TERM NOTE
    
                                                    Philadelphia, Pennsylvania
                                                               October 1, 1997
    
$10,000,000
    
FOR VALUE RECEIVED, and intending to be legally bound hereby, JONES
APPAREL GROUP, INC., a Pennsylvania corporation with offices at 250
Rittenhouse Circle, Bristol, PA 19007 (the "Borrower") unconditionally
promises to pay to the order of FIRST UNION NATIONAL BANK (the "Bank")
the principal sum of Ten Million Dollars ($10,000,000), with interest,
in accordance with the provisions hereinafter set forth.
    
A.   Terms of Note.
     1.   Interest Rate.  Interest will accrue on the outstanding
          principal balance of this Note during each Interest
          Period at a rate per annum (computed on the basis of a 
          360-day year and the actual number of days elapsed)
          equal to the sum of the One Month LIBOR for such
          Interest Period, plus 60 basis points (.6 of 1%).  The
          term "Interest Period" means the calendar month.  The
          term "One Month LIBOR" means the rate for U.S. dollar
          deposits of one month maturity as reported on Telerate
          page 3750 as of 11:00 a.m., London time, on the second
          London business day before the relevant Interest Period
          begins (or if not so reported, then as determined by
          the Bank from another recognized source or interbank
          quotation).

     2.   Payment of Principal and Interest.  This Note shall be
          Paid in one hundred nineteen (119) consecutive monthly
          installments of principal and interest on the first day
          Of each month (or, if not a business day, the next 
          succeeding business day) commencing on November 3,
          1997, in an amount equal to the sum of (i) all accrued
          and unpaid interest on the Note plus (ii) a principal
          payment of $83,333.33, with a final installment of
          principal and interest on the Maturity Date in an
          amount equal to the sum of (i) all accrued and unpaid
          interest on the Note plus (ii) a principal payment of
          $83,333.73.

                                     - 1 -  
<PAGE> 2

     3.   Payment Terms.  All payments made hereunder shall be
          made on the due date thereof, in immediately available
          funds and in lawful currency of the United States of
          America.  All payments made hereunder shall be made to
          the Bank at its offices set forth in this Note or at
          such other address as the Bank shall notify the
          Borrower of in writing.

     4.   Late Charge.  If any payment is not paid in full when
          the same is due, the Borrower shall pay the Bank a fee
          on such unpaid amount equal to five percent (5%) of 
          such amount.

     5.   Default Rate.  At the Bank's option, interest will be
          assessed on any principal which remains unpaid at the
          maturity of this Note, whether by acceleration or
          otherwise, at a rate which is two percent (2%) higher
          than the rate otherwise charged hereunder (the "Default
          Rate") provided that at no time shall the Default Rate 
          exceed the highest rate of interest allowed by law.
          Such Default Rate of interest shall also be charged on
          the amounts owed by the Borrower to the Bank pursuant
          to any judgment entered in favor of Bank with respect
          to this Note.

     6.   Prepayment.  Borrower may, without penalty or premium,
          on any date installments of principal are due, prepay
          the principal amount of this Note in whole or in part,
          any partial prepayment to be made in the sum of 
          $83,333.33 or an integral multiple thereof.  All such
          partial prepayments shall be applied against the 
          installments of principal due under Paragraph A.2 above
          in the inverse order of maturity thereof.

     7.   Security for Note.

          7.1. As security for the payment of all amounts owing
               under this Note, the Borrower will execute and
               deliver to the Bank the Deed of Trust (as
               hereinafter defined) at the time of the
               acquisition of the Project (as hereinafter
               defined).

          7.2  As security for the payment of all amounts owing
               under this Note, the Borrower hereby assigns and
               grants to the Bank a security interest in and to
               the Project Account (as hereinafter defined)
               pursuant to a separate Assignment of Interest in a
               Custodian Account of even date herewith.  Unless
               there has occurred an Event of Default under this
               Note, Borrower may withdraw from the Project
               Account (i) all accrued earnings for any corporate
    
                                     -2-
<PAGE> 3
    
               purpose or use, and (ii) amounts in excess of the
               accrued earnings so long as the funds withdrawn
               are used for the acquisition or construction of
               the Project or the purchase of equipment to be
               installed on the Project; provided, however, that
               until the Deed of Trust is recorded, aggregate
               withdrawals from the Project Account (other than
               withdrawals of accrued earnings) will not exceed
               $500,000.00.  At the time of any permitted
               withdrawal from the Project Account (other than
               withdrawals of accrued earnings), the Chief
               Financial Officer of the Borrower (or his written
               designee) will certify in writing to the Bank that
               the funds withdrawn are for the uses herein 
               permitted.

B.  Certain Definitions.  As used herein, the following terms
shall have the following meanings (additional terms are defined
elsewhere in this Note):

     1.   Affiliate.  The term "Affiliate" means First Union
          Corporation and any of its direct and indirect
          affiliates and subsidiaries.

     2.   Consolidated Net Income.  The term "Consolidated Net
          Income" means, for any period, the net income after
          taxes of the Borrower and its subsidiaries for such
          period, as shown by the consolidated income statement
          of the Borrower and its subsidiaries, calculated in
          accordance with GAAP.

     3.   Consolidated Tangible Net Worth.  The term "Consolidated
          Tangible Net Worth" means, at any time, the sum of
          Stockholders' Equity plus the lesser of the cost of the
          Borrower's treasury stock purchased after June 29,
          1997, or Fifty Million Dollars ($50,000,000), less the
          sum of:

          (a)  Any surplus resulting from any write-up of assets;

          (b)  Goodwill, including any amounts, however
               designated on the consolidated balance sheet of
               the Borrower and its subsidiaries, representing
               the excess of the purchase price paid for assets
               or stock acquired over the value assigned thereto
               on the books of the Borrower and its subsidiaries;

          (c)  Patents, trademarks, trade names and copyrights;

          (d)  Any amount at which shares of capital stock of the
               Borrower or any subsidiary appear as an asset on
               the consolidated balance sheet of the Borrower and
               its subsidiaries;
    
                                     -3-
<PAGE> 4

          (e)  Loans and advances to stockholders, directors,
               officers or employees or to any affiliate of the
               Borrower or any subsidiary; and

          (f)  Deferred expenses

     4.   Funded Debt.  The term "Funded Debt" means any and all
          indebtedness, obligations or liabilities (whether
          matured or unmatured, liquidated or unliquidated,
          direct or indirect, absolute or contingent, or joint or
          several) for or in respect of: W borrowed money, (ii)
          amounts raised under or liabilities in respect of any
          note purchase or acceptance credit facility,(iii)
          reimbursement obligations under any letter of credit,
          currency swap agreement, interest rate swap, cap,
          collar or floor agreement or other interest rate
          management device, (iv) any other transaction
          (including without limitation forward sale or purchase
          agreements, capitalized leases, synthetic leases and
          conditional sales agreements) having the commercial
          effect of a borrowing of money entered into to finance
          its operations or capital requirements (but not
          including trade payables and accrued expenses incurred
          in the ordinary course of business which are not
          represented by a promissory note or other evidence of
          indebtedness), or (v) any guaranty of Funded Debt for
          borrowed money.

     5.   GAAP.  The term "GAAP" means generally accepted
          accounting principles as in effect at the time of
          application to the provisions hereof, consistently
          applied.

     6.   Guarantors.  The term "Guarantors" means, individually
          and collectively, Melru Corp., Jones Investment Company
          Inc., Jones International Ltd., and Jones Holding Corp.

     7.   Guaranties.  The term "Guaranties" means those
          agreements now or hereafter in effect, from the
          Guarantors in favor of the Bank.

     8.   Liabilities.  The term "Liabilities" means any and all
          obligations and indebtedness of every kind and
          description of the Borrower owing to the Bank or to any
          Affiliate, whether under the Loan Documents or not and
          whether such debts or obligations are primary or
          secondary, direct or indirect, absolute or contingent,
          sole, joint or several, secured or unsecured, due or to
          become due, contractual or tortious, arising by 
          operation of law or otherwise, or now or hereafter
          existing, including, without limitation, principal,
    
                                     -4-
<PAGE> 5

          interest, fees, late fees, expenses, attorneys' fees
          and costs.

     9.   Loan Documents.  The term "Loan Documents" means this
          Note, the Deed of Trust, the Guaranties and any and all
          credit accommodations, notes, mortgages, loan
          agreements, other agreements and documents, now or
          hereafter existing, creating, evidencing, guarantying,
          securing or relating to any or all of the Liabilities,
          together with all amendments, modifications, renewals,
          or extensions thereof.

     10.  Deed of Trust.  The term "Deed of Trust" means a Deed
          of Trust and Security Agreement in form and substance
          reasonably acceptable to the Borrower and the Bank to
          be executed and delivered by the Borrower to the Bank
          which, when recorded, will grant to the Bank a first
          lien on and first priority security interest in the
          Project and all equipment to be installed thereon.

     11.  Note.  The term "Note" means this Term Note together
          with all attachments hereto and all amendments and
          modifications hereto in effect from time to time.

     12.  Obligor.  The term "Obligor" means the Borrower and
          each and every maker, endorser, guarantor or surety
          including, without limitation, the Guarantors, of or
          For the Liabilities or any part thereof.

     13.  Maturity Date.  The term "Maturity Date" means
          October 1, 2007.

     14.  Project.  The term "Project" means approximately 47.3
          acres of land in South Hill, Virginia, to be acquired
          by the Borrower and all improvements, including the
          warehouse and distribution center buildings, to be
          constructed thereon.

     15.  Project Account.  The term "Project Account" means the
          Borrower's Money Management Custodian Account at the
          Bank (No. 1556594048) into which the
          loan proceeds of the Note have been deposited.

     16.  Stockholders' Equity.  The term "Stockholders' Equity"
          means, at any time, sum of the following accounts set
          forth in a consolidated balance sheet of the Borrower
          and its subsidiaries, prepared in accordance with GAAP:
          (a) the par or stated value of all outstanding capital
          stock; (b) capital surplus; and (c) retained earnings.

     17.  Total Capital.  The term "Total Capital" means
          Stockholders, Equity plus Funded Debt.
    
                                     -5-
<PAGE> 6

C.   Representations and Warranties. The Borrower represents and
     warrants to the Bank that:

     1.   Use of Proceeds.  The proceeds of the Note will be used
          only for the acquisition or construction of the Project
          or the purchase of equipment installed on the Project.

     2.   Financial Statements.  All financial statements
          heretofore delivered by the Borrower to the Bank are
          true, correct, and complete in all material respects,
          fairly represent the Borrower's and Guarantors'
          financial condition as of the date hereof, and no
          information has been omitted which would make the
          information previously furnished misleading or 
          incorrect in any material respect.  There have been no
          material adverse changes in the Borrower's or
          Guarantors' financial condition or business since the
          date of such statements.

     3.   Suits and Defaults.  There are no actions, suits,
          proceedings, or claims pending or threatened against
          the Borrower or Guarantors or any of their property,
          and the Borrower and Guarantors are not in violation of
          any applicable order, law, rule or regulation, which
          would have material adverse effect on the Borrower's or
          Guarantors' business.  The Borrower and Guarantors are
          not in default under any agreement to which the 
          Borrower or the Guarantors are a party or by which the
          Borrower or the Guarantors or any of their property is
          bound, or under any instrument evidencing any 
          indebtedness of the Borrower or Guarantors, and neither
          the Borrower's nor Guarantors' execution of or
          performance under the Loan Documents will create a
          default or any lien or encumbrance under any such
          agreement or instrument other than a lien or 
          encumbrance in favor of the Bank.

D.   Affirmative Covenants.  The Borrower covenants and agrees
that so long as there are any outstanding amounts due under this
Note, the Borrower shall:

     1.   Financial Reporting.  Promptly deliver to the Bank (but
          in no event later than thirty (30) days after they are
          filed) all  regular and periodic reports including, but
          not limited to, Forms 10-K, 10-Q and 8-K filed by the
          Borrower with the U.S. Securities and Exchange
          Commission, or its successor.  If the Borrower ceases to
          be subject to the reporting requirements under the
          Securities Exchange Act of 1934, the Borrower will
          deliver to the Bank audited annual consolidated 
          financial statements within ninety (90) days of the end
          of each year and unaudited quarterly consolidated
    
                                     -6-
<PAGE> 7

          financial statements within forty-five (45) days of the
          end of each of the first three fiscal quarters 
          certified as accurate by the Borrower's Chief Financial
          Officer, such financial statements to be prepared in
          accordance with GAAP in form reasonably acceptable to
          the Bank.

     2.   Project Account.  Maintain and operate the Project
          Account in accordance with Paragraph A.7.2 hereof.

     3.   Notice of Certain Events.  Promptly give written notice
          to the Bank of: (i) the occurrence of any event which
          alone or with notice, the passage of time, or both,
          would constitute an Event of Default; and (ii) the
          commencement of any proceeding or litigation which, if
          adversely determined, would materially and adversely
          affect its financial condition or ability to conduct
          its business.

     4.  Consolidated Tangible Net Worth.  Maintain Consolidated
         Tangible Net Worth, measured at the end of each fiscal
         quarter, of Three Hundred Twenty-Five Million Dollars
         ($325,000,000) plus fifty percent (50%) of Consolidated
         Net Income for each of the fiscal quarters after
         December 31, 1996, with no deduction for any quarterly
         losses.

     5.  Additional Affirmative Covenants.  Shall perform any
         other affirmative covenants set forth in the Loan
         Documents to which the Borrower is a party.

     6.  Covenant Compliance Certificate.  Within ninety (90)
         days after the end each fiscal year, deliver to the
         Bank a covenant compliance certificate in form
         acceptable to the Bank indicating with specificity the
         compliance or non-compliance with each of the
         affirmative and negative covenants in the Loan
         Documents.

E.   Negative Covenants.  So long as any amounts due under this
     Note are outstanding, the Borrower shall not, without the
     prior written consent of the Bank:

     1.   Funded Debt.  Permit the ratio of its Funded Debt
          divided by its Total Capital to exceed forty-five
          percent (45%).

     2.   Additional Negative Covenants.  Undertake any
          activities prohibited by any negative covenant set
          forth in the Loan Documents to which the Borrower is a
          party.
    
                                     -7-
<PAGE> 8    

F.   Event of Default.  The occurrence of any one of the
following shall-constitute an Event of Default under this
Note:

     1.   Nonpayment.  Failure to pay any principal or interest
          payment when due under the Liabilities and such failure
          shall continue for a period of three (3) days;

     2.   Breach.  A breach by any obligor of any term,
          obligation, provision, covenant, representation or
          warranty, arising under (i) this Note, or any other
          Loan Document; (ii) any present or future agreement
          with or in favor of the Bank and/or any Affiliate,
          including the failure to make any payment when due; or
          (iii) any present or future agreement or instrument for
          borrowed money or other financial accommodations with
          any person or entity, which breach is not cured or
          satisfied within ten (10)days;

     3.   Bankruptcy; Insolvency.  (i) Any obligor commences any
          bankruptcy, reorganization, debt arrangement, or other
          case or proceeding under the United States Bankruptcy
          Code or under any similar foreign, federal, state, or
          local statute, or any dissolution or liquidation
          proceeding, or makes a general assignment for the
          benefit of creditors, or takes any action for the
          purpose of effecting any of the foregoing; (ii) Any
          bankruptcy, reorganization, debt arrangement, or other
          case or proceeding under the United States Bankruptcy
          Code or under any similar foreign, federal, state or
          local statute, or any dissolution or liquidation
          proceeding, is involuntarily commenced against or in
          respect of any Obligor or an order for relief is
          entered in any such proceeding; (iii) The appointment,
          or the filing of a petition seeking the appointment, of
          a custodian, receiver, trustee, or liquidator for any
          Obligor or any of its property, or the taking of
          possession of any part of the property of any Obligor
          at the instance of any governmental authority; or (iv)
          Any Obligor becomes insolvent (however defined), is
          generally not paying its debts as they become due, or
          has suspended transaction of its usual business;

     4.   Material Misstatement.  Any statement, representation or
          warranty made in or pursuant to this Note or any
          other Loan Document or to induce the Bank to enter into
          this Note shall prove to be untrue or misleading in any
          material respect;

     5.   Transfer of Assets.  Any Obligor transfers or sells all
          or substantially all of its assets, without the prior
 
                                     -8-
<PAGE> 9

          written consent of the Bank, which consent shall not be
          unreasonably withheld.

G.   Remedies.

     1.   Acceleration of Liabilities; Rights of Bank.  Upon the
          occurrence of an Event of Default described in Section
          F hereof (other than any Event of Default described in
          Paragraph F.3), at the Bank's sole option, the Bank's
          commitment, if any, to make any further advances or
          loans to the Borrower under any Loan Document shall
          terminate and the Loan and all other Liabilities shall
          immediately become due and payable in full, all without
          protest, presentment, demand or further notice of any
          kind to the Borrower or any other Obligor, all of which
          are expressly waived.  Upon the occurrence of an Event
          of Default described in Paragraph F.3 hereof,
          immediately and automatically, the Bank's commitment,
          if any, to make any further advances or loans to the
          Borrower under any Loan Document, shall terminate, and
          the Loan and all other Liabilities shall immediately
          become due and payable in full, all without protest,
          presentment, demand or further notice of any kind to
          the Borrower or any other obligor, all of which are
          expressly waived.  Upon and following an Event of
          Default, the Bank, at its option, may exercise any and
          all rights and remedies it has under this Note, the
          other Loan Documents and under applicable law,
          including, without limitation, the right to charge and
          collect interest on the principal portion of the
          Liabilities at the Default Rate, which rate shall, at
          the Bank's option, apply upon and after an Event of
          Default, maturity, whether by acceleration or
          otherwise, and the entry of judgment with respect to
          any or all of the Liabilities.  Upon and following an
          Event of Default hereunder, the Bank may proceed to
          protect and enforce the Bank's rights under any Loan
          Document and/or under applicable law by action at law,
          in equity, or other appropriate proceeding, including,
          without limitation, an action for specific performance
          to enforce or aid in the enforcement of any provision
          contained herein or in any other Loan Document.

     2.   Right of Set-off.  If any of the Liabilities shall be
          due and payable and whether or not the Bank shall have
          made any demand under this Note and regardless of the
          adequacy of any collateral for the Liabilities or other
          means of obtaining repayment of the Liabilities, the
          Bank shall have the right, without notice to the
          Borrower or to any other Obligor, and is specifically
          authorized hereby to set-off against and apply to the
          then unpaid balance of the Liabilities any items or

                                     -9-
<PAGE> 10

          funds of the Borrower and/or any Obligor held by the
          Bank or any Affiliate, any and all deposits (whether
          general or special, time or demand, matured or
          unmatured) or any other property of the Borrower and/or
          any Obligor, including, without limitation, securities
          and/or certificates of deposit, now or hereafter
          maintained by the Borrower and/or any Obligor for its
          or their own account with the Bank or any Affiliate,
          and any other indebtedness at any time held or owing by
          the Bank or any Affiliate to or for the credit or the
          account of the Borrower and/or any Obligor, even if
          effecting such set-off results in a loss or reduction
          of interest or the imposition of a penalty applicable
          to the early withdrawal of time deposits.  For such
          purpose, the Bank shall have, and the Borrower hereby
          grants to the Bank, a first lien on and security
          interest in such deposits, property, funds and accounts
          and the proceeds thereof.  The Borrower further
          authorizes any Affiliate, upon and following the
          occurrence of an Event of Default, at the request of
          the Bank, and without notice to the Borrower, to turn
          over to the Bank any property of the Borrower,
          including, without limitation, funds and securities
          held by the Affiliate for the Borrower's account, and
          to debit any deposit account maintained by the Borrower
          with such Affiliate (even if such deposit account is
          not then due or there results a loss or reduction of
          interest or the imposition of a penalty in accordance
          with law applicable to the early withdrawal of time
          deposits), in the amount requested by the Bank up to
          the amount of the Liabilities, and to pay or transfer
          such amount or property to the Bank for application to
          the Liabilities.

     3.   Remedies Cumulative; No Waiver.  The rights, powers and
          remedies hereunder and under the other Loan Documents
          are cumulative and concurrent, and are not exclusive of
          any other rights, powers or remedies available to the
          Bank.  No failure or delay on the part of the Bank in
          the exercise of any right, power or remedy shall
          operate as a waiver thereof, nor shall any single or
          partial exercise of any right, power or remedy preclude
          any other or further exercise thereof, or the exercise
          of any other right, power or remedy.

     4.   Continuing Enforcement of the Loan Documents.  If,
          after receipt of any payment of all or any part of the
          Note or the Liabilities, the Bank is compelled or
          agrees, for settlement purposes, to surrender such
          payment to any person or entity for any reason, then
          this Note and the other Loan Documents shall continue
          in full force and effect or be reinstated, as the case

                                     -10-
<PAGE> 11

          may be.  The provisions of this Paragraph shall survive
          the termination of this Note and the other Loan
          Documents and shall be and remain effective
          notwithstanding the payment of the Liabilities, the
          cancellation of the Note, the release of any security
          interest, lien or encumbrance securing the Liabilities
          or any other action which the Bank may have taken in
          reliance upon its receipt of such payment.

H.   Miscellaneous.

     1.   Waiver of Demand.  The Borrower (i) waives presentment,
          notice of dishonor and protest of this Note; (ii)
          consents to any and all extensions of time, renewals,
          waivers, or modifications that may be granted by the
          Bank with respect to the payment or other provisions
          of this Note; and (iii) agrees that makers, endorsers,
          guarantors, including but not limited to the
          Guarantors, and sureties for the indebtedness evidenced
          hereby may be added or released without notice to the
          Borrower and without affecting the Borrower's liability
          hereunder.  The liability of the Borrower hereunder
          shall be absolute and unconditional.

     2.   Notices.  Notices and communications under this Note
          shall be in writing and shall be given by either (i)
          hand-delivery, (ii) first class mail (postage prepaid),
          or (iii) reliable overnight commercial courier (charges
          prepaid) to the addresses listed in this Note.  Notice
          shall be deemed to have been given and received (a) if
          by hand delivery, upon delivery, (b) if by mail, three
          (3) calendar days after the date first deposited in the
          United States mail, and (c) if by overnight courier, on
          the date scheduled for delivery.  A party may change
          its address by giving written notice to the other party
          as specified herein.

     3.   Costs and Expenses.  The Borrower shall promptly pay
          (or reimburse, as the Bank may elect) all costs and 
          expenses which the Bank may hereafter incur after the
          occurrence of an Event of Default in connection with
          the enforcement of this Note and the other Loan
          Documents, the collection of all amounts due under this
          Note and the other Loan Documents.  The Borrower's
          reimbursement obligations under this Paragraph shall
          survive any termination of this Note or any other Loan
          Document.

     4.   Payment Due on a Day Other than a Business Day.  If any
          payment due or action to be taken under this Note or
          any other Loan Document falls due or is required to be
          taken on a day that the Bank is not open for business,

                                     -11-
<PAGE> 12

          such payment or action shall be made or taken on the
          next succeeding day when   the Bank is open for business
          and such extended time shall be included in the
          computation of interest.

     5.   Governing Law.  This Note shall be construed in
          accordance with and governed by the substantive laws of
          the Commonwealth of Pennsylvania without reference to
          conflict of laws principles.

     6.   Integration; Amendment.  This Note and the other Loan
          Documents constitute the sole agreement of the parties
          with respect to the subject matter hereof and thereof
          and supersede all oral negotiations and prior writings
          with respect to the subject matter hereof and thereof.
          No amendment of this Note, and no waiver of any one or
          more of the provisions hereof shall be effective unless
          set forth in writing and signed by the parties hereto.

     7.   Successors and Assigns.  This Note (i) shall be binding
          upon the Borrower and the Bank and, where applicable,
          their respective heirs, executors, administrators,
          successors and permitted assigns, and (ii) shall inure
          to the benefit of the Borrower and the Bank and, where
          applicable, their respective heirs, executors,
          administrators, successors and permitted assigns;
          provided, however, that the Borrower may not assign its
          rights or obligations hereunder or any interest herein
          without the prior written consent of the Bank, and any
          such assignment or attempted assignment by the Borrower
          shall be void and of no effect with respect to the
          Bank.  The Bank may from time to time sell or assign,
          in whole or in part, or grant participations in the
          Loan and/or the Note and/or the obligations evidenced
          thereby.  The Borrower authorizes the Bank to provide
          information concerning the Borrower to any prospective
          purchaser, assignee or participant in compliance with
          the banks internal confidentiality procedures.

     8.   Severability and Consistency.  The illegality,
          unenforceability or inconsistency of any provision of
          this Note or any instrument or agreement required
          hereunder shall not in any way affect or impair the
          legality, enforceability or consistency of the
          remaining provisions of this Note or any instrument or
          agreement required hereunder.  The Loan Documents are
          intended to be consistent.  However, in the event of
          any inconsistencies among any of the Loan Documents,
          such inconsistency shall not affect the validity or
          enforceability of any Loan Document.  The Borrower
          agrees that in the event of any inconsistency or
          ambiguity in any of the Loan Documents, the Loan

                                     -12-
<PAGE> 13

          Documents shall not be construed against any one party
          but shall be interpreted consistent with the Bank's
          policies and procedures

     9.   Consent to Jurisdiction and Service of Process.  The
          Borrower hereby consents and agrees that (i) any action
          or proceeding against it may be commenced and 
          maintained in any court within the Commonwealth of
          Pennsylvania or in the United States District Court for
          any District of Pennsylvania by service of process on
          it and (ii) the courts of the Commonwealth of 
          Pennsylvania and the United States District Court for
          any District of Pennsylvania shall have Jurisdiction
          with respect to the subject matter hereof and the
          person of the Borrower and all collateral for the
          Liabilities.  The Borrower agrees that any action
          brought by the Borrower shall be commenced and
          maintained only in a court in the federal judicial
          district or county in which the Bank has its principal
          place of business in Pennsylvania.

     10.  Judicial Proceeding; Waivers.
 
          THE BORROWER AND THE BANK ACKNOWLEDGE AND AGREE THAT
          (i) ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR
          COUNTERCLAIM, BROUGHT OR INSTITUTED BY THE BANK OR THE
          BORROWER OR ANY SUCCESSOR OR ASSIGN OF THE BANK OR THE
          BORROWER, ON OR WITH RESPECT TO THIS NOTE OR ANY OTHER
          LOAN DOCUMENT OR THE DEALINGS OF THE PARTIES WITH
          RESPECT HERETO, OR THERETO, SHALL BE TRIED ONLY BY A
          COURT AND NOT BY A JURY AND EACH PARTY WAIVES THE RIGHT
          TO TRIAL BY JURY; (ii) EACH WAIVES ANY RIGHT IT MAY
          HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR
          PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR
          CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
          ADDITION TO, ACTUAL DAMAGES; AND (iii) THIS SECTION IS
          A SPECIFIC AND MATERIAL ASPECT OF THIS NOTE AND THAT
          THE BANK WOULD NOT EXTEND CREDIT TO THE BORROWER IF THE
          WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF
          THIS NOTE.

     11.  Arbitration.  Upon demand of any party hereto, whether
          made before or after institution of any judicial
          proceeding, any dispute, claim or controversy arising
          out of, connected with or relating to this Note and
          other Loan Documents ("Disputes") between or among
          parties to this Note shall be resolved by binding
          arbitration as provided herein.  Institution of a
          judicial proceeding by a party does not waive the right
          of that party to demand arbitration hereunder.
          Disputes may include, without limitation, tort claims,
          counterclaims, disputes as to whether a matter is

                                     -13-
<PAGE> 14

          subject to arbitration, claims brought as class
          actions, claims arising from Loan Documents executed in
          the future, or claims arising out of or connected with
          the transaction reflected by this Note.
               Arbitration shall be conducted under and governed
          by the Commercial Financial Disputes Arbitration Rules
          (the "Arbitration Rules") of the American Arbitration
          Association (the "AAA") and Title 9 of the U.S. Code.
          All arbitration hearings shall be conducted in the city
          in which the office of Bank first stated above is
          located.  The expedited procedures set forth in Rule 51
          et seq. of the Arbitration Rules shall be applicable to
          claims of less than $1,000,000.  All applicable
          statutes of limitation shall apply to any Dispute.  A
          judgment upon the award may be entered in any court
          having jurisdiction.  The panel from which all
          arbitrators are selected shall be comprised of licensed
          attorneys.  The single arbitrator selected for
          expedited procedure shall be a retired judge from the
          highest court of general jurisdiction, state or
          federal, of the state where the hearing will be
          conducted or if such person is not available to serve,
          the single arbitrator may be a licensed attorney.
          Notwithstanding the foregoing, this arbitration
          provision does not apply to disputes under or related
          to swap agreements.
               Notwithstanding the preceding binding arbitration
          provisions, the Bank and the Borrower agree to
          preserve, without diminution, certain remedies that any
          party hereto may employ or exercise freely,
          independently or in connection with an arbitration
          proceeding or after an arbitration action is brought.
          The Bank and the Borrower shall have the right to
          proceed in any court of proper jurisdiction or by self-
          help to exercise or prosecute the following remedies,
          as applicable: (i) all rights to foreclose against any
          real or personal property or other security by
          exercising a power of sale granted under Loan Documents
          or under applicable law or by judicial foreclosure and
          sale, including a proceeding to confirm the sale; (ii)
          all rights of self-help including peaceful occupation
          of real property and collection of rents, set-off, and
          peaceful possession of personal property; (iii)
          obtaining provisional or ancillary remedies including
          injunctive relief, sequestration, garnishment,
          attachment, appointment of receiver and filing an
          involuntary bankruptcy proceeding; and (iv) when
          applicable, a judgment by confession of judgment.
          Preservation of these remedies does not limit the power
          of an arbitrator to grant similar remedies that may be
          requested by a party in a Dispute.
    
                                     -14-
<PAGE> 15

               The Borrower and the Bank agree that they shall
          not have a remedy of punitive or exemplary damages
          against the other in any Dispute and hereby waive any
          right or claim to punitive or exemplary damages they
          have now or which may arise in the future in connection
          with any Dispute whether the Dispute is resolved by
          arbitration or judicially.

     IN WITNESS WHEREOF, the Borrower has executed and delivered
to the Bank this Note as of the day and year first above written.
    

    ATTEST                        JONES APPAREL GROUP, INC.

                                  BY: /s/ Gary R. Klocek
    Name:                         Name: Gary R. Klocek
    Title:                        Title: Corporate Controller
    
    FIRST UNION NATIONAL BANK
    Address:  123 South Broad Street
              Philadelphia, PA 19109-1199
    
                                     -15-
<PAGE> 16


FIRST UNION
    
                            UNCONDITIONAL GUARANTY
    
                                                          October 1, 1997
    
Jones Apparel Group, Inc.
250 Rittenhouse Circle
Bristol, Pennsylvania 19007
(individually and collectively "Borrower")
    
Melru Corp.; Jones Investment Company, Inc.; Jones International, Ltd.; and
 Jones Holding Corp.
250 Rittenhouse Circle
Bristol, Pennsylvania 19007
(Individually and collectively "Guarantor")
    
First Union National Bank
123 South Broad Street
Philadelphia, Pennsylvania 19109
(Hereinafter referred to as "Bank")
    
To induce Bank to make, extend or renew loans, advances, credit, or other 
financial accommodations to or for the benefit of Borrower, and in 
consideration of loans, advances, credit, or other financial accommodations
made, extended or renewed to or for the benefit of Borrower, Guarantor hereby
absolutely, irrevocably and unconditionally guarantees to Bank and its 
successors, assigns and affiliates the timely payment and performance of all
liabilities and obligations of Borrower to Bank and its affiliates, including, 
but not limited to, all obligations under any notes, loan agreements, security
agreements, letters of credit, swap agreements (as defined in 11 U.S. Code 
Sec. 101), instruments, accounts receivable, contracts, drafts, leases, chattel
paper, indemnities, acceptances, repurchase agreements, overdrafts, and the
Loan Documents defined below, however and whenever incurred or evidenced, 
whether primary, secondary, direct, indirect, absolute, contingent, due or to
become due, now existing or hereafter contracted or acquired, and all 
modifications, extensions or renewals thereof, including without limitation
all principal, interest, charges, and costs and expenses incurred thereunder
(including attorneys' fees and other costs of collection incurred, regardless
of whether suit is commenced) (collectively, the "Guaranteed Obligations").
    
Guarantor further covenants and agrees:
    
GUARANTOR'S LIABILITY.  This Guaranty is a continuing and unconditional 
guaranty of payment and performance and not of collection.  The parties to 
this Guaranty are jointly and severally obligated hereunder.  This Guaranty 
does not impose any obligation on Bank to extend or continue to extend credit
or otherwise deal with Borrower at any subsequent time.  This Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment of the Guaranteed Obligations is rescinded, avoided or for any 
other reason must be returned by Bank, and the returned payment shall remain
payable as part of the Guaranteed Obligations, all as though such payment had
not been made.  Except to the extent the provisions of this Guaranty give the
Bank additional rights, this Guaranty shall not be deemed to supersede or 
replace any other guaranties given to Bank by Guarantor; and the obligations
guaranteed hereby shall be in addition to any other obligations guaranteed by
Guarantor pursuant to any other agreement of guaranty given to Bank and other
guaranties of the Guaranteed Obligations.

                                     -16-
<PAGE> 17

TERMINATION OF GUARANTY.  Guarantor may terminate this Guaranty by written 
notice, delivered personally to or received by certified or registered United
States Mail by an authorized officer of the Bank at the address for notices 
provided herein.  Such termination shall be effective with respect to 
Guaranteed Obligations arising more than 15 days after the date such written
notice is received by said Bank officer.  Guarantor may not terminate this 
Guaranty as to Guaranteed Obligations (including any subsequent extensions, 
modifications or compromises of the Guaranteed Obligations) then existing, or
to Guaranteed Obligations arising subsequent to receipt by Bank of said notice
if such Guaranteed Obligations are a result of Bank's obligation to make 
advances pursuant to a commitment entered into prior to expiration of the 15 
day notice period, or are a result of advances which are necessary for Bank to 
protect its collateral or otherwise preserve its interests.  Termination of this
Guaranty by any single Guarantor will not affect the existing and continuing 
obligations of any other guarantor hereunder. 
    
APPLICATION OF PAYMENTS, BANK LIEN AND SET-OFF.  Monies received from any source
by Bank for application toward payment of the Guaranteed Obligations may be 
applied to such Guaranteed Obligations in any manner or order deemed 
appropriate by Bank.  Except as prohibited by law, Guarantor grants Bank a 
security interest in all of Guarantor's accounts maintained with Bank and any
of its affiliates (collectively, the "Accounts").  If a Default occurs, Bank is
authorized to exercise its right of set-off or to foreclose its lien against any
obligation of Bank to Guarantor including, without limitation, all Accounts or 
any other debt of any maturity, without notice.

CONSENT TO MODIFICATIONS.  Guarantor consents and agrees that Bank may from time
to time, in its sole discretion, without affecting, impairing, lessening or 
releasing the obligations of the Guarantor hereunder: (a) extend or modify the
time, manner, place or terms of payment or performance and/or otherwise change
or modify the credit terms of the Guaranteed Obligations; (b) increase, renew,
or enter into a novation of the Guaranteed Obligations; (c) waive or consent to
the departure from terms of the Guaranteed Obligations; (d)permit any change in
the business or other dealings and relations of Borrower or any other guarantor
with Bank; (e) proceed against, exchange, release, realize upon, or otherwise 
deal with in any manner any collateral that is or may be held by Bank in 
connection with the Guaranteed Obligations or any liabilities or obligations
of Guarantor; and (f) proceed against, settle, release, or compromise with
Borrower, any insurance carrier, or any other person or entity liable as to 
any part of the Guaranteed Obligations, and/or subordinate the payment of any
part of the Guaranteed Obligations to the payment of any other obligations, 
which may at any time be due or owing to Bank; all in such manner and upon 
such terms as Bank may deem appropriate, and without notice to or further 
consent from Guarantor.  No invalidity, irregularity, discharge or 
unenforceability of, or action or omission by Bank relating to any part of,
the Guaranteed Obligations or any security therefor shall affect or impair this
Guaranty.

WAIVERS AND ACKNOWLEDGMENTS.  Guarantor waives and releases the following 
rights, demands, and defenses Guarantor may have with respect to Bank and 
collection of the Guaranteed Obligations: (a) promptness and diligence in 
collection of any of the Guaranteed Obligations from Borrower or any other 
person liable thereon, and in foreclosure of any security interest and sale
of any property serving as collateral for the Guaranteed Obligations; (b) any
law or statute that requires that Bank make demand upon, assert claims against,
or collect from Borrower or other persons or entities, foreclose any security 
interest, sell collateral, exhaust any remedies, or take any other action 
against Borrower or other persons or entities prior to making demand upon,
collecting from or taking action against Guarantor with respect to the 
Guaranteed Obligations, including any such rights Guarantor might otherwise 
have had under Va. Code Sec. 49-25 and 49-26, et seq., N.C.G.S. Secs. 26-7, et
seq., Tenn. Code Ann. Sec. 47-12-101, O.C.G.A. 10-7-24 (and any successor 
statute) and any other applicable law; (c) any law or statute that requires 
that Borrower or any 

                                     -17-
<PAGE> 18

other person be joined in, notified of or made part of any action against 
Guarantor; (d) that Bank preserve, insure or perfect any security interest 
in collateral or sell or dispose of collateral in a particular manner or at 
a particular time; (e) notice of extensions, modifications, renewals, or 
novations of the Guaranteed Obligations, of any new transactions or other 
relationships between Bank, Borrower and/or any guarantor, and of changes in
the financial condition of, ownership of, or business structure of Borrower 
or any other guarantor; (f) presentment, protest, notice of dishonor, notice 
of default, demand for payment, notice of intention to accelerate maturity, 
notice of acceleration of maturity, notice of sale, and all other notices of
any kind whatsoever; (g) the right to assert against Bank any defense (legal or
equitable), set-off, counterclaim, or claim that Guarantor may have at any time
against Borrower or any other party liable to Bank; (h) all defenses relating
to invalidity, insufficiency, unenforceability, enforcement, release or 
impairment of Bank's lien on any collateral, of the Loan Documents, or of 
any other guaranties held by Bank; (i) any claim or defense that acceleration
of maturity of the Guaranteed Obligations is stayed against Guarantor because
of the stay of assertion or of acceleration of claims against any other 
person or entity for any reason including the bankruptcy or insolvency of 
that person or entity; and (j) the benefit of any exemption claimed by 
Guarantor.  Guarantor acknowledges and represents that it has relied upon 
its own due diligence in making its own independent appraisal of Borrower, 
Borrower's business affairs and financial condition, and any collateral; 
Guarantor will continue to be responsible for making its own independent 
appraisal of such matters; and Guarantor has not relied upon and will not 
hereafter rely upon Bank for information regarding Borrower or any collateral.

FINANCIAL CONDITION.  Guarantor warrants, represents and covenants to Bank that
on and after the date hereof: (a) the fair saleable value of Guarantor's assets
exceeds its liabilities, Guarantor is meeting its current liabilities as they 
mature, and Guarantor is and shall remain solvent; (b) all financial statements
of Guarantor furnished to Bank are correct and accurately reflect the financial
condition of Guarantor as of the respective dates thereof; (c) since the date of
such financial statements, there has not occurred a material adverse change in 
the financial condition of Guarantor; (d) there are not now pending any court or
administrative proceedings or undischarged judgments against Guarantor, no 
federal or state tax liens have been filed or threatened against Guarantor, 
and Guarantor is not in default or claimed default under any agreement; and 
(e) at such reasonable times as Bank requests, Guarantor will furnish Bank with
such other financial information as Bank may reasonably request.

INTEREST.  Regardless of any other provision of this Guaranty or other Loan 
Documents, if for any reason the effective interest on any of the Guaranteed 
Obligations should exceed the maximum lawful interest, the effective interest
shall be deemed reduced to and shall be such maximum lawful interest, and any
sums of interest which have been collected in excess of such maximum lawful 
interest shall be applied as a credit against the unpaid principal balance of 
the Guaranteed Obligations.

DEFAULT.  If any of the following events occur, a default ("Default") under 
this Guaranty shall exist: (a) Failure of timely payment or performance of the 
Guaranteed Obligations or a default under any Loan Document; (b) A breach of any
agreement or representation contained or referred to in the Guaranty, or any of 
the Loan Documents, or contained in any other contract or agreement of 
Guarantor with Bank or its affiliates, whether now existing or hereafter 
arising; (c) The death of, appointment of a guardian for, dissolution of, 
termination of existence of, loss of good standing status by, appointment of 
a receiver for, assignment for the benefit of creditors of, or the commencement
of any insolvency or bankruptcy proceeding by or against, Guarantor or any
general partner of or the holder(s) of the majority ownership interests of 
Guarantor; and/or (d) The entry of 

                                     -18-
<PAGE> 19

any monetary judgment or the assessment against, the filing of any tax lien 
against, or the issuance of any writ of garnishment or attachment against any
property of or debts due Guarantor.
    
If a Default occurs, the Guaranteed Obligations shall be due immediately and 
payable without notice.  Guarantor shall pay interest on the Guaranteed 
Obligations from such Default at the highest rate of interest charged on any
of the Guaranteed Obligations.
    
ATTORNEY'S FEES AND OTHER COSTS OF COLLECTION.  Guarantor shall pay all of 
Bank's reasonable expenses incurred to enforce or collect any of the Guaranteed
Obligations, including, without limitation, reasonable arbitration, paralegals',
attorneys' and experts' fees and expenses, whether incurred without the 
commencement of a suit, in any suit, arbitration, or administrative proceeding,
or in any appellate or bankruptcy proceeding.

SUBORDINATION OF OTHER DEBTS.  Guarantor agrees: (a) to subordinate the 
obligations now or hereafter owed by Borrower to Guarantor ("Subordinated 
Debt") to any and all obligations of Borrower to Bank now or hereafter existing
while this Guaranty is in effect, provided however that Guarantor may receive 
regularly scheduled principal and interest payments on the Subordinated Debt 
so long as (i) all sums due and payable by Borrower to Bank have been paid in
full on or prior to such date, and (ii) no event or condition which constitutes
or which with notice or the lapse or time would constitute an event of default 
with respect to the Guaranteed Obligations, shall be continuing on or as of the
payment date; (b) Guarantor will place a legend indicating such subordination 
on every note, ledger page or other document evidencing any part of the 
Subordinated Debt; and (c) except as permitted by this paragraph, Guarantor 
will not request or accept payment of or any security for any part of the 
Subordinated Debt, and any proceeds of the Subordinated Debt paid to Guarantor,
through error or otherwise, shall immediately be forwarded to Bank by Guarantor,
properly endorsed to the order of Bank, to apply to the Guaranteed Obligations.

MISCELLANEOUS.  (a) Assignment.  This Guaranty and other Loan Documents shall 
inure to the benefit of and be binding upon the parties and their respective 
heirs, legal representatives, successors and assigns.  Bank's interests in and
rights under this Guaranty and other Loan Documents are freely assignable, in 
whole or in part, by Bank.  Any assignment shall not release Guarantor from the
Guaranteed Obligations.  (b) Applicable Law; Conflict Between Documents.  This
Guaranty and other Loan Documents shall be governed by and construed under the
laws of the state in which office of Bank first shown above is located without
regard to that state's conflict of laws principles.  If the terms of this 
Guaranty should conflict with the terms of any commitment letter that survives
closing, the terms of this Guaranty shall control.  (c) Jurisdiction. 
Guarantor irrevocably agrees to non-exclusive personal jurisdiction in the 
state in which the office of Bank first shown above is located.  (d) 
Severability.  If any provision of this Guaranty or of the other Loan 
Documents shall be prohibited or invalid under applicable law, such
provision shall be ineffective but only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the 
remaining provisions of this Guaranty or other document.  (e) Notices.  Any 
notices to Guarantor shall be sufficiently given, if in writing and mailed or
delivered to the Guarantor's address shown above or such other address as
provided hereunder, and to Bank, if in writing and mailed or delivered to 
Bank's office address shown above or such other address as Bank may specify 
in writing from time to time.  In the event that Guarantor changes Guarantor's
address at any time prior to the date the Guaranteed Obligations are paid in 
full, Guarantor agrees to promptly give written notice of said change of address
by registered or certified mail, return receipt requested, all charges prepaid.
(f) Plural; Captions.  All references in the Loan Documents to borrower, 
guarantor, person, document or other nouns of reference mean both the singular
and plural form, as the case may be, and the term "person" shall mean any 
individual, person or entity.

                                     -19-
<PAGE> 20

The captions contained in the Loan Documents are inserted for convenience only 
and shall not affect the meaning or interpretation of the Loan Documents.  (g) 
Binding Contract.  Guarantor by execution of and Bank by acceptance of this 
Guaranty agree that each party is bound to all terms and provisions of this 
Guaranty.  (h) Amendments, Waivers an& Remedies.  No waivers, amendments or 
modifications of this Guaranty and other Loan Documents shall be valid unless
in writing and signed by an officer of Bank.  No waiver by Bank of any Default
shall operate as a waiver of any other Default or the same Default on a future
occasion.  Neither the failure nor any delay on the part of Bank in exercising
any right, power, or privilege granted pursuant to this Guaranty and other Loan
Documents shall operate as a waiver thereof, nor shall a single or partial 
exercise thereof preclude any other or further exercise or the exercise of any
other right, power or privilege.  All remedies available to Bank with respect 
to this Guaranty and other Loan Documents and remedies available at law or in 
equity shall be cumulative and may be pursued concurrently or successively.  
(i) Partnerships.  If Guarantor is a partnership, the obligations, liabilities
and agreements on the part of Guarantor shall remain in full force and effect 
and fully applicable notwithstanding any changes in the individuals comprising
the partnership.  The term "Guarantor" includes any altered or successive 
partnerships, and predecessor partnership(s) and the partners shall not be 
released from any obligations or liabilities hereunder.  (j) Loan Documents.  
The term "Loan Documents" refers to all documents executed in connection with 
the Guaranteed Obligations and may include, without limitation, commitment 
letters that survive closing, loan agreements, other guaranty agreements, 
security agreements, instruments, financing statements, mortgages, deeds of 
trust, deeds to secure debt, letters of credit and any amendments or 
supplements (excluding swap agreements as defined in 11 U.S. Code Sec. 101).
    
ARBITRATION.  Upon demand of any party hereto, whether made before or after 
institution of any judicial proceeding, any dispute, claim or controversy 
arising out of, connected with or relating to this Guaranty and other Loan 
Documents ("Disputes") between or among parties to this Guaranty shall be 
resolved by binding arbitration as provided herein.  Institution of a judicial
proceeding by a party does not waive the right of that party to demand 
arbitration hereunder.  Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to arbitration, claims
brought as class actions, claims arising from Loan Documents executed in the 
future, or claims arising out of or connected with the transaction reflected by
this Guaranty.

Arbitration shall be conducted under and governed by the Commercial Financial 
Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA") and Title 9 of the U.S. Code.  All arbitration hearings 
shall be conducted in the city in which the office of Bank first stated above 
is located.  The expedited procedures set forth in Rule 51 et seq. of the 
Arbitration Rules shall be applicable to claims of less than $1,000,000.00.
All applicable statutes of limitation shall apply to any Dispute.  A judgment
upon the award may be entered in any court having jurisdiction.  The panel 
from which all arbitrators are selected shall be comprised of licensed 
attorneys.  The single arbitrator selected for expedited procedure shall be a
retired judge from the highest court of general jurisdiction, state or federal,
of the state where the hearing will be conducted or if such person is not 
available to serve, the single arbitrator may be a licensed attorney.  
Notwithstanding the foregoing, this arbitration provision does not apply to 
disputes under or related to swap agreements.

                                     -20-
<PAGE> 21

PRESERVATION AND LIMITATION OF REMEDIES.  Notwithstanding the preceding binding
arbitration provisions, Bank and Guarantor agree to preserve, without 
diminution, certain remedies that any party hereto may employ or exercise 
freely, independently or in connection with an arbitration proceeding or 
after an arbitration action is brought.  Bank and Guarantor shall have the 
right to proceed in any court of proper jurisdiction or by self-help to 
exercise or prosecute the following remedies, as applicable: (i) all rights 
to foreclose against any real or personal property or other security by 
exercising a power of sale granted under Loan Documents or under applicable
law or by judicial foreclosure and sale, including a proceeding to confirm 
the sale; (ii) all rights of self-help including peaceful occupation of real
property and collection of rents, set-off, and peaceful possession of personal
property; (iii) obtaining provisional or ancillary remedies including 
injunctive relief, sequestration, garnishment, attachment, appointment of 
receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment.  Preservation of these 
remedies does not limit the power of an arbitrator to grant similar remedies
that may be requested by a party in a Dispute.  Guarantor and Bank agree that
they shall not have a remedy of punitive or exemplary damages against the other
in any Dispute and hereby waive any right or claim to punitive or exemplary 
damages they have now or which may arise in the future in connection with any 
Dispute whether the Dispute is resolved by arbitration or judicially.

IN WITNESS WHEREOF, Guarantor, on the day and year first written above, has 
caused this Unconditional Guaranty to be executed under seal.


                 Melru Corp.
                 Taxpayer Identification Number:    23-2256563
    
                 By: /s/ Patrick M. Farrell
                          Name: Patrick M. Farrell
                          Title: V.P., Finance and Administration
    
                 Jones Investment, Inc.
                 Taxpayer Identification Number:    51-0335604

                 By: /s/ Wesley R. Card
                          Name: Wesley R. Card
                          Title: President

                 Jones International, Ltd.
                 Taxpayer Identification Number: Not applicable
    
                 By: /s/ Wesley R. Card
                          Name: Weslev R. Card
                          Title: Director
    
                 Jones Holding Corporation
                 Taxpayer Identification Number:    51-0335605
    
                 By: /s/ Wesley R. Card
                          Name: Weslev R. Card
                          Title: Director
    
                                     -21-