JONES APPAREL GROUP INC
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>exhibit10_1.htm
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
<html>

<head>
<title>Exhibit 10.1</title>
</head>

<body>

<b>
<p ALIGN="RIGHT">EXHIBIT 10.1</p>
<p ALIGN="center"></b>$1,000,000,000</p>
<p ALIGN="center">&nbsp;</p>
<b>
<p ALIGN="CENTER">AMENDED AND RESTATED FIVE-YEAR CREDIT AGREEMENT</p>
</b>
<p ALIGN="CENTER">dated as of June 15, 2004,</p>
<p ALIGN="CENTER">by and among</p>
<b>
<p ALIGN="CENTER">JONES APPAREL GROUP USA, INC.,</p>
</b>
<p ALIGN="CENTER">the Additional Obligors referred to herein,</p>
<p ALIGN="CENTER">the Lenders referred to herein,</p>
<b>
<p ALIGN="CENTER">CITIGROUP GLOBAL MARKETS INC. </b>and <b>J.P. MORGAN
SECURITIES INC.,<br>
</b>as Joint Lead Arrangers<br>
and Joint Bookrunners,</p>
<b>
<p ALIGN="CENTER">WACHOVIA BANK, NATIONAL ASSOCIATION,<br>
</b>as Administrative Agent,</p>
<p ALIGN="CENTER">and</p>
<b>
<p ALIGN="CENTER">CITIBANK, N.A.</b> and <b>JPMORGAN CHASE BANK,<br>
</b>as Syndication Agents,</p>
<p ALIGN="CENTER">and</p>
<b>
<p ALIGN="CENTER">BANK OF AMERICA, N.A., BARCLAYS BANK PLC </b>and <b>SUNTRUST
BANK<br>
</b>as Documentation Agents</p>
<hr noshade size="1" color="#000000">
<b>
<p ALIGN="CENTER">TABLE OF CONTENTS</b></p>
<div align="center">
  <center>
  <table border="0" cellpadding="5" cellspacing="0" width="100%">
    <tr>
      <td width="10%"></td>
      <td width="80%"></td>
    </center></font>
  <td width="10%" align="right">
    <p align="right"><b>Page</b></td>
  </tr>
  <center>
  <tr>
    <td width="90%" colspan="2">ARTICLE I DEFINITIONS</td>
    <td width="10%" align="right">1</td>
  </tr>

  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 1.1. Definitions.</td>
    <td width="10%" align="right">1</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 1.2. General.</td>
    <td width="10%" align="right">15</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 1.3. Other Definitions and Provisions.</td>
    <td width="10%" align="right">15</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE II REVOLVING CREDIT FACILITY</td>
    <td width="10%" align="right">16</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 2.1. Revolving Credit Loans.</td>
    <td width="10%" align="right">16</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 2.2. Procedure for Advances of Revolving Credit Loans.</td>
    <td width="10%" align="right">16</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 2.3. Repayment of Revolving Credit Loans.</td>
    <td width="10%" align="right">17</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 2.4. Evidence of Debt.</td>
    <td width="10%" align="right">17</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 2.5. Permanent Reduction of the Revolving Credit Commitment.</td>
    <td width="10%" align="right">18</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 2.6. Termination of Revolving Credit Facility.</td>
    <td width="10%" align="right">18</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE III LETTER OF CREDIT FACILITY</td>
    <td width="10%" align="right">18</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 3.1. L/C Commitment.</td>
    <td width="10%" align="right">18</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 3.2. Procedure for Issuance of Letters of Credit.</td>
    <td width="10%" align="right">19</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 3.3. Fees and Other Charges.</td>
    <td width="10%" align="right">19</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 3.4. L/C Participations.</td>
    <td width="10%" align="right">20</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 3.5. Reimbursement.</td>
    <td width="10%" align="right">21</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 3.6. Obligations Absolute.</td>
    <td width="10%" align="right">21</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 3.7 Effect of Application.</td>
    <td width="10%" align="right">22</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE IV COMPETITIVE BID FACILITY</td>
    <td width="10%" align="right">22</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 4.1. Bidding Procedure.</td>
    <td width="10%" align="right">22</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 4.2. Minimum Amounts.</td>
    <td width="10%" align="right">25</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 4.3. Bidding Availability.</td>
    <td width="10%" align="right">25</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%"></td>
    <td width="80%">SECTION 4.4. Repayment of Competitive Bid Loans.</td>
    <td width="10%" align="right">25</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 4.5. Interest on Competitive Bid Loans.</td>
    <td width="10%" align="right">26</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 4.6. Competitive Bid Notes.</td>
    <td width="10%" align="right">26</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE V GENERAL LOAN PROVISIONS</td>
    <td width="10%" align="right">26</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 5.1. Interest.</td>
    <td width="10%" align="right">26</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 5.2. Notice and Manner of Conversion or Continuation of
        Revolving Credit Loans.</td>
    <td width="10%" align="right">28</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 5.3. Fees.</td>
    <td width="10%" align="right">28</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 5.4. Manner of Payment.</td>
    <td width="10%" align="right">30</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 5.5. Crediting of Payments and Proceeds.</td>
    <td width="10%" align="right">30</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 5.6. Adjustments.</td>
    <td width="10%" align="right">30</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 5.7. Nature of Obligations of Lenders Regarding Extensions of
        Credit; Assumption by the Administrative Agent.</td>
    <td width="10%" align="right">31</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 5.8. Joint and Several Liability of the Credit Parties.</td>
    <td width="10%" align="right">31</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 5.9. Changed Circumstances.</td>
    <td width="10%" align="right">33</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 5.10. Indemnity.</td>
    <td width="10%" align="right">35</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 5.11. Capital Requirements.</td>
    <td width="10%" align="right">36</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 5.12. Taxes.</td>
    <td width="10%" align="right">36</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING</td>
    <td width="10%" align="right">38</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 6.1. Closing.</td>
    <td width="10%" align="right">38</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 6.2. Conditions to Closing and Initial Revolving Credit Loans
        and Letters of Credit.</td>
    <td width="10%" align="right">38</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 6.3. Conditions to Extensions of Credit.</td>
    <td width="10%" align="right">40</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 6.4. Conditions Precedent to Each Competitive Bid Borrowing.</td>
    <td width="10%" align="right">41</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES</td>
    <td width="10%" align="right">41</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 7.1. Representations and Warranties.</td>
    <td width="10%" align="right">41</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 7.2. Survival of Representations and Warranties, Etc.</td>
    <td width="10%" align="right">46</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE VIII FINANCIAL INFORMATION AND NOTICES</td>
    <td width="10%" align="right">46</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%"></td>
    <td width="80%">SECTION 8.1. Financial Statements and Projections.</td>
    <td width="10%" align="right">46</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 8.2. Officer's Compliance Certificate.</td>
    <td width="10%" align="right">47</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 8.3. Accountants' Certificate.</td>
    <td width="10%" align="right">47</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 8.4. Other Reports.</td>
    <td width="10%" align="right">47</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 8.5. Notice of Litigation and Other Matters.</td>
    <td width="10%" align="right">48</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 8.6. Accuracy of Information.</td>
    <td width="10%" align="right">48</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE IX AFFIRMATIVE COVENANTS</td>
    <td width="10%" align="right">48</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 9.1. Preservation of Corporate Existence and Related Matters.</td>
    <td width="10%" align="right">49</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 9.2. Maintenance of Property.</td>
    <td width="10%" align="right">49</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 9.3. Insurance.</td>
    <td width="10%" align="right">49</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 9.4. Accounting Methods and Financial Records.</td>
    <td width="10%" align="right">49</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 9.5. Payment and Performance of Obligations.</td>
    <td width="10%" align="right">49</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 9.6. Compliance With Laws and Approvals.</td>
    <td width="10%" align="right">49</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 9.7. Environmental Laws.</td>
    <td width="10%" align="right">49</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 9.8. Compliance with ERISA.</td>
    <td width="10%" align="right">50</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 9.9. Conduct of Business.</td>
    <td width="10%" align="right">50</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 9.10. Visits and Inspections.</td>
    <td width="10%" align="right">50</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 9.11. Use of Proceeds.</td>
    <td width="10%" align="right">50</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE X FINANCIAL COVENANTS</td>
    <td width="10%" align="right">50</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 10.1. Interest Coverage Ratio.</td>
    <td width="10%" align="right">51</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 10.2. Minimum Net Worth.</td>
    <td width="10%" align="right">51</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE XI NEGATIVE COVENANTS</td>
    <td width="10%" align="right">51</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 11.1. Limitations on Debt and Guaranty Obligations.</td>
    <td width="10%" align="right">51</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 11.2. [Reserved].</td>
    <td width="10%" align="right">52</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 11.3. Limitations on Liens.</td>
    <td width="10%" align="right">53</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 11.4. Limitations on Loans, Advances, Investments and
        Acquisitions.</td>
    <td width="10%" align="right">54</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%"></td>
    <td width="80%">SECTION 11.5. Limitations on Mergers and Liquidation.</td>
    <td width="10%" align="right">55</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 11.6. Limitations on Sale or Transfer of Assets.</td>
    <td width="10%" align="right">56</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 11.7. Limitations on Dividends and Distributions.</td>
    <td width="10%" align="right">56</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 11.8. Transactions with Affiliates.</td>
    <td width="10%" align="right">56</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 11.9. Changes in Fiscal Year End.</td>
    <td width="10%" align="right">57</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 11.10. Amendments; Payments and Prepayments of Material Debt
        and Subordinated Debt.</td>
    <td width="10%" align="right">57</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE XII DEFAULT AND REMEDIES</td>
    <td width="10%" align="right">57</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 12.1. Events of Default</td>
    <td width="10%" align="right">57</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 12.2. Remedies</td>
    <td width="10%" align="right">59</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 12.3. Rights and Remedies Cumulative; Non-Waiver; Etc.</td>
    <td width="10%" align="right">60</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE XIII THE ADMINISTRATIVE AGENT</td>
    <td width="10%" align="right">60</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 13.1. Appointment.</td>
    <td width="10%" align="right">60</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 13.2. Delegation of Duties.</td>
    <td width="10%" align="right">60</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 13.3. Exculpatory Provisions.</td>
    <td width="10%" align="right">60</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 13.4. Reliance by the Administrative Agent.</td>
    <td width="10%" align="right">61</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 13.5. Notice of Default.</td>
    <td width="10%" align="right">61</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 13.6. Non-Reliance on the Administrative Agent and Other
        Lenders.</td>
    <td width="10%" align="right">62</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 13.7. Indemnification.</td>
    <td width="10%" align="right">62</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 13.8. The Administrative Agent in Its Individual Capacity.</td>
    <td width="10%" align="right">62</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 13.9. Resignation of the Administrative Agent; Successor
        Administrative Agent.</td>
    <td width="10%" align="right">63</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 13.10. Syndication and Documentation Agents.</td>
    <td width="10%" align="right">63</td>
  </tr>
  <tr>
    <td width="90%" colspan="2">ARTICLE XIV MISCELLANEOUS</td>
    <td width="10%" align="right">63</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.1. Notices.</td>
    <td width="10%" align="right">63</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.2. Expenses; Indemnity.</td>
    <td width="10%" align="right">64</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.3. Set-off.</td>
    <td width="10%" align="right">65</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.4. Governing Law.</td>
    <td width="10%" align="right">65</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%"></td>
    <td width="80%">SECTION 14.5. Consent to Jurisdiction.</td>
    <td width="10%" align="right">65</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.6. Waiver of Jury Trial.</td>
    <td width="10%" align="right">65</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.7. Reversal of Payments.</td>
    <td width="10%" align="right">65</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.8. Injunctive Relief; Punitive Damages.</td>
    <td width="10%" align="right">66</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.9. Accounting Matters.</td>
    <td width="10%" align="right">66</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.10. Successors and Assigns; Participations.</td>
    <td width="10%" align="right">66</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.11. Amendments, Waivers and Consents.</td>
    <td width="10%" align="right">70</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.12. Performance of Duties.</td>
    <td width="10%" align="right">72</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.13. All Powers Coupled with Interest.</td>
    <td width="10%" align="right">72</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.14. Survival of Indemnities.</td>
    <td width="10%" align="right">72</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.15. Titles and Captions.</td>
    <td width="10%" align="right">72</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.16. Severability of Provisions.</td>
    <td width="10%" align="right">72</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.17. Counterparts.</td>
    <td width="10%" align="right">72</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.18. Term of Agreement.</td>
    <td width="10%" align="right">72</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.19. Inconsistencies with Other Documents; Independent
        Effect of Covenants.</td>
    <td width="10%" align="right">72</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.20. Patriot Act.</td>
    <td width="10%" align="right">72</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.21. Ratings of Loans.</td>
    <td width="10%" align="right">73</td>
  </tr>
  <tr>
    <td width="10%"></td>
    <td width="80%">SECTION 14.22. Consent Under Three Year Credit Agreement.</td>
    <td width="10%" align="right">73</td>
  </tr>
  </table>
  <p>
  <u>Exhibits</u>
  </p>
  <p>Exhibit A- 1 - Form of Revolving Credit Note</p>
  <p>Exhibit A- 2 - Form of Competitive Bid Note</p>
  <p>Exhibit B-1 - Form of Notice of Revolving Credit Borrowing</p>
  <p>Exhibit B-2 - Form of Notice of Competitive Bid Borrowing</p>
  <p>Exhibit C - Form of Notice of Account Designation</p>
  <p>Exhibit D - Form of Notice of Prepayment</p>
  <p>Exhibit E - Form of Notice of Conversion/Continuation</p>
  <p align="center">v</p>
  <hr noshade size="1" color="#000000">
  <p>Exhibit F - Form of Officer's Compliance Certificate</p>
  <p>Exhibit G - Form of Assignment and Acceptance</p>
  <u>
  <p>Schedules</p>
  </u>
  <p>Schedule 1.1(a) - Lenders and Revolving Credit Commitments</p>
  <p>Schedule 1.1(b) - Outstanding Letters of Credit</p>
  <p>Schedule 7.1(b) - Subsidiaries and Capitalization</p>
  <p>Schedule 7.1(n) - Material Adverse Change</p>
  <p>Schedule 7.1(p) - Debt and Guaranty Obligations</p>
  <p>Schedule 7.1(q) - Litigation</p>
  <p>Schedule 11.3 - Existing Liens</p>
  <p>Schedule 11.4 - Existing Loans, Advances and Investments</p>
  <p align="center">vi</p>
  <hr noshade size="1" color="#000000">
  <p ALIGN="CENTER">AMENDED AND RESTATED FIVE-YEAR CREDIT AGREEMENT</p>
  <p ALIGN="CENTER">Dated as of June 15, 2004</p>
  <p>&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, CITIGROUP GLOBAL MARKETS INC. and J.P. MORGAN SECURITIES INC., as
  Joint Lead Arrangers and Joint Bookrunners, WACHOVIA BANK, NATIONAL
  ASSOCIATION, as Administrative Agent for the Lenders, CITIBANK, N.A. and
  JPMORGAN CHASE BANK, as Syndication Agents, and BANK OF AMERICA, N.A.,
  BARCLAYS BANK PLC and SUNTRUST BANK, as Documentation Agents, agree as
  follows:</p>
  <b>
  <p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; PRELIMINARY STATEMENT.</b> The Borrower, the Additional
  Obligors (other than Kasper, Ltd.), the lenders parties thereto and Wachovia
  Bank, National Association (as successor in interest to First Union National
  Bank), as administrative agent, are parties to a Five-Year Credit Agreement
  dated as of June 15, 1999 (the &quot;<u>Prior Credit Agreement</u>&quot;). The
  Borrower, the Additional Obligors, the parties hereto and Wachovia Bank,
  National Association, as Administrative Agent, desire to amend the Prior
  Credit Agreement as herein set forth and to restate it in its entirety giving
  effect to such amendment.</p>
  <b>
  <p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; NOW THEREFORE</b>, the parties hereto agree that, subject
  to the conditions set forth in Section 6.2, the Prior Credit Agreement is
  hereby amended and restated to read in its entirety as follows:</p>
  <b>
  <p>ARTICLE I DEFINITIONS</a></p>
  </b>
  <p>SECTION 1.1. <u>Definitions</u>. The following terms when used in this Agreement shall have the meanings
  assigned to them below:</p>
  <blockquote>
    <blockquote>
      <p>&nbsp;&nbsp;&nbsp; &quot;<u>Additional Debt Securities</u>&quot; shall have the meaning
      assigned thereto in Section 11.1(f).</p>
      <p>&nbsp;&nbsp;&nbsp; &quot;<u>Additional Obligors</u>&quot; means the collective reference
      to Jones Apparel Group, Jones Apparel Group Holdings, Kasper, Ltd. and
      Nine West Footwear in their capacities as co-obligors under this
      Agreement.</p>
      <p>&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>&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>&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>&nbsp;&nbsp;&nbsp; &quot;<u>Agreement</u>&quot; means this Amended and Restated Five Year
      Credit Agreement, as amended, restated, supplemented or otherwise modified
      from time to time.</p>
    </blockquote>
  </blockquote>
<hr noshade size="1" color="#000000">
  <blockquote>
    <blockquote>
      <p>&nbsp;&nbsp;&nbsp; &quot;<u>Alternative Currency</u>&quot; means (a) Pounds Sterling, (b)
      the euro or (c) any other lawful currency (other than Dollars) acceptable
      to the Issuing Lenders which, in the case of this clause (c), 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>&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>&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 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, 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>
  </blockquote>
<div align="center">
  <center>
<table BORDER="0" CELLSPACING="1" CELLPADDING="3" WIDTH="583">
  <tr>
    <td WIDTH="10%" VALIGN="TOP" align="center">&nbsp;</td>
    <td WIDTH="13%" VALIGN="TOP" align="center">&nbsp;</td>
    <td WIDTH="16%" VALIGN="TOP" align="center">&nbsp;</td>
    <td WIDTH="60%" VALIGN="TOP" COLSPAN="5" align="center">
      <p ALIGN="CENTER">Applicable Margin Per Annum
      <hr noshade size="1" color="#000000">
    </td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">Level</td>
    <td WIDTH="13%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">S&amp;P Rating</td>
    <td WIDTH="16%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">Moody's Rating</td>
    <td WIDTH="15%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">LIBOR Rate</td>
    <td WIDTH="12%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">Base Rate</td>
    <td WIDTH="11%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">Trade L/C&nbsp;Fee</td>
    <td WIDTH="11%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">Standby L/C&nbsp;Fee</td>
    <td WIDTH="10%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">Facility Fee</td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">I</td>
    <td WIDTH="13%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">&gt;=A-</td>
    <td WIDTH="16%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">&gt;=A3</td>
    <td WIDTH="15%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.300%</td>
    <td WIDTH="12%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.000%</td>
    <td WIDTH="11%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.125%</td>
    <td WIDTH="11%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.300%</td>
    <td WIDTH="10%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.100%</td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">II</td>
    <td WIDTH="13%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">&gt;=BBB+</td>
    <td WIDTH="16%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">&gt;=Baa1</td>
    <td WIDTH="15%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.375%</td>
    <td WIDTH="12%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.000%</td>
    <td WIDTH="11%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.150%</td>
    <td WIDTH="11%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.375%</td>
    <td WIDTH="10%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.125%</td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">III</td>
    <td WIDTH="13%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">&gt;=BBB</td>
    <td WIDTH="16%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">&gt;=Baa2</td>
    <td WIDTH="15%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.475%</td>
    <td WIDTH="12%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.000%</td>
    <td WIDTH="11%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.200%</td>
    <td WIDTH="11%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.475%</td>
    <td WIDTH="10%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.150%</td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">IV</td>
    <td WIDTH="13%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">&gt;=BBB-</td>
    <td WIDTH="16%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">&gt;=Baa3</td>
    <td WIDTH="15%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.675%</td>
    <td WIDTH="12%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.000%</td>
    <td WIDTH="11%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.250%</td>
    <td WIDTH="11%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.675%</td>
    <td WIDTH="10%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.200%</td>
  </tr>
  <tr>
    <td WIDTH="10%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">V</td>
    <td WIDTH="13%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">&lt;=BB+</td>
    <td WIDTH="16%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">&lt;=Ba1</td>
    <td WIDTH="15%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.875%</td>
    <td WIDTH="12%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.000%</td>
    <td WIDTH="11%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.300%</td>
    <td WIDTH="11%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.875%</td>
    <td WIDTH="10%" VALIGN="TOP" align="center">
      <p ALIGN="CENTER">0.250%</td>
  </tr>
</table>
  </center>
</div>
<blockquote>
  <blockquote>
    <p>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&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">2</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> 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(b)(ii).</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 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, (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 and (d)
    with respect to all notices and determinations in connection with, and
    payment of principal and interest on, any Competitive Bid Loan denominated
    in an Alternative Currency and bearing interest at the Floating Rate, 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>
  </blockquote>
</blockquote>
    <p align="center">3</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; &quot;<u>Competitive Bid Borrowing</u>&quot; means a
    borrowing consisting of simultaneous Competitive Bid Loans from each of the
    Lenders whose offer to make one or more Competitive Bid Loans as part of
    such borrowing has been accepted under the competitive bidding procedure
    described in Article IV.</p>
    <p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; &quot;<u>Competitive Bid Loan</u>&quot; means an advance
    by a Lender to the Borrower as part of a Competitive Bid Borrowing resulting
    from the competitive bidding procedure described in Article IV and refers to
    a Fixed Rate Loan or a Floating Rate Loan.</p>
    <p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; &quot;<u>Competitive Bid Note</u>&quot; means a
    promissory note of the Borrower payable to the order of any Lender, in
    substantially the form of Exhibit&nbsp;A-2 hereto, evidencing the
    indebtedness of the Borrower to such Lender resulting from a Competitive Bid
    Loan made by such Lender.</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 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>&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>&nbsp;&nbsp;&nbsp; &quot;<u>Dispute</u>&quot; shall have the meaning assigned thereto in
    Section 14.6.</p>
    <p>&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&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">4</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> 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>&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>&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>&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 approved in writing
    as an Eligible Assignee by the Borrower and the Administrative Agent.</p>
    <p>&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>&nbsp;&nbsp;&nbsp; &quot;<u>EMU</u>&quot; mean economic and monetary union as contemplated
    in the Treaty on European Union.</p>
    <p>&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>
  </blockquote>
</blockquote>
    <p align="center">5</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>&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>&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="JUSTIFY">&nbsp;&nbsp;&nbsp; &quot;<u>EURIBO Rate</u>&quot; means the rate appearing
    on Page 248 of the Moneyline Telerate Service (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 deposits in euro by reference to the Banking Federation of the
    European Union Settlement Rates for deposits in euro) at approximately 10:00
    a.m., London time, two Business Days prior to the commencement of such
    Interest Period, as the rate for deposits in euro with a maturity comparable
    to such Interest Period or, if for any reason such rate is not
    available,&nbsp;the average (rounded upward to the nearest whole multiple of
    1/100 of 1% per annum, if such average is not such a multiple) of the
    respective rates per annum at which deposits in euros are offered by the
    Reference Group in London, England to prime banks in the London interbank
    market at 11:00&nbsp;A.M. (London time) two Business Days before the first
    day of such Interest Period in an amount substantially equal to the amount
    of the applicable Competitive Bid Loan.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>euro</u>&quot; means the single currency of the European Union
    as constituted by the Treaty on European Union and as referred to in the
    legislative measures of the European Union for the introduction of,
    changover to or operation of the euro in one or more member states.</p>
    <p>&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>&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>&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>&nbsp;&nbsp;&nbsp; &quot;<u>Existing Loans</u>&quot; shall have the meaning assigned thereto
    in Section 6.2(f).</p>
    <p>&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 such Lender then outstanding, and (ii)
    such Lender's Revolving Credit Commitment Percentage of the Dollar Amount of
    (A) the L/C Obligations then outstanding and (B) the&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">6</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> Competitive Bid Loans
    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>&nbsp;&nbsp;&nbsp; &quot;<u>Facility Fee</u>&quot; shall have the meaning assigned thereto
    in Section 5.3(a).</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>FDIC</u>&quot; means the Federal Deposit Insurance Corporation,
    or any successor thereto.</p>
    <p>&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>&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>&nbsp;&nbsp;&nbsp; &quot;<u>Fixed Rate Loan</u>&quot; has the meaning specified in Section
    4.1(a).</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Floating Rate Loan</u>&quot; means a Competitive Bid Loan
    bearing interest based on the EURIBO Rate or LIBOR.</p>
    <p>&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>&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>&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>&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>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Granting Lender</u>&quot; shall have the meaning assigned
    thereto in Section 14.10(h).</p>
    <p>&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&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">7</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> 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>&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>&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>&nbsp;&nbsp;&nbsp; &quot;<u>Interest Coverage Ratio</u>&quot; shall have the meaning
    assigned thereto in Section 10.1.</p>
    <p>&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>&nbsp;&nbsp;&nbsp; &quot;<u>Interest Period</u>&quot; shall have the meaning assigned
    thereto in Section 5.1(b).</p>
    <p>&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>&nbsp;&nbsp;&nbsp; &quot;<u>Issuing Lender</u>&quot; means Wachovia, Citibank, N.A.,
    JPMorgan Chase Bank and Bank of America, N.A., each in its capacity as
    issuer of any Letter of 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>&nbsp;&nbsp;&nbsp; &quot;<u>Jones Apparel Group</u>&quot; means Jones Apparel Group, Inc., a
    Pennsylvania corporation.</p>
  </blockquote>
</blockquote>
    <p align="center">8</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Jones Apparel Group Holdings</u>&quot; means Jones Apparel Group
    Holdings, Inc., a Delaware corporation.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Kasper, Ltd.</u>&quot; means Kasper, Ltd., a Delaware
    corporation.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>L/C Commitment</u>&quot; means One Billion Dollars
    ($1,000,000,000).</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>L/C Facility</u>&quot; means the letter of credit facility
    established pursuant to Article III hereof.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>L/C Fee</u>&quot; shall have the meaning assigned thereto in
    Section 3.3(a).</p>
    <p>&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>&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>&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>&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
    Three-Year Credit Agreement.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Lending Office</u>&quot; means, with respect to any Lender, for
    Revolving Credit Loans, the office of such Lender maintaining such Lender's
    Revolving Credit Commitment Percentage of the Revolving Credit Loans and, in
    the case of a Competitive Bid Loan, the office of such Lender notified by
    such Lender to the Agent as its Lending Office with respect to such
    Competitive Bid Loan.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Letters of Credit</u>&quot; shall have the meaning assigned
    thereto in Section 3.1.</p>
    <p>&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 or an Alternative Currency
    (other than euro) in minimum amounts of at least $5,000,000 or the
    approximate Dollar Amount thereof, in the case of an Alternative Currency,
    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
    deposits in such currency 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 upward, if necessary, to the nearest one-hundredth of one percent
    (1/100%)) of the rate per annum at which&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">9</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> deposits in Dollars or an
    Alternative Currency 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 or
    the applicable Competitive Bid Loan, as the case may be.</p>
    <p>&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>
  </blockquote>
</blockquote>
<p ALIGN="RIGHT">&nbsp;
<div align="center">
  <center>
<table BORDER="0" CELLSPACING="1" CELLPADDING="7" WIDTH="500">
  <tr>
    <td WIDTH="38%" VALIGN="middle">
      <p></td>
    <td WIDTH="5%" VALIGN="middle">
      <p></td>
    <td WIDTH="112%" align="center">
      <p ALIGN="CENTER">LIBOR</td>
  </tr>
  <tr>
    <td WIDTH="38%" VALIGN="middle">
      LIBOR RATE&nbsp;</td>
    <td WIDTH="5%" VALIGN="middle">
      =</td>
    <td WIDTH="112%" VALIGN="TOP" align="center">
      <hr noshade size="1" color="#000000">
    </td>
  </tr>
  <tr>
    <td WIDTH="38%" VALIGN="middle">
    </td>
    <td WIDTH="5%" VALIGN="middle">
    </td>
    <td WIDTH="112%" VALIGN="TOP" align="center">
      <p>1.00 - Eurodollar Reserve Percentage</td>
  </tr>
</table>
  </center>
</div>
<blockquote>
  <blockquote>
    <p>&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>&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="JUSTIFY">&nbsp;&nbsp;&nbsp; &quot;<u>Loan</u>&quot; means a Revolving Credit Loan or
    a Competitive Bid Loan.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Loan Documents</u>&quot; means, collectively, this Agreement,
    the 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, supplemented or otherwise modified.</p>
    <p>&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>&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>&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>&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&nbsp;</p>
    </blockquote>
  </blockquote>
    <p align="center">10</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> sheet of the Credit Parties and their
    Subsidiaries prepared as of such date in accordance with GAAP.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Nine West Footwear</u>&quot; means Nine West Footwear
    Corporation, a Delaware corporation.</p>
    <p ALIGN="JUSTIFY">&nbsp;&nbsp;&nbsp; &quot;<u>Note</u>&quot; means a Revolving Credit Note or
    a Competitive Bid Note.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Notice of Account Designation</u>&quot; shall have the meaning
    assigned thereto in Section&nbsp;2.2(b).</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Notice of Competitive Bid Borrowing</u>&quot; shall have the
    meaning assigned thereto in Section&nbsp;4.1.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Notice of Conversion/Continuation</u>&quot; shall have the
    meaning assigned thereto in Section&nbsp;5.2.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Notice of Prepayment</u>&quot; shall have the meaning assigned
    thereto in Section 2.3(c).</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Notice of Revolving Credit Borrowing</u>&quot; shall have the
    meaning assigned thereto in Section&nbsp;2.2(a).</p>
    <p>&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 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 Note, any
    Letter of Credit or any of the other Loan Documents.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Officer's Compliance Certificate</u>&quot; shall have the
    meaning assigned thereto in Section&nbsp;8.2.</p>
    <p>&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>&nbsp;&nbsp;&nbsp; &quot;<u>Other Taxes</u>&quot; shall have the meaning assigned thereto in
    Section 5.12(b).</p>
    <p>&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>&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>
    </blockquote>
  </blockquote>
    <p align="center">11</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>&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>&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>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Permitted Lines of Business</u>&quot; shall have the meaning
    assigned thereto in Section 9.9.</p>
    <p>&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>&nbsp;&nbsp;&nbsp; &quot;<u>Pounds Sterling</u>&quot; means, unless otherwise qualified,
    pounds sterling in lawful currency of the United Kingdom.</p>
    <p>&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>&nbsp;&nbsp;&nbsp; &quot;<u>Prior Credit Agreement</u>&quot; shall have the meaning assigned
    thereto in the Preliminary Statement.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Prior Lenders</u>&quot; means, collectively, the lenders party
    to the Prior Credit Agreement.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Reference Group</u>&quot; shall mean the Lenders party to this
    Agreement on the Closing Date.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Register</u>&quot; shall have the meaning assigned thereto in
    Section 2.4(a).</p>
    <p>&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>&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>&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 (other than
    Competitive Bid Loans).</p>
    </blockquote>
  </blockquote>
    <p align="center">12</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>&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>&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>
    <p>&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 One Billion
    Dollars ($1,000,000,000).</p>
    <p>&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>&nbsp;&nbsp;&nbsp; &quot;<u>Revolving Credit Facility</u>&quot; means the revolving credit
    facility established pursuant to Article II hereof.</p>
    <p>&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>&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-1 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>&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>&nbsp;&nbsp;&nbsp; &quot;<u>SPC</u>&quot; shall have the meaning assigned thereto in Section
    14.10(h).</p>
    <p>&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>&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&nbsp;</p>
    </blockquote>
  </blockquote>
    <p align="center">13</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>
    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. 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>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Syndication Agents</u>&quot; means Citibank, N.A. and JPMorgan
    Chase Bank, each in their capacity as syndication agent hereunder, and any
    successor thereto.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Taxes</u>&quot; shall have the meaning assigned thereto in
    Section 5.12(a).</p>
    <p>&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>&nbsp;&nbsp;&nbsp; &quot;<u>Three-Year Credit Agreement</u>&quot; means the Three-Year
    Credit Agreement dated as of June 10, 2003 by and among the Borrower, the
    Additional Obligors thereunder, the Administrative Agent thereunder and the
    financial institutions party thereto, as amended, restated, supplemented,
    replaced, refinanced or otherwise modified from time to time.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Three-Year Credit Agreement Obligations</u>&quot; means the
    obligations of the Borrower and the Additional Obligors thereunder under the
    Three-Year Credit Agreement.</p>
    <p>&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 (other than Competitive Bid Loans) of such Lending Group Member) plus
    (ii) the Revolving Credit Commitment (as defined in the Three-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 Three-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>
    </blockquote>
  </blockquote>
    <p align="center">14</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>&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>&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>&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>&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>&nbsp;&nbsp;&nbsp; &quot;<u>United States</u>&quot; means the United States of America.</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Utilization Fee</u>&quot; shall have the meaning assigned
    thereto in Section 5.3(b).</p>
    <p>&nbsp;&nbsp;&nbsp; &quot;<u>Wachovia</u>&quot; means Wachovia Bank, National Association, a
    national banking association, and its successors.</p>
    <p>&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.</p>
    </blockquote>
  </blockquote>
  <p>SECTION 1.2. <u>General</u>.&nbsp; 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 Three-Year Credit Agreement shall be construed consistently
  and no term defined herein shall be limited or restricted by any similar
  definition in the Three-Year Credit Agreement nor shall any such term herein
  limit or restrict any similar definition in the Three-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>SECTION 1.3. <u>Other Definitions and Provisions</u>.&nbsp; (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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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">15</p>
<hr noshade size="1" color="#000000">
  <p>
  <b>
  ARTICLE II REVOLVING CREDIT FACILITY</p>
  </b>
  <p>SECTION 2.1. <u>Revolving Credit Loans</u>.&nbsp; 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 (i)
  all outstanding L/C Obligations and (ii) the aggregate principal amount of all
  Competitive Bid Loans then outstanding 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>SECTION 2.2. <u>Procedure for Advances of Revolving
  Credit Loans</u>.&nbsp; (a) <u>Requests for Borrowing</u>. The Borrower shall give the
  Administrative Agent irrevocable prior written notice in the form attached
  hereto as Exhibit B-1 (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>&nbsp;&nbsp;&nbsp;&nbsp;&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">16</p>
<hr noshade size="1" color="#000000">
  <p>SECTION 2.3. <u>Repayment of Revolving Credit Loans</u>.&nbsp; (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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) <u>Mandatory Repayment of Excess Extensions of Credit</u>. (i)&nbsp;&nbsp;If
  at any time the outstanding principal amount of all Revolving Credit Loans
  plus the sum of the Dollar Amount of (A) all outstanding L/C Obligations and
  (B) all Competitive Bid Loans 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>SECTION 2.4. <u>Evidence of Debt</u>.&nbsp; (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>&nbsp;&nbsp;&nbsp;&nbsp;&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&nbsp;</p>
  <p align="center">17</p>
<hr noshade size="1" color="#000000">
  <p> evidence of the existence and amounts of the
  obligations of the Borrowers therein recorded, 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>&nbsp;&nbsp;&nbsp;&nbsp;&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-1.</p>
  <p>SECTION 2.5. <u>Permanent Reduction of the Revolving
  Credit Commitment</u>&nbsp; (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, <u>provided further</u> that the aggregate
  amount of the Revolving Credit Commitments of the Lenders shall not be reduced
  to an amount that is less than the aggregate principal Dollar Amount of the
  Competitive Bid Loans then outstanding.</p>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>SECTION 2.6. <u>Termination of Revolving Credit
  Facility</u>.&nbsp; The Revolving Credit Facility shall terminate on the earliest of (a) June
  15, 2009, (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>
  <b>
  <p>ARTICLE III LETTER OF CREDIT FACILITY</a></p>
  </b>
  <p>SECTION 3.1. <u>L/C Commitment</u>.&nbsp; 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;<u>Letters of
  Credit</u>&quot;) for the account of the Borrower and its specified
  Subsidiaries 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>, <u>however</u>, that no
  Issuing Lender shall have any obligation to issue any</p>
  <p align="center">18</p>
<hr noshade size="1" color="#000000">
  <p>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 and all
  outstanding Competitive Bid Loans 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 ten
  Business Days prior to the Revolving Credit Termination Date, 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;<u>issue</u>&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>SECTION 3.2. <u>Procedure for Issuance of Letters of
  Credit</u>.&nbsp; 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>SECTION 3.3. <u>Fees and Other Charges</u>.&nbsp; (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;<u>L/C Fee</u>&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="center">19</p>
<hr noshade size="1" color="#000000">
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&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 end of each calendar quarter of
  each calendar quarter and on the Revolving Credit Termination Date.</p>
  <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>SECTION 3.4. <u>L/C Participations</u>.&nbsp; (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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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&nbsp;</p>
  <p align="center">20</p>
<hr noshade size="1" color="#000000">
  <p> 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 return to
  such Issuing Lender the portion thereof previously distributed by such Issuing
  Lender to it.</p>
  <p>SECTION 3.5. <u>Reimbursement</u>.&nbsp; (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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>SECTION 3.6. <u>Obligations Absolute</u>.&nbsp; 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&nbsp;</p>
  <p align="center">21</p>
<hr noshade size="1" color="#000000">
  <p> 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 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>SECTION 3.7 <u>Effect of Application</u>.&nbsp; 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>
  <b>
  <p>ARTICLE IV COMPETITIVE BID FACILITY</a></p>
  </b>
  <p>SECTION 4.1. <u>Bidding Procedure</u>.&nbsp; Each Lender severally agrees that the Borrower may make Competitive Bid
Borrowings under this Section&nbsp;4.1 from time to time on any Business Day
during the period from the Closing Date until the date occurring 30 days prior
to the Revolving Credit Termination Date in the manner set forth below; <u>provided</u>
that, following the making of each Competitive Bid Borrowing, the aggregate
Dollar Amount of all Loans and all L/C Obligations then outstanding shall not
exceed the aggregate amount of the Revolving Credit Commitments of the Lenders.</p>
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) The Borrower may request a Competitive Bid Borrowing under this
    Section&nbsp;4.1 by delivering to the Administrative Agent, by telecopier or
    telex, a notice of a Competitive Bid Borrowing (a &quot;<u>Notice of
    Competitive Bid Borrowing</u>&quot;), in substantially the form of
    Exhibit&nbsp;B-2 hereto, specifying therein the requested (i)&nbsp;date of
    such proposed Competitive Bid Borrowing, (ii)&nbsp;aggregate amount of such
    proposed Competitive Bid Borrowing, (iii)&nbsp;interest rate basis and day
    count convention to be offered by the Lenders, (iv)&nbsp;currency of such
    proposed Competitive Bid Borrowing, (v)&nbsp;in the case of a Competitive
    Bid Borrowing consisting of Floating Rate Loans, Interest Period, or in the
    case of a Competitive Bid Borrowing consisting of Fixed Rate Loans, maturity
    date for repayment of each Fixed Rate Loan to be made as part of such
    Competitive Bid Borrowing (which maturity date may not be earlier than the
    date occurring seven days after the date of such Competitive Bid Borrowing
    or later than the earlier of (A)&nbsp;365 days after the date of such
    Competitive Bid Borrowing and (B)&nbsp;the Revolving Credit Termination
    Date), (vi)&nbsp;interest payment date or dates relating thereto,
    (vii)&nbsp;location of the Borrower's account to which funds are to be
    advanced and (viii)&nbsp;other terms (if any)&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">22</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> to be applicable to such
    Competitive Bid Borrowing, not later than (1)&nbsp;10:00 A.M. (Charlotte
    time) at least two Business Days prior to the date of the proposed
    Competitive Bid Borrowing, if the Borrower shall specify in the Notice of
    Competitive Bid Borrowing that the rates of interest to be offered by the
    Lenders shall be fixed rates per annum (the Loans comprising any such
    Competitive Bid Borrowing being referred to herein as &quot;<u>Fixed Rate
    Loans</u>&quot;) and that the Loans comprising such proposed Competitive Bid
    Borrowing shall be denominated in Dollars, (2) 10:00 A.M. (Charlotte time)
    at least four Business Days prior to the date of the proposed Competitive
    Bid Borrowing, if the Borrower shall specify in the Notice of Competitive
    Bid Borrowing that the Loans comprising such Competitive Bid Borrowing shall
    be Floating Rate Loans denominated in Dollars, (3) 10:00&nbsp;A.M. (London
    time) at least two Business Days prior to the date of the proposed
    Competitive Bid Borrowing, if the Borrower shall specify in the Notice of
    Competitive Bid Borrowing that the Loans comprising such proposed
    Competitive Bid Borrowing shall be Fixed Rate Loans denominated in any
    Alternative Currency and (4)&nbsp;10:00&nbsp;A.M. (London time) at least
    four Business Days prior to the date of the proposed Competitive Bid
    Borrowing, if the Borrower shall instead specify in the Notice of
    Competitive Bid Borrowing that the Loans comprising such Competitive Bid
    Borrowing shall be Floating Rate Loans denominated in any Alternative
    Currency. Each Notice of Competitive Bid Borrowing shall be irrevocable and
    binding on the Borrower. The Administrative Agent shall in turn promptly
    notify each Lender of each request for a Competitive Bid Borrowing received
    by it from the Borrower by sending such Lender a copy of the related Notice
    of Competitive Bid Borrowing.</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) Each Lender may, if, in its sole discretion, it elects to do so,
    irrevocably offer to make one or more Competitive Bid Loans to the Borrower
    as part of such proposed Competitive Bid Borrowing at a rate or rates of
    interest specified by such Lender in its sole discretion, by notifying the
    Administrative Agent (which shall give prompt notice thereof to the
    Borrower), (i)&nbsp;before 9:30&nbsp;A.M. (Charlotte time) on the date of
    such proposed Competitive Bid Borrowing, in the case of a Competitive Bid
    Borrowing consisting of Fixed Rate Loans denominated in Dollars,
    (ii)&nbsp;before 10:00 A.M. (Charlotte time) three Business Days before the
    date of such proposed Competitive Bid Borrowing, in the case of a
    Competitive Bid Borrowing consisting of Floating Rate Loans, denominated in
    Dollars, (iii)&nbsp;before 12:00 noon (London time) on the Business Day
    prior to the date of such proposed Competitive Bid Borrowing, in the case of
    a Competitive Bid Borrowing consisting of Fixed Rate Loans denominated in
    any Alternative Currency and (iv)&nbsp;before 12:00 noon (London time) on
    the third Business Day prior to the date of such proposed Competitive Bid
    Borrowing, in the case of a Competitive Bid Borrowing consisting of Floating
    Rate Loans denominated in any Alternative Currency, of the minimum amount
    and maximum amount of each Competitive Bid Loan which such Lender would be
    willing to make as part of such proposed Competitive Bid Borrowing (which
    Dollar Amounts of such proposed Competitive Bid may exceed such Lender's
    Revolving Credit Commitment), the rate or rates of interest therefor and
    such Lender's Applicable Lending Office with respect to such Competitive Bid
    Loan; <u>provided</u> that if the Administrative Agent in its capacity as a
    Lender shall, in its sole discretion, elect to make any such offer, it shall
    notify the Borrower of such offer at least 30 minutes before the time and on
    the date on which notice of such election is to be given to the
    Administrative Agent by the other Lenders. If any Lender shall elect not to
    make such an offer, such Lender shall so notify the Administrative Agent
    before 10:00&nbsp;A.M. (Charlotte time) on the date on which notice of such
    election is to be given to the Administrative Agent by the other Lenders,
    and such Lender shall not be obligated to, and shall not, make any
    Competitive Bid Loan as part of&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">23</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> such Competitive Bid Borrowing; <u>provided</u>
    that the failure by any Lender to give such notice shall not cause such
    Lender to be obligated to make any Competitive Bid Loan as part of such
    proposed Competitive Bid Borrowing. The Administrative Agent shall promptly
    notify the Borrower by telecopy of each such offer made by a Lender,
    including all information required to be provided by the Lender in such
    offer by this Section 4.1(b) and the identity of the Lender making such
    offer</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) The Borrower shall, in turn, (i)&nbsp;before 10:30&nbsp;A.M.
    (Charlotte time) on the date of such proposed Competitive Bid Borrowing, in
    the case of a Competitive Bid Borrowing consisting of Fixed Rate Loans
    denominated in Dollars, (ii)&nbsp;before 11:00&nbsp;A.M. (Charlotte time)
    three Business Days before the date of such proposed Competitive Bid
    Borrowing, in the case of a Competitive Bid Borrowing consisting of Floating
    Rate Loans denominated in Dollars, (iii)&nbsp;before 3:00 P.M. (London time)
    on the Business Day prior to the date of such proposed Competitive Bid
    Borrowing, in the case of a Competitive Bid Borrowing consisting of Fixed
    Rate Loans denominated in any Alternative Currency and (iv)&nbsp;before 3:00
    P.M. (London time) on the third Business Day prior to the date of such
    Competitive Bid Borrowing, in the case of a Competitive Bid Borrowing
    consisting of Floating Rate Loans denominated in any Alternative Currency,
    either:</p>
    <blockquote>
      <blockquote>
        <p>&nbsp;&nbsp;&nbsp; (x) cancel such Competitive Bid Borrowing by giving the
        Administrative Agent notice to that effect, or</p>
        <p>&nbsp;&nbsp;&nbsp; (y) accept one or more of the offers made by any Lender or Lenders
        pursuant to paragraph (b) above, in its sole discretion, by giving
        notice to the Administrative Agent of the amount of each Competitive Bid
        Loan (which amount shall be equal to or greater than the minimum amount,
        and equal to or less than the maximum amount, notified to the Borrower
        by the Administrative Agent on behalf of such Lender for such
        Competitive Bid Loan pursuant to paragraph&nbsp;(b) above) to be made by
        each Lender as part of such Competitive Bid Borrowing, and reject any
        remaining offers made by Lenders pursuant to paragraph&nbsp;(b) above by
        giving the Administrative Agent notice to that effect. The Borrower
        shall accept the offers made by any Lender or Lenders to make
        Competitive Bid Loans in order of the lowest to the highest rates of
        interest offered by such Lenders. If two or more Lenders have offered
        the same interest rate, the amount to be borrowed at such interest rate
        will be allocated among such Lenders in proportion to the amount that
        each such Lender offered at such interest rate (rounded to integral
        multiples of $1,000,000 in a manner satisfactory to the Borrower).</p>
      </blockquote>
    </blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d) If the Borrower notifies the Administrative Agent that such
    Competitive Bid Borrowing is cancelled pursuant to paragraph&nbsp;(c)(x)
    above, the Administrative Agent shall give prompt notice thereof to the
    Lenders and such Competitive Bid Borrowing shall not be made.</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e) If the Borrower accepts one or more of the offers made by any Lender
    or Lenders pursuant to paragraph&nbsp;(c)(y) above, the Administrative Agent
    shall in turn promptly notify (i)&nbsp;each Lender that has made an offer as
    described in paragraph&nbsp;(b) above, of the date and aggregate amount of
    such Competitive Bid Borrowing and whether or not any offer or offers made
    by such Lender pursuant to paragraph&nbsp;(b) above have been accepted by
    the Borrower, (ii)&nbsp;each Lender that is to make a Competitive Bid Loan</p>
  </blockquote>
</blockquote>
    <p align="center">24</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>as part of such Competitive Bid Borrowing, of the amount of each Competitive
    Bid Loan to be made by such Lender as part of such Competitive Bid
    Borrowing, and (iii)&nbsp;each Lender that is to make a Competitive Bid Loan
    as part of such Competitive Bid Borrowing, upon receipt, that the
    Administrative Agent has received forms of documents appearing to fulfill
    the conditions set forth in Section 6.4. Each Lender that is to make a
    Competitive Bid Loan as part of such Competitive Bid Borrowing shall, before
    12:00 noon (Charlotte time), in the case of Competitive Bid Loans to be
    denominated in Dollars or 11:00 A.M. (London time), in the case of
    Competitive Bid Loans to be denominated in any Alternative Currency, on the
    date of such Competitive Bid Borrowing specified in the notice received from
    the Administrative Agent pursuant to clause&nbsp;(i) of the preceding
    sentence or any later time when such Lender shall have received notice from
    the Administrative Agent pursuant to clause&nbsp;(iii) of the preceding
    sentence, make available for the account of its Applicable Lending Office to
    the Administrative Agent (x)&nbsp;in the case of a Competitive Bid Borrowing
    denominated in Dollars, at its address referred to in Section&nbsp;14.1(c),
    in same day funds, such Lender's portion of such Competitive Bid Borrowing
    in Dollars and (y)&nbsp;in the case of a Competitive Bid Borrowing in an
    Alternative Currency, at the payment office for such Alternative Currency as
    shall have been notified by the Administrative Agent to the Lenders prior
    thereto, in same day funds, such Lender's portion of such Competitive Bid
    Borrowing in such Alternative Currency. Upon fulfillment of the conditions
    set forth in Section 6.4 and promptly after receipt by the Administrative
    Agent of such funds, the Administrative Agent will make such funds available
    to the Borrower at the location specified by the Borrower in its Notice of
    Competitive Bid Borrowing. Promptly after each Competitive Bid Borrowing,
    the Administrative Agent will notify each Lender of the amount and tenor of
    the Competitive Bid Borrowing.</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f) If the Borrower notifies the Administrative Agent that it accepts one
    or more of the offers made by any Lender or Lenders pursuant to
    paragraph&nbsp;(c)(y) above, such notice of acceptance shall be irrevocable
    and binding on the Borrower.</p>
  </blockquote>
</blockquote>
<p>SECTION 4.2. <u>Minimum Amounts</u>.&nbsp; Each Competitive Bid Borrowing shall be in an aggregate Dollar Amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and,
following the making of each Competitive Bid Borrowing, the Borrower shall be in
compliance with the limitation set forth in the proviso to the first sentence of
Section&nbsp;4.1 above.</p>
<p>SECTION 4.3. <u>Bidding Availability</u>.&nbsp; Within the limits and on the conditions set forth in this Article IV, the
Borrower may from time to time borrow under this Article IV, repay or prepay
pursuant to Section&nbsp;4.4 below, and reborrow under this Article IV, <u>provided</u>
that a Competitive Bid Borrowing shall not be made within three Business Days of
the date of any other Competitive Bid Borrowing.</p>
<p>SECTION 4.4. <u>Repayment of Competitive Bid Loans</u>.&nbsp; The Borrower shall repay to the Administrative Agent for the account of each
Lender that has made a Competitive Bid Loan, on the last day of its Interest
Period (in the case of Floating Rate Loans) or the maturity date (in the case of
Fixed Rate Loans) of each Competitive Bid Loan (such Interest Period or maturity
date being that specified by the Borrower for repayment of such Competitive Bid
Loan in the related Notice of Competitive Bid Borrowing delivered pursuant to
Section 4.1&nbsp;(a) above and provided in the Competitive Bid Note evidencing
such Competitive Bid Loan), the then unpaid principal amount of such Competitive
Bid Loan. The Borrower shall have no right to prepay any principal amount of any
Competitive Bid Loan unless, and then only on the terms, specified by the
Borrower for such Competitive Bid Loan in the related Notice of Competitive Bid
Borrowing&nbsp;</p>
<p align="center">25</p>
<hr noshade size="1" color="#000000">
<p> delivered pursuant to Section 4.1&nbsp;(a) above and set forth in the
Competitive Bid Note evidencing such Competitive Bid Loan.</p>
<p>SECTION 4.5. <u>Interest on Competitive Bid Loans</u>.&nbsp; The Borrower shall pay interest on the unpaid principal amount of each
Competitive Bid Loan from the date of such Competitive Bid Loan to the date the
principal amount of such Competitive Bid Loan is repaid in full, at the rate of
interest for such Competitive Bid Loan specified by the Lender making such
Competitive Bid Loan in its notice with respect thereto delivered pursuant to
Section 4.1&nbsp;(b) above, payable on the interest payment date or dates
specified by the Borrower for such Competitive Bid Loan in the related Notice of
Competitive Bid Borrowing delivered pursuant to Section 4.1&nbsp;(a) above, as
provided in the Competitive Bid Note evidencing such Competitive Bid Loan. Upon
the occurrence and during the continuance of an Event of Default (i) each
Competitive Bid Loan denominated in an Alternative Currency shall be exchanged
for a new Competitive Bid Loan for an equivalent amount of Dollars but with
otherwise identical terms and conditions to the Competitive Bid Loan being
exchanged and (ii) and the Borrower shall pay interest on the amount of unpaid
principal of and interest on each Competitive Bid Loan owing to a Lender,
payable in arrears on the date or dates interest is payable thereon, at a rate
per annum equal at all times to 2%&nbsp;per annum above the rate per annum
otherwise required to be paid on such Competitive Bid Loan under the terms of
the Competitive Bid Note evidencing such Competitive Bid Loan unless otherwise
agreed in such Competitive Bid Note. Computations in respect of Competitive Bid
Loans shall be made by the Administrative Agent as specified in the applicable
Notice of Competitive Bid Borrowing (or, in each case of Loans denominated in
Alternative Currencies where market practice differs, in accordance with market
practice), in each case for the actual number of days elapsed.</p>
<p>SECTION 4.6. <u>Competitive Bid Notes</u>.&nbsp; The indebtedness of the Borrower resulting from each Competitive Bid Loan
made to the Borrower as part of a Competitive Bid Borrowing shall be evidenced
by a separate Competitive Bid Note of the Borrower payable to the order of the
Lender making such Competitive Bid Loan.</p>
<b>
<p>ARTICLE V GENERAL LOAN PROVISIONS</a></p>
</b>
<p>SECTION 5.1. <u>Interest</u>.&nbsp; (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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) <u>Interest Periods</u>. In connection with each LIBOR Rate Loan and each
Floating Rate Loan, the Borrower, by giving notice at the times described in
Section 5.1(a) (or, in the case of a Floating Rate Loan, in the applicable
Notice of Competitive Bid Borrowing), shall elect an interest period (each, an
&quot;<u>Interest Period</u>&quot;) to be applicable to such Loan, which
Interest&nbsp;</p>
<p align="center">26</p>
<hr noshade size="1" color="#000000">
<p> 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 (or, if applicable to a Floating
Rate Loan, each EURIBO Rate); provided that:</p>
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp; (i) the Interest Period shall commence on the date of advance of or
    conversion to any LIBOR Rate Loan or the date of advance of any Floating
    Rate Loan and, in the case of immediately successive Interest Periods, each
    successive Interest Period shall commence on the date on which the next
    preceding Interest Period expires;</p>
    <p>&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 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>&nbsp;&nbsp;&nbsp; (iii) any Interest Period 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>&nbsp;&nbsp;&nbsp; (iv) no Interest Period shall extend beyond the Revolving Credit
    Termination Date; and</p>
    <p>&nbsp;&nbsp;&nbsp; (v) there shall be no more than six (6) Interest Periods for Revolving
    Credit Loans in effect at any time.</p>
  </blockquote>
</blockquote>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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, 2004; 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>&nbsp;&nbsp;&nbsp;&nbsp;&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&nbsp;</p>
<p align="center">27</p>
<hr noshade size="1" color="#000000">
<p> 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 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>SECTION 5.2. <u>Notice and Manner of Conversion or
Continuation of Revolving Credit Loan</u>s.&nbsp; 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>SECTION 5.3. <u>Fees</u>.&nbsp; (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>&nbsp;&nbsp;&nbsp;&nbsp;&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 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 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 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&nbsp;</p>
<p align="center">28</p>
<hr noshade size="1" color="#000000">
<p> 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) <u>Administrative Agent's and Other Fees</u>. 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 25, 2004.</p>
<p align="center">29</p>
<hr noshade size="1" color="#000000">
<p>SECTION 5.4. <u>Manner of Payment</u>.&nbsp; 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 Article IV or 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>SECTION 5.5. <u>Crediting of Payments and Proceeds</u>.&nbsp; 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>SECTION 5.6. <u>Adjustments</u>.&nbsp; If any Lender (a &quot;<u>Benefited Lender</u>&quot;) shall at any time
receive any payment of all or part of the Obligations (other than in respect of
Competitive Bid Loans) 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 collateral received by any other Lender,
if any, in respect of the Obligations (other than in respect of Competitive Bid
Loans) 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 Obligations (other than Competitive Bid Loans),
or shall provide such other Lenders with the benefits of any such&nbsp;</p>
<p align="center">30</p>
<hr noshade size="1" color="#000000">
<p> 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>SECTION 5.7. <u>Nature of Obligations of Lenders
Regarding Extensions of Credit; Assumption by the Administrative Agent</u>.&nbsp;
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 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>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>&nbsp;&nbsp;&nbsp;&nbsp;&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&nbsp;</p>
<p align="center">31</p>
<hr noshade size="1" color="#000000">
<p> 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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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 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,&nbsp;</p>
<p align="center">32</p>
<hr noshade size="1" color="#000000">
<p> 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>SECTION 5.9. <u>Changed Circumstances</u>.&nbsp; (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 the applicable currency, 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
deposits of the applicable currency 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 or
Floating 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 or Floating Rate
Loans and the right of the Borrower to convert any Revolving Credit Loan to or
continue any 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 or Floating Rate Loan together
with accrued interest thereon, on the last day of the then current Interest
Period applicable to such 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) <u>Laws Affecting LIBOR Rate or Floating 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 or Floating 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 or Floating 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 or Floating Rate Loan to the end of the then current Interest
Period applicable thereto , the applicable Loan shall immediately be converted
to a Base Rate Loan or a Loan that bears interest at the Base Rate for the
remainder of such Interest Period.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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 thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with&nbsp;</p>
<p align="center">33</p>
<hr noshade size="1" color="#000000">
<p> 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>
  <blockquote>
    <p>&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>&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 Floating 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 Floating 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 or Floating 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>
</blockquote>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d) <u>Mitigation Obligations; Replacement of Lenders</u>.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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&nbsp;</p>
<p align="center">34</p>
<hr noshade size="1" color="#000000">
<p> efforts to designate a different lending
office for funding or booking its 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 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>SECTION 5.10. <u>Indemnity</u>.&nbsp; 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 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 or Floating 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 or Floating 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 deposits in the applicable currency 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 amounts necessary to
compensate such&nbsp;</p>
<p align="center">35</p>
<hr noshade size="1" color="#000000">
<p> 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>SECTION 5.11. <u>Capital Requirements</u>.&nbsp; 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>SECTION 5.12. <u>Taxes</u>.&nbsp; (a) <u>Payments Free and Clear</u>. Any and all payments by the Borrower
hereunder or under the 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 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 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">36</p>
<hr noshade size="1" color="#000000">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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
Loans, the Letters of Credit, the other Loan Documents (hereinafter referred to
as &quot;<u>Other Taxes</u>&quot;).</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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&nbsp;</p>
<p align="center">37</p>
<hr noshade size="1" color="#000000">
<p> 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 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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
<b>
<p>ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND
BORROWING</a></p>
</b>
<p>SECTION 6.1. <u>Closing</u>.&nbsp; The closing shall take place at the offices of Shearman &amp; Sterling LLP at
10:00 a.m. on June 15, 2004 or at such other location, on such other date and at
such other time as the parties hereto shall mutually agree.</p>
<p>SECTION 6.2. <u>Conditions to Closing and Initial
Revolving Credit Loans and Letters of Credit</u>.&nbsp; 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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) <u>Closing Certificates; Etc</u>.</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 the
    appropriate Governmental Authority in its jurisdiction of incorporation, (B)
    the&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">38</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) <u>Consents; Defaults</u>.</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii) <u>No Event of Default</u>. No Default or Event of Default shall
    have occurred and be continuing.</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d) <u>Financial Matters</u>.</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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, 2003
    and the unaudited financial statements of Jones Apparel Group and its
    Subsidiaries for the fiscal quarter ended on April 3, 2004.</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 have received duly authorized and executed copies
    of the fee letter agreement referred to in Section 5.3(c).</p>
  </blockquote>
</blockquote>
    <p align="center">39</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e) <u>Miscellaneous</u>.</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
</blockquote>
<p>SECTION 6.3. <u>Conditions to Extensions of Credit</u>.&nbsp; The obligations of the Lenders to make any Extensions of Credit (other than
Competitive Bid Loans) are subject to the satisfaction of the following
conditions precedent on the relevant borrowing or issue date, as applicable:</p>
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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 representation and warranty
    made as of an earlier date, which representation and warranty shall remain
    true and correct as of such earlier date.</p>
  </blockquote>
</blockquote>
    <p align="center">40</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>
</blockquote>
<p>SECTION 6.4. <u>Conditions Precedent to Each
Competitive Bid Borrowing</u>.&nbsp; The obligation of each Lender that is to make a Competitive Bid Loan on the
occasion of a Competitive Bid Borrowing to make such Competitive Bid Loan as
part of such Competitive Bid Borrowing is subject to the conditions precedent
that (i)&nbsp;the Agent shall have received the written confirmatory Notice of
Competitive Bid Borrowing with respect thereto, (ii)&nbsp;on or before the date
of such Competitive Bid Borrowing, but prior to such Competitive Bid Borrowing,
the Agent shall have received a Competitive Bid Note payable to the order of
such Lender for each of the one or more Competitive Bid Loans to be made by such
Lender as part of such Competitive Bid Borrowing, in a principal amount equal to
the principal amount of the Competitive Bid Loan to be evidenced thereby and
otherwise on such terms as were agreed to for such Competitive Bid Loan in
accordance with Section&nbsp;4.1, and (iii)&nbsp;on the date of such Competitive
Bid Borrowing:</p>
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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 with the same effect as if made on and
    as of such date; except for any 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) <u>No Existing Default</u>. No Default or Event of Default shall have
    occurred and be continuing hereunder on the borrowing date with respect to
    such Competitive Bid Loan or after giving effect to the Competitive Bid
    Loans to be made on such date.</p>
  </blockquote>
</blockquote>
<b>
<p>ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE
CREDIT PARTIES</a></p>
</b>
<p>SECTION 7.1. <u>Representations and Warranties</u>.&nbsp; 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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">41</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> 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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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</p>
  </blockquote>
</blockquote>
    <p align="center">42</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>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>&nbsp;&nbsp;&nbsp;&nbsp;&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. 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 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h) <u>Environmental Matters</u>. Except as could not reasonably be
    expected to have a Material Adverse Effect:</p>
    <blockquote>
      <blockquote>
        <p>&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>&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>&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>&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>
      </blockquote>
    </blockquote>
  </blockquote>
</blockquote>
        <p align="center">43</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <blockquote>
      <blockquote>
        <p>&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>&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i) <u>ERISA</u>.</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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>
  </blockquote>
</blockquote>
    <p align="center">44</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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 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>&nbsp;&nbsp;&nbsp;&nbsp;&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,
    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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (m) <u>Financial Statements</u>. The (i) Consolidated balance sheets of
    Jones Apparel Group and its Subsidiaries as of December 31, 2003, 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 3, 2004, 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (n) <u>No Material Adverse Change</u>. Since the later to occur of (i)
    April 3, 2004 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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
  </blockquote>
</blockquote>
    <p align="center">45</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>
</blockquote>
<p>SECTION 7.2. <u>Survival of Representations and
Warranties, Etc.</u>&nbsp; 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>
<b>
<p>ARTICLE VIII FINANCIAL INFORMATION AND NOTICES</a></p>
</b>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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>SECTION 8.1. <u>Financial Statements and Projections</u>.&nbsp; (a) <u>Quarterly Financial Statements</u>. 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&nbsp;</p>
<p align="center">46</p>
<hr noshade size="1" color="#000000">
<p> 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>&nbsp;&nbsp;&nbsp;&nbsp;&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 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>SECTION 8.2. <u>Officer's Compliance Certificate</u>.&nbsp; 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>SECTION 8.3. <u>Accountants' Certificate</u>.&nbsp; 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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
</blockquote>
<p>SECTION 8.4. <u>Other Reports</u>.&nbsp; (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&nbsp;</p>
<p align="center">47</p>
<hr noshade size="1" color="#000000">
<p> 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>&nbsp;&nbsp;&nbsp;&nbsp;&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>SECTION 8.5. <u>Notice of Litigation and Other Matters</u>.&nbsp; 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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) any Default or Event of Default; and</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>
</blockquote>
<p>SECTION 8.6. <u>Accuracy of Information</u>.&nbsp; 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>
<b>
<p>ARTICLE IX AFFIRMATIVE COVENANTS</a></p>
</b>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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="center">48</p>
<hr noshade size="1" color="#000000">
<p>SECTION 9.1. <u>Preservation of Corporate Existence
and Related Matters</u>.&nbsp; 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>SECTION 9.2. <u>Maintenance of Property</u>.&nbsp; 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>SECTION 9.3. <u>Insurance</u>.&nbsp; Maintain insurance with financially sound and reputable insurance companies
against such risks and in such amounts as are customarily maintained by similar
businesses and as may be required by Applicable Law including, without
limitation, hazard and business interruption coverage.</p>
<p>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.</p>
<p>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.</p>
<p>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.</p>
<p>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&nbsp;</p>
<p align="center">49</p>
<hr noshade size="1" color="#000000">
<p> 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>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>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;<u>Permitted Lines of Business</u>&quot;),
or as otherwise permitted pursuant to the terms of this Agreement.</p>
<p>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>SECTION 9.11. <u>Use of Proceeds</u>. The Credit Parties shall use the proceeds of the 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>
<b>
<p>ARTICLE X FINANCIAL COVENANTS</a></p>
</b>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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="center">50</p>
<hr noshade size="1" color="#000000">
<p>SECTION 10.1. <u>Interest Coverage Ratio</u>. As of the end of any fiscal quarter, permit the ratio (the &quot;<u>Interest
Coverage Ratio</u>&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>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>
<b>
<p>ARTICLE XI NEGATIVE COVENANTS</a></p>
</b>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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>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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) the Obligations of the Credit Parties;</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) the Three-Year Credit Agreement Obligations;</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) Debt existing on the Closing Date (other than the Three-Year Credit
    Agreement Obligations), including the Debt as set forth on Schedule 7.1(p);</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">51</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> &quot;<u>Additional Debt Securities</u>&quot;)
    (including 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) 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;</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i) Debt incurred in respect of the extension, renewal, refinancing,
    replacement or refunding (collectively, the &quot;<u>refinancing</u>&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 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; <u>provided</u>,
    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;<u>Permitted Encumbrance</u>&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;&nbsp;&nbsp;&nbsp;&nbsp; (j) Debt incurred in connection with the Permitted Investment Policy as
    in effect on the date hereof.</p>
  </blockquote>
</blockquote>
<p>SECTION 11.2. <u>[Reserved]</u>.</p>
<p align="center">52</p>
<hr noshade size="1" color="#000000">
<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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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;&nbsp;&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;&nbsp;&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>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e) Liens of the Administrative Agent for the benefit of the
    Administrative Agent and the Lenders;</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h) Liens in existence on the Closing Date and described on Schedule
    11.3;</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
  </blockquote>
</blockquote>
    <p align="center">53</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (m) Liens arising in the ordinary course of business that do not secure
    monetary obligations;</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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 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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (r) Liens incurred in connection with the Permitted Investment Policy as
    in effect on the date hereof.</p>
  </blockquote>
</blockquote>
<p>SECTION 11.4. <u>Limitations on Loans, Advances,
Investments and Acquisitions</u>.&nbsp; 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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) Investments made in accordance with the Permitted Investment Policy;</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">54</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d) Investments (other than acquisitions) in the Permitted Lines of
    Business;</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
</blockquote>
<p>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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
  </blockquote>
</blockquote>
    <p align="center">55</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e) any Credit Party may merge or consolidate with or into any other
    Credit Party.</p>
  </blockquote>
</blockquote>
<p>SECTION 11.6. <u>Limitations on Sale or Transfer of
Assets</u>.&nbsp; 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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) the sale of inventory or the factoring of accounts receivable in the
    ordinary course of business;</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d) the sale of assets between the Credit Parties and any Subsidiary or
    between Subsidiaries or Credit Parties;</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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; and</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f) the sale of assets purchased in accordance with the Permitted
    Investment Policy as in effect on the date hereof.</p>
  </blockquote>
</blockquote>
<p>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>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)&nbsp;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)&nbsp;without limiting any other provision of this Agreement,
in connection with any acquisition otherwise&nbsp;</p>
<p align="center">56</p>
<hr noshade size="1" color="#000000">
<p> permitted pursuant to the terms of
this Agreement or (iii)&nbsp;for transactions between Credit Parties or between
Credit Parties and Subsidiaries of Credit Parties.</p>
<p>SECTION 11.9. <u>Changes in Fiscal Year End</u>.&nbsp; Change its Fiscal Year.</p>
<p>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>
<b>
<p>ARTICLE XII DEFAULT AND REMEDIES</a></p>
</b>
<p>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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) <u>Default in Payment of Principal of Loans and Reimbursement
    Obligations</u>. The Borrower shall default in any payment of principal of
    any Loan or Reimbursement Obligation when and as due (whether at maturity,
    by reason of acceleration or otherwise).</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) <u>Other Payment Default</u>. The Borrower shall default in the
    payment when and as due (whether at maturity, by reason of acceleration or
    otherwise) of interest on any 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>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c) <u>Misrepresentation</u>. 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d) <u>Default in Performance of Certain Covenants</u>. 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e) <u>Default in Performance of Other Covenants and Conditions</u>. 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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f) <u>Hedging Agreement</u>. 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>
  </blockquote>
</blockquote>
    <p align="center">57</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g) <u>Debt Cross-Default</u>. 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 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 Three-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 Loans or any Reimbursement Obligation), including,
    without limitation, the obligations under the Three-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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h) <u>Change in Control</u>. 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>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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</p>
  </blockquote>
</blockquote>
    <p align="center">58</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (k) [Reserved]</p>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
</blockquote>
<p>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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a) <u>Acceleration; Termination of Facilities</u>. Declare the principal
    of and interest on the 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 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>&nbsp;&nbsp;&nbsp;&nbsp;&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</p>
  </blockquote>
</blockquote>
    <p align="center">59</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p>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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
</blockquote>
<p>SECTION 12.3. <u>Rights and Remedies Cumulative;
Non-Waiver; Etc.</u>&nbsp; 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>
<b>
<p>ARTICLE XIII THE ADMINISTRATIVE AGENT</a></p>
</b>
<p>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 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>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>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&nbsp;</p>
<p align="center">60</p>
<hr noshade size="1" color="#000000">
<p> 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>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 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 Loans.</p>
<p>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="center">61</p>
<hr noshade size="1" color="#000000">
<p>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 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>SECTION 13.7. <u>Indemnification</u>.&nbsp; 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 payment of the
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 Loans, any Reimbursement Obligation and all other
amounts payable hereunder and the termination of this Agreement.</p>
<p>SECTION 13.8. <u>The Administrative Agent in Its
Individual Capacity</u>.&nbsp; 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 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="center">62</p>
<hr noshade size="1" color="#000000">
<p>SECTION 13.9. <u>Resignation of the Administrative
Agent; Successor Administrative Agent</u>.&nbsp; 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>SECTION 13.10. <u>Syndication and Documentation Agents</u>.&nbsp; 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>
<b>
<p>ARTICLE XIV MISCELLANEOUS</a></p>
</b>
<p>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 (3<sup>rd</sup>) 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>&nbsp;&nbsp;&nbsp;&nbsp;&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>If to the Credit Parties:</p>
<p>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</p>
  </blockquote>
</blockquote>
<p align="center">63</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
<p>If to Wachovia:</p>
<p>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</p>
<p>With copies to:</p>
<p>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</p>
<p>If to any Lender:</p>
<p>To the Address set forth on Schedule 1.1(a) hereto</p>
  </blockquote>
</blockquote>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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 Administrative Agent's Office referred to
herein, to which payments due are to be made and at which Loans will be
disbursed.</p>
<p>SECTION 14.2. <u>Expenses; Indemnity</u>.&nbsp; 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&nbsp;</p>
<p align="center">64</p>
<hr noshade size="1" color="#000000">
<p> (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
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>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>SECTION 14.4. <u>Governing Law</u>. This Agreement, the 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>SECTION 14.5. <u>Consent to Jurisdiction</u>.&nbsp; Each of the parties hereto hereby irrevocably consents to the personal
jurisdiction of the state and federal courts located in New York County, New
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>SECTION 14.6. <u>Waiver of Jury Trial</u>.&nbsp; 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>SECTION 14.7. <u>Reversal of Payments</u>.&nbsp; 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&nbsp;</p>
<p align="center">65</p>
<hr noshade size="1" color="#000000">
<p> 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>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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b) The Administrative Agent, the 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>SECTION 14.9. <u>Accounting Matters</u>.&nbsp; 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 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>SECTION 14.10. <u>Successors and Assigns;
Participations</u>.&nbsp; (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 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>&nbsp;&nbsp;&nbsp;&nbsp;&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 (other than Competitive Bid Loans) at the time owing to it and the
Revolving Credit Notes held by it); provided that:</p>
<blockquote>
  <blockquote>
    <p>&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&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">66</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> rights and obligations under this Agreement (other than any right to
    make Competitive Bid Loans, Competitive Bid Loans owing to it and
    Competitive Bid Notes);</p>
    <p>&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>&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>&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>&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>&nbsp;&nbsp;&nbsp; (vi) no consents will be required for assignments where the Eligible
    Assignee is an Affiliate of the assigning Lender.</p>
  </blockquote>
</blockquote>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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 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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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>&nbsp;&nbsp;&nbsp;&nbsp;&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="center">67</p>
<hr noshade size="1" color="#000000">
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp; (i) accept such Assignment and Acceptance;</p>
    <p>&nbsp;&nbsp;&nbsp; (ii) record the information contained therein in the Register;</p>
    <p>&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>&nbsp;&nbsp;&nbsp; (iv) promptly deliver a copy of such Assignment and Acceptance to the
    Borrower.</p>
  </blockquote>
</blockquote>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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
Lender. Each surrendered Revolving Credit Note or Revolving Credit Notes shall
be canceled and returned to the Borrower.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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 Notes held by it); provided that:</p>
<blockquote>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp; (i) each such participation shall be in an amount not less than
    $5,000,000;</p>
    <p>&nbsp;&nbsp;&nbsp; (ii) such Lender's obligations under this Agreement (including, without
    limitation, its Revolving Credit Commitment) shall remain unchanged;</p>
    <p>&nbsp;&nbsp;&nbsp; (iii) such Lender shall remain solely responsible to the other parties
    hereto for the performance of such obligations;</p>
    <p>&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>&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&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">68</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> 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>&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>
</blockquote>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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 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.</p>
<p>&nbsp;&nbsp;&nbsp;&nbsp;&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&nbsp;</p>
<p align="center">69</p>
<hr noshade size="1" color="#000000">
<p> 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 Revolving Credit
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>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i) <u>Certain Pledges or Assignments</u>. Nothing herein shall prohibit any
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.</p>
<p>SECTION 14.11. <u>Amendments, Waivers and Consents</u>.&nbsp; 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 Three-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>
  <blockquote>
    <p>&nbsp;&nbsp;&nbsp;&nbsp;&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&nbsp;</p>
  </blockquote>
</blockquote>
    <p align="center">70</p>
<hr noshade size="1" color="#000000">
<blockquote>
  <blockquote>
    <p> 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>&nbsp;&nbsp;&nbsp;&nbsp;&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>
</blockquote>
    <p align="center">71</p>
<hr noshade size="1" color="#000000">
<p>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>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>SECTION 14.14. <u>Survival of Indemnities</u>.&nbsp; 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
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>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>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>SECTION 14.17. <u>Counterparts</u>.&nbsp; 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>SECTION 14.18. <u>Term of Agreement</u>.&nbsp; 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>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>&nbsp;&nbsp;&nbsp;&nbsp;&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>SECTION 14.20. <u>Patriot Act</u>. Each Lender hereby notifies the Borrower that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the &quot;Act&quot;), it is required to obtain, verify and record
information that identifies each&nbsp;</p>
<p align="center">72</p>
<hr noshade size="1" color="#000000">
<p> borrower, guarantor or grantor (the &quot;Loan
Parties&quot;), which information includes the name and address of each Loan
Party and other information that will allow such Lender to identify such Loan
Party in accordance with the Act.</p>
<p>SECTION 14.21. <u>Ratings of Loans</u>. Each Lender hereby agrees that nothing in this agreement shall require or
imply that the Loans shall be required to be rated by any nationally recognized
securities rating organization.</p>
<p>SECTION 14.22. <u>Consent Under Three Year Credit
Agreement</u>. Each Lender hereunder that is also a lender under the Three-Year Credit
Agreement, by execution of this Agreement, hereby (i) agrees that each reference
in the Three-Year Credit Agreement to the &quot;Five-Year Credit Agreement&quot;
shall mean a reference to this Agreement and (ii) consents to the execution and
delivery of this Agreement by the Credit Parties and the performance of their
respective obligations hereunder pursuant to Section 14.11 of the Three-Year
Credit Agreement.</p>
<p ALIGN="CENTER">[Signature pages to follow]</p>
<p ALIGN="CENTER">&nbsp;73</p>

<hr noshade size="1" color="#000000">

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their authorized officers, all as of the day and year
first written above.</p>
<div align="center">
  <center>
  <table border="0" cellpadding="5" cellspacing="0" width="100%">
    <tr>
      <td width="40%"></td>
      <td width="60%">JONES APPAREL GROUP USA, INC.,<br>
        as Borrower<br>
        &nbsp;<br>
        By: <u>/s/&nbsp; Ira M. Dansky<br>
        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Ira M. Dansky<br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Secretary<br>
        &nbsp;</td>
    </tr>
    <tr>
      <td width="40%"></td>
      <td width="60%">JONES APPAREL GROUP, INC.,<br>
        as Additional Obligor<br>
        &nbsp;<br>
        By: <u>/s/&nbsp; Ira M. Dansky<br>
        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Ira M. Dansky<br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Exec. V.P., General Counsel and
        Secretary<br>
        &nbsp;</td>
    </tr>
    <tr>
      <td width="40%"></td>
      <td width="60%">JONES APPAREL GROUP HOLDINGS, INC.,<br>
        as Additional Obligor<br>
        &nbsp;<br>
        By: <u>/s/&nbsp; Ira M. Dansky<br>
        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Ira M. Dansky<br>
        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; President&nbsp;<br>
      </td>
    </tr>
    <tr>
      <td width="40%"></td>
      <td width="60%">
                        <p>KASPER, LTD.,<br>
                        as Additional Obligor<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; Efthimios P. Sotos<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Efthimios P.
                        Sotos<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President<br>
        </p>
      </td>
    </tr>
    <tr>
      <td width="40%"></td>
      <td width="60%">
                        <p>NINE WEST FOOTWEAR CORPORATION,<br>
                        as Additional Obligor<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; Ira M. Dansky<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Ira M. Dansky<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Executive Vice
                        President and Secretary<br>
        </p>
      </td>
    </tr>
  </table>
  </center>
</div>
                        <p align="center">74</p>
<hr noshade size="1" color="#000000">
<table border="0" cellpadding="5" cellspacing="0" width="100%">
  <tr>
    <td width="40%"></td>
    <td width="60%">WACHOVIA BANK, NATIONAL ASSOCIATION<br>
      as Administrative Agent, Issuing Lender and Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Kimberly A. Quinn<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Kimberly A. Quinn<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Director<br>
      &nbsp;</td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">CITIBANK, N.A.,<br>
      as Issuing Lender and Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Judith Green<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Judith Green<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President<br>
      &nbsp;</td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">JPMORGAN CHASE BANK,<br>
      as Issuing Lender and Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; James A. Knight<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; James A. Knight<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President&nbsp;<br>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">
                        <p>BANK OF AMERICA, N.A.,<br>
                        as Issuing Lender and Lender<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; Douglas J. Bolt<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Douglas J. Bolt<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President<br>
      </p>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">
                        <p>BARCLAYS BANK PLC<br>
                        as Lender<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; John Giannone<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; John Giannone<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Director<br>
      </p>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%"><p>SUNTRUST BANK<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Patrick M. Stevens<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Patrick M. Stevens<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President<br>
      </p>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">
                        <p>THE BANK OF NOVA SCOTIA<br>
                        as Lender<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; Todd S. Meller<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Todd S. Meller<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Managing Director<br>
      </p>
    </td>
  </tr>
</table>
<p align="center">75</p>
<hr noshade size="1" color="#000000">
<table border="0" cellpadding="5" cellspacing="0" width="100%">
  <tr>
    <td width="40%"></td>
    <td width="60%">THE ROYAL BANK OF SCOTLAND PLC<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Jayne Seaford<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Jayne Seaford<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Senior Vice President<br>
      &nbsp;</td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">UFJ BANK<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; John T. Feeney<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; John T. Feeney<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President<br>
      &nbsp;</td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">THE BANK OF NEW YORK<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Roger Grossman<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Roger Grossman<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President&nbsp;<br>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">
                        <p>MIZUHO CORPORATE BANK, LTD.<br>
                        as Lender<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; Greg Botshon<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Greg Botshon<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; SVP and Team
                        Leader<br>
      </p>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">
                        <p>NORINCHUKIN BANK<br>
                        as Lender<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; Masanori Shoji<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Masanori Shoji<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Joint General
                        Manager<br>
      </p>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%"><p>STANDARD CHARTERED BANK<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Alan Babcock<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Alan Babcock<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Senior Vice President<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Robert K. Reddington<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Robert K. Reddington<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; AVP/Credit Documentation<br>
      </p>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">
                        <p>SUMITOMO MITSUI BANKING CORPORATION<br>
                        as Lender<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; Edward McColly<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Edward McColly<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; VP, Department
                        Head<br>
      </p>
    </td>
  </tr>
</table>
<p align="center">76</p>
<hr noshade size="1" color="#000000">
<table border="0" cellpadding="5" cellspacing="0" width="100%">
  <tr>
    <td width="40%"></td>
    <td width="60%">U.S. BANK NATIONAL ASSOCIATION<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Jennifer Thurston<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Jennifer Thurston<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; AVP<br>
      &nbsp;</td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">UNION BANK OF CALIFORNIA, N.A.<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Theresa L. Rocha<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Theresa L. Rocha<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President<br>
      &nbsp;</td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">CHIAO TUNG BANK CO., LTD.<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Kuang-Hua Wei<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Kuang-Hua Wei<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; SVP &amp; General Manager<br>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">
                        <p>BANK OF CHINA<br>
                        as Lender<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; William W. Smith<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; William W.
                        Smith<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Deputy General
                        Manager<br>
      </p>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">
                        <p>BANCO BILBAO VIZCAYA ARGENTARIA<br>
                        as Lender<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; Hector O. Villegas<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Hector O.
                        Villegas<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President,
                        Global Corporate Banking<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; John Martini<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; John Martini<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President,
                        Corporate Banking<br>
      </p>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%"><p>BEAR STEARNS CORPORATE LENDING<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Victor Bulzacchelli<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Victor Bulzacchelli<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President<br>
      &nbsp;</p>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%"><p>CHANG HWA COMMERCIAL BANK, LTD.,<br>
      NEW YORK BRANCH<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Ming-Hsien Lin<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Ming-Hsien Lin<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; SVP &amp; General Manager<br>
      &nbsp;</p>
    </td>
  </tr>
</table>
<p align="center">77</p>
<hr noshade size="1" color="#000000">
<table border="0" cellpadding="5" cellspacing="0" width="100%">
  <tr>
    <td width="40%"></td>
    <td width="60%">E.SUN COMMERCIAL BANK, LTD.,<br>
      LOS ANGELES BRANCH<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Benjamin Lin<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Benjamin Lin<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; EVP and General Manager<br>
      &nbsp;</td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">MALAYAN BANKING BERHAD<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Wan Fadzmi Othman<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Wan Fadzmi Othman<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; General Manager<br>
      &nbsp;</td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">PNC BANK<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Denise D. Killen<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Denise D. Killen<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President<br>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%">
                        <p>UNICREDITO ITALIANO<br>
                        as Lender<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; Salyed A. Abbas<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Salyed A. Abbas<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; Vice President<br>
                        &nbsp;<br>
                        By: <u>/s/&nbsp; Luciano Cenedese<br>
                        </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Luciano
                        Cenedese<br>
                        &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; First Vice
                        President<br>
                        &nbsp;</p>
    </td>
  </tr>
  <tr>
    <td width="40%"></td>
    <td width="60%"><p>FIRST COMMERCIAL BANK,<br>
      NEW YORK AGENCY,<br>
      as Lender<br>
      &nbsp;<br>
      By: <u>/s/&nbsp; Bruce M.J. Ju<br>
      </u>&nbsp;&nbsp;&nbsp;&nbsp; Name:&nbsp; Bruce M.J. Ju<br>
      &nbsp;&nbsp;&nbsp;&nbsp; Title:&nbsp; VP &amp; GM<br>
      &nbsp;</p>
    </td>
  </tr>
</table>
<p align="center">78</p>

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