Summary of JONES APPAREL GROUP INC

Item 1.01 Entry into a Material Definitive Agreement.

On May 13, 2009, Jones Apparel Group, Inc. (the "Company") entered into a new Credit Agreement (the "Credit Agreement") among the Company, Jones Apparel Group Holdings, Inc. ("Jones Holdings"), Jones Apparel Group USA, Inc. ("Jones USA"), Jones Retail Corporation ("Jones Retail"), Nine West Footwear Corporation ("Nine West"), Energie Knitwear, Inc., Jones Investment Co. Inc., Jones Jeanswear Group, Inc., L.E.I. Group, Inc., Nine West Development Corporation and Victoria
+ Co Ltd., as U.S. Borrowers (the "U.S. Borrowers"), Jones Apparel Group Canada, LP, as Canadian Borrower (the "Canadian Borrower" and, together with the U.S. Borrowers, the "Borrowers"), the other Loan Parties party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent (the "Administrative Agent"), JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian administrative agent, JPMorgan Chase Bank, N.A. and General Electric Capital Corporation, as joint collateral agents, Citibank, N.A., as syndication agent, and Bank of America, N.A., Wachovia Bank, National Association and SunTrust Bank, as documentation agents. The Credit Agreement consists of a senior secured three-year revolving credit facility (the "Credit Facility") in an aggregate principal amount of $650,000,000, a portion of which is available for letters of credit and swingline loans for the Borrowers. Subject to certain conditions, the Borrowers have the right to increase the aggregate commitments under the Credit Facility up to $700,000,000. The material terms of the Credit Agreement include the following:

Availability. Availability under the Credit Facility is the lesser of (a) $650,000,000 and (b) a borrowing base consisting of the Borrowers' eligible domestic and foreign accounts receivable, credit card receivables, inventory and domestic and foreign licensee receivables, minus the outstanding loans and letters of credit under the Credit Facility and a capped amount of obligations related to open account paying agency agreements.

Maturity. The Credit Facility will mature, and the commitments thereunder will terminate, on March 13, 2012.

Use of Proceeds. The proceeds of the Credit Facility may be used for general corporate purposes, to repay the Company's, Jones Holdings', Jones USA's, Nine West's and Jones Retail's 4.250% Senior Notes due 2009 (including in connection with the recent tender offer), and to repay amounts outstanding under the Prior Credit Agreement (as defined below).

Interest Rate and Fees. Outstanding borrowings under the Credit Facility initially accrue interest at an annual rate of interest equal to (i) a base rate or Canadian prime rate, as applicable, plus 3.5%, or (ii) a Eurocurrency rate or a discount rate applicable to bankers' acceptances, as applicable, plus 4.5%. Following the last day of the second fiscal quarter ending after May 13, 2009, the applicable margins will be subject to adjustments based on availability under the Credit Facility. The Borrowers will pay certain fees, including (i) a commitment fee of 1.00% per annum on the undrawn portion of the facility (subject to stepdowns based on the percent of the commitments utilized under the facility), (ii) a standby letter of credit fee at a rate per annum equal to the interest rate applicable to Eurodollar loans and a trade letter of credit fee at a rate equal to 50% of the rate applicable to standby letters of credit, in each case on the daily maximum amount to be drawn under all such letters of credit, (iii) a fronting fee of 0.1% per annum on the average daily maximum amount to be drawn under all standby letters of credit and (iv) customary annual administration fees.

Mandatory Prepayments. Subject to certain conditions and exceptions, at any time that the Borrowers are subject to cash dominion, as described below, the Borrowers will be required to prepay outstanding borrowings in an amount equal to 100% of the net proceeds from the sale or transfer of assets, the sale of any common stock or other equity, the incurrence of debt and any insurance proceeds or condemnation awards. Such mandatory prepayments will not permanently reduce the available commitments under the Credit Facility.

Voluntary Prepayments; Voluntary Commitment Reductions. Subject to certain conditions and restrictions, the Credit Facility allows the Borrowers to voluntarily reduce the amount of the commitments and to prepay outstanding loans.

Covenants. The Credit Facility contains affirmative and negative covenants that, among other things, limit or restrict the ability of the Loan Parties to: incur indebtedness; create liens; merge, consolidate, liquidate or dissolve; sell assets; make investments (including acquisitions); make certain restricted payments (including dividends and other payments in respect of capital stock); make loans and advances; enter into sale and leaseback transactions or swap agreements; make payments and modifications of subordinated and other debt instruments; enter into transactions with affiliates; enter into restrictive agreements; make changes to the Company's fiscal year and amend material documents. In addition, the Company will be required to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 when availability under the Credit Facility is less than 15% (or less than 17.5%, if the Second Lien Transaction (as defined below) has been consummated) of the aggregate revolving commitments.

Guarantees and Collateral. The U.S. obligations (which include banking services obligations, swap obligations and certain obligations related to open account agreements of the U.S. Loan Parties) under the Credit Facility are unconditionally guaranteed jointly and severally on a senior secured basis by the U.S. Loan Parties and, subject to certain exceptions, all direct or indirect domestic subsidiaries, foreign subsidiaries (to the extent that adverse tax consequences do not arise) and subsequently acquired or organized subsidiaries of the Company. The Canadian obligations (which include banking services obligations, swap obligations and obligations related to certain open account agreements of the Canadian Loan Parties) are unconditionally guaranteed jointly and severally on a senior secured basis by the U.S. Borrowers and certain Canadian subsidiaries of the Company.

The Borrowers' obligations under the Credit Facility and the related guarantees are secured by a perfected first-priority security interest in the personal property of, in the case of the obligations and guarantees for the benefit of the Canadian Lender Parties, the U.S. Borrowers and certain Canadian subsidiaries, and, in the case of obligations and guarantees for the benefit of all of the Lender Parties, the U.S. Borrowers and their subsidiaries, including, without limitation, credit card receivables, accounts receivable, general intangibles, letter-of-credit rights, chattel paper, instruments, investment . . .