EXHIBIT 10.31

AMENDMENT NO. 1 TO THE
AMENDED

AND RESTATED
FIVE-YEAR CREDIT AGREEMENT

 

Dated as of November 17, 2004

        AMENDMENT NO. 1

(this "Amendment") TO THE AMENDED AND RESTATED FIVE-YEAR CREDIT AGREEMENT among
Jones Apparel Group USA, Inc., a Pennsylvania corporation (the "Borrower"), the
Additional Obligors referred to therein, the banks, financial institutions and
other institutional lenders parties to the Five-Year Credit Agreement referred
to below (collectively, the "Lenders") and Wachovia Bank, National Association,
as agent (the "Administrative Agent") for the Lenders.

        PRELIMINARY STATEMENTS:

        (1) The Borrower, the Additional Obligors, the Lenders, the
Administrative Agent and other parties thereto have entered into an Amended and
Restated Five-Year Credit Agreement dated as of June 15, 2004 (the "Five-Year
Credit Agreement"). Capitalized terms not otherwise defined in this Amendment
have the same meanings as specified in the Five-Year Credit Agreement.

        (2) The Borrower has requested that the Lenders agree to add Jones
Retail Corporation as an Additional Obligor under the Five-Year Credit
Agreement.

        (3) The Required Lenders are, on the terms and conditions stated below,
willing to grant the request of the Borrower and the Borrower and the Required
Lenders have agreed to amend the Five-Year Credit Agreement as hereinafter set
forth.

        SECTION 1. Amendments to Five-Year Credit Agreement. The Five-Year
Credit Agreement is, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 3, hereby amended
as follows:

>     (a) Section 1.1 is amended by inserting in the appropriate alphabetical
> order the following definition:
> 
> > "Jones Retail" means Jones Retail Corporation, a New Jersey corporation.
> 
>     (b) Section 1.1 is further amended by amending the definition of
> "Additional Obligors" in full to read as follows:
> 
> > "Additional Obligors" means the collective reference to Jones Apparel Group,
> > Jones Apparel Group Holdings, Kasper, Ltd., Nine West Footwear and Jones
> > Retail in their capacities as co-obligors under this Agreement.

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>     (c) Exhibit A-1 of the Five-Year Credit Agreement is amended in full to
> read as set forth as Exhibit A-1 to this Amendment.
> 
>     (d) Exhibit A-2 of the Five-Year Credit Agreement is amended in full to
> read as set forth as Exhibit A-2 to this Amendment.

        SECTION 2. Condition Subsequent. By execution below, Jones Retail hereby
covenants and agrees that it will (a) provide an allonge endorsement to each
Lender that has requested a Revolving Credit Note in accordance with Section
2.4(c) of the Five-Year Credit Agreement promptly after receipt of such a
request from such Lender and (b) deliver to the Administrative Agent, not later
than December 1, 2004, certificates of incumbency, certified resolutions,
articles of incorporation and bylaws, and opinions of counsel substantially
similar to those required by Section 6.2(b) of the Five-Year Credit Agreement,
in each case in form and substance reasonably satisfactory to the Administrative
Agent.

        SECTION 3. Conditions of Effectiveness. This Amendment shall become
effective as of the date first above written when, and only when, on or before
November 17, 2004 the Administrative Agent shall have received counterparts of
this Amendment executed by the Credit Parties and the Required Lenders or, as to
any of the Lenders, advice satisfactory to the Administrative Agent that such
Lender has executed this Amendment. This Amendment is subject to the provisions
of Section 14.11 of the Five-Year Credit Agreement.

        SECTION 4. Representations and Warranties of the Credit Parties. The
Credit Parties represent and warrant as follows:

>     (a) Each of the Credit Parties is a corporation duly organized, validly
> existing and in good standing under the laws of the jurisdiction of its
> incorporation.
> 
>     (b) The execution, delivery and performance by each Credit Party of this
> Amendment and the performance by each Credit Party of its obligations under
> the Five-Year Credit Agreement, as amended 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 other
> than a Lien permitted under the terms of the Loan Documents.

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>     (c) Each of the Credit Parties has the right, power and authority and has
> taken all necessary corporate and other action to authorize the execution,
> delivery and performance of this Amendment and the performance of its
> obligations the Five-Year Credit Agreement, as amended hereby, in accordance
> with their respective terms. This Amendment has been duly executed and
> delivered by the duly authorized officers of the Credit Parties and such
> document constitutes, and each of the Loan Documents does and continues to
> constitute, the legal, valid and binding obligation of the Credit Parties and,
> if applicable, each of their Subsidiaries party thereto, enforceable in
> accordance with their respective 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.
> 
>     (d) Except for matters existing on the Closing Date and set forth on
> Schedule 7.1(q) to the Five-Year Credit Agreement, 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
> this Amendment or any Loan Documents, as amended hereby.

        SECTION 5. Reference to and Effect on the Five-Year Credit Agreement and
the Loan Documents. (a) On and after the effectiveness of this Amendment, each
reference in the Five-Year Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import referring to the Five-Year Credit Agreement,
and each reference in the Notes and each of the other Loan Documents to "the
Credit Agreement", "thereunder", "thereof" or words of like import referring to
the Five-Year Credit Agreement, shall mean and be a reference to the Five-Year
Credit Agreement, as amended by this Amendment.

        (b) The Five-Year Credit Agreement, as specifically amended by this
Amendment, the Notes and each of the other Loan Documents, are and shall
continue, following the effectiveness of this Amendment, to be in full force and
effect and are hereby in all respects ratified and confirmed.

        (c) The execution, delivery and effectiveness of this Amendment shall
not, except as specifically provided herein, operate as a waiver of any right,
power or remedy of any Lender or the Administrative Agent under the Five-Year
Credit Agreement, nor constitute a waiver of any provision of the Five-Year
Credit Agreement.

        SECTION 6. Costs and Expenses. The Borrower agrees to pay on demand all
reasonable out-of-pocket expenses of the Administrative Agent in connection with
the preparation, execution, delivery and administration, modification and
amendment of this Amendment and the other instruments and documents to be
delivered hereunder (including, without limitation, the reasonable fees and
disbursements of

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counsel for the Administrative Agent) in accordance with the terms of
Section 14.2 of the Five-Year Credit Agreement.

        SECTION 7. Execution in Counterparts. This Amendment 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 all of which taken together shall constitute but one and the same agreement,
binding upon all parties, their successors and assigns. Delivery of an executed
counterpart of a signature page to this Amendment by telecopier shall be
effective as delivery of a manually executed counterpart of this Amendment.

        SECTION 8. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.

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        IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

JONES APPAREL GROUP USA, INC.
as Borrower

By: /s/ Wesley R. Card
       Name:  Wesley R. Card
       Title: Chief Financial Officer
 

JONES APPAREL GROUP, INC.
as Additional Obligor

By: /s/ Wesley R. Card
       Name:  Wesley R. Card
       Title: Chief Operating and Financial Officer
 

JONES APPAREL GROUP HOLDINGS, INC.
as Additional Obligor

By: /s/ Ira M. Dansky
       Name:  Ira M. Dansky
       Title: President
 

KASPER LTD.
as Additional Obligor

By: /s/ Peter Boneparth
       Name:  Peter Boneparth
       Title: President
 

NINE WEST FOOTWEAR CORPORATION
as Additional Obligor

By: /s/ Ira M. Dansky
       Name:  Ira M. Dansky
       Title: Executive Vice President and
                Secretary
 

JONES RETAIL CORPORATION
as Additional Obligor

By: /s/ Wesley R. Card
       Name:  Wesley R. Card
       Title: Chief Financial Officer

WACHOVIA BANK, NATIONAL ASSOCIATION
as Administrative Agent and Lender

By: /s/ Thomas Harper
       Name:  Thomas Harper
       Title: Managing Director
   

BANCO BILBAO VIZCAYA ARGENTINA

By: /s/ Hector O. Villegas
       Name:  Hector O. Villegas
       Title: Vice President
                Global Corporate Banking

By: /s/ Giampaolo Consigliere
       Name:  Giampaolo Consigliere
       Title: Vice President
 

BANK OF AMERICA, N.A.

By: /s/ Douglas J. Bolt
       Name:  Douglas J. Bolt
       Title: Vice President
 

BANK OF CHINA, NEW YORK BRANCH

By: /s/ William Smith
       Name:  William Smith
       Title: Chief Lending Officer
 

THE BANK OF NEW YORK

By: /s/ Roger Grossman
       Name:  Roger Grossman
       Title: Vice President
   

THE BANK OF NOVA SCOTIA

By: /s/ Todd Meller
       Name:  Todd Meller
       Title: Managing Director
 

BARCLAYS BANK PLC

By: /s/ Nicholas A. Bell
       Name:  Nicholas A. Bell
       Title: Director
                Loan Transaction Management
 

CHIAO TUNG BANK CO., LTD.
NEW YORK AGENCY

By: /s/ Kuang-Hua Wei
       Name:  Kuang-Hua Wei
       Title: SVP & General Manager
 

CITIBANK, N.A.

By: /s/ Judith Green
       Name:  Judith Green
       Title: Vice President
 

JPMORGAN CHASE BANK, N.A.
(FORMERLY KNOWN AS JPMORGAN
CHASE BANK)

By: /s/ James A. Knight
       Name:  James A. Knight
       Title: Vice President
 

THE ROYAL BANK OF SCOTLAND PLC

By: /s/ Maria Amaral-LeBlanc
       Name:  Maria Amaral-LeBlanc
       Title: Senior Vice President
 

STANDARD CHARTERED BANK

By: /s/ Lalita Vadhri
       Name:  Lalita Vadhri
       Title: Senior Vice President

By: /s/ Robert K. Reddington
       Name:  Robert K. Reddington
       Title: AVP/Credit Documentation
 

SUNTRUST BANK

By: /s/ Patrick M. Stevens
       Name:  Patrick M. Stevens
       Title: Vice President
 

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EXHIBIT A-1 - FORM OF
REVOLVING CREDIT NOTE

 

$_____________________ _____________, 200_

        FOR VALUE RECEIVED, the undersigned JONES APPAREL GROUP USA, INC., a
corporation organized under the laws of Pennsylvania, (the "Borrower"), JONES
APPAREL GROUP, INC., a corporation organized under the laws of Pennsylvania,
JONES APPAREL GROUP HOLDINGS, INC., a corporation organized under the laws of
Delaware, KASPER, LTD., a corporation organized under the laws of Delaware, NINE
WEST FOOTWEAR CORPORATION, a corporation organized under the laws of Delaware,
and JONES RETAIL CORPORATION, a corporation organized under the laws of New
Jersey (collectively, with the Borrower, the "Debtors"), hereby jointly and
severally promise to pay to the order of _________________, (the "Lender"), at
the place and times provided in the Credit Agreement referred to below, the
principal sum of ______________________ DOLLARS ($_____________) or, if less,
the aggregate unpaid principal amount of all Revolving Credit Loans made to the
Borrower by the Lender pursuant to that certain Amended and Restated Five Year
Credit Agreement dated as of June 15, 2004 (as amended, restated, supplemented
or otherwise modified, the "Credit Agreement") by and among Jones Apparel Group
USA, Inc., the Additional Obligors referred to therein, the Lenders who are or
may become a party thereto (collectively, the "Lenders"), Citigroup Global
Markets Inc. and J.P. Morgan Securities Inc., as Joint Lead Arrangers and Joint
Bookrunners, Wachovia Bank, National Association, as Administrative Agent, and
Citibank, N.A. and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase
Bank), as Syndication Agents, and Bank of America, N.A., Barclays Bank plc and
SunTrust Bank, as Documentation Agents. Capitalized terms used herein and not
defined herein shall have the meanings assigned thereto in the Credit Agreement.

        The unpaid principal amount of Revolving Credit Loans from time to time
outstanding is subject to mandatory repayment from time to time as provided in
the Credit Agreement and shall bear interest as provided in Section 5.1 of the
Credit Agreement. All payments of principal and interest on Revolving Credit
Loans shall be payable in lawful currency of the United States of America in
immediately available funds to the account designated in the Credit Agreement.

        This Revolving Credit Note (the "Revolving Credit Note") is entitled to
the benefits of, and evidences Obligations incurred under, the Credit Agreement,
to which reference is made for a statement of the terms and conditions on which
the Borrower is permitted and required to make prepayments and repayments of
principal of the Obligations evidenced by this Revolving Credit Note and on
which such Obligations may be declared to be immediately due and payable.

        THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.

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        The Debt evidenced by this Revolving Credit Note is senior in right of
payment to all Subordinated Debt referred to in the Credit Agreement.

        The Debtors hereby waive all requirements as to diligence, presentment,
demand of payment, protest and (except as required by the Credit Agreement)
notice of any kind with respect to this Revolving Credit Note.

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        IN WITNESS WHEREOF, the undersigned have executed this Revolving Credit
Note under seal as of the day and year first above written.

JONES APPAREL GROUP USA, INC.

By: ___________________
       Name: 
       Title:
 

JONES APPAREL GROUP, INC.

By: ___________________
       Name: 
       Title:
 

JONES APPAREL GROUP HOLDINGS, INC.

By: ___________________
       Name: 
       Title:
 

KASPER, LTD.

By: ___________________
       Name: 
       Title:
 

NINE WEST FOOTWEAR CORPORATION

By: ___________________
       Name: 
       Title:
 

JONES RETAIL CORPORATION

By: ___________________
       Name: 
       Title:

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EXHIBIT A-2 - FORM OF
COMPETITIVE BID
PROMISSORY NOTE

U.S.$_______________ Dated: _______________, 200_

        FOR VALUE RECEIVED, the undersigned JONES APPAREL GROUP USA, INC., a
corporation organized under the laws of Pennsylvania, (the "Borrower"), JONES
APPAREL GROUP, INC., a corporation organized under the laws of Pennsylvania,
JONES APPAREL GROUP HOLDINGS, INC., a corporation organized under the laws of
Delaware, KASPER, LTD., a corporation organized under the laws of Delaware, NINE
WEST FOOTWEAR CORPORATION, a corporation organized under the laws of Delaware,
and JONES RETAIL CORPORATION, a corporation organized under the laws of New
Jersey (collectively, with the Borrower, the "Debtors"), hereby jointly and
severally promise to pay to the order of _________________, (the "Lender"), at
the place and times provided in that certain Amended and Restated Five Year
Credit Agreement dated as of June 15, 2004 (as amended, restated, supplemented
or otherwise modified, the "Credit Agreement") by and among Jones Apparel Group
USA, Inc., the Additional Obligors referred to therein, the Lenders who are or
may become a party thereto (collectively, the "Lenders"), Citigroup Global
Markets Inc. and J.P. Morgan Securities Inc., as Joint Lead Arrangers and Joint
Bookrunners, Wachovia Bank, National Association, as Administrative Agent, and
Citibank, N.A. and JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase
Bank), as Syndication Agents, and Bank of America, N.A., Barclays Bank plc and
SunTrust Bank, as Documentation Agents (as amended or modified from time to
time, the "Credit Agreement"; the terms defined therein being used herein as
therein defined)), on _______________, 200_, the principal amount of
[U.S.$_______________] [for a Competitive Bid Loan in an Alternative Currency,
list currency and amount of such Loan].

        The undersigned promise to pay interest on the unpaid principal amount
hereof from the date hereof until such principal amount is paid in full, at the
interest rate and payable on the interest payment date or dates provided below:

> > Interest Rate: _____% per annum (calculated on the basis of a year of _____
> > days for the actual number of days elapsed) (revise as appropriate for a
> > Floating Rate Loan).

        Both principal and interest are payable in lawful money of ____________
to Wachovia Bank, National Association, as administrative agent, for the account
of the Lender at its office, at _________________________ in same day funds.

        This Promissory Note is one of the Competitive Bid Notes referred to in,
and is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among 

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other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events.

        THIS COMPETITIVE BID NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.

        The Debt evidenced by this Competitive Bid Note is senior in right of
payment to all Subordinated Debt referred to in the Credit Agreement.

        The Debtors hereby waive all requirements as to diligence, presentment,
demand of payment, protest and (except as required by the Credit Agreement)
notice of any kind with respect to this Competitive Bid Note.

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        IN WITNESS WHEREOF, the undersigned have executed this Competitive Bid
Note under seal as of the day and year first above written.

JONES APPAREL GROUP USA, INC.

By: ___________________
       Name: 
       Title:
 

JONES APPAREL GROUP, INC.

By: ___________________
       Name: 
       Title:
 

JONES APPAREL GROUP HOLDINGS, INC.

By: ___________________
       Name: 
       Title:
 

KASPER, LTD.

By: ___________________
       Name: 
       Title:
 

NINE WEST FOOTWEAR CORPORATION

By: ___________________
       Name: 
       Title:
 

JONES RETAIL CORPORATION

By: ___________________
       Name: 
       Title: