-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pd/7DDedTnUcXtPDGdZB/JSQcbuFvioVZeSDxSAYj/mSEMrpZT2QbAWbQGzEQwV/ S9q8QgoC9bl5R/sL43YcIg== 0000950157-01-000275.txt : 20010411 0000950157-01-000275.hdr.sgml : 20010411 ACCESSION NUMBER: 0000950157-01-000275 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 8 FILED AS OF DATE: 20010410 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JONES APPAREL GROUP INC CENTRAL INDEX KEY: 0000874016 STANDARD INDUSTRIAL CLASSIFICATION: WOMEN'S, MISSES', AND JUNIORS OUTERWEAR [2330] IRS NUMBER: 060935166 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-58610 FILM NUMBER: 1599388 BUSINESS ADDRESS: STREET 1: 250 RITTENHOUSE CIRCLE STREET 2: KEYSTONE PK CITY: BRISTOL STATE: PA ZIP: 19007 BUSINESS PHONE: 2157854000 MAIL ADDRESS: STREET 1: 250 RITTENHOUSE CIRCLE CITY: BRISTOL STATE: PA ZIP: 19007 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NINE WEST GROUP INC /DE CENTRAL INDEX KEY: 0000887124 STANDARD INDUSTRIAL CLASSIFICATION: FOOTWEAR, (NO RUBBER) [3140] IRS NUMBER: 061093855 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-58610-01 FILM NUMBER: 1599389 BUSINESS ADDRESS: STREET 1: NINE WEST PLAZA STREET 2: 1129 WESTCHESTER AVE CITY: WHITE PLAINS STATE: NY ZIP: 10604 BUSINESS PHONE: 9146406400 MAIL ADDRESS: STREET 1: C/O JONES APPAREL GROUP INC STREET 2: 180 RITTENHOUSE CIRCLE CITY: BRISTOL STATE: PA ZIP: 19007 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JONES APPAREL GROUP HOLDINGS INC CENTRAL INDEX KEY: 0001131759 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 510390339 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-58610-02 FILM NUMBER: 1599390 BUSINESS ADDRESS: STREET 1: WEST 9TH ST. PLZ STREET 2: SUITE 200 CITY: WILMINGTON STATE: DE ZIP: 19801 BUSINESS PHONE: 3027774869 MAIL ADDRESS: STREET 1: WEST 9TH ST. PLZ STREET 2: SUITE 200 CITY: WILMINGTON STATE: DE ZIP: 19801 FILER: COMPANY DATA: COMPANY CONFORMED NAME: JONES APPAREL GROUP USA INC CENTRAL INDEX KEY: 0001131760 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 134060243 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-58610-03 FILM NUMBER: 1599391 BUSINESS ADDRESS: STREET 1: C/O JONES APPAREL GROUP INC STREET 2: 250 RITTENHOUSE CIRCLE CITY: BRISTOL STATE: PA ZIP: 19007 BUSINESS PHONE: 2124741000 MAIL ADDRESS: STREET 1: C/O JONES APPAREL GROUP INC STREET 2: 180 RITTENHOUSE CIRCLE CITY: BRISTOL STATE: PA ZIP: 19007 S-3 1 0001.txt REGISTRATION STATEMENT As filed with the Securities and Exchange Commission on April 10, 2001 Registration Statement No. 333- - ------------------------------------------------------------------------------ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------------- JONES APPAREL GROUP, INC. (Exact name of Registrant as specified in its charter) JONES APPAREL GROUP HOLDINGS, INC. (Exact name of Registrant as specified in its charter) JONES APPAREL GROUP USA, INC. (Exact name of Registrant as specified in its charter) NINE WEST GROUP INC. (Exact name of Registrant as specified in its charter) -------------------------- Pennsylvania 06-0935166 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) Delaware 51-0390339 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) Pennsylvania 23-2978516 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) Delaware 13-4060243 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) -------------------------- 250 Rittenhouse Circle Bristol, Pennsylvania 19007 (215) 785-4000 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices) -------------------------- Ira M. Dansky, Esq. Jones Apparel Group, Inc. 1411 Broadway New York, New York 10018 (212) 536-9526 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------------------- With a copy to: William V. Fogg, Esq. Cravath, Swaine & Moore 825 Eighth Avenue New York, New York 10019 (212) 474-1000 -------------------------- Approximate date of commencement of proposed sale to public: From time to time after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 (the "Securities Act"), other than securities offered only in connection with dividend or interest reinvestment plans, please check the following box: [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: [ ] ____________ If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act, please check the following box. [X] -------------------------- CALCULATION OF REGISTRATION FEE
Proposed Maximum Title of Each Class of Securities Amount to be Proposed Maximum Aggregate Aggregate Offering Price Amount of to be Registered Registered(1)(2) Price Per Unit (1)(2) (1)(3) Registration Fee(4) - --------------------------------------------------------------------------------------------------------------------------------- Debt Securities.................... Preferred Stock (5)................ Common Stock, par value $.01 per share, of Jones Apparel Group, Inc.(6)..................... Warrants (7)....................... Total.............................. $450,000,000.00 $112,500.00 - ---------------------------------------------------------------------------------------------------------------------------------
(1) There are being registered under this Registration Statement such indeterminate number of shares of common stock and preferred stock of the Registrants, such indeterminate number of warrants of the Registrants, and such indeterminate principal amount of debt securities of the Registrants, as shall have an aggregate initial offering price not to exceed $450,000,000. If any debt securities are issued at an original issue discount, then the securities registered shall include such additional debt securities as may be necessary such that the aggregate initial public offering price of all securities issued pursuant to this Registration Statement will equal $450,000,000. Any securities registered under this Registration Statement may be sold separately or as units with other securities registered under this Registration Statement. The proposed maximum initial offering prices per unit will be determined, from time to time, by the Registrants in connection with the issuance by the Registrants of the securities registered under this Registration Statement. (2) Not specified with respect to each class of securities to be registered pursuant to General Instruction II.D. of Form S-3 under the Securities Act. (3) Estimated solely for the purpose of calculating the registration fee. Any offering of debt securities denominated in any foreign currency or currency unit will be treated as the equivalent in U.S. dollars based on the exchange rate applicable to the purchase of such debt securities from the Registrant. No separate consideration will be received for common stock, preferred stock, Warrants or debt securities that are issued upon conversion or exchange of debt securities or preferred stock registered hereunder. (4) Calculated pursuant to Rule 457 of the rules and regulations under the Securities Act. (5) Including such indeterminate number of shares of preferred stock as may from time to time be issued (i) at indeterminate prices or (ii) upon conversion or exchange of debt securities registered hereunder, to the extent any such debt securities are, by their terms, convertible into preferred stock. (6) Including such indeterminate number of shares of common stock as may from time to time be issued (i) at indeterminate prices or (ii) upon conversion or exchange of debt securities or preferred stock registered hereunder, to the extent any of such debt securities or shares of preferred stock are, by their terms, convertible into common stock. (7) Including such indeterminate number of warrants as may from time to time to be issued at indeterminate prices, representing rights to purchase certain of the common stock, preferred stock or debt securities registered hereunder. -------------------------- The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. PROSPECTUS Jones Apparel Group, Inc. Jones Apparel Group Holdings, Inc. Jones Apparel Group USA, Inc. Nine West Group Inc. In this prospectus, the terms "we," "us," and "our" refer collectively to Jones Apparel Group, Inc. and its subsidiaries Jones Apparel Group Holdings, Inc., Jones Apparel Group USA, Inc. and Nine West Group Inc. From time to time, we, as co-obligors, may sell any of the following securities: - DEBT SECURITIES - WARRANTS (DEBT) From time to time, Jones Apparel Group, Inc. may also sell any of the following securities: - PREFERRED STOCK - COMMON STOCK - WARRANTS (STOCK) We will provide the specific terms of these securities in one or more supplements to this prospectus. You should read this prospectus and any prospectus supplement carefully before you invest. The aggregate of the offering prices of securities covered by this prospectus will not exceed $450,000,000. Jones Apparel Group common stock is listed on the New York Stock Exchange under the symbol "JNY." The applicable prospectus supplement will contain information, where applicable, as to any other listing (if any) on the New York Stock Exchange or any securities exchange of the securities covered by the prospectus supplement. The securities may be sold to investors, through agents designated from time to time or to or through underwriters or dealers. See "Plan of Distribution." If any underwriters are involved in the sale of any securities in respect of which this prospectus is being delivered, the names of such underwriters and any applicable commissions or discounts will be set forth in a prospectus supplement. The net proceeds we expect to receive from such sale also will be set forth in a prospectus supplement. Investing in the securities involves certain risks. See "Risk Factors" beginning on page 5. This prospectus may not be used to offer or sell any securities unless accompanied by a prospectus supplement. Neither the Securities and Exchange Commission (the "SEC") nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is April 10, 2001. TABLE OF CONTENTS Page About this Prospectus.................................................3 Where You Can Find More Information...................................3 Special Note Regarding Forward-Looking Statements.....................4 The Company...........................................................5 Risk Factors..........................................................5 Use of Proceeds.......................................................8 Ratio of Earnings to Fixed Charges....................................8 Description of Debt Securities........................................8 Description of Capital Stock..........................................20 Description of Warrants...............................................21 Plan of Distribution..................................................22 Validity of Securities................................................23 Experts...............................................................23 As used in this prospectus, unless the context requires otherwise: o "We," "us" and "our" refer collectively to Jones Apparel Group, Inc., Jones Apparel Group Holdings, Inc., Jones Apparel Group USA, Inc., and Nine West Group Inc.; o "Jones" or the "Company" means Jones Apparel Group, Inc. and/or its predecessors and consolidated subsidiaries, including the other issuers, as the context may require; o "Jones Apparel Group" means Jones Apparel Group, Inc.; o "Jones Holdings" means Jones Apparel Group Holdings, Inc.; o "Jones USA" means Jones Apparel Group USA, Inc.; and o "Nine West" means Nine West Group Inc. -2- ABOUT THIS PROSPECTUS This prospectus is part of a registration statement that we filed with the SEC utilizing a "shelf" registration process. Under this shelf process, we may sell any combination of the securities described in this prospectus in one or more offerings up to an aggregate offering price of $450,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described immediately below under the heading "Where You Can Find More Information." WHERE YOU CAN FIND MORE INFORMATION Jones files annual, quarterly and special reports, proxy statements and other information with the SEC. Jones' SEC filings are available to the public over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document Jones files at the SEC's public reference facilities in Washington, D.C., New York, New York and Chicago, Illinois at the following addresses: o 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549; o Seven World Trade Center, Suite 1300, New York, New York 10048; and o Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0330 for further information on the public reference facilities. Reports, proxy statements and other information concerning us can also be inspected and copied at the offices of the New York Stock Exchange at 20 Broad Street, New York, New York 10005. We have elected to incorporate by reference into this prospectus the following documents (including the documents incorporated by reference therein) filed by Jones with the SEC: o Annual Report on Form 10-K for the fiscal year ended December 31, 2000, filed with the SEC on March 26, 2001. Any statement made in a document incorporated by reference or deemed incorporated herein by reference is deemed to be modified or superseded for purposes of this prospectus if a statement contained in this prospectus or in any other subsequently filed document which also is incorporated or deemed incorporated by reference herein modifies or supersedes that statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. We also incorporate by reference all documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") after the date of this prospectus and prior to the termination of this offering. You may request a copy of these filings, in most cases without exhibits, at no cost by writing or telephoning us at the following address: Chief Financial Officer Jones Apparel Group, Inc. 250 Rittenhouse Circle Bristol, Pennsylvania 19007 (215) 785-4000 -3- SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This prospectus and the documents incorporated by reference contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive position, growth opportunities for existing products, plans and objectives of management, markets for Jones Apparel Group common stock and other matters. Statements in this prospectus, including those incorporated by reference, that are not historical facts are "forward-looking statements" for the purpose of the safe harbor provided by Section 21E of the Exchange Act and Section 27A of the Securities Act. Forward-looking statements, including, without limitation, those relating to our future business prospects, revenues and income, wherever they occur in this prospectus, are necessarily estimates reflecting the best judgment of our senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by forward-looking statements. You should consider forward-looking statements, therefore, in light of various important factors, including those set forth in this prospectus. Important factors that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, without limitation: o the effect of national and regional economic conditions; o lowered levels of consumer spending resulting from a general economic downturn; o the performance of our products within the prevailing retail environment; o customer acceptance of both new designs and newly-introduced product lines; o financial difficulties encountered by customers; o the effects of vigorous competition in the markets in which we operate; o our ability to integrate the organizations and operations of any acquired business into our existing organization and operations; o the termination or non-renewal of the licenses with Polo Ralph Lauren Corporation; o risks relating to our extensive foreign operations and manufacturing; o changes in the costs of raw materials, labor and advertising; and o our ability to secure and protect trademarks and other intellectual property rights. Words such as "estimate," "project," "plan," "intend," "expect," "believe" and similar expressions are intended to identify forward-looking statements. You will find these forward-looking statements at various places throughout this prospectus and the documents incorporated by reference, including any amendments. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they were made. We do not undertake any obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus or to reflect the occurrence of unanticipated events. -4- THE COMPANY Jones is a leading designer and marketer of a broad range of women's collection sportswear, suits and dresses, casual sportswear and jeanswear for men, women and children, women's shoes and accessories, and costume jewelry. Jones has pursued a multi-brand strategy by marketing its products under several nationally known brands, including Jones New York, Evan-Picone, Rena Rowan, Nine West, Easy Spirit, Enzo Angiolini, Bandolino and Todd Oldham and the licensed brands Lauren by Ralph Lauren, Ralph by Ralph Lauren and Polo Jeans Company. Each brand is differentiated by its own distinctive styling and pricing strategy, and together they target a wide range of consumers. Jones primarily contracts for the manufacture of its products through a worldwide network of quality manufacturers. Jones has capitalized on its nationally known brand names by entering into various licenses for the Jones New York, Evan-Picone and Nine West brand names with select manufacturers of women's and men's products which Jones does not manufacture. On July 31, 2000, Jones acquired 100% of the capital stock of Victoria + Co Ltd. Victoria is a leading designer and marketer of branded and private label costume jewelry sold to better department and specialty stores. Victoria markets its products under the national brand names Napier and Richelieu and under several licensed brands, including Tommy Hilfiger and Givenchy, as well as private labels. In addition, Victoria markets jewelry under Jones' Nine West label. Our principal executive offices are located at 250 Rittenhouse Circle, Bristol, Pennsylvania 19007. Our telephone number is (215) 785-4000. RISK FACTORS You should consider carefully all the information included or incorporated by reference in this prospectus and, in particular, should evaluate the following risks before deciding to invest in the securities. The Apparel, Footwear and Accessories Industries are Highly Competitive Apparel, footwear and accessories companies face competition on many fronts, including the following: o establishing and maintaining favorable brand recognition; o developing products that appeal to consumers; o pricing products appropriately; o providing strong marketing support; and o obtaining access to retail outlets and sufficient floor space. There is intense competition in the sectors of the apparel, footwear and accessories industries in which we participate. We compete with many other manufacturers and retailers, some of which are larger and have greater resources than we do. Any increased competition could result in reduced sales or prices, or both, which could have a material adverse effect on us. Fashion Trends are Constantly Changing Customer tastes and fashion trends can change rapidly. We may not be able to anticipate, gauge or respond to such changes in a timely manner. If we misjudge the market for our products or product groups, we may be faced with a significant amount of unsold finished goods inventory, which would have a material adverse effect on us. The Apparel, Footwear and Accessories Industries are Highly Cyclical Negative economic trends over which we have no control that depress the level of consumer spending could have a material adverse effect on us. Purchases of apparel, footwear and related goods often decline during recessionary periods -5- when disposable income is low. In such an environment, we may increase the number of promotional sales, which would further adversely affect our profitability. The Concentration of Our Customers Could Adversely Affect Our Business Our ten largest customers, principally department stores, accounted for approximately 56% of sales in 2000. While no single customer accounted for more than 10% of our net sales, certain of our customers are under common ownership. Department stores owned by the following entities accounted for the following percentages of our 2000 sales: Federated Department Stores, Inc...................... 14% May Department Stores Company......................... 14% Remainder of ten largest customers.................... 28% We believe that purchasing decisions are generally made independently by individual department stores within a commonly controlled group. There has been a trend, however, toward more centralized purchasing decisions. As such decisions become more centralized, the risk to us of such concentration increases. The loss of any of our largest customers, or the bankruptcy or material financial difficulty of any customer or any of the companies listed above, could have a material adverse effect on us. We do not have long-term contracts with any of our customers, and sales to customers generally occur on an order-by-order basis. As a result, customers can terminate their relationships with us at any time or under certain circumstances cancel or delay orders. Significant Portions of Our Sales and Profits Depend on Certain of Our License Agreements with Polo Ralph Lauren Corporation The termination or non-renewal of our exclusive licenses to manufacture and market clothing under the Lauren by Ralph Lauren and Polo Jeans Company trademarks in the United States and elsewhere would have a material adverse effect on us. Our Lauren by Ralph Lauren and Polo Jeans Company businesses represent significant portions of our sales and profits. We sell products bearing those trademarks, as well as the Ralph by Ralph Lauren trademark, under exclusive licenses from affiliates of Polo Ralph Lauren Corporation. The Lauren by Ralph Lauren license expires on December 31, 2001. We have exercised our right to renew that license through December 31, 2006. There is no presently existing right or obligation to renew the Lauren by Ralph Lauren license after December 31, 2006. The Polo Jeans Company license expires on December 31, 2005 and may be renewed by us in five-year increments for up to 25 additional years, if certain minimum sales levels in certain years are met. Polo Jeans Company sales are made season-to-season, with customers having no obligation to buy products beyond what they have already ordered for a particular season. In addition, renewal of the Polo Jeans Company license after 2010 requires a one-time payment by us of $25 million or, at our option, a transfer of a 20% interest in our Polo Jeans Company business to Polo Ralph Lauren (with no fees required for subsequent renewals). Polo Ralph Lauren also has an option, exercisable on or before June 1, 2010, to purchase our Polo Jeans Company business at the end of 2010 for a purchase price, payable in cash, equal to 80% of the then fair value of the business as a going concern, assuming the continuation of the Polo Jeans Company license through December 31, 2030. In addition to the provisions described above, the licenses contain provisions common to trademark licenses which could result in termination of a license, such as failure to meet payment or advertising obligations. The Extent of Our Foreign Operations and Manufacturing May Adversely Affect Our Domestic Business In 2000, approximately 73% of our apparel products were manufactured outside North America, primarily in Asia, while the remainder were manufactured in the United States and Mexico. Nearly all of Nine West's products were manufactured outside of North America in 2000 as well. The following may adversely affect foreign operations: o political instability in countries where contractors and suppliers are located; -6- o imposition of regulations and quotas relating to imports; o imposition of duties, taxes and other charges on imports; o significant fluctuation of the value of the dollar against foreign currencies; and o restrictions on the transfer of funds to or from foreign countries. As a result of our substantial foreign operations, Jones' domestic business is subject to the following risks: o quotas imposed by bilateral textile agreements between the United States and certain foreign countries; o reduced manufacturing flexibility because of geographic distance between us and our foreign manufacturers, increasing the risk that we may have to mark down unsold inventory as a result of misjudging the market for a foreign-made product; and o violations by foreign contractors of labor and wage standards and resulting adverse publicity. Fluctuations in the Price, Availability and Quality of Raw Materials Could Cause Delay and Increase Costs Fluctuations in the price, availability and quality of the fabrics or other raw materials used by us in our manufactured apparel and in the price of leather used to manufacture our footwear and accessories could have a material adverse effect on our cost of sales or our ability to meet our customers' demands. We mainly use cotton twill, wool, denim, and synthetic and blended fabrics. The prices for such fabrics depend largely on the market prices for the raw materials used to produce them, particularly cotton. The price and availability of such raw materials and, in turn, the fabrics used in our apparel may fluctuate significantly, depending on many factors, including crop yields and weather patterns. We generally enter into denim purchase order contracts at specified prices for three to six months at a time. Higher cotton prices would directly affect our costs and could affect our earnings. During the past few years, there have been increases in the price of leather, which generally were reflected in the selling price of our footwear and accessories products. In the future, we may not be able to pass all or a portion of such higher raw materials prices on to our customers. Our Reliance on Independent Manufacturers Could Cause Delay and Damage Customer Relationships We rely upon independent third parties for the manufacture of most of our products. A manufacturer's failure to ship products to us in a timely manner or to meet the required quality standards could cause us to miss the delivery date requirements of our customers for those items. The failure to make timely deliveries may drive customers to cancel orders, refuse to accept deliveries or demand reduced prices, any of which could have a material adverse effect on our business. We do not have long-term written agreements with any of our third party manufacturers. As a result, any of these manufacturers may unilaterally terminate their relationships with us at any time. We Depend on Key Personnel to Manage Our Business Our success depends upon the personal efforts and abilities of our senior executive officers, including Sidney Kimmel (Chairman), Jackwyn Nemerov (President) and Irwin Samelman (Executive Vice President, Marketing), as well as the senior executive officers of our operating subsidiaries. If any of these individuals become unable or unwilling to continue in their present positions, our business and financial results could be materially adversely affected. Our Stock Price Has Been Volatile and We Expect That It Will Continue to be Volatile Our stock price has historically been volatile, and we expect that it will continue to be volatile. Our financial results are difficult to predict and could fluctuate significantly. -7- There Is No Public Market for the Debt Securities, Preferred Stock and Warrants Before the offering of any debt securities, preferred stock or warrants, there will have been no public market for those securities and we do not intend to apply for the listing of any debt securities or preferred stock that may be offered by this prospectus on any securities exchange or for quotation of any debt securities or preferred stock on any public market. We cannot assure you that an active public market for any debt securities, preferred stock or warrants will develop or as to the liquidity, if any, that may develop in such market. If an active public market in any new class of securities does not develop, the market price and liquidity of those securities may be adversely affected. See "Plan of Distribution." USE OF PROCEEDS We will use the net proceeds from our sale of the securities for our general corporate purposes, which may include repaying indebtedness, making additions to our working capital, funding future acquisitions or for any other purpose we describe in the applicable prospectus supplement. RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth our ratios of earnings to fixed charges for the years and periods indicated: Year Ended December 31, -------------------------------------------- 2000 1999 1998 1997 1996 ---- ---- ---- ---- ---- Ratio of Earnings to Fixed Charges........... 4.3 4.1 12.6 18.2 14.4 We computed these ratios by dividing fixed charges into the sum of earnings (after certain adjustments) and fixed charges. Earnings used in computing the ratio of earnings to fixed charges consist of income before income taxes and fixed charges excluding capitalized interest. Fixed charges consist of interest expensed and capitalized, amortization of debt expense and that portion of rental expense representative of interest. Because we do not have any preferred stock outstanding, our ratio of earnings to fixed charges and preferred stock dividends was the same as our ratio of earnings to fixed charges. DESCRIPTION OF DEBT SECURITIES The following description of the terms of the debt securities sets forth certain general terms and provisions of the debt securities to which any prospectus supplement may relate. The particular terms of the debt securities offered by any prospectus supplement and the extent, if any, to which these general provisions may apply to those debt securities will be described in the prospectus supplement relating to those debt securities. Accordingly, for a description of the terms of a particular issue of debt securities, reference must be made to both the prospectus supplement relating thereto and to the following description. The debt securities will be issued by Jones Apparel Group, Jones Holdings, Jones USA and Nine West, as co-obligors (the "issuers"). The debt securities will be our general obligations. In the event that any series of debt securities will be subordinated to other securities that we have outstanding or may incur, the terms of the subordination will be set forth in the prospectus supplement relating to the subordinated debt securities. Debt securities will be issued under one or more indentures between us and one or more trustees named in the prospectus supplement (collectively, the "trustee"). A copy of the form of indenture has been filed as an exhibit to the registration statement filed with the SEC. The following discussion of certain provisions of the indenture is a summary only and should not be considered a complete description of the terms and provisions of the indenture. Accordingly, the following discussion is qualified in its entirety by reference to the provisions of the indenture, including the definition of certain terms used below. -8- General The indenture does not limit the aggregate principal amount of debt securities that can be issued under it. The debt securities may be issued in one or more series as we may authorize from time to time. You should refer to the applicable prospectus supplement for the following terms of the debt securities of the series with respect to which that prospectus supplement is being delivered: (1) the title of the debt securities of the series; (2) the price or prices of the debt securities of the series; (3) any limit on the aggregate principal amount of the debt securities of the series that may be authenticated and delivered under the indenture; (4) the date or dates on which the principal and premium with respect to the debt securities of the series are payable; (5) the rate or rates (which may be fixed or variable) at which the debt securities of the series shall bear interest (if any) or the method of determining such rate or rates, the date or dates from which such interest, if any, shall accrue, the interest payment dates on which such interest, if any, shall be payable or the method by which such dates will be determined, the record dates for the determination of holders thereof to whom such interest is payable (in the case of Securities in registered form), and the basis upon which interest will be calculated if other than that of a 360-day year of twelve 30-day months; (6) the currency or currencies in which debt securities of the series shall be denominated, if other than U.S. dollars, the place or places, if any, in addition to or instead of the corporate trust office of the trustee (in the case of Securities in registered form) or the principal New York office of the trustee (in the case of Securities in bearer form), where the principal, premium and interest with respect to debt securities of the series shall be payable or the method of such payment, if by wire transfer, mail or other means; (7) the price or prices at which, the period or periods within which, and the terms and conditions upon which debt securities of the series may be redeemed, in whole or in part at our option or otherwise; (8) whether debt securities of the series are to be issued as Securities in registered form or Securities in bearer form or both and, if Securities in bearer form are to be issued, whether coupons will be attached to them, whether Securities in bearer form of the series may be exchanged for Securities in registered form of the series, and the circumstances under which and the places at which any such exchanges, if permitted, may be made; (9) if any debt securities of the series are to be issued as Securities in bearer form or as one or more global securities representing individual Securities in bearer form of the series, whether certain provisions for the payment of additional interest or tax redemptions shall apply; whether interest with respect to any portion of a temporary Bearer Security of the series payable with respect to any interest payment date prior to the exchange of such temporary Bearer Security for definitive Securities in bearer form of the series shall be paid to any clearing organization with respect to the portion of such temporary Bearer Security held for its account and, in such event, the terms and conditions (including any certification requirements) upon which any such interest payment received by a clearing organization will be credited to the persons entitled to interest payable on such interest payment date; and the terms upon which a temporary Bearer Security may be exchanged for one or more definitive Securities in bearer form of the series; (10) our obligation, if any, to redeem, purchase, or repay debt securities of the series pursuant to any sinking fund or analogous provisions or at the option of a holder of such debt securities and the price or prices at which, the period or periods within which, and the terms and conditions upon which, debt securities of the series shall be redeemed, purchased, or repaid, in whole or in part, pursuant to such obligations; -9- (11) the terms, if any, upon which the debt securities of the series may be convertible into or exchanged for any issuer's common stock, preferred stock, other debt securities or warrants for common stock, preferred stock, indebtedness or other securities of any kind and the terms and conditions upon which such conversion or exchange shall be effected, including the initial conversion or exchange price or rate, the conversion or exchange period and any other additional provisions; (12) if other than denominations of $1,000 or any integral multiple thereof, the denominations in which debt securities of the series shall be issuable; (13) if the amount of principal, premium or interest with respect to the debt securities of the series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts will be determined; (14) if the principal amount payable at the stated maturity of debt securities of the series will not be determinable as of any one or more dates prior to such stated maturity, the amount that will be deemed to be such principal amount as of any such date for any purpose, including the principal amount thereof which will be due and payable upon any maturity other than the stated maturity or which will be deemed to be outstanding as of any such date (or, in any such case, the manner in which such deemed principal amount is to be determined), and if necessary, the manner of determining the equivalent thereof in United States currency; (15) any changes or additions to the provisions of the indenture dealing with defeasance; (16) if other than the principal amount thereof, the portion of the principal amount of debt securities of the series that shall be payable upon declaration of acceleration of the maturity thereof or provable in bankruptcy; (17) the terms, if any, of the transfer, mortgage, pledge or assignment as security for the debt securities of the series of any properties, assets, moneys, proceeds, securities or other collateral, including whether certain provisions of the Trust Indenture Act of 1939, as amended, are applicable and any corresponding changes to provisions of the indenture as then in effect; (18) any addition to or change in the events of default with respect to the debt securities of the series and any change in the right of the trustee or the holders to declare the principal, premium and interest, if any, with respect to such debt securities due and payable; (19) if the debt securities of the series shall be issued in whole or in part in the form of a global security, the terms and conditions, if any, upon which such global security may be exchanged in whole or in part for other individual debt securities in definitive registered form, the depositary (as defined in the applicable prospectus supplement) for such global security and the form of any legend or legends to be borne by any such global security in addition to or in lieu of the legend referred to in the indenture; (20) any trustee, authenticating or paying agent, transfer agent or registrar; (21) the applicability of, and any addition to or change in, the covenants and definitions then set forth in the indenture or in the terms then set forth in the indenture relating to permitted consolidations, mergers, or sales of assets; (22) the terms, if any, of any guarantee of the payment of principal, premium and interest with respect to debt securities of the series and any corresponding changes to the provisions of the indenture as then in effect; (23) the subordination, if any, of the debt securities of the series pursuant to the indenture and any changes or additions to the provisions of the indenture relating to subordination; (24) with regard to debt securities of the series that do not bear interest, the dates for certain required reports to the trustee; and -10- (25) any other terms of the debt securities of the series (which terms shall not be prohibited by the provisions of the indenture). The prospectus supplement will also describe any material United States federal income tax consequences or other special considerations applicable to the series of debt securities to which such prospectus supplement relates, including those applicable to: (1) Securities in bearer form; (2) debt securities with respect to which payments of principal, premium or interest are determined with reference to an index or formula (including changes in prices of particular securities, currencies or commodities); (3) debt securities with respect to which principal or interest is payable in a foreign or composite currency; (4) debt securities that are issued at a discount below their stated principal amount, bearing no interest or interest at a rate that at the time of issuance is below market rates ("Original Issue Discount Debt Securities"); and (5) variable rate debt securities that are exchangeable for fixed rate debt securities. Unless otherwise provided in the applicable prospectus supplement, Securities in registered form may be transferred or exchanged at the office of the trustee at which its corporate trust business is principally administered in the United States or at the office of the trustee or the trustee's agent in the Borough of Manhattan, the City and State of New York, at which its corporate agency business is conducted, subject to the limitations provided in the indenture, without the payment of any service charge, other than any tax or governmental charge payable in connection therewith. Securities in bearer form will be transferable only by delivery. Provisions with respect to the exchange of Securities in bearer form will be described in the prospectus supplement relating to those Securities in bearer form. All funds which we pay to a paying agent for the payment of principal, premium or interest with respect to any debt securities that remain unclaimed at the end of two years after that principal, premium or interest shall have become due and payable will be repaid to us, and the holders of those debt securities or any related coupons will thereafter look only to us for payment thereof. Global Securities The debt securities of a series may be issued in whole or in part in the form of one or more global securities. A global security is a debt security that represents, and is denominated in an amount equal to the aggregate principal amount of, all outstanding debt securities of a series, or any portion thereof, in either case having the same terms, including the same original issue date, date or dates on which principal and interest are due, and interest rate or method of determining interest. A global security will be deposited with, or on behalf of, a depositary, which will be identified in the prospectus supplement relating to such debt securities. Global securities may be issued in either registered or bearer form and in either temporary or definitive form. Unless and until it is exchanged in whole or in part for the individual debt securities represented thereby, a global security may not be transferred except as a whole by the depositary to a nominee of the depositary, by a nominee of the depositary to the depositary or another nominee of the depositary, or by the depositary or any nominee of the depositary to a successor depositary or any nominee of such successor. The specific terms of the depositary arrangement with respect to a series of debt securities will be described in the prospectus supplement relating to such debt securities. We anticipate that the following provisions will generally apply to depositary arrangements. Upon the issuance of a global security, the depositary for such global security will credit, on its book entry registration and transfer system, the respective principal amounts of the individual debt securities represented by such global security to the accounts of persons that have accounts with the depositary ("participants"). Such accounts shall be designated by the dealers or underwriters with respect to such debt securities or, if such debt securities are offered and sold -11- directly by us or through one or more agents, by us or such agents. Ownership of beneficial interests in a global security will be limited to participants or persons that hold beneficial interests through participants. Ownership of beneficial interests in such global security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the depositary (with respect to interests of participants) or records maintained by participants (with respect to interests of persons other than participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limitations and laws may impair the ability to transfer beneficial interests in a global security. So long as the depositary for a global security, or its nominee, is the registered owner or holder of such global security, such depositary or nominee, as the case may be, will be considered the sole owner or holder of the individual debt securities represented by such global security for all purposes under the indenture. Except as provided below, owners of beneficial interests in a global security will not be entitled to have any of the individual debt securities represented by such global security registered in their names, will not receive or be entitled to receive physical delivery of any of such debt securities in definitive form, and will not be considered the owners or holders thereof under the indenture. Subject to the restrictions applicable to Securities in bearer form described in an applicable prospectus supplement (see "Limitations on Issuance of Securities in Bearer Form" below), payments of principal, premium, and interest with respect to individual debt securities represented by a global security will be made to the depositary or its nominee, as the case may be, as the registered owner or holder of such global security. Neither we, the trustee, any paying agent or registrar for such debt securities or any agent of ours or the trustee's will have any responsibility or liability for: (1) any aspect of the records relating to or payments made by the depositary, its nominee or any participants on account of beneficial interests in the global security or for maintaining, supervising or reviewing any records relating to such beneficial interests; (2) the payment to the owners of beneficial interests in the global security of amounts paid to the depositary or its nominee; or (3) any other matter relating to the actions and practices of the depositary, its nominee or its participants. Neither we, the trustee, any paying agent or registrar for such debt securities or any agent of ours or the trustee will be liable for any delay by the depositary, its nominee or any of its participants in identifying the owners of beneficial interests in the global security, and we and the trustee may conclusively rely on, and will be protected in relying on, instructions from the depositary or its nominee for all purposes. We expect that the depositary for a series of debt securities or its nominee, upon receipt of any payment of principal, premium or interest with respect to a definitive global security representing any of such debt securities, will immediately credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such global security, as shown on the records of the depositary or its nominee. We also expect that payments by participants to owners of beneficial interests in such global security held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers and registered in "street name." Such payments will be the responsibility of such participants. Receipt by owners of beneficial interests in a temporary global security of payments of principal, premium or interest with respect thereto will be subject to the restrictions described in an applicable prospectus supplement (see "Limitation on Issuance of Securities in Bearer Form" below). If the depositary for a series of debt securities is at any time unwilling, unable or ineligible to continue as depositary, we shall appoint a successor depositary. If a successor depositary is not appointed by us within 90 days, we will issue individual debt securities of such series in exchange for the global security representing such series of debt securities. In addition, we may at any time and in our sole discretion, subject to any limitations described in the prospectus supplement relating to such debt securities, determine to no longer have debt securities of a series represented by a global security and, in such event, will issue individual debt securities of such series in exchange for the global security representing such series of debt securities. Furthermore, if we so specify with respect to the debt securities of a series, an owner of a beneficial interest in a global security representing debt securities of such series may, on terms acceptable to us, -12- the trustee, and the depositary for such global security, receive individual debt securities of such series in exchange for such beneficial interests, subject to any limitations described in the prospectus supplement relating to such debt securities. In any such instance, an owner of a beneficial interest in a global security will be entitled to physical delivery of individual debt securities of the series represented by such global security equal in principal amount to such beneficial interest and to have such debt securities registered in its name (if the debt securities are issuable as Securities in registered form). Individual debt securities of such series so issued will be issued: (1) as Securities in registered form in denominations, unless otherwise specified by us, of $1,000 and integral multiples thereof if the debt securities are issuable as Securities in registered form; (2) as Securities in bearer form in the denomination or denominations specified by us if the debt securities are issuable as Securities in bearer form; or (3) as either Securities in registered form or Securities in bearer form as described above if the debt securities are issuable in either form. Limitations on Issuance of Securities in Bearer Form The debt securities of a series may be issued as Securities in registered form (which will be registered as to principal and interest in the register maintained by the registrar for such debt securities) or Securities in bearer form (which will be transferable only by delivery). If such debt securities are issuable as Securities in bearer form, the applicable prospectus supplement will describe certain special limitations and considerations that will apply to such debt securities. Certain Covenants The indenture contains covenants including, among others, the following: Restrictions on Liens. Except as provided below under "--Exempted Debt," we will not, and will not permit any "significant subsidiary" (as such term is defined in Regulation S-X promulgated by the SEC) to, create or suffer to exist any mortgage, lien, pledge, charge, security interest or encumbrance (a "lien" or "liens") to secure any of our or a significant subsidiary's indebtedness on any property the net book value of which exceeds 1% of our consolidated net tangible assets (the "Principal Properties"), unless all of the debt securities outstanding at the time of such lien are secured by the same lien, equally and ratably with any and all other indebtedness secured by such lien. The restrictions in the preceding sentence do not apply to: o liens on property of a person existing at the time of its merger or consolidation with or into any of us or our significant subsidiaries or at the time of sale, lease or other disposition of its properties to any of us or our significant subsidiaries; o liens on property of a person existing at the time it becomes a significant subsidiary or existing on property prior to our or a significant subsidiary's acquisition of the property; o liens securing indebtedness (A) between a significant subsidiary and any of us, or (B) between significant subsidiaries or (C) between us; o liens on any property created, assumed or otherwise brought into existence in contemplation of the sale or other disposition of the underlying property, so long as (A) the relevant person disposes of such property within 180 days after the creation of those liens and (B) any indebtedness secured by those liens is without recourse to any of us or any significant subsidiary; o liens in favor of the United States of America or any of its states, or any of their departments, agencies or instrumentalities or political subdivisions, or in favor of any country, or any of its political subdivisions, to secure partial, progress, advance or other payments, or performance of any other similar -13- obligations, including, without limitation, liens to secure pollution control bonds or industrial revenue or other similar types of bonds; o liens imposed by law, such as carriers', warehousemen's and mechanics' liens and other similar liens arising in the ordinary course of business which secure obligations not more than 60 days past due or are being contested in good faith and by appropriate proceedings; o liens incurred in the ordinary course of business to secure performance of obligations with respect to statutory or regulatory requirements, performance or return-of-money bonds, surety bonds or other obligations of a like nature, in each case which are not incurred in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property and which do not in the aggregate impair in any material respect the use of property in the operation of our business taken as a whole; o liens incurred to secure appeal bonds and judgment and attachment liens, in each case in connection with litigation or legal proceedings which are being contested in good faith by appropriate proceedings so long as reserves have been established to the extent required by generally accepted accounting principles as in effect at such time; o pledges or deposits under workmen's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of indebtedness) or leases to which any of us or any significant subsidiary is a party, or deposits to secure public or statutory obligations of any of us or of any significant subsidiary or deposits for the payment of rent, in each case incurred in the ordinary course of business; o utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character; o liens granted to any bank or other institution on the payments to be made to such institution by any of us or any subsidiary pursuant to any interest rate swap or similar agreement or foreign currency hedge, exchange or similar agreement designed to provide protection against fluctuations in interest rates and currency exchange rates, respectively, provided that such agreements are entered into in, or are incidental to, the ordinary course of business; o liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of set off or similar rights and remedies, in each case as to any deposit account or any other fund maintained with a creditor depository institution, provided that (1) the deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the applicable issuer or a significant subsidiary in excess of those set forth by regulations promulgated by the Federal Reserve Board, and (2) the deposit account is not intended by the applicable issuer or a significant subsidiary to provide collateral to the depository institution; o liens arising from the Uniform Commercial Code financing statements regarding leases; o the giving, simultaneously with or within 180 days after the latest of the date of the indenture, or the acquisition, construction, improvement, development or expansion of such property, of a purchase money lien on property acquired, constructed, improved, developed or expanded after the date of the indenture, or the acquisition, construction, improvement, development or expansion after the date of the indenture, of property subject to any lien which is limited to such property; o the giving of a lien on real property which is the sole security for indebtedness incurred within two years after the latest of the date of the indenture, or the acquisition, construction, improvement, development or expansion of the property, so long as the holder of such indebtedness is entitled to enforce its payment only by resorting to such security; -14- o liens arising by the terms of letters of credit entered into in the ordinary course of business to secure reimbursement obligations thereunder; o liens existing on the date of the indenture; o liens for taxes, assessments and other governmental charges or levies not yet due or as to which the period of grace, if any, 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 generally accepted accounting principles as in effect at such time; and o extension, renewal, replacement or refunding of any lien existing on the date of the indenture or referred to in certain of the bullet points above, so long as the principal amount of indebtedness so secured and not otherwise authorized by the relevant bullet points shall not exceed the principal amount of indebtedness, plus any premium or fee payable in connection with any such extension, renewal, replacement or refunding, so secured at the time of such extension, renewal, replacement or refunding. Restrictions on Sale and Leaseback Transactions. Except as provided below under "--Exempted Debt," we will not, and will not permit any significant subsidiary to, enter into any arrangement with any person providing for the leasing from that person of any Principal Property previously or contemporaneously sold or transferred to it by any of us or our significant subsidiaries with the intention of taking back a lease of such Principal Property (a "sale and leaseback transaction"), unless our board of directors determines that the net proceeds of the sale or transfer are to be at least equal to the fair market value of the relevant Principal Property or asset at the time of the sale and transfer and either one of the following occurs: o within 180 days after it has been received, an amount equal to the net proceeds of such sale or transfer is applied to the retirement or prepayment of our or a significant subsidiary's indebtedness that is senior to or equal in right of payment with the debt securities of all series under the indenture or to the purchase, construction or development of property or assets to be used in the ordinary course of business, or o the lessee would, on the effective date of the relevant sale or transfer, be entitled, pursuant to the indenture, to issue, assume or guarantee indebtedness secured by a lien upon the relevant Principal Property at least equal in amount to the then present value (discounted at the actual rate of interest of the sale and leaseback transaction) of its obligation for the net rental payments in respect of such sale and leaseback transaction without equally and ratably securing the debt securities of all series under the indenture. The restrictions in the preceding paragraph will not apply to any sale and leaseback transaction: o between (A) any of us and a significant subsidiary or (B) between significant subsidiaries or (C) between us, so long as the lessor is one of us or a wholly owned significant subsidiary; o which has a lease of less than three years in length; o entered into within 180 days after the later of the purchase, construction or development of the relevant Principal Property or asset or the commencement of operation of the relevant Principal Property; or o involving Jones' distribution warehouse at South Hill, Virginia. Exempted Debt. Notwithstanding the restrictions in the indenture on (1) liens and (2) sale and leaseback transactions, any of us or any significant subsidiary may, in addition to amounts permitted under those restrictions, create indebtedness secured by liens, or enter into sale and leaseback transactions, so long as, at the time of those transactions and after giving effect to them, the aggregate outstanding amount of all such indebtedness secured by liens plus the then present value (discounted at the actual rate of interest of the sale and leaseback transaction) of the obligations for the net rental payments resulting from the sale and leaseback transactions does not exceed 20% of our and our subsidiaries' consolidated stockholders' equity. -15- Corporate Existence. Unless our board of directors determines that it is no longer desirable in the conduct of our business and the business of our significant subsidiaries considered as a whole, each of us will do or cause to be done all things necessary to preserve and keep in full force and effect our corporate existence, material rights (charter and statutory) and material franchises. No Special Protection in the Event of a Highly Leveraged Transaction. The terms of the debt securities of any series will not afford the holders special protection in the event of a highly leveraged transaction. Events of Default Each of the following constitutes an event of default under the indenture with respect to any series of debt securities: o default in payment of the principal or premium, if any, on the debt securities of that series, when such amount becomes due and payable at maturity, upon acceleration, redemption or otherwise; o our failure to pay interest on the debt securities of that series within 30 days of the due date; o our failure to comply with the obligations described under "--Mergers and Sales of Assets" below; o our failure to comply with any of our obligations under the covenants described under "--Certain Covenants" above upon receipt by us of notice of such default by the trustee or by holders of not less than 25% in aggregate principal amount of the debt securities of that series then outstanding and our failure to cure (or obtain a waiver of) such default within 30 days after receipt by us of such notice; o our failure to comply with any of our other agreements in the debt securities of that series or the indenture upon receipt by us of notice of such default by the trustee or by holders of not less than 25% in aggregate principal amount of the debt securities of that series then outstanding and our failure to cure (or obtain a waiver of) such default within 60 days after receipt by us of such notice; o a default under any indebtedness (including any other series of debt securities) by any of us or by any significant subsidiary as a result of which an amount in excess of $25.0 million becomes due and payable prior to the date on which it would otherwise have become due and payable upon receipt by us of notice of such default by the trustee or by holders of not less than 25% in aggregate principal amount of the debt securities of that series then outstanding, without such indebtedness having been discharged or such acceleration having been rescinded or annulled within 30 days after such notice; o any judgment or decree for the payment of money (not covered by insurance) in excess of $25.0 million against any of us or any significant subsidiary if (A) an enforcement proceeding thereon is commenced by any creditor or (B) it is not discharged, waived or stayed and remains outstanding for a period of 60 days; o the co-obligation of any of us shall cease to be in full force and effect (except as contemplated by the terms thereof); and o certain events of bankruptcy, insolvency or reorganization affecting us. A prospectus supplement may omit, modify or add to the foregoing events of default. If any event of default (other than an event of default relating to certain events of bankruptcy, insolvency or reorganization) occurs and is continuing under the indenture with respect to a particular series of debt securities, either the trustee or the holders of not less than 25% in aggregate principal amount of the debt securities of that series then outstanding by written notice to us (and to the trustee if such notice is given by the holders), may declare the principal amount of (or in the case of Original Issue Discount Debt Securities, the portion thereby specified in the terms thereof), premium, if any, and accrued interest on the debt securities of that series to be immediately due and payable. In the case of -16- certain events of bankruptcy, insolvency or reorganization, the principal amount of, premium, if any, and accrued interest on the debt securities of that series shall automatically become and be immediately due and payable without any declaration or other act on the part of the trustee or any holders. The holders of a majority in aggregate principal amount of the debt securities of any series then outstanding by notice to the trustee under the indenture may on behalf of the holders of all of such series of debt securities waive any existing default or event of default and its consequences under the applicable indenture except a continuing default or event of default in the payment of interest on, or the principal of the debt securities of such series. Subject to the provisions of the indenture relating to the duties of the trustee in case an event of default shall occur and be continuing, the trustee is under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the holders of any series of debt securities, unless such holders have offered to the trustee indemnity or security satisfactory to it against any loss, liability or expense. Subject to such provisions for the indemnification of the trustee, the holders of at least a majority in aggregate principal amount of the outstanding debt securities of a series have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee with respect to such series of debt securities. The trustee, however, may refuse to follow any direction that conflicts with law or the indenture or that the trustee determines is unduly prejudicial to the rights of any other holder of such series of debt securities or that would involve the trustee in personal liability. Prior to taking any action under the indenture, the trustee is entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. No holder of debt securities of a series has any right to institute any proceeding with respect to the indenture, or for the appointment of a receiver or a trustee, or for any other remedy thereunder, unless: o such holder has previously given to the trustee written notice of a continuing event of default with respect to such series of debt securities; o the holders of at least 25% in aggregate principal amount of the outstanding debt securities of that series have made written request, and such holder or holders have offered reasonable security or indemnity against any loss, liability or expense, to the trustee to institute such proceeding as trustee; and o the trustee has failed to institute such proceeding, and has not received from the holders of a majority in aggregate principal amount of the outstanding debt securities of that series a direction inconsistent with such request, within 60 days after such notice, request and offer. However, such limitations do not apply to a suit instituted by a holder of a debt security of such series for the enforcement of payment of the principal, premium, if any, or interest on such debt security on or after the applicable due date specified in such debt security. The indenture provides that if a default with respect to a series of debt securities occurs and is continuing and is known to the trustee, the trustee must mail to each holder of such debt securities notice of the default within 90 days after it occurs. Except in the case of a default in the principal or premium, if any, upon acceleration, redemption or otherwise with respect to any debt security of a series when such amount becomes due and payable, the trustee may withhold notice if and so long as a committee of its trust officers in good faith determines that withholding notice is in the interests of the holders. The indenture requires Jones to furnish to the trustee, within 120 days after the end of each fiscal year, a statement by certain of its officers as to whether or not we, to their knowledge, are in default in the performance or observance of any of the terms, provisions and conditions of the indenture and, if so, specifying all such known defaults. Modification and Waiver Modifications and amendments of the indenture may be made by us and the trustee with the consent of the holders of at least a majority in aggregate principal amount of the outstanding debt securities of any series affected by such modification or amendment. -17- No such modification or amendment may, without the consent of each holder affected thereby, o make any change to the percentage of principal amount of debt securities of any series the holders of which must consent to an amendment; o reduce the principal amount of, premium, if any, or interest on, or extend the stated maturity or interest payment periods, of any debt security; o make any debt security payable in money or securities other than that stated in such debt security; o make any change that adversely affects such holder's right to require us to purchase a debt security; o impair the right to institute suit for the enforcement of any payment with respect to the debt securities; o in the case of any subordinated debt security or coupons appertaining thereto, make any change in the provisions of the indenture relating to subordination that adversely affects the rights of any holder under such provisions; o except as provided under "--Satisfaction and Discharge of the Indenture: Defeasance", release any security or guarantee that may have been granted with respect to the debt securities; or o waive a default in payment of principal of, premium, if any, or interest on the debt securities of a series or modify any provisions of the indenture relating to modification or amendment thereof. Without the consent of any holder, we and the trustee may amend the indenture for one or more of the following purposes: o to evidence the succession of another person to us pursuant to the provisions of the indenture relating to consolidations, mergers and sales of assets and the assumption by such successor of our covenants, agreements and obligations in the indenture and in the debt securities; o to surrender any right or power conferred upon us by the indenture, to add to our covenants such further covenants, restrictions, conditions or provisions for the protection of the holders of all or any series of debt securities as our boards of directors shall consider to be for the protection of the holders of such debt securities, and to make the occurrence, or the occurrence and continuance, of a default in respect of any of such additional covenants, restrictions, conditions or provisions a default or an event of default under the indenture (provided, however, that with respect to any such additional covenant, restriction, condition or provision, such supplemental indenture may provide for a period of grace after default, which may be shorter or longer than that allowed in the case of other defaults, may provide for an immediate enforcement upon such default, may limit the remedies available to the trustee upon such default or may limit the right of holders of a majority in aggregate principal amount of any series of debt securities to waive such default); o to cure any ambiguity or correct or supplement any provision contained in the indenture, in any supplemental indenture or in any debt securities that may be defective or inconsistent with any other provision contained therein, to convey, transfer, assign, mortgage or pledge any property to or with the trustee, or to make such other provisions in regard to matters or questions arising under the indenture as shall not adversely affect the interests of any holders of debt securities of any series; o to modify or amend the indenture in such a manner as to permit the qualification of the indenture or any supplemental indenture under the Trust Indenture Act as then in effect; o to add to or change any of the provisions of the indenture to provide that Securities in bearer form may be registerable as to principal, to change or eliminate any restrictions on the payment of principal or premium with respect to Securities in registered form or of principal, premium or interest with respect to -18- Securities in bearer form; or to permit Securities in registered form to be exchanged for Securities in bearer form, so as to not adversely affect the interests of the holders of debt securities or any coupons of any series in any material respect or permit or facilitate the issuance of debt securities of any series in uncertificated form; o in the case of subordinated debt securities, to make any change in the provisions of the indenture relating to subordination that would limit or terminate the benefits available to any holder of senior indebtedness under such provisions (but only if each such holder of senior indebtedness consents to such change); o to add guarantees with respect to the debt securities or to secure the debt securities; o to make any change that does not adversely affect the rights of any holder; o to add to, change, or eliminate any of the provisions of the indenture with respect to one or more series of debt securities, so long as any such addition, change or elimination not otherwise permitted under the indenture shall (1) neither apply to any debt security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor modify the rights of the holders of any such debt security with respect to such provision or (2) become effective only when there is no such debt security outstanding; o to evidence and provide for the acceptance of appointment by a successor or separate trustee with respect to the debt securities of one or more series and to add to or change any of the provisions of the indenture as shall be necessary to provide for or facilitate the administration of the indenture by more than one trustee; or o to establish the form or terms of debt securities and coupons of any series, as described under "--General" above. Mergers and Sales of Assets The indenture provides that none of the issuers may consolidate with or merge into any other person or convey, transfer or lease all or substantially all of its properties and assets to another person, unless among other items: (i) the resulting, surviving or transferee person (if other than the relevant issuer) is organized and existing under the laws of the United States, any state thereof or the District of Columbia and such person expressly assumes, by supplemental indenture, all obligations of the relevant issuer under all of the debt securities and the indenture; (ii) the relevant issuer or such successor person shall not immediately thereafter be in default under the indenture; (iii) the relevant issuer shall have provided the trustee with an opinion of counsel and officer's certificate confirming compliance with the indenture and (iv) all of the debt securities shall be secured ratably by any liens to which a Principal Property of the relevant issuer becomes subject as a result of the transaction that would otherwise not be permitted by the indenture. Upon the assumption of the obligations of the relevant issuer by such a person in such circumstances, subject to certain exceptions, the relevant issuer shall be discharged from all obligations under all debt securities and the indenture (except in the case of a lease). Satisfaction and Discharge of the Indenture; Defeasance The indenture shall generally cease to be of any further effect with respect to a series of debt securities if (a) we have delivered to the trustee for cancellation all debt securities of such series (with certain limited exceptions) or (b) all debt securities and coupons of such series not theretofore delivered to the trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one -19- year, and we shall have deposited with the trustee as trust funds the entire amount sufficient to pay at maturity or upon redemption all such debt securities and coupons (and if, in either case, we shall also pay or cause to be paid all other sums payable under the indenture by us). In addition, we shall have a "legal defeasance option" (pursuant to which we may terminate, with respect to the debt securities of a particular series, all of our obligations under such debt securities and the indenture with respect to such debt securities) and a "covenant defeasance option" (pursuant to which we may terminate, with respect to the debt securities of a particular series, our obligations with respect to such debt securities under certain specified covenants contained in the indenture). If we exercise our legal defeasance option with respect to a series of debt securities, payment of such debt securities may not be accelerated because of an event of default. If we exercise our covenant defeasance option with respect to a series of debt securities, payment of such debt securities may not be accelerated because of an event of default related to the specified covenants. The applicable prospectus supplement will describe the procedures we must follow in order to exercise our defeasance options. Regarding the Trustee The indenture provides that, except during the continuance of an event of default, the trustee will perform only such duties as are specifically set forth in the indenture. During the existence of an event of default, the trustee will exercise such rights and powers vested in it under the indenture and use the same degree of care and skill in its exercise as a prudent person would exercise under the circumstances in the conduct of such person's own affairs. The indenture and provisions of the Trust Indenture Act that are incorporated by reference therein contain limitations on the rights of the trustee, should it become one of our creditors, to obtain payment of claims in certain cases or to realize on certain property received by it in respect of any such claim as security or otherwise. The trustee is permitted to engage in other transactions with us or any of our affiliates; provided, however, that if it acquires any conflicting interest (as defined in the indenture or in the Trust Indenture Act), it must eliminate such conflict or resign. The initial trustee under the indenture has additional financial arrangements with us, including as trustee under Nine West's Supplemental Executive Retirement Plan, as trustee for the Nine West Pension Plan, as a lender under our 364-Day Revolving Credit Facility and our Five-Year Revolving Credit Facility, as trustee for our 7.50% Senior Notes Due 2004, our 7.875% Senior Notes Due 2006, our 8-3/8% Series B Senior Notes Due 2005 and Nine West's 9% Series B Senior Subordinated Notes Due 2007 and as transfer agent and registrar for Jones Apparel Group common stock. DESCRIPTION OF CAPITAL STOCK Jones Apparel Group's authorized capital stock consists of (1) 200,000,000 shares of common stock, $.01 par value per share, and (2) 1,000,000 shares of preferred stock, $.01 par value per share. On April 7, 2001, Jones Apparel Group had 119,849,155 shares of common stock issued and outstanding and no shares of preferred stock outstanding. Jones Apparel Group common stock is listed on the New York Stock Exchange under the trading symbol "JNY." Each share of Jones Apparel Group common stock is entitled to one vote on all matters submitted to a vote of shareholders. Jones Apparel Group shareholders are entitled to receive dividends when and as declared by the Jones Apparel Group board of directors out of legally available funds. Dividends may be paid on the Jones Apparel Group common stock only if all dividends on any outstanding preferred stock of Jones Apparel Group shareholders have been paid or reserved. To date, Jones Apparel Group has not paid any cash dividends on shares of its common stock and does not anticipate paying any cash dividends in the foreseeable future. The issued and outstanding shares of Jones Apparel Group common stock are fully paid and nonassessable. Jones Apparel Group shareholders have no preemptive or conversion rights and are not subject to further calls or assessments by Jones Apparel Group. In the event of the voluntary or involuntary dissolution, liquidation or winding up of Jones Apparel Group, Jones Apparel Group shareholders are entitled to receive, pro rata, after satisfaction in full of the prior rights of creditors and holders of preferred stock, if any, all of Jones Apparel Group's remaining assets available for distribution. The Jones Apparel Group board of directors is authorized to provide for the issuance from time to time of Jones Apparel Group preferred stock in series and, as to each series, to fix the designation, the dividend rate, whether dividends are cumulative, the preferences which dividends will have with respect to any other class or series of capital stock, the voting rights, the voluntary and involuntary liquidation prices, the conversion or exchange privileges, the redemption prices -20- and the other terms of redemption, and the terms of any purchase or sinking funds applicable to the series. The terms of any series of preferred stock will be described in a prospectus supplement. Cumulative dividends, dividend preferences and conversion, exchange and redemption provisions, to the extent that some or all of these features may be present when shares of Jones Apparel Group preferred stock are issued, could have an adverse effect on the availability of earnings for distribution to the holders of Jones Apparel Group common stock or for other corporate purposes. The transfer agent and registrar for Jones Apparel Group common stock is The Bank of New York. DESCRIPTION OF WARRANTS We may issue warrants for the purchase of debt securities, preferred stock or common stock. Warrants may be issued independently or together with debt securities, preferred stock or common stock offered by any prospectus supplement and may be attached to or separate from any such offered securities. Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent. The warrant agent will act solely as our agent in connection with the warrants and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. The following summary of certain provisions of the warrants does not purport to be complete and is subject to, and qualified in its entirety by reference to, the provisions of the warrant agreement that will be filed with the SEC in connection with the offering of such warrants. Debt Warrants The prospectus supplement relating to a particular issue of debt warrants will describe the terms of such debt warrants, including the following: (a) the title of such debt warrants; (b) the offering price for such debt warrants, if any; (c) the aggregate number of such debt warrants; (d) the designation and terms of the debt securities purchasable upon exercise of such debt warrants; (e) if applicable, the designation and terms of the debt securities with which such debt warrants are issued and the number of such debt warrants issued with each such debt security; (f) if applicable, the date from and after which such debt warrants and any debt securities issued therewith will be separately transferable; (g) the principal amount of debt securities purchasable upon exercise of a debt warrant and the price at which such principal amount of debt securities may be purchased upon exercise (which price may be payable in cash, securities, or other property); (h) the date on which the right to exercise such debt warrants shall commence and the date on which such right shall expire; (i) if applicable, the minimum or maximum amount of such debt warrants that may be exercised at any one time; (j) whether the debt warrants represented by the debt warrant certificates or debt securities that may be issued upon exercise of the debt warrants will be issued in registered or bearer form; (k) information with respect to book-entry procedures, if any; (1) the currency or currency units in which the offering price, if any, and the exercise price are payable; (m) if applicable, a discussion of material United States federal income tax considerations; (n) the antidilution provisions of such debt warrants, if any; (o) the redemption or call provisions, if any, applicable to such debt warrants; and (p) any additional terms of such debt warrants, including terms, procedures, and limitations relating to the exchange and exercise of such debt warrants. Stock Warrants The prospectus supplement relating to any particular issue of preferred stock warrants or common stock warrants will describe the terms of such warrants, including the following: (a) the title of such warrants; (b) the offering price for such warrants, if any; (c) the aggregate number of such warrants; (d) the designation and terms of the common stock or preferred stock purchasable upon exercise of such warrants; (e) if applicable, the designation and terms of the offered securities with which such warrants are issued and the number of such warrants issued with each such offered security; (f) if applicable, the date from and after which such warrants and any offered securities issued therewith will be separately transferable; (g) the number of shares of common stock or preferred stock purchasable upon exercise of a warrant and the price at which such shares may be purchased upon exercise; (h) the date on which the right to exercise such warrants shall commence and the date on which such right shall expire; (i) if applicable, the minimum or maximum amount of such warrants that may be exercised at any one time; (j) the currency or currency units in which the offering price, if any, and the exercise price are payable; (k) if applicable, a discussion of material United States federal income tax considerations; (l) the antidilution provisions of such warrants, if any; (m) the redemption or call provisions, if any, applicable to such -21- warrants; and (n) any additional terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such warrants. PLAN OF DISTRIBUTION The distribution of the securities may be effected from time to time in one or more transactions at a fixed price or prices (which may be changed from time to time), at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. Each prospectus supplement will describe the method of distribution of the securities offered therein. We may sell securities directly, through agents designated from time to time, through underwriting syndicates led by one or more managing underwriters or through one or more underwriters acting alone. Each prospectus supplement will describe the terms of the securities to which such prospectus supplement relates, the name or names of any underwriters or agents with whom we have entered into arrangements with respect to the sale of such securities, the public offering or purchase price of such securities and the net proceeds we will receive from such sale. In addition, each prospectus supplement will describe any underwriting discounts and other items constituting underwriters' compensation, any discounts and commissions allowed or paid to dealers, if any, any commissions allowed or paid to agents, and the securities exchange or exchanges, if any, on which such securities will be listed. Dealer trading may take place in certain of the securities, including securities not listed on any securities exchange. If so indicated in the applicable prospectus supplement, we will authorize underwriters or agents to solicit offers by certain institutions to purchase securities from us pursuant to delayed delivery contracts providing for payment and delivery at a future date. Institutions with which such contracts may be made include, among others: o commercial and savings banks; o insurance companies; o pension funds; o investment companies; and o educational and charitable institutions. In all cases, such institutions must be approved by us. Unless otherwise set forth in the applicable prospectus supplement, the obligations of any purchaser under any such contract will not be subject to any conditions except that (i) the purchase of the securities will not at the time of delivery be prohibited under the laws of the jurisdiction to which such purchaser is subject and (ii) if the securities are also being sold to underwriters acting as principals for their own account, the underwriters will have purchased such securities not sold for delayed delivery. The underwriters and such other persons will not have any responsibility in respect of the validity or performance of such contracts. Any underwriter or agent participating in the distribution of the securities may be deemed to be an underwriter, as that term is defined in the Securities Act, of the securities so offered and sold and any discounts or commissions received by them, and any profit realized by them on the same or resale of the securities may be deemed to be underwriting discounts and commissions under the Securities Act. Certain of any such underwriters and agents, including their associates, may be customers of, engage in transactions with and perform services for us and our subsidiaries in the ordinary course of business. One or more of our affiliates may from time to time act as an agent or underwriter in connection with the sale of the securities to the extent permitted by applicable law. The participation of any such affiliate in the offer and sale of the securities will comply with Rule 2720 of the Conduct Rules of the National Association of Securities Dealers, Inc. regarding the offer and sale of securities of an affiliate. -22- Except as indicated in the applicable prospectus supplement, the securities are not expected to be listed on a securities exchange, except for the common stock of Jones Apparel Group, which is listed on The New York Stock Exchange, and any underwriters or dealers will not be obligated to make a market in securities. We cannot predict the activity or liquidity of any trading in the securities. VALIDITY OF SECURITIES The validity of the securities offered by this prospectus will be passed upon by Ira M. Dansky, Esq., our General Counsel. With respect to certain matters concerning Pennsylvania law, he will rely on Schnader, Harrison, Segal & Lewis LLP, Philadelphia, Pennsylvania. As of April 9, 2001, Mr. Dansky owned no shares of Jones Apparel Group common stock but had options to purchase 205,585 shares of Jones Apparel Group common stock. EXPERTS The consolidated financial statements of Jones incorporated by reference in this prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2000 have been audited by BDO Seidman, LLP, independent certified public accountants, to the extent and for the periods set forth in their reports incorporated herein by reference, and are incorporated herein in reliance upon such reports given upon the authority of said firm as experts in accounting and auditing. -23- PART II. INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the various expenses in connection with the sale and distribution of the securities being registered, other than the underwriting discounts and commissions. All amounts shown are estimates except for the SEC registration fee. Securities and Exchange Commission registration fee..............$112,500.00 Printing and engraving expenses.................................. 7,500.00 Accounting fees and expenses..................................... 20,000.00 Legal fees and expenses.......................................... 150,000.00 Fees of trustee.................................................. 5,000.00 Miscellaneous expenses........................................... 10,000.00 ----------- Total:......................................................$305,000.00 =========== ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. As permitted by the Pennsylvania Business Corporation Law of 1988 (the "Pennsylvania Business Corporation Law"), Section 8.1 of the By-laws of Jones Apparel Group, Inc. and Section 7.1 of the By-laws of Jones Apparel Group USA, Inc. provide that a director shall not be personally liable for monetary damages for any action taken or failed to be taken, other than as expressly provided in the Pennsylvania Business Corporation Law. Furthermore, such By-laws provide that the applicable corporation shall indemnify each officer and director to the full extent permitted by the Pennsylvania Business Corporation Law, and shall pay and advance expenses for any matters covered by such indemnification. Section 1741 of the Pennsylvania Business Corporation Law provides that a corporation shall have the power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation), by reason of the fact that he or she is or was a representative of the corporation, or is or was serving at the request of the corporation as a representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action or proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the person did not act in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation and, with respect to any criminal proceeding, had reasonable cause to believe that his or her conduct was unlawful. Section 1742 of the Pennsylvania Business Corporation Law provides that a corporation shall have the power to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending or completed action by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he or she is or was a representative of the corporation or is or was serving at the request of the corporation as a representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection with the defense or settlement of the action if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interest of the corporation. Indemnification shall not be made under Section 1742 in respect of any claim, issue or matter as to which the person has been adjudged to be liable to the corporation unless and only to the extent that the court of common pleas of the judicial district embracing the county in which the registered office of the corporation is located or the court in which the action was brought determines upon application, that, despite the adjudication of liability but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for the expenses that the court of common pleas or other court deems proper. II-1 Section 1743 of the Pennsylvania Business Corporation Law provides that to the extent that a representative of a corporation has been successful on the merits or otherwise in defense of any action or proceeding referred to in Sections 1741 or 1742 or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorney fees) actually and reasonably incurred by him or her in connection therewith. The Certificate of Incorporation of Jones Apparel Group Holdings, Inc., a Delaware corporation ("Jones Holdings") and the Certificate of Incorporation of Nine West Group Inc., a Delaware corporation ("Nine West"), provide that no director of Jones Holdings or Nine West shall be personally liable to Jones Holdings, Nine West or their stockholders for monetary damages for breach of a fiduciary duty other than as expressly provided in the General Corporation Law of Delaware (the "DGCL"). Section 102(b)(7) of the DGCL eliminates liability except (1) for any breach of the director's duty of loyalty to Jones Holdings, Nine West or their stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (3) under Section 174 of the DGCL or (4) for any transaction from which the director derives an improper personal benefit. Furthermore, the Certificate of Incorporation and By-laws of Jones Holdings and Nine West each provide that Jones Holdings and Nine West shall indemnify their officers, directors, employees and agents to the full extent permitted by the DGCL, and shall pay and advance expenses for any matters covered by such indemnification. In addition, Jones Apparel Group, Inc. has entered into executive employment agreements with Sidney Kimmel, Jackwyn Nemerov, Irwin Samelman and Wesley R. Card pursuant to which Jones Apparel Group, Inc. has agreed to indemnify such officers and directors to the maximum extent permitted by applicable law against any liability incurred by such officers and directors in their capacities as such. Subsection (a) of Section 145 of the DGCL empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he or she is or was a director, employee or agent of the corporation or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or their enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was unlawful. Subsection (b) of Section 145 of the DGCL empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that such person acted in any of the capacities set forth above, against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and except that no indemnification may be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine that despite the adjudication of liability such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Section 145 of the DGCL further provides that (1) to the extent a director, officer, employee or agent of a corporation has been successful in the defense of any action, suit or proceeding referred to in subsections (a) and (b) or in the defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith; (2) indemnification or advancement of expenses provided for by Section 145 shall not be deemed exclusive of any other rights to which the indemnified party may be entitled; and (3) the corporation shall have the power to purchase and maintain insurance on behalf of a director, officer, employee or agent of the corporation against any liability asserted against him or her or incurred by him or her in any such capacity or arising out of his or her status as such whether or not the corporation would have the power to indemnify him or her against such liabilities under Section 145. II-2 ITEM 16. EXHIBITS Exhibit No. Description - ----------- ------------ 4.1 Form of Underwriting Agreement 4.2 Form of Indenture 5.1 Opinion of Ira M. Dansky, Esq. 5.2 Opinion of Schnader Harrison Segal & Lewis LLP 12.1 Statement regarding Computation of Ratio of Earnings to Fixed Charges 23.1 Consent of BDO Seidman, LLP 23.2 Consent of Ira M. Dansky, Esq. (included in opinion filed as Exhibit 5.1) 23.3 Consent of Schnader Harrison Segal & Lewis LLP (included in opinion filed as Exhibit 5.2) 24.1 Power of Attorney (included in signature page) 25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New York, as trustee under the indenture ITEM 17. UNDERTAKINGS. (a) Each undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made of the securities registered hereby, a post-effective amendment to this registration statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in this registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that the undertaking set forth in paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrants pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. II-3 (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) Each undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. (d) Each undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (e) Each undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act (the "Act") in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act. II-4 SIGNATURES Pursuant to the requirements of the Securities Act, each of the registrants certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York on April 9, 2001. JONES APPAREL GROUP, INC. By /s/ Wesley R. Card -------------------------------- Wesley R. Card Chief Financial Officer JONES APPAREL GROUP HOLDINGS, INC. By /s/ Ira M. Dansky -------------------------------- Ira M. Dansky President JONES APPAREL GROUP USA, INC. By /s/ Wesley R. Card -------------------------------- Wesley R. Card Chief Financial Officer NINE WEST GROUP INC. By /s/ Wesley R. Card -------------------------------- Wesley R. Card Chief Financial Officer II-5 POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints Ira M. Dansky, Wesley R. Card and Patrick M. Farrell and each of them, his or her true and lawful attorney-in-fact and agent, with full power and substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement, any registration statement filed pursuant to Rule 462(b) under the Securities Act, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact, agent, or his substitute may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE JONES APPAREL GROUP, INC. /s/ Sidney Kimmel Chairman and Director April 9, 2001 - ---------------------- (Principal Executive Officer) Sidney Kimmel /s/ Jackwyn Nemerov President and Director April 9, 2001 - ---------------------- Jackwyn Nemerov /s/ Wesley R. Card Chief Financial Officer April 9, 2001 - ---------------------- (Principal Financial Officer) Wesley R. Card /s/ Patrick M. Farrell Senior Vice President and Corporate Controller April 9, 2001 - ---------------------- (Principal Accounting Officer) Patrick M. Farrell /s/ Irwin Samelman Executive Vice President, April 9, 2001 - ---------------------- Marketing and Director Irwin Samelman /s/ Geraldine Stutz Director April 9, 2001 - ---------------------- Geraldine Stutz /s/ Howard Gittis Director April 9, 2001 - ---------------------- Howard Gittis /s/ Eric A. Rothfeld Director April 9, 2001 - ---------------------- Eric A. Rothfeld /s/ Anthony F. Scarpa Director April 9, 2001 - ---------------------- Anthony F. Scarpa
JONES APPAREL GROUP HOLDINGS, INC. /s/ Ira M. Dansky President and Director April 9, 2001 - ---------------------- (Principal Executive Officer) Ira M. Dansky /s/ Joseph T. Donnalley Vice President/Finance and Director April 9, 2001 - ---------------------- (Principal Financial Officer and Principal Joseph T. Donnalley Accounting Officer) /s/ Patricia F. Genzel Director April 9, 2001 - ---------------------- Patricia F. Genzel
II-6
JONES APPAREL GROUP USA, INC. /s/ Sidney Kimmel Chairman and Director April 9, 2001 - ---------------------- (Principal Executive Officer) Sidney Kimmel /s/ Jackwyn Nemerov President and Director April 9, 2001 - ---------------------- Jackwyn Nemerov /s/ Wesley R. Card Chief Financial Officer April 9, 2001 - ---------------------- (Principal Financial Officer) Wesley R. Card /s/ Patrick M. Farrell Senior Vice President and Corporate Controller April 9, 2001 - ---------------------- (Principal Accounting Officer) Patrick M. Farrell /s/ Irwin Samelman Executive Vice President, Marketing April 9, 2001 - ---------------------- and Director Irwin Samelman NINE WEST GROUP INC. /s/ Jackwyn Nemerov Chairman and Director April 9, 2001 - ---------------------- (Principal Executive Officer) Jackwyn Nemerov /s/ Wesley R. Card Chief Financial Officer and Director April 9, 2001 - ---------------------- (Principal Financial Officer) Wesley R. Card /s/ Patrick M. Farrell Senior Vice President April 9, 2001 - ---------------------- (Principal Accounting Officer) Patrick M. Farrell /s/ Sidney Kimmel Director April 9, 2001 - ---------------------- Sidney Kimmel /s/ Irwin Samelman Director April 9, 2001 - ---------------------- Irwin Samelman
II-7 EXHIBIT INDEX Exhibit No. Description - ----------- ------------ 4.1 Form of Underwriting Agreement 4.2 Form of Indenture 5.1 Opinion of Ira M. Dansky, Esq. 5.2 Opinion of Schnader Harrison Segal & Lewis LLP 12.1 Statement regarding computation of Ratio of Earnings to Fixed Charges 23.1 Consent of BDO Seidman, LLP 23.2 Consent of Ira M. Dansky, Esq. (included in opinion filed as Exhibit 5.1) 23.3 Consent of Schnader Harrison Segal & Lewis LLP (included in opinion filed as Exhibit 5.2) 24.1 Power of Attorney (included in signature page) 25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of The Bank of New York, as trustee under the indenture E-1 EX-4.1 2 0002.txt FORM OF UNDERWRITING AGREEMENT EXHIBIT 4.1 Jones Apparel Group, Inc. Jones Apparel Group Holdings, Inc. Jones Apparel Group USA, Inc. Nine West Group Inc. Debt Securities, Preferred and Common Stock Underwriting Agreement ---------------------- Ladies and Gentlemen: Jones Apparel Group, Inc., a Pennsylvania corporation (the "Company") proposes, subject to the terms and conditions stated herein, to issue and sell to the Underwriters named in a schedule to the Terms Agreement (as defined in Article 2 below) (the "Underwriters") from time to time certain of its preferred stock or common stock (the "Offered Equity Securities"). The Company, Jones Apparel Group USA, Inc., a Pennsylvania corporation ("Jones USA"), Jones Apparel Group Holdings, Inc., a Delaware corporation ("Jones Holdings") and Nine West Group Inc., a Delaware corporation ("Nine West" and, together with the Company, Jones USA and Jones Holdings, the "Issuers") propose, subject to the terms and conditions stated herein, to issue and sell to the Underwriters from time to time certain of their debt securities (the "Offered Debt Securities" and, together with the Offered Equity Securities, the "Offered Securities"). The representatives of the Underwriters, if any, specified in a Terms Agreement are hereinafter referred to as the "Representatives"; provided, however, that if the Terms Agreement does not specify any representative of the Underwriters, the term "Representatives", as used in this Agreement, shall mean the Underwriters. If the Offered Securities are debt securities: The Offered Securities will be issued under an indenture, dated as of _________, ____ (the "Indenture"), between the Issuers and a trustee as Trustee, in one or more series, which series may vary as to interest rates, maturities, redemption provisions, selling prices and other terms. If the Offered Securities are preferred stock: The Offered Securities may be issued in one or more series, which series may vary as to dividend rates, redemption provisions, selling prices and other terms. Particular series or offerings of Offered Securities will be sold pursuant to a Terms Agreement, for resale in accordance with terms of offering determined at the time of sale. 1. As of the date of each Terms Agreement, the Company represents and warrants to, and agrees, or, in the case of Offered Debt Securities, the Issuers, jointly and severally, represent and warrant to, and agree with, each Underwriter that: (a) A registration statement on Form S-3 relating to the Offered Securities has been filed with the Securities and Exchange Commission (the "Commission") and has become effective; and no stop order suspending the effectiveness of the initial registration statement, any post-effective amendment thereto or Rule 462(b) registration statement, if any, has been issued and no proceeding for that purpose has been initiated or threatened by the Commission. Such registration statement, as amended at the time of any Terms Agreement, is hereinafter referred to as the "Registration Statement", and the prospectus included in such Registration Statement, as supplemented and amended as contemplated by Section 2 to reflect the terms of the Offered Securities (if they are debt securities or preferred stock) and the terms of the offering of the Offered Securities, as first filed with the Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under the Securities Act of 1933, as amended (the "Act"), including all material incorporated by reference therein, is hereinafter referred to as the "Prospectus"; 2 (b) No order preventing or suspending the use of any preliminary Prospectus has been issued by the Commission, and each preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder ("Rules and Regulations"), and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company, or, in the case of Offered Debt Securities, any Issuer, by an Underwriter expressly for use therein; (c) The Registration Statement conforms and on the date of each Terms Agreement will conform, and the Prospectus and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the Rules and Regulations and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable date as to the Prospectus and any amendment or supplement thereto and as of the date of each Terms Agreement, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company, or, in the case of Offered Debt Securities, any Issuer, by an Underwriter expressly for use therein; (d) The Company and each of its subsidiaries has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which ownership or lease of property or the conduct of its business requires such qualification and has all power and authority necessary to own or hold its properties and to conduct the business in which it is engaged, except where the failure to so qualify or have such power or authority would not, singularly or in the aggregate, have a material adverse effect on the condition, financial or otherwise, earnings, business affairs or business prospects of the Company and its subsidiaries taken as a whole (a "Material Adverse Effect"); (e) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and conform to the description of the capital stock contained in the Prospectus; and all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and (except for directors' qualifying shares and except as set forth in the Prospectus) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims, except as set forth in the Prospectus; (f) If the Offered Securities are debt securities: The Offered Securities have been duly and validly authorized and, when issued and delivered against payment therefor as provided pursuant to the Terms Agreement, will be duly and validly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Issuers and will be entitled to the benefits provided by the Indenture under which they are to be issued, which is substantially in the form filed as an exhibit to the Registration Statement; the Indenture has been duly authorized and duly qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and, when executed and delivered by the Issuers and the Trustee, will constitute a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability 3 relating to or affecting creditor's rights and to general equity principles; and the Offered Securities and the Indenture will conform to the description thereof in the Registration Statement and the Prospectus; (g) If the Offered Securities are common stock or are convertible into common stock: The Offered Securities to be issued and sold by the Company to the Underwriters pursuant to the Terms Agreement have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued and fully paid and nonassess able and will conform to the description of the common stock contained in the Prospectus; and, except as described in the Prospectus, the shareholders of the Company have no preemptive rights with respect to the Offered Securities; (h) If the Offered Securities are preferred stock: The Offered Securities have been duly authorized and, when the Offered Securities have been delivered and paid for in accordance with the Terms Agreement on the Closing Date, such Offered Securities will have been validly issued, fully paid and nonassessable and will conform to the description thereof contained in the Prospectus; and, except as described in the Prospectus, the shareholders of the Company have no preemptive rights with respect to the Offered Securities; (i) If the Offered Securities are convertible: When the Offered Securities are delivered and paid for pursuant to the Terms Agreement at the Time of Delivery, such Offered Securities will be convertible into common stock of the Company in accordance with their terms (if the Offered Securities are preferred stock) or the Indenture (if the Offered Securities are debt securities); the shares of common stock initially issuable upon conversion of such Offered Securities have been duly authorized and reserved for issuance upon such conversion and, when issued upon such conversion, will be validly issued, fully paid and nonassessable; the outstanding shares of common stock have been duly authorized and validly issued, are fully paid and nonassessable and conform to the description thereof contained in the Prospectus; and, except as described in the Prospectus, the shareholders of the Company have no preemptive rights with respect to the common stock; (j) The execution, delivery and performance of [If the Offered Securities are debt securities: the Indenture] [If the Offered Securities are preferred stock: the statement with respect to shares (the "Statement with Respect to Shares")] and the Terms Agreement and the issuance and sale of the Offered Securities and compliance by the Company, or, in the case of Offered Debt Securities, the Issuers, with all of the provisions thereof will not conflict with or result in a breach or violation of any of the terms or provisions of, or (with the giving of notice or the lapse of time or both) constitute a default under, (A) any material indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (B) the provisions of the charter, by-laws or other constitutive documents of the Company or any of its subsidiaries or (C) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties or assets except in the cases of clause (A) or (C), such breaches, violations or defaults that in the aggregate would not have a Material Adverse Effect; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Offered Securities or the consummation by the Company, or, in the case of Offered Debt Securities, the Issuers, of the transactions contemplated by the Terms Agreement (including the provisions of this Agreement), except (A) the registration under the Act of the Offered Securities and (B) such consents, approvals, authorizations, registrations or qualifications as (1) may be required under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), 4 the Trust Indenture Act and applicable state or foreign securities laws in connection with the purchase and distribution of the Offered Securities by the Underwriters, (2) may have already been obtained or made and (3) the failure to obtain or make would not, individually or in the aggregate, have a Material Adverse Effect; (k) Neither the Company nor any of its subsidiaries is (A) in violation of its articles or by-laws, (B) in default in any material respect, and no event has occurred which, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound, which is material to the Company and its subsidiaries taken as a whole, or to which any of its properties or assets is subject or (C) in violation in any material respect of any law, ordinance, governmental rule, regulation or court decree to which it or its property or assets may be subject or has failed to obtain any material license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership of its property or to the conduct of its business, except for, in the cases of clause (B) or (C), such defaults, violations or failures to obtain that in the aggregate would not have a Material Adverse Effect; (l) The statements set forth in the Prospectus under the caption "Description of the [Debt Securities/Capital Stock]", insofar as they purport to constitute a summary of the terms of the Offered Securities, under the caption "Certain United States Federal Income Tax Considerations" and under the caption "Plan of Distribution", insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate in all material respects; (m) Other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect; and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (n) The Company, or, in the case of Offered Debt Securities, each Issuer is not and, after giving effect to the offering and sale of the Offered Securities, will not be an "investment company", as such term is defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"); (o) BDO Seidman, LLP, who have certified certain financial statements of the Company and its subsidiaries are independent certified public accountants as required by the Act and the rules and regulations of the Commission thereunder; (p) Except as described in the Prospectus, there are no contracts, agreements or understandings between the Company or any of its subsidiaries and any person (other than as described in the Terms Agreement) granting such person the right to require the Company or any of its subsidiaries to file a registration statement under the Act with respect to any securities of the Company or its subsidiaries owned or to be owned by such person or to require the Company or any of its subsidiaries to include such securities in the securities registered pursuant to the Registration Statement or the Prospectus or in any securities being registered pursuant to any other registration statement filed by the Company or any of its subsidiaries under the Act; (q) This Agreement and the Terms Agreement have been duly authorized, executed and delivered by the Company, or, in the case of Offered Debt Securities, by the Issuers, and, assuming due authorization, execution and delivery by the Underwriters, constitute the valid and binding 5 agreement of the Company, or, in the case of Offered Debt Securities, the Issuers, enforceable against the Company, or, in the case of Offered Debt Securities, the Issuers, in accordance with their terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding in equity or at law); (r) If the Offered Securities are common stock or are convertible into common stock: Except as described in the Prospectus, the Company has not sold or issued any shares of common stock during the six-month period preceding the date of the Terms Agreement, including any sales pursuant to Rule 144A under, or Regulation D or Regulation S of, the Act other than shares issued pursuant to employee benefit plans or other employee compensation plans or pursuant to outstanding options, rights or warrants; (s) The consolidated historical and pro forma financial statements, together with the related notes thereto filed as part of the Registration Statement or included in the Prospectus comply as to form in all material respects with the requirements of Regulation S-X under the Act applicable to registration statements on Form S-3 under the Act. Such historical financial statements fairly present the financial position of the Company at the respective dates indicated and the results of operations and cash flows for the respective periods indicated, in each case in accordance with generally accepted accounting principles ("GAAP") consistently applied throughout such periods. Such pro forma financial statements have been prepared on a basis consistent with such historical statements, except for the pro forma adjustments specified therein, and give effect to assumptions made on a reasonable basis and in good faith and present fairly the pro forma position, results of operations and the other information purported to be shown therein at the respective dates or the respective periods therein specified. The other financial and statistical information and data filed as part of the Registration Statement or included in the Prospectus, historical and pro forma, are, in all material respects, fairly presented and prepared on a basis consistent with such financial statements and the books and records of the Company; (t) The Company and each of its subsidiaries possess all licenses, certificates, authorizations and permits which are material to the Company and its subsidiaries, taken as a whole, issued by, and have made all declarations and filings with, the appropriate Federal, state or foreign regulatory agencies or bodies which are necessary or desirable for the ownership of their properties or the conduct of their businesses as they will be described in the Prospectus, except where the failure to possess or make the same would not, singularly or in the aggregate, have a Material Adverse Effect, and neither the Company nor any of its subsidiaries has received notification of any revocation or modification of any such license, certificate, authorization or permit or has any reason to believe that any such license, certificate, authorization or permit will not be renewed in the ordinary course; and (u) The Company and each of its subsidiaries owns or possesses, or can acquire on reasonable terms, adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) necessary for the conduct of their businesses, except where the failure to own, possess or acquire the same would not, singularly or in the aggregate, have a Material Adverse Effect; and the conduct of their businesses will not conflict in any material respect with, and neither the Company nor any of its subsidiaries has received any notice of any claim (other than such claims as would not reasonably be expected to have a Material Adverse Effect) of conflict with, any such rights of others. 6 2. Purchase and Offering of Offered Securities. The obligation of the Underwriters to purchase the Offered Securities will be evidenced by an agreement or exchange of other written communications ("Terms Agreement") at the time the Company determines, or, in the case of Offered Debt Securities, the Issuers determine, to sell the Offered Securities. The Terms Agreement may also amend, modify or supplement this Agreement as provided therein. The Terms Agreement will incorporate by reference the provisions of this Agreement, except as otherwise provided therein, and will specify the firm or firms which will be Underwriters, the names of any Representatives, the principal amount or number of Offered Securities to be purchased by each Underwriter, the purchase price to be paid by the Underwriters and (if the Offered Securities are debt securities or preferred stock) the terms of the Offered Securities not already specified (in the Indenture, in the case of Offered Securities that are debt securities), including, but not limited to, interest rate (if debt securities), dividend rate (if preferred stock), maturity (if debt securities), any redemption provisions and any sinking fund requirements. The Terms Agreement will also specify the time and date of delivery and payment (such time and date, or such other time not later than seven full business days thereafter as the Underwriter first named in the Terms Agreement (the "Lead Underwriter") and the Company, or, in the case of Offered Debt Securities, the Issuers, agree as the time for payment and delivery, being herein and in the Terms Agreement referred to as the "Time of Delivery") the place of delivery and payment and any details of the terms of offering that should be reflected in the Prospectus supplement relating to the offering of the Offered Securities. For purposes of Rule 15c6-1 under the Exchange Act, the Time of Delivery (if later than the otherwise applicable settlement date) shall be the date for payment of funds and delivery of securities for all the Offered Securities sold pursuant to the offering. The obligations of the Underwriters to purchase the Offered Securities will be several and not joint. It is understood that the Underwriters propose to offer the Offered Securities for sale as set forth in the Prospectus. If the Offered Securities are debt securities and the Terms Agreement specifies "Book- Entry Only" settlement or otherwise states that the provisions of this paragraph shall apply, the Issuers will deliver against payment of the purchase price the Offered Securities in the form of one or more permanent global securities in definitive form (the "Global Securities") deposited with the Trustee as custodian for The Depository Trust Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC. Interests in any permanent global securities will be held only in book-entry form through DTC, except in the limited circumstances described in the Prospectus. Payment for the Offered Securities shall be made by the Underwriters (if the Terms Agreement specifies that the Offered Securities will not trade in DTC's Same Day Funds Settlement System) by certified or official bank check or checks in New York Clearing House (next day) funds or (if the Terms Agreement specifies that the Offered Securities will trade in DTC's Same Day Funds Settlement System) in Federal (same day) funds by wire transfer to an account in New York previously designated to the Lead Underwriter by the Issuers at a bank acceptable to the Lead Underwriter, in each case drawn to the order of the Issuers at the place of payment specified in the Terms Agreement on the Closing Date, against delivery to the Trustee as custodian for DTC of the Global Securities representing all of the Offered Securities. 3. The Company agrees, or, in the case of Offered Debt Securities, the Issuers, jointly and severally, agree, with each of the Underwriters: (a) To prepare the Prospectus in a form approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of the Terms Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no further amendment or any supplement to the Registration Statement or Prospectus which shall be disapproved by the Representatives promptly after reasonable notice thereof; to advise the Representatives promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the 7 Representatives with copies thereof; to advise the Representatives promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Prospectus, of the suspension of the qualification of the Offered Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of the Prospectus or suspending any such qualification, to promptly use its best efforts to obtain the withdrawal of such order; (b) Promptly from time to time to take such action as the Representatives may reasonably request to qualify the Offered Securities for offering and sale under the securities laws of such jurisdictions as the Representatives may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Offered Securities, provided that in connection therewith the Company, or, in the case of Offered Debt Securities, any Issuer, shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (c) Prior to Noon, New York City time, on the New York Business Day next succeeding the date of the Terms Agreement and from time to time, to furnish the Underwriters with copies of the Prospectus in New York City in such quantities as the Representatives may reasonably request, and, if the delivery of the Prospectus is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Offered Securities and if at such time any events shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus in order to comply with the Act [For debt securities: or the Trust Indenture Act, or] to notify the Representatives and upon the request of the Representatives to prepare and furnish without charge to each Underwriter and to any dealer in securities as many copies as the Underwriters may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; and in case any Underwriter is required to deliver the Prospectus in connection with sales of any of the Offered Securities at any time nine months or more after the time of issue of the Prospectus, upon request of the Representatives but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many copies as the Representatives may request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act; (d) To make generally available to its securityholders as soon as practicable, but in any event not later than eighteen months after the date of the Terms Agreement, an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158); (e) During the period beginning at the time of the execution of the Terms Agreement and ending the number of days after the Time of Delivery specified under "Blackout" in the Terms Agreement, not to offer, sell, contract to sell or otherwise dispose of, except as provided hereunder and under the Terms Agreement any securities of the Company, or, in the case of Offered Debt Securities, the Issuers, that are substantially similar to the Offered Securities including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, any such substantially similar securities (other than (i) pursuant to employee stock option plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this Agreement and (ii) shares of common stock issuable in connection with the acquisition of Sun Apparel, Inc.), without your prior written consent; 8 (f) To cause each of the persons listed on a schedule to the Term Agreement to enter into a lock-up agreement with the Underwriters, in form and substance satisfactory to the Underwriters, providing that, during the period beginning at the time of execution of the Terms Agreement and ending the number of days after the Time of Delivery specified under "Blackout" in the Terms Agreement, such person will not offer, sell, contract to sell or otherwise dispose of, except as provided hereunder or under the Terms Agreement, any securities of the Company, or, in the case of Offered Debt Securities, the Issuers, that are substantially similar to the Offered Securities, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, the Offered Securities or any such substantially similar securities (other than pursuant to employee stock option plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of the Terms Agreement), without the prior written consent of the Underwriters; (g) During a period of three years from the effective date of the Registration Statement, to furnish to the Representatives upon written request copies of all reports or other communications (financial or other) furnished to shareholders, and to deliver to the Representatives upon written request as soon as they are available, (A) copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which the Offered Securities or any class of securities of the Company is listed [For debt securities: and (B) the documents specified in the Indenture as in effect at the Time of Delivery]; (h) To use the net proceeds received by it from the sale of the Offered Securities pursuant to this Agreement in the manner specified in the Prospectus under the caption "Use of Proceeds"; (i) If Offered Securities are common stock: To use its best efforts to list for quotation the Offered Securities on the New York Stock Exchange ("NYSE"); and (j) If the Company, or, in the case of Offered Debt Securities, each Issuer, elects to rely upon Rule 462(b), the Company, or, in the case of Offered Debt Securities, the Issuers, shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act. 4. The Company, or, in the case of Offered Debt Securities, each Issuer, covenants and agrees with the several Underwriters that the Company, or, in the case of Offered Debt Securities, the Issuers, will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company's, or, in the case of Offered Debt Securities, the Issuers', counsel and accountants in connection with the registration of the Offered Securities under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, the Terms Agreement, [If the Offered Securities are debt securities: the Indenture,] closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Offered Securities; (iii) all expenses in connection with the qualification of the Offered Securities for offering and sale under state securities laws as provided in Section 3 hereof, including the fees and disbursements of counsel for the Underwriters (not in excess, in the aggregate, of an amount specified in the Terms Agreement) in connection with such qualification; (iv) any fees charged by securities rating services for rating the Offered Securities] [If the Offered Securities are common stock: (v) all fees and expenses in connection with listing the Offered Securities on the NYSE]; (vi) the filing fees incident to securing any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Offered Securities; (vii) the cost of preparing certificates evidencing the Offered Securities; (viii) the fees and expenses [If the Offered Securities are debt securities: of the Trustee and any agent of the Trustee and 9 the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Offered Securities] [If the Offered Securities are common stock: any transfer agent or registrar]; and (ix) all other costs and expenses incident to the performance of its obligations hereunder and under the Terms Agreement which are not otherwise specifically provided for in this Section. It is understood, however, except as provided in this Section, and Sections 6 and 9 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Offered Securities by them, and any advertising expenses connected with any offers they may make. 5. Conditions of the Obligations of the Underwriters. The respective obligations of the Underwriters hereunder and under the Terms Agreement as to the Offered Securities to be delivered at each Time of Delivery, shall be subject, in the sole discretion of the Representatives, to the condition that all representations and warranties of the Company, or, in the case of Offered Debt Securities, the Issuers, herein are, at and as of the Time of Delivery, true and correct, the condition that the Company, or, in the case of Offered Debt Securities, the Issuers, shall have performed all of its or their obligations hereunder and under the Terms Agreement theretofore to be performed and the following additional conditions: (a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; if the Company has, or, in the case of Offered Debt Securities, the Issuers have, elected to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to the reasonable satisfaction of the Representatives as the case may be; (b) _________, counsel for the Underwriters, shall have furnished to the Representatives, such written opinion or opinions, dated the Time of Delivery, with respect to the matters covered in paragraphs (i), (ii) and (iii) and the paragraph following clause (vii) of subsection (c) below, paragraph (i) of subsection (d) below, and paragraph (i) of subsection (e) below as well as such other related matters as the Representatives, as the case may be, may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (c) Cravath, Swaine & Moore, as special New York counsel for the Company, or, in the case of Offered Debt Securities, the Issuers, shall have furnished to the Representatives, as the case may be, their written opinion, dated the Time of Delivery, in form and substance satisfactory to the Representatives, to the effect that: (i) The Registration Statement was declared effective under the Act as of the date and time specified in such opinion, the Prospectus was filed with the Commission pursuant to the sub- paragraph of Rule 424(b) of the Rules and Regulations specified in such opinion on the date specified therein and no stop order suspending the effectiveness of the Registration Statement has been issued and, to the knowledge of such counsel, no proceeding for that purpose is pending or threatened by the Commission; (ii) If the Offered Securities are debt securities: Assuming that the Indenture has been duly and validly authorized, executed and delivered by the Issuers and, assuming due authorization, execution and delivery by the Trustee, the Indenture constitutes the valid and binding agreement of the Issuers, enforceable against the Issuers in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and 10 other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding in equity or at law); and the Indenture has been duly qualified under the Trust Indenture Act; (iii) If the Offered Securities are debt securities: Assuming that the Offered Securities have been duly and validly authorized by the Issuers and when duly executed by the Issuers in accordance with the terms of the Indenture and, assuming due authentication of the Offered Securities by the Trustee, upon delivery to the Underwriters against payment therefor in accordance with the terms of the Terms Agreement, the Offered Securities will have been validly issued and delivered, and will constitute valid and binding obligations of the Issuers entitled to the benefits of the respective Indenture and enforceable against the Issuers in accordance with their terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether in a proceeding in equity or at law); (iv) No authorization, approval or other action by, and no notice to, consent of, order of, or filing with, any United States Federal, New York or, to the extent required under the General Corporation Law of the State of Delaware, Delaware governmental authority or regulatory body is required for the consummation of the transactions contemplated by this Agreement or the Terms Agreement, except such as have been obtained under the Act or the Trust Indenture Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Offered Securities by the Underwriters; (v) None of the issue and sale of the Offered Securities, the consummation of any other of the transactions contemplated by this Agreement or the Terms Agreement or the performance of the terms of this Agreement or the Terms Agreement (i) will conflict with, result in a breach of, or constitute a default under, the articles or by-laws of the Company or any of its subsidiaries, or the terms of any indenture or other agreement or instrument to which the Company or any of its subsidiaries is a party or bound and listed as an exhibit to the Company's most recent Annual Report on Form 10-K or any subsequent Commission filings, except as would not have a Material Adverse Effect or (ii) will contravene in any material respect any law, rule or regulation of the United States or the State of New York or the General Corporation Law of the State of Delaware, or, to our knowledge, any order or decree of any court or government agency or instrumentality. In connection with the foregoing, we point out that certain of the agreements referred to in clause (i) above are or may be governed by laws other than the laws of the State of New York. For purposes of the opinion expressed in this paragraph, however, we have assumed that all such agreements are governed by and would be interpreted in accordance with the laws of the State of New York; (vi) The statements made in the Prospectus under the caption "Description of Debt Securities", insofar as they purport to constitute summaries of the terms of the debt securities and under the caption "Certain United States Federal Income Tax Considerations," insofar as they purport to describe the material tax consequences of an investment in the Offered Securities, fairly summarize the matters therein described; (vii) The Company, or, in the case of Offered Debt Securities, each Issuer, is not and, upon sale of the Offered Securities to be issued and sold thereby in accordance herewith and the application of the net proceeds to the Company, or, in the case of Offered Debt Securities, the Issuers, of such sale as described in the Prospectus under the caption "Use of Proceeds," will not be an "investment company" within the meaning of the Investment Company Act. 11 In addition, such counsel shall also state that such counsel has participated in conferences with certain officers of, and with the accountants and counsel for the Company, or, in the case of Offered Debt Securities, the Issuers, and with certain representatives of, and counsel for, the Underwriters, concerning the preparation of the Registration Statement and the Prospectus and that although such counsel has made certain inquiries and investigations in connection with the preparation of the Registration Statement and Prospectus, the limitations inherent in the role of outside counsel are such that such counsel cannot and does not assume responsibility for the accuracy or completeness of the statements made in the Registration Statement and Prospectus, except insofar as such statements relate to such counsel and except to the extent set forth in clause (vi) above. Subject to the foregoing, such counsel shall advise you that its work in connection with this matter did not disclose any information that gave such counsel reason to believe that the Registration Statement at the time the Registration Statement was last amended or deemed to be amended or the Prospectus, as of its date or as of the Time of Delivery (in each case except for the financial statements and other information of a statistical, accounting or financial nature included or incorporated by reference therein, [If the Offered Securities are debt securities: and the Statement of Eligibility (Form T-1) included as an exhibit to the Registration Statement,] as to which we do not express any view), was not appropriately responsive in all material respects to the requirements of the Act [If the Offered Securities are debt securities: and the Trust Indenture Act] and the Rules and Regulations or the Registration Statement, at the time it became effective was last amended or deemed to be amended, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus, at the Time of Delivery, includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (in each case except for the financial statements and other information of a statistical, accounting or financial nature included therein, as to which such counsel does not express any view). The opinion of such counsel may be limited to the laws of the State of New York, the General Corporation Law of the State of Delaware and the Federal laws of the United States. (d) Ira M. Dansky, Esq., general counsel to the Company, shall have furnished to the Representatives, as the case may be, his written opinion, dated such Time of Delivery, in form and substance reasonably satisfactory to the Representatives, to the effect that: (i) Each of Jones Holdings and Nine West has been duly incorporated and is validly existing as a corporation under the laws of the State of Delaware (which opinion may be based solely on a certificate of the Secretary of State of Delaware), and has all requisite corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Prospectus. Each of the Company and its subsidiaries is qualified as a foreign corporation to transact business and is in good standing (which opinion may be based solely on a certificate of the Secretary of State of such state) in each jurisdiction in which the ownership or leasing of its properties or the conduct of its business requires such qualification, other than jurisdictions where the failure to so qualify would not have a Material Adverse Effect; (ii) All of the outstanding shares of capital stock of the Company's direct and indirect subsidiaries have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of any material lien, charge, encumbrance, security interest, restriction upon voting or any claim of third parties, except as set forth in the Registration Statement or the Prospectus (including the exhibits thereto); (iii) To such counsel's knowledge, there is no pending or threatened action, suit or proceeding before any court or governmental agency or authority or arbitrator involving the Company or any of its subsidiaries or the business, assets or rights of the Company or any of its subsidiaries (i) that purports to affect the legality, validity or enforceability of this Agreement or 12 the Terms Agreement or (ii) as to which there is a probability of an adverse determination and which, if adversely determined, would be likely in such counsel's judgment to have a Material Adverse Effect on the ability of the Company or any of its subsidiaries to perform their obligations under this Agreement or the Terms Agreement; (iv) To the knowledge of such counsel, except as described in the Prospectus there are no contracts, agreements or understandings between the Company or any of its subsidiaries (other than as set forth in the Terms Agreement), and any person granting such person the right to require the Company or any of its subsidiaries to file a registration statement under the Act with respect to any securities of the Company, or, in the case of Offered Debt Securities, the Issuers, owned or to be owned by such person or to require the Company or any of its subsidiaries to include such securities in the securities registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company or any of its subsidiaries; (v) To such counsel's knowledge, no authorization, approval or other action by, and no notice to, consent of, order of or filing with, any United States Federal or New York governmental authority or regulatory body is required for the consummation of the transactions contemplated by this Agreement or the Terms Agreement, except as required under the Act, [If the Offered Securities are debt securities: the Trust Indenture Act] or the blue sky laws of any jurisdiction or except such as have been obtained; (vi) None of the issuance and sale of Offered Securities, the consummation of any other of the transactions contemplated by this Agreement or the Terms Agreement or the performance of the terms hereof or of the Terms Agreement will (i) conflict with, result in a breach of, or constitute a default under (A) the articles or by-laws of the Company or any of its subsidiaries, or (B) to such counsel's knowledge, the terms of any indenture or any other material agreement or instrument to which the Company or any of its subsidiaries is a party or bound, except as would not have a Material Adverse Effect, or (ii) contravene in any material respect any law, rule or regulation of the United States or the State of New York or, to such counsel's knowledge, any order or decree of any court or government agency or instrumentality in each case, applicable to the Company or any of its subsidiaries; (vii) The Statements made in the Prospectus under the caption "Description of Capital Stock," insofar as they purport to constitute summaries of the terms of the capital stock, fairly summarize the matters therein described; (viii) If the Offered Securities are common stock: The Offered Securities have been duly and validly authorized, and, when issued and delivered to and paid for by the Underwriters pursuant to this Agreement and the Terms Agreement, will be validly issued, fully paid and nonassessable; and (ix) If Offered Debt Securities: This Agreement and the Terms Agreement have been duly and validly authorized, executed and delivered by Jones Holdings and Nine West. The opinion of such counsel may be limited to the laws of the State of New York, the General Corporation Law of the State of Delaware and the Federal laws of the United States. 13 (e) Schnader Harrison Segal & Lewis, as special Pennsylvania counsel, shall have furnished to the Representatives, as the case may be, their written opinion, dated the Time of Delivery, in form and substance reasonably satisfactory to the Representatives, to the effect that: (i) The Company and Jones USA (collectively, the "Pennsylvania Issuers") are corporations organized and validly subsisting under the laws of the Commonwealth of Pennsylvania, and have the requisite corporate power and authority to own and hold under lease their property and to conduct their business as currently conducted by the Company and Jones USA; (ii) This Agreement and the Terms Agreement has been duly and validly authorized, executed and delivered by the Company [If the Offered Securities are debt securities: the Pennsylvania Issuers]; (iii) The execution, delivery and performance by the Company [If the Offered Securities are debt securities: the Pennsylvania Issuers] of this Agreement and the Terms Agreement, the issuance, authentication, sale and delivery of the Offered Securities and compliance by the Company [If the Offered Securities are debt securities: the Pennsylvania Issuers] with the terms thereof and the consummation of the transactions contemplated by this Agreement and the Terms Agreement will not result in any violation of any Pennsylvania statute or any published judgment, order or decree issued by a Pennsylvania court binding on such Pennsyvania Issuers and of which such counsel has knowledge, any published rule or regulation of any Pennsylvania governmental agency or any other Pennsylvania body having jurisdiction over the Company [If the Offered Securities are debt securities: the Pennsylvania Issuers] or any of its properties or assets, and no consent, approval, authorization or order of, or filings or registration with, any such governmental agency or body under any such statute, judgment, order, decree, rule or regulation is required for the execution, delivery and performance by the Company of this Agreement and the Terms Agreement, the issuance, authentication, sale and delivery of the Offered Securities and compliance by the Company [If the Offered Securities are debt securities: the Pennsylvania Issuers] with the terms thereof and the consummation of the transactions contemplated by this Agreement and the Terms Agreement, except for such consents, approvals, authorizations, filings, registrations or qualifications (i) which have been obtained or made prior to the closing of any such sale, and (ii) as may be required to be obtained or made under the Act and applicable state securities laws; (iv) To such counsel's knowledge, there are no pending or overtly threatened actions or suits or judicial, arbitral, administrative or other proceedings within the Commonwealth of Pennsylvania to which the Company [If the Offered Securities are debt securities: the Pennsylvania Issuers], is a party or of which any property or assets of the Company [If the Offered Securities are debt securities: the Pennsylvania Issuers] is the subject which (i) singularly or in the aggregate if determined adversely, to the Company [If the Offered Securities are debt securities: the Pennsylvania Issuers], could reasonably be expected to have a Material Adverse Effect, or (ii) questions the validity or enforceability of this Agreement or the Terms Agreement or any action taken or be taken pursuant thereto. The opinion of such counsel may be limited to the laws of the State of Pennsylvania and the Federal laws of the United States. (f) On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the effective date of any post-effective amendment to the Registration Statement filed subsequent to the date of the Terms Agreement and also at the Time of Delivery, BDO Seidman, LLP shall have furnished to the Representatives a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to the Representatives; 14 (g) Neither the Company nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included in the Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus, and (ii) since the respective dates as of which information is given in the Prospectus there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or contemplated in the Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Offered Securities on the terms and in the manner contemplated in the Prospectus; (h) On or after the date of the Terms Agreement (i) no downgrading shall have occurred in the rating accorded the Issuers' debt securities or the Company's preferred stock by any nationally recognized statistical rating organization, as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Issuers' debt securities or the Company's preferred stock; (i) On or after the date of the Terms Agreement there shall not have occurred any of the following: (i) a material suspension or material limitation in trading in securities generally on the NYSE or on NASDAQ; (ii) a material suspension or material limitation in trading in the Company's securities on the NYSE; (iii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities; or (iv) the outbreak or escalation of major hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such event specified in this clause (iv) in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Offered Securities on the terms and in the manner contemplated in the Prospectus; (j) If the Offered Securities are common stock: At the Time of Delivery the New York Stock Exchange shall have approved the Offered Securities to be sold by the Company for inclusion, subject only to official notice of issuance and evidence of satisfactory distribution; (k) If the Offered Securities are common stock: The Company has obtained and delivered to the Underwriters executed copies of an agreement from the persons identified in a schedule to the Terms Agreement to the effect set forth in Subsection 3(f) hereof in form and substance satisfactory to the Representatives; (l) The Company shall have complied with the provisions of Section 3(c) hereof with respect to the furnishing of Prospectuses on the New York Business Day next succeeding the date of the Terms Agreement; and (m) The Company, or, in the case of Offered Debt Securities, the Issuers, shall have furnished or caused to be furnished to the Representatives at the Time of Delivery certificates of officers of the Company, or, in the case of Offered Debt Securities, the Issuers, satisfactory to the Representatives as to (i) the accuracy of the representations and warranties of the Company, or, in the case of Offered Debt Securities, the Issuers, herein at and as of such Time of Delivery, (ii) the performance in all material respects by the Company, or, in the case of Offered Debt Securities, the Issuers, of all of its or their obligations hereunder and under the Terms Agreement to be performed at or prior to such Time of Delivery, (iii) the absence of untrue statements of material facts or omissions of material facts required to be stated or 15 necessary to make statements not misleading in the Registration Statement and the Prospectus, (iv) absence of events since the Effective Date which should be set forth in a supplement or amendment to the Registration Statement and the Prospectus, and (v) such other matters as the Underwriter may reasonably request and the Company shall have furnished or caused to be furnished certificates as to the matters set forth in subsections (a) and (h) of this Section and as to such other matters as the Representatives may reasonably request. 6. Indemnifications. (a) The Company, or, in the case of Offered Debt Securities, the Issuers, jointly and severally, will indemnify and hold harmless each Underwriter, their respective officers and employees and each person, if any, who controls any Underwriter within the meaning of the Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, but not limited to, any loss, claim, damage, liability or action relating to purchases and sales of Offered Securities), to which that Underwriter, officer, employee or controlling person may become subject, under the Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon: any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus or in any amendment or supplement thereto, or the omission or alleged omission to state in the Prospectus or in any amendment or supplement thereto, any material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse each Underwriter, and each such officer, employee or controlling person promptly upon demand for any legal or other expenses reasonably incurred by that Underwriter, officer, employee or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim damage, liability or action as such expenses are incurred; provided, however, that the Company, or, in the case of Offered Debt Securities, the Issuers, shall not be liable in any such case to the extent that any such loss, claim, damage, liability, or action arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information concerning such Underwriter furnished to the Company, or, in the case of Offered Debt Securities, the Issuers, by any Representatives by or on behalf of any Underwriter specifically for inclusion therein; provided further that the Company, or, in the case of Offered Debt Securities, the Issuers, shall not be liable to any Underwriter under the indemnity agreement in this paragraph 6(a) with respect to the Prospectus to the extent that any such loss, claim, damage or liability of such Underwriters results from the fact that such Underwriter sold Offered Securities to a person as to whom there was not sent or given, at or prior to written confirmation of such sale, a copy of the Prospectus as then amended or supplemented if the Company, or, in the case of Offered Debt Securities, the Issuers, had previously furnished copies thereof in the quantity requested and in a timely manner in accordance with Section 3(c) hereof to such Underwriter and the loss, claim, damage or liability of such Underwriter results from an untrue statement or omission of a material fact contained in the Registration Statement and corrected in the Prospectus as amended or supplemented. (b) Each Underwriter, severally and not jointly, shall indemnify and hold harmless the Company, or, in the case of Offered Debt Securities, the Issuers, its or their officers who sign the Registration Statement, each of its or their directors (including any person who, with his or her consent, is named in the Registration Statement or the Prospectus as about to become a director of the Company, or, in the case of Offered Debt Securities, the Issuers), and each person, if any, who controls the Company, or, in the case of Offered Debt Securities, the Issuers, within the meaning of the Act, from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof, to which the Company, or, in the case of Offered Debt Securities, the Issuers, or any such director, officer or controlling person may become subject, under the Act or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus or in any amendment or supplement thereto or (ii) the omission or alleged omission to state in the Registration Statement or the Prospectus, or in any amendment or 16 supplement thereto, any material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning such Underwriter furnished to the Company, or, in the case of Offered Debt Securities, the Issuers, through the Representatives by or on behalf of that Underwriter specifically for inclusion therein, and shall reimburse the Company, or, in the case of Offered Debt Securities, the Issuers, and any such director, officer or controlling person for any legal or other expenses reasonably incurred by the Company, or, in the case of Offered Debt Securities, the Issuers, or any such director, officer or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability or action as such expenses are incurred. The foregoing indemnity agreement is in addition to any liability which any Underwriter may otherwise have to the Company, or, in the case of Offered Debt Securities, the Issuers, or any such director, officer, employee or controlling person. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the claim or the commencement thereof; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this section except to the extent it has been materially prejudiced by such failure, and provided further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party other wise than under such subsection. In case any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof, with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under such subsection for any legal or other expenses, subsequently incurred by the indemnified party, in connection with the defense thereof; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have in good faith reasonably concluded that there may be defenses available to it which are different from or additional to those available to the indemnifying party or if the interests of the indemnified party may be deemed to conflict with the interests of the indemnifying party, the indemnified party shall have the right to select a separate counsel in the defense of such action, with the expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the indemnifying party as incurred; provided further that in no event shall the foregoing proviso require the indemnifying party to bear the fees and expenses of more than one separate counsel, in addition to local counsel, for each of the following classes of parties hereto: (i) the Representatives and those other Underwriters and their respective officers, employees and controlling persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought under this Section 6 and (ii) the Company and its subsidiaries, or, in the case of Offered Debt Securities, the Issuers. No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment to the extent provided in this Section 6. (d) If the indemnification provided for in this Section 6 shall for any reason be unavail- 17 able to or insufficient (other than by reason of the exceptions provided therein) to hold harmless an indemnified party under subsection (a) or (b) above in respect of any loss, claim, damage or liability, or any action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by each party to the Terms Agreement from the offering of the Offered Securities or (ii) if the allocation provided by the clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of each party to the Terms Agreement with respect to the statements or omissions which resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company, or, in the case of Offered Debt Securities, the Issuers, and the Underwriters with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Offered Securities purchased under this Agreement (before deducting expenses) received by the Company, or, in the case of Offered Debt Securities, the Issuers, and the total underwriting discounts and commissions received by the Underwriters with respect to the Offered Securities purchased under the Terms Agreement as set forth in the table on the cover page of the Prospectus, bear to the sum of the total proceeds from the sale of the Offered Securities (before deducting expenses) in the offering. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, or, in the case of Offered Debt Securities, the Issuers, or the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, or, in the case of Offered Debt Securities, the Issuers, and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation or by any other method of allocation which does not take into account of the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability or action in respect thereof, referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Offered Securities underwritten by it and distributed to the public was offered to the public, exceeds the amount of any damages which such Underwriter, as the case may be, has otherwise been required to pay or become liable to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint. (e) As used herein, the phrase "actual knowledge" means, with respect to any natural person, the actual knowledge of such person and, with respect to any other person, the actual knowledge of any natural person exercising control (whether by ownership or management) over such person, and shall not imply any duty to investigate or be deemed to include any knowledge that might have become actually known following investigation. The phrase "actually known" shall have a correlative meaning. (f) The obligations of the Company, or, in the case of Offered Debt Securities, the Issuers, under this Section 6 shall be in addition to any liability which the Company, or, in the case of Offered Debt Securities, the Issuers, may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; the obligations of the Underwriters under this Section 6 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company, or, in the case of Offered Debt Securities, of the Issuers, (including any person who, with his or her consent, is named in the Registration Statement or the Prospectus as about to become a 18 director of the Company or, in the case of Offered Debt Securities, the Issuers), and to each person, if any, who controls the Company, or, in the case of Offered Debt Securities, the Issuers, within the meaning of the Act. 7. Defaulting Underwriters. (a) If any Underwriter shall default in its obligation to purchase the Offered Securities which it has agreed to purchase under the Terms Agreement, at the Time of Delivery, the Representatives may in their discretion arrange for the Representatives or another party or other parties to purchase such Offered Securities on the terms contained herein. If within thirty-six hours after such default by any Underwriter the Representatives do not arrange for the purchase of such Offered Securities, then the Company, or, in the case of Offered Debt Securities, the Issuers, shall be entitled to a further period of thirty-six hours within which to procure another party or other parties reasonably satisfactory to the Representatives to purchase such Offered Securities on such terms. In the event that, within the respective prescribed periods, the Representatives notify the Company, or, in the case of Offered Debt Securities, the Issuers, that they have so arranged for the purchase of such Offered Securities, or the Company notifies, or, in the case of Offered Debt Securities, the Issuers notify, the Representatives that it has or they have so arranged for the purchase of such Offered Securities, the Representatives or the Company, or, in the case of Offered Debt Securities, the Issuers, shall have the right to postpone the Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company agrees, or, in the case of Offered Debt Securities, the Issuers agree, to file promptly any amendments to the Registration Statement or the Prospectus which in the opinion of the Representatives may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Offered Securities. (b) If, after giving effect to any arrangements for the purchase of the Offered Securities of a defaulting Underwriter or Underwriters by the Representatives and the Company, or, in the case of Offered Debt Securities, the Issuers, as provided in subsection (a) above, the aggregate number of such Offered Securities which remains unpurchased does not exceed one-tenth of the aggregate principal amount or gross proceeds, as applicable, of all the Offered Securities to be purchased at such Time of Delivery, then the Company, or, in the case of Offered Debt Securities, the Issuers, shall have the right to require each non-defaulting Underwriter to purchase the number of Offered Securities which such Underwriter agreed to purchase under the Terms Agreement at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Offered Securities which such Underwriter agreed to purchase under the Terms Agreement) of the Offered Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Offered Securities of a defaulting Underwriter or Underwriters by the Representatives and the Company, or, in the case of Offered Debt Securities, the Issuers, as provided in subsection (a) above, the aggregate principal amount or gross proceeds, as applicable, of Offered Securities which remains unpurchased exceeds one-tenth of the aggregate principal amount or gross proceeds, as applicable, of all the Offered Securities, or if the Company, or, in the case of Offered Debt Securities, the Issuers, shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Offered Securities of a defaulting Underwriter or Underwriters, then this Agreement shall thereupon terminate, without liability on the part of any non-defaulting Underwriter, the Company, or, in the case of Offered Debt Securities, the Issuers, except for the expenses to be borne by the Company, or, in the case of Offered Debt Securities, the Issuers, and the Underwriters as provided in Section 5 hereof and the indemnity and contribution agreements in Section 6 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 19 8. Survival. The respective indemnities, agreements, representations, warranties and other statements of the Company, or, in the case of Offered Debt Securities, the Issuers, and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement and the Terms Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter or the Company, or, in the case of Offered Debt Securities, the Issuers, or any officer or director or controlling person of the Company, or, in the case of Offered Debt Securities, the Issuers, and shall survive delivery of and payment for the Offered Securities. 9. Reimbursement of Underwriting Expenses. If this Agreement shall be terminated pursuant to Section 7 hereof, neither the Company, or, in the case of Offered Debt Securities, the Issuers, shall then be under any liability to any Underwriter except as provided in Sections 5 and 6 hereof; but, if for any other reason, the Offered Securities are not delivered by or on behalf of the Company, or, in the case of Offered Debt Securities, the Issuers, as provided herein, the Company, or, in the case of Offered Debt Securities, the Issuers, will reimburse the Underwriters through the Representatives for all out-of-pocket expenses approved in writing by the Representatives, including fees and disbursements of counsel, reason ably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Offered Securities not so delivered, but the Company, or, in the case of Offered Debt Securities, the Issuers, shall then be under no further liability to any Underwriter except as provided in and Sections 5 and 6 hereof. 10. Notices, etc. In all dealings hereunder and under the Terms Agreement, the Representatives shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by the Representatives jointly or by the Lead Underwriter on behalf of the Representatives. All statements, requests, notices, and agreements hereunder and under the Terms Agreement shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or fac simile transmission to the Representatives at the address specified in the Terms Agreement; and if to the Company, or, in the case of Offered Debt Securities, to the Issuers, shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 6(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire, or which address will be supplied to the Company, or, in the case of Offered Debt Securities, the Issuers, by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. The Company, or, in the case of Offered Debt Securities, the Issuers, shall be entitled to act and rely upon any request, consent, notice or agreement given or made on behalf of the Underwriters by any of the Representatives. 11. Persons Entitled to Benefit of Agreement. This Agreement and the Terms Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company or, in the case of Offered Debt Securities, the Issuers, to the extent provided in Sections 6 and 8 hereof, the officers and directors of the Company, or, in the case of Offered Debt Securities, the Issuers, and each person who controls the Company, or, in the case of Offered Debt Securities, the Issuers, any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Offered Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 12. Time of the Essence. Time shall be of the essence of this Agreement and the Terms Agreement. As used herein, the term "business day" shall mean any day on which the New York Stock Exchange, Inc. is open for trading. 13. Governing Law. This Agreement and the Terms Agreement shall be governed by and 20 construed in accordance with the laws of the State of New York without giving effect to any provisions relating to conflicts of law. 14. Counterparts. This Agreement and the Terms Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 15. Headings. The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. Very truly yours, JONES APPAREL GROUP, INC., By: Name: ---------------------------- Title: JONES APPAREL GROUP HOLDINGS, INC., By: Name: ---------------------------- Title: JONES APPAREL GROUP USA, INC., By: Name: ---------------------------- Title: NINE WEST GROUP INC., By: Name: ---------------------------- Title: EX-4.2 3 0003.txt FORM OF INDENTURE EXHIBIT 4.2 JONES APPAREL GROUP, INC., JONES APPAREL GROUP HOLDINGS, INC., JONES APPAREL GROUP USA, INC., and NINE WEST GROUP INC., as Issuers and THE BANK OF NEW YORK as Trustee INDENTURE Dated as of _________, __________ $ __________ Table Showing Reflection in Indenture of Certain Provisions of Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990* ---------------------- Reflected in Indenture ---------------------- Trust Indenture Act Section Indenture Section Indenture Section 310 (a) (1)..................................... 7.10 (a) (2)..................................... 7.10 (a) (3)..................................... N.A. (a) (4)..................................... N.A. (a) (5)..................................... 7.10 (b)......................................... 7.10 (c)......................................... N.A. 311 (a)......................................... 7.11 (b)......................................... 7.11 (c)......................................... N.A. 312 (a)......................................... 2.06 (b)......................................... 10.03 (c)......................................... 10.03 313 (a)......................................... 7.06 (b) (1)..................................... N.A. (b) (2)..................................... 7.06 (c)......................................... 7.06; 10.02 (d)......................................... 7.06 314 (a)......................................... 4.02; 4.08; 10.02 (b)......................................... N.A. (c) (1)..................................... 10.04 (c) (2)..................................... 10.04 (c) (3)..................................... N.A. (d)......................................... N.A. (e)......................................... 10.05 (f)......................................... N.A. 315 (a)......................................... 7.01 (b)......................................... 7.05; 10.02 (c)......................................... 7.01 (d)......................................... 7.01 (e)......................................... 6.11 316 (a)......................................... 2.09 (a)(1)(A)................................... 6.05 (a)(1)(B)................................... 6.04 (a)(2)...................................... N.A. (b)......................................... 6.07 (c)......................................... 2.13 317 (a)(1)...................................... 6.08 (a)(2)...................................... 6.09 (b)......................................... 2.05 318 (a)......................................... 10.01 (b)......................................... N.A. (c)......................................... 10.01 N.A. means not applicable. * This Cross Reference Table is not part of the Indenture. TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions.................................................1 SECTION 1.02. Other Definitions...........................................6 SECTION 1.03. Incorporation by Reference of Trust Indenture Act...........7 SECTION 1.04. Rules of Construction.......................................7 ARTICLE 2 THE SECURITIES SECTION 2.01. Issuable in Series..........................................7 SECTION 2.02. Establishment of Terms of Series of Securities..............8 SECTION 2.03. Execution and Authentication...............................10 SECTION 2.04. Registrar and Paying Agent.................................11 SECTION 2.05. Paying Agent to Hold Money in Trust........................12 SECTION 2.06. Holder Lists...............................................12 SECTION 2.07. Transfer and Exchange......................................12 SECTION 2.08. Mutilated, Destroyed, Lost and Stolen Securities...........13 SECTION 2.09. Outstanding Securities.....................................13 SECTION 2.10. Treasury Securities........................................14 SECTION 2.11. Temporary Securities.......................................14 SECTION 2.12. Cancellation...............................................14 SECTION 2.13. Defaulted Interest.........................................14 SECTION 2.14. Global Securities..........................................15 SECTION 2.15. CUSIP Numbers..............................................16 i ARTICLE 3 REDEMPTION SECTION 3.01. Notices to Trustee.........................................16 SECTION 3.02. Selection of Securities To Be Redeemed.....................16 SECTION 3.03. Notice of Redemption.......................................17 SECTION 3.04. Effect of Notice of Redemption.............................17 SECTION 3.05. Deposit of Redemption Price................................17 SECTION 3.06. Securities Redeemed in Part................................18 ARTICLE 4 COVENANTS SECTION 4.01. Payment of Securities......................................18 SECTION 4.02. SEC Reports................................................18 SECTION 4.03. Corporate Existence........................................18 SECTION 4.04. Restrictions on Liens......................................19 SECTION 4.05. Restrictions on Sale and Leaseback Transactions............21 SECTION 4.06. Exempted Debt..............................................22 SECTION 4.07. Waiver of Certain Covenants................................22 SECTION 4.08. Compliance Certificate.....................................22 SECTION 4.09. Further Instruments and Acts...............................22 ARTICLE 5 SUCCESSOR COMPANIES SECTION 5.01. Merger and Consolidation...................................23 ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. Events of Default..........................................24 SECTION 6.02. Acceleration...............................................25 SECTION 6.03. Other Remedies.............................................26 ii SECTION 6.04. Waiver of Past Defaults....................................26 SECTION 6.05. Control by Majority........................................26 SECTION 6.06. Limitation on Suits........................................27 SECTION 6.07. Rights of Holders to Receive Payment.......................27 SECTION 6.08. Collection Suit by Trustee.................................27 SECTION 6.09. Trustee May File Proofs of Claim...........................27 SECTION 6.10. Priorities.................................................28 SECTION 6.11. Undertaking for Costs......................................28 SECTION 6.12 Waiver of Stay or Extension Laws...........................28 ARTICLE 7 TRUSTEE SECTION 7.01. Duties of Trustee..........................................29 SECTION 7.02. Rights of Trustee..........................................30 SECTION 7.03. Individual Rights of Trustee...............................31 SECTION 7.04. Trustee's Disclaimer.......................................31 SECTION 7.05. Notice of Defaults.........................................31 SECTION 7.06. Reports by Trustee to Holder...............................31 SECTION 7.07. Compensation and Indemnity.................................31 SECTION 7.08. Replacement of Trustee.....................................32 SECTION 7.09. Successor Trustee by Merger................................33 SECTION 7.10. Eligibility; Disqualification..............................33 SECTION 7.11. Preferential Collection of Claims Against Issuers..........33 ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance...33 iii SECTION 8.02. Legal Defeasance and Discharge.............................34 SECTION 8.03. Covenant Defeasance........................................34 SECTION 8.04. Conditions to Legal or Covenant Defeasance.................35 SECTION 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions............36 SECTION 8.06. Repayment to Issuers.......................................37 SECTION 8.07. Reinstatement..............................................37 ARTICLE 9 AMENDMENTS SECTION 9.01. Without Consent of Holders.................................37 SECTION 9.02. With Consent of Holders....................................39 SECTION 9.03. Compliance with Trust Indenture Act........................40 SECTION 9.04. Revocation and Effect of Consents and Waivers..............40 SECTION 9.05. Notation on or Exchange of Securities......................40 SECTION 9.06. Trustee To Sign Amendments.................................40 SECTION 9.07. Payment for Consent........................................41 ARTICLE 10 MISCELLANEOUS SECTION 10.01. Trust Indenture Act Controls..............................41 SECTION 10.02. Notices...................................................41 SECTION 10.03. Communication by Holders with Other Holders...............42 SECTION 10.04. Certificate and Opinion as to Conditions Precedent........42 SECTION 10.05. Statements Required in Certificate or Opinion.............42 SECTION 10.06. When Securities Disregarded...............................42 SECTION 10.07. Rules by Trustee, Paying Agent and Registrar..............43 SECTION 10.08. Legal Holidays............................................43 iv SECTION 10.09. Governing Law.............................................43 SECTION 10.10. No Recourse Against Others................................43 SECTION 10.11. Successors................................................43 SECTION 10.12. Multiple Originals........................................43 SECTION 10.13. Table of Contents; Headings...............................43 SECTION 10.14. Severability..............................................43 v INDENTURE, dated as of ________, ________, by and among JONES APPAREL GROUP, INC., a Pennsylvania corporation, JONES APPAREL GROUP HOLDINGS, INC., a Delaware corporation, JONES APPAREL GROUP USA, INC., a Pennsylvania corporation, NINE WEST GROUP INC., a Delaware corporation (collectively, the "Issuers"), and THE BANK OF NEW YORK, a New York State banking corporation, as trustee (the "Trustee"). Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Securities issued under this Indenture (the "Securities"): ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions. "Affiliate" of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent" means any Registrar, Paying Agent or co-registrar. "Attributable Debt" in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value (discounted at the actual rate of interest of such transaction) of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended or may, at the option of the lessor, be extended). The term "net rental payments" under any lease for any period shall mean the sum of the rental and other payments required to be paid in such period by the lessee thereunder, not including, however, any amounts required to be paid by such lessee (whether or not designated as rental or additional rental) on account of maintenance and repairs, insurance, taxes, assessments, water rates or similar charges required to be paid by such lessee thereunder or any amounts required to be paid by such lessee thereunder contingent upon the amount of sales, maintenance and repairs, insurance, taxes, assessments, water rates or similar charges. In the case of any lease which is terminable by the lessee upon the payment of a penalty, such net amount shall also include the amount of such penalty, but no rent shall be considered as required to be paid under such lease subsequent to the first date upon which it may be so terminated without payment of such penalty. "Board of Directors" means the Board of Directors of the applicable Issuer or any committee thereof duly authorized to act on behalf of the Board of Directors of such Issuer. "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of each Issuer to have been adopted by the applicable Board of 1 Directors or pursuant to authorization by such Board of Directors and to be in full force and effect on the date of the certificate and delivered to the Trustee. "Business Day" means each day which is not a Legal Holiday. "Capital Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock, but excluding any debt securities convertible into such equity. "Clearstream" means Clearstream Banking, societe anonyme. "Closing Date" means the date of this Indenture. "Code" means the Internal Revenue Code of 1986, as amended. "Company" means Jones Apparel Group, Inc., a Pennsylvania corporation, until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Consolidated Net Tangible Assets" means, as of any date of determination, the total amount of assets of the Issuers and their respective Subsidiaries (less applicable reserves and other properly deductible items) after deducting (1) all current liabilities (excluding the amount of those which are by their terms extendable or renewable at the option of the obligor to a date more than 12 months after the date as of which the amount is being determined and excluding all intercompany items between an Issuer and any of its wholly-owned Subsidiaries or between Issuers or wholly-owned Subsidiaries of Issuers) and (2) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangible assets, all as determined on a consolidated basis in accordance with GAAP. "Consolidated Shareholders' Equity" means consolidated shareholders' equity of the Issuers and their respective Subsidiaries as determined in accordance with GAAP and reflected on the Issuers' most recent balance sheet. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Definitive Securities" means a certificated Security registered in the name of the Holder thereof and issued in accordance with Section 2.11 hereof. "Depositary" means, with respect to the Securities issuable in whole or in part in global form, the Person specified pursuant to Section 2.14 hereof as the initial Depositary with respect to the Securities, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter "Depositary" shall mean or include such successor. 2 "Dollar" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debt. "Euroclear" means the Euroclear System. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Foreign Currency" means any currency or currency unit issued by a government other than the government of the United States of America. "Funded Debt" means Indebtedness, whether incurred, assumed or guaranteed, maturing by its terms more than one year from the date of creation thereof or which is extendable or renewable at the sole option of the obligor in such manner that it may become payable more than one year from the date of creation thereof, provided, however, that Funded Debt shall not include obligations created pursuant to leases, or any Indebtedness or portion thereof maturing by its terms within one year from the time of any computation of the amount of outstanding Funded Debt unless such Indebtedness shall be extendable or renewable at the sole option of the obligor in such manner that it may become payable more than one year from such time, or any Indebtedness for the payment or redemption of which money in the necessary amount shall have been deposited in trust either at or before the maturity or redemption date thereof. "GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time, including those principles set forth in (i) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, (ii) statements and pronouncements of the Financial Accounting Standards Board, (iii) such other statements by such other entity as approved by a significant segment of the accounting profession and (iv) the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC. All ratios and computations based on GAAP contained in this Indenture shall be computed in conformity with GAAP. "Global Security" when used with respect to any Series of Securities issued hereunder, means a Security which is executed by the Issuers and authenticated and delivered by the Trustee to the Depository or pursuant to the Depository's instruction, all in accordance with this Indenture and an indenture supplemental hereto, if any, or Board Resolution and pursuant to an Issuer Request, which shall be registered in the name of the Depository or its nominee and which shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all the outstanding Securities of such Series or any portion thereof, in either case having the same terms, including, without limitation, the same original issue date, date or dates on which principal is due, and interest rate or method of determining interest and which shall bear the legend as prescribed by Section 2.14(c). "Global Securities Legend" means the legend set forth in Section 2.14(c), which is required to be placed on all Global Securities issued under this Indenture. 3 "Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America, and the payment for which the United States pledges its full faith and credit. "Guarantee" means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner (including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof), of all or any part of any Indebtedness. The term "Guarantor" shall mean any Person Guaranteeing any obligation. "Holder" means the Person in whose name a Security is registered on the Registrar's books. "Indebtedness" of a Person means indebtedness for borrowed money and all indebtedness under purchase money mortgages or other purchase money liens or conditional sales or similar title retention agreements (but excluding trade accounts payable in the ordinary course of business) in each case where such indebtedness has been created, incurred, assumed or guaranteed by such Person or where such Person is otherwise liable therefore and indebtedness for borrowed money secured by any Lien upon property owned by such Person even though such Person has not assumed or become liable for the payment of such indebtedness; provided that if the obligation so secured has not been assumed in full by such Person or is otherwise not such Person's legal liability in full, the amount of such obligation for the purposes of this definition shall be limited to the lesser of the amount of such obligation secured by such Lien or the fair market value of the property securing such Lien. "Indenture" means this Indenture as amended or supplemented from time to time. "Interest Payment Date" when used with respect to any Series of Securities, means the date specified in such Securities for the payment of any installment of interest on those Securities. "Issuer" means each party named as such in this Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the Trust Indenture Act, each other obligor on the indenture securities. "Issuer Order" means a written order signed in the name of each Issuer by two Officers of each Issuer. "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). "Maturity", when used with respect to any Security or installment of principal thereof, means the date on which the principal of such Security or such 4 installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration or otherwise. "Officer" means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary of the applicable Issuer. "Officers' Certificate" means a certificate signed by two Officers of each Issuer. "Opinion of Counsel" means a written opinion from legal counsel. The counsel may be an employee of or counsel to the applicable Issuer or the Trustee. "Original Issue Discount Security" means (i) any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof, and (ii) any other security which is issued with "original issue discount" within the meaning of Section 1273(a) of the Code. "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Principal Property" means, any property owned or leased by any Issuer or Restricted Subsidiary, the net book value of which exceeds one percent of the Consolidated Net Tangible Assets of the Issuers and their respective Subsidiaries. "Restricted Subsidiary" means, at any time, any Subsidiary of an Issuer which would be a "Significant Subsidiary" at such time, as such term is defined in Regulation S-X promulgated by the SEC, as in effect on the Closing Date. "SEC" means the Securities and Exchange Commission. "Securities" has the meaning specified in the second paragraph of this Indenture. "Securities Act" means the Securities Act of 1933, as amended. "Securities Custodian" means the custodian with respect to a Global Security (as appointed by the Depositary) or any successor thereto, who shall initially be the Trustee. "Series" or "Series of Securities" means each series of debentures, notes or other debt instruments of the Issuers created pursuant to Sections 2.01 and 2.02 hereof. 5 "Stated Maturity," when used with respect to any Security, means the date specified in such Security as the fixed date on which an amount equal to the principal amount of such Security is due and payable. "Subsidiary" of any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person. "Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.77aaa-77bbbb) and the rules and regulations thereunder as in effect on the Closing Date. "Trustee" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. "Trust Officer" means any Vice President, Assistant Vice President, Assistant Treasurer or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "Uniform Commercial Code" means the New York Uniform Commercial Code as in effect from time to time. "Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary, 100% of the outstanding Capital Stock of which (other than Capital Stock constituting directors' qualifying shares or interests held by directors or shares or interests required to be held by foreign nationals, in each case to the extent mandated by applicable law) is directly or indirectly owned by an Issuer or by one or more Wholly Owned Restricted Subsidiaries. SECTION 1.02. Other Definitions. Term Defined in Section "Bankruptcy Law" 6.01 "Covenant Defeasance" 8.02 "Custodian" 6.01 "Event of Default" 6.01 "Legal Defeasance" 8.03 "Legal Holiday" 10.08 "Notice of Default" 6.01 "Paying Agent" 2.04 "Registrar" 2.04 "Sale and Leaseback Transaction" 4.05 "Successor Company" 5.01(i) 6 SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This Indenture is subject to the mandatory provisions of the Trust Indenture Act, which are incorporated by reference in and made a part of this Indenture. The following Trust Indenture Act terms have the following meanings: "Commission" means the SEC. "indenture securities" means the Securities. "indenture security holder" means a Holder or Holder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Issuers and any other obligor on the indenture securities. All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions. SECTION 1.04. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) "including" means including without limitation; (5) words in the singular include the plural and words in the plural include the singular; and (6) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP. ARTICLE 2 THE SECURITIES SECTION 2.01. Issuable in Series. The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more Series. All Securities of a Series shall be identical except as may be set forth in a Board Resolution, a supplemental indenture or an Officers' Certificate detailing the adoption of the terms thereof pursuant to the authority 7 granted under a Board Resolution. In the case of Securities of a Series to be issued from time to time, the Board Resolution, Officers' Certificate or supplemental indenture may provide for the method by which specified terms (such as interest rate, maturity date, record date or date from which interest shall accrue) are to be determined. Securities may differ between Series in respect of any matters. SECTION 2.02. Establishment of Terms of Series of Securities. At or prior to the issuance of any Securities within a Series, the following shall be established (as to the Series generally, in the case of Section 2.02(a) and either as to such Securities within the Series or as to the Series generally in the case of Sections 2.02(b) through 2.02(x)) by a Board Resolution, a supplemental indenture or an Officers' Certificate pursuant to authority granted under a Board Resolution: (a) the title of the Securities of the Series (which shall distinguish the Securities of that particular Series from the Securities of any other Series); (b) any limit upon the aggregate principal amount of the Securities of the Series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the Series); (c) the date or dates on which the principal and premium of the Securities of the Series are payable; (d) the rate or rates (which may be fixed or variable) at which the Securities of the Series shall bear interest, if any, or the method of determining such rate or rates, the date or dates from which such interest, if any, shall accrue, the Interest Payment Dates on which such interest, if any, shall be payable or the method by which such dates will be determined, the record dates, for the determination of holders thereof to whom such interest is payable (in the case of Securities in registered form), and the basis upon which such interest will be calculated if other than that of a 360-day year of twelve 30-day months; (e) the currency or currencies in which Securities of the Series shall be denominated, if other than Dollars, the place or places, if any, in addition to or instead of the corporate trust office of the Trustee (in the case of Securities in registered form) or the principal New York office of the Trustee (in the case of Securities in bearer form), where the principal, premium and interest with respect to Securities of such Series shall be payable or the method of such payment, if by wire transfer, mail or other means; (f) the price or prices at which, the period or periods within which, and the terms and conditions upon which, Securities of the Series may be redeemed, in whole or in part at the option of the Issuers or otherwise; (g) whether Securities of the Series are to be issued in registered form or bearer form or both and, if Securities are to be issued in bearer form, whether coupons will be attached to them, whether Securities of the Series in bearer form may be 8 exchanged for Securities of the Series issued in registered form, and the circumstances under which and the places at which any such exchanges, if permitted, may be made; (h) if any Securities of the Series are to be issued in bearer form or as one or more Global Securities representing individual Securities of the Series in bearer form, whether certain provisions for the payment of additional interest or tax redemptions shall apply; whether interest with respect to any portion of a temporary Security of the Series in bearer form payable with respect to any Interest Payment Date prior to the exchange of such temporary Security in bearer form for definitive Securities of the Series in bearer form shall be paid to any clearing organization with respect to the portion of such temporary Security in bearer form held for its account and, in such event, the terms and conditions (including any certification requirements) upon which any such interest payment received by a clearing organization will be credited to the Persons entitled to interest payable on such Interest Payment Date; and the terms upon which a temporary Security in bearer form may be exchanged for one or more definitive Securities of the Series in bearer form; (i) the obligation, if any, of the Issuers to redeem, purchase or repay the Securities of the Series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices at which, the period or periods within which, and the terms and conditions upon which, Securities of the Series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligations; (j) the terms, if any, upon which the Securities of the Series may be convertible into or exchanged for any Issuer's common stock, preferred stock, other debt securities or warrants for common stock, preferred stock, Indebtedness or other securities of any kind and the terms and conditions upon which such conversion or exchange shall be effected, including the initial conversion or exchange price or rate, the conversion or exchange period and any other additional provisions; (k) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which the Securities of the Series shall be issuable; (l) if the amount of principal, premium or interest with respect to the Securities of the Series may be determined with reference to an index or pursuant to a formula, the manner in which such amounts will be determined; (m) if the principal amount payable at the Stated Maturity of Securities of the Series will not be determinable as of any one or more dates prior to such Stated Maturity, the amount that will be deemed to be such principal amount as of any such date for any purpose, including the principal amount thereof which will be due and payable upon any Maturity other than the Stated Maturity and which will be deemed to be outstanding as of any such date (or, in any such case, the manner in which such deemed principal amount is to be determined), and if necessary, the manner of determining the equivalent thereof in Dollars; (n) any changes or additions to Article 8; (o) if other than the principal amount thereof, the portion of the principal amount of the Securities of the Series that shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.02; 9 (p) the terms, if any, of the transfer, mortgage, pledge or assignment as security for the Securities of the Series of any properties, assets, moneys, proceeds, securities or other collateral, including whether certain provisions of the Trust Indenture Act are applicable and any corresponding changes to provisions of this Indenture as then in effect; (q) any addition to or change in the Events of Default which applies to any Securities of the Series and any change in the right of the Trustee or the requisite Holders of such Series of Securities to declare the principal amount of, premium, if any, and interest on such Series of Securities due and payable pursuant to Section 6.02; (r) if the Securities of the Series shall be issued in whole or in part in the form of a Global Security, the terms and conditions, if any, upon which such Global Security may be exchanged in whole or in part for other individual Securities of such Series in definitive registered form, the Depositary for such Global Security and the form of any legend or legends to be borne by any such Global Security in addition to or in lieu of the Global Securities Legend; (s) any Trustee, authenticating agent, Paying Agent, transfer agent or Registrar; (t) the applicability of, and any addition to or change in, the covenants (and the related definitions) set forth in Articles 4 or 5 which applies to Securities of the Series; (u) the terms, if any, of any Guarantee of the payment of principal, premium and interest with respect to Securities of the Series and any corresponding changes to the provisions of this Indenture and as then in effect; (v) the subordination, if any, of the Securities of the Series pursuant to this Indenture; (w) with regard to Securities of the Series that do not bear interest, the dates for certain required reports to the Trustee; and (x) any other terms of Securities of the Series (which terms shall not be prohibited by the provisions of this Indenture). All Securities of any one Series need not be issued at the same time and may be issued from time to time, consistent with the terms of this Indenture, if so provided by or pursuant to the Board Resolution, supplemental indenture or Officers' Certificate referred to above, and the authorized principal amount of any Series may not be increased to provide for issuances of additional Securities of such Series, unless otherwise provided in such Board Resolution, supplemental indenture or Officers' Certificate. SECTION 2.03. Execution and Authentication. One or more Officers of the Issuers shall sign the Securities on behalf of the Issuers by manual or facsimile 10 signature. The Issuers' seal, if any, shall be impressed, affixed, imprinted or reproduced on the Securities and may be in facsimile form. If an Officer whose signature is on a Security no longer holds that office at the time the Security is authenticated, the Security shall nevertheless be valid. A Security shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. A Security shall be dated the date of its authentication, unless otherwise provided by a Board Resolution, a supplemental indenture or an Officers' Certificate. The Trustee shall at any time, and from time to time, authenticate Securities for original issue in the principal amount provided in the Board Resolution, supplemental indenture hereto or Officers' Certificate, upon receipt by the Trustee of an Issuer Order. Such Issuer Order may authorize authentication and delivery pursuant to oral or electronic instructions from the Issuers or their duly authorized agent or agents, which oral instructions shall be promptly confirmed in writing. The aggregate principal amount of Securities of any Series outstanding at any time may not exceed any limit upon the maximum principal amount for such Series set forth in the Board Resolution, supplemental indenture hereto or Officers' Certificate delivered pursuant to Section 2.02, except as provided in Section 2.08. The Trustee may appoint an authenticating agent reasonably acceptable to the Issuers to authenticate the Securities. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuers. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands. SECTION 2.04. Registrar and Paying Agent. The Issuers shall maintain, with respect to each Series of Securities, at the place or places specified with respect to such Series pursuant to Section 2.02, an office or agency where Securities of such Series may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Securities of such Series may be presented for payment (the "Paying Agent"). The Registrar shall keep a register with respect to each Series of Securities and of their transfer and exchange. The Issuers may have one or more co- registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent and the term "Registrar" includes any co-registrars. The Issuers hereby appoint the Trustee as Registrar and Paying Agent for each Series of Securities unless another Registrar or Paying Agent, as the case may be, is appointed prior to the time Securities of that Series are first issued. The Issuers shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the Trust Indenture Act. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuers shall notify the Trustee of the name and address of any such agent. If the Issuers fail to maintain a Registrar or Paying Agent, the 11 Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Issuers or any of their domestically organized Wholly Owned Restricted Subsidiaries may act as Paying Agent or Registrar. The Issuers may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (1) acceptance of any appointment by a successor as evidenced by an appropriate agreement entered into by the Issuers and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (2) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (1) above. The Registrar or Paying Agent may resign at any time upon written notice; provided, however, that the Trustee may resign as Registrar or Paying Agent only if the Trustee also resigns as Trustee in accordance with Section 7.08. SECTION 2.05. Paying Agent to Hold Money in Trust. The Issuers shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust, for the benefit of Holders of any Series of Securities, or the Trustee, all money held by the Paying Agent for the payment of principal of or interest on the Series of Securities, and will notify the Trustee of any default by the Issuers in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than one of the Issuers or any of their Subsidiaries) shall have no further liability for the money. If one of the Issuers or any of their Subsidiaries acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of Holders of any Series of Securities all money held by it as Paying Agent. SECTION 2.06. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of each Series of Securities and shall otherwise comply with Trust Indenture Act Section 312(a). If the Trustee is not the Registrar, the Issuers shall furnish to the Trustee at least ten days before each interest payment date and at such other times as the Trustee may request in writing a list, in such form and as of such date as the Trustee may reasonably require, of the names and addresses of Holders of each Series of Securities. SECTION 2.07. Transfer and Exchange. Where Securities of a Series are presented to the Registrar or a co-registrar with a request to register a transfer or to exchange them for an equal principal amount of Securities of the same Series, the Registrar shall register the transfer or make the exchange if its requirements for such transactions are met. To permit registrations of transfers and exchanges, the Trustee shall authenticate Securities at the Registrar's request. No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Issuers may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 2.11, 3.06 or 9.05). Neither the Issuers nor the Registrar shall be required (a) to issue, register the transfer of, or exchange Securities of any Series for the period beginning at the 12 opening of business fifteen days immediately preceding the mailing of a notice of redemption of Securities of that Series selected for redemption and ending at the close of business on the day of such mailing, or (b) to register the transfer of or exchange Securities of any Series selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected, called or being called for redemption in part. SECTION 2.08. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Issuers shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there shall be delivered to the Issuers and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Issuers or the Trustee that such Security has been acquired by a bona fide purchaser, the Issuers shall execute and upon their request the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of the same Series and of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Issuers in their discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Issuers may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any Series issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Issuers, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that Series duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION 2.09. Outstanding Securities. The Securities outstanding at any time are all the Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest on a Global Security effected by the Trustee in accordance with the provisions hereof and those described in this Section as not outstanding. If a Security is replaced pursuant to Section 2.08, it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security is held by a bona fide purchaser. 13 If the Paying Agent holds at the Maturity of Securities of a Series money sufficient to pay such Securities payable on that date, then on and after that date such Securities of the Series cease to be outstanding and interest on them ceases to accrue. A Security does not cease to be outstanding because the Issuers or an Affiliate of the Issuers holds the Security. In determining whether the Holders of the requisite principal amount of outstanding Securities of any Series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of an Original Issue Discount Security that shall be deemed to be outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the Maturity thereof pursuant to Section 6.02. SECTION 2.10. Treasury Securities. In determining whether the Holders of the required principal amount of Securities of a Series have concurred in any request, demand, authorization, direction, notice, consent or waiver Securities of a Series owned by the Issuers or an Affiliate of the Issuers shall be disregarded, except that for the purposes of determining whether the Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent or waiver only Securities of a Series that the Trustee knows are so owned shall be so disregarded. SECTION 2.11. Temporary Securities. Until Definitive Securities are ready for delivery, the Issuers may prepare and the Trustee shall authenticate temporary Securities upon an Issuer Order. Temporary Securities shall be substantially in the form of Definitive Securities but may have variations that the Issuers consider appropriate for temporary Securities. Without unreasonable delay, the Issuers shall prepare and the Trustee upon request shall authenticate Definitive Securities of the same Series and date of maturity in exchange for temporary Securities. Until so exchanged, temporary securities shall have the same rights under this Indenture as the Definitive Securities. SECTION 2.12. Cancellation. The Issuers at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee shall cancel all Securities surrendered for transfer, exchange, payment, replacement or cancellation and shall destroy such canceled Securities (subject to the record retention requirement of the Exchange Act) and deliver a certificate of such destruction to the Issuers, unless the Issuers otherwise direct. The Issuers may not issue new Securities to replace Securities that they have paid or delivered to the Trustee for cancellation. SECTION 2.13. Defaulted Interest. If the Issuers default in a payment of interest on a Series of Securities, they shall pay the defaulted interest, plus, to the extent permitted by law, any interest payable on the defaulted interest, to the persons who are Holders of the Series on a subsequent special record date. The Issuers shall fix the record date and payment date. At least 30 days before the record date, the Issuers shall mail to the Trustee and to each Holder of the Series a notice that states the record date, the payment date and the amount of interest to be paid. The Issuers may pay defaulted interest in any other lawful manner. 14 SECTION 2.14. Global Securities. (a) Terms of Securities. A Board Resolution, a supplemental indenture hereto or an Officers' Certificate shall establish whether the Securities of a Series shall be issued in whole or in part in the form of one or more Global Securities and the Depository for such Global Security or Securities. (b) Transfer and Exchange. Notwithstanding any provisions to the contrary contained in Section 2.07 of this Indenture and in addition thereto, any Global Security shall be exchangeable pursuant to Section 2.07 of this Indenture for Securities registered in the names of Holders other than the Depository for such Security or its nominee only if (i) such Depository notifies the Issuers that it is unwilling or unable to continue as Depository for such Global Security or if at any time such Depository ceases to be a clearing agency registered under the Exchange Act, and, in either case, the Issuers fail to appoint a successor Depository within 90 days of such event, (ii) the Issuers execute and deliver to the Trustee an Officers' Certificate to the effect that such Global Security shall be so exchangeable or (iii) an Event of Default with respect to the Securities represented by such Global Security shall have happened and be continuing. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Securities registered in such names as the Depository shall direct in writing in an aggregate principal amount equal to the principal amount of the Global Security with like tenor and terms. Except as provided in this Section 2.14(b) a Global Security may not be transferred except as a whole by the Depository with respect to such Global Security to a nominee of such Depository, by a nominee of such Depository to such Depository or another nominee of such Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor Depository. (c) Legend. Any Global Security issued hereunder shall bear a legend in substantially the following form: "THIS GLOBAL SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL SECURITY MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07 OF THE INDENTURE, (III) THIS GLOBAL SECURITY MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL SECURITY MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE ISSUERS (AS DEFINED IN THE INDENTURE GOVERNING THIS SECURITY)." (d) Acts of Holders. The Depository, as a Holder, may appoint agents and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a Holder is entitled to give or take under this Indenture. 15 (e) Payments. Notwithstanding the other provisions of this Indenture, unless otherwise specified as contemplated by Section 2.02, payment of the principal of and interest, if any, on any Global Security shall be made to the Holder thereof. (f) Consents, Declaration and Directions. Except as provided in Section 2.14(e), the Issuers, the Trustee and any Agent shall treat a person as the Holder of such principal amount of outstanding Securities of such Series represented by a Global Security as shall be specified in a written statement of the Depositary with respect to such Global Security, for purposes of obtaining any consents, declarations, waivers or directions required to be given by the Holders pursuant to this Indenture. SECTION 2.15. CUSIP Numbers. The Issuers in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other elements of identification printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. ARTICLE 3 REDEMPTION SECTION 3.01. Notices to Trustee. The Issuers, with respect to any Series of Securities, may elect to redeem and pay the Series of Securities or may covenant to redeem and pay the Series of Securities or any part thereof prior to the Stated Maturity thereof at such time and on such terms provided for in such Series of Securities. If a Series of Securities is redeemable and the Issuers want or are obligated to redeem prior to the Stated Maturity thereof all or part of the Series of Securities pursuant to the terms of such Securities, they shall notify the Trustee in writing of the redemption date and the principal amount of Securities of the Series to be redeemed and the redemption price. The Issuers shall give such notice to the Trustee at least 45 days before the redemption date unless the Trustee consents to a shorter period. SECTION 3.02. Selection of Securities To Be Redeemed. Unless otherwise provided for a particular Series of Securities by a Board Resolution, a supplemental indenture or an Officers' Certificate, if fewer than all the Securities of a particular Series are to be redeemed or purchased, the Trustee shall select the Securities to be redeemed or purchased pro rata or by lot or by a method that complies with applicable legal and securities exchange requirements, if any, and that the Trustee in its sole discretion shall deem to be fair and appropriate and in accordance with methods generally used at the time of selection by fiduciaries in similar circumstances. The Trustee shall make the selection at least 30 days but no more than 60 days before the redemption date from outstanding Securities of a Series not previously called for redemption. Securities and portions thereof that the Trustee selects shall be in principal amounts of $1,000 or integral multiples of $1,000. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall promptly notify the Issuers of the Securities (or portions thereof) to be redeemed. 16 SECTION 3.03. Notice of Redemption. Unless otherwise provided for a particular Series of Securities by a Board Resolution, a supplemental indenture or an Officers' Certificate, at least 30 days but not more than 60 days before a date for redemption of Securities, the Issuers shall mail a notice of redemption by first-class mail to each Holder of Securities to be redeemed at such Holder's registered address. The notice shall identify the Securities to be redeemed and shall state: (1) the redemption date; (2) the redemption price; (3) if any Security is being redeemed in part, the portion of the principal amount of such Security to be redeemed and that, after the redemption date upon surrender of such Security, a new Security or Securities in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Security; (4) the name and address of the Paying Agent; (5) that Securities called for redemption must be surrendered to the Paying Agent to collect the redemption price; (6) that, unless the Issuers default in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Securities (or portion thereof) called for redemption ceases to accrue on and after the redemption date; (7) the paragraph of the Securities and/or provision of this Indenture pursuant to which the Securities called for redemption are being redeemed; (8) the CUSIP or ISIN number, if any, printed on the Securities being redeemed; and (9) that no representation is made as to the correctness or accuracy of the CUSIP or ISIN number, if any, listed in such notice or printed on the Securities. At the Issuers' request, the Trustee shall give the notice of redemption as provided to it in the Issuers' name and at the Issuers' expense. In such event, the Issuers shall provide the Trustee with the information required by this Section. SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed, Securities called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the Paying Agent, such Securities shall be paid at the redemption price stated in the notice. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. SECTION 3.05. Deposit of Redemption Price. Prior to 11:00 a.m. (New York City time) on the redemption date, the Issuers shall deposit with the Paying Agent 17 (or, if any Issuer or a Subsidiary of any of the Issuers is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of, and accrued interest on, all Securities to be redeemed on that date, other than Securities or portions of Securities called for redemption that have been delivered by the Issuers to the Trustee for cancellation. The Paying Agent shall as promptly as practicable return to the Issuers any money deposited with it by the Issuers in excess of the amounts necessary to pay the redemption price of, and accrued interest on, all Securities to be redeemed. If such money is then held by the Issuers in trust and is not required for such purpose it shall be discharged from such trust. The Issuers at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee. SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Issuers shall execute and the Trustee shall authenticate for the Holder (at the Issuers' expense) a new Security equal in principal amount to the unredeemed portion of the Security surrendered. ARTICLE 4 COVENANTS SECTION 4.01. Payment of Securities. The Issuers shall promptly make all payments in respect of each Series of Securities on the dates and in the manner provided in such Series of Securities and in this Indenture. Such payments shall be considered made on the date due if on such date the Trustee or the Paying Agent holds, in accordance with this Indenture, money sufficient to make all payments with respect to such Securities then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture. SECTION 4.02. SEC Reports. Unless otherwise provided for a particular Series of Securities in a Board Resolution, a supplemental indenture or an Officers' Certificate, notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall file with the SEC, and provide the Trustee and Holders within 15 days after it files them with the SEC, copies of its annual report and the information, documents and other reports that are specified in Sections 13 and 15(d) of the Exchange Act. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuers' compliance with any of their covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). The Issuers also shall comply with the other provisions of Trust Indenture Act Section 314(a). SECTION 4.03. Corporate Existence. Each Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, material rights (charter and statutory) and material franchises (other than as contemplated by Section 5.01); provided, however, that such Issuer shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the 18 preservation of such rights or franchises is no longer desirable in the conduct of the business of the Issuers and the Restricted Subsidiaries considered as a whole. SECTION 4.04. Restrictions on Liens. Unless otherwise provided for a particular Series of Securities in a Board Resolution, a supplemental indenture or an Officers' Certificate, except as provided in Section 4.06, the Issuers shall not, and shall not permit any Restricted Subsidiary to, create or suffer to exist any Lien to secure any Indebtedness of any Issuer or Restricted Subsidiary on any Principal Property of any Issuer or Restricted Subsidiary, without making, or causing such Restricted Subsidiary to make, effective provision to secure all of the Securities of all Series offered hereunder and then outstanding by such Lien, equally and ratably with any and all other such Indebtedness thereby secured, so long as such other Indebtedness is so secured, except that the foregoing restrictions shall not apply to: (a) Liens on property of a Person existing at the time such Person is merged into or consolidated with any Issuer or Restricted Subsidiary or at the time of sale, lease or other disposition of the properties of such Person (or a division thereof) as an entirety or substantially as an entirety to any Issuer or Restricted Subsidiary; (b) Liens on property of a Person existing at the time such Person becomes a Restricted Subsidiary or existing on property prior to the acquisition thereof by any Issuer or Restricted Subsidiary; (c) Liens securing Indebtedness between a Restricted Subsidiary and an Issuer or between Restricted Subsidiaries or Issuers; (d) Liens on any property created, assumed or otherwise brought into existence in contemplation of the sale or other disposition of the underlying property, whether directly or indirectly, by way of share disposition or otherwise, provided that the applicable Issuer or Restricted Subsidiary must dispose of such property within 180 days after the creation of such Liens and that any Indebtedness secured by such Liens shall be without recourse to any Issuer or Restricted Subsidiary; (e) Liens in favor of the United States of America or any state thereof, or any department, agency or instrumentality or political subdivision of the United States of America or any state thereof, or in favor of any country, or any political subdivision thereof, to secure partial, progress, advance or other payments, or performance of any other similar obligations, including, without limitation, Liens to secure pollution control bonds or industrial revenue or other similar types of bonds; (f) Liens imposed by law, such as carriers', warehousemen's and mechanics' Liens and other similar Liens arising in the ordinary course of business which secure obligations not more than 60 days past due or which are being contested in good faith and by appropriate proceedings; (g) Liens incurred in the ordinary course of business to secure performance of obligations with respect to statutory or regulatory requirements, performance or return-of-money bonds, surety bonds or other obligations of a like 19 nature, in each case which are not incurred in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property and which do not in the aggregate impair in any material respect the use of property in the operation of the business of the Issuers and their respective Subsidiaries taken as a whole; (h) Liens incurred to secure appeal bonds and judgment and attachment Liens, in each case in connection with litigation or legal proceedings which are being contested in good faith by appropriate proceedings so long as reserves have been established to the extent required by GAAP; (i) pledges or deposits under workmen's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which any Issuer or Restricted Subsidiary is a party, or deposits to secure public or statutory obligations of an Issuer or Restricted Subsidiary or deposits for the payment of rent, in each case incurred in the ordinary course of business; (j) utility easements, building restrictions and such other encumbrances or charges against real property as are of a nature generally existing with respect to properties of a similar character; (k) Liens granted to any bank or other institution on the payments to be made to such institution by an Issuer or Subsidiary thereof, pursuant to any interest rate swap or similar agreement or foreign currency hedge, exchange or similar agreement designed to provide protection against fluctuations in interest rates and currency exchange rates, respectively, provided that such agreements are entered into in, or are incidental to, the ordinary course of business; (l) Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of setoff or similar rights and remedies, in each case as to any deposit account or any other fund maintained with a creditor depository institution, provided that (1) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the applicable Issuer or Restricted Subsidiary in excess of those set forth by regulations promulgated by the Federal Reserve Board, and (2) such deposit account is not intended by such Issuer or Restricted Subsidiary to provide collateral to the depository institution; (m) Liens arising from Uniform Commercial Code financing statements regarding leases; (n) the giving, simultaneously with or within 180 days after the latest of the Closing Date, or the acquisition, construction, improvement, development or expansion of such property, of a purchase money Lien on property acquired, constructed, improved, developed or expanded after the Closing Date, or the acquisition, construction, improvement, development or expansion after the Closing Date, of property subject to any Lien which is limited to such property; 20 (o) the giving of a Lien on real property which is the sole security for Indebtedness incurred within two years after the latest of the Closing Date, or the acquisition, construction, improvement, development or expansion of such property, provided that the holder of such Indebtedness is entitled to enforce its payment only by resorting to such security; (p) Liens arising by the terms of letters of credit entered into in the ordinary course of business to secure reimbursement obligations thereunder; (q) Liens existing on the Closing Date; (r) Liens for taxes, assessments and other governmental charges or levies not yet due or as to which the period of grace, if any related thereto has not expired or which are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP; and (s) extension, renewal, replacement or refunding of any Lien existing on the Closing Date or referred to in clauses (a) to (k) and (n) to (o) and (q), provided that the principal amount of Indebtedness secured thereby and not otherwise authorized by clauses (a) to (k) and (n) to (o) and (q) shall not exceed the principal amount of Indebtedness, plus any premium or fee payable in connection with any such extension, renewal, replacement or refunding, so secured at the time of such extension, renewal, replacement or refunding. SECTION 4.05. Restrictions on Sale and Leaseback Transactions. Unless otherwise provided for a particular Series of Securities in a Board Resolution, a supplemental indenture or an Officers' Certificate, except as provided in Section 4.06, none of the Issuers shall, and none of the Issuers shall permit any Restricted Subsidiary to, after the date hereof, enter into any arrangement with any Person providing for the leasing by any such Issuer or Restricted Subsidiary of any Principal Property now owned or hereafter acquired which has been or is to be sold or transferred by such Issuer or Restricted Subsidiary to such Person with the intention of taking back a lease of such Principal Property (a "Sale and Leaseback Transaction"), unless the net proceeds of such sale or transfer have been determined by the Board of Directors to be at least equal to the fair market value of such Principal Property or asset at the time of such sale and transfer and either (i) such Issuer or Restricted Subsidiary applies or causes to be applied an amount equal to the net proceeds of such sale or transfer, within 180 days of receipt thereof, to the retirement or prepayment (other than any mandatory retirement or prepayment, except mandatory retirements or prepayments required as a result of such Sale and Leaseback Transaction) of Funded Debt of any Issuer or any Restricted Subsidiary ranking senior to or pari passu with the Securities or to the purchase, construction or development of property or assets to be used in the ordinary course of business, or (ii) such Issuer or Restricted Subsidiary would, on the effective date of such sale or transfer, be entitled, pursuant to this Indenture, to issue, assume or guarantee Indebtedness secured by a Lien upon such Principal Property, at least equal in amount to the Attributable Debt in respect of such Sale and Leaseback Transaction without equally and ratably securing the Securities. The foregoing restriction shall not apply to any Sale and Leaseback Transaction (i) between any Issuer and Restricted Subsidiary or between Restricted Subsidiaries or Issuers, provided that the lessor shall be an Issuer or a Wholly Owned Restricted Subsidiary, (ii) which has a lease of less than three years in length, 21 (iii) entered into within 180 days after the later of the purchase, construction of development of such Principal Property or assets, or the commencement of operation of such Principal Property or (iv) involving the distribution warehouse of Jones Apparel Group, Inc. at South Hill, Virginia. SECTION 4.06. Exempted Debt. Unless otherwise provided for a particular Series of Securities in a Board Resolution, a supplemental indenture or an Officers' Certificate, notwithstanding Sections 4.04 and 4.05, any Issuer or Restricted Subsidiary may, in addition to amounts permitted under such restrictions, create Indebtedness secured by Liens, or enter into Sale and Leaseback Transactions, provided that, at the time of such transactions and after giving effect thereto, the aggregate outstanding amount of all such Indebtedness secured by Liens plus Attributable Debt resulting from such Sale and Leaseback Transactions does not exceed 20% of Consolidated Shareholders' Equity. SECTION 4.07. Waiver of Certain Covenants. Unless otherwise provided for a particular Series of Securities in a Board Resolution, a supplemental indenture or an Officers' Certificate, each of the Issuers may in any particular instance, be excused from failing to comply with any term, provision or condition set forth in Section 4.02 or Sections 4.04 to 4.06, with respect to any Series of Securities if before the time for such compliance the Holders of at least a majority in principal amount of the outstanding Securities of such Series shall, by act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Issuers, and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to waive compliance with any covenant or condition hereunder. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to waive any such compliance, whether or not such Holders remain Holders after such record date; provided that unless the Holders of at least a majority in principal amount of the outstanding Securities of the Series of Securities affected shall have waived such compliance prior to the date which is 90 days after such record date, any such waiver previously given shall automatically and without further action by any Holder be canceled and of no further effect. SECTION 4.08. Compliance Certificate. The Issuers shall deliver to the Trustee within 120 days after the end of each fiscal year of the Issuers an Officers' Certificate stating that in the course of the performance by the signers of their duties as Officers of the Issuers they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If they do, the certificate shall describe the Default, its status and what action the Issuers are taking or propose to take with respect thereto. The Issuers also shall comply with Trust Indenture Act Section 314(a)(4). SECTION 4.09. Further Instruments and Acts. Each of the Issuers shall execute and deliver to the Trustee such further instruments and do such further acts as 22 may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. ARTICLE 5 SUCCESSOR COMPANIES SECTION 5.01. Merger and Consolidation. Unless otherwise provided for a particular Series of Securities in a Board Resolution, a supplemental indenture or an Officers' Certificate, none of the Issuers shall consolidate with or merge with or into, or convey, transfer or lease all or substantially all its assets to, any Person (other than a merger of a Wholly Owned Restricted Subsidiary into an Issuer or another Wholly Owned Restricted Subsidiary or a merger of one Issuer into another), unless: (i) the resulting, surviving or transferee Person (the "Successor Company") shall be a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Company (if not such Issuer) shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of such Issuer under the Securities and this Indenture; (ii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Company, any other Issuer or any Restricted Subsidiary as a result of such transaction, as having been incurred by the Successor Company or such Issuer or Restricted Subsidiary at the time of such transaction), no Event of Default shall have occurred and be continuing; (iii) such Issuer shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture; and (iv) if, as a result of any such consolidation, merger or transfer, the Principal Property of such Issuer would become subject to a Lien which shall not be permitted by this Indenture, such Issuer or the Successor Company, as the case may be, shall take such steps as shall be necessary to secure the Securities equally and ratably with (or prior to) all Indebtedness secured thereby. The Successor Company shall succeed to, and be substituted for, and may exercise every right and power of, the applicable Issuer under this Indenture (as modified or supplemented by an Officers' Certificate, Board Resolution or supplemental indenture), but the predecessor Issuer in the case of a lease of all or substantially all of its assets shall not be released from the obligation to pay the principal of and interest on the Securities. 23 ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. Events of Default. Unless otherwise provided for a particular Series of Securities by a Board Resolution, a supplemental indenture or an Officers' Certificate, each of the following constitutes an "Event of Default" with respect to each Series of Securities: (1) the Issuers default in any payment of the principal amount or premium, if any, on any Security of that Series when such amount becomes due and payable at Stated Maturity, upon acceleration, redemption or otherwise; (2) the Issuers default in the payment of interest on any Security of that Series when such interest becomes due and payable, and such default continues for a period of 30 days; (3) any Issuer fails to comply with Section 5.01; (4) any Issuer fails to comply with Section 4.02, 4.03, 4.04, 4.05 or 4.06, and such failure continues for 30 days after the notice specified below; (5) any Issuer fails to comply with any of its covenants or agreements contained in the Securities of that Series or this Indenture (other than those referred to in (1), (2), (3), or (4) above) and such failure continues for 60 days after the notice specified below; (6) any Issuer or Restricted Subsidiary defaults under any Indebtedness (including any other Series of Securities), whether such Indebtedness now exists or shall hereafter be created, and such default results in Indebtedness in excess of $25,000,000 or its foreign currency equivalent becoming due and payable prior to the date on which it would otherwise have become due and payable, without such Indebtedness having been discharged or such acceleration having been rescinded or annulled within 30 days after the notice specified below; (7) any Issuer or Restricted Subsidiary pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case; (B) consents to the entry of an order for relief against it in an involuntary case; (C) consents to the appointment of a Custodian of it or for any substantial part of its property; or (D) makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency; (8) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: 24 (A) is for relief against any Issuer or Restricted Subsidiary in an involuntary case; (B) appoints a Custodian of any Issuer or Restricted Subsidiary or for any substantial part of its property; or (C) orders the winding up or liquidation of any Issuer or Restricted Subsidiary or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days; (9) any judgment or decree for the payment of money (not covered by insurance) in excess of $25,000,000 or its foreign currency equivalent at the time, is entered against any Issuer or Restricted Subsidiary and either (A) an enforcement proceeding has been commenced by any creditor upon such judgment or decree or (B) there is a period of 60 days following the entry of such judgment or decree during which such judgment or decree is not discharged, waived or the execution thereof stayed; or (10) the co-obligation of any Issuer shall cease to be in full force and effect (except as contemplated by the terms thereof or this Indenture). The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body. The term "Bankruptcy Law" means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. A Default under clause (4), (5) or (6) above is not an Event of Default with respect to any Series of Securities until the Trustee or the Holders of at least 25% in principal amount of the outstanding Securities of that Series notify the applicable Issuer of the Default and such Issuer does not cure such Default within the time specified in clause (4), (5) or (6), as applicable, after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a "Notice of Default." The Issuers shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice in the form of an Officers' Certificate of any Event of Default under clause (6) and any event which with the giving of notice or the lapse of time would become an Event of Default under clause (4), (5) or (9), its status and what action the Issuers are taking or proposes to take with respect thereto. SECTION 6.02. Acceleration. If an Event of Default with respect to any Series of Securities at the time outstanding (other than an Event of Default specified in Section 6.01(7) or (8) with respect to any Issuer) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Securities of that Series by notice to the Issuers, may declare the principal amount of (or, in the case of Original Issue Discount Securities of that Series, the portion thereby specified in the 25 terms of such Security), premium, if any, and accrued and unpaid interest on all the Securities of that Series to be due and payable. Upon such a declaration, such amounts shall be due and payable immediately. If an Event of Default specified in Section 6.01(7) or (8) with respect to any Issuer occurs, the principal amount of (or, in the case of Original Issue Discount Securities of that Series, the portion thereby specified in the terms of such Security), premium, if any, and accrued and unpaid interest on all the Securities of each Series of Security shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Holders of a majority in principal amount of the Securities of any Series of Securities by notice to the Trustee may rescind an acceleration of that Series of Securities and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default with respect to such Series of Securities have been cured or waived except nonpayment of the principal amount of (or, in the case of Original Issue Discount Securities of that Series, the portion thereby specified in the terms of such Security), premium, if any, and accrued and unpaid interest on all Securities of that Series that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto. SECTION 6.03. Other Remedies. If an Event of Default with respect to any Series of Securities occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of the principal amount of (or, in the case of Original Issue Discount Securities of that Series, the portion thereby specified in the terms of such Security), premium, if any, and accrued and unpaid interest on the Securities of that Series or to enforce the performance of any provision of the Securities of that Series or this Indenture. The Trustee may institute and maintain a suit or legal proceeding even if it does not possess any of the Securities of a Series or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default with respect to any Series of Securities shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in principal amount of the Securities of any Series by notice to the Trustee may waive an existing Default and its consequences except (i) a Default in the payment of the principal amount of (or, in the case of Original Issue Discount Securities of that Series, the portion thereby specified in the terms of such Security), premium, if any, and accrued and unpaid interest on a Security of that Series, (ii) a Default arising from the failure to redeem or purchase any Security of that Series when required pursuant to the terms of this Indenture or (iii) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Holder of that Series affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. SECTION 6.05. Control by Majority. The Holders of a majority in principal amount of the outstanding Securities of any Series may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee with respect to that Series. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of any other Holder of that Series or that would subject the Trustee to personal 26 liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. SECTION 6.06. Limitation on Suits. Except to enforce the right to receive payment of the principal amount of (or, in the case of Original Issue Discount Securities, the portion thereby specified in the terms of such Security), premium, if any, and accrued and unpaid interest on a Security of any Series when due, no Holder of a Security of that Series may pursue any remedy with respect to this Indenture or the Securities of that Series unless: (1) the Holder previously gave the Trustee written notice stating that an Event of Default with respect to that Series is continuing; (2) the Holders of at least 25%, in principal amount of the outstanding Securities of that Series make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders of that Series offer to the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense; (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and (5) the Holders of a majority in principal amount of the outstanding Securities of that Series do not give the Trustee a direction inconsistent with the request during such 60-day period. A Holder of Securities of any Series may not use this Indenture to prejudice the rights of another Holder of that Series or to obtain a preference or priority over another Holder of that Series. SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of the principal amount of (or, in the case of Original Issue Discount Securities, the portion thereby specified in the terms of such Security), premium, if any, and accrued and unpaid interest on the Securities held by such Holder, on or after their Maturity, or to bring suit for the enforcement of any such payment on or after their Maturity, shall not be impaired or affected without the consent of such Holder. SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuers for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.07. SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to any Issuer or any of its Subsidiaries, their creditors or their property and, unless prohibited by law or applicable regulations, may vote on behalf of 27 the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. SECTION 6.10. Priorities. If the Trustee collects any money or property pursuant to this Article 6 with respect to any Series of Securities, it shall pay out the money or property in the following order: FIRST: to the Trustee for amounts due under Section 7.07; SECOND: to Holders for amounts due and unpaid on the Securities of that Series for the principal amount of (or, in the case of Original Issue Discount Securities of that Series, the portion thereby specified in the terms of such Security), premium, if any, and accrued and unpaid interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Securities of that Series for the principal amount of (or, in the case of Original Issue Discount Securities of that Series, the portion thereby specified in the terms of such Security), premium, if any, and accrued and unpaid interest, respectively; and THIRD: to the Issuers. The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section. At least 15 days before such record date, the Trustee shall mail to each Holder and each Issuer a notice that states the record date, the payment date and amount to be paid. SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing, by any party litigant in the suit, of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in principal amount of the Securities of any Series. SECTION 6.12. Waiver of Stay or Extension Laws. None of the Issuers (to the extent it may lawfully do so) shall at any time insist upon, plead, or in any manner whatsoever claim to take the benefit or advantage of, any stay or extension law, wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and each Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. 28 ARTICLE 7 TRUSTEE SECTION 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing with respect to any Series of Securities, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise thereof as a prudent Person would exercise or use under the circumstances in the conduct of such Person's own affairs. (b) Except during the continuance of an Event of Default with respect to any Series of Securities: (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture with respect to the Securities of that Series, as modified or supplemented by an Officers' Certificate, a Board Resolution or a supplemental indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may, with respect to Securities of that Series, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or, not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). (c) The Trustee may not be relieved from liability for its own grossly negligent action, its own grossly negligent failure to act or its own willful misconduct, except that: (1) this paragraph does not limit the effect of paragraph (b) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was grossly negligent in ascertaining the pertinent facts; and (3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section. (e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuers. (f) Money held in trust by the Trustee need not be segregated from funds except to the extent required by law. 29 (g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers. (h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the Trust Indenture Act. SECTION 7.02. Rights of Trustee. (a) The Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good, faith in reliance on the Officers' Certificate or Opinion of Counsel. (c) The Trustee may act through agents or attorneys and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee's conduct does not constitute willful misconduct or gross negligence. (e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities, shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document. (g) The Trustee shall not be deemed to have notice of any Default or Event of Default with respect to the Securities of any Series unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the corporate trust office of the Trustee, and such notice references such Securities and this Indenture. (h) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder. (i) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders 30 pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by the Trustee in compliance with such request or direction. SECTION 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Issuers or their Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11. SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Issuers use of the proceeds from the Securities, and it shall not be responsible for any statement in this Indenture, in the Securities, or in any document executed in connection with the sale of the Securities, other than those set forth in the Trustee's certificate of authentication. SECTION 7.05. Notice of Defaults. If a Default with respect to Securities of any Series occurs and is continuing and if it is actually known to a Trust Officer of the Trustee, the Trustee shall mail to each Holder of that Series notice of the Default within 90 days after it occurs. Except in the case of a Default with respect to Securities of any Series in payment of the principal amount of (or, in the case of Original Issue Discount Securities of that Series, the portion thereby specified in the terms of such Security), premium, if any, and accrued and unpaid interest on any Security of that Series, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Holders. SECTION 7.06. Reports by Trustee to Holder. As promptly as practicable after each ________ beginning with the _________ for so long as Securities remain outstanding, the Trustee shall mail to each Holder a brief report dated as of such reporting date that complies with Section 313(a) of the Trust Indenture Act. The Trustee shall also comply with Section 313(b) of the Trust Indenture Act. A copy of each report at the time of its mailing to Holders shall be filed with the SEC and each stock exchange (if any) on which the Securities are listed. The Issuers agree to notify promptly the Trustee whenever the Securities become listed on any stock exchange and of any delisting thereof. SECTION 7.07. Compensation and Indemnity. Each of the Issuers, jointly and severally, shall pay to the Trustee from time to time such compensation for its services as the Issuers and the Trustee shall from time to time agree in writing. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuers, jointly and severally, shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. Each Issuer, jointly and severally, shall indemnify the Trustee against any and all loss, liability or expense (including reasonable attorneys' fees) incurred by or in connection with the administration of this trust and the performance of its duties hereunder. The Trustee shall notify the Issuers of any claim for which it may seek indemnity promptly upon obtaining actual knowledge 31 thereof; provided, however, that any failure so to notify the Issuers shall not relieve any Issuer of its indemnity obligations hereunder. The Issuers need not reimburse any expense or indemnify against any loss, liability or expense incurred by an indemnified party through such party's own willful misconduct, gross negligence or bad faith. To secure the Issuers' payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to pay the principal of and interest and any liquidated damages on particular Securities. The Issuers' payment obligations pursuant to this Section shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy law or the resignation or removal of the Trustee. When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(7) or (8) with respect to any Issuer, the expenses are intended to constitute expenses of administration under the Bankruptcy Law. SECTION 7.08. Replacement of Trustee. The Trustee may resign at any time with respect to the Securities of any Series by so notifying the Issuers. The Holders of a majority in principal amount of the Securities of any Series may remove the Trustee and may appoint a successor Trustee with respect to such Series of Securities. The Issuers shall remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged bankrupt or insolvent; (3) a receiver or other public officer takes charge of the Trustee or its property; or (4) the Trustee otherwise becomes incapable of acting. If the Trustee resigns, is removed by the Issuers or by the Holders of a majority in principal amount of the Securities of any Series and such Holders do not reasonably promptly appoint a successor Trustee or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuers shall promptly appoint a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuers. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of that Series of Securities. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07. If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Securities of that Series may petition, at the expense of the Issuers, any court of competent jurisdiction for the appointment of a successor Trustee. 32 If the Trustee fails to comply with Section 7.10, any Holder of that Series of Securities may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Issuers' obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate-trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and if at that time any of the Securities shall not have been authenticated, any such successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have. SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of Trust Indenture Act Section 310(a). The Trustee shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with Trust Indenture Act Section 310(b); provided, however, that there shall be excluded from the operation of Trust Indenture Act Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of any Issuer are outstanding if the requirements for such exclusion set forth in Trust Indenture Act Section 310(b)(1) are met. SECTION 7.11. Preferential Collection of Claims Against Issuers. The Trustee shall comply with Trust Indenture Act Section 311(a), excluding any creditor relationship listed in Trust Indenture Act Section 311(b). A Trustee who has resigned or has been removed shall be subject to Trust Indenture Act Section 311(a) to the extent indicated. ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance. The Issuers may, at the option of their Boards of Directors evidenced by resolutions set forth in an Officers' Certificate, at any time, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Securities of any Series upon compliance with the conditions set forth below in this Article 8. 33 SECTION 8.02. Legal Defeasance and Discharge. Upon the Issuers' exercise under Section 8.01 hereof of the option applicable to this Section 8.02 with respect to any Series of Securities, the Issuers shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Securities of that Series on the date the conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that the Issuers shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Securities of that Series, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all their other obligations under such Securities and this Indenture (and the Trustee, on demand of and at the expense of the Issuers, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Securities of that Series to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of, premium, if any, and interest on such Securities when such payment are due; (b) the Issuers' obligations with respect to such Securities of that Series under Article 2, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuers' obligations in connection therewith; and (d) this Article 8. Subject to compliance with this Article 8, the Issuers may exercise their option under this Section 8.02 notwithstanding the prior exercise of their option under Section 8.03 hereof. SECTION 8.03. Covenant Defeasance. Upon the Issuers' exercise under Section 8.01 hereof of the option applicable to this Section 8.03 with respect to any Series of Securities, the Issuers shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in an Officers' Certificate, a Board Resolution or a supplemental indenture and Sections 4.02 through 4.08 and clause (iv) of Section 5.01 hereof with respect to the outstanding Securities of that Series on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the Securities of that Series shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such Securities shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Securities of that Series, the Issuers may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default with respect to such Securities under Section 6.01 hereof, but, except as specified 34 above, the remainder of this Indenture and such Securities shall be unaffected thereby. In addition, upon the Issuers' exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof with respect to any Series of Securities, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(6) and 6.01(9) hereof shall not constitute Events of Default with respect to such Securities. SECTION 8.04. Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Securities: In order to exercise either Legal Defeasance or Covenant Defeasance with respect to any Series of Securities: (1) the Issuers must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of that Series of Securities, cash in United States dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest on the outstanding Securities of that Series on the stated date for payment thereof or on the applicable redemption date, as the case may be; (2) in the case of an election under Section 8.02 hereof, the Issuers shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that: (a) the Issuers have received from, or there has been published by, the Internal Revenue Service a ruling; or (b) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Securities of that Series will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same time as would have been the case if such Legal Defeasance had not occurred; (3) in the case of an election under Section 8.03 hereof, the Issuers shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Securities of that Series will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (4) no Default or Event of Default with respect to that Series of Securities shall have occurred and be continuing either: 35 (a) on the date of such deposit (other than a Default or Event of Default with respect to that Series of Securities resulting from the borrowing of funds to be applied to such deposit); or (b) insofar as Sections 6.01(7) or 6.01(8) hereof are concerned, at any time in the period ending on the 91st day after the date of deposit; (5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Issuers or any of their Restricted Subsidiaries are a party or by which the Issuers or any of their Restricted Subsidiaries are bound; (6) the Issuers shall have delivered to the Trustee an Opinion of Counsel to the effect that on the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (7) the Issuers shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Issuers with the intent of preferring the Holders of that Series of Securities over any other creditors of the Issuers or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuers or others; and (8) the Issuers shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with. SECTION 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of any outstanding Series of Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (including any Issuer acting as Paying Agent) as the Trustee may determine, to the Holders of such Securities of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law. The Issuers shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Securities of that Series. Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Issuers from time to time upon the request of the Issuers any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public 36 accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. SECTION 8.06. Repayment to Issuers. Any money deposited with the Trustee or any Paying Agent, or then held by the Issuers, in trust for the payment of the principal of, premium, if any, or interest on any Security and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Issuers on their request or (if then held by the Issuers) shall be discharged from such trust; and the Holder of such Security shall thereafter look only to the Issuers for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuers as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuers cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Issuers. SECTION 8.07. Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 thereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Issuers' obligations under this Indenture and the Securities shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Issuers make any payment of principal of, premium, if any, or interest on any Security following the reinstatement of its obligations, the Issuers shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE 9 AMENDMENTS SECTION 9.01. Without Consent of Holders. The Issuers and the Trustee may amend this Indenture or the Securities without notice to or consent of any Holder: (1) to evidence the succession of another Person to any Issuer pursuant to Article 5 and the assumption by such successor of such Issuer's covenants, agreements and obligations in this Indenture and in the Securities; (2) to surrender any right or power conferred upon the Issuers by this Indenture, to add to the covenants of the Issuers such further covenants, restrictions, conditions or provisions for the protection of the Holders of all or any Series of Securities as the Boards of Directors of the Issuers shall consider to be for the protection of the Holders of such Securities, and to make the occurrence, or the occurrence and continuance, of a default in respect of any such additional 37 covenants, restrictions, conditions or provisions a Default or an Event of Default under this Indenture; provided, however, that with respect to any such additional covenant, restriction, condition or provision, such amendment may provide for a period of grace after default, which may be shorter or longer than that allowed in the case of other Defaults, may provide for an immediate enforcement upon such Default, may limit the remedies available to the Trustee upon such Default or may limit the right of Holders of a majority in aggregate principal amount of the Securities of any Series to waive such default; (3) to cure any ambiguity or correct or supplement any provision contained in this Indenture, in any supplemental indenture or in any Securities that may be defective or inconsistent with any other provision contained therein; (4) to convey, transfer, assign, mortgage or pledge any property to or with the Trustee, or to make such other provisions in regard to matters or questions arising under this Indenture as shall not adversely affect the interests of any Holders of Securities of any Series; (5) to modify or amend this Indenture in such a manner as to permit the qualification of this Indenture or any supplemental indenture under the Trust Indenture Act as then in effect; (6) to add or to change any of the provisions of this Indenture to provide that Securities in bearer form may be registrable as to principal, to change or eliminate any restrictions on the payment of principal or premium with respect to Securities in registered form or of principal, premium or interest with respect to Securities in bearer form, or to permit Securities in registered form to be exchanged for Securities in bearer form, so as to not adversely affect the interests of the Holders of Securities or any coupons of any Series in any material respect or permit or facilitate the issuance of Securities of any Series in uncertificated form; (7) in the case of subordinated Securities, to make any change in the provisions of this Indenture or any supplemental indenture relating to subordination that would limit or terminate the benefits available to any holder of senior Indebtedness under such provisions (but only if each such holder of senior Indebtedness consents to such change); (8) to add Guarantees with respect to the Securities or to secure the Securities; (9) to make any change that does not adversely affect the rights of any Holder; (10) to add to, change, or eliminate any of the provisions of this Indenture with respect to one or more Series of Securities, so long as any such addition, change or elimination not otherwise permitted under this Indenture shall (A) neither apply to any Security of any Series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor modify the rights of the Holders of any such Security with respect to the benefit of 38 such provision or (B) become effective only when there is no such Security outstanding; (11) to evidence and provide for the acceptance of appointment by a successor or separate Trustee with respect to the Securities of one or more Series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of this Indenture by more than one Trustee; or (12) to establish the form or terms of Securities and coupons of any Series pursuant to Article 2. SECTION 9.02. With Consent of Holders. The Issuers and the Trustee may amend this Indenture or the Securities of any Series without notice to any Holder but with the written consent of the Holders of at least a majority in principal amount of the Securities of each Series then outstanding (including consents obtained in connection with a tender offer or exchange for the Securities) affected by such amendment. However, without the consent of each Holder affected, an amendment may not: (1) make any changes to the percentage of principal amount of the outstanding Securities of any Series, the consent of whose Holders is required for any amendment, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture; (2) reduce the principal amount of, premium, if any, or interest on, or extend the Stated Maturity or interest payment periods of any Security; (3) make any Security payable in money or securities other than that stated in the Security; (4) make any change that adversely affects such Holder's right to require the Issuers to purchase the Securities in accordance with the terms thereof and this Indenture; (5) impair the right of any Holder to institute suit for the enforcement of any payment with respect to the Securities; (6) in the case of any subordinated Securities, or coupons appertaining thereto, make any change in the provisions of this Indenture relating to subordination that adversely affects the rights of any Holder under such provisions; (7) except as provided under Article 8 hereof or in accordance with the terms of any Guarantee, release any Guarantor from any of its obligations under its Guarantee or make any change in a Guarantee that would adversely affect the Holder of the Securities; or 39 (8) make any change in Section 6.04 or 6.07 or the second sentence of this Section 9.02. It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. After an amendment under this Section becomes effective, the Issuers shall mail to all affected Holders a notice briefly describing such amendment. The failure to give such notice to all such Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section. SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to this Indenture or the Securities shall comply with the Trust Indenture Act as then in effect. SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to an amendment or a waiver by a Holder of a Security shall bind the Holder and every subsequent Holder of that Security or portion of the Security that evidences the same debt as the consenting Holder's Security, even if notation of the consent or waiver is not made on the Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder's Security or portion of the Security if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective once both (i) the requisite number of consents have been received by the Issuers or the Trustee and (ii) such amendment or waiver has been executed by the Issuers and the Trustee. The Issuers may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date. SECTION 9.05. Notation on or Exchange of Securities. If an amendment changes the terms of a Security, the Trustee may require the Holder of the Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder. Alternatively, if the Issuers or the Trustee so determines, the Issuers in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment. SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this Article 9 if the amendment does not affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive indemnity satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in 40 relying upon, an Officers' Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture and that such amendment is the legal, valid and binding obligation of the Issuers enforceable against them in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03). SECTION 9.07. Payment for Consent. Neither the Issuers nor any Affiliate of the Issuers shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Securities unless such consideration is offered to be paid to all Holders, ratably, that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. ARTICLE 10 MISCELLANEOUS SECTION 10.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the Trust Indenture Act, the required provision shall control. SECTION 10.02. Notices. Any notice or communication shall be in writing and delivered in person or mailed by first-class mail addressed as follows: If to the Issuers: Jones Apparel Group, Inc. 1411 Broadway New York, New York 10018 Attention: Ira M. Dansky, Esq. with a copy to: Cravath, Swaine & Moore 825 Eighth Avenue New York, NY 10019 Attention: William V. Fogg, Esq. If to the Trustee: The Bank of New York 101 Barclay Street, Floor 21W New York, New York 10286 Attention: Corporate Trust Administration The Issuers or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. 41 Any notice or communication mailed to a Holder shall be mailed to the Holder at the Holder's address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. SECTION 10.03. Communication by Holders with Other Holders. Holders may communicate pursuant to Trust Indenture Act Section 312(b) with other Holders with respect to their rights under this Indenture or the Securities. The Issuers, the Trustee, the Registrar and anyone else shall have the protection of Trust Indenture Act Section 312(c). SECTION 10.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by any Issuer to the Trustee to take or refrain from taking any action under this Indenture, such Issuer shall furnish to the Trustee: (1) an Officers' Certificate of such Issuer in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with. SECTION 10.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include: (1) a statement that the individual making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with. SECTION 10.06. When Securities Disregarded. In determining whether the Holders of the required principal amount of Securities have concurred in any direction, waiver or consent, Securities owned by any Issuer, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with 42 any Issuer shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. Subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination. SECTION 10.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar and the Paying Agent may make reasonable rules for their functions. SECTION 10.08. Legal Holidays. A "Legal Holiday" is a Saturday, Sunday or other day on which banking institutions in New York State are authorized or required by law to close. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected. SECTION 10.09. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. SECTION 10.10. No Recourse Against Others. A director, officer, employee or shareholder, as such, of any Issuer shall not have any liability for any obligations of such Issuer under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issuance of the Securities. SECTION 10.11. Successors. All agreements of each Issuer in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 10.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy of the Indenture is enough to prove this Indenture. SECTION 10.13. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. SECTION 10.14. Severability. If any provision in this Indenture is deemed unenforceable, it shall not affect the validity or enforceability of any other provision set forth herein, or of the Indenture as a whole. 43 IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. JONES APPAREL GROUP, INC. By: ----------------------------- Name: Title: JONES APPAREL GROUP HOLDINGS, INC. By: ----------------------------- Name: Title: JONES APPAREL GROUP USA, INC. By: ------------------------------ Name: Title: NINE WEST GROUP INC. By: ------------------------------ Name: Title: THE BANK OF NEW YORK, as Trustee By: ------------------------------ Name: Title: 44 EX-5.1 4 0004.txt OPINION Exhibit 5.1 Opinion of Ira M. Dansky, Esq. April 9, 2001 U. S. Securities and Exchange Commission Judiciary Plaza 450 Fifth Street, N.W. Washington, D.C. 20549 Registration Statement on Form S-3 ---------------------------------- Ladies and Gentlemen: I am General Counsel of Jones Apparel Group, Inc., a Pennsylvania corporation (the "Company"), and in such capacity I have represented the Company and its subsidiaries, Jones Apparel Group Holdings, Inc., a Delaware corporation ("Holdings"), Jones Apparel Group USA, Inc., a Pennsylvania corporation ("Jones USA"), and Nine West Group Inc., a Delaware corporation ("Nine West" and together with Jones, Holdings and Jones USA, the "Issuers"), in connection with the filing by the Issuers with the Securities and Exchange Commission (the "Commission") of a Registration Statement on Form S-3 (the "Registration Statement") relating to (i) debt securities of the Issuers (the "Debt Securities"); (ii) warrants to purchase Debt Securities (the "Debt Warrants"); (iii) shares of preferred stock of the Company (the "Preferred Stock"); (iv) shares of common stock, $.01 par value per share, of the Company (the "Common Stock"); and (v) warrants to purchase shares of Common Stock or Preferred Stock (the "Stock Warrants"). The Debt Warrants and the Stock Warrants are referred to herein as the "Warrants", and the Debt Securities, Preferred Stock, Common Stock and the Warrants are referred to herein collectively as the "Offered Securities". The Offered Securities being registered under the Registration Statement will be offered on a continued or delayed basis pursuant to the provisions of Rule 415 under the Securities Act of 1933, (the "Securities Act"). Unless otherwise provided in any prospectus supplement forming a part of the Registration Statement 2 relating to a particular series of Debt Securities, the Debt Securities will be issued under an Indenture in the form of Exhibit 4.2 to the Registration Statement (the "Indenture") to be executed by the Issuers and The Bank of New York, as Trustee (the "Trustee"). The Preferred Stock will be issued pursuant to a statement with respect to shares (the "Statement with Respect to Shares") relating to a particular series of Preferred Stock. The Warrants will be issued under one or more warrant agreements (each, a "Warrant Agreement"), each to be entered into between the Company, or, in the case of Debt Warrants, the Issuers, and one or more institutions as identified in the applicable Warrant Agreement. In connection with the foregoing, I have examined originals, or copies certified or otherwise identified to my satisfaction, of such documents, corporate records and other instruments as I have deemed necessary for the purposes of this opinion, including without limitation the following: (a) the Articles or Certificate of Incorporation of each Issuer, as amended or restated; (b) the By-laws of each Issuer, as amended or restated; (c) the form of the Underwriting Agreement attached as Exhibit 4.1 to the Registration Statement; (d) the form of Indenture attached as Exhibit 4.2 the Registration Statement; and (e) resolutions adopted by the Board of Directors of each Issuer. Based on the foregoing and subject to the qualifications hereinafter set forth and assuming that: (i) the Registration Statement and any amendments thereto (including post-effective amendments) will have become effective and comply with all applicable laws; (ii) the Registration Statement will be effective and will comply with all applicable laws at the time the Offered Securities are offered or issued as contemplated by the Registration Statement; (iii) a prospectus supplement will have been prepared and filed with the Commission describing the Offered Securities offered thereby and will comply with all applicable laws; (iv) all Offered Securities will be issued and sold in compliance with applicable federal and state securities laws and in the manner stated in the Registration Statement and the appropriate prospectus supplement; (v) a definitive purchase, underwriting or similar agreement and any other necessary agreement with respect to any Offered Securities offered or issued will have been duly authorized 3 and validly executed and delivered by the Company, or, in the case of Debt Securities or Debt Warrants, the Issuers and the other parties thereto; and (vi) any Offered Securities issuable upon conversion, exchange or exercise of any Offered Security being offered or issued will be duly authorized, created and, if appropriate, reserved for issuance upon such conversion, exchange or exercise, I am of the opinion as follows: (1) Each of Jones Holdings and Nine West has been duly incorporated and is a validly existing corporation under the laws of the State of Delaware. (2) With respect to Debt Securities to be issued under the Indenture, when (A) the Trustee is qualified to act as Trustee under the Indenture, (B) the Trustee has duly authorized and validly executed and delivered the Indenture, (C) the Indenture has been duly authorized and validly executed and delivered by the Issuers to the Trustee, (D) the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended, (E) the Board of Directors of each Issuer, a duly constituted and acting committee thereof or a duly authorized officer of such Issuer (each such Board of Directors, committee or authorized officer being hereinafter referred to as a "Board") has taken all necessary corporate action to approve the issuance and terms of such Debt Securities, the terms of the offering thereof and related matters, and (F) such Debt Securities have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture, and the applicable definitive purchase, underwriting or similar agreement approved by the Boards of the Issuers upon payment of the consideration therefor provided for therein, such Debt Securities will be validly issued and will constitute valid and binding obligations of the Issuers, enforceable against the Issuers in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, transfer, moratorium, fraudulent conveyance and other similar laws affecting creditors' rights generally from time to time in effect and subject to general principles of equity (including, without limitation, concepts of materiality, good faith and fair dealing), regardless of whether considered in a proceeding in equity or at law. With respect to the 4 foregoing opinion, (i) insofar as provisions contained in any document provide for indemnification, the enforceability thereof may be limited by public policy consideration are (ii) the availability of a decree for specific performance or an injunction is subject to the discretion of the court requested to issue any such decree or injunction. (3) With respect to shares of Preferred Stock, when both (A) the Board of the Company has taken all necessary corporate action to approve the issuance and terms of the shares of Preferred Stock, the terms of the offering thereof and related matters, including the adoption of a resolution relating to such Preferred Stock and the filing of a Statement with Respect to Shares with the Secretary of the Commonwealth of Pennsylvania, and (B) certificates representing the shares of Preferred Stock have been duly executed, countersigned, registered and delivered either (i) in accordance with the applicable definitive purchase, underwriting or similar agreement approved by the Board of the Company upon payment of the consideration therefor provided for therein or (ii) upon conversion or exercise of any other Offered Security, in accordance with the terms of such Offered Security or the instrument governing such Offered Security providing for such conversion or exercise as approved by the Board of the Company, for the consideration approved by the Board of the Company, then the shares of Preferred Stock will be validly issued, fully paid and nonassessable. (4) With respect to shares of Common Stock, when both (A) the Board of the Company has taken all necessary corporate action to approve the issuance of and the terms of the offering of the shares of Common Stock and related matters and (B) certificates representing the shares of Common Stock have been duly executed, countersigned, registered and delivered either (i) in accordance with the applicable definitive purchase, underwriting or similar agreement approved by the Board of the Company upon payment of the consideration therefor provided for therein or (ii) upon conversion or exercise of any other Offered Security, in accordance with the terms of such Offered Security or the instrument governing such Offered 5 Security providing for such conversion or exercise as approved by the Board of the Company, or, in the case of Debt Securities or Debt Warrants, the Boards of the Issuers, for the consideration approved by the Board of the Company, then the shares of Common Stock will be validly issued, fully paid and nonassessable. (5) With respect to the Warrants, when (A) the Board of the Company, or, in the case of Debt Warrants, the Boards of the Issuers have taken all necessary corporate action to approve the creation of and the issuance and terms of the Warrants, the terms of the offering thereof and related matters, (B) the Warrant Agreement or Agreements relating to the Warrants have been duly authorized and validly executed and delivered by the Company, or in the case of Debt Warrants, the Issuers, and the warrant agent appointed by the Company and (C) the Warrants or certificates representing the Warrants have been duly executed, countersigned, registered and delivered in accordance with the appropriate Warrant Agreement or Agreements and the applicable definitive purchase, underwriting or similar agreement approved by the Board of the Company, or in the case of Debt Warrants, the Boards of the Issuers, upon payment of the consideration therefor provided for therein, the Warrants will be validly issued. In rendering this opinion, I have relied upon the opinion dated April 9, 2001, of Schnader Harrison Segal & Lewis LLP, a copy of which appears as Exhibit 5.2 to the Registration Statement, as to all matters of law covered therein relating to the laws of the Commonwealth of Pennsylvania. I am are aware that I am are referred to under the heading "Validity of Securities" in the prospectus forming a part of the Registration Statement, and I hereby consent to such use of my name therein and to the use of this opinion for filing with the Registration Statement as Exhibit 5.1 thereto. In giving this consent, I do not hereby admit that I am within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission promulgated thereunder. 6 I am admitted to practice in the State of New York, and I express no opinion as to any matters governed by any law other than the laws of the State of New York, the General Corporation Law of the State of Delaware and the Federal laws of the United States of America. Very truly yours, /s/ Ira M. Dansky, Esq. Ira M. Dansky, Esq. General Counsel EX-5.2 5 0005.txt OPINION Exhibit 5.2 Opinion of Schnader Harrison Segal & Lewis LLP April 9, 2001 Ira M. Dansky, Esquire Jones Apparel Group, Inc. 1411 Broadway New York, NY 10018 Re: Jones Apparel Group, Inc., Jones Apparel Group USA, Inc., Jones Apparel Group Holdings, Inc. and Nine West Group Inc. Registration Statement on Form S-3 Dear Mr. Dansky: As special Pennsylvania counsel to Jones Apparel Group, Inc., a Pennsylvania corporation (the "Company") and Jones Apparel Group USA, Inc., a Pennsylvania corporation ("Jones Apparel Group USA") (collectively, the "Pennsylvania Issuers"), we have been requested to render this opinion in connection with the filing by the Pennsylvania Issuers, Jones Apparel Group Holdings, Inc., a Delaware corporation, and Nine West Group Inc., a Delaware corporation (collectively, the "Issuers") with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act") of a Registration Statement on Form S-3 (the "Registration Statement") relating to (i) debt securities of the Issuers (the "Debt Securities"); (ii) warrants to purchase Debt Securities (the "Debt Warrants"); (iii) shares of preferred stock of the Company (the "Preferred Stock"); (iv) common stock, $.01 par value per share, of the Company (the "Common Stock"); and (v) warrants to purchase shares of Common Stock or Preferred Stock (the "Stock Warrants"). The Debt Warrants and the Stock Warrants are referred to herein as the "Warrants", and the Debt Securities, Preferred Stock, Common Stock and the Warrants are referred to herein collectively as the "Offered Securities". The Offered Securities being registered under the Registration Statement will be offered on a continued or delayed basis pursuant to the provisions of Rule 415 under the Securities Act. Unless otherwise provided in any prospectus supplement forming a part of the Registration Statement relating to a particular series of Debt Securities, the Debt Securities will be issued under an Indenture in the form of Exhibit 4.2 to the Registration Statement (the "Indenture") to be executed by the Issuers and The Bank of New York, as Trustee (the "Trustee"). The Preferred Stock will be issued pursuant to a statement with respect to shares (the "Statement with Respect to Shares") relating to a particular series of Preferred Stock. The Warrants will be issued under one or more warrant agreements (each, a "Warrant Agreement"), each to be entered into between the Company, or, in the case of Debt Warrants, the Issuers, and one or more institutions as identified in the applicable Warrant Agreement. For purposes of this opinion we have examined the Registration Statement; the Subsistence Certificates dated April 5, 2001 issued by the Secretary of the Commonwealth of Pennsylvania with respect to each of the Pennsylvania Issuers; and such other documents as we deemed necessary for the purpose of rendering this opinion. With respect to the foregoing documents, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to originals of all documents submitted to us as certified, facsimiled or reproduced copies. As special Pennsylvania counsel to the Pennsylvania Issuers, we are not necessarily familiar with all of the Pennsylvania Issuers' affairs. As a further basis for this opinion, we have made such inquiry of the Pennsylvania Issuers as we have deemed necessary or appropriate for the purpose of rendering this opinion. Based on the foregoing and subject to the qualifications hereinafter set forth and assuming that: (i) the Registration Statement and any amendments thereto (including post-effective amendments) will have become effective and comply with all applicable laws; (ii) the Registration Statement will be effective and will comply with 2 all applicable laws at the time the Offered Securities are offered or issued as contemplated by the Registration Statement; (iii) a prospectus supplement will have been prepared and filed with the Commission describing the Offered Securities offered thereby and will comply with all applicable laws; (iv) all Offered Securities will be issued and sold in compliance with applicable federal and state securities laws and in the manner stated in the Registration Statement and the appropriate prospectus supplement; (v) a definitive purchase, underwriting or similar agreement and any other necessary agreement with respect to any Offered Securities offered or issued will have been duly authorized and validly executed and delivered by the Company, or, in the case of Debt Securities or Debt Warrants, the Issuers and the other parties thereto; and (vi) any Offered Securities issuable upon conversion, exchange or exercise of any Offered Security being offered or issued will be duly authorized, created and, if appropriate, reserved for issuance upon such conversion, exchange or exercise, we are of the opinion as follows: (1) Each of the Pennsylvania Issuers is a corporation duly organized and validly subsisting under the laws of the Commonwealth of Pennsylvania. (2) With respect to Debt Securities to be issued under the Indenture, when (A) the Trustee is qualified to act as Trustee under the Indenture, (B) the Trustee has duly authorized and validly executed and delivered the Indenture, (C) the Indenture has been duly authorized and validly executed and delivered by the Issuers to the Trustee, (D) the Indenture has been duly qualified under the Trust Indenture Act of 1939, as amended, (E) the Board of Directors of each Issuer or a duly constituted and acting committee thereof (each such Board of Directors or committee being hereinafter referred to as a "Board") has taken all necessary corporate action to approve the issuance and terms of such Debt Securities, the terms of the offering thereof and related matters, and (F) such Debt Securities have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture, and the applicable definitive purchase, underwriting or similar agreement approved by the Boards of the Issuers upon payment of the consideration therefor provided for therein, such Debt Securities will be validly issued by the Pennsylvania Issuers and will constitute valid and binding obligations of the Pennsylvania Issuers, enforceable against the Pennsylvania Issuers in accordance with their terms (subject, as to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors' rights generally as the same may relate to the Pennsylvania Issuers and to general equitable principles). (3) With respect to shares of Preferred Stock, when both (A) the Board of the Company has taken all necessary corporate action to approve the issuance and terms of the shares of Preferred Stock, the terms of the offering thereof and related matters, including the adoption of a resolution relating to such Preferred Stock and the filing of the Statement with Respect to Shares with the Secretary of the Commonwealth of Pennsylvania, and (B) certificates representing the shares of Preferred Stock have been duly executed, countersigned, registered and delivered either (i) in accordance with the applicable definitive purchase, underwriting or similar agreement approved by the Board of the Company upon payment of the consideration therefor provided for therein or (ii) upon conversion or exercise of any other Offered Security, in accordance with the terms of such Offered Security or the instrument governing such Offered Security providing for such conversion or exercise as approved by the Board of the Company, for the consideration approved by the Board of the Company, then the shares of Preferred Stock will be validly issued, fully paid and nonassessable. (4) With respect to shares of Common Stock, when both (A) the Board of the Company has taken all necessary corporate action to approve the issuance of and the terms of the offering of the shares of Common Stock and related matters and (B) certificates representing the shares of Common Stock have been duly executed, countersigned, registered and delivered either (i) in accordance with the applicable definitive purchase, underwriting or similar agreement approved by the Board of the Company upon payment of the consideration therefor provided for therein or (ii) upon conversion or exercise of any other Offered Security, in accordance with the terms of such Offered Security or the instrument governing such Offered Security providing for such conversion or exercise as approved by the Board of the Company, or, in the case of Debt Securities, the Boards of the Issuers, for the consideration approved by the Board of the Company, then the shares of Common Stock will be validly issued, fully paid and nonassessable. 3 (5) With respect to the Warrants, when (A) the Board of the Company, or, in the case of Debt Warrants, the Boards of the Issuers have taken all necessary corporate action to approve the creation of and the issuance and terms of the Warrants, the terms of the offering thereof and related matters, (B) the Warrant Agreement or Agreements relating to the Warrants have been duly authorized and validly executed and delivered by the Company, or in the case of Debt Warrants, the Issuers, and the warrant agent appointed by the Company and (C) the Warrants or certificates representing the Warrants have been duly executed, countersigned, registered and delivered in accordance with the appropriate Warrant Agreement or Agreements and the applicable definitive purchase, underwriting or similar agreement approved by the Board of the Company, or in the case of Debt Warrants, the Boards of the Issuers, upon payment of the consideration therefor provided for therein, the Warrants will be validly issued by the Pennsylvania Issuers. We are attorneys admitted to practice in the Commonwealth of Pennsylvania, and we express no opinion as to the laws of any jurisdiction, other than the corporate laws of the Commonwealth of Pennsylvania and the United States of America. Our examination of law relevant to the matters covered by this opinion is limited to Federal law and Pennsylvania law. This opinion is given as of the date hereof and is limited to the facts, circumstances and matters set forth herein and to laws currently in effect. No opinion may be inferred or is implied beyond matters expressly set forth herein, and we do not undertake and assume no obligations to update or supplement this opinion to reflect any facts or circumstances which may hereafter come to our attention or any change in law which may hereafter occur. This opinion is furnished for your benefit only and may not be used or relied upon by any other person or entity or in connection with any other transaction without in each instance our prior written consent. We hereby consent to the reference to this Firm under the heading "Validity of Securities" in the Registration Statement and in the related prospectus and to the filing of this opinion as an exhibit to the Registration Statement. Sincerely, /s/ SCHNADER HARRISON SEGAL & LEWIS LLP EX-12 6 0006.txt RATIO OF EARNINGS TO FIXED CHARGES Exhibit 12.1 Computation of Ratio of Earnings to Fixed Charges (in millions, except ratios) Year Ended December 31 2000 1999 1998 1997 1996 ---- ---- ---- ---- ---- Income before income taxes.......... $503.1 $314.6 $251.8 $194.6 $127.8 Fixed charges: Interest expense and amortization of financing costs........................... $103.8 $ 66.9 $ 11.8 $ 3.6 $ 3.0 Portion of rent expense representing interest........... 50.7 35.4 9.1 7.4 6.3 ------ ----- ------ ------ ------ Total fixed charges excluding capitalized interest............ 154.5 102.3 20.9 11.0 9.3 Capitalized interest............ -- -- 0.7 0.3 0.2 ------ ------ ------ ------ ------ Total fixed charges............. $154.5 $102.3 $ 21.6 $ 11.3 $ 9.5 ====== ====== ====== ====== ====== Income before income taxes and fixed charges............... $657.6 $416.9 $272.7 $205.6 $137.1 Ratio of earnings to fixed charges......................... 4.3 4.1 12.6 18.2 14.4 EX-23 7 0007.txt CONSENT Exhibit 23.1 Consent of BDO Seidman Jones Apparel Group, Inc. Jones Apparel Group Holdings, Inc. Jones Apparel Group USA, Inc. Nine West Group Inc. New York, New York We hereby consent to the incorporation by reference in the Prospectus constituting a part of the Registration Statement on Form S-3 of our report dated February 2, 2001, relating to the consolidated financial statements of Jones Apparel Group, Inc. and subsidiaries appearing in the Company's Annual Report on Form 10-K for the year ended December 31, 2000. We also consent to the reference to us under the caption "Experts" in the Prospectus. /s/ BDO Seidman, LLP New York, New York April 9, 2001 EX-25 8 0008.txt FORM T-1 Exhibit 25.1 FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) JONES APPAREL GROUP, INC. (Exact name of obligor as specified in its charter) Pennsylvania 06-0935166 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) JONES APPAREL GROUP HOLDINGS, INC. (Exact name of obligor as specified in its charter) Delaware 51-0384507 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) JONES APPAREL GROUP USA, INC. (Exact name of obligor as specified in its charter) Pennsylvania 23-2978516 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) NINE WEST GROUP INC. (Exact name of obligor as specified in its charter) Delaware 06-1093855 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 2 . 250 Rittenhouse Circle Bristol, Pennsylvania 19007 (Address of principal executive offices) (Zip code) ----------------- Debt Securities 3 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. - ----------------------------------------------------------------------------- Name Address - ----------------------------------------------------------------------------- Superintendent of Banks of the State 2 Rector Street, of New York New York, NY 10006, and Albany, NY 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, NY 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, NY 10005 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligors. If the obligors are affiliates of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. 4 SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 6th day of April, 2001. THE BANK OF NEW YORK By: /s/ THOMAS E. TABOR -------------------------------- Name: THOMAS E. TABOR Title: ASSISTANT VICE PRESIDENT 5 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2000, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act. Dollar Amounts ASSETS In Thousands Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin...... $3,083,720 Interest-bearing balances............................ 4,949,333 Securities: Held-to-maturity securities.......................... 740,315 Available-for-sale securities........................ 5,328,981 Federal funds sold and Securities purchased under agreements to resell................................. 5,695,708 Loans and lease financing receivables: Loans and leases, net of unearned income............................................ 36,590,456 LESS: Allowance for loan and lease losses...................................... 598,536 LESS: Allocated transfer risk reserve........................................... 12,575 Loans and leases, net of unearned income, allowance, and reserve....................................... 35,979,345 Trading Assets 11,912,448 Premises and fixed assets (including capitalized leases) 763,241 Other real estate owned................................. 2,925 Investments in unconsolidated subsidiaries and associated companies................................. 183,836 Customers' liability to this bank on acceptances outstanding.......................................... 424,303 Intangible assets....................................... 1,378,477 Other assets............................................ 3,823,797 ------------- Total assets............................................ $74,266,429 ============= LIABILITIES Deposits: In domestic offices.................................. $28,328,548 Noninterest-bearing.................................. 12,637,384 Interest-bearing..................................... 15,691,164 In foreign offices, Edge and Agreement subsidiaries, and IBFs.......................................... 27,920,690 Noninterest-bearing.................................. 470,130 Interest-bearing..................................... 27,450,560 Federal funds purchased and Securities sold under agreements to repurchase............................. 1,437,916 Demand notes issued to the U.S. Treasury................ 100,000 Trading liabilities..................................... 2,049,818 Other borrowed money: With remaining maturity of one year or less.......... 1,279,125 6 With remaining maturity of more than one year through three years............................... 0 With remaining maturity of more than three years..... 31,080 Bank's liability on acceptances executed and outstanding.......................................... 427,110 Subordinated notes and debentures....................... 1,646,000 Other liabilities....................................... 4,604,478 ------------- Total liabilities....................................... 67,824,765 ------------ EQUITY CAPITAL Common Stock............................................ 1,135,285 Surplus................................................. 1,008,775 Undivided profits and capital reserves.................. 4,308,492 Net unrealized holding gains (losses) on available-for- sale securities...................................... 27,768 Accumulated net gains (losses) on cash flow hedges 0 Cumulative foreign currency translation adjustments..... ( 38,656) -------------- Total equity capital.................................... 6,441,664 -------------- Total liabilities and equity capital.................... $74,266,429 ------------- 7 I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true to the best of my knowledge and belief. Thomas J. Mastro 8 We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the Board of Governors of the Federal Reserve System and is true and correct. Thomas A. Renyi Directors Alan R. Griffith Gerald L. Hassell -----END PRIVACY-ENHANCED MESSAGE-----