay to such Lender such additional amount or amounts
  as will compensate such Lender or Lenders for such increased cost or
  reduction. The Administrative Agent and the applicable Lender will promptly
  notify the Borrower of any event of which it has knowledge which will entitle
  such Lender to compensation pursuant to this Section 5.9(c); provided, that
  the Administrative Agent shall incur no liability whatsoever to the Lenders or
  the Borrower in the event it fails to do so. The amount of such compensation
  shall be determined, in the applicable Lender's reasonable discretion, based
  upon the assumption that such Lender funded its Revolving Credit Commitment
  Percentage of the LIBOR Rate Loans in the London interbank market and using
  any reasonable attribution or averaging methods which such Lender deems
  appropriate and practical; provided that no compensation shall be payable
  pursuant to the above if the applicable Lender fails to demand compensation
  for such increased costs within one-hundred eighty (180) days following the
  date on which such Lender has actual knowledge of the event resulting in such
  increase. A certificate of such Lender setting forth in reasonable detail the
  basis for determining such amount or amounts necessary to compensate such
  Lender shall be forwarded to the Borrower through the Administrative Agent and
  shall be conclusively presumed to be correct save for manifest error.</p>
</blockquote>
<p align="left">&nbsp;&nbsp;&nbsp; (d) <u>Mitigation Obligations; Replacement of
Lenders.</u></p>
<p align="left">&nbsp;&nbsp;&nbsp; (i) If any Lender requests compensation under
this Section 5.9, or if the Borrower is required to pay any additional amount to
any Lender or any Governmental Authority for the account of any Lender pursuant
to Section 5.12, then such Lender shall use reasonable</p>
<p align="center">28</p>
<hr noshade size="1" color="#000000">
<p align="left">efforts to designate a different lending office for funding or
booking its Revolving Credit Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (A) would eliminate
or reduce amounts payable pursuant to this Section 5.9 or Section 5.12, as the
case may be, in the future and (B) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (ii) If any Lender requests compensation
under this Section 5.9, or if the Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 5.12, or if any Lender defaults in its obligation to fund
Revolving Credit Loans hereunder, then the Borrower may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 14.10), all its interests, rights and
obligations under this Agreement to an Eligible Assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (A) the Borrower shall have received the prior
written consent of the Administrative Agent (and, if a participation in a Letter
of Credit is being assigned, the Issuing Lender that issued such Letter of
Credit), which consent shall not unreasonably be withheld, (B) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Revolving Credit Loans and participations in Letters of Credit, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (C) in the case of
any such assignment resulting from a claim for compensation under this Section
5.9, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.</p>
<p align="left">SECTION 5.10. <u>Indemnity.</u> The Borrower hereby indemnifies
each of the Lenders against any loss or expense which may arise or be
attributable to each Lender's obtaining, liquidating or employing deposits or
other funds acquired to effect, fund or maintain any Revolving Credit Loan (a)
as a consequence of any failure by the Borrower to make any payment when due of
any amount due hereunder in connection with a LIBOR Rate Loan, (b) due to any
failure of the Borrower to borrow on a date specified therefor in a Notice of
Revolving Credit Borrowing or Notice of Continuation/Conversion or (c) due to
any payment, prepayment or conversion of any LIBOR Rate Loan on a date other
than the last day of the Interest Period therefor. The amount of such loss, cost
or expense to any Lender shall be deemed to equal an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
LIBOR Rate that would have been applicable to such Loan, for the period from the
date of such event to the last day of the then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period
that would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid, were it to bid, at the commencement
of such period, for Dollar deposits of a comparable amount and period from other
banks in the London interbank market; provided that no compensation shall be
payable pursuant to the above if the applicable Lender fails to demand
compensation for such increased costs within one-hundred eighty (180) days
following the date on which such Lender has actual knowledge of the event
resulting in such increase. A certificate of such Lender setting forth in
reasonable detail the basis for determining such amount or</p>
<p align="center">29</p>
<hr noshade size="1" color="#000000">
<p align="left">amounts necessary to compensate such Lender shall be forwarded
to the Borrower through the Administrative Agent and shall be conclusively
presumed to be correct save for manifest error.</p>
<p align="left">SECTION 5.11. <u>Capital Requirements.</u> If either (a) the
introduction of, or any change in, or in the interpretation of, any Applicable
Law or (b) compliance with any guideline or request issued after the date hereof
from any central bank or comparable agency or other Governmental Authority
(whether or not having the force of law), has or would have the effect of
reducing the rate of return on the capital of, or has affected or would affect
the amount of capital required to be maintained by, any Lender or any
corporation controlling such Lender as a consequence of, or with reference to
any Lender's Revolving Credit Commitment and other commitments of this type,
below the rate which the Lender or such other corporation could have achieved
but for such introduction, change or compliance, then within five (5) Business
Days after written demand by any such Lender, the Borrower shall pay to such
Lender from time to time as specified by such Lender additional amounts
sufficient to compensate such Lender or other corporation for such reduction;
provided that no compensation shall be payable pursuant to the above if the
applicable Lender fails to demand compensation for such increased costs within
one-hundred eighty (180) days following the date on which such lender has actual
knowledge of the event resulting in such increase. A certificate of such Lender
setting forth in reasonable detail the basis for determining such amounts
necessary to compensate such Lender shall be forwarded to the Borrower through
the Administrative Agent and shall be conclusively presumed to be correct save
for manifest error.</p>
<p align="left">SECTION 5.12. <u>Taxes.</u> (a) <u>Payments Free and Clear.</u>
Any and all payments by the Borrower hereunder or under the Revolving Credit
Notes or the Letters of Credit shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholding, and all liabilities with respect thereto excluding, (i)
in the case of each Lender and the Administrative Agent, income and franchise
taxes imposed on (or measured by) its net income by the United States of America
or by the jurisdiction under the laws of which such Lender or the Administrative
Agent (as the case may be) is organized or its principal office is located or is
or should be qualified to do business or any political subdivision thereof, or
in the case of any Lender, in which its applicable Lending Office is located
(provided, however, that no Lender shall be deemed to be located in any
jurisdiction solely as a result of taking any action related to this Agreement
or the Revolving Credit Notes or Letters of Credit) and (ii) any branch profits
tax imposed by the United States of America or any similar tax imposed by any
other jurisdiction described in clause (i) above (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as &quot;<u>Taxes</u>&quot;). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Revolving Credit Note or Letter of Credit to any Lender
or the Administrative Agent, (A) the sum payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 5.12) such Lender or
the Administrative Agent (as the case may be) receives an amount equal to the
amount such party would have received had no such deductions been made, (B) the
Borrower shall make such deductions, (C) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance with
applicable law, and (D) the Borrower shall deliver to the Administrative Agent
evidence of such payment to the relevant taxing authority or other authority in
the manner provided in Section 5.12(d). The Borrower shall not, however, be
required to pay any amounts pursuant to clause (A) of the preceding sentence to
any Foreign Lender or the Administrative Agent not organized under the laws of
the United States of America or a state thereof (or the District of Columbia) if
such Foreign Lender or the Administrative Agent fails to comply with the
requirements of paragraph (e) of this Section 5.12 or Section 5.9(d), as the
case may be.</p>
<p align="center">30</p>
<hr noshade size="1" color="#000000">
<p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Stamp and Other Taxes.</u> In
addition, the Borrower shall pay any present or future stamp, registration,
recordation or documentary taxes or any other similar fees or charges or excise
or property taxes, levies of the United States or any state or political
subdivision thereof or any applicable foreign jurisdiction which arise from any
payment made hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement, the Revolving Credit Loans, the
Letters of Credit, the other Loan Documents (hereinafter referred to as &quot;<u>Other
Taxes</u>&quot;).</p>
<p align="left">&nbsp;&nbsp;&nbsp; (c) <u>Indemnity.</u> The Borrower shall
indemnify each Lender and the Administrative Agent for the full amount of Taxes
and Other Taxes (including, without limitation, any Taxes and Other Taxes
imposed by any jurisdiction on amounts payable under this Section 5.12) paid by
such Lender or the Administrative Agent (as the case may be) and any liability
(including penalties, interest and reasonable expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. A certificate as to the amount of such payment or liability
prepared by a Lender or the Administrative Agent, absent manifest error, shall
be conclusive, provided that if the Borrower reasonably believes that such Taxes
or Other Taxes were not correctly or legally asserted, such Lender or the
Administrative Agent (as the case may be) shall use reasonable efforts to
cooperate with the Borrower, at the Borrower's expense, to obtain a refund of
such Taxes or Other Taxes. Such indemnification shall be made within thirty (30)
days from the date such Lender or the Administrative Agent (as the case may be)
makes written demand therefor. If a Lender or the Administrative Agent shall
become aware that it is entitled to receive a refund in respect of Taxes or
Other Taxes, it promptly shall notify the Borrower of the availability of such
refund and shall, within sixty (60) days after receipt of a request by the
Borrower pursue or timely claim such refund at the Borrower's expense. If any
Lender or the Administrative Agent receives a refund in respect of any Taxes or
Other Taxes for which such Lender or the Administrative Agent has received
payment from the Borrower hereunder, it promptly shall repay such refund (plus
interest received, if any) to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
5.12 with respect to Taxes or Other Taxes giving rise to such refund), provided
that the Borrower, upon the request of such Lender or the Administrative Agent,
agrees to return such refund (plus any penalties, interest or other charges
required to be paid) to such Lender or the Administrative Agent in the event
such Lender or the Administrative Agent is required to repay such refund to the
relevant taxing authority.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (d) <u>Evidence of Payment.</u> Within thirty
(30) days after the date of any payment of Taxes or Other Taxes, the Borrower
shall furnish to the Administrative Agent, at its address referred to in Section
14.1, the original or a certified copy of a receipt evidencing payment thereof
or other evidence of payment satisfactory to the Administrative Agent.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (e) <u>Delivery of Tax Forms.</u> Each
Foreign Lender shall deliver to the Borrower, with a copy to the Administrative
Agent, on the Closing Date or concurrently with the delivery of the relevant
Assignment and Acceptance, as applicable, (i) two United States Internal Revenue
Service Forms W-8ECI or Forms W-8BEN, as applicable (or successor forms),
properly completed and certifying in each case that such Foreign Lender is
entitled to a complete exemption from withholding or deduction for or on account
of any United States federal income taxes, and (ii) an Internal Revenue Service
Form W-8 or W-9 or successor applicable form, as the case may be, to establish
an exemption from United States backup withholding taxes. Each Foreign Lender
further agrees to deliver to the Borrower, with a copy to the Administrative
Agent, a Form W-8BEN or W-8ECI and Form W-8 or W-9, or successor applicable
forms or manner of certification, as the case may be, on or before the date that
any such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form</p>
<p align="center">31</p>
<hr noshade size="1" color="#000000">
<p align="left">previously delivered by it to the Borrower, certifying in the
case of a Form W-8BEN or W-8ECI that such Foreign Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes (unless in any such case an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders such
forms inapplicable or the exemption to which such forms relate unavailable and
such Foreign Lender notifies the Borrower and the Administrative Agent that it
is not entitled to receive payments without deduction or withholding of United
States federal income taxes) and, in the case of a Form W-8 or W-9, establishing
an exemption from United States backup withholding tax.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (f) <u>Survival.</u> Without prejudice to the
survival of any other agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 5.12 shall survive the
payment in full of the Obligations and the termination of the Revolving Credit
Commitment.</p>
<p align="left"><b>ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING</b></p>
<p align="left">SECTION 6.1. <u>Closing.</u> The closing shall take place at the
offices of Shearman &amp; Sterling at 10:00 a.m. on June 10, 2003 or at such
other location, on such other date and at such other time as the parties hereto
shall mutually agree.<br>
SECTION 6.2. Conditions to Closing and Initial Revolving Credit Loans and
Letters of Credit. The obligation of the Lenders to close this Agreement and to
make the initial Revolving Credit Loans or issue the initial Letters of Credit
is subject to the satisfaction or waiver of each of the following conditions:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (a) <u>Executed Loan Documents.</u> This
  Agreement and the Revolving Credit Notes (to the extent requested as provided
  herein) shall have been duly authorized, executed and delivered to the
  Administrative Agent by the parties thereto, shall be in full force and effect
  and no default shall exist thereunder, and the Borrower shall have delivered
  original counterparts thereof to the Administrative Agent.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Closing Certificates; Etc.</u></p>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) <u>Officers' Certificate of the
  Borrower.</u> The Administrative Agent shall have received a certificate from
  a Responsible Officer, in form and substance reasonably satisfactory to the
  Administrative Agent, to the effect that all representations and warranties of
  the Borrower contained in this Agreement and the other Loan Documents are
  true, correct and complete in all material respects; that the Borrower is not
  in violation of any of the covenants contained in this Agreement and the other
  Loan Documents; that, after giving effect to the transactions contemplated by
  this Agreement, no Default or Event of Default has occurred and is continuing;
  and that each of the closing conditions has been satisfied or waived (assuming
  satisfaction of the Administrative Agent where not advised otherwise).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (ii) <u>General Certificate of the
  Borrower.</u> The Administrative Agent shall have received a certificate of
  the secretary, assistant secretary or general counsel of the Borrower
  certifying as to the incumbency and genuineness of the signature of each
  officer of the Borrower executing Loan Documents to which it is a party and
  certifying that attached thereto is a true, correct and complete copy of (A)
  the articles of incorporation of the Borrower and all amendments thereto,
  certified as of a recent date by</p>
</blockquote>
<p align="center">32</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">the appropriate Governmental Authority in its jurisdiction of
  incorporation, (B) the bylaws of the Borrower as in effect on the date of such
  certifications, (C) resolutions duly adopted by the Board of Directors of the
  Borrower authorizing the borrowings contemplated hereunder and the execution,
  delivery and performance of this Agreement and the other Loan Documents to
  which it is a party, and (D) each certificate required to be delivered
  pursuant to Section 6.2(b)(iii).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iii) <u>Certificates of Good Standing.</u>
  The Administrative Agent shall have received long-form certificates as of a
  recent date of the good standing of the Borrower under the laws of its
  jurisdiction of organization and short-form certificates as of a recent date
  of the good standing of the Borrower under the laws of each of California, New
  York, North Carolina, Texas, Tennessee and Washington.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iv) <u>Opinions of Counsel.</u> The
  Administrative Agent shall have received favorable opinions of Ira M. Dansky,
  General Counsel to the Borrower, Cravath, Swaine &amp; Moore LLP, special
  counsel to the Borrower, and Schnader Harrison Segal &amp; Lewis LLP,
  Pennsylvania counsel to the Borrower, addressed to the Administrative Agent
  and the Lenders with respect to the Borrower, the Loan Documents and such
  other matters as the Lenders shall reasonably request.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (c) <u>Consents; Defaults.</u></p>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) <u>Governmental and Third Party
  Approvals.</u> The Borrower shall have obtained all material approvals,
  authorizations and consents of any Person and of all Governmental Authorities
  and courts having jurisdiction with respect to the transactions contemplated
  by this Agreement and the other Loan Documents.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (ii) <u>No Event of Default.</u> No Default
  or Event of Default shall have occurred and be continuing.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (d) <u>Financial Matters.</u></p>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) <u>Financial Statements.</u> The
  Administrative Agent shall have received the audited Consolidated financial
  statements of Jones Apparel Group and its Subsidiaries for the Fiscal Year
  ended on December 31, 2002 and the unaudited financial statements of Jones
  Apparel Group and its Subsidiaries for the fiscal quarter ended on April 5,
  2003.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (ii) <u>Financial Condition Certificate.</u>
  The Borrower shall have delivered to the Administrative Agent a certificate,
  in form and substance reasonably satisfactory to the Administrative Agent, and
  certified by a Responsible Officer, that the financial projections previously
  delivered to the Administrative Agent were prepared in good faith based upon
  assumptions believed to be reasonable at the time.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iii) <u>Payment at Closing; Fee Letters.</u>
  The Borrower shall have paid the fees set forth or referenced in Section
  5.3(c) and any other accrued and unpaid fees or commissions due hereunder
  (including, without limitation, reasonable legal fees and expenses) to the
  Administrative Agent and Lenders, and to any other Person such amount as may
  be due thereto in connection with the transactions contemplated hereby,
  including all taxes, fees and other charges in connection with the execution,
  delivery, recording, filing and registration of any of the Loan Documents. The
  Administrative Agent shall</p>
</blockquote>
<p align="center">33</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">have received duly authorized and executed copies of the fee
  letter agreement referred to in Section 5.3(c).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (e) <u>Miscellaneous.</u></p>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) Notice of Revolving Credit Borrowing.
  The Administrative Agent shall have received a Notice of Revolving Credit
  Borrowing from the Borrower in accordance with Section 2.2(a) and Section 4.2,
  and a Notice of Account Designation specifying the account or accounts to
  which the proceeds of any Revolving Credit Loans made after the Closing Date
  are to be disbursed.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (ii) Proceedings and Documents. All
  opinions, certificates and other instruments and all proceedings in connection
  with the transactions contemplated by this Agreement shall be satisfactory in
  form and substance to the Lenders.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iii) Investment Policy. The Borrower shall
  have delivered to the Administrative Agent a true and complete copy of the
  investment policy referenced in Section 11.4(b) in form and content reasonably
  acceptable to the Administrative Agent.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (f) <u>Refinancing.</u> On the Closing Date
  hereunder, (i) all outstanding loans under the Prior Credit Agreement (&quot;<u>Existing
  Loans</u>&quot;) shall be replaced by Revolving Credit Loans hereunder and the
  Administrative Agent shall make such transfers of funds as are necessary in
  order that the outstanding balance of such Revolving Credit Loans, together
  with any Revolving Credit Loans funded on the Closing Date, reflect the
  Revolving Credit Commitment of the Lenders hereunder, (ii) all outstanding
  letters of credit issued pursuant to the Prior Credit Agreement shall be
  deemed Letters of Credit hereunder and each Lender shall purchase a
  participation therein pursuant to Section 3.4 in accordance with its Revolving
  Credit Commitment Percentage, (iii) there shall have been paid in cash in full
  all accrued but unpaid interest due on the Existing Loans up to but excluding
  the Closing Date, (iv) there shall have been paid in cash in full all accrued
  but unpaid fees due under the Prior Credit Agreement up to but excluding the
  Closing Date and all other amounts, costs and expenses then owing to any of
  the Prior Lenders and/or any Agent, as agent under the Prior Credit Agreement,
  in each case to the satisfaction of such Agent or Prior Lender, as the case
  may be, regardless of whether or not such amounts would otherwise be due and
  payable at such time pursuant to the terms of the Prior Credit Agreement, (v)
  all outstanding promissory notes issued by the Borrower to the Prior Lenders
  under the Prior Credit Agreement shall be deemed canceled and the originally
  executed copies thereof shall be canceled and promptly returned to the
  Administrative Agent who shall promptly forward such notes to the Borrower and
  (vi) the commitments and, except as expressly set forth in the Prior Credit
  Agreement, other obligations and rights of the Borrower and the Prior Lenders
  shall be terminated without any further action hereunder or thereunder.</p>
</blockquote>
<p align="left">SECTION 6.3. <u>Conditions to All Extensions of Credit.</u> The
obligations of the Lenders to make any Extensions of Credit are subject to the
satisfaction of the following conditions precedent on the relevant borrowing or
issue date, as applicable:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (a) <u>Continuation of Representations and
  Warranties.</u> The representations and warranties contained in Article VII
  shall be true and correct on and as of such borrowing or issuance date with
  the same effect as if made on and as of such date; except for any</p>
</blockquote>
<p align="center">34</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">representation and warranty made as of an earlier date, which
  representation and warranty shall remain true and correct as of such earlier
  date.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (b) <u>No Existing Default.</u> No Default
  or Event of Default shall have occurred and be continuing hereunder (i) on the
  borrowing date with respect to such Revolving Credit Loan or after giving
  effect to the Revolving Credit Loans to be made on such date or (ii) on the
  issue, extension or renewal date with respect to such Letter of Credit or
  after giving effect to such Letter of Credit on such date.</p>
</blockquote>
<p align="left"><b>ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE CREDIT
PARTIES</b></p>
<p align="left">SECTION 7.1. <u>Representations and Warranties.</u> To induce
the Administrative Agent and Lenders to enter into this Agreement and to induce
the Lenders to make Extensions of Credit, the Credit Parties hereby represent
and warrant to the Administrative Agent and Lenders that:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (a) <u>Organization; Power; Qualification.</u>
  Each of the Credit Parties and their Subsidiaries is duly organized, validly
  existing and in good standing under the laws of the jurisdiction of its
  incorporation or formation, has the power and authority to own its properties
  and to carry on its business as now being and hereafter proposed to be
  conducted and is duly qualified and authorized to do business in each
  jurisdiction in which the character of its properties or the nature of its
  business requires such qualification and authorization, except where the
  failure to do so could not reasonably be expected to have a Material Adverse
  Effect.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Ownership.</u> Each Subsidiary of
  each of the Credit Parties as of the Closing Date is listed on Schedule
  7.1(b). As of the Closing Date, the capitalization of the Credit Parties and
  their Subsidiaries consists of the number of shares, authorized, issued and
  outstanding, of such classes and series, with or without par value, described
  on Schedule 7.1(b). As of the Closing Date, all outstanding shares have been
  duly authorized and validly issued and are fully paid and nonassessable. The
  shareholders of the Subsidiaries of the Credit Parties and the number of
  shares owned by each as of the Closing Date are described on Schedule 7.1(b).
  As of the Closing Date, there are no outstanding stock purchase warrants,
  subscriptions, options, securities, instruments or other rights of any type or
  nature whatsoever, which are convertible into, exchangeable for or otherwise
  provide for or permit the issuance of capital stock of the Credit Parties or
  their Subsidiaries, except as described on Schedule 7.1(b).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (c) <u>Authorization of Agreement, Loan
  Documents and Borrowing.</u> Each of the Credit Parties and, if applicable,
  their Subsidiaries has the right, power and authority and has taken all
  necessary corporate and other action to authorize the execution, delivery and
  performance of each of the Loan Documents to which it is a party in accordance
  with their respective terms. Each of the Loan Documents have been duly
  executed and delivered by the duly authorized officers of the Credit Parties
  and each of their Subsidiaries party thereto, as applicable, and each such
  document constitutes the legal, valid and binding obligation of the Credit
  Parties and, if applicable, each of their Subsidiaries party thereto,
  enforceable in accordance with its terms, except as such enforcement may be
  limited by bankruptcy, insolvency, reorganization, moratorium or similar state
  or federal debtor relief laws from time to time in effect which affect the
  enforcement of creditors' rights in general and the availability of equitable
  remedies.</p>
</blockquote>
<p align="center">35</p>
<hr noshade size="1" color="#000000">
<blockquote>
<p align="left">&nbsp;&nbsp;&nbsp; (d) <u>Compliance of Agreement, Loan
Documents and Borrowing with Laws, Etc.</u> The execution, delivery and
performance by the Credit Parties and their Subsidiaries of the Loan Documents
to which each such Person is a party, in accordance with their respective terms,
the borrowings hereunder and the transactions contemplated hereby do not and
will not, by the passage of time, the giving of notice or otherwise, (i) require
any of the Credit Parties or any of their Subsidiaries to obtain any
Governmental Approval not otherwise already obtained or violate any Applicable
Law relating to the Credit Parties or any of their Subsidiaries, (ii) conflict
with, result in a breach of or constitute a default under the articles of
incorporation, bylaws or other organizational documents of the Credit Parties or
any of their Subsidiaries or any indenture or other material agreement or
instrument to which such Person is a party or by which any of its properties may
be bound or any Governmental Approval relating to such Person except as could
not reasonably be expected to have a Material Adverse Effect, or (iii) result in
or require the creation or imposition of any material Lien upon or with respect
to any property now owned or hereafter acquired by such Person.</p>

<p align="left">&nbsp;&nbsp;&nbsp; (e) <u>Compliance with Law; Governmental
Approvals.</u> Other than with respect to environmental matters, which are
treated exclusively in Section 7.1(h) hereof, each of the Credit Parties and
their Subsidiaries (i) has all Governmental Approvals required by any Applicable
Law for it to conduct its business, each of which is in full force and effect,
is final and not subject to review on appeal and is not the subject of any
pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, and (ii) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Laws relating to it
or any of its respective properties; in each case, except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect.</p>

<p align="left">&nbsp;&nbsp;&nbsp; (f) <u>Tax Returns and Payments.</u> Each of
the Credit Parties and their Subsidiaries has timely filed or caused to be
timely filed all federal and state, local and other tax returns required by
Applicable Law to be filed, and has paid, or made adequate provision for the
payment of, all federal and state, local and other taxes, assessments and
governmental charges or levies upon it and its property, income, profits and
assets which are due and payable, except (a) taxes that are being contested in
good faith by appropriate proceedings and for which such Credit Party or
Subsidiary, as applicable, has set aside on its books adequate reserves to the
extent required by GAAP or (b) to the extent the failure to do so could not
reasonably be expected to have a Material Adverse Effect. No Governmental
Authority has asserted any material Lien or other claim against the Credit
Parties or any Subsidiary thereof with respect to unpaid taxes (except for taxes
not yet due) which has not been discharged or resolved.</p>

<p align="left">&nbsp;&nbsp;&nbsp; (g) <u>Intellectual Property Matters.</u>
Each of the Credit Parties and its Subsidiaries owns or possesses rights to use
all franchises, licenses, copyrights, copyright applications, patents, patent
rights or licenses, patent applications, trademarks, trademark rights, trade
names, trade name rights, copyrights and rights with respect to the foregoing
which are required to conduct its business except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect. Except as
disclosed on Schedule 7.1(g), no event has occurred which, to the knowledge of
the Credit Parties, permits, or after notice or lapse of time or both would
permit, the revocation or termination of any such rights, and, to the knowledge
of the Credit Parties, neither the Credit Parties nor any Subsidiary thereof is
liable to any Person for infringement under</p>

</blockquote>
<p align="center">36</p>

<hr noshade size="1" color="#000000">
<blockquote>
<p align="left">Applicable Law with respect to any such rights as a result of
its business operations, except as could not reasonably be expected to have a
Material Adverse Effect.</p>

<p align="left">&nbsp;&nbsp;&nbsp; (h) <u>Environmental Matters.</u> Except as
could not reasonably be expected to have a Material Adverse Effect:</p>

  <blockquote>
<p align="left">&nbsp;&nbsp;&nbsp; (i) The properties of the Credit Parties and
their Subsidiaries do not contain, and to their knowledge have not previously
contained, any Hazardous Materials in amounts or concentrations which (A)
constitute or constituted a violation of applicable Environmental Laws or (B)
could give rise to liability under applicable Environmental Laws;</p>

<p align="left">&nbsp;&nbsp;&nbsp; (ii) The properties of the Credit Parties and
their Subsidiaries and all operations conducted in connection therewith are in
compliance, and have been in compliance, with all applicable Environmental Laws,
and there are no Hazardous Materials at, under or about such properties or such
operations in amounts or concentrations which could reasonably be expected to
interfere with the continued operation of such properties;</p>

<p align="left">&nbsp;&nbsp;&nbsp; (iii) Neither any of the Credit Parties nor
any Subsidiary thereof has received any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters
or compliance with Environmental Laws, nor does any of the Credit Parties or any
Subsidiary thereof have knowledge or reason to believe that any such notice will
be received or is being threatened;</p>

<p align="left">&nbsp;&nbsp;&nbsp; (iv) To the knowledge of the Credit Parties,
Hazardous Materials have not been transported or disposed of from the properties
of the Credit Parties or any of their Subsidiaries in violation of, or in a
manner or to a location which could reasonably be expected to give rise to
liability under, Environmental Laws, nor, to the knowledge of the Credit
Parties, have any Hazardous Materials been generated, treated, stored or
disposed of at, on or under any of such properties in violation of, or in a
manner which could reasonably be expected to give rise to liability under, any
Environmental Laws;</p>

<p align="left">&nbsp;&nbsp;&nbsp; (v) No judicial proceedings or governmental
or administrative action is pending, or, to the knowledge of the Credit Parties,
threatened, under any Environmental Law to which any of the Credit Parties or
any Subsidiary thereof will be named as a party, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other orders,
or other administrative or judicial requirements outstanding under any
Environmental Law with respect to the properties or operations of the Credit
Parties and their Subsidiaries; and</p>

<p align="left">&nbsp;&nbsp;&nbsp; (vi) To the knowledge of the Credit Parties,
there has been no release, or to the best of the Credit Parties' knowledge, the
threat of release, of Hazardous Materials at or from the properties of the
Credit Parties or any of their Subsidiaries, in violation of or in amounts or in
a manner that could reasonably be expected to give rise to liability under
Environmental Laws.</p>

  </blockquote>
</blockquote>
<p align="center">37</p>

<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) <u>ERISA.</u></p>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) Each of the Credit Parties and each
  ERISA Affiliate is in compliance with all applicable provisions of ERISA and
  the regulations and published interpretations thereunder with respect to all
  Employee Benefit Plans except where any such non-compliance could not
  reasonably be expected to have a Material Adverse Effect. Except for any
  failure that would not reasonably be expected to have a Material Adverse
  Effect, each Employee Benefit Plan that is intended to be qualified under
  Section 401(a) of the Code has been determined by the Internal Revenue Service
  to be so qualified, and each trust related to such plan has been determined to
  be exempt under Section 501(a) of the Code. No liability that could reasonably
  be expected to result in a Material Adverse Effect has been incurred by the
  Credit Parties or any ERISA Affiliate which remains unsatisfied for any taxes
  or penalties with respect to any Employee Benefit Plan or any Multiemployer
  Plan;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (ii) No accumulated funding deficiency (as
  defined in Section 412 of the Code) has been incurred (without regard to any
  waiver granted under Section 412 of the Code), nor has any funding waiver from
  the Internal Revenue Service been received or requested with respect to any
  Pension Plan;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iii) Neither the Credit Parties nor any
  ERISA Affiliate has: (A) engaged in a nonexempt prohibited transaction
  described in Section 406 of ERISA or Section 4975 of the Code, (B) incurred
  any liability to the PBGC which remains outstanding other than the payment of
  premiums and there are no premium payments which are due and unpaid, (C)
  failed to make a required contribution or payment to a Multiemployer Plan, or
  (D) failed to make a required installment or other required payment under
  Section 412 of the Code except where any of the foregoing individually or in
  the aggregate could not reasonably be expected to have a Material Adverse
  Effect;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iv) No Termination Event that could
  reasonably be expected to result in a Material Adverse Effect has occurred or
  is reasonably expected to occur; and</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (v) No proceeding, claim, lawsuit and/or
  investigation is existing or, to the knowledge of the Credit Parties,
  threatened concerning or involving any Employee Benefit Plan that could
  reasonably be expected to result in a Material Adverse Effect.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (j) <u>Margin Stock.</u> Neither the Credit
  Parties nor any Subsidiary thereof is engaged principally or as one of its
  activities in the business of extending credit for the purpose of &quot;<u>purchasing</u>&quot;
  or &quot;<u>carrying</u>&quot; any &quot;<u>margin stock</u>&quot; (as each
  such term is defined or used in Regulation U of the Board of Governors of the
  Federal Reserve System). No part of the proceeds of any of the Revolving
  Credit Loans or Letters of Credit will be used for purchasing or carrying
  margin stock, unless the Credit Parties shall have given the Administrative
  Agent and Lenders prior notice of such event and such other information as is
  reasonably necessary to permit the Administrative Agent and Lenders to comply,
  in a timely fashion, with all reporting obligations required by Applicable
  Law, or for any purpose which violates, or which would be inconsistent with,
  the provisions of Regulation T, U or X of such Board of Governors.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (k) <u>Government Regulation.</u> Neither
  the Credit Parties nor any Subsidiary thereof is an &quot;<u>investment
  company</u>&quot; or a company &quot;<u>controlled</u>&quot; by an &quot;<u>investment
  company</u>&quot; (as each such term is defined or used in the Investment
  Company Act of 1940,</p>
</blockquote>
<p align="center">38</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">as amended) and neither the Credit Parties nor any Subsidiary
  thereof is, or after giving effect to any Extension of Credit will be, subject
  to regulation under the Public Utility Holding Company Act of 1935 or the
  Interstate Commerce Act, each as amended.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (l) <u>Burdensome Provisions.</u> Neither
  the Credit Parties nor any Subsidiary thereof is a party to any indenture,
  agreement, lease or other instrument, or subject to any corporate or
  partnership restriction, Governmental Approval or Applicable Law which is so
  unusual or burdensome as in the foreseeable future could be reasonably
  expected to have a Material Adverse Effect. The Credit Parties and their
  Subsidiaries do not presently anticipate that future expenditures needed to
  meet the provisions of any statutes, orders, rules or regulations of a
  Governmental Authority will be so burdensome as to have a Material Adverse
  Effect.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (m) <u>Financial Statements.</u> The (i)
  Consolidated balance sheets of Jones Apparel Group and its Subsidiaries as of
  December 31, 2002, and the related statements of income, stockholders' equity
  and cash flows for the Fiscal Years then ended and (ii) unaudited Consolidated
  balance sheet of Jones Apparel Group and its Subsidiaries as of April 5, 2003,
  and related unaudited interim statements of income, stockholders' equity and
  cash flows, copies of which have been furnished to the Administrative Agent
  and each Lender, are complete in all material respects and fairly present in
  all material respects the assets, liabilities and financial position of Jones
  Apparel Group and its Subsidiaries as at such dates, and the results of the
  operations and changes of financial position for the periods then ended,
  subject to normal year end adjustments. All such financial statements,
  including the related notes thereto, have been prepared in accordance with
  GAAP.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (n) <u>No Material Adverse Change.</u>
  Except as disclosed on Schedule 7.1(g), since the later to occur of (i) April
  5, 2003 or (ii) the date of the most recently delivered audited financial
  statements of Jones Apparel Group and its Subsidiaries, there has been no
  Material Adverse Effect.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (o) <u>Liens.</u> None of the properties
  and assets of the Credit Parties or any Subsidiary thereof is subject to any
  Lien, except Liens permitted pursuant to Section 11.3.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (p) <u>Debt and Guaranty Obligations.</u>
  Schedule 7.1(p) is a complete and correct listing of all Debt and Guaranty
  Obligations of the Credit Parties and their Subsidiaries as of the Closing
  Date in excess of $5,000,000.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (q) <u>Litigation.</u> Except for matters
  existing on the Closing Date and set forth on Schedule 7.1(q), there are no
  actions, suits or proceedings pending nor, to the knowledge of the Credit
  Parties, threatened against or affecting the Credit Parties or any Subsidiary
  thereof or any of their respective properties in any court or before any
  arbitrator of any kind or before or by any Governmental Authority, which could
  reasonably be expected to have a Material Adverse Effect or which relate to
  the enforceability of any Loan Documents.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (r) <u>Absence of Defaults.</u> To the
  knowledge of the Credit Parties, no event has occurred and is continuing which
  constitutes a Default or an Event of Default.</p>
</blockquote>
<p align="center">39</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (s) <u>Accuracy and Completeness of
  Information.</u> The Credit Parties have disclosed to the Lenders all
  agreements, instruments and corporate or other restrictions to which they or
  any of their Subsidiaries are subject, and all other matters known to them,
  that, individually or in the aggregate, could reasonably be expected to have a
  Material Adverse Effect. The written information, taken as a whole, furnished
  by or on behalf of the Credit Parties to the Administrative Agent or any
  Lender in connection with the negotiation of this Agreement or delivered
  hereunder (as modified or supplemented by other information so furnished) does
  not contain any material misstatement of fact or omit to state any material
  fact necessary to make the statements therein, in the light of the
  circumstances under which they were made, not misleading; provided that, with
  respect to projected financial information, the Credit Parties represent only
  that such information was prepared in good faith based upon assumptions
  believed to be reasonable at the time.</p>
</blockquote>
<p align="left">SECTION 7.2. <u>Survival of Representations and Warranties, Etc.</u>
All representations and warranties set forth in this Article VII and all
representations and warranties contained in any certificate delivered in
connection with this Agreement, or any of the Loan Documents (including but not
limited to any such representation or warranty made in or in connection with any
amendment thereto) shall constitute representations and warranties made under
this Agreement. All representations and warranties made under this Agreement
shall be made or deemed to be made at and as of the Closing Date, shall survive
the Closing Date and shall not be waived by the execution and delivery of this
Agreement, any investigation made by or on behalf of the Lenders or any
borrowing hereunder.</p>
<p align="left"><b>ARTICLE VIII FINANCIAL INFORMATION AND NOTICES</b></p>
<p align="left">&nbsp;&nbsp;&nbsp; Until all the Obligations (other than
Obligations under Hedging Agreements) have been paid and satisfied in full and
the Revolving Credit Commitment and L/C Commitment have terminated, unless
consent has been obtained in the manner set forth in Section 14.11 hereof, the
Credit Parties will furnish or cause to be furnished to the Administrative Agent
(which the Administrative Agent will promptly furnish to the Lenders at their
respective addresses as set forth on Schedule 1.1(a), or such other office as
may be designated to the Administrative Agent from time to time):</p>
<p align="left">SECTION 8.1. <u>Financial Statements and Projections.</u> (a)
Quarterly Financial Statements. As soon as practicable and in any event within
forty-five (45) days after the end of the first three fiscal quarters of each
Fiscal Year, an unaudited Consolidated balance sheet of Jones Apparel Group and
its Subsidiaries as of the close of such fiscal quarter and unaudited
Consolidated statements of income, stockholders' equity and cash flows for the
fiscal quarter then ended and that portion of the Fiscal Year then ended,
including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the
preceding Fiscal Year and prepared by Jones Apparel Group in accordance with
GAAP and, if applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the application of accounting
principles and practices during the period, and certified by a Responsible
Officer to present fairly in all material respects the financial condition of
Jones Apparel Group and its Subsidiaries as of their respective dates and the
results of operations of Jones Apparel Group and its Subsidiaries for the
respective periods then ended, subject to normal year end adjustments.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Annual Financial Statements.</u> As
soon as practicable and in any event within ninety (90) days after the end of
each Fiscal Year, an audited Consolidated balance sheet of Jones</p>
<p align="center">40</p>
<hr noshade size="1" color="#000000">
<p align="left">Apparel Group and its Subsidiaries as of the close of such
Fiscal Year and audited Consolidated statements of income, stockholders' equity
and cash flows for the Fiscal Year then ended, including the notes thereto, all
in reasonable detail setting forth in comparative form the corresponding figures
for the preceding Fiscal Year and prepared by a nationally recognized
independent certified public accounting firm in accordance with GAAP and, if
applicable, containing disclosure of the effect on the financial position or
results of operation of any change in the application of accounting principles
and practices during the year, and accompanied by a report thereon by such
certified public accountants that is not qualified with respect to scope
limitations imposed by Jones Apparel Group or any of its Subsidiaries or with
respect to accounting principles followed by Jones Apparel Group or any of its
Subsidiaries not in accordance with GAAP.</p>
<p align="left">SECTION 8.2. <u>Officer's Compliance Certificate.</u> At each
time financial statements are delivered pursuant to Section 8.1(a) or (b) a
certificate of a Responsible Officer in the form of Exhibit F attached hereto
(an &quot;<u>Officer's Compliance Certificate</u>&quot;).</p>
<p align="left">SECTION 8.3. <u>Accountants' Certificate.</u> At each time
financial statements are delivered pursuant to Section 8.1(b), a certificate of
the independent public accountants certifying such financial statements
addressed to the Administrative Agent for the benefit of the Lenders:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (a) stating that in making the examination
  necessary for the certification of such financial statements, they obtained no
  knowledge of any Default or Event of Default or, if such is not the case,
  specifying such Default or Event of Default and its nature and period of
  existence; and</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (b) including the calculations prepared by
  such accountants required to establish whether or not the Credit Parties and
  their Subsidiaries are in compliance with the financial covenants set forth in
  Article X hereof as at the end of each respective period.</p>
</blockquote>
<p align="left">SECTION 8.4. <u>Other Reports.</u> (a) Promptly but in any event
within ten (10) Business Days after the filing thereof, a copy of (i) each
report or other filing made by the Credit Parties or any or their Subsidiaries
with the Securities and Exchange Commission and required by the Securities and
Exchange Commission to be delivered to the shareholders of the Credit Parties or
any or their Subsidiaries, (ii) each report made by the Credit Parties or any of
their Subsidiaries to the Securities and Exchange Commission on Form 8-K and
(iii) each final registration statement of the Credit Parties or any of their
Subsidiaries filed with the Securities and Exchange Commission, except in
connection with pension plans and other employee benefit plans; and</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) Such other information regarding the
operations, business affairs and financial condition of the Credit Parties or
any of their Subsidiaries as the Administrative Agent or any Lender may
reasonably request.</p>
<p align="left">SECTION 8.5. <u>Notice of Litigation and Other Matters.</u>
Prompt (but in no event later than ten (10) Business Days after a principal
officer of the Credit Parties obtains knowledge thereof) telephonic (confirmed
in writing) or written notice of:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (a) the commencement of all proceedings and
  investigations by or before any Governmental Authority and all actions and
  proceedings in any court or before any arbitrator against or involving the
  Credit Parties or any Subsidiary thereof or any of their respective
  properties, assets or businesses which in the reasonable judgment of the
  Credit Parties could reasonably be expected to have a Material Adverse Effect;</p>
</blockquote>
<p align="center">41</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (b) any notice of any violation received by
  the Credit Parties or any Subsidiary thereof from any Governmental Authority
  including, without limitation, any notice of violation of Environmental Laws,
  which in the reasonable judgment of the Credit Parties in any such case could
  reasonably be expected to have a Material Adverse Effect;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (c) any Default or Event of Default; and</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (d) (i) any unfavorable determination
  letter from the Internal Revenue Service regarding the qualification of an
  Employee Benefit Plan under Section 401(a) of the Code (along with a copy
  thereof) which could reasonably be expected to have a Material Adverse Effect,
  (ii) all notices received by the Credit Parties or any ERISA Affiliate of the
  PBGC's intent to terminate any Pension Plan or to have a trustee appointed to
  administer any Pension Plan, (iii) all notices received by the Credit Parties
  or any ERISA Affiliate from a Multiemployer Plan sponsor concerning the
  imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA
  which could reasonably have a Material Adverse Effect and (iv) the Credit
  Parties obtaining knowledge or reason to know that the Credit Parties or any
  ERISA Affiliate has filed or intends to file a notice of intent to terminate
  any Pension Plan under a distress termination within the meaning of Section
  4041(c) of ERISA.</p>
</blockquote>
<p align="left">SECTION 8.6. <u>Accuracy of Information.</u> All written
information, reports, statements and other papers and data furnished by or on
behalf of the Credit Parties to the Administrative Agent or any Lender (other
than financial forecasts) whether pursuant to this Article VIII or any other
provision of this Agreement, shall be, at the time the same is so furnished,
true and complete in all material respects.</p>
<p align="left"><b>ARTICLE IX AFFIRMATIVE COVENANTS</b></p>
<p align="left">&nbsp;&nbsp;&nbsp; Until all of the Obligations (other than any
Obligations under any Hedging Agreement) have been paid and satisfied in full
and the Revolving Credit Commitment and L/C Commitment have terminated, unless
consent has been obtained in the manner provided for in Section 14.11, the
Credit Parties will, and will cause each of their Subsidiaries to:</p>
<p align="left">SECTION 9.1. <u>Preservation of Corporate Existence and Related
Matters.</u> Except as permitted by Section 11.5, preserve and maintain its
separate corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction where the
nature and scope of its activities require it to so qualify under Applicable Law
in which the failure to so qualify would have a Material Adverse Effect.</p>
<p align="left">SECTION 9.2. <u>Maintenance of Property.</u> Protect and
preserve all properties useful in and material to its business, including
copyrights, patents, trade names and trademarks; maintain in good working order
and condition all buildings, equipment and other tangible real and personal
property material to the conduct of its business, ordinary wear and tear
excepted; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its
business, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.</p>
<p align="left">SECTION 9.3. <u>Insurance.</u> Maintain insurance with
financially sound and reputable insurance companies against such risks and in
such amounts as are customarily maintained by similar</p>
<p align="center">42</p>
<hr noshade size="1" color="#000000">
<p align="left">businesses and as may be required by Applicable Law including,
without limitation, hazard and business interruption coverage.&nbsp;</p>
<p align="left">SECTION 9.4. <u>Accounting Methods and Financial Records.</u>
Maintain a system of accounting, and keep such books, records and accounts
(which shall be true and complete in all material respects) as may be required
or as may be necessary to permit the preparation of financial statements in
accordance with GAAP and in compliance with the regulations of any Governmental
Authority having jurisdiction over it or any of its properties.&nbsp;</p>
<p align="left">SECTION 9.5. <u>Payment and Performance of Obligations.</u> Pay
and perform all Obligations under this Agreement and the other Loan Documents,
and pay (a) all material taxes, assessments and other governmental charges that
may be levied or assessed upon it or any of its property, and (b) subject to the
thresholds and other limitations set forth in Section 12.1(f) or Section
12.1(g), all other material indebtedness, obligations and liabilities in
accordance with customary trade practices; provided, that the Credit Parties or
such Subsidiary may contest any item described in clause (a) or (b) of this
Section 9.5 in good faith so long as adequate reserves are maintained with
respect thereto to the extent required by GAAP. It is expected that all payments
in respect of the Obligations, the Existing Debt Securities and the Additional
Debt Securities will be made by the Borrower.&nbsp;</p>
<p align="left">SECTION 9.6. <u>Compliance With Laws and Approvals.</u> Observe
and remain in compliance with all Applicable Laws and maintain in full force and
effect all Governmental Approvals, in each case applicable to the conduct of its
business except where the failure to observe or comply could not reasonably be
expected to have a Material Adverse Effect.&nbsp;</p>
<p align="left">SECTION 9.7. <u>Environmental Laws.</u> In addition to and
without limiting the generality of Section 9.6, (a) comply with, and use best
efforts to ensure such compliance by all tenants and subtenants, with all
applicable Environmental Laws and obtain and comply with and maintain, and use
its best efforts to ensure that all tenants and subtenants obtain and comply
with and maintain, any and all licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws except where the failure to
comply could not reasonably have a Material Adverse Effect, (b) conduct and
complete all investigations, studies, sampling and testing, and all remedial,
removal and other actions required under Environmental Laws, and promptly comply
with all lawful orders and directives of any Governmental Authority regarding
Environmental Laws except (i) where the failure to do so could not reasonably be
expected to have a Material Adverse Effect or (ii) to the extent the Credit
Parties or any of their Subsidiaries are contesting, in good faith, any such
requirement, order or directive before the appropriate Governmental Authority so
long as adequate reserves are maintained with respect thereto to the extent
required by GAAP, and (c) defend, indemnify and hold harmless the Administrative
Agent and the Lenders, and their respective parents, Subsidiaries, Affiliates,
employees, agents, officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to the violation of, noncompliance with or liability
under any Environmental Laws applicable to the operations of the Credit Parties
or such Subsidiaries, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of the
foregoing directly result from the gross negligence or willful misconduct of the
party seeking indemnification therefor.</p>
<p align="center">43</p>
<hr noshade size="1" color="#000000">
<p align="left">SECTION 9.8. <u>Compliance with ERISA.</u> In addition to and
without limiting the generality of Section 9.6, (a) comply with all applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans, except
where the failure to comply could not reasonably be expected to have a Material
Adverse Effect, (b) not take any action or fail to take action the result of
which would result in a liability to the PBGC or to a Multiemployer Plan in an
amount that could reasonably be expected to have a Material Adverse Effect, and
(c) furnish to the Administrative Agent upon the Administrative Agent's request
such additional information about any Employee Benefit Plan concerning
compliance with this covenant as may be reasonably requested by the
Administrative Agent.</p>
<p align="left">SECTION 9.9. <u>Conduct of Business.</u> Engage only in
businesses in substantially the same fields as the businesses conducted on the
Closing Date (including, without limitation, the apparel, footwear, handbags,
accessories, jewelry, denim and cosmetics or other women's accoutrements
industries generally) and in lines of business reasonably related thereto
(collectively, &quot;Permitted Lines of Business&quot;), or as otherwise
permitted pursuant to the terms of this Agreement.</p>
<p align="left">SECTION 9.10. <u>Visits and Inspections.</u> Permit
representatives of the Administrative Agent or any Lender, from time to time
upon reasonable prior notice to visit and inspect its properties; inspect and
make extracts from its books, records and files, including, but not limited to,
management letters prepared by independent accountants; and discuss with its
principal officers, and its independent accountants, its business, assets,
liabilities, financial condition, results of operations and business prospects.</p>
<p align="left">SECTION 9.11. <u>Use of Proceeds.</u> The Credit Parties shall
use the proceeds of the Revolving Credit Loans and the Letters of Credit to (a)
refinance certain existing Debt, (b) for working capital and general corporate
purposes of the Credit Parties and their Subsidiaries, including acquisitions
and stock repurchases, and (c) the payment of certain fees and expenses incurred
in connection with the transactions contemplated hereby or thereby.</p>
<p align="left"><b>ARTICLE X FINANCIAL COVENANTS</b></p>
<p align="left">&nbsp;&nbsp;&nbsp; Until all of the Obligations (other than any
Obligations under any Hedging Agreement) have been paid and satisfied in full
and the Revolving Credit Commitment and L/C Commitment have terminated, unless
consent has been obtained in the manner set forth in Section 14.11 hereof, the
Credit Parties and their Subsidiaries on a Consolidated basis will not:</p>
<p align="left">SECTION 10.1. <u>Interest Coverage Ratio.</u> As of the end of
any fiscal quarter, permit the ratio (the &quot;Interest Coverage Ratio&quot;)
of (a) EBITDAR for the period of four (4) consecutive fiscal quarters ending on
or immediately prior to such date to (b) the sum of (i) Interest Expense paid or
payable in cash and (ii) Rental Expense, both for the period of four (4)
consecutive fiscal quarters ending on or immediately prior to such date, to be
less than 2.75 to 1.0.</p>
<p align="left">SECTION 10.2. <u>Minimum Net Worth.</u> As of the end of any
fiscal quarter, permit Consolidated Net Worth to be less than $1,750,000,000.</p>
<p align="left"><b>ARTICLE XI NEGATIVE COVENANTS</b></p>
<p align="left">&nbsp;&nbsp;&nbsp; Until all of the Obligations (other than any
Obligations under any Hedging Agreement) have been paid and satisfied in full
and the Revolving Credit Commitment has expired or been terminated, unless
consent has been obtained in the manner set forth in Section 14.11 hereof, the
Credit Parties will not and will not permit any of their Subsidiaries to:</p>
<p align="center">44</p>
<hr noshade size="1" color="#000000">
<p align="left">SECTION 11.1. <u>Limitations on Debt and Guaranty Obligations.</u>
Create, incur, assume or suffer to exist any Debt, including Guaranty
Obligations, except:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (a) the Obligations of the Credit Parties;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (b) the Five-Year Credit Agreement
  Obligations;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (c) Debt existing on the Closing Date
  (other than the Five-Year Credit Agreement Obligations), including the Debt as
  set forth on Schedule 7.1(p);</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (d) Debt in the form of additional credit
  facilities of the Credit Parties or their Subsidiaries for borrowings
  denominated in currencies other than Dollars; provided that the equivalent
  Dollar Amount of the aggregate commitment thereunder does not exceed
  $50,000,000 on any date of determination;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (e) Debt of the Credit Parties and their
  Subsidiaries, not otherwise permitted under this Section 11.1, incurred in
  connection with (i) Capitalized Leases, (ii) purchase money Debt, (iii) Debt
  of a Subsidiary incurred and outstanding on or prior to the date on which such
  Subsidiary was acquired by any Credit Party or otherwise became a Subsidiary
  of such Credit Party, or Debt assumed by a Credit Party or a Subsidiary
  thereof in connection with an asset acquisition which Debt was outstanding
  prior to the date of such asset acquisition (in each case, other than Debt
  incurred as consideration in, or to provide all or any portion of the funds or
  credit support utilized to consummate, the transaction or series of
  transactions pursuant to which such Subsidiary became a Subsidiary of such
  Credit Party or was otherwise acquired by such Credit Party or pursuant to
  which such assets were acquired) and (iv) any other unsecured Debt of the
  Subsidiaries of the Credit Parties in an aggregate outstanding amount
  (excluding any attributable Debt from the sale leaseback transaction involving
  the Credit Parties' distribution warehouse at South Hill, Virginia) not to
  exceed fifteen percent (15%) of Consolidated Net Worth of the Credit Parties
  and their Subsidiaries on any date of determination;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (f) additional Debt of the Credit Parties,
  not otherwise permitted under this Section 11.1, arising under or in
  connection with public or privately placed notes, debentures, bonds, or debt
  securities or related indentures or other agreements (the &quot;<u>Additional
  Debt Securities</u>&quot;) so long as no Default or Event of Default exists on
  the date any such Additional Debt Security is created or arises as a result of
  any borrowing thereunder, except in connection with the issuance of exchange
  securities in connection with any exchange offer registered under the
  Securities Act of 1933, as amended, following a private placement of
  Additional Debt Securities;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (g) other Debt of the Credit Parties, not
  otherwise permitted under this Section 11.1, in an aggregate outstanding
  amount not to exceed $300,000,000 on any date of determination;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (h) Debt of the Credit Parties to any
  Subsidiary or any other Credit Party and of any Subsidiary to the Credit
  Parties or any other Subsidiary;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) Debt incurred in respect of the
  extension, renewal, refinancing, replacement or refunding (collectively, the
  &quot;refinancing&quot;) of Debt incurred pursuant to clause (a), (b), (c) or
  (e); provided, that (i) such Debt is an aggregate principal amount (or if
  incurred</p>
</blockquote>
<p align="center">45</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p>with original issue discount, an aggregate issue price) not in excess of
  the sum of (x) the aggregate principal amount (or if incurred with original
  issue discount, the aggregate accreted value) then outstanding of the Debt
  being refinanced and (y) an amount necessary to pay any fees and expenses,
  including premiums and defeasance costs, related to such refinancing, (ii) the
  average life of such Debt is equal to or greater than the average life of the
  Debt being refinanced, (iii) the stated maturity of such Debt is no earlier
  than the stated maturity of the Debt being refinanced; and (iv) the new Debt
  shall not be senior in right of payment to the Debt that is being refinanced;
  provided, that none of the Debt permitted to be incurred by this Section shall
  expressly restrict, limit or otherwise encumber (unless such restriction,
  limitation or other encumbrance is a Permitted Encumbrance (as defined
  below)), the ability of any Subsidiary of the Credit Parties to make any
  payment to the Credit Parties or any of their Subsidiaries (in the form of
  dividends, intercompany advances or otherwise) for the purpose of enabling the
  Credit Parties to pay the Obligations. For purposes of this Section 11.1, with
  regard to any Debt, a &quot;Permitted Encumbrance&quot; shall mean any
  restriction, limitation or other encumbrance that applies solely if a default
  or event of default (other than a default resulting solely from the breach of
  a representation or warranty) occurs and is continuing under such Debt;
  provided further that, with respect to any default or event of default (other
  than a payment default, including as a result of acceleration, or a bankruptcy
  event with respect to the obligor of such Debt), such encumbrance or
  restriction may not prohibit dividends to the Credit Parties or any Subsidiary
  thereof to pay the Obligations for more than one hundred eighty (180) days in
  any consecutive three hundred sixty (360) day period; and</p>
  <p>&nbsp;&nbsp;&nbsp; (j) Debt incurred in connection with the Permitted
  Investment Policy as in effect on the date hereof.</p>
</blockquote>
<p>SECTION 11.2. [<u>Reserved</u>].</p>
<p>SECTION 11.3. <u>Limitations on Liens.</u> Create, incur, assume or suffer to
exist, any Lien on or with respect to any of its assets or properties (including
without limitation shares of capital stock or other ownership interests), real
or personal, whether now owned or hereafter acquired, except:</p>
<blockquote>
  <p>&nbsp;&nbsp;&nbsp; (a) Liens for taxes, assessments and other governmental
  charges or levies (excluding any Lien imposed pursuant to any of the
  provisions of ERISA or Environmental Laws) not yet due or as to which the
  period of grace, if any, related thereto has not expired or which are being
  contested in good faith and by appropriate proceedings if adequate reserves
  are maintained to the extent required by GAAP;</p>
  <p>&nbsp;&nbsp;&nbsp; (b) the claims of materialmen, mechanics, carriers,
  warehousemen, processors or landlords for labor, materials, supplies or
  rentals incurred in the ordinary course of business, (i) which are not overdue
  for a period of more than thirty (30) days or (ii) which are being contested
  in good faith and by appropriate proceedings;</p>
  <p>&nbsp;&nbsp;&nbsp; (c) Liens consisting of deposits or pledges made in the
  ordinary course of business in connection with, or to secure payment of,
  obligations under workers' compensation, unemployment insurance or similar
  legislation or obligations under customer service contracts;</p>
</blockquote>
<p align="center">46</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (d) Liens constituting encumbrances in the
  nature of zoning restrictions, easements and rights or restrictions of record
  on the use of real property, which do not, in any case, materially detract
  from the value of such property or materially impair the use thereof in the
  ordinary conduct of business;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (e) Liens of the Administrative Agent for
  the benefit of the Administrative Agent and the Lenders;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (f) Liens incurred in the ordinary course
  of business securing Debt of the Credit Parties permitted under Section 11.1
  not to exceed $75,000,000 in the aggregate outstanding in addition to Liens
  existing on the Closing Date;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (g) Liens existing on any property or asset
  prior to the acquisition thereof by the Credit Parties or any Subsidiary or
  existing on any property or asset of any Person that becomes a Subsidiary or
  is merged with or into the Credit Parties or any Subsidiary after the date
  hereof prior to the time such Person becomes a Subsidiary or is so merged;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (h) Liens in existence on the Closing Date
  and described on Schedule 11.3;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) Liens securing Debt incurred in
  connection with Capitalized Leases and purchase money Debt permitted under
  Section 11.1(e); provided that (i) such Liens shall be created substantially
  simultaneously with the acquisition of the related asset, (ii) such Liens do
  not at any time encumber any property other than the property financed by such
  Debt, (iii) the amount of Debt secured thereby is not increased and (iv) the
  principal amount of Debt secured by any such Lien shall at no time exceed one
  hundred percent (100%) of the original purchase price of such property at the
  time it was acquired;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (j) Liens incurred to secure appeal bonds
  and judgment and attachment Liens in respect of judgments or orders that do
  not constitute an Event of Default under Section 12.1(m);</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (k) Liens arising solely by virtue of any
  statutory or common law provision relating to banker's liens, rights of setoff
  or similar rights and remedies, in each case as to deposit accounts or other
  funds maintained with a creditor depository institution;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (l) deposits to secure the performance of
  bids, trade contracts, leases, statutory obligations, surety and appeal bonds,
  performance bonds and other obligations of a like nature, in each case in the
  ordinary course of business;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (m) Liens arising in the ordinary course of
  business that do not secure monetary obligations;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (n) Liens arising by the terms of letters
  of credit entered into in the ordinary course of business to secure
  reimbursement obligations thereunder;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (o) Liens securing Debt or other
  obligations between the Credit Parties and a Subsidiary or between
  Subsidiaries or Credit Parties;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (p) Liens granted to any bank or other
  institution securing the payments to be made to such bank or other institution
  by the Credit Parties or a Subsidiary of the Credit</p>
</blockquote>
<p align="center">47</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">Parties pursuant to any Hedging Agreement; provided that, such
  agreements are entered into in, or are incidental to, the ordinary course of
  business;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (q) The refinancing of any Lien referred to
  in clause (g), (h), (i) or (p) <u>provided</u>, that the principal amount of
  Debt (or, if incurred with original issue discount, an aggregate issue price)
  secured thereby and not otherwise authorized by clause (g), (h), (i) or (p)
  shall not exceed the principal amount of Debt (or if incurred without original
  issue discount, the aggregate accreted value) plus any fees and expenses,
  including premiums and defeasance costs, payable in connection with any such
  extension, renewal, replacement or refunding, so secured at the time of such
  extension, renewal, replacement or refunding; and</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (r) Liens incurred in connection with the
  Permitted Investment Policy as in effect on the date hereof.</p>
</blockquote>
<p align="left">SECTION 11.4. <u>Limitations on Loans, Advances, Investments and
Acquisitions.</u> Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock (other than capital stock of the Credit Parties),
interests in any partnership, limited liability company or joint venture
(including without limitation the creation or capitalization of any Subsidiary),
evidence of Debt or other obligation or security, substantially all or a portion
of the business or assets of any other Person or any other investment or
interest whatsoever in any other Person, or make or permit to exist, directly or
indirectly, any loans, advances or extensions of credit to, or any investment in
cash or by delivery of property in, any Person, or enter into, directly or
indirectly, any commitment or option in respect of the foregoing (collectively,
&quot;<u>Investments</u>&quot;) except:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (a) Investments in Subsidiaries existing on
  the Closing Date and the other existing loans, advances and Investments
  described on Schedule 11.4;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (b) Investments made in accordance with the
  Permitted Investment Policy;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (c) Investments by the Credit Parties or
  any Subsidiary in the form of acquisitions, including acquisitions of all or
  substantially all of the business or a line of business (whether by the
  acquisition of capital stock, assets or any combination thereof) of any other
  Person, so long as (i) a Responsible Officer certifies to the Administrative
  Agent and the Required Lenders that no Default or Event of Default has
  occurred and is continuing or would result from the closing of such
  acquisition, such certification to include, for any acquisition involving a
  purchase price in excess of $50,000,000, either individually or in a series of
  related transactions, a financial condition certificate to which is attached a
  pro forma balance sheet of Jones Apparel Group and its Subsidiaries setting
  forth on a pro forma basis the financial condition of Jones Apparel Group and
  its Subsidiaries on a Consolidated basis as of the most recently ended Fiscal
  Year, reflecting on a pro forma basis the effect of the transactions
  contemplated by such acquisition, including all fees and expenses in
  connection therewith, and evidencing compliance on a pro forma basis with the
  covenants contained in Article X hereof, and (ii) such acquisition meets
  either of the following requirements: (A) such acquisition is within a
  Permitted Line of Business, or (B) such acquisition is outside a Permitted
  Line of Business but the price for such acquisition, together with all other
  acquisitions outside the Permitted Lines of Business, does not exceed
  $50,000,000 in the aggregate;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (d) Investments (other than acquisitions)
  in the Permitted Lines of Business;</p>
</blockquote>
<p align="center">48</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (e) Investments (other than acquisitions)
  outside Permitted Lines of Business not in excess of $50,000,000 in the
  aggregate;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (f) loans and advances to third party
  contractors in the ordinary course of business and consistent with past
  practice not to exceed in an aggregate outstanding amount $6,000,000
  (excluding such loans and advances consisting of prepayments or advances for
  inventory or services); and loans and advances to employees of the Credit
  Parties and their Subsidiaries in an aggregate outstanding amount not to
  exceed $4,000,000; and</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (g) intercompany loans and advances among
  the Credit Parties and their Subsidiaries so long as permitted under the terms
  of Sections 11.1 and 11.3.</p>
</blockquote>
<p align="left">SECTION 11.5. <u>Limitations on Mergers and Liquidation.</u>
Merge, consolidate or enter into any similar combination with any other Person
or liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) except so long as no Default or Event of Default has occurred and
is continuing, or would result therefrom:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (a) any Credit Party may merge or
  consolidate with or into any Person; provided that (i) such Credit Party shall
  be the survivor of such merger or consolidation or (ii) the survivor assumes
  and succeeds to the Obligations of such Credit Party pursuant to an assumption
  agreement in form reasonably satisfactory to the Administrative Agent and the
  Required Lenders;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (b) any Wholly-Owned Subsidiary of the
  Credit Parties may merge or consolidate with or into any other Wholly-Owned
  Subsidiary of the Credit Parties;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (c) any Wholly-Owned Subsidiary may merge
  or consolidate with or into the Person such Wholly-Owned Subsidiary was formed
  to acquire in connection with an acquisition permitted by Section 11.4(b), (c)
  or (d);</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (d) any Wholly-Owned Subsidiary of the
  Credit Parties may merge or consolidate with or into any Credit Party;
  provided that, such Credit Party is the survivor of such merger or
  consolidation; and</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (e) any Credit Party may merge or
  consolidate with or into any other Credit Party.</p>
</blockquote>
<p align="left">SECTION 11.6. <u>Limitations on Sale or Transfer of Assets.</u>
Convey, sell, lease, assign, transfer or otherwise dispose of any of its
property, business or assets, whether now owned or hereafter acquired
(collectively, &quot;<u>sale</u>&quot;), except for the following:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (a) the sale of inventory or the factoring
  of accounts receivable in the ordinary course of business;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (b) the sale of obsolete assets no longer
  used or usable in the business of the Credit Parties or any of their
  Subsidiaries;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (c) the sale or discount without recourse
  of accounts receivable arising in the ordinary course of business in
  connection with the compromise or collection thereof;</p>
</blockquote>
<p align="center">49</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (d) the sale of assets between the Credit
  Parties and any Subsidiary or between Subsidiaries or Credit Parties;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (e) the sale of any other assets of the
  Credit Parties and their Subsidiaries outside the ordinary course of business
  so long as the total fair market value for all such sales on and after the
  Closing Date on an aggregate basis does not at any time exceed thirty-three
  percent (33%) of Consolidated Net Worth;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (f) the sale leaseback transaction
  involving the Credit Parties' distribution warehouse in South Hill, Virginia;
  and</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (g) the sale of assets purchased in
  accordance with the Permitted Investment Policy as in effect on the date
  hereof.</p>
</blockquote>
<p align="center">50</p>
<hr noshade size="1" color="#000000">
<p align="left">SECTION 11.7. <u>Limitations on Dividends and Distributions.</u>
Declare or pay any dividends upon any of its capital stock; purchase, redeem,
retire or otherwise acquire, directly or indirectly, any shares of its capital
stock, or make any distribution of cash, property or assets among the holders of
shares of its capital stock, or make any change in its capital structure that
could reasonably be expected to have a Material Adverse Effect; provided that:
(a) the Credit Parties may pay dividends solely in shares of their own capital
stock or other ownership interest (including dividends consisting of rights to
purchase such capital stock or other ownership interest), (b) any Subsidiary may
pay dividends or make distributions to the Credit Parties or any Wholly-Owned
Subsidiary of the Credit Parties, (c) any Credit Party may pay dividends or make
distributions to any other Credit Party and (d) as long as no Default or Event
of Default has occurred and is continuing or would be created thereby (i) the
Credit Parties may declare and pay dividends on shares of their capital stock or
other ownership interests, (ii) the Credit Parties or any Subsidiary may redeem
shares of their capital stock or other ownership interest pursuant to a plan
approved by the Board of Directors of the Credit Parties or such Subsidiary, as
applicable and (iii) the Credit Parties or any Subsidiary may take any action
otherwise prohibited by this Section 11.7.</p>
<p align="left">SECTION 11.8. <u>Transactions with Affiliates.</u> Directly or
indirectly enter into, or be a party to, any transaction with any of its
Affiliates, except (i) on terms that are no less favorable to it than it would
obtain in a comparable arm's length transaction with a Person not its Affiliate,
(ii) without limiting any other provision of this Agreement, in connection with
any acquisition otherwise permitted pursuant to the terms of this Agreement or
(iii) for transactions between Credit Parties or between Credit Parties and
Subsidiaries of Credit Parties.</p>
<p align="left">SECTION 11.9. <u>Changes in Fiscal Year End.</u> Change its
Fiscal Year.</p>
<p align="left">SECTION 11.10. <u>Amendments; Payments and Prepayments of
Material Debt and Subordinated Debt.</u> Upon the occurrence and continuation of
a Default or an Event of Default, amend or modify (or permit the modification or
amendment of) in any manner materially adverse to the Lenders any of the terms
or provisions of any Debt in excess of $25,000,000, including without limitation
the Additional Debt Securities, if any, or any Subordinated Debt, or cancel or
forgive, make any voluntary or optional payment or prepayment on, or redeem or
acquire for value (including without limitation by way of depositing with any
trustee with respect thereto money or securities before due for the purpose of
paying when due) any Subordinated Debt.</p>
<p align="left"><b>ARTICLE XII DEFAULT AND REMEDIES</b></p>
<p align="left">SECTION 12.1. <u>Events of Default.</u> Each of the following
shall constitute an Event of Default, whatever the reason for such event and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment or order of any court or any order, rule or
regulation of any Governmental Authority or otherwise:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (a) Default in Payment of Principal of
  Loans and Reimbursement Obligations. The Borrower shall default in any payment
  of principal of any Revolving Credit Loan or Reimbursement Obligation when and
  as due (whether at maturity, by reason of acceleration or otherwise).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (b) Other Payment Default. The Borrower
  shall default in the payment when and as due (whether at maturity, by reason
  of acceleration or otherwise) of interest on any Revolving Credit Loan or
  Reimbursement Obligation or the payment of any other Obligation (other than
  any Obligation under any Hedging Agreement), and such default shall continue
  unremedied for three (3) Business Days.</p>
</blockquote>
<p align="center">51</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (c) Misrepresentation. Any representation
  or warranty made or deemed to be made by the Credit Parties or any of their
  Subsidiaries, if applicable, under this Agreement, any Loan Document or any
  amendment hereto or thereto, shall at any time prove to have been incorrect or
  misleading in any material respect when made or deemed made.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (d) Default in Performance of Certain
  Covenants. Any of the Credit Parties shall default in the performance or
  observance of any covenant or agreement contained in Article X or XI of this
  Agreement.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (e) Default in Performance of Other
  Covenants and Conditions. Any of the Credit Parties or any Subsidiary thereof,
  if applicable, shall default in the performance or observance of any term,
  covenant, condition or agreement contained in this Agreement (other than as
  specifically provided for otherwise in this Section 12.1) or any other Loan
  Document and such default shall continue for a period of thirty (30) days
  after written notice thereof has been given to the Borrower by the
  Administrative Agent.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (f) Hedging Agreement. Any termination
  payments in an amount greater than $35,000,000 shall be due by any Credit
  Party under any Hedging Agreement and such amount is not paid within thirty
  (30) Business Days of the due date thereof.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (g) Debt Cross-Default. Any of the Credit
  Parties or any of their Subsidiaries shall (i) default in the payment of
  principal or interest on any Debt (other than the Revolving Credit Loans or
  any Reimbursement Obligation) the aggregate outstanding amount of which Debt
  is in excess of $35,000,000, including, without limitation, the obligations
  under the Five-Year Credit Agreement, beyond the period of grace if any,
  provided in the instrument or agreement under which such Debt was created, or
  (ii) default in the observance or performance of any other agreement or
  condition relating to any Debt (other than the Revolving Credit Loans or any
  Reimbursement Obligation), including, without limitation, the obligations
  under the Five-Year Credit Agreement and any other documents executed in
  connection therewith, the aggregate outstanding amount of which Debt is in
  excess of $35,000,000 or contained in any instrument or agreement evidencing,
  securing or relating thereto or any other event shall occur or condition
  exist, the effect of which default or other event or condition is to cause, or
  to permit the holder or holders of such Debt (or a trustee or agent on behalf
  of such holder or holders) to cause, with the giving of notice if required,
  any such Debt to become due prior to its stated maturity (any applicable grace
  period having expired).</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (h) Change in Control. Any person or group
  of persons (within the meaning of Section 13(d) of the Securities Exchange Act
  of 1934, as amended) shall obtain ownership or control in one or more series
  of transactions of more than thirty-three and one-third percent (33.33%) of
  the common stock or thirty-three and one-third percent (33.33%) of the voting
  power of any Credit Party entitled to vote in the election of members of the
  board of directors of such Credit Party or there shall have occurred under any
  indenture or other instrument evidencing any debt in excess of $35,000,000 any
  &quot;<u>change in control</u>&quot; (as defined in such indenture or other
  evidence of debt) obligating the Borrower to repurchase, redeem or repay all
  or any part of the debt or capital stock provided for therein (any such event,
  a &quot;<u>Change in Control</u>&quot;). Further, except as set forth in
  Section 11.5, Jones Apparel Group shall at all times own 100% of the capital
  stock of Jones Apparel Group Holdings and Jones Apparel Group Holdings shall
  at all times own 100% of the capital stock of the Borrower.</p>
</blockquote>
<p align="center">52</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) <u>Voluntary Bankruptcy Proceeding.</u>
  Any Credit Party or any Subsidiary thereof shall (i) commence a voluntary case
  under the federal bankruptcy laws (as now or hereafter in effect), (ii) file a
  petition seeking to take advantage of any other laws, domestic or foreign,
  relating to bankruptcy, insolvency, reorganization, winding up or composition
  for adjustment of debts, (iii) consent to or fail to contest in a timely and
  appropriate manner any petition filed against it in an involuntary case under
  such bankruptcy laws or other laws, (iv) apply for or consent to, or fail to
  contest in a timely and appropriate manner, the appointment of, or the taking
  of possession by, a receiver, custodian, trustee, or liquidator of itself or
  of a substantial part of its property, domestic or foreign, (v) admit in
  writing its inability to pay its debts as they become due, (vi) make a general
  assignment for the benefit of creditors, or (vii) take any corporate action
  for the purpose of authorizing any of the foregoing.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (j) <u>Involuntary Bankruptcy Proceeding.</u>
  A case or other proceeding shall be commenced against any Credit Party or any
  Subsidiary thereof in any court of competent jurisdiction seeking (i) relief
  under the federal bankruptcy laws (as now or hereafter in effect) or under any
  other laws, domestic or foreign, relating to bankruptcy, insolvency,
  reorganization, winding up or adjustment of debts, or (ii) the appointment of
  a trustee, receiver, custodian, liquidator or the like for any Credit Party or
  any Subsidiary thereof or for all or any substantial part of their respective
  assets, domestic or foreign, and such case or proceeding shall continue
  without dismissal or stay for a period of sixty (60) consecutive days, or an
  order granting the relief requested in such case or proceeding (including, but
  not limited to, an order for relief under such federal bankruptcy laws) shall
  be entered.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (k) [Reserved]</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (l) <u>Termination Event.</u> The
  occurrence of any of the following events: (i) the Borrower or any ERISA
  Affiliate fails to make full payment to an Employee Benefit Plan when due
  (after giving effect to any applicable grace period) of contributions in
  excess of $2,000,000, (ii) an accumulated funding deficiency in excess of
  $2,000,000 occurs or exists, whether or not waived, with respect to any
  Pension Plan or (iii) a Termination Event that could reasonably be expected to
  result in liability in excess of $5,000,000 to the Borrower or any ERISA
  Affiliate.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (m) <u>Judgment.</u> A judgment or order
  for the payment of money which causes the aggregate amount of all such
  judgments to exceed $35,000,000 in any Fiscal Year shall be entered against
  any Credit Party or any Subsidiary thereof by any court and such judgment or
  order shall continue without discharge or stay for a period of thirty (30)
  days.</p>
</blockquote>
<p align="left">SECTION 12.2. <u>Remedies.</u> Upon the occurrence of an Event
of Default, with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Credit Parties:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (a) <u>Acceleration; Termination of
  Facilities.</u> Declare the principal of and interest on the Revolving Credit
  Loans, the Reimbursement Obligations at the time outstanding, and all other
  amounts owed to the Lenders and to the Administrative Agent under this
  Agreement or any of the other Loan Documents (other than any Hedging
  Agreement) (including, without limitation, all L/C Obligations, whether or not
  the beneficiaries of the then outstanding Letters of Credit shall have
  presented the documents required</p>
</blockquote>
<p align="center">53</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <p align="left">thereunder) and all other Obligations (other than Obligations
  owing under any Hedging Agreement), to be forthwith due and payable, whereupon
  the same shall immediately become due and payable without presentment, demand,
  protest or other notice of any kind, all of which are expressly waived,
  anything in this Agreement or the other Loan Documents to the contrary
  notwithstanding, and terminate the Credit Facility and any right of the
  Borrower to request borrowings or Letters of Credit thereunder; provided, that
  upon the occurrence of an Event of Default specified in Section 12.1(i) or (j)
  with respect to the Credit Parties, the Credit Facility shall be automatically
  terminated and all Obligations (other than obligations owing under any Hedging
  Agreement) shall automatically become due and payable.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Letters of Credit.</u> With respect
  to all Letters of Credit with respect to which presentment for honor shall not
  have occurred at the time of an acceleration pursuant to the preceding
  paragraph, require the Borrower at such time to deposit or cause to be
  deposited in a cash collateral account opened by the Administrative Agent an
  amount equal to the Dollar Amount of the aggregate then undrawn and unexpired
  amount of such Letters of Credit. Amounts held in such cash collateral account
  shall be applied by the Administrative Agent to the payment of drafts drawn
  under such Letters of Credit, and the unused portion thereof after all such
  Letters of Credit shall have expired or been fully drawn upon, if any, shall
  be applied to repay the other Obligations. After all such Letters of Credit
  shall have expired or been fully drawn upon, the Reimbursement Obligation
  shall have been satisfied and all other Obligations shall have been paid in
  full, the balance, if any, in such cash collateral account shall be promptly
  returned to the Borrower.</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (c) <u>Rights of Collection.</u> Exercise
  on behalf of the Lenders all of its other rights and remedies under this
  Agreement, the other Loan Documents and Applicable Law, in order to satisfy
  all of the Obligations.</p>
</blockquote>
<p align="left">SECTION 12.3. <u>Rights and Remedies Cumulative; Non-Waiver;
Etc.</u> The enumeration of the rights and remedies of the Administrative Agent
and the Lenders set forth in this Agreement is not intended to be exhaustive and
the exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between the Credit Parties, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.</p>
<p align="left"><b>ARTICLE XIII THE ADMINISTRATIVE AGENT</b></p>
<p align="left">SECTION 13.1. <u>Appointment.</u> Each of the Lenders hereby
irrevocably designates and appoints Wachovia as Administrative Agent of such
Lender under this Agreement and the other Loan Documents for the term hereof and
each such Lender irrevocably authorizes Wachovia as Administrative Agent for
such Lender, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such</p>
<p align="center">54</p>
<hr noshade size="1" color="#000000">
<p align="left">duties as are expressly delegated to the Administrative Agent by
the terms of this Agreement and such other Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement or such other Loan Documents, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein and therein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or the other Loan
Documents or otherwise exist against the Administrative Agent. Any reference to
the Administrative Agent in this Article XIII shall be deemed to refer to the
Administrative Agent solely in its capacity as Administrative Agent and not in
its capacity as a Lender.</p>
<p align="left">SECTION 13.2. <u>Delegation of Duties.</u> The Administrative
Agent may execute any of its respective duties under this Agreement and the
other Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by the Administrative
Agent with reasonable care.</p>
<p align="left">SECTION 13.3. <u>Exculpatory Provisions.</u> Neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or the other Loan Documents (except for actions
occasioned solely by its or such Person's own gross negligence or willful
misconduct), or (b) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
of its Subsidiaries or any officer thereof contained in this Agreement or the
other Loan Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or the other Loan Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the other Loan Documents or for any failure of the Borrower or any
of its Subsidiaries to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower or any of its Subsidiaries.</p>
<p align="left">SECTION 13.4. <u>Reliance by the Administrative Agent.</u> The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the holder of any Revolving Credit Loan as the owner thereof for all
purposes unless such Revolving Credit Loan shall have been transferred in
accordance with Section 14.10 hereof. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement and the
other Loan Documents unless it shall first receive such advice or concurrence of
the Required Lenders (or, when expressly required hereby or by the relevant
other Loan Document, the Required Agreement Lenders or all the Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action except for its own gross
negligence or willful misconduct. The Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement
and the other</p>
<p align="center">55</p>
<hr noshade size="1" color="#000000">
<p align="left">Loan Documents in accordance with a request of the Required
Lenders (or, when expressly required hereby, the Required Agreement Lenders or
all the Lenders), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Revolving Credit Loans.</p>
<p align="left">SECTION 13.5. <u>Notice of Default.</u> The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence of any Default
or Event of Default hereunder unless it has received notice from a Lender or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a &quot;<u>notice of default</u>&quot;.
In the event that the Administrative Agent receives such a notice, it shall
promptly give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders, except to the extent that
other provisions of this Agreement expressly require that any such action be
taken or not be taken only with the consent and authorization or the request of
the Lenders, the Required Agreement Lenders or Required Lenders, as applicable.</p>
<p align="left">SECTION 13.6. <u>Non-Reliance on the Administrative Agent and
Other Lenders.</u> Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its respective officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates has made any
representations or warranties to it and that no act by the Administrative Agent
hereinafter taken, including any review of the affairs of the Borrower or any of
its Subsidiaries, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and its Subsidiaries and made its
own decision to make its Revolving Credit Loans and issue or participate in
Letters of Credit hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder or by the
other Loan Documents, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrower or any of its Subsidiaries which may come into
the possession of the Administrative Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates.</p>
<p align="left">SECTION 13.7. <u>Indemnification.</u> The Lenders agree to
indemnify the Administrative Agent in its capacity as such and (to the extent
not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to the respective amounts of their
Revolving Credit Commitment Percentage from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the</p>
<p align="center">56</p>
<hr noshade size="1" color="#000000">
<p align="left">payment of the Revolving Credit Loans or any Reimbursement
Obligation) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement or the other Loan
Documents, or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to the extent they result from the
Administrative Agent's bad faith, gross negligence or willful misconduct. The
agreements in this Section 13.7 shall survive the payment of the Revolving
Credit Loans, any Reimbursement Obligation and all other amounts payable
hereunder and the termination of this Agreement.</p>
<p align="left">SECTION 13.8. <u>The Administrative Agent in Its Individual
Capacity.</u> The Administrative Agent and its respective Subsidiaries and
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower as though the Administrative Agent were not
an Administrative Agent hereunder. With respect to any Revolving Credit Loans
made or renewed by it and with respect to any Letter of Credit issued by it or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Administrative Agent, and the terms
&quot;<u>Lender</u>&quot; and &quot;<u>Lenders</u>&quot; shall include the
Administrative Agent in its individual capacity.</p>
<p align="left">SECTION 13.9. <u>Resignation of the Administrative Agent;
Successor Administrative Agent.</u> Subject to the appointment and acceptance of
a successor as provided below, the Administrative Agent may resign at any time
by giving notice thereof to the Lenders and the Credit Parties. Upon any such
resignation, the Required Lenders shall have the right, subject to the approval
of the Credit Parties (so long as no Default or Event of Default has occurred
and is continuing), to appoint a successor Administrative Agent, which successor
shall have minimum capital and surplus of at least $500,000,000. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, been
approved (so long as no Default or Event of Default has occurred and is
continuing) by the Credit Parties or have accepted such appointment within
thirty (30) days after the Administrative Agent's giving of notice of
resignation, then the Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent reasonably acceptable to the Credit
Parties (so long as no Default or Event of Default has occurred and is
continuing), which successor shall have minimum capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 13.9 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Administrative Agent.</p>
<p align="left">SECTION 13.10. <u>Syndication and Documentation Agents</u>..
Each Syndication Agent in its capacity as Syndication Agent and each
Documentation Agent in its capacity as Documentation Agent shall have no duties
or responsibilities and no liabilities under this Agreement or any other Loan
Document but shall be entitled, in such capacity, to the same protections
afforded to the Administrative Agent under this Article XIII.</p>
<p align="left"><b>ARTICLE XIV MISCELLANEOUS</b></p>
<p align="center">57</p>
<hr noshade size="1" color="#000000">
<p align="left">SECTION 14.1. <u>Notices.</u> (a) <u>Method of Communication.</u>
Except as otherwise provided in this Agreement, all notices and communications
hereunder shall be in writing, or by telephone subsequently confirmed in
writing. Any notice shall be effective if delivered by hand delivery or sent via
telecopy, recognized overnight courier service or certified mail, return receipt
requested, and shall be presumed to be received by a party hereto (i) on the
date of delivery if delivered by hand or sent by telecopy, (ii) on the next
Business Day if sent by recognized overnight courier service and (iii) on the
third (3rd) Business Day following the date sent by certified mail, return
receipt requested. A telephonic notice to the Administrative Agent as understood
by the Administrative Agent will be deemed to be the controlling and proper
notice in the event of a discrepancy with or failure to receive a confirming
written notice.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Addresses for Notices.</u> Notices to
any party shall be sent to it at the following addresses, or any other address
as to which all the other parties are notified in writing.</p>
<blockquote>
  <blockquote>
    <p align="left">If to the Credit Parties:<br>
    <br>
    Jones Apparel Group, Inc.<br>
    250 Rittenhouse Circle<br>
    Bristol, Pennsylvania 19007<br>
    Attention: Chief Financial Officer<br>
    Telephone No.: (215) 785-4000<br>
    Telecopy No.: (215) 785-1228<br>
    <br>
    If to Wachovia:<br>
    <br>
    Wachovia Bank, National Association<br>
    Administrative Agent: One Wachovia Center, TW 4<br>
    301 South College Street<br>
    Charlotte, NC 28288-0608<br>
    Attention: Syndication Agency Services<br>
    Telephone No: 704-715-1353<br>
    Telecopy No: 704-383-0288<br>
    <br>
    With copies to:<br>
    <br>
    Wachovia Bank, National Association<br>
    Administrative Agent: One Wachovia Center, TW 5<br>
    301 South College Street<br>
    Charlotte, NC 28288-0760<br>
    Attention: Syndication Agency Management<br>
    Telephone No: 704-383-7190<br>
    Telecopy No: 704-383-7611<br>
    <br>
    If to any Lender:<br>
    <br>
    To the Address set forth on Schedule 1.1(a) hereto</p>
  </blockquote>
</blockquote>
<p align="left">&nbsp;&nbsp;&nbsp; (c) <u>Administrative Agent's Office.</u> The
Administrative Agent hereby designates its office located at the address set
forth above, or any subsequent office which shall have been specified for such
purpose by written notice to the Borrower and the Lenders, as the</p>
<p align="center">58</p>
<hr noshade size="1" color="#000000">
<p align="left">Administrative Agent's Office referred to herein, to which
payments due are to be made and at which Revolving Credit Loans will be
disbursed.</p>
<p align="left">SECTION 14.2. <u>Expenses; Indemnity.</u> The Borrower will (a)
pay all reasonable out-of-pocket expenses of the Administrative Agent in
connection with (i) the preparation, execution and delivery of this Agreement
and each other Loan Document, whenever the same shall be executed and delivered,
including without limitation the reasonable out-of-pocket syndication and due
diligence expenses and reasonable fees and disbursements of counsel for the
Administrative Agent and (ii) the preparation, execution and delivery of any
waiver, amendment or consent by the Administrative Agent or the Lenders relating
to this Agreement or any other Loan Document, including without limitation
reasonable fees and disbursements of counsel for the Administrative Agent, (b)
pay all reasonable out-of-pocket expenses of the Administrative Agent actually
incurred in connection with the administration of the Credit Facility, (c) pay
all reasonable out-of-pocket expenses of the Administrative Agent and each
Lender actually incurred in connection with the enforcement of any rights and
remedies of the Administrative Agent and the Lenders under the Credit Facility,
including to the extent reasonable under the circumstances consulting with
accountants, attorneys and other Persons concerning the nature, scope or value
of any right or remedy of the Administrative Agent or any Lender hereunder or
under any other Loan Document or any factual matters in connection therewith,
which expenses shall include without limitation the reasonable fees and
disbursements of such Persons, and (d) defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, Administrative Agents, officers and
directors, from and against any losses, penalties, fines, liabilities,
settlements, damages, costs and expenses, suffered by any such Person in
connection with any claim, investigation, litigation or other proceeding
(whether or not the Administrative Agent or any Lender is a party thereto) and
the prosecution and defense thereof, arising out of or in any way connected with
this Agreement, any other Loan Document or the Revolving Credit Loans, including
without limitation reasonable attorney's and consultant's fees, except to the
extent that any of the foregoing result from the gross negligence or willful
misconduct of any indemnified party.</p>
<p align="left">SECTION 14.3. <u>Set-off.</u> In addition to any rights now or
hereafter granted under Applicable Law and not by way of limitation of any such
rights, upon and after the occurrence of any Event of Default and during the
continuance thereof, the Lenders and any assignee or participant of a Lender in
accordance with Section 14.10 are hereby authorized by the Credit Parties at any
time or from time to time, without notice to the Credit Parties or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, time or
demand, including, but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured) and any other indebtedness at any time
held or owing by the Lenders, or any such assignee or participant to or for the
credit or the account of the Borrower against and on account of the Obligations
irrespective of whether or not (a) the Lenders shall have made any demand under
this Agreement or any of the other Loan Documents or (b) the Administrative
Agent shall have declared any or all of the Obligations to be due and payable as
permitted by Section 12.2 and although such Obligations shall be contingent or
unmatured.</p>
<p align="left">SECTION 14.4. <u>Governing Law.</u> This Agreement, the
Revolving Credit Notes and the other Loan Documents, unless otherwise expressly
set forth therein, shall be governed by, construed and enforced in accordance
with the laws of the State of New York.</p>
<p align="left">SECTION 14.5. <u>Consent to Jurisdiction.</u> Each of the
parties hereto hereby irrevocably consents to the personal jurisdiction of the
state and federal courts located in New York County, New</p>
<p align="center">59</p>
<hr noshade size="1" color="#000000">
<p align="left">York, in any action, claim or other proceeding arising out of
any dispute in connection with this Agreement and the other Loan Documents, any
rights or obligations hereunder or thereunder, or the performance of such rights
and obligations. Each of the parties hereto hereby irrevocably consents to the
service of a summons and complaint and other process in any action, claim or
proceeding brought by any other party hereto in connection with this Agreement
or the other Loan Documents, any rights or obligations hereunder or thereunder,
or the performance of such rights and obligations, on behalf of itself or its
property, in the manner specified in Section 14.1. Nothing in this Section 14.5
shall affect the right of any of the parties hereto to serve legal process in
any other manner permitted by Applicable Law or affect the right of any of the
parties hereto to bring any action or proceeding against any other party hereto
or its properties in the courts of any other jurisdictions.</p>
<p align="left">SECTION 14.6. <u>Waiver of Jury Trial.</u> THE ADMINISTRATIVE
AGENT, EACH LENDER AND EACH CREDIT PARTY HEREBY ACKNOWLEDGE THEY IRREVOCABLY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM
OR OTHER PROCEEDING ARISING OUT OF ANY JUDICIAL PROCEEDING, ANY DISPUTE, CLAIM
OR CONTROVERSY ARISING OUT OF, CONNECTED WITH OR RELATING TO THE LOAN DOCUMENTS
(&quot;<u>Dispute</u>&quot;) IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.</p>
<p align="left">SECTION 14.7. <u>Reversal of Payments.</u> To the extent any
Credit Party makes a payment or payments to the Administrative Agent for the
ratable benefit of the Lenders or the Administrative Agent receives any payment
or proceeds of the collateral which payments or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the Administrative
Agent.</p>
<p align="left">SECTION 14.8. <u>Injunctive Relief; Punitive Damages.</u> (a)
Each of the parties to this Agreement recognizes that, in the event such party
fails to perform, observe or discharge any of its obligations or liabilities
under this Agreement, any remedy of law may prove to be inadequate relief to the
other parties hereto. Therefore, each of the parties hereto agrees that the
other parties hereto, at such other party's option, shall be entitled to pursue
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) The Administrative Agent, Lenders and the
Credit Parties (on behalf of themselves and their Subsidiaries) hereby agree
that no such Person shall have a remedy of punitive or exemplary damages against
any other party to a Loan Document and each such Person hereby waives any right
or claim to punitive or exemplary damages that they may now have or may arise in
the future in connection with any Dispute, whether such Dispute is resolved
through arbitration or judicially.</p>
<p align="left">SECTION 14.9. <u>Accounting Matters.</u> Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time, provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such</p>
<p align="center">60</p>
<hr noshade size="1" color="#000000">
<p align="left">provision (or if the Administrative Agent notifies the Borrower
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance therewith.</p>
<p align="left">SECTION 14.10. <u>Successors and Assigns; Participations.</u>
(a) <u>Benefit of Agreement.</u> This Agreement shall be binding upon and inure
to the benefit of the Credit Parties, the Administrative Agent and the Lenders,
all future holders of the Revolving Credit Notes, and their respective
successors and permitted assigns, except that the Borrower shall not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender other than pursuant to Section 11.5.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) <u>Assignment by Lenders.</u> Each Lender
may, with the consent of the Borrower (so long as no Default or Event of Default
has occurred and is continuing) and the consent of the Administrative Agent,
which consents shall not be unreasonably withheld or delayed, assign to one or
more Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Extensions of Credit at the time owing to it and the Revolving
Credit Notes held by it); provided that:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) each such assignment shall be of a
  constant, and not a varying, percentage of all the assigning Lender's
  Revolving Credit Commitment and all other rights and obligations under this
  Agreement;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (ii) if less than all of the assigning
  Lender's Revolving Credit Commitment or Revolving Credit Loans is to be
  assigned, the Revolving Credit Commitment or Revolving Credit Loans so
  assigned shall not be less than $5,000,000;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iii) the parties to each such assignment
  shall execute and deliver to the Administrative Agent, for its acceptance and
  recording in the Register, an Assignment and Acceptance in the form of Exhibit
  G attached hereto (an &quot;<u>Assignment and Acceptance</u>&quot;), together
  with any Revolving Credit Note or Revolving Credit Notes subject to such
  assignment;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iv) such assignment shall not, without the
  consent of the Borrower, on behalf of itself and the other Credit Parties,
  require the Borrower, or any other Credit Party, to file a registration
  statement with the Securities and Exchange Commission or apply to or qualify
  the Revolving Credit Loans or the Revolving Credit Notes under the blue sky
  laws of any state;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (v) the assigning Lender shall pay to the
  Administrative Agent an assignment fee of $3,000 upon the execution by such
  Lender of the Assignment and Acceptance; provided that no such fee shall be
  payable upon any assignment by a Lender to an Affiliate thereof; and</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (vi) no consents will be required for
  assignments where the Eligible Assignee is an Affiliate of the assigning
  Lender.</p>
</blockquote>
<p align="left">&nbsp;&nbsp;&nbsp; Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least</p>
<p align="center">61</p>
<hr noshade size="1" color="#000000">
<p align="left">ten (10) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned in such Assignment and Acceptance, have the rights and obligations of a
Lender hereby and (B) the Lender thereunder shall, to the extent of the interest
assigned in such assignment, be released from its obligations under this
Agreement.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (c) <u>Rights and Duties upon Assignment.</u>
By executing and delivering an Assignment and Acceptance, the assigning Lender
thereunder and the assignee thereunder confirm to and agree with each other and
the other parties hereto as set forth in such Assignment and Acceptance.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (d) <u>Register.</u> The Administrative Agent
shall maintain a copy of each Assignment and Acceptance delivered to it and
record the names and addresses of the Lenders and the amount of the Extensions
of Credit with respect to each Lender from time to time in the Register.</p>
<p align="left">&nbsp;&nbsp;&nbsp; No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in
this paragraph. The entries in the Register shall be conclusive, in the absence
of manifest error, and the Borrower, the Administrative Agent and the Lenders
may treat each person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (e) <u>Issuance of New Revolving Credit
Notes.</u> Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Eligible Assignee together with any Revolving Credit
Note or Revolving Credit Notes if any have been issued pursuant to this
Agreement, subject to such assignment and the written consent to such
assignment, the Administrative Agent shall, if such Assignment and Acceptance
has been completed and is substantially in the form of Exhibit G:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) accept such Assignment and Acceptance;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (ii) record the information contained
  therein in the Register;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iii) give prompt notice thereof to the
  Lenders and the Borrower, on behalf of itself and the other Credit Parties;
  and</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iv) promptly deliver a copy of such
  Assignment and Acceptance to the Borrower.</p>
</blockquote>
<p align="left">&nbsp;&nbsp;&nbsp; Within ten (10) Business Days after receipt
of notice, if requested by the Eligible Assignee the Borrower shall execute and
deliver to the Administrative Agent, in exchange for the surrendered Revolving
Credit Note or Revolving Credit Notes, a new Revolving Credit Note or Revolving
Credit Notes to the order of such Eligible Assignee in amounts equal to the
Revolving Credit Commitment assumed by it pursuant to such Assignment and
Acceptance and a new Revolving Credit Note or Revolving Credit Notes to the
order of the assigning Lender in an amount equal to the Revolving Credit
Commitment retained by it hereunder. Such new Revolving Credit Note or Revolving
Credit Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Revolving Credit Note or Revolving Credit
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the assigned Revolving Credit
Notes delivered to the assigning</p>
<p align="center">62</p>
<hr noshade size="1" color="#000000">
<p align="left">Lender. Each surrendered Revolving Credit Note or Revolving
Credit Notes shall be canceled and returned to the Borrower.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (f) <u>Participations.</u> Each Lender may
sell participations to one or more banks or other entities in all or a portion
of its rights and/or obligations under this Agreement (including, without
limitation, all or a portion of its Extensions of Credit and the Revolving
Credit Notes held by it); provided that:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (i) each such participation shall be in an
  amount not less than $5,000,000;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (ii) such Lender's obligations under this
  Agreement (including, without limitation, its Revolving Credit Commitment)
  shall remain unchanged;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iii) such Lender shall remain solely
  responsible to the other parties hereto for the performance of such
  obligations;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (iv) the Credit Parties, the Administrative
  Agent and the other Lenders shall continue to deal solely and directly with
  such Lender in connection with such Lender's rights and obligations under this
  Agreement;</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (v) such Lender shall not permit such
  participant the right to approve any waivers, amendments or other
  modifications to this Agreement or any other Loan Document other than waivers,
  amendments or modifications which would reduce the principal of or the
  interest rate on any Revolving Credit Loan or Reimbursement Obligation, extend
  the term or increase the amount of the Revolving Credit Commitment, reduce the
  amount of any fees to which such participant is entitled, or extend any
  scheduled payment date for principal, interest or fees of any Revolving Credit
  Loan, except as expressly contemplated hereby or thereby; and</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (vi) any such disposition shall not,
  without the consent of the Borrower, on behalf of itself and the other Credit
  Parties, require the Borrower or any other Credit Party, to file a
  registration statement with the Securities and Exchange Commission or apply to
  or qualify the Revolving Credit Loans or the Revolving Credit Notes under the
  blue sky law of any state.</p>
</blockquote>
<p align="left">&nbsp;&nbsp;&nbsp; (g) <u>Disclosure of Information;
Confidentiality.</u> Each of the Administrative Agent, the Issuing Lenders and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors and representatives (collectively,
&quot;Representatives&quot;) (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or the enforcement of rights hereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the prior written consent
of the Credit Parties, (h) to the extent such Information (A) becomes publicly
available other than as a result of a breach of this Section or (B) becomes
available to the Administrative Agent, the Issuing Lenders or any Lender on a</p>
<p align="center">63</p>
<hr noshade size="1" color="#000000">
<p align="left">nonconfidential basis from a source other than the Credit
Parties or (i) to Gold Sheets and other similar bank trade publications, such
information to consist of deal terms and other information (customarily found in
such publications) upon the Credit Parties' prior review and approval, which
shall not be unreasonably withheld or delayed. For the purposes of this Section,
&quot;<u>Information</u>&quot; means all information received from the Credit
Parties or any of their Subsidiaries relating to the Credit Parties or their
business, other than any such information that is available to the
Administrative Agent, any Issuing Lender or any Lender on a nonconfidential
basis prior to disclosure by the Credit Parties; provided that, in the case of
information received from the Credit Parties after the Closing Date (other than
certificates or other information specifically required by the terms of this
Agreement), such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord to
its own confidential information. Notwithstanding anything herein to the
contrary, the Credit Parties and their respective Representatives and the
Lenders and their respective Representatives may disclose to any and all
Persons, without limitation of any kind, the U.S. tax treatment and U.S. tax
structure of the transactions contemplated hereby and all materials of any kind
(including opinions and other tax analyses) that are provided to any of them
solely relating to such U.S. tax treatment and U.S. tax structure.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (h) <u>Special Purpose Funding Vehicles.</u>
Notwithstanding anything to the contrary contained herein, any Lender (a &quot;<u>Granting
Lender</u>&quot;) may grant to a special purpose funding vehicle organized for
the specific purpose of making or acquiring participations or investing in loans
of the type made pursuant to this Agreement (a &quot;<u>SPC</u>&quot;),
correctly identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower, the option to provide to the
Borrower all or any part of any Extension of Credit that such Lender would
otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC to
make any Extension of Credit and (ii) if an SPC elects not to exercise such
option or otherwise fails to provide all or any part of such Extension of
Credit, the Granting Lender shall be obligated to make such Extension of Credit
pursuant to the terms hereof. The making of an Extension of Credit by an SPC
hereunder shall utilize the Commitment of the Granting Lender to the same
extent, and as if, such Extension of Credit were made by such Granting Lender.
Each party hereto hereby agrees that no SPC shall be liable for any indemnity or
similar payment obligation under this Agreement (all liability for which shall
remain with the Granting Lender). In furtherance of the foregoing, each party
hereto hereby agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. In addition, notwithstanding anything to the contrary contained
in this clause, any SPC may (i) with notice to, but without the prior written
consent of, the Borrower and the Administrative Agent and without paying any
processing fee therefor, assign all or a portion of its interest in any
Extension of Credit to the Granting Lender or to any financial institution
(consented to by the Borrower and Administrative Agent) providing liquidity
and/or credit support to or for the account of such SPC to support the funding
or maintenance of Extensions of Credit and (ii) disclose on a confidential basis
any non-public information relating to Extensions of Credit to any rating
agency, commercial paper dealer or provider of any surety, guarantee or credit
or liquidity enhancement to such SPC. This clause may not be amended without the
written consent of each SPC.</p>
<p align="center">64</p>
<hr noshade size="1" color="#000000">
<p align="left">&nbsp;&nbsp;&nbsp; (i) <u>Certain Pledges or Assignments.</u>
Nothing herein shall prohibit any Lender from pledging or assigning any
Revolving Credit Note to any Federal Reserve Bank in accordance with Applicable
Law.</p>
<p align="left">SECTION 14.11. <u>Amendments, Waivers and Consents.</u> Except
as set forth below, any term, covenant, agreement or condition of this Agreement
or any of the other Loan Documents may be amended or waived by the Lenders, and
any consent given by the Lenders, if, but only if, (a) in the case of an
amendment, waiver or consent for which a substantially similar corresponding
amendment, waiver or consent with regard to the Five-Year Credit Agreement will
be made effective thereunder contemporaneously, such amendment, waiver or
consent is in writing signed by the Required Lenders (or by the Administrative
Agent with the consent of the Required Lenders) and delivered to the
Administrative Agent and, in the case of an amendment, signed by the Credit
Parties and (b) in the case of any other amendment, waiver or consent
specifically impacting only this Agreement and the other Loan Documents, such
amendment, waiver or consent is in writing signed by the Required Agreement
Lenders (or by the Administrative Agent with the consent of the Required
Agreement Lenders) and delivered to the Administrative Agent and, in the case of
an amendment, signed by the Credit Parties; provided, in each case, that:</p>
<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp; (a) no amendment, waiver or consent shall (i)
  release any of the Credit Parties, (ii) increase the amount or extend the time
  of the obligation of the Lenders to make Revolving Credit Loans or issue or
  participate in Letters of Credit, (iii) extend the originally scheduled time
  or times of payment of the principal of any Revolving Credit Loan or
  Reimbursement Obligation or the time or times of payment of interest or fees
  on any Revolving Credit Loan or Reimbursement Obligation, (iv) reduce the rate
  of interest or fees payable on any Revolving Credit Loan or Reimbursement
  Obligation, (v) reduce the principal amount of any Revolving Credit Loan or
  Reimbursement Obligation, (vi) permit any subordination of the principal or
  interest on any Revolving Credit Loan or Reimbursement Obligation, (vii)
  permit any assignment (other than as specifically permitted or contemplated in
  this Agreement) of any of the Credit Parties' rights and obligations hereunder
  or (viii) amend the provisions of this Section 14.11 or the definition of
  Required Lenders or Required Agreement Lenders, without the prior written
  consent of each Lender affected thereby; and</p>
  <p align="left">&nbsp;&nbsp;&nbsp; (b) no amendment, waiver or consent to the
  provisions of (i) Article XIII shall be made without the written consent of
  the Administrative Agent and (ii) Article III without the written consent of
  each Issuing Lender affected thereby.</p>
</blockquote>
<p align="left">SECTION 14.12. <u>Performance of Duties.</u> The Credit Parties'
obligations under this Agreement and each of the Loan Documents shall be
performed by the Credit Parties at their sole cost and expense.</p>
<p align="left">SECTION 14.13. <u>All Powers Coupled with Interest.</u> All
powers of attorney and other authorizations granted to the Lenders, the
Administrative Agent and any Persons designated by the Administrative Agent or
any Lender pursuant to any provisions of this Agreement or any of the other Loan
Documents shall be deemed coupled with an interest and shall be irrevocable so
long as any of the Obligations remain unpaid or unsatisfied or the Credit
Facility has not been terminated.</p>
<p align="left">SECTION 14.14. <u>Survival of Indemnities.</u> Notwithstanding
any termination of this Agreement, the indemnities to which the Administrative
Agent and the Lenders are entitled under the provisions of this Article XIV and
any other provision of this Agreement and the Loan</p>
<p align="center">65</p>
<hr noshade size="1" color="#000000">
<p align="left">Documents shall continue in full force and effect and shall
protect the Administrative Agent and the Lenders against events arising after
such termination as well as before.</p>
<p align="left">SECTION 14.15. <u>Titles and Captions.</u> Titles and captions
of Articles, Sections and subsections in this Agreement are for convenience
only, and neither limit nor amplify the provisions of this Agreement.</p>
<p align="left">SECTION 14.16. <u>Severability of Provisions.</u> Any provision
of this Agreement or any other Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
the remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.</p>
<p align="left">SECTION 14.17. <u>Counterparts.</u> This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and shall be binding upon all parties, their successors and assigns,
and all of which taken together shall constitute one and the same agreement.
Delivery of any executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.</p>
<p align="left">SECTION 14.18. <u>Term of Agreement.</u> This Agreement shall
remain in effect from the Closing Date through and including the date upon which
all Obligations (other than obligations owing by any Credit Party to any Lender
or Affiliate of a Lender or the Administrative Agent under any Hedging
Agreement) shall have been indefeasibly and irrevocably paid and satisfied in
full. No termination of this Agreement shall affect the rights and obligations
of the parties hereto arising prior to such termination.</p>
<p align="left">SECTION 14.19. <u>Inconsistencies with Other Documents;
Independent Effect of Covenants.</u> (a) In the event there is a conflict or
inconsistency between this Agreement and any other Loan Document, the terms of
this Agreement shall control.</p>
<p align="left">&nbsp;&nbsp;&nbsp; (b) The Borrower expressly acknowledges and
agrees that each covenant contained in Article IX, X, or XI hereof shall be
given independent effect.</p>
<p align="center">[Signature pages to follow]</p>
<p align="center">66</p>
<hr noshade size="1" color="#000000">
<p>&nbsp;&nbsp;&nbsp; IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.</p>
<div align="center">
  <center>
  <table border="0" cellpadding="0" cellspacing="0" width="100%">
    <tr>
      <td width="50%"></td>
      <td width="50%">JONES APPAREL GROUP USA, INC.<br>
        as Borrower
        <p>By: <u>/s/ Wesley R. Card</u><br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Wesley R. Card</u><br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Chief Financial Officer</u><br>
        </p>
        <p>JONES APPAREL GROUP, INC.<br>
        as Additional Obligor</p>
        <p>By: <u>/s/ Wesley R. Card</u><br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Wesley R. Card</u><br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Chief Operating and Financial Officer</u><br>
        </p>
        <p>JONES APPAREL GROUP HOLDINGS, INC.<br>
        as Additional Obligor</p>
        <p>By: <u>/s/ Ira M. Dansky</u><br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Ira M. Dansky</u><br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>President</u><br>
        </p>
        <p>NINE WEST GROUP INC.<br>
        as Additional Obligor<br>
        <br>
        By: <u>/s/ Gloria W. DiPuma</u><br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Gloria W. DiPuma</u><br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>CFO</u></p>
        <p>&nbsp;</td>
    </tr>
  </table>
  </center>
</div>
<p align="center">67</p>
<hr noshade size="1" color="#000000">
<div align="center">
  <center>
  <table border="0" cellpadding="0" cellspacing="0" width="100%">
    <tr>
      <td width="50%"></td>
      <td width="50%">WACHOVIA BANK, NATIONAL ASSOCIATION,<br>
        as Administrative Agent, Issuing Lender and Lender<br>
        <br>
        By: <u>/s/ Kimberly A. Quinn</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Kimberly A. Quinn</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp;
        Title: <u>Director</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;
        <p>JPMORGAN CHASE BANK,<br>
        as Issuing Lender and Lender</p>
        <p>
        By: <u>/s/ James A. Knight</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>James A. Knight</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Vice President</u>
        <p>CITIBANK, N.A.,<br>
        as Issuing Lender and Lender
        <p>
        By: <u>/s/ Judith Green</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Judith Green</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Vice President</u>
        <p>BANK OF AMERICA, N.A.,<br>
        as Issuing Lender and Lender
        <p>
        By: <u>/s/ Chitt Swamidasan</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Chitt Swamidasan</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Principal</u>
        <p>FLEET NATIONAL BANK,<br>
        as Issuing Lender and Lender
        <p>
        By: <u>/s/ Stephen J. Garvin</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Stephen J. Garvin</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Managing Director</u>
        <p>BANK ONE, NA,<br>
        as Lender
        <p>
        By: <u>/s/ Vincent R. Henchek</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Vincent R. Henchek</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Director</u>
        <p>BARCLAYS BANK PLC<br>
        as Lender
        <p>
        By: <u>/s/ John Giannone</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>John Giannone</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Director</u></td>
    </tr>
  </table>
  </center>
</div>
<p align="center">68</p>

<hr noshade size="1" color="#000000">
  <table border="0" cellpadding="0" cellspacing="0" width="100%">
    <tr>
      <td width="50%"></td>
      <td width="50%">THE BANK OF NEW YORK,<br>
        as Lender<br>
        <br>
        By: <u>/s/ Roger A. Grossman</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Roger A. Grossman</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp;
        Title:&nbsp;<u>Vice President</u>
        <p>BEAR STEARNS,<br>
        as Lender</p>
        <p>
        By: <u>/s/ Keith C. Bamish</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Keith C. Bamish</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Executive Vice President</u>
        <p>BANCA NAZIONALE DEL LAVORO,<br>
        as Lender
        <p>
        By: <u>/s/ Francesco DiMario</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Francesco DiMario</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Vice President</u>
        <p>
        By: <u>/s/ Leonardo Valentini</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Leonardo Valentini</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>First Vice President</u>
        <p>BANK OF CHINA, NEW YORK BRANCH,<br>
        as Lender
        <p>
        By: <u>/s/ William Smith</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>William Smith</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Deputy General Manager</u><p>
        By: <u>/s/ Bailin Zheng</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Bailin Zheng</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>General Manager</u>
        <p>CHANG HWA COMMERCIAL BANK, LTD., NEW YORK BRANCH<br>
        as Lender
        <p>
        By: <u>/s/ Ming-Hsien Lin</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Ming-Hsien Lin</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>VP &amp; General Manager</u>
        <p>BANK OF TAIWAN, NEW YORK AGENCY,<br>
        as Lender
        <p>
        By: <u>/s/ Shiou-Jsu Yeh</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Shiou-Jsu Yeh</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>VP &amp; GM</u>
        <p>BANCA DI ROMA,<br>
        as Lender
        <p>
        By: <u>/s/ A.Paoli</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>A.Paoli</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>A.T.</u>
        <p>
        By: <u>/s/ C. Strike</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>C. Strike</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>V.P.</u></td>
    </tr>
  </table>
<p align="center">69</p>
<hr noshade size="1" color="#000000">
  <table border="0" cellpadding="0" cellspacing="0" width="100%">
    <tr>
      <td width="50%"></td>
      <td width="50%">FIFTH THIRD BANK,<br>
        as Lender<br>
        <br>
        By: <u>/s/ Christine L. Wagner</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Christine L. Wagner</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp;
        Title:&nbsp;<u>Assistant Vice President</u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;
        <p>HUA NAN COMMERCIAL BANK, LTD., NEW YORK AGENCY<br>
        as Lender</p>
        <p>
        By: <u>/s/ Yun-Peng Chang</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Yun-Peng Chang</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>General Manager</u><p>BANK LEUMI USA,<br>
        as Lender
        <p>
        By: <u>/s/ John Koenigsberg</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>John Koenigsberg</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>First VP</u>
        <p>
        By: <u>/s/ Glenn D. Kreutzer</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Glenn D. Kreutzer</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>B.O.</u>
        <p>SUNTRUST BANK<br>
        as Lender
        <p>
        By: <u>/s/ Lauren P. Carrigan</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Lauren P. Carrigan</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Vice President</u>
        <p>FIRST COMMERCIAL BANK, NEW YORK AGENCY,<br>
        as Lender
        <p>
        By: <u>/s/ Bruce M.J. Ju</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Bruce M.J. Ju</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>VP &amp; General Manager</u></td>
    </tr>
  </table>
<p align="center">70</p>

<hr noshade size="1" color="#000000">
  <table border="0" cellpadding="0" cellspacing="0" width="100%">
    <tr>
      <td width="50%"></td>
      <td width="50%"><p>FIRST HAWAIIAN BANK<p>
        By: <u>/s/ Charles L. Jenkins</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Charles L. Jenkins</u> <br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title: <u>Vice President, Manager</u></td>
    </tr>
  </table>

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