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Three Year Credit Agreement

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Title:

Three Year Credit Agreement

Entities:

Bank One, NA; Barclays Bank plc; Citibank, NA; Citigroup Global Markets Inc.; Fleet National Bank; J.P. Morgan Securities Inc.; Jones Apparel Group, Inc.; JPMorgan Chase Bank; Wachovia Bank, NA; Bank of America, NA; Bank of New York; Cravath, Swaine & Moore LLP; Schnader Harrison Segal & Lewis, LLP

Date:

2003

Size:

Preview shows 26KB of 245KB total

Price:

$70

ID:

#153303

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THREE YEAR CREDIT AGREEMENT

dated as of June 10, 2003,

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 and CITIBANK, N.A.,
as Syndication Agents,
and

FLEET NATIONAL BANK and BANK OF AMERICA, N.A.,
as Documentation Agents

TABLE OF CONTENTS

		Page
ARTICLE I DEFINITIONS		1
	SECTION 1.1. Definitions	1
	SECTION 1.2. General	14
	SECTION 1.3. Other Definitions and Provisions	14
ARTICLE II REVOLVING CREDIT FACILITY		15
	SECTION 2.1. Revolving Credit Loans	15
	SECTION 2.2. Procedure for Advances of Revolving Credit Loans	15
	SECTION 2.3. Repayment of Revolving Credit Loans	16
	SECTION 2.4. Evidence of Debt	16
	SECTION 2.5. Permanent Reduction of the Revolving Credit Commitment	17
	SECTION 2.6. Termination of Revolving Credit Facility	17
ARTICLE III LETTER OF CREDIT FACILITY		17
	SECTION 3.1. L/C Commitment	17
	SECTION 3.2. Procedure for Issuance of Letters of Credit	18
	SECTION 3.3. Fees and Other Charges	18
	SECTION 3.4. L/C Participations	19
	SECTION 3.5. Reimbursement	20
	SECTION 3.6. Obligations Absolute	20
	SECTION 3.7 Effect of Application	21
ARTICLE IV [RESERVED]		21
ARTICLE V GENERAL LOAN PROVISIONS		21
	SECTION 5.1. Interest	21
	SECTION 5.2. Notice and Manner of Conversion or Continuation of Revolving Credit Loans	23

	SECTION 5.3. Fees	23
	SECTION 5.4. Manner of Payment	24
	SECTION 5.5. Crediting of Payments and Proceeds	24
	SECTION 5.6. Adjustments	24
	SECTION 5.7. Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption by the Administrative Agent	25
	SECTION 5.8. Joint and Several Liability of the Credit Parties	25
	SECTION 5.9. Changed Circumstances	27
	SECTION 5.10. Indemnity	29
	SECTION 5.11. Capital Requirements	30
	SECTION 5.12. Taxes	30
ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING		32
	SECTION 6.1. Closing	32
	SECTION 6.2. Conditions to Closing and Initial Revolving Credit Loans and Letters of Credit	32
	SECTION 6.3. Conditions to All Extensions of Credit	34
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES		35
	SECTION 7.1. Representations and Warranties	35
	SECTION 7.2. Survival of Representations and Warranties, Etc.	40
ARTICLE VIII FINANCIAL INFORMATION AND NOTICES		40
	SECTION 8.1. Financial Statements and Projections	40
	SECTION 8.2. Officer's Compliance Certificate	41
	SECTION 8.3. Accountants' Certificate	41
	SECTION 8.4. Other Reports	41
	SECTION 8.5. Notice of Litigation and Other Matters	41
	SECTION 8.6. Accuracy of Information	42
ARTICLE IX AFFIRMATIVE COVENANTS		42

	SECTION 9.1. Preservation of Corporate Existence and Related Matters	42
	SECTION 9.2. Maintenance of Property	42
	SECTION 9.3. Insurance	42
	SECTION 9.4. Accounting Methods and Financial Records	43
	SECTION 9.5. Payment and Performance of Obligations	43
	SECTION 9.6. Compliance With Laws and Approvals	43
	SECTION 9.7. Environmental Laws	43
	SECTION 9.8. Compliance with ERISA	44
	SECTION 9.9. Conduct of Business	44
	SECTION 9.10. Visits and Inspections	44
	SECTION 9.11. Use of Proceeds	44
ARTICLE X FINANCIAL COVENANTS		44
	SECTION 10.01. Interest Coverage Ratio	44
	SECTION 10.02. Minimum Net Worth	44
ARTICLE XI NEGATIVE COVENANTS		44
	SECTION 11.1. Limitations on Debt and Guaranty Obligations	45
	SECTION 11.2. [Reserved].	46
	SECTION 11.3. Limitations on Liens	46
	SECTION 11.4. Limitations on Loans, Advances, Investments and Acquisitions.	48
	SECTION 11.5. Limitations on Mergers and Liquidation	49
	SECTION 11.6. Limitations on Sale or Transfer of Assets.	49
	SECTION 11.7. Limitations on Dividends and Distributions	51
	SECTION 11.8. Transactions with Affiliates	51
	SECTION 11.9. Changes in Fiscal Year End	51
	SECTION 11.10. Amendments; Payments and Prepayments of Material Debt and Subordinated Debt	51
ARTICLE XII DEFAULT AND REMEDIES		51

iii

	SECTION 12.1. Events of Default	51
	SECTION 12.2. Remedies	53
	SECTION 12.3. Rights and Remedies Cumulative; Non-Waiver; Etc.	54
ARTICLE XIII THE ADMINISTRATIVE AGENT		54
	SECTION 13.1. Appointment	54
	SECTION 13.2. Delegation of Duties	55
	SECTION 13.3. Exculpatory Provisions	55
	SECTION 13.4. Reliance by the Administrative Agent	55
	SECTION 13.5. Notice of Default	56
	SECTION 13.6. Non-Reliance on the Administrative Agent and Other Lenders	56
	SECTION 13.7. Indemnification	56
	SECTION 13.8. The Administrative Agent in Its Individual Capacity	57
	SECTION 13.9. Resignation of the Administrative Agent; Successor Administrative Agent	57
	SECTION 13.10. Syndication and Documentation Agents	57
ARTICLE XIV MISCELLANEOUS		57
	SECTION 14.1. Notices	58

	SECTION 14.2. Expenses; Indemnity	59
	SECTION 14.3. Set-off	59
	SECTION 14.4. Governing Law	59
	SECTION 14.5. Consent to Jurisdiction	59
	SECTION 14.6. Waiver of Jury Trial	60
	SECTION 14.7. Reversal of Payments	60
	SECTION 14.8. Injunctive Relief; Punitive Damages	60
	SECTION 14.9. Accounting Matters	60
	SECTION 14.10. Successors and Assigns; Participations	61
	SECTION 14.11. Amendments, Waivers and Consents	65
	SECTION 14.12. Performance of Duties	66
	SECTION 14.13. All Powers Coupled with Interest	66
	SECTION 14.14. Survival of Indemnities	66
	SECTION 14.15. Titles and Captions	66
	SECTION 14.16. Severability of Provisions	66
	SECTION 14.17. Counterparts	66
	SECTION 14.18. Term of Agreement	66
	SECTION 14.19. Inconsistencies with Other Documents; Independent Effect of Covenants	66

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
Schedule 1.1(b)	-	Outstanding Letters of Credit
Schedule 7.1(b)	-	Subsidiaries and Capitalization
Schedule 7.1(g)	-	Disclosed Litigation
Schedule 7.1(n)	-	Material Adverse Change
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

THREE YEAR CREDIT AGREEMENT

Dated as of June 10, 2003

JONES APPAREL GROUP USA, INC., a Pennsylvania corporation, the Additional Obligors (as defined below), the Lenders who are or may become a party to this Agreement, 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 and CITIBANK, N.A., as Syndication Agents, and FLEET NATIONAL BANK and BANK OF AMERICA, N.A., as Documentation Agents, agree 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" shall have the meaning set forth in Section 11.1(f).

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

    "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 Three Year Credit Agreement, as amended, restated, supplemented or otherwise modified.

    "Alternative Currency" means (i) Pounds Sterling, (ii) the euro or (iii) any other lawful currency (other than Dollars) acceptable to the Issuing Lenders which, in the case of this clause (iii), 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.

    "Applicable Law" means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and

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