JONES APPAREL GROUP, INC.,JONES APPAREL GROUP HOLDINGS, INC.,JONES APPAREL GROUP USA, INC., andNINE WEST GROUP INC.,
as Issuers

and

THE BANK OF NEW YORK

as Trustee

INDENTURE 

Dated as of February 1, 2001

** Zero Coupon Convertible Senior Notes Due 2021**

 
<PAGE> i                                    **TABLE OF CONTENTS****Page**                                        ARTICLE 1                       DEFINITIONS AND INCORPORATION BY REFERENCESection 1.01.     Definitions................................................1Section 1.02.     Other Definitions..........................................8Section 1.03.     Incorporation by Reference of Trust Indenture Act..........8Section 1.04.     Rules of Construction......................................8                                        ARTICLE 2                                     THE SECURITIESSection 2.01.     Form of Securities.........................................9Section 2.02.     Title and Terms...........................................10Section 2.03.     Denominations.............................................10Section 2.04.     Forms Generally...........................................10Section 2.05.     Execution, Authentication and Delivery....................10Section 2.06.     Registrar, Paying Agent and Conversion Agent..............11Section 2.07.     Transfer and Exchange.....................................11Section 2.08.     Replacement Securities....................................12Section 2.09.     Outstanding Securities....................................13Section 2.10.     Temporary Securities; Exchange of Global Security for                  Definitive Securities.....................................13Section 2.11.     Book-entry Provisions for Global Securities...............14Section 2.12.     Cancellation..............................................15Section 2.13.     Special Transfer Provisions...............................15Section 2.14.     CUSIP and ISIN Numbers....................................18Section 2.15.     Legend on Restricted Securities...........................18                                        ARTICLE 3                                       REDEMPTIONSection 3.01.     Notices to Trustee........................................19Section 3.02.     Selection of Securities To Be Redeemed....................19Section 3.03.     Notice of Redemption......................................19Section 3.04.     Effect of Notice of Redemption............................20
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<PAGE> ii                                    **TABLE OF CONTENTS                                       (Continued)****Page**Section 3.05.     Deposit of Redemption Price...............................21Section 3.06.     Securities Redeemed in Part...............................21Section 3.07.     Conversion Arrangement on Call for Redemption.............21Section 3.08.     Purchase of Securities at Option of the Holder............22Section 3.09.     Repurchase of Securities at Option of the Holder upon                  Fundamental Change........................................28Section 3.10.     Effect of Purchase Notice or Fundamental Change                  Repurchase Notice.........................................35Section 3.11.     Deposit of Purchase Price or Fundamental Change                  Repurchase Price..........................................36Section 3.12.     Securities Purchased or Repurchased in Part...............37Section 3.13.     Covenant to Comply With Securities Laws Upon Purchase or                  Repurchase of Securities..................................37Section 3.14.     Repayment to the Issuers..................................37                                         ARTICLE 4                                         COVENANTSSection 4.01.     Payment of Securities.....................................37Section 4.02.     SEC Reports...............................................38Section 4.03.     Corporate Existence.......................................38Section 4.04.     Restrictions on Liens.....................................38Section 4.05.     Restrictions on Sale and Leaseback Transactions...........40Section 4.06.     Exempted Debt.............................................41Section 4.07.     Waiver of Certain Covenants...............................41Section 4.08.     Compliance Certificate....................................42Section 4.09.     Further Instruments and Acts..............................42Section 4.10.     Calculation of Original Issue Discount....................42Section 4.11.     Book-Entry System.........................................42                                         ARTICLE 5                                    SUCCESSOR COMPANIESSection 5.01.     Merger and Consolidation..................................42                                         ARTICLE 6                                   DEFAULTS AND REMEDIES
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**TABLE OF CONTENTS                                       (Continued)                                                                           Page**Section 6.01.     Events of Default.........................................43Section 6.02.     Acceleration..............................................45Section 6.03.     Other Remedies............................................46Section 6.04.     Waiver of Past Defaults...................................46Section 6.05.     Control by Majority.......................................46Section 6.06.     Limitation on Suits.......................................46Section 6.07.     Rights of Holders to Receive Payment......................47Section 6.08.     Collection Suit by Trustee................................47Section 6.09.     Trustee May File Proofs of Claim..........................47Section 6.10.     Priorities................................................47Section 6.11.     Undertaking for Costs.....................................48Section 6.12.     Waiver of Stay or Extension Laws..........................48                                         ARTICLE 7                                          TRUSTEESection 7.01.     Duties of Trustee.........................................48Section 7.02.     Rights of Trustee.........................................49Section 7.03.     Individual Rights of Trustee..............................50Section 7.04.     Trustee's Disclaimer......................................50Section 7.05.     Notice of Defaults........................................51Section 7.06.     Reports by Trustee to Holder..............................51Section 7.07.     Compensation and Indemnity................................51Section 7.08.     Replacement of Trustee....................................52Section 7.09.     Successor Trustee by Merger...............................52Section 7.10.     Eligibility; Disqualification.............................53Section 7.11.     Preferential Collection of Claims Against Issuers.........53                                         ARTICLE 8                                  DISCHARGE OF INDENTURESection 8.01.      Discharge of Liability on Securities.....................53Section 8.02.      Application of Trust Money...............................54Section 8.03.      Repayment to Issuers.....................................54
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**TABLE OF CONTENTS                                       (Continued)****Page**                                        ARTICLE 9                                       AMENDMENTSSection 9.01.     Without Consent of Holders................................54Section 9.02.     With Consent of Holders...................................55Section 9.03.     Compliance with Trust Indenture Act.......................56Section 9.04.     Revocation and Effect of Consents and Waivers.............56Section 9.05.     Notation on or Exchange of Securities.....................56Section 9.06.     Trustee To Sign Amendments................................56Section 9.07.     Payment for Consent.......................................57                                        ARTICLE 10                              SPECIAL TAX EVENT CONVERSIONSection 10.01.    Optional Conversion to Semi-annual Cash Pay Note Upon Tax                  Event.....................................................57Section 10.02.    Paying Agent To Hold Money in Trust.......................57Section 10.03.    Holder Lists..............................................58Section 10.04.    Payment of Interest; Interest Rights Preserved............58                                         ARTICLE 11                                         CONVERSIONSection 11.01.    Conversion Privilege......................................59Section 11.02.    Conversion Procedure......................................60Section 11.03.    Fractional Shares.........................................61Section 11.04.    Taxes on Conversion.......................................62Section 11.05.    Company to Provide Stock..................................62Section 11.06.    Adjustment for Change In Capital Stock....................62Section 11.07.    Adjustment for Rights Issue...............................63Section 11.08.    Adjustment for Other Distributions........................64Section 11.09.    When Adjustment May Be Deferred...........................66Section 11.10.    When No Adjustment Required...............................66Section 11.11.    Notice of Adjustment......................................66Section 11.12.    Voluntary Increase........................................66Section 11.13.    Notice of Certain Transactions............................66
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**TABLE OF CONTENTS                                       (Continued)****Page**Section 11.14.    Reorganization of Company; Special Distributions..........67Section 11.15.    Company Determination Final...............................68Section 11.16.    Trustee's Adjustment Disclaimer...........................68Section 11.17.    Simultaneous Adjustments..................................68Section 11.18.    Successive Adjustments....................................68Section 11.19.    Rights Issued in Respect of Common Stock Issued Upon                  Conversion................................................68Section 11.20.    Restriction on Common Stock Issued Upon Conversion........68                                        ARTICLE 12                                      MISCELLANEOUSSection 12.01.    Trust Indenture Act Controls..............................69Section 12.02.    Notices...................................................69Section 12.03.    Communication by Holders with Other Holders...............70Section 12.04.    Certificate and Opinion as to Conditions Precedent........70Section 12.05.    Statements Required in Certificate or Opinion.............70Section 12.06.    When Securities Disregarded...............................71Section 12.07.    Rules by Trustee, Paying Agent and Registrar..............71Section 12.08.    Legal Holidays............................................71Section 12.09.    Governing Law.............................................71Section 12.10.    No Recourse Against Others................................71Section 12.11.    Successors................................................72Section 12.12.    Multiple Originals........................................72Section 12.13.    Table of Contents; Headings...............................72Section 12.14.    Severability..............................................72EXHIBIT A: FORM OF SECURITY................................................A-1EXHIBIT B: FORM OF TRANSFER CERTIFICATE FOR TRANSFER     FROM GLOBAL SECURITY OR DEFINITIVE SECURITY     TO DEFINITIVE SECURITY................................................B-1EXHIBIT C: FORM OF NON-DISTRIBUTION LETTER FOR     INSTITUTIONAL ACCREDITED INVESTORS....................................C-1EXHIBIT D: FORM OF PURCHASE NOTICE.........................................D-1EXHIBIT E: FORM OF FUNDAMENTAL CHANGE REPURCHASE     NOTICE................................................................E-1 EXHIBIT F: FORM OF TRANSFER CERTIFICATE FOR TRANSFER     OF RESTRICTED COMMON STOCK............................................F-1
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    INDENTURE, dated as of February 1, 2001, by and among JONES APPARELGROUP, INC., a Pennsylvania corporation, JONES APPAREL GROUP HOLDINGS, INC., a Delawarecorporation, JONES APPAREL GROUP USA, INC., a Pennsylvania corporation, NINE WEST GROUPINC., a Delaware corporation (collectively, the "Issuers"), and THE BANK OF NEWYORK, a New York State banking corporation, as trustee (the "Trustee").
    Each party agrees as follows for the benefit of the other partiesand for the equal and ratable benefit of the Holders of the Issuers' Zero CouponConvertible Senior Notes Due 2021 (the "Securities"):

ARTICLE 1DEFINITIONS AND INCORPORATION BY REFERENCE

    SECTION 1.01.  Definitions.

    "Acquiring Person" has the meaning specified in Section3.09.

    "Affiliate" of any specified Person means any otherPerson, directly or indirectly, controlling or controlled by or under direct or indirectcommon control with such specified Person. For the purposes of this definition,"control" when used with respect to any Person means the power to direct themanagement and policies of such Person, directly or indirectly, whether through theownership of voting securities, by contract or otherwise; and the terms"controlling" and "controlled" have meanings correlative to theforegoing.

    "Agent Members" has the meaning specified inSection 2.11.

    "Attributable Debt" in respect of a Sale and LeasebackTransaction means, at the time of determination, the present value (discounted at theactual rate of interest of such transaction) of the obligation of the lessee for netrental payments during the remaining term of the lease included in such Sale and LeasebackTransaction (including any period for which such lease has been extended or may, at theoption of the lessor, be extended). The term "net rental payments" under anylease for any period shall mean the sum of the rental and other payments required to bepaid in such period by the lessee thereunder, not including, however, any amounts requiredto be paid by such lessee (whether or not designated as rental or additional rental) onaccount of maintenance and repairs, insurance, taxes, assessments, water rates or similarcharges required to be paid by such lessee thereunder or any amounts required to be paidby such lessee thereunder contingent upon the amount of sales, maintenance and repairs,insurance, taxes, assessments, water rates or similar charges. In the case of any leasewhich is terminable by the lessee upon the payment of a penalty, such net amount shallalso include the amount of such penalty, but no rent shall be considered as required to bepaid under such lease subsequent to the first date upon which it may be so terminatedwithout payment of such penalty.

    "Average Quoted Price" has the meaning specified inSection 11.01.

    "Board of Directors" means the Board of Directors of theapplicable Issuer or any committee thereof duly authorized to act on behalf of the Boardof Directors of such Issuer.

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    "Business Day" means each day which is not a LegalHoliday.

    "Capital Stock" of any Person means any and all shares,interests, rights to purchase, warrants, options, participations or other equivalents ofor interests in (however designated) equity of such Person, including any preferred stock,but excluding any debt securities convertible into such equity.

    "Clearstream" has the meaning specified in Section 2.01.

    "Closing Date" means the date of this Indenture.

    "Code" means the Internal Revenue Code of 1986, asamended.

    "Common Stock" means the shares of Common Stock, par value$0.01 per share, of the Company as it exists on the date of this Indenture or any othershares of Capital Stock of the Company into which the Common Stock shall be reclassifiedor changed.

    "Company" means Jones Apparel Group, Inc., a Pennsylvaniacorporation, until a successor Person shall have become such pursuant to the applicableprovisions of this Indenture, and thereafter "Company" shall mean such successorPerson.

    "Consolidated Net Tangible Assets" means, as of any dateof determination, the total amount of assets of the Issuers and their respectiveSubsidiaries (less applicable reserves and other properly deductible items) afterdeducting (1) all current liabilities (excluding the amount of those which are bytheir terms extendable or renewable at the option of the obligor to a date more than 12months after the date as of which the amount is being determined and excluding allintercompany items between an Issuer and any of its wholly-owned Subsidiaries or betweenIssuers or wholly-owned Subsidiaries of Issuers) and (2) all goodwill, trade names,trademarks, patents, unamortized debt discount and expense and other like intangibleassets, all as determined on a consolidated basis in accordance with GAAP.

    "Consolidated Shareholders' Equity" meansconsolidated shareholders' equity of the Issuers and their respective Subsidiaries asdetermined in accordance with GAAP and reflected on the Issuers' most recent balancesheet.

    "Conversion Agent" has the meaning specified in Section2.06.

    "Conversion Date" has the meaning specified inSection 11.02.

    "Conversion Rate" has the meaning specified inSection 11.01.

    "Default" means any event which is, or after notice orpassage of time or both would be, an Event of Default.

    "Defaulted Interest" has the meaning specified inSection 10.04.

    "Definitive Securities" has the meaning specified inSection 2.01.

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    "Depositary" means, with respect to the Securitiesissuable in whole or in part in global form, the Person specified pursuant toSection 2.01 hereof as the initial Depositary with respect to the Securities, until asuccessor shall have been appointed and become such pursuant to the applicable provisionsof this Indenture, and thereafter "Depositary" shall mean or include suchsuccessor.

    "Dollar" means a dollar or other equivalent unit in suchcoin or currency of the United States as at the time shall be legal tender for the paymentof public and private debt.

    "Euroclear" has the meaning specified in Section 2.01.

    "Ex-Dividend Time" has the meaning specified inSection 11.01.

    "Exchange Act" means the Securities Exchange Act of 1934,as amended.

    "Fundamental Change" has the meaning specified inSection 3.09.

    "Fundamental Change Notice" has the meaning specified inSection 3.09.

    "Fundamental Change Notice Date" has the meaning specifiedin Section 3.09.

    "Fundamental Change Repurchase Date" has the meaningspecified in Section 3.09.

    "Fundamental Change Repurchase Notice" has the meaningspecified in Section 3.09.

    "Fundamental Change Repurchase Price" has the meaningspecified in Section 3.09.

    "Funded Debt" means Indebtedness, whether incurred,assumed or guaranteed, maturing by its terms more than one year from the date of creationthereof or which is extendable or renewable at the sole option of the obligor in suchmanner that it may become payable more than one year from the date of creation thereof,provided, however, that Funded Debt shall not include obligations created pursuant toleases, or any Indebtedness or portion thereof maturing by its terms within one year fromthe time of any computation of the amount of outstanding Funded Debt unless suchIndebtedness shall be extendable or renewable at the sole option of the obligor in suchmanner that it may become payable more than one year from such time, or any Indebtednessfor the payment or redemption of which money in the necessary amount shall have beendeposited in trust either at or before the maturity or redemption date thereof.

    "GAAP" means generally accepted accounting principles inthe United States of America as in effect from time to time, including those principlesset forth in (i) the opinions and pronouncements of the Accounting Principles Boardof the American Institute of Certified Public Accountants, (ii) statements andpronouncements of the Financial Accounting Standards Board, (iii) such otherstatements by such other entity as approved by a significant segment of the accountingprofession and (iv) the rules and regulations of the SEC governing the inclusion offinancial statements (including pro forma financial statements) in periodic reportsrequired to be

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filed pursuant to Section 13 of the Exchange Act, including opinions andpronouncements in staff accounting bulletins and similar written statements from theaccounting staff of the SEC. All ratios and computations based on GAAP contained in thisIndenture shall be computed in conformity with GAAP.

    "Global Security" has the meaning specified in Section2.01.

    "Global Securities Legend" means the legend labeled assuch and that is set forth in Exhibit A hereto.

    "Holder" means the Person in whose name a Security isregistered on the Registrar's books.

    "Indebtedness" of a Person means indebtedness for borrowedmoney and all indebtedness under purchase money mortgages or other purchase money liens orconditional sales or similar title retention agreements (but excluding trade accountspayable in the ordinary course of business) in each case where such indebtedness has beencreated, incurred, assumed or guaranteed by such Person or where such Person is otherwiseliable therefore and indebtedness for borrowed money secured by any Lien upon propertyowned by such Person even though such Person has not assumed or become liable for thepayment of such indebtedness; provided that if the obligation so secured has not beenassumed in full by such Person or is otherwise not such Person's legal liability infull, the amount of such obligation for the purposes of this definition shall be limitedto the lesser of the amount of such obligation secured by such Lien or the fair marketvalue of the property securing such Lien.

    "Indenture" means this Indenture as amended orsupplemented from time to time and includes the terms of Securities established ascontemplated by Section 2.01.

    "Initial Purchasers" means Salomon Smith Barney Inc. andBear, Stearns & Co. Inc.

    "Interest Payment Date" has the meaning specified inSection 10.01.

    "Issue Date" means the date the Securities areauthenticated under this Indenture.

    "Issue Price" of any Security means, in connection withthe original issuance of such Security, the initial issue price at which the Security issold as set forth on the face of the Security.

    "Issuer" means each party named as such in this Indentureuntil a successor replaces it and, thereafter, means the successor and, for purposes ofany provision contained herein and required by the Trust Indenture Act, each other obligoron the indenture securities.

    "Issuers' Notice" has the meaning specified inSection 3.08.

    "Issuers' Notice Date" has the meaning specified inSection 3.08.

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    "Lien" means any mortgage, pledge, security interest,encumbrance, lien or charge of any kind (including any conditional sale or other titleretention agreement or lease in the nature thereof).

    "Market Price" has the meaning specified inSection 3.08.

    "Maturity", when used with respect to any Security, meansthe date on which the principal, Restated Principal Amount, Purchase Price or FundamentalChange Repurchase Price of such Security becomes due and payable as therein or hereinprovided, whether at the Stated Maturity, on a Redemption Date, Purchase Date orFundamental Change Repurchase Date, or by declaration of acceleration or otherwise.

    "Non-Global Purchasers" has the meaning specified inSection 2.01.

    "Offering Memorandum" means the offering memorandumrelating to the Securities dated as of January 25, 2001.

    "Officer" means the Chairman of the Board, the ChiefExecutive Officer, the Chief Financial Officer, the President, any Vice President, theTreasurer or the Secretary of the applicable Issuer.

    "Officers' Certificate" means a certificate signed bytwo Officers.

    "Opinion of Counsel" means a written opinion from legalcounsel. The counsel may be an employee of or counsel to the applicable Issuer or theTrustee.

    "Option Exercise Date" has the meaning specified inSection 10.01.

    "Original Issue Discount" of any Security means thedifference between the Issue Price and the Principal Amount at Maturity of the Security asset forth on the face of the Security.

    "Person" means any individual, corporation, partnership,limited liability company, joint venture, association, joint-stock company, trust,unincorporated organization, government or any agency or political subdivision thereof orany other entity.

    "Principal Amount at Maturity" of a Security means thePrincipal Amount at Maturity as set forth on the face of the Security.

    "Principal Property" means, any property owned or leasedby any Issuer or Restricted Subsidiary, the net book value of which exceeds one percent ofthe Consolidated Net Tangible Assets of the Issuers and their respective Subsidiaries.

    "Purchase Agreement" means the Purchase Agreement datedJanuary 25, 2001, among the Issuers and the Initial Purchasers.

    "Purchase Date" has the meaning specified inSection 3.08.

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    "Purchase Notice" has the meaning specified inSection 3.08.

    "Purchase Price" has the meaning specified inSection 3.08.

    "QIBs" has the meaning specified in Section 2.01.

    "Redemption Date" shall mean the date specified forredemption of the Securities in accordance with the terms of the Securities and Article 3hereof.

    "Redemption Price" has the meaning specified in theSecurities.

    "Regular Record Date" has the meaning specified inSection 10.01.

    "Registration Rights Agreement" means the RegistrationRights Agreement dated February 1, 2001, among the Issuers and the Initial Purchasers. 

    "Regulation S" has the meaning specified in Section 2.01.

    "Restated Principal Amount" has the meaning specified inSection 10.01.

    "Restricted Security" has the meaning specified in Section2.15.

    "Restricted Securities Legend" means the legend labeled assuch and that is set forth in Exhibit A hereto.

    "Restricted Subsidiary" means, at any time, any Subsidiaryof an Issuer which would be a "Significant Subsidiary" at such time, as suchterm is defined in Regulation S-X promulgated by the SEC, as in effect on the ClosingDate.

    "Rights" has the meaning specified in Section 11.19.

    "Rights Agreement" has the meaning specified inSection 11.19.

    "Rule 144A" has the meaning specified in Section 2.01.

    "Sale Price" has the meaning specified inSection 3.08.

    "SEC" means the Securities and Exchange Commission.

    "Securities" has the meaning specified in the secondparagraph of this Indenture.

    "Securities Act" means the Securities Act of 1933, asamended.

    "Securities Custodian" means the custodian with respect toa Global Security (as appointed by the Depositary) or any successor thereto, who shallinitially be the Trustee.

    "Shelf Registration" shall have the meaning set forth inthe Registration Rights Agreement.

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    "Special Record Date" has the meaning specified inSection 10.04.

    "Stated Maturity," when used with respect to any Security,means the date specified in such Security as the fixed date on which an amount equal tothe Principal Amount at Maturity of such Security is due and payable or, if the Securitieshave been converted into semi-annual cash pay notes pursuant to Section 10.01, the datespecified in such Security as the fixed date on which the Restated Principal Amountthereof or any installment of interest thereon is due and payable.

    "Subsidiary" of any Person means any corporation,association, partnership or other business entity of which more than 50% of the totalvoting power of shares of Capital Stock or other interests (including partnershipinterests) entitled (without regard to the occurrence of any contingency) to vote in theelection of directors, managers or trustees thereof is at the time owned or controlled,directly or indirectly, by (i) such Person, (ii) such Person and one or moreSubsidiaries of such Person or (iii) one or more Subsidiaries of such Person.

    "Tax Event" means that the Issuers shall have received anopinion from independent tax counsel experienced in such matters to the effect that, on orafter January 25, 2001, as a result of (a) any amendment to, or change (including anyannounced prospective change) in, the laws, rules or any regulations thereunder of theUnited States or any political subdivision or taxing authority thereof or therein or(b) any amendment to, or change in, an interpretation or application of such laws orregulations by any legislative body, court, governmental agency or regulatory authority,in each case which amendment or change is enacted, promulgated, issued or announced orwhich interpretation is issued or announced or which action is taken, on or after January25, 2001, there is more than an insubstantial risk that Original Issue Discount payable onthe Securities either (i) would not be deductible on a current accrual basis or(ii) would not be deductible under any other method, in either case in whole or inpart, by the Issuers (by reason of deferral, disallowance, or otherwise) for United StatesFederal income tax purposes.

    "Tax Event Date" has the meaning specified inSection 10.01.

    "Trust Indenture Act" means the Trust Indenture Act of1939 (15 U.S. Code Sections 77aaa-77bbbb) and the rules and regulations thereunder as in effecton the Closing Date.

    "Time of Determination" has the meaning specified inSection 11.01.

    "Trustee" means the party named as such in this Indentureuntil a successor replaces it and, thereafter, means the successor.

    "Trust Officer" means any Vice President, Assistant VicePresident, Assistant Treasurer or any other officer or assistant officer of the Trusteeassigned by the Trustee to administer its corporate trust matters.

    "Uniform Commercial Code" means the New York UniformCommercial Code as in effect from time to time.

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    "Wholly Owned Restricted Subsidiary" means a RestrictedSubsidiary, 100% of the outstanding Capital Stock of which (other than Capital Stockconstituting directors' qualifying shares or interests held by directors or shares orinterests required to be held by foreign nationals, in each case to the extent mandated byapplicable law) is directly or indirectly owned by an Issuer or by one or more WhollyOwned Restricted Subsidiaries.

    SECTION 1.02.  Other Definitions.

 
**Term**
 **Defined in Section"Bankruptcy Law"6.01"Custodian"6.01"Event of Default"6.01"Legal Holiday"12.08"Notice of Default"6.01"Paying Agent"2.06"protected purchaser"2.08"Registrar"2.06"Sale and Leaseback Transaction"4.05"Successor Company"5.01(a)
    SECTION 1.03.  Incorporation by Reference of TrustIndenture Act. This Indenture is subject to the mandatory provisions of the TrustIndenture Act, which are incorporated by reference in and made a part of this Indenture.The following Trust Indenture Act terms have the following meanings:

    "Commission" means the SEC.

    "indenture securities" means the Securities.

    "indenture security holder" means a Holder or Holder.

    "indenture to be qualified" means this Indenture.

    "indenture trustee" or "institutional trustee"means the Trustee.

    "obligor" on the indenture securities means the Issuersand any other obligor on the indenture securities.

    All other terms used in this Indenture that are defined by the TrustIndenture Act, defined by Trust Indenture Act reference to another statute or defined bySEC rule have the meanings assigned to them by such definitions.

    Section 1.04.  Rules of Construction. Unless thecontext otherwise requires:

    (1) a term has the meaning assigned to it;

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    (2) an accounting term not otherwise defined has the meaningassigned to it in accordance with GAAP;

    (3) "or" is not exclusive;

    (4) "including" means including without limitation;

    (5) words in the singular include the plural and words in the pluralinclude the singular; and

    (6) the principal amount of any non-interest bearing or otherdiscount security at any date shall be the principal amount thereof that would be shown ona balance sheet of the issuer dated such date prepared in accordance with GAAP.

ARTICLE 2THE SECURITIES

    SECTION 2.01.  Form of Securities. TheSecurities and the Trustee's certificate of authentication shall besubstantially in the form of Exhibit A which is hereby incorporated in andexpressly made a part of this Indenture. 

    The Securities offered and sold (i) in reliance onRegulation S under the Securities Act ("Regulation S") or (ii) to"qualified institutional buyers" as defined in Rule 144A ("QIBs")in reliance on Rule 144A under the Securities Act ("Rule 144A"), eachas provided in the Purchase Agreement, shall be issued in the form of one ormore permanent global securities in definitive, fully registered form withoutinterest coupons with the Global Securities Legend and Restricted SecuritiesLegend set forth in Exhibit A hereto (each, a "Global Security"). AnyGlobal Security shall be deposited on behalf of the purchasers of the Securitiesrepresented thereby with the Trustee, at its New York office, as custodian forthe Depositary, and registered in the name of the Depositary or a nominee of theDepositary for the accounts of participants in the Depositary (and, in the caseof Securities sold in accordance with Regulation S, registered with theDepositary for the accounts of designated agents holding on behalf of theEuroclear System ("Euroclear") or Clearstream Banking, societeanonyme ("Clearstream")), duly executed by the Company andauthenticated by the Trustee as hereinafter provided. The aggregate PrincipalAmount at Maturity of a Global Security may from time to time be increased ordecreased by adjustments made on the records of the Trustee and the Depositaryor its nominee a hereinafter provided.    Except as provided in Section 2.10 and 2.13, owners of beneficialinterests in Global Securities will not be entitled to receive physical delivery ofSecurities in definitive form. Purchasers of Securities who are not QIBs and did notpurchase Securities sold in reliance on Regulation S under the Securities Act (referred toherein as the "Non-Global Purchasers") will receive certificated Securities indefinitive form bearing the Restricted Securities Legend set forth in Exhibit A hereto("Definitive Securities"). Definitive Securities will bear the RestrictedSecurities Legend set forth on Exhibit A unless removed in accordance with Section2.13(b).

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    SECTION 2.02.  Title and Terms. The aggregatePrincipal Amount at Maturity of Securities which may be authenticated and delivered underthis Indenture is limited to $700,561,000 (subject to increase by up to $105,084,000 inthe event the over-allotment option granted by the Issuers to the Initial Purchasers isexercised in full), except for replacement Securities authenticated and delivered uponregistration or transfer of, or in exchange for, or in lieu of, other Securities pursuantto Section 2.08.

    The Securities shall be known and designated as the "ZeroCoupon Convertible Senior Notes Due 2021" of the Issuers with a Stated Maturity onFebruary 1, 2021.

    The Issue Price and Original Issue Discount accrued on theSecurities (or interest, if the Securities have been converted into semi-annual cash paynotes pursuant to Section 10.01) shall be payable at the office or agency of the Companyin The City of New York maintained for such purpose and at any other office or agencymaintained by the Issuers for such purpose; provided, however, that at the option of theIssuers payments may be made by wire transfer or by check mailed to the address of thePerson entitled thereto as such address shall appear in the Security Register.

    The Securities shall not have the benefit of a sinking fund.

    The Securities shall not be superior in right of payment to, andshall rank pari passu with, all other unsecured and unsubordinated indebtedness of theIssuers.

    SECTION 2.03.  Denominations. The Securities shallbe issuable only in registered form without coupons and in denominations of $1,000Principal Amount at Maturity and any integral multiple of $1,000 Principal Amount atMaturity above that amount.

    SECTION 2.04.  Forms Generally. The Securities mayhave such letters, notations, numbers or other marks of identification and such legends orendorsements placed thereon as may be required by law, securities exchange rule, theInternal Revenue Code of 1986, as amended, and regulations thereunder, agreements to whichany Issuer is subject, if any, or usage (provided that any such notation legend orendorsement is in a form acceptable to the Issuers). Each Security shall be dated the dateof its authentication.

    The definitive Securities shall be printed, lithographed or engravedon steel engraved borders or may be produced in any other manner, all as determined by theOfficers executing such Securities, as evidenced by their execution thereof.

    SECTION 2.05.  Execution, Authentication and Delivery.One or more Officers of the Issuers shall sign the Securities on behalf of the Issuers bymanual or facsimile signature. The Issuers' seal, if any, shall be impressed,affixed, imprinted or reproduced on the Securities and may be in facsimile form.

    If an Officer of the Issuers whose signature is on a Security nolonger holds that office at the time the Trustee authenticates the Security, the Securityshall be valid nevertheless.

    A Security shall not be valid until an authorized signatory of theTrustee manually signs the certificate of authentication on the Security. The signatureshall be conclusive evidence 

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that the Security has been authenticated under this Indenture. A Security shall bedated the date of its authentication.

    The Trustee may appoint an authenticating agent reasonablyacceptable to the Issuers to authenticate the Securities. Any such appointment shall beevidenced by an instrument signed by a Trust Officer, a copy of which shall be furnishedto the Issuers. Unless limited by the terms of such appointment, an authenticating agentmay authenticate Securities whenever the Trustee may do so. Each reference in thisIndenture to authentication by the Trustee includes authentication by such agent. Anauthenticating agent has the same rights as any Registrar, Paying Agent or agent forservice of notices and demands.

    SECTION 2.06.  Registrar, Paying Agent and ConversionAgent. The Issuers shall maintain an office or agency where Securities may bepresented for registration of transfer or for exchange (the "Registrar"), anoffice or agency where Securities may be presented for payment (the "PayingAgent") and an office where Securities may be presented for conversion (the"Conversion Agent"). The Registrar shall keep a register of the Securities andof their transfer and exchange. The Issuers may have one or more co-registrars, one ormore additional paying agents and one or more additional conversion agents. The term"Paying Agent" includes any additional paying agent, the term"Registrar" includes any co-registrars and the term "Conversion Agent"includes any additional conversion agents. The Issuers initially appoint the Trustee as(i) Registrar, Paying Agent and Conversion Agent in connection with the Securitiesand (ii) the Securities Custodian with respect to the Global Securities.

    The Issuers shall enter into an appropriate agency agreement withany Registrar, Paying Agent or Conversion Agent not a party to this Indenture, which shallincorporate the terms of the Trust Indenture Act. The agreement shall implement theprovisions of this Indenture that relate to such agent. The Issuers shall notify theTrustee of the name and address of any such agent. If the Issuers fail to maintain aRegistrar, Paying Agent or Conversion Agent, the Trustee shall act as such and shall beentitled to appropriate compensation therefor pursuant to Section 7.07. The Issuersor any of their domestically organized Wholly Owned Restricted Subsidiaries may act asPaying Agent, Registrar or Conversion Agent.

    The Issuers may remove any Registrar, Paying Agent or ConversionAgent upon written notice to such Registrar, Paying Agent or Conversion Agent and to theTrustee; provided, however, that no such removal shall become effective until(1) acceptance of an appointment by a successor as evidenced by an appropriateagreement entered into by the Issuers and such successor Registrar, Paying Agent orConversion Agent, as the case may be, and delivered to the Trustee or(2) notification to the Trustee that the Trustee shall serve as Registrar, PayingAgent or Conversion Agent until the appointment of a successor in accordance with clause(1) above. The Registrar, Paying Agent or Conversion Agent may resign at any time uponwritten notice; provided, however, that the Trustee may resign as Registrar, Paying Agentor Conversion Agent only if the Trustee also resigns as Trustee in accordance withSection 7.08.

    SECTION 2.07.  Transfer and Exchange. TheSecurities shall be issued in registered form and shall be transferable only upon thesurrender of a Security for registration of transfer and in compliance with thisIndenture. When a Security is presented to the Registrar with a request to register atransfer, the Registrar shall register the transfer as requested if the 

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requirements of Section 8-401(a)(1) of the Uniform Commercial Code are met. WhenSecurities are presented to the Registrar with a request to exchange them for Securitiesof other denominations and of a like aggregate Principal Amount at Maturity and tenor, theRegistrar shall make the exchange as requested if the same requirements are met. To permitregistration of transfers and exchanges, the Issuers shall execute and the Trustee shallauthenticate Securities at the Registrar's request. The Issuers may require paymentof a sum sufficient to pay all taxes, assessments or other governmental charges inconnection with any such transfer or exchange pursuant to this Section. The Issuers shallnot be required to make and the Registrar need not register transfers or exchanges ofSecurities selected for redemption (except, in the case of Securities to be redeemed inpart, the portion thereof not to be redeemed) or any Securities for a period of 15 daysbefore a selection of Securities to be redeemed.

    Prior to the due presentation for registration of transfer orconversion of any Security, the Issuers, the Trustee, the Paying Agent, the Registrar, andthe Conversion Agent may deem and treat the Person in whose name a Security is registeredas the absolute owner of such Security for the purpose of receiving the payment of theprincipal on such Security (and interest, if the Securities have been converted intosemi-annual cash pay notes pursuant to Section 10.01) or conversion of such Security, asthe case may be, and for all other purposes whatsoever, whether or not such Security isoverdue, and none of the Issuers, the Trustee, the Paying Agent, the Registrar or theConversion Agent shall be affected by notice to the contrary.

    Any Holder of a Global Security shall, by acceptance of such GlobalSecurity, agree that transfers of beneficial interest in such Global Security may beeffected only through a book-entry system maintained by (i) the Holder of such GlobalSecurity (or its agent) or (ii) any Holder of a beneficial interest in such GlobalSecurity, and that ownership of a beneficial interest in such Global Security shall berequired to be reflected in a book entry.

    All Securities issued upon any transfer or exchange pursuant to theterms of this Indenture will evidence the same debt and will be entitled to the samebenefits under this Indenture as the Securities surrendered upon such transfer orexchange.

    SECTION 2.08.  Replacement Securities. If amutilated Security is surrendered to the Registrar or if the Holder of a Security claimsthat the Security has been lost, destroyed or wrongfully taken, the Issuers shall issueand the Trustee shall authenticate a replacement Security if the requirements ofSection 8-405 of the Uniform Commercial Code are met, such that the Holder(i) satisfies the Issuers or the Trustee within a reasonable time after such Holderhas notice of such loss, destruction or wrongful taking, and the Registrar does notregister a transfer prior to receiving such notification, (ii) requests the Issuersor the Trustee to issue a new replacement Security, prior to the Security being acquiredby a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code(a "protected purchaser") and (iii) satisfies any other reasonablerequirements of the Trustee. If required by the Trustee or the Issuers, such Holder shallfurnish an indemnity bond satisfactory to the Trustee to protect the Issuers, the Trustee,the Paying Agent and the Registrar from any loss that any of them may suffer if a Securityis replaced. The Issuers and the Trustee may charge the Holder for the expenses they incurin replacing a Security. In the event any such mutilated, lost, destroyed or wrongfullytaken Security has become or is about to become due and payable or has been called for 

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redemption in full, the Issuers in their discretion may pay such Security instead ofissuing a new Security in replacement thereof.

    Every replacement Security is an additional obligation of theIssuers.

    The provisions of this Section 2.08 are exclusive and shallpreclude (to the extent lawful) all other rights and remedies with respect to thereplacement or payment of mutilated, lost, destroyed or wrongfully taken Securities.

    SECTION 2.09.  Outstanding Securities. Securitiesoutstanding at any time are all Securities authenticated by the Trustee except for thosecanceled by it, those delivered to it for cancellation and those described in this Sectionas not outstanding. Subject to Section 12.06, a Security does not cease to beoutstanding because an Issuer or an Affiliate of an Issuer holds the Security.

    If a Security is replaced pursuant to Section 2.08, theSecurity so replaced ceases to be outstanding unless and until the Trustee and the Issuersreceive proof satisfactory to them that the replaced Security is held by a protectedpurchaser.

    If the Paying Agent segregates and holds in trust, in accordancewith this Indenture, at Maturity, money sufficient to pay all amounts payable on that datewith respect to the Securities (or portions thereof) to be redeemed or maturing, as thecase may be, then on and after that date, such Securities (or portions thereof) shallcease to be outstanding and Original Issue Discount (or interest, if the Securities havebeen converted into semi-annual cash pay notes pursuant to Section 10.01) on them shallcease to accrue.

    SECTION 2.10.  Temporary Securities; Exchange of GlobalSecurity for Definitive Securities. 

    (a) In the event that Definitive Securities are to be issued underthe terms of this Indenture, until such Definitive Securities are ready for delivery, theIssuers may prepare and the Trustee shall authenticate temporary Securities. TemporarySecurities shall be substantially in the form of Definitive Securities but may havevariations that the Issuers consider appropriate for temporary Securities. Withoutunreasonable delay, the Issuers shall prepare and the Trustee shall authenticateDefinitive Securities and deliver them in exchange for temporary Securities upon surrenderof such temporary Securities at the office or agency of the Issuers, without charge to theHolder.

    (b) Except for transfers made in accordance with Section 2.13(a), aGlobal Security deposited with the Depositary or with the Trustee as custodian for theDepositary pursuant to Section 2.11 shall be transferred to the beneficial owners thereofin the form of Definitive Securities only if such transfer complies with Section 2.13 and(i) the Depositary notifies the Issuers that it is unwilling or unable to continue asDepositary for such Global Security or if at any time such Depositary ceases to be a"clearing agency" registered under the Exchange Act and a successor Depositaryis not appointed by the Issuers within 90 days of such notice, or (ii) an Event of Defaulthas occurred and is continuing.

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    (c) Any Global Security or interest therein that is transferable tothe beneficial owners thereof in the form of Definitive Securities shall, if held by theDepository, be surrendered by the Depositary to the Trustee, without charge, and theTrustee shall authenticate and deliver, upon such transfer of each portion of such GlobalSecurity, an equal aggregate Principal Amount at Maturity of Securities of authorizeddenominations in the form of Definitive Securities. Any portion of a Global Securitytransferred pursuant to this Section shall be executed, authenticated and delivered onlyin denominations of $1,000 Principal Amount (or Restated Principal Amount if Securitiesare converted into semi-annual cash pay notes pursuant to Section 10.01) and any integralmultiple thereof and registered in such names as the Depositary shall direct. AnySecurities in the form of Definitive Securities delivered in exchange for an interest inthe Global Security shall, except as otherwise provided by Section 2.13(b), bear theRestricted Securities Legend set forth in Exhibit A hereto.

    (d) Prior to any transfer pursuant to Section 2.10(b), theregistered holder of a Global Security may grant proxies and otherwise authorize anyPerson, including Agent Members and Persons that may hold interests through Agent Members,to take any action which a holder is entitled to take under this Indenture or theSecurities.

    The Issuers will make available to the Trustee a reasonable supplyof Definitive Securities.

    SECTION 2.11.  Book-entry Provisions for GlobalSecurities. This Section 2.11 shall apply only to a Global Security deposited with oron behalf of the Depositary. 

    The Issuers shall execute and the Trustee shall, in accordance withthis Section 2.11 and the written order of the Issuers, authenticate and deliver initiallyone or more Global Securities that (i) shall be registered in the name of Cede & Co.or other nominee of such Depositary and (ii) shall be delivered by the Trustee to suchDepositary or pursuant to such Depositary's instructions or held by the Trustee ascustodian for the Depositary pursuant to a FAST Balance Certificate Agreement between theDepositary and the Trustee.

    Members of, or participants in, the Depositary ("AgentMembers") shall have no rights under this Indenture with respect to any GlobalSecurity held on their behalf by the Depositary or by the Trustee as the custodian of theDepositary or under such Global Security, and the Depositary may be treated by theIssuers, the Trustee and any agent of the Issuers or the Trustee as the absolute owner ofsuch Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothingherein shall prevent the Issuers, the Trustee or any agent of the Issuers or the Trusteefrom giving effect to any written certification, proxy or other authorization furnished bythe Depositary or impair, as between the Depositary and its Agent Members, the operationof customary practices of such Depositary governing the exercise of the rights of a holderof a beneficial interest in any Global Security.

    The provisions of the "Operating Procedures of the EuroclearSystem" and "Terms and Conditions Governing Use of Euroclear" and the"Management Regulations and Instructions to Participants" of Clearstream shallbe applicable to interests in any Global Securities that are held by participants throughEuroclear or Clearstream. The Trustee shall have 

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no obligation to notify holders of any such procedures or to monitor or enforcecompliance with the same.

    SECTION 2.12.  Cancellation. The Issuers at anytime may deliver Securities to the Trustee for cancellation. The Registrar, the PayingAgent and the Conversion Agent shall forward to the Trustee any Securities surrendered tothem for registration of transfer, exchange, payment or conversion. The Trustee and no oneelse shall cancel all Securities surrendered for registration of transfer, exchange,payment, purchase, repurchase, redemption, conversion (pursuant to Article 11 hereof) orcancellation and dispose of such canceled Securities in its customary manner. The Issuersmay not issue new Securities to replace Securities they have redeemed, paid in full ordelivered to the Trustee for cancellation. The Trustee shall not authenticate Securitiesin place of canceled Securities other than pursuant to the terms of this Indenture.

    SECTION 2.13.  Special Transfer Provisions. 

    (a) Notwithstanding any provision to the contrary herein, so long asa Global Security remains outstanding and is held by or on behalf of the Depositary,transfers of a Global Security, in whole or in part, or of any beneficial interesttherein, shall only be made in accordance with Section 2.11 and 2.10 and this Section2.13(a); provided, however, that beneficial interests in a Global Security may betransferred to Persons who take delivery thereof in the form of a beneficial interest inthe Global Security in accordance with the transfer restrictions set forth under theheading "Notice to Investors" in the Offering Memorandum and, if applicable, inExhibit C.

    Except for transfers or exchanges made in accordance with paragraphs(1) through (4) of this Section 2.13(a) and Section 2.10, transfers of a Global Securityshall be limited to transfers of such Global Security in whole, but not in part, tonominees of the Depositary or to a successor of the Depositary or such successor'snominee.

    (1) GLOBAL SECURITY TO DEFINITIVE SECURITY. If an owner of a  beneficial interest in a Global Security deposited with the Depositary or with the Trustee  as custodian for the Depositary wishes at any time to transfer its interest in such Global  Security to a Person who is required to take delivery thereof in the form of a Definitive  Security, such owner may, subject to the rules and procedures of Euroclear or Clearstream,  if applicable, and the Depositary, cause the exchange of such interest for one or more  Definitive Securities of any authorized denomination or denominations and of the same  aggregate Principal Amount at Maturity. Upon receipt by the Registrar of (A) instructions  from Euroclear or Clearstream, if applicable, and the Depositary directing the Trustee to  authenticate and deliver one or more Definitive Securities of the same aggregate Principal  Amount at Maturity as the beneficial interest in the Global Security to be exchanged, such  instructions to contain the name or names of the designated transferee or transferees, the  authorized denomination or denominations of the Definitive Securities to be so issued and  appropriate delivery instructions, (B) a certificate substantially in the form of Exhibit  B attached hereto given by the owner of such beneficial interest, (C) a certificate  substantially in the form of Exhibit C attached hereto given by the Person acquiring the  Definitive Securities for which such interest is

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being exchanged, to the effect set forth therein, and (D) such other certifications or  other information and, in the case of transfers pursuant to Rule 144 under the Securities  Act, legal opinions as the Issuers may reasonably require to confirm that such transfer is  being made pursuant to an exemption from, or in a transaction not subject to, the  registration requirements of the Securities Act, then Euroclear or Clearstream, if  applicable, or the Registrar, as the case may be, will instruct the Depositary to reduce  or cause to be reduced such Global Security by the aggregate Principal Amount at Maturity  of the beneficial interest therein to be exchanged and to debit or cause to be debited  from the account of the Person making such transfer the beneficial interest in the Global  Security that is being transferred, and concurrently with such reduction and debit the  Company shall execute, and the Trustee shall authenticate and deliver, one or more  Definitive Securities of the same aggregate Principal Amount at Maturity in accordance  with the instructions referred to above.

    (2) DEFINITIVE SECURITY TO DEFINITIVE SECURITY. If a holder of a  Definitive Security wishes at any time to transfer such Definitive Security (or portion  thereof) to a Person who is required to take delivery thereof in the form of a Definitive  Security, such holder may, subject to the restrictions on transfer set forth herein and in  such Definitive Security, cause the transfer of such Definitive Security (or any portion  thereof in a Principal Amount at Maturity equal to an authorized denomination) to such  transferee. Upon receipt by the Registrar of (A) such Definitive Security, duly endorsed  as provided herein, (B) instructions from such holder directing the Trustee to  authenticate and deliver one or more Definitive Securities of the same aggregate Principal  Amount at Maturity as the Definitive Security (or portion thereof) to be transferred, such  instructions to contain the name or names of the designated transferee or transferees, the  authorized denomination or denominations of the Definitive Securities to be so issued and  appropriate delivery instructions, (C) a certificate from the holder of the Definitive  Security to be transferred in substantially the form of Exhibit B attached hereto, (D) a  certificate substantially in the form of Exhibit C attached hereto given by the Person  acquiring the Definitive Securities (or portion thereof), to the effect set forth therein,  and (E) such other certifications or other information and, in the case of transfers  pursuant to Rule 144 under the Securities Act, legal opinions as the Issuers may  reasonably require to confirm that such transfer is being made pursuant to an exemption  from, or in a transaction not subject to, the registration requirements of the Securities  Act, then the Registrar, shall cancel or cause to be canceled such Definitive Security and  concurrently therewith, the Issuers shall execute, and the Trustee shall authenticate and  deliver, one or more Definitive Securities in the appropriate aggregate Principal Amount  at Maturity, in accordance with the instructions referred to above and, if only a portion  of a Definitive Security is transferred as aforesaid, concurrently therewith the Issuers  shall execute and the Trustee shall authenticate and deliver to the transferor a  Definitive Security in a Principal Amount at Maturity equal to the Principal Amount at  Maturity which has not been transferred. A holder of a Definitive Security may at any time  exchange such Definitive Security for one or more Definitive Securities of other  authorized denominations and in the same aggregate Principal Amount at Maturity and  registered in the same name by delivering such Definitive Security, duly endorsed as  provided herein, to the Trustee together with instructions directing the Trustee to  authenticate and deliver one or more Definitive Securities in the same aggregate Principal  Amount at Maturity

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and registered in the same name as the Definitive Security to be exchanged, and the  Registrar thereupon shall cancel or caused to be canceled such Definitive Security and  concurrently therewith the Issuers shall execute and Trustee shall authenticate and  deliver, one or more Definitive Securities in the same aggregate Principal Amount at  Maturity and registered in the same name as the Definitive Security being exchanged.

    (3) DEFINITIVE SECURITY TO GLOBAL SECURITY. If a holder of a  Definitive Security wishes at any time to transfer such Definitive Security (or portion  thereof) to a Person who is not required to take delivery thereof in the form of a  Definitive Security, such holder shall, subject to the restrictions on transfer set forth  herein and in such Definitive Security and the rules of the Depositary and Euroclear and  Clearstream, as applicable, cause the exchange of such Definitive Security for a  beneficial interest in the Global Security. Upon receipt by the Registrar of (A) such  Definitive Security, duly endorsed as provided herein, (B) instructions from such holder  directing the Trustee to increase the aggregate Principal Amount at Maturity of the Global  Security deposited with the Depository or with the Trustee as custodian for the Depository  by the same aggregate Principal Amount at Maturity as the Definitive Security to be  exchanged, such instructions to contain the name or names of an Agent Member that is  designated as the transferee, the account of such Agent Member and other appropriate  delivery instructions, (C) the assignment form on the back of the Definitive Security  completed in full (certifying in effect that such transfer complies with Rule 144A or  Regulation S under the Securities Act or is otherwise being made to a Person who is not  required to take delivery of the Securities in the form of a Definitive Security) and (D)  such other certifications or other information and, in the case of transfers pursuant to  Rule 144 under the Securities Act, legal opinions as the Issuers may reasonably require to  confirm that such transfer is being made pursuant to an exemption from, or in a  transaction not subject to, the registration requirements of the Securities Act, then the  Trustee shall cancel or cause to be canceled such Definitive Security and concurrently  therewith shall increase the aggregate Principal Amount at Maturity of the Global Security  by the same aggregate principal amount as the Definitive Security canceled.

    (4) OTHER EXCHANGES. In the event that a Global Security is  exchanged for Securities in definitive registered form pursuant to Section 2.10 prior to  the effectiveness of a Shelf Registration with respect to such Securities, such Securities  may be exchanged only in accordance with such procedures as are substantially consistent  with the provisions of clauses (2) and (3) above (including the certification requirements  intended to ensure that such transfers comply with Rule 144A or Regulation S under the  Securities Act, as the case may be) and such other procedures as may from time to time be  adopted by the Issuers.

    (b) Except in connection with a Shelf Registration contemplated byand in accordance with the terms of the Registration Rights Agreement, if Securities areissued upon the registration of transfer, exchange or replacement of Securities bearing aRestricted Securities Legend, or if a request is made to remove such a RestrictiveSecurities Legend on Securities, the Securities so issued shall bear the RestrictedSecurities Legend, or a Restricted Securities Legend shall not be removed, as the case maybe, unless there is delivered to the Issuers such satisfactory

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evidence, which, in the case of a transfer made pursuant to Rule 144 under theSecurities Act, may include an opinion of counsel licensed to practice law in the State ofNew York, as may be reasonably required by the Issuers, that neither the legend nor therestrictions on transfer set forth therein are required to ensure that transfers thereofcomply with the provisions of Rule 144A, Rule 144 or Regulation S under the Securities Actor that such Securities are not "restricted" within the meaning of Rule 144under the Securities Act. Upon provision to the Issuers of such satisfactory evidence, theTrustee, at the written direction of the Issuers, shall authenticate and deliverSecurities that do not bear the legend. The Issuers shall not otherwise be entitled torequire the delivery of a legal opinion in connection with any transfer or exchange ofSecurities.

    (c) Neither the Trustee nor any Agent shall have any responsibilityfor any actions taken or not taken by the Depositary.

    (d) The Trustee shall have no obligation or duty to monitor,determine or inquire as to compliance with any restrictions on transfer imposed under thisIndenture or under applicable law with respect to any transfer of any interest in anySecurities (including any transfers between or among Depositary's participants orbeneficial owners of interests in any Global Security) other than to require delivery ofsuch certificates and other documentation as is expressly required by, and to do so if andwhen expressly required by, the terms of this Indenture and to examine the same todetermine substantial compliance as to form with the express requirements hereof.

    SECTION 2.14.  CUSIP and ISIN Numbers. The Issuersin issuing the Securities may use "CUSIP" and "ISIN" numbers (if thengenerally in) and, if so, the Trustee shall use "CUSIP" and "ISIN"numbers in notices of redemption as a convenience to Holders; provided, however, that anysuch notice may state that no representation is made as to the correctness of such numberseither as printed on the Securities or as contained in any notice of a redemption and thatreliance may be placed only on the other identification numbers printed on the Securitiesand any such redemption shall not be affected by any defect in or omission of suchnumbers. The Issuers shall promptly notify the Trustee of any change in the"CUSIP" or "ISIN" numbers.

    SECTION 2.15.  Legend on Restricted Securities.During the period beginning on February 1, 2001 and ending on the date two years from suchdate, any Security including any Security issued in exchange therefor or in lieu thereof,shall be deemed a "Restricted Security" and shall be subject to the restrictionson transfer provided in the legends set forth on the face of the form of Security inExhibit A; provided, however, that the term "Restricted Security" shall notinclude any Securities as to which restrictions have been terminated in accordance withthe terms of this Indenture. All Securities shall bear the applicable legends set forth onthe face of the form of Security in Exhibit A. Except as provided in Section 2.13, theTrustee shall not issue any unlegended Security until it has received an Officers'Certificate from the Issuers directing it to do so.

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ARTICLE 3REDEMPTION

    SECTION 3.01.  Notices to Trustee. Prior toFebruary 1, 2004, Securities will not be redeemable. Beginning on February 1, 2004, theIssuers, at their option, may elect to redeem Securities in accordance with the provisionsthereof and of the Indenture. If the Issuers elect to redeem Securities, they shall notifythe Trustee in writing of the Redemption Date, the Principal Amount at Maturity ofSecurities to be redeemed and the Redemption Price.

    The Issuers shall give each notice to the Trustee provided for inthis Section at least 45 days before the Redemption Date unless the Trustee consents to ashorter period. Such notice shall be accompanied by an Officers' Certificate and anOpinion of Counsel from the Issuers to the effect that such redemption will comply withthe conditions herein. If fewer than all the Securities are to be redeemed, the recorddate relating to such redemption shall be selected by the Issuers and given to theTrustee, which record date shall be not fewer than 15 days after the date of notice to theTrustee. Any such notice may be canceled at any time prior to notice of such redemptionbeing mailed to any Holder and shall thereby be void and of no effect.

    SECTION 3.02.  Selection of Securities To Be Redeemed.If fewer than all the Securities are to be redeemed, the Trustee shall select theSecurities to be redeemed pro rata or by lot or by a method that complies with applicablelegal and securities exchange requirements, if any, and that the Trustee in its solediscretion shall deem to be fair and appropriate and in accordance with methods generallyused at the time of selection by fiduciaries in similar circumstances. The Trustee shallmake the selection at least 30 days but no more than 60 days before the Redemption Datefrom outstanding Securities not previously called for redemption. Securities and portionsthereof that the Trustee selects shall be in Principal Amounts at Maturity of $1,000 orintegral multiples of $1,000. Provisions of this Indenture that apply to Securities calledfor redemption also apply to portions of Securities called for redemption. The Trusteeshall promptly notify the Issuers of the Securities (or portions thereof) to be redeemed.

    If any Security selected for partial redemption is converted in partafter such selection, the converted portion of such Security shall be deemed (so far asmay be) to be the portion to be selected for redemption. The Securities (or portionsthereof) so selected shall be deemed duly selected for redemption for all purposes hereof,notwithstanding that any such Security is converted in whole or in part before the mailingof the notice of redemption. Upon any redemption of less than all the Securities, theIssuers and the Trustee may, solely for the purposes of this Section 3.02, treat asoutstanding any Securities surrendered for conversion during the period 15 days nextpreceding the mailing of a notice of redemption and need not treat as outstanding anySecurity authenticated and delivered during such period in exchange for the unconvertedportion of any Security converted in part during such period. 

    SECTION 3.03.  Notice of Redemption. At least 30days but not more than 60 days before a date for redemption of Securities, the Issuersshall mail a notice of redemption by first-class mail to each Holder of Securities to beredeemed at such Holder's registered address.

    The notice shall identify the Securities to be redeemed and shallstate:

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    (1) the Redemption Date;

    (2) the Redemption Price;

    (3) the Conversion Rate applicable on the Redemption Date;

    (4) the name and address of the Paying Agent;

    (5) that Securities called for redemption must be surrendered to thePaying Agent to collect the Redemption Price;

    (6) that Securities called for redemption may be converted at anytime before the close of business on the Business Day immediately preceding the RedemptionDate;

    (7) that Holders who want to convert Securities must satisfy therequirements set forth therein and in this Indenture;

    (8) if fewer than all the outstanding Securities are to be redeemed,the certificate numbers and Principal Amounts at Maturity of the particular Securities tobe redeemed;

    (9) that, unless the Issuers default in making payment of suchRedemption Price or the Paying Agent is prohibited from making such payment pursuant tothe terms of this Indenture, Original Issue Discount on Securities (or portion thereof)called for redemption (or interest, if the Securities have been converted into semi-annualcash pay notes pursuant to Section 10.01) ceases to accrue on and after the RedemptionDate;

    (10) the CUSIP or ISIN number, if any, printed on the Securitiesbeing redeemed; and

    (11) that no representation is made as to the correctness oraccuracy of the CUSIP or ISIN number, if any, listed in such notice or printed on theSecurities.

    At the Issuers' request, the Trustee shall give the notice ofredemption as provided to it in the Issuers' name and at the Issuers' expense.In such event, the Issuers shall provide the Trustee with the information required by thisSection.

    SECTION 3.04.  Effect of Notice of Redemption. Oncenotice of redemption is mailed, Securities called for redemption become due and payable onthe Redemption Date and at the Redemption Price stated in the notice except for Securitieswhich are converted in accordance with the terms of this Indenture. Upon surrender to thePaying Agent, such Securities shall be paid at the Redemption Price stated in the notice;provided, however, that if Securities have been converted into semi-annual cash pay notespursuant to Section 10.01 and the Redemption Date is after a Regular Record Date and on orprior to the Interest Payment Date, the accrued interest shall be payable to the Holder ofthe redeemed semi-annual cash pay notes registered on the relevant Regular Record Date. 

    Failure to give notice or any defect in the notice to any Holdershall not affect the validity of the notice to any other Holder.

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    SECTION 3.05.  Deposit of Redemption Price. Priorto 11:00 a.m. (New York City time) on the Redemption Date, the Issuers shall deposit withthe Paying Agent (or, if any Issuer or a Subsidiary of any of the Issuers is the PayingAgent, shall segregate and hold in trust) U.S. dollars in immediately available fundssufficient to pay the Redemption Price of all Securities to be redeemed on that date,other than Securities or portions of Securities called for redemption that have beendelivered by the Issuers to the Trustee for cancellation or Securities that have beenconverted. The Paying Agent shall as promptly as practicable return to the Issuers anymoney, not required for that purpose because of conversion of Securities pursuant toArticle 11. If such money is then held by the Issuers in trust and is not required forsuch purpose it shall be discharged from such trust. The Issuers at any time may require aPaying Agent to pay all money held by it to the Trustee and to account for any fundsdisbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shallhave no further liability for the money delivered to the Trustee.

    SECTION 3.06.  Securities Redeemed in Part. Uponsurrender of a Security that is redeemed in part, the Issuers shall execute and theTrustee shall authenticate for the Holder (at the Issuers' expense) a new Securityequal in Principal Amount at Maturity to the unredeemed portion of the Securitysurrendered.

    SECTION 3.07.  Conversion Arrangement on Call forRedemption. In connection with any redemption of Securities, the Issuers may arrangefor the purchase and conversion of any Securities called for redemption by an agreementwith one or more investment banks or other purchasers to purchase such Securities bypaying to the Trustee in trust for the Holders, on or prior to 11:00 a.m. (New York Citytime) on the Redemption Date, an amount that, together with any amounts deposited with theTrustee by the Issuers for the redemption of such Securities, is not less than theRedemption Price of such Securities. Notwithstanding anything to the contrary contained inthis Article 3, the obligation of the Issuers to pay the Redemption Price of suchSecurities shall be deemed to be satisfied and discharged to the extent such amount is sopaid by such purchasers. If such an agreement is entered into, any Securities not dulysurrendered for conversion by the Holders thereof may, at the option of the Issuers, bedeemed, to the fullest extent permitted by law, acquired by such purchasers from suchHolders and (notwithstanding anything to the contrary contained in Article 11) surrenderedby such purchasers for conversion, all as of immediately prior to the close of business onthe Business Day prior to the Redemption Date, subject to payment of the above amount asaforesaid. The Trustee shall hold and pay to the Holders whose Securities are selected forredemption any such amount paid to it for purchase and conversion in the same manner as itwould moneys deposited with it by the Issuers for the redemption of Securities. Withoutthe Trustee's prior written consent, no arrangement between the Issuers and suchpurchasers for the purchase and conversion of any Securities shall increase or otherwiseaffect any of the powers, duties, responsibilities or obligations of the Trustee as setforth in this Indenture, and the Issuers agree to indemnify the Trustee from, and hold itharmless against, any loss, liability or expense arising out of or in connection with anysuch arrangement for the purchase and conversion of any Securities between the Issuers andsuch purchasers, including the costs and expenses incurred by the Trustee in the defenseof any claim or liability arising out of or in connection with the exercise or performanceof any of its powers, duties, responsibilities or obligations under this Indenture;provided that the Issuers shall not be obligated to indemnify the Trustee for any loss,liability or expenses arising out of the Trustee's gross negligence or willfulmisconduct.

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    SECTION 3.08.  Purchase of Securities at Option of theHolder.

    (a) General. Securities shall be purchased by the Issuerspursuant to the terms thereof as of February 1, 2004, February 1, 2009 and February 1,2014 (each, a "Purchase Date"), at the purchase price of $554.41 per $1,000 ofPrincipal Amount at Maturity as of February 1, 2004, $659.44 per $1,000 of PrincipalAmount at Maturity as of February 1, 2009 and $784.36 per $1,000 of Principal Amount atMaturity as of February 1, 2014 (each, a "Purchase Price", as applicable), atthe option of the Holder thereof, upon:

    (1) delivery to the Paying Agent by the Holder of a written notice  of purchase (a "Purchase Notice"), substantially in the form of Exhibit D  hereto, at any time from the opening of business on the date that is 30 Business Days  prior to a Purchase Date until the close of business on such Purchase Date stating:

    (A) the certificate numbers of the Securities which the Holder will    deliver to be purchased,

    (B) the portion of the Principal Amount at Maturity of the Security    which the Holder will deliver to be purchased, which portion must be in a Principal Amount    at Maturity of $1,000 or integral multiples thereof,

    (C) that such Security shall be purchased as of the Purchase Date    pursuant to the terms and conditions specified in the Securities and in this Indenture,    and

    (D) in the event the Issuers elect, pursuant to    Section 3.08(b), to pay the Purchase Price to be paid as of such Purchase Date, in    whole or in part, in shares of Common Stock but such portion of the Purchase Price shall    ultimately be payable to such Holder entirely in cash because any of the conditions to    payment of the Purchase Price in Common Stock is not satisfied prior to the close of    business on such Purchase Date, as set forth in Section 3.08(d), whether such Holder    elects (i) to withdraw such Purchase Notice as to some or all of the Securities to    which such Purchase Notice relates (stating the Principal Amount at Maturity and    certificate numbers of the Securities as to which such withdrawal shall relate), or    (ii) to receive cash in respect of the entire Purchase Price for all Securities (or    portions thereof) to which such Purchase Notice relates; and

(2) delivery of such Security to the Paying Agent for cancellation prior to, on or  after the Purchase Date (together with all necessary endorsements) at the offices of the  Paying Agent, such delivery being a condition to receipt by the Holder of the Purchase  Price therefor; provided, however, that such Purchase Price shall be so paid pursuant to  this Section 3.08 only if the Security so delivered to the Paying Agent shall conform  in all respects to the description thereof in the related Purchase Notice;

provided, however, that if Securities have been converted to semi-annual cash pay notespursuant to Section 10.01, the Purchase Price shall be equal to the Restated PrincipalAmount plus accrued and unpaid interest from the date of such conversion to the PurchaseDate.

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    If a Holder, in such Holder's Purchase Notice, fails toindicate such Holder's choice with respect to the election set forth in clause (D) ofSection 3.08(a)(1), such Holder shall be deemed to have elected to receive cash inrespect of the Purchase Price for all Securities subject to such Purchase Notice in thecircumstances set forth in such clause (D).

    The Issuers shall purchase from the Holder thereof, pursuant to thisSection 3.08, a portion of a Security if the Principal Amount at Maturity of suchportion is $1,000 or an integral multiple of $1,000 if so requested by the Holder.Provisions of this Indenture that apply to the purchase of all of a Security also apply tothe purchase of such portion of such Security.

    Any purchase by the Issuers contemplated pursuant to the provisionsof this Section 3.08 shall be consummated by the delivery of the consideration to bereceived by the Holder promptly following the later of the Purchase Date and the time ofdelivery of the Security.

    Notwithstanding anything herein to the contrary, any Holderdelivering to the Paying Agent a Purchase Notice contemplated by this Section 3.08(a)shall have the right to withdraw such Purchase Notice at any time prior to the close ofbusiness on the Purchase Date by delivery of a written notice of withdrawal to the PayingAgent in accordance with Section 3.10.

    The Paying Agent shall promptly notify the Issuers of the receipt byit of any Purchase Notice or written notice of withdrawal thereof.

    (b) Issuers' Right to Elect Manner of Payment of PurchasePrice. The Securities to be purchased pursuant to Section 3.08(a) may be paidfor, at the election of the Issuers, in cash or in shares of Common Stock valued at 95% ofthe Market Price, or in any combination of cash and Common Stock, subject to theconditions set forth in Sections 3.08(c) and (d). The Issuers shall designate, in theIssuers' Notice delivered pursuant to Section 3.08(e), whether the Issuers willpurchase the Securities for cash or Common Stock, or, if a combination thereof, thepercentages of the Purchase Price of Securities in respect of which it will pay in cash orCommon Stock; provided that the Issuers will pay cash for fractional interests in CommonStock. For purposes of determining the existence of potential fractional interests, allSecurities subject to purchase by the Issuers held by a Holder shall be consideredtogether (no matter how many separate certificates are to be presented). Each Holder whoseSecurities are purchased pursuant to this Section 3.08 shall receive the samepercentage of cash or Common Stock in payment of the Purchase Price for such Securities,except (i) as provided in Section 3.08(d) with regard to the payment of cash in lieuof fractional shares of Common Stock and (ii) in the event that the Issuers areunable to purchase the Securities of a Holder or Holders for Common Stock because anynecessary qualifications or registrations of the Common Stock under applicable statesecurities laws cannot be obtained, the Issuers may purchase the Securities of such Holderor Holders for cash. The Issuers may not change their election with respect to theconsideration (or components or percentages of components thereof) to be paid once theIssuers have given the Issuers' Notice to Holders except pursuant to thisSection 3.08(b) or pursuant to Section 3.08(d) in the event of a failure tosatisfy, prior to the close of business on the Purchase Date, any condition to the paymentof the Purchase Price, in whole or in part, in Common Stock.

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    If the Issuers elect to pay all or part of the Purchase Price inCommon Stock, the portion of accrued Original Issue Discount (or interest, if theSecurities have been converted into semi-annual cash pay notes pursuant to Section 10.01)attributable to the period from the Issue Date (or, if the Issuers have exercised theoption to convert the Securities into semi-annual cash pay notes pursuant to Section10.01, the later of (x) the date of such exercise, and (y) the date on whichinterest was last paid) through the Purchase Date with respect to the surrendered Securityshall not be cancelled, extinguished or forfeited, but rather shall be deemed to be paidin full to the Holder thereof through the delivery of the Common Stock (together with acash payment, if any, in lieu of fractional shares) and cash, if any, in exchange for theSecurity being purchased pursuant to the terms hereof; and such cash and the fair marketvalue of such shares of Common Stock (together with any such cash payment in lieu offractional shares) shall be treated as delivered pro rata, to the extent thereof, first inexchange for Original Issue Discount (or interest, if the Securities have been convertedinto semi-annual cash pay notes pursuant to Section 10.01) accrued to the Purchase Date,and the balance, if any, of such cash and the fair market value of such Common Stock (andany such cash payment) shall be treated as delivered in exchange for the Issue Price ofthe Security being purchased pursuant to the provisions hereof.

    At least three Business Days before the Issuers' Notice Date,the Company shall deliver an Officers' Certificate to the Trustee specifying:

(i)     the manner of payment selected by the Issuers,

(ii)     the information required by Section 3.08(e),

(iii)     if the Issuers elect to pay the Purchase Price, or a  specified percentage thereof, in Common Stock, that the conditions to such manner of  payment set forth in Section 3.08(d) have been or will be complied with, and

(iv)     whether the Issuers desire the Trustee to give the  Issuers' Notice required by Section 3.08(e).

    (c) Purchase with Cash. On each Purchase Date, at the optionof the Issuers, the Purchase Price of Securities in respect of which a Purchase Noticepursuant to Section 3.08(a) has been given, or a specified percentage thereof, may bepaid by the Issuers with cash equal to the aggregate Purchase Price of such Securities. 

    (d) Payment by Issuance of Common Stock. On each PurchaseDate, at the option of the Issuers, the Purchase Price of Securities in respect of which aPurchase Notice pursuant to Section 3.08(a) has been given, or a specified percentagethereof, may be paid by the Company by the issuance of a number of shares of Common Stockequal to the quotient obtained by dividing (i) the amount of cash to which theHolders would have been entitled had the Issuers elected to pay all or such specifiedpercentage, as the case may be, of the Purchase Price of such Securities in cash by(ii) 0.95 times the Market Price of a share of Common Stock, subject to the nextsucceeding paragraph.

    The Company will not issue a fractional share of Common Stock inpayment of the Purchase Price. Instead the Issuers will pay cash for the current marketvalue of the fractional share. The current market value of a fraction of a share shall bedetermined, to the nearest 

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1/1,000th of a share, by multiplying the Market Price by such fraction and rounding theproduct to the nearest whole cent. It is understood that if a Holder elects to have morethan one Security purchased, the number of shares of Common Stock shall be based on theaggregate amount of Securities to be purchased.

    The Issuers' right to exercise their election to purchase theSecurities pursuant to Section 3.08 through the issuance by the Company of shares ofCommon Stock shall be conditioned upon:

(i)     the Issuers' not having given their Issuers'  Notice of an election to pay entirely in cash and their giving of timely Issuers'  Notice of election to purchase all or a specified percentage of the Securities with Common  Stock as provided herein;

(ii)     the registration of the shares of Common Stock to be  issued in respect of the payment of the Purchase Price under the Securities Act or the  Exchange Act, in each case if required;

(iii)     any necessary qualification or registration under  applicable state securities laws or the availability of an exemption from such  qualification and registration; and

(iv)     the receipt by the Trustee of an Officers'  Certificate and an Opinion of Counsel, each stating that (A) the terms of the  issuance of the Common Stock are in conformity with this Indenture and (B) the shares  of Common Stock to be issued by the Company in payment of the Purchase Price in respect of  Securities have been duly authorized and, when issued and delivered pursuant to the terms  of this Indenture in payment of the Purchase Price in respect of the Securities, will be  validly issued, fully paid and non-assessable and, to the best of such counsel's  knowledge, free from preemptive rights, and, in the case of such Officers'  Certificate, stating that conditions (i), (ii) and (iii) above and the condition set forth  in the second succeeding sentence have been satisfied and, in the case of such Opinion of  Counsel, stating that condition (ii) above has been satisfied.

    Such Officers' Certificate shall also set forth the number ofshares of Common Stock to be issued for each $1,000 Principal Amount at Maturity ofSecurities and the Sale Price of a share of Common Stock on each trading day during theperiod during which the Market Price is calculated. The Issuers may pay the Purchase Price(or any portion thereof) in Common Stock only if the information necessary to calculatethe Market Price is published in a daily newspaper of national circulation. If theforegoing conditions are not satisfied with respect to a Holder or Holders prior to theclose of business on the Purchase Date and the Issuers have elected to purchase theSecurities pursuant to this Section 3.08 through the issuance by the Company ofshares of Common Stock, the Issuers shall pay the entire Purchase Price of the Securitiesof such Holder or Holders in cash.

    The "Market Price" means the average of the Sale Prices ofthe Common Stock for the 20 trading day period ending on the third Business Day (if thethird Business Day prior to the applicable Purchase Date is a trading day, or if not, thenon the last trading day prior to such third Business Day) prior to the applicable PurchaseDate, appropriately adjusted to take into 

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account the occurrence, during the period commencing on the first of such trading daysduring such 20 trading day period and ending on such Purchase Date, of any event describedin Section 11.06, 11.07 or 11.08; subject, however, to the conditions set forth inSections 11.09 and 11.12.

    The "Sale Price" of the Common Stock on any date means theclosing sale price per share (or, if no closing sale price is reported, the average of thebid and ask prices or, if more than one in either case, the average of the average bid andaverage ask prices) on such date as reported in the composite transactions for theprincipal United States securities exchange on which the Common Stock is traded or, if theCommon Stock is not listed on a United States national or regional securities exchange, asreported by the National Association of Securities Dealers Automated Quotation System.

    (e) Notice of Election. The Issuers' notice of electionto pay the Purchase Price with cash or Common Stock or any combination thereof shall besent to the Holders (and to beneficial owners as required by applicable law) in the mannerprovided herein (the "Issuers' Notice"). The Issuers' Notice shall besent to Holders (and to beneficial owners as required by applicable law) not less than 30Business Days prior to such Purchase Date (the "Issuers' Notice Date"). TheIssuers' Notice shall state the manner of payment elected and shall contain thefollowing information:

    In the event the Issuers have elected to pay the Purchase Price (ora specified percentage thereof) with Common Stock, the Issuers' Notice shall:

    (1) state that each Holder will receive Common Stock in respect of  the specified percentage of the Purchase Price of the Securities held by such Holder  (except any cash amount to be paid in lieu of fractional shares);

    (2) state that the total number of shares of Common Stock to be  issued to Holders will be equal to the quotient obtained by dividing (i) the amount  of cash to which the Holders would have been entitled had the Issuers elected to pay all  or such specified percentage, as the case may be, of the Purchase Price of such Securities  in cash by (ii) 0.95 times the Market Price of a share of Common Stock;

    (3) set forth the method of calculating the Market Price of the  Common Stock; and

    (4) state that because the Market Price of Common Stock will be  determined prior to the Purchase Date, Holders will bear the market risk with respect to  the value of the Common Stock to be received from the date such Market Price is determined  to the Purchase Date.

    In any case, each Issuers' Notice shall include a form ofPurchase Notice to be completed by a Holder and shall state:

    (1) the Purchase Price and the Conversion Rate applicable on the  Issuers' Notice Date and any adjustment thereto;

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    (2) the name and address of the Paying Agent and the Conversion  Agent;

    (3) that Securities as to which a Purchase Notice has been given may  be converted pursuant to Article 11 hereof only if the applicable Purchase Notice has been  withdrawn in accordance with the terms of this Indenture;

    (4) that Securities must be surrendered to the Paying Agent for  cancellation to collect payment;

    (5) that the Purchase Price for any security as to which a Purchase  Notice has been given and not withdrawn will be paid promptly following the later of the  Purchase Date and the time of surrender of such Security as described in (4);

    (6) the procedures the Holder must follow to exercise rights under  Section 3.08 and a brief description of those rights;

    (7) briefly, the conversion rights of the Securities;

    (8) the procedures for withdrawing a Purchase Notice (including,  without limitation, for a conditional withdrawal pursuant to the terms of  Section 3.08(a)(1)(D) or Section 3.10);

    (9) that, unless the Issuers default in making payment of such  Purchase Price, Original Issue Discount on Securities covered by any Purchase Notice (or  interest, if the Securities have been converted into semi-annual cash pay notes pursuant  to Section 10.01), if any, will cease to accrue on and after the Purchase Date; and

    (10) the CUSIP or ISIN number of the Securities.

    At the Issuers' request, the Trustee shall give suchIssuers' Notice in the name of each Issuer and at the Issuers' expense;provided, however, that, in all cases, the text of such Issuers' Notice shall beprepared by the Issuers.

    (f) Covenants of the Company. All shares of Common Stockdelivered upon purchase of the Securities shall be newly issued shares or treasury shares,shall be duly authorized, validly issued, fully paid and nonassessable, and shall be freefrom preemptive rights and free of any lien or adverse claim.

    The Company shall use reasonable best efforts to list or cause tohave quoted any shares of Common Stock to be issued to purchase Securities on eachnational securities exchange or over-the-counter or other domestic market on which theCommon Stock is then listed or quoted.

    (g) Procedure upon Purchase. The Issuers shall deposit cash(in respect of a cash purchase under Section 3.08(c) or for fractional shares, asapplicable) or shares of Common Stock, or a combination thereof, as applicable, at thetime and in the manner as provided in Section 3.11, sufficient to pay the aggregatePurchase Price of all Securities to be purchased pursuant to this Section 3.08. Assoon as practicable after the Purchase Date, the Company shall 

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deliver to each Holder entitled to receive Common Stock through the Stock TransferAgent, a certificate for the number of full shares of Common Stock issuable in payment ofthe Purchase Price. The Person in whose name the certificate for Common Stock isregistered shall be treated as a holder of record of shares of Common Stock on theBusiness Day following the Purchase Date. Subject to Section 3.08(d), no payment oradjustment will be made for dividends on any Common Stock delivered in payment of thePurchase Price the record date for which occurred on or prior to the Purchase Date.

    (h) Taxes. If a Holder of a Security is paid in Common Stock,the Issuers shall pay any documentary, stamp or similar issue or transfer tax due on suchissue of shares of Common Stock. However, the Holder shall pay any such tax which is duebecause the Holder requests the shares of Common Stock to be issued in a name other thanthe Holder's name. The Paying Agent may refuse to deliver the certificatesrepresenting the Common Stock being issued in a name other than the Holder's nameuntil the Paying Agent receives a sum that the Issuers deem to be sufficient to pay anytax which will be due because the shares of Common Stock are to be issued in a name otherthan the Holder's name. Nothing herein shall preclude any income tax withholdingrequired by law or regulations.

    SECTION 3.09.  Repurchase of Securities at Option ofthe Holder upon Fundamental Change.

    (a) General. If prior to February 1, 2004 there shall haveoccurred a Fundamental Change, Securities shall be purchased by the Issuers, at a purchaseprice specified in the Securities (the "Fundamental Change Repurchase Price"),as of a date that is not less than 60 days nor more than 90 days after the occurrence ofthe Fundamental Change (the "Fundamental Change Repurchase Date"), at the optionof the Holder thereof, upon:

    (1) delivery to the Paying Agent by the Holder of a written notice  of purchase (a "Fundamental Change Repurchase Notice"), substantially in the  form of Exhibit E hereto, at any time from the opening of business on the date that  is 30 days prior to a Fundamental Change Repurchase Date until the close of business on  such Fundamental Change Repurchase Date stating:

    (A) the certificate numbers of the Securities which the Holder will    deliver to be purchased,

    (B) the portion of the Principal Amount at Maturity of the Security    which the Holder will deliver to be purchased, which portion must be in a Principal Amount    at Maturity of $1,000 or integral multiples thereof,

    (C) that such Security shall be purchased as of the Fundamental    Change Repurchase Date pursuant to the terms and conditions specified in the Securities    and in this Indenture, and

    (D) in the event the Issuers elect, pursuant to    Section 3.09(b), to pay the Fundamental Change Repurchase Price to be paid as of such    Fundamental Change Repurchase Date, in whole or in part, in shares of Common Stock but    such portion of the Fundamental Change Repurchase Price shall ultimately be payable

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to such Holder entirely in cash because any of the conditions to payment of the    Fundamental Change Repurchase Price in Common Stock is not satisfied prior to the close of    business on such Fundamental Change Repurchase Date, as set forth in Section 3.09(d),    whether such Holder elects (i) to withdraw such Fundamental Change Repurchase Notice    as to some or all of the Securities to which such Fundamental Change Repurchase Notice    relates (stating the Principal Amount at Maturity and certificate numbers of the    Securities as to which such withdrawal shall relate), or (ii) to receive cash in    respect of the entire Fundamental Change Repurchase Price for all Securities (or portions    thereof) to which such Fundamental Change Repurchase Notice relates; and

    (2) delivery of such Security to the Paying Agent for cancellation  prior to, on or after the Fundamental Change Repurchase Date (together with all necessary  endorsements) at the offices of the Paying Agent, such delivery being a condition to  receipt by the Holder of the Fundamental Change Repurchase Price therefor; provided,  however, that such Fundamental Change Repurchase Price shall be so paid pursuant to this  Section 3.09 only if the Security so delivered to the Paying Agent shall conform in  all respects to the description thereof in the related Fundamental Change Repurchase  Notice.

    If a Holder, in such Holder's Fundamental Change RepurchaseNotice, fails to indicate such Holder's choice with respect to the election set forthin clause (D) of Section 3.09(a)(1), such Holder shall be deemed to have elected toreceive cash in respect of the Fundamental Change Repurchase Price for all Securitiessubject to such Fundamental Change Repurchase Notice in the circumstances set forth insuch clause (D).

    The Issuers shall purchase from the Holder thereof, pursuant to thisSection 3.09, a portion of a Security if the Principal Amount at Maturity of suchportion is $1,000 or an integral multiple of $1,000 if so requested by the Holder.Provisions of this Indenture that apply to the purchase of all of a Security also apply tothe purchase of such portion of such Security.

    Any purchase by the Issuers contemplated pursuant to the provisionsof this Section 3.09 shall be consummated by the delivery of the consideration to bereceived by the Holder promptly following the later of the Fundamental Change RepurchaseDate and the time of delivery of the Security.

    Notwithstanding anything herein to the contrary, any Holderdelivering to the Paying Agent a Fundamental Change Repurchase Notice contemplated by thisSection 3.09(a) shall have the right to withdraw such Fundamental Change RepurchaseNotice at any time prior to the close of business on the Fundamental Change RepurchaseDate by delivery of a written notice of withdrawal to the Paying Agent in accordance withSection 3.10.

    The Paying Agent shall promptly notify the Issuers of the receipt byit of any Fundamental Change Repurchase Notice or written notice of withdrawal thereof.

    A "Fundamental Change" shall be deemed to have occurred atsuch time as any of the following events shall occur:

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    (i) the Company consolidates or merges with or into another Person  (other than a Subsidiary of the Company);

    (ii) the Company sells, conveys, transfers or leases its properties  and assets substantially as an entirety to any Person (other than a Subsidiary of the  Company);

    (iii) any Person (other than a Subsidiary of the Company)  consolidates with or merges with or into the Company; 

    (iv) the Common Stock is reclassified into, exchanged for or  converted into the right to receive any other property or security, provided, that none of  these circumstances will be a Fundamental Change if at least 50% of the aggregate fair  market value (as determined by the Company's Board of Directors) of such property and  securities, other than cash payments for fractional shares, consists of shares of voting  Common Stock of the surviving Person that are, or upon issuance will be, traded on a  United States national securities exchange or approved for trading on an established  over-the-counter trading market in the United States; or

    (v) any Person, including its Affiliates and associates (an  "Acquiring Person"), files Schedule 13D or Schedule TO (or any successor  schedule, form or report) under the Exchange Act disclosing that such Person has become  the beneficial owner of 50% or more of the total voting power in the aggregate of all  classes of the Common Stock then outstanding normally entitled to vote in elections of  directors other than through a merger or binding share exchange in which all or  substantially all (as determined by the Board of Directors of the Company) of the  consideration (except for cash payments for fractional shares) received by the holders  (other than the Acquiring Person) of the Common Stock consists of shares of voting common  stock of the surviving Person that are, or that upon issuance will be, traded on a United  States national securities exchange or approved for trading on an established automated  over-the-counter trading market in the United States.

    (b) Issuers' Right to Elect Manner of Payment of FundamentalChange Repurchase Price. The Securities to be purchased pursuant toSection 3.09(a) may be paid for, at the election of the Issuers, in cash or in sharesof Common Stock valued at 95% of the Market Price, or in any combination of cash andCommon Stock, subject to the conditions set forth in Sections 3.09(c) and (d). TheIssuers shall designate, in the Fundamental Change Notice delivered pursuant toSection 3.09(e), whether the Issuers will purchase the Securities for cash or CommonStock, or, if a combination thereof, the percentages of the Fundamental Change RepurchasePrice of Securities in respect of which it will pay in cash or Common Stock; provided thatthe Issuers will pay cash for fractional interests in Common Stock. For purposes ofdetermining the existence of potential fractional interests, all Securities subject topurchase by the Issuers held by a Holder shall be considered together (no matter how manyseparate certificates are to be presented). Each Holder whose Securities are purchasedpursuant to this Section 3.09 shall receive the same percentage of cash or CommonStock in payment of the Fundamental Change Repurchase Price for such Securities, except(i) as provided in Section 3.09(d) with regard to the payment of cash in lieu offractional shares of Common Stock and (ii) in the event that the Issuers are unableto purchase the Securities of a Holder or Holders

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for Common Stock because any necessary qualifications or registrations of the CommonStock under applicable state securities laws cannot be obtained, the Issuers may purchasethe Securities of such Holder or Holders for cash. The Issuers may not change theirelection with respect to the consideration (or components or percentages of componentsthereof) to be paid once the Issuers have given their Fundamental Change Notice to Holdersexcept pursuant to this Section 3.09(b) or pursuant to Section 3.09(d) in theevent of a failure to satisfy, prior to the close of business on the Fundamental ChangeRepurchase Date, any condition to the payment of the Fundamental Change Repurchase Price,in whole or in part, in Common Stock.

    If the Issuers elect to pay all or part of the Fundamental ChangeRepurchase Price in Common Stock, the portion of accrued Original Issue Discount (orinterest, if the Securities have been converted into semi-annual cash pay notes pursuantto Section 10.01) attributable to the period from the Issue Date (or, if the Issuers haveexercised the option to convert the Securities into semi-annual cash pay notes pursuant toSection 10.01, the later of (x) the date of such exercise, and (y) the date onwhich interest was last paid) to the Fundamental Change Repurchase Date with respect tothe surrendered Security shall not be cancelled, extinguished or forfeited, but rathershall be deemed to be paid in full to the Holder thereof through the delivery of theCommon Stock (together with a cash payment, if any, in lieu of fractional shares) andcash, if any, in exchange for the Security being purchased pursuant to the terms hereof;and such cash, if any, and the fair market value of such shares of Common Stock (togetherwith any such cash payment in lieu of fractional shares) shall be treated as delivered prorata, to the extent thereof, first in exchange for Original Issue Discount (or interest,if the Securities have been converted into semi-annual cash pay notes pursuant to Section10.01) accrued to the Fundamental Change Repurchase Date, and the balance, if any, of suchcash and the fair market value of such Common Stock (and any such cash payment) shall betreated as delivered in exchange for the Issue Price of the Security being purchasedpursuant to the provisions hereof.

    At least three Business Days before the Fundamental Change NoticeDate (as defined below), the Company shall deliver an Officers' Certificate to theTrustee specifying:

(i)     the manner of payment selected by the Issuers,

(ii)     the information required by Section 3.09(e),

(iii)     if the Issuers elect to pay the Fundamental Change  Repurchase Price, or a specified percentage thereof, in Common Stock, that the conditions  to such manner of payment set forth in Section 3.09(d) have been or will be complied  with, and

(iv)     whether the Issuers desire the Trustee to give the  Fundamental Change Notice required by Section 3.09(e).

    (c) Purchase with Cash. On each Fundamental Change RepurchaseDate, at the option of the Issuers, the Fundamental Change Repurchase Price of Securitiesin respect of which a Fundamental Change Repurchase Notice pursuant toSection 3.09(a) has been given, or a specified percentage thereof, may be paid by theIssuers with cash equal to the aggregate Fundamental Change Repurchase Price of suchSecurities.

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    (d) Payment by Issuance of Common Stock. On each FundamentalChange Repurchase Date, at the option of the Issuers, the Fundamental Change RepurchasePrice of Securities in respect of which a Fundamental Change Repurchase Notice pursuant toSection 3.09(a) has been given, or a specified percentage thereof, may be paid by theCompany by the issuance of a number of shares of Common Stock equal to the quotientobtained by dividing (i) the amount of cash to which the Holders would have beenentitled had the Issuers elected to pay all or such specified percentage, as the case maybe, of the Fundamental Change Repurchase Price of such Securities in cash by(ii) 0.95 times the Market Price of a share of Common Stock, subject to the nextsucceeding paragraph.

    The Company will not issue a fractional share of Common Stock inpayment of the Fundamental Change Repurchase Price. Instead the Issuers will pay cash forthe current market value of the fractional share. The current market value of a fractionof a share shall be determined, to the nearest 1/1,000th of a share, by multiplying theMarket Price by such fraction and rounding the product to the nearest whole cent. It isunderstood that if a Holder elects to have more than one Security purchased, the number ofshares of Common Stock shall be based on the aggregate amount of Securities to bepurchased.

    The Issuers' right to exercise its election to purchase theSecurities pursuant to Section 3.09 through the issuance by the Company of shares ofCommon Stock shall be conditioned upon:

(i)     the Issuers' not having given a Fundamental Change  Notice of an election to pay entirely in cash and its giving of timely Fundamental Change  Notice of election to purchase all or a specified percentage of the Securities with Common  Stock as provided herein;

(ii)     the registration of the shares of Common Stock to be  issued in respect of the payment of the Fundamental Change Repurchase Price under the  Securities Act or the Exchange Act, in each case if required;

(iii)     any necessary qualification or registration under  applicable state securities laws or the availability of an exemption from such  qualification and registration; and

(iv)     the receipt by the Trustee of an Officers'  Certificate and an Opinion of Counsel, each stating that (A) the terms of the  issuance of the Common Stock are in conformity with this Indenture and (B) the shares  of Common Stock to be issued by the Company in payment of the Fundamental Change  Repurchase Price in respect of Securities have been duly authorized and, when issued and  delivered pursuant to the terms of this Indenture in payment of the Fundamental Change  Repurchase Price in respect of the Securities, will be validly issued, fully paid and  non-assessable and, to the best of such counsel's knowledge, free from preemptive  rights, and, in the case of such Officers' Certificate, stating that conditions (i),  (ii) and (iii) above and the condition set forth in the second succeeding sentence have  been satisfied and, in the case of such Opinion of Counsel, stating that condition (ii)  above has been satisfied.

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    Such Officers' Certificate shall also set forth the number ofshares of Common Stock to be issued for each $1,000 Principal Amount at Maturity ofSecurities and the Sale Price of a share of Common Stock on each trading day during theperiod during which the Market Price is calculated. The Issuers may pay the FundamentalChange Repurchase Price (or any portion thereof) in Common Stock only if the informationnecessary to calculate the Market Price is published in a daily newspaper of nationalcirculation. If the foregoing conditions are not satisfied with respect to a Holder orHolders prior to the close of business on the Fundamental Change Repurchase Date and theIssuers have elected to purchase the Securities pursuant to this Section 3.09 throughthe issuance by the Company of shares of Common Stock, the Issuers shall pay the entireFundamental Change Repurchase Price of the Securities of such Holder or Holders in cash.

    (e) Notice of Fundamental Change and Issuers' Election.Within 30 days after the occurrence of a Fundamental Change, the Issuers shall mail anotice of such Fundamental Change (the "Fundamental Change Notice") byfirst-class mail to the Trustee and to each Holder (and to beneficial owners as requiredby applicable law). The Fundamental Change Notice shall disclose the Issuers'election to repurchase with cash or Common Stock or any combination thereof in the mannerprovided herein. The Fundamental Change Notice shall be sent to Holders (and to beneficialowners as required by applicable law) not less than 30 Business Days prior to suchFundamental Change Repurchase Date (the "Fundamental Change Notice Date"). Thenotice shall include a form of Fundamental Change Repurchase Notice to be completed by theHolder and shall state:

    (1) briefly, the events causing a Fundamental Change and the date of  such Fundamental Change;

    (2) the date by which the Fundamental Change Repurchase Notice  pursuant to this Section 3.09 must be given;

    (3) the Fundamental Change Repurchase Date;

    (4) the Fundamental Change Repurchase Price;

    (5) the name and address of the Paying Agent and the Conversion  Agent;

    (6) the Conversion Rate applicable on the Fundamental Change Notice  Date and any adjustments thereto;

    (7) that Securities as to which a Fundamental Change Repurchase  Notice has been given may be converted pursuant to Article 11 hereof only if the  applicable Fundamental Change Repurchase Notice has been withdrawn in accordance with the  terms of this Indenture;

    (8) that Securities must be surrendered to the Paying Agent for  cancellation to collect payment;

    (9) that the Fundamental Change Repurchase Price for any Security as  to which a Fundamental Change Repurchase Notice has been duly given and not withdrawn will  be

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paid promptly following the later of the Fundamental Change Repurchase Date and thetime of surrender of such Security as described in (8);

    (10) the procedures the Holder must follow to exercise rights under  this Section 3.09 and a brief description of those rights;

    (11) briefly, the conversion rights of the Securities;

    (12) the procedures for withdrawing a Fundamental Change Repurchase  Notice (including, without limitation, for a conditional withdrawal pursuant to the terms  of Section 3.09(a)(1)(D) or Section 3.10);

    (13) that, unless the Issuers default in making payment of such  Fundamental Change Repurchase Price, Original Issue Discount on Securities covered by any  Fundamental Change Repurchase Notice (or interest, if the Securities have been converted  into semi-annual cash pay notes pursuant to Section 10.01), if any, will cease to accrue  on and after the Fundamental Change Repurchase Date; and

    (14) the CUSIP or ISIN number of the Securities.

    In the event the Issuers have elected to pay the Fundamental ChangeRepurchase Price (or a specified percentage thereof) with Common Stock, the FundamentalChange Notice also shall:

    (1) state that each Holder will receive Common Stock in respect of  the specified percentage of the Fundamental Change Repurchase Price of the Securities held  by such Holder (except any cash amount to be paid in lieu of fractional shares);

    (2) state that the total number of shares of Common Stock to be  issued to Holders will be equal to the quotient obtained by dividing (i) the amount  of cash to which the Holders would have been entitled had the Issuers elected to pay all  or such specified percentage, as the case may be, of the Fundamental Change Repurchase  Price of such Securities in cash by (ii) 0.95 times the Market Price of a share of  Common Stock;

    (3) set forth the method of calculating the Market Price of the  Common Stock; and

    (4) state that because the Market Price of Common Stock will be  determined prior to the Fundamental Change Repurchase Date, Holders will bear the market  risk with respect to the value of the Common Stock to be received from the date such  Market Price is determined to the Fundamental Change Repurchase Date.

    At the Issuers' request, the Trustee shall give suchFundamental Change Notice in the name of each Issuer and at the Issuers' expense;provided, however, that, in all cases, the text of such Fundamental Change Notice shall beprepared by the Issuers.

    (f) Covenants of the Company. All shares of Common Stockdelivered upon purchase of the Securities shall be newly issued shares or treasury shares,shall be duly 

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authorized, validly issued, fully paid and nonassessable, and shall be free frompreemptive rights and free of any lien or adverse claim. 

    The Company shall use its best efforts to list or cause to havequoted any shares of Common Stock to be issued to purchase Securities on each nationalsecurities exchange or over-the-counter or other domestic market on which the Common Stockis then listed or quoted.

    (g) Procedure upon Purchase. The Issuers shall deposit cash(in respect of a cash purchase under Section 3.09(c) or for fractional shares, asapplicable) or shares of Common Stock, or a combination thereof, as applicable, at thetime and in the manner as provided in Section 3.11, sufficient to pay the aggregateFundamental Change Repurchase Price of all Securities to be purchased pursuant to thisSection 3.09. As soon as practicable after the Fundamental Change Repurchase Date,the Company shall deliver to each Holder entitled to receive Common Stock through theStock Transfer Agent, a certificate for the number of full shares of Common Stock issuablein payment of the Fundamental Change Repurchase Price. Prior to the Conversion Date, aHolder of a Security shall have no rights as a Shareholder with respect to shares ofCommon Stock into which such Security is convertible. The Person in whose name thecertificate for Common Stock is registered shall be treated as a holder of record ofshares of Common Stock on the Business Day following the Fundamental Change RepurchaseDate. Subject to Section 3.09(d), no payment or adjustment will be made for dividendson any Common Stock delivered in payment of the Fundamental Change Repurchase Price therecord date for which occurred on or prior to the Fundamental Change Repurchase Date.

    (h) Taxes. If a Holder of a Security is paid in Common Stock,the Issuers shall pay any documentary, stamp or similar issue or transfer tax due on suchissue of shares of Common Stock. Nothing herein shall preclude any income tax withholdingrequired by law or regulations.

    SECTION 3.10.  Effect of Purchase Notice or FundamentalChange Repurchase Notice. Upon receipt by a Paying Agent of the Purchase Notice orFundamental Change Repurchase Notice specified in Section 3.08(a) orSection 3.09(a), as applicable, the Holder of the Security in respect of which suchPurchase Notice or Fundamental Change Repurchase Notice, as the case may be, was givenshall (unless such Purchase Notice or Fundamental Change Repurchase Notice is withdrawn asspecified in the following two paragraphs) thereafter be entitled to receive solely thePurchase Price or Fundamental Change Repurchase Price, as the case may be, with respect tosuch Security. Such Purchase Price or Fundamental Change Repurchase Price shall be paid tosuch Holder, subject to receipts of funds and/or Securities by the Paying Agent, promptlyfollowing the later of (x) the Purchase Date or the Fundamental Change RepurchaseDate, as the case may be, with respect to such Security (provided the conditions inSection 3.08(a) or Section 3.09(a), as applicable, have been satisfied) and(y) the time of delivery of such Security to the Paying Agent by the Holder thereofin the manner required by Section 3.08(a) or Section 3.09(a), as applicable.Securities in respect of which a Purchase Notice or Fundamental Change Repurchase Notice,as the case may be, has been given by the Holder thereof may not be converted pursuant toArticle 11 hereof on or after the date of the delivery of such Purchase Notice orFundamental Change Repurchase Notice, as the case may be, unless such Purchase Notice orFundamental Change Repurchase Notice, as the case may be, has first been validly withdrawnas specified in the following two paragraphs.

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    A Purchase Notice or Fundamental Change Repurchase Notice, as thecase may be, may be withdrawn by means of a written notice of withdrawal delivered to theoffice of the Paying Agent in accordance with the Purchase Notice or Fundamental ChangeRepurchase Notice, as the case may be, at any time prior to the close of business on thePurchase Date or the Fundamental Change Repurchase Date, as the case may be, specifying:

    (1) the certificate number of the Security in respect of which such  notice of withdrawal is being submitted,

    (2) the Principal Amount at Maturity of the Security with respect to  which such notice of withdrawal is being submitted, and

    (3) the Principal Amount at Maturity, if any, of such Security which  remains subject to the original Purchase Notice or Fundamental Change Repurchase Notice,  as the case may be, and which has been or will be delivered for purchase or repurchase by  the Issuers.

    A written notice of withdrawal of a Purchase Notice or FundamentalChange Repurchase Notice may be in the form set forth in the preceding paragraph or may bein the form of (i) a conditional withdrawal contained in a Purchase Notice orFundamental Change Repurchase Notice pursuant to the terms of Section 3.08(a)(1)(D)or 3.09(a)(1)(D) or (ii) a conditional withdrawal containing the information setforth in Section 3.08(a)(1)(D) or 3.09(a)(1)(D) and the preceding paragraph andcontained in a written notice of withdrawal delivered to the Paying Agent as set forth inthe preceding paragraph.

    There shall be no purchase of any Securities pursuant toSection 3.08 or 3.09 (other than through the issuance of Common Stock in payment ofthe Purchase Price, including cash in lieu of fractional shares) if there has occurred(prior to, on or after, as the case may be, the giving, by the Holders of such Securities,of the required Purchase Notice or Fundamental Change Repurchase Notice, as the case maybe) and is continuing an Event of Default (other than a default in the payment of thePurchase Price or Fundamental Change Repurchase Price, as the case may be, with respect tosuch Securities). The Paying Agent will promptly return to the respective Holders thereofany Securities (x) with respect to which a Purchase Notice or Fundamental ChangeRepurchase Notice, as the case may be, has been withdrawn in compliance with thisIndenture, or (y) held by it during the continuance of an Event of Default (otherthan a default in the payment of the Purchase Price or Fundamental Change RepurchasePrice, as the case may be, with respect to such Securities) in which case, upon suchreturn, the Purchase Notice or Fundamental Change Repurchase Notice with respect theretoshall be deemed to have been withdrawn.

    SECTION 3.11.  Deposit of Purchase Price or FundamentalChange Repurchase Price. Prior to 11:00 a.m. (New York City time) on the Business Dayfollowing the Purchase Date or the Fundamental Change Repurchase Date, as the case may be,the Issuers shall deposit with the Trustee or with the Paying Agent (or, if any Issuer ora Subsidiary of any of the Issuers is the Paying Agent, shall segregate and hold in trust)an amount of money (in immediately available funds if deposited on such Business Day)sufficient to pay the cash portion of the aggregate Purchase Price or Fundamental ChangeRepurchase Price, as the case may be, of all 

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the Securities (or portions thereof) which are to be purchased as of the Purchase Dateor Fundamental Change Repurchase Date, as the case may be, and shall instruct the StockTransfer Agent to deliver the number of full shares of Common Stock issuable in payment ofthe remaining portion of the aggregate Purchase Price or Fundamental Change RepurchasePrice, as the case may be. The Issuers shall promptly notify the Trustee in writing of theamount of any deposits of cash or deliveries of Common Stock made pursuant to thisSection.

    SECTION 3.12.  Securities Purchased or Repurchased inPart. Any Security which is to be purchased or repurchased only in part shall besurrendered at the office of the Paying Agent (with, if the Issuers or the Trustee sorequire, due endorsement by, or a written instrument of transfer in form satisfactory tothe Issuers and the Trustee duly executed by, the Holder thereof or such Holder'sattorney duly authorized in writing) and the Issuers shall execute and the Trustee shallauthenticate and deliver to the Holder of such Security, without service charge, a newSecurity or Securities, of any authorized denomination as requested by such Holder inaggregate Principal Amount at Maturity equal to, and in exchange for, the portion of thePrincipal Amount at Maturity of the Security so surrendered which is not purchased.

    SECTION 3.13.  Covenant to Comply With Securities LawsUpon Purchase or Repurchase of Securities. In connection with any offer to purchase orrepurchase or purchase or repurchase of Securities under Section 3.08 or 3.09 hereof(provided that such offer or purchase or repurchase constitutes an "issuer tenderoffer" for purposes of Rule 13e-4 (which term, as used herein, includes any successorprovision thereto) under the Exchange Act at the time of such offer or purchase), theIssuers shall (i) comply with Rule 13e-4 and Rule 14e-1 under the Exchange Act,(ii) file the related Schedule TO (or any successor schedule, form or report) underthe Exchange Act, and (iii) otherwise comply with all Federal and state securitieslaws so as to permit the rights and obligations under Sections 3.08 and 3.09 to beexercised in the time and in the manner specified in Sections 3.08 and 3.09.

    SECTION 3.14.  Repayment to the Issuers. TheTrustee and the Paying Agent shall return to the Issuers, upon their written requesttherefor, any cash that remains unclaimed, together with interest or dividends, if any,thereon, held by them for the payment of the Purchase Price or Fundamental ChangeRepurchase Price, as the case may be; provided, however, that to the extent that theaggregate amount of cash deposited by the Issuers pursuant to Section 3.11 exceedsthe cash portion of the aggregate Purchase Price or Fundamental Change Repurchase Price,as the case may be, of the Securities (or portions thereof) which the Issuers areobligated to purchase as of the Purchase Date or Fundamental Change Repurchase Date, asthe case may be, then on the Business Day following the Purchase Date or FundamentalChange Repurchase Date, as the case may be, the Trustee shall return any such excess tothe Issuers, upon their written request therefor.

ARTICLE 4COVENANTS

    SECTION 4.01.  Payment of Securities. The Issuersshall promptly make all payments in respect of the Securities on the dates and in themanner provided in the Securities and in this Indenture. Such payments shall be consideredmade on the date due if on such date

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the Trustee or the Paying Agent holds, in accordance with this Indenture, moneysufficient to make all payments with respect of the Securities then due and the Trustee orthe Paying Agent, as the case may be, is not prohibited from paying such money to theHolders on that date pursuant to the terms of this Indenture.

    SECTION 4.02.  SEC Reports. Notwithstanding thatthe Company may not be subject to the reporting requirements of Section 13 or 15(d)of the Exchange Act, the Company shall file with the SEC, and provide the Trustee andHolders within 15 days after it files them with the SEC, copies of its annual report andthe information, documents and other reports that are specified in Sections 13 and15(d) of the Exchange Act. Delivery of such reports, information and documents to theTrustee is for informational purposes only and the Trustee's receipt of such shallnot constitute constructive notice of any information contained therein or determinablefrom information contained therein, including the Issuers' compliance with any oftheir covenants hereunder (as to which the Trustee is entitled to rely exclusively onOfficers' Certificates). The Issuers also shall comply with the other provisions ofTrust Indenture Act Section 314(a).

    SECTION 4.03.  Corporate Existence. Each Issuershall do or cause to be done all things necessary to preserve and keep in full force andeffect its corporate existence, material rights (charter and statutory) and materialfranchises (other than as contemplated by Section 5.01); provided, however, that suchIssuer shall not be required to preserve any such right or franchise if the Board ofDirectors shall determine that the preservation of such rights or franchises is no longerdesirable in the conduct of the business of the Issuers and the Restricted Subsidiariesconsidered as a whole.

    SECTION 4.04.  Restrictions on Liens. Except asprovided in Section 4.06, the Issuers shall not, and shall not permit any RestrictedSubsidiary to, create or suffer to exist any Lien to secure any Indebtedness of any Issueror Restricted Subsidiary on any Principal Property of any Issuer or Restricted Subsidiary,without making, or causing such Restricted Subsidiary to make, effective provision tosecure all of the Securities offered hereunder and then outstanding by such Lien, equallyand ratably with any and all other such Indebtedness thereby secured, so long as suchother Indebtedness is so secured, except that the foregoing restrictions shall not applyto:

    (a) Liens on property of a Person existing at the time such Person  is merged into or consolidated with any Issuer or Restricted Subsidiary or at the time of  sale, lease or other disposition of the properties of such Person (or a division thereof)  as an entirety or substantially as an entirety to any Issuer or Restricted Subsidiary;

    (b) Liens on property of a Person existing at the time such Person  becomes a Restricted Subsidiary or existing on property prior to the acquisition thereof  by any Issuer or Restricted Subsidiary;

    (c) Liens securing Indebtedness between a Restricted Subsidiary and  an Issuer or between Restricted Subsidiaries or Issuers;

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    (d) Liens on any property created, assumed or otherwise brought into  existence in contemplation of the sale or other disposition of the underlying property,  whether directly or indirectly, by way of share disposition or otherwise, provided that  the applicable Issuer or Restricted Subsidiary must dispose of such property within 180  days after the creation of such Liens and that any Indebtedness secured by such Liens  shall be without recourse to any Issuer or Restricted Subsidiary;

    (e) Liens in favor of the United States of America or any state  thereof, or any department, agency or instrumentality or political subdivision of the  United States of America or any state thereof, or in favor of any country, or any  political subdivision thereof, to secure partial, progress, advance or other payments, or  performance of any other similar obligations, including, without limitation, Liens to  secure pollution control bonds or industrial revenue or other similar types of bonds;

    (f) Liens imposed by law, such as carriers',  warehousemen's and mechanics' Liens and other similar Liens arising in the  ordinary course of business which secure obligations not more than 60 days past due or  which are being contested in good faith and by appropriate proceedings;

    (g) Liens incurred in the ordinary course of business to secure  performance of obligations with respect to statutory or regulatory requirements,  performance or return-of-money bonds, surety bonds or other obligations of a like nature,  in each case which are not incurred in connection with the borrowing of money, the  obtaining of advances or credit or the payment of the deferred purchase price of property  and which do not in the aggregate impair in any material respect the use of property in  the operation of the business of the Issuers and their respective Subsidiaries taken as a  whole;

    (h) Liens incurred to secure appeal bonds and judgment and  attachment Liens, in each case in connection with litigation or legal proceedings which  are being contested in good faith by appropriate proceedings so long as reserves have been  established to the extent required by GAAP;

    (i) pledges or deposits under workmen's compensation laws,  unemployment insurance laws or similar legislation, or good faith deposits in connection  with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to  which any Issuer or Restricted Subsidiary is a party, or deposits to secure public or  statutory obligations of an Issuer or Restricted Subsidiary or deposits for the payment of  rent, in each case incurred in the ordinary course of business;

    (j) utility easements, building restrictions and such other  encumbrances or charges against real property as are of a nature generally existing with  respect to properties of a similar character;

    (k) Liens granted to any bank or other institution on the payments  to be made to such institution by an Issuer or Subsidiary thereof, pursuant to any  interest rate swap or similar agreement or foreign currency hedge, exchange or similar  agreement designed to provide protection against fluctuations in interest rates and  currency exchange rates, 

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respectively, provided that such agreements are entered into in, or are incidental to,  the ordinary course of business;

    (l) 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 any deposit account or any other fund maintained with a  creditor depository institution, provided that (1) such deposit account is not a  dedicated cash collateral account and is not subject to restrictions against access by the  applicable Issuer or Restricted Subsidiary in excess of those set forth by regulations  promulgated by the Federal Reserve Board, and (2) such deposit account is not  intended by such Issuer or Restricted Subsidiary to provide collateral to the depository  institution;

    (m) Liens arising from Uniform Commercial Code financing statements  regarding leases;

    (n) the giving, simultaneously with or within 180 days after the  latest of the Closing Date, or the acquisition, construction, improvement, development or  expansion of such property, of a purchase money Lien on property acquired, constructed,  improved, developed or expanded after the Closing Date, or the acquisition, construction,  improvement, development or expansion after the Closing Date, of property subject to any  Lien which is limited to such property;

    (o) the giving of a Lien on real property which is the sole security  for Indebtedness incurred within two years after the latest of the Closing Date, or the  acquisition, construction, improvement, development or expansion of such property,  provided that the holder of such Indebtedness is entitled to enforce its payment only by  resorting to such security;

    (p) Liens arising by the terms of letters of credit entered into in  the ordinary course of business to secure reimbursement obligations thereunder;

    (q) Liens existing on the Closing Date;

    (r) Liens for taxes, assessments and other governmental charges or  levies 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; and

    (s) extension, renewal, replacement or refunding of any Lien  existing on the Closing Date or referred to in clauses (a) to (k) and (n) to (o) and (q),  provided that the principal amount of Indebtedness secured thereby and not otherwise  authorized by clauses (a) to (k) and (n) to (o) and (q) shall not exceed the principal  amount of Indebtedness, plus any premium or fee payable in connection with any such  extension, renewal, replacement or refunding, so secured at the time of such extension,  renewal, replacement or refunding.

    SECTION 4.05.  Restrictions on Sale and LeasebackTransactions. Except as provided in Section 4.06, none of the Issuers shall, andnone of the Issuers shall permit any 

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Restricted Subsidiary to, after the date hereof, enter into any arrangement with anyPerson providing for the leasing by any such Issuer or Restricted Subsidiary of anyPrincipal Property now owned or hereafter acquired which has been or is to be sold ortransferred by such Issuer or Restricted Subsidiary to such Person with the intention oftaking back a lease of such Principal Property (a "Sale and LeasebackTransaction"), unless the net proceeds of such sale or transfer have been determinedby the Board of Directors to be at least equal to the fair market value of such PrincipalProperty or asset at the time of such sale and transfer and either (i) such Issuer orRestricted Subsidiary applies or causes to be applied an amount equal to the net proceedsof such sale or transfer, within 180 days of receipt thereof, to the retirement orprepayment (other than any mandatory retirement or prepayment, except mandatoryretirements or prepayments required as a result of such Sale and Leaseback Transaction) ofFunded Debt of any Issuer or any Restricted Subsidiary ranking senior to or pari passuwith the Securities or to the purchase, construction or development of property or assetsto be used in the ordinary course of business, or (ii) such Issuer or RestrictedSubsidiary would, on the effective date of such sale or transfer, be entitled, pursuant tothis Indenture, to issue, assume or guarantee Indebtedness secured by a Lien upon suchPrincipal Property, at least equal in amount to the Attributable Debt in respect of suchSale and Leaseback Transaction without equally and ratably securing the Securities. Theforegoing restriction shall not apply to any Sale and Leaseback Transaction(i) between any Issuer and Restricted Subsidiary or between Restricted Subsidiariesor Issuers, provided that the lessor shall be an Issuer or a Wholly Owned RestrictedSubsidiary, (ii) which has a lease of less than three years in length,(iii) entered into within 180 days after the later of the purchase, construction ofdevelopment of such Principal Property or assets, or the commencement of operation of suchPrincipal Property or (iv) involving the distribution warehouse of Jones ApparelGroup, Inc. at South Hill, Virginia.

    SECTION 4.06.  Exempted Debt. NotwithstandingSections 4.04 and 4.05, any Issuer or Restricted Subsidiary may, in addition toamounts permitted under such restrictions, create Indebtedness secured by Liens, or enterinto Sale and Leaseback Transactions, provided that, at the time of such transactions andafter giving effect thereto, the aggregate outstanding amount of all such Indebtednesssecured by Liens plus Attributable Debt resulting from such Sale and LeasebackTransactions does not exceed 20% of Consolidated Shareholders' Equity.

    SECTION 4.07.  Waiver of Certain Covenants. Each ofthe Issuers may in any particular instance, be excused from failing to comply with anyterm, provision or condition set forth in Section 4.02 or Sections 4.04 to 4.06,with respect to the Securities if before the time for such compliance the Holders of atleast a majority in Principal Amount at Maturity of the outstanding Securities shall, byact of such Holders, either waive such compliance in such instance or generally waivecompliance with such term, provision or condition but no such waiver shall extend to oraffect such term, provision or condition except to the extent so expressly waived, and,until such waiver shall become effective, the obligations of the Issuers, and the dutiesof the Trustee in respect of any such term, provision or condition shall remain in fullforce and effect.

    The Issuers may, but shall not be obligated to, fix a record datefor the purpose of determining the Persons entitled to waive compliance with any covenantor condition hereunder. If a record date is fixed, the Holders on such record date, ortheir duly designated proxies, and only such Persons, shall be entitled to waive any suchcompliance, whether or not such Holders

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remain Holders after such record date; provided that unless the Holders of at least amajority in Principal Amount at Maturity of the outstanding Securities affected shall havewaived such compliance prior to the date which is 90 days after such record date, any suchwaiver previously given shall automatically and without further action by any Holder becanceled and of no further effect.

    SECTION 4.08.  Compliance Certificate. The Issuersshall deliver to the Trustee within 120 days after the end of each fiscal year of theIssuers an Officers' Certificate stating that in the course of the performance by thesigners of their duties as Officers of the Issuers they would normally have knowledge ofany Default and whether or not the signers know of any Default that occurred during suchperiod. If they do, the certificate shall describe the Default, its status and what actionthe Issuers are taking or propose to take with respect thereto. The Issuers also shallcomply with Trust Indenture Act Section 314(a)(4).

    SECTION 4.09.  Further Instruments and Acts. Eachof the Issuers shall execute and deliver to the Trustee such further instruments and dosuch further acts as may be reasonably necessary or proper to carry out more effectivelythe purpose of this Indenture.

    SECTION 4.10.  Calculation of Original Issue Discount.The Issuers shall file with the Trustee promptly at the end of each calendar year (i) awritten notice specifying the amount of Original Issue Discount (including daily rates andaccrual periods) accrued on the outstanding Securities as of the end of such year and (ii)other specific information relating to such Original Issue Discount that is necessary forthe trustee to comply with the requirements of the Internal Revenue Code of 1986, asamended from time to time and the regulations promulgated thereunder.

    SECTION 4.11.  Book-Entry System. If the Securitiescease to trade in the Depositary's book-entry settlement system, the Companycovenants and agrees that it shall use reasonable efforts to make such other book-entryarrangements that it determines are reasonable for the Securities.

ARTICLE 5SUCCESSOR COMPANIES

    SECTION 5.01.  Merger and Consolidation. None ofthe Issuers shall consolidate with or merge with or into, or convey, transfer or lease allor substantially all its assets to, any Person (other than a merger of a Wholly OwnedRestricted Subsidiary into an Issuer or another Wholly Owned Restricted Subsidiary or amerger of one Issuer into another), unless:

(i)     the resulting, surviving or transferee Person (the  "Successor Company") shall be a corporation organized and existing under the  laws of the United States of America, any State thereof or the District of Columbia, and  the Successor Company (if not such Issuer) shall expressly assume, by a supplemental  indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all  the obligations of such Issuer under the Securities and this Indenture;

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(ii)     immediately after giving effect to such transaction (and  treating any Indebtedness which becomes an obligation of the Successor Company, any other  Issuer or any Restricted Subsidiary as a result of such transaction, as having been  incurred by the Successor Company or such Issuer or Restricted Subsidiary at the time of  such transaction), no Event of Default shall have occurred and be continuing;

(iii)     such Issuer shall have delivered to the Trustee an  Officers' Certificate and an Opinion of Counsel, each stating that such  consolidation, merger or transfer and such supplemental indenture (if any) comply with  this Indenture; and

(iv)     if, as a result of any such consolidation, merger or  transfer, the Principal Property of such Issuer would become subject to a Lien which shall  not be permitted by this Indenture, such Issuer or the Successor Company, as the case may  be, shall take such steps as shall be necessary to secure the Securities equally and  ratably with (or prior to) all Indebtedness secured thereby.

    The Successor Company shall succeed to, and be substituted for, andmay exercise every right and power of, the applicable Issuer under this Indenture, but thepredecessor Issuer in the case of a lease of all or substantially all of its assets shallnot be released from the obligation to pay the principal of and interest on theSecurities.

ARTICLE 6DEFAULTS AND REMEDIES

    SECTION 6.01.  Events of Default. An "Event ofDefault" with respect to Securities occurs if:

    (1) the Issuers default in any payment of the Principal Amount at  Maturity (or, if the Securities have been converted to semi-annual cash pay notes pursuant  to Section 10.01, the Restated Principal Amount), Redemption Price, Purchase Price or  Fundamental Change Repurchase Price on any Security when it becomes due and payable;

    (2) the Issuers default in the payment of interest on any Security,  if the Issuers have exercised their option following a Tax Event to convert the Securities  into semi-annual cash pay notes pursuant to Section 10.01, when such interest becomes due  and payable, and such default continues for a period of 30 days;

    (3) the Issuers default in the payment of liquidated damages on any  Security, and such default continues for a period of 30 days;

    (4) any Issuer fails to comply with Section 5.01;

    (5) any Issuer fails to comply with Section 4.02, 4.03, 4.04,  4.05 or 4.06, and such failure continues for 30 days after the notice specified below;

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    (6) any Issuer fails to comply with any of its covenants or  agreements contained in the Securities or this Indenture (other than those referred to in  (1), (2), (3), (4) or (5) above) and such failure continues for 60 days after the notice  specified below;

    (7) any Issuer or Restricted Subsidiary defaults under any  Indebtedness (other than the Securities), whether such Indebtedness now exists or shall  hereafter be created, and such default results in Indebtedness in excess of $25,000,000 or  its foreign currency equivalent becoming due and payable prior to the date on which it  would otherwise have become due and payable, without such Indebtedness having been  discharged or such acceleration having been rescinded or annulled within 30 days after  notice;

    (8) any Issuer or Restricted Subsidiary pursuant to or within the  meaning of any Bankruptcy Law:

    (A) commences a voluntary case;

    (B) consents to the entry of an order for relief against it in an    involuntary case;

    (C) consents to the appointment of a Custodian of it or for any    substantial part of its property; or

    (D) makes a general assignment for the benefit of its creditors or    takes any comparable action under any foreign laws relating to insolvency;

    (9) a court of competent jurisdiction enters an order or decree  under any Bankruptcy Law that:

    (A) is for relief against any Issuer or Restricted Subsidiary in an    involuntary case;

    (B) appoints a Custodian of any Issuer or Restricted Subsidiary or    for any substantial part of its property; or

    (C) orders the winding up or liquidation of any Issuer or Restricted    Subsidiary or any similar relief is granted under any foreign laws and the order or decree    remains unstayed and in effect for 60 days;

    (10) any judgment or decree for the payment of money in excess of  $25,000,000 or its foreign currency equivalent at the time, is entered against any Issuer  or Restricted Subsidiary and either (A) an enforcement proceeding has been commenced  by any creditor upon such judgment or decree or (B) there is a period of 60 days  following the entry of such judgment or decree during which such judgment or decree is not  discharged, waived or the execution thereof stayed; or

    (11) the co-obligation of any Issuer shall cease to be in full force  and effect (except as contemplated by the terms thereof or this Indenture).

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    The foregoing shall constitute Events of Default whatever the reasonfor any such Event of Default and whether it is voluntary or involuntary or is effected byoperation of law or pursuant to any judgment, decree or order of any court or any order,rule or regulation of any administrative or governmental body.

    The term "Bankruptcy Law" means Title 11, United StatesCode, or any similar Federal or state law for the relief of debtors. The term"Custodian" means any receiver, trustee, assignee, liquidator, custodian orsimilar official under any Bankruptcy Law.

    A Default under clause (5), (6) or (7) above is not an Event ofDefault until the Trustee or the Holders of at least 25% in Principal Amount at Maturityof the outstanding Securities notify the applicable Issuer of the Default and such Issuerdoes not cure such Default within the time specified in clause (5), (6) or (7), asapplicable, after receipt of such notice. Such notice must specify the Default, demandthat it be remedied and state that such notice is a "Notice of Default."

    The Issuers shall deliver to the Trustee, within 30 days after theoccurrence thereof, written notice in the form of an Officers' Certificate of anyEvent of Default under clause (7) and any event which with the giving of notice or thelapse of time would become an Event of Default under clause (5), (6) or (10), its statusand what action the Issuers are taking or proposes to take with respect thereto.

    SECTION 6.02.  Acceleration. If an Event of Defaultwith respect to any Securities at the time outstanding (other than an Event of Defaultspecified in Section 6.01(8) or (9) with respect to any Issuer) occurs and iscontinuing, the Trustee or the Holders of at least 25% in Principal Amount at Maturity ofthe outstanding Securities by notice to the Issuers, may declare the Issue Price (or, ifthe Securities have been converted into semi-annual cash pay notes pursuant to Section10.01, the Restated Principal Amount) of and accrued Original Issue Discount (or, if theSecurities have been converted into semi-annual cash pay notes pursuant to Section 10.01,accrued but unpaid interest) on all the Securities to be due and payable. Upon such adeclaration, such Issue Price (or, if the Securities have been converted into semi-annualcash pay notes pursuant to Section 10.01, the Restated Principal Amount) and OriginalIssue Discount (or, if the Securities have been converted into semi-annual cash pay notespursuant to Section 10.01, accrued but unpaid interest) shall be due and payableimmediately. If an Event of Default specified in Section 6.01(8) or (9) with respectto any Issuer occurs, the Issue Price (or, if the Securities have been converted intosemi-annual cash pay notes pursuant to Section 10.01, the Restated Principal Amount) ofand Original Issue Discount (or, if the Securities have been converted into semi-annualcash pay notes pursuant to Section 10.01, accrued but unpaid interest) on all theSecurities shall *ipso facto*become and be immediately due and payable without anydeclaration or other act on the part of the Trustee or any Holder. The Holders of amajority in Principal Amount at Maturity of the Securities by notice to the Trustee mayrescind an acceleration and its consequences if the rescission would not conflict with anyjudgment or decree and if all existing Events of Default have been cured or waived exceptnonpayment of Issue Price (or, if the Securities have been converted into semi-annual cashpay notes pursuant to Section 10.01, the Restated Principal Amount) or Original IssueDiscount (or, if the Securities have been converted into semi-annual cash pay notespursuant to Section 10.01, accrued but

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unpaid interest) that has become due solely because of acceleration. No such rescissionshall affect any subsequent Default or impair any right consequent thereto.

    SECTION 6.03.  Other Remedies. If an Event ofDefault occurs and is continuing, the Trustee may pursue any available remedy to collectthe payment of Issue Price (or, if the Securities have been converted into semi-annualcash pay notes pursuant to Section 10.01, the Restated Principal Amount) of or OriginalIssue Discount (or, if the Securities have been converted into semi-annual cash pay notespursuant to Section 10.01, accrued but unpaid interest) on the Securities or to enforcethe performance of any provision of the Securities or this Indenture.

    The Trustee may institute and maintain a suit or legal proceedingeven if it does not possess any of the Securities or does not produce any of them in theproceeding. A delay or omission by the Trustee or any Holder in exercising any right orremedy accruing upon an Event of Default shall not impair the right or remedy orconstitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive ofany other remedy. All available remedies are cumulative.

    SECTION 6.04.  Waiver of Past Defaults. The Holdersof a majority in Principal Amount at Maturity of the Securities by notice to the Trusteemay waive an existing Default and its consequences except (i) a Default in thepayment of the Issue Price (or, if the Securities have been converted into semi-annualcash pay notes pursuant to Section 10.01, the Restated Principal Amount) of or OriginalIssue Discount (or, if the Securities have been converted into semi-annual cash pay notespursuant to Section 10.01, accrued but unpaid interest) on a Security, (ii) a Defaultarising from the failure to redeem or purchase any Security when required pursuant to theterms of this Indenture or (iii) a Default in respect of a provision that underSection 9.02 cannot be amended without the consent of each Holder affected. When aDefault is waived, it is deemed cured, but no such waiver shall extend to any subsequentor other Default or impair any consequent right.

    SECTION 6.05.  Control by Majority. The Holders ofa majority in Principal Amount at Maturity of the outstanding Securities may direct thetime, method and place of conducting any proceeding for any remedy available to theTrustee or of exercising any trust or power conferred on the Trustee. However, the Trusteemay refuse to follow any direction that conflicts with law or this Indenture or, subjectto Section 7.01, that the Trustee determines is unduly prejudicial to the rights ofany other Holder or that would subject the Trustee to personal liability; provided,however, that the Trustee may take any other action deemed proper by the Trustee that isnot inconsistent with such direction. Prior to taking any action hereunder, the Trusteeshall be entitled to indemnification satisfactory to it in its sole discretion against alllosses and expenses caused by taking or not taking such action.

    SECTION 6.06.  Limitation on Suits. Except toenforce the right to receive payment of Issue Price (or, if the Securities have beenconverted into semi-annual cash pay notes pursuant to Section 10.01, the RestatedPrincipal Amount) or Original Issue Discount (or, if the Securities have been convertedinto semi-annual cash pay notes pursuant to Section 10.01, accrued but unpaid interest)when due, no Holder of a Security may pursue any remedy with respect to this Indenture orthe Securities unless:

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    (1) the Holder previously gave the Trustee written notice stating  that an Event of Default is continuing;

    (2) the Holders of at least 25%, in Principal Amount at Maturity of  the outstanding Securities make a written request to the Trustee to pursue the remedy;

    (3) such Holder or Holders offer to the Trustee security or  indemnity satisfactory to the Trustee against any loss, liability or expense;

    (4) the Trustee does not comply with the request within 60 days  after receipt of the request and the offer of security or indemnity; and

    (5) the Holders of a majority in Principal Amount at Maturity of the  outstanding Securities do not give the Trustee a direction inconsistent with the request  during such 60-day period.

    A Holder may not use this Indenture to prejudice the rights ofanother Holder or to obtain a preference or priority over another Holder.

    SECTION 6.07.  Rights of Holders to Receive Payment.Notwithstanding any other provision of this Indenture, the right of any Holder to receivepayment of Issue Price (or, if the Securities have been converted into semi-annual cashpay notes pursuant to Section 10.01, the Restated Principal Amount) of and liquidateddamages and Original Issue Discount (or, if the Securities have been converted intosemi-annual cash pay notes pursuant to Section 10.01, accrued but unpaid interest) on theSecurities held by such Holder, on or after their Maturity, or to bring suit for theenforcement of any such payment on or after their Maturity, shall not be impaired oraffected without the consent of such Holder.

    SECTION 6.08.  Collection Suit by Trustee. If anEvent of Default specified in Section 6.01(1), (2) or (3) occurs and is continuing,the Trustee may recover judgment in its own name and as trustee of an express trustagainst the Issuers for the whole amount then due and owing (together with interest on anyunpaid interest to the extent lawful) and the amounts provided for in Section 7.07.

    SECTION 6.09.  Trustee May File Proofs of Claim.The Trustee may file such proofs of claim and other papers or documents as may benecessary or advisable in order to have the claims of the Trustee and the Holders allowedin any judicial proceedings relative to any Issuer or any of its Subsidiaries, theircreditors or their property and, unless prohibited by law or applicable regulations, mayvote on behalf of the Holders in any election of a trustee in bankruptcy or other Personperforming similar functions, and any Custodian in any such judicial proceeding is herebyauthorized by each Holder to make payments to the Trustee and, in the event that theTrustee shall consent to the making of such payments directly to the Holders, to pay tothe Trustee any amount due it for the reasonable compensation, expenses, disbursements andadvances of the Trustee, its agents and its counsel, and any other amounts due the Trusteeunder Section 7.07.

    SECTION 6.10.  Priorities. If the Trustee collectsany money or property pursuant to this Article 6, it shall pay out the money or propertyin the following order:

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    FIRST: to the Trustee for amounts due under Section 7.07;

    SECOND: to Holders for amounts due and unpaid on the Securities forthe Principal Amount at Maturity (or, if the Securities have been converted to semi-annualcash pay notes pursuant to Section 10.01, the Restated Principal Amount and interest),ratably, and any liquidated damages without preference or priority of any kind, accordingto the amounts due and payable on the Securities for the Principal Amount at Maturity (or,if the Securities have been converted to semi-annual cash pay notes pursuant to Section10.01, the Restated Principal Amount and interest) and any liquidated damages,respectively; and

    THIRD: to the Issuers.

    The Trustee may fix a record date and payment date for any paymentto Holders pursuant to this Section. At least 15 days before such record date, the Trusteeshall mail to each Holder and each Issuer a notice that states the record date, thepayment date and amount to be paid.

    SECTION 6.11.  Undertaking for Costs. In any suitfor the enforcement of any right or remedy under this Indenture or in any suit against theTrustee for any action taken or omitted by it as Trustee, a court in its discretion mayrequire the filing, by any party litigant in the suit, of an undertaking to pay the costsof the suit, and the court in its discretion may assess reasonable costs, includingreasonable attorneys' fees and expenses, against any party litigant in the suit,having due regard to the merits and good faith of the claims or defenses made by the partylitigant. This Section does not apply to a suit by the Trustee, a suit by a Holderpursuant to Section 6.07 or a suit by Holders of more than 10% in Principal Amount atMaturity of the Securities.

    SECTION 6.12.  Waiver of Stay or Extension Laws.None of the Issuers (to the extent it may lawfully do so) shall at any time insist upon,plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay orextension law, wherever enacted, now or at any time hereafter in force, which may affectthe covenants or the performance of this Indenture; and each Issuer (to the extent that itmay lawfully do so) hereby expressly waives all benefit or advantage of any such law, andshall not hinder, delay or impede the execution of any power herein granted to theTrustee, but shall suffer and permit the execution of every such power as though no suchlaw had been enacted.

ARTICLE 7TRUSTEE

    SECTION 7.01.  Duties of Trustee. (a)  If anEvent of Default has occurred and is continuing, the Trustee shall exercise the rights andpowers vested in it by this Indenture and use the same degree of care and skill in itsexercise thereof as a prudent Person would exercise or use under the circumstances in theconduct of such Person's own affairs.

    (b) Except during the continuance of an Event of Default:

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    (1) the Trustee undertakes to perform such duties and only such  duties as are specifically set forth in this Indenture and no implied covenants or  obligations shall be read into this Indenture against the Trustee; and

    (2) in the absence of bad faith on its part, the Trustee may  conclusively rely, as to the truth of the statements and the correctness of the opinions  expressed therein, upon certificates or opinions furnished to the Trustee and conforming  to the requirements of this Indenture. However, the Trustee shall examine the certificates  and opinions to determine whether or, not they conform to the requirements of this  Indenture (but need not confirm or investigate the accuracy of mathematical calculations  or other facts stated therein).

    (c) The Trustee may not be relieved from liability for its owngrossly negligent action, its own grossly negligent failure to act or its own willfulmisconduct, except that:

    (1) this paragraph does not limit the effect of paragraph (b) of  this Section;

    (2) the Trustee shall not be liable for any error of judgment made  in good faith by a Trust Officer unless it is proved that the Trustee was grossly  negligent in ascertaining the pertinent facts; and

    (3) the Trustee shall not be liable with respect to any action it  takes or omits to take in good faith in accordance with a direction received by it  pursuant to Section 6.05.

    (d) Every provision of this Indenture that in any way relates to theTrustee is subject to paragraphs (a), (b), (c) and (g) of this Section.

    (e) The Trustee shall not be liable for interest on any moneyreceived by it except as the Trustee may agree in writing with the Issuers.

    (f) Money held in trust by the Trustee need not be segregated fromfunds except to the extent required by law.

    (g) No provision of this Indenture shall require the Trustee toexpend or risk its own funds or otherwise incur financial liability in the performance ofany of its duties hereunder or in the exercise of any of its rights or powers.

    (h) Every provision of this Indenture relating to the conduct oraffecting the liability of or affording protection to the Trustee shall be subject to theprovisions of this Section and to the provisions of the Trust Indenture Act.

    SECTION 7.02.  Rights of Trustee. (a)  TheTrustee may conclusively rely on any document believed by it to be genuine and to havebeen signed or presented by the proper Person. The Trustee need not investigate any factor matter stated in the document.

    (b) Before the Trustee acts or refrains from acting, it may requirean Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liablefor any action it takes or omits to take in good, faith in reliance on the Officers'Certificate or Opinion of Counsel.

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    (c) The Trustee may act through agents or attorneys and shall not beresponsible for the misconduct or negligence of any agent or attorney appointed with duecare.

    (d) The Trustee shall not be liable for any action it takes or omitsto take in good faith which it believes to be authorized or within its rights or powers;provided, however, that the Trustee's conduct does not constitute willful misconductor gross negligence.

    (e) The Trustee may consult with counsel, and the advice or opinionof counsel with respect to legal matters relating to this Indenture and the Securities,shall be full and complete authorization and protection from liability in respect to anyaction taken, omitted or suffered by it hereunder in good faith and in accordance with theadvice or opinion of such counsel.

    (f) The Trustee shall not be bound to make any investigation intothe facts or matters stated in any resolution, certificate, statement, instrument,opinion, report, notice, request, consent, order, approval, bond, debenture, note or otherpaper or document.

    (g) The Trustee shall not be deemed to have notice of any Default orEvent of Default unless a Responsible Officer of the Trustee has actual knowledge thereofor unless written notice of any event which is in fact such a default is received by theTrustee at the Corporate Trust Office of the Trustee, and such notice references theSecurities and this Indenture.

    (h) The rights, privileges, protections, immunities and benefitsgiven to the Trustee, including, without limitation, its right to be indemnified, areextended to and shall be enforceable by, the Trustee in each of its capacities hereunder,and to each agent, custodian and other Person employed to act hereunder.

    (i) The Trustee shall be under no obligation to exercise any of therights or powers vested in it by this Indenture at the request or direction of any of theHolders pursuant to this Indenture, unless such Holders shall have offered to the Trusteesecurity or indemnity satisfactory to the Trustee against the costs, expenses andliabilities which might be incurred by the Trustee in compliance with such request ordirection.

    SECTION 7.03.  Individual Rights of Trustee. TheTrustee in its individual or any other capacity may become the owner or pledgee ofSecurities and may otherwise deal with the Issuers or their Affiliates with the samerights it would have if it were not Trustee. Any Paying Agent, Registrar or co-payingagent may do the same with like rights. However, the Trustee must comply withSections 7.10 and 7.11.

    SECTION 7.04.  Trustee's Disclaimer. TheTrustee shall not be responsible for and makes no representation as to the validity oradequacy of this Indenture or the Securities, it shall not be accountable for the Issuersuse of the proceeds from the Securities, and it shall not be responsible for any statementin this Indenture, in the Securities, or in any document executed in connection with thesale of the Securities, other than those set forth in the Trustee's certificate ofauthentication.

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    SECTION 7.05.  Notice of Defaults. If a Defaultoccurs and is continuing and if it is actually known to a Trust Officer of the Trustee,the Trustee shall mail to each Holder notice of the Default within 90 days after itoccurs. Except in the case of a Default in payment of Issue Price (or, if the Securitieshave been converted into semi-annual cash pay notes pursuant to Section 10.01, theRestated Principal Amount) of or Original Issue Discount (or, if the Securities have beenconverted into semi-annual cash pay notes pursuant to Section 10.01, accrued but unpaidinterest) on any Security (including payments pursuant to the mandatory redemptionprovisions of such Security, if any), the Trustee may withhold the notice if and so longas a committee of its Trust Officers in good faith determines that withholding the noticeis in the interests of Holders.

    SECTION 7.06.  Reports by Trustee to Holder. Aspromptly as practicable after each February 28 beginning with the February 28 followingthe Closing Date, and in any event prior to April 30 in each year, the Trustee shall mailto each Holder a brief report dated as of such February that complies withSection 313(a) of the Trust Indenture Act. The Trustee shall also comply withSection 313(b) of the Trust Indenture Act.

    A copy of each report at the time of its mailing to Holders shall befiled with the SEC and each stock exchange (if any) on which the Securities are listed.The Issuers agree to notify promptly the Trustee whenever the Securities become listed onany stock exchange and of any delisting thereof.

    SECTION 7.07.  Compensation and Indemnity. Each ofthe Issuers, jointly and severally, shall pay to the Trustee from time to time suchcompensation for its services as the Issuers and the Trustee shall from time to time agreein writing. The Trustee's compensation shall not be limited by any law oncompensation of a trustee of an express trust. The Issuers, jointly and severally, shallreimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred ormade by it, including costs of collection, in addition to the compensation for itsservices. Such expenses shall include the reasonable compensation and expenses,disbursements and advances of the Trustee's agents, counsel, accountants and experts.Each Issuer, jointly and severally, shall indemnify the Trustee against any and all loss,liability or expense (including reasonable attorneys' fees) incurred by or inconnection with the administration of this trust and the performance of its dutieshereunder. The Trustee shall notify the Issuers of any claim for which it may seekindemnity promptly upon obtaining actual knowledge thereof; provided, however, that anyfailure so to notify the Issuers shall not relieve any Issuer of its indemnity obligationshereunder. The Issuers need not reimburse any expense or indemnify against any loss,liability or expense incurred by an indemnified party through such party's ownwillful misconduct, gross negligence or bad faith.

    To secure the Issuers' payment obligations in this Section, theTrustee shall have a lien prior to the Securities on all money or property held orcollected by the Trustee other than money or property held in trust to pay the principalof and interest and any liquidated damages on particular Securities.

    The Issuers' payment obligations pursuant to this Section shallsurvive the satisfaction or discharge of this Indenture, any rejection or termination ofthis Indenture under any bankruptcy law or the resignation or removal of the Trustee. Whenthe Trustee incurs

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expenses after the occurrence of a Default specified in Section 6.01(8) or (9)with respect to any Issuer, the expenses are intended to constitute expenses ofadministration under the Bankruptcy Law.

    SECTION 7.08.  Replacement of Trustee. The Trusteemay resign at any time with respect to the Securities by so notifying the Issuers. TheHolders of a majority in Principal Amount at Maturity of the Securities may remove theTrustee and may appoint a successor Trustee. The Issuers shall remove the Trustee if:

    (1) the Trustee fails to comply with Section 7.10;

    (2) the Trustee is adjudged bankrupt or insolvent;

    (3) a receiver or other public officer takes charge of the Trusteeor its property; or

    (4) the Trustee otherwise becomes incapable of acting.

    If the Trustee resigns, is removed by the Issuers or by the Holdersof a majority in Principal Amount at Maturity of the Securities and such Holders do notreasonably promptly appoint a successor Trustee or if a vacancy exists in the office ofTrustee for any reason (the Trustee in such event being referred to herein as the retiringTrustee), the issuers shall promptly appoint a successor Trustee.

    A successor Trustee shall deliver a written acceptance of itsappointment to the retiring Trustee and to the Issuers. Thereupon the resignation orremoval of the retiring Trustee shall become effective, and the successor Trustee shallhave all the rights, powers and duties of the Trustee under this Indenture. The successorTrustee shall mail a notice of its succession to Holders. The retiring Trustee shallpromptly transfer all property held by it as Trustee to the successor Trustee, subject tothe lien provided for in Section 7.07.

    If a successor Trustee does not take office within 30 days after theretiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% inPrincipal Amount at Maturity of the Securities may petition, at the expense of theIssuers, any court of competent jurisdiction for the appointment of a successor Trustee.

    If the Trustee fails to comply with Section 7.10, any Holdermay petition any court of competent jurisdiction for the removal of the Trustee and theappointment of a successor Trustee.

    Notwithstanding the replacement of the Trustee pursuant to thisSection 7.08, the Issuers' obligations under Section 7.07 shall continuefor the benefit of the retiring Trustee.

    SECTION 7.09.  Successor Trustee by Merger. If theTrustee consolidates with, merges or converts into, or transfers all or substantially allits corporate-trust business or assets to, another corporation or banking association, theresulting, surviving or transferee corporation without any further act shall be thesuccessor Trustee.

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    In case at the time such successor or successors by merger,conversion or consolidation to the Trustee shall succeed to the trusts created by thisIndenture any of the Securities shall have been authenticated but not delivered, any suchsuccessor to the Trustee may adopt the certificate of authentication of any predecessortrustee, and deliver such Securities so authenticated; and if at that time any of theSecurities shall not have been authenticated, any such successor to the Trustee mayauthenticate such Securities either in the name of any predecessor hereunder or in thename of the successor to the Trustee; and in all such cases such certificates shall havethe full force which it is anywhere in the Securities or in this Indenture provided thatthe certificate of the Trustee shall have.

    SECTION 7.10.  Eligibility; Disqualification. TheTrustee shall at all times satisfy the requirements of Trust Indenture ActSection 310(a). The Trustee shall have a combined capital and surplus of at least$100,000,000 as set forth in its most recent published annual report of condition. TheTrustee shall comply with Trust Indenture Act Section 310(b); provided, however, thatthere shall be excluded from the operation of Trust Indenture Act Section 310(b)(1)any indenture or indentures under which other securities or certificates of interest orparticipation in other securities of any Issuer are outstanding if the requirements forsuch exclusion set forth in Trust Indenture Act Section 310(b)(1) are met.

    SECTION 7.11.  Preferential Collection of ClaimsAgainst Issuers. The Trustee shall comply with Trust Indenture ActSection 311(a), excluding any creditor relationship listed in Trust Indenture ActSection 311(b). A Trustee who has resigned or has been removed shall be subject toTrust Indenture Act Section 311(a) to the extent indicated.

ARTICLE 8DISCHARGE OF INDENTURE

    SECTION 8.01.  Discharge of Liability on Securities.This Indenture shall cease to be of further effect (except as to any surviving rights ofregistration of transfer or exchange of Securities herein expressly provided for), and theTrustee, on demand of and at the expense of the Issuers, shall execute proper instrumentsacknowledging satisfaction and discharge of this Indenture, when

    (a) either

    (1) all Securities theretofore authenticated and delivered (other  than (A) Securities which have been destroyed, lost or stolen and which have been replaced  or paid as provided in Section 2.08 and (B) Securities for whose payment money has  theretofore been deposited with the Trustee in trust or segregated and held in trust by  the Issuers and thereafter repaid to the Issuers or otherwise discharged from such trust  as provided in Section 10.02) have been delivered to the Trustee for cancellation; or

    (2) all such Securities not theretofore delivered to the Trustee for  cancellation have become due and payable and the Issuers have deposited or caused to be  deposited with the Trustee as trust funds in trust for that purpose an amount sufficient  to pay and discharge the entire indebtedness evidenced by such Securities not theretofore  delivered

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to the Trustee for cancellation: Principal Amount at Maturity or Restated Principal  amount and interest to the date of such deposit (in the case of Securities which have  become due and payable) or Issue Price and accrued Original Issue Discount to Maturity, as  the case may be;

    (b) the Issuers have paid or caused to be paid all other sumspayable hereunder by the Issuers; and

    (c) the Issuers have delivered to the Trustee an Officers'Certificate and an Opinion of Counsel, each stating that all conditions precedent hereinprovided for relating to the satisfaction and discharge of this Indenture have beencomplied with.

    Notwithstanding clauses (a) and (b) above, the Issuers'obligations in Sections 2.04, 2.05, 2.06, 2.08, 2.09, 7.07, 7.08, 10.03 and, if moneyshall have been deposited with the Trustee pursuant to subclause (ii) of clause (a) ofthis Section 8.01, shall survive until the Securities have been paid in full. Thereafter,the Issuers' obligations in Sections 7.07 and 8.03 shall survive suchsatisfaction and discharge.

    SECTION 8.02.  Application of Trust Money. TheTrustee shall hold in trust money deposited with it pursuant to Section 8.01. It shallapply the deposited money through the Paying Agent and in accordance with this Indentureto the payment of the principal and interest for whose payment such money has beendeposited with the Trustee.

    SECTION 8.03.  Repayment to Issuers. The Trusteeand the Paying Agent shall pay to the Issuers, upon written request therefor, any moneyheld by them for the payment of Principal Amount at Maturity or Restated Principal Amountand interest, as the case may be, that remains unclaimed for two years, and, thereafter,Holders entitled to the money must look to the Issuers for payment as general creditors.

ARTICLE 9AMENDMENTS

    SECTION 9.01.  Without Consent of Holders. TheIssuers and the Trustee may amend this Indenture or the Securities without notice to orconsent of any Holder:

    (1) to cure any ambiguity or correct or supplement any defective or  inconsistent provision contained in this Indenture or make any other changes in the  provisions of this Indenture which the Issuers and the Trustee may deem necessary or  desirable provided such amendment does not adversely affect the legal rights under this  Indenture of the Holders;

    (2) to comply with Article 5;

    (3) to provide for uncertificated Securities in addition to or in  place of certificated Securities; provided, however, that the uncertificated Securities  are issued in registered form for purposes of Section 163(f) of the Code or in a  manner such that the uncertificated Securities are described in Section 163(f)(2)(B)  of the Code;

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    (4) to add guarantees or co-obligors with respect to the Securities  or to secure the Securities;

    (5) to increase the Conversion Rate;

    (6) to add to the covenants of the Issuers for the benefit of the  Holders to surrender any right or power herein conferred upon the Issuers;

    (7) to comply with any requirements of the SEC in connection with  qualifying, or maintaining the qualification of, this Indenture under the Trust Indenture  Act; or

    (8) to make any changes that would provide the Holders with any  additional rights or benefits or that do not adversely affect the legal rights under this  Indenture of any such Holder. 

    SECTION 9.02.  With Consent of Holders. The Issuersand the Trustee may amend this Indenture or the Securities without notice to any Holderbut with the written consent of the Holders of at least a majority in Principal Amount atMaturity of the Securities then outstanding (including consents obtained in connectionwith a tender offer or exchange for the Securities). However, without the consent of eachHolder affected, an amendment may not:

    (1) except as provided in this Indenture, make any change in the  manner or rate of accrual in connection with Original Issue Discount, reduce the yield to  maturity referred to in the Securities, reduce the rate of interest referred to in Section  10.01 upon the occurrence of a Tax Event, or extend the time for payment of interest, if  any, on any Security;

    (2) reduce the Principal Amount at Maturity, Restated Principal  Amount or the Issue Price of or extend the Stated Maturity of any Security;

    (3) reduce the Redemption Price, Purchase Price or Fundamental  Change Repurchase Price of any Security;

    (4) make any Security payable in money or securities other than that  stated in the Security;

    (5) make any change that adversely affects the right to convert any  Security;

    (6) make any change that adversely affects the right to require the  Issuers to purchase the Securities in accordance with the terms thereof and this  Indenture;

    (7) impair the right of any Holder to institute suit for the  enforcement of any payment of the Principal Amount at Maturity, Restated Principal Amount,  the Issue Price or liquidated damages;

    (8) make any changes to the percentage in Principal Amount at  Maturity of the outstanding Securities, the consent of whose Holders is required for any  amendment, or the consent of whose Holders is required for any waiver (of compliance with  certain

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provisions of this Indenture or certain defaults hereunder and their consequences)  provided for in this Indenture; or

    (9) make any change in Section 6.04 or 6.07 or the second  sentence of this Section 9.02.

    It shall not be necessary for the consent of the Holders under thisSection to approve the particular form of any proposed amendment, but it shall besufficient if such consent approves the substance thereof. After an amendment under thisSection becomes effective, the Issuers shall mail to all affected Holders a notice brieflydescribing such amendment. The failure to give such notice to all such Holders, or anydefect therein, shall not impair or affect the validity of an amendment under thisSection.

    SECTION 9.03.  Compliance with Trust Indenture Act.Every amendment to this Indenture or the Securities shall comply with the Trust IndentureAct as then in effect.

    SECTION 9.04.  Revocation and Effect of Consents andWaivers. A consent to an amendment or a waiver by a Holder of a Security shall bindthe Holder and every subsequent Holder of that Security or portion of the Security thatevidences the same debt as the consenting Holder's Security, even if notation of theconsent or waiver is not made on the Security. However, any such Holder or subsequentHolder may revoke the consent or waiver as to such Holder's Security or portion ofthe Security if the Trustee receives the notice of revocation before the date theamendment or waiver becomes effective. After an amendment or waiver becomes effective, itshall bind every Holder. An amendment or waiver becomes effective once both (i) therequisite number of consents have been received by the Issuers or the Trustee and(ii) such amendment or waiver has been executed by the Issuers and the Trustee.

    The Issuers may, but shall not be obligated to, fix a record datefor the purpose of determining the Holders entitled to give their consent or take anyother action described above or required or permitted to be taken pursuant to thisIndenture. If a record date is fixed, then notwithstanding the immediately precedingparagraph, those Persons who were Holders at such record date (or their duly designatedproxies), and only those Persons, shall be entitled to give such consent or to revoke anyconsent previously given or to take any such action, whether or not such Persons continueto be Holders after such record date. No such consent shall be valid or effective for morethan 120 days after such record date.

    SECTION 9.05.  Notation on or Exchange of Securities.If an amendment changes the terms of a Security, the Trustee may require the Holder of theSecurity to deliver it to the Trustee. The Trustee may place an appropriate notation onthe Security regarding the changed terms and return it to the Holder. Alternatively, ifthe Issuers or the Trustee so determines, the Issuers in exchange for the Security shallissue and the Trustee shall authenticate a new Security that reflects the changed terms.Failure to make the appropriate notation or to issue a new Security shall not affect thevalidity of such amendment.

    SECTION 9.06.  Trustee To Sign Amendments. TheTrustee shall sign any amendment authorized pursuant to this Article 9 if the amendmentdoes not affect the rights, duties, liabilities or immunities of the Trustee. If it does,the Trustee may but need not sign it. In

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signing such amendment the Trustee shall be entitled to receive indemnity satisfactoryto it and to receive, and (subject to Section 7.01) shall be fully protected inrelying upon, an Officers' Certificate and an Opinion of Counsel stating that suchamendment is authorized or permitted by this Indenture and that such amendment is thelegal, valid and binding obligation of the Issuers enforceable against them in accordancewith its terms, subject to customary exceptions, and complies with the provisions hereof(including Section 9.03).

    SECTION 9.07.  Payment for Consent. Neither theIssuers nor any Affiliate of the Issuers shall, directly or indirectly, pay or cause to bepaid any consideration, whether by way of interest, fee or otherwise, to any Holder for oras an inducement to any consent, waiver or amendment of any of the terms or provisions ofthis Indenture or the Securities unless such consideration is offered to be paid to allHolders, ratably, that so consent, waive or agree to amend in the time frame set forth insolicitation documents relating to such consent, waiver or agreement.

ARTICLE 10SPECIAL TAX EVENT CONVERSION

    SECTION 10.01.  Optional Conversion to Semi-annual CashPay Note Upon Tax Event. From and after (i) the date (the "Tax EventDate") of the occurrence of a Tax Event and (ii) the date the Issuers exercisetheir option set forth in this Section 10.01, whichever is later (the "OptionExercise Date"), at the option of the Issuers, cash interest in lieu of futureOriginal Issue Discount shall accrue at the rate of 3.5% per annum on a restated principalamount per $1,000 original Principal Amount at Maturity (the "Restated PrincipalAmount") equal to the Issue Price plus Original Issue Discount accrued to the OptionExercise Date and shall be payable semi-annually on February 1 and August 1 of each year(each an "Interest Payment Date") to holders of record at the close of businesson January 16 and July 16 (each a "Regular Record Date") immediately precedingsuch Interest Payment Date. Interest will be computed on the basis of a 360-day yearcomprised of twelve 30-day months and will accrue from the most recent date on whichinterest has been paid or, if no interest has been paid, from the Option Exercise Date.Within 15 days of the occurrence of a Tax Event, the Issuers shall deliver a writtennotice of such Tax Event by facsimile and first-class mail to the Trustee and within 15days of their exercise of such option the Issuers shall deliver a written notice of theOption Exercise Date by facsimile and first-class mail to the Trustee and by first classmail to the Holders of the Securities. From and after the Option Exercise Date,(i) the Issuers shall be obligated to pay at Maturity or upon a Redemption Date,Purchase Date or Fundamental Change Repurchase Date, in lieu of the Principal Amount atMaturity of a Security, the Restated Principal Amount thereof plus accrued and unpaidinterest and (ii) "Issue Price and accrued Original Issue Discount,""Issue Price plus Original Issue Discount" or similar words, as used herein,shall mean Restated Principal Amount plus accrued and unpaid interest with respect to anySecurity. Securities authenticated and delivered after the Option Exercise Date may, andshall if required by the Trustee, bear a notation in a form approved by the Trustee as tothe conversion of the Securities to semi-annual cash pay notes.

    SECTION 10.02.  Paying Agent To Hold Money in Trust.Prior to 11 a.m. (New York City time) on any Interest Payment Date, the Issuers shalldeposit with the Paying Agent 

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(or if an Issuer or a Subsidiary of any Issuer is acting as Paying Agent, segregate andhold in trust for the benefit of the Persons entitled thereto) a sum sufficient to payinterest when due. The Issuers shall require each Paying Agent (other than the Trustee) toagree in writing that the Paying Agent shall hold in trust for the benefit of Holders orthe Trustee all money held by the Paying Agent for the payment of principal or interest onthe Securities and shall notify the Trustee of any default by the Issuers in making anysuch payment. If an Issuer or a Subsidiary of any Issuer acts as Paying Agent, it shallsegregate the money held by it as Paying Agent and hold it as a separate trust fund. TheIssuers at any time may require a Paying Agent to pay all money held by it to the Trusteeand to account for any funds disbursed by the Paying Agent. Upon complying with thisSection, the Paying Agent shall have no further liability for the money delivered to theTrustee.

    SECTION 10.03.  Holder Lists. The Trustee shallpreserve in as current a form as is reasonably practicable the most recent list availableto it of the names and addresses of Holders. If the Trustee is not the Registrar, theIssuers shall furnish, or cause the Registrar to furnish, to the Trustee, in writing atleast five Business Days before each Interest Payment Date and at such other times as theTrustee may request in writing, a list in such form and as of such date as the Trustee mayreasonably require of the names and addresses of Holders.

    SECTION 10.04.  Payment of Interest; Interest RightsPreserved. (a)  Interest on any Security that is payable, and is punctually paidor duly provided for, on any Interest Payment Date shall be paid to the Person in whosename that Security is registered at the close of business on the Regular Record Date forsuch interest at the office or agency of the Company maintained for such purpose. Eachinstallment of interest on any Security shall be paid in same-day funds by transfer to anaccount maintained by the Holder located inside the United States, provided that withrespect to any Holder, such Holder shall have furnished to the Paying Agent all requiredwire payment instructions no later than the related Regular Record Date, or if no suchinstructions have been furnished, by check payable to such Holder. In the case of a GlobalSecurity, interest payable on any Interest Payment Date will be paid to the Depositary,with respect to that portion of such Global Security held for its account by Cede &Co. for the purpose of permitting such party to credit the interest received by it inrespect of such Global Security to the accounts of the beneficial owners thereof.

    (b) Except as otherwise specified with respect to the Securities,any interest on any Security that is payable, but is not punctually paid or duly providedfor, within 30 days following on any Interest Payment Date (herein called "DefaultedInterest"), shall forthwith cease to be payable to the registered Holder thereof onthe relevant Regular Record Date by virtue of having been such Holder, and such DefaultedInterest may be paid by the Issuers, as their election in each case, as provided in clause(1) or (2) below:

    (1) The Issuers may elect to make payment of any Defaulted Interest  to the Persons in whose names the Securities are registered at the close of business on a  date (the "Special Record Date") for the payment of such Defaulted Interest,  which shall be fixed in the following manner. The Issuers shall notify the Trustee in  writing of the amount of Defaulted Interest proposed to be paid on each Security and the  date of the proposed payment (which shall not be less than 20 days after such notice is  received by the Trustee), and at the same time the Issuers shall deposit with the Trustee  an amount of 

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money equal to the aggregate amount proposed to be paid in respect of such Defaulted  Interest or shall make arrangements satisfactory to the Trustee for such deposit on or  prior to the date of the proposed payment, such money when deposited to be held in trust  for the benefit of the Persons entitled to such Defaulted Interest as in this clause  provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such  Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to  the date of the proposed payment and not less than 10 days after the receipt by the  Trustee of the notice of the proposed payment. The Trustee shall promptly notify the  Issuers of such Special Record Date and, in the name and at the expense of the Issuers,  shall cause notice of the proposed payment of such Defaulted Interest and the Special  Record Date therefor to be mailed, first-class postage prepaid, to each Holder of  Securities at his address as it appears on the list of Holders maintained pursuant to this  Indenture not less than 10 days prior to such Special Record Date. Notice of the proposed  payment of such Defaulted Interest and the Special Record Date therefor having been mailed  as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names the  Securities are registered at the close of business on such Special Record Date and shall  no longer be payable pursuant to the following clause (2).

    (2) The Issuers may make payment of any Defaulted Interest on the  Securities in any other lawful manner not inconsistent with the requirements of any  securities exchange on which such Securities may be listed, and upon such notice as may be  required by such exchange, if, after notice given by the Issuers to the Trustee of the  proposed payment pursuant to this clause, such manner of payment shall be deemed  practicable by the Trustee.

    Subject to the foregoing provisions, each Security delivered underthis Indenture upon registration of transfer of or in exchange for or in lieu of any otherSecurity shall carry the rights to interest accrued and unpaid, and to accrue, which werecarried by such other Security.

ARTICLE 11CONVERSION

Section 11.01.  Conversion Privilege. A Holder of a Security mayconvert such Security into Common Stock at any time during the period stated in theSecurities. The number of shares of Common Stock issuable upon conversion of a Securityper $1,000 of Principal Amount at Maturity thereof (the "Conversion Rate") shallbe that set forth in the Securities, subject to adjustment as herein set forth.

    A Holder may convert a portion of the Principal Amount at Maturityof a Security if the portion is $1,000 or an integral multiple of $1,000. Provisions ofthis Indenture that apply to conversion of all of a Security also apply to conversion of aportion of a Security.

    "Average Quoted Price" means the average of the SalePrices of the Common Stock for the shorter of

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(i)     30 consecutive trading days ending on the last full trading  day prior to the Time of Determination with respect to the rights, warrants or options or  distribution in respect of which the Average Quoted Price is being calculated, or

(ii)     the period (x) commencing on the date next succeeding  the first public announcement of (a) the issuance of rights, warrants or options or  (b) the distribution, in each case, in respect of which the Average Quoted Price is  being calculated and (y) proceeding through the last full trading day prior to the  Time of Determination with respect to the rights, warrants or options or distribution in  respect of which the Average Quoted Price is being calculated (excluding days within such  period, if any, which are not trading days), or

(iii)     the period, if any, (x) commencing on the date next  succeeding the Ex-Dividend Time with respect to the next preceding (a) issuance of  rights, warrants or options or (b) distribution, in each case, for which an  adjustment is required by the provisions of Section 11.06(4), 11.07 or 11.08 and  (y) proceeding through the last full trading day prior to the Time of Determination  with respect to the rights, warrants or options or distribution in respect of which the  Average Quoted Price is being calculated (excluding days within such period, if any, which  are not trading days).

    In the event that the Ex-Dividend Time (or in the case of asubdivision, combination or reclassification, the effective date with respect thereto),with respect to a dividend, subdivision, combination or reclassification to whichSection 11.06(1), (2), (3) or (5) applies, occurs during the period applicable forcalculating "Average Quoted Price" pursuant to the definition in the precedingsentence, "Average Quoted Price" shall be calculated for such period in a mannerdetermined by the Board of Directors of the Company to reflect the impact of suchdividend, subdivision, combination or reclassification on the Sale Price of the CommonStock during such period.

    "Time of Determination" means the time and date of theearlier of (i) the determination of shareholders entitled to receive rights, warrantsor options or a distribution, in each case, to which Section 11.07 or 11.08 appliesand (ii) the time ("Ex-Dividend Time") immediately prior to thecommencement of "ex-dividend" trading for such rights, warrants or options ordistribution on the New York Stock Exchange or such other national or regional exchange ormarket on which the Common Stock is then listed or quoted.

    SECTION 11.02.  Conversion Procedure. To convert aSecurity a Holder must satisfy the requirements set forth in the Securities. The date onwhich the Holder satisfies all those requirements is the conversion date (the"Conversion Date"). As soon as practicable after the Conversion Date, theCompany shall deliver to the Holder, through the Conversion Agent, a certificate for thenumber of full shares of Common Stock issuable upon the conversion and cash in lieu of anyfractional share determined pursuant to Section 11.03. Prior to the Conversion Date,a Holder of a Security shall have no rights as a shareholder with respect to the shares ofCommon Stock into which such Security is convertible. The Person in whose name thecertificate is registered shall be treated as a shareholder of record on and after theConversion Date; provided, however, that no surrender of a Security on any date when thestock transfer books of the Company shall be closed shall be effective to constitute thePerson or Persons 

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entitled to receive the shares of Common Stock upon such conversion as the recordholder or holders of such shares of Common Stock on such date, but such surrender shall beeffective to constitute the Person or Persons entitled to receive such shares of CommonStock as the record holder or holders thereof for all purposes at the close of business onthe next succeeding day on which such stock transfer books are open; such conversion shallbe at the Conversion Rate in effect on the date that such Security shall have beensurrendered for conversion, as if the stock transfer books of the Company had not beenclosed. Upon conversion of a Security, such Person shall no longer be a Holder of suchSecurity and such Security shall be cancelled and no longer outstanding.

    No payment or adjustment will be made for accrued Original IssueDiscount, unpaid interest, liquidated damages, dividends on, or other distributions withrespect to, any converted Security or Common Stock except as provided in this Article 11.On conversion of a Security, that portion of accrued Original Issue Discount (or interest,if the Securities have been converted into semi-annual cash pay notes pursuant toSection 10.01) attributable to the period from the Issue Date (or, if the Issuershave exercised the option provided for in Section 10.01, the later of (x) thedate of such exercise and (y) the date on which interest was last paid) of theSecurity through the Conversion Date with respect to the converted Security shall not becancelled, extinguished or forfeited, but rather shall be deemed to be paid in full to theHolder thereof through delivery of the Common Stock (together with the cash payment, ifany, in lieu of fractional shares) in exchange for the Security being converted pursuantto the provisions hereof; and the fair market value of such shares of Common Stock(together with any such cash payment in lieu of fractional shares) shall be treated asissued, to the extent thereof, first in exchange for Original Issue Discount (or interest,if the Securities have been converted into semi-annual cash pay notes pursuant to Section10.01) accrued through the Conversion Date, and the balance, if any, of such fair marketvalue of such Common Stock (and any such cash payment) shall be treated as issued inexchange for the Issue Price of the Security being converted pursuant to the provisionshereof.

    If the Holder converts more than one Security at the same time, thenumber of shares of Common Stock issuable upon the conversion shall be based on the totalPrincipal Amount at Maturity of the Securities converted.

    If the last day on which a Security may be converted is a LegalHoliday, the Security may be surrendered on the next succeeding day that is not a LegalHoliday.

    Upon surrender of a Security that is converted in part, the Issuersshall execute, and the Trustee shall authenticate and deliver to the Holder, a newSecurity in an authorized denomination equal in Principal Amount at Maturity to theunconverted portion of the Security surrendered.

    SECTION 11.03.  Fractional Shares. The Company willnot issue a fractional share of Common Stock upon conversion of a Security. Instead, theIssuers will deliver cash for the current market value of the fractional share. Thecurrent market value of a fractional share shall be determined, to the nearest 1/1,000thof a share, by multiplying the Sale Price on the trading day immediately preceding theConversion Date by the fractional amount and rounding the product to the nearest wholecent.

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    SECTION 11.04.  Taxes on Conversion. If a Holderconverts a Security, the Issuers shall pay any documentary, stamp or similar issue ortransfer tax due on the issue of shares of Common Stock upon the conversion. However, theHolder shall pay any such tax which is due because the Holder requests the shares to beissued in a name other than the Holder's name. The Conversion Agent may refuse todeliver the certificates representing the Common Stock being issued in a name other thanthe Holder's name until the Conversion Agent receives a sum that the Issuers deem tobe sufficient to pay any tax which will be due because the shares are to be issued in aname other than the Holder's name. Nothing herein shall preclude any tax withholdingrequired by law or regulations.

    SECTION 11.05.  Company to Provide Stock. TheCompany shall, prior to issuance of any Securities under this Article 11, and from time totime as may be necessary, reserve out of its authorized but unissued or treasury CommonStock a sufficient number of shares of Common Stock to permit the conversion of theSecurities.

    All shares of Common Stock delivered upon conversion of theSecurities shall be newly issued shares or treasury shares, shall be duly authorized andvalidly issued, fully paid and nonassessable, and shall be free from preemptive rights andfree of any lien or adverse claim.

    The Company will endeavor promptly to comply with all federal andstate securities laws regulating the offer and delivery of shares of Common Stock uponconversion of Securities, if any, including the addition of any and all restrictivelegends that are required to appear on the face of the Common Stock, and will list orcause to have quoted such shares of Common Stock on each national securities exchange orin the over-the-counter market or such other market on which the Common Stock is thenlisted or quoted.

    SECTION 11.06.  Adjustment for Change In Capital Stock.If, after the Issue Date of the Securities, the Company:

    (1) pays a dividend or makes a distribution on its Common Stock in  shares of its Common Stock;

    (2) subdivides its outstanding shares of Common Stock into a greater  number of shares;

    (3) combines its outstanding shares of Common Stock into a smaller  number of shares;

    (4) pays a dividend or makes a distribution on its Common Stock in  shares of its Capital Stock (other than Common Stock or rights, warrants or options for  its Capital Stock); or

    (5) issues by reclassification of its Common Stock any shares of its  Capital Stock (other than rights, warrants or options for its Capital Stock),

then the Conversion Rate in effect immediately prior to such action shall be adjustedso that the Holder of a Security thereafter converted may receive the number of shares ofCapital Stock of 

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the Company which such Holder would have owned immediately following such action ifsuch Holder had converted the Security immediately prior to such action.

    The adjustment shall become effective immediately after the recorddate in the case of a dividend or distribution and immediately after the effective date inthe case of a subdivision, combination or reclassification.

    If after an adjustment a Holder of a Security upon conversion ofsuch Security may receive shares of two or more classes of Capital Stock of the Company,the Conversion Rate shall thereafter be subject to adjustment upon the occurrence of anaction taken with respect to any such class of Capital Stock as is contemplated by thisArticle 11 with respect to the Common Stock, on terms comparable to those applicable toCommon Stock in this Article 11.

    SECTION 11.07.  Adjustment for Rights Issue. Ifafter the Issue Date of the Securities, the Company distributes any rights, warrants oroptions to all holders of its Common Stock entitling them, for a period expiring within 60days after the record date for such distribution, to subscribe for or purchase shares ofCommon Stock at a price per share less than the Sale Price as of the Time ofDetermination, the Conversion Rate shall be adjusted, subject to the provisions of thelast paragraph of this Section 11.07, in accordance with the formula 

R' =      R x (O + N)        (O + (N x P) / M)
where:

    R' = the adjusted Conversion Rate.

    R = the current Conversion Rate.

    O = the number of shares of Common Stock outstanding on the recorddate for the distribution to which this Section 11.07 is being applied.

    N = the number of additional shares of Common Stock offered pursuantto the distribution.

    P = the offering price per share of the additional shares.

    M = the Average Quoted Price, minus, in the case of (i) adistribution to which Section 11.06(4) applies or (ii) a distribution to whichSection 11.08 applies, for which, in each case, (x) the record date shall occuron or before the record date for the distribution to which this Section 11.07 appliesand (y) the Ex-Dividend Time shall occur on or after the date of the Time ofDetermination for the distribution to which this Section 11.07 applies, the fairmarket value (on the record date for the distribution to which this Section 11.07applies) of the

    (1) Capital Stock of the Company distributed in respect of each  share of Common Stock in such Section 11.06(4) distribution and

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    (2) assets of the Company or debt securities or any rights, warrants  or options to purchase securities of the Company distributed in respect of each share of  Common Stock in such Section 11.08 distribution.

    The Board of Directors shall determine fair market values for thepurposes of this Section 11.07.

    The adjustment shall become effective immediately after the recorddate for the determination of shareholders entitled to receive the rights, warrants oroptions to which this Section 11.07 applies. If all of the shares of Common Stocksubject to such rights, warrants or options have not been issued when such rights,warrants or options expire, then the Conversion Rate shall promptly be readjusted to theConversion Rate which would then be in effect had the adjustment upon the issuance of suchrights, warrants or options been made on the basis of the actual number of shares ofCommon Stock issued upon the exercise of such rights, warrants or options.

    No adjustment shall be made under this Section 11.07 if theapplication of the formula stated above in this Section 11.07 would result in a valueof R' that is equal to or less than the value of R.

    SECTION 11.08.  Adjustment for Other Distributions.If, after the Issue Date of the Securities, the Company distributes to all holders of itsCommon Stock any of its assets, or debt securities or any rights, warrants or options topurchase securities of the Company (including securities or cash, but excluding(x) distributions of Capital Stock referred to in Section 11.06 anddistributions of rights, warrants or options referred to in Section 11.07 and(y) cash dividends or other cash distributions that are paid out of current orretained earnings or earnings retained in the business as shown on the books of theCompany unless such cash dividends or other cash distributions are Extraordinary CashDividends) the Conversion Rate shall be adjusted, subject to the provisions of the lastparagraph of this Section 11.08, in accordance with the formula:

R' = R x M M - F
where:

    R' = the adjusted Conversion Rate.

    R = the current Conversion Rate.

    M = the Average Quoted Price, minus, in the case of a distributionto which Section 3.06(4) applies, for which (i) the record date shall occur onor before the record date for the distribution to which this Section 11.08 appliesand (ii) the Ex-Dividend Time shall occur on or after the date of the Time ofDetermination for the distribution to which this Section 11.08 applies, the fairmarket value (on the record date for the distribution to which this Section 11.08applies) of any Capital Stock of the Company distributed in respect of each share ofCommon Stock in such Section 11.06(4) distribution.

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    F = the fair market value (on the record date for the distributionto which this Section 11.08 applies) of the assets, securities, rights, warrants oroptions to be distributed in respect of each share of Common Stock in the distribution towhich this Section 11.08 is being applied (including, in the case of cash dividendsor other cash distributions giving rise to an adjustment, all such cash distributedconcurrently).

    The Board of Directors shall determine fair market values for thepurposes of this Section 11.08.

    The adjustment shall become effective immediately after the recorddate for the determination of shareholders entitled to receive the distribution to whichthis Section 11.08 applies.

    For purposes of this Section 11.08, the term"Extraordinary Cash Dividend" shall mean any cash dividend with respect to theCommon Stock the amount of which, together with the aggregate amount of cash dividends onthe Common Stock to be aggregated with such cash dividend in accordance with theprovisions of this paragraph, equals or exceeds the threshold percentage set forth in item(i) below. For purposes of item (i) below, the "Measurement Period"with respect to a cash dividend on the Common Stock shall mean the 365 consecutive dayperiod ending on the date prior to the Ex-Dividend Time with respect to such cashdividend, and the "Relevant Cash Dividends" with respect to a cash dividend onthe Common Stock shall mean the cash dividends on the Common Stock with Ex-Dividend Timesoccurring in the Measurement Period.

    (i) If, upon the date prior to the Ex-Dividend Time with respect a  cash dividend on the Common Stock, the aggregate amount of such cash dividend together  with the amounts of all Relevant Cash Dividends equals or exceeds on a per share basis 10%  of the Sale Price of the Common Stock on the last trading day preceding the date of  declaration by the Board of Directors of the cash dividend with respect to which this  provision is being applied, then such cash dividend together with all Relevant Cash  Dividends, shall be deemed to be an Extraordinary Cash Dividend and for purposes of  applying the formula set forth above in this Section 11.08, the value of  "F" shall be equal to (y) the aggregate amount of such cash dividend  together with the amount of all Relevant Cash Dividends, minus (z) the aggregate  amount of all Relevant Cash Dividends for which a prior adjustment in the Conversion Rate  was previously made under this Section 11.08.

    In making the determinations required by item (i) above, the  amount of cash dividends paid on a per share basis and the amount of any Relevant Cash  Dividends specified in item (i) above, shall be appropriately adjusted to reflect the  occurrence during such period of any event described in Section 11.06.

    In the event that, with respect to any distribution to which thisSection 11.08 would otherwise apply, the difference "M-F" as defined in theabove formula is less than $1.00 or "F" is equal to or greater than"M", then the adjustment provided by this Section 11.08 shall not be madeand in lieu thereof the provisions of Section 11.14 shall apply to such distribution.

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    SECTION 11.09.  When Adjustment May Be Deferred. Noadjustment in the Conversion Rate need be made unless the adjustment would require anincrease or decrease of at least 1% in the Conversion Rate. Any adjustments that are notmade shall be carried forward and taken into account in any subsequent adjustment.

    All calculations under this Article 11 shall be made to the nearestcent or to the nearest 1/1,000th of a share, as the case may be.

    SECTION 11.10.  When No Adjustment Required. Noadjustment need be made for a transaction referred to in Section 11.06, 11.07, 11.08or 11.14 if Holders are to participate in the transaction on a basis and with notice thatthe Board of Directors of the Company determines to be fair and appropriate in light ofthe basis and notice on which holders of Common Stock participate in the transaction. Suchparticipation by Holders may include participation upon conversion provided that anadjustment shall be made at such time as the Holders are no longer entitled toparticipate.

    No adjustment need be made for rights to purchase Common Stockpursuant to a Company plan for reinvestment of dividends or interest.

    No adjustment need be made for a change in the par value or no parvalue of the Common Stock.

    To the extent the Securities become convertible pursuant to thisArticle 11 into cash, no adjustment need be made thereafter as to the cash. Interest willnot accrue on the cash.

    SECTION 11.11.  Notice of Adjustment. Whenever theConversion Rate is adjusted, the Issuers shall promptly mail to Holders by first-classmail a notice of the adjustment. The Issuers shall file with the Trustee and theConversion Agent such notice and a certificate from the Company's independent publicaccountants briefly stating the facts requiring the adjustment and the manner of computingit. The certificate shall be conclusive evidence that the adjustment is correct. Neitherthe Trustee nor any Conversion Agent shall be under any duty or responsibility withrespect to any such certificate except to exhibit the same to any Holder desiringinspection thereof.

    SECTION 11.12.  Voluntary Increase. The Issuersfrom time to time may increase the Conversion Rate by any amount for any period of time.Whenever the Conversion Rate is increased, the Issuers shall mail to Holders byfirst-class mail and file with the Trustee and the Conversion Agent a notice of theincrease. The Issuers shall mail the notice at least 15 days before the date the increasedConversion Rate takes effect. The notice shall state the increased Conversion Rate and theperiod it will be in effect.

    A voluntary increase of the Conversion Rate does not change oradjust the Conversion Rate otherwise in effect for purposes of Section 11.06, 11.07or 11.08.

    SECTION 11.13.  Notice of Certain Transactions. If:

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    (1) the Company takes any action that would require an adjustment in  the Conversion Rate pursuant to Section 11.06, 11.07 or 11.08 (unless no adjustment  is to occur pursuant to Section 11.10); or

    (2) there is a liquidation or dissolution of the Company;

then the Issuers shall mail to Holders by first-class mail and file with the Trusteeand the Conversion Agent a notice stating the proposed record date for a dividend ordistribution or the proposed effective date of a subdivision, combination,reclassification, consolidation, merger, binding share exchange, transfer, liquidation ordissolution. The Issuers shall file and mail the notice at least 15 days before such date.Failure to file or mail the notice or any defect in it shall not affect the validity ofthe transaction.

    SECTION 11.14.  Reorganization of Company; SpecialDistributions. If the Company is a party to a transaction subject to Section 5.01(other than a sale of all or substantially all of the assets of the Company in atransaction in which the holders of Common Stock immediately prior to such transaction donot receive securities, cash or other assets of the Company or any other Person) or amerger or binding share exchange which reclassifies or changes its outstanding CommonStock, the Person obligated to deliver securities, cash or other assets upon conversion ofSecurities shall enter into a supplemental indenture. If the issuer of securitiesdeliverable upon conversion of Securities is an Affiliate of the Successor Company, thatissuer shall join in the supplemental indenture.

    The supplemental indenture shall provide that the Holder of aSecurity may convert it into the kind and amount of securities, cash or other assets whichsuch Holder would have received immediately after the consolidation, merger, binding shareexchange or transfer if such Holder had converted the Security immediately before theeffective date of the transaction, assuming (to the extent applicable) that such Holder(i) was not a constituent Person or an Affiliate of a constituent Person to suchtransaction; (ii) made no election with respect thereto; and (iii) was treatedalike with the plurality of non-electing Holders. The supplemental indenture shall providefor adjustments which shall be as nearly equivalent as may be practical to the adjustmentsprovided for in this Article 11. The Successor Company shall mail to Holders a noticebriefly describing the supplemental indenture.

    If this Section 11.14 applies, neither Section 11.06 norSection 11.07 applies.

    If the Company makes a distribution to all holders of its CommonStock of any of its assets, or debt securities or any rights, warrants or options topurchase securities of the Company that, but for the provisions of the last paragraph ofSection 11.08, would otherwise result in an adjustment in the Conversion Ratepursuant to the provisions of Section 11.08, then, from and after the record date fordetermining the holders of Common Stock entitled to receive the distribution, a Holder ofa Security that converts such Security in accordance with the provisions of this Indentureshall upon such conversion be entitled to receive, in addition to the shares of CommonStock into which the Security is convertible, the kind and amount of securities, cash orother assets comprising the distribution that such Holder would have received if suchHolder had converted the Security immediately prior to the record date for determining theholders of Common Stock entitled to receive the distribution.

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    SECTION 11.15.  Company Determination Final. Anydetermination that the Company or the Board of Directors of the Company must make pursuantto Section 11.03, 11.06, 11.07, 11.08, 11.09, 11.10, 11.14 or 11.17 is conclusive.

    SECTION 11.16.  Trustee's Adjustment Disclaimer.The Trustee has no duty to determine when an adjustment under this Article 11 should bemade, how it should be made or what it should be. The Trustee has no duty to determinewhether a supplemental indenture under Section 11.14 need be entered into or whetherany provisions of any supplemental indenture are correct. The Trustee shall not beaccountable for and makes no representation as to the validity or value of any securitiesor assets issued upon conversion of Securities. The Trustee shall not be responsible forthe Issuers' failure to comply with this Article 11. Each Conversion Agent shall havethe same protection under this Section 11.16 as the Trustee.

    SECTION 11.17.  Simultaneous Adjustments. In theevent that this Article 11 requires adjustments to the Conversion Rate under more than oneof Sections 11.06(4), 11.07 or 11.08, and the record dates for the distributionsgiving rise to such adjustments shall occur on the same date, then such adjustments shallbe made by applying, first, the provisions of Section 11.06, second, the provisionsof Section 11.08 and, third, the provisions of Section 11.07.

    SECTION 11.18.  Successive Adjustments. After anadjustment to the Conversion Rate under this Article 11, any subsequent event requiring anadjustment under this Article 11 shall cause an adjustment to the Conversion Rate as soadjusted.

    SECTION 11.19.  Rights Issued in Respect of CommonStock Issued Upon Conversion. Each share of Common Stock issued upon conversion ofSecurities pursuant to this Article 11 shall be entitled to receive the appropriate numberof common stock or preferred stock purchase rights, as the case may be (the"Rights"), if any, and the certificates representing the Common Stock issuedupon such conversion shall bear such legends, if any, in each case as may be provided bythe terms of any shareholder rights agreement adopted by the Company, as the same may beamended from time to time (in each case, a "Rights Agreement"). Provided thatsuch Rights Agreement requires that each share of Common Stock issued upon conversion ofSecurities at any time prior to the distribution of separate certificates representing theRights be entitled to receive such Rights, then, notwithstanding anything else to thecontrary in this Article 11, there shall not be any adjustment to the Conversion Rate as aresult of the issuance of Rights, the distribution of separate certificates representingthe Rights, the exercise or redemption of such Rights in accordance with any such RightsAgreement, or the termination or invalidation of such Rights.

    SECTION 11.20.  Restriction on Common Stock Issued UponConversion.

    Shares of Common Stock to be issued upon conversion of Securitiesprior to the effectiveness of a Shelf Registration shall be physically delivered incertificated form to the holders converting such Securities and the certificaterepresenting such shares of Common Stock will bear a legend substantially to the followingeffect:

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"These Securities have not been registered under the Securities Act of 1933.  Further offers or sales of these Securities are subject to certain restrictions, as set  forth in the Offering Memorandum dated January 25, 2001 relating to these  Securities."

unless removed in accordance with Section 11.20(b).

    (a) If (i) shares of Common Stock to be issued upon conversion of aSecurity prior to the effectiveness of a Shelf Registration are to be registered in a nameother than that of the holder of such Security or (ii) shares of Common Stock representedby a certificate bearing the above legend are transferred subsequently by such holder,then, unless the Shelf Registration has become effective and such shares are beingtransferred pursuant to the Shelf Registration, the holder must deliver to the transferagent for the Common Stock a certificate in substantially the form of Exhibit F as tocompliance with the restrictions on transfer applicable to such shares of Common Stock andneither the transfer agent nor the registrar for the Common Stock shall be required toregister any transfer of such Common Stock not so accompanied by a properly completedcertificate.

    (b) Except in connection with a Shelf Registration, if certificatesrepresenting shares of Common Stock are issued upon the registration of transfer, exchangeor replacement of any other certificate representing shares of Common Stock bearing theabove legend, or if a request is made to remove such legend from certificates representingshares of Common Stock, the certificates so issued shall bear the above legend, or theabove legend shall not be removed, as the case may be, unless there is delivered to theCompany such satisfactory evidence, which, in the case of a transfer made pursuant to Rule144 under the Securities Act, may include an opinion of counsel licensed to practice inthe State of New York, as may be reasonably required by the Company, that neither thelegend nor the restrictions on transfer set forth therein are required to ensure thattransfers thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S underthe Securities Act or that such shares of Common Stock are securities that are not"restricted" within the meaning of Rule 144 under the Securities Act. Uponprovision to the Company of such reasonably satisfactory evidence, the Company shall causethe transfer agent for the Common Stock to countersign and deliver certificatesrepresenting shares of Common Stock that do not bear the legend.

ARTICLE 12MISCELLANEOUS

    SECTION 12.01.  Trust Indenture Act Controls. Ifany provision of this Indenture limits, qualifies or conflicts with another provisionwhich is required to be included in this Indenture by the Trust Indenture Act, therequired provision shall control.

    SECTION 12.02.  Notices. Any notice orcommunication shall be in writing and delivered in person or mailed by first-class mailaddressed as follows:

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If to the Issuers:

Jones Apparel Group, Inc.  1411 Broadway  New York, New York 10018  Attention: Ira M. Dansky, Esq.

If to the Trustee:

The Bank of New York  101 Barclay Street, Floor 21W  New York, New York 10286  Attention: Corporate Trust Administration

    The Issuers or the Trustee by notice to the other may designateadditional or different addresses for subsequent notices or communications.

    Any notice or communication mailed to a Holder shall be mailed tothe Holder at the Holder's address as it appears on the registration books of theRegistrar and shall be sufficiently given if so mailed within the time prescribed.

    Failure to mail a notice or communication to a Holder or any defectin it shall not affect its sufficiency with respect to other Holders. If a notice orcommunication is mailed in the manner provided above, it is duly given, whether or not theaddressee receives it.

    SECTION 12.03.  Communication by Holders with OtherHolders. Holders may communicate pursuant to Trust Indenture Act Section 312(b)with other Holders with respect to their rights under this Indenture or the Securities.The Issuers, the Trustee, the Registrar and anyone else shall have the protection of TrustIndenture Act Section 312(c).

    SECTION 12.04.  Certificate and Opinion as toConditions Precedent. Upon any request or application by any Issuer to the Trustee totake or refrain from taking any action under this Indenture, such Issuer shall furnish tothe Trustee:

    (1) an Officers' Certificate of such Issuer in form and  substance reasonably satisfactory to the Trustee stating that, in the opinion of the  signers, all conditions precedent, if any, provided for in this Indenture relating to the  proposed action have been complied with; and

    (2) an Opinion of Counsel in form and substance reasonably  satisfactory to the Trustee stating that, in the opinion of such counsel, all such  conditions precedent have been complied with.

    SECTION 12.05.  Statements Required in Certificate orOpinion. Each certificate or opinion with respect to compliance with a covenant orcondition provided for in this Indenture shall include:

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    (1) a statement that the individual making such certificate or  opinion has read such covenant or condition;

    (2) a brief statement as to the nature and scope of the examination  or investigation upon which the statements or opinions contained in such certificate or  opinion are based;

    (3) a statement that, in the opinion of such individual, he has made  such examination or investigation as is necessary to enable him to express an informed  opinion as to whether or not such covenant or condition has been complied with; and

    (4) a statement as to whether or not, in the opinion of such  individual, such covenant or condition has been complied with.

    SECTION 12.06.  When Securities Disregarded. Indetermining whether the Holders of the required Principal Amount at Maturity of Securitieshave concurred in any direction, waiver or consent, Securities owned by any Issuer, or byany Person directly or indirectly controlling or controlled by or under direct or indirectcommon control with any Issuer shall be disregarded and deemed not to be outstanding,except that, for the purpose of determining whether the Trustee shall be protected inrelying on any such direction, waiver or consent, only Securities which the Trustee knowsare so owned shall be so disregarded. Subject to the foregoing, only Securitiesoutstanding at the time shall be considered in any such determination.

    SECTION 12.07.  Rules by Trustee, Paying Agent andRegistrar. The Trustee may make reasonable rules for action by or a meeting ofHolders. The Registrar and the Paying Agent may make reasonable rules for their functions.

    SECTION 12.08.  Legal Holidays. A "LegalHoliday" is a Saturday, Sunday or other day on which banking institutions in New YorkState are authorized or required by law to close. If a payment date is a Legal Holiday,payment shall be made on the next succeeding day that is not a Legal Holiday, and nointerest shall accrue for the intervening period. If a regular record date is a LegalHoliday, the record date shall not be affected.

    SECTION 12.09.  Governing Law. THIS INDENTURE ANDTHE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THESTATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAWTO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIREDTHEREBY.

    SECTION 12.10.  No Recourse Against Others. Adirector, officer, employee or shareholder, as such, of any Issuer shall not have anyliability for any obligations of such Issuer under the Securities or this Indenture or forany claim based on, in respect of or by reason of such obligations or their creation. Byaccepting a Security, each Holder shall waive and release all such liability. The waiverand release shall be part of the consideration for the issuance of the Securities.

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    SECTION 12.11.  Successors. All agreements of eachIssuer in this Indenture and the Securities shall bind its successors. All agreements ofthe Trustee in this Indenture shall bind its successors.

    SECTION 12.12.  Multiple Originals. The parties maysign any number of copies of this Indenture. Each signed copy shall be an original, butall of them together represent the same agreement. One signed copy of the Indenture isenough to prove this Indenture.

    SECTION 12.13.  Table of Contents; Headings. Thetable of contents, cross-reference sheet and headings of the Articles and Sections of thisIndenture have been inserted for convenience of reference only, are not intended to beconsidered a part hereof and shall not modify or restrict any of the terms or provisionshereof.

    SECTION 12.14.  Severability. If any provision inthis Indenture is deemed unenforceable, it shall not affect the validity or enforceabilityof any other provision set forth herein, or of the Indenture as a whole.

[Rest of page intentionally left blank]

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    IN WITNESS WHEREOF, the parties have caused this Indenture to beduly executed as of the date first written above.

JONES APPAREL GROUP, INC.

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

JONES APPAREL GROUP HOLDINGS, INC.

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

JONES APPAREL GROUP USA, INC.

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

NINE WEST GROUP INC.

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

THE BANK OF NEW YORK, as Trustee

By: /s/ Terence Rawlins       Name: Terence Rawlins      Title: Assistant Vice President

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EXHIBIT A

[FORM OF FACE OF SECURITY]

FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE ISSUEPRICE AND AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF PRINCIPALAMOUNT AT MATURITY OF THIS SECURITY ARE $499.60 AND $500.40, RESPECTIVELY, THE ISSUE DATEIS FEBRUARY 1, 2001 AND THE YIELD TO MATURITY IS 3.5%.

[INCLUDE IF SECURITY IS A RESTRICTED SECURITY -- THESE SECURITIES HAVE NOT BEENREGISTERED UNDER THE SECURITIES ACT OF 1933. FURTHER OFFERS OR SALES OF THESE SECURITIESARE SUBJECT TO CERTAIN RESTRICTIONS, AS SET FORTH IN THE OFFERING MEMORANDUM DATED JANUARY25, 2001 RELATING TO THESE SECURITIES.

THE HOLDER OF THIS SECURITY IS SUBJECT TO, AND ENTITLED TO THE BENEFITS OF, AREGISTRATION RIGHTS AGREEMENT, DATED AS OF FEBRUARY 1, 2001, ENTERED INTO BY THE ISSUERSFOR THE BENEFIT OF CERTAIN HOLDERS FROM TIME TO TIME OF SECURITIES.]

[INCLUDE IF SECURITY IS A GLOBAL SECURITY -- THIS SECURITY IS A GLOBAL SECURITY WITHINTHE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF ADEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PARTFOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BEREGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF,EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORYTRUST COMPANY ("DTC"), A NEW YORK CORPORATION, TO THE ISSUERS OR THEIR AGENT FORREGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED INTHE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZEDREPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITYAS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USEHEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTEREDOWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

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JONES APPAREL GROUP, INC.,    JONES APPAREL GROUP HOLDINGS, INC.,    JONES APPAREL GROUP USA, INC., and    NINE WEST GROUP INC.

Zero Coupon Convertible Senior Note Due 2021CUSIP No.  $___________ Principal Amount at MaturityNo. ____Issue Date: February 1, 2001Original Issue Discount: $500.40Issue Price: $499.60    (for each $1,000 Principal Amount at Maturity)(for each $1,000 Principal Amount at Maturity)
    Jones Apparel Group, Inc., a Pennsylvania corporation (the"Company"), Jones Apparel Group Holdings, Inc., a Delaware corporation, JonesApparel Group USA, Inc., a Pennsylvania corporation, and Nine West Group Inc., a Delawarecorporation (herein collectively called the "Issuers", which term includes anysuccessor Person under the Indenture hereinafter referred to), for value received, herebypromise to pay to _____________, or registered assigns, the Principal Amount at Maturityset forth above [INCLUDE IF SECURITY IS A GLOBAL SECURITY -- (which amount may from timeto time be increased or decreased by adjustments made on the records of the Trustee, ascustodian for the Depositary, in accordance with the rules and procedures of theDepositary)] on February 1, 2021.

    This Security shall not bear cash interest except as specified onthe other side of this Security. Original Issue Discount will accrue as specified on theother side of this Security. This Security is convertible as specified on the other sideof this Security.

    Reference is hereby made to the further provisions of this Securityset forth on the reverse hereof, which further provisions shall for all purposes have thesame effect as if set forth at this place.

    Unless the certificate of authentication hereon has been executed bythe Trustee referred to on the reverse hereof by manual signature, this Security shall notbe entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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    IN WITNESS WHEREOF, the Issuers have caused this instrument to beduly executed under its corporate seal.

    Dated:
JONES APPAREL GROUP, INC.
By:     Name:     Title: 
JONES APPAREL GROUP HOLDINGS, INC.

By:     Name:     Title: 
JONES APPAREL GROUP USA, INC.

By:     Name:     Title: 
NINE WEST GROUP INC.

By:     Name:     Title:
THE BANK OF NEW YORK, as Trustee, certifies that this is one of the Securities referredto in the Indenture.

Dated:

By: Authorized Signatory

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[FORM OF REVERSE SIDE OF SECURITY]

This Security is one of a duly authorized issue of Securities of the Issuers designatedas their Zero Coupon Convertible Senior Notes Due 2021, limited in aggregate PrincipalAmount at Maturity to $700,561,000 (subject to increase by up to $105,084,000 in the eventthe Initial Purchasers exercise the over-allotment option granted to them in the PurchaseAgreement) (herein called the "Securities"), issued and to be issued under anIndenture, dated as of February 1, 2001 (herein called the "Indenture"), betweenthe Issuers and The Bank of New York, as Trustee (herein called the "Trustee",which term includes any successor trustee under the Indenture), to which Indenture and allindentures supplemental thereto reference is hereby made for a statement of the respectiverights, limitations of rights, duties and immunities thereunder of the Issuers, theTrustee and the Holders of the Securities and of the terms upon which the Securities are,and are to be, authenticated and delivered.

    This Security shall not bear interest, except as specified herein.Original Issue Discount (the difference between the Issue Price and the Principal Amountat Maturity of the Security), in the period during which a Security remains outstanding,shall accrue at 3.5% per annum, on a semi-annual bond equivalent basis using a 360-dayyear composed of twelve 30-day months, from the Issue Date of this Security.

    Redemption at the Option of the Issuers - No sinking fund isprovided for the Securities. The Securities are redeemable as a whole, or from time totime in part, at any time at the option of the Issuers at a Redemption Price equal to theIssue Price plus the accrued Original Issue Discount through the Redemption Date, providedthat the Securities are not redeemable prior to February 1, 2004.

    The table below shows Redemption Prices of a Security per $1,000Principal Amount at Maturity on the dates shown below and at Stated Maturity, which pricesequal the Issue Price plus accrued Original Issue Discount calculated to each such date.The Redemption Price of a Security redeemed between such dates shall include an additionalamount reflecting the additional Original Issue Discount accrued since the next precedingdate in the table.
**Redemption Date****Issue Price(1)**Accrued     Original Issue     Discount At 3.5%(2)**Redemption        Price (1) + (2)February 1,    2004..........................................................$499.60$54.81$554.41February 1,    2005..........................................................499.6074.38573.98February 1,    2006..........................................................499.6094.65594.25February 1,    2007..........................................................499.60115.63615.23February 1,    2008.......................................................... 499.60137.35636.95February 1,    2009..........................................................499.60159.84659.44February 1,    2010..........................................................499.60183.12682.72February 1,    2011..........................................................499.60207.22706.82February 1,    2012..........................................................499.60232.18731.78
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February 1,    2013.........................................................499.60258.02757.62February 1,    2014.........................................................499.60284.76784.36February 1,    2015.........................................................499.60312.46812.06February 1,    2016.........................................................499.60341.13840.73February 1,    2017.........................................................499.60370.81870.41February 1,    2018.........................................................499.60401.54901.14February 1,    2019.........................................................499.60433.36932.96February 1,    2020.........................................................499.60466.30965.90February 1,    2020.........................................................499.60466.30965.90At stated    maturity.........................................................499.60500.401,000.00
    If converted into a semi-annual cash pay note following theoccurrence of a Tax Event pursuant to Section 10.01 of the Indenture, this Security willbe redeemable at the Restated Principal Amount plus accrued and unpaid interest from thelater of the date of such conversion and the date on which interest was last paid throughthe Redemption Date; but in no event will this Security be redeemable before February 1,2004.

    Purchase of Securities at the Option of the Holder - Subject to theterms and conditions of the Indenture, the Issuers shall become obligated to purchase, atthe option of the Holder, the Securities held by such Holder on the following PurchaseDates and at the following Purchase Prices per $1,000 Principal Amount at Maturity, upondelivery of a Purchase Notice containing the information set forth in the Indenture, atany time from the opening of business on the date that is 30 Business Days prior to suchPurchase Date until the close of business on such Purchase Date and upon delivery of theSecurities to the Paying Agent by the Holder as set forth in the Indenture.
Purchase DatePurchase PriceFebruary 1, 2004$554.41February 1, 2009$659.44February 1, 2014$784.36
     The Purchase Price (equal to the Issue Price plus accrued OriginalIssue Discount to the Purchase Date) may be paid, at the option of the Issuers, in cash orby the issuance and delivery of shares of Common Stock of the Company valued at 95% of theMarket Price (as defined in the Indenture), or in any combination thereof.

    If prior to a Purchase Date this Security has been converted into asemi-annual cash pay note following the occurrence of a Tax Event pursuant to Section10.01 of the Indenture, the Purchase Price will be equal to the Restated Principal Amountplus accrued and unpaid interest from the later of the date of such conversion and thedate on which interest was last paid to the Purchase Date.

    Repurchase of Securities at the Option of the Holder Upon aFundamental Change - At the option of the Holder and subject to the terms and conditionsof the Indenture, the Issuers shall become obligated to repurchase the Securities if aFundamental Change occurs at any time prior 

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to February 1, 2004 for a Fundamental Change Repurchase Price equal to the Issue Priceplus accrued Original Issue Discount to the Fundamental Change Repurchase Date, whichFundamental Change Repurchase Price shall be paid in cash or, at the option of theIssuers, in Common Stock of the Company valued at 95% of the Market Price (as defined inthe Indenture), as long as the Common Stock is then listed on a national securitiesexchange or traded on the Nasdaq Stock Market, or any combination thereof. If prior to aFundamental Change Repurchase Date the Securities have been converted into a semi-annualcash pay note following the occurrence of a Tax Event pursuant to Section 10.01 of theIndenture, the Fundamental Change Repurchase Price shall be equal to the RestatedPrincipal Amount plus accrued and unpaid interest from the later of the date of suchconversion and the date on which interest was last paid to the Fundamental ChangeRepurchase Date.

    Holders have the right to withdraw any Purchase Notice orFundamental Change Repurchase Notice, as the case may be, by delivering to the PayingAgent a written notice of withdrawal in accordance with the provisions of the Indenture.

    If cash and/or securities sufficient to pay the Purchase Price,Redemption Price or Fundamental Change Repurchase Price, as the case may be, of allSecurities (or portions thereof) to be purchased as of the Purchase Date, Redemption Dateor the Fundamental Change Repurchase Date, as the case may be, is deposited with thePaying Agent on the Business Day following the Purchase Date, Redemption Date or theFundamental Change Repurchase Date, as the case may be, Original Issue Discount (orinterest, if the Securities have been converted into semi-annual cash pay notes pursuantto Section 10.01 of the Indenture) ceases to accrue on such Securities (or portionsthereof) immediately after such Purchase Date, Redemption Date or Fundamental ChangeRepurchase Date, as the case may be, whether or not such Securities are delivered to thePaying Agent, and the Holder thereof shall have no other rights as a Holder (other thanthe right to receive the Purchase Price, Redemption Date or Fundamental Change RepurchasePrice, as the case may be, upon surrender of such Security).

    If the Issuers elect to pay all or part of the Purchase Price or theFundamental Change Repurchase Price in Common Stock, the portion of accrued Original IssueDiscount (or interest, if the Securities have been converted into semi-annual cash paynotes pursuant to Section 10.01 of the Indenture), attributable to the period from theIssue Date (or, if the Issuers have exercised their option to convert the Securities intosemi-annual cash pay notes pursuant to Section 10.01 of the Indenture, the later of (x)the date of such exercise, and (y) the date on which interest was last paid) to thePurchase Date or the Fundamental Change Repurchase Date, as the case may be, with respectto the surrendered Security shall not be cancelled, extinguished or forfeited, but rathershall be deemed to be paid in full to the Holder thereof through the delivery of theCommon Stock (together with a cash payment, if any, in lieu of fractional shares) andcash, if any, in exchange for the Security being purchased pursuant to the terms hereof;and such cash, if any, and the fair market value of such shares of Common Stock (togetherwith any such cash payment in lieu of fractional shares) shall be treated as delivered prorata, to the extent thereof, first in exchange for Original Issue Discount (or interest,if the Securities have been converted into semi-annual cash pay notes pursuant to Section10.01 of the Indenture) accrued through the Purchase Date or the Fundamental ChangeRepurchase Date, as the case may be, and the balance, if any, of such cash and the fairmarket value of such Common Stock (and any such 

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cash payment) shall be treated as delivered in exchange for the Issue Price of theSecurity being purchased pursuant to the provisions hereof.

    Conversion - Subject to the next two succeeding sentences, a Holderof a Security may convert it into Common Stock of the Company at any time before the closeof business on February 1, 2021. If the Security is called for redemption, the Holder mayconvert it at any time before the close of business on the Business Day immediatelypreceding the Redemption Date, unless the Issuers default on the payment of the RedemptionPrice. A Security in respect of which a Holder has delivered a Purchase Notice orFundamental Change Repurchase Notice exercising the option of such Holder to require theIssuers to purchase such Security may be converted only if such Purchase Notice orFundamental Change Repurchase Notice is withdrawn in accordance with the terms of theIndenture.

    The initial Conversion Rate is 9.8105 shares of Common Stock per$1,000 Principal Amount at Maturity, subject to adjustment in certain events described inthe Indenture. The Issuers will deliver cash or a check in lieu of any fractional share ofCommon Stock.

    In the event the Issuers exercise their option pursuant toSection 10.01 of the Indenture to have interest in lieu of Original Issue Discountaccrue on the Security following a Tax Event, the Holder will be entitled on conversion toreceive the same number of shares of Common Stock such Holder would have received if theIssuers had not exercised such option. If the Issuers exercise such option, Securitiessurrendered for conversion during the period from the close of business on any RegularRecord Date next preceding any Interest Payment Date to the opening of business on suchInterest Payment Date (except Securities to be redeemed on a date within such period) mustbe accompanied by payment of an amount equal to the interest thereon that the registeredHolder is to receive. Except where Securities surrendered for conversion must beaccompanied by payment as described above, no interest on converted Securities will bepayable by the Issuers on any Interest Payment Date subsequent to the date of conversion.

    To convert a Security, a Holder must (1) complete and manually signthe conversion notice below (or complete and manually sign a facsimile of such notice) anddeliver such notice to the Conversion Agent, (2) surrender the Security to the ConversionAgent for cancellation, (3) furnish appropriate endorsements and transfer documents ifrequired by the Conversion Agent, the Issuers or the Trustee and (4) pay any transfer orsimilar tax, if required.

    A Holder may convert a portion of a Security if the Principal Amountat Maturity of such portion is $1,000 or an integral multiple of $1,000. No payment oradjustment will be made for dividends on the Common Stock except as provided in theIndenture. On conversion of a Security, that portion of accrued Original Issue Discount(or interest, if the Securities have been converted into semi-annual cash pay notespursuant to Section 10.01 of the Indenture) attributable to the period from the Issue Date(or, if the Issuers have exercised the option referred to below in "Tax Event",the later of (x) the date of such exercise and (y) the date on which interest was lastpaid) through the Conversion Date with respect to the converted Security shall not becancelled, extinguished or forfeited, but rather shall be deemed to be paid in full to theHolder thereof through the delivery of the Common Stock (together with the cash payment,if any, in lieu of fractional shares) in exchange for the Security being convertedpursuant to the terms hereof; and the fair market value of such shares of Common Stock(together with any such 

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cash payment in lieu of fractional shares) shall be treated as issued, to the extentthereof, first in exchange for Original Issue Discount (or interest, if the Securitieshave been converted into semi-annual cash pay notes pursuant to Section 10.01 of theIndenture) accrued through the Conversion Date, and the balance, if any, of such fairmarket value of such Common Stock (and any such cash payment) shall be treated as issuedin exchange for the Issue Price of the Security being converted pursuant to the provisionshereof.

    The Conversion Rate will be adjusted as set forth in the Indenturefor dividends or distributions on Common Stock payable in Common Stock or other CapitalStock; subdivisions, combinations or certain reclassifications of Common Stock;distributions to all holders of Common Stock of certain rights to purchase Common Stockfor a period expiring within 60 days at less than the Sale Price at the Time ofDetermination; and certain distributions to such holders of assets or debt securities ofthe Company or certain rights to purchase securities of the Company (excluding certaincash dividends or distributions). However, no adjustment need be made if Holders mayparticipate in the transaction or in certain other cases. The Issuers from time to timemay voluntarily increase the Conversion Rate.

    If the Company is a party to a consolidation, merger or bindingshare exchange or a transfer of all or substantially all of its assets, or upon certaindistributions described in the Indenture, the right to convert a Security into CommonStock may be changed into a right to convert it into securities, cash or other assets ofthe Company or another Person.

    Tax Event - (a)  From and after the date (the "TaxEvent Date") of the occurrence of a Tax Event and the date the Issuers exercise suchoption, whichever is later (the "Option Exercise Date"), at the option of theIssuers, cash interest in lieu of future Original Issue Discount shall accrue at the rateof 3.5% per annum on a principal amount per Security (the "Restated PrincipalAmount") equal to the Issue Price plus Original Issue Discount accrued to the OptionExercise Date and shall be payable semi-annually on February 1 and August 1 of each year(each an "Interest Payment Date") to holders of record at the close of businesson January 16 or July 16 (each a "Regular Record Date") immediately precedingsuch Interest Payment Date. Interest will be computed on the basis of a 360-day yearcomprised of twelve 30-day months and will accrue from the most recent date to whichinterest has been paid or, if no interest has been paid, from the Option Exercise Date.

    (b) Interest on any Security that is payable, and is punctually paidor duly provided for, on any Interest Payment Date shall be paid to the Person in whosename that Security is registered at the close of business on the Regular Record Date forsuch interest at the office or agency of the Company maintained for such purpose. Eachinstallment of interest on any Security shall be paid in same-day funds by transfer to anaccount maintained by the payee located inside the United States, provided that withrespect to any Holder, such Holder shall have furnished to the Paying Agent all requiredwire payment instructions no later than the related Regular Record Date, or if no suchinstructions have been furnished, by check payable to such Holder.

    (c) Except as otherwise specified with respect to the Securities,any Defaulted Interest on any Security shall forthwith cease to be payable to theregistered Holder thereof on 

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the relevant Regular Record Date by virtue of having been such Holder, and suchDefaulted Interest may be paid by the Issuers as provided for in Section 10.04(b) ofthe Indenture.

    [INCLUDE IF SECURITY IS A GLOBAL SECURITY -- In the event of adeposit or withdrawal of an interest in this Security, including an exchange, transfer,repurchase or conversion of this Security in part only, the Trustee, as custodian of theDepositary, shall make an adjustment on its records to reflect such deposit or withdrawalin accordance with the rules and procedures of the Depositary.]

    [INCLUDE IF SECURITY IS A RESTRICTED SECURITY -- Subject to certainlimitations in the Indenture, at any time when the Company is not subject toSection 13 or 15(d) of the United States Securities Exchange Act of 1934, as amended,upon the request of a Holder of a Restricted Security, the Issuers will promptly furnishor cause to be furnished Rule 144A Information (as defined below) to such Holder ofRestricted Securities, or to a prospective purchaser of any such security designated byany such Holder, to the extent required to permit compliance by any such Holder with Rule144A under the Securities Act of 1933, as amended (the "Securities Act")."Rule 144A Information" shall be such information as is specified pursuant toRule 144A(d)(4) under the Securities Act (or any successor provision thereto).]

    If an Event of Default shall occur and be continuing, the IssuePrice (or, if the Securities have been converted to semi-annual cash pay notes pursuant toSection 10.01 of the Indenture, the Restated Principal Amount) plus the Original IssueDiscount (or, if the Securities have been converted to semi-annual cash pay notes pursuantto Section 10.01 of the Indenture, accrued but unpaid interest) accrued through such dateon all the Securities may be declared due and payable in the manner and with the effectprovided in the Indenture.

    The Indenture permits, with certain exceptions as therein provided,the amendment thereof and the modification of the rights and obligations of the Issuersand the rights of the Holders of the Securities under the Indenture at any time by theIssuers and the Trustee with the consent of the Holders of not less than a majority inaggregate Principal Amount at Maturity of the outstanding Securities. The Indenture alsocontains provisions permitting the Holders of specified percentages in aggregate PrincipalAmount at Maturity of the outstanding Securities, on behalf of the Holders of all theSecurities, to waive compliance by the Issuers with certain provisions of the Indentureand certain past defaults under the Indenture and their consequences. Any such consent orwaiver by the Holder of this Security shall be conclusive and binding upon such Holder andupon all future Holders of this Security and of any Security issued upon the registrationof transfer hereof or in exchange herefor or in lieu hereof, whether or not notation ofsuch consent or waiver is made upon this Security.

    As provided in and subject to the provisions of the Indenture, theHolder of this Security shall not have the right to institute any proceeding with respectto the Indenture or for the appointment of a receiver or trustee or for any other remedythereunder, unless such Holder shall have previously given the Trustee written notice of acontinuing Event of Default with respect to the Securities, the Holders of not less than25% in Principal Amount at Maturity of the outstanding Securities shall have made writtenrequest to the Trustee to institute proceedings in respect of such Event of Default asTrustee and offered the Trustee reasonable indemnity, and the Trustee shall not havereceived from the Holders of a majority in Principal Amount at 

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Maturity of outstanding Securities a direction inconsistent with such request, andshall have failed to institute any such proceeding, for 60 days after receipt of suchnotice, request and offer of indemnity. The foregoing shall not apply to any suitinstituted by the Holder of this Security for the enforcement of any payment of saidprincipal hereof or interest hereon on or after the respective due dates expressed herein.

    No reference herein to the Indenture and no provision of thisSecurity or of the Indenture shall alter or impair the obligation of the Issuers, which isabsolute and unconditional, to pay the Principal Amount at Maturity, Restated PrincipalAmount, Redemption Price, Purchase Price or Fundamental Change Repurchase Price of, andinterest, if any, on, this Security at the times, place and rate, and in the coin orcurrency, herein prescribed.

    As provided in the Indenture and subject to certain limitationstherein set forth, the transfer of this Security is registrable in the Security Register,upon surrender of this Security for registration of transfer at the office or agency ofthe Company in The City of New York, duly endorsed by, or accompanied by a writteninstrument of transfer in form satisfactory to the Issuers and the Registrar duly executedby, the Holder hereof or his attorney duly authorized in writing, and thereupon one ormore new Securities, of authorized denominations and for the same aggregate PrincipalAmount at Maturity, will be issued to the designated transferee or transferees.

    The Securities are issuable only in registered form without couponsin denominations of $1,000 Principal Amount at Maturity and any integral multiple of$1,000 Principal Amount at Maturity above that amount. As provided in the Indenture andsubject to certain limitations therein set forth, Securities are exchangeable for a likeaggregate Principal Amount at Maturity of Securities of a different authorizeddenomination, as requested by the Holder surrendering the same.

    No service charge shall be made for any such registration oftransfer or exchange, but the Issuers may require payment of a sum sufficient to cover anytax or other governmental charge payable in connection therewith.

    Prior to due presentment of this Security for registration oftransfer, the Issuers, the Trustee and any agent of the Issuers or the Trustee may treatthe Person in whose name this Security is registered as the owner hereof for all purposes,whether or not this Security be overdue, and neither the Issuers, the Trustee nor any suchagent shall be affected by notice to the contrary.

    All terms used in this Security which are defined in the Indentureshall have the meanings assigned to them in the Indenture.

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**ASSIGNMENT FORM

    If you want to assign this Security, fill in the form below and haveyour signature guaranteed:

    I or we assign and transfer this Security to:
 
  
  
 
(Print or type name, address and zip code and social security or tax ID number ofassignee)

    and irrevocably appoint _____________________________________ agentto transfer this Security on the books of the Issuers. The agent may substitute another toact for him.
Date:                 Signed:                 
(Sign exactly as your name appears on the      other side of this Security) 
Signature      Guarantee:________________________________
    In connection with any transfer of this Security occurring prior tothe date of the declaration by the Commission of the effectiveness of a registrationstatement under the Securities Act of 1933, as amended (the "Securities Act"),covering resales of this Security (which effectiveness shall not have been suspended orterminated at the date of the transfer):

[Check One]

    (1) [ ]     to an Issuer or a Subsidiary of any  of the Issuers; or

    (2) [ ]     pursuant to and in compliance with  Rule 144A under the Securities Act; or

    (3) [ ]     outside the United States to a  "foreign person" in compliance with Rule 904 of Regulation S under the  Securities Act; or

    (4) [ ]     pursuant to the exemption from  registration provided by Rule 144 under the Securities Act; or

    (5) [ ]     pursuant to an effective  registration statement under the Securities Act; or

    (6) [ ]     pursuant to another available  exemption from the registration requirements of the Securities Act.

    Unless one of the boxes is checked, the Trustee will refuse toregister any of the Securities evidenced by this certificate in the name of any Personother than the registered Holder thereof, provided that if box (3), (4) or (6) is checked,the Issuers may require, prior to 

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registering any such transfer of the Securities, in their sole discretion, such legalopinions, certifications (including an investment letter in the case of box (3)) and otherinformation as the Issuers may reasonably request to confirm that such transfer is beingmade pursuant to an exemption from, or in a transaction not subject to, the registrationrequirements of the Securities Act.

    If none of the foregoing boxes is checked, the Trustee or Registrarshall not be obligated to register this Security in the name of any Person other than theHolder hereof unless and until the conditions to any such transfer of registration setforth herein and in Section 3.10 of the Indenture shall have been satisfied.

 
Date:                Signed:                (Sign exactly as your name appears on the other      side of this Security)Signature      Guarantee:________________________________
    

TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED

    The undersigned represents and warrants that it is purchasing thisSecurity for its own account or an account with respect to which it exercises soleinvestment discretion and that it and any such account is a "qualified institutionalbuyer" within the meaning of Rule 144A under the Securities Act and is aware that thesale to it is being made in reliance on Rule 144A and acknowledges that it has receivedsuch information regarding the Issuers as the undersigned has requested pursuant to Rule144A or has determined not to request such information and that it is aware that thetransferor is relying upon the undersigned's foregoing representations in order toclaim the exemption from registration provided by Rule 144A.

 
Date:                Signed:                NOTICE: To be executed by an executive officer.
    

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FORM OF CONVERSION NOTICE

    If you want to convert this Security into Common Stock of theCompany, check the box:

    [ ]

    To convert only part of this Security, state the Principal Amount atMaturity to be converted (which must be $1,000 or an integral multiple of $1,000):

    $__________________________________

    If you want the stock certificate made out in another person'sname, fill in the form below:
 
 
(Insert    other person's social security or tax ID no.)

  
  
 
(Print or    type other person's name, address and zip code)

 
 
Date:                Signed:                (Sign exactly as your name appears on the other      side of this Security)Signature      Guarantee:________________________________
 

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<PAGE> B-1

EXHIBIT B

FORM OF TRANSFER CERTIFICATE FOR TRANSFERFROM GLOBAL SECURITY OR DEFINITIVE SECURITYTO DEFINITIVE SECURITY

(Transfers pursuant to Section 2.13(a)(1) or Section 2.13(a)(2) of the Indenture)

________________, ___

The Bank of New York, as RegistrarThe Bank of New York101 Barclay Street, Floor 21WNew York, New York 10286Attn: Corporate Trust Trustee Administration 

Re:    Transfer of $________ Principal Amount at Maturity of          Zero Coupon Convertible Senior Notes Due2021         (the "Securities") ofJones Apparel Group, Inc.,          Jones Apparel Group USA, Inc., JonesApparel          Group Holdings, Inc. and Nine West GroupInc.          (collectively, the "Issuers")

    Reference is hereby made to the Indenture dated as of February 1,2001 (the "Indenture") between the Issuers and The Bank of New York, as Trustee.Capitalized terms used but not defined herein shall have the meanings given them in theIndenture.

    This letter relates to U.S. $         aggregate Principal Amount at Maturity ofSecurities which are held [in the form of a [Definitive] [Global Security (CUSIP No.                 )]*in the name of [name of transferor] (the "Transferor") to effect the transfer ofSecurities.

    In connection with such request, and in respect of such Securities,the Transferor does hereby certify that such Securities are being transferred inaccordance with (i) the transfer restrictions set forth in the Securities and theIndenture and (ii) to a transferee that the Transferor reasonably believes is aninstitutional "accredited investor" (as defined in Rule 501 (a)(1), (2), (3) or(7) of Regulation D under the U.S. Securities Act of 1933, as amended) (an"Institutional Accredited Investor") which is acquiring such Securities for itsown account or for one or more accounts, each of which is an Institutional AccreditedInvestors, over which it exercises sole investment discretion and (iii) in accordance withapplicable securities laws of any state of the United States.
[Name of Transferor],
By:                                                                              
Name:                                                                         
Title:                                                                            
Dated:                                                                          
 *              Insert, if appropriate.
 

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<PAGE> C-1

EXHIBIT C[FORM OF NON-DISTRIBUTION LETTER FOR INSTITUTIONAL ACCREDITED INVESTORS]

(Transfers pursuant to Section 2.13(a)(1) or Section 2.13(a)(2) of theIndenture)

________________, ___

The Bank of New York, as RegistrarThe Bank of New York101 Barclay Street, Floor 21WNew York, New York 10286Attn: Corporate Trust Trustee Administration 

Re:    Purchase of $________ Principal Amount at Maturity of          Zero Coupon Convertible Senior Notes Due2021         (together with the Common Stock issuableupon          conversion thereof, the "Securities")of Jones          Apparel Group, Inc., Jones Apparel GroupUSA,          Inc., Jones Apparel Group Holdings, Inc.and          Nine West Group Inc. (collectively, the"Issuers")1

Ladies and Gentlemen:

    In connection with our purchase of the Securities we confirm that:

    1. We understand that the Securities are not being and will not beregistered under the Securities Act of 1933, as amended (the "Securities Act"),and are being sold to us in a transaction that is exempt from the registrationrequirements of the Securities Act.

    2. We acknowledge that (a) neither the Issuers, nor the InitialPurchasers (as defined in the Offering Memorandum dated January 25, 2001 relating to theSecurities (the "Offering Memorandum")) nor any person acting on behalfof the Issuers or the Initial Purchasers has made any representation to us with respect tothe Issuers or the offer or sale of any Securities; and (b) any information we desireconcerning the Issuers and the Securities or any other matter relevant to our decision topurchase the Securities (including a copy of the Offering Memorandum) is or has been madeavailable to us.

    3. We have such knowledge and experience in financial and businessmatters as to be capable of evaluating the merits and risks of an investment in theSecurities, and we are (or any account for which we are purchasing under paragraph 4 belowis) an institutional "accredited investor" (within the meaning of Rule501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) able to bear theeconomic risk of investment in the Securities.
   1     Each U.S.    purchaser, or account for which eash U.S. purchsaer is acting, is required to purchase at    least $250,000 Principal Amount at Maturity Securities.
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<PAGE> C-2

    4. We are acquiring the Securities for our own account (or foraccounts as to which we exercise sole investment discretion and have authority to make,and do make, the statements contained in this letter) and not with a view to anydistribution of the Securities, subject, nevertheless, to the understanding that thedisposition of our property will at all times be and remain within our control.

    5. We understand that (a) the Securities will be in registered formonly and that any certificates delivered to us in respect of the Securities will bear alegend substantially to the following effect:

"These Securities have not been registered under the Securities Act of 1933.  Further offers or sales of these Securities are subject to certain restrictions, as set  forth in the Offering Memorandum dated January 25, 2001 relating to these  Securities."

    and (b) the Issuers have agreed to reissue such certificates withoutthe foregoing legend only in the event of a disposition of the Securities in accordancewith the provisions of paragraph 6 below (provided, in the case of a disposition of theSecurities in accordance with paragraph 6(f) below, that the legal opinion referred to insuch paragraph so permits), or at our request at such time as we would be permitted todispose of them in accordance with paragraph 6(a) below.

    6. We agree that in the event that at some future time we wish todispose of any of the Securities, we will not do so unless such disposition is made inaccordance with any applicable securities laws of any state of the United States and:

    (a) the Securities are sold in compliance with Rule 144(k) under the  Securities Act; or

    (b) the Securities are sold in compliance with Rule 144A under the  Securities Act; or

    (c) the Securities are sold in compliance with Rule 904 of  Regulation S under the Securities Act; or

    (d) the Securities are sold pursuant to an effective registration  statement under the Securities Act; or

    (e) the Securities are sold to the Issuers or an affiliate (as  defined in Rule 501(b) of Regulation D) of the Issuers; or

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<PAGE> C-3

    (f) the Securities are disposed of in any other transaction that  does not require registration under the Securities Act, and we theretofore have furnished  to the Issuers or their designee an opinion of counsel experienced in securities law  matters to such effect or such other documentation as the Issuers or their designee may  reasonably request.

Very truly yours,

By ______________________

(Authorized Officer)
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<PAGE> D-1

EXHIBIT D[FORM OF PURCHASE NOTICE]

________________, ___

The Bank of New York, as RegistrarThe Bank of New York101 Barclay Street, Floor 21WNew York, New York 10286Attn: Corporate Trust Trustee Administration

Re:    Purchase of $________ Principal Amount at Maturity of          Zero Coupon Convertible Senior Notes Due2021         (the "Securities") ofJones Apparel Group, Inc.,          Jones Apparel Group USA, Inc., JonesApparel          Group Holdings, Inc. and Nine West GroupInc.          (collectively, the "Issuers")

    This is a Purchase Notice as defined in Section 3.08(a) of theIndenture dated as of February 1, 2001 (the "Indenture") between the Issuers andThe Bank of New York, as Trustee. Terms used but not defined herein shall have themeanings ascribed to them in the Indenture.

Certificate No(s). of Securities: _____________________________

    I intend to deliver the following aggregate Principal Amount atMaturity of Securities for purchase by the Issuers pursuant to Section 3.08(a) of theIndenture (in multiples of $1,000):

$_____________________________

    I hereby agree that the Securities will be purchased as of thePurchase Date pursuant to the terms and conditions thereof and of the Indenture.

    In the event that the Issuers elect, pursuant to Section 3.08(b) ofthe Indenture, to pay the Purchase Price, in whole or in part, in shares of Common Stockbut such portion of the Purchase Price is ultimately payable entirely in cash because anyof the conditions to payment of the Purchase Price in Common Stock is not satisfied priorto the close of business on the Purchase Date, I elect (check one):

[ ] (1) to withdraw this Purchase Notice as to all of the Securities to which it  relates;

[ ] (2) to withdraw this Purchase Notice as to $___________________ Principal Amount at  Maturity of Securities (Certificate No(s). ____________________); or

[ ] (3) to receive cash in respect of the entire Purchase Price for all Securities (or  portions thereof) to which this Purchase Notice relates. 
Signed: ________________________ 
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EXHIBIT E[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]

________________, ___

The Bank of New York, as RegistrarThe Bank of New York101 Barclay Street, Floor 21WNew York, New York 10286Attn: Corporate Trust Trustee Administration 

Jones Apparel Group, Inc.Jones Apparel Group USA, Inc., Jones Apparel Group Holdings, Inc.Nine West Group Inc.250 Rittenhouse CircleBristol, PA 19007

Re:    Purchase of $________ Principal Amount at Maturity of          Zero Coupon Convertible Senior Notes Due2021         (the "Securities") ofJones Apparel Group, Inc.,          Jones Apparel Group USA, Inc., JonesApparel          Group Holdings, Inc. and Nine West GroupInc.          (collectively, the "Issuers")

    This is a Fundamental Change Repurchase Notice as defined in Section3.09 of the Indenture dated as of February 1, 2001 (the "Indenture") between theIssuers and The Bank of New York, as Trustee. Terms used but not defined herein shall havethe meanings ascribed to them in the Indenture.

    Certificate No(s). of Securities: _____________________________

    I intend to deliver the following aggregate Principal Amount atMaturity of Securities for purchase by the Issuers pursuant to Section 3.09 of theIndenture (in multiples of $1,000):

$________________________________

    I hereby agree that the Securities will be purchased as of theFundamental Change Repurchase Date pursuant to the terms and conditions thereof and of theIndenture.

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<PAGE> E-2

    In the event that the Issuers elect, pursuant to Section 3.09(b) ofthe Indenture, to pay the Fundamental Change Repurchase Price, in whole or in part, inshares of Common Stock but such portion of the Fundamental Change Repurchase Price isultimately payable entirely in cash because any of the conditions to payment of theFundamental Change Repurchase Price in Common Stock is not satisfied prior to the close ofbusiness on the Fundamental Change Repurchase Date, I elect (check one):

[ ] (1) to withdraw this Fundamental Change Repurchase Notice as to all of the  Securities to which it ;

[ ] (2) to withdraw this Fundamental Change Repurchase Notice as to  $___________________ Principal Amount at Maturity of Securities (Certificate No(s).  ____________________); or

[ ] (3) to receive cash in respect of the entire Fundamental Change Repurchase Price  for all Securities (or portions thereof) to which this Fundamental Change Repurchase  Notice relates.

Signed: ________________________

 

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EXHIBIT F

FORM OF TRANSFER CERTIFICATE FOR TRANSFEROF RESTRICTED COMMON STOCK

(Transfers pursuant to Section 11.20(b) of the Indenture)

[NAME AND ADDRESS OF COMMON STOCK TRANSFER AGENT]

The Bank of New York, as RegistrarThe Bank of New York101 Barclay Street, Floor 21WNew York, New York 10286Attn: Corporate Trust Trustee Administration 

Jones Apparel Group, Inc.Jones Apparel Group USA, Inc., Jones Apparel Group Holdings, Inc.Nine West Group Inc.250 Rittenhouse CircleBristol, PA 19007

Re:    Common Stock, par value $0.01 per share          (the "Common Stock") of JonesApparel Group, Inc.,          (the "Company")

    Reference is hereby made to the Indenture dated as of February 1,2001 (the "Indenture") between the Company, Jones Apparel Group USA, Inc., JonesApparel Group Holdings, Inc. and Nine West Group Inc. (together with the Company, the"Issuers") and The Bank of New York, as Trustee. Capitalized terms used but notdefined herein shall have the meanings given them in the Indenture.

    This letter relates to shares of Common Stock represented by theaccompanying certificate(s) that were issued upon conversion of Securities and which areheld in the name of [name of transferor] (the "Transferor") to effect thetransfer of such Common Stock.

    In connection with the transfer of such shares of Common Stock, theundersigned confirms that such shares of Common Stock are being transferred:

CHECK ONE BOX BELOW
(1)     to the Company; or(2)pursuant to and in compliance with Regulation S under the Securities Act      of 1933; or
   

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<PAGE> F-2

 
(3) to an institutional "accredited      investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of      1933) that has furnished to the transfer agent a signed letter containing certain      representations and agreements (the form of which letter can be obtained from the Company      or transfer agent); or(4)  pursuant to an exemption from registration under the      Securities Act of 1933 provided by Rule 144 thereunder.
 

    Unless one of the boxes is checked, the transfer agent will refuseto register any of the Common Stock evidenced by this certificate in the name of anyperson other than the registered holder thereof; provided, however, that if box (2), (3)or (4) is checked, the transfer agent may require, prior to registering any such transferof the Common Stock such certifications and other information, and if box (4) is checkedsuch legal opinions, as the Company reasonably requests in writing, by delivery to thetransfer agent of a standing letter of instruction, to confirm that such transfer is beingmade pursuant to an exemption from, or in a transaction not subject to, the registrationrequirements of the Securities Act of 1933.
[Name of Transferor],
By                                                                                              Name:                                                                                        Title:                                                                                           
Dated:

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