UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the thirteen weeks ended August 3, 1996
Commission File No. 1-11161
Nine West Group Inc.
(Exact name of Registrant as specified in its charter)
Delaware 06-1093855
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
9 West Broad Street
Stamford, Connecticut 06902
(Address of principal executive offices) (Zip Code)
(314) 579-8812
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Number of shares of Common Stock, $.01 par value, outstanding as of the
close of business on September 3, 1996: 35,703,702.
<PAGE>
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Page
----
Item 1 Condensed Consolidated Financial Statements (Unaudited)
Condensed Consolidated Statements of Income - Thirteen and
twenty-six weeks ended August 3, 1996 and July 29, 1995 3
Condensed Consolidated Balance Sheets - August 3, 1996 and
February 3, 1996 4
Condensed Consolidated Statements of Cash Flows - Twenty-six
weeks ended August 3, 1996 and July 29, 1995 5
Notes to Condensed Consolidated Financial Statements 6
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
PART II - OTHER INFORMATION
Item 1 Legal Proceedings 19
Item 4 Submission of Matters to a Vote of Security Holders 19
Item 6 Exhibits and Reports on Form 8-K 20
Signatures 21
Exhibit Index 22
<PAGE>
NINE WEST GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
13 Weeks Ended 26 Weeks Ended
------------------ ------------------
August 3 July 29 August 3 July 29
1996 1995 1996 1995
(In thousands except per share data)
Net revenues......................... $420,733 $345,742 $775,801 $516,273
Cost of goods sold................... 245,112 207,260 447,389 299,472
Purchase accounting adjustments to
cost of goods sold.................. - 23,559 - 23,559
-------- -------- -------- --------
Gross profit....................... 175,621 114,923 328,412 193,242
Selling, general and
administrative expenses............. 120,838 100,100 236,657 155,088
Amortization of acquisition goodwill,
trademarks and trade names.......... 2,390 1,657 4,781 1,657
-------- -------- -------- --------
Operating income................... 52,393 13,166 86,974 36,497
Interest expense - net............... 9,881 8,559 19,848 8,650
Other income - net................... 770 517 1,238 752
-------- -------- -------- --------
Income before income taxes......... 43,282 5,124 68,364 28,599
Income tax expense................... 17,314 2,100 27,346 11,525
-------- -------- -------- --------
Net income......................... $ 25,968 $ 3,024 $ 41,018 $ 17,074
======== ======== ======== ========
Weighted average common shares and
common share equivalents:
Primary............................ 36,923 34,923 36,755 34,866
Fully diluted...................... 38,318 37,941
-------- -------- -------- --------
Primary earnings per common share
and common share equivalents........ $ 0.70 $ 0.09 $ 1.12 $ 0.49
======== ======== ======== ========
Fully diluted earnings per common
share and common share equivalents.. $ 0.70 $ 1.10
======== ========
The accompanying Notes are an integral part of the Condensed Consolidated
Financial Statements.
<PAGE>
NINE WEST GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
August 3 February 3
1996 1996
(Unaudited)
ASSETS (In thousands except share data)
Current Assets:
Cash........................................... $ 34,208 $ 20,782
Accounts receivable - net...................... 61,089 78,867
Inventories - net.............................. 438,835 396,676
Deferred income taxes.......................... 38,519 46,088
Assets held for sale........................... 34,532 31,118
Prepaid expenses and other current assets...... 19,276 18,249
---------- ----------
Total current assets........................ 626,459 591,780
Property and equipment - net...................... 123,409 136,719
Deferred income taxes............................. 20,286 21,658
Goodwill.......................................... 208,731 233,149
Trademarks and trade names........................ 144,195 146,053
Other assets...................................... 27,584 30,733
---------- ----------
Total assets............................... $1,150,664 $1,160,092
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable............................... $ 109,275 $ 139,731
Accrued expenses and other current liabilities. 100,616 134,737
Current portion of long-term debt.............. 23,000 20,000
---------- ----------
Total current liabilities................... 232,891 294,468
Long-term debt.................................... 529,338 471,000
Other non-current liabilities..................... 72,413 66,298
---------- ----------
Total liabilities........................... 834,642 831,766
---------- ----------
Stockholders' Equity:
Common stock($0.01 par value, 100,000,000 shares
authorized; 35,684,810 and 35,240,052 shares
issued and outstanding, respectively).......... 356 352
Warrants......................................... - 57,600
Additional paid-in capital....................... 135,869 131,595
Retained earnings................................ 179,797 138,779
---------- ----------
Total stockholders' equity.................. 316,022 328,326
---------- ----------
Total liabilities and stockholders' equity. $1,150,664 $1,160,092
========== ==========
The accompanying Notes are an integral part of the Condensed Consolidated
Financial Statements.
<PAGE>
NINE WEST GROUP INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
26 Weeks Ended
---------------------
August 3 July 29
(In thousands) 1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................................ $ 41,018 $ 17,074
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization...................... 16,338 8,834
Provision for losses on accounts receivable........ 7,548 6,416
Provision for losses on inventory.................. 3,668 (643)
Loss on disposal of property and equipment......... 196 299
Deferred income taxes.............................. 8,941 (1,614)
Changes in assets and liabilities:
Increase in balance of accounts receivable sold. 29,221 -
Accounts receivable............................. (18,991) (37,140)
Inventory....................................... (45,187) 6,556
Prepaid expenses and other assets............... (6,873) 3,216
Accounts payable................................ (30,456) 32,932
Accrued expenses and other liabilities.......... (26,257) (8,551)
--------- --------
Net cash provided (used) by operating activities...... (20,834) 27,379
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment................... (18,289) (18,011)
Proceeds from sale of property and equipment.......... 19,840 -
Acquisition of businesses - net of cash acquired...... (6,137) (583,473)
Acquisition purchase price settlement................. 25,000 -
Net decrease (increase) in other assets............... 5,898 (1,314)
--------- --------
Net cash provided (used) by investing activities...... 26,312 (602,798)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under financing agreements............. 85,000 30,290
Proceeds from issuance of long term debt.............. 181,270 559,810
Repayments of long-term debt.......................... (205,000) -
Repurchase of warrants................................ (67,500) -
Net proceeds from issuance of stock................... 14,178 4,321
--------- --------
Net cash provided by financing activities............. 7,948 594,421
--------- --------
NET INCREASE IN CASH.................................. 13,426 19,002
CASH, BEGINNING OF PERIOD............................. 20,782 4,358
--------- --------
CASH, END OF PERIOD................................... $ 34,208 $ 23,360
========= ========
The accompanying Notes are an integral part of the Condensed Consolidated
Financial Statements.
<PAGE>
NINE WEST GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of
Nine West Group Inc. (the "Company"), its wholly-owned subsidiaries and its
controlled-interest joint ventures. The accompanying financial statements have
been prepared in accordance with generally accepted accounting principles. In
the opinion of management, such information contains all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of the
results of such periods. Certain prior year amounts have been reclassified to
conform to the current presentation. All intercompany transactions and balances
have been eliminated from the financial statements for the periods presented.
The results of operations for the 26 weeks ended August 3, 1996 are not
necessarily indicative of the results to be expected for the 52 weeks ending
February 1, 1997 ("Fiscal 1996").
On May 23, 1995, the Company consummated its acquisition (the
"Acquisition") of the footwear business (the "Footwear Group") of The United
States Shoe Corporation ("U.S. Shoe"). Financial information for the 13 and 26-
week periods ended August 3, 1996 is not comparable to financial information for
the 13 and 26-week periods ended July 29, 1995, as Footwear Group results are
only included in the 1995 periods for the 10 weeks from May 23, 1995 through
July 29, 1995.
Certain information and disclosures normally included in the notes to
consolidated financial statements have been condensed or omitted as permitted by
the rules and regulations of the Securities and Exchange Commission, although
the Company believes the disclosure is adequate to make the information
presented not misleading. The accompanying unaudited financial statements
should be read in conjunction with the financial statements contained in the
Annual Report on Form 10-K of the Company for the 53 weeks ended February 3,
1996 and the Quarterly Report on Form 10-Q of the Company for the periods
subsequent thereto.
2. EARNINGS PER SHARE
Primary weighted average common shares and common stock equivalents consist
of common stock issued and outstanding of 35,656,000 and 35,529,000 and primary
common stock equivalents of 1,267,000 and 1,226,000 shares, for the 13 and 26
weeks ended August 3, 1996, respectively. For the 13 and 26 weeks ended July
29, 1995, weighted average common shares and common stock equivalents include no
common stock equivalents, as such amounts were not material during the 1995
periods.
Fully diluted earnings per share reflect an after-tax interest adjustment
of $702,000 for the 13 and 26 weeks ended August 3, 1996 and fully diluted
weighted average shares outstanding of 38,318,000 and 37,941,000 for the 13 and
26 weeks ended August 3, 1996, respectively. This adjustment reflects the
issuance in June 1996 of $185.7 million principal amount of 5-1/2% convertible
subordinated notes due 2003 (the "Notes").
<PAGE>
3. INVENTORIES
Inventories are valued at the lower of cost or market. Approximately 69%
of inventory values were determined by using the FIFO (first in, first out)
method of valuation as of August 3, 1996; the remainder was determined by using
the weighted average cost method. Inventory is comprised of (in thousands):
Raw materials................................ $ 30,281
Work in process.............................. 3,943
Finished goods............................... 404,611
--------
Total inventory......................... $438,835
========
4. CASH FLOWS
Cash paid for income taxes was $18.6 million and $20.4 million for the 26
weeks ended August 3, 1996 and July 29, 1995, respectively. Cash paid for
interest was $19.8 million and $4.1 million for the 26 weeks ended August 3,
1996 and July 29, 1995, respectively.
5. ACQUISITION
In connection with the Acquisition, the Company assumed, and included in
the allocation of the acquisition cost, accruals for involuntary severance and
termination benefits of $8.6 million and relocation costs of $8.2 million.
These severance and relocation costs were incurred as a result of the Company's
integration plan announced during the 53-week period ended February 3, 1996
("Fiscal 1995"). The integration plan relates to the elimination of 295
administrative positions that have become duplicative through the combination of
operations and process efficiencies realized, and relocation of certain Footwear
Group functional and operational employees. Of these 295 position reductions,
approximately 226 were eliminated by August 3, 1996, with the remaining
reductions to be substantially completed during the remainder of 1996. As of
August 3, 1996, approximately $5.2 million ($3.3 million during the 26 weeks
ended August 3, 1996) of severance and termination benefits, and $5.4 million
($1.2 million during the 26 weeks ended August 3, 1996) of relocation costs had
been paid and charged against these liabilities. Any costs incurred in excess
of the liability recorded will be included in the determination of net income
when such amounts are recognized.
On June 5, 1996, the Company and U.S. Shoe consummated a settlement (the
"Settlement") of a post-closing balance sheet dispute relating to the
Acquisition. Pursuant to the Settlement, U.S. Shoe was obligated to pay the
Company $25.0 million, which has been recorded as a reduction in goodwill. In
addition, the Company and U.S. Shoe agreed that the Company would repurchase,
for a price of $67.5 million, the warrants to purchase 3.7 million of its shares
of common stock (the "Common Stock")issued by the Company to U.S. Shoe in
connection with the consummation of the Acquisition (the "Warrants"). The
Warrants were exercisable for shares of Common Stock at a price of $35.50 per
share. The net payment by the Company to U.S. Shoe of $42.5 million was
financed with borrowings under the Company's revolving credit facility.
<PAGE>
The following unaudited pro forma condensed combined summary of operations
(the "Pro Forma Summary") gives effect to the Acquisition as if such transaction
had occurred at the beginning of the period presented. The Pro Forma Summary
has been prepared utilizing the historical financial statements of the Footwear
Group. Pro forma adjustments include the amortization of goodwill, trademarks
and trade names, additional interest expense in connection with debt incurred to
finance the Acquisition, the exclusion of operating results with respect to
discontinued brands, the elimination of operating results with respect to assets
held for sale, the elimination of expenses associated with contracts not
acquired, and the elimination of transactions between the Footwear Group and
U.S. Shoe, its former parent. The Pro Forma Summary excludes the one-time
increase in cost of goods sold attributable to the fair value of inventory over
the FIFO cost as required by the purchase method of accounting.
26 Weeks Ended
July 29, 1995
--------------
(in thousands, except per share amounts)
Net revenues...................................... $698,145
Net income........................................ 4,438
Earnings per common share......................... $ 0.13
The foregoing Pro Forma Summary should not be considered indicative of
actual results that would have occurred had the Acquisition been consummated on
the date or for the period indicated, and does not purport to be indicative of
results of operations as of any future date or for any period.
6. BUSINESS RESTRUCTURING AND INTEGRATION CHARGES
During Fiscal 1995, the Company began the implementation of its planned
business restructuring and integration activities related to the Acquisition.
While some of the costs associated with the restructuring and integration of the
Footwear Group into the Company are reflected in the allocation of the
acquisition cost of the Footwear Group, the Company incurred and accrued
expenses for restructuring and integration costs of $51.9 million in the fourth
quarter of 1995 (the "Restructuring Charge"). The major components of the
Restructuring Charge are: (1) severance and termination benefits of $7.7
million; (2) write-down of assets, principally leasehold improvements, of $14.6
million; (3) accruals for lease and other contract terminations of $7.0 million;
(4) inventory valuation adjustments of $10.4 million; and (5) other integration
and consolidation costs of $12.2 million.
The Restructuring Charge reflects plans to restructure international
sourcing operations located in Italy, Korea and the Far East, and the
consolidation and integration of various corporate and business unit operations
and support functions. In relation to the Company's restructuring of its retail
operations, the plan includes the elimination of duplicate product lines, the
closing of approximately 40 of the Company's under-performing Banister retail
stores and conversion of a number of stores to other formats during Fiscal 1996,
and the termination during 1996 of the Company's agreement with Burlington Coat
Factory for the Company's operation of 84 leased shoe departments. Total cash
outlays related to this charge are estimated at approximately $22.0 million, of
which $14.2 million has been paid through August 3, 1996, including $9.8 million
paid during the 26 weeks ended August 3, 1996. The Restructuring Charge balance
at August 3, 1996 of $14.2 million is included in accrued expenses and other
<PAGE>
current liabilities.
During the 26 weeks ended August 3, 1996, the Company continued its planned
business restructuring and integration activities. The following table shows
the activity recorded against the major components of the Restructuring Charge
accrual through August 3, 1996:
<TABLE>
<C> <S> <S> <S> <S> <S> <S>
Other
Severance Lease and Integration
and Asset Contract Inventory and
Termination Write- Termination Valuation Consolidation
(in thousands) Benefits Downs Costs Adjustments Costs Total
--------- ------- ----------- ----------- ------------ -------
1995 Provision.............. $7,650 $14,620 $7,046 $10,423 $12,161 $51,900
1995 Activity............... 836 14,620 235 - 4,253 19,944
--------- ------- ----------- ----------- ------------ -------
February 3, 1996 balance.... 6,814 - 6,811 10,423 7,908 31,956
26 weeks ended August 3,
1996 activity............. 3,039 - 2,969 7,183 4,567 17,758
--------- ------- ----------- ----------- ------------ -------
August 3, 1996 balance $3,775 $ - $3,842 $ 3,240 $ 3,341 $14,198
========= ======= =========== =========== ============ =======
</TABLE>
In connection with the restructuring of its international sourcing
operations, the Company has substantially completed the liquidation of its
sourcing offices located in the Far East and began to source substantially all
of its Far East production through its new agency arrangement.
In connection with the restructuring of its retail operations, the Company
has completed 22 of its 40 planned Banister retail store closings through August
3, 1996. The remaining 18 planned Banister retail store closings are expected
to be substantially completed by the end of 1996. During the 26 weeks ended
August 3, 1996, the Company also closed all 84 of its leased departments
operating within Burlington Coat Factory stores.
Severance and termination benefits relate to approximately 475 employees,
420 of whom were retail store managers and sales associates, 50 were engaged in
manufacturing positions, principally related to the liquidation of the Company's
Far East office, and five were management employees. As of August 3, 1996,
approximately 370 employees had been terminated, with approximately $3.9 million
of severance and termination benefits being paid and charged against the
liability ($3.0 million during the 26 weeks ended August 3, 1996). The
remaining separations are expected to be substantially completed during the
remainder of Fiscal 1996.
<PAGE>
7. LONG TERM DEBT
CONVERTIBLE NOTES. In June 1996, the Company issued the Notes. The Notes
are due July 15, 2003 and are convertible into common stock of the Company at a
conversion price of $60.76 per share, subject to adjustment in certain
circumstances. The Notes are redeemable, in whole or in part, at the option of
the Company, at any time on or after July 16, 1999, at declining redemption
prices plus any accrued interest. The Notes are subordinated in right of
payment to all existing and future senior indebtedness of the Company. Proceeds
from the issuance of the Notes were approximately $181.3 million (net of
underwriters' discounts of $4.4 million) and were used to repay a portion of the
indebtedness outstanding under the Company's credit agreement, as discussed
below.
CREDIT AGREEMENT. On August 2, 1996, the Company's credit agreement was
amended and restated (the "Credit Agreement") to: (1) increase the outstanding,
quarterly amortizing term loan (the "Term Loan") to $335.0 million; (2) allow
the Company to borrow up to $225.0 million on a revolving basis (the "Revolving
Loan"); and (3) reduce the interest rates and fees and make certain
modifications to the covenants thereunder. Letters of credit outstanding under
the Revolving Loan may not exceed $100.0 million at any one time. The Credit
Agreement expires on November 1, 2001.
Amounts outstanding under the Credit Agreement are secured by substantially
all assets of the Company (excluding receivables related to the Company's
accounts receivable securitization facility) and bear interest, at the Company's
option, at rates based on Citibank, N.A.'s base rate or the Eurodollar rate.
Borrowings under the Credit Agreement will become unsecured once the Company
reaches an "investment grade" rating on its long-term senior unsecured
indebtedness.
The Credit Agreement contains various operating covenants which, among
other things, impose certain limitations on the Company's ability to incur
indebtedness, merge or consolidate. The Company is also required to comply with
financial covenants relative to net worth, leverage and fixed charge coverage.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following discussion and analysis should be read in conjunction with
the Condensed Consolidated Financial Statements of the Company and the Notes
thereto included in Item 1 of this report.
All references to "Second Quarter of 1996" and "Second Quarter of 1995" are
to the Company's 13-week periods ended August 3, 1996 and July 29, 1995,
respectively. Additionally, all references to the "first 26 weeks of 1996" and
"first 26 weeks of 1995" are to the Company's 26-week periods ended August 3,
1996 and July 29, 1995, respectively.
On May 23, 1995, the Company consummated its acquisition (the
"Acquisition") of the footwear business (the "Footwear Group") of The United
States Shoe Corporation ("U.S. Shoe"). Financial information for the 13 and 26-
week periods ended August 3, 1996 is not comparable to financial information for
the 13 and 26-week periods ended July 29, 1995, as Footwear Group results are
only included in the 1995 periods for the 10 weeks from May 23, 1995 through
July 29, 1995.
RESULTS OF OPERATIONS
Net income for the Second Quarter of 1996 was $26.0 million, or $0.70 per
share, compared to net income of $17.0 million, or $0.49 per share, for the
Second Quarter of 1995. Net income for the first 26 weeks of 1996 was $41.0
million, or $1.10 per share on a fully diluted basis, compared to net income of
$31.0 million, or $0.89 per share, for the first 26 weeks of 1995. Results for
1995 exclude the impact of a $23.6 million non-recurring increase in cost of
goods sold, attributable to the fair value of inventory over FIFO cost, recorded
as a result of the Acquisition (the "Cost of Goods Sold Adjustment"). Including
the Cost of Goods Sold Adjustment, net income for the Second Quarter of 1995 and
first 26 weeks of 1995 would have been $3.0 and $17.1 million (or $0.09 and
$0.49 per share), respectively.
The following tables set forth certain items in the Company's condensed
consolidated statements of income in millions of dollars and as a percentage of
net revenues for the Second Quarter and first 26 weeks of 1996 and 1995. For
comparative purposes, results of operations for the Second Quarter of 1995 and
first 26 weeks of 1995 exclude the Cost of Goods Sold Adjustment.
<PAGE>
13 Weeks Ended 26 Weeks Ended
(IN MILLIONS OF DOLLARS) Aug. 3 Jul. 29 Aug. 3 Jul. 29
(Unaudited) 1996 1995 1996 1995
------ ------ ------ ------
Net revenues.......................... $420.7 $345.7 $775.8 $516.3
Cost of goods sold.................... 245.1 207.2 447.4 299.5
------ ------ ------ ------
Gross profit....................... 175.6 138.5 328.4 216.8
Selling, general and
administrative expenses.............. 120.8 100.1 236.6 155.1
Amortization of acquisition goodwill,
trademarks and trade names........... 2.4 1.7 4.8 1.6
------ ------ ------ ------
Operating income................... 52.4 36.7 87.0 60.1
Interest expense - net................ 9.9 8.5 19.8 8.7
Other income - net.................... .8 .5 1.2 .7
------ ------ ------ ------
Income before income taxes......... 43.3 28.7 68.4 52.1
Income tax expense.................... 17.3 11.7 27.4 21.1
------ ------ ------ ------
Net income......................... $ 26.0 $ 17.0 $ 41.0 $ 31.0
====== ====== ====== ======
13 Weeks Ended 26 Weeks Ended
(AS A PERCENTAGE OF NET REVENUES) Aug. 3 Jul. 29 Aug. 3 Jul. 29
(Unaudited) 1996 1995 1996 1995
------ ------ ------ ------
Net revenues.......................... 100.0% 100.0% 100.0% 100.0%
Cost of goods sold.................... 58.3 59.9 57.7 58.0
------ ------ ------ ------
Gross profit....................... 41.7 40.1 42.3 42.0
Selling, general and
administrative expenses.............. 28.7 29.0 30.5 30.1
Amortization of acquisition goodwill,
trademarks and trade names........... 0.5 0.5 0.6 0.3
------ ------ ------ ------
Operating income................... 12.5 10.6 11.2 11.6
Interest expense - net................ 2.4 2.5 2.6 1.7
Other income - net.................... 0.2 0.2 0.2 0.2
------ ------ ------ ------
Income before income taxes......... 10.3 8.3 8.8 10.1
Income tax expense.................... 4.1 3.4 3.5 4.1
------ ------ ------ ------
Net income......................... 6.2% 4.9% 5.3% 6.0%
====== ====== ====== ======
<PAGE>
THIRTEEN WEEKS ENDED AUGUST 3, 1996 COMPARED
TO THIRTEEN WEEKS ENDED JULY 29, 1995
NET REVENUES. Net revenues were $420.7 million in the Second Quarter of
1996 compared to $345.7 million in the Second Quarter of 1995, an increase of
$75.0 million, or 21.7%. Net revenues of the Company's wholesale division
increased by $32.0 million, or 16.2%, of which: (1) $10.2 million is
attributable to the increase in net revenues resulting from the Acquisition of
the Footwear Group, the results of operations of which, for the Second Quarter
of 1995, are included only for the 10 weeks following the consummation of the
Acquisition; and (2) $21.8 million is attributable to the increase in net
revenues of the Company's wholesale division. Sales through the Company's
retail stores increased $43.0 million, or 29.1%. The increase in net revenues
of the Company's retail division is attributable to: (1) the opening (net of
closings, excluding the Company's leased departments operating within Burlington
Cost Factory stores (the "Burlington Leased Departments")) of 107 domestic and
36 international retail stores ($18.9 million); (2) an $18.3 million increase in
net revenues resulting from the Acquisition of the Footwear Group, the results
of operations of which, for the Second Quarter of 1995 are included only for the
10 weeks following the consummation of the Acquisition; and (3) comparable store
sales increases ($5.8 million). Comparable store sales include the net revenues
of all stores open for an entire month during the comparable current year and
prior year periods. Comparable store sales (including the sales of the acquired
Footwear Group stores, had they been acquired as of the beginning of the
comparable period of the prior year) increased 2.0% for the Second Quarter of
1996. Comparable store sales, excluding the results of the Specialty Footwear
Retailing ("SFR") division, which is comprised of Banister stores and Stein Mart
leased departments, increased 8.4% during the Second Quarter of 1996. This
difference is due primarily to the significant promotional activity of the SFR
division during the Second Quarter of 1995, compared to the Second Quarter of
1996. The foregoing comparable store sales do not include the results of the 84
Burlington Leased Departments, which were closed during the first 26 weeks of
1996. During the Second Quarter of 1996, wholesale net revenues accounted for
54.7% of the Company's consolidated net revenues, while retail operations
accounted for the remaining 45.3%.
GROSS PROFIT. Gross profit was $175.6 million in the Second Quarter of
1996, an increase of $37.1 million, or 26.8%, from $138.5 million in the Second
Quarter of 1995 (excluding the Cost of Goods Sold Adjustment). Gross profit as
a percentage of net revenues increased to 41.7% in the Second Quarter of 1996
from 40.1% in the Second Quarter of 1995. The increase in gross profit as a
percentage of net revenues is primarily attributable to: (1) the overall
improvement in gross margins of the wholesale division; (2) a greater percentage
of net revenues derived from the retail operations (45.3% in the Second Quarter
of 1996 compared to 42.7% in the Second Quarter of 1995), which revenues produce
greater gross margins than wholesale revenues; and (3) significant promotional
activity of the SFR division during the Second Quarter of 1995, compared to the
Second Quarter of 1996.
SELLING, GENERAL & ADMINISTRATIVE EXPENSES. Selling, general and
administrative ("SG&A") expenses (excluding the amortization of goodwill,
trademarks and trade names related to the Acquisition) were $120.8 million in
the Second Quarter of 1996, compared to $100.1 million in the Second Quarter of
1995, an increase of $20.7 million, or 20.7%. SG&A expense expressed as a
percentage of net revenues fell to 28.7% in the Second Quarter of 1996 from
<PAGE>
29.0% in the Second Quarter of 1995. The decrease in SG&A expense expressed as
a percentage of net revenues is due primarily to cost savings resulting from the
elimination of duplicative administrative positions, which were included in SG&A
expenses for the 10 weeks from May 23, 1995 through July 29, 1995. These cost
savings expressed as a percentage of net revenues were offset, in part, by the
increase in the percentage of net revenues contributed by the Company's retail
operations relative to its wholesale operations (the Company's retail operations
have a higher level of expenses as a percentage of net revenues than its
wholesale operations).
OPERATING INCOME. Operating income was $52.4 million, or 12.5% of net
revenues, for the Second Quarter of 1996 compared to $36.7 million, or 10.6% of
net revenues, for the Second Quarter of 1995 (excluding the Cost of Goods Sold
Adjustment). The increase in operating income as a percentage of net revenues
is attributable to the factors discussed above, offset in part by the additional
amortization of goodwill, trademarks and trade names related to the Acquisition.
Thirteen weeks of amortization is included in the Second Quarter of 1996,
compared to 10 weeks of amortization during the Second Quarter of 1995.
INTEREST EXPENSE - NET. Interest expense - net was $9.9 million in the
Second Quarter of 1996 compared to $8.5 million in the Second Quarter of 1995,
an increase of $1.4 million. The increased expense is primarily due to
Acquisition-related term loans, which were outstanding only for the period from
May 23 to July 29 during the Second Quarter of 1995, but were outstanding
during the entire Second Quarter of 1996.
TWENTY-SIX WEEKS ENDED AUGUST 3, 1996 COMPARED
TO TWENTY-SIX WEEKS ENDED JULY 29, 1995
NET REVENUES. Net revenues were $775.8 million in the first 26 weeks of
1996 compared to $516.3 million in the first 26 weeks of 1995, an increase of
$259.5 million, or 50.3%. Net revenues of the Company's wholesale division
increased by $129.7 million, or 43.6%, of which: (1) $104.5 million is
attributable to the increase in net revenues resulting from the Acquisition of
the Footwear Group, the results of operations of which, for the first 26 weeks
of 1995, are included only for the 10 weeks following the consummation of the
Acquisition; and (2) $25.2 million is attributable to the increase in net
revenues of the Company's wholesale division. Sales through the Company's
retail stores increased $129.8 million, or 59.3%. The increase in net revenues
of the Company's retail division is attributable to: (1) a $79.2 million
increase in net revenues resulting from the Acquisition of the Footwear Group,
the results of operations of which, for the first 26 weeks of 1995, are included
only for the 10 weeks following the consummation of the Acquisition; (2) the
opening (net of closings, excluding the Burlington Leased Departments) of 107
domestic and 36 international retail stores ($42.2 million); and (3) comparable
store sales increases ($8.4 million). Comparable store sales (including the
sales of the acquired Footwear Group stores, had they been acquired as of the
beginning of the comparable period of the prior year) increased 2.5% for the
first 26 weeks of 1996. Comparable store sales, excluding the results of SFR,
increased 7.3% during the first 26 weeks of 1996. This difference is due
primarily to the significant promotional activity of the SFR division during the
Second Quarter of 1995, compared to the Second Quarter of 1996. The foregoing
comparable store sales do not include the results of the 84 Burlington Leased
Departments, which were closed during the first 26 weeks of 1996. During the
first 26 weeks of 1996, wholesale net revenues accounted for 55.1% of the
<PAGE>
Company's consolidated net revenues, while retail operations accounted for the
remaining 44.9%.
GROSS PROFIT. Gross profit was $328.4 million in the first 26 weeks of
1996, an increase of $111.6 million, or 51.5%, from $216.8 million in the first
26 weeks of 1995 (excluding the Cost of Goods Sold Adjustment). Gross profit as
a percentage of net revenues increased to 42.3% in the first 26 weeks of 1996
from 42.0% in the first 26 weeks of 1995. The increase in gross profit as a
percentage of net revenues is primarily attributable to: (1) the overall
improvement in gross margins of the wholesale division; and (2) a greater
percentage of net revenues from retail operations (44.9% in the first 26 weeks
of 1996, compared to 42.5% in the 26 weeks of 1995), which revenues produce
greater gross margins than wholesale revenues; and (3) significant promotional
activity of the SFR division during the Second Quarter of 1995, compared to the
first 26 weeks of 1996.
SELLING, GENERAL & ADMINISTRATIVE EXPENSES. SG&A expenses (excluding the
amortization of goodwill, trademarks and trade names related to the Acquisition)
were $236.6 million in the first 26 weeks of 1996, compared to $155.1 million in
the first 26 weeks of 1995, an increase of $81.5 million, or 52.6%. SG&A
expense expressed as a percentage of net revenues rose to 30.5% in the first 26
weeks of 1996 from 30.0% in the first 26 weeks of 1995. The increase in SG&A
expense expressed as a percentage of net revenues is due primarily to: (1) the
increase in the percentage of net revenues contributed by the Company's retail
operations relative to its wholesale operations (the Company's retail operations
have a higher level of expenses as a percentage of net revenues than its
wholesale operations); and (2) higher expenses as a percentage of net revenues
experienced by the Footwear Group. These higher expenses are attributable to,
among other things, significant expenditures by the Footwear Group for
advertising, and were incurred during the full 26 weeks ended August 3, 1996,
compared to only 10 weeks during the period ended July 29, 1995. These higher
costs were offset, in part, by cost savings resulting from the elimination of
duplicative administrative positions, which were included in SG&A expenses for
the 10 weeks from May 23, 1995 through July 29, 1995.
OPERATING INCOME. Operating income was $87.0 million, or 11.2% of net
revenues, for the first 26 weeks of 1996 compared to $60.1 million, or 11.6% of
net revenues, for the first 26 weeks of 1995 (excluding the Cost of Goods Sold
Adjustment). The decrease in operating income as a percentage of net revenues
is attributable to the factors discussed above and the increase in amortization
of goodwill, trademarks and trade names related to the Acquisition. Twenty-six
weeks of amortization is included in the 1996 period, compared to 10 weeks of
amortization during the first 26 weeks of 1995.
INTEREST EXPENSE - NET. Interest expense - net was $19.8 million in the
first 26 weeks of 1996 compared to $8.7 million in the first 26 weeks of 1995,
an increase of $11.1 million. The increased expense is primarily due to
Acquisition-related term loans, which were outstanding only for the period from
May 23 to July 29 during the first 26 weeks of 1995, but were outstanding during
the entire first 26 weeks of 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company relies primarily upon cash flow from operations and borrowings
under the Company's credit agreement (as defined below) to finance its
<PAGE>
operations and expansion. Cash used by operating activities was $20.8 million
for the first 26 weeks of 1996, compared to cash provided by operating
activities of $27.4 million for the first 26 weeks of 1995. This decrease in
cash flow from operations during the first 26 weeks 1996 as compared to the
first 26 weeks as of 1995 is due primarily to: (1) additional working capital
requirements as a result of the Acquisition and the Company's domestic and
international expansion; (2) $4.8 million of severance and relocation payments
made in connection with the Acquisition; and (3) $9.8 million of payments made
in connection with the restructuring and integration costs that were incurred
and accrued in the fourth quarter of 1995 (the "Restructuring Charge"). Working
capital was $393.6 million at August 3, 1996, compared to $297.3 million at
February 3, 1996. Working capital increased during the first 26 weeks of 1996
due to: (1) a $42.2 million increase in inventory to support wholesale backlog
requirements and inventory required for new stores; (2) a $30.5 million decrease
in accounts payable; and (3) a $34.1 million decrease in accrued expenses and
other current liabilities. These working capital increases were partially
offset by a $17.8 million decrease in accounts receivable attributable to the
Company's accounts receivable securitization program. Working capital may vary
from time to time as a result of seasonal requirements, the timing of factory
shipments and the Company's "open stock" and "quick response" wholesale
programs, which require an increased investment in inventories.
Total cash outlays related to the Restructuring Charge are estimated at
approximately $22.0 million, of which $9.8 million was paid during the first 26
weeks of 1996, bringing total payments through August 3, 1996 to $14.2 million.
In connection with the Acquisition, the Company assumed and included in the
allocation of the acquisition cost of the Footwear Group: (1) accruals for
involuntary severance and termination benefits of $8.6 million; and (2)
relocation costs of $8.2 million. As of August 3, 1996, approximately $5.2
million and $5.4 million of severance and termination benefits, and relocation
costs, respectively, had been charged against these liabilities ($3.3 million
and $1.2 million of severance and termination benefits, and relocation costs,
respectively, were charged during the first 26 weeks of 1996). The Company
anticipates that the remaining cash outlays relating to these actions will be
substantially completed in fiscal 1996.
On May 23, 1995, the Company entered into a $700.0 million credit agreement
providing for: (1) a $400.0 million, six and one-half year, quarterly amortizing
term loan; (2) a $150.0 million, non-amortizing term loan; and (3) the ability
to borrow up to $150.0 million on a revolving basis and through letters of
credit. Subsequent to the Acquisition, the Company consummated several
transactions that reduced borrowings under the credit agreement by an aggregate
of $272.3 million. These transactions included: (1) initial proceeds of $71.0
million from the Company's accounts receivable securitization program; (2)
proceeds of $20.0 million from the sale/leaseback transaction relating to the
Company's West Deptford, New Jersey distribution facility during the first 26
weeks of 1996; and (3) net proceeds of $181.3 million from the issuance of 5.5%
convertible subordinated notes, due July 15, 2003 (the "Notes") during the
Second Quarter of 1996.
In June 1996, the Company issued $185.7 million of Notes. The Notes are
convertible into common stock of the Company at a conversion price of $60.76 per
share, subject to adjustment in certain circumstances. The Notes are
redeemable, in whole or in part, at the option of the Company, at any time on or
after July 16, 1999, at declining redemption prices plus any accrued interest.
<PAGE>
The Notes are subordinated in right of payment to all existing and future senior
indebtedness of the Company. Proceeds from the issuance of the Notes were
approximately $181.3 million (net of underwriter's discounts of $4.4 million)
and were used to repay as a portion of the outstanding indebtedness under the
Company's credit agreement.
On August 2, 1996, the credit agreement was amended and restated. Under
the amended and restated credit agreement (the "Credit Agreement"), the Company
has a $335.0 million quarterly amortizing term loan facility and may borrow up
to $225.0 million under a revolving credit facility, including letters of credit
up to $100.0 million. The Credit Agreement expires on November 1, 2001. As of
September 3, 1996, $335.0 million of borrowings were outstanding under the term
loan, $51.0 million of borrowings and $30.3 million of letters of credit were
outstanding on a revolving basis and $143.7 million was available for future
borrowing.
Amounts outstanding under the Credit Agreement are secured by substantially
all assets of the Company, excluding receivables related to an accounts
receivable securitization program, and bear interest, at the Company's option,
at rates based on Citibank's base rate or the Eurodollar index rate. Borrowings
under the Credit Agreement will become unsecured should the Company reach an
"investment grade" rating on its long term indebtedness. The Company has
entered into interest rate hedge agreements to reduce the impact on interest
expense from fluctuating interest rates on variable rate debt.
The Company made a $42.5 million net payment to U.S. Shoe on June 5, 1996,
in connection with the settlement of the post-closing balance sheet dispute
relating to the Acquisition and the repurchase by the Company of the Warrants
(see "Acquisitions" in the Notes to Condensed Consolidated Financial
Statements) which was financed under the Company's revolving credit facility.
The weighted average interest rate on the Company's long-term debt
outstanding (including the Notes) as of August 3, 1996 was approximately 6.32%.
Capital expenditures totaled $18.3 million and $18.0 million in the first
26 weeks of 1996 and 1995, respectively. Capital expenditures in the first 26
weeks of 1996 relate primarily to the Company's store expansion and remodeling
programs. Capital expenditures in the first 26 weeks of 1995 relate primarily
to the Company's store expansion and remodeling programs and the construction
and equipping of a 170,000 square foot addition to its West Deptford, New Jersey
distribution center, which was completed for a total cost of approximately $7.8
million. Capital expenditures with respect to warehouse expansion totaled $5.2
million in the first 26 weeks of 1995. The Company estimates that its capital
expenditures for fiscal 1996 will be between $55.0 million and $60.0 million,
primarily for the on-going expansion of its retail operations (approximately
$35.0 million), equipment for its distribution and manufacturing facilities
(approximately $5.0 million), and international expansion (approximately $5.0
million). The actual amount of the Company's capital expenditures depends, in
part, on requirements related to the integration of the Footwear Group into the
Company, the number of new stores opened, the number of stores remodeled and the
amount of any construction allowances the Company may receive from the landlords
of its new stores. The opening and success of new stores will be dependent
upon, among other things, general economic and business conditions affecting
consumer spending, the availability of desirable locations and the negotiation
of acceptable lease terms for new locations. As of September 3, 1996, the
<PAGE>
Company had commitments for approximately $18.4 million of capital expenditures,
related to commitments as of such date to open 143 retail stores, 87 of which
are intended to be opened during the remainder of fiscal 1996.
The Company expects that its current cash balances, cash flows anticipated
to be generated from operations and availability under its revolving credit
facility will be sufficient to fund its domestic and international growth and
expansion (including planned domestic and international retail store openings),
business restructuring and integration of the Footwear Group, and other
operating cash needs for at least the next 12 months.
SEASONALITY
The Company's footwear and accessories are marketed primarily for each of
the four seasons, with the highest volume of products sold during the last three
fiscal quarters. The Company's retail operations, however, generally experience
their weakest results in the first quarter. Because the timing of shipments of
products for any season may vary from year to year, the results for any
particular quarter may not be indicative of results for the full year. The
Company has not had significant overhead and other costs generally associated
with large seasonal variations.
INFLATION
The Company believes that the relatively moderate rate of inflation over
the past few years has not had a significant impact on the Company's revenues or
profitability. In the past, the Company has been able to maintain its profit
margins during inflationary periods.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On June 5, 1996, the Company consummated the Settlement of a post-closing
balance sheet dispute with U. S. Shoe, a subsidiary of Luxottica Group S.p.A..
Pursuant to the Settlement, U.S. Shoe was obligated to pay to the Company $25.0
million. In addition, the Company and U.S. Shoe agreed that the Company would
repurchase the Warrants for $67.5 million. Consequently, the Company made a net
payment of $42.5 million to U.S. Shoe, which was financed with borrowings under
the Company's credit facility.
The Company has been named as a defendant in various actions and
proceedings, including actions brought by certain terminated employees, arising
from its ordinary business activities. Although the liability that could arise
with respect to these actions cannot be accurately predicted, in the opinion of
the Company, any such liability will not have a material adverse effect on its
financial position, results of operations or liquidity.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 1996 Annual Meeting of Stockholders of the Company was held on May 28,
1996. The results of the voting with respect to each matter submitted to a vote
of stockholders at the meeting were as follows:
PROPOSAL ONE: Election of a Class III director of the Company.
For: 32,435,567
Withheld: 167,094
PROPOSAL TWO: Approval of the amendments to the Nine West Group Inc. 1994
Long-Term Performance Plan.
For: 18,496,856
Against: 13,236,662
Abstain: 18,870
Broker Non-Votes: 850,273
PROPOSAL THREE: Approval of the amendments to the Nine West Group Inc.
Incentive Bonus Plan.
For: 32,049,854
Against: 532,082
Abstain: 20,725
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
See Index to Exhibits
(b) Reports on 8-K:
None
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Nine West Group Inc.
(Registrant)
By: /s/ Robert C. Galvin
---------------------------
Robert C. Galvin
Executive Vice President,
Chief Financial Officer and
Treasurer (Principal Financial
Officer and Principal Accounting
Officer)
Date: September 17, 1996
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Exhibit
- ------ -------
* 4.2 Form of Definitive 5-1/2% Convertible Subordinated Note of the
Registrant Due 2003.
* 4.3 Form of Restricted Global 5-1/2% Convertible Subordinated Note of the
Registrant Due 2003.
* 4.4 Form of Regulation S Global 5-1/2% Convertible Subordinated Note of
the Registrant Due 2003.
* 4.5 Indenture, dated as of June 26, 1996, between the Registrant, as
issuer, and Chemical Bank, as trustee, relating to the Registrant's
5-1/2% Convertible Subordinated Notes Due 2003.
* 4.6 Note Resale Registration Rights Agreement, dated as of June 26, 1996,
by and among the Registrant and The Purchasers Named Therein.
*10.19.3 Amended and Restated Credit Agreement, dated as of August 2, 1996,
among the Registrant, the financial institutions listed on the
signature pages thereof and Citibank, N.A., as administrative agent.
*11 Computation of earnings per share.
*Filed herewith
EXHIBIT 4.2
FORM OF DEFINITIVE NOTE
[FORM OF FACE OF NOTE]
No. A-1
$
---------------
CUSIP 65440D AB8
NINE WEST GROUP INC.
5-1/2% Convertible Subordinated Notes Due 2003
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A) (1),
(2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR");
(2) AGREES THAT IT WILL NOT PRIOR TO THE DATE THAT IS THREE YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY AND THE LAST DATE ON
WHICH NINE WEST GROUP INC. (THE "COMPANY") OR ANY "AFFILIATE" (AS DEFINED IN
RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY WAS THE OWNER OF THE NOTE (THE
"RESTRICTION TERMINATION DATE") RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO CHEMICAL BANK, AS TRUSTEE, A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 903 OR RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTE
EVIDENCED HEREBY BEFORE THE RESTRICTION TERMINATION DATE, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO CHEMICAL BANK, AS TRUSTEE. IF THE
PROPOSED TRANSFER IS PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO , AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED UPON THE RESTRICTION TERMINATION DATE. AS USED
HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT.
NINE WEST GROUP INC., a corporation duly organized and validly
existing under the laws of the State of Delaware (the "Company"), which term
includes any Successor Company under the Indenture referred to on the reverse
hereof, for value received hereby promises to pay to ----------------------, or
registered assigns, the principal sum of ----------- Dollars on July 15, 2003,
at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York, or, at the option of the holder of
this Note, at the Corporate Trust Office of the Trustee, in such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts. The Company shall pay
interest on said principal sum semi-annually on January 15 and July 15 of each
year (each, an "Interest Payment Date"), commencing on January 15, 1997, at said
office or agency, in like coin or currency, at the rate per annum specified in
the title of this Note. Interest on this Note will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance and until payment of said principal sum has been made or duly
provided for. The interest so payable on any Interest Payment Date will be paid
to the person in whose name this Note (or one or more Predecessor Notes) is
registered at the close of business on the record date, which shall be the
January 1 or July 1 (whether or not a Business Day) next preceding such Interest
Payment Date, respectively; provided that any such interest not punctually paid
or duly provided for shall be payable as provided in the Indenture. Interest
shall be paid by check mailed to the registered holder at the registered address
of such person unless other arrangements are made in accordance with the
provisions of the Indenture.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions giving the holder
of this Note the right to convert this Note into Common Stock of the Company
(or, at the option of the Company, into an amount of cash as set forth in the
Indenture) on the terms and subject to the limitations referred to on the
reverse hereof and as more fully specified in the Indenture. Such further
provisions shall for all purposes have the same effect as though fully set forth
at this place.
This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of said State, without regard to conflicts of laws
principles thereof.
This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee, or a duly authorized authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
NINE WEST GROUP INC.
By:
-----------------------
Name:
Title:
Attest:
- --------------------
Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Notes described in the within-named indenture.
CHEMICAL BANK, as Trustee
By:
-----------------------
Authorized Signatory
[FORM OF REVERSE OF NOTE]
NINE WEST GROUP INC.
5-1/2% Convertible Subordinated Notes Due 2003
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 5-1/2% Convertible Subordinated Notes Due 2003 (herein called
the "Notes"), limited to the aggregate principal amount of $---------- all
issued or to be issued under and pursuant to an Indenture dated as of June 26,
1996 (the "Indenture"), between the Company and Chemical Bank, as trustee (the
"Trustee"), to which Indenture and all indentures supplemental thereto reference
is hereby made for a complete description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Notes. Each Note is subject to, and qualified by, all such
terms as set forth in the Indenture, certain of which are summarized hereon and
each holder of a Note is referred to the corresponding provisions of the
Indenture for a complete statement of such terms. To the extent that there is
any inconsistency between the summary provisions set forth in the Notes and the
Indenture, the provisions of the Indenture shall govern. Capitalized terms used
but not defined in this Note shall have the meanings ascribed to them in the
Indenture.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest on all Notes may be declared, and upon said declaration shall become,
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The payment of principal of, premium, if any, and interest on the
Notes will, to the extent set forth in the Indenture, be subordinated in right
of payment to the prior payment in full of all Senior Indebtedness (as defined
in the Indenture). Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding related to the Company or its
property, in an assignment for the benefit of creditors or any marshalling of
the Company's assets and liabilities, the holders of all Senior Indebtedness
will first be entitled to receive payments in full of all amounts due or to
become due thereon before the holders of the Notes will be entitled to receive
any payment in respect of the principal of, premium, if any, or interest on the
Notes (except that holders of Notes may receive securities that are subordinated
at least to the same extent as the Notes to Senior Indebtedness and any
securities issued in exchange for Senior Indebtedness).
The Company also may not make any payment of principal, premium (if
any) or interest on the Notes (except in such subordinated securities) and may
not repurchase, redeem or otherwise retire any Notes if (a) a default in the
payment of the principal of, premium, if any, or interest on Senior Indebtedness
occurs and is continuing beyond any applicable period of grace or (b) any other
default occurs and is continuing with respect to Senior Indebtedness that
permits holders of the Senior Indebtedness as to which such default relates to
accelerate its maturity and the Trustee receives a notice of such default (a
"Payment Blockage Notice") from the representative or representatives of holders
of at least a majority in principal amount of Senior Indebtedness then
outstanding. Payments on the Notes may and shall be resumed (i) in the case of
a payment default, upon the date on which such default is cured or waived, or
(ii) in the case of a non-payment default, 179 days after the date on which the
applicable Payment Blockage Notice is received, unless the maturity of any
Senior Indebtedness has been accelerated. No new period of payment blockage may
be commenced within 360 days after the receipt by the Trustee of any prior
Payment Blockage Notice. No nonpayment default that existed or was continuing
on the date of delivery of any Payment Blockage Notice to the Trustee shall be,
or be made, the basis for a subsequent Payment Blockage Notice unless such
default shall have been cured or waived for a period of not less than 180 days.
In the event that the Trustee (or paying agent if other than the
Trustee) or any holder of the Notes receives any payment of principal or
interest with respect to the Notes at a time when such payment is prohibited
under the Indenture, such payment shall be held in trust for the benefit of, and
shall be paid over and delivered to, the holders of Senior Indebtedness (if
there are no representatives thereof or their representative as their respective
interests may appear. After all Senior Indebtedness is paid in full and until
the Notes are paid in full, the holders of the Notes shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the Notes) to
the rights of holders of Senior Indebtedness to receive distributions applicable
to Senior Indebtedness to the extent that distributions otherwise payable to the
holders of the Notes have been applied to the payment of Senior Indebtedness.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the holders of the Notes; provided that no such supplemental indenture shall
(i) extend the fixed maturity of any Note, or reduce the rate or extend the time
of payment of interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or reduce any amount payable on redemption thereof,
alter the obligation of the Company to redeem the Notes at the option of the
holders upon the occurrence of a Change of Control or impair or affect the right
of any Holder to institute suit for the payment thereof, or make the principal
thereof or interest or premium, if any, thereon payable in any coin or currency
other than that provided in the Notes, modify the subordination provisions in a
manner adverse to the holders of the Notes, or impair the right to convert the
Notes into Common Stock subject to the terms set forth in the Indenture without
the consent of the holder of each Note so affected or (ii) reduce the aforesaid
percentage of Notes, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all Notes then
outstanding. It is also provided in the Indenture that, prior to any
declaration accelerating the maturity of the Notes, the holders of a majority in
aggregate principal amount of the Notes at the time outstanding may on behalf of
the holders of all of the Notes waive any past default or Event of Default under
the Indenture and its consequences except a default in the payment of interest
or any premium on or the principal of any of the Notes, a failure by the Company
to convert any Notes into Common Stock of the Company or a default in respect of
a covenant or provision of the Indenture that under Article X thereof cannot be
modified or amended without the consent of the holders of all Notes then
outstanding. Any such consent or waiver by the holder of this Note (unless
revoked as provided in the Indenture) shall be conclusive and binding upon such
holder and upon all future holders and owners of this Note and any Notes that
may be issued in exchange or substitution hereof, irrespective of whether or not
any notation thereof is made upon this Note or such other Notes.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the place, at the respective times, at the rate and in the coin
or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year
composed of twelve 30-day months.
The Notes are issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration or exchange of Notes, Notes may be exchanged for a like aggregate
principal amount of Notes of other authorized denominations.
The Notes are not redeemable at the option of the Company prior to
July 16, 1999. At any time on or after that date, the Notes may be redeemed at
the Company's option, upon notice as set forth in the Indenture, in whole at any
time or in part from time to time, at the optional redemption prices set forth
below, together with accrued interest to the date fixed for redemption.
If redeemed during the 12-month period beginning:
Date Percentage
---- ----------
July 16, 1999 102.75%
July 15, 2000 101.83%
July 15, 2001 100.92%
and 100% on or after July 15, 2002; provided that if the date fixed for
redemption is a date on or after the record date and on or before the next
following interest payment date, then the interest payable on such date shall be
paid to the holder of record on the next preceding January 1 or July 1,
respectively.
If a Change of Control (as defined in the Indenture) shall occur at
any time, then each holder of Notes shall have the right to require that the
Company purchase such holder's Notes in whole or in part in integral multiples
of $1,000, at a purchase price in cash in an amount equal to 101% of the
principal amount of such Notes, plus accrued and unpaid interest, if any, to the
repurchase date pursuant to an offer to be made by the Company and in accordance
with the procedures set forth in the Indenture.
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after 60 days following the latest date of
original issuance of the Notes and prior to the close of business on July 15,
2003, or, as to all or any portion hereof called for redemption, prior to the
close of business on the Trading Day next preceding the date fixed for
redemption (unless the Company shall default in payment due upon redemption
thereof), to convert the principal hereof or any portion of such principal that
is $1,000 or an integral multiple thereof, into that number of fully paid and
non-assessable shares of Company's Common Stock, as said shares shall be
constituted at the date of conversion, obtained by dividing the principal amount
of this Note or portion thereof to be converted by the conversion price of
$60.76 or such conversion price as adjusted from time to time as provided in the
Indenture, upon surrender of this Note, together with a conversion notice as
provided in the Indenture, to the Company at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
or at the option of such holder, the Corporate Trust Office of the Trustee, and,
unless the shares issuable on conversion are to be issued in the same name as
this Note, duly endorsed by, or accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder or by his duly
authorized attorney. No adjustment in respect of interest or dividends will be
made upon any conversion; provided that if this Note shall be surrendered for
conversion during the period from the close of business on any record date for
the payment of interest through the opening of business on the next succeeding
interest payment date, this Note (unless it or the portion being converted shall
have been called for redemption) must be accompanied by an amount, in funds
acceptable to the Company, equal to the interest payable on such interest
payment date on the principal amount being converted. The interest payment with
respect to a Note called for redemption on a date during the period from the
close of business on or after any record date to the opening of business on the
business day following the corresponding payment date will be payable on the
corresponding interest payment date to the registered Holder at the close of
business on that record date (notwithstanding the conversion of such Note before
the corresponding interest payment date) and a Holder who elects to convert need
not include funds equal to the interest paid. No fractional shares will be
issued upon any conversion, but an adjustment in cash will be made, as provided
in the Indenture, in respect of any fraction of a share that would otherwise be
issuable upon the surrender of any Note or Notes for conversion.
At the sole option of the Company, in lieu of delivering shares of Common Stock
(or other Securities into which the Notes are then convertible) upon conversion
of the Notes pursuant to the provisions of the Indenture, the Company may pay to
a holder of Notes who properly exercises the conversion privilege, as set forth
in the Indenture, an amount in cash equal to the Market Cash Conversion Price
(as defined in the Indenture) of the shares of Common Stock into which such
Notes are then convertible, plus any property or assets into which such Notes
are then convertible.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, or at the option of the holder of this Note, at the Corporate Trust Office
of the Trustee, a new Note or Notes of authorized denominations for an equal
aggregate principal amount will be issued to the transferee in exchange thereof,
subject to the conditions and limitations provided in the Indenture, without
charge except for any tax or other governmental charge imposed in connection
therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar), for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor any other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.
No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any Successor Company, either
directly or through the Company or any Successor Company, whether by virtue of
any constitution, statute or rule of law or by the enforcement of any assessment
or penalty or otherwise, all such liability being, by the acceptance hereof and
as part of the consideration for the issue hereof, expressly waived and
released.
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right ------------------Custodian
of survivorship and not as (Cust)
tenants in common Uniform Gifts To
Minors Act
---------------
(State)
Additional abbreviations may also be used though not in the above list.
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: NINE WEST GROUP INC.
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion hereof (which is
$1,000 principal amount or an integral multiple thereof) below designated, into
shares of Common Stock, par value $.01 per share, of the Company in accordance
with the terms of the Indenture referred to in this Note, and directs that the
shares issuable and deliverable upon such conversion, together with any check in
payment for fractional shares and any Notes representing any unconverted
principal amount hereof, be issued and delivered to the registered holder hereof
unless a different name has been indicated below. If shares or any portion of
this Note not converted are to be issued in the name of a person other than the
undersigned, the undersigned will check the appropriate box below and pay all
transfer taxes payable with respect thereto. Any amount required to be paid to
the undersigned on account of interest accompanies this Note.
Dated:
----------------
----------------------------
----------------------------
Signature(s)
Signature(s) must be guaranteed
by an eligible Guarantor Institution
(banks, stock brokers, savings and
loan associations and credit unions)
with membership in an approved
signature guarantee medallion program
pursuant to Securities and Exchange
Commission Rule 17Ad-15 if shares of
Common Stock are to be issued, or
Notes to be delivered, other than to
and in the name of the registered holder.
- ---------------------------
Signature Guarantee
Fill in for registration of shares if to
be issued, and Notes if to be delivered,
other than to and in the name of the registered
holder:
- -----------------------------
(Name)
- -----------------------------
(Street Address)
- -----------------------------
(City, State and Zip Code)
Please print name and address
Principal amount to be converted (if less than all)
$
--------------------
Social Security or other Taxpayer
Identification Number
[FORM OF OPTION TO ELECT REPAYMENT
UPON A CHANGE OF CONTROL]
To: NINE WEST GROUP INC.
The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from Nine West Group Inc. (the "Company") as to
the occurrence of a Change of Control with respect to the Company and requests
and instructs the Company to repay the entire principal amount of this Note, or
the portion thereof (which is $1,000 principal amount or an integral multiple
thereof) below designated, in accordance with the terms of the Indenture
referred to in this Note, together with accrued interest to such date, to the
registered holder hereof.
Dated:
-------------------
----------------------------------
----------------------------------
Signature(s)
--------------------
Social Security or Other Taxpayer
Identification Number
Principal amount to be repaid (if less
than all): $
---------------
[FORM OF ASSIGNMENT]
For value received -------------------- hereby sell(s), assign(s) and
transfer(s) unto -------------------------- (Please insert social security or
other identifying number of assignee) the within Note, and hereby irrevocably
constitutes and appoints ----------------------- attorney to transfer the said
Note on the books of the Company, with full power of substitution in the
premises.
In connection with any transfer of the within Note (or any issuance of
shares of Common Stock upon conversion of the within Note) occurring prior to
the third anniversary of the date of original issuance of such Note, the
undersigned confirms that such Note (or shares of Common Stock, as the case may
be) are being transferred:
To Nine West Group Inc. or a subsidiary thereof; or
Pursuant to and in compliance with Rule 144A under the Securities Act of
1933, as amended; or
To an Institutional Accredited Investor pursuant to and in compliance with
the Securities Act of 1933, as amended; or
Pursuant to and in compliance with Regulation S under the Securities Act of
1933, as amended; or
Pursuant to and in compliance with Rule 144 under the Securities Act of
1933, as amended.
Unless one of the boxes above is checked, the Trustee will refuse to
register any of the within Notes (or such shares of Common Stock, as the case
may be) in the name of any person other than the registered holder thereof (or
hereof); provided, however, that the Trustee may, in its sole discretion,
register the transfer of such Notes (or such shares of Common Stock, as the case
may be) if it has received such certifications, legal opinions and/or other
information as the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, as
amended.
In addition, if the transferee is an institutional accredited investor
or a purchaser who is not a U.S. person, the holder must furnish to the Trustee
(i) in the case of an institutional accredited investor, a signed letter
containing certain representations and agreements relating to the restrictions
on transfer of the security evidenced hereby in substantially the form of
Exhibit D to the Indenture and (ii) such other certifications, legal opinions or
other information as it may reasonably require to confirm that such transfer is
being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act of 1933, as amended.
Dated:
----------------------
- ------------------------
- ------------------------
Signature(s)
Signature(s) must be guaranteed by
an eligible Guarantor Institution
(banks, stock brokers, savings and
loan associations and credit unions)
with membership in an approved
signature guarantee medallion
program pursuant to Securities and
Exchange Commission Rule 17Ad-15.
- ------------------------
Signature Guarantee
NOTICE: The signature on the conversion notice, the option to elect payment
upon a Change of Control or the assignment must correspond with the name as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatever.
EXHIBIT 4.3
FORM OF RESTRICTED GLOBAL NOTE
[FORM OF FACE OF NOTE]
No. B-1 $
-----------
CUSIP 65440D AA0
NINE WEST GROUP INC.
5-1/2% Convertible Subordinated Notes Due 2003
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS RESTRICTED GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR"); (2)
AGREES THAT IT WILL NOT PRIOR TO THE DATE THAT IS THREE YEARS AFTER THE LATER OF
THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY AND THE LAST DATE ON WHICH
NINE WEST GROUP INC. (THE "COMPANY") OR ANY "AFFILIATE" (AS DEFINED IN RULE 144
UNDER THE SECURITIES ACT) OF THE COMPANY WAS THE OWNER OF THE NOTE (THE
"RESTRICTION TERMINATION DATE") RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO
THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO CHEMICAL BANK, AS TRUSTEE, A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 903 OR RULE 904
UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (F)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY
BEFORE THE RESTRICTION TERMINATION DATE, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO CHEMICAL BANK, AS TRUSTEE. IF THE PROPOSED TRANSFER
IS PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE, THE HOLDER MUST, PRIOR TO SUCH
TRANSFER, FURNISH TO CHEMICAL BANK, AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THIS LEGEND WILL BE REMOVED UPON THE RESTRICTION TERMINATION DATE. AS USED
HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT.
NINE WEST GROUP INC., a corporation duly organized and validly
existing under the laws of the State of Delaware (the "Company"), which term
includes any Successor Company under the Indenture referred to on the reverse
hereof, for value received hereby promises to pay to --------------------------
- -------------------------------------- , or registered assigns, the principal
sum of ------------------- Dollars (subject to adjustment as set forth in the
next paragraph hereof) on July 15, 2003, at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York,
or, at the option of the holder of this Restricted Global Note, at the Corporate
Trust Office of the Trustee, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts. The Company shall pay interest on said principal sum
semi-annually on January 15 and July 15 of each year (each, an "Interest Payment
Date"), commencing on January 15, 1997, at said office or agency, in like coin
or currency, at the rate per annum specified in the title of this Note.
Interest on this Note will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from the date of issuance and
until payment of said principal sum has been made or duly provided for. The
interest so payable on any Interest Payment Date will be paid to the person in
whose name this Restricted Global Note (or one or more Predecessor Notes) is
registered at the close of business on the record date, which shall be the
January 1 or July 1 (whether or not a Business Day) next preceding such Interest
Payment Date, respectively; provided that any such interest not punctually paid
or duly provided for shall be payable as provided in the Indenture. Interest
shall be paid by check mailed to the registered holder at the registered address
of such person unless other arrangements are made in accordance with the
provisions of the Indenture.
The aggregate principal amount of this Restricted Global Note
represented hereby may from time to time be reduced or increased to reflect
exchanges of a part of this Restricted Global Note for interests in the
Regulation S Global Note or definitive Notes or exchanges of interests in the
Regulation S Global Note or definitive Notes for a part of this Restricted
Global Note or conversions or redemptions of a part of this Restricted Global
Note or cancellations of a part of this Restricted Global Note or transfers of
interests in the Regulation S Global Note or definitive Notes in return for a
part of this Restricted Global Note or transfers of a part of this Restricted
Global Note effected by delivery of interests in the Regulation S Global Note or
definitive Notes, in each case, and in any such case, by means of notations on
the Schedule of Exchanges, Conversions, Redemptions, Cancellations and Transfers
on the last page hereof. Notwithstanding any provision of this Restricted
Global Note to the contrary, (i) exchanges of a part of this Restricted Global
Note for interests in the Regulation S Global Note or definitive Notes, (ii)
exchanges of interests in the Regulation S Global Note or definitive Notes for a
part of this Restricted Global Note, (iii) conversions or redemptions of a part
of this Restricted Global Note, (iv) cancellations of a part of this Restricted
Global Note, (v) transfers of interests in the Regulation S Global Note or
definitive Notes in return for a part of this Restricted Global Note and (vi)
transfers of a part of this Restricted Global Note effected by delivery of
interests in the Regulation S Global Note or definitive Notes may be effected
without the surrendering of this Restricted Global Note, provided that
appropriate notations on the Schedule of Exchanges, Conversions, Redemptions,
Cancellations and Transfers are made by the Trustee, or the Custodian at the
direction of the Trustee, to reflect the appropriate reduction or increase, as
the case may be, in the aggregate principal amount of this Restricted Global
Note resulting therefrom or as a consequence thereof.
Reference is made to the further provisions of this Restricted Global
Note set forth on the reverse hereof, including, without limitation, provisions
giving the holder of this Restricted Global Note the right to convert this
Restricted Global Note into Common Stock of the Company (or, at the option of
the Company, into an amount of cash as set forth in the Indenture) on the terms
and subject to the limitations referred to on the reverse hereof and as more
fully specified in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Restricted Global Note shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be construed
in accordance with and governed by the laws of said State, without regard to
conflicts of laws principles thereof.
This Restricted Global Note shall not be valid or become obligatory
for any purpose until the certificate of authentication hereon shall have been
manually signed by the Trustee or a duly authorized authenticating agent under
the Indenture.
IN WITNESS WHEREOF, the Company has caused this Restricted Global Note
to be duly executed under its corporate seal.
NINE WEST GROUP INC.
By:
--------------------
Name:
Title:
Attest:
- -------------------------
Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Notes described in the within-named indenture.
CHEMICAL BANK, as Trustee
By:
------------------------
Authorized Signatory
[FORM OF REVERSE OF RESTRICTED GLOBAL NOTE]
NINE WEST GROUP INC.
5-1/2% Convertible Subordinated Notes Due 2003
This Restricted Global Note is one of a duly authorized issue of Notes
of the Company, designated as its 5-1/2% Convertible Subordinated Notes Due 2003
(herein called the "Notes"), limited to the aggregate principal amount of $-----
- ------- all issued or to be issued under and pursuant to an Indenture dated as
of June 26, 1996 (the "Indenture"), between the Company and Chemical Bank, as
trustee (the "Trustee"), to which Indenture and all indentures supplemental
thereto reference is hereby made for a complete description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes. Each Note is subject to, and
qualified by, all such terms as set forth in the Indenture, certain of which are
summarized hereon and each holder of a Note is referred to the corresponding
provisions of the Indenture for a complete statement of such terms. To the
extent that there is any inconsistency between the summary provisions set forth
in the Notes and the Indenture, the provisions of the Indenture shall govern.
Capitalized terms used but not defined in this Note shall have the meanings
ascribed to them in the Indenture.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest on all Notes may be declared, and upon said declaration shall become,
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The payment of principal of, premium, if any, and interest on the
Notes will, to the extent set forth in the Indenture, be subordinated in right
of payment to the prior payment in full of all Senior Indebtedness (as defined
in the Indenture). Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding related to the Company or its
property, in an assignment for the benefit of creditors or any marshalling of
the Company's assets and liabilities, the holders of all Senior Indebtedness
will first be entitled to receive payments in full of all amounts due or to
become due thereon before the holders of the Notes will be entitled to receive
any payment in respect of the principal of, premium, if any, or interest on the
Notes (except that holders of Notes may receive securities that are subordinated
at least to the same extent as the Notes to Senior Indebtedness and any
securities issued in exchange for Senior Indebtedness).
The Company also may not make any payment of principal, premium (if
any) or interest on the Notes (except in such subordinated securities) and may
not repurchase, redeem or otherwise retire any Notes if (a) a default in the
payment of the principal of, premium, if any, or interest on Senior Indebtedness
occurs and is continuing beyond any applicable period of grace or (b) any other
default occurs and is continuing with respect to Senior Indebtedness that
permits holders of the Senior Indebtedness as to which such default relates to
accelerate its maturity and the Trustee receives a notice of such default (a
"Payment Blockage Notice") from the representative or representatives of holders
of at least a majority in principal amount of Senior Indebtedness then
outstanding. Payments on the Notes may and shall be resumed (i) in the case of
a payment default, upon the date on which such default is cured or waived, or
(ii) in the case of a non-payment default, 179 days after the date on which the
applicable Payment Blockage Notice is received, unless the maturity of any
Senior Indebtedness has been accelerated. No new period of payment blockage may
be commenced within 360 days after the receipt by the Trustee of any prior
Payment Blockage Notice. No nonpayment default that existed or was continuing
on the date of delivery of any Payment Blockage Notice to the Trustee shall be,
or be made, the basis for a subsequent Payment Blockage Notice unless such
default shall have been cured or waived for a period of not less than 180 days.
In the event that the Trustee (or paying agent if other than the
Trustee) or any holder of the Notes receives any payment of principal or
interest with respect to the Notes at a time when such payment is prohibited
under the Indenture, such payment shall be held in trust for the benefit of, and
shall be paid over and delivered to, the holders of Senior Indebtedness (if
there are no representatives thereof) or their representative as their
respective interests may appear. After all Senior Indebtedness is paid in full
and until the Notes are paid in full, the holders of the Notes shall be
subrogated (equally and ratably with all other Indebtedness pari passu with the
Notes) to the rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness to the extent that distributions otherwise
payable to the holders of the Notes have been applied to the payment of Senior
Indebtedness.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the holders of the Notes; provided that no such supplemental indenture shall
(i) extend the fixed maturity of any Note, or reduce the rate or extend the time
of payment of interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or reduce any amount payable on redemption thereof,
alter the obligation of the Company to redeem the Notes at the option of the
holders upon the occurrence of a Change of Control or impair or affect the right
of any Noteholder to institute suit for the payment thereof, or make the
principal thereof or interest or premium, if any, thereon payable in any coin or
currency other than that provided in the Notes, modify the subordination
provisions in a manner adverse to the holders of the Notes, or impair the right
to convert the Notes into Common Stock subject to the terms set forth in the
Indenture without the consent of the holder of each Note so affected or (ii)
reduce the aforesaid percentage of Notes, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of all Notes then outstanding. It is also provided in the Indenture that, prior
to any declaration accelerating the maturity of the Notes, the holders of a
majority in aggregate principal amount of the Notes at the time outstanding may
on behalf of the holders of all of the Notes waive any past default or Event of
Default under the Indenture and its consequences except a default in the payment
of interest or any premium on or the principal of any of the Notes, a failure by
the Company to convert any Notes into Common Stock of the Company or a default
in respect of a covenant or provision of the Indenture that under Article X
thereof cannot be modified or amended without the consent of the holders of all
Notes then outstanding. Any such consent or waiver by the holder of this
Restricted Global Note (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Restricted Global Note and any Notes that may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is made
upon this Restricted Global Note or such other Notes.
No reference herein to the Indenture and no provision of this
Restricted Global Note or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of and
any premium and interest on this Restricted Global Note at the place, at the
respective times, at the rate and in the coin or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year
composed of twelve 30-day months.
The Notes are issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration or exchange of Notes, Notes may be exchanged for a like aggregate
principal amount of Notes of other authorized denominations.
The Notes are not redeemable at the option of the Company prior to
July 16, 1999. At any time on or after that date, the Notes may be redeemed at
the Company's option, upon notice as set forth in the Indenture, in whole at any
time or in part from time to time, at the optional redemption prices set forth
below together with accrued interest to the date fixed for redemption.
If redeemed during the 12-month period beginning:
Date Percentage
---- ----------
July 16, 1999 102.75%
July 15, 2000 101.83%
July 15, 2001 100.92%
and 100% on or after July 15, 2002; provided that if the date fixed for
redemption is on a date or after the record date and on or before the next
following interest payment date, then the interest payable on such date shall be
paid to the holder of record on the next preceding January 1 or July 1,
respectively.
If a Change of Control (as defined in the Indenture) shall occur at
any time, then each holder of Notes shall have the right to require that the
Company purchase such holder's Notes in whole or in part in integral multiples
of $1,000, at a purchase price in cash in an amount equal to 101% of the
principal amount of such Notes, plus accrued and unpaid interest, if any, to the
repurchase date pursuant to an offer to be made by the Company and in accordance
with the procedures set forth in the Indenture.
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after 60 days following the latest date of
original issuance of the Notes and prior to the close of business on July 15,
2003, or, as to all or any portion hereof called for redemption, prior to the
close of business on the Trading Day next preceding the date fixed for
redemption (unless the Company shall default in payment due upon redemption
thereof), to convert the principal hereof or any portion of such principal that
is $1,000 or an integral multiple thereof, into that number of fully paid and
non-assessable shares of Company's Common Stock, as said shares shall be
constituted at the date of conversion, obtained by dividing the principal amount
of this Restricted Global Note or portion thereof to be converted by the
conversion price of $60.76 or such conversion price as adjusted from time to
time as provided in the Indenture, upon surrender of this Restricted Global
Note, together with a conversion notice as provided in the Indenture, to the
Company at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City of New York, or at the option of such holder,
the Corporate Trust Office of the Trustee, and, unless the shares issuable on
conversion are to be issued in the same name as this Restricted Global Note,
duly endorsed by, or accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the holder or by his duly authorized attorney.
No adjustment in respect of interest or dividends will be made upon any
conversion; provided that if this Restricted Global Note shall be surrendered
for conversion during the period from the close of business on any record date
for the payment of interest and through the opening of business on the next
succeeding interest payment date, this Restricted Global Note (unless it or the
portion being converted shall have been called for redemption) must be
accompanied by an amount, in funds acceptable to the Company, equal to the
interest payable on such interest payment date on the principal amount being
converted. The interest payment with respect to a Note called for redemption on
a date during the period from the close of business on or after any record date
to the opening of business on the business day following the corresponding
payment date will be payable on the corresponding interest payment date to the
registered Holder at the close of business on that record date (notwithstanding
the conversion of such Note before the corresponding interest payment date) and
a Holder who elects to convert need not include funds equal to the interest
paid. No fractional shares will be issued upon any conversion, but an
adjustment in cash will be made, as provided in the Indenture, in respect of any
fraction of a share that would otherwise be issuable upon the surrender of any
Note or Notes for conversion.
At the sole option of the Company, in lieu of delivering shares of
Common Stock (or other Securities into which the Notes are then convertible)
upon conversion of the Notes pursuant to the provisions of the Indenture, the
Company may pay to a holder of Notes who properly exercises the conversion
privilege, as set forth in the Indenture, an amount in cash equal to the Market
Cash Conversion Price (as defined in the Indenture) of the shares of Common
Stock into which such Notes are then convertible, plus any property or assets
into which such Notes are then convertible.
Upon due presentment for registration of transfer of this Restricted
Global Note at the office or agency of the Company in the Borough of Manhattan,
The City of New York, or at the option of the holder of this Restricted Global
Note, at the Corporate Trust Office of the Trustee, a new Note or Notes of
authorized denominations for an equal aggregate principal amount will be issued
to the transferee in exchange thereof, subject to the conditions and limitations
provided in the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Restricted Global Note (whether or
not this Restricted Global Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon made by anyone other than the
Company or any Note registrar), for the purpose of receiving payment hereof, or
on account hereof, for the conversion hereof and for all other purposes, and
neither the Company nor the Trustee nor any other authenticating agent nor any
paying agent nor any other conversion agent nor any Note registrar shall be
affected by any notice to the contrary. All payments made to or upon the order
of such registered holder shall, to the extent of the sum or sums paid, satisfy
and discharge liability for monies payable on this Restricted Global Note.
No recourse for the payment of the principal of or any premium or
interest on this Restricted Global Note, or for any claim based hereon or
otherwise in respect hereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in the Indenture or any indenture
supplemental thereto or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any Successor Company, either directly or through the Company or
any Successor Company, whether by virtue of any constitution, statute or rule of
law or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Restricted Global Note, shall be construed as though they were written
out in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right ------------------Custodian
of survivorship and not as (Cust)
tenants in common Uniform Gifts To
Minors Act
---------------
(State)
Additional abbreviations may also be used though not in the above list.
[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: Nine West Group Inc.
The undersigned registered owner of this Restricted Global Note hereby
irrevocably exercises the option to convert this Restricted Global Note, or the
portion hereof (which is $1,000 principal amount or an integral multiple
thereof) below designated, into shares of Common Stock in accordance with the
terms of the Indenture referred to in this Restricted Global Note, and directs
that the shares issuable and deliverable upon such conversion, together with any
check in payment for fractional shares and any Notes representing any
unconverted principal amount hereof, be issued and delivered to the registered
holder hereof unless a different name has been indicated below. If shares or
any portion of this Restricted Global Note not converted are to be issued in the
name of a person other than the undersigned, the undersigned will check the
appropriate box below and pay all transfer taxes payable with respect thereto.
Any amount required to be paid to the undersigned on account of interest
accompanies this Restricted Global Note.
Dated:
----------------
--------------------------------
--------------------------------
Signature(s)
Signature(s) must be guaranteed by
an eligible Guarantor Institution
(banks, stock brokers, savings and
loan associations and credit unions)
with membership in an approved
signature guarantee medallion program
pursuant to Securities and Exchange
Commission Rule 17Ad-15 if shares of
Common Stock are to be issued, or
Notes to be delivered, other than to
and in the name of the registered holder.
- --------------------------------
Signature Guarantee
Fill in for registration of shares if to be issued, and Notes if to be
delivered, other than to and in the name of the registered holder:
- -----------------------------
(Name)
- -----------------------------
(Street Address)
- -----------------------------
(City, State and Zip Code)
Please print name and address
Principal amount to be converted (if
less than all) $
-------------------
-------------------
Social Security or Other Taxpayer
Identification Number
[FORM OF OPTION TO ELECT REPAYMENT
UPON A CHANGE OF CONTROL]
To: Nine West Group Inc.
The undersigned registered owner of this Restricted Global Note hereby
irrevocably acknowledges receipt of a notice from Nine West Group Inc. (the
"Company") as to the occurrence of a Change of Control with respect to the
Company and requests and instructs the Company to repay the entire principal
amount of this Restricted Global Note, or the portion thereof (which is $1,000
principal amount or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Restricted Global
Note, together with accrued interest to such date, to the registered holder
hereof.
Dated:
------------------
--------------------------------
--------------------------------
Signature(s)
-------------------
Social Security or Other Taxpayer
Identification Number
Principal amount to be repaid (if less than
all): $
-------------
[FORM OF ASSIGNMENT]
For value received -------------------------- hereby sell(s),
assign(s) and transfer(s) unto ----------------- (please insert social security
or other identifying number of assignee) the within Note, and hereby irrevocably
constitutes and appoints ------------------------ attorney to transfer the said
Note on the books of the Company, with full power of substitution in the
premises.
In connection with any transfer of the within Note (or any issuance of
shares of Common Stock upon conversion of the within Note) occurring prior to
the third anniversary of the date of original issuance of such Note, the
undersigned confirms that such Note (or shares of Common Stock, as the case may
be) are being transferred:
- To Nine West Group Inc. or a subsidiary thereof; or
- Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
- To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
- Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
- Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended.
Unless one of the boxes above is checked, the Trustee will refuse to
register any of the within Notes (or such shares of Common Stock, as the case
may be) in the name of any person other than the registered holder thereof (or
hereof); provided, however, that the Trustee may, in its sole discretion,
register the transfer of such Notes (or such shares of Common Stock, as the case
may be) if it has received such certifications, legal opinions and/or other
information as the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, as
amended.
In addition, if the transferee is an institutional accredited investor
or a purchaser who is not a U.S. person, the holder must furnish to the Trustee
(i) in the case of an institutional accredited investor, a signed letter
containing certain representations and agreements relating to the restrictions
on transfer of the security evidenced hereby in substantially the form of
Exhibit D to the Indenture, and (ii) such other certifications, legal opinions
or other information as it may reasonably require to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act of 1933, as amended.
Dated:
---------------
- ---------------------
- ---------------------
Signature(s)
Signature(s) must be guaranteed by an
eligible Guarantor Institution (banks,
stock brokers, savings and loan
associations and credit unions) with
membership in an approved signature
guarantee medallion program pursuant
to Securities and Exchange Commission
Rule 17Ad-15.
- ---------------------------
Signature Guarantee
NOTICE: The signature on the conversion notice, the option to elect payment upon
a Change of Control or the assignment must correspond with the name as written
upon the face of the Note in every particular without alteration or enlargement
or any change whatever.
SCHEDULE A
-----------
SCHEDULE OF EXCHANGES
The initial principal amount of this Restricted Global Note is U.S.
$-----------------. The following additions to principal, redemptions,
exchanges of a part of this Restricted Global Note for an interest in the
Regulation S Global Note or definitive Note and conversions into Common Shares
have been made:
<TABLE>
<C> <C> <C> <C> <C>
Date of Addition to Principal Amount Principal Amount Remaining Principal Notation Made by
Principal, Redemption, Added on Exchange Redeemed, Amount Outstanding or on behalf of
Exchange or of Interest in the Exchanged for Following such Trustee
Conversion Regulation S Global Interest in the Transaction
Note or Definitive Regulation S
Notes Global Note or
Definitive Notes
or Converted into
Common Shares
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
EXHIBIT 4.4
FORM OF REGULATION S GLOBAL NOTE
[FORM OF FACE OF NOTE]
No. C-1 $
-----------------
CUSIP U65415 AA6
NINE WEST GROUP INC.
5-1/2% Convertible Subordinated Notes Due 2003
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS REGULATION S GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY
TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR
ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS REGULATION S GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
NINE WEST GROUP INC., a corporation duly organized and validly
existing under the laws of the State of Delaware (the "Company"), which term
includes any Successor Company under the Indenture referred to on the reverse
hereof, for value received hereby promises to pay to ---------------------------
- --------------------------, or registered assigns, the principal sum of --------
- ------------- Dollars (subject to adjustment as set forth in the next paragraph
hereof) on July 15, 2003, at the office or agency of the Company maintained for
that purpose in the Borough of Manhattan, The City of New York, or, at the
option of the holder of this Regulation S Global Note, at the Corporate Trust
Office of the Trustee, in such coin or currency of the United States of America
as at the time of payment shall be legal tender for the payment of public and
private debts. The Company shall pay interest on said principal sum
semi-annually on January 15 and July 15 of each year (each, an "Interest Payment
Date"), commencing on January 15, 1997, at said office or agency, in like coin
or currency, at the rate per annum specified in the title of this Regulation S
Global Note. Interest on this Regulation S Global Note will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance and until payment of said principal sum has been
made or duly provided for. The interest so payable on any Interest Payment Date
will be paid to the person in whose name this Regulation S Global Note (or one
or more Predecessor Notes) is registered at the close of business on the record
date, which shall be the January 1 or July 1 (whether or not a Business Day)
next preceding such Interest Payment Date respectively; provided that any such
interest not punctually paid or duly provided for shall be payable as provided
in the Indenture. Interest shall be paid by check mailed to the registered
holder at the registered address of such person unless other arrangements are
made in accordance with the provisions of the Indenture.
The aggregate principal amount of this Regulation S Global Note
represented hereby may from time to time be reduced or increased to reflect
exchanges of a part of this Regulation S Global Note for interests in the
Restricted Global Note or definitive Notes or exchanges of interests in the
Restricted Global Note or definitive Notes for a part of this Regulation S
Global Note or conversions or redemptions of a part of this Regulation S Global
Note or cancellations of a part of this Regulation S Global Note or transfers of
interests in the Restricted Global Note or definitive Notes in return for a part
of this Regulation S Global Note or transfers of a part of this Regulation S
Global Note effected by delivery of interests in the Restricted Global Note or
definitive Notes, in each case, and in any such case, by means of notations on
the Schedule of Exchanges, Conversions, Redemptions, Cancellations and Transfers
on the last page hereof. Notwithstanding any provision of this Regulation S
Global Note to the contrary, (i) exchanges of a part of this Regulation S Global
Note for interests in the Restricted Global Note or definitive Notes, (ii)
exchanges of interests in the Restricted Global Note or definitive Notes for a
part of this Regulation S Global Note, (iii) conversions or redemptions of a
part of this Regulation S Global Note, (iv) cancellations of a part of this
Regulation S Global Note, (v) transfers of interests in the Restricted Global
Note or definitive Notes in return for a part of this Regulation S Global Note
and (vi) transfers of a part of this Regulation S Global Note effected by
delivery of interests in the Restricted Global Note or definitive Notes may be
effected without the surrendering of this Regulation S Global Note, provided
that appropriate notations on the Schedule of Exchanges, Conversions,
Redemptions, Cancellations and Transfers are made by the Trustee, or the
Custodian at the direction of the Trustee, to reflect the appropriate reduction
or increase, as the case may be, in the aggregate principal amount of this
Regulation S Global Note resulting therefrom or as a consequence thereof.
Reference is made to the further provisions of this Regulation S
Global Note set forth on the reverse hereof, including, without limitation,
provisions giving the holder of this Regulation S Global Note the right to
convert this Regulation S Global Note into Common Stock of the Company on the
terms (or, at the option of the Company, into an amount of cash as set forth in
the Indenture) and subject to the limitations referred to on the reverse hereof
and as more fully specified in the Indenture. Such further provisions shall for
all purposes have the same effect as though fully set forth at this place.
This Regulation S Global Note shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be construed
in accordance with and governed by the laws of said State, without regard to
conflicts of laws principles thereof.
This Regulation S Global Note shall not be valid or become obligatory
for any purpose until the certificate of authentication hereon shall have been
manually signed by the Trustee or a duly authorized authenticating agent under
the Indenture.
IN WITNESS WHEREOF, the Company has caused this Regulation S Global
Note to be duly executed under its corporate seal.
NINE WEST GROUP INC.
By:
------------------------
Name:
Title:
Attest:
- -----------------------
Secretary
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
Dated:
This is one of the Notes described in the within-named indenture.
CHEMICAL BANK, as Trustee
By:
--------------------------
Authorized Signatory
As Authenticating Agent
(if different from Trustee)
[FORM OF REVERSE OF REGULATION S GLOBAL NOTE]
NINE WEST GROUP INC.
5-1/2% Convertible Subordinated Notes Due 2003
This Regulation S Global Note is one of a duly authorized issue of
Notes of the Company, designated as its 5-1/2% Convertible Subordinated Notes
Due 2003 (herein called the "Notes"), limited to the aggregate principal amount
of $---------- all issued or to be issued under and pursuant to an Indenture
dated as of June 26, 1996 (the "Indenture"), between the Company and Chemical
Bank, the trustee (the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a complete description of the
rights, limitations of rights, obligations, duties and immunities thereunder of
the Trustee, the Company and the holders of the Notes. Each Note is subject to,
and qualified by, all such terms as set forth in the Indenture, certain of which
are summarized hereon and each holder of a Note is referred to the corresponding
provisions of the Indenture for a complete statement of such terms. To the
extent that there is any inconsistency between the summary provisions set forth
in the Notes and the Indenture, the provisions of the Indenture shall govern.
Capitalized terms used but not defined in this Note shall have the meanings
ascribed to them in the Indenture.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest on all Notes may be declared, and upon said declaration shall become,
due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The payment of principal of, premium, if any, and interest on the
Notes will, to the extent set forth in the Indenture, be subordinated in right
of payment to the prior payment in full of all Senior Indebtedness (as defined
in the Indenture). Upon any distribution to creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding related to the Company or its
property, in an assignment for the benefit of creditors or any marshalling of
the Company's assets and liabilities, the holders of all Senior Indebtedness
will first be entitled to receive payments in full of all amounts due or to
become due thereon before the holders of the Notes will be entitled to receive
any payment in respect of the principal of, premium, if any, or interest on the
Notes (except that holders of Notes may receive securities that are subordinated
at least to the same extent as the Notes to Senior Indebtedness and any
securities issued in exchange for Senior Indebtedness).
The Company also may not make any payment of principal, premium (if
any) or interest on the Notes (except in such subordinated securities) any may
not repurchase, redeem or otherwise retire any Notes if (a) a default in the
payment of the principal of, premium, if any, or interest on Senior Indebtedness
occurs and is continuing beyond any applicable period of grace or (b) any other
default occurs and is continuing with respect to Senior Indebtedness that
permits holders of the Senior Indebtedness as to which such default relates to
accelerate its maturity and the Trustee receives a notice of such default (a
"Payment Blockage Notice") from the representative or representatives of holders
of at least a majority in principal amount of Senior Indebtedness then
outstanding. Payments on the Notes may and shall be resumed (i) in the case of
a payment default, upon the date on which such default is cured or waived, or
(ii) in the case of a non-payment default, 179 days after the date on which the
applicable Payment Blockage Notice is received, unless the maturity of any
Senior Indebtedness has been accelerated. No new period of payment blockage may
be commenced within 360 days after the receipt by the Trustee of any prior
Payment Blockage Notice. No nonpayment default that existed or was continuing
on the date of delivery of any Payment Blockage Notice to the Trustee shall be,
or be made, the basis for a subsequent Payment Blockage Notice unless such
default shall have been cured or waived for a period of not less than 180 days.
In the event that the Trustee (or paying agent if other than the
Trustee) or any holder of the Notes receives any payment of principal or
interest with respect to the Notes at a time when such payment is prohibited
under the Indenture, such payment shall be held in trust for the benefit of, and
shall be paid over and delivered to, the holders of Senior Indebtedness (if
there are no representatives thereof) or their representative as their
respective interests may appear. After all Senior Indebtedness is paid in full
and until the Notes are paid in full, the holders of the Notes shall be
subrogated (equally and ratably with all other Indebtedness pari passu with the
Notes) to the rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness to the extent that distributions otherwise
payable to the holders of the Notes have been applied to the payment of Senior
Indebtedness.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the holders of the Notes; provided that no such supplemental indenture shall
(i) extend the fixed maturity of any Note, or reduce the rate or extend the time
of payment of interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or reduce any amount payable on redemption thereof,
alter the obligation of the Company to redeem the Notes at the option of the
holders upon the occurrence of a Change of Control or impair or affect the right
of any Noteholder to institute suit for the payment thereof, or make the
principal thereof or interest or premium, if any, thereon payable in any coin or
currency other than that provided in the Notes, modify the subordination
provisions in a manner adverse to the holders of the Notes, or impair the right
to convert the Notes into Common Stock subject to the terms set forth in the
Indenture without the consent of the holder of each Note so affected or (ii)
reduce the aforesaid percentage of Notes, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of all Notes then outstanding. It is also provided in the Indenture that, prior
to any declaration accelerating the maturity of the Notes, the holders of a
majority in aggregate principal amount of the Notes at the time outstanding may
on behalf of the holders of all of the Notes waive any past default or Event of
Default under the Indenture and its consequences except a default in the payment
of interest or any premium on or the principal of any of the Notes, a failure by
the Company to convert any Notes into Common Stock of the Company or a default
in respect of a covenant or provision of the Indenture that under Article X
thereof cannot be modified or amended without the consent of the holders of all
Notes then outstanding. Any such consent or waiver by the holder of this
Regulation S Global Note (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Regulation S Global Note and any Notes that may be issued in exchange or
substitution hereof, irrespective of whether or not any notation thereof is made
upon this Regulation S Global Note or such other Notes.
No reference herein to the Indenture and no provision of this
Regulation S Global Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of and any premium and interest on this Regulation S Global Note at
the place, at the respective times, at the rate and in the coin or currency
herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year
composed of twelve 30-day months.
The Notes are issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration or exchange of Notes, Notes may be exchanged for a like aggregate
principal amount of Notes of other authorized denominations.
The Notes are not redeemable at the option of the Company prior to
July 16, 1996. At any time on or after that date, the Notes may be redeemed at
the Company's option, upon notice as set forth in the Indenture, in whole at any
time or in part from time to time, at the optional redemption prices set forth
below, together with accrued interest to the date fixed for redemption.
If redeemed during the 12-month period beginning:
Date Percentage
---- ----------
July 16, 1999 102.75%
July 15, 2000 101.83%
July 15, 2001 100.92%
and 100% on or after July 15, 2002; provided that if the date fixed for
redemption is on a date or after the record date and on or before the next
following interest payment date, then the interest payable on such date shall be
paid to the holder of record on the next preceding January 1 or June 1,
respectively.
If a Change of Control (as defined in the Indenture) shall occur at
any time, then each holder of Notes shall have the right to require that the
Company purchase such holder's Notes in whole or in part in integral multiples
of $1,000, at a purchase price in cash in an amount equal to 101% of the
principal amount of such Notes, plus accrued and unpaid interest, if any, to the
repurchase date pursuant to an offer to be made by the Company and in accordance
with the procedures set forth in the Indenture.
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after 60 days following the latest date of
original issuance of the Notes and prior to the close of business on July 15,
2003, or, as to all or any portion hereof called for redemption, prior to the
close of business on the Trading Day next preceding the date fixed for
redemption (unless the Company shall default in payment due upon redemption
thereof), to convert the principal hereof or any portion of such principal that
is $1,000 or an integral multiple thereof, into that number of fully paid and
non-assessable shares of Company's Common Stock, as said shares shall be
constituted at the date of conversion, obtained by dividing the principal amount
of this Regulation S Global Note or portion thereof to be converted by the
conversion price of $60.76 or such conversion price as adjusted from time to
time as provided in the Indenture, upon surrender of this Regulation S Global
Note, together with a conversion notice as provided in the Indenture, to the
Company at the office or agency of the Company maintained for that purpose in
the Borough of Manhattan, The City of New York, or at the option of such holder,
the Corporate Trust Office of the Trustee, and, unless the shares issuable on
conversion are to be issued in the same name as this Regulation S Global Note,
duly endorsed by, or accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the holder or by his duly authorized attorney.
No adjustment in respect of interest or dividends will be made upon any
conversion; provided that if this Regulation S Global Note shall be surrendered
for conversion during the period from the close of business on any record date
for the payment of interest and through the opening of business on the next
succeeding interest payment date, this Regulation S Global Note (unless it or
the portion being converted shall have been called for redemption) must be
accompanied by an amount, in funds acceptable to the Company, equal to the
interest payable on such interest payment date on the principal amount being
converted. The interest payment with respect to a Note called for redemption on
a date during the period from the close of business on or after any record date
to the opening of business on the business day following the corresponding
payment date will be payable on the corresponding interest payment date to the
registered Holder at the close of business on that record date (notwithstanding
the conversion of such Note before the corresponding interest payment date) and
a Holder who elects to convert need not include funds equal to the interest
paid. No fractional shares will be issued upon any conversion, but an
adjustment in cash will be made, as provided in the Indenture, in respect of any
fraction of a share that would otherwise be issuable upon the surrender of any
Note or Notes for conversion.
At the sole option of the Company, in lieu of delivering shares of
Common Stock (or other Securities into which the Notes are then convertible)
upon conversion of the Notes pursuant to the provisions of the Indenture, the
Company may pay to a holder of Notes who properly exercises the conversion
privilege, as set forth in the Indenture, an amount in cash equal to the Market
Cash Conversion Price (as defined in the Indenture) of the shares of Common
Stock into which such Notes are then convertible, plus any property or assets
into which such Notes are then convertible.
Upon due presentment for registration of transfer of this Regulation S
Global Note at the office or agency of the Company in the Borough of Manhattan,
The City of New York, or at the option of the holder of this Regulation S Global
Note, at the Corporate Trust Office of the Trustee, a new Note or Notes of
authorized denominations for an equal aggregate principal amount will be issued
to the transferee in exchange thereof, subject to the conditions and limitations
provided in the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Regulation S Global Note (whether or
not this Regulation S Global Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon made by anyone other than the
Company or any Note registrar), for the purpose of receiving payment hereof, or
on account hereof, for the conversion hereof and for all other purposes, and
neither the Company nor the Trustee nor any other authenticating agent nor any
paying agent nor any other conversion agent nor any Note registrar shall be
affected by any notice to the contrary. All payments made to or upon the order
of such registered holder shall, to the extent of the sum or sums paid, satisfy
and discharge liability for monies payable on this Regulation S Global Note.
No recourse for the payment of the principal of or any premium or
interest on this Regulation S Global Note, or for any claim based hereon or
otherwise in respect hereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in the Indenture or any indenture
supplemental thereto or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any Successor Company, either directly or through the Company or
any Successor Company, whether by virtue of any constitution, statute or rule of
law or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Regulation S Global Note, shall be construed as though they were written
out in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right ------------------Custodian
of survivorship and not as (Cust)
tenants in common Uniform Gifts To
Minors Act
---------------
(State)
Additional abbreviations may also be used though not in the above list.
- ----------------------------
Signature Guarantee
Fill in for registration of share if to
be issued, and Notes if to be delivered,
other than to an in the name of the
registered holder:
- -----------------------------
(Name)
- -----------------------------
(Street Address)
- -----------------------------
(City, State and Zip Code)
Please print name and address
Principal amount to be converted
(if less than all) $
------------------
--------------------------------
Social Security or Other
Taxpayer Identification Number
[FORM OF OPTION TO ELECT REPAYMENT
UPON A CHANGE OF CONTROL]
TO: Nine West Group Inc.
The undersigned registered owner of this Regulation S Global Note
hereby irrevocably acknowledges receipt of a notice from Nine West Group Inc.
(the "Company") as to the occurrence of a Change of Control with respect to the
Company and requests and instructs the Company to repay the entire principal
amount of this Regulation S Global Note, or the portion thereof (which is $1,000
principal amount or an integral multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Regulation S
Global Note, together with accrued interest to such date, to the registered
holder hereof.
Dated:
----------------
---------------------------
---------------------------
Signature(s)
------------------------
Social Security or Other Taxpayer
Identification Number
Principal amount to be repaid (if
less than all): $
-----------------
[FORM OF ASSIGNMENT]
For value received --------------------------------------------------
hereby sell(s), assign(s) and transfer(s) unto ---------------------------------
(please insert social security or other identifying number of assignee) the
within Note, and hereby irrevocably constitutes and appoints -------------------
attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.
In connection with any transfer of the within Note (or any issuance of
shares of Common Stock upon conversion of the within Note) occurring prior to
the third anniversary of the date of original issuance of such Note, the
undersigned confirms that such Note (or shares of Common Stock, as the case may
be) are being transferred pursuant to and in compliance with Regulation S under
the Securities Act of 1933, as amended.
In addition, the holder must furnish to the Trustee such
certifications, legal opinions or other information as it may reasonably require
to confirm that such transfer is being made pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the Securities
Act of 1933, as amended.
Dated:
---------------
- ---------------------
- ---------------------
Signature(s)
Signature(s) must be guaranteed by
an eligible Guarantor Institution
(banks, stock brokers, savings and
loan associations and credit unions)
with membership in an approved
signature guarantee medallion program
pursuant to Securities and Exchange
Commission Rule 17Ad-15.
- ---------------------
Signature Guarantee
NOTICE: The signature on the conversion notice, the option to elect payment upon
a Change of Control or the assignment must correspond with the name as written
upon the face of the Note in every particular without alteration or enlargement
or any change whatever.
SCHEDULE A
----------
SCHEDULE OF EXCHANGES
The initial principal amount of this Regulation S Global Note is
U.S.$------------- . The following additions to principal, redemptions,
exchanges of a part of this Regulation S Global Note for an interest in the
Restricted Global Note, definitive Note and conversions into Common Shares have
been made:
<TABLE>
<C> <C> <C> <C> <C>
Date of Addition to Principal Amount Principal Amount Remaining Principal Notation Made by
Principal, Redemption, Added on Exchange Redeemed, Amount Outstanding or on behalf of
Exchange or of Interest in the Exchanged for Following such Trustee
Conversion Regulation S Global Interest in the Transaction
Note or Definitive Regulation S
Notes Global Note or
Definitive Notes
or Converted into
Common Shares
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------------------------------------------------------------
NINE WEST GROUP INC.
Issuer
AND
CHEMICAL BANK
Trustee
INDENTURE
Dated as of June 26, 1996
5-1/2% Convertible Subordinated Notes Due 2003
- -----------------------------------------------------------------------
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
- --------------- -----------------
310(a)(1)............................................... 7.10
(a)(2)............................................... 7.10
(a)(3)............................................... N.A.
(a)(4)............................................... N.A.
(b).................................................. 7.8; 7.10
(c).................................................. N.A.
311(a).................................................. 7.11
(b).................................................. 7.11
(c).................................................. N.A.
312(a).................................................. 2.5
(b).................................................. 12.3
(c).................................................. 12.3
313(a).................................................. 7.6
(b)(1)............................................... N.A.
(b)(2)............................................... 7.6
(c).................................................. 7.6; 12.2
(d).................................................. 7.6
314(a).................................................. 4.2; 12.2
(b).................................................. N.A.
(c)(1)............................................... 12.4
(c)(2)............................................... 12.4
(c)(3)............................................... N.A.
(d).................................................. N.A.
(e).................................................. 12.5
(f).................................................. N.A.
315(a).................................................. 7.1(b)
(b).................................................. 7.5; 12.2
(c).................................................. 7.1(a)
(d).................................................. 7.1(c)
(e).................................................. 6.11
316(a)(last sentence)................................... 2.9
(a)(1)(A)............................................ 6.5
(a)(1)(B)............................................ 6.4
(a)(2)............................................... N.A.
(b).................................................. 6.7
(c).................................................. 9.4
317(a)(1)............................................... 6.8
(a)(2)............................................... 6.9
(b).................................................. 2.4
318(a).................................................. 12.1
N.A. Means Not applicable.
- ------
* This Cross-Reference Table is not part of the Indenture.
Page
----
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions...........................................2
Section 1.2 Incorporation by Reference of Trust Indenture Act.....8
Section 1.3 Rules of Construction.................................8
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1 Designation, amount and Issue of Notes................9
Section 2.2 Form of Notes.........................................9
Section 2.3 Date and Denomination of Notes; Payments of Interest..10
Section 2.4 Execution of Notes....................................11
Section 2.5 Exchange and Registration of Transfer of Notes;
Restrictions on Transfer; Depositary.................12
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes............22
Section 2.7 Temporary Notes.......................................23
Section 2.8 Cancellation of Notes Paid, Etc.......................23
Section 2.9 CUSIP Numbers.........................................24
ARTICLE 3
REDEMPTION OF NOTES
Section 3.1 Redemption Prices......................................24
Section 3.2 Notice of Redemption; Selection of Notes...............24
Section 3.3 Payment of Notes Called for Redemption.................26
Section 3.4 Conversion Arrangement on Call for Redemption..........27
Section 3.5 Purchase of Notes Upon a Change of Control.............28
ARTICLE 4
PARTICULAR COVENANTS OF THE COMPANY
Section 4.1 Payment of Principal, Premium and Interest.............29
Section 4.2 Maintenance of Office or Agency........................30
Section 4.3 Appointments to Fill Vacancies in Trustee's Office.....30
Section 4.4 Provisions as to Paying Agent..........................30
Section 4.5 Corporate Existence....................................31
Section 4.6 Rule 144A Information Requirement......................31
Section 4.7 Stay, Extension and Usury Laws.........................32
Section 4.8 Compliance Statement; Notice of Defaults...............32
Section 4.9 Taxes..................................................32
Section 4.10 Insurance..............................................33
Page
----
ARTICLE 5
NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY
Section 5.1 Noteholders' Lists.....................................33
Section 5.2 Reports by Company.....................................33
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1 Events of Default......................................34
Section 6.2 Payments of Notes on Default; Suit Therefor............36
Section 6.3 Application of Monies Collected by Trustee.............37
Section 6.4 Proceedings by Noteholder..............................38
Section 6.5 Proceedings by Trustee.................................39
Section 6.6 Remedies Cumulative and Continuing.....................39
Section 6.7 Direction of Proceedings and Waiver of Defaults by
Majority of Noteholders...............................39
Section 6.8 Notice of Defaults.....................................40
Section 6.9 Undertaking to Pay Costs...............................40
ARTICLE 7
CONCERNING THE TRUSTEE
Section 7.1 Duties and Responsibilities of trustee.................40
Section 7.2 Reports by Trustee to Holders..........................41
Section 7.3 Reliance on Documents, Opinions, Etc...................42
Section 7.4 No Responsibility for Recitals, Etc....................43
Section 7.5 Trustee, Paying Agents, Conversion Agents or Registrar
May Own Notes.........................................43
Section 7.6 Monies to Be Held in Trust.............................43
Section 7.7 Compensation and Expenses of Trustee...................43
Section 7.8 Officers' Certificate as Evidence......................44
Section 7.9 Conflicting Interests of Trustee.......................44
Section 7.10 Eligibility of Trustee.................................44
Section 7.11 Resignation or Removal of Trustee......................45
Section 7.12 Acceptance by Successor Trustee........................46
Section 7.13 Successor, by Merger, Etc..............................47
Section 7.14 Limitation on Rights of Trustee as Creditor............47
ARTICLE 8
CONCERNING THE NOTEHOLDERS
Section 8.1 Action by Noteholders..................................47
Section 8.2 Proof of Execution by Noteholders......................47
Section 8.3 Who Are Deemed Absolute Owners.........................47
PAGE
----
Section 8.4 Company-Owned Notes Disregarded........................48
Section 8.5 Revocation of Consents, Future Holders Bound...........48
ARTICLE 9
NOTEHOLDERS MEETINGS
Section 9.1 Purposes for Which Meetings May be Called..............49
Section 9.2 Manner of Calling Meetings; Record Date................49
Section 9.3 Call of Meeting by Company or Noteholders..............50
Section 9.4 Who May Attend and Vote at Meetings....................50
Section 9.5 Manner of Voting at Meetings and Record to be Kept.....50
Section 9.6 Exercise of Rights of Trustee and Noteholders Not To Be
Hindered or Delayed...................................50
ARTICLE 10
SUPPLEMENTAL INDENTURES
Section 10.1 Supplemental Indentures Without Consent of
Noteholders...........................................51
Section 10.2 Supplemental Indentures With Consent of Noteholders....52
Section 10.3 Effect of Supplemental Indentures......................53
Section 10.4 Notation on Notes......................................53
Section 10.5 Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee.....................................53
ARTICLE 11
CONSOLIDATION, MERGER, SALE, CONVEYANCE,
TRANSFER AND LEASE
Section 11.1 Company May Consolidate, Etc. on Certain Terms.........54
Section 11.2 Successor Company To Be Substituted....................54
Section 11.3 Opinion of Counsel to be Given to Trustee..............55
ARTICLE 12
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 12.1 Legal Defeasance and Covenant Defeasance of the
Notes.................................................55
Section 12.2 Termination of Obligations upon Cancellation
of the Notes..........................................57
Section 12.3 Survival of Certain Obligations........................57
Section 12.4 Acknowledgment of Discharge by Trustee.................57
Section 12.5 Application of Trust Assets............................58
Section 12.6 Repayment to the Company; Unclaimed Money..............58
Section 12.7 Reinstatement..........................................58
PAGE
----
ARTICLE 13
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 13.1 Indenture and Notes Solely Corporate
Obligations...........................................59
ARTICLE 14
CONVERSION OF NOTES
Section 14.1 Right to Convert.......................................59
Section 14.2 Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or
Dividends.............................................60
Section 14.3 Cash Payments in Lieu of Fractional Shares.............62
Section 14.4 Conversion Price.......................................62
Section 14.5 Adjustment of Conversion Price.........................62
Section 14.6 Effect of Reclassification, Consolidation, Merger
or Sale...............................................70
Section 14.7 Taxes on Shares Issued.................................71
Section 14.8 Reservation of Shares; Shares to Be Fully Paid;
Listing of Common Stock...............................71
Section 14.9 Responsibility of Trustee..............................72
Section 14.10 Notice to Holders Prior to Certain Actions.............72
ARTICLE 15
SUBORDINATION
Section 15.1 Agreement to Subordinate...............................73
Section 15.2 Certain Definitions....................................73
Section 15.3 Liquidation; Dissolution; Bankruptcy...................74
Section 15.4 Default on Senior Indebtedness.........................75
Section 15.5 When Distribution Must Be Paid Over....................75
Section 15.6 Notice by Company......................................76
Section 15.7 Subrogation............................................76
Section 15.8 Relative Rights........................................76
Section 15.9 Subordination May Not Be Impaired by Company...........77
Section 15.10 Distribution or Notice to Representative...............77
Section 15.11 Rights of Trustee and Paying Agent.....................77
Section 15.12 Authorization to Effect Subordination..................78
Section 15.13 Conversions Not Deemed Payment.........................78
Section 15.14 Amendments.............................................78
PAGE
----
ARTICLE 16
MISCELLANEOUS PROVISIONS
Section 16.1 Provisions Binding on Company's Successors.............79
Section 16.2 Official Acts by Successor Company.....................79
Section 16.3 Addresses for Notices, Etc.............................79
Section 16.4 Communications by Holders with Other Holders...........79
Section 16.5 Governing Law..........................................80
Section 16.6 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee...............................80
Section 16.7 Legal Holidays.........................................80
Section 16.8 No Security Interest Created...........................80
Section 16.9 Trust Indenture Act....................................80
Section 16.10 Trust Indenture Act Controls...........................80
Section 16.11 Benefits of Indenture..................................81
Section 16.12 Table of Contents, Headings Etc........................81
Section 16.13 Authenticating Agent...................................81
Section 16.14 Execution in Counterparts..............................82
INDENTURE dated as of June 26, 1996 between NINE WEST GROUP INC., a
Delaware corporation (hereinafter sometimes called the "Company," as more fully
set forth in Section 1.1), and CHEMICAL BANK, a New York corporation
(hereinafter sometimes called the "Trustee," as more fully set forth in Section
1.1).
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance of its 5-1/2% Convertible Subordinated Notes Due 2003
(hereinafter sometimes called the "Notes"), in an aggregate principal amount not
to exceed $201,250,000 and, to provide the terms and conditions upon which the
Notes are to be authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of option to require repurchase by the
Company upon a Change of Control (as hereinafter defined), a form of conversion
notice and a certificate of transfer to be borne by the Notes are to be
substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when
executed by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issuance hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Notes are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the Notes by
the holders thereof, the Company covenants and agrees with the Trustee for the
equal and proportionate benefit of the respective holders from time to time of
the Notes (except as otherwise provided below) as follows:
ARTICLE 1.
DEFINITIONS
1.1. Definitions. The terms defined in this Section 1.1 (except as
herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture that are defined in the Trust Indenture Act (as
hereinafter defined) or that are by reference defined in the Securities Act (as
hereinafter defined), except as herein otherwise expressly provided or unless
the context otherwise requires, shall have the meanings assigned to such terms
in said Trust Indenture Act and in said Securities Act as in force at the date
of the execution of this Indenture. The words "herein," "hereof," "hereunder"
and words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other Subdivision. The terms defined in this
Article include the plural as well as the singular.
Accredited Investor: The term "Accredited Investor" shall have the
meaning specified in Rule 501(a) under the Securities Act.
Acquisition Price: The term "Acquisition Price" shall mean the
weighted average price paid by the person or group in acquiring the Voting
Stock.
Affiliate: An "Affiliate" of any specified person shall mean an
"affiliate" as defined in Rule 144(a) as promulgated under the Securities Act.
Board of Directors: The term "Board of Directors" shall mean the
Board of Directors of the Company or a committee of such Board of Directors duly
authorized to act for it hereunder.
Board Resolution: The term "Board Resolution" shall mean (i) a copy
of a resolution certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors, or a duly
authorized committee thereof (to the extent permitted by applicable law), or
(ii) a certificate signed by the director or directors and/or officer or
officers to whom the Board of Directors shall have duly delegated its authority,
which shall be in full force and effect on the date of such certification, and
delivered to the Trustee.
Business Day: The term "Business Day" shall mean a day, other than
(i) a Saturday, a Sunday or a day on which banking or trust institutions in the
State and City of New York are authorized or obligated by law, regulation or
executive order to close or (ii) a day that is declared a national or New York
state holiday.
Capital Stock: The term "Capital Stock" of any person means any and
all shares, interests, participations or other equivalents (however designated)
of such person's corporate stock or any and all equivalent ownership interests
in a person (other than a corporation) whether now outstanding or issued after
the date hereof.
Cedel: The term "Cedel" shall mean Cedel Bank societe anonyme.
Change of Control: The term "Change of Control" shall mean an event
or series of events pursuant to which (i) any "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act) acquires "beneficial
ownership" (as determined in accordance with Rule 13d-3 under the Exchange Act),
directly or indirectly, of more than 50% of the total Voting Stock of the
Company at an Acquisition Price less than the Conversion Price then in effect
with respect to the Notes and (ii) holders of the Common Stock receive
consideration that is not all or substantially all common stock that is (or upon
consummation of or immediately following such event or events shall be) listed
on a United States national securities exchange or approved for quotation on the
Nasdaq National Market or any similar United States system of automated
dissemination of quotations of securities' prices; provided that any such person
or group shall not be deemed to be the beneficial owner of, or to beneficially
own, any Voting Stock tendered in a tender offer until such tendered Voting
Stock is accepted for purchase under the tender offer.
Closing Date: The term "Closing Date" shall mean June 26, 1996.
Commission: The term "Commission" shall mean the Securities and
Exchange Commission, as from time to time constituted, created under the
Exchange Act or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, the body performing such duties at such time.
Common Stock: The term "Common Stock" shall mean any stock of any
class of the Company that does not have a preference in respect of dividends or
of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and that is not subject to redemption
by the Company. Subject to the provisions of Section 14.6, however, shares
issuable on conversion of Notes shall include only shares of the class
designated as common stock of the Company at the date of this Indenture or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and that do not have a preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and that are not subject
to redemption by the Company; provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion that the total number of shares of such
class resulting from all such reclassification bears to the total number of
shares of all such classes resulting from all such reclassifications.
Company: The term "Company" shall mean Nine West Group Inc., a
Delaware corporation, and, subject to the provisions of Article 11, shall
include its successors and assigns.
Conversion Price: The term "Conversion Price" shall have the meaning
specified in Section 14.4.
Corporate Trust Office of the Trustee: The term "Corporate Trust
Office of the Trustee," or other similar term, shall mean the office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 450 West 33rd Street, New York, New York 10001,
Attention: Corporate Trust Administration.
Custodian: The term "Custodian" shall mean Chemical Bank, as
custodian for the Depositary with respect to the Notes in global form, or any
successor entity thereto.
default: The term "default" shall mean any event that is, or after
notice or passage of time, or both, would be, an Event of Default.
definitive Notes; in definitive form: The term "definitive Notes"
shall have the meaning specified in Section 2.2, any reference to Notes "in
definitive form" shall mean definitive Notes and any reference to securities "in
definitive form" shall mean definitive Notes or Common Stock as the context
requires.
Depositary: The term "Depositary" shall mean, with respect to the
Notes issuable or issued in whole or in part in global form, the person
specified in Section 2.5(d) as the Depositary with respect to the Notes, until a
successor shall have been appointed and become such pursuant to the applicable
provisions of this Indenture, and thereafter, "Depositary" shall mean or include
such successor.
DWAC: The term "DWAC" shall mean Deposit and Withdrawal at Custodian
Service.
Euroclear: The term "Euroclear" shall mean Morgan Guaranty Trust
Company of New York, Brussels office, as operator of the Euroclear System.
Event of Default: The term "Event of Default" shall mean any event
specified in Section 6.1(a), (b), (c), (d), or (e).
Exchange Act: The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.
global Note: The term "global Note" shall mean any and all notes in
global form.
Indenture: The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
Market Cash Conversion Price: The term "Market Cash Conversion
Price" means with respect to any exchange, the average of the closing prices of
the Common Stock (or other securities, as the case may be) for the ten Trading
Day period (appropriately adjusted to take into account the occurrence during
such period of certain events that would result in an adjustment of the
Conversion Price with respect to the Common Stock or other consideration)
commencing on the first Trading Day after delivery of notice by the Company to
the Trustee that the Company has elected to pay cash in lieu of delivering
shares of Common Stock or other securities. The period between the date of
delivery by a holder of a notice of conversion and the date of determination of
the Market Cash Conversion Price may not exceed fifteen Trading Days.
Note or Notes: The terms "Note" or "Notes" shall mean any Note or
Notes, as the case may be, authenticated and delivered under this Indenture.
Noteholder; holder: The terms "Noteholder" or "holder" as applied to
any Note, or other similar terms (but excluding the term "beneficial holder"),
shall mean any person in whose name a particular Note is registered on the Note
registrar's books.
Note register: The term "Note register" shall have the meaning
specified in Section 2.5(a).
Officers' Certificate: The term "Officers' Certificate," when used
with respect to the Company, shall mean a certificate signed by the President,
the Chief Executive Officer, the Chief Operating Officer or the Chief Financial
Officer and any Treasurer, the Secretary or any Assistant Secretary of the
Company, that is delivered to the Trustee. Each such certificate shall include
the statements provided for in Section 16.6 if and to the extent required by the
provisions of such Section.
Opinion of Counsel: The term "Opinion of Counsel" shall mean an
opinion in writing signed by legal counsel, who may be an employee of or counsel
to the Company or other counsel acceptable to the Trustee, that is delivered to
the Trustee. Each such opinion shall include the statements provided for in
Section 16.6 if and to the extent required by the provisions of such Section.
outstanding: The term "outstanding," when used with reference to
Notes, shall, subject to the provisions of Section 8.4, mean, as of any
particular time, all Notes authenticated and delivered by the Trustee under this
Indenture, except
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for which monies in the necessary
amount shall have been deposited in trust with the Trustee for payment or
redemption; provided that if such Notes are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as in Article 3
provided, or provision satisfactory to the Trustee shall have been made for
giving such notice;
(c) Notes paid pursuant to Section 2.6 hereof or Notes in lieu of or
in substitution for which other Notes shall have been authenticated and
delivered pursuant to the terms of Section 2.6 unless proof satisfactory to the
Trustee is presented that any such Notes are held by bona fide holders in due
course; and
(d) Notes converted into Common Stock pursuant to Article 14 and
Notes not deemed outstanding pursuant to Section 3.2.
person: The term "person" shall mean a corporation, an association,
a partnership, an individual, a joint venture, a joint stock company, a trust,
an unincorporated organization or a government or an agency or a political
subdivision thereof.
PORTAL Market: The term "PORTAL Market" shall mean the Private
Offerings, Resales and Trading through Automated Linkages Market operated by the
National Association of Securities Dealers, Inc. or any successor thereto.
Predecessor Note: The term "Predecessor Note" of any particular Note
shall mean every previous Note evidencing all or a portion of the same debt as
that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 2.6 in lieu of a
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
lost, destroyed or stolen Note.
QIB: The term "QIB" shall mean a "qualified institutional buyer" as
defined in Rule 144A.
Regulation S: The term "Regulation S" shall mean Regulation S under
the Securities Act and any successor regulation thereto.
Regulation S Global Note: The term "Regulation S Global Note" shall
have the meaning specified in Section 2.2.
Responsible Officer: The term "Responsible Officer," when used with
respect to the Trustee, shall mean an officer of the Trustee assigned and duly
authorized by the Trustee to administer its corporate trust matters.
Restricted Global Note: The term "Restricted Global Note" shall have
the meaning specified in Section 2.2.
Restricted Period: The term "Restricted Period" shall have the
meaning specified in Section 2.2.
Restricted Securities: The term "Restricted Securities" shall have
the meaning specified in Section 2.5(d).
Rule 144A: The term "Rule 144A" shall mean Rule 144A as promulgated
under the Securities Act.
Securities Act: The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder.
subsidiary: The term "subsidiary" of any specified person shall mean
(i) a corporation a majority of whose capital stock with voting power under
ordinary circumstances to elect directors is at the time directly or indirectly
owned by such person or (ii) any other person (other than a corporation) in
which such person or such person and a subsidiary or subsidiaries of such person
or a subsidiary or subsidiaries of such person directly or indirectly, at the
date of determination thereof, has at least majority ownership.
Successor Company: The term "Successor Company" shall have the
meaning specified in Section 11.1.
Trust Indenture Act: The term "Trust Indenture Act" shall mean the
Trust Indenture Act of 1939, as amended, as it was in force at the date of
execution of this Indenture, except as provided in Sections 10.3 and 14.6;
provided that in the event said Trust Indenture Act of 1939 is amended after the
date hereof, the term "Trust Indenture Act" shall mean, to the extent required
by such amendment, said Trust Indenture Act of 1939 as so amended.
Trustee: The term "Trustee" shall mean Chemical Bank, its successors
and any corporation resulting from or surviving any consolidation or merger to
which it or its successors may be a party and any successor trustee at the time
serving as successor trustee hereunder.
U.S. Government Obligations: The term "U.S. Government Obligations"
shall mean securities that are (i) direct obligations of the United States of
America for the payment of which its full faith and credit is pledged or (ii)
obligations of a person controlled or supervised by, and acting as an agency or
instrumentality of, the United States of America the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt issued
by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian
with respect to any such U.S. Government Obligation or a specific payment of
principal or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository receipt; provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by such custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depository receipt.
Voting Stock: The term "Voting Stock" shall mean stock of the class
or classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of a corporation (irrespective of whether or not
at the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).
The definitions of certain other terms are as specified in Sections
2.1, 2.2, 2.3, 2.5, 3.5, 11.1, 12.1, 14.4, 14.5, 14.6, 15.2 and 15.4.
1.2. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture
Act, the provision is incorporated by reference in and made a part of this
Indenture.
The following Trust Indenture Act terms used in this Indenture have
the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Notes;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company and any successor obligor
upon the Trust Indenture Act.
All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by Trust Indenture Act reference to another statute or
defined by Commission rule under the Trust Indenture Act have the meanings so
assigned to them.
1.3. Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in the plural
include the singular; and
(v) provisions apply to successive events and transactions.
ARTICLE 2.
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
2.1. Designation, Amount and Issue of Notes. The Notes shall be
designated as "5-1/2% Convertible Subordinated Notes Due 2003." Notes not to
exceed the aggregate principal amount of $201,250,000 upon the execution of this
Indenture, or from time to time thereafter, may be executed by the Company and
delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and make available for delivery said Notes upon the written order
of the Company, signed by its (a) Chief Executive Officer, President, Chief
Operating Officer or Chief Financial Officer, and (b) any Treasurer or Secretary
or any Assistant Treasurer or Secretary (the "Company Order"), without any
further action by the Company hereunder.
2.2 Form of Notes. The Notes in definitive form ("definitive
Notes") shall be substantially in the form of Exhibit A hereto, with the legends
in substantially the form indicated in Exhibit A hereto and such other legends
as may be applicable thereto, which definitive Notes shall be registered in the
name of the holders thereof, duly executed by the Company and authenticated by
the Trustee or the authenticating agent as provided herein.
Unless issued in definitive form, Notes initially offered and sold in
reliance on Rule 144A shall be issued in the form of one or more permanent
global Notes (the "Restricted Global Note"), substantially in the form of
Exhibit B hereto, with the legends in substantially the form set forth in
Exhibit B hereto and such other legends as may be applicable thereto, which
Restricted Global Note shall be deposited on behalf of the holders of the Notes
represented thereby with Chemical Bank, as custodian for the Depositary, and
registered in the name of a nominee of the Depositary, duly executed by the
Company and authenticated by the Trustee or the authenticating agent as provided
herein.
Notes offered and sold outside the United States in reliance on
Regulation S may be evidenced in the form of one or more permanent global Notes
(the "Regulation S Global Note"), substantially in the form of Exhibit C hereto,
with the legends in substantially the form set forth in Exhibit C hereto and
such other legends as may be applicable thereto, which Regulation S Global Note
shall be deposited on behalf of the holders of the Notes represented thereby
with Chemical Bank, as custodian for the Depositary, and registered in the name
of a nominee of the Depositary, duly executed by the Company and authenticated
by the Trustee or an authenticating agent as provided herein, for credit to the
accounts of the respective depositaries for Euroclear and Cedel (or such other
accounts as they may direct). Prior to or on the 40th day after the later of
the commencement of the offering of the Notes and the Closing Date (the
"Restricted Period"), beneficial interests in the Regulation S Global Note may
only be held through Morgan Guaranty Trust Company of New York, Brussels office,
as operator of Euroclear or Cedel or another agent member of Euroclear and Cedel
acting for and on behalf of them, unless delivery is made through the Restricted
Global Note in accordance with the certification requirements hereof. During
the Restricted Period, interests in the Regulation S Global Note may be
exchanged for interests in the Restricted Global Note or for definitive Notes
only in accordance with the certification requirements described in Section 2.5
below.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Notes may be listed, or to conform to usage.
Any global Note shall represent such of the outstanding Notes as
shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be increased or reduced to reflect transfers or exchanges permitted
hereby. Any endorsement of a global Note to reflect the amount of any increase
or decrease in the amount of outstanding Notes represented thereby shall be made
by the Trustee or the Custodian, at the direction of the Trustee, in such manner
and upon instructions given by the holder of such Notes in accordance with the
Indenture. Payment of principal of and interest and premium, if any, on any
global Note shall be made to the holder of such Note.
The terms and provisions contained in the forms of Notes attached as
Exhibits A, B and C hereto shall constitute, and are hereby expressly made, a
part of this Indenture and to the extent applicable, the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
2.3. Date and Denomination of Notes; Payments of Interest. The
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and integral multiples thereof. Every Note shall be
dated the date of its authentication, shall bear interest from June 26, 1996 and
shall be payable semiannually on each January 15 and July 15, commencing January
15, 1997, as specified on the faces of the forms of Notes, attached as Exhibits
A, B and C hereto.
The person in whose name any Note (or its Predecessor Note) is
registered at the close of business on the preceding January 1 or July 1,
respectively, with respect to any interest payment date (including any Note that
is converted after the record date and on or before the interest payment date)
shall be entitled to receive the interest payable on such interest payment date
notwithstanding the cancellation of such Note upon any transfer, exchange or
conversion subsequent to the record date and prior to such interest payment
date. Interest may, at the option of the Company, be paid by check mailed to
the address of such person as it appears on the Note register; provided that,
with respect to any holder of Notes with an aggregate principal amount equal to
or in excess of $5,000,000, at the request (such request to include appropriate
wire instructions) of such holder in writing to the Trustee on or before the
record date preceding any interest payment date, interest on such holder's Notes
shall be paid by wire transfer in immediately available funds. The term "record
date" with respect to any interest payment date shall mean the January 1 or July
1 preceding said January 15 or July 15.
Interest on the Notes shall be computed on the basis of a 360-day
year composed of twelve 30-day months.
Any interest on any Note that is payable, but is not punctually paid
or duly provided for, on any said January 15 or July 15 (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Noteholder on
the relevant record date by virtue of his having been such Noteholder; and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the persons in whose names the Notes (or their respective Predecessor Notes)
are registered at the close of business on a special record date for the payment
of such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Note and the date of the proposed payment (which
shall be not less than 25 days after the receipt by the Trustee of such notice,
unless the Trustee shall consent to an earlier date), and at the same time, the
Company shall deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as in this clause
provided. Thereupon, the Trustee shall fix a special record date for the
payment of such Defaulted Interest, which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such special record date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the special record date therefor
to be mailed, first-class postage prepaid, to each Noteholder at his address as
it appears in the Note register, not less than 10 days prior to such special
record date. Notice of the proposed payment of such Defaulted Interest and the
special record date therefor having been so mailed, such Defaulted Interest
shall be paid to the persons in whose names the Notes (or their respective
Predecessor Notes) were registered at the close of business on such special
record date and shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Notes may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
2.4. Execution of Notes. The Notes shall be signed in the name and
on behalf of the Company by its Chief Executive Officer, President, Chief
Operating Officer or Chief Financial Officer and attested by the signature of
its Treasurer, Secretary or any of its Assistant Treasurers or Secretaries (any
of which signatures may be printed, engraved or otherwise reproduced thereon, by
facsimile or otherwise). Only such Notes as shall bear thereon a certificate of
authentication substantially in the form set forth on forms of Notes attached as
Exhibits A, B and C hereto, manually executed by the Trustee (or an
authenticating agent appointed by the Trustee as provided by Section 16.3),
shall be entitled to the benefits of this Indenture or be valid or obligatory
for any purpose. Such certificate by the Trustee (or such an authenticating
agent) upon any Note executed by the Company shall be conclusive evidence that
the Note so authenticated has been duly authenticated and delivered hereunder
and that the holder is entitled to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
2.5. Exchange and Registration of Transfer of Notes; Restrictions on
Transfer; Depositary.
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency of the Company designated pursuant to Section 4.2 being
herein sometimes collectively referred to as the "Note register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Notes and of transfers of Notes. Such Note
register shall be in written form or in any form capable of being converted into
written form within a reasonable period of time. The Trustee is hereby
appointed "Note registrar" for the purpose of registering Notes and transfers of
Notes as herein provided. The Company may appoint one or more co-registrars.
Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar and satisfaction of the requirements for such
transfer set forth in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and make available for delivery, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by Section 2.5(d).
Notes may be exchanged for other Notes of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Notes to be exchanged at any such office or agency. Whenever any Notes are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, the Notes that the Noteholder
making the exchange is entitled to receive.
All Notes presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company, the Trustee, the Note
registrar or any co-registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company, and the Note shall
be duly executed by the Noteholder thereof or his attorney duly authorized in
writing.
No service charge shall be charged to the Noteholder for any exchange
or registration of transfer of Notes, but the Company may require payment of a
sum sufficient to cover any tax, assessments or other governmental charges that
may be imposed in connection therewith.
None of the Company, the Trustee, the Note registrar or any
co-registrar shall be required to exchange or register a transfer of (a) any
Notes for a period beginning at the opening of business 15 days next preceding
the mailing of a notice of redemption and ending at the close of business on the
day of such mailing or (b) any Notes called for redemption or, if a portion of
any Note is selected or called for redemption, such portion thereof selected or
called for redemption or (c) any Notes surrendered for conversion or, if a
portion of any Note is surrendered for conversion, such portion thereof
surrendered for conversion or (d) any Notes surrendered for redemption pursuant
to Section 3.5 or, if a portion of any Note is surrendered for redemption
pursuant to Section 3.5, such portion thereof surrendered for redemption
pursuant to Section 3.5.
All Notes issued upon any transfer or exchange of Notes shall be the
valid obligations of the Company, evidencing the same debt and entitled to the
same benefits under this Indenture as the Notes surrendered upon such
registration of transfer or exchange.
(b) So long as the Notes are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, all Notes to be traded on
the PORTAL Market shall be represented by the Restricted Global Note registered
in the name of the Depositary or the nominee of the Depositary. The transfer
and exchange of beneficial interests in any global Note that does not involve
the issuance of a definitive Note or the transfer of interests to another global
Note shall be effected through the Depositary (but not the Trustee or the
Custodian) in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depositary therefor.
Neither the Trustee nor the Custodian (in such respective capacities) shall have
any responsibility for the transfer and exchange of beneficial interests in such
global Note that does not involve the issuance of a definitive Note or the
transfer of interests to another global Note.
At any time at the request of the beneficial holder of an interest in
a global Note, such beneficial holder shall be entitled to obtain a definitive
Note upon written request to the Trustee and the Custodian in accordance with
the standing instructions and procedures existing between the Depositary and the
Custodian for the issuance thereof. Upon receipt of any such request, the
Trustee or the Custodian, at the direction of the Trustee, shall cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Custodian, the aggregate principal amount of the global Note
to be reduced and, following such reduction, the Company shall execute and the
Trustee shall authenticate and make available for delivery to such beneficial
holder (or its nominee) a definitive Note or Notes in the appropriate aggregate
principal amount in the name of such beneficial holder (or its nominee) and
bearing such restrictive legends as may be required by this Indenture.
Any transfer of a beneficial interest in a global Note that cannot be
effected through book-entry settlement must be effected by the delivery to the
transferee (or its nominee) of a definitive Note or Notes registered in the name
of the transferee (or its nominee) on the books maintained by the Trustee. With
respect to any such transfer, the Trustee or the Custodian, at the direction of
the Trustee, shall cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Custodian, the aggregate
principal amount of the global Note to be reduced and, following such reduction,
the Company shall execute and the Trustee shall authenticate and make available
for delivery to the transferee (or such transferee's nominee, as the case may
be), a definitive Note or Notes in the appropriate aggregate principal amount in
the name of such transferee (or its nominee) and bearing such restrictive
legends as may be required by this Indenture. As a condition to such transfer,
if such transfer is made to an Accredited Investor, the Trustee or the
Custodian, at the direction of the Trustee, shall request such representations
and agreements relating to the restrictions on transfer of such Note or Notes
from such transferee (or such transferee's nominee) substantially in the form as
set forth in Exhibit D hereto and as the Trustee (or the Custodian) may
otherwise reasonably require.
Any transfer of a definitive Note or Notes must be effected by the
delivery to the transferee (or its nominee) of a definitive Note or Notes
registered in the name of the transferee (or its nominee) on the books
maintained by the Trustee. With respect to any such transfer, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the transferee (or such transferee's nominee, as the case may be), a definitive
Note or Notes in the appropriate aggregate principal amount in the name of such
transferee (or its nominee) and bearing such restrictive legends as may be
required by this Indenture. As a condition to such transfer, if such transfer
is made to an Accredited Investor, the Trustee or the Custodian, at the
direction of the Trustee, shall request such representations and agreements
relating to the restrictions on transfer of such Note or Notes from such
transferee (or such transferee's nominee) substantially in the form as set forth
in Exhibit D hereto and as the Trustee (or the Custodian) shall otherwise
reasonably require.
(c) So long as the Notes are eligible for book-entry settlement, or
unless otherwise required by law, upon any transfer of a definitive Note to a
QIB in accordance with Rule 144A, unless otherwise requested by the transferor,
and upon receipt of the definitive Note or Notes being so transferred, together
with a certificate in the form of Exhibit E hereto from the transferor that the
transferor reasonably believes the transferee is a QIB and is obtaining such
beneficial interest in a transaction meeting the requirements of Rule 144A and
any applicable securities laws of any state of the United States or any other
jurisdiction (or other evidence satisfactory to the Trustee), the Trustee shall
make or direct the Custodian to make an endorsement on the Restricted Global
Note to reflect an increase in the aggregate principal amount of the Notes
represented by the Restricted Global Note, the Trustee shall cancel such
definitive Note or Notes and cause, or direct the Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Custodian, the aggregate principal amount of Notes
represented by the Restricted Global Note to be increased accordingly.
So long as the Notes are eligible for book-entry settlement, or
unless otherwise required by law, upon any transfer of a definitive Note in
accordance with Regulation S, if requested by the transferor, and upon receipt
of the definitive Note or Notes being so transferred, together with a
certificate in the form of Exhibit F hereto from the transferor that the
transfer was made in accordance with Rule 903 or 904 of Regulation S under the
Securities Act (or other evidence satisfactory to the Trustee), the Trustee
shall make or direct the Custodian to make an endorsement on the Regulation S
Global Note to reflect an increase in the aggregate principal amount of the
Notes represented by the Regulation S Global Note, the Trustee shall cancel such
definitive Note or Notes and cause, or direct the Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Custodian, the aggregate principal amount of Notes
represented by the Regulation S Global Note to be increased accordingly.
If a holder of a beneficial interest in the Restricted Global Note
wishes at any time to exchange its interest in the Restricted Global Note for an
interest in the Regulation S Global Note, or to transfer its interest in the
Restricted Global Note to a person who wishes to take delivery thereof in the
form of an interest in the Regulation S Global Note, such holder may, subject to
the rules and procedures of the Depositary and to the requirements set forth in
the following sentence, exchange or cause the exchange or transfer or cause the
transfer of such interest for an equivalent beneficial interest in the
Regulation S Global Note. Upon receipt by the Trustee, as Note registrar, of
(1) instructions given in accordance with the Depositary's procedures from or on
behalf of a holder of a beneficial interest in the Restricted Global Note,
directing the Trustee (via DWAC), as Note registrar, to credit or cause to be
credited a beneficial interest in the Regulation S Global Note in an amount
equal to the beneficial interest in the Restricted Global Note to be exchanged
or transferred, (2) a written order given in accordance with the Depositary's
procedures containing information regarding the Euroclear or Cedel account to be
credited with such increase and the name of such account, and (3) a certificate
in the form of Exhibit G given by the holder of such beneficial interest stating
that the exchange or transfer of such interest has been made pursuant to and in
accordance with Rule 903 or Rule 904 of Regulation S under the Securities Act
(or other evidence satisfactory to the Trustee), the Trustee, as Note registrar,
shall promptly deliver appropriate instructions to the Depositary (via DWAC),
its nominee, or the custodian for the Depositary, as the case may be, to reduce
or reflect on its records a reduction of the Restricted Global Note by the
aggregate principal amount of the beneficial interest in such Restricted Global
Note to be so exchanged or transferred from the relevant participant, and the
Trustee, as transfer agent, shall promptly deliver appropriate instructions (via
DWAC) to the Depositary, its nominee, or the custodian for the Depositary, as
the case may be, concurrently with such reduction, to increase or reflect on its
records an increase of the principal amount of such Regulation S Global Note by
the aggregate principal amount of the beneficial interest in such Restricted
Global Note to be so exchanged or transferred, and to credit or cause to be
credited to the account of the person specified in such instructions (who shall
be Morgan Guaranty Trust Company of New York, Brussels office, as operator of
Euroclear or Cedel or another agent member of Euroclear or Cedel, or both, as
the case may be, acting for and on behalf of them) a beneficial interest in such
Regulation S Global Note equal to the reduction in the principal amount of such
Restricted Global Note.
If a holder of a beneficial interest in the Regulation S Global Note
wishes at any time to exchange its interest in the Regulation S Global Note for
an interest in the Restricted Global Note, or to transfer its interest in the
Regulation S Global Note to a person who wishes to take delivery thereof in the
form of an interest in the Restricted Global Note, such holder may, subject to
the rules and procedures of Euroclear or Cedel and the Depositary, as the case
may be, and to the requirements set forth in the following sentence, exchange or
cause the exchange or transfer or cause the transfer of such interest for an
equivalent beneficial interest in such Restricted Global Note. Upon receipt by
the Trustee, as transfer agent, of (l) instructions given in accordance with the
procedures of Euroclear or Cedel and the Depositary, as the case may be, from or
on behalf of a beneficial owner of an interest in the Regulation S Global Note
directing the Trustee, as transfer agent, to credit or cause to be credited a
beneficial interest in the Restricted Global Note in an amount equal to the
beneficial interest in the Regulation S Global Note to be exchanged or
transferred, (2) a written order given in accordance with the procedures of
Euroclear or Cedel and the Depositary, as the case may be, containing
information regarding the account with the Depositary to be credited with such
increase and the name of such account, and (3) prior to the expiration of the
Restricted Period, a certificate in the form of Exhibit H given by the holder of
such beneficial interest and stating that the person transferring such interest
in such Regulation S Global Note reasonably believes that the person acquiring
such interest in the Restricted Global Note is a QIB and is obtaining such
beneficial interest in a transaction meeting the requirements of Rule 144A and
any applicable securities laws of any state of the United States or any other
jurisdiction (or other evidence satisfactory to the Trustee), the Trustee, as
transfer agent, shall promptly deliver (via DWAC) appropriate instructions to
the Depositary, its nominee, or the custodian for the Depositary, as the case
may be, to reduce or reflect on its records a reduction of the Regulation S
Global Note by the aggregate principal amount of the beneficial interest in such
Regulation S Global Note to be exchanged or transferred, and the Trustee, as
transfer agent, shall promptly deliver (via DWAC) appropriate instructions to
the Depositary, its nominee, or the custodian for the Depositary, as the case
may be, concurrently with such reduction, to increase or reflect on its records
an increase of the principal amount of the Restricted Global Note by the
aggregate principal amount of the beneficial interest in the Regulation S Global
Note to be so exchanged or transferred, and to credit or cause to be credited to
the account of the person specified in such instructions a beneficial interest
in the Restricted Global Note equal to the reduction in the principal amount of
the Regulation S Global Note. After the expiration of the Restricted Period,
the certification requirement set forth in clause (3) of the second sentence of
this paragraph shall no longer apply to such exchanges and transfers.
If a holder of a definitive Note wishes at any time to exchange its
Note for a beneficial interest in any global Note (or vice versa), or to
transfer its definitive Note to a person who wishes to take delivery thereof in
the form of a beneficial interest in a global Note (or vice versa), such Notes
and beneficial interests may be exchanged or transferred for one another only in
accordance with such procedures as are substantially consistent with the
provisions of the two preceding paragraphs (including the certification
requirements intended to ensure that such exchanges or transfers comply with
Rule 144, Rule 144A or Regulation S, as the case may be) and as may be from time
to time adopted by the Company and the Trustee.
Any beneficial interest in one of the global Notes that is
transferred to a person who takes delivery in the form of an interest in the
other global Note shall, upon transfer, cease to be an interest in such global
Note and become an interest in the other global Note and, accordingly, shall
thereafter be subject to all transfer restrictions and other procedures
applicable to beneficial interests in such other global Note for as long as it
remains such an interest.
Any global Note may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the provisions
of this Indenture as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Notes to be
tradeable on the PORTAL Market or as may be required for the Notes to be
tradeable on any market developed for trading of securities pursuant to Rule
144A or required to comply with any applicable law or any regulation thereunder
or with Regulation S or with the rules and regulations of any securities
exchange upon which the Notes may be listed or traded or to conform with any
usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular Notes are subject.
(e) Every Note that bears or is required under this Section 2.5(d)
to bear the legend set forth in this Section 2.5(d) (together with any Common
Stock issued upon conversion of the Notes and required to bear the legend set
forth in Section 2.5(e), collectively, the "Restricted Securities") shall be
subject to the restrictions on transfer set forth in this Section 2.5(d), unless
such restrictions on transfer shall have been waived by the written consent of
the Company or removed in accordance with the provisions of Section 2.5(f), and
the holder of each such Restricted Security, by such holder's acceptance
thereof, agrees to be bound by such restrictions on transfer. As used in this
Section 2.5(d), the term "transfer" encompasses any sale, pledge, transfer or
other disposition of any Restricted Security.
Until three years after the later of the original issuance date of
any Note (other than any Note represented by the Regulation S Global Note) and
the last date on which the Company or an Affiliate of the Company was the owner
of such Note, any certificate evidencing such Note (and all securities issued in
exchange therefor or substitution thereof, other than Common Stock, if any,
issued upon conversion thereof, which shall bear the legend set forth in Section
2.5(e), if applicable) shall bear a legend in substantially the following form,
unless otherwise agreed by the Company (with notice thereof to the Trustee):
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR"); (2) AGREES THAT IT WILL NOT PRIOR TO THE DATE THAT IS THREE YEARS
AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY AND THE
LAST DATE ON WHICH NINE WEST GROUP INC. (THE "COMPANY") OR ANY "AFFILIATE" (AS
DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY WAS THE OWNER OF
THE NOTE (THE "RESTRICTION TERMINATION DATE") RESELL OR OTHERWISE TRANSFER THE
NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO CHEMICAL BANK, AS TRUSTEE, A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 903 OR RULE 904
OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT; AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTE
EVIDENCED HEREBY BEFORE THE RESTRICTION TERMINATION DATE, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO CHEMICAL BANK, AS TRUSTEE. IF THE
PROPOSED TRANSFER IS PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO CHEMICAL BANK, AS TRUSTEE, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE
RESTRICTION TERMINATION DATE AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION
S UNDER THE SECURITIES ACT.
Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms may, upon satisfaction of the requirements of Section 2.5(f) and
surrender of such Note for exchange to the Note registrar in accordance with the
provisions of this Section 2.5, be exchanged for a new Note or Notes, of like
tenor and aggregate principal amount, which shall not bear the restrictive
legend required by this Section 2.5(d).
Notwithstanding any other provisions of this Indenture (other than
the provisions set forth in this Section 2.5(d)), a global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to
act as Depositary with respect to the global Notes. Initially, the global Notes
shall be issued to the Depositary, registered in the name of Cede & Co., as the
nominee of the Depositary, and deposited with the Trustee as Custodian for Cede
& Co.
If at any time the Depositary for the global Notes notifies the
Company that it is unwilling or unable to continue as Depositary for such Notes,
the Company may appoint a successor Depositary with respect to such Notes. If a
successor Depositary for the Notes is not appointed by the Company within 90
days after the Company receives such notice, the Company shall execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
Notes, shall authenticate and make available for delivery, Notes in definitive
form, in an aggregate principal amount equal to the principal amount of the
global Notes in exchange for such global Notes.
Definitive Notes issued in exchange for all or a part of a global
Note pursuant to this Section 2.5(d) shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to instructions from
its direct or indirect participants or otherwise, shall instruct the Trustee.
Upon execution and authentication, the Trustee shall make available for delivery
such definitive Notes to the persons in whose names such definitive Notes are so
registered.
At such time as all interests in global Notes have been redeemed,
converted, repurchased or canceled, such global Notes shall be canceled by the
Custodian in accordance with standing procedures and instructions existing
between the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in a global Note is exchanged for definitive
Notes, redeemed, converted, canceled or transferred to a transferee who receives
definitive Notes therefor or any definitive Note is exchanged or transferred for
part of a global Note, the principal amount of such global Note shall, in
accordance with the standing procedures and instructions existing between the
Depositary and the Custodian, be reduced or increased, as the case may be, and
an endorsement shall be made on such global Note by the Trustee or the
Custodian, at the direction of the Trustee, to reflect such reduction or
increase.
The Company and the Trustee may for all purposes, including the
making of payments due on the Notes, deal with the Depositary as the authorized
representative of the Noteholders for the purposes of exercising the rights of
Noteholders hereunder. The rights of the owner of any beneficial interest in a
global Note shall be limited to those established by law and agreements between
such owners and depository participants or Euroclear and Cedel; provided that no
such agreement shall give any rights to any person against the Company or the
Trustee without the written consent of the parties so affected. Multiple
requests and directions from and votes of, the Depositary as holder of notes in
book entry form with respect to any particular matter shall not be deemed
inconsistent to the extent they do not represent an amount of notes in excess of
those held in the name of the Depositary or its nominee.
(f) Until three years after the later of the original issuance date
of any Note (other than any Note represented by the Regulation S Global Note)
and the last date on which the Company or an Affiliate of the Company was the
owner of such Note, any stock certificate representing Common Stock issued upon
conversion of such Note shall bear a legend in substantially the following form,
unless otherwise agreed by the Company (with written notice thereof to the
Trustee and any transfer agent for the Common Stock):
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT PRIOR TO THE DATE THAT IS
THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THE NOTE UPON THE
CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED AND THE LAST
DATE ON WHICH NINE WEST GROUP INC. (THE "COMPANY") OR ANY "AFFILIATE" (AS
DEFINED IN RULE 144 OF THE SECURITIES ACT) OF THE COMPANY WAS THE OWNER OF THE
NOTE UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED
OR THE COMMON STOCK EVIDENCED HEREBY (THE "RESTRICTION TERMINATION DATE"), (1)
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY
EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) THAT PRIOR TO SUCH TRANSFER, FURNISHES TO CHASE MELLON
SHAREHOLDER SERVICES, AS TRANSFER AGENT, A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRANSFER AGENT), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 903
OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (E) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT; (2) PRIOR TO ANY SUCH TRANSFER
PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE, IT WILL FURNISH TO CHASE MELLON
SHAREHOLDER SERVICES, AS TRANSFER AGENT, SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS THE COMPANY MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (3) IT WILL
DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE
REMOVED UPON THE SATISFACTION OF THE TRANSFER AGENT THAT THE COMMON STOCK
EVIDENCED HEREBY HAS BEEN OR IS BEING OFFERED AND SOLD PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR IN ACCORDANCE WITH RULE 144 OR RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms may, upon satisfaction of the
requirements of Section 2.5(f) and surrender of the certificates representing
such shares of Common Stock for exchange in accordance with the procedures of
the transfer agent for the Common Stock, be exchanged for a new certificate or
certificates for a like aggregate number of shares of Common Stock, which shall
not bear the restrictive legend required by this Section 2.5(e).
(g) Upon any sale or transfer of any Restricted Security (including
any interest in a global Note) (i) that is effected pursuant to an effective
registration statement under the Securities Act, (ii) in the case of the Common
Stock only, that is effected pursuant to Rule 144 as promulgated under the
Securities Act as determined by counsel to the Company or the Transfer Agent or
(iii) in connection with which the Trustee (or transfer agent for the Common
Stock, in the case of shares of Common Stock) receives certificates and other
information (including an Opinion of Counsel, if requested) reasonably
acceptable to the Company and the Trustee (or such transfer agent, as the case
may be) to the effect that such security shall no longer be subject to the
resale restrictions under federal and state securities laws, then (A) in the
case of a Restricted Security in definitive form, the Note registrar or
co-registrar (or transfer agent, in the case of Common Stock) shall permit the
holder thereof to exchange such Restricted Security for a security that does not
bear the legends set forth in Section 2.5(d) or 2.5(e), as applicable, and shall
rescind any such restrictions on transfer and (B) in the case of Restricted
Securities represented by a global Note, such Note shall no longer be subject to
the restrictions contained in the legend set forth in Section 2.5(d) (but still
subject to the other provisions hereof). In addition, any Note (or security
issued in exchange or substitution therefor) or shares of Common Stock issued
upon conversion of any Note, in either case, as to which the restrictions on
transfer described in the legends set forth in Section 2.5(d) and 2.5(e),
respectively, have expired by their terms, may, upon surrender thereof (in
accordance with the terms of this Indenture in the case of Notes) together with
such certifications and other information (including an Opinion of Counsel
having substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Company, addressed to the Company and the Trustee
(or Transfer Agent) and in a form acceptable to the Company, to the effect that
the transfer of such Restricted Security has been made in compliance with Rule
144 or such successor provision) acceptable to the Company and the Trustee (or
Transfer Agent, as the case may be) as either of them may reasonably require, be
exchanged for a new Note or Notes of like tenor and aggregate principal amount
(in the case of Notes), or a new certificate or certificates for a like
aggregate number of shares of Common Stock (in the case of Common Stock), or a
new certificate or other instrument of like tenor and amount (in the case of
securities issued in exchange or substitution for Notes), which shall not bear
the restrictive legends set forth in Sections 2.5(d) and 2.5(e).
(h) Each holder of a Note agrees to indemnify the Company and the
Trustee (or the Transfer Agent, as the case may be) against any liability that
may result from the transfer, exchange or assignment of such holder's Note in
violation of any provision of this Indenture and/or applicable U.S. federal or
state securities law.
2.6. Mutilated, Destroyed, Lost or Stolen Notes. In case any Note
shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon a Company Order, the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery a new Note bearing a number not contemporaneously
outstanding in exchange and substitution for the mutilated Note or in lieu of
and in substitution for the Note so destroyed, lost or stolen. The Company may
charge such applicant for the expenses of the Company in replacing a Note. In
every case the applicant for a substituted Note shall furnish to the Company, to
the Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless from any
loss, liability, cost or expense caused by or connected with such substitution,
and in every case of destruction, loss or theft, the applicant shall also
furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such authenticating
agent may require. Upon the issuance of any substituted Note, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith. In case any Note
that has matured or is about to mature or has been called for redemption or is
about to be converted into Common Stock shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Note, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof, except in the case of a mutilated Note), as the case
may be, if the applicant for such payment or conversion shall furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
from any loss, liability, cost or expense caused by or connected with such
substitution, and in case of destruction, loss or theft, evidence satisfactory
to the Company, the Trustee and, if applicable, any paying agent or conversion
agent of the destruction, loss or theft of such Note and of the ownership
thereof.
Every substitute Note issued pursuant to the provisions of this
Section 2.6 in lieu of any Note that is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be enforceable by anyone, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
2.7. Temporary Notes. Pending the preparation of definitive Notes,
the Company may execute and the Trustee or an authenticating agent appointed by
the Trustee shall, upon a Company Order, authenticate and deliver temporary
Notes (printed or lithographed). Temporary Notes shall be issuable in any
authorized denomination and shall be substantially in the form of the definitive
Notes but with such omissions, insertions and variations as may be appropriate
for temporary Notes, all as may be determined by the Company. Every such
temporary Note shall be executed by the Company and authenticated by the Trustee
or such authenticating agent upon the same conditions and in substantially the
same manner, and with the same effect, as the definitive Notes. Without
unreasonable delay the Company shall execute and deliver to the Trustee or such
authenticating agent definitive Notes (other than in the case of global Notes)
and thereupon any or all temporary Notes (other than any such global Note) may
be surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 4.2 and the Trustee or such authenticating agent
shall authenticate and make available for delivery in exchange for such
temporary Notes an equal aggregate principal amount of definitive Notes. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as definitive Notes authenticated and delivered hereunder.
2.8. Cancellation of Notes Paid, Etc. All Notes surrendered for the
purpose of payment, redemption, conversion, exchange or registration of transfer
shall, if surrendered to the Company or any paying agent or any Note registrar
or any conversion agent, be surrendered to the Trustee and promptly canceled by
it or, if surrendered to the Trustee, shall be promptly canceled by it and no
Notes shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Indenture. The Trustee shall destroy all cancelled
Notes, and a certification of their destruction shall be delivered to the
Company, unless by a Company Order the Company directs that the canceled Notes
be returned to it. If the Company shall acquire any of the Notes, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Notes unless and until the same are delivered
to the Trustee for cancellation.
2.9. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE 3.
REDEMPTION OF NOTES
3.1. Redemption Prices. The Notes are not redeemable at the option
of the Company prior to July 16, 1999. At any time on or after that date, the
Notes may be redeemed at the Company's option, upon notice as set forth in
Section 3.2, in whole at any time or in part from time to time, at the optional
redemption prices set forth below plus accrued and unpaid interest thereon to
the applicable redemption date if redeemed during the twelve-month period
beginning:
Redemption
Date Price
---- ----------
July 16, 1999.......................... 102.75%
July 15, 2000.......................... 101.83%
July 15, 2001.......................... 100.92%
July 15, 2002 and thereafter........... 100%
3.2. Notice of Redemption; Selection of Notes. In case the Company
shall desire to exercise the right to redeem all or, as the case may be, any
part of the Notes pursuant to Section 3.1, it shall fix a date for redemption
and, in the case of any redemption pursuant to Section 3.1, the Company or, at
its request accompanied by the proposed form of notice of redemption (which must
be received by the Trustee at least ten days prior to the date the Trustee is
requested to give notice as described below, unless a shorter period is agreed
to by the Trustee), the Trustee in the name of and at the expense of the
Company, shall mail or cause to be mailed a notice of such redemption at least
30 and not more than 60 days prior to the date fixed for redemption to the
holders of Notes so to be redeemed as a whole or in part at their last addresses
as the same appear on the Note register, provided that if the Company shall give
such notice, it shall also give such notice, and notice of the Notes to be
redeemed, to the Trustee. Such mailing shall be by first class mail. The
notice, if mailed in the manner herein provided, shall be conclusively presumed
to have been duly given, whether or not the holder receives such notice. In any
case, failure to give such notice by mail or any defect in the notice to the
holder of any Note designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other Note.
Each such notice of redemption shall identify the Notes to be
redeemed (including CUSIP numbers) and shall specify:
(i) the aggregate principal amount of Notes to be redeemed;
(ii) the date fixed for redemption,;
(iii) the redemption price at which Notes are to be redeemed;
(iv) the place or places of payment;
(v) that payment shall be made upon presentation and surrender
of such Notes;
(vi) that interest accrued to the date fixed for redemption
shall be paid as specified in said notice;
(vii) that on and after said date, interest thereon or on the
portion thereof to be redeemed shall cease to accrue;
(viii) the current Conversion Price;
(ix) the date on which the right to convert such Notes or
portions thereof into Common Stock shall expire;
(x) if fewer than all the Notes are to be redeemed, the notice
of redemption shall identify the Notes to be redeemed;
(xi) if any Note is to be redeemed in part only, the portion of
the principal amount thereof to be redeemed, and that on and after the date
fixed for redemption, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof shall be issued; and
(xii) if the Company chooses to deliver cash in lieu of common
shares, the notice of redemption shall state such decision and describe the
method of determination for calculating the cash amount.
On or prior to the Business Day prior to the redemption date
specified in the notice of redemption given as provided in this Section 3.2, the
Company shall deposit with the Trustee or with one or more paying agents (or, if
the Company is acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 4.4) an amount of money sufficient to redeem on the
redemption date all the Notes so called for redemption (other than those
theretofore surrendered for conversion into Common Stock) at the appropriate
redemption price, together with accrued interest to the date fixed for
redemption. If any Note called for redemption is converted pursuant hereto, any
money deposited with the Trustee or any paying agent or so segregated and held
in trust for the redemption of such Note shall be paid to the Company upon a
Company Order or, if then held by the Company, shall be discharged from such
trust. If fewer than all the Notes are to be redeemed, the Company shall give
the Trustee written notice in the form of an Officers' Certificate not fewer
than 45 days (or such shorter period of time as may be acceptable to the
Trustee) prior to the redemption date as to the aggregate principal amount of
Notes to be redeemed.
If fewer than all the Notes are to be redeemed, the Trustee shall
select the Notes or portions thereof to be redeemed (in principal amounts of
$1,000 or integral multiples thereof), by such method as the Trustee shall deem
fair and appropriate. If any Note selected for partial redemption is converted
in part after such selection, the converted portion of such Note shall be deemed
(so far as may be) to be the portion to be selected for redemption. The Notes
(or portions thereof) so selected shall be deemed duly selected for redemption
for all purposes hereof, notwithstanding that any such Note is converted as a
whole or in part before the mailing of the notice of redemption.
Upon any redemption of less than all Notes, the Company and the
Trustee may treat as outstanding any Notes surrendered for conversion during the
period beginning at the opening of business 15 days next preceding the mailing
of a notice of redemption and ending at the close of business on the day of such
mailing and need not treat as outstanding any Note authenticated and delivered
during such period in exchange for the unconverted portion of any Note converted
in part during such period.
3.3. Payment of Notes Called for Redemption. If notice of
redemption has been given as above provided, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date and at
the place or places stated in such notice at the applicable redemption price,
together with interest thereon accrued to the date fixed for redemption, and on
and after said date (unless the Company shall default in the payment of such
Notes at the redemption price, together with interest thereon accrued to said
date), interest on the Notes or portion of Notes so called for redemption shall
cease to accrue, and such Notes shall cease immediately prior to the close of
business on the date fixed for redemption to be convertible into Common Stock
and, except as provided in Sections 7.6 and 12.4, to be entitled to any benefit
or security under this Indenture, and the holders thereof shall have no right in
respect of such Notes except the right to receive the redemption price thereof
and unpaid interest thereon to the date fixed for redemption. On presentation
and surrender of such Notes at a place of payment in said notice specified, the
said Notes or the specified portions thereof shall be paid and redeemed by the
Company at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption; provided that if the date fixed for
redemption falls during the period ending on a regular interest payment date and
beginning on the relevant record date, any semi-annual payment of interest
during that period shall be payable to the holders of such Notes registered as
such on the relevant record date subject to the terms and provisions of Section
2.3 hereof.
Upon presentation of any Note redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes
or mail any notice of optional redemption during the continuance of a default in
payment of interest or premium on the Notes or of any Event of Default of which,
in the case of any Event of Default other than under Section 6.1(a) or (b), a
Responsible Officer of the Trustee has actual knowledge. If any Note called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal and premium, if any, shall, until paid or duly provided for, bear
interest from the date fixed for redemption at the rate borne by the Note and
such Note shall remain convertible into Common Stock until the principal and
premium, if any, shall have been paid or duly provided for.
3.4. Conversion Arrangement on Call for Redemption. In connection
with any redemption of Notes, the Company may arrange for the purchase and
conversion of any Notes by an agreement with one or more investment bankers or
other purchasers to purchase such Notes by irrevocably paying to the Trustee in
trust for the Noteholders, on or prior to the Business Day prior to the date
fixed for redemption, an amount not less than the applicable redemption price,
together with interest accrued to the date fixed for redemption, of such Notes.
Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the redemption price of such Notes, together
with interest accrued to the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so irrevocably paid by
such investment bankers or purchasers. If such an agreement is entered into, a
copy of which shall be filed with the Trustee prior to the date fixed for
redemption, any Notes not duly surrendered for conversion by the holders thereof
may, at the option of the Company, be deemed, to the fullest extent permitted by
law, acquired by such purchasers from such holders and (notwithstanding anything
to the contrary contained in Article 14) surrendered by such purchasers for
conversion, all as of the time immediately prior to the close of business on the
date fixed for redemption (and the right to convert any such Notes shall be
deemed to have been extended through such time), subject to payment of the above
amount as aforesaid. At the direction of the Company, the Trustee shall hold
and dispose of any such amount paid to it in the same manner as it would monies
deposited with it by the Company for the redemption of Notes. Without the
Trustee's prior written consent, no arrangement between the Company and such
investment bankers or purchasers for the purchase and conversion of any Notes
shall increase or otherwise affect any of the powers, duties, responsibilities
or obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any Notes between the Company and such
investment bankers or purchasers including the costs and expenses incurred by
the Trustee in the defense of any claim or liability arising out of or in
connection with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.
3.5. Purchase of Notes Upon a Change of Control.
(a) If a Change of Control shall occur at any time, then each holder
of Notes shall have the right to require that the Company repurchase such
holder's Notes in whole or in part in integral multiples of $1,000 at a purchase
price (the "Change of Control Purchase Price") in cash in an amount equal to
101% of the principal amount of such Notes, plus accrued and unpaid interest
thereon, if any, to the purchase date (the "Change of Control Purchase Date")
pursuant to the offer described below (the "Change of Control Offer") and in
accordance with the other procedures set forth in this Indenture.
(b) Within 30 days following any Change of Control, the Company
shall notify the Trustee thereof and give written notice of such Change of
Control to each holder of Notes, by first-class mail, postage prepaid, at the
Noteholder's address appearing in the Note register, stating, among other
things:
(i) that a Change of Control has occurred;
(ii) the Change of Control Purchase Price;
(iii) the Change of Control Purchase Date (which shall be a
Business Day no earlier than 30 days nor later than 60 days from the date
such notice is mailed, or such later date as is necessary to comply with
requirements under the Exchange Act);
(iv) that any Note not tendered shall continue to accrue
interest and to have all of the benefits of this Indenture;
(v) that, unless the Company defaults in the payment of the
Change of Control Purchase Price, any Notes accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Purchase Date;
(vi) that Noteholders electing to have any Notes purchased
pursuant to a Change of Control Offer shall be required to surrender the Notes,
with the form entitled "Option to Elect Repayment Upon Change of Control" on the
reverse of the Notes completed, to the Trustee at the address specified in the
notice prior to the close of business on the third Business Day preceding the
Change of Control Purchase Date;
(vii) that Noteholders shall be entitled to withdraw their
election if the Trustee receives, not later than the close of business on the
second Business Day preceding the Change of Control Purchase Date, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Noteholder, the principal amount of Notes delivered for purchase, and a
statement that such Noteholder is withdrawing his election to have such Notes
purchased; and
(viii) that Noteholders whose Notes are being purchased only in
part shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof. The Company shall
comply with the requirements of Rule 13c-4 and 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes in
connection with a Change of Control.
(c) On the Change of Control Purchase Date, the Company shall, to the
extent lawful, (i) accept for payment Notes or portions thereof validly tendered
and not withdrawn pursuant to the Change of Control Offer, (ii) deposit with the
Trustee an amount equal to the Change of Control Purchase Price in respect of
all Notes or portions thereof so tendered and not withdrawn and (iii) deliver or
cause to be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof tendered to the
Company. The Trustee shall promptly mail to each Noteholder of Notes so
accepted payment in an amount equal to the Change of Control Purchase Price of
such Notes, and the Trustee shall promptly authenticate and mail to each
Noteholder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note shall be in a
principal amount of $1,000 or an integral multiple thereof. The Company shall
notify holders of Notes of the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Payment Date.
ARTICLE 4.
PARTICULAR COVENANTS OF THE COMPANY
4.1. Payment of Principal, Premium and Interest. The Company
covenants and agrees that it shall duly and punctually pay or cause to be paid
the principal of and premium, if any, and interest on each of the Notes at the
places, at the respective times and in the manner provided herein and in the
Notes. Each installment of interest on the Notes due on any semi-annual
interest payment date may be paid by mailing checks for the interest payable to
or upon the written order of the holders of Notes entitled thereto as they shall
appear on the Note register; provided that, with respect to any holder of Notes
with an aggregate principal amount equal to or in excess of $5,000,000, at the
request (such request to include appropriate wire instructions) of such holder
in writing to the Trustee, interest on such holder's Notes shall be paid by wire
transfer in immediately available funds. An installment of principal, premium,
if any, or interest shall be considered paid on the date due if the Trustee or
Paying Agent (other than the Company, a Subsidiary of the Company or any
Affiliate of any of them) holds on that date money irrevocably deposited
therewith and designated for and sufficient to pay the installment of principal
or interest and is not prohibited from paying such money to the holders of the
Notes pursuant to the terms of this Indenture.
4.2. Maintenance of Office or Agency. The Company shall maintain in
the Borough of Manhattan, The City of New York, an office or agency where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes. The Company shall give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent,
Note registrar and conversion agent and each of the Corporate Trust Office of
the Trustee and the office of Chemical Bank in the Borough of Manhattan, The
City of New York, as one such office or agency of the Company for the purposes
set forth in the first paragraph of this Section 4.2.
So long as the Trustee is the Note registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 7.11(a) and the
third paragraph of Section 7.12.
4.3. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
shall appoint, in the manner provided in Section 7.11, a Trustee, so that there
shall at all times be a Trustee hereunder.
4.4. Provisions as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the
Trustee, or if the Trustee shall appoint such a paying agent, the Company or the
Trustee, as the case may be, shall cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 4.4:
(i) that it shall hold all sums held by it as such agent for the
payment of the principal of, premium, if any, or interest on the Notes (whether
such sums have been paid to it by the Company or by any other obligor on the
Notes) in trust for the benefit of the holders of the Notes;
(ii) that it shall give the Trustee notice of any failure by the
Company (or by any other obligor on the Notes) to make any payment of the
principal of, premium, if any, or interest on the Notes when the same shall be
due and payable; and
(iii) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it shall forthwith pay to the Trustee all
sums so held in trust.
The Company shall, before each due date of the principal of, premium,
if any, or interest on the Notes, deposit with the paying agent a sum sufficient
to pay such principal, premium, if any, or interest, and (unless such paying
agent is the Trustee) the Company shall promptly notify the Trustee of any
failure to take such action.
(b) If the Company shall act as its own paying agent, it shall, on or
before each due date of the principal of, premium, if any, or interest on the
Notes, set aside, segregate and hold in trust for the benefit of the holders of
the Notes a sum sufficient to pay such principal, premium, if any, or interest
so becoming due and shall notify the Trustee of any failure to take such action
and of any failure by the Company (or any other obligor under the Notes) to make
any payment of the principal of, premium, if any, or interest on the Notes when
the same shall become due and payable.
(c) Anything in this Section 4.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company as paying agent, or any other
paying agent hereunder as required by this Section 4.4, such sums to be held by
the Trustee upon the trusts herein contained and upon such payment by the
Company as paying agent or any paying agent to the Trustee, the Company as
paying agent or such paying agent shall be released from all further liability
with respect to such sums.
(d) Anything in this Section 4.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 4.4 is subject to
Sections 12.3 and 12.4.
4.5. Corporate Existence. Subject to Article 11, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence.
4.6. Rule 144A Information Requirement. During the three-year
period following the original issuance date of any Note and during the
three-year period following the last date on which the Company or an Affiliate
of the Company was the owner of any Note (or shares of Common Stock issued upon
conversion of any Note), if the Company is subject neither to Section 13 nor
Section 15(d) of the Exchange Act, the Company shall at the written request of
any holder or beneficial holder of such Note (or shares of Common Stock issued
upon conversion of Notes) provide to such holder or beneficial holder of such
Note (or shares of Common Stock issued upon conversion of Notes) and any
prospective transferee designated by such holder or beneficial holder of such
Note (or shares of Common Stock issued upon conversion of Notes) such
information, if any, required by Rule 144A(d)(4) under the Securities Act (so
long as such information is required to permit such transfer under Rule 144A).
4.7. Stay, Extension and Usury Laws. The Company covenants (to the
extent that it may lawfully do so) that it shall not at any time insist upon,
plead or in any manner whatsoever claim or take the benefit or advantage of, any
stay, extension or usury law or other law that would prohibit or forgive the
Company from paying all or any portion of the principal of or interest on the
Notes as contemplated herein, wherever enacted, now or at any time hereafter in
force, or that may affect the covenants or the performance of this Indenture;
and the Company (to the extent it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not, by
resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law has been enacted.
4.8. Compliance Statement; Notice of Defaults
(a) The Company shall deliver to the Trustee annually, commencing
June 30, 1997, a certificate, from its principal executive officer, principal
financial officer or principal accounting officer, stating whether or not to the
best knowledge of the signer thereof the Company is in compliance (without
regard to periods of grace or notice requirements) with all conditions and
covenants under this Indenture, and if the Company shall not be in compliance,
specifying such non-compliance and the nature and status thereof of which such
signer may have knowledge.
(b) The Company shall file with the Trustee written notice of the
occurrence of any default or Event of Default within ten days of its becoming
aware of any such default or Event of Default.
4.9. Taxes. The Company shall pay or discharge or cause to be paid
or discharged, before the same shall become delinquent, (i) all taxes,
assessments and governmental charges (including withholding taxes and any
penalties, interest and additions to taxes) levied or imposed upon the Company
or its subsidiaries or upon the income, profits or property of the Company or
any such subsidiary, and (ii) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any such subsidiary; provided that the Company shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount, applicability or validity is being contested in
good faith by appropriate proceedings and for which disputed amounts adequate
reserves have been made.
4.10. Insurance. The Company shall provide, or cause to be
provided, for itself and its subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds customarily insured against
by corporations similarly situated and owning like properties, including, but
not limited to, products liability insurance and public liability insurance,
with reputable insurers or with the government of the United States of America
or an agency or instrumentality thereof, in such amounts with such deductibles
and by such methods as shall be determined in good faith by the Board of
Directors to be appropriate.
ARTICLE 5.
NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY
5.1. Noteholders' Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of holders of Notes and shall otherwise comply with Trust
Indenture Act Section 312(a). If the Trustee is not the Notes registrar, the
Company shall furnish to the Trustee on or before at least seven Business Days
preceding each interest payment date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee
reasonably may require of the names and addresses of holders of Notes, and the
Company shall otherwise comply with Trust Indenture Act Section 312(a).
5.2. Reports by Company. The Company shall deliver to the Trustee
within 15 days after it files the same with the Commission, copies of all
reports and information (or copies of such portions of any of the foregoing as
the Commission may by its rules and regulations prescribe), if any, which the
Company is required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act or pursuant to the immediately following sentence. So long
as at least $5,000,000 aggregate principal amount of Notes remain outstanding,
the Company shall file with the Commission such reports as may be required
pursuant to Section 13 of the Exchange Act in respect of a security registered
pursuant to Section 12 of the Exchange Act, regardless of whether the Company is
otherwise required to file such reports. If the Company is not subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act (or otherwise
required to file reports pursuant to the immediately preceding sentence), the
Company shall deliver to the Trustee, within 15 days after it would have been
required to file such information with the Commission were it required to do so,
annual and quarterly financial statements, including any notes thereto (and, in
the case of a fiscal year end, an auditors' report by an independent certified
public accounting firm of established national reputation), and a "Management's
Discussion and Analysis of Financial Condition and Results of Operations," in
each case substantially equivalent to that which it would have been required to
include in such quarterly or annual reports, information, documents or other
reports if it had been subject to the requirements of Section 13 or 15(d) of the
Exchange Act. The Company shall provide copies of the foregoing materials to
the Noteholders to the extent required by the Trust Indenture Act once this
Indenture has been qualified. The Company shall also comply with the other
provisions of Section 314(a) of the Trust Indenture Act.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE 6.
DEFAULTS AND REMEDIES
6.1 Events of Default. In case one or more of the following Events
of Default (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall have occurred and be continuing:
(a) default in the payment of the principal of or premium, if any, on
the Notes when due at maturity, upon redemption or otherwise, including failure
by the Company to purchase the Notes when required under Section 3.5 (whether or
not such payment shall be prohibited by the subordination provisions of this
Indenture); or
(b) default in the payment of any installment of interest on the
Notes as and when the same shall become due and payable (whether or not such
payment shall be prohibited by the subordination provisions of this Indenture),
and continuance of such default for a period of 30 days; or
(c) failure on the part of the Company duly to observe or perform any
other covenants or agreements on the part of the Company in this Indenture
(other than a default in the performance or breach of a covenant or agreement
that is specifically dealt with elsewhere in this Section 6.1) that continues
for a period of 90 days after the date on which written notice of such failure,
requiring the Company to remedy the same, shall have been given to the Company
by the Trustee, or to the Company and a Responsible Officer of the Trustee, by
the holders of at least 25% in aggregate principal amount of the Notes at the
time outstanding determined in accordance with Section 8.4; or
(d) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect, or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it or shall make a general assignment for the benefit of
creditors or shall fail generally to pay its debts as they become due; or
(e) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 90 consecutive days;
then, and in each and every such case, unless the principal of all of the Notes
shall have already become due and payable, either the Trustee or the holders of
not less than 25% in aggregate principal amount of the Notes then outstanding
hereunder determined in accordance with Section 8.4, by notice in writing to the
Company (and to the Trustee if given by Noteholders), may declare the principal
of, premium, if any, on the Notes and the interest accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 6.1(d) or (e) occurs and is continuing, the principal of all the Notes
and the interest accrued thereon shall be immediately due and payable. The
foregoing provision is subject to the conditions that if, at any time after the
principal of the Notes shall have been so declared due and payable, and before
any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all Notes and the principal of and premium, if any, on any and all
Notes that shall have become due otherwise than by acceleration (with interest
on overdue installments of interest (to the extent that payment of such interest
is enforceable under applicable law) and on such principal and premium, if any,
at the rate borne by the Notes, to the date of such payment or deposit) and
amounts due to the Trustee pursuant to Section 7.7, and if any and all defaults
under this Indenture, other than the nonpayment of principal of, premium, if
any, and accrued interest on Notes that shall have become due by acceleration,
shall have been cured or waived pursuant to Section 6.7, then and in every such
case the holders of a majority in aggregate principal amount of the Notes then
outstanding, by written notice to the Company and to the Trustee, may waive all
defaults or Events of Default and rescind and annul such declaration and its
consequences; but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or Event of Default, or shall impair any
right consequent thereto. The Company shall notify a Responsible Officer of the
Trustee, promptly upon becoming aware thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Notes and the Trustee shall be restored respectively
to their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes and the Trustee shall continue as
though no such proceeding had been taken.
6.2 Payments of Notes on Default; Suit Therefor. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Notes as and when the same shall become
due and payable, and such default shall have continued for a period of 30 days,
or (b) in case default shall be made in the payment of the principal of or
premium, if any, on any of the Notes as and when the same shall have become due
and payable, whether at maturity of the Notes or in connection with any
redemption or repurchase by declaration or otherwise, then, upon demand of the
Trustee, the Company shall pay to the Trustee, for the benefit of the holders of
the Notes, the whole amount that then shall have become due and payable on all
such Notes for principal premium, if any, or interest, or both, as the case may
be, with interest upon the overdue principal, premium, if any, and (to the
extent that payment of such interest is enforceable under applicable law) upon
the overdue installments of interest at the rate borne by the Notes; and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including reasonable compensation to the Trustee,
its agents, attorneys and counsel, and any expenses or liabilities incurred by
the Trustee hereunder other than through its negligence or bad faith. Until
such demand by the Trustee, the Company may pay the principal of and premium, if
any, and interest on the Notes to the registered holders, whether or not the
Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon
such demand, the Trustee, in its own name and as trustee of an express trust,
shall be entitled and empowered to institute any actions or proceedings at law
or in equity for the collection of the sums so due and unpaid and may prosecute
any such action or proceeding to judgment or final decree, and may enforce any
such judgment or final decree against the Company or any other obligor on the
Notes and collect in the manner provided by law out of the property of the
Company or any other obligor on the Notes wherever situated the monies adjudged
or decreed to be payable.
In the case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Company or any other obligor on the Notes under
Title 11 of the United States Code or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 6.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest owing and unpaid in respect of the Notes and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
of the Noteholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Notes, its or their creditors, or its or their
property and to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same after the deduction of
any amounts due the Trustee under Section 7.7; and any receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby authorized by each of the Noteholders to make such payments
to the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Noteholders, to pay to the Trustee any amount due
it under Section 7.7 up to the date of such distribution. To the extent that
such payment under Section 7.7 out of the estate in any such proceedings shall
be denied for any reason, payment of the same shall be secured by a lien on, and
shall be paid out of, any and all distributions, dividends, monies, securities
and other property that the holders of the Notes may be entitled to receive in
such proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Noteholder, or to authorize the Trustee to vote in respect of
the claim of any Noteholder in any such proceeding.
All rights of action and claims under this Indenture, or under any of
the Notes, may be prosecuted and enforced by the Trustee without the possession
of any of the Notes or the production thereof in any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all the
holders of the Notes, and it shall not be necessary to make any holders of the
Notes parties to any such proceedings.
6.3 Application of Monies Collected by Trustee. Any monies
collected by the Trustee pursuant to this Article 6 shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
First: To the payment of all amounts due the Trustee under Section
7.7;
Second: Subject to the provisions of Article 15, in case the
principal of the outstanding Notes shall not have become due and be unpaid, to
the payment of interest on the Notes in default in the order of the maturity of
the installments of such interest, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue installments of
interest at the rate borne by the Notes, such payments to be made ratably to the
persons entitled thereto; and
Third: Subject to the provisions of Article 15, in case the
principal of the outstanding Notes shall have become due, by declaration or
otherwise, and be unpaid, to the payment of the whole amount then due and unpaid
on the Notes for principal, premium, if any, and interest, with interest on the
overdue principal and premium, if any, and (to the extent that such interest has
been collected by the Trustee) upon overdue installments of interest at the rate
borne by the Notes; and in case such monies shall be insufficient to pay in full
the whole amounts so due and unpaid upon the Notes, then to the payment of such
principal, premium, if any, and interest without preference or priority of
principal and premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other installment of
interest, or of any Note over any other Note, ratably to the aggregate of such
principal and premium, if any, and accrued and unpaid interest.
6.4 Proceedings by Noteholder. No holder of any Note shall have any
right to institute any suit, action or proceeding in equity or at law upon or
under or with respect to this Indenture, or for the appointment of a receiver,
trustee, liquidator, custodian or other similar official, or for any other
remedy hereunder, unless such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than 25% in
aggregate principal amount of the Notes then outstanding shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding, and no direction inconsistent
with such written request shall have been given to the Trustee pursuant to
Section 6.7; it being understood and intended, and being expressly covenanted by
the taker and holder of every Note with every other taker and holder and the
Trustee, that no one or more holders of Notes shall have any right in any manner
whatever by virtue of or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of any other holder of Notes, to obtain
or seek to obtain priority over or preference to any other such holder or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all holders of Notes (except as
otherwise provided herein). For the protection and enforcement of this Section
6.4, each and every Noteholder and the Trustee shall be entitled to such relief
as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any
provision of any Note, the right of any holder of any Note to receive payment of
the principal of, premium, if any, and interest on such Note, on or after the
respective due dates expressed in such Note, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder
except as otherwise set forth herein.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in his own behalf and for his own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.
6.5 Proceedings by Trustee. In case of an Event of Default, the
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
6.6 Remedies Cumulative and Continuing. Except as provided in
Section 2.6, all powers and remedies given by this Article 6 to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of such powers and remedies or of any other powers and
remedies available to the Trustee or the holders of the Notes, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Notes to exercise any right or
power accruing upon any default or Event of Default occurring and continuing as
aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such default or any acquiescence therein; and, subject to the
provisions of Section 6.4, every power and remedy given by this Article 6 or by
law to the Trustee or to the Noteholders may be exercised from time to time, and
as often as shall be deemed expedient, by the Trustee or by the Noteholders.
6.7 Direction of Proceedings and Waiver of Defaults by Majority of
Noteholders. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding (determined in accordance with Section 8.4) shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee; provided that (a) such direction shall not be in
conflict with any rule of law or with this Indenture, (b) the Trustee may take
any other action deemed proper by the Trustee that is not inconsistent with such
direction and (c) such direction shall not expose the Trustee to personal
liability or be unduly prejudicial to Noteholders not joining therein. The
holders of a majority in aggregate principal amount of the Notes at the time
outstanding (determined in accordance with Section 8.4) may on behalf of the
holders of all of the Notes waive any past default or Event of Default hereunder
and its consequences except (i) a default in the payment of interest or premium,
if any, on, or the principal of, the Notes, (ii) a failure by the Company to
convert any Notes into Common Stock or (iii) a default in respect of a covenant
or provisions hereof that under Article 10 cannot be modified or amended without
the consent of the holders of all Notes then outstanding. Upon any such waiver,
the Company, the Trustee and the holders of the Notes shall be restored to their
former positions and rights hereunder; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon. Whenever any default or Event of Default hereunder shall have been
waived as permitted by this Section 6.7, said default or Event of Default shall
for all purposes of the Notes and this Indenture be deemed to have been cured
and to be not continuing; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
6.8 Notice of Defaults. The Trustee shall, within 90 days after the
occurrence of a default, mail to all Noteholders, as the names and addresses of
such holders appear upon the Note register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; and provided that, except in the case of default in
the payment of the principal of, premium, if any, or interest on any of the
Notes, the Trustee shall be protected in withholding such notice if and so long
as a trust committee of directors and/or Responsible Officers of the Trustee in
good faith determine that the withholding of such notice is in the interests of
the Noteholders.
6.9 Undertaking to Pay Costs. All parties to this Indenture agree,
and each holder of any Note by his acceptance thereof shall be deemed to have
agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; provided that the provisions of this Section 6.9
shall not apply to any suit instituted by the Trustee, to any suit instituted by
any Noteholder or group of Noteholders holding in the aggregate more than 10% in
principal amount of the Notes at the time outstanding determined in accordance
with Section 8.4 or to any suit instituted by any Noteholder for the enforcement
of the payment of the principal of, premium, if any, or interest on any Note on
or after the due date expressed in such Note or to any suit for the enforcement
of the right to convert any Note in accordance with the provisions of Article
14.
ARTICLE 7.
CONCERNING THE TRUSTEE
7.1 Duties and Responsibilities of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; provided that in
the case of any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be under
a duty to examine the same to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or investigate the accuracy
of mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph (c) does not limit the effect of paragraph
(b) of this Section 7.1;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.7.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 7.1.
(e) The Trustee may refuse to perform any duty or exercise any right
or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity satisfactory to it against any loss,
liability or expense.
7.2. Reports by Trustee to Holders. Within 60 days after each May 15
commencing with the May 15 following the date of this Indenture, the Trustee
shall, if required by the Trust Indenture Act, mail to each Noteholder a brief
report dated as of such May 15 that complies with Section 313(a) of the Trust
Indenture Act. The Trustee also shall comply with Sections 313(b) and 313(c) of
the Trust Indenture Act.
The Company shall promptly notify the Trustee in writing if the Notes
become listed or delisted on any stock exchange or automatic quotation system.
A copy of each report at the time of its mailing to Noteholders shall
be mailed to the Company and, to the extent required by Section 5.2 hereof and
Section 313(d) of the Trust Indenture Act, filed with the Commission and each
stock exchange, if any, on which the Notes are listed.
7.3. Reliance on Documents, Opinions, Etc. Except as otherwise
provided in Section 7.1:
(a) The Trustee may rely and shall be protected in acting upon or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture, coupon or
other paper or document believed by it in good faith to be genuine and to have
been signed or presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Company Order (unless other evidence
in respect thereof be herein specifically prescribed or required by the Trust
Indenture Act); and any resolution of the Board of Directors may be evidenced to
the Trustee by a copy thereof certified by the Secretary or an Assistant
Secretary of the Company;
(c) The Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(d) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder; no Depositary, Custodian or paying agent who is not the Trustee shall
be deemed an agent of the Trustee, and the Trustee (in its capacity as Trustee)
shall not be responsible for any act or omission by any such Depositary,
Custodian or paying agent;
(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by the Indenture at the request or direction of
any of the holders pursuant to this Indenture unless such holders have offered
the Trustee reasonable security or indemnity against the costs, expenses and
liabilities that would be incurred by it in compliance with such request or
direction.
(f) Subject to the provisions of Section 7.1(c), the Trustee shall
not be liable for any action it takes or omits to take in good faith that it
believes to be authorized or within its rights or powers;
(g) In connection with any request to transfer or exchange any Note,
the Trustee may request a direction (in the form of an Officers' Certificate)
from the Company and an Opinion of Counsel with respect to compliance with any
restrictions on transfer or exchange imposed by this Indenture, the Securities
Act, other applicable law or the rules and regulations of any exchange on which
the Notes or the capital stock may be traded, and the Trustee may rely and shall
be protected in acting upon such direction and in accordance with such Officers'
Certificate and Opinion of counsel;
(h) The Trustee may rely and shall be fully protected in acting upon
the determination and notice by the Company of the Conversion Price;
(i) The Trustee shall not be deemed to have knowledge of any Event of
Default or other fact or event upon the occurrence of which it may be required
to take action hereunder unless one of its Responsible Officers has actual
knowledge thereof; and
(j) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney.
7.4. No Responsibility for Recitals, Etc. The recitals contained
herein and in the Notes (except in the Trustee's certificate of authentication)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
7.5. Trustee, Paying Agents, Conversion Agents or Registrar May Own
Notes. The Trustee, any paying agent, any conversion agent or any Note
registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.
7.6. Monies to Be Held in Trust. Subject to the provisions of
Section 12.4, all monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received.
Money held by the Trustee in trust hereunder need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as may be
agreed to in writing from time to time by the Company and the Trustee.
7.7. Compensation and Expenses of Trustee. The Company covenants
and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation as the Company and the Trustee shall from time to
time agree in writing, for all services rendered by it hereunder in any capacity
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and the Company shall pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
each of the Trustee or any predecessor Trustee in any capacity under this
Indenture and its agents and any authenticating agent for, and to hold them
harmless against, any and all loss, liability, damage, claim or expense,
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on the part of the Trustee or such agent or
authenticating agent, as the case may be, and arising out of or in connection
with the acceptance or administration of this trust or in any other capacity
hereunder, including the costs and expenses of defending themselves against any
claim of liability in the premises. The obligations of the Company under this
Section 7.7 to compensate or indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall not be subordinated to
the payment of Senior Indebtedness pursuant to Article 15 and be secured by a
lien prior to that of the Notes upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the benefit of the holders
of particular Notes. The obligation of the Company under this Section shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.1(d) hereof or Section 6.1(e)
hereof, the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
7.8. Officers' Certificate as Evidence. Except as otherwise
provided in Section 7.1, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such Officers' Certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken or omitted by it under the
provisions of this Indenture upon the faith thereof.
7.9. Conflicting Interests of Trustee. In the event that the Trust
Indenture Act is applicable hereto, and if the Trustee has or shall acquire a
conflicting interest within the meaning of Section 310(b) of the Trust Indenture
Act and there exists an Event of Default hereunder (exclusive of any period of
grace or requirement of notice), the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
7.10. Eligibility of Trustee. There shall at all times be a Trustee
hereunder that shall be a person that satisfied the requirements of Trust
Indenture Act Section 310(a)(1) and Section 310(a)(5) and that has a combined
capital and surplus of at least $50,000,000. If such person publishes reports
of condition at least annually, pursuant to law or to the requirements of any
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article 7.
7.11. Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company; and the Company shall mail, or cause to be
mailed, notice thereof to the holders of Notes at their addresses as they shall
appear on the Note register. Upon receiving such notice of resignation, the
Company shall promptly appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor trustee.
(b) In case at any time any of the following shall occur:
(iv) the Trustee shall fail to comply with Section 7.9 after written
request therefor by the Company or by any Noteholder who has been a bona fide
holder of a Note or Notes for at least six months; or
(v) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.10 and shall fail to resign after written request
therefor by the Company or by any such Noteholder; or
(vi) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee or any Noteholder who
has been a bona fide holder of a Note or Notes for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and nominate a
successor trustee, which shall be deemed appointed as successor trustee unless
within ten days after notice to the Company of such nomination the Company
objects thereto, in which case the Trustee so removed or any Noteholder, upon
the terms and conditions and otherwise as provided in the next paragraph, may
petition any court of competent jurisdiction for an appointment of a successor
trustee.
If no successor trustee shall have been so appointed and have
accepted appointment within 60 days after removal or the mailing of such notice
of resignation to the Noteholders, the Trustee resigning or being removed may
petition any court of competent jurisdiction for the appointment of a successor
trustee, or, in the case of either resignation or removal, any Noteholder who
has been a bona fide holder of a Note or Notes for at least six months may, on
behalf of himself and all others similarly situated, petition any such court for
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 7.11 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 7.12.
7.12. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 7.11 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon, the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but on the written request of the Company
or of the successor trustee, the Trustee ceasing to act shall, upon payment of
any amounts then due it pursuant to the provisions of Section 7.7, execute and
deliver an instrument transferring to such successor trustee all the rights and
powers of the Trustee so ceasing to act. Upon request of any such successor
trustee, the Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all such
rights and powers. Any Trustee ceasing to act shall, nevertheless, retain a
lien upon all property and funds held or collected by such trustee as such,
except for funds held in trust for the benefit of holders of particular Notes,
to secure any amounts then due it pursuant to the provisions of Section 7.7.
No successor trustee shall accept appointment as provided in this
Section 7.12 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 7.9 and eligible under the
provisions of Section 7.10.
Upon acceptance of appointment by a successor trustee as provided in
this Section 7.12, the Company shall mail or cause to be mailed notice of the
succession of such Trustee hereunder to the holders of Notes at their addresses
as they shall appear on the Note register. If the Company fails to mail such
notice within ten days after acceptance of appointment by the successor trustee,
the successor trustee shall cause such notice to be mailed at the expense of the
Company.
7.13. Successor, by Merger, Etc. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee, shall be the successor to
the Trustee hereunder, provided such corporation shall be qualified under the
provisions of Section 7.9 and eligible under the provisions of Section 7.10
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
7.14 Limitation on Rights of Trustee as Creditor. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Notes) and the Trust Indenture Act is applicable hereto, the Trustee shall
be subject to the provisions of Section 311(a) or, if applicable, Section 311(b)
of the Trust Indenture Act regarding the collection of the claims against the
Company (or any such other obligor).
ARTICLE 8.
CONCERNING THE NOTEHOLDERS
8.1 Action by Noteholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article 9 or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than 15 days
prior to the date of commencement of solicitation of such action.
8.2 Proof of Execution by Noteholders. Subject to the provisions of
Sections 7.1, 7.2 and 9.5, proof of the execution of any instrument by a
Noteholder or his agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. The holding of Notes shall
be proved by the Note register or by a certificate of the Note registrar.
The record of any Noteholders' meeting shall be proved in the manner
provided in Section 9.5.
8.3 Who Are Deemed Absolute Owners. The Company, the Trustee, any
paying agent, any conversion agent and any Note registrar may deem the person in
whose name such Note shall be registered upon the books of the Company to be,
and may treat him as, the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of, premium, if any, and interest on such Note, for conversion of such Note and
for all other purposes; and neither the Company nor the Trustee nor any paying
agent nor any conversion agent nor any Note registrar shall be affected by any
notice to the contrary. All such payments so made to any holder for the time
being, or upon his order, shall be valid and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for monies payable
upon any such Note.
The Depositary shall be deemed to be the owner of any global Note for
all purposes, including receipt of notices to Noteholders and payment of
principal of, premium, if any, and interest on the Notes. None of the Company,
the Trustee (in its capacity as Trustee), any paying agent or the Note registrar
(or co-registrar) shall have any responsibility for any aspect of the records
relating to or payments made on account of beneficial interests of a global Note
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests; provided that the foregoing shall not apply to
the Trustee or any other person acting in its capacity as Custodian.
8.4 Company-Owned Notes Disregarded. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes that
are owned by the Company or any other obligor on the Notes or by any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any other obligor on the Notes shall be
disregarded and deemed not to be outstanding for the purpose of any such
determination; provided that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent, waiver or other
action, only Notes that a Responsible Officer actually knows are so owned shall
be so disregarded. Notes so owned that have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 8.4 if the pledgee
shall establish to the satisfaction of the Trustee the pledger's right to vote
such Notes and that the pledgee is not the Company, any other obligor on the
Notes or a person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor.
In the case of a dispute as to such right, any decision by the Trustee taken
upon the advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Notes, if any, known by the
Company to be owned or held by or for the account of any of the above described
persons; and subject to Section 7.1, the Trustee shall be entitled to accept
such Officers' Certificate as conclusive evidence of the facts therein set forth
and of the fact that all Notes not listed therein are outstanding for the
purpose of any such determination.
8.5 Revocation of Consents, Future Holders Bound. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 8.1, of
the taking of any action by the holders of the percentage in aggregate principal
amount of the Notes specified in this Indenture in connection with such action,
any holder of a Note that is shown by the evidence to be included in the Notes
the holders of which have consented to such action may, by filing written notice
with the Trustee at its Corporate Trust Office and upon proof of holding as
provided in Section 8.2, revoke such action so far as concerns such Note.
Except as aforesaid, any such action taken by the holder of any Note shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Note and of any Notes issued in exchange or substitution therefor,
irrespective of whether any notation in regard thereto is made upon such Note or
any Note issued in exchange or substitution therefor.
ARTICLE 9.
NOTEHOLDERS' MEETINGS
9.1 Purposes for Which Meetings May be Called. A meeting of
Noteholders may be called at any time and from time to time pursuant to the
provisions of this Article 9 for any of the following purposes:
(i) to give any notice to the Company or to the Trustee, or to give
any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to be
taken by Noteholders pursuant to any of the provisions of Article 6;
(ii) to remove the Trustee and appoint a successor trustee pursuant
to the provisions of Article 7;
(iii) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 10.2; or
(iv) to take any other action authorized to be taken by or on
behalfof the holders of any specified aggregate principal amount of the Notes
under any other provisions of this Indenture or under applicable law.
9.2 Manner of Calling Meetings; Record Date. The Trustee may at any
time call a meeting of Noteholders to take any action specified in Section 9.1,
to be held at such time and at such place in the City of New York, State of New
York, as the Trustee shall determine. Notice of every meeting of the
Noteholders, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be mailed not less
than 30 nor more than 60 days prior to the date fixed for the meeting to such
Noteholders at their addresses as such addresses appear in the Note register.
For the purpose of determining Noteholders entitled to notice of any meeting of
Noteholders, the Trustee shall fix in advance a date as the record date for such
determination, such date to be a business day not more than ten days prior to
the date of the mailing of such notice as hereinabove provided. Only persons in
whose name any Note shall be registered in the Note register at the close of
business on a record date fixed by the Trustee as aforesaid, or by the Company
or the Noteholders as provided in Section 9.3, shall be entitled to notice of
the meeting of Noteholders with respect to which such record date was so fixed.
9.3 Call of Meeting by Company or Noteholders. In case at any time
the Company, pursuant to a resolution of its Board of Directors or the holders
of at least 10% in aggregate principal amount of the Notes then outstanding
shall have requested the Trustee to call a meeting of Noteholders to take any
action authorized in Section 9.1 by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee shall not
have mailed notice of such meeting within 20 days after receipt of such request,
then the Company or the holders of Notes in the amount above specified, as the
case may be, may fix the record date with respect to, and determine the time and
the place for, such meeting and may call such meeting to take any action
authorized in Section 9.1, by mailing notice thereof as provided in Section 9.2.
The record date fixed as provided in the preceding sentence shall be set forth
in a written notice to the Trustee and shall be a business day not less than 15
nor more than 20 days after the date on which the original request is sent to
the Trustee.
9.4 Who May Attend and Vote at Meetings. Only persons entitled to
receive notice of a meeting of Noteholders and their respective proxies duly
appointed by an instrument in writing shall be entitled to vote at such meeting.
The only persons who shall be entitled to be present or to speak at any meeting
of Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel. When a determination of
Noteholders entitled to vote at any meeting of Noteholders has been made as
provided in this Section, such determination shall apply to any adjournments
thereof.
9.5 Manner of Voting at Meetings and Record to be Kept. The vote
upon any resolution submitted to any meeting of Noteholders shall be by written
ballots on each of which shall be subscribed the signature of the Noteholder or
proxy casting such ballot and the identifying number or numbers of the Notes
held or represented in respect of which such ballot is cast. The chairman of
the meeting shall appoint two inspectors of votes who shall count all votes cast
at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Noteholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was mailed as provided in Section 9.2. The record
shall show the identifying numbers of the Notes voting in favor of or against
any resolution. Each counterpart of such record shall be signed and verified by
the affidavits of the chairman and secretary of the meeting and one of the
counterparts shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee.
Any counterpart record so signed and verified shall be conclusive
evidence of the matters therein stated and shall be the record referred to in
clause (b) of Section 8.1.
9.6 Exercise of Rights of Trustee and Noteholders Not To Be Hindered
or Delayed. Nothing in this Article 9 contained shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Noteholders or any
rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Noteholders under any of the provisions of
this Indenture or of the Notes.
ARTICLE 10.
SUPPLEMENTAL INDENTURES
10.1 Supplemental Indentures Without Consent of Noteholders. The
Company, when authorized by a Board Resolution, and the Trustee may from time to
time and at any time enter into an indenture or indentures supplemental hereto
for one or more of the following purposes without the consent of the
Noteholders:
(a) to make provision with respect to the conversion rights of
the holders of Notes pursuant to the requirements of Section 14.6;
(b) subject to Article 15, to convey, transfer, assign,
mortgage or pledge to the Trustee as security for the Notes, any property or
assets;
(c) to evidence the succession of another person to the
Company, or successive successions, and the assumption by the Successor Company
of the covenants, agreements and obligations of the Company pursuant to Article
11;
(d) to add to the covenants of the Company such further
covenants, restrictions or conditions as the Board of Directors and the Trustee
shall consider to be for the benefit of the holders of Notes and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided that in respect of any
such additional covenant, restriction or condition, such supplemental indenture
may provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may
provide for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes
in coupon form (including Notes registrable as to principal only) and to provide
for exchange ability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture that shall not adversely affect the
interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this
Indenture to such extent necessary to effect the qualification of this Indenture
under the Trust Indenture Act (if applicable), or under any similar federal
statute hereafter enacted (if applicable).
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations that may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any
supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section 10.1 may be executed by the Company and the Trustee without the consent
of the holders of any of the Notes at the time outstanding, notwithstanding any
of the provisions of Section 10.2.
10.2 Supplemental Indentures With Consent of Noteholders. With the
consent (evidenced as provided in Article 8) of the holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding, the
Company, when authorized by a Board Resolution and the Trustee may from time to
time and at any time enter into an indenture or indentures supplemental hereto
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or any supplemental
indenture or of modifying in any manner the rights of the holders of the Notes;
provided that no such supplemental indenture shall (i) extend the fixed maturity
of any Note, or reduce the rate or extend the time of payment of interest
thereon, or reduce the principal amount thereof or premium, if any, thereon or
reduce any amount payable on redemption thereof, alter the obligation of the
Company to redeem the Notes at the option of the holder upon the occurrence of a
Change of Control or impair or affect the right of any Noteholder to institute
suit for the payment thereof or make the principal thereof or interest or
premium, if any, thereon payable in any coin or currency other than that
provided in the Notes, modify the subordination provisions in a manner adverse
to the holders of the Notes, or impair the right to convert the Notes into
Common Stock subject to the terms set forth herein without the consent of the
holder of each Note so affected or (ii) reduce the aforesaid percentage of
Notes, the holders of which are required to consent to any such supplemental
indenture, without the consent of the holders of all Notes then outstanding.
Upon the request of the Company, accompanied by a copy of a Board
Resolution certified by its Secretary or Assistant Secretary authorizing the
execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of Noteholders as aforesaid, the Trustee
shall join with the Company in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Noteholders under
this Section 10.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
10.3 Effect of Supplemental Indentures. Any supplemental indenture
executed pursuant to the provisions of this Article 10 shall comply with the
Trust Indenture Act, as then in effect, if such supplemental indenture is then
required to so comply. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article 10, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the respective
rights, limitation of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
10.4 Notation on Notes. Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article 10 may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture, but they need not do so. If the
Company or the Trustee shall determine to add such a notation, new Notes so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may, at the Company's expense, be prepared and executed
by the Company, authenticated by the Trustee (or an authenticating agent duly
appointed by the Trustee pursuant to Section 16.14) and delivered in exchange
for the Notes then outstanding, upon surrender of such Notes then outstanding.
10.5 Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee. The Trustee shall be furnished with and, subject to the
provisions of Sections 7.1 and 7.2, may rely upon an Officers' Certificate and
an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant hereto complies with the requirements of this Article 10 and
that it is authorized or permitted by the Indenture.
ARTICLE 11.
CONSOLIDATION, MERGER, SALE, CONVEYANCE,
TRANSFER AND LEASE
11.1 Company May Consolidate, Etc. on Certain Terms. The Company
shall not consolidate with or merge with or into, or convey, transfer or lease
all or substantially all of its assets to any person unless: (i) either the
Company is the resulting, surviving or transferee person (the "Successor
Company") or the Successor Company is a person organized and existing under the
laws of the United States or any State thereof or the District of Columbia, and
the Successor Company (if not the Company) expressly assumes by a supplemental
indenture, executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Company under this Indenture and the Notes,
including the rights pursuant to Article 14 hereof; (ii) immediately after
giving effect to such transaction, no default or Event of Default has happened
and is continuing; and (iii) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with this
Indenture.
11.2 Successor Company To Be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the Successor Company, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of, premium, if any, and interest on all of
the Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such Successor
Company shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party hereto. Such Successor
Company thereupon may cause to be signed, and may issue either in its own name
or in the name of Nine West Group Inc. any or all of the Notes issuable
hereunder that theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon a Company Order of such Successor Company
instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver,
or cause to be authenticated and delivered, any Notes that previously shall have
been signed and delivered by the officers of the Company to the Trustee for,
authentication, and any Notes that such Successor Company thereafter shall cause
to be signed and delivered to the Trustee for that purpose. All the Notes so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Notes theretofore or thereafter issued in accordance with the
terms of this Indenture as though all of such Notes had been issued at the date
of the execution hereof. In the event of any such consolidation, merger, sale,
conveyance, transfer or lease, the person named as the "Company" in the first
paragraph of this Indenture or any successor that shall thereafter have become
such in the manner prescribed in this Article 11 may be dissolved, wound up and
liquidated at any time thereafter and such person shall be released from its
liabilities as obligor and maker of the Notes and from its obligations under
this Indenture.
In case of any such consolidation, merger, sale, conveyance, transfer
or lease, such changes in phraseology and form (but not in substance) may be
made in the Notes thereafter to be issued as may be appropriate.
11.3 Opinion of Counsel to be Given to Trustee. The Trustee subject
to Sections 7.1 and 7.2, shall receive an Officers' Certificate and an Opinion
of Counsel as conclusive evidence that any such consolidation, merger, sale,
conveyance, transfer or lease and any such assumption complies with the
provisions of this Article 11.
ARTICLE 12.
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
12.1 Legal Defeasance and Covenant Defeasance of the Notes.
(a) The Company may, at its option by Board Resolution, at any time,
with respect to the Notes, elect to have either paragraph (b) or paragraph (c)
below be applied to the outstanding Notes upon compliance with the conditions
set forth in paragraph (d).
(b) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (b), the Company shall be deemed to have been
released and discharged from its obligations with respect to the outstanding
Notes on the date the conditions set forth below are satisfied (hereinafter,
"legal defeasance"). For this purpose, such legal defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of the Sections of and matters under this
Indenture referred to in clauses (i) and (ii) below and to have satisfied all
its other obligations under such Notes and this Indenture insofar as such Notes
are concerned, except for the following, which shall survive until otherwise
terminated or discharged hereunder: (i) the rights of holders of outstanding
Notes to receive solely from the trust fund described in paragraph (d) below and
as more fully set forth in such paragraph, payments in respect of the principal
of, premium, if any, and interest on such Notes when such payments are due and
(ii) obligations listed in Section 12.3.
(c) Upon the Company's exercise under paragraph (a) of the option
applicable to this paragraph (c), the Company shall be released and discharged
from its obligations under any covenant contained in Article 11 and in Sections
3.5, 4.4, 4.5, 4.7, 4.9 and 4.10 with respect to the outstanding Notes on and
after the date the conditions set forth in paragraph (d) are satisfied
(hereinafter, "covenant defeasance"), and the Notes shall thereafter be deemed
to be not "outstanding" for the purpose of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder. For this purpose, such covenant defeasance
means that, with respect to the outstanding Notes, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other provision herein or in any other
document, and such omission to comply shall not constitute a Default or an Event
of Default under Section 6.1(c), but, except as specified above, the remainder
of this Indenture and such Notes shall be unaffected thereby.
(d) The following shall be the conditions to application of either
paragraph (b) or paragraph (c) above to the outstanding Notes:
(i) The Company shall have irrevocably deposited in trust with the
Trustee, pursuant to an irrevocable trust in form and substance satisfactory to
the Trustee, cash or U.S. Government Obligations maturing as to principal and
interest at such times, or a combination thereof, in such amounts as are
sufficient, without consideration of the reinvestment of such interest and after
payment of all federal, state and local taxes or other charges or assessments in
respect thereof payable by the Trustee, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof (in form and substance reasonably satisfactory to the
Trustee) delivered to the Trustee, to pay the principal of, premium, if any, and
interest on the outstanding Notes on the dates on which any such payments are
due and payable in accordance with the terms of this Indenture and of the Notes;
(ii) (A) No Event of Default shall have occurred or be continuing on the
date of such deposit, and (B) no default or Event of Default under Section
6.1(d) or 6.1(e) shall occur on or before the 123rd day after the date of such
deposit;
(iii) Such deposit shall not result in a default under this Indenture or a
breach or violation of, or constitute a default under, any other instrument or
agreement to which the Company is a party or by which it or its property is
bound;
(iv) In the case of a legal defeasance under paragraph (b) above, the
Company has delivered to the Trustee an Opinion of Counsel stating that (A) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date of this Indenture, there has been a
change in the applicable federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the holders of the
Notes shall not recognize income, gain or loss for federal income tax purposes
as a result of such deposit, defeasance and discharge and shall be subject to
federal income tax on the same amounts and in the same manner and at the same
times as would have been the case if such deposit, defeasance and discharge had
not occurred; and, in the case of a covenant defeasance under paragraph (c)
above, the Company shall deliver to the Trustee an Officers' Certificate and an
Opinion of Counsel, in form and substance reasonably satisfactory to the
Trustee, to the effect that holders of the Notes shall not recognize income,
gain or loss for federal income tax purposes as a result of such deposit and
defeasance and shall be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred;
(v) Such defeasance shall not cause the Trustee to have a conflicting
interest with respect to any securities of the Company; and
(vi) The Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent specified
herein relating to the defeasance contemplated by this Section 12.1 have been
complied with;
provided, that no deposit under clause (d)(i) above shall be effective to
terminate the obligations of the Company under the Notes or this Indenture prior
to the passage of 123 days following such deposit.
12.2 Termination of Obligations upon Cancellation of the Notes. In
addition to the Company's rights under Section 12.1, the Company may terminate
all of its obligations under this Indenture (subject to Section 12.3) when:
(a) (i) all Notes theretofore authenticated and delivered (other than
Notes that have been destroyed, lost or stolen and that have been replaced or
paid as provided in Section 2.6) have been delivered to the Trustee for
cancellation; and
(ii) the Company has paid or caused to be paid all other sums payable
hereunder and under the Notes by the Company; or
(b) (i) the Notes not previously delivered to the Trustee for
cancellation shall have become due and payable or are by their terms to become
due and payable within one year or are to be called for redemption under
arrangements satisfactory to the Trustee upon delivery of notice; (ii) the
Company shall have irrevocably deposited with the Trustee, as trust funds, cash,
in an amount sufficient to pay principal of, premium, if any, and interest on
the outstanding Notes, to maturity or redemption, as the case may be; (iii) such
deposit shall not result in a breach or violation of, or constitute a default
under, any agreement or instrument pursuant to which the Company is a party or
by which it or its property is bound; (iv) the Company has paid or caused to be
paid all other sums payable hereunder by the Company and (v) the Company has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that all conditions related to such defeasance have been complied
with.
12.3 Survival of Certain Obligations. Notwithstanding the
satisfaction and discharge of this Indenture and of the Notes referred to in
Section 12.1 or 12.2, the respective obligations of the Company and the Trustee
under Sections 2.3, 2.4, 2.5, 2.6, 3.1, 4.2, 5.1, 6.4, 6.9, 7.7, 7.11, 12.5,
12.6, 12.7, Articles 14 and 15 shall survive until the Notes are no longer
outstanding, and thereafter, the obligations of the Company and the Trustee
under Sections 6.9, 7.7, 12.5, 12.6 and 12.7 shall survive. Nothing contained
in this Article 12 shall abrogate any of the rights, obligations or duties of
the Trustee under this Indenture.
12.4 Acknowledgment of Discharge by Trustee. Subject to Section
12.7, after (i) the conditions of Section 12.1 or 12.2 have been satisfied, (ii)
the Company has paid or caused to be paid all other sums payable hereunder by
the Company and (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i) above relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee upon written
request shall acknowledge in writing the discharge of the Company's obligations
under this Indenture except for those surviving obligations specified in Section
12.3.
12.5 Application of Trust Assets. The Trustee shall hold any cash
or U.S. Government Obligations deposited with it in the irrevocable trust
established pursuant to Section 12.1 or 12.2, as the case may be, but such money
need not be segregated from other funds except to the extent required by law.
The Trustee shall apply the deposited cash or the U.S. Government Obligations,
as applicable, together with earnings thereon in accordance with this Indenture
and the terms of the irrevocable trust agreement established pursuant to Section
12.1 or 12.2, as the case may be, to the payment of principal of, premium, if
any, and interest on the Notes. The cash or U.S. Government Obligations so held
in trust and deposited with the Trustee in compliance with Section 12.1 or 12.2,
as the case may be, shall not be part of the trust estate under this Indenture,
but shall constitute a separate trust fund for the benefit of all holders
entitled thereto. Except as specifically provided herein, the Trustee shall not
be requested to invest any amounts held by it for the benefit of the holders or
pay interest on uninvested amounts to any holder.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 12.1 hereof or Section 12.2 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the holders of outstanding
Notes.
12.6 Repayment to the Company; Unclaimed Money. Subject to
applicable laws governing escheat of such property, and upon termination of the
trust established pursuant to Section 12.1 hereof or 12.2 hereof, as the case
may be, the Trustee shall promptly pay to the Company upon written request any
excess cash or U.S. Government Obligations held by them. Additionally, if
amounts for the payment of principal, premium, if any, or interest remains
unclaimed for two years, the Trustee shall, upon written request, pay such
amounts back to the Company forthwith. Thereafter, all liability of the Trustee
with respect to such amounts shall cease. After payment to the Company, holders
entitled to such payment must look to the Company for such payment as general
creditors unless an applicable abandoned property law designates another person.
12.7 Reinstatement. If the Trustee is unable to apply any cash or
U.S. Government Obligations in accordance with Section 12.1 or 12.2 by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to Section
12.1 or 12.2 until such time as the Trustee is permitted to apply all such cash
or U.S. Government Obligations in accordance with Section 12.1 or 12.2, as the
case may be; provided that if the Company makes any payment of principal of,
premium, if any, or interest on any Notes following the reinstatement of its
obligations, the Company shall be subrogated to the rights of the holders of
such Notes to receive such payment from the amounts held by the Trustee.
ARTICLE 13.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
13.1 Indenture and Notes Solely Corporate Obligations. No recourse
for the payment of the principal of, or premium, if any, or interest on any
Note, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor entity, either directly or through
the Company or any successor entity, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that all such liability is hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of the Notes.
ARTICLE 14.
CONVERSION OF NOTES
14.1 Right to Convert. (a) Subject to Section 14.1(b) and upon
compliance with the provisions of this Indenture, the holder of any Note shall
have the right, at his option, at any time after 60 days following the latest
date of original issuance of the Notes and prior to the close of business on
July 15, 2003 (except that, with respect to any Note or portion of a Note that
shall be called for redemption or delivered for repurchase, such right shall
terminate, except as provided in the fourth paragraph of Section 14.2,
immediately prior to the close of business on the last Trading Day prior to the
date fixed for redemption of such Note or portion of a Note unless the Company
shall default in payment due upon redemption thereof) to convert the principal
amount of any such Note, or any portion of such principal amount that is $1,000
or an integral multiple thereof, into that number of fully paid and
nonassessable shares of Common Stock (as such shares shall then be constituted)
obtained by dividing the aggregate principal amount of the Notes or portion
thereof surrendered for conversion by the Conversion Price in effect at such
time, by surrender of the Note so to be converted in whole or in part in the
manner provided in Section 14.2. The conversion rate shall be subject to
adjustment as provided in Section 14.5 and subject to the Company's right to pay
an amount in cash in lieu of Common Stock as provided in Section 14.1(b). A
holder of Notes is not entitled to any rights of a holder of Common Stock until
such holder has converted his Notes to Common Stock and only to the extent such
Notes are deemed to have been converted to Common Stock under this Article 14,
and a holder of Notes with respect to which the Company has elected to pay cash,
pursuant to Section 14.1(b), in lieu of shares of Common Stock (or other
securities into which the Notes are then convertible) upon conversion thereof
shall under no circumstances be entitled to any rights of a holder of Common
Stock.
(b) At the sole option of the Company, in lieu of delivering shares
of Common Stock (or other securities into which the Notes are then convertible)
upon conversion of the Notes pursuant to Section 14.1(a), the Company may pay to
a holder of Notes who properly exercises the conversion privilege, as set forth
in Section 14.2, an amount in cash equal to the Market Cash Conversion Price of
the shares of Common Stock into which such Notes are then convertible, plus any
property or assets into which such Notes are then convertible.
(c) In the event that the Company elects to direct the Trustee to pay
cash upon any conversion in lieu of delivering shares of Common stock or any
other securities, as the case may be, the Company shall deliver to the Trustee
written notice of such election not later than the close of business on the
first Trading Day after the date of receipt by the Trustee of the notice of
conversion delivered by such Holder pursuant to Section 14.2, and the Trustee
shall mail or cause to be mailed a notice of such election by the Company to
such Holder. In such event, notwithstanding any other provisions in this
Article 14, in lieu of delivering Common Stock (or other property) upon
conversion of such Notes surrendered in accordance with Section 14.2, the
Company shall pay or direct the Trustee to pay the Holder surrendering such
securities an amount in cash equal to the Market Cash Conversion Price of the
shares of Common Stock (or other property into which securities are
convertible), plus any cash and other property theretofore apportioned to such
shares of Common Stock in accordance with Section 14.2. Prior to or
concurrently with such cash payment, the Company will provide the Trustee with
an Officers' Certificate setting forth the Market Cash Conversion Price and will
deposit with the paying agent the cash so payable. The Trustee shall have no
obligation or liability with respect to the calculation of the Market Cash
Conversion Price.
14.2 Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion; No Adjustment for Interest or Dividends. In order to exercise the
conversion privilege with respect to any Note in definitive form, the holder of
any such Note to be converted in whole or in part shall surrender such Note,
duly endorsed, at an office or agency maintained by the Company pursuant to
Section 4.2, accompanied by the funds, if any, required by the penultimate
paragraph of this Section 14.2, and shall give written notice of conversion in
the form provided on the form of Note (or such other notice that is acceptable
to the Company) to the office or agency that the holder elects to convert such
Note or the portion thereof specified in said notice. Such notice shall also
state the name or names (with address) in which the certificate or certificates
for shares of Common Stock, if any, that shall be issuable on such conversion
shall be issued and shall be accompanied by transfer taxes, if required pursuant
to Section 14.7. Each such Note surrendered for conversion shall, unless the
shares, if any, issuable on conversion are to be issued in the name of the
holder of such Note as it appears on the Note register, be duly endorsed by, or
be accompanied by instruments of transfer in form satisfactory to the Company
duly executed by, the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any
interest in a global Note, the beneficial holder must complete the appropriate
instruction form for conversion pursuant to the Depositary's book-entry
conversion program and follow the other procedures set forth in such program.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to Section 14.1(b) and compliance with any
restrictions on transfer if shares issuable on conversion are to be issued in a
name other than that of the Noteholder (as if such transfer were a transfer of
the Note or Notes (or portion thereof) so converted), the Company shall issue
and shall deliver to such holder at the office or agency maintained by the
Company for such purpose pursuant to Section 4.2, a certificate or certificates
for the number of full shares issuable upon the conversion of such Note or
portion thereof in accordance with the provisions of this Article 14 and a check
or cash in respect of any fractional interest in respect of a share of Common
Stock arising upon such conversion, as provided in Section 14.3. In case any
Note of a denomination greater than $1,000 shall be surrendered for partial
conversion, and subject to Section 2.3, the Company shall execute and the
Trustee shall authenticate and make available for delivery to the holder of the
Note so surrendered, without charge to him, a new Note or Notes in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the date on which the requirements set forth above
in this Section 14.2 have been satisfied as to such Note (or portion thereof),
and, subject to Section 14.1(b), the person in whose name any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become on said date the holder of record of the shares
represented thereby; provided that any such surrender on any date when the stock
transfer books of the Company shall be closed shall constitute the person in
whose name the certificates are to be issued as the record holder thereof for
all purposes on the next succeeding day on which such stock transfer books are
open, but such conversion shall be at the Conversion Price in effect on the date
upon which such Note shall have been surrendered.
Any Note or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date through the opening of business on the next succeeding interest payment
date shall (unless such Note or portion thereof being converted shall have been
called for redemption) be accompanied by payment, in funds acceptable to the
Company, of an amount equal to the interest otherwise payable on such interest
payment date on the principal amount being converted; provided that no such
payment need be made if there shall exist at the time of conversion a default in
the payment of interest on the Notes. An amount equal to such payment shall be
paid by the Company on such interest payment date to the holder of such Note at
the close of business on such record date; provided that if the Company shall
default in the payment of interest on such interest payment date, such amount
shall be paid to the person who made such required payment. The interest
payment with respect to a Note called for redemption on a date during the period
from the close of business on or after any record date to the opening of
business on the business day following the corresponding payment date shall be
payable on the corresponding interest payment date to the registered Holder at
the close of business on that record date (notwithstanding the conversion of
such Note before the corresponding interest payment date) and a Holder who
elects to convert need not include funds equal to the interest paid. Except as
provided above in this Section 14.2, no adjustment shall be made for interest
accrued on any Note converted or for dividends on any shares issued upon the
conversion of such Note as provided in this Article 14.
Upon the conversion of an interest in a global Note, the Trustee, or
the Custodian at the direction of the Trustee, shall make a notation on such
global Note as to the reduction in the principal amount represented thereby.
14.3 Cash Payments in Lieu of Fractional Shares. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Notes. If more than one Note shall be surrendered for
conversion at one time by the same holder, the number of full shares that shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of stock would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment therefor in cash at the current market value thereof. The current
market value of a share of Common Stock shall be the Closing Price on the first
Trading Day immediately preceding the day on which the Notes (or specified
portions thereof) are deemed to have been converted and such Closing Price shall
be determined as provided in Section 14.5(g).
14.4 Conversion Price. The Conversion Price shall be as specified
in the forms of Notes (herein called the "Conversion Price") attached as
Exhibits A, B and C hereto, subject to adjustment as provided in this Article
14.
14.5 Adjustment of Conversion Price. The Conversion Price shall be
adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the Record Date
(as defined in Section 14.5(g)) fixed for such determination and the denominator
of which shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such reduction to
become effective immediately after the opening of business on the day following
the Record Date. The Company shall not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company nor
shall any shares be deemed outstanding.
(b) In case the Company shall issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them (for a period expiring
within 45 days after the date fixed for determination of stockholders entitled
to receive such rights or warrants) to subscribe for or purchase shares of
Common Stock at a price per share less than the Current Market Price (as defined
in Section 14.5(g)) on the Record Date fixed for determination of stockholders
entitled to receive such rights or warrants, the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect at the opening of business on the date after the
Record Date by a fraction the numerator of which shall be the number of shares
of Common Stock outstanding at the close of business on the Record Date plus the
number of shares that the aggregate offering price of the total number of shares
so offered would purchase at such Current Market Price, and the denominator of
which shall be the number of shares of Common Stock outstanding on the close of
business on the Record Date plus the total number of additional shares of Common
Stock so offered for subscription or purchase. Such adjustment shall become
effective immediately after the opening of business on the day following the
Record Date fixed for determination of stockholders entitled to receive such
rights or warrants. To the extent that shares of Common Stock are not delivered
after the expiration or termination of such rights or warrants, the Conversion
Price shall be readjusted to the Conversion Price that would then be in effect
had the adjustments made upon the issuance of such rights or warrants been made
on the basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received for such rights or
warrants, the value of such consideration, if other than cash, to be determined
by the Board of Directors.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 14.5(a)
applies) or evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 14.5(b), and excluding
any dividend or distribution (x) in connection with the liquidation, dissolution
or winding-up of the Company, whether voluntary or involuntary, (y) exclusively
in cash or (z) referred to in Section 14.5(a) (any of the foregoing hereinafter
in this Section 14.5(d) called the "Securities")), then, in each such case, the
Conversion Price shall be reduced so that the same shall be equal to the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the Record Date (as defined in Section 14.5(g)) with
respect to such distribution by a fraction of which the numerator shall be the
Current Market Price (determined as provided in Section 14.5(g)) on such date
less the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) on such
date of the portion of the Securities so distributed applicable to one share of
Common Stock and the denominator shall be such Current Market Price, such
reduction to become effective immediately prior to the opening of business on
the day following the Record Date; provided that in the event the then fair
market value (as so determined) of the portion of the Securities so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price on the Record Date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Noteholder shall have the right to receive
upon conversion the amount of Securities such holder would have received had
such holder converted each Note on such date. In the event that such dividend
or distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price that would then be in effect if such
dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 14.5(d) by reference to the actual or when issued trading market for any
securities comprising all or part of such distribution, it must in doing so
consider the prices in such market over the same period used in computing the
Current Market Price pursuant to Section 14.5(g) to the extent possible.
Notwithstanding the foregoing provisions of this Section 14.5(d), no
adjustment shall be made hereunder for any distribution of Securities if the
Company makes proper provision so that each Noteholder who converts such Note
(or any portion thereof) after the date fixed for determination of stockholders
entitled to receive such distribution shall be entitled to receive upon such
conversion, in addition to the shares of Common Stock issuable upon such
conversion, the amount and kind of Securities that such holder would have been
entitled to receive if such holder had, immediately prior to such determination
date, converted such Note into Common Stock; provided that, with respect to any
Securities that are convertible, exchangeable or exercisable, the foregoing
provision shall only apply to the extent (and so long as) the Securities
receivable upon conversion of such Note would be convertible, exchangeable or
exercisable, as applicable, without any loss of rights or privileges for a
period of at least 60 days following conversion of such Note.
Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase shares
of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events (the "Trigger Event") (i) are deemed to be transferred with such
shares of Common Stock, (ii) are not exercisable and (iii) are also issued in
respect of future issuances of Common Stock, shall not be deemed distributed for
purposes of this Section 14.5(d) (and no adjustment to the Conversion Price
under Section 14.5(d) shall be required) until the occurrence of the earliest
Trigger Event. In addition, in the event of any distribution of rights or
warrants, or any Trigger Event with respect thereto, that shall have resulted in
an adjustment to the Conversion Price under this Section 14.5(d), (1) in the
case of any such rights or warrants that shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder of Common Stock with respect to such rights or warrants (assuming such
holder had retained such rights or warrants), made to all holders of Common
Stock as of the date of such redemption or repurchase, and (2) in the case of
such rights or warrants all of which shall have expired or been terminated
without exercise by any holder thereof, the Conversion Price shall be readjusted
as if such issuance had not occurred.
For purposes of this Section 14.5(d) and Sections 14.5(a) and (b),
any dividend or distribution to which this Section 14.5(d) is applicable that
also includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Price reduction required by this Section 14.5(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Sections
14.5(a) and (b) with respect to such dividend or distribution shall then be
made, except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution" and "the date fixed for such
determination" within the meaning of Sections 14.5(a) and (b) and (B) any shares
of Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such determination"
within the meaning of Section 14.5(a).
(e) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding any cash that is distributed
upon a merger or consolidation to which Section 14.6 applies or as part of a
distribution referred to in Section 14.5(d) for which an adjustment to the
Conversion Price is provided therein) in an aggregate amount that, combined
together with (1) the aggregate amount of any other such distributions to all
holders of its Common Stock made exclusively in cash within the 12 months
preceding the date of payment of such distribution, and in respect of which no
adjustment pursuant to this Section 14.5(e) has been made, and (2) the aggregate
of any cash plus the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board Resolution) of
consideration payable in respect of any tender offer, by the Company or any of
its subsidiaries for all or any portion of the Common Stock concluded within the
12 months preceding the date of payment of such distribution and in respect of
which no adjustment pursuant to Section 14.5(f) has been made, exceeds 20% of
the product of the Current Market Price (determined as provided in Section
14.5(g)) on the Record Date with respect to such distribution times the number
of shares of Common Stock outstanding on such date, then, and in each such case,
immediately after the close of business on such date, unless the Company elects
to reserve such cash for distribution to the holders of the Notes upon the
conversion of the Notes so that any such holder converting Notes shall receive
upon such conversion, in addition to the shares of Common Stock to that such
holder is entitled, the amount of cash which such holder would have received if
such holder had, immediately prior to the Record Date for such distribution of
cash, converted its Notes into Common Stock, the Conversion Price shall be
reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on such
date by a fraction (i) the numerator of which shall be equal to the Current
Market Price on the Record Date less an amount equal to the quotient of (x) the
excess of such combined amount over such 20% and (y) the number of shares of
Common Stock outstanding on the Record Date and (ii) the denominator of which
shall be equal to the Current Market Price on such date; provided that in the
event the portion of the cash so distributed applicable to one share of Common
Stock is equal to or greater than the Current Market Price of the Common Stock
on the Record Date, in lieu of the foregoing adjustment, adequate provision
shall be made so that each Noteholder shall have the right to receive upon
conversion the amount of cash such holder would have received had such holder
converted each Note on the Record Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price that would then be in effect if such
dividend or distribution had not been declared.
(f) In case a tender offer made by the Company or any of its
subsidiaries for all or any portion of the Common Stock shall expire and such
tender offer (as amended upon the expiration thereof) shall require the payment
to stockholders (based on the acceptance (up to any maximum specified in the
terms of the tender offer) of Purchased Shares (as defined below)) of an
aggregate consideration having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a Board
Resolution) that combined together with (1) the aggregate of the cash plus the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution), as of the expiration
of such tender offer, of consideration payable in respect of any other tender
offer by the Company or any of its subsidiaries for all or any portion of the
Common Stock expiring within the 12 months preceding the expiration of such
tender offer, and in respect of which no adjustment pursuant to this paragraph
(f) has been made, and (2) the aggregate amount of any distributions to all
holders of the Company's Common Stock made exclusively in cash within 12 months
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to paragraph (e) of this Section has been made, exceeds 20%
of the product of the Current Market Price (determined as provided in paragraph
(g) of this Section) as of the last time (the "Expiration Time") tenders could
have been made pursuant to such tender offer (as it may be amended) times the
number of shares of Common Stock outstanding (including any tendered shares) on
the Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the date of the Expiration Time by a fraction (i) the
numerator of which shall be the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the (ii) denominator of which shall be the sum of (x) the
fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender offer) of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased Shares) on the
Expiration Time and the Current Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time, such reduction to become effective
immediately prior to the opening of business on the day following the Expiration
Time. In the event that the Company is obligated to purchase shares pursuant to
any such tender offer, but the Company is permanently prevented by applicable
law from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such tender offer had not been made.
(g) For purposes of this Section 14.5, the following terms shall have
the meaning indicated:
(vii) "Closing Price" with respect to any securities on any day shall
mean the closing sale price regular way on such day or, in case no such sale
takes place on such day, the average of the reported closing bid and asked
prices, regular way, in each case on the New York Stock Exchange, or, if such
security is not listed or admitted to trading on such Exchange, on the principal
national security exchange or quotation system on which such security is quoted
or listed or admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system, the average of
the closing bid and asked prices of such security on the over-the-counter market
on the day in question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting service, or if not so
available, in such manner as furnished by any New York Stock Exchange member
firm selected from time to time by the Board of Directors for that purpose, or a
price determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution.
(viii) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to the date in question; provided that (1) if the "ex" date
(as hereinafter defined) for any event (other than the issuance or distribution
or Change of Control requiring such computation) that requires an adjustment to
the Conversion Price pursuant to Section 14.5(a), (b), (c), (d), (e) or (f)
occurs during such ten consecutive Trading Days, the Closing Price for each
Trading Day prior to the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by which the Conversion
Price is so required to be adjusted as a result of such other event, (2) if the
"ex" date for any event (other than the issuance, distribution or Change of
Control requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 14.5(a), (b), (c), (d), (e) or (f) occurs
on or after the "ex" date for the issuance or distribution requiring such
computation and prior to the day in question, the Closing Price for each Trading
Day on and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of such other event
and (3) if the "ex" date for the issuance, distribution or Change of Control
requiring such computation is prior to the day in question, after taking into
account any adjustment required pursuant to clause (1) or (2) of this proviso,
the Closing Price for each Trading Day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the fair market value (as
determined by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 14.5(d) or (f), whose
determination shall be conclusive and described in a Board Resolution) of the
evidences of indebtedness, shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the close of business on the day
before such "ex" date. For purposes of any computation under Section 14.5(f),
the Current Market Price of the Common Stock on any date shall be deemed to be
the average of the daily Closing Prices per share of Common Stock for such day
and the next two succeeding Trading Days; provided that if the "ex" date for any
event (other than the tender or exchange offer requiring such computation) that
requires an adjustment to the Conversion Price pursuant to Section 14.5(a), (b),
(c), (d), (e) or (f) occurs on or after the Expiration Time for the tender or
exchange offer requiring such computation and prior to the day in question, the
Closing Price for each Trading Day on and after the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the reciprocal of
the fraction by which the Conversion Price is so required to be adjusted as a
result of such other event. For purposes of this paragraph, the term "ex" date,
(1) when used with respect to any issuance or distribution, means the first date
on which the Common Stock trades regular way on the relevant exchange or in the
relevant market from which the Closing Price was obtained without the right to
receive such issuance or distribution, (2) when used with respect to any
subdivision or combination of shares of Common Stock, means the first date on
which the Common Stock trades regular way on such exchange or in such market
after the time at which such subdivision or combination becomes effective and
(3) when used with respect to any tender or exchange offer means the first date
on which the Common Stock trades regular way on such exchange or in such market
after the expiration of such offer. Notwithstanding the foregoing, whenever
successive adjustments to the Conversion Price are called for pursuant to this
Section 14.5, such adjustments shall be made to the Current Market Price as may
be necessary or appropriate to effectuate the intent of this Section 14.5 and to
avoid unjust or inequitable results as determined in good faith by the Board of
Directors.
(ix) "fair market value" shall mean the amount that a willing buyer
would pay a willing seller in an arm's-length transaction.
(x) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or in which the
Common Stock (or other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, the date fixed for
determination of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
(xi) "Trading Day" shall mean (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or another
national security exchange, a day on which the New York Stock Exchange or that
other national security exchange is open for business or (y) if the applicable
security is quoted on the Nasdaq National Market, a day on which trades may be
made thereon or (z) if the applicable security is not so listed, admitted for
trading or quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by law
or executive order to close.
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 14.5(a), (b), (c), (d), (e) and (f), as
the Board of Directors considers to be advisable to avoid or diminish any income
tax to holders of Common Stock or rights to purchase Common Stock resulting from
any dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes. To the extent permitted by
applicable law, the Company from time to time may reduce the Conversion Price by
any amount for any period of time if the period is at least 20 days, the
reduction is irrevocable during the period and the Board of Directors shall have
made a determination that such reduction would be in the best interests of the
Company, which determination shall be conclusive and described in a Board
Resolution. Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to all holders of record of the Notes a notice
of the reduction at least 15 days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price and the
period it shall be in effect.
(i) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
price; provided, that any adjustments that by reason of this Section 14.5(i) are
not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Article 14 shall be made by
the Company and shall be made to the nearest one-hundredth of a cent or to the
nearest one-thousandth of a share, as the case may be.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value, or to or
from no par value, of the Common Stock.
To the extent the Notes become convertible into cash, assets,
property or securities (other than Common Stock of the Company), no adjustment
need be made thereafter as to the cash, assets, property or such securities
(except as such securities may otherwise by their terms provide), and interest
shall not accrue on such cash.
(j) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other than
the Trustee an Officers' Certificate setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the date on which each adjustment becomes
effective and shall mail such notice of such adjustment of the Conversion Price
to the holder of each Note at his last address appearing on the Note register
provided for in Section 2.5, within 20 days after execution thereof. Failure to
deliver such notice shall not effect the legality or validity of any such
adjustment.
(k) In any case in which this Section 14.5 provides that an
adjustment shall become effective immediately after a Record Date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
holder of any Note converted after such Record Date and before the occurrence of
such event the additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above the Common
Stock issuable upon such conversion before giving effect to such adjustment and
(ii) paying to such holder any amount in cash in lieu of any fraction pursuant
to Section 14.3.
14.6 Effect of Reclassification, Consolidation, Merger or Sale. If
any of the following events occur, namely (i) any reclassification or change of
outstanding shares of Common Stock (other than a change in par value, or to or
from no par value, as a result of a subdivision or combination), (ii) any
consolidation, merger or combination of the Company with another corporation as
a result of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock or (iii) any sale or conveyance of the properties
and assets of the Company as, or substantially as, an entirety to any other
corporation as a result of which holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock, then the Company or the
successor or purchasing corporation, as the case may be, shall execute with the
Trustee a supplemental indenture (which shall comply with the Trust Indenture
Act as in force at the date of execution of such supplemental indenture if such
supplemental indenture is then required to so comply) providing that such Note
shall be convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
by a holder of a number of shares of Common Stock issuable upon conversion of
such Notes (assuming, for such purposes, a sufficient number of authorized
shares of Common Stock available to convert all such Notes) immediately prior to
such reclassification, change, consolidation, merger, combination, sale or
conveyance, assuming such holder of Common Stock did not exercise his rights of
election, if any, as to the kind or amount of securities, cash or other property
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance (provided that, if the kind or amount of
securities, cash or other property receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of election shall
not have been exercised ("non-electing share"), then for the purposes of this
Section 14.6 the kind and amount of securities, cash or other property
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance for each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such supplemental indenture shall provide for adjustments
that shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article 14.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at his address appearing on the
Note register provided for in Section 2.5, within 20 days after execution
thereof. Failure to deliver such notice shall not affect the legality or
validity of such supplemental indenture.
The above provisions of this Section 14.6 shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 14.6 applies to any event or occurrence, Section 14.5
shall not apply.
14.7 Taxes on Shares Issued. The issue of stock certificates on
conversions of Notes shall be made without charge to the converting Noteholder
for any transfer or similar tax in respect of the issue thereof. The Company
shall not, however, be required to pay any tax that may be payable in respect of
any transfer involved in the issue and delivery of stock in any name other than
that of the holder of any Note converted, and the Company shall not be required
to issue or deliver any such stock certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
14.8 Reservation of Shares; Shares to be Fully Paid; Listing of
Common Stock. The Company shall provide, free from preemptive rights, out of
its authorized but unissued shares or shares held in treasury, sufficient shares
to provide for the conversion of the Notes from time to time as such Notes are
presented for conversion.
Before taking any action that would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company shall take all corporate
action that may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock that may be
issued upon conversion of Notes shall, upon issue, be fully paid and
nonassessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
The Company further covenants that it shall, if permitted by the
rules of the New York Stock Exchange, list and keep listed, so long as the
Common Stock shall be so listed on such exchange, all Common Stock issuable upon
conversion of the Notes.
14.9 Responsibility of Trustee. The Trustee and any other conversion
agent shall not at any time be under any duty or responsibility to any holder of
Notes to determine whether any facts exist that may require any adjustment of
the Conversion Price, or with respect to the nature or extent or calculation of
any such adjustment when made, or with respect to the method employed, or herein
or in any supplemental indenture provided to be employed, in making the same.
The Trustee and any other conversion agent shall not be accountable with respect
to the validity or value (or the kind or amount) of any shares of Common Stock,
or of any securities or property, that may at any time be issued or delivered
upon the conversion of any Note; and the Trustee and any other conversion agent
make no representations with respect thereto. Subject to the provisions of
Section 7.1, neither the Trustee nor any conversion agent shall be responsible
for any failure of the Company to issue, transfer or deliver any shares of
Common Stock or stock certificates or other securities or property or cash upon
the surrender of any Note for the purpose of conversion or to comply with any of
the duties, responsibilities or covenants of the Company contained in this
Article 14. Without limiting the generality of the foregoing, neither the
Trustee nor any conversion agent shall be under any responsibility to determine
whether a supplemental indenture under Section 14.6 hereof need to be entered
into or the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 14.6 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the conversion of their Notes after any event referred to in
such Section 14.6 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 7.1, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
14.10 Notice to Holders Prior to Certain Actions. In case:
(a) the Company makes any distribution or dividend that would require
an adjustment in the Conversion Price pursuant to Section 14.5; or
(b) the Company takes any action that would require a supplemental
indenture pursuant to Section 14.6; or
(c) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company,
the Company shall cause to be filed with the Trustee and to be mailed
to each holder of Notes at his address appearing on the Note register, as
promptly as possible but in any event at least 15 days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record date
is to be taken for the purpose of such dividend, distribution, rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution, rights
or warrants are to be determined or (y) the date on which such reclassification,
change, consolidation, merger, sale, conveyance, transfer, dissolution,
liquidation or winding-up is expected to become effective or occur and the date
as of which it is expected that holders of record of Common Stock shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, change, consolidation, merger, sale,
conveyance, transfer, dissolution, liquidation or winding-up. Failure to give
such notice, or any defect therein, shall not affect the legality or validity of
such dividend, distribution, reclassification, change, consolidation, merger,
sale, conveyance, transfer, dissolution, liquidation or winding-up. Neither the
failure to give such notice nor any defect therein shall affect the legality or
validity of the proceedings referenced in clauses (a) through (c) of this
Section 14.10.
ARTICLE 15.
SUBORDINATION
15.1 Agreement to Subordinate. The Company agrees, and each
Noteholder by accepting a Note agrees, that the indebtedness evidenced by the
Note is subordinated in right of payment, to the extent and in the manner
provided in this Article 15, to the prior payment in full of all Senior
Indebtedness and that the subordination is for the benefit of the holders of
Senior Indebtedness.
15.2 Certain Definitions. For purposes of this Article 15, the
following terms shall have the meaning indicated:
(1) "Representative" shall mean the indenture trustee or other
trustee, agent or representative for any Senior Indebtedness.
(2) "Senior Indebtedness" with respect to the Notes means the
principal of, premium, if any, and interest on, and any fees, costs, expenses
and any other amounts (including indemnity payments) related to the following,
whether outstanding on the date hereof or hereafter incurred or created: (a)
indebtedness, matured or unmatured, whether or not contingent, of the Company
for money borrowed evidenced by notes or other written obligations, (b) any
interest rate contract, interest rate swap agreement or other similar agreement
or arrangement designed to protect the Company or any of its subsidiaries
against fluctuations in interest rates, (c) indebtedness, matured or unmatured,
whether or not contingent, of the Company evidenced by notes, debentures, bonds
or similar instruments or letters of credit (or reimbursement agreements in
respect thereof), (d) obligations of the Company as lessee under capitalized
leases, (e) indebtedness of others of any of the kinds described in the
preceding clauses (a) through (d) assumed or guaranteed by the Company and (f)
renewals, extensions, modifications, amendments, and refundings of, and
indebtedness and obligations of a successor person issued in exchange for or in
replacement of, indebtedness or obligations of the kinds described in the
preceding clauses (a) through (f), unless the agreement pursuant to which any
such indebtedness described in clauses (a) through (f) is created, issued,
assumed or guaranteed expressly provides that such indebtedness is not senior or
superior in right of payment to the Notes; provided that the following shall not
constitute Senior Indebtedness: (i) any indebtedness or obligation of the
Company in respect of the Notes, (ii) any indebtedness of the Company to any of
its subsidiaries or other Affiliates; (iii) any indebtedness that is
subordinated or junior in any respect to any other indebtedness of the Company
other than Senior Indebtedness; and (iv) any indebtedness incurred for the
purchase of goods or materials in the ordinary course of business.
For the purposes of this Indenture, Senior Indebtedness shall not be
deemed to have been paid in full until the holders of the Senior Indebtedness
shall have indefeasibly received payment in full in cash of all Senior
Indebtedness; provided that if any holder of Senior Indebtedness agrees to
accept payment in full of such Senior Indebtedness for consideration other than
cash, such holder shall be deemed to have indefeasibly received payment in full
of such Senior Indebtedness. The provisions of this Article 15 shall continue
to be effective or be reinstated, as the case may be, if at any time any payment
of any of the Senior Indebtedness is rescinded or must otherwise be returned by
any holder of Senior Indebtedness upon the insolvency, bankruptcy or
organization of the Company or otherwise, all as though such payment had not
been made.
A distribution may consist of cash, securities or other property, by
set-off or otherwise.
15.3 Liquidation; Dissolution; Bankruptcy. Upon any distribution to
creditors of the Company in a liquidation or dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property, in an assignment for the benefit of
creditors or any marshalling of the Company's assets and liabilities, (a)
holders of Senior Indebtedness shall be entitled to receive payment in full of
all amounts due or to become due thereon before Noteholders shall be entitled to
receive any payment with respect to the principal of, premium, if any, or
interest on the Notes (except that Noteholders may receive securities that are
subordinated to at least the same extent as the Notes to Senior Indebtedness and
any securities issued in exchange for Senior Indebtedness) and (b) until all
Senior Indebtedness (as provided in clause (a) above) is paid in full, any
distribution to which Noteholders would be entitled but for this Article shall
be made to holders of Senior Indebtedness (except that Noteholders may receive
securities that are subordinated to at least the same extent as the Notes to (x)
Senior Indebtedness and (y) any securities issued in exchange for Senior
Indebtedness), as their interests may appear.
15.4 Default on Senior Indebtedness. The Company may not make any
payment of principal, premium (if any) or interest on the Notes (except in such
subordinated securities) and may not repurchase, redeem or otherwise retire any
Notes if:
(a) a default in the payment of the principal of, premium, if any, or
interest on Senior Indebtedness occurs and is continuing beyond any applicable
period of grace; or
(b) any other default occurs and is continuing with respect to Senior
Indebtedness that permits holders of the Senior Indebtedness as to which such
default relates to accelerate its maturity and the Trustee receives a notice of
the default (a "Payment Blockage Notice") from the representative or
representatives of holders of at least a majority in principal amount of Senior
Indebtedness then outstanding. Payments on the Notes may and shall be resumed
(i) in the case of a payment default, upon the date on which such default is
cured or waived, or (ii) in the case of non-payment default, 179 days after the
date on which applicable Payment Blockage Notice is received, unless the
maturity of any Senior Indebtedness has been accelerated. No new period of
payment blockage may be commenced within 360 days after the receipt by the
Trustee of any prior Payment Blockage Notice. No nonpayment default that
existed or was continuing on the date of delivery of any such Payment Blockage
Notice to the Trustee shall be, or be made, the basis for a subsequent Payment
Blockage Notice unless such default shall have been cured or waived for a period
of not less than 180 days.
The Company may and shall resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(c) in the case of a payment default, upon the date on which the
default is cured or waived, or
(d) in the case of a default referred to in Section 15.4(b) hereof,
179 days after the date on which the applicable Payment Blockage Notice is
received, unless the maturity of such Senior Indebtedness has been accelerated.
No new period of payment blockage may be commenced within 360 days after the
receipt by the Trustee of any prior Payment Blockage Notice. No default
referred to in Section 15.4(b) hereof that existed or was continuing on the date
of delivery of any Payment Blockage Notice to the Trustee shall be, or be made,
the basis for a subsequent Payment Blockage Notice unless such default shall
have been cured or waived for a period of not less than 180 days,
if this Article 15 otherwise permits the payment, distribution or
acquisition at the time of such payment or acquisition.
15.5 When Distribution Must Be Paid Over. In the event that the
Trustee (or Paying Agent if other than the Trustee) or any Noteholder receives
any payment of principal or interest with respect to the Notes at a time when
such payment is prohibited by Section 15.3 or 15.4 hereof, such payment shall be
held by the Trustee (or Paying Agent if other than the Trustee) or such
Noteholder, in trust for the benefit of, and immediately shall be paid over and
delivered, upon written request, to, the holders of Senior Indebtedness as their
interests may appear (if there is no representative) or their Representative
under the indenture or other agreement (if any) pursuant to which Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 15, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Noteholders or the Company or any other person money or assets to
which any holders of Senior Indebtedness shall be entitled by virtue of this
Article 15, except if such payment is made as a result of the willful misconduct
or gross negligence of the Trustee.
15.6 Notice by Company. The Company shall promptly notify the
Trustee and the Paying Agent of any facts known to the Company that would cause
a payment of any principal or interest with respect to the Notes to violate this
Article 15, but failure to give such notice shall not affect the subordination
of the Notes to the Senior Indebtedness as provided in this Article 15.
15.7 Subrogation. After all Senior Indebtedness is paid in full and
until the Notes are paid in full, Noteholders shall be subrogated (equally and
ratably with all other Indebtedness pari passu with the Notes) to the rights of
holders of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness to the extent that distributions otherwise payable to the
Noteholders have been applied to the payment of Senior Indebtedness. A
distribution made under this Article 15 to holders of Senior Indebtedness that
otherwise would have been made to Noteholders is not, as between the Company and
Noteholders, a payment by the Company on the Notes.
15.8 Relative Rights. This Article 15 defines the relative rights
of Noteholders and holders of Senior Indebtedness. Nothing in this Indenture
shall:
(a) impair, as between the Company and the Noteholders, the
obligation of the Company, which is absolute and unconditional, to pay principal
of and interest on the Notes in accordance with their terms;
(b) affect the relative rights of Noteholders and creditors of the
Company other than their rights in relation to holders of Senior Indebtedness;
or
(c) prevent the Trustee or any Noteholder from exercising its
available remedies upon a default or Event of Default, subject to the rights of
holders and owners of Senior Indebtedness to receive distributions and payments
otherwise payable to Noteholders.
If the Company fails because of this Article 15 to pay principal of
or interest on a Note on the due date, the failure is still a default or Event
of Default.
15.9 Subordination May Not Be Impaired by Company. No right of any
holder of Senior Indebtedness to enforce the subordination of the indebtedness
evidenced by the Notes shall be impaired by any act or failure to act by the
Company or any holder of Notes or by the failure of the Company or any holder of
Notes to comply with this Indenture.
15.10 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 15, the Trustee and the Noteholders shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other person making any distribution to the Trustee or to the Noteholders for
the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
15.
15.11 Rights of Trustee and Paying Agent. Notwithstanding the
provisions of this Article 15 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee and the Paying Agent may continue to make payments on the Notes, unless
the Trustee shall have received at its Corporate Trust Office at least three
Business Days prior to the date of such payment written notice of facts that
would cause the payment of any principal and interest with respect to the Notes
to violate this Article 15. Only the Company or a Representative may give the
notice. Nothing in this Article 15 shall impair the claims of, or payments to,
the Trustee under or pursuant to Section 7.7 hereof.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a person representing himself to be a holder of Senior
Indebtedness (or a representative) to establish that such notice has been given
by a holder of Senior Indebtedness (or a representative). In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any person as a holder of Senior Indebtedness to participate in
any payment or distribution pursuant to this Article 15, the Trustee may request
such person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness held by such person, the extent to which
such person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such person under this Article 15, and if
such evidence is not furnished, the Trustee may defer any payment which it may
be required to make for the benefit of such person pursuant to the terms of this
Indenture pending judicial determination as to the rights of such person to
receive such payment.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
15.12 Authorization to Effect Subordination. Each holder of a Note
by the holder's acceptance thereof authorizes and directs the Trustee on the
holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 15, and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
Without limiting the foregoing, each Representative is hereby irrevocably
authorized and empowered (in its own name or in the name of the Noteholders or
the Trustee or otherwise), but shall have no obligation, to demand, sue for,
collect and receive every payment or distribution referred to in Section 15.3
above and give acquittance therefor and to file claims and proofs of claim and
take such other action as it may deem necessary or advisable for the exercise or
enforcement of any of the rights or interests of the holders or owners of the
Senior Indebtedness hereunder; provided that for purposes of this Section 15.12
holders or owners of Senior Indebtedness may act only through such
Representative.
15.13 Conversions Not Deemed Payment. For the purposes of this
Article 15 only, the issuance and delivery of Common Stock upon conversion of
the Notes in accordance with Article 14 shall not be deemed to constitute a
payment or distribution on account of the principal of or interest on the Notes
or on account of the purchase or other acquisition of Notes. Nothing contained
in this Article or elsewhere in this Indenture or in the Notes is intended to or
shall impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the holders, the right, which is absolute and unconditional, of
the holder of any Note to convert such Note in accordance with Article 14.
15.14 Amendments. The provisions of this Article 15 shall not be
amended or modified without the written consent of the holders of Senior
Indebtedness.
ARTICLE 16.
MISCELLANEOUS PROVISIONS
16.1 Provisions Binding on Company's Successors. All the covenants,
stipulations, promises and agreements in this Indenture made by the Company
shall bind its successors and assigns whether so expressed or not.
16.2 Official Acts by Successor Company. Any act or proceeding by
any provision of this Indenture authorized or required to be done or performed
by any board (including the Board of Directors), committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
16.3 Addresses for Notices, Etc. Any notice or demand that by any
provision of this Indenture is required or permitted to be given or served by
the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes if given or served by being
sent by prepaid overnight delivery or being deposited postage prepaid by
registered or certified mail in a post office letter box addressed (until
another address is filed by the Company with the Trustee) to Nine West Group
Inc., 9 West Broad Street, Stamford, Connecticut 06902, Attention: Chief
Financial Officer with a copy to Simpson Thacher & Bartlett, 425 Lexington
Avenue, New York, New York 10017, Attention: Andrew R. Keller, Esq. Any notice,
direction, request or demand hereunder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or served by
being sent by prepaid overnight delivery or being deposited postage prepaid by
registered or certified mail in a post office letter box addressed to the
Corporate Trust Office of the Trustee, which office is, at the date as of which
this Indenture is dated, located at 450 West 33rd Street, New York, New York
10001, Attention: Corporate Trust Administration.
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note register and shall be sufficiently given to him if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Noteholder or any
defect in it shall not affect its sufficiency with respect to other Noteholders.
If a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
16.4 Communications by Holders with Other Holders. Noteholders may
communicate pursuant to Section 312(b) of the Trust Indenture Act with other
Noteholders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Note registrar and any other person shall have the
protection of Section 312(c) of the Trust Indenture Act.
16.5 Governing Law. This Indenture and each Note shall be deemed to
be a contract made under the substantive laws of New York and for all purposes
shall be construed in accordance with the substantive laws of New York without
regard to conflicts of laws principles thereof.
16.6 Evidence of Compliance with Conditions Precedent; Certificates
to Trustee. Upon any application or demand by the Company to the Trustee to
take any action under any of the provisions of this Indenture, including those
actions set forth in Trust Indenture Act Section 314(c), the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, and an Opinion of Counsel stating that, in the
Opinion of such Counsel, all such conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
16.7 Legal Holidays. In any case where the date of maturity of
interest on or principal of the Notes or the date fixed for redemption of any
Note shall not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period from and after such date.
16.8 No Security Interest Created. Nothing in this Indenture or in
the Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction where property of the
Company or its subsidiaries is located.
16.9 Trust Indenture Act. This Indenture is hereby made subject to,
and shall be governed by, the provisions of the Trust Indenture Act deemed to be
part of and to govern indentures qualified under the Trust Indenture Act.
16.10 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with the duties imposed by operation
of the Trust Indenture Act, the imposed duties, upon qualification of this
Indenture under the Trust Indenture Act, shall control.
16.11 Benefits of Indenture. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any person, other than the parties
hereto, any paying agent, any authenticating agent, any Note registrar and their
successors hereunder and the holders of Notes, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
16.12 Table of Contents, Headings Etc. The table of contents and
the titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
16.13 Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7 and 3.3, as fully to all intents and
purposes as though the authenticating agent had been expressly authorized by
this Indenture and those Sections to authenticate and deliver Notes. For all
purposes of this Indenture, the authentication and delivery of Notes by the
authenticating agent shall be deemed to be authentication and delivery of such
Notes "by the Trustee" and a certificate of authentication executed on behalf of
the Trustee by an authenticating agent shall be deemed to satisfy any
requirement hereunder or in the Notes for the Trustee's certificate of
authentication. Such authenticating agent shall at all times be a person
eligible to serve as Trustee hereunder pursuant to Section 7.10.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor company is otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of
the parties hereto or the authenticating agent or such successor company.
Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall promptly appoint a successor authenticating agent (which may be
the Trustee), shall give written notice of such appointment to the Company and
shall mail notice of such appointment to all holders of Notes as the names and
addresses of such holders appear on the Note register.
The Company agrees to pay to the authenticating agent from time to
time reasonable compensation for its services.
The provisions of Sections 7.3, 7.4, 7.5, 8.3 and this Section 16.13
shall be applicable to any authenticating agent.
16.14 Execution in Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly signed and attested, all as of the date first written above.
NINE WEST GROUP INC.
By:
--------------------------
Name:
Title:
Attest:
- --------------------------
Chemical Bank hereby accepts the trusts in this Indenture declared
and provided, upon the terms and conditions hereinabove set forth.
CHEMICAL BANK, as Trustee
By:
-----------------------------
Name:
Title:
Attest:
- -----------------------
NOTE RESALE REGISTRATION RIGHTS AGREEMENT
Dated as of June 26, 1996
by and among
NINE WEST GROUP INC.
and
THE PURCHASERS NAMED HEREIN
This Note Resale Registration Rights Agreement (this "Agreement") is
made and entered into as of June 26, 1996 by and among NINE WEST GROUP INC., a
Delaware corporation (the "Company"), and BEAR, STEARNS & CO. INC. and MORGAN
STANLEY & CO. INCORPORATED (collectively, the "Purchasers"), which the
Purchasers have agreed to purchase from the Company up to $175,000,000
($201,250,000 if the Purchasers exercise the over-allotment option in full),
principal amount of 5-1/2% Convertible Subordinated Notes due 2003 (the "Notes")
pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated June
20, 1996 (the "Purchase Agreement"), by and among the Company and the
Purchasers. In order to induce the Purchasers to purchase the Notes, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is provided for in the
Purchase Agreement.
The parties hereby agree as follows:
1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Agreement: As defined in the preamble hereto.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Business Day: A day other than a Saturday, a Sunday, a day on which the
banking institutions in the State and City of New York are authorized or
obligated by law or executive order to close or a day that is declared a
national or New York state holiday.
Closing Date: The date of this Agreement.
Commission: Securities and Exchange Commission.
Common Stock: Common Stock of the Company, par value $.01 per share,
issuable upon conversion of the Notes.
Company: As defined in the preamble hereto.
Consummate: An Exchange Offer shall be deemed "Consummated" for purposes
of this Agreement upon (i) the filing and effectiveness under the Securities Act
of the Exchange Offer Registration Statement relating to the New Notes to be
issued in the Exchange Offer, (ii) the maintenance of such Exchange Offer
Registration Statement continuously effective and the keeping of the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to consummate the Exchange Offer,
and (iii) the delivery by the Company to the registrar under the Indenture of
New Notes in the same aggregate principal amount as the aggregate principal
amount of Notes that were tendered by Holders thereof pursuant to the Exchange
Offer.
Effectiveness Target Date: As defined in Section 3(a) hereof.
Exchange Act: Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
Exchange Offer: The registration by the Company under the Securities Act
of the New Notes pursuant to the Exchange Offer Registration Statement through
which the Company offers the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer Restricted
Securities held by such Holders for New Notes in an aggregate principal amount
equal to the aggregate principal amount of the Transfer Restricted Securities
tendered in such exchange offer by such Holders.
Exchange Offer Registration Statement: As defined in Section 3(b).
Holder: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 6(a) hereof.
Indenture: The Indenture, dated as of June 26, 1996, by and between the
Company and Chemical Bank, as trustee (the "Trustee"), pursuant to which the
Notes are to be issued, as such Indenture is amended, modified or supplemented
from time to time in accordance with the terms thereof.
NASD: National Association of Securities Dealers, Inc.
New Notes: As defined in Section 3(b) hereof.
Notes: As defined in the preamble hereto.
Person: A corporation, an association, a partnership, an individual, a
joint venture, a joint stock company, a trust, an unincorporated organization or
a government or an agency or political subdivision thereof.
Prospectus: The prospectus included in any Registration Statement, as
amended or supplemented including without limitation by any post-effective
amendments thereto, and all material incorporated by reference into such
prospectus.
Purchase Agreement: As defined in the preamble hereto.
Purchasers: As defined in the preamble hereto.
Registration Statement: The Shelf Registration Statement or the Exchange
Offer Registration Statement of the Company that is filed pursuant to the
provisions of Section 3 hereof, including the Prospectus included therein, all
amendments and supplements thereto (including any post-effective amendments) and
all exhibits and material incorporated by reference therein.
Securities Act: Securities Act of 1933, as amended.
Shelf Filing Deadline: As defined in Section 3(a) hereof.
Shelf Registration Statement: As defined in Section 3(a) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb), as
amended and in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, (other than any Note
represented by the Regulation S Global Note or any definitive Note not bearing
the legend required by Section 2.3 of the Indenture) and any Common Stock issued
upon conversion of any such Note, until the earliest to occur of (i) the date on
which such Note or Common Stock, as the case may be, has been effectively
registered under the Securities Act and disposed of in accordance with an
effective Shelf Registration Statement, (ii) the date on which such Note is
exchanged for a New Note in the Exchange Offer and entitled to be resold to the
public by the Holder thereof without complying with the prospectus delivery
requirements of the Securities Act and (iii) the date on which such Note or
Common Stock, as the case may be, is distributed to the public pursuant to Rule
144 under the Securities Act or by a Broker-Dealer pursuant to the "Plan of
Distribution" contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein).
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be a
holder of Transfer Restricted Securities (each, a "Holder") whenever such Person
owns Transfer Restricted Securities of record.
3. REGISTRATION
(a) Shelf Registration. The Company hereby agrees to:
(i) use its best efforts to file or cause to be filed a continuous
registration statement pursuant to Rule 415 under the Securities Act (together
with the Prospectus included therein, all amendments and supplements thereto
(including post-effective amendments) and all exhibits and materials
incorporated by reference therein, the "Shelf Registration Statement") on or
prior to the 90th day after the Closing Date (the "Shelf Filing Deadline"),
which Shelf Registration Statement shall provide for resales of all Transfer
Restricted Securities, provided that the Holders thereof shall have provided the
information required pursuant to Section 3(b) hereof; and
(ii) use all reasonable efforts to cause the Shelf Registration
Statement to be declared effective by the Commission as promptly as practicable
after the Closing Date (the "Effectiveness Target Date").
Subject to any notice by the Company in accordance with Section 4(b) hereof of
the existence of any fact or event of the kind described in Section 4(b)(iii)(D)
hereof, the Company shall use all reasonable efforts to keep the Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 4(a) and (b) hereof to the extent
necessary to ensure that it is available for resales of Transfer Restricted
Securities by the Holders of Transfer Restricted Securities entitled to the
benefit of this Section 3(a) and to ensure that the Shelf Registration Statement
conforms to the requirements of this Agreement, the Securities Act and the
policies, rules and regulations of the Commission as announced from time to time
thereunder for a period of at least three years following the Closing Date,
provided that the Company shall not be obligated to keep the Shelf Registration
Statement effective, if it has received an opinion from its outside counsel,
Simpson, Thacher & Bartlett, or other counsel reasonably acceptable to the
Purchasers ("Company Counsel"), to the effect that the Restricted Transfer
Securities can be freely tradable without the continued effectiveness of the
Shelf Registration Statement.
(b) Certified Securities; Provision by Holders of Certain
Information in Connection with the Shelf Registration Statement. No Holder of
Transfer Restricted Securities may include any of its Transfer Restricted
Securities in any Shelf Registration Statement pursuant to this Agreement until
such Holder furnishes to the Company in writing, within 20 business days after
receipt of a request therefor, such information as the Company may reasonably
request for use in connection with the Shelf Registration Statement or any
Prospectus or preliminary Prospectus included therein. In connection with all
such requests for information from Holders of Transfer Restricted Securities,
the Company shall notify such Holders of the requirements set forth in the
preceding sentence. Each Holder as to which any Shelf Registration Statement is
being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
(c) Registered Exchange Offer. If, based upon a written opinion of
Company Counsel addressed and delivered to the Holders, the Company determines
that it is permissible under applicable law and Commission policy to Consummate
an Exchange Offer, the Company may at its election Consummate an Exchange Offer
in lieu of filing and maintaining the Shelf Registration Statement described
herein. If the Company elects to Consummate an Exchange Offer in accordance
with the provisions hereof, the Company shall (i) cause to be filed with the
Commission no later than the Shelf Filing Deadline (or later if the Company has
filed and maintained a Shelf Registration Statement pursuant to this Agreement),
a Registration Statement (the "Exchange Offer Registration Statement") under the
Securities Act relating to (A) a new issue of notes identical in all material
respects to the Notes except as to transfer restrictions (the "New Notes") and
(B) the shares of Common Stock issuable upon conversion of such New Notes, (ii)
use all reasonable efforts to cause such Registration Statement to become
effective no later than the Effectiveness Target Date, (iii) in connection with
the foregoing, file (A) all pre-effective amendments to such Registration
Statement as may be necessary in order to cause such Registration Statement to
become effective, (B) if applicable, a post-effective amendment to such
Registration Statement pursuant to Rule 430A under the Securities Act and (C)
cause all necessary filings in connection with the registration and
qualification of the New Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer and
(iv) upon the effectiveness of the Registration Statement, commence the Exchange
Offer. The Company shall cause the Exchange Offer to comply with all applicable
federal and state securities laws. No securities other than the New Notes (and
the shares of Common Stock issuable upon conversion of such New Notes) shall be
included in the Exchange Offer Registration Statement. The Company shall use
all reasonable efforts to cause the Exchange Offer to be Consummated on the
earliest practicable date after the Exchange Offer Registration Statement has
become effective, but in no event later than 30 Business Days after such
effectiveness. The Exchange Offer shall be on the appropriate form permitting
registration of the New Notes to be offered in exchange for the Notes and to
permit resales of New Notes and shares of Common Stock received by
Broker-Dealers in the Exchange Offer by delivering the Prospectus contained in
the Exchange Offer Registration Statement. The "Plan of Distribution" section
in the Prospectus contained in the Exchange Offer Registration Statement shall
not name any such Broker-Dealer or disclose the amount of Notes held by any such
Broker-Dealer except to the extent required by Commission policy. The Company
shall use its best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended to the extent necessary to
ensure that it is available for resales of New Notes acquired by Broker-Dealers
for their own accounts as a result of market-making activities or other trading
activities, and to ensure that it conforms with the requirements of this
Agreement, the Securities Act and the policies, rules and regulations of the
Commission as announced from time to time, for a period of one year from the
date on which the Exchange Offer Registration Statement is declared effective.
The Company shall provide sufficient copies of the latest version of such
Prospectus to Broker-Dealers promptly upon request at any time during such
one-year period in order to facilitate such resales. Notwithstanding anything
herein to the contrary, despite the Consummation of an Exchange Offer, the
Company shall be required to file the Shelf Registration Statement in accordance
with Section 3(a) hereof if any Holder of Transfer Restricted Securities shall
notify the Company within 20 Business Days of the Consummation of the Exchange
Offer (x) that such Holder is prohibited by applicable law or Commission policy
from participating in the Exchange Offer, (y) that such Holder may not resell
the New Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and that the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder or (z) that such Holder is a Broker-Dealer and holds Notes acquired
directly from the Company or one of its affiliates.
4. REGISTRATION PROCEDURES
(a) In connection with any Shelf Registration Statement, the Company
shall comply with all the provisions of Section 4(b) below and shall use all
reasonable efforts to effect such registration to permit the resale of the
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution thereof. The parties hereto agree that the Transfer
Restricted Securities shall not be sold in any Underwritten Offering and the
Company shall in no event be required to cooperate with or pay for any
Underwritten Offering.
(b) In connection with any Registration Statement and any Prospectus
required by this Agreement, the Company shall:
(i) subject to any notice by the Company in accordance with
this Section 4(b) of the existence of any fact or event of the kind described in
Section 4(b)(iii)(D) hereof, use all reasonable efforts to cause to become
effective and to keep such Registration Statement continuously effective and
provide all requisite financial statements for the period specified in Section 3
of this Agreement; upon the occurrence of any event that would cause such
Registration Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not to be effective and usable for
resales of Transfer Restricted Securities during the period required by this
Agreement, the Company shall file promptly an appropriate amendment to such
Registration Statement correcting any such misstatement or omission, and, in the
case of either clause (A) or reasonable efforts to cause such amendment to be
declared effective and such Registration Statement and the related Prospectus to
become usable for their intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to such Registration Statement as may be necessary to
keep such Registration Statement effective for the applicable period set forth
in Section 3 hereof, or such shorter period as shall terminate when all Transfer
Restricted Securities covered by such Registration Statement have been sold;
cause the Prospectus to be supplemented by any required Prospectus supplement,
and as so supplemented, cause the Prospectus to be filed pursuant to Rule 424
under the Securities Act and to comply fully with the applicable provisions of
Rules 424 and 430A under the Securities Act in a timely manner; and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during the applicable period
in accordance with the intended method or methods of distribution by the sellers
thereof set forth in such Registration Statement or supplement to the
Prospectus;
(iii) advise the selling Holders promptly and, if requested by
such Persons, to confirm such advice in writing, (A) when the Prospectus or any
Prospectus supplement or post-effective amendment to any Registration Statement
has been filed, and, with respect to any Registration Statement or any
post-effective amendment thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information
relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Securities
Act or of the suspension by any state securities commission of the qualification
of the Transfer Restricted Securities for offering or sale in any jurisdiction
or of the initiation of any proceeding for any of the preceding purposes or (D)
of the existence of any fact or the happening of any event (including without
limitation pending negotiations relating to, or the consummation of, a
transaction or the occurrence of any event that would require additional
disclosure of material, non-public information by the Company in the
Registration Statement as to which the Company has a bona fide business purpose
for preserving confidentiality or that renders the Company unable to comply with
Commission requirements) that makes untrue any statement of a material fact made
in the Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein, or that requires the
making of any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading. If at any
time the Commission shall issue any stop order suspending the effectiveness of
the Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under state
securities or Blue Sky laws, the Company shall use its best efforts to obtain
the withdrawal or lifting of such order at the earliest possible time;
(iv) furnish to each of the selling Holders, upon request,
before filing with the Commission, copies of any Registration Statement or any
Prospectus included therein and any amendments or supplements thereto (including
all documents incorporated by reference prior to the effectiveness of such
Registration Statement), which documents, other than documents incorporated by
reference, shall be subject to the review of such Holders for a period of at
least 5 Business Days, and the Company shall not file any such Registration
Statement or Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus to which a selling Holder of Transfer Restricted
Securities covered by such Registration Statement shall reasonably object within
5 Business Days after the receipt thereof; a selling Holder or shall be deemed
to have reasonably objected to such filing only if such Registration Statement,
amendment, Prospectus or supplement, as applicable, as proposed to be filed,
contains a material misstatement or omission;
(v) if practicable, promptly prior to the filing of any
document that is to be incorporated by reference into a Registration Statement
or Prospectus subsequent to the effectiveness thereof, and in any event no later
than the date such document is filed with the Commission, provide copies of such
document to the selling Holders, if requested, make representatives of the
Company available in person or by conference call for discussion of such
document and other customary due diligence matters, and include such information
in such document prior to the filing thereof as such selling Holders reasonably
may request;
(vi) subject to having received reasonable assurances of
confidentiality from any such selling Holders, attorneys or accountants, make
available at reasonable times for inspection by the selling Holders, and any
attorney or accountant retained by such selling Holders all financial and other
records, pertinent corporate documents and properties of the Company and cause
the officers, directors and employees of the Company to supply all information
reasonably requested by any such selling Holder, attorney or accountant in
connection with such Registration Statement subsequent to the filing thereof and
prior to its effectiveness;
(vii) if requested by any selling Holder promptly incorporate
in any Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such selling Holders
may reasonably request to have included therein, the purchase price being paid
therefor and any other terms of the offering of the Transfer Restricted
Securities or New Notes to be sold in such offering; and make all required
filings of any such Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment;
(viii) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating
agencies, if so requested by the Holders of a majority in aggregate principal
amount of Notes or New Notes covered thereby;
(ix) Upon any selling Holder's written request, furnish to
such selling Holder without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment thereto,
including all documents incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);
(x) deliver to each selling Holder without charge, as many
copies of the Prospectus (including each preliminary prospectus intended for
public distribution) and any amendment or supplement thereto as such selling
Holder reasonably may request; subject to any notice by the Company in
accordance with this Section 4(b) of the existence of any fact or event of the
kind described in Section 4(b)(iii)(D) hereof, the Company hereby consents to
the use of the Prospectus and any amendment or supplement thereto by each of the
selling Holders in connection with the offering and the sale of the Transfer
Restricted Securities or New Notes covered by the Prospectus or any amendment or
supplement thereto;
(xi) subject to any notice by the Company in accordance with
this Section 4(b) of the existence of any fact or event of the kinds described
in Section 4(b)(iii)(D) hereof, take all such other customary actions in
connection therewith in order to expedite or facilitate the disposition of the
Transfer Restricted Securities or New Notes pursuant to any Registration
Statement contemplated by this Agreement, all to such extent as may be requested
by any Purchaser or by any Holder of Transfer Restricted Securities in
connection with any sale or resale pursuant to any Registration Statement
contemplated by this Agreement, and the Company shall:
(A) furnish to each Purchaser and each selling Holder,
upon the date of the effectiveness of the Shelf Registration Statement, and, to
the extent applicable, upon the Consummation of the Exchange Offer copies of the
following:
(1) a certificate, dated the date of effectiveness
of the Shelf Registration Statement (or, to the extent applicable, dated the
date of Consummation of the Exchange Offer) signed by (y) the president or chief
executive officer of the Company and (z) the chief financial officer or the
principal financial or accounting officer of the Company, confirming, as of the
date thereof, the matters set forth in Section 6(c)(i) and (iii) of the Purchase
Agreement and such other matters as such parties reasonably requested at the
time of effectiveness of the Shelf Registration Statement;
(2) opinions, dated the date of effectiveness of
the Shelf Registration Statement (or, to the extent applicable, dated the date
of Consummation of the Exchange Offer) of Company Counsel, covering the matters
set forth in Section 6(a) of the Purchase Agreement and addressed to all
Purchasers and selling Holders; and
(3) a customary comfort letter, dated as of the
date of effectiveness of the Shelf Registration Statement (and, to the extent
applicable, as of the date of Consummation of the Exchange Offer) from the
independent certified public accountants of the Company, in the customary form,
addressed to all Purchasers and selling Holders, and addressing the matters set
forth in the comfort letters delivered pursuant to Section 6(d) of the Purchase
Agreement, without exception;
(B) deliver such other documents and certificates as
were reasonably requested at the time of effectiveness of the Shelf Registration
Statement by such parties to evidence compliance with clause (A) above.
If at any time the representations and warranties of the Company
indirectly referenced in clause (A)(1) above cease to be true and correct, the
Company shall so advise the Purchasers and each selling Holder promptly and, if
requested by such Persons, shall confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders, and their respective counsel in
connection with the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such domestic jurisdictions
as the selling Holders may request; and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Transfer Restricted Securities covered by the Shelf
Registration Statement; provided that the Company shall not be required to
register or qualify as a foreign corporation where it is not now so qualified or
to take any action that would subject it to service of process in suits or to
taxation, other than as to matters and transactions relating to the Registration
Statement, in any domestic jurisdiction where it is not now so subject;
(xiii) cooperate with the selling Holders to facilitate the
timely preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and registered in
such names as the selling Holders may request at least two Business Days prior
to any sale of Transfer Restricted Securities;
(xiv) use all reasonable efforts to cause the Transfer
Restricted Securities covered by the Registration Statement to be registered
with or approved by such other domestic governmental agencies or authorities as
may be necessary to enable the selling Holder(s) thereof to consummate the
disposition of such Transfer Restricted Securities, subject to the proviso
contained in clause (xii) above;
(xv) as soon as reasonably practicable after the occurrence of
any fact or event of the kind described in Section 4(b)(iii)(D) above, prepare a
supplement or post-effective amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference or file any other
required document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus shall not contain an untrue statement of a
material fact or omit to state any material fact necessary, in light of the
circumstances in which it was made, to make the statements therein not
misleading, provided that notwithstanding anything to the contrary herein, the
Company shall not be required to prepare and file such a supplement or
post-effective amendment or document if the fact no longer exists; and provided,
further, that, in the event of a material business transaction (including
without limitation pending negotiations relating to such a transaction) that,
based upon the advice of the Company Counsel, would require disclosure by the
Company in the Registration Statement of material, nonpublic information that
the Company has a bona fide business purpose for not disclosing, then for so
long as such circumstances and such business purpose continue to exist, the
Company shall not be required to prepare and file a supplement or post-effective
amendment hereunder;
(xvi) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the Registration Statement and
provide the Trustee under the Indenture with certificates for the Notes or New
Notes, as the case may be, that are in a form eligible for deposit with The
Depository Trust Company;
(xvii) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally available
to its security holders, in a regular filing on Form 10-Q or Form 10-K, a
consolidated earnings statement meeting the requirements of Rule 158 (which need
not be audited) for the twelve-month period beginning with the Company's first
fiscal quarter commencing after the effective date of the Registration
Statement;
(xviii) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement required to be
filed by this Agreement, and, in connection therewith, cooperate with the
Trustee and the Holders of Notes to effect such changes to the Indenture as may
be required for such Indenture to be so qualified in accordance with the terms
of the TIA, and execute, and use all reasonable efforts to cause the Trustee to
execute, all documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner;
(xix) cause all Transfer Restricted Securities covered by the
Registration Statement to be listed on each securities exchange on which similar
securities issued by the Company are then listed if requested by the Holders of
a majority in aggregate principal amount of Transfer Restricted Securities; and
(xx) provide promptly to each Holder upon request any document
filed with the Commission pursuant to the requirements of Section 13 and Section
15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
or event of the kind described in Section 4(b)(iii)(D) hereof, such Holder
shall: (i) keep the fact of such notice confidential and (ii) forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of a
supplemented or amended Prospectus as contemplated by Section 4(b)(xv) hereof,
or until it receives advice in writing (the "Advice") from the Company that the
use of the Prospectus may be resumed, and has received copies of any additional
or supplemental filings that are incorporated by reference in the Prospectus.
If so directed by the Company, each Holder shall deliver to the Company (at the
expense of the Company) all copies, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company shall give any such notice, the time period regarding the
effectiveness of such Registration Statement set forth in Section 3 hereof shall
be extended by the number of days during the period from and including the date
of the giving of such notice pursuant to Section 4(b)(iii)(D) hereof to and
including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended
prospectus contemplated by Section 4(b)(xv) hereof or shall have received the
Advice, provided that the time period regarding the effectiveness of such
Registration Statement set forth in Section 3 hereof shall not be extended, if
the Company has received an opinion from Company Counsel to the effect that the
Restricted Transfer Securities can be freely tradable without the continued
effectiveness of the Shelf Registration Statement.
(c) In connection with the Exchange Offer, the Company shall comply
with all of the provisions of Section 4(b) (other than those that are not
applicable) and shall use its best efforts to effect such exchange to permit the
sale of Transfer Restricted Securities being sold in accordance with the
intended method or methods of distribution thereof. In addition, prior to
effectiveness of the Exchange Offer Registration Statement, the Company shall
provide a supplemental letter to the Commission (i) stating that they are
registering the Exchange Offer in reliance on the position of the Commission
enunciated in Exxon Capital Holdings Corporation (available May 13, 1988),
Morgan Stanley and Co., Inc. (available June 5, 1991) and, if applicable, any
no-action letter obtained by the Company and (ii) including a representation
that the Company has not entered into any arrangement or understanding with any
Person to distribute the New Notes to be received in the Exchange Offer and
that, to the best of the Company's information and belief, each Holder
participating in the Exchange Offer is acquiring the New Notes in its ordinary
course of business and has no arrangement or understanding with any Person to
participate in the distribution of the New Notes received in the Exchange Offer.
As a condition to its participation in the Exchange Offer pursuant to the terms
of this Agreement, each Holder of Transfer Restricted Securities shall furnish,
upon the request of the Company, prior to the Consummation thereof, a written
representation to the Company (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement) to the
effect that (A) it is not an affiliate of the Company, (B) it is not engaged in
and does not intend to engage in and has no arrangement or understanding with
any person to participate in, a distribution of the New Notes to be issued in
the Exchange Offer and (C) it is acquiring the New Notes in its ordinary course
of business. In addition, all such Holders of Transfer Restricted Securities
shall otherwise cooperate in the Company's preparations for the Exchange Offer.
Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such
Holder using the Exchange Offer to participate in a distribution of the
securities to be acquired in the Exchange Offer (1) could not under Commission
policy as in effect on the date of this Agreement rely on the position of the
Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991)
and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted
in the Commission's letter to Shearman & Sterling dated July 2, 1993, and
similar no-action letters and (2) must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with a
secondary resale transaction and that such a secondary resale transaction should
be covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of
Regulation S-K if the resales are of New Notes obtained by such Holder in
exchange for Notes acquired by such Holder directly from the Company.
5. REGISTRATION EXPENSES
The following expenses incident to the Company's performance of or
compliance with this Agreement shall be borne by the Company regardless of
whether a Registration Statement becomes effective, including, without
limitation: (i) all registration and filing fees and expenses (including
filings made by any Purchaser or Holder with the NASD); (ii) all fees and
expenses associated with compliance with federal securities and state Blue Sky
or securities laws including, with respect to such state Blue Sky or securities
laws only, the legal fees of Latham & Watkins or such other single counsel as
may be chosen by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being
prepared; (iii) all expenses of printing or copying (including printing of any
certificates evidencing the Notes and printing or copying of Prospectuses),
messenger and delivery services and telephone; (iv) all fees and disbursements
of counsel for the Company; (v) all application and filing fees in connection
with listing any securities on a national securities exchange or automated
quotation system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of the Company
(including the expenses of any special audit and comfort letters required by or
incident to such performance).
The Company shall, in any event, bear its own internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any Person, including special experts,
retained by the Company.
6. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless (i) each
Holder and (ii) each person, if any, who controls (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) any Holder (any of
the persons referred to in this clause (ii) being hereinafter referred to as a
"controlling person") and (iii) the respective officers, directors, partners,
employees, representatives and agents of any Holder or any controlling person
(any person referred to in clause (i), (ii) or (iii) may hereinafter be referred
to as an "Indemnified Holder"), to the fullest extent lawful, from and against
any and all losses, claims, damages, liabilities, judgments, costs and expenses
("Losses") (including, without limitation and as incurred, reimbursement of all
costs of investigating, preparing, pursuing or defending any claim or action, or
any investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to any
Indemnified Holder) directly or indirectly caused by, related to, based upon,
arising out of or in connection with any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus (or any amendment or supplement thereto) or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except (as to any Holder) insofar as
such Losses are caused by an untrue statement or omission or alleged untrue
statement or omission that is made in reliance upon and in conformity with
information relating to such Holder furnished in writing to the Company by such
Holder for use therein. The Company shall notify the Holders promptly of the
institution, threat or assertion of any claim, proceeding (including any
governmental investigation) or litigation in connection with the matters
addressed by this Agreement that involves the Company or any Indemnified Holder.
(b) In case any action or proceeding (including, without limitation,
any governmental or regulatory investigation or proceeding) shall be brought or
asserted against any of the Indemnified Holders with respect to which indemnity
may be sought against the Company, such Indemnified Holder (or the Indemnified
Holder controlled by such controlling person) shall promptly notify the Company
in writing (provided that the failure to give such notice shall not relieve the
Company of its obligations pursuant to this Agreement). Any Indemnified Holder
shall have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Holder, provided that the fees and
expenses of such counsel shall be at the expense of the Company if (i) the
Company has failed to assume the defense and employ counsel reasonably
satisfactory to the Holders or (ii) the named parties to any such action
(including any impleaded parties) include such indemnified Holder and the
Company and such Indemnified Holder shall have reasonably concluded that there
may be one or more legal defenses available to it that are different from or in
addition to those available to the Company; provided, further, that the Company
shall not in such event be responsible hereunder for the fees and expenses of
more than one firm of separate counsel, which firm shall be designated by the
Holders and shall be subject to the Company's approval, not to be unreasonably
withheld, in connection with any one such action or separate but similar related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, in addition to any local counsel. The Company shall not be
liable for any settlement of any such action or proceeding effected without its
prior written consent, which consent shall not be unreasonably withheld or
delayed, and the Company agrees to indemnify and hold harmless any Indemnified
Holder from and against any Loss by reason of any settlement of any action
effected with its written consent. The Company shall not, without the prior
written consent of each Indemnified Holder, settle or compromise or consent to
the entry of a judgment in or otherwise seek to terminate any pending or
threatened action, claim, litigation or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not any
Indemnified Holder is a party thereto), unless such settlement, compromise,
consent or termination includes a release of each Indemnified Holder from all
liability arising out of such action, claim, litigation or proceeding.
(c) Each Holder of Transfer Restricted Securities agrees, severally
and not jointly, to indemnify and hold harmless the Company, its directors, its
officers, and any person controlling (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act) the Company, and the
respective officers, directors, partners, employees, representatives and agents
of each such person, to the same extent as the foregoing indemnity from the
Company to each of the Indemnified Holders, but only with respect to claims and
actions based on information relating to such Holder furnished in writing by
such Holder for use in any Registration Statement or Prospectus. In case any
action or proceeding shall be brought against any of Company or its directors or
officers or any such controlling person in respect of which indemnity may be
sought against a Holder of Transfer Restricted Securities, such Holder shall
have the rights and duties given the Company, and each of the Company or its
directors or officers of such controlling person shall have the rights and
duties given to each Holder by the proceeding paragraph. In no event shall the
liability of any selling Holder hereunder be greater in amount than the dollar
amount of the proceeds received by such Holder upon the sale of the securities
registered pursuant to provisions hereof giving rise to such indemnification
obligation.
(d) If the indemnification provided for in this Section 6 is
unavailable to a party entitled to indemnification in respect of any Losses
referred to herein, then each indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Holders on the other hand from their sale of Transfer Restricted
Securities or (ii) if such allocation is not permitted by applicable law, the
relative fault of the Company on the one hand and of the Indemnified Holder on
the other in connection with the statements or omissions that resulted in such
Losses as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the Indemnified Holder on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by
the Indemnified Holder and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The indemnity and contribution obligations of each indemnifying party set forth
herein shall be in addition to any liability or obligation such indemnifying
party may otherwise have to any indemnified party, including under this
Agreement.
The Company and each Holder of Transfer Restricted Securities agree
that it would not be just and equitable if contribution pursuant to this Section
6(d) were determined by pro rata allocation (even if the Holders were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the Losses referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6, none of the Holders (and their related Indemnified
Holders) shall be required to contribute, in the aggregate, any amount in excess
of the amount by which the total proceeds received by such Holder with respect
to the Notes exceeds the amount of any damages which such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute pursuant to this
Section 6(d) are several in proportion to the respective principal amount of
Notes held by each of the Holders hereunder and not joint.
7. RULE 144A
The Company hereby agrees with each Holder, for so long as any
Transfer Restricted Securities remain outstanding, to make available to any
Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchase of such Transfer Restricted
Securities from such Holder or beneficial owner, any information required to be
supplied to a Holder by Rule 144A(d)(4) under the Securities Act in order to
permit offers and sales of such Transfer Restricted Securities pursuant to Rule
144A.
8. MISCELLANEOUS
(a) Remedies. Each party agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by such party
of the provisions of this Agreement and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company shall not, on or after
the date of this Agreement, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Holders hereunder are not inconsistent with the rights granted to the
holders of the Company's securities under any agreement in effect on the date
hereof.
(c) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, unless the Company has
obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return-receipt requested), telecopier or courier
guaranteeing overnight delivery;
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company:
Nine West Group Inc.
9 West Broad Street
Stamford, CT 06902
Telecopier: (203)978-6020
Attention: Joel K. Bedol, Esq.
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Telecopier (212)455-2502
Attention: Andrew R. Keller, Esq.
All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to a courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided that
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and the remaining
provisions contained herein shall not be affected or impaired thereby.
(j) Entire Agreement. This Agreement, together with the other
Transaction Agreements (as defined in the Purchase Agreement), is intended by
the parties as a final expression of their agreement and intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein with respect to the registration rights granted by the
Company with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
NINE WEST GROUP INC.
By:
----------------------------
Name:
Title:
BEAR, STEARNS & CO. INC.
As representative for the
Purchasers named above
By:
----------------------
Name:
Title:
U.S. $560,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 2, 1996
NINE WEST GROUP INC.,
as Borrower,
-- --------
CITICORP SECURITIES, INC.,
as Arranger
-- --------
CITIBANK, N.A.,
as Administrative Agent, and
-- -------------- -----
THE LENDERS PARTY HERETO
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS................... 1
1.1. Defined Terms.................................................... 1
1.2. Computation of Time Periods...................................... 32
1.3. Accounting Terms................................................. 32
1.4. Certain Terms.................................................... 32
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS..................... 33
2.1. The Revolving Credit Loans....................................... 33
2.2. The Term Loans................................................... 33
2.3. The Letters of Credit............................................ 34
2.4. Making the Loans................................................. 34
2.5. Fees............................................................. 37
2.6. Amendment, Reduction and Termination of the Commitments.......... 37
2.7. Repayment........................................................ 38
2.8. Prepayments...................................................... 39
2.9. Conversion/Continuation Option................................... 41
2.10. Interest......................................................... 42
2.11. Interest Rate Determination and Protection....................... 43
2.12. Increased Costs.................................................. 44
2.13. Illegality....................................................... 44
2.14. Capital Adequacy................................................. 45
2.15. Payments and Computations........................................ 45
2.16. Taxes............................................................ 46
2.17. Sharing of Payments, Etc......................................... 49
2.18. Letter of Credit Facility........................................ 49
2.19. Substitution of Lenders.......................................... 56
2.20. The Swing Loans.................................................. 57
2.21. The Competitive Loans............................................ 59
ARTICLE III
CONDITIONS......................................... 62
3.1. Conditions Precedent to Effectiveness............................ 62
3.2. Additional Conditions Precedent to Effectiveness................. 65
3.3. Conditions Precedent to Each Loan and Letter of Credit........... 66
ARTICLE IV
REPRESENTATIONS AND WARRANTIES..................... 66
4.1. Corporate Existence; Compliance with Law......................... 67
4.2. Corporate Power; Authorization; Enforceable Obligations.......... 67
4.3. Taxes............................................................ 68
4.4. Full Disclosure.................................................. 69
4.5. Financial Matters................................................ 70
4.6. Litigation....................................................... 70
4.7. Margin Regulations............................................... 70
4.8. Subsidiaries..................................................... 71
4.9. ERISA............................................................ 71
4.10. Liens............................................................ 72
4.11. No Burdensome Restrictions; No Defaults.......................... 72
4.12. No Other Ventures................................................ 74
4.13. Investment Company Act; Public Utility Holding Company Act....... 74
4.14. Insurance........................................................ 74
4.15. Labor Matters.................................................... 74
4.16. Force Majeure.................................................... 75
4.17. Use of Proceeds.................................................. 75
4.18. Environmental Protection......................................... 75
4.19. Intellectual Property............................................ 76
4.20. Title............................................................ 77
4.21. Certain Indebtedness............................................. 77
4.22. Restricted Payments.............................................. 78
ARTICLE V
FINANCIAL COVENANTS................................ 78
5.1. Maximum Leverage Ratio........................................... 78
5.2. Fixed Charge Coverage Ratio...................................... 79
5.3. Maintenance of Net Worth......................................... 80
ARTICLE VI
AFFIRMATIVE COVENANTS.............................. 80
6.1. Compliance with Laws, Etc........................................ 80
6.2. Payment of Taxes, Etc............................................ 80
6.3. Maintenance of Insurance......................................... 81
6.4. Preservation of Corporate Existence, Etc......................... 81
6.5. Access .......................................................... 81
6.6. Keeping of Books................................................. 82
6.7. Maintenance of Properties, Etc................................... 82
6.8. Performance and Compliance with Other Covenants.................. 82
6.9. Application of Proceeds.......................................... 82
6.10. Financial Statements............................................. 82
6.11. Reporting Requirements........................................... 84
6.12. Employee Plans................................................... 88
6.13. Interest Rate Contracts.......................................... 88
6.14. Fiscal Year...................................................... 88
6.15. Environmental.................................................... 88
6.16. Cash Management System........................................... 88
ARTICLE VII
NEGATIVE COVENANTS................................. 89
7.1. Liens, Etc....................................................... 89
7.2. Indebtedness..................................................... 92
7.3. Sale/Leasebacks.................................................. 93
7.4. Restricted Payments.............................................. 93
7.5. Mergers, Borrower Stock Issuances, Sale of Assets, Etc........... 94
7.6. Investments in Other Persons..................................... 96
7.7. Maintenance of Ownership of Subsidiaries......................... 97
7.8. Change in Nature of Business..................................... 98
7.9. Modification of Material Agreements.............................. 98
7.10. Accounting Changes.............................................. 98
7.11. Contingent Obligations.......................................... 98
7.12. Transactions with Affiliates.................................... 99
7.13. No New Subsidiaries............................................. 99
7.14. Terms of Guarantors' Stock...................................... 100
7.15. No Speculative Transactions..................................... 100
ARTICLE VIII
EVENTS OF DEFAULT.................................. 100
8.1. Events of Default................................................ 100
8.2. Remedies......................................................... 103
8.3. Actions in Respect of Letters of Credit
and Other Obligations........................................ 104
ARTICLE IX
THE ADMINISTRATIVE AGENT........................... 106
9.1. Authorization and Action......................................... 106
9.2. Administrative Agent's Reliance, Etc............................. 106
9.3. Citibank and Affiliates.......................................... 107
9.4. Lender Credit Decision........................................... 107
9.5. Indemnification.................................................. 108
9.6. Successor Administrative Agent................................... 108
ARTICLE X
MISCELLANEOUS...................................... 109
10.1. Amendments, Etc................................................. 109
10.2. Notices, Etc.................................................... 109
10.3. No Waiver; Remedies............................................. 110
10.4. Costs; Expenses; Indemnities.................................... 110
10.5. Right of Set-off................................................ 113
10.6. Binding Effect.................................................. 114
10.7. Assignments and Participations.................................. 114
10.8. Governing Law................................................... 118
10.9. Submission to Jurisdiction; Service of Process.................. 118
10.10. Section Titles.................................................. 119
10.11. Execution in Counterparts....................................... 119
10.12. Entire Agreement................................................ 119
10.13. Confidentiality................................................. 119
10.14. Waiver of Jury Trial............................................ 120
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 2, 1996,
among Nine West Group Inc., a Delaware corporation (the "Borrower"), the
financial institutions listed on the signature pages hereof as lenders (each
individually a "Lender" and collectively the "Lenders"), Citibank, N.A., a
national banking association ("Citibank") and any other Lender which issues
letters of credit hereunder (each an "Issuer" and together the "Issuers") and
Citibank, as administrative agent for the Lenders and the Issuers (in such
capacity, the "Administrative Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower, the Lenders, Citibank as an issuer of letters
of credit, the Administrative Agent and Merrill Lynch Capital Corporation as
Agent are party to a Credit Agreement, dated as of May 23, 1995, as amended by
Amendment No. 1 thereto dated as of December 28, 1995 and Amendment No. 2
thereto dated as of May 29, 1996 (the "Existing Credit Agreement"); and
WHEREAS, the Borrower has requested and the Lenders have agreed to
amend and restate the Existing Credit Agreement upon the terms and subject to
the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1 Defined Terms. As used in this Agreement, the following terms
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Accepted Competitive Bid" shall mean the competitive Bid or Bids that
are accepted by the Borrower.
"Accounts" has the meaning specified in the Borrower Security
Agreement and the Subsidiary Security Agreement.
"Acquisition" means the acquisition by the Borrower and certain of the
Guarantors of certain assets of USSC as contemplated by the Asset Purchase
Agreement.
"Administrative Agency Fee Letter" has the meaning specified in
Subsection 2.5(b).
"Administrative Agent" has the meaning specified in the first
paragraph of this Agreement.
"Affiliate" means, as to any Person, any Subsidiary of such Person and
any other Person which, directly or indirectly, controls, is controlled by or is
under common control with such Person and includes each officer or director or
general partner of such Person, and each Person (other than a Passive
Institutional Investor) who is the beneficial owner of 10% or more of any class
of voting Stock of such Person. For the purposes of this definition, "control"
means the possession of the power to direct or cause the direction of management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.
"Agreement" means this Amended and Restated Credit Agreement, together
with all Schedules and Exhibits, as the same may be amended, supplemented or
otherwise modified from time to time.
"Applicable Base Rate Margin" has the meaning set forth on
Schedule III.
"Applicable Eurodollar Rate Margin" has the meaning set forth on
Schedule III.
"Applicable Lending Office" means, with respect to each Lender, its
Domestic Lending Office in the case of a Base Rate Loan and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
"Asset Purchase Agreement" means the Asset Purchase Agreement, dated
as of March 15, 1995, among the Borrower, Footwear Acquisition Corp., a Delaware
corporation, and USSC, as amended by the Amendment to Asset Purchase Agreement,
dated as of May 23, 1995 and by the Amendment to Asset Purchase Agreement and
Settlement Agreement dated as of May 29, 1996 and as such agreement may be
further amended, supplemented or otherwise modified from time to time prior to
the date hereof.
"Asset Sale" means any sale or other disposition, or series of sales
or other dispositions (including, without limitation, by merger or
consolidation, and whether by operation of law or otherwise), made on or after
the Effective Date by the Borrower and/or any of the Guarantors to any Person of
any asset or assets which individually yields or in the aggregate for a series
of related transactions yield proceeds or have a Fair Market Value in excess of
$2,000,000; provided, however, that any sale or other disposition permitted
pursuant to clause (i) of Subsection 7.5(a) or clauses (i)(A), (ii) (other than
with respect to sale/leaseback transactions), (iii), (iv), (v) and (vi) of
Subsection 7.5(c) shall not constitute an Asset Sale for purposes of this
Agreement.
"Asset Sale Proceeds" means cash payments received by the Borrower or
any Guarantor (including, without limitation, any cash payments received by way
of deferred payment of principal (but not interest) pursuant to a note or
receivable or otherwise and any cash realized from any disposition of non-cash
proceeds received by the seller, but only as and when received, and any amount
eliminated from any reserve referred to in clause (e) below, but only as and
when eliminated without any corresponding payment having been made) from any
Asset Sale (after repayment of any Indebtedness other than the Loans due by
reason of such Asset Sale), in each case net of the amount of (a) brokers' and
advisors' fees and commissions payable in connection with such Asset Sale, (b)
all foreign, federal, state and local taxes estimated in good faith by the
Borrower to be payable as a direct consequence of such Asset Sale, including,
without limitation, in connection with the payment of a dividend or the making
of a distribution by a Guarantor of such payments to the Borrower or any other
Guarantor (including, without limitation, taxes withheld in connection with the
repatriation of such proceeds), net of any tax benefits derived in respect of
such dividend or distribution, (c) the fees and expenses attributable to such
Asset Sale, to the extent not included in clause (a) above, (d) any amount
required to be paid to any Person (other than the Borrower or any Guarantor)
owning a beneficial interest in the property or assets subject to such Asset
Sale, (e) deduction for the amount of any reserve established in its financial
statements in accordance with GAAP by the Borrower or any Guarantor in respect
of liabilities retained or representations or warranties made by the Borrower or
any Guarantor in connection with such Asset Sale, including, without limitation,
any indemnification associated with such Asset Sale, and (f) any proceeds
received from any sale or other disposition of Operating Assets which proceeds
are used to purchase, construct or otherwise acquire an interest in other
Operating Assets (to the extent such proceeds do not exceed the amount paid to
purchase, construct or otherwise acquire an interest in such other Operating
Assets) provided that such other Operating Assets are constructed or an interest
therein is otherwise acquired within 180 days before or after such receipt or a
binding agreement to construct or otherwise acquire an interest in such other
Operating Assets is entered into within 180 days before or after such receipt
and an interest in such other Operating Assets is constructed or acquired within
one year of such receipt. For the purposes of this definition, (i) an Asset
Sale shall be deemed to include, without limitation, any award of compensation
for any asset or property or group thereof taken by condemnation or eminent
domain and insurance proceeds for the loss of or damage to any asset or property
if such award or proceeds equals or exceeds $2,000,000 (per occurrence), and
(ii) in the case of insurance proceeds for damage to any Operating Asset, the
Borrower or any Guarantor shall be deemed to have acquired other Operating
Assets if such Operating Assets are repaired within 180 days of the receipt of
such proceeds or a binding agreement to repair the same is entered into within
such 180-day period and such repairs are completed within one year of the date
of the receipt of such proceeds.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, in substantially the form of
Exhibit J, and accepted by the Administrative Agent.
"Available Credit" means, at any time, an amount equal to (a) the then
effective Revolving Credit Commitments of the Lenders minus (b) the sum of (i)
the outstanding principal amount of the Revolving Credit Loans at such time,
(ii) the Letter of Credit Undrawn Amounts at such time, (iii) the outstanding
principal amount of the Competitive Loans at such time, (iv) the outstanding
principal amount of the Swing Loans at such time and (v) the Reimbursement
Obligations at such time; provided, however, that for the purposes of Section
2.1, Available Credit shall mean the lesser of the foregoing amount and, during
each Clean-Up Period after the Effective Date, an amount equal to (i)
$75,000,000 minus (ii) the aggregate of the outstanding principal amount of the
Revolving Credit Loans, Competitive Loans and Swing Loans at such time. For the
purpose of determining whether any new Loan to be made hereunder exceeds the
amount of the Available Credit, the amount of the Available Credit shall be
determined before such new Loan is deemed outstanding but after giving effect to
the concurrent repayment of any outstanding Loan or Loans from the proceeds of
such new Loan.
"Base Rate" means a fluctuating interest rate per annum as shall be in
effect from time to time, which rate per annum shall be equal at any time to the
then highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/8 of one percent or, if there
is no nearest 1/8 of one percent, to the next higher 1/8 of one percent) of (i)
1/2 of one percent per annum, plus (ii) the rate per annum obtained by dividing
(A) the latest three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average being
determined weekly on each Monday (or, if any such day is not a Business Day, on
the next succeeding Business Day) for the three-week period ending on the
previous Friday by Citibank on the basis of such rates reported by certificate
of deposit dealers to and published by the Federal Reserve Bank of New York or,
if such publication shall be suspended or terminated, on the basis of quotations
for such rates received by Citibank from three New York certificate of deposit
dealers of recognized standing selected by Citibank, by (B) a percentage equal
to 100% minus the average of the daily percentages specified during such
three-week period by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for Citibank in respect of liabilities consisting of or including
(among other liabilities) three-month U.S. dollar nonpersonal time deposits in
the United States, plus (iii) the average during such three-week period of the
maximum annual assessment rates payable to the Federal Deposit Insurance
Corporation (or any successor) by banks which are members of the Bank Insurance
Fund for insuring U.S. dollar deposits in the United States; and
(c) the sum (adjusted to the nearest 1/8 of one percent or, if there
is no nearest 1/8 of one percent, to the next higher 1/8 of one percent) of (i)
1/2 of one percent per annum plus (ii) the Federal Funds Rate.
"Base Rate Loan" means any outstanding principal amount of the Loans
of any Lender that bears interest with reference to the Base Rate.
"Borrower Pledge Agreement" means the pledge agreement dated as of May
23, 1995, in the form of Exhibit F, executed by the Borrower, as amended by
Amendment No. 1 thereto dated as of December 28, 1995 and Amendment No. 2
thereto dated the date hereof, and as such agreement may be further amended,
supplemented or otherwise modified from time to time.
"Borrower Security Agreement" means the security agreement dated as of
May 23, 1995, in the form of Exhibit G-1, executed by the Borrower, as amended
by Amendment No. 1 thereto dated as of December 28, 1995 and Amendment No. 2
thereto dated the date hereof, and as such agreement may be further amended,
supplemented or otherwise modified from time to time.
"Borrowing" means a borrowing consisting of Loans under the same
Facility made on the same day by the Lenders ratably according to their
respective Commitments.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to a Eurodollar Rate Loan, a day on which dealings are also carried on
in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the
aggregate of (a) all cash expenditures made by such Person and its Subsidiaries,
except interest capitalized during construction, during such period for
property, plant or equipment, including, without limitation, renewals,
improvements, replacements and capitalized repairs, that would be reflected as
additions to property, plant or equipment on a consolidated balance sheet of
such Person and its Subsidiaries prepared in conformity with GAAP and (b)
without duplication, the principal amount of all Indebtedness incurred or
assumed to finance any such additions to property, plant and equipment;
provided, however, that Capital Expenditures shall not include any expenditures
made to replace any Operating Assets sold, taken or otherwise disposed of or
subject to a loss with other Operating Assets, or to repair any damage to
Operating Assets, to the extent such expenditures do not exceed the aggregate
amount of proceeds payable to such Person and its Subsidiaries in connection
with such sale, taking, other disposition, loss or damage and are made within
180 days before or after such receipt or a binding agreement to construct or
otherwise acquire an interest in other Operating Assets or repair such damage is
entered into within 180 days before or after such receipt and such acquisition,
construction or repair is completed within one year of such receipt.
"Capitalized Lease" means, as to any Person, any lease of property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in conformity with GAAP.
"Capitalized Lease Obligations" means, as to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capitalized Leases, as determined on a consolidated basis in conformity
with GAAP.
"Cash Equivalents" means (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by the
United States government or any agency thereof, (b) overnight bank deposits made
with any Lender, (c) certificates of deposit, time deposits of any nature and
bankers' acceptances of any Lender, or any commercial bank organized under the
laws of the United States of America or any state thereof that has a combined
capital and surplus of at least $300,000,000, having maturities of one year or
less from the date of acquisition, (d) commercial paper of an issuer rated at
least "A-1" by Standard & Poor's Rating Group or "P-1" by Moody's Investors
Service, Inc., or carrying an equivalent rating by a nationally recognized
rating agency if both of the two named rating agencies cease publishing ratings
of investments, and (e) repurchase obligations for underlying securities of the
type described in clause (a) above, provided that (i) such repurchase
obligations do not have a term of longer than seven days from the date of
acquisition thereof and (ii) such repurchase obligations are with a counterparty
that is a financial institution organized or licensed under the laws of the
United States of America or any state thereof that has a combined capital and
surplus of at least $300,000,000.
"Cash Interest Expense" means, for any Person for any period, the Net
Interest Expense of such Person for such period, plus (a) interest expense
capitalized during construction for such period to the extent deducted in the
determination of such Net Interest Expense, less (b) Non-Cash Interest Expense
of such Person for such period.
"Change of Control" means the occurrence of any Person or group (other
than a Permitted Investor), determined in accordance with Section 13(d) of the
Exchange Act together with any Affiliates thereof, which, as a result of a
tender or exchange offer, open market purchases, privately negotiated purchases
or otherwise, having become the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act), directly or indirectly, of Stock of the Borrower
representing at least 25% of the voting Stock of the Borrower.
"Clean-Up Period" means any 30 consecutive calendar days during the
three-month period commencing November 1 of each calendar year, as chosen by the
Borrower in a written notice to the Administrative Agent received by the
Administrative Agent no later than November 30 of such calendar year; provided,
however, that if the Borrower shall not have so notified the Administrative
Agent for any calendar year, "Clean-Up Period" means, for such calendar year,
the 30-day period commencing December 1 of such calendar year.
"Code" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by any Loan Party (other than Accounts
sold by the Borrower in connection with the Receivables Securitization) in or
upon which a Lien is purported to be granted in favor of the Secured Parties
under any of the Collateral Documents, except to the extent such property or
interests have been released from such Lien in accordance with the terms of the
applicable Collateral Document.
"Collateral Documents" means the Borrower Security Agreement, the
Subsidiary Security Agreements, the Borrower Pledge Agreement, the Mortgages,
the Intercreditor Agreements and any other document executed and delivered by a
Loan Party granting a Lien in favor of the Secured Parties on any of its
property to secure payment of the Obligations.
"Commitment" means, as to any Lender, such Lender's Revolving Credit
Commitment, and "Commitments" means the aggregate Revolving Credit Commitments
of all Lenders.
"Competitive Bid" means an offer to make a Competitive Loan pursuant
to Section 2.21.
"Competitive Bid Accept/Reject Letter" means a notification made by
the Borrower pursuant to Section 2.21(e) in substantially the form of Exhibit N.
"Competitive Bid Rate" means, as to any Competitive Bid made pursuant
to Section 2.21(c), (i) in the case of a Eurodollar Competitive Loan, the
Eurodollar Competitive Borrowing Margin, and (ii) in the case of a Fixed Rate
Loan, the fixed rate of interest offered by the Lender making such Competitive
Bid.
"Competitive Bid Request" means a request made pursuant to Section
2.21 in substantially the form of Exhibit K.
"Competitive Borrowing" means a borrowing consisting of a Competitive
Loan or concurrent Competitive Loans from the Lender or Lenders whose
Competitive Bid or Bids for such Borrowing have been accepted by the Borrower
under the bidding procedure described in Section 2.21.
"Competitive Loan" means a Loan from a Lender to the Borrower pursuant
to the bidding procedure described in Section 2.21.
"Competitive Loan Obligation" has the meaning specified in Section
2.4(j).
"Competitive Note" means a promissory note of the Borrower in
substantially the form of Exhibit A-3, payable to the Lender whose Competitive
Bid was accepted, executed and delivered as provided in Section 2.4.
"Contaminant" means any substance regulated or forming the basis of
liability under any Environmental Law, including, without limitation, any waste,
pollutant, hazardous substance, toxic substance, hazardous waste, special waste,
petroleum or petroleum-derived substance or waste, and any constituent of any
such substance or waste.
"Contingent Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness or Contractual Obligation of another Person, if the purpose or
intent of such Person in incurring the Contingent Obligation is to provide
assurance to the obligee of such Indebtedness or Contractual Obligation that
such Indebtedness or Contractual Obligation will be paid or discharged, or that
any agreement relating thereto will be complied with, or that any holder of such
Indebtedness or Contractual Obligation will be protected (in whole or in part)
against loss in respect thereof. Contingent Obligations of a Person include,
without limitation, (a) the direct or indirect guarantee, endorsement (other
than for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of an obligation
of another Person, and (b) any liability of such Person for an obligation of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such obligation or to assure the holder of such
obligation against loss, or (v) to supply funds to or in any other manner invest
in such other Person (including, without limitation, to pay for property or
services irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under subclause (i), (ii),
(iii), (iv) or (v) of this sentence the primary purpose or intent thereof is as
described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the outstanding amount of the obligation so guaranteed or
otherwise supported.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding, in each of the foregoing cases, a
Loan Document) to which such Person is a party or by which it or any of its
property is bound or to which any of its properties is subject.
"Corporate Rating" means a Long-Term Issuer Credit Rating assigned by
the Corporate Credit Rating Service of S&P.
"Current Assets" means, with respect to any Person at any date, the
total consolidated current assets of such Person and its Subsidiaries at such
date, determined in conformity with GAAP.
"Current Liabilities" means, with respect to any Person at any date,
the total consolidated current liabilities of such Person and its Subsidiaries
at such date, determined in conformity with GAAP, less the current portion of
any Indebtedness for Borrowed Money of such Person and its Subsidiaries at such
date determined on a consolidated basis in conformity with GAAP.
"Debt Issuance Proceeds" means in respect of the issuance of any debt
securities or other incurrence of Indebtedness by the Borrower or any Guarantor
(other than Indebtedness permitted by clauses (a) through (g), (i), (j), (k) and
(l) of Section 7.2), the gross cash proceeds received from such issuance or
incurrence, minus all taxes, discounts, commissions and other fees and expenses
incurred in connection therewith, including, without limitation, the reasonable
fees and disbursements of counsel.
"Default" means any event which with the passing of time or the giving
of notice or both would become an Event of Default.
"Documentary Letter of Credit" means a Letter of Credit in support of
trade obligations of the Borrower or any of its Subsidiaries incurred in the
ordinary course of business.
"DOL" means the United States Department of Labor, or any successor
thereto.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule II or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Administrative Agent.
"Domestic Subsidiary" means each Subsidiary of the Borrower
incorporated under the laws of any state of the United States of America or the
District of Columbia.
"EBITDA" means, for any Person for any period, the Net Income (Loss)
of such Person for such period taken as a single accounting period, plus (a) the
sum of the following amounts of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP to the extent
included in the determination of such Net Income (Loss): (i) depreciation
expense, (ii) amortization expense, (iii) interest expense, (iv) income tax
expense, (v) extraordinary losses (and other losses on Asset Sales not otherwise
included in extraordinary losses determined on a consolidated basis in
conformity with GAAP), and (vi) non-cash charges (including the cumulative
effect of accounting changes), less (b) the sum of the following amounts of such
Person and its Subsidiaries determined on a consolidated basis in conformity
with GAAP to the extent included in the determination of such Net Income (Loss):
(i) extraordinary gains (and other gains on Asset Sales not otherwise included
in extraordinary gains determined on a consolidated basis in conformity with
GAAP), (ii) the Net Income (Loss) of any other Person that is accounted for by
the equity method of accounting except to the extent of the amount of dividends
or distributions paid to such Person, (iii) the Net Income (Loss) of any other
Person acquired by such Person or a Subsidiary of such Person in a transaction
accounted for as a pooling of interests for any period prior to the date of such
acquisition, and (iv) non-cash credits (including the cumulative effect of
accounting changes).
"Effective Date" means the date on which this Amended and Restated
Credit Agreement becomes effective in accordance with Section 3.1.
"Eligible Assignee" means (a) a commercial bank organized or licensed
under the laws of the United States, or any State thereof, and having a combined
capital and surplus of at least $500,000,000, (b) a savings and loan association
or savings bank organized under the laws of the United States, or any State
thereof, and having a combined capital and surplus of at least $500,000,000, (c)
a commercial bank organized under the laws of any other country which is a
member of the Organization for Economic Cooperation and Development (the
"OECD"), or a political subdivision of any such country, and having a combined
capital and surplus of at least $500,000,000, as long as that such bank is
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD or the Cayman
Islands, (d) the central bank of any country which is a member of the OECD, (e)
a finance company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business and having a combined capital and surplus of at least
$500,000,000, (f) any Lender, and (g) any Affiliate of any Lender.
"Environmental Laws" means all federal, state and local laws,
statutes, ordinances and regulations, now or hereafter in effect, and in each
case as amended or supplemented from time to time, and any binding judicial or
administrative interpretation thereof, including, without limitation, any
judicial or administrative order, consent decree or judgment relating to the
regulation and protection of human health, safety, the environment or natural
resources (including, without limitation, ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
species and vegetation). Environmental Laws include, but are not limited to,
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended (42 U.S.C. section 9601 et seq.) ("CERCLA"); the Hazardous
Material Transportation Act, as amended (49 U.S.C. section 1801 et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C.
section 136 et seq.); the Resource Conservation and Recovery Act, as amended (42
U.S.C. section 6901 et seq.) ("RCRA"); the Toxic Substances Control Act, as
amended (15 U.S.C. section 2601 et seq.); the Clean Air Act, as amended (42
U.S.C. section 7401 et seq.); the Federal Water Pollution Control Act, as
amended (33 U.S.C. section 1251 et seq.); the Occupational Safety and Health
Act, as amended (29 U.S.C. section 651 et seq.); and the Safe Drinking Water
Act, as amended (42 U.S.C. section 300f et seq.), and their state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statute, including, without limitation, the New Jersey Industrial
Site Recovery Act (N.J. Stat. Ann. section 13:1K-6 et seq.) ("ISRA").
"Environmental Liabilities and Costs" means, as to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including, without limitation, all fees, disbursements and expenses of counsel,
experts and consultants and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any claim or
demand by any other Person, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute, including, without
limitation, any thereof arising under any Environmental Law, Permit, order or
agreement with any Governmental Authority or other Person, and which relate to
any environmental, health or safety condition, or a Release or threatened
Release, and result from the past, present or future operations of, or ownership
of property by, such Person or any of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Environmental Reports" means the environmental reports prepared as a
condition precedent to the Existing Credit Agreement and delivered to the
Administrative Agent.
"Equity Issuance Proceeds" means the gross proceeds from the issuance
for cash of any equity securities of the Borrower or any Guarantor (other than
pursuant to any director and/or employee compensation or savings plan) minus all
discounts, commissions and other fees and expenses incurred in connection
therewith, including, without limitation, the reasonable fees and disbursements
of counsel.
"ERISA" means the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower or any of its Subsidiaries
within the meaning of Section 414 (b), (c), (m) or (o) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a Title IV
Plan or a Multiemployer Plan, (b) the withdrawal of the Borrower, any of its
Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer, as defined
in Section 4001(a)(2) of ERISA, (c) the complete or partial withdrawal of the
Borrower, any of its Subsidiaries or any ERISA Affiliate from any Multiemployer
Plan, (d) the filing of a notice of intent to terminate a Title IV Plan or the
treatment of a plan amendment as a termination under Section 4041 of ERISA, (e)
the institution by the PBGC of proceedings to terminate a Title IV Plan or
Multiemployer Plan, (f) the failure to make any contribution required by
applicable law to a Qualified Plan, (g) the insolvency or notice of
reorganization of a Multiemployer Plan, or (h) any other event or condition
which might reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Title IV Plan or Multiemployer Plan or the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Competitive Borrowing Margin" means, as to any Eurodollar
Competitive Loan, the margin (expressed as a percentage rate per annum in the
form of a decimal to no more than four decimal places) to be added to or
subtracted from the Eurodollar Rate in order to determine the interest rate
applicable to such Loan, as specified in the Competitive Bid relating to such
Loan.
"Eurodollar Competitive Loan" means any Competitive Loan bearing
interest at a rate determined by reference to the Eurodollar Rate in accordance
with the provisions of Article II.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" below its
name on Schedule II (or, if no such office is specified, its Domestic Lending
Office) or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.
"Eurodollar Rate" means, for any Interest Period, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the rate of interest
determined by the Administrative Agent to be the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average is not such a
multiple) of the rate per annum at which deposits in U.S. dollars are offered by
the principal office of Citibank in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount substantially equal to the Eurodollar
Rate Loan of Citibank during such Interest Period and for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period.
"Eurodollar Rate Loan" means any outstanding principal amount of the
Loans of any Lender that, for an Interest Period, bears interest at a rate
determined with reference to the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" for any Interest Period means the
reserve percentage applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve System in
New York City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of liabilities
which includes deposits by reference to which the Eurodollar Rate is determined)
having a term equal to such Interest Period.
"Event of Default" has the meaning specified in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Credit Agreement" has the meaning given to that term in the
Recitals to this Agreement.
"Facility" means the Lenders' Commitments to make the Term Loans and
the Lenders' Commitments to make Revolving Credit Loans.
"Facility Fee" has the meaning specified in Subsection 2.5(a).
"Factoring Program" means the sale by the Borrower and the Guarantors
of Accounts of non-United States account debtors.
"Fair Market Value" means (a) with respect to any asset (other than a
marketable security) at any date, the value of the consideration obtainable in a
sale of such asset at such date assuming a sale by a willing seller to a willing
purchaser dealing at arm's length and arranged in an orderly manner over a
reasonable period of time having regard to the nature and characteristics of
such asset, as reasonably determined by the seller, or, if such asset shall have
been the subject of a relatively contemporaneous appraisal by an independent
third party appraiser, the basic assumptions underlying which have not
materially changed since its date, as set forth in such appraisal, and (b) with
respect to any marketable security at any date, the closing sale price of such
security on the business day (on which any national securities exchange is open
for the normal transaction of business) next preceding such date, as appearing
in any published list of any national securities exchange or in the National
Market List of the National Association of Securities Dealers, Inc. or, if there
is no such closing sale price of such security, the final price for the purchase
of such security quoted on such business day by a financial institution of
recognized standing which regularly deals in securities of such type.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fiscal Quarter" means a fiscal quarter of the Borrower and its
consolidated Subsidiaries for financial accounting purposes.
"Fiscal Year" means the period of 52 or 53 weeks, as the case may be,
ending on the Saturday nearest to January 31 of each year, with such Fiscal Year
ending in January or February, as the case may be, being referred to for
purposes of identification by the year of the immediately preceding calendar
year.
"Fixed Charges" means, for any Person for any period, the sum, without
duplication, of (a) the Cash Interest Expense of such Person for such period,
(b) all rentals under leases of real, personal or mixed property in respect of
such period payable in cash during such period by such Person and each of its
Subsidiaries determined on a consolidated basis in conformity with GAAP, (c) the
principal amount of Indebtedness for Borrowed Money of such Person and each of
its Subsidiaries determined on a consolidated basis in conformity with GAAP
having a scheduled due date during such period, (d) all amounts having a
scheduled due date during such period payable by such Person and each of its
Subsidiaries determined on a consolidated basis in conformity with GAAP, on
Capitalized Lease Obligations, (e) all dividends payable in cash during such
period by such Person and its Subsidiaries on preferred stock in respect of such
period other than to the Borrower and its Subsidiaries, (f) the total estimated
federal income tax liability payable by such Person in respect of such period,
and (g) Capital Expenditures of such Person made during such period net of the
aggregate principal amount of Indebtedness constituting a Capital Expenditure
incurred or assumed by such Person during such period but not payable during
such period.
"Fixed Rate Borrowing" means a Borrowing comprised of one or more
Fixed Rate Loans.
"Fixed Rate Loan" means any Competitive Loan bearing interest at a
fixed percentage rate per annum (expressed in the form of a decimal to no more
than four decimal places) specified by the Lender making such Loan in its
Competitive Bid.
"Footwear Business" has the meaning specified in the Asset Purchase
Agreement.
"Foreign Venture" means any Subsidiary of the Borrower other than a
Guarantor or a North American Venture.
"Funding" means Nine West Funding Corporation, a Delaware corporation.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination except that, for purposes of Article V, GAAP shall be determined
on the basis of such principles in effect on the date hereof and consistent with
those used in the preparation of the audited financial statements referred to in
Section 4.5.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantor" means each Domestic Subsidiary that is a Wholly-Owned
Subsidiary, other than Pappagallo and Funding.
"Guaranty" means a guaranty, in substantially the form of Exhibit H,
executed by each Guarantor, as such guaranty may be amended, supplemented or
otherwise modified from time to time.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money (including, without limitation,
reimbursement and all similar obligations with respect to surety bonds, letters
of credit and bankers' acceptances, whether or not matured) or for the deferred
purchase price of property or services, (b) all indebtedness of such Person
evidenced by notes, bonds, debentures or similar instruments, (c) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (d) all Capitalized Lease Obligations of such Person, (e) all
Contingent Obligations of such Person, (f) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value (other than
with Stock or Stock Equivalents of such Person in respect of which such Person
has no purchase, redemption, retirement, defeasance or other acquisition
obligation) any Stock or Stock Equivalents of such Person, (g) all obligations
of such Person under Interest Rate Contracts, (h) all Indebtedness referred to
in clause (a), (b), (c), (d), (e), (f) or (g) above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property (including, without limitation,
Accounts and general intangibles) owned by such Person, even though such Person
has not assumed or become liable for the payment of such Indebtedness, and (i)
in the case of the Borrower, all monetary obligations constituting Obligations.
"Indebtedness for Borrowed Money" means, for any Person, all
indebtedness for borrowed money or evidenced by notes, bonds, debentures or
similar evidences of indebtedness of such Person and its Subsidiaries on a
consolidated basis in conformity with GAAP, all obligations of such Person and
its Subsidiaries on a consolidated basis in conformity with GAAP for the
deferred purchase price of any property service or business (other than trade
accounts payable incurred in the ordinary course of business constituting
Current Liabilities), and all Capitalized Lease Obligations of such Person and
its Subsidiaries on a consolidated basis in conformity with GAAP. For purposes
of this definition, "indebtedness for borrowed money" shall not include the
unmatured portion of any reimbursement or similar obligations with respect to
surety bonds, letters of credit and bankers' acceptances.
"Indemnitees" has the meaning specified in Section 10.4.
"Initial Lender" means each financial institution whose name is set
forth on the signature pages of this Agreement.
"Intercreditor Agreement" means each agreement, in the form to be
agreed between the Borrower, the Administrative Agent and the Majority Lenders,
executed by any new lender pursuant to Section 7.1(o), as such agreement may be
amended, supplemented or otherwise modified from time to time.
"Interest Period" means, (1) in the case of any Fixed Rate Loan, the
period commencing on the date of the related Competitive Borrowing and ending on
the date specified in the Competitive Bid in which the offer to make such Fixed
Rate Loans was extended, which period shall not be earlier than seven days or
later than 180 days after the date of such Competitive Borrowing, and (2) in the
case of any Eurodollar Rate Loan, (a) initially, the period commencing on the
date such Eurodollar Rate Loan is made or on the date of conversion of a Base
Rate Loan to such Eurodollar Rate Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its Notice of Borrowing, Notice of
Conversion or Continuation or Competitive Bid Request given to the
Administrative Agent pursuant to Section 2.4, 2.9 or 2.21, respectively, and (b)
thereafter, if such Loan is continued, in whole or in part, as a Eurodollar Rate
Loan pursuant to Section 2.9, a period commencing on the last day of the
immediately preceding Interest Period therefor and ending one, two, three or six
months thereafter, as selected by the Borrower in its Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.9;
provided, however, that all of the foregoing provisions in clause (2) relating
to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be to extend
such Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month;
(iii) the Borrower may not select any Interest Period in respect
of Term Loans which ends after the date of a scheduled principal payment on the
Term Loans as set forth in Article II unless, after giving effect to such
selection, the aggregate unpaid principal amount of the Term Loans for which
Interest Periods end after such scheduled principal payment shall be equal to or
less than the principal amount to which the Term Loans are required to be
reduced after such scheduled principal payment is made;
(iv) the Borrower may not select any Interest Period in respect
of Loans having an aggregate principal amount of less than $1,000,000; and
(v) there shall be outstanding at any one time no more than 12
Interest Periods in the aggregate.
"Interest Rate Contracts" means interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
insurance, and other agreements or arrangements designed to provide protection
against fluctuations in interest rates.
"Investments" has the meaning specified in Section 7.6.
"Inventory" has the meaning specified in the Borrower Security
Agreement and the Subsidiary Security Agreement.
"Investment Grade" means, with respect to the Borrower's long-term
senior unsecured indebtedness, (i) a rating of "Baa3" or higher by Moody's, or
(ii) a rating of "BBB-" or higher by S&P, or (iii) a Corporate Credit Rating of
investment grade assigned by S&P, as determined by the Administrative Agent in
its sole discretion, and, in each case, such rating or Corporate Credit Rating
is maintained for a period of three consecutive months; provided, however, that
the Borrower's long-term senior unsecured indebtedness shall not be regarded as
Investment Grade for the purposes of this Agreement if one Rating Agency assigns
a rating which is more than one level below investment grade (being Ba1 or lower
in the case of Moody's and BB+ or lower in the case of S&P).
"IRS" means the Internal Revenue Service, or any successor thereto.
"Issuer" means (a) Citibank, in its capacity as initial issuer of
Letters of Credit, and (b) any other Lender requested by the Borrower which has
agreed to issue Letters of Credit.
"L/C Cash Collateral Account" has the meaning specified in Subsection
8.3(a).
"Letter of Credit" means any letter of credit issued for the account
of the Borrower or any of its Subsidiaries by any Issuer pursuant to Section
2.18.
"Letter of Credit Obligations" means, at any time, the aggregate of
all liabilities at such time of the Borrower to all Issuers with respect to
Letters of Credit, whether or not any such liability is contingent, and includes
the sum of (a) the Reimbursement Obligations at such time and (b) the Letter of
Credit Undrawn Amounts at such time.
"Letter of Credit Reimbursement Agreement" has the meaning specified
in Subsection 2.18(c).
"Letter of Credit Request" has the meaning specified in Subsection
2.18(d).
"Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever in respect of property
intended to assure payment of any Indebtedness or other obligation, including,
without limitation, any conditional sale or other title retention agreement, the
interest of a lessor under a Capitalized Lease Obligation, any financing lease
having substantially the same economic effect as any of the foregoing, and the
filing, under the Uniform Commercial Code or comparable law of any jurisdiction,
of any financing statement naming the owner of the asset to which such Lien
relates as debtor.
"Loan" means a Revolving Credit Loan, a Term Loan, a Swing Loan or a
Competitive Loan.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Guaranty, each Letter of Credit Reimbursement Agreement, the Collateral
Documents, the Administrative Agency Fee Letter, and each agreement, contract or
facility evidencing, creating or otherwise giving rise to one or more Other
Obligations.
"Loan Party" means each of the Borrower and each Guarantor.
"Majority Lenders" means, at any time, Lenders holding at least 51% of
the sum of (a) the then aggregate unpaid principal amount of the Term Loans and
(b) the Revolving Credit Commitments or, if no Loans are then outstanding,
Lenders having at least 51% of the Commitments; provided, however, that if the
Commitments have been terminated, it means Lenders holding at least 51% of the
outstanding Loans.
"Material Adverse Change" means a material adverse change in any of
(a) the condition (financial or otherwise), business, performance, prospects,
operations or properties of the Borrower and its Subsidiaries taken as one
enterprise, (b) the ability of the Borrower to repay the Obligations or of any
Loan Party to perform its obligations under any Loan Document, or (c) the rights
and remedies of the Lenders, the Issuers or the Administrative Agent under the
Loan Documents, taken as a whole.
"Material Adverse Effect" means an effect that results in or causes,
or has a reasonable likelihood of resulting in or causing, a Material Adverse
Change.
"Minority Interest Venture" means any corporation, partnership or
other business entity (a) of which less than 50% (but more than 0%) of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors, managers, trustees or other controlling persons, is, at the time,
directly or indirectly, owned or controlled by the Borrower and/or one or more
Subsidiaries of the Borrower (irrespective of whether, at the time, Stock of any
other class or classes of such entity shall have or might have voting power by
reason of the happening of any contingency) and (b) which conducts a business
similar to that conducted by the Borrower or any Guarantor.
"Moody's" means Moody's Investor Services, Inc.
"Mortgages" means the mortgages or deeds of trust made or required
herein to be made by the Borrower or any of the Guarantors in form and substance
satisfactory to the Administrative Agent, in its reasonable judgment, as such
Mortgages may be amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, and to which the Borrower, any of its Subsidiaries or any
ERISA Affiliate is making, is obligated to make, has made or been obligated to
make in the six years preceding the date of termination, contributions on behalf
of participants who are or were employed by any of them.
"Net Income (Loss)" means, for any Person for any period, the
aggregate of net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in conformity with GAAP.
"Net Interest Expense" means, for any Person for any period, gross
interest expense of such Person and its Subsidiaries for such period determined
on a consolidated basis in conformity with GAAP, less (a) the following for such
Person and its Subsidiaries determined on a consolidated basis in conformity
with GAAP: the sum of (i) interest capitalized during construction for such
period, (ii) interest income for such period, and (iii) gains for such period on
Interest Rate Contracts (to the extent not included in interest income above and
to the extent not deducted in the calculation of such gross interest expense),
plus (b) the following for such Person and its Subsidiaries determined on a
consolidated basis in conformity with GAAP: the sum of (i) losses for such
period on Interest Rate Contracts (to the extent not included in such gross
interest expense), and (ii) the amortization of up-front costs or fees for such
period associated with Interest Rate Contracts (to the extent not included in
gross interest expense).
"Net Worth" of any Person means, at any date, the excess of the Total
Assets of such Person at such date over the Total Liabilities of such Person at
such date.
"Non-Cash Interest Expense" means, for any Person for any period, the
sum of the following amounts to the extent included in Net Interest Expense of
such Person for such period: (a) the amount of amortized debt discount and debt
issuance costs, (b) charges relating to write-ups or write-downs in the book or
carrying value of existing Indebtedness, and (c) interest payable in evidences
of Indebtedness or otherwise not payable in cash during such period.
"North American Venture" means any Domestic Subsidiary (other than a
Guarantor, Funding and Pappagallo) and any Subsidiary of the Borrower
incorporated, organized or formed under the laws of Canada or any province of
Canada.
"Notes" means, collectively, the Revolving Credit Notes, the Term Loan
Notes and the Competitive Notes.
"Notice of Borrowing" has the meaning specified in Subsection 2.4(a).
"Notice of Competitive Bid Request" means a notice provided pursuant
to Section 2.21 in substantially the form of Exhibit L.
"Notice of Continuation or Conversion" has the meaning specified in
Subsection 2.9.
"Obligations" means the Loans, the Letter of Credit Obligations, the
Other Obligations, and all other advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower to the Administrative Agent, any
Lender, any Issuer, any Affiliate of any of them or any Indemnitee, of every
type and description, present or future, whether or not evidenced by any note,
guaranty or other instrument, arising under this Agreement or under any other
Loan Document, whether or not for the payment of money, whether arising by
reason of an extension of credit, opening or amendment of a Letter of Credit or
payment of any draft drawn thereunder, loan, guaranty, indemnification, any
Interest Rate Contract entered into pursuant to Section 6.13 or in any other
manner, whether direct or indirect (including, without limitation, those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired under this Agreement or any
other Loan Document. The term "Obligations" includes, without limitation, all
interest, charges, expenses, fees, attorneys' fees and disbursements and any
other sum chargeable to the Borrower under this Agreement or any other Loan
Document and all obligations of the Borrower to cash collateralize Letter of
Credit Obligations or Other Obligations.
"Open Year" has the meaning specified in Subsection 4.3(c).
"Operating Assets" means assets employed by any Loan Party in the
operation of its business (including, without limitation, assets constituting
property, plant or equipment but excluding assets held for investment).
"Other Obligations" means the total exposure of the Borrower to a
Lender or any of its Affiliates, as determined by such Lender or such Affiliate
in accordance with its customary criteria, arising from any and all Interest
Rate Contracts entered into by the Borrower pursuant to Section 6.13 with such
Lender or any of its Affiliates.
"Other Taxes" has the meaning specified in Subsection 2.16(b).
"Pappagallo" means The Shops for Pappagallo, Inc., an Ohio
corporation.
"Passive Institutional Investor" means any broker, dealer, bank,
insurance company, investment company, investment adviser, employee benefit
plan, pension fund or other institutional investor directly or indirectly owning
Stock of the Borrower to the extent such Person acquires such ownership in the
ordinary course of its business and acquires and continues to hold such
ownership not with the purpose nor the effect of changing or directing the
control, management or policies of such Person.
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan), which is not an
individual account plan, as defined in Section 3(34) of ERISA, and which the
Borrower, any of its Subsidiaries or, if a Title IV Plan, any ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"Permit" means any permit, approval, authorization, license, variance
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Investor" means (a) a Passive Institutional Investor, (b)
any group, as determined in accordance with Section 13(d) of the Exchange Act,
consisting solely of Passive Institutional Investors, (c) Jerome Fisher, his
Affiliates, immediate family members and lineal descendants, and (d) Vincent
Camuto, his Affiliates, immediate family members and lineal descendants.
"Person" means an individual, partnership, corporation (including,
without limitation, a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other entity, or a
Governmental Authority.
"Qualified Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA, which is intended to be tax-qualified under Section
401(a) of the Code, and which the Borrower, any of its Subsidiaries or any ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them, other than a
Multiemployer Plan or plan subject to Section 4063 of ERISA.
"Ratable Portion" or "ratably" means, with respect to any Lender and
any Facility, the quotient obtained by dividing the Commitment in respect of
such Facility of such Lender by the Commitments in respect of such Facility of
all Lenders.
"Rating Agency" means each of Moody's and S&P.
"Receivables Purchase Agreement" means (i) the Receivables Purchase
Agreement dated as of December 28, 1995, between the Borrower and Funding, and
(ii) the Receivables Purchase Agreement dated as of December 28, 1995, between
the Borrower and Nine West Footwear Corporation, as each may be amended,
supplemented or otherwise modified from time to time.
"Receivables Securitization" means the transactions described and
contemplated in the Receivables Purchase Agreement.
"Register" has the meaning specified in Subsection 10.7(c).
"Reimbursement Obligations" means all matured reimbursement or
repayment obligations of the Borrower to each Issuer for payment by such Issuer
of any draft drawn under Letters of Credit pursuant to Letter of Credit
Reimbursement Agreements.
"Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration, in
each case of any Hazardous Material, into the indoor or outdoor environment or
into or out of any property owned or operated by such Person, including, without
limitation, the movement of Contaminants through or in the air, soil, surface
water, ground water or property.
"Remedial Action" means all actions required to (a) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment, or
(c) perform pre-remedial studies and investigations and post-remedial monitoring
and care.
"Reportable Event" means any of the events described in Sections
4043(b)(1), (2), (3), (5), (6), (8) or (9) of ERISA.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and all federal, state, local and foreign laws, rules and regulations,
and all orders, judgments, decrees or other determinations of any Governmental
Authority or arbitrator, applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Responsible Officer" means, with respect to any Person, any of the
executive officers of such Person including, without limitation, any Senior Vice
President of such Person.
"Revolving Credit Borrowing" means a Borrowing consisting of Revolving
Credit Loans made on the same day by the Lenders ratably according to their
respective Revolving Credit Commitments.
"Revolving Credit Commitment" means, as to each Lender, the commitment
of such Lender to make Revolving Credit Loans to the Borrower pursuant to
Section 2.1 in the aggregate principal amount outstanding not to exceed the
amount set forth opposite such Lender's name on Part I of Schedule I under the
caption "Revolving Credit Commitment," as such amount may be reduced or modified
pursuant to this Agreement, and, in the case of each Swing Bank, "Revolving
Credit Commitment" includes the Swing Commitment of such Swing Bank.
"Revolving Credit Loan" means a Loan made by a Lender to the Borrower
pursuant to Section 2.1.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Lender in a principal amount equal to the amount of
such Lender's Revolving Credit Commitment as in effect on the Effective Date, in
substantially the form of Exhibit A-1, evidencing the aggregate Indebtedness of
the Borrower to such Lender resulting from the Revolving Credit Loans made by
such Lender.
"S&P" means Standard & Poors Ratings Group.
"Secured Parties" means the Lenders, the Issuers and the
Administrative Agent.
"Securitization Documents" means each agreement, document and
instrument entered into by the Borrower, a Guarantor or Funding in connection
with the Receivables Securitization, including without limitation, the
Receivables Purchase Agreement, the promissory note(s) of Funding in favor of
the Borrower made in connection therewith and the promissory note(s) of the
Borrower in favor of Funding made in connection therewith.
"Solvent" means, with respect to any Person, that the value of the
assets of such Person (both at fair value and present fair saleable value) is,
on the date of determination, greater than the total amount of liabilities
(including, without limitation, contingent and unliquidated liabilities) of such
Person as of such date and that, as of such date, such Person is able to pay all
liabilities of such Person as such liabilities mature and does not have
unreasonably small capital. In computing the amount of contingent or
unliquidated liabilities of any Person at any time, such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Standby Letter of Credit" means a Letter of Credit other than a
Documentary Letter of Credit.
"Stock" means shares of capital stock, beneficial or partnership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation or equivalent entity, whether voting or non-voting, and
includes, without limitation, common stock and preferred stock.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other business entity of which an aggregate of 50% or more of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors, managers, trustees or other controlling persons, is, at the time,
directly or indirectly, owned or controlled by such Person and/or one or more
Subsidiaries of such Person (irrespective of whether, at the time, Stock of any
other class or classes of such entity shall have or might have voting power by
reason of the happening of any contingency); provided, however, that this
definition does not include the receivables master trust established by Funding
in connection with the Receivables Securitization.
"Subsidiary Security Agreement" means an agreement, in substantially
the form of Exhibit G-2, executed by each of the Guarantors, as such agreement
may be amended, supplemented or otherwise modified from time to time.
"Swing Bank" means each Lender whose name is set forth on Part II of
Schedule I or such other Lender which agrees to act as a Swing Bank hereunder.
"Swing Commitment" means, as to each Swing Bank, the commitment of
such Swing Bank to make Swing Loans to the Borrower pursuant to Section 2.20 in
the aggregate principal amount outstanding not to exceed the amount set forth
opposite such Swing Bank's name on Part II of Schedule I under the caption
"Swing Commitment," as such amount may be reduced or modified pursuant to this
Agreement.
"Swing Loan" means a Loan made by the Swing Bank to the Borrower
pursuant to Section 2.20.
"Swing Loan Borrowing" means a borrowing consisting of a Swing Loan.
"Tax Affiliate" means, as to any Person, (a) any Subsidiary of such
Person, and (b) any Affiliate of such Person with which such Person files or is
eligible to file consolidated, combined or unitary tax returns.
"Tax Returns" has the meaning specified in Section 4.3.
"Taxes" has the meaning specified in Subsection 2.16(a).
"Term Loan" means a Loan made to the Borrower referred to in Section
2.2.
"Term Loan Note" means a promissory note of the Borrower payable to
the order of any Lender in a principal amount equal to the amount of such
Lender's Term Loan as in effect on the Effective Date, in substantially the form
of Exhibit A-2, evidencing the Indebtedness of the Borrower to such Lender
resulting from the Term Loan made by such Lender.
"Termination Date" means the earliest of (a) November 1, 2001 and (b)
the date of termination in whole of the Commitments pursuant to Section 2.6 or
8.2.
"Texas Boot" means Nine West Boot Corporation.
"Title IV Plan" means a Pension Plan, other than a Multiemployer Plan,
which is covered by Title IV of ERISA.
"Total Assets" of any Person means, at any date, the total assets of
such Person and its Subsidiaries at such date determined on a consolidated basis
in conformity with GAAP.
"Total Liabilities" of any Person means, at any date, all obligations
which in conformity with GAAP would be included in determining total liabilities
as shown on the liabilities side of a consolidated balance sheet of such Person
and its Subsidiaries at such date, and in any event includes, without
limitation, all Indebtedness of such Person or any of its Subsidiaries at such
date whether or not the same would be so shown.
"Unfunded Pension Liability" means, as to the Borrower at any time,
the aggregate amount, if any, of the sum of (a) the amount by which the present
value of all accrued benefits under each Title IV Plan of the Borrower, any of
its Subsidiaries or any ERISA Affiliate exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions in effect under such Title IV
Plan, and (b) for a period of five years following a transaction reasonably
likely to be covered by Section 4069 of ERISA, the liabilities (whether or not
accrued) that could be avoided by the Borrower, any of its Subsidiaries or any
ERISA Affiliate as a result of such transaction.
"USSC" means The United States Shoe Corporation, an Ohio corporation.
"USSC Warrants" means the warrants to purchase the Borrower's Stock
issued by the Borrower to USSC pursuant to the Asset Purchase Agreement.
"Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person of which 100% (other than director's qualifying
shares) of the outstanding Stock having ordinary voting power to elect all of
the directors, managers, trustees or other controlling persons, is, at the time,
directly or indirectly, owned or controlled by such Person and/or one or more
Wholly-Owned Subsidiaries of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
"Withdrawal Liability" means, as to the Borrower at any time, the
aggregate amount of the liabilities of the Borrower, any of its Subsidiaries or
any ERISA Affiliate pursuant to Section 4201 of ERISA, and any increase in
contributions required to be made pursuant to Section 4243 of ERISA, with
respect to all Multiemployer Plans.
"Working Capital" means, for any Person at any date, the amount by
which the Current Assets of such Person at such date exceeds the Current
Liabilities of such Person at such date.
1.2 Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including."
1.3 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
1.4 Certain Terms. The words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole, and not to any
particular Article, Section, Subsection or clause in this Agreement. References
herein to an Exhibit, Schedule, Article, Section, Subsection or clause refer to
the appropriate Exhibit or Schedule to, or Article, Section, Subsection or
clause in this Agreement.
(b) The terms "Lender," "Issuer," and "Administrative Agent"
include their respective successors and the terms "Lender" and "Issuer" include
each assignee of such Lender or Issuer who becomes a party hereto pursuant to
Section 10.7.
(c) Upon the appointment of any successor Administrative Agent
pursuant to Section 9.6, references to Citibank in Section 9.3 and in the
definitions of Eurodollar Rate shall be deemed to refer to the successor then
acting as the Administrative Agent.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.1 The Revolving Credit Loans. (a) On the terms and subject to the
conditions contained in this Agreement, on the Effective Date each Lender
severally agrees to make a loan (each a "Revolving Credit Loan") to the Borrower
in an aggregate amount sufficient to repay the principal amount of all Revolving
Credit Loans outstanding on the Effective Date less $50,000,000; provided,
however, to the extent that any Lender has Revolving Credit Loans outstanding
under the Existing Credit Agreement ("Existing Revolving Credit Loans") and is
making a Revolving Credit Loan on the Effective Date, such Existing Revolving
Credit Loans shall be deemed a Revolving Credit Loan made on the Effective Date.
(b) On the terms and subject to the conditions contained in this
Agreement, each Lender severally agrees to make from and after the Effective
Date Revolving Credit Loans to the Borrower from time to time on any Business
Day during the period from the date hereof until the Business Day preceding the
Termination Date in an aggregate amount not to exceed at any time outstanding
such Lender's Revolving Credit Commitment; provided, however, that at no time
shall any Lender be obligated to make a Revolving Credit Loan in excess of such
Lender's Ratable Portion of the Available Credit. In no event shall any Swing
Bank be obligated to make any Revolving Credit Loan or Swing Loan if the sum of
outstanding Revolving Credit Loans and Swing Loans made or to be made by such
Swing Bank would exceed its Revolving Credit Commitment.
(c) Within the limits of each Lender's Revolving Credit Commitment,
amounts prepaid pursuant to Section 2.8 (other than pursuant to Section 2.8(d))
may be reborrowed under this Section 2.1. The Revolving Credit Loans of each
Lender shall be evidenced by the Revolving Credit Note to the order of such
Lender.
2.2 The Term Loans. On the terms and subject to the conditions
contained in this Agreement, on the Effective Date, each Lender severally agrees
to make a Loan (each a "Term Loan") to the Borrower in an aggregate amount
sufficient to repay the principal amount of all Term Loans plus $50,000,000 of
Revolving Credit Loans outstanding on the Effective Date; provided, however, to
the extent that any Lender which has a Term Loan outstanding under the Existing
Credit Agreement (an "Existing Term Loan"), such Existing Term Loan shall be
deemed a Term Loan made under this Agreement. Amounts of the Term Loans prepaid
pursuant to Section 2.8 may not be reborrowed. The Term Loan of each Lender
shall be evidenced by the Term Note to the order of such Lender.
2.3 The Letters of Credit. All Letter of Credit Undrawn Amounts
outstanding on the Effective Date with respect to Letters of Credit issued by an
Issuer shall become on the Effective Date Letter of Credit Undrawn Amounts
outstanding hereunder owed to such Issuer.
2.4 Making the Loans. Each Revolving Credit Borrowing shall be made
on notice, given by the Borrower to the Administrative Agent not later than
12:00 P.M. (New York City time) on the Business Day of the proposed Revolving
Credit Borrowing, in the case of Revolving Credit Loans that are to be made as
Base Rate Loans, and on the third Business Day prior to the date of the proposed
Revolving Credit Borrowing, in the case of Revolving Credit Loans that are to be
made as Eurodollar Rate Loans. Each such notice (a "Notice of Borrowing") shall
be in substantially the form of Exhibit B, specifying therein (i) the date of
such proposed Revolving Credit Borrowing, (ii) the aggregate amount of such
proposed Revolving Credit Borrowing, (iii) the amount thereof, if any, requested
to be Eurodollar Rate Loans, and (iv) the initial Interest Period or Periods for
any such Eurodollar Rate Loans. The Revolving Credit Loans shall be made as
Base Rate Loans unless (subject to Section 2.13) the Notice of Borrowing
specifies that all or a pro rata portion thereof shall be Eurodollar Rate Loans;
provided, however, that the aggregate of the Eurodollar Rate Loans for each
Interest Period must be in an amount of not less than $1,000,000 or an integral
multiple of $1,000,000 in excess thereof.
(b) The Administrative Agent shall give to each Lender prompt
notice of the Administrative Agent's receipt of a Notice of Borrowing and, if
Eurodollar Rate Loans are properly requested in such Notice of Borrowing, the
applicable interest rate under Subsection 2.10(b). Each Lender shall, before
12:00 Noon (New York City time) on the date of the proposed Borrowing, make
available for the account of its Applicable Lending Office to the Administrative
Agent at its address referred to in Section 10.2, in immediately available
funds, such Lender's Ratable Portion of such proposed Borrowing. After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower at the Administrative Agent's
aforesaid address.
(c) Each Revolving Credit Borrowing shall be in an aggregate
amount of not less than $1,000,000 or an integral multiple of $1,000,000 in
excess thereof.
(d) Each Notice of Borrowing shall be irrevocable and binding on
the Borrower. In the case of any proposed Borrowing which the related Notice of
Borrowing specifies is to be comprised of Eurodollar Rate Loans, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such proposed Borrowing the applicable conditions
set forth in Article III, including, without limitation, any loss (including,
without limitation, loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund any Eurodollar Rate Loan to be made by such Lender as part
of such proposed Borrowing when such Eurodollar Rate Loan, as a result of such
failure, is not made on such date, assuming for such purpose that such Lender
will fund such Eurodollar Rate Loan in the London interbank eurodollar market
with a loan of the same amount and Interest Period as such Eurodollar Rate Loan.
(e) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any proposed Borrowing that such Lender will
not make available to the Administrative Agent such Lender's Ratable Portion of
such Borrowing, the Administrative Agent may assume that such Lender has made
such Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this Section 2.4 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such Ratable Portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to the Loans comprising such
Borrowing and (ii) in the case of such Lender, the Federal Funds Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Loan as part of such Borrowing
for purposes of this Agreement. If the Borrower shall repay to the
Administrative Agent such corresponding amount, such payment shall not relieve
such Lender of any obligation it may have to the Borrower hereunder.
(f) The failure of any Lender to make the Loan to be made by it
as part of any Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its Loan on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on the date of any Borrowing.
(g) Each Swing Loan Borrowing shall be made upon such notice as
the Swing Bank and the Borrower shall agree and shall bear interest at a rate to
be agreed between the Swing Bank and the Borrower.
(h) Each Competitive Borrowing shall be made, in the case of a
Eurodollar Competitive Borrowing, three Business Days following the
Administrative Agent's receipt of the Borrower's decision to accept a
Competitive Bid and, in the case of a Fixed Rate Borrowing, the same Business
Day as the Administrative Agent's receipt of the Borrower's decision to accept a
Competitive Bid, all in accordance with the provisions of Section 2.21(d).
(i) In connection with the Competitive Loans, the Administrative
Agent shall give prompt notice to the Lender or Lenders whose Competitive Bid
was accepted of such acceptance. Each Lender whose Competitive Bid was accepted
shall, before 12:00 P.M. (New York City time) on the date of the proposed
Borrowing, make available for the account of its Applicable Lending Office to
the Administrative Agent at its address referred to in Section 10.2, in
immediately available funds, the amount committed by such Lender in its
Competitive Bid(s) (a Lender's "Competitive Loan Obligation"). After the
Administrative Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in Article III, the Administrative Agent will
make such funds available to the Borrower at the Administrative Agent's
aforesaid address.
(j) Each Notice of Borrowing or Accepted Competitive Bid shall
be irrevocable and binding on the Borrower. In the case of any proposed
Borrowing which the related Notice of Borrowing specifies is to be comprised of
Eurodollar Rate Loans and in the case of the Competitive Loans, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing or Accepted Competitive Bid for such proposed Borrowing
or Loan the applicable conditions set forth in Article III, including, without
limitation, any loss (including, without limitation, loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the Loan to be made
by such Lender as part of such proposed Borrowing when such Loan, as a result of
such failure, is not made on such date.
2.5 Fees. (a) The Borrower agrees to pay to each Lender a facility
fee (the "Facility Fee") on the sum of such Lender's Commitment and the Term
Loan made by such Lender from the date hereof until the Termination Date at the
rates, and payable at the times, specified on Schedule III.
(b) The Borrower has agreed to pay to the Administrative Agent an
administrative agency fee, the amount and dates of payment of which are embodied
in a separate agreement, dated March 15, 1995, between the Borrower and Citibank
(the "Administrative Agency Fee Letter").
(c) The Borrower has agreed to pay to the Administrative Agent for
the account of each Lender for whom the sum of such Lender's Revolving Credit
Commitment and Term Loan committed by such Lender (its "New Commitment") exceeds
the sum of such Lender's Commitment and the Term Loan made by such Lender under
the Existing Credit Agreement immediately prior to the Effective Date (its
"Existing Commitment"), an up-front fee calculated at the following rates:
(a) For each Lender whose New Commitment is $25,000,000 to
$39,999,999: 0.05% on the amount by which the sum of Commitment allocated to
such Lender and the Term Loan made by such Lender on the Effective Date exceeds
its Existing Commitment.
(b) For each Lender whose New Commitment is $40,000,000 or more:
0.10% on the amount by which the sum of Commitment allocated to such Lender and
the Term Loan made by such Lender on the Effective Date exceeds its Existing
Commitment.
Up-front Fees are payable on or before the Effective Date.
2.6 Amendment, Reduction and Termination of the Commitments. (a) On
the Effective Date, the "Revolving Credit Commitments" outstanding under the
Existing Credit Agreement shall be amended as set forth under the heading
"Revolving Credit Commitments" in Part I of Schedule I.
(b) The Borrower may, upon at least three Business Days' prior notice
to the Administrative Agent, terminate in whole or reduce ratably in part the
unused portions of the respective Revolving Credit Commitments of the Lenders;
provided, however, that each partial reduction shall be in the aggregate amount
of not less than $1,000,000 or an integral multiple of $1,000,000 in excess
thereof. The then current Revolving Credit Commitments shall be reduced on each
date on which a prepayment of Revolving Credit Loans is made pursuant to Section
2.8(d) in the amount of such prepayment and the Revolving Credit Commitment of
each Lender shall be reduced by its Ratable Portion of such amount.
2.7 Repayment. (a) The Borrower shall repay the entire unpaid
principal amount of the Revolving Credit Loans on the Termination Date.
(b) The Borrower shall repay the Term Loans at the dates and in the
amounts set forth below:
On the First Business Day
to Occur On or After: Amount
--------------------- ------
October 1, 1996 $11,000,000
January 1, 1997 $ 2,000,000
April 1, 1997 $ 5,000,000
July 1, 1997 $ 5,000,000
October 1, 1997 $18,000,000
January 1, 1998 $ 5,000,000
April 1, 1998 $10,000,000
July 1, 1998 $ 5,000,000
October 1, 1998 $30,000,000
January 1, 1999 $10,000,000
April 1, 1999 $20,000,000
July 1, 1999 $10,000,000
October 1, 1999 $35,000,000
January 1, 2000 $10,000,000
April 1, 2000 $20,000,000
July 1, 2000 $10,000,000
October 1, 2000 $35,000,000
January 1, 2001 $10,000,000
April 1, 2001 $30,000,000
July 1, 2001 $10,000,000
October 1, 2001 $44,000,000
provided, however, that the Borrower shall repay the entire unpaid principal
amount of the Term Loans on the Termination Date.
(c) The Borrower shall repay the entire unpaid principal amount
of each Competitive Loan on the last day of the Interest Period applicable to
such Loan and on the Termination Date.
(d) The Borrower shall repay the entire unpaid principal amount
of the Swing Loans on the Termination Date to the extent not theretofore repaid
pursuant to Section 2.20.
2.8 Prepayments. (a) The Borrower shall have no right to prepay the
principal amount of any Loan other than as provided in this Section 2.8.
(b) The Borrower may (i) upon at least three Business Days'
prior notice to the Administrative Agent, in the case of Eurodollar Rate Loans
and (ii) on or after the date of written notice to the Administrative Agent, in
the case of Base Rate Loans, stating in such notice the proposed date and
aggregate principal amount of the prepayment, prepay the outstanding principal
amount of the Swing Loans or Revolving Credit Loans, as the case may be, in
whole or ratably in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however, that each partial
prepayment of Revolving Credit Loans shall be in an aggregate principal amount
not less than $1,000,000 or integral multiples of $1,000,000 in excess thereof.
Upon the giving of such notice of prepayment, the principal amount of the Swing
Loans or Revolving Credit Loans, as the case may be, specified to be prepaid
shall become due and payable on the date specified for such prepayment.
(c) The Borrower may (i) upon at least three Business Days'
prior notice to the Administrative Agent, in the case of Eurodollar Rate Loans
and (ii) on or after the date of written notice to the Administrative Agent, in
the case of Base Rate Loans, stating in such notice the proposed date and
aggregate principal amount of the prepayment, prepay the outstanding principal
amount of the Term Loans, in whole or ratably in part, together with accrued
interest to the date of such prepayment on the principal amount prepaid;
provided, however, that (i) each partial prepayment shall be in an aggregate
amount not less than $1,000,000 or integral multiples of $1,000,000 in excess
thereof and (ii) any such partial prepayment shall be applied to the remaining
installments of such outstanding principal amount of the Term Loans in the
direct order of their maturities. Upon the giving of such notice of prepayment,
the principal amount of the Term Loans specified to be prepaid shall become due
and payable on the date specified for such prepayment.
(d) The Borrower shall prepay the Term Loans and, if there are
no Term Loans outstanding, the Revolving Credit Loans, within three Business
Days after the receipt by the Borrower or any Guarantor of any Asset Sale
Proceeds, Equity Issuance Proceeds or Debt Issuance Proceeds in the following
amounts: (i) in the case of Asset Sale Proceeds, an amount equal to such Asset
Sale Proceeds, provided, however, that no prepayment by reason of the Borrower's
or any Guarantor's receipt of Asset Sale Proceeds shall be required unless and
until the aggregate amount of all such Asset Sale Proceeds received by the
Borrower and the Guarantors since the Effective Date or, if thereafter, the last
date of a prepayment pursuant to this Subsection 2.8(d) by reason of the
Borrower's or any Guarantor's receipt of Asset Sale Proceeds, equals or exceeds
$20,000,000; (ii) in the case of Equity Issuance Proceeds, an amount equal to
50% of such Equity Issuance Proceeds, provided, however, that no prepayment by
reason of the Borrower's or any Guarantor's receipt of Equity Issuance Proceeds
shall be required if, upon receipt of such proceeds, the Borrower's long-term
senior unsecured indebtedness is rated Investment Grade or the Borrower's
Maximum Leverage Ratio is less than 1.75:1.00; and (iii) in the case of Debt
Issuance Proceeds, an amount equal to such Debt Issuance Proceeds. All
prepayments shall be made together with accrued interest to the date of such
prepayment on the principal amount prepaid. Any partial prepayment of the Term
Loans shall be applied to the remaining installments of the outstanding
principal amount of the Term Loans as follows: (i) Asset Sale Proceeds arising
from the sale of certain properties in Cincinnati owned by Community Urban
Redevelopment of Duck Creek, Inc. and the sale by the Borrower of Texas Boot,
shall be applied in direct order of the maturities of such installments; and
(ii) all other Asset Sale Proceeds, Equity Issuance Proceeds and Debt Issuance
Proceeds shall be applied 50% in the direct order and 50% in the inverse order
of the maturities of such installments.
(e) The Borrower shall, within three Business Days after its
receipt of any reversion from a Pension Plan, prepay the Term Loans in an amount
equal to the amount of such reversion so received, together with accrued
interest to the date of such prepayment on the amount prepaid. Any partial
prepayment of the Term Loans shall be applied to the remaining installments of
the outstanding principal amount of the Term Loans in the inverse order of their
maturities. For purposes of this subsection (g), reversion is defined as the
amount of surplus assets which, upon the termination of any Pension Plan, revert
to the Borrower or any of its Subsidiaries (net of (i) any taxes, after taking
into account any available tax credits or deductions, and excise taxes or
penalties thereon, and (ii) any amount thereof that, substantially
contemporaneously with such termination, are contributed by the Borrower to
another Pension Plan).
(f) If at any time the sum of (i) aggregate principal amount of
Swing Loans, Competitive Loans and Revolving Credit Loans outstanding at such
time plus, in the case of clause (A) hereof only, (ii) the sum of (x) the Letter
of Credit Undrawn Amounts at such time plus (y) the Reimbursement Obligations at
such time, exceeds (A) the Revolving Credit Commitments at any such time other
than during a Clean-Up Period or (B) $75,000,000 at any time during any Clean-Up
Period, the Borrower shall prepay within one Business Day thereof the Swing
Loans then outstanding in an amount equal to such excess, together with accrued
interest and, if there are no Swing Loans outstanding or if such prepayment of
the Swing Loans does not eliminate such excess, the Revolving Credit Loans
and/or the Reimbursement Obligations then outstanding in an amount equal to the
uneliminated portion of such excess, together with accrued interest on the
principal prepaid. If there are no Swing Loans, Revolving Credit Loans or
Reimbursement Obligations then outstanding or if such prepayment of Revolving
Credit Loans or Reimbursement Obligations does not eliminate such excess, the
Borrower shall fund the L/C Cash Collateral Account to cash collateralize
outstanding Letter of Credit Undrawn Amounts in an amount equal to the
uneliminated portion of such excess.
2.9 Conversion/Continuation Option. The Borrower may elect (a) at
any time to convert Base Rate Loans or any portion thereof to Eurodollar Rate
Loans, or (b) at the end of any Interest Period with respect thereto, to convert
Eurodollar Rate Loans or any portion thereof into Base Rate Loans or to continue
such Eurodollar Rate Loans or any portion thereof for an additional Interest
Period; provided, however, that the aggregate of the Eurodollar Loans for each
Interest Period must be in the amount of $1,000,000 or an integral multiple of
$1,000,000 in excess thereof. Each conversion or continuation shall be
allocated among the Lenders in accordance with their respective Ratable
Portions. Each such election shall be in substantially the form of Exhibit C
hereto (a "Notice of Conversion or Continuation") and shall be made by giving
the Administrative Agent at least (x) three Business Days' prior written notice
thereof, in the case of the conversion of Base Rate Loans into Eurodollar Rate
Loans or the continuation of Eurodollar Rate Loans, and (y) one Business Day's
prior written notice thereof, in the case of the conversion of Eurodollar Rate
Loans into Base Rate Loans, in each case specifying (i) the amount and type of
Loan being converted or continued, (ii) in the case of a conversion to or a
continuation of Eurodollar Rate Loans, the Interest Period therefor, and (iii)
in the case of a conversion, the date of conversion (which date shall be a
Business Day and, if a conversion from Eurodollar Rate Loans, shall also be the
last day of the Interest Period therefor). The Administrative Agent shall
promptly notify each Lender of its receipt of a Notice of Conversion or
Continuation and of the contents thereof. Notwithstanding the foregoing, (x) no
conversion in whole or in part of Base Rate Loans to Eurodollar Rate Loans, and
no continuation in whole or in part of Eurodollar Rate Loans upon the expiration
of any Interest Period therefor, shall be permitted at any time at which an
Event of Default shall have occurred and be continuing, and (y) any such
conversion during the continuance of a Default shall not be permitted in respect
of Eurodollar Rate Loans having an Interest Period longer than one month. If,
within the time period required under the terms of this Section 2.9, the
Administrative Agent does not receive a Notice of Conversion or Continuation
from the Borrower containing a permitted election to continue any Eurodollar
Rate Loans for an additional Interest Period, then, upon the expiration of the
Interest Period therefor, such Loans will be automatically converted to Base
Rate Loans. Each Notice of Conversion or Continuation shall be irrevocable. No
conversion of any Swing Loan to a Eurodollar Rate Loan may be made.
2.10 Interest. The Borrower shall pay interest on the unpaid
principal amount of each Loan from the date thereof until the principal amount
thereof shall be paid in full, at the following rates per annum:
(a) For Base Rate Loans, at a rate per annum equal at all times
to the Base Rate in effect from time to time plus the Applicable Base Rate
Margin, payable in arrears quarterly on the first day of each January, April,
July and October, on the Termination Date and on the date any Base Rate Loan is
converted or paid in full (but only on the Base Rate Loan so converted or paid
in full); provided, however, that during the continuance of an Event of Default,
all Base Rate Loans shall bear interest, payable on demand, at a rate per annum
equal at all times to 2.00% per annum above the Base Rate in effect from time to
time plus the Applicable Base Rate Margin.
(b) For Eurodollar Rate Loans other than Competitive Loans, at a
rate per annum equal at all times during the applicable Interest Period for each
such Eurodollar Rate Loan to the sum of the Eurodollar Rate for such Interest
Period plus the Applicable Eurodollar Rate Margin in effect on the first day of
such Interest Period, payable in arrears on the last day of such Interest
Period, on the Termination Date and, if such Interest Period has a duration of
more than three months, on each day during such Interest Period which occurs
every three months from the first day of such Interest Period; provided,
however, that during the continuance of an Event of Default, all Eurodollar Rate
Loans shall bear interest, payable on demand, at a rate per annum equal at all
times to 2.00% above the Eurodollar Rate in effect from time to time plus the
Applicable Eurodollar Rate Margin.
(c)(i) For Eurodollar Rate Loans that are Competitive Loans, at
a rate per annum equal at all times during the applicable Interest Period for
each such Eurodollar Rate Loan to the sum of the Eurodollar Rate for such
Interest Period plus or minus the Eurodollar Competitive Borrowing Margin for
such Competitive Loan and (ii) for Fixed Rate Loans, at a rate per annum
(computed based on a year of 365 or 366 days, as the case may be) equal at all
times to the fixed rate of interest offered by the Lender making such Loan and
accepted by the Borrower pursuant to Section 2.21; provided, however that
interest on each Competitive Loan shall be payable on the last day of the
applicable Interest Period, on the Termination Date and if such Interest Period
has a duration of more than three months, on each day during such Interest
Period which occurs every three months from the first day of such Interest
Period.
2.11 Interest Rate Determination and Protection.
(a) The Eurodollar Rate for each Interest Period for Eurodollar
Rate Loans shall be determined by the Administrative Agent two Business Days
before the first day of such Interest Period.
(b) If, with respect to Eurodollar Rate Loans, the Majority
Lenders notify the Administrative Agent that the Eurodollar Rate for any
Interest Period therefor will not adequately reflect the cost to such Majority
Lenders of making such Loans or funding or maintaining their respective
Eurodollar Rate Loans for such Interest Period, the Administrative Agent shall
forthwith so notify the Borrower and the Lenders, whereupon:
(i) each Eurodollar Loan will automatically, on the last day of
the then existing Interest Period therefor, convert into a Base Rate Loan; and
(ii) the obligations of the Lenders to make Eurodollar Rate
Loans or to convert Base Rate Loans into Eurodollar Rate Loans shall be
suspended until the Administrative Agent shall notify the Borrower that such
Lenders have determined that the circumstances causing such suspension no longer
exist.
2.12 Increased Costs. If, due to either (a) the introduction of or
any change in or in the interpretation of any law or regulation (other than any
change by way of imposition or increase of reserve requirements included in
determining the Eurodollar Rate Reserve Percentage) or (b) compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining any
Eurodollar Rate Loans, then the Borrower shall from time to time, upon demand by
such Lender (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost, submitted to the Borrower and the
Administrative Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error. If the Borrower so notifies the Administrative
Agent within five Business Days after any Lender notifies the Borrower of any
increased cost pursuant to the foregoing provisions of this Section 2.12, the
Borrower may, at its election, either (A) prepay in full all Eurodollar Rate
Loans of such Lender then outstanding in accordance with Subsection 2.8(b) and,
additionally, reimburse such Lender for such increased cost in accordance with
this Section 2.12 or (B) convert all Eurodollar Rate Loans of all Lenders then
outstanding into Base Rate Loans in accordance with Section 2.9 and,
additionally, reimburse such Lender for such increased cost in accordance with
this Section 2.12.
2.13 Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation of
any law or regulation shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to fund
or maintain Eurodollar Rate Loans, then, on notice thereof and demand therefor
by such Lender to the Borrower through the Administrative Agent, (a) the
obligation of such Lender to make or to continue Eurodollar Rate Loans and to
convert Base Rate Loans into Eurodollar Rate Loans shall terminate and (b) the
Borrower shall, at its election, either prepay in full all Eurodollar Rate Loans
of such Lender then outstanding, together with interest accrued thereon or
convert such Eurodollar Rate Loans to Base Rate Loans; provided, however, that
if the Borrower does not make such election within five Business Days of such
notice, all such Eurodollar Rate Loans shall automatically convert into Base
Rate Loans as of such fifth Business Day unless an earlier date for such
conversion is required by law.
2.14 Capital Adequacy. If (a) the introduction of or any change in
or in the interpretation of any law or regulation, (b) compliance with any law
or regulation, or (c) compliance with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law)
affects or would affect the amount of capital required or expected to be
maintained by any Lender or any corporation controlling any Lender and such
Lender reasonably determines that such amount is based upon the existence of
such Lender's Commitments and Loans and its other commitments and loans of this
type, then, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's
Commitments and Loans. A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender shall be conclusive and
binding for all purposes absent manifest error.
2.15 Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes not later than 11:00 A.M. (New York City
time) on the day when due, in Dollars, to the Administrative Agent at its
address referred to in Section 10.2 in immediately available funds without set-
off or counterclaim. The Administrative Agent will promptly thereafter cause to
be distributed immediately available funds relating to the payment of principal
or interest or fees in respect of a Facility to the Lenders, in accordance with
their respective Ratable Portions, for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of any other
amount payable to any Lender to such Lender for the account of its Applicable
Lending Office, in each case to be applied in accordance with the terms of this
Agreement; provided, however, that following the Termination Date all such
amounts shall be applied to the Obligations pro rata in accordance with the
amounts owed to the Lenders and the Administrative Agent and that amounts
payable pursuant to Sections 2.12, 2.14 and 2.16 shall be paid only to the
affected Lender or Lenders. Payment received by the Administrative Agent after
11:00 A.M. (New York City time) shall be deemed to be received on the next
Business Day.
(b) All computations of interest in connection with Fixed Rate
Borrowings shall be made by the Administrative Agent on the basis of a year of
365 or 366 days, as the case may be, and all computations of interest based on
the Base Rate, the Eurodollar Rate and the Federal Funds Rate and of fees
hereunder shall be made by the Administrative Agent on the basis of a year of
360 days, in each case for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest and
fees are payable. Each determination by the Administrative Agent of an interest
rate hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(c) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fee, as the case
may be; provided, however, that if such extension would cause payment of
interest on or principal of any Eurodollar Rate Loan to be made in the next
calendar month, such payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due hereunder to the
Lenders that the Borrower will not make such payment in full, the Administrative
Agent may assume that the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption, cause to be distributed to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent the
Borrower shall not have so made such payment in full to the Administrative
Agent, each Lender shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Lender together with interest thereon, for each
day from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Administrative Agent, at the Federal Funds
Rate.
(e) With respect to the Competitive Loans, each payment of
principal of any Competitive Borrowing shall be allocated pro rata among the
Lenders participating in such Competitive Borrowing in accordance with the
respective principal amounts of their outstanding Loans comprising such
Competitive Borrowing. Each payment of interest on any Competitive Borrowing
shall be allocated pro rata among the Lenders participating in such Competitive
Borrowing in accordance with the respective amounts of accrued and unpaid
interest on their outstanding Competitive Loans comprising such Competitive
Borrowing.
2.16 Taxes. (a) Any and all payments by the Borrower under each
Loan Document shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, (i) in the
case of each Lender, each Issuer and the Administrative Agent, taxes measured by
its net income, and franchise taxes imposed on it, by any jurisdiction (or any
political subdivision thereof) under the laws of which such Person is organized
or qualified to do business, (ii) in the case of any Lender, taxes measured by
its net income, and franchise taxes imposed on it, by the jurisdiction (or any
political subdivision thereof) in which is located such Lender's Applicable
Lending Office, (iii) in the case of each Lender, each Issuer and the
Administrative Agent either organized under the laws of a jurisdiction in the
United States or engaged in a trade or business within the United States or, if
a tax treaty is applicable to such Person on the Effective Date (or the date of
an Assignment and Acceptance), engaged in a trade or business within the United
States through a permanent establishment, United States federal income taxes on
its net income, and (iv) in the case of each Lender organized under the laws of
a jurisdiction outside the United States, United States federal withholding tax
payable with respect to payments by the Borrower which would not have been
imposed had such Lender, to the extent required under Section 2.16(f), delivered
to the Borrower and the Administrative Agent the forms prescribed thereunder
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If the Borrower
shall be required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender or the Administrative Agent (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including, without limitation, deductions applicable to additional
sums payable under this Section 2.16) such Lender or the Administrative Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law, and (iv) the
Borrower shall deliver to the Administrative Agent evidence of such payment to
the relevant taxing or other authority.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies of the United States or any political subdivision thereof or
any applicable foreign jurisdiction which arise from any payment made under any
Loan Document or from the execution, delivery or registration of, or otherwise
with respect to, any Loan Document (collectively, "Other Taxes").
(c) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.16) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including, without
limitation, for penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the
date such Lender or the Administrative Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes, the Borrower will furnish to the Administrative Agent, at its
address referred to in Section 10.2, the original or a certified copy of a
receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 2.16 shall survive the payment in full of the Obligations.
(f) Prior to the Effective Date in the case of each initial
Lender, and prior to the date of the Assignment and Acceptance pursuant to which
it becomes a Lender in the case of each other Lender, and from time to time
thereafter if either required by law or reasonably requested by the Borrower or
the Administrative Agent (unless such Lender is unable to do so by reason of a
change in law (including, without limitation, any statute, treaty, ruling,
determination or regulation) occurring subsequent to the Effective Date or date
of Assignment and Acceptance, as the case may be), each Lender organized under
the laws of a jurisdiction outside the United States shall provide the
Administrative Agent and the Borrower with two valid, accurate and complete
original signed copies of IRS Form 4224 or Form 1001 or other applicable form,
certificate or document prescribed by the IRS certifying as to such Lender's
entitlement to full exemption from United States withholding tax with respect to
all payments to be made to such Lender under this Agreement. Unless the
Borrower and the Administrative Agent have received forms or other documents
indicating that payments hereunder or under any Note are not subject to United
States withholding tax, the Borrower or the Administrative Agent shall, in the
case of payments to or for any Lender organized under the laws of a jurisdiction
outside the United States, withhold taxes from such payments at the applicable
statutory rate, or at a rate reduced by an applicable tax treaty (provided that
the Borrower or the Administrative Agent, as the case may be, has received forms
or other documents indicating that such reduced rate applies).
2.17 Sharing of Payments, Etc. (a) If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise but other than pursuant to Section 2.12, 2.14 or 2.16) on
account of Loans made by it and there is any Reimbursement Obligation
outstanding in respect of which the relevant Issuer has not received payment in
full from the Lenders pursuant to Subsection 2.18(h), such Lender (a "Purchasing
Lender") shall purchase a participation in all such Reimbursement Obligations in
an amount equal to the lesser of such payment and the amount of such
Reimbursement Obligations for which such Issuer has not so received payment in
full. If, after giving effect to the foregoing, any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise but other than pursuant to Section 2.12, 2.14 or 2.16) on
account of the Loans made by it in excess of its Ratable Portion of payments
obtained by all the Lenders on account of the Loans made by the Lenders, such
Lender shall forthwith purchase from the other Lenders such participations in
their Loans as shall be necessary to cause such Purchasing Lender to share the
excess payment ratably with each of them.
(b) If all or any portion of any payment received by a
Purchasing Lender is thereafter recovered from such Purchasing Lender, such
purchase from each selling Lender described in paragraph (a) above (a "Selling
Lender") shall be rescinded and such Selling Lender shall repay to the
Purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Selling Lender's ratable share (according to the
proportion of (i) the amount of such Selling Lender's required repayment to (ii)
the total amount so recovered from the Purchasing Lender) of any interest or
other amount paid or payable by the Purchasing Lender in respect of the total
amount so recovered. The Borrower agrees that any Purchasing Lender purchasing
a participation from another Selling Lender pursuant to this Section 2.17 may,
to the fullest extent permitted by law, exercise all its rights of payment
(including, without limitation, the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
2.18 Letter of Credit Facility. (a) On the terms and subject to the
conditions contained in this Agreement, each Issuer agrees to issue one or more
Letters of Credit at the request of the Borrower for the account of the Borrower
from time to time during the period commencing on the date hereof and ending
seven calendar days prior to the Termination Date; provided, however, that no
Issuer shall be under any obligation to issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental Authority
or arbitrator shall purport by its terms to enjoin or restrain such Issuer from
issuing such Letter of Credit or any Requirement of Law applicable to such
Issuer or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over such Issuer shall prohibit, or
request that such Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon such
Issuer with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuer is not otherwise compensated) not in
effect on the date hereof or result in any unreimbursed loss, cost or expense
which was not applicable, in effect or known to such Issuer as of the date
hereof and which such Issuer in good faith deems material to it;
(ii) such Issuer shall have received written notice from the
Administrative Agent, any Lender or the Borrower, on or prior to the requested
date of issuance of such Letter of Credit, that one or more of the applicable
conditions contained in Article III is not then satisfied;
(iii) after giving effect to the issuance of such Letter of
Credit, the aggregate Letter of Credit Obligations, outstanding Swing Loans,
outstanding Competitive Loans and the outstanding Revolving Credit Loans would
exceed the Commitments;
(iv) after giving effect to the issuance of such Letter of
Credit, the sum of (A) the Letter of Credit Undrawn Amounts at such time and (B)
the Reimbursement Obligations at such time exceeds $100,000,000;
(v) after giving effect to the issuance of such Letter of
Credit, the sum of the Letter of Credit Undrawn Amounts and the Reimbursement
Obligations in respect of Letters of Credit denominated in a currency other than
United States Dollars exceeds $50,000,000; or
(vi) fees due in connection with a requested issuance have not
been paid.
None of the Lenders (other than the Issuers) shall have any obligation to issue
any Letter of Credit.
(b) In no event shall the expiration date of any Letter of Credit be
(other than as a result of an extension thereof approved by the Issuer) more
than one year after the date of issuance thereof, nor shall the expiration date
of any Letter of Credit fall after seven calendar days preceding the Termination
Date unless on the date of issuance thereof, the Borrower shall have cash
collateralized such Letter of Credit to the reasonable satisfaction of the
Administrative Agent and the relevant Issuer. In no event shall any Letter of
Credit denominated in a currency other than United States Dollars be issued
unless the Borrower enters into prior to or simultaneously with the issuance
thereof one or more foreign currency futures, forward contracts or other similar
arrangements designed to provide protection against fluctuations in foreign
currency exchange rates, on a notional amount equal to at least 70% of the face
amount of such Letter of Credit, on terms and with counterparties reasonably
satisfactory to the Administrative Agent.
(c) Prior to the issuance of each Letter of Credit, and as a
condition of such issuance and of the participation of each Lender (other than
the Issuer of such Letters of Credit) in the Letter of Credit Obligations
arising with respect thereto, the Borrower shall have delivered to such Issuer a
letter of credit reimbursement agreement, in substantially the form of Exhibit D
(a "Letter of Credit Reimbursement Agreement"), signed by the Borrower, and such
other documents or items as may be required pursuant to the terms thereof. In
the event of any conflict between the terms of any Letter of Credit
Reimbursement Agreement and this Agreement, the terms of this Agreement shall
govern.
(d) In connection with the issuance of each Letter of Credit, the
Borrower shall give the relevant Issuer and the Administrative Agent at least
two Business Days' prior written notice (a "Letter of Credit Request"), in
substantially the form of Exhibit E (or in such other written or electronic form
as is acceptable to the Issuer), of the requested issuance of such Letter of
Credit. Such notice shall be irrevocable and shall specify the Issuer of such
Letter of Credit, the stated amount of the Letter of Credit requested, which
stated amount shall not be less than $5,000, the date of issuance of such
requested Letter of Credit (which day shall be a Business Day), the date on
which such Letter of Credit is to expire (which date shall be a Business Day),
and the Person for whose benefit the requested Letter of Credit is to be issued.
Such notice, to be effective, must be received by the relevant Issuer and the
Administrative Agent not later than 11:00 A.M. (New York City time) on the last
Business Day on which notice can be given under the immediately preceding
sentence.
(e) Subject to the terms and conditions of this Section 2.18 and
provided that the applicable conditions set forth in Article III are satisfied,
the relevant Issuer shall, on the requested date, issue a Letter of Credit on
behalf of the Borrower in accordance with such Issuer's usual and customary
business practices. On the date of the proposed issuance of the Letter of
Credit, the Administrative Agent shall confirm to the relevant Issuer that the
applicable conditions in Article III are satisfied.
(f) Immediately upon the issuance by an Issuer of a Letter of Credit
in accordance with the terms and conditions of this Agreement, such Issuer shall
be deemed to have sold and transferred to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's Ratable Portion of the Revolving Credit
Commitments, in such Letter of Credit and the obligations of the Borrower with
respect thereto (including, without limitation, all Letter of Credit Obligations
with respect thereto) and any security therefor and guaranty pertaining thereto.
(g) In determining whether to pay under any Letter of Credit, the
relevant Issuer shall not have any obligation relative to the Lenders other than
to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by the relevant Issuer under or in connection with any
Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not put such Issuer under any resulting liability to
any Lender.
(h) In the event that any Issuer makes any payment under any Letter
of Credit and the Borrower shall not have repaid such amount to such Issuer
pursuant to Subsection 2.18(l), such Issuer shall promptly notify the
Administrative Agent, which shall promptly notify each Lender of such failure,
and each Lender shall promptly and unconditionally pay to the Administrative
Agent for the account of such Issuer the amount of such Lender's Ratable Portion
of such payment in Dollars and in immediately available funds. If the
Administrative Agent so notifies such Lender prior to 11:00 A.M. (New York City
time) on any Business Day, such Lender shall make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of the
amount of such payment on such Business Day in immediately available funds. If
and to the extent such Lender shall not have so made such Lender's Ratable
Portion of the amount of such payment available to the Administrative Agent for
the account of such Issuer, such Lender agrees to pay to the Administrative
Agent for the account of such Issuer forthwith on demand such amount together
with interest thereon, for each day from such date until the date such amount is
repaid to the Administrative Agent for the account of such Issuer, at the
Federal Funds Rate. The failure of any Lender to make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of any
such payment shall not relieve any other Lender of its obligation hereunder to
make available to the Administrative Agent for the account of such Issuer its
Ratable Portion of any payment on the date such payment is to be made, but no
Lender shall be responsible for the failure of any other Lender to make
available to the Administrative Agent for the account of the Issuer such other
Lender's Ratable Portion of any such payment.
(i) Whenever any Issuer receives a payment of a Reimbursement
Obligation as to which the Administrative Agent has received for the account of
such Issuer any payment from a Lender pursuant to Section 2.17 or Subsection
2.18(h), such Issuer shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each Lender, in immediately available
funds, an amount equal to such Lender's pro rata share of such payment based on
the respective amounts the Lenders have paid in respect of such Reimbursement
Obligation.
(j) Upon the request of any Lender, the Issuer of any Letter of
Credit shall furnish to such Lender copies of any Letter of Credit Reimbursement
Agreement to which such Issuer is a party and such other documentation as may
reasonably be requested by such Lender.
(k) The obligations of the Lenders to make payments to the
Administrative Agent for the account of the Issuers with respect to Letters of
Credit shall be irrevocable and not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances (except as expressly provided in Subsection
2.18(g)), including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the Collateral Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against a beneficiary named in a Letter
of Credit, any transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), the Administrative Agent, any Issuer, any Lender
or any other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated transaction
(including, without limitation, any underlying transaction between the Borrower
and the beneficiary named in any Letter of Credit);
(iii) any draft, certificate or any other document presented
under the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Collateral
Documents; or
(v) the occurrence of any Default or Event of Default.
(l) The Borrower agrees to pay to the Issuer of any Letter of Credit
the amount of all Reimbursement Obligations owing to such Issuer under any
Letter of Credit no later than the time specified in the applicable Letter of
Credit Reimbursement Agreement, irrespective of any claim, set-off, defense or
other right which the Borrower may have at any time against such Issuer or any
other Person. If the Borrower does not pay (either from the proceeds of a
Borrowing or otherwise) any such Reimbursement Obligation when due, such
Reimbursement Obligation shall be payable on demand with interest thereon
computed from the date on which such Reimbursement Obligation arose to the date
of repayment in full of such loan, at the rate of interest applicable to past
due Revolving Credit Loans bearing interest at a rate based on the Base Rate
during such period. If any payment made by or on behalf of the Borrower and
received by such Issuer with respect to any Letter of Credit is rescinded or
must otherwise be returned by such Issuer for any reason and if such Issuer has
made payment to the Administrative Agent on account thereof pursuant to
Subsection 2.18(i), each Lender shall, upon notice by such Issuer, forthwith pay
over to such Issuer an amount equal to such Lender's pro rata share of the
amount which must be so returned by such Issuer based on the respective amounts
paid in respect thereof to the Lenders pursuant to Subsection 2.18(i).
(m) The Borrower agrees to pay the following amounts with respect to
Letters of Credit issued for its account:
(i) to the Administrative Agent for the account of the Issuer of
any Standby Letter of Credit, with respect to each Standby Letter of Credit
issued by such Issuer, an issuance fee equal to 0.125% per annum (or such lesser
percentage per annum as may be agreed to between the Borrower and such Issuer)
of the maximum amount available from time to time to be drawn under such Standby
Letter of Credit, payable quarterly in arrears on the first day of each Fiscal
Quarter and on the termination of such Standby Letter of Credit, and calculated
on the basis of a 360-day year and the actual number of days elapsed;
(ii) to the Administrative Agent for the account of the Issuer
of any Documentary Letter of Credit, with respect to each Documentary Letter of
Credit issued by such Issuer, an issuance fee equal to 0.10% per annum (or such
lesser percentage per annum as may be agreed to between the Borrower and such
Issuer) of the maximum amount available from time to time to be drawn under such
Documentary Letter of Credit, payable quarterly in arrears on the first day of
each Fiscal Quarter and on the termination of such Documentary Letter of Credit,
and calculated on the basis of a 360-day year and the actual number of days
elapsed;
(iii) to the Administrative Agent for the ratable benefit of the
Lenders, with respect to each Standby Letter of Credit, a fee equal to a
percentage, calculated as set forth on Schedule III, of the maximum amount
available from time to time to be drawn under such Standby Letter of Credit,
payable quarterly in arrears on the first day of each Fiscal Quarter and on the
termination of such Standby Letter of Credit, and calculated on the basis of a
360-day year and the actual number of days elapsed; provided that during the
continuance of an Event of Default, such fee shall be increased by 2.00% per
annum and shall be payable on demand;
(iv) to the Administrative Agent for the ratable benefit of the
Lenders, with respect to each Documentary Letter of Credit, a fee equal to a
percentage, calculated as set forth on Schedule III, of the maximum amount
available from time to time to be drawn under such Documentary Letter of Credit
(in the case of any Letter of Credit denominated in a currency other than United
States Dollars, based on the average undrawn amount thereof, using the United
States Dollar equivalent at the then current spot exchange rate, as determined
by the Administrative Agent), payable quarterly in arrears on the first day of
each Fiscal Quarter and on the termination of such Documentary Letter of Credit,
and calculated on the basis of a 360-day year and the actual number of days
elapsed provided that during the continuance of an Event of Default, such fee
shall be increased by 2.00% per annum and shall be payable on demand; and
(v) to the Issuer of any Letter of Credit, with respect to the
issuance, amendment or transfer of each Letter of Credit and each drawing made
thereunder, documentary and processing charges in accordance with such Issuer's
standard schedule for such charges in effect at the time of issuance, amendment,
transfer or drawing, as the case may be.
(n) For purposes of this Agreement (including, without limitation,
Subsection 2.8(h)), the amount of the Letter of Credit Undrawn Amount and the
Reimbursement Obligation in respect of any Letter of Credit denominated in a
currency other than United States Dollars shall be equal to the United States
Dollar equivalent thereof on any date of determination, based on the then
current spot exchange rate, as determined by the Administrative Agent.
2.19 Substitution of Lenders. In the event that (a) (i) any Lender
makes a claim under Section 2.12 or 2.14, (ii) it becomes illegal for any Lender
to continue to fund or make any Eurodollar Rate Loan pursuant to Section 2.13,
(iii) the Borrower is required to make any payment pursuant to Section 2.16 that
is attributable to any Lender, or (iv) any Lender is in default of any of its
obligations hereunder or shall take or be the subject of any action or
proceeding of a type described in Subsection 8.1(f), (b) in the case of clause
(a)(i) above, as a consequence of increased costs in respect of which such claim
is made, the effective rate of interest payable to such Lender under this
Agreement with respect to its Loans materially exceeds the effective average
annual rate of interest payable to the Majority Lenders under this Agreement and
(c) Lenders holding at least 75% of the Commitments are not subject to such
increased costs or illegality, payment or proceedings (any such Lender, an
"Affected Lender"), the Borrower may upon reasonable prior written notice (which
written notice must be given within 90 days following the occurrence of any of
the events described in clauses (a)(i), (ii), (iii) or (iv)) to the
Administrative Agent and the Affected Lender that the Borrower intends to
substitute another financial institution for such Affected Lender hereunder,
which substitute financial institution must be an Eligible Assignee and, if not
a Lender, reasonably acceptable to the Administrative Agent, provided that if
more than one Lender claims increased costs, illegality or right to payment
arising from the same act or condition and such claims are received by the
Borrower within 30 days of each other then the Borrower may substitute all, but
not (except to the extent the Borrower already substituted one of such Affected
Lenders before the Borrower's receipt of the other Affected Lenders' claim) less
than all, Lenders making such claims. In the event that the proposed substitute
financial institution is reasonably acceptable to the Administrative Agent and
the written notice was properly issued under this Section 2.19, the Affected
Lender shall sell at par plus accrued interest and the substitute financial
institution shall purchase, pursuant to an Assignment and Acceptance, the Notes
of the Affected Lender and all rights and claims of such Affected Lender under
the Loan Documents and the substitute financial institution shall assume and the
Affected Lender shall be relieved of its Commitments and all other theretofore
unperformed obligations of the Affected Lender under the Loan Documents (other
than in respect of any damages (other than exemplary or punitive damages, to the
extent permitted by applicable law) in respect of any such unperformed
obligations). Upon the effectiveness of such sale, purchase and assumption
(which, in any event shall be conditioned upon the payment in full by the
Borrower to the Affected Lender in cash of all fees, unreimbursed costs and
expenses and indemnities accrued and unpaid through such effective date), the
substitute financial institution shall become a "Lender" hereunder for all
purposes of this Agreement having a Revolving Credit Commitment in the amount of
such Affected Lender's Revolving Credit Commitment assumed by it and such
Revolving Credit Commitment of the Affected Lender shall be terminated, provided
that all indemnities under the Loan Documents shall continue in favor of such
Affected Lender.
2.20 The Swing Loans. (a) Each Swing Bank on the terms and subject
to the conditions contained in this Agreement (including Section 3.3), agrees to
make loans (each a "Swing Loan") to the Borrower from time to time on any
Business Day during the period from the date hereof until the Termination Date
as provided herein in an aggregate amount not to exceed at any time outstanding,
the lesser of (i) the difference between $20,000,000 and the sum of the
aggregate outstanding principal amount of the Swing Loans or (ii) the Available
Credit; provided, however, that at no time may the aggregate outstanding balance
of Swing Loans exceed $20,000,000; and provided, further, that each Swing Loan
must be repaid in full within 10 days of its making or upon any Revolving Credit
Borrowing hereunder and shall in any event mature no later than the Termination
Date. In no event shall any Swing Bank be obligated to make any Swing Loan or
Revolving Credit Loan if the sum of outstanding Swing Loans and Revolving Credit
Loans made or to be made by such Swing Bank would exceed its Revolving Credit
Commitment or if the Swing Loans made or to be made by such Swing Bank would
exceed its Swing Commitment. Within the limits set forth in the first sentence
of this Section 2.20, amounts prepaid pursuant to Section 2.8 may be reborrowed
under this Section 2.20. The Borrower shall notify promptly the Administrative
Agent by telecopier, in accordance with Section 10.2, upon any reduction in the
aggregate outstanding principal amount of the Swing Loans. The Available Credit
shall be reduced by the amount of any Swing Loan made and each Lender's Ratable
Portion of the Available Credit shall be reduced by its Ratable Portion of such
reduction. Conversely, the Available Credit shall be increased by the amount of
any repayment of any Swing Loan and each Lender's Ratable Portion of the
Available Credit shall be increased by its Ratable Portion of such repayment.
(b) In order to request a Swing Loan, the Borrower shall telecopy to
the Administrative Agent a duly completed request (a "Swing Loan Request"), to
be received by the Administrative Agent not later than 1:00 P.M., New York City
time, on the day of the proposed borrowing. The amount of each Swing Bank's
Swing Loan will be the proportion of the amount requested which its Swing
Commitment bears to the aggregate of the Swing Commitments of all Swing Banks on
the date of receipt of the Swing Loan Request. The Administrative Agent shall
promptly notify each Swing Bank of the details of the requested Swing Loan.
Subject to the terms of this Agreement, each Swing Bank shall make its Swing
Loan available to the Administrative Agent which will make such amounts
available to the Borrower on the date of the relevant Swing Loan Request.
(c) Immediately upon any making of a Swing Loan by a Swing Bank, such
Swing Bank shall, so long as such Swing Bank believes in good faith that the
conditions to making such Swing Loan contained in this Agreement have been
satisfied, be deemed to have sold and transferred to each Lender, and each
Lender shall be deemed irrevocably and unconditionally to have purchased and
received from such Swing Bank, without recourse or warranty, an undivided
participation in each Swing Loan, which participation shall be in a principal
amount equal to such Lender's Ratable Portion of such Swing Loan.
(d) During the continuance of an Event of Default under Section 8.1,
the Administrative Agent shall promptly notify each Lender and each Lender shall
promptly and unconditionally pay to the Administrative Agent for the account of
such Swing Bank the amount of such Lender's Ratable Portion of such Swing Loan
in Dollars and in immediately available funds. If the Administrative Agent so
notifies such Lender prior to 11:00 A.M. (New York City time) on any Business
Day, such Lender shall make available to the Administrative Agent for the
account of such Swing Bank its Ratable Portion of such Swing Loan on such
Business Day in immediately available funds. If and to the extent such Lender
shall not have so made such Lender's Ratable Portion of the amount of such
payment available to the Administrative Agent for the account of such Swing
Bank, such Lender agrees to pay to the Administrative Agent for the account of
such Swing Bank forthwith on demand such amount together with interest thereon,
for each day from such date until the date such amount is repaid to the
Administrative Agent for the account of such Swing Bank, at the Federal Funds
Rate. The failure of any Lender to make available to the Administrative Agent
for the account of such Swing Bank its Ratable Portion of any Swing Loan shall
not relieve any other Lender of its obligation hereunder to make available to
the Administrative Agent for the account of such Swing Bank its Ratable Portion
of any payment on the date such payment is to be made, but no Lender shall be
responsible for the failure of any other Lender to make available to the
Administrative Agent for the account of the Swing Bank such other Lender's
Ratable Portion of any such payment.
(e) Whenever any Swing Bank receives a payment in respect of a Swing
Loan made by it as to which the Administrative Agent has received for the
account of such Swing Bank any payment from a Lender pursuant to Subsection
2.20(d), such Swing Bank shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each Lender, in immediately available
funds, an amount equal to such Lender's pro rata share of such payment based on
the respective amounts the Lenders have paid in respect of such payment.
2.21 The Competitive Loans. (a) On the terms and subject to the
Competitive Bid Procedure set forth in this Section 2.21, the Borrower may
request Competitive Bids of the Lenders and each Lender may make available to
the Borrower one or more Competitive Loans. The amount of any Competitive
Borrowing made at any time shall not exceed the Available Credit at such time.
Each such Competitive Borrowing shall be comprised of one or more Eurodollar
Competitive Loans or Fixed Rate Loans. The Competitive Loans made by each
Lender to the Borrower shall be evidenced by a Competitive Note duly executed on
behalf of the Borrower, payable to the order of such Lender in a principal
amount equal to the total Revolving Credit Commitment.
(b) In order to request Competitive Bids, the Borrower shall hand
deliver or telecopy to the Administrative Agent a duly completed Competitive Bid
Request, to be received by the Administrative Agent (i) in the case of a
Eurodollar Competitive Borrowing, not later than 10:30 A.M., New York City time,
four Business Days before a proposed Competitive Borrowing and (ii) in the case
of a Fixed Rate Borrowing, not later than 10:30 A.M., New York City time, one
Business Day before a proposed Competitive Borrowing. Such Competitive Bid
Request shall be accompanied by a fee of $2,500 payable to the Administrative
Agent for its account. A Competitive Bid Request that does not conform
substantially to the format of Exhibit K may be rejected in the Administrative
Agent's discretion (exercised in good faith), and the Administrative Agent shall
promptly notify the Borrower of such rejection by telecopier. Each Competitive
Bid Request shall refer to this Agreement and specify (x) whether the Borrowing
then being requested is to be a Eurodollar Borrowing or a Fixed Rate Borrowing,
(y) the date of such Borrowing (which shall be a Business Day) and the aggregate
principal amount thereof which shall be in a minimum principal amount of
$1,000,000 or an integral multiple thereof and (z) the Interest Period with
respect thereto. After its receipt of a Competitive Bid Request that is not
rejected as aforesaid and receipt of payment of the $2,500 fee referred to
above, the Administrative Agent shall promptly (and in any event by 5:00 P.M.,
New York City time, on the date of such receipt if such receipt occurs by the
time specified in the first sentence of this paragraph), by sending a Notice of
Competitive Bid Request by telecopier, invite the Lenders to bid, on the terms
and subject to the conditions of this Agreement, to make Competitive Loans
pursuant to the Competitive Bid Request.
(c) Each Lender may, in its sole discretion, make one or more
Competitive Bids to the Borrower responsive to a Competitive Bid Request. Each
Competitive Bid must be in the form of Exhibit M hereto and be received by the
Administrative Agent via telecopier (i) in the case of a Eurodollar Competitive
Borrowing, not later than 10:00 A.M., New York City time, three Business Days
before a proposed Competitive Borrowing and (ii) in the case of a Fixed Rate
Borrowing, not later than 10:00 A.M., New York City time, on the day of a
proposed Competitive Borrowing. Multiple bids will be acceptable. Competitive
Bids that do not conform substantially to the format of Exhibit M may be
rejected by the Administrative Agent after conferring with, and upon the
instruction of, the Borrower, and the Administrative Agent shall notify the
Lender making such nonconforming bid of such rejection as soon as practicable.
Each Competitive Bid shall refer to this Agreement and specify (x) the principal
amount of the Competitive Loan or Loans that the Lender is willing to make to
the Borrower (which amount may exceed such Lender's Revolving Credit Commitment,
shall be in a minimum principal amount of $1,000,000 or an integral multiple
thereof and which may equal the entire principal amount of the Competitive
Borrowing requested by the Borrower), (y) the Competitive Bid Rate or Rates at
which the Lender is prepared to make the Competitive Loan or Loans and (z) the
Interest Period and the last day thereof. A Competitive Bid submitted pursuant
to this paragraph (c) shall be irrevocable (subject to the satisfaction of the
conditions to borrowing set forth in Article III).
(d) The Administrative Agent shall promptly (and in any event by
10:30 A.M., New York City time, on the date on which such Competitive Bids shall
have been made) notify the Borrower by telecopier of all the Competitive Bids
made, the Competitive Bid Rate and the principal amount of each Competitive Loan
in respect of which a Competitive Bid was made and the identity of the Lender
that made each bid. The Administrative Agent shall send a copy of all
Competitive Bids to the Borrower for its records as soon as practicable after
completion of the bidding process set forth in this Section 2.21.
(e) The Borrower may in its sole and absolute discretion, subject
only to the provisions of this paragraph (e), accept or reject any Competitive
Bid referred to in paragraph (c) above. The Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopier in the form of a
Competitive Bid Accept/Reject Letter, whether and to what extent it has decided
to accept or reject any of or all the bids referred to in paragraph (c) above,
(x) in the case of a Eurodollar Competitive Borrowing, not later than 11:00
A.M., New York City time, four Business Days before a proposed Competitive
Borrowing, and (y) in the case of a Fixed Rate Borrowing, not later than 11:00
A.M., New York City time, one Business Day before a proposed Competitive
Borrowing; provided, however, that (i) the failure by the Borrower to give such
notice shall be deemed to be a rejection of all the bids referred to in
paragraph (c) above, (ii) the Borrower shall not accept a bid made at a
particular Competitive Bid Rate if it has decided to reject a bid made at a
lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive Bids
accepted by the Borrower shall not exceed the principal amount specified in the
Competitive Bid Request, (iv) if the Borrower shall accept a bid or bids made at
a particular Competitive Bid Rate but the amount of such bid or bids shall cause
the total amount of bids to be accepted by it to exceed the amount specified in
the Competitive Bid Request, then the Borrower shall accept a portion of such
bid or bids in an amount equal to the amount specified in the Competitive Bid
Request less the amount of all other Competitive Bids accepted with respect to
such Competitive Bid Request, which acceptance, in the case of multiple bids at
such Competitive Bid Rate, shall be made pro rata in accordance with the amount
of each such bid at such Competitive Bid Rate, and (v) except pursuant to clause
(iv) above, no bid shall be accepted for a Competitive Loan unless such
Competitive Loan is in a minimum principal amount of $1,000,000. A notice given
by the Borrower pursuant to this paragraph (e) shall be irrevocable.
(f) The Administrative Agent shall promptly notify each bidding
Lender whether or not its Competitive Bid has been accepted (and if so, in what
amount and at what Competitive Bid Rate) by telecopy sent by the Administrative
Agent, and each successful bidder will thereupon become bound, subject to the
other applicable conditions hereof, to make the Competitive Loan in respect of
which its bid has been accepted; provided, however, that at no time may the
aggregate outstanding principal amount of such Competitive Loans exceed the
Available Credit. The Available Credit shall be reduced by the amount of any
Competitive Loan made and each Lender's Ratable Portion of the Available Credit
shall be reduced by its Ratable Portion of such reduction. Conversely, the
Available Credit shall be increased by the amount of any repayment of any
Competitive Loan and each Lender's Ratable Portion of the Available Credit shall
be increased by its Ratable Portion of such repayment.
(g) A Competitive Bid request shall not be made within five Business
Days after the date of any previous Competitive Bid Request, unless the Borrower
and the Administrative Agent shall mutually agree otherwise.
(h) If the Administrative Agent shall elect to submit a Competitive
Bid in its capacity as a Lender, it shall submit such bid directly to the
Borrower at least fifteen minutes earlier than the latest time at which the
other Lenders are required to submit their bids to the Administrative Agent
pursuant to paragraph (c) above.
(i) All notices required by this Section 2.21 shall be given in
accordance with Section 10.2.
ARTICLE III
CONDITIONS
3.1 Conditions Precedent to Effectiveness. The amendments to the
Existing Credit Agreement effected by this Agreement shall become effective on
the date (the "Effective Date") on which the Administrative Agent shall have
received the following, each dated the Effective Date unless otherwise
indicated, in form and substance satisfactory to the Administrative Agent and
(except for the Notes) in sufficient copies for each Lender:
(a) The new Revolving Credit Notes and new Term Loan Notes to the
order of the Lenders, respectively.
(b) The Competitive Notes to the order of the Lenders, respectively.
(c) Certified copies of (i) the resolutions of the Board of Directors
of each Loan Party approving each Loan Document to which it is a party, and (ii)
all documents evidencing other necessary corporate action and required
governmental and third party approvals, licenses and consents required to be
obtained by any Loan Party with respect to each Loan Document and the
transactions contemplated thereby.
(d) A copy of the articles or certificate of incorporation of each
Loan Party, certified as of a recent date by the Secretary of State of the state
of incorporation of such Loan Party, together with certificates of such official
attesting to the good standing of each such Loan Party, and a copy of the
certificate of incorporation and the By-Laws of each Loan Party, certified as of
the Effective Date by the Secretary or an Assistant Secretary of each such Loan
Party.
(e) A certificate of the Secretary or an Assistant Secretary of each
Loan Party certifying the names and true signatures of each officer of such Loan
Party who has been authorized to execute and deliver any Loan Document or other
document required hereunder to be executed and delivered by or on behalf of such
Loan Party.
(f) The Guaranty, duly executed by each new Guarantor, and
confirmation by each existing Guarantor that its Guaranty remains in full force
and effect and applies to all Obligations as defined in this Agreement.
(g) An amendment to the Borrower Pledge Agreement, duly executed by
the Borrower and the Administrative Agent, (i) providing for the termination of
the security interests created thereby upon the Borrower's long-term senior
unsecured indebtedness achieving Investment Grade (as defined herein) and (ii)
confirming that the security interests created thereby remain in full force and
effect.
(h) An amendment to the Borrower Security Agreement, duly executed by
the Borrower and the Administrative Agent, providing for (i) the termination of
the security interests created thereby upon the Borrower's long-term senior
unsecured indebtedness being designated as Investment Grade (as defined herein)
and (ii) confirming that the security interests created thereby remain in full
force and effect.
(i) Amendments to each Subsidiary Security Agreement, duly executed
by each existing Guarantor and the Administrative Agent, (i) providing for the
termination of the security interests created thereby upon the Borrower's long-
term senior unsecured indebtedness being designated as Investment Grade (as
defined herein) and (ii) confirming that the security interests created thereby
remain in full force and effect, together with, in the case of the Subsidiary
Security Agreement executed by Nine West Development Corporation:
(i) acknowledgment copies of proper Financing Statements (Form
UCC-1) duly filed under the Uniform Commercial Code of the jurisdictions listed
on Schedule 3.1(i) (or oral confirmation thereof);
(ii) executed Financing Statements (Form UCC-1) in appropriate
form for filing under the Uniform Commercial Code of all other jurisdictions as
may be necessary or, in the reasonable opinion of the Administrative Agent,
desirable to perfect the Lien created by such Subsidiary Security Agreement; and
(iii) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all effective financing statements
which name Nine West Development Corporation (under its present name or any
previous name during the past five years) as of the date of such Requests for
Information or Copies as debtor which are filed in the jurisdictions referred to
in said paragraphs (i) and (ii) above, together with copies of such other
financing statements (none of which shall cover the Collateral purported to be
covered by such Subsidiary Security Agreement except to the extent any such
financing statement relates to a Lien permitted under Section 7.1).
(j) A favorable opinion of (i) Simpson, Thacher & Bartlett, special
counsel to the Loan Parties and (ii) Joel K. Bedol, Esq., general counsel to the
Loan Parties, in substantially the form of Exhibit I-1 and I-2, respectively,
and as to such other matters as any Lender through the Administrative Agent may
reasonably request.
(k) A certificate, signed by a Responsible Officer of the Borrower,
stating that each of the conditions specified in Subsections 3.2(a) and (b), and
3.3(a) and (b) has been satisfied or will be satisfied on the Effective Date.
(l) Such additional documents, information and materials as the
Administrative Agent may reasonably request.
3.2 Additional Conditions Precedent to Effectiveness. The
effectiveness of this Agreement is subject to the further conditions precedent
that:
(a) All costs and accrued and invoiced unpaid fees and expenses
(including, without limitation, legal fees and expenses of the Administrative
Agent) required to be paid to the Lenders and the Administrative Agent and its
Affiliates in connection with the financing contemplated hereby on or before the
Effective Date, including, without limitation, those referred to in Sections
2.5, 2.18 and 10.4, to the extent then due and payable, shall have been paid.
(b) Nothing shall have occurred since February 3, 1996 which any
Lender, in its reasonable judgment, shall have determined has had or can
reasonably be expected to have a material adverse effect on the rights and
remedies of the Lenders taken as a whole or on the ability of the Borrower to
perform its obligations under the Loan Documents.
(c) No Lender, in its reasonable judgment, shall have determined that
there is any claim, action, suit, investigation, litigation or proceeding
(including, without limitation, shareholder or derivative litigation) pending or
threatened in any court or before any arbitrator or Governmental Authority which
would have a material adverse effect on (i) the condition (financial or
otherwise), operations, business, properties or prospects of the Borrower and
its Subsidiaries taken as a whole, or (ii) the transactions contemplated by the
Loan Documents.
(d) No Lender, in its reasonable judgment, shall have determined that
there exists any judgment, order, injunction or other restraint prohibiting or
imposing materially adverse conditions upon or the transactions contemplated by
the Loan Documents.
(e) Each Lender shall be satisfied, in its reasonable judgment, that
there has been since the date hereof, no material adverse change in respect of
(i) the corporate, capital, legal and management structure of the Borrower and
its Subsidiaries, and (ii) the nature and status of all Contractual Obligations,
and all securities, labor, tax, ERISA, employee benefit, environmental, health
and safety matters, in each case, involving or affecting the Borrower or any of
its Subsidiaries.
(f) The conditions precedent in Section 3.3 shall have been
satisfied.
3.3 Conditions Precedent to Each Loan and Letter of Credit. The
obligation of each Lender to make any Loan and of each Issuer to issue any
Letter of Credit shall be subject to the further conditions precedent that:
(a) The following statements shall be true on the Effective Date and
on the date of such Loan or issuance, before and after giving effect thereto and
to the application of the proceeds therefrom and to such issuance (and the
acceptance by the Borrower of the proceeds of such Loan or such Letter of Credit
shall constitute a representation and warranty by the Borrower that on the date
of such Loan or issuance such statements are true):
(i) The representations and warranties of the Borrower contained
in Article IV and of each Loan Party in the other Loan Documents are correct on
and as of such date as though made on and as of such date, except to the extent
such representations and warranties relate solely to an earlier date, in which
case such representations and warranties were correct on and as of such earlier
date; and
(ii) No Default or Event of Default will result from any Loan
being made or Letter of Credit being issued on such date.
(b) The making of such Loan or the issuance of such Letter of Credit
on such date does not violate any Requirement of Law and is not enjoined,
temporarily, preliminarily or permanently.
(c) The Administrative Agent shall have received such additional
documents, information and materials as any Lender or any Issuer, through the
Administrative Agent, may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Administrative Agent to enter into this
Agreement, the Borrower represents and warrants to the Lenders and the
Administrative Agent that:
4.1 Corporate Existence; Compliance with Law. The Borrower and each
of its Subsidiaries (a) is a corporation or other type of Person duly
incorporated or otherwise duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization, (b) is
duly qualified as a foreign corporation or other Person and in good standing
under the laws of each jurisdiction where such qualification is necessary,
except for failures that in the aggregate have no Material Adverse Effect, (c)
has, in the case of the Borrower and each Guarantor, all requisite corporate or
other comparable power and authority and the legal right to own, pledge,
mortgage and operate its properties, to lease the property it operates under
lease and to conduct its business as now or currently proposed to be conducted,
(d) is in compliance with its certificate of incorporation and by-laws or other
comparable governing documents, (e) is in compliance with all other applicable
Requirements of Law except for such non-compliances that in the aggregate have
no Material Adverse Effect, and (f) has all necessary licenses, permits,
consents or approvals from or by, has made all necessary filings with, and has
given all necessary notices to, each Governmental Authority having jurisdiction,
to the extent required for such ownership, operation and conduct, except for
licenses, permits, consents, approvals or filings which can be obtained or made
by the taking of ministerial action to secure the grant or transfer thereof and
such failures that in the aggregate have no Material Adverse Effect.
4.2 Corporate Power; Authorization; Enforceable Obligations. (a) The
execution, delivery and performance by each Loan Party of the Loan Documents to
which it is a party and the consummation of the transactions related to the
financing contemplated hereby:
(i) are within such Loan Party's corporate or other comparable
powers;
(ii) have been duly authorized by all necessary corporate or
other comparable action, including, without limitation, the consent of
stockholders where required;
(iii) do not and will not (A) contravene any Loan Party's
certificate of incorporation or by-laws or other comparable governing documents,
(B) violate any other applicable Requirement of Law applicable to any Loan Party
(including, without limitation, Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System), or any order or decree of any
Governmental Authority or arbitrator applicable to any Loan Party, (C) conflict
with or result in the breach of, or constitute a default under, or result in or
permit the termination or acceleration of, any Contractual Obligation of any
Loan Party, other than any provision in any of the Collateral purporting to
prohibit the assignment thereof or the grant of a security interest therein, but
none of which provisions give rise to any liability of any Secured Party and all
of which provisions, in the aggregate, have no Material Adverse Effect to the
extent effective, or (D) result in the creation or imposition of any Lien upon
any of the property of any Loan Party, other than those in favor of the Secured
Parties pursuant to the Collateral Documents and other Liens permitted hereby;
and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental Authority or any
other Person, other than those which have been obtained or made and copies of
which have been or will be delivered to the Administrative Agent pursuant to
Section 3.1, and each of which on the Effective Date will be in full force and
effect.
(b) Each Loan Document has been duly executed and delivered by each
Loan Party party thereto. Each Loan Document is the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in equity or at law).
4.3 Taxes. (a) All federal, state, local and foreign tax returns,
reports and statements (collectively, the "Tax Returns") required to be filed by
the Borrower or any of its Tax Affiliates have been filed with the appropriate
governmental agencies in all jurisdictions in which such Tax Returns are
required to be filed, all such Tax Returns are true and correct in all material
respects, and all taxes, charges and other impositions reflected therein or
otherwise due and payable have been paid, except (i) where contested in good
faith and by appropriate proceedings (unless the failure to contest has no
Material Adverse Effect), (ii) if adequate reserves therefor have been
established on the books of the Borrower or such Subsidiary in conformity with
GAAP, and (iii) where all such non-payments and non-filings in the aggregate
have no Material Adverse Effect.
(b) Proper and accurate amounts have been withheld by the Borrower
and each of its Tax Affiliates from their respective employees for all periods
in full and complete compliance with the tax, social security and unemployment
withholding provisions of applicable federal, state, local and foreign law and
such withholdings have been timely paid to the respective Governmental
Authorities, except where the failures to so withhold or pay in the aggregate
have no Material Adverse Effect.
(c) Set forth on Schedule 4.3(c) hereto is a complete and accurate
list, as of the date hereof, of each taxable year of the Borrower and each of
its Tax Affiliates for which federal income Tax Returns have been filed and for
which the expiration of the applicable statute of limitations for assessment or
collection has not occurred by reason of extension or otherwise (an "Open
Year").
(d) The aggregate unpaid amount, as of the date hereof, of
adjustments to the federal income tax liability of the Borrower and each of its
Tax Affiliates proposed to the Borrower or its Tax Affiliates by the IRS with
respect to Open Years does not exceed $500,000. No issues have been raised by
the Internal Revenue Service in respect of Open Years that, in the aggregate,
have a Material Adverse Effect.
(e) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of the Borrower and
its Tax Affiliates proposed to the Borrower or its Tax Affiliates by all state,
local and foreign taxing authorities (other than amounts arising from
adjustments to federal income Tax Returns) does not exceed $500,000. No issues
have been raised by such taxing authorities that, in the aggregate, have a
Material Adverse Effect.
4.4 Full Disclosure. (a) The written statements prepared or
furnished by or on behalf of the Borrower or any of its Affiliates in connection
with any of the Loan Documents in respect of the Borrower or any of its
Subsidiaries do not, taken as a whole, contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
contained therein not misleading as of the respective dates when furnished and
in light of the circumstances existing when made.
(b) The consolidated statements of financial condition and
consolidated statements of operations of the Borrower and its Subsidiaries
previously delivered to each of the Lenders are the unaudited consolidated
financial statements of the Borrower and its Subsidiaries, as of the dates and
for the periods specified therein.
(c) As of the date hereof, all facts known to the Borrower which are
material to an understanding of the financial condition, business, properties
and prospects of the Borrower and its Subsidiaries taken as one enterprise, have
been disclosed to the Lenders.
4.5 Financial Matters. (a) The consolidated balance sheet of the
Borrower and its Subsidiaries as at February 3, 1996, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, certified by
Deloitte & Touche LLP, copies of which have been furnished to each Lender,
fairly present the consolidated financial condition of the Borrower and its
Subsidiaries as at such dates and the consolidated results of the operations of
the Borrower and its Subsidiaries for the period ended on such dates, all in
conformity with GAAP.
(b) Since February 3, 1996, there has been no Material Adverse Change
and there have been no events or developments that in the aggregate have had a
Material Adverse Effect.
(c) Neither the Borrower nor any of its Subsidiaries had at February
3, 1996 any material obligation, contingent liability or liability for taxes,
long-term leases or unusual forward or long-term commitment which is not
reflected in the balance sheet at such date referred to in subsection (a) above
or in the notes thereto.
(d) The Borrower is, and on a consolidated basis the Borrower and its
Subsidiaries are, Solvent.
4.6 Litigation. There are no pending or, to the knowledge of the
Borrower, threatened actions, investigations or proceedings affecting the
Borrower, or any of its Subsidiaries before any court, Governmental Authority or
arbitrator, other than those that in the aggregate, if adversely determined,
have no Material Adverse Effect. The performance of any action by any Loan
Party required or contemplated by any of the Loan Documents is not restrained or
enjoined (either temporarily, preliminarily or permanently), and no material
adverse condition has been imposed by any Governmental Authority or arbitrator
upon either of the foregoing transactions.
4.7 Margin Regulations. The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System), and no proceeds of any Borrowing will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock.
4.8 Subsidiaries. (a) Set forth on Schedule 4.8 hereto is a complete
and accurate list showing all Subsidiaries of the Borrower as of the date hereof
and, as to each such Subsidiary, the jurisdiction of its incorporation, the
number of shares of each class of Stock authorized, the number outstanding on
the date hereof and the percentage of the outstanding shares of each such class
owned (directly or indirectly) by the Borrower. Except as set forth on Schedule
4.8 hereto, as of the Effective Date, no Stock of any Subsidiary of the Borrower
is subject to any outstanding option, warrant, right of conversion or purchase
or any similar right in favor of a Person other than the Borrower or any of its
Subsidiaries. All of the outstanding capital Stock of each Subsidiary of the
Borrower has been validly issued, is fully paid and non-assessable and, except
as set forth on Schedule 4.8 hereto, is owned as of the Effective Date by the
Borrower or a Subsidiary of the Borrower, free and clear of all Liens (other
than the Liens in favor of the Secured Parties created pursuant to the
Collateral Documents and other Liens permitted by Section 7.1).
(b) Pappagallo is not engaged in any business other than the direct
ownership of, and all or substantially all of its assets consist of, 100% of the
issued and outstanding Stock of Compania de Calzados de Exportacion, L.L., a
Spain corporation.
4.9 ERISA. (a) Each Qualified Plan is qualified under Section 401 of
the Code, and the trusts created thereunder are exempt from tax under the
provisions of Section 501 of the Code, except where all such failures to be
qualified or exempt, as the case may be, in the aggregate, have no Material
Adverse Effect.
(b) None of the Borrower, any of its Subsidiaries or any ERISA
Affiliate, with respect to any Qualified Plan, has failed to make any
contribution or pay any amount due as required by Section 412 of the Code or
Section 302 of ERISA.
(c) There has been no, nor is there reasonably expected to occur, any
ERISA Event or event described in Section 4068 of ERISA with respect to any
Title IV Plan which has a Material Adverse Effect.
(d) There are no pending or, to the knowledge of the Borrower,
threatened claims, actions or lawsuits (other than claims for benefits in the
normal course), asserted or instituted against (i) any Qualified Plan or
Multiemployer Plan, or its assets, (ii) any fiduciary with respect to any
Qualified Plan or Multiemployer Plan, or (iii) the Borrower, any of its
Subsidiaries or any ERISA Affiliate with respect to any Qualified Plan or
Multiemployer Plan, other than those that in the aggregate, if adversely
determined, have no Material Adverse Effect.
(e) None of the Borrower, any of the Borrower's Subsidiaries or any
ERISA Affiliate has incurred or has any reasonable likelihood of incurring any
Withdrawal Liability under Section 4201 of ERISA as a result of a complete or
partial withdrawal from a Multiemployer Plan (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in any such
liability) in excess of $5,000,000 or that have a Material Adverse Effect.
(f) Neither the Borrower nor any of its Subsidiaries has engaged in a
prohibited transaction, as defined in Section 4975 of the Code or Section 406 of
ERISA, in connection with any Qualified Plan or Multiemployer Plan, which would
subject or has any reasonable likelihood of subjecting the Borrower or any of
its Subsidiaries (after giving effect to any exemption) to a tax on prohibited
transactions imposed by Section 4975 of the Code or any other liability, in
either case, in excess of $5,000,000 or which in the aggregate have a Material
Adverse Effect.
4.10 Liens. There are no Liens of any nature whatsoever on any
properties of the Borrower or any of its Subsidiaries other than those permitted
by Section 7.1. The Liens granted by the Loan Parties to the Administrative
Agent pursuant to the Collateral Documents are (subject only to the due filing
with the appropriate Governmental Authorities of the financing statements and
other documents delivered pursuant to Subsection 3.1(i)) fully perfected first
priority Liens in and to the Collateral, other than (a) any Collateral covered
by any Collateral Document (other than the Mortgages) that is not subject to
Article 8 or 9 of the Uniform Commercial Code as in effect in any applicable
jurisdiction, and (b) any items of Collateral, if any, not required to be
delivered to the Administrative Agent on or prior to the Effective Date pursuant
to the Collateral Documents to the extent the possession thereof by a secured
party is required under the Uniform Commercial Code of any applicable
jurisdiction in order to perfect a Lien thereon.
4.11 No Burdensome Restrictions; No Defaults. (a) None of the
Borrower or any of its Subsidiaries is a party to any Contractual Obligation the
compliance with which has a Material Adverse Effect or the performance of which
by any thereof, either unconditionally or upon the happening of an event, will
result in the creation of a Lien (other than a Lien granted pursuant to a Loan
Document or otherwise permitted hereby) on the property or assets of any
thereof.
(b) Neither the Borrower nor any of its Subsidiaries is in default
under or with respect to any Contractual Obligation owed by it and, to the
knowledge of the Borrower, no other party is in default under or with respect to
any Contractual Obligation owed to the Borrower or any of its Subsidiaries,
other than, in either such case, those defaults which in the aggregate have no
Material Adverse Effect.
(c) No Default or Event of Default has occurred and is continuing.
(d) There is no Requirement of Law applicable to the Borrower or any
of its Subsidiaries, the compliance with which by the Borrower or any of its
Subsidiaries has a Material Adverse Effect.
(e) No Guarantor is subject to any Contractual Obligation restricting
or limiting its ability to declare or make any dividend payment or other
distribution on account of any shares of any class of its Stock or its ability
to purchase, redeem, or otherwise acquire for value or make any payment in
respect of any such shares or any shareholder rights.
(f) Neither the Borrower nor any Guarantor has entered into or become
subject to, directly or indirectly, including, without limitation, as a non-
party Subsidiary of a party to any agreement, any agreement (other than a Loan
Document) prohibiting or restricting in any manner (including, without
limitation, by way of covenant, representation or event of default) (i) the
incurrence, creation or assumption of any Indebtedness or of any Lien upon any
of its property or the property of any Guarantor which Indebtedness or Liens are
permitted by or arise pursuant to or in connection with any Loan Document,
except customary restrictions in a Capitalized Lease or other purchase money
financing agreement permitted hereunder and relating solely to the asset
financed thereunder and customary restrictions contained in any partnership or
shareholder agreement or similar agreement or instrument in respect of any Stock
or Stock Equivalents of any Foreign Venture or North American Venture owned by
the Borrower or any Guarantor, (ii) the sale, disposition or pledge of any of
its property or the property of any Guarantor, except customary restrictions in
a Capitalized Lease or other purchase money financing agreement permitted
hereunder and relating solely to the asset financed thereunder and customary
restrictions contained in any partnership or shareholder agreement or similar
agreement or instrument in respect of any Stock or Stock Equivalents of any
Foreign Venture or North American Venture owned by the Borrower or any
Guarantor, (iii) the making of any Capital Expenditure by the Borrower or any
Guarantor permitted hereby, or (iv) any amendment, supplement or modification
to, or waiver under, this Agreement or any other Loan Document.
4.12 No Other Ventures. Neither the Borrower nor any of its
Subsidiaries is engaged in any partnership or other joint venture with any other
Person other than those permitted by Section 7.6.
4.13 Investment Company Act; Public Utility Holding Company Act. (a)
Neither the Borrower nor any of its Subsidiaries is an "investment company," or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended. The making
of the Loans by the Lenders, the application of the proceeds and repayment
thereof by the Borrower and the consummation of the transactions contemplated by
the Loan Documents will not result in a violation by the Borrower or any of its
Subsidiaries of any provision of such Act or any rule, regulation or order
issued by the Securities and Exchange Commission thereunder.
(b) Neither the Borrower nor any of its Subsidiaries is a "holding
company" or an "affiliate" of a "holding company" or a "subsidiary company," of
a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
4.14 Insurance. All policies of insurance of any kind or nature
owned by or issued to the Borrower or any of its Subsidiaries, including,
without limitation, policies of life, fire, theft, product liability, public
liability, property damage, other casualty, employee fidelity, workers'
compensation and employee health and welfare insurance, are in full force and
effect and are of a nature and provide such coverage as is sufficient in the
reasonable judgment of the Borrower and as is customarily carried by companies
of the size and character of such Person.
4.15 Labor Matters. (a) There are no strikes, work stoppages,
slowdowns or lockouts pending or threatened against or involving the Borrower or
any of its Subsidiaries, other than those which in the aggregate have no
Material Adverse Effect.
(b) There are no arbitrations or grievances pending against or
involving the Borrower or any of its Subsidiaries, nor are there any
arbitrations or grievances threatened involving the Borrower or any of its
Subsidiaries, other than those which in the aggregate, if resolved adversely to
the Borrower or such Subsidiary, have no Material Adverse Effect.
4.16 Force Majeure. Neither the business nor the properties of the
Borrower or any of its Subsidiaries are currently suffering from the effects of
any fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), other than those which in the
aggregate have no Material Adverse Effect.
4.17 Use of Proceeds. This Agreement amends and restates the terms
of indebtedness outstanding under the Existing Credit Agreement and the proceeds
of the Loans and the Letters of Credit are being used by the Borrower solely as
follows: (i) to refinance such existing Indebtedness, (ii) for the payment of
related transaction costs, fees and expenses, and (iii) for general working
capital and general corporate purposes.
4.18 Environmental Protection. (a) The operations of the Borrower
and each of its Subsidiaries or tenants comply with all Environmental Laws other
than such non-compliances as, in the aggregate, have no Material Adverse Effect.
(b) The Borrower and each of its Subsidiaries has obtained all
environmental, health and safety Permits necessary for its operations, and all
such Permits are in good standing, and the Borrower and each of its Subsidiaries
is in compliance with the terms and conditions of such Permits other than such
failures and non-compliances as, in the aggregate, have no Material Adverse
Effect.
(c) Neither the Borrower nor any of its Subsidiaries or any of their
respective currently or previously owned or leased property or operations is
subject to any threatened or outstanding order from or agreement with any
Governmental Authority or other Person or is subject to any judicial or docketed
administrative proceeding respecting (i) Environmental Laws, (ii) Remedial
Action or (iii) any Environmental Liabilities and Costs arising from a Release
or threatened Release, other than, in any such case, those which in the
aggregate have no Material Adverse Effect.
(d) There are no conditions or circumstances associated with the
currently or previously owned or leased properties or operations of the Borrower
or any of its Subsidiaries which may give rise to any Environmental Liabilities
and Costs other than those which in the aggregate have no Material Adverse
Effect.
(e) Neither the Borrower nor any of its Subsidiaries is a treatment,
storage or disposal facility requiring a permit under the Resource Conservation
and Recovery Act, 42 U.S.C. #6901 et seq., the regulations thereunder or any
state analog. The Borrower and each of its Subsidiaries is in compliance with
all applicable financial responsibility requirements of all Environmental Laws,
including, without limitation, those contained in 40 C.F.R., parts 264 and 265,
subpart H, and any state equivalents.
(f) Except as specifically disclosed in the Environmental Reports or
disclosed to the Administrative Agent prior to the date hereof, there is not on
or in the property owned, leased or operated by the Borrower or any of its
Subsidiaries (i) any underground storage tanks or surface impoundments, (ii) any
exposed friable asbestos-containing materials or (iii) any polychlorinated
biphenyls ("PCBs") used in electrical or other equipment, other than, in any
such case, those which in the aggregate have no Material Adverse Effect.
(g) Neither the Borrower nor any of its Subsidiaries has filed or
failed to file any notice required under any applicable Environmental Law
reporting a Release (other than notices of Releases occurring in compliance with
a Permit issued pursuant to any Environmental Law).
4.19 Intellectual Property. The Borrower and Nine West Development
Corporation are the legal and beneficial owners of all of the "Intellectual
Property" and "Licenses" (as such terms are defined in the Borrower Security
Agreement and the Subsidiary Security Agreement executed by Nine West
Development Corporation), in which they purport to grant collateral assignments
and security interests, having good title thereto, except where the failure of
any of the foregoing to be true does not have in the aggregate a Material
Adverse Effect. All such Intellectual Property and Licenses owned by the
Borrower and Nine West Development Corporation are free and clear of any and all
Liens, except (a) Liens granted pursuant to the Collateral Documents and (b)
Liens permitted by Section 7.1. The Intellectual Property is subsisting and has
not been adjudged invalid or unenforceable, in whole or in part, except for such
invalidities and unenforceabilities which in the aggregate have no Material
Adverse Effect. To the best of the Borrower's knowledge, there is no
infringement by any third party of the Intellectual Property or the rights
arising thereunder except for such infringements and claims which in the
aggregate have no Material Adverse Effect. No claim has been made that the use
of any of the Intellectual Property infringes the rights of any third party and,
to the best of the Borrower's knowledge, neither the operation of the Borrower's
business and the businesses of its Subsidiaries nor the use of any of the
Intellectual Property infringes any intellectual property rights owned or
possessed by any third party except, in any such case, for such infringements
which in the aggregate have no Material Adverse Effect. Neither the Borrower
nor Nine West Development Corporation has assigned, transferred, conveyed or
otherwise encumbered its right, title or interest in the Intellectual Property,
other than pursuant to the Licenses, the Collateral Documents or as otherwise
permitted hereby.
4.20 Title. (a) The Borrower and its Subsidiaries own good and
indefeasible title to, or valid leasehold interests in, all real and personal
properties and assets purported to be owned by the Borrower or any of its
Subsidiaries including, without limitation, those reflected on the Borrower's
most recent financial statements delivered pursuant to this Agreement and not
disposed of as permitted hereunder, except for failures which in the aggregate
have no Material Adverse Effect, and none of such properties and assets, is
subject to any Lien, except Liens granted to the Secured Parties pursuant to the
Loan Documents or otherwise permitted hereunder. The Borrower and its
Subsidiaries have received all deeds, assignments, waivers, consents, non-
disturbance and recognition or similar agreements, bills of sale and other
documents, and have duly effected all recordings, filings and other actions
necessary to establish, protect and perfect the Borrower's and its Subsidiaries'
right, title and interest in and to all such property, except for failures which
in the aggregate have no Material Adverse Effect.
(b) All Permits required to have been issued or appropriate to enable
all real property owned or leased by the Borrower or any of its Subsidiaries to
be lawfully occupied and used for all of the purposes for which they are
currently occupied and used have been lawfully issued and are in full force and
effect, except as in the aggregate, have no Material Adverse Effect.
4.21 Certain Indebtedness. Schedule 4.22 separately identifies all
Indebtedness (other than trade payables, the Obligations and Contingent
Obligations set forth on Schedule 7.11) of the Borrower and each Guarantor which
is outstanding on the date hereof and is to remain outstanding after the
Effective Date, and (a) is for borrowed money, (b) was incurred outside of the
ordinary course of the business or not in a manner and extent consistent with
past practice, or (c) is material to the financial condition, business,
operations or prospects of the Borrower or such Guarantor (or will be so
material to the financial condition, business, operations or prospects of the
Borrower or such Guarantor), $1,000,000 being hereby deemed material for
purposes of this Section 4.22.
4.22 Restricted Payments. Since February 3, 1996, except as
permitted by Section 7.4 or 7.5, the Borrower has not (a) declared or made any
dividend payment or other distribution of assets, properties, cash, rights,
obligations or securities on account of any shares of any class of its Stock, or
(b) purchased, redeemed, or otherwise acquired for value or made any payment in
respect of any of its Stock or Stock Equivalents.
ARTICLE V
FINANCIAL COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent that
unless (a) the Majority Lenders otherwise consent in writing, or (b) (i) the
Commitments have been terminated, (ii) all Loans, Other Obligations, accrued or
matured interest and fees, and other then accrued and payable monetary
Obligations have been paid in full, and (iii) all then outstanding Letters of
Credit have been terminated, paid in full or fully cash collateralized to the
reasonable satisfaction of the Administrative Agent:
5.1 Maximum Leverage Ratio. The Borrower shall maintain at the end
of each Fiscal Quarter set forth below, a ratio of (a) Indebtedness for Borrowed
Money (determined on a consolidated basis for the Borrower and its Subsidiaries
as of the date of determination) to (b) EBITDA for the four Fiscal Quarters
ending on the date of determination, not in excess of the ratio set forth below,
with (i) EBITDA for the Fiscal Quarters ending prior to the third Fiscal Quarter
of the Borrower's 1995 Fiscal Year being determined on the basis of giving pro
forma effect to the Acquisition, including but not limited to, reserves for
discontinued brands and restructuring costs that were incurred by the Footwear
Business during the period prior to the Acquisition, and which would have been
included in the computation of goodwill had the Acquisition occurred at the
beginning of such period and, without duplicating any of the foregoing, (ii)
EBITDA for any such four Fiscal Quarters which include the fourth Fiscal Quarter
of the Borrower's 1995 Fiscal Year being computed by adding back to EBITDA up to
$60 million, on a pre-tax basis, of integration and restructuring charges
related to the Acquisition, as indicated in the Borrower's audited financial
statements for the 1995 Fiscal Year (to the extent such charges reduced EBITDA
for the fourth Fiscal Quarter of the Borrower's 1995 Fiscal Year): :
For the Fiscal Quarter Ending on
or Closest to Maximum Ratio
------------- -------------
July 31, 1996 3.75:1.00
October 31, 1996 3.75:1.00
January 31, 1997 3.75:1.00
April 30, 1997 3.75:1.00
July 31, 1997 3.00:1.00
October 31, 1997 3.00:1.00
January 31, 1997 3.00:1.00
April 30, 1998 3.00:1.00
July 31, 1998 2.50:1.00
October 31, 1998 2.50:1.00
January 31, 1998 2.50:1.00
April 30, 1999 2.50:1.00
July 31, 1999 2.50:1.00
October 31, 1999 2.50:1.00
January 31, 1999 2.50:1.00
April 30, 2000
and thereafter 2.00:1.00
5.2 Fixed Charge Coverage Ratio. The Borrower shall maintain at the
end of each Fiscal Quarter a ratio of (a) the sum of (i) EBITDA plus (ii) cash
rentals payable by the Borrower and its Subsidiaries for the applicable period
under leases of real, personal or mixed property to (b) Fixed Charges, in each
case determined on the basis of the four Fiscal Quarters ending on the date of
determination, not less than 1.00:1.00, with (i) EBITDA for the Fiscal Quarters
ending prior to the third Fiscal Quarter of the Borrower's 1995 Fiscal Year
being determined on the basis of giving pro forma effect to the Acquisition,
including but not limited to, reserves for discontinued brands and restructuring
costs that were incurred by the Footwear Business during the period prior to the
Acquisition, and which would have been included in the computation of goodwill
had the Acquisition occurred at the beginning of such period and, without
duplicating any of the foregoing, (ii) EBITDA for any such four Fiscal Quarters
which include the fourth Fiscal Quarter of the Borrower's 1995 Fiscal Year being
computed by adding back to EBITDA up to $60 million, on a pre-tax basis, of
integration and restructuring charges related to the Acquisition, as indicated
in the Borrower's audited financial statements for the 1995 Fiscal Year (to the
extent such charges reduced EBITDA for the fourth Fiscal Quarter of the
Borrower's 1995 Fiscal Year).
5.3 Maintenance of Net Worth. The Borrower shall at all times
maintain a Net Worth of not less than 75% of its Net Worth at December 31, 1994
plus 50% of the Net Income for each Fiscal Quarter ending thereafter without
deduction for any Net Loss from any such Fiscal Quarter.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent that
unless (a) the Majority Lenders otherwise consent in writing or (b) (i) the
Commitments have been terminated, (ii) all Loans, Other Obligations, accrued or
matured interest and fees, and other then accrued and payable monetary
Obligations have been paid in full, and (iii) all then outstanding Letters of
Credit have been terminated, paid in full or fully cash collateralized to the
reasonable satisfaction of the Administrative Agent:
6.1 Compliance with Laws, Etc. The Borrower shall, and shall cause
each of its Subsidiaries to, comply in all material respects with all applicable
Requirements of Law and Permits; provided, however, that the Borrower shall not
be deemed in default of this Section 6.1 if all such non-compliances in the
aggregate have no Material Adverse Effect.
6.2 Payment of Taxes, Etc. The Borrower shall pay and discharge, and
shall cause each of its Subsidiaries to pay and discharge, before the same shall
become delinquent, all lawful governmental claims, taxes, assessments, charges
and levies, except (a) where contested in good faith, by proper proceedings
(unless the failure to contest has no Material Adverse Effect), (b) if adequate
reserves therefor have been established on the books of the Borrower or the
appropriate Subsidiary in conformity with GAAP, and (c) if all such non-payments
in the aggregate have no Material Adverse Effect.
6.3 Maintenance of Insurance. The Borrower shall maintain, and shall
cause to be maintained for each of its Subsidiaries, insurance with responsible
and reputable insurance companies or associations in such amounts and covering
such risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower or
such Subsidiary operates and such other insurance as may be reasonably requested
by the Majority Lenders, and, in any event, all insurance required by any
Collateral Document. All such general liability insurance shall name the
Secured Parties as additional insureds and all such property insurance shall
name the Administrative Agent as loss payee in respect of any incurrence
involving the payment of insurance proceeds equal to or greater than $2,000,000
in respect of the Collateral. Notwithstanding anything to the contrary
contained in any Collateral Document, as long as an Event of Default is not
continuing (including, without limitation, an Event of Default occurring by
reason of the Borrower's failure to comply with the provisions of Subsection
2.8(d)), the Administrative Agent shall promptly after its receipt thereof turn
over to the Borrower or the applicable Guarantor any proceeds of any such
property insurance paid to the Administrative Agent. The Borrower will furnish
to the Administrative Agent from time to time such information as may be
reasonably requested by any Lender through the Administrative Agent as to such
insurance.
6.4 Preservation of Corporate Existence, Etc. The Borrower shall
preserve and maintain, and shall cause each of its Subsidiaries to preserve and
maintain, its corporate (or other comparable) existence, rights (charter and
statutory) and franchises, except (a) with respect to any Guarantor, as
permitted by Section 7.5, and (b) the dissolution of Texas Boot and (c) to the
extent the Borrower or any such Subsidiary determines in its reasonable judgment
that it is not necessary or desirable to preserve or maintain any such franchise
or right (or in the case of a North American Venture or a Foreign Venture, its
existence).
6.5 Access. The Borrower shall, from time to time at any reasonable
time during normal business hours, permit the Administrative Agent or any agents
or representatives thereof within five Business Days after a written request
therefor (except that during a continuance of a Default or Event of Default, no
such prior request shall be necessary), to (a) examine and make copies of and
abstracts from the records and books of account of the Borrower and each of its
Subsidiaries, (b) visit the properties of the Borrower and each of its
Subsidiaries, (c) discuss the affairs, finances and accounts of the Borrower and
each of its Subsidiaries with any of their respective officers or directors, and
(d) as long as a Responsible Officer of the Borrower has been notified at least
one Business Day in advance in respect thereof and officers of the Borrower are
permitted to participate, communicate directly with the Borrower's independent
certified public accountants, in each of cases (a), (b) and (c) in a manner that
does not interfere in any material respect with the conduct of the Borrower's or
any such Subsidiary's business. The Borrower shall authorize its independent
certified public accountants to disclose to the Administrative Agent or any
Lender any and all financial statements and other information of any kind as the
Administrative Agent or any Lender (through the Administrative Agent) reasonably
requests from the Borrower and which such accountants have with respect to the
business, financial condition, results of operations or other affairs of the
Borrower or any of its Subsidiaries.
6.6 Keeping of Books. The Borrower shall keep, and shall cause each
of its Subsidiaries to keep, proper books of record and account, in which full
and correct entries shall be made of all financial transactions and the assets
and business of the Borrower and each such Subsidiary.
6.7 Maintenance of Properties, Etc. The Borrower shall maintain and
preserve, and shall cause each Guarantor to maintain and preserve, (a) all of
its properties which are necessary in the conduct of its business in good
working order and condition, and (b) all rights, permits, licenses, approvals
and privileges (including, without limitation, all Permits) which are necessary
in the conduct of its business; provided, however, that the Borrower shall not
be deemed in default of this Section 6.7 if all such failures in the aggregate
have no and would have no Material Adverse Effect.
6.8 Performance and Compliance with Other Covenants. The Borrower
shall perform and comply with, and shall cause each of its Subsidiaries to
perform and comply with each Contractual Obligation to which it or any of its
Subsidiaries is a party; provided, however, that the Borrower shall not be
deemed in default of this Section 6.8 if all such failures in the aggregate have
no Material Adverse Effect.
6.9 Application of Proceeds. The Borrower shall use the entire
amount of the proceeds of the Loans as provided in Section 4.17.
6.10 Financial Statements. The Borrower shall furnish to the
Administrative Agent for the benefit of the Lenders (with sufficient copies for
each of the Lenders):
(a) as soon as available and in any event within 50 days after the
end of each Fiscal Quarter of each Fiscal Year, unaudited consolidated balance
sheets and statements of retained earnings and cash flow of the Borrower and its
Subsidiaries as of the end of such Fiscal Quarter and consolidated and
consolidating (by wholesale and retail segments) statements of income of the
Borrower and its Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter, all
prepared in conformity with GAAP and certified by the chief financial officer of
the Borrower as fairly presenting the financial condition and results of
operations of the Borrower and its Subsidiaries at such date and for such
period, subject to normal year-end adjustments, together with (i) a certificate
of said officer stating that no Default or Event of Default has occurred and is
continuing or, if a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which the
Borrower proposes to take with respect thereto, (ii) a schedule in form
satisfactory to the Administrative Agent of the computations used by the
Borrower in determining compliance with all financial covenants contained
herein, and (iii) a written discussion and analysis by the management of the
Borrower of the unaudited consolidated financial statements furnished in respect
of such Fiscal Quarter;
(b) as soon as available and in any event within 95 days after the
end of each Fiscal Year, consolidated balance sheets and statements of retained
earnings and cash flow of the Borrower and its Subsidiaries as of the end of
such year and consolidated and consolidating (by wholesale and retail segments)
statements of income of the Borrower and its Subsidiaries for such Fiscal Year,
all prepared in conformity with GAAP and certified, in the case of such
consolidated financial statements, without qualification as to the scope of the
audit or as to the Borrower being a going concern by Deloitte & Touche LLP, any
other "Big Six" accounting firm or any other independent public accountants
reasonably acceptable to the Majority Lenders, together with (i) a report by
such accounting firm expressing negative assurance, based on its audit of the
consolidated financial statements of the Borrower, as to compliance with the
financial covenants contained in Article V and other covenants in this Agreement
relating to financial or accounting matters, (ii) a schedule in form
satisfactory to the Administrative Agent of the computations prepared by the
Borrower and used in determining, as of the end of such Fiscal Year, the
Borrower's compliance with all financial covenants contained herein, and (iii) a
written discussion and analysis by the management of the Borrower of the
consolidated financial statements furnished in respect of such Fiscal Year; and
(c) promptly after the same are received by the Borrower, a copy of
each management letter provided to the Borrower by its independent certified
public accountants which refers in whole or in part to any material weakness in
the internal control structure of the Borrower and its Subsidiaries on a
consolidated basis.
6.11 Reporting Requirements. The Borrower shall furnish to the
Administrative Agent for the benefit of the Lenders (with sufficient copies for
each of the Lenders):
(a) to the extent practicable prior to any Asset Sale anticipated to
generate in excess of $5,000,000 in Asset Sales Proceeds or any other
transaction anticipated to generate in excess of $5,000,000 of Debt Issuance
Proceeds or Equity Issuance Proceeds, a notice (i) describing the assets being
sold or the nature and material terms and conditions of such transaction, and
(ii) stating the estimated Asset Sales Proceeds, Debt Issuance Proceeds or
Equity Issuance Proceeds anticipated to be received by the Borrower or any of
its Subsidiaries;
(b) as soon as available and in any event within the first 30 days of
each Fiscal Year, an annual budget, business and financial plan of the Borrower
and its Subsidiaries for such Fiscal Year, displaying on a quarterly basis
anticipated balance sheets, forecasted revenues, EBITDA, net income, Capital
Expenditures, cash flow, and working capital requirements all on a consolidated
(in the case of anticipated balance sheets, statements of retained earnings and
cash flow) and consolidated and consolidating (by wholesale and retail segments)
basis (in all other cases).
(c) (i) promptly and in any event within 30 days after the Borrower,
any of its Subsidiaries or any ERISA Affiliate knows or has reason to know that
any ERISA Event has occurred, and (ii) promptly and in any event within 10 days
after the Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has
reason to know that a request for a minimum funding waiver under Section 412 of
the Code has been filed with respect to any Qualified Plan, a written statement
of the chief financial officer or other appropriate officer of the Borrower
describing such ERISA Event or waiver request and the action, if any, which the
Borrower, its Subsidiaries and ERISA Affiliates propose to take with respect
thereto and a copy of any notice filed with the PBGC or the IRS pertaining
thereto;
(d) promptly and in any event within 10 days after receipt thereof, a
copy of any correspondence the Borrower, any of its Subsidiaries or any ERISA
Affiliate receives from the plan sponsor (as defined by Section 4001 (a)(10) of
ERISA) of any Multiemployer Plan concerning potential withdrawal liability of
the Borrower, its Subsidiaries and ERISA Affiliates in excess of $5,000,000 in
the aggregate, or notice of any reorganization with respect to any Multiemployer
Plan, together with a written statement of the chief financial officer or other
appropriate officer of the Borrower of the action which the Borrower, its
Subsidiaries and ERISA Affiliates propose to take with respect thereto;
(e) promptly and in any event within 30 days after the adoption
thereof, notice of (i) any amendment to a Title IV Plan which results in an
increase in benefits in excess of $5,000,000 or the adoption of any new Title IV
Plan that would provide benefits in excess of $5,000,000, and (ii) any amendment
to a, or adoption of a new, welfare benefit plan, which results in new or
increased benefits for retirees, their spouses or their beneficiaries in excess
of $5,000,000 in the aggregate;
(f) promptly and in any event within 30 days after notice or
knowledge thereof, notice that the Borrower or any of its Subsidiaries has
become subject to the tax on prohibited transactions imposed by Section 4975 of
the Code, together with a copy of Form 5330;
(g) promptly and in any event within 10 days after receipt thereof by
the Borrower, any of its Subsidiaries or any ERISA Affiliate, the Borrower shall
furnish to the Administrative Agent a copy of each notice from the PBGC,
received by the Borrower, any of its Subsidiaries or any ERISA Affiliate of the
PBGC's intention to terminate any Pension Plan or to have a trustee appointed to
administer any Pension Plan;
(h) promptly and in any event within 10 days after the date that the
Borrower, any of its Subsidiaries or any ERISA Affiliate files a notice of
intent to terminate any Plan under a distress termination within the meaning of
Section 4041(c) of ERISA, the Borrower shall furnish to the Administrative Agent
a copy of each such notice;
(i) promptly and in any event within 10 days after the date that the
Borrower, any of its Subsidiaries or any ERISA Affiliate files a notice of
intent to terminate any Title IV Plan, if such termination would require
additional contributions in excess of $5,000,000 in order to be considered a
standard termination within the meaning of Section 4041(b) of ERISA, the
Borrower shall furnish to the Administrative Agent a copy of each notice;
(j) promptly after the commencement thereof, notice of all actions,
suits and proceedings before any domestic or foreign Governmental Authority or
arbitrator, affecting the Borrower or any of its Subsidiaries, except those
which, if adversely determined, would have no Material Adverse Effect;
(k) promptly and in any event within two Business Days after the
Borrower becomes aware of the existence of (i) any Default or Event of Default,
or (ii) any Material Adverse Change or any event, development or other
circumstance which has a reasonable likelihood of causing or resulting in a
Material Adverse Change, notice (which may be telephonic) in reasonable detail
specifying the nature of the Default, Event of Default, development or
circumstance, including, without limitation, the anticipated effect thereof,
which notice if telephonic shall be promptly confirmed in writing within five
days;
(l) promptly after the sending or filing thereof, copies of all
reports which the Borrower sends to its security holders generally, and copies
of all reports and registration statements which the Borrower or any of its
Subsidiaries files with the Securities and Exchange Commission or any national
securities exchange;
(m) upon the request of any Lender, through the Administrative Agent,
copies of all federal, state and local tax returns and reports filed by the
Borrower or any of its Subsidiaries in respect of taxes measured by income
(excluding sales, use and like taxes);
(n) promptly and in any event within 30 days of the Borrower learning
of any of the following, written notice to the Administrative Agent of any of
the following:
(i) the Borrower or any Guarantor is or may be liable to any
Person as a result of a Release or threatened Release which could reasonably be
expected to subject the Borrower or any Guarantor to Environmental Liabilities
and Costs of $5,000,000 or more;
(ii) the receipt by the Borrower or any Guarantor of
notification that any real or personal property of the Borrower or any Guarantor
is subject to any Environmental Lien;
(iii) the receipt by the Borrower or any Guarantor of any notice
of violation of, or knowledge by the Borrower or any Guarantor that there exists
a condition which could reasonably be expected to result in a violation by the
Borrower or any of its Subsidiaries of, any Environmental Law, except for
violations the consequence of which in the aggregate would have no reasonable
likelihood of subjecting the Borrower and Guarantors collectively to
Environmental Liabilities and Costs of $5,000,000 or more;
(iv) the commencement of any judicial or administrative
proceeding or investigation alleging a violation of any Environmental Law, other
than those the consequences of which in the aggregate would have no reasonable
likelihood of subjecting the Borrower and Guarantors collectively to
Environmental Liabilities and Costs of $5,000,000 or more;
(v) any proposed acquisition of stock, assets or real estate, or
any proposed leasing of property, or any other action by the Borrower or any of
its Subsidiaries the consequences of which in the aggregate have or would have
in the reasonable judgment of the Borrower no likelihood of subjecting the
Borrower and Guarantors collectively to Environmental Liabilities and Costs of
$5,000,000 or more; and
(vi) any proposed action taken by the Borrower or any of its
Subsidiaries to commence, recommence or cease manufacturing, industrial or other
operations other than those the consequences of which in the aggregate have or
would have in the reasonable judgment of the Borrower no likelihood of requiring
the Borrower and Guarantors to obtain additional environmental, health or safety
Permits that collectively require the expenditure of $5,000,000 or more or
become subject to additional Environmental Liabilities and Costs of $5,000,000
or more;
(o) upon written request by any Lender through the Administrative
Agent, a report providing an update of the status of any environmental, health
or safety compliance, hazard or liability issue identified in any notice or
report delivered pursuant to this Agreement, other than those which in the
aggregate have in the reasonable judgment of the Borrower no likelihood of
subjecting the Borrower and Guarantors to Environmental Liabilities and Costs of
$5,000,000 or more;
(p) promptly and in any event within two Business Days thereof,
notice of any (i) refusal of insurance for which the Borrower or any Guarantor
has applied or (ii) the termination of any insurance policy maintained by the
Borrower or any Guarantor, in each case, for reasons of uninsurability; and
(q) such other information respecting the business, properties,
condition, financial or otherwise, or operations of the Borrower or any of its
Subsidiaries as any Lender through the Administrative Agent may from time to
time reasonably request.
6.12 Employee Plans. With respect to any Pension Plan which is
intended to be a Qualified Plan hereafter adopted or maintained by the Borrower,
any of its Subsidiaries or any ERISA Affiliate, the Borrower shall (i) seek, and
cause such of its Subsidiaries and ERISA Affiliates to seek, and receive
determination letters from the IRS to the effect that such Qualified Plan is
qualified within the meaning of Section 401(a) of the Code, and (ii) from and
after the adoption of any such Qualified Plan, cause such plan to be qualified
within the meaning of Section 401(a) of the Code and to be administered in all
material respects in accordance with the requirements of ERISA and Section
401(a) of the Code.
6.13 Interest Rate Contracts. The Borrower shall maintain an
Interest Rate Contract or Contracts, on terms and with counterparties reasonably
satisfactory to the Administrative Agent, to provide protection against interest
rates (exclusive of any applicable margin) exceeding 8% per annum on a notional
amount equal to at least 50% of the outstanding principal amount of the Term
Loans at any date of determination; provided, however, that the Borrower shall
have no obligation to (but may if it so elects) maintain any Interest Rate
Contract or Contracts if the aggregate outstanding principal amount of the Term
Loans is $200,000,000 or less.
6.14 Fiscal Year. The Borrower shall maintain as its Fiscal Year the
period of 52 or 53 weeks ending on the Saturday nearest to January 31 of each
year.
6.15 Environmental. The Borrower shall, at its cost, upon receipt of
any notification or otherwise obtaining knowledge of any Release or other event
that could reasonably be expected to result in the Borrower and the Guarantors
incurring Environmental Liabilities and Costs in excess of $5,000,000, conduct
or pay for consultants to conduct tests or assessments of environmental
conditions at such operations or properties, including, without limitation, the
investigation and testing of subsurface conditions, and shall take such
remedial, investigational or other action as required by Environmental Laws, as
any Governmental Authority requires pursuant to Environmental Laws, or as is
appropriate and consistent with good business practice.
6.16 Cash Management System. The Borrower and each of the Guarantors
shall establish and maintain a cash management system which provides for all
funds (subject to such exceptions as are reasonably satisfactory to the
Administrative Agent) received by, or payable to, the Borrower and the
Guarantors to be deposited in or forwarded in such manner as may be reasonably
requested by the Administrative Agent to cash concentration accounts maintained
at Citibank or any Lender.
ARTICLE VII
NEGATIVE COVENANTS
The Borrower agrees with the Lenders and the Administrative Agent that
unless (a) the Majority Lenders otherwise consent in writing or (b) (i) the
Commitments have been terminated, (ii) all Loans, Other Obligations, accrued or
matured interest and fees, and other then accrued and payable monetary
Obligations have been paid in full, and (iii) all then outstanding Letters of
Credit have been terminated, paid in full or fully cash collateralized to the
reasonable satisfaction of the Administrative Agent:
7.1 Liens, Etc. The Borrower shall not create or suffer to exist,
and shall not permit any of the Guarantors to create or suffer to exist, any
Lien upon or with respect to any of its or such Guarantor's properties, whether
now owned or hereafter acquired, or assign, or permit any of the Guarantors to
assign, any right to receive income, except for:
(a) Liens created pursuant to the Loan Documents;
(b) Purchase money Liens or purchase money security interests upon or
in any property (other than Collateral) acquired or held by the Borrower or any
Guarantor to secure the purchase price of such property or to secure Indebted-
ness incurred solely for the purpose of financing the acquisition of such
property, and Liens existing on such property at the time of its acquisition
(other than any such Lien created in contemplation of such acquisition);
provided, however, that (i) any such Lien is created solely for the purpose of
securing Indebtedness representing, or incurred to finance, refinance or refund,
the cost (including, without limitation, the cost of construction) of the
property subject thereto, (ii) the principal amount of the Indebtedness secured
by such Lien does not exceed 100% of such cost, (iii) such Lien does not extend
to or cover any other property other than such item of property and any
improvements on such item, and (iv) the aggregate principal amount of the
Indebtedness secured by the Liens permitted by this clause (b) and all
Capitalized Lease Obligations permitted by clause (g) of Section 7.2 shall not
exceed $15,000,000 in the aggregate at any time outstanding;
(c) Any Lien securing the renewal, extension, refinancing or
refunding of any Indebtedness or other Obligation secured by any Lien permitted
by subsections (b), (i), (j) or (k) of this Section 7.1 without any increase in
excess of costs and expenses associated therewith in the outstanding aggregate
principal amount of Indebtedness secured thereby or in the assets subject to
such Lien;
(d) Liens arising by operation of law in favor of materialmen,
mechanics, warehousemen, carriers, lessors or other similar Persons incurred by
the Borrower or any of its Subsidiaries in the ordinary course of business which
secure its obligations to such Person; provided, however, that (i) the Borrower
or such Guarantor is not in default in respect of such obligations in an
aggregate amount in excess of $5,000,000 or (ii) the Borrower or such Guarantor
is in good faith and by appropriate proceedings diligently contesting such
obligation, adequate provision is made for the payment thereof and all such
Liens in the aggregate have no Material Adverse Effect;
(e) Liens (excluding Environmental Liens) securing taxes, assessments
or governmental charges, claims or levies to the extent such items are not
required to be paid pursuant to Section 6.2;
(f) Liens incurred or pledges and deposits made in the ordinary
course of business (other than in respect of extensions of credit) in connection
with workers' compensation, unemployment insurance, old-age pensions, other
social security benefits and other obligations (other than Indebtedness)
incurred in the ordinary course of business;
(g) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money), statutory
obligations, surety and appeal bonds and other obligations of like nature,
incurred as an incident to and in the ordinary course of business, and judgment
liens; provided, however, that all such Liens (i) in the aggregate do not have a
Material Adverse Effect and (ii) do not secure directly or indirectly judgments
(not covered by insurance or an indemnity from a creditworthy party who, in
either case, has acknowledged coverage or is required to honor the same pursuant
to a final judgment or order) in excess of $5,000,000;
(h) Zoning restrictions, easements, licenses, reservations,
restrictions on the use of real property or minor irregularities incident
thereto which do not in the aggregate render title thereto unmarketable or
impair, in any material manner, the use of such property for the purposes for
which such property is held by the Borrower or any such Guarantor;
(i) Liens in favor of lessors securing operating leases;
(j) Liens existing on the date hereof and disclosed on Schedule 7.1;
(k) Liens arising under Capitalized Lease Obligations to the extent
such Capitalized Lease Obligations are permitted by Subsection 7.2(g);
(l) expired financing statements, financing statements filed for
precautionary purposes in respect of operating leases, and financing statements
filed in respect of Liens permitted hereby;
(m) Liens not otherwise permitted by the foregoing clauses of this
Section 7.1 securing obligations or other liabilities (other than Indebtedness)
of the Borrower or any Guarantor; provided, however, that the aggregate amount
of such obligations and liabilities secured by such Liens shall not exceed
$1,000,000 at any time outstanding;
(n) Liens (i) if any, on Accounts arising by reason of the
recharacterization of the sale of such Accounts by the Borrower or a Guarantor
to Funding as part of the Receivables Securitization or pursuant to the
Factoring Program or (ii) by reason of the filing of a financing statement in
connection with the Receivables Securitization or the Factoring Program naming
the Borrower or such Guarantor as debtor; and
(o) Liens not otherwise permitted by the foregoing clauses of this
Section 7.1 which rank junior to or pari passu with the Liens created by the
Collateral Documents securing Indebtedness for Borrowed Money of the Borrower or
any Guarantor owed to any lender (other than a Lender); provided, however, that
the aggregate amount of such Indebtedness for Borrowed Money secured by such
Liens shall not exceed $25,000,000 at any time outstanding and with respect to
any Lien permitted under this Section 7.1(o) (an "Additional Lien"), the
Administrative Agent shall, at the request of the Borrower, enter into an
Intercreditor Agreement substantially in the form of Exhibit O with such lender,
providing for the Additional Lien to rank pari passu with the Liens created by
the Collateral Documents but only with respect to the property expressly covered
by the Additional Lien, notwithstanding the order of execution, creation, filing
or recording of the Collateral Documents and the documents creating the
Additional Lien or any Uniform Commercial Code financing statements or other
instruments or notices related thereto or the timing or any other method of
perfection of such Lien.
7.2 Indebtedness. The Borrower shall not create or suffer to exist,
or permit any Guarantor to create or suffer to exist, any Indebtedness except:
(a) the Obligations;
(b) Contingent Obligations permitted by Section 7.11;
(c) current liabilities for goods or services purchased in the
ordinary course of business;
(d) Indebtedness (i) owing to any Guarantor by the Borrower or any
other Guarantor, (ii) Indebtedness owing to the Borrower by any Guarantor, (iii)
Indebtedness in an aggregate principal amount at any time outstanding not in
excess of $25,000,000 owing to one or more North American Ventures, Foreign
Ventures or Minority Interest Ventures by the Borrower or any Guarantor which
Indebtedness, in the case of this clause (iii), is subordinated in right of
payment to the Obligations and (iv) arising pursuant to the Securitization
Documents and evidenced by a note or notes from the Borrower to Funding in an
aggregate principal amount not to exceed $5,000,000 at any time outstanding;
(e) Indebtedness secured by Liens permitted by Subsection 7.1(b) and
Subsection 7.1(o);
(f) obligations pursuant to Interest Rate Contracts referred to in
Section 6.13;
(g) Indebtedness of the Borrower or any Guarantor under Capitalized
Lease Obligations; provided, however, that the aggregate amount of Capitalized
Lease Obligations incurred under this clause (g) and the aggregate amount of
Indebtedness incurred pursuant to clause (e) above by the Borrower and the
Guarantors shall not exceed $25,000,000 at any one time outstanding;
(h) subordinated Indebtedness of the Borrower, containing terms and
conditions satisfactory to the Majority Lenders, in their reasonable judgment,
provided that the Debt Issuance Proceeds thereof are used to prepay the Loans to
the extent required by Subsection 2.8(d);
(i) Indebtedness outstanding on the date hereof and listed on
Schedule 4.22 and refinancings thereof without any increase in the amount of
such Indebtedness;
(j) unsecured Indebtedness in an aggregate principal amount at any
time outstanding not in excess of $25,000,000;
(k) Indebtedness, if any, arising by reason of the recharacterization
of the sale of Accounts pursuant to the Receivables Securitization; and
(l) Indebtedness, if any, in an aggregate principal amount not to
exceed $10,000,000 at any time outstanding arising by reason of the
recharacterization of the sale of Accounts pursuant to the Factoring Program.
7.3 Sale/Leasebacks. The Borrower shall not, and shall not permit
any of the Guarantors to, become or remain liable as lessee or guarantor or
other surety with respect to any lease, whether an operating lease or a
Capitalized Lease, of any property (whether real or personal or mixed), whether
now owned or hereafter acquired, which (a) the Borrower or any of the Guarantors
has sold or transferred or is to sell or transfer to any other Person, or (b)
the Borrower or any of the Guarantors intends to use for substantially the same
purposes as any other property which has been or is to be sold or transferred by
that entity to any other Person in connection with such lease; provided,
however, that the Borrower and any of the Guarantors may become and remain so
liable if (i) the proceeds from such a sale or transfer or series of related
sales or transfers are applied in the same manner as if such proceeds
constituted Asset Sale Proceeds, or (ii) such sale/leaseback transaction is
between Guarantors or between the Borrower and a Guarantor.
7.4 Restricted Payments. The Borrower shall not and shall not permit
any of the Guarantors to (a) declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account or in respect of, or purchase, redeem or otherwise acquire for value,
any of its Stock or Stock Equivalents other than (i) as long as no Event of
Default is continuing, declarations and payments of dividends by the Borrower in
respect of its outstanding common stock and purchases, redemptions and other
acquisitions of Stock or Stock Equivalents of the Borrower, in an aggregate
amount in any Fiscal Year not in excess of 25% of the Net Income of the Borrower
for the previous Fiscal Year, (ii) purchases, redemptions and other acquisitions
of Stock (but not Stock Equivalents) for an aggregate amount from the Effective
Date of up to $10,000,000, (iii) declarations and payments of dividends by the
Borrower in respect of its outstanding common stock paid in, and purchases,
redemptions and other acquisitions of Stock or Stock Equivalents of the Borrower
effected with Stock or Stock Equivalents of the Borrower in respect of which the
Borrower has no purchase, redemption, retirement, defeasance or other
acquisition obligation, (iv) declarations and payments of dividends and other
distributions to the Borrower or any other Guarantor by any Guarantor, and (v)
the repurchase for $67,500,000 of all the USSC Warrants less $25,000,000
representing an adjustment to the purchase price of the Footwear Business
pursuant to the Asset Purchase Agreement, or (b) purchase, redeem, prepay,
defease or otherwise acquire for value or make any payment (other than required
purchases, mandatory redemptions and other required payments) on account or in
respect of any principal amount of Indebtedness for Borrowed Money, now or
hereafter outstanding, except (i) the Loans, (ii) in the case of a Guarantor,
payments to the Borrower or any other Guarantor on account of any Indebtedness
owing to the Borrower or such other Guarantor by such Guarantor and (iii) in
connection with a refinancing of any Indebtedness permitted by Section 7.2.
7.5 Mergers, Borrower Stock Issuances, Sale of Assets, Etc. (a) The
Borrower shall not and shall not permit any of the Guarantors to (i) merge with
any Person; provided, however, that any Guarantor may merge with and into the
Borrower or any other Guarantor, (ii) consolidate with any Person, (iii) except
in respect of (A) a transaction permitted by clause (i) of this Subsection
7.5(a), (B) an Investment permitted by Section 7.6, or (C) the dissolution of a
Guarantor, acquire all or substantially all of the Stock or Stock Equivalents of
any Person, (iv) except in respect of (A) a transaction permitted by clause (i)
of this Subsection 7.5(a), (B) an Investment permitted by Section 7.6, or (C)
the dissolution of a Guarantor, acquire all or substantially all of the assets
of any Person or all or substantially all of the assets constituting the
business of a division, branch or other unit operation of any Person, (v) enter
into any joint venture or partnership with any Person except as permitted by
Section 7.6, or (vi) sell, lease, transfer or otherwise dispose of, whether in
one transaction or in a series of transactions any of its assets, including,
without limitation, substantially all assets constituting the business of a
division, branch or other unit operation except as permitted pursuant to
Subsection (c) below.
(b) The Borrower shall not (i) issue or sell any of its Stock or
Stock Equivalents unless (A) immediately after giving effect thereto such
issuance or sale does not result in a Change in Control and (B) any Equity
Issuance Proceeds of such issuance or sale are used to prepay the Loans to the
extent required by Subsection 2.8(d), or (ii) sell, convey, transfer, lease or
otherwise dispose of, or permit any of the Guarantors to sell, convey, transfer,
lease or otherwise dispose of, any Stock or Stock Equivalents of any Guarantor
except as permitted by Section 7.7.
(c) The Borrower shall not and shall not permit any of the Guarantors
to sell, convey, transfer, lease or otherwise dispose of any of its assets or
any interest therein to any Person, or permit or suffer any other Person to
acquire any interest in any of the assets of the Borrower or any such Guarantor
except (i) the sale or disposition of (A) inventory in the ordinary course of
business, or (B) equipment or motor vehicles which have become obsolete, are
replaced in the ordinary course of business, or which are no longer necessary or
useful in the reasonable judgment of the Borrower for the conduct of its or any
Guarantor's business, (ii) the lease or sublease of real or personal property
(including, without limitation, office and retail space), that is not part of a
sale and leaseback that is otherwise prohibited by this Agreement, (iii) any
such sale, conveyance, transfer, lease or other disposition to the Borrower or
to a Guarantor, (iv) licenses of intellectual property in the ordinary course of
business, to any Foreign Venture, North American Venture or Minority Interest
Venture, (v) Liens permitted by Section 7.1, (vi) Investments permitted by
Section 7.6 and sales, liquidations and other dispositions of Cash Equivalents
and Interest Rate Contracts in the ordinary course of business, (vii) the sale
or purported sale of Accounts to Funding in connection with the Receivables
Securitization and (viii) as long as no Default or Event of Default is
continuing or would result therefrom, any such sale of any assets for the Fair
Market Value thereof, payable at least 75% in cash upon such sale; provided,
however, that, with respect to any such sale pursuant to clause (vii) or (viii)
above, Asset Sale Proceeds in respect thereof are applied to the prepayment of
the Loans to the extent required by Subsection 2.8(d).
(d) The Borrower shall not sell or otherwise dispose of, or factor,
or permit any Guarantor to sell or otherwise dispose of, or factor, any Accounts
except, as long as no Event of Default is continuing or would result therefrom,
(i) as permitted by clause (vii) of the immediately preceding paragraph or (ii)
pursuant to the Factoring Program; provided, however, that with respect to
clause (ii) above, the outstanding face amount of Accounts included in the
Factoring Program shall not at any time exceed $10,000,000.
7.6 Investments in Other Persons. The Borrower shall not, directly
or indirectly, make or maintain, or permit any Guarantor to make or maintain,
any loan or advance to any Person or own, purchase or otherwise acquire, or
permit any Guarantor to own, purchase or otherwise acquire, any Stock, Stock
Equivalents, other equity interest, obligations or other securities of, or any
assets constituting the purchase of a business or line of business, or make or
maintain, or permit any Guarantor to make or maintain, any capital contribution
to, or otherwise invest in, any other Person (any such transaction being an
"Investment"), except:
(a) Investments expressly permitted or required hereunder;
(b) Investments in accounts, contract rights and chattel paper (each
as defined in the Uniform Commercial Code), notes receivable and similar items
arising or acquired in the ordinary course of business consistent with the past
practice of the Borrower and its Subsidiaries;
(c) Investments in Guarantors;
(d) Investments in North American Ventures made after the date
hereof, which, together with all Contingent Obligations permitted under Section
7.11(c) by the Borrower and each of the Guarantors in respect of Indebtedness of
all such North American Ventures, do not in the aggregate exceed $25,000,000 at
any time (exclusive of appreciation and depreciation in the value thereof);
(e) Investments in Foreign Ventures made after the date hereof,
which, together with all Contingent Obligations permitted under Section 7.11(d)
by the Borrower and each of the Guarantors in respect of Indebtedness of all
such Foreign Ventures, do not in the aggregate exceed $30,000,000 outstanding at
any time outstanding (exclusive of appreciation and depreciation in the value
thereof);
(f) personal loans or advances to employees of the Borrower or any of
the Guarantors which loans and advances do not in the aggregate exceed
$5,000,000 outstanding at any time;
(g) loans or advances to customers or suppliers of the Borrower or
any of the Guarantors in the ordinary course of business, which loans and
advances do not in the aggregate exceed $10,000,000 outstanding at any time;
(h) Investments in Cash Equivalents;
(i) Investments comprised of Interest Rate Contracts entered into in
accordance with Section 6.13;
(j) Investments constituting Other Obligations;
(k) Investments existing on the date hereof and set forth on Schedule
7.6;
(l) Investments made after the date hereof not otherwise permitted
hereby in an aggregate amount not in excess of $25,000,000 outstanding at any
time (exclusive of appreciation and depreciation in the value thereof);
(m) Investments in notes receivable and similar items received in
connection with sales and other dispositions of assets in accordance with the
terms hereof;
(n) Investments arising under hedging transactions to the extent
permitted under Section 7.15;
(o) Investments in Funding arising from the transfer by the Borrower
of Accounts to Funding or the issuance by the Borrower of one or more promissory
notes to Funding, in each case in connection with the Receivables
Securitization; provided, however, that at the time of and immediately after
giving effect to each such Investment, no Default or Event of Default exists or
would result and the aggregate amount of such Investments in Funding does not
exceed the amount necessary to consummate the transactions contemplated by the
Securitization Documents and that the aggregate outstanding principal amount of
the Indebtedness of the Borrower to Funding shall at no time exceed $5,000,000.
7.7 Maintenance of Ownership of Subsidiaries. The Borrower shall not
sell or otherwise dispose of any shares of Stock or any Stock Equivalent of any
Guarantor or Funding except for the sale of Texas Boot, or permit any Guarantor
or Funding to issue, sell or otherwise dispose of any shares of its Stock or any
Stock Equivalent or, in the case of any Guarantor, the Stock or any Stock
Equivalent of any other Guarantor except (a) to the Borrower or to a Guarantor
and then only if pledged to the Administrative Agent pursuant to the Borrower
Pledge Agreement or a pledge agreement that is substantially similar thereto, or
(b) as permitted by Subsections 7.5(a) and (c).
7.8 Change in Nature of Business. The Borrower shall not enter into,
and shall not permit any of the Guarantors to enter into, any type of business
other than one carried on at the date hereof and other businesses closely
related thereto.
7.9 Modification of Material Agreements. The Borrower shall not, and
shall not permit any of the Guarantors to, alter, amend, modify, rescind,
terminate or waive any of their respective rights under, or fail to comply in
all material respects with, any of its material Contractual Obligations;
provided, however, that the Borrower shall not be deemed in default of this
Section 7.9 if all such failures in the aggregate do not have a Material Adverse
Effect.
7.10 Accounting Changes. The Borrower shall not make, nor permit any
of the Guarantors to make any change in accounting treatment and reporting
practices or tax reporting treatment, except as required by GAAP or law and
disclosed in writing to the Administrative Agent.
7.11 Contingent Obligations. The Borrower shall not, and shall not
permit any of the Guarantors to, incur, assume, endorse, be or become liable
for, or guarantee, directly or indirectly, or permit or suffer to exist, any
Contingent Obligation, except for:
(a) Contingent Obligations evidenced by a Loan Document;
(b) Contingent Obligations incurred by the Borrower and any Guarantor
in respect of Indebtedness and other obligations and liabilities of the Borrower
or any Guarantor, to the extent such underlying Indebtedness, obligations and
liabilities are permitted hereby;
(c) Contingent Obligations incurred by the Borrower and any Guarantor
after the date hereof in respect of Indebtedness and other obligations and
liabilities of any North American Venture which, together with all Investments
in North American Ventures made pursuant to Subsection 7.6(d), do not exceed
$25,000,000 at any time outstanding;
(d) Contingent Obligations incurred by the Borrower and any Guarantor
after the date hereof in respect of Indebtedness and other obligations and
liabilities of Foreign Ventures which, together with all Investments in Foreign
Ventures made pursuant to Subsection 7.6(e), do not exceed $25,000,000 at any
time outstanding;
(e) Contingent Obligations incurred by the Borrower and any Guarantor
after the date hereof in respect of Indebtedness and other obligations and
liabilities of Minority Interest Ventures which, together with all Investments
made pursuant to Subsection 7.6(l), do not exceed $15,000,000 at any time
outstanding; and
(f) Contingent Obligations in existence on the date hereof to the
extent listed on Schedule 7.11.
7.12 Transactions with Affiliates. The Borrower shall not, and shall
not permit any of the Guarantors, except as otherwise expressly permitted
herein, to do any of the following: (a) make any Investment in an Affiliate of
the Borrower (other than Funding) which Affiliate is not a Guarantor, (b)
transfer, sell, lease, assign or otherwise dispose of any asset to any Affiliate
of the Borrower (other than Funding) which is not a Guarantor, (c) merge into or
consolidate with or purchase or acquire assets from any Affiliate of the
Borrower other than a Guarantor, (d) repay any Indebtedness to any Affiliate of
the Borrower (other than Indebtedness to Funding incurred in connection with the
Receivables Securitization in an aggregate principal amount not exceeding
$5,000,000) or (e) enter into any other transaction directly or indirectly with
or for the benefit of any Affiliate of the Borrower which is not a Guarantor
(including, without limitation, guaranties and assumptions of obligations of any
such Affiliate) except, in the case of each of clause (a) through (e) above, for
(i) transactions otherwise permitted herein, on a basis no less favorable to the
Borrower or such Guarantor as would be obtained in a comparable arm's length
transaction with a Person not an Affiliate, (ii) arrangements with Affiliates of
the Borrower or any of its Subsidiaries in existence on the date hereof, (iii)
salaries and other compensation of the Borrower's and its Subsidiaries'
respective directors, officers and employees, (iv) transactions and other
arrangements between (A) the Borrower and/or one or more Guarantors, on the one
hand, and (B) one or more North American Ventures, Foreign Ventures and/or
Minority Interest Ventures, on the other, to the extent that (1) such
transactions and other arrangements are not otherwise prohibited hereby and (2)
the business purpose achieved by such transaction or other arrangement renders,
in the good faith judgment of the Borrower and any applicable Guarantor, the
terms of such transaction reasonable and in furtherance of the Borrowers' or
such Guarantors' businesses, and (v) any transaction required or otherwise
expressly permitted by this Agreement.
7.13 No New Subsidiaries. The Borrower shall not, and shall not
permit any of the Guarantors to, incorporate or otherwise organize any Domestic
Subsidiary (other than a North American Venture) which was not in existence on
the Effective Date unless (a) such Domestic Subsidiary is a Wholly-Owned
Subsidiary, (b) all of the Stock and Stock Equivalents of such Domestic
Subsidiary are pledged to the Administrative Agent pursuant to the Borrower
Pledge Agreement or a pledge agreement that is substantially similar thereto,
(c) such Domestic Subsidiary (other than Funding) executes and delivers to the
Administrative Agent a Guaranty and a Subsidiary Security Agreement, and (d) if
such Domestic Subsidiary is Funding, the Borrower pledges to the Administrative
Agent, on behalf and for the ratable benefit of the Secured Parties, pursuant to
an amendment to the Borrower Pledge Agreement in form and substance satisfactory
to the Administrative Agent, any note of Funding received by the Borrower in
connection with the Receivables Securitization.
7.14 Terms of Guarantors' Stock. The Borrower shall not permit any
Guarantor to make any change in the terms of its outstanding Stock or Stock
Equivalents.
7.15 No Speculative Transactions. The Borrower shall not and shall
not permit any of the Guarantors to engage in any transaction involving
derivatives or commodity options, futures or forward contracts, except for the
sole purpose of hedging in the normal course of business and consistent with
past practices.
ARTICLE VIII
EVENTS OF DEFAULT
8.1 Events of Default. Each of the following events shall be an
Event of Default:
(a) The Borrower shall fail to pay any principal (including, without
limitation, mandatory prepayments of principal) of any Loan when the same
becomes due and payable; or
(b) The Borrower shall fail to pay any interest on any Loan, any fee
or any other amount due hereunder or under the other Loan Documents or any of
the other monetary Obligations within five days after the same becomes due and
payable; or
(c) Any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(d) Any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Article V, Section 6.4, 6.5, 6.9, 6.10 or
6.11 or Article VII, or (ii) any other term, covenant or agreement contained in
this Agreement or in any other Loan Document if such failure under this clause
(ii) shall remain unremedied for 15 days after the earlier of the date on which
(A) a Responsible Officer of the Borrower becomes aware of such failure or (B)
written notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender; or
(e) Any Loan Party shall fail to pay any payment in respect of any
Indebtedness for Borrowed Money of such Loan Party (or any Contingent Obligation
in respect of Indebtedness for Borrowed Money of any other Person) having a
principal amount of $5,000,000 or more (other than the Indebtedness evidenced by
the Notes), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) after giving
effect to any applicable grace period or any other event shall occur or
condition shall exist under any agreement or instrument relating to any such
Indebtedness, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness; or any such
Indebtedness shall become or be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), or any
Loan Party shall be required to repurchase or offer to repurchase such
Indebtedness, prior to the stated maturity thereof; or
(f) Any Loan Party shall generally not pay its debts as such debts
become due, or shall admit in writing its inability to pay its debts generally,
or shall make a general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against any Loan Party seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a custodian, receiver, trustee or other similar official for it
or for any substantial part of its property and, in the case of any such
proceedings instituted against any Loan Party (but not instituted by it), either
such proceedings shall remain undismissed or unstayed for a period of 60 days or
any of the actions sought in such proceedings shall occur; or any Loan Party
shall take any corporate action to authorize any of the actions set forth above
in this subsection (e); or
(g) Any judgment or order for the payment of money (to the extent not
covered by insurance or an indemnity from a creditworthy party who, in either
case, has acknowledged coverage or is required to honor the same pursuant to any
final judgment or order) in excess of $5,000,000 shall be rendered against any
Loan Party and either (i) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order, or (ii) there shall be any period of
20 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; or
(h) (i) With respect to any Plan, a prohibited transaction within the
meaning of Section 4975 of the Code or Section 406 of ERISA shall occur which in
the reasonable determination of the Majority Lenders has a reasonable likelihood
of resulting in direct or indirect liability to any Loan Party, (ii) with
respect to any Title IV Plan, the filing of a notice to voluntarily terminate
any such plan in a distress termination, (iii) with respect to any Multiemployer
Plan, any Loan Party or any ERISA Affiliate shall incur any Withdrawal
Liability, (iv) with respect to any Qualified Plan, any Loan Party or any ERISA
Affiliate shall incur an accumulated funding deficiency or request a funding
waiver from the IRS, or (v) with respect to any Title IV Plan or Multiemployer
Plan which has an ERISA Event not described in clauses (i) through (iv) hereof,
in the reasonable determination of the Majority Lenders there is a reasonable
likelihood for termination of any such plan by the PBGC; provided, however, that
the events listed in clauses (i) through (v) hereof shall constitute Events of
Default only if the liability, deficiency or waiver request of any Loan Party or
any ERISA Affiliate, whether or not assessed, exceeds $5,000,000 in any case set
forth in (i) through (v) above, or exceeds $5,000,000 for any three-year period
in the aggregate for all such cases;
(i) Any provision deemed material by the Majority Lenders in their
reasonable judgment of any Collateral Document or any Guaranty after delivery
thereof under Section 3.1 shall for any reason cease to be valid and binding on,
or enforceable against, any Loan Party party thereto, or any Loan Party shall so
state in writing; or
(j) Except as expressly set forth in any of the Collateral Documents
or Section 4.10, any Collateral Document after delivery thereof pursuant to
Section 3.1 shall, for any reason, cease to create valid Liens on any of the
Collateral purported to be covered thereby, or, except in respect of de minimis
portions of the Collateral, such Liens shall cease to be perfected and first
priority Liens, or any Loan Party shall so state in writing; or
(k) There shall occur any Change of Control; or
(l) There shall occur any change in the Borrower's arrangements in
respect of the Borrower's sourcing of its shoe inventory which has a Material
Adverse Effect; or
(m) Any Loan Party shall have entered into any consent or settlement
decree or agreement or similar arrangement with any Governmental Authority or
any judgment, order, decree or similar action shall have been entered against
any Loan Party, in either case based on or arising from the violation of or
pursuant to any Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Contaminant and, in connection with all
the foregoing, the Borrower and the Guarantors are likely to incur Environmental
Liabilities and Costs (to the extent not covered by insurance or an indemnity
from a creditworthy party who, in either case, has acknowledged coverage or is
required to honor the same pursuant to any final judgment or order) in excess of
$10,000,000 in the aggregate.
8.2 Remedies. If there shall occur and be continuing any Event of
Default, the Administrative Agent (a) shall at the request, or may with the
consent, of the Majority Lenders by notice to the Borrower, declare the
obligation of each Lender to make Loans and each Issuer to issue a Letter of
Credit to be terminated, whereupon the same shall forthwith terminate, and (b)
shall at the request, or may with the consent, of the Majority Lenders by notice
to the Borrower, declare the Loans, all interest thereon and all other amounts
and Obligations payable under this Agreement to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts and Obligations
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower; provided, however, that upon the occurrence of the Event of
Default specified in Subsection 8.1(f), (A) the obligation of each Lender to
make Loans and of each Issuer to issue Letters of Credit shall automatically be
terminated and (B) the Loans, all such interest and all such amounts and
Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. In addition to the remedies set forth in this
Agreement, the Administrative Agent may exercise any remedies provided for by
the Collateral Documents in accordance with the terms thereof or any other
remedies provided by applicable law.
8.3 Actions in Respect of Letters of Credit and Other Obligations.
(a) Upon the Termination Date, the Borrower shall pay to the
Administrative Agent in immediately available funds at the Administrative
Agent's office specified in the Notes, for deposit in a special interest-bearing
cash collateral account (the "L/C Cash Collateral Account") to be maintained
with and in the name of the Administrative Agent on behalf of the Secured
Parties at such place as shall be designated by the Administrative Agent, an
amount equal to the sum of all outstanding Letter of Credit Obligations plus all
outstanding Other Obligations less the then balance, if any, in the L/C Cash
Collateral Account.
(b) The Borrower hereby pledges, and grants to the Administrative
Agent a Lien on all of its right, title and interest in and to all funds held in
the L/C Cash Collateral Account from time to time, and all proceeds thereof, as
security for the payment of all amounts due and to become due from the Borrower
to the Lenders and the Issuers under the Loan Documents.
(c) The Administrative Agent may, from time to time after funds are
deposited in the L/C Cash Collateral Account, apply funds then held in the L/C
Cash Collateral Account to the payment of any amounts, in such order as the
Administrative Agent may elect, as shall have become or shall become due and
payable by the Borrower to the Issuers or Lenders in respect of the Letter of
Credit Obligations and Other Obligations. The Administrative Agent shall
promptly give written notice of any such application; provided, however, that
the failure to give such written notice shall not invalidate any such
application.
(d) Neither the Borrower nor any Person claiming on behalf of or
through the Borrower shall have any right to withdraw any of the funds held in
the L/C Cash Collateral Account at any time prior to the termination of all
outstanding Letters of Credit and the payment in full of all then outstanding
and payable monetary Obligations.
(e) The Borrower agrees that it will not (i) sell or otherwise
dispose of any interest in the L/C Cash Collateral Account or any funds held
therein or (ii) create or permit to exist any Lien upon or with respect to the
L/C Cash Collateral Account or any funds held therein, except as provided in or
contemplated by this Agreement.
(f) The Administrative Agent may exercise, in its sole discretion, in
respect of the L/C Cash Collateral Account, in addition to the other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party upon default under the Uniform Commercial Code in
effect in the State of New York at that time, and the Administrative Agent may,
without notice except as specified below, sell the L/C Cash Collateral Account
or any part thereof in one or more sales, at public or private sale, at any of
the Administrative Agent's offices or elsewhere, for cash, or credit or for
future delivery, and upon such other terms as the Administrative Agent may deem
commercially reasonable. The Borrower agrees that, to the extent notice of sale
shall be required by law, at least 10 days' notice to the Borrower of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Administrative Agent shall
not be obligated to make any sale of the L/C Cash Collateral Account, regardless
of notice of sale having been given. The Administrative Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.
(g) Any cash held in the L/C Cash Collateral Account, and all cash
proceeds received by the Administrative Agent in respect of any sale of,
collection from or other realization upon all or any part of the L/C Cash
Collateral Account or any of the assets contained therein, may, in the
discretion of the Administrative Agent, then or at any time thereafter be
applied (after all payments provided for in Subsection 8.3(c), the expiration of
all outstanding Letters of Credit and the payment of any amounts payable
pursuant to Section 10.4) in whole or in part by the Administrative Agent
against all or any part of the other Obligations in such order as the
Administrative Agent shall elect. Any surplus of such cash or cash proceeds
held by the Administrative Agent and remaining after the indefeasible cash
payment in full of all of the Obligations shall be paid over to the Borrower or
to whomsoever may be lawfully entitled to receive such surplus.
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1 Authorization and Action. (a) Each Lender hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. Without
limitation of the foregoing, each Lender hereby authorizes the Administrative
Agent to execute and deliver, and to perform its obligations under, each of the
Loan Documents to which the Administrative Agent is a party, and to exercise all
rights, powers and remedies that the Administrative Agent may have under such
Loan Documents.
(b) As to any matters not expressly provided for by this Agreement
and the other Loan Documents (including, without limitation, enforcement or
collection of the Notes), the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Administrative Agent shall not be required to take
any action which the Administrative Agent in good faith believes exposes it to
personal liability or is contrary to this Agreement or applicable law. The
Administrative Agent agrees to give to each Lender prompt notice of each notice
given to it by any Loan Party pursuant to the terms of this Agreement or the
other Loan Documents.
9.2 Administrative Agent's Reliance, Etc. Neither the Administrative
Agent, nor any of its Affiliates or any of the respective directors, officers,
agents or employees of the Administrative Agent or any such Affiliate shall be
liable for any action taken or omitted to be taken by it, him, her or them under
or in connection with this Agreement or the other Loan Documents, except for
its, his, her or their own gross negligence or wilful misconduct. Without
limitation of the generality of the foregoing, the Administrative Agent (a) may
treat the payee of any Note as the holder thereof until such note has been
assigned in accordance with Section 10.7, (b) may rely on the Register to the
extent set forth in Subsection 10.7(c), (c) may consult with legal counsel
(including, without limitation, counsel to the Borrower or any other Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts, (d)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents, (e) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or any of the other
Loan Documents on the part of the Borrower or any other Loan Party or to inspect
the property (including, without limitation, the books and records) of the
Borrower or any other Loan Party, (f) shall not be responsible to any Lender for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto, and (g) shall incur
no liability under or in respect of this Agreement or any of the other Loan
Documents by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telegram, cable, telex or facsimile transmission)
believed by it to be genuine and signed or sent by the proper party or parties.
9.3 Citibank and Affiliates. With respect to its Revolving Credit
Commitment, the Loans made by it and each Note issued to it and Letters of
Credit issued by it, Citibank shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Administrative Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include Citibank in its individual capacity.
Citibank and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with,
the Borrower or any of its Subsidiaries and any Person who may do business with
or own securities of the Borrower or any of its Subsidiaries, all as if Citibank
were not the Administrative Agent and without any duty to account therefor to
the Lenders.
9.4 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements referred to in Article IV and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and other
Loan Documents.
9.5 Indemnification. The Lenders agree to indemnify the
Administrative Agent and its Affiliates, and their respective directors,
officers, employees, agents and advisors (to the extent not reimbursed by the
Borrower or the other Loan Parties), ratably according to the respective
principal amounts of the Notes then held by each of them and Letter of Credit
Obligations (including, without limitation, participations therein) owing to
them (or if no Notes and Letter of Credit Obligations are at the time
outstanding, ratably according to the respective amounts of the aggregate of
their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses and
disbursements (including, without limitation, fees and disbursements of legal
counsel) of any kind or nature whatsoever which may be imposed on, incurred by,
or asserted against, the Administrative Agent in any way relating to or arising
out of this Agreement or the other Loan Documents or any action taken or omitted
by the Administrative Agent under this Agreement or the other Loan Documents;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's or
such Affiliate's gross negligence or wilful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon demand for its ratable share of any out-of-pocket expenses (including,
without limitation, fees and disbursements of legal counsel) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
its rights or responsibilities under, this Agreement or the other Loan
Documents, to the extent that the Administrative Agent is not reimbursed for
such expenses by the Borrower or another Loan Party.
9.6 Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Majority Lenders shall have the right
to appoint a successor Administrative Agent that is reasonably satisfactory to
the Borrower. If no successor Administrative Agent shall have been so appointed
by the Majority Lenders, and shall have accepted such appointment, within 30
days after the retiring Administrative Agent's giving of notice of resignation,
then the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which shall be a commercial bank organized under
the laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article IX shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
ARTICLE X
MISCELLANEOUS
10.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Borrower therefrom shall in
any event be effective unless the same shall be in writing and signed by the
Majority Lenders, and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Lenders, do any of the following: (a) waive any of the
conditions specified in Article III except as otherwise provided therein, (b)
increase the Commitments of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the Loans or any fees
or other amounts payable hereunder, (d) postpone any date fixed for any payment
of principal of, or interest on, the Loans or any fees or other amounts payable
hereunder, (e) change the percentage of the Commitments or the aggregate unpaid
principal amount of the Loans or Letter of Credit Obligations which shall be
required for the Lenders or any of them to take any action hereunder, (f)
release all or substantially all of the Collateral except as shall otherwise be
provided in Section 7.5 or in the Collateral Documents, (g) release any
Guarantor from a Guaranty, except as shall otherwise be provided in such
Guaranty, or (h) amend this Section 10.1 or the definition of the term "Majority
Lenders" contained in Section 1.1; and provided further that no amendment,
waiver or consent shall, unless in writing and signed by the Administrative
Agent or the Issuers in addition to the Lenders required above to take such
action, affect the rights or duties of the Administrative Agent or the Issuers,
respectively, under this Agreement or the other Loan Documents.
10.2 Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including, without limitation, telegraphic,
telex, telecopy or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered by hand, if to the Borrower, at its address at
11933 Westline Industrial Drive, St. Louis, Missouri 63146 (telecopy number:
(314) 434-0409) (telephone number: (314) 579-8812), Attention: Chief Financial
Officer, with a copy to the Borrower at its address at 9 West Broad Street,
Stamford, Connecticut 06902 (telecopy number: (203) 978-6020) (telephone
number: (203) 328-4386), Attention: General Counsel; if to any Lender, at its
Domestic Lending Office specified opposite its name on Schedule II; if to
Citibank in its capacity as Issuer at its address at 399 Park Avenue, New York,
New York 10403 (telecopy number: (212) 793-7585) (telephone number: (212) 559-
3763), Attention: Arnold Ziegel; and if to the Administrative Agent, at its
address at One Court Square, Long Island City, New York 11120 (telecopy number
718-248-4844)(telephone number: 718-248-4479), Attention: Bruce McKenzie; or, as
to the Borrower, any Lender, any Issuer or the Administrative Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, cabled or delivered, be effective when
deposited in the mails, delivered to the telegraph company, confirmed by telex
answer back, telecopied with confirmation of receipt, delivered to the cable
company or delivered by hand to the addressee or its agent, respectively, except
that notices and communications to the Administrative Agent pursuant to Article
II or IX shall not be effective until received by the Administrative Agent.
10.3 No Waiver; Remedies. No failure on the part of any Lender or
the Administrative Agent to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
10.4 Costs; Expenses; Indemnities. (a) The Borrower agrees to pay
promptly after a demand therefor (i) all reasonable out-of-pocket costs and
expenses of the Administrative Agent and the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, each of the other Loan Documents and each of the other documents
to be delivered hereunder and thereunder, including, without limitation, (A) the
reasonable fees and out-of-pocket expenses of Weil, Gotshal & Manges LLP,
counsel to the Administrative Agent but no other counsel to the Administrative
Agent, any Lender or any Issuer without the approval of the Borrower, (B) all
filing and recording fees, and all syndication (including printing, distribution
and bank meetings), transportation, computer, duplication, messenger, and audit
costs and expenses, and (ii) all costs and expenses of the Administrative Agent,
each Issuer and each Lender (including, without limitation, the reasonable fees
and out-of-pocket expenses of counsel retained by the Administrative Agent, any
Issuer or any Lender) in connection with the restructuring or enforcement
(whether through negotiation, legal proceedings or otherwise) of this Agreement
and the other Loan Documents.
(b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Issuer and each Lender and their respective
Affiliates, and the directors, officers, employees, agents, attorneys,
consultants and advisors of or to any of the foregoing (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in Article III) (each of the
foregoing being an "Indemnitee") from and against any and all claims, damages,
liabilities, obligations, losses, penalties, actions, judgments, suits, costs,
disbursements and expenses of any kind or nature (including, without limitation,
fees and disbursements of counsel to any such Indemnitee, but subject to the
second proviso contained in this sentence) which may be imposed on, incurred by
or asserted against any such Indemnitee in connection with or arising out of any
investigation, litigation or proceeding, whether or not any such Indemnitee is a
party thereto, whether direct, indirect, or consequential and whether based on
any federal, state or local law or other statutory regulation, securities or
commercial law or regulation, or under common law or in equity, or on contract,
tort or otherwise, in any manner relating to or arising out of this Agreement,
any other Loan Document, any Obligation, any Letter of Credit, or any act, event
or transaction related or attendant to any thereof, including, without
limitation, (i) all Environmental Liabilities and Costs arising from or
connected with the past, present or future operations of the Borrower or any of
its Subsidiaries involving any property subject to a Collateral Document, or
damage to real or personal property or natural resources or harm or injury
alleged to have resulted from any Release of Contaminants on, upon or into such
property or any contiguous real estate; (ii) any costs or liabilities incurred
in connection with any Remedial Action concerning the Borrower or any of its
Subsidiaries; (iii) any costs or liabilities incurred in connection with any
Environmental Lien; (iv) any costs or liabilities incurred in connection with
any other matter under any Environmental Law, including, without limitation,
CERCLA and applicable state property transfer laws, whether, with respect to any
of the foregoing, such Indemnitee is a mortgagee pursuant to any leasehold
mortgage, a mortgagee in possession, the successor in interest to the Borrower
or any of its Subsidiaries, or the owner, lessee or operator of any property of
the Borrower or any of its Subsidiaries by virtue of foreclosure, except, with
respect to any of the foregoing referred to in clauses (i), (ii), (iii) and
(iv), as set forth in the following proviso or to the extent (A) incurred
following foreclosure by the Administrative Agent, any Issuer or any Lender, or
the Administrative Agent, any Issuer or any Lender having become the successor
in interest to the Borrower or any of its Subsidiaries, and (B) attributable
solely to acts of the Administrative Agent, such Issuer or such Lender; or (v)
the use or intended use of the proceeds of the Loans or Letters of Credit or in
connection with any investigation of any potential matter covered hereby
(collectively, the "Indemnified Matters"); provided, however, that the Borrower
shall not have any obligation under this Subsection 10.4(b) to an Indemnitee
with respect to any Indemnified Matter caused by or resulting from the gross
negligence or willful misconduct of that Indemnitee, as determined by a court of
competent jurisdiction in a final non-appealable judgment or order, but in no
event shall any Indemnitee be liable for any exemplary or punitive damages to
the extent permitted by applicable law; and provided further, however, that in
connection with any investigation, litigation or proceeding of the type referred
to above, or the preparation of a defense with respect thereto, the Borrower
shall not be responsible for, or required to hold harmless any Indemnitee from
and against, the fees and disbursements of more than one counsel for all of the
Indemnified Parties taken together, except to the extent any such Indemnitee
requires its own counsel in order to be adequately represented in the reasonable
judgment of counsel for such Indemnitee.
(c) If any Lender receives any payment of principal of, or is subject
to a conversion of, any Eurodollar Rate Loan or Fixed Rate Loan other than on
the last day of an Interest Period relating to such Loan, as a result of any
payment or conversion made by the Borrower or acceleration of the maturity of
the Notes pursuant to Section 8.2 or for any other reason, the Borrower shall,
upon demand by such Lender (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender all
amounts required to compensate such Lender for any additional losses, costs or
expenses which it may reasonably incur as a result of such payment or
conversion, including, without limitation, any loss (including, without
limitation, loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund or maintain such Loan, assuming for such purpose that, in the
case of a Eurodollar Rate Loan, such Lender has funded such Eurodollar Rate Loan
in the London interbank eurodollar market with a loan of the same amount and
Interest Period as such Eurodollar Rate Loan.
(d) The Borrower shall indemnify the Administrative Agent, the
Issuers and the Lenders for, and hold the Administrative Agent and the Lenders
harmless from and against, any and all claims for brokerage commissions, fees
and other compensation made against the Administrative Agent, the Issuers and
the Lenders for any broker, finder or consultant with respect to any agreement,
arrangement or understanding made by or on behalf of the Borrower or any of its
Subsidiaries in connection with the transactions contemplated by this Agreement.
(e) The Administrative Agent, each Issuer and each Lender agree that
in the event that any such investigation, litigation or proceeding set forth in
subparagraph (b) above is asserted or threatened in writing or instituted
against it or any other Indemnitee, or any Remedial Action is requested of it or
any of its officers, directors, agents and employees, for which any Indemnitee
may desire indemnity or defense hereunder, such Indemnitee shall promptly notify
the Borrower in writing.
(f) The Borrower, at the request of any Indemnitee, shall have the
obligation to defend against such investigation, litigation or proceeding or
requested Remedial Action, and the Borrower, in any event, may participate in
the defense thereof with legal counsel of the Borrower's choice. In the event
that such Indemnitee requests the Borrower to defend against such investigation,
litigation or proceeding or requested Remedial Action, the Borrower shall
promptly do so and such Indemnitee at its own cost and expense shall have the
right to have legal counsel of its choice participate in such defense. No
action taken by legal counsel chosen by such Indemnitee in defending against any
such investigation, litigation or proceeding or requested Remedial Action, shall
vitiate or in any way impair the Borrower's obligation and duty hereunder to
indemnify and hold harmless such Indemnitee.
(g) The Borrower agrees that any indemnification or rights in respect
thereof provided to any Indemnitee pursuant to this Agreement (including,
without limitation, pursuant to this Section 10.4) or any other Loan Document
shall (i) survive payment of the Obligations and (ii) inure to the benefit of
any Person who was at any time an Indemnitee under this Agreement or any other
Loan Document.
10.5 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Borrower against any and all of the
Obligations now or hereafter existing irrespective of whether or not such Lender
shall have made any demand under this Agreement or any Note or any Reimbursement
Agreement or any other Loan Document and although such Obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section are in addition to
the other rights and remedies (including, without limitation, other rights of
set-off) which such Lender may have.
10.6 Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Administrative Agent and when
the Administrative Agent shall have been notified by each Lender and each Issuer
that such Lender and such Issuer has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative Agent, each
Lender and each Issuer and their respective successors and permitted assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of all the Lenders.
10.7 Assignments and Participations. (a) Each Lender may sell,
transfer, negotiate or assign to one or more Eligible Assignees all or a portion
of its Commitments, commitment to issue Letters of Credit, the Loans and Letter
of Credit Obligations owing to it and the Notes held by it and a commensurate
portion of its rights and obligations hereunder and under the other Loan
Documents; provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of (A) all of the assigning Lender's
rights and obligations as a Lender making Revolving Credit Loans under this
Agreement and/or (B) all of the assigning Lender's rights and obligations as a
Lender making Term Loans under this Agreement, (ii) the aggregate amount of the
Commitment, Loans and participation in Letter of Credit Obligations being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event (if
less than the Assignor's entire interest) be less than $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, except, in either case, (A)
with the consent of the Borrower and the Administrative Agent or (B) if such
assignment is being made to an existing Lender, (iii) if such Eligible Assignee
is not, prior to the date of such assignment, a Lender or an Affiliate of a
Lender, such assignment shall be subject to the prior consent of the
Administrative Agent and the Borrower (which consent shall not be unreasonably
withheld) and (iv) in the case of any Initial Lender unless such assignment is
an assignment of such Initial Lender's entire interest in the Loans such Initial
Lender is required to retain an interest in the Loans equal to at least
$14,000,000 (except as such Initial Lender's interest in the Loans may be
reduced below $14,000,000 by scheduled repayments or prepayments, whether
mandatory or optional). The parties to each assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording, an
Assignment and Acceptance, together with the Notes (or an Affidavit of Loss and
Indemnity with respect to such Notes satisfactory to the Administrative Agent)
subject to such assignment. Upon such execution, delivery, acceptance and
recording and the receipt by the Administrative Agent from the assignee in
respect thereof of an assignment fee in the amount of $2,500, from and after the
effective date specified in such Assignment and Acceptance, (A) the assignee
thereunder shall become a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to such assignee
pursuant to such Assignment and Acceptance, have the rights and obligations of a
Lender, and if such Lender was an Issuer, of such Issuer hereunder and
thereunder, and (B) the assignor thereunder shall, to the extent that rights and
obligations under this Agreement have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (except those which survive the
payment in full of the Obligations) and be released from its obligations under
the Loan Documents, other than those relating to events or circumstances
occurring prior to such assignment (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under the Loan Documents, such Lender shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any of the statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any of its Subsidiaries or the performance or observance by
any Loan Party of any of its obligations under this Agreement or any other Loan
Document or of any other instrument or document furnished pursuant hereto or
thereto; (iii) such assigning Lender confirms that it has delivered to the
assignee and the assignee confirms that it has received a copy of this Agreement
and each of the Loan Documents together with a copy of the most recent financial
statements delivered by the Borrower to the Lenders pursuant to each of the
clauses of Section 6.11 (or if no such statements have been delivered, the
financial statements referred to in Section 4.5 of this Agreement) and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Administrative
Agent, such assigning Lender or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement; (v)
such assignee confirms that it is an Eligible Assignee; (vi) such assignee
appoints and authorizes the Administrative Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto; (vii)
Subsection 2.16(f) and Section 10.7 have been complied with; and (viii) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender and if such assignor Lender was the Issuer, as the Issuer.
(c) The Administrative Agent shall maintain at its address referred
to in Section 10.2 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, commitments to issue Letters of Credit,
Letter of Credit Obligations owing to, and principal amount of the Loans owing
to each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Loan Parties, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as a Lender or the Issuer, as the case
may be, for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower, the Administrative Agent or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with the Notes subject to such assignment, the Administrative , Agent
shall, if such Assignment and Acceptance has been completed, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. Within 10
Business Days after its receipt of such notice and a request therefor, the
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent, in exchange for such surrendered Notes, new Notes to the order of such
Eligible Assignee in an amount equal to the Commitments assumed by it pursuant
to such Assignment and Acceptance and, if the assigning Lender has retained
Commitments hereunder, new Notes to the order of the assigning Lender in an
amount equal to the Commitments retained by it hereunder. Such new Notes shall
be dated the same date as the Surrendered Notes and be in substantially the form
of Exhibit A-1, A-2 or A-3, as applicable.
(e) In addition to the other assignment rights provided in this
Section 10.7, each Lender may assign, as collateral or otherwise, any of its
rights under this Agreement (including, without limitation, rights to payments
of principal or interest on the Notes) to any Federal Reserve Bank without
notice to or consent of the Borrower or the Administrative Agent; provided,
however, that no such assignment shall release the assigning Lender from any of
its obligations hereunder. The terms and conditions of any such assignment and
the documentation evidencing such assignment shall be in form and substance
satisfactory to the assigning Lender and the assignee Federal Reserve Bank.
(f) Each Lender may sell participations to one or more banks or other
Persons in or to all or a portion of its rights and obligations under the Loan
Documents (including, without limitation, all or a portion of its Commitments,
commitment to issue Letters of Credit, the Letter of Credit Obligations owing to
it, the Loans owing to it and the Notes held by it). Each Lender will notify
the Administrative Agent (which shall promptly notify the Borrower) of any such
participations. The terms of such participation shall not, in any event,
require the participant's consent to any amendments, waivers or other
modifications of any provision of any Loan Documents, the consent to any
departure by any Loan Party therefrom, or to the exercising or refraining from
exercising any powers or rights which such Lender may have under or in respect
of the Loan Documents (including, without limitation, the right to enforce the
obligations of the Loan Parties), except if any such amendment, waiver or other
modification or consent would (i) reduce the amount, or postpone any date fixed
for, any amount (whether of principal, interest or fees) payable to such
participant under the Loan Documents, to which such participant would otherwise
be entitled under such participation or (ii) result in the release of all or
substantially all of the Collateral other than in accordance with the Loan
Documents. In the event of the sale of any participation by any Lender, (A)
such Lender's obligations under the Loan Documents (including, without
limitation, its Commitments and commitment hereunder to issue Letters of Credit)
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (C) such Lender
shall remain the holder of such Notes and Obligations for all purposes of this
Agreement, and (D) the Borrower, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement.
(g) The Issuer may at any time assign its rights and obligations
hereunder to any other Lender by an instrument in form and substance
satisfactory to the Administrative Agent and the parties thereto.
(h) Subject to clause (D) of the last sentence of Subsection 10.7(f),
each participant shall be entitled to the benefits of Sections 2.12, 2.14 and
2.16 as if it were a Lender; provided, however, that anything herein to the
contrary notwithstanding, the Borrower shall not, at any time, be obligated to
pay, in the aggregate, to or for the benefit of the participants of the interest
of any Lender and such Lender, under Section 2.12, 2.14 or 2.16, any sum in
excess of the sum which the Borrower would have been obligated to pay to such
assigning Lender in respect of such interest had such participations not been
sold.
10.8 Governing Law. This Agreement and the Notes and the rights and
obligations of the parties hereto and thereto shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
10.9 Submission to Jurisdiction; Service of Process. (a) Any legal
action or proceeding with respect to this Agreement or the Notes or any document
related thereto may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower hereby accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The parties hereto hereby irrevocably waive any
objection, including, without limitation, any objection to the laying of venue
or based on the grounds of forum non conveniens, which any of them may now or
hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.
(b) The Borrower irrevocably consents to the service of process of
any of the aforesaid courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the Borrower
at its address provided herein.
(c) Nothing contained in this Section 10.9 shall affect the right of
the Administrative Agent, any Lender or any holder of a Note to serve process in
any other manner permitted by law or commence legal proceedings or otherwise
proceed against the Borrower in any other jurisdiction.
10.10 Section Titles. The Section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
10.11 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
10.12 Entire Agreement. This Agreement, together with all of the
other Loan Documents and all certificates and documents delivered hereunder or
thereunder, and the fee agreements referred to in Section 2.5 embody the entire
agreement of the parties and supersedes all prior agreements and understandings
relating to the subject matter hereof.
10.13 Confidentiality. Each Lender and the Administrative Agent
agree to keep information (including, without limitation, the Environmental
Reports) obtained by it pursuant hereto and the other Loan Documents
confidential in accordance with such Lender's or the Administrative Agent's, as
the case may be, customary practices and agrees that it will only use such
information in connection with the transactions contemplated by this Agreement
and not disclose any of such information other than (a) to such Lender's or the
Administrative Agent's, as the case may be, employees, representatives, agents
and affiliates who are or are expected to be involved in the evaluation of such
information in connection with the transactions contemplated by this Agreement
and who are advised of the confidential nature of such information, (b) to the
extent such information presently is or hereafter becomes available to such
Lender or the Administrative Agent, as the case may be, on a non-confidential
basis from a source other than the Borrower or any of its Subsidiaries, (c) to
the extent disclosure is required by law, regulation or judicial order or
requested or required by bank regulators or auditors, or (d) to assignees or
participants or potential assignees or participants who agree in writing for the
benefit of the Borrower to be bound by the provisions of this sentence.
10.14 Waiver of Jury Trial. Each of the parties hereto waives any
right it may have to trial by jury in respect of any litigation based on, or
arising out of, under or in connection with this Agreement or any other Loan
Document, or any course of conduct, course of dealing, verbal or written
statement or action of any party hereto.
10.15 Surrender of original Notes. Each Lender shall surrender the
original Notes held by it with respect to the Term Loan and Revolving Credit
Commitments of such Lender outstanding under the Existing Credit Agreement as at
the Effective Date upon the issuance to such Lender of new Notes under this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
NINE WEST GROUP INC.
By:
-----------------------------
Title:
CITIBANK, N.A.,
as Administrative Agent
By:
-----------------------------
Title:
Lenders
-------
CITIBANK, N.A.
as Lender and Issuer
By:
-----------------------------
Title:
SCHEDULE III
PERFORMANCE PRICING SCHEDULE
----------------------------
Applicable Base Rate Margin, Applicable Eurodollar
Rate Margin, Facility Fee and Letter of Credit Fees
---------------------------------------------------
During the period commencing on the Effective Date and ending on the
date on which audited financial statements for Fiscal Year 1996 that comply with
Section 6.10(a) are made available to the Administrative Agent, the Applicable
Base Rate Margin, the Applicable Eurodollar Rate Margin, Facility Fees and
Letter of Credit Fees shall be at the rates set forth in the column headed
"Level IV" below.
Thereafter, the Applicable Base Rate Margin, the Applicable Eurodollar
Rate Margin, Facility Fees and Letter of Credit Fees shall remain the same,
increase or decrease, as the case may be, in accordance with the following
schedule:
Facility Fee is payable quarterly in arrears on the first day of each
calendar quarter and computed on a 360-day basis.
Level I Level II Level III Level IV Level V
-------------------------------------------------------------
Basis for Pricing:
- -----------------
If the ratio of
Indebtedness for
Borrowed Money to =>1.75 and =>2.25 and =>2.50 and
EBITDA is: < 1.75 < 2.25 < 2.50 < 3.00 >3.00
or
Borrower's senior
unsecured long-term
debt rating is
Investment Grade (as
defined in the
Agreement)(1)
then then then then then
-----------------------------------------------------------
- ---------------
(1) Level I will apply if the Borrower attains Investment Grade
Level I Level II Level III Level IV Level V
-----------------------------------------------------------
the Applicable Base
Rate Margin shall
be equal to: 0.00% 0.00% 0.00% 0.00% 0.00%
the Applicable
Eurodollar Rate
Margin shall be
equal to: 0.275% 0.325% 0.425% 0.50% 0.6875%
the Facility Fee
shall be equal to: 0.15% 0.175% 0.20% 0.25% 0.3125%
the Drawn cost
(Facility Fee +
Applicable Euro-
dollar Rate
Margin) shall be: 0.425% 0.50% 0.625% 0.75% 1.00%
the fee in respect
of Standby Letters
of Credit shall
equal: 0.30% 0.375% 0.50% 0.625% 0.875%
the fee in respect
of Documentary
Letters of Credit
shall equal: 0.15% 0.20% 0.30% 0.35% 0.50%
SCHEDULES
Schedule I -- Commitments
Schedule II -- Applicable Lending Offices and
Addresses for Notices
Schedule III -- Applicable Base Rate Margin, Applicable Eurodollar Rate
Margin, Facility Fee and Letter of Credit Fees
Schedule 3.1(i) -- Real Property
Schedule 4.3(c) -- Tax Matters
Schedule 4.8 -- Subsidiaries
Schedule 4.22 -- Certain Indebtedness
Schedule 7.1 -- Existing Liens
Schedule 7.6 -- Existing Investments
Schedule 7.11 -- Contingent Obligations
EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Term Loan Note
Exhibit A-3 - Form of Competitive Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Conversion or
Continuation
Exhibit D - Form of Letter of Credit Reimbursement
Agreement
Exhibit E - Form of Letter of Credit Request
Exhibit F - Form of Borrower Pledge Agreement
Exhibit G-1 - Form of Borrower Security Agreement
Exhibit G-2 - Form of Subsidiary Security Agreement
Exhibit H - Form of Guaranty
Exhibit I-1 - Form of Opinion of Simpson, Thacher & Bartlett
Exhibit I-2 - Form of Opinion of Joel K. Bedol, Esq.
Exhibit J - Form of Assignment and Acceptance
Exhibit K - Form of Competitive Bid Request
Exhibit L - Form of Notice of Competitive Bid Request
Exhibit M - Form of Competitive Bid
Exhibit N - Form of Competitive Bid Accept/Reject Letter
<TABLE>
EXHIBIT 11
NINE WEST GROUP INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(in thousands except per share data)
13 weeks ended 26 weeks ended
<S> <C> <C> <C> <C>
August 3 July 29 August 3 July 29
1996 1995 (1) 1996 1995 (1)
------- ------- ------- --------
PRIMARY EARNINGS PER SHARE
Computation for Statement of Income:
Net income available for common stock $25,968 $ 3,024 $41,018 $17,074
======= ======= ======= =======
Shares:
Weighted average number of common
shares outstanding 35,656 34,923 35,529 34,866
Add: Net effect of dilutive stock options
based on the treasury stock method 1,267 - 1,226 -
------- ------- ------- -------
Weighted average number of shares outstanding
including common stock equivalents 36,923 34,923 36,755 34,866
======= ======= ======= =======
Primary earnings per share, as adjusted $ 0.70 $ 0.09 $ 1.12 $ 0.49
======= ======= ======= =======
ADDITIONAL PRIMARY COMPUTATION
Net income available for common stock $ 3,024 $17,074
======= =======
Shares:
Weighted average number of common
shares outstanding 34,923 34,866
Add: Net effect of dilutive stock options
based on the treasury stock method 659 318
------- -------
Weighted average number of shares outstanding
including common stock equivalents 35,582 35,184
======= =======
Primary earnings per share, as adjusted $ 0.08 $ 0.49
======= =======
FULLY DILUTED EARNINGS PER SHARE
Computation for Statement of Income:
Reconciliation of net income to amount used for
fully diluted computation in Statement of Income:
Income per primary calculation above $25,968 $41,018
Add: Interest on 5.5% convertible
debentures, net of tax effect 702 702
------- -------
Adjusted net income $26,670 $41,720
======= =======
Reconciliation of weighted average common
shares outstanding to amount used for fully
diluted computation in Statement of Income:
Weighted average number of common shares
outstanding 35,656 35,529
Add: Weighted average shares issuable from
assumed exercise of 5.5% convertible debentures 1,310 655
Net effect of dilutive stock options based on
the treasury stock method 1,352 1,757
------- -------
Fully diluted shares 38,318 37,941
======= =======
Fully diluted earnings per share $ 0.70 $ 1.10
======= =======
(1) Fully diluted earnings per common and common equivalent share are equal to primary
earnings per share for the 1995 periods.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-01-1997
<PERIOD-END> AUG-03-1996
<CASH> 34,208
<SECURITIES> 0
<RECEIVABLES> 61,089
<ALLOWANCES> 0
<INVENTORY> 438,835
<CURRENT-ASSETS> 626,459
<PP&E> 123,409
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,150,664
<CURRENT-LIABILITIES> 232,891
<BONDS> 181,338
0
0
<COMMON> 356
<OTHER-SE> 315,666
<TOTAL-LIABILITY-AND-EQUITY> 1,150,664
<SALES> 775,801
<TOTAL-REVENUES> 775,801
<CGS> 447,389
<TOTAL-COSTS> 241,438
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,848
<INCOME-PRETAX> 68,364
<INCOME-TAX> 27,346
<INCOME-CONTINUING> 41,018
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41,018
<EPS-PRIMARY> 1.12
<EPS-DILUTED> 1.10
</TABLE>
