ex10-1.htm


     

    Exhibit
10.1

     

    
       

      
 

      AMENDMENT
NO. 3 TO THE

      AMENDED AND RESTATED

      FIVE-YEAR
CREDIT AGREEMENT

      


       

                                                                      Dated as of January
5, 2009

       

      AMENDMENT NO. 3 TO THE AMENDED AND
RESTATED FIVE YEAR CREDIT AGREEMENT by and among Jones Apparel Group USA,
Inc. (formerly known as Kasper, Ltd.), a Delaware corporation (the “Borrower”), the
Additional Obligors referred to therein, the banks, financial institutions and
other institutional lenders parties to the 2005 Credit Agreement referred to
below (collectively, the “Lenders”) and
Wachovia Bank, National Association, as agent (the “Administrative
Agent”) for the Lenders.

       

      PRELIMINARY
STATEMENTS:

       

      (1)           The
Borrower’s predecessor in interest Jones Apparel Group USA, Inc., a Pennsylvania
corporation (“Old
Jones USA”), the Additional Obligors, the Lenders, the Administrative
Agent and other parties thereto had entered into an Amended and Restated
Five-Year Credit Agreement dated as of May 16, 2005, as amended by Amendment No.
1 dated as of July 27, 2007, and as further amended and restated by Amendment
No. 2 dated as of June 6, 2008 (as amended and restated, the “2005 Credit
Agreement”).  Capitalized terms not otherwise defined in this
Amendment have the same meanings as specified in the 2005 Credit
Agreement.

       

      (2)           Old
Jones USA merged into the Borrower as of January 1, 2007.

       

      (3)           The
Borrower has requested changes and modifications to the 2005 Credit Agreement as
hereinafter set forth; the Required Lenders are, on the terms and conditions
stated below, willing to grant the request of the Borrower; and the Borrower and
the Required Lenders have agreed to further amend the 2005 Credit Agreement as
hereinafter set forth.

       

      (4)           Reference
is made to the Amended and Restated Five-Year Credit Agreement dated as of June
15, 2004, as amended and restated as of June 6, 2008 (the “2004 Credit
Agreement”), by and among the Borrower, the additional obligors referred
to therein, Wachovia Bank, National Association, as administrative agent (the
“2004 Administrative
Agent”) and the Lenders and Agents party thereto.

       

      SECTION
1. Amendments to 2005 Credit
Agreement.  The
2005 Credit Agreement is, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 3, hereby
amended in its entirety to read in full as set forth in Annex A
hereto.

       

      SECTION
2. Execution and Delivery;
Termination of 2004 Credit Agreement.  This
Amendment shall become a legally binding document subject to the conditions of
effectiveness listed in Section 3 on the first date (the “Execution Date”) when
(a) the Borrower and the Additional Obligors shall have executed and delivered
to the Administrative Agent counterparts to this Amendment and (b) the Borrower
shall have received executed counterparts to this Amendment from the
Administrative Agent and the Required Lenders.  Notwithstanding the
conditions of effectiveness set forth in Section 3, on the Business Day
immediately following the Execution Date, the Borrower will provide notice to
the 2004 Administrative Agent (the “Termination Notice”)
pursuant to Section 2.5 of the 2004 Credit Agreement to permanently terminate
the entire Revolving Credit Commitment (as defined under the 2004 Credit
Agreement) (the “2004
Facility Termination”).  Such notice will specify the earliest
effective date for the 2004 Facility Termination after the date of such notice
that is permitted by the terms of the 2004 Credit Agreement, after giving effect
to the waiver referred to in the next following sentence (to the extent
effective under the 2004 Credit Agreement).  If the Lenders party to
this Amendment constitute the “Required Lenders” under the 2004 Credit
Agreement, such Lenders waive their right under Section 2.5 of the 2004 Credit
Agreement to receive written notice five business days’ prior to the termination
of the Revolving Credit Commitment, to the extent necessary to permit the 2004
Facility Termination to occur on or prior to December 31, 2008.

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          2

        

      

       

       

      SECTION
3. Conditions of
Effectiveness.  This
Amendment is subject to the provisions of Section 14.11 of the 2005 Credit
Agreement.  Section 1 of this Agreement shall become effective as of
the date first above written (the “Amendment Effective
Date”) when and only when, on or before January 9, 2009, the
Administrative Agent shall have received:

       

      (a) Notice
from the administrative agent under the 2004 Credit Agreement that all
commitments thereunder have been terminated and that all amounts payable or
accrued under such credit agreement have been paid in full.

       

      (b) A
security agreement in substantially the form of Annex B hereto (the “Security Agreement”),
duly executed by each Credit Party and each Subsidiary listed on Schedule I
hereto (collectively with the Credit Parties, the “Granting Parties”),
together with:

       

      (i) acknowledgment
copies or stamped receipt copies of financing statements, duly filed on or
before the Amendment Effective Date under the Uniform Commercial Code of all
jurisdictions that the Administrative Agent may reasonably request in order to
perfect and protect the liens and security interests created under the Security
Agreement, covering the Collateral described in the Security
Agreement,

       

      (ii) the
results of a search of the Uniform Commercial Code (or equivalent) filings made
with respect to the Collateral Grantors in the jurisdictions contemplated by
clause (i) above and copies of the financing statements (or similar documents)
disclosed by such search.

       

      (c) A
Canadian security agreement in form and substance reasonably satisfactory to the
Administrative Agent, duly executed by Jones Apparel Group Canada, LP, together
with evidence of such filings and other actions required under the laws of the
applicable jurisdiction that the Administrative Agent may reasonably request in
order to perfect the liens and security interests created
thereunder.

       

      (d) A
certificate from a Responsible Officer, in form and
substance reasonably satisfactory to the Administrative Agent, to the effect
that all representations and warranties of the Borrower contained in the 2005
Credit Agreement are true, correct and complete in all material respects with
the same effect as if made on and as of the Amendment Effective Date, except to
the extent such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date); that the Borrower is
not in violation of any of the covenants contained in the 2005 Credit Agreement,
as amended hereby; that, after giving effect to the transactions contemplated by
this Amendment, no Default or Event of Default has occurred and is continuing;
and that each of the conditions to the effectiveness of this Amendment has been
satisfied or waived (assuming satisfaction of the Administrative Agent where not
advised otherwise).

       

       

       

      
        
          
            Amendment
No. 3 to the

            Amended
and Restated Credit Agreement

          

          
          

        

        
          
          

          
            

          

        

        
          3

        

      

       

       

      (e) A
certificate of the secretary, assistant secretary or general counsel of the
Borrower, each Additional Obligor and each other Grantor (as defined in the
Security Agreement) certifying as to the incumbency and genuineness of the signature
of each officer of such Person executing this Amendment or each other Loan
Document to which it is a party and certifying that attached thereto is a true,
correct and complete copy of resolutions duly adopted by the Board of Directors
of such Person authorizing, in the case of the Borrower, the borrowings
contemplated under the 2005 Credit Agreement, as amended hereby, and in the case
of each such Person, the execution, delivery and performance of this Amendment
or the Loan Documents to which it is to be a party.

       

      (f) Favorable
opinions of Ira M. Dansky, General Counsel to the Borrower, Cravath, Swaine
& Moore LLP, special counsel to the Borrower, Schnader Harrison Segal &
Lewis LLP, Pennsylvania counsel to the Borrower, and Drinker Biddle & Reath
LLP, New Jersey counsel to the Borrower, Cassels Brock & Blackwell, Canadian
counsel to the Borrower, and such other opinions as may be agreed, addressed to
the Administrative Agent and the Lenders with respect to the Borrower, the Loan
Documents and such other matters as the Lenders shall reasonably
request.

       

      (g) The
Borrower shall have paid all accrued fees and expenses of the Joint Lead
Arrangers and Joint Bookrunners and the Administrative Agent (including the
accrued fees and expenses of counsel to the Joint Lead Arrangers and Joint
Bookrunners) and the amendment fees payable to the Lenders for which invoices
have been received.

       

      SECTION
4. Reference to and Effect on
the 2005 Credit Agreement and the Notes.  (a)  On and after the
Amendment Effective Date, each reference in the 2005 Credit Agreement to “this
Agreement”, “hereunder”, “hereof” or words of like import referring to the 2005
Credit Agreement, and each reference in (i) the Notes and (ii) each of the other
Loan Documents, to “the Credit Agreement”, “thereunder”, “thereof” or words of
like import referring to the 2005 Credit Agreement, shall mean and be a
reference to the 2005 Credit Agreement, as amended by this
Amendment.

       

      (b) The 2005
Credit Agreement, the Notes and each of the other Loan Documents, as
specifically amended by this Amendment, are and shall continue to be in full
force and effect and are hereby in all respects ratified and
confirmed.

       

      (c) Changes
in the Applicable Margin effected by this Amendment shall be effective
for all periods (or portions thereof) on and after the Amendment Effective
Date.  Any interest, fees or other amounts accruing on the basis of
the Applicable Margin during periods (or portions thereof) prior to the
Amendment Effective Date will accrue on the basis of the Applicable Margin in
effect for such periods prior to the Amendment Effective Date.

       

      (d) The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
any Lender or the Administrative Agent under the 2005 Credit Agreement, nor
constitute a waiver of any provision of the 2005 Credit Agreement.

       

       

      
        
          
            Amendment
No. 3 to the

            Amended
and Restated Credit Agreement

          

          
          

        

        
          
          

          
            

          

        

        
          4

        

      

       

       

      SECTION
5. Costs,
Expenses.  The
Borrower agrees to pay on demand all reasonable costs and expenses of the
Administrative Agent and the Arrangers in connection with the preparation,
execution, delivery and administration, modification and amendment of this
Amendment and the other instruments and documents to be delivered hereunder
(including, without limitation, the reasonable fees and disbursements of counsel
for the Administrative Agent and the Arrangers) in accordance with the terms of
Section 14.2 of the 2005 Credit Agreement.

       

      SECTION
6. Execution in
Counterparts.  This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute but one and
the same agreement.  Delivery of an executed counterpart of a
signature page to this Amendment by telecopier or other electronic medium shall
be effective as delivery of a manually executed counterpart of this
Amendment.

       

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

       


      
        
          
            Amendment
No. 3 to the

            Amended
and Restated Credit Agreement

          

           


        

        
           


          
            

          

        

        
           


        

      


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

       

      
        
          	 	
                  JONES
      APPAREL GROUP USA, INC.,

                  as
      Borrower

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ 
      Joseph T. Donnalley	 
	 	 	Name: 
      Joseph T. Donnalley 	 
	 	 	Title:   
      Treasurer	 
	 	 	 	 


        

      

       

      
        
          
            	 	
                    
                      JONES
      APPAREL GROUP, INC.,

                      as
      Additional Obligor

                    

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ 
      Joseph T. Donnalley	 
	 	 	Name: 
      Joseph
      T. Donnalley 	 
	 	 	
                    Title:   
      Treasurer and Senior Vice President, Corporate Taxation

                         and
      Risk Management

                  	 
	 	 	 	 


          

        

         

        
          
            	 	
                    JONES
      APPAREL GROUP HOLDINGS, INC.,

                    as
      Additional Obligor

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ 
      Joseph T. Donnalley	 
	 	 	Name: 
      Joseph T. Donnalley 	 
	 	 	Title:   
      Treasurer	 
	 	 	 	 


          

        

         

        
          
            	 	
                    
                      JONES
      RETAIL CORPORATION,

                      as
      Additional Obligor

                    

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ 
      Joseph T. Donnalley	 
	 	 	Name: 
      Joseph T. Donnalley 	 
	 	 	Title:   
      Vice President & Treasurer	 
	 	 	 	 


          

        

         

        
          
            	 	
                    
                      NINE
      WEST FOOTWEAR CORPORATION,

                      as
      Additional Obligor

                    

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/ 
      Joseph T. Donnalley	 
	 	 	Name: 
      Joseph T. Donnalley 	 
	 	 	Title:   
      Treasurer	 
	 	 	 	 


          

        

         




      


      


      
        
          
            
              Amendment
No. 3 to the

              Amended
and Restated Credit Agreement

            

             
[Signature Page]

          

          
             


            
              

            

          

          
             


          

        

      

       

       

      


      
        	 	
                Agreed
      as of the date first above written

                 

                
                  WACHOVIA
      BANK, NATIONAL ASSOCIATION,

                  as
      Administrative Agent, Issuing Lender and Lender

                

              	 
	 	 	 	 
	  
      	
                By:
      

              	/s/ Susan
      T. Gallagher	 
	 	 	Name:   
      Susan T. Gallagher	 
	 	 	Title:      Director 	 
	 	 	 	 


      

       

      
        


        
          	 	
                  
                    JPMORGAN
      CHASE BANK, N.A.,

                    as
      Issuing Lender and Lender

                  

                	 
	 	 	 	 
	
                        
      

                	
                  By:
      

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


        

         

        
          


          
            	 	
                    
                      CITIBANK,
      N.A.,

                      as
      Issuing Lender and Lender

                    

                  	 
	 	 	 	 
	
                      
      

                  	
                    By:
      

                  	/s/ Carolyn
      Kee	 
	 	 	Name:   
      Carolyn Kee	 
	 	 	Title:      Vice
      President	 
	 	 	 	 


          

           

          
            


            
              	 	
                      
                        BANK OF
      AMERICA, N.A.,

                        as
      Issuing Lender and Lender

                      

                    	 
	 	 	 	 
	
                        
      

                    	
                      By:
      

                    	/s/ Thomas
      J. Kane	 
	 	 	Name:   
      Thomas J. Kane	 
	 	 	Title:      SVP	 
	 	 	 	 


            

             

          

        

      

      
        


        
          
            	 	
                    
                      SUNTRUST
      BANK,

                      as
      Lender

                    

                  	 
	 	 	 	 
	
                      
      

                  	
                    By:
      

                  	/s/ Michael
      J. Vegh	 
	 	 	Name:   
      Michael J. Vegh	 
	 	 	Title:      Vice
      President	 
	 	 	 	 


          

        

         

      

       

      
        


        


      

      
        


        


        


        



        
          
             
Amendment
No. 3 to the

              Amended
and Restated Credit Agreement

            

          

          
             
[Signature Page]  

            
            

          

          
             


          

        



       

      
        	 	
                
                  BARCLAYS
      BANK PLC,

                  as
      Lender

                

              	 
	 	 	 	 
	
                  
      

              	
                By:
      

              	/s/ Alicia
      Borys	 
	 	 	Name:   
      Alicia Borys	 
	 	 	Title:      Assistant
      Vice President	 
	 	 	 	 


      

    

     

     

    
      	 	
              
                The
      Governor and Company of the Bank of Ireland,

                as
      Lender

              

            	 
	 	 	 	 
	
                
      

            	
              By:
      

            	/s/ Elaine
      Crowley	 
	 	 	Name:   
      Elaine Crowley	 
	 	 	Title:      Senior
      Manager	 
	 	 	 	 


    

     

    
      	
                
      

            	
              By:
      

            	/s/ Peter
      O’Connor	 
	 	 	Name:   
      Peter O’Connor	 
	 	 	Title:      Deputy
      Manager	 
	 	 	 	 


    

     

     

    
      	 	
              
                STANDARD
      CHARTERED BANK,

                as
      Lender

              

            	 
	 	 	 	 
	
                
      

            	
              By:
      

            	/s/ Alan
      Babcock	 
	 	 	Name:   
      Alan Babcock	 
	 	 	Title:      Director	 
	 	 	 	 


    

     

    
      
        	
                  
      

              	
                By:
      

              	/s/ Robert
      K. Reddington	 
	 	 	Name:   
      Robert K. Reddington	 
	 	 	Title:      AVP/Credit
      Documentation	 
	 	 	              
      Credit Risk Control	 
	 	 	              
      Standard Chartered Bank N.Y.	 


      

    

     

     

    
      	 	
              
                Bank
      of Taiwan, New York Agency,

                as
      Lender

              

            	 
	 	 	 	 
	
                
      

            	
              By:
      

            	/s/ Thomas
      K.C. Wu	 
	 	 	Name:   
      Thomas K.C. Wu	 
	 	 	Title:      VP
      & General Manager	 
	 	 	 	 


    

     

     

    
      	 	
              
                BANK
      OF TOKYO-MITSUBISHI UFJ, NEW YORK

                BRANCH,

                as
      Lender

              

            	 
	 	 	 	 
	
                
      

            	
              By:
      

            	/s/ Lillian
      Kim	 
	 	 	Name:   
      Lillian Kim	 
	 	 	Title:      Authorized
      Signatory	 
	 	 	 	 


    

    


     

     

    


    
      
        
           
Amendment
No. 3 to the

            Amended
and Restated Credit Agreement

          

        

        
           
[Signature Page]  

          
          

        

        
           


        

      

    

    
 

    
      	 	
              
                LAND
      BANK OF TAIWAN,

                as
      Lender

              

            	 
	 	 	 	 
	
                
      

            	
              By:
      

            	/s/ Henry
      Leu	 
	 	 	Name:   
      Henry Leu	 
	 	 	Title:      General
      Manager	 
	 	 	 	 


    

     

     

    
      	 	
              
                Bank
      of China New York Branch,

                as
      Lender

              

            	 
	 	 	 	 
	
                
      

            	
              By:
      

            	/s/ XiaoJing
      Li	 
	 	 	Name:   
      XiaoJing Li	 
	 	 	Title:      General
      Manager	 
	 	 	 	 


    

     

     

    
      	 	
              
                FIFTH
      THIRD BANK,

                as
      Lender

              

            	 
	 	 	 	 
	
                
      

            	
              By:
      

            	/s/ Randolph
      J. Stierer	 
	 	 	Name:   
      Randolph J. Stierer	 
	 	 	Title:      Vice
      President	 
	 	 	 	 


    

     

     

    
      	 	
              
                MIZUHO
      CORPORATE BANK, USA,

                as
      Lender

              

            	 
	 	 	 	 
	
                
      

            	
              By:
      

            	/s/ Toru
      Inoue	 
	 	 	Name:   
      Toru Inoue	 
	 	 	Title:      Deputy
      General Manager	 
	 	 	 	 


    

     

     

    
      	 	
              
                Sumitomo
      Mitsui Banking Corp., New York Branch,

                as
      Lender

              

            	 
	 	 	 	 
	
                
      

            	
              By:
      

            	/s/ Natsuhiro
      Samejima	 
	 	 	Name:   
      Natsuhiro Samejima	 
	 	 	Title:      Senior
      Vice President	 
	 	 	 	 


    

    
      


       

       

      


      
        
          
             
Amendment
No. 3 to the

              Amended
and Restated Credit Agreement

            

          

          
             
[Signature Page]  

            
            

          

          
             


          

        

      

      


    

     

    
      
 

      
        	 	
                
                  THE
      BANK OF NOVA SCOTIA,

                  as
      Lender

                

              	 
	 	 	 	 
	
                  
      

              	
                By:
      

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


      

       

       

      
        	 	
                
                  US
      Bank, N.A.,

                  as
      Lender

                

              	 
	 	 	 	 
	
                  
      

              	
                By:
      

              	/s/ Frances
      W. Josephic	 
	 	 	Name:   
      Frances W. Josephic	 
	 	 	Title:      Vice
      President	 
	 	 	 	 


      

       

       

      
        	 	
                
                  UNION
      BANK, N.A.,

                  as
      Lender

                

              	 
	 	 	 	 
	
                  
      

              	
                By:
      

              	/s/ Ching
      Lim	 
	 	 	Name:   
      Ching Lim	 
	 	 	Title:      Vice
      President	 
	 	 	 	 


      

       

       

      
        	 	
                
                  UNICREDIT
      SPA,

                  as
      Lender

                

              	 
	 	 	 	 
	
                  
      

              	
                By:
      

              	/s/ Luca
      Bausem	 
	 	 	Name:   
      Luca Bausem	 
	 	 	Title:      SVP	 
	 	 	 	 


      

       

      
        
          
            
              	
                        
      

                    	
                      By:
      

                    	/s/ Curt
      Schade	 
	 	 	Name:   
      Curt Schade	 
	 	 	Title:      Managing
      Director	 
	 	 	 	 


            

          

        

        
          


        

      

       

       

      
        	 	
                
                  BANK
      LEUMI USA,

                  as
      Lender

                

              	 
	 	 	 	 
	
                  
      

              	
                By:
      

              	/s/ John
      Koenigsberg	 
	 	 	Name:   
      John Koenigsberg	 
	 	 	Title:      Senior
      Vice President	 
	 	 	 	 


      

      
         

        
          
            
              
                	
                          
      

                      	
                        By:
      

                      	/s/ Iris
      Steinhardt	 
	 	 	Name:   
      Iris Steinhardt	 
	 	 	Title:      Vice
      President	 
	 	 	 	 


              

            

          

          
            


          

        

         

        
          


          
            
              
                 
Amendment
No. 3 to the

                  Amended
and Restated Credit Agreement

                

              

              
                 
[Signature Page]  

                
                

              

              
                 


              

            

          

          


           

          
            
 

            
              	 	
                      
                        Chang
      Hwa Commercial Bank, Ltd., New York Branch,

                        as
      Lender

                      

                    	 
	 	 	 	 
	
                        
      

                    	
                      By:
      

                    	/s/ Jim
      C.Y. Chen	 
	 	 	Name:   Jim
      C.Y. Chen 	 
	 	 	Title:      VP
      & General Manager	 
	 	 	 	 


            

             

             

            
              	 	
                      
                        First
      Commercial Bank, New York Agency,

                        as
      Lender

                      

                    	 
	 	 	 	 
	
                        
      

                    	
                      By:
      

                    	/s/ Malcolm
      Wang	 
	 	 	Name:   
      Malcolm Wang	 
	 	 	Title:      Deputy
      General Manager	 
	 	 	 	 


            

             

             

            
              	 	
                      
                        Fortis
      Bank SA/NV, New York Branch,

                        as
      Lender

                      

                    	 
	 	 	 	 
	
                        
      

                    	
                      By:
      

                    	/s/ Douglas
      Riahi	 
	 	 	Name:   
      Douglas Riahi	 
	 	 	Title:      Managing
      Director	 
	 	 	 	 


            

             

            
              
                
                  
                    
                      	
                                
      

                            	
                              By:
      

                            	/s/ 	 
	 	 	Name:   
      	 
	 	 	Title:      	 
	 	 	 	 


                    

                  

                

                
                   

                

              

            

             

            
              	 	
                      
                        HUA
      NAN COMMERCIAL BANK, LTD.

                        NEW
      YORK AGENCY,

                        as
      Lender

                      

                    	 
	 	 	 	 
	
                        
      

                    	
                      By:
      

                    	/s/ Henry
      Hsieh	 
	 	 	Name:   
      Henry Hsieh	 
	 	 	Title:      Assistant
      Vice President	 
	 	 	 	 


            

             

             

            
              	 	
                      
                        TAIPEI
      FUBON COMMERCIAL BANK

                        NEW
      YORK AGENCY,

                        as
      Lender

                      

                    	 
	 	 	 	 
	
                        
      

                    	
                      By:
      

                    	/s/ Michael
      Tan	 
	 	 	Name:   
      Michael Tan	 
	 	 	Title:      VP
      & General Manager	 
	 	 	 	 


            

            
              


              
                


                
                  
                    
                       
Amendment
No. 3 to the

                        Amended
and Restated Credit Agreement

                      

                    

                    
                       
[Signature Page]  

                      
                      

                    

                    
                       


                    

                  

                

                


                 

                
                  
 

                  
                    	 	
                            
                              E.
      Sun Commercial Bank, Ltd., Los Angeles Branch,

                              as
      Lender

                            

                          	 
	 	 	 	 
	
                              
      

                          	
                            By:
      

                          	/s/ Benjamin
      Lin	 
	 	 	Name:   
      Benjamin Lin	 
	 	 	Title:      EVP
      & General Manager	 
	 	 	 	 


                  

                   

                   

                  
                    	 	
                            
                              The
      Norinchukin Bank, New York Branch,

                              as
      Lender

                            

                          	 
	 	 	 	 
	
                              
      

                          	
                            By:
      

                          	/s/ Noritsugu
      Sato	 
	 	 	Name:   
      Noritsugu Sato	 
	 	 	Title:      General
      Manager	 
	 	 	 	 


                  

                   

                   

                  
                    	 	
                            
                              The
      Bank of New York Mellon,

                              as
      Lender

                            

                          	 
	 	 	 	 
	
                              
      

                          	
                            By:
      

                          	/s/ David
      B. Wirl	 
	 	 	Name:   
      David B. Wirl	 
	 	 	Title:      Vice
      President	 
	 	 	 	 


                  

                   

                   

                  
                    	 	
                            
                              NATIONAL
      BANK OF EGYPT, New York Branch,

                              as
      Lender

                            

                          	 
	 	 	 	 
	
                              
      

                          	
                            By:
      

                          	/s/ Khaled
      El Ghorab	 
	 	 	Name:   
      Khaled El Ghorab	 
	 	 	Title:      Senior
      Vice President	 
	 	 	 	 


                  

                   

                   

                   

                  
                    
                        Amendment
No. 3 to the

                        Amended
and Restated Credit Agreement

                      

                    

                    
                        [Signature Page]

                      
                        

                      

                    

                    
                      
                      

                    

                  

                   

                   

                   

                  
                    ANNEX
A

                     

                    


                     

                     

                     

                    
 

                    $600,000,000

                     

                    


                    AMENDED
AND RESTATED FIVE-YEAR CREDIT AGREEMENT

                     

                    dated as
of May 16, 2005,

                     

                    AMENDED
AND RESTATED AS OF JANUARY 5, 2009

                     

                    by and
among

                     

                    JONES
APPAREL GROUP USA, INC.,

                     

                    the
Additional Obligors referred to herein,

                     

                    the
Lenders referred to herein,

                     

                    J.P. MORGAN SECURITIES INC.
and CITIGROUP GLOBAL
MARKETS INC.,

                    as Joint
Lead Arrangers

                    and Joint
Bookrunners,

                     

                    WACHOVIA
BANK, NATIONAL ASSOCIATION,

                    as
Administrative Agent,

                     

                    and

                     

                    JPMORGAN CHASE BANK, N.A. and
CITIBANK,
N.A.,

                    as
Syndication Agents,

                     

                    and

                     

                    BANK OF AMERICA, N.A., BARCLAYS BANK
PLC and SUNTRUST
BANK

                    as
Documentation Agents

                     

                    


                    


                     

                    
                      
                        
                        

                      

                      
                        
                        

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                     

                    TABLE
OF CONTENTS

                     

                    


                    Page        

                    
 

                    
                      
                        
                          	
                                  ARTICLE
      I DEFINITIONS

                                	 
        1 
	
                                  SECTION
      1.1.  Definitions.

                                	   
      1
	
                                  SECTION
      1.2.  General.

                                	 
      17  
	
                                  SECTION 1.3.  Other
      Definitions and Provisions.

                                	 
      17
	
                                  ARTICLE
      II REVOLVING CREDIT FACILITY

                                	 
      18
	
                                  SECTION 2.1.  Revolving
      Credit Loans.

                                	 
      18
	
                                  SECTION 2.2.  Procedure
      for Advances of Revolving Credit Loans.

                                	 
      18
	
                                  SECTION 2.3.  Repayment
      of Revolving Credit Loans.

                                	 
      19
	
                                  SECTION 2.4.  Evidence
      of Debt.

                                	 
      20
	
                                  SECTION 2.5.  Permanent
      Reduction of the Revolving Credit Commitment.

                                	 
      20
	
                                  SECTION
      2.6.  Termination of Revolving Credit Facility.

                                	 
      21
	
                                  SECTION
      2.7.  Non-Funding Lenders.

                                	 
      21
	
                                  ARTICLE
      III LETTER OF CREDIT FACILITY

                                	 
      21
	
                                  SECTION 3.1.  L/C
      Commitment.

                                	 
      21
	
                                  SECTION 3.2.  Procedure
      for Issuance of Letters of Credit.

                                	 
      22
	
                                  SECTION 3.3.  Fees and
      Other Charges.

                                	 
      23
	
                                  SECTION 3.4.  L/C
      Participations.

                                	 
      23
	
                                  SECTION
      3.5.  Reimbursement.

                                	 
      24
	
                                  SECTION
      3.6.  Obligations Absolute.

                                	 
      25
	
                                  SECTION 3.7  Effect of
      Application.

                                	 
      25
	
                                  ARTICLE
      IV [RESERVED]

                                	 
      25
	
                                  ARTICLE
      V GENERAL LOAN PROVISIONS

                                	 
      25
	
                                  SECTION
      5.1.  Interest.

                                	 
      25


                        

                      

                       

                       

                       

                      
                        
                          
                          

                        

                        
                          i

                          
                            

                          

                        

                        
                          
                          

                        

                      

                      
 

                      
                        
                          	
                                  SECTION 5.2.  Notice
      and Manner of Conversion or Continuation of Revolving Credit
      Loans.

                                	 
      27
	
                                  SECTION
      5.3.  Fees.

                                	 
      27
	
                                  SECTION 5.4.  Manner of
      Payment.

                                	 
      29
	
                                  SECTION 5.5.  Crediting
      of Payments and Proceeds.

                                	 
      29
	
                                  SECTION
      5.6.  Adjustments.

                                	 
      29
	
                                  SECTION 5.7.  Nature of
      Obligations of Lenders Regarding Extensions of Credit; Assumption by the
      Administrative Agent.

                                	 
      30
	
                                  SECTION 5.8.  Joint and
      Several Liability of the Credit Parties.

                                	 
      30
	
                                  SECTION 5.9.  Changed
      Circumstances.

                                	 
      32
	
                                  SECTION
      5.10.  Indemnity.

                                	 
      35
	
                                  SECTION 5.11.  Capital
      Requirements.

                                	 
      35
	
                                  SECTION
      5.12.  Taxes.

                                	 
      35
	
                                  ARTICLE
      VI CLOSING; CONDITIONS OF CLOSING AND BORROWING

                                	 
      37
	
                                  SECTION
      6.1.  Closing.

                                	 
      37
	
                                  SECTION
      6.2.  Conditions to Closing and Initial Revolving Credit Loans
      and Letters of Credit.

                                	 
      37
	
                                  SECTION
      6.3.  Conditions to Extensions of Credit.

                                	 
      40
	
                                  ARTICLE
      VII REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES

                                	 
      40
	
                                  SECTION
      7.1.  Representations and Warranties.

                                	 
      40
	
                                  SECTION 7.2.  Survival
      of Representations and Warranties, Etc.

                                	 
      46
	
                                  ARTICLE
      VIII FINANCIAL INFORMATION AND NOTICES

                                	 
      46
	
                                  SECTION 8.1.  Financial
      Statements and Projections.

                                	 
      46
	
                                  SECTION 8.2.  Officer’s
      Compliance Certificate.

                                	 
      47
	
                                  SECTION
      8.3.  Accountants’ Certificate.

                                	 
      47
	
                                  SECTION 8.4.  Other
      Reports.

                                	 
      47
	
                                  SECTION 8.5.  Notice of
      Litigation and Other Matters.

                                	 
      47
	
                                  SECTION 8.6.  Accuracy
      of Information.

                                	 
      48


                        

                      

                    

                     

                    
                       

                      
                        
                          
                          

                        

                        
                          ii

                          
                            

                          

                        

                        
                          
                          

                        

                      

                    

                    
 

                    
                      
                        	
                                ARTICLE
      IX AFFIRMATIVE COVENANTS

                              	 
      48
	
                                SECTION
      9.1.  Preservation of Corporate Existence and Related
      Matters.

                              	 
      49
	
                                SECTION
      9.2.  Maintenance of Property.

                              	 
      49
	
                                SECTION
      9.3.  Insurance.

                              	 
      49
	
                                SECTION
      9.4.  Accounting Methods and Financial Records.

                              	 
      49
	
                                SECTION 9.5.  Payment
      and Performance of Obligations.

                              	 
      49
	
                                SECTION
      9.6.  Compliance With Laws and Approvals.

                              	 
      49
	
                                SECTION
      9.7.  Environmental Laws.

                              	 
      49
	
                                SECTION
      9.8.  Compliance with ERISA.

                              	 
      50
	
                                SECTION 9.9.  Conduct
      of Business.

                              	 
      50
	
                                SECTION 9.10.  Visits
      and Inspections.

                              	 
      50
	
                                SECTION 9.11.  Use of
      Proceeds.

                              	 
      50
	
                                SECTION 9.12.  Further
      Assurances.

                              	 
      50
	
                                SECTION 9.13.  Covenant
      to Add Additional Obligors and Give Security.

                              	 
      51
	
                                ARTICLE
      X FINANCIAL COVENANTS

                              	 
      52
	
                                SECTION 10.1.  Interest
      Coverage Ratio.

                              	 
      52
	
                                SECTION 10.2.  Covenant
      Debt to EBITDA Ratio.

                              	 
      53
	
                                SECTION 10.3.  Asset
      Coverage Ratio.

                              	 
      53
	
                                ARTICLE
      XI NEGATIVE COVENANTS

                              	 
      53
	
                                SECTION
      11.1.  Limitations on Debt and Guaranty
    Obligations.

                              	 
      53
	
                                SECTION
      11.2.  [Reserved].

                              	 
      54
	
                                SECTION
      11.3.  Limitations on Liens.

                              	 
      55
	
                                SECTION
      11.4.  Limitations on Loans, Advances, Investments and
      Acquisitions.

                              	 
      56
	
                                SECTION
      11.5.  Limitations on Mergers and Liquidation.

                              	 
      57
	
                                SECTION
      11.6.  Limitations on Sale or Transfer of
Assets.

                              	 
      58
	
                                SECTION
      11.7.  Limitations on Dividends and
    Distributions.

                              	 
      58


                      

                    

                     

                     

                    
                      
                        
                        

                      

                      
                        iii

                        
                          

                        

                      

                      
                        
                        

                      

                    

                    


                     

                    

                      
                        
                          	
                                  SECTION
      11.8.  Transactions with Affiliates.

                                	59 
      
	
                                  SECTION 11.9.  Changes
      in Fiscal Year End.

                                	59
	
                                  SECTION
      11.10.  Amendments; Payments and Prepayments of Material Debt
      and Subordinated Debt.

                                	59 
      
	
                                  SECTION
      11.11.  Limitations on Capital Expenditures.

                                	59
	
                                  ARTICLE
      XII DEFAULT AND REMEDIES

                                	59
	
                                  SECTION 12.1.  Events
      of Default.

                                	59
	
                                  SECTION
      12.2.  Remedies.

                                	61
	
                                  SECTION 12.3.  Rights
      and Remedies Cumulative; Non-Waiver; Etc.

                                	62
	
                                  ARTICLE
      XIII THE ADMINISTRATIVE AGENT

                                	62
	
                                  SECTION
      13.1.  Appointment.

                                	62
	
                                  SECTION
      13.2.  Delegation of Duties.

                                	63
	
                                  SECTION
      13.3.  Exculpatory Provisions.

                                	63
	
                                  SECTION 13.4.  Reliance
      by the Administrative Agent.

                                	63
	
                                  SECTION 13.5.  Notice
      of Default.

                                	63
	
                                  SECTION
      13.6.  Non-Reliance on the Administrative Agent and Other
      Lenders.

                                	64
	
                                  SECTION
      13.7.  Indemnification.

                                	64
	
                                  SECTION 13.8.  The
      Administrative Agent in Its Individual Capacity.

                                	65
	
                                  SECTION
      13.9.  Resignation of the Administrative Agent; Successor
      Administrative Agent.

                                	65
	
                                  SECTION
      13.10.  Syndication and Documentation Agents.

                                	65
	
                                  ARTICLE
      XIV MISCELLANEOUS

                                	65
	
                                  SECTION
      14.1.  Notices.

                                	65
	
                                  SECTION
      14.2.  Expenses; Indemnity.

                                	66
	
                                  SECTION
      14.3.  Set-off.

                                	67
	
                                  SECTION
      14.4.  Governing Law.

                                	67
	
                                  SECTION 14.5.  Consent
      to Jurisdiction.

                                	67
	
                                  SECTION 14.6.  Waiver
      of Jury Trial.

                                	68


                        

                      

                    

                     

                     

                    
                      
                        
                        

                      

                      
                        iv

                        
                          

                        

                      

                      
                        
                        

                      

                    

                    
 

                    
                      
                        
                          	
                                  SECTION 14.7.  Reversal
      of Payments.

                                	 
      68
	
                                  SECTION
      14.8.  Injunctive Relief; Punitive Damages.

                                	 
      68
	
                                  SECTION
      14.9.  Accounting Matters.

                                	 
      69
	
                                  SECTION
      14.10.  Successors and Assigns; Participations.

                                	 
      69
	
                                  SECTION
      14.11.  Amendments, Waivers and Consents.

                                	 
      73
	
                                  SECTION
      14.12.  Performance of Duties.

                                	 
      73
	
                                  SECTION 14.13.  All
      Powers Coupled with Interest.

                                	 
      73
	
                                  SECTION
      14.14.  Survival of Indemnities.

                                	 
      73
	
                                  SECTION 14.15.  Titles
      and Captions.

                                	 
      74
	
                                  SECTION
      14.16.  Severability of Provisions.

                                	 
      74
	
                                  SECTION
      14.17.  Counterparts.

                                	 
      74
	
                                  SECTION 14.18.  Term of
      Agreement.

                                	 
      74
	
                                  SECTION
      14.19.  Inconsistencies with Other Documents; Independent Effect
      of Covenants.

                                	 
      74
	
                                  SECTION 14.20.  Patriot
      Act.

                                	 
      75
	
                                  SECTION 14.21.  Ratings
      of Loans.

                                	 
      75
	
                                  SECTION 14.22.  Release
      of Collateral.

                                	 
      75


                        

                      

                    

                     

                     

                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        	
                                                Exhibits

                                              	 
      
	
                                                Exhibit
      A -

                                              	
                                                Form
      of Revolving Credit Note

                                              
	
                                                Exhibit
      B -

                                              	
                                                Form
      of Notice of Revolving Credit Borrowing

                                              
	
                                                Exhibit
      C -

                                              	
                                                Form
      of Notice of Account Designation

                                              
	
                                                Exhibit
      D -

                                              	
                                                Form
      of Notice of Prepayment

                                              
	
                                                Exhibit
      E -

                                              	
                                                Form
      of Notice of Conversion/Continuation

                                              
	
                                                Exhibit
      F -

                                              	
                                                Form
      of Officer’s Compliance Certificate

                                              
	
                                                Exhibit
      G -

                                              	
                                                Form
      of Assignment and Acceptance

                                              
	
                                                Schedules

                                              	 
      
	
                                                Schedule
      1.1(a) -

                                              	
                                                Lenders
      and Revolving Credit
Commitments

                                              


                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                     

                     

                    
                      
                        
                        

                      

                      
                        v

                        
                          

                        

                      

                      
                        
                        

                      

                    

                    

                      
                        
                          	
                                  Schedule
      1.1(b) -

                                	
                                  Outstanding
      Letters of Credit

                                
	
                                  Schedule
      7.1(b) -

                                	
                                  Subsidiaries
      and Capitalization

                                
	
                                  Schedule
      7.1(p) -

                                	
                                  Debt
      and Guaranty Obligations

                                
	
                                  Schedule
      7.1(q) -

                                	
                                  Litigation

                                
	
                                  Schedule
      11.3 -

                                	
                                  Existing
      Liens

                                
	
                                  Schedule
      11.4 -

                                	
                                  Existing
      Loans, Advances and
Investments

                                


                        

                      

                    

                     

                     

                     

                     

                    
                      
                        
                        

                      

                      
                        vi

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    


                    AMENDED
AND RESTATED FIVE-YEAR CREDIT AGREEMENT

                     

                    Dated as
of May 16, 2005

                     

                    AMENDED
AND RESTATED AS OF JANUARY 5, 2009

                     

                    JONES APPAREL GROUP USA, INC. (formerly
known as Kasper, Ltd.), a Delaware corporation, the Additional Obligors (as
defined below), the Lenders who are or may become a party to this Agreement,
J.P. MORGAN SECURITIES INC. and CITIGROUP GLOBAL MARKETS INC., as Joint Lead
Arrangers and Joint Bookrunners, WACHOVIA BANK, NATIONAL ASSOCIATION, as
Administrative Agent for the Lenders, JPMORGAN CHASE BANK, N.A. and CITIBANK,
N.A., as Syndication Agents, and BANK OF AMERICA, N.A., BARCLAYS BANK PLC and
SUNTRUST BANK, as Documentation Agents, agree as follows:

                     

                    PRELIMINARY
STATEMENT.  The Borrower’s predecessor in interest Jones
Apparel Group USA, Inc., a Pennsylvania corporation (“Old Jones USA”), the
Borrower, the Additional Obligors, the lenders parties thereto and Wachovia
Bank, National Association (as successor in interest to First Union National
Bank), as administrative agent, were parties to an Amended and Restated
Five-Year Credit Agreement dated as of May 16, 2005 (the “Existing Credit
Agreement”).  Old Jones USA merged into the Borrower as of
January 1, 2007.  The Borrower, the Additional Obligors, the
parties hereto and Wachovia Bank, National Association, as Administrative Agent,
desire to amend the Existing Credit Agreement as herein set forth and to restate
it in its entirety giving effect to such amendment.

                     

                    NOW THEREFORE, the parties
hereto agree that, subject to the conditions set forth in Section 3 of Amendment
No. 3 to the Existing Credit Agreement, dated as of January 5, 2009, the
Existing Credit Agreement is hereby amended and restated to read in its entirety
as follows:

                     

                    ARTICLE
I DEFINITIONS

                     

                      SECTION
1.1.  Definitions.  The
following terms when used in this Agreement shall have the meanings assigned to
them below:

                     

                    “Additional Debt
Securities” means Debt incurred after the Amendment Date, arising under
or in connection with public or privately placed notes, debentures, bonds, or
debt securities or related indentures or other agreements (including in
connection with the issuance of exchange securities in connection with any
exchange offer registered under the Securities Act of 1933, as amended,
following a private placement of Additional Debt Securities).

                     

                    “Additional Obligors”
means the collective reference to Jones Apparel Group, Jones Apparel Group
Holdings, Nine West Footwear and Jones Retail in their capacities as co-obligors
under this Agreement.

                     

                    “Additional Secured
Agreements” means (a ) all Hedging Agreements, (b) all agreements and
documents relating to any treasury management services, (c) all Open Account
Agreements, (d) all letters of credit (other than Letters of Credit issued
hereunder) and (e) all other funded loans (other than Loans made hereunder), in
each case provided or issued by any of the Lenders and their Affiliates to or
for the account of any Credit Party or any of its Subsidiaries, and each
agreement or instrument delivered by any Credit Party or Subsidiary of a Credit
Party pursuant to the foregoing.

                     

                    
                      
                        
                        

                      

                      
                        
                        

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    “Additional Secured Agreement
Obligations” means, on any date, all payment and other obligations owing
by the Credit Parties or any of their Subsidiaries to any Lender or Affiliate of
a Lender or the Administrative Agent under any Additional Secured Agreement with
any Lender or Affiliate of a Lender; provided that payment
and other obligations (a) under the Borrower’s Hedging Agreements shall be
calculated as the current fair value of each such Agreement as of the date of
the Borrower’s most recent balance sheet, (b) under any Open Account Agreement
shall be limited to the OA Payment Obligations and (c) under any letters of
credit (other than Letters of Credit issued hereunder) shall be limited to
funded letters of credit.

                     

                    “Administrative Agent”
means Wachovia in its capacity as Administrative Agent hereunder, and any
successor thereto appointed pursuant to Section 13.9.

                     

                    “Administrative Agent’s
Office” means the office of the Administrative Agent specified in or
determined in accordance with the provisions of Section 14.1(c).

                     

                    “Affiliate” means,
with respect to any Person, any other Person (other than a Subsidiary) which
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person or any of its
Subsidiaries.  The term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.

                     

                    “Agreement” means this
Five-Year Credit Agreement, as amended, restated, supplemented or otherwise
modified from time to time.

                     

                    “Alternative Currency”
means (a) Pounds Sterling, (b) the euro or (c) any other lawful currency (other
than Dollars) acceptable to the Issuing Lenders which, in the case of this
clause (c), is freely transferable and convertible into Dollars in the United
States currency market and is freely available to all Issuing Lenders in the
London interbank deposit market.

                     

                    “Alternative Currency L/C
Commitment” means the lesser of (a) One Hundred Million Dollars
($100,000,000) and (b) the L/C Commitment.

                     

                    “Amendment Date” means
January 5, 2009, the date upon which Amendment No. 3 to this Agreement became
effective in accordance with its terms.

                     

                    “Applicable Law” means
all applicable provisions of constitutions, laws, statutes, ordinances, rules,
treaties, regulations, permits, licenses, approvals, interpretations and orders
of courts or Governmental Authorities and all orders and decrees of all courts
and arbitrators.

                     

                    “Applicable Margin”
means, for purposes of calculating (a) the Base Rate and LIBOR Rate for purposes
of Section 5.1(a), (b) the L/C Fee for purposes of Section 3.3(a) or (c) the
Commitment Fee for purposes of Section 5.3(a), the corresponding rate set forth
below:

                     

                     

                    
                      
                        
                        

                      

                      
                        2

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                     

                    
                      
                        
                          
                            	
                                    Applicable
      Margin Per Annum

                                  
	
                                    LIBOR
      Rate

                                  	
                                    Base
      Rate

                                  	
                                    Trade
      L/C Fee

                                  	
                                    Standby
      L/C Fee

                                  	
                                    Commitment
      Fee

                                  
	
                                    4.00%

                                  	
                                    3.00%

                                  	
                                    2.00%

                                  	
                                    4.00%

                                  	
                                    1.00%

                                  


                          

                        

                      

                    

                    


                    “Application” means an
application, in the form specified by any Issuing Lender from time to time,
requesting such Issuing Lender to issue a Letter of Credit.

                     

                    “Asset Coverage Ratio”
means the ratio of (a) the sum of gross inventory plus gross accounts receivable
(as of the date of determination) to (b) the aggregate principal amount of Loans
outstanding as of such date of determination.

                     

                    “Assignment and
Acceptance” shall have the meaning assigned thereto in Section
14.10(b)(ii).

                     

                    “Base Rate” means, at
any time, the highest of (a) the Prime Rate, (b) the sum of (i) the Federal
Funds Rate plus (ii) 1/2 of 1% or (c) the sum of (i) the one month LIBOR Rate
for a on such day (or if such day is not a Business Day, the immediately
preceding Business Day) plus (ii) 1%, provided that, for
the avoidance of doubt, the LIBOR Rate for any day shall be based on the rate
appearing on the British Bankers’ Association Interest Settlement Rates (or on
any successor or substitute page of such service, or any successor to or
substitute for such service, providing rate quotations comparable to those
currently provided on such page of such service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to deposits in such currency in the London interbank
market) at approximately 11:00 a.m. London time on such day; each change in the
Base Rate shall take effect simultaneously with the corresponding change or
changes in the Prime Rate, the Federal Funds Rate or the LIBOR
Rate.

                     

                    “Base Rate Loan” means
any Revolving Credit Loan bearing interest at a rate based upon the Base Rate as
provided in Section 5.1(a).

                     

                    “Borrower” means Jones
Apparel Group USA, Inc.

                     

                    “Borrowing Availability
Limit” means, on any date, the lesser of (a) $400,000,000 minus the
Additional Secured Agreement Obligations on such date and (b) the Indenture
Basket on such date.

                     

                    “Business Day” means
(a) any day other than a Saturday, Sunday or legal holiday on which banks in
Charlotte, North Carolina, Philadelphia, Pennsylvania and New York, New York,
are not authorized or required by law to remain closed for the conduct of their
commercial banking business, (b) with respect to all notices and determinations
in connection with, and payments of principal and interest on, any LIBOR Rate
Loan, the term “Business Day” shall
also exclude any day on which banks are not open for trading in Dollar deposits
in the London interbank market and (c) with respect to all notices and
determinations in connection with, and payment of principal and interest on, any
L/C Obligation denominated in an Alternative Currency, the term “Business Day” shall
also exclude any day on which banks in London do not provide quotations for
deposits denominated in such Alternative Currency.

                     

                     

                    
                      
                        
                        

                      

                      
                        3

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    “Canadian Security
Agreement” means the Canadian Security Agreement, dated as of January 5,
2009 by Jones Apparel Group Canada, LP, as grantor, in favor of the
Administrative Agent for the benefit of the Secured Parties.

                     

                    “Capital Expenditures”
means, for any Person for any period, the sum of, without duplication, (a) all
expenditures made, directly or indirectly, by such Person or any of its
Subsidiaries during such period for equipment, fixed assets, real property or
improvements, or for replacements or substitutions therefor or additions
thereto, that have been or should be, in accordance with GAAP, reflected as
additions to property, plant or equipment on a Consolidated balance sheet of
such Person or have a useful life of more than one year plus (b) the aggregate
principal amount of all Debt (including obligations under Capital Leases)
assumed or incurred in connection with any such expenditures.  For
purposes of this definition, the purchase price of equipment that is purchased
simultaneously with the trade-in of existing equipment or with insurance
proceeds shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price less the credit granted by the seller of
such equipment for the equipment being traded in at such time or the amount of
such proceeds, as the case may be.

                     

                    “Capital Lease” means,
with respect to the Credit Parties and their Subsidiaries, any lease of any
property that should, in accordance with GAAP, be classified and accounted for
as a capital lease on a Consolidated balance sheet of the Credit Parties and
their Subsidiaries.

                     

                    “Change in Control”
shall have the meaning assigned thereto in Section 12.1(h).

                     

                    “Closing Date” means
May 16, 2005.

                     

                    “Code” means the
Internal Revenue Code of 1986, and the rules and regulations thereunder, each as
amended, supplemented or otherwise modified from time to time.

                     

                    “Collateral” means all
“Collateral” referred to in the Collateral Documents.

                     

                    “Collateral Documents”
means the Security Agreement, the Canadian Security Agreement and each other
agreement that creates or purports to create a Lien in favor of the
Administrative Agent for the benefit of the Secured Parties.

                     

                    “Collateral Grantor”
means (a) the Borrower and (b) any Affiliate of the Borrower that is party to
the Security Agreement.

                     

                    “Commitment Fee” shall
have the meaning assigned thereto in Section 5.3(a).

                     

                    “Consolidated” means,
when used with reference to financial statements or financial statement items of
the Credit Parties and their Subsidiaries, such statements or items on a
consolidated basis in accordance with applicable principles of consolidation
under GAAP.

                     

                    “Correspondent” means
any financial institution designated by an Issuing Lender to act as such Issuing
Lender’s correspondent hereunder with respect to the distribution and payment of
Letters of Credit denominated in an Alternative Currency.

                     

                     

                    
                      
                        
                        

                      

                      
                        4

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    “Covenant Debt” means,
for any date of calculation, Debt with respect to the Credit Parties and their
Subsidiaries that would appear on a Consolidated balance sheet of the Credit
Parties and their Subsidiaries prepared as of such date in accordance with GAAP,
less the Debt of any Subsidiary (other than a wholly-owned Subsidiary of a
Credit Party) in which any Person other than a Credit Party and its Subsidiaries
has a joint interest or partnership interest or ownership interest, but
excluding from such deduction the pro rata amount of such Debt corresponding to
the ownership interest of the Credit Parties and their
Subsidiaries.

                     

                    “Covenant Debt to EBITDA
Ratio” means, for any date of calculation, Covenant Debt as of such date
divided by EBITDA for the period of four (4) consecutive fiscal quarters ending
on such date; provided that there
shall be excluded from the calculation of Covenant Debt to EBITDA Ratio for the
period ended on July 5, 2008, EBITDA (whether positive or negative) attributable
to any discontinued operations.

                     

                    “Credit Facility”
means the collective reference to the Revolving Credit Facility and the L/C
Facility.

                     

                    “Credit Parties” means
each of the Additional Obligors and the Borrower.

                     

                    “Debt” means, with
respect to the Credit Parties and their Subsidiaries at any date and without
duplication, the sum of the following calculated in accordance with GAAP: (a)
all liabilities, obligations and indebtedness, in each case for borrowed money
including but not limited to obligations evidenced by bonds, debentures, notes
or other similar instruments of any such Person, (b) all obligations to pay the
deferred purchase price of property or services of any such Person, except trade
liabilities arising in the ordinary course of business, (c) all obligations of
any such Person as lessee under Capital Leases, (d) all Debt of any other Person
secured by a Lien on any asset of any such Person, (e) all Guaranty Obligations
of any such Person, (f) all obligations, contingent or otherwise, of any such
Person relative to the amount of drawn letters of credit not reimbursed as
required by the terms thereof, including without limitation any Reimbursement
Obligation not reimbursed as required by the terms hereof, and banker’s
acceptances issued for the account of any such Person, and (g) all net
obligations incurred by any such Person pursuant to Hedging Agreements in
respect of interest rate hedges, less the Debt of any Subsidiary (other than a
wholly-owned Subsidiary of a Credit Party) in which any Person other than a
Credit Party and its Subsidiaries has a joint interest or partnership interest
or ownership interest, but excluding from such deduction the pro rata amount of
such Debt corresponding to the ownership interest of the Credit Parties and
their Subsidiaries.

                     

                    “Default” means any of
the events specified in Section 12.1 which with the passage of time, the giving
of notice or any other condition, would constitute an Event of
Default.

                     

                    “Default Excess”
means, with respect to any Non-Funding Lender, the excess, if any, of such
Non-Funding Lender’s ratable portion of the aggregate outstanding principal
amount of the Revolving Credit Loans of all Lenders (calculated as if all
Non-Funding Lenders (other than such Non-Funding Lender) had funded all of their
respective Defaulted Advances) over the aggregate outstanding principal amount
of all Revolving Credit Loans of such Non-Funding Lender.

                     

                    
                      
                        
                        

                      

                      
                        5

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    “Default Period”
means, with respect to any Non-Funding Lender, the period commencing on the date
of the applicable Funding Default and ending on the earlier of the following
dates: (i) the date on which (a) the Default Excess with respect to such
Non-Funding Lender has been reduced to zero (whether by the funding of any
Defaulted Advance by such Non-Funding Lender or by the non-pro-rata application
of any prepayment pursuant to Section 2.3) and (b) such Non-Funding Lender shall
have delivered to the Borrower and the Administrative Agent a written
reaffirmation of its intention to honor its obligations hereunder with respect
to its Revolving Credit Commitment; and (ii) the date on which the Borrower, the
Administrative Agent and the Required Lenders waive all Funding Defaults of such
Non-Funding Lender in writing.

                     

                    “Defaulted Advance”
shall have the meaning assigned thereto in Section 2.7.

                     

                    “Defaulting Lender”
means, at any time, any Lender that, at such time, shall, or any parent company
of such which shall, take any action or be the subject of any action or
proceeding of a type described in Section 12.1(i) or (j).

                     

                    “Dispute” shall have
the meaning assigned thereto in Section 14.6.

                     

                    “Dollar Amount” shall
mean (a) with regard to any Obligation denominated in Dollars, the amount
thereof and (b) with regard to any Obligation denominated in an Alternative
Currency, the amount of Dollars which is equivalent to the sum of (i) the amount
so expressed in an Alternative Currency at the applicable-quoted spot rate on
the appropriate page of the Reuter’s Screen as determined by the Administrative
Agent at the relevant time; plus (ii) any amounts owed by the Borrower pursuant
to Section 3.5(b).

                     

                    “Dollars” or “$” means, unless
otherwise qualified, dollars in lawful currency of the United
States.

                     

                    “EBITDA” means, with
respect to the Credit Parties and their Subsidiaries on a Consolidated basis for
any period, the sum of (a) Net Income for such period, plus (b) the sum of the
following to the extent deducted in the determination of Net Income: (i) income
and franchise taxes, (ii) Interest Expense and (iii) amortization, depreciation,
extraordinary non-cash losses and any other non-cash charges (including
amortization or write-off of goodwill, transaction expenses, covenants not to
compete and other intangible assets, and non-cash charges resulting from
purchase accounting related to any acquisition otherwise permitted pursuant to
the terms of this Agreement) less (c) the sum of (i) any items of extraordinary
gain which were included in determining Net Income, (ii) items of cash gains
from the sale of assets to the extent such gains exceed $50,000,000 during such
period and (iii) the income or loss of any Subsidiary (other than a wholly-owned
Subsidiary of a Credit Party) in which any Person other than a Credit Party and
its Subsidiaries has a joint interest or partnership interest or other ownership
interest, but excluding from such deduction the pro-rata amount of such income
or loss corresponding to the ownership interest of the Credit Parties and their
Subsidiaries.

                     

                    “EBITDAR” means, with
respect to the Credit Parties and their Subsidiaries on a Consolidated basis for
any period, the sum of (a) Net Income for such period, plus (b) the sum of the
following to the extent deducted in the determination of Net Income: (i) income
and franchise taxes, (ii) Interest Expense, (iii) amortization, depreciation,
extraordinary non-cash losses and any other non-cash charges (including
amortization or write-off of goodwill, transaction expenses, covenants not to
compete and other intangible assets, and non-cash charges resulting from
purchase accounting related to any acquisition otherwise permitted pursuant to
the terms of this Agreement) and (iv) Rental Expense (exclusive of any amounts
reflected in Interest Expense) less (c) the sum of (i) any items of
extraordinary gain which were included in determining Net Income, (ii) items of
cash gains from the sale of assets to the extent such gains exceed $50,000,000
during such period and (iii) the income or loss of any Subsidiary (other than a
wholly-owned Subsidiary of a Credit Party) in which any Person other than a
Credit Party and its Subsidiaries has a joint interest or partnership interest
or other ownership interest, but excluding from such deduction the pro-rata
amount of such income or loss corresponding to the ownership interest of the
Credit Parties and their Subsidiaries.

                     

                     

                    
                      
                        
                        

                      

                      
                        6

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    “Eligible Assignee”
means, with respect to any assignment of the rights, interest and obligations of
a Lender hereunder, a Person that is at the time of such assignment (a) a
commercial bank organized under the laws of the United States or any state
thereof, having combined capital and surplus in excess of $500,000,000, (b) a
commercial bank organized under the laws of any other country that is a member
of the Organization of Economic Cooperation and Development, or a political
subdivision of any such country, having combined capital and surplus in excess
of $500,000,000, (c) a finance company, insurance company or other financial
institution which in the ordinary course of business extends credit of the type
extended hereunder and that has total assets in excess of $1,000,000,000, (d)
already a Lender hereunder (whether as an original party to this Agreement or as
the assignee of another Lender) or an Affiliate of a Lender hereunder, (e) the
successor (whether by transfer of assets, merger or otherwise) to all or
substantially all of the commercial lending business of the assigning Lender,
(f) any SPC solely to the extent permitted by Section 14.10(h), or (g) any other
Person that has been approved in writing as an Eligible Assignee by the Borrower
and the Administrative Agent; provided, however, that neither
the Borrower nor an Affiliate of the Borrower shall qualify as an Eligible
Assignee.

                     

                    “Employee Benefit
Plan” means any employee benefit plan within the meaning of Section 3(3)
of ERISA which (a) is maintained for employees of the Borrower or any ERISA
Affiliate or (b) has at any time within the preceding six (6) years been
maintained for the employees of the Borrower or any current or former ERISA
Affiliate.

                     

                    “EMU” mean economic
and monetary union as contemplated in the Treaty on European Union.

                     

                    “Environmental Laws”
means any and all federal, state and local laws, statutes, ordinances, rules,
regulations, permits, licenses, approvals, binding interpretations and orders of
courts or Governmental Authorities, relating to the protection of human health
or the environment, including, but not limited to, requirements pertaining to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transportation, handling, reporting, licensing, permitting, investigation or
remediation of Hazardous Materials.

                     

                    “ERISA” means the
Employee Retirement Income Security Act of 1974, and the rules and regulations
thereunder, each as amended, supplemented or otherwise modified from time to
time.

                     

                     

                    
                      
                        
                        

                      

                      
                        7

                        
                          

                        

                      

                      
                        
                        

                      

                    

                    “ERISA Affiliate”
means any Person who together with the Borrower is treated as a single employer
within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section
4001(b) of ERISA.

                     

                    “euro” means the
single currency of the European Union as constituted by the Treaty on European
Union and as referred to in the legislative measures of the European Union for
the introduction of, changeover to or operation of the euro in one or more
member states.

                     

                    “Eurodollar Reserve
Percentage” means, for any day, the percentage (expressed as a decimal
and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in
effect for such day as prescribed by the Federal Reserve Board (or any
successor) for determining the maximum reserve requirement (including without
limitation any basic, supplemental or emergency reserves) in respect of
eurocurrency liabilities or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.

                     

                    “Event of Default”
means any of the events specified in Section 12.1, provided that any requirement
for passage of time, giving of notice, or any other condition, has been
satisfied.

                     

                    “Existing Debt
Securities” means the 4.250% Senior Notes due 2009, the 5.125% Senior
Notes due 2014, and the 6.125% Senior Notes due 2034 of Jones Apparel
Group.

                     

                    “Existing Loans” shall
have the meaning assigned thereto in Section 6.2(f).

                     

                    “Extensions of Credit”
means, as to any Lender at any time, (a) an amount equal to the sum of (i) the
aggregate principal amount of all Revolving Credit Loans made by such Lender
then outstanding, and (ii) such Lender’s Revolving Credit Commitment Percentage
of the Dollar Amount of the L/C Obligations then outstanding, or (b) the making
of any Loan or participation in any Letter of Credit by such Lender, as the
context requires.

                     

                    “FDIC” means the
Federal Deposit Insurance Corporation, or any successor thereto.

                     

                    “Federal Funds Rate”
means, the rate per annum (rounded upwards, if necessary, to the next higher
1/100th of 1%) representing the daily effective federal funds rate as quoted by
the Administrative Agent and confirmed in Federal Reserve Board Statistical
Release H.15 (519) or any successor or substitute publication selected by the
Administrative Agent.  If, for any reason, such rate is not available,
then “Federal Funds
Rate” shall mean a daily rate which is determined, in the opinion of the
Administrative Agent, to be the rate at which federal funds are being offered
for sale in the national federal funds market at 9:00 a.m. (Charlotte
time).  Rates for weekends or holidays shall be the same as the rate
for the most immediate preceding Business Day.

                     

                    “Fiscal Year” means
the fiscal year of the Credit Parties and their Subsidiaries ending on December
31.

                     

                    “Foreign Lender” means
any Lender that is organized under the laws of a jurisdiction other than that in
which the Borrower is located.  For purposes of this definition, the
United States of America, each state thereof and the District of Columbia shall
be deemed to constitute a single jurisdiction.

                     

                     

                    
                      
                        
                        

                      

                      
                        8

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    “Funding Default”
shall have the meaning assigned thereto in Section 2.7.

                     

                    “GAAP” means generally
accepted accounting principles, as recognized by the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board,
consistently applied and maintained on a consistent basis for the Credit Parties
and their Subsidiaries throughout the period indicated.

                     

                    “Governmental
Approvals” means all authorizations, consents, approvals, licenses and
exemptions of, registrations and filings with, and reports to, all Governmental
Authorities.

                     

                    “Governmental
Authority” means any nation, province, state or political subdivision
thereof, and any government or any Person exercising executive, legislative,
regulatory or administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.

                     

                    “Granting Lender”
shall have the meaning assigned thereto in Section 14.10(h).

                     

                    “Guaranty Obligation”
means, with respect to the Credit Parties and their Subsidiaries, without
duplication, any obligation, contingent or otherwise, of any such Person
pursuant to which such Person has directly or indirectly guaranteed any Debt or
other obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of any
such Person (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
condition or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part); provided, that the term Guaranty Obligation shall not include (i)
endorsements for collection or deposit in the ordinary course of business or
(ii) a contractual commitment by one Person to invest in another Person for so
long as such investment is expected to constitute a permitted investment under
Section 11.4.

                     

                    “Hazardous Materials”
means any substances or materials (a) which are or become defined as hazardous
wastes, hazardous substances, pollutants, contaminants, chemical substances or
mixtures or toxic substances under any Environmental Law, (b) which are toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise harmful to human health or the environment and are or
become regulated by any Governmental Authority, (c) the presence of which
require investigation or remediation under any Environmental Law, (d) the
discharge or emission or release of which requires a permit or license under any
Applicable Law or other Governmental Approval, or (e) which contain, without
limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam
insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude
oil, nuclear fuel, natural gas or synthetic gas.

                     

                     

                    
                      
                        
                        

                      

                      
                        9

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    “Hedging Agreement”
means any agreement with respect to an interest rate or currency swap, collar,
cap, floor or forward rate agreement or other agreement regarding the hedging of
interest rate or currency risk exposure executed in connection with hedging the
interest rate or currency exposure of any Credit Party, and any confirming
letter executed pursuant to such hedging agreement, all as amended, restated or
otherwise modified from time to time.

                     

                    “Indenture” means the
Indenture dated as of November 22, 2004 (as the same may be amended,
supplemented or otherwise modified from time to time) among Jones Apparel Group,
Jones Apparel Group Holdings, the Borrower, Nine West Footwear and Jones Retail,
as issuers, and SunTrust Bank, as trustee.

                     

                    “Indenture Basket”
means, at any time, the maximum amount of Obligations and Additional Secured
Agreement Obligations permitted to be secured by the Credit Parties and their
Subsidiaries pursuant to the Indenture without any requirement to equally and
ratably secure any securities issued pursuant to the Indenture.

                     

                    “Interest Coverage
Ratio” means, as of the last day of any fiscal quarter, EBITDAR for the
period of four consecutive fiscal quarters ending on such date divided by the
sum of (a) Interest Expense less the amortization of non-cash items included in
“Interest Expense” (including, but not limited to, amortization of debt issuance
costs) and (b) Rental Expense (exclusive of any amounts reflected in Interest
Expense), both for the period of four consecutive fiscal quarters ending on such
date; provided
that there shall be excluded from the calculation of Interest Coverage Ratio for
the period ended on July 5, 2008, EBITDAR (whether positive or negative) and any
items of Interest Expense or Rental Expense attributable to any discontinued
operations.

                     

                    “Interest Expense”
means, for any period, total interest expense (including, without limitation,
interest expense attributable to Capital Leases) determined on a consolidated
basis, without duplication, for the Credit Parties and their Subsidiaries in
accordance with GAAP less the interest expense of any Subsidiary (other than a
wholly-owned Subsidiary of a Credit Party) in which any Person other than a
Credit Party and its Subsidiaries has a joint interest or partnership interest
or other ownership interest, but excluding from such deduction the pro-rata
amount of such interest expense corresponding to the ownership interest of the
Credit Parties and their Subsidiaries.

                     

                    “Interest Period”
shall have the meaning assigned thereto in Section 5.1(b).

                     

                    “ISP 98” means the
International Standby Practices (1998 Revision, effective January 1, 1999),
International Chamber of Commerce Publication No. 590.

                     

                    “Issuing Lender” means
Wachovia, Citibank, N.A., JPMorgan Chase Bank, N.A. and Bank of America, N.A.,
each in its capacity as issuer of any Letter of Credit, and any other Lender
mutually acceptable and on terms satisfactory to the Borrower, the
Administrative Agent and such Lender; and Issuing Lenders means all such
Lenders.

                     

                    “Jones Apparel Group”
means Jones Apparel Group, Inc., a Pennsylvania corporation.

                     

                    “Jones Apparel Group
Holdings” means Jones Apparel Group Holdings, Inc., a Delaware
corporation.

                     

                     

                    
                      
                        
                        

                      

                      
                        10

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    “Jones Retail” means
Jones Retail Corporation, a New Jersey corporation.

                     

                    “L/C Commitment” means
Four Hundred Fifty Million Dollars ($450,000,000).

                     

                    “L/C Facility” means
the letter of credit facility established pursuant to Article III
hereof.

                     

                    “L/C Fee” shall have
the meaning assigned thereto in Section 3.3(a).

                     

                    “L/C Obligations”
means at any time, an amount equal to the sum of (a) the aggregate undrawn and
unexpired amount of the then outstanding Letters of Credit and (b) the aggregate
amount of drawings under Letters of Credit which have not then been reimbursed
pursuant to Section 3.5.

                     

                    “L/C Participants”
means the collective reference to all the Lenders having a Revolving Credit
Commitment other than the applicable Issuing Lender.

                     

                    “Lender” means each
Person executing this Agreement as a Lender set forth on the signature pages
hereto and each Person that hereafter becomes a party to this Agreement as a
Lender pursuant to Section 14.10 other than any party hereto that ceases to be a
party hereto pursuant to any Assignment and Acceptance.

                     

                    “Lending Office”
means, with respect to any Lender, for Revolving Credit Loans, the office of
such Lender maintaining such Lender’s Revolving Credit Commitment Percentage of
the Revolving Credit Loans.

                     

                    “Letters of Credit”
shall have the meaning assigned thereto in Section 3.1.

                     

                    “LIBOR” means the rate
of interest per annum determined on the basis of the rate for deposits in
Dollars or an Alternative Currency (other than euro) in minimum amounts of at
least $5,000,000 or the approximate Dollar Amount thereof, in the case of an
Alternative Currency, for a period equal to the applicable Interest Period which
appears on the British Bankers’ Association Interest Settlement Rates (or on any
successor or substitute page of such service, or any successor to or substitute
for such service, providing rate quotations comparable to those currently
provided on such page of such service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to deposits in such currency in the London interbank market) at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of the applicable Interest Period (rounded upward, if necessary, to the
nearest one hundredth of one percent (1/100%)).  If, for any reason,
such rate does not appear on British Bankers’ Association Interest Settlement
Rates, then “LIBOR” shall be
determined by the Administrative Agent to be the arithmetic average (rounded
upward, if necessary, to the nearest one-hundredth of one percent (1/100%)) of
the rate per annum at which deposits in Dollars or an Alternative Currency would
be offered by the Reference Group in the London interbank market to the
Administrative Agent as of approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of the applicable Interest Period for a
period equal to such Interest Period and in an amount substantially equal to the
amount of the applicable Revolving Credit Loan.

                     

                     

                    
                      
                        
                        

                      

                      
                        11

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                     

                    “LIBOR Rate” means a
rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%)
determined by the Administrative Agent pursuant to the following
formula:

                     

                    
                      
                        	
                                LIBOR
      RATE      

                              	
                                =

                              	
                                LIBOR

                              
	 
      	 
      	
                                1.00
      – Eurodollar Reserve Percentage

                              


                      

                       

                    

                    “LIBOR Rate Loan”
means any Revolving Credit Loan bearing interest at a rate based upon the LIBOR
Rate as provided in Section 5.1(a).

                     

                    “Lien” means, with
respect to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.  For the purposes of
this Agreement, a Person shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, Capital Lease or other title retention
agreement relating to such asset.

                     

                    “Loan” means a
Revolving Credit Loan.

                     

                    “Loan Documents”
means, collectively, this Agreement, the Notes, the Collateral Documents, the
Applications and each other document, instrument and agreement executed and
delivered by any Credit Party, its Subsidiaries or their counsel in connection
with this Agreement, all as may be amended, restated, supplemented or otherwise
modified.

                     

                    “Material Adverse
Effect” means, with respect to the Credit Parties or any of their
Subsidiaries, a material adverse effect on the business, assets, operations or
financial condition of the Credit Parties and their Subsidiaries taken as a
whole or the ability of any such Person to perform its obligations under the
Loan Documents, in each case to which it is a party.

                     

                    “Multiemployer Plan”
means a “multiemployer
plan” as defined in Section 4001(a)(3) of ERISA to which the Borrower or
any ERISA Affiliate is making (or has made), or is accruing (or has accrued) an
obligation to make, contributions either presently or within the preceding six
years.

                     

                    “Net Income” means,
with respect to the Credit Parties and their Subsidiaries for any period, the
Consolidated net income (or loss) of the Credit Parties and their Subsidiaries
for such period determined in accordance with GAAP; provided, that there
shall be excluded from net income (or loss) of a Person (the “computing
Person”), the income (or loss) of any Person (other than a Subsidiary of the
computing Person) in which the computing Person has an ownership interest unless
received by the computing Person in a cash distribution.

                     

                    “Net Worth” means,
with respect to the Credit Parties and their Subsidiaries, as of any date, the
total shareholders’ equity that would appear on a Consolidated balance sheet of
the Credit Parties and their Subsidiaries prepared as of such date in accordance
with GAAP.

                     

                    “Nine West Footwear”
means Nine West Footwear Corporation, a Delaware corporation.

                     

                     

                    
                      
                        
                        

                      

                      
                        12

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                     

                    “Non-Funding Lender”
shall have the meaning assigned thereto in Section 2.7.

                     

                    “Note” means a
Revolving Credit Note.

                     

                    “Notice of Account
Designation” shall have the meaning assigned thereto in
Section 2.2(b).

                     

                    “Notice of
Conversion/Continuation” shall have the meaning assigned thereto in
Section 5.2.

                     

                    “Notice of Prepayment”
shall have the meaning assigned thereto in Section 2.3(c).

                     

                    “Notice of Revolving Credit
Borrowing” shall have the meaning assigned thereto in
Section 2.2(a).

                     

                    “Obligations” means,
in each case, whether now in existence or hereafter arising: (a) the principal
of and interest on (including interest that would accrue but for commencement of
bankruptcy and whether or not allowed or allowable in the bankruptcy) the Loans,
(b) the L/C Obligations, (c) all payment and other obligations owing by the
Credit Parties to any Lender or Affiliate of a Lender or the Administrative
Agent under any Hedging Agreement with any Lender or Affiliate of a Lender
(which such Hedging Agreement is permitted hereunder), and (d) all other fees
and commissions (including attorney’s fees), charges, indebtedness, loans,
liabilities, financial accommodations, obligations, covenants and duties owing
by the Credit Parties to the Lenders or the Administrative Agent, of every kind,
nature and description, direct or indirect, absolute or contingent, due or to
become due, contractual or tortious, liquidated or unliquidated, and whether or
not evidenced by any note, in each case under or in respect of this Agreement,
any Note, any Letter of Credit or any of the other Loan Documents.

                     

                    “Officer’s Compliance
Certificate” shall have the meaning assigned thereto in
Section 8.2.

                     

                    “Open Account
Agreement” means an open account paying agency agreement between or among
a Lender or any of its Affiliates and the Credit Parties and their Subsidiaries,
as identified to the Administrative Agent as an “Open Account Agreement” for
purposes of this Agreement by the Borrower from time to time, pursuant to which
the Credit Parties and their Subsidiaries (the “Jones Parties”) have
committed to pay such Lender or its Affiliates (i) the full face amount of any
account receivable purchased by such Lender or its Affiliates from certain
vendors of the Jones Parties, (ii) the amount of any overdrafts created by such
Lender or its Affiliates to pay vendors other than those referred to in clause
(i) above, and (iii) certain processing fees thereunder ((i), (ii) and (iii),
collectively, the “OA
Payment Obligations”).

                     

                    “Operating Lease”
shall mean, as to any Person, as determined in accordance with GAAP, any lease
of property (whether real, personal or mixed) by such Person as lessee which is
not a Capital Lease.

                     

                    “Other Taxes” shall
have the meaning assigned thereto in Section 5.12(b).

                     

                     

                    
                      
                        
                        

                      

                      
                        13

                        
                          

                        

                      

                      
                        
                        

                      

                    

                    “Outstanding Letters of
Credit” means each letter of credit described on Schedule 1.1(b) and
outstanding as of the Closing Date.

                     

                    “PBGC” means the
Pension Benefit Guaranty Corporation referred to and defined in ERISA or any
successor agency.

                     

                    “Pension Plan” means
any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to
the provisions of Title IV of ERISA or Section 412 of the Code.

                     

                    “Permitted Investment
Policy” of the Credit Parties means the investment policy of the Credit
Parties as in effect on the Amendment Date which has been approved by the Board
of Directors of Jones Apparel Group, as amended, restated, supplemented or
otherwise modified from time to time.

                     

                    “Permitted Lines of
Business” shall have the meaning assigned thereto in Section
9.9.

                     

                    “Person” means an
individual, corporation, limited liability company, partnership, association,
trust, business trust, joint venture, joint stock company, pool, syndicate, sole
proprietorship, unincorporated organization, Governmental Authority or any other
form of entity or group thereof.

                     

                    “Pounds Sterling”
means, unless otherwise qualified, pounds sterling in lawful currency of the
United Kingdom.

                     

                    “Prime Rate” means, at
any time, the rate of interest per annum publicly announced from time to time by
Wachovia as its prime rate in effect at its principal office in Charlotte, North
Carolina.  Each change in the Prime Rate shall be effective as of the
opening of business on the day such change in the Prime Rate
occurs.  The parties hereto acknowledge that the rate announced
publicly by Wachovia as its Prime Rate is an index or base rate and shall not
necessarily be its lowest or best rate charged to its customers or other
banks.

                     

                    “Prior Credit
Agreement” means the Three-Year Credit Agreement dated as of June 10,
2003 among Old Jones USA, the Borrower, the Additional Obligors (other than
Jones Retail), the lenders parties thereto and Wachovia Bank, National
Association (as successor in interest to First Union Bank), as administrative
agent.

                     

                    “Prior Lenders” means,
collectively, the lenders party to the Prior Credit Agreement.

                     

                    “Reference Group”
shall mean the Lenders party to this Agreement on the Amendment
Date.

                     

                    “Register” shall have
the meaning assigned thereto in Section 2.4(a).

                     

                    “Reimbursement
Obligation” means the obligation of the Borrower to reimburse each
Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of
Credit.

                     

                    “Rental Expense”
means, for any period, total rental expense (net of sublease income) determined
on a consolidated basis, without duplication, for the Credit Parties and their
Subsidiaries in accordance with GAAP less the rental expense of any Subsidiary
(other than a wholly-owned Subsidiary of a Credit Party) in which any Person
other than a Credit Party and its Subsidiaries has a joint interest or
partnership interest or other ownership interest, but excluding from such
deduction the pro-rata amount of such rental expense corresponding to the
ownership interest of the Credit Parties and their Subsidiaries.

                     

                     

                    
                      
                        
                        

                      

                      
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                    “Required Lenders”
means, at any date, any combination of Lenders whose Revolving Credit Commitment
Percentage equals at least fifty-one percent (51%) of the Revolving Credit
Commitment or if the Revolving Credit Commitment has been terminated, any
combination of Lenders who collectively hold at least fifty-one percent (51%) of
the aggregate unpaid principal amount of the Extensions of Credit; provided that the
Commitment of, and the portion of the Extensions of Credit held or deemed held
by, any Lender that is in default in its obligation to fund Loans hereunder
shall be excluded for purposes of making a determination of Required
Lenders.

                     

                    “Responsible Officer”
means any of the following: the chairman, president, chief executive officer,
chief financial officer or treasurer or vice president and corporate controller
of the Borrower or Jones Apparel Group or any other officer of the Borrower or
Jones Apparel Group reasonably acceptable to the Administrative
Agent.

                     

                    “Revolving Credit
Commitment” means (a) as to any Lender, the obligation of such Lender to
make Revolving Credit Loans to the Borrower and to participate in Letters of
Credit hereunder in an aggregate principal amount at any time outstanding not to
exceed the amount set forth opposite such Lender’s name on Schedule 1.1(a)
hereto as such amount may be increased, reduced or modified at any time or from
time to time pursuant to the terms hereof and (b) as to all Lenders, the
aggregate Revolving Credit Commitment of all Lenders to make Revolving Credit
Loans, as such amount may be reduced at any time or from time to time pursuant
to the terms hereof.  The Revolving Credit Commitment of all Lenders
on the Amendment Date shall be Six Hundred Million Dollars
($600,000,000).

                     

                    “Revolving Credit Commitment
Percentage” means, as to any Lender at any time, the ratio of (a) the
amount of the Revolving Credit Commitment of such Lender to (b) the Revolving
Credit Commitment of all of the Lenders.

                     

                    “Revolving Credit
Facility” means the revolving credit facility established pursuant to
Article II hereof.

                     

                    “Revolving Credit
Loans” means any revolving loan made to the Borrower pursuant to Section
2.1, and all such revolving loans collectively as the context
requires.

                     

                    “Revolving Credit
Notes” means the collective reference to the Revolving Credit Notes made
by the Borrower under this Agreement payable to the order of any such Lender
requesting such note, substantially in the form of Exhibit A hereto, evidencing
the obligation owed to such Lender under the Revolving Credit Facility, and any
amendments and modifications thereto, any substitutes therefor, and any
replacements, restatements, renewals or extension thereof, in whole or in part;
“Revolving Credit
Note” means any of such Revolving Credit Notes.

                     

                     

                    
                      
                        
                        

                      

                      
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                    “Revolving Credit Termination
Date” means the earliest of the dates referred to in Section
2.6.

                     

                    “Secured Obligations”
has the meaning specified in Section 2 of the Security Agreement and, to the
extent not inconsistent with the Security Agreement, in Section 2 of the
Canadian Security Agreement.

                     

                    “Secured Parties”
means (a) the Administrative Agent, (b) each Lender and (c) each Affiliate of a
Lender that is a party to an Additional Secured Agreement.

                     

                    “Security Agreement”
means the Security Agreement, dated as of January 5, 2009 among the Collateral
Grantors, as grantors, in favor of the Administrative Agent for the benefit of
the Secured Parties.

                     

                    “Significant
Subsidiary” means each Subsidiary of the Jones Apparel Group that is a
“significant subsidiary” as defined in Regulation S-X of the Securities Act of
1933.

                     

                    “SPC” shall have the
meaning assigned thereto in Section 14.10(h).

                     

                    “Subordinated Debt”
means the collective reference to Debt on Schedule 7.1(p) hereof designated as
Subordinated Debt and any other Debt of the Credit Parties or any Subsidiary
thereof subordinated in right and time of payment to the Obligations and
otherwise permitted hereunder.

                     

                    “Subsidiary” means,
with respect to any Person (the “parent”) at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be Consolidated with those of the parent in
the parent’s Consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than
fifty percent (50%) of the equity or more than fifty percent (50%) of the
ordinary voting power or, in the case of a partnership, more than fifty percent
(50%) of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise controlled, by
the parent or one or more subsidiaries of the parent. Unless otherwise qualified
references to “Subsidiary” or “Subsidiaries” herein
shall refer to those of the Borrower.

                     

                    “Syndication Agents”
means JPMorgan Chase Bank, N.A. and Citibank, N.A., each in their capacity as
syndication agent hereunder, and any successor thereto.

                     

                    “Taxes” shall have the
meaning assigned thereto in Section 5.12(a).

                     

                    “Termination Event”
means: (a) a “Reportable Event”
described in Section 4043 of ERISA, or (b) the withdrawal of the Borrower or any
ERISA Affiliate from a Pension Plan during a plan year in which it was a “substantial employer”
as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate, or the appointment of
a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event
or condition which would constitute grounds under Section 4042(a) of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan, or (f) the partial or complete withdrawal of the Borrower or any ERISA
Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (h) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA, or (i) any event or condition which results in
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.

                     

                     

                    
                      
                        
                        

                      

                      
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                    “Treaty on European
Union” means the Treaty of Rome of March 25, 1957, as amended by the
Single European Act 1986 and the Maastricht Treaty (signed February 7, 1992), as
amended from time to time.

                     

                    “UCC” means the
Uniform Commercial Code as in effect in the State of New York, as amended,
restated or otherwise modified from time to time.

                     

                    “Uniform Customs”
means, with respect to Letters of Credit issued prior to the Amendment Date, the
Uniform Customs and Practice for Documentary Credits (1994 Revision),
International Chamber of Commerce Publication No. 500, and with respect to
Letters of Credit issued on or after the Amendment Date, the Uniform Customs and
Practice for Documentary Credits (2007 Revision), International Chamber of
Commerce Publication No. 600.

                     

                    “United States” means
the United States of America.

                     

                    “Wachovia” means
Wachovia Bank, National Association, a national banking association, and its
successors.

                     

                    “Wholly-Owned” means,
with respect to a Subsidiary, that all of the shares of capital stock or other
ownership interests of such Subsidiary (other than directors’ qualifying shares)
are, directly or indirectly, owned or controlled by any Credit Party and/or one
or more of its Wholly-Owned Subsidiaries.

                     

                    SECTION
1.2.  General.  Unless
otherwise specified, a reference in this Agreement to a particular section,
subsection, Schedule or Exhibit is a reference to that section, subsection,
Schedule or Exhibit of this Agreement.  Wherever from the context it
appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, feminine and
neuter.  Any reference herein to “Charlotte time” shall
refer to the applicable time of day in Charlotte, North Carolina.

                     

                    SECTION
1.3.  Other
Definitions and Provisions.  (a)  Use of Capitalized
Terms.  Unless otherwise defined therein, all capitalized terms
defined in this Agreement shall have the defined meanings when used in this
Agreement and the other Loan Documents or any certificate, report or other
document made or delivered pursuant to this Agreement.

                     

                    (b)           Miscellaneous.  The
words “hereof”,
“herein” and
“hereunder” and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement.

                     

                    
                      
                        
                        

                      

                      
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                    (c)           Any
reference or usage of the word “amount” herein as it
pertains to any Obligation denominated in an Alternative Currency shall be
deemed to be a reference or usage of the term “Dollar
Amount.”

                     

                    


                     

                    ARTICLE
II REVOLVING CREDIT FACILITY

                     

                    SECTION
2.1.  Revolving Credit
Loans.  Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Revolving Credit Loans in Dollars to the
Borrower from time to time from the Closing Date through the Revolving Credit
Termination Date as requested by the Borrower in accordance with the terms of
Section 2.2; provided, that (a)
the aggregate principal amount of all outstanding Revolving Credit Loans (after
giving effect to any amount requested) shall not exceed the Borrowing
Availability Limit in effect at such time and (b) the principal amount of
outstanding Revolving Credit Loans from any Lender to the Borrower shall not at
any time exceed such Lender’s Revolving Credit Commitment less such Lender’s
participations in outstanding L/C Obligations.  Each Revolving Credit
Loan by a Lender shall be in a principal amount equal to such Lender’s Revolving
Credit Commitment Percentage of the aggregate principal amount of Revolving
Credit Loans requested on such occasion.  Subject to the terms and
conditions hereof, the Borrower may borrow, repay and reborrow Revolving Credit
Loans hereunder until the Revolving Credit Termination Date.

                     

                    SECTION
2.2.  Procedure for Advances of
Revolving Credit Loans.  (a)  Requests for
Borrowing.  The Borrower shall give the Administrative Agent
irrevocable prior written notice in the form attached hereto as Exhibit B (a
“Notice of Revolving
Credit Borrowing”) not later than 11:00 a.m. (Charlotte time) (i) on the
same Business Day as each Base Rate Loan and (ii) at least three (3) Business
Days before each LIBOR Rate Loan, of its intention to borrow, specifying (A) the
date of such borrowing, which shall be a Business Day, (B) the amount of such
borrowing, which shall be in an amount equal to the unused amount of the
Revolving Credit Commitment, or if less, (x) with respect to Base Rate Loans in
an aggregate principal amount of $1,000,000 or a whole multiple of $250,000 in
excess thereof and (y) with respect to LIBOR Rate Loans in an aggregate
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof, (C) whether such Revolving Credit Loan is to be a LIBOR Rate Loan or
Base Rate Loan, and (D) in the case of a LIBOR Rate Loan, the duration of the
Interest Period applicable thereto.  Notices received after 11:00 a.m.
(Charlotte time) shall be deemed received on the next Business
Day.  The Administrative Agent shall promptly notify the Lenders of
each Notice of Revolving Credit Borrowing.

                     

                    (b)           Disbursement of Revolving
Credit Loans.  Not later than 2:00 p.m. (Charlotte time) on the
proposed borrowing date, each Lender will make available to the Administrative
Agent, for the account of the Borrower, at the office of the Administrative
Agent in funds immediately available to the Administrative Agent, such Lender’s
Revolving Credit Commitment Percentage of the Revolving Credit Loans to be made
on such borrowing date.  The Borrower hereby irrevocably authorizes
the Administrative Agent to disburse the proceeds of each borrowing requested
pursuant to this Section 2.2 in immediately available funds by crediting or
wiring such proceeds to the deposit account of the Borrower identified in the
most recent notice of account designation, substantially in the form of Exhibit
C hereto (a “Notice of
Account Designation”), delivered by the Borrower to the Administrative
Agent or as may be otherwise agreed upon by the Borrower and the Administrative
Agent from time to time.  Subject to Section 5.7 hereof, the
Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Revolving Credit Loan requested pursuant to this Section 2.2 for
which any Lender is responsible to the extent that such Lender has not made
available to the Administrative Agent its Revolving Credit Commitment Percentage
of such Revolving Credit Loan.

                     

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
2.3.  Repayment of Revolving
Credit Loans.  (a)  Repayment on Termination
Date.  The Borrower shall repay the outstanding principal
amount of all Revolving Credit Loans in full on the Revolving Credit Termination
Date, with all accrued but unpaid interest thereon.

                     

                    (b)           Mandatory Repayment of
Excess Extensions of Credit.  (i)  If at any time the
outstanding principal amount of all Revolving Credit Loans plus the Dollar
Amount of all outstanding L/C Obligations exceeds the Revolving Credit
Commitment, the Borrower shall repay immediately upon notice from the
Administrative Agent, by payment to the Administrative Agent for the account of
the Lenders, Revolving Credit Loans and/or furnish cash collateral reasonably
satisfactory to the Administrative Agent or repay the L/C Obligations in an
amount equal to such excess.  Such cash collateral shall be applied in
accordance with Section 12.2(b).

                     

                    (ii)           Excess
Alternative Currency Letters of Credit.  If the Administrative Agent
shall determine that the outstanding principal Dollar Amount of all outstanding
Letters of Credit denominated in an Alternative Currency exceeds one hundred and
five percent (105%) of the lesser of (A) the L/C Commitment less the sum of the
outstanding principal amount of all L/C Obligations denominated in Dollars and
(B) the Alternative Currency L/C Commitment, in each case as of the last
Business Day of any calendar month during the term hereof, then not later than
three (3) Business Days after notice of the amount of such excess from the
Administrative Agent to the Borrower, the Borrower shall deposit an amount in
Dollars equal to such excess with the Administrative Agent to be held as cash
collateral in accordance with Section 12.2(b).

                     

                    (c)           Optional
Repayments.  The Borrower may at any time and from time to time
repay the Revolving Credit Loans, in whole or in part, upon at least three (3)
Business Days’ irrevocable notice to the Administrative Agent with respect to
LIBOR Rate Loans and one (1) Business Day’s irrevocable notice with respect to
Base Rate Loans, in the form attached hereto as Exhibit D (a “Notice of
Prepayment”) specifying the date and amount of repayment and whether the
repayment is of LIBOR Rate Loans, Base Rate Loans, or a combination thereof,
and, if of a combination thereof, the amount allocable to each.  Upon
receipt of such notice, the Administrative Agent shall promptly notify each
Lender.  If any such notice is given, the amount specified in such
notice shall be due and payable on the date set forth in such
notice.  Partial repayments shall be in an aggregate amount of
$1,000,000 or a whole multiple of $250,000 in excess thereof with respect to
Base Rate Loans and $5,000,000 or a whole multiple of $1,000,000 in excess
thereof with respect to LIBOR Rate Loans.

                     

                    (d)           Limitation on Repayment of
LIBOR Rate Loans.  The Borrower may not repay any LIBOR Rate
Loan on any day other than on the last day of the Interest Period applicable
thereto unless such repayment is accompanied by any amount required to be paid
pursuant to Section 5.10 hereof.

                     

                     

                    
                      
                        
                        

                      

                      
                        19

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    SECTION
2.4.  Evidence of
Debt.  (a)  The Administrative Agent shall maintain a
register and a subaccount therein for each Lender (the “Register”), in which
shall be recorded (i) the amount of each Revolving Credit Loan made hereunder,
including each Revolving Credit Loan evidenced by a Revolving Credit Note, and
each Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender’s share
thereof.

                     

                    (b)           The
entries made in the Register and the accounts of each Lender maintained pursuant
to Section 2.4(a) shall, to the extent permitted by applicable law, be prima
facie evidence of the existence and amounts of the obligations of the Borrowers
therein recorded, absent manifest error; provided, however, that the failure of
the Administrative Agent to maintain the Register or any such account, or any
error therein, shall not in any manner affect the obligation of the Borrower to
repay (with applicable interest) the Revolving Credit Loans made to the Borrower
in accordance with the terms of this Agreement.

                     

                    (c)           The
Borrower hereby agrees that, upon the request to the Administrative Agent by any
Lender, the Borrower will execute and deliver to such Lender a Revolving Credit
Note of such Borrower evidencing the Revolving Credit Loans of such Lender,
substantially in the form of Exhibit A.

                     

                    SECTION
2.5.  Permanent Reduction of the
Revolving Credit Commitment.  (a)  Voluntary
Reduction.  The Borrower shall have the right at any time and
from time to time, upon at least five (5) Business Days’ prior written notice to
the Administrative Agent, to permanently reduce, without premium or penalty, (i)
the entire Revolving Credit Commitment at any time or (ii) portions of the
Revolving Credit Commitment, from time to time, in an aggregate principal amount
not less than $5,000,000 or any whole multiple of $1,000,000 in excess
thereof.

                     

                    (b)           Each
permanent reduction of the Revolving Credit Commitment made pursuant to this
Section 2.5 shall be accompanied, if necessary, by a payment of principal
sufficient to reduce the aggregate outstanding Revolving Credit Loans and L/C
Obligations, as applicable, after such reduction to the Revolving Credit
Commitment as so reduced and if the Revolving Credit Commitment as so reduced is
less than the aggregate amount of all outstanding Letters of Credit, the
Borrower shall be required to deposit in a cash collateral account opened by the
Administrative Agent an amount equal to the amount by which the aggregate then
undrawn and unexpired amount of such Letters of Credit exceeds the Revolving
Credit Commitment as so reduced.  Any reduction of the Revolving
Credit Commitment to zero (including upon termination of the Revolving Credit
Facility on the Revolving Credit Termination Date) shall be accompanied by
payment of all outstanding Revolving Credit Loans (and furnishing of cash
collateral satisfactory to the Administrative Agent for all L/C Obligations) and
shall result in the termination of the Revolving Credit Commitment and the
Revolving Credit Facility.  Such cash collateral shall be applied in
accordance with Section 12.2(b).  If the reduction of the Revolving
Credit Commitment requires the repayment of any LIBOR Rate Loan, such repayment
shall be accompanied by any amount required to be paid pursuant to Section 5.10
hereof.

                     

                    (c)           Non-Ratable
Reduction.  The Borrower shall have the right, at any time,
upon at least ten Business Days’ notice to a Defaulting Lender (with a copy to
the Administrative Agent), to terminate in whole such Lender’s
Commitments.  Such termination shall be effective, (x) with respect to
such Lender’s unused Commitment, on the date set forth in such notice, provided,
however, that such date shall be no earlier than ten Business Days after receipt
of such notice and (y) with respect to each Loan outstanding to such Lender, in
the case of Base Rate Loans, on the date set forth in such notice and, in the
case of LIBOR Rate, on the last day of the then current Interest Period relating
to such Loan.  Upon termination of a Lender’s Commitments under this
Section 2.5(c), the Borrower will pay or cause to be paid all principal of, and
interest accrued to the date of such payment on, Loans owing to such Lender and
pay any accrued Commitment Fees or L/C Fees payable to such Lender pursuant to
the provisions of Sections 5.3(a) or 3.3(a), and all other amounts payable to
such Lender hereunder (including, but not limited to, any increased costs or
other amounts owing under Sections 5.9(c) or 5.11 and any indemnification for
Taxes under Section 5.12); and, if such Lender is an Issuing Lender, the
Borrower shall pay to the Administrative Agent for deposit in a cash collateral
account as described in Section 12.2(b) an amount equal to the undrawn and
unexpired amount of all Letters of Credit issued by such Issuing Lender, and
upon such payments, the obligations of such Lender hereunder shall, by the
provisions hereof, be released and discharged; provided, however, that such
Lender’s rights under Sections 5.9(c), 5.11, 5.12 and 14.2, and, in the case of
an Issuing Bank, Sections 3.3(b) and 12.2(b), and its obligations under Section
13.7 shall survive such release and discharge as to matters occurring prior to
such date.  The aggregate amount of the Commitments of the Lenders
once reduced pursuant to this Section 2.5(c) may not be reinstated.

                     

                    
                      
                        
                        

                      

                      
                        20

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    SECTION
2.6.  Termination of Revolving
Credit Facility.  The Revolving Credit Facility shall terminate
on the earliest of (a) May 16, 2010, (b) the date of termination of the entire
Revolving Credit Commitment by the Borrower pursuant to Section 2.5(a), and (c)
the date of termination by the Administrative Agent on behalf of the Lenders
pursuant to Section 12.2(a).

                     

                    SECTION
2.7.  Non-Funding
Lenders.  Anything contained herein to the contrary
notwithstanding, if any Lender defaults (a “Non-Funding Lender”)
in its obligation to fund (a “Funding Default”) any
advances on Revolving Credit Loans (in each case, a “Defaulted Advance”),
then (a) to the extent permitted by applicable law, until such time as the
Default Excess with respect to such Non-Funding Lender shall have been reduced
to zero, any prepayment of the Revolving Credit Loans pursuant to Section 2.3
shall, if the Borrower so directs at the time of making such prepayment, be
applied to the Revolving Credit Loans of other Lenders as if such Non-Funding
Lender had no Revolving Credit Loans outstanding; (b) such Non-Funding
Lender’s Revolving Credit Commitment and outstanding Revolving Credit Loans
shall be excluded for purposes of calculating the commitment fee payable to
Lenders pursuant to Section 5.3 in respect of any day during any Default Period
with respect to such Non-Funding Lender, and such Non-Funding Lender shall not
be entitled to receive any commitment fee pursuant to Section 5.3 for any
Default Period with respect to such Non-Funding Lender; and (c) the
aggregate amount of the Revolving Credit Loans as at any date of determination
shall be calculated as if such Non-Funding Lender had funded all Defaulted Loans
of such Non-Funding Lender.  No Revolving Credit Commitment of any
Lender shall be increased or otherwise affected, and, except as otherwise
expressly provided in this Section 2.7, performance by the Borrower of its
obligations hereunder shall not be excused or otherwise modified as a result of
any Funding Default or the operation of this Section 2.7.  The rights
and remedies against a Non-Funding Lender under this Section 2.7 are in addition
to other rights and remedies that the Borrower, the Administrative Agent, and
Issuing Lender or any other Lender may have against such Non-Funding Lender with
respect to any Funding Default.

                     

                     

                    
                      
                        
                        

                      

                      
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                    ARTICLE
III LETTER OF CREDIT FACILITY

                     

                    SECTION
3.1.  L/C
Commitment.  Subject to the terms and conditions hereof, each
Issuing Lender, in reliance on the agreements of the other Lenders set forth in
Section 3.4(a), agrees to issue trade and standby letters of credit (“Letters of Credit”)
for the account of the Borrower and its specified Subsidiaries on any Business
Day from the Closing Date to but not including the Revolving Credit Termination
Date in such form as may be approved from time to time by such Issuing Lender;
provided, however, that no
Issuing Lender shall have any obligation to issue any Letter of Credit if, after
giving effect to such issuance, (a) the L/C Obligations would exceed the L/C
Commitment or (b) the L/C Obligations on account of Letters of Credit
denominated in an Alternative Currency would exceed the Alternative Currency L/C
Commitment, (c) the aggregate principal amount of outstanding Revolving Credit
Loans, plus the aggregate principal amount of L/C Obligations would exceed the
Revolving Credit Commitment or (d) the L/C Obligations in respect of trade
Letters of Credit would exceed $400,000,000 or the L/C Obligations in respect of
standby Letters of Credit would exceed $50,000,000.  Each Letter of
Credit shall (i) be denominated in (A) Dollars, if such Letter of Credit is a
standby Letter of Credit, or (B) Dollars or an Alternative Currency, if such
Letter of Credit is a trade Letter of Credit, (ii) be a trade or standby letter
of credit issued to support obligations of the Borrower or any of its
Subsidiaries, contingent or otherwise, incurred in the ordinary course of
business, (iii) expire on a date no later than ten Business Days prior to the
Revolving Credit Termination Date, and (iv) be subject to the Uniform Customs
and/or ISP 98, as set forth in the Application or as determined by the
applicable Issuing Lender and, to the extent not inconsistent therewith, the
laws of the State of New York.  No Issuing Lender shall at any time be
obligated to issue any Letter of Credit hereunder if (x) such issuance would
conflict with, or cause such Issuing Lender or any L/C Participant to exceed any
limits imposed by, any Applicable Law or (y) any Lender has defaulted in its
obligation to fund Loans hereunder or is at such time a Defaulting Lender,
unless the applicable Issuing Lender has entered into arrangements satisfactory to such Issuing
Lender with the Borrower or such Lender, including the provision of sufficient
cash collateral or other credit support acceptable to such Issuing
Lender, to eliminate such Issuing Lender’s actual or potential Disproportionate Facility Risk (as
defined below) with respect to such Lender as to either the Letter of Credit then
proposed to be issued or such Letter of Credit and all other L/C Obligations as
to which such Issuing Lender has such actual or potential
Disproportionate Facility
Risk, as it may elect in its sole and absolute
discretion.  “Disproportionate
Facility Risk” means, as of any date of determination,
with respect to the Issuing Lender and any Defaulting Lender or
Lender has defaulted in its obligation to fund Loans hereunder, the sum of (A) all unfunded
participations in L/C Obligations at such date and (B) without duplication, all
unfunded Base Rate Loans at such date that have been requested but not funded
under Section 3.5(c) to refinance L/C Obligations, in each case allocable to such
Defaulting Lender or Lender has defaulted in its obligation to fund Loans
hereunder, other than L/C
Obligations as to which cash collateral or other credit support satisfactory to
the Administrative Agent and the Issuing Lender has been provided.  References herein to
“issue” and
derivations thereof with respect to Letters of Credit shall also include
extensions or modifications of any existing Letters of Credit, unless the
context otherwise requires.  Each Outstanding Letter of Credit shall
be deemed to have been issued under this Agreement.

                     

                    SECTION
3.2.  Procedure for Issuance of
Letters of Credit.  The Borrower may from time to time request
that any Issuing Lender issue a Letter of Credit (or amend, extend or renew an
outstanding Letter of Credit) by delivering to such Issuing Lender at any
Issuing Lender’s office at any address mutually acceptable to the Borrower and
such Issuing Lender an Application therefor, including, if applicable, the
office of such Issuing Lender’s Correspondent, completed to the satisfaction of
such Issuing Lender, and such other certificates, documents and other papers and
information as such Issuing Lender may reasonably request.  Upon
receipt of any Application, such Issuing Lender shall process such Application
and the certificates, documents and other papers and information delivered to it
in connection therewith in accordance with its customary procedures and shall,
subject to Section 3.1 and Article VI hereof, promptly issue the Letter of
Credit (or amend, extend or renew the outstanding Letter of Credit) requested
thereby (but in no event shall any Issuing Lender be required to issue any
Letter of Credit (or amend, extend or renew an outstanding Letter of Credit)
earlier than three (3) Business Days after its receipt of the Application
therefor and all such other certificates, documents and other papers and
information relating thereto) by issuing the original of such Letter of Credit
to the beneficiary thereof or as otherwise may be agreed by such Issuing Lender
and the Borrower.  Within fifteen (15) Business Days after the end of
each month, the Administrative Agent shall report to each Lender the average
daily outstandings for each day in such month for all Letters of Credit during
the previous month.

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
3.3.  Fees
and Other Charges.  (a)  The Borrower shall pay to
the Administrative Agent, for the account of each Issuing Lender and the L/C
Participants, a letter of credit fee (the “L/C Fee”) (i) with
respect to each trade Letter of Credit, in an amount equal to the Applicable
Margin for trade Letters of Credit times the average daily undrawn amount of
such issued Letter of Credit as reported by the Administrative Agent pursuant to
Section 3.2 and (ii) with respect to each standby Letter of Credit, in an amount
equal to the Applicable Margin for standby Letters of Credit times the face
amount of such Letter of Credit.  Such fee shall be payable quarterly
in arrears (x) for trade Letters of Credit, within fifteen (15) Business Days
after the end of each calendar quarter and on the Revolving Credit Termination
Date and (y) for standby Letters of Credit, within fifteen (15) Business Days
after the end of each calendar quarter and on the Revolving Credit Termination
Date.

                     

                    (b)           In
addition to the foregoing commission, the Borrower shall pay the Issuing Lenders
an issuance fee of one tenth percent (1/10%) per annum on the face amount of
each standby Letter of Credit, payable quarterly in arrears within fifteen (15)
Business Days after the end of each calendar quarter of each calendar quarter
and on the Revolving Credit Termination Date.

                     

                    (c)           The
Administrative Agent shall, promptly following its receipt thereof, distribute
to each Issuing Lender and the L/C Participants all fees received by the
Administrative Agent in accordance with their respective Revolving Credit
Commitment Percentages.

                     

                    SECTION
3.4.  L/C
Participations.  (a)  Each Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce such
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
such Issuing Lender, on the terms and conditions hereinafter stated, for such
L/C Participant’s own account and risk an undivided interest equal to such L/C
Participant’s Revolving Credit Commitment Percentage in such Issuing Lender’s
obligations and rights under each Letter of Credit issued hereunder and the
amount of each draft paid by such Issuing Lender thereunder.  Each L/C
Participant unconditionally and irrevocably agrees with each Issuing Lender
that, if a draft is paid under any Letter of Credit for which such Issuing
Lender is not reimbursed in full by the Borrower in accordance with the terms of
this Agreement, such L/C Participant shall pay to such Issuing Lender upon
demand at such Issuing Lender’s address for notices specified herein an amount
in Dollars equal to such L/C Participant’s Revolving Credit Commitment
Percentage of the Dollar Amount of such draft, or any part thereof, which is not
so reimbursed.

                     

                    (b)           Upon
becoming aware of any amount required to be paid by any L/C Participant to any
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by such Issuing Lender under any Letter of Credit, the
Administrative Agent shall notify each L/C Participant of the amount and due
date of such required payment and such L/C Participant shall pay to such Issuing
Lender the amount specified on the applicable due date.  If any such
amount is paid to such Issuing Lender after the date such payment is due, such
L/C Participant shall pay to such Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily average Federal
Funds Rate as determined by the Administrative Agent during the period from and
including the date such payment is due to the date on which such payment is
immediately available to such Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360.  A certificate of any Issuing Lender with
respect to any amounts owing under this Section 3.4(b) shall be conclusive in
the absence of manifest error.  With respect to payment to any Issuing
Lender of the unreimbursed amounts described in this Section 3.4(b), if the L/C
Participants receive notice that any such payment is due (A) prior to 1:00 p.m.
(Charlotte time) on any Business Day, such payment shall be due that Business
Day, and (B) after 1:00 p.m. (Charlotte time) on any Business Day, such payment
shall be due on the following Business Day.

                     

                    
                      
                        
                        

                      

                      
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                    (c)           Whenever,
at any time after any Issuing Lender has made payment under any Letter of Credit
and has received from any L/C Participant its Revolving Credit Commitment
Percentage of such payment in accordance with this Section 3.4, such Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, or any payment of interest on account thereof),
such Issuing Lender will distribute to such L/C Participant its pro rata share
thereof in accordance with such L/C Participant’s Revolving Credit Commitment
Percentage; provided, that in the event that any such payment received by such
Issuing Lender shall be required to be returned by such Issuing Lender, such L/C
Participant shall return to such Issuing Lender the portion thereof previously
distributed by such Issuing Lender to it.

                     

                    SECTION
3.5.  Reimbursement.  (a)  Reimbursement by the
Borrower.  The Borrower agrees to reimburse each Issuing Lender
on each date the Administrative Agent notifies the Borrower of the date and
amount of a draft paid under any Letter of Credit for the amount of (i) such
draft so paid and (ii) any taxes, fees, charges or other costs or expenses
incurred by any Issuing Lender in connection with such payment (other than those
payable pursuant to Section 3.5(b) below).  Each such payment shall be
made to any Issuing Lender at its address for notices specified herein (i) in
Dollars if such Letter of Credit was denominated in Dollars or (ii) in Dollars
or the applicable Alternative Currency, at the option of the Borrower, if such
Letter of Credit was denominated in an Alternative Currency, and in each case,
in immediately available funds.  Interest shall be payable on any and
all amounts remaining unpaid by the Borrower under this Article III from the day
immediately following the date such amounts become payable (whether at stated
maturity, by acceleration or otherwise) until payment in full at the rate which
would be payable on any outstanding Base Rate Loans which were then
overdue.

                     

                    (b)           Exchange Indemnification and
Increased Costs.  The Borrower shall, upon demand from any
Issuing Lender or L/C Participant, pay to such Issuing Lender or L/C
Participant, the amount of (i) any loss or cost or increased cost incurred by
such Issuing Lender or L/C Participant, (ii) any reduction in any amount payable
to or in the effective return on the capital to such Issuing Lender or L/C
Participant, (iii) any currency exchange loss, in each case with respect to
clauses (i), (ii) and (iii), that such Issuing Lender or L/C Participant
sustains as a result of the Borrower’s repayment in Dollars of any Letter of
Credit denominated in an Alternative Currency or (iv) any interest or any other
return, including principal, foregone by such Issuing Lender as a result of the
introduction of, change over to or operation of the euro in any member state
participating in the euro.  A certificate of such Issuing Lender
setting forth in reasonable detail the basis for determining such additional
amount or amounts necessary to compensate such Issuing Lender shall be
conclusively presumed to be correct save for manifest error.

                     

                     

                    
                      
                        
                        

                      

                      
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                    (c)           Reimbursement by the
Lenders.  If the Borrower fails to timely reimburse such
Issuing Lender on the date the Borrower receives the notice referred to in this
Section 3.5, the Borrower shall be deemed to have timely given a Notice of
Revolving Credit Borrowing pursuant to Section 2.2 hereunder to the
Administrative Agent requesting the Lenders to make a Base Rate Loan on such
date in an amount in Dollars equal to the Dollar Amount (as of the date of
funding of such Base Rate Loan by each Lender) of such draft paid, together with
any taxes, fees, charges or other costs or expenses incurred by any Issuing
Lender and to be reimbursed pursuant to this Section 3.5 and, regardless of
whether or not the conditions precedent specified in Article VI have been
satisfied, the Lenders shall make Base Rate Loans in such amount, the proceeds
of which shall be applied to reimburse such Issuing Lender for the amount of the
related drawing and costs and expenses.  Notwithstanding the
foregoing, nothing in this Section 3.5 shall obligate the Lenders to make such
Base Rate Loans if the making of such Base Rate Loans would violate the
automatic stay under federal bankruptcy laws.

                     

                    SECTION
3.6.  Obligations
Absolute.  The Borrower’s obligations under this Article III
(including without limitation the Reimbursement Obligation) shall be absolute
and unconditional under any and all circumstances and irrespective of any
set-off, counterclaim or defense to payment which the Borrower may have or have
had against any Issuing Lender or any beneficiary of a Letter of
Credit.  The Borrower also agrees with each Issuing Lender that no
Issuing Lender shall be responsible for, and the Borrower’s Reimbursement
Obligation under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee.  No Issuing Lender shall be liable for
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by such Issuing Lender’s gross
negligence or willful misconduct.  The Borrower agrees that any action
taken or omitted by any Issuing Lender under or in connection with any Letter of
Credit or the related drafts or documents, if done in the absence of gross
negligence or willful misconduct and in accordance with the standards of care
specified in the Uniform Customs and/or ISP 98, as set forth in the Application
or as determined by the Issuing Lender and, to the extent not inconsistent
therewith, the laws of the State of New York, shall be binding on the Borrower
and shall not result in any liability of any Issuing Lender to the
Borrower.  The responsibility of each Issuing Lender to the Borrower
in connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.

                     

                    SECTION
3.7  Effect
of Application.  To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Article III, the provisions of this Article III shall
apply.

                     

                    ARTICLE
IV [RESERVED]

                     

                    ARTICLE
V GENERAL LOAN PROVISIONS

                     

                    SECTION
5.1.  Interest.  (a)  Interest Rate
Options.  Subject to the provisions of this Section 5.1, at the
election of the Borrower, the aggregate principal balance of any Revolving
Credit Loans shall bear interest at (i) the Base Rate plus the Applicable Margin
or (ii) the LIBOR Rate plus the Applicable Margin; provided that LIBOR Rate
Loans shall not be available until three (3) Business Days after the Closing
Date unless the Borrower executes and delivers an indemnity in favor of the
Administrative Agent and the Lenders in form and substance satisfactory to
them.  The Borrower shall select the rate of interest and Interest
Period, if any, applicable to any Revolving Credit Loan at the time a Notice of
Revolving Credit Borrowing is given pursuant to Section 2.2 or at the time a
Notice of Conversion/Continuation is given pursuant to Section
5.2.  Each Revolving Credit Loan or portion thereof bearing interest
based on the Base Rate shall be a “Base Rate Loan”, and
each Revolving Credit Loan or portion thereof bearing interest based on the
LIBOR Rate shall be a “LIBOR Rate
Loan.”  Any Revolving Credit Loan or any portion thereof as to
which the Borrower has not duly specified an interest rate as provided herein
shall be deemed a Base Rate Loan.

                     

                     

                    
                      
                        
                        

                      

                      
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                    (b)           Interest
Periods.  In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 5.1(a), shall elect
an interest period (each, an “Interest Period”) to
be applicable to such Loan, which Interest Period shall be a period of one (1),
two (2), three (3), or six (6) months (or nine (9) or twelve (12) months or any
other period if available from all Lenders) with respect to each LIBOR Rate;
provided that:

                     

                    (i)           the
Interest Period shall commence on the date of advance of or conversion to any
LIBOR Rate Loan and, in the case of immediately successive Interest Periods,
each successive Interest Period shall commence on the date on which the next
preceding Interest Period expires;

                     

                    (ii)           if
any Interest Period would otherwise expire on a day that is not a Business Day,
such Interest Period shall expire on the next succeeding Business Day; provided,
that if any Interest Period would otherwise expire on a day that is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the next preceding
Business Day;

                     

                    (iii)           any
Interest Period that begins on the last Business Day of a calendar month (or on
a day for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day of the
relevant calendar month at the end of such Interest Period;

                     

                    (iv)           no
Interest Period shall extend beyond the Revolving Credit Termination Date;
and

                     

                    (v)           there
shall be no more than six (6) Interest Periods for Revolving Credit Loans in
effect at any time.

                     

                    (c)           Default
Rate.  Subject to Section 12.3, at the discretion of the
Administrative Agent and Required Lenders, upon the occurrence and during the
continuance of an Event of Default, (i) the Borrower shall no longer have the
option to request LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans shall
bear interest at a rate per annum two percent (2%) in excess of the rate then
applicable to LIBOR Rate Loans, as applicable, until the end of the applicable
Interest Period and thereafter at a rate equal to two percent (2%) in excess of
the rate then applicable to Base Rate Loans, and (iii) all outstanding Base Rate
Loans shall bear interest at a rate per annum equal to two percent (2%) in
excess of the rate then applicable to Base Rate Loans. Interest shall continue
to accrue on the amount of Revolving Credit Loans outstanding after the filing
by or against the Borrower of any petition seeking any relief in bankruptcy or
under any act or law pertaining to insolvency or debtor relief, whether state,
federal or foreign.

                     

                    
                      
                        
                        

                      

                      
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                    (d)           Interest Payment and
Computation.  Interest on each Base Rate Loan shall be payable
in arrears on the last Business Day of each calendar quarter commencing June 30,
2005; and interest on each LIBOR Rate Loan shall be payable on the last day of
each Interest Period applicable thereto, and if such Interest Period exceeds
three (3) months, at the end of each three (3) month interval during such
Interest Period.  Interest on LIBOR Rate Loans and all fees payable
hereunder shall be computed on the basis of a 360-day year and assessed for the
actual number of days elapsed and interest on Base Rate Loans shall be computed
on the basis of a 365/66-day year and assessed for the actual number of days
elapsed.

                     

                    (e)           Maximum
Rate.  In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Loan
Documents charged or collected pursuant to the terms of this Agreement or
pursuant to any other Loan Document exceed the highest rate permissible under
any Applicable Law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto.  In the event that such a court
determines that the Lenders have charged or received interest hereunder in
excess of the highest applicable rate, the rate in effect hereunder shall
automatically be reduced to the maximum rate permitted by Applicable Law and the
Lenders shall at the Administrative Agent’s option (i) promptly refund to the
Borrower any interest received by Lenders in excess of the maximum lawful rate
or (ii) shall apply such excess to the principal balance of the
Obligations.  It is the intent hereof that the Borrower not pay or
contract to pay, and that neither the Administrative Agent nor any Lender
receive or contract to receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by the Borrower under Applicable
Law.

                     

                    SECTION
5.2.  Notice
and Manner of Conversion or Continuation of Revolving Credit
Loans.  Provided that no Event of Default has occurred and is
then continuing, the Borrower shall have the option (a) to convert all or any
portion of its outstanding Base Rate Loans in a principal amount equal to
$5,000,000 or any whole multiple of $1,000,000 in excess thereof into one or
more LIBOR Rate Loans and (b), (i) to convert all or any part of its outstanding
LIBOR Rate Loans in a principal amount equal to $1,000,000 or a whole multiple
of $250,000 in excess thereof into Base Rate Loans or (ii) to continue such
LIBOR Rate Loans as LIBOR Rate Loans for an additional Interest Period; provided
that if any conversion or continuation is made prior to the expiration of any
Interest Period, the Borrower shall pay any amount required to be paid pursuant
to Section 5.10 hereof.  Whenever the Borrower desires to convert or
continue Revolving Credit Loans as provided above, the Borrower shall give the
Administrative Agent irrevocable prior written notice in the form attached as
Exhibit E (a “Notice
of Conversion/Continuation”) not later than 11:00 a.m. (Charlotte time)
three (3) Business Days before the day on which a proposed conversion or
continuation of such Revolving Credit Loan is to be effective (except in the
case of a conversion of a LIBOR Rate Loan to a Base Rate Loan in which case same
day notice by the Borrower shall be sufficient) specifying (A) the Revolving
Credit Loans to be converted or continued, and, in the case of any LIBOR Rate
Loan to be converted or continued, the last day of the Interest Period therefor,
(B) the effective date of such conversion or continuation (which shall be a
Business Day), (C) the principal amount of such Revolving Credit Loans to be
converted or continued, and (D) the Interest Period to be applicable to such
converted or continued LIBOR Rate Loan.  The Administrative Agent
shall promptly notify the Lenders of such Notice of
Conversion/Continuation.

                     

                    SECTION
5.3.  Fees.  (a)  Commitment
Fees.  The Borrower shall pay to the Administrative Agent, for
the account of the Lenders, a non-refundable commitment fee (the “Commitment Fee”) at a
rate per annum equal to the Applicable Margin on the unused amount of the
Revolving Credit Commitment.  The Commitment Fee shall be payable in
arrears on the last Business Day of each calendar quarter for the period
commencing on the Amendment Date and ending on the Revolving Credit Termination
Date.  The Commitment Fee shall be distributed by the Administrative
Agent to the Lenders pro rata in accordance with the Lenders’ respective
Revolving Credit Commitment Percentages.

                     

                    
                      
                        
                        

                      

                      
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                    (b)           Administrative Agent’s and
Other Fees.  In order to compensate the Administrative Agent
for its obligations hereunder, the Borrower agrees to pay to the Administrative
Agent, for its account, the fees set forth in the separate fee letter agreement
executed by the Borrower and the Administrative Agent dated April 26,
2005.

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
5.4.  Manner
of Payment.  Each payment by the Borrower on account of the
principal of or interest on the Revolving Credit Loans or of any fee, commission
or other amounts (including the Reimbursement Obligation) payable to the Lenders
under this Agreement or any other Loan Document shall be made not later than
1:00 p.m. (Charlotte time) on the date specified for payment under this
Agreement to the Administrative Agent at the Administrative Agent’s Office for
the account of the Lenders (other than as set forth below) pro rata in
accordance with their respective Revolving Credit Commitment Percentages (except
as specified below), in Dollars, in immediately available funds and shall be
made without any set-off, counterclaim or deduction whatsoever.  Any
payment received after such time but before 2:00 p.m. (Charlotte time) on such
day shall be deemed a payment on such date for the purposes of Section 12.1, but
for all other purposes shall be deemed to have been made on the next succeeding
Business Day.  Any payment received after 2:00 p.m. (Charlotte time)
shall be deemed to have been made on the next succeeding Business Day for all
purposes.  Upon receipt by the Administrative Agent of each such
payment, the Administrative Agent shall distribute to each Lender at its address
for notices set forth herein its pro rata share of such payment in accordance
with such Lender’s Revolving Credit Commitment Percentage (except as specified
below), and shall wire advice of the amount of such credit to each
Lender.  Each payment to the Administrative Agent of the L/C
Participants’ commissions shall be made in like manner, but for the account of
the L/C Participants.  Each payment to the Administrative Agent of
Administrative Agent’s fees or expenses shall be made for the account of the
Administrative Agent and any amount payable to any Lender under Article IV or
Section 5.9, 5.10, 5.11, 5.12 or 14.2 shall be paid to the Administrative Agent
for the account of the applicable Lender.  Subject to Section
5.1(b)(ii), if any payment under this Agreement or any other Loan Document shall
be specified to be made upon a day which is not a Business Day, it shall be made
on the next succeeding day which is a Business Day and such extension of time
shall in such case be included in computing any interest if payable along with
such payment.

                     

                    SECTION
5.5.  Crediting of Payments and
Proceeds.  In the event that the Borrower shall fail to pay any
of the Obligations when due and the Obligations have been accelerated pursuant
to Section 12.2, all payments received by the Lenders upon the Obligations and
all net proceeds from the enforcement of the Obligations shall be applied first
to all expenses then due and payable by the Borrower hereunder, then to all
indemnity obligations then due and payable by the Borrower hereunder, then to
all Administrative Agent’s fees then due and payable, then to all commitment and
other fees and commissions then due and payable, then to accrued and unpaid
interest hereunder or under any other Loan Document, and Reimbursement
Obligation (pro rata in accordance with all such amounts due), then to the
principal amount hereunder or under any other Loan Document, Reimbursement
Obligation and any termination payments due in respect of a Hedging Agreement
with any Lender or Affiliate of a Lender (which Hedging Agreement is permitted
hereunder) (pro rata in accordance with all such amounts due) and then to the
cash collateral account described in Section 12.2(b) hereof to the extent of any
L/C Obligations then outstanding, in that order.

                     

                    SECTION
5.6.  Adjustments.  If
any Lender (a “Benefited Lender”)
shall at any time receive any payment of all or part of the Obligations owing to
it, or interest thereon, or if any Lender shall at any time receive any
Collateral or other collateral in respect to the Obligations owing to it
(whether voluntarily or involuntarily, by set-off or otherwise) in a greater
proportion than any such payment to and Collateral and other collateral received
by any other Lender, if any, in respect of the Obligations owing to such other
Lender, or interest thereon, such Benefited Lender shall purchase for cash from
the other Lenders such portion of each such other Lender’s Extensions of Credit
Obligations, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefited
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned to the extent of such recovery, but without interest.  The
Borrower agrees that each Lender so purchasing a portion of another Lender’s
Extensions of Credit may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
5.7.  Nature
of Obligations of Lenders Regarding Extensions of Credit; Assumption by the
Administrative Agent.  The obligations of the Lenders under
this Agreement to make the Revolving Credit Loans and issue or participate in
Letters of Credit are several and are not joint or joint and
several.  Unless the Administrative Agent shall have received notice
from a Lender prior to a proposed borrowing date that such Lender will not make
available to the Administrative Agent such Lender’s ratable portion of the
amount to be borrowed on such date (which notice shall not release such Lender
of its obligations hereunder), the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the
proposed borrowing date in accordance with Sections 2.2(b), and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount.  If such amount is
made available to the Administrative Agent on a date after such borrowing date,
such Lender shall pay to the Administrative Agent on demand an amount, until
paid, equal to the product of (a) the amount not made available by such Lender
in accordance with the terms hereof, times (b) the daily average Federal Funds
Rate during such period as determined by the Administrative Agent, times (c) a
fraction the numerator of which is the number of days that elapse from and
including such borrowing date to the date on which such amount not made
available by such Lender in accordance with the terms hereof shall have become
immediately available to the Administrative Agent and the denominator of which
is 360.  A certificate of the Administrative Agent with respect to any
amounts owing under this Section 5.7 shall be conclusive, absent manifest
error.  If such Lender’s Revolving Credit Commitment Percentage of
such borrowing is not made available to the Administrative Agent by such Lender
within three (3) Business Days of such borrowing date, the Administrative Agent
shall be entitled to recover such amount made available by the Administrative
Agent with interest thereon at the rate per annum applicable to such borrowing,
on demand, from the Borrower.  The failure of any Lender to make
available its Revolving Credit Commitment Percentage of any Revolving Credit
Loan requested by the Borrower shall not relieve it or any other Lender of its
obligation hereunder to make its Revolving Credit Commitment Percentage of such
Revolving Credit Loan available on the borrowing date, but no Lender shall be
responsible for the failure of any other Lender to make its Revolving Credit
Commitment Percentage of such Revolving Credit Loan available on the borrowing
date.

                     

                    SECTION
5.8.  Joint
and Several Liability of the Credit
Parties.  (a)  Each of the Credit Parties is jointly
and severally liable not merely as a surety but as a co-debtor for each and
every Obligation.  Each of the Credit Parties is accepting joint and
several liability hereunder in consideration of the financial accommodations to
be provided by the Lenders under this Agreement, for the mutual benefit,
directly or indirectly, of each of the Credit Parties and in consideration of
the undertakings of each of the Credit Parties to accept joint and several
liability for the Obligations.

                     

                    (b)           Except
as otherwise expressly provided herein, each Credit Party hereby waives
promptness, diligence, presentment, demand, protest, notice of acceptance of its
joint and several liability, notice of any and all advances of the Revolving
Credit Loans and Letters of Credit made under this Agreement and the other Loan
Documents, notice of occurrence of any Default or Event of Default, or of any
demand for any payment under this Agreement and notice of any action at any time
taken or omitted by the Administrative Agent or any Lender under or in respect
of any of the Obligations hereunder.  Each Credit Party hereby waives
all defenses which may be available by virtue of any valuation, stay, moratorium
law or other similar law now or hereafter in effect, any right to require the
marshaling of assets of any of the Credit Parties and any other entity or person
primarily or secondarily liable with respect to any of the Obligations, and all
suretyship defenses generally.  Each Credit Party hereby assents to,
and waives notice of, any extension or postponement of the time for the payment,
or place or manner for payment, compromise, refinancing, consolidation or
renewals of any of the Obligations hereunder, the acceptance of any partial
payment thereon, any waiver, consent or other action or acquiescence by the
Administrative Agent or any Lender at any time or times in respect of any
default by any Credit Party in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement and the other Loan Documents,
any and all other indulgences whatsoever by the Administrative Agent or any
Lender in respect of any of the Obligations, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of any
security for any of such Obligations or the addition, substitution or release,
in whole or in part, of any Credit Party or any other entity or person primarily
or secondarily liable for any Obligation.  If for any reason any of
the Credit Parties has no legal existence or is under no legal obligation to
discharge any of the Obligations, or if any of the Obligations have become
irrecoverable from any of the Credit Parties by reason of such Credit Party’s
insolvency, bankruptcy or reorganization or by other operation of law or for any
reason, this Agreement and the other Loan Documents shall nevertheless be
binding on each of the other Credit Parties to the same extent as if such Credit
Party at all times had been the sole obligor on such Obligations.  The
Obligations of each Credit Party under this Section 5.8 shall not be diminished
or rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, reconstruction or similar proceeding with respect to any
reconstruction or similar proceeding with respect to any Credit Party, the
Administrative Agent or any Lender.

                     

                    
                      
                        
                        

                      

                      
                        30

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (c)           If
at any time, any payment, or any part thereof, made in respect of any of the
Obligations, is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender upon the insolvency, bankruptcy or
reorganization of any of the Credit Parties, or otherwise, the provisions of
this Section 5.8 will forthwith be reinstated in effect as though such payment
had not been made.

                     

                    (d)           Until
the payment and performance in full of all the Obligations, none of the Credit
Parties shall exercise and each hereby waives any rights against the other
Credit Parties as a result of payment by such Credit Party hereunder, by way of
subrogation, reimbursement, restitution, contribution or otherwise, and none of
the Credit Parties will prove any claim in competition with the Administrative
Agent or any Lender in respect of any payment hereunder in bankruptcy,
insolvency, or reorganization proceedings of any nature; none of the Credit
Parties will claim any set-off, recoupment or counterclaim against any of the
other Credit Parties in respect of any liability of one Credit Party to another
Credit Party.  Each of the Credit Parties hereby agrees that the
payment of any amounts due with respect to any indebtedness owing by any of the
Credit Party to any other Credit Party is hereby subordinated to the prior
payment in full in cash of the Obligations.  Each Credit Party agrees
that, after the occurrence and during the continuance of any Default or Event of
Default hereunder, none of the Credit Parties will demand, sue for or otherwise
attempt to collect any indebtedness of any other Credit Party to such Credit
Party until all of the Obligations of the Credit Parties hereunder shall have
been paid in full in cash.  If, notwithstanding the foregoing
sentence, any Credit Party shall collect, enforce or receive any amounts in
respect of such indebtedness in violation of the foregoing sentence while any
Obligations of the Credit Parties are still outstanding, such amounts shall be
collected, enforced and received by such Credit Party as trustee for the
Administrative Agent and the Lenders and be paid over to the Administrative
Agent on account of the Obligations without affecting in any manner the
liability of such Credit Party under the other provisions hereof.

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
5.9.  Changed
Circumstances.  (a)  Circumstances Affecting
LIBOR Rate Availability.  If with respect to any Interest
Period: (i) the Administrative Agent or any Lender (after consultation with
Administrative Agent) shall determine that, by reason of circumstances affecting
the foreign exchange and interbank markets generally, deposits in the applicable
currency, in the applicable amounts are not being quoted via British Bankers’
Association Interest Settlement Rates (or on any successor or substitute page of
such service, or any successor to or substitute for such service, providing rate
quotations comparable to those currently provided on such page of such service,
as determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to deposits of the applicable
currency in the London interbank market) or offered to the Administrative Agent
or such Lender for such Interest Period; or (ii) the Required Lenders reasonably
determine (which determination shall be conclusive) and notify the
Administrative Agent that the LIBOR Rate will not adequately and fairly reflect
the cost to the Required Lenders of funding LIBOR Rate Loans for such Interest
Period; then the Administrative Agent shall forthwith give notice thereof to the
Borrower.  Thereafter, until the Administrative Agent notifies the
Borrower that such circumstances no longer exist, the obligation of the Lenders
to make LIBOR Rate Loans and the right of the Borrower to convert any Revolving
Credit Loan to or continue any Loan as a LIBOR Rate Loan shall be suspended, and
the Borrower shall repay in full (or cause to be repaid in full) the then
outstanding principal amount of each such LIBOR Rate Loan together with accrued
interest thereon, on the last day of the then current Interest Period applicable
to such Loan or convert the then outstanding principal amount of each such LIBOR
Rate Loan as of the last day of such Interest Period.

                     

                    (b)           Laws Affecting LIBOR Rate
Availability.  If, after the Closing Date, the introduction of,
or any change in, any Applicable Law or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by any Lender (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) issued after the Closing Date
of any such Authority, central bank or comparable agency, shall make it unlawful
or impossible for any of the Lenders (or any of their respective Lending
Offices) to honor its obligations hereunder to make or maintain any LIBOR Rate
Loan, such Lender shall promptly give notice thereof to the Administrative Agent
and the Administrative Agent shall promptly give notice to the Borrower and the
other Lenders.  Thereafter, until the Administrative Agent notifies
the Borrower that such circumstances no longer exist, (i) the obligations of the
Lenders to make LIBOR Rate Loans and the right of the Borrower to convert any
Revolving Credit Loan or continue any Revolving Credit Loan as a LIBOR Rate Loan
shall be suspended and thereafter the Borrower may select only Base Rate Loans
hereunder, and (ii) if any of the Lenders may not lawfully continue to maintain
a LIBOR Rate Loan to the end of the then current Interest Period applicable
thereto , the applicable Loan shall immediately be converted to a Base Rate Loan
or a Loan that bears interest at the Base Rate for the remainder of such
Interest Period.

                     

                    (c)           Increased
Costs.  If, after the Closing Date, the introduction of, or any
change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) issued after the Closing Date
of such Authority, central bank or comparable agency:

                     

                    
                      
                        
                        

                      

                      
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                    (i)           shall
subject any of the Lenders (or any of their respective Lending Offices) to any
tax, duty or other charge with respect to any Revolving Credit Loan, Letter of
Credit or Application or shall change the basis of taxation of payments to any
of the Lenders (or any of their respective Lending Offices) of the principal of
or interest on any Revolving Credit Loan, Letter of Credit or Application or any
other amounts due under this Agreement in respect thereof (except for changes in
the rate of tax on the overall net income of any of the Lenders or any of their
respective Lending Offices imposed by the jurisdiction in which such Lender is
organized or is or should be qualified to do business or such Lending Office is
located); or

                     

                    (ii)           shall
impose, modify or deem applicable any reserve (including, without limitation,
any imposed by the Board of Governors of the Federal Reserve System), special
deposit, insurance or capital or similar requirement against assets of, deposits
with or for the account of, or credit extended by any of the Lenders (or any of
their respective Lending Offices) or shall impose on any of the Lenders (or any
of their respective Lending Offices) or the foreign exchange and interbank
markets any other condition affecting any Revolving Credit Loan; and the result
of any of the foregoing is to increase the costs to any of the Lenders of
maintaining any LIBOR Rate Loan or issuing or participating in Letters of Credit
or to reduce the yield or amount of any sum received or receivable by any of the
Lenders under this Agreement or under any other Loan Document in respect of a
LIBOR Rate Loan or Letter of Credit or Application, then such Lender may
promptly notify the Administrative Agent, and the Administrative Agent shall
promptly notify the Borrower of such fact and demand compensation therefor and,
within fifteen (15) days after such notice by the Administrative Agent, the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or Lenders for such increased cost or
reduction.  The Administrative Agent and the applicable Lender will
promptly notify the Borrower of any event of which it has knowledge which will
entitle such Lender to compensation pursuant to this Section 5.9(c); provided,
that the Administrative Agent shall incur no liability whatsoever to the Lenders
or the Borrower in the event it fails to do so.  The amount of such
compensation shall be determined, in the applicable Lender’s reasonable
discretion, based upon the assumption that such Lender funded its Revolving
Credit Commitment Percentage of the LIBOR Rate Loans in the London interbank
market and using any reasonable attribution or averaging methods which such
Lender deems appropriate and practical; provided that no compensation shall be
payable pursuant to the above if the applicable Lender fails to demand
compensation for such increased costs within one-hundred eighty (180) days
following the date on which such Lender has actual knowledge of the event
resulting in such increase.  A certificate of such Lender setting
forth in reasonable detail the basis for determining such amount or amounts
necessary to compensate such Lender shall be forwarded to the Borrower through
the Administrative Agent and shall be conclusively presumed to be correct save
for manifest error.

                     

                    (d)           Mitigation Obligations;
Replacement of Lenders.

                     

                    (i)           If
any Lender requests compensation under this Section 5.9, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 5.12, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (A) would eliminate or reduce
amounts payable pursuant to this Section 5.9 or Section 5.12, as the case may
be, in the future and (B) would not subject such Lender to any unreimbursed cost
or expense and would not otherwise be disadvantageous to such
Lender.  The Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

                     

                    
                      
                        
                        

                      

                      
                        33

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (ii)           If
any Lender requests compensation under this Section 5.9, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 5.12, or if any
Lender defaults in its obligation to fund Loans hereunder or is a Defaulting
Lender, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 14.10), all its interests, rights and obligations under
this Agreement to an Eligible Assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (A) the Borrower shall have received the prior written consent of the
Administrative Agent (and, if a participation in a Letter of Credit is being
assigned, the Issuing Lender that issued such Letter of Credit), which consent
shall not unreasonably be withheld, (B) such Lender shall have received payment
of an amount equal to the outstanding principal of its Revolving Credit Loans
and participations in Letters of Credit, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (C) in the case of any such assignment
resulting from a claim for compensation under this Section 5.9, such assignment
will result in a reduction in such compensation or payments.  A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Borrower to require such assignment and delegation cease to
apply.

                     

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
5.10.  Indemnity.  The
Borrower hereby indemnifies each of the Lenders against any loss or expense
which may arise or be attributable to each Lender’s obtaining, liquidating or
employing deposits or other funds acquired to effect, fund or maintain any Loan
(a) as a consequence of any failure by the Borrower to make any payment when due
of any amount due hereunder in connection with a LIBOR Rate Loan, (b) due to any
failure of the Borrower to borrow on a date specified therefor in a Notice of
Revolving Credit Borrowing or Notice of Continuation/Conversion or (c) due to
any payment, prepayment or conversion of any LIBOR Rate Loan on a date other
than the last day of the Interest Period therefor.  The amount of such
loss, cost or expense to any Lender shall be deemed to equal an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the LIBOR Rate that would have been applicable to such
Loan, for the period from the date of such event to the last day of the then
current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid, were it to bid, at the commencement of such period, for deposits in the
applicable currency of a comparable amount and period from other banks in the
London interbank market; provided that no compensation shall be payable pursuant
to the above if the applicable Lender fails to demand compensation for such
increased costs within one-hundred eighty (180) days following the date on which
such Lender has actual knowledge of the event resulting in such
increase.  A certificate of such Lender setting forth in reasonable
detail the basis for determining such amount or amounts necessary to compensate
such Lender shall be forwarded to the Borrower through the Administrative Agent
and shall be conclusively presumed to be correct save for manifest
error.

                     

                    SECTION
5.11.  Capital
Requirements.  If either (a) the introduction of, or any change
in, or in the interpretation of, any Applicable Law or (b) compliance with any
guideline or request issued after the Closing Date from any central bank or
comparable agency or other Governmental Authority (whether or not having the
force of law), has or would have the effect of reducing the rate of return on
the capital of, or has affected or would affect the amount of capital required
to be maintained by, any Lender or any corporation controlling such Lender as a
consequence of, or with reference to any Lender’s Revolving Credit Commitment
and other commitments of this type, below the rate which the Lender or such
other corporation could have achieved but for such introduction, change or
compliance, then within five (5) Business Days after written demand by any such
Lender, the Borrower shall pay to such Lender from time to time as specified by
such Lender additional amounts sufficient to compensate such Lender or other
corporation for such reduction; provided that no compensation shall be payable
pursuant to the above if the applicable Lender fails to demand compensation for
such increased costs within one-hundred eighty (180) days following the date on
which such lender has actual knowledge of the event resulting in such
increase.  A certificate of such Lender setting forth in reasonable
detail the basis for determining such amounts necessary to compensate such
Lender shall be forwarded to the Borrower through the Administrative Agent and
shall be conclusively presumed to be correct save for manifest
error.

                     

                    SECTION
5.12.  Taxes.  (a)  Payments Free and
Clear.  Any and all payments by the Borrower hereunder or under
the Notes or the Letters of Credit shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholding, and all liabilities with respect thereto excluding, (i)
in the case of each Lender and the Administrative Agent, income and franchise
taxes imposed on (or measured by) its net income by the United States of America
or by the jurisdiction under the laws of which such Lender or the Administrative
Agent (as the case may be) is organized or its principal office is located or is
or should be qualified to do business or any political subdivision thereof, or
in the case of any Lender, in which its applicable Lending Office is located
(provided, however, that no Lender shall be deemed to be located in any
jurisdiction solely as a result of taking any action related to this Agreement
or the Notes or Letters of Credit) and (ii) any branch profits tax imposed by
the United States of America or any similar tax imposed by any other
jurisdiction described in clause (i) above (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as “Taxes”). If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note or Letter of Credit to any Lender or the
Administrative Agent, (A) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 5.12) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the amount
such party would have received had no such deductions been made, (B) the
Borrower shall make such deductions, (C) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance with
applicable law, and (D) the Borrower shall deliver to the Administrative Agent
evidence of such payment to the relevant taxing authority or other authority in
the manner provided in Section 5.12(d).  The Borrower shall not,
however, be required to pay any amounts pursuant to clause (A) of the preceding
sentence to any Foreign Lender or the Administrative Agent not organized under
the laws of the United States of America or a state thereof (or the District of
Columbia) if such Foreign Lender or the Administrative Agent fails to comply
with the requirements of paragraph (e) of this Section 5.12 or Section 5.9(d),
as the case may be.

                     

                    
                      
                        
                        

                      

                      
                        35

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (b)           Stamp and Other
Taxes.  In addition, the Borrower shall pay any present or
future stamp, registration, recordation or documentary taxes or any other
similar fees or charges or excise or property taxes, levies of the United States
or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents (hereinafter referred to
as “Other
Taxes”).

                     

                    (c)           Indemnity.  The
Borrower shall indemnify each Lender and the Administrative Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes and
Other Taxes imposed by any jurisdiction on amounts payable under this Section
5.12) paid by such Lender or the Administrative Agent (as the case may be) and
any liability (including penalties, interest and reasonable expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted.  A certificate as to the amount of such
payment or liability prepared by a Lender or the Administrative Agent, absent
manifest error, shall be conclusive, provided that if the Borrower reasonably
believes that such Taxes or Other Taxes were not correctly or legally asserted,
such Lender or the Administrative Agent (as the case may be) shall use
reasonable efforts to cooperate with the Borrower, at the Borrower’s expense, to
obtain a refund of such Taxes or Other Taxes.  Such indemnification
shall be made within thirty (30) days from the date such Lender or the
Administrative Agent (as the case may be) makes written demand
therefor.  If a Lender or the Administrative Agent shall become aware
that it is entitled to receive a refund in respect of Taxes or Other Taxes, it
promptly shall notify the Borrower of the availability of such refund and shall,
within sixty (60) days after receipt of a request by the Borrower pursue or
timely claim such refund at the Borrower’s expense.  If any Lender or
the Administrative Agent receives a refund in respect of any Taxes or Other
Taxes for which such Lender or the Administrative Agent has received payment
from the Borrower hereunder, it promptly shall repay such refund (plus interest
received, if any) to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section 5.12 with
respect to Taxes or Other Taxes giving rise to such refund), provided that the
Borrower, upon the request of such Lender or the Administrative Agent, agrees to
return such refund (plus any penalties, interest or other charges required to be
paid) to such Lender or the Administrative Agent in the event such Lender or the
Administrative Agent is required to repay such refund to the relevant taxing
authority.

                     

                    
                      
                        
                        

                      

                      
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                    (d)           Evidence of
Payment.  Within thirty (30) days after the date of any payment
of Taxes or Other Taxes, the Borrower shall furnish to the Administrative Agent,
at its address referred to in Section 14.1, the original or a certified copy of
a receipt evidencing payment thereof or other evidence of payment satisfactory
to the Administrative Agent.

                     

                    (e)           Delivery of Tax
Forms.  Each Foreign Lender shall deliver to the Borrower, with
a copy to the Administrative Agent, on the Closing Date or concurrently with the
delivery of the relevant Assignment and Acceptance (i) two United States
Internal Revenue Service Forms W-8ECI or Forms W-8BEN, as applicable (or
successor forms), properly completed and certifying in each case that such
Foreign Lender is entitled to a complete exemption from withholding or deduction
for or on account of any United States federal income taxes, and (ii) an
Internal Revenue Service Form W-8 or W-9 or successor applicable form, as the
case may be, to establish an exemption from United States backup withholding
taxes.  Each Foreign Lender further agrees to deliver to the Borrower,
with a copy to the Administrative Agent, a Form W-8BEN or W-8ECI and Form W-8 or
W-9, or successor applicable forms or manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower, certifying in the case of a Form
W-8BEN or W-8ECI that such Foreign Lender is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes (unless in any such case an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders such forms inapplicable
or the exemption to which such forms relate unavailable and such Foreign Lender
notifies the Borrower and the Administrative Agent that it is not entitled to
receive payments without deduction or withholding of United States federal
income taxes) and, in the case of a Form W-8 or W-9, establishing an exemption
from United States backup withholding tax.

                     

                    (f)           Survival.  Without
prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in this Section 5.12 shall
survive the payment in full of the Obligations and the termination of the
Revolving Credit Commitment.

                     

                    ARTICLE
VI CLOSING; CONDITIONS OF CLOSING AND BORROWING

                     

                    SECTION
6.1.  Closing.  The
closing shall take place at the offices of Shearman & Sterling LLP at 10:00
a.m. on May 16, 2005 or at such other location, on such other date and at such
other time as the parties hereto shall mutually agree.

                     

                    SECTION
6.2.  Conditions to Closing and
Initial Revolving Credit Loans and Letters of Credit.  The
obligation of the Lenders to close this Agreement and to make the initial
Revolving Credit Loans or issue the initial Letters of Credit is subject to the
satisfaction or waiver of each of the following conditions:

                     

                    (a)           Executed Loan
Documents.  This Agreement and the Revolving Credit Notes (to
the extent requested as provided herein) shall have been duly authorized,
executed and delivered to the Administrative Agent by the parties thereto, shall
be in full force and effect and no default shall exist thereunder, and the
Borrower shall have delivered original counterparts thereof to the
Administrative Agent.

                     

                    
                      
                        
                        

                      

                      
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                    (b)           Closing Certificates;
Etc.

                     

                    (i)           Officers’ Certificate of the
Borrower.  The Administrative Agent shall have received a
certificate from a Responsible Officer, in form and substance reasonably
satisfactory to the Administrative Agent, to the effect that all representations
and warranties of the Borrower contained in this Agreement and the other Loan
Documents are true, correct and complete in all material respects; that the
Borrower is not in violation of any of the covenants contained in this Agreement
and the other Loan Documents; that, after giving effect to the transactions
contemplated by this Agreement, no Default or Event of Default has occurred and
is continuing; and that each of the closing conditions has been satisfied or
waived (assuming satisfaction of the Administrative Agent where not advised
otherwise).

                     

                    (ii)           General Certificate of each
Credit Party.  The Administrative Agent shall have received a
certificate of the secretary, assistant secretary or general counsel of each
Credit Party certifying as to the incumbency and genuineness of the signature of
each officer of such Credit Party executing Loan Documents to which it is a
party and certifying that attached thereto is a true, correct and complete copy
of resolutions duly adopted by the Board of Directors of such Credit Party
authorizing, in the case of the Borrower, the borrowings contemplated hereunder
and, in the case of each Credit Party, the execution, delivery and performance
of this Agreement and the other Loan Documents to which it is a
party.

                     

                    (iii)           Opinions of
Counsel.  The Administrative Agent shall have received
favorable opinions of Ira M. Dansky, General Counsel to the Borrower, Cravath,
Swaine & Moore LLP, special counsel to the Borrower, Schnader Harrison Segal
& Lewis LLP, Pennsylvania counsel to the Borrower, and Drinker Biddle &
Reath LLP, New Jersey counsel to the Borrower, each addressed to the
Administrative Agent and the Lenders with respect to the Credit Parties, the
Loan Documents and such other matters as the Lenders shall reasonably
request.

                     

                    (c)           Consents;
Defaults.

                     

                    (i)           Governmental and Third Party
Approvals.  The Borrower shall have obtained all material
approvals, authorizations and consents of any Person and of all Governmental
Authorities and courts having jurisdiction with respect to the transactions
contemplated by this Agreement and the other Loan Documents.

                     

                    (ii)           No Event of
Default.  No Default or Event of Default shall have occurred
and be continuing.

                     

                    (d)           Financial
Matters.

                     

                    (i)           Financial
Statements.  The Administrative Agent shall have received the
audited Consolidated financial statements of Jones Apparel Group and its
Subsidiaries for the Fiscal Year ended on December 31, 2004 and the unaudited
financial statements of Jones Apparel Group and its Subsidiaries for the fiscal
quarter ended on April 2, 2005.

                     

                     

                    
                      
                        
                        

                      

                      
                        38

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (ii)           Financial Condition
Certificate.  The Borrower shall have delivered to the
Administrative Agent a certificate, in form and substance reasonably
satisfactory to the Administrative Agent, and certified by a Responsible
Officer, that the financial projections previously delivered to the
Administrative Agent were prepared in good faith based upon assumptions believed
to be reasonable at the time.

                     

                    (iii)           Payment at Closing; Fee
Letters.  The Borrower shall have paid the fees set forth or
referenced in Section 5.3(c) and any other accrued and unpaid fees or
commissions due hereunder (including, without limitation, reasonable legal fees
and expenses) to the Administrative Agent and Lenders, and to any other Person
such amount as may be due thereto in connection with the transactions
contemplated hereby, including all taxes, fees and other charges in connection
with the execution, delivery, recording, filing and registration of any of the
Loan Documents.  The Administrative Agent shall have received duly
authorized and executed copies of the fee letter agreement referred to in
Section 5.3(c).

                     

                    (e)           Miscellaneous.

                     

                    (i)           Notice of Revolving Credit
Borrowing.  The Administrative Agent shall have received a
Notice of Revolving Credit Borrowing from the Borrower in accordance with
Section 2.2(a), and a Notice of Account Designation specifying the account or
accounts to which the proceeds of any Revolving Credit Loans made after the
Closing Date are to be disbursed.

                     

                    (ii)           Proceedings and
Documents.  All opinions, certificates and other instruments
and all proceedings in connection with the transactions contemplated by this
Agreement shall be satisfactory in form and substance to the
Lenders.

                     

                    (iii)           Investment
Policy.  The Borrower shall have delivered to the
Administrative Agent a true and complete copy of the investment policy
referenced in Section 11.4(b) in form and content reasonably acceptable to the
Administrative Agent.

                     

                    (f)           Refinancing.  On
the Closing Date hereunder, (i) all outstanding loans under the Prior Credit
Agreement (“Existing
Loans”) shall be replaced by Revolving Credit Loans hereunder and the
Administrative Agent shall make such transfers of funds as are necessary in
order that the outstanding balance of such Revolving Credit Loans, together with
any Revolving Credit Loans funded on the Closing Date, reflect the Revolving
Credit Commitment of the Lenders hereunder, (ii) all outstanding letters of
credit issued pursuant to the Prior Credit Agreement shall be deemed Letters of
Credit hereunder and each Lender shall purchase a participation therein pursuant
to Section 3.4 in accordance with its Revolving Credit Commitment Percentage,
(iii) there shall have been paid in cash in full all accrued but unpaid interest
due on the Existing Loans up to but excluding the Closing Date, (iv) there shall
have been paid in cash in full all accrued but unpaid fees due under the Prior
Credit Agreement up to but excluding the Closing Date and all other amounts,
costs and expenses then owing to any of the Prior Lenders and/or any Agent, as
agent under the Prior Credit Agreement, in each case to the satisfaction of such
Agent or Prior Lender, as the case may be, regardless of whether or not such
amounts would otherwise be due and payable at such time pursuant to the terms of
the Prior Credit Agreement, (v) all outstanding promissory notes issued by the
Borrower to the Prior Lenders under the Prior Credit Agreement shall be deemed
canceled and the originally executed copies thereof shall be canceled and
promptly returned to the Administrative Agent who shall promptly forward such
notes to the Borrower and (vi) the commitments and, except as expressly set
forth in the Prior Credit Agreement, other obligations and rights of the
Borrower and the Prior Lenders shall be terminated without any further action
hereunder or thereunder.

                     

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
6.3.  Conditions to Extensions of
Credit.  The obligations of the Lenders to make any Extensions
of Credit are subject to the satisfaction of the following conditions precedent
on the relevant borrowing or issue date, as applicable:

                     

                    (a)                 Continuation of
Representations and Warranties.  The representations and
warranties contained in Article VII shall be true and correct on and as of such
borrowing or issuance date with the same effect as if made on and as of such
date; except for any representation and warranty made as of an earlier date,
which representation and warranty shall remain true and correct as of such
earlier date.

                     

                    (b)                 No Existing
Default.  No Default or Event of Default shall have occurred
and be continuing hereunder (i) on the borrowing date with respect to such
Revolving Credit Loan or after giving effect to the Revolving Credit Loans to be
made on such date or (ii) on the issue, extension or renewal date with respect
to such Letter of Credit or after giving effect to such Letter of Credit on such
date.

                     

                    (c)                 Borrowing Availability
Limit.  In the case of an Extension of Credit consisting of a
Revolving Credit Loan, the Borrowing Availability Limit shall exceed the
aggregate principal amount of all Revolving Credit Loans outstanding after
giving effect to the Revolving Credit Loans to be made on such date, as set
forth in the Notice of Revolving Credit Borrowing.

                     

                    ARTICLE
VII REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES

                     

                    SECTION
7.1.  Representations and
Warranties.  To induce the Administrative Agent and Lenders to
enter into this Agreement and to induce the Lenders to make Extensions of
Credit, the Credit Parties hereby represent and warrant to the Administrative
Agent and Lenders that:

                     

                    (a)                 Organization; Power;
Qualification.  Each of the Credit Parties and their
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, has the power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization, except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.

                     

                    (b)                 Ownership.  Each
Subsidiary of each of the Credit Parties as of the Amendment Date is listed on
Schedule 7.1(b).  As of the Amendment Date, the capitalization of the
Credit Parties and their Subsidiaries consists of the number of shares,
authorized, issued and outstanding, of such classes and series, with or without
par value, described on Schedule 7.1(b).  As of the Amendment Date,
all outstanding shares have been duly authorized and validly issued and are
fully paid and nonassessable.  The shareholders of the Subsidiaries of
the Credit Parties and the number of shares owned by each as of the Amendment
Date are described on Schedule 7.1(b).  As of the Amendment Date,
there are no outstanding stock purchase warrants, subscriptions, options,
securities, instruments or other rights of any type or nature whatsoever, which
are convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of the Credit Parties or their Subsidiaries, except as
described on Schedule 7.1(b).

                     

                    
                      
                        
                        

                      

                      
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                    (c)                 Authorization of Agreement,
Loan Documents and Borrowing.  Each of the Credit Parties and,
if applicable, their Subsidiaries has the right, power and authority and has
taken all necessary corporate and other action to authorize the execution,
delivery and performance of each of the Loan Documents to which it is a party in
accordance with their respective terms.  Each of the Loan Documents
have been duly executed and delivered by the duly authorized officers of the
Credit Parties and each of their Subsidiaries party thereto, as applicable, and
each such document constitutes the legal, valid and binding obligation of the
Credit Parties and, if applicable, each of their Subsidiaries party thereto,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar state
or federal debtor relief laws from time to time in effect which affect the
enforcement of creditors’ rights in general and the availability of equitable
remedies.

                     

                    (d)                 Compliance of Agreement,
Loan Documents and Borrowing with Laws, Etc.  None of (w) the
execution, delivery and performance by the Credit Parties and their Subsidiaries
of the Loan Documents to which each such Person is a party, in accordance with
their respective terms, the borrowings hereunder and the transactions
contemplated hereby, (x) the grant by the Collateral Grantors of the Liens
granted by them pursuant to the Collateral Documents, (y) the perfection or
maintenance of the Liens created under the Collateral Documents (including the
first priority nature thereof) or (z) the exercise by the Administrative Agent
or any Lender of its rights under the Loan Documents or the remedies in respect
of the Collateral pursuant to the Collateral Documents: do or will, by the
passage of time, the giving of notice or otherwise, (i) require any of the
Credit Parties or any of their Subsidiaries to obtain any Governmental Approval
not otherwise already obtained or violate any Applicable Law relating to the
Credit Parties or any of their Subsidiaries, (ii) conflict with, result in a
breach of or constitute a default under the articles of incorporation, bylaws or
other organizational documents of the Credit Parties or any of their
Subsidiaries or any indenture or other material agreement or instrument to which
such Person is a party or by which any of its properties may be bound or any
Governmental Approval relating to such Person except as could not reasonably be
expected to have a Material Adverse Effect, or (iii) except for the Liens
created under the Loan Documents, result in or require the creation or
imposition of any material Lien upon or with respect to any property now owned
or hereafter acquired by such Person.

                     

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

                     

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

                     

                    
                      
                        
                        

                      

                      
                        41

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (g)                 Intellectual Property
Matters.  Each of the Credit Parties and its Subsidiaries owns
or possesses rights to use all franchises, licenses, copyrights, copyright
applications, patents, patent rights or licenses, patent applications,
trademarks, trademark rights, trade names, trade name rights, copyrights and
rights with respect to the foregoing which are required to conduct its business
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.  No event has occurred which, to the
knowledge of the Credit Parties, permits, or after notice or lapse of time or
both would permit, the revocation or termination of any such rights, and, to the
knowledge of the Credit Parties, neither the Credit Parties nor any Subsidiary
thereof is liable to any Person for infringement under Applicable Law with
respect to any such rights as a result of its business operations, except as
could not reasonably be expected to have a Material Adverse Effect.

                     

                    (h)                 Environmental
Matters.  Except as could not reasonably be expected to have a
Material Adverse Effect:

                     

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

                     

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

                     

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

                     

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

                     

                     

                    
                      
                        
                        

                      

                      
                        42

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

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

                     

                    (vi)           To
the knowledge of the Credit Parties, there has been no release, or to the best
of the Credit Parties’ knowledge, the threat of release, of Hazardous Materials
at or from the properties of the Credit Parties or any of their Subsidiaries, in
violation of or in amounts or in a manner that could reasonably be expected to
give rise to liability under Environmental Laws.

                     

                    (i)                 ERISA.

                     

                    (i)           Each
of the Credit Parties and each ERISA Affiliate is in compliance with all
applicable provisions of ERISA and the regulations and published interpretations
thereunder with respect to all Employee Benefit Plans except where any such
non-compliance could not reasonably be expected to have a Material Adverse
Effect.  Except for any failure that would not reasonably be expected
to have a Material Adverse Effect, each Employee Benefit Plan that is intended
to be qualified under Section 401(a) of the Code has been determined by the
Internal Revenue Service to be so qualified, and each trust related to such plan
has been determined to be exempt under Section 501(a) of the Code.  No
liability that could reasonably be expected to result in a Material Adverse
Effect has been incurred by the Credit Parties or any ERISA Affiliate which
remains unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan;

                     

                    (ii)           No
accumulated funding deficiency (as defined in Section 412 of the Code) has been
incurred (without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the Internal Revenue Service been received or
requested with respect to any Pension Plan;

                     

                    (iii)           Neither
the Credit Parties nor any ERISA Affiliate has: (A) engaged in a nonexempt
prohibited transaction described in Section 406 of ERISA or Section 4975 of the
Code, (B) incurred any liability to the PBGC which remains outstanding other
than the payment of premiums and there are no premium payments which are due and
unpaid, (C) failed to make a required contribution or payment to a Multiemployer
Plan, or (D) failed to make a required installment or other required payment
under Section 412 of the Code except where any of the foregoing individually or
in the aggregate could not reasonably be expected to have a Material Adverse
Effect;

                     

                    (iv)           No
Termination Event that could reasonably be expected to result in a Material
Adverse Effect has occurred or is reasonably expected to occur; and

                     

                     

                    
                      
                        
                        

                      

                      
                        43

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (v)           No
proceeding, claim, lawsuit and/or investigation is existing or, to the knowledge
of the Credit Parties, threatened concerning or involving any Employee Benefit
Plan that could reasonably be expected to result in a Material Adverse
Effect.

                     

                    (j)                 Margin
Stock.  Neither the Credit Parties nor any Subsidiary thereof
is engaged principally or as one of its activities in the business of extending
credit for the purpose of “purchasing” or “carrying” any “margin stock” (as
each such term is defined or used in Regulation U of the Board of Governors of
the Federal Reserve System).  No part of the proceeds of any of the
Loans or Letters of Credit will be used for purchasing or carrying margin stock,
unless the Credit Parties shall have given the Administrative Agent and Lenders
prior notice of such event and such other information as is reasonably necessary
to permit the Administrative Agent and Lenders to comply, in a timely fashion,
with all reporting obligations required by Applicable Law, or for any purpose
which violates, or which would be inconsistent with, the provisions of
Regulation T, U or X of such Board of Governors.

                     

                    (k)                 Government
Regulation.  Neither the Credit Parties nor any Subsidiary
thereof is an “investment company”
or a company “controlled” by an
“investment
company” (as each such term is defined or used in the Investment Company
Act of 1940, as amended).

                     

                    (l)                 Burdensome
Provisions.  Neither the Credit Parties nor any Subsidiary
thereof is a party to any indenture, agreement, lease or other instrument, or
subject to any corporate or partnership restriction, Governmental Approval or
Applicable Law which is so unusual or burdensome as in the foreseeable future
could be reasonably expected to have a Material Adverse Effect.  The
Credit Parties and their Subsidiaries do not presently anticipate that future
expenditures needed to meet the provisions of any statutes, orders, rules or
regulations of a Governmental Authority will be so burdensome as to have a
Material Adverse Effect.

                     

                    (m)                 Financial
Statements.  The (i) Consolidated balance sheets of Jones
Apparel Group and its Subsidiaries as of December 31, 2007, and the related
statements of income, stockholders’ equity and cash flows for the Fiscal Years
then ended and (ii) unaudited Consolidated balance sheet of Jones Apparel Group
and its Subsidiaries as of April 5, 2008, and related unaudited interim
statements of income, stockholders’ equity and cash flows, copies of which have
been furnished to the Administrative Agent and each Lender, are complete in all
material respects and fairly present in all material respects the assets,
liabilities and financial position of Jones Apparel Group and its Subsidiaries
as at such dates, and the results of the operations and changes of financial
position for the periods then ended, subject to normal year end
adjustments.  All such financial statements, including the related
notes thereto, have been prepared in accordance with GAAP.

                     

                    (n)                 No Material Adverse
Change.  Since December 31, 2007, there has been no Material
Adverse Effect.

                     

                    (o)                 Liens.  None
of the properties and assets of the Credit Parties or any Subsidiary thereof is
subject to any Lien, except Liens permitted pursuant to Section
11.3.

                     

                     

                    
                      
                        
                        

                      

                      
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                    (p)                 Debt and Guaranty
Obligations.  Schedule 7.1(p) is a complete and correct listing
of all Debt and Guaranty Obligations of the Credit Parties and their
Subsidiaries as of the Amendment Date in excess of $5,000,000.

                     

                    (q)                 Litigation.  Except
for matters existing on the Amendment Date and set forth on Schedule 7.1(q),
there are no actions, suits or proceedings pending nor, to the knowledge of the
Credit Parties, threatened against or affecting the Credit Parties or any
Subsidiary thereof or any of their respective properties in any court or before
any arbitrator of any kind or before or by any Governmental Authority, which
could reasonably be expected to have a Material Adverse Effect or which relate
to the enforceability of any Loan Documents.

                     

                    (r)                 Absence of
Defaults.  To the knowledge of the Credit Parties, no event has
occurred and is continuing which constitutes a Default or an Event of
Default.

                     

                    (s)                 Accuracy and Completeness of
Information.  The Credit Parties have disclosed to the Lenders
all agreements, instruments and corporate or other restrictions to which they or
any of their Subsidiaries are subject, and all other matters known to them,
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.  The written information, taken as a whole,
furnished by or on behalf of the Credit Parties to the Administrative Agent or
any Lender in connection with the negotiation of this Agreement or delivered
hereunder (as modified or supplemented by other information so furnished) does
not contain any material misstatement of fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, the Credit Parties represent only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.

                     

                    (t)                 The
Collateral Documents, upon execution and delivery by the parties thereto, are
effective to create in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties, a valid and enforceable security interest in the
Collateral subject to such agreements and, when financing statements in
appropriate form are filed, such security interest shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the grantors thereunder in the Collateral, to the extent perfection can be
obtained by filing Uniform  Commercial Code financing statements, in
each case prior and superior in right to any other Person to the extent
perfection can be obtained by filing Uniform Commercial Code financing
statements, other than with respect to the rights of Persons pursuant to Liens
permitted by Section 11.3.

                     

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
7.2.  Survival of Representations
and Warranties, Etc.  All representations and warranties set
forth in this Article VII and all representations and warranties contained in
any certificate delivered in connection with this Agreement, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement.  All representations and
warranties made under this Agreement shall be made or deemed to be made at and
as of the Closing Date, shall survive the Closing Date and shall not be waived
by the execution and delivery of this Agreement, any investigation made by or on
behalf of the Lenders or any borrowing hereunder.

                     

                    ARTICLE
VIII FINANCIAL INFORMATION AND NOTICES

                     

                    Until all the Obligations (other than
Obligations under Hedging Agreements) have been paid and satisfied in full and
the Revolving Credit Commitment and L/C Commitment have terminated, unless
consent has been obtained in the manner set forth in Section 14.11 hereof, the
Credit Parties will furnish or cause to be furnished to the Administrative Agent
(which the Administrative Agent will promptly furnish to the Lenders at their
respective addresses as set forth on Schedule 1.1(a), or such other office as
may be designated to the Administrative Agent from time to time):

                     

                    SECTION
8.1.  Financial Statements and
Projections.  (a)  Quarterly Financial
Statements.  As soon as practicable and in any event within
forty-five (45) days after the end of the first three fiscal quarters of each
Fiscal Year, an unaudited Consolidated balance sheet of Jones Apparel Group and
its Subsidiaries as of the close of such fiscal quarter unaudited Consolidated
statements of stockholders’ equity and cash flows for the portion of the Fiscal
Year then ended, and unaudited Consolidated statements of income for the fiscal
quarter then ended and that portion of the Fiscal Year then ended, including the
notes thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the corresponding period or periods of (or, in the
case of the balance sheet, as of the end of) the preceding Fiscal Year and
prepared by Jones Apparel Group in accordance with GAAP and, if applicable,
containing disclosure of the effect on the financial position or results of
operations of any change in the application of accounting principles and
practices during the period, and certified by a Responsible Officer to present
fairly in all material respects the financial condition of Jones Apparel Group
and its Subsidiaries as of their respective dates and the results of operations
of Jones Apparel Group and its Subsidiaries for the respective periods then
ended, subject to normal year end adjustments.

                     

                    (b)           Annual Financial
Statements.  As soon as practicable and in any event within
ninety (90) days after the end of each Fiscal Year, an audited Consolidated
balance sheet of Jones Apparel Group and its Subsidiaries as of the close of
such Fiscal Year and audited Consolidated statements of income, stockholders’
equity and cash flows for the Fiscal Year then ended, including the notes
thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and prepared by a nationally
recognized independent certified public accounting firm in accordance with GAAP
and, if applicable, containing disclosure of the effect on the financial
position or results of operation of any change in the application of accounting
principles and practices during the year, and accompanied by a report thereon by
such certified public accountants that is not qualified with respect to scope
limitations imposed by Jones Apparel Group or any of its Subsidiaries or with
respect to accounting principles followed by Jones Apparel Group or any of its
Subsidiaries not in accordance with GAAP.

                     

                     

                    
                      
                        
                        

                      

                      
                        46

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (c)           Monthly Financial
Statements.  As soon as practicable and in any event within
twenty-five (25) days after the end of each month that is not the last month of
a fiscal quarter, an unaudited Consolidated balance sheet of Jones Apparel Group
and its Subsidiaries as of the close of such month, unaudited Consolidated
financial statement of stockholders’ equity and cash flows for the portion of
the Fiscal Year then ended, and unaudited Consolidated statements of income for
the fiscal month and year to date periods then ended and for the corresponding
periods of (or, in the case of the balance sheet, as of the end of) the
preceding Fiscal Year and prepared by Jones Apparel Group in accordance with
GAAP and, if applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the application of accounting
principles and practices during the period, and certified by a Responsible
Officer to present fairly in all material respects the financial condition of
Jones Apparel Group and its Subsidiaries as of their respective dates and the
results of operations of Jones Apparel Group and its Subsidiaries for the
respective periods then ended.

                     

                    SECTION
8.2.  Officer’s Compliance
Certificate.  At each time financial statements are delivered
pursuant to Section 8.1(a) or (b) a certificate of a Responsible Officer in the
form of Exhibit F attached hereto (an “Officer’s Compliance
Certificate”).

                     

                    SECTION
8.3.  Accountants’
Certificate.  At each time financial statements are delivered
pursuant to Section 8.1(b), a certificate of the independent public accountants
certifying such financial statements addressed to the Administrative Agent for
the benefit of the Lenders:

                     

                    (a)                 stating
that in making the examination necessary for the certification of such financial
statements, they obtained no knowledge of any Default or Event of Default or, if
such is not the case, specifying such Default or Event of Default and its nature
and period of existence; and

                     

                    (b)                 including
the calculations prepared by such accountants required to establish whether or
not the Credit Parties and their Subsidiaries are in compliance with the
financial covenants set forth in Article X hereof as at the end of each
respective period.

                     

                    SECTION
8.4.  Other
Reports.  (a)  Promptly but in any event within ten
(10) Business Days after the filing thereof, a copy of (i) each report or other
filing made by the Credit Parties or any or their Subsidiaries with the
Securities and Exchange Commission and required by the Securities and Exchange
Commission to be delivered to the shareholders of the Credit Parties or any or
their Subsidiaries, (ii) each report made by the Credit Parties or any of their
Subsidiaries to the Securities and Exchange Commission on Form 8-K and (iii)
each final registration statement of the Credit Parties or any of their
Subsidiaries filed with the Securities and Exchange Commission, except in
connection with pension plans and other employee benefit plans; and

                     

                    (b)           Such
other information regarding the Collateral, operations, business affairs and
financial condition of the Credit Parties or any of their Subsidiaries as the
Administrative Agent or any Lender may reasonably request.

                     

                    SECTION
8.5.  Notice
of Litigation and Other Matters.  Prompt (but in no event later
than ten (10) Business Days after a principal officer of the Credit Parties
obtains knowledge thereof) telephonic (confirmed in writing) or written notice
of:

                     

                    (a)                 the
commencement of all proceedings and investigations by or before any Governmental
Authority and all actions and proceedings in any court or before any arbitrator
against or involving the Credit Parties or any Subsidiary thereof or any of
their respective properties, assets or businesses which in the reasonable
judgment of the Credit Parties could reasonably be expected to have a Material
Adverse Effect;

                     

                    
                      
                        
                        

                      

                      
                        47

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (b)                 any
notice of any violation received by the Credit Parties or any Subsidiary thereof
from any Governmental Authority including, without limitation, any notice of
violation of Environmental Laws, which in the reasonable judgment of the Credit
Parties in any such case could reasonably be expected to have a Material Adverse
Effect;

                     

                    (c)                 any
Default or Event of Default; and

                     

                    (d)                 (i)
any unfavorable determination letter from the Internal Revenue Service regarding
the qualification of an Employee Benefit Plan under Section 401(a) of the Code
(along with a copy thereof) which could reasonably be expected to have a
Material Adverse Effect, (ii) all notices received by the Credit Parties or any
ERISA Affiliate of the PBGC’s intent to terminate any Pension Plan or to have a
trustee appointed to administer any Pension Plan, (iii) all notices received by
the Credit Parties or any ERISA Affiliate from a Multiemployer Plan sponsor
concerning the imposition or amount of withdrawal liability pursuant to Section
4202 of ERISA which could reasonably have a Material Adverse Effect and (iv) the
Credit Parties obtaining knowledge or reason to know that the Credit Parties or
any ERISA Affiliate has filed or intends to file a notice of intent to terminate
any Pension Plan under a distress termination within the meaning of Section
4041(c) of ERISA.

                     

                    SECTION
8.6.  Accuracy of
Information.  All written information, reports, statements and
other papers and data furnished by or on behalf of the Credit Parties to the
Administrative Agent or any Lender (other than financial forecasts) whether
pursuant to this Article VIII or any other provision of this Agreement, shall
be, at the time the same is so furnished, true and complete in all material
respects.

                     

                    ARTICLE
IX AFFIRMATIVE COVENANTS

                     

                    Until all of the Obligations (other
than any Obligations under any Hedging Agreement) have been paid and satisfied
in full and the Revolving Credit Commitment and L/C Commitment have terminated,
unless consent has been obtained in the manner provided for in Section 14.11,
the Credit Parties will, and will cause each of their Subsidiaries
to:

                     

                     

                    
                      
                        
                        

                      

                      
                        48

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    SECTION
9.1.  Preservation of Corporate
Existence and Related Matters.  Except as permitted by Section
11.5, preserve and maintain its separate corporate existence and all rights,
franchises, licenses and privileges necessary to the conduct of its business,
and qualify and remain qualified as a foreign corporation and authorized to do
business in each jurisdiction where the nature and scope of its activities
require it to so qualify under Applicable Law in which the failure to so qualify
would have a Material Adverse Effect.

                     

                    SECTION
9.2.  Maintenance of
Property.  Protect and preserve all properties useful in and
material to its business, including copyrights, patents, trade names and
trademarks; maintain in good working order and condition all buildings,
equipment and other tangible real and personal property material to the conduct
of its business, ordinary wear and tear excepted; and from time to time make or
cause to be made all renewals, replacements and additions to such property
necessary for the conduct of its business, so that the business carried on in
connection therewith may be properly and advantageously conducted at all
times.

                     

                    SECTION
9.3.  Insurance.  Maintain
insurance with financially sound and reputable insurance companies against such
risks and in such amounts as are customarily maintained by similar businesses
and as may be required by Applicable Law including, without limitation, hazard
and business interruption coverage.

                     

                    SECTION
9.4.  Accounting Methods and
Financial Records.  Maintain a system of accounting, and keep
such books, records and accounts (which shall be true and complete in all
material respects) as may be required or as may be necessary to permit the
preparation of financial statements in accordance with GAAP and in compliance
with the regulations of any Governmental Authority having jurisdiction over it
or any of its properties.

                     

                    SECTION
9.5.  Payment and Performance of
Obligations.  Pay and perform all Obligations under this
Agreement and the other Loan Documents, and pay (a) all material taxes,
assessments and other governmental charges that may be levied or assessed upon
it or any of its property, and (b) subject to the thresholds and other
limitations set forth in Section 12.1(f) or Section 12.1(g), all other material
indebtedness, obligations and liabilities in accordance with customary trade
practices; provided, that the Credit Parties or such Subsidiary may contest any
item described in clause (a) or (b) of this Section 9.5 in good faith so long as
adequate reserves are maintained with respect thereto to the extent required by
GAAP.  It is expected that all payments in respect of the Obligations,
the Existing Debt Securities and the Additional Debt Securities will be made by
the Borrower.

                     

                    SECTION
9.6.  Compliance With Laws and
Approvals.  Observe and remain in compliance with all
Applicable Laws and maintain in full force and effect all Governmental
Approvals, in each case applicable to the conduct of its business except where
the failure to observe or comply could not reasonably be expected to have a
Material Adverse Effect.

                     

                    SECTION
9.7.  Environmental
Laws.  In addition to and without limiting the generality of
Section 9.6, (a) comply with, and use best efforts to ensure such compliance by
all tenants and subtenants, with all applicable Environmental Laws and obtain
and comply with and maintain, and use its best efforts to ensure that all
tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws except where the failure to comply could not
reasonably have a Material Adverse Effect, (b) conduct and complete all
investigations, studies, sampling and testing, and all remedial, removal and
other actions required under Environmental Laws, and promptly comply with all
lawful orders and directives of any Governmental Authority regarding
Environmental Laws except (i) where the failure to do so could not reasonably be
expected to have a Material Adverse Effect or (ii) to the extent the Credit
Parties or any of their Subsidiaries are contesting, in good faith, any such
requirement, order or directive before the appropriate Governmental Authority so
long as adequate reserves are maintained with respect thereto to the extent
required by GAAP, and (c) defend, indemnify and hold harmless the Administrative
Agent and the Lenders, and their respective parents, Subsidiaries, Affiliates,
employees, agents, officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to the violation of, noncompliance with or liability
under any Environmental Laws applicable to the operations of the Credit Parties
or such Subsidiaries, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney’s and consultant’s fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of the
foregoing directly result from the gross negligence or willful misconduct of the
party seeking indemnification therefor.

                     

                     

                    
                      
                        
                        

                      

                      
                        49

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    SECTION
9.8.  Compliance with
ERISA.  In addition to and without limiting the generality of
Section 9.6, (a) comply with all applicable provisions of ERISA and the Code and
the regulations and published interpretations thereunder with respect to all
Employee Benefit Plans, except where the failure to comply could not reasonably
be expected to have a Material Adverse Effect, (b) not take any action or fail
to take action the result of which would result in a liability to the PBGC or to
a Multiemployer Plan in an amount that could reasonably be expected to have a
Material Adverse Effect, and (c) furnish to the Administrative Agent upon the
Administrative Agent’s request such additional information about any Employee
Benefit Plan concerning compliance with this covenant as may be reasonably
requested by the Administrative Agent.

                     

                    SECTION
9.9.  Conduct of
Business.  Engage only in businesses in substantially the same
fields as the businesses conducted on the Closing Date (including, without
limitation, the apparel, footwear, handbags, accessories, jewelry, denim and
cosmetics or other women’s accoutrements industries generally) and in lines of
business reasonably related thereto (collectively, “Permitted Lines of
Business”), or as otherwise permitted pursuant to the terms of this
Agreement.

                     

                    SECTION
9.10.  Visits and
Inspections.  Permit representatives of the Administrative
Agent or any Lender, from time to time upon reasonable prior notice to visit and
inspect its properties; inspect and make extracts from its books, records and
files, including, but not limited to, management letters prepared by independent
accountants; and discuss with its principal officers, and its independent
accountants, its business, assets, liabilities, financial condition, results of
operations and business prospects.

                     

                    SECTION
9.11.  Use
of Proceeds.  The Credit Parties shall use the proceeds of the
Loans and the Letters of Credit to (a) refinance certain existing Debt, (b) for
working capital and general corporate purposes of the Credit Parties and their
Subsidiaries, including acquisitions and stock repurchases, and (c) the payment
of certain fees and expenses incurred in connection with the transactions
contemplated hereby or thereby.

                     

                    SECTION
9.12.  Further
Assurances  (a)  Promptly upon request by the
Administrative Agent, or any Lender through the Administrative Agent, correct,
and cause each of its Subsidiaries promptly to correct, any material defect or
error that may be discovered in any Collateral Document or in the execution,
acknowledgment, filing or recordation thereof, and

                     

                     

                    
                      
                        
                        

                      

                      
                        50

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (b)           Promptly
upon request by the Administrative Agent, or any Lender through the
Administrative Agent, do, execute, acknowledge, deliver, record, re-record,
file, re-file, register and re-register any and all such further acts,
agreements, mortgages, assignments, financing statements and continuations
thereof, termination statements, notices of assignment, transfers, certificates,
assurances and other instruments as the Administrative Agent, or any Lender
through the Administrative Agent, may reasonably require from time to time in
order to (i) to the fullest extent permitted by applicable law, subject any
Collateral Grantor’s properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents, (ii)
perfect and maintain the validity, effectiveness and priority of any of the
Collateral Documents and any of the Liens intended to be created thereunder and
(iii) assure, convey, grant, assign, transfer, preserve, protect and confirm
more effectively unto the Secured Parties the rights granted or now or hereafter
intended to be granted to the Secured Parties under any Collateral Document or
under any other instrument executed in connection with any Collateral Document
to which any Collateral Grantor is or is to be a party, and cause each of its
Subsidiaries to do so.

                     

                    SECTION
9.13.  Covenant to Add Additional
Obligors and Give Security.  (x)  Upon the formation
or acquisition of any new direct or indirect Significant Subsidiaries by any
Credit Party, then in each case at the Borrower’s expense:

                     

                    (a)                 in
connection with the formation or acquisition of a Significant Subsidiary that is
not an entity that is a controlled foreign corporation of Jones Apparel Group
under Section 957 of the Internal Revenue Code (a “CFC”), within 10 days
after such formation or acquisition, cause each such Subsidiary to duly execute
and deliver to the Administrative Agent an assumption agreement, in form and
substance satisfactory to the Administrative Agent, pursuant to which such
Significant Subsidiary will become an Additional Obligor party to this
Agreement,

                     

                    (b)                 within
15 days after such formation or acquisition of any new Significant Subsidiary
that is not a CFC, cause such Subsidiary to duly execute and deliver to the
Administrative Agent security agreement supplements and other security
agreements as specified by, and in form and substance satisfactory to, the
Administrative Agent, securing payment of all of the Secured Obligations of such
Subsidiary,

                     

                    (c)                 within
30 days after such formation or acquisition, take, and cause each newly acquired
or newly formed Significant Subsidiary (other than any Subsidiary that is a CFC)
to take, whatever action (including, without limitation, the filing of Uniform
Commercial Code financing statements) may be necessary or advisable in the
opinion of the Administrative Agent to vest in the Administrative Agent (or in
any representative of the Administrative Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the security
agreement supplements and security agreements delivered pursuant to this Section
9.13, enforceable against all third parties in accordance with their
terms,

                     

                    (d)                 within
60 days after such formation or acquisition, deliver to the Administrative Agent
a signed copy of a favorable opinion, addressed to the Administrative Agent and
the Lenders, of counsel for the Credit Parties acceptable to the Administrative
Agent as to (1) the matters contained in clauses (a), (b) and (c) above, (2)
such assumption agreements, security agreement supplements and security
agreements being legal, valid and binding obligations of each Credit Party party
thereto enforceable in accordance with their terms, as to the matters contained
in clause (c) above, (3) such filings and other actions being sufficient to
create valid perfected Liens on such properties, and (4) such other matters as
the Administrative Agent may reasonably request.

                     

                     

                    
                      
                        
                        

                      

                      
                        51

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (y)  With respect to any
Grantor (as defined in the Collateral Documents) and any Significant Subsidiary
of the Credit Parties on the Amendment Date, at the Borrower’s
expense:

                     

                    (e)                 within
15 days after the Amendment Date, cause each such Subsidiary to duly execute and
deliver to the Administrative Agent an assumption agreement, in form and
substance satisfactory to the Administrative Agent, pursuant to which such
Grantor or Significant Subsidiary will become an Additional Obligor party to
this Agreement,

                     

                    (f)                 within
15 days after the Amendment Date, cause such Grantor or Significant Subsidiary,
to the extent that it has not already done so, to duly execute and deliver to
the Administrative Agent security agreement supplements and other security
agreements as specified by, and in form and substance satisfactory to, the
Administrative Agent, securing payment of all of the Secured Obligations of such
Subsidiary,

                     

                    (g)                 within
30 days after the Amendment Date, take, and cause each such Grantor or
Significant Subsidiary, to the extent that it has not already done so, to take,
whatever action (including, without limitation, the filing of Uniform Commercial
Code financing statements) may be necessary or advisable in the opinion of the
Administrative Agent to vest in the Administrative Agent (or in any
representative of the Administrative Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the security
agreement supplements and security agreements delivered pursuant to this Section
9.13, enforceable against all third parties in accordance with their
terms,

                     

                    (h)                 within
30 days after the Amendment Date, deliver to the Administrative Agent a signed
copy of a favorable opinion, addressed to the Administrative Agent and the
Lenders, of counsel for the Credit Parties acceptable to the Administrative
Agent as to (1) the matters contained in clauses (e), (f) and (g) above, (2)
such assumption agreements, security agreement supplements and security
agreements being legal, valid and binding obligations of each Credit Party party
thereto enforceable in accordance with their terms, as to the matters contained
in clause (g) above, (3) such filings and other actions being sufficient to
create valid perfected Liens on such properties, and (4) such other matters as
the Administrative Agent may reasonably request.

                     

                    ARTICLE
X FINANCIAL COVENANTS

                     

                    Until all of the Obligations (other
than any Obligations under any Hedging Agreement) have been paid and satisfied
in full and the Revolving Credit Commitment and L/C Commitment have terminated,
unless consent has been obtained in the manner set forth in Section 14.11
hereof, the Credit Parties and their Subsidiaries on a Consolidated basis will
not:

                     

                    SECTION
10.1.  Interest Coverage
Ratio.  As of the last day of each fiscal quarter listed below,
permit the Interest Coverage Ratio for the period of four (4) consecutive fiscal
quarters ending on such date, to be less than the ratio set forth opposite such
date:

                     

                    
                      
                        	
                                Fiscal Quarter Ended

                              	
                                Ratio

                              
	
                                December
      31, 2008

                              	
                                1.70
      to 1.00

                              
	
                                April
      4, 2009

                              	
                                1.70
      to 1.00

                              
	
                                July
      4, 2009

                              	
                                1.70
      to 1.00

                              
	
                                October
      3, 2009

                              	
                                1.70
      to 1.00

                              
	
                                December
      31, 2009

                              	
                                1.85
      to 1.00

                              
	
                                April
      3, 2010

                              	
                                1.85
      to 1.00

                              


                      

                    

                     

                    
                      
                        
                        

                      

                      
                        52

                        
                          

                        

                      

                      
                        
                        

                      

                    

                    SECTION
10.2.  Covenant Debt to EBITDA
Ratio.  As of the last day of each fiscal quarter listed below,
permit the Covenant Debt to EBITDA Ratio to be more than the ratio set forth
opposite such date:

                     

                    
                      
                        	
                                Fiscal Quarter Ended

                              	
                                Ratio

                              
	
                                December
      31, 2008

                              	
                                4.50
      to 1.00

                              
	
                                April
      4, 2009

                              	
                                4.50
      to 1.00

                              
	
                                July
      4, 2009

                              	
                                4.50
      to 1.00

                              
	
                                October
      3, 2009

                              	
                                4.35
      to 1.00

                              
	
                                December
      31, 2009

                              	
                                3.25
      to 1.00

                              
	
                                April
      3, 2010

                              	
                                3.25
      to 1.00

                              


                      

                    

                    


                    SECTION
10.3.  Asset
Coverage Ratio.  As of the end of each fiscal quarter, permit
the Asset Coverage Ratio to be less than 1.75.

                     

                    ARTICLE
XI NEGATIVE COVENANTS

                     

                    Until all of the Obligations (other
than any Obligations under any Hedging Agreement) have been paid and satisfied
in full and the Revolving Credit Commitment has expired or been terminated,
unless consent has been obtained in the manner set forth in Section 14.11
hereof, the Credit Parties will not and will not permit any of their
Subsidiaries to:

                     

                    SECTION
11.1.  Limitations on Debt and
Guaranty Obligations.  Create, incur, assume or suffer to exist
any Debt, including Guaranty Obligations, except:

                     

                    (a)                 the
Obligations of the Credit Parties;

                     

                    (b)                 [Reserved];

                     

                    (c)                 Debt
existing on the Amendment Date, as set forth on Schedule 7.1(p);

                     

                    (d)                 Debt
of the Credit Parties and their Subsidiaries, not otherwise permitted under this
Section 11.1, incurred in connection with (i) Capitalized Leases, (ii) purchase
money Debt and (iii) Debt of a Subsidiary incurred and outstanding on or prior
to the date on which such Subsidiary was acquired by any Credit Party or
otherwise became a Subsidiary of such Credit Party, or Debt assumed by a Credit
Party or a Subsidiary thereof in connection with an asset acquisition which Debt
was outstanding prior to the date of such asset acquisition (in each case, other
than Debt incurred as consideration in, or to provide all or any portion of the
funds or credit support utilized to consummate, the transaction or series of
transactions pursuant to which such Subsidiary became a Subsidiary of such
Credit Party or was otherwise acquired by such Credit Party or pursuant to which
such assets were acquired);

                     

                    (e)                 additional
Debt of the Credit Parties, not otherwise permitted under this Section 11.1, in
an aggregate outstanding amount not to exceed $50,000,000 (or the equivalent
Dollar Amount for borrowings denominated in currencies other than Dollars) on
any date of determination so long as no Default or Event of Default exists on
the date any such additional Debt is created or arises as a result of any
borrowing thereunder;

                     

                    
                      
                        
                        

                      

                      
                        53

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (f)                 additional
Debt of Subsidiaries of the Credit Parties (that are not themselves Credit
Parties) not otherwise permitted under this Section 11.1, in an aggregate
outstanding amount not to exceed $15,000,000 (or the equivalent Dollar Amount
for borrowings denominated in currencies other than Dollars) on any date of
determination;

                     

                    (g)                 Debt
of the Credit Parties to any Subsidiary or any other Credit Party and of any
Subsidiary to the Credit Parties or any other Subsidiary;

                     

                    (h)                 Debt
of the Credit Parties and their Subsidiaries arising under Open Account
Agreements in an aggregate amount not to exceed $200,000,000 (or the equivalent
Dollar Amount for borrowings denominated in currencies other than Dollars) on
any date of determination; and

                     

                    (i)                 Debt
incurred in respect of the extension, renewal, refinancing (including
defeasance), replacement or refunding (collectively, the “refinancing”) of Debt
incurred pursuant to clause (a), (b), (c) or (e); provided, that (i) such Debt
is an aggregate principal amount (or if incurred with original issue discount,
an aggregate issue price) not in excess of the sum of (x) the aggregate
principal amount (or if incurred with original issue discount, the aggregate
accreted value) then outstanding of the Debt being refinanced and (y) an amount
necessary to pay any fees and expenses, including premiums and defeasance costs,
related to such refinancing, (ii) the average life of such Debt is equal to or
greater than the average life of the Debt being refinanced, (iii) the stated
maturity of such Debt is no earlier than the stated maturity of the Debt being
refinanced; and (iv) the new Debt shall not be senior in right of payment to the
Debt that is being refinanced;  provided, that none
of the Debt permitted to be incurred by this Section shall expressly restrict,
limit or otherwise encumber (unless such restriction, limitation or other
encumbrance is a Permitted Encumbrance (as defined below)), the ability of any
Subsidiary of the Credit Parties to make any payment to the Credit Parties or
any of their Subsidiaries (in the form of dividends, intercompany advances or
otherwise) for the purpose of enabling the Credit Parties to pay the
Obligations.  For purposes of this Section 11.1, with regard to any
Debt, a “Permitted
Encumbrance” shall mean any restriction, limitation or other encumbrance
that applies solely if a default or event of default (other than a default
resulting solely from the breach of a representation or warranty) occurs and is
continuing under such Debt; provided further that, with
respect to any default or event of default (other than a payment default,
including as a result of acceleration, or a bankruptcy event with respect to the
obligor of such Debt), such encumbrance or restriction may not prohibit
dividends to the Credit Parties or any Subsidiary thereof to pay the Obligations
for more than one hundred eighty (180) days in any consecutive three hundred
sixty (360) day period.

                     

                    SECTION
11.2.  [Reserved].

                     

                    
                      
                        
                        

                      

                      
                        54

                        
                          

                        

                      

                      
                        
                        

                      

                    

                    


                    SECTION
11.3.  Limitations on
Liens.  Create, incur, assume or suffer to exist, any Lien on
or with respect to any of its assets or properties (including without limitation
shares of capital stock or other ownership interests), real or personal, whether
now owned or hereafter acquired, except:

                     

                    (a)                 Liens
for taxes, assessments and other governmental charges or levies (excluding any
Lien imposed pursuant to any of the provisions of ERISA or Environmental Laws)
not yet due or as to which the period of grace, if any, related thereto has not
expired or which are being contested in good faith and by appropriate
proceedings if adequate reserves are maintained to the extent required by
GAAP;

                     

                    (b)                 the
claims of materialmen, mechanics, carriers, warehousemen, processors or
landlords for labor, materials, supplies or rentals incurred in the ordinary
course of business, (i) which are not overdue for a period of more than thirty
(30) days or (ii) which are being contested in good faith and by appropriate
proceedings;

                     

                    (c)                 Liens
consisting of deposits or pledges made in the ordinary course of business in
connection with, or to secure payment of, obligations under workers’
compensation, unemployment insurance or similar legislation or obligations under
customer service contracts;

                     

                    (d)                 Liens
constituting encumbrances in the nature of zoning restrictions, easements and
rights or restrictions of record on the use of real property, which do not, in
any case, materially detract from the value of such property or materially
impair the use thereof in the ordinary conduct of business;

                     

                    (e)                 Liens
created under the Loan Documents and other Liens for the benefit of the
Administrative Agent and the Secured Parties;

                     

                    (f)                 Liens
incurred in the ordinary course of business not to exceed $10,000,000 in the
aggregate outstanding in addition to Liens existing on the Amendment
Date;

                     

                    (g)                 Liens
existing on any property or asset prior to the acquisition thereof by the Credit
Parties or any Subsidiary or existing on any property or asset of any Person
that becomes a Subsidiary or is merged with or into the Credit Parties or any
Subsidiary after the Amendment Date prior to the time such Person becomes a
Subsidiary or is so merged;

                     

                    (h)                 Liens
in existence on the Amendment Date and described on Schedule 11.3;

                     

                    (i)                 Liens
securing Debt incurred in connection with Capitalized Leases and purchase money
Debt permitted under Section 11.1(e); provided that (i) such Liens shall be
created substantially simultaneously with the acquisition of the related asset,
(ii) such Liens do not at any time encumber any property other than the property
financed by such Debt, (iii) the amount of Debt secured thereby is not increased
and (iv) the principal amount of Debt secured by any such Lien shall at no time
exceed one hundred percent (100%) of the original purchase price of such
property at the time it was acquired;

                     

                    (j)                 Liens
incurred to secure appeal bonds and judgment and attachment Liens in respect of
judgments or orders that do not constitute an Event of Default under Section
12.1(m);

                     

                    
                      
                        
                        

                      

                      
                        55

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (k)                 Liens
arising solely by virtue of any statutory or common law provision relating to
banker’s liens, rights of setoff or similar rights and remedies, in each case as
to deposit accounts or other funds maintained with a creditor depository
institution;

                     

                    (l)                 deposits
to secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature, in each case in the ordinary course of business;

                     

                    (m)                 Liens
arising in the ordinary course of business that do not secure monetary
obligations;

                     

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

                     

                    (o)                 Liens
securing Debt or other obligations between the Credit Parties and a Subsidiary
or between Subsidiaries or Credit Parties;

                     

                    (p)                 Liens
granted to any bank or other institution securing the payments to be made to
such bank or other institution by the Credit Parties or a Subsidiary of the
Credit Parties pursuant to any Hedging Agreement; provided that, such agreements
are entered into in, or are incidental to, the ordinary course of business;
and

                     

                    (q)                 The
refinancing of any Lien referred to in clause (g), (h), (i) or (p) provided, that the
principal amount of Debt (or, if incurred with original issue discount, an
aggregate issue price) secured thereby and not otherwise authorized by clause
(g), (h), (i) or (p) shall not exceed the principal amount of Debt (or if
incurred without original issue discount, the aggregate accreted value) plus any
fees and expenses, including premiums and defeasance costs, payable in
connection with any such extension, renewal, replacement or refunding, so
secured at the time of such extension, renewal, replacement or
refunding;

                     

                    provided, that, in no
event shall any Liens permitted in accordance with clause (f), (j) or (m) be
granted after the Amendment Date with respect to any intellectual property of
the Credit Parties or any of their Subsidiaries.

                     

                    SECTION
11.4.  Limitations on Loans,
Advances, Investments and Acquisitions.  Purchase, own, invest
in or otherwise acquire, directly or indirectly, any capital stock (other than
capital stock of the Credit Parties), interests in any partnership, limited
liability company or joint venture (including without limitation the creation or
capitalization of any Subsidiary), evidence of Debt or other obligation or
security, substantially all or a portion of the business or assets of any other
Person or any other investment or interest whatsoever in any other Person, or
make or permit to exist, directly or indirectly, any loans, advances or
extensions of credit to, or any investment in cash or by delivery of property
in, any Person, or enter into, directly or indirectly, any commitment or option
in respect of the foregoing (collectively, “Investments”)
except:

                     

                    (a)                 Investments
in Subsidiaries existing on the Amendment Date and the other existing loans,
advances and Investments described on Schedule 11.4;

                     

                    (b)                 Investments
made in accordance with the Permitted Investment Policy as in effect on the
Amendment Date;

                     

                     

                    
                      
                        
                        

                      

                      
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                    (c)                 Investments
by the Credit Parties or any Subsidiary, including Investments in the form of
acquisitions, including acquisitions of all or substantially all of the business
or a line of business (whether by the acquisition of capital stock, assets or
any combination thereof) of any other Person, so long as (i) a Responsible
Officer certifies to the Administrative Agent and the Required Lenders that no
Default or Event of Default has occurred and is continuing or would result from
the closing of such acquisition or the consummation of such Investment, such
certification to include, for any acquisition involving a purchase price in
excess of $50,000,000, either individually or in a series of related
transactions, a financial condition certificate to which is attached a pro forma
balance sheet of Jones Apparel Group and its Subsidiaries setting forth on a pro
forma basis the financial condition of Jones Apparel Group and its Subsidiaries
on a Consolidated basis as of the most recently ended Fiscal Year, reflecting on
a pro forma basis the effect of the transactions contemplated by such
acquisition, including all fees and expenses  in connection therewith,
and evidencing compliance on a pro forma basis with the covenants contained in
Article X hereof, and (ii) the price for such Investment, together with all
other Investments made in accordance with this clause (c) after the Amendment
Date, does not exceed $10,000,000 in the aggregate;

                     

                    (d)                 Investments
set forth on Schedule 11.4 (other than Investments in Subsidiaries) in an amount
not to exceed $10,000,000;

                     

                    (e)                 loans
and advances to third party contractors in the ordinary course of business and
consistent with past practice not to exceed in an aggregate outstanding amount
$6,000,000 (excluding such loans and advances consisting of prepayments or
advances for inventory or services); and loans and advances to employees of the
Credit Parties and their Subsidiaries in an aggregate outstanding amount not to
exceed $4,000,000; and

                     

                    (f)                 intercompany
loans and advances among the Credit Parties and their Subsidiaries so long as
permitted under the terms of Sections 11.1 and 11.3.

                     

                    SECTION
11.5.  Limitations on Mergers and
Liquidation.  Merge, consolidate or enter into any similar
combination with any other Person or liquidate, wind-up or dissolve itself (or
suffer any liquidation or dissolution) except so long as no Default or Event of
Default has occurred and is continuing, or would result therefrom:

                     

                    (a)                 any
Credit Party may merge or consolidate with or into any Person; provided that (i)
such Credit Party shall be the survivor of such merger or consolidation or (ii)
the survivor assumes and succeeds to the Obligations of such Credit Party
pursuant to an assumption agreement in form reasonably satisfactory to the
Administrative Agent and the Required Lenders;

                     

                    (b)                 any
Wholly-Owned Subsidiary of the Credit Parties may merge or consolidate with or
into any other Wholly-Owned Subsidiary of the Credit Parties;

                     

                    (c)                 any
Wholly-Owned Subsidiary may merge or consolidate with or into the Person such
Wholly-Owned Subsidiary was formed to acquire in connection with an acquisition
permitted by Section 11.4(b), (c) or (d);

                     

                     

                    
                      
                        
                        

                      

                      
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                    (d)                 any
Wholly-Owned Subsidiary of the Credit Parties may merge or consolidate with or
into any Credit Party; provided that, such Credit Party is the survivor of such
merger or consolidation; and

                     

                    (e)                 any
Credit Party may merge or consolidate with or into any other Credit
Party.

                     

                    SECTION
11.6.  Limitations on Sale or
Transfer of Assets.  Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets, whether now owned
or hereafter acquired (collectively, “sale”), except for
the following:

                     

                    (a)                 the
sale of inventory in the ordinary course of business;

                     

                    (b)                 the
sale of obsolete assets no longer used or usable in the business of the Credit
Parties or any of their Subsidiaries;

                     

                    (c)                 the
sale or discount without recourse of accounts receivable arising in the ordinary
course of business in connection with the compromise or collection
thereof;

                     

                    (d)                 the
sale of assets between the Credit Parties and any Subsidiary or between
Subsidiaries or Credit Parties;

                     

                    (e)                 the
sale of any other assets of the Credit Parties and their Subsidiaries outside
the ordinary course of business so long as the total fair market value for all
such sales on and after the Amendment Date on an aggregate basis does not exceed
$10,000,000; and

                     

                    (f)                 the
sale of assets purchased in accordance with the Permitted Investment Policy as
in effect on the Amendment Date.

                     

                    SECTION
11.7.  Limitations on Dividends and
Distributions.  Declare or pay any dividends upon any of its
capital stock; purchase, redeem, retire or otherwise acquire, directly or
indirectly, any shares of its capital stock, or make any distribution of cash,
property or assets among the holders of shares of its capital stock, or make any
change in its capital structure that could reasonably be expected to have a
Material Adverse Effect; provided that: (a) the Credit Parties may pay dividends
solely in shares of their own capital stock or other ownership interest
(including dividends consisting of rights to purchase such capital stock or
other ownership interest), (b) any Subsidiary may pay dividends or make
distributions to the Credit Parties or any Wholly-Owned Subsidiary of the Credit
Parties, (c) any Credit Party may pay dividends or make distributions to any
other Credit Party and (d) as long as no Default or
Event of Default has occurred and is continuing or would be created thereby (i)
until April 1, 2009, the Credit Parties may declare and pay dividends on shares of
their capital stock or other ownership interests consistent with past practice
established prior to the Amendment Date, (ii) the Credit Parties or any Subsidiary may redeem shares
of their capital stock or other ownership interest pursuant to a plan approved
by the Board of Directors of the Credit Parties or such Subsidiary, as
applicable (A) to the extent required by contracts entered into prior to the
Amendment Date and (B)additional
share repurchases in an amount not to exceed $5,000,000 after the Amendment
Date, and (iii) from and after April 1, 2009, so long as the
Borrowing Availability Limit is not less than $200,000,000 at the time such
dividend is paid, the Credit Parties may pay dividends in an amount not to
exceed in any calendar year an amount equal to $30,000,000 (but only $22,500,000
for period commencing April 1, 2009 and ending December 31, 2009) plus 10% of
cumulative Net Income for the immediately preceding calendar year.

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
11.8.  Transactions with
Affiliates.  Directly or indirectly enter into, or be a party
to, any transaction with any of its Affiliates, except (i) on terms that
are no less favorable to it than it would obtain in a comparable arm’s length
transaction with a Person not its Affiliate, (ii) without limiting any
other provision of this Agreement, in connection with any acquisition otherwise
permitted pursuant to the terms of this Agreement or (iii) for transactions
between Credit Parties or between Credit Parties and Subsidiaries of Credit
Parties.

                     

                    SECTION
11.9.  Changes in Fiscal Year
End.  Change its Fiscal Year.

                     

                    SECTION
11.10.  Amendments; Payments and
Prepayments of Material Debt and Subordinated Debt.  Upon the
occurrence and continuation of a Default or an Event of Default, amend or modify
(or permit the modification or amendment of) in any manner materially adverse to
the Lenders any of the terms or provisions of any Debt in excess of $25,000,000,
including without limitation the Additional Debt Securities, if any, or any
Subordinated Debt, or cancel or forgive, make any voluntary or optional payment
or prepayment on, or redeem or acquire for value (including, without limitation,
by way of depositing with any trustee with respect thereto money or securities
before due for the purpose of paying when due) any Subordinated
Debt.

                     

                    SECTION
11.11.  Limitations on Capital
Expenditures.  Make, or permit any of its Subsidiaries to make,
any Capital Expenditures that would cause the aggregate of all such Capital
Expenditures made by the Credit Parties and their Subsidiaries in any calendar
year to exceed $75,000,000.

                     

                    ARTICLE
XII DEFAULT AND REMEDIES

                     

                    SECTION
12.1.  Events of
Default.  Each of the following shall constitute an Event of
Default, whatever the reason for such event and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment or
order of any court or any order, rule or regulation of any Governmental
Authority or otherwise:

                     

                    (a)                 Default in Payment of
Principal of Loans and Reimbursement Obligations.  The Borrower
shall default in any payment of principal of any Loan or Reimbursement
Obligation when and as due (whether at maturity, by reason of acceleration or
otherwise).

                     

                    (b)                 Other Payment
Default.  The Borrower shall default in the payment when and as
due (whether at maturity, by reason of acceleration or otherwise) of interest on
any Loan or Reimbursement Obligation or the payment of any other Obligation
(other than any Obligation under any Hedging Agreement), and such default shall
continue unremedied for three (3) Business Days.

                     

                    (c)                 Misrepresentation.  Any
representation or warranty made or deemed to be made by the Credit Parties or
any of their Subsidiaries, if applicable, under this Agreement, any Loan
Document or any amendment hereto or thereto, shall at any time prove to have
been incorrect or misleading in any material respect when made or deemed
made.

                     

                    (d)                 Default in Performance of
Certain Covenants.  Any of the Credit Parties shall default in
the performance or observance of any covenant or agreement contained in Article
X or XI of this Agreement.

                     

                     

                    
                      
                        
                        

                      

                      
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                    (e)                 Default in Performance of
Other Covenants and Conditions.  Any of the Credit Parties or
any Subsidiary thereof, if applicable, shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for otherwise in this Section
12.1) or any other Loan Document and such default shall continue for a period of
thirty (30) days after written notice thereof has been given to the Borrower by
the Administrative Agent.

                     

                    (f)                 Hedging
Agreement.  Any termination payments in an amount greater than
$50,000,000 shall be due by any Credit Party under any Hedging Agreement and
such amount is not paid within thirty (30) Business Days of the due date
thereof.

                     

                    (g)                 Debt
Cross-Default.  Any of the Credit Parties or any of their
Subsidiaries shall (i) default in the payment of principal or interest on any
Debt (other than the Loans or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $50,000,000, beyond the period
of grace if any, provided in the instrument or agreement under which such Debt
was created, or (ii) default in the observance or performance of any other
agreement or condition relating to any Debt (other than the Loans or any
Reimbursement Obligation), the aggregate outstanding amount of which Debt is in
excess of $50,000,000 or contained in any instrument or agreement evidencing,
securing or relating thereto or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Debt (or a trustee or agent on behalf of
such holder or holders) to cause, with the giving of notice if required, any
such Debt to become due prior to its stated maturity (any applicable grace
period having expired).

                     

                    (h)                 Change in
Control.  Any person or group of persons (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended), other than a
Credit Party or any Subsidiary thereof, shall obtain ownership or control in one
or more series of transactions of more than thirty-three and one-third percent
(33.33%) of the common stock or thirty-three and one-third percent (33.33%) of
the voting power of any Credit Party entitled to vote in the election of members
of the Board of Directors of such Credit Party or there shall have occurred
under any indenture or other instrument evidencing any debt in excess of
$50,000,000 any “change in control”
(as defined in such indenture or other evidence of debt) obligating the Borrower
to repurchase, redeem or repay all or any part of the debt or capital stock
provided for therein (any such event, a “Change in
Control”).  Further, except as set forth in Section 11.5, Jones
Apparel Group shall at all times own 100% of the capital stock of Jones Apparel
Group Holdings and Jones Apparel Group Holdings shall at all times own 100% of
the capital stock of the Borrower.

                     

                    (i)                 Voluntary Bankruptcy
Proceeding.  Any Credit Party or any Subsidiary thereof shall
(i) commence a voluntary case under the federal bankruptcy laws (as now or
hereafter in effect), (ii) file a petition seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the
foregoing.

                     

                     

                    
                      
                        
                        

                      

                      
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                    (j)                 Involuntary Bankruptcy
Proceeding.  A case or other proceeding shall be commenced
against any Credit Party or any Subsidiary thereof in any court of competent
jurisdiction seeking (i) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or
(ii) the appointment of a trustee, receiver, custodian, liquidator or the like
for any Credit Party or any Subsidiary thereof or for all or any substantial
part of their respective assets, domestic or foreign, and such case or
proceeding shall continue without dismissal or stay for a period of sixty (60)
consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.

                     

                    (k)                 Collateral
Documents.  Any Collateral Document or financing statement
after delivery thereof shall for any reason (other than as permitted under any
Collateral Document) cease to create a valid and perfected lien on and security
interest in any material amount of the Collateral purported to be covered
thereby.

                     

                    (l)                 Termination
Event.  The occurrence of any of the following events: (i) the
Borrower or any ERISA Affiliate fails to make full payment to an Employee
Benefit Plan when due (after giving effect to any applicable grace period) of
contributions in excess of $2,000,000, (ii) an accumulated funding deficiency in
excess of $2,000,000 occurs or exists, whether or not waived, with respect to
any Pension Plan or (iii) a Termination Event that could reasonably be expected
to result in liability in excess of $5,000,000 to the Borrower or any ERISA
Affiliate.

                     

                    (m)                 Judgment.  A
judgment or order for the payment of money which causes the aggregate amount of
all such judgments to exceed $50,000,000 in any Fiscal Year shall be entered
against any Credit Party or any Subsidiary thereof by any court and such
judgment or order shall continue without discharge or stay for a period of
thirty (30) days.

                     

                    SECTION
12.2.  Remedies.  Upon
the occurrence of an Event of Default, with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Credit Parties:

                     

                    (a)                 Acceleration; Termination of
Facilities.  Declare the principal of and interest on the
Loans, the Reimbursement Obligations at the time outstanding, and all other
amounts owed to the Lenders and to the Administrative Agent under this Agreement
or any of the other Loan Documents (other than any Hedging Agreement)
(including, without limitation, all L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) and all other Obligations (other than Obligations
owing under any Hedging Agreement), to be forthwith due and payable, whereupon
the same shall immediately become due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly waived, anything
in this Agreement or the other Loan Documents to the contrary notwithstanding,
and terminate the Credit Facility and any right of the Borrower to request
borrowings or Letters of Credit thereunder; provided, that upon the occurrence
of an Event of Default specified in Section 12.1(i) or (j) with respect to the
Credit Parties, the Credit Facility shall be automatically terminated and all
Obligations (other than obligations owing under any Hedging Agreement) shall
automatically become due and payable.

                     

                     

                    
                      
                        
                        

                      

                      
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                    (b)                 Letters of
Credit.  With respect to all Letters of Credit with respect to
which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrower at such
time to deposit or cause to be deposited in a cash collateral account opened by
the Administrative Agent an amount equal to the Dollar Amount of the aggregate
then undrawn and unexpired amount of such Letters of Credit.  Amounts
held in such cash collateral account shall be applied by the Administrative
Agent to the payment of drafts drawn under such Letters of Credit, and the
unused portion thereof after all such Letters of Credit shall have expired or
been fully drawn upon, if any, shall be applied to repay the other
Obligations.  After all such Letters of Credit shall have expired or
been fully drawn upon, the Reimbursement Obligation shall have been satisfied
and all other Obligations shall have been paid in full, the balance, if any, in
such cash collateral account shall be promptly returned to the
Borrower.

                     

                    (c)                 Rights of
Collection.  Exercise on behalf of the Lenders all of its other
rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Obligations.

                     

                    SECTION
12.3.  Rights and Remedies
Cumulative; Non-Waiver; Etc.  The enumeration of the rights and
remedies of the Administrative Agent and the Lenders set forth in this Agreement
is not intended to be exhaustive and the exercise by the Administrative Agent
and the Lenders of any right or remedy shall not preclude the exercise of any
other rights or remedies, all of which shall be cumulative, and shall be in
addition to any other right or remedy given hereunder or under the Loan
Documents or that may now or hereafter exist in law or in equity or by suit or
otherwise.  No delay or failure to take action on the part of the
Administrative Agent or any Lender in exercising any right, power or privilege
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, power or privilege preclude other or further exercise thereof or
the exercise of any other right, power or privilege or shall be construed to be
a waiver of any Event of Default.  No course of dealing between the
Credit Parties, the Administrative Agent and the Lenders or their respective
agents or employees shall be effective to change, modify or discharge any
provision of this Agreement or any of the other Loan Documents or to constitute
a waiver of any Event of Default.

                     

                    ARTICLE
XIII THE ADMINISTRATIVE AGENT

                     

                    SECTION
13.1.  Appointment.  Each
of the Lenders hereby irrevocably designates and appoints Wachovia as
Administrative Agent of such Lender under this Agreement and the other Loan
Documents for the term hereof and each such Lender irrevocably authorizes
Wachovia as Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and such other Loan
Documents, together with such other powers as are reasonably incidental thereto,
including acting as the agent of such Lender for purposes of acquiring, holding
and enforcing any and all Liens on Collateral granted by any of the Credit
Parties and their Subsidiaries to secure any of the Secured
Obligations.  Notwithstanding any provision to the contrary elsewhere
in this Agreement or such other Loan Documents, the Administrative Agent shall
not have any duties or responsibilities, except those expressly set forth herein
and therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the other Loan Documents or otherwise exist
against the Administrative Agent.  Any reference to the Administrative
Agent in this Article XIII shall be deemed to refer to the Administrative Agent
solely in its capacity as Administrative Agent and not in its capacity as a
Lender.

                     

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
13.2.  Delegation of
Duties.  The Administrative Agent may execute any of its
respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.  The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by the Administrative Agent with reasonable
care.

                     

                    SECTION
13.3.  Exculpatory
Provisions.  Neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for actions occasioned solely by its or such
Person’s own gross negligence or willful misconduct), or (b) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by the Borrower or any of its Subsidiaries or any officer
thereof contained in this Agreement or the other Loan Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or the other Loan Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, any other Loan
Document or any other agreement, instrument or document or the perfection or
priority of any Lien or security interest created or purported to be created by
the Collateral Documents or for any failure of the Borrower or any of its
Subsidiaries to perform its obligations hereunder or thereunder.  The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrower or any of its
Subsidiaries.

                     

                    SECTION
13.4.  Reliance by the
Administrative Agent.  The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent.  The Administrative Agent may deem and treat the
holder of any Revolving Credit Loan as the owner thereof for all purposes unless
such Revolving Credit Loan shall have been transferred in accordance with
Section 14.10 hereof.  The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement and the
other Loan Documents unless it shall first receive such advice or concurrence of
the Required Lenders (or, when expressly required hereby or by the relevant
other Loan Document, all the Lenders) as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action except for its own gross negligence or willful
misconduct.  The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or,
when expressly required hereby, all the Lenders), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.

                     

                    SECTION
13.5.  Notice of
Default.  The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a “notice of
default”.  In the event that the Administrative Agent receives
such a notice, it shall promptly give notice thereof to the
Lenders.  The Administrative Agent shall take such action with respect
to such Default or Event of Default as shall be reasonably directed by the
Required Lenders; provided that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders, except to the extent that other provisions of this
Agreement expressly require that any such action be taken or not be taken only
with the consent and authorization or the request of the Lenders or the Required
Lenders.

                     

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
13.6.  Non-Reliance on the
Administrative Agent and Other Lenders.  Each Lender expressly
acknowledges that neither the Administrative Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates has made any representations or warranties to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrower or any of its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any
Lender.  Each Lender represents to the Administrative Agent that it
has, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries and made its own decision to make its Loans and
issue or participate in Letters of Credit hereunder and enter into this
Agreement.  Each Lender also represents that it will, independently
and without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries.  Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder or by the other Loan Documents,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrower or any of its Subsidiaries which may come into the possession of the
Administrative Agent or any of its respective officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates.

                     

                    SECTION
13.7.  Indemnification.  The
Lenders agree to indemnify the Administrative Agent in its capacity as such and
(to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to the respective
amounts of their Revolving Credit Commitment Percentage from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Loans or any Reimbursement Obligation) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of this
Agreement or the other Loan Documents, or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent they result from the Administrative Agent’s bad faith, gross
negligence or willful misconduct.  The agreements in this Section 13.7
shall survive the payment of the Loans, any Reimbursement Obligation and all
other amounts payable hereunder and the termination of this
Agreement.

                     

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
13.8.  The
Administrative Agent in Its Individual Capacity.  The
Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower as though the Administrative Agent were not an Administrative Agent
hereunder.  With respect to any Loans made or renewed by it and with
respect to any Letter of Credit issued by it or participated in by it, the
Administrative Agent shall have the same rights and powers under this Agreement
and the other Loan Documents as any Lender and may exercise the same as though
it were not an Administrative Agent, and the terms “Lender” and “Lenders” shall
include the Administrative Agent in its individual capacity.

                     

                    SECTION
13.9.  Resignation of the
Administrative Agent; Successor Administrative Agent.  Subject
to the appointment and acceptance of a successor as provided below, the
Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Credit Parties.  Upon any such resignation, the
Required Lenders shall have the right, subject to the approval of the Credit
Parties (so long as no Default or Event of Default has occurred and is
continuing), to appoint a successor Administrative Agent, which successor shall
have minimum capital and surplus of at least $500,000,000.  If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, been approved (so long as no Default or Event of Default has occurred
and is continuing) by the Credit Parties or have accepted such appointment
within thirty (30) days after the Administrative Agent’s giving of notice of
resignation, then the Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent reasonably acceptable to the Credit
Parties (so long as no Default or Event of Default has occurred and is
continuing), which successor shall have minimum capital and surplus of at least
$500,000,000.  Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all rights, powers, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder (except that the retiring Administrative Agent shall
continue to hold any Collateral until such time as a successor Administrative
Agent is appointed).  After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of this Section
13.9 shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative
Agent.

                     

                    SECTION
13.10.  Syndication and
Documentation Agents.  Each Syndication Agent in its capacity
as Syndication Agent and each documentation agent in its capacity as
documentation agent shall have no duties or responsibilities and no liabilities
under this Agreement or any other Loan Document but shall be entitled, in such
capacity, to the same protections afforded to the Administrative Agent under
this Article XIII.

                     

                    ARTICLE
XIV MISCELLANEOUS

                     

                    SECTION
14.1.  Notices.  (a)  Method of
Communication.  Except as otherwise provided in this Agreement,
all notices and communications hereunder shall be in writing, or by telephone
subsequently confirmed in writing.  Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third (3rd)
Business Day following the date sent by certified mail, return receipt
requested.  A telephonic notice to the Administrative Agent as
understood by the Administrative Agent will be deemed to be the controlling and
proper notice in the event of a discrepancy with or failure to receive a
confirming written notice.

                     

                    
                      
                        
                        

                      

                      
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                    (b)           Addresses for
Notices.  Notices to any party shall be sent to it at the
following addresses, or any other address as to which all the other parties are
notified in writing.

                     

                    If to the Credit Parties:

                     

                    Jones Apparel Group, Inc.

                    1411 Broadway

                    New York, New
York  10018

                    Attention:  Chief Financial
Officer

                    Telephone No.:  (212)
703-9152

                    Telecopy No.:  (212)
703-9154

                     

                    If to Wachovia:

                     

                    Wachovia Bank, National
Association

                    Administrative
Agent:

                    201 South College Street,
CP-8

                    Charlotte, NC
28288-0680

                    Attention: Syndication Agency Services

                    Telephone No:  704-715-1353

                    Telecopy
No:  704-383-0288

                     

                    With copies to:

                     

                    Wachovia Bank, National
Association

                    Administrative
Agent:

                    1339 Chestnut Street,
PA4830

                    Philadelphia,
PA  19107

                    Attention: Susan T.
Gallagher

                    Telephone
No:  267-321-6712

                    Telecopy
No:  267-321-6700

                     

                    If to any Lender:

                     

                    To the Address set forth on Schedule
1.1(a) hereto

                     

                    (c)           Administrative Agent’s
Office.  The Administrative Agent hereby designates its office
located at the address set forth above, or any subsequent office which shall
have been specified for such purpose by written notice to the Borrower and the
Lenders, as the Administrative Agent’s Office referred to herein, to which
payments due are to be made and at which Loans will be disbursed.

                     

                    SECTION
14.2.  Expenses;
Indemnity.  The Borrower will (a) pay all reasonable
out-of-pocket expenses of the Administrative Agent in connection with (i) the
preparation, execution and delivery of this Agreement and each other Loan
Document, whenever the same shall be executed and delivered, including without
limitation the reasonable out-of-pocket syndication and due diligence expenses
and reasonable fees and disbursements of counsel for the Administrative Agent
and (ii) the preparation, execution and delivery of any waiver, amendment or
consent by the Administrative Agent or the Lenders relating to this Agreement or
any other Loan Document, including without limitation reasonable fees and
disbursements of counsel for the Administrative Agent, (b) pay all reasonable
out-of-pocket expenses of the Administrative Agent actually incurred in
connection with the administration of the Credit Facility, (c) pay all
reasonable out-of-pocket expenses of the Administrative Agent and each Lender
actually incurred in connection with the enforcement of any rights and remedies
of the Administrative Agent and the Lenders under the Credit Facility, including
to the extent reasonable under the circumstances consulting with accountants,
attorneys and other Persons concerning the nature, scope or value of any right
or remedy of the Administrative Agent or any Lender hereunder or under any other
Loan Document or any factual matters in connection therewith, which expenses
shall include without limitation the reasonable fees and disbursements of such
Persons, and (d) defend, indemnify and hold harmless the Administrative Agent
and the Lenders, and their respective parents, Subsidiaries, Affiliates,
employees, Administrative Agents, officers and directors, from and against any
losses, penalties, fines, liabilities, settlements, damages, costs and expenses,
suffered by any such Person in connection with any claim, investigation,
litigation or other proceeding (whether or not the Administrative Agent or any
Lender is a party thereto) and the prosecution and defense thereof, arising out
of or in any way connected with this Agreement, any other Loan Document or the
Loans, including without limitation reasonable attorney’s and consultant’s fees,
except to the extent that any of the foregoing result from the gross negligence
or willful misconduct of any indemnified party.

                     

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
14.3.  Set-off.  In
addition to any rights now or hereafter granted under Applicable Law and not by
way of limitation of any such rights, upon and after the occurrence of any Event
of Default and during the continuance thereof, the Lenders and any assignee or
participant of a Lender in accordance with Section 14.10 are hereby authorized
by the Credit Parties at any time or from time to time, without notice to the
Credit Parties or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits (general
or special, time or demand, including, but not limited to, indebtedness
evidenced by certificates of deposit, whether matured or unmatured) and any
other indebtedness at any time held or owing by the Lenders, or any such
assignee or participant to or for the credit or the account of the Borrower
against and on account of the Obligations irrespective of whether or not (a) the
Lenders shall have made any demand under this Agreement or any of the other Loan
Documents or (b) the Administrative Agent shall have declared any or all of the
Obligations to be due and payable as permitted by Section 12.2 and although such
Obligations shall be contingent or unmatured.

                     

                    SECTION
14.4.  Governing
Law.  This Agreement, the Notes and the other Loan Documents,
unless otherwise expressly set forth therein, shall be governed by, construed
and enforced in accordance with the laws of the State of New York.

                     

                    SECTION
14.5.  Consent to
Jurisdiction.  Each of the parties hereto hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located in
New York County, New York, in any action, claim or other proceeding arising out
of any dispute in connection with this Agreement and the other Loan Documents,
any rights or obligations hereunder or thereunder, or the performance of such
rights and obligations.  Each of the parties hereto hereby irrevocably
consents to the service of a summons and complaint and other process in any
action, claim or proceeding brought by any other party hereto in connection with
this Agreement or the other Loan Documents, any rights or obligations hereunder
or thereunder, or the performance of such rights and obligations, on behalf of
itself or its property, in the manner specified in Section
14.1.  Nothing in this Section 14.5 shall affect the right of any of
the parties hereto to serve legal process in any other manner permitted by
Applicable Law or affect the right of any of the parties hereto to bring any
action or proceeding against any other party hereto or its properties in the
courts of any other jurisdictions.

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
14.6.  Waiver of Jury
Trial.  THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH CREDIT
PARTY HEREBY ACKNOWLEDGE THEY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF
ANY JUDICIAL PROCEEDING, ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF,
CONNECTED WITH OR RELATING TO THE LOAN DOCUMENTS (“Dispute”) IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS.

                     

                    SECTION
14.7.  Reversal of
Payments.  To the extent any Credit Party makes a payment or
payments to the Administrative Agent for the ratable benefit of the Lenders or
the Administrative Agent receives any payment or proceeds of the Collateral
which payments or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds repaid, the Obligations or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if such
payment or proceeds had not been received by the Administrative
Agent.

                     

                    SECTION
14.8.  Injunctive Relief; Punitive
Damages.  (a)  Each of the parties to this Agreement
recognizes that, in the event such party fails to perform, observe or discharge
any of its obligations or liabilities under this Agreement, any remedy of law
may prove to be inadequate relief to the other parties
hereto.  Therefore, each of the parties hereto agrees that the other
parties hereto, at such other party’s option, shall be entitled to pursue
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.

                     

                    (b)           The
Administrative Agent, the Lenders and the Credit Parties (on behalf of
themselves and their Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
14.9.  Accounting
Matters.  Except as otherwise expressly provided herein, all
terms of an accounting or financial nature shall be construed in accordance with
GAAP, as in effect from time to time, provided that, if the Borrower notifies
the Administrative Agent that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the
Amendment Date in GAAP or in the application thereof on the operation of such
provision (or if the Administrative Agent notifies the Borrower that the
Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance therewith.

                     

                    SECTION
14.10.  Successors and Assigns;
Participations.  (a)  Benefit of
Agreement.  This Agreement shall be binding upon and inure to
the benefit of the Credit Parties, the Administrative Agent and the Lenders, all
future holders of the Notes, and their respective successors and permitted
assigns, except that the Borrower shall not assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of each
Lender other than pursuant to Section 11.5.

                     

                    (b)           Assignment by
Lenders.  Each Lender may, with the consent of the Borrower (so
long as no Default or Event of Default has occurred and is continuing) and the
consent of the Administrative Agent, which consents shall not be unreasonably
withheld or delayed, assign to one or more Eligible Assignees all or a portion
of its interests, rights and obligations under this Agreement (including,
without limitation, all or a portion of the Extensions of Credit at the time
owing to it and the Revolving Credit Notes held by it); provided
that:

                     

                    (i)           each
such assignment shall be of a constant, and not a varying, percentage of all the
assigning Lender’s Revolving Credit Commitment and all other rights and
obligations under this Agreement;

                     

                    (ii)           if
less than all of the assigning Lender’s Revolving Credit Commitment or Revolving
Credit Loans is to be assigned, the Revolving Credit Commitment or Revolving
Credit Loans so assigned shall not be less than $5,000,000;

                     

                    (iii)           the
parties to each such assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance in the form of Exhibit G attached hereto (an “Assignment and
Acceptance”), together with any Revolving Credit Note or Revolving Credit
Notes subject to such assignment;

                     

                    (iv)           such
assignment shall not, without the consent of the Borrower, on behalf of itself
and the other Credit Parties, require the Borrower, or any other Credit Party,
to file a registration statement with the Securities and Exchange Commission or
apply to or qualify the Revolving Credit Loans or the Revolving Credit Notes
under the blue sky laws of any state;

                     

                    (v)           the
assigning Lender shall pay to the Administrative Agent an assignment fee of
$3,000 upon the execution by such Lender of the Assignment and Acceptance;
provided that no such fee shall be payable upon any assignment by a Lender to an
Affiliate thereof; and

                     

                     

                    
                      
                        
                        

                      

                      
                        69

                        
                          

                        

                      

                      
                        
                        

                      

                    

                     

                    (vi)           no
consents will be required for assignments where the Eligible Assignee is an
Affiliate of the assigning Lender.

                     

                    Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least ten (10)
Business Days after the execution thereof, (A) the assignee thereunder shall be
a party hereto and, to the extent of the interest assigned in such Assignment
and Acceptance, have the rights and obligations of a Lender hereby and (B) the
Lender thereunder shall, to the extent of the interest assigned in such
assignment, be released from its obligations under this Agreement.

                     

                    (c)           Rights and Duties upon
Assignment.  By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as set forth in such
Assignment and Acceptance.

                     

                    (d)           Register.  The
Administrative Agent shall maintain a copy of each Assignment and Acceptance
delivered to it and record the names and addresses of the Lenders and the amount
of the Extensions of Credit with respect to each Lender from time to time in the
Register.

                     

                    No assignment shall be effective for
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.  The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement.  The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.

                     

                    (e)           Issuance of New Revolving
Credit Notes.  Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Eligible Assignee together with any
Revolving Credit Note or Revolving Credit Notes if any have been issued pursuant
to this Agreement, subject to such assignment and the written consent to such
assignment, the Administrative Agent shall, if such Assignment and Acceptance
has been completed and is substantially in the form of Exhibit G:

                     

                    (i)           accept
such Assignment and Acceptance;

                     

                    (ii)           record
the information contained therein in the Register;

                     

                    (iii)           give
prompt notice thereof to the Lenders and the Borrower, on behalf of itself and
the other Credit Parties; and

                     

                    (iv)           promptly
deliver a copy of such Assignment and Acceptance to the Borrower.

                     

                    Within ten (10) Business Days after
receipt of notice, if requested by the Eligible Assignee the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Revolving Credit Note or Revolving Credit Notes, a new Revolving Credit Note or
Revolving Credit Notes to the order of such Eligible Assignee in amounts equal
to the Revolving Credit Commitment assumed by it pursuant to such Assignment and
Acceptance and a new Revolving Credit Note or Revolving Credit Notes to the
order of the assigning Lender in an amount equal to the Revolving Credit
Commitment retained by it hereunder. Such new Revolving Credit Note or Revolving
Credit Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Revolving Credit Note or Revolving Credit
Notes, shall be dated the effective date of such Assignment and Acceptance and
shall otherwise be in substantially the form of the assigned Revolving Credit
Notes delivered to the assigning Lender.  Each surrendered Revolving
Credit Note or Revolving Credit Notes shall be canceled and returned to the
Borrower.

                     

                    
                      
                        
                        

                      

                      
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                    (f)           Participations.  Each
Lender may sell participations to one or more banks or other entities in all or
a portion of its rights and/or obligations under this Agreement (including,
without limitation, all or a portion of its Extensions of Credit and the Notes
held by it); provided that:

                     

                    (i)           each
such participation shall be in an amount not less than $5,000,000;

                     

                    (ii)           such
Lender’s obligations under this Agreement (including, without limitation, its
Revolving Credit Commitment) shall remain unchanged;

                     

                    (iii)           such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations;

                     

                    (iv)           the
Credit Parties, the Administrative Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement;

                     

                    (v)           such
Lender shall not permit such participant the right to approve any waivers,
amendments or other modifications to this Agreement or any other Loan Document
other than waivers, amendments or modifications which would reduce the principal
of or the interest rate on any Revolving Credit Loan or Reimbursement
Obligation, extend the term or increase the amount of the Revolving Credit
Commitment, reduce the amount of any fees to which such participant is entitled,
extend any scheduled payment date for principal, interest or fees of any
Revolving Credit Loan or participation, or release all or substantially all of
the Collateral, except as expressly contemplated hereby or thereby;
and

                     

                    (vi)           any
such disposition shall not, without the consent of the Borrower, on behalf of
itself and the other Credit Parties, require the Borrower or any other Credit
Party, to file a registration statement with the Securities and Exchange
Commission or apply to or qualify the Revolving Credit Loans or the Revolving
Credit Notes under the blue sky law of any state.

                     

                    (g)           Disclosure of Information;
Confidentiality.  Each of the Administrative Agent, the Issuing
Lenders and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors and representatives (collectively,
“Representatives”) (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by Applicable Laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the prior written consent
of the Credit Parties, (h) to the extent such Information (A) becomes publicly
available other than as a result of a breach of this Section or (B) becomes
available to the Administrative Agent, the Issuing Lenders or any Lender on a
nonconfidential basis from a source other than the Credit Parties or (i) to Gold
Sheets and other similar bank trade publications, such information to consist of
deal terms and other information (customarily found in such publications) upon
the Credit Parties’ prior review and approval, which shall not be unreasonably
withheld or delayed.  For the purposes of this Section, “Information” means
all information received from the Credit Parties or any of their Subsidiaries
relating to the Credit Parties or their business, other than any such
information that is available to the Administrative Agent, any Issuing Lender or
any Lender on a nonconfidential basis prior to disclosure by the Credit Parties;
provided that, in the case of information received from the Credit Parties after
the Closing Date (other than certificates or other information specifically
required by the terms of this Agreement), such information is clearly identified
at the time of delivery as confidential.  Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential
information.

                     

                    
                      
                        
                        

                      

                      
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                    (h)           Special Purpose Funding
Vehicles.  Notwithstanding anything to the contrary contained
herein, any Lender (a “Granting Lender”) may
grant to a special purpose funding vehicle organized for the specific purpose of
making or acquiring participations or investing in loans of the type made
pursuant to this Agreement (a “SPC”), correctly
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Extension of Credit that such Lender would otherwise be
obligated to make to the Borrower pursuant to this Agreement; provided that (i)
nothing herein shall constitute a commitment by any SPC to make any Extension of
Credit and (ii) if an SPC elects not to exercise such option or otherwise fails
to provide all or any part of such Extension of Credit, the Granting Lender
shall be obligated to make such Extension of Credit pursuant to the terms
hereof.  The making of an Extension of Credit by an SPC hereunder
shall utilize the Revolving Credit Commitment of the Granting Lender to the same
extent, and as if, such Extension of Credit were made by such Granting
Lender.  Each party hereto hereby agrees that no SPC shall be liable
for any indemnity or similar payment obligation under this Agreement (all
liability for which shall remain with the Granting Lender).  In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against, or
join any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof.  In addition,
notwithstanding anything to the contrary contained in this clause, any SPC may
(i) with notice to, but without the prior written consent of, the Borrower and
the Administrative Agent and without paying any processing fee therefor, assign
all or a portion of its interest in any Extension of Credit to the Granting
Lender or to any financial institution (consented to by the Borrower and
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Extensions of
Credit and (ii) disclose on a confidential basis any non-public information
relating to Extensions of Credit to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC.  This clause may not be amended without the written consent of
each SPC.

                     

                    
                      
                        
                        

                      

                      
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                    (i)           Certain Pledges or
Assignments.  Nothing herein shall prohibit any Lender from
pledging or assigning any Note to any Federal Reserve Bank in accordance with
Applicable Law.

                     

                    SECTION
14.11.  Amendments, Waivers and
Consents.  Except as set forth below, any term, covenant,
agreement or condition of this Agreement or any of the other Loan Documents may
be amended or waived by the Lenders, and any consent given by the Lenders, if,
but only if, such amendment, waiver or consent is in writing signed by the
Required Lenders (or by the Administrative Agent with the consent of the
Required Lenders) and delivered to the Administrative Agent and, in the case of
an amendment, signed by the Credit Parties; provided, in each case,
that:

                     

                    (a)                 no
amendment, waiver or consent shall (i) release any of the Credit Parties, (ii)
increase the amount or extend the time of the obligation of the Lenders to make
Revolving Credit Loans or issue or participate in Letters of Credit, (iii)
extend the originally scheduled time or times of payment of the principal of any
Revolving Credit Loan or Reimbursement Obligation or the time or times of
payment of interest or fees on any Revolving Credit Loan or Reimbursement
Obligation, (iv) reduce the rate of interest or fees payable on any Revolving
Credit Loan or Reimbursement Obligation, (v) reduce the principal amount of any
Revolving Credit Loan or Reimbursement Obligation, (vi) permit any subordination
of the principal or interest on any Revolving Credit Loan or Reimbursement
Obligation, (vii) permit any assignment (other than as specifically permitted or
contemplated in this Agreement) of any of the Credit Parties’ rights and
obligations hereunder, (viii) release or subordination of the Lien position of
all or substantially all of the Collateral in any transaction or series of
related transactions or (ix) amend the provisions of this Section 14.11 or the
definition of Required Lenders, without the prior written consent of each Lender
affected thereby; and

                     

                    (b)                 no
amendment, waiver or consent to the provisions of (i) Article XIII shall be made
without the written consent of the Administrative Agent and (ii) Article III
without the written consent of each Issuing Lender affected
thereby.

                     

                    SECTION
14.12.  Performance of
Duties.  The Credit Parties’ obligations under this Agreement
and each of the Loan Documents shall be performed by the Credit Parties at their
sole cost and expense.

                     

                    SECTION
14.13.  All
Powers Coupled with Interest.  All powers of attorney and other
authorizations granted to the Lenders, the Administrative Agent and any Persons
designated by the Administrative Agent or any Lender pursuant to any provisions
of this Agreement or any of the other Loan Documents shall be deemed coupled
with an interest and shall be irrevocable so long as any of the Obligations
remain unpaid or unsatisfied or the Credit Facility has not been
terminated.

                     

                    SECTION
14.14.  Survival of
Indemnities.  Notwithstanding any termination of this
Agreement, the indemnities to which the Administrative Agent and the Lenders are
entitled under the provisions of this Article XIV and any other provision of
this Agreement and the Loan Documents shall continue in full force and effect
and shall protect the Administrative Agent and the Lenders against events
arising after such termination as well as before.

                     

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
14.15.  Titles and
Captions.  Titles and captions of Articles, Sections and
subsections in this Agreement are for convenience only, and neither limit nor
amplify the provisions of this Agreement.

                     

                    SECTION
14.16.  Severability of
Provisions.  Any provision of this Agreement or any other Loan
Document which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of such provision or the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

                     

                    SECTION
14.17.  Counterparts.  This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and shall be binding upon all parties, their successors and
assigns, and all of which taken together shall constitute one and the same
agreement.  Delivery of any executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.

                     

                    SECTION
14.18.  Term
of Agreement.  This Agreement shall remain in effect from the
Closing Date through and including the date upon which all Obligations (other
than obligations owing by any Credit Party to any Lender or Affiliate of a
Lender or the Administrative Agent under any Hedging Agreement) shall have been
indefeasibly and irrevocably paid and satisfied in full.  No
termination of this Agreement shall affect the rights and obligations of the
parties hereto arising prior to such termination.

                     

                    SECTION
14.19.  Inconsistencies with Other
Documents; Independent Effect of Covenants.  (a)  In
the event there is a conflict or inconsistency between this Agreement and any
other Loan Document, the terms of this Agreement shall control.

                     

                    (b)           The
Borrower expressly acknowledges and agrees that each covenant contained in
Article IX, X, or XI hereof shall be given independent effect.

                     

                     

                    
                      
                        
                        

                      

                      
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                    SECTION
14.20.  Patriot
Act.  Each Lender hereby notifies the Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), it is required to obtain, verify and
record information that identifies each borrower, guarantor or grantor (the
“Loan Parties”), which information includes the name and address of each Loan
Party and other information that will allow such Lender to identify such Loan
Party in accordance with the Act.

                     

                    SECTION
14.21.  Ratings of
Loans.  Each Lender hereby agrees that nothing in this
agreement shall require or imply that the Loans shall be required to be rated by
any nationally recognized securities rating organization.

                     

                    SECTION
14.22.  Release of
Collateral.  Upon the sale, lease, transfer or other
disposition of any item of Collateral of any Collateral Grantor (including,
without limitation, as a result of the sale, in accordance with the terms of the
Loan Documents, of the Subsidiary that owns such Collateral) in accordance with
the terms of the Loan Documents, the Administrative Agent will, at the
Borrower’s expense, execute and deliver to such Collateral Grantor such
documents in form and substance reasonably satisfactory to the Administrative
Agent as may be reasonably requested to evidence the release of such item of
Collateral from the assignment and security interest granted under the
Collateral Documents in accordance with the terms of the Loan
Documents.

                     

                    [Signature
pages to follow]

                     

                     

                     

                    
                      
                        
                        

                      

                      
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                    IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed under seal by their authorized
officers, all as of the day and year first written above.

                     

                    [THE
REQUISITE SIGNATURES ARE APPENDED TO AMENDMENT NO. 3 REFERRED TO IN THE
PRELIMINARY STATEMENTS]

                     

                     

                     

                     

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