<PAGE> 1
Page 1 of 9 Pages
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)* (FINAL)
ZALE CORPORATION
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK
- --------------------------------------------------------------------------------
(Title of Class of Securities)
988858 10 6
- --------------------------------------------------------------------------------
(CUSIP Number)
Ronald Greenberg, Esq.
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10112
212 698 7710
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
August 31, 1995
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /. (A fee is
not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Although this Amendment No. 1 is a final Amendment, pursuant to Rule
101(a)(2)(ii) of Regulation S-T the original Schedule 13D (without exhibits) is
attached as an appendix to this Amendment No. 1.
<PAGE> 2
SCHEDULE 13D
- ------------------------ --------------------
CUSIP NO. 988858 10 6 PAGE 2 OF 9 PAGES
- ------------------------ --------------------
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Swarovski International Holding A.G.
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not applicable
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Switzerland
- -------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER None
SHARES ------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER None
OWNED BY ------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER None
REPORTING ------------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER None
WITH
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN
SHARES* / /
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- -------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION.
<PAGE> 3
Page 3 of 9 pages
This Amendment No. 1 amends and supplements the Schedule 13D,
dated September 9, 1993 (the "Schedule 13D"), filed by Swarovski International
Holding A.G. ("Holding") with regard to the common stock, par value $.01 per
share (the "Common Stock"), of Zale Corporation, a Delaware corporation
("Zale"). Capitalized terms used without definition have the meanings assigned
to them in the Schedule 13D.
Item 5. Interest in Securities of the Issuer.
Items 5(a), (b) and (c). Pursuant to a letter agreement, dated
August 31, 1995 (the "Letter Agreement"), on August 31, 1995 Zale redeemed, and
Holding assigned and delivered to Zale, all of Holding's 1,852,884 Warrants to
purchase Common Stock, Series B (the "Series B Warrants"), and Zale acquired all
of Holding's right, title and interest under or with respect to the Series B
Warrants, in consideration of Zale's payment of $9,264,420 to Holding. As
previously reported in the Schedule 13D, Holding had acquired the Series B
Warrants on September 3, 1993 pursuant to a Settlement Agreement approved by the
Bankruptcy Court which confirmed the Plan of Reorganization for Zale and its
Affiliated Debtors (the "Plan"), which Plan became effective July 30, 1993. In
addition, between July 11 and July 13, 1995, Swarovski America Limited ("SAL"),
a wholly-owned indirect subsidiary of Holding, sold in the open market 22,890
shares of Common Stock at a price per share of $13.50. These shares had been
issued to SAL pursuant to the Plan. Effective August 31, 1995, Holding no
longer beneficially owns any shares of the Common Stock.
<PAGE> 4
Page 4 of 9 pages
Item 5(e). As a result of the redemption by Zale of the
Series B Warrants, on August 31, 1995 Holding ceased to beneficially
own 5% or more of the shares of Common Stock.
Item 6. Contracts, Arrangements, Undertakings or Relationships With
Respect to Securities of the Issuer.
The first sentence of the amendment to the response to Items
5(a), (b) and (c) set forth above, describing the Letter Agreement, is
incorporated herein by reference.
Item 7. Material to be Filed as Exhibits.
Item 7 is hereby amended by the addition of the following:
(5) Letter Agreement, dated August 31, 1995, between
Holding and Zale.
<PAGE> 5
Page 5 of 9 pages
SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: August 31, 1995
SWAROVSKI INTERNATIONAL HOLDING, A.G.
By:/s/ Gernot Langes-Swarovski
----------------------------------------------
Name: Gernot Langes-Swarovski
Title: Chairman of the Board
By:/s/ Christian Schwemberger-Swarovski
----------------------------------------------
Name: Christian Schwemberger-Swarovski
Title: Vice Chairman of the Board
<PAGE> 6
Page 1 of 177 Pages
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _)*
ZALE CORPORATION
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK
- --------------------------------------------------------------------------------
(Title of Class of Securities)
988858 10 6
-------------------------------------------------------------------------------
(CUSIP Number)
Ronald Greenberg, Esq.
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza
New York, New York 10112
212 698 7710
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
September 9, 1993
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement /x/. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE> 7
SCHEDULE 13D
- ------------------------ ---------------------
CUSIP NO. 988858 10 6 PAGE 2 OF 177 PAGES
- ------------------------ ---------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Swarovski International Holding A.G.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
00; WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Switzerland
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER 1,874,044 shares of Common Stock
(including 1,852,884 issuable upon exercise of Series
NUMBER OF B Warrant)
SHARES -------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -------------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER 1,874,044 shares of Common
REPORTING Stock (including 1,852,884 issuable upon exercise of
PERSON Series B Warrant)
WITH -------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,874,044 shares of Common Stock (including 1,852,884
issuable upon exercise of Series B Warrant)
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN
SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.08%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE AND THE SIGNATURE ATTESTATION.
<PAGE> 8
Page 3 of 177 Pages
Statement Pursuant to Rule 13d-1
of the General Rules and Regulations
under the Securities Exchange Act
of 1934, as amended
ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D relates to the Common Stock,
par value $.01 per share (the "Common Stock") of Zale Corporation, a Delaware
corporation ("Zale"). The address of the principal executive offices of Zale is
901 West Walnut Hill Lane, Irving, Texas 75038-1003
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed by Swarovski International Holding
A.G., a Swiss corporation ("Holding"). The business address and principal
offices of Holding are located at General Wille Strasse 88, CH-8706, Feldmeilen,
Switzerland. Holding is a holding company which is engaged, through its
subsidiaries, in the manufacture and marketing of precious and synthetic jewelry
stones, crystal, optical products, grinding wheels and abrasives and in
specialty retailing of costume jewelry, and which holds investments (either
directly or through subsidiaries) in other entities. The capital stock of
Holding is privately held by members of the Swarovski family, none of whom
individually control Holding.
The directors and executive officers of Holding, each of whom
has the same business address as Holding unless otherwise indicated, and their
present principal occupation or employment are:
Manfred Swarovski
Chairman of the Board of Directors of Holding
Gernot Langes-Swarovski
Vice-Chairman of the Board of Directors of Holding
Christian Schwemberger-Swarovski
Director of Holding
Gerhard Swarovski
Director of Holding
Helmut Swarovski
Director of Holding
<PAGE> 9
Page 4 of 177 Pages
Andreas Schiestl-Swarovski
Director of Holding
Marina Giori
Director of Holding
Carl Burckhardt
Director of Holding
Heinz B. Molan
Executive Officer of Holding
Dr. Michael Semerad-Radulescu
Executive Officer of Holding
Raymond A. Baliatico
Executive Officer of Holding
Reinhard Dallarosa
Executive Officer of Holding
Dieter A. Kattge
Executive Officer of Holding
Werner Trattner
Executive Officer of Holding
All of the above persons, with the exception of Mr. Radulescu,
Mrs. Giori, Mr. Burckhardt and Mr. Baliatico, are Austrian citizens. Dr.
Radulescu is a German citizen, Mrs. Giori and Mr. Burckhardt are Swiss citizens,
and Mr. Baliatico is a United States citizen.
During the last five years, neither Holding nor any of the
executive officers or directors referred to above has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION.
The Plan of Reorganization under Chapter 11 of the Bankruptcy
Code for Zale and its Affiliated Debtors, jointly administered under Case No.
392-30001-SAF-11 (the "Plan"), was confirmed by the Bankruptcy Court for the
Northern District of Texas, Dallas Division (the "Bankruptcy Court"), on May 20,
1993,
<PAGE> 10
Page 5 of 177 Pages
and became effective on July 30, 1993 (the "Effective Date"). Under the Plan,
Swarovski America Limited, a wholly-owned indirect subsidiary of Holding, is to
be issued 21,160 shares of Common Stock in discharge of prepetition claims
against Zale and its Affiliated Debtors in the amount of $1,197,007.58, arising
out of the sale of goods in the ordinary course of business.
On May 21, 1993, the Bankruptcy Court approved the execution
by Zale and its Affiliated Debtors of a Settlement Agreement, dated as of April
30, 1993 (the "Settlement Agreement"), with Holding which provides for (i) the
settlement of all claims of Zale and its Affiliated Debtors (including claims of
creditors of Zale and its Affiliated Debtors assigned to Zale pursuant to the
Plan) against Holding and its directors, officers and affiliates, including
claims arising out of, among other things, the guaranty by Holding of
indebtedness owed to Zale (aggregating at least $37.5 million), (ii) the
delivery of general releases to Holding from Zale and its subsidiaries, and
(iii) the issuance to Holding of Warrants to purchase Common Stock, Series B
(the "Series B Warrants"), entitling Holding initially to purchase 1,852,884
shares of Common Stock on full exercise thereof, in consideration of the payment
by Holding to Zale of the sum of $70,000,000. On September 9, 1993, the
transactions under the Settlement Agreement were consummated and the Series B
Warrants were issued to Holding. The terms of the Series B Warrants are governed
by a Warrant Agreement, dated as of September 9, 1993, between Zale, Holding and
the Warrant Agent named therein (the "Series B Warrant Agreement").
Prior to the Effective Date, Holding owned 50% of Jewelers
Holding Corporation ("JHC"), which, in turn, owned 97.5% of Zale Holding
Corporation ("ZHC"), which, in turn, owned 100% of Zale. On the Effective Date,
ZHC's equity interest in Zale was cancelled and JHC was merged into a subsidiary
of Zale.
There is no separate allocation of the consideration paid by
Holding under the Settlement Agreement to the settlement of claims (including
satisfaction of guarantee obligations), general releases and Series B Warrants
to be received by Holding thereunder. The funds paid under the Settlement
Agreement were paid from funds of Holding and funds provided by affiliated
companies. No portion of the Series B Warrants is required to be distributed to
such affiliated companies.
ITEM 4. PURPOSE OF TRANSACTION.
Holding acquired beneficial ownership of the shares of Common
Stock and Series B Warrants described in Item 3 to which this Statement on
Schedule 13D relates as a result of the consummation of the Plan and the
consummation of the transactions contemplated under the Settlement Agreement. If
Holding were to
<PAGE> 11
Page 6 of 177 Pages
exercise the Series B Warrants, its ownership of Common Stock might give Holding
the ability to influence the affairs of Zale. Holding may acquire additional
shares from time to time, in the open market or otherwise, subject to, among
other things, market conditions.
Pursuant to the Series B Warrant Agreement, Zale has agreed to
register, pursuant to Section 5 of the Securities Act of 1933, as amended (the
"Act"), an exchange offer (the "Exchange Offer"), whereby Holding will be
offered the opportunity to exchange some or all of its Series B Warrants for an
equal number of Warrants to Purchase Common Shares, Series C, of Zale (the
"Series C Warrants"). The terms of the Series C Warrants will be substantially
similar to the Series B Warrants and are set forth in the form of Warrant
Agreement attached as Annex B to the Series B Warrant Agreement (the "Series C
Warrant Agreement"). If Zale fails to consummate the Exchange Offer, or, in
certain circumstances, fails to cause a shelf registration with respect to the
Series B Warrants to become effective, by the 180th day following the date of
issuance of the Series B Warrants (September 9, 1993), Zale has agreed to issue
additional warrants (the "Penalty Warrants") to Holding, on a quarterly basis,
until either the Exchange Offer is consummated or the shelf registration has
been declared effective, until approximately 27 months after the date the Series
B Warrants were issued. In addition, under the Series C Warrant Agreement Zale
has agreed to maintain in effect a registration statement pursuant to Rule 415
under the Act for a delayed or continuous offering of Common Stock issuable upon
exercise of the Series C Warrants for a period of approximately five years from
the date of issuance of the Series B Warrants. If Zale fails to maintain this
registration statement in effect for a period in excess of 30 calendar days
(whether or not consecutive) in any period of 365 days, Holding will be entitled
to additional Penalty Warrants. The maximum aggregate amount of Penalty Warrants
issuable to Holding under the Series B Warrant Agreement and the Series C
Warrant Agreement can not exceed Penalty Warrants to purchase 730,450 shares of
Common Stock. As of the date hereof, no Penalty Warrants have been issued or are
issuable to Holding.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Holding acquired beneficial ownership of the shares of Common
Stock described in Item 3 to which this Statement on Schedule 13D relates as a
result of the consummation of the Plan and the consummation of the transactions
contemplated pursuant to the Settlement Agreement.
(a) Holding beneficially owns an aggregate of
1,874,044 shares of Common Stock (including 1,852,884 shares issuable upon
exercise of Series B Warrants but excluding shares issuable upon exercise of
Penalty Warrants not yet issued), or
<PAGE> 12
Page 7 of 177 Pages
5.08% of the Common Stock outstanding upon consummation of the transactions
contemplated pursuant to the Settlement Agreement. Beneficial ownership of such
shares was acquired as described in Item 3 and Item 4.
(b) The number of shares of Common Stock as to which
there is sole power to vote or to direct the vote, shared power to vote or to
direct the vote, sole power to dispose or direct the disposition, or shared
power to dispose or direct the disposition for Holding is set forth in the cover
pages and such information is incorporated herein by reference.
(c) There have been no reportable transactions with
respect to the Common Stock within the last 60 days by Holding except for the
acquisition of beneficial ownership of the shares of Common Stock being reported
on this Statement.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIP
WITH RESPECT TO THE SECURITIES OF THE ISSUER.
The responses to Item 3 and Item 4 are incorporated herein by
reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(1) Plan of Reorganization, as amended and supplemented
to date (incorporated by reference to Disclosure
Statement Pursuant to Section 1125 of the
Bankruptcy Code with Respect to the Plan of
Reorganization under Chapter 11 of the Bankruptcy
Code for Zale Corporation and its Affiliated
Debtors dated March 22, 1993, as filed with the
Securities and Exchange Commission with the
Company's Form T-3 (no. 22-24068) on April 2,
1993).
(2) Warrant Agreement, among Zale Corporation, Zale
Corporation, as Warrant Agent, and Swarovski
International Holding A.G., dated as of September 9,
1993, with respect to Warrants to Purchase Common
Stock, Series B.
(3) Form of Warrant Certificates for Series B Warrants.
(4) Form of Warrant Agreement with respect to Warrants
to Purchase Common Stock, Series C.
<PAGE> 13
Page 8 of 177 Pages
SIGNATURE
After reasonable inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: September 9, 1993
SWAROVSKI INTERNATIONAL HOLDING, AG
By: /s/ Gernot Langes-Swarovski
------------------------------------
Name: Gernot Langes-Swarovski
Title: Vice-Chairman
By: /s/ Andreas Schiestl-Swarovski
------------------------------------
Name: Andreas Schiestl-Swarovski
Title: Director
<PAGE> 14
EXHIBIT INDEX
(5) Letter Agreement, dated August 31, 1995, between
Holding and Zale.
<PAGE> 1
Page 6 of 9 pages
Exhibit 5
Swarovski International Holding AG
General-Wille-Strasse 88
CH-8706 Feldmeilen
Switzerland
August 31, 1995
Zale Corporation
901 West Walnut Hill Lane
Irving, Texas 75038-1003
Gentlemen:
Reference is made to that certain Warrant Certificate, No. 1
issued by Zale Corporation ("Zale") to Swarovski International Holding AG
("SIH"), or registered assigns, representing 1,852,884 Warrants to Purchase
Common Stock, Series B (the "Series B Warrants"). Reference is further made to
that certain Warrant Agreement, dated September 9, 1993, among Zale, SIH and
Zale, as Warrant Agent (the "Warrant Agreement"), pursuant to which the Series B
Warrants were issued and delivered and setting forth certain provisions with
respect thereto.
The purpose of this letter agreement is to set forth the terms
and conditions upon which Zale has agreed to redeem the Series B Warrants and
acquire all of SIH's right, title and interest under or with respect to the
Series B Warrants and the Warrant Agreement (the "SIH Rights").
SIH and Zale hereby agree as follows:
1. On the terms and subject to the conditions hereinafter set
forth, simultaneously with the execution hereof, the Series B Warrants shall be
redeemed by Zale and SIH shall assign, transfer, convey and deliver to Zale, and
Zale shall acquire and accept, the Series B Warrants and the SIH Rights, all
free and clear of all liens, pledges and encumbrances ("Liens").
2. Zale shall pay to SIH, in consideration of the redemption
and assignment referred to in paragraph 1 above, the sum of $9,264,420, payable
by wire transfer of immediately available funds to the account of SIH set forth
on Exhibit A annexed hereto and in accordance with the wire transfer
instructions set forth therein. At the time of such wire transfer, SIH shall
deliver to Zale the originally executed Warrant Certificate No. 1 evidencing the
Series B Warrants, accompanied by an assignment instrument in form and substance
reasonably satisfactory to Zale, as well as a separate instrument, in form and
substance reasonably satisfactory to Zale,
<PAGE> 2
Page 7 of 9 pages
assigning to Zale the SIH Rights, each such assignment to be free and clear of
all Liens and to be effective as of the payment to SIH of the amount set forth
above. The wire transfer and delivery of the Series B Warrants and Assignment
shall occur no later than 5:00 P.M. (CST) Thursday, August 31, 1995. As a result
of such redemption, the Series B Warrants shall be cancelled and shall no longer
be outstanding.
3. SIH hereby agrees that from time to time and at the request
of Zale, and without further consideration, it will duly execute, acknowledge,
deliver and perform all such further acts, assignments, transfers, conveyances
and assurances as may be reasonably required to convey to and vest in Zale good
title to the Series B Warrants and the SIH Rights.
4. SIH hereby represents and warrants to Zale as follows: (a)
it owns all right, title and interest in and to the Series B Warrants and the
SIH Rights, free and clear of all Liens; (b)it has not exercised any of the
Series B Warrants; (c) the execution, delivery and performance by SIH of this
Letter Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of SIH
and do not and will not violate any law binding on SIH or conflict with or
result in the breach of, or constitute a default under, the certificate of
incorporation or by-laws of SIH or, to its knowledge, any agreement or
instrument to which it is a party or by which it is bound, or result in or
require the creation of any Lien on any of its properties; (d) this Letter
Agreement has been duly executed and delivered by SIH, and constitutes the
legal, valid and binding obligation of SIH, enforceable against it in accordance
with its terms, except insofar as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors rights generally and by general
principles of equity; and (e) it has received and reviewed all necessary
disclosure materials and has been afforded the opportunity to ask such questions
of representatives of Zale, and has received answers thereto, as it deemed
necessary in connection with its decision to sell the series B Warrants.
5. Zale hereby represents and warrants to SIH as follows: (a)
the execution, delivery and performance by Zale of this Letter Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Zale and do not and will not
violate any law binding on Zale or conflict with or result in the breach of, or
constitute a default under, the certificate of incorporation or by-laws of Zale
or, to its knowledge, any agreement or instrument to which it is a party or by
which it is bound, or result in or require the creation of any Lien on any of
its properties; and (b) this Letter Agreement has been duly executed and
delivered by Zale, and constitutes the legal, valid and binding obligation of
Zale, enforceable against it
-2-
<PAGE> 3
Page 8 of 9 pages
in accordance with its terms, except insofar as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors rights generally and by general
principles of equity.
6. This Letter Agreement contains the entire understanding
between the parties hereto concerning the subject matter hereof and may not be
changed, modified or altered, except by an agreement in writing, executed by the
parties hereto.
7. This Letter agreement shall be construed in accordance with
the internal laws of the State of Texas without regard to principles of
conflicts of law.
8. All notices required or permitted to be given under this
Letter Agreement shall be in writing and shall be given to the person entitled
thereto, by hand, by telecopier, or by certified or registered mail, return
receipt requested, sent, transmitted or posted to the address for that person
specified in writing by a notice given in accordance with the provisions
thereof:
If to SIH to it at:
Swarovski International Holding AG
General-Wille-Strasse 88
CH-8706 Feldmeilen
Switzerland
Attention: Heinz Molan
With a copy to:
Rubin Baum Levin Constant & Friedman
30 Rockefeller Plaza - 29th Floor
New York, New York 10112
Attention: Ronald Greenberg, Esq.
It to Zale to it at:
Zale Corporation
901 West Walnut Hill Lane
Irving, Texas 75038-1003
Attention: General Counsel
9. In case any provision of this Letter Agreement shall
be held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such
-3-
<PAGE> 4
Page 9 of 9 pages
provision in every other respect and the remaining provisions shall not in
anyway be affected or impaired thereby.
10. This Letter Agreement may be executed in several
counterparts, each of which shall constitute an original, but all of which
together shall constitute one of the same instrument.
Very truly yours,
SWAROVSKI INTERNATIONAL HOLDING AG
By: /s/Gernot Langes-Swarovski
-----------------------------
By: /s/Heinz Molan
-----------------------------
Agreed as of the date first
above written:
ZALE CORPORATION
By: /s/Merrill Wertheimer
-----------------------
-4-
