{"id":41149,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/management-loan-note-instrument-the-jones-group-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"management-loan-note-instrument-the-jones-group-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/management-loan-note-instrument-the-jones-group-inc.html","title":{"rendered":"Management Loan Note Instrument – The Jones Group Inc."},"content":{"rendered":"\n\n\n\n\n\n\n
\n

Management Loan Note Instrument<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

Constituting the issue of up to 6,217,995 Unsecured Fixed Rate Guaranteed
\nLoan Notes of Jones Apparel Group Holdings, Inc.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n<\/tr>\n
\n

Dated 2 June 2011<\/p>\n<\/td>\n<\/tr>\n

\n

These notes are issued pursuant to this Instrument<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n

TABLE OF CONTENTS<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

INTRODUCTION<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

\n

OPERATIVE PROVISIONS<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

\n

1<\/p>\n<\/td>\n

\n

Definitions and Interpretation<\/p>\n<\/td>\n

\n

3<\/p>\n<\/td>\n<\/tr>\n

\n

2<\/p>\n<\/td>\n

\n

Constitution of the Notes<\/p>\n<\/td>\n

\n

6<\/p>\n<\/td>\n<\/tr>\n

\n

3<\/p>\n<\/td>\n

\n

Interest<\/p>\n<\/td>\n

\n

6<\/p>\n<\/td>\n<\/tr>\n

\n

4<\/p>\n<\/td>\n

\n

Ranking<\/p>\n<\/td>\n

\n

7<\/p>\n<\/td>\n<\/tr>\n

\n

5<\/p>\n<\/td>\n

\n

Redemption<\/p>\n<\/td>\n

\n

7<\/p>\n<\/td>\n<\/tr>\n

\n

6<\/p>\n<\/td>\n

\n

Further Notes<\/p>\n<\/td>\n

\n

8<\/p>\n<\/td>\n<\/tr>\n

\n

7<\/p>\n<\/td>\n

\n

Certificates<\/p>\n<\/td>\n

\n

8<\/p>\n<\/td>\n<\/tr>\n

\n

8<\/p>\n<\/td>\n

\n

Register<\/p>\n<\/td>\n

\n

8<\/p>\n<\/td>\n<\/tr>\n

\n

9<\/p>\n<\/td>\n

\n

Obligations of the Company<\/p>\n<\/td>\n

\n

8<\/p>\n<\/td>\n<\/tr>\n

\n

10<\/p>\n<\/td>\n

\n

Modification of the Deed<\/p>\n<\/td>\n

\n

9<\/p>\n<\/td>\n<\/tr>\n

\n

11<\/p>\n<\/td>\n

\n

Rights of Third Parties<\/p>\n<\/td>\n

\n

9<\/p>\n<\/td>\n<\/tr>\n

\n

12<\/p>\n<\/td>\n

\n

Governing law and jurisdiction<\/p>\n<\/td>\n

\n

9<\/p>\n<\/td>\n<\/tr>\n

\n

SCHEDULE 1 – Certificate and Conditions<\/p>\n<\/td>\n

\n

10<\/p>\n<\/td>\n<\/tr>\n

\n

SCHEDULE 2 – Provisions as to registration, transfer, etc.<\/p>\n<\/td>\n

\n

17<\/p>\n<\/td>\n<\/tr>\n

\n

SCHEDULE 3 – Provisions for Meetings of Noteholders<\/p>\n<\/td>\n

\n

19<\/p>\n<\/td>\n<\/tr>\n

\n

SCHEDULE 4 – Form of Bank Guarantee<\/p>\n<\/td>\n

\n

25<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n\n\n\n\n\n
<\/td>\n\n

DATE<\/p>\n<\/td>\n

\n

2 June 2011<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

PARTIES<\/p>\n<\/td>\n<\/tr>\n

\n

(1)<\/p>\n<\/td>\n

\n

JONES APPAREL GROUP HOLDINGS, INC. a corporation incorporated under the laws
\nof the state of Delaware, United States of America, whose principal place of
\nbusiness is at 1007 Orange Street, Suite 225, Wilmington, Delaware 19801, the
\nU.S.A. (the “Company”).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n\n

INTRODUCTION<\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

(A)<\/p>\n<\/td>\n

\n

The Company by a resolution of its board of directors passed on the same date
\nas this Deed created 6,217,995 unsecured fixed rate guaranteed notes to be
\nconstituted under this Deed.<\/p>\n

OPERATIVE PROVISIONS<\/p>\n<\/td>\n<\/tr>\n

\n

1 <\/strong><\/p>\n<\/td>\n

\n

Definitions and Interpretation<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

1.1<\/p>\n<\/td>\n

\n

In this Deed the following terms shall have the following meanings:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Articles<\/p>\n<\/td>\n

\n

the certificate of incorporation of the Company in the form adopted on the
\ndate hereof<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Bad Leaver<\/p>\n<\/td>\n

\n

a Leaver who ceases to be an employee as a result of his or her resignation
\nor who has given notice terminating such employment (save where such resignation
\nor notice of termination served by the employee in question arises in
\ncircumstances constituting constructive dismissal)<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Board<\/p>\n<\/td>\n

\n

the board of directors of the Company from time to time<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Business Day<\/p>\n<\/td>\n

\n

a day other than a Saturday or Sunday when clearing banks generally are open
\nfor normal banking business in London and New York<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

conditions<\/p>\n<\/td>\n

\n

the conditions of the Notes in the form set out in Schedule 1<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Dollar Guarantee Cap<\/p>\n<\/td>\n

\n

an amount which is equal to 1.3125 times the principal sum outstanding on all
\nNotes for the time being in issue (such amount being expressed in US Dollars
\napplying the then prevailing Guarantee Exchange Rate)<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Execution Date<\/p>\n<\/td>\n

\n

the date of this Deed<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Extraordinary Resolution<\/p>\n<\/td>\n

\n

a resolution passed at a meeting of the Noteholders duly convened and held in
\naccordance with the provisions of Schedule 3 by:<\/p>\n

(a) a majority consisting of more than 75 per cent of the persons voting at
\nthe meeting upon a show of hands; or<\/p>\n

(b) if a poll is demanded, by a majority consisting of more than three
\nquarters of the votes given on the poll; or<\/p>\n

a resolution in writing passed accordance with condition 21.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-3-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n\n

Family Trust<\/p>\n<\/td>\n

\n

as regards any individual, a trust under which no immediate beneficial
\ninterest in any of the Notes is for the time being vested in any person other
\nthan the individual or Relatives of the individual and by virtue of which no
\nvoting or other rights attaching thereto are or may become liable to be
\nexercisable by or as directed by or subject to the consent of any person other
\nthan the individual and Relatives of the individual or the trustees as trustees
\nof such trust<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Final Redemption Date<\/p>\n<\/td>\n

\n

10 April 2016<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

First Redemption Date<\/p>\n<\/td>\n

\n

the earlier of (i) the date of signature of the KG Group’s audited
\nconsolidated financial statements for the financial year ending 31 December 2014
\nand (ii) 31 March 2015<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Fixed Interest<\/p>\n<\/td>\n

\n

interest payable on the Notes in accordance with condition 2<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Fixed Interest Rate<\/p>\n<\/td>\n

\n

5 per cent. per annum<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

FSMA<\/p>\n<\/td>\n

\n

the Financial Services and Markets Act 2000<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Guarantee<\/p>\n<\/td>\n

\n

the guarantees to be executed and delivered by the Guarantor to and in favour
\nof the Noteholders (substantially in the form set out in schedule 4), in
\naccordance with clause 4 of this Deed, for an aggregate sum equal to the
\nGuarantee Amount<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Guarantee Amount<\/p>\n<\/td>\n

\n

US$ 13,500,000, or such other amount as may be determined to be the Guarantee
\nAmount during any Guarantee Review Period in accordance with clause 4<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Guarantee Exchange Rate<\/p>\n<\/td>\n

\n

the spot rate of the Guarantor at which US Dollars may be sold and Pounds
\nSterling bought at 11.00a.m. (London time) on the relevant Guarantee Review Date\n<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Guarantee Review Date<\/p>\n<\/td>\n

\n

31 March, 30 June, 30 September and 31 December in each year<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Guarantee Review Period<\/p>\n<\/td>\n

\n

has the meaning ascribed to it in clause 4.4 of this Deed<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Guarantor<\/p>\n<\/td>\n

\n

Citibank N.A.<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Jones Group<\/p>\n<\/td>\n

\n

The Jones Group, Inc. and its subsidiary undertakings<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

KG Group<\/p>\n<\/td>\n

\n

KG Group Holdings Limited and its subsidiary undertakings<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Law<\/p>\n<\/td>\n

\n

any applicable statute, rule or regulation including the rules of any
\nregulatory body or the rules of any recognised stock exchange<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Leaver<\/p>\n<\/td>\n

\n

a person who ceases to be an employee of the Jones Group and\/or the KG Group
\n(but to avoid doubt so that no person shall be a Leaver upon ceasing to be an
\nemployee of one company in the Jones Group or KG Group whilst remaining an
\nemployee of another such company). In the event of resignation by any such
\nperson by written notice, then such person shall be deemed to be a Leaver upon
\nthe service of such notice on the relevant employing company<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-4-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n\n

Manager<\/p>\n<\/td>\n

\n

any of Neil Clifford, Dale Christilaw, Rebecca Farrar-Hockley and Andrew Lee\n<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Noteholder<\/p>\n<\/td>\n

\n

a person whose name is entered in the Register as the holder of a Note<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Notes<\/p>\n<\/td>\n

\n

the unsecured fixed rate guaranteed notes constituted by this Deed, or as the
\ncase may be, the principal amounts represented by them and for the time being
\nissued and outstanding, and a reference to a “Note” is a reference to any one of
\nsuch Notes<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Permitted Transferee<\/p>\n<\/td>\n

\n

as regards any Noteholder or deceased Noteholder, a Relative of the
\nNoteholder or deceased Noteholder or the trustees of a Family Trust of the
\nNoteholder or deceased Noteholder or of a Relative of the Noteholder or deceased
\nNoteholder, and who agrees to enter into a deed of adherence in such form as the
\nCompany may reasonably require (such form of deed not being unreasonably
\nwithheld or delayed by the Company upon written request of the same by any
\nNoteholder) requiring such transferee to adhere to the provisions of the Sale
\nand Purchase Agreement in so far as they relate to the Notes transferred as if
\nsuch party were the original transferor<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Relative<\/p>\n<\/td>\n

\n

a spouse\/civil partner, a widower\/widow\/surviving civil partner, a parent, a
\nchild, a stepchild, an adopted child or an illegitimate child<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Register<\/p>\n<\/td>\n

\n

the register of Noteholders referred to in clause 8<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Registered Office<\/p>\n<\/td>\n

\n

the registered office from time to time of the Company<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Replacement Guarantee<\/p>\n<\/td>\n

\n

has the meaning ascribed to it in clause 4.4 of this Deed<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Restricted Overseas Person<\/p>\n<\/td>\n

\n

a person (including an individual, partnership, unincorporated syndicate,
\nlimited liability company, unincorporated organisation, trust, trustee,
\nexecutor, administrator or other legal representative) in, or resident in,
\nJapan, Australia, Canada or the United States, or a US person<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Sale and Purchase Agreement<\/p>\n<\/td>\n

\n

the agreement dated with the date of this instrument between, amongst others,
\nthe Company and the Noteholders relating to the sale of the entire issued share
\ncapital of KG Group Holdings Limited<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Securities Act<\/p>\n<\/td>\n

\n

the United States Securities Act of 1933, as amended<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Sterling Guarantee Cap<\/p>\n<\/td>\n

\n

an amount which is equal to 1.05 times the principal sum outstanding on all
\nNotes for the time being in issue expressed in Pounds Sterling<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

US or United States<\/p>\n<\/td>\n

\n

the United States of America, its territories and possessions, any State of
\nthe United States and the District of Columbia and all other areas subject to
\nits jurisdiction<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

US person<\/p>\n<\/td>\n

\n

a US person as defined in Regulation S of the Securities Act<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-5-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

1.2<\/p>\n<\/td>\n

\n

In this Deed:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

the clause headings and the table of contents are inserted for ease of
\nreference only and shall not affect construction;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

references to the parties, the Introduction, Schedules and clauses are
\nreferences respectively to the parties, the Introduction and Schedules to and
\nclauses of this Deed;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

except where the context specifically requires otherwise, words importing one
\ngender shall be treated as importing any gender, words importing individuals
\nshall be treated as importing corporations and vice versa, words importing the
\nsingular shall be treated as importing the plural and vice versa, and words
\nimporting the whole shall be treated as including a reference to any part;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(d)<\/p>\n<\/td>\n

\n

references to persons shall include bodies corporate, unincorporated
\nassociations and partnerships, in each case whether or not having a separate
\nlegal personality, and include a reference to that person’s legal personal
\nrepresentatives and successors;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(e)<\/p>\n<\/td>\n

\n

references to statutory provisions, enactments or EC Directives shall include
\nreferences to any amendment, modification, extension, consolidation, replacement
\nor re-enactment of any such provision, enactment or EC Directive (whether before
\nor after the date of this Deed), to any previous enactment which has been
\nreplaced or amended and to any regulation, instrument or order or other
\nsubordinate legislation made under such provision, enactment or EC Directive;\n<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(f)<\/p>\n<\/td>\n

\n

“recognised investment exchange” is to be construed in accordance with
\nsection 285 FSMA; and<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(g)<\/p>\n<\/td>\n

\n

a Note is “outstanding” unless:<\/p>\n

(i) it has been redeemed in full; or<\/p>\n

(ii) it has been purchased under condition 3.3.<\/p>\n<\/td>\n<\/tr>\n

\n

1.3<\/p>\n<\/td>\n

\n

“Sterling” and ” ” denote the lawful currency of the United Kingdom and
\n“Dollars” and “$” denote the lawful currency of the United States.<\/p>\n<\/td>\n<\/tr>\n

\n

2 <\/strong><\/p>\n<\/td>\n

\n

Constitution of the Notes<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

2.1<\/p>\n<\/td>\n

\n

The principal amount of the Notes constituted by this Deed is limited to
\n 6,217,995.<\/p>\n<\/td>\n<\/tr>\n

\n

2.2<\/p>\n<\/td>\n

\n

The Notes may be issued in amounts or integral multiples of 1.<\/p>\n<\/td>\n<\/tr>\n

\n

2.3<\/p>\n<\/td>\n

\n

The Notes are held subject to the conditions and the provisions contained in
\nthe Schedules which are binding on the Company, the Noteholders and any person
\nclaiming through or under them respectively. The conditions and the provisions
\ncontained in the Schedules shall have the same effect as if they were set out in
\nthis Deed.<\/p>\n<\/td>\n<\/tr>\n

\n

2.4<\/p>\n<\/td>\n

\n

The Notes constitute direct obligations of the Company and rank pari passu
\nand rateably in all respects and without discrimination or preference among
\nthemselves and shall form a single series.<\/p>\n<\/td>\n<\/tr>\n

\n

3 <\/strong><\/p>\n<\/td>\n

\n

Interest<\/strong><\/p>\n

Until such time as the Notes are redeemed or repaid, the Company will pay
\ninterest on the principal amount of the Notes in accordance with, and subject
\nto, the terms of this Deed and the conditions.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-6-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n
\n

4 <\/strong><\/p>\n<\/td>\n

\n

Ranking and Guarantee<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

4.1<\/p>\n<\/td>\n

\n

The rights of the Noteholders in respect of the Notes and this Deed rank pari
\npassu and rateably inter se. The Notes shall rank at least pari passu with all
\nother unsecured indebtedness of the Company (but, in any event, the due and
\npunctual payment of any amounts payable in respect of the Notes shall be
\nguaranteed by the Guarantor on the terms set out in the Guarantee).<\/p>\n<\/td>\n<\/tr>\n

\n

4.2<\/p>\n<\/td>\n

\n

The due and punctual payment by the Company of all principal and interest
\npayable in respect of the Notes will be irrevocably and unconditionally
\nguaranteed to the Noteholders on the terms set out in the Guarantee.<\/p>\n<\/td>\n<\/tr>\n

\n

4.3<\/p>\n<\/td>\n

\n

The Company will procure that, by no later than 30 June 2011, Guarantees will
\nbe issued by the Guarantor in the aggregate sum equal to US$13,500,000
\nsubstantially in the form set out in schedule 4. Each Noteholder shall be issued
\nwith a Guarantee for that proportion of such aggregate sum of US$13,500,000 that
\nthe principal amount of the Notes, held by such Noteholder, bears to 6,217,995.
\nAs envisaged by the Guarantee in the form set out in schedule 4, any demands for
\npayment pursuant to such Guarantees shall (subject to clause 4.4(b) below) be
\nmade for the relevant sterling sums owed to the Noteholder(s) in question in
\nrespect of their holdings of Notes, but shall be satisfied in US dollars up to
\nthe maximum amount of the Guarantee provided to that Noteholder.<\/p>\n<\/td>\n<\/tr>\n

\n

4.4<\/p>\n<\/td>\n

\n

Within 21 days of each Guarantee Review Date (excluding 30 June 2011) which
\noccurs whilst any Notes remain in issue (each such 21 day period being a
\nGuarantee Review Perio<\/strong>d), the Dollar Guarantee Cap shall be
\ncalculated by the Company by reference to the Guarantee Exchange Rate as at such
\nGuarantee Review Date. In the event that such Dollar Guarantee Cap is found to
\nbe greater or less than the then prevailing Guarantee Amount by an amount which
\nis more than 1% of the then prevailing Guarantee Amount, then the Company shall
\nprocure, no later than the end of the relevant Guarantee Review Period, that new
\nGuarantees (Replacement Guarantees<\/strong>) are issued by the Guarantor
\nto replace the existing Guarantees. Such Guarantees shall be in identical form
\nto those set out in schedule 4 save that:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

the Guarantee Amount shall be of an amount equal to the Dollar Guarantee Cap
\ncalculated for the Guarantee Review Period in question (and so that each
\nNoteholder is the beneficiary of a Guarantee for a sum equal to that proportion
\nof the Dollar Guarantee Cap which the principal amount of Notes held by that
\nNoteholder bears to the total principal amount of Notes for the time being in
\nissue); or, at the election of the Company<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

the Guarantee Amount shall alternatively be for an amount equal to the then
\nprevailing Sterling Guarantee Cap (and in such circumstances any amount paid
\npursuant to such Guarantees shall be paid in Pounds Sterling and the form of
\nGuarantee as set out in schedule 4 shall be amended accordingly).<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

Any such Replacement Guarantees shall be in substitution for the previously
\nsubsisting Guarantee for each relevant Noteholder provided always that the terms
\nof such Guarantee are strictly in accordance with the requirements of this
\nclause 4 (and so that, to avoid doubt, until such time as a Replacement
\nGuarantee is issued by the Guarantor to a Noteholder which complies with the
\nterms of this clause 4, the previously existing Guarantee held by such a
\nNoteholder shall prevail).<\/p>\n<\/td>\n<\/tr>\n

\n

5 <\/strong><\/p>\n<\/td>\n

\n

Redemption<\/strong><\/p>\n

As and when a Note is due to be redeemed in accordance with this Deed and the
\nconditions, the Company shall pay to the relevant Noteholder the aggregate of
\nthe principal amount of the Note at par and any accrued interest (after
\ndeduction of tax which the Company is required to deduct by Law) up to but
\nexcluding the date of redemption in accordance with the provisions of condition
\n7.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-7-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

6 <\/strong><\/p>\n<\/td>\n

\n

Further Notes<\/strong><\/p>\n

The Company shall be entitled from time to time, by resolution of the board
\nor of a duly authorised committee of the board, to cancel any created but
\nunissued Notes or to create and issue further Notes to be constituted by deed or
\ninstrument expressed to be supplemental to this Deed either so as to be
\nidentical in all respects and form a single series with the Notes or to carry
\nsuch rights as to interest, redemption and otherwise as the board may think fit.\n<\/p>\n<\/td>\n<\/tr>\n

\n

7 <\/strong><\/p>\n<\/td>\n

\n

Certificates<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

7.1<\/p>\n<\/td>\n

\n

A person on becoming a Noteholder is entitled without charge to one
\ncertificate for the total principal amount of Notes registered in his name.<\/p>\n<\/td>\n<\/tr>\n

\n

7.2<\/p>\n<\/td>\n

\n

When a Noteholder transfers or has redeemed part of the principal amount of
\nNotes registered in his name he is entitled without charge to one certificate
\nfor the balance of the principal amount retained by him.<\/p>\n<\/td>\n<\/tr>\n

\n

7.3<\/p>\n<\/td>\n

\n

The Company is not bound to:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

register more than four persons as joint holders of a Note; or<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

issue more than one certificate for a Note held jointly by two or more
\npersons and delivery of a certificate to the joint holder named first in the
\nRegister is sufficient delivery to all joint holders.<\/p>\n<\/td>\n<\/tr>\n

\n

7.4<\/p>\n<\/td>\n

\n

A certificate shall be:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

substantially in the form set out in Schedule 1 and shall have the conditions
\nendorsed on it; and<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

signed by or on behalf of, or executed by, the Company in accordance with its
\nbylaws for the time being or in such other manner as may be permitted by
\nstatute.<\/p>\n<\/td>\n<\/tr>\n

\n

8 <\/strong><\/p>\n<\/td>\n

\n

Register<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

8.1<\/p>\n<\/td>\n

\n

The Company shall keep the Register at the Registered Office and enter in it:\n<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

the name and address of each Noteholder;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

the date on which each person was registered as a Noteholder;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

the principal amount of each Note held by a Noteholder;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(d)<\/p>\n<\/td>\n

\n

the serial number of each certificate issued and the date of its issue; and\n<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(e)<\/p>\n<\/td>\n

\n

the date on which a person ceased to be a Noteholder.<\/p>\n<\/td>\n<\/tr>\n

\n

8.2<\/p>\n<\/td>\n

\n

The Company shall enter in the Register each change to the information
\nspecified in clause 8.1.<\/p>\n<\/td>\n<\/tr>\n

\n

8.3<\/p>\n<\/td>\n

\n

A Noteholder may inspect the Register from 9.00 a.m. to 5.00 p.m. on any
\nBusiness Day and may require a copy of it or any part of it at the cost of the
\nCompany.<\/p>\n<\/td>\n<\/tr>\n

\n

9<\/strong><\/p>\n<\/td>\n

\n

Obligations of the Company<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

9.1<\/p>\n<\/td>\n

\n

The Company agrees with each Noteholder to comply with its obligations under
\nthis Deed.<\/p>\n<\/td>\n<\/tr>\n

\n

9.2<\/p>\n<\/td>\n

\n

This Deed enures for the benefit of each Noteholder and a Noteholder may sue
\nfor the compliance by the Company of its obligations under this Deed in relation
\nto each Note held by the Noteholder.<\/p>\n<\/td>\n<\/tr>\n

\n

9.3<\/p>\n<\/td>\n

\n

The Company shall not consolidate with or merge into any other person or
\nconvey, transfer or lease its properties and assets substantially as an entirety
\nto any person, and no person shall consolidate with or merge into the Company or
\nconvey, transfer or lease its properties and assets substantially as an entirety
\nto the Company, unless in any such case the corporation formed by<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-8-<\/p>\n

\n\n\n\n\n\n\n\n\n\n
<\/td>\n\n

such consolidation or into which the Company is merged or the person which
\nacquires by conveyance or transfer, or which leases, the properties and assets
\nof the Company substantially as an entirety shall expressly assume, by a deed
\nsupplemental to this Deed, the due and punctual payment of the principal of and
\ninterest on all the Notes and the performance of every covenant of this Deed on
\nthe part of the Company to be performed or observed. Upon any consolidation or
\nmerger by the Company with or into any other person, or any conveyance, transfer
\nor lease by the Company of its properties and assets substantially as an
\nentirety to any person in accordance with this Section, the successor
\ncorporation formed by such consolidation or into which the Company is merged or
\nto which such conveyance, transfer or lease is made shall succeed to, and be
\nsubstituted for, and may exercise every right and power of, the Company under
\nthis Deed with the same effect as if such successor person had been named as the
\nCompany herein; and in the event of any such conveyance, transfer or lease the
\nCompany shall be discharged from all obligations and covenants under the Deed
\nand the Notes and may be dissolved and liquidated. Such successor person may
\ncause to be signed, and may issue either in its own name or in the name of the
\nCompany, any or all of the Notes issuable hereunder which theretofore shall not
\nhave been signed by the Company and delivered hereunder. All the Notes so issued
\nshall in all respects have the same legal rank and benefit under this Deed as
\nthe Notes theretofore or thereafter issued in accordance with the terms of this
\nDeed as though all of such Notes had been issued at the date of the execution
\nhereof. In case of any such consolidation, merger, sale, conveyance or lease,
\nsuch changes in phraseology and form may be made in the Notes thereafter to be
\nissued as may be reasonably appropriate (and provided always that such changes
\ndo not have any adverse effect on the Noteholders).<\/p>\n<\/td>\n<\/tr>\n

\n

10 <\/strong><\/p>\n<\/td>\n

\n

Modification of the Deed<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

10.1<\/p>\n<\/td>\n

\n

Subject to clause 10.2, the Company may, from time to time, modify, abrogate
\nor vary the provisions of this Deed.<\/p>\n<\/td>\n<\/tr>\n

\n

10.2<\/p>\n<\/td>\n

\n

The Company may not (by deed expressed to be supplemental to this Deed or
\notherwise) modify, abrogate or vary the provisions of this Deed without the
\nprior sanction of an Extraordinary Resolution.<\/p>\n<\/td>\n<\/tr>\n

\n

10.3<\/p>\n<\/td>\n

\n

The Company shall endorse on this Deed a memorandum of execution of any deed
\nsupplemental to this Deed.<\/p>\n<\/td>\n<\/tr>\n

\n

11 <\/strong><\/p>\n<\/td>\n

\n

Rights of third parties<\/strong><\/p>\n

This Deed does not confer any rights on any person or party (other than the
\nparties to this Deed and the Noteholders) under the Contracts (Rights of Third
\nParties) Act 1999 but this does not affect any right or remedy of a third party
\nwhich exists or is available apart from under that Act.<\/p>\n<\/td>\n<\/tr>\n

\n

12 <\/strong><\/p>\n<\/td>\n

\n

Governing law and jurisdiction<\/strong><\/p>\n

This Deed is governed by and is to be construed in accordance with English
\nlaw. The courts of England have exclusive jurisdiction to settle any dispute
\narising out of or in connection with this Deed, the conditions or the Notes.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-9-<\/p>\n

\n

SCHEDULE 1<\/p>\n

Certificate and Conditions<\/p>\n\n\n\n
\n

Certificate No. [___]<\/p>\n<\/td>\n

\n

Transfer No. [___]<\/p>\n<\/td>\n

\n

Date [___]<\/p>\n<\/td>\n

\n

Amount [___]<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Jones Apparel Group Holdings, Inc. (the
\n“Company”)<\/strong><\/p>\n

(Incorporated in Delaware)<\/p>\n

6,217,995 UNSECURED FIXED RATE GUARANTEED LOAN
\nNOTES<\/strong><\/p>\n

This is to certify that [___] is\/are the registered holder(s) of [___] in
\nprincipal amount of the 6,217,995 unsecured fixed interest guaranteed notes
\n(the “Notes”) as constituted by an instrument (the “Deed”) dated [___] 2011 and
\nmade by the Company. The Notes are issued with the benefit of, and subject to
\nthe provisions contained in, the Deed and the conditions endorsed on this
\ncertificate.<\/p>\n

Interest accrues on the Notes in accordance with condition 2. The Notes are
\nredeemable in accordance with condition 3.<\/p>\n

The Notes are transferable in amounts or integral multiples of 1 in
\naccordance with Schedule 2 of the Deed. This certificate must be surrendered
\nbefore any transfer is registered or any new certificate is issued in exchange.\n<\/p>\n

A copy of the Deed is available for inspection at the Registered Office.<\/p>\n

THE NOTES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE
\nNOT US PERSONS PURSUANT TO REGULATION S UNDER THE SECURITIES ACT. THE NOTES HAVE
\nNOT BEEN REGISTERED UNDER THE SECURITIES ACT AND MAY NOT BE OFFERED, SOLD,
\nRESOLD, DELIVERED OR DISTRIBUTED (DIRECTLY OR INDIRECTLY) IN OR INTO THE UNITED
\nSTATES (EXCEPT IN TRANSACTIONS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
\nREQUIREMENTS OF THE SECURITIES ACT), CANADA, AUSTRALIA OR JAPAN NOR TO NOR FOR
\nTHE ACCOUNT OR BENEFIT OF ANY RESTRICTED OVERSEAS PERSON UNLESS IN RELATION TO
\nANY US PERSON, THE NOTES ARE REGISTERED UNDER THE SECURITIES ACT OR THE
\nTRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
\nTHE SECURITIES ACT.<\/strong><\/p>\n

The Notes are governed by and are to be construed in accordance with English
\nlaw.<\/p>\n

Signed as a deed by Jones Apparel Group Holdings, Inc. acting by:<\/p>\n

_________________
\nsignature of director<\/p>\n

_________________
\nprint name of director
\nDirector<\/p>\n

-10-<\/p>\n

\n

CONDITIONS<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

1 <\/strong><\/p>\n<\/td>\n

\n

Status of the Notes<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

1.1<\/p>\n<\/td>\n

\n

The Notes are issued in amounts or integral multiples of 1 and are
\ntransferable in accordance with the provisions of Schedule 2 in amounts or
\nintegral multiples of 1.<\/p>\n<\/td>\n<\/tr>\n

\n

1.2<\/p>\n<\/td>\n

\n

The Notes constitute direct, general and unconditional obligations of the
\nCompany.<\/p>\n<\/td>\n<\/tr>\n

\n

1.3<\/p>\n<\/td>\n

\n

The obligations of the Company in respect of the Notes rank pari passu and
\nrateably inter se.<\/p>\n<\/td>\n<\/tr>\n

\n

2 <\/strong><\/p>\n<\/td>\n

\n

Fixed Interest<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

2.1<\/p>\n<\/td>\n

\n

Interest on the Notes shall accrue from day to day and will be calculated on
\nthe basis of a 365 day year and the actual number of days elapsed in that
\ninterest period. Interest will be payable (less income tax where deduction
\nthereof is required by Law) at the Fixed Interest Rate yearly in arrears on 31
\nDecember in each year or, if any such day is not a Business Day, on the next
\nfollowing Business Day (each an “interest payment date”) in respect of the
\ninterest periods (as defined in condition 2.3 below). Any tax or duty required
\nto be deducted or withheld in respect of such interest by any applicable Law
\nshall be so deducted or withheld and the Company shall not be obliged to
\nincrease its payments to Noteholders in respect of such tax or duty.<\/p>\n<\/td>\n<\/tr>\n

\n

2.2<\/p>\n<\/td>\n

\n

Each payment of interest provided for in condition 2.1 above shall relate to
\nthe period from (and including) the first day of the relevant interest period to
\n(and including) the last day of such period and shall be paid as provided in
\ncondition 2.4.<\/p>\n<\/td>\n<\/tr>\n

\n

2.3<\/p>\n<\/td>\n

\n

“Interest periods” shall be:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

the period commencing on (and including) the date of issue of the Note and
\nending on (and including) the day immediately before the next following interest
\npayment date; and<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

any subsequent period commending on an interest payment date and ending on
\nthe day immediately before the next following interest payment date.<\/p>\n<\/td>\n<\/tr>\n

\n

2.4<\/p>\n<\/td>\n

\n

Save in the case of a redemption under condition 3.7, interest shall be paid
\nto those Noteholders who are on the Register at the close of business on the
\nfourteenth day preceding the relevant interest payment date and for the purposes
\nof the payment of interest any intermediate transfer or transmission of any
\nNotes between such date and the relevant interest payment date shall be ignored.\n<\/p>\n<\/td>\n<\/tr>\n

\n

2.5<\/p>\n<\/td>\n

\n

Interest shall cease to accrue on any Notes becoming due for redemption,
\npurchase or repayment as from the date on which the payment in respect of such
\nredemption, purchase or repayment is made by the Company to the relevant
\nNoteholder (and for these purposes payment of the moneys due to the Noteholder
\ninto a separate interest-bearing bank account as envisaged by condition 6.2
\nshall constitute payment to a Noteholder).<\/p>\n<\/td>\n<\/tr>\n

\n

3 <\/strong><\/p>\n<\/td>\n

\n

Redemption, purchase and cancellation<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

3.1<\/p>\n<\/td>\n

\n

Unless otherwise directed by an Extraordinary Resolution, a Noteholder shall
\nbe entitled, by notice in writing to the Company, to require the Company to
\nredeem the then outstanding Notes at the aggregate of par plus any Fixed
\nInterest accrued but unpaid (after deduction of tax which the Company is
\nrequired to deduct by Law) up to but excluding the date of redemption on the
\noccurrence of any of the following events:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

the failure by the Company to pay any moneys payable on the Notes on the due
\ndate for payment;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

the entry of a decree or order by a court having jurisdiction in the premises
\nadjudging the Company a bankrupt or insolvent, or approving as properly filed a
\npetition seeking<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-11-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n\n

reorganisation, arrangement, adjustment or composition of or in respect of
\nthe Company under any applicable bankruptcy, insolvency, reorganisation or other
\nsimilar law, or appointing a receiver, liquidator, assignee, trustee,
\nsequestrator (or other similar official) of the Company or of any substantial
\npart of its property or ordering the winding up or liquidation of its affairs,
\nand the continuance of any such decree or order unstayed and in effect for a
\nperiod of 60 consecutive days;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

the institution by the Company of proceedings to be adjudicated a bankrupt or
\ninsolvent, or the consent by it to the institution of bankruptcy or insolvency
\nproceedings against it, or the filing by it of a petition or answer or consent
\nseeking reorganisation or relief under any applicable bankruptcy, insolvency,
\nreorganisation or other similar law, or the consent by it to the filing of any
\nsuch petition or to the appointment of a receiver, liquidator, assignee,
\ntrustee, sequestrator (or other similar official) of the Company or of any
\nsubstantial part of its property, or the making by it of an assignment for the
\nbenefit for creditors, or the admission by it in writing of its inability to pay
\nits debts generally as they become due and its willingness to be adjudicated a
\nbankrupt, or the taking of corporate action by the Company in furtherance of any
\nsuch action;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(d)<\/p>\n<\/td>\n

\n

any event or circumstance arising which, after the commencement date of the
\nGuarantee, results in the Guarantee being invalid, unenforceable, terminated or
\notherwise unable to be performed by the Guarantor (whether through an event
\ndescribed in paragraph (b) or (c) above in respect of the Guarantor, by
\noperation of Law, or otherwise howsoever);<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(e)<\/p>\n<\/td>\n

\n

any event analogous to those described in paragraphs (b) to (d) inclusive
\ntaking place in any jurisdiction which may be applicable;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(f)<\/p>\n<\/td>\n

\n

where a Termination Notice (as defined in a Guarantee as set out in schedule
\n4) has been issued by the Guarantor to a Noteholder terminating a Guarantee (the
\n“Relevant Guarantee<\/strong>“) and the Company has failed to procure
\nthat a Substitute Guarantee has been provided to replace such Relevant Guarantee
\nby the date falling no later than 14 days before the termination of such
\nRelevant Guarantee. For these purposes a “Substitute
\nGuarantee<\/strong>” shall be a guarantee or guarantees provided on substantially
\nthe same terms as the Relevant Guarantee as to the maximum amount which may be
\nclaimed thereunder, the term and expiry date of that guarantee and the
\nconditions on which amounts may be demanded thereunder and which is issued by a
\nfinancial institution with a senior debt credit rating not less than A1 on the
\nbasis of the ratings assigned by Moody’s or A on the basis of the ratings
\nassigned by Standard & Poor’s or their equivalent to the extent that those
\nrating systems are amended or replaced after the date of this Deed;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(g)<\/p>\n<\/td>\n

\n

the failure by the Company to comply with its obligations under clause 4.3 of
\nthe Deed constituting these Notes by 30 June 2011;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(h)<\/p>\n<\/td>\n

\n

where the Dollar Guarantee Cap is found to be more than the then Prevailing
\nGuarantee Amount by more than 1% of the then Prevailing Guarantee Amount, any
\nfailure by the Company to procure the execution by the Guarantor and delivery to
\nall relevant Noteholders of a Replacement Guarantee, in substitution for the
\nthen subsisting Guarantee, by the end of any Guarantee Review Period where the
\nsame is required in accordance with the terms set out in clause 4 of the Deed
\nconstituting these Notes; or<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(i)<\/p>\n<\/td>\n

\n

any breach by the Company of clause 9.3 of the Deed constituting these Notes.\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-12-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

3.2<\/p>\n<\/td>\n

\n

The Company shall notify the Noteholders immediately if it becomes aware of a
\nfact or circumstance which has caused or will or is likely to cause any of the
\nevents listed in condition 3.1 to occur.<\/p>\n<\/td>\n<\/tr>\n

\n

3.3<\/p>\n<\/td>\n

\n

At any time after the First Redemption Date, a Noteholder shall be entitled
\nto require the Company to redeem all or part of the then outstanding Notes at
\nthe aggregate of par plus any Fixed Interest accrued but unpaid (after deduction
\nof tax which the Company is required to deduct by Law) up to but excluding the
\ndate of redemption upon giving to the Company not less than seven (7) days’
\nprior notice of the date of redemption and delivering to the Company the
\nrelevant certificate(s) for the Notes.<\/p>\n<\/td>\n<\/tr>\n

\n

3.4<\/p>\n<\/td>\n

\n

The Company may (by giving the Noteholders not less than 7 days’ notice), at
\nany time after six months from the Execution Date, purchase Notes at any price
\nby tender (available to all Noteholders alike) or private treaty or otherwise,
\nin each case by written agreement with the relevant Noteholder.<\/p>\n<\/td>\n<\/tr>\n

\n

3.5<\/p>\n<\/td>\n

\n

The Company shall cancel a Note redeemed or purchased and may not reissue or
\nresell that Note.<\/p>\n<\/td>\n<\/tr>\n

\n

3.6<\/p>\n<\/td>\n

\n

If prior to the First Redemption Date a Manager becomes a Bad Leaver, the
\nNotes held by that Manager or any Permitted Transferee of such Manager shall,
\nwith effect from the date on which the Manager becomes a Bad Leaver, be
\ncancelled and the Company shall cease to have any obligation to make any
\nrepayment in respect of those Notes or to pay any Fixed Interest accrued but
\nunpaid or any future Fixed Interest in respect of those Notes.<\/p>\n<\/td>\n<\/tr>\n

\n

3.7<\/p>\n<\/td>\n

\n

The Notes held by any Manager or any Permitted Transferee of such a Manager
\nmay be cancelled by the Company in accordance with the provisions set out in
\nschedule 9 of the Sale and Purchase Agreement. Save as expressly provided for in
\nschedule 9 of the Sale and Purchase Agreement or as expressly provided for in
\nthis Deed, all amounts payable in respect of any Notes in issue shall be paid to
\nthe holder(s) for the time being of such Notes on the due date and free from any
\nset-off, counterclaim or deduction whatsoever.<\/p>\n<\/td>\n<\/tr>\n

\n

3.8<\/p>\n<\/td>\n

\n

Unless previously cancelled, redeemed or purchased, the Company shall redeem
\nthe Notes on the Final Redemption Date at par and on such redemption shall also
\npay to the relevant Noteholders any Fixed Interest accrued but unpaid (after
\ndeduction of tax which the Company is required to deduct by Law) up to but
\nexcluding that date.<\/p>\n<\/td>\n<\/tr>\n

\n

3.9<\/p>\n<\/td>\n

\n

Any and all redemptions of Notes shall be made pari passu among the
\nNoteholders.<\/p>\n<\/td>\n<\/tr>\n

\n

4<\/strong><\/p>\n<\/td>\n

\n

Default rate<\/strong><\/p>\n

If any sum due and payable by the Company in respect of the Notes on
\nredemption is not paid on the due date, interest shall accrue at the rate of 7
\nper cent. on the amount due and unpaid for the period beginning on the due date
\nand ending on the day when the amount is paid. The Noteholders may from time to
\ntime agree in relation to all the Notes to waive the interest payable under this
\ncondition 4 or agree to a lower rate of default interest on such terms as they
\nmay think fit by Extraordinary Resolution. Each Noteholder may from time to time
\nagree in relation to the Notes registered in his or her name to waive the
\ninterest payable under this condition 4 or agree to a lower rate of default
\ninterest on such terms as he or she thinks fit.<\/p>\n<\/td>\n<\/tr>\n

\n

5 <\/strong><\/p>\n<\/td>\n

\n

Dealings<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

5.1<\/p>\n<\/td>\n

\n

No application has been or will be made to any recognised investment exchange
\nfor the Notes to be listed or dealt in.<\/p>\n<\/td>\n<\/tr>\n

\n

5.2<\/p>\n<\/td>\n

\n

The Notes have not been and will not be registered under the Securities Act
\nor under the securities laws of any State of the United States, no relevant
\nclearances have been or will be obtained from the securities commission of any
\nprovince of Canada, no prospectus has been or will be lodged<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-13-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n\n

with the Australian Securities and Investments Commission and no steps have
\nbeen taken, nor will any be taken, to enable the Notes to be offered in
\ncompliance with applicable securities laws of Japan.<\/p>\n<\/td>\n<\/tr>\n

\n

5.3<\/p>\n<\/td>\n

\n

Accordingly, the Notes may not be offered, sold, resold, delivered or
\ndistributed (directly or indirectly) in or into the United States (except in
\ntransactions exempt from, or not subject to, the registration requirements of
\nthe Securities Act), Canada, Australia or Japan nor to or for the account or
\nbenefit of any Restricted Overseas Person unless in relation to any US person
\nthe Notes are registered under the Securities Act or the transaction is exempt
\nfrom, or not subject to, the registration requirements of the Securities Act.\n<\/p>\n<\/td>\n<\/tr>\n

\n

6 <\/strong><\/p>\n<\/td>\n

\n

Procedure on redemption and unclaimed moneys<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

6.1<\/p>\n<\/td>\n

\n

A Noteholder whose Notes are due to be redeemed shall, not later than the due
\ndate for redemption, deliver to the Company the certificate for the Notes (or an
\nindemnity in the usual form in respect of any lost or missing certificates) for
\ncancellation. Upon delivery, the Company shall immediately pay to the Noteholder
\nthe moneys payable in respect of the Notes.<\/p>\n<\/td>\n<\/tr>\n

\n

6.2<\/p>\n<\/td>\n

\n

If the Noteholder fails to comply with condition 6.1:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

the Company shall pay all amounts due in respect of the Notes into a separate
\ninterest bearing bank account pending delivery to the Company by the Noteholder
\nof the certificate for the Notes for cancellation;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

the payment of an amount into a bank account shall constitute the Company a
\ntrustee in respect of the amount for the relevant Noteholder;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

the Company shall be responsible for the safe custody of the amount and
\nrelated interest;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(d)<\/p>\n<\/td>\n

\n

the Noteholder shall be entitled to interest accrued on the amount; and<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(e)<\/p>\n<\/td>\n

\n

if the amount remains unclaimed after a period of ten years from the date of
\npayment of the amount into the account, the Noteholder shall cease to be
\nentitled to the amount and to related interest and it shall then belong to the
\nCompany.<\/p>\n<\/td>\n<\/tr>\n

\n

7 <\/strong><\/p>\n<\/td>\n

\n

Payment<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

7.1<\/p>\n<\/td>\n

\n

The Company shall pay principal moneys, interest or any other amount payable
\nin respect of a Note by a bank or other funds transfer system, or by such other
\nmethod as the holder or joint holders of the Note in respect of which the
\npayment is made (or the person or persons entitled by transmission to the Note)
\nmay in writing direct. The holder, a joint holder or other person jointly
\nentitled to a Note may give an effective receipt for principal moneys, interest
\nor other amount paid in respect of the Note.<\/p>\n<\/td>\n<\/tr>\n

\n

7.2<\/p>\n<\/td>\n

\n

The Board may withhold payment of principal moneys, interest and all other
\namounts payable in respect of the Note to a person entitled by transmission to a
\nNote until he has provided such evidence of his right that the Board may
\nreasonably require.<\/p>\n<\/td>\n<\/tr>\n

\n

8 <\/strong><\/p>\n<\/td>\n

\n

Notices<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

8.1<\/p>\n<\/td>\n

\n

A notice to be given to or by a Noteholder under the Deed or these conditions
\nshall be in writing.<\/p>\n<\/td>\n<\/tr>\n

\n

8.2<\/p>\n<\/td>\n

\n

The Company may give any notice or other document to a Noteholder either
\npersonally or by sending it by post in a prepaid envelope addressed to the
\nNoteholder at the address shown in the Register against his name.<\/p>\n<\/td>\n<\/tr>\n

\n

8.3<\/p>\n<\/td>\n

\n

Any Noteholder may notify the Company of any change to his or her address
\n(which shall be used by the Company in substitution for the address shown in the
\nRegister against his or her respective<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-14-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n\n

name), provided that such notice shall be in writing, shall be delivered to
\nthe Company at the Registered Office and shall only be effective on:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

the date specified in the notice as the date on which the change is to take
\neffect; or<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

if no date is so specified or the date so specified is less than five (5)
\nBusiness Days after the date on which the notice is given, the date following
\nfive (5) Business Days after the notice of any change has been given.<\/p>\n<\/td>\n<\/tr>\n

\n

8.4<\/p>\n<\/td>\n

\n

In the case of joint holders of a Note, a notice or other document shall be
\ngiven to the holder who is named first in the Register in respect of the joint
\nholding and notice given in this way is sufficient notice to all joint holders.\n<\/p>\n<\/td>\n<\/tr>\n

\n

8.5<\/p>\n<\/td>\n

\n

A Noteholder (or, in the case of joint holders, the person named first in the
\nRegister) whose address as shown in the Register is outside the United Kingdom
\nand who has notified the Company of an address in the United Kingdom at which
\nnotices or other documents may be given to him is entitled to have notices given
\nto him at that address, but otherwise no such Noteholder shall be entitled to
\nreceive any notice from the Company.<\/p>\n<\/td>\n<\/tr>\n

\n

8.6<\/p>\n<\/td>\n

\n

Any notice required to be given to the Company by the Noteholders may be
\ngiven either by hand or by sending it by post to the Registered Office (marked
\nfor the attention of the company secretary).<\/p>\n<\/td>\n<\/tr>\n

\n

8.7<\/p>\n<\/td>\n

\n

A notice served in accordance with this condition 8 shall be deemed to have
\nbeen received:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

in the case of delivery by hand, on the date of actual delivery;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

in the case of despatch by prepaid first class post, on the second Business
\nDay following the date of despatch; or<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

in the case of despatch by prepaid second class post or where there is only
\none class of post, on the fourth Business Day following the date of despatch;\n<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

provided that a notice or demand received on a day which is not a Business
\nDay, or after normal business hours (being 9.30 a.m. to 5.30 p.m. on a day other
\nthan a Saturday, Sunday or public holiday in England and Wales and the United
\nStates of America), shall be deemed to have been received on the next Business
\nDay. Proof that the envelope containing the notice was properly addressed,
\nprepaid and posted shall be conclusive evidence that notice was given.<\/p>\n<\/td>\n<\/tr>\n

\n

8.8<\/p>\n<\/td>\n

\n

A person who becomes entitled to a Note by transmission, transfer or
\notherwise is bound by a notice in respect of the Note which, before his name is
\nentered in the Register, has been properly served on a person from whom he
\nderives his title.<\/p>\n<\/td>\n<\/tr>\n

\n

8.9<\/p>\n<\/td>\n

\n

Where a person is entitled by transmission to a Note, the Company may give a
\nnotice or other document to that person as if he were the holder of a Note by
\naddressing it to him by name or by the title of representative of the deceased
\nor trustee of the bankrupt (or by similar designation) at an address in the
\nUnited Kingdom supplied for that purpose by the person claiming to be entitled
\nby transmission. Until an address has been supplied, a notice or other document
\nmay be given in any manner in which it might have been given if the death or
\nbankruptcy or other event had not occurred. The giving of notice in accordance
\nwith this condition 8 is sufficient notice to all other persons interested in
\nthe Note<\/p>\n<\/td>\n<\/tr>\n

\n

9<\/strong><\/p>\n<\/td>\n

\n

General<\/strong><\/p>\n

Words and expressions defined in the Deed shall, unless the context otherwise
\nrequires, have the same meanings in these conditions.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-15-<\/p>\n

\n\n\n\n\n\n\n\n\n
\n

10 <\/strong><\/p>\n<\/td>\n

\n

Right to Redeem in a Foreign Currency<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

10.1<\/p>\n<\/td>\n

\n

A Noteholder may at his option specify in his notice of redemption of Notes
\nthat payment of the principal amount of such Notes is to be made to him in US
\nDollars instead of Pounds Sterling and in each case where such specification is
\nmade:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

the Company shall be obliged to make the payment of the principal amount of
\nsuch Notes to the Noteholder in US Dollars;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

the election of the Noteholder shall be irrevocable;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

the rate of exchange between US Dollars and Pounds Sterling for the purposes
\nof calculating the amount of payment shall be the spot rate obtained by the
\nCompany from Barclays Bank PLC (being the rate at which Pounds Sterling may be
\nsold and US Dollars bought) at 11.00 a.m. (London time) on the twentieth
\nBusiness Day prior to the date of payment and on which such notice is deemed to
\nexpire (the “Rate of Exchange”);<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(d)<\/p>\n<\/td>\n

\n

the repayment value shall be the US Dollar equivalent of one Pound Sterling
\nper 1 nominal of Note converted at the Rate of Exchange less any reasonable
\nfees or bank charges associated with the conversion (the “Repayment Value”),\n<\/p>\n

PROVIDED THAT:<\/p>\n

(i) in no circumstances whatsoever shall the Repayment Value converted as set
\nout in (ii) below exceed the Pounds Sterling nominal value of the Note to be
\nrepaid plus one twenty-fourth of Y per cent. of the Pounds Sterling nominal
\nvalue of the Note to be repaid where Y is the number of complete months between
\nthe date of issue of the Note and the date of repayment and, in the event that
\nthere is an incomplete number of months between those two dates, Y shall be
\nincreased by one;<\/p>\n

(ii) for the purposes of this provision the Repayment Value shall be
\nconverted into Pounds Sterling at the spot rate obtained by the Company from
\nBarclays Bank PLC (being the rate at which US Dollars may be sold and Pounds
\nSterling bought) at 11.00 a.m. (London time) on the date of the repayment;<\/p>\n

(iii) the Company shall forthwith upon the amount of the Repayment Value
\nbecoming available certify that amount to any Noteholder who has elected
\npursuant to this Condition to receive repayment in US Dollars;<\/p>\n

(iv) the form of notice of repayment shall contain the following paragraph:\n<\/p>\n

“I\/we elect to receive repayment of principal in US Dollars instead of Pounds
\nSterling in accordance with Condition 10 of the Deed”.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-16-<\/p>\n

\n

SCHEDULE 2<\/p>\n

Provisions as to registration, transfer, etc.<\/strong>\n<\/p>\n\n\n\n\n\n\n\n\n\n\n
\n

1 <\/strong><\/p>\n<\/td>\n

\n

Recognition of Noteholder<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

1.1<\/p>\n<\/td>\n

\n

Subject to schedule 9 of the Sale and Purchase Agreement, the Company shall
\nrecognise a Noteholder as entitled to the Notes registered in his name free from
\nany equity, set off or counter claim on the part of the Company against the
\noriginal or an intermediate holder of the Notes.<\/p>\n<\/td>\n<\/tr>\n

\n

1.2<\/p>\n<\/td>\n

\n

Except as required by law, no person shall be recognised by the Company as
\nholding any Notes upon any trust and (except as otherwise provided in this
\nSchedule 2 and in the conditions and the provisions contained in the schedules
\nto the Deed constituting the Notes) the Company shall not be bound by or
\nrecognise any interest in any Note except an absolute right to the entirety of
\nit in the holder. The receipt by a Noteholder, or of any joint Noteholder, for
\nany interest from time to time accruing or due or for any other moneys payable
\nin respect of the Notes shall be a good discharge of the Company,
\nnotwithstanding any notice the Company may have, whether express or otherwise,
\nof any right, title, interest or claim of any other person to or in such Notes,
\ninterest or moneys.<\/p>\n<\/td>\n<\/tr>\n

\n

2 <\/strong><\/p>\n<\/td>\n

\n

Transfers<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

2.1<\/p>\n<\/td>\n

\n

A Noteholder may not transfer his Notes unless such a transfer is to a
\nPermitted Transferee. In the case of each initial holder of Notes being Neil
\nClifford, Rebecca Farrar-Hockley, Dale Christilaw and Andrew Lee, the transfers
\nby that Noteholder or any of his or her Permitted Transferees may only be made
\nproviding that the maximum number of Noteholders comprising that initial
\nNoteholder and any of his or her Permitted Transferees does not exceed four.\n<\/p>\n<\/td>\n<\/tr>\n

\n

2.2<\/p>\n<\/td>\n

\n

If a transfer of the Notes is permitted under paragraph 2.1 of this Schedule
\n2, the Noteholder may transfer his Notes in amounts or in integral multiples of
\n 10,000 or such lesser amount as constitutes the Noteholder’s entire holding of
\nNotes by instrument of transfer in writing in any usual form or in another form
\napproved by the Board (such approval not to be unreasonably withheld or delayed)
\nand the instrument shall be executed by or on behalf of the Noteholder.<\/p>\n<\/td>\n<\/tr>\n

\n

2.3<\/p>\n<\/td>\n

\n

The transferor is deemed to remain the holder of the Notes until the name of
\nthe transferee is entered in the Register in respect of it.<\/p>\n<\/td>\n<\/tr>\n

\n

2.4<\/p>\n<\/td>\n

\n

The Board shall only be entitled to refuse to register the transfer of a Note
\nif:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n\n\n\n\n
<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

the proposed transfer is not a transfer that is permitted pursuant to
\nparagraph 2.1 of this Schedule 2; or<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

a redemption notice has been given pursuant to condition 3.3; or<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

it is in favour of more than four joint transferees; or<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(d)<\/p>\n<\/td>\n

\n

it is not delivered for registration at the Registered Office or such other
\nplace of which the Board may have notified the Noteholders in writing at least
\nfive days in advance, accompanied by the certificate for the Note to which it
\nrelates and such other evidence as the Board may reasonably require to prove the
\ntitle of the Noteholder and the due execution by him of the transfer or, if the
\ntransfer is executed by some other person on his behalf, the authority of that
\nperson to do so.<\/p>\n<\/td>\n<\/tr>\n

\n

2.5<\/p>\n<\/td>\n

\n

If the Board refuses to register the transfer of a Note it shall, within
\nseven days after the date on which the transfer was lodged with the Company,
\nsend notice of the refusal to the transferee. An instrument of transfer which
\nthe Board refuses to register shall (except in the case of suspected<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-17-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n\n

fraud) be returned to the person depositing it. All instruments of transfer
\nwhich are registered may be retained by the Company.<\/p>\n<\/td>\n<\/tr>\n

\n

2.6<\/p>\n<\/td>\n

\n

Unless the Board refuses to register the transfer of a Note pursuant to
\nparagraph 2.4 of this Schedule 2, it will register the transfer within seven
\ndays after the date on which the transfer was lodged with the Company. The
\nCompany may not charge a fee for registering the transfer of a Note or other
\ndocument relating to or affecting the title to a Note or the right to transfer
\nit or for making any other entry in the Register.<\/p>\n<\/td>\n<\/tr>\n

\n

3 <\/strong><\/p>\n<\/td>\n

\n

Transmission of Notes<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

3.1<\/p>\n<\/td>\n

\n

The Company may recognise only the personal representative or representatives
\nof a deceased Noteholder as having title to a Note held by that Noteholder alone
\nor to which he alone was entitled. In the case of a Note held jointly by more
\nthan one person, the Company may recognise only the survivor or survivors as
\nbeing entitled to it.<\/p>\n<\/td>\n<\/tr>\n

\n

3.2<\/p>\n<\/td>\n

\n

Nothing in this Deed releases the estate of a deceased Noteholder from
\nliability in respect of a Note which has been solely or jointly held by him.\n<\/p>\n<\/td>\n<\/tr>\n

\n

3.3<\/p>\n<\/td>\n

\n

A person becoming entitled by transmission to a Note may, on production of
\nany evidence the Board may reasonably require, elect either to be registered as
\na Noteholder or to have a person nominated by him registered as a Noteholder. If
\nhe elects to be registered himself, he shall give notice to the Company to that
\neffect. If he elects to have another person registered, he shall execute an
\ninstrument of transfer of the Note to that person. All the provisions of this
\nDeed relating to the transfer of Notes apply to the notice or instrument of
\ntransfer (as the case may be) as if it were an instrument of transfer executed
\nby the Noteholder and his death, bankruptcy or other event giving rise to a
\ntransmission of entitlement had not occurred.<\/p>\n<\/td>\n<\/tr>\n

\n

3.4<\/p>\n<\/td>\n

\n

The Board may give notice requiring a person to make the election referred to
\nin paragraph 3.3 of this Schedule 2. If that notice is not complied with within
\n60 days the Board may withhold payment of principal moneys, interest and all
\nother amounts payable in respect of the Note until notice of election has been
\nmade.<\/p>\n<\/td>\n<\/tr>\n

\n

3.5<\/p>\n<\/td>\n

\n

Where a person becomes entitled by transmission to a Note, the rights of the
\nNoteholder in relation to the Note cease. The person entitled by transmission
\nmay, however, give a good discharge for principal moneys, interest and other
\namounts payable in respect of the Note and, subject to paragraphs 3.3 and 3.4 of
\nthis Schedule 2 and condition 7.2, has the rights to which he would be entitled
\nif he were the holder of the Note. The person entitled by transmission is not,
\nhowever, before he is registered as the holder of the Note, entitled in respect
\nof it to receive notice of or exercise rights conferred by being a Noteholder in
\nrelation to meetings of the Noteholders.<\/p>\n<\/td>\n<\/tr>\n

\n

4 <\/strong><\/p>\n<\/td>\n

\n

Replacement certificates<\/strong><\/p>\n

Where a Note certificate is worn out, defaced, lost or destroyed, the Board
\nshall cancel it and issue a replacement certificate on such terms as to
\nprovision of evidence and indemnity (with or without security) and to payment of
\nany exceptional out of pocket expenses reasonably incurred by the Company in the
\ninvestigation of that evidence and the preparation of that indemnity and
\nsecurity as the Board may reasonably decide, and on surrender of the original
\ncertificate (where it is worn out or defaced).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-18-<\/p>\n

\n

SCHEDULE 3<\/p>\n

Provisions for Meetings of Noteholders<\/strong><\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

1 <\/strong><\/p>\n<\/td>\n

\n

Convening meetings<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

1.1<\/p>\n<\/td>\n

\n

The Company may convene a meeting of the Noteholders at any time.<\/p>\n<\/td>\n<\/tr>\n

\n

1.2<\/p>\n<\/td>\n

\n

The Company shall convene a meeting of the Noteholders immediately on receipt
\nof a requisition from Noteholders holding at the date of the deposit of the
\nrequisition not less than one tenth in principal amount of the Notes outstanding
\nat that date.<\/p>\n<\/td>\n<\/tr>\n

\n

1.3<\/p>\n<\/td>\n

\n

The requisition:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

shall state the objects of the meeting;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

shall be signed by the requisitioners and deposited at the Registered Office;
\nand<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

may consist of several documents in like form each signed by one or more
\nrequisitioners.<\/p>\n<\/td>\n<\/tr>\n

\n

1.4<\/p>\n<\/td>\n

\n

The meeting shall be held at such place in the United Kingdom as the Company,
\nacting reasonably, may decide.<\/p>\n<\/td>\n<\/tr>\n

\n

2 <\/strong><\/p>\n<\/td>\n

\n

Notice<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

2.1<\/p>\n<\/td>\n

\n

A meeting convened for the passing of an Extraordinary Resolution shall be
\ncalled by not less than 21 clear days’ notice. All other meetings shall be
\ncalled by not less than 14 clear days’ notice.<\/p>\n<\/td>\n<\/tr>\n

\n

2.2<\/p>\n<\/td>\n

\n

The notice of meeting shall specify:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

the place, date and time of the meeting;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

the terms of each resolution to be proposed; and<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

with reasonable prominence, that a Noteholder entitled to attend and vote may
\nappoint one or more proxies to attend and, on a poll, vote instead of the
\nNoteholder and that a proxy need not also be a Noteholder.<\/p>\n<\/td>\n<\/tr>\n

\n

3 <\/strong><\/p>\n<\/td>\n

\n

Quorum<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

3.1<\/p>\n<\/td>\n

\n

No business may be transacted at a meeting unless a quorum is present. The
\nabsence of a quorum does not prevent the appointment of a chairman in accordance
\nwith paragraph 5 of this Schedule 3, which is not treated as part of the
\nbusiness of the meeting.<\/p>\n<\/td>\n<\/tr>\n

\n

3.2<\/p>\n<\/td>\n

\n

The quorum for a meeting convened for any meeting is a person or persons
\nholding or representing by proxy a majority in principal amount of the Notes
\noutstanding at the date of the meeting.<\/p>\n<\/td>\n<\/tr>\n

\n

4 <\/strong><\/p>\n<\/td>\n

\n

Absence of Quorum<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

4.1<\/p>\n<\/td>\n

\n

If a quorum is not present within twenty minutes (or such longer period as
\nthe chairman in his absolute discretion may decide) from the time fixed for the
\nstart of the meeting or if during the meeting a quorum ceases to be present, the
\nmeeting:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

if convened on the requisition of the Noteholders, shall be dissolved; or\n<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

in any other case, shall stand adjourned to such time (being not less than 14
\ndays nor more than 28 days later) and place as the chairman (or, in default, the
\nBoard) may decide.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-19-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

4.2<\/p>\n<\/td>\n

\n

At an adjourned meeting the quorum shall be the Noteholders present in person
\nor by proxy, whatever the principal amount of the Notes held by them. If a
\nquorum is not present within five minutes (or such longer period as the chairman
\nin his absolute discretion may decide) from the time fixed for the start of the
\nmeeting or if during the meeting a quorum ceases to be present, the adjourned
\nmeeting shall be dissolved.<\/p>\n<\/td>\n<\/tr>\n

\n

4.3<\/p>\n<\/td>\n

\n

The Company shall give not less than seven clear days’ notice of any meeting
\nadjourned for the lack of a quorum and the notice shall comply with paragraph
\n2.2 of this Schedule 3 and shall state the quorum requirement.<\/p>\n<\/td>\n<\/tr>\n

\n

5 <\/strong><\/p>\n<\/td>\n

\n

Chairman<\/strong><\/p>\n

The Noteholders present at the meeting shall select one of their numbers to
\npreside as chairman at the meeting.<\/p>\n<\/td>\n<\/tr>\n

\n

6<\/strong><\/p>\n<\/td>\n

\n

Right to attend and speak<\/strong><\/p>\n

Each member of the Board and any person authorised by the Board may attend
\nand speak at a meeting whether or not he is a Noteholder.<\/p>\n<\/td>\n<\/tr>\n

\n

7 <\/strong><\/p>\n<\/td>\n

\n

Power to adjourn<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

7.1<\/p>\n<\/td>\n

\n

The chairman may, with the consent of a meeting at which a quorum is present
\nand shall, if so directed by the meeting adjourn a meeting from time to time and
\nfrom place to place or for an indefinite period.<\/p>\n<\/td>\n<\/tr>\n

\n

7.2<\/p>\n<\/td>\n

\n

Without prejudice to any other power which he may have under the provisions
\nof this Schedule or at common law, the chairman may, without the consent of the
\nmeeting, interrupt or adjourn a meeting from time to time and from place to
\nplace or for an indefinite period if he decides that it has become necessary to
\ndo so in order to:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

secure the proper and orderly conduct of the meeting;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

give all persons entitled to do so a reasonable opportunity of speaking and
\nvoting at the meeting; or<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

ensure that the business of the meeting is properly disposed of.<\/p>\n<\/td>\n<\/tr>\n

\n

8 <\/strong><\/p>\n<\/td>\n

\n

Notice of adjourned meeting<\/strong><\/p>\n

Without prejudice to paragraph 4.3 of this Schedule 3, whenever a meeting is
\nadjourned for 28 days or more or for an indefinite period, at least seven clear
\ndays’ notice specifying the place, the date and the time of the adjourned
\nmeeting and the general nature of the business to be transacted shall be given
\nto the Noteholders and each member of the Board. Except in these circumstances
\nand subject to paragraph 4.3, it is not necessary to give notice of an adjourned
\nmeeting or of the business to be transacted at the adjourned meeting.<\/p>\n<\/td>\n<\/tr>\n

\n

9<\/strong><\/p>\n<\/td>\n

\n

Business at adjourned meeting<\/strong><\/p>\n

No business may be transacted at an adjourned meeting other than the business
\nwhich might properly have been transacted at the meeting from which the
\nadjournment took place.<\/p>\n<\/td>\n<\/tr>\n

\n

10<\/strong><\/p>\n<\/td>\n

\n

Method of voting<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

10.1<\/p>\n<\/td>\n

\n

At a meeting, a resolution put to the vote of the meeting is decided by a
\nshow of hands unless (before or on the declaration of the result of the show of
\nhands) a poll is duly demanded.<\/p>\n<\/td>\n<\/tr>\n

\n

10.2<\/p>\n<\/td>\n

\n

A poll may be demanded on a question by the chairman of the meeting or a
\nNoteholder or Noteholders present in person or by proxy representing in total
\nnot less than one twentieth in principal amount of the Notes outstanding at the
\ndate of the meeting.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-20-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

10.3<\/p>\n<\/td>\n

\n

A demand by a proxy is deemed to be a demand by the Noteholder appointing the
\nproxy.<\/p>\n<\/td>\n<\/tr>\n

\n

10.4<\/p>\n<\/td>\n

\n

Unless a poll is demanded and the demand is not withdrawn, a declaration by
\nthe chairman that the resolution has been carried, or carried by a particular
\nmajority, or lost or not carried by a particular majority, and an entry to that
\neffect in the book containing the minutes of proceedings, is conclusive evidence
\nof the fact without proof of the number or proportion of the votes recorded in
\nfavour of or against the resolution.<\/p>\n<\/td>\n<\/tr>\n

\n

11 <\/strong><\/p>\n<\/td>\n

\n

Procedure on a poll<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

11.1<\/p>\n<\/td>\n

\n

If a poll is properly demanded, it shall be taken in such manner as the
\nchairman may direct. He may appoint scrutineers, who need not be Noteholders,
\nand may fix a time and place for declaring the result of the poll. The result of
\nthe poll is deemed to be the resolution of the meeting at which the poll is
\ndemanded.<\/p>\n<\/td>\n<\/tr>\n

\n

11.2<\/p>\n<\/td>\n

\n

A poll demanded on the election of a chairman or on any question of
\nadjournment shall be taken at the meeting and without adjournment. A poll
\ndemanded on another question shall be taken at such time and place as the
\nchairman may decide, either at once or after an interval or adjournment (but not
\nmore than 30 clear days after the date of the demand).<\/p>\n<\/td>\n<\/tr>\n

\n

11.3<\/p>\n<\/td>\n

\n

No notice need be given of a poll not taken immediately if the time and place
\nat which it is to be taken are announced at the meeting at which it is demanded.
\nIn any other case at least seven clear days’ notice shall be given specifying
\nthe time and place at which the poll is to be taken.<\/p>\n<\/td>\n<\/tr>\n

\n

11.4<\/p>\n<\/td>\n

\n

The demand for a poll may be withdrawn but only with the consent of the
\nchairman. A demand withdrawn in this way validates the result of a show of hands
\ndeclared before the demand is made. In the case of a poll demanded before the
\ndeclaration of the result of a show of hands, the meeting shall continue as if
\nthe demand had not been made.<\/p>\n<\/td>\n<\/tr>\n

\n

11.5<\/p>\n<\/td>\n

\n

The demand for a poll (other than on the election of the chairman or on a
\nquestion of adjournment) does not prevent the meeting continuing for the
\ntransaction of business other than the question on which a poll has been
\ndemanded.<\/p>\n<\/td>\n<\/tr>\n

\n

11.6<\/p>\n<\/td>\n

\n

On a poll, votes may be given in person or by proxy and a Noteholder entitled
\nto more than one vote need not, if he votes, use all his votes or cast all the
\nvotes he uses in the same way.<\/p>\n<\/td>\n<\/tr>\n

\n

12 <\/strong><\/p>\n<\/td>\n

\n

Votes<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

12.1<\/p>\n<\/td>\n

\n

At a meeting every Noteholder present in person has on a show of hands one
\nvote and every Noteholder present in person or by proxy has on a poll one vote
\nfor every 1 in principal amount of the Note or Notes of which he is the holder.\n<\/p>\n<\/td>\n<\/tr>\n

\n

12.2<\/p>\n<\/td>\n

\n

In the case of joint holders of a Note, the vote of the senior who tenders a
\nvote, whether in person or by proxy, shall be accepted to the exclusion of the
\nvotes of the other joint holders, and seniority is determined by the order in
\nwhich the names of the holders stand in the Register.<\/p>\n<\/td>\n<\/tr>\n

\n

13<\/strong><\/p>\n<\/td>\n

\n

Casting vote of the chairman<\/strong><\/p>\n

In the case of an equality of votes the chairman has, on a show of hands and
\non a poll, a casting vote in addition to any vote to which he is entitled as a
\nNoteholder.<\/p>\n<\/td>\n<\/tr>\n

\n

14 <\/strong><\/p>\n<\/td>\n

\n

Voting by proxy<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

14.1<\/p>\n<\/td>\n

\n

An instrument appointing a proxy shall be in writing in any usual form (or in
\nanother form approved by the Board) executed by the appointor or his duly
\nconstituted attorney or, if the appointor is a company, under its seal or under
\nthe hand of its duly authorised officer or attorney or other person authorised
\nto sign.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-21-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

14.2<\/p>\n<\/td>\n

\n

An instrument of proxy is deemed (unless the contrary is stated in it) to
\nconfer authority to demand or join in demanding a poll and to vote on a
\nresolution or amendment of a resolution put to, or other business which may
\nproperly come before, the meeting or meetings for which it is given, as the
\nproxy thinks fit.<\/p>\n<\/td>\n<\/tr>\n

\n

14.3<\/p>\n<\/td>\n

\n

A proxy need not be a Noteholder.<\/p>\n<\/td>\n<\/tr>\n

\n

14.4<\/p>\n<\/td>\n

\n

A Noteholder may appoint more than one proxy to attend on the same occasion.
\nWhen two or more valid but differing instruments of proxy are delivered for the
\nsame Note for use at the same meeting, the one which is last validly delivered
\n(regardless of its date or the date of its execution) shall be treated as
\nreplacing and revoking the other or others as regards that Note.<\/p>\n<\/td>\n<\/tr>\n

\n

14.5<\/p>\n<\/td>\n

\n

Deposit of an instrument of proxy does not prevent a Noteholder attending and
\nvoting in person at the meeting or an adjournment of the meeting or on a poll.\n<\/p>\n<\/td>\n<\/tr>\n

\n

14.6<\/p>\n<\/td>\n

\n

An instrument of proxy is (unless the contrary is stated in it) valid for an
\nadjournment of the meeting as well as for the meeting or meetings to which it
\nrelates. An instrument of proxy is valid for 12 months from the date of
\nexecution.<\/p>\n<\/td>\n<\/tr>\n

\n

14.7<\/p>\n<\/td>\n

\n

The Company may send an instrument of proxy to all or none of the persons
\nentitled to receive notice of and to vote at a meeting. If sent the instrument
\nshall provide for two way voting (without prejudice to a right to abstain) on
\nall resolutions set out in the notice of meeting.<\/p>\n<\/td>\n<\/tr>\n

\n

15 <\/strong><\/p>\n<\/td>\n

\n

Deposit of proxy<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

15.1<\/p>\n<\/td>\n

\n

An instrument of proxy, and (if required by the Board) a power of attorney or
\nother authority under which it is executed or a copy of it notarially certified
\nor certified in some other way approved by the Board, shall be:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

deposited at the Registered Office, or another place in the United Kingdom
\nspecified in the notice convening the meeting or in an instrument of proxy or
\nother accompanying document sent by the Company in relation to the meeting, not
\nless than 48 hours before the time for holding the meeting or adjourned meeting
\nor the taking of a poll at which the person named in the instrument proposes to
\nvote;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

in the case of a meeting adjourned for less than 28 days but more than 48
\nhours or in the case of a poll taken more than 48 hours after it is demanded,
\ndeposited as required by paragraph 15.1(a) not less than 24 hours before the
\ntime appointed for the holding of the adjourned meeting or the taking of the
\npoll; or<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

in the case of a meeting adjourned for less than 48 hours or in the case of a
\npoll not taken immediately but taken not more than 48 hours after it was
\ndemanded, delivered at the adjourned meeting or at the meeting at which the poll
\nwas demanded to the chairman or to the secretary or to a director of the
\nCompany.<\/p>\n<\/td>\n<\/tr>\n

\n

15.2<\/p>\n<\/td>\n

\n

An instrument of proxy not deposited or delivered in accordance with
\nparagraph 15.1 of this Schedule 3 is invalid.<\/p>\n<\/td>\n<\/tr>\n

\n

16 <\/strong><\/p>\n<\/td>\n

\n

When votes by proxy valid though authority revoked<\/strong><\/p>\n

A vote given or poll demanded by a proxy or authorised representative of a
\ncompany is valid despite termination of his authority unless notice of
\ntermination is received by the Company at the Registered Office (or other place
\nspecified for depositing the instrument of proxy) at least one hour before the
\ntime for holding the meeting or adjourned meeting at which the vote is given or
\n(in the case of a poll taken otherwise than at or on the same day as the meeting
\nor adjourned meeting) the time appointed for the taking of the poll at which the
\nvote is cast.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-22-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\n

17 <\/strong><\/p>\n<\/td>\n

\n

Corporate representative<\/strong><\/p>\n

A company which is a Noteholder may, by resolution of its directors or other
\ngoverning body, authorise a person to act as its representative at a meeting of
\nNoteholders (the “representative”). The representative may exercise on behalf of
\nthe company (in respect of that part of the company’s holding of Notes to which
\nthe authorisation relates) those powers that the company could exercise if it
\nwere an individual Noteholder. The company is for the purposes of this Schedule
\ndeemed to be present in person at a meeting if the representative is present.
\nEach reference to attendance and voting in person is to be construed
\naccordingly. A member of the Board or the secretary of the Company or other
\nperson authorised for the purpose by the secretary may require the
\nrepresentative to produce a certified copy of the resolution of authorisation
\nbefore permitting him to exercise his powers.<\/p>\n<\/td>\n<\/tr>\n

\n

18<\/strong><\/p>\n<\/td>\n

\n

Objections to and error in voting<\/strong><\/p>\n

No objection may be made to the qualification of a voter or to the counting
\nof, or failure to count, a vote, except at the meeting or adjourned meeting at
\nwhich the vote objected to is tendered or at which the error occurs. An
\nobjection properly made shall be referred to the chairman and only invalidates
\nthe result of the voting if, in the opinion of the chairman, it is of sufficient
\nmagnitude to affect the decision of the meeting. The decision of the chairman is
\nconclusive and binding on all concerned.<\/p>\n<\/td>\n<\/tr>\n

\n

19<\/strong><\/p>\n<\/td>\n

\n

Amendments to resolutions<\/strong><\/p>\n

If an amendment proposed to a resolution under consideration is ruled out of
\norder by the chairman the proceedings on the substantive resolution are not
\ninvalidated by an error in his ruling.<\/p>\n<\/td>\n<\/tr>\n

\n

20 <\/strong><\/p>\n<\/td>\n

\n

Extraordinary resolutions<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

20.1<\/p>\n<\/td>\n

\n

In addition to any other power, a meeting of Noteholders may by Extraordinary
\nResolution and with the consent of the Company sanction any modification,
\nabrogation or compromise in any respect of:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

the provisions of this Deed; or<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

the rights of the Noteholders against the Company, whether those rights arise
\nunder this Deed or otherwise.<\/p>\n<\/td>\n<\/tr>\n

\n

20.2<\/p>\n<\/td>\n

\n

Without limiting paragraph 20.1 of this Schedule 3, the Noteholders have
\npower to sanction in accordance with paragraph 20.1:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(a)<\/p>\n<\/td>\n

\n

an agreement for postponing or advancing the time for the payment of
\nprincipal moneys or interest payable in respect of the Notes;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(b)<\/p>\n<\/td>\n

\n

an agreement for reducing the rate of interest or for the capitalisation of
\nany interest;<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(c)<\/p>\n<\/td>\n

\n

an agreement for the exchange of Notes for, or conversion of Notes into,
\nother securities of the Company or another company; and<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

(d)<\/p>\n<\/td>\n

\n

a matter which under the provisions of this Deed is required to be sanctioned
\nby Extraordinary Resolution.<\/p>\n<\/td>\n<\/tr>\n

\n

20.3<\/p>\n<\/td>\n

\n

An Extraordinary Resolution is binding upon each Noteholder whether or not
\npresent at the meeting and each Noteholder is bound to give effect to the
\nExtraordinary Resolution.<\/p>\n<\/td>\n<\/tr>\n

\n

21 <\/strong><\/p>\n<\/td>\n

\n

Noteholders’ extraordinary resolutions<\/strong><\/p>\n

A resolution in writing executed by or on behalf of Noteholders holding more
\nthan 75 per cent. in principal amount of Notes for the time being outstanding
\nwho would have been entitled to vote upon it if it had been proposed at a
\nmeeting at which he was present is as effective as if it had<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-23-<\/p>\n

\n\n\n\n\n\n\n\n
<\/td>\n\n

been passed at a meeting duly convened and held. The resolution in writing
\nmay consist of several instruments in the same form each duly executed by or on
\nbehalf of one or more Noteholders. If the resolution in writing is described as
\nan Extraordinary Resolution, it has effect accordingly.<\/p>\n<\/td>\n<\/tr>\n

\n

22 <\/strong><\/p>\n<\/td>\n

\n

Minutes of meetings<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

22.1<\/p>\n<\/td>\n

\n

The Company shall cause minutes of all proceedings of meetings of the
\nNoteholders to be entered in books kept for that purpose.<\/p>\n<\/td>\n<\/tr>\n

\n

22.2<\/p>\n<\/td>\n

\n

A minute, if purporting to be signed by the chairman of the meeting at which
\nthe proceedings took place, or by the chairman of the next meeting, is
\nconclusive evidence of the proceedings.<\/p>\n<\/td>\n<\/tr>\n

\n

22.3<\/p>\n<\/td>\n

\n

Where minutes have been made in accordance with paragraph 22.2 of this
\nSchedule 3 of the proceedings at a meeting then, until the contrary is proved,
\nthe meeting is deemed duly held and convened, and all proceedings had at the
\nmeeting to have been duly had.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-24-<\/p>\n

\n

SCHEDULE 4<\/p>\n

Form of Bank Guarantee<\/strong><\/p>\n

To: [Beneficiary<\/em>] (the “Beneficiary<\/strong>“)<\/p>\n

[address<\/em>]<\/p>\n

Date [ ]2011<\/p>\n

Irrevocable Bank Guarantee no. [ ] <\/strong><\/p>\n

At the request of Citibank N.A, New York Branch and for the account of Jones
\nApparel Group Holdings, Inc. (a company registered under the laws of Delaware,
\nU.S.A.) (the “Company<\/strong>“), we, Citibank N.A., whose registered
\naddress is located at Citigroup Center, Canada Square, Canary Wharf, London E14
\n5LB (the “Issuing Bank<\/strong>“) issue this irrevocable bank guarantee
\n(“Bank Guarantee<\/strong>“) in your favour on the following terms and
\nconditions:<\/p>\n\n\n\n\n\n\n\n\n
\n

1. <\/strong><\/p>\n<\/td>\n

\n

DEFINITIONS<\/p>\n

In this Bank Guarantee:<\/p>\n

“Business Day<\/strong>” means a day (other than a Saturday or a
\nSunday) on which banks are open for general business in London.<\/p>\n

“Demand<\/strong>” means a demand for a payment under this Bank
\nGuarantee substantially in the form of the schedule to this Bank Guarantee.<\/p>\n

“Expiry Date<\/strong>” means, subject to the operation of paragraph
\n3.1 below, the first anniversary of the date of this Bank Guarantee.<\/p>\n

“Loan Note Instrument<\/strong>” means the loan note instrument made
\nby the Company and dated 2 June 2011.<\/p>\n

“Notes<\/strong>” means the unsecured fixed rate guaranteed notes
\nconstituted by the Loan Note Instrument, or as the case may be, the principal
\namounts represented by them and for the time being issued and outstanding, and a
\nreference to a “Note” is a reference to any one of such Notes.<\/p>\n

“Total Bank Guarantee Amount<\/strong>” means $[ ] in aggregate.<\/p>\n<\/td>\n<\/tr>\n

\n

2. <\/strong><\/p>\n<\/td>\n

\n

ISSUING BANK’S AGREEMENT<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

2.1<\/p>\n<\/td>\n

\n

The Beneficiary may request a drawing or drawings under this Bank Guarantee
\nby giving to the Issuing Bank the documents (the “Demand
\nDocuments<\/strong>“) listed in paragraph 2.2.1 and 2.2.2 below. The Demand
\nDocuments must be received by the Issuing Bank at the latest by 3.00 p.m (London
\ntime) on the Expiry Date.<\/p>\n<\/td>\n<\/tr>\n

\n

2.2<\/p>\n<\/td>\n

\n

Subject to the terms of this Bank Guarantee, the Issuing Bank unconditionally
\nand irrevocably undertakes to the Beneficiary that, within 10 Business Days of
\nreceipt by it of the following Demand Documents:<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

2.2.1<\/p>\n<\/td>\n

\n

a Demand; and<\/p>\n<\/td>\n<\/tr>\n

<\/td>\n\n

2.2.2<\/p>\n<\/td>\n

\n

an original or a certified copy of the certificate relating to the Notes in
\nrespect of which the amount that is the subject of the Demand has fallen due
\n(which, in the case of a certified copy, has been certified by a solicitor
\nadmitted to practise in England and Wales as being a true copy),<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-25-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n\n

it shall pay to the Beneficiary all amounts (including without limitation
\nprincipal and any interest) due and payable to the Beneficiary by the Company
\npursuant to the Notes and demanded in that Demand.<\/p>\n<\/td>\n<\/tr>\n

\n

2.3<\/p>\n<\/td>\n

\n

The Issuing Bank will not be obliged to make a payment under this Bank
\nGuarantee to the extent that any such payment would result in the aggregate of
\nall payments made by it under this Bank Guarantee exceeding the Total Bank
\nGuarantee Amount. For the avoidance of doubt, in the event that a payment under
\nthis Bank Guarantee would result in the aggregate of the payments made by the
\nIssuing Bank under this Guarantee to the Beneficiary exceeding the Total Bank
\nGuarantee Amount then the Issuing Bank shall pay such part of a Demand that
\nresults in the aggregate of all amounts paid by the Issuing Bank under this Bank
\nGuarantee equalling the Total Bank Guarantee Amount.<\/p>\n<\/td>\n<\/tr>\n

\n

3.<\/strong><\/p>\n<\/td>\n

\n

EXPIRY<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

3.1<\/p>\n<\/td>\n

\n

This Bank Guarantee shall remain in full force and effect up to and including
\nthe first anniversary of the date of this Bank Guarantee. Upon that anniversary
\n(and upon each subsequent anniversary) this Bank Guarantee shall automatically
\nbe extended for a further period of one year (or such lesser period as ends on
\n21 April 2016) unless the Issuing Bank has notified the Beneficiary in writing
\n(delivered to the Beneficiary by special delivery or courier requiring signature
\nby or on behalf of the Beneficiary on receipt at the address stated above or
\nsuch other address as the Beneficiary may notify the Guarantor of in writing for
\nthe purpose) at least 30 days prior to such anniversary date that this Bank
\nGuarantee will terminate on the next falling anniversary date (a
\n“Termination Notice<\/strong>“). In the event that no Termination Notice
\nis served (such that the Bank Guarantee is so automatically extended with effect
\nfrom the next falling anniversary date), then the Expiry Date shall for all
\npurposes be deemed amended to the anniversary date which is 12 months following
\nsuch anniversary date (or, if earlier, 21 April 2016). Notwithstanding the
\nforegoing, the final Expiry Date for this Bank Guarantee shall in any event be
\n21 April 2016, and the foregoing provisions shall be construed and shall apply
\naccordingly.<\/p>\n<\/td>\n<\/tr>\n

\n

3.2<\/p>\n<\/td>\n

\n

Subject to the other provisions of this paragraph 3, the Bank Guarantee shall
\nbe a continuing guarantee and shall remain in full force and effect until the
\namount available hereunder is reduced to ZERO pursuant to payments made by the
\nIssuing Bank to the Beneficiary of all amounts outstanding (including without
\nlimitation principal and any interest) under the Notes or this Bank Guarantee.\n<\/p>\n<\/td>\n<\/tr>\n

\n

3.3<\/p>\n<\/td>\n

\n

The Issuing Bank will be released from its obligations under this Bank
\nGuarantee on the date (if any) notified by the Beneficiary to the Issuing Bank
\nin writing as the date upon which the obligations of the Issuing Bank under this
\nBank Guarantee are released.<\/p>\n<\/td>\n<\/tr>\n

\n

3.4<\/p>\n<\/td>\n

\n

Notwithstanding any provisions herein, at 3.00 p.m.(London time) on the
\nExpiry Date the obligations of the Issuing Bank under this Bank Guarantee will
\ncease with no further liability on the part of the Issuing Bank (irrespective of
\nwhether the original of this Bank Guarantee is returned to the Issuing Bank or
\nnot) except for any Demand validly presented under the Bank Guarantee before
\nsuch time to the extent that claim remains unpaid.<\/p>\n<\/td>\n<\/tr>\n

\n

3.5<\/p>\n<\/td>\n

\n

When the Issuing Bank is no longer under any further obligations under this
\nBank Guarantee, the Beneficiary must on written request return any original of
\nthis Bank Guarantee remaining in the possession of such Beneficiary or his
\nadvisers or other agents to the Issuing Bank.<\/p>\n<\/td>\n<\/tr>\n

\n

4.<\/strong><\/p>\n<\/td>\n

\n

DEMANDS AND PAYMENTS<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

4.1<\/p>\n<\/td>\n

\n

All Demands made under this Bank Guarantee shall be made in British Pounds
\nSterling.<\/p>\n<\/td>\n<\/tr>\n

\n

4.2<\/p>\n<\/td>\n

\n

All payments under this Bank Guarantee shall be made in US Dollars.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

-26-<\/p>\n

\n\n\n\n\n\n\n\n\n\n\n
\n

4.3<\/p>\n<\/td>\n

\n

The British Pounds Sterling amount specified in a Demand shall be converted
\ninto US Dollars at the Bank’s spot rate of exchange for the purchase of British
\nPounds Sterling with US Dollars in the London foreign exchange market at or
\nabout 11:00 a.m. London time on the date of payment.<\/p>\n<\/td>\n<\/tr>\n

\n

4.4<\/p>\n<\/td>\n

\n

All payments under this Bank Guarantee shall be made for value to the account
\nof the Beneficiary specified in the Demand within 10 Business Days of receipt by
\nthe Issuing Bank of the Demand Documents listed in paragraph 2 above.<\/p>\n<\/td>\n<\/tr>\n

\n

5.<\/strong><\/p>\n<\/td>\n

\n

DELIVERY OF DEMAND<\/strong><\/p>\n

Each Demand hereunder must be in writing, and, unless otherwise stated, must
\nbe made by letter and must be received in legible form by the Issuing Bank at
\nits above mentioned registered address and must make reference to this Bank
\nGuarantee by its reference number and clearly marked for the attention of
\nEuropean Trade Service Department, SBLC\/Guarantee Issuing unit.<\/p>\n<\/td>\n<\/tr>\n

\n

6.<\/strong><\/p>\n<\/td>\n

\n

ASSIGNMENT<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

6.1<\/p>\n<\/td>\n

\n

This Bank Guarantee is transferable in whole (but not in part) to any body,
\ncorporation or other legal entity, (the “Transferee<\/strong>“), provided
\nalways that the Beneficiary obtains the Issuing Bank’s prior written consent,
\nwhich shall not be unreasonably withheld or delayed, provided that the Issuing
\nBank may reasonably withhold its consent where the Transferee is a body,
\ncorporation or other legal entity which is named in the US Department of the
\nTreasury, Office of Foreign Assets Control (“OFAC<\/strong>“) Specially
\nDesignated Nationals List, or incorporated in or has its principal place of
\nbusiness in or is a national of a country or territory which is subject to
\nrestrictions imposed by or which is not recognized by, OFAC, a regulator of the
\nUnited States of America, or any other regulator with whose rules the Issuing
\nBank or any of its branches customarily comply. Subject to above consent and\/or
\nother requirements, such a transfer will be subject to receipt of the original
\nof this Bank Guarantee (together with any amendments if any) together with a
\nwritten transfer request form which will be provided to the Beneficiary by the
\nIssuing Bank on written request by the Beneficiary. All costs related to such
\ntransfer shall be for the Beneficiary’s account.<\/p>\n<\/td>\n<\/tr>\n

\n

7.<\/strong><\/p>\n<\/td>\n

\n

ISP<\/strong><\/p>\n

Except to the extent it is inconsistent with the express terms of this Bank
\nGuarantee, this Bank Guarantee is subject to the International Standby Practices
\n(ISP 98), International Chamber of Commerce Publication No. 590.<\/p>\n<\/td>\n<\/tr>\n

\n

8.<\/strong><\/p>\n<\/td>\n

\n

GOVERNING LAW<\/strong><\/p>\n

This Bank Guarantee and any non-contractual obligations arising out of or in
\nconnection with this Bank Guarantee are governed by English law.<\/p>\n<\/td>\n<\/tr>\n

\n

9.<\/strong><\/p>\n<\/td>\n

\n

JURISDICTION<\/strong><\/p>\n

The courts of England have exclusive jurisdiction to settle any dispute
\narising out of or in connection with this Bank Guarantee.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Yours faithfully<\/p>\n

[Citibank N.A.]
\nBy: [ ]<\/p>\n

-27-<\/p>\n

\n

Schedule – Form of Demand<\/strong><\/p>\n

To: [ ] [Issuing Bank]<\/p>\n

[ ] [Date]<\/p>\n

Dears Sirs<\/p>\n

Bank Guarantee no. [ ] issued in favour of [beneficiary] (the “Bank
\nGuarantee”)<\/strong><\/p>\n\n\n\n\n\n\n\n
\n

1.<\/p>\n<\/td>\n

\n

I refer to the Bank Guarantee. Terms defined in the Bank Guarantee have the
\nsame meaning when used in this Demand.<\/p>\n<\/td>\n<\/tr>\n

\n

2.<\/p>\n<\/td>\n

\n

I certify that the sum of [ ] is due [and has remained unpaid for at least [
\n] Business Days] [under the Notes]. I therefore demand payment of the sum of [
\n].<\/p>\n<\/td>\n<\/tr>\n

\n

3.<\/p>\n<\/td>\n

\n

Payment should be made to the following account:
\nName: [ ]
\nAccount Number: [ ]
\nBank: [ ]<\/p>\n<\/td>\n<\/tr>\n

\n

4.<\/p>\n<\/td>\n

\n

The date of this Demand is not later than the Expiry Date.<\/p>\n<\/td>\n<\/tr>\n

\n

5.<\/p>\n<\/td>\n

\n

[A certified copy of the Note certificate\/The original Note certificate
\nrelating to this Demand ]is attached to this Demand.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Yours faithfully<\/p>\n

For
\n[Beneficiary<\/em>]<\/p>\n

-28-<\/p>\n

\n

Executed as a deed by Jones Apparel Group Holdings, Inc. acting by:<\/p>\n\n\n\n\n
\n

\/s\/ Ira M. Dansky<\/u>
\nsignature of director<\/p>\n<\/td>\n

\n

and<\/p>\n<\/td>\n

\n

\/s\/ John T. McClain<\/u>
\nsignature of witness<\/p>\n<\/td>\n<\/tr>\n

\n

Ira M. Dansky
\n<\/u>print name of director<\/p>\n<\/td>\n

<\/td>\n\n

John T. McClain<\/u>
\nprint name of witness<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n<\/p>\n

-29-<\/p><\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7946],"corporate_contracts_industries":[9396],"corporate_contracts_types":[9560,9567],"class_list":["post-41149","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-jones-apparel-group-inc-now-known-as-the-jones-group-inc","corporate_contracts_industries-consumer__clothing","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41149","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41149"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41149"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41149"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41149"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}